Note 13.

Stock Compensation

The Company has a Stock Option Plan (“Plan”) that allows grants to officers and key employees shares of common stock. The options have vesting schedules of three years from the date of grant, and are exercisable within seven years from the end of the vesting period. Stock options granted and outstanding as of December 31, 2020 and 2019 may be exercised after one year from the date of the Company’s public listing. If the Company’s not publicly listed, these options will be cancelled.

The Company recognized approximately $66,530 and $89,000 of stock-based compensation related to options granted to employees for the years ended December 31, 2020 and 2019, respectively.

The fair value of each award to employees in 2020 is estimated on the date of grant using the Binomial option pricing model with the following weighted-average assumptions: expected life of approximately 6.25 years, risk-free interest rate of approximately 2.85%, expected volatility of 16.38% and no dividends during the expected life. Expected volatility is based on historical volatilities of public companies operating in the Company’s industry. The expected life of the options represents the period of time options are expected to be outstanding and is estimated considering vesting terms and employees’ historical exercise and post-vesting employment termination behavior. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant.

The Company did not provide any new stock option grants in 2020.

A summary of the status of the Company’s stock option plan is presented as follows:

	Number of Shares		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Live (In Years)		Aggregate Intrinsic Value
Outstanding, December 31, 2018		160,116		1.63		9.18	$	64,046
Granted		-		-
Exercised		-		-
Cancelled		-		-
Outstanding, December 31, 2019		160,116		1.63		8.18	$	64,046
Granted		-		-
Exercised		-		-
Cancelled		-		-
Outstanding, December 31, 2020		160,116		1.63		7.18	$	-

Options exercisable at December 31, 2020		91,044	$	-	$	-	$	-
Vested and expected to vest at December 31, 2020		91,044	$	-	$	-	$	-

As of December 31, 2020 and 2019, there were approximately $0 and $67,000, respectively, of total unrecognized compensation expense related to nonvested share option awards granted. That expense is expected to be recognized over a weighted-average period of 3 years.