Quarterly report pursuant to Section 13 or 15(d)

11. Stock-based Compensation

11. Stock-based Compensation

3 Months Ended

Dec. 31, 2016

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 three months ended December 31, 2016:

			Weighted		Weighted
			Average		Average
	Number of		Exercise		Remaining
	Shares		Price		Contractual Life		Intrinsic Value
Outstanding at September 30, 2016		175,000	$	11.24		3.75	$	346,500
Granted		–
Exercised		–
Forfeited		–
Outstanding at December 31, 2016		175,000	$	11.24		3.50	$	2,236,875
Exercisable at December 31, 2016		168,750	$	10.70		3.55	$	2,236,875

The Company recognized compensation expense of $1,436 and $91,227 during the three months ended December 31, 2016 and 2015, 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 December 31, 2016 the Company had $2,217 of unrecognized compensation expense (net of estimated forfeitures) associated with stock option awards which the company expects will be recognized through June of 2017.

The exercise price for stock options outstanding and exercisable at December 31, 2016 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
	6,250		12.50		6,250		12.50
	6,250		15.00		–		15.00
	75,000		15.18		75,000		15.18
	175,000				168,750

The following table summarizes information about the Company’s non-vested shares as of December 31, 2016:

			Weighted
			Average
	Number of		Grant-Date
Non-vested Shares	Shares		Fair Value
Non-vested at September 30, 2016		6,250	$	14.22
Granted		–
Vested		–
Non-vested at December 31, 2016		6,250	$	14.22

No options were granted during 2016 and 2015, 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 in 2015 were as follows:

Risk-free interest rate	1.01%
Expected life of the options	2.5 to 3.5 years
Expected volatility	140%
Expected dividend yield	0%

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

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