Quarterly report pursuant to Section 13 or 15(d)

STOCKHOLDERS' EQUITY (Tables)

v3.10.0.1
STOCKHOLDERS' EQUITY (Tables)
 9 Months Ended
Jun. 30, 2018
Equity [Abstract]  
Schedule of stock-based compensation expense

Stock-based compensation expense included in the accompanying unaudited condensed consolidated statements of operations for the three and nine months ended June 30, 2018 and 2017 is as follows:

  Three Months Ended June 30   Nine Months Ended June 30,
  2018   2017   2018   2017
Stock-based compensation expense by type of award:              
Stock options $ 531,800     $ 179,100     $ 834,900     $ 654,500  
Restricted stock 210,300     213,400     500,200     640,300  
Total stock-based compensation expenses $ 742,100     $ 392,500     $ 1,335,100     $ 1,294,800  
               
Stock-based compensation expense by line item:              
Research $ —     $ 2,200     $ —     $ 10,900  
Product development 96,600     85,100     96,700     275,500  
Sales and marketing —     23,500     100     70,400  
General and administrative 645,500     281,700     1,238,300     938,000  
Total $ 742,100     $ 392,500     $ 1,335,100     $ 1,294,800  
Schedule of unrecognized stock-based compensation expense

The following table sets forth the Company’s unrecognized stock-based compensation expense, net of estimated forfeitures, by type of award and the weighted-average period over which that expense is expected to be recognized:

 

    June 30,  
    2018     2017  
Type of Award:   Unrecognized
Expense, net
of estimated
forfeitures		     Weighted
average
Recognition
Period (in
years)		     Unrecognized
Expense, net
of estimated
forfeitures		    

Weighted

average
Recognition
Period (in
years)

  
Stock Options   $ 924,117       4.49     $ 416,700       0.95  
Restricted Stock   $ 186,600       0.49     $ 224,900       0.90  
Total   $ 1,110,717       3.58     $ 641,600       0.91  

 

* All unrestricted stock options are based on milestones so there is no weighted average recognition period.
Schedule of stock option activity

A summary of stock option activity is as follows:

  Number of
Shares		   Weighted
Average 
Exercise
Price		  

Weighted-

Average

Remaining

Contractual

Term (in years)

  

Intrinsic Value

 
Outstanding at September 30, 2017 554,083     $ 16.14     8.29   $ 11,340  
Granted 468,000     2.91     4.54   —  
Exercised (35,000 )   1.55     0   —  
Forfeited or expired (99,085 )   9.49     0    
Outstanding at June 30, 2018 888,059     $ 10.49     4.49   $ 20,250  
Schedule of status of restricted shares outstanding

Following is a summary of the restricted stock activity for the nine months ended June 30, 2018:

 

  Number of
Shares		   Weighted
Average 
Grant Date Fair Value
Outstanding at September 30, 2017 222,750     $ 5.31  
Granted 183,814     2.62  
Forfeited —     —  
Outstanding at June 30, 2018 406,564     $ 4.09  
Schedule of Black-Scholes option-pricing model

The range of Black-Scholes option-pricing model assumption inputs for all the valuation dates are in the table below:

  Three Months Ended          June 30, 2018 Nine Months Ended          June 30, 2018
  Low   High Low   High
Annual dividend yield — %   — % — %   — %
Expected life (years) 5.0   5.0 5.0   5.0
Risk-free interest rate 2.55 %   2.94 % 1.91 %   2.94 %
Expected volatility 190.38 %   201.36 % 190.38 %   210.69 %
Schedule of the status of warrants outstanding

Following is a summary of the status of warrants outstanding at June 30, 2018:

 

Exercise
Price		     Number
of Shares		     Expiration
Date		     Weighted Average
Exercise Price		  
                             
$ 2.34       1,050,000 (1)     03/2023     $ 2.34  
  5.25       2,539,061 (2)     07/2022       5.25  
  5.25       1,675,000 (3)     07/2022       5.25  
  5.25       213,800 (4)     07/2022       5.25  
  6.04       134,000 (5)     07/2022       6.04  
  10.00       4,000 (6)     06/2021       10.00  
$ 55.00       860       09/2018 – 03/2019       55.00  
  Total       5,616,721             $ 4.74  

 

  (1) On March 29, 2018, the Company sold an aggregate of 1,050,000 units for $2.00 per Unit each consisting of one share of newly-designated Series A Preferred Stock, and one warrant in a private placement to three affiliates of the Company, for gross proceeds of $2.1 million. The private placement closed on March 29, 2018. The closing price per share of the Common Stock on the Nasdaq Stock Market on March 29, 2018 was $1.19 per share. For more detail on the private placement, please refer to the “Private Placement of A Preferred Stock with Warrant” sections of Note 6. Stockholders’ Equity to the Condensed Consolidated Financial Statements.

 

  (2) On July 13, 2017, the Company declared a special dividend of warrants to purchase shares of the Company’s common stock to record holders of Common Stock as of such date. Warrants to purchase 2,539,061 shares of Common Stock were distributed pro rata to all holders of common stock on the record date. These warrants are exercisable (in accordance with their terms) to purchase one share of common stock, at an exercise price of $5.25 per share. The warrants will expire on July 26, 2022.

 

  (3) On July 19, 2017, the Company issued 1,675,000 shares of Common Stock and accompanying Warrants to purchase up to 1,675,000 shares of Common Stock in connection with an underwritten public offering.

 

  (4) On August 23, 2017, the Company issued 213,800 common stock warrants to underwriters as part of the overallotment attributed to the July 2017 underwritten public offering.

 

  (5) As part of the underwritten public offering on July 19, 2017, the Company issued 134,000 common stock warrants to the underwriters as part of the services performed by them in connection with the underwritten public offering.

 

  (6) On June 10, 2016, the Company issued two warrants, pursuant to a Finder’s Fee Agreement with Maxim Group LLC, to purchase in aggregate 4,000 shares of Common Stock following the introduction of an accredited investor who entered into a Second Amended Note and Warrant Purchase Agreement in the principal amount of $200,000. Each warrant is exercisable, in whole or in part, during the period beginning on the date of its issuance, and ending on the earlier of (i) December 31, 2020 and (ii) the date that is forty-five (45) days following the date on which the daily closing price of shares of the Company’s Common Stock quoted on the OTCQB Venture Marketplace (or other bulletin board or exchange on which the Company’s Common Stock is traded or listed) exceeds $50.00 for at least ten (10) consecutive trading days. In connection therewith, the Company will promptly notify the Note Warrant holders in the event that the daily closing price of the Company’s shares of Common Stock exceeds $50.00 for at least ten (10) consecutive trading days. Pursuant to the Finder’s Fee Agreement, Maxim was also paid $20,000 cash for their efforts.