Quarterly report pursuant to sections 13 or 15(d)


3 Months Ended
Mar. 31, 2014
Equity [Abstract]  

The fair value of employee options granted was determined on the date of grant using the Black-Scholes option valuation model. The Black-Scholes model was developed for use in estimating the fair value of publicly traded options, which have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility. The Company's employee stock options have characteristics significantly different from those of traded options, and changes in the subjective input assumptions can materially affect the fair value estimate. Because there has been minimal data for the Company's stock and very little historical experience with the Company's stock options, similar public companies were used for comparison and expectations as to assumptions required for fair value computation using the Black-Scholes methodology.


Guidance for stock-based compensation requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company currently estimates there will be no material forfeitures of options.


The weighted average remaining contractual life of stock options outstanding and expected to vest at March 31, 2014 is 7.6 years.  The weighted average remaining contractual life of stock options exercisable at March 31, 2014 is 6.9 years.


A summary of the Company’s option activity under the Plan and related information is as follows:

    Three Months Ended  
    March 31, 2014  
    Shares     Price  
Outstanding at beginning of period     826,995     $ 6.90  
Forfeited     -     $ -  
Granted     -     $ -  
Outstanding at end of period and expected to vest     826,995     $ 6.90  
Options exercisable     437,183     $ 6.36  


Stock-based compensation expense for the three months ended March 31, 2014 and 2013 is as follows:


    Three Months Ended  
    March 31,  
    2014     2013  
Research and development   $ 69,559     $ 53,107  
General and administrative     164,641       165,437  
Total stock based compensation expense   $ 234,200     $ 218,544  


As of March 31, 2014, the total compensation expense related to unvested options not yet recognized totaled $2,049,114. The weighted-average vesting period over which the total compensation expense will be recorded related to unvested options not yet recognized at March 31, 2014 was approximately 2.3 years.