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16. STOCK-BASED COMPENSATION | 12 Months Ended
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Sep. 30, 2024
Equity [Abstract] |
STOCK-BASED COMPENSATION | 16. STOCK-BASED COMPENSATION The Company sponsors a stock-based incentive compensation plan known as the 2017 Incentive Plan, as amended, (the “Plan”), with an evergreen provision that allows for the increase of the maximum number of shares of common stock available under the Plan to fifteen percent (15%) of the Company's outstanding shares of common stock. As of September 30, 2024, prior to giving any effect to the evergreen provision that allows for the increase of shares on October 1, 2024, there were 8,300,575 shares available and authorized for issuance under the Plan. Although the Board is authorized to increase the number of shares in the Plan up to 15% of the Company’s outstanding common shares, as of September 30, 2024 it has not authorized any increased in Plan shares since the Company filed its latest Registration Form on Form S-8 on December 8, 2023. The Company grant ed 174, 24,482 and 89,445 n on-qualified options pursuant to the Plan during the fiscal years ended September 30, 2024, 2023 and 2022, respectively. The Company recognized $29,555, $24,142 and $31,466 for the fiscal years ended September 30, 2024, 2023 and 2022, respectively, in stock-based compensation. STOCK OPTIONS The following is a summary of stock option activity during the fiscal years ended September 30, 2024, 2023 and 2022:
|  | Number of Option Shares |  |  | Weighted Average Exercise Price ($) |
Balance, September 30, 2021 |  |  | 1,547,029 |  |  | $ | 18.35 |
Options granted |  |  | 215,750 |  |  | $ | 14.47 |
Options expired |  |  | — |  |  | $ | - |
Options canceled/forfeited |  |  | (238,418 | ) |  | $ | 15.40 |
Options exercised |  |  | (105,423 | ) |  | $ | 7.43 |
Balance, September 30, 2022 |  |  | 1,418,938 |  |  | $ | 19.11 |
Options granted |  |  | 789,750 |  |  | $ | 5.72 |
Options expired |  |  | (44,600 | ) |  | $ | 6.05 |
Options canceled/forfeited |  |  | (193,630 | ) |  | $ | 10.77 |
Options exercised |  |  | — |  |  | $ | - |
Balance, September 30, 2023 |  |  | 1,970,458 |  |  | $ | 14.86 |
Options granted |  |  | 611,823 |  |  | $ | 14.70 |
Options expired |  |  | (93,057 | ) |  | $ | 9.38 |
Options forfeited |  |  | (97,246 | ) |  | $ | 8.71 |
Options exercised |  |  | (106,516 | ) |  | $ | 7.07 |
Balance, September 30, 2024 |  |  | 2,285,462 |  |  | $ | 15.58 |
As of September 30, 2024, there were options exercisable to purchase 1,394,604 shares of common stock in the Company and 890,858 unvested options outstanding that cannot be exercised until vesting conditions are met. As of September 30, 2024, the outstanding options have a weighted average remaining term of 7.55 years and an aggregate intrinsic value of $2,453. Forfeitures of options are recognized as they occur. Option activity for the year ended September 30, 2024 During the year ended September 30, 2024, 106,516 stock options were exercised for net cash proceeds to the Company of $752. For the year ended September 30, 2024, the Company also granted 611,823 options to purchase shares of common stock to employees with a total fair value of $8,030. Option activity for the year ended September 30, 2023 During the year ended September 30, 2023, no stock options were exercised. For the year ended September 30, 2023, the Company also granted 789,750 options to purchase shares of common stock to employees with a total fair value of $4,513. Option activity for the year ended September 30, 2022 During the year ended September 30, 2022, a total of 105,423 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 $817. For the year ended September 30, 2022, the Company also granted to employees 215,750 options with a total fair value of $3,121 to purchase shares of common stock. Fair value for stock options is determined using the Black-Scholes option model. The Black-Scholes model utilized the following inputs to value the options granted during years ended September 30, 2024, 2023 and 2022:
|  | For the year ended September 30,
Fair value assumptions Options: |  | 2024 |  | 2023 |  | 2022
Risk free interest rate |  | 3.46% - 4.82% |  | 2.65% - 4.44% |  | 1.04% - 3.65%
Expected term (years) |  | 5.8 - 6.2 |  | 5.06 - 5.85 |  | 4.99 - 7.35
Expected volatility |  | 122.1% - 176.0% |  | 157.1% - 194.9% |  | 187.2% - 533.0%
Expected dividends |  | 0% |  | 0% |  | 0%
As of September 30, 2024, the Company expects to recognize $8,503 of stock-based compensation for the non-vested outstanding options over a weighted-average period of 2.39 years. RESTRICTED STOCK UNITS The Company grants RSUs that contain either a) service conditions, b) performance conditions, or c) market performance conditions. RSUs containing service conditions vest monthly, quarterly 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 and may also include a service condition. RSUs that contain market conditions will vest based on the terms of the agreement and generally are either 1 year or over the employee's term of employment. The Company recognizes the expense equal to the total fair value of the RSUs on the grant date. The time-based RSUs granted were valued equal to the stock price on the grant date and the value of market-based and performance based RSUs were valued utilizing the Monte-Carlo valuation model. The expense is recognized ratably over the requisite service period and forfeitures are recognized as they occur. The following table summarizes the activity for all RSUs during the fiscal years ended September 30, 2024, 2023 and 2022:
|  | Number of Shares |  |  | Weighted Average Fair Value Per Share |  |  | Aggregate Intrinsic Value |
Outstanding at October 1, 2021 |  |  | 10,995 |  |  | $ | 27.73 |  |  | $ | — |
Granted |  |  | 7,306,250 |  |  |  | 7.18 |  |  |  |
Vested |  |  | (1,757,938 | ) |  |  | 13.37 |  |  |  |
Forfeited |  |  | (110,759 | ) |  |  | 15.27 |  |  |  |
Outstanding at September 30, 2022 |  |  | 5,448,548 |  |  | $ | 4.93 |  |  | $ | 17,326 |
Granted |  |  | 3,880,552 |  |  |  | 3.65 |  |  |  |
Vested |  |  | (3,813,617 | ) |  |  | 4.58 |  |  |  |
Cancelled |  |  | (40,000 | ) |  |  | - |  |  |  |
Forfeited |  |  | (4,048 | ) |  |  | 29.34 |  |  |  |
Outstanding at September 30, 2023 |  |  | 5,471,435 |  |  | $ | 4.18 |  |  | $ | 20,846 |
Granted |  |  | 1,493,556 |  |  |  | 9.67 |  |  |  |
Vested |  |  | (5,268,276 | ) |  |  | 4.66 |  |  |  |
Forfeited |  |  | (22,504 | ) |  |  | 5.81 |  |  |  |
Outstanding at September 30, 2024 |  |  | 1,674,211 |  |  | $ | 7.56 |  |  | $ | 12,649 |
During the year ended September 30, 2024, the Company granted 1,493,556 RSUs to employees, all of which were time-based RSUs. During the year ended September 30, 2023, the Company granted 3,880,552 RSUs, which consisted of 360,552 time-based RSUs and 60,000 performance-based RSUs (of which 40,000 market-based awards were exchanged and reflected in the table above as cancelled). Additionally, on September 29, 2023, the Compensation Committee granted 3,460,000 market-based restricted stock units to senior leadership of the Company. The market-based awards vest 33% each tranche based upon the Company's stock price reaching 200%, 300% and 400% of the stock price on the date of grant. Each tranche vested upon the target stock price being met for at least 10 of 20 consecutive trading days and the awards were not dependent on a defined service period. The total fair value of the award was approximately $13,160 and all the market-based awards were vested, expensed and issued through March 2024. During the year ended September 30, 2022, the Company granted 7,306,250 restricted stock awards. Certain of the awards were issued in the first quarter of fiscal year 2022 comprised of 120,000 service condition based awards, 146,250 that were performance condition-based awards, and 910,000 that were market condition-based awards. The market condition based RSUs consisted of 60,000 units that were perpetual in nature, and therefore, were given a derived service period of 5 years. The remaining 810,000 RSUs had a stated service period of 1 year. In the fourth quarter of fiscal year 2022, on September 12, 2022, the Compensation Committee granted additional grants as follows: (1) 2,565,000 service condition based RSUs which vest over a 3-year period beginning on the grant date; (2) 2,565,000 performance based RSUs, of which, 2,381,781 vested in fiscal year 2023; and (3) 760,000 restricted stock units, which vested in March 2023 when approved by our stockholders. The Compensation Committee also modified previously issued awards from the first quarter of fiscal year 2022 as follows: (1) granted immediate vesting of the 810,000 market based awards; and (2) modified the market condition based 60,000 units that were perpetual in nature, and 10,000 unvested service condition RSUs, which were replaced with (a) 120,000 service condition-based RSUs that vest over a 3-year period, and (b) 120,000 performance-based RSUs, of which $111,429 vested in fiscal year 2023. The fair value of the market based RSUs were determined using the Monte Carlo simulation and the inputs of market-based RSUs for each of the fiscal years in which market-based RSUs were issued were as follows:
Fair value assumptions - Market-based RSUs granted: |  | September 30, 2023 |  | September 30, 2022 |
Risk free interest rate |  | 4.59% |  | 0.14% - 1.26% |
Expected term (years) |  | 10.00 |  | 1.00 - 5.00 |
Expected volatility |  | 129.70% |  | 111.37% - 172.18% |
Cost of equity |  | 21.55% |  | 20.00% - 21.00% |
As of September 30, 2024, the Company had approximately $12,412 in unrecognized compensation cost related to restricted stock unit awards that will be recognized over a weighted average period of 2.22 years. The Company recognized stock-based compensation expenses related to restricted stock units, of $23,992, $17,720 and $23,661 for the fiscal years ended 2024, 2023 and 2022, respectively.

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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 -Topic 505 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/505/tableOfContent Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 718 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/718/tableOfContent + Details
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