NOTE 8 – CAPITAL STOCK

On December 16, 2011 the Company sold 611,114 common shares with warrants to a group of institutional and accredited investors for gross proceeds of $1,100,000.

As part of the sale, a price protection Ratchet Provision (since expired),was included in the warrants, which has been recorded as a derivative liability (see Note 5).  In addition, the investors received 305,559 five year Class J Warrants to purchase shares of the Company’s common stock at an exercise price of $1.95 per share which have been recorded within permanent equity.   The Company allocated the $1,100,000 in proceeds first to the derivative liability based on its fair value at issuance of $141,470.  The remaining $958,530 was allocated between the shares of common stock and warrants based on their relative fair values on the date of issuance.   The fair value of the warrants was $314,453 leaving a net of $644,077 for the value of the shares issued.

On February 15, 2012, the Company issued 55,556 common shares as a deposit on a service contract. The shares were valued at $1.80 per share based on the fair market value of the services to be provided.  The Company recorded the corresponding $100,000 fair market value as research and development expense.

On March 18, 2012, the Company issued 43,333 common shares as a deposit on a service contract. The shares were valued at $2.52 per share based on the fair market value of the stock on the date of issuance.  The Company recorded the corresponding $109,200 fair market value as professional fees.

On April 10, 2012 the Company converted 14,464 warrants into shares of common stock through a cashless exercise. The cashless calculation resulted to 4,221 common shares which were issued April 11, 2012.

On June 28, 2012, the Company issued 1,766,334 common shares for total proceeds of $2,914,452 to investors who elected to convert their series H warrants at an exercise price of $1.65. As an incentive to exercise the options, the Company agreed to issue 0.6 replacement warrants for each full warrant exercised.  The Company issued 1,059,803 replacement warrants under the incentive provision with an exercise price of $3.60.  The warrants were valued at $2,663,204.  As the original warrants were issued as part of cash financing, the value of these warrants has been included as an offsetting entry within additional paid-in capital. As of September 30, 2012, the Company has received $2,902,560 in cash and has recorded a stock subscription receivable of $11,891 which was fully collected during the year ended September 30, 2013.

On July 9, 2012, the Company converted 10,000 warrants into shares of common stock through a cashless exercise. The cashless calculation resulted to 4,444 common shares which were issued on July 17, 2012.

On September 12, 2012, the Company issued 33,333 common shares as a deposit on a service contract. The shares were valued at $2.97 per share based on the fair market value of the stock on the date of issuance.  The Company recorded the corresponding $99,000 fair market value as professional fees.

On September 19, 2012, the Company issued 367 common shares to a consultant for services. The shares were valued at $3.06 per share based on the market price of the shares on the date of issuance.  The Company recorded the corresponding $1,122 expense to general and administrative expense.

On October 5, 2012, two holders of its Series B preferred shares converted an aggregate of 138,889 preferred shares into common shares. Accordingly, the Company issued 46,296 common shares.

On October 24, 2012, the Company issued 66,667 shares of common stock for total proceeds of $100,000 upon exercise of warrants at an exercise price per share of $1.50.

On November 30, 2012, the Company received notice from a former director to exercise 53,624 options to purchase common stock using the cashless exercise feature in the option. Accordingly, the Company issued 30,842 common shares.

In March 2013, the Company issued 36,379 shares of common stock for total proceeds of $76,682 upon exercise of warrants at an exercise price per share ranging from $1.65 to $3.57.

On March 13, 2013, the Company received notice from a director to exercise 128,698 options using the cashless exercise feature in the option. Accordingly, the Company issued 79,140 common shares.

On March 27, 2013, the Company received notices of cashless exercise for 816,000 Class I warrants. Accordingly, the Company issued 560,822 common shares.

On April 1, 2013, the Company issued 43,333 common shares in exchange for consulting services. These shares were valued at $214,500 using the stock price at the grant date.

On April 16, 2013, a holder of its Series B preferred shares converted 138,889 preferred shares into common shares. Accordingly, the Company issued 46,296 common shares.

On April 18, 2013, the Company issued 1,406,320 shares of common stock for total proceeds of $5,025,345 upon exercise of warrants at an exercise price per share of $3.57.

On May 15, 2013, several holders of its Series B preferred shares converted an aggregate of 3,911,108 preferred shares into common shares. Accordingly, the Company issued 1,303,704 common shares.

On June 7, 2013, the Company issued 6,519 shares of common stock for total proceeds of $10,756 upon exercise of warrants at an exercise price per share of $1.65.

On June 14, 2013, two holders of its Series B preferred shares converted an aggregate of 894,450 preferred shares into common shares. Accordingly, the Company issued 298,150 common shares.

On June 14, 2013, 1,000 Class I warrants at an exercise price per share of $1.50 were exercised by cashless exercise. Accordingly, the Company issued 730 common shares.

On July 1, 2013, 50,000 warrants at an exercise price per share of $1.50 were exercised by cashless exercise. Accordingly, the Company issued 40,458 common shares.

On July 24, 2013, the Company issued 9,100 common shares to a consultant for services. The shares were valued at $55,667 using the stock price at the grant date.

On September 20, 2013, the Company issued 13,889 shares of common stock for total proceeds of $27,084 upon exercise of warrants at an exercise price per share of $1.95.

During the year ended September 30, 2013, the Company collected the subscription receivable from the prior year’s exercise of warrants of $11,891.

On October 2, 2013, the Company issued 6,282 shares of common stock to a legal firm to settle $50,000 in accounts payable. These shares were valued at $7.96 which was the price of the stock at the close of business on the previous trading day.

On October 31, 2013, 55,556 Series A Warrants with an exercise price of $3.60 were exercised. Accordingly, the Company issued 55,556 common shares for proceeds of $200,002.

On November 13, 2013, two holders of its Series B preferred shares converted an aggregate of 500,000 preferred shares into 166,667 common shares. As of the date of this filing, there are no Series B preferred shares outstanding.

On February 26, 2014, 30,741 warrants were exercised at an exercise price per share of $6.75 using cashless exercise. Accordingly, the Company issued 10,634 common shares.

On February 28, 2014, 23,867 warrants were exercised at an exercise price per share of $3.60 using cashless exercise. Accordingly, the Company issued 18,408 common shares.

On March 18, 2014, 28,000 warrants were exercised at an exercise price per share of $6.75 using cashless exercise. Accordingly, the Company issued 14,959 common shares.

On March 19, 2014, 1,616,667 warrants were exercised at an exercise price per share of $1.50 using cashless exercise. Accordingly, the Company issued 1,468,765 common shares.

On March 20, 2014, 19,723 warrants were exercised at an exercise price per share of $1.95 using cashless exercise. Accordingly, the Company issued 17,672 common shares.

On March 24, 2014, 13,889 warrants were exercised at an exercise price per share of $1.95 using cashless exercise. Accordingly, the Company issued 12,448 common shares.

On March 24, 2014, 33,267 warrants were exercised at an exercise price per share of $6.75 using cashless exercise. Accordingly, the Company issued 19,123 common shares.

On March 26, 2014, 27,778 warrants were exercised at an exercise price per share of $1.95 using cashless exercise. Accordingly, the Company issued 24,660 common shares.

On March 26, 2014, 500 warrants with an exercise price of $1.50 were exercised. Accordingly, the Company issued 500 common shares for proceeds of $750.

On March 28, 2014, 34,723 warrants were exercised at an exercise price per share of $1.95 using cashless exercise. Accordingly, the Company issued 30,826 common shares.

On March 28, 2014, 339,841 warrants were exercised at an exercise price per share of $6.75 using cashless exercise. Accordingly, the Company issued 198,165 common shares.

On March 31, 2014, 16,204 warrants were exercised at an exercise price per share of $1.95 using cashless exercise. Accordingly, the Company issued 14,332 common shares.

On April 28, 2014, the Company received subscription notices to purchase 1,800,000 shares of common stock with a price of $10.00 less issuance costs. Accordingly, the Company issued 1,800,000 common shares and received net proceeds of approximately $16.9 million.

On April 10, 2014, 14,815 warrants were exercised at an exercise price per share of $3.60 using cashless exercise. Accordingly, the Company issued 11,068 common shares.

On April 16, 2014, 3,334 warrants were exercised at an exercise price per share of $3.60 using cashless exercise. Accordingly, the Company issued 2,978 common shares.

On April 16, 2014, 5,652 warrants were exercised at an exercise price per share of $6.75 using cashless exercise. Accordingly, the Company issued 3,199 common shares.

On May 30, 2014, the Company issued 1,194,862 common shares to acquire certain assets of SKS pursuant to a contribution agreement (see Note 3). The shares were valued at $8.52 per share for a fair value of $10,180,224.

On June 25, 2014, 50,000 warrants were exercised at an exercise price per share of $1.20. Accordingly, the Company issued 50,000 common shares and received gross proceeds of $60,000.

On September 3, 2014, 14,418 warrants were exercised at an exercise price per share of $6.75 using cashless exercise. Accordingly, the Company issued 3,147 common shares.

On September 11, 2014, 1,434,166 warrants were exercised at an exercise price per share of $6.75 using cashless exercise. Accordingly, the Company issued 304,707 common shares.

On September 12, 2014, 330,122 warrants were exercised at an exercise price per share of $6.75 using cashless exercise. Accordingly, the Company issued 67,802 common shares.

On September 16, 2014, 13,889 warrants were exercised at an exercise price per share of $1.95 using cashless exercise. Accordingly, the Company issued 10,362 common shares.

On September 25, 2014, 28,837 warrants were exercised at an exercise price per share of $6.75 using cashless exercise. Accordingly, the Company issued 5,527 common shares.