Quarterly report pursuant to Section 13 or 15(d)

7. Stockholders' Equity (Tables)

7. Stockholders' Equity (Tables)

9 Months Ended

Sep. 30, 2016

	Number of options			Weighted average exercise price
Balance at December 31, 2015		1,600,674		$	7.73
Options granted during the period		20,798,500		$	3.95
Options exercised during the period		–		$	–
Options forfeited during the period		(200,000	)	$	1.00
Options expired during the period		–		$	–
Options outstanding at September 30, 2016		22,199,174		$	4.25
Options exercisable at September 30, 2016		16,199,174		$	5.58

Assumptions used

Expected term	9.89	years
Expected volatility	168%
Risk free interest rate	1.88%
Dividend yield	0%

Warrant activity

	Number of warrants			Weighted average exercise price
Balance at December 31, 2015		6,898,560		$	1.83
Cashless exercises		(92,348	)	$	0.23
Exchange of December 30, 2015 warrants		(6,451,613	)	$	1.94
Exchange Warrants issued		10,249,517		$	0.45
Warrants issued during the period		24,541,946		$	0.45
Balance at September 30, 2016		35,146,062		$	0.44

Antidilutive Securities

	September 30,		September 30,
	2016		2015
Stock options outstanding		22,199,174		23,830,000
Warrants outstanding		35,146,062		–
Convertible debt		1,760,000		5,378,151
Convertible preferred stock		21,358,222		257,143

Total		80,463,458		29,465,294

- Definition

Tabular disclosure of warrants or rights issued. Warrants and rights outstanding are derivative securities that give the holder the right to purchase securities (usually equity) from the issuer at a specific price within a certain time frame. Warrants are often included in a new debt issue to entice investors by a higher return potential. The main difference between warrants and call options is that warrants are issued and guaranteed by the company, whereas options are exchange instruments and are not issued by the company. Also, the lifetime of a warrant is often measured in years, while the lifetime of a typical option is measured in months. Disclose the title of issue of securities called for by warrants and rights outstanding, the aggregate amount of securities called for by warrants and rights outstanding, the date from which the warrants or rights are exercisable, and the price at which the warrant or right is exercisable.

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