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STOCK OPTIONS AND WARRANTS
6 Months Ended
Mar. 31, 2015
Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract]  
STOCK OPTIONS AND WARRANTS
NOTE H - STOCK OPTIONS AND WARRANTS
 
Warrants
 
The following table summarizes the changes in warrants outstanding and the related prices for the shares of common stock issued to non-employees of the Company. These warrants were granted in lieu of cash for services performed or financing expenses in connection with the sale of common stock.
 
Transactions involving warrants (see Notes D, E and G) are summarized as follows:
 
 
 
 
 
 
 
 
 
Number of
Shares
 
 
Weighted
Average Exercise
Price Per Share
 
Balance at October 1, 2014
 
 
945,166
 
 
$
9.59
 
Granted
 
 
3,912,958
 
 
 
3.51
 
Exercised
 
 
(—
)
 
 
(—
)
Cancelled or expired
 
 
(404,289
)
 
 
(13.66
)
Balance at March 31, 2015
 
 
4,453,835
 
 
$
3.88
 
 
 
Employee 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. In 2007, 2008 and 2012, the Board of Directors and holders of a majority of the outstanding shares of common stock approved various increases in the number of shares of common stock that can be issued as stock awards and stock options thereunder to an aggregate of 5,833,334 shares and the number of shares of common stock that can be covered by awards made to any participant in any calendar year to 833,334 shares. On January 21, 2015, the Board of Directors approved an amendment to the 2005 Incentive Stock Plan, which is subject to shareholder approval. The amendment increases the number of shares of common stock that can be issued as stock awards and stock options thereunder to an aggregate of 8,333,333. The amendment also extends the Plan’s expiration date to January 25, 2025.
 
The 2005 Incentive Stock Plan is designed to retain directors, executives, and selected employees and consultants by rewarding them for making contributions to our success with an award of options to purchase shares of common stock. As of March 31, 2015 a total of 218,752 shares have been issued and options to purchase 4,250,628 shares have been granted under the 2005 Incentive Stock Plan.
 
Transactions involving stock options issued to employees are summarized as follows:
 
 
 
 
 
 
 
 
 
 
 
Number of
Shares
 
Weighted Average
Exercise
Price Per
Share
 
 
Aggregate
Intrinsic
Value
 
Outstanding at October 1, 2014
2,909,046
 
$
4.74
 
 
 
 
 
Granted
900,509
 
 
2.86
 
 
 
 
 
Exercised
 
 
 
 
 
 
 
Cancelled or expired
(661
)
 
(9.77
)
 
 
 
 
Outstanding at March 31, 2015
3,808,894
 
$
4.30
 
 
 
 
 
Vested at March 31, 2015
2,852,150
 
$
3.99
 
 
$
0.44
 
Non-vested at March 31, 2015
956,744
 
 
 
 
 
$
0.19
 
 
For the three and six-month periods ended March 31, 2015, the Company issued 31,667 and 900,509, options to employees, consultants and non-employee board of director members, respectively. Included in these grants for the three and six month periods was 30,000 and 450,000 options granted to executives, respectively. 
 
The fair value of options granted during the three and six month periods ended March 31, 2015 was determined using the Black Scholes Option Pricing Model with the following weighted average assumptions:
Three
Months
Ended
March 31,
2015
Six
Months
Ended
March
31, 2015
Stock price
$ 3.42 $ 2.86
Exercise price
$ 3.42 $ 2.86
Expected term, years 6.12 4.91
Dividend yield
% %
Volatility
139 % 132 %
Risk free rate
1.69 % 1.59 %
 
The Company recorded $517,320 and $547,784 as stock compensation expense for the three month periods ended March 31, 2015 and 2014, respectively, and $2,515,843 (including $132,063 for stock option modifications) and $1,313,331 for the six month periods ended March 31, 2015 and 2014, respectively for the vesting portion of all options. As of March 31, 2015, unrecorded compensation cost related to non-vested awards was $3,123,989 which is expected to be recognized over a weighted average period of approximately 2.58 years. The weighted average grant date fair value for options granted during the three and six month periods ended March 31, 2015 was $90,497 and $1,131,341, respectively.