The Company grants stock-based awards under its Incentive Stock Plan (the Plan”) and the Stock Plan (the Plan”). The Plan replaced the Plan, but the plan remains in effect for the administration of awards made prior to its replacement by the Plan. The shares issued as a result of stock-based compensation transactions generally have been funded with the issuance of new shares of the Company’s common stock.

 

The Company grant the following types of incentive awards under the Plan: (i) non-qualified stock options; (ii) incentive stock options; (iii) stock appreciation rights; (iv) restricted stock; and (v) restricted stock units. Each award granted under the Plan is subject to an award agreement that incorporates, as applicable, the exercise price, the term of the award, the periods of restriction, the number of shares to which the award pertains, and such other terms and conditions as the plan committee determines. Awards granted under the Plan are classified as equity awards, which are recorded in stockholders’ equity in the Company’s Consolidated Balance Sheets.

 

The Company’s closing price on the date of grant is the basis of fair value of its common stock used in determining the value of share-based awards. To the extent the value of the Company’s share-based awards involves a measure of volatility, the Company historically relied on the volatilities from publicly-traded companies with similar business models as its common stock lacked enough trading history for it to utilize its own historical volatility. Effective the Company uses historical volatility of the Company’s common stock over a period of time corresponding to the expected stock option term. The Company uses the simplified method to calculate the expected term of stock option grants to employees as the Company does have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term of stock options granted to employees. Accordingly, the expected life of the options granted is based on the average of the vesting term, which is generally years and the contractual term, which is generally years. The Company will continue to evaluate the appropriateness of utilizing such method. The risk-free interest rate is based on United States Treasury yields in effect at the date of grant for periods corresponding to the expected stock option term.

 

 

The Company has computed the fair value of all options granted during the months ended and using the following assumptions:

 

			Nine Months Ended September 30,
			2019				2018
	Expected volatility		35%	to	55%			35%
	Expected dividends			None				None
	Expected term (years)			7				7
	Risk-free rate		1.89%	to	2.61%		2.53%	to	2.90%
	Forfeiture rate			20%				20%

 

The information below summarizes the stock options activity:

 

										Weighted
						Weighted				Average
						Average				Remaining
		Number of				Exercise				Contractual Life
		Shares				Price				(Years)
Outstanding at December 31, 2017			1,003,916			$	4.18				8.1
Granted			145,792				7.00
Exercised			(95,162	)			3.48
Cancelled			(67,855	)			3.37
Outstanding at December 31, 2018			986,691			$	4.72				6.8
Granted			65,759				12.31
Exercised			(99,132	)			5.32
Cancelled			-				-
Outstanding at September 30, 2019			953,318			$	5.19				6.8
Exercisable at September 30, 2019			557,588			$	4.48				6.1

 

The aggregate intrinsic value of the Company’s stock options outstanding and expected to vest was at

 

The aggregate intrinsic value of the Company’s stock options exercisable was at

 

For the and months ended stock-based compensation expense for stock options was and respectively.  For the and months ended stock-based compensation expense for stock options was and respectively. Unrecognized stock-based compensation expense for stock options as of was which is expected to be recognized ratably over the next years.

 

Restricted stocks granted to employees generally vest in equal annual installments. Restricted stocks granted to non-employee directors typically vest in full year after the date of grant.

 

The information below summaries the restricted stock activity:

 

	Restricted Stock Awards		Shares
	Non-vested at December 31, 2018			51,134
	Granted			26,131
	Vested			(38,289	)
	Cancelled			-
	Non-vested at September 30, 2019			38,976

 

For the and months ended stock-based compensation expense for restricted stock was and respectively. For the and months ended stock-based compensation expense for restricted stock was and respectively.

 

Unrecognized stock-based compensation expense for restricted stock awards as of was which is expected to be recognized ratably over the next years.