INCENTIVE STOCK PLANS

9 Months Ended

Jun. 30, 2015

Notes to Financial Statements

INCENTIVE STOCK PLANS

2014 Equity Incentive Plan 

On September 30, 2014, we adopted our 2014 Equity Incentive Plan (the “2014 Plan”) and reserved 1,030,000 shares of our common stock for issuance thereunder. The purpose of the 2014 Plan is to promote the success of the Company and to increase stockholder value by providing an additional means through the grant of awards to attract, motivate, retain and reward selected employees and other eligible persons. The 2014 Plan provides for the grant of incentive stock options, nonqualified stock options, restricted stock, restricted stock units, stock appreciation rights and other types of stock-based awards to our employees, officers, directors and consultants.  Pursuant to the terms of the 2014 Plan, either the Board or a board committee is authorized to administer the plan, including determining which eligible participants will receive awards, the number of shares of common stock subject to the awards and the terms and conditions of such awards.  Unless earlier terminated by the Board, the 2014 Plan terminates at the close of business on September 30, 2024.

2011 Incentive Stock Plan

In October 2011, our board of directors adopted our 2011 Incentive Stock Plan (the “2011 Plan”), which was ratified by our shareholders in December 2011. The 2011 Plan provides for equity incentives to be granted to our employees, executive officers or directors or to key advisers or consultants. Equity incentives may be in the form of stock options with an exercise price not less than the fair market value of the underlying shares as determined pursuant to the 2011 Plan, restricted stock awards, other stock based awards, or any combination of the foregoing. The 2011 Plan is administered by the board of directors. During 2013, we amended the terms of the plan and increased the number of shares available under the plan to 15% of our issued and outstanding common stock as of January 1 of each year.

2011 Endorsers Incentive Stock Plan

In October 2011, our board of directors adopted our 2011 Endorsers Incentive Stock Plan (the “2011 Endorsers Plan”) The 2011 Endorsers Plan provides for equity incentives to be granted to athletic and other celebrities who endorse our present and planned products. Equity incentives may be in the form of stock options with an exercise price not less than the fair market value of the underlying shares as determined pursuant to the 2011 Endorsers Plan, restricted stock awards, other stock based awards, or any combination of the foregoing. The 2011 Endorsers Plan is administered by the board of directors. 6,000,000 shares of our common stock are reserved for issuance pursuant to the exercise of awards under the 2011 Endorsers Plan.

Double Eagle Holdings, Ltd. 2011 Incentive Stock Plan

In October 2011, our board of directors adopted the Double Eagle Holdings, Ltd. 2011 Incentive Stock Plan (the "Double Eagle Plan"), which was approved by written consent of a majority of our shareholders in December 2011.  The maximum number of shares authorized and available under the Double Eagle Plan is 2,000,000 shares. Under the terms of the Double Eagle Plan, the options expire after 5 years.  We have reserved 20 million shares of our common stock for the grant of qualified incentive options or non-qualified options to employees and directors of Fuse or its parents or subsidiaries, and to non-employee directors, consultants and advisors and other persons who may perform significant services for or on behalf of the Company under the Plan.  Prices for incentive stock options must provide for an exercise price of not less than 100% of the fair market value of the common stock on the date the options are granted unless the eligible employee owns more than 10% of our common stock for which the exercise price must be at least 110% of such fair market value.

Total compensation expense for share based payment arrangements under the foregoing incentive stock plans amounted to approximately $137,200 and $1,760,000 for the nine month periods ended June 30, 2015 and 2014, respectively.

A summary of this activity during the nine months ended June 30, 2015 is as follows:

			Weighted-
			Average		Number
	Number		Remaining		Of
Exercise	Of		Contractual		Options
Price Range	Options		Life (Years)		Exercisable
$0.08		233,319		4.00		233,319

The fair value of each option on the date of grant is estimated using the Black-Scholes option valuation model.  The following weighted-average assumptions were used for options granted during the nine months ended June 30, 2015:

	Nine Months Ended June 30, 2015
Expected term		5 years
Expected average volatility		0.46%
Expected dividend yield		0%
Risk-free interest rate		1.63%
Expected annual forfeiture rate		0%

The fair value of each option on the date of grant is estimated using the Black-Scholes option valuation model.  The following weighted-average assumptions were used for options granted during the Year ended September 30, 2014:

	Year Ended September 30, 2014
Expected term		1-3 years
Expected average volatility		100%-140%
Expected dividend yield		0%
Risk-free interest rate		0.25%-1.38%
Expected annual forfeiture rate		0%

At June 30, 2015, we had the following common stock equivalents underlying convertible debt and the detachable warrants issued with the convertible debt, which are not included in the information above.

	Exercise
	Price		Shares
Detachable warrants	$	0.0006	8,203
Detachable warrants	$	0.0006	40,125
Detachable warrants	$	0.0006	12,915
Detachable warrants	$	0.0006	6,472
			67,715

At September 30, 2014, the Company had the following common stock equivalents from convertible debt and the detachable warrants issued with the convertible debt, which are not included in the information above.

			Exercise
	Price		Shares
Detachable warrants	$	0.0007		8,203
Detachable warrants	$	0.0007		40,125
Detachable warrants	$	0.0007		12,915
Detachable warrants	$	0.0007		6,472
				67,715