Quarterly report pursuant to Section 13 or 15(d)

10. Stock-based Compensation

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10. Stock-based Compensation
9 Months Ended
Jun. 30, 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 nine months ended June 30, 2017:

 

            Weighted     Weighted        
            Average     Average        
      Number of     Exercise     Remaining        
      Shares     Price     Contractual Life     Intrinsic Value  
  Outstanding at September 30, 2016       175,000     $ 11.22       3.75     $ 346,500  
  Granted        36,668                          
  Exercised                                
  Forfeited                                
  Outstanding at June 30, 2017       211,668     $ 13.19       3.73     $ 248,500  
  Exercisable at June 30, 2017       175,000     $ 9.29       2.49     $ 248,500  

 

The Company recognized compensation expense of $67,491 and $79,824 for the three months ended June 30, 2017 and 2016, respectively. The Company recognized compensation expense of $137,011 and $254,710 during the nine months ended June 30, 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 June 30, 2017, the Company has $428,306 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 outstanding at June 30, 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       6,250       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               175,000          

 

The following table summarizes information about the Company’s non-vested shares outstanding as of June 30, 2017:

 

            Weighted  
            Average  
      Number of     Grant-Date  
Non-vested Shares     Shares     Fair Value  
  Non-vested at September 30, 2016       6,250     $ 14.22  
  Granted       36,668     $ 17.70  
  Vested       (6,250 )   $ 14.22  
  Non-vested at June 30, 2017       36,668     $ 17.70  

 

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%