Warrant activity. We have accounted for warrants as equity instruments in accordance with EITF 00-19 (ASC 815-40) Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock, and as such, will be classified in stockholders’ equity as they meet the definition of “…indexed to the issuer’s stock” in EITF 01-06 (ASC 815-40) The Meaning of Indexed to a Company’s Own Stock. In prior years, we estimated the fair value of the warrants using the Black-Scholes option pricing model based on assumptions at the time of issuance.

A summary of current warrant activity is as follows:

Stock options. For the six months ended June 30, 2014 and 2013, we issued 106,250 and -0- stock options, respectively. Stock options issued to members of our Board of Directors were 50,000 and -0- for the six months ended June 30, 2014 and 2013, respectively. Stock options issued to independent contractors were 56,250 and -0- for the six months ended June 30, 2014 and 2013, respectively. The stock options granted for the six months ended June 30, 2014 were calculated to have a fair value of $30,672 using the Black-Scholes option pricing model with the following assumptions:

A summary of stock option activity is as follows:

Stock grants. For the six months ended June 30, 2014 and 2013, we granted 275,000 and -0- shares of common stock, respectively. Stock granted to our Board of Directors was 175,000 and -0- shares for the six months ended June 30, 2014 and 2013. Stock granted to independent contractors was 100,000 and -0- shares for the six months ended June 30, 2014 and 2013.

Share based compensation. The cost of all stock options and stock grants issued have been classified as share based compensation for the six months ended June 30, 2014 and 2013, respectively. Total share based compensation was $114,823 and $2,902 for the six months ended June 30, 2014 and 2013, respectively. The share based compensation is included in selling, general & administrative expenses on the statement of operations.