WARRANTS, STOCK OPTIONS AND RESTRICTED STOCK UNITS

6 Months Ended

Mar. 31, 2023

WARRANTS, STOCK OPTIONS AND RESTRICTED STOCK UNITS

WARRANTS, STOCK OPTIONS AND RESTRICTED STOCK UNITS

NOTE E —WARRANTS, STOCK OPTIONS AND RESTRICTED STOCK UNITS

Warrants

The following table summarizes the changes in warrants outstanding. These warrants were granted as part of financing transactions, as well as in lieu of cash compensation for services performed or as financing expenses in connection with the sales of the Company’s Common Stock.

Transactions involving warrants are summarized as follows:

		Weighted
		Average
		Exercise
	Number of	Price Per
	Shares	Share
Balance at October 1, 2022	7,313,963	$	3.68
Granted	—		—
Exercised	—		—
Cancelled or expired	(18,375)		17.60
Balance at March 31, 2023	7,295,588	$	3.65

Options

For the three and six-month periods ended March 31, 2023, the Company granted 308,333 options to certain officers of the Company. These options have a ten-year term and vest 25% per year commencing on the first anniversary of the grant date. Also, during the three and six-month periods ended March 31, 2023, the Company granted 694,670 options to non-employee board of director members. The options granted to non-employee board of directors have a ten-year term and vest on the one-year anniversary of the date of grant.

The fair value of options granted during the three and six-month periods ended March 31, 2023, 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 during the three and six-month periods ended March 31, 2023 was calculated using the following weighted average assumptions: stock price $1.27; exercise price $1.27; expected term 5.74 years; dividend yield 0; volatility 157%; and risk-free rate of 3.64%. The weighted average grant date fair value per share for the options granted during the three and six-month periods ended March 31, 2023 was $1.20.

Restricted Stock Units

During the three and six-month periods ended March 31, 2023, the Company granted 282,640 restricted stock units (“RSUs”) to certain officers of the Company. These RSUs vest on the first anniversary of the grant date. The fair value of the RSUs granted was the closing stock price on the date of grant.