Stock Option and Incentive Plans

9 Months Ended

Sep. 30, 2014

9. Stock Option and Incentive Plans

In 2005, we adopted the 2005 Stock Option and Incentive Plan (“2005 Plan”) that authorizes us to grant options, restricted stock and other equity-based awards. As amended and as of September 30, 2014, the number of shares of common stock reserved for issuance in connection with the Plan was 1,232,343. The amount, terms of grants, and exercisability provisions are determined and set by our board of directors.

Effective in August 2014, we adopted our 2014 Equity Incentive Plan (“2014 Plan”) that authorizes us to grant options, restricted stock and other equity-based awards initially for 700,000 shares of common stock, subject to adjustment in accordance with the plan. As of September 30, 2014, the number of shares of common stock reserved for issuance in connection with the 2014 Plan was 658,000. There were 1,108,173 stock options outstanding as of September 30, 2014 at a weighted average exercise price of $1.25 per share, and 42,000 options were granted to nonemployee directors during the three and nine month periods ended September 30, 2014.

Total compensation cost recognized for all stock option awards in the statements of operations is as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Research and development	$	35,324	$	—	$	38,789	$	—
General and administrative	180,752		72,028		224,274		160,510
Total stock-based compensation expense	$	216,076	$	72,028	$	263,063	$	160,510

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

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