a) Warrants

2016

The following table summarizes the changes in warrants outstanding of the Company during the year ended December 31, 2016:

On January 15, 2016, warrants to purchase 100,000 shares of common stock were exercised at a price of $0.50 per share, for net cash proceeds to the Company of $50,000.

On March 22, 2016, 100,000 warrants were exercised at a price of $0.50 per share, for net cash proceeds of $50,000. As a result, a total of 100,000 shares of common stock were issued.

On March 29, 2016, 100,000 warrants were exercised at a price of $0.50 per share, for net cash proceeds of $50,000. As a result, a total of 100,000 shares of common stock were issued.

On April 20, 2016, 2,601 warrants were exercised at a price of $2.60 per share, for net cash proceeds of $6,763. As a result, a total of 2,601 shares of common stock were issued.

Effective May 4, 2016, the Company amended the expiry period of warrants to purchase 341,458 shares, originally granted on May 11, 2012, with an exercise price of $2.60. The expiration period was extended from May 10, 2016 to May 10, 2017 for all 341,458 stock options.

On June 10, 2016, 5,484 warrants were exercised at a price of $0.50 per share, for net cash proceeds of $2,742. As a result, a total of 5,484 shares of common stock were issued.

On June 14, 2016, 94,516 warrants were exercised at a price of $0.50 per share, for net cash proceeds of $47,258. As a result, a total of 94,516 shares of common stock were issued.

Effective July 11, 2016, the Company amended the expiry period of warrants to purchase 45,000 shares, originally granted on August 7, 2013, with an exercise price of $2.40. The expiration period was extended from August 7, 2016 to August 7, 2017 for all 45,000 stock options.

On September 21, 2016, 12,500 warrants were exercised at a price of $2.20 per share, for net cash proceeds of $27,500. As a result, a total of 12,500 shares of common stock were issued.

On September 28, 2016, 75,000 warrants were exercised at a price of $0.50 per shares, for net cash proceeds of $165,000. As a result, a total of 75,000 shares of common stock were issued.

On November 14, 2016, the Company granted warrants to purchase 40,000 shares of common stock at an exercise price of $4.53 per share. These warrants vested on the date of grant and expire four years from the date of vesting. The Company has calculated the estimated fair market value of these warrants at $101,830, using the Black-Scholes Option Pricing model and the following assumptions: term: four years, stock price: $4.28, exercise price: $4.53, 82.9% volatility, 1.7% risk free rate.

2015

On February 23, 2015, 25,000 warrants were exercised at a price of $2.20 per share, for net cash proceeds of $55,000. As a result, a total of 25,000 shares of common stock were issued.

On May 10, 2015, 26,685 warrants with an exercise price of $1.75 per share terminated by their terms.

On June 11, 2015, 100,000 warrants were exercised at a price of $0.50 per share, for net cash proceeds of $50,000. As a result, a total of 100,000 shares of common stock were issued.

On July 20, 2015, 25,000 warrants were exercised at a price of $2.20 per share, for net cash proceeds of $55,000. As a result, a total of 25,000 shares of common stock were issued.

On September 16, 2015, 12,500 warrants were exercised at a price of $2.20 per share, for net cash proceeds of $27,500. As a result, a total of 12,500 shares of common stock were issued.

On October 6, 2015, 100,000 warrants were exercised at a price of $2.20 per share, for net cash proceeds of $220,000. As a result, a total of 100,000 shares of common stock were issued.

On October 28, 2015, 300,000 warrants were exercised at a price of $2.20 per share, for net cash proceeds of $660,000. As a result, a total of 300,000 shares of common stock were issued.

On December 1, 2015, 8,000 warrants were exercised at a price of $2.40 per share, for net cash proceeds of $19,200. As a result, a total of 8,000 shares of common stock were issued.

On December 14, 2015, 250,000 warrants were exercised at a price of $1.05 per share, for net cash proceeds of $262,500. As a result, a total of 250,000 shares of common stock were issued.

Below is a table summarizing the warrants issued and outstanding as of December 31, 2016, which have a weighted average exercise price of $2.40 per share and a weighted average remaining contractual life of 1.90 years.

b) Options

The Company currently has options outstanding under both its 2011 Equity Incentive Plan (the “2011 Plan”) (for option issuances prior to 2016) and its 2015 Stock Incentive Plan (as amended, the “2015 Plan”) (for option issuances commencing in 2016). Effective as of January 1, 2016, no additional awards were or may be made under the 2011 Plan.

The 2015 Plan was adopted by the Board of Directors on August 18, 2015 and approved by the stockholders at an annual meeting held on October 30, 2015. On August 5, 2016, the Board of Directors adopted an amendment to the 2015 Plan to increase the number of shares of common stock available for issuance under such Plan by 750,000 shares to an aggregate maximum of 1,750,000 shares, which amendment was approved by the stockholders at an annual meeting held on October 7, 2016. The 2015 Plan permits the grant of incentive stock options, non-statutory stock options, restricted stock awards, stock bonus awards, stock appreciation rights, restricted stock units and performance awards. The primary purpose of the 2015 Plan is to enhance the Company’s ability to attract and retain the services of qualified employees, officers, directors, consultants and other service providers upon whose judgment, initiative and efforts the successful conduct and development of the Company’s business largely depends, and to provide additional incentives to such persons or entities to devote their utmost effort and skill to the advancement and betterment of the Company, by providing them an opportunity to participate in the ownership of the Company that is tied to the Company’s performance, thereby giving them an interest in the success and increased value of the Company. The 2015 Plan is administered by the Compensation Committee comprised solely of members of the Board of Directors or by the Board of Directors as a whole.

The following table summarizes the changes in options outstanding of the Company during the year ended December 31, 2016:

2016

On March 1, 2016, stock options to purchase 5,000 shares of common stock expired unexercised.

On April 15, 2016, the Company granted options to purchase 775,000 shares, at an exercise price of $4.00 per share, pursuant to the 2015 Stock Incentive Plan (“2015 Plan”). These options vest in full twelve months from the date of grant and expire five years from the date of vesting. The Company has calculated the estimated fair market value of these options at $2,035,060, using the Black-Scholes Option Pricing model and the following assumptions: term 6 years, stock price $3.75, exercise price $4.00, 84.4% volatility, 1.22% risk free rate.

On May 20, 2016, stock options were exercised to purchase 88,000 shares of our common stock at $3.00 per share in cashless exercises that resulted in the issuance of 13,419 shares of common stock.

On May 24, 2016, stock options were exercised to purchase 8,000 shares of our common stock at $3.00 per share in cashless exercises that resulted in the issuance of 1,122 shares of common stock.

On May 25, 2016, stock options were exercised to purchase 9,000 shares of our common stock at $3.00 per share in cashless exercises that resulted in the issuance of 1,011 shares of common stock.

On June 16, 2016, stock options were exercised to purchase 29,000 shares of our common stock at $2.50 to $3.00 per share in cashless exercises that resulted in the issuance of 5,179 shares of common stock.

On June 23, 2016, the Company granted options to purchase 15,000 shares, at an exercise price of $4.00 per share, pursuant to the 2015 Plan. The options will vest in full twelve months from the date of grant and will expire five years from the date of vesting. The Company has calculated the estimated fair market value of these options at $33,938, using the Black-Scholes Option Pricing model and the following assumptions: term 6 years, stock price $3.35, exercise price $4.00, 83.11% volatility, 1.25% risk free rate.

Effective June 27, 2016, the Company amended the expiry period of 37,000 options, originally granted pursuant to Stock Option Agreements dated March 20, 2013, with an exercise price of $2.35 to $4.35 per share. The expiration period was extended from three to four years from the date of vesting for all 37,000 stock options. The result was deemed to be immaterially different to the original calculation and the financial statements were not adjusted.

Effective June 27, 2016, the Company amended the expiry period of 16,300 options, originally granted on pursuant to Stock Option Agreements dated September 2, 2013, with an exercise price of $2.35 to $4.35 per share. The expiration period was extended from three to four years from the date of vesting for all 16,300 stock options. The result was deemed to be immaterially different to the original calculation and the financial statements were not adjusted.

On June 30, 2016, stock options to purchase 26,000 shares of common stock expired unexercised.

On September 1, 2016, stock options to purchase 5,000 shares of common stock expired unexercised.

On September 13, 2016, the Company granted options to purchase 25,000 shares, at an exercise price of $4.65 per share, pursuant to the 2015 Plan. The options will vest in full twelve months from the date of grant and will expire five years from the date of vesting. The Company has calculated the estimated fair market value of these options at $81,274, using the Black-Scholes Option Pricing model and the following assumptions: term 6 years, stock price $4.65, exercise price $4.65, 81.94% volatility, 1.56% risk free rate.

On October 7, 2016, the 2015 Plan was amended to increase the number of shares available for issuance under such plan by 750,000 shares, to an aggregate of 1,750,000 shares.

On November 11, 2016, the Company granted options to purchase 10,000 shares. These options vest immediately and expire six years after the vesting date, with an exercise price of $5.00 per share. The Company has calculated the estimated fair market value of these options at $29,019, using the Black-Scholes Option Pricing model and the following assumptions: term 6.0 years, stock price $4.30, exercise price $5.00, 81.3% volatility, 1.92% risk free rate.

On November 11, 2016, stock options were exercised to purchase 4,000 shares of our common stock at $3.00 per share in cashless exercises that resulted in the issuance of 1,209 shares of common stock.

On November 18, 2016, stock options were exercised to purchase 55,000 shares of our common stock at $3.00 per share in cashless exercises that resulted in the issuance of 18,168 shares of common stock.

On November 22, 2016, stock options were exercised to purchase 5,000 shares of our common stock at $3.00 per share in cashless exercises that resulted in the issuance of 1,551 shares of common stock.

On November 25, 2016, stock options were exercised to purchase 37,000 shares of our common stock at $3.00 per share in cashless exercises that resulted in the issuance of 11,998 shares of common stock.

2015

On May 18, 2015, the Company granted options to purchase 20,000 shares. These options vest six months after the date of grant, and expire four years after the vesting date, with an exercise price of $3.80 per share. The Company has calculated the estimated fair market value of these options using the Black-Scholes Option Pricing model and the following assumptions: term 4.5 years, stock price $3.45, exercise price $3.80, 72.1% volatility, 1.54% risk free rate.

On May 18, 2015, the Company amended the expiry period of 630,000 stock options, originally granted on November 25, 2011. The expiration period was extended from three to four years for all 630,000 stock options. As a result, an additional $20,796 of stock option amortization was realized in 2015.

On July 23, 2015, the Company granted options to purchase 327,000 shares, at an exercise price of $4.00 per share. All of the 327,000 options will vest on January 23, 2016 and will expire on January 23, 2020. The Company has calculated the estimated fair market value of these options using the Black-Scholes Option Pricing model and the following assumptions: term 4.5 years, stock price $3.55, exercise price $4.00, 88.3% volatility, 1.65% risk free rate.

On August 14, 2015, the Company amended the vesting date of 10,000 stock options, originally granted on August 18, 2014, from August 18, 2015 to August 16, 2015.

On August 17, 2015, the Company granted options to purchase 75,000 shares, at an exercise price of $3.75 per share. All of the 75,000 options vested on August 17, 2015 and will expire on August 17, 2020. The Company has calculated the estimated fair market value of these options using the Black-Scholes Option Pricing model and the following assumptions: term 5.0 years, stock price $3.31, exercise price $3.75, 87.9% volatility, 1.58% risk free rate.

On August 17, 2015, stock options to purchase 40,000 shares of common stock expired unexercised.

On October 30, 2015, the Company adopted and approved the 2015 Plan for the directors, officers, employees and consultants to the Company. Pursuant to the Plan, the Company is authorized to issue 1,000,000 shares of the Company’s common stock. All options granted after December 31, 2015 were from the 2015 Stock Incentive Plan.

On November 18, 2015, stock options were exercised to purchase 20,000 shares of our common stock at $3.00 per share in cashless exercises that resulted in the issuance of 4,810 shares of common stock.

On December 2, 2015, stock options were exercised to purchase 50,000 shares of our common stock at $3.01 per share in cashless exercises that resulted in the issuance of 14,081 shares of common stock to a related party.

On December 9, 2015, stock options were exercised to purchase 50,000 shares of our common stock at $3.01 per share in cashless exercises that resulted in the issuance of 14,166 shares of common stock to a related party.

Below is a table summarizing the options issued and outstanding as of December 31, 2016, all of which were issued pursuant to the 2011 Equity Incentive Plan (“2011 Plan”) (for option issuances prior to 2016) or the 2015 Plan (for option issuances commencing in 2016) which have a weighted average exercise price of $3.75 per share and a weighted average remaining contractual life of 3.37 years.

Stock option expense of $1,678,748 and $1,493,334 was recorded in the years ended December 31, 2016 and December 31, 2015, respectively. Total remaining unrecognized compensation cost related to unvested stock options is approximately $659,639 and is expected to be recognized over a period of 0.75 years.