C. STOCKHOLDERS EQUITY

6 Months Ended

Mar. 31, 2020

Equity [Abstract]

C. STOCKHOLDERS' EQUITY

Proceeds from the Sale of Common Stock

In March 2020, the Company sold 630,500 shares of common stock at a public offering price of $12.22 per share and received aggregate net proceeds of approximately $7.1 million. Under the terms of the Underwriting Agreement the Company granted the Underwriters a 45-day option to purchase up to an additional 94,575 shares of common stock solely to cover over-allotments. The underwriter fully exercised this option in May 2020 resulting in additional net proceeds to the Company of approximately $1.1 million.

In December 2019, the Company sold 606,395 shares of common stock at a public offering price of $9.07 per share and received aggregate net proceeds of approximately $5.0 million. In January 2020, the underwriters of that offering fully exercised the option to purchase 90,959 additional shares of common stock at the public offering price of $9.07 per share for aggregate net proceeds to the Company of approximately $0.8 million.

Equity Compensation

Underlying share information for equity compensation plans as of March 31, 2020 is 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		89,895		N/A		213
Non-Qualified Stock Option Plans		6,387,200		6,108,173		N/A		131,146
Stock Bonus Plans		783,760		N/A		339,076		444,651
Stock Compensation Plans		634,000		N/A		150,695		464,895
Incentive Stock Bonus Plan		640,000		N/A		616,500		23,500

Underlying share information for equity compensation plans as of September 30, 2019 is 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		89,895		N/A		213
Non-Qualified Stock Option Plans		6,387,200		6,128,321		N/A		112,166
Stock Bonus Plans		783,760		N/A		331,226		452,501
Stock Compensation Plans		634,000		N/A		130,183		485,407
Incentive Stock Bonus Plan		640,000		N/A		616,500		23,500

Stock option activity:

	Six Months Ended March 31,
	2020		2019
Options granted		2,500		500
Options exercised		20,480		-
Options forfeited		1,000		24,193
Options expired		1,168		2,400

	Three Months Ended March 31,
	2020		2019
Options granted		1,500		-
Options exercised		20,480		-
Options forfeited		1,000		24,193
Options expired		1,132		-

Stock-Based Compensation Expense

	Six months Ended March 31,
	2020		2019
Employees	$	3,581,204	$	1,104,490
Non-employees	$	347,227	$	511,424

	Three months Ended March 31,
	2020		2019
Employees	$	1,780,979	$	530,830
Non-employees	$	191,487	$	272,520

Employee compensation expense includes the expense related to options issued or vested and restricted stock granted. Non-employee expense includes the expense related to options and stock issued to consultants expensed over the period of their service contracts.

Warrants and Non-Employee Options

The following chart represents the warrants and non-employee options outstanding at March 31, 2020:

Warrant/Options	Issue Date	Shares Issuable upon Exercise of Warrants/ Options		Exercise Price		Expiration Date	Reference
Series N	8/18/2008		85,339	$	3.00	2/18/2021		2
Series V	5/28/2015		810,127	$	19.75	5/28/2020		1
Series UU	6/11/2018		154,810	$	2.80	6/11/2020		*
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 CC	12/8/2016		153,643	$	5.00	12/8/2021		1
Series HH	2/23/2017		200	$	3.13	2/16/2022		1
Series AA	8/26/2016		200,000	$	13.75	2/22/2022		1
Series MM	6/22/2017		893,491	$	1.86	6/22/2022		*
Series NN	7/24/2017		375,545	$	2.52	7/24/2022		2
Series OO	7/31/2017		10,000	$	2.52	7/31/2022		2
Series RR	10/30/2017		457,116	$	1.65	10/30/2022		*
Series SS	12/19/2017		365,538	$	2.09	12/18/2022		2
Series TT	2/5/2018		381,564	$	2.24	2/5/2023		2
Series VV	7/2/2018		55,000	$	1.75	1/2/2024		2
Consultants	7/28/17		10,000	$	2.18	7/27/2027		*

* No current period changes to these warrants and non-employee options

1. Warrant Liabilities

The table below presents the fair value of the warrant liabilities at the balance sheet dates:

	March 31, 2020		September 30, 2019
Series V warrants	$	595,981	$	674,442
Series W warrants		1,560,876		1,193,507
Series Z warrants		1,421,421		1,109,545
Series ZZ warrants		82,223		77,638
Series AA warrants		1,243,531		916,908
Series BB warrants		70,994		63,966
Series CC warrants		1,247,399		1,710,898
Series FF warrants		-		446,185
Series HH warrants		1,868		45,657
Series JJ warrants		-		66,599
Series LL warrants		-		182,965
Total warrant liabilities	$	6,224,293	$	6,488,310

The table below presents the gains/(losses) on the warrant liabilities for the six months ended March 31:

	2020			2019
Series S warrants	$	-		$	33
Series V warrants		78,461			494,852
Series W warrants		(367,369	)		616,028
Series Z warrants		(311,876	)		114,831
Series ZZ warrants		(4,585	)		12,638
Series AA warrants		(326,623	)		93,268
Series BB warrants		(7,028	)		7,736
Series CC warrants		(826,277	)		339,698
Series DD warrants		-			1,249,287
Series EE warrants		-			1,249,287
Series FF warrants		(319,706	)		34,603
Series GG warrants		-			106,750
Series HH warrants		(34,457	)		10,642
Series II warrants		-			115,343
Series JJ warrants		(64,992	)		15,926
Series KK warrants		-			113,467
Series LL warrants		(98,066	)		14,746
Net (loss)/gain on warrant liabilities	$	(2,282,518	)	$	4,589,135

The table below presents the losses on the warrant liabilities for the three months ended March 31:

	2020			2019
Series V warrants	$	(476,570	)	$	(61,480	)
Series W warrants		(518,743	)		(10,822	)
Series Z warrants		(322,425	)		(89,290	)
Series ZZ warrants		(19,432	)		(1,685	)
Series AA warrants		(391,601	)		(63,951	)
Series BB warrants		(6,597	)		(4,374	)
Series CC warrants		(803,596	)		(325,908	)
Series FF warrants		(312,517	)		(34,459	)
Series GG warrants		-			(106,032	)
Series HH warrants		(34,375	)		(10,309	)
Series II warrants		-			(115,246	)
Series JJ warrants		(64,862	)		(15,536	)
Series KK warrants		-			(114,628	)
Series LL warrants		(98,309	)		(13,451	)
Net loss on warrant liabilities	$	(3,049,027	)	$	(967,171	)

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.

Changes in Warrant Liabilities

On December 10, 2018, 1,360,960 Series DD and 1,360,960 Series EE warrants, with an exercise price of $4.50 expired.

On October 11, 2018, 327,729 Series S warrants, with an exercise price of $31.25 expired.

Exercise of Warrant Liabilities

The following warrants recorded as liabilities were exercised during the periods ended March 31, 2020.

	Three Months						Six Months
Warrants	Warrants Exercised		Exercise Price		Proceeds		Warrants Exercised		Exercise Price		Proceeds
Series CC		123,820	$	5.00	$	619,100		123,820	$	5.00	$	619,100
Series FF		68,048	$	3.91		265,812		68,048	$	3.91		265,812
Series HH		6,300	$	3.13		19,687		6,300	$	3.13		19,687
Series JJ		9,450	$	3.13		29,531		9,450	$	3.13		29,531
Series LL		26,398	$	3.59		94,867		26,398	$	3.59		94,867
		234,016			$	1,028,997		234,016			$	1,028,997

No warrants recorded as liabilities were exercised during the six and three months ended March 31, 2019.

2. Equity Warrants

Changes in Equity Warrants

On January 23, 2020, the expiration date of the Series N warrants was extended to February 18, 2021. The incremental cost of this extension was approximately $22,000, which was recorded as a deemed dividend in the financial statements for the six and three months ended March 31, 2020. The Series N warrants are held by the de Clara Trust, of which the Company’s CEO, Geert Kersten, is a beneficiary.

Exercise of Equity Warrants

The following warrants recorded as equity were exercised during the periods ended March 31, 2020.

	Three Months						Six Months
Warrants	Warrants Exercised		Exercise Price		Proceeds		Warrants Exercised		Exercise Price		Proceeds
Series NN		98,253	$	2.52	$	247,598		98,253	$	2.52	$	247,598
Series OO		30,000	$	2.52		75,600		40,000	$	2.52		100,800
Series SS		94,474	$	2.09		197,451		117,106	$	2.09		244,752
Series TT		77,857	$	2.24		174,400		178,125	$	2.24		399,000
Series VV		27,500	$	1.75		48,125		27,500	$	1.75		48,125
		328,084			$	743,174		460,984			$	1,040,275

The following warrants recorded as equity were exercised during the periods ended March 31, 2019.

	Three Months						Six Months
Warrants	Warrants Exercised		Exercise Price		Proceeds		Warrants Exercised		Exercise Price		Proceeds
Series PP		-		-		-		60,000	$	2.30	$	138,000
Series SS		13,158	$	2.09	$	27,500		165,790	$	2.09		346,501
Series TT		-		-		-		86,050	$	2.24		192,752
Series VV		1,385,000	$	1.75		2,423,750		1,385,000	$	1.75		2,423,750
Series WW		125,775	$	1.63		204,384		125,775	$	1.63		204,384
		1,523,933			$	2,655,635		1,822,615			$	3,305,387

3.  Options and Shares Issued to Consultants

During the six months ended March 31, 2020 and 2019, the Company issued 32,939 and 140,233 shares, respectively, of restricted common stock to consultants for services. The weighted average grant date fair value of the shares issued to consultants was $9.44 and $3.04 during the six months ended March 31, 2020 and 2019, respectively. During the three months ended March 31, 2020 and 2019, the Company issued 17,120 and 77,449 shares of restricted common stock to consultants for services. The weighted average grant date fair value of the shares issued to consultants was $11.53 and $2.89, respectively, during the three months ended March 31, 2020 and 2019. 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.

During the six months ended March 31, 2020 and 2019, the Company recorded total expense of approximately $347,000 and $511,000, respectively, relating to these consulting agreements. At March 31, 2020 and September 30, 2019, approximately $367,000 and $230,000, respectively, are included in prepaid expenses. At March 31, 2020, the Company has accrued $165,000 for shares to be issued. As of March 31, 2020, 10,000 options issued to consultants remained outstanding, all of which were issued from the Non-Qualified Stock Option plans and are fully vested.

4.  Securities Purchase Agreements

The Company has entered into Securities Purchase Agreements (SPA) with Ergomed plc, one of the Company’s Clinical Research Organizations responsible for managing the Company’s Phase 3 clinical trial, to facilitate payment of amounts due Ergomed. Under the Agreements, the Company issued Ergomed shares of common stock and the net proceeds from the sales of those shares would reduce outstanding amounts due Ergomed. Upon issuance, the Company expenses the full value of the shares as Other non-operating gain/loss and subsequently offsets the expense as amounts are realized through the sale by Ergomed and reduces accounts payable to Ergomed.

On January 9, 2019, the Company entered into an SPA under which it issued Ergomed 500,000 restricted shares of the Company’s common stock valued at approximately $1.3 million. No other shares were issued under the SPA during the periods presented.

The following table summarizes the Other Non-Operating Gains (Loss) for the six and three months ended March 31, 2020 and 2019 relating to these agreements:

	Six Months Ended				Three Months Ended
	3/31/2020		3/31/2019		3/31/2020		3/31/2019
Amount realized through the resale of shares	$	1,720,680	$	1,711,353	$	934,511	$	559,177
Fair value of shares upon issuance		-		1,290,000		-		1,290,000
Other non-operating gain (loss)	$	1,720,680	$	421,353	$	934,511	$	(730,823	)

On August 15, 2019, the Company entered into an SPA under which it issued Ergomed 250,000 restricted shares of the Company’s common stock. As of March 31, 2020, Ergomed held 20,250 shares for resale.