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Stockholders Equity
 9 Months Ended
Sep. 30, 2020
Stockholders Equity  
8. Stockholders' Equity

Note 8 – Stockholders’ Equity

 

Dividends Declared and Paid

 

Dividends declared and paid on Common Stock were $1,530,390 and $2,827,276for the nine months ended September 30, 2020 and 2019, respectively. The Company’s Board of Directors approved a quarterly dividend on November 4, 2020 of $.04per share payable in cash on December 15, 2020 to stockholders of record as of November 30, 2020 (see Note 13 - Subsequent Events).

Stock Options

 

Effective August 12, 2014, the Company adopted the 2014 Equity Participation Plan (the “2014 Plan”) pursuant to which a maximum of 700,000shares of Common Stock of the Company were initially authorized to be issued pursuant to the grant of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock and stock bonuses. Incentive stock options granted under the 2014 Plan expire no later than ten years from the date of grant (except no later than five years for a grant to a 10% stockholder). Non-statutory stock options granted under the 2014 Plan expire no later than ten years from the date of grant. The Board of Directors or the Compensation Committee determines the vesting provisions for stock awards granted under the 2014 Plan, subject to the provisions of the 2014 Plan. On August 5, 2020, the Company’s stockholders approved amendments to the 2014 Plan, including an increase in the maximum shares of Common Stock of the Company that are authorized to be used pursuant to the 2014 Plan to1,400,000.

 

The results of operations for the three months ended September 30, 2020 and 2019 include stock-based compensation expense for stock options totaling approximately $14,000and $20,000, respectively. The results of operations for the nine months ended September 30, 2020 and 2019 include stock-based compensation expense for stock options totaling approximately $52,000and $21,000, respectively. Stock-based compensation expense related to stock options is net of estimated forfeitures of approximately 16% for the three months and nine months ended September 30, 2020. Stock-based compensation expense related to stock options is net of estimated forfeitures of approximately 17% for the three months and nine months ended September 30, 2019. Such amounts have been included in the consolidated statements of operations and comprehensive income (loss) within other operating expenses.

 

The weighted average estimated fair value of stock options granted during the nine months ended September 30, 2020 and 2019 was $2.40per share and $1.91per share, respectively. The fair value of stock options at the grant date was estimated using the Black-Scholes option-pricing model.

 

The following weighted average assumptions were used for grants during the following periods:

 

 

 

 

 Nine months ended

 

 

 

September 30,

 

 

 

 2020

 

 

 2019

 

 

 

 

 

 

 

 

Dividend Yield

 

 

3.14%

 

 

2.87%

Volatility

 

 

37.69%

 

 

36.11%

Risk-Free Interest Rate

 

 

1.40%

 

 

1.61%

Expected Life

 

2.75 years

 

 

3.25 years

 

A summary of stock option activity under the Company’s 2014 Plan for the nine months ended September 30, 2020 is as follows:

 

 

Stock Options

 

Number

of Shares

 

 

 Weighted Average Exercise Price per Share

 

 

 Weighted Average Remaining Contractual Term

 

 

 Aggregate

Intrinsic

Value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Outstanding at January 1, 2020

 

 

82,000

 

 

$8.61

 

 

 

3.38

 

 

$-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Granted

 

 

74,523

 

 

$7.96

 

 

 

4.34

 

 

$-

 

Exercised

 

 

-

 

 

$-

 

 

 

-

 

 

$-

 

Forfeited

 

 

(36,557)

 

$8.43

 

 

 

-

 

 

$-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Outstanding at September 30, 2020

 

 

119,966

 

 

$8.26

 

 

 

3.80

 

 

$-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vested and Exercisable at September 30, 2020

 

 

50,000

 

 

$8.45

 

 

 

1.34

 

 

$-

 

Restricted Stock Awards

 

A summary of the restricted Common Stock activity under the Company’s 2014 Plan for the nine months ended September 30, 2020 is as follows:

 

 

 

Restricted Stock Awards

 

Shares

 

 

 Weighted Average Grant Date Fair Value per Share

 

 

 Aggregate Fair Value

 

 

 

 

 

 

 

 

 

 

 

Balance at January 1, 2020

 

 

213,929

 

 

$16.51

 

 

$3,554,174

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Granted

 

 

209,518

 

 

$7.93

 

 

$1,661,504

 

Vested

 

 

(91,863)

 

$14.49

 

 

$(1,331,254)

Forfeited

 

 

(19,266)

 

$15.18

 

 

$(292,455)

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at September 30, 2020

 

 

312,318

 

 

$10.45

 

 

$3,591,969

 

 

 

 

Fair value was calculated using the closing price of the Company’s Common Stock on the grant date. For the three months ended September 30, 2020 and 2019, stock-based compensation for these grants was approximately $416,000and $388,000, respectively, which is included in other operating expenses on the accompanying condensed consolidated statements of operations and comprehensive income (loss). For the nine months ended September 30, 2020 and 2019, stock-based compensation for these grants was approximately $1,321,000and $1,096,000, respectively, which is included in other operating expenses on the accompanying condensed consolidated statements of operations and comprehensive income (loss). These amounts reflect the Company’s accounting expense and do not correspond to the actual value that will be recognized by the directors, executives and employees.