STOCK OPTIONS AND WARRANTS

9 Months Ended

Jun. 30, 2016

Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract]

STOCK OPTIONS AND WARRANTS

NOTE F — 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 are summarized as follows:

	Number of  Shares			Weighted  Average  Exercise  Price Per  Share
Balance at October 1, 2015		6,027,654		$	3.54
Granted		1,300,000			4.29
Exercised		(1,260	)		(3.50	)
Cancelled or expired		(3,334	)		(11.79	)
Balance at June 30, 2016		7,323,060		$	3.67

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 (the “Incentive Plan”). In 2007, 2008, 2012 and 2015, 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 8,833,333 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. 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. As of June 30, 2016, a total of 275,572 shares have been issued and options to purchase 5,211,407 shares have been granted under the Incentive Plan.

Transactions involving stock options issued to employees and consultants are summarized as follows:

	Number of  Shares			Weighted  Average  Exercise  Price Per  Share			Aggregate  Intrinsic  Value
Outstanding at October 1, 2015		3,458,905		$	4.74
Granted		1,090,273			2.93
Exercised		(79,000	)		(2.86	)
Cancelled or expired		(55,313	)		(3.96	)
Outstanding at June 30, 2016		4,414,865		$	4.12
Vested at June 30, 2016		2,810,749		$	4.23		$	691,227
Non-vested at June 30, 2016		1,604,116					$	747,204

During the three and nine month periods ended June 30, 2016, the Company issued an aggregate of 550,000 and 1,090,273 options to employees, non-employee board of director members and members of the strategic advisory board, respectively. Included in these grants were 160,000 options granted to executives during the nine month period ended June 30, 2016 and 500,000 performance based options granted to an employee during May 2016. These options vest in tranches as certain performance conditions are met by the employee.

The fair value of options granted to employees and consultants during the three and nine month periods ended June 30, 2016 was determined using the Black Scholes Option Pricing Model with the following weighted average assumptions:

	Three  Months  Ended  June 30, 2016			Nine  Months  Ended  June 30, 2016
Stock price	$	3.06		$	3.05
Exercise price	$	2.82		$	2.93
Expected term, years		9.66			7.93
Dividend yield		—	%		—	%
Volatility		140	%		135	%
Risk free rate		1.75	%		2.00	%

The Company recorded $515,496 and $1,444,170 as stock compensation expense for the three and nine month periods ended June 30, 2016, respectively, and $1,015,361 (including $544,113 for stock option modifications) and $3,531,205 (including $673,176 for stock option modifications) for the three and nine month periods ended June 30, 2015, respectively. As of June 30, 2016, unrecorded compensation cost related to non-vested awards was $4,090,924, which is expected to be recognized over a weighted average period of approximately 4.95 years. The weighted average grant date fair value per share for options granted during the three and nine month periods ended June 30, 2016 was $2.97 and $2.84, respectively.