In July 2012, the Company's Board of Directors adopted the 2012 Stock Option and Incentive Plan (the "2012 Equity Incentive Plan"). The 2012 Equity Incentive Plan provides for the grants of incentive and non-qualified stock options, restricted stock and other equity awards to employees, officers, directors, consultants and advisors of the Company. Provisions such as vesting, repurchase and exercise conditions, and limitations are determined by the Board of Directors on the grant date. There are 200,000 shares of the Company’s Common Stock reserved for issuance under its 2012 Equity Incentive Plan.

As of March 31, 2014, the Company has issued an aggregate of 177,800 common shares for future issuance upon exercise of outstanding and future grants of common stock options and future issuances of restricted stock awards pursuant to the Company's 2012 Equity Incentive Plan.

Effective as of July 12, 2012 the Company issued 46,000 stock options under its 2012 Equity Incentive Plan to the Company’s CEO, a consultant and the Chairman of the Board of Directors; 36,000 of which have a five-year term and 10,000 of which have a ten-year term. All of the options are exercisable for the purchase of one share of the Company’s common stock at an exercise price of $24.00 per share. Such options, which will vest annually at a rate of 33% beginning on the first anniversary date of the Merger, in each case, if the grantee remains employed by the Company or any of its subsidiaries on each annual vesting date. As of March 31, 2014, 10,000 options have been forfeited.

Effective as of August 15, 2012 the Company issued 4,000 stock options under its 2012 Equity Incentive Plan to certain of the Company’s employees and consultants. All of the options have a ten-year term and are exercisable for the purchase of one share of the Company’s common stock at an exercise price of $24.00 per share. Vesting on these awards is a three-year period. Such options, which will vest annually at a rate of 33% beginning on the first anniversary date of the grant, in each case, if the grantee remains employed by the Company or any of its subsidiaries on each annual vesting date. As of March 31, 2014, 25 options have been forfeited.

Effective as of November 21, 2012 the Company issued 5,000 stock options under its 2012 Equity Incentive Plan to the Company’s newly appointed director. All of the options have a ten-year term and are exercisable for the purchase of one share of the Company’s common stock at an exercise price of $24.00 per share. Vesting on these awards is a three-year period. Such options, which will vest annually at a rate of 33% beginning on the first anniversary date of the grant, in each case, if the grantee remains employed by the Company or any of its subsidiaries on each annual vesting date.

Effective as of March 28, 2013 the Company issued 5,000 stock options under its 2012 Equity Incentive Plan to the Company’s newly appointed director. All of the options have a ten-year term and are exercisable for the purchase of one share of the Company’s common stock at an exercise price of $17.00 per share. Vesting on these awards is a three-year period. Such options, which will vest annually at a rate of 33% beginning on the first anniversary date of the grant, in each case, if the grantee remains employed by the Company or any of its subsidiaries on each annual vesting date.

Effective as of April 8, 2013 the Company issued 5,000 stock options under its 2012 Equity Incentive Plan to the Company’s newly appointed director. All of the options have a ten-year term and are exercisable for the purchase of one share of the Company’s common stock at an exercise price of $14.00 per share. Vesting on these awards is a three-year period. Such options, which will vest annually at a rate of 33% beginning on the first anniversary date of the grant, in each case, if the grantee remains employed by the Company or any of its subsidiaries on each annual vesting date.

Effective as of June 28, 2013 the Company issued 5,000 stock options under its 2012 Equity Incentive Plan to two of the Company’s directors pursuant to the Company’s board compensation package, effective as of March 15, 2013. All of the options have a ten-year term and are exercisable for the purchase of one share of the Company’s common stock at an exercise price of $5.00 per share. Vesting on these awards is a three-year period. Such options, which will vest annually at a rate of 33% beginning on the first anniversary date of the grant, in each case, if the grantee remains employed by the Company or any of its subsidiaries on each annual vesting date.

Effective as of July 12, 2013 the Company issued 114,000 stock options under its 2012 Equity Incentive Plan to the Company’s CEO and a consultant. The options have a five-year term. All of the options are exercisable for the purchase of one share of the Company’s common stock at an exercise price of $6.00 per share. Such options, which will vest annually at a rate of 33% beginning on the first anniversary of the grant date, if the grantee remains employed by the Company or any of its subsidiaries on each annual vesting date.

Effective as of August 15, 2013 the Company issued 13,575 stock options under its 2012 Equity Incentive Plan to certain of the Company’s employees and consultants. All of the options have a ten-year term and are exercisable for the purchase of one share of the Company’s common stock at an exercise price of $5.00 per share. Vesting on these awards is a three-year period. Such options, which will vest annually at a rate of 33% beginning on the first anniversary date of the grant, in each case, if the grantee remains employed by the Company or any of its subsidiaries on each annual vesting date.

The fair value of each stock option grant was estimated on the date of grant using the Black-Scholes option-pricing model. The expected life assumption is based on the estimated forfeiture rate. Expected volatility is based on a blend of the volatility of the Company. The risk-free interest rate is the yield currently available on U.S. Treasury five-year and seven-year zero-coupon issues approximating the expected term used as the input to the Black-Scholes model. FASB accounting guidance requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods as options vest, if actual forfeitures differ from those estimates. During the nine months ended March 31, 2014, because substantially all of the Company's stock option grants vest annually, stock-based employee compensation expense includes the actual impact of forfeitures. No stock options are exercisable as of March 31, 2014. The relevant inputs used to determine the value of the stock option grants is as follows:

	Number of options outstanding		Weighted average risk-free rate			Expected life in years		Expected volatility			Expected dividends
July 12, 2012		36,000		0.83	%		3.5		70	%		0	%
August 15, 2012		3,975		0.83	%		6.0		70	%		0	%
November 21, 2012		5,000		0.95	%		6.0		60	%		0	%
March 28, 2013		0		1.005	%		6.0		55	%		0	%
April 8, 2013		5,000		1.685	%		6.0		55	%		0	%
June 28, 2013		250		1.685	%		6.0		55	%		0	%
July 12, 2013		114,000		1.715	%		3.5		65	%		0	%
August 15, 2013		13,575		1.860	%		6.0		65	%		0	%
Total		177,800

The fair value of the Company’s outstanding options issued to non-employees was $1,042 as of March 31, 2014. These options were valued at March 31, 2014 using a Black-Scholes model with Level 3 inputs. Expected volatility was based on the Company’s volatility from inception through March 31, 2014.

As a result, share-based compensation expense totaled $333,856 and $452,087 for the nine months ended March 31, 2014 and March 31, 2013, respectively, and is recorded in general and administrative expenses. Share-based compensation expense totaled $147,436 and $162,808 for the three months ended March 31, 2014 and March 31, 2013, respectively.