eCrypt Technologies, Inc. | 2013 | FY |

7.         Stock options

On February 16, 2012 the company granted a non-qualified stock option to its newly appointed director, Thomas Trkla as compensation for his services. The director is entitled to purchase a total of three hundred thousand (300,000) shares of restricted common stock for a price equal to $0.30 per share (Exercise Price), exercisable over a ten-year period thereafter. The option were vested during the twelve month period. As to the total number of Shares with respect to which the Option is granted, the Option was exercisable as follows: (i) 25% of the Option in the aggregate was exercisable upon the mutual execution of the Agreement (ii) 50% of the Option in the aggregate was exercisable on or after the four month anniversary of the Grant Date; (iii) 75% of the Option in the aggregate was exercisable on or after the eight month anniversary of the Grant Date; and (iv) 100% of the Option in the aggregate was exercisable on or after the twelve month anniversary of the Grant Date (the twelve month period commencing on the Grant Date and ending on the twelve month anniversary of the Grant Date being referred to as the “Vesting Period”).

As of March 31, 2013, the director has not exercised any rights. The total fair value of these options at the date of grant was estimated to be $180,000 and was determined using the Black-Scholes option pricing model with an expected life of 10 years, a risk free interest rate of 1.99%, a dividend yield of 0% and expected volatility of 419% . Out of this $180,000 was recorded as stock based compensation expense through March 31, 2013 based on three hundred thousand (300,000) options vested.

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