STOCK BASED COMPENSATION

12 Months Ended

Dec. 31, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

The stock based compensation cost that has been charged against income by the Company was $527,869 and $423,910 for the years ended December 31, 2016 and 2015, respectively, for options previously awarded by the Company.

Stock option activity for the years ended December 31, 2016 and 2015 are summarized as follows:



OPTIONS ISSUED FOR COMPENSATION:	Shares		Weighted Average Exercise Price			Weighted Average Remaining Contractual Life (in Years)	Grant Date Fair Value
Outstanding at December 31, 2014	2,648,583		$	7.07		5.81	$	1,654,641
Options granted	525,000		2.23			9.71	1,083,411
Options exercised	(25,000	)	(0.45		)	0.00	(9,000		)
Options cancelled/forfeited/expired	(275,001	)	(20.22		)	0.00	(143,711		)
Outstanding at December 31, 2015	2,873,582		$	4.99		5.94	$	2,585,341
Vested at December 31, 2015	1,881,395		$	5.70		4.55	$	372,367
Exercisable at December 31, 2015	1,881,395		$	5.70		4.55	$	372,367

Outstanding at December 31, 2015	2,873,582		$	4.99		5.94	$	2,585,341
Options granted	570,000		1.38			9.72	622,115
Options exercised	(100,000	)	(0.50		)	0.00	(27,753		)
Options cancelled/forfeited/expired	(136,666	)	(8.64		)	0.00	(213,675		)
Outstanding at December 31, 2016	3,206,916		$	4.33		5.80	$	2,966,028
Vested at December 31, 2016	2,044,104		$	4.05		4.29	$	1,295,727
Exercisable at December 31, 2016	2,044,104		$	4.05		4.29	$	1,295,727

On February 5, 2016, the Board of Directors granted an employee options to purchase an aggregate of 100,000 shares of common stock at an exercise price of $1.73 per share, with a ten year term (subject to continued employment/directorship), vesting at the rate of 1/4th of such options per year on the first four anniversaries of the grant, under our 2013 Stock Incentive Plan, as amended, in consideration for services rendered and to be rendered to the Company.

On June 6, 2016, the Board of Directors granted 10 employees options to purchase an aggregate of 170,000 shares of common stock at an exercise price of $1.39 per share, with a ten year term (subject to continued employment/directorship), vesting at the rate of 1/4th of such options per year on the first four anniversaries of the grant, under our 2013 Stock Incentive Plan, as amended, in consideration for services rendered and to be rendered to the Company.

A summary of the Company’s stock warrant activity and related information for the years ended December 31, 2016 and 2015 is as follows:



WARRANTS ISSUED FOR COMPENSATION AND OTHER THAN SERIES B AND B1 PREFERRED STOCK:	Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in Years)	Grant Date Fair Value

Outstanding at December 31, 2014	219,868	$	3.01	5.00	$	140,249
Warrants granted	—	$	—	—	$	—
Warrants exercised	—	—		—	—
Warrants canceled/forfeited/expired	—	—		—	—
Warrants at December 31, 2015	219,868	$	3.01	4.00	$	140,249
Vested at December 31, 2015	219,868	$	3.01	4.00	$	140,149
Exercisable at December 31, 2015	219,868	$	3.01	4.00	$	140,149

Outstanding at December 31, 2015	219,868	$	3.01	4.00	$	140,249
Warrants granted	—	$	—	—	$	—
Warrants exercised	—	—		—	—
Warrants canceled/forfeited/expired	—	—		—	—
Warrants at December 31, 2016	219,868	$	3.01	3.00	$	140,249
Vested at December 31, 2016	219,868	$	3.01	3.00	$	140,149
Exercisable at December 31, 2016	219,868	$	3.01	3.00	$	140,149

See "Note 15. Preferred Stock and Temporary Equity" for a description of the warrants that were granted in conjunction with our Series B and B1 Preferred stock.

The following table summarizes the assumptions used in assessing the above described option and warrant valuations:



	YEAR ENDED DECEMBER 31, 2016	YEAR ENDED DECEMBER 31, 2015
Expected volatility	78-79%	29-69%
Expected dividends	—%	—%
Expected term (in years)	0	10
Risk-free rate	.91-1.57%	.96-1.06%