a) Warrants

The following table summarizes the changes in warrants outstanding of the Company during the year ended December 31, 2018:

On August 10, 2018, in conjunction with the PIPE transaction (see Note 7), the Company issued to Cotterford a warrant to purchase up to 5.0 million shares of common stock at an exercise price of $3.00 per share payable in cash (subject to adjustment pursuant to the terms of the warrant). The warrant has an expiration date of August 10, 2019 and is exercisable for a period of 6 months commencing on February 10, 2019.

On November 13, 2018, the Board of Directors amended the terms of an aggregate of 29,392 outstanding warrants to purchase common stock of the Company originally issued in connection with an equity financing completed on or about December 31, 2013 to extend the expiration date from December 31, 2018 to December 31, 2019. As a result of this amendment $14,198 was recorded as additional warrant expense.

During 2018, 333,528 warrants were exercised for gross cash proceeds to the Company of $717,917. Refer to Note 7 for the details of the exercises.

During 2018, 290,535 warrants expired by their terms.

Below is a table summarizing the warrants issued and outstanding as of December 31, 2018, which have a weighted average exercise price of $ 2.88 per share. and an aggregate weighted average remaining contractual life of 0.63 years.

Warrant expense of $22,776 and $54,510 was recorded in the years ended December 31, 2018 and December 31, 2017, respectively. Total remaining unrecognized compensation cost related to non-vested warrants is $17,012 and is expected to be recognized over a period of 2.0 years. As of December 31, 2018, the total intrinsic value of warrants was $Nil.

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 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. On June 13, 2017, the Board of Directors adopted a subsequent 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 2,500,000 shares, which amendment was approved by the stockholders at an annual meeting held on September 8, 2017. On June 15, 2018, the Board of Directors adopted a subsequent 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 3,250,000 shares, which amendment was approved by the stockholders at an annual meeting held on September 7, 2018. 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, 2018:

Effective January 23, 2018, the Company granted stock options to purchase 780,000 shares of common stock to various Company personnel (including directors, executives, members of management and employees) for services to the Company. These options vest on January 23, 2019 and expire 5 years after the vesting date, with an exercise price of $4.00 per share. The Company has calculated the estimated fair market value of these options at $1,930,265, using the Black-Scholes model and the following assumptions: term 6 years, stock price $3.75, exercise price $4.00, 75.4% volatility, 2.55% risk free rate, and no forfeiture rate.

Effective September 28, 2018, the Company granted stock options to purchase 25,000 shares of common stock to the Company controller for services to the Company. These options vest on September 28, 2019 and expire 5 years after the vesting date, with an exercise price of $2.59 per share. The Company has calculated the estimated fair market value of these options at $39,733, using the Black-Scholes model and the following assumptions: term 6 years, stock price $2.59, exercise price $4.00, 77.59% volatility, 3.01% risk free rate, and no forfeiture rate.

In December 2018, the Board of Directors amended the terms of certain outstanding options such that (i) the expiration date for outstanding options to purchase up to an aggregate of 645,000 shares of the Company’s common stock, granted on August 18, 2014 under the 2011 Plan, was extended for both vesting installments from four (4) years from the vesting date of each installment to a single expiration date of August 18, 2020, (ii) the expiration date for outstanding options to purchase up to an aggregate of 20,000 shares of the Company’s common stock, granted on May 18, 2015 under the 2011 Plan, was extended from four (4) years after the vesting date to May 18, 2021, and (iii) the expiration date for outstanding options to purchase up to an aggregate of 317,000 shares of the Company’s common stock, granted July 23, 2015 under the 2011 Plan, was extended from four (4) years after vesting to five years and six months after vesting, or July 23, 2021. As a result of these amendments $209,308 was recorded as additional options expense.

Below is a table summarizing the options issued and outstanding as of December 31, 2018, all of which were issued pursuant to the 2011 Plan (for option issuances prior to 2016) or the 2015 Plan (for option issuances commencing in 2016) and which have a weighted average exercise price of $4.00 per share and an aggregate weighted average remaining contractual life of 3.53 years. As of December 31, 2018, an aggregate of 799,000 shares of common stock remained available for future issuance under the 2015 Stock Incentive Plan.

Stock option expense of $2,570,095 and $2,435,088 was recorded in the years ended December 31, 2018 and December 31, 2017 respectively. Total remaining unrecognized compensation cost related to non-vested stock options is approximately $150,354 and is expected to be recognized over a period of 0.74 years. As of December 31, 2018, the total intrinsic value of stock options was $Nil.