STOCK-BASED COMPENSATION

6 Months Ended

Mar. 31, 2019

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

The Company’s 2008 Stock Option Plan (“the Plan”) was used to promote our long-term interests by providing a means of attracting and retaining officers, directors and key employees and aligning their interests with those of our shareholders. The Plan is described more fully in Note 9 in the Notes to the Consolidated Financial Statements in our Form 10-K for the fiscal year ended September 30, 2018. In March 2018, our shareholders approved the amendment and restatement of the Plan in the form of the Amended and Restated 2018 Equity Incentive Plan (the “Equity Plan”) and the Company currently grants equity awards from the Equity Plan. The purpose of the Equity Plan is to promote our long-term interests by providing a means of attracting and retaining officers, directors and key employees. The maximum number of common shares that may be granted under the Equity Plan is 700 shares.

All options granted under the Plan and the Equity Plan had an exercise price equal to the fair market value of the underlying common shares on the date of grant. We expense the estimated fair value of stock options over the vesting periods of the grants. We recognize expense for awards subject to graded vesting using the straight-line attribution method, reduced for estimated forfeitures. Forfeitures are revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates and an adjustment is recognized at that time. Stock based compensation expense for the three and six months ended March 31, 2019 was $99 and $124, respectively. Stock based compensation expense for the three and six months ended March 31, 2018 was $34 and $68, respectively. The additional expense in the three months ending March 31, 2019 was due to the grants issued to our new Chief Executive Officer in January 2019 and option grants to all employees that were employed as of February 6, 2019.

A summary of our stock option activity for the six months ended March 31, 2019 is as follows (in thousands except for share prices):

	Options (shares)			Weighted- Average Exercise Price		Weighted- Average Grant Date Fair Value

Outstanding – September 30, 2018		301		$	1.73	$	1.38
Exercised		(1	)	$	1.40	$	1.15
Granted		403		$	1.41	$	1.04
Forfeited		(4	)	$	1.74	$	1.38
Outstanding - March 31, 2019		699		$	1.55	$	1.18

The weighted-average assumptions used to compute the fair value of the options granted in the six months ended March 31, 2019 were as follows:

Risk-free interest rate	2.58	%
Dividend yield	0.00	%
Volatility of the expected market price of the Company's common shares	72.0 %- 72.5	%
Expected life of the options (years)	8.0

As of March 31, 2019, our total unrecognized compensation cost related to non-vested stock options was $500 and is expected to be recognized over a weighted-average service period of 1.6 years.

A summary of our restricted share activity for the six months ended March 31, 2019 is as follows:

	Restricted Shares

Outstanding – September 30, 2018		-
Granted		45
Vested		(35	)
Forfeited		-
Outstanding - March 31, 2019		10

As of March 31, 2019, our total unrecognized compensation cost related to non-vested restricted stock was $12 and is expected to be recognized over a weighted-average service period of 1.79 years. The total fair value of the shares vested during the three and six months ended March 31, 2019 was $