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<p style="font: 11pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"><font style="font-size: 10pt">Echo
Therapeutics, Inc. (the “Company”) is a medical device company with expertise in advanced skin permeation technology.
The Company is developing its 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 Symphony</font><font style="font-size: 7pt">®</font><font style="font-size: 10pt"> SkinPrep System
(“SkinPrep”), a component of the Symphony CGM System, allows for enhanced skin permeation that enables extraction of
analytes such as glucose.</font></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: 0.25in">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/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: 0.25in">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"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Liquidity and Management’s
Plans</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-align: justify; text-indent: 0.25in">The
accompanying financial statements have been prepared on a basis that assumes that the Company will continue as a going
concern and that contemplates the continuity of operations, realization of assets and the satisfaction of liabilities and
commitments in the normal course of business.  As of December 31, 2013, the Company had cash of approximately
$8,055,000, working capital of approximately $5,731,000, and an accumulated deficit of approximately
$112,969,000.  The Company continues to incur recurring losses from operations.  The Company
will need to collect proceeds under its current financing arrangement and secure additional capital to
fund its product development, research, manufacturing and clinical programs in accordance with its current planned
operations.  The Company has funded its operations in the past primarily through debt and equity
issuances.  Management intends to utilize its current financing arrangements and will continue to pursue
additional financing to fund its operations.  Management believes that it will be successful in collecting on their
current financing arrangement and raising additional capital.  No assurances can be given that additional
capital will be available on terms acceptable to the Company (see MTIA Securities Purchase Agreement in Note
9). The accompanying financial statements do not include any adjustments that might result from the outcome of the
uncertainty.</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: 0.25in">Subsequent to
December 31, 2013, the Company received net cash proceeds from a Common Stock financing with MTIA of $1,904,793 as part of their
total $5,000,000 investment (see Note 9).</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">Management believes
that the cash received from this Common Stock financing coupled with the cash on hand at December 31, 2013 will be sufficient to
fund the cash requirements under the 2014 budget and fund operations through December 31, 2014.  If all cash proceeds
from MTIA are not received, management believes certain expenditures can be deferred until additional financing is obtained.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">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.</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"><b><i>Use of Estimates</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-align: justify; text-indent: 0.25in">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/normal Times New Roman, Times, Serif; margin: 0"> </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"><b><i>Cash and Cash Equivalents</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-align: justify; text-indent: 0.25in">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, 2013 and 2012. 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 as of December 31, 2013 and 2012 and a $52,488 and $157,463 letters of credit in
favor of a landlord as of December 31, 2013 and 2012, respectively.  Non-current restricted cash as of December 31, 2013
and 2012 represents a security deposit on the Company’s leased offices.</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"><b><i>Intangible Assets and Other Long-Lived Assets</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-align: justify; text-indent: 0.25in">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.</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: 0.25in">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.</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: 0.25in">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.</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: 0.25in">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.</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: 0.25in">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, 2013, 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, 2013, 2012 and 2011.</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>Depreciation and Amortization</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-align: justify; text-indent: 0.25in">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>
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<td style="width: 20%; border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Estimated Useful Life</b></font></td></tr>
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<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="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="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="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="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/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><b><i>Share-Based Payments</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-align: justify; text-indent: 0.25in">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/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">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/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><i>Fair Values of Assets and Liabilities</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-align: justify; text-indent: 0.25in">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/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: top">
<td style="width: 7%; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Level 1:</font></td>
<td style="width: 93%; text-align: justify; line-height: 115%"><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="line-height: 115%"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: top">
<td style="text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Level 2:</font></td>
<td style="text-align: justify; line-height: 115%"><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: center; line-height: 115%"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: top">
<td style="text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Level 3:</font></td>
<td style="text-align: justify; line-height: 115%"><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/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: 0.25in">The Company's financial
liabilities measured at fair value on December 31, 2013 and 2012 consists solely 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/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: 0.25in">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, 2013, 2012 and 2011.</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"><b><i>Derivative Instruments</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-align: justify; text-indent: 0.25in">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/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><b><i>Concentration of Credit Risk</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-align: justify; text-indent: 0.25in">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/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><b><i>Financial Instruments</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-align: justify; text-indent: 0.25in">The estimated fair
value of the Company’s financial instruments, which include cash and cash equivalents, restricted cash, accounts payable
and capital lease obligation, approximates their carrying value due to the short-term nature of these instruments and their market
terms.</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"><b><i>Net Loss per Common Share</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-align: justify; text-indent: 0.25in">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/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><b><i>Segment Information</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-align: justify; text-indent: 0.25in">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 diagnostic medical devices and specialty pharmaceutical drugs. As of December 31, 2013 and 2012,
all of the Company’s assets were located in the United States.</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"><b><i>Research and Development Expenses</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-align: justify; text-indent: 0.25in">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/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>Income Taxes</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-align: justify; text-indent: 0.25in">The Company is
primarily subject to U.S. federal, Massachusetts, Pennsylvania and New Jersey state income tax. Tax years subsequent to 2010 remain
open to examination by U.S. federal and state tax authorities.</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: 0.25in">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/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: 0.25in">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 were no uncertain tax position liabilities recorded at December 31, 2013 and 2012.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">The Company’s
policy is to recognize interest and penalties related to income tax matters in income tax expense. As of December 31, 2013 and
2012, the Company had no accruals for interest or penalties related to income tax matters.</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"><b><i>Licensing and Other Revenue Recognition</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-align: justify; text-indent: 0.25in">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/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: 0.5in">·</td><td>persuasive evidence of an arrangement exists;</td></tr></table>
<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: 0.5in">·</td><td>delivery has occurred and risk of loss has passed;</td></tr></table>
<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: 0.5in">·</td><td>the price to the buyer is fixed or determinable; and</td></tr></table>
<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: 0.5in">·</td><td>collectability is reasonably assured.</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-align: justify; text-indent: 0.25in">From time to time,
the Company 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/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: 0.25in">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/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>Recently Issued Accounting Pronouncements</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-align: justify; text-indent: 0.25in">In July 2013, the
FASB issued Accounting Standards Update ("ASU") No. 2013-11, <i>Income Taxes (Topic 740): Presentation of an Unrecognized
Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists</i> to clarify the
balance sheet presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax
credit carryforward exists. It was issued to resolve the diversity in practice that had developed in the absence of any on-point
U.S. GAAP guidance. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15,
2013. Early adoption is permitted. The amendments should be applied prospectively to all unrecognized tax benefits that exist at
the effective date. Retrospective application is permitted. The Company is currently assessing its adoption plans.</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: 0.25in">The
accompanying financial statements have been prepared on a basis that assumes that the Company will continue as a going
concern and that contemplates the continuity of operations, realization of assets and the satisfaction of liabilities and
commitments in the normal course of business.  As of December 31, 2013, the Company had cash of approximately
$8,055,000, working capital of approximately $5,731,000, and an accumulated deficit of approximately
$112,969,000.  The Company continues to incur recurring losses from operations.  The Company
will need to collect proceeds under its current financing arrangement and secure additional capital to
fund its product development, research, manufacturing and clinical programs in accordance with its current planned
operations.  The Company has funded its operations in the past primarily through debt and equity
issuances.  Management intends to utilize its current financing arrangements and will continue to pursue
additional financing to fund its operations.  Management believes that it will be successful in collecting on their
current financing arrangement and raising additional capital.  No assurances can be given that additional
capital will be available on terms acceptable to the Company (see MTIA Securities Purchase Agreement in Note
9). The accompanying financial statements do not include any adjustments that might result from the outcome of the
uncertainty.</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: 0.25in">Subsequent to
December 31, 2013, the Company received net cash proceeds from a Common Stock financing with MTIA of $1,904,793 as part of their
total $5,000,000 investment (see Note 9).</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">Management believes
that the cash received from this Common Stock financing coupled with the cash on hand at December 31, 2013 will be sufficient
to fund the cash requirements under the 2014 budget and fund operations through December 31, 2014.  If all cash proceeds
from MTIA are not received, management believes certain expenditures can be deferred until additional financing is obtained.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 11pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"><font style="font-size: 10pt">Echo
Therapeutics, Inc. (the “Company”) is a medical device company with expertise in advanced skin permeation technology.
The Company is developing its 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 Symphony</font><font style="font-size: 7pt">®</font><font style="font-size: 10pt"> SkinPrep System
(“SkinPrep”), a component of the Symphony CGM System, allows for enhanced skin permeation that enables extraction of
analytes such as glucose.</font></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: 0.25in">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/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: 0.25in">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; text-indent: 0.25in">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/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">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, 2013 and 2012. 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 as of December 31, 2013 and 2012 and a $52,488 and $157,463 letters of credit in
favor of a landlord as of December 31, 2013 and 2012, respectively.  Non-current restricted cash as of December 31, 2013
and 2012 represents a security deposit on the Company’s leased offices.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">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.</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: 0.25in">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.</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: 0.25in">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.</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: 0.25in">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.</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: 0.25in">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, 2013, 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, 2013, 2012 and 2011.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">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="width: 100%; font: 10pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<tr style="vertical-align: top">
<td style="width: 80%; border-bottom: black 1pt solid; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Asset Classification</b></font></td>
<td style="width: 20%; border-bottom: black 1pt solid; text-align: center; line-height: 115%"><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="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="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="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="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="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/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: 0.25in">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/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">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/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">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/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: top">
<td style="width: 7%; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Level 1:</font></td>
<td style="width: 93%; text-align: justify; line-height: 115%"><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="line-height: 115%"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: top">
<td style="text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Level 2:</font></td>
<td style="text-align: justify; line-height: 115%"><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: center; line-height: 115%"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: top">
<td style="text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Level 3:</font></td>
<td style="text-align: justify; line-height: 115%"><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/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: 0.25in">The Company's financial
liabilities measured at fair value on December 31, 2013 and 2012 consists solely 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/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: 0.25in">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, 2013, 2012 and 2011.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">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/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">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/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">The estimated fair
value of the Company’s financial instruments, which include cash and cash equivalents, restricted cash, accounts payable
and capital lease obligation, approximates their carrying value due to the short-term nature of these instruments and their market
terms.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">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/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">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 diagnostic medical devices and specialty pharmaceutical drugs. As of December 31, 2013 and 2012,
all of the Company’s assets were located in the United States.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">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/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">The Company is
primarily subject to U.S. federal, Massachusetts, Pennsylvania and New Jersey state income tax. Tax years subsequent to 2010 remain
open to examination by U.S. federal and state tax authorities.</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: 0.25in">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/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: 0.25in">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 were no uncertain tax position liabilities recorded at December 31, 2013 and 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"></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">The Company’s
policy is to recognize interest and penalties related to income tax matters in income tax expense. As of December 31, 2013 and
2012, the Company had no accruals for interest or penalties related to income tax matters.</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: 0.25in">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/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: 0.5in">·</td><td>persuasive evidence of an arrangement exists;</td></tr></table>
<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: 0.5in">·</td><td>delivery has occurred and risk of loss has passed;</td></tr></table>
<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: 0.5in">·</td><td>the price to the buyer is fixed or determinable; and</td></tr></table>
<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: 0.5in">·</td><td>collectability is reasonably assured.</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-align: justify; text-indent: 0.25in">From time to time,
the Company 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/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: 0.25in">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/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">In July 2013, the
FASB issued Accounting Standards Update ("ASU") No. 2013-11, <i>Income Taxes (Topic 740): Presentation of an Unrecognized
Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists</i> to clarify the
balance sheet presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax
credit carryforward exists. It was issued to resolve the diversity in practice that had developed in the absence of any on-point
U.S. GAAP guidance. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15,
2013. Early adoption is permitted. The amendments should be applied prospectively to all unrecognized tax benefits that exist at
the effective date. Retrospective application is permitted. The Company is currently assessing its adoption plans.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">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="width: 100%; font: 10pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<tr style="vertical-align: top">
<td style="width: 80%; border-bottom: black 1pt solid; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Asset Classification</b></font></td>
<td style="width: 20%; border-bottom: black 1pt solid; text-align: center; line-height: 115%"><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="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="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="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="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="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/normal Times New Roman, Times, Serif; margin: 0"> </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: 0.25in">As of December
31, 2013, the Company held approximately $8,055,000 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: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">The Company’s
intangible assets are related to the acquisition of assets from Durham Pharmaceuticals Ltd. in 2007.  As of December
31, 2013 and 2012, intangible assets related to the ETI 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="text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><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"><b>Accumulated</b></font></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"><b>2013</b></font></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"><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="border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Life</b></font></td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-indent: 14pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><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"><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"><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"><b>Net</b></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">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: white">
<td style="width: 44%; padding-right: 5.05pt; padding-left: 0.25in; text-indent: -9pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Cato Research discounted contract</font></td>
<td style="width: 9%; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">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">$</font></td>
<td style="width: 8%; border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">355,000</font></td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 2%; border-bottom: black 1pt solid; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 10%; border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">355,000</font></td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; border-bottom: black 1pt solid; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 8%; border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">—</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">$</font></td>
<td style="width: 8%; border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td>
<td style="width: 1%; 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">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: 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">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">4 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">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">—</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">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">1,305,000</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">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">4 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">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">—</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">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">1,500,000</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">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">4 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">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">—</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">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">6,820,000</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: 0.25in; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">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">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">—</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">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">9,625,000</font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-right: 5.05pt; text-indent: 0.75in; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">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">$</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">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">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">355,000</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</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">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">$</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">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"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">Intangible assets
related to technology are expected to be amortized on a straight-line basis over the period ending in September 2019, when the
underlying patents expire, and will commence upon revenue generation which the Company estimates may occur as early as the beginning
of 2016.</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: 0.25in">The Cato Research
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 $84,000 for the year ended December 31, 2010 and is included in research and
development in the Consolidated Statement of Operations.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">Estimated amortization
expense for each of the next five years is as follows:</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%; font: 10pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="padding-bottom: 1.5pt">
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><b> </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><b> </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p></td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid">
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Estimated</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Amortization</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 4.1pt"><b>Expense</b></p></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 89%; text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">2014</font></td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 8%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">—</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">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">—</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">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">2,406,000</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">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">2,406,000</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">2018</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">2,406,000</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/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">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/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: 0.25in">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"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">The Company also
leases a corporate apartment in Franklin, Massachusetts through November 21, 2014 (with the right to early termination) and a corporate
apartment in Philadelphia, Pennsylvania on a month-to-month basis.</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"></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">Future minimum
lease payments for each of the next five years under these operating leases at December 31, 2013 are approximately 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"><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"><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"><b>Total</b></font></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">Year Ending December 31,</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: white">
<td style="width: 67%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">2014                                                                      </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">$</font></td>
<td style="width: 8%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">439,000</font></td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 8%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">191,000</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">$</font></td>
<td style="width: 8%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">630,000</font></td>
<td style="width: 1%; 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">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">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">191,000</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">635,000</font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">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">455,000</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">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">651,000</font></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">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">382,000</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">82,000</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">464,000</font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">2018                                                                      </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">—</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">—</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">—</font></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">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">$</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">1,720,000</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">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">660,000</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</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">2,380,000</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/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">The Company’s
facilities lease expense was approximately $677,000, $339,000 and $224,000 for the years ended December 31, 2013, 2012 and 2011,
respectively.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">Future minimum
lease payments for each of the next five years under these operating leases at December 31, 2013 are approximately 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"><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"><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"><b>Total</b></font></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">Year Ending December 31,</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: white">
<td style="width: 67%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">2014                                                                      </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">$</font></td>
<td style="width: 8%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">439,000</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">$</font></td>
<td style="width: 8%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">191,000</font></td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 8%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">630,000</font></td>
<td style="width: 1%; 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">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">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">191,000</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">635,000</font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">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">455,000</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">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">651,000</font></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">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">382,000</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">82,000</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">464,000</font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">2018                                                                      </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">—</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">—</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">—</font></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">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">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">1,720,000</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</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">660,000</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">$</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">2,380,000</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/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">Estimated amortization
expense for each of the next five years 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="padding-bottom: 1.5pt">
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><b> </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; 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" style="border-bottom: black 1pt solid">
<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; text-indent: 4.1pt"><b>Expense</b></p></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 89%; text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">2014</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">$</font></td>
<td style="width: 8%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">—</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">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">—</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">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">2,406,000</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">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">2,406,000</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">2018</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">2,406,000</font></td>
<td style="line-height: 115%"> </td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">As of December
31, 2013 and 2012, intangible assets related to the ETI 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="text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><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"><b>Accumulated</b></font></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"><b>2013</b></font></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"><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="border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Life</b></font></td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-indent: 14pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><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"><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"><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"><b>Net</b></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">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: white">
<td style="width: 44%; padding-right: 5.05pt; padding-left: 0.25in; text-indent: -9pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Cato Research discounted contract</font></td>
<td style="width: 9%; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">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">$</font></td>
<td style="width: 8%; border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">355,000</font></td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 2%; border-bottom: black 1pt solid; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</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">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">$</font></td>
<td style="width: 8%; border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; border-bottom: black 1pt solid; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 8%; border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td>
<td style="width: 1%; 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">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: 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">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">4 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">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">—</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">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">1,305,000</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">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">4 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">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">—</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">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">1,500,000</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">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">4 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">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">—</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">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">6,820,000</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: 0.25in; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">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">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">—</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">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">9,625,000</font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-right: 5.05pt; text-indent: 0.75in; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">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">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">9,980,000</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</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">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">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">9,625,000</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</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">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-align: justify; text-indent: 0.25in">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.  As a result of the Company's 2013 financing transactions, this Credit Facility is currently only available
at Montaur's discretion.</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: 0.25in">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 will have 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"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">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: 0.25in">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 was reflected in Current Assets, representing the portion to be amortized
over the next twelve months. Amortization of the deferred financing cost for the year ended December 31, 2013 was $968,004 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; text-indent: 0.5in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">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.  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 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 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"> </p>
<p style="font: 10pt/normal 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 $2,879,166 in 2013 relating to the unamortized
debt discount on the outstanding draws paid off.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">Derivative financial
instruments are recognized as a liability on the consolidated balance sheet and measured at fair value.</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: 0.25in">At December 31,
2013 and 2012, the Company had outstanding warrants to purchase 1,209,211 and 1,254,004 shares of its common stock, respectively.
Included in these outstanding warrants at December 31, 2013 and 2012 are warrants to purchase 700,000 and 736,015 shares, respectively,
that are considered to be derivative instruments. The fair value of these derivative instruments at December 31, 2013 and 2012
was approximately $1,119,000 and $5,585,000, 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, 2013, 2012 and 2011 resulted in a gain (loss) of approximately $4,466,000, $3,684,000 and $(1,763,000),
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: 0.25in">The primary underlying
risk exposure pertaining to the warrants is the change in fair value of the underlying common stock for each reporting period.  There
were no warrants exercised in 2013 or 2012 pursuant to cashless exercise provisions.</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: 0.25in">For the year ended
December 31, 2013 there were no derivative warrants exercised.  For the year ended December 31, 2012, derivative warrants
to purchase 165,451 shares were exercised and certain anti-dilution rights were waived which resulted in a reclassification to
additional paid-in capital in the amount of approximately $62,000.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">The table below presents the changes in the derivative warrant
liability, which is measured at fair value on a recurring basis and classified as Level 3 in fair value hierarchy (see Note 2):</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%; font: 10pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>2013</b></font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>2012</b></font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 78%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Derivative warrant liability as of January 1</font></td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 8%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">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">$</font></td>
<td style="width: 8%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">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">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">—</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">8,295,000</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">Total unrealized losses included in net loss </font><font style="font: 7pt Times New Roman, Times, Serif">(1)</font><font style="font: 10pt Times New Roman, Times, Serif">	</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">1,671,682</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">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">Total realized losses included in net loss </font><font style="font: 7pt Times New Roman, Times, Serif">(1)</font><font style="font: 10pt Times New Roman, Times, Serif">	</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">—</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">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">Total unrealized gains included in net loss </font><font style="font: 7pt Times New Roman, Times, Serif">(1)</font><font style="font: 10pt Times New Roman, Times, Serif">	</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">(5,985,000</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</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">(4,077,433</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</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">Total realized gains included in net loss </font><font style="font: 7pt Times New Roman, Times, Serif">(1)</font><font style="font: 10pt Times New Roman, Times, Serif">	</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">(152,668</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</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">(107,681</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 1.5pt">
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 2.15pt 0 27pt; text-indent: 9pt; background-color: #CCEEFF">Reclassification
of liability to additional paid-in capital</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 2.15pt 0 0.75in; text-indent: -9pt; background-color: #CCEEFF">for
warrants</p></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">—</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">(61,520</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Derivative warrant liability as of December 31</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">$</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">1,119,155</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">$</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">5,585,141</font></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">________________________</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></tr>
<tr style="vertical-align: bottom; background-color: white">
<td colspan="8" style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(1)	Included in gain or 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/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">The table below
presents the changes in the derivative warrant liability, which is measured at fair value on a recurring basis and classified as
Level 3 in fair value hierarchy (see Note 2):</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"><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"><b>2012</b></font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 78%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">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">$</font></td>
<td style="width: 8%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">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">$</font></td>
<td style="width: 8%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">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">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">—</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">8,295,000</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">Total unrealized losses included in net loss </font><font style="font: 7pt Times New Roman, Times, Serif">(1)</font><font style="font: 10pt Times New Roman, Times, Serif">	</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">1,671,682</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">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">Total realized losses included in net loss </font><font style="font: 7pt Times New Roman, Times, Serif">(1)</font><font style="font: 10pt Times New Roman, Times, Serif">	</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">—</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">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">Total unrealized gains included in net loss </font><font style="font: 7pt Times New Roman, Times, Serif">(1)</font><font style="font: 10pt Times New Roman, Times, Serif">	</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">(5,985,000</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</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">(4,077,433</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</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">Total realized gains included in net loss </font><font style="font: 7pt Times New Roman, Times, Serif">(1)</font><font style="font: 10pt Times New Roman, Times, Serif">	</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">(152,668</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</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">(107,681</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-bottom: 1.5pt">
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 2.15pt 0 27pt; text-indent: 9pt; background-color: #CCEEFF">Reclassification
of liability to additional paid-in capital</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 2.15pt 0 0.75in; text-indent: -9pt; background-color: #CCEEFF">for
warrants</p></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">—</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">(61,520</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Derivative warrant liability as of December 31</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">$</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">1,119,155</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">$</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">5,585,141</font></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">________________________</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></tr>
<tr style="vertical-align: bottom; background-color: white">
<td colspan="8" style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(1)	Included in gain or 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/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">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"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><b><i>Series B Perpetual Redeemable Preferred Stock and Warrant
Financing</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-align: justify; text-indent: 0.25in">The Company had
authorized 40,000 shares of non-convertible Series B Perpetual Preferred Stock, $0.01 par value (“Series B Stock”).  In
October 2011 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
value of $1,701.672.  As a part of the exchange, the Company issued an aggregate of 1,830.895 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/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 C Convertible Preferred
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-align: justify; text-indent: 0.25in">The Company has
authorized 10,000 shares of Series C Stock, of which 1,000 and 9,974.185 shares were issued and outstanding as of December 31,
2013 and 2012, respectively.  The Series C Stock was created on June 30, 2009.</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">Key terms of the Series C Stock are
as follows:</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: 0.5in">·</td><td>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 convertible into 100 shares of Common Stock, subject to adjustment for stock
splits, combinations or similar events.</td></tr></table>
<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: 0.5in">·</td><td>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/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: 0.5in">·</td><td>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/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: 0.25in">On December 23,
2013, an investor converted 8,974.185 shares of Series C Stock into 897,419 shares of Common Stock.</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"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">The Company has
authorized 3,600,000 shares of Series D Preferred Stock (the “Series D Stock”), of which 1,000,000 and 3,006,000 shares
were issued and outstanding as of December 31, 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">Key terms of the Series D Stock are
as follows:</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: 0.5in">·</td><td>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 convertible into shares of Common Stock at a price per share equal to $1.00, 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/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: 0.5in">·</td><td>Each holder who receives Series D Stock may convert it at any time following its issuance.</td></tr></table>
<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: 0.5in">·</td><td>The Series D Stock does not pay a dividend and is not redeemable.</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-align: justify; text-indent: 0.25in">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 $10.00. 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 5,000 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/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: 0.25in">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/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: 0.25in">The Company issued
an aggregate of 175,300 Series D-1 Warrants and 175,300 Series D-2 Warrants to the Series D Investors pursuant to the Series D
Agreement. The Series D Warrants are immediately exercisable and were to expire on February 7, 2013; however, since the Series
D Warrants were not exercised in full by February 7, 2013 by virtue of the application of a beneficial ownership “blocker”,
the term of the Series D Warrants were 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/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: 0.25in">In connection with
the 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/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: 0.25in">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/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"> </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: 0.25in">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"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">On December 19,
2013, an investor converted 2,006,000 shares of Series D Stock into 200,600 shares of Common Stock.</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 E Convertible Preferred
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-align: justify; text-indent: 0.25in">The Company has
authorized 1,748,613 shares of Series E Stock, all of which were issued and outstanding as of December 31, 2013. The Series E Stock
was created on December 10, 2013 in connection with the private placement of common stock, preferred stock and warrants with certain
Montaur-related entities (see Note 9 for description of this transaction).</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">Key terms of the Series E Stock are
as follows:</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: 0.5in">·</td><td>Pursuant to the terms of the Certificate of Designation, Preference and Rights of Series E Preferred Stock (the “Series
E Certificate”), each share of Series E Stock is initially convertible into one share of Common Stock, subject to adjustment
for stock splits, combinations or similar events.</td></tr></table>
<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: 0.5in">·</td><td>Each holder who receives Series E Stock may convert its Series E Stock at any time following its issuance.</td></tr></table>
<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: 0.5in">·</td><td>In the event of any Liquidation Event (as defined in the Series E Certificate), the holders of Series E Stock will be entitled
to receive (subject to the rights of any securities designated as senior to the Series E 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 E 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 E 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 E Stock.</td></tr></table>
<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: 0.5in">·</td><td>The Series E Stock does not pay a dividend and is not redeemable.</td></tr></table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">The Company has
authorized 150,000,000 shares of Common Stock, $0.01 par value per share, of which 11,776,578 and 4,437,346 shares were issued
and outstanding as of December 31, 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>November 2010 Financings</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-align: justify; text-indent: 0.25in">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”). 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.</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: 0.25in">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.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>December 2011 Financing</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-align: justify; text-indent: 0.25in">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  95,958 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 became 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.</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>December 2012 Financings</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-align: justify; text-indent: 0.25in">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.</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: 0.25in">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
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.</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"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">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 several underwriters, with respect to the issuance and sale in an underwritten
public offering by the Company of an aggregate 1,567,855 shares of the Company’s Common Stock, at a price to the public of
$7.50 per share (including 204,500 shares sold pursuant to the over-allotment option).  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 Montaur in connection with the Credit Facility (see Note 6).  The
note will mature on August 31, 2017.  As of March 1, 2013, the entire balance under the note that was paid off was $3,113,366,
which included $3,000,000 of principal and $113,366 of accrued and unpaid interest.</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"><b><i>June 2013 Common Stock and Warrants Financing</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-align: justify; text-indent: 0.25in">On June 13, 2013,
the Company entered into an underwriting agreement with Aegis Capital Corp., 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>December 2013 Common Stock, Preferred
Stock and Warrant Financing</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-align: justify; text-indent: 0.25in">In December 2013,
in connection with a licensing transaction, the Company entered into (i) a Securities Purchase Agreement with Platinum Partners
Value Arbitrage Fund L.P. (“Platinum Value”) and Platinum Partners Liquid Opportunity Master Fund L.P. (“Platinum
Liquid”, and together with Platinum Value, the “Platinum Partners”) (the “Platinum Securities Purchase
Agreement”) and (ii) a Securities Purchase Agreement with Medical Technologies Innovation Asia, LTD. (“MTIA”)
and Beijing Sino Tau Shang Pin Tech and Development Corp. (“MTIA Affiliate”, and together with MTIA, the “China
Purchasers”) (the “MTIA Securities Purchase Agreement”, and together with the Platinum Securities Purchase Agreement,
the “Securities Purchase Agreements”).</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">Pursuant to the
Platinum Securities Purchase Agreement, the Platinum Partners purchased an aggregate of 1,818,182 of the Company’s capital
stock.  Of that total, Platinum Partners purchased 69,569 shares of the Company’s Common Stock at $2.75 per share,
being a premium to the NASDAQ closing price of $2.71 per share on December 9, 2013.  In addition, the Platinum Partners
purchased a total of 1,748,613 shares of Series E Preferred Stock (“Preferred Stock”) at a purchase price of $2.75
per share, which, under certain conditions, are exchangeable into shares of the Company’s Common Stock on a one-for-one basis.  The
conversion of Preferred Stock into shares of Common Stock, however, is subject to a restriction, which prohibits the conversion
of shares of Preferred Stock if the number of shares of Common Stock to be issued pursuant to such conversion would exceed, when
aggregated with all other shares of Common Stock owned by the Platinum Partners and their affiliates at such time, the number of
shares of Common Stock which would result in Platinum Partners and their affiliates beneficially owning in excess of 19.99% of
all of the Company’s Common Stock outstanding at such time.  Under the terms of the Platinum Securities Purchase
Agreement, the Platinum Partners also received 181,818 warrants, having a five-year term and an exercise price of $2.75 per warrant.  The
warrants are exercisable six months and one day following the issuance date thereof.  Under the terms of the Platinum
Securities Purchase Agreement, the Company has, at the request of the Platinum Partners, agreed to prepare a proxy statement and
seek shareholder approval of the issuance of the Common Stock underlying the Preferred Stock and the warrants.  The Company
received gross proceeds of $5,000,000 from the sale of the securities to the Platinum Partners on December 10, 2013 and incurred
issuance costs of $100,000.</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; text-indent: 0.25in">In
connection with the issuance of this Series E Preferred Stock, the conversion feature of Series E 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 its
relative fair value resulting from the offering of $371,140. This deemed dividend is included in the 2013 Consolidated
Statement of Operations in arriving at the Net Loss Applicable to Common Shareholders.</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: 0.25in">Under the MTIA
Securities Purchase Agreement, the China Purchasers agreed to purchase a total of 1,818,182 shares of the Company’s Common
Stock also at $2.75 per share.  The China Purchasers also will receive 181,818 warrants, having a five-year term and
an exercise price of $2.75.  The warrants to be issued to the China Purchasers are also exercisable six months and one
day following the issue date.</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; text-indent: 0.25in">As of December
31, 2013, the Company had not received the full proceeds of the sale of the securities from the China Purchasers due to administrative
issues that the China Purchasers encountered in transferring funds to the Company and the parties have extended the due date of
receipt of all such proceeds past December 12, 2013.  If the Company does not receive the proceeds
by the extended due date, then the Company has the right to terminate the MTIA Securities Purchase Agreement and the related license,
development and commercialization agreement, unless such date is extended again by mutual written consent.  As of December
31, 2013, the Company had correspondingly not issued the shares or recorded the MTIA transaction due to the contingent nature
of this transaction.  As of March 26, 2014, the Company has received $1,904,793 of MTIA’s $5,000,000 in proceeds
in accordance with the MTIA Securities Purchase Agreement.</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: 0.25in">The Company intends
to use the proceeds of the sale of these securities for working capital and other general corporate purposes.</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: 0.25in">Further, pursuant
to the Platinum Securities Purchase Agreement and subject to certain conditions, the Company agreed to nominate and use its reasonable
best efforts to cause to be elected and cause to remain as a director on the Company’s board of directors (the “Board”)
until the Company’s 2014 annual meeting of stockholders, one individual designated by the Platinum Partners (“Platinum
Partners Designee”).  Additionally, subject to certain conditions, the Company agreed to nominate, and solicit
for election by the stockholders, the Platinum Partners Designee at the Company’s 2014 annual meeting of stockholders.  Under
the terms of the MTIA Securities Purchase Agreement, as amended, upon the Company’s receipt of all of the proceeds from the
China Purchasers, the Company will allow one individual designated by the China Purchasers to attend meetings of the Board as an
observer until the date of the 2015 annual meeting of stockholders.</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: 0.25in">So long as the
Platinum Partners hold at least ten percent (10%) of the outstanding Common Stock, they have a right, subject to certain conditions,
to purchase debt or equity securities of any kind that the Company may determine to issue in the future.  The China Purchasers
have the same right.  This subscription right terminates upon a consolidation, merger, restructuring, reorganization,
recapitalization or other form of acquisition of or by the Company that results in a change of control.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">The Platinum Partners
and the China Purchasers are also entitled to certain 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-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"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">During the years
ended December 31, 2013, 2012 and 2011, the Company issued 9,122, 9,533 and 13,800 shares of Common Stock, respectively, with a
fair value of $96,375, $153,464 and $448,940, 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.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">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, 2013, there were 12,500 restricted shares of Common
Stock issued and options to purchase an aggregate of 44,000 shares of Common Stock outstanding under the 2003 Plan and no shares
are available for future grants due to the 2003 Plan’s expiration.</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: 0.25in">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 December 31, 2013, there were restricted shares of Common Stock
issued and options to purchase an aggregate of 1,489,102 shares of Common Stock outstanding under the 2008 Plan and 8,450,142 shares
available for future grants.</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: 0.25in">The tables below
show the remaining shares available for future grants for each plan and the outstanding shares.</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="6" style="border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Equity Compensation Plans</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></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"><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"><b>2008 Plan</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></tr>
<tr style="vertical-align: bottom">
<td style="border-bottom: black 1pt solid; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><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="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: 9pt; text-indent: -9pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">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">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">10,000,000</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></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-indent: 0.25in; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">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">(12,500</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</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">(192,843</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></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="text-indent: 0.25in; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">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">(154,449</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</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">(1,512,933</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></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="text-indent: 0.25in; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">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">74,849</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">155,918</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></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">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">(67,900</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</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">-</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></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Remaining shares available for future grants at December 31, 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">-</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">8,450,142</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></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="3" style="border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Not Pursuant to a Plan</b></font></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">Stock options granted</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">154,449</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%"> </td>
<td style="width: 8%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">1,512,933</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%"> </td>
<td style="width: 8%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">310,000</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">Less:Stock options cancelled</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">(74,849</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</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">(155,819</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</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">(138,333</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-indent: 27pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">   Stock options 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">(35,600</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</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">(13,000</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</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">(66,667</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</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">Net shares outstanding before 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">44,000</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">1,344,015</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">105,000</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">Net restricted stock issued net of cancellations</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">12,500</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">192,843</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">6,485</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">Outstanding shares at December 31, 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">56,500</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">1,536,858</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">111,485</font></td>
<td style="line-height: 115%"> </td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">The tables below
show the remaining shares available for future grants for each plan and the outstanding shares.</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="6" style="border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Equity Compensation Plans</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></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"><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"><b>2008 Plan</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></tr>
<tr style="vertical-align: bottom">
<td style="border-bottom: black 1pt solid; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><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="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: 9pt; text-indent: -9pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">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">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">10,000,000</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></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-indent: 0.25in; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">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">(12,500</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</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">(192,843</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></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="text-indent: 0.25in; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">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">(154,449</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</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">(1,512,933</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></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="text-indent: 0.25in; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">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">74,849</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">155,918</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></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">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">(67,900</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</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">-</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></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Remaining shares available for future grants at December 31, 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">-</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">8,450,142</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></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="3" style="border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Not Pursuant to a Plan</b></font></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">Stock options granted</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">154,449</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%"> </td>
<td style="width: 8%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">1,512,933</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%"> </td>
<td style="width: 8%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">310,000</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">Less:Stock options cancelled</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">(74,849</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</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">(155,819</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</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">(138,333</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-indent: 27pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">   Stock options 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">(35,600</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</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">(13,000</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</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">(66,667</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</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">Net shares outstanding before 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">44,000</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">1,344,015</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">105,000</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">Net restricted stock issued net of cancellations</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">12,500</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">192,843</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">6,485</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">Outstanding shares at December 31, 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">56,500</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">1,536,858</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">111,485</font></td>
<td style="line-height: 115%"> </td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">For options issued
and outstanding during the years ended December 31, 2013, 2012 and 2011, the Company recorded additional paid-in capital and non-cash
compensation expense of $714,547, $938,537 and $836,866, 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-align: justify; text-indent: 0.25in">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/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: 0.25in">The assumptions
used principally for options granted to employees in the years ended December 31, 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-indent: 24.05pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><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-indent: 24.05pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>2012</b></font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 78%; text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">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: 8%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">0.10% - 2.71</font></td>
<td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td>
<td style="width: 1%; text-align: right; 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">0.92% - 2.05</font></td>
<td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</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">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">—</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">—</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">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">1-10 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">6.5 years</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">Forfeiture rate (excluding fully vested 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">15</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</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">15</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</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">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">129% - 141</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</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">131% - 142</font></td>
<td style="line-height: 115%"><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-align: justify; text-indent: 0.25in">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,
2013 and changes during the year then ended 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%; 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"><b> </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><b> </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><b> </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><b> </b></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-align: center; text-indent: 0.5in"><b>  </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in"><b> </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in"><b> </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in"><b> </b></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; text-indent: 0.5in"><b>  </b></p>
<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; text-indent: 6.5pt"><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; text-indent: 1.5pt"><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; text-indent: 9.25pt"><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-align: center; text-indent: 0.5in"><b>  </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in"><b> </b></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; text-indent: 2.55pt"><b>Intrinsic</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 10.3pt"><b>Value</b></p></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">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">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">$</font></td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">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="text-indent: 0.25in; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">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">1,264,432</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">3.05</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="text-indent: 0.25in; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">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">—</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">—</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="text-indent: 0.25in; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">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">(152,334</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</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">11.72</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: 54%; text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Outstanding at December 31, 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">1,455,432</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">$</font></td>
<td style="width: 9%; border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">4.90</font></td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 10%; border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">3.99 years</font></td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</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">81,085</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">Exercisable at December 31, 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">230,842</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">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">11.37</font></td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">3.99 years</font></td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</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">81,085</font></td>
<td style="line-height: 115%"> </td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-size: 10pt"> </font></p>
<p style="margin: 0; text-align: justify; text-indent: 20pt"><font style="font-size: 10pt">The weighted-average grant-date fair value of options granted during the year
ended December 31, 2013 was $3.05 per share. As of December 31, 2013, there was approximately $891,000 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.</font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">The assumptions
used principally for options granted to employees in the years ended December 31, 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-indent: 24.05pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><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-indent: 24.05pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>2012</b></font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 78%; text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">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: 8%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">0.10% - 2.71</font></td>
<td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td>
<td style="width: 1%; text-align: right; 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">0.92% - 2.05</font></td>
<td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</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">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">—</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">—</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">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">1-10 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">6.5 years</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">Forfeiture rate (excluding fully vested 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">15</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</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">15</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</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">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">129% - 141</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</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">131% - 142</font></td>
<td style="line-height: 115%"><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-align: justify; text-indent: 0.25in"></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">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,
2013 and changes during the year then ended 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%; 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"><b> </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><b> </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><b> </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><b> </b></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-align: center; text-indent: 0.5in"><b>  </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in"><b> </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in"><b> </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in"><b> </b></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; text-indent: 0.5in"><b>  </b></p>
<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; text-indent: 6.5pt"><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; text-indent: 1.5pt"><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; text-indent: 9.25pt"><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-align: center; text-indent: 0.5in"><b>  </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in"><b> </b></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; text-indent: 2.55pt"><b>Intrinsic</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 10.3pt"><b>Value</b></p></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">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">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">$</font></td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">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="text-indent: 0.25in; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">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">1,264,432</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">3.05</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="text-indent: 0.25in; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">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">—</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">—</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="text-indent: 0.25in; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">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">(152,334</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</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">11.72</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: 54%; text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Outstanding at December 31, 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">1,455,432</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">$</font></td>
<td style="width: 9%; border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">4.90</font></td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 10%; border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">3.99 years</font></td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</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">81,085</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">Exercisable at December 31, 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">230,842</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">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">11.37</font></td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">3.99 years</font></td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</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">81,085</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/normal Times New Roman, Times, Serif; margin: 0 0 0 9pt"><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-align: justify; text-indent: 0.25in">For restricted
stock issued and outstanding during the years ended December 31, 2013, 2012 and 2011, the Company incurred non-cash compensation
expense of $529,795, $574,024 and $323,463, 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-align: justify; text-indent: 0.25in">As of December
31, 2013, the Company had outstanding restricted stock grants of 201,655 shares with a weighted-average grant-date value of $10.66.  A
summary of the status of the Company’s non-vested restricted stock grants as of December 31, 2013, and changes during the
year ended December 31, 2013 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%; 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"><b>Restricted Stock</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-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: 78%; text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Non-vested shares 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">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">$</font></td>
<td style="width: 8%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">17.84</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">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">132,710</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">$</font></td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">4.44</font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Vested</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(47,580</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">16.41</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">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">(199,519</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">16.34</font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Non-vested shares at December 31, 2013</font></td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">201,655</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">10.66</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/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">Of the 201,655
shares of non-vested restricted stock, the vesting criteria are as follows:</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>54,510 shares of restricted stock vest upon the FDA approval of Symphony or the sale of the Company; 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>147,145 shares of restricted stock vest over 4 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: 0.25in">As of December
31, 2013, there was approximately $902,000 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, 2013, 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="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 9pt">A summary of the status of the Company’s non-vested
restricted stock grants as of December 31, 2013, and changes during the year ended December 31, 2013 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%; 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"><b>Restricted Stock</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-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: 78%; text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Non-vested shares 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">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">$</font></td>
<td style="width: 8%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">17.84</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">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">132,710</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">$</font></td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">4.44</font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Vested</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(47,580</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">16.41</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">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">(199,519</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">16.34</font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Non-vested shares at December 31, 2013</font></td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">201,655</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">10.66</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/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">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%; 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"><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"><b>2012</b></font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 78%; text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">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: 8%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">0.65% - 1.85</font></td>
<td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td>
<td style="width: 1%; text-align: right; 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">0.70% - 2.23</font></td>
<td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</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">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">—</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">—</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">Expected term (contractual 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">0.33 - 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">0.06 - 5 years</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">Forfeiture rate</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">—</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">—</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">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">122% - 123</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</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">123% - 144</font></td>
<td style="line-height: 115%"><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-align: justify; text-indent: 0.25in">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-align: justify; text-indent: 0.25in">In the year ended
December 31, 2012, the Company issued warrants with a fair value of approximately $8,655,000.  Included in this warrant
fair value are warrants with a fair value of approximately $4,840,000 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. The warrants issued in the years
ended December 31, 2012 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-align: justify; text-indent: 0.25in">In the year ended
December 31, 2013, the Company issued warrants with a relative fair value of $371,140 in connection with a private placement of
the Company’s Common Stock and Series E Preferred Stock with Montaur-related entities (See Note 9).</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: 0.25in">At December 31,
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">
<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>Date of</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Expiration</b></p></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><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: white">
<td style="width: 64%; text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">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">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">$</font></td>
<td style="width: 10%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">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">8/31/2017</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">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">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">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">9/20/2017</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">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">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">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">10/17/2017</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">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">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">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">11/6/2017</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-indent: 0.25in; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">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">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: #CCEEFF">
<td style="text-indent: 0.25in; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">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">$</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">20.61</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="text-indent: 0.25in; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">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">3.72 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="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><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: #CCEEFF">
<td style="text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">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">39,000</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">$</font></td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">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">2/28/2014</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">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">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">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">3/15/2014</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">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">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">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">6/30/2014</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">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">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">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">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">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">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">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">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">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">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">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">12/3/2014</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">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">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">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">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">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">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">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">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">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">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">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">3/18/2015</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">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">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">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">12/7/2014</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Granted to investors in private placement of common and preferred stock</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">181,818</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">2.75</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">12/10/18</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">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">509,211</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: 0.25in; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">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">$</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">14.21</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: 0.25in; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">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">2.26 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"><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">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">1,209,211</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: 0.25in; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">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">$</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">17.92</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: 0.25in; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">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">3.11 years</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-align: justify; text-indent: 0.25in">A summary of warrant
activity in the year ended December 31, 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"><b> </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><b> </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><b> </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><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: center; text-indent: 0.5in"><b>  </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in"><b> </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in"><b> </b></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></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 78%; text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">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">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">$</font></td>
<td style="width: 8%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">20.08</font></td>
<td style="width: 1%; line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-indent: 27pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Granted</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">190,993</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">3.22</font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-indent: 27pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">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">—</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">$</font></td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-indent: 27pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Forfeited or expired</font></td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(235,786</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">17.36</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">Outstanding at December 31, 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">1,209,211</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">$</font></td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">17.92</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/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-align: justify; text-indent: 0.25in">During 2013, there
were no warrants exercised.  During 2012, warrants to purchase 16,545 shares of Common Stock were exercised, resulting
in cash proceeds to the Company of approximately $212,000.  During 2011, warrants to purchase 141,947 shares of Common
Stock were exercised through cashless exercises provisions, resulting in the issuance of 74,424 shares of Common Stock.  During
2011, warrants to purchase 661,530 shares of Common Stock were 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 454,893 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: 0.25in">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%; 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"><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"><b>2012</b></font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 78%; text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">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: 8%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">0.65% - 1.85</font></td>
<td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td>
<td style="width: 1%; text-align: right; 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">0.70% - 2.23</font></td>
<td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</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">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">—</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">—</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">Expected term (contractual 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">0.33 - 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">0.06 - 5 years</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">Forfeiture rate</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">—</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">—</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">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">122% - 123</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</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">123% - 144</font></td>
<td style="line-height: 115%"><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-align: justify; text-indent: 0.25in">At December 31,
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">
<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>Date of</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Expiration</b></p></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><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: white">
<td style="width: 64%; text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">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">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">$</font></td>
<td style="width: 10%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">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">8/31/2017</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">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">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">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">9/20/2017</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">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">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">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">10/17/2017</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">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">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">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">11/6/2017</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-indent: 0.25in; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">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">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: #CCEEFF">
<td style="text-indent: 0.25in; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">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">$</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">20.61</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="text-indent: 0.25in; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">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">3.72 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="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><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: #CCEEFF">
<td style="text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">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">39,000</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">$</font></td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">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">2/28/2014</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">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">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">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">3/15/2014</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">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">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">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">6/30/2014</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">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">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">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">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">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">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">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">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">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">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">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">12/3/2014</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">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">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">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">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">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">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">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">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">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">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">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">3/18/2015</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">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">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">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">12/7/2014</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Granted to investors in private placement of common and preferred stock</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">181,818</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">2.75</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">12/10/18</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">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">509,211</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: 0.25in; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">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">$</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">14.21</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: 0.25in; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">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">2.26 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"><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">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">1,209,211</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: 0.25in; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">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">$</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">17.92</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: 0.25in; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">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">3.11 years</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-align: justify; text-indent: 0.25in"></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">A summary of warrant
activity in the year ended December 31, 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"><b> </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><b> </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><b> </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><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: center; text-indent: 0.5in"><b>  </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in"><b> </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in"><b> </b></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></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 78%; text-indent: 12pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">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">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">$</font></td>
<td style="width: 8%; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">20.08</font></td>
<td style="width: 1%; line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-indent: 27pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Granted</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">190,993</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">3.22</font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-indent: 27pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">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">—</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">$</font></td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-indent: 27pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Forfeited or expired</font></td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">(235,786</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">17.36</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">Outstanding at December 31, 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">1,209,211</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">$</font></td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">17.92</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/normal Times New Roman, Times, Serif; margin: 0"> </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: 0.25in">Significant components
of the Company’s net deferred tax asset 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="6" style="border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>December 31,</b></font></td>
<td 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-indent: 18.75pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><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-indent: 18.75pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>2012</b></font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 78%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Deferred Tax Assets/(Liabilities):</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%"> </td>
<td style="width: 1%; line-height: 115%"> </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%"> </td>
<td style="width: 1%; line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-indent: 0.25in; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Net operating loss carryforwards</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">32,487,000</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">$</font></td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">24,428,000</font></td>
<td style="line-height: 115%"> </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">Research credit carryforwards</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">2,488,000</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">1,486,000</font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-indent: 0.25in; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Acquired intangible assets, net</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">(3,697,000</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</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">(3,724,000</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</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">Restricted stock and warrants</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">374,000</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">222,000</font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-indent: 0.25in; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Other temporary differences</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">207,000</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">219,000</font></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"> Total deferred tax assets, net</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">31,859,000</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">22,631,000</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">Valuation allowance</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">(31,859,000</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</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">(22,631,000</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</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">Net deferred tax asset</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">$</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">—</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">$</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">—</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/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">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/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="10" style="border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Years Ended December 31,</b></font></td>
<td 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-indent: 15.75pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><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-indent: 15.75pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>2012</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"><b>2011</b></font></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">Income taxes benefit (expense) at statutory rate</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">34.0</font></td>
<td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</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">34.0</font></td>
<td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</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">35.0</font></td>
<td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</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">State income tax, net of federal benefit</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">(4.4</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)%</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">(4.7</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)%</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">(2.2</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)%</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Permanent Differences:</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>
<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 style="padding-left: 0.25in; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Gain/loss or revaluation of derivative warrant liability</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">7.8</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</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">10.2</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</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">(6.2</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)%</font></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">Stock-based compensation expense</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">(1.3</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)%</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">(2.6</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)%</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">(2.9</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)%</font></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">Stock issues for services</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">—</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</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">—</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</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">(1.6</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)%</font></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">Other</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">(1.7</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)%</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">(2.2</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)%</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">—</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</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">R&D credits</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">(4.7</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)%</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">—</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</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">(0.6</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)%</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">Change in valuation allowance</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">(29.7</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)%</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">(34.7</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)%</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">(21.5</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)%</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<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%"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</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">—</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</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">—</font></td>
<td style="line-height: 115%"><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; text-align: justify; text-indent: 0.25in">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/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: 0.25in">At December 31,
2013, the Company had gross federal net operating loss carryforwards of approximately $89,600,000, which begin expiring in 2018.  The
Company had gross state net operating loss carryforwards of approximately $45,893,000, which begin expiring in 2014.  The
Company also had federal and state research and development tax credit carryforwards of approximately $2,488,000 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/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: 0.25in">Significant components
of the Company’s net deferred tax asset 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="6" style="border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>December 31,</b></font></td>
<td 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-indent: 18.75pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><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-indent: 18.75pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>2012</b></font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 78%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Deferred Tax Assets/(Liabilities):</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%"> </td>
<td style="width: 1%; line-height: 115%"> </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%"> </td>
<td style="width: 1%; line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-indent: 0.25in; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Net operating loss carryforwards</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">32,487,000</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">$</font></td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">24,428,000</font></td>
<td style="line-height: 115%"> </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">Research credit carryforwards</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">2,488,000</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">1,486,000</font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-indent: 0.25in; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Acquired intangible assets, net</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">(3,697,000</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</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">(3,724,000</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</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">Restricted stock and warrants</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">374,000</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">222,000</font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-indent: 0.25in; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Other temporary differences</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">207,000</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">219,000</font></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"> Total deferred tax assets, net</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">31,859,000</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">22,631,000</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">Valuation allowance</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">(31,859,000</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</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">(22,631,000</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)</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">Net deferred tax asset</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">$</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">—</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">$</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">—</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/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">The
Company has maintained a full valuation allowance against its deferred tax items in both 2013 and 2012. 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. In the years ended December 31, 2013 and 2012, the valuation allowance increased by $9,228,000 and $4,999,000, 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: 0.25in">The Company has
no uncertain tax positions as of December 31, 2013 and 2012 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/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">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/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="10" style="border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Years Ended December 31,</b></font></td>
<td 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-indent: 15.75pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><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-indent: 15.75pt; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>2012</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"><b>2011</b></font></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">Income taxes benefit (expense) at statutory rate</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">34.0</font></td>
<td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</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">34.0</font></td>
<td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</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">35.0</font></td>
<td style="width: 1%; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</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">State income tax, net of federal benefit</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">(4.4</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)%</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">(4.7</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)%</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">(2.2</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)%</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Permanent Differences:</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>
<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 style="padding-left: 0.25in; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">Gain/loss or revaluation of derivative warrant liability</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">7.8</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</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">10.2</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</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">(6.2</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)%</font></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">Stock-based compensation expense</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">(1.3</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)%</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">(2.6</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)%</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">(2.9</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)%</font></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">Stock issues for services</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">—</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</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">—</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</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">(1.6</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)%</font></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">Other</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">(1.7</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)%</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">(2.2</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)%</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">—</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</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">R&D credits</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">(4.7</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)%</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">—</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</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">(0.6</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)%</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">Change in valuation allowance</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">(29.7</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)%</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">(34.7</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)%</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">(21.5</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">)%</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<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%"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</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">—</font></td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">%</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">—</font></td>
<td style="line-height: 115%"><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; text-align: justify; text-indent: 0.25in"> In August
2013, a stockholder derivative action was filed in the Court of Common Pleas of Philadelphia County (the “Court”) against
the Company, and certain of its directors and officers.  The complaint, as amended on September 18, 2013, seeks an unspecified
amount of damages and principally alleges breaches of fiduciary duty related to the conduct of the Company’s directors and
officers in a series of capital raising transactions in 2011 to 2013<i>.  </i>Based on a review and analysis of the complaint,
the Company believes that this lawsuit is without merit and intends to continue to defend it vigorously.  In March 2014,
this complaint was dismissed without prejudice by the Court.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">In February 2014,
Patrick T. Mooney, M.D., our former President and Chief Executive Officer, and his wife, Elizabeth Mooney, filed a complaint against
us and certain of our directors and officers in the Court of Common Pleas in Philadelphia County.  The complaint, which alleges
(i) that Dr. Mooney’s termination was in breach of his employment agreement and that he is entitled to certain severance
benefits, (ii) that certain legally required disclosures by the Company and its general counsel defamed Dr. Mooney, and (iii) that
Dr. Mooney’s wife is entitled to damages under a theory of loss of consortium, seeks in excess of $20 million in damages. 
We have filed a response to the complaint seeking dismissal of four of the six counts, denying the allegations in
the two counts we have not sought to dismiss, and filing counterclaims against Dr. Mooney. We believe we
have strong defenses to the claims asserted and we intend to defend them vigorously.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"><i>Ferndale License
of Prelude </i>— In May 2009, the Company entered into a License Agreement with Ferndale Pharma Group, Inc. (“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/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: 0.25in">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/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: 0.25in"><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 relates to product development costs incurred during the year ended December 31, 2011 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/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: 0.25in"><i>Handok License
of Symphony </i>— In June 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"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">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/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: 0.25in">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 $28,000, $5,000 and $61,000 of the non-refundable license revenue was recognizable in
the years ended December 31, 2013, 2012 and 2011, respectively. Approximately $76,000 is recognizable over the next 12 months and
is shown as current deferred revenue. The remaining $76,000 is recognizable as revenue beyond the 12 month period and is classified
as non-current.</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: 0.25in"><i>MTIA License,
Development and Commercialization Agreement</i> — In December 2013, in connection with a capital raising transaction, the
Company entered into a license, development and commercialization agreement with Medical Technologies Innovation Asia, Ltd. (“MTIA”).  In
this agreement the Company granted MTIA rights, under certain intellectual property and know-how that relate to Symphony, to (i)
exclusively research, develop, manufacture, and use  Symphony in connection with the development activities needed for
regulatory approval in the People’s Republic of China, Hong Kong, Macau and Taiwan (the “Territory”), and (ii)
exclusively make, have made, use, sell, have sold, offer for sale and import Symphony in the Territory once regulatory approval
has been received.  Additionally, subject to the terms and conditions set forth in the agreement, MTIA received the right
to grant certain distribution rights to its affiliates or third parties. MTIA is responsible for conducting all required clinical
trials and all development costs relating to regulatory approval of Symphony in the Territory, as well as manufacturing and marketing
costs relating to commercialization of Symphony in the Territory.  MTIA is also responsible for obtaining and maintaining
all regulatory approvals from applicable authorities in the Territory.</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: 0.25in">Upon the earlier
of regulatory approval of Symphony by the China Food and Drug Administration or Echo’s termination of the agreement, Echo
is required, subject to certain terms and conditions, to reimburse MTIA up to $1,500,000 for development costs incurred by MTIA.  The
reimbursement will be in the form of Common Stock, valued at $2.71 per share, which was the NASDAQ closing price on December 9,
2013, the date prior to the date the parties entered into the agreement.  Additionally, the Company and MTIA will share
future net sales of Symphony generated within the Territory. The Company has the option, at its sole discretion, to enter into
negotiations with MTIA for supply of Symphony in territories that are not licensed to MTIA under the agreement. The agreement
has a term of ten years, subject to earlier termination rights including, but not limited to, for breach of the agreement, change
of control events, and certain performance obligations.</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: 0.25in">Later in December
2013 and January 2014, this agreement with MTIA was amended as a result of difficulties in transferring funds from MTIA to Echo
under the capital raising transaction. The amendment provide that Echo is not required to commence its obligations under the license
agreement, including the transfer of any technology or other documents, products or information to MTIA, until Echo has received
the full proceeds from the capital raising transaction.  As of March 26, 2014, the Company has received $1,904,793 of
MTIA’s $5,000,000 in proceeds in accordance with the MTIA Securities Purchase Agreement.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">Management
has evaluated events subsequent to December 31, 2013.  Other than as discussed in Notes 1, 9, 15 and 16, there are
no subsequent events that require adjustment to or disclosure in the Financial Statements.</p>
407463
302488
5198303
9375098
75626
49221
968004
968004
1638395
1495807
1165398
1248846
2803793
2744653
818939
825589
156435
111980
728269
755444
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367854
323488
20021592
23089295
13184894
12218390
826
1576
3549328
2581324
9625000
9625000
9740
10490
9790986
3720799
120834
1361
9578563
3644371
1581448
1411107
5585141
1119155
2527
1361
2319219
1036320
30060
10000
100
10
44374
117764
104058087
132192648
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10230606
16968589
19368496
51
30160
31126
38544
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285000
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44374
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23089295
17486
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1748613
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1748613
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12159
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1762938
1244342
1409562
836866
391595
145155
47916
1000000
75000
212018
4919346
195259
136790
23862043
6683858
14897255
4308175
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7653527
3000000
3000000
35500
371140
1975211
275
515
1768
1006000
20150
50000
1701672
61520
2272597
41363
6667
-82000
290000
5250
-4559761
4840000
3000000
455000
5072
3015974
3112625
3854400
3015974
4437346
212018
4919345
32
2304
4917009
166
211852
3225
230346
16545
195259
136790
706
136084
225
195034
70584
22453
17
-17
1661
6667
6667
6667
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190
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19000
836866
836866
6154489
3550
6435939
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355045
3484702
35060
3449642
3506000
96375
153464
448940
138
448802
95
153369
92
96283
13800
9533
9122
61520
2272597
2272597
61520
-5000
500
4500
-20150
10980
9170
-500000
50000
-2014974
1098019
35500
30
35470
3000
21964570
3272202
4080
3268122
61963
21902607
408000
6196605
1244342
1699562
1264
1698298
-341
1244683
126415
-34083
4900000
17486
969
4881818
1748613
69569
1514
9228000
4999000
16
Included in Gain (Loss) on Revaluation of Derivative Warrant Liability in the Consolidated Statement of Operations.