Stockholders' Deficiency | Note 7 Stockholders’ Deficiency Authorized Capital On December 19, 2014, effective January 1, 2015, the Company’s shareholders approved the reincorporation of the Company from the State of Nevada to the State of Delaware and in connection therewith (i) approved an amendment to the Company’s Articles of Incorporation to increase the number of shares of common stock authorized to be issued by the Company from 100,000,000 to 200,000,000 5,000,000 Common Stock and Warrant Offerings During the six months ended June 30, 2015, the Company issued an aggregate of 180,167 5.00 6.00 1,051,000 56,290 8.00 188,883 Warrant and Option Valuation The Company has computed the fair value of warrants and options granted using the Black-Scholes option pricing model. Option forfeitures are estimated at the time of valuation and reduce expense ratably over the vesting period. This estimate will be adjusted periodically based on the extent to which actual option forfeitures differ, or are expected to differ, from the previous estimate, when it is material. The Company estimated forfeitures related to option grants at annual rates ranging from 0 5 Stock Warrants For The Six Months Ended June 30, 2015 2014 Risk free interest rate 1.22% - 1.71 % 0.39% - 2.20 % Expected term (years) 5.00 1.96 - 5.00 Expected volatility 121% - 122 % 120% - 129 % Expected dividends 0.00 % 0.00 % The weighted average estimated fair value of the warrants granted during the six months ended June 30, 2015 was $ 3.60 3.80 On May 29, 2015, the Company extended the expiration date of previously outstanding warrants to purchase an aggregate of 5,000 10,000 The Company recorded stockbased compensation expense of $ 0 167,126 Weighted Weighted Average Average Remaining Aggregate Number of Exercise Life Intrinsic Warrants Price In Years Value Outstanding, December 31, 2014 412,422 $ 17.97 Granted 316,428 13.82 Exercised - - Forfeited - - Outstanding, June 30, 2015 728,850 $ 16.17 3.8 $ 45,500 Exercisable, June 30, 2015 693,850 $ 15.47 3.9 $ 45,500 Warrants Outstanding Warrants Exercisable Weighted Outstanding Average Exercisable Exercise Number of Remaining Life Number of Price Warrants In Years Warrants $ 6.00 32,500 3.9 32,500 7.60 25,000 4.8 25,000 8.00 12,500 4.5 12,500 10.00 56,554 4.6 56,554 10.60 19,000 2.9 19,000 11.60 2,500 4.3 2,500 12.00 5,000 4.8 5,000 15.00 454,638 4.0 454,638 18.80 2,500 4.3 2,500 20.00 27,500 3.9 27,500 30.00 43,140 2.0 43,140 35.00 1,000 1.8 1,000 40.00 6,176 3.4 6,176 50.00 1,000 2.1 1,000 60.00 1,842 2.8 1,842 80.00 3,000 2.3 3,000 Variable [1] 35,000 - - 728,850 3.9 693,850 [1] Warrants to purchase 35,000 30.00 Stock Options For the Six Months Ended June 30, 2015 2014 Risk free interest rate 1.33% - 1.64 % 1.50% - 2.54 % Expected term (years) 5.00 - 6.00 5.00 - 10.00 Expected volatility 121% - 122 % 120% - 121 % Expected dividends 0.00 % 0.00 % The weighted average estimated fair value of the options granted during the six months ended June 30, 2015 was $ 7.64 4.80 See Note 6 Commitments and Contingencies Employment Agreements for details associated with the grant of stock options in connection with employment agreements. On January 23, 2015, the Company granted five-year options to consultants to purchase an aggregate of 5,000 9.40 3,750 625 625 39,200 Weighted Average Remaining For The Six Months Ended Unrecognized at Amortization June 30, June 30, Period 2015 2014 2015 (Years) Consulting $ 118,230 $ 251,575 $ 476,246 2.3 Research and development 233,152 153,714 643,481 [1] 2.2 General and administrative 133,144 104,979 764,074 2.2 $ 484,526 $ 510,268 $ 1,883,801 2.2 [1] Includes $ 266,096 Weighted Weighted Average Average Remaining Aggregate Number of Exercise Life Intrinsic Options Price In Years Value Outstanding, December 31, 2014 779,200 $ 12.18 Granted 45,000 8.82 Exercised - - Forfeited (35,000) 6.34 Outstanding, June 30, 2015 789,200 $ 12.25 8.0 $ 317,000 Exercisable, June 30, 2015 365,327 $ 17.49 7.2 $ 28,500 Options Outstanding Options Exercisable Weighted Outstanding Average Exercisable Exercise Number of Remaining Life Number of Price Options In Years Options $ 5.70 35,000 9.0 15,000 6.40 25,000 - - 6.60 281,250 4.2 3,750 6.80 12,500 - - 7.80 3,000 4.0 3,000 8.00 15,000 - - 9.20 25,000 - - 9.40 5,000 4.6 4,375 10.00 17,250 4.4 17,250 10.60 2,000 8.7 2,000 12.00 49,000 8.3 49,000 13.00 133,750 8.3 92,502 20.00 6,550 7.5 6,550 21.00 113,500 6.6 113,500 22.00 250 2.0 250 24.00 500 0.9 500 25.00 2,150 1.4 2,150 28.00 17,500 4.1 10,500 30.00 45,000 7.4 45,000 789,200 7.2 365,327 Compensatory Common Stock Issuances During the six months ended June 30, 2015, the Company issued an aggregate of 19,198 99,147 943 8,481 For The Six Months Ended Unrecognized at June 30, June 30, 2015 2014 2015 Consulting $ 90,300 $ 234,500 $ - Research and development 8,847 5,898 - $ 99,147 $ 240,398 $ - | Note 10 Stockholders’ Deficiency Authorized Capital As of December 31, 2014, the Company was authorized to issue 100,000,000 0.001 1,000,000 0.01 On December 19, 2014, effective January 1, 2015, the Company’s shareholders approved the reincorporation of the Company from the State of Nevada to the State of Delaware and in connection therewith (i) approved an amendment to the Company’s Articles of Incorporation to increase the number of shares of common stock authorized to be issued by the Company from 100,000,000 200,000,000 1,000,000 5,000,000 2010 Equity Participation Plan On February 18, 2014 and October 23, 2014, the Board of Directors of the Company approved successive increases in the number of shares of common stock authorized to be issued pursuant to the Plan from 300,000 600,000 1,000,000 1,000,000 Common Stock and Warrant Offerings During the year ended December 31, 2013, the Company issued an aggregate of 42,030 17.00 30.00 905,000 20,180 30.00 80.00 224,313 During the year ended December 31, 2014, the Company issued an aggregate of 433,600 5.00 9.00 2,605,000 116,535 6.00 15.00 389,608 See Note 7 Notes Payable for details associated with common stock issued in conjunction with the extension and exchange of notes payable and related accrued interest. See Note 9 Commitments and Contingencies Consulting Agreements for details associated with common stock issued in conjunction with consulting agreements. Warrant and Option Valuation The Company has computed the fair value of warrants and options granted using the Black-Scholes option pricing model. Option forfeitures are estimated at the time of valuation and reduce expense ratably over the vesting period. This estimate will be adjusted periodically based on the extent to which actual option forfeitures differ, or are expected to differ, from the previous estimate, when it is material. The Company estimated forfeitures related to option grants at an annual rate ranging from 0 5 Warrant Exercise and Reload Program On November 27, 2013, the Company initiated a limited time program (the “Warrant Exercise and Reload Program”) which, at the election of any warrant holder, would permit them to immediately exercise their outstanding exercisable warrants at an exercise price of $ 6.00 15.00 The terms of the newly issued warrant permit the Company to redeem the new warrant for a total of $1.00 if the common stock of the Company trades above $25.00 for five consecutive trading days. 18,834 84,302 113,000 505,809 50,035 214,912 Stock Warrants For The Year Ended December 31, 2014 2013 Risk free interest rate 0.39% - 2.20 % 0.34% - 1.68 % Expected term (years) 1.96 - 5.00 3.00 - 5.00 Expected volatility 116% - 122 % 132% - 135 % Expected dividends 0.00 % 0.00 % The weighted average estimated fair value of the warrants granted during the years ended December 31, 2014 and 2013 was approximately $ 3.40 7.20 See Note 7 Notes Payable for details associated with the issuance of warrants in connection with note issuances and the exchange of notes payable. See Note 9 Commitments and Contingencies Consulting Agreements for details associated with the issuance of warrants as compensation. See Note 10 Stockholders’ Deficiency Common Stock and Warrant Offerings for details associated with the issuance of warrants in connection with common stock and warrant offerings. The Company recorded stockbased compensation expense of $ 185,266 26,777 Weighted Weighted Average Average Remaining Aggregate Number of Exercise Life Intrinsic Warrants Price In Years Value Outstanding, December 31, 2012 166,740 $ 33.80 Granted 157,357 31.20 Exercised (84,305) 6.00 [1] Forfeited - - Outstanding, December 31, 2013 239,792 $ 24.16 Granted 192,463 13.92 Exercised (18,832) 6.00 [1] Forfeited (1,000) 10.00 Outstanding, December 31, 2014 412,423 $ 17.97 3.2 $ - Exercisable, December 31, 2014 377,422 $ 16.86 3.3 $ - [1] During the year ended December 31, 2013, warrants to purchase an aggregate of 84,305 30.00 80.00 6.00 18,832 30.00 80.00 6.00 Warrants Outstanding Warrants Exercisable Weighted Average Exercisable Exercise Number of Remaining Life Number of Price Warrants In Years Warrants $ 6.00 32,500 4.4 32,500 8.00 10,000 4.9 10,000 10.00 25,104 4.8 25,104 10.60 19,000 3.4 19,000 11.60 2,500 4.8 2,500 15.00 202,160 2.8 202,160 18.80 2,500 4.8 2,500 20.00 27,500 4.4 27,500 30.00 43,140 2.5 43,140 35.00 1,000 2.3 1,000 40.00 6,176 3.9 6,176 50.00 1,000 2.6 1,000 60.00 1,843 3.3 1,842 80.00 3,000 2.8 3,000 Variable [1] 35,000 - - 412,423 3.3 377,422 [1] Warrants to purchase 35,000 30.00 Stock Options For the Year Ended December 31, 2014 2013 Risk free interest rate 1.50% - 2.54 % 1.13% - 2.66 % Expected term (years) 5.00 - 10.00 5.00 - 10.00 Expected volatility 116% - 122 % 132% - 135 % Expected dividends 0.00 % 0.00 % The weighted average estimated fair value of the stock options granted during the years ended December 31, 2014 and 2013 was approximately $ 5.40 5.20 See Note 9 Commitments and Contingencies for details associated with certain grants of options as compensation to employees, directors and consultants. On October 4, 2013, the Company granted ten-year options to employees, directors, and an advisor to purchase an aggregate of 49,000 12.00 24,500 24,500 199,921 Between February 18, 2014 and March 12, 2014, the Company granted ten-year options to employees and directors to purchase an aggregate of 120,750 10.60 13.00 41,584 79,467 566,483 On June 16, 2014, the Company granted a five-year option to a consultant to purchase 3,000 7.80 18,600 On September 24, 2014, the Company granted a five-year option to a consultant to purchase 3,750 6.60 20,100 On October 23, 2014, the Company granted ten-year options to employees and directors to purchase an aggregate of 297,500 6.60 1,710,400 On October 27, 2014, the Company granted a ten-year option to an advisor to purchase 12,500 6.80 78,500 On November 17, 2014, the Company granted a ten-year option to an employee to purchase 5,000 6.60 31,600 Weighted Average For the Year Ended Unrecognized at Amortization December 31, December 31, Period 2014 2013 2014 (Years) Consulting $ 365,825 $ 160,894 $ 654,956 2.6 Research and development 328,740 251,758 712,551 [1] 2.5 General and administrative 179,628 235,163 961,378 2.6 $ 874,193 $ 647,815 $ 2,328,885 2.6 [1] Includes $ 448,189 As of December 31, 2014, there was $ 2,328,885 2.6 Weighted Weighted Average Average Remaining Aggregate Number of Exercise Life Intrinsic Options Price In Years Value Outstanding, December 31, 2012 200,900 $ 22.40 Granted 57,250 13.60 Exercised - - Forfeited (6,000) 10.00 Outstanding, December 31, 2013 252,150 $ 20.70 Granted 528,750 8.17 Exercised - - Forfeited (1,700) 26.18 Outstanding, December 31, 2014 779,200 $ 12.18 8.5 $ 979,600 Exercisable, December 31, 2014 318,573 $ 18.29 7.6 $ 45,600 Options Outstanding Options Exercisable Weighted Outstanding Average Exercisable Exercise Number of Remaining Life Number of Price Options In Years Options $ 5.70 45,000 9.5 10,000 6.40 25,000 - - 6.60 306,250 4.7 3,750 6.80 12,500 - - 7.80 3,000 4.5 3,000 10.00 17,250 4.9 16,625 10.60 2,000 9.2 2,000 12.00 49,000 8.8 49,000 13.00 133,750 9.1 56,248 20.00 6,550 8.0 6,550 21.00 113,500 7.1 113,500 22.00 250 2.4 250 24.00 500 1.4 500 25.00 2,150 1.9 2,150 28.00 17,500 4.5 10,000 30.00 45,000 7.9 45,000 779,200 7.6 318,573 Compensatory Common Stock Issuances See Note 9 Commitments and Contingencies for details associated with certain issuances of common stock as compensation to employees, directors and consultants. On October 4, 2013, the Company issued 2,500 12,500 Between June 27, 2014 and December 31, 2014, the Company issued 7,500 33,000 For the Year Ended Unrecognized at December 31, December 31, 2014 2013 2014 Consulting $ 276,500 $ 111,351 $ - Research and development 24,337 26,704 - $ 300,837 $ 138,055 $ - Weighted Average Total Number of Issuance Date Issuance Date Shares Fair Value Fair Value Non-vested, December 31, 2012 - $ - $ - Granted 11,977 11.53 138,055 Vested (11,977) (11.53) (138,055) Forfeited - - - Non-vested, December 31, 2013 - $ - $ - Granted 97,188 5.27 511,886 Vested (97,188) (5.27) (511,886) Forfeited - - - Non-vested, December 31, 2014 - $ - $ - |