Equity Transactions

From October 1, 2016 to November 9, 2016, the Company has generated additional net proceeds of approximately $624,000 under the ATM agreement with MLV from the sale of approximately 370,000 shares of its common stock.

Short-Term Non-Qualified Option Grants

On November 3, 2016, the Compensation Committee of the Board of Directors granted short-term non-qualified stock options relating to approximately 670,000 shares under the 2015 Equity Incentive Plan to employees and consultants of the Company. Approximately 48% of these stock options granted by the Compensation Committee will be considered issued and will vest immediately, all with a strike price of $1.54, which was the closing price of the Company’s stock on November 9, 2016. These options have a 10 year contractual term, with a fair market value of $1.04 per option with an expected term of 5 years. Approximately 52% of these stock options will be considered issued and vested upon the Company receiving shareholder approval at the 2017 Shareholders’ Annual Meeting, to increase the number of shares and options available to be issued under the 2015 Equity Incentive Plan.