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NOTE 6 - STOCKHOLDERS' EQUITY
 6 Months Ended
Jun. 30, 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.

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.

In May 2016, pursuant to a securities purchase agreement, the Company sold an aggregate of 609,756 shares of its common stock together with warrants to purchase an aggregate of 609,756 shares of its common stock for net proceeds, after commissions and other costs, of $988,519. The warrants are exercisable at an exercise price of $2.13 for a term of five years. The Company incurred costs and expenses of $11,603.

During the six months ended June 30, 2016, the Company issued 60,190 shares of its common stock as consideration for investor relations services valued at $80,000.

During the six months ended June 30, 2016, the Company issued 21,506 shares of its common stock as consideration for legal services valued at $35,494.

During the six months ended June 30, 2016, the Company issued 15,000 shares of its common stock as consideration for consulting services valued at $39,600.

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 six months ended June 30, 2016 and 2015.

The following assumptions were used in determining the fair value of employee and vesting non-employee options during the six months ended June 30, 2016 and 2015:

 
June 30,
2016
  
June 30,
2015
  
Risk-free interest rate
    
1.38% - 1.73
%
    
1.68% - 2.07
%
Dividend yield
    
0
%
    
0
%
Stock price volatility
    
129.41%-134.81
%
    
123.45% -145.24
%
Expected life
5 – 9.8 years
  
5-10 years
  
Weighted average grant date fair value
  
$
0.97
    
$
5.98
  

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 vested 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.

On April 22, 2016, the Company awarded options to purchase 50,000 shares of common stock to a consultant.  These options vest quarterly beginning June 30, 2016 through March 31, 2018 and have a term of 10 years. The options have an exercise price of $2.08 per share.  The options had a grant date fair value of $34,061.

On May 23, 2016, the Company awarded options to purchase an aggregate of 100,000 shares of common stock to certain key employees.  These options vest immediately and have a term of 10 years. The options have an exercise price of $0.90 per share.  The options had an aggregate grant date fair value of $78,218.

The following table summarizes the stock option activity for the six months ended June 30, 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
    
383,495
    
$
1.29
      
10.0
      
Canceled/expired
                            
Outstanding at June 30, 2016
    
1,013,123
    
$
5.20
      
6.1
    
$
-
  
 
                                
Exercisable at June 30, 2016
    
883,629
    
$
5.30
      
5.7
    
$
-
  

The following table presents information related to stock options at June 30, 2016:

Options Outstanding
    
Options Exercisable
  
Exercise
Price
    
Number of
Options
    
Weighted Average
Remaining Life
In Years
    
Exercisable
Number of
Options
  
$
0.00-5.00
      
606,440
      
7.7
      
541,439
  
 
5.01-12.50
      
382,675
      
3.9
      
318,182
  
 
12.51-25.00
      
15,008
      
3.7
      
15,008
  
 
25.01-45.00
      
9,000
      
3.3
      
9,000
  
         
1,013,123
      
6.2
      
883,629
  

The stock-based compensation expense related to option grants was $141,715 and $470,663 during the three and six months ended June 30, 2016, respectively, and $112,744 and $168,897 during the three and six months ended June 30, 2015, respectively.

As of June 30, 2016, stock-based compensation related to options of $410,086 remains unamortized and is expected to be amortized over the weighted average remaining period of 0.99 years.

Restricted Stock

On April 26, 2016, the Company granted the Company’s Chief Executive Officer, Andrew Levi, 500,000 shares of the Company’s common stock under a Restricted Stock Award Agreement (the “Award Agreement”).  Under the Award Agreement, the awarded shares shall vest on the tenth anniversary of the date of grant, provided that the holder is employed by the Company or its subsidiaries.  All awarded shares not previously vested shall immediately become fully vested upon holder’s termination of service other than for cause (as defined under the Award Agreement).

The Company determined the fair value at the date of grant of $1,040,000 based on the quoted price of the Company’s common stock and is accreting ratably to operations over the vesting terms.

The stock-based compensation expense related to restricted stock awards was $17,333 during the three and six months ended June 30, 2016, and $-0- during the three and six months ended June 30, 2015.

As of June 30, 2016, stock-based compensation related to restricted stock awards of $1,022,667 remains unamortized and is expected to be amortized over the weighted average remaining period of 9.83 years.

Warrants

The following table summarizes information with respect to outstanding warrants to purchase common stock of the Company, all of which were exercisable, at June 30, 2016: 

Exercise
Price
    
Number
Outstanding
  
Expiration Date
$
1.25
    
$
117,648
  
March 2021
 
2.13
      
609,756
  
April 2021
 
4.75
      
482,500
  
Sept/Oct 2020
 
5.00
      
220,913
  
August 2016
         
1,430,817
  
 

The following table summarizes the warrant activity for the six months ended June 30, 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
    
727,404
    
$
1.99
      
5.0
      
Exercised
    
-
                      
Forfeitures or expirations
    
-
                      
Outstanding at June 30, 2016
    
1,430,817
    
$
3.38
      
3.9
    
$
-
  
 
                                
Exercisable at June 30, 2016
    
1,430,817
    
$
3.38
      
3.9
    
$
-
  

In March 2016, 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.

In May 2016, in connection with the sale of common stock, the Company issued 609,756 warrants to purchase the Company’s common stock at $2.13 per share expiring five years from the date of issuance.