8. STOCK BASED COMPENSATION

6 Months Ended

Jun. 30, 2013

Notes to Financial Statements

8. STOCK BASED COMPENSATION

In May 2013, Victory adopted the 2013 Stock Option Plan (the “Plan”) which is intended to advance the interest of the Company’s shareholders by enhancing the company’s ability to attract, retain, and motivate persons who make (or are expected to make) important contributions to the Company. The maximum aggregate number of shares of the Victory’s common stock that may be issued under the Plan is 10,000,000 shares.

On June 25, 2013, Victory granted an aggregate of 6,200,000 stock options to purchase Victory common stock to directors, officers and certain employees and consultants. The options are exercisable at $0.25 per share for a period of 5 years from the date of grant. Options to purchase 200,000 shares vested immediately, options to purchase the additional 6,000,000 shares vest 50% at the end of December 31, 2013 and 50% at the end of December 31, 2014. As of June 30, 2013, there was approximately $108,000 of total unrecognized compensation expense related to the options granted. These costs are expected to be recognized over a period of 1.5 years. The options were valued using the Black-Sholes option pricing model. In order to calculate the fair value of the options, certain assumptions are made regarding components of the model including the estimated fair value of underlying common stock, risk–free interest rate, volatility, expected dividend yield and expected option life. Changes to the assumptions could cause significant adjustment to the valuation. The options were valued on their grant date at $.018 per option based on the assumptions used. Total vested options included in compensation expense for the six months ended June 30, 2013 and 2012, were $3,600 and $0 respectively.

Stock option activity is as follows:

	Number of Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life
Outstanding, December 31, 2012		-		-		-
Granted June 25, 2013		6,200,000	$	0.25		5.0
Outstanding, June 30, 2013		6,200,000	$	0.25		5.0
Exercisable at June 30, 2013		200,000	$	0.25		5.0