STOCK BASED COMPENSATION

The stock based compensation cost that has been charged against income by the Company was $606,446 and $527,869 for the years ended December 31, 2017 and 2016, respectively, for options previously awarded by the Company.

Stock option activity for the years ended December 31, 2017 and 2016 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, 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

Outstanding at December 31, 2016	3,206,916		$	4.33		5.80	$	2,966,028
Options granted	500,000		1.01			8.12	363,089
Options exercised	—		—			0.00	—
Options cancelled/forfeited/expired	(526,499	)	(14.00		)	0.00	(30,921		)
Outstanding at December 31, 2017	3,180,417		$	2.21		4.62	$	3,298,196
Vested at December 31, 2017	1,959,167		$	2.55		4.45	$	1,885,850
Exercisable at December 31, 2017	1,959,167		$	2.55		4.45	$	1,885,850

On January 4, 2017, the Board of Directors granted one employee options to purchase an aggregate of 20,000 shares of common stock at an exercise price of $1.31 per share with a 5 year term (subject to continued employment/directorship), vesting at the rate of 1/4th of such options per year on the first 4 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 August 21, 2017, the Board of Directors granted 5 employees and 1 employee options to purchase an aggregate of 330,000 and 150,000, respectively, shares of common stock at an exercise price of $0.97 and $1.07 per share, respectively, with a ten year and 5 year term, respectively, (subject to continued employment/directorship), vesting at the rate of 1/4th of such options per year on the first 4 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 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.

On December 13, 2016, the Board of Directors granted our non-executive directors options to purchase an aggregate of 300,000 shares of common stock at an exercise price of $1.26 per share (60,000 options per non-executive director), 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, 2017 and 2016 is as follows:



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

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	$	140,249
Exercisable at December 31, 2016	219,868	$	3.01	3.00	$	140,249

Outstanding at December 31, 2016	219,868	$	3.01	3.00	$	140,249
Warrants granted	—	$	—	—	$	—
Warrants exercised	—	—		—	—
Warrants canceled/forfeited/expired	—	—		—	—
Warrants at December 31, 2017	219,868	$	3.01	2.00	$	140,249
Vested at December 31, 2017	219,868	$	3.01	2.00	$	140,249
Exercisable at December 31, 2017	219,868	$	3.01	2.00	$	140,249

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, 2017	YEAR ENDED DECEMBER 31, 2016
Expected volatility	78-79%	78-79%
Expected dividends	—%	—%
Expected term (in years)	5-10	5-10
Risk-free rate	2.20-2.40%	.91-1.57%