ProElite, Inc. (fka PELE)

[Lighthouse]

On April 4, 2012, SMDI issued a promissory note in the principal amount of $249,999. This note bears interest at an annual rate of 10% with principal and interest due on October 4, 2012. Until the note is paid, the holder has the right to convert some or all of the principal balance of the note into the shares of the Company’s common stock at $0.30 per share. In consideration of the loan to the Company, the Company issued a five-year option to purchase 833,330 shares of the Company’s common stock at $0.40 per share and a five-year option to purchase from the Company 12,500,000 shares of the Common Stock of ProElite, Inc. (“PEI”) owned by the Company at an exercise price of $0.02 per share. The option shares represent approximately 4.99% of the outstanding shares of PEI after giving effect to the conversion of PEI’s Series A Convertible Preferred Stock owned by the Company, but before the anticipated 1:25 reverse split of the Common Stock of PEI. All of the underlying shares related to this note carry “piggyback” registration rights.