10. Market Capitalization Bonuses and Executive Officer Resignations and Agreements

Market Capitalization Bonuses

Pursuant to the employment agreements with certain executive officers, the Company is obligated to pay certain bonuses to these executive officers upon attainment of specified market capitalizations and trading volumes. The first market capitalization bonus of $231,250 was earned and paid in the three months ended March 31, 2013 upon attainment of a $125 million market capitalization and a 30-day trading share volume in excess of 50,000 shares per day. The second market capitalization bonus of $312,500 was earned and paid in the three months ended June 30, 2013 upon attainment of a $250 million market capitalization and a 30-day trading share volume in excess of 100,000 shares per day. Expense related to these bonuses were reflected in the periods in which they were earned.

Executive Officer Resignations

On April 22, 2013, Dr. Bobby W. Sandage, Jr. resigned as president and director of the Company. In accordance with Dr. Sandage’s employment agreement, as amended, Dr. Sandage is entitled to receive his salary and COBRA benefits for twelve months from the date of his resignation. The Company recorded a severance liability of $445,000 for these obligations in the three-month period ended June 30, 2013. For the three months ended September 30, 2013, the Company paid $107,000 of the severance obligation to Dr. Sandage and $94,900 to Dr. Glenn Cooper in connection with his severance arrangement recorded in 2012. For the nine months ended September 30, 2013 a total of $446,200 was paid to Drs. Sandage and Cooper.