NOTE 5 – EQUITY 

Common Stock Warrants 

Below is a table summarizing the warrants issued and outstanding as of March 31, 2019 (“Price” reflects the weighted average exercise price per share): 

As of March 31, 2019, the warrants have a weighted average remaining term of 2.95 years and have no intrinsic value. 

Stock Based Compensation 

The Company’s Consolidated 2016 Stock Plan (“the Plan”) provides for granting stock options and restricted stock awards to employees, directors and consultants of the Company. The Company uses the Black-Scholes pricing model for determining the fair value of stock options and warrants granted as share based compensation. 

Warrants. During the six month period ended March 31, 2019, the Company did not recognize any expense related to warrants granted as stock based compensation. There is no unamortized expense as of March 31, 2019 for outstanding warrants issued as stock based compensation. Refer to the Common Stock Warrants table within this note for information regarding all outstanding warrants. 

Options. During the six month period ended March 31, 2019, the Company recognized $146,754 of expense related to options granted in prior years. Unamortized option expense as of March 31, 2019 for all options outstanding amounted to $139,254. The Company expects to recognize this compensation cost over a weighted-average period of .46 years. 

Below is a table summarizing the Company’s activity for the six month period ended March 31, 2019 (“Price” reflects the weighted average exercise price per share): 

As of March 31, 2019, the outstanding options have a weighted average remaining term of 3.52 years and no intrinsic value. 

Restricted Stock. During the six month period ended March 31, 2019, the Company did not recognize any expense related to restricted stock awards. As of March 31, 2019, all restricted stock shares are fully vested, and there is no remaining unamortized expense.

NOTE 7 – EQUITY

During fiscal 2018 and 2017, the Company issued 13,500 and 1,206,752 shares, respectively, of common stock primarily due to the exercise of warrants and capital raised from the sale of common stock. Refer to Note 8 for further detail on common stock warrants and options. 

In September 2017, an executive officer of the Company resigned. In accordance with his employment agreement, any nonvested shares of restricted stock issued in exchange for services are cancelled upon resignation. As of September 30, 2017, 750 shares of restricted stock were cancelled.

Public Offerings

On April 5, 2017, the Company entered into a securities purchase agreement with various purchasers pursuant to which the Company issued and sold to the purchasers in a registered offering an aggregate of 1,012,502 shares of its common stock, together with warrants (“Warrants”) exercisable for up to an aggregate of 708,753 shares of its common stock. The offering closed on April 10, 2017, and the Company received net proceeds of approximately $12.7 million, after deducting placement agent fees and offering expenses payable by the Company. 

The Warrants have an exercise price of $1.00 per share. Following the one year anniversary of the date the Warrants are issued, the holders of the Warrants may exercise the Warrants through a cashless exercise, in whole or in part. The Warrants are immediately exercisable and will expire on the five year anniversary of the date of the issuance. 

On December 7, 2016, the Company entered into a securities purchase agreement with various purchasers pursuant to which the Company issued and sold to the purchasers in a registered offering an aggregate of 194,250 shares of its common stock, together with Series A common stock purchase warrants (“Series A Warrants”) exercisable for up to an aggregate of 97,125 shares of common stock and Series B common stock purchase warrants (“Series B Warrants”) exercisable for up to an aggregate of 194,250 shares of common stock. The offering closed on December 13, 2016 and the Company received net proceeds of approximately $6.8 million, after deducting placement agent fees and offering expenses payable by the Company. 

The Series A Warrants have an exercise price of $55 per share, are immediately exercisable, and will expire on the five year anniversary of the date of issuance. The Series B Warrants were immediately exercisable and expired on the six month anniversary of the date of issuance. No Series B Warrants were exercised prior to their expiration.