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Stockholders' Equity

12 Months Ended

Dec. 31, 2020

Stockholders' Equity

12. Stockholders' Equity

Note 12 – Stockholders’ Equity

Dividends Declared

Dividends declared and paid on Common Stock were $1,957,142 and $3,501,366 for the years ended December 31, 2020 and 2019, respectively. The Company announced on February 1, 2021 that its Board of Directors approved a quarterly dividend of $0.04 per share payable in cash on March 15, 2021 to stockholders of record as of February 26, 2021 (see Note 19 - 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 700,000 shares 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 number shares of Common Stock of the Company that are authorized to be issued pursuant to the 2014 Plan to 1,400,000.

The results of operations for the years ended December 31, 2020 and 2019 include stock-based compensation expense for stock options totaling approximately $68,000 and $30,000, respectively. Stock-based compensation expense related to stock options for the years ended December 31, 2020 and 2019 is net of estimated forfeitures of approximately 16% and 17%, respectively. Such amounts have been included in the consolidated statements of operations and comprehensive income within other operating expenses.

The weighted average estimated fair value of stock options granted during the years ended December 31, 2020 and 2019 was $1.66 per share and $1.91 per 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:

		Years ended
		December 31,
		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

The aggregate intrinsic value of options outstanding and options exercisable at December 31, 2020 is calculated as the difference between the exercise price of the underlying options and the market price of the Company’s Common Stock for the options that had exercise prices that were lower than the $6.65 closing price of the Company’s Common Stock on December 31, 2020. No options were exercised during the year ended December 31, 2020. The total intrinsic value of options forfeited during the year ended December 31, 2020 was $-0-, determined as of the date of forfeiture.

Participants in the 2014 Plan may exercise their outstanding vested options, in whole or in part, by having the Company reduce the number of shares otherwise issuable by a number of shares having a fair market value equal to the exercise price of the option being exercised (“Net Exercise”), or by exchanging a number of shares owned for a period of greater than one year having a fair market value equal to the exercise price of the option being exercised (“Share Exchange”). The Company received cash proceeds of $23,550 from the exercise of options for the purchase of 3,000 shares of common stock during the year ended December 31, 2019.

As of December 31, 2020, the estimated fair value of unamortized compensation cost related to unvested stock option awards was approximately $64,000. Unamortized compensation cost as of December 31, 2020 is expected to be recognized over a remaining weighted-average vesting period of 1.27 years.

As of December 31, 2020, there were 843,316 shares reserved for grants under the 2014 Plan.

Restricted Stock Awards

A summary of the restricted Common Stock activity under the Company’s 2014 Plan for the year ended December 31, 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			242,974			$	7.66			$	1,860,525
Vested			(66,673	)		$	16.97			$	(1,331,254	)
Forfeited			(19,266	)		$	15.18			$	(292,455	)

Balance at December 31, 2020			370,964			$	9.96			$	3,990,999