Stockholders' Equity

12 Months Ended

Dec. 31, 2014

Equity [Abstract]

Stockholders' Equity

NOTE 9. STOCKHOLDERS’ EQUITY

PREFERRED STOCK

The Company is authorized, without further action by the shareholders, to issue up to 10,000,000 shares of one or more series of preferred stock, at a par value of $0.0001, all of which is nonvoting. The Board of Directors may, without shareholder approval, determine the dividend rates, redemption prices, preferences on liquidation or dissolution, conversion rights, voting rights and any other preferences.

No shares of preferred stock were issued or outstanding during the years ended December 31, 2014 and 2013.

COMMON STOCK

The Company is authorized to issue 100,000,000 shares of common stock, par value $0.0001 per share.

On April 29, 2008, we held our annual meeting of stockholders at which meeting the majority of stockholders approved, an up to 3 for 1 reverse split of our shares of common stock. No such reverse split has been effected as yet.

RECENT ISSUANCES OF COMMON STOCK

There were 9,000,000 shares of common stock issued on May 9, 2014 to CannaRx in exchange for $296,000.

There were 5,990,000 shares of common stock issued during the year ended December 31, 2014 in exchange for $2,995,000 in gross proceeds to the Company. These shares were placed through a private placement memorandum offering to accredited investors only.

WARRANTS

No warrants were issued or outstanding during years ended December 31, 2014 or 2013.

STOCK OPTIONS

No stock options were issued or outstanding during the year ended December 31, 2013.

During 2014, the following stock options were issued to employees in 2014 which were not issued pursuant to a formal equity compensation plan:

	December 31, 2014							December 31, 2013
	Shares			Option Price		Weighted Average Price		Shares		Option Price		Weighted Average Price
Outstanding Options at Beginning of Year		—							—
Options Granted		4,800,000		$	3.78	$	3.78		—	$	—	$	—
Options Forfeited		(1,200,000	)	$	3.78	$	3.78		—	$	—	$	—
Options Outstanding at End of Year		3,600,000		$	3.78	$	3.78		—	$	—	$	—
Options Exercisable at End of Year		—							—

Effective November 1, 2014, the Company issued options to purchase 4,800,000 shares at an exercise price of $3.78 per share. The exercise price was determined based on the closing stock price quoted on the day prior to the issuance. The options vest over a three year period from the date of issuance, one-third at each anniversary date.

As a result of the 2014 stock option activity, the Company has recorded an aggregate stock-based compensation charge of $579,565 for the year ended December 31, 2014, of which $265,634 relates to research and development employees and $313,931 relates to general and administrative employees. As of December 31, 2014, there are stock-based compensation charges remaining to be amortized of $9,852,599, which will be amortized to expense over the remaining vesting period through October 2018 corresponding to the 3 year vesting period on such options.