Annual report pursuant to Section 13 and 15(d)

STOCKHOLDERS' DEFICIT (Tables)

v3.6.0.2
STOCKHOLDERS' DEFICIT (Tables)
 12 Months Ended
Sep. 30, 2016
Stockholders' Equity Note [Abstract]  
Schedule of stock-based compensation expense

Stock-based compensation expenses are generally recognized over the employees’ or service provider’s requisite service period, generally the vesting period of the award. Stock-based compensation expense included in the accompanying statements of operations for the year ended September 30, 2016 and 2015 is as follows:    

 

    September 30  
    2016     2015  
Research   $ 41,600     $ 41,600  
Product Development     47,900       52,300  
Sales and marketing     30,200       81,600  
General and administrative     638,700       66,200  
Total   $ 758,400     $ 241,700
Schedule of stock option activity

A summary of stock option activity is as follows: 

 

    Number of 
Shares		     Weighted
Average 
Exercise
Price		  
Outstanding at September 30, 2014     62,120     $ 168.00  
Granted     10,000       16.00  
Exercised     -       -  
Forfeited     (937 )     22.00  
Outstanding at September 30, 2015     71,183     $ 150.00  
Granted     152,250       5.95  
Exercised     -       -  
Forfeited     (313 )     3.60  
Outstanding at September 30, 2016     223,120     $ 50.98  
Schedule of the status of options outstanding

Following is a summary of the status of options outstanding at September 30, 2016:

  

Exercise
Price ($)		     Number
of Shares		     Expiration
Date		   Weighted Average
Exercise Price ($)		  
2012 Omnibus Incentive Compensation Plan          
$ 5.10       8,250     04/2026   $ 5.10  
  6.00       144,000     09/2026     6.00  
  11.00       8,750     08/2025     11.00  
  9.44       43,978     12/2022 – 01/2023     9.44  
  50.00       13,577     03/2023 – 01/2025     50.00  
  52.00       2,125     07/2024     52.00  
  600.00       216     03/2022     600.00  
2006 Stock Incentive Plan          
$ 1,800.00       25     11/2016   $ 1,800.00  
  2,400.00       144     03/2019 – 07/2020     2,400.00  
  2,820.00       51     03/2021     2,820.00  
  3,060.00       7     09/2018     3,060.00  
  3,300.00       1,325     03/2020     3,300.00  
  4,800.00       24     12/2017     4,800.00  
  5,340.00       162     09/2017     5,340.00  
  5,760.00       61     04/2018     5,760.00  
  6,540.00       425     08/2017     6,540.00  
$ Total       223,120     Average   $ 50.98  

 
Schedule of share-based compensation warrants

The warrant activity for the period starting October 1, 2014, through September 30, 2016, is described as follows:

 

    Number of
Shares		     Weighted
Average 
Exercise
Price		  
Outstanding at September 30, 2014     4,078     $ 614.00  
Granted     1,000       50.00  
Exercised     —       —  
Expired     (1,166 )     1,828.00  
Outstanding at September 30, 2015     3,912     $ 106.00  
Granted     604,000 (2)     10.00  
Exercised     —       —  
Expired     (752 )     200.00  
Forfeited     (600,000 )(2)     10.00  
Outstanding at September 30, 2016     7,160     $ 50.41  
Schedule of the status of warrants outstanding

Following is a summary of the status of warrants outstanding at September 30, 2016:

 

Exercise
Price		     Number
of Shares		     Expiration
Date		   Weighted Average
Exercise Price		  
$ 9.44       191     03/2018   $ 9.44  
  10.00       4,000 (1)   06/2021     10.00  
  50.00       1,161     03/2017 – 07/2017     50.00  
  55.00       1,620     06/2018 – 03/2019     55.00  
  200.00       104     12/2016 – 01/2017     200.00  
  1,800.00       84     07/2017     1,800.00  
$ Total       7,160         $ 50.41  

 

  (1) On June 10, 2016, we 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.

  

  (2) Pursuant to the Second Amended Note & Warrant Agreement, dated December 23, the Company issued an aggregate 600,000 warrants with same terms as the warrants mentioned in (1) above. On September 19, 2016, the Company entered into the Second Omnibus Amendment, with a majority of over 80% of the noteholders, thereby amending: (i) the Notes, (ii) the Second Amended Note and Warrant Agreement, as amended and (iii) the Warrants. Subsequently, the Company exercised the Mandatory Conversion on September 19, 2016, and, on September 21, 2016, (i) converted the entire outstanding principal balance of $6,000,000, plus accrued interest of $317,000 on all of the Notes into 1,263,406 shares of the Company's Common Stock at a conversion price of $5.00 per share and (ii) cancelled all 600,000 issued and outstanding warrants associated with the Notes. (refer to Note 3. Convertible Debt and Equity Financing).