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Share-Based Compensation | 12 Months Ended
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Sep. 30, 2022
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 $345,000, $341,000, and $177,000 for the fiscal years ended September 30, 2022, 2021 and 2020, 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 $166,617, $181,350 and $17,337 for the fiscal years ended September 30, 2022, 2021 and 2020, respectively. Compensation expense related to share-based awards is recorded as a component of selling, general and administrative expenses. ​ 2019 Stock-Based Incentive Compensation Plan ​ The 2019 Plan was approved by the Company’s shareholders at the Company’s Annual Meeting of Shareholders held on April 2, 2019. 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. As of September 30, 2022, there were 653,836 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, 2022, and changes during the periods then ended: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | ​ |  | Weighted |  | ​ | ​
​ | ​ | ​ | ​ | Average | ​ | Aggregate
​ | ​ | ​ | ​ | Exercise | ​ | Intrinsic
​ | ​ | Options | ​ | Price | ​ | Value
Outstanding at September 30, 2020 |  | 100,000 | ​ | $ | 7.10 | ​ | $ | —
Granted |  | — | ​ | ​ | — | ​ |  | —
Exercised |  | — | ​ | ​ | — | ​ |  | —
Cancelled |  | — | ​ | ​ | — | ​ |  | —
Outstanding at September 30, 2021 |  | 100,000 | ​ | $ | 7.10 | ​ | $ | —
Granted |  | — | ​ | ​ | — | ​ |  | —
Exercised |  | (42,416) | ​ | ​ | 8.26 | ​ |  | 64,896
Cancelled |  | — | ​ | ​ | — | ​ |  | —
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Outstanding at September 30, 2022 |  | 57,584 | ​ | $ | 7.10 | ​ | $ | 88,104
Vested and expected to vest |  | 57,584 | ​ | $ | 7.10 | ​ | $ | 88,104
Options exercisable at September 30, 2022 |  | 57,584 | ​ | $ | 7.10 | ​ | $ | 88,104
​ The following table summarizes information about stock options under the 2019 Plan at September 30, 2022: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Options Outstanding | ​ | Options Exercisable
​ | ​ | Outstanding | ​ | Weighted- | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | As of | ​ | Average | ​ | Weighted- | ​ | As of | ​ | Weighted-
Range of Exercise | ​ | September 30, | ​ | Remaining | ​ | Average | ​ | September 30, | ​ | Average
Prices |  | 2022 |  | Contractual Life |  | Exercise Price |  | 2022 |  | Exercise Price
$0.00 - $9.00 |  | 57,584 |  | 7.9 | ​ | $ | 7.10 |  | 57,584 | ​ | $ | 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, |
​ |  | 2022 (1) |  | 2021 (1) |  | 2020 |
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 2022 and 2021.
​ 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 $164,000, $181,000 and $17,000 for fiscal years ended September 30, 2022, 2021 and 2020, respectively. ​ At September 30, 2022, unrecognized compensation expense of $0, net of forfeitures, related to non-vested stock options under the 2019 Plan, will be recognized. ​ Restricted Stock Units ​ During fiscal 2021, the Company’s Board of Directors (the “Board”) approved grants of RSUs to the non-employee directors on the Board as compensation for their services during calendar year 2021. Under the terms of the awards, at the conclusion of the vesting period on January 3, 2022, the grants of RSUs were settled in shares of the Company’s common stock at a rate of one share of stock for each unit, provided that if a director resigns from the Board prior to January 1, 2022, such director shall only receive a pro rata portion of such award for time served. As of September 30, 2021, there were 25,396 unvested restricted stock units outstanding under the 2019 Plan, all of which were issued during the fiscal year ended September 30, 2022. As of September 30, 2022, there were 32,897 unvested restricted stock units outstanding under the 2019 Plan. ​
​ | ​ | ​ | ​ | ​ | ​
​ |  | Non-vested |  | Weighted Average
​ | ​ | Stock Awards | ​ | Share Price
Balance at September 30, 2020 |  | 27,488 | ​ | $ | 5.82
Granted |  | 25,396 | ​ |  | 6.30
Issued |  | (27,488) | ​ |  | 5.82
Cancelled |  | — | ​ |  | —
Balance at September 30, 2021 |  | 25,396 | ​ | $ | 6.30
Granted |  | 38,986 | ​ |  | 6.52
Issued |  | (27,425) | ​ |  | 6.32
Cancelled |  | (4,059) | ​ |  | 6.57
Balance at September 30, 2022 |  | 32,897 | ​ | $ | 6.51
​ Total share-based compensation expense associated with the annual grant of stock awards to non-employee directors under the 2019 Plan was approximately $178,000, $160,000 and $160,000 for the fiscal years ended September 30, 2022, 2021 and 2020, respectively. ​ Total share-based compensation expense associated with the annual grant of stock awards to employees under the 2019 Plan was approximately $3,000, $0 and $0 for the fiscal years ended September 30, 2022, 2021 and 2020, respectively. ​ At September 30, 2022, unrecognized compensation expense of $97,954, net of forfeitures, related to non-vested stock awards under the 2019 Plan, will be recognized.

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