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Stockholders' Equity
 6 Months Ended
Jun. 30, 2015
Stockholders' Equity [Abstract]  
Stockholders' Equity
6. Stockholders’ Equity

 

In May 2015 the Company purchased and retired 120,000 shares of outstanding Company common stock from an investor for $10,800.

 

In January 2014 the Company issued 100,000 shares of restricted common stock, valued at $28,000 to a consultant.

 

Service-Based Stock Options

 

Service-based options issued by the Company to various employees and consultants amounted to 10,335,000 at December 31, 2014 and June 30, 2015. All outstanding options are exercisable and have a cashless exercise provision, and certain options provide for accelerated vesting provisions and modifications, as defined, if the Company is sold or acquired. The options outstanding and exercisable at June 30, 2015 have no intrinsic value.

 

The following is a summary of outstanding service-based options at June 30, 2015:

 

  Exercise Price   Number of
Options		     Weighted 
Average 
Remaining
Contractual Life		  
               
  $0.10     1,000,000       3 years  
  $0.20 - $0.25     8,185,000       7 years  
  $0.40     1,150,000       7 years  
  Total     10,335,000          

 

Performance-Based Stock Options

 

In August 2014, the Company issued 300,000 options with an exercise price of $0.20 to a consultant. The options are contingent upon the completion of a clinical study as defined. Management has valued these options at $8,000 and is amortizing them over the implicit service period of one year. At June 30, 2015, $6,000 had been amortized and the balance of $2,000 remained to be amortized during the year ending December 31, 2015.

 

As of June 30, 2015 in addition to the 300,000 options above, the Company had granted performance-based options to purchase 9,375,000 shares of common stock at exercise prices ranging from $0.20 to $5.00. The options expire at various dates between 2021 and 2024 and are exercisable upon the Company achieving annual sales revenue ranging from $2,000,000 and $100,000,000. The fair value of these performance-based options aggregated $340,000 and will be expensed over the implicit service period commencing once management believes the performance criteria will be met. Accordingly, at June 30, 2015, the unearned compensation for performance based options is $340,000.

 

Stock based compensation expense amounted to $2,000 and $3,500 for the three months ended June 30, 2015 and 2014, respectively. Stock based compensation expense amounted to $4,000 and $3,500 for the six months ended June 30, 2015 and 2014, respectively. Such amounts are included in compensation and related expenses in the accompanying statement of operations.

 

Warrants

 

The following is a summary of outstanding and exercisable warrants:

 

      Number of Shares     Weighted Average Exercise Price   Year
of 
Expiration
                 
  Balance at December 31, 2014     3,772,720     0.29   2015 - 2016
  Expired     (2,022,720 )   0.40   2015
                   
  Balance at June 30, 2015     1,750,000     0.16   2015 - 2016