7. STOCK COMPENSATION

12 Months Ended

Sep. 30, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

7. STOCK COMPENSATION

The Company recognized the following expenses for options issued or vested and restricted stock awarded during the year:

	Year Ended September 30,
	2015		2014		2013
Employees	$	5,105,827	$	3,958,637	$	2,636,905
Non-employees	$	565,915	$	771,946	$	454,855

These expenses were recorded as general and administrative expense.  During the years ended September 30, 2015, 2014 and 2013, non-employee compensation excluded $30,329, $26,468 and $57,553, respectively, for future services to be performed (Note 11).

During the years ended September 30, 2015, 2014 and 2013, the fair value of each option grant was estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions.

	2015			2014			2013
Expected stock price volatility		73.38 – 86.19	%		72.81 – 86.87	%		84.41-92.28	%
Risk-free interest rate		0.93 – 2.35	%		0.59 – 2.65	%		0.75-2.73	%
Expected life of options	3.0 – 9.76 Years			3.0 – 9.76 Years				4.85-9.77
Expected dividend yield		-			-			-

Non-Qualified Stock Option Plans--At September 30, 2015, the Company has collectively authorized the issuance of 7,680,000 shares of common stock under its Non-Qualified Stock Option Plans. Options typically vest over a three-year period and expire no later than ten years after the grant date. Terms of the options are to be determined by the Company’s Compensation Committee, which administers the plans. The Company’s employees, directors, officers, and consultants or advisors are eligible to be granted options under the Non-Qualified Stock Option Plans.

Incentive Stock Option Plans--At September 30, 2015, the Company had collectively authorized the issuance of 1,960,000 shares of common stock under its Incentive Stock Option Plans.  Options typically vest over a three-year period and expire no later than ten years after the grant date.  Terms of the options were determined by the Company’s Compensation Committee, which administers the plans.  Only the Company’s employees are eligible to be granted options under the Incentive Stock Option Plans.

Activity in the Company’s Non-Qualified and Incentive Stock Option Plans for the two years ended September 30, 2015 is summarized as follows:

Non-Qualified and Incentive Stock Option Plans

	Outstanding								Exercisable
	Number of Shares		Weighted Average Exercise Price		Weighted Ave Remaining Contractual Term (Years)		Aggregate Intrinsic Value		Number of Shares		Weighted Average Exercise Price		Weighted Ave Remaining Contractual Term (Years)		Aggregate Intrinsic Value
Outstanding at October 1, 2013		5,188,141	$	3.62		6.53	$	133		2,422,997	$	4.00		4.95	$	133
Vested										1,094,803	$	2.14
Granted (a)		1,723,240	$	1.09
Exercised
Forfeited		6,316	$	1.60
Expired		73,916	$	4.29						73,916	$	4.29
Cancelled
Outstanding at September 30, 2014		6,831,149	$	2.98		6.55	$	3,600		3,443,884	$	3.40		5.49	$	3,600
Vested										1,153,357	$	2.48
Granted (b)		893,700	$	0.66
Exercised
Forfeited		116,665	$	1.87
Expired		70,499	$	4.15						70,499	$	4.15
Cancelled
Outstanding at September 30, 2015		7,537,685	$	2.71		5.98	$	50		4,526,742	$	3.15		5.01	$	0

(a)	Includes 80,000 stock options granted to consultants
(b)	Includes 90,000 stock options granted to consultants

A summary of the status of the Company’s non-vested options for the two years ended September 30, 2015 is presented below:

	Number of Shares			Weighted Average Grant Date Fair Value
Unvested at October 1, 2013	2,765,144		$	2.79
Vested	(1,094,803	)
Granted	1,723,240
Forfeited	(6,316	)
Unvested at September 30, 2014	3,387,265		$	2.15
Vested	(1,153,357	)
Granted	893,700
Forfeited	(116,665	)
Unvested at September 30, 2015	3,010,943		$	1.72

A summary of the status of the Company’s restricted stock units issued from the Incentive Stock Bonus Plan for the two years ended September 30, 2015 is presented below:

	Number of Shares			Weighted Average Grant Date Fair Value
Unvested at October 1, 2013		-			-
Vested		-
Granted		15,700,000
Forfeited		-
Unvested at September 30, 2014		15,700,000		$	0.55
Vested		(500,000	)
Granted		-
Forfeited		(100,000	)
Unvested at September 30, 2015		15,100,000		$	0.55

In December 2012, the Company offered employees and directors holding options that expire on April 1, 2013 the opportunity to forfeit these options and have new options issued with expiration dates of December 17, 2017.  All twelve employees and directors eligible for this offer accepted the terms.  This resulted in the cancellation of 387,466 options priced at $2.20 per share and the concurrent issuance of the same number of options at $2.80 per share.  At the cancellation date, the incremental compensation cost was $477,879 which was amortized over the remaining service period. As of September 30, 2015, all options remained outstanding.

Stock Bonus Plans -- At September 30, 2015, the Company was authorized to issue up to 3,594,000 shares of common stock under its Stock Bonus Plans.  All employees, directors, officers, consultants, and advisors are eligible to be granted shares.  During the year ended September 30, 2015, 243,178 shares were issued to the Company’s 401(k) plan for a cost of $165,646.  During the year ended September 30, 2014, 164,787 shares were issued to the Company’s 401(k) plan for a cost of $155,434.  During the year ended September 30, 2013, 74,230 shares were issued to the Company’s 401(k) plan for a cost of $158,856.  As of September 30, 2015, the Company has issued a total of 1,643,714 shares of common stock from the Stock Bonus Plans.

Stock Compensation Plans-- At September 30, 2015, 3,350,000 shares were authorized for use in the Company’s stock compensation plans.  During the years ended September 30, 2015, 2014 and 2013, 218,328, 409,968 and  50,000 shares were issued from the Stock Compensation Plans to consultants for payment of services at a cost of $146,696, $439,008 and $140,000, respectively.  During the year ended September 30, 2015, 107,050 shares were issued to employees from the Stock Compensation Plans as part of their compensation at a cost of $57,807.  No shares were issued to employees from the Stock Compensation Plans during the years ended September 30, 2014 and 2013.   As of September 30, 2015, the Company has issued 1,423,999 shares of common stock from the Stock Compensation Plans.

Incentive Stock Bonus Plan-- On July 22, 2014 the Company's shareholders approved the 2014 Incentive Stock Bonus Plan, authorizing the issuance of up to 16,000,000 shares in the Company’s Incentive Stock Bonus Plan.  During the year ended September 30, 2014, 15,700,000 shares were issued from the Incentive Stock Bonus Plan to officers and employees.  During the year ended September 30, 2015, 100,000 shares were forfeited, 500,000 shares vested and were issued and the remaining 15,100,000 shares are unvested and are held in escrow.  The shares will only be earned upon the achievement of certain milestones leading to the commercialization of the Company’s Multikine technology, or specified increases in the market price of the Company’s stock. If the performance or market criteria are not met as specified in the Incentive Stock Bonus Plan, all or a portion of the awarded shares will be forfeited.  The fair value of the shares on the grant date was calculated using the market value on the grant-date for issuances where the attainment of performance criteria is likely and using a Monte Carlo simulation for issuances where the attainment of performance criteria is uncertain.  The grant date fair value of shares issued that remain outstanding as of September 30, 2015 is $8,609,679.  The total value of the shares, if earned, is being expensed over the requisite service periods for each milestone, provided the requisite service periods are rendered, regardless of whether the market conditions are met.  No compensation cost is recognized for awards where the requisite service period is not rendered.  During the years ended September 30, 2015 and 2014, the Company recorded expense relating to the issuance of restricted stock pursuant to the plan of $3,396,771 and $1,477,954, respectively.  At September 30, 2015, the Company has unrecognized compensation expense of $3,734,954 which is expected to be recognized over a weighted average period of 6.04 years.