NOTE 10 — EQUITY INCENTIVE PLANS:

Effective June 3, 2008, the Company’s stockholders voted to approve the 2008 Stock Incentive Plan (“SIP”), with 625,000 shares of common stock available to be issued. At the Annual Stockholder Meeting on September 22, 2011 the Company’s stockholders voted to approve an increase to the shares of common stock issuable under the SIP by 125,000 to 750,000. Under the terms of the SIP, which expired during 2018, the Board of Directors or its Compensation Committee had the discretion to select the persons to whom awards were to be granted. Awards could be stock options, restricted stock and/or restricted stock units (“Equity Award Units”). The awards became vested at such times and under such conditions as determined by the Board or its Compensation Committee. Cumulatively through December 31, 2019, there were 0 options exercised, and at December 31, 2019, 0 options were outstanding and no Equity Award Units were available to be issued under the SIP.

Effective June 19, 2014, the Company’s stockholders voted to approve the 2014 Stock Incentive Plan (“SIP14”), with 800,000 shares of common stock available to be issued. Under the terms of the SIP14, the Board or its Compensation Committee has the discretion to select the persons to whom awards are to be granted. Awards can be in the form of Equity Award Units. The awards become vested at such times and under such conditions as determined by the Board or its Compensation Committee. Cumulatively through December 31, 2019, there were 54,343 options exercised, and at December 31, 2019, 642,625 options were outstanding and 148,667 Equity Award Units were still available to be issued under the SIP14.

Effective June 18, 2019, the Company’s stockholders voted to approve the 2019 Omnibus Incentive Plan (“2019 Plan”), with 2,400,000 shares of common stock available to be issued. In addition, shares of Common Stock underlying any outstanding award granted under the 2019 Plan that, following the effective date of the 2019 Plan, expires, or is terminated, surrendered or forfeited for any reason without issuance of such shares shall be available for the grant of new awards under the 2019 Plan. Under the terms of the 2019 Plan, the Board or its Compensation Committee has the discretion to select the persons to whom awards are to be granted. Awards can be in the form of options, stock appreciation rights, restricted stock, restricted stock unit, or other stock-based award under the 2019 Plan (collectively, 2019 Equity Units). The awards become vested at such times and under such conditions as determined by the Board or its Compensation Committee. Cumulatively through December 31, 2019, there were 375,000 2019 Equity Units awarded under the 2019 Plan, and 2,025,000 2019 Equity Units available to be awarded.

The Company’s results for the years ended December 31, 2019 and 2018 include stock-based compensation expense totaling $1,655,900 and $632,805, respectively. Such amounts have been included in the Consolidated Statements of Operations within cost of product sales ($10,806 and $25,615, respectively), research and development ($228,597 and $78,831, respectively) and selling, general and administrative expenses ($1,416,497 and $528,360, respectively).

Stock option compensation expense in the years ended December 31, 2019 and 2018 represents the estimated fair value of options outstanding, which is being amortized on a straight-line basis over the requisite vesting period of the entire award. The stock compensation expense were $261,088 and $351,556 in December 31, 2019 and 2018, respectively.

No stock options were issued during 2019. The weighted average estimated fair value of stock options granted in the year ended December 31, 2018 was $3.76 per share. The fair value of options at the date of grant was estimated using the Black-Scholes option pricing model. The expected volatility is based upon historical volatility of the Company’s stock and other contributing factors. The expected term is based on the Company’s historical experience with similar type options.

The weighted-average assumptions made in calculating the fair values of options are as follows for the respective years ended December 31:

	2019		2018
Expected term (in years)		n/a		4.96
Expected volatility		n/a		39.91	%
Expected dividend yield		n/a		n/a
Risk-free interest rate		n/a		2.70	%

The following table provides stock option activity for the years ended December 31, 2019 and 2018:

	Number of Shares		Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding at December 31, 2017		810,670	$	5.18	3.69 years	$	2,477,853

Granted		93,750		9.80
Exercised		144,947		4.83			523,327
Forfeited/expired/cancelled		47,505		8.82
Outstanding at December 31, 2018		711,968	$	5.62	3.33 years	$	687,364

Exercisable at December 31, 2018		396,799	$	4.70	2.66 years	$	568,956

Outstanding at December 31, 2018		711,968	$	5.62	3.33 years	$	687,364

Granted		–	$	0.00			–
Exercised		54,343	$	3.60			172,242
Forfeited/expired/cancelled		15,000	$	5.68			–
Outstanding at December 31, 2019		642,625	$	5.79	2.57 years	$	285,925

Exercisable at December 31, 2019		493,958	$	5.22	2.20 years	$	285,925

The following table summarizes information about stock options outstanding at December 31, 2019:

	Stock Options Outstanding								Stock Options Exercisable
Range of Exercise Prices	Shares Outstanding		Average Remaining Contract Life (Year)		Weighted Average Exercise Price		Aggregate Intrinsic Value		Shares Exercisable		Weighted Average Exercise Price		Aggregate Intrinsic Value
1 to 2.79999		–		–	$	–	$	–		–	$	–	$	–
2.8 to 4.59999		250,000		1.20		3.42		285,925		250,000		3.42		285,925
4.6 to 6.39999		137,875		2.44		5.87		–		87,125		5.89		–
6.4 to 8.19999		207,875		4.05		7.31		–		138,083		7.22		–
8.2 to 12		46,875		3.60		11.45		–		18,750		11.45		–
Total		642,625		2.57	$	5.79	$	285,925		493,958	$	5.22	$	285,925

The average remaining contract life for the shares exercisable is 2.2 years, as of December 31, 2019.

As of December 31, 2019, there was $432,746 of net unrecognized compensation cost related to stock options that are not vested, which is expected to be recognized over a weighted average period of approximately 2.00 years. The total fair value of shares vested during the year ended December 31, 2019, was $469,032.

The following table summarizes information about restricted stock and restricted stock units outstanding as of December 31, 2019:

	Number of Shares & Units			Weighted Average Grant Date Fair Value
Unvested at December 31, 2018		287,564		$	9.65

Granted		375,000			5.80
Vested		(116,578	)		9.65
Forfeited/expired/cancelled		–			–
Unvested at December 31, 2019		545,986			7.47

As of December 31, 2019, there was $3,273,929 of net unrecognized compensation cost related to restricted stock and restricted stock units that are not vested, which is expected to be recognized over a weighted average period of approximately 1.4 years. Stock based compensation cost related to restricted stock and restricted stock units recognized during the years ended December 31, 2019 and 2018 was $1,394,814 and $281,249, respectively.