STOCKHOLDERS EQUITY

6 Months Ended

Mar. 31, 2022

STOCKHOLDERS EQUITY

Stockholders' Equity

C. STOCKHOLDERS’ EQUITY

Proceeds from the Sale of Common Stock

In December 2020, the Company sold 1,000,000 shares of common stock at a public offering price of $14.65 per share and received aggregate proceeds of approximately $13.6 million.

Equity Compensation

Underlying share information for equity compensation plans as of March 31, 2022 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		76,829		N/A		213
Non-Qualified Stock Option Plans		11,787,200		11,198,714		N/A		178,258
Stock Bonus Plans		783,760		N/A		385,305		398,422
Stock Compensation Plans		634,000		N/A		153,195		462,395
Incentive Stock Bonus Plan		640,000		N/A		614,500		25,500

Underlying share information for equity compensation plans as of September 30, 2021 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		76,829		N/A		213
Non-Qualified Stock Option Plans		11,787,200		10,972,880		N/A		410,592
Stock Bonus Plans		783,760		N/A		363,086		420,641
Stock Compensation Plans		634,000		N/A		153,195		462,395
Incentive Stock Bonus Plan		640,000		N/A		614,500		25,500

Stock option activity:

	Six Months Ended March 31,
	2022		2021
Options granted		252,500		8,000
Options exercised		6,500		54,145
Options forfeited		20,166		42,165
Options expired		-		67

	Three Months Ended March 31,
	2022		2021
Options granted		1,500		500
Options exercised		-		48,845
Options forfeited		7,166		-
Options expired		-		12

During the six months ended March 31, 2022, the Company granted 250,000 performance-based stock options from the 2020 Non-Qualified Stock Option Plan to officers. Each option entitles the holder to purchase one share of the Company’s common stock at a price of $10.48 per share, the fair value on the date of issuance. The stock options will vest 100% upon approval of the first marketing application for any pharmaceutical based upon the Company’s Multikine technology in the USA, Canada, UK, Germany, France, Italy, Spain, Japan, or Australia.  None of the options will be exercisable before November 19, 2022. All options which have not vested as of November 18, 2031 will be canceled. On the grant date, the options were valued using a Monte Carlo Simulation approach. A Monte Carlo Simulation is a statistical technique that is used to model probabilistic systems and establish the probabilities for a variety of outcomes. However, because attainment of the performance condition cannot be considered probable, no compensation cost is recognized relating to these options as of March 31, 2022.  Management will re-assess the probability of achieving the performance condition at each reporting date. 

Stock-Based Compensation Expense

	Six months Ended March 31,
	2022		2021
Employees	$	6,655,002	$	6,579,051
Non-employees	$	402,270	$	552,664

	Three months Ended March 31,
	2022		2021
Employees	$	3,392,706	$	3,282,742
Non-employees	$	183,952	$	304,004

Employee compensation expense includes the expense related to options and restricted stock that is expensed over the vesting periods.  Non-employee expense includes the expense related to options and stock issued to consultants expensed over the period of the related service contracts.

Warrants and Non-Employee Options

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	8/18/2022	*
Series UU	6/11/2018		93,603	$	2.80	6/30/2022	*
Series X	1/13/2016		120,000	$	9.25	7/13/2022	*
Series Y	2/15/2016		26,000	$	12.00	8/15/2022	*
Series MM	6/22/2017		333,432	$	1.86	6/22/2022	*
Series NN	7/24/2017		200,087	$	2.52	7/24/2022		2
Series RR	10/30/2017		251,761	$	1.65	10/30/2022	*
Series SS	12/19/2017		200,000	$	2.09	12/18/2022	*
Series TT	2/5/2018		600	$	2.24	2/5/2023	*
Consultants	7/28/2017 –11/18/2020		15,000	$2.18 - $11.61		11/17/2022 -  7/27/2027	*

* No current period changes to these warrants

1. Warrant Liabilities

The table below presents the fair value of the warrant liabilities as of:

	March 31, 2022		September 30, 2021
Series Z warrants	$	-	$	64,787
Series AA warrants		-		276,035
Series CC warrants		-		94,961
Series HH warrants		-		1,597
Total warrant liabilities	$	-	$	437,380

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

	2022		2021
Series W warrants	$	-	$	73,570
Series Z warrants		64,787		(696,498	)
Series ZZ warrants		-		(11,530	)
Series AA warrants		276,035		(661,821	)
Series BB warrants		-		(16,201	)
Series CC warrants		24,372		(795,257	)
Series HH warrants		1,597		(444	)
Net gain (loss) on warrant liabilities	$	366,791	$	(2,108,181	)

The table below presents the net gains and (losses) on the warrant liabilities for the three months ended March 31:

	2022		2021
Series Z warrants	$	-	$	(974,861	)
Series ZZ warrants		-		(63,397	)
Series AA warrants		1,400		(995,629	)
Series BB warrants		-		(46,833	)
Series CC warrants		-		(959,602	)
Series HH warrants		795		(695	)
Net gain (loss) on warrant liabilities	$	2,195	$	(3,041,017	)

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.

During the six and three months ended March 31, 2022, 15,205 Series CC warrants were exercised at an exercise price of $5.00 for gross proceeds of $76,025.

The following warrants recorded as liabilities were exercised during the following periods.

	Six Months Ended March 31, 2021						Three Months Ended March 31, 2021
Warrants	Warrants Exercised		Exercise Price		Proceeds		Warrants Exercised		Exercise Price		Proceeds
Series Z		79,200	$	13.75	$	1,089,000		79,200	$	13.75	$	1,089,000
Series ZZ		800	$	13.75		11,000		800	$	13.75		11,000
Series AA		100,000	$	13.75		1,375,000		100,000	$	13.75		1,375,000
Series CC		102,298	$	5.00		511,490		97,298	$	5.00		486,490
		282,298			$	2,986,490		277,298			$	2,961,490

In February 2022, 100,000 Series AA warrants with an exercise price of $13.75 and 200 Series HH warrants with an exercise price of $3.13, expired. In December 2021, 640 Series CC warrants, with an exercise price of $5.00, expired. In November 2021, 184,800 Series Z warrants, with an exercise price of $13.75, expired.

On October 28, 2020, 688,930 Series W warrants, with an exercise price of $16.75, expired.

2. Equity Warrants

During the six and three months ended March 31, 2022, 10,000 and 5,500 Series NN warrants were exercised at an exercise price of $2.52 for gross proceeds of $25,200 and $13,860, respectively.

The following warrants recorded as equity were exercised during the following periods.

	Six Months Ended March 31, 2021						Three Months Ended March 31, 2021
Warrants	Warrants Exercised		Exercise Price		Proceeds		Warrants Exercised		Exercise Price		Proceeds
Series MM		316,272	$	1.86	$	588,265		316,272	$	1.86	$	588,265
Series NN		21,834	$	2.52		55,022		21,834	$	2.52		55,022
Series RR		70,089	$	1.65		115,647		70,089	$	1.65		115,647
Series SS		105,264	$	2.09		220,002		105,264	$	2.09		220,002
Series TT		210,482	$	2.24		471,480		200,482	$	2.24		449,080
		723,941			$	1,450,416		713,941			$	1,428,016

On December 7, 2020, the expiration date of the Series N warrants was extended six months from February 18, 2021 to August 18, 2021. The incremental cost of this extension was approximately $1,000, which was recorded as a deemed dividend in the financial statements for the six months ended March 31, 2021. The expiration date of the Series N warrants was later extended to August 18, 2022. The Series N warrants are held by the de Clara Trust, of which the Company’s CEO, Geert Kersten, is a beneficiary.

On December 7, 2020, the expiration date of the Series X warrants was extended six months from January 13, 2021 to July 13, 2021. The incremental cost of this extension was approximately $85,000, which was recorded as a deemed dividend in the financial statements for the six months ended March 31, 2021. The expiration date of the Series X warrants was later extended to July 13, 2022. The Series X warrants are held by the de Clara Trust.

On December 7, 2020, the expiration date of the Series Y warrants, which were issued in connection with a financing, was extended six months from February 15, 2021 to August 15, 2021. The incremental cost of this extension was approximately $41,000 and was recorded as additional paid-in capital. The expiration date of the Series Y warrants was later extended to August 15, 2022.

On December 7, 2020, the expiration date of Series UU warrants was extended six months from December 31, 2020 to June 30, 2021. These warrants were previously issued as an inducement to convert notes payable into shares of common stock. The incremental cost of this extension was $192 and was recorded as interest expense for the six months ended March 31, 2021. The expiration date of the Series UU warrants was later extended to June 30, 2022. The Series UU warrants are held by Geert Kersten, Patricia Prichep (current Officers of the Company) and the de Clara Trust.

3. Options and Shares Issued to Consultants

During the six months ended March 31, 2022 and 2021, the Company issued 43,495 and 28,530 shares, respectively, of restricted common stock to consultants for services. The weighted average grant date fair value of the shares issued to consultants was $7.05 and $17.66 during the six months ended March 31, 2022 and 2021, respectively. During the three months ended March 31, 2022 and 2021, the Company issued 25,475 and 13,486 shares, respectively, of restricted common stock to consultants for services. The weighted average grant date fair value of the shares issued to consultants was $5.00 and $23.47, respectively, during the three months ended March 31, 2022 and 2021.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.

No options were issued to consultants during the six and three months ended March 31, 2022. During the six months ended March 31, 2021, the Company issued to a consultant 5,000 options to purchase common stock with an exercise price of $11.61, an aggregate fair value of approximately $28,000 and an expiration date of November 17, 2022. As of March 31, 2022 and September 30, 2021, 15,000 options issued to consultants remained outstanding, all of which were issued from the Non-Qualified Stock Option plans and all of which are vested as of the balance sheet dates.

During the six months ended March 31, 2022 and 2021, the Company recorded total expense of approximately $402,000 and $553,000, respectively, relating to the share-based compensation under these consulting agreements. On March 31, 2022 and September 30, 2021, consulting fees of approximately $355,000 and $364,000, respectively, are included in prepaid expenses.

4. Securities Purchase Agreement

In prior years, the Company was party to a Securities Purchase Agreement (SPA) with Ergomed plc (Ergomed), one of the Company’s Clinical Research Organizations responsible for managing the Company’s Phase 3 clinical trial, to facilitate payment of amounts due to Ergomed.  Under the Agreement, the Company issued Ergomed shares of common stock and the net proceeds from the sales of those shares reduces outstanding amounts due Ergomed.  Upon issuance, the Company expensed the full value of the shares as other non-operating gain/loss and subsequently offset the gain or loss as amounts were realized through the sale by Ergomed and reduced accounts payable to Ergomed. Ergomed resold the final balance of shares issued in the quarter ended September 30, 2021.  No shares were issued during the periods presented. No sales were made by Ergomed during the six and three months ended March 31, 2022.  During the six and three months ended March 31, 2021, respectively, the Company realized approximately $0.7 million and $0.6 million through the sale by Ergomed of 39,500 and 30,500 shares of common stock and the Company reduced the payable to Ergomed and credited other operating gain by those amounts.