9. STOCK COMPENSATION

12 Months Ended

Sep. 30, 2018

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,
	2018		2017
Employees	$	2,743,267	$	1,380,500
Non-employees	$	530,736	$	232,847

Stock compensation expenses were recorded as general and administrative expense. During the years ended September 30, 2018 and 2017, non-employee stock compensation excluded approximately $207,000 and $45,000, respectively, for future services to be performed (Note 12).

During the years ended September 30, 2018 and 2017 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.

		2018	2017
Expected stock price volatility	89.90 – 94.32%	88.54 – 90.67%
Risk-free interest rate	2.30 – 3.04%	2.18 – 2.29%
Expected life of options	9.67 – 9.70 Years	9.69 – 10 Years
Expected dividend yield	-	-

Non-Qualified Stock Option Plans – At September 30, 2018, the Company has collectively authorized the issuance of 3,387,200 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, 2018, 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, 2018 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 September 30, 2016		343,575	$	59.22		5.35	$	0		232,931	$	66.28		4.76	$	0
Vested										63,812	$	18.45
Granted (a)		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
Vested										334,111	$	7.63
Granted		1,958,108	$	2.50
Exercised
Forfeited		5,426	$	3.79
Expired		32,399	$	67.73						32,399	$	67.73
Cancelled
Outstanding at September 30, 2018		3,160,127	$	7.30		8.88	$	4,761,973		577,694	$	26.18		6.74	$	604,763

(a) 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, 2018 is presented below:

	Number of Options			Weighted Average Grant Date Fair Value
Unvested at October 1, 2016		110,644		$	36.96
Vested		(63,812	)
Granted		932,825
Forfeited		(15,795	)
Unvested at September 30, 2017		963,862		$	4.91
Vested		(334,111	)
Granted		1,958,108
Forfeited		(5,426	)
Unvested at September 30, 2018		2,582,433		$	2.48

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, 2018 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, 2018 and 2017, the Company recorded expense relating to the issuance of restricted stock pursuant to the plan of approximately $1.4 million and $633,000, respectively. At September 30, 2018, the Company has unrecognized compensation expense of approximately $1.0 million which is expected to be recognized over a weighted average period of 3.3 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, 2018 is presented below:

	Number of Shares			Weighted Average Grant Date Fair Value
Unvested at September 30, 2016		604,000		$	13.75
Vested		(136,000	)
Unvested at September 30, 2017		468,000		$	13.75
Vested		(156,000	)
Unvested at September 30, 2018		312,000		$	13.75

Stock Bonus Plans – At September 30, 2018, the Company was authorized to issue up to 783,760 shares of common stock under its Stock Bonus Plans. All employees, directors, officers, consultants, and advisors are eligible to be granted shares. As of September 30, 2018, the Company has issued a total of 297,230 shares of common stock from the Stock Bonus Plans.

Stock Compensation Plans – At September 30, 2018, 134,000 shares were authorized for use in the Company’s Stock Compensation Plans. During the years ended September 30, 2018, and 2017, zero and 23,202 shares, respectively, were issued from the Stock Compensation Plans to consultants for payment of services at a cost of approximately $0 and $60,000, respectively. During the year ended September 30, 2018 and 2017, 3,000 and 13,000 shares, respectively, were issued to employees and directors from the Stock Compensation Plans as part of their compensation at a cost of approximately $4,000 and $24,000, respectively. As of September 30, 2018, the Company has issued 118,590 shares of common stock from the Stock Compensation Plans.