9. STOCK COMPENSATION

12 Months Ended

Sep. 30, 2017

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

9. STOCK COMPENSATION

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

	Year Ended September 30,
	2017	2016
Employees	$1,380,500	$2,113,433
Non-employees	$ 232,847	$ 751,651

Stock compensation expenses were recorded as general and administrative expense. During the years ended September 30, 2017 and 2016, non-employee stock compensation excluded approximately $45,000 and $48,000, respectively, for future services to be performed (Note 12).

During the years ended September 30, 2017 and 2016 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.

	2017	2016
Expected stock price volatility	88.54 – 90.67%	75.58 – 80.9%
Risk-free interest rate	2.18 – 2.29%	0.71 – 1.56%
Expected life of options	9.69 – 10 Years	3.0 – 9.69 Years
Expected dividend yield	-	-

Non-Qualified Stock Option Plans – At September 30, 2017, the Company has collectively authorized the issuance of 1,187,200 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 were 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, 2017, the Company had collectively authorized the issuance of 138,400 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, 2017 is summarized as follows:

Non-Qualified and Incentive Stock Option Plans

	Outstanding				Exercisable
			Weighted				Weighted
		Weighted	Ave	Aggregate		Weighted	Ave	Aggregate
	Number of	Average	Remaining Contractual	Intrinsic	Number of	Average	Remaining Contractual	Intrinsic
	Shares	Exercise Price	Term (Years)	Value	Shares	Exercise Price	Term (Years)	Value
Outstanding at October 1, 2015	301,511	$67.75	5.98	$50	181,102	$78.75	5.01	$0
Vested					56,069	$31.75
Granted (a)	48,544	$12.00
Exercised
Forfeited	2,240	$21.50
Expired	4,240	$145.00			4,240	$145.00
Cancelled
Outstanding at September 30, 2016	343,575	$59.22	5.35	$0	232,931	$66.28	4.76	$0
Vested					63,812	$18.45
Granted (b)	932,825	$2.17
Exercised
Forfeited	15,795	$9.46
Expired	20,761	$88.80			20,761	$88.80
Cancelled
Outstanding at September 30, 2017	1,239,844	$16.44	8.50	$1,400	275,982	$53.53	4.91	$0
(a)	Includes 16,400 stock options granted to consultants

(b) Includes 20,000 stock options granted to consultants

A summary of the status of the Company’s non-vested options for the two years ended September 30, 2017 is presented below:

	Number of Options	Weighted Average Grant Date Fair Value
Unvested at October 1, 2015	120,409	$ 43.09
Vested	(56,069)
Granted	48,544
Forfeited	(2,240)
Unvested at September 30, 2016	110,644	$ 36.96
Vested	(63,812)
Granted	932,825
Forfeited	(15,795)
Unvested at September 30, 2017	963,862	$ 4.91

Incentive Stock Bonus Plan – Up to 640,000 shares are authorized under the 2014 Incentive Stock Bonus Plan. 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, 2017 was approximately $8.6 million. 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, 2017 and 2016, the Company recorded expense relating to the issuance of restricted stock pursuant to the plan of approximately $633,000 and $634,000, respectively. At September 30, 2017, the Company has unrecognized compensation expense of approximately $2.5 million which is expected to be recognized over a weighted average period of four years.

A summary of the status of the Company’s restricted common stock issued from the Incentive Stock Bonus Plan for the two years ended September 30, 2017 is presented below:

	Number of Shares	Weighted Average Grant Date Fair Value
Unvested at September 30, 2015	604,000	$13.75
Vested	-
Unvested at September 30, 2016	604,000	$13.75
Vested	(136,000)
Unvested at September 30, 2017	468,000	$13.75

Stock Bonus Plans – At September 30, 2017, the Company was authorized to issue up to 383,760 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, 2017, 79,941 shares were issued to the Company’s 401(k) plan for a cost of approximately $151,000. During the year ended September 30, 2016, 16,340 shares were issued to the Company’s 401(k) plan for a cost of approximately $162,000. As of September 30, 2017, the Company has issued a total of 206,390 shares of common stock from the Stock Bonus Plans.

Stock Compensation Plans – At September 30, 2017, 134,000 shares were authorized for use in the Company’s Stock Compensation Plans. During the years ended September 30, 2017, and 2016, 23,202 and 18,593 shares, respectively, were issued from the Stock Compensation Plans to consultants for payment of services at a cost of approximately $60,000 and $234,000, respectively. During the year ended September 30, 2017 and 2016, 13,000 and 3,837 shares, respectively, were issued to employees from the Stock Compensation Plans as part of their compensation at a cost of approximately $24,000 and $45,000, respectively. As of September 30, 2017, the Company has issued 115,590 shares of common stock from the Stock Compensation Plans.