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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 26pt"></p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="padding-bottom: 1.7pt; text-align: left; font-weight: bold"> </td>
<td colspan="6" style="border-bottom: black 1.5pt solid; text-align: center; font-weight: bold"><b>Stock Option Plans</b></td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left; font-weight: bold"> </td>
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td colspan="2" style="padding-bottom: 1.7pt; text-align: left"> </td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="padding-bottom: 1.7pt; text-align: left; font-weight: bold"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; font-weight: bold"><b>2003</b></td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left; font-weight: bold"> </td>
<td style="padding-bottom: 1.7pt; text-align: left; font-weight: bold"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; font-weight: bold"><b>2008</b></td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left; font-weight: bold"> </td>
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td colspan="2" style="padding-bottom: 1.7pt; text-align: left"> </td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td style="border-bottom: black 1.5pt solid; text-align: left; font-weight: bold"><b>Shares Available For Issuance</b>:</td>
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td colspan="2" style="padding-bottom: 1.7pt; text-align: left"> </td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td colspan="2" style="padding-bottom: 1.7pt; text-align: left"> </td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td colspan="2" style="padding-bottom: 1.7pt; text-align: left"> </td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-align: left; text-indent: -9pt; padding-left: 11pt">Total reserved for stock options and restricted stock</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">160,000</td>
<td nowrap="nowrap" style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">10,000,000</td>
<td nowrap="nowrap" style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td colspan="2" style="text-align: left"> </td>
<td nowrap="nowrap" style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: left">Restricted stock issued net of cancellations</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">(31,125</td>
<td nowrap="nowrap" style="text-align: left">)</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">(256,891</td>
<td nowrap="nowrap" style="text-align: left">)</td>
<td style="text-align: left"> </td>
<td colspan="2" style="text-align: left"> </td>
<td nowrap="nowrap" style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-align: left">Stock options granted</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">(154,449</td>
<td nowrap="nowrap" style="text-align: left">)</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">(254,500</td>
<td nowrap="nowrap" style="text-align: left">)</td>
<td style="text-align: left"> </td>
<td colspan="2" style="text-align: left"> </td>
<td nowrap="nowrap" style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: left">Add back options cancelled before exercise</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">67,849</td>
<td nowrap="nowrap" style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">54,167</td>
<td nowrap="nowrap" style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td colspan="2" style="text-align: left"> </td>
<td nowrap="nowrap" style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 1.7pt; text-align: left">Options cancelled by plan vote</td>
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right">-</td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right">-</td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td colspan="2" style="padding-bottom: 1.7pt; text-align: left"> </td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-bottom: 3.45pt; text-align: left">Remaining shares available for future grants</td>
<td style="padding-bottom: 3.45pt; text-align: left"> </td>
<td style="border-bottom: black 4.5pt double; text-align: left"> </td>
<td style="border-bottom: black 4.5pt double; text-align: right">42,275</td>
<td nowrap="nowrap" style="padding-bottom: 3.45pt; text-align: left"> </td>
<td style="padding-bottom: 3.45pt; text-align: left"> </td>
<td style="border-bottom: black 4.5pt double; text-align: left"> </td>
<td style="border-bottom: black 4.5pt double; text-align: right">9,542,776</td>
<td nowrap="nowrap" style="padding-bottom: 3.45pt; text-align: left"> </td>
<td style="padding-bottom: 3.45pt; text-align: left"> </td>
<td colspan="2" style="padding-bottom: 3.45pt; text-align: left"> </td>
<td nowrap="nowrap" style="padding-bottom: 3.45pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td colspan="9" style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="padding-bottom: 1.7pt; text-align: left; font-weight: bold"> </td>
<td colspan="3" style="border-bottom: black 1.5pt solid; text-align: center; font-weight: bold"><b>Not Pursuant to a Plan</b></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 58%; text-align: left">Total granted</td>
<td style="width: 1%; text-align: left"> </td>
<td style="width: 1%; text-align: left"> </td>
<td style="width: 11%; text-align: right">154,449</td>
<td nowrap="nowrap" style="width: 1%; text-align: left"> </td>
<td style="width: 1%; text-align: left"> </td>
<td style="width: 1%; text-align: left"> </td>
<td style="width: 11%; text-align: right">254,500</td>
<td nowrap="nowrap" style="width: 1%; text-align: left"> </td>
<td style="width: 1%; text-align: left"> </td>
<td style="width: 1%; text-align: left"> </td>
<td style="width: 11%; text-align: right">310,000</td>
<td nowrap="nowrap" style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; text-indent: 0pt; padding-left: -22pt">Less: Options cancelled</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">(67,849</td>
<td nowrap="nowrap" style="text-align: left">)</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">(54,167</td>
<td nowrap="nowrap" style="text-align: left">)</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">(138,333</td>
<td nowrap="nowrap" style="text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 1.7pt; text-align: left; text-indent: 22pt; padding-left: -33pt">Options exercised</td>
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right">(35,600</td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left">)</td>
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right">(13,000</td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left">)</td>
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right">(66,667</td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Shares outstanding, before restricted stock</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">51,000</td>
<td nowrap="nowrap" style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">187,333</td>
<td nowrap="nowrap" style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">105,000</td>
<td nowrap="nowrap" style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 1.7pt; text-align: left">Restricted stock issued, net of cancellations</td>
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right">31,125</td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right">256,891</td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right">28,484</td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 3.45pt; text-align: left">Outstanding shares at December 31, 2012</td>
<td style="padding-bottom: 3.45pt; text-align: left"> </td>
<td style="border-bottom: black 4.5pt double; text-align: left"> </td>
<td style="border-bottom: black 4.5pt double; text-align: right">82,125</td>
<td nowrap="nowrap" style="padding-bottom: 3.45pt; text-align: left"> </td>
<td style="padding-bottom: 3.45pt; text-align: left"> </td>
<td style="border-bottom: black 4.5pt double; text-align: left"> </td>
<td style="border-bottom: black 4.5pt double; text-align: right">444,224</td>
<td nowrap="nowrap" style="padding-bottom: 3.45pt; text-align: left"> </td>
<td style="padding-bottom: 3.45pt; text-align: left"> </td>
<td style="border-bottom: black 4.5pt double; text-align: left"> </td>
<td style="border-bottom: black 4.5pt double; text-align: right">133,484</td>
<td nowrap="nowrap" style="padding-bottom: 3.45pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 26pt"></p>
154449
326750
310000
154449
254500
310000
-67849
-75500
-138333
-67849
-54167
-138333
-35600
-13000
-66667
-23767
-35600
-13000
-66667
51000
238250
105000
51000
187333
105000
31125
320978
28484
31125
256891
28484
0.0013
0.0094
0.0092
0.018
0.0189
0.0205
0.0205
0.0347
0.15
0.15
0.0015
0.0015
1.29
1.31
0.0131
0.0137
1.41
1.37
0.0142
0.0142
343333
339511
349668
78250
70000
224133
243592
750
15499
19767
400000
100000
50000
150000
736016
3225
19833
3900
6000
40000
76800
25691
6300
34133
2850
638
10000
1037
24576
24576
1813
1813
25500
28000
125
125
25000
25000
95959
517989
124004
14.75
16.80
12.45
12.60
5
14.40
20
21.3
22.7
21.1
20.1
10
15
7.5
6
15.9
20
15
20
22.5
22.5
22.5
15
20
15
25
15
25
15
25
15
25
15
25
30
20.00
20.10
10.60
11.34
885300
885300
316042
181960
322590
64088
131416
-33042
-14334
-24500
-5000
16.60
17.20
14.40
4.48
17.20
18.38
21.2
3.37
16.60
554000
720000
2097000
1149000
64088
P3Y11M23D
2853
40000
76800
3228
19834
39000
6000
25695
6300
34146
638
95960
350454
1050454
20.46
P2Y11M19D
2017-10-31
2014-07-24
2017-05-31
P6Y6M
P6Y6M
P6Y6M
P6Y6M
13.38
30.76
P0Y11M16D
82125
559228
133484
82125
444244
133484
530000
207000
339000
141000
56000
224000
169000
4606000
3684000
400000
371000
0.15
.15
P6Y9M
P6Y1M10D
P4Y10M10D
400000
100000
50000
150000
2017-08-31
2017-09-20
2017-10-17
2017-11-06
700000
20.61
4437346
3854400
10699990
1720000
4437346
3854400
10699990
.999
.499
40.00
20.00
P5Y
100000
1000000
242000
726000
323000
3000
3000
61000
20000000
5000000
P5Y
.1
5000000
400000
4840000
P5Y
20.00
968004
P1Y
3455000
5556
5556
1000000
500000
1500000
100000
50000
150000
21.30
22.70
21.10
P5Y
P5Y
P5Y
3000000
250000
250000
157463
157463
250000
45164
3113366
113366
61000
2879166
165460
157130
22.50
15.90
20.00
10
15.00
7.50
6.00
15.00
20
22.50
22.50
30.00
20.17
20.00
21.30
22.70
21.10
31125
155761
821125
444224
82125
394011
2015-02-09
2014-06-30
2014-11-13
2013-09-30
2013-10-28
2014-02-28
2014-03-15
2014-11-13
2014-12-03
2015-02-09
2015-03-18
2014-12-07
90228
61867
22557
23000
90228
123708
90228
90000
67671
92781
5119
22557
30927
302059
225868
4380000
3603000
93902000
109469000
2976000
1840000
703000
2543000
2127000
849000
-61520
-61520
-2272597
9592989
P1Y
42000
P10Y
500000
37,000
1,060
7,900
1069000
2139000
2139000
5585000
1035000
979000
355000
200000
4.43
16.60
9.94
18.4
16545
9.40
653150
382000
82000
464000
466000
454000
196000
650000
383000
83000
649000
444000
192000
636000
451000
198000
635000
447000
187000
634000
441000
194000
620000
113000
46000
159000
431000
189000
0
0
1-for-10
3747210
8995571
1395840
6068469
1342044
1166858
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">As of September 30, 2013 and 2012, intangible
assets related to this Acquisition are summarized as follows:</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%; font: 10pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="6" style="border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black"><b>2013</b></font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black"><b>2012</b></font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="line-height: 115%"> </td>
<td style="text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black"><b>Estimated</b></font></td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black"><b>Accumulated</b></font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black"><b>Life</b></font></td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: justify; line-height: 115%; text-indent: 14pt"><font style="font: 10pt Times New Roman, Times, Serif; color: black"><b>Cost</b></font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black"><b>Amortization</b></font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black"><b>Net</b></font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black"><b>Net</b></font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-right: 5.05pt; padding-left: 9pt; text-indent: -9pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Contract related intangible asset:</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 38%; padding-right: 5.05pt; padding-left: 0.25in; text-indent: -9pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Cato Research discounted contract</font></td>
<td style="width: 10%; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">3 years</font></td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; border-bottom: black 1pt solid; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">$</font></td>
<td style="width: 10%; border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">355,000</font></td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; border-bottom: black 1pt solid; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">$</font></td>
<td style="width: 10%; border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">355,000</font></td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; border-bottom: black 1pt solid; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">$</font></td>
<td style="width: 10%; border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">—</font></td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; border-bottom: black 1pt solid; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">$</font></td>
<td style="width: 10%; border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">—</font></td>
<td style="width: 1%; line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-right: 5.05pt; padding-left: 9pt; text-indent: -9pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Technology related intangible assets:</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-right: 5.05pt; padding-left: 0.25in; text-indent: -9pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Patents for the AzoneTS-based product candidates and formulation</font></td>
<td style="text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">4.5 years</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">1,305,000</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">—</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">1,305,000</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">1,305,000</font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-right: 5.05pt; padding-left: 0.25in; text-indent: -9pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Drug Master Files containing formulation, clinical and safety documentation used by the FDA</font></td>
<td style="text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">4.5 years</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">1,500,000</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">—</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">1,500,000</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">1,500,000</font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-right: 5.05pt; padding-left: 0.25in; text-indent: -9pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">In-process pharmaceutical products for 2 indications</font></td>
<td style="text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">4.5 years</font></td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">6,820,000</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">—</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">6,820,000</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">6,820,000</font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-right: 5.05pt; padding-left: 30pt; text-indent: -10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Total technology related intangible assets</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">9,625,000</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">—</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">9,625,000</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">9,625,000</font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-right: 5.05pt; text-indent: 0.75in; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Total, net</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">9,980,000</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">355,000</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">9,625,000</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">9,625,000</font></td>
<td style="line-height: 115%"> </td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 20pt">The Company’s intangible assets are related
to the acquisition of assets from Durham Pharmaceuticals Ltd. in 2007.  As of December 31, 2012, 2011and 2010, intangible
assets related to the ETI Acquisition are summarized as follows:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 20pt"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="3" style="text-align: center"> </td>
<td nowrap="nowrap" style="text-align: center"> </td>
<td colspan="7" style="border-bottom: black 1.5pt solid; font-weight: bold; text-align: center"><font style="font-size: 10pt"><b>2012</b></font></td>
<td nowrap="nowrap" style="font-weight: bold; text-align: center"> </td>
<td colspan="3" style="border-bottom: black 1.5pt solid; font-weight: bold; text-align: center"><font style="font-size: 10pt"><b>2011</b></font></td>
<td nowrap="nowrap" style="font-weight: bold; text-align: center"> </td>
<td nowrap="nowrap" style="font-weight: bold; text-align: center"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: center"> </td>
<td style="font-weight: bold; text-align: center"><font style="font-size: 10pt"><b>Estimated</b></font></td>
<td colspan="3" style="text-align: center"> </td>
<td nowrap="nowrap" style="text-align: center"> </td>
<td colspan="3" style="font-weight: bold; text-align: center"><font style="font-size: 10pt"><b>Accumulated</b></font></td>
<td nowrap="nowrap" style="font-weight: bold; text-align: center"> </td>
<td colspan="3" style="text-align: center"> </td>
<td nowrap="nowrap" style="text-align: center"> </td>
<td colspan="3" style="text-align: center"> </td>
<td nowrap="nowrap" style="text-align: center"> </td>
<td nowrap="nowrap" style="text-align: center"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: center"> </td>
<td style="border-bottom: black 1.5pt solid; font-weight: bold; text-align: center"><font style="font-size: 10pt"><b>Life</b></font></td>
<td colspan="3" style="border-bottom: black 1.5pt solid; font-weight: bold; text-align: center"><font style="font-size: 10pt"><b>Cost</b></font></td>
<td nowrap="nowrap" style="font-weight: bold; text-align: center"> </td>
<td colspan="3" style="border-bottom: black 1.5pt solid; font-weight: bold; text-align: center"><font style="font-size: 10pt"><b>Amortization</b></font></td>
<td nowrap="nowrap" style="font-weight: bold; text-align: center"> </td>
<td colspan="3" style="border-bottom: black 1.5pt solid; font-weight: bold; text-align: center"><font style="font-size: 10pt"><b>Net</b></font></td>
<td nowrap="nowrap" style="font-weight: bold; text-align: center"> </td>
<td colspan="3" style="border-bottom: black 1.5pt solid; font-weight: bold; text-align: center"><font style="font-size: 10pt"><b>Net</b></font></td>
<td nowrap="nowrap" style="font-weight: bold; text-align: center"> </td>
<td nowrap="nowrap" style="font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 10pt">Contract related intangible asset:</font></td>
<td> </td>
<td colspan="3"> </td>
<td nowrap="nowrap"> </td>
<td colspan="3"> </td>
<td nowrap="nowrap"> </td>
<td colspan="3"> </td>
<td nowrap="nowrap"> </td>
<td colspan="3"> </td>
<td nowrap="nowrap"> </td>
<td nowrap="nowrap"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 29%; padding-left: 11pt"><font style="font-size: 10pt">Cato Research discounted contract</font></td>
<td style="width: 11%; text-align: center"><font style="font-size: 10pt">3 years</font></td>
<td style="width: 1%; text-align: right"> </td>
<td style="width: 1%; border-bottom: black 1.5pt solid"><font style="font-size: 10pt">$</font></td>
<td style="width: 9%; border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">355,000</font></td>
<td nowrap="nowrap" style="width: 1%"> </td>
<td style="width: 1%; text-align: right"> </td>
<td style="width: 1%; border-bottom: black 1.5pt solid"><font style="font-size: 10pt">$</font></td>
<td style="width: 9%; border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">355,000</font></td>
<td nowrap="nowrap" style="width: 1%"> </td>
<td style="width: 1%; text-align: right"> </td>
<td style="width: 1%; border-bottom: black 1.5pt solid"><font style="font-size: 10pt">$</font></td>
<td style="width: 9%; border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">—</font></td>
<td nowrap="nowrap" style="width: 1%"> </td>
<td style="width: 1%; text-align: right"> </td>
<td style="width: 1%; border-bottom: black 1.5pt solid"><font style="font-size: 10pt">$</font></td>
<td style="width: 9%; border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">—</font></td>
<td nowrap="nowrap" style="width: 1%"> </td>
<td nowrap="nowrap" style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 0pt"><font style="font-size: 10pt">Technology related intangible assets:</font></td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td style="text-align: right"> </td>
<td nowrap="nowrap"> </td>
<td style="text-align: right"> </td>
<td> </td>
<td style="text-align: right"> </td>
<td nowrap="nowrap"> </td>
<td style="text-align: right"> </td>
<td> </td>
<td style="text-align: right"> </td>
<td nowrap="nowrap"> </td>
<td style="text-align: right"> </td>
<td> </td>
<td style="text-align: right"> </td>
<td nowrap="nowrap"> </td>
<td nowrap="nowrap"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-left: 11pt"><font style="font-size: 10pt">Patents for the AzoneTS-based product candidates and formulation</font></td>
<td style="text-align: center"><font style="font-size: 10pt">6 years</font></td>
<td style="text-align: right"> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">1,305,000</font></td>
<td nowrap="nowrap"> </td>
<td style="text-align: right"> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">—</font></td>
<td nowrap="nowrap"> </td>
<td style="text-align: right"> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">1,305,000</font></td>
<td nowrap="nowrap"> </td>
<td style="text-align: right"> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">1,305,000</font></td>
<td nowrap="nowrap"> </td>
<td nowrap="nowrap"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 11pt"><font style="font-size: 10pt">Drug Master Files containing formulation, clinical and safety documentation used by the FDA</font></td>
<td style="text-align: center">6<font style="font-size: 10pt"> years</font></td>
<td style="text-align: right"> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">1,500,000</font></td>
<td nowrap="nowrap"> </td>
<td style="text-align: right"> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">—</font></td>
<td nowrap="nowrap"> </td>
<td style="text-align: right"> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">1,500,000</font></td>
<td nowrap="nowrap"> </td>
<td style="text-align: right"> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">1,500,000</font></td>
<td nowrap="nowrap"> </td>
<td nowrap="nowrap"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-left: 11pt"><font style="font-size: 10pt">In-process pharmaceutical products for 2 indications</font></td>
<td style="text-align: center"><font style="font-size: 10pt"> 6years</font></td>
<td style="text-align: right"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">6,820,000</font></td>
<td nowrap="nowrap"> </td>
<td style="text-align: right"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">—</font></td>
<td nowrap="nowrap"> </td>
<td style="text-align: right"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">6,820,000</font></td>
<td nowrap="nowrap"> </td>
<td style="text-align: right"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">6,820,000</font></td>
<td nowrap="nowrap"> </td>
<td nowrap="nowrap"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 11pt"><font style="font-size: 10pt">Total technology related intangible assets</font></td>
<td> </td>
<td style="text-align: right"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">9,625,000</font></td>
<td nowrap="nowrap"> </td>
<td style="text-align: right"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">—</font></td>
<td nowrap="nowrap"> </td>
<td style="text-align: right"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">9,625,000</font></td>
<td nowrap="nowrap"> </td>
<td style="text-align: right"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">9,625,000</font></td>
<td nowrap="nowrap"> </td>
<td nowrap="nowrap"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-left: 22pt"><font style="font-size: 10pt">Total, net</font></td>
<td> </td>
<td style="text-align: right"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">9,980,000</font></td>
<td nowrap="nowrap"> </td>
<td style="text-align: right"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">355,000</font></td>
<td nowrap="nowrap"> </td>
<td style="text-align: right"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">9,625,000</font></td>
<td nowrap="nowrap"> </td>
<td style="text-align: right"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">9,625,000</font></td>
<td nowrap="nowrap"> </td>
<td nowrap="nowrap"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Estimated amortization expense for each
of the next five calendar years is as follows:</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%; font: 10pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><b> </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><b> </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p></td>
<td style="line-height: 115%"> </td>
<td colspan="2">
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Estimated</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Amortization</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Expense</b></p></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 83%; text-align: justify; line-height: 115%; text-indent: 12pt"><font style="font: 10pt Times New Roman, Times, Serif; color: black">2013</font></td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">$</font></td>
<td style="width: 14%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">—</font></td>
<td style="width: 1%; line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: justify; line-height: 115%; text-indent: 12pt"><font style="font: 10pt Times New Roman, Times, Serif; color: black">2014</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">—</font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-align: justify; line-height: 115%; text-indent: 12pt"><font style="font: 10pt Times New Roman, Times, Serif; color: black">2015</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">1,069,000</font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: justify; line-height: 115%; text-indent: 12pt"><font style="font: 10pt Times New Roman, Times, Serif; color: black">2016</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">2,139,000</font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-align: justify; line-height: 115%; text-indent: 12pt"><font style="font: 10pt Times New Roman, Times, Serif; color: black">2017</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">2,139,000</font></td>
<td style="line-height: 115%"> </td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 26pt">Estimated amortization expense
for each of the next five years is as follows:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 86%">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"><b><u>Year Ending December 31, 2012:</u></b></p></td>
<td style="width: 14%; border-bottom: black 1.5pt solid">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"><b>Estimated</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"><b>Amortization</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"><b>Expense<font style="color: black; letter-spacing: -1pt"> </font></b></p></td></tr>
<tr style="vertical-align: top; background-color: #CCEEFF">
<td style="text-align: left">2013</td>
<td style="text-align: left">$            —</td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="text-align: left">2014</td>
<td style="text-align: left">1,604,000</td></tr>
<tr style="vertical-align: top; background-color: #CCEEFF">
<td style="text-align: left">2015</td>
<td style="text-align: left">1,604,000</td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="text-align: left">2016</td>
<td style="text-align: left">1,604,000</td></tr>
<tr style="vertical-align: top; background-color: #CCEEFF">
<td style="text-align: left">2017</td>
<td style="text-align: left">1,604,000</td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="text-align: left">2018</td>
<td style="text-align: left">1,604,000</td></tr>
<tr style="vertical-align: top; background-color: #CCEEFF">
<td style="text-align: left">2019</td>
<td style="text-align: left">1,604,000</td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Future minimum lease payments for each
of the next 5 years under these operating leases are as follows:</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%; font: 10pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black"><b>Franklin</b></font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black"><b>Philadelphia</b></font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black"><b>Total</b></font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">For the period ending September 30,</font></td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 58%; text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">2013</font></td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">$</font></td>
<td style="width: 11%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">113,000</font></td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">$</font></td>
<td style="width: 11%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">46,000</font></td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">$</font></td>
<td style="width: 11%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">159,000</font></td>
<td style="width: 1%; line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">2014</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">447,000</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">187,000</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">634,000</font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">2015</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">444,000</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">192,000</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">636,000</font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">2016</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">454,000</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">196,000</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">650,000</font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">2017</font></td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">382,000</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">82,000</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">464,000</font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Total</font></td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">1,840,000</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">703,000</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">2,543,000</font></td>
<td style="line-height: 115%"> </td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 26pt">Future minimum lease payments
for each of the next five years under these operating leases at December 31, 2012 are approximately as follows:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td style="padding-bottom: 1.7pt">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 13pt"><b><u>Year Ending December
31, 2012:</u></b></p></td>
<td style="padding-bottom: 1.7pt; text-align: left; font-weight: bold"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; font-weight: bold">Franklin</td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left; font-weight: bold"> </td>
<td style="padding-bottom: 1.7pt; text-align: left; font-weight: bold"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; font-weight: bold">Philadelphia</td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left; font-weight: bold"> </td>
<td style="padding-bottom: 1.7pt; text-align: left; font-weight: bold"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; font-weight: bold">Total</td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 58%; text-align: left; text-indent: 13pt">2013                                                                      </td>
<td style="width: 1%; text-align: left"> </td>
<td style="width: 1%; text-align: left">$</td>
<td style="width: 11%; text-align: right">421,000</td>
<td nowrap="nowrap" style="width: 1%; text-align: left"> </td>
<td style="width: 1%; text-align: left"> </td>
<td style="width: 1%; text-align: left">$</td>
<td style="width: 11%; text-align: right">185,000</td>
<td nowrap="nowrap" style="width: 1%; text-align: left"> </td>
<td style="width: 1%; text-align: left"> </td>
<td style="width: 1%; text-align: left">$</td>
<td style="width: 11%; text-align: right">606,000</td>
<td nowrap="nowrap" style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: left; text-indent: 13pt">2014                                                                      </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">431,000</td>
<td nowrap="nowrap" style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">189,000</td>
<td nowrap="nowrap" style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">620,000</td>
<td nowrap="nowrap" style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-align: left; text-indent: 13pt">2015                                                                      </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">441,000</td>
<td nowrap="nowrap" style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">194,000</td>
<td nowrap="nowrap" style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">635,000</td>
<td nowrap="nowrap" style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: left; text-indent: 13pt">2016                                                                      </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">451,000</td>
<td nowrap="nowrap" style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">198,000</td>
<td nowrap="nowrap" style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">649,000</td>
<td nowrap="nowrap" style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 1.7pt; text-align: left; text-indent: 13pt">2017                                                                      </td>
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right">383,000</td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right">83,000</td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right">466,000</td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-bottom: 3.45pt; text-align: left; text-indent: 13pt">Total                                                                      </td>
<td style="padding-bottom: 3.45pt; text-align: left"> </td>
<td style="border-bottom: black 4.5pt double; text-align: left">$</td>
<td style="border-bottom: black 4.5pt double; text-align: right">2,127,000</td>
<td nowrap="nowrap" style="padding-bottom: 3.45pt; text-align: left"> </td>
<td style="padding-bottom: 3.45pt; text-align: left"> </td>
<td style="border-bottom: black 4.5pt double; text-align: left">$</td>
<td style="border-bottom: black 4.5pt double; text-align: right">849,000</td>
<td nowrap="nowrap" style="padding-bottom: 3.45pt; text-align: left"> </td>
<td style="padding-bottom: 3.45pt; text-align: left"> </td>
<td style="border-bottom: black 4.5pt double; text-align: left">$</td>
<td style="border-bottom: black 4.5pt double; text-align: right">2,976,000</td>
<td nowrap="nowrap" style="padding-bottom: 3.45pt; text-align: left"> </td></tr>
</table>
<table cellspacing="0" cellpadding="0" style="width: 100%; font: 10pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black"><b>2013</b></font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black"><b>2012</b></font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 78%; padding-right: 2.15pt; padding-left: 9pt; text-indent: 9pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Derivative Warrant Liability as of January 1</font></td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">$</font></td>
<td style="width: 8%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">5,585,141</font></td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">$</font></td>
<td style="width: 8%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">1,035,337</font></td>
<td style="width: 1%; line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-right: 2.15pt; padding-left: 9pt; text-indent: 27pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Warrants issued under Montaur credit facility</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">—</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">6,000,000</font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-right: 2.15pt; padding-left: 9pt; text-indent: 27pt; line-height: 115%; font-size: 11pt"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Total unrealized losses included in net loss </font><font style="font: 7pt Times New Roman, Times, Serif; color: black">(1)</font><font style="font: 10pt Times New Roman, Times, Serif; color: black">	</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">1,061,682</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">500,000</font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-right: 2.15pt; padding-left: 9pt; text-indent: 27pt; line-height: 115%; font-size: 11pt"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Total realized losses included in net loss</font><font style="font: 7pt Times New Roman, Times, Serif; color: black">(1)</font><font style="font: 10pt Times New Roman, Times, Serif; color: black">	</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">—</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">1,438</font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-right: 2.15pt; padding-left: 9pt; text-indent: 27pt; line-height: 115%; font-size: 11pt"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Total unrealized gains included in net loss </font><font style="font: 7pt Times New Roman, Times, Serif; color: black">(1)</font><font style="font: 10pt Times New Roman, Times, Serif; color: black">	</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">(5,515,000</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">)</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">(595,038</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">)</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-right: 2.15pt; padding-left: 9pt; text-indent: 27pt; line-height: 115%; font-size: 11pt"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Total realized gains included in net loss </font><font style="font: 7pt Times New Roman, Times, Serif; color: black">(1)</font><font style="font: 10pt Times New Roman, Times, Serif; color: black">	</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">(152,668</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">)</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">(107,681</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">)</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-right: 2.15pt; padding-left: 0.75in; text-indent: -0.25in; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Reclassification of derivative warrant liability to additional paid-in capital for derivative warrants exercised</font></td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">—</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">(61,520</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">)</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-right: 2.15pt; padding-left: 9pt; text-indent: 9pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Derivative Warrant Liability as of September 30</font></td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">979,155</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">6,772,536</font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%"> __________________</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td colspan="8" style="line-height: 115%; font-size: 11pt"><font style="font: 7pt Times New Roman, Times, Serif; color: black">(1)</font><font style="font: 10pt Times New Roman, Times, Serif; color: black">	Included in Gain (Loss) on Revaluation of Derivative Warrant Liability in the Consolidated Statement of Operations.</font></td>
<td style="line-height: 115%"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 26pt">The table below presents the
changes in Level 3 derivative warrant liability measured at fair value on a recurring basis.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="padding-bottom: 1.7pt; text-align: left; font-weight: bold"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; font-weight: bold">2012</td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left; font-weight: bold"> </td>
<td style="padding-bottom: 1.7pt; text-align: left; font-weight: bold"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; font-weight: bold">2011</td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: left; font-weight: bold; text-indent: 13pt">Liabilities:</td>
<td style="text-align: left"> </td>
<td colspan="2" style="text-align: left"> </td>
<td nowrap="nowrap" style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td colspan="2" style="text-align: left"> </td>
<td nowrap="nowrap" style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 72%; text-align: left; text-indent: 13pt">Derivative warrant liability as of January 1</td>
<td style="width: 1%; text-align: left"> </td>
<td style="width: 1%; text-align: left">$</td>
<td style="width: 11%; text-align: right">1,035,337</td>
<td nowrap="nowrap" style="width: 1%; text-align: left"> </td>
<td style="width: 1%; text-align: left"> </td>
<td style="width: 1%; text-align: left">$</td>
<td style="width: 11%; text-align: right">1,544,996</td>
<td nowrap="nowrap" style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: left; text-indent: 26pt">Warrants issued under Montaur credit facility</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">8,295,000</td>
<td nowrap="nowrap" style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">-</td>
<td nowrap="nowrap" style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-align: left; text-indent: 26pt">Total unrealized losses included in net loss <font style="font-size: 7pt">(1)</font><font style="color: black; letter-spacing: -1pt"> </font></td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">500,000</td>
<td nowrap="nowrap" style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">2,191,147</td>
<td nowrap="nowrap" style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: left; text-indent: 26pt">Total realized losses included in net loss <font style="font-size: 7pt">(1)</font><font style="color: black; letter-spacing: -1pt"> </font></td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">1,438</td>
<td nowrap="nowrap" style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">978,678</td>
<td nowrap="nowrap" style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-align: left; text-indent: 26pt">Total unrealized gains included in net loss <font style="font-size: 7pt">(1)</font><font style="color: black; letter-spacing: -1pt"> </font></td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">(4,077,433</td>
<td nowrap="nowrap" style="text-align: left">)</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">(1,377,261</td>
<td nowrap="nowrap" style="text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: left; text-indent: 26pt">Total realized gains included in net loss <font style="font-size: 7pt">(1)</font><font style="color: black; letter-spacing: -1pt"> </font></td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">(107,681</td>
<td nowrap="nowrap" style="text-align: left">)</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">(29,626</td>
<td nowrap="nowrap" style="text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 1.7pt">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 13pt">Reclassification of
liability to additional paid-in capital</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 22pt; text-align: left; text-indent: 13pt">for warrants</p></td>
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right">(61,520</td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left">)</td>
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right">(2,272,597</td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-bottom: 3.45pt; text-align: left; text-indent: 13pt">Derivative warrant liability as of December 31</td>
<td style="padding-bottom: 3.45pt; text-align: left"> </td>
<td style="border-bottom: black 4.5pt double; text-align: left">$</td>
<td style="border-bottom: black 4.5pt double; text-align: right">5,585,141</td>
<td nowrap="nowrap" style="padding-bottom: 3.45pt; text-align: left"> </td>
<td style="padding-bottom: 3.45pt; text-align: left"> </td>
<td style="border-bottom: black 4.5pt double; text-align: left">$</td>
<td style="border-bottom: black 4.5pt double; text-align: right">1,035,337</td>
<td nowrap="nowrap" style="padding-bottom: 3.45pt; text-align: left"> </td></tr>
</table>
1061682
500000
1438
6000000
8295000
61520
61520
2272597
200357
7450
7033
89970
118465
153464
448940
935144
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 9pt"> The following
table shows the remaining shares available for future grants for each plan and outstanding shares:</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%; font: 10pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="6" style="border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black"><b>Equity Compensation Plans</b></font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="4" style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black"><b>2003 Plan</b></font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black"><b>2008 Plan</b></font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="4" style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="border-bottom: black 1pt solid; text-align: justify; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black"><b>Shares Available For Issuance</b></font></td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="4" style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-left: 9pt; text-align: justify; line-height: 115%; text-indent: -9pt"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Total reserved for stock options and restricted stock</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">160,000</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">10,000,000</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="4" style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 0.25in; text-align: justify; line-height: 115%; text-indent: 9pt"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Net restricted stock issued net of cancellations</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">(31,125</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">)</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">(320,978</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">)</font></td>
<td style="line-height: 115%"> </td>
<td colspan="4" style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-left: 0.25in; text-align: justify; line-height: 115%; text-indent: 9pt"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Stock options granted</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">(154,449</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">)</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">(326,750</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">)</font></td>
<td style="line-height: 115%"> </td>
<td colspan="4" style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 0.25in; text-align: justify; line-height: 115%; text-indent: 9pt"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Add back options cancelled before exercise</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">67,849</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">75,500</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="4" style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-left: 0.25in; text-align: justify; line-height: 115%; text-indent: 9pt"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Less shares no longer available due to Plan expiration</font></td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">(42,275</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">)</font></td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">—</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="4" style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 9pt; text-align: justify; line-height: 115%; text-indent: -9pt"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Remaining shares available for future grants at September 30, 2013</font></td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">—</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">9,427,772</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="4" style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td colspan="9" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black"><b>Not Pursuant to a Plan</b></font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: bottom; width: 63%; text-align: justify; line-height: 115%; text-indent: 0pt; padding-left: -10pt"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Stock options granted</font></td>
<td style="vertical-align: bottom; width: 1%; line-height: 115%"> </td>
<td style="vertical-align: bottom; width: 1%; line-height: 115%"> </td>
<td style="vertical-align: bottom; width: 9%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">154,449</font></td>
<td style="vertical-align: bottom; width: 1%; line-height: 115%"> </td>
<td style="vertical-align: bottom; width: 1%; line-height: 115%"> </td>
<td style="vertical-align: bottom; width: 1%; line-height: 115%"> </td>
<td style="vertical-align: bottom; width: 9%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">326,750</font></td>
<td style="vertical-align: bottom; width: 1%; line-height: 115%"> </td>
<td style="vertical-align: bottom; width: 1%; line-height: 115%"> </td>
<td style="vertical-align: bottom; width: 1%; line-height: 115%"> </td>
<td style="vertical-align: bottom; width: 9%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">310,000</font></td>
<td style="vertical-align: bottom; width: 1%; line-height: 115%"> </td>
<td style="vertical-align: top; width: 1%; line-height: 115%"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: bottom; text-align: justify; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Less:  
Stock options cancelled</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">(67,849</font></td>
<td style="vertical-align: bottom; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">)</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">(75,500</font></td>
<td style="vertical-align: bottom; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">)</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">(138,333</font></td>
<td style="vertical-align: bottom; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">)</font></td>
<td style="vertical-align: top; line-height: 115%"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: bottom; text-align: justify; line-height: 115%; text-indent: 27pt"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Stock
options exercised</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">(35,600</font></td>
<td style="vertical-align: bottom; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">)</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">(13,000</font></td>
<td style="vertical-align: bottom; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">)</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">(66,667</font></td>
<td style="vertical-align: bottom; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">)</font></td>
<td style="vertical-align: top; line-height: 115%"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: bottom; text-align: justify; line-height: 115%; text-indent: 0pt"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Net shares outstanding before restricted stock</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">51,000</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">238,250</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">105,000</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: top; line-height: 115%"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: bottom; text-align: justify; line-height: 115%; text-indent: 0pt"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Net restricted stock issued net of cancellations</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">31,125</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">320,978</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">28,484</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: top; line-height: 115%"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: bottom; text-align: justify; line-height: 115%; text-indent: 0pt"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Outstanding shares at September 30, 2013</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; line-height: 115%"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">82,125</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; line-height: 115%"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">559,228</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; line-height: 115%"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">133,484</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: top; line-height: 115%"> </td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%; font: 10pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black"><b>2013</b></font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black"><b>2012</b></font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 56%; padding-right: 5.05pt; padding-left: 9pt; text-indent: -9pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Risk-free interest rate</font></td>
<td style="width: 1%; text-align: right; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 18%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">0.13% - 1.89</font></td>
<td style="width: 2%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">%</font></td>
<td style="width: 1%; text-align: right; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 18%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">0.94% - 2.05</font></td>
<td style="width: 2%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">%</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-right: 5.05pt; padding-left: 9pt; text-indent: -9pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Expected dividend yield</font></td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">—</font></td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">—</font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-right: 5.05pt; padding-left: 9pt; text-indent: -9pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Expected term</font></td>
<td style="text-align: right; line-height: 115%"> </td>
<td colspan="2" style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">1 - 6.5 years</font></td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td colspan="2" style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">6.5 years</font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-right: 5.05pt; padding-left: 9pt; text-indent: -9pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Forfeiture rate (excluding fully vested stock options)</font></td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">15</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">%</font></td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">15</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">%</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-right: 5.05pt; padding-left: 9pt; text-indent: -9pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Expected volatility</font></td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">129% - 141</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">%</font></td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">129% - 137</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">%</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 26pt">The assumptions used principally
for options granted to employees in the years ended December 31, 2012 and 2011 were as follows:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="padding-bottom: 1.7pt; text-align: left; font-weight: bold"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: left; font-weight: bold">2012</td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left; font-weight: bold"> </td>
<td style="padding-bottom: 1.7pt; text-align: left; font-weight: bold"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: left; font-weight: bold">2011</td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 62%; text-align: left">Risk-free interest rate</td>
<td style="width: 1%; text-align: left"> </td>
<td style="width: 1%; text-align: left"> </td>
<td style="width: 17%; text-align: right">0.92% - 2.05</td>
<td nowrap="nowrap" style="width: 1%; text-align: left">%</td>
<td style="width: 1%; text-align: left"> </td>
<td style="width: 1%; text-align: left"> </td>
<td style="width: 15%; text-align: right">1.80% - 3.47</td>
<td nowrap="nowrap" style="width: 1%; text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: left">Expected dividend yield</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">—</td>
<td nowrap="nowrap" style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">—</td>
<td nowrap="nowrap" style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-align: left">Expected term</td>
<td style="text-align: left"> </td>
<td colspan="2" style="text-align: center">6.5 years</td>
<td nowrap="nowrap" style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td colspan="2" style="text-align: center">6.5 years</td>
<td nowrap="nowrap" style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: left">Forfeiture rate (excluding fully vested options)</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">15</td>
<td nowrap="nowrap" style="text-align: left">%</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">15</td>
<td nowrap="nowrap" style="text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-align: left">Expected volatility</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">131% - 142</td>
<td nowrap="nowrap" style="text-align: left">%</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">137% - 142</td>
<td nowrap="nowrap" style="text-align: left">%</td></tr>
</table>
<table cellspacing="0" cellpadding="0" style="width: 100%; font: 10pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="border-bottom: black 1pt solid">
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><b>Stock Options</b></p></td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid">
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Shares</b></p></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid">
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Weighted-</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Average</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Exercise</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Price</b></p></td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid">
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Weighted-</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Average</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Remaining</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Contractual</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Term</b></p></td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid">
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Aggregate</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Intrinsic</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Value</b></p></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-left: 9pt; text-indent: -9pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Outstanding at January 1, 2013</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">343,334</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">$</font></td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">14.75</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 0.25in; text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Granted</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">78,250</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">4.43</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-left: 0.25in; text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Exercised</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">—</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">—</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 0.25in; text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Forfeited or expired</font></td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">(71,916</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">)</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">13.38</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 55%; padding-left: 9pt; text-indent: -9pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Outstanding at September 30, 2013</font></td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; border-bottom: black 2.25pt double; line-height: 115%"> </td>
<td style="width: 9%; border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">349,668</font></td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">$</font></td>
<td style="width: 9%; border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">12.45</font></td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 9%; border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">5.80 years</font></td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">$</font></td>
<td style="width: 9%; border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">—</font></td>
<td style="width: 1%; line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 9pt; text-indent: -9pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Exercisable at September 30, 2013</font></td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">243,592</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">11.34</font></td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">4.86 years</font></td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">—</font></td>
<td style="line-height: 115%"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"></p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td style="padding-bottom: 1.7pt">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"><b><u>Options</u></b><u>:</u></p></td>
<td style="padding-bottom: 1.7pt; text-align: left; font-weight: bold"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>  </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>Shares</b></p></td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: center; font-weight: bold"> </td>
<td style="padding-bottom: 1.7pt; text-align: center; font-weight: bold"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>  </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>Weighted-</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>Average</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>Exercise</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>Price</b></p></td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: center; font-weight: bold"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: center">
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>Weighted-</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>Average</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>Remaining</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>Contractual</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>Term  </b></p></td>
<td style="padding-bottom: 1.7pt; text-align: center; font-weight: bold"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>  </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>Aggregate</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>Intrinsic</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>Value</b></p></td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-align: left">Outstanding at January 1, 2012</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">339,511</td>
<td nowrap="nowrap" style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left">$</td>
<td style="text-align: right">16,80</td>
<td nowrap="nowrap" style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td colspan="2" style="text-align: left"> </td>
<td nowrap="nowrap" style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: left">Granted</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">70,000</td>
<td nowrap="nowrap" style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left">$</td>
<td style="text-align: right">16.60</td>
<td nowrap="nowrap" style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td colspan="2" style="text-align: left"> </td>
<td nowrap="nowrap" style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-align: left">Exercised</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">(23,767</td>
<td nowrap="nowrap" style="text-align: left">)</td>
<td style="text-align: left"> </td>
<td style="text-align: left">$</td>
<td style="text-align: right">9,40</td>
<td nowrap="nowrap" style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td colspan="2" style="text-align: left"> </td>
<td nowrap="nowrap" style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-bottom: 1.7pt; text-align: left">Forfeited or expired</td>
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right">(42,411</td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left">)</td>
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: left">$</td>
<td style="border-bottom: black 1.5pt solid; text-align: right">30,76</td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td colspan="2" style="padding-bottom: 1.7pt; text-align: left"> </td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 41%; padding-bottom: 3.45pt; text-align: left">Outstanding at December 31, 2012</td>
<td style="width: 1%; padding-bottom: 3.45pt; text-align: left"> </td>
<td style="width: 1%; border-bottom: black 4.5pt double; text-align: left"> </td>
<td style="width: 11%; border-bottom: black 4.5pt double; text-align: right">343,333</td>
<td nowrap="nowrap" style="width: 1%; padding-bottom: 3.45pt; text-align: left"> </td>
<td style="width: 1%; padding-bottom: 3.45pt; text-align: left"> </td>
<td style="width: 1%; border-bottom: black 4.5pt double; text-align: left">$</td>
<td style="width: 11%; border-bottom: black 4.5pt double; text-align: right">14,70</td>
<td nowrap="nowrap" style="width: 1%; padding-bottom: 3.45pt; text-align: left"> </td>
<td style="width: 17%; border-bottom: black 4.5pt double; text-align: center">6.11 years</td>
<td style="width: 1%; padding-bottom: 3.45pt; text-align: left"> </td>
<td style="width: 1%; border-bottom: black 4.5pt double; text-align: left">$</td>
<td style="width: 11%; border-bottom: black 4.5pt double; text-align: right">885,300</td>
<td nowrap="nowrap" style="width: 1%; padding-bottom: 3.45pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-bottom: 3.45pt; text-align: left">Exercisable at December 31, 2012</td>
<td style="padding-bottom: 3.45pt; text-align: left"> </td>
<td style="border-bottom: black 4.5pt double; text-align: left"> </td>
<td style="border-bottom: black 4.5pt double; text-align: right">224,133</td>
<td nowrap="nowrap" style="padding-bottom: 3.45pt; text-align: left"> </td>
<td style="padding-bottom: 3.45pt; text-align: left"> </td>
<td style="border-bottom: black 4.5pt double; text-align: left">$</td>
<td style="border-bottom: black 4.5pt double; text-align: right">10,60</td>
<td nowrap="nowrap" style="padding-bottom: 3.45pt; text-align: left"> </td>
<td style="border-bottom: black 4.5pt double; text-align: center">5.48 years</td>
<td style="padding-bottom: 3.45pt; text-align: left"> </td>
<td style="border-bottom: black 4.5pt double; text-align: left">$</td>
<td style="border-bottom: black 4.5pt double; text-align: right">885,300</td>
<td nowrap="nowrap" style="padding-bottom: 3.45pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 9pt">A summary of
the Company’s non-vested restricted stock activity as of and for the nine months ended September 30, 2013, is as follows:</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%; font: 10pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="border-bottom: black 1pt solid; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black"><b>Restricted Stock</b></font></td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid">
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Shares</b></p></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid">
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Weighted-</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Average</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Grant-Date</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Fair Value</b></p></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 76%; text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Non-vested at January 1, 2013</font></td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 9%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">316,044</font></td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">$</font></td>
<td style="width: 9%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">16.60</font></td>
<td style="width: 1%; line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 0.25in; text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Granted</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">64,088</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">4.88</font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-left: 0.25in; text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Vested</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">(33,042</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">)</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">18.38</font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 0.25in; text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Forfeited</font></td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">(24,500</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">)</font></td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">9.94</font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Non-vested at September 30, 2013</font></td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">157,373</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">14.40</font></td>
<td style="line-height: 115%"> </td></tr></table>
<p style="margin: 0pt"></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"></p>
<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: bottom">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif"><b><u>Non-vested Shares:</u></b></font></td>
<td style="padding-bottom: 0.9pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Shares</b></font></td>
<td nowrap="nowrap" style="padding-bottom: 0.9pt"> </td>
<td style="padding-bottom: 0.9pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid">
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Weighted-</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Average</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Grant-Date</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Fair Value</b></p></td>
<td nowrap="nowrap" style="padding-bottom: 0.9pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 72%; font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Non-vested shares at January 1, 2012</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 11%; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">181,960</font></td>
<td nowrap="nowrap" style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%; font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 11%; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">17.20</font></td>
<td nowrap="nowrap" style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Granted</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">131,416</font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">17.20</font></td>
<td nowrap="nowrap"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Grants made in prior periods, now becoming restricted</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">22,000</font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">9.20</font></td>
<td nowrap="nowrap"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Vested</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(14,334</font></td>
<td nowrap="nowrap" style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">21.20</font></td>
<td nowrap="nowrap"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Forfeited</font></td>
<td style="padding-bottom: 0.9pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(5,000</font></td>
<td nowrap="nowrap" style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="padding-bottom: 0.9pt"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">18.40</font></td>
<td nowrap="nowrap" style="padding-bottom: 0.9pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Non-vested shares at December 31, 2012</font></td>
<td style="padding-bottom: 1.85pt"> </td>
<td style="border-bottom: black 1.5pt double"> </td>
<td style="border-bottom: black 1.5pt double; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">316,042</font></td>
<td nowrap="nowrap" style="padding-bottom: 1.85pt"> </td>
<td style="padding-bottom: 1.85pt"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">16.60</font></td>
<td nowrap="nowrap" style="padding-bottom: 1.85pt"> </td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 26pt"></p>
322590
<table cellspacing="0" cellpadding="0" style="width: 100%; font: 10pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid">
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Number of</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Shares</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Exercisable</b></p></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black"><b>Exercise Price</b></font></td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black"><b>Date of Expiration</b></font></td></tr>
<tr style="vertical-align: bottom">
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black"><b>Outstanding warrants accounted for as derivative warrant liability:</b></font></td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 67%; text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Granted to debt holder</font></td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 9%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">400,000</font></td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; text-align: right; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">$</font></td>
<td style="width: 9%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">20.00</font></td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 9%; padding-right: 8.1pt; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">8/31/2017</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Granted to debt holder</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">100,000</font></td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">21.30</font></td>
<td style="line-height: 115%"> </td>
<td style="padding-right: 8.1pt; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">9/20/2017</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Granted to debt holder</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">50,000</font></td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">22.70</font></td>
<td style="line-height: 115%"> </td>
<td style="padding-right: 8.1pt; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">10/17/2017</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Granted to debt holder</font></td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">150,000</font></td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">21.10</font></td>
<td style="line-height: 115%"> </td>
<td style="padding-right: 8.1pt; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">11/6/2017</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-indent: 0.25in; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Total outstanding warrants accounted for as derivative warrant liability</font></td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">700,000</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Weighted average exercise price</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">20.61</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Weighted average time to expiration in years</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">3.98 years</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black"><b>Outstanding warrants accounted for as equity:</b></font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Granted to investors in private placement of preferred stock</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">3,228</font></td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">$</font></td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">10.00</font></td>
<td style="line-height: 115%"> </td>
<td style="padding-right: 8.1pt; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">9/30/2013</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Granted to investors in private placement of preferred stock</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">19,834</font></td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">15.00</font></td>
<td style="line-height: 115%"> </td>
<td style="padding-right: 8.1pt; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">10/28/2013</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Granted to investors in private placement of preferred stock</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">39,000</font></td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">7.50</font></td>
<td style="line-height: 115%"> </td>
<td style="padding-right: 8.1pt; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">2/28/2014</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Granted to vendor</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">6,000</font></td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">6.00</font></td>
<td style="line-height: 115%"> </td>
<td style="padding-right: 8.1pt; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">3/15/2014</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Granted to investors in private placement</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">40,000</font></td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">15.90</font></td>
<td style="line-height: 115%"> </td>
<td style="padding-right: 8.1pt; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">6/30/2014</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Granted to investors in private placement</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">76,800</font></td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">20.00</font></td>
<td style="line-height: 115%"> </td>
<td style="padding-right: 8.1pt; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">11/13/2014</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Granted to placement agent in private placement</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">25,695</font></td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">15.00</font></td>
<td style="line-height: 115%"> </td>
<td style="padding-right: 8.1pt; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">11/13/2014</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Granted to investors in private placement</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">6,300</font></td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">20.00</font></td>
<td style="line-height: 115%"> </td>
<td style="padding-right: 8.1pt; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">12/3/2014</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Granted to investors in private placement</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">34,146</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">22.50</font></td>
<td style="line-height: 115%"> </td>
<td style="padding-right: 8.1pt; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">2/9/2015</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Granted to placement agents in private placement</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">2,853</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">22.50</font></td>
<td style="line-height: 115%"> </td>
<td style="padding-right: 8.1pt; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">2/9/2015</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Granted to investor in private placement</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">638</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">22.50</font></td>
<td style="line-height: 115%"> </td>
<td style="padding-right: 8.1pt; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">3/18/2015</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Granted to investors in private placement</font></td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">95,960</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">30.00</font></td>
<td style="line-height: 115%"> </td>
<td style="padding-right: 8.1pt; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">12/7/2014</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 9pt; text-indent: 0.25in; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Total outstanding warrants accounted for as equity</font></td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">350,454</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-left: 9pt; text-indent: -9pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Weighted average exercise price</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">20.17</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 9pt; text-indent: -9pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Weighted average time to expiration in years</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">0.96 years</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 9pt; text-indent: -9pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black"><b>Totals for all warrants outstanding:</b></font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-left: 9pt; text-indent: 0.25in; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Total</font></td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">1,050,454</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 9pt; text-indent: -9pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Weighted average exercise price</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">20.46</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-left: 9pt; text-indent: -9pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Weighted average time to expiration in years</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">2.97 years</font></td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"></p>
<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Number of</b></font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td colspan="2"> </td>
<td nowrap="nowrap"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Shares</b></font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td colspan="2" style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Exercise</b></font></td>
<td nowrap="nowrap"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Date of</b></font></td></tr>
<tr style="vertical-align: bottom">
<td style="padding-bottom: 0.9pt"> </td>
<td style="padding-bottom: 0.9pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Exercisable</b></font></td>
<td nowrap="nowrap" style="padding-bottom: 0.9pt"> </td>
<td style="padding-bottom: 0.9pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Price</b></font></td>
<td nowrap="nowrap" style="padding-bottom: 0.9pt"> </td>
<td style="border-bottom: black 1pt solid; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Expiration</b></font></td></tr>
<tr style="vertical-align: bottom">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif"><b>Outstanding warrants in derivative warrant liability:</b></font></td>
<td> </td>
<td colspan="2"> </td>
<td nowrap="nowrap"> </td>
<td> </td>
<td colspan="2"> </td>
<td nowrap="nowrap"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 50%; font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Granted to financial investment advisor</font></td>
<td style="width: 5%"> </td>
<td style="width: 1%"> </td>
<td style="width: 10%; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">750</font></td>
<td nowrap="nowrap" style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%; font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 10%; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">12.60</font></td>
<td nowrap="nowrap" style="width: 1%"> </td>
<td style="width: 20%; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">2/11/2013</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Granted to investors in private placement</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">15,499</font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">5.00</font></td>
<td nowrap="nowrap"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">2/11/2013</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Granted to investors in private placement</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">19,767</font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">14.40</font></td>
<td nowrap="nowrap"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">3/24/2013</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Granted to debtor as a Commitment warrant</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">400,000</font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">20.00</font></td>
<td nowrap="nowrap"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">8/31/2017</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Granted to debtor as a Draw warrant</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">100,000</font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">21.30</font></td>
<td nowrap="nowrap"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">9/20/2017</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Granted to debtor as a Draw warrant</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">50,000</font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">22.70</font></td>
<td nowrap="nowrap"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">10/17/2017</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Granted to debtor as a Draw warrant</font></td>
<td style="padding-bottom: 0.9pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">150,000</font></td>
<td nowrap="nowrap" style="padding-bottom: 0.9pt"> </td>
<td style="padding-bottom: 0.9pt"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">21.10</font></td>
<td nowrap="nowrap" style="padding-bottom: 0.9pt"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">11/6/2017</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-indent: -13pt; padding-left: 10pt"><font style="font: 10pt Times New Roman, Times, Serif">Total outstanding warrants accounted for as derivative warrant liability</font></td>
<td style="padding-bottom: 1.85pt"> </td>
<td style="border-bottom: black 1.5pt double"> </td>
<td style="border-bottom: black 1.5pt double; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">736,016</font></td>
<td nowrap="nowrap" style="padding-bottom: 1.85pt"> </td>
<td style="padding-bottom: 1.85pt"> </td>
<td> </td>
<td style="padding-bottom: 1.85pt"> </td>
<td nowrap="nowrap" style="padding-bottom: 1.85pt"> </td>
<td style="padding-bottom: 1.85pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-indent: 26pt"><font style="font: 10pt Times New Roman, Times, Serif">Weighted average exercise price</font></td>
<td style="padding-bottom: 1.85pt"> </td>
<td> </td>
<td style="padding-bottom: 1.85pt"> </td>
<td nowrap="nowrap" style="padding-bottom: 1.85pt"> </td>
<td style="padding-bottom: 1.85pt"> </td>
<td style="border-bottom: black 1.5pt double; font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 1.5pt double; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">20.10</font></td>
<td nowrap="nowrap" style="padding-bottom: 1.85pt"> </td>
<td style="padding-bottom: 1.85pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-indent: 26pt"><font style="font: 10pt Times New Roman, Times, Serif">Weighted average time to expiration in years</font></td>
<td style="padding-bottom: 1.85pt"> </td>
<td style="padding-bottom: 1.85pt"> </td>
<td style="padding-bottom: 1.85pt"> </td>
<td nowrap="nowrap" style="padding-bottom: 1.85pt"> </td>
<td style="padding-bottom: 1.85pt"> </td>
<td style="padding-bottom: 1.85pt"> </td>
<td style="padding-bottom: 1.85pt"> </td>
<td nowrap="nowrap" style="padding-bottom: 1.85pt"> </td>
<td style="border-bottom: black 1.5pt double; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">4.50 years</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif"><b>Outstanding warrants in equity:</b></font></td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap"> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Granted to investors in private placement of preferred stock</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">3,225</font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">10.00</font></td>
<td nowrap="nowrap"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">9/30/2013</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Granted to investors in private placement of preferred stock</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">19,833</font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">15.00</font></td>
<td nowrap="nowrap"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">10/28/2013</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Granted to investors in private placement of preferred stock</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">39,000</font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">7.50</font></td>
<td nowrap="nowrap"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">2/28/2014</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Granted to vendor</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">6,000</font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">6.00</font></td>
<td nowrap="nowrap"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">3/15/2014</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Granted to investors in private placement</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">40,000</font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">15.90</font></td>
<td nowrap="nowrap"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">6/30/2014</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Granted to investors in private placement</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">76,800</font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">20.00</font></td>
<td nowrap="nowrap"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">11/13/2014</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Granted to placement agent in private placement</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">25,690</font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">15.00</font></td>
<td nowrap="nowrap"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">11/13/2014</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Granted to investors in private placement</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">6,300</font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">20.00</font></td>
<td nowrap="nowrap"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">12/3/2014</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Granted to investors in private placement</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">34,133</font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">22.50</font></td>
<td nowrap="nowrap"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">2/9/2015</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Granted to placement agents in private placement</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">2,850</font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">22.50</font></td>
<td nowrap="nowrap"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">2/9/2015</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Granted to investor in private placement</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">637</font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">22.50</font></td>
<td nowrap="nowrap"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">3/18/2015</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Granted to financial investment advisor</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">10,000</font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">15.00</font></td>
<td nowrap="nowrap"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">2/10/2013</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Granted to financial investment advisor</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1,037</font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">20.00</font></td>
<td nowrap="nowrap"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">3/3/2013</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Granted to investors in private placement</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">24,575</font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">15.00</font></td>
<td nowrap="nowrap"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">1/4/2013</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Granted to investors in private placement</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">24,575</font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">25.00</font></td>
<td nowrap="nowrap"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">1/4/2013</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Granted to placement agent in private placement</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1,812</font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">15.00</font></td>
<td nowrap="nowrap"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">1/4/2013</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Granted to placement agent in private placement</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1,812</font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">25.00</font></td>
<td nowrap="nowrap"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">1/4/2013</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Granted to investors in private placement</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">25,500</font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">15.00</font></td>
<td nowrap="nowrap"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">2/3/2013</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Granted to investors in private placement</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">28,000</font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">25.00</font></td>
<td nowrap="nowrap"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">2/3/2013</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Granted to placement agent in private placement</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">125</font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">15.00</font></td>
<td nowrap="nowrap"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">2/3/2013</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Granted to placement agent in private placement</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">125</font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">25.00</font></td>
<td nowrap="nowrap"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">2/3/2013</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Granted to investors in private placement</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">25,000</font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">15.00</font></td>
<td nowrap="nowrap"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">2/8/2013</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Granted to investors in private placement</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">25,000</font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">25.00</font></td>
<td nowrap="nowrap"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">2/8/2013</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Granted to investors in private placement</font></td>
<td style="padding-bottom: 0.9pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">95,958</font></td>
<td nowrap="nowrap" style="padding-bottom: 0.9pt"> </td>
<td style="padding-bottom: 0.9pt"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">30.00</font></td>
<td nowrap="nowrap" style="padding-bottom: 0.9pt"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">12/7/2014</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-indent: 13pt"><font style="font: 10pt Times New Roman, Times, Serif">Total outstanding warrants accounted for as equity</font></td>
<td style="padding-bottom: 1.85pt"> </td>
<td style="border-bottom: black 1.5pt double"> </td>
<td style="border-bottom: black 1.5pt double; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">517,988</font></td>
<td nowrap="nowrap" style="padding-bottom: 1.85pt"> </td>
<td style="padding-bottom: 1.85pt"> </td>
<td> </td>
<td style="padding-bottom: 1.85pt"> </td>
<td nowrap="nowrap" style="padding-bottom: 1.85pt"> </td>
<td style="padding-bottom: 1.85pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Weighted average exercise price</font></td>
<td style="padding-bottom: 1.85pt"> </td>
<td> </td>
<td style="padding-bottom: 1.85pt"> </td>
<td nowrap="nowrap" style="padding-bottom: 1.85pt"> </td>
<td style="padding-bottom: 1.85pt"> </td>
<td style="border-bottom: black 1.5pt double; font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 1.5pt double; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">20.00</font></td>
<td nowrap="nowrap" style="padding-bottom: 1.85pt"> </td>
<td style="padding-bottom: 1.85pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Weighted average time to expiration in years</font></td>
<td style="padding-bottom: 1.85pt"> </td>
<td style="padding-bottom: 1.85pt"> </td>
<td style="padding-bottom: 1.85pt"> </td>
<td nowrap="nowrap" style="padding-bottom: 1.85pt"> </td>
<td style="padding-bottom: 1.85pt"> </td>
<td style="padding-bottom: 1.85pt"> </td>
<td style="padding-bottom: 1.85pt"> </td>
<td nowrap="nowrap" style="padding-bottom: 1.85pt"> </td>
<td style="border-bottom: black 1.5pt double; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">1.18 years</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-indent: -9pt; padding-left: 10pt"><font style="font: 10pt Times New Roman, Times, Serif"><b>Totals for all warrants outstanding:</b></font></td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap"> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-indent: 13pt"><font style="font: 10pt Times New Roman, Times, Serif">Total</font></td>
<td style="padding-bottom: 1.85pt"> </td>
<td style="border-bottom: black 1.5pt double"> </td>
<td style="border-bottom: black 1.5pt double; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1,254,004</font></td>
<td nowrap="nowrap" style="padding-bottom: 1.85pt"> </td>
<td style="padding-bottom: 1.85pt"> </td>
<td> </td>
<td style="padding-bottom: 1.85pt"> </td>
<td nowrap="nowrap" style="padding-bottom: 1.85pt"> </td>
<td style="padding-bottom: 1.85pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-indent: 13pt"><font style="font: 10pt Times New Roman, Times, Serif">Weighted average exercise price</font></td>
<td style="padding-bottom: 1.85pt"> </td>
<td> </td>
<td style="padding-bottom: 1.85pt"> </td>
<td nowrap="nowrap" style="padding-bottom: 1.85pt"> </td>
<td style="padding-bottom: 1.85pt"> </td>
<td style="border-bottom: black 1.5pt double; font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 1.5pt double; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">20.10</font></td>
<td nowrap="nowrap" style="padding-bottom: 1.85pt"> </td>
<td style="padding-bottom: 1.85pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-indent: 13pt"><font style="font: 10pt Times New Roman, Times, Serif">Weighted average time to expiration in years</font></td>
<td style="padding-bottom: 1.85pt"> </td>
<td style="padding-bottom: 1.85pt"> </td>
<td style="padding-bottom: 1.85pt"> </td>
<td nowrap="nowrap" style="padding-bottom: 1.85pt"> </td>
<td style="padding-bottom: 1.85pt"> </td>
<td style="padding-bottom: 1.85pt"> </td>
<td style="padding-bottom: 1.85pt"> </td>
<td nowrap="nowrap" style="padding-bottom: 1.85pt"> </td>
<td style="border-bottom: black 1.5pt double; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">3.13 years</font></td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 26pt"></p>
<table cellspacing="0" cellpadding="0" style="width: 100%; font: 10pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="border-bottom: black 1pt solid">
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><b> </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><b> </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><b> </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Warrants</b></p></td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid">
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><b>  </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><b> </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><b> </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 8.8pt"><b>Shares</b></p></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid">
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Weighted-</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Average</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Exercise</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Price</b></p></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 78%; text-align: justify; line-height: 115%; text-indent: 12pt"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Outstanding at January 1, 2013</font></td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 8%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">1,254,004</font></td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">$</font></td>
<td style="width: 8%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">20.08</font></td>
<td style="width: 1%; line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 27pt; text-align: justify; line-height: 115%; text-indent: 12pt"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Granted</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">9,175</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">12.60</font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-left: 27pt; text-align: justify; line-height: 115%; text-indent: 12pt"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Exercised</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">—</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">—</font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 27pt; text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Forfeited or expired</font></td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">(212,725</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">)</font></td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">17.69</font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-align: justify; line-height: 115%; text-indent: 12pt"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Outstanding at September 30, 2013</font></td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">1,050,454</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">20.46</font></td>
<td style="line-height: 115%"> </td></tr>
</table>
<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: bottom">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif"><b><u>Warrants:</u></b></font></td>
<td style="padding-bottom: 0.9pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Shares</b></font></td>
<td nowrap="nowrap" style="padding-bottom: 0.9pt"> </td>
<td style="padding-bottom: 0.9pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid">
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Weighted-</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Average</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Exercise</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Price</b></p></td>
<td nowrap="nowrap" style="padding-bottom: 0.9pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 72%; font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Outstanding at January 1, 2012</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 11%; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">752,753</font></td>
<td nowrap="nowrap" style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%; font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 11%; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">19.20</font></td>
<td nowrap="nowrap" style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Granted</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">702,034</font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">14.40</font></td>
<td nowrap="nowrap"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Exercised</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(16,546</font></td>
<td nowrap="nowrap" style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">12.80</font></td>
<td nowrap="nowrap"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Forfeited or expired</font></td>
<td style="padding-bottom: 0.9pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(184,237</font></td>
<td nowrap="nowrap" style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="padding-bottom: 0.9pt"> </td>
<td style="border-bottom: black 1pt solid; font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 1pt solid; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">19.00</font></td>
<td nowrap="nowrap" style="padding-bottom: 0.9pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Outstanding at December 31, 2012</font></td>
<td style="padding-bottom: 1.85pt"> </td>
<td style="border-bottom: black 1.5pt double"> </td>
<td style="border-bottom: black 1.5pt double; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1,254,004</font></td>
<td nowrap="nowrap" style="padding-bottom: 1.85pt"> </td>
<td style="padding-bottom: 1.85pt"> </td>
<td style="border-bottom: black 1.5pt double; font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 1.5pt double; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">20.10</font></td>
<td nowrap="nowrap" style="padding-bottom: 1.85pt"> </td></tr>
</table>
5198303
9563511
7821046
75626
173750
127110
968004
100458
968004
407463
250000
657463
1638395
317731
1586898
1165398
1135912
1146135
2803793
1453643
2733033
818939
187264
825589
156435
156435
111980
728269
186837
755444
-732296
-624817
-716531
367854
298290
323489
20021592
19526807
21868335
13184894
9645565
12460391
10566
826
12066
3549328
2823325
9625000
9625000
9625000
9790986
2558218
4240969
120834
1361
3888
9578563
2492463
4218412
1581448
965832
1595920
5585141
1035337
979155
2527
2288
2017
2319219
365298
1551092
20021592
19526807
21868335
10230606
16968589
17627366
8702284
7032606
51
51
27046
31126
74399129
79926523
285000
-67393620
-71540416
30160
68544
98463225
6667
-81570007
30160
44374
104058087
-93902015
-93902015
-81570007
-109468783
104058087
98463225
126958986
44374
38554
107003
30060
30060
30060
100
100
100
67671
92781
5119
22557
30927
447211
428460
-16517412
-10340961
-15040020
-4925860
-3616607
-8254673
-4910454
16585083
10433742
15045139
4948417
3647534
8701884
5338914
6590206
4702325
6374429
2192412
1508069
4905757
2760062
9994877
5731417
8670710
2756005
2139465
3796127
2578852
7571733
3925637
3955046
10688781
3985888
3417490
2903116
-2.06
-2.65
-3.12
-0.49
-1.07
-4.89
-1.47
-15566767
-10405209
-12332008
-5237045
-4265095
-10029591
-4146796
-4146796
-10029591
-12332008
950645
-64248
2708012
-311185
-648488
-1774918
763658
4605986
201281
3683676
-70000
-400000
-1762938
371345
-21272
-21272
-1348
160000
455000
160000
3657921
89407
504858
242062
89123
13926
37549
2580
5150
5466
877
635
4808
1519
160000
455000
21272
21272
5688
726003
80667
423126
2879166
5556
120834
-4605986
-201281
-3683676
1762938
-371345
908983
920251
1409562
836866
164810
288883
75772
145155
47916
109413
-16154058
-7869360
-10287665
-6925937
-3629819
14472
637633
668642
505184
178969
-67671
-92781
-5119
-302059
-225868
-768127
664190
1953921
-240336
-320078
-1500
9999
9999
-576
1750
-51484
99041
98124
-79003
31436
37065
37065
104423
-11452
-487387
-1142621
-1644554
-317791
-279915
250000
157463
157463
-5510
265500
237387
985158
1487091
323301
14415
18962704
1412250
6683858
14897255
4084920
195260
195259
136790
212017
212018
4919346
1871
1694
2288
2071
1874
3000000
1000000
3000000
21964575
6667
3278869
6439489
3886794
2321259
-7599731
-5248361
7653527
175186
3000000
455000
1567833
4628750
204500
603750
7.50
2.70
10626000
11338000
1254004
795753
9175
702034
-16546
-212725
-184237
1254004
7527529
1050454
20.1
19.2
20.46
12.60
14.4
12.8
17.69
19
<p style="font: 11pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 9pt"><font style="font-size: 10pt"> We
are a medical device company with expertise in advanced skin permeation technology.  We are developing our Symphony</font><font style="font-size: 7pt">®</font><font style="font-size: 10pt">
CGM System (“Symphony”) as a non-invasive, wireless continuous glucose monitoring (“CGM”) system for use
in hospital critical care units.  The Prelude</font><font style="font-size: 7pt">®</font><font style="font-size: 10pt"><b> </b>SkinPrep
System (“Prelude”), a component of our Symphony CGM System, allows for enhanced skin permeation that will enable extraction
of analytes such as glucose.  Prelude’s platform skin preparation technology also allows for needle-free, transdermal
drug delivery.</font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 9pt"> The accompanying
unaudited consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Sontra Medical,
Inc., a Delaware corporation. All significant intercompany balances and transactions have been eliminated in consolidation.  These
financial statements have been prepared in conformity with generally accepted accounting principles (“GAAP”) in the
United States consistent with those applied in, and should be read in conjunction with, the Company’s audited consolidated
financial statements and related footnotes for the year ended December 31, 2012 included in the Company’s Annual Report on
Form 10-K as filed with the United States Securities and Exchange Commission (“SEC”) on March 18, 2013.  These
financial statements reflect all adjustments, consisting only of normal recurring adjustments, which are, in the opinion of management,
necessary for a fair presentation of the Company’s financial position as of September 30, 2013 and its results of operations
and cash flows for the interim periods presented and are not necessarily indicative of results for subsequent interim periods or
for the full year.  These interim financial statements do not include all of the information and footnotes required by
GAAP for complete financial statements and allowed by the relevant SEC rules and regulations; however, the Company believes that
its disclosures are adequate to ensure that the information presented is not misleading. Certain amounts in prior periods have
been reclassified to conform to current presentation.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 9pt"> On June 7, 2013,
the Company effected a 1-for-10 reverse stock split of its common stock. All share and per share information has been retroactively
restated to reflect this reverse stock split.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i><u>Liquidity and Management’s
Plans</u></i></b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 9pt"> The accompanying
consolidated financial statements have been prepared on a basis assuming that the Company is a going concern, which contemplates
the realization of assets and the satisfaction of liabilities in the normal course of business.  As of September 30,
2013, the Company had cash of approximately $6,068,000, working capital of approximately $3,603,000, and an accumulated deficit
of approximately $109,469,000.  The Company continues to incur recurring losses from operations.  The Company
will require additional capital to fund our product development, research, manufacturing and clinical programs in accordance with
our current planned operations.  Management intends to pursue additional financing to fund these operations and the Company
has funded its operations in the past primarily through debt and equity issuances.  Management believes that it will
be successful in meeting the milestones required under their current financing arrangement, securing collaborative arrangements
with strategic partners, and/or raising additional capital.  No assurances can be given that additional capital will
be available on terms acceptable to the Company. The consolidated financial statements do not include any adjustments that might
result from the outcome of these uncertainties.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt">Echo Therapeutics, Inc. (the
“Company”) is a transdermal medical device company with significant expertise in advanced skin permeation technology
that is primarily focused on continuous glucose monitoring and needle-free drug delivery.  The Company is developing
its Prelude<font style="font-size: 7pt">®</font> SkinPrep System (“Prelude”) as a platform technology to allow
for significantly enhanced and painless skin permeation that will enable two important applications:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: top">
<td style="width: 87px; font: 10pt Symbol; text-align: center"><font style="font-family: Symbol">·</font></td>
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">analyte extraction, with the Symphony<font style="font-size: 7pt">®</font> CGM System (“Symphony”) for needle-free, continuous glucose monitoring for use in hospital critical care units and for people with diabetes; and</td></tr>
<tr style="vertical-align: top">
<td style="font: 10pt Symbol; text-align: center"><font style="font-family: Symbol">·</font></td>
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">enhanced needle-free drug delivery.</td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt">The accompanying consolidated
financial statements include the accounts of the Company and its wholly-owned subsidiary, Sontra Medical, Inc., a Delaware corporation
(and all significant intercompany balances have been eliminated by consolidation) and have been prepared on a basis assuming that
the Company is a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal
course of business. Certain amounts in prior periods have been reclassified to conform to current presentation.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Liquidity and Management’s Plans</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"><b><i> </i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">As of December 31, 2012,
the Company had cash of approximately $3,747,000, a working capital deficit of approximately $4,380,000, and an accumulated deficit
of approximately $93,902,000. The Company continues to incur recurring losses from operations. The Company will require additional
capital to fund our product development, research, manufacturing and clinical programs in accordance with our current planned operations.
The Company has funded its operations in the past primarily through debt and equity issuances. Management intends to utilize our
current financing arrangements and pursue additional financing to fund its operations. Management believes that it will be successful
in meeting the milestones required under their current financing arrangement or raising additional capital. No assurances can be
given that additional capital will be available on terms acceptable to the Company. Subsequent to December 31, 2012, the Company
received net proceeds from a Common Stock financing of approximately $10,666,000, of which $3,113,366 was used to fully repay the
Notes we issued to Platinum-Montaur Life Sciences, LLC in connection with our $20 million non-revolving draw credit facility with
Platinum-Montaur Life Sciences, LLC (see Note 9).</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt"></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i><u>Cash and Cash Equivalents</u></i></b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 9pt"> As of September
30, 2013, the Company held approximately $6,068,000 in cash and cash equivalents.  The Company’s cash equivalents
consist solely of bank money market funds.  The Company maintains its cash in bank deposit accounts which, at times,
may exceed federally insured limits.  The Company has never experienced any losses related to these balances.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i><u>Restricted Cash</u></i></b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 9pt"> As of September
30, 2013, restricted cash consists of two $250,000 letters of credit issued in favor of one of the Company’s key product
development vendors and a $157,463 letter of credit issued in favor of one of its landlords.  As of December 31, 2012,
restricted cash consisted of one $250,000 letter of credit issued in favor of one of the Company’s key product development
vendors and a $157,463 letter of credit issued in favor of one of its landlords.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt">As of December 31, 2012, the
Company held approximately $3,747,000 in cash and cash equivalents. The Company’s cash equivalents consist solely of money
market funds at a major banking institution.  From time to time, the Company may have cash balances in excess of federal
insurance limits. The Company has never experienced any previous losses related to these uninsured balances.</p>
<p style="font: 11pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 9pt"><font style="font-size: 10pt"> The
Company’s intangible assets are related to the acquisition of certain assets related to AzoneTS-based technology from Durham
Pharmaceuticals Ltd. in 2007.  Following the acquisition in 2007, the Company has modestly advanced the development programs
for Durhalieve</font><font style="font-size: 7pt">TM</font><font style="font-size: 10pt"> for the treatment of corticosteroid-responsive
dermatoses and for the early stage AzoneTS reformulation drug candidates. Among other things, the Company has monitored stability
on new drug formulations, worked on a complete response on the Durhalieve New Drug Application, met with the FDA on  development
status, assembled a response for the methotrexate-AzoneTS ‘end of Phase 2’ meeting with the FDA, engaged consultants
to review and recommend new product candidates and formulations, and conducted partnering activities around the technology.  In
addition, the Company has made applicable regulatory filings necessary to maintain the active status of the AzoneTS Drug Master
File, the Durhalieve and MAZ Investigational New Drug applications and the MAZ Orphan Drug application with the FDA.</font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 9pt"> As of September
30, 2013 and 2012, intangible assets related to this Acquisition are summarized as follows:</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%; font: 10pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="6" style="border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black"><b>2013</b></font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black"><b>2012</b></font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="line-height: 115%"> </td>
<td style="text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black"><b>Estimated</b></font></td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black"><b>Accumulated</b></font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black"><b>Life</b></font></td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: justify; line-height: 115%; text-indent: 14pt"><font style="font: 10pt Times New Roman, Times, Serif; color: black"><b>Cost</b></font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black"><b>Amortization</b></font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black"><b>Net</b></font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black"><b>Net</b></font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-right: 5.05pt; padding-left: 9pt; text-indent: -9pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Contract related intangible asset:</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 33%; padding-right: 5.05pt; padding-left: 0.25in; text-indent: -9pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Cato Research discounted contract</font></td>
<td style="width: 11%; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">3 years</font></td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; border-bottom: black 1pt solid; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">$</font></td>
<td style="width: 11%; border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">355,000</font></td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; border-bottom: black 1pt solid; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">$</font></td>
<td style="width: 11%; border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">355,000</font></td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; border-bottom: black 1pt solid; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">$</font></td>
<td style="width: 11%; border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">—</font></td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; border-bottom: black 1pt solid; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">$</font></td>
<td style="width: 11%; border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">—</font></td>
<td style="width: 1%; line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-right: 5.05pt; padding-left: 9pt; text-indent: -9pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Technology related intangible assets:</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-right: 5.05pt; padding-left: 0.25in; text-indent: -9pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Patents for the AzoneTS-based product candidates and formulation</font></td>
<td style="text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">4.5 years</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">1,305,000</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">—</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">1,305,000</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">1,305,000</font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-right: 5.05pt; padding-left: 0.25in; text-indent: -9pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Drug Master Files containing formulation, clinical and safety documentation used by the FDA</font></td>
<td style="text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">4.5 years</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">1,500,000</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">—</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">1,500,000</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">1,500,000</font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-right: 5.05pt; padding-left: 0.25in; text-indent: -9pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">In-process pharmaceutical products for 2 indications</font></td>
<td style="text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">4.5 years</font></td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">6,820,000</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">—</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">6,820,000</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">6,820,000</font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-right: 5.05pt; padding-left: 40pt; text-indent: -10pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Total technology related intangible assets</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">9,625,000</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">—</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">9,625,000</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">9,625,000</font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-right: 5.05pt; text-indent: 0.75in; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Total, net</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">9,980,000</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">355,000</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">9,625,000</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">9,625,000</font></td>
<td style="line-height: 115%"> </td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 9pt"> Intangible assets
related to technology are expected to be amortized on a straight-line basis over the period ending 2019, when the underlying patents
expire, and will commence upon revenue generation which the Company estimates could occur as early as the middle of 2015.  The
Cato Research contract included above was amortized over a three year period, which ended in 2010.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 9pt"> Estimated amortization
expense for each of the next five calendar years is as follows:</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%; font: 10pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><b> </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><b> </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p></td>
<td style="line-height: 115%"> </td>
<td colspan="2">
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Estimated</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Amortization</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Expense</b></p></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 82%; text-align: justify; line-height: 115%; text-indent: 12pt"><font style="font: 10pt Times New Roman, Times, Serif; color: black">2013</font></td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">$</font></td>
<td style="width: 15%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">—</font></td>
<td style="width: 1%; line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: justify; line-height: 115%; text-indent: 12pt"><font style="font: 10pt Times New Roman, Times, Serif; color: black">2014</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">—</font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-align: justify; line-height: 115%; text-indent: 12pt"><font style="font: 10pt Times New Roman, Times, Serif; color: black">2015</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">1,069,000</font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: justify; line-height: 115%; text-indent: 12pt"><font style="font: 10pt Times New Roman, Times, Serif; color: black">2016</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">2,139,000</font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-align: justify; line-height: 115%; text-indent: 12pt"><font style="font: 10pt Times New Roman, Times, Serif; color: black">2017</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">2,139,000</font></td>
<td style="line-height: 115%"> </td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 9pt"> In periodically
reviewing the carrying value of intangible assets, the Company considered if there have been events or circumstances that would
indicate that the carrying amount of the intangible assets may not be recoverable.  If such events or circumstances existed,
the Company performed an impairment test in accordance with FASB ASC 360-10. Under that standard, the first step in the impairment
analysis is to compare the undiscounted cash flows to the carrying value of the intangibles.  The project’s undiscounted
cash flows exceeded the carrying value at each of the Company’s assessment dates following acquisition, including December
31, 2012.  As a result, it was not necessary for the Company to conduct further analysis or to make a determination of
the fair value of the intangible assets and thereby the Company concluded that there was no impairment.  It is the Company’s
policy to evaluate intangible assets for impairment at least annually in connection with its year end financial statement preparation.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 20pt">The Company’s
intangible assets are related to the acquisition of assets from Durham Pharmaceuticals Ltd. in 2007.  As of
December 31, 2012 and 2011, intangible assets related to the ETI Acquisition are summarized as follows:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="3" style="text-align: center"> </td>
<td nowrap="nowrap" style="text-align: center"> </td>
<td colspan="7" style="border-bottom: black 1.5pt solid; font-weight: bold; text-align: center"><font style="font-size: 10pt"><b>2012</b></font></td>
<td nowrap="nowrap" style="font-weight: bold; text-align: center"> </td>
<td colspan="3" style="border-bottom: black 1.5pt solid; font-weight: bold; text-align: center"><font style="font-size: 10pt"><b>2011</b></font></td>
<td nowrap="nowrap" style="font-weight: bold; text-align: center"> </td>
</tr>
<tr style="vertical-align: bottom">
<td style="text-align: center"> </td>
<td style="font-weight: bold; text-align: center"><font style="font-size: 10pt"><b>Estimated</b></font></td>
<td colspan="3" style="text-align: center"> </td>
<td nowrap="nowrap" style="text-align: center"> </td>
<td colspan="3" style="font-weight: bold; text-align: center"><font style="font-size: 10pt"><b>Accumulated</b></font></td>
<td nowrap="nowrap" style="font-weight: bold; text-align: center"> </td>
<td colspan="3" style="text-align: center"> </td>
<td nowrap="nowrap" style="text-align: center"> </td>
<td colspan="3" style="text-align: center"> </td>
<td nowrap="nowrap" style="text-align: center"> </td>
</tr>
<tr style="vertical-align: bottom">
<td style="text-align: center"> </td>
<td style="border-bottom: black 1.5pt solid; font-weight: bold; text-align: center"><font style="font-size: 10pt"><b>Life</b></font></td>
<td colspan="3" style="border-bottom: black 1.5pt solid; font-weight: bold; text-align: center"><font style="font-size: 10pt"><b>Cost</b></font></td>
<td nowrap="nowrap" style="font-weight: bold; text-align: center"> </td>
<td colspan="3" style="border-bottom: black 1.5pt solid; font-weight: bold; text-align: center"><font style="font-size: 10pt"><b>Amortization</b></font></td>
<td nowrap="nowrap" style="font-weight: bold; text-align: center"> </td>
<td colspan="3" style="border-bottom: black 1.5pt solid; font-weight: bold; text-align: center"><font style="font-size: 10pt"><b>Net</b></font></td>
<td nowrap="nowrap" style="font-weight: bold; text-align: center"> </td>
<td colspan="3" style="border-bottom: black 1.5pt solid; font-weight: bold; text-align: center"><font style="font-size: 10pt"><b>Net</b></font></td>
<td nowrap="nowrap" style="font-weight: bold; text-align: center"> </td>
</tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 10pt">Contract related intangible asset:</font></td>
<td> </td>
<td colspan="3"> </td>
<td nowrap="nowrap"> </td>
<td colspan="3"> </td>
<td nowrap="nowrap"> </td>
<td colspan="3"> </td>
<td nowrap="nowrap"> </td>
<td colspan="3"> </td>
<td nowrap="nowrap"> </td>
</tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 29%; padding-left: 11pt"><font style="font-size: 10pt">Cato Research discounted contract</font></td>
<td style="width: 11%; text-align: center"><font style="font-size: 10pt">3 years</font></td>
<td style="width: 1%; text-align: right"> </td>
<td style="width: 1%; border-bottom: black 1.5pt solid"><font style="font-size: 10pt">$</font></td>
<td style="width: 9%; border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">355,000</font></td>
<td nowrap="nowrap" style="width: 1%"> </td>
<td style="width: 1%; text-align: right"> </td>
<td style="width: 1%; border-bottom: black 1.5pt solid"><font style="font-size: 10pt">$</font></td>
<td style="width: 9%; border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">355,000</font></td>
<td nowrap="nowrap" style="width: 1%"> </td>
<td style="width: 1%; text-align: right"> </td>
<td style="width: 1%; border-bottom: black 1.5pt solid"><font style="font-size: 10pt">$</font></td>
<td style="width: 9%; border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">—</font></td>
<td nowrap="nowrap" style="width: 1%"> </td>
<td style="width: 1%; text-align: right"> </td>
<td style="width: 1%; border-bottom: black 1.5pt solid"><font style="font-size: 10pt">$</font></td>
<td style="width: 9%; border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">—</font></td>
<td nowrap="nowrap" style="width: 1%"> </td>
</tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 0pt"><font style="font-size: 10pt">Technology related intangible assets:</font></td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td style="text-align: right"> </td>
<td nowrap="nowrap"> </td>
<td style="text-align: right"> </td>
<td> </td>
<td style="text-align: right"> </td>
<td nowrap="nowrap"> </td>
<td style="text-align: right"> </td>
<td> </td>
<td style="text-align: right"> </td>
<td nowrap="nowrap"> </td>
<td style="text-align: right"> </td>
<td> </td>
<td style="text-align: right"> </td>
<td nowrap="nowrap"> </td>
</tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-left: 11pt"><font style="font-size: 10pt">Patents for the AzoneTS-based product candidates and formulation</font></td>
<td style="text-align: center"><font style="font-size: 10pt">6 years</font></td>
<td style="text-align: right"> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">1,305,000</font></td>
<td nowrap="nowrap"> </td>
<td style="text-align: right"> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">—</font></td>
<td nowrap="nowrap"> </td>
<td style="text-align: right"> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">1,305,000</font></td>
<td nowrap="nowrap"> </td>
<td style="text-align: right"> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">1,305,000</font></td>
<td nowrap="nowrap"> </td>
</tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 11pt"><font style="font-size: 10pt">Drug Master Files containing formulation, clinical and safety documentation used by the FDA</font></td>
<td style="text-align: center">6 years</td>
<td style="text-align: right"> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">1,500,000</font></td>
<td nowrap="nowrap"> </td>
<td style="text-align: right"> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">—</font></td>
<td nowrap="nowrap"> </td>
<td style="text-align: right"> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">1,500,000</font></td>
<td nowrap="nowrap"> </td>
<td style="text-align: right"> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">1,500,000</font></td>
<td nowrap="nowrap"> </td>
</tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-left: 11pt"><font style="font-size: 10pt">In-process pharmaceutical products for 2 indications</font></td>
<td style="text-align: center">6<font style="font-size: 10pt"> years</font></td>
<td style="text-align: right"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">6,820,000</font></td>
<td nowrap="nowrap"> </td>
<td style="text-align: right"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">—</font></td>
<td nowrap="nowrap"> </td>
<td style="text-align: right"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">6,820,000</font></td>
<td nowrap="nowrap"> </td>
<td style="text-align: right"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">6,820,000</font></td>
<td nowrap="nowrap"> </td>
</tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 11pt"><font style="font-size: 10pt">Total technology related intangible assets</font></td>
<td> </td>
<td style="text-align: right"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">9,625,000</font></td>
<td nowrap="nowrap"> </td>
<td style="text-align: right"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">—</font></td>
<td nowrap="nowrap"> </td>
<td style="text-align: right"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">9,625,000</font></td>
<td nowrap="nowrap"> </td>
<td style="text-align: right"> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 10pt">9,625,000</font></td>
<td nowrap="nowrap"> </td>
</tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-left: 22pt"><font style="font-size: 10pt">Total, net</font></td>
<td> </td>
<td style="text-align: right"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">9,980,000</font></td>
<td nowrap="nowrap"> </td>
<td style="text-align: right"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">355,000</font></td>
<td nowrap="nowrap"> </td>
<td style="text-align: right"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">9,625,000</font></td>
<td nowrap="nowrap"> </td>
<td style="text-align: right"> </td>
<td style="border-bottom: black 2.25pt double"><font style="font-size: 10pt">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 10pt">9,625,000</font></td>
<td nowrap="nowrap"> </td>
</tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 20pt">Intangible
assets related to technology are expected to be amortized on a straight-line basis over the period ending 2019, when the
underlying patents expire, and will commence upon revenue generation which the Company estimates may occur as early as the
middle of 2014.  The contract related to this intangible asset was amortized over a three year period, which ended
in 2010. Amortization expense relating to the contract was approximately $84,000 for the year ended December 31, 2010 and is
included in research and development in the Consolidated Statement of Operations.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 20pt">Estimated amortization expense for each of
the next five years is as follows:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td style="padding-bottom: 1.5pt">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><b>Year Ending December 31, 2012:</b></p></td>
<td style="font-weight: bold; text-align: center"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Estimated</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Amortization</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Expense</b></p></td>
<td nowrap="nowrap" style="font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 88%"><font style="font-size: 10pt">2013</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 10pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 10pt">—</font></td>
<td nowrap="nowrap" style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">2014</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">1,604,000</font></td>
<td nowrap="nowrap"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font-size: 10pt">2015</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">1,604,000</font></td>
<td nowrap="nowrap"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">2016</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">1,604,000</font></td>
<td nowrap="nowrap"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font-size: 10pt">2017</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">1,604,000</font></td>
<td nowrap="nowrap"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font-size: 10pt">2018</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 10pt">1,604,000</font></td>
<td nowrap="nowrap"> </td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 9pt"> The Company
leases approximately 37,000 square feet of manufacturing, laboratory and office space in a single-story building located in Franklin,
Massachusetts under a lease expiring October 31, 2017 and approximately 1,060 square feet of residential space as a corporate apartment
in Franklin, Massachusetts under a lease expiring July 24, 2014.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 9pt"> The Company
also leases approximately 7,900 square feet of corporate office space in a multi-story building located in Philadelphia, Pennsylvania
under a lease expiring May 31, 2017.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 9pt"> Future minimum
lease payments for each of the next 5 years under these operating leases are as follows:</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%; font: 10pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black"><b>Franklin</b></font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black"><b>Philadelphia</b></font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black"><b>Total</b></font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">For the period ending September 30,</font></td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 55%; text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">2013</font></td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">$</font></td>
<td style="width: 12%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">113,000</font></td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">$</font></td>
<td style="width: 12%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">46,000</font></td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">$</font></td>
<td style="width: 12%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">159,000</font></td>
<td style="width: 1%; line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">2014</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">447,000</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">187,000</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">634,000</font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">2015</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">444,000</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">192,000</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">636,000</font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">2016</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">454,000</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">196,000</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">650,000</font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">2017</font></td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">382,000</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">82,000</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">464,000</font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Total</font></td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">1,840,000</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">703,000</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">2,543,000</font></td>
<td style="line-height: 115%"> </td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 9pt"> The Company’s
facilities lease expense, including accruals for lease incentives, was approximately $141,000 and $56,000 for the three months
ended September 30, 2013 and 2012, respectively, and $530,000 and $207,000 for the nine months ended September 30, 2013 and 2012,
respectively.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt">The Company leases approximately
37,000 square feet of manufacturing, laboratory and office space in a single-story building located in Franklin, Massachusetts
under a lease expiring October 31, 2017.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt">The Company also leases approximately
7,900 square feet of corporate office space in a multi-story building located in Philadelphia, Pennsylvania under a lease expiring
May 31, 2017.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt">Future minimum lease payments
for each of the next five years under these operating leases at December 31, 2012 are approximately as follows:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td style="padding-bottom: 1.7pt">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 13pt"><b><u>Year Ending December
31, 2012:</u></b></p></td>
<td style="padding-bottom: 1.7pt; text-align: left; font-weight: bold"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; font-weight: bold"><b>Franklin</b></td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left; font-weight: bold"> </td>
<td style="padding-bottom: 1.7pt; text-align: left; font-weight: bold"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; font-weight: bold"><b>Philadelphia</b></td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left; font-weight: bold"> </td>
<td style="padding-bottom: 1.7pt; text-align: left; font-weight: bold"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; font-weight: bold"><b>Total</b></td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 58%; text-align: left; text-indent: 13pt">2013                                                                      </td>
<td style="width: 1%; text-align: left"> </td>
<td style="width: 1%; text-align: left">$</td>
<td style="width: 11%; text-align: right">421,000</td>
<td nowrap="nowrap" style="width: 1%; text-align: left"> </td>
<td style="width: 1%; text-align: left"> </td>
<td style="width: 1%; text-align: left">$</td>
<td style="width: 11%; text-align: right">185,000</td>
<td nowrap="nowrap" style="width: 1%; text-align: left"> </td>
<td style="width: 1%; text-align: left"> </td>
<td style="width: 1%; text-align: left">$</td>
<td style="width: 11%; text-align: right">606,000</td>
<td nowrap="nowrap" style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: left; text-indent: 13pt">2014                                                                      </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">431,000</td>
<td nowrap="nowrap" style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">189,000</td>
<td nowrap="nowrap" style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">620,000</td>
<td nowrap="nowrap" style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-align: left; text-indent: 13pt">2015                                                                      </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">441,000</td>
<td nowrap="nowrap" style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">194,000</td>
<td nowrap="nowrap" style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">635,000</td>
<td nowrap="nowrap" style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: left; text-indent: 13pt">2016                                                                      </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">451,000</td>
<td nowrap="nowrap" style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">198,000</td>
<td nowrap="nowrap" style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">649,000</td>
<td nowrap="nowrap" style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 1.7pt; text-align: left; text-indent: 13pt">2017                                                                      </td>
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right">383,000</td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right">83,000</td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right">466,000</td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-bottom: 3.45pt; text-align: left; text-indent: 13pt">Total                                                                      </td>
<td style="padding-bottom: 3.45pt; text-align: left"> </td>
<td style="border-bottom: black 4.5pt double; text-align: left">$</td>
<td style="border-bottom: black 4.5pt double; text-align: right">2,127,000</td>
<td nowrap="nowrap" style="padding-bottom: 3.45pt; text-align: left"> </td>
<td style="padding-bottom: 3.45pt; text-align: left"> </td>
<td style="border-bottom: black 4.5pt double; text-align: left">$</td>
<td style="border-bottom: black 4.5pt double; text-align: right">849,000</td>
<td nowrap="nowrap" style="padding-bottom: 3.45pt; text-align: left"> </td>
<td style="padding-bottom: 3.45pt; text-align: left"> </td>
<td style="border-bottom: black 4.5pt double; text-align: left">$</td>
<td style="border-bottom: black 4.5pt double; text-align: right">2,976,000</td>
<td nowrap="nowrap" style="padding-bottom: 3.45pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt">The Company’s facilities
lease expense was approximately $339,000, $224,000 and $169,000 for the years ended December 31, 2012, 2011 and 2010, respectively.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 9pt"> At September
30, 2013 and December 31, 2012, the Company had outstanding warrants to purchase 1,050,454 and 1,254,004 shares of its Common Stock,
respectively. Included in these outstanding warrants at September 30, 2013 and December 31, 2012 are warrants to purchase 700,000
and 736,015 shares, respectively, that are considered to be derivative financial instruments. The fair value of these derivative
instruments at September 30, 2013 and December 31, 2012 was approximately $979,000 and $5,585,000, respectively, and is included
in Derivative Warrant Liability, a current liability, in the Consolidated Balance Sheet. Changes in fair value of the derivative
financial instruments are recognized in the Consolidated Statement of Operations as a gain or loss on revaluation of derivative
warrant liability. The Loss on Revaluation of Derivative Warrant Liability for the three months ended September 30, 2013 was approximately
$70,000.  The Gain on Revaluation of Derivative Warrant Liability for the nine months ended September 31, 2013 was approximately
$4,606,000.  The Gain (Loss) on Revaluation of Derivative Warrant Liability for the three and nine months ended September
30, 2012 was approximately a loss of $400,000 and a gain of $201,281, respectively.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 9pt"> The Derivative
Warrant Liability represents the risk exposure pertaining to the warrants and is based on the fair value of the underlying common
stock and the Gain (Loss) on Revaluation of Derivative Warrant Liability is a result of the change in that fair value.  For
the three months ended September 30, 2013, no derivative warrants were exercised and none expired. For the nine months ended September
30, 2013, no derivative warrants were exercised and 45,164 expired. For the nine months ended September 30, 2012, 16,545 derivative
warrants were exercised, which resulted in a reclassification of approximately $61,000 from the Derivative Warrant Liability to
Additional Paid-in Capital.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 9pt"> The table below
presents the changes in the Level 3 Derivative Warrant Liability measured for the nine months ended September 30, 2013 and 2012:</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%; font: 10pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black"><b>2013</b></font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black"><b>2012</b></font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 76%; padding-right: 2.15pt; padding-left: 9pt; text-indent: 9pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Derivative Warrant Liability as of January 1</font></td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">$</font></td>
<td style="width: 9%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">5,585,141</font></td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">$</font></td>
<td style="width: 9%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">1,035,337</font></td>
<td style="width: 1%; line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-right: 2.15pt; padding-left: 9pt; text-indent: 27pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Warrants issued under Montaur credit facility</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">—</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">6,000,000</font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-right: 2.15pt; padding-left: 9pt; text-indent: 27pt; line-height: 115%; font-size: 11pt"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Total unrealized losses included in net loss </font><font style="font: 7pt Times New Roman, Times, Serif; color: black">(1)</font><font style="font: 10pt Times New Roman, Times, Serif; color: black">	</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">1,061,682</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">500,000</font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-right: 2.15pt; padding-left: 9pt; text-indent: 27pt; line-height: 115%; font-size: 11pt"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Total realized losses included in net loss</font><font style="font: 7pt Times New Roman, Times, Serif; color: black">(1)</font><font style="font: 10pt Times New Roman, Times, Serif; color: black">	</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">—</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">1,438</font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-right: 2.15pt; padding-left: 9pt; text-indent: 27pt; line-height: 115%; font-size: 11pt"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Total unrealized gains included in net loss </font><font style="font: 7pt Times New Roman, Times, Serif; color: black">(1)</font><font style="font: 10pt Times New Roman, Times, Serif; color: black">	</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">(5,515,000</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">)</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">(595,038</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">)</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-right: 2.15pt; padding-left: 9pt; text-indent: 27pt; line-height: 115%; font-size: 11pt"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Total realized gains included in net loss </font><font style="font: 7pt Times New Roman, Times, Serif; color: black">(1)</font><font style="font: 10pt Times New Roman, Times, Serif; color: black">	</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">(152,668</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">)</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">(107,681</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">)</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-right: 2.15pt; padding-left: 0.75in; text-indent: -0.25in; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Reclassification of derivative warrant liability to additional paid-in capital for derivative warrants exercised</font></td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">—</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">(61,520</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">)</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-right: 2.15pt; padding-left: 9pt; text-indent: 9pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Derivative Warrant Liability as of September 30</font></td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">979,155</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">6,772,536</font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%"> ______________________</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td colspan="8" style="line-height: 115%; font-size: 11pt"><font style="font: 7pt Times New Roman, Times, Serif; color: black">(1)</font><font style="font: 10pt Times New Roman, Times, Serif; color: black">	Included in Gain (Loss) on Revaluation of Derivative Warrant Liability in the Consolidated Statement of Operations.</font></td>
<td style="line-height: 115%"> </td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt">Derivative financial instruments
are recognized as a liability on the consolidated balance sheet and measured at fair value.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt">At December 31, 2012 and 2011,
the Company had outstanding warrants to purchase 1,254,004 and 752,753 shares of its common stock, respectively. Included in
these outstanding warrants at December 31, 2012 and 2011 are warrants to purchase 736,016 and 72,515 shares, respectively, that
are considered to be derivative instruments since the agreements contain “down round” provisions whereby the number
of shares covered by the warrants is subject to change in the event of certain dilutive stock issuances. The fair value of these
derivative instruments at December 31, 2012 and 2011 was approximately $5,585,000 and $1,035,000, respectively, and is included
in Derivative Warrant Liability, a current liability. Changes in fair value of the derivative financial instruments are recognized
currently in the Statements of Operations as a Gain (Loss) on Revaluation of Derivative Warrant Liability. The changes in the fair
value of the derivative warrant liability for the years ended December 31, 2012, 2011 and 2010 resulted in a gain (loss) of approximately
$3,684,000, $(1,763,000) and $371,000, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt">The primary underlying
risk exposure pertaining to the warrants is the change in fair value of the underlying common stock for each reporting
period. Of the total warrants exercised in 2012 and 2011, warrants to purchase 141,947 shares of Common
Stock were exercised in 2011 pursuant to a cashless exercise provision. No warrants were exercised in 2012 pursuant to
a cashless exercise provision.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt">For the years ended December 31, 2012 and 2011, warrants with down round provisions
to purchase 16,546 and 65,315 shares, respectively, were exercised and certain anti-dilution rights were waived (see Note
12) which resulted in a reclassification to additional paid-in capital in the amount of approximately $62,000 and $2,273,000,
respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt">The table below presents the changes in the Level 3 derivative warrant liability measured at fair value on a
recurring basis:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="padding-bottom: 1.7pt; text-align: left; font-weight: bold"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; font-weight: bold"><b>2012</b></td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left; font-weight: bold"> </td>
<td style="padding-bottom: 1.7pt; text-align: left; font-weight: bold"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; font-weight: bold"><b>2011</b></td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: left; font-weight: bold; text-indent: 13pt"><b>Liabilities:</b></td>
<td style="text-align: left"> </td>
<td colspan="2" style="text-align: left"> </td>
<td nowrap="nowrap" style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td colspan="2" style="text-align: left"> </td>
<td nowrap="nowrap" style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 72%; text-align: left; text-indent: 13pt">Derivative warrant liability as of January 1</td>
<td style="width: 1%; text-align: left"> </td>
<td style="width: 1%; text-align: left">$</td>
<td style="width: 11%; text-align: right">1,035,337</td>
<td nowrap="nowrap" style="width: 1%; text-align: left"> </td>
<td style="width: 1%; text-align: left"> </td>
<td style="width: 1%; text-align: left">$</td>
<td style="width: 11%; text-align: right">1,544,996</td>
<td nowrap="nowrap" style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: left; text-indent: 26pt">Warrants issued under Montaur credit facility</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">8,295,000</td>
<td nowrap="nowrap" style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">-</td>
<td nowrap="nowrap" style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-align: left; text-indent: 26pt">Total unrealized losses included in net loss <font style="font-size: 7pt">(1)</font><font style="color: black; letter-spacing: -1pt"> </font></td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">500,000</td>
<td nowrap="nowrap" style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">2,191,147</td>
<td nowrap="nowrap" style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: left; text-indent: 26pt">Total realized losses included in net loss <font style="font-size: 7pt">(1)</font><font style="color: black; letter-spacing: -1pt"> </font></td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">1,438</td>
<td nowrap="nowrap" style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">978,678</td>
<td nowrap="nowrap" style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-align: left; text-indent: 26pt">Total unrealized gains included in net loss <font style="font-size: 7pt">(1)</font><font style="color: black; letter-spacing: -1pt"> </font></td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">(4,077,433</td>
<td nowrap="nowrap" style="text-align: left">)</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">(1,377,261</td>
<td nowrap="nowrap" style="text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: left; text-indent: 26pt">Total realized gains included in net loss <font style="font-size: 7pt">(1)</font><font style="color: black; letter-spacing: -1pt"> </font></td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">(107,681</td>
<td nowrap="nowrap" style="text-align: left">)</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">(29,626</td>
<td nowrap="nowrap" style="text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 1.7pt">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 13pt">Reclassification of
liability to additional paid-in capital</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 22pt; text-align: left; text-indent: 13pt">for warrants</p></td>
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right">(61,520</td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left">)</td>
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right">(2,272,597</td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-bottom: 3.45pt; text-align: left; text-indent: 13pt">Derivative warrant liability as of December 31</td>
<td style="padding-bottom: 3.45pt; text-align: left"> </td>
<td style="border-bottom: black 4.5pt double; text-align: left">$</td>
<td style="border-bottom: black 4.5pt double; text-align: right">5,585,141</td>
<td nowrap="nowrap" style="padding-bottom: 3.45pt; text-align: left"> </td>
<td style="padding-bottom: 3.45pt; text-align: left"> </td>
<td style="border-bottom: black 4.5pt double; text-align: left">$</td>
<td style="border-bottom: black 4.5pt double; text-align: right">1,035,337</td>
<td nowrap="nowrap" style="padding-bottom: 3.45pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: left; text-indent: 13pt">________________________</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"> </td>
<td nowrap="nowrap" style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"> </td>
<td nowrap="nowrap" style="text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 13pt">(1)<font style="color: black; letter-spacing: 13pt"> </font>Included
in gain or loss on revaluation of derivative warrant liability in the Consolidated Statement of Operations.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 9pt"> The Company
is authorized to issue up to 40,000,000 shares of preferred stock with such rights, preferences and privileges as are determined
by the Board of Directors.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 9pt"> The Company
has authorized 10,000 shares of Series C Preferred Stock (the “Series C Stock”), of which 9,974.185 shares were issued
and outstanding as of September 30, 2013 and December 31, 2012.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Series D Convertible Preferred
Stock</i></b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 9pt"> The Company
has authorized 3,600,000 shares of Series D Convertible Preferred Stock (the “Series D Stock”), of which 3,006,000
shares were issued and outstanding as of September 30, 2013 and December 31, 2012.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt">The Company is authorized to
issue up to 40,000,000 shares of preferred stock with such rights, preferences and privileges as are determined by the Board of
Directors.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Series B Perpetual Redeemable Preferred
Stock and Warrant Financing</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt">The Company had
authorized 40,000 share of non-convertible Series B Perpetual Preferred Stock, $0.01 par value (“Series B
Stock”).  After giving effect to an exchange in October 2011 where certain warrants to purchase Common Stock
were exercised and, in lieu of delivering to the Company the cash exercise price for such warrant exercises, the investor
surrendered an aggregate of 170.1672 shares of Series B Stock with a redeemable vlaue of $1,701,672. As a part of the
exchange, the Company issued an aggregate of 1830.895 shares of Series C Stock. After giving effect to the
exchange, the Company has no authorized, issued or outstanding Series B stock.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Series C Convertible Preferred Stock</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt">The Company has authorized
10,000 shares of Series C Stock, of which 9,974.185 shares were issued and outstanding as of December 31, 2012 and 2011. The Series
C Stock was created on June 30, 2009.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Key terms of the Series C Stock are as follows:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: top">
<td style="width: 52px; font: 10pt Symbol; text-align: center"><font style="font-family: Symbol">·</font></td>
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Pursuant to the terms of the Certificate of Designation, Preference and Rights of Series C Preferred Stock (the “Series C Certificate”), each share of Series C Stock is initially convertible into 1,000 shares of Common Stock, subject to adjustment for stock splits, combinations or similar events.</td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: top">
<td style="width: 52px; font: 10pt Symbol; text-align: center"><font style="font-family: Symbol">·</font></td>
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Each holder who receives Series C Stock may convert its Series C Stock at any time following its issuance.</td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: top">
<td style="width: 52px; font: 10pt Symbol; text-align: center"><font style="font-family: Symbol">·</font></td>
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">In the event of any Liquidation Event (as defined in the Series C Certificate), the holders of Series C Stock will be entitled to receive (subject to the rights of any securities designated as senior to the Series C Stock) a per share liquidation preference equal to an amount calculated by taking the total amount available for distribution to holders of all the Company’s outstanding Common Stock before deduction of any preference payments for  the Series C Stock, divided by the total of (x) all of the then outstanding shares of Common Stock, plus (y) all of the shares of Common Stock into which all of the outstanding shares of the Series C Stock can be converted, in each case prior to any distribution to the holders of Common Stock or any other securities designated as junior to the Series C Stock.</td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Series D Convertible Preferred Stock</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt">The Company has authorized
3,600,000 shares of Series D Preferred Stock (the “Series D Stock”), of which 3,006,000 shares were issued and outstanding
as of December 31, 2012 and December 31, 2011.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 20pt">Key terms of the Series D Stock are as follows:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: top">
<td style="width: 52px; font: 10pt Symbol; text-align: center"><font style="font-family: Symbol">·</font></td>
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Pursuant to the terms of the Certificate of Designation, Preferences and Rights of the Series D Convertible Preferred Stock, the shares of Series D Stock are initially convertible into shares of Common Stock at a price per share equal to $10.00, subject to adjustment for stock splits, business combinations or similar events, and shall have a liquidation preference equal to their stated value.</td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: top">
<td style="width: 52px; font: 10pt Symbol; text-align: center"><font style="font-family: Symbol">·</font></td>
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Each holder who receives Series D Stock may convert it at any time following its issuance.</td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: top">
<td style="width: 52px; font: 10pt Symbol; text-align: center"><font style="font-family: Symbol">·</font></td>
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">The Series D Stock does not pay a dividend and is not redeemable.</td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt">On February 8, 2011 the Company
entered into a Series D Convertible Preferred Stock Purchase Agreement (the “Series D Agreement”) with Montaur and
certain other strategic accredited investors (each, a “Series D Investor” and collectively, the “Series D Investors”)
in connection with the Company’s private placement (the “Series D Financing”) of Series D Convertible Preferred
Stock (“Series D Stock”) at a price per share of $1.00. For every $100,000 face value of Series D Stock purchased in
the Series D Financing, the Series D Investor was issued (i) Series 1 warrants to purchase 5,000 shares of Common Stock with an
exercise price of $15.00 per share (the “Series D-1 Warrants”), and (ii) Series 2 warrants to purchase 50,000 shares
of Common Stock with an exercise price of $25.00 per share (the “Series D-2 Warrants” and, together with the Series
D-1 Warrants, the “Series D Warrants”).</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt">On February 8, 2011 there was
a closing in connection with the Series D Agreement and the Company received cash proceeds of $2,500,000 for the purchase of 2,500,000
shares of Series D Stock. The Company issued 1,006,000 shares of Series D Stock in exchange for the extinguishment of an 8% Senior
Promissory Note issued by the Company on January 5, 2011 in the principal amount of $1,000,000, plus interest accrued through February
1, 2011 in the amount of $6,000.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt">The Company issued an aggregate
of 1,753,000 Series D-1 Warrants and 1,753,000 Series D-2 Warrants to the Series D Investors pursuant to the Series D Agreement.
The Series D Warrants are immediately exercisable and expire on February 7, 2013; however, if the Series D Warrants are not exercised
in full by February 7, 2013 by virtue of the application of a beneficial ownership “blocker”, then the term of the
Series D Warrants shall be extended for thirty (30) days past the date on which the beneficial ownership blocker is no longer applicable.
An exercise under the Series D Warrants may not result in the holder beneficially owning more than 4.99% or 9.99%, as applicable,
of all of the Common Stock outstanding at the time; provided, however, that a holder may waive the foregoing provision upon 61
days’ advance written notice to the Company. The exercise price of these warrants is subject to adjustment for stock splits,
business combinations or similar events.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt">In connection with issuance
of Series D Stock, the conversion feature of Series D Stock was considered beneficial, or “in the money”, at issuance
due to a conversion rate that allows the investor to obtain the Common Stock at below market price. The Company recorded a deemed
dividend on the beneficial conversion feature equal to the incremental fair value resulting from the reduction in the conversion
rate of $1,975,211. This deemed dividend is included in the 2011 Consolidated Statement of Operations in arriving at the Net Loss
Applicable to Common Shareholders.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt">In accordance with (i) the
Certificate of Designation, Rights and Preferences of the Series B Stock (the “Series B Certificate”) and (ii) a letter
agreement dated January 19, 2010 between the Company and the sole holder of the Series B Stock (the “Series B Holder”),
the Company was obligated to use 25% of the gross proceeds from the Series D Financing to redeem the Series B Stock. On February
4, 2011, the Company entered into a letter agreement (the “Letter”) with the Series B Holder pursuant to which the
Series B Holder waived the redemption of shares of the Series B Stock triggered by the Series D Financing.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt">On October 19, 2011, an investor
converted 500,000 shares of Series D Stock into 50,000 shares of Common Stock.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 9pt"> The Company
has authorized 150,000,000 shares of Common Stock, of which 10,699,990 and 4,437,346 shares were issued and outstanding as of September
30, 2013 and December 31, 2012, respectively.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>January 2013 Financing</i></b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 9pt"> On January 31,
2013 and February 1, 2013, the Company entered into underwriting agreements (collectively, the “Underwriting Agreements”)
with Aegis Capital Corp. (“Aegis”), as a representative of several underwriters, with respect to the issuance and sale
in an underwritten public offering by the Company of an aggregate of 1,567,833 shares of the Company’s Common Stock (including
204,500 shares sold pursuant to the over-allotment option), at a price to the public of $7.50 per share.  The net proceeds
to the Company, after deducting the underwriting discount and other offering expenses payable by the Company, from the sale of
the shares in the offering were approximately $10,626,000.  Subsequent to the offering, the Company used a portion of
the net proceeds of the offering to pay off the Promissory Note issued to Platinum-Montaur Life Sciences, LLC (“Montaur”)
in connection with the $20 million non-revolving draw credit facility with Montaur.  The Note will mature on August 31,
2017.  See Note 13.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>June 2013 Financing</i></b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 9pt"> On June 13,
2013, the Company entered into an underwriting agreement with Aegis, as a representative of several underwriters, with respect
to the issuance and sale in an underwritten public offering by the Company of an aggregate of 4,628,750 shares of the Company’s
Common Stock (including 603,750 shares sold pursuant to the over-allotment option), at a price to the public of $2.70 per share.  The
net proceeds to the Company, after deducting the underwriting discount and other offering expenses payable by the Company, from
the sale of the shares in the offering were approximately $11,338,000.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Stock Issued in Exchange for Services</i></b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 9pt"> During the nine
months ended September 30, 2013 and 2012, the Company issued 7,450 and 7,033 shares, respectively, of Common Stock with a fair
value of $89,970 and $118,465, respectively, to vendors in exchange for their services.  Expenses associated with these
transactions were included in Selling, General and Administrative Expenses in the Consolidated Statements of Operations.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt"><font style="font-size: 10pt">The
Company has authorized 150,000,000 shares of Common Stock, $0.01 par value per share, of which 4,437,346 and 3,854,400 shares
were issued and outstanding as of December 31, 2012 and December 31, 2011, respectively.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 10pt"><b><i> </i></b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 10pt"><b><i>February
2010 Financing</i></b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 10pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt"><font style="font-size: 10pt">On
February 4, 2010, the Company entered into a Common Stock and Warrant Purchase Agreement (the “February Agreement”)
with certain strategic institutional and accredited investors in connection with the Company’s private placement (the “February
Financing”) of shares of its Common Stock, at a price of $15.00 per share (the “February Shares”). Under the terms
of the February Agreement, each investor received warrants to purchase a number of shares of Common Stock with an exercise price
of $22.50 per share equal to fifty percent (50%) of the number of February Shares purchased by such investor (the “February
Warrants”). The Company issued 163,374 shares of Common Stock and received gross proceeds of approximately $2,455,000 in
connection with the February Financing. Total cost to issue the shares was $361,111 which included non-cash costs of $217,141.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 10pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt"><font style="font-size: 10pt">Pursuant
to the February Agreement, the Company issued an aggregate of 81,836 February Warrants to the investors and 12,890 warrants
to the placement agent and its assignees. The February Warrants are immediately exercisable and expire no later than five (5)
years from the date of issuance. The exercise price is subject to adjustment for stock splits, combinations or similar events.
The February Warrants allow for cashless exercise. An exercise under the February Warrants may not result in the holder beneficially
owning more than 4.99% or 9.99%, as applicable, of all of the Common Stock outstanding at the time; provided, however, that a
holder may waive the foregoing provision upon sixty-one (61) days’ advance written notice to the Company.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 10pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 10pt"><b><i>November
2010 Financings</i></b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 10pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt"><font style="font-size: 10pt">In
November 2010, the Company initiated a private placement (the “November 2010 Financing”) of up to 120 units (each, a
“Unit” and together, the “Units”) or partial Units at a price per Unit of $25,000. Each Unit consists of (i)
2,500 shares of Common Stock, (ii) Series 1 warrants to purchase 1,250 shares of the Company’s Common Stock with an exercise
price of $15.00 per share (the “Series 1 Warrants”), and (iii) Series 2 warrants to purchase 1,250 shares of Common
Stock with an exercise price of $25.00 per share (the “Series 2 Warrants”).</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 10pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt"><font style="font-size: 10pt">Through
December 31, 2010, the Company had entered into subscription agreements with certain strategic institutional and accredited investors
in connection with the November 2010 Financing for a total of 68.8 units. The Company received gross proceeds from these subscriptions
in the amount of $1,720,000. The Company received proceeds of $100,000 in the form of extinguishment of a Short-Term Note issued
by the Company on September 28, 2010, which included principal and interest. Additionally, the Company had received a commitment
for an additional 11.4 Units for which the expected proceeds of $285,000 had not been received as of December 31, 2010.  This
was treated as a stock subscription receivable as of December 31, 2010. The proceeds of $285,000 were received and stock issued
in January and February 2011.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 10pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt"><font style="font-size: 10pt">As
of December 31, 2010, the Company issued an aggregate of 172,000 shares of Common Stock and under commitments for an additional
11.4 Units was obligated to issue an additional 28,500 shares and an aggregate of 100,250 Series 1 Warrants and 100,250 Series
2 Warrants to the investors. These warrants are immediately exercisable and expire three years after issuance. The exercise price
is subject to adjustment for stock splits, combinations or similar events. An exercise under these warrants may not result in
the holder beneficially owning more than 4.99% or 9.99%, as applicable, of all of the Common Stock outstanding at the time; provided,
however, that a holder may waive the foregoing provision upon sixty-one (61) days’ advance written notice to the Company.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 10pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt"><font style="font-size: 10pt">In
2011, the Company entered into a subscription agreement with certain strategic institutional and accredited investors in connection
with the November 2010 Financing for a total of 35.66 Units. The Company received proceeds from these subscriptions in the amount
of $891,500, which included proceeds of $25,000 in the form of extinguishment of a 2010 Short Term Promissory Note issued by the
Company on September 24, 2010. Pursuant to these November 2010 Financing closings that occurred in 2011, the Company issued an
aggregate of 44,575 Series 1 Warrants and 44,575 Series 2 Warrants to the investors.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 10pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 10pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 10pt"><b><i>Placement
Agent Arrangements for 2010 Financings</i></b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 10pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt"><font style="font-size: 10pt">On
June 30, 2009, the Company entered into an engagement letter with Burnham Hill Partners LLC (“Burnham”) pursuant to
which Burnham provided placement agent services to the Company in connection with the Series B Financing. The Company agreed to
pay Burnham (a) a cash fee of $200,000 (the “Series B Fee”) which was due and payable upon the earlier of (i) the Company
having a net cash balance in excess of $2,000,000 or (ii) October 1, 2009; and (b) warrants to acquire 40,000 shares of Common
Stock, with a term of five years, an exercise price per share equal to 105% of the closing bid price of our Common Stock on June
30, 2009.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 10pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt"><font style="font-size: 10pt">On
September 30, 2009, the Company and Burnham entered into a letter agreement (the “Burnham Letter”) extending the due
date of the Series B Fee. The Letter provides that the Fee is due and payable by the Company upon the earlier of (i) the Company
having a cash balance in excess of $2,000,000 or (ii) March 31, 2010.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 10pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt"><font style="font-size: 10pt">On
March 16, 2010, Burnham LLC agreed that the Company does not owe Burnham any fees that may have been payable pursuant to any and
all previous agreements between Burnham and the Company. Accordingly, the Company recorded a gain on extinguishment of financing
fee payable of $200,000 in 2010.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 10pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt"><font style="font-size: 10pt">On
February 4, 2010, the Company entered into an engagement letter with Burnham pursuant to which Burnham provided placement agent
services to the Company in connection with the February Financing.  The Company agreed to pay Burnham for its services
as follows: (a) a cash fee equal to seven percent (7%) of the gross cash proceeds received by the Company in connection with the
February Financing from investors Burnham directly introduced to the February Financing; and (b) warrants to acquire a number
of shares of Common Stock equal to 10% of the number of Shares issued to the investors directly introduced to the February Financing
by Burnham at a per share exercise price equal to the exercise price of the Warrants and with such other terms and conditions
as are equal or substantially similar to those included in the Warrants.  The Company also agreed to pay Burnham’s
reasonable out of pocket expenses incurred in connection with the February Financing in an amount not to exceed $5,000.  Burnham
received a cash placement fee of $29,925 and the Company issued to Burnham and/or its designees and assignees warrants to purchase
2,850 shares of Common Stock. The fair value of these warrant shares was determined to be approximately $48,000 as of February
3, 2010 which was recorded as both a debit and credit to additional paid-in capital as a stock issuance cost.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 10pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt"><font style="font-size: 10pt">On
February 4, 2010, the Company entered into an engagement letter with Boenning & Scattergood, Inc. (“Boenning”) pursuant
to which Boenning provided placement agent services to the Company in connection with the February Financing.  The Company
agreed to pay Boenning for its services as follows: (a) a cash fee equal to seven percent (7%) of the gross cash proceeds received
by the Company in connection with the February Financing from investors Boenning directly introduced to the February Financing;
and (b) warrants to acquire a number of shares of Common Stock equal to 10% of the number of shares of Common Stock issued to
the investors directly introduced to the February Financing by Boenning at a per share exercise price equal to the exercise price
of the Warrants and with such other terms and conditions as are equal or substantially similar to those included in the Warrants.  The
Company also agreed to pay Boenning’s reasonable out of pocket expenses incurred in connection with the February Financing
in an amount not to exceed $5,000. Boenning received a cash placement fee of $110,410 and the Company issued to Boenning and/or
its designees and assignees warrants to purchase 10,040 shares of Common Stock. The fair value of these warrant shares was determined
to be approximately $169,000 as of February 3, 2010 which was recorded as both a debit and credit to additional paid-in capital
as a stock issuance cost.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 10pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt"><font style="font-size: 10pt">On
September 15, 2010, the Company retained LifeTech Capital, a division of Aurora Capital, LLC (“LifeTech”), as a placement
agent.  The Company agreed to pay LifeTech for its services as follows: (a) a cash fee equal to seven percent (7%) of
the gross cash proceeds in excess of $150,000 received by the Company in connection with the November 2010 Financing from investors
introduced to the November 2010 Financing by LifeTech; and (b) warrants to acquire a number of shares of Common Stock equal to
10% of the securities sold to investors introduced to the November 2010 Financing by LifeTech.  The warrants are identical
to those issued to the investors in the November 2010 Financing, except that they include a cashless exercise provision. 
LifeTech also received an up-front cash fee of $10,000 for financial advisory services.  In connection with the November
2010 Financing, the Company paid cash fees of $8,750 and $7,875 in 2010 and 2011, respectively, and issued LifeTech warrants to
purchase 1,375 shares of Common Stock at an exercise price of $15.00 per share and 1,375 shares of Common Stock at an exercise
price of $25.00 per share with a combined fair value of approximately $25,000 which was recorded as non-cash stock issuance cost
in 2010. The Company issued LifeTech warrants to purchase 563 shares of Common Stock at an exercise price of $15.00 per share
and warrants to purchase 563 shares of Common Stock at an exercise price of $25.00 per share, for a combined fair value of approximately
$11,000 which was recorded as a non-cash stock issuance cost in 2011.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 10pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt"><font style="font-size: 10pt">On
December 29, 2010, the Company also retained Monarch Capital Group, LLC (“Monarch”) as a placement
agent.  The Company agreed to pay Monarch for its services as follows: (a) a cash fee equal to seven percent (7%)
of the gross cash proceeds received by the Company in connection with the November 2010 Financing from investors introduced
to the November 2010 Financing by Monarch; and (b) warrants to acquire a number of shares of Common Stock equal to 10% of the
securities sold to investors introduced to the November 2010 Financing by Monarch.  The warrants are identical to those
issued to the investors in the November 2010 Financing.  The Company paid cash fees to Monarch of $29,750 and $19,250 in
2010 and 2011, respectively. The Company has issued Monarch warrants to purchase 2,125 shares of Common Stock at an exercise
price of $15.00 per share and 2,125 shares of Common Stock at an exercise price of $25.00 per share pursuant to this
arrangement with a combined fair value of approximately $42,000 which was recorded as non-cash stock issuance cost in 2010.
The Company issued Monarch warrants to purchase 1,375 shares of Common Stock at an exercise price of $15.00 per share and
warrants to purchase 1,375 shares of Common Stock at an exercise price of $25.00 per share, for a combined fair value of
approximately $30,000 which was recorded as a non-cash stock issuance cost in 2011.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 10pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 10pt"><b><i>December
2011 Financing</i></b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 10pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt"><font style="font-size: 10pt">On
December 5, 2011, the Company entered into purchase agreements with certain strategic investors relating to the issuance and sale
of an aggregate of 239,895 shares of Common Stock, par value $0.01, and warrants to purchase an aggregate of  95,959
shares of Common Stock. The Common Stock and warrants to purchase Common Stock were sold in units, with each unit consisting of
(i) one share of Common Stock and (ii) a warrant to purchase 0.4 of a share of Common Stock, at a public offering price of $22.50
per unit. The warrants will become exercisable six months after the date of issuance at an exercise price of $30.00 per share,
and will expire three years from the date of issuance. The Company issued 239,895 shares on December 7, 2011, raising $5,397,625.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 10pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 10pt"><b><i>December
2012 Financings</i></b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 10pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt"></p>
<p style="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"><font style="font-size: 10pt">On
December 19, 2012, the Company entered into Stock Purchase Agreements with accredited investors pursuant to which the Company
issued and sold an aggregate of 40,000 shares of the Company’s Common Stock at a purchase price of $8.00 per share, for
aggregate consideration of $320,000 in cash. </font></p>
<p style="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"><font style="font-size: 10pt"> </font></p>
<p style="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"><font style="font-size: 10pt">On
December 20, 2012, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Aegis Capital
Corp. with respect to the issuance and sale of an underwritten public offering by the Company of 320,000 shares of the Company’s
Common Stock, at a price to the public of $9.50 per share with a 45-day option to purchase up to an additional 48,000 shares.
The Underwriting Agreement contains customary representations, warranties and agreements by the Company, customary conditions
to closing, indemnification obligations of the Company and the Underwriters, including for liabilities under the Securities Act
of 1933, as amended (the “Securities Act”), other obligations of the parties and termination provisions.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 10pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"><font style="font-size: 10pt">The
net proceeds to the Company, after deducting the underwriting discount and other offering expenses payable by the Company, from
the sale of 368,000 shares (including 48,000 shares sold pursuant to the over-allotment option) in the offering were approximately
$3,036,000. The Company expects to use the net proceeds of the offering for general corporate purposes, including manufacturing
‘get ready’ and key equipment purchases; planned clinical trial expenses; sales and marketing channel preparations;
European operations planning; other research and development expenses and general and administrative expenses.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 10pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 10pt"><b><i>January
2013 Financing (Subsequent Event)</i></b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 10pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"><font style="font-size: 10pt">On
January 31, 2013 and February 1, 2013, the Company entered into underwriting agreements (collectively, the “Underwriting
Agreements”) with Aegis Capital Corp. as a representative of both underwriters (collectively, the “Underwriters”),
with respect to the issuance and sale in an underwritten public offering by the Company of an aggregate 1,363,334 shares of the
Company’s Common Stock, at a price to the public of $7.50 per share with a 45-day option to purchase up to an additional
204,500 shares. The Underwriting Agreements contain customary representations, warranties and agreements by the Company, customary
conditions to closing, indemnification obligations of the Company and the Underwriters, including for liabilities under the Securities
Act of 1933, as amended, other obligations of the parties and termination provisions.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"><font style="font-size: 10pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"><font style="font-size: 10pt">The
net proceeds to the Company, after deducting the underwriting discount and other offering expenses payable by the Company, from
the sale of 1,567,834 shares (including 204,500 shares sold pursuant to the over-allotment option) in the offering were approximately
$10,666,000. At the time of the offering, the Company expected to use a portion of the net proceeds of the offering to pay off
the Notes issued to Platinum-Montaur Life Sciences, LLC in connection with the $20 million non-revolving draw credit facility
with Platinum-Montaur Life Sciences, LLC. The Notes were scheduled to mature on August 31, 2017. As of March 1, 2013, the entire
balance under the Notes was $113,366, which included $3,000,000 of principal and $113,366 of accrued and unpaid interest. See
Note 6 for the subsequent repayment of this debt on March 1, 2013. </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 22pt"><font style="font-size: 10pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 -22pt; text-align: justify; text-indent: 22pt"><font style="font-size: 10pt"><b><i>Stock
Issued in Exchange for Services</i></b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 10pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 22pt"><font style="font-size: 10pt">During
the years ended December 31, 2012, 2011 and 2010, the Company issued 9,534, 13,800 and 26,500 shares of Common Stock, respectively,
with a fair value of $153,464, $449,000 and $466,000, respectively, to vendors in exchange for their services. The Company recorded
expense related to these issuances, which represents the fair value of the related stock at the time of issuance, to Selling,
General and Administrative expense.</font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 9pt"> In March 2003,
the Company’s shareholders approved its 2003 Stock Option and Incentive Plan (the “2003 Plan”). Pursuant to the
2003 Plan, the Company’s Board of Directors (or its committees and/or executive officers delegated by the Board of Directors)
may grant incentive and nonqualified stock options, restricted stock, and other stock-based awards to the Company’s employees,
officers, directors, consultants and advisors.  As of September 30, 2013, there were 31,125 restricted shares of Common
Stock issued and options to purchase an aggregate of 82,125 shares of Common Stock outstanding under the 2003 Plan and none are
available for future grants due to the expiration of the 2003 Plan.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 9pt"> In May 2008,
the Company’s shareholders approved the 2008 Equity Compensation Plan (the “2008 Plan”). The 2008 Plan provides
for grants of incentive stock options to employees and nonqualified stock options and restricted stock to employees, consultants
and non-employee directors of the Company.  In May 2013, the Company’s shareholders approved an amendment to the
2008 Plan to fix the maximum number of shares available under the 2008 Plan at 10,000,000 shares following shareholder approval
of a 1-for-10 reverse stock split effective June 7, 2013.  As of September 30, 2013, there were 155,761 restricted shares
of Common Stock issued and options to purchase an aggregate of 394,011 shares of Common Stock outstanding under the 2008 Plan and
9,592,989 shares available for future grants.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 9pt"> The following
table shows the remaining shares available for future grants for each plan and outstanding shares:</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%; font: 10pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="6" style="border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black"><b>Equity Compensation Plans</b></font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="4" style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black"><b>2003 Plan</b></font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black"><b>2008 Plan</b></font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="4" style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="border-bottom: black 1pt solid; text-align: justify; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black"><b>Shares Available For Issuance</b></font></td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="4" style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-left: 9pt; text-align: justify; line-height: 115%; text-indent: -9pt"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Total reserved for stock options and restricted stock</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">160,000</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">10,000,000</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="4" style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 0.25in; text-align: justify; line-height: 115%; text-indent: 9pt"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Net restricted stock issued net of cancellations</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">(31,125</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">)</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">(320,978</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">)</font></td>
<td style="line-height: 115%"> </td>
<td colspan="4" style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-left: 0.25in; text-align: justify; line-height: 115%; text-indent: 9pt"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Stock options granted</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">(154,449</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">)</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">(326,750</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">)</font></td>
<td style="line-height: 115%"> </td>
<td colspan="4" style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 0.25in; text-align: justify; line-height: 115%; text-indent: 9pt"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Add back options cancelled before exercise</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">67,849</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">75,500</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="4" style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-left: 0.25in; text-align: justify; line-height: 115%; text-indent: 9pt"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Less shares no longer available due to Plan expiration</font></td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">(42,275</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">)</font></td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">—</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="4" style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 9pt; text-align: justify; line-height: 115%; text-indent: -9pt"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Remaining shares available for future grants at September 30, 2013</font></td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">—</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">9,427,772</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="4" style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td colspan="9" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black"><b>Not Pursuant to a Plan</b></font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: bottom; width: 63%; text-align: justify; line-height: 115%; text-indent: 0pt; padding-left: -10pt"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Stock options granted</font></td>
<td style="vertical-align: bottom; width: 1%; line-height: 115%"> </td>
<td style="vertical-align: bottom; width: 1%; line-height: 115%"> </td>
<td style="vertical-align: bottom; width: 9%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">154,449</font></td>
<td style="vertical-align: bottom; width: 1%; line-height: 115%"> </td>
<td style="vertical-align: bottom; width: 1%; line-height: 115%"> </td>
<td style="vertical-align: bottom; width: 1%; line-height: 115%"> </td>
<td style="vertical-align: bottom; width: 9%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">326,750</font></td>
<td style="vertical-align: bottom; width: 1%; line-height: 115%"> </td>
<td style="vertical-align: bottom; width: 1%; line-height: 115%"> </td>
<td style="vertical-align: bottom; width: 1%; line-height: 115%"> </td>
<td style="vertical-align: bottom; width: 9%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">310,000</font></td>
<td style="vertical-align: bottom; width: 1%; line-height: 115%"> </td>
<td style="vertical-align: top; width: 1%; line-height: 115%"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: bottom; text-align: justify; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Less:  
Stock options cancelled</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">(67,849</font></td>
<td style="vertical-align: bottom; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">)</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">(75,500</font></td>
<td style="vertical-align: bottom; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">)</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">(138,333</font></td>
<td style="vertical-align: bottom; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">)</font></td>
<td style="vertical-align: top; line-height: 115%"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: bottom; text-align: justify; line-height: 115%; text-indent: 27pt"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Stock
options exercised</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">(35,600</font></td>
<td style="vertical-align: bottom; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">)</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">(13,000</font></td>
<td style="vertical-align: bottom; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">)</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">(66,667</font></td>
<td style="vertical-align: bottom; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">)</font></td>
<td style="vertical-align: top; line-height: 115%"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: bottom; text-align: justify; line-height: 115%; text-indent: 0pt"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Net shares outstanding before restricted stock</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">51,000</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">238,250</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">105,000</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: top; line-height: 115%"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: bottom; text-align: justify; line-height: 115%; text-indent: 0pt"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Net restricted stock issued net of cancellations</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">31,125</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">320,978</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">28,484</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: top; line-height: 115%"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: bottom; text-align: justify; line-height: 115%; text-indent: 0pt"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Outstanding shares at September 30, 2013</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; line-height: 115%"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">82,125</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; line-height: 115%"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">559,228</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; line-height: 115%"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">133,484</font></td>
<td style="vertical-align: bottom; line-height: 115%"> </td>
<td style="vertical-align: top; line-height: 115%"> </td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 9pt"> The fair value
of each stock option award is estimated on the date of grant using the Black-Scholes option pricing model with certain assumptions
noted below. Expected volatilities are based on historical volatility of the Common Stock using historical periods consistent with
the expected term of the options. The Company uses historical data, as well as subsequent events occurring prior to the issuance
of the financial statements, to estimate option exercise and employee termination and forfeitures within the valuation model. The
expected term of stock options granted under the Company’s stock plans is based on the average of the contractual term (generally
10 years) and the vesting period (generally 24 to 42 months).  The risk-free rate is based on the yield of a U.S. Treasury
security with a term consistent with the option.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 9pt"> The assumptions
used principally for stock options granted to employees and members of the Company’s Board of Directors in the nine months
ended September 30, 2013 and 2012 were as follows:</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%; font: 10pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black"><b>2013</b></font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black"><b>2012</b></font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 56%; padding-right: 5.05pt; padding-left: 9pt; text-indent: -9pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Risk-free interest rate</font></td>
<td style="width: 1%; text-align: right; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 18%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">0.13% - 1.89</font></td>
<td style="width: 2%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">%</font></td>
<td style="width: 1%; text-align: right; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 18%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">0.94% - 2.05</font></td>
<td style="width: 2%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">%</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-right: 5.05pt; padding-left: 9pt; text-indent: -9pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Expected dividend yield</font></td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">—</font></td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">—</font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-right: 5.05pt; padding-left: 9pt; text-indent: -9pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Expected term</font></td>
<td style="text-align: right; line-height: 115%"> </td>
<td colspan="2" style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">1 - 6.5 years</font></td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td colspan="2" style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">6.5 years</font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-right: 5.05pt; padding-left: 9pt; text-indent: -9pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Forfeiture rate (excluding fully vested stock options)</font></td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">15</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">%</font></td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">15</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">%</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-right: 5.05pt; padding-left: 9pt; text-indent: -9pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Expected volatility</font></td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">129% - 141</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">%</font></td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">129% - 137</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">%</font></td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 9pt"> A summary of
stock option activity as of and for the nine months ended September 30, 2013 is as follows:</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%; font: 10pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="border-bottom: black 1pt solid">
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><b>Stock Options</b></p></td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid">
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Shares</b></p></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid">
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Weighted-</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Average</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Exercise</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Price</b></p></td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid">
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Weighted-</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Average</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Remaining</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Contractual</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Term</b></p></td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid">
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Aggregate</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Intrinsic</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Value</b></p></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-left: 9pt; text-indent: -9pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Outstanding at January 1, 2013</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">343,334</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">$</font></td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">14.75</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 0.25in; text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Granted</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">78,250</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">4.43</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-left: 0.25in; text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Exercised</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">—</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">—</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 0.25in; text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Forfeited or expired</font></td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">(71,916</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">)</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">13.38</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 51%; padding-left: 9pt; text-indent: -9pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Outstanding at September 30, 2013</font></td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; border-bottom: black 2.25pt double; line-height: 115%"> </td>
<td style="width: 10%; border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">349,668</font></td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">$</font></td>
<td style="width: 10%; border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">12.45</font></td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 10%; border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">5.80 years</font></td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">$</font></td>
<td style="width: 10%; border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">—</font></td>
<td style="width: 1%; line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 9pt; text-indent: -9pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Exercisable at September 30, 2013</font></td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">243,592</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">11.34</font></td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">4.86 years</font></td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">—</font></td>
<td style="line-height: 115%"> </td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 9pt"> The weighted-average
grant-date fair value of stock options granted during the nine months ended September 30, 2013 was $3.37 per share. Share-based
compensation expense related to stock options recognized in the nine months ended September 30, 2013 and 2012 was approximately
$554,000 and $720,000, respectively. As of September 30, 2013, there was approximately $1,149,000 of total unrecognized compensation
expense related to non-vested share-based option compensation arrangements. With the exception of the unrecognized share-based
compensation related to certain restricted stock grants to officers and employees that contain performance conditions related to
United States Food and Drug Administration (“FDA”) approval for Symphony or the sale of substantially all of the stock
or assets of the Company (see Note 10 on Restricted Stock below), unrecognized compensation is expected to be recognized over the
next four years.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt">In March 2003, the Company’s
shareholders approved its 2003 Stock Option and Incentive Plan (the “2003 Plan”). Pursuant to the 2003 Plan, the Company’s
Board of Directors (or its committees and/or executive officers delegated by the Board of Directors) may grant incentive and nonqualified
stock options, restricted stock, and other stock-based awards to the Company’s employees, officers, directors, consultants
and advisors. As of December 31, 2012, the maximum aggregate number of shares that may be authorized for issuance under the 2003
Plan for all periods is 160,000 shares. As of December 31, 2012, there were 31,125 restricted shares of Common Stock issued
and options to purchase an aggregate of 82,125 shares of Common Stock outstanding under the 2003 Plan and 42,275 shares available
for future grants.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt">In May 2008, the
Company’s shareholders approved the 2008 Equity Compensation Plan (the “2008 Plan”). The 2008 Plan provides
for grants of incentive stock options to employees and nonqualified stock options and restricted stock to employees,
consultants and non-employee directors of the Company. In July 2010, the Company’s shareholders approved an amendment to
the 2008 Plan to increase the maximum number of shares of Common Stock available under the Plan by 2,000,000 shares to
4,700,000 shares.  In June 2012, the Company’s shareholders approved an amendment to the 2008 Plan to increase
the maximum number of shares available under the Plan by 5,300,000 shares to 10,000,000 shares.  As of December 31,
2012, there were restricted shares of Common Stock issued and options to purchase an aggregate of 444,224 shares of Common
Stock outstanding under the 2008 Plan and 9,542,776 shares available for future grants.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt">The tables below show the remaining
shares available for future grants for each plan and the outstanding shares.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 26pt"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="padding-bottom: 1.7pt; text-align: left; font-weight: bold"> </td>
<td colspan="6" style="border-bottom: black 1.5pt solid; text-align: center; font-weight: bold"><b>Stock Option Plans</b></td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left; font-weight: bold"> </td>
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td colspan="2" style="padding-bottom: 1.7pt; text-align: left"> </td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="padding-bottom: 1.7pt; text-align: left; font-weight: bold"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; font-weight: bold"><b>2003</b></td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left; font-weight: bold"> </td>
<td style="padding-bottom: 1.7pt; text-align: left; font-weight: bold"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; font-weight: bold"><b>2008</b></td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left; font-weight: bold"> </td>
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td colspan="2" style="padding-bottom: 1.7pt; text-align: left"> </td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom">
<td style="border-bottom: black 1.5pt solid; text-align: left; font-weight: bold"><b>Shares Available For Issuance</b>:</td>
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td colspan="2" style="padding-bottom: 1.7pt; text-align: left"> </td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td colspan="2" style="padding-bottom: 1.7pt; text-align: left"> </td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td colspan="2" style="padding-bottom: 1.7pt; text-align: left"> </td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-align: left; text-indent: -9pt; padding-left: 11pt">Total reserved for stock options and restricted stock</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">160,000</td>
<td nowrap="nowrap" style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">10,000,000</td>
<td nowrap="nowrap" style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td colspan="2" style="text-align: left"> </td>
<td nowrap="nowrap" style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: left">Restricted stock issued net of cancellations</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">(31,125</td>
<td nowrap="nowrap" style="text-align: left">)</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">(256,891</td>
<td nowrap="nowrap" style="text-align: left">)</td>
<td style="text-align: left"> </td>
<td colspan="2" style="text-align: left"> </td>
<td nowrap="nowrap" style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-align: left">Stock options granted</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">(154,449</td>
<td nowrap="nowrap" style="text-align: left">)</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">(254,500</td>
<td nowrap="nowrap" style="text-align: left">)</td>
<td style="text-align: left"> </td>
<td colspan="2" style="text-align: left"> </td>
<td nowrap="nowrap" style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: left">Add back options cancelled before exercise</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">67,849</td>
<td nowrap="nowrap" style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">54,167</td>
<td nowrap="nowrap" style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td colspan="2" style="text-align: left"> </td>
<td nowrap="nowrap" style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 1.7pt; text-align: left">Options cancelled by plan vote</td>
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right">-</td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right">-</td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td colspan="2" style="padding-bottom: 1.7pt; text-align: left"> </td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-bottom: 3.45pt; text-align: left">Remaining shares available for future grants</td>
<td style="padding-bottom: 3.45pt; text-align: left"> </td>
<td style="border-bottom: black 4.5pt double; text-align: left"> </td>
<td style="border-bottom: black 4.5pt double; text-align: right">42,275</td>
<td nowrap="nowrap" style="padding-bottom: 3.45pt; text-align: left"> </td>
<td style="padding-bottom: 3.45pt; text-align: left"> </td>
<td style="border-bottom: black 4.5pt double; text-align: left"> </td>
<td style="border-bottom: black 4.5pt double; text-align: right">9,542,776</td>
<td nowrap="nowrap" style="padding-bottom: 3.45pt; text-align: left"> </td>
<td style="padding-bottom: 3.45pt; text-align: left"> </td>
<td colspan="2" style="padding-bottom: 3.45pt; text-align: left"> </td>
<td nowrap="nowrap" style="padding-bottom: 3.45pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td colspan="9" style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="padding-bottom: 1.7pt; text-align: left; font-weight: bold"> </td>
<td colspan="3" style="border-bottom: black 1.5pt solid; text-align: center; font-weight: bold"><b>Not Pursuant to a Plan</b></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 58%; text-align: left">Total granted</td>
<td style="width: 1%; text-align: left"> </td>
<td style="width: 1%; text-align: left"> </td>
<td style="width: 11%; text-align: right">154,449</td>
<td nowrap="nowrap" style="width: 1%; text-align: left"> </td>
<td style="width: 1%; text-align: left"> </td>
<td style="width: 1%; text-align: left"> </td>
<td style="width: 11%; text-align: right">254,500</td>
<td nowrap="nowrap" style="width: 1%; text-align: left"> </td>
<td style="width: 1%; text-align: left"> </td>
<td style="width: 1%; text-align: left"> </td>
<td style="width: 11%; text-align: right">310,000</td>
<td nowrap="nowrap" style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; text-indent: 0pt; padding-left: -22pt">Less: Options cancelled</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">(67,849</td>
<td nowrap="nowrap" style="text-align: left">)</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">(54,167</td>
<td nowrap="nowrap" style="text-align: left">)</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">(138,333</td>
<td nowrap="nowrap" style="text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 1.7pt; text-align: left; text-indent: 22pt; padding-left: -33pt">Options exercised</td>
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right">(35,600</td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left">)</td>
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right">(13,000</td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left">)</td>
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right">(66,667</td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Shares outstanding, before restricted stock</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">51,000</td>
<td nowrap="nowrap" style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">187,333</td>
<td nowrap="nowrap" style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">105,000</td>
<td nowrap="nowrap" style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 1.7pt; text-align: left">Restricted stock issued, net of cancellations</td>
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right">31,125</td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right">256,891</td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right">28,484</td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 3.45pt; text-align: left">Outstanding shares at December 31, 2012</td>
<td style="padding-bottom: 3.45pt; text-align: left"> </td>
<td style="border-bottom: black 4.5pt double; text-align: left"> </td>
<td style="border-bottom: black 4.5pt double; text-align: right">82,125</td>
<td nowrap="nowrap" style="padding-bottom: 3.45pt; text-align: left"> </td>
<td style="padding-bottom: 3.45pt; text-align: left"> </td>
<td style="border-bottom: black 4.5pt double; text-align: left"> </td>
<td style="border-bottom: black 4.5pt double; text-align: right">444,224</td>
<td nowrap="nowrap" style="padding-bottom: 3.45pt; text-align: left"> </td>
<td style="padding-bottom: 3.45pt; text-align: left"> </td>
<td style="border-bottom: black 4.5pt double; text-align: left"> </td>
<td style="border-bottom: black 4.5pt double; text-align: right">133,484</td>
<td nowrap="nowrap" style="padding-bottom: 3.45pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"><b><i>Share-Based Compensation - Options</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt">For options issued and
outstanding during the years ended December 31, 2012, 2011 and 2010, the Company recorded additional paid-in capital and
non-cash compensation expense of $938,537, $836,866 and $164,810, respectively, each net of estimated forfeitures.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt">The fair value of each option
award is estimated on the date of grant using the Black-Scholes option pricing model that uses the assumptions noted in the following
table. Expected volatilities are based on historical volatility of the Common Stock using historical periods consistent with the
expected term of the options. The Company uses historical data, as well as subsequent events occurring prior to the issuance of
the consolidated financial statements, to estimate option exercise and employee termination within the valuation model. The expected
term of options granted under the Company’s stock plans, all of which qualify as “plain vanilla,” is based on
the average of the contractual term (generally 10 years) and the vesting period (generally 24 to 42 months) as permitted under
SEC Staff Accounting Bulletin Nos. 107 and 110. The risk-free rate is based on the yield of a U.S. Treasury security with a term
consistent with the option. Restricted stock grants are valued based on the closing market price for the Company’s Common
Stock on the grant date.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt">The assumptions used principally
for options granted to employees in the years ended December 31, 2012 and 2011 were as follows:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="padding-bottom: 1.7pt; text-align: left; font-weight: bold"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: left; font-weight: bold"><b>2012</b></td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left; font-weight: bold"> </td>
<td style="padding-bottom: 1.7pt; text-align: left; font-weight: bold"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: left; font-weight: bold"><b>2011</b></td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 62%; text-align: left">Risk-free interest rate</td>
<td style="width: 1%; text-align: left"> </td>
<td style="width: 1%; text-align: left"> </td>
<td style="width: 17%; text-align: right">0.92% - 2.05</td>
<td nowrap="nowrap" style="width: 1%; text-align: left">%</td>
<td style="width: 1%; text-align: left"> </td>
<td style="width: 1%; text-align: left"> </td>
<td style="width: 15%; text-align: right">1.80% - 3.47</td>
<td nowrap="nowrap" style="width: 1%; text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: left">Expected dividend yield</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">—</td>
<td nowrap="nowrap" style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">—</td>
<td nowrap="nowrap" style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-align: left">Expected term</td>
<td style="text-align: right"> </td>
<td colspan="2" style="text-align: right">6.5 years</td>
<td nowrap="nowrap" style="text-align: right"> </td>
<td style="text-align: right"> </td>
<td colspan="2" style="text-align: right">6.5 years</td>
<td nowrap="nowrap" style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: left">Forfeiture rate (excluding fully vested options)</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">15</td>
<td nowrap="nowrap" style="text-align: left">%</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">15</td>
<td nowrap="nowrap" style="text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-align: left">Expected volatility</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">131% - 142</td>
<td nowrap="nowrap" style="text-align: left">%</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">137% - 142</td>
<td nowrap="nowrap" style="text-align: left">%</td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt">A summary of option activity
under the Company’s stock plans and options granted to officers of the Company outside any plan as of December 31, 2012 and
changes during the year then ended is presented below:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td style="padding-bottom: 1.7pt">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"><b><u>Options</u></b><u>:</u></p></td>
<td style="padding-bottom: 1.7pt; text-align: left; font-weight: bold"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>  </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>Shares</b></p></td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: center; font-weight: bold"> </td>
<td style="padding-bottom: 1.7pt; text-align: center; font-weight: bold"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>  </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>Weighted-</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>Average</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>Exercise</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>Price</b></p></td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: center; font-weight: bold"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: center">
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>Weighted-</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>Average</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>Remaining</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>Contractual</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>Term  </b></p></td>
<td style="padding-bottom: 1.7pt; text-align: center; font-weight: bold"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center">
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>  </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>Aggregate</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>Intrinsic</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><b>Value</b></p></td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-align: left">Outstanding at January 1, 2012</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">339,511</td>
<td nowrap="nowrap" style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left">$</td>
<td style="text-align: right">16,80</td>
<td nowrap="nowrap" style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td colspan="2" style="text-align: left"> </td>
<td nowrap="nowrap" style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: left">Granted</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">70,000</td>
<td nowrap="nowrap" style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left">$</td>
<td style="text-align: right">16.60</td>
<td nowrap="nowrap" style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td colspan="2" style="text-align: left"> </td>
<td nowrap="nowrap" style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-align: left">Exercised</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">(23,767</td>
<td nowrap="nowrap" style="text-align: left">)</td>
<td style="text-align: left"> </td>
<td style="text-align: left">$</td>
<td style="text-align: right">9,40</td>
<td nowrap="nowrap" style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td colspan="2" style="text-align: left"> </td>
<td nowrap="nowrap" style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-bottom: 1.7pt; text-align: left">Forfeited or expired</td>
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right">(42,411</td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left">)</td>
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: left">$</td>
<td style="border-bottom: black 1.5pt solid; text-align: right">30,76</td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td colspan="2" style="padding-bottom: 1.7pt; text-align: left"> </td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 41%; padding-bottom: 3.45pt; text-align: left">Outstanding at December 31, 2012</td>
<td style="width: 1%; padding-bottom: 3.45pt; text-align: left"> </td>
<td style="width: 1%; border-bottom: black 4.5pt double; text-align: left"> </td>
<td style="width: 11%; border-bottom: black 4.5pt double; text-align: right">343,333</td>
<td nowrap="nowrap" style="width: 1%; padding-bottom: 3.45pt; text-align: left"> </td>
<td style="width: 1%; padding-bottom: 3.45pt; text-align: left"> </td>
<td style="width: 1%; border-bottom: black 4.5pt double; text-align: left">$</td>
<td style="width: 11%; border-bottom: black 4.5pt double; text-align: right">14,70</td>
<td nowrap="nowrap" style="width: 1%; padding-bottom: 3.45pt; text-align: left"> </td>
<td style="width: 17%; border-bottom: black 4.5pt double; text-align: center">6.11 years</td>
<td style="width: 1%; padding-bottom: 3.45pt; text-align: left"> </td>
<td style="width: 1%; border-bottom: black 4.5pt double; text-align: left">$</td>
<td style="width: 11%; border-bottom: black 4.5pt double; text-align: right">885,300</td>
<td nowrap="nowrap" style="width: 1%; padding-bottom: 3.45pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-bottom: 3.45pt; text-align: left">Exercisable at December 31, 2012</td>
<td style="padding-bottom: 3.45pt; text-align: left"> </td>
<td style="border-bottom: black 4.5pt double; text-align: left"> </td>
<td style="border-bottom: black 4.5pt double; text-align: right">224,133</td>
<td nowrap="nowrap" style="padding-bottom: 3.45pt; text-align: left"> </td>
<td style="padding-bottom: 3.45pt; text-align: left"> </td>
<td style="border-bottom: black 4.5pt double; text-align: left">$</td>
<td style="border-bottom: black 4.5pt double; text-align: right">10,60</td>
<td nowrap="nowrap" style="padding-bottom: 3.45pt; text-align: left"> </td>
<td style="border-bottom: black 4.5pt double; text-align: center">5.48 years</td>
<td style="padding-bottom: 3.45pt; text-align: left"> </td>
<td style="border-bottom: black 4.5pt double; text-align: left">$</td>
<td style="border-bottom: black 4.5pt double; text-align: right">885,300</td>
<td nowrap="nowrap" style="padding-bottom: 3.45pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt">The weighted-average grant-date
fair value of options granted during the year ended December 31, 2012 was $16.60 per share. As of December 31, 2012, there was approximately
$2,097,000 of total unrecognized compensation expense related to non-vested share-based option arrangements. With the exception
of the unrecognized share-based compensation related to certain restricted stock grants to officers and employees that contain
performance conditions related to United States Food and Drug Administration (FDA) approval for Symphony or the sale of the Company,
unrecognized compensation is expected to be recognized over the next 12 months.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 9pt"> During the nine
months ended September 30, 2013, the Company granted an aggregate of 64,088 restricted shares of Common Stock to certain officers,
employees, directors and consultants of the Company.  The grants were issued pursuant to the 2008 Plan.  The
grant date fair value of these restricted stock grants was approximately $313,000.  Share-based compensation expense
related to restricted stock recognized in the nine months ended September 30, 2013 and September 30, 2012 was approximately $355,000
and $200,000, respectively.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 9pt"> A summary of
the Company’s non-vested restricted stock activity as of and for the nine months ended September 30, 2013, is as follows:</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%; font: 10pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="border-bottom: black 1pt solid; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black"><b>Restricted Stock</b></font></td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid">
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Shares</b></p></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid">
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Weighted-</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Average</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Grant-Date</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Fair Value</b></p></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 76%; text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Non-vested at January 1, 2013</font></td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 9%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">316,044</font></td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">$</font></td>
<td style="width: 9%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">16.60</font></td>
<td style="width: 1%; line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 0.25in; text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Granted</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">64,088</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">4.88</font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-left: 0.25in; text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Vested</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">(33,042</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">)</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">18.38</font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 0.25in; text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Forfeited</font></td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">(24,500</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">)</font></td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">9.94</font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Non-vested at September 30, 2013</font></td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">157,373</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">14.40</font></td>
<td style="line-height: 115%"> </td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 9pt"> Among the 322,590
shares of non-vested restricted stock, the various vesting criteria include the following:</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><tr style="vertical-align: top">
<td style="width: 0"></td><td style="width: 45pt">·</td><td> 165,460 shares of restricted stock vest upon the FDA approval of Symphony or the sale of the Company or its assets;
and</td></tr></table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><tr style="vertical-align: top">
<td style="width: 0"></td><td style="width: 45pt">·</td><td> 157,130 shares of restricted stock vest over one to four years, at each of the anniversary dates of the grants.</td></tr></table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 9pt"> As of September
30, 2013, there was approximately $863,000 of total unrecognized compensation expense related to non-vested share-based restricted
stock arrangements granted pursuant to the Company’s equity compensation plans that vest over time in the foreseeable future.
As of September 30, 2013, the Company cannot estimate the timing of completion of performance vesting requirements required by
certain of these restricted stock grant arrangements.  Compensation expense related to these restricted share grants
will be recognized when the Company concludes that achievement of the performance vesting conditions is probable.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><b><i>Share-Based Compensation – Restricted Stock</i></b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 26pt">For restricted stock issued and outstanding
during the years ended December 31, 2012, 2011 and 2010, the Company incurred non-cash compensation expense of $574,024, $323,463
and $393,249, respectively, each net of estimated forfeitures.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 26pt">As of December 31, 2012, the Company had
outstanding restricted stock grants of 316,042 shares with a weighted-average grant-date value of $16.60. A summary of the status
of the Company’s non-vested restricted stock grants as of December 31, 2012, and changes during the year ended December 31,
2012 is presented below:</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: bottom">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif"><b><u>Non-vested Shares:</u></b></font></td>
<td style="padding-bottom: 0.9pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Shares</b></font></td>
<td nowrap="nowrap" style="padding-bottom: 0.9pt"> </td>
<td style="padding-bottom: 0.9pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid">
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Weighted-</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Average</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Grant-Date</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Fair Value</b></p></td>
<td nowrap="nowrap" style="padding-bottom: 0.9pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 72%; font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Non-vested shares at January 1, 2012</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 11%; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">181,960</font></td>
<td nowrap="nowrap" style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%; font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 11%; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">17.20</font></td>
<td nowrap="nowrap" style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Granted</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">131,416</font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">17.20</font></td>
<td nowrap="nowrap"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Grants made in prior periods, now becoming restricted</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">22,000</font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">9.20</font></td>
<td nowrap="nowrap"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Vested</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(14,334</font></td>
<td nowrap="nowrap" style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">21.20</font></td>
<td nowrap="nowrap"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Forfeited</font></td>
<td style="padding-bottom: 0.9pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(5,000</font></td>
<td nowrap="nowrap" style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="padding-bottom: 0.9pt"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">18.40</font></td>
<td nowrap="nowrap" style="padding-bottom: 0.9pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Non-vested shares at December 31, 2012</font></td>
<td style="padding-bottom: 1.85pt"> </td>
<td style="border-bottom: black 1.5pt double"> </td>
<td style="border-bottom: black 1.5pt double; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">316,042</font></td>
<td nowrap="nowrap" style="padding-bottom: 1.85pt"> </td>
<td style="padding-bottom: 1.85pt"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">16.60</font></td>
<td nowrap="nowrap" style="padding-bottom: 1.85pt"> </td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 26pt">Of the 316,042 shares of non-vested restricted
stock, vesting criteria are as follows:</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: top">
<td style="width: 87px; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Symbol">·</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">167,960 shares of restricted stock vest upon the FDA approval of Symphony or the sale of the Company;</font></td></tr>
<tr style="vertical-align: top">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"> </td></tr>
<tr style="vertical-align: top">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Symbol">·</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">22,000 shares of restricted stock vest upon the sale of the Company; and</font></td></tr>
</table>
<p style="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: top">
<td style="width: 87px; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Symbol">·</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">126,082 shares of restricted stock vest over 4 years, at each of the anniversary dates of the grants.</font></td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 20pt">As of December 31, 2012, there
was approximately $1,861,000 of total unrecognized compensation expense related to non-vested share-based restricted stock arrangements
granted under the Company’s equity compensation plans that vest over time in the foreseeable future. As of December 31,
2012, the Company cannot estimate the timing of completion of the performance vesting requirements required by certain of these
restricted stock grant arrangements. Compensation expense related to these restricted share grants will be recognized when the
Company concludes that achievement of the performance vesting conditions is probable.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 9pt"> At September
30, 2013, the Company had the following outstanding warrants:</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%; font: 10pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid">
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Number of</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Shares</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Exercisable</b></p></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black"><b>Exercise Price</b></font></td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black"><b>Date of Expiration</b></font></td></tr>
<tr style="vertical-align: bottom">
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black"><b>Outstanding warrants accounted for as derivative warrant liability:</b></font></td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 64%; text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Granted to debt holder</font></td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 10%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">400,000</font></td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; text-align: right; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">$</font></td>
<td style="width: 10%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">20.00</font></td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 10%; padding-right: 8.1pt; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">8/31/2017</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Granted to debt holder</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">100,000</font></td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">21.30</font></td>
<td style="line-height: 115%"> </td>
<td style="padding-right: 8.1pt; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">9/20/2017</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Granted to debt holder</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">50,000</font></td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">22.70</font></td>
<td style="line-height: 115%"> </td>
<td style="padding-right: 8.1pt; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">10/17/2017</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Granted to debt holder</font></td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">150,000</font></td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">21.10</font></td>
<td style="line-height: 115%"> </td>
<td style="padding-right: 8.1pt; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">11/6/2017</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-indent: 0.25in; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Total outstanding warrants accounted for as derivative warrant liability</font></td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">700,000</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Weighted average exercise price</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">20.61</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Weighted average time to expiration in years</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">3.98 years</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black"><b>Outstanding warrants accounted for as equity:</b></font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Granted to investors in private placement of preferred stock</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">3,228</font></td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">$</font></td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">10.00</font></td>
<td style="line-height: 115%"> </td>
<td style="padding-right: 8.1pt; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">9/30/2013</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Granted to investors in private placement of preferred stock</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">19,834</font></td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">15.00</font></td>
<td style="line-height: 115%"> </td>
<td style="padding-right: 8.1pt; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">10/28/2013</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Granted to investors in private placement of preferred stock</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">39,000</font></td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">7.50</font></td>
<td style="line-height: 115%"> </td>
<td style="padding-right: 8.1pt; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">2/28/2014</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Granted to vendor</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">6,000</font></td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">6.00</font></td>
<td style="line-height: 115%"> </td>
<td style="padding-right: 8.1pt; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">3/15/2014</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Granted to investors in private placement</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">40,000</font></td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">15.90</font></td>
<td style="line-height: 115%"> </td>
<td style="padding-right: 8.1pt; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">6/30/2014</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Granted to investors in private placement</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">76,800</font></td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">20.00</font></td>
<td style="line-height: 115%"> </td>
<td style="padding-right: 8.1pt; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">11/13/2014</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Granted to placement agent in private placement</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">25,695</font></td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">15.00</font></td>
<td style="line-height: 115%"> </td>
<td style="padding-right: 8.1pt; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">11/13/2014</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Granted to investors in private placement</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">6,300</font></td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">20.00</font></td>
<td style="line-height: 115%"> </td>
<td style="padding-right: 8.1pt; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">12/3/2014</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Granted to investors in private placement</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">34,146</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">22.50</font></td>
<td style="line-height: 115%"> </td>
<td style="padding-right: 8.1pt; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">2/9/2015</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Granted to placement agents in private placement</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">2,853</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">22.50</font></td>
<td style="line-height: 115%"> </td>
<td style="padding-right: 8.1pt; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">2/9/2015</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Granted to investor in private placement</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">638</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">22.50</font></td>
<td style="line-height: 115%"> </td>
<td style="padding-right: 8.1pt; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">3/18/2015</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Granted to investors in private placement</font></td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">95,960</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">30.00</font></td>
<td style="line-height: 115%"> </td>
<td style="padding-right: 8.1pt; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">12/7/2014</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 9pt; text-indent: 0.25in; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Total outstanding warrants accounted for as equity</font></td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">350,454</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-left: 9pt; text-indent: -9pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Weighted average exercise price</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">20.17</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 9pt; text-indent: -9pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Weighted average time to expiration in years</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">0.96 years</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 9pt; text-indent: -9pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black"><b>Totals for all warrants outstanding:</b></font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-left: 9pt; text-indent: 0.25in; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Total</font></td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">1,050,454</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 9pt; text-indent: -9pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Weighted average exercise price</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">20.46</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-left: 9pt; text-indent: -9pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Weighted average time to expiration in years</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">2.97 years</font></td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 9pt"> A summary of
warrant activity for the nine months ended September 30, 2013 is as follows:</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%; font: 10pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="border-bottom: black 1pt solid">
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><b> </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><b> </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><b> </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Warrants</b></p></td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid">
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><b>  </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><b> </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><b> </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 8.8pt"><b>Shares</b></p></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid">
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Weighted-</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Average</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Exercise</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Price</b></p></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 76%; text-align: justify; line-height: 115%; text-indent: 12pt"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Outstanding at January 1, 2013</font></td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 9%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">1,254,004</font></td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">$</font></td>
<td style="width: 9%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">20.08</font></td>
<td style="width: 1%; line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 27pt; text-align: justify; line-height: 115%; text-indent: 12pt"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Granted</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">9,175</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">12.60</font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-left: 27pt; text-align: justify; line-height: 115%; text-indent: 12pt"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Exercised</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">—</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">—</font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 27pt; text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Forfeited or expired</font></td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">(212,725</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">)</font></td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">17.69</font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-align: justify; line-height: 115%; text-indent: 12pt"><font style="font: 10pt Times New Roman, Times, Serif; color: black">Outstanding at September 30, 2013</font></td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">1,050,454</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif; color: black">20.46</font></td>
<td style="line-height: 115%"> </td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">  </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Exercise of Common Stock Warrants</i></b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 9pt"> During the nine
months ended September 30, 2013, the Company issued no shares of its Common Stock upon the exercise of warrants.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 26pt">The Company uses valuation methods and
assumptions that consider among other factors the fair value of the underlying stock, risk-free interest rate, volatility, expected
life and dividend rates in estimating fair value for the warrants considered to be derivative instruments. The following assumptions
were utilized by the Company:</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: bottom">
<td style="padding-bottom: 0.9pt"> </td>
<td style="padding-bottom: 0.9pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>2012</b></font></td>
<td nowrap="nowrap" style="padding-bottom: 0.9pt"> </td>
<td style="padding-bottom: 0.9pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>2011</b></font></td>
<td nowrap="nowrap" style="padding-bottom: 0.9pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 72%; font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Risk-free interest rate</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 11%; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">0.70% - 2.23</font></td>
<td nowrap="nowrap" style="width: 1%; font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 11%; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">3.36% - 3.75</font></td>
<td nowrap="nowrap" style="width: 1%; font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Expected dividend yield</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td>
<td nowrap="nowrap"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Expected term (contractual term)</font></td>
<td> </td>
<td colspan="2" style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">0.06 - 5 years</font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td colspan="2" style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">2 years</font></td>
<td nowrap="nowrap"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Forfeiture rate</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td>
<td nowrap="nowrap"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Expected volatility</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">123% - 144</font></td>
<td nowrap="nowrap" style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">142</font></td>
<td nowrap="nowrap" style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 26pt">Expected volatilities are based on historical
volatility of the Common Stock using historical periods consistent with the expected term of the warrant. The risk-free rate is
based on the yield of a U.S. Treasury security with a term consistent with the warrant.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 26pt">In the years ended December 31, 2012 and
2011, the Company issued warrants with a fair value of approximately $8,655,000 and $11,191,000, respectively. Included in this
warrant fair value are warrants with a fair value of approximately $4,840,000 and $41,000 recorded as a debit to deferred financing
costs and credit to additional paid-in capital for stock issuance costs related to the Montaur Credit Facility (see Note 6) and
2011 financings to deferred financing costs (see Note 9), respectively. The warrants issued in the years ended December 31, 2012
and 2011 generally have a term of 2 to 5 years, a non-redeemable feature, and a cashless exercise provision. Certain of these warrants
have a standard weighted average anti-dilution protection and piggy back registration rights.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 26pt">At December 31, 2012, the Company had
the following outstanding warrants:</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Number of</b></font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td colspan="2"> </td>
<td nowrap="nowrap"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Shares</b></font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td colspan="2" style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Exercise</b></font></td>
<td nowrap="nowrap"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Date of</b></font></td></tr>
<tr style="vertical-align: bottom">
<td style="padding-bottom: 0.9pt"> </td>
<td style="padding-bottom: 0.9pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Exercisable</b></font></td>
<td nowrap="nowrap" style="padding-bottom: 0.9pt"> </td>
<td style="padding-bottom: 0.9pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Price</b></font></td>
<td nowrap="nowrap" style="padding-bottom: 0.9pt"> </td>
<td style="border-bottom: black 1pt solid; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Expiration</b></font></td></tr>
<tr style="vertical-align: bottom">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif"><b>Outstanding warrants in derivative warrant liability:</b></font></td>
<td> </td>
<td colspan="2"> </td>
<td nowrap="nowrap"> </td>
<td> </td>
<td colspan="2"> </td>
<td nowrap="nowrap"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 50%; font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Granted to financial investment advisor</font></td>
<td style="width: 5%"> </td>
<td style="width: 1%"> </td>
<td style="width: 10%; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">750</font></td>
<td nowrap="nowrap" style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%; font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 10%; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">12.60</font></td>
<td nowrap="nowrap" style="width: 1%"> </td>
<td style="width: 20%; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">2/11/2013</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Granted to investors in private placement</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">15,499</font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">5.00</font></td>
<td nowrap="nowrap"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">2/11/2013</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Granted to investors in private placement</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">19,767</font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">14.40</font></td>
<td nowrap="nowrap"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">3/24/2013</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Granted to debtor as a Commitment warrant</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">400,000</font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">20.00</font></td>
<td nowrap="nowrap"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">8/31/2017</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Granted to debtor as a Draw warrant</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">100,000</font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">21.30</font></td>
<td nowrap="nowrap"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">9/20/2017</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Granted to debtor as a Draw warrant</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">50,000</font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">22.70</font></td>
<td nowrap="nowrap"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">10/17/2017</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Granted to debtor as a Draw warrant</font></td>
<td style="padding-bottom: 0.9pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">150,000</font></td>
<td nowrap="nowrap" style="padding-bottom: 0.9pt"> </td>
<td style="padding-bottom: 0.9pt"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">21.10</font></td>
<td nowrap="nowrap" style="padding-bottom: 0.9pt"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">11/6/2017</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-indent: -13pt"><font style="font: 10pt Times New Roman, Times, Serif">Total outstanding warrants accounted for as derivative warrant liability</font></td>
<td style="padding-bottom: 1.85pt"> </td>
<td style="border-bottom: black 1.5pt double"> </td>
<td style="border-bottom: black 1.5pt double; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">736,016</font></td>
<td nowrap="nowrap" style="padding-bottom: 1.85pt"> </td>
<td style="padding-bottom: 1.85pt"> </td>
<td> </td>
<td style="padding-bottom: 1.85pt"> </td>
<td nowrap="nowrap" style="padding-bottom: 1.85pt"> </td>
<td style="padding-bottom: 1.85pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-indent: 26pt"><font style="font: 10pt Times New Roman, Times, Serif">Weighted average exercise price</font></td>
<td style="padding-bottom: 1.85pt"> </td>
<td> </td>
<td style="padding-bottom: 1.85pt"> </td>
<td nowrap="nowrap" style="padding-bottom: 1.85pt"> </td>
<td style="padding-bottom: 1.85pt"> </td>
<td style="border-bottom: black 1.5pt double; font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 1.5pt double; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">20.10</font></td>
<td nowrap="nowrap" style="padding-bottom: 1.85pt"> </td>
<td style="padding-bottom: 1.85pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-indent: 26pt"><font style="font: 10pt Times New Roman, Times, Serif">Weighted average time to expiration in years</font></td>
<td style="padding-bottom: 1.85pt"> </td>
<td style="padding-bottom: 1.85pt"> </td>
<td style="padding-bottom: 1.85pt"> </td>
<td nowrap="nowrap" style="padding-bottom: 1.85pt"> </td>
<td style="padding-bottom: 1.85pt"> </td>
<td style="padding-bottom: 1.85pt"> </td>
<td style="padding-bottom: 1.85pt"> </td>
<td nowrap="nowrap" style="padding-bottom: 1.85pt"> </td>
<td style="border-bottom: black 1.5pt double; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">4.50 years</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif"><b>Outstanding warrants in equity:</b></font></td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap"> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Granted to investors in private placement of preferred stock</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">3,225</font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">10.00</font></td>
<td nowrap="nowrap"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">9/30/2013</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Granted to investors in private placement of preferred stock</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">19,833</font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">15.00</font></td>
<td nowrap="nowrap"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">10/28/2013</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Granted to investors in private placement of preferred stock</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">39,000</font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">7.50</font></td>
<td nowrap="nowrap"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">2/28/2014</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Granted to vendor</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">6,000</font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">6.00</font></td>
<td nowrap="nowrap"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">3/15/2014</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Granted to investors in private placement</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">40,000</font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">15.90</font></td>
<td nowrap="nowrap"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">6/30/2014</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Granted to investors in private placement</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">76,800</font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">20.00</font></td>
<td nowrap="nowrap"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">11/13/2014</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Granted to placement agent in private placement</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">25,690</font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">15.00</font></td>
<td nowrap="nowrap"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">11/13/2014</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Granted to investors in private placement</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">6,300</font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">20.00</font></td>
<td nowrap="nowrap"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">12/3/2014</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Granted to investors in private placement</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">34,133</font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">22.50</font></td>
<td nowrap="nowrap"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">2/9/2015</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Granted to placement agents in private placement</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">2,850</font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">22.50</font></td>
<td nowrap="nowrap"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">2/9/2015</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Granted to investor in private placement</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">637</font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">22.50</font></td>
<td nowrap="nowrap"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">3/18/2015</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Granted to financial investment advisor</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">10,000</font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">15.00</font></td>
<td nowrap="nowrap"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">2/10/2013</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Granted to financial investment advisor</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1,037</font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">20.00</font></td>
<td nowrap="nowrap"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">3/3/2013</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Granted to investors in private placement</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">24,575</font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">15.00</font></td>
<td nowrap="nowrap"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">1/4/2013</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Granted to investors in private placement</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">24,575</font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">25.00</font></td>
<td nowrap="nowrap"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">1/4/2013</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Granted to placement agent in private placement</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1,812</font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">15.00</font></td>
<td nowrap="nowrap"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">1/4/2013</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Granted to placement agent in private placement</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1,812</font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">25.00</font></td>
<td nowrap="nowrap"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">1/4/2013</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Granted to investors in private placement</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">25,500</font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">15.00</font></td>
<td nowrap="nowrap"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">2/3/2013</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Granted to investors in private placement</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">28,000</font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">25.00</font></td>
<td nowrap="nowrap"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">2/3/2013</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Granted to placement agent in private placement</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">125</font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">15.00</font></td>
<td nowrap="nowrap"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">2/3/2013</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Granted to placement agent in private placement</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">125</font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">25.00</font></td>
<td nowrap="nowrap"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">2/3/2013</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Granted to investors in private placement</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">25,000</font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">15.00</font></td>
<td nowrap="nowrap"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">2/8/2013</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Granted to investors in private placement</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">25,000</font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">25.00</font></td>
<td nowrap="nowrap"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">2/8/2013</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Granted to investors in private placement</font></td>
<td style="padding-bottom: 0.9pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">95,958</font></td>
<td nowrap="nowrap" style="padding-bottom: 0.9pt"> </td>
<td style="padding-bottom: 0.9pt"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">30.00</font></td>
<td nowrap="nowrap" style="padding-bottom: 0.9pt"> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">12/7/2014</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-indent: 13pt"><font style="font: 10pt Times New Roman, Times, Serif">Total outstanding warrants accounted for as equity</font></td>
<td style="padding-bottom: 1.85pt"> </td>
<td style="border-bottom: black 1.5pt double"> </td>
<td style="border-bottom: black 1.5pt double; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">517,988</font></td>
<td nowrap="nowrap" style="padding-bottom: 1.85pt"> </td>
<td style="padding-bottom: 1.85pt"> </td>
<td> </td>
<td style="padding-bottom: 1.85pt"> </td>
<td nowrap="nowrap" style="padding-bottom: 1.85pt"> </td>
<td style="padding-bottom: 1.85pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Weighted average exercise price</font></td>
<td style="padding-bottom: 1.85pt"> </td>
<td> </td>
<td style="padding-bottom: 1.85pt"> </td>
<td nowrap="nowrap" style="padding-bottom: 1.85pt"> </td>
<td style="padding-bottom: 1.85pt"> </td>
<td style="border-bottom: black 1.5pt double; font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 1.5pt double; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">20.00</font></td>
<td nowrap="nowrap" style="padding-bottom: 1.85pt"> </td>
<td style="padding-bottom: 1.85pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Weighted average time to expiration in years</font></td>
<td style="padding-bottom: 1.85pt"> </td>
<td style="padding-bottom: 1.85pt"> </td>
<td style="padding-bottom: 1.85pt"> </td>
<td nowrap="nowrap" style="padding-bottom: 1.85pt"> </td>
<td style="padding-bottom: 1.85pt"> </td>
<td style="padding-bottom: 1.85pt"> </td>
<td style="padding-bottom: 1.85pt"> </td>
<td nowrap="nowrap" style="padding-bottom: 1.85pt"> </td>
<td style="border-bottom: black 1.5pt double; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">1.18 years</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-indent: -9pt"><font style="font: 10pt Times New Roman, Times, Serif"><b>Totals for all warrants outstanding:</b></font></td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap"> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-indent: 13pt"><font style="font: 10pt Times New Roman, Times, Serif">Total</font></td>
<td style="padding-bottom: 1.85pt"> </td>
<td style="border-bottom: black 1.5pt double"> </td>
<td style="border-bottom: black 1.5pt double; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1,254,004</font></td>
<td nowrap="nowrap" style="padding-bottom: 1.85pt"> </td>
<td style="padding-bottom: 1.85pt"> </td>
<td> </td>
<td style="padding-bottom: 1.85pt"> </td>
<td nowrap="nowrap" style="padding-bottom: 1.85pt"> </td>
<td style="padding-bottom: 1.85pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-indent: 13pt"><font style="font: 10pt Times New Roman, Times, Serif">Weighted average exercise price</font></td>
<td style="padding-bottom: 1.85pt"> </td>
<td> </td>
<td style="padding-bottom: 1.85pt"> </td>
<td nowrap="nowrap" style="padding-bottom: 1.85pt"> </td>
<td style="padding-bottom: 1.85pt"> </td>
<td style="border-bottom: black 1.5pt double; font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 1.5pt double; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">20.10</font></td>
<td nowrap="nowrap" style="padding-bottom: 1.85pt"> </td>
<td style="padding-bottom: 1.85pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-indent: 13pt"><font style="font: 10pt Times New Roman, Times, Serif">Weighted average time to expiration in years</font></td>
<td style="padding-bottom: 1.85pt"> </td>
<td style="padding-bottom: 1.85pt"> </td>
<td style="padding-bottom: 1.85pt"> </td>
<td nowrap="nowrap" style="padding-bottom: 1.85pt"> </td>
<td style="padding-bottom: 1.85pt"> </td>
<td style="padding-bottom: 1.85pt"> </td>
<td style="padding-bottom: 1.85pt"> </td>
<td nowrap="nowrap" style="padding-bottom: 1.85pt"> </td>
<td style="border-bottom: black 1.5pt double; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">3.13 years</font></td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 26pt">A summary of warrant activity in the year
ended December 31, 2012 is as follows:</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: bottom">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif"><b><u>Warrants:</u></b></font></td>
<td style="padding-bottom: 0.9pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Shares</b></font></td>
<td nowrap="nowrap" style="padding-bottom: 0.9pt"> </td>
<td style="padding-bottom: 0.9pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid">
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Weighted-</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Average</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Exercise</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Price</b></p></td>
<td nowrap="nowrap" style="padding-bottom: 0.9pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 72%; font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Outstanding at January 1, 2012</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 11%; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">752,753</font></td>
<td nowrap="nowrap" style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%; font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 11%; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">19.20</font></td>
<td nowrap="nowrap" style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Granted</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">702,034</font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">14.40</font></td>
<td nowrap="nowrap"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Exercised</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(16,546</font></td>
<td nowrap="nowrap" style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">12.80</font></td>
<td nowrap="nowrap"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Forfeited or expired</font></td>
<td style="padding-bottom: 0.9pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(184,237</font></td>
<td nowrap="nowrap" style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="padding-bottom: 0.9pt"> </td>
<td style="border-bottom: black 1pt solid; font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 1pt solid; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">19.00</font></td>
<td nowrap="nowrap" style="padding-bottom: 0.9pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Outstanding at December 31, 2012</font></td>
<td style="padding-bottom: 1.85pt"> </td>
<td style="border-bottom: black 1.5pt double"> </td>
<td style="border-bottom: black 1.5pt double; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1,254,004</font></td>
<td nowrap="nowrap" style="padding-bottom: 1.85pt"> </td>
<td style="padding-bottom: 1.85pt"> </td>
<td style="border-bottom: black 1.5pt double; font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 1.5pt double; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">20.10</font></td>
<td nowrap="nowrap" style="padding-bottom: 1.85pt"> </td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><b><i>Exercise of Common Stock Warrants</i></b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 26pt">During 2012, warrants to purchase 16,546
shares of Common Stock were voluntarily exercised, resulting in cash proceeds to the Company of approximately $212,000.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 26pt"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 26pt">During 2011, warrants to purchase 141,947
shares of Common Stock were voluntarily exercised through cashless exercises provisions, resulting in the issuance of 74,425 shares
of Common Stock.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 26pt"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 26pt">During 2011, warrants to purchase 661,530
shares of Common Stock were voluntarily exercised, resulting in cash proceeds to the Company of approximately $6,628,000. No such
warrant exercises in exchange for cash occurred in 2010. Also during 2011, the Company encouraged certain holders of its warrants
to exercise their warrants by reducing the exercise prices provided they elected to simultaneously exercise for cash proceeds.
Of the 661,530 warrant exercises, warrants to purchase an aggregate of 454,983 shares of Common Stock were exercised under this
arrangement during the year ended December 31, 2011 and cash proceeds of $4,471,631 from these transactions were received. As a
result of the reductions in exercise price, the Company recorded $4,559,761 in deemed dividends for the year ended December 31,
2011 in the Consolidated Statement of Operations.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 9pt"> In 2009, the
Company entered into a License Agreement with Handok Pharmaceuticals Co., Ltd. (“Handok”) pursuant to which the Company
granted Handok a license to develop, use, market, sell and import Symphony for continuous glucose monitoring for use by medical
facilities and/or individual consumers in South Korea (the “Handok License”). The Handok License has a minimum term
of 10 years from the date of the first commercial sale of Symphony in South Korea.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 9pt"> The Company
received a licensing fee of approximately $500,000 upon execution of the Handok License and the right to receive future milestone
payments and royalties. The Company recognizes these upfront, nonrefundable payments as revenue on a straight-line basis over the
contractual or estimated performance period. During the three months ended September 30, 2013 and 2012, the Company recorded approximately
$23,000 and $31,000, respectively, of nonrefundable license revenue.  During the nine months ended September 30, 2013
and 2012, the Company recorded approximately $68,000 and $93,000, respectively, of nonrefundable license revenue.  As
of September 30, 2013, approximately $90,000 of deferred revenue remains unrecognized, which will be recognized over the next 12
months and is shown as Deferred Revenue From Licensing Arrangements among current liabilities on the Consolidated Balance Sheet.  Approximately
$23,000 of the remaining deferred revenue will be recognized over the period subsequent to the next 12 months and is shown as Deferred
Revenue From Licensing Arrangements among non-current liabilities.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt"><i>Ferndale License of Prelude
</i>— On May 27, 2009, the Company entered into a License Agreement with Ferndale pursuant to which the Company granted Ferndale
a license in North America and the United Kingdom to develop, assemble, use, market, sell and export Prelude for skin preparation
prior to the application of a topical analgesic or anesthetic cream for local dermal anesthesia or analgesia prior to a needle
insertion or IV procedure (the “Ferndale License”). The Ferndale License has a minimum term of 10 years from the date
of the first commercial sale of Prelude product components in North America or the United Kingdom.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt">The Company received
a licensing fee of $750,000 upon execution of the Ferndale License. In addition, the Company will receive a payment of
$750,000 within ninety (90) days after receipt of the FDA’s 510(k) medical device clearance of Prelude. Ferndale will
pay the Company an escalating royalty on net sales of Prelude product components.  The Company will also receive
milestone payments based on Ferndale’s achievement of certain net sales targets of the product components, as well as
guaranteed minimum annual royalties. The Company recognizes the upfront, nonrefundable payments as revenue on a straight-line
basis over the contractual or estimated performance period.  Accordingly, the Company determined that approximately
$241,000 and $105,000 of the non-refundable license revenue was recognizable in the years ended December 31, 2011 and 2010,
respectively.  As of December 31, 2011, the Company had recognized the entire $750,000 as license revenue.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt"><i>Other Revenue
— </i>The Company has retained contract engineering services in connection with product development pursuant to the
Ferndale License and the Company is reimbursed by Ferndale for the cost of those product development engineering services.
Other Revenue of approximately $145,000 and $203,000 relates to product development costs incurred during the year
ended December 31, 2011 and 2010, respectively, and reimbursed by Ferndale. The related expenses billed to the Company are
included in Research and Development expenses on the Statements of Operations. There was no markup on those expenses.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt"><i>Handok License of Symphony
</i>— On June 15, 2009, the Company entered into a License Agreement with Handok pursuant to which the Company granted Handok
a license to develop, use, market, sell and import Symphony for continuous glucose monitoring for use by medical facilities and/or
individual consumers in South Korea (the “Handok License”). The Handok License has a minimum term of 10 years from
the date of the first commercial sale of Symphony in South Korea.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt">The Company received a licensing
fee of approximately $500,000 upon execution of the Handok License. In addition, the Company will receive milestone payments upon
receipt of the FDA’s clearance of Symphony and upon the first commercial sale of Symphony in South Korea. Handok will also
pay the Company a royalty on net sales of Symphony. The Company also will receive milestone payments based on Handok’s achievement
of certain other targets.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt">The Company recognizes the
upfront, nonrefundable payments as revenue on a straight-line basis over the contractual or estimated performance period.  Accordingly,
the Company determined that approximately $5,000, $61,000 and $121,000 of the non-refundable license revenue was recognizable in
the years ended December 31, 2012, 2011 and 2010, respectively. Approximately $90,000 is recognizable over the next 12 months and
is shown as current deferred revenue. The remaining $90,000 is recognizable as revenue beyond the 12 month period and is classified
as non-current.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 9pt"> On August 31,
2012, the Company and Montaur entered into a Loan Agreement (the “Loan Agreement”) pursuant to which Montaur made a
non-revolving draw credit facility (the “Credit Facility”) of up to $20,000,000 available to the Company, a substantial
portion of which is subject to the successful achievement of certain clinical and regulatory milestones set forth in the Loan Agreement,
with an initial available principal amount of $5,000,000 (the “Maximum Draw Amount”).  The Company issued
to Montaur a Promissory Note dated August 31, 2012 (the “Note”), with a maturity date of five years from the date of
closing (the “Maturity Date”).  The Company has used the proceeds from the Credit Facility to fund operations.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 9pt"> The principal
balance of each draw will bear interest from the applicable draw date at a rate of 10% per annum, compounded monthly.  The
Company is required to make interest payments on the principal amount due in connection with each draw on the first business day
of each month until the Maturity Date.  The Company is also required to make a mandatory prepayment on each interest
payment date of an amount equal to one-third of its total revenue for the then prior fiscal quarter, up to the maximum amount outstanding
under the Note at that time.  The Company is not, however, required to make such interest payment or mandatory prepayment
if doing so would reduce the Company’s cash and cash equivalents to less than $5,000,000.  Any amounts not previously
paid in full will be due and payable on the Maturity Date.  The Company has the right to permanently prepay any draw,
in whole or in part, prior to the Maturity Date.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 9pt"> The Company’s
subsidiary, Sontra Medical, Inc. (“Sontra”), agreed to guarantee the obligations of the Company under the Note pursuant
to a guaranty agreement entered into on August 31, 2012 (the “Guaranty”).  Additionally, the Note is secured
by the Pledged Revenue (as defined in the Loan Agreement) of the Company and the Company’s subsidiaries pursuant to a Security
Agreement dated as of August 31, 2012 by and among the Company, Sontra and Montaur.  Upon the earlier of the Maturity
Date of the Note or an event of default, as defined in the Loan Agreement, the Note shall be secured by substantially all of the
assets of the Company and any of its subsidiaries, which security interest shall not be effective until such event of default or
maturity, pursuant to a Default Security Agreement dated August 31, 2012 by and among the Company, Sontra and Montaur.  The
Company also has agreed to pay all costs associated with registering the shares underlying the Warrants (should it choose to register
such shares) and to indemnify Montaur from liability resulting from the registration of such shares (subject to certain standard
exceptions) in accordance with a Registration Indemnity Agreement between the Company and Montaur.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 9pt"> Pursuant to
the Loan Agreement, the Company issued Montaur a warrant to purchase 400,000 shares of its Common Stock, with a term of five years
and an exercise price of $20.00 per share (the “Commitment Warrant”).  The fair value of the warrant was
determined to be approximately $4,840,000 and was recorded as a deferred financing cost that will be amortized to interest expense
over the term of the Note.  Of this cost, $968,004 is reflected in Current Assets, representing the portion which will
be amortized over the next twelve months. Amortization of the deferred financing cost for the three and nine months ended September
30, 2013 was $242,000 and $726,000, respectively, and is included in interest expense.  In addition, for each $1,000,000
of funds borrowed pursuant to the Credit Facility, the Company will issue Montaur a warrant to purchase 100,000 shares of Common
Stock, with a term of five years and an exercise price equal to 150% of the market price of the Common Stock at the time of the
draw, but in no event less than $20.00 or more than $40.00 per share (together with the Commitment Warrant, the “Warrants”).  All
of the Warrants are immediately exercisable and will have a term of five years from the issue date. The exercise price of the Warrants
is subject to adjustment for stock splits, combinations or similar events.  An exercise under the Warrants may not result
in the holder beneficially owning more than 4.99% or 9.99%, as applicable, of all of the Common Stock outstanding at the time;
provided, however, that a holder may waive the 4.99% ownership limitation upon sixty-one (61) days’ advance written
notice to the Company.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 9pt"> On September
14, 2012, the Company submitted a draw request to Montaur in the amount of $3,000,000 in the form required by the Loan Agreement
(the “September Request”).  The Company ultimately received the $3,000,000 in the following increments: $1,000,000
on September 20, 2012, $500,000 on October 17, 2012, and $1,500,000 on November 6, 2012.  These draws were recorded on
the Consolidated Balance Sheet under note payable, net of the initial $3,000,000 in discounts recorded related to the warrants
issued.  In accordance with the Loan Agreement and as a result of funding received from Montaur, the Company issued to
Montaur separate warrants concurrent with the three draws above to purchase 100,000, 50,000 and 150,000 shares of Common Stock,
each with a term of five years, and having exercise prices of $21.30, $22.70 and $21.10 per share, respectively.  The
fair value of the warrants issued to purchase 300,000 shares of Common Stock was determined to be approximately $3,455,000, of
which $3,000,000 was treated as a debt discount and was to be accreted to interest expense over the term of the Note, and the balance
of approximately $455,000 was charged to interest expense in 2012.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 9pt"> On March 1,
2013, the Company elected to prepay all outstanding draws under the Credit Facility totaling $3,113,366, which includes interest
accrued and unpaid to that date of $113,366.  After such date, no principal amount is outstanding under the Credit Facility.  Concurrent
with this prepayment, the Company recorded non-cash interest expense of approximately $2,879,166 in March 2013 relating to the
unamortized debt discount recorded at the original draws under the balance repaid.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 9pt"> In August 2013,
a shareholder derivative action was filed in the Court of Common Pleas of Philadelphia County naming as defendant the Company,
its directors and certain of its officers.  The complaint seeks unspecified amount of damages and principally alleges breaches
of fiduciary duty and gross mismanagement related to the Loan Agreement and the Company’s prepayment of the outstanding balance
under the Montaur Promissory Note.  Based on a preliminary review and analysis of the complaints, the Company believes that
this lawsuit is without merit and intends to defend it vigorously. The Company is not presently able to estimate the potential
losses, if any, related to this lawsuit.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt">Harry G. Mitchell, the former
Chief Operating Officer of the Company, resigned from that position in June 2011.  On August 25, 2011, Mr. Mitchell filed
a complaint in the Norfolk County Superior Court in Massachusetts against the Company and its Chief Executive Officer, Patrick
T. Mooney, claiming, among other things, that he resigned for good reason (as defined under his employment agreement) and was therefore
entitled to certain benefits and also to certain payments under state wage payment statutes.  Mr. Mitchell sought compensatory
damages, an award of attorneys’ fees and costs and other relief.  The Company responded to the complaint by serving
a partial motion to dismiss on September 28, 2011.  The Company had accrued approximately $400,000 in settlement liability
as of September 30, 2011 with respect to this matter, reflecting the Company’s best estimate then of probable loss exposure.<font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt">On December 20,
2011, the Company and Dr. Mooney entered into a Settlement and Release Agreement (the “Settlement Agreement”) with
Mr. Mitchell in order to allow the Company’s senior management team to focus its full attention on product development
and business operations.  In accordance with the Settlement Agreement, the Company agreed to (i) pay Mr. Mitchell
a settlement payment in the gross amount of $125,000, to be paid in installments over a three month period, (ii) pay
Mr. Mitchell’s full monthly COBRA premium for six months, and (iii) fully vest 100,000 shares of restricted Common
Stock (the “Shares”) held by Mr. Mitchell.  The Shares were not fully vested until January 2012 when
the Company received confirmation of Mr. Mitchell’s dismissal of his lawsuit, thereby leaving an outstanding
settlement accrued liability of $369,840 at December 31, 2011, which includes $290,000 representing the fair value of the
Common Stock to be issued, in the Company’s consolidated balance sheet as of December 31, 2011. This liability fully
satisfied in January 2012 for Common Stock with a fair value of $208,000 resulting in a reduction to share-based compensation
of $82,000 in 2012.</p>
<p style="font: 11pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 9pt"><font style="font-size: 10pt"> We
are a medical device company with expertise in advanced skin permeation technology.  We are developing our Symphony</font><font style="font-size: 7pt">®</font><font style="font-size: 10pt">
CGM System (“Symphony”) as a non-invasive, wireless continuous glucose monitoring (“CGM”) system for use
in hospital critical care units.  The Prelude</font><font style="font-size: 7pt">®</font><font style="font-size: 10pt"><b> </b>SkinPrep
System (“Prelude”), a component of our Symphony CGM System, allows for enhanced skin permeation that will enable extraction
of analytes such as glucose.  Prelude’s platform skin preparation technology also allows for needle-free, transdermal
drug delivery.</font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 9pt"> The accompanying
unaudited consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Sontra Medical,
Inc., a Delaware corporation. All significant intercompany balances and transactions have been eliminated in consolidation.  These
financial statements have been prepared in conformity with generally accepted accounting principles (“GAAP”) in the
United States consistent with those applied in, and should be read in conjunction with, the Company’s audited consolidated
financial statements and related footnotes for the year ended December 31, 2012 included in the Company’s Annual Report on
Form 10-K as filed with the United States Securities and Exchange Commission (“SEC”) on March 18, 2013.  These
financial statements reflect all adjustments, consisting only of normal recurring adjustments, which are, in the opinion of management,
necessary for a fair presentation of the Company’s financial position as of September 30, 2013 and its results of operations
and cash flows for the interim periods presented and are not necessarily indicative of results for subsequent interim periods or
for the full year.  These interim financial statements do not include all of the information and footnotes required by
GAAP for complete financial statements and allowed by the relevant SEC rules and regulations; however, the Company believes that
its disclosures are adequate to ensure that the information presented is not misleading. Certain amounts in prior periods have
been reclassified to conform to current presentation.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 9pt"> On June 7, 2013,
the Company effected a 1-for-10 reverse stock split of its common stock. All share and per share information has been retroactively
restated to reflect this reverse stock split.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i><u>Liquidity and Management’s
Plans</u></i></b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 9pt"> The accompanying
consolidated financial statements have been prepared on a basis assuming that the Company is a going concern, which contemplates
the realization of assets and the satisfaction of liabilities in the normal course of business.  As of September 30,
2013, the Company had cash of approximately $6,068,000, working capital of approximately $3,603,000, and an accumulated deficit
of approximately $109,469,000.  The Company continues to incur recurring losses from operations.  The Company
will require additional capital to fund our product development, research, manufacturing and clinical programs in accordance with
our current planned operations.  Management intends to pursue additional financing to fund these operations and the Company
has funded its operations in the past primarily through debt and equity issuances.  Management believes that it will
be successful in meeting the milestones required under their current financing arrangement, securing collaborative arrangements
with strategic partners, and/or raising additional capital.  No assurances can be given that additional capital will
be available on terms acceptable to the Company. The consolidated financial statements do not include any adjustments that might
result from the outcome of these uncertainties.</p>
114082
408
515
1768
2124
208000
-82000
290000
4840000
4840000
1000000
3000000
160000
455000
37065
6667
19739
6667
3333
145152
202592
-244480
-1514
183863
-1975211
-4559761
157733
131659
-12332008
-16722296
-4278455
35500
100000
1975211
23000
48500
1006000
500000
1701672
41363
468741
6667
285000
5250
<p style="margin-top: 0; margin-bottom: 6pt; margin-left: 0pt; text-indent: 20pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The
accompanying consolidated financial statements have been prepared in accordance with the Financial Accounting Standards Board
(“FASB”) “FASB Accounting Standard Codification™” (the “Codification”) which is the source
of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of
financial statements in conformity with generally accepted accounting principles (“GAAP”) in the United States.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b><i>Use
of Estimates</i></b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt"><font style="font: 10pt Times New Roman, Times, Serif">The
preparation of financial statements in conformity with GAAP requires management to make judgments, estimates and assumptions that
affect the amounts reported in the Company’s consolidated financial statements and accompanying notes. Actual results could
differ materially from those estimates.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b><i>Cash
and Cash Equivalents</i></b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt"><font style="font: 10pt Times New Roman, Times, Serif">The
Company considers all highly liquid investments with maturities of ninety days or less to be cash equivalents. Cash equivalents
consisted of money market funds as of December 31, 2012 and 2011. The Company maintains its cash in bank deposit accounts which,
at times, may exceed the federally insured limits.  Restricted cash consists of a $250,000 letter of credit issued in
favor of one of the Company’s key product development vendors for each of the years ended December 31, 2012 and 2011 and
a $157,463 letter of credit in favor of a landlord for the year ended December 31, 2012.  Non-current restricted cash
as of December 31, 2012 and 2011 represents a security deposit on the Company’s leased offices.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b><i>Accounts
Receivable</i></b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt"><font style="font: 10pt Times New Roman, Times, Serif">Accounts
receivable represent amounts billed by the Company. An allowance for doubtful accounts is determined based on management’s
best estimate of probable losses inherent in the accounts receivable balance. Amounts determined to be uncollectible are written
off against the allowance.  Management assesses the allowance based on information regarding nature of the receivables
and historical experience.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b><i>Intangible
Assets and Other Long-Lived Assets</i></b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt"><font style="font: 10pt Times New Roman, Times, Serif">The
Company records intangible assets at the acquisition date fair value. In connection with the acquisition of Durham
Pharmaceuticals Ltd., a North Carolina corporation doing business as Echo Therapeutics, Inc. (the “ETI
Acquisition”), intangible assets related to contractual arrangements were amortized over the estimated useful life of
three (3) years and ended in 2010.  Intangible assets related to technology are expected to be amortized on a
straight-line basis over the period ending in 2019 and will commence upon revenue generation.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt"><font style="font: 10pt Times New Roman, Times, Serif">The
Company reviews intangible assets annually to determine if any adverse conditions exist or a change in circumstances has occurred
that would indicate impairment or a change in the remaining useful life of any intangible asset. Conditions that would indicate
impairment and trigger an impairment assessment include, but are not limited to, a significant adverse change in legal factors
or business climate that could affect the value of an asset, or an adverse action or assessment by a regulator. If the carrying
value of an asset exceeds its undiscounted cash flows, the Company writes down the carrying value of the intangible asset to its
fair value in the period identified.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt"><font style="font: 10pt Times New Roman, Times, Serif">For
other long-lived assets, the Company evaluates quarterly whether events or circumstances have occurred that indicate that the
carrying value of these assets may be impaired.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt"><font style="font: 10pt Times New Roman, Times, Serif">The
Company generally calculates fair value as the present value of estimated future cash flows it expects to generate from the asset
using a risk-adjusted discount rate. If the estimate of an intangible asset’s remaining useful life is changed, the Company
amortizes the remaining carrying value of the intangible asset prospectively over the revised remaining useful life.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt"><font style="font: 10pt Times New Roman, Times, Serif">The
Company performs a regular review of the underlying assumptions, circumstances, time projections and revenue and expense estimates
to decide if there is a possible impairment. In reviewing the long-lived assets relating to the ETI Acquisition as of December
31, 2012, the Company concluded that there was no impairment of the carrying value of such long-lived assets. No impairment losses
were recorded for the years ended December 31, 2012, 2011 and 2010.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"><b><i>Depreciation
and Amortization</i></b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt"><font style="font: 10pt Times New Roman, Times, Serif">The
Company provides for depreciation and amortization by charges to operations for the cost of assets using the straight-line method
based on the estimated useful lives of the related assets, as follows:</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 45%; border-bottom: black 1.5pt solid; text-align: left; font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b>Asset
Classification</b></font></td>
<td style="width: 3%; padding-bottom: 1.7pt; text-align: left; font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 52%; border-bottom: black 1.5pt solid; text-align: center; font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b>Estimated
Useful Life</b></font></td></tr>
<tr style="vertical-align: top; background-color: #CCEEFF">
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Computer equipment </font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">3 years</font></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Office and laboratory equipment</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">3-5 years</font></td></tr>
<tr style="vertical-align: top; background-color: #CCEEFF">
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Furniture and fixtures</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">7 years</font></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Manufacturing equipment </font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">5 years</font></td></tr>
<tr style="vertical-align: top; background-color: #CCEEFF">
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Leasehold improvements        </font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">Life of lease</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b><i>Share-Based
Payments</i></b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt"><font style="font: 10pt Times New Roman, Times, Serif">The
Company recognizes compensation costs resulting from the issuance of stock-based awards to employees and directors as an expense
in the statement of operations over the service period based on a measurement of fair value for each stock award. The Company’s
policy is to grant employee and director stock options with an exercise price equal to or greater than the fair value of the Common
Stock at the date of grant.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt"><font style="font: 10pt Times New Roman, Times, Serif">The
Company recognizes compensation costs resulting from the issuance of stock-based awards to non-employees as an expense in the
statement of operations over the service period based on a measurement of fair value for each stock award.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b><i>Fair
Values of Assets and Liabilities</i></b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt"><font style="font: 10pt Times New Roman, Times, Serif">The
Company groups its financial assets and financial liabilities generally measured at fair value in three levels, based on the markets
in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 14%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">Level 1:  </font></td>
<td style="width: 86%; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Valuation is based on quoted
prices in active markets for identical assets or liabilities. Level 1 assets and liabilities generally include debt and equity
securities that are traded in an active exchange market. Valuations are obtained from readily available pricing sources for
market transactions involving identical assets or liabilities.</font></td></tr>
<tr style="vertical-align: top">
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: top">
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">Level 2:</font>  </td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Valuation is based on observable inputs
other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not
active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term
of the assets or liabilities. For example, Level 2 assets and liabilities may include debt securities with quoted prices that
are traded less frequently than exchange-traded instruments.</font></td></tr>
<tr style="vertical-align: top">
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: top">
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">Level 3:</font>  </td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Valuation is based on unobservable
inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash
flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant
management judgment or estimation. This category generally includes certain private equity investments and long-term derivative
contracts.</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt"><font style="font: 10pt Times New Roman, Times, Serif">The
Company's financial liabilities measured at fair value on December 31, 2012 and 2011 consists of a derivative warrant liability
which is classified as Level 3 in fair value hierarchy (see Note 7). The Company uses a valuation method, the Black-Scholes option
pricing model, and the requisite assumptions in estimating the fair value for the warrants considered to be derivative instruments.
These assumptions include the fair value of the underlying stock, risk-free interest rates, volatility, expected life and dividend
rates. The Company has no financial assets measured at fair value.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt"><font style="font: 10pt Times New Roman, Times, Serif">The
Company may also be required, from time to time, to measure certain other financial assets at fair value on a nonrecurring basis.
These adjustments to fair value usually result from application of lower-of-cost-or-market accounting or write-downs of individual
assets. There were no such adjustments in the years ended December 31, 2012, 2011 and 2010.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b><i>Derivative
Instruments</i></b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt"><font style="font: 10pt Times New Roman, Times, Serif">The
Company generally does not use derivative instruments to hedge exposures to cash-flow or market risks; however, certain warrants
to purchase Common Stock that do not meet the requirements for classification as equity are classified as liabilities. In such
instances, net-cash settlement is assumed for financial reporting purposes, even when the terms of the underlying contracts do
not provide for a net-cash settlement. Such financial instruments are initially recorded at fair value with subsequent changes
in fair value charged (credited) to operations in each reporting period. If these instruments subsequently meet the requirements
for classification as equity, the Company reclassifies the fair value to equity.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b><i>Concentration
of Credit Risk</i></b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt"><font style="font: 10pt Times New Roman, Times, Serif">The
Company has no significant off-balance-sheet risk. Financial instruments, which subject the Company to credit risk, principally
consist of cash and cash equivalents. The Company mitigates its risk by maintaining the majority of its cash and equivalents with
high-quality financial institutions.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b><i>Financial
Instruments</i></b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt"><font style="font: 10pt Times New Roman, Times, Serif">The
estimated fair value of the Company’s financial instruments, which include cash and cash equivalents, restricted cash, accounts
receivable, accounts payable and capital lease obligation, approximates their carrying value due to the short-term nature of these
instruments and their market terms.  The Company estimates the fair value of its notes payable to be its face value
of $3,000,000, which exceeds the carrying value because the carrying value has been recorded net of debt discounts.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b><i>Net
Loss per Common Share</i></b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt"><font style="font: 10pt Times New Roman, Times, Serif">Basic
and diluted net loss per share of Common Stock has been computed by dividing the net loss applicable to common stockholders in
each period by the weighted average number of shares of Common Stock outstanding during such period. For the periods presented,
options, warrants and convertible securities were anti-dilutive and therefore excluded from diluted loss per share calculations.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b><i>Segment
Information</i></b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt"><font style="font: 10pt Times New Roman, Times, Serif">Operating
segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation
by the chief operating decision maker, or decision making group, in making decisions regarding resource allocation and assessing
performance. To date, the Company has viewed its operations and manages its business as principally one operating segment, which
is the development of transdermal skin permeation and diagnostics medical devices and, specialty pharmaceutical drugs. As of December
31, 2012 and 2011, all of the Company’s assets were located in the United States.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b><i>Grant
Income</i></b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt"><font style="font: 10pt Times New Roman, Times, Serif">Grants
received are recognized as income when the related work is performed and the qualifying research and development costs are incurred
and are presented as Other Income on the Company’s consolidated statements of operations.  The Company received
a grant totaling approximately $244,500 under the Qualified Therapeutic Discovery Project Grants Program during 2010.  The
Qualified Therapeutic Discovery Project Grants Program was included in the healthcare reform legislation and established a one-time
pool of $1 billion for grants to small biotechnology companies developing novel therapeutics which show potential to: (a) result
in new therapies that either treat areas of unmet medical need, or prevent, detect, or treat chronic or acute diseases and conditions;
(b) reduce long-term health care costs in the United States; or (c) significantly advance the goal of curing cancer within the
next 30-year period.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b><i> </i></b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b><i>Research
and Development Expenses</i></b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt"><font style="font: 10pt Times New Roman, Times, Serif">The
Company charges research and development expenses to operations as incurred. Research and development expenses primarily consist
of salaries and related expenses for personnel and outside contractor and consulting services. Other research and development
expenses include the costs of materials and supplies used in research and development, prototype manufacturing, clinical studies,
related information technology and an allocation of facilities costs.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b><i>Income
Taxes</i></b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt"><font style="font: 10pt Times New Roman, Times, Serif">The
Company is primarily subject to U.S. federal, Massachusetts, Pennsylvania and New Jersey state income tax. Tax years subsequent
to 2008 remain open to examination by U.S. federal and state tax authorities.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt"><font style="font: 10pt Times New Roman, Times, Serif">For
federal and state income taxes, deferred tax assets and liabilities are recognized based upon temporary differences between the
financial statement and the tax basis of assets and liabilities. Deferred income taxes are based upon prescribed rates and enacted
laws applicable to periods in which differences are expected to reverse. A valuation allowance is recorded when it is more likely
than not that some portion or all of the deferred tax assets will not be realized. Accordingly, since the Company cannot be assured
of realizing the deferred tax asset, a full valuation allowance has been provided.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt"><font style="font: 10pt Times New Roman, Times, Serif">When
tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities,
while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately
sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available
evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution
of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions
that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50%
likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax
positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits
in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities
upon examination. There was no uncertain tax position liabilities recorded at December 31, 2012 and 2011.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt"><font style="font: 10pt Times New Roman, Times, Serif">The
Company’s policy is to recognize interest and penalties related to income tax matters in income tax expense. As of December
31, 2012 and 2011, the Company had no accruals for interest or penalties related to income tax matters.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b><i>Licensing
and Other Revenue Recognition</i></b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt"><font style="font: 10pt Times New Roman, Times, Serif">To
date, the Company has generated revenue primarily from licensing agreements, including upfront, nonrefundable license fees, with
collaborators and licensees. The Company recognizes revenue when the following criteria have been met:</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 24px; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 17px; text-align: justify; font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">persuasive evidence of an arrangement
exists;</font></td></tr>
<tr style="vertical-align: top">
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: justify; font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">delivery has occurred and risk of loss
has passed;</font></td></tr>
<tr style="vertical-align: top">
<td style="text-align: justify"> </td>
<td style="text-align: justify; font-weight: bold"> </td>
<td style="text-align: justify">the price to the buyer is fixed or determinable; and</td></tr>
<tr style="vertical-align: top">
<td style="text-align: justify"> </td>
<td style="text-align: justify; font-weight: bold"> </td>
<td style="text-align: justify">collectability is reasonably assured</td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">  </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt"><font style="font: 10pt Times New Roman, Times, Serif">In
addition, when evaluating multiple element arrangements, the Company considers whether the components of the arrangement represent
separate units of accounting. Multiple elements are divided into separate units of accounting if specified criteria are met, including
whether the delivered element has stand-alone value to the customer and whether there is objective and reliable evidence of the
fair value of the undelivered items. The consideration received is allocated among the separate units based on their respective
fair values, and the applicable revenue recognition criteria are applied to each of the separate units. Otherwise, the applicable
revenue recognition criteria are applied to combined elements as a single unit of accounting.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt"><font style="font: 10pt Times New Roman, Times, Serif">The
Company typically receives upfront, nonrefundable payments for the licensing of its intellectual property upon the signing of
a license agreement. The Company believes that these payments generally are not separable from the payments it receives for providing
research and development services because the license does not have stand-alone value from the research and development services
it provides under its agreements. Accordingly, the Company accounts for these elements as one unit of accounting and recognizes
upfront, nonrefundable payments as revenue on a straight-line basis over its contractual or estimated performance period. Revenue
from the reimbursement of research and development efforts is recognized as the services are performed based on proportional performance
adjusted from time to time for any delays or acceleration in the development of the product and is included in Other Revenue.
The Company determines the basis of the estimated performance period based on the contractual requirements of its collaboration
agreements. At each reporting period, the Company evaluates whether events warrant a change in the estimated performance period.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt"><font style="font: 10pt Times New Roman, Times, Serif">Other
Revenue includes amounts earned and billed under the license and collaboration agreements for reimbursement of research and development
costs for contract engineering services. For the services rendered, principally third-party contract engineering services, the
revenue recognized approximates the costs associated with the services.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b><i>Recently
Issued Accounting Pronouncements</i></b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt"><font style="font: 10pt Times New Roman, Times, Serif">In
July 2012, the FASB issued Accounting Standards Update ("ASU") No. 2012-02, <i>Testing Indefinite-Lived Intangible Assets
for Impairment</i>, which gives companies the option to perform a qualitative assessment to determine whether it is more likely
than not that an indefinite-lived intangible asset is impaired.  If a company determines that it is more likely than
not that the fair value of such an asset exceeds its carrying amount, it would not need to calculate the fair value of the asset
in that year.  However, if a company concludes otherwise, it must calculate the fair value of the asset, compare that
value with its carrying amount and record an impairment charge, if any.  The amendments in the ASU are effective for
annual and interim indefinite-lived intangible asset impairment tests performed for fiscal years beginning after September 15,
2012, which is fiscal 2013 for the Company.  Early adoption is permitted. The Company is currently assessing its adoption
plans.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt"><font style="font: 10pt Times New Roman, Times, Serif">In
December 2011, the FASB issued ASU 2011-11, <i>Disclosures about Offsetting Assets and Liabilities</i> (Topic 210), that provides
amendments for disclosures about offsetting assets and liabilities.  The amendments require an entity to disclose information
about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements
on its financial position.  Entities are required to disclose both gross information and net information about both
instruments and transactions eligible for offset in the statement of financial position and instruments and transactions subject
to an agreement similar to a master netting arrangement.  This scope would include derivatives, sale and repurchase
agreements and reverse sale and repurchase agreements, and securities borrowing and securities lending arrangements.  The
amendments are effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those
annual periods. Disclosures required by the amendments should be provided retrospectively for all comparative periods presented.
For the Company, the amendment is effective for fiscal year 2013.  The Company is currently evaluating the impact these
amendments may have on its disclosures.</font></p>
<p style="margin: 0pt"></p>
<p style="margin: 0pt; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt">On August 31, 2012, the Company
and Platinum-Montaur Life Sciences, LLC (“Montaur”) entered into a Loan Agreement (the “Loan Agreement”)
pursuant to which Montaur made a non-revolving draw credit facility (the “Credit Facility”) of up to $20,000,000 available
to the Company, a substantial portion of which is subject to the successful achievement of certain clinical and regulatory milestones
set forth in the Loan Agreement, with an initial available principal amount of $5,000,000 (the “Maximum Draw Amount”).  The
Company issued to Montaur a Promissory Note dated August 31, 2012 (the “Note”), with a maturity date of five years
from the date of closing (the “Maturity Date”).  The Company has used the proceeds from the Credit Facility
to fund operations.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt">The principal balance of each
draw will bear interest from the applicable draw date at a rate of 10% per annum, compounded monthly. The accrued interest expense
for the year ended December 31, 2012 was approximately $61,000 and is included in interest expense. The Company is required to
make interest payments on the principal amount due in connection with each draw on the first business day of each month until the
Maturity Date.  The Company is also required to make a mandatory prepayment on each interest payment date of an amount
equal to one-third of its total revenue for the then prior fiscal quarter, up to the maximum amount outstanding under the Note
at that time.  The Company is not, however, required to make such interest payment or mandatory prepayment if doing so
would reduce the Company’s cash and cash equivalents to less than $5,000,000.  Any amounts not previously paid
in full will be due and payable on the Maturity Date.  The Company will have the right to permanently prepay any draw,
in whole or in part, prior to the Maturity Date.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt">The Company’s subsidiary,
Sontra Medical, Inc. (“Sontra”), agreed to guarantee the obligations of the Company under the Note pursuant to a guaranty
agreement entered into on August 31, 2012 (the “Guaranty”). Additionally, the Note is secured by the Pledged Revenue
(as defined in the Loan Agreement) of the Company and the Company’s subsidiaries pursuant to a Security Agreement dated as
of August 31, 2012 by and among the Company, Sontra and Montaur.  Upon the earlier of the Maturity Date of the Note or
an event of default, as defined in the Loan Agreement, the Note shall be secured by substantially all of the assets of the Company
and any of its subsidiaries, which security interest shall not be effective until such event of default or maturity, pursuant to
a Default Security Agreement dated August 31, 2012 by and among the Company, Sontra and Montaur.  The Company also has
agreed to pay all costs associated with registering the shares underlying the Warrants (should it choose to register such shares)
and to indemnify Montaur from liability resulting from the registration of such shares (subject to certain standard exceptions)
in accordance with a Registration Indemnity Agreement between the Company and Montaur.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt">Pursuant to the Loan Agreement,
the Company issued Montaur a warrant to purchase 4,000,000 shares of its Common Stock, with a term of five years and an exercise
price of $2.00 per share (the “Commitment Warrant”).  The fair value of the warrant was determined to be
approximately $4,840,000 and was recorded as a deferred financing cost that will be amortized to interest expense over the term
of the Note.  Of this cost, $968,004 is reflected in Current Assets, representing the portion which will be amortized
over the next twelve months. Amortization of the deferred financing cost for the year ended December 31, 2012 was $323,000 and
is included in interest expense.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt">In addition, for each $1,000,000
of funds borrowed pursuant to the Credit Facility, the Company will issue Montaur a warrant to purchase 1,000,000 shares of Common
Stock, with a term of five years and an exercise price equal to 150% of the market price of the Common Stock at the time of the
draw, but in no event less than $2.00 or more than $4.00 per share (together with the Commitment Warrant, the “Warrants”).
All of the Warrants are immediately exercisable and will have a term of five years from the issue date. The exercise price of the
Warrants is subject to adjustment for stock splits, combinations or similar events.  An exercise under the Warrants may
not result in the holder beneficially owning more than 4.99% or 9.99%, as applicable, of all of the Common Stock outstanding at
the time; provided, however, that a holder may waive the 4.99% ownership limitation upon sixty-one (61) days’ advance
written notice to the Company.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt">On September 14, 2012, the
Company submitted a draw request to Montaur in the amount of $3,000,000 in the form required by the Loan Agreement (the “September
Request”).  The Company ultimately received the $3,000,000 of draws in the following increments.  $1,000,000
on September 20, 2012, $500,000 on October 17, 2012, and $1,500,000 on November 6, 2012.  These draws were recorded on
the Consolidated Balance Sheet under note payable, net of the initial $3,000,000 in discounts recorded related to the warrants
issued and described below.  We have accrued interest of approximately $61,000 on the $3,000,000 note payable at a rate
of 10% per annum, compounded monthly through the year ended December 31, 2012.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; margin-left: 0pt; text-indent: 20pt; text-align: justify">In
accordance with the Loan Agreement and as a result of funding received from Montaur, the Company issued to Montaur separate warrants
concurrent with the three draws above to purchase 100,000, 50,000 and 150,000 shares of Common Stock each with a term of
five years, and exercise prices of $21.30, $22.70 and 21.10 per share, respectively.  The fair value of the warrants issued
of $3,000,000 was determined to be approximately $3,455,000, of which $3,000,000 was treated as a debt discount and is being accreted
to interest expense over the term of the Note.  Amortization of the debt discount for the year ended December 31, 2012
was approximately $121,000 and is included in interest expense in the Consolidated Statement of Operations.  The excess
of the fair value of the warrants over the amount drawn under the note payable of approximately $455,000 was expensed at issuance
and recorded as debt financing costs in the Consolidated Statement of Operations for the year ended December 31, 2012.  The
carrying value of the note payable at December 31, 2012 was the accreted balance of $120,834.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Subsequent Event</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">On March 1, 2013, the
Company elected to prepay all outstanding draws under the Montaur Credit Facility totaling $3,113,366, which includes interest
accrued and unpaid to that date of $113,366. After such date, no principal amount is outstanding under the Credit Facility. Concurrent
with this prepayment, the Company recorded non-cash interest expense of approximately $2,800,000 in 2013 relating to the unamortized
debt discount on the outstanding draws paid off.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt"></p>
<p style="margin: 0pt; text-align: justify"></p>
<p style="margin: 0pt; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt">No provision or benefit for
federal or state income taxes has been recorded because the Company has incurred a net loss for all periods presented and has provided
a valuation allowance against its deferred tax assets.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt">At December 31, 2012,
the Company had gross federal net operating loss carryforwards of approximately $68,500,000, which begin expiring beginning in 2018.  The Company had gross state net operating loss carryforwards of approximately
$21,000,000, which begin expiring in 2013.  The Company also had federal research and development tax credit
carryforwards of approximately $1,486,000 which will begin to expire in 2018.  The United States Tax Reform Act of
1986 contains provisions that may limit the Company’s net operating loss carryforwards available to be used in any given
year in the event of significant changes in the ownership interests of significant stockholders, as defined.  The
effect of an ownership change would be the imposition of an annual limitation on the use of NOL carryforwards attributable to
periods before the change. The amount of the annual limitation depends upon the value of the Company immediately before the
change, changes to the Company’s capital during a specified period prior to the change, and the federal published
interest rate.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 26pt">Significant components of the
Company’s net deferred tax asset are as follows:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="padding-bottom: 1.7pt; text-align: left; font-weight: bold"> </td>
<td colspan="6" style="border-bottom: black 1.5pt solid; text-align: center; font-weight: bold">December 31,</td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: center; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-bottom: 1.7pt; text-align: center"> </td>
<td style="padding-bottom: 1.7pt; text-align: center; font-weight: bold"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; font-weight: bold">2012</td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: center; font-weight: bold"> </td>
<td style="padding-bottom: 1.7pt; text-align: center; font-weight: bold"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; font-weight: bold">2011</td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 72%; text-align: left">Deferred Tax Assets/(Liabilities):</td>
<td style="width: 1%; text-align: left"> </td>
<td style="width: 1%; text-align: left"> </td>
<td style="width: 11%; text-align: right"> </td>
<td nowrap="nowrap" style="width: 1%; text-align: left"> </td>
<td style="width: 1%; text-align: left"> </td>
<td style="width: 1%; text-align: left"> </td>
<td style="width: 11%; text-align: right"> </td>
<td nowrap="nowrap" style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-align: left; text-indent: 13pt">Net operating loss carryforwards</td>
<td style="text-align: left"> </td>
<td style="text-align: left">$</td>
<td style="text-align: right">24,428,000</td>
<td nowrap="nowrap" style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left">$</td>
<td style="text-align: right">19,913,000</td>
<td nowrap="nowrap" style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: left; text-indent: 13pt">Research credit carryforward</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">1,486,000</td>
<td nowrap="nowrap" style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">1,344,000</td>
<td nowrap="nowrap" style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-align: left; text-indent: 13pt">Acquired intangible assets, net</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">(3,724,000</td>
<td nowrap="nowrap" style="text-align: left">)</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">(3,781,000</td>
<td nowrap="nowrap" style="text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-bottom: 1.7pt; text-align: left; text-indent: 13pt">Restricted stock and warrants</td>
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="padding-bottom: 1.7pt; text-align: right">222,000</td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right">—</td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 1.7pt; text-align: left; text-indent: 13pt">Other temporary differences</td>
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right">219,000</td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right">156,000</td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: left; text-indent: 13pt"> Total deferred tax assets, net</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">22,631,000</td>
<td nowrap="nowrap" style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">17,632,000</td>
<td nowrap="nowrap" style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 1.7pt; text-align: left">Valuation allowance</td>
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right">(22,631,000</td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left">)</td>
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right">(17,632,000</td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-bottom: 3.45pt; text-align: left">Net deferred tax asset</td>
<td style="padding-bottom: 3.45pt; text-align: left"> </td>
<td style="border-bottom: black 4.5pt double; text-align: left">$</td>
<td style="border-bottom: black 4.5pt double; text-align: right">—</td>
<td nowrap="nowrap" style="padding-bottom: 3.45pt; text-align: left"> </td>
<td style="padding-bottom: 3.45pt; text-align: left"> </td>
<td style="border-bottom: black 4.5pt double; text-align: left">$</td>
<td style="border-bottom: black 4.5pt double; text-align: right">—</td>
<td nowrap="nowrap" style="padding-bottom: 3.45pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">  </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt">The Company has maintained
a full valuation allowance against its deferred tax items in both 2012 and 2011. A valuation allowance is required to be recorded
when it is more likely than not that some portion or all of the net deferred tax assets will not be realized. Since the Company
cannot be assured of realizing the net deferred tax asset, a full valuation allowance has been provided.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt">The Company has no
uncertain tax positions as of December 31, 2012 and 2011 that would affect its effective tax rate. The Company does not
anticipate a significant change in the amount of unrecognized tax benefits over the next twelve months. Because the Company
is in a loss carryforward position, the Company is generally subject to US federal and state income tax examinations by tax
authorities for all years for which a loss carryforward is available.  If and when applicable, the Company will
recognize interest and penalties as part of income tax expense.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt">Income taxes computed using
the federal statutory income tax rate differs from the Company’s effective tax rate primarily due to the following:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="padding-bottom: 1.7pt; text-align: left; font-weight: bold"> </td>
<td colspan="10" style="border-bottom: black 1.5pt solid; text-align: center; font-weight: bold"><b>Years Ended December 31,</b></td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="padding-bottom: 1.7pt; text-align: left; font-weight: bold"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; font-weight: bold; vertical-align: middle"><b>2012</b></td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: center; font-weight: bold; vertical-align: middle"> </td>
<td style="padding-bottom: 1.7pt; text-align: center; font-weight: bold; vertical-align: middle"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; font-weight: bold; vertical-align: middle"><b>2011</b></td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: center; font-weight: bold; vertical-align: middle"> </td>
<td style="padding-bottom: 1.7pt; text-align: center; font-weight: bold; vertical-align: middle"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; font-weight: bold; vertical-align: middle"><b>2010</b></td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 58%; text-align: left">Income taxes benefit (expense) at statutory rate</td>
<td style="width: 1%; text-align: left"> </td>
<td style="width: 1%; text-align: left"> </td>
<td style="width: 11%; text-align: right">34.0</td>
<td nowrap="nowrap" style="width: 1%; text-align: left">%</td>
<td style="width: 1%; text-align: left"> </td>
<td style="width: 1%; text-align: left"> </td>
<td style="width: 11%; text-align: right">35.0</td>
<td nowrap="nowrap" style="width: 1%; text-align: left">%</td>
<td style="width: 1%; text-align: left"> </td>
<td style="width: 1%; text-align: left"> </td>
<td style="width: 11%; text-align: right">35.0</td>
<td nowrap="nowrap" style="width: 1%; text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: left">State income tax, net of federal benefit</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">(4.7</td>
<td nowrap="nowrap" style="text-align: left">)%</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">(2.2</td>
<td nowrap="nowrap" style="text-align: left">)%</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">(0.5</td>
<td nowrap="nowrap" style="text-align: left">)%</td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-align: left">Permanent Differences:</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"> </td>
<td nowrap="nowrap" style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"> </td>
<td nowrap="nowrap" style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"> </td>
<td nowrap="nowrap" style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: left">Gain/loss or revaluation of derivative warrant liability</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">10.2</td>
<td nowrap="nowrap" style="text-align: left">%</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">(6.2</td>
<td nowrap="nowrap" style="text-align: left">)%</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">3.1</td>
<td nowrap="nowrap" style="text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-align: left">Stock-based compensation expense</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">(2.6</td>
<td nowrap="nowrap" style="text-align: left">)%</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">(2.9</td>
<td nowrap="nowrap" style="text-align: left">)%</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">(1.4</td>
<td nowrap="nowrap" style="text-align: left">)%</td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: left">Stock issues for services</td>
<td style="text-align: right"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">—</td>
<td nowrap="nowrap" style="text-align: left">%</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">(1.6</td>
<td nowrap="nowrap" style="text-align: left">)%</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">(8.6</td>
<td nowrap="nowrap" style="text-align: left">)%</td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-align: left">Loss on extinguishment of debt</td>
<td style="text-align: right"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">—</td>
<td nowrap="nowrap" style="text-align: left">%</td>
<td style="text-align: right"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">—</td>
<td nowrap="nowrap" style="text-align: left">%</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">1.6</td>
<td nowrap="nowrap" style="text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: left">Other</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">(2.2</td>
<td nowrap="nowrap" style="text-align: left">)%</td>
<td style="text-align: right"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">—</td>
<td nowrap="nowrap" style="text-align: left">%</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">(3.5</td>
<td nowrap="nowrap" style="text-align: left">)%</td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-align: left">R&D credits</td>
<td style="text-align: right"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">—</td>
<td nowrap="nowrap" style="text-align: left">%</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">(0.6</td>
<td nowrap="nowrap" style="text-align: left">)%</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">2.5</td>
<td nowrap="nowrap" style="text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-bottom: 1.7pt; text-align: left">Change in valuation allowance</td>
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right">(34.7</td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left">)%</td>
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right">(21.5</td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left">)%</td>
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right">(28.2</td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left">)%</td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 3.45pt; text-align: left"> </td>
<td style="padding-bottom: 3.45pt; text-align: right"> </td>
<td style="border-bottom: black 4.5pt double; text-align: left"> </td>
<td style="border-bottom: black 4.5pt double; text-align: right">—</td>
<td nowrap="nowrap" style="padding-bottom: 3.45pt; text-align: left">%</td>
<td style="padding-bottom: 3.45pt; text-align: right"> </td>
<td style="border-bottom: black 4.5pt double; text-align: left"> </td>
<td style="border-bottom: black 4.5pt double; text-align: right">—</td>
<td nowrap="nowrap" style="padding-bottom: 3.45pt; text-align: left">%</td>
<td style="padding-bottom: 3.45pt; text-align: right"> </td>
<td style="border-bottom: black 4.5pt double; text-align: left"> </td>
<td style="border-bottom: black 4.5pt double; text-align: right">—</td>
<td nowrap="nowrap" style="padding-bottom: 3.45pt; text-align: left">%</td></tr>
</table>
<p style="margin: 0pt"></p>
<p style="margin: 0pt; text-indent: 22pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">Management has evaluated
events subsequent to December 31, 2012. Other than as discussed in Note 6 and Note 9, there are no subsequent events that require
adjustment to or disclosure in the Financial Statements.</p>
<p style="margin: 0pt; text-indent: 22pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 20pt">The preparation of financial statements in
conformity with GAAP requires management to make judgments, estimates and assumptions that affect the amounts reported in the Company’s
consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 20pt">The Company considers all highly liquid investments
with maturities of ninety days or less to be cash equivalents. Cash equivalents consisted of money market funds as of December
31, 2012 and 2011. The Company maintains its cash in bank deposit accounts which, at times, may exceed the federally insured limits.  Restricted
cash consists of a $250,000 letter of credit issued in favor of one of the Company’s key product development vendors for
each of the years ended December 31, 2012 and 2011 and a $157,463 letter of credit in favor of a landlord for the year ended December
31, 2012.  Non-current restricted cash as of December 31, 2012 and 2011 represents a security deposit on the Company’s
leased offices.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 20pt">Accounts receivable represent amounts billed
by the Company. An allowance for doubtful accounts is determined based on management’s best estimate of probable losses inherent
in the accounts receivable balance. Amounts determined to be uncollectible are written off against the allowance.  Management
assesses the allowance based on information regarding nature of the receivables and historical experience.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 20pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt"><font style="font: 10pt Times New Roman, Times, Serif">The
Company records intangible assets at the acquisition date fair value. In connection with the acquisition of Durham
Pharmaceuticals Ltd., a North Carolina corporation doing business as Echo Therapeutics, Inc. (the “ETI
Acquisition”), intangible assets related to contractual arrangements were amortized over the estimated useful life of
three (3) years and ended in 2010.  Intangible assets related to technology are expected to be amortized on a
straight-line basis over the period ending 2018 and will commence upon revenue generation.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt"><font style="font: 10pt Times New Roman, Times, Serif">The
Company reviews intangible assets annually to determine if any adverse conditions exist or a change in circumstances has occurred
that would indicate impairment or a change in the remaining useful life of any intangible asset. Conditions that would indicate
impairment and trigger an impairment assessment include, but are not limited to, a significant adverse change in legal factors
or business climate that could affect the value of an asset, or an adverse action or assessment by a regulator. If the carrying
value of an asset exceeds its undiscounted cash flows, the Company writes down the carrying value of the intangible asset to its
fair value in the period identified.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt"><font style="font: 10pt Times New Roman, Times, Serif">For
other long-lived assets, the Company evaluates quarterly whether events or circumstances have occurred that indicate that the
carrying value of these assets may be impaired.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt"><font style="font: 10pt Times New Roman, Times, Serif">The
Company generally calculates fair value as the present value of estimated future cash flows it expects to generate from the asset
using a risk-adjusted discount rate. If the estimate of an intangible asset’s remaining useful life is changed, the Company
amortizes the remaining carrying value of the intangible asset prospectively over the revised remaining useful life.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt"><font style="font: 10pt Times New Roman, Times, Serif">The
Company performs a regular review of the underlying assumptions, circumstances, time projections and revenue and expense estimates
to decide if there is a possible impairment. In reviewing the long-lived assets relating to the ETI Acquisition as of December
31, 2012, the Company concluded that there was no impairment of the carrying value of such long-lived assets. No impairment losses
were recorded for the years ended December 31, 2011 and 2010.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 20pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 20pt">The Company provides for depreciation and amortization
by charges to operations for the cost of assets using the straight-line method based on the estimated useful lives of the related
assets, as follows:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 41%; border-bottom: black 1.5pt solid; text-align: justify; font-weight: bold">Asset Classification</td>
<td style="width: 32%; padding-bottom: 1.7pt; text-align: justify; font-weight: bold"> </td>
<td style="width: 27%; border-bottom: black 1.5pt solid; text-align: justify; font-weight: bold">Estimated Useful Life</td></tr>
<tr style="vertical-align: top; background-color: #CCEEFF">
<td style="text-align: justify">Computer equipment </td>
<td style="text-align: justify"> </td>
<td style="text-align: justify">3 years</td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="text-align: justify">Office and laboratory equipment</td>
<td style="text-align: justify"> </td>
<td style="text-align: justify">3-5 years</td></tr>
<tr style="vertical-align: top; background-color: #CCEEFF">
<td style="text-align: justify">Furniture and fixtures</td>
<td style="text-align: justify"> </td>
<td style="text-align: justify">7 years</td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="text-align: justify">Manufacturing equipment </td>
<td style="text-align: justify"> </td>
<td style="text-align: justify">5 years</td></tr>
<tr style="vertical-align: top; background-color: #CCEEFF">
<td style="text-align: justify">Leasehold improvements        </td>
<td style="text-align: justify"> </td>
<td style="text-align: justify">Life of lease</td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 20pt">The Company recognizes compensation costs resulting
from the issuance of stock-based awards to employees and directors as an expense in the statement of operations over the service
period based on a measurement of fair value for each stock award. The Company’s policy is to grant employee and director
stock options with an exercise price equal to or greater than the fair value of the Common Stock at the date of grant.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 20pt">The Company recognizes compensation costs resulting
from the issuance of stock-based awards to non-employees as an expense in the statement of operations over the service period based
on a measurement of fair value for each stock award.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 20pt">The Company groups its financial assets and
financial liabilities generally measured at fair value in three levels, based on the markets in which the assets and liabilities
are traded and the reliability of the assumptions used to determine fair value.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 13%; text-align: right">Level 1:  </td>
<td style="width: 87%; text-align: justify">Valuation is based on quoted prices in active markets for identical assets or liabilities. Level 1 assets and liabilities generally include debt and equity securities that are traded in an active exchange market. Valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities.</td></tr>
<tr style="vertical-align: top">
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td></tr>
<tr style="vertical-align: top">
<td style="text-align: right">Level 2:  </td>
<td style="text-align: justify">Valuation is based on observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. For example, Level 2 assets and liabilities may include debt securities with quoted prices that are traded less frequently than exchange-traded instruments.</td></tr>
<tr style="vertical-align: top">
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td></tr>
<tr style="vertical-align: top">
<td style="text-align: right">Level 3:  </td>
<td style="text-align: justify">Valuation is based on unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. This category generally includes certain private equity investments and long-term derivative contracts.</td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 20pt">The Company's financial liabilities measured
at fair value on December 31, 2012 and 2011 consists of a derivative warrant liability which is classified as Level 3 in fair value
hierarchy (see Note 7). The Company uses a valuation method, the Black-Scholes option pricing model, and the requisite assumptions
in estimating the fair value for the warrants considered to be derivative instruments. These assumptions include the fair value
of the underlying stock, risk-free interest rates, volatility, expected life and dividend rates. The Company has no financial assets
measured at fair value.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 20pt">The Company may also be required, from time
to time, to measure certain other financial assets at fair value on a nonrecurring basis. These adjustments to fair value usually
result from application of lower-of-cost-or-market accounting or write-downs of individual assets. There were no such adjustments
in the years ended December 31, 2012, 2011 and 2010.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 20pt">The Company generally does not use derivative
instruments to hedge exposures to cash-flow or market risks; however, certain warrants to purchase Common Stock that do not meet
the requirements for classification as equity are classified as liabilities. In such instances, net-cash settlement is assumed
for financial reporting purposes, even when the terms of the underlying contracts do not provide for a net-cash settlement. Such
financial instruments are initially recorded at fair value with subsequent changes in fair value charged (credited) to operations
in each reporting period. If these instruments subsequently meet the requirements for classification as equity, the Company reclassifies
the fair value to equity.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 20pt">The Company has no significant off-balance-sheet
risk. Financial instruments, which subject the Company to credit risk, principally consist of cash and cash equivalents. The Company
mitigates its risk by maintaining the majority of its cash and equivalents with high-quality financial institutions.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 20pt">The estimated fair value of the Company’s
financial instruments, which include cash and cash equivalents, restricted cash, accounts receivable, accounts payable and capital
lease obligation, approximates their carrying value due to the short-term nature of these instruments and their market terms.  The
Company estimates the fair value of its notes payable to be its face value of $3,000,000, which exceeds the carrying value because
the carrying value has been recorded net of debt discounts.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 20pt">Basic and diluted net loss per share of Common
Stock has been computed by dividing the net loss applicable to common stockholders in each period by the weighted average number
of shares of Common Stock outstanding during such period. For the periods presented, options, warrants and convertible securities
were anti-dilutive and therefore excluded from diluted loss per share calculations.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 20pt">Operating segments are identified as components
of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision
maker, or decision making group, in making decisions regarding resource allocation and assessing performance. To date, the Company
has viewed its operations and manages its business as principally one operating segment, which is the development of transdermal
skin permeation and diagnostics medical devices and, specialty pharmaceutical drugs. As of December 31, 2012 and 2011, all of the
Company’s assets were located in the United States.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 20pt">Grants received are recognized as income when
the related work is performed and the qualifying research and development costs are incurred and are presented as Other Income
on the Company’s consolidated statements of operations.  The Company received a grant totaling approximately $244,500
under the Qualified Therapeutic Discovery Project Grants Program during 2010.  The Qualified Therapeutic Discovery Project
Grants Program was included in the healthcare reform legislation and established a one-time pool of $1 billion for grants to small
biotechnology companies developing novel therapeutics which show potential to: (a) result in new therapies that either treat areas
of unmet medical need, or prevent, detect, or treat chronic or acute diseases and conditions; (b) reduce long-term health care
costs in the United States; or (c) significantly advance the goal of curing cancer within the next 30-year period.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 20pt">The Company charges research and development
expenses to operations as incurred. Research and development expenses primarily consist of salaries and related expenses for personnel
and outside contractor and consulting services. Other research and development expenses include the costs of materials and supplies
used in research and development, prototype manufacturing, clinical studies, related information technology and an allocation of
facilities costs.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 20pt">The Company is primarily subject to U.S. federal,
Massachusetts, Pennsylvania and New Jersey state income tax. Tax years subsequent to 2008 remain open to examination by U.S. federal
and state tax authorities.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 20pt">For federal and state income taxes, deferred
tax assets and liabilities are recognized based upon temporary differences between the financial statement and the tax basis of
assets and liabilities. Deferred income taxes are based upon prescribed rates and enacted laws applicable to periods in which differences
are expected to reverse. A valuation allowance is recorded when it is more likely than not that some portion or all of the deferred
tax assets will not be realized. Accordingly, since the Company cannot be assured of realizing the deferred tax asset, a full valuation
allowance has been provided.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 20pt">When tax returns are filed, it is highly certain
that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty
about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position
is recognized in the financial statements in the period during which, based on all available evidence, management believes it is
more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes,
if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not
recognition threshold are measured as the largest amount of tax benefit that is more than 50% likely of being realized upon settlement
with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured
as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheet along with any associated
interest and penalties that would be payable to the taxing authorities upon examination. There was no uncertain tax position liabilities
recorded at December 31, 2012 and 2011.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 20pt">The Company’s policy is to recognize
interest and penalties related to income tax matters in income tax expense. As of December 31, 2012 and 2011, the Company had no
accruals for interest or penalties related to income tax matters.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 20pt">To date, the Company has generated revenue
primarily from licensing agreements, including upfront, nonrefundable license fees, with collaborators and licensees. The Company
recognizes revenue when the following criteria have been met:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 24px; text-align: justify"> </td>
<td style="width: 17px; text-align: justify; font-weight: bold"> </td>
<td style="text-align: justify">persuasive evidence of an arrangement exists;</td></tr>
<tr style="vertical-align: top">
<td style="text-align: justify"> </td>
<td style="text-align: justify; font-weight: bold"> </td>
<td style="text-align: justify">delivery has occurred and risk of loss has passed;</td></tr>
<tr style="vertical-align: top">
<td style="text-align: justify"> </td>
<td style="text-align: justify; font-weight: bold"> </td>
<td style="text-align: justify">the price to the buyer is fixed or determinable; and</td></tr>
<tr style="vertical-align: top">
<td style="text-align: justify"> </td>
<td style="text-align: justify; font-weight: bold"> </td>
<td style="text-align: justify">collectability is reasonably assured.</td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">  </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 20pt">In addition, when evaluating multiple element
arrangements, the Company considers whether the components of the arrangement represent separate units of accounting. Multiple
elements are divided into separate units of accounting if specified criteria are met, including whether the delivered element has
stand-alone value to the customer and whether there is objective and reliable evidence of the fair value of the undelivered items.
The consideration received is allocated among the separate units based on their respective fair values, and the applicable revenue
recognition criteria are applied to each of the separate units. Otherwise, the applicable revenue recognition criteria are applied
to combined elements as a single unit of accounting.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 26pt"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 20pt">The Company typically receives upfront, nonrefundable
payments for the licensing of its intellectual property upon the signing of a license agreement. The Company believes that these
payments generally are not separable from the payments it receives for providing research and development services because the
license does not have stand-alone value from the research and development services it provides under its agreements. Accordingly,
the Company accounts for these elements as one unit of accounting and recognizes upfront, nonrefundable payments as revenue on
a straight-line basis over its contractual or estimated performance period. Revenue from the reimbursement of research and development
efforts is recognized as the services are performed based on proportional performance adjusted from time to time for any delays
or acceleration in the development of the product and is included in Other Revenue. The Company determines the basis of the estimated
performance period based on the contractual requirements of its collaboration agreements. At each reporting period, the Company
evaluates whether events warrant a change in the estimated performance period.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 20pt">Other Revenue includes amounts earned and billed
under the license and collaboration agreements for reimbursement of research and development costs for contract engineering services.
For the services rendered, principally third-party contract engineering services, the revenue recognized approximates the costs
associated with the services.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 20pt">In July 2012, the FASB issued Accounting Standards
Update ("ASU") No. 2012-02, <i>Testing Indefinite-Lived Intangible Assets for Impairment</i>, which gives companies the
option to perform a qualitative assessment to determine whether it is more likely than not that an indefinite-lived intangible
asset is impaired.  If a company determines that it is more likely than not that the fair value of such an asset exceeds
its carrying amount, it would not need to calculate the fair value of the asset in that year.  However, if a company
concludes otherwise, it must calculate the fair value of the asset, compare that value with its carrying amount and record an impairment
charge, if any.  The amendments in the ASU are effective for annual and interim indefinite-lived intangible asset impairment
tests performed for fiscal years beginning after September 15, 2012, which is fiscal 2013 for the Company.  Early adoption
is permitted. The Company is currently assessing its adoption plans.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 20pt">In December 2011, the FASB issued ASU 2011-11,
<i>Disclosures about Offsetting Assets and Liabilities</i> (Topic 210), that provides amendments for disclosures about offsetting
assets and liabilities.  The amendments require an entity to disclose information about offsetting and related arrangements
to enable users of its financial statements to understand the effect of those arrangements on its financial position.  Entities
are required to disclose both gross information and net information about both instruments and transactions eligible for offset
in the statement of financial position and instruments and transactions subject to an agreement similar to a master netting arrangement.  This
scope would include derivatives, sale and repurchase agreements and reverse sale and repurchase agreements, and securities borrowing
and securities lending arrangements.  The amendments are effective for annual reporting periods beginning on or after
January 1, 2013, and interim periods within those annual periods. Disclosures required by the amendments should be provided retrospectively
for all comparative periods presented. For the Company, the amendment is effective for fiscal year 2013.  The Company
is currently evaluating the impact these amendments may have on its disclosures.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 26pt; text-align: justify">The Company provides for depreciation
and amortization by charges to operations for the cost of assets using the straight-line method based on the estimated useful lives
of the related assets, as follows:</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 41%; border-bottom: black 1.5pt solid; font-weight: bold; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Asset Classification</b></font></td>
<td style="width: 5%; font-weight: bold; line-height: 115%"> </td>
<td style="width: 54%; border-bottom: black 1.5pt solid; font-weight: bold; line-height: 115%; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Estimated Useful Life</b></font></td></tr>
<tr style="vertical-align: top; background-color: #CCEEFF">
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Computer equipment </font></td>
<td style="line-height: 115%"> </td>
<td style="text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">3 years</font></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Office and laboratory equipment</font></td>
<td style="line-height: 115%"> </td>
<td style="text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">3-5 years</font></td></tr>
<tr style="vertical-align: top; background-color: #CCEEFF">
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Furniture and fixtures</font></td>
<td style="line-height: 115%"> </td>
<td style="text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">7 years</font></td></tr>
<tr style="vertical-align: top; background-color: white">
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Manufacturing equipment </font></td>
<td style="line-height: 115%"> </td>
<td style="text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">5 years</font></td></tr>
<tr style="vertical-align: top; background-color: #CCEEFF">
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Leasehold improvements        </font></td>
<td style="line-height: 115%"> </td>
<td style="text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Life of lease</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 26pt">Significant components of the
Company’s net deferred tax asset are as follows:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="padding-bottom: 1.7pt; text-align: left; font-weight: bold"> </td>
<td colspan="6" style="border-bottom: black 1.5pt solid; text-align: center; font-weight: bold">December 31,</td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: center; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-bottom: 1.7pt; text-align: center"> </td>
<td style="padding-bottom: 1.7pt; text-align: center; font-weight: bold"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; font-weight: bold">2012</td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: center; font-weight: bold"> </td>
<td style="padding-bottom: 1.7pt; text-align: center; font-weight: bold"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; font-weight: bold">2011</td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 72%; text-align: left">Deferred Tax Assets/(Liabilities):</td>
<td style="width: 1%; text-align: left"> </td>
<td style="width: 1%; text-align: left"> </td>
<td style="width: 11%; text-align: right"> </td>
<td nowrap="nowrap" style="width: 1%; text-align: left"> </td>
<td style="width: 1%; text-align: left"> </td>
<td style="width: 1%; text-align: left"> </td>
<td style="width: 11%; text-align: right"> </td>
<td nowrap="nowrap" style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-align: left; text-indent: 13pt">Net operating loss carryforwards</td>
<td style="text-align: left"> </td>
<td style="text-align: left">$</td>
<td style="text-align: right">24,428,000</td>
<td nowrap="nowrap" style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left">$</td>
<td style="text-align: right">19,913,000</td>
<td nowrap="nowrap" style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: left; text-indent: 13pt">Research credit carryforward</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">1,486,000</td>
<td nowrap="nowrap" style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">1,344,000</td>
<td nowrap="nowrap" style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-align: left; text-indent: 13pt">Acquired intangible assets, net</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">(3,724,000</td>
<td nowrap="nowrap" style="text-align: left">)</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">(3,781,000</td>
<td nowrap="nowrap" style="text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-bottom: 1.7pt; text-align: left; text-indent: 13pt">Restricted stock and warrants</td>
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="padding-bottom: 1.7pt; text-align: right">222,000</td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right">—</td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 1.7pt; text-align: left; text-indent: 13pt">Other temporary differences</td>
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right">219,000</td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right">156,000</td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: left; text-indent: 13pt"> Total deferred tax assets, net</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">22,631,000</td>
<td nowrap="nowrap" style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">17,632,000</td>
<td nowrap="nowrap" style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 1.7pt; text-align: left">Valuation allowance</td>
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right">(22,631,000</td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left">)</td>
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right">(17,632,000</td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-bottom: 3.45pt; text-align: left">Net deferred tax asset</td>
<td style="padding-bottom: 3.45pt; text-align: left"> </td>
<td style="border-bottom: black 4.5pt double; text-align: left">$</td>
<td style="border-bottom: black 4.5pt double; text-align: right">—</td>
<td nowrap="nowrap" style="padding-bottom: 3.45pt; text-align: left"> </td>
<td style="padding-bottom: 3.45pt; text-align: left"> </td>
<td style="border-bottom: black 4.5pt double; text-align: left">$</td>
<td style="border-bottom: black 4.5pt double; text-align: right">—</td>
<td nowrap="nowrap" style="padding-bottom: 3.45pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 26pt">Income taxes computed using
the federal statutory income tax rate differs from the Company’s effective tax rate primarily due to the following:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="padding-bottom: 1.7pt; text-align: left; font-weight: bold"> </td>
<td colspan="10" style="border-bottom: black 1.5pt solid; text-align: center; font-weight: bold">Years Ended December 31,</td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="padding-bottom: 1.7pt; text-align: left; font-weight: bold"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: left; font-weight: bold">2012</td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left; font-weight: bold"> </td>
<td style="padding-bottom: 1.7pt; text-align: left; font-weight: bold"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: left; font-weight: bold">2011</td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left; font-weight: bold"> </td>
<td style="padding-bottom: 1.7pt; text-align: left; font-weight: bold"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center; font-weight: bold">2010</td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 58%; text-align: left">Income taxes benefit (expense) at statutory rate</td>
<td style="width: 1%; text-align: left"> </td>
<td style="width: 1%; text-align: left"> </td>
<td style="width: 11%; text-align: right">34.0</td>
<td nowrap="nowrap" style="width: 1%; text-align: left">%</td>
<td style="width: 1%; text-align: left"> </td>
<td style="width: 1%; text-align: left"> </td>
<td style="width: 11%; text-align: right">35.0</td>
<td nowrap="nowrap" style="width: 1%; text-align: left">%</td>
<td style="width: 1%; text-align: left"> </td>
<td style="width: 1%; text-align: left"> </td>
<td style="width: 11%; text-align: right">35.0</td>
<td nowrap="nowrap" style="width: 1%; text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: left">State income tax, net of federal benefit</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">(4.7</td>
<td nowrap="nowrap" style="text-align: left">)%</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">(2.2</td>
<td nowrap="nowrap" style="text-align: left">)%</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">(0.5</td>
<td nowrap="nowrap" style="text-align: left">)%</td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-align: left">Permanent Differences:</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"> </td>
<td nowrap="nowrap" style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"> </td>
<td nowrap="nowrap" style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right"> </td>
<td nowrap="nowrap" style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: left">Gain/loss or revaluation of derivative warrant liability</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">10.2</td>
<td nowrap="nowrap" style="text-align: left">%</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">(6.2</td>
<td nowrap="nowrap" style="text-align: left">)%</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">3.1</td>
<td nowrap="nowrap" style="text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-align: left">Stock-based compensation expense</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">(2.6</td>
<td nowrap="nowrap" style="text-align: left">)%</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">(2.9</td>
<td nowrap="nowrap" style="text-align: left">)%</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">(1.4</td>
<td nowrap="nowrap" style="text-align: left">)%</td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: left">Stock issues for services</td>
<td style="text-align: right"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">—</td>
<td nowrap="nowrap" style="text-align: left">%</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">(1.6</td>
<td nowrap="nowrap" style="text-align: left">)%</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">(8.6</td>
<td nowrap="nowrap" style="text-align: left">)%</td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-align: left">Loss on extinguishment of debt</td>
<td style="text-align: right"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">—</td>
<td nowrap="nowrap" style="text-align: left">%</td>
<td style="text-align: right"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">—</td>
<td nowrap="nowrap" style="text-align: left">%</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">1.6</td>
<td nowrap="nowrap" style="text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: left">Other</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">(2.2</td>
<td nowrap="nowrap" style="text-align: left">)%</td>
<td style="text-align: right"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">—</td>
<td nowrap="nowrap" style="text-align: left">%</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">(3.5</td>
<td nowrap="nowrap" style="text-align: left">)%</td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-align: left">R&D credits</td>
<td style="text-align: right"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">—</td>
<td nowrap="nowrap" style="text-align: left">%</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">(0.6</td>
<td nowrap="nowrap" style="text-align: left">)%</td>
<td style="text-align: left"> </td>
<td style="text-align: left"> </td>
<td style="text-align: right">2.5</td>
<td nowrap="nowrap" style="text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-bottom: 1.7pt; text-align: left">Change in valuation allowance</td>
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right">(34.7</td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left">)%</td>
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right">(21.5</td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left">)%</td>
<td style="padding-bottom: 1.7pt; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: left"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right">(28.2</td>
<td nowrap="nowrap" style="padding-bottom: 1.7pt; text-align: left">)%</td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 3.45pt; text-align: left"> </td>
<td style="padding-bottom: 3.45pt; text-align: right"> </td>
<td style="border-bottom: black 4.5pt double; text-align: left"> </td>
<td style="border-bottom: black 4.5pt double; text-align: right">—</td>
<td nowrap="nowrap" style="padding-bottom: 3.45pt; text-align: left">%</td>
<td style="padding-bottom: 3.45pt; text-align: right"> </td>
<td style="border-bottom: black 4.5pt double; text-align: left"> </td>
<td style="border-bottom: black 4.5pt double; text-align: right">—</td>
<td nowrap="nowrap" style="padding-bottom: 3.45pt; text-align: left">%</td>
<td style="padding-bottom: 3.45pt; text-align: right"> </td>
<td style="border-bottom: black 4.5pt double; text-align: left"> </td>
<td style="border-bottom: black 4.5pt double; text-align: right">—</td>
<td nowrap="nowrap" style="padding-bottom: 3.45pt; text-align: left">%</td></tr>
</table>
113400
59471
1514
-183863
12159
35190
236974
2478701
1000000
250000
75000
50000
10700000
3113366
20000000
P3Y
P3Y
P5Y
P7Y
P5Y
Life of lease
250000
250000
157463
3000000
0
0
0
1604000
1604000
1604000
1604000
1604000
4000000
2
4840000
3000000
0.1
121000
455000
120834
70000
-1763000
141947
16546
65315
0.01
9974.19
3006000
9974.19
3006000
1701672
6590206
4702325
153464
449000
466000
153464
95332
138000
265000
938537
836866
164810
22000
9.2
1861000
863000
316042
574024
323463
393249
24428000
19913000
1486000
1344000
-3724000
-3781000
222000
219000
156000
22631000
17632000
-22631000
-17632000
0.34
0.35
0.35
-0.047
-0.022
-0.005
68500000
21000000
1340000
8655000
11191000
4840000
41000
P2Y
P5Y
P2Y
P5Y
16546
661530
454983
212000
6628000
5207239
141947
74425
4471631
400000
290000
125000
100000
750000
500000
145000
0.102
-0.062
0.031
-0.026
-0.062
-0.014
0
-0.016
-0.086
0
0
0.016
-0.022
0
-0.035
0
-0.006
0.025
-0.347
-0.215
-0.282
0
0
0
3747000
6068469
23000
31000
68000
93000
241000
5000
61000
121000
0.0070
0.0223
0.0336
0.0375
0.00
0.00
P2Y
P22D
P5Y
0.00
0.00
1.42
1.23
1.44
2013-02-11
2013-02-11
2013-03-24
2017-08-31
2017-09-20
2017-10-17
2017-11-06
2013-09-30
2013-10-28
2014-02-28
2014-03-15
2014-06-30
2014-11-13
2014-11-13
2014-12-03
2015-02-09
2015-02-09
2015-03-18
2013-02-10
2013-03-03
2013-01-04
2013-01-04
2013-01-04
2013-01-04
2013-02-03
2013-02-03
2013-02-03
2013-02-03
2013-02-08
2013-02-08
2014-12-07
P4Y6M
P1Y2M5D
P3Y1M17D
9427772
42275
9542776
5059
5072
2704580
3112625
3015974
3854400
3015974
4437346
212018
4919345
35
-35
32
23044
4917009
165
211852
3571
3225
230345
16545
393249
363
392886
190
-190
36300
19000
836866
164810
164810
836866
616634
616634
59471
59471
113400
60
113340
6000
3518053
3357
3514696
335674
448940
465500
265
465235
138
448802
26500
13800
61520
2272597
200357
200357
2272597
61520
285000
285000
13
17
-17
1661
16
6667
6667
6154489
3550
6435939
-285000
355045
3484702
35060
3449642
3506000
-5000
500
4500
-500000
50000
35500
30
35470
3000
195259
136790
706
136084
225
195034
70585
22453
3272202
4080
3268122
408000
6667
-6667
153464
95
153369
9533
1699562
1264
1698298
126415
<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: bottom">
<td style="padding-bottom: 0.9pt"> </td>
<td style="padding-bottom: 0.9pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>2012</b></font></td>
<td nowrap="nowrap" style="padding-bottom: 0.9pt"> </td>
<td style="padding-bottom: 0.9pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>2011</b></font></td>
<td nowrap="nowrap" style="padding-bottom: 0.9pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 72%; font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Risk-free interest rate</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 11%; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">0.70% - 2.23</font></td>
<td nowrap="nowrap" style="width: 1%; font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 11%; font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">3.36% - 3.75</font></td>
<td nowrap="nowrap" style="width: 1%; font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Expected dividend yield</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td>
<td nowrap="nowrap"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Expected term (contractual term)</font></td>
<td> </td>
<td colspan="2" style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">0.06 - 5 years</font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td colspan="2" style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">2 years</font></td>
<td nowrap="nowrap"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Forfeiture rate</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td>
<td nowrap="nowrap"> </td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td>
<td nowrap="nowrap"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">Expected volatility</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">123% - 144</font></td>
<td nowrap="nowrap" style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td>
<td> </td>
<td> </td>
<td style="font: 10pt/115% Calibri, Helvetica, Sans-Serif; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">142</font></td>
<td nowrap="nowrap" style="font: 10pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td></tr>
</table>
323000
Included in Gain (Loss) on Revaluation of Derivative Warrant Liability in the Consolidated Statement of Operations.
Included in gain or loss on revaluation of derivative warrant liability in the Consolidated Statement of Operations.