Equity Incentive Plan

9 Months Ended

Sep. 30, 2015

Note 10. Equity Incentive Plan.

On March 5, 2015, the Company's Board of Directors adopted and the Company's stockholders approved, the Company's 2015 Equity Incentive Plan (the “2015 Plan”). A reserve of 10,000,000 shares of Company common stock has been established for issuance under the 2015 Plan. No more than an aggregate of 3,333,333 shares of common stock may be awarded during the twelve months following the 2015 Plan adoption. Awards under the 2015 Plan may include, but need not be limited to, one or more of the following: options, stock appreciation rights, restricted stock, performance grants, stock bonuses, and any other type of award deemed by the administrator to be consistent with the purposes of the 2015 Plan. The exercise price of all options awarded under the 2015 Plan must be no less than 100% of the fair market value of the Company common stock on the date of the grant and have a term of no greater than ten years from the date of grant. As of September 30, 2015, there were 9,850,000 shares available for grant under the 2015 Plan.

Stock Options

As of September 30, 2015, there was $475,343 of total unrecognized compensation related to non-vested stock options. The cost is expected to be recognized over the remaining period of the options which are expected to vest through 2016.

During the nine months ended September 30, 2015 and 2014, $292,355 and $0, respectively, has been recognized as stock based compensation in general and administrative expense.

The Company uses the Black-Scholes option pricing model to determine the fair value of stock options granted. In accordance with ASC 718 for employees, the compensation expense is amortized on a straight-line basis over the requisite service period, which approximates the vesting period.

The expected volatility of options granted has been determined using the method described under ASC 718 using the expected volatility of similar companies. The expected term of options granted to employees in the current fiscal period has been based on the contractual term of the agreement as prescribed by ASC 718 Share-Based Payment.

The assumptions utilized to determine such values are presented in the following table:


	September 30, 2015	September 30, 2014
	(Unaudited)	(Unaudited)

Risk free interest rate	1.65%	N/A
Expected volatility	82.90%	N/A
Expected term	5 years	N/A
Dividend yield	0%	N/A

The following is a summary of the status of the Company's stock options as of September 30, 2015:


		Number of Options	Weighted Average Exercise Price

Outstanding at December 31, 2014		—	$	—
Granted		150,000	$	7.75
Exercised		—	$	—
Forfeited/Cancelled		—	$	—
Outstanding at September 30, 2015		150,000	$	7.75
Grant date fair value	$	5.12


	Stock Options Outstanding				Stock Options Vested
Range of Exercise Price	Number Outstanding at September 30, 2015	Weighted Average Exercise Price	Weighted Average Remaining Life (Years)	Aggregate Intrinsic Value	Number Vested at September 30, 2015	Weighted Average Exercise Price	Aggregate Intrinsic Value

$ 7.75	150,000	$ 7.75	4.6	$ 112,500	—	$ 7.75	$ —

The intrinsic value is calculated as the excess of the market value of September 30, 2015 over the exercise price of the option. The market value as of September 30, 2015 was $8.50 as reported by the OTC Market, Inc.