Share–Based Payment Arrangements.

The Company reports share-based compensation arrangements using a straight-line fair valuation model for stock awards and Black-Scholes fair valuation model for option awards to calculate compensation expense over the requisite service period of grants. At December 31, 2015, the Company had three share based compensation plans, including the Equity Incentive Plan (“Equity Plan”), Advisory and Consulting Agreement Plan (“Advisor Plan”), and Guaranty Agreement Plan (“Guaranty Plan”) in effect. Compensation cost charged against income for all compensation and incentive plans for 2015 and 2014 was $1,964,167 and $1,826,051, respectively.

Equity Incentive Plan

The Company’s Equity Plan, which is shareholder-approved, permits the grant of stock awards to eligible participants for up to 10,000,000 shares of common stock. The purpose of the Equity Plan is to advance the interests of the Company and its stockholders by providing an incentive to attract, retain and reward employees, directors and consultants performing services for the Company and by motivating such persons to contribute to the growth and profitability of the Company. The Equity Plan provides financial performance measures upon which specific performance goals would be based and limits on the numbers of shares or compensation that could be made. Option awards are generally granted with an exercise price equal to the market price of the Company’s stock at the date of grant. Stock awards may provide for accelerated vesting if there is a change in control. The fair value of each stock option is estimated on the date of grant using the Black-Scholes valuation model and spread over the requisite service period.

For 2015, there was an aggregate of 2,125,000 awards granted and/or vested to directors, officers, and key employees, of which 2,100,000 were for options granted and 25,000 were for stock awards vested. For 2014, there was an aggregate of 5,417,500 awards granted to directors, officers, and key employees, of which 5,317,500 were for options and 100,000 were for stock awards. As of December 31, 2015, total compensation cost related to non-vested stock options was $1,415,168, which is expected to be recognized over 2.0 years after December 31, 2015 (24 months on a weighted-average basis). As of December 31, 2014, total compensation cost related to non-vested stock options was $2,605,910. There were 4,882,500 shares issuable and available for grant at December 31, 2015. Stock option and bonus activity under the Company’s Equity Plan as of the years ended December 31, is summarized below:

Option Awards



	2015				2014
	Number		Weighted-Average		Number		Weighted-Average
Options	of Options		Exercise Price		of Options		Exercise Price
Outstanding-Beginning of Year	7,277,500		$	0.47	5,040,000		$	0.60
Granted	2,100,000		0.33		5,317,500		—
Exercised	—		—		—		—
Canceled, Expired or Forfeited	(4,360,000	)	0.46		(3,080,000	)	0.61
Outstanding - End of Year	5,017,500		0.48		7,277,500		0.47
Exercisable - End of Year	2,667,500		$	0.73	4,415,000		$	0.47

The weighted-average grant-date fair value of option awards granted during 2015 and 2014 was $88,143 and $196,662, respectively.

Note 18. Share–Based Payment Arrangements - continued.

The following table summarizes options outstanding at:



	Outstanding				Exercisable			Outstanding				Exercisable
		Weighted Average	Weighted			Weighted			Weighted Average	Weighted			Weighted
Range of	Number	Remaining	Average		Number	Average		Number	Remaining	Average		Number	Average
Exercise	Outstanding	Contractual	Exercise		Exercisable	Exercise		Outstanding	Contractual	Exercise		Exercisable	Exercise
Prices	at 12/31/15	Life (Years)	Price		at 12/31/15	Price		at 12/31/14	Life (Years)	Price		at 12/31/14	Price
$.29 - $.59	4,417,500	5.2	$	0.39	2,467,500	$	0.62	4,417,500	5.20	$	0.41	1,955,000	$	0.41
$.60 - $.64	—	0	—		—	—		2,260,000	0.46	$	0.53	1,960,000	$	0.56
$.65 - $.80	600,000	3.1	$	0.71	200,000	0.71		600,000	4.08	$	0.71	—	$	—

Stock Awards



	2015					2014
	Number		Weighted-Average			Number		Weighted-Average
Nonvested Awards	of Shares		Grant-Date Fair Value			of Shares		Grant-Date Fair Value
Nonvested - Beginning of Year	50,000		$	32,500		—		$	—
Granted	—		—			100,000		65,000
Vested	(25,000	)	(16,250		)	(50,000	)	(32,500		)
Canceled, Expired or Forfeited	—		—			—		—
Nonvested - End of Year	25,000		$	16,250		50,000		$	32,500

Advisor Plan

The Company entered into an advisory and consultant agreement on February 22, 2011 with a non-employee director, Jay C. Nadel, wherein the Company granted 5,000,000 shares of restricted common stock, par value $.01, which vested monthly over 3 years, and includes certain anti-dilution provisions (the "Nadel Agreement"). The The grant-date fair value for the 5,000,000 shares was calculated by taking the closing price of the Company's common stock of $.57 per share on the date of grant and multiplying it by the number of shares granted, equaling $2,850,000, all of which has been recorded. The anti-dilution aspects continue so long as the Nadel Agreement is in force. For 2015, anti-dilution transactions occurred, which required the Company to grant and vest an additional 1,035,743 shares of restricted common stock. The grant-date fair value for the anti-dilution shares was calculated by taking the closing price of the Company’s common stock on the anti-dilution dates for a weighted-average of approximately $0.40 per share and multiplying it by the number of shares granted, equaling $417,662. For 2014, anti-dilution transactions occurred, which required the Company to grant and vest an additional 110,733 shares of restricted common stock. The grant-date fair value for the anti-dilution shares was calculated by taking the closing price of the Company’s common stock on the anti-dilution dates for a weighted-average of approximately $0.58 per share and multiplying it by the number of shares granted, equaling $63,893. A summary of awards activity under the Advisor Plan at December 31, 2015 and 2014, and changes during the years then ended, are as follows:



	2015					2014
	Number		Weighted-Average			Number		Weighted-Average
Nonvested Awards	of Shares		Grant-Date Fair Value			of Shares		Grant-Date Fair Value
Nonvested - Beginning of Year	—		$	—		237,238		$	135,219
Granted	1,035,743		417,662			110,733		63,893
Vested	(1,035,743	)	(417,662		)	(347,971	)	(199,112		)
Canceled, Expired or Forfeited	—		—			—		—
Nonvested - End of Year	—		$	—		—		$	—

Note 18. Share–Based Payment Arrangements - continued.

Guaranty Plan

The Company made a grant of restricted common stock in connection with a personal guarantee provided by the chairman of the board and majority stockholder to secure working capital on favorable terms and the Company’s performance under a financing instrument. Refer to Note 12 – Financing Instruments, Items (b)(i) – Enhanced Note for more information on the financial instrument.

The Company granted 3,681,000 shares of restricted common stock, par value $0.01, which shares vest monthly on a pro rata basis over the three year term of the Enhanced Note (“Guaranty Shares”). The Guaranty Shares were valued at $.60 per share, the closing price of the Company’s common stock as quoted on the OTC Markets on the day preceding the closing date of December 10, 2013, for an aggregate amount of $2,208,600. The Guaranty Shares are being recorded as interest expense – related party, thereby increasing the effective interest rate on the Enhanced Note.

The following table summarizes grant activity under the Guaranty Plan at December 31, 2015 and 2014, and changes during the years then ended:



	2015					2014
	Number		Weighted-Average			Number		Weighted-Average
Nonvested Awards	of Shares		Grant-Date Fair Value			of Shares		Grant-Date Fair Value
Nonvested - Beginning of Year	2,382,416		$	1,429,449		3,607,179		$	2,164,307
Granted	—		—			—		—
Vested	(1,224,763	)	(734,856		)	(1,224,763	)	(734,858		)
Canceled, Expired or Forfeited	—		—			—		—
Nonvested - End of Year	1,157,653		$	694,593		2,382,416		$	1,429,449

As of December 31, 2015, there is $1,367,037 of total unrecognized compensation cost related to nonvested interest expense – related party arrangement granted under the Guaranty Plan. The cost is expected to be recognized over a weighted-average period of 0.95 years.