4.	STOCK-BASED COMPENSATI ON

We have a restricted stock plan that was adopted by our Board of Directors in

January 2013

and approved by our stockholders in

June 2013.

The plan reserves up to

300,000

shares of our common stock for restricted stock awards to our executive officers, non-employee directors and other key employees. Awards granted under the plan

may

be stock awards or performance awards, and

may

be subject to a graded vesting schedule with a minimum vesting period of

four

years, unless otherwise determined by the committee that administers the plan. In

March 2019,

as part of their annual director compensation, certain of our non-employee directors were awarded restricted stock units totaling

28,191

units under this

2013

plan.

In addition, in

October 2018,

we granted (outside of the

2013

restricted stock plan) to Janet Carr, our Chief Executive Officer, a total of

644,000

restricted stock units, of which

460,000

vest over a period of

five

years from the grant date based on Ms. Carr’s continued employment in her role as CEO,

92,000

will vest if/when the Company’s operating income exceeds

$12

million dollars

two

fiscal years in a row, and

92,000

will vest if/when the Company’s operating income exceeds

$14

million dollars in

one

fiscal year.

A summary of the activity for non-vested restricted common stock awards as of

March 31, 2019

and

2018

is presented below:

	Shares			Award Fair Value
Balance, January 1, 2019		657,717		$	7.39
Granted		28,191		$	5.64
Forfeited		-			-
Vested		(1,408	)	$	7.72
Unvested Balance, March 31, 2019		684,500		$	7.32

Balance, January 1, 2018		36,801		$	8.03
Granted		-			-
Forfeited		-			-
Vested		(16,648	)		8.22
Unvested Balance, March 31, 2018		20,153		$	7.69

Restricted stock awards are valued at the fair market value of our common stock at the grant date of award. For service-based awards, we recognize compensation cost over the service period, assuming

forfeitures. For these service-based awards, our share-based compensation expense was

$185,825

and

$28,969

for the

three

month periods ended

March 31, 2019

and

2018,

respectively. For the performance-based awards that were granted to Ms. Carr,

compensation expense has been recorded.

As of

March 31, 2019,

there was unrecognized compensation cost related to non-vested, service-based restricted stock awards of

$3,291,258

which will be recognized in each of the following years:

2019	$	575,815
2020		764,732
2021		752,087
2022		688,713
2023		509,911