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Note 7 - Stockholders' Equity (Deficit) | 12 Months Ended
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Dec. 31, 2016
Notes to Financial Statements |
Stockholders' Equity Note Disclosure [Text Block] | NOTE 7 - STOCKHOLDERS’ EQUITY (DEFICIT) Stock-Based Compensation In connection with the Merger, all of the issued and outstanding options to purchase shares of Prior Protagenic common stock converted, on a 1 -for- 1 basis, into options (the “ New Options ”), to purchase shares of our Series B Preferred Stock. The New Options will be administered under Prior Protagenic’s 2006 Employee, Director and Consultant Stock Plan (the “ 2006 Plan ”), which the Company assumed and adopted. The Plan is authorized to issue up to 2,000,000 stock options. In accordance with the Plan, the Company can grant to certain employees, directors or consultants options to purchase shares of the Company’s common stock which vest automatically or ranging from a one -year period to a five -year period. The shares are exercisable over a period of ten years from the date of grant. The Plan provides that qualified options be granted at an exercise price equal to the fair market value at the date of grant. There were 2,484,445 options outstanding as of December 31, 2016. The fair value of each stock option granted was estimated using the Black-Scholes assumptions and or factors as follows:
Exercise price |  |  | $.26 | - | $1.25 |
Expected dividend yield |  |  | 0% |  |  |
Risk free interest rate |  |  | 1.01% | - | 2.43% |
Expected life in years |  |  | 5 |  |  |
Expected volatility |  |  | 85% | - | 213% |
The following is an analysis of the stock option grant activity under the Plan:
|  | Number |  |  | Weighted Average Exercise Price |  |  | Weighted Average Remaining Contractual Life |
Stock Options |  |  |  |  |  |  |  |  |  |  |  |
Outstanding January 1, 2016 |  |  | 1,707,744 |  |  | $ | 0.84 |  |  |  | 6.45 |
Granted |  |  | 1,193,300 |  |  | $ | 1.25 |  |  |  | 10.35 |
Expired |  |  | (506,599 | ) |  | $ | 0.26 |  |  |  |  |
Converted |  |  | (25,000 | ) |  | $ | 0.26 |  |  |  |  |
Outstanding December 31, 2016 |  |  | 2,369,445 |  |  | $ | 1.18 |  |  |  | 9.82 |
As of December 31, 2016 the Company had 2,484,445 shares issuable under options outstanding at a weighted average exercise price of $1.04 and an intrinsic value of $ $697,820. On February 12, 2016, the Company issued 100,000 options under the 2006 Plan to its Chief Financial Officer as a sign-on bonus. These options have an exercise price of $1.25 per share, a ten -year term and vest over a three -year period in 35 monthly installments of 0.18 shares and a final installment of 2,778 shares. The terms of the option grant also include full vesting acceleration upon a change of control as defines. The Company recognized compensation expense related to this issuance of $25,696 for the year ended December 31, 2016. On April 15, 2016, our Compensation Committee of our Board determined that each board member will be compensated an option grant of 40,000 options per year, plus 5,000 options for serving as the Chair of a committee. Options shall have 10 -year expiration dates, 24 -month vesting cycles, and a strike price of $1.25 per share, or more in future time periods to match the fair market value of the Company’s common stock. The aggregate amount granted was 175,000 options. On April 15, 2016, the Board granted 1,009,300 options to employees and consultants. These options shall have 10 -year expiration dates, 12 to 48 month vesting cycles, and a strike price of $1.25 per share. Having an aggregate fair market value of $1,261,625 on December 31, 2016. During the year, 17,785 options were granted to former Atrinsic executives. These options have 3 -year expiration dates, and a strike price of $1.25 per share. Having an aggregate fair market value of $22,231 on December 31, 2016. The total number of options granted and vested during the year ended December 31, 2016 and 2015 was 1,308,300 and 1,272,982, respectively. The exercise price for these options was $1.25 per share. The Company recognized compensation expense related to options issued of $546,134 and $477,868 during the years ended December 31, 2016 and 2015, respectively, which is included in general and administrative expenses. On June 17, 2016, the stockholders of the Company approved the adoption of the 2016 equity compensation plan at the Special Meeting. No further options will be granted under the 2006 equity compensation plan, which we assumed in connection with the Merger. On July 31, 2016 25,000 options were exercised into common stock of the Company for $6,500. On October 26, 2016, the Board granted 25,000 options to an employee. These options shall have 10 -year expiration dates, a 48 month vesting cycle with a one -year cliff, and a strike price of $1.25 per share. Warrants: In connection with the Merger, all of the issued and outstanding warrants to purchase shares of Prior Protagenic common stock, converted, on a 1 for 1 basis, into new warrants (the “ New Warrants ”) to purchase shares of our Series B Preferred Stock. Simultaneous with the Merger and the Private Offering, New Warrants to purchase 3,403,367 shares of Series B Preferred Stock at an average exercise price of approximately $1.05 per share were issued to holders of Prior Protagenic warrants; additionally, holders of $665,000 of our debt and $35,000 of accrued interest exchanged such debt for five -year warrants to purchase 295,945 shares of Series B Preferred Stock at $1.25 per share. Placement Agent Warrants to purchase 127,346 shares of Series B Preferred Stock at an exercise price of $1.25 per share were issued in connection with the Private offering. These warrants to purchase 423,291 shares of Series B Preferred Stock have been recorded as derivative liabilities. See Note 6. A summary of warrant issuances are as follows:
|  | Number |  |  | Weighted Average Exercise Price |  |  | Weighted Average Remaining Life |
Warrants |  |  |  |  |  |  |  |  |  |  |  |
Outstanding January 1, 2016 |  |  | 3,403,367 |  |  | $ | 1.03 |  |  |  | 5.80 |
Granted |  |  | 423,291 |  |  | $ | 1.25 |  |  |  | 4.12 |
Outstanding December 31, 2016 |  |  | 3,826,658 |  |  | $ | 1.05 |  |  |  | 5.61 |
As of December 31, 2016 the Company had 3,826,658 shares issuable under warrants outstanding at a weighted average exercise price of $1.07 and an intrinsic value of $763,342.

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- Definition The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -Section S99 -Paragraph 4 -Subparagraph (SAB Topic 4.E) -URI http://asc.fasb.org/extlink&oid=27010918&loc=d3e74567-122707 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21484-112644 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02(29)) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21488-112644 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(e)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02(31)) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section S99 -Paragraph 4 -Subparagraph (SAB Topic 4.C) -URI http://asc.fasb.org/extlink&oid=27012166&loc=d3e187143-122770 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02(30)) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 6 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21506-112644 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(d)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.3-04) -URI http://asc.fasb.org/extlink&oid=27012166&loc=d3e187085-122770 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6405834&loc=d3e23285-112656 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Glossary Preferred Stock -URI http://asc.fasb.org/extlink&oid=6521494 Reference 15: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21463-112644 Reference 16: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 11 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21564-112644 + Details
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