Stock Incentive Plans

Under the Co Diagnostics, Inc. 2015 Long-term Incentive Plan (the “2015 Plan”), the board of directors may issue incentive stock options, share equivalents such as restricted stock awards, stock bonus awards, performance shares and restricted stock units to employees and directors and non-qualified stock options to consultants of the company. Options generally expire ten years after being granted. Options granted vest in accordance with the vesting schedule determined by the board of directors, usually ratably over a three-year vesting schedule upon anniversary date of the grant with the first 1/3 vesting on the grant date. Should an employee terminate before the vesting period is completed, the unvested portion of each grant is forfeited. The Company have used the Black-Scholes valuation model to estimate fair value of our stock-based awards, which requires various judgmental assumptions including estimated stock price volatility, forfeiture rates, and expected life. The 2015 Plan reserves an aggregate of 6,000,000 shares. The number of unissued stock options authorized under the 2015 Plan at June 30, 2017 was 5,738,628.

Stock Options

There were no options granted in the six months ended June 30, 2017. The fair values for the options granted in the six months ended June 30, 2016 were estimated at the date of grant using the Black Scholes option-pricing model with the following weighted average assumptions:

The weighted average fair value of options granted during the six months ended June 30, 2016 was $0.44 per share.

For the six months ended June 30, 2017, the Company recognized $12,396 of stock based compensation expense recorded in our general and administrative department for options vesting which were granted prior to January 1, 2017.

For the six months ended June 30, 2016, the Company recognized $48,750 of stock based compensation expense recorded in our general and administrative department of which (i) $39,222 was for options granted to 10 employees and one consultant of the company to purchase an aggregate of 163,641 shares of our common stock and (ii) $9,527 for the vesting of options granted prior to January 1, 2016.

The following table summarizes option activity during the six months and year ended June 30, 2017 and December 31, 2016, respectively.

Warrants

The Company estimates the fair value of issued warrants on the date of issuance as determined using a Black-Scholes pricing model. The Company amortizes the fair value of issued warrants using a vesting schedule based on the terms and conditions of each associated underlying contract, as earned. The Black-Scholes valuation model requires various judgmental assumptions including the estimated volatility, risk-free interest rate and expected warrant term. In determining the expected volatility our computation is based the stock prices of three comparable companies and is based on a combination of historical and market-based implied volatility. The risk-free interest rate was based on the yield curve of a zero-coupon U.S. Treasury bond on the date the warrant was issued with a maturity equal to the expected term of the warrant.

The following table summarizes warrant activity during the six months and year ended June 30, 2017 and December 31, 2016, respectively.

The following table summarizes information about stock options and warrants outstanding at June 30, 2017.

Total unrecognized stock-based compensation was $12,389 at June 30, 2017, which the Company expects to recognize over the next year in accordance with vesting provisions.