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10. STOCK COMPENSATION
 12 Months Ended
Sep. 30, 2019
Share-based Payment Arrangement [Abstract]  
10. STOCK COMPENSATION

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

 

     Year Ended September 30,  
    2019     2018  
Employees   $ 4,428,174     $ 2,743,267  
Non-employees   $ 856,025     $ 530,736  

 

During the years ended September 30, 2019 and 2018, non-employee stock compensation excluded approximately $230,000 and $207,000, respectively, for future services to be performed (Note 5).

 

During the years ended September 30, 2019 and 2018 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.

 

    2019     2018  
Expected stock price volatility     87.6 – 92.84 %     89.90 – 94.32 %
Risk-free interest rate     1.62 – 2.82 %     2.30 – 3.04 %
Expected life of options     9.67 – 9.68 Years       9.67 – 9.70 Years  
Expected dividend yield     -       -  

 

Non-Qualified Stock Option Plans – At September 30, 2019, the Company has collectively authorized the issuance of 6,387,200 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, 2019, 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, 2019 is summarized as follows:

 

Non-Qualified and Incentive Stock Option Plans

 

    Outstanding     Exercisable  
         Weighted Average     Weighted Ave Remaining                Weighted     Weighted Ave Remaining      
    Number of Shares     Exercise Price     Contractual Term (Years)     Aggregate Intrinsic Value     Number of Shares     Average Exercise Price     Contractual Term (Years)     Aggregate Intrinsic Value  
                                                 
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  
Vested                                     945,359     $ 2.56                  
Granted     3,271,362     $ 5.40                                                  
Exercised (a)     65,997     $ 2.28                       65,997     $ 2.28                  
Forfeited     82,461     $ 17.89                                                  
Expired (b)     64,815     $ 71.86                       64,815     $ 71.86                  
Cancelled                                                                
                                                                 
Outstanding at September 30, 2019     6,218,216     $ 5.54       8.88     $ 29,562,594       1,392,241     $ 9.15       7.68     $ 7,869,555  

 

 

 

(a) Includes 10,000 stock options exercised by consultants

 

(b) Includes 10,400 stock options to consultants

 

A summary of the status of the Company’s non-vested options for the two years ended September 30, 2019 is presented below:

 

    Number of Options     Weighted Average Grant Date Fair Value  
Unvested at October 1, 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  
     Vested     (945,359 )        
     Granted     3,271,362          
     Forfeited     (82,461 )        
Unvested at September 30, 2019     4,825,975     $ 3.79  

 

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, 2019 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, 2019 and 2018, the Company recorded expense relating to the issuance of restricted stock pursuant to the plan of approximately $0.3 million and $1.4 million, respectively. At September 30, 2019, the Company has unrecognized compensation expense of approximately $0.7 million which is expected to be recognized over a weighted average period of 2.3 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, 2019 is presented below:

 

    Number of Shares     Weighted Average Grant Date Fair Value  
             
Unvested at September 30, 2017     468,000     $ 13.75  
     Vested     (156,000 )        
Unvested at September 30, 2018     312,000     $ 13.75  
     Forfeited     (7,500 )        
     Vested     -          
Unvested at September 30, 2019     304,500     $ 13.75  

 

Stock Bonus Plans – At September 30, 2019, 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, 2019, the Company has issued a total of 33,226 shares of common stock from the Stock Bonus Plans.

 

Stock Compensation Plans – At September 30, 2019, 634,000 shares were authorized for use in the Company’s Stock Compensation Plans. During the years ended September 30, 2019, and 2018, no shares were issued from the Stock Compensation Plans to consultants for payment of services. As of September 30, 2019, the Company has issued 130,183 shares of common stock from the Stock Compensation Plans.