During the nine month period ended September 30, 2013, the Company issued 29,750 warrants to an agent as part remuneration in respect of the issuance of 297,500 shares for net proceeds of $534,500. The Company has valued the warrants at $71,918. Each warrant is exercisable immediately for five years at an exercise price of $2.00 per share.

During the nine month period ended September 30, 2013, the Company issued 200,000 warrants to a consultant for services at an exercise price of $2.47, expiring three years after vesting. 25,000 warrants vest immediately, and the vesting of the remaining 175,000 warrants is contingent upon the achievement of specific milestones. The Company estimates that vesting of these latter warrants will take place over the three years to March 2016. The warrants were valued at $456,367 using the Black-Scholes Option Pricing model using the following assumptions: Three-year term, $2.35 stock price, $2.47 exercise price, 253% volatility, 0.38% risk free rate. As of September 30, 2013, $198,921 of the value of these warrants has been expensed.

During the nine month period ended September 30, 2013, the Company issued 45,000 warrants attached to the issuance of 225,000 shares for cash totaling $450,000. The Company has allocated $94,111 of the proceeds to the value of the warrants. The warrants are exercisable immediately for three years at an exercise price of $2.40.

During the year ended December 31, 2012, the Company issued 50,000 warrants for investor relations services rendered to the Company. The warrants are exercisable immediately for three years at an exercise price of $3.25. The warrants were valued at $145,431 using the Black-Scholes Option Pricing model using the following assumptions: Three-year term, $3.00 stock price, $3.25 exercise price, 251% volatility, 0.32% risk free rate. These warrants were cancelled by mutual agreement for no consideration during the nine month period ended September 30, 2013.

Below is a table summarizing the warrants issued and outstanding as of September 30, 2013.

Options to purchase 37,000 shares were granted on March 20, 2013. These options vest in equal nine monthly installments over three years from the date of grant, and expire three years after the vesting dates. The exercise prices are $2.35 for options vesting in the first year, $3.35 for options vesting in the second year, and $4.35 for options vesting in the third year.

Options to purchase 16,300 shares were granted on September 2, 2013. These options vest in equal nine monthly installments over three years from the date of grant, and expire three years after the vesting dates. The exercise prices are $2.35 for options vesting in the first year, $3.35 for options vesting in the second year, and $4.35 for options vesting in the third year.

The Company has calculated the estimated fair market value of the options granted to employees and non-employees in exchange for services using the Black-Scholes Option Pricing model and the following assumptions.

During the nine month period ended September 30, 2013, 30,000 options expired following termination of employment.

Below is a table summarizing the options issued and outstanding as of September 30, 2013.

Total remaining unrecognized compensation cost related to non-vested stock options is approximately $206,000 and is expected to be recognized over a period of three years.