Note 12 - Share-based Payments

On January 23, 2014, upon effectiveness of the registration statement filed with the SEC, the Company adopted the 2013 Stock Incentive Plan (the “Plan”) which will provide for the issuance of up to 400,000 shares. The purpose of the Plan is to provide additional incentive to those officers, employees, consultants and non-employee directors of the Company and its parents, subsidiaries and affiliates whose contributions are essential to the growth and success of the Company’s business.

On January 9, 2015, the Board of Directors of the Company approved, upon recommendation from the Compensation Committee of the Board, by unanimous written consent the Amended and Restated 2013 Incentive Stock and Award Plan (the “Plan”), which increases the number of authorized shares of common stock subject to the Plan to 800,000 shares.

The 2013 Plan may be administered by the board or a board-appointed committee. Eligible recipients of option awards are employees, officers, consultants or directors (including non-employee directors) of the Company or of any parent, subsidiary or affiliate of the Company. The board has the authority to grant to any eligible recipient any options, restricted stock or other awards valued in whole or in part by reference to, or otherwise based on, the Company’s common stock.

The Company has issued warrants to various employees, consultants and members of the Board of Directors of the Company for their services either in connection with the Company’s ongoing efforts to raise capital or the development of the Company’s products. In addition, the Company has granted warrants to lenders in connection with the issuance of debt. Each warrant granted may be exchanged for a prescribed number of shares of common stock. The warrants expire March 18, 2015. The following table summarizes the warrant activities for the years ended December 31, 2015 and 2014:

Qualified option holders may exercise their options at their discretion. Each option granted may be exchanged for a prescribed number of shares of common stock.

On June 10, 2014 the Company approved issuance of 115,000 options to purchase common shares to Directors and Officers at an exercise price of $5.50 per common share and 60,000 options to purchase common shares to key employees at an exercise price of $3.98 per common share.

On December 30, 2015 the Company approved the issuance of 30,000 options to purchase common shares to key employees at an exercise price of $1.23 per common share and 15,500 options to purchase common shares for services at an weighted average exercise price of $3.70 per common share.

These options were issued under the Amended and Restated 2013 Incentive Stock and Award Plan, in which an aggregate of up to 800,000 shares of the Company’s common shares are reserved for issuance. All options are immediately exercisable and carry a five year expiration.

The calculated fair value of these options was distributed to the following categories on the consolidated statement of operations and comprehensive loss:

The options and warrants issued under the above plan were valued using a Black Scholes option pricing model. The assumptions utilized in calculating the value of the issued options under Black Scholes are as follows:

The following table summarizes the option activities for the years ended December 31, 2015 and 2014:

The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the closing stock price of $1.21 and $3.99 for our common shares on December 31, 2015 and 2014.

The total grant date fair value of stock options vested for the years ended December 31, 2015 and 2014 was $52,356 and $549,600.

As of December 31, 2015 and 2014, there was $- of unrecognized compensation cost related to outstanding employee stock options.