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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” or “Echo”) 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<b> </b>SkinPrep System (“SkinPrep”), a component of Symphony,
allows for enhanced skin permeation that enables extraction of analytes such as glucose and enhanced delivery of topical pharmaceuticals.</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
unaudited consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Sontra Medical,
Inc., a Delaware corporation.  All significant intercompany balances and transactions have been eliminated in consolidation.  These
financial statements have been prepared in conformity with Generally Accepted Accounting Principles (“GAAP”) in the
United States consistent with those applied in, and should be read in conjunction with, the Company’s audited consolidated
financial statements and related footnotes for the year ended December 31, 2013 included in the Company’s Annual Report on
Form 10-K as filed with the United States Securities and Exchange Commission (“SEC”) on March 28, 2014.  These
financial statements reflect all adjustments, consisting only of normal recurring adjustments, which are, in the opinion of Management,
necessary for a fair presentation of the Company’s financial position as of June 30, 2014 and its results of operations and
cash flows for the interim periods presented and are not necessarily indicative of results for subsequent interim periods or for
the full year.  These interim financial statements do not include all of the information and footnotes required by GAAP
for complete financial statements as allowed by the relevant SEC rules and regulations; however, the Company believes that its
disclosures are adequate to ensure that the information presented is not misleading.</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><u>Liquidity, Going Concern and
Management’s Plans</u></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 consolidated financial statements have been prepared on a basis assuming that the Company is a Going Concern,
which contemplates the realization of assets and the satisfaction of liabilities in the normal course of
business.  As of June 30, 2014, the Company had cash of approximately $4,106,000, working capital of approximately
$2,756,000 and an accumulated deficit of approximately $119,506,000.  While Management continues its efforts to
reduce expenses, the Company continues to incur recurring losses from operations.  The Company will need to secure
additional capital to fund its product development, research, manufacturing and clinical programs in its current planned
operations.  In the past, the Company has funded its operations primarily through debt and equity
issuances.  Management intends to actively pursue additional financing to fund its operations.  However,
no assurances can be given that funding will be available to the Company and, if funding is available, that it will be
available on terms acceptable to the Company.  If additional funding is not available on terms that are acceptable
to the Company, no assurances can be given that the Company’s operations will be funded beyond November 30, 2014, as
projected with our recently enacted cost reductions (see Note 15).  The accompanying consolidated financial statements
do not include any adjustments that might result from the outcome of these uncertainties.</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"></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">Pursuant to the Securities
Purchase Agreement (“SPA”) between the Company and Medical Technologies Innovation Asia Ltd. (“MTIA”),
as amended on January 30, 2014, in March 2014 and on June 17, 2014, the Company would sell 1,818,182 shares of its Common Stock
and 181,818 Warrants to purchase its Common Stock to MTIA for an aggregate purchase price of $5,000,000, such sales to be made
in three installments through March 27, 2014. From February 4, 2014 through April 15, 2014, the Company received gross proceeds
of $2,400,000 of the anticipated $5,000,000 in connection with the SPA. In connection with the receipt of those proceeds, the Company
has issued to MTIA 872,728 shares of its Common Stock and 87,274 Warrants to purchase its Common Stock (see Note 8). Based on representations
made by MTIA to the Company, the Company had anticipated the receipt of the full $5,000,000 from MTIA despite the fact that the
funding dates in the SPA, as amended, have passed without receipt of funds from MTIA. MTIA’s failure to provide funds in
a timely manner resulted in its material breach of the SPA, which has subsequently expired. The Company remains in discussions
with MTIA regarding MTIA’s purchase of the additional $2,600,000 in Company securities and MTIA continues to reiterate its
interest in the Company’s Symphony CGM System, to which MTIA is entitled only after completing its investment in the Company.
No assurances can be given, however, that the Company will be successful in entering into a new agreement with MTIA.</p>
<p style="font: 11pt/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"><b><i><u>Reclassifications</u></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">Certain expenses
in first quarter of 2014 were reclassified to correspond with the current quarter’s presentation.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i><u>Cash and Cash Equivalents</u></i></b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">As of June 30,
2014, the Company held approximately $4,106,000 in cash and cash equivalents.  The Company’s cash equivalents consist
solely of bank money market funds.  The Company maintains its cash in bank deposit accounts which, at times, may exceed
federally insured limits.  The Company has never experienced any losses related to these balances.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i><u>Restricted Cash</u></i></b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">As of June 30,
2014, restricted cash represents a $52,488 letter of credit issued in favor of one of its landlords.  As of December
31, 2013, restricted cash consisted of a $250,000 letter of credit issued in favor of one of the Company’s key product development
vendors and a $52,488 letter of credit issued in favor of one of its landlords.  Non-current restricted cash as of June
30, 2014 and December 31, 2013 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 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, with the right to terminate the lease on November 30, 2014 at a cost that the Company
has approximated at $43,000.</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 also
leases a corporate apartment in Franklin, Massachusetts under a lease expiring on November 21, 2014, with the right to terminate
the lease early upon payment of a termination fee.</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 June 30, 2014 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: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Franklin</b></font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Philadelphia</b></font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Total</b></font></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Year Ending December 31,</font></td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 64%; text-indent: 12pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">2014</font></td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 9%; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">230,000</font></td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 9%; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">94,000</font></td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 9%; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">324,000</font></td>
<td style="width: 1%; line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-indent: 12pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">2015</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">457,000</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">191,000</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">648,000</font></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-indent: 12pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">2016</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">468,000</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">196,000</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">664,000</font></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-indent: 12pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">2017</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">389,000</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">82,000</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">471,000</font></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-indent: 12pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">2018</font></td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 107%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 107%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 107%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-indent: 12pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Total</font></td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">1,544,000</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">563,000</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">2,107,000</font></td>
<td style="line-height: 107%"> </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, including accruals for lease incentives, was approximately $142,000 and $99,000 for the three months
ended June 30, 2014 and 2013, respectively, and $275,000 and $389,000 for the six months ended June 30, 2014 and 2013, 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">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 principal balance of
each draw will bear interest from the applicable draw date at a rate of 10% per annum, compounded monthly.  The Company
issued to Montaur a Promissory Note dated August 31, 2012, with a maturity date of five years from the date of closing.  The
Company 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">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 three and six months ended June 30,
2014 was $242,000 and $484,000, respectively, and is included in interest expense.  In addition, for each $1,000,000
of funds borrowed pursuant to the Credit Facility, the Company will issue Montaur a Warrant to purchase 100,000 shares of Common
Stock, with a term of five years and an exercise price equal to 150% of the market price of the Common Stock at the time of the
draw, but in no event less than $20.00 or more than $40.00 per share (together with the Commitment Warrant, the “Warrants”).  All
of the Warrants are immediately exercisable and will have a term of five years from the issue date.  The exercise price
of the Warrants is subject to adjustment for stock splits, combinations or similar events.  An exercise under the Warrants
may not result in the holder beneficially owning more than 4.99% or 9.99%, as applicable, of all of the Common Stock outstanding
at the time; provided, however, that a Holder may waive the 4.99% ownership limitation upon sixty-one (61) days advance written
notice to the Company.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </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 across three draws in 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 in 2012 to purchase 300,000 shares
of Common Stock, with a term of five years, and having exercise prices ranging from $21.10 to $22.70 per share.  The
fair value of these Warrants issued was determined to be approximately $3,455,000, of which $3,000,000 was treated as a debt discount
and was to be accreted to interest expense over the term of the note, and the balance of approximately $455,000 was charged to
interest expense in 2012.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </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 March 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.  On June 30,
2014 and December 31, 2013, the Company had outstanding Warrants to purchase 1,211,485 and 1,209,211 shares of its Common Stock,
respectively.  Included in these outstanding Warrants at June 30, 2014 and December 31, 2013 are Warrants to purchase
700,000 shares, which are considered to be derivative financial instruments.  The fair value of these derivative instruments
on June 30, 2014 and December 31, 2013 was approximately $586,000 and $1,119,000, respectively, and is included in Derivative Warrant
Liability, a current liability, in the Consolidated Balance Sheet.  Changes in fair value of the derivative financial
instruments are recognized in the Consolidated Statement of Operations as a gain or loss on revaluation of Derivative Warrant Liability.  The
Gain on Revaluation of Derivative Warrant Liability for the three months ended June 30, 2014 and 2013 were approximately $393,000
and $2,995,000, respectively, and for the six months ended June 30, 2014 and 2013 were approximately $533,000 and $4,676,000, respectively.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">The primary underlying
risk exposure pertaining to the Warrants is the change in fair value of the underlying common stock for each reporting period.  For
the three months ended June 30, 2014 and 2013, no Derivative Warrants were exercised and none expired.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">The table below
presents the changes in the Derivative Warrant Liability, which is measured at fair value on a recurring basis and classified as
Level 3 in fair value hierarchy:</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%; font: 10pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif"><b>2014</b></font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif"><b>2013</b></font></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 76%; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Derivative Warrant Liability as of January 1</font></td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 9%; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">1,119,155</font></td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 9%; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">5,585,141</font></td>
<td style="width: 1%; line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 9pt; line-height: 107%; 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: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif; background-color: white">176,000</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif; background-color: white">781,682</font></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-left: 9pt; line-height: 107%; 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: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">(709,000</font></td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">(5,305,000</font></td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 9pt; line-height: 107%; 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: 107%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 107%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif; background-color: white">—</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 107%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif; background-color: white">(152,668</font></td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Derivative Warrant Liability as of June 30</font></td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">586,155</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">909,155</font></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td colspan="8" style="line-height: 107%; font-size: 11pt"><font style="font: 7pt Times New Roman, Times, Serif">(1)</font><font style="font: 10pt Times New Roman, Times, Serif">	Included in Gain on Revaluation of Derivative Warrant Liability in the Consolidated Statement of Operations.</font></td>
<td style="line-height: 107%"> </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 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 Preferred Stock, of which 1,000 shares were issued and outstanding as of June 30, 2014 and
December 31, 2013.</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 Convertible Preferred Stock, of which 1,000,000 shares were issued and outstanding as of
June 30, 2014 and December 31, 2013.</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 Convertible Preferred Stock, all of which were issued and outstanding as of June 30, 2014
and December 31, 2013.</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"></p>
<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, of which 12,665,518 and 11,776,578 shares were issued and outstanding as of June
30, 2014 and December 31, 2013, respectively.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>January 2013 Financing</i></b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </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. (“Aegis”), as a representative of several underwriters, with respect to the issuance and sale
in an underwritten public offering by the Company of an aggregate of 1,567,855 shares of the Company’s Common Stock (including
204,500 shares sold pursuant to the over-allotment option), at a price to the public of $7.50 per share.  The net proceeds
to the Company, after deducting the underwriting discount and other offering expenses payable by the Company, from the sale of
the shares in the offering were approximately $10,626,000.  On March 1, 2013, the Company used a portion of the net proceeds
of the offering to pay off the $3,113,366 balance under the note issued to Montaur in connection with the $20 million non-revolving
draw credit facility (see Note 5).</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 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 10,
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 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"> </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 stockholder approval of the issuance of the Common Stock underlying the Preferred Stock.  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"><font style="background-color: white">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 in the fourth quarter of the year ended December 31, 2013.</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">Under the MTIA SPA, the China Purchasers agreed to purchase a total of 1,818,182 shares of the Company’s
Common Stock at $2.75 per share along with 181,818 Warrants, having a five-year term and an exercise price of $2.75 and exercisable
six months and one day following the issue date. As of June 30, 2014, the Company had not received the full proceeds of the sale
of the securities from the MTIA with the parties having previously extended the due date for the receipt of all such proceeds to
March 27, 2014, from the original closing date of December 12, 2013. MTIA failed to provide funds in a timely manner, resulting
in its material breach of the SPA, which has subsequently expired. Due to the fact that the Company has not received the full proceeds
from MTIA under the SPA, the Company has not issued all of the shares under the MITA SPA or recorded the complete MTIA transaction.
In addition, the Company has not transferred any information related to license, development or commercialization of Symphony to
MTIA since, pursuant to the license agreement between the Company and MTIA, the Company is not obligated to transfer technology
unless and until MTIA fulfills its obligations under the MTIA SPA. Through June 30, 2014, the Company has issued 872,728 shares
of Common Stock and Warrants to purchase 87,274 shares of Common Stock in exchange for $2,400,000 in gross proceeds, of which the
last installment was paid to the Company on April 15, 2014. The Company incurred issuance costs of $50,000. The fair value of Warrants
issued to MTIA to purchase 87,274 shares of Common Stock was determined to be approximately $174,396 and was recorded as a debit
and a credit to Additional Paid in Capital.</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>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 three
months ended June 30, 2014 and 2013, the Company did not issue shares of Common Stock to vendors in exchange for their services.  During
the six months ended June 30, 2014 and 2013, the Company issued 2,636 and 7,450 shares, respectively, of Common Stock with a fair
value of $8,404 and $89,970, 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 stockholders 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 June 30, 2014, there were 10,000 restricted shares of Common Stock
issued and options to purchase an aggregate of 39,000 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 stockholders approved the 2008 Equity Compensation Plan, as amended (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.  The maximum number of shares available under the 2008 Plan is 10,000,000
shares.  As of June 30, 2014, there were 136,258 restricted shares of Common Stock issued and options to purchase 1,123,361
shares of Common Stock outstanding under the 2008 Plan and 8,727,381 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">For the six months
ended June 30, 2014, no stock option grants were issued outside of an equity compensation plan.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.25in">The following table shows the remaining
shares available for future grants for each plan and outstanding shares:</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.25in"> </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: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="6" style="border-bottom: black 1pt solid">
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Equity </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Compensation Plans</b></p></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="4" style="border-bottom: black 1pt solid">
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Not Pursuant</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>to a Plan</b></p></td></tr>
<tr style="vertical-align: bottom">
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif"><b>2003 Plan</b></font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif"><b>2008 Plan</b></font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="4" style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="border-bottom: black 1pt solid; text-align: justify; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Shares Available For Issuance</b></font></td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="4" style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-left: 9pt; text-align: justify; line-height: 107%; text-indent: -9pt"><font style="font: 10pt Times New Roman, Times, Serif">Total reserved for stock options and restricted stock</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">160,000</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">10,000,000</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="4" style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 0.25in; text-align: justify; line-height: 107%; text-indent: 9pt"><font style="font: 10pt Times New Roman, Times, Serif">Net restricted stock issued net of cancellations</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">(10,000</font></td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">(136,258</font></td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="line-height: 107%"> </td>
<td colspan="4" style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-left: 0.25in; text-align: justify; line-height: 107%; text-indent: 9pt"><font style="font: 10pt Times New Roman, Times, Serif">Stock options granted</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">(154,449</font></td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">(1,624,716</font></td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="line-height: 107%"> </td>
<td colspan="4" style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 0.25in; text-align: justify; line-height: 107%; text-indent: 9pt"><font style="font: 10pt Times New Roman, Times, Serif">Add back options cancelled before exercise</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">79,849</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">488,355</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="4" style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-left: 0.25in; text-align: justify; line-height: 107%; text-indent: 9pt"><font style="font: 10pt Times New Roman, Times, Serif">Less shares no longer available due to Plan expiration</font></td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 107%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">(75,400</font></td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 107%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="4" style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 9pt; text-align: justify; line-height: 107%; text-indent: -9pt"><font style="font: 10pt Times New Roman, Times, Serif">Remaining shares available for future grants at June 30, 2014</font></td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">8,727,381</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="4" style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td colspan="9" style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: bottom; width: 66%; text-align: justify; line-height: 107%; text-indent: 12pt"><font style="font: 10pt Times New Roman, Times, Serif">Stock options granted</font></td>
<td style="vertical-align: bottom; width: 1%; line-height: 107%"> </td>
<td style="vertical-align: bottom; width: 1%; line-height: 107%"> </td>
<td style="vertical-align: bottom; width: 8%; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">154,449</font></td>
<td style="vertical-align: bottom; width: 1%; line-height: 107%"> </td>
<td style="vertical-align: bottom; width: 1%; line-height: 107%"> </td>
<td style="vertical-align: bottom; width: 1%; line-height: 107%"> </td>
<td style="vertical-align: bottom; width: 8%; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">1,624,716</font></td>
<td style="vertical-align: bottom; width: 1%; line-height: 107%"> </td>
<td style="vertical-align: bottom; width: 1%; line-height: 107%"> </td>
<td style="vertical-align: bottom; width: 1%; line-height: 107%"> </td>
<td style="vertical-align: bottom; width: 8%; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">310,000</font></td>
<td style="vertical-align: bottom; width: 1%; line-height: 107%"> </td>
<td style="vertical-align: top; width: 1%; line-height: 107%"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: bottom; text-align: justify; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Less:   Stock options cancelled</font></td>
<td style="vertical-align: bottom; line-height: 107%"> </td>
<td style="vertical-align: bottom; line-height: 107%"> </td>
<td style="vertical-align: bottom; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">(79,849</font></td>
<td style="vertical-align: bottom; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="vertical-align: bottom; line-height: 107%"> </td>
<td style="vertical-align: bottom; line-height: 107%"> </td>
<td style="vertical-align: bottom; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">(488,355</font></td>
<td style="vertical-align: bottom; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="vertical-align: bottom; line-height: 107%"> </td>
<td style="vertical-align: bottom; line-height: 107%"> </td>
<td style="vertical-align: bottom; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">(188,333</font></td>
<td style="vertical-align: bottom; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="vertical-align: top; line-height: 107%"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: bottom; text-align: justify; line-height: 107%; text-indent: 27pt"><font style="font: 10pt Times New Roman, Times, Serif">Stock options exercised</font></td>
<td style="vertical-align: bottom; line-height: 107%"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; line-height: 107%"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">(35,600</font></td>
<td style="vertical-align: bottom; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="vertical-align: bottom; line-height: 107%"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; line-height: 107%"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">(13,000</font></td>
<td style="vertical-align: bottom; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="vertical-align: bottom; line-height: 107%"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; line-height: 107%"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">(66,667</font></td>
<td style="vertical-align: bottom; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="vertical-align: top; line-height: 107%"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: bottom; text-align: justify; line-height: 107%; text-indent: 12pt"><font style="font: 10pt Times New Roman, Times, Serif">Net options outstanding before restricted stock</font></td>
<td style="vertical-align: bottom; line-height: 107%"> </td>
<td style="vertical-align: bottom; line-height: 107%"> </td>
<td style="vertical-align: bottom; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">39,000</font></td>
<td style="vertical-align: bottom; line-height: 107%"> </td>
<td style="vertical-align: bottom; line-height: 107%"> </td>
<td style="vertical-align: bottom; line-height: 107%"> </td>
<td style="vertical-align: bottom; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">1,123,361</font></td>
<td style="vertical-align: bottom; line-height: 107%"> </td>
<td style="vertical-align: bottom; line-height: 107%"> </td>
<td style="vertical-align: bottom; line-height: 107%"> </td>
<td style="vertical-align: bottom; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">55,000</font></td>
<td style="vertical-align: bottom; line-height: 107%"> </td>
<td style="vertical-align: top; line-height: 107%"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: bottom; text-align: justify; line-height: 107%; text-indent: 12pt"><font style="font: 10pt Times New Roman, Times, Serif">Net restricted stock issued net of cancellations</font></td>
<td style="vertical-align: bottom; line-height: 107%"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; line-height: 107%"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">10,000</font></td>
<td style="vertical-align: bottom; line-height: 107%"> </td>
<td style="vertical-align: bottom; line-height: 107%"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; line-height: 107%"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">136,258</font></td>
<td style="vertical-align: bottom; line-height: 107%"> </td>
<td style="vertical-align: bottom; line-height: 107%"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; line-height: 107%"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">6,485</font></td>
<td style="vertical-align: bottom; line-height: 107%"> </td>
<td style="vertical-align: top; line-height: 107%"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: bottom; text-align: justify; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Outstanding options and restricted shares at June 30, 2014</font></td>
<td style="vertical-align: bottom; line-height: 107%"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; line-height: 107%"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">49,000</font></td>
<td style="vertical-align: bottom; line-height: 107%"> </td>
<td style="vertical-align: bottom; line-height: 107%"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; line-height: 107%"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">1,259,619</font></td>
<td style="vertical-align: bottom; line-height: 107%"> </td>
<td style="vertical-align: bottom; line-height: 107%"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; line-height: 107%"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">61,485</font></td>
<td style="vertical-align: bottom; line-height: 107%"> </td>
<td style="vertical-align: top; line-height: 107%"> </td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">The fair value
of each stock option award is estimated on the date of grant using the Black-Scholes-Merton option pricing model with certain assumptions
noted below.  Expected volatilities are based on historical volatility of the Common Stock using historical periods consistent
with the expected term of the options.  The Company uses historical data, as well as subsequent events occurring prior
to the issuance of the financial statements, to estimate option exercise and employee termination and forfeitures within the valuation
model.  The expected term of Stock Options granted under the Company’s stock plans is based on the average of the
contractual term (generally 10 years) and the vesting period (generally 24 to 42 months).  The risk-free rate is based
on the yield of a U.S. Treasury security with a term consistent with the option.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">For Stock Options
issued and outstanding during the three month periods ended June 30, 2014 and 2013, the Company recorded additional paid-in capital
and non-cash compensation expense of $137,000 and $254,000, 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 assumptions
used principally for Stock Options granted to employees and members of the Company’s Board of Directors in the six months
ended June 30, 2014 and 2013 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: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif"><b>2014</b></font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif"><b>2013</b></font></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 66%; padding-right: 5.05pt; padding-left: 9pt; text-indent: -9pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Risk-free interest rate</font></td>
<td style="width: 5%; text-align: right; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 12%; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">0.11% – 2.08</font></td>
<td style="width: 1%; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td>
<td style="width: 1%; text-align: right; line-height: 107%"> </td>
<td style="width: 4%; line-height: 107%"> </td>
<td style="width: 9%; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">0.13% - 1.41</font></td>
<td style="width: 1%; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-right: 5.05pt; padding-left: 9pt; text-indent: -9pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Expected dividend yield</font></td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-right: 5.05pt; padding-left: 9pt; text-indent: -9pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Expected term</font></td>
<td style="text-align: right; line-height: 107%"> </td>
<td colspan="2" style="padding-left: 0.25in; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">1.0 - 6.0 years</font></td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td colspan="2" style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">1.0 - 6.5 years</font></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-right: 5.05pt; padding-left: 9pt; text-indent: -9pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Forfeiture rate (excluding fully vested stock options)</font></td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">15</font></td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">15</font></td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-right: 5.05pt; padding-left: 9pt; text-indent: -9pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Expected volatility</font></td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">129% - 141</font></td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">129% - 141</font></td>
<td style="line-height: 107%"><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 stock
option activity as of and for the six months ended June 30, 2014 is as follows:</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%; font: 10pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="border-bottom: black 1pt solid">
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><b>Stock Options</b></p></td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid">
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Shares</b></p></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </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: 107%"> </td>
<td style="border-bottom: black 1pt solid">
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Weighted-</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Average</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Remaining</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Contractual</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Term</b></p></td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid">
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Aggregate</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Intrinsic</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Value</b></p></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-left: 9pt; text-indent: -9pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Outstanding options at January 1, 2014</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">1,455,432</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">4.90</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 0.25in; text-indent: 12pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Granted</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">159,950</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">3.25</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-left: 0.25in; text-indent: 12pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Exercised</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 0.25in; text-indent: 12pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Forfeited or expired</font></td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 107%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">(398,021</font></td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">4.43</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 46%; padding-left: 9pt; text-indent: -9pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Outstanding options at June 30, 2014</font></td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; border-bottom: black 2.25pt double; line-height: 107%"> </td>
<td style="width: 9%; border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">1,217,361</font></td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 13%; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">4.84</font></td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 14%; border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">8.70 years</font></td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; border-bottom: black 2.25pt double; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 9%; border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td>
<td style="width: 1%; line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 9pt; text-indent: -9pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Exercisable options at June 30, 2014</font></td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">277,674</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">9.60</font></td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">6.36 years</font></td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td>
<td style="line-height: 107%"> </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 weighted-average
grant-date fair value of stock options granted during the three and six months ended June 30, 2014 was $1.85 and $3.25 per share,
respectively.  As of June 30, 2014, there was approximately $1,428,000 of total unrecognized compensation expense related
to non-vested share-based option compensation arrangements. With the exception of the unrecognized share-based compensation related
to certain restricted stock grants to Officers and employees that contain performance conditions related to FDA approval for Symphony
or the sale of substantially all of the stock or assets of the Company, unrecognized compensation is expected to be recognized
over the next four years.</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 three month period ended June 30, 2014, and 2013, the Company incurred non-cash compensation
expense of approximately $108,000 and $152,000, 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">During the three
months ended June 30, 2014, the Company granted an aggregate of 12,550 restricted shares of Common Stock to certain Officers, employees,
Directors and consultants of the Company.  The grants were issued pursuant to the 2008 Plan.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.25in">A summary of non-vested restricted stock
activity as of and for the six months ended June 30, 2014 is as follows:</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%; font: 10pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="border-bottom: black 1pt solid; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Restricted Stock</b></font></td>
<td style="line-height: 107%"> </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: 107%"> </td>
<td style="line-height: 107%"> </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: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 76%; text-indent: 12pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Non-vested shares at January 1, 2014</font></td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 9%; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">201,655</font></td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 9%; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">10.66</font></td>
<td style="width: 1%; line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 0.25in; text-indent: 12pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Granted</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">29,686</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">3.19</font></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-left: 0.25in; text-indent: 12pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Vested</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">(55,301</font></td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">7.44</font></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 0.25in; text-indent: 12pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Forfeited</font></td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 107%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">(23,297</font></td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">6.03</font></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-indent: 12pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Non-vested shares at June 30, 2014</font></td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">152,743</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">11.08</font></td>
<td style="line-height: 107%"> </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">Among the 152,743
shares of non-vested restricted stock, the various vesting criteria include the following:</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><tr style="vertical-align: top">
<td style="width: 0"></td><td style="width: 45pt">·</td><td>51,785 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: center; 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>100,958 shares of restricted stock vest over four years, at each of the anniversary dates of the grants.</td></tr></table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">As of June 30,
2014, there was approximately $550,000 of total unrecognized compensation expense related to non-vested share-based restricted
stock arrangements granted pursuant to the Company’s equity compensation plans that vest over time in the foreseeable future.  As
of June 30, 2014, the Company cannot estimate the timing of completion of performance vesting requirements required by certain
of these restricted stock grant arrangements.  Compensation expense related to these restricted share grants will be
recognized when the Company concludes that achievement of the performance vesting conditions is probable.</p>
<p style="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 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>
<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: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif"><b>2014</b></font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif"><b>2013</b></font></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 71%; text-align: justify; line-height: 107%; text-indent: 12pt"><font style="font: 10pt Times New Roman, Times, Serif">Risk-free interest rate</font></td>
<td style="width: 1%; text-align: right; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 12%; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">1.44% - 1.80</font></td>
<td style="width: 1%; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td>
<td style="width: 1%; text-align: right; line-height: 107%"> </td>
<td style="width: 3%; line-height: 107%"> </td>
<td style="width: 9%; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">0.65% - 1.49</font></td>
<td style="width: 1%; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: justify; line-height: 107%; text-indent: 12pt"><font style="font: 10pt Times New Roman, Times, Serif">Expected dividend yield</font></td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-align: justify; line-height: 107%; text-indent: 12pt"><font style="font: 10pt Times New Roman, Times, Serif">Expected term (contractual term)</font></td>
<td style="text-align: right; line-height: 107%"> </td>
<td colspan="2" style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">3.2 – 3.4 years</font></td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td colspan="2" style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">4.2 – 4.4 years</font></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: justify; line-height: 107%; text-indent: 12pt"><font style="font: 10pt Times New Roman, Times, Serif">Expected volatility</font></td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">120% - 122</font></td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">121% - 122</font></td>
<td style="line-height: 107%"><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 three and
six months ended June 30, 2014, the Company issued 18,182 and 69,092 Warrants, respectively, in connection with partial closings
related to the private placement of the Company’s Common Stock with MTIA (See Note 8).</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: 0.5in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.25in">At June 30, 2014, the Company had the
following outstanding Warrants:</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: 107%"> </td>
<td style="line-height: 107%"> </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: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Exercise Price</b></font></td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 1pt solid; text-align: center; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Date of Expiration</b></font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="line-height: 107%"><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: 107%"> </td>
<td colspan="2" style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="width: 58%; text-indent: 12pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Granted to debt holder</font></td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 10%; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">400,000</font></td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; text-align: right; line-height: 107%"> </td>
<td style="width: 3%; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 9%; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">20.00</font></td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 15%; padding-right: 8.1pt; text-align: right; line-height: 107%"><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: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Granted to debt holder</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">100,000</font></td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">21.30</font></td>
<td style="line-height: 107%"> </td>
<td style="padding-right: 8.1pt; text-align: right; line-height: 107%"><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: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Granted to debt holder</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">50,000</font></td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">22.70</font></td>
<td style="line-height: 107%"> </td>
<td style="padding-right: 8.1pt; text-align: right; line-height: 107%"><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: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Granted to debt holder</font></td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 107%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">150,000</font></td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">21.10</font></td>
<td style="line-height: 107%"> </td>
<td style="padding-right: 8.1pt; text-align: right; line-height: 107%"><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: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Total outstanding Warrants accounted for as derivative Warrant liability</font></td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">700,000</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-indent: 12pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Weighted average exercise price</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">20.61</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-indent: 12pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Weighted average time to expiration</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; text-align: center; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">3.48 years</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Outstanding Warrants accounted for as equity:</b></font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-indent: 12pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Granted to investors in private placement</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">76,800</font></td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">20.00</font></td>
<td style="line-height: 107%"> </td>
<td style="padding-right: 8.1pt; text-align: right; line-height: 107%"><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: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Granted to placement agent in private placement</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">25,695</font></td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">15.00</font></td>
<td style="line-height: 107%"> </td>
<td style="padding-right: 8.1pt; text-align: right; line-height: 107%"><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: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Granted to investors in private placement</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">6,300</font></td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">20.00</font></td>
<td style="line-height: 107%"> </td>
<td style="padding-right: 8.1pt; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">12/3/2014</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-indent: 12pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Granted to investors in private placement</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">34,147</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">22.50</font></td>
<td style="line-height: 107%"> </td>
<td style="padding-right: 8.1pt; text-align: right; line-height: 107%"><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: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Granted to placement agents in private placement</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">2,853</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">22.50</font></td>
<td style="line-height: 107%"> </td>
<td style="padding-right: 8.1pt; text-align: right; line-height: 107%"><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: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Granted to investor in private placement</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">638</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">22.50</font></td>
<td style="line-height: 107%"> </td>
<td style="padding-right: 8.1pt; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">3/18/2015</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-indent: 12pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Granted to investors in private placement</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">95,960</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">30.00</font></td>
<td style="line-height: 107%"> </td>
<td style="padding-right: 8.1pt; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">12/7/2014</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 107%"><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: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">181,818</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">2.75</font></td>
<td style="line-height: 107%"> </td>
<td style="padding-right: 8.1pt; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">12/10/2018</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Granted to investors in private placement of common stock………………………..</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">18,182</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">2.75</font></td>
<td style="line-height: 107%"> </td>
<td style="padding-right: 8.1pt; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">2/20/2019</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-indent: 12pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Granted to investors in private placement of common stock</font></td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 107%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">69,092</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">2.75</font></td>
<td style="line-height: 107%"> </td>
<td style="padding-right: 8.1pt; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">6/17/2019</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-left: 9pt; text-indent: 0.25in; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Total outstanding Warrants accounted for as equity</font></td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">511,485</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 9pt; text-indent: -9pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Weighted average exercise price</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">12.73</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-left: 9pt; text-indent: -9pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Weighted average time to expiration</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; text-align: center; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">2.00 years</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-left: 9pt; text-indent: -9pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Totals for all Warrants outstanding:</b></font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 9pt; text-indent: 0.25in; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Total</font></td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">1,211,485</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-left: 9pt; text-indent: -9pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Weighted average exercise price</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">17.29</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 9pt; text-indent: -9pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Weighted average time to expiration</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; text-align: center; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">3.22 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"> </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 for the six months ended June 30, 2014 is as follows:</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%; font: 10pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="border-bottom: black 1pt solid">
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><b> </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><b> </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><b> </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Warrants</b></p></td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="padding-bottom: 1.5pt">
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><b>  </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><b> </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><b> </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 8.8pt"><b>Shares</b></p></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="padding-bottom: 1.5pt">
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Weighted-</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Average</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Exercise</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 6.5pt"><b>Price</b></p></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 76%; text-align: justify; line-height: 107%; text-indent: 12pt"><font style="font: 10pt Times New Roman, Times, Serif">Outstanding Warrants at January 1, 2014</font></td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 9%; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">1,209,211</font></td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 9%; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">17.92</font></td>
<td style="width: 1%; line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 9pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Granted</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">87,274</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">2.75</font></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-left: 9pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Exercised</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 9pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Forfeited or expired</font></td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 107%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">(85,000</font></td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">11.35</font></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-align: justify; line-height: 107%; text-indent: 12pt"><font style="font: 10pt Times New Roman, Times, Serif">Outstanding Warrants at June 30, 2014</font></td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">1,211,485</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">17.29</font></td>
<td style="line-height: 107%"> </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">In February 2014,
Patrick T. Mooney, M.D., the Company’s former President and Chief Executive Officer, and his wife, Elizabeth Mooney, filed
a complaint against us and certain of the Company’s 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.  The Company has filed an amended answer to the complaint and amended its counterclaims against
Dr. Mooney in order to conserve cash that the Company does not believe it can ultimately recover from Dr. Mooney even if it prevailed
on those counterclaims.  The Company believes it has strong defenses to the claims asserted and intends to defend them
vigorously.  The Company similarly believes it has strong support for its counterclaim and will pursue it vigorously.  The
Court has set a tentative trial date in July 2015.</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 July, 2014,
Dr. Mooney and his wife filed a complaint against the Company, certain of its directors and Officers and a former Director and
officer alleging (i) wrongful use of civil proceedings; (ii) abuse of process; and (iii) that Dr. Mooney’s wife is entitled
to damages under a theory of loss of consortium, seeks in excess of $30 million in damages.  The complaint was filed
following the Company’s amendment of certain counterclaims filed against Dr. Mooney in connection with litigation initiated
by Dr. Mooney against us, Echo’s Board of Directors and Ms. Burke in connection with the Company’s September 2013 termination
of Dr. Mooney for cause pursuant to his employment agreement.  The Company believes it acted lawfully and in good faith,
has strong defenses to the claims asserted and intends to vigorously defend against this lawsuit.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">  </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">In 2009, the Company
entered into a License Agreement with Handok Pharmaceuticals Co., Ltd. (“Handok”) pursuant to which the Company granted
Handok a license to develop, use, market, sell and import Symphony for continuous glucose monitoring for use by medical facilities
and/or individual consumers in South Korea (the “Handok License”).  The Handok License has a minimum term
of 10 years from the date of the first commercial sale of Symphony in South Korea.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </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 and the right to receive future milestone payments
and royalties. The Company recognizes these upfront, nonrefundable payments as revenue on a straight-line basis over the contractual
or estimated performance period.  During the three months ended June 30, 2014 and 2013, the Company recorded approximately
$19,000 and $23,000, respectively, of nonrefundable license revenue.  During the six months ended June 30, 2014 and
2013, the Company recorded approximately $38,000 and $45,000, respectively, of nonrefundable license revenue.  As of
June 30, 2014, approximately $76,000 is recognizable over the next 12 months and is shown as current deferred revenue.  The
remaining $38,000 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; 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 December
2013, in connection with a capital raising transaction, the Company entered into a license, development and commercialization
agreement with MTIA (the “License Agreement”).  Later in December 2013, January 2014 and March 2014, the
License Agreement with MTIA was amended to extend the due date to March 27, 2014 for receipt of all proceeds past the
original closing date of December 12, 2013.  The amendment provides that the Company 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 the Company has received the full proceeds from the capital raising transaction.  To
date, the Company has received from MTIA $2,400,000 of the anticipated $5,000,000 in proceeds in accordance with the capital
raising transaction (see Note 8).  Since MTIA did not fulfill its obligations with respect to the capital raising
transaction, the Company has not transferred any information to MTIA relating to the license, development or
commercialization of our product in accordance with the License Agreement.</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” or “Echo”) 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<b> </b>SkinPrep System (“SkinPrep”), a component of Symphony,
allows for enhanced skin permeation that enables extraction of analytes such as glucose and enhanced delivery of topical pharmaceuticals.</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
unaudited consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Sontra Medical,
Inc., a Delaware corporation.  All significant intercompany balances and transactions have been eliminated in consolidation.  These
financial statements have been prepared in conformity with Generally Accepted Accounting Principles (“GAAP”) in the
United States consistent with those applied in, and should be read in conjunction with, the Company’s audited consolidated
financial statements and related footnotes for the year ended December 31, 2013 included in the Company’s Annual Report on
Form 10-K as filed with the United States Securities and Exchange Commission (“SEC”) on March 28, 2014.  These
financial statements reflect all adjustments, consisting only of normal recurring adjustments, which are, in the opinion of Management,
necessary for a fair presentation of the Company’s financial position as of June 30, 2014 and its results of operations and
cash flows for the interim periods presented and are not necessarily indicative of results for subsequent interim periods or for
the full year.  These interim financial statements do not include all of the information and footnotes required by GAAP
for complete financial statements as allowed by the relevant SEC rules and regulations; however, the Company believes that its
disclosures are adequate to ensure that the information presented is not misleading.</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 accompanying
consolidated financial statements have been prepared on a basis assuming that the Company is a Going Concern, which contemplates
the realization of assets and the satisfaction of liabilities in the normal course of business.  As of June 30, 2014,
the Company had cash of approximately $4,106,000, working capital of approximately $2,756,000 and an accumulated deficit of approximately
$119,506,000.  While Management continues its efforts to reduce expenses, the Company continues to incur recurring losses
from operations.  The Company will need to secure additional capital to fund its product development, research, manufacturing
and clinical programs in its current planned operations.  In the past, the Company has funded its operations primarily
through debt and equity issuances.  Management intends to actively pursue additional financing to fund its operations.  However,
no assurances can be given that funding will be available to the Company and, if funding is available, that it will be available
on terms acceptable to the Company.  If additional funding is not available on terms that are acceptable to the Company,
no assurances can be given that the Company’s operations will be funded beyond September 30, 2014.  The accompanying
consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.</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 Securities Purchase Agreement (“SPA”) between the Company and Medical Technologies Innovation Asia Ltd. (“MTIA”),
as amended on January 30, 2014, in March 2014 and on June 17, 2014, the Company would sell 1,818,182 shares of its Common Stock
and 181,818 Warrants to purchase its Common Stock to MTIA for an aggregate purchase price of $5,000,000, such sales to be made
in three installments on January 31<font style="font: 7pt/107% Times New Roman, Times, Serif">st</font><font style="font: 10pt/107% Times New Roman, Times, Serif">,
February 20</font><font style="font: 7pt/107% Times New Roman, Times, Serif">th</font><font style="font: 10pt/107% Times New Roman, Times, Serif">
and March 10</font><font style="font: 7pt/107% Times New Roman, Times, Serif">th</font><font style="font: 10pt/107% Times New Roman, Times, Serif">,
2014.  From February 4, 2014 through April 15, 2014, the Company received gross proceeds of $2,400,000 of the anticipated
$5,000,000 in connection with the SPA. In connection with the receipt of those proceeds, the Company has issued to MTIA 872,728
shares of its Common Stock and 87,274 Warrants to purchase its Common Stock (see Note 8).  Based on representations
made by MTIA to the Company, the Company had anticipated the receipt of the full $5,000,000 from MTIA despite the fact that the
funding dates in the SPA, as amended, have passed without receipt of funds from MTIA.  The Company remains in discussions
with MTIA regarding MTIA’s purchase of the additional $2,600,000 in Company securities and MTIA continues to reiterate its
interest in the Company’s Symphony CGM System, to which MTIA is entitled only after completing its investment in the Company.   No
assurances can be given, however, that the Company will be successful in entering into a new agreement with MTIA</font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">Certain expenses
in first quarter of 2014 were reclassified to correspond with the current quarter’s presentation.</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 calendar 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-align: justify; text-indent: 0.5in"><b> </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><b> </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p></td>
<td style="line-height: 107%"> </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"><b>Expense</b></p></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 88%; text-align: justify; line-height: 107%; text-indent: 12pt"><font style="font: 10pt Times New Roman, Times, Serif">2014</font></td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 9%; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td>
<td style="width: 1%; line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: justify; line-height: 107%; text-indent: 12pt"><font style="font: 10pt Times New Roman, Times, Serif">2015</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-align: justify; line-height: 107%; text-indent: 12pt"><font style="font: 10pt Times New Roman, Times, Serif">2016</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">1,480,800</font></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: justify; line-height: 107%; text-indent: 12pt"><font style="font: 10pt Times New Roman, Times, Serif">2017</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">2,961,600</font></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-align: justify; line-height: 107%; text-indent: 12pt"><font style="font: 10pt Times New Roman, Times, Serif">2018</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">2,961,600</font></td>
<td style="line-height: 107%"> </td></tr>
</table>
<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 June 30, 2014 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: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Franklin</b></font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Philadelphia</b></font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Total</b></font></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Year Ending December 31,</font></td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 64%; text-indent: 12pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">2014</font></td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 9%; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">230,000</font></td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 9%; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">94,000</font></td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 9%; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">324,000</font></td>
<td style="width: 1%; line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-indent: 12pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">2015</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">457,000</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">191,000</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">648,000</font></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-indent: 12pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">2016</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">468,000</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">196,000</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">664,000</font></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-indent: 12pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">2017</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">389,000</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">82,000</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">471,000</font></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-indent: 12pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">2018</font></td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 107%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 107%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 107%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-indent: 12pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Total</font></td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">1,544,000</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">563,000</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">2,107,000</font></td>
<td style="line-height: 107%"> </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 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:</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: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif"><b>2014</b></font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif"><b>2013</b></font></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 76%; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Derivative Warrant Liability as of January 1</font></td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 9%; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">1,119,155</font></td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 9%; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">5,585,141</font></td>
<td style="width: 1%; line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 9pt; line-height: 107%; 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: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif; background-color: white">176,000</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif; background-color: white">781,682</font></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-left: 9pt; line-height: 107%; 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: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">(709,000</font></td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">(5,305,000</font></td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 9pt; line-height: 107%; 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: 107%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 107%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif; background-color: white">—</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 107%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif; background-color: white">(152,668</font></td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Derivative Warrant Liability as of June 30</font></td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">586,155</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">909,155</font></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.25in">The following table shows the remaining
shares available for future grants for each plan and outstanding shares:</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.25in"> </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: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="6" style="border-bottom: black 1pt solid">
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Equity </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Compensation Plans</b></p></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="4" style="border-bottom: black 1pt solid">
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Not Pursuant</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>to a Plan</b></p></td></tr>
<tr style="vertical-align: bottom">
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif"><b>2003 Plan</b></font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif"><b>2008 Plan</b></font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="4" style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="border-bottom: black 1pt solid; text-align: justify; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Shares Available For Issuance</b></font></td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="4" style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-left: 9pt; text-align: justify; line-height: 107%; text-indent: -9pt"><font style="font: 10pt Times New Roman, Times, Serif">Total reserved for stock options and restricted stock</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">160,000</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">10,000,000</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="4" style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 0.25in; text-align: justify; line-height: 107%; text-indent: 9pt"><font style="font: 10pt Times New Roman, Times, Serif">Net restricted stock issued net of cancellations</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">(10,000</font></td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">(136,258</font></td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="line-height: 107%"> </td>
<td colspan="4" style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-left: 0.25in; text-align: justify; line-height: 107%; text-indent: 9pt"><font style="font: 10pt Times New Roman, Times, Serif">Stock options granted</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">(154,449</font></td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">(1,624,716</font></td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="line-height: 107%"> </td>
<td colspan="4" style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 0.25in; text-align: justify; line-height: 107%; text-indent: 9pt"><font style="font: 10pt Times New Roman, Times, Serif">Add back options cancelled before exercise</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">79,849</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">488,355</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="4" style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-left: 0.25in; text-align: justify; line-height: 107%; text-indent: 9pt"><font style="font: 10pt Times New Roman, Times, Serif">Less shares no longer available due to Plan expiration</font></td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 107%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">(75,400</font></td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 107%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="4" style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 9pt; text-align: justify; line-height: 107%; text-indent: -9pt"><font style="font: 10pt Times New Roman, Times, Serif">Remaining shares available for future grants at June 30, 2014</font></td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">8,727,381</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="4" style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td colspan="9" style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: bottom; width: 66%; text-align: justify; line-height: 107%; text-indent: 12pt"><font style="font: 10pt Times New Roman, Times, Serif">Stock options granted</font></td>
<td style="vertical-align: bottom; width: 1%; line-height: 107%"> </td>
<td style="vertical-align: bottom; width: 1%; line-height: 107%"> </td>
<td style="vertical-align: bottom; width: 8%; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">154,449</font></td>
<td style="vertical-align: bottom; width: 1%; line-height: 107%"> </td>
<td style="vertical-align: bottom; width: 1%; line-height: 107%"> </td>
<td style="vertical-align: bottom; width: 1%; line-height: 107%"> </td>
<td style="vertical-align: bottom; width: 8%; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">1,624,716</font></td>
<td style="vertical-align: bottom; width: 1%; line-height: 107%"> </td>
<td style="vertical-align: bottom; width: 1%; line-height: 107%"> </td>
<td style="vertical-align: bottom; width: 1%; line-height: 107%"> </td>
<td style="vertical-align: bottom; width: 8%; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">310,000</font></td>
<td style="vertical-align: bottom; width: 1%; line-height: 107%"> </td>
<td style="vertical-align: top; width: 1%; line-height: 107%"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: bottom; text-align: justify; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Less:   Stock options cancelled</font></td>
<td style="vertical-align: bottom; line-height: 107%"> </td>
<td style="vertical-align: bottom; line-height: 107%"> </td>
<td style="vertical-align: bottom; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">(79,849</font></td>
<td style="vertical-align: bottom; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="vertical-align: bottom; line-height: 107%"> </td>
<td style="vertical-align: bottom; line-height: 107%"> </td>
<td style="vertical-align: bottom; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">(488,355</font></td>
<td style="vertical-align: bottom; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="vertical-align: bottom; line-height: 107%"> </td>
<td style="vertical-align: bottom; line-height: 107%"> </td>
<td style="vertical-align: bottom; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">(188,333</font></td>
<td style="vertical-align: bottom; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="vertical-align: top; line-height: 107%"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: bottom; text-align: justify; line-height: 107%; text-indent: 27pt"><font style="font: 10pt Times New Roman, Times, Serif">Stock options exercised</font></td>
<td style="vertical-align: bottom; line-height: 107%"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; line-height: 107%"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">(35,600</font></td>
<td style="vertical-align: bottom; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="vertical-align: bottom; line-height: 107%"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; line-height: 107%"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">(13,000</font></td>
<td style="vertical-align: bottom; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="vertical-align: bottom; line-height: 107%"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; line-height: 107%"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">(66,667</font></td>
<td style="vertical-align: bottom; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="vertical-align: top; line-height: 107%"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: bottom; text-align: justify; line-height: 107%; text-indent: 12pt"><font style="font: 10pt Times New Roman, Times, Serif">Net options outstanding before restricted stock</font></td>
<td style="vertical-align: bottom; line-height: 107%"> </td>
<td style="vertical-align: bottom; line-height: 107%"> </td>
<td style="vertical-align: bottom; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">39,000</font></td>
<td style="vertical-align: bottom; line-height: 107%"> </td>
<td style="vertical-align: bottom; line-height: 107%"> </td>
<td style="vertical-align: bottom; line-height: 107%"> </td>
<td style="vertical-align: bottom; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">1,123,361</font></td>
<td style="vertical-align: bottom; line-height: 107%"> </td>
<td style="vertical-align: bottom; line-height: 107%"> </td>
<td style="vertical-align: bottom; line-height: 107%"> </td>
<td style="vertical-align: bottom; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">55,000</font></td>
<td style="vertical-align: bottom; line-height: 107%"> </td>
<td style="vertical-align: top; line-height: 107%"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: bottom; text-align: justify; line-height: 107%; text-indent: 12pt"><font style="font: 10pt Times New Roman, Times, Serif">Net restricted stock issued net of cancellations</font></td>
<td style="vertical-align: bottom; line-height: 107%"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; line-height: 107%"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">10,000</font></td>
<td style="vertical-align: bottom; line-height: 107%"> </td>
<td style="vertical-align: bottom; line-height: 107%"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; line-height: 107%"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">136,258</font></td>
<td style="vertical-align: bottom; line-height: 107%"> </td>
<td style="vertical-align: bottom; line-height: 107%"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; line-height: 107%"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">6,485</font></td>
<td style="vertical-align: bottom; line-height: 107%"> </td>
<td style="vertical-align: top; line-height: 107%"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: bottom; text-align: justify; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Outstanding options and restricted shares at June 30, 2014</font></td>
<td style="vertical-align: bottom; line-height: 107%"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; line-height: 107%"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">49,000</font></td>
<td style="vertical-align: bottom; line-height: 107%"> </td>
<td style="vertical-align: bottom; line-height: 107%"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; line-height: 107%"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">1,259,619</font></td>
<td style="vertical-align: bottom; line-height: 107%"> </td>
<td style="vertical-align: bottom; line-height: 107%"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; line-height: 107%"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">61,485</font></td>
<td style="vertical-align: bottom; line-height: 107%"> </td>
<td style="vertical-align: top; line-height: 107%"> </td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">The assumptions
used principally for Stock Options granted to employees and members of the Company’s Board of Directors in the six months
ended June 30, 2014 and 2013 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: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif"><b>2014</b></font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif"><b>2013</b></font></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 66%; padding-right: 5.05pt; padding-left: 9pt; text-indent: -9pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Risk-free interest rate</font></td>
<td style="width: 5%; text-align: right; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 12%; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">0.11% – 2.08</font></td>
<td style="width: 1%; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td>
<td style="width: 1%; text-align: right; line-height: 107%"> </td>
<td style="width: 4%; line-height: 107%"> </td>
<td style="width: 9%; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">0.13% - 1.41</font></td>
<td style="width: 1%; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-right: 5.05pt; padding-left: 9pt; text-indent: -9pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Expected dividend yield</font></td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-right: 5.05pt; padding-left: 9pt; text-indent: -9pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Expected term</font></td>
<td style="text-align: right; line-height: 107%"> </td>
<td colspan="2" style="padding-left: 0.25in; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">1.0 - 6.0 years</font></td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td colspan="2" style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">1.0 - 6.5 years</font></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-right: 5.05pt; padding-left: 9pt; text-indent: -9pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Forfeiture rate (excluding fully vested stock options)</font></td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">15</font></td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">15</font></td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-right: 5.05pt; padding-left: 9pt; text-indent: -9pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Expected volatility</font></td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">129% - 141</font></td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">129% - 141</font></td>
<td style="line-height: 107%"><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">A summary of stock
option activity as of and for the six months ended June 30, 2014 is as follows:</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%; font: 10pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="border-bottom: black 1pt solid">
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><b>Stock Options</b></p></td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid">
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Shares</b></p></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </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: 107%"> </td>
<td style="border-bottom: black 1pt solid">
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Weighted-</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Average</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Remaining</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Contractual</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Term</b></p></td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid">
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Aggregate</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Intrinsic</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Value</b></p></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-left: 9pt; text-indent: -9pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Outstanding options at January 1, 2014</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">1,455,432</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">4.90</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 0.25in; text-indent: 12pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Granted</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">159,950</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">3.25</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-left: 0.25in; text-indent: 12pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Exercised</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 0.25in; text-indent: 12pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Forfeited or expired</font></td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 107%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">(398,021</font></td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">4.43</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 46%; padding-left: 9pt; text-indent: -9pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Outstanding options at June 30, 2014</font></td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; border-bottom: black 2.25pt double; line-height: 107%"> </td>
<td style="width: 9%; border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">1,217,361</font></td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 13%; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">4.84</font></td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 14%; border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">8.70 years</font></td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; border-bottom: black 2.25pt double; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 9%; border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td>
<td style="width: 1%; line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 9pt; text-indent: -9pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Exercisable options at June 30, 2014</font></td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">277,674</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">9.60</font></td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">6.36 years</font></td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td>
<td style="line-height: 107%"> </td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.25in">A summary of non-vested restricted stock
activity as of and for the six months ended June 30, 2014 is as follows:</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%; font: 10pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="border-bottom: black 1pt solid; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Restricted Stock</b></font></td>
<td style="line-height: 107%"> </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: 107%"> </td>
<td style="line-height: 107%"> </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: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 76%; text-indent: 12pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Non-vested shares at January 1, 2014</font></td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 9%; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">201,655</font></td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 9%; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">10.66</font></td>
<td style="width: 1%; line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 0.25in; text-indent: 12pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Granted</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">29,686</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">3.19</font></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-left: 0.25in; text-indent: 12pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Vested</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">(55,301</font></td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">7.44</font></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 0.25in; text-indent: 12pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Forfeited</font></td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 107%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">(23,297</font></td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">6.03</font></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-indent: 12pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Non-vested shares at June 30, 2014</font></td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">152,743</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">11.08</font></td>
<td style="line-height: 107%"> </td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"> </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: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif"><b>2014</b></font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif"><b>2013</b></font></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 71%; text-align: justify; line-height: 107%; text-indent: 12pt"><font style="font: 10pt Times New Roman, Times, Serif">Risk-free interest rate</font></td>
<td style="width: 1%; text-align: right; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 12%; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">1.44% - 1.80</font></td>
<td style="width: 1%; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td>
<td style="width: 1%; text-align: right; line-height: 107%"> </td>
<td style="width: 3%; line-height: 107%"> </td>
<td style="width: 9%; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">0.65% - 1.49</font></td>
<td style="width: 1%; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: justify; line-height: 107%; text-indent: 12pt"><font style="font: 10pt Times New Roman, Times, Serif">Expected dividend yield</font></td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-align: justify; line-height: 107%; text-indent: 12pt"><font style="font: 10pt Times New Roman, Times, Serif">Expected term (contractual term)</font></td>
<td style="text-align: right; line-height: 107%"> </td>
<td colspan="2" style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">3.2 – 3.4 years</font></td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td colspan="2" style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">4.2 – 4.4 years</font></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: justify; line-height: 107%; text-indent: 12pt"><font style="font: 10pt Times New Roman, Times, Serif">Expected volatility</font></td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">120% - 122</font></td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">121% - 122</font></td>
<td style="line-height: 107%"><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-indent: 0.25in">At June 30, 2014, the Company had the
following outstanding Warrants:</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: 107%"> </td>
<td style="line-height: 107%"> </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: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Exercise Price</b></font></td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 1pt solid; text-align: center; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Date of Expiration</b></font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="line-height: 107%"><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: 107%"> </td>
<td colspan="2" style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="width: 58%; text-indent: 12pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Granted to debt holder</font></td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 10%; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">400,000</font></td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; text-align: right; line-height: 107%"> </td>
<td style="width: 3%; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 9%; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">20.00</font></td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 15%; padding-right: 8.1pt; text-align: right; line-height: 107%"><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: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Granted to debt holder</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">100,000</font></td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">21.30</font></td>
<td style="line-height: 107%"> </td>
<td style="padding-right: 8.1pt; text-align: right; line-height: 107%"><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: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Granted to debt holder</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">50,000</font></td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">22.70</font></td>
<td style="line-height: 107%"> </td>
<td style="padding-right: 8.1pt; text-align: right; line-height: 107%"><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: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Granted to debt holder</font></td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 107%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">150,000</font></td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">21.10</font></td>
<td style="line-height: 107%"> </td>
<td style="padding-right: 8.1pt; text-align: right; line-height: 107%"><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: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Total outstanding Warrants accounted for as derivative Warrant liability</font></td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">700,000</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-indent: 12pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Weighted average exercise price</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">20.61</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-indent: 12pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Weighted average time to expiration</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; text-align: center; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">3.48 years</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Outstanding Warrants accounted for as equity:</b></font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-indent: 12pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Granted to investors in private placement</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">76,800</font></td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">20.00</font></td>
<td style="line-height: 107%"> </td>
<td style="padding-right: 8.1pt; text-align: right; line-height: 107%"><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: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Granted to placement agent in private placement</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">25,695</font></td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">15.00</font></td>
<td style="line-height: 107%"> </td>
<td style="padding-right: 8.1pt; text-align: right; line-height: 107%"><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: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Granted to investors in private placement</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">6,300</font></td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">20.00</font></td>
<td style="line-height: 107%"> </td>
<td style="padding-right: 8.1pt; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">12/3/2014</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-indent: 12pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Granted to investors in private placement</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">34,147</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">22.50</font></td>
<td style="line-height: 107%"> </td>
<td style="padding-right: 8.1pt; text-align: right; line-height: 107%"><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: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Granted to placement agents in private placement</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">2,853</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">22.50</font></td>
<td style="line-height: 107%"> </td>
<td style="padding-right: 8.1pt; text-align: right; line-height: 107%"><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: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Granted to investor in private placement</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">638</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">22.50</font></td>
<td style="line-height: 107%"> </td>
<td style="padding-right: 8.1pt; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">3/18/2015</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-indent: 12pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Granted to investors in private placement</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">95,960</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">30.00</font></td>
<td style="line-height: 107%"> </td>
<td style="padding-right: 8.1pt; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">12/7/2014</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 107%"><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: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">181,818</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">2.75</font></td>
<td style="line-height: 107%"> </td>
<td style="padding-right: 8.1pt; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">12/10/2018</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Granted to investors in private placement of common stock………………………..</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">18,182</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">2.75</font></td>
<td style="line-height: 107%"> </td>
<td style="padding-right: 8.1pt; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">2/20/2019</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-indent: 12pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Granted to investors in private placement of common stock</font></td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 107%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">69,092</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">2.75</font></td>
<td style="line-height: 107%"> </td>
<td style="padding-right: 8.1pt; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">6/17/2019</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-left: 9pt; text-indent: 0.25in; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Total outstanding Warrants accounted for as equity</font></td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">511,485</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 9pt; text-indent: -9pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Weighted average exercise price</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">12.73</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-left: 9pt; text-indent: -9pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Weighted average time to expiration</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; text-align: center; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">2.00 years</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-left: 9pt; text-indent: -9pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Totals for all Warrants outstanding:</b></font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 9pt; text-indent: 0.25in; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Total</font></td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">1,211,485</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-left: 9pt; text-indent: -9pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Weighted average exercise price</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">17.29</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 9pt; text-indent: -9pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Weighted average time to expiration</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; text-align: center; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">3.22 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 for the six months ended June 30, 2014 is as follows:</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%; font: 10pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="border-bottom: black 1pt solid">
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><b> </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><b> </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><b> </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Warrants</b></p></td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="padding-bottom: 1.5pt">
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><b>  </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><b> </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><b> </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 8.8pt"><b>Shares</b></p></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="2" style="padding-bottom: 1.5pt">
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Weighted-</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Average</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Exercise</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 6.5pt"><b>Price</b></p></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 76%; text-align: justify; line-height: 107%; text-indent: 12pt"><font style="font: 10pt Times New Roman, Times, Serif">Outstanding Warrants at January 1, 2014</font></td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 9%; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">1,209,211</font></td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 9%; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">17.92</font></td>
<td style="width: 1%; line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 9pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Granted</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">87,274</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">2.75</font></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="padding-left: 9pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Exercised</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 9pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Forfeited or expired</font></td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 107%"> </td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">(85,000</font></td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">11.35</font></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-align: justify; line-height: 107%; text-indent: 12pt"><font style="font: 10pt Times New Roman, Times, Serif">Outstanding Warrants at June 30, 2014</font></td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">1,211,485</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="text-align: right; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">17.29</font></td>
<td style="line-height: 107%"> </td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
37000
7900
<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 June 30, 2014.  Other than as discussed in Notes 1 and 14, there are no subsequent events
that require adjustment to or disclosure in the Financial Statements.</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">Effective at midnight
on June 30, 2014, Robert F. Doman’s consulting contract with the Company expired in accordance with its terms and, accordingly,
he no longer serves as the Company’s Executive Chairman and Interim Chief Executive Officer.  On June 30, 2014,
the Board appointed Kimberly A. Burke to serve as Interim Chief Executive Officer of Echo, effective July 1, 2014 and continuing
for the sixty-day period expiring on August 30, 2014 or, if earlier, such date as a candidate is identified and appointed by the
Board to serve as the Company’s Chief Executive Officer.  Ms. Burke also serves as Echo’s Principal Executive
Officer and continues to serve the Company as its General Counsel and Chief Compliance Officer.  The Board continues
to work with a retained executive search firm to hire a well-qualified Chief Executive Officer.  William Grieco, the
Chairman of the Company’s Nominating and Corporate Governance Committee, is leading this search.</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">Effective July
15, 2014, Christopher P. Schnittker resigned as Senior Vice President and Chief Financial Officer of Echo to accept another opportunity.  Effective
July 16, 2014, the Board appointed Charles T. Bernhardt to serve as Interim Chief Financial Officer of Echo.</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">Under Section 5.6
of the Platinum Securities Purchase Agreement, at the reasonable request of Platinum Partners, the Company is required to prepare
and file with the SEC a Proxy Statement and seek stockholder approval of the issuance of the Common Stock underlying the Series
E Preferred Stock and the Warrants.  The Company is required to file the proxy statement as promptly as reasonably practicable,
but in any event no later than 30 business days following the receipt of the request.  Thereafter, as promptly as reasonably
practicable, but in any event no later than three business days after the Proxy Statement becomes definitive, the Company is required
to duly call, give notice to stockholders, convene and hold the Special Meeting, which shall be held no later than 45 business
days following the request.  On July 9, 2014, Platinum Partners delivered to the Company a Notice of Request to Call
a Special Meeting of Stockholders, in which Platinum Partners requested pursuant to Section 5.6 of the Platinum Stock Purchase
Agreement that the Company call a Special Meeting of stockholders to seek stockholder approval of the issuance of 1,748,613 shares
of the Common Stock upon the conversion of the 1,748,613 shares of Series E Preferred Stock.</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">Echo announced
that it has taken steps to substantially reduce operating costs and preserve cash while further refining its development
efforts and resources on implementing key product performance enhancements to its Symphony CGM System.  The Company has implemented
significant cost reductions across all aspects of its operations in both external spend and workforce, including reductions in
general and administrative expenditures, manufacturing, clinical and product development expenditures.  The Company anticipates
a meaningful decrease in expenses as a result of the most recent cost reduction efforts.  As a result of these new initiatives,
that include 35% reduction in employees, the monthly burn rate is projected to decrease by 40%-50% as compared to the average
monthly burn rate experienced during the first six months of 2014.</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 continues
to explore a variety of funding alternatives which it believes, together with the cost reduction initiatives, is necessary to permit
the Company to ultimately achieve its clinical trial and regulatory approval objectives.  In the absence of a financing or
strategic transaction, Echo's ability to achieve its previously stated product development timelines will be negatively impacted
by the Company’s effort to preserve cash and reduce expenses.</p>
<table cellspacing="0" cellpadding="0" style="width: 100%; font: 10pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="6" style="border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>2014</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>2013</b></font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="line-height: 115%"> </td>
<td style="text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><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="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Life</b></font></td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: justify; line-height: 115%; text-indent: 14pt"><font style="font: 10pt Times New Roman, Times, Serif"><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: 35%; 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: 17%; 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: 9%; 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">$</font></td>
<td style="width: 9%; border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">355,000</font></td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; border-bottom: black 1pt solid; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 9%; 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: 9%; 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: 45pt; text-indent: -9pt; 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: 11pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"><font style="font-size: 10pt">The
Company’s intangible assets are related to the acquisition of assets from Durham Pharmaceuticals Ltd. in 2007.  Following
the acquisition in 2007, the Company has modestly advanced the development programs for Durhalieve</font><font style="font-size: 7pt">TM</font><font style="font-size: 10pt">
for the treatment of corticosteroid-responsive dermatoses and for the other earlier stage AzoneTS reformulation drug candidates.  Among
other advancements, the Company has monitored stability on new drug formulations, assembled a complete response on the Durhalieve
New Drug Application, met with the United States Food and Drug Administration (“FDA”) on development status, worked
on a response for the methotrexate-AzoneTS (“MAZ”) ‘end of Phase 2’ meeting with the FDA, engaged consultants
to review and recommend new product candidates and formulations, and conducted partnering activities around the technology.  In
addition, the Company has made applicable regulatory filings necessary to maintain the active status of the AzoneTS Drug Master
File, the Durhalieve and MAZ Investigational New Drug applications and the MAZ Orphan Drug application with the FDA.</font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in">As of June 30,
2014 and December 31, 2013, intangible assets related to this acquisition are summarized as follows:</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%; font: 10pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="6" style="border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>2014</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>2013</b></font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="line-height: 115%"> </td>
<td style="text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><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="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; text-align: center; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Life</b></font></td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: justify; line-height: 115%; text-indent: 14pt"><font style="font: 10pt Times New Roman, Times, Serif"><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: 35%; 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: 17%; 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: 9%; 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">$</font></td>
<td style="width: 9%; border-bottom: black 1pt solid; text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">355,000</font></td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 1%; border-bottom: black 1pt solid; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 9%; 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: 9%; 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: 45pt; text-indent: -9pt; 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 could occur as early as the third
quarter of 2016.  The Cato Research contract included above was amortized over a three-year period, which ended in 2010.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </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 calendar 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-align: justify; text-indent: 0.5in"><b> </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><b> </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p></td>
<td style="line-height: 115%"> </td>
<td colspan="2" 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"><b>Expense</b></p></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 88%; text-align: justify; line-height: 115%; text-indent: 12pt"><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: 9%; 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-align: justify; line-height: 115%; text-indent: 12pt"><font style="font: 10pt Times New Roman, Times, Serif">2015</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-align: justify; line-height: 115%; text-indent: 12pt"><font style="font: 10pt Times New Roman, Times, Serif">2016</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">1,480,800</font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: justify; line-height: 115%; text-indent: 12pt"><font style="font: 10pt Times New Roman, Times, Serif">2017</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">2,961,600</font></td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="text-align: justify; line-height: 115%; text-indent: 12pt"><font style="font: 10pt Times New Roman, Times, Serif">2018</font></td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="text-align: right; line-height: 115%"><font style="font: 10pt Times New Roman, Times, Serif">2,961,600</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 annually
reviews the carrying value of intangible assets and considers events or circumstances that would indicate that the carrying amount
of the intangible assets may not be recoverable.  If such events or circumstances exist, the Company performs an impairment
test.  If the carrying value of the intangibles exceeds undiscounted cash flows, the Company writes down the carrying
value of the intangible assets to their fair value in the period identified.  It is the Company’s policy to evaluate
intangible assets for impairment at least annually in connection with its year-end financial statement preparation.</p>
Included in Gain (Loss) on Revaluation of Derivative Warrant Liability in the Consolidated Statement of Operations.