(11) WARRANTS

At September 30, 2011, the Company had the following outstanding warrants:

	Number of
	Shares		Exercise		Date of
	Exercisable		Price		Expiration
Outstanding warrants accounted for as derivative warrant liability:
Granted to investors and placement agent in private placement		341,535	$	1.28	6/15-7/16/2012
Granted to financial investment advisor		3,000	$	1.38	7/25/2012
Granted to financial advisor in connection with an acquisition		61,625	$	1.75	9/14/2012
Granted to financial investment advisor		7,500	$	1.30	2/11/2013
Granted to investors in private placement		154,990	$	0.50	2/11/2013
Granted to investors in private placement		177,324	$	1.50	3/24/2013
Total outstanding warrants accounted for as derivative warrant liability		745,974
Weighted average exercise price			$	1.21
Weighted average time to expiration in years					1.08 years

Outstanding warrants accounted for as equity:
Granted to investors and placement agent in private placement		180,000	$	0.75	6/15/2012
Granted to investors in private placement		578,422	$	0.50	2/11/2013
Granted to investors in private placement of preferred stock		121,663	$	0.75	9/30/2013
Granted to investors in private placement of preferred stock		32,249	$	1.00	9/30/2013
Granted to investors in private placement of preferred stock		198,333	$	1.50	10/28/2013
Granted to investors in private placement of preferred stock		70,000	$	0.75	10/31/2013
Granted to investors in private placement of preferred stock		640,000	$	0.75	2/28/2014
Granted to vendor		50,000	$	0.70	3/2/2012
Granted to vendor		60,000	$	0.60	3/15/2014
Granted to investors in private placement		400,000	$	1.59	6/30/2014
Granted to investors in private placement		1,368,000	$	2.00	11/13/2014
Granted to investors in private placement		800,000	$	1.60	11/13/2014
Granted to placement agent in private placement		256,906	$	1.50	11/13/2014
Granted to vendor		50,000	$	2.00	12/1/2012
Granted to investors in private placement		63,000	$	2.00	12/3/2014
Granted to investors in private placement		374,658	$	2.25	2/9/2015

	Number of Shares Exercisable		Exercise Price		Date of Expiration
Granted to placement agents in private placement		28,500	$	2.25	2/9/2015
Granted to investor in private placement		6,375	$	2.25	3/18/2015
Granted to financial investment advisor		100,000	$	1.50	2/10/2013
Granted to financial investment advisor		10,367	$	2.00	3/3/2013
Granted to investors in private placement		187,500	$	1.50	11/5/2012
Granted to investors in private placement		187,500	$	2.50	11/5/2012
Granted to placement agent in private placement		5,000	$	1.50	11/5/2012
Granted to placement agent in private placement		5,000	$	2.50	11/5/2012
Granted to investors in private placement		35,000	$	1.50	11/26/2012
Granted to investors in private placement		35,000	$	2.50	11/26/2012
Granted for waiver of Series B Perpetual Redeemable Preferred Stock redemption		125,000	$	1.50	12/8/2012
Granted for waiver of Series B Perpetual Redeemable Preferred Stock redemption		125,000	$	2.50	12/8/2012
Granted to investors in private placement		495,000	$	1.50	12/29/2012
Granted to investors in private placement		512,500	$	2.50	12/29/2012
Granted to placement agent in private placement		30,000	$	1.50	12/29/2012
Granted to placement agent in private placement		30,000	$	2.50	12/29/2012
Granted to investors in private placement		245,750	$	1.50	1/4/2013
Granted to investors in private placement		245,750	$	2.50	1/4/2013
Granted to placement agent in private placement		18,125	$	1.50	1/4/2013
Granted to placement agent in private placement		18,125	$	2.50	1/4/2013
Granted to investors in private placement		255,000	$	1.50	2/3/2013
Granted to investors in private placement		280,000	$	2.50	2/3/2013
Granted to placement agent in private placement		1,250	$	1.50	2/3/2013
Granted to placement agent in private placement		1,250	$	2.50	2/3/2013
Granted to investors in private placement		1,753,000	$	1.50	2/8/2013
Granted to investors in private placement		1,753,000	$	2.50	2/8/2013
Total outstanding warrants accounted for as equity		11,732,223
Weighted average exercise price			$	1.75
Weighted average time to expiration in years					1.37 years
Totals for all warrants outstanding:
Total		12,478,197
Weighted average exercise price			$	1.72
Weighted average time to expiration in years					1.35 years

Exercise of Common Stock Warrants

During the nine months ended September 30, 2011, the Company issued 744,243 shares of Common Stock upon the exercise of warrants to purchase 1,419,470 shares of Common Stock through cashless exercise provisions, and 705,048 shares of Common Stock upon the exercise of warrants for cash, providing gross proceeds to the Company of $1,251,629. During the nine months ended September 30, 2010, investors effected cashless exercises of warrants to purchase 143,793 shares which resulted in the issuance of 35,714 shares to the investors.

During the nine months ended September 30, 2011, the Company contacted certain holders of the Series 1 and Series 2 Warrants to encourage them to exercise their warrants voluntarily by reducing the exercise price on the Series 2 Warrants from $2.50 to $2.00 per share, provided they elected to simultaneously exercise an equal number of Series 1 and Series 2 Warrants. Warrants to purchase an aggregate of 350,000 shares of Common Stock across the Series 1 and Series 2 warrants were exercised under this arrangement during the nine months ended September 30, 2011 and cash proceeds of $612,500 from these transactions were received. As a result of the reductions in exercise price, the Company recorded $87,500 in deemed dividends for the three and nine months ended September 30, 2011 in the Consolidated Statement of Operations.