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Share-Based Compensation | 12 Months Ended
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Sep. 30, 2021
Share-Based Compensation |
Share-Based Compensation | 12. Share-Based Compensation ​ The Company accounts for share-based compensation under the provisions of ASC Topic 718 by using the fair value method for expensing stock options and stock awards. ​ Total share-based compensation expense was approximately $341,000, $177,000, and $173,000 for the fiscal years ended September 30, 2021, 2020 and 2019, respectively. The income tax impact recognized as a credit to additional paid in capital in the statement of shareholders’ equity related to share-based compensation arrangements was approximately $181,000, $17,000 and $0 for the fiscal years ended September 30, 2021, 2020 and 2019, respectively. Compensation expense related to share-based awards is recorded as a component of selling, general and administrative expenses. ​ The Company has two share-based compensation plans: (1) the 2009 Stock-Based Incentive Compensation Plan (the “2009 Plan”), which terminated with respect to the grant of any new awards on January 20, 2019, and (2) the 2019 Stock-Based Incentive Compensation Plan (the "2019 Plan"). The 2009 Plan and the 2019 Plan were approved by the shareholders on March 12, 2009 and April 2, 2019, respectively. ​ 2009 Stock-Based Incentive Compensation Plan ​ The 2009 Plan authorized the grant of stock appreciation rights, restricted stock, options, RSUs and other equity-based awards. Options granted under the 2009 Plan may be either “incentive stock options” as defined in section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), or nonqualified stock options, as determined by the Compensation Committee of the Company’s Board of Directors (the “Compensation Committee”). ​ Subject to an adjustment necessary upon a stock dividend, recapitalization, forward split or reverse split, reorganization, merger, consolidation, spin-off, combination, repurchase or share exchange, extraordinary or unusual cash distribution, or other similar corporate transaction or event, the maximum number of shares of common stock available for awards under the 2009 Plan was 1,200,000, all of which could be issued pursuant to awards of incentive stock options. In addition, the 2009 Plan provided that no more than 300,000 shares of common stock per year may be awarded to any employee as a performance-based award under Section 162(m) of the Code. The 2009 Plan terminated on January 20, 2019 with respect to the grant of any new awards. ​ If there is any change in the Company’s corporate capitalization, the Compensation Committee must proportionately and equitably adjust the number and type of shares of common stock covered by awards then outstanding under the 2009 Plan, the number and type of shares of common stock available under the 2009 Plan, the exercise or grant price of any award, or if deemed appropriate, make provision for a cash payment with respect to any outstanding award, provided that no adjustment may be made that would adversely affect the status of any award that is intended to be a performance-based award under Section 162(m) of the Code, unless otherwise determined by the Compensation Committee. In addition, the Compensation Committee may make adjustments in the terms and conditions of any awards, including any performance goals, in recognition of unusual or nonrecurring events affecting the Company or any subsidiary, or in response to changes in applicable laws, regulations or accounting principles, provided that no adjustment may be made that would adversely affect the status of any award that is intended to be a performance-based award under Section 162(m) of the Code, unless otherwise determined by the Compensation Committee. ​ Following is a summary of option activity under the 2009 Plan for the fiscal years ended September 30, 2021, 2020 and 2019, and changes during the periods then ended: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  |  |  | Weighted |  | ​ | ​
​ | ​ | ​ | ​ | Average | ​ | Aggregate
​ | ​ | ​ | ​ | Exercise | ​ | Intrinsic
​ | ​ | Options | ​ | Price | ​ | Value
Outstanding at September 30, 2018 |  | 550,834 | ​ | $ | 3.32 | ​ | $ | 15,000
Granted |  | — | ​ | ​ | — | ​ | ​ | —
Exercised |  | — | ​ | ​ | — | ​ | ​ | —
Cancelled |  | — | ​ | ​ | — | ​ | ​ | —
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Outstanding at September 30, 2019 |  | 550,834 | ​ | $ | 3.32 | ​ | $ | 761,767
Granted |  | — | ​ |  | — | ​ |  | —
Exercised |  | (546,334) | ​ | ​ | 3.31 | ​ | ​ | 1,926,782
Cancelled |  | ​ | ​ | ​ | ​ | ​ |  | —
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Outstanding at September 30, 2020 |  | 4,500 | ​ | $ | 3.78 | ​ | $ | 13,770
Granted |  | — | ​ |  | — | ​ |  | —
Exercised |  | (4,500) | ​ | ​ | 3.78 | ​ | ​ | 9,892
Cancelled |  | ​ | ​ | ​ | ​ | ​ |  | —
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Outstanding at September 30, 2021 |  | — | ​ | $ | — | ​ | $ | —
Vested and expected to vest |  | — | ​ | $ | — | ​ | $ | —
Options exercisable at September 30, 2021 |  | — | ​ | $ | — | ​ | $ | —
​ The following table summarizes information about stock options under the 2009 Plan at September 30, 2021: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Options Outstanding | ​ | Options Exercisable
​ | ​ | Outstanding | ​ | Weighted- | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | As of | ​ | Average | ​ | Weighted- | ​ | ​ | ​ | Weighted-
Range of Exercise | ​ | September 30, | ​ | Remaining | ​ | Average | ​ | As of September | ​ | Average
Prices |  | 2021 |  | Contractual Life |  | Exercise Price |  | 30, 2021 |  | Exercise Price
$0.00 - $5.00 |  | — |  | — | ​ | $ | — |  | — | ​ | $ | —
​ Fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model. Options are exercisable over a maximum term of ten years from date of grant and vest typically over periods of three to five years from the grant date. The expected term of options represents the period of time that options granted are expected to be outstanding and is based on historical experience and the expected turnover rate of the employees receiving the options. Expected volatility is based on historical volatility of the Company’s stock. The risk free interest rate is based on U.S. Treasuries with maturities consistent with the expected life of the options in effect at the time of grant. Compensation expense for employee stock options includes an estimate for forfeitures and is recognized ratably over the vesting term. ​ The Company did not grant any options under the 2009 Plan in fiscal years 2021, 2020 and 2019. ​ Total compensation expense associated with stock option awards to employees under the 2009 Plan was $0 for each of the fiscal years ended September 30, 2021, 2020 and 2019, respectively. ​ Total share-based compensation expense associated with the annual grant of stock awards to non-employee directors under the 2009 Plan was approximately $0, $0 and $173,000 for the fiscal years ended September 30, 2021, 2020 and 2019, respectively. ​ At September 30, 2021, no unrecognized compensation expense, net of forfeitures, related to non-vested stock options under the 2009 Plan, will be recognized. ​ 2019 Stock-Based Incentive Compensation Plan ​ The 2019 Plan authorizes the grant of stock appreciation rights, restricted stock, options and other equity-based awards. Options granted under the 2019 Plan may be either “incentive stock options” as defined in section 422 of the Code or nonqualified stock options, as determined by the Compensation Committee. ​ Subject to an adjustment necessary upon a stock dividend, recapitalization, forward split or reverse split, reorganization, merger, consolidation, spin-off, combination, repurchase or share exchange, extraordinary or unusual cash distribution, or similar corporate transaction or event, the maximum number of shares of common stock available for awards under the 2019 Plan is 750,000, plus 139,691 shares of common stock that were authorized but unissued under the 2009 Plan as of the effective date of the 2019 Plan (i.e., April 2, 2019), all of which may be issued pursuant to awards of incentive stock options. In addition, the 2019 Plan provides that no more than 300,000 shares may be awarded in any calendar year to any employee. On August 27, 2020, 100,000 stock options have been granted to Relland M. Winand, the Company’s Chief Financial Officer, under the 2019 Plan. As of September 30, 2021, there were 689,147 shares of common stock available for awards under the 2019 Plan. ​ If any award is forfeited, terminates or otherwise is settled for any reason without an actual distribution of shares to the participant, the related shares of common stock subject to such award will again be available for future grant. Any shares tendered by a participant in payment of the exercise price of an option or the tax liability with respect to an award (including, in any case, shares withheld from any such award) will not be available for future grant under the 2019 Plan. If there is any change in the Company’s corporate capitalization, the Compensation Committee must proportionately and equitably adjust the number and kind of shares of common stock which may be issued in connection with future awards, the number and kind of shares of common stock covered by awards then outstanding under the 2019 Plan, the aggregate number and kind of shares of common stock available under the 2019 Plan, any applicable individual limits on the number of shares of common stock available for awards under the 2019 Plan, the exercise or grant price of any award, or if deemed appropriate, make provision for a cash payment with respect to any outstanding award. In addition, the Compensation Committee may make adjustments in the terms and conditions of any awards, including any performance goals, in recognition of unusual or nonrecurring events affecting the Company or any subsidiary, or in response to changes in applicable laws, regulations, or accounting principles. ​ Following is a summary of option activity under the 2019 Plan for the fiscal year ended September 30, 2021, and changes during the periods then ended: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | ​ |  | Weighted |  | ​ | ​
​ | ​ | ​ | ​ | Average | ​ | Aggregate
​ | ​ | ​ | ​ | Exercise | ​ | Intrinsic
​ | ​ | Options | ​ | Price | ​ | Value
Outstanding at September 30, 2019 |  | — | ​ | $ | — | ​ | $ | —
Granted |  | 100,000 | ​ | ​ | 7.10 | ​ |  | —
Exercised |  | — | ​ | ​ | — | ​ |  | —
Cancelled |  | — | ​ | ​ | — | ​ |  | —
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Outstanding at September 30, 2020 |  | 100,000 | ​ | $ | 7.10 | ​ | $ | —
Granted |  | — | ​ | ​ | — | ​ |  | —
Exercised |  | — | ​ | ​ | — | ​ |  | —
Cancelled |  | ​ | ​ | ​ | ​ | ​ |  | —
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Outstanding at September 30, 2021 |  | 100,000 | ​ | $ | 7.10 | ​ | $ | —
Vested and expected to vest |  | 100,000 | ​ | $ | 7.10 | ​ | $ | —
Options exercisable at September 30, 2021 |  | 50,000 | ​ | $ | 7.10 | ​ | $ | —
​ The following table summarizes information about stock options under the 2019 Plan at September 30, 2021: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Options Outstanding | ​ | Options Exercisable
​ | ​ | Outstanding | ​ | Weighted- | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | As of | ​ | Average | ​ | Weighted- | ​ | ​ | ​ | Weighted-
Range of Exercise | ​ | September 30, | ​ | Remaining | ​ | Average | ​ | As of September | ​ | Average
Prices | ​ | 2020 | ​ | Contractual Life | ​ | Exercise Price | ​ | 30, 2020 | ​ | Exercise Price
$0.00 - $8.00 |  | 100,000 |  | 8.9 | ​ | $ | 7.10 |  | 50,000 | ​ | $ | 7.10
​ Fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model. Options are exercisable over a maximum term of ten years from date of grant and vest typically over periods of three to five years from the grant date. The expected term of options represents the period of time that options granted are expected to be outstanding and is based on historical experience and the expected turnover rate of the employees receiving the options. Expected volatility is based on historical volatility of the Company's stock. The risk free interest rate is based on U.S. Treasuries with maturities consistent with the expected life of the options in effect at the time of grant. Compensation expense for employee stock options includes an estimate for forfeitures and is recognized ratably over the vesting term. ​ Below are the fair value assumptions used to record compensation expense, related to the 2019 Plan, for the following periods identified: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Fiscal Year Ended September 30, |
​ |  | 2021 (1) |  | 2020 |  | 2019 (1) |
Expected dividend rate | ​ | — |  | — |  | — | ​
Expected volatility | ​ | — | % | 58.4 | % | — | %
Weighted average risk-free interest rate | ​ | — | % | 0.3 | % | — | %
Expected lives (years) | ​ | — |  | 5.5 |  | — | ​
(1)The Company did not grant any options in fiscal 2021 and 2019 ​ The Company granted 100,000 options in fiscal year 2020. ​ Total compensation expense associated with stock option awards to employees under the 2019 Plan was approximately $181,000, $17,000 and $0 for fiscal years ended September 30, 2021, 2020 and 2019, respectively. ​ Total share-based compensation expense associated with the annual grant of stock awards to non-employee directors under the 2019 Plan was approximately $160,000, $160,000 and $0 for the fiscal years ended September 30, 2021, 2020 and 2019, respectively. ​ At September 30, 2021, unrecognized compensation expense of approximately $164,013, net of forfeitures, related to non-vested stock options under the 2019 Plan, will be recognized.

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