18.  Subsequent Events

In July, 2013 warrant holders exercised their warrants to purchase shares of the Company’s common stock for cash of $1,199,966 and the Company issued an aggregate of 2,542,300 shares. 

On July 26, 2013 the Company closed on a registered direct public offering to issue and sell 11,400,000 shares of common stock and warrants to purchase up to 3,990,000 shares of common stock.  The common stock and warrants were sold in units, consisting of common stock and a warrant to purchase 0.35 shares of common stock, at a price of $0.50 per share, and the warrants have an exercise price of $0.59 per share.  The total gross proceeds of the offering were $5,700,000.    The warrants issued are exercisable beginning six months after the closing date until the five-year anniversary of the closing date, and were recorded as liabilities at fair value.  The Company is in the process of determining the fair value of the warrants and total closing costs for this transaction.