NOTE 8 – SUBSEQUENT EVENTS

On April 5, 2013, the Company notified the holders of the Series B warrants, exercisable at $1.19 per share, that it had accelerated the date of expiration of the Series B warrants in accordance with their terms to April 18, 2013. The Company also made an offer to Series B warrant holders that would exercise at least 33% of their warrants to amend the terms of such holders’ unexercised Series B warrants (the “Qualified warrants”) to provide for (i) an extension of the expiration date of the Qualified warrants to September 30, 2013 (“New Warrant Expiration Date”), (ii) an increase of the exercise price to $2.25, (iii) an acceleration of the New Warrant Expiration Date at the option of the Company following a period of 5 consecutive trading days where the market price per share exceeds 200% of the exercise price then in effect, and (iv) an exercise via a net exercise feature (the Qualified warrants, as amended, referred to as the “Amended Series B warrants”). On April 18, 2013, the Company received notices for the exercise of 4,244,984 Series B warrants for gross proceeds of approximately $5.06 million dollars. Accordingly, the Company issued 4,244,984 common shares, and 6,760,593 Qualified warrants were converted to 6,760,593 Amended Series B warrants. 979,790 Series B warrants were not exercised and have expired.

The Pro-forma Balance Sheet as of March 31, 2013 is presented to reflect the Series B warrant exercises:

Proforma Balance Sheet

The accompanying notes are an integral part of these financial statements.

On April 16, 2013, the Company received a notice of conversion of 138,889 Preferred Shares. The Preferred Shares are convertible into common stock at a conversion rate of 1:1. Accordingly, the Company issued 138,889 shares of common stock.

On April 30, 2013, the Company appointed a new director to the Company’s Board of Directors and granted 350,000 options to the new director. The options have an exercise price of $1.58 and expire on April 30, 2018. Of the 350,000 options issued, 87,500 vested upon issuance and the remaining 262,500 vest at 87,500 each year on the anniversary date for the next three years.

The Company has evaluated all events or transactions that occurred after March 31, 2013, up through the date these financial statements were issued. Per our evaluation the above noted subsequent events were the only ones that require disclosure.