NOTE 5 – SHAREHOLDERS’ EQUITY

The Company maintains the 2014 Equity Incentive Plan (the “2014 Equity Plan”), which was approved by shareholders in January 2014 and became effective on April 12, 2014. Executives, eligible employees, consultants and non-employee directors are eligible to receive options and stock grants pursuant to the 2014 Equity Plan. Pursuant to the 2014 Equity Plan, options to purchase shares of stock and stock awards can be granted with exercise prices, vesting conditions and other performance criteria determined by the Compensation Committee of the board of directors. The Company has reserved 1.6 million shares of common stock for issuance under the 2014 Equity Plan. The Company began awarding options and stock awards under the 2014 Equity Plan in January 2015. Prior to the effective date of the 2014 Equity Plan, the Company granted options and stock awards to eligible participants under its 2004 Incentive Plan (the “2004 Incentive Plan”), which expired on April 11, 2014. No additional awards may be granted pursuant to the 2004 Incentive Plan; however, awards outstanding as of April 11, 2014, will continue to vest and expire and may be exercised in accordance with the terms of the 2004 Incentive Plan.

The following table summarizes the combined stock option activity for the 2004 Incentive Plan and 2014 Equity Plan for the nine months ended May 31, 2020:

On September 25, 2019 and September 27, 2019 there were 80,000 and 50,000 stock options granted to employees and senior management, respectively. The weighted-average grant-date fair value of stock options granted were $4.21 and $4.16, respectively. These options vest evenly over three years from the date of the grant and expire no more than ten years from the date of the grant.

On January 15, 2020, the six non-employee Board members were each granted 2,000 unrestricted stock grants. The fair market value of the unrestricted shares for share-based compensation expensing is equal to the closing price of the Company's common stock on the date of grant of $12.45. Stock-based compensation expense includes $149,400 of expense related to these unrestricted stock grants for the  nine months ended May 31, 2020. These stock grants were fully expensed at the date of the grant because no vesting requirements exist for unrestricted stock grants.  There was no stock-based compensation expense related to unrestricted stock grants for the three months ended May 31, 2020 and 2019 and nine months ended May 31, 2019.

The following table summarizes the combined activity and value of non-vested options under the 2004 Equity Plan and 2014 Incentive Plan as of and for the nine months ended May 31, 2020:

All non-vested options are expected to vest.

Stock-based compensation expense was $81,900 and $96,100 for the three months ended May 31, 2020 and 2019, respectively. Stock-based compensation expense, including unrestricted stock grant expense, was $435,100 and $257,800 for the nine months ended May 31, 2020 and 2019, respectively.

At May 31, 2020, the Company had unrecognized compensation expenses totaling $543,000 relating to non-vested options that are expected to vest. The weighted-average period over which these options are expected to vest is approximately two years.