C. STOCKHOLDERS EQUITY

9 Months Ended

Jun. 30, 2018

Basic EPS

C. STOCKHOLDERS' EQUITY

Stock options, stock bonuses and compensation granted by the Company as of June 30, 2018 are as follows:

Name of Plan	Total Shares Reserved Under Plans		Shares Reserved for Outstanding Options		Shares Issued		Remaining Options/Shares Under Plans
Incentive Stock Options Plans		138,400		123,558		N/A		385
Non-Qualified Stock Option Plans		3,387,200		2,946,606		N/A		399,533
Stock Bonus Plans		783,760		N/A		288,337		495,390
Stock Compensation Plan		134,000		N/A		118,590		15,410
Incentive Stock Bonus Plan		640,000		N/A		624,000		16,000

Stock options, stock bonuses and compensation granted by the Company as of September 30, 2017 are as follows:

Name of Plan	Total Shares Reserved Under Plans		Shares Reserved for Outstanding Options		Shares Issued		Remaining Options/Shares Under Plans
Incentive Stock Option Plans		138,400		124,758		N/A		454
Non-Qualified Stock Option Plans		1,187,200		1,115,086		N/A		42,830
Bonus Plans		383,760		N/A		206,390		177,337
Stock Compensation Plan		134,000		N/A		115,590		18,410
Incentive Stock Bonus Plan		640,000		N/A		624,000		16,000

Stock option activity:

	Nine Months Ended June 30,
	2018		2017
Granted		1,858,1080		39,225
Expired		26,395		16,081
Forfeited		1,393		1,980

	Three Months Ended June 30,
	2018		2017
Granted		1,847,808		39,225
Expired		2,016		800
Forfeited		-		919

 Stock-Based Compensation Expense

	Nine months Ended June 30,
	2018		2017
Employees	$	2,193,402	$	1,002,923
Non-employees	$	349,319	$	151,611

	Three months Ended June 30,
	2018		2017
Employees	$	465,487	$	325,168
Non-employees	$	191,328	$	38,833

Employee compensation expense includes the expense related to options issued or vested and restricted stock. The increase in employee compensation expense in 2018 is primarily due to an increase of approximately $1 million in equity based compensation related to the Company’s shareholder approved 2014 Incentive Stock Bonus Plan. Non-employee expense includes the expense related to options and stock issued to consultants expensed over the period of their service contracts. Stock based compensation expense is included in general and administrative expenses on the statements of operations.

Warrants and Non-employee Options

The following chart presents the outstanding warrants and non-employee options, listed by expiration date at June 30, 2018:

Warrant	Issue Date	Shares Issuable upon Exercise of Warrants		Exercise Price		Expiration Date	Reference
Series DD	12/8/2016		1,360,960	$	4.50	7/12/2018		1
Series EE	12/8/2016		1,360,960	$	4.50	7/12/2018		1
Series N	8/18/2008		85,339	$	3.00	8/18/2018		*
Series S	10/11/13- 10/24/14		327,729	$	31.25	10/11/2018		1
Series V	5/28/2015		810,127	$	19.75	5/28/2020		1
Series UU	6/11/2018		187,562	$	2.80	6/11/2020		2
Series W	10/28/2015		688,930	$	16.75	10/28/2020		1
Series X	1/13/2016		120,000	$	9.25	1/13/2021		*
Series Y	2/15/2016		26,000	$	12.00	2/15/2021		*
Series ZZ	5/23/2016		20,000	$	13.75	5/18/2021		1
Series BB	8/26/2016		16,000	$	13.75	8/22/2021		1
Series Z	5/23/2016		264,000	$	13.75	11/23/2021		1
Series FF	12/8/2016		68,048	$	3.91	12/1/2021		1
Series CC	12/8/2016		680,480	$	5.00	12/8/2021		1
Series HH	2/23/2017		20,000	$	3.13	2/16/2022		1
Series AA	8/26/2016		200,000	$	13.75	2/22/2022		1
Series JJ	3/14/2017		30,000	$	3.13	3/8/2022		1
Series LL	4/30/2017		26,398	$	3.59	4/30/2022		1
Series MM	6/22/2017		893,491	$	1.86	6/22/2022		*
Series NN	7/24/2017		539,300	$	2.52	7/24/2022		*
Series OO	7/31/2017		60,000	$	2.52	7/31/2022		*
Series QQ	8/22/2017		31,063	$	2.50	8/22/2022		2
Series GG	2/23/2017		400,000	$	3.00	8/23/2022		1
Series II	3/14/2017		600,000	$	3.00	9/14/2022		1
Series RR	10/30/2017		583,057	$	1.65	10/30/2022		2
Series KK	5/3/2017		395,970	$	3.04	11/3/2022		1
Series SS	12/19/2017		1,013,162	$	2.09	12/18/2022		2
Series TT	2/5/2018		1,875,860	$	2.24	2/5/2023		2
Series PP	8/28/2017		1,674,500	$	2.30	2/28/2023		2
Consultants	10/1/15- 7/28/17		36,400	$	2.18- $15.00	9/30/18- 7/27/27		3

*No current period changes to these warrants.

1. Derivative Liabilities

The table below presents the warrant liabilities and their respective balances at the balance sheet dates:

	June 30, 2018		September 30, 2017
Series S warrants	$	4,916	$	32,773
Series V warrants		50,068		72,912
Series W warrants		65,276		83,754
Series Z warrants		42,534		77,216
Series ZZ warrants		2,651		4,753
Series AA warrants		36,750		65,087
Series BB warrants		2,334		4,322
Series CC warrants		212,976		394,220
Series DD warrants		-		5,492
Series EE warrants		-		5,492
Series FF warrants		24,035		47,154
Series GG warrants		172,042		342,173
Series HH warrants		8,052		16,014
Series II warrants		261,058		511,636
Series JJ warrants		12,233		24,203
Series KK warrants		175,912		345,720
Series LL warrants		10,479		20,481
Total warrant liabilities	$	1,081,316	$	2,053,402

The table below presents the gains and (losses) on the warrant liabilities for the nine months ended June 30:

	2018			2017
Series S Warrants	$	(756,261	)	$	3,036,688
Series V warrants		22,842			1,450,126
Series W warrants		18,478			1,618,555
Series Z warrants		34,682			829,279
Series ZZ warrants		2,103			61,382
Series AA warrants		28,337			647,010
Series BB warrants		1,988			50,448
Series CC warrants		181,244			416,599
Series DD warrants		5,492			435,263
Series EE warrants		5,492			651,522
Series FF warrants		23,119			45,403
Series GG warrants		170,131			92,178
Series HH warrants		7,962			4,653
Series II warrants		250,578			137,044
Series JJ warrants		11,970			6,943
Series KK warrants		169,808			172,883
Series LL warrants		10,002			14,001
Net gain on warrant liabilities	$	187,967		$	9,669,977

The table below presents the gains and (losses) on the warrant liabilities for the three months ended June 30:

	2018			2017
Series S Warrants	$	(768,188	)	$	456,852
Series V warrants		26,389			32,405
Series W warrants		42,609			9,140
Series Z warrants		26,587			1,016
Series ZZ warrants		1,914			187
Series AA warrants		19,661			345
Series BB warrants		1,695			110
Series CC warrants		139,325			(13,270	)
Series DD warrants		36			21,315
Series EE warrants		36			139,284
Series FF warrants		15,818			(1,763	)
Series GG warrants		132,712			(16,033	)
Series HH warrants		5,279			(687	)
Series II warrants		199,970			(24,375	)
Series JJ warrants		7,960			(1,045	)
Series KK warrants		132,884			172,883
Series LL warrants		6,695			14,001
Net gain (loss) on warrant liabilities	$	(8,618	)	$	790,365

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 in the accompanying statements of operations.

Changes in Liability Classified Warrants

On April 2, 2018, the exercise price of the Company’s outstanding Series S warrants that are publicly traded under the symbol “CVM WS” on the NYSE American, was repriced to $1.75 per share until June 11, 2018. After that date, the exercise price reverted back to $31.25 per share of common stock. Warrant holders exercised 709,391 warrants under the temporarily revised terms, for total proceeds of approximately $1.2 million. On January 12, 2018, the exercise price had been reduced to $3.00 per share through April 3, 2018, however, no warrants were exercised under these terms. The modification was reflected in the fair value measurement of the warrants. Twenty-five (25) Series S warrants are required to purchase one share of common stock. The remaining Series S warrants expire on October 11, 2018.

On June 25, 2018, the Company extended the expiration date of its Series DD and Series EE warrants to July 12, 2018. On February 23, 2018, the Company extended the expiration date of these warrants to July 1, 2018. These modifications were reflected in the fair value measurement of the warrants.

On October 17, 2017, 17,821 Series U warrants, with an exercise price of $43.75, expired. The fair value of the Series U warrants was $0 on the date of expiration.

On December 6, 2016, 105,000 Series R warrants, with an exercise price of $100.00, expired. The fair value of the Series R warrants was $0 on the date of expiration.

2. Issuance of Equity Warrants

Series UU Warrants

On June 11, 2018, the Company issued 187,562 Series UU Warrants to holders of the outstanding Series MM and NN notes payable as an inducement to convert their notes into common stock (See Note F). The Series UU warrants are exercisable at a fixed price of $2.80 per share, will not be exercisable for 6 months and expire on June 11, 2020.  Shares issuable upon the exercise of the warrants are restricted securities unless registered. The Company recognized an expense equal to the fair value of the consideration transferred in the transaction in excess of the fair value of consideration issuable under the original conversion terms. This expense represents the fair value of the Series UU warrants, which was calculated to be approximately $291,000 and is included as interest expense on the statement of operations. The Series UU warrants qualify for equity treatment in accordance with ASC 815.

Series TT Warrants

On February 5, 2018, the Company sold 2,501,145 shares of its common stock at a price of $1.87 per share for total proceeds of approximately $4.7 million. The common stock was restricted unless registered. The purchasers of the common stock also received Series TT warrants which allow the purchasers to acquire up to 1,875,860 shares of the Company’s common stock. The warrants are exercisable at a fixed price of $2.24 per share, will not be exercisable for 6 months and one day and expire on February 5, 2023. Shares issuable upon the exercise of the warrants are restricted securities unless registered. The shares and warrants were registered on February 28, 2018. The Company allocated the proceeds received to the shares and the Series TT warrants on a relative fair value basis. As a result of such allocation, the Company determined the relative fair value of the Series TT warrants to be approximately $1.56 million. The Series TT warrants qualify for equity treatment in accordance with ASC 815.

Series SS Warrants

On December 19, 2017 the Company sold 1,289,478 shares of its common stock at a price of $1.90 per share for total proceeds of approximately $2.45 million.  The purchasers of the common stock also received Series SS warrants which allow the purchasers to acquire up to 1,289,478 shares of the Company’s common stock.  The warrants are exercisable at a fixed price of $2.09 per share, and will expire on December 18, 2022. Shares issuable upon the exercise of the warrants will be restricted securities unless registered. The shares and warrants were registered on January 23, 2018. The Company allocated the proceeds received to the shares and the Series SS warrants on a relative fair value basis. As a result of such allocation, the Company determined the relative fair value of the Series SS warrants to be approximately $1.0 million. The Series SS warrants qualify for equity treatment in accordance with ASC 815.

During the quarter ended June 30, 2018, 276,316 Series SS warrants were exercised for total proceeds of approximately $578,000.

Series RR Warrants  

On October 30, 2017, holders of convertible notes in the principal amount of $1.1 million issued in June 2017 and holders of convertible notes in the principal amount of $1.2 million issued in July 2017 agreed to extend the maturity date of these notes to September 21, 2018.  In consideration for the extension of the maturity date of the convertible notes, the Company issued a total of 583,057 Series RR warrants to the convertible note holders that agreed to the extension.  Each Series RR warrant entitles the holder to purchase one share of the Company’s common stock.  The Series RR warrants may be exercised at any time on or before October 30, 2022 at an exercise price of $1.65 per share. The Series RR warrants were recorded at approximately $0.7 million, the relative fair value on the date of issuance, as described in Note F.

Other Warrant Activity

During the quarter ended June 30, 2018, 75,500 Series PP warrants were exercised for total proceeds of approximately $174,000 and 56,437 Series QQ warrants were exercised for total proceeds of approximately $141,000.

3.  Options and shares issued to Consultants

The Company typically enters into consulting arrangements in exchange for common stock or stock options. During the nine and three months ended June 30, 2018, the Company issued 219,391 and 81,604 shares of common stock respectively, of which 216,391 and 78,604, respectively, were restricted shares. During the nine and three months ended June 30, 2017, the Company issued 36,999 and 18,000 shares of common stock, respectively. The weighted average grant date fair value of the shares issued to consultants during the nine months ended June 30, 2018 and 2017, was $2.11 and $3.42 respectively. The aggregate values of the issuances of restricted common stock and common stock options are recorded as prepaid expenses and are charged to general and administrative expenses over the periods of service. If shares or options are issued for past services, the aggregate values are expensed when the shares or options are issued.

During the nine and three months ended June 30, 2018, the Company recorded total expense of approximately $349,000 and $191,000, respectively, relating to these consulting arrangements. During the nine and three months ended June 30, 2017, the Company recorded total expense of approximately $152,000 and $39,000, respectively, relating to these consulting arrangements. At June 30, 2018 and September 30, 2017, approximately $159,000 and $45,000, respectively, are included in prepaid expenses. As of June 30, 2018, the Company had 36,400 options outstanding, which were issued to consultants as payment for services. All of these options were vested and all were issued from the Non-Qualified Stock Option plans.

Other Equity Transactions

On May 16, 2018, the Company entered into a Securities Purchase Agreement with Ergomed plc, one of the Company’s Clinical Research Organizations responsible for managing the Company’s Phase 3 clinical trial, to facilitate a partial payment of the accounts payable balances due Ergomed. Under the Agreement, the Company issued Ergomed 600,000 shares, with a fair market value of approximately $1.7 million, as a forbearance fee in exchange for Ergomed’s agreement to provisionally forbear collection of the payables in an amount equal to the net proceeds from the resales of the shares issued to Ergomed. During the quarter ended June 30, 2018, the Company recorded the full amount of the expense upon issuance, offset by amounts realized through the resale by Ergomed of 462,921 shares for approximately $0.7 million and the corresponding reduction of the payables resulting in a net expense of approximately $1.0 million. As of June 30, 2018, Ergomed holds the remaining 137,079 shares and may resell the shares or return the shares to the Company for cancellation until December 31, 2018.

On January 1, 2018, and August 15, 2017, the Company entered into similar Securities Purchase Agreements with Ergomed plc, to facilitate a partial payment of the accounts payable balances due Ergomed. Under those Agreements, the Company issued Ergomed 660,000 and 480,000 shares, with a fair market value of approximately $1.3 million and $1.3 million, respectively, as a forbearance fee in exchange for Ergomed’s agreement to provisionally forbear collection of the payables in an amount equal to the net proceeds from the resales of the shares issued to Ergomed.

During the nine months and three months ended June 30, 2018, the Company realized net interest expense of approximately $0.2 million and $0.1 million as a result of these Agreements.