10. Stock Options

On June 7, 2016, stockholders of the Company approved amendments to the Innodata Inc. 2013 Stock Plan (as amended, the “Plan”). The number of shares of common stock of Innodata Inc. that may be delivered, purchased or used for reference purposes (with respect to stock appreciation rights or stock units) for awards granted under the Plan after June 7, 2016 is 5,858,892 (the Share Reserve). Shares subject to an option or stock appreciation right granted under the Plan after June 7, 2016 count against the Share Reserve as one share for every share granted, and shares subject to any other type of award granted under the Plan after June 7, 2016 count against the Share Reserve as two shares for every share granted. Any award, or portion of an award, under the Plan or under the Company’s 2009 Stock Plan (as amended and restated (the Prior Plan)) that expires or terminates unexercised, becomes unexercisable or is forfeited or otherwise terminated, surrendered or canceled as to any shares without delivery of shares or other consideration will be added back to the Share Reserve as one share for each such share that was subject to an option or stock appreciation right granted under the Plan or the Prior Plan, and two shares for each such share that was subject to an award other than an option or stock appreciation right granted under the Plan or the Prior Plan. If any shares are withheld, tendered or exchanged by a participant in the Plan as full or partial payment to Innodata of the exercise price under an option under the Plan or the Prior Plan or in satisfaction of a participant’s tax withholding obligations with respect to any award under the Plan or the Prior Plan, there will be added back to the Share Reserve one share for each such share that was withheld, tendered or exchanged in respect of an option or stock appreciation right granted under the Plan or the Prior Plan, and two shares for each such share that was withheld, tendered or exchanged in respect of an award other than an option or stock appreciation right granted under the Plan or the Prior Plan.

The fair value of stock options is estimated on the date of grant using the Black-Scholes option pricing model. The weighted-average fair value of the options granted and weighted-average assumptions were as follows:


	For the Years Ended December 31,
	2020			2019

Weighted average fair value of options granted	$	0.61		$	0.56
Risk-free interest rate		0.29% - 0.56	%		1.68% - 2.55	%
Expected life (years)		5‑6			5‑6
Expected volatility factor		46.75%-50.09	%		45.03%-46.38	%
Expected dividends		None			None

The Company estimates the risk-free interest rate using the U.S. Treasury yield curve for periods equal to the expected term of the options in effect at the time of grant. The expected term of options granted is based on a combination of vesting schedules, term of the options and historical experience. Expected volatility is based on historical volatility of the Company’s common stock. The Company uses an expected dividend yield of zero since it has never declared or paid any dividends on its capital stock.

A summary of option activity under the Plans as of December 31, 2020, and changes during the years ended December 31, 2020 and 2019, is presented below:


				Weighted-Average
		Weighted -Average		Remaining
	Number of	Exercise		Contractual Term	Aggregate
	Options	Price		(years)	Intrinsic Value

Outstanding at January 1, 2019	4,982,040	$	2.14
Granted	2,112,500		1.25
Exercised	(10,000)		1.11
Forfeited/Expired	(256,237)		2.42
Outstanding at December 31, 2019	6,828,303	$	1.86	6.86	$	89,405
Granted	1,080,000		1.37
Exercised	(1,357,116)		1.97
Forfeited/Expired	(644,303)		3.06
Outstanding at December 31, 2020	5,906,884	$	1.61	7.34	$	21,769,727
Exercisable at December 31, 2020	3,923,564	$	1.79	6.66	$	13,769,733
Vested and Expected to Vest at December 31, 2020	5,906,884	$	1.61	7.34	$	21,769,727

The total compensation cost related to non-vested stock options not yet recognized as of December 31, 2020 totals approximately $1.1 million. The weighted-average period over which these costs will be recognized is 21 months.

A summary of restricted shares under the Company’s Plan are presented below:


		Weighted-Average
		Grant Date Fair
	Number of Shares	Value

Outstanding January 1, 2019	—		—
Granted	75,000	$	1.38
Vested	—		—
Unvested at December 31, 2019	75,000		—
Granted	—		—
Vested	(25,000)		—
Forfeited/Expired	—		—
Unvested at December 31, 2020	50,000	$	1.38