Stockholders' equity (deficit)

3 Months Ended

Mar. 31, 2015

Stockholders' equity (deficit)

Stockholders' equity (deficit)

Note 7 - Stockholders’ equity (deficit)

Stock options

In 2002, the Company adopted the 2002 Stock Option and Restricted Stock Plan, or the 2002 plan, pursuant to which the Company’s Board of Directors could grant either incentive stock options or non-qualified stock options, shares of restricted stock, shares of unrestricted common stock, and other share-based awards to officers and employees. The 2002 plan authorized a pool of options to purchase a total of 3,036 shares of the Company’s common stock. The 2002 plan specified that, in a calendar year, the aggregate fair market value of incentive stock options, determined at the date of the grant, which became exercisable for the first time during any calendar year, could not exceed $100,000 for any participant. Stock options were granted at fair market value or at 110% of fair market value for those participants who were more than 10% stockholders. Generally, stock options have 10-year contractual terms, vest 25% per year and become fully exercisable after four years from the grant date.

In 2008, the Company adopted the 2008 Stock Option and Restricted Stock Plan, or the 2008 plan, pursuant to which the Company’s Board of Directors may grant either incentive or non-qualified stock options or shares of restricted stock to directors, key employees, consultants and advisors. Upon adoption, the 2008 plan authorized grants of options to purchase a total of 7,570 shares of the Company’s common stock. The Company increased the number of shares of common stock available under the 2008 plan several times and as of March 31, 2015 there were 217,992 shares available for grant under the 2008 plan.  Only employees are eligible to have options granted as “incentive stock options.” Generally, stock options have 10-year contractual terms, vest 25% per year and become fully exercisable after four years from the grant date.

For the three months ended March 31, 2015 and 2014, the Company recorded $590,603 and $28,927, respectively, of stock compensation expense.  The allocation of share-based compensation expense by operating expenses is as follows:

	Three months ended March 31,
	2015		2014
Research and development	$	36,456	$	6,094
General and administrative	83,299		22,060
Sales and marketing	470,848		773
	$	590,603	$	28,927

During the three months ended March 31, 2015, the Company granted stock options to acquire 826,500 shares of common stock at an exercise price of $0.61 per share.  The 2015 awards had a weighted average grant date fair value per share of $4.21.  The Company made no grants in the first quarter of 2014.  The Company has total stock options to acquire 1,229,494 shares of common stock outstanding at March 31, 2015.

Restricted stock units

In March 2014, the Company awarded restricted stock units to acquire 130,640 shares of common stock to its Chief Executive Officer. The restricted stock units were compensation for his service as Chief Executive Officer, or CEO, from October 2013 through June 2014 and were subject to forfeiture if he did not continue to perform management services through October 24, 2014. The restricted stock units vested on October 24, 2014 and 130,640 shares of common stock were issued to the CEO.

Stock purchase warrants

The Company has total stock purchase warrants to acquire 258,605 and 33,594 shares of common stock outstanding at March 31, 2015 and December 31, 2014, respectively.  In the second quarter of 2015 in connection with the Company’s IPO, the Company issued additional stock purchase warrants to investors and to its investment bankers.  See Note 11.