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<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"><b><i>Description of Business</i></b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We are a biopharmaceutical company focused on
the acquisition, development and commercialization of novel treatments for B-cell malignancies and autoimmune diseases. Currently,
the Company is developing two therapies targeting hematologic malignancies. TG-1101 (ublituximab) is a novel, glycoengineered
monoclonal antibody that targets a specific and unique epitope on the CD20 antigen found on mature B-lymphocytes. We are also
developing TGR-1202, an orally available PI3K delta inhibitor. The delta isoform of PI3K is strongly expressed in cells of hematopoietic
origin and is believed to be important in the proliferation and survival of B-lymphocytes. Both TG-1101 and TGR-1202 are in clinical
development for patients with hematologic malignancies. The Company also has pre-clinical programs to develop IRAK4 (interleukin-1
receptor-associated kinase 4) inhibitors, BET (Bromodomain and Extra Terminal) inhibitors, and anti-PD-L1 and anti-GITR antibodies.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We also actively evaluate complementary products,
technologies and companies for in-licensing, partnership, acquisition and/or investment opportunities. To date, we have not received
approval for the sale of any of our drug candidates in any market and, therefore, have not generated any product sales from our
drug candidates.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">The accompanying unaudited condensed consolidated
financial statements were prepared in accordance with U.S. generally accepted accounting principles, or GAAP, for interim financial
information and with the instructions to Quarterly Report on Form 10-Q and Article 10 of Regulation S-X of the Exchange
Act. Accordingly, they may not include all of the information and footnotes required by GAAP for complete financial statements.
All adjustments that are, in the opinion of management, of a normal recurring nature and are necessary for a fair presentation
of the condensed consolidated financial statements have been included. Nevertheless, these condensed consolidated financial statements
should be read in conjunction with the audited consolidated financial statements contained in our Annual Report on Form 10-K for
the year ended December 31, 2015. The accompanying condensed December 31, 2015 balance sheet has been derived from these statements.
The results of operations for the three and six months ended June 30, 2016 are not necessarily indicative of the results that may
be expected for the entire fiscal year or any other interim period.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"><b><i>Liquidity and Capital Resources</i></b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We have incurred operating losses since our inception
and expect to continue to incur operating losses for the foreseeable future and, may never become profitable. As of June 30, 2016,
we have an accumulated deficit of approximately $187.9 million.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Our major sources of cash have been proceeds
from the private placement and public offering of equity securities. We have not yet commercialized any of our drug candidates
and cannot be sure if we will ever be able to do so. Even if we commercialize one or more of our drug candidates, we may not become
profitable. Our ability to achieve profitability depends on many factors, including our ability to obtain regulatory approval for
our drug candidates; successfully completing any post-approval regulatory obligations; and successfully commercializing our drug
candidates alone or in partnership. We may continue to incur substantial operating losses even if we begin to generate revenues
from our drug candidates.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">As of June 30, 2016, we had approximately
$75.8 million in cash, cash equivalents, investment securities, and interest receivable. We anticipate that our cash and cash
equivalents and investments will be sufficient to fund our anticipated operating cash requirements for approximately 18 to
24 months from June 30, 2016. The actual amount of cash that we will need to operate is subject to many factors, including,
but not limited to, the timing, design and conduct of clinical trials for our drug candidates. We are dependent upon
significant future financing to provide the cash necessary to execute our current strategic plan, including the
commercialization of any of our drug candidates.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Our common stock is listed on the Nasdaq Capital
Market and trades under the symbol “TGTX.”<br clear="all" /></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: right; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"><b><i>Recently Issued Accounting Standards</i></b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In May 2016, the
Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-11, “Rescission of SEC Guidance Because of
Accounting Standards Update 2014-09 and 2014-16 Pursuant to Staff Announcements at the March 3, 2016 EITF Meeting”
(“ASU 2016-11”).  ASU 2016-11 rescinds certain SEC guidance from the <i>FASB Accounting Standards
Codification</i> in response to announcements made by the SEC staff at the Emerging Issues Task Force’s March 3, 2016
meeting.  Specifically, ASU 2016-11 supersedes SEC observer comments on the following topics: </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"></p>
<table cellpadding="0" cellspacing="0" style="width: 100%; font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><tr style="vertical-align: top">
<td style="width: 0.75in"></td><td style="width: 0.25in"><font style="font: 8pt Symbol">·</font></td><td><font style="font-size: 8pt">Upon the adoption of ASU 2014-09:</font></td></tr></table>
<table cellpadding="0" cellspacing="0" style="width: 100%; font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><tr style="vertical-align: top">
<td style="width: 1in"></td><td style="width: 0.25in"><font style="font: 8pt Symbol">·</font></td><td><font style="font-size: 8pt">Revenue and expense recognition for freight services in process (ASC 605-20-S99-2)</font></td></tr></table>
<table cellpadding="0" cellspacing="0" style="width: 100%; font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><tr style="vertical-align: top">
<td style="width: 1in"></td><td style="width: 0.25in"><font style="font: 8pt Symbol">·</font></td><td><font style="font-size: 8pt">Accounting for shipping and handling fees and costs (ASC 605-45-S99-1)</font></td></tr></table>
<table cellpadding="0" cellspacing="0" style="width: 100%; font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><tr style="vertical-align: top">
<td style="width: 1in"></td><td style="width: 0.25in"><font style="font: 8pt Symbol">·</font></td><td><font style="font-size: 8pt">Accounting for consideration given by a vendor to a customer (ASC 605-50-S99-1)</font></td></tr></table>
<table cellpadding="0" cellspacing="0" style="width: 100%; font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><tr style="vertical-align: top">
<td style="width: 1in"></td><td style="width: 0.25in"><font style="font: 8pt Symbol">·</font></td><td><font style="font-size: 8pt">Accounting for gas-balancing arrangements (ASC 932-10-S99-5).</font></td></tr></table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"></p>
<table cellpadding="0" cellspacing="0" style="width: 100%; font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><tr style="vertical-align: top">
<td style="width: 0.75in"></td><td style="width: 0.25in"><font style="font: 8pt Symbol">·</font></td><td><font style="font-size: 8pt">Upon the adoption of ASU 2014-16</font></td></tr></table>
<table cellpadding="0" cellspacing="0" style="width: 100%; font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><tr style="vertical-align: top">
<td style="width: 1in"></td><td style="width: 0.25in"><font style="font: 8pt Symbol">·</font></td><td><font style="font-size: 8pt">Determining the nature of a host contract related to a hybrid financial instrument issued in the
form of a share under ASC 815 (ASC 815-10-S99-3).</font></td></tr></table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">ASU 2016-11 is effective upon the adoption of
ASU 2014-09 and ASU 2014-16.  The adoption of ASU 2016-11 is not expected to have a material impact on the Company’s
condensed consolidated financial statements.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">In March 2016, the FASB issued ASU No. 2016-09, “Simplifying the Accounting for Share-Based Payments” (“ASU
2016-09”). ASU 2016-09 simplifies several aspects of the accounting for employee share-based payment transactions for both
public and nonpublic entities, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements,
as well as classification in the statement of cash flows. ASU 2016-09 is effective for annual reporting periods beginning after
December 15, 2016, including interim periods within those annual reporting periods. The provisions of this standard are not expected
to significantly impact the Company.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Other pronouncements issued by the FASB or other
authoritative accounting standards group with future effective dates are either not applicable or not significant to our consolidated
financial statements.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"><b><i>Use of Estimates</i></b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">The preparation of financial statements in conformity
with GAAP requires management to make estimates and judgments that affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and
expenses during the applicable reporting period. Actual results could differ from those estimates. Such differences could be material
to the consolidated financial statements.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"><b><i>Cash and Cash Equivalents</i></b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We treat liquid investments with original maturities
of three months or less when purchased as cash and cash equivalents.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"><b><i>Restricted Cash</i></b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We record cash pledged or held in trust as restricted
cash. As of June 30, 2016 and December 31, 2015, we have approximately $0.6 million of restricted cash pledged to secure a line
of credit as a security deposit for an <font style="background-color: white">Office Agreement </font>(see Note 8).</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"><b><i>Investment Securities</i></b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Investment securities at June 30, 2016 and December
31, 2015 consist of short-term and long-term government securities. We classify these securities as held-to-maturity. Held-to-maturity
securities are those securities in which we have the ability and intent to hold the security until maturity. Held-to-maturity securities
are recorded at amortized cost, adjusted for the amortization or accretion of premiums or discounts. Premiums and discounts are
amortized or accreted over the life of the related held-to-maturity security as an adjustment to yield using the effective interest
method.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">A decline in the market value of any investment
security below cost, that is deemed to be other than temporary, results in a reduction in the carrying amount to fair value. The
impairment is charged to operations and a new cost basis for the security is established. Other-than-temporary impairment charges
would be included in interest and other (income) expense, net. Dividend and interest income are recognized when earned.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"><b><i>Credit Risk</i></b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Financial instruments that potentially subject
the Company to concentrations of credit risk consist primarily of cash and cash equivalents, short-term investments and long-term
investments. The Company maintains its cash and cash equivalents, short-term investments and long-term investments with high-credit
quality financial institutions. At times, such amounts may exceed federally-insured limits.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: right; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"><b><i>Revenue Recognition</i></b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We recognize license revenue in accordance with
the revenue recognition guidance of the FASB Accounting Standards Codification (or “Codification”). We analyze each
element of our licensing agreement to determine the appropriate revenue recognition. The terms of the license agreement may include
payments to us of non-refundable up-front license fees, milestone payments if specified objectives are achieved, and/or royalties
on product sales. We recognize revenue from upfront payments over the period of significant involvement under the related agreements
unless the fee is in exchange for products delivered or services rendered that represent the culmination of a separate earnings
process and no further performance obligation exists under the contract. We recognize milestone payments as revenue upon the achievement
of specified milestones only if (1) the milestone payment is non-refundable, (2) substantive effort is involved in achieving the
milestone, (3) the amount of the milestone is reasonable in relation to the effort expended or the risk associated with achievement
of the milestone, and (4) the milestone is at risk for both parties. If any of these conditions are not met, we defer the milestone
payment and recognize it as revenue over the estimated period of performance under the contract.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"><b><i>Research and Development Costs</i></b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Generally, research and development costs are
expensed as incurred. Non-refundable advance payments for goods or services that will be used or rendered for future research and
development activities are deferred and amortized over the period that the goods are delivered or the related services are performed,
subject to an assessment of recoverability. We make estimates of costs incurred in relation to external clinical research organizations,
or CROs, and clinical site costs. We analyze the progress of clinical trials, including levels of patient enrollment, invoices
received and contracted costs when evaluating the adequacy of the amount expensed and the related prepaid asset and accrued liability.
Significant judgments and estimates must be made and used in determining the accrued liability balance and expense in any accounting
period. We review and accrue CRO expenses and clinical trial study expenses based on work performed and rely upon estimates of
those costs applicable to the stage of completion of a study. Accrued CRO costs are subject to revisions as such trials progress
to completion. Revisions are charged to expense in the period in which the facts that give rise to the revision become known. With
respect to clinical site costs, the financial terms of these agreements are subject to negotiation and vary from contract to contract.
Payments under these contracts may be uneven, and depend on factors such as the achievement of certain events, the successful recruitment
of patients, the completion of portions of the clinical trial or similar conditions. The objective of our policy is to match the
recording of expenses in our financial statements to the actual services received and efforts expended. As such, expense accruals
related to clinical site costs are recognized based on our estimate of the degree of completion of the event or events specified
in the specific clinical study or trial contract.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Prepaid research and development in our consolidated
balance sheets includes, among other things, certain costs related to development and manufacturing services. These development
and manufacturing agreements often require payments in advance of services performed or goods received. Accordingly, as of June
30, 2016 and December 31, 2015, we recorded approximately $14.5 million and $9.2 million of prepaid development and manufacturing
services, respectively, in prepaid research and development related to such advance agreements.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"><b><i>Income Taxes</i></b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Income taxes are accounted for under the asset
and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary
differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases,
operating losses and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected
to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect
on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment
date. If the likelihood of realizing the deferred tax assets or liability is less than “more likely than not,” a valuation
allowance is then created.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We, and our subsidiaries, file income tax returns
in the U.S. Federal jurisdiction and in various states. We have tax net operating loss carryforwards that are subject to examination
for a number of years beyond the year in which they were generated for tax purposes. Since a portion of these net operating loss
carryforwards may be utilized in the future, many of these net operating loss carryforwards will remain subject to examination.
We recognize interest and penalties, if any, related to uncertain income tax positions in income tax expense.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: right; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"><b><i>Stock-Based Compensation</i></b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We recognize all share-based payments to employees
and non-employee directors (as compensation for service) as noncash compensation expense in the condensed consolidated financial
statements based on the fair values of such payments. Stock-based compensation expense recognized each period is based on the value
of the portion of share-based payment awards that is ultimately expected to vest during the period. Forfeitures are estimated at
the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">For share-based payments to consultants and other
third-parties (including related parties), noncash compensation expense is determined at the “measurement date.” The
expense is recognized over the vesting period of the award. Until the measurement date is reached, the total amount of compensation
expense remains uncertain. We record compensation expense based on the fair value of the award at the reporting date. The awards
to consultants and other third-parties (including related parties) are then revalued, or the total compensation is recalculated
based on the then current fair value, at each subsequent reporting date.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">In addition, because some of the options, restricted
stock and warrants issued to employees, consultants and other third-parties vest upon achievement of certain milestones, the total
expense is uncertain. Compensation expense for such awards that vest upon the achievement of milestones is recognized when the
achievement of such milestones becomes probable.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"><b><i>Basic and Diluted Net Loss Per Common Share</i></b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Basic net loss per share of our common stock
is calculated by dividing net loss applicable to the common stock by the weighted-average number of our common stock outstanding
for the period. Diluted net loss per share of common stock is the same as basic net loss per share of common stock since potentially
dilutive securities from stock options, stock warrants and convertible preferred stock would have an antidilutive effect either
because we incurred a net loss during the period presented or because such potentially dilutive securities were out of the money
and the Company realized net income during the period presented. The amounts of potentially dilutive securities excluded from the
calculation were 6,449,737 and 5,668,134 for the three and six months ended June 30, 2016 and 2015, respectively. The following
outstanding shares of common stock equivalents were excluded from the computation of net loss per share attributable to common
stockholders for the periods presented because including them would have been antidilutive:</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="6" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Three and Six Months Ended June 30,</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>2016</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>2015</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 65%"><font style="font-size: 8pt">Unvested restricted stock</font></td>
<td style="width: 1%"> </td>
<td style="width: 0%"> </td>
<td style="width: 13%; text-align: right"><font style="font-size: 8pt">5,270,084</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 0%"> </td>
<td style="width: 12%; text-align: right"><font style="font-size: 8pt">4,431,430</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Warrants</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">1,164,708</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">1,218,749</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Shares issuable upon note conversion</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">14,945</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">17,803</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Options</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">--</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">152</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">    Total</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">6,449,737</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">5,668,134</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"><b><i>Long-Lived Assets and Goodwill</i></b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Long-lived assets are reviewed for potential
impairment when circumstances indicate that the carrying value of long-lived tangible and intangible assets with finite lives may
not be recoverable. Management’s policy in determining whether an impairment indicator exists, a triggering event, comprises
measurable operating performance criteria as well as qualitative measures. If an analysis is necessitated by the occurrence of
a triggering event, we make certain assumptions in determining the impairment amount. If the carrying amount of an asset exceeds
its estimated future cash flows, an impairment charge is recognized.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Goodwill is reviewed for impairment annually,
or earlier when events arise that could indicate that an impairment exists. We test for goodwill impairment using a two-step process.
The first step compares the fair value of the reporting unit with the unit's carrying value, including goodwill. When the carrying
value of the reporting unit is greater than fair value, the unit’s goodwill may be impaired, and the second step must be
completed to measure the amount of the goodwill impairment charge, if any. In the second step, the implied fair value of the reporting
unit’s goodwill is compared with the carrying amount of the unit’s goodwill. If the carrying amount is greater than
the implied fair value, the carrying value of the goodwill must be written down to its implied fair value. We will continue to
perform impairment tests annually, at December 31, and whenever events or changes in circumstances suggest that the carrying value
of an asset may not be recoverable.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">The following tables summarize our cash and cash
equivalents at June 30, 2016 and December 31, 2015:</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>June 30, 2016</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>December 31, 2015</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 64%"><font style="font-size: 8pt">Money market funds</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 15%; text-align: right"><font style="font-size: 8pt">8,514,029</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 15%; text-align: right"><font style="font-size: 8pt">8,265,583</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Checking and bank deposits</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">20,063,803</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">46,795,746</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">    Total</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1.5pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1.5pt double; text-align: right"><font style="font-size: 8pt">28,577,832</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1.5pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1.5pt double; text-align: right"><font style="font-size: 8pt">55,061,329</font></td>
<td style="padding-bottom: 3pt"> </td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Our investments as of June 30, 2016 and December
31, 2015 are classified as held-to-maturity. Held-to-maturity investments are recorded at amortized cost.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">The following tables summarize our investment
securities at June 30, 2016 and December 31, 2015:</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="14" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>June 30, 2016</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Amortized cost, as adjusted</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Gross unrealized holding gains</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Gross unrealized holding losses</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Estimated fair value</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Short-term investments:</font></td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 44%"><font style="font-size: 8pt">Obligations of domestic governmental agencies (maturing between July 2016 and June 2017) (held-to-maturity)</font></td>
<td style="width: 1%"> </td>
<td style="width: 0%"><font style="font-size: 8pt">$</font></td>
<td style="width: 10%; text-align: right"><font style="font-size: 8pt">25,680,319</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 0%"><font style="font-size: 8pt">$</font></td>
<td style="width: 10%; text-align: right"><font style="font-size: 8pt">22,601</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 0%"><font style="font-size: 8pt">$</font></td>
<td style="width: 10%; text-align: right"><font style="font-size: 8pt">--</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 0%"><font style="font-size: 8pt">$</font></td>
<td style="width: 10%; text-align: right"><font style="font-size: 8pt">25,702,920</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt"> Long-term investments:</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Obligations of domestic governmental agencies (maturing between July 2017 and January 2018) (held-to-maturity)</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">21,435,015</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">80,328</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">--</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">21,515,343</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">    Total short-term and long-term investment securities</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1.5pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1.5pt double; text-align: right"><font style="font-size: 8pt">47,115,334</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1.5pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1.5pt double; text-align: right"><font style="font-size: 8pt">102,929</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1.5pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1.5pt double; text-align: right"><font style="font-size: 8pt">--</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1.5pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1.5pt double; text-align: right"><font style="font-size: 8pt">47,218,263</font></td>
<td style="padding-bottom: 3pt"> </td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="14" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>December 31, 2015</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Amortized cost, as adjusted</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Gross unrealized holding gains</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Gross unrealized holding losses</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Estimated fair value</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Short-term investments:</font></td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 44%"><font style="font-size: 8pt">Obligations of domestic governmental agencies (maturing between January 2016 and December 2016) (held-to-maturity)</font></td>
<td style="width: 1%"> </td>
<td style="width: 0%"><font style="font-size: 8pt">$</font></td>
<td style="width: 10%; text-align: right"><font style="font-size: 8pt">22,166,512</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 0%"><font style="font-size: 8pt">$</font></td>
<td style="width: 10%; text-align: right"><font style="font-size: 8pt">--</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 0%"><font style="font-size: 8pt">$</font></td>
<td style="width: 10%; text-align: right"><font style="font-size: 8pt">22,822</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 0%"><font style="font-size: 8pt">$</font></td>
<td style="width: 10%; text-align: right"><font style="font-size: 8pt">22,143,690</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt"> Long-term investments:</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Obligations of domestic governmental agencies (maturing between January 2017 and December 2017) (held-to-maturity)</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">25,003,032</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">--</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">85,846</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">24,917,186</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">    Total short-term and long-term investment securities</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1.5pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1.5pt double; text-align: right"><font style="font-size: 8pt">47,169,544</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1.5pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1.5pt double; text-align: right"><font style="font-size: 8pt">--</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1.5pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1.5pt double; text-align: right"><font style="font-size: 8pt">108,668</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1.5pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1.5pt double; text-align: right"><font style="font-size: 8pt">47,060,876</font></td>
<td style="padding-bottom: 3pt"> </td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We measure certain financial assets and liabilities
at fair value on a recurring basis in the condensed consolidated financial statements. The fair value hierarchy ranks the quality
and reliability of inputs, or assumptions, used in the determination of fair value and requires financial assets and liabilities
carried at fair value to be classified and disclosed in one of the following three categories:</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<table cellpadding="0" style="width: 100%">
<tr>
<td style="vertical-align: top; width: 72px; padding: 0.75pt; font: 12pt Times New Roman, Times, Serif"><font style="font-size: 8pt">●</font></td>
<td style="padding: 0.75pt; font: 12pt Times New Roman, Times, Serif; text-align: justify"><font style="font-size: 8pt">Level 1 – quoted prices in active markets for identical assets and liabilities;</font></td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<table cellpadding="0" style="width: 100%">
<tr>
<td style="vertical-align: top; width: 72px; padding: 0.75pt; font: 12pt Times New Roman, Times, Serif"><font style="font-size: 8pt">●</font></td>
<td style="padding: 0.75pt; font: 12pt Times New Roman, Times, Serif; text-align: justify"><font style="font-size: 8pt">Level 2 – inputs other than Level 1 quoted prices that are directly or indirectly observable; and</font></td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<table cellpadding="0" style="width: 100%">
<tr>
<td style="vertical-align: top; width: 72px; padding: 0.75pt; font: 12pt Times New Roman, Times, Serif"><font style="font-size: 8pt">●</font></td>
<td style="padding: 0.75pt; font: 12pt Times New Roman, Times, Serif; text-align: justify"><font style="font-size: 8pt">Level 3 – unobservable inputs that are not corroborated by market data.</font></td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: right; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">As of June 30, 2016 and December 31, 2015, the
fair values of cash and cash equivalents, restricted cash, and notes and interest payable, current portion approximate their carrying
value.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="background-color: white">At the
time of our merger (we were then known as Manhattan Pharmaceuticals, Inc. (“Manhattan”)) with Ariston Pharmaceuticals,
Inc. (“Ariston”) in March 2010, Ariston issued $15.5 million of five-year 5% notes payable (the “5% Notes”)
in satisfaction of several note payable issuances.  The 5% Notes and accrued and unpaid interest thereon are convertible
at the option of the holder into common stock at the conversion price of $1,125 per share.  Ariston agreed to make quarterly
payments on the 5% Notes equal to 50% of the net product cash flow received from the exploitation or commercialization of
Ariston’s product candidates, AST-726 and AST-915.  We have no obligations under the 5% Notes aside from (a) 50%
of the net product cash flows from Ariston’s product candidates, if any, payable to noteholders; and (b) the conversion feature,
discussed above.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="background-color: white">The cumulative
liability including accrued and unpaid interest of the 5% Notes was approximately $16.8 million at June 30, 2016 and $19.9 million
at December 31, 2015. </font>No payments have been made on the 5% Notes as of June 30, 2016.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">In December 2011, we elected the fair value option
for valuing the 5% Notes. The fair value option was elected in order to reflect in our financial statements the assumptions that
market participants use in evaluating these financial instruments.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">As of December 31, 2013, as a result of expiring
intellectual property rights and other factors, it was determined that net product cash flows from AST-726 were unlikely. As we
have no other obligations under the 5% Notes aside from the net product cash flows and the conversion feature, the conversion feature
was used to estimate the 5% Notes’ fair value as of June 30, 2016 and December 31, 2015. The assumptions, assessments and
projections of future revenues are subject to uncertainties, difficult to predict, and require significant judgment. The use of
different assumptions, applying different judgment to inherently subjective matters and changes in future market conditions could
result in significantly different estimates of fair value and the differences could be material to our condensed consolidated financial
statements.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">The following tables provide the fair value measurements
of applicable financial liabilities as of June 30, 2016 and December 31, 2015:</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="14" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Financial liabilities at fair value as of June 30, 2016</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Level 1</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Level 2</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Level 3</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Total</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 52%"><font style="font-size: 8pt">5% Notes</font></td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 0%; border-bottom: black 1pt solid"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">--</font></td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 0%; border-bottom: black 1pt solid"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">--</font></td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 0%; border-bottom: black 1pt solid"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">90,564</font></td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 0%; border-bottom: black 1pt solid"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">90,564</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">    Total</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1.5pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1.5pt double; text-align: right"><font style="font-size: 8pt">--</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1.5pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1.5pt double; text-align: right"><font style="font-size: 8pt">--</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1.5pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1.5pt double; text-align: right"><font style="font-size: 8pt">90,564</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1.5pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1.5pt double; text-align: right"><font style="font-size: 8pt">90,564</font></td>
<td style="padding-bottom: 3pt"> </td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="14" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Financial liabilities at fair value as of December 31, 2015</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Level 1</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Level 2</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Level 3</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Total</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 52%"><font style="font-size: 8pt">5% Notes</font></td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 0%; border-bottom: black 1pt solid"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">--</font></td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 0%; border-bottom: black 1pt solid"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">--</font></td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 0%; border-bottom: black 1pt solid"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">211,549</font></td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 0%; border-bottom: black 1pt solid"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">211,549</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">    Total</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1.5pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1.5pt double; text-align: right"><font style="font-size: 8pt">--</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1.5pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1.5pt double; text-align: right"><font style="font-size: 8pt">--</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1.5pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1.5pt double; text-align: right"><font style="font-size: 8pt">211,549</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1.5pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1.5pt double; text-align: right"><font style="font-size: 8pt">211,549</font></td>
<td style="padding-bottom: 3pt"> </td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">The Level 3 amounts above represent the fair
value of the 5% Notes and related accrued interest.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: right; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">The following table summarizes the changes in
Level 3 instruments during the six months ended June 30, 2016:</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td style="width: 88%"><font style="font-size: 8pt">Fair value at December 31, 2015</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">211,549</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Interest accrued on face value of 5% Notes</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">463,161</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Conversion of 5% notes</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">(30,601</font></td>
<td><font style="font-size: 8pt">)</font></td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Change in fair value of Level 3 liabilities</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">(553,545</font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 8pt">)</font></td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Fair value at June 30, 2016</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1.5pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1.5pt double; text-align: right"><font style="font-size: 8pt">90,564</font></td>
<td style="padding-bottom: 3pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">The change in the fair value of the Level 3 liabilities
is reported in other (income) expense in the accompanying condensed consolidated statements of operations.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"><b><i>Preferred Stock</i></b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Our amended and restated certificate of incorporation
authorizes the issuance of up to 10,000,000 shares of preferred stock, $0.001 par value, with rights senior to those of our common
stock, <font style="background-color: white">issuable in one or more series. Upon issuance, we can determine the rights, preferences,
privileges and restrictions thereof. These rights, preferences and privileges could include dividend rights, conversion rights,
voting rights, terms of redemption, liquidation preferences, sinking fund terms and the number of shares constituting any series
or the designation of such series, any or all of which may be greater than the rights of common stock.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"><b><i>Common Stock</i></b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Our amended and restated certificate of incorporation
authorizes the issuance of up to 150,000,000 shares of $0.001 par value common stock.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="background-color: white">In December
2014, we filed a shelf registration statement on Form S-3 (the “2015 S-3”), which was declared effective in January
2015. Under the 2015 S-3, the Company may sell up to a total of $250 million of its securities. In connection with the 2015 S-3,
we amended our 2013 At-the-Market Issuance Sales Agreement with MLV & Co. LLC (the “2015 ATM”) such that we may
issue and sell additional shares of our common stock, having an aggregate offering price of up to $175.0 million, from time to
time through MLV & Co. LLC (“MLV”) and FBR Capital Markets & Co. (“FBR”, each of MLV and FBR individually
an “Agent” and collectively the “Agents”), acting as the sales agents. Under the 2015 ATM we pay the Agents
a commission rate of up to 3.0% of the gross proceeds from the sale of any shares of common stock sold through the Agents.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="background-color: white">During
the six months ended June 30, 2016, we sold a total of 396,811 shares of common stock under the 2015 ATM for aggregate total gross
proceeds of approximately $3.6 million at an average selling price of $9.00 per share, resulting in net proceeds of approximately
$3.5 million after deducting commissions and other transaction costs.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="font-weight: normal; font-style: normal; font-variant: normal; text-transform: none; letter-spacing: normal; word-spacing: 0px; background-color: rgb(255, 255, 255)">The
2015 S-3 is currently our only active shelf registration statement. After deducting shares already sold, including under the 2015
ATM, there are approximately $178 million of common stock that remain available for sale under the 2015 S-3. We may offer the
securities under the 2015 S-3 from time to time in response to market conditions or other circumstances if we believe such a plan
of financing is in the best interests of our stockholders. We believe that the 2015 S-3 provides us with the flexibility to raise
additional capital to finance our operations as needed. </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"><b><i>Equity Incentive Plans</i></b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">The TG Therapeutics, Inc. Amended and Restated
2012 Incentive Plan (“2012 Incentive Plan”) was approved by stockholders in June 2015. As of June 30, 2016, no options
were outstanding and up to an additional 4,183,861 shares may be issued under the 2012 Incentive Plan.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"><u>Restricted Stock</u></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Certain employees, directors and consultants
have been awarded restricted stock. The restricted stock vesting consists of milestone and time-based vesting. The following table
summarizes restricted share activity for the six months ended June 30, 2016:</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid">
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Number of Shares</b></p></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Weighted Average Grant Date Fair Value</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 76%; background-color: #CCEEFF"><font style="font-size: 8pt">Outstanding at December 31, 2015</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">7,359,915</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">7.83</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Granted</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">14,000</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">9.43</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="background-color: #CCEEFF"><font style="font-size: 8pt">Vested</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">(570,600</font></td>
<td><font style="font-size: 8pt">)</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">7.07</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Forfeited</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">(33,231</font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 8pt">)</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">11.79</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="background-color: #CCEEFF"><font style="font-size: 8pt">Outstanding at June 30, 2016</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1.5pt double"> </td>
<td style="border-bottom: black 1.5pt double; text-align: right"><font style="font-size: 8pt">6,770,084</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1.5pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1.5pt double; text-align: right"><font style="font-size: 8pt">7.85</font></td>
<td style="padding-bottom: 3pt"> </td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Total expense associated with restricted stock
grants was approximately $1.6 million and $6.2 million during the three months ended June 30, 2016 and 2015, respectively, and
$3.3 million, and $11.6 million during the six months ended June 30, 2016 and 2015, respectively. As of June 30, 2016, there
was approximately $17.3 million of total unrecognized compensation cost related to unvested time-based restricted stock, which
is expected to be recognized over a weighted-average period of 1.9 years. This amount does not include, as of June 30, 2016, 411,172
shares of restricted stock outstanding which are milestone-based and vest upon certain corporate milestones; and 2,234,958 shares
of restricted stock outstanding issued to non-employees, the expense for which is determined each reporting period at the measurement
date. The expense is recognized over the vesting period of the award. Until the measurement date is reached, the total amount
of compensation expense remains uncertain. We record compensation expense based on the fair value of the award at the reporting
date.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"><u>Warrants</u></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">The following table summarizes warrant activity
for the six months ended June 30, 2016:</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid">
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Warrants</b></p></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid">
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Weighted-average</b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>exercise price</b></p></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Aggregate Intrinsic Value</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 55%; background-color: #CCEEFF"><font style="font-size: 8pt">Outstanding at December 31, 2015</font></td>
<td style="width: 1%; padding-bottom: 3pt"> </td>
<td style="width: 1%"> </td>
<td style="width: 12%; text-align: right"><font style="font-size: 8pt">1,186,749</font></td>
<td style="width: 1%; padding-bottom: 3pt"> </td>
<td style="width: 1%; padding-bottom: 3pt"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 12%; text-align: right"><font style="font-size: 8pt">2.37</font></td>
<td style="width: 1%; padding-bottom: 3pt"> </td>
<td style="width: 1%; padding-bottom: 3pt"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 12%; text-align: right"><font style="font-size: 8pt">11,341,452</font></td>
<td style="width: 1%; padding-bottom: 3pt"> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Issued</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">--</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">--</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="background-color: #CCEEFF"><font style="font-size: 8pt">Exercised</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">(22,041</font></td>
<td><font style="font-size: 8pt">)</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">2.28</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Expired</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">--</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt; text-align: right"><font style="font-size: 8pt">--</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt; text-align: right"> </td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="background-color: #CCEEFF"><font style="font-size: 8pt">Outstanding at June 30, 2016</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1.5pt double"> </td>
<td style="border-bottom: black 1.5pt double; text-align: right"><font style="font-size: 8pt">1,164,708</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1.5pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1.5pt double; text-align: right"><font style="font-size: 8pt">2.37</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1.5pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1.5pt double; text-align: right"><font style="font-size: 8pt">4,291,924</font></td>
<td style="padding-bottom: 3pt"> </td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"><font style="font: 8pt Times New Roman, Times, Serif"><b><i>Stock-Based
Compensation</i></b></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="font: 8pt Times New Roman, Times, Serif">We
did not grant any stock options during the six months ended June 30, 2016 and 2015.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="font: normal 8pt Times New Roman, Times, Serif; text-transform: none; letter-spacing: normal; word-spacing: 0px; background-color: rgb(255, 255, 255)">The
following table summarizes stock-based compensation expense information about restricted stock and stock options for the three
and six months ended June 30, 2016 and 2015:</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 12pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td> </td><td style="font-size: 8pt"> </td>
<td colspan="7" style="font-size: 8pt; text-align: center"><font style="font-size: 8pt"> <b>Three months ended June 30,</b> </font></td><td style="font-size: 8pt"> </td>
<td colspan="7" style="font-size: 8pt; text-align: center"><font style="font-size: 8pt"> <b>Six months ended June 30,</b> </font></td></tr>
<tr style="vertical-align: bottom">
<td> </td><td style="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2016</td><td style="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; vertical-align: bottom; border-bottom: Black 1pt solid"><font style="font: 8pt Times New Roman, Times, Serif"><b>2016</b></font></td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; vertical-align: bottom; border-bottom: Black 1pt solid"><font style="font: 8pt Times New Roman, Times, Serif"><b>2015</b></font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 40%; font-size: 8pt; text-align: left">Stock-based compensation expense associated with restricted stock</td><td style="width: 3%; font-size: 8pt"> </td>
<td style="width: 1%; font-size: 8pt; text-align: left">$</td><td style="width: 10%; font-size: 8pt; text-align: right">1,648,397</td><td style="width: 1%; font-size: 8pt; text-align: left"> </td><td style="width: 3%; font-size: 8pt"> </td>
<td style="width: 1%; font-size: 8pt; text-align: left">$</td><td style="width: 10%; font-size: 8pt; text-align: right">6,242,986</td><td style="width: 1%; font-size: 8pt; text-align: left"> </td><td style="width: 3%; font-size: 8pt"> </td>
<td style="width: 1%; font-size: 8pt; text-align: left">$</td><td style="width: 10%; font-size: 8pt; text-align: right">3,347,362</td><td style="width: 1%; font-size: 8pt; text-align: left"> </td><td style="width: 3%"> </td>
<td style="width: 1%; text-align: left"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td><td style="width: 10%; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">11,600,014</font></td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 8pt; text-align: left; padding-bottom: 1pt">Stock-based compensation expense associated with option grants</td><td style="font-size: 8pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 8pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 8pt; text-align: right">—  </td><td style="padding-bottom: 1pt; font-size: 8pt; text-align: left"> </td><td style="font-size: 8pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 8pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 8pt; text-align: right">—  </td><td style="padding-bottom: 1pt; font-size: 8pt; text-align: left"> </td><td style="font-size: 8pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 8pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 8pt; text-align: right">—  </td><td style="padding-bottom: 1pt; font-size: 8pt; text-align: left"> </td><td style="font-size: 8pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 8pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 8pt; text-align: right">—  </td><td style="padding-bottom: 1pt; font-size: 8pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 2.5pt"> </td><td style="font-size: 8pt; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font-size: 8pt; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-size: 8pt; text-align: right">1,648,397</td><td style="padding-bottom: 2.5pt; font-size: 8pt; text-align: left"> </td><td style="font-size: 8pt; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font-size: 8pt; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-size: 8pt; text-align: right">6,242,986</td><td style="padding-bottom: 2.5pt; font-size: 8pt; text-align: left"> </td><td style="font-size: 8pt; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font-size: 8pt; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-size: 8pt; text-align: right">3,347,362</td><td style="padding-bottom: 2.5pt; font-size: 8pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td><td style="border-bottom: Black 2.5pt double; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">11,600,014</font></td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">The following is a summary of notes payable:</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<table cellspacing="0" cellpadding="0" style="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td colspan="11" style="border-bottom: black 1pt solid; text-align: center; line-height: 107%"><font style="font: 8pt Times New Roman, Times, Serif">  <b>June 30, 2016</b></font></td>
<td style="line-height: 107%"> </td>
<td colspan="11" style="border-bottom: black 1pt solid; text-align: center; line-height: 107%"><font style="font: 8pt Times New Roman, Times, Serif"> <b>December</b> <b>31</b>, <b>201</b>5</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 107%"> </td>
<td style="border-bottom: black 1pt solid; text-align: center; line-height: 107%"><font style="font: 8pt Times New Roman, Times, Serif"><b>Current portion, net</b></font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 107%"> </td>
<td style="border-bottom: black 1pt solid; text-align: center; line-height: 107%"><font style="font: 8pt Times New Roman, Times, Serif"><b>Non-current portion, net</b></font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 107%"> </td>
<td style="border-bottom: black 1pt solid; text-align: center; line-height: 107%"><font style="font: 8pt Times New Roman, Times, Serif"><b>Total</b></font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 107%"> </td>
<td style="border-bottom: black 1pt solid; text-align: center; line-height: 107%"><font style="font: 8pt Times New Roman, Times, Serif"><b>Current portion, net</b></font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 107%"> </td>
<td style="border-bottom: black 1pt solid; text-align: center; line-height: 107%"><font style="font: 8pt Times New Roman, Times, Serif"><b>Non-current portion, net</b></font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 107%"> </td>
<td style="border-bottom: black 1pt solid; text-align: center; line-height: 107%"><font style="font: 8pt Times New Roman, Times, Serif"><b>Total</b></font></td>
<td style="line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="width: 34%; line-height: 107%"><font style="font: 8pt Times New Roman, Times, Serif">Convertible 5% Notes Payable</font></td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; border-bottom: black 1pt solid; line-height: 107%"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 8%; border-bottom: black 1pt solid; text-align: right; line-height: 107%"><font style="font: 8pt Times New Roman, Times, Serif">90,564</font></td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; border-bottom: black 1pt solid; line-height: 107%"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 8%; border-bottom: black 1pt solid; text-align: right; line-height: 107%"><font style="font: 8pt Times New Roman, Times, Serif">—  </font></td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; border-bottom: black 1pt solid; line-height: 107%"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 8%; border-bottom: black 1pt solid; text-align: right; line-height: 107%"><font style="font: 8pt Times New Roman, Times, Serif">90,564</font></td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; border-bottom: black 1pt solid; line-height: 107%"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 8%; border-bottom: black 1pt solid; text-align: right; line-height: 107%"><font style="font: 8pt Times New Roman, Times, Serif">211,549</font></td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; border-bottom: black 1pt solid; line-height: 107%"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 8%; border-bottom: black 1pt solid; text-align: right; line-height: 107%"><font style="font: 8pt Times New Roman, Times, Serif">—  </font></td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; line-height: 107%"> </td>
<td style="width: 1%; border-bottom: black 1pt solid; line-height: 107%"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 8%; border-bottom: black 1pt solid; text-align: right; line-height: 107%"><font style="font: 8pt Times New Roman, Times, Serif">211,549</font></td>
<td style="width: 1%; line-height: 107%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="line-height: 107%"><font style="font: 8pt Times New Roman, Times, Serif">  Total</font></td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 107%"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 8pt Times New Roman, Times, Serif">90,564</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 107%"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 8pt Times New Roman, Times, Serif">—  </font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 107%"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 8pt Times New Roman, Times, Serif">90,564</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 107%"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 8pt Times New Roman, Times, Serif">211,549</font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 107%"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 8pt Times New Roman, Times, Serif">—  </font></td>
<td style="line-height: 107%"> </td>
<td style="line-height: 107%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 107%"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 2.25pt double; text-align: right; line-height: 107%"><font style="font: 8pt Times New Roman, Times, Serif">211,549</font></td>
<td style="line-height: 107%"> </td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"><b><i>Convertible 5% Notes Payable</i></b></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">On March 8, 2010, Manhattan entered into
an Agreement and Plan of Merger (the "Merger Agreement") by and among Manhattan, Ariston and Ariston Merger Corp., a
Delaware corporation and wholly-owned subsidiary of Manhattan (the "Merger Sub").  Pursuant to the terms and conditions
of the Merger Agreement, on March 8, 2010, the Merger Sub merged with and into Ariston (the "Merger"), with Ariston being
the surviving corporation of the Merger.  As a result of the Merger, Ariston became a wholly-owned subsidiary of Manhattan. </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">The 5% Notes and accrued and unpaid interest
thereon are convertible at the option of the holder into common stock at the conversion price of $1,125 per share.  Ariston
agreed to make quarterly payments on the 5% Notes equal to 50% of the net product cash flow received from the exploitation or commercialization
of Ariston’s product candidates, AST-726 and AST-915.  <font style="background-color: white">We have no obligation
under the 5% Notes aside from a) 50% of the net product cash flows from Ariston’s product candidates, if any, payable to
noteholders; and b) the conversion feature, discussed above.</font> Interest accrues monthly, is added to principal on an annual
basis, every March 8, and is payable at maturity, which was March 8, 2015.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="background-color: white">The
cumulative liability including accrued and unpaid interest of these notes was approximately $16.8 million at June 30, 2016 and
$19.9 million at December 31, 2015. </font>No payments have been made on the 5% Notes as of June 30, 2016.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">In December 2011, we elected the fair
value option for valuing the 5% Notes. The fair value option was elected in order to reflect in our financial statements the assumptions
that market participants use in evaluating these financial instruments (See Note 4 for further details).</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 11pt/107% Calibri, Helvetica, Sans-Serif; margin: 0 0 8pt"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"><b><i>BET</i></b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">In May 2016, as part of a broader agreement with
Jubilant Biosys (“Jubilant”), an India-based biotechnology company, we entered into a sub-license agreement (“JBET
Agreement”) with Checkpoint Therapeutics, Inc. (“Checkpoint”), (see Note 8), for the
development and commercialization of Jubilant’s novel BET inhibitor program in the field of hematological malignancies.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Under the terms of the agreement, we
paid Checkpoint an up-front licensing fee of $1.0 million and will make additional payments contingent on certain
preclinical, clinical, and regulatory milestones, including commercial milestones totaling up to approximately $177
million and a single-digit royalty on net sales. TG will also provide funding to support certain targeted
research efforts at Jubilant.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: right; text-indent: 0.5in">  </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"><b><i>TG-1101</i></b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">In November 2012, we entered into an exclusive
(within the territory) sublicense agreement with Ildong relating to the development and commercialization of TG-1101 in South Korea
and Southeast Asia. Under the terms of the sublicense agreement, Ildong has been granted a royalty bearing, exclusive right, including
the right to grant sublicenses, to develop and commercialize TG-1101 in South Korea, Taiwan, Singapore, Indonesia, Malaysia, Thailand,
Philippines, Vietnam, and Myanmar.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">An upfront payment of $2.0 million, which was
received in December 2012,<font style="background-color: white"> net of $0.3 million of income tax withholdings</font>, is
being recognized as license revenue on a straight-line basis over the life of the agreement, which is through the expiration of
the last licensed patent right or 15 years after the first commercial sale of a product in such country, unless the agreement is
earlier terminated, and represents the estimated period over which we will have certain ongoing responsibilities under the sublicense
agreement. We recorded license revenue of approximately $38,000 for each of the three months ended June 30, 2016 and 2015, and
$76,000 for each of the six months ended June 30, 2016 and 2015 and, at June 30, 2016 and December 31, 2015, have deferred revenue
of approximately $1.4 million and $1.5 million, respectively, associated with this $2.0 million payment (approximately $0.2 million
of which has been classified in current liabilities at June 30, 2016 and December 31, 2015).</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">We may receive up to an
additional $5.0 million in payments upon the achievement of pre-specified milestones. In addition, upon commercialization, Ildong
will make royalty payments to us on net sales of TG-1101 in the sublicense territory.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We have incurred operating losses since our inception
and expect to continue to incur operating losses for the foreseeable future and, may never become profitable. As of June 30, 2016,
we have an accumulated deficit of approximately $187.9 million.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Our major sources of cash have been proceeds
from the private placement and public offering of equity securities. We have not yet commercialized any of our drug candidates
and cannot be sure if we will ever be able to do so. Even if we commercialize one or more of our drug candidates, we may not become
profitable. Our ability to achieve profitability depends on many factors, including our ability to obtain regulatory approval for
our drug candidates; successfully completing any post-approval regulatory obligations; and successfully commercializing our drug
candidates alone or in partnership. We may continue to incur substantial operating losses even if we begin to generate revenues
from our drug candidates.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">As of June 30, 2016, we had approximately
$75.8 million in cash, cash equivalents, investment securities, and interest receivable. We anticipate that our cash and cash
equivalents and investments will be sufficient to fund our anticipated operating cash requirements for approximately 18 to
24 months from June 30, 2016. The actual amount of cash that we will need to operate is subject to many factors, including,
but not limited to, the timing, design and conduct of clinical trials for our drug candidates. We are dependent upon
significant future financing to provide the cash necessary to execute our current strategic plan, including the
commercialization of any of our drug candidates.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Our common stock is listed on the Nasdaq Capital
Market and trades under the symbol “TGTX.”</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">The preparation of financial statements in conformity
with GAAP requires management to make estimates and judgments that affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and
expenses during the applicable reporting period. Actual results could differ from those estimates. Such differences could be material
to the consolidated financial statements.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We treat liquid investments with original maturities
of three months or less when purchased as cash and cash equivalents.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We record cash pledged or held in trust as restricted
cash. As of June 30, 2016 and December 31, 2015, we have approximately $0.6 million of restricted cash pledged to secure a line
of credit as a security deposit for an <font style="background-color: white">Office Agreement </font>(see Note 8).</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Investment securities at June 30, 2016 and December
31, 2015 consist of short-term and long-term government securities. We classify these securities as held-to-maturity. Held-to-maturity
securities are those securities in which we have the ability and intent to hold the security until maturity. Held-to-maturity securities
are recorded at amortized cost, adjusted for the amortization or accretion of premiums or discounts. Premiums and discounts are
amortized or accreted over the life of the related held-to-maturity security as an adjustment to yield using the effective interest
method.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">A decline in the market value of any investment
security below cost, that is deemed to be other than temporary, results in a reduction in the carrying amount to fair value. The
impairment is charged to operations and a new cost basis for the security is established. Other-than-temporary impairment charges
would be included in interest and other (income) expense, net. Dividend and interest income are recognized when earned.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Financial instruments that potentially subject
the Company to concentrations of credit risk consist primarily of cash and cash equivalents, short-term investments and long-term
investments. The Company maintains its cash and cash equivalents, short-term investments and long-term investments with high-credit
quality financial institutions. At times, such amounts may exceed federally-insured limits.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We recognize license revenue in accordance with
the revenue recognition guidance of the FASB Accounting Standards Codification (or “Codification”). We analyze each
element of our licensing agreement to determine the appropriate revenue recognition. The terms of the license agreement may include
payments to us of non-refundable up-front license fees, milestone payments if specified objectives are achieved, and/or royalties
on product sales. We recognize revenue from upfront payments over the period of significant involvement under the related agreements
unless the fee is in exchange for products delivered or services rendered that represent the culmination of a separate earnings
process and no further performance obligation exists under the contract. We recognize milestone payments as revenue upon the achievement
of specified milestones only if (1) the milestone payment is non-refundable, (2) substantive effort is involved in achieving the
milestone, (3) the amount of the milestone is reasonable in relation to the effort expended or the risk associated with achievement
of the milestone, and (4) the milestone is at risk for both parties. If any of these conditions are not met, we defer the milestone
payment and recognize it as revenue over the estimated period of performance under the contract.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Generally, research and development costs are
expensed as incurred. Non-refundable advance payments for goods or services that will be used or rendered for future research and
development activities are deferred and amortized over the period that the goods are delivered or the related services are performed,
subject to an assessment of recoverability. We make estimates of costs incurred in relation to external clinical research organizations,
or CROs, and clinical site costs. We analyze the progress of clinical trials, including levels of patient enrollment, invoices
received and contracted costs when evaluating the adequacy of the amount expensed and the related prepaid asset and accrued liability.
Significant judgments and estimates must be made and used in determining the accrued liability balance and expense in any accounting
period. We review and accrue CRO expenses and clinical trial study expenses based on work performed and rely upon estimates of
those costs applicable to the stage of completion of a study. Accrued CRO costs are subject to revisions as such trials progress
to completion. Revisions are charged to expense in the period in which the facts that give rise to the revision become known. With
respect to clinical site costs, the financial terms of these agreements are subject to negotiation and vary from contract to contract.
Payments under these contracts may be uneven, and depend on factors such as the achievement of certain events, the successful recruitment
of patients, the completion of portions of the clinical trial or similar conditions. The objective of our policy is to match the
recording of expenses in our financial statements to the actual services received and efforts expended. As such, expense accruals
related to clinical site costs are recognized based on our estimate of the degree of completion of the event or events specified
in the specific clinical study or trial contract.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Prepaid research and development in our consolidated
balance sheets includes, among other things, certain costs related to development and manufacturing services. These development
and manufacturing agreements often require payments in advance of services performed or goods received. Accordingly, as of June
30, 2016 and December 31, 2015, we recorded approximately $14.5 million and $9.2 million of prepaid development and manufacturing
services, respectively, in prepaid research and development related to such advance agreements.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Income taxes are accounted for under the asset
and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary
differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases,
operating losses and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected
to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect
on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment
date. If the likelihood of realizing the deferred tax assets or liability is less than “more likely than not,” a valuation
allowance is then created.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We, and our subsidiaries, file income tax returns
in the U.S. Federal jurisdiction and in various states. We have tax net operating loss carryforwards that are subject to examination
for a number of years beyond the year in which they were generated for tax purposes. Since a portion of these net operating loss
carryforwards may be utilized in the future, many of these net operating loss carryforwards will remain subject to examination.
We recognize interest and penalties, if any, related to uncertain income tax positions in income tax expense.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We recognize all share-based payments to employees
and non-employee directors (as compensation for service) as noncash compensation expense in the condensed consolidated financial
statements based on the fair values of such payments. Stock-based compensation expense recognized each period is based on the value
of the portion of share-based payment awards that is ultimately expected to vest during the period. Forfeitures are estimated at
the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">For share-based payments to consultants and other
third-parties (including related parties), noncash compensation expense is determined at the “measurement date.” The
expense is recognized over the vesting period of the award. Until the measurement date is reached, the total amount of compensation
expense remains uncertain. We record compensation expense based on the fair value of the award at the reporting date. The awards
to consultants and other third-parties (including related parties) are then revalued, or the total compensation is recalculated
based on the then current fair value, at each subsequent reporting date.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">In addition, because some of the options, restricted
stock and warrants issued to employees, consultants and other third-parties vest upon achievement of certain milestones, the total
expense is uncertain. Compensation expense for such awards that vest upon the achievement of milestones is recognized when the
achievement of such milestones becomes probable.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Basic net loss per share of our common stock
is calculated by dividing net loss applicable to the common stock by the weighted-average number of our common stock outstanding
for the period. Diluted net loss per share of common stock is the same as basic net loss per share of common stock since potentially
dilutive securities from stock options, stock warrants and convertible preferred stock would have an antidilutive effect either
because we incurred a net loss during the period presented or because such potentially dilutive securities were out of the money
and the Company realized net income during the period presented. The amounts of potentially dilutive securities excluded from the
calculation were 6,449,737 and 5,668,134 for the three and six months ended June 30, 2016 and 2015, respectively. The following
outstanding shares of common stock equivalents were excluded from the computation of net loss per share attributable to common
stockholders for the periods presented because including them would have been antidilutive:</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="6" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Three and Six Months Ended June 30,</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>2016</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>2015</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 65%"><font style="font-size: 8pt">Unvested restricted stock</font></td>
<td style="width: 1%"> </td>
<td style="width: 0%"> </td>
<td style="width: 13%; text-align: right"><font style="font-size: 8pt">5,270,084</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 0%"> </td>
<td style="width: 12%; text-align: right"><font style="font-size: 8pt">4,431,430</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Warrants</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">1,164,708</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">1,218,749</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Shares issuable upon note conversion</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">14,945</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">17,803</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Options</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">--</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">152</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">    Total</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">6,449,737</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">5,668,134</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Long-lived assets are reviewed for potential
impairment when circumstances indicate that the carrying value of long-lived tangible and intangible assets with finite lives may
not be recoverable. Management’s policy in determining whether an impairment indicator exists, a triggering event, comprises
measurable operating performance criteria as well as qualitative measures. If an analysis is necessitated by the occurrence of
a triggering event, we make certain assumptions in determining the impairment amount. If the carrying amount of an asset exceeds
its estimated future cash flows, an impairment charge is recognized.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Goodwill is reviewed for impairment annually,
or earlier when events arise that could indicate that an impairment exists. We test for goodwill impairment using a two-step process.
The first step compares the fair value of the reporting unit with the unit's carrying value, including goodwill. When the carrying
value of the reporting unit is greater than fair value, the unit’s goodwill may be impaired, and the second step must be
completed to measure the amount of the goodwill impairment charge, if any. In the second step, the implied fair value of the reporting
unit’s goodwill is compared with the carrying amount of the unit’s goodwill. If the carrying amount is greater than
the implied fair value, the carrying value of the goodwill must be written down to its implied fair value. We will continue to
perform impairment tests annually, at December 31, and whenever events or changes in circumstances suggest that the carrying value
of an asset may not be recoverable.</p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="6" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Three and Six Months Ended June 30,</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>2016</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>2015</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 65%"><font style="font-size: 8pt">Unvested restricted stock</font></td>
<td style="width: 1%"> </td>
<td style="width: 0%"> </td>
<td style="width: 13%; text-align: right"><font style="font-size: 8pt">5,270,084</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 0%"> </td>
<td style="width: 12%; text-align: right"><font style="font-size: 8pt">4,431,430</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Warrants</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">1,164,708</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">1,218,749</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Shares issuable upon note conversion</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">14,945</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">17,803</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Options</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">--</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">152</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">    Total</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">6,449,737</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">5,668,134</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
</table>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>June 30, 2016</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>December 31, 2015</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 64%"><font style="font-size: 8pt">Money market funds</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 15%; text-align: right"><font style="font-size: 8pt">8,514,029</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 15%; text-align: right"><font style="font-size: 8pt">8,265,583</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Checking and bank deposits</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">20,063,803</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">46,795,746</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">    Total</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1.5pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1.5pt double; text-align: right"><font style="font-size: 8pt">28,577,832</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1.5pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1.5pt double; text-align: right"><font style="font-size: 8pt">55,061,329</font></td>
<td style="padding-bottom: 3pt"> </td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">The following tables summarize our investment
securities at June 30, 2016 and December 31, 2015:</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="14" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>June 30, 2016</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Amortized cost, as adjusted</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Gross unrealized holding gains</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Gross unrealized holding losses</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Estimated fair value</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Short-term investments:</font></td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 44%"><font style="font-size: 8pt">Obligations of domestic governmental agencies (maturing between July 2016 and June 2017) (held-to-maturity)</font></td>
<td style="width: 1%"> </td>
<td style="width: 0%"><font style="font-size: 8pt">$</font></td>
<td style="width: 10%; text-align: right"><font style="font-size: 8pt">25,680,319</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 0%"><font style="font-size: 8pt">$</font></td>
<td style="width: 10%; text-align: right"><font style="font-size: 8pt">22,601</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 0%"><font style="font-size: 8pt">$</font></td>
<td style="width: 10%; text-align: right"><font style="font-size: 8pt">--</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 0%"><font style="font-size: 8pt">$</font></td>
<td style="width: 10%; text-align: right"><font style="font-size: 8pt">25,702,920</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt"> Long-term investments:</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Obligations of domestic governmental agencies (maturing between July 2017 and January 2018) (held-to-maturity)</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">21,435,015</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">80,328</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">--</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">21,515,343</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">    Total short-term and long-term investment securities</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1.5pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1.5pt double; text-align: right"><font style="font-size: 8pt">47,115,334</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1.5pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1.5pt double; text-align: right"><font style="font-size: 8pt">102,929</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1.5pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1.5pt double; text-align: right"><font style="font-size: 8pt">--</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1.5pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1.5pt double; text-align: right"><font style="font-size: 8pt">47,218,263</font></td>
<td style="padding-bottom: 3pt"> </td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="14" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>December 31, 2015</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Amortized cost, as adjusted</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Gross unrealized holding gains</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Gross unrealized holding losses</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Estimated fair value</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Short-term investments:</font></td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 44%"><font style="font-size: 8pt">Obligations of domestic governmental agencies (maturing between January 2016 and December 2016) (held-to-maturity)</font></td>
<td style="width: 1%"> </td>
<td style="width: 0%"><font style="font-size: 8pt">$</font></td>
<td style="width: 10%; text-align: right"><font style="font-size: 8pt">22,166,512</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 0%"><font style="font-size: 8pt">$</font></td>
<td style="width: 10%; text-align: right"><font style="font-size: 8pt">--</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 0%"><font style="font-size: 8pt">$</font></td>
<td style="width: 10%; text-align: right"><font style="font-size: 8pt">22,822</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 0%"><font style="font-size: 8pt">$</font></td>
<td style="width: 10%; text-align: right"><font style="font-size: 8pt">22,143,690</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify"><font style="font-size: 8pt"> Long-term investments:</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Obligations of domestic governmental agencies (maturing between January 2017 and December 2017) (held-to-maturity)</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">25,003,032</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">--</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">85,846</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">24,917,186</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">    Total short-term and long-term investment securities</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1.5pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1.5pt double; text-align: right"><font style="font-size: 8pt">47,169,544</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1.5pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1.5pt double; text-align: right"><font style="font-size: 8pt">--</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1.5pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1.5pt double; text-align: right"><font style="font-size: 8pt">108,668</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1.5pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1.5pt double; text-align: right"><font style="font-size: 8pt">47,060,876</font></td>
<td style="padding-bottom: 3pt"> </td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">The following tables provide the fair value measurements
of applicable financial liabilities as of June 30, 2016 and December 31, 2015:</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="14" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Financial liabilities at fair value as of June 30, 2016</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Level 1</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Level 2</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Level 3</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Total</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 52%"><font style="font-size: 8pt">5% Notes</font></td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 0%; border-bottom: black 1pt solid"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">--</font></td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 0%; border-bottom: black 1pt solid"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">--</font></td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 0%; border-bottom: black 1pt solid"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">90,564</font></td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 0%; border-bottom: black 1pt solid"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">90,564</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">    Total</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1.5pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1.5pt double; text-align: right"><font style="font-size: 8pt">--</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1.5pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1.5pt double; text-align: right"><font style="font-size: 8pt">--</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1.5pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1.5pt double; text-align: right"><font style="font-size: 8pt">90,564</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1.5pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1.5pt double; text-align: right"><font style="font-size: 8pt">90,564</font></td>
<td style="padding-bottom: 3pt"> </td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="14" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Financial liabilities at fair value as of December 31, 2015</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Level 1</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Level 2</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Level 3</b></font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Total</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td>
<td> </td>
<td colspan="2" style="text-align: center"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 52%"><font style="font-size: 8pt">5% Notes</font></td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 0%; border-bottom: black 1pt solid"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">--</font></td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 0%; border-bottom: black 1pt solid"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">--</font></td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 0%; border-bottom: black 1pt solid"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">211,549</font></td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 1%; padding-bottom: 1.5pt"> </td>
<td style="width: 0%; border-bottom: black 1pt solid"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">211,549</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">    Total</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1.5pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1.5pt double; text-align: right"><font style="font-size: 8pt">--</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1.5pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1.5pt double; text-align: right"><font style="font-size: 8pt">--</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1.5pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1.5pt double; text-align: right"><font style="font-size: 8pt">211,549</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1.5pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1.5pt double; text-align: right"><font style="font-size: 8pt">211,549</font></td>
<td style="padding-bottom: 3pt"> </td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td style="width: 88%"><font style="font-size: 8pt">Fair value at December 31, 2015</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">211,549</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Interest accrued on face value of 5% Notes</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">463,161</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Conversion of 5% notes</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">(30,601</font></td>
<td><font style="font-size: 8pt">)</font></td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Change in fair value of Level 3 liabilities</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">(553,545</font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 8pt">)</font></td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Fair value at June 30, 2016</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1.5pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1.5pt double; text-align: right"><font style="font-size: 8pt">90,564</font></td>
<td style="padding-bottom: 3pt"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
</table>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid">
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Number of Shares</b></p></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Weighted Average Grant Date Fair Value</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 76%; background-color: #CCEEFF"><font style="font-size: 8pt">Outstanding at December 31, 2015</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">7,359,915</font></td>
<td style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 9%; text-align: right"><font style="font-size: 8pt">7.83</font></td>
<td style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Granted</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">14,000</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">9.43</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="background-color: #CCEEFF"><font style="font-size: 8pt">Vested</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">(570,600</font></td>
<td><font style="font-size: 8pt">)</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">7.07</font></td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Forfeited</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">(33,231</font></td>
<td style="padding-bottom: 1.5pt"><font style="font-size: 8pt">)</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">11.79</font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="background-color: #CCEEFF"><font style="font-size: 8pt">Outstanding at June 30, 2016</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1.5pt double"> </td>
<td style="border-bottom: black 1.5pt double; text-align: right"><font style="font-size: 8pt">6,770,084</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1.5pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1.5pt double; text-align: right"><font style="font-size: 8pt">7.85</font></td>
<td style="padding-bottom: 3pt"> </td></tr>
</table>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid">
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Warrants</b></p></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid">
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>Weighted-average</b></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>exercise price</b></p></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center"><font style="font-size: 8pt"><b>Aggregate Intrinsic Value</b></font></td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="width: 55%; background-color: #CCEEFF"><font style="font-size: 8pt">Outstanding at December 31, 2015</font></td>
<td style="width: 1%; padding-bottom: 3pt"> </td>
<td style="width: 1%"> </td>
<td style="width: 12%; text-align: right"><font style="font-size: 8pt">1,186,749</font></td>
<td style="width: 1%; padding-bottom: 3pt"> </td>
<td style="width: 1%; padding-bottom: 3pt"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 12%; text-align: right"><font style="font-size: 8pt">2.37</font></td>
<td style="width: 1%; padding-bottom: 3pt"> </td>
<td style="width: 1%; padding-bottom: 3pt"> </td>
<td style="width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="width: 12%; text-align: right"><font style="font-size: 8pt">11,341,452</font></td>
<td style="width: 1%; padding-bottom: 3pt"> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Issued</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">--</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">--</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td style="background-color: #CCEEFF"><font style="font-size: 8pt">Exercised</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">(22,041</font></td>
<td><font style="font-size: 8pt">)</font></td>
<td> </td>
<td> </td>
<td style="text-align: right"><font style="font-size: 8pt">2.28</font></td>
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td> </td></tr>
<tr style="vertical-align: bottom">
<td><font style="font-size: 8pt">Expired</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="border-bottom: black 1pt solid"> </td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font-size: 8pt">--</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt; text-align: right"><font style="font-size: 8pt">--</font></td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt"> </td>
<td style="padding-bottom: 1.5pt; text-align: right"> </td>
<td style="padding-bottom: 1.5pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="background-color: #CCEEFF"><font style="font-size: 8pt">Outstanding at June 30, 2016</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1.5pt double"> </td>
<td style="border-bottom: black 1.5pt double; text-align: right"><font style="font-size: 8pt">1,164,708</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1.5pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1.5pt double; text-align: right"><font style="font-size: 8pt">2.37</font></td>
<td style="padding-bottom: 3pt"> </td>
<td style="padding-bottom: 3pt"> </td>
<td style="border-bottom: black 1.5pt double"><font style="font-size: 8pt">$</font></td>
<td style="border-bottom: black 1.5pt double; text-align: right"><font style="font-size: 8pt">4,291,924</font></td>
<td style="padding-bottom: 3pt"> </td></tr>
</table>
<p style="margin: 0pt"></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 12pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td> </td><td style="font-size: 8pt"> </td>
<td colspan="7" style="font-size: 8pt; text-align: center"><font style="font-size: 8pt"> <b>Three months ended June 30,</b> </font></td><td style="font-size: 8pt"> </td>
<td colspan="7" style="font-size: 8pt; text-align: center"><font style="font-size: 8pt"> <b>Six months ended June 30,</b> </font></td></tr>
<tr style="vertical-align: bottom">
<td> </td><td style="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2016</td><td style="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; vertical-align: bottom; border-bottom: Black 1pt solid"><font style="font: 8pt Times New Roman, Times, Serif"><b>2016</b></font></td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; vertical-align: bottom; border-bottom: Black 1pt solid"><font style="font: 8pt Times New Roman, Times, Serif"><b>2015</b></font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 40%; font-size: 8pt; text-align: left">Stock-based compensation expense associated with restricted stock</td><td style="width: 3%; font-size: 8pt"> </td>
<td style="width: 1%; font-size: 8pt; text-align: left">$</td><td style="width: 10%; font-size: 8pt; text-align: right">1,648,397</td><td style="width: 1%; font-size: 8pt; text-align: left"> </td><td style="width: 3%; font-size: 8pt"> </td>
<td style="width: 1%; font-size: 8pt; text-align: left">$</td><td style="width: 10%; font-size: 8pt; text-align: right">6,242,986</td><td style="width: 1%; font-size: 8pt; text-align: left"> </td><td style="width: 3%; font-size: 8pt"> </td>
<td style="width: 1%; font-size: 8pt; text-align: left">$</td><td style="width: 10%; font-size: 8pt; text-align: right">3,347,362</td><td style="width: 1%; font-size: 8pt; text-align: left"> </td><td style="width: 3%"> </td>
<td style="width: 1%; text-align: left"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td><td style="width: 10%; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">11,600,014</font></td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-size: 8pt; text-align: left; padding-bottom: 1pt">Stock-based compensation expense associated with option grants</td><td style="font-size: 8pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 8pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 8pt; text-align: right">—  </td><td style="padding-bottom: 1pt; font-size: 8pt; text-align: left"> </td><td style="font-size: 8pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 8pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 8pt; text-align: right">—  </td><td style="padding-bottom: 1pt; font-size: 8pt; text-align: left"> </td><td style="font-size: 8pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 8pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 8pt; text-align: right">—  </td><td style="padding-bottom: 1pt; font-size: 8pt; text-align: left"> </td><td style="font-size: 8pt; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 8pt; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 8pt; text-align: right">—  </td><td style="padding-bottom: 1pt; font-size: 8pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 2.5pt"> </td><td style="font-size: 8pt; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font-size: 8pt; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-size: 8pt; text-align: right">1,648,397</td><td style="padding-bottom: 2.5pt; font-size: 8pt; text-align: left"> </td><td style="font-size: 8pt; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font-size: 8pt; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-size: 8pt; text-align: right">6,242,986</td><td style="padding-bottom: 2.5pt; font-size: 8pt; text-align: left"> </td><td style="font-size: 8pt; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font-size: 8pt; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-size: 8pt; text-align: right">3,347,362</td><td style="padding-bottom: 2.5pt; font-size: 8pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td><td style="border-bottom: Black 2.5pt double; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">11,600,014</font></td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
</table>
<p style="margin: 0pt"></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 12pt Times New Roman, Times, Serif"><tr style="vertical-align: bottom"><td></td><td style="font-size: 8pt; padding-bottom: 1pt"> </td>
<td colspan="11" style="font-size: 8pt; text-align: center; border-bottom: Black 1pt solid"><font style="font-size: 8pt">  <b>June 30, 2016</b></font></td><td style="font-size: 8pt; padding-bottom: 1pt"> </td>
<td colspan="11" style="font-size: 8pt; text-align: center; border-bottom: Black 1pt solid"><font style="font-size: 8pt"> <b>December</b> <b>31</b>, <b>201</b>5</font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 1pt"> </td><td style="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 8pt; font-weight: bold; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 8pt; font-weight: bold; text-align: center; vertical-align: bottom"><font style="font-size: 8pt"><b>Current portion, net</b></font></td><td style="padding-bottom: 1pt; font-size: 8pt; font-weight: bold; text-align: left"> </td><td style="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 8pt; font-weight: bold; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 8pt; font-weight: bold; text-align: center; vertical-align: bottom"><font style="font-size: 8pt"><b>Non-current portion, net</b></font></td><td style="padding-bottom: 1pt; font-size: 8pt; font-weight: bold; text-align: left"> </td><td style="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 8pt; font-weight: bold; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 8pt; font-weight: bold; text-align: center; vertical-align: bottom"><font style="font-size: 8pt"><b>Total</b></font></td><td style="padding-bottom: 1pt; font-size: 8pt; font-weight: bold; text-align: left"> </td><td style="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 8pt; font-weight: bold; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 8pt; font-weight: bold; text-align: center; vertical-align: bottom"><font style="font-size: 8pt"><b>Current portion, net</b></font></td><td style="padding-bottom: 1pt; font-size: 8pt; font-weight: bold; text-align: left"> </td><td style="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 8pt; font-weight: bold; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 8pt; font-weight: bold; text-align: center; vertical-align: bottom"><font style="font-size: 8pt"><b>Non-current portion, net</b></font></td><td style="padding-bottom: 1pt; font-size: 8pt; font-weight: bold; text-align: left"> </td><td style="font-size: 8pt; font-weight: bold; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-size: 8pt; font-weight: bold; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-size: 8pt; font-weight: bold; text-align: center; vertical-align: bottom"><font style="font-size: 8pt"><b>Total</b></font></td><td style="padding-bottom: 1pt; font-size: 8pt; font-weight: bold; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="width: 28%; font-size: 8pt; text-align: left; padding-bottom: 1pt">Convertible 5% Notes Payable</td><td style="width: 2%; font-size: 8pt; padding-bottom: 1pt"> </td>
<td style="width: 1%; border-bottom: Black 1pt solid; font-size: 8pt; text-align: left">$</td><td style="width: 8%; border-bottom: Black 1pt solid; font-size: 8pt; text-align: right">90,564</td><td style="width: 1%; padding-bottom: 1pt; font-size: 8pt; text-align: left"> </td><td style="width: 2%; font-size: 8pt; padding-bottom: 1pt"> </td>
<td style="width: 1%; border-bottom: Black 1pt solid; font-size: 8pt; text-align: left">$</td><td style="width: 8%; border-bottom: Black 1pt solid; font-size: 8pt; text-align: right">—  </td><td style="width: 1%; padding-bottom: 1pt; font-size: 8pt; text-align: left"> </td><td style="width: 2%; font-size: 8pt; padding-bottom: 1pt"> </td>
<td style="width: 1%; border-bottom: Black 1pt solid; font-size: 8pt; text-align: left">$</td><td style="width: 8%; border-bottom: Black 1pt solid; font-size: 8pt; text-align: right">90,564</td><td style="width: 1%; padding-bottom: 1pt; font-size: 8pt; text-align: left"> </td><td style="width: 2%; font-size: 8pt; padding-bottom: 1pt"> </td>
<td style="width: 1%; border-bottom: Black 1pt solid; font-size: 8pt; text-align: left">$</td><td style="width: 8%; border-bottom: Black 1pt solid; font-size: 8pt; text-align: right">211,549</td><td style="width: 1%; padding-bottom: 1pt; font-size: 8pt; text-align: left"> </td><td style="width: 2%; font-size: 8pt; padding-bottom: 1pt"> </td>
<td style="width: 1%; border-bottom: Black 1pt solid; font-size: 8pt; text-align: left">$</td><td style="width: 8%; border-bottom: Black 1pt solid; font-size: 8pt; text-align: right">—  </td><td style="width: 1%; padding-bottom: 1pt; font-size: 8pt; text-align: left"> </td><td style="width: 2%; font-size: 8pt; padding-bottom: 1pt"> </td>
<td style="width: 1%; border-bottom: Black 1pt solid; font-size: 8pt; text-align: left">$</td><td style="width: 8%; border-bottom: Black 1pt solid; font-size: 8pt; text-align: right">211,549</td><td style="width: 1%; padding-bottom: 1pt; font-size: 8pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-size: 8pt; padding-bottom: 2.5pt">  Total</td><td style="font-size: 8pt; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font-size: 8pt; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-size: 8pt; text-align: right">90,564</td><td style="padding-bottom: 2.5pt; font-size: 8pt; text-align: left"> </td><td style="font-size: 8pt; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font-size: 8pt; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-size: 8pt; text-align: right">—  </td><td style="padding-bottom: 2.5pt; font-size: 8pt; text-align: left"> </td><td style="font-size: 8pt; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font-size: 8pt; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-size: 8pt; text-align: right">90,564</td><td style="padding-bottom: 2.5pt; font-size: 8pt; text-align: left"> </td><td style="font-size: 8pt; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font-size: 8pt; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-size: 8pt; text-align: right">211,549</td><td style="padding-bottom: 2.5pt; font-size: 8pt; text-align: left"> </td><td style="font-size: 8pt; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font-size: 8pt; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-size: 8pt; text-align: right">—  </td><td style="padding-bottom: 2.5pt; font-size: 8pt; text-align: left"> </td><td style="font-size: 8pt; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font-size: 8pt; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-size: 8pt; text-align: right">211,549</td><td style="padding-bottom: 2.5pt; font-size: 8pt; text-align: left"> </td></tr></table>
90564
211549
463161
-553545
-30601
7359915
6770084
14000
570600
33231
7.83
7.85
9.43
7.07
11.79
1186749
1164708
0
22041
0
11341452
4291924
2.37
2.37
2.28
0
0
-56988
-48771
0
47797
30601
0
30601
3
30598
3201
0
-33
33
-33231
3447273
397
3446876
396811
3347362
3347362
1700000
2100000
100000
1100000
1200000
100000
400000
20000
1400000
1500000
3347362
11600014
1648397
6242986
75800000
600000
14500000
9200000
6449737
5668134
5270084
1164708
14945
0
4431430
1218749
17803
152
0
0
0
0
3347362
11600014
1648397
6242986
17300000
P1Y10M24D
396811
178000000
0
4183861
16800000
19900000
.05
0.05
0.05
2000000
1000000
1000000
300000
5000000
177000000
P15Y
2000000
2000000
.50
1125
3600000
3500000
2015-03-08
1100000
600000
0.45
24000
54456623
796376
818472
681720
0
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In May 2016, the
Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-11, “Rescission of SEC Guidance Because of
Accounting Standards Update 2014-09 and 2014-16 Pursuant to Staff Announcements at the March 3, 2016 EITF Meeting”
(“ASU 2016-11”).  ASU 2016-11 rescinds certain SEC guidance from the <i>FASB Accounting Standards
Codification</i> in response to announcements made by the SEC staff at the Emerging Issues Task Force’s March 3, 2016
meeting.  Specifically, ASU 2016-11 supersedes SEC observer comments on the following topics:</p>
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<table cellpadding="0" cellspacing="0" style="width: 100%; font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><tr style="vertical-align: top">
<td style="width: 0.75in"></td><td style="width: 0.25in"><font style="font: 8pt Symbol">·</font></td><td><font style="font-size: 8pt">Upon the adoption of ASU 2014-09:</font></td></tr></table>
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<td style="width: 1in"></td><td style="width: 0.25in"><font style="font: 8pt Symbol">·</font></td><td><font style="font-size: 8pt">Revenue and expense recognition for freight services in process (ASC 605-20-S99-2)</font></td></tr></table>
<table cellpadding="0" cellspacing="0" style="width: 100%; font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><tr style="vertical-align: top">
<td style="width: 1in"></td><td style="width: 0.25in"><font style="font: 8pt Symbol">·</font></td><td><font style="font-size: 8pt">Accounting for shipping and handling fees and costs (ASC 605-45-S99-1)</font></td></tr></table>
<table cellpadding="0" cellspacing="0" style="width: 100%; font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><tr style="vertical-align: top">
<td style="width: 1in"></td><td style="width: 0.25in"><font style="font: 8pt Symbol">·</font></td><td><font style="font-size: 8pt">Accounting for consideration given by a vendor to a customer (ASC 605-50-S99-1)</font></td></tr></table>
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<td style="width: 1in"></td><td style="width: 0.25in"><font style="font: 8pt Symbol">·</font></td><td><font style="font-size: 8pt">Accounting for gas-balancing arrangements (ASC 932-10-S99-5).</font></td></tr></table>
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<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"></p>
<table cellpadding="0" cellspacing="0" style="width: 100%; font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><tr style="vertical-align: top">
<td style="width: 0.75in"></td><td style="width: 0.25in"><font style="font: 8pt Symbol">·</font></td><td><font style="font-size: 8pt">Upon the adoption of ASU 2014-16</font></td></tr></table>
<table cellpadding="0" cellspacing="0" style="width: 100%; font: 12pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><tr style="vertical-align: top">
<td style="width: 1in"></td><td style="width: 0.25in"><font style="font: 8pt Symbol">·</font></td><td><font style="font-size: 8pt">Determining the nature of a host contract related to a hybrid financial instrument issued in the
form of a share under ASC 815 (ASC 815-10-S99-3).</font></td></tr></table>
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<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">ASU 2016-11 is effective upon the adoption of
ASU 2014-09 and ASU 2014-16.  The adoption of ASU 2016-11 is not expected to have a material impact on the Company’s
condensed consolidated financial statements.</p>
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<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">In March 2016, the FASB issued ASU No. 2016-09, “Simplifying the Accounting for Share-Based Payments” (“ASU
2016-09”). ASU 2016-09 simplifies several aspects of the accounting for employee share-based payment transactions for both
public and nonpublic entities, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements,
as well as classification in the statement of cash flows. ASU 2016-09 is effective for annual reporting periods beginning after
December 15, 2016, including interim periods within those annual reporting periods. The provisions of this standard are not expected
to significantly impact the Company.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Other pronouncements issued by the FASB or other
authoritative accounting standards group with future effective dates are either not applicable or not significant to our consolidated
financial statements.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"><font style="font: 8pt Times New Roman, Times, Serif"><b><i>LFB
Biotechnologies</i></b></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="font: 8pt Times New Roman, Times, Serif">On
January 30, 2012, we entered into an exclusive license agreement with LFB Biotechnologies, GTC Biotherapeutics and LFB/GTC LLC,
all wholly-owned subsidiaries of LFB Group, relating to the development of ublituximab (the “LFB License Agreement”).</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="font: 8pt Times New Roman, Times, Serif">Under
the terms of the LFB License Agreement, we utilize LFB Group for certain development and manufacturing services. We incurred expenses
of $2.3 million and $2.2 million during the three months ended June 30, 2016 and 2015, respectively, and $2.3 million and $2.4
million during the six months ended June 30, 2016 and 2015, respectively, which have been included in other research and development
expenses in the accompanying condensed consolidated statements of operations. As of June 30, 2016 and December 31, 2015, we had
approximately $1.7 million and $2.1 million, respectively, recorded in accounts payable related to the LFB License Agreement.
In conjunction with the development and manufacturing services discussed above, certain agreements between us and LFB Group require
payments in advance of services performed or goods delivered. Accordingly, as of June 30, 2016 and December 31, 2015, we recorded
approximately $4.7 million and $3.0 million, respectively, in prepaid research and development for such advance payments.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0"><font style="font: 8pt Times New Roman, Times, Serif"><b><i>Other
Parties</i></b></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="font: 8pt Times New Roman, Times, Serif">In
March 2014, we entered into a shared services agreement (the “Opus Shared Services Agreement”) with Opus Point Partners
Management, LLC (“Opus”) in which the parties agreed to share the costs of a rented facility and certain other services. 
Our Executive Chairman and Interim Chief Executive Officer is a Managing Member of Opus. During the three and six months ended
June 30, 2016, we incurred expenses of approximately $0.02 million and $0.1 million, respectively, principally for rent, related
to this agreement. The Opus Shared Services Agreement is no longer in effect as we began occupying new space in April 2016. As
of June 30, 2016, we had approximately $0.1 million recorded in accounts payable related to this Opus Shared Services Agreement.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="font: 8pt Times New Roman, Times, Serif; background-color: white">In
October 2014, we entered into an agreement (the “Office Agreement”) with Fortress Biotech, Inc. (“Fortress”),
to occupy approximately 45% of the 24,000 square feet of New York City office space leased by Fortress, which is now our corporate
headquarters. The Office Agreement requires us to pay our respective share of the average annual rent and other costs of the 15-year
lease. We approximate an average annual rental obligation of $1.1 million under the Office Agreement. We began to occupy this
new space in April 2016, with rental payments beginning in the third quarter of 2016. Mr. Weiss, our Executive Chairman and Interim
CEO, is also Executive Vice Chairman of Fortress.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="font: 8pt Times New Roman, Times, Serif; background-color: white"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="font: 8pt Times New Roman, Times, Serif; background-color: white">In
connection with the Office Agreement, we paid approximately $0.1 million in advance rent, which is recorded in other
current assets in the accompanying condensed consolidated balance sheets as of June 30, 2016 and December 31, 2015. </font><font style="font: 8pt Times New Roman, Times, Serif">During
the six months ended June 30, 2016, <font style="background-color: white">we agreed to pay Fortress $2.0 for our portion
of the build out costs</font>, which have been allocated to us at the 45% rate mentioned above. The allocated build-out costs have
been recorded in Leasehold Interest and will be amortized over the 15-year term of the Office Agreement. After an
initial commitment period of three (3) years, Fortress will assess actual office space utilization annually and if our
utilization differs from the amount we have been billed, we will either receive credits or be assessed incremental
utilization charges.  <font style="background-color: white">As of June 30, 2016, we had approximately $1.1 </font>million
recorded in accounts payable related mostly to the upfront leasehold interest. <font style="background-color: white">Also
in connection with this lease, in October 2014 we pledged $0.6 million to secure a line of credit as a security deposit for
the Office Agreement, which has been recorded as restricted cash in the accompanying condensed consolidated
balance sheets.</font></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="font: 8pt Times New Roman, Times, Serif; background-color: white">In
July 2015, we entered into a Shared Services Agreement (the “Shared Services Agreement”) with Fortress to share the
cost of certain services such as facilities use, personnel costs and other overhead and administrative costs. This Shared Services
Agreement requires us to pay our respective share of services utilized. In connection with the Shared Services Agreement, we </font><font style="font: 8pt Times New Roman, Times, Serif">incurred
expenses of <font style="background-color: white">approximately $0.4 million for shared services for the six months ended June
30, 2016, primarily related to shared personnel.</font></font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="font: 8pt Times New Roman, Times, Serif; background-color: white"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="font: 8pt Times New Roman, Times, Serif; background-color: white"></font>In
May 2016, as part of a broader agreement with Jubilant, an India-based biotechnology company, we entered into the JBET Agreement
with Checkpoint, a subsidiary of Fortress, for the development and commercialization of Jubilant’s novel BET inhibitor program
in the field of hematological malignancies. We paid Checkpoint an up-front licensing fee of $1.0 million as part of the JBET Agreement.
As of June 30, 2016, we had approximately $1.2 million recorded in accounts payable of which $1.0 million related to the licensing
fee. Mr. Weiss is also the Executive Chairman of Checkpoint.</p>
1968734
0
18 to 24 months
18 to 24 months
18 to 24 months
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We are a biopharmaceutical company focused on
the acquisition, development and commercialization of novel treatments for B-cell malignancies and autoimmune diseases. Currently,
the Company is developing two therapies targeting hematologic malignancies. TG-1101 (ublituximab) is a novel, glycoengineered
monoclonal antibody that targets a specific and unique epitope on the CD20 antigen found on mature B-lymphocytes. We are also
developing TGR-1202, an orally available PI3K delta inhibitor. The delta isoform of PI3K is strongly expressed in cells of hematopoietic
origin and is believed to be important in the proliferation and survival of B-lymphocytes. Both TG-1101 and TGR-1202 are in clinical
development for patients with hematologic malignancies. The Company also has pre-clinical programs to develop IRAK4 (interleukin-1
receptor-associated kinase 4) inhibitors, BET (Bromodomain and Extra Terminal) inhibitors, and anti-PD-L1 and anti-GITR antibodies.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We also actively evaluate complementary products,
technologies and companies for in-licensing, partnership, acquisition and/or investment opportunities. To date, we have not received
approval for the sale of any of our drug candidates in any market and, therefore, have not generated any product sales from our
drug candidates.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">The accompanying unaudited condensed consolidated
financial statements were prepared in accordance with U.S. generally accepted accounting principles, or GAAP, for interim financial
information and with the instructions to Quarterly Report on Form 10-Q and Article 10 of Regulation S-X of the Exchange
Act. Accordingly, they may not include all of the information and footnotes required by GAAP for complete financial statements.
All adjustments that are, in the opinion of management, of a normal recurring nature and are necessary for a fair presentation
of the condensed consolidated financial statements have been included. Nevertheless, these condensed consolidated financial statements
should be read in conjunction with the audited consolidated financial statements contained in our Annual Report on Form 10-K for
the year ended December 31, 2015. The accompanying condensed December 31, 2015 balance sheet has been derived from these statements.
The results of operations for the three and six months ended June 30, 2016 are not necessarily indicative of the results that may
be expected for the entire fiscal year or any other interim period.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>