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Stock Compensation
 12 Months Ended
Dec. 31, 2019
Share-based Payment Arrangement [Abstract]  
STOCK COMPENSATION

NOTE 11 – STOCK COMPENSATION

 

The Company sponsors a stock-based incentive compensation plan known as the 2013 Equity Compensation Plan (the "Plan"), which was established by the Board of Directors of the Company in June 2013. A total of 500,000 shares were initially reserved for issuance under the Plan. The Plan was amended several times since then to eventually increase the authorized shares to 2,500,000 as of December 31, 2019. A total of 1,624,221 shares of common stock underlying options were outstanding at December 31, 2019. The Company had 236,614 remaining shares available to grant under the Plan at December 31, 2019.

 

The Plan allows the Company to grant incentive stock options, non-qualified stock options, stock appreciation rights, or restricted stock. The incentive stock options are exercisable for up to ten years, at an option price per share not less than the fair market value on the date the option is granted. The incentive stock options are limited to persons who are regular full-time employees of the Company at the date of the grant of the option. Non-qualified options may be granted to any person, including, but not limited to, employees, independent agents, consultants and attorneys, who the Company's Board or Compensation Committee believes have contributed, or will contribute, to the success of the Company. Non-qualified options may be issued at option prices of less than fair market value on the date of grant and may be exercisable for up to ten years from date of grant. The option vesting schedule for options granted is determined by the Compensation Committee of the Board of Directors at the time of the grant. The Plan provides for accelerated vesting of unvested options if there is a change in control, as defined in the Plan.

 

The compensation cost that has been charged against income related to options for the years ended December 31, 2019 and 2018, was $1,687,745 and $1,317,904, respectively. No income tax benefit was recognized in the income statement and no compensation was capitalized in any of the years presented.

 

The Company had the following option activity during the years ended December 31, 2019 and 2018:

 

   Number of Options   Weighted average exercise price   Weighted average remaining contractual life (years)   Aggregate intrinsic
value $		 
Outstanding, January 1, 2018   1,368,772   $3.12           
Granted – 2018   401,099   $9.27           
Exercised – 2018   (165,169)  $3.16           
Expired – 2018   (50,002)  $5.48           
Outstanding, December 31, 2018   1,554,700   $4.63    3.0      
Granted – 2019   410,134   $12.28           
Exercised – 2019   (251,063)  $3.73           
Expired – 2019   (89,550)  $12.55           
Outstanding, December 31, 2019   1,624,221   $6.27    2.6   $7,925,643 
Exercisable, December 31, 2019   1,143,637   $4.39    1.9   $7,197,053 

 

Of the options outstanding at December 31, 2019, 1,143,637 were exercisable with a weighted average contractual life of 1.9 years.

 

The table below shows the expiration date and exercise price of the options outstanding at December 31, 2019.

 

Number of Options     Exercise Price     Expiration Date
  175,799     $ 2.46     03/31/22
  41,668     $ 3.15     06/24/20
  210,520     $ 3.15     07/27/22
  470,000     $ 3.21     02/22/21
  105,836     $ 3.45     07/28/21
  100,006     $ 4.20     02/01/23
  8,336     $ 4.62     03/31/23
  8,336     $ 4.71     12/31/22
  8,000     $ 9.76     12/02/24
  139,000     $ 10.18     11/24/24
  8,336     $ 10.40     06/30/23
  11,800     $ 12.49     08/13/23
  6,000     $ 12.51     08/20/23
  10,000     $ 12.70     08/22/23
  15,000     $ 12.73     09/04/23
  14,084     $ 12.77     04/08/24
  30,500     $ 13.06     02/27/24
  16,000     $ 13.31     06/10/24
  40,000     $ 13.34     10/04/24
  29,000     $ 14.48     09/30/24
  16,000     $ 15.10     05/23/24
  12,000     $ 15.32     0715/24
  125,000     $ 15.40     10/16/23
  16,000     $ 15.51     05/30/24
  7,000     $ 16.24     10/22/23
                 
  Total 1,624,221     $ 6.27      

 

There is $1,612,382 of expense remaining to be recognized over a period of approximately 1.8 years related to options outstanding at December 31, 2019.

 

In 2019, the Company granted restricted stock awards of 50,000 shares, valued at $653,000, which would vest if the Company achieved certain 2019 revenue targets. The Company did not achieve those targets, so the awards expired unvested on December 31, 2019. The Company also granted a restricted stock award of 90,000 shares, valued at $938,700, and vesting over a period of 5 years. The Company recognized $125,160 expense related to this award in 2019 and $813,540 remains to be recognized at December 31, 2019 over a period of 4.3 years.

 

The Company also awarded 130,001 restricted stock awards, valued at $546,007, in 2018. These awards would vest only if the Company achieved certain stretch revenue goals in 2018 or 2019. It was determined that the goal was achieved as of December 31, 2018, so the entire expense was recognized in 2018, but the shares related to these awards were issued in 2019.