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Note 8 - Stock-based Compensation
 3 Months Ended
Mar. 31, 2016
Notes to Financial Statements  
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]
8.            
Stock-Based Compensation
 
Stock-based Compensation
 
 
Through December 2015, Diffusion LLC issued various non-qualified stock options to employees, directors and consultants. Options granted generally vested monthly over three years and expired ten years from the date of grant. During the three months ended March 31, 2015, Diffusion LLC granted 1,753,275 stock options with a weighted average exercise price of $0.41 per share and a weighted average fair value of $0.19 per stock option. This 2015 information is presented on an as converted basis.
 
In addition, during the year ended December 31, 2015, Diffusion LLC granted 184,093 restricted stock awards to a member of the board of directors. The weighted-average grant date fair value of these awards was $0.20 per share. The awards vest monthly over 36 months. This 2015 information is presented on an as converted basis.
 
Upon consummation of the reverse merger with RestorGenex on January 8, 2016, all outstanding options to purchase Diffusion LLC units were converted into stock options to purchase the Company’s common stock on terms substantially identical to those in effect prior to the reverse merger, except for adjustments to the underlying number of shares and the exercise price based on the Exchange Ratio. As a result of the Merger, the Company assumed 3,011,498 RestorGenex stock options that are exercisable for shares of the Company’s common stock at a weighted average exercise price of $4.02 per share.
 
 
The Company recorded stock-based compensation expense in the following expense categories of its unaudited condensed consolidated statements of operations for the three months ended March 31, 2016 and 2015:
 
   
Three months ended March 31,
  
   
2016
    
2015
  
Research and development
   $ 242,277     $ 39,956  
General and administrative
     151,194       55,900  
    $ 393,471     $ 95,856  
 
The following table summarizes the activity related to all stock option grants to employees and non-employees for the three months ended March 31, 2016:
 
   
Number of
Options
    
Weighted
average
exercise
 
price
per share
    
Weighted
average
remaining
contractual life
(in years)
  
Balance at January 1, 2016
     14,955,753     $ 0.39          
Assumed in connection with Merger
     3,011,498       4.02          
Cancelled
     (3,652 )     1.36          
Outstanding at March 31, 2016
     17,963,599     $ 1.00       7.8  
Exercisable at March 31, 2016
     12,306,562     $ 1.23       7.1  
Vested and expected to vest at March 31, 2016
     17,929,054     $ 1.00       7.8  
 
 
At March 31, 2016, there was $2,104,971 of unrecognized compensation cost related to non-vested options of which $1,167,453 is attributable to 1,172,907 options issued to non-employees and subject to re-measurement until vested. The total unrecognized compensation expense of $2,104,971 will be recognized as expense over a weighted-average period of 1.8 years. Other than 6,650 stock options, all other stock options outstanding have been issued outside of the 2015 Equity Plan.
 
Restricted Stock Awards
 
As of March 31, 2016 and December 31, 2015, there were 138,070 and 153,412, respectively, unvested shares of restricted stock. During the three months ended March 31, 2016, 15,342 shares vested and the Company recognized stock-based compensation expense of $3,024.
At March 31, 2016, there was $26,536 of unrecognized compensation cost related to unvested restricted stock that will be recognized as expense over a weighted average period of 2.2 years.
 
2015 Equity Plan
 
 
The 2015 Equity Plan allows for the issuance of up to a maximum of 2,500,000 shares of common stock in connection with the grant of stock-based awards, including stock options, restricted stock, restricted stock units, stock appreciation rights and other types of awards as deemed appropriate. Of the 17,963,599 options outstanding at March 31, 2016, 6,650 options were issued under the 2015 Equity Plan and 2,493,350 shares of common stock remained available for future issuance.