Share-based Compensation |
12 Months Ended |
|---|---|
Sep. 30, 2021 | |
| Share-based Compensation [Abstract] | |
| Share-based Compensation | Note 11 – Share-based Compensation We allocate share-based compensation expense to cost of sales, selling, general and administrative expense and research and development expense based on the award holder’s employment function. We recorded income tax benefits for share-based compensation expense of approximately $1.1 million and $599,000 in fiscal 2021 and 2020, respectively. For fiscal 2021 and 2020, we recorded share-based compensation expenses as follows: 2021 2020 Cost of sales$ 65,165 $ 52,267Selling, general and administrative 3,629,732 1,905,192Research and development 1,355,492 688,787 $ 5,050,389 $ 2,646,246 We have issued share-based awards to employees and non-executive directors under the Company’s approved equity plans. Upon the exercise of share-based awards, new shares are issued from authorized common stock. Equity Plans In March 2018, the Company’s stockholders approved the Company's 2018 Equity Incentive Plan (the “2018 Plan”). On March 24, 2020, the Company’s stockholders approved an increase in the number of shares that may be issued under the 2018 Plan to 11.0 million. As of September 30, 2021, 2,872,354 shares remain available for issuance under the 2018 Plan. In July 2017, the Company’s stockholders approved the Company's 2017 Equity Incentive Plan (the “2017 Plan”). A total of 4.7 million shares are authorized for issuance under the 2017 Plan. As of September 30, 2021, 18,433 shares remain available for issuance under the 2017 Plan. The 2017 Plan replaced the Company's 2008 Stock Incentive Plan (the “2008 Plan”), and no further awards will be made under the 2008 Plan. Stock Options Each option grants the holder the right to purchase from us one share of our common stock at a specified price, which is generally the closing price per share of our common stock on the date the option is issued. Options generally vest on a pro-rata basis on each anniversary of the issuance date within three years of the date the option is issued. Options may be exercised after they have vested and prior to the specified expiry date provided applicable exercise conditions are met, if any. The expiry date can be for periods of up to ten years from the date the option is issued. The fair value of each option is estimated on the date of grant using the Black-Scholes option pricing model based on the assumptions established at that time. The Company accounts for forfeitures as they occur and does not estimate forfeitures as of the option grant date. The following table outlines the weighted average assumptions for options granted during the years ended September 30, 2021 and 2020: 2021 2020Weighted Average Assumptions: Expected Volatility 69.68% 63.13%Expected Dividend Yield 0.00% 0.00%Risk-free Interest Rate 0.67% 1.63%Expected Term (in years) 5.9 5.9Fair Value of Options Granted$ 3.58 $ 1.14 During the years ended September 30, 2021 and 2020, the Company used historical volatility of our common stock over a period equal to the expected life of the options to estimate their fair value. The dividend yield assumption is based on the Company’s recent history and expectation of future dividend payouts on the common stock. The risk-free interest rate is based on the implied yield available on U.S. treasury zero-coupon issues with an equivalent remaining term. The following table summarizes the stock options outstanding and exercisable at September 30, 2021: Weighted Average Remaining Aggregate Number of Exercise Price Contractual Term Intrinsic Shares Per Share (years) Value Outstanding at September 30, 2020 8,599,000 $ 1.67 Granted 3,568,625 5.62 Exercised (1,112,102) 1.60 Forfeited (454,843) 5.78 Outstanding at September 30, 2021 10,600,680 $ 2.84 7.70 $ 64,473,535Exercisable at September 30, 2021 5,924,444 $ 1.65 6.83 $ 40,743,351 The aggregate intrinsic values in the table above are before income taxes and represent the number of in-the-money options outstanding or exercisable multiplied by the closing price per share of the Company’s common stock on the last trading day of the year ended September 30, 2021 of $8.53, less the respective weighted average exercise price per share at period end. The total intrinsic value of options exercised was approximately $9.2 million and $1.1 million during the years ended September 30, 2021 and 2020, respectively. Cash received from options exercised was $1.8 million and $415,000 in the years ended September 30, 2021 and 2020, respectively. During the year ended September 30, 2020, options to purchase 223,415 shares of common stock were exercised using the cashless exercise feature available under the 2017 Plan and 2018 Plan, which resulted in the issuance of 143,958 shares of common stock. There were no options exercised using the cashless exercise feature during the year ended September 30, 2021. As of September 30, 2021, the Company had unrecognized compensation expense of approximately $9.2 million related to unvested stock options. This expense is expected to be recognized over a weighted average period of 1.6 years. During fiscal 2021, the Company modified stock options held by certain optionees upon termination of their employment by the Company or resignation from the board of directors. As permitted under the 2018 Plan and with the approval of the Compensation Committee of the Board of Directors, the stock options were primarily modified to accelerate vesting or to allow for continued vesting. The aggregate amount of expense recognized in connection with these modifications for the year ended September 30, 2021 was approximately $550,000. Stock Appreciation Rights In fiscal 2017, the Company issued stock appreciation rights based on 50,000 shares of the Company’s common stock to an employee that vested on October 31, 2018. The stock appreciation rights have a ten-year term and an exercise price per share of $0.95. Upon exercise, the stock appreciation rights will be settled in common stock issued under the 2017 Plan. As of September 30, 2021 and 2020, vested stock appreciation rights based on 50,000 shares of common stock remain outstanding. |