NOTE 11 — SUBSEQUENT EVENTS (unaudited)

Stock-Based Compensation

On January 2, 2015, the Compensation Committee of the Board granted non-qualified stock options to purchase 1,365,702 shares of Company common stock to certain officers of the Company in connection with a new compensation plan for 2015 and 86,000 shares of Company common stock to members of the Dental Professional Advisory Board (“DPAB”) as consultants for the Company. These options were granted at an exercise price of $2.64, the closing market price of the Company’s stock on grant date. Options granted to certain officers of the Company vest based on service period and performance of the Company, as defined in the applicable grant agreement, and expire ten years from grant date. Options granted to the DPAB fully vest and become exercisable upon the achievement of specified performance conditions, as defined in the consulting agreements, and expire five years from grant date. Further discussion of the stock-based compensation is disclosed in Note 8 – Stockholders’ Equity.

Class Action Lawsuits

The parties have reached an agreement in principle to settle the consolidated securities class action lawsuit, which is subject to the negotiation of a definitive settlement agreement and preliminary and final approval of the court. Although there can be no assurance that such agreement will be finalized, as of the date of these financial statements, management does not expect the Company to incur additional expenses related to this matter due to certain insurance coverage in place. Further discussion of the class action lawsuits is disclosed in Note 7 – Commitments and Contingencies.