NOTE 10 – Stock-Based Compensation

NeuroOne formally adopted an equity incentive plan (“the 2016 Plan”) on October 27, 2016 which was subsequently adopted by the Company upon completion of the Acquisition. In addition, the Company adopted a 2017 Equity Incentive Plan (the “2017 Plan”) on April 17, 2017. The 2016 and 2017 Plans provide for the issuance of restricted shares and stock options to employees, directors, and consultants of the Company. The Company reserved 2,292,265 shares of common stock (as adjusted for the exchange ratio in connection with the Acquisition) for issuance under the 2016 and 2017 Plans on a combined basis. The Company began granting stock options and restricted stock awards in the second quarter of 2017. During the three and nine-month period ended September 30, 2017, zero and 365,716 stock options for shares of common stock were granted, respectively, to directors and consultants at a weighted average exercise price of $0.035 per share. The stock options granted during the nine month period ended September 30, 2017 had a weighted average grant date fair value of $0.014 per share with various vesting periods and expire in ten years. In addition, the Company issued zero and 215,453 shares of restricted common stock with performance vesting conditions from the 2016 Plan during the three and nine month period ended September 30, 2017, respectively. All performance vesting conditions for the restricted common stock were met as of September 30, 2017. Compensation expense associated with restricted common stock shares was $7,220.

Stock-based compensation expense was included in general and administrative and research and development costs as follows in the accompanying condensed statements of operations:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2017		2016		2017		2016
General and administrative	$	—	$	—	$	2,065	$	—
Research and development		64,945		—		74,729		—
Total stock-based compensation	$	64,945	$	—	$	76,794	$	—

The weighted-average assumptions used in the Black-Scholes option-pricing model are as follows for the stock options granted during the three and nine month periods ended September 30, 2017:

	Three Months Ended			Nine Months Ended

Expected stock price volatility		—	%		47.8	%
Expected life of options (years)		—			5.0
Expected dividend yield		—	%		0	%
Risk free interest rate		—	%		1.9	%

During the three and nine months ended September 30, 2017, 42,525 and 365,716 stock options vested, respectively, and zero and 215,453 restricted stock awards vested, respectively. The weighted average fair value per share of options vesting during the three and nine months ended September 30, 2017 was $0.014. No stock options were forfeited during the three and nine months ended September 30, 2017. As of September 30, 2017, 1,711,096 shares were available for future issuance on a combined basis under the 2016 and 2017 Plans.

There was no unrecognized stock-based compensation cost for stock options and restricted common stock as of September 30, 2017.