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NOTE 6 - STOCKHOLDERS' EQUITY
 3 Months Ended
Mar. 31, 2016
Stockholders' Equity Note [Abstract]  
Stockholders' Equity Note Disclosure [Text Block]
NOTE 6 – STOCKHOLDERS’ EQUITY

On June 26, 2015, the Company filed an amendment to its Articles of Incorporation and effected a 50-for-1 reverse stock split of its issued and outstanding shares of common stock, whereby 250,666,631 outstanding shares of the Company’s common stock were converted into 5,013,366 shares of the Company's common stock.  In addition, the Company reduced its number of authorized common shares from 680,000,000 to 13,600,000.  The reverse stock split was effective in the market commencing on July 2, 2015. All per share amounts and number of shares in the condensed consolidated financial statements, related notes and other items throughout this Form 10-Q have been retroactively restated to reflect the reverse stock split.

During the three months ended March 31, 2016, the Company issued 27,155 shares of its common stock as consideration for investor relations services valued at $38,340.

During the three months ended March 31, 2016, the Company issued 9,661 shares of its common stock as consideration for legal services valued at $13,650.

In March 2016, pursuant to a securities purchase agreement, the Company sold an aggregate of 470,591 shares of its common stock together with warrants to purchase an aggregate of 117,648 shares of its common stock for net proceeds, after commissions and other costs, of $385,310. The warrants are exercisable at an exercise price of $1.25 for a term of five years.

The Company paid the placement agent cash commissions of $10,000 and also costs and expenses of $4,692.

Options

Option valuation models require the input of highly subjective assumptions. The fair value of stock-based payment awards was estimated using the Black-Scholes option model with a volatility figure derived from using the Company’s historical stock prices for 2015. Prior to 2015, the Company derived the volatility figure from an index of historical stock prices for comparable entities. Management determined this assumption to be a more accurate indicator of value. The Company accounts for the expected life of options based on the contractual life of options for non-employees. For employees, the Company accounts for the expected life of options in accordance with the “simplified” method, which is used for “plain-vanilla" options, as defined in the accounting standards codification.

The risk-free interest rate was determined from the implied yields of U.S. Treasury zero-coupon bonds with a remaining life consistent with the expected term of the options. 

In addition, the Company is required to estimate the expected forfeiture rate and only recognize expense for those shares expected to vest. In estimating the Company’s forfeiture rate, the Company analyzed its historical forfeiture rate, the remaining lives of unvested options, and the number of vested options as a percentage of total options outstanding. If the Company’s actual forfeiture rate is materially different from its estimate, or if the Company reevaluates the forfeiture rate in the future, the stock-based compensation expense could be significantly different from what the Company has recorded in the current period.

The Company estimated forfeitures related to option grants at a weighted average annual rate of  0% per year, as the Company does not yet have adequate historical data, for options granted during the three months ended March 31, 2016 and 2015.

The following assumptions were used in determining the fair value of employee and vesting non-employee options during the three months ended March 31, 2016 and 2015:

   
March 31,
2016
   
March 31,
2015
 
Risk-free interest rate
   
1.54% - 1.73
%
   
1.68% - 1.94
%
Dividend yield
   
0
%
   
0
%
Stock price volatility
   
129.41%-130.97
%
   
140.67% -145.24
%
Expected life
 
5 – 9.2 years
   
7-10  years
 
Weighted average grant date fair value
 
$
1.07
   
$
5.50
 

On January 4, 2016, the Company awarded options to purchase an aggregate of 233,495 shares of common stock to the Company’s Chief Executive Officer, Andrew Levi.  These options vest immediately and have a term of 10 years. 60,000 of the options have an exercise price of $1.375 per share and  173,495 of the options are exercisable at $1.25 per share.  The options had an aggregate grant date fair value of $250,000.

The following table summarizes the stock option activity for the three months ended March 31, 2016:

   
Shares
   
Weighted-Average
Exercise Price
   
Weighted Average
Remaining
Contractual Term
   
Aggregate
Intrinsic Value
 
Outstanding at January 1, 2016
   
629,628
   
$
7.59
     
4.5
       
Granted
   
233,495
   
$
1.28
     
10.0
       
Canceled/expired
                             
Outstanding at March 31, 2016
   
863,123
   
$
5.89
     
5.76
   
$
272,554
 
                                 
Exercisable at March 31, 2016
   
758,979
   
$
5.89
     
5.3
   
$
265,654
 

The following table presents information related to stock options at March 31, 2016:

Options Outstanding
   
Options Exercisable
 
Exercise
    Price
   
Number of
Options
   
Weighted Average
Remaining Life
In Years
   
Exercisable
Number of
Options
 
$ 0.00-5.00       456,440       7.2       431,126  
  5.01-12.50       382,675       4.1       303,845  
  12.51-25.00       15,008       4.0       15,008  
  25.01-45.00       9,000       3.6       9,000  
          863,123       5.8       758,979  

As of March 31, 2016, stock-based compensation of $453,351 remains unamortized and is expected to be amortized over the weighted average remaining period of 1.08 years.

The stock-based compensation expense related to option grants was $328,948 and $56,154 during the three months ended March 31, 2016 and 2015, respectively.

Warrants

The following table summarizes information with respect to outstanding warrants to purchase common stock of the Company, all of which were exercisable, at March 31, 2016: 

Exercise
Price
   
Number
Outstanding
  Expiration Date
$ 1.25     $ 117,648  
March 2021
  4.75       482,500  
Sept/Oct 2020
  5.00       220,913  
August 2016
          821,061    

The following table summarizes the warrant activity for the three months ended March 31, 2016:

   
Shares
   
Weighted-Average
Exercise Price
   
Weighted-Average
Remaining
Contractual Term
   
Aggregate
Intrinsic
Value
 
Outstanding at January 1, 2016
   
703,413
   
$
4.83
     
3.5
       
Grants
   
117,648
   
$
1.25
     
5.0
       
Exercised
   
-
                       
Forfeitures or expirations
   
-
                       
Outstanding at March 31, 2016
   
821,061
   
$
4.32
     
3.5
   
$
136,472
 
                                 
Exercisable at March 31, 2016
   
821,061
   
$
4.32
     
3.5
   
$
136,472
 

In connection with the sale of common stock, the Company issued an aggregate of 117,648 warrants to purchase the Company’s common stock at $1.25 per share expiring five years from the date of issuance.