On June 3, 2013, CornerWorld Corporation received a notice of default from counsel representing IU Holdings, LP (IUH) pursuant to that certain promissory note dated March 30, 2011 by and among the company and IUH providing notice that the company had a principal payment due on May 31, 2013 totaling $187,500. IUH's counsel notified the company that it had five business days to make the required payments or it would be in default pursuant to the terms of the Promissory Note. All of the company's secured payables are cross-defaulted and, accordingly, the company is now in default to all of its secured lenders including all Senior Lenders and Junior Lenders.

Amounts due to secured creditors as of June 4, 2013 total approximately $7.6 million. The company is currently exploring all of its options to address the notice of default including, but not limited to selling assets and raising additional capital in the form of either debt or equity. There can be no assurances at this time that the company will be successful in its efforts to raise additional capital or refinance amounts payable to the Senior Lenders.