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14. STOCK-BASED COMPENSATION | 6 Months Ended
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Mar. 31, 2024
Equity [Abstract] |
STOCK-BASED COMPENSATION | 14. STOCK-BASED COMPENSATION The Company sponsors a stock-based incentive compensation plan known as the 2017 Incentive Plan (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 March 31, 2024, prior to giving any effect to the evergreen provision that allows for the increase of shares on April 1, 2024, there were 10,016,167 shares available and authorized for issuance under the Plan. STOCK OPTIONS The following is a summary of stock option activity during the six months ended March 31, 2024:
|  | Number of Option Shares |  |  | Weighted Average Exercise Price ($) |
Balance, September 30, 2023 |  |  | 1,970,458 |  |  | $ | 14.86 |
Options granted |  |  | 90,000 |  |  | $ | 8.99 |
Options expired |  |  | (82,413 | ) |  | $ | 8.92 |
Options canceled/forfeited |  |  | (31,073 | ) |  | $ | 6.00 |
Options exercised |  |  | (71,612 | ) |  | $ | 7.56 |
Balance, March 31, 2024 |  |  | 1,875,360 |  |  | $ | 15.27 |
As of March 31, 2024, there were options exercisable to purchase 1,208,895 shares of common stock in the Company and 666,465 unvested options outstanding that cannot be exercised until vesting conditions are met. As of March 31, 2024, the outstanding options had a weighted average remaining term of 5.29 years and an intrinsic value of $12,784. For the six months ended March 31, 2024, the Company also granted 90,000 options to purchase shares of common stock to employees with a total fair value of $769. The Black-Scholes model utilized the following inputs to value the options granted during the six months ended March 31, 2024:
Fair value assumptions Options: |  | March 31, 2024 |
Risk free interest rate |  | 3.94% - 4.82% |
Expected term (years) |  | 5.77 - 6.16 |
Expected volatility |  | 122.05% - 176.02% |
Expected dividends |  |  | 0 | %
The Company recognized stock-based compensation expense relating to stock options of $3,620 and $3,145 for the six months ended March 31, 2024 and 2023, respectively. As of March 31, 2024, the Company expects to recognize $4,041 of stock-based compensation for the non-vested outstanding options over a weighted-average period of 2.1 years. RESTRICTED STOCK UNITS The Company grants restricted stock units ("RSU"s) 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. RSUs that contain market conditions will vest based on the terms of the agreement and generally are 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 the stock price on the grant date and the value of market-based RSUs were valued utilizing the Monte-Carlo valuation model. The expense is recognized ratably over the requisite service period. The following table summarizes the activity for all RSUs during the six months ended March 31, 2024:
|  | Number of Shares |  |  | Weighted Average Fair Value Per Share |  |  | Aggregate Intrinsic Value |
Outstanding at September 30, 2023 |  |  | 5,471,435 |  |  | $ | 4.18 |  |  | $ | 20,846 |
Granted |  |  | 209,972 |  |  |  | 3.81 |  |  |  |
Vested |  |  | (3,763,915 | ) |  |  | 3.86 |  |  |  |
Forfeited |  |  | (2,504 | ) |  |  | 4.15 |  |  |  |
Outstanding at March 31, 2024 |  |  | 1,914,988 |  |  | $ | 4.78 |  |  | $ | 40,617 |
On September 29, 2023, the Compensation Committee granted 3,460,000 market-based restricted stock units to senior leadership of the Company. A 33% tranche of the market-based awards vest based upon the Company's stock price reaching 200%, 300% and 400% of the stock price on the date of grant. The vesting of each tranche was dependent 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 is approximately $13,160. In December 2023, the Company's stock price reached the 200% target and 33% of the grant was vested and shares settled. In February 2024, the Company's stock reached both 300% and 400% of the target stock price for a period greater than 10 of 20 consecutive days and the remaining market-based awards vested. Accordingly, the Company recognized the entire $13,160 in stock compensation through March 2024 and all shares were settled as of March 31, 2024. On October 1, 2023, the Company granted 209,972 time-based RSUs to its board members as part of their annual compensation. These RSUs vest 25% each quarter-end and have a combined grant-date fair value of $800. The first vesting occurred on December 31, 2023, and 52,492 shares were settled and issued in January 2024. The second vesting occurred on March 31, 2024, and 52,492 shares were settled and issued in April 2024. As of March 31, 2024, the Company had 1,914,988 outstanding unvested time-based restricted stock awards. About 50% of the time-based awards will vest by September 2024 and the rest will vest in the Company's fourth fiscal quarter ending September 30, 2025. As of September 30, 2023, the Company had 196,435 performance-based awards that were unvested. In October 2023, 193,931 performance-based awards vested when the Company achieved its exahash target rate of 10.0. Additionally, 2,504 performance-based awards were forfeited in October 2023 due to termination. The Company recognized stock-based compensation expense relating to restricted stock units of $16,130 and $8,476 for the six months ended March 31, 2024 and 2023, respectively. As of March 31, 2024, the Company had $6,803 in unrecognized compensation costs related to all RSU awards that it expects to recognize over a weighted average period of 1.39 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 -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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