Note 12.        Subsequent Events

The Company has implemented the most recent FASB accounting pronouncement for reporting subsequent events. This standard establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before the consolidated financial statements are issued. The adoption of this accounting pronouncement did not impact our financial position or results of operations. The Company evaluated all events or transactions that occurred after March 31, 2015, up through the date these consolidated financial statements were issued and no subsequent events occurred that required additional disclosure in the accompanying consolidated financial statements.

On March 25, 2015, the Compensation Committee and Board of Directors approved the 2015 Equity Incentive Plan (the “Plan”) to authorize grants of (a) Incentive Stock Options, (b) Non-qualified Stock Options, (c) Stock Appreciation Rights, (d) Restricted Awards, (e) Performance Share Awards, and (f) Performance Compensation Awards to the employees, consultants, and directors of the Company. The Plan authorizes a total of 3,000,000 shares to be available for grant under the plan. The plan becomes effective upon ratification of the shareholders of the Company at the annual meeting to be held in Washington DC on July 10, 2015.

On April 8, 2015, the Compensation Committee and the Board of Directors granted short term incentive stock options totaling 463,192 and 148,845 stock options under the 2006 Stock Plan and the 2015 Equity Incentive Plan, respectively, to employees and consultants of the Company. On April 9, 2015, the Compensation Committee and the Board of Directors granted an additional 47,017 and 15,109 stock options under the 2006 Stock Plan and the 2015 Equity Incentive Plan respectively. These stock options vest immediately but the grants under the 2015 Equity Incentive Plan can only be exercised upon ratification of the Plan. These stock options have a strike price of $1.26, which was the closing price of the Company’s stock on the prior business day, and the stock options have a fair market value of $1.06, based on a risk free rate of 1.49%, volatility of 86.86%, and an expected life of six years. The options have a 10 year term.

On April 8, 2015 and April 9, 2015, the Compensation Committee and the Board of Directors granted long term incentive stock options totaling 483,668 and 84,129 stock options respectively, under the 2015 Equity Incentive Plan to employees and consultants of the Company. These stock options vest 1/3 on each annual anniversary date over three years. These stock options have a strike price of $1.26, which was the closing price of the Company’s stock on the prior business day, and the stock options have a fair market value of $1.06, based on a risk free rate of 1.49%, volatility of 86.86%, and an expected life of six years. These options have a 10 year term. On April 8, 2015, the Compensation Committee and the Board of Directors granted 112,996 long term incentive stock options under the 2015 Equity Incentive Plan to the directors of the Company. These stock options fully vest on the first annual anniversary date of the grant. These stock options have a strike price of $1.26, which was the closing price of the Company’s stock on the prior business day, and the stock options have a fair market value of $1.06, based on a risk free rate of 1.49%, volatility of 86.86%, and an expected life of six years. These options have a 10 year term.