Quarterly report pursuant to Section 13 or 15(d)

10. Stock-based Compensation

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10. Stock-based Compensation
6 Months Ended
Mar. 31, 2017
Share-based Compensation [Abstract]  
Stock-based Compensation

From time to time, the Company grants stock options and restricted stock awards to directors, officers and employees. These awards are valued at the grant date by determining the fair value of the instruments, net of estimated forfeitures. The value of each award is amortized on a straight-line basis over the requisite service period.

 

Stock Options

 

The following table summarizes stock option activity for the six months ended March 31, 2017:

 

    Number of Shares     Weighted Average Exercise Price     Weighted Average Remaining Contractual Life     Intrinsic Value  
Outstanding at September 30, 2016     175,000     $ 11.22       3.75     $ 346,500  
Granted     36,668       22.52                  
Exercised                              
Forfeited                              
Outstanding at March 31, 2017     211,668     $ 13.19       3.98     $ 899,875  
Exercisable at March 31, 2017     168,750     $ 8.85       2.54     $ 899,875  

 

The Company recognized compensation expense of $69,520 and $174,885 during the six months ended March 31, 2017 and 2016, respectively, related to stock option awards granted to certain employees and officers based on the grant date fair value of the awards, net of estimated forfeitures.

 

At March 31, 2017 the Company has $495,796 of unrecognized compensation expense (net of estimated forfeitures) associated with stock option awards which the company expects to recognize as compensation expense through December of 2021.

  

The exercise price for stock options outstanding and exercisable at March 31, 2017 is as follows:

 

Outstanding     Exercisable  
Number of     Exercise     Number of     Exercise  
Options     Price     Options     Price  
  31,250     $ 5.00       31,250     $ 5.00  
  25,000       7.50       25,000       7.50  
  31,250       10.00       31,250       10.00  
  4,167       10.86                  
  4,167       10.86                  
  4,167       10.86                  
  4,167       10.86                  
  6,250       12.50       6,250       12.50  
  6,250       15.00             15.00  
  75,000       15.18       75,000       15.18  
  4,000       23.41                  
  4,000       27.60                  
  4,000       31.74                  
  4,000       36.50                  
  4,000       41.98                  
  211,668               168,750          

 

The following table summarizes information about the Company’s non-vested shares as of March 31, 2017:

 

Non-vested Shares     Number of Shares       Weighted Average Grant-Date Fair Value  
                 
Non-vested at September 30, 2016     6,250     $ 14.22  
Granted     36,668     $ 17.70  
Vested     –           
Non-vested at March 31, 2017     42,918     $ 17.19  

 

Options were granted during 2017 and 2016, where the exercise price was less than the common stock price at the date of grant or where the exercise price was greater than the common stock price at the date of grant. The assumptions used in calculating the fair value of stock options granted use the Black-Scholes option pricing model for options granted were as follows:

 

Risk-free interest rate   1.25%
Expected life of the options   5.0 to 10.0 years
Expected volatility   107%
Expected dividend yield   0%