5. Stock Options and Restricted Shares

A summary of stock option activity under the Innodata Inc. 2013 Stock Plan, as amended and restated effective June 7, 2016 (the Plan), as of March 31, 2021, and changes during the three months then ended, are presented below:


		Weighted -		Weighted-Average
	Number of	Average Exercise		Remaining Contractual	Aggregate
	Options	Price		Term (years)	Intrinsic Value
Outstanding at January 1, 2021	5,906,884	$	1.61
Granted	360,000		6.40
Exercised	(689,616)		2.17
Forfeited/Expired	(13,333)		1.38
Outstanding at March 31, 2021	5,563,935	$	1.86	7.69	$	24,770,815

Exercisable at March 31, 2021	3,594,434	$	1.68	7.10	$	16,621,389

Vested and Expected to Vest at March 31, 2021	5,563,935	$	1.86	7.69	$	24,770,815

During the three months ended March 31, 2021, a total of 689,616 options were exercised at an average price of $2.17 for an aggregate value of $1,497,382. 186,816 of the exercised stock options were surrendered to the Company as payment of the exercise price and minimum tax withholdings resulting from the stock options exercised.

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 Three Months Ended
	March 31, 2021
Weighted average fair value of options granted	$	3.33
Risk-free interest rate		0.22%-0.82	%
Expected term (years)		2.96-6.0
Expected volatility factor		59.62	%
Expected dividends		—

A summary of restricted shares under the Plan as of March 31, 2021 are presented below:


		Weighted-Average
		Grant Date Fair
	Number of Shares	Value
Unvested at December 31, 2020	50,000
Granted	—
Vested	(25,000)
Forfeited/Expired	—
Unvested at March 31, 2021	25,000	$	1.38

During the three months ended March 31, 2021, 25,000 restricted shares vested and 6,597 of the vested shares were surrendered to the Company as payment of minimum tax withholdings resulting from the vesting of the shares.

The compensation cost related to non-vested stock options and restricted stock awards not yet recognized as of March 31, 2021 totaled approximately $2.0 million. The weighted-average period over which these costs will be recognized is twenty-six months.

The stock-based compensation expense related to the Company’s various stock awards was allocated as follows (in thousands):


	For the Three Months Ended
	March 31,
	2021		2020
Direct operating costs	$	38	$	40
Selling and administrative expenses		240		130
Total stock-based compensation	$	278	$	170