The Company maintains a stock option plan under which certain employees are awarded option grants based on a combination of performance and tenure. The stock option plan provides for the grant of up to 2,000,000 shares. All options may be exercised for a period up to 10 years following the grant date, after which they expire and are vested in 4 or 5 years from the grant date.

During the six months ended June 30, 2015, 480,000 options were granted to employees. These options vest over five years and are granted with an exercise price of $1.60 and the expiration date is ten years from the grant date. The last ones expire January 2025.

During the six months ended June 30, 2015, 380,000 options were forfeited due to employee resignation. The options were not vested and the option expense reversed was $70,563.

The Company uses the Black-Scholes option pricing model to estimate the fair value of stock-based awards on the date of grant.

Under the Black-Scholes option price model, fair value of the option granted is estimated at $759,838 at the respective issuance date.

The following table summarizes the assumptions used to estimate the fair value of stock options granted during the six months ended June 30, 2015:

	2015
Expected dividend yield	0%
Weighted-average expected volatility	200%
Weighted-average risk-free interest rate	0.48%
Expected life of options	5-8 years

Total compensation cost related to stock options was $169,776 for the six months ended June 30, 2015. As of June 30, 2015, there was $460,124 of unrecognized compensation costs related to stock options, which is expected to be recognized over a weighted average period of 4.57 years. The following table represents stock option activity as of and for the period ended June 30, 2015:

			Weighted
	Number of		Average	Contractual Life		Intrinsic
	Options		Exercise Price	in Years		Value

Outstanding at December 31, 2014	900,000	$	1.00	3.41		-
Exercisable at December 31, 2014	112,500	$	1.00	3.16	$	56,250

Forfeited	(380,000)		-	-		-
Granted	480,000	$	1.60	9.56		-
Exercised	-		-	-		-

Outstanding at June 30, 2015	1,000,000	$	1.16	4.57		-
Exercisable at June 30, 2015	272,500	$	1.02	2.94	$	144,375