Common Stock Options

12 Months Ended

Dec. 31, 2015

Notes to Financial Statements

COMMON STOCK OPTIONS

On February 11, 2011, the Company adopted its 2011 Equity Incentive Plan (the “Plan”) under which 6,475,750 shares of common stock were reserved for issuance under options or other equity interests as set forth in the Plan. Under the Plan, options are available for issuance to employees, officers, directors, consultants and advisors. The Plan provides that the board of directors will determine the exercise price and vesting terms of each option on the date of grant. Options granted under the Plan generally expire ten years from the date of grant. As of December 31, 2015, there were 1,318,405 shares available for issuance under the Plan.

Under the Plan, the Company has issued 161,250 shares of fully paid and non-assessable restricted common stock to a director of the Company. These shares of restricted stock are subject to the terms of the Plan and are unvested and outstanding as of December 31, 2015 The shares shall vest upon the earlier of (i) the occurrence of a Change of Control, as defined in the Plan, (ii) the successful completion of a Phase II clinical trial for any of the Company’s products, or (iii) the determination by the board of directors to provide for immediate vesting. The weighted average grant-date fair value is $1.07 per share.

The following is a summary of all common stock option activity for the year ended December 31, 2015:

	Options Outstanding		Weighted Average Exercise Price
Outstanding at December 31, 2014		4,644,428	$	0.68
Options granted		625,000	$	0.39
Options forfeited		(273,333)	$	0.58
Options exercised		-	$	-
Outstanding at December 31, 2015		4,996,095	$	0.65

	Options Exercisable		Weighted Average Exercise Price per Share
Exercisable at December 31, 2014		3,781,096	$	0.68
Exercisable at December 31, 2015		4,312,762	$	0.68

The weighted average fair value of options granted during the year ended December 31, 2015 was $0.11.

The weighted average remaining contractual term for exercisable and outstanding options is 4.85 and 5.44 years, respectively.  The aggregate intrinsic value of all of the Company’s exercisable and outstanding options is approximately $87,750 and $87,750, respectively.

As of December 31, 2015, there was approximately $49,713 of unrecognized compensation cost related to non-vested options. The unrecognized compensation expense is estimated to be recognized over a period of 2.7 years at December 31, 2015.

The Company used the Black-Scholes option pricing model to value all option grants (see Note 2, Summary of Significant Accounting Policies, “Accounting for Share Based Payments”).