Quarterly report pursuant to Section 13 or 15(d)

12. Stock-based Compensation

12. Stock-based Compensation

3 Months Ended

Dec. 31, 2018

Note 12: 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 twelve months ended September 30, 2018 and the three months ended December 31, 2018:

			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		9.02
Exercised		–
Forfeited		–
Outstanding at September 30, 2018		231,668	$	14.84		3.04	$	162,500
Exercisable at September 30, 2018		190,639	$	11.89		2.08	$	162,500


Outstanding at September 30, 2018		231,668	$	14.84		3.04	$	162,500
Granted		–
Exercised		–
Forfeited		–
Outstanding at December 31, 2018		231,668	$	14.84		2.79	$	53,750
Exercisable at December 31, 2018		195,996	$	12.05		1.99	$	53,750

The Company recognized compensation expense of $46,599 and $79,356 during the three months ended December 31, 2018 and 2017, 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, 2018, the Company has $240,206 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, 2018 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		662		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		23.41
8,000		27.60		4,000		27.60
8,000		31.74		–		–
8,000		36.50		–		–
8,000		41.98		–		–
231,668				195,996

The following table summarizes information about the Company’s non-vested shares outstanding as of December 31, 2018 and September 30, 2018:

				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		(15,639	)	$	15.72
Non-vested at September 30, 2018		41,029		$	12.88

Non-vested at September 30, 2018		41,029		$	12.88
Granted		–		$	–
Vested		(5,357	)	$	10.08
Non-vested at December 31, 2018		35,672		$	15.72

Options were granted during fiscal 2018, 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. There have been no options granted in fiscal 2019 to date. The assumptions used in calculating the fair value of stock options granted in fiscal 2018 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 and 10 years
Expected volatility	107%
Expected dividend yield	0%