5) Stock-based Compensation

3 Months Ended

Mar. 31, 2019

Notes

5) Stock-based Compensation

5)      Stock Compensation Plans

The Company has two fixed option plans (the “2013 Plan” and the “2014 Director Plan”). Compensation expense for options issued of $64,704 and $58,087 has been recognized for these plans for the three months ended March 31, 2019 and 2018, respectively. As of March 31, 2019, the total unrecognized compensation expense related to the options issued was $173,952, which is expected to be recognized over the vesting period of one year.

The fair value of each option granted is estimated on the date of grant using the Black Scholes Option Pricing Model. The Company estimates the expected life of the options using the simplified method.Future volatility is estimated based upon the weighted historical volatility of the Company’s Class A common stock over a period equal to the expected life of the options. The risk-free interest rate for the expected life of the options is based upon the Federal Reserve Board’s daily interest rates in effect at the time of the grant.

A summary of the status of the Company’s stock compensation plans as of March 31, 2019, and the changes during the three months ended March 31, 2019, are presented below:

	Number of Class A Shares	Weighted Average Exercise Price	Number of Class C Shares	Weighted Average Exercise Price
Outstanding at December 31, 2018	1,011,274	$      4.49	577,280	$      5.15
Granted	2,000		-
Exercised	(968)		-
Cancelled	-		-
Outstanding at March 31, 2019	1,012,306	$      4.49	577,280	$      5.15
As of March 31, 2019:
Options exercisable	898,472	$      4.36	506,404	$      5.13
As of March 31, 2019:
Available options for future grant	295,128		146,425
Weighted average contractual term of options
outstanding at March 31, 2019	5.89 years		3.71 years
Weighted average contractual term of options
exercisable at March 31, 2019	5.71 years		2.87 years
Aggregated intrinsic value of options
outstanding at March 31, 2019 (1)	$704,498		$137,424
Aggregated intrinsic value of options
exercisable at March 31, 2019 (1)	$704,498		$137,424
(1) The Company used a stock price of $4.72 as of March 31, 2019 to derive intrinsic value.

A summary of the status of the Company’s stock compensation plans as of March 31, 2018, and the changes during the three months ended March 31, 2018, are presented below:

	Number of Class A Shares	Weighted Average Exercise Price	Number of Class C Shares	Weighted Average Exercise Price
Outstanding at December 31, 2017	880,426	$      4.35	523,603	$      5.24
Granted	-		-
Exercised	(31,984)		-
Cancelled	(5,704)		-
Outstanding at March 31, 2018	842,738	$      4.48	523,603	$      5.24
As of March 31, 2018:
Options exercisable	744,686	$      4.40	468,477	$      5.29
As of March 31, 2018:
Available options for future grant	421,241		165,638
Weighted average contractual term of options
outstanding at March 31, 2018	6.55 years		3.19 years
Weighted average contractual term of options
exercisable at March 31, 2018	6.53 years		2.43 years
Aggregated intrinsic value of options
outstanding at March 31, 2018 (1)	$850,528		$251,961
Aggregated intrinsic value of options
exercisable at March 31, 2018 (1)	$836,882		$232,667
(1) The Company used a stock price of $5.15 as of March 31, 2018 to derive intrinsic value.

The total intrinsic value (which is the amount by which the fair value of the underlying stock exceeds the exercise price of an option on the exercise date) of stock options exercised during the three months March 31, 2019 and 2018 was $1,539 and $111,157, respectively.