At the annual meeting held on May 27, 2021, stockholders of the Company approved the Bogota Financial Corp. 2021 Equity Incentive Plan ("2021 Plan"), which provides for the issuance of up to 902,602 shares (257,887 restricted stock awards and 644,718 stock options) of Bogota Financial Corp. common stock.

On September 2, 2021, 226,519 shares of restricted stock were awarded, with a grant date fair value of $10.45 per share. To fund the grant of restricted common stock, the Company issued shares from authorized but unissued shares. Restricted shares granted under the 2021 Plan vest in equal installments, over a service period of five years, beginning one year from the date of grant. Management recognizes compensation expense for the fair value of restricted shares on a straight line basis over the requisite service period. During the three months ended March 31, 2022, approximately $118,000 in expense was recognized in regard to these awards. There was no restricted stock expense recorded for the three months ended March 31, 2021. The expected future compensation expense related to the 226,519 non-vested restricted shares outstanding at March 31, 2022 was approximately $2.1 million over a weighted average period of 4.3 years.

The following is a summary of the Company's restricted stock activity during the three months ended March 31, 2022:


	Number of non-vested Restricted Shares		Weighted Average Grant Date Fair Value
Outstanding, January 1, 2022		226,519	$	10.45
Granted		—		—
Vested		—		—
Forfeited		—		—
Outstanding, March 31, 2022		226,519	$	10.45

On September 2, 2021, options to purchase 526,119 shares of Company common stock were awarded, with a grant date fair value of $4.37 per option. Stock options granted under the 2021 Plan vest in equal installments over a service period of five years beginning one year from the date of grant. Stock options were granted at an exercise price of $10.45, which represents the fair value of the Company's common stock price on the grant date based on the closing market price, and have an expiration period of 10 years.

The fair value of stock options granted was estimated utilizing the Black-Scholes option pricing model using the following assumptions: expected life of 6.5 years, risk-free rate of return of 0.904%, volatility of 41.10%, and a dividend yield of 0.00%.

The expected life of the options represents the period of time that stock options are expected to be outstanding and is estimated using the simplified approach, which assumes that all outstanding options will be exercised at the midpoint of the vesting date and full contractual term. The risk-free rate of return is based on the rates on the grant date of a U.S. Treasury Note with a term equal to the expected option life. Since the Company recently converted to a public Company and does not have sufficient historical price data, the expected volatility is based on the historical daily stock prices of a peer group of similar entities based on factors such as industry, stage of life cycle, size and financial leverage. The Company has not paid any cash dividends on its common stock.

Management recognizes expense for the fair value of these awards on a straight line basis over the requisite service period. During the three months ended March 31, 2022, approximately $115,000 in expense was recognized in regard to these awards. There was no stock option expense recorded for the three months ended March 31, 2021. The expected future compensation expense related to the 526,119 non-vested options outstanding at March 31, 2022 was $2.0 million over the vesting period of five years.

The following is a summary of the Company's option activity during the three months ended March 31, 2022:


	Number of Stock Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Outstanding, January 1, 2022	$	523,619	$	10.45		6.5	$	136,791
Granted		—
Exercised		—
Forfeited		—
Outstanding, March 31, 2022		523,619	$	10.45		6.2	$	136,791
Options exercisable at March 31, 2022	$	—					$	—

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value, the difference between the Company's closing stock price on the last trading day of the period and the exercise price, multiplied by the number of in-the-money options.