SHARE BASED COMPENSATION (Tables)

12 Months Ended

Dec. 31, 2013

Our Board of Directors granted the following incentive stock option awards to executives or employees and nonstatutory stock option awards to directors or non-employees for the years ended December 31:

	2013		2012(1)
Incentive Stock Options
Quantity		232,500		-
Weighted average fair value per share	$	0.24		-
Fair value	$	56,112		-

Nonstatutory Stock Options
Quantity		735,000		-
Weighted average fair value per share	$	0.24		-
Fair value	$	177,388		-

(1)	The Company did not award any share-based compensation for the year ended December 31, 2012.

Weighted average assumptions to estimate the fair value of share based awards

We account for share-based compensation under ASC Topic 718, Stock Compensation, which requires the measurement and recognition of compensation expense in the financial statements for all share-based payment awards made to employees, consultants, and directors is measured based on the estimated fair value of the award on the grant date. We use the Black-Scholes option-pricing model to estimate the fair value of share-based awards with the following weighted average assumptions for the years ended December 31:

	2013			2012 (4)
Incentive Stock Options
Expected volatility (1)		103.55	%		-
Risk-fee interest rate % (2)		0.81	%		-
Expected term (in years)		5.0			-
Dividend yield (3)		-			-
		-
Nonstatutory Stock Options
Expected volatility (1)		103.55	%		-
Risk-fee interest rate % (2)		0.81	%		-
Expected term (in years)		5.0			-
Dividend yield (3)		-			-

(1)	Expected volatility assumption was based upon a combination of historical stock price volatility measured on a daily basis and an estimate of expected future stock price volatility.

(2)	Risk-free interest rate assumption is based upon U.S. Treasury bond interest rates appropriate for the term of the stock options.

(3)	The Company does not currently intend to pay cash dividends, thus has assumed a 0% dividend yield.

(4)	The Company did not award any share-based compensation for the year ended December 31, 2012.

Allocated share-based compensation expense

The following table summarizes share-based compensation related to stock options for the years ended December 31:

	2013		2012
Research and development	$	16,863	$	6,280
Selling, general and administrative		64,076		31,617
Total share-based compensation expense	$	80,939	$	37,897

Stock option activity

The following table summarizes the stock options outstanding and the number of shares of common stock subject to exercise as of December 31, 2013 and the changes therein during the two years then ended:

	Stock Options			Weighted Average Exercise Price per Share
Outstanding as of December 31, 2011		287,745		$	16.89
Granted		-			-
Forfeited/cancelled		(129,336	)		22.49
Exercised		-			-
Outstanding as of December 31, 2012		158,409			12.32
Granted		967,500			0.33
Forfeited/cancelled		(111,002	)		1.03
Exercised		-			-
Outstanding as of December 31, 2013		1,014,907		$	2.12

Stock option grants outstanding and exercisable

The following table presents the stock option grants outstanding and exercisable as of December 31, 2013:

Options Outstanding						Options Exercisable
Stock Options Outstanding		Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Life in Years		Stock Options Exercisable		Weighted Average Exercise Price per Share
	892,500	$	0.33		9.2		197,500	$	0.33
	53,334		2.38		4.5		46,668		2.36
	30,002		14.40		3.3		30,002		14.40
	39,071		33.35		3.8		39,071		33.35
	1,014,907	$	2.12		8.6		313,241	$	6.10

Nonvested restricted stock awards

The following table summarizes share-based compensation related to restricted stock awards for the years ended December 31:

	2013		2012
Research and development	$	444	$	3,762
Selling, general and administrative		547		4,535
Total share-based compensation expense	$	991	$	8,297

At December 31, 2013, the balance of unearned share-based compensation to be expensed in future periods related to restricted stock awards, as adjusted for expected forfeitures, is nil.

The following table summarizes the non-vested restricted stock awards outstanding and the number of shares of common stock subject to potential issue as of December 31, 2013 and the changes therein during the two years then ended:

	Restricted Stock			Weighted Average Grant Date Fair Value
Outstanding as of December 31, 2011		1,096		$	41.47
Granted		-			-
Forfeited/cancelled		(97	)		34.59
Exercised/issued		(699	)		45.39
Outstanding as of December 31, 2012		300		$	34.59
Granted		-			-
Forfeited/cancelled		-			-
Exercised/issued		(300	)		34.59
Outstanding as of December 31, 2013		-		$	-