We provide long-term incentives to eligible officers, directors, and employees in the form of equity-based awards. We maintain three equity incentive compensation plans, collectively described below as our “Equity Plans”:

We issue new shares of common stock to satisfy awards issued under our Equity Plans.

Stock Options

Most of our stock options vest and become exercisable over a four to five year period and have a contractual life of 10 years. Certain stock options awarded are intended to qualify as incentive stock options pursuant to Section 422A of the Internal Revenue Code.

The following table summarizes stock option activity under the Equity Plans for the fiscal year ended September 30, 2020:


				Weighted
		Weighted		Average	Aggregate
		Average		Remaining	Intrinsic
	Number of	Exercise		Contractual Life	*Value () (in**
	Shares	Price		(in years)	thousands)
Outstanding as of September 30, 2019	51,854	$	5.00
Granted	—		—
Exercised	(650)		2.89			—
Forfeited	(1,952)		4.65
Expired	(5,187)	$	4.25
Outstanding as of September 30, 2020	44,065	$	5.14	3.70	$	—
Exercisable as of September 30, 2020	41,877	$	5.18	3.61	$	—
Vested and expected to vest as of September 30, 2020	44,065	$	5.14	3.70	$	—

(*)	Intrinsic value for stock options represents the “in-the-money” portion or the positive variance between a stock option’s exercise price and the underlying stock price. For the fiscal year ended September 30, 2019, the intrinsic value of options exercised was $0.

As of September 30, 2020, there was approximately $2,700 of unrecognized stock-based compensation expense related to non-vested stock options granted under the Equity Plans which is expected to be recognized over an estimated weighted average life of 0.5 years.

Valuation Assumptions

There were no stock option grants for the fiscal years ended September 30, 2020 and 2019.

Time-Based Restricted Stock

Time-based restricted stock units (“RSUs”) and restricted stock awards (“RSAs”) granted to employees under the 2010 Plan, 2012 Plan or 2019 Plan typically vest over 3 to 4 years and are subject to forfeiture if employment terminates prior to the vesting or lapse of the restrictions, as applicable. RSUs are not considered issued or outstanding common stock until they vest. RSAs are considered issued and outstanding on the grant date and are subject to forfeiture if specified vesting conditions are not satisfied.

The following table summarizes the activity related to RSUs and RSAs subject to time-based vesting requirements for the fiscal year ended September 30, 2020:


	Restricted Stock Units			Restricted Stock Awards
	Number of	Weighted Average		Number of	Weighted Average
Restricted Stock Activity	Shares	Grant Date Fair Value		Shares	Grant Date Fair Value
Non-vested as of September 30, 2019	999,247	$	4.66	8,154	$	8.20
Granted	1,215,810	$	2.88	—	$	—
Vested	(471,208)	$	4.50	—	$	—
Forfeited	(195,804)	$	3.85	—	$	—
Non-vested as of September 30, 2020	1,548,045	$	3.41	8,154	$	8.20

As of September 30, 2020, there was approximately $4.0 million of remaining unamortized stock-based compensation expense associated with RSUs, which will be expensed over a weighted average remaining service period of approximately 2.6 years. The 1.5 million outstanding non-vested and expected to vest RSUs have an aggregate intrinsic value of approximately $5.0 million and a weighted average remaining contractual term of 2.6 years. For the fiscal years ended September 30, 2020, 2019, and 2018, the intrinsic value of RSUs vested was approximately $1.3 million, $1.4 million and $2.3 million, respectively. For the fiscal years ended September 30, 2019 and 2018, the weighted average grant date fair value of RSUs granted was $3.68 and $5.80 per share, respectively.

As of September 30, 2020, there was approximately $1,000 of remaining unamortized stock-based compensation expense associated with RSAs, which will be expensed over a weighted average remaining service period of approximately 0.1 years.

Performance Stock

Performance based restricted stock units (“PSUs”) and performance based shares of restricted stock (“PRSAs”) granted to employees under the 2012 Plan or 2019 Plan typically vest over 1 to 3 years and are subject to forfeiture in whole, if employment terminates, or in whole or in part, if specified vesting conditions are not satisfied, in each case prior to vesting. PSUs are not considered issued or outstanding common stock until they vest. PRSAs are considered issued and outstanding on the grant date and are subject to forfeiture if specified vesting conditions are not satisfied. PSUs and PRSAs that are granted to our executive officers and key employees are provided as long-term incentive compensation that is based on relative total shareholder return, which measures our performance against the Russell Microcap Index.

The following table summarizes the activity related to PSUs and PRSAs for the fiscal year ended September 30, 2020:


	Performance Stock Units			Performance Stock Awards
		Weighted			Weighted
	Number of Shares	Average Grant		Number of Shares	Average Grant
Performance Stock Activity	(at Target)	Date Fair Value		(at Target)	Date Fair Value
Non-vested as of September 30, 2019	471,824	$	7.03	33,333	$	12.25
Granted	496,000	$	3.81	—	$	0.00
Vested	—	$	0.00	—	$	0.00
Forfeited	(99,324)	$	10.55	(33,333)	$	12.25
Non-vested as of September 30, 2020	868,500	$	4.79	—	$	0.00

As of September 30, 2020, there was approximately $2.1 million of remaining unamortized stock-based compensation expense associated with PSUs, which will be expensed over a weighted average remaining service period of approximately 1.7 years. The 0.9 million outstanding non-vested and expected to vest PSUs have an aggregate intrinsic value of approximately $2.8 million and a weighted average remaining contractual term of 1.7 years. There were no PSUs vested for the fiscal year ended September 30, 2020. For the fiscal years ended September 30, 2019 and 2018, the intrinsic value of PSUs vested was approximately $0.2 million and $1.4 million, respectively. For the fiscal years ended September 30, 2019 and 2018, the weighted average grant date fair value of PSUs granted was $5.19 and $7.62, respectively.

As of September 30, 2020, there was no remaining unamortized stock-based compensation expense associated with PRSAs.

Stock-based compensation

The effect of recording stock-based compensation expense was as follows:


Stock-based Compensation Expense - by award type	For the Fiscal Years ended September 30,
(in thousands)	2020		2019		2018
Employee stock options	$	13	$	25	$	32
Restricted stock units and awards		1,755		1,495		1,742
Performance stock units and awards		1,243		685		1,343
Employee stock purchase plan		214		180		276
Outside director equity awards and fees in common stock		291		221		255
Total stock-based compensation expense	$	3,516	$	2,606	$	3,648


Stock-based Compensation Expense - by expense type	For the Fiscal Years ended September 30,
(in thousands)	2020		2019		2018
Cost of revenue	$	692	$	482	$	450
Selling, general, and administrative		2,155		1,478		2,584
Research and development		669		646		614
Total stock-based compensation expense	$	3,516	$	2,606	$	3,648

Stock-based compensation within selling, general and administrative expense was lower for the fiscal year ended September 30, 2019 due to the reversal of previously recognized expense associated with the forfeiture of unvested RSUs and PSUs of our former CFO.

Capital Stock

Our authorized capital stock consists of 50 million shares of common stock, no par value, and 5,882,352 shares of preferred stock, $0.0001 par value. As of September 30, 2020, we had 36.5 million and 29.6 million shares of common stock issued and outstanding, respectively. There were no shares of preferred stock issued or outstanding as of September 30, 2020 and 2019.

401(k) Plan

We have a savings plan that qualifies as a deferred salary arrangement under Section 401(k) of the Internal Revenue Code. Under this savings plan, participating employees may defer a portion of their pretax earnings, up to the Internal Revenue Service annual contribution limit. Since June 2015, all employer contributions are made in cash. Our matching contribution in cash for each of the fiscal years ended September 30, 2020, 2019 and 2018 was approximately $1.0 million, $0.6 million and $0.5 million, respectively.

Loss Per Share

The following table sets forth the computation of basic and diluted net loss per share:


Basic and Diluted Net Loss Per Share	For the Fiscal Years ended September 30,
(in thousands, except per share)	2020		2019		2018
Numerator:
Loss from operations	$	(7,000)	$	(35,984)	$	(17,453)
Undistributed earnings allocated to common shareholders for basic and diluted net income per share		(7,000)		(35,984)		(17,453)
Denominator:
Denominator for basic and fully diluted net loss per share - weighted average shares outstanding		29,136		27,983		27,266
Dilutive options outstanding, unvested stock units, unvested stock awards and ESPP		—		—		—
Denominator for diluted net loss per share - adjusted weighted average shares outstanding		29,136		27,983		27,266

Net loss per basic and fully diluted share	$	(0.24)	$	(1.29)	$	(0.64)

Weighted average antidilutive options, unvested restricted stock units and awards, unvested performance stock units and ESPP shares excluded from the computation		1,109		810		949

Average market price of common stock	$	3.03	$	3.91	$	5.87

For diluted loss income per share, the denominator includes all outstanding common shares and all potential dilutive common shares to be issued. The anti-dilutive stock options and unvested stock were excluded from the computation of diluted net loss per share for the fiscal years ended September 30, 2020, 2019 and 2018 due to the Company incurring a net loss for the period.

Employee Stock Purchase Plan

We maintain an Employee Stock Purchase Plan (“ESPP”) that provides employees an opportunity to purchase common stock through payroll deductions. The ESPP is a 6-month duration plan with new participation periods beginning on approximately February 25 and August 26 of each year. The purchase price is set at 85% of the average high and low market price of our common stock on either the first or last trading day of the participation period, whichever is lower, and annual contributions are limited to the lower of 10% of an employee’s compensation or $25,000.

Per the amended ESPP and after giving effect to the special dividend paid in July 2016, the total number of shares of common stock on which options may be granted under the ESPP were 3,515,574 shares. We issue new shares of common stock to satisfy the issuance of shares under this stock-based compensation plan. Common stock issued under the ESPP during the fiscal years ended September 30, 2020, 2019 and 2018 totaled approximately 231,000, 197,000 and 171,000 shares, respectively. As of September 30, 2020, the total amount of common stock issued under the ESPP totaled 3,203,100 shares and the total shares remaining available for issuance under the ESPP totaled 312,474.

Future Issuances

As of September 30, 2020, we had common stock reserved for the following future issuances:


		Number of Common
		Stock Shares Available for
Future Issuances		Future Issuances
Exercise of outstanding stock options		44,065
Unvested restricted stock units and awards		1,556,199
Unvested performance stock units and awards (at 200% maximum payout)		1,737,000
Purchases under the employee stock purchase plan		312,474
Issuance of stock-based awards under the Equity Plans		842,822
Purchases under the officer and director share purchase plan		88,741
Total reserved		4,581,301