The Amended and Restated 2015 Equity Incentive Plan (“2015 Equity Plan”) expired on January 19, 2025, with awards relating to 4,918,238 shares of common stock remaining outstanding under such plan. The 2025 Equity Incentive Plan (“2025 Equity Plan” and, together with the 2015 Equity Plan, the “Equity Plans”) was adopted by the Company’s Board of Directors on January 27, 2025 and approved by the Company’s stockholders on March 17, 2025. The 2025 Equity Plan authorizes the issuance of stock options, restricted stock, stock appreciation rights, restricted stock units (“RSUs”) and performance awards up to an aggregate of 6,000,000 shares of common stock to employees, directors, advisors or consultants. As of September 30, 2025, there were options and restricted stock units outstanding covering 4,276,458 shares of common stock under the Equity Plans, and 5,686,184 shares of common stock available for grant, for a total of 9,962,642 shares of common stock authorized and unissued under the Equity Plans.

The Company’s stock options have various restrictions that reduce option value, including vesting provisions and restrictions on transfer and hedging, among others, and are often exercised prior to their contractual maturity. Share-based compensation is accounted for in accordance with ASC Topic 718: Compensation - Stock Compensation. Total compensation expense for all share-based awards is based on the estimated fair market value of the equity instrument issued on the grant date. For share-based awards that vest based solely on a service condition, compensation expense is recognized on a straight-line basis over the total requisite service period for the entire award. For share-based awards that vest based on a market condition, compensation expense is recognized on a straight-line basis over the requisite service period of each separately vesting tranche. For share-based awards that vest based on a performance condition, compensation expense is recognized for the number of awards that are expected to vest based on the probable outcome of the performance condition. Compensation cost for these awards will be adjusted to reflect the number of awards that ultimately vest.

A summary of the activity in options to purchase the common stock of the Company as of September 30, 2025, is presented below:


	Number of Shares			Weighted Average Exercise Price
Outstanding September 30, 2024		3,695,740		$	2.84
Granted		1,063,250		$	2.76
Forfeited/expired		(732,393	)	$	3.47
Exercised		(27,481	)	$	1.77
Outstanding September 30, 2025		3,999,116		$	2.71
Exercisable September 30, 2025		1,530,276		$	2.98

The aggregate intrinsic value for options outstanding and options exercisable as of September 30, 2025 was $538 and $161, respectively. The aggregate intrinsic value represents the difference between the Company’s closing stock price on the last day of trading during the year, which was $2.45 per share, and the exercise price multiplied by the number of applicable options. The total value of stock options exercised during the year ended September 30, 2025, was $91 and no proceeds were received from these exercises. The total value of stock options exercised during the year ended September 30, 2024, was $300 and no proceeds were received from these exercises. The Company recognized $42 and $124 as a tax benefit in the income tax provision for the years ended September 30, 2025 and 2024, respectively.

The following table summarizes information about stock options outstanding as of September 30, 2025:


Range of Exercise Prices	Number Outstanding		Weighted Average Remaining Contractual Term		Weighted Average Exercise Price		Number Exercisable		Weighted Average Exercise Price
$1.70 - $1.70		707,876		5.16	$	1.70		211,765	$	1.70
$2.20 - $2.45		40,000		5.67	$	2.26		12,084	$	2.25
$2.59 - $2.59		701,750		6.18	$	2.59		—	$	—
$2.64 - $2.68		85,000		4.75	$	2.67		48,542	$	2.67
$2.69 - $2.69		1,000,000		4.02	$	2.69		200,000	$	2.69
$2.70 - $3.40		1,127,365		3.06	$	3.09		958,511	$	3.15
$3.46 - $6.87		337,125		5.30	$	3.95		99,374	$	4.90
		3,999,116		4.47	$	2.71		1,530,276	$	2.98

The Company recorded $993 and $626 of stock option compensation expense for employees, directors and consultants for the years ended September 30, 2025 and 2024, respectively.

As of September 30, 2025, there was approximately $1,497 of total unrecognized compensation costs related to outstanding stock options. This amount is expected to be recognized over a weighted average period of 1.4 years. To the extent the forfeiture rate is different from what the Company anticipated, share-based compensation related to these awards will be different from the Company’s expectations.

Stock options that do not contain market-based vesting conditions are valued using the Black-Scholes option pricing model. The weighted average estimated fair value of employee stock options granted, that vest without a market condition, during the years ended September 30, 2025 and 2024, was calculated with the following weighted average assumptions (annualized percentages):


	Years ended
	September 30,
	2025			2024
Volatility		60.8	%		58.0	%
Risk-free interest rate		4.1	%		4.2	%
Dividend yield		0.0	%		0.0	%
Expected term in years		3.7			4.2

Expected volatility is based on the historical volatility of the Company’s common stock over the period commensurate with the expected term of the options. The risk-free interest rate is based on rates published by the Federal Reserve Board. The contractual term of the options was seven years. The expected term of the Company’s stock options has been determined utilizing the “simplified” method for awards that qualify as “plain-vanilla”. The expected forfeiture rate is based on past experience and employee retention data. Forfeitures are estimated at the time of the grant and revised in subsequent periods if actual forfeitures differ from those estimates. Such revision adjustments to expense will be recorded as a cumulative adjustment in the period in which the estimate is changed. The Company did not pay a dividend in Fiscal 2025 or Fiscal 2024.

For stock options that contain market-based vesting conditions, the fair value of these options was determined using a Monte Carlo valuation approach. A Monte Carlo simulation is used to model the probability of different outcomes in a process that cannot easily be predicted due to the intervention of random variables. It is a technique used to understand the impact of risk and uncertainty and establishes a fair value based on the most likely outcome.

On October 8, 2022, the Company awarded additional performance-based stock options (“PVOs”) to purchase 800,000 shares of the Company’s common stock to a key executive, with a contractual term of seven years. Vesting is based upon the achievement of certain performance criteria for each of Fiscal 2025 and 2026, and amended for combined Fiscal 2025 and 2026, including a minimum free cash flow margin and net revenue targets. Additionally, vesting is subject to the executive being employed by the Company at the time the Company achieves such financial targets. The Company did not record compensation expense related to these options for the year ended September 30, 2025 and 2024.

On March 20, 2023, the Company granted PVOs to purchase up to 450,000 shares of the Company’s stock to a key member of management with a contractual term of seven years. Vesting is based upon the achievement of certain performance criteria for each of the first three twelve-month periods following the employee’s start date, including targets related to growth in the institutional ownership of the Company’s common stock and growth in the trading volume of the Company’s common stock during such periods. Additionally, vesting is subject to the employee being employed by the Company on each of the first three anniversaries of the employee’s start date. 225,000 of these options contain a market-based vesting condition and accounting principles do not require the market condition to be achieved in order for compensation expense to be recognized. The Company recorded $10 of compensation expense related to these options during the year ended September 30, 2025. The Company recorded $130 of compensation expense related to these options during the year ended September 30, 2024. This key member of management is no longer employed by the Company as of September 30, 2025, thus unvested PVOs are forfeited.

The Company did not grant any PVOs during the year ended September 30, 2025. As of September 30, 2025, there was no unrecognized compensation related to PVOs.

A summary of restricted stock units of the Company as of September 30, 2025, is presented below:


	Number of Shares			Weighted Average Grant Date Fair Value
Outstanding September 30, 2024		288,059		$	2.78
Granted		253,816		$	2.35
Vested		(237,867	)	$	2.56
Forfeited/cancelled		(26,666	)	$	2.28
Outstanding September 30, 2025		277,342		$	2.62

Compensation expense for RSUs was $660 for the year ended September 30, 2025. Compensation expense for RSUs was $896 for the year ended September 30, 2024. As of September 30, 2025, there was approximately $318 of total unrecognized compensation costs related to outstanding RSUs. This amount is expected to be recognized over a weighted average period of 0.5 years.

The Company recorded share-based compensation expense for restricted stock units and stock options are classified in the consolidated statements of operations as follows:


	Years ended
	September 30,
	2025		2024
Cost of revenues	$	75	$	67
Selling, general and administrative		1,418		1,378
Research and development		170		207
	$	1,663	$	1,652