(6)

Stock-Based Compensation. On December 27, 2011, the Company’s stockholders approved the 2011 Equity Incentive Plan (“2011 Plan”). Options, restricted stock, performance share awards and bonus share awards in lieu of obligations may be issued under the 2011 Plan. Both incentive stock options and nonqualified stock options can be granted under the 2011 Plan. The exercise price of the stock options cannot be less than the fair market value of the common stock on the date of grant. Options must be exercised within ten years of the date of grant.

As of March 31, 2018, only common stock has been issued as compensation to directors for services rendered under this plan. Pursuant to the 2011 Plan (amended), the Company accrued stock compensation cost of 2,821 shares at $3.14 per share related to first quarter director’s fees during the period ending March 31, 2017. As of April 1, 2017, the Company discontinued the issuance of common stock as a method of payment of director’s fees. The plan required the directors to remain on the Board until December 31, 2017 for the shares to be issued.

The Company accrued $200,000 during the period ending March 31, 2018 for 36,101 shares due to be issued as compensation to a director. There were an additional 105,820 shares due to this director which were accrued for during prior periods. The aforementioned shares of 2,821, 36,101, and 105,820 were reclassified to common stock as of March 31, 2018. At March 31, 2018, a total of 1,119 shares remain available for grant.