(5) Share-Based Compensation Plans

12 Months Ended

Dec. 28, 2019

Retirement Benefits [Abstract]

(5) Share-Based Compensation Plans

(5) Share-Based Compensation Plans

The Company adopted the 2009 Stock Incentive Plan ("2009 Plan") on December 10, 2009. Under the terms of the 2009 Plan all of the Company’s employees, officers, directors, consultants and advisors are eligible to be granted options, restricted stock awards, or other stock-based awards. Some outstanding options are nonstatutory stock options; some are incentive stock options. All options granted are exercisable at the fair market value of the stock on the date of grant, and expire ten years from the date of grant. The options granted to employees generally vest in equal annual installments over a five-year period. The options granted to directors generally vest immediately on date of grant.

Under the 2009 Plan a total of 2,848,100 shares of common stock are available for issuance, of which 1,053,995 shares remain available for grant as of December 28, 2019.

A summary of stock option activity as of December 28, 2019 and changes during the year then ended is presented below:

			Weighted		Weighted
			Average		Remaining		Aggregate
			Exercise		Contractual		Intrinsic
	Shares		Price		Life (years)		Value
Outstanding at
beginning of year		1,753,605	$	1.75
Granted		199,500	$	1.44
Exercised		—		—
Forfeited		(127,000)	$	1.61
Expired		(32,000)	$	1.58
Outstanding at end of year		1,794,105	$	1.72		3.8	$	11,120
Options exercisable at year-end		1,471,905	$	1.74		3.1	$	10,550

No options were exercised  during fiscal 2019 or 2018.

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model. The following table presents the annualized weighted average values of the significant assumptions used to estimate the fair values of the options granted during 2019 and 2018:

		2019		2018
Risk-free interest rate		2.48%		2.76%
Expected life in years		6.1		6.1
Expected volatility		54%		54%
Expected dividend yield		0		0
Weighted average fair value of grants	$	.79	$	.84

All options are granted with an exercise price equal to the fair market value of the underlying common stock on the date of grant.

The Company recognized $133,671 and $220,654 as stock based compensation expense in 2019 and 2018, respectively including $131,421 related to stock options outstanding and $2,250 related to the issue of common stock in 2019. As of December 28, 2019, there was $171,332 of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the plan; that cost is expected to be recognized over a weighted average period of 2.2 years.