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11. STOCK-BASED COMPENSATION | 9 Months Ended
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Jun. 30, 2022
Equity [Abstract] |
STOCK-BASED COMPENSATION | 11. STOCK-BASED COMPENSATION The Company sponsors a stock-based incentive compensation plan known as the 2017 Incentive Plan (the “Plan”), which was established by the Board of Directors of the Company on June 19, 2017. On October 7, 2020, the Company executed a first amendment to the Plan to increase its share pool from 300,000 to 1,500,000 shares of common stock. Effective September 15, 2021, following approval by our stockholders, the Plan was amended to (i) increase the number of shares of common stock authorized for issuance under the Plan by an additional 2,000,000 shares, resulting in an aggregate of 3,500,000 shares of common stock authorized for issuance under the Plan, and (ii) revise Section 19 of the Plan to more closely align with the provisions of Section 422 of the Internal Revenue Code of 1986, as amended, and Section 17.2 of the Plan. As of June 30, 2022, there were 450,854 shares available for issuance under the Plan. The Plan allows the Company to grant incentive stock options, non-qualified stock options, stock appreciation rights, common stock, units of common stock, restricted stock, performance shares and performance units. Other than incentive stock options that are granted to participants who owns more than 10% of the total combined voting power of all classes of the stock of the Company or of its parent or subsidiary corporations (a “Ten Percent Stockholder”), 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 or Ten Percent Stockholders at the date of the grant of the option. Non-qualified stock options and the other types of awards issuable under the Plan may be granted to any person, including, but not limited to, employees, independent agents, consultants and attorneys, who the Company’s Compensation Committee believes have contributed, or will contribute, to the success of the Company. The option vesting schedule for options granted is determined by the Compensation Committee 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 Company granted 64,000 non-qualified options pursuant to the Plan during the nine months ended June 30, 2022. The Company recognized $17,515,870 and $8,599,029 respectively for the nine months ended June 30, 2022 and June 30, 2021 in stock-based compensation under the Plan. STOCK OPTIONS The following is a summary of stock option activity during the nine months ended June 30, 2022:
|  | Number of Option Shares |  |  | Weighted Average Exercise Price ($) |
Balance, September 30, 2021 |  |  | 1,547,029 |  |  |  | 18.35 |
Options granted |  |  | 197,750 |  |  |  | 15.27 |
Options expired |  |  | - |  |  |  | - |
Options canceled/forfeited |  |  | (238,418 | ) |  |  | 15.40 |
Options exercised |  |  | (105,520 | ) |  |  | 7.43 |
Balance, June 30, 2022 |  |  | 1,400,841 |  |  | 19.28 |
As of June 30, 2022, there are options exercisable to purchase 666,043 shares of common stock in the Company and 734,798 unvested options outstanding that cannot be exercised until vesting conditions are met. As of June 30, 2022, the outstanding options have a weighted average remaining term of 1.48 years and no intrinsic value. During the nine months ended June 30, 2022, a total of 105,520 shares of the Company’s common stock were issued in connection with the exercise of common stock options at exercise prices ranging from $4.65 to $15.10, for net proceeds of $780,709. For the nine months ended June 30, 2022, the Company also granted 197,750 options with a total fair value of $2,980,668 to purchase shares of common stock to employees. The Black-Scholes model utilized the following inputs to value the options granted during the nin e months ended June 30, 2022:
Fair value assumptions Options: |  | June 30, 2022 |
Risk free interest rate |  | 0.10% - 2.93% |
Expected term (years) |  | 1.50 - 6.02 |
Expected volatility |  | 140% - 533% |
Expected dividends |  |  | 0 | %
As of June 30, 2022, the Company expects to recognize $11,291,763 of stock-based compensation for the non-vested outstanding options over a weighted-average period of 1.84 years. RESTRICTED STOCK UNITS The Company grants RSUs that contain (a) service conditions, (b) performance conditions, or (c) market performance conditions. RSUs containing service conditions vest monthly or annually. RSUs containing performance conditions generally vest over 1 year, and the number of shares earned depends on the achievement of predetermined Company metrics. When the criteria for vesting is met, the Company recognizes the expense equal to the total fair value of the common stock price on the grant date. All of the RSUs issued prior to September 30, 2021 were either vested or forfeited and cancelled. The following table summarizes the performance-based restricted stock units at the maximum award amounts based upon the respective performance share agreements. Actual shares that will vest depend on the attainment of the performance-based criteria.
|  | Number of Shares |  |  | Weighted Average Fair Value Per Share |  |  | Aggregate Intrinsic Value |
Outstanding at September 30, 2021 |  |  | 10,995 |  |  | $ | 11.59 |  |  | $ | 84,839 |
Granted |  |  | 1,106,250 |  |  |  | 14.68 |  |  |  | 4,336,500 |
Vested |  |  | (133,094 | ) |  |  | 20.31 |  |  |  | 2,703,336 |
Forfeited |  |  | (40,759 | ) |  |  | 20.48 |  |  |  | 145,369 |
Outstanding at June 30, 2022 |  |  | 943,392 |  |  | $ | 13.75 |  |  | $ | 3,698,097 |
During the nine months ended June 30, 2022, the Company granted 1,106,250 RSUs, which comprised of 90,000 that are service period based, 146,250 that are performance condition based, and 870,000 that are market condition based awards. The market condition based RSUs consist of 60,000 units that are perpetual in nature, and therefore, are given a derived service period of 5 years. The remaining 810,000 RSUs have a stated service period of 1 year. The fair value of the market based RSUs are determined using the Monte Carlo simulation and is in the following range: $11.03 - $17.89 per unit. The risk free rate, volatility, expected term, and cost of equity of these market based RSUs are as follows: 0.14-1.26%, 111.37-172.18%, 1-5 years, and 20.00-21.00%. As of June 30, 2022, the Company had $4,055,805 in unrecognized compensation costs related to RSU awards that it expects to recognize over a weighted average period of 0.52 years.

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- Definition The entire disclosure for shareholders' equity and share-based payment arrangement. Includes, but is not limited to, disclosure of policy and terms of share-based payment arrangement, deferred compensation arrangement, and employee stock purchase plan (ESPP). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -URI https://asc.fasb.org/topic&trid=2208762 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI https://asc.fasb.org/topic&trid=2228938 + Details
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