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5) Stock-based Compensation

9 Months Ended

Sep. 30, 2019

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 $65,746 and $58,691 has been recognized for these plans for the three months ended September 30, 2019 and 2018, respectively, and $195,487 and $174,831 has been recognized for these plans for the nine months ended September 30, 2019 and 2018, respectively. As of September 30, 2019, the total unrecognized compensation expense related to the options issued was $43,169, 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 September 30, 2019, and the changes during the nine months ended September 30, 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	(19,796)		(63,814)
Cancelled	-		-
Outstanding at September 30, 2019	993,478	$ 4.50	513,466	$ 5.33

As of September 30, 2019:
Options exercisable	955,195	$ 4.46	489,840	$ 5.34

As of September 30, 2019:
Available options for future grant	299,351		146,425

Weighted average contractual term of options
outstanding at September 30, 2019	5.40 years		3.63 years

Weighted average contractual term of options
exercisable at September 30, 2019	5.34 years		3.37 years

Aggregated intrinsic value of options
outstanding at September 30, 2019 (1)	$765,360		$106,646

Aggregated intrinsic value of options
exercisable at September 30, 2019 (1)	$765,360		$106,646


(1) The Company used a stock price of $4.90 as of September 30, 2019 to derive intrinsic value.

A summary of the status of the Company’s stock compensation plans as of September 30, 2018, and the changes during the nine months ended September 30, 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	(36,133)		-
Cancelled	(5,704)		-
Outstanding at September 30, 2018	838,589	$ 4.48	523,603	$ 5.24

As of September 30, 2018:
Options exercisable	805,902	$ 4.46	505,227	$ 5.26

As of September 30, 2018:
Available options for future grant	421,241		165,638

Weighted average contractual term of options
outstanding at September 30, 2018	6.05 years		2.69 years

Weighted average contractual term of options
exercisable at September 30, 2018	6.05 years		2.45 years

Aggregated intrinsic value of options
outstanding at September 30, 2018 (1)	$867,356		$267,943

Aggregated intrinsic value of options
exercisable at September 30, 2018 (1)	$862,157		$260,592


(1) The Company used a stock price of $5.20 as of September 30, 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 nine months September 30, 2019 and 2018 was $112,340 and $118,003, respectively.