Note 10 – Stock-Based Compensation Plans

A summary of stock option activity for the nine months ended September 30, 2019 is as follows:


		Weighted
		Average
	Number of	Exercise
	Options	Price

Outstanding at December 31, 2018	1,546,521	$	5.11
Granted	—		—
Exercised	—		—
Expired or Forfeited	(169,430)		5.59

Outstanding at September 30, 2019	1,377,091	$	6.32

The weighted average remaining contractual term for all options as of September 30, 2019 and December 31, 2018 was 6.3 years and 7.2 years, respectively.

As of September 30, 2019, there were 1,009,105 options that were fully-vested and exercisable at a weighted average exercise price of $4.75 per share. The weighted average remaining contractual term on the vested options is 5.6 years.

As of September 30, 2019, there were 367,986 unvested options exercisable at a weighted average exercise price of $5.88 per share. The weighted average remaining contractual term on the unvested options is 8.4 years.

The weighted average fair value of option grants was calculated using the Black-Scholes-Merton option pricing method. At September 30, 2019, the Company had approximately $1,850,000 of unrecognized stock compensation expense, which will be recognized over a weighted average period of approximately 2.4 years.

During the three and nine months ended September 30, 2019, the Company issued 45,000 shares of common stock to its independent board members as part of their annual retainer for services covering the period of July 2019 to June 2020. The fair market value on the date of award of the stock issued was $3.71, resulting in an aggregate fair value of approximately $167,000. The fair market value of these awards is expensed over twelve (12) months. As of September 30, 2019, there was approximately $125,000 of unrecognized expense related to these stock awards.

For the three months ended September 30, 2019 and 2018, the Company recorded total stock-based compensation expense, including stock awards, of approximately $330,000 and $807,000, respectively. For the nine months ended September 30, 2019 and 2018, the Company recorded total stock-based compensation expense, including stock awards, of approximately $1,202,000 and $1,740,000, respectively.