Annual report pursuant to Section 13 and 15(d)

COMMON STOCK OPTIONS

v3.3.1.900
COMMON STOCK OPTIONS
12 Months Ended
Sep. 30, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
COMMON STOCK OPTIONS

NOTE 9 - COMMON STOCK OPTIONS

 

The Company has determined the estimated value of the options granted to employees and non-employees in exchange for services and financing expenses using the Black-Scholes pricing model and the following assumptions: stock price at valuation, $1.20-10.11; expected term of five years, exercise price of $1.50-10.11, a risk free interest rate of 0.68-2.60 percent, a dividend yield of 0 percent and volatility of 81-277 percent.

 

On April 30, 2013, the Company granted 116,667 options to a board member. The Company calculated a fair value of $4.59 per option. Of the 116,667 options issued, 29,167 vested upon issuance and the remaining 87,500 vest in 33 percent tranches on the next three anniversary dates. For the years ended September 30, 2015, 2014, and 2013, 29,167, 58,333, and 29,167 options have vested, respectively, resulting in compensation expense of $133,813, $133,690, and $189,852, respectively.

 

On May 17, 2013, the Company granted 116,667 options to a board member. The Company calculated a fair value of $4.50 per option. Of the 116,667 options issued, 29,167 vested upon issuance and the remaining 87,500 vest in 33 percent tranches on the next three anniversary dates. For the years ended September 30, 2015, 2014, and 2013, 29,167, 58,333, and 29,167 options have vested, respectively, resulting in compensation expense of $131,285, $131,165, and $180,156, respectively.

 

On February 3, 2014, the Company granted 500,000 options, with an exercise price of $10.11 per share, to employees as part of its 2014 stock option plan. The Company calculated a fair value of $1,954,384 for the options. Of the 500,000 options issued, 125,000 vested upon issuance and the remaining 375,000 vest in 25 percent tranches on each anniversary of grant. For the years ended September 30, 2015, 2014, and 2013, 125,000, 125,000, and 0 options have vested, respectively, resulting in compensation expense of $488,596, $814,327, and $0, respectively.

 

On July 24, 2014, the Company granted 355,000 options, with an exercise price of $8.39 per share, to employees as part of its 2014 stock option plan. The Company calculated a fair value of $1,661,682 for the options. Of the 355,000 options issued, 88,750 vested upon issuance and the remaining 266,250 vest in 25 percent tranches on each anniversary of grant. During the 2015 Fiscal Year 30,000 options were forfeited as a result of grantee’s resignations and 10,000 vested options expired. The Compensation recorded on the vested options totaled $46,808. For the years ended September 30, 2015, 2014, and 2013, 78,750, 88,750, and 0 options have vested, respectively, resulting in compensation expense of $332,957, $610,436, and $0, respectively.

 

On September 5, 2014, the Company granted 60,000 options, with an exercise price of $7.77 per share, to an employee as part of its 2014 stock option plan. The Company calculated a fair value of $250,683 for the options. Of the 60,000 options issued, 15,000 vested upon issuance and the remaining 45,000 vest in 25 percent tranches on each anniversary of grant. For the years ended September 30, 2015, 2014, and 2013, 15,000, 15,000, and 0 options have vested, respectively, resulting in compensation expenses of $62,671, $86,957, and $0, respectively.

 

On January 6, 2015, the Company granted 140,000 options, with an exercise price of $8.19 per share, to employees as part of its 2014 stock option plan. The Company calculated a fair value of $529,252 for the options. Of the 140,000 options issued, 35,000 vested upon issuance and the remaining 105,000 vest in 25 percent tranches on each anniversary of grant. During the 2015 Fiscal Year 15,000 options were forfeited as a result of grantee’s resignations and 5,000 vested options expired. The Compensation recorded on the vested options totaled $18,902. For the years ended September 30, 2015, 2014, and 2013, 35,000, 0, and 0 options have vested, respectively, resulting in compensation expense of $275,563, $0, and $0, respectively.

 

On February 13, 2015, the Company granted 120,000 options, with an exercise price of $7.68 per share, to an employee as part of its 2014 stock option plan. The Company calculated a fair value of $411,962 for the options. Of the 250,000 options issued, 50,000 vested upon issuance and the remaining 150,000 vest in 25 percent tranches on each anniversary of grant. For the years ended September 30, 2015, 2014, and 2013, 50,000, 0, and 0 options have vested, respectively, resulting in compensation expense of $167,360, $0, and $0, respectively.

 

On March 1, 2015, the Company granted 200,000 options, with an exercise price of $7.06 per share, to an employee as part of its 2014 stock option plan. The Company calculated a fair value of $1,128,604 for the options. Of the 120,000 options issued, 30,000 vested upon issuance and the remaining 90,000 vest in 25 percent tranches on each December 31 2015, 2016 and 2017 respectively. For the years ended September 30, 2015, 2014, and 2013, 50,000, 0, and 0 options have vested, respectively, resulting in compensation expense of $456,420, $0, and $0, respectively.

 

On March 3, 2015, the Company granted 100,000 options, with an exercise price of $9.78 per share, to an employee as part of its 2014 stock option plan. The Company calculated a fair value of $509,845 for the options. Of the 100,000 options issued, 25,000 vested upon issuance and the remaining 75,000 vest in 25 percent tranches on each anniversary of grant. For the years ended September 30, 2015, 2014, and 2013, 25,000, 0, and 0 options have vested, respectively, resulting in compensation expense of $350,519, $0, and $0, respectively.

 

On March 10, 2015, the Company granted 546,000 options, with an exercise price of $10.14 per share, to employees as part of its 2014 stock option plan. The Company calculated a fair value of $2,700,392 for the options. Of the 546,000 options issued, 136,500 vested upon issuance and the remaining 409,500 vest in 25 percent tranches on each anniversary of grant. For the years ended September 30, 2015, 2014, and 2013, 136,000, 0, and 0 options have vested, respectively, resulting in compensation expense of $1,068,905, $0, and $0, respectively.

 

During the years ended September 30, 2015, 2014, and 2013 the Company recognized $3,579,788, $2,074,487 and $746,262 respectively, of expense related to vested options that were granted both in the current year and in prior years. Unamortized option expense as of September 30, 2015, 2014, and 2013 for all options outstanding amounted to approximately $4,462,655, $3,161,447, and $1,112,000, respectively.

 

Below is a table summarizing the options issued and outstanding as of September 30, 2015:

 

 

    Number
Outstanding
  Weighted - Average
Exercise Price
Outstanding at September 30, 2012       1,082,323     $ 1.69  
Granted       233,334     4.71  
Exercised       (182,322 )   1.69  
Forfeited       —       —  
Outstanding at September 30, 2013       1,133,335     $ 2.31  
Granted       915,000     9.29  
Exercised       —       —  
Forfeited       —       —  
Outstanding at September 30, 2014       2,048,335     $ 5.43  
Granted       1,106,000     9.04  
Exercised       —       —  
Forfeited       (45,000 )   8.32  
Expired       (348,334 )   1.79  
Outstanding at September 30, 2015       2,761,001     $ 7.27  
Exercisable at September 30, 2015       1,450,667     $ 5.74  
                     

As of September 30, 2015, the outstanding options have an intrinsic value of approximately $595,000.