NOTE I – STOCK OPTIONS AND WARRANTS

Warrants

Transactions involving warrants (see Note H) are summarized as follows:


		Weighted Average
	Number of	Exercise Price Per
	Shares	Share
Balance at October 1, 2018	305,217	$	129.60
Granted	258,502		18.36
Exercised	(199,127)		(18.42)
Cancelled or expired	(101,000)		(87.70)
Balance, September 30, 2019	263,592	$	131.12

Stock Options

In 2005, the Board of Directors and the holders of a majority of the outstanding shares of Common Stock approved the 2005 Incentive Stock Plan, as amended and restated as of January 21, 2015 (the "Incentive Plan"). On March 27, 2019, the Board of Directors approved an amendment to the Incentive Plan, which was approved by shareholders on May 16, 2019. The amendment increases the number of shares of Common Stock that can be issued as stock awards and stock options thereunder from an aggregate of 208,334 to an aggregate of 358,334. The number of shares of Common Stock that can be covered by awards made to any participant in any calendar year is 20,834 shares. The Incentive Plan’s expiration date is January 25, 2025.

The Incentive Plan is designed to retain directors, executives, and selected employees and consultants by rewarding them for making contributions to the Company's success with an award of options to purchase shares of Common Stock. As of September 30, 2019, a total of 6,894 shares have been issued and options to purchase 212,271 shares have been granted under the Incentive Plan.

Transactions involving stock options issued are summarized as follows:


						Weighted
		Weighted Average		Aggregate		Average
	Number of	Exercise Price Per		Intrinsic		Contractual
	Shares	Share		Value		Life (years)
Outstanding at October 1, 2018	154,676	$	125.16
Granted	86,349		100.65
Exercised	—		—
Cancelled or expired	(41,630)		195.96
Outstanding at September 30, 2019	199,395	$	99.68
Vested at September 30, 2019	162,112		116.50	$	—	6.18
Non-vested at September 30, 2019	37,283		27.01	$	—	9.48

For the fiscal year ended September 30, 2019, the Company issued an aggregate of 86,349 (including award modifications of 35,040) options to employees, consultants, members of the strategic advisory board and non-employee board of director members.

For the fiscal year ended September 30, 2018, the Company issued an aggregate of 54,704 (including award modifications of 16,667) options to employees, consultants, members of the strategic advisory board and non-employee board of director members. Included in these grants was 12,500 options granted to executives.

The fair value of options granted during the fiscal years ended September 30, 2019 and 2018 was determined using the Black Scholes Option Pricing Model. For the purposes of the valuation model, the Company used the simplified method for determining the granted options expected lives. The simplified method is used since the Company does not have adequate historical data to utilize in calculating the expected term of options. The fair value for options granted was calculated using the following weighted average assumptions:


	2019			2018
Stock price	$	32.82		$	52.40
Exercise price	$	100.65		$	80.00
Expected term		4.40			4.42
Dividend yield		—			—
Volatility		89	%		86	%
Risk free rate		2.43	%		2.70	%

The Company recorded $1,129,110 and $1,356,351 as stock compensation expense within selling, general and administrative for fiscal years ended September 30, 2019 and 2018, respectively. Included in this amount is $221,046 and $145,053 for the fiscal years ended September 30, 2019 and 2018, respectively for employee stock option modifications. These modifications extended the terms of the options for employees in fiscal 2019 and extended the terms of the options for former employees in fiscal 2019 and 2018. As of September 30, 2019, unrecorded compensation cost related to non-vested awards was $434,553 which is expected to be recognized over a weighted average period of approximately 0.61 years. The weighted average grant date fair value per share for options granted during the fiscal years ended September 30, 2019 and 2018 was $11.51 and $30.00, respectively.