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13. Stock-based Compensation
 12 Months Ended
Sep. 30, 2017
Share-based Compensation [Abstract]  
Stock-based Compensation

From time to time, the Company grants stock options and restricted stock awards to directors, officers and employees. These awards are valued at the grant date by determining the fair value of the instruments, net of estimated forfeitures. The value of each award is amortized on a straight-line basis over the requisite service period.

 

Stock Options

 

The following table summarizes stock option activity for the years ended September 30, 2017 and 2016:

 

       Weighted   Weighted     
       Average   Average     
   Number of   Exercise   Remaining     
   Shares   Price   Contractual Life   Intrinsic Value 
Outstanding at September 30, 2016   175,000   $11.22    3.75   $346,500 
Granted   36,668                
Exercised   –                
Forfeited   –                
Outstanding at September 30, 2017   211,668   $13.19    3.47   $454,417 
Exercisable at September 30, 2017   175,000   $11.22    2.75   $428,750 

 

The Company recognized compensation expense of $203,690 and $256,145 during the years ended September 30, 2017 and 2016, respectively, related to stock option awards granted to certain employees and officers based on the grant date fair value of the awards, net of estimated forfeitures.

 

At September 30, 2017 the Company had $361,627 of unrecognized compensation expense (net of estimated forfeitures) associated with stock option awards which the Company expects will be recognized through December of 2021.

  

The exercise price for stock options outstanding and exercisable at September 30, 2017 is as follows:

 

Outstanding   Exercisable 
Number of   Exercise   Number of   Exercise 
Options   Price   Options   Price 
 31,250   $5.00    31,250   $5.00 
 25,000    7.50    25,000    7.50 
 31,250    10.00    31,250    10.00 
 4,167    10.86           
 4,167    10.86           
 4,167    10.86           
 4,167    10.86           
 6,250    12.50    6,250    12.50 
 6,250    15.00    6,250    15.00 
 75,000    15.18    75,000    15.18 
 4,000    23.41           
 4,000    27.60           
 4,000    31.74           
 4,000    36.50           
 4,000    41.98           
 211,668         175,000      

 

The following table summarizes information about the Company’s non-vested shares as of September 30, 2017:

 

       Weighted 
       Average 
   Number of   Grant-Date 
Non-vested Shares  Shares   Fair Value 
Non-vested at September 30, 2016   6,250   $14.22 
Granted   36,668   $17.70 
Vested   (6,250)  $14.22 
Non-vested at September 30, 2017   36,668   $17.70 

 

For stock options granted during 2017 where the exercise price equaled the stock price at the date of the grant, the weighted-average fair value of such options was $8.41, and the weighted-average exercise price of such options was $10.86. For stock options granted during 2017 where the exercise price was above the stock price at the date of the grant, the weighted-average fair value of such options was $21.07, and the weighted-average exercise price for such options was $23.41. No options were granted during 2016, where the exercise price was less than the common stock price at the date of grant or where the exercise price was greater than the common stock price at the date of grant.

  

The assumptions used in calculating the fair value of stock options granted use the Black-Scholes option pricing model for options granted in 2017 are as follows:

 

Risk-free interest rate  1.25%
Expected life of the options  5.0 to 10 years
Expected volatility  107%
Expected dividend yield  0%