Health Discovery Corp (HDVY)

[LocWolf]

On February 8, 2016, the Company granted options to purchase 5,000,000 shares of the Company’s common stock to a group of employees and consultants in recognition of their efforts to lower the Company’s monthly expenditures and compensation and their continuing contributions to the Company. The options vest over a two-year period, have an exercise price of $.03, and expire on February 8, 2026. Within the group of 5,000,000 options, the Company’sVice President, Mark A. Moore, Ph.D., received an option to purchase 500,000 shares of the Company’s common stock and the Company’s Senior Vice President, Hong Zhang, Ph.D., received an option to purchase 1,250,000 shares of the Company’s common stock. The fair value of each option granted is $0.0219 and was estimated on the date of grant using the Black-Scholes pricing model with the following assumptions: dividend yield at 0%, risk-free interest rate of 1.99%, an expected life of 5 years, and volatility of 96%. The aggregate computed fair value of these options is $109,271, and this amount will be charged as an expense over the two-year vesting period. Because at the time of issuance, these options exceeded the amount of common shares available if the holders exercised the previously issued outstanding options and warrants, the Company needed to increase the authorized shares of common stock in order to satisfy these options. The shareholders of the Company approved this increase in authorized shares on May 17, 2016.