Note 6 - Stockholders’ Equity

Stock Options

The Company has one incentive stock plan, the Amended and Restated 2011 Equity Incentive Plan (the “2011 Plan”), and has granted stock options to employees, non-employee directors and consultants from the 2011 Plan. Options granted under the 2011 Plan may be Incentive Stock Options or Non-statutory Stock Options, as determined by the Administrator at the time of grant. In January 2016 the Company issued a warrant to purchase 125,000 shares of the Company’s common stock to an investor relations firm as partial compensation for consulting services it will provide to us over a two year period. Pursuant to applicable policies of the TSX-V, the shares issuable under the warrant will be counted against the limit of shares authorized for issuance under the 2011 Plan, notwithstanding that the warrant was not issued under the 2011 Plan. After giving effect to this limitation there are 1,665,572 shares remaining available for issuance under the 2011 Plan at March 31, 2016.

During the three months ended March 31, 2016, the Company granted stock options to employees to purchase 1,696,000 shares of the Company’s common stock. The stock options had exercise prices that ranged from $1.10 to $1.55 per share, are subject to vesting over four years, have terms of ten years and have an aggregate grant date fair value of approximately $1,418,000.

The Company recorded $123,646 and $145,514 of stock based compensation in the three months ended March 31, 2016 and 2015, respectively.

The following table represents stock option activity for the three months ended March 31, 2016:

The table above includes (i) 724,498 options granted to agents that took part in the IPO in the outstanding and exercisable balances and (ii) 6,650 options exercised by agents that took part in the IPO in exercised balance. All other balances are for employees and consultants.

Agent’s Compensation Options

In connection with the closing of its Initial Public Offering (“IPO”) in January 2015 the Company issued 786,696 compensation options (“Compensation Options”) to the agents that took part in the offering. Each Compensation Option is exercisable for a unit consisting of one share of common stock and one-half of one common stock purchase warrant at an exercise price of $1.00 per unit. The Compensation Options expire on July 6, 2016. Each whole warrant issuable upon exercise of Compensation Options is exercisable to acquire one share of common stock at an exercise price of $2.00 per share at any time up to January 6, 2017, subject to the Company’s right to accelerate the expiration time of the warrants if at any time the volume-weighted average trading price of its common stock is equal to or exceeds $3.00 per share for twenty (20) consecutive trading days. Because the Compensation Options are considered a cost of the IPO, the resulting value is recognized as both an increase and decrease to the equity section of the accompanying condensed balance sheets.

During the three months ended March 31, 2016, two agents that took part in the Company’s IPO exercised a total of 6,650 Compensation Options for cash proceeds of $6,650. As of March 31, 2016, 724,498 Compensation Options were outstanding.

The following table summarizes information on stock options outstanding and exercisable as of March 31, 2016:

Warrants

In January 2016 we issued a warrant to purchase 125,000 shares of the Company’s common stock to an investor relations firm as partial compensation for consulting services it will provide to us over a two year period.  The warrant is exercisable at $1.15 per share, has a term of three years and is subject to vesting over the two year service period.

During the three months ended March 31, 2016, the Company issued 3,325 common stock purchase warrants to agents that exercised their Compensation Options. The warrants are exercisable through January 6, 2017 at a price of $2.00 per share. The warrants are subject to the Company’s right to accelerate the expiration time of the warrants if at any time the volume-weighted average trading price of its common stock is equal to, or exceeds, $3.00 per share for twenty (20) consecutive trading days.

As of March 31, 2016, the Company has 8,064,716 warrants outstanding and exercisable to purchase common stock. Such warrants have a weighted average exercise price of $1.79, a weighted average remaining contractual life of 1.6 years and an aggregate intrinsic value of $1,237,954.