Related Party Transactions

9 Months Ended

Sep. 30, 2014

Notes to Financial Statements

6. Related Party Transactions

Sichenzia Ross Friedman Ference LLP (“SRFF”) previously provided legal services to the Company. SRFF invoiced the Company $0 and $147,842 for legal services rendered for the three months ended September 30, 2014 and 2013, respectively; and $449,935 and $218,204 for the nine months ended September 30, 2014 and 2013, respectively. In addition, as disclosed in Note 5, in January 2014, Mr. Kesner, a partner of SRFF, was awarded 75,000 non-qualified stock options (the “Director Options”) to acquire shares of the Company's common stock, 600,000 non-qualified options with a term of five (5) years and an exercise price of $5.83; and in April 2014, he was awarded 200,000 non-qualified options with a term of five (5) years and an exercise price of $2.86.  On May 28, 2014, Harvey Kesner resigned as a director of the Company. Pursuant to this resignation, 837,500 non-vested stock options were vested immediately.

On January 6, 2014, the Company’s board of directors appointed Richard Cohen as its Chief Financial Officer, and Michael Pollack resigned as the interim Chief Financial Officer of the Company, effective January 3, 2014. Mr. Cohen is serving as the Company’s Chief Financial Officer pursuant to an agreement with Chord Advisors LLC (“Chord”), of which Mr. Cohen is Chairman. In consideration for Mr. Cohen’s services, the Company has agreed to pay Chord a monthly fee of $20,000 ($5,000 of which will be payable in shares of the Company’s common stock). In April 2014, the Company modified this agreement to pay Chord a monthly fee of $20,000 in cash.

During the quarter ended June 30, 2014, the Board of Directors of the Company approved a bonus in the aggregate amount of $250,000 to the Company’s Chief Executive Officer.  The bonus was paid as of June 30, 2014.