Stock Option Plans, Shares Reserved and Warrants

3 Months Ended

Mar. 31, 2015

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock Option Plans, Shares Reserved and Warrants

Note 7: Stock Option Plans, Shares Reserved and Warrants

On January 1, 2015, the number of shares reserved for issuance pursuant to stock awards under the 2009 Equity Incentive Plan increased by 532,597 shares, to an aggregate of 3,395,217 shares.  The increase represented 5% of the number of shares of common stock that were outstanding on December 31, 2014, and occurred pursuant to the provisions of the plan, previously approved by the stockholders, regarding an automatic annual increase in the number of shares reserved for issuance pursuant to stock awards under the plan.

On January 23, 2015, the Company issued options to purchase 613,163 shares of common stock to the officers and employees of the Company under the 2009 Equity Incentive Plan with an exercise price of $5.99 per share. The options will vest over a period of three years. These options were valued using the Black-Scholes option pricing model, the expected volatility was approximately 99%, the term was six years, the dividend rate was 0.0 % and the risk-free interest rate was approximately 1.62%, which resulted in a calculated fair value of $2,881,866.

From March 2, 2015 to March 23, 2015, the Company granted options to purchase 180,000 shares of common stock to the new hires of the Company under the 2009 Equity Incentive Plan with exercise prices ranging from $6.04 to $6.53 per share. These options will vest over a period of three years and were valued using a Black Scholes model; the expected volatility was approximately 98%, the term was six years, the dividend rate was 0.0% and the risk-free interest rate was approximately 1.9%. The calculated fair value of the options was $867,350.

The following summarizes the stock option activity for the quarter ended March 31, 2015 below:

	2009		Weighted		Weighted
	Equity		Average		Average
	Incentive		Exercise		Remaining
	Plan		Price		Contract Life
Balance as of December 31, 2014		1,239,722	$	5.46	8.42 years
Options Granted		793,163		6.03	9.86 years
Options Exercised		—		—		—
Options Canceled		—		—		—
Balance as of March 31, 2015		2,032,885	$	5.69	8.83 years
Exercisable at March 31, 2015		662,784	$	5.55	7.29 years

The aggregate intrinsic value (the difference between the Company’s closing stock price on the last trading day of the period and the exercise price, multiplied by the number of in-the-money options) of the 2,032,885 and 1,239,722 stock options outstanding at March 31, 2015 and December 31, 2014 was approximately $74,000 and approximately $1.4 million, respectively. The aggregate intrinsic value of 662,784 and 558,117 stock options exercisable at March 31, 2015 and December 31, 2014 was approximately $74,000 and $683,000, respectively.

The following summarizes warrants outstanding at March 31, 2015:  

	Warrant		Exercise Price		Date	Expiration
	Shares		Per Share		Issued	Date
Old Adamis Warrants		58,824	$	8.50	November 15, 2007	November 15, 2015
2013 Private Placement		597,222	$3.40 - $12.16		June 16, 2013	June 25, 2018
Consultant Warrants		17,647	$	3.74	July 11, 2011	July 11, 2016
Underwriter Warrants		186,000	$	7.44	December 12, 2013	December 12, 2018
Underwriter Warrants		27,900	$	7.44	January 16, 2014	January 16, 2019
Preferred Stock Sale Warrants		1,418,439	$	3.40	August 19, 2014	August 19, 2019
Total Warrants		2,306,032

At March 31, 2015, the Company has reserved shares of common stock for issuance upon exercise of outstanding options and warrants, and options and other awards that may be granted in the future under the 2009 Equity Incentive Plan, as follows:

Warrants	2,306,032
2009 Equity Incentive Plan	3,395,217
Total Shares Reserved	5,701,249