NOTE 8 — STOCK OPTIONS:

For a description of the Company’s Equity Incentive Plans, refer to the consolidated financial statements and notes thereto in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. A summary of the option activity under the Company’s Equity Incentive Plans as of June 30, 2016, and changes during the period then ended, is presented below:


				Weighted-
		Weighted-		Average
		Average		Remaining
	Number of	Exercise		Contractual	Aggregate
	Options	Price		Term	Intrinsic Value
Outstanding at January 1, 2016	5,107,000	$	0.57
Exercised	(784,000)	$	0.21
Forfeited or expired	(50,000)	$	0.20
Outstanding at March 31, 2016	4,273,000	$	0.63
Exercised	(1,470,879)	$	0.39
Outstanding and exercisable at June 30, 2016	2,802,121	$	0.76	2.61	$	1,282,440

The fair value for each option award is estimated at the date of grant using the Black-Scholes option-pricing model. Volatility for the periods presented is based on the historical volatility of the Company’s common shares over the expected life of the option. The risk-free rate for periods within the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of the grant. The Company does not foresee the payment of dividends in the near term. There were no options granted during the six month periods ended June 30, 2016 and 2015.

During the three months ended June 30, 2016, there were 1,470,879 stock options exercised with a weighted average exercise price of $0.39 and a total intrinsic value of $714,782. During the six months ended June 30, 2016, there were 2,254,879 stock options exercised with a weighted average exercise price of $0.33 and a total intrinsic value of $813,800. During the six months ended June 30, 2015 there were no stock options exercised.

A summary of the status of the Company’s nonvested options as of June 30, 2016 and changes during the period then ended is presented below:


		Weighted-Average
	Number of	Grant-Date
	Options	Fair Value
Nonvested at January 1, 2016	990,000		0.16
Vested	(990,000)		0.16
Nonvested at June 30, 2016	—		—

As of June 30, 2016, there was no unrecognized compensation cost related to nonvested share-based compensation arrangements granted under the Company’s Equity Incentive Plans.

Total compensation costs recognized for stock-based employee compensation awards was $0 and $37,376 for the three months ended June 30, 2016 and 2015, respectively. Total compensation costs recognized for stock-based employee compensation awards was $75,945 and $165,176 for the six months ended June 30, 2016 and 2015, respectively. These costs were included in general and administrative expenses and technical services on the Condensed Consolidated Statements of Operations. There were no costs recognized for stock-based compensation awards for services performed by outside parties for the three months ended June 30, 2016 and 2015. Total costs recognized for stock-based compensation awards for services performed by outside parties were $29,400 and $0 during the six months ended June 30, 2016 and 2015, respectively. Cash received from options exercised under all share-based payment arrangements during the six months ended June 30, 2016 and 2015 was $183,507 and $0, respectively.