11.	STOCK OPTIONS

2012,

pursuant to the recommendation of the Board of Directors, the stockholders ratified the creation of the Company’s

2012

Omnibus Incentive Plan (the

“2012

Plan”), which superseded the

1990

Flexible Incentive Plan (the

"1990

Plan"). The

2012

Plan is administered by a committee of the Board of Directors and provides for granting of various stock-based awards including stock options to eligible participants, primarily officers and certain key employees. A total of

2,000,000

shares of common stock were available under the terms of the

2012

Plan plus shares outstanding under the

1990

Plan which expire or are otherwise forfeited, canceled or terminated after

July 25, 2012,

the Effective Date of the

2012

Plan. As of

June 30,

2019

, there were

899,308

options available for future grants. Options vest over a

three

five

year period from the date of grant,

with a maximum term of

five

ten

years

. The Company's policy is to issue new shares when stock options are exercised.

The fair value of each stock option grant was estimated as of the date of grant using the Black-Scholes pricing model. The resulting compensation cost for fixed awards with graded vesting schedules is amortized on a straight-line basis over the vesting period for the entire award. The expected term of awards granted is determined based on historical experience with similar awards, giving consideration to the expected term and vesting schedules. The expected volatility is determined based on the Company’s historical stock prices over the most recent period commensurate with the expected term of the award. The risk-free interest rate is based on U.S. Treasury

zero

-coupon issues with a remaining term commensurate with the expected term of the award. Expected pre-vesting option forfeitures are based on historical data.

As of

June 30,

2019

, there was

$1,334,370

of total unrecognized compensation cost related to stock options granted under the

2012

Plan and

1990

Plan. This cost is expected to be recognized over a weighted average period of

2.83

years. Total unrecognized compensation cost will be adjusted for any future changes in estimated and actual forfeitures. The Company recognized stock-based compensation expense of

$387,556

and

$331,560

2019

and

2018

, respectively. These expenses were included in selling, general and administrative expenses.

Options are granted at a price equal to or greater than the market value of the common stock on the date of grant. The per share weighted average fair value of the stock options granted during the years ended

June 30,

2019

and

2018

were

$1.57

and

$0.85

, respectively. The fair value of each option granted is estimated on the date of grant using the Black-Scholes option-pricing model. For the options granted in

2019

and

2018

, the Company used the following weighted-average assumptions:

	2019			2018
Expected stock price volatility		66	%		54	%
Risk free interest rate		2.86	%		1.91	%
Expected dividend yield		—	%		—	%
Expected forfeitures		29.68	%		24.40	%
Expected life of options (years)		5.8			5.6

The following table identifies options granted, exercised, canceled, or available for exercise pursuant to the

1990

Plan and the

2012

Plan:

								Aggregate
						Weighted		Intrinsic
				Weighted		Average		Value of
			Stock	Average		Remaining		In-The-
	Number of		Options	Exercise		Contractual		Money
	Shares		Price Range	Price		Life - Years		Options
Shares under option at June 30, 2017		2,180,000	$2.05 - $7.76	$	3.93		3.47	$	—
Granted		510,000	$1.77 - $1.95	$	1.89
Exercised		—	—	$	—
Expired		(285,000)	$5.47 - $7.76	$	5.55
Forfeited		—	—	$	—
Shares under option at June 30, 2018		2,405,000	$1.77 - $6.28	$	3.31		3.61	$	—
Granted		585,000	$2.63 - $2.92	$	2.79
Exercised		(22,125)	$1.77 - $2.24	$	2.11
Expired		(302,000)	$1.77 - $5.83	$	5.62
Forfeited		(73,000)	$1.77 - $2.65	$	2.22
Shares under option at June 30, 2019		2,592,875	$1.77 - $6.28	$	2.96		4.23	$	48,280
Exercisable as of June 30, 2018		1,215,082	$2.05 - $6.28	$	4.27		2.31	$	10,750
Exercisable as of June 30, 2019		1,320,291	$1.77 - $6.28	$	3.45		2.20	$	9,788

The aggregate intrinsic value of outstanding and exercisable stock options is defined as the difference between the market value of the Company's stock on

June 30,

2019

and the exercise price, multiplied by the number of in-the-money outstanding and exercisable stock options.

A summary of intrinsic value and cash received from stock option exercises and fair value of vested stock options for the fiscal years ended

June 30,

2019

and

2018

is as follows:

	2019		2018
Total intrinsic value of stock options exercised	$	34,797	$	—
Cash received from stock option exercises	$	46,677	$	—
Total fair value of stock options vested	$	374,639	$	399,595
Total recognized tax benefit	$	9,198	$	—

				Weighted
				Average
				Grant Date
	Shares			Fair Value
Non-vested as of June 30, 2017		1,074,834			0.96
Granted		510,000			0.85
Vested		(394,916	)		1.01
Forfeited		-			-
Non-vested as of June 30, 2018		1,189,918			0.90
Granted		585,000			1.57
Vested		(429,334	)		0.87
Forfeited		(73,000	)		1.33
Non-vested as of June 30, 2019		1,272,584			1.19