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C. STOCKHOLDERS EQUITY

3 Months Ended

Dec. 31, 2014

Stock options, stock bonuses and compensation granted by the Company as of December 31, 2014 are as follows:

Name of Plan	Total Shares Reserved Under Plans		Shares Reserved for Outstanding Options		Shares Issued as Stock Bonus		Remaining Options/Shares Under Plans

Incentive Stock Options Plans		1,960,000		1,710,997		N/A		3,303
Non-Qualified Stock Option Plans		5,680,000		5,023,652		N/A		99,429
Stock Bonus Plans		1,594,000		N/A		1,162,612		430,632
Stock Compensation Plan		1,350,000		N/A		1,316,949		33,051
Incentive Stock Bonus Plan		16,000,000		N/A		15,700,000		300,000

There were 1,000 and zero options granted to employees and directors during the three months ended December 31, 2014 and 2013, respectively. There were 97,500 and zero options forfeited by employees and directors during the three months ended December 31, 2014 and 2013, respectively.

Stock-Based Compensation Expense

	Three Months Ended December 31,
	2014		2013
Employees	$	3,059,791	$	510,278
Non-employees	$	189,144	$	214,720

During the three months ended December 31, 2014, employee compensation expense included options issued or vested and restricted stock. During the three months ended December 31, 2014 and 2013, non-employee compensation expense excluded $32,857 and $55,362, respectively, for future services to be performed.

Derivative Liabilities, Warrants and Other Options

Below is a chart showing the derivative liabilities, warrants and other options outstanding at December 31, 2014:

Warrant	Issue Date	Shares Issuable upon Exercise of Warrant		Exercise Price		Expiration Date	Reference

Schleuning (Series A)	7/8/09		16,750		5.00	1/8/15		1
Series C	8/20/09 – 8/26/09		463,487		5.50	2/20/15		1
Series H	1/26/12		1,200,000		5.00	8/1/15		1
Series Q	6/21/12		1,200,000		5.00	12/22/15		1
Series R	12/6/12		2,625,000		4.00	12/6/16		1
Series S	10/11/13- 10/24/14		25,928,010		1.25	10/11/18		1
Series U	4/17/14		445,514		1.75	10/17/17		1
Series L (repriced)	4/18/07		70,000		2.50	4/2/15		2
Series N	8/18/08		2,844,627		0.53	8/18/15		2
Series P	2/10/12		590,001		4.50	3/6/17		2
Warrants held by Officer and Director	7/6/09		184,930		5.00	1/6/15		2
Consultants	2/15/05– 4/25/14		149,500		0.85-20.00	2/15/15 - 12/27/17		3

1.	Derivative Liabilities

The table below presents the derivative instruments outstanding at the balance sheet dates and their respective balances:

	December 31, 2014		September 30, 2014
Series A through E warrants	$	-	$	6,105
Series H warrants		12,000		12,000
Series Q warrants		12,000		12,000
Series R warrants		26,250		157,500
Series S warrants		3,707,706		5,197,352
Series U warrants		45,057		120,289

Total derivative liabilities	$	3,803,013	$	5,505,246

The table below presents the gains and (losses) on the derivative instruments for the three months ended December 31:

	2014		2013
Series A through E warrants	$	6,105	$	-
Series H warrants		-		24,000
Series N warrants		-		(489,754	)
Series Q warrants		-		24,000
Series R warrants		131,250		131,250
Series S warrants		1,950,383		1,921,321
Series U warrants		75,232		-

Net gain on derivative instruments	$	2,162,970	$	1,610,817

The Company reviews all outstanding warrants in accordance with the requirements of ASC 815. This topic provides that an entity should use a two-step approach to evaluate whether an equity-linked financial instrument (or embedded feature) is indexed to its own stock, including evaluating the instrument’s contingent exercise and settlement provisions. The warrant agreements provide for adjustments to the exercise price for certain dilutive events. Under the provisions of ASC 815, the warrants are not considered indexed to the Company’s stock because future equity offerings or sales of the Company’s stock are not an input to the fair value of a “fixed-for-fixed” option on equity shares, and equity classification is therefore precluded.

In accordance with ASC 815, derivative liabilities must be measured at fair value upon issuance and re-valued at the end of each reporting period through expiration. Any change in fair value between the respective reporting dates is recognized as a gain or loss.

Issuance of additional Series S Warrants

On October 24, 2014, the Company closed an underwritten public offering of 7,894,737 shares of common stock and 1,973,684 warrants to purchase shares of common stock. Additionally, on October 21, 2014, the Company sold 1,320,000 shares of common stock and 330,000 warrants to purchase shares of common stock in a private offering. For every four shares of common stock sold in these offerings, investors were issued one Series S warrant to purchase one share of common stock. The common stock and Series S warrants were sold at a combined per unit price of $0.76 for net proceeds of approximately $6.4 million, net of underwriting discounts and commissions and offering expenses. The Series S warrants may be exercised at a price of $1.25 and expire on October 11, 2018. The Series S warrants trade on the NYSE MKT under the symbol CVM WS.

The initial cost of the Series S warrants of $460,737 was added to the existing Series S warrant liability. As of December 31, 2014, the total Series S warrant liability was adjusted to fair value as noted in the above table.

Expiration of Warrants

On October 6, 2014, 1,200,000 Series F warrants, with an exercise price of $4.00, expired. The fair value of the Series F warrants was $0 on the date of expiration. On October 17, 2014, 1,782,057 Series T warrants, with an exercise price of $1.58, expired. The fair value of the Series T warrants was $0 on the date of expiration. On December 24, 2014, 130,347 Series A warrants, with an exercise price of $5.00, expired. The fair value of the warrants on the date of expiration was $1,303. During the three months ended December 31, 2013, zero warrants expired.

2.	Equity-based warrants

On December 24, 2014, 164,824 warrants held by an officer or director, with an exercise price of $4.00, expired. There were no other changes to equity-based warrants during the quarter ended December 31, 2014. During the three months ended December 31, 2013, zero warrants expired.

3.	Options and shares issued to Consultants

As of December 31, 2014, 149,500 options issued to consultants as payment for services remained outstanding, of which 140,000 options were issued from the Non-Qualified Stock Option plans. As of December 31, 2013, 200,750 options issued to consultants as payment for services remained outstanding, of which 191,250 options were issued from the Non-Qualified Stock Option plans.

The Company extended a one-year consulting agreement for services to be provided through December 15, 2015. In consideration for services provided, the Company agreed to issue the consultant 100,000 restricted shares in three installments – 34,000 in December 2014, 33,000 on May 15, 2015, and 33,000 on August 15, 2015. Accordingly, during the three months ended December 31, 2014, the Company issued the consultant 34,000 shares of restricted stock at the fair market value of $0.57 per share. The aggregate fair market value of $19,380 was recorded as a prepaid expense and is being charged to general and administrative expense over the period of service.

On October 20, 2013, the Company entered into a consulting agreement for services to be provided through October 19, 2016. In consideration for services provided, the Company agreed to issue the consultant 34,164 restricted shares each month of the agreement, with the first three months being issued in advance. During the three months ended December 31, 2014 and 2013, the Company issued the consultant 102,492 shares of restricted stock at the fair market value of $71,403 and $84,043, respectively. The aggregate fair market value was recorded as a prepaid expense and is being charged to general and administrative expense over the period of service. In November 2014, the Company issued the same consultant 150,000 shares of common stock at the aggregate fair market value of $97,500, in consideration for services provided.

The Company also engaged a third consultant for services to be provided from June 1, 2014 through November 30, 2014. During the three months ended December 31, 2014, the Company issued the consultant 10,000 shares of restricted stock at the fair market value of $7,250. No shares were issued to this consultant during the three months ended December 31, 2013.

During the three months ended December 31, 2014 and 2013, the Company recorded total expense of $189,144 and $71,586 relating to these consulting agreements. In addition, $66,143 was expensed during the three months ended December 31, 2013 for prior year consulting agreements. At December 31, 2014 and September 30, 2014, respectively, $32,857 and $26,468 is included in prepaid expenses.