SUBSEQUENT EVENT

12 Months Ended

Dec. 31, 2014

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

NOTE 14—SUBSEQUENT EVENTS

        In January 2015, the Company granted stock options to purchase 251,000 common shares to its five employees, outside directors, and certain vendors. The options were issued pursuant to the 2013 Equity Incentive Plan at an exercise price of $11.35, with one half of the options vesting upon issuance and the balance vesting evenly over the subsequent 24 months. Compensation expense associated with these awards will be recognized over the vesting period based on the fair value of the option at grant date.

        In January 2015, the Company entered into a new amendment to the Product Development Agreement with RRD International, LLC dated January 2014, pursuant to which RRD International, LLC will continue to provide certain strategic product development services to the Company for an additional six month term. These product development services include the development, planning and execution of a fully integrated product development strategy and implementation of that strategy either directly or with third party vendors. As consideration for services rendered, the Company has agreed to pay RRD International, LLC a total of $600,000, consisting of $450,000 in cash and $150,000 in restricted shares of our common stock (12,346 shares). Terms of services to be provided after June 2015, if any, will be negotiated at a later date. The Company will recognize the costs incurred in connection with this agreement as research and development expenses as services are rendered.