Stockholders' Equity (Tables)

12 Months Ended

Dec. 31, 2014

Year ended December 31, 2014

In February 2014, the Company issued 6,673,415 units as part of a private placement offering for proceeds of $1,167,067 ($0.20/share), net of direct offering costs of $167,616. Each unit consists of one share of common stock and one warrant The Company repaid a total of $130,000 of related party advances through the issuance of the units – see Note 10. Details of the warrants issued are shown in the table below:

Date		Quantity Granted			Vesting Schedule		Exercise Price			Expiration
February 2014			6,673,415		Fully vested upon issuance		$	0.50		3 Years

In May 2014, the Company issued 15,800,000 units as part of a private placement offering for proceeds of $2,796,462 ($0.20/share), net of direct offering costs of $363,538. Each unit consists of one share of common stock and one warrant. Details of the warrants issued are shown in the table below:

Date		Quantity Granted			Vesting Schedule		Exercise Price			Expiration
May 2014			15,800,000		Fully vested upon issuance		$	0.50		3 Years

In June 2014, as a continuation of the May 2014 offering, the Company issued 1,400,000 units as part of a private placement offering for proceeds of $250,326 ($0.20/share), net of direct offering costs of $29,674. Each unit consists of one share of common stock and one warrant. Details of the warrants issued are shown in the table below:

Date		Quantity Granted			Vesting Schedule		Exercise Price			Expiration
June 2014			1,400,000		Fully vested upon issuance		$	0.50		3 Years

Year ended December 31, 2013

In January 2013, the Company issued 1,000,000 shares of common stock as part of a private placement offering for $936,360 ($1.00/share), net of direct offering costs of $63,640. The offering included a finder's fee of 5% cash and 5% warrants on total gross proceeds. Details of the warrants issued are shown in the table below:

Date		Quantity Granted			Vesting Schedule		Exercise Price			Expiration
January 2013			50,000		Fully vested upon issuance		$	1.00			2 Years

In March 2013, as a continuation of the January 2013 offering, the Company issued 450,000 shares of common stock for gross proceeds of $441,495 ($1.00/share), net of direct offering costs of $8,505. The offering included a finder's fee of 5% cash and 5% warrants on $50,000 of the gross proceeds. Details of the warrants issued are shown in the table below:

Date		Quantity Granted			Vesting Schedule		Exercise Price			Expiration
March 2013			1,250		Fully vested upon issuance		$	1.00			2 Years

In June 2013, the Company issued a total of 3,645,000 shares of common stock as part of a private placement offering for $1,775,783 ($0.50/share), net of direct offering costs of $46,717. Only the holders of these warrants have the right to exercise the warrants at the specified fixed strike price. In conjunction with this offering, one warrant for each share issued was granted. Details of the warrants issued are shown in the table below:

Date		Quantity Granted			Vesting Schedule		Exercise Price			Expiration
June 2013			3,645,000		Fully vested upon issuance		$	0.50			2 Years

In November 2013, the Company issued a total of 2,207,271 shares of common stock as part of a private placement offering for $439,151 ($0.20/share), net of direct offering costs of $2,303. In conjunction with this offering, one warrant for each share issued was granted. Only the holders of these warrants have the right to exercise the warrants at the specified fixed strike price. Details of the warrants issued are shown in the table below:

Date		Quantity Granted			Vesting Schedule		Exercise Price			Expiration
November 2013			2,207,271		Fully vested upon issuance		$	0.20			3 Years

Summary of Option Fair-Value Assumptions

The Black-Scholes assumptions used for the years ended December 31, 2014 and 2013 are as follows:

	2014			2013
Expected dividends		0	%		0	%
Expected volatility		111	%		100	%
Risk free interest rate		2.04% - 2.23%			0.98% - 2.03%
Expected term of option	6 years			4 – 10 years
Expected forfeitures		35	%		10 - 35%

Schedule of Stock Option Activity

The following is a summary of the Company's stock option activity:

Year Ended December 31, 2014

	Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life
Balance - December 31, 2013		3,300,710		$	1.55	7.52 Years
Granted		6,350,000			0.30
Forfeited/Cancelled		(1,976,375	)		0.57
Outstanding – December 31, 2014		7,674,335		$	0.77	6.36 Years
Exercisable – December 31, 2014		2,674,335		$	1.57	6.22 Years

Year Ended December 31, 2013

	Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life
Balance – December 31, 2012		2,305,585		$	2.44		8.34 years
Granted		2,280,000			0.74
Forfeited/Cancelled		(1,284,875	)		1.10
Outstanding - December 31, 2013		3,300,710		$	1.78		8.48 years
Exercisable - December 31, 2013		2,580,710		$	1.64		7.43 years

Summary of Warrant Activity

The following is a summary of the Company's warrant activity:

Year ended December 31, 2014

	Warrants			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life
Outstanding - December 31, 2013		6,858,084		$	1.08	2.45 years
Granted		23,873,415			0.50	-
Expired		(547,063	)		3.60	-
Outstanding – December 31, 2014		30,184,436		$	0.50	2.18 years

Year ended December 31, 2013

	Warrants		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life
Outstanding - December 31, 2012	3,462,138		$	3.14	0.90 years
Granted	6,103,521			1.02	-
Forfeited/Cancelled	(2,707,575	)		3.60	-
Outstanding - December 31, 2013	6,858,084		$	1.08	2.45 years

Summary of Warrant Fair-Value Assumptions

	2013
Exercise price	$	1.20
Expected dividends		0	%
Expected volatility		100	%
Risk free interest rate		0.89	%
Expected term of option	2 – 10 years
Expected forfeitures		0	%

- 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.

+ References+ Details

RYU APPAREL INC. 10-K