Quarterly report pursuant to Section 13 or 15(d)

12. Stock-based Compensation

12. Stock-based Compensation

3 Months Ended

Dec. 31, 2017

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, 2017:


			Weighted		Weighted
			Average		Average
	Number of		Exercise		Remaining
	Shares		Price		Contractual Life		Intrinsic Value
Outstanding at September 30, 2017		211,668	$	13.19		3.47	$	454,417
Granted		20,000		32.24		10.00
Exercised		–
Forfeited		–
Outstanding at December 31, 2017		231,668	$	14.84		4.04	$	915,208
Exercisable at December 31, 2017		179,167	$	8.68		2.15	$	851,208

The Company recognized compensation expense of $79,356 and $1,436 during the three months ended December 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 December 31, 2017, the Company has $434,366 of unrecognized compensation expense (net of estimated forfeitures) associated with stock option awards which the company expects to recognize as compensation expense through October of 2022.

The exercise price for stock options outstanding and exercisable outstanding at December 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
	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
	8,000		23.41
	8,000		27.60
	8,000		31.74
	8,000		36.50
	8,000		41.98
	231,668				179,167

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

				Weighted
				Average
	Number of			Grant-Date
Non-vested Shares	Shares			Fair Value
Non-vested at September 30, 2017		36,668		$	17.70
Granted		20,000		$	10.14
Vested		(4,167	)	$	8.41
Non-vested at December 31, 2017		52,501		$	13.89

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%