Quarterly report pursuant to Section 13 or 15(d)

Note 5 - Stockholders' Deficit

v3.8.0.1
Note 5 - Stockholders' Deficit
 3 Months Ended
Sep. 30, 2017
Notes to Financial Statements  
Stockholders' Equity Note Disclosure [Text Block]
NOTE
5
- STOCKHOLDERS’ DEFICIT
 
Advisory Agreement
 
Catalyst Global LLC.
Effective
April 1, 2017,
we entered into a renewal contract (the
“2017
Renewal”) with Catalyst Global LLC to provide investor relations services for
12
months in exchange for monthly fees of
$3,500
per month and
23,333
shares of restricted common stock per quarter. The initial tranche of
23,333
shares was valued at
$0.45
per share or
$10,500
when issued on
June 7, 2017,
the
second
tranche of
23,333
shares was valued at
$0.50
per share or
$11,667
when issued on
September 25, 2017.
The
2017
Renewal is cancelable upon
60
days written notice.  
 
  
Warrant Activity
 
Warrant detail is reflected below:
 
   
Number
    
Weighted Average
Exercise Price Per
Share
    
Remaining Contract
Term (# years)
  
Shares purchasable under outstanding warrants at June 30, 2017
    
2,342,590
     $
1.97
    
 0.12
-
1.55
  
Stock purchase warrants expired
    
(98,482
)
   $
2.28
    
 
-
 
  
Shares purchasable under outstanding warrants at
September 30, 2017
    
2,244,108
     $
1.95
    
 
1.33
 
  
 
Stock-based Compensation
 
 
On
November 26, 2014,
our board of directors approved our
2014
Equity Incentive Plan (the
“2014
Plan”), which was approved by our shareholders on
February 17, 2015.
The
2014
Plan offers selected employees, directors, and consultants the opportunity to acquire our common stock, and serves to encourage such persons to remain employed by us and to attract new employees. The
2014
Plan allows for the award of stock and options, up to
10,000,000
shares of our common stock.
 
Activity in stock options during the
three
months ended
September 30,
2017
and related balances outstanding as of that date are reflected below:
 
   
Number of
Shares
    
Weighted
Average
Exercise Price
    
Weighted
Average
Remaining
Contract
Term (# years)
  
Outstanding at June 30,
2017
    
716,277
     $
1.01
      
 
  
Granted
    
-
      
 
      
 
  
Exercised
    
-
      
 
      
 
  
Forfeited and cancelled
    
-
      
 
      
 
  
Outstanding at September 30,
2017
    
716,277
     $
1.01
      
6.83
  
Exercisable at September 30,
2017
    
612,623
     $
1.09
      
6.60
  
 
Activity in stock options during the
three
months ended
September 30,
2016
and related balances outstanding as of that date are reflected below:
 
   
Number of
Shares
    
Weighted
Average
Exercise Price
    
Weighted
Average
Remaining
Contract
Term (# years)
  
Outstanding at June 30,
2016
    
900,402
     $
1.10
      
 
  
Granted
    
-
      
 
      
 
  
Exercised
    
-
      
 
      
 
  
Forfeited and cancelled
    
(80,132
)
    
2.55
      
 
  
Outstanding at September 30,
2016
    
820,270
     $
1.00
      
6.20
  
Exercisable at September 30,
2016
    
602,345
     $
1.15
      
6.02
  
 
Stock-based compensation expense recognized in our
condensed consolidated statements of operations for the
three
months ended
September 30, 2017
and
2016,
includes compensation expense for stock-based options and awards granted based on the grant date fair value. For options and awards granted, expenses are amortized under the straight-line method over the expected vesting period. Stock-based compensation expense recognized in the condensed consolidated statements of operations has been reduced for estimated forfeitures of options that are subject to vesting. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.
 
Our average stock price during the
three
months ended
September 30,
201
7
was
$0.48
and as a result the intrinsic value of the exercisable options at
September 30, 2017
was
$5,000.
 
We allocated stock-based compensation expense included in the condensed consolidated statements of operations for employee option grants and non-employee option grants as follows:
 
Three months ended September 30,
  
201
7
    
201
6
  
Research and development
   $
8,000
     $
7,000
  
General and administrative
    
3,000
      
3,000
  
Total stock-based compensation expense
   $
11,000
     $
10,000
  
 
The Company uses the Black-Scholes valuation model to calculate the fair value of stock options. The fair value of stock options was measured at the grant date using the assumptions (annualized percentages) in the table below:
 
Three months ended September 30,
 
201
7
  
201
6
Expected volatility
    
100
 %    
100
 %
Risk free interest rate
    
1.31
 %    
1.31
 %
Forfeiture rate
    
23.0
 %    
23.0
 %
Dividend yield
    
0
 %    
0
 %
Expected term (years)
    
3
      
3
  
 
The remaining amount of unrecognized stock-based compensation expense at
September 30,
201
7
relating to outstanding stock options is approximately
$30,000
which is expected to be recognized over the weighted average period of
1.22
years.