(15) Subsequent Events

On March 13, 2014, the Company entered into a Second Supplemental Agreement to Engagement Agreement (the “Second Supplemental Agreement”) with TriPoint Global Equities, LLC (the “Placement Agent”), pursuant to which the Placement Agent agreed to use its reasonable best efforts to arrange for the sale of up to 219,754 shares of the Company’s common stock in a registered direct public offering (the “Offering”). The Second Supplemental Agreement supplements that certain engagement letter and Supplemental Agreement to Engagement Agreement dated August 29, 2013 and September 18, 2013, respectively, by and between the Company and the Placement Agent as disclosed on the Company’s Current Report on Form 8-K filed on September 19, 2013.

On March 20, 2014, the Company and a certain investor entered into a common stock purchase agreement (the “Purchase Agreement”) in connection with the Offering, pursuant to which the Company agreed to sell an aggregate of 219,750 shares of its common stock to such investor for aggregate gross proceeds, before deducting fees to the Placement Agent and other estimated offering expenses payable by the Company, of approximately $659,250. The purchase price was $3.00 per share. The Placement Agent was entitled to a cash fee of $46,148 which was equal to 7.0% of the gross proceeds paid to the Company in the Offering. The Company also reimbursed the Placement Agent for legal and other expenses incurred by the Placement Agent in connection with the Offering in an amount of approximately $7,500.

Under the Purchase Agreement, the Company has agreed with the purchaser that, subject to certain exceptions, it will not, within the 90 days following the closing of the Offering (which period may be extended in certain circumstances), enter into any agreement to issue or announce the issuance or proposed issuance of any securities.

The Company has also agreed with the purchaser that from the closing date of the Offering until three years thereafter, it will not effect or enter into an agreement to effect a “Variable Rate Transaction,” which means a transaction in which the Company:

The Company has also agreed that for a period of one year after the closing date of the Offering, the Company shall not initiate any “at-the-market offering” as defined in Rule 415(a)(4) under the Securities Act.

The Company has also agreed with the purchaser if the Company issues securities within the 12 months following the closing of the Offering, the purchaser shall have the right, on a pro-rata basis, to purchase an aggregate of 50% of all of the securities on the same terms, conditions and price provided for in the proposed issuance of securities.

The Company has also agreed to indemnify the purchaser against certain losses resulting from its breach of any of its representations, warranties, or covenants under agreements with the purchaser, as well as under certain other circumstances described in the Purchase Agreement.

The net proceeds to the Company from the Offering, after deducting placement agent fees and the estimated offering expenses borne by the Company, is approximately $583,000. After giving effect to the Offering, the Company has 2,324,416 shares of common stock outstanding.

The shares were issued pursuant to a prospectus supplement dated March 20, 2014, filed with the Securities and Exchange Commission (the “Commission”) pursuant to Rule 424(b) under the Securities Act, as part of a shelf takedown from the Company’s registration statement on Form S-3 (File No. 333-173212), including a related prospectus, which was declared effective by the Commission on April 28, 2011.

Also, on March 20, 2014, certain holders of warrants issued in connection with the sale of units on September 23, 2013, exercised 86,100 warrants at the exercise price of $3.50 per share resulting in net proceeds of approximately $301,350. The exercise of these warrants resulted in the issuance of 85,000 shares of the Company’s common stock.