Quarterly report pursuant to Section 13 or 15(d)

Stock-based compensation

Stock-based compensation

6 Months Ended

Jun. 30, 2014

Stock-Based Compensation

In 2006, the Company adopted the 2006 Stock Option and Incentive Plan (the “Plan”), under which the board of directors may grant incentive or non-qualified stock options and stock grants to key employees, directors, advisors and consultants of the Company. The Plan was most recently amended by the Board of Directors on January 24, 2014, and approved by written consent of majority of shareholders on June 30, 2014 to increase the reserved shares of common stock issuable under the Plan to 3,838,750 (the “Amended Plan”).

Stock options vest based upon the terms within the individual option grants, with an acceleration of the unvested portion of such options upon a change in control event, as defined in the Amended Plan. The options are not transferable except by will or domestic relations order. The option price per share under the Amended Plan cannot be less than the fair market value of the underlying shares on the date of the grant. The number of shares remaining available for future issuance under the Amended Plan as of June 30, 2014 was 1,968,558.

Stock option activity for the six months ended June 30, 2014 was as follows:



Common Stock Options	Number of Options		Exercise Price Per Share	Weighted Average Exercise Price		Weighted Average Remaining Life	Aggregate Intrinsic Value
Outstanding, December 31, 2013	1,148,000		$1.20-$4.50	$	2.13	5.80 years	$	2,721,100
Granted	93,325		4.50	4.50		—	—
Exercised	(5,000	)	1.20	1.20		—	—
Canceled and forfeited	(3,200	)	$1.20-$4.50	1.92		—	—
Expired	—		—	—		—	—
Outstanding, June 30, 2014	1,233,125		$1.20-$4.50	$	2.31	5.67 years	$	6,999,956
Exercisable, June 30, 2014	926,125			$	1.92		$	5,623,189
Vested and expected to vest, June 30, 2014	1,233,125			$	2.31		$	6,999,956

Restricted stock activity for the six months ended June 30, 2014 as follows:



	Number of Restricted Stock	Weighted Average Grant Date Fair Value
Unvested, December 31, 2013	361,570	$	1.31
Granted	—	—
Vested	—	—
Forfeited	—	—
Unvested, June 30, 2014	361,570	$	1.31

Stock Based Compensation - Ilios

In 2009, Ilios adopted the 2009 Stock Incentive Plan (the “2009 Plan”) under which the board of directors may grant incentive or non-qualified stock options and stock grants to key employees, directors, advisors and consultants of the company. The maximum number of shares allowable for issuance under the 2009 Plan is 2,000,000 shares of common stock. Stock options vest based upon the terms within the individual option grants, with an acceleration of the unvested portion of such options upon a change in control event, as defined in the Plan. The options are not transferable except by will or domestic relations order. The option price per share under the 2009 Plan cannot be less than the fair market value of the underlying shares on the date of the grant.

Stock option activity relating to Ilios for the six months ended June 30, 2014 was as follows:



Common Stock Options	Number of Options	Exercise Price Per Share	Weighted Average Exercise Price		Weighted Average Remaining Life	Aggregate Intrinsic Value
Outstanding, December 31, 2013	575,000	$0.10-$0.50	$	0.29	6.44 years	$	120,000
Granted	50,000	0.50	0.50
Exercised	—	—	—
Canceled and forfeited	—	—	—
Expired	—	—	—
Outstanding, June 30, 2014	625,000	$0.10-$0.50	$	0.31	6.25 years	$	120,000
Exercisable, June 30, 2014	181,250		$	0.50		$	—
Vested and expected to vest, June 30, 2014	625,000		$	0.31		$	120,000

Restricted stock activity for the Ilios awards, for the six months ended June 30, 2014 was as follows:



	Number of Restricted Stock	Weighted Average Grant Date Fair Value
Unvested, December 31, 2013	310,000	$	0.10
Granted	—	—
Vested	—	—
Forfeited	—	—
Unvested, June 30, 2014	310,000	$	0.10