11. CONTRACTS AND AGREEMENTS	6 Months Ended
Jun. 30, 2015
Notes to Financial Statements
NOTE 11. CONTRACTS AND AGREEMENTS	In September 2014, the Company entered into a Sales and Distribution Agreement, superseding previous agreements, with TOMI Panama covering Panama, El Salvador, Guatemala, Nicaragua, Columbia, Honduras, Costa Rica and Ecuador. TOMI Panama is its exclusive distributor of the Company’s products and services within the country of Panama. On October 15, 2014, the Company entered into a manufacturing and development agreement with RG Group, Inc. For the six months ended June 30, 2015, RG Group, Inc. manufactured substantially all of the Company’s equipment. In January of 2015, the Company entered into a consulting agreement that provides for a fee based on revenue received from existing and prospective clients assigned and revenue from sales related to customers the consultant finds for the Company. The agreement also provided for the issuance of 100,000 shares of the Company’s common restricted stock that were issued in February of 2015 and valued at $25,000. In addition, the agreement provides for the issuance of 75,000 common stock warrants on a quarterly basis that vest upon issuance with a strike price equal to the VWAP for the 5 day period prior to the close of the quarter with a term of 3 years. The exercise price for the warrants issued in April and accrued for in the second quarter was $0.50 and $0.62, respectively. During the six months ended June 30, 2015, the Company utilized the Black-Scholes method to fair value the 150,000 warrants with the following range of assumptions: volatility, 174%; expected dividend yield, 0%; risk free interest rate, 1.01%-1.42%; and a life of 3 years. The grant date fair value of the warrant issued in April and accrued for in the second quarter was $0.37 and $.54, respectively. For the six months ended June 30, 2015, the Company recognized approximately $68,000 in equity based compensation on the issuance of the warrants in April and the accrual of the warrants issued in July. In May of 2015, the Company entered into a consulting agreement that provides for the issuance of 600,000 shares of restricted common stock which was issued in July of 2015 and valued at $264,000. In addition, the agreement provides for the issuance of 3,000,000 common stock warrants that vest upon issuance with an exercise price of $1.00 and have a term of 5 years. The Company utilized the Black-Scholes method to fair value the 3,000,000 warrants with the following assumptions: volatility, 191%; expected dividend yield, 0%; risk free interest rate, 1.49%; and a life of 5 years. The grant date fair value of each warrant was $0.42. For the quarter ended June 30, 2015, the Company recognized approximately $1,259,000 in equity based compensation on the warrants issued. In May 2015, the Company was awarded a grant by the United States Agency for International Development (“USAID”) in the amount of $559,000 for the development of SteraMistTM Mobile Decontamination Chambers to fight the Ebola epidemic. The grant is based on milestones set forth on the agreement between the Company and USAID.

11. CONTRACTS AND AGREEMENTS

6 Months Ended

Jun. 30, 2015

In September 2014, the Company entered into a Sales and Distribution Agreement, superseding previous agreements, with TOMI Panama covering Panama, El Salvador, Guatemala, Nicaragua, Columbia, Honduras, Costa Rica and Ecuador. TOMI Panama is its exclusive distributor of the Company’s products and services within the country of Panama.

On October 15, 2014, the Company entered into a manufacturing and development agreement with RG Group, Inc. For the six months ended June 30, 2015, RG Group, Inc. manufactured substantially all of the Company’s equipment.

In January of 2015, the Company entered into a consulting agreement that provides for a fee based on revenue received from existing and prospective clients assigned and revenue from sales related to customers the consultant finds for the Company. The agreement also provided for the issuance of 100,000 shares of the Company’s common restricted stock that were issued in February of 2015 and valued at $25,000. In addition, the agreement provides for the issuance of 75,000 common stock warrants on a quarterly basis that vest upon issuance with a strike price equal to the VWAP for the 5 day period prior to the close of the quarter with a term of 3 years. The exercise price for the warrants issued in April and accrued for in the second quarter was $0.50 and $0.62, respectively. During the six months ended June 30, 2015, the Company utilized the Black-Scholes method to fair value the 150,000 warrants with the following range of assumptions: volatility, 174%; expected dividend yield, 0%; risk free interest rate, 1.01%-1.42%; and a life of 3 years. The grant date fair value of the warrant issued in April and accrued for in the second quarter was $0.37 and $.54, respectively. For the six months ended June 30, 2015, the Company recognized approximately $68,000 in equity based compensation on the issuance of the warrants in April and the accrual of the warrants issued in July.

In May of 2015, the Company entered into a consulting agreement that provides for the issuance of 600,000 shares of restricted common stock which was issued in July of 2015 and valued at $264,000. In addition, the agreement provides for the issuance of 3,000,000 common stock warrants that vest upon issuance with an exercise price of $1.00 and have a term of 5 years. The Company utilized the Black-Scholes method to fair value the 3,000,000 warrants with the following assumptions: volatility, 191%; expected dividend yield, 0%; risk free interest rate, 1.49%; and a life of 5 years. The grant date fair value of each warrant was $0.42. For the quarter ended June 30, 2015, the Company recognized approximately $1,259,000 in equity based compensation on the warrants issued.

In May 2015, the Company was awarded a grant by the United States Agency for International Development (“USAID”) in the amount of $559,000 for the development of SteraMistTM Mobile Decontamination Chambers to fight the Ebola epidemic. The grant is based on milestones set forth on the agreement between the Company and USAID.