CAPITAL STOCK	12 Months Ended
Sep. 30, 2019
CAPITAL STOCK
CAPITAL STOCK	NOTE H – CAPITAL STOCK On October 31, 2019, the Company filed a Certificate of Amendment of its Certificate of Incorporation with the Secretary of State of the State of Delaware that effected a one-for-forty (1:40) reverse stock split of its common stock, par value $.001 per share, effective November 1, 2019. All warrant, option, share, and per share information in the consolidated financial statements gives retroactive effect to the one-for-forty reverse stock split that was effected on November 1, 2019. Common Stock Transactions subsequent to the Fiscal Year Ended September 30, 2019: On November 15, 2019, the Company closed an underwritten public offering (the “Offering”) in which, pursuant to the Underwriting Agreement dated November 13, 2019 by and between the Company and Maxim Group LLC (“Maxim”), as Representative of the Underwriters, the Company issued and sold 2,285,000 shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”) and 2,285,000 accompanying warrants each with the right to purchase one share of Common Stock at an exercise price of $5.25 per share (the “Common Warrants”). The shares of Common Stock and accompanying Common Warrants were sold at a combined offering price of $5.25 before underwriting discounts. The Common Stock and the Common Warrants are collectively referred to herein as the “Securities.” As part of the Offering, the Company granted Maxim an option to purchase an additional 342,750 shares of Common Stock and/or additional Common Warrants to purchase 342,750 shares of Common Stock (the “Option Warrants”) at the public offering price, less discounts and commissions, to cover any over-allotments made by the Underwriters in the sale and distribution of the Securities. The option to purchase additional shares of Common Stock and/or Option Warrants has not yet been exercised and may be exercised from time to time within 45 days after November 13, 2019. The gross proceeds of the offering, before deducting Underwriter discounts and commissions and other offering expenses, are approximately $12.0 million, or approximately $13.8 million if the Underwriters exercise in full their overallotment option. After deducting Underwriter fees and other estimated expenses related to the underwritten public offering, we estimate the aggregate net proceeds to be approximately $10.8 million, assuming the overallotment option is not exercised. Pursuant to the Warrant Agreement, each Common Warrant will be exercisable beginning on the date of issuance thereof and ending on November 15, 2024. The Common Warrant includes an adjustment provision that, subject to certain exceptions, reduces its exercise price if the Company issues Common Stock or Common Stock equivalents at a price lower than the then-current exercise price of the Common Warrant, subject to a minimum exercise price of $1.47 per share. Subject to limited exceptions, a holder of a Common Warrant will not have the right to exercise any portion of its Common Warrant if the holder, together with its affiliates, would beneficially own in excess of 4.99% (or, at the election of the holder, 9.99%) of the number of shares of Common Stock outstanding immediately after giving effect to such exercise (the “Beneficial Ownership Limitation”); provided, however, that upon 61 days’ prior notice to us, the holder may increase the Beneficial Ownership Limitation, provided that in no event shall the Beneficial Ownership Limitation exceed 9.99%. The exercise price and number of the shares of Common Stock issuable upon the exercise of the Common Warrant will be subject to adjustment in the event of any stock dividends and splits, reverse stock split, recapitalization, reorganization or similar transaction, as described in the Warrant Agreement. Common Stock Transactions during the Fiscal Year Ended September 30, 2019: On August 22, 2019, the Company issued and sold 38,704 shares of common stock at a price of $10.80 per share for total gross proceeds of $418,000 to a group of accredited investors, including its chief executive officer, president and chairman of the board of directors, its chief information officer, and a 5% or greater stockholder. On December 21, 2018, the Company entered into an underwriting agreement (the “Agreement”) with Maxim , as the sole underwriter and book running manager, with respect to the issuance and sale of an aggregate of 137,500 shares (the “Shares”) of Common Stock, together with warrants to purchase an aggregate of 137,500 shares of Common Stock (the “Warrants”) at an exercise price equal to $20.00 per share of Common Stock (the “Exercise Price”) in an underwritten public offering. The public offering price for each Share together with the accompanying Warrant was $20.00. Pursuant to the Agreement, the Company also granted Maxim a 45-day option to purchase an additional 20,625 Shares and/or additional Warrants to purchase 20,625 Shares to cover any over-allotments made by the underwriters in the sale and distribution of the Shares and Warrants. The gross proceeds of the offering, before deducting underwriter discounts and commissions and other offering expenses, were $2,750,000. The offering closed on December 26, 2018. On December 26, 2018, Maxim partially exercised its overallotment option and purchased an additional 20,000 Warrants at a price of $0.0000004 per Warrant. After deducting underwriting fees and other expenses related to the offering, the aggregate net proceeds were approximately $2,262,000. On January 25, 2019, the Company closed on the underwriters’ partial exercise of its over-allotment option for 12,500 shares of Common Stock for gross proceeds of $250,000. After deducting underwriting fees and other expenses related to the over-allotment option, the aggregate net proceeds were approximately $201,000. The total number of Common Stock and Warrants issued under this offering, including the exercise of the over-allotment option was 150,000 and 157,500, respectively. The gross proceeds to us were approximately $3.0 million and net proceeds after deducting underwriting expenses and other estimated offering expenses was approximately $2.5 million. The Warrants are immediately exercisable beginning on the date of issuance (the “Initial Exercise Date”). The Warrants will be exercisable for five years from the Initial Exercise Date, but not thereafter. The Warrants include an adjustment provision that, subject to certain exceptions, reduces their exercise price if the Company issues Common Stock or Common Stock equivalents at a price lower than the then-current exercise price of the Warrants, subject to a minimum exercise price of $5.60 per share. The exercise price and number of the shares of the Company’s Common Stock issuable upon the exercise of the Warrants will be subject to adjustment in the event of any stock dividends and splits, reverse stock split, recapitalization, reorganization or similar transaction, as described therein. In addition, on or after any trading day 75 days after the closing date of the offering, if the daily volume weighted average price of the Company’s Common Stock fails to exceed the Exercise Price, the aggregate number of warrant shares issuable in a cashless exercise shall equal the product of (i) the aggregate number of warrant shares that would be issuable upon exercise of the Warrants if such exercise were by means of a cash exercise and (ii) 0.70. As a result of the 2019 private placement offering of the Company’s common stock, the exercise price of these warrants was reduced to $12.00 per share. The incremental change in fair value of these warrants as a result of the triggering event was $78,785. Subsequently, as a result of the underwritten public offering on November 15, 2019, the exercise price of these warrants was further reduced to $5.60 per share. As a result of the Company’s stock price falling below $20.00, 143,252 warrants have been cashlessly exercised. These exercises resulted in the issuance of 100,617 shares of the Company’s Common Stock. As a result of this financing, the exercise price of the 68,375 warrants issued during December 2017 was reduced to an exercise price of $17.60 per share in accordance with the adjustment provision contained in the warrant agreement. The incremental change in fair value of these warrants as a result of the triggering event was $281,042. Common Stock Transactions during the Fiscal Year Ended September 30, 2018: On December 22, 2017, the Company entered into a securities purchase agreement with certain institutional investors for the purchase and sale of 68,375 shares of its common stock and warrants to purchase an aggregate of 68,375 shares of common stock in a registered direct offering with aggregate gross proceeds of $4,786,250, at a combined purchase price of $70.00 per share. The warrants will be immediately exercisable at a price of $80.00 per share of common stock and will expire five years from the date of issuance. After deducting placement agent fees and other estimated expenses related to the registered direct offering, the aggregate net proceeds were approximately $4,200,000. The warrants will be exercisable for five years from the grant date, but not thereafter. The warrants include an adjustment provision that, subject to certain exceptions, reduces their exercise price if the Company issues Common Stock or Common Stock equivalents at a price lower than the then-current exercise price of the Purchase Warrants, subject to a minimum exercise price of $17.60. The exercise price and number of the shares of our Common Stock issuable upon the exercise of the warrants will be subject to adjustment as set forth therein (including for stock dividends and splits, reverse stock split, recapitalization, reorganization or similar transaction). In addition, if and only if there is no effective registration statement registering, or no current prospectus available for, the resale of the Purchase Warrants, the Purchasers may exercise the Purchase Warrants by means of a “cashless exercise.”

NOTE H – CAPITAL STOCK

On October 31, 2019, the Company filed a Certificate of Amendment of its Certificate of Incorporation with the Secretary of State of the State of Delaware that effected a one-for-forty (1:40) reverse stock split of its common stock, par value $.001 per share, effective November 1, 2019. All warrant, option, share, and per share information in the consolidated financial statements gives retroactive effect to the one-for-forty reverse stock split that was effected on November 1, 2019.

Common Stock Transactions subsequent to the Fiscal Year Ended September 30, 2019:

On November 15, 2019, the Company closed an underwritten public offering (the “Offering”) in which, pursuant to the Underwriting Agreement dated November 13, 2019 by and between the Company and Maxim Group LLC (“Maxim”), as Representative of the Underwriters, the Company issued and sold 2,285,000 shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”) and 2,285,000 accompanying warrants each with the right to purchase one share of Common Stock at an exercise price of $5.25 per share (the “Common Warrants”). The shares of Common Stock and accompanying Common Warrants were sold at a combined offering price of $5.25 before underwriting discounts. The Common Stock and the Common Warrants are collectively referred to herein as the “Securities.”

As part of the Offering, the Company granted Maxim an option to purchase an additional 342,750 shares of Common Stock and/or additional Common Warrants to purchase 342,750 shares of Common Stock (the “Option Warrants”) at the public offering price, less discounts and commissions, to cover any over-allotments made by the Underwriters in the sale and distribution of the Securities. The option to purchase additional shares of Common Stock and/or Option Warrants has not yet been exercised and may be exercised from time to time within 45 days after November 13, 2019.

The gross proceeds of the offering, before deducting Underwriter discounts and commissions and other offering expenses, are approximately $12.0 million, or approximately $13.8 million if the Underwriters exercise in full their overallotment option. After deducting Underwriter fees and other estimated expenses related to the underwritten public offering, we estimate the aggregate net proceeds to be approximately $10.8 million, assuming the overallotment option is not exercised.

Pursuant to the Warrant Agreement, each Common Warrant will be exercisable beginning on the date of issuance thereof and ending on November 15, 2024.

The Common Warrant includes an adjustment provision that, subject to certain exceptions, reduces its exercise price if the Company issues Common Stock or Common Stock equivalents at a price lower than the then-current exercise price of the Common Warrant, subject to a minimum exercise price of $1.47 per share.

Subject to limited exceptions, a holder of a Common Warrant will not have the right to exercise any portion of its Common Warrant if the holder, together with its affiliates, would beneficially own in excess of 4.99% (or, at the election of the holder, 9.99%) of the number of shares of Common Stock outstanding immediately after giving effect to such exercise (the “Beneficial Ownership Limitation”); provided, however, that upon 61 days’ prior notice to us, the holder may increase the Beneficial Ownership Limitation, provided that in no event shall the Beneficial Ownership Limitation exceed 9.99%.

The exercise price and number of the shares of Common Stock issuable upon the exercise of the Common Warrant will be subject to adjustment in the event of any stock dividends and splits, reverse stock split, recapitalization, reorganization or similar transaction, as described in the Warrant Agreement.

Common Stock Transactions during the Fiscal Year Ended September 30, 2019:

On August 22, 2019, the Company issued and sold 38,704 shares of common stock at a price of $10.80 per share for total gross proceeds of $418,000 to a group of accredited investors, including its chief executive officer, president and chairman of the board of directors, its chief information officer, and a 5% or greater stockholder.

On December 21, 2018, the Company entered into an underwriting agreement (the “Agreement”) with Maxim , as the sole underwriter and book running manager, with respect to the issuance and sale of an aggregate of 137,500 shares (the “Shares”) of Common Stock, together with warrants to purchase an aggregate of 137,500 shares of Common Stock (the “Warrants”) at an exercise price equal to $20.00 per share of Common Stock (the “Exercise Price”) in an underwritten public offering. The public offering price for each Share together with the accompanying Warrant was $20.00. Pursuant to the Agreement, the Company also granted Maxim a 45-day option to purchase an additional 20,625 Shares and/or additional Warrants to purchase 20,625 Shares to cover any over-allotments made by the underwriters in the sale and distribution of the Shares and Warrants. The gross proceeds of the offering, before deducting underwriter discounts and commissions and other offering expenses, were $2,750,000. The offering closed on December 26, 2018. On December 26, 2018, Maxim partially exercised its overallotment option and purchased an additional 20,000 Warrants at a price of $0.0000004 per Warrant.

After deducting underwriting fees and other expenses related to the offering, the aggregate net proceeds were approximately $2,262,000.

On January 25, 2019, the Company closed on the underwriters’ partial exercise of its over-allotment option for 12,500 shares of Common Stock for gross proceeds of $250,000. After deducting underwriting fees and other expenses related to the over-allotment option, the aggregate net proceeds were approximately $201,000.

The total number of Common Stock and Warrants issued under this offering, including the exercise of the over-allotment option was 150,000 and 157,500, respectively. The gross proceeds to us were approximately $3.0 million and net proceeds after deducting underwriting expenses and other estimated offering expenses was approximately $2.5 million.

The Warrants are immediately exercisable beginning on the date of issuance (the “Initial Exercise Date”). The Warrants will be exercisable for five years from the Initial Exercise Date, but not thereafter.

The Warrants include an adjustment provision that, subject to certain exceptions, reduces their exercise price if the Company issues Common Stock or Common Stock equivalents at a price lower than the then-current exercise price of the Warrants, subject to a minimum exercise price of $5.60 per share. The exercise price and number of the shares of the Company’s Common Stock issuable upon the exercise of the Warrants will be subject to adjustment in the event of any stock dividends and splits, reverse stock split, recapitalization, reorganization or similar transaction, as described therein. In addition, on or after any trading day 75 days after the closing date of the offering, if the daily volume weighted average price of the Company’s Common Stock fails to exceed the Exercise Price, the aggregate number of warrant shares issuable in a cashless exercise shall equal the product of (i) the aggregate number of warrant shares that would be issuable upon exercise of the Warrants if such exercise were by means of a cash exercise and (ii) 0.70.

As a result of the 2019 private placement offering of the Company’s common stock, the exercise price of these warrants was reduced to $12.00 per share. The incremental change in fair value of these warrants as a result of the triggering event was $78,785. Subsequently, as a result of the underwritten public offering on November 15, 2019, the exercise price of these warrants was further reduced to $5.60 per share.

As a result of the Company’s stock price falling below $20.00, 143,252 warrants have been cashlessly exercised. These exercises resulted in the issuance of 100,617 shares of the Company’s Common Stock.

As a result of this financing, the exercise price of the 68,375 warrants issued during December 2017 was reduced to an exercise price of $17.60 per share in accordance with the adjustment provision contained in the warrant agreement. The incremental change in fair value of these warrants as a result of the triggering event was $281,042.

Common Stock Transactions during the Fiscal Year Ended September 30, 2018:

On December 22, 2017, the Company entered into a securities purchase agreement with certain institutional investors for the purchase and sale of 68,375 shares of its common stock and warrants to purchase an aggregate of 68,375 shares of common stock in a registered direct offering with aggregate gross proceeds of $4,786,250, at a combined purchase price of $70.00 per share. The warrants will be immediately exercisable at a price of $80.00 per share of common stock and will expire five years from the date of issuance.

After deducting placement agent fees and other estimated expenses related to the registered direct offering, the aggregate net proceeds were approximately $4,200,000.

The warrants will be exercisable for five years from the grant date, but not thereafter. The warrants include an adjustment provision that, subject to certain exceptions, reduces their exercise price if the Company issues Common Stock or Common Stock equivalents at a price lower than the then-current exercise price of the Purchase Warrants, subject to a minimum exercise price of $17.60. The exercise price and number of the shares of our Common Stock issuable upon the exercise of the warrants will be subject to adjustment as set forth therein (including for stock dividends and splits, reverse stock split, recapitalization, reorganization or similar transaction).

In addition, if and only if there is no effective registration statement registering, or no current prospectus available for, the resale of the Purchase Warrants, the Purchasers may exercise the Purchase Warrants by means of a “cashless exercise.”