Stockholders' equity

3 Months Ended

Mar. 31, 2016

Stockholders' Equity Note [Abstract]

Stockholders' equity

Stock Options and Warrants

Warrant activity (including warrants issued to investors and for consulting and advisory services) for the three months ended March 31, 2016 and 2015 was as follows:

	For the three months ended
	March 31,
	2015			2015
Beginning balance outstanding		26,397,410			23,933,922
Warrants issued during the year:
Expired during the year		(546,667	)		(73,530	)
Exercised during the year		(12,270,853	)		—
In connection with issuance of convertible notes		—			750,004
In connection with tender offer exercise		26,479,217			—
Ending balance outstanding		40,059,107			24,610,396

The numbers and exercise prices of all options and warrants outstanding at March 31, 2016 are as follows:

Shares Outstanding	Weighted Average Exerecise Price		Expiration Fiscal Period
85,833		9.00	2nd Qtr, 2016
625		9.00	3rd Qtr, 2016
475,142		7.54	4th Qtr, 2016
34,749		7.99	1st Qtr, 2017
1,265,850		6.86	2nd Qtr, 2017
536,500		1.14	3rd Qtr, 2017
1,162,088		6.45	4th Qtr, 2017
10,000		6.60	1st Qtr, 2018
750,000		0.25	4th Qtr, 2018
35,063,685		0.38	1st Qtr, 2019
883,336		0.91	2nd Qtr, 2019
1,113,000		1.16	3rd Qtr, 2019
2,608,000		1.15	4th QTR, 2019
505,000		0.92	1st Qtr, 2020
75,000		0.65	2nd Qtr, 2019
1,707,780		0.19	4th Qtr, 2020
6,836,016		0.12	1st Qtr, 2021
133,334		7.05	4th Qtr, 2020
53,245,938

Stock-based Compensation

Results of operations for the three months ended March 31, 2016 and 2015 include stock based compensation costs totaling $433,180 and $590,937, respectively, all of which was charged to personnel related expenses.

For purposes of accounting for stock based compensation, the fair value of each option and warrant award is estimated on the date of grant using the Black-Scholes-Merton option pricing formula. Compensation expense is recognized over the service period. The following weighted average assumptions were utilized for the calculations during the three months ended March 31, 2016 and 2015:

	For the three months ended
	March 31,
	2016			2015
Expected life (in years)	2.87 years			2.74 years
Weighted average volatility		108.81	%		126.09	%
Forfeiture rate		13.58	%		17.49	%
Risk-free interest rate		.96	%		.96	%
Expected dividend rate		0.00	%		0.00	%

The weighted average expected option and warrant term for employee stock options granted reflects the application of the simplified method set out in SEC Staff Accounting Bulletin No. 107, Share-Based Payment (SAB 107). The simplified method defines the life as the average of the contractual term of the options and the weighted average vesting period for all options. The Company utilized this approach as its historical share option exercise experience does not provide a reasonable basis upon which to estimate an expected term. Expected volatilities are based on the historical volatility of the Company’s stock. The Company estimated the forfeiture rate based on our expectation for future forfeitures and (for the purpose of computing stock based compensation given the contractual vesting of the Company’s options and warrants outstanding) the Company assumes that all options and warrants will vest. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield in effect at or near the time of grant. The Company has never declared or paid dividends and has no plans to do so in the foreseeable future.

As of March 31, 2016, $603,431 of total unrecognized compensation cost related to unvested stock based compensation arrangements is expected to be recognized over a weighted-average period of 20.3 months.