Common Stock

During the year ended September 30, 2023, the Company issued 3,436,712 shares of Common Stock, par value $0.001, as follows: (i) 250 shares issued in connection with the vesting of a restricted stock grant; (ii) 3,344,321 shares issued in connection with certain financing activities involving the sale of Common Stock and warrants to certain accredited investors in exchange for the net cash proceeds of $2,209,839 (the “Bridge Offering”); (iii) 20,210 inducement shares issued in connection with the closing of the Second Notes and Third Notes; (iv) 12,019 shares issued in connection with the exchange of Series G and Series H warrants for Common Stock; and (v) 59,912 shares issued in connection with the conversion of the Company’s outstanding Series 1 Notes into Common stock.

Common Stock Options

Common Stock Options activity under the 2013 Plan for the year ended September 30, 2023 and 2022 follows:

During the year ended September 30, 2022, the Company granted 2,375 options to employees and directors and 4,250 options to consultants to purchase shares of common stock under the 2013 Plan. The stock options issued to employees and directors vest over a period of 36 months, and options issued to consultants vest over a period of 12 months. The weighted average exercise price for all options was $10.02. Options issued to employees and consultants expire in 5 years. Options issued to management and directors expire after 10 years. Total fair value of the stock options issued was $47,609 using the Black-Scholes Option Pricing Model. The following assumptions were used to calculate the fair value - expected volatility, 86.8% - 98.5%, risk-free interest rate, 1.5% - 3.5%, expected dividend yield, 0%, expected term, 3.6 - 5.8 years.

During the year ended September 30, 2023, the Company granted 20,875 options to employees and directors and 3,625 options to consultants to purchase shares of common stock under the 2013 Plan. The stock options issued to employees vest over a period 36 months, and options issued to consultants and directors vest over a period of 12 months. The exercise price for all options granted was $8.02. Options issued to employees and consultants expire in 5 years. Options issued to management and directors expire after 10 years. Total fair value of the stock options issued $156,275 using the Black-Scholes Option Pricing Model. The following assumptions were used to calculate the fair value - expected volatility, 102.8% - 103. 4 %, risk-free interest rate, 3.8% - 4.0%, expected dividend yield, 0%, expected term, 4.1 – 5.8 years.

Pursuant to the vesting terms of the stock options, Share-based compensation expense recorded in the Company’s Consolidated Statements of Operations for the year ended September 30, 2023 and 2022 resulting from stock options awarded to the Company’s employees, directors and consultants was approximately $246,000 and $459,000, respectively. Of this amount during the years ended September 30, 2023 and 2022, $57,000 and $148,000, respectively, were recorded as research and development expenses, and $189,000 and $311,000, respectively were recorded as general and administrative expenses in the Company’s Consolidated Statements of Operations.

As of September 30, 2023, there is approximately $162,000 of unrecognized compensation expense related to unvested stock-based compensation arrangements granted under the 2013 Plan. That cost is expected to be recognized over a weighted average period of 1.80 years. As of September 30, 2023, 0 shares are available for future grants under the 2013 Plan as the plan is now expired.

Common Stock Warrants

Common Stock Warrants activity for the year ended September 30, 2023 and 2022 follows:

Restricted Stock

On July 30, 2021, the Company awarded 750 shares of Restricted Stock to an employee. The shares subject to this grant were awarded under the 2013 Plan and 250 shares vest on each of the following dates: January 12, 2022, July 12, 2022, and January 12, 2023.

On September 27, 2021, the Company awarded 1,500 shares of Restricted Stock to a consultant. The shares subject to this grant were awarded under the 2013 Plan and vested in three separate tranches on January 12, 2022, July 12, 2022 and January 12, 2023. 

Restricted stock activity in shares under the 2013 Plan for the years ended September 30, 2023 and 2022 follows:

The weighted average restricted stock award date fair value information for the years ended September 30, 2023 and 2022 follows:

For the years ended September 30, 2023 and 2022 compensation expense recorded for the restricted stock awards was approximately $3,000 and $40,000, respectively. As of September 30, 2023, there is no unrecognized compensation expense related to unvested stock-based compensation arrangements granted under the 2013 Plan.