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The issuer reported convertible debt agreements that included embedded conversion options; the issuer accounted for these options as derivative liabilities. The firm's approach for substantively testing the fair value of the derivative liabilities was to test the issuer's process. The following deficiencies were identified: · The firm did not perform any substantive procedures to evaluate whether the issuer's accounting for the conversion options embedded in the convertible debt agreements as derivative liabilities was in conformity with FASB ASC Topic 815 Derivative and Hedging Activities. (AS 2301.08)

The issuer reported convertible debt agreements that included embedded conversion options; the issuer accounted for these options as derivative liabilities. The firm's approach for substantively testing the fair value of the derivative liabilities was to test the issuer's process. The following deficiencies were identified: · The firm did not identify and evaluate the issuer's omission of disclosures related to the inputs and quantitative information about the significant unobservable inputs used to measure the fair value of the derivative liabilities that were required by FASB ASC Topic 820 Fair Value Measurement. (AS 2810.30 and .31)

During the year the issuer entered into a convertible debt agreement that included an embedded conversion option; the issuer accounted for this option as a derivative liability. The following deficiency was identified: · The firm did not identify and evaluate misstatements in the financial statements and required disclosures related to this derivative liability. (AS 2810.30 and .31)

The firm did not identify and evaluate the issuer's omission of certain disclosures related to these derivative losses that were required under FASB ASC Topic 230 Statement of Cash Flows. (AS 2810.30 and .31)

During the year the issuer entered into certain equity-related agreements; the issuer accounted for each of these agreements as one or more derivatives. The following deficiencies were identified: · The firm did not evaluate whether the issuer's accounting for one of these agreements was in conformity with FASB ASC Topic 815 Derivatives and Hedging. (AS 2301.08)

The firm did not determine whether certain other instruments should have been accounted for as paid-in capital in conformity with FASB ASC Subtopic 470-20 Debt with Conversion and Other Options. (AS 2810.30)

During the audit the firm did not identify and appropriately address that the issuer's accounting for warrants and another derivative instrument as equity was not in conformity with FASB ASC Topic 815 Derivatives and Hedging. (AS 2810.30) Unrelated to our review the issuer reevaluated its accounting for these warrants and the derivative instrument and concluded that a material misstatement existed that had not been previously identified. The issuer subsequently corrected this misstatement in a restatement of its financial statements and the firm revised and reissued its report on the financial statements.