STOCK BASED COMPENSATION

The stock based compensation cost that has been charged against income by the Company was $659,836 and $606,446 for the years ended December 31, 2018 and 2017, respectively, for options awarded by the Company.

Stock option activity for the years ended December 31, 2018 and 2017 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, 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

Outstanding at December 31, 2017	3,180,417		$	2.21		4.62	$	3,298,196
Options granted	697,000		1.17			8.10	610,305
Options exercised	(7,500	)	1.20			0.00	(4,241		)
Options cancelled/forfeited/expired	(409,167	)	1.80			0.00	(434,962		)
Outstanding at December 31, 2018	3,460,750		$	2.05		3.50	$	3,469,298
Vested at December 31, 2018	2,127,500		$	2.48		4.67	$	2,122,478
Exercisable at December 31, 2018	2,127,500		$	2.48		4.67	$	2,122,478

On April 12, 2018, the Board of Directors granted 11 employees and 1 officer/director options to purchase an aggregate of 521,000 and 166,000, respectively, shares of common stock at an exercise price of $1.14 and $1.26 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 May 22, 2018, the Board of Directors granted 1 employee options to purchase an aggregate of 10,000 shares of common stock at an exercise price of $1.03 per share with a 10 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 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), 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 officer/director 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.

A summary of the Company’s stock warrant activity and related information for the years ended December 31, 2018 and 2017 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, 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	3.00	$	140,249

Outstanding at December 31, 2017	219,868	$	3.01	2.00	$	140,249
Warrants granted	—	—		—	—
Warrants exercised	—	—		—	—
Warrants canceled/forfeited/expired	—	—		—	—
Warrants at December 31, 2018	219,868	$	3.01	0.93	$	140,249
Vested at December 31, 2018	219,868	$	3.01	0.93	$	140,249
Exercisable at December 31, 2018	219,868	$	3.01	0.93	$	140,249

See "Note 14. 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, 2018	YEAR ENDED DECEMBER 31, 2017
Expected volatility	78-79%	78-79%
Expected dividends	—%	—%
Expected term (in years)	5-10	5-10
Risk-free rate	2.46-2.59%	2.20-2.40%