DEF 14A of Genasys Inc., Jan 28, 2026

DEF 14A of Genasys Inc.

Filed Jan 28, 2026 · FY20250001193125-26-027311

Open on EDGAR

  1. ELECTION OF DIRECTORS

    ELECTION OF DIRECTORS

  2. Amended and Restated Cooperation Agreement with Nicoya

    Amended and Restated Cooperation Agreement with Nicoya On December 19, 2025, the Company entered into an Amended and Restated Cooperation Agreement (the “A&R Cooperation Agreement”) with Nicoya Capital LLC, Nicoya Fund LLC and Nicoya Genasys-SPV LLC (collectively, the “Investor Parties”), affiliates of Company director R. Rimmy Malhotra, which amended and restated the terms of the Cooperation Agreement, dated as of January 14, 2025, by and between the Company and the Investor Parties (the “Original Cooperation Agreement”). Mr. Malhotra initially joined the Board in accordance with the terms of the Original Cooperation Agreement. Under the A&R Cooperation Agreement, the Company agreed to, among other things, nominate Richard S. Danforth, Susan Lee Schmeiser, William H. Dodd, W. Craig Fugate and Mr. Malhotra for election to the Board at the Annual Meeting and to collaborate with the Investor Parties in good faith to identify a mutually acceptable nominee for membership on the Board to serve as a director and to be appointed as Chair of the Audit Committee of the Board, subject to securities laws and exchange rules. The A&R Cooperation Agreement also provides for Richard H. Osgood III and Mark Culhane to serve on the Company’s strategic advisory committee beginning with the date of the Annual Meeting, and for Mr. Malhotra to serve as interim Chair of the Audit Committee in the event a mutually acceptable director nominee is not identified and agreed upon prior to the filing of the Company’s quarterly report for the period ending June 30, 2026. Pursuant to the A&R Cooperation Agreement, the Investor Parties agreed to abide by certain standstill restrictions during the term of the A&R Cooperation Agreement. The A&R Cooperation Agreement also includes procedures regarding any replacement of Mr. Malhotra during the term of the agreement and a mutual non-disparagement provision. The A&R Cooperation Agreement will remain effective until the earlier of (a) the date that is 15 calendar days prior to the deadline set forth in the Company’s restated bylaws for the stockholder nomination of director candidates for election to the Board at the Company’s 2027 annual meeting of stockholders, (b) any material breach of the A&R Cooperation Agreement by the Investor Parties, Mr. Malhotra or any director appointed to replace Mr. Malhotra not being cured within five business days’ written notice by the Company to the Investor Parties; provided that the Company is not then in material breach of the A&R Cooperation Agreement, or (c) applicable at any time beginning with the Annual Meeting, five days after the resignation of Mr. Malhotra from the Board and simultaneous delivery by the Investor Parties to the Company of a written representation that the Investor Parties irrevocably waive their right to appoint a director to replace Mr. Malhotra. The foregoing is not a complete description of the A&R Cooperation Agreement. For a copy of such agreement, please see our Current Report on Form 8-K filed with the SEC on December 29, 2025.

  3. Director Nominees

    Director Nominees The Board currently consists of seven directors, Richard S. Danforth, Susan Lee Schmeiser, Richard H. Osgood III, Mark Culhane, William H. Dodd, W. Craig Fugate and R. Rimmy Malhotra. Each of the Company’s current directors was elected to our Board at the 2025 annual meeting of stockholders. The Board, upon recommendation by our Nominating and Corporate Governance Committee and in accordance with the A&R Cooperation Agreement, has nominated five directors for election to our Board – Messrs. Danforth, Dodd, Fugate and Malhotra and Ms. Schmeiser. The Board unanimously recommends a vote IN FAVOR of each of the Board’s nominees for director. Each director to be elected will hold office until the next annual meeting of stockholders and until his or her successor is elected and duly qualified, or until such director’s earlier death, resignation or removal. On January 26, 2026, consistent with the leadership structure reflected in the A&R Cooperation Agreement, the Board reduced the number of Board seats from seven to six, effective upon the occurrence of the Annual Meeting. We encourage our Board members to attend our Annual Meeting of stockholders. All nominees who were members of the Board at the time attended the 2025 Annual Meeting of stockholders virtually. The names of the nominees and certain information about them are set forth below. Such information includes their present positions, principal occupations and public company directorships held in the past five years as well as the specific experience, qualifications, attributes or skills of each nominee that led the Board to believe that, as of the date of this Proxy Statement, the nominee is qualified to serve on the Board. However, each member of the Board may have a variety of reasons for believing a particular person would be an appropriate Board member, and these views may differ from the views of other members of the Board.

  4. Director Nominees

    | Name | Age | Position and Offices | Director Since | | Richard S. Danforth | 66 | Chief Executive Officer and Director | 2017 | | William H. Dodd (1)(2) | 69 | Director | 2024 | | W. Craig Fugate (3) | 66 | Director | 2024 | | R. Rimmy Malhotra (1) | 50 | Director | 2025 | | Susan Lee Schmeiser (1)(3) | 49 | Director | 2021 |

  5. Director Nominees

    Member of Audit Committee (2) Member of Compensation Committee (3) Member of Nominating and Corporate Governance Committee Richard S. Danforth, age 66, was appointed Chief Executive Officer of the Company in August 2016. Mr. Danforth formed the strategic business consulting firm, RsD Aero, Ltd., in 2014, which provided consulting services for the Defense, Aerospace, Space and Transportation sectors, with an emphasis on M&A and Transatlantic trade. He served at DRS Technologies as Group President of DRS Integrated Defense Systems & Service (2013 – 2014); Chief Executive Officer, President and Board Member of DRS Defense Solutions (2008 – 2012); President, Command Control & Communication (2005 – 2008); President, Navy Electronics & Intelligence Systems (2004 – 2005); and Executive Vice President, Electronics Systems Group (2002 – 2004). He began his career at Raytheon in 1982 and held various manufacturing, quality assurance and program manager positions until 1996. Mr. Danforth was then appointed Vice President of Operations for Raytheon Aircraft Company (1996 – 2000). In 2000, he was named Senior Vice President of Raytheon Aircraft Company’s Commercial Aircraft Business division, where he led a staff of 370 sales, marketing and customer service personnel. Mr. Danforth holds a B.S. in Industrial Technology from the University of Massachusetts Lowell and a Masters in Engineering Management from Western New England College. Mr. Danforth’s extensive business experience with strategy, leadership and execution at large defense companies qualifies him to serve on our Board. William H. Dodd, age 69, has been a member of the Board since May 2024. Prior to co-founding Dodd and Chaaban Strategies LLC, a Sacramento based consulting firm, in September 2024, Mr. Dodd served in the California State Senate from December 2016 to December 2024. He finished his second term as Chair of the Government Organization Committee, and member of the Transportation Committee, Energy Utilities and Communications Committee, the Business Professions Committee, and the Insurance Committee. From November 2014 to November 2016, Mr. Dodd served in the California State Assembly. Mr. Dodd began public service in March 2000, serving on the Napa County Board of Supervisors until December 2014. Prior to his time in elected office, Mr. Dodd owned and operated a full-service water company and served as president of the water quality industry’s state and national trade associations. Mr. Dodd earned a B.S. in Business Administration from California State University, Chico. Mr. Dodd’s extensive government service and experience, and industry and business management background, qualify him to serve on our Board. W. Craig Fugate, age 66, has been a member of the Board since May 2024. Mr. Fugate is the founder and principal of Craig Fugate Consulting LLC, established in March 2017, which focuses on building national resilience and training the next generation of emergency management leaders across the public and private sectors. Prior to founding his consulting firm, Mr. Fugate served as Administrator of the Federal Emergency Management Agency (FEMA) from May 2009 to January 2017, where he led the agency and oversaw the federal government’s response to major disasters, including the Joplin and Moore tornadoes, Hurricane Sandy, Hurricane Matthew, and severe flooding in Louisiana. From October 2001 to May 2009, Mr. Fugate served as Director of the Florida Division of Emergency Management, leading the State Emergency Operations Center and coordinating Florida’s response to 11 declared disasters. He began his emergency management career as a volunteer firefighter, paramedic, and lieutenant with Alachua County Fire Rescue, and later served as Emergency Manager for Alachua County, Florida, from 1987 to 1997. Mr. Fugate also serves on the Board of Directors of PG&E Corporation and Pacific Gas and Electric Company. Mr. Fugate’s extensive local, state, and national leadership experience in emergency management and disaster response qualifies him to serve on our Board. R. Rimmy Malhotra, age 50, has been a member of the Board since January 2025. From 2013 to the present, Mr. Malhotra has served as the Managing Member and Portfolio Manager for Nicoya Fund LP, a private investment partnership. Previously, from 2008 to 2013 he served as portfolio manager of the Gratio Values Fund, a mutual fund registered under the Investment Act of 1940. Prior to this, he was an Investment Analyst at a New York based hedge fund. Since November 2019, Mr. Malhotra has been a member of the Board of Directors of Optex Systems Holdings, Inc. (NASDAQ: OPXS), is the Chair of its Nominating and Corporate Governance Committee, and sits on its Audit and Compensation Committees. Since January 2021 until August of 2024 when it merged with Horizon Kinetics, he served on the Board of Directors as lead independent director and was Chair of the Audit Committee for Scott’s Liquid Gold-Inc. (OTCBB: SLGD). Since April 2016, he has been a member of the Board of Directors of HireQuest, Inc. (NASDAQ: HQI), where he serves as Vice-Chairman of its board of directors, its lead independent director and sits on its Audit and Compensation Committees. In October of 2024, he was appointed to the board of FRMO (OTC: FRMO) where he serves as the Chair of the Audit Committee. He earned an MBA in Finance from The Wharton School and a Master’s degree in International Relations from the University of Pennsylvania where he was a Lauder Fellow. Mr. Malhotra holds undergraduate degrees in Computer Science and Economics from Johns Hopkins University. Mr. Malhotra’s experience with public equity, including his service on the boards of directors of multiple public companies, and his qualifications as a financial matters expert qualify him to serve on our Board. Susan Lee Schmeiser, age 49, has been a member of the Board since September 2021. Ms. Schmeiser has over 20 years of experience in digital marketing software, media, data analytics, and strategic partnerships. Prior to May 2023, Ms. Schmeiser served as Group President of Digital Marketing & Technology Solutions at Vericast, a MacAndrews & Forbes company, since November 2020. Prior to such position, from April 2020 to November 2020, Ms. Schmeiser served as Chief Product Officer and Senior Executive Vice President at Vericast. From 2017 to 2020, Ms. Schmeiser was Senior Vice President of Business Development and Strategy at Valassis, a leader in marketing technology and consumer engagement. From 2011 to 2017, Ms. Schmeiser served as the Vice President of Corporate Development and Strategy of MaxPoint Interactive, Inc., which was acquired by Valassis after going public in 2017. Ms. Schmeiser served as Vice President, Ad Sales Strategy at Univision from 2007 to 2011. She also held the role of Vice President at MTV Networks from 2004 to 2007. She began her career as a financial analyst in the Financial Sponsors Group of Morgan Stanley’s Investment Banking Division. Ms. Schmeiser earned a B.A. in Economics from New York University and an MBA. in General Management from Harvard Business School. Ms. Schmeiser’s leadership experience, and expertise in corporate development and strategy qualify her to serve on our Board.

  6. Board of Directors

    Board of Directors Our Board currently consists of seven directors: Richard S. Danforth, Susan Lee Schmeiser, Richard H. Osgood III, Mark Culhane, William H. Dodd, W. Craig Fugate and R. Rimmy Malhotra. During the fiscal year ended September 30, 2025, our Board held six meetings. All directors serving on the Board during the fiscal year ended September 30, 2025 attended at least 75% of the aggregate of the total number of the meetings of the Board and the total number of meetings held by all committees of the Board on which he or she served (in each case during the period in which he or she served).

  7. Information Regarding the Board Committees

    Information Regarding the Board Committees During the full fiscal year ended September 30, 2025, the Board had three standing committees: the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee. The current charters for the Audit Committee, the Compensation Committee, and the Nominating and Corporate Governance Committee can be found on our website at www.genasys.com.

  8. Evaluating Nominees for Director

    Evaluating Nominees for Director The Nominating and Corporate Governance Committee reviews candidates for director nominees in the context of the current composition of our Board, our operating requirements and the long-term interests of stockholders. In conducting this assessment, the Nominating and Corporate Governance Committee currently considers, among other factors, diversity, age, skills, experience, and such other factors as it deems appropriate given the current needs of the Board and the Company, to maintain a balance of knowledge, experience and capability. In the case of incumbent directors whose terms of office are set to expire, the Nominating and Corporate Governance Committee reviews such directors’ overall service to our company during their term, including the number of meetings attended, level of participation, quality of performance, and any other relationships and transactions that might impair such directors’ independence. In the case of new director candidates, the Nominating and Corporate Governance Committee also determines whether the nominee must be independent, which determination is based upon applicable NASDAQ Stock Market listing standards, applicable SEC rules and regulations and the advice of counsel, if necessary. The Nominating and Corporate Governance Committee intends to use a variety of means to compile a list of potential candidates, including recommendations from current Board members and executive officers and recommendations from stockholders. The Nominating and Corporate Governance Committee may also engage, if it deems appropriate, professional search firms and other advisors to assist it in identifying candidates for the Board. The Nominating and Corporate Governance Committee conducts any appropriate and necessary inquiries into the background and qualifications of possible candidates after considering the function and needs of our Board. The Nominating and Corporate Governance Committee meets to discuss and consider such candidates’ qualifications and then selects a nominee for recommendation to our Board by majority vote.

  9. Summary Compensation Table

    Summary Compensation Table The table below summarizes the total compensation paid or earned by our Chief Executive Officer and Chief Financial Officer for the fiscal years ended September 30, 2025 and 2024. We refer to each such person as a “named executive officer.”

  10. Summary Compensation Table

    | Name and Principal Position | Fiscal Year | Salary | Bonus | Stock Awards (1) | Option Awards (1) | All Other Compensation | Total | | Richard S. Danforth | 2025 | $476,822 | — | — | $290,620(2) | $15,368 | $782,810 | | Chief Executive Officer | 2024 | $437,091 | — | — | $592,605(2) | $14,454 | $1,044,150 | | Dennis D. Klahn | 2025 | $285,760 | — | — | $112,653(2) | $16,192 | $414,605 | | Chief Financial Officer & Secretary (3) | 2024 | $283,500 | — | — | $75,321(2) | $12,757 | $371,578 | | Cassandra Hernandez-Monteon | 2025 | $211,538 | — | — | $25,034(2) | $7,987 | $244,559 | | Chief Financial Officer & Secretary (4) | 2024 | $— | — | — | $— | $— | $— |

  11. Summary Compensation Table

    (1) The dollar amounts represent the fair value of the awards granted during each of the fiscal years presented in accordance with FASB ASC Topic 718. Assumptions used in the calculation of these amounts are included in the notes to our audited financial statements for the applicable fiscal year included in our Annual Report on Form 10-K with respect to such year. (2) Represents stock options subject to time vesting. (3) Mr. Klahn retired from his position as Chief Financial Officer effective July 1, 2025, but still provides consulting services to the Company as of the end of fiscal year 2025. (4) Ms. Hernandez-Monteon was appointed as interim Chief Financial Officer effective July 1, 2025 and was formally appointed Chief Financial Officer on December 24, 2025. No named executive officer received any form of non-cash compensation from us in the fiscal year ended September 30, 2025, or currently receives any such compensation, in excess of 10% of the total amount of annual salary and bonus reported for the named executive officer above. On December 24, 2025, the Board promoted Ms. Hernandez-Monteon to the position of Chief Financial Officer, Treasurer and Secretary, a role she had held on an interim basis since July 1, 2025. The Board also increased Ms. Hernandez-Monteon’s base salary to $275,000 and approved a bonus plan for fiscal year 2026 with payouts between 0% and 100% of her base salary. Ms. Hernandez-Monteon’s target cash bonus corresponds to 50% of her base salary. The performance objectives for the cash bonus consist of a revenue measure (weighted 33.33%), an adjusted EBITDA measure (weighted 33.33%), and a bookings measure (weighted 33.33%). A cash bonus is payable if (a) 85% of the target bookings measure is achieved or (b) 85% of target revenue is achieved or (c) 85% of target adjusted EBITDA is achieved (each of (a), (b) and (c), a “Cash Bonus Threshold”). Once a Cash Bonus Threshold has been met, a cash bonus corresponding to between $22,917 and $91,667 is payable with respect to the applicable measure, with $91,667 payable if the applicable measure is achieved at the 135%+-of-target level. The minimum cash bonus payable is $0 and the maximum cash bonus payable is $275,000. Ms. Hernandez-Monteon was furthermore granted, effective December 24, 2025, 70,000 restricted stock units (“RSUs”) under the Company’s 2025 Equity Incentive Plan, with 35,000 of such units subject to time-based vesting in three equal increments on the annual anniversaries of the grant date, and 35,000 of such units subject to performance-based vesting upon achievement of a revenue measure (weighted 33.33%), an ARR measure (weighted 33.33%) and a debt-repayment measure (weighted 33,33%), in each case subject to accelerated vesting upon a change of control. RSUs with respect to both the revenue measure and the ARR measure begin vesting once 85% of target revenue and 85% of the target ARR measure, respectively, have been attained. The minimum number of performance-based RSUs that can vest is 0 and the maximum number is 35,000. On January 26, 2026, the Compensation Committee and the Board approved the following compensation for Mr. Danforth for the Company’s 2026 fiscal year: A base salary of $490,000, a cash bonus plan based on the achievement of specified performance objectives, a grant of 200,000 RSUs under the Company’s 2025 Equity Incentive Plan subject to time-based vesting, and a grant of 200,000 RSUs under such plan subject to performance-based vesting. The RSUs subject to time-based vesting vest with respect to 67,000 shares on December 31, 2026 and with respect to 133,000 shares on December 31, 2027. Mr. Danforth’s target cash bonus corresponds to 100% of his base salary. The performance objectives for the cash bonus consist of a revenue measure (weighted 30%), an ARR measure (weighted 30%), and a debt-repayment measure (weighted 40%). A cash bonus is payable if (a) the debt-repayment measure is achieved or (b) 85% of target revenue is achieved or (c) 85% of the target ARR measure is achieved (each of (b) and (c), a “Cash Bonus Threshold”). Once the debt repayment measure has been met, a cash bonus of $196,000 is payable. Once a Cash Bonus Threshold has been met, a cash bonus corresponding to between $73,500 and $294,000 is payable with respect to the applicable measure, with $294,000 payable if the applicable measure is achieved at the 135%+-of-target level. The minimum cash bonus payable is $0 and the maximum cash bonus payable is $784,000. The performance objectives for the 200,000 performance-based RSUs consist of the same three performance objectives as for Mr. Danforth’s cash bonus, except that (i) the ARR measure is applied differently and (ii) no such RSUs vest until and unless all three performance objectives are met at specified levels. For any such RSUs to vest, the debt-repayment measure must be achieved, and each of the revenue and ARR measures must be achieved at the 95%-of-target level (such vesting condition, the “Performance RSU Vesting Threshold”). Once the Performance RSU Vesting Threshold has been met, 150,000 performance-based RSUs vest, with additional such RSUs vesting based on achievement percentages for the revenue and ARR measures between 95% and 100% of target. The minimum number of performance-based RSUs that can vest is 0, and the maximum number is 200,000. The shares underlying performance-based RSUs are earned on the day that the Company’s independent registered public accounting firm delivers its audit opinion with respect to the 2026 fiscal year. All time- and performance-based RSUs are subject to the change of control and severance provisions in Mr. Danforth’s employment agreement. In connection with the RSU grants, the Compensation Committee and the Board canceled performance-based options to purchase 800,000 shares granted to Mr. Danforth on October 8, 2022.

  12. Outstanding Equity Awards at Fiscal Year-End

    Outstanding Equity Awards at Fiscal Year-End The following table contains information regarding unexercised options for each named executive officer outstanding as of September 30, 2025.

  13. Outstanding Equity Awards at Fiscal Year-End

    | | Option Awards | | | | | | Stock Awards | | | | Grant | Number of Securities Underlying Unexercised Options (#) | Number of Securities Underlying Unexercised Options (#) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned | Option Exercise | Option Expiration | Number of Shares or Units of Stock That Have Not | Market Value of Shares or Units of Stock That Have Not | | Name | Date | Exercisable | Unexercisable | Options (#) | Price ($) | Date | Vested (#) | Vested ($) | | Richard S. Danforth | 10/4/2019 | 187,138 | —(1) | 212,862 | $3.39 | 10/4/2026 | — | — | | | 10/8/2022 | 200,000 | —(1) | — | $2.69 | 10/8/2029 | — | — | | | 10/8/2022 | — | 400,000(2) | — | $2.69 | 10/8/2029 | — | — | | | 10/8/2022 | — | 400,000(2) | — | $2.69 | 10/8/2029 | — | — | | | 8/19/2024 | 300,000 | 150,000(3) | — | $2.70 | 8/19/2031 | — | — | | | 10/3/2024 | — | 200,000(4) | — | $3.55 | 10/3/2031 | — | — | | Cassandra Hernandez-Monteon | 02/14/2023 | — | — | — | $— | — | 1,166 | 2,857(5) | | | 12/12/2023 | 6,667 | 13,333(6) | — | $1.70 | 12/12/2030 | — | — | | | 12/12/2024 | — | 20,000(7) | — | $2.59 | 12/12/2031 | — | — | | Dennis Klahn | 2/14/2023 | — | — | — | $— | — | 10,000 | 24,500(5) | | | 12/12/2023 | 30,000 | 60,000(6) | — | $1.70 | 12/12/2030 | — | — | | | 12/12/2024 | — | 90,000(7) | — | $2.59 | 12/12/2031 | — | — |

  14. Outstanding Equity Awards at Fiscal Year-End

    (1) The option is fully vested. (2) The number of shares that vest is based on the achievement of certain performance criteria as determined on September 30, 2026. These options were subsequently cancelled as of January 26, 2026. (3) The option vests as to 1/3 of the shares on September 30, 2024, and 1/3 of the shares on September 30, 2025 and 1/3 of the shares on September 30, 2026. (4) The option vests as to 1/2 of the shares on October 3, 2025, and 1/2 of the shares on October 3, 2026. (5) The restricted stock unit vests as to 1/3 of the shares on each anniversary of the date of grant of February 14, 2023, until fully vested. (6) The option vests as to 1/3 of the shares on each anniversary of the date of grant of December 12, 2023, until fully vested. (7) The option vests as to 1/3 of the shares on each anniversary of the date of grant of December 12, 2024, until fully vested.

  15. Potential Payments Upon Termination or Change-in-Control

    Potential Payments Upon Termination or Change-in-Control Mr. Danforth’s employment agreement provides for payments and other benefits upon certain termination and change in control events as described above in “Employment Agreements.” We also have a Change in Control Severance Benefit Plan, which is incorporated into Ms. Hernandez-Monteon’s employment agreement, under which, in the event of a qualifying termination, a participating executive will be entitled to receive (a) a lump sum payment equal to twenty-four months’ base salary (less applicable tax and other withholdings), (b) a lump sum payment equal to the officer’s target bonus for the year in which the officer is terminated, (c) continuation of health benefits for twenty-four months and (d) accelerated vesting of any unvested stock options and other securities or similar incentives held at the time of termination. A qualifying termination under the Change in Control Severance Benefit Plan is any involuntary termination without cause or any voluntary termination for good reason, in each case occurring within three months before or twelve months after a change of control of our Company.

  16. COMPENSATION OF DIRECTORS

    COMPENSATION OF DIRECTORS The following table shows all the fees earned or cash paid during the fiscal year ended September 30, 2025 to our non-employee directors. No option or restricted stock awards, long-term incentive plan payouts or other types of payments, other than the amount identified in the chart below, were paid to these directors during the fiscal year ended September 30, 2025.

  17. Director Compensation Fiscal Year 2025

    Director Compensation Fiscal Year 2025

  18. Director Compensation Fiscal Year 2025

    | Name | Fees Earned or Paid in Cash | Stock Awards(1) | Total | | Mark Culhane | $30,000(3) | $90,000 | $120,000 | | William Dodd | $30,000(3) | $90,000 | $120,000 | | Craig Fugate | $30,000(3) | $90,000 | $120,000 | | Richard H. Osgood III | $30,000(3) | $90,000 | $120,000 | | R. Rimmy Malhotra (2) | $21,250(3) | $103,350 | $124,600 | | Susan Lee Schmeiser | $30,000 | $90,000 | $120,000 |

  19. Director Compensation Fiscal Year 2025

    (1) Reflects the aggregate grant date fair value for shares of common stock and restricted stock units granted during the fiscal year ended September 30, 2025, computed in accordance with ASC 718, “Compensation-Stock Compensation.” Assumptions used in the calculation of these amounts are included in the notes to our audited financial statements for the fiscal year ended September 30, 2025, included in our Annual Report on Form 10-K filed with the SEC on December 15, 2025. (2) Mr. Malhotra joined the Board, effective January 15, 2025, and received a pro-rated initial RSU grant corresponding to 5,000 shares of common stock. (3) Includes $15,000 paid in shares of the Company’s common stock in lieu of quarterly installments of the annual cash retainer, described below, for the third and fourth quarters of fiscal year 2025. These shares are not included in the “Stock Awards” column. Each of our non-employee directors receives a grant of 38,136 restricted stock units annually on the date of our annual meeting of stockholders, subject to the overall director compensation limits set forth in the 2025 Equity Incentive Plan. Each of our non-employee directors also receives an annual cash retainer equal to $30,000, which is paid in equal quarterly installments and is prorated for partial year service. No additional amounts are payable for committee participation.

  20. PAY VERSUS PERFORMANCE

    PAY VERSUS PERFORMANCE The following table shows information about the relationship between compensation actually paid for our principal executive officer (PEO) and our non-PEO named executive officers (NEOs) and certain financial performance of the Company for the fiscal years ending September 30, 2025, September 2024 and September 30, 2023.

  21. PAY VERSUS PERFORMANCE

    | Year | Summary compensation table total for PEO (1) | Compensation actually paid to PEO (2) | Average summary compensation table total for non-PEO NEOs (3) | Average compensation actually paid to non-PEO NEOs (4) | Value of initial fixed $100 investment based on: Total shareholder return (5) | Net income (Loss) | | 2025 | $782,810 | $390,932 | $414,605 | $287,296 | $68.82 | $(18,112,000) | | 2024 | $1,044,150 | $1,235,962 | $371,578 | $535,768 | $177.11 | $(31,730,000) | | 2023 | $667,491 | $553,491 | $410,617 | $352,584 | $72.56 | $(18,396,000) |

  22. PAY VERSUS PERFORMANCE

    The dollar amounts reported are the amounts of total compensation reported for our PEO, Richard Danforth, in the Summary Compensation Table for fiscal years 2025, 2024 and 2023. The dollar amounts reported represent the amount of “compensation actually paid”, as computed in accordance with SEC rules. The dollar amounts reported are the amounts of total compensation reported for Mr. Danforth during the applicable year after adjusting for the fair value of stock options granted under our Amended and Restated 2015 Equity Incentive Plan. (3) The dollar amounts reported are the average of the total compensation reported for our NEO, other than our PEO, Dennis Klahn, who served as Chief Financial Officer for fiscal years 2025, 2024 and 2023. (4) The dollar amounts reported represent the amount of “compensation actually paid”, as computed in accordance with SEC rules. The dollar amounts reported are the amounts of total compensation reported for Mr. Klahn during the applicable year after adjusting for the fair value of restricted stock units granted under our Amended and Restated 2015 Equity Incentive Plan. (5) Total shareholder return is calculated as the difference between the price of our common stock at the end of each fiscal year, represented by the closing trading price as of that date, compared to the price of our common stock at the beginning of the measurement period, represented by the closing trading price as of the last day of our 2022 fiscal year. No dividends were declared or paid during either of the fiscal years presented.