NOTE 13 – EQUITY AND INCENTIVE PLANS

Effective March 10, 2016, the Board of Directors (the “Board”) of the Company approved, authorized and adopted the 2016 Equity and Incentive Plan (the “ Plan”) and certain forms of ancillary agreements to be used in connection with the issuance of stock and/or options pursuant to the Plan (the “Plan Agreements”). The Plan provides for the issuance of up to 375,000 shares of common stock, par value $.025 per share (the “Common Stock”), of the Company through the grant of nonqualified options (the “Non-qualified options”), incentive options (the “Incentive Options” and together with the Non-qualified Options, the “Options”) and restricted stock (the “Restricted Stock”) to directors, officers, consultants, attorneys, advisors and employees.

On March 11, 2016, the Company entered into a restricted stock agreement with Mr. Jeff Cosman, CEO, (the “Cosman Restricted Stock Agreement”), pursuant to which 212,654 shares of the Company’s common stock, subject to certain restrictions set forth in the Cosman Restricted Stock Agreement, were issued to Mr. Cosman pursuant to the Cosman Employment Agreement and the Plan.

The entire 212,654 shares fully cliff vests on January 1, 2017 if he remains continuously employed and the Company achieves $10 million in EBITDA for fiscal 2016 (“Performance Condition”). The Company recognized approximately $4.5 million in compensation expense related to this award through September 30, 2016. On November 11, 2016, the award was modified to remove the Performance Condition and on such date the Performance Condition vesting condition was deemed improbable of occurring. As such, in accordance with ASC 718, the original award is deemed forfeited and the $4.5 million of previously recognized compensation expense was recaptured in the fourth quarter. In addition, the fair value of the new award, deemed to be $2,764,502 based upon the stock price on November 11, 2016 was recognized ratably from November 11, 2016 to the end date of January 1, 2017. Thus total expense recognized for the year ended December 31, 2016 was $2,764,502.

The restricted stock roll forward is as follows:

	Shares			Fair Value

Restricted Stock balance, January 1, 2016		-		$	-

Granted		425,308	(1)	$	22.00

Vested		-		$	-

Forfeited		(212,658	)	$	31.00

Unvested, December 31, 2016		212,650		$	13.00

(1) Includes initial issuance of 212,654 shares on March 11, 2016 that were ultimately forfeited and the re-issued for accounting purposes 212,654 shares on November 11, 2016

Unrecognized compensation cost at December 31, 2016 is nil. All unvested restricted stock vested on January 1, 2017