Quarterly report pursuant to Section 13 or 15(d)

Note 5 - Stock-based Compensation

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Note 5 - Stock-based Compensation
9 Months Ended
Jun. 30, 2022
Notes to Financial Statements  
Share-Based Payment Arrangement [Text Block]

5. STOCK-BASED COMPENSATION

 

2013 Stock Incentive Plan

 

On June 18, 2013, the Company established the 2013 Stock Incentive Plan (the “2013 Plan”). Under the 2013 Plan, during the fiscal year ended September 30, 2021, a maximum number of 31,114,256 shares of the Company’s authorized and available Common Stock could be issued in the form of options to purchase common stock (“options”), stock appreciation rights, sales or bonuses of restricted Common Stock (“Restricted Stock”), restricted stock units or dividend equivalent rights, and an award may consist of one such security or benefit, or two or more of them in any combination or alternative. The 2013 Plan provides that on the first business day of each fiscal year commencing with fiscal year 2014, the number of shares of the Company’s Common Stock reserved for issuance under the 2013 Plan for all awards except for incentive stock option awards will be subject to increase by an amount equal to the lesser of (A) 3,000,000 shares, (B) four percent of the number of shares outstanding on the last day of the immediately preceding fiscal year of the Company, or (C) such lesser number of shares as determined by the Company’s Board of Directors (the “Board”). The exercise price of each option shall be the fair value as determined in good faith by the Board at the time each option is granted. On October 1, 2021, the aggregate number of authorized shares under the 2013Plan was further increased by 3,000,000 shares to a total of 34,114,256 shares.

 

The exercise price of each option is equal to the closing price of a share of the Company’s Common Stock on the date of grant.

 

Share-Based Awards

 

During the nine months ended June 30, 2022, the Company awarded 475,000 options to employees and directors and 200,000 options to consultants to purchase shares of Common Stock under the 2013 Plan.

 

Share-based compensation expense for awards granted during the nine months ended June 30, 2022 was based on the grant date fair value estimated using the Black-Scholes Model.

 

Common Stock Options

 

Stock compensation activity under the 2013 Plan for the nine months ended June 30, 2022 follows:

 

   

Option

Shares Outstanding

   

Weighted

Average

Exercise Price

   

Weighted

Average

Remaining

Contractual Term (years)

   

Aggregate

Intrinsic Value

 

Outstanding at September 30, 2021

    24,899,014     $ 0.29       1.83     $ 140,151  

Awarded

    675,000       0.06              

Forfeited/Cancelled

    (3,083,818

)

    0.33              

Outstanding at June 30, 2022

    22,490,196       0.28       1.47        

Vested at June 30, 2022

    19,135,976       0.31       1.70        

Vested and expected to vest at June 30, 2022

    22,490,196       0.28       1.47        

 

As of June 30, 2022, 5,508,158 shares are available for future grants under the 2013 Plan.

 

Share-based compensation expense recorded in the Company’s Consolidated Statements of Operations for the three months ended June 30, 2022 and 2021 resulting from options awarded to the Company’s employees, directors and consultants was approximately $81,000 and $94,000, respectively. Of this amount, during the three months ended June 30, 2022 and 2021, $29,000 and $35,000, respectively, were recorded as research and development expense, and $52,000 and $59,000, respectively were recorded as general and administrative expense in the Company’s Consolidated Statements of Operations.

 

Share-based compensation expense recorded in the Company’s Consolidated Statements of Operations for the nine months ended June 30, 2022 and 2021 resulting from options awarded to the Company’s employees, directors and consultants was approximately $367,000 and $269,000, respectively. Of this amount during the nine months ended June 30, 2022 and 2021, $123,000 and $89,000, respectively, were recorded as research and development expense, and $245,000 and $180,000, respectively, were recorded as general and administrative expense in the Company’s Consolidated Statements of Operations.

 

During the nine months ended June 30, 2022 and 2021, no options awarded were exercised.

 

As of June 30, 2022, there is approximately $230,633 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 1.79 years.

 

Restricted Stock

 

Restricted Stock activity under the 2013 Plan for the nine months ended June 30, 2022 and 2021, in shares, follows:

 

   

Nine Months Ended

 
   

June 30, 2022

   

June 30, 2021

 

Non Vested at September 30, 2021 and 2020

    450,000        

Awarded

          550,000  

Vested

    (275,000

)

    (550,000 )

Forfeited

           

Non Vested at June 30, 2022 and 2021

    175,000        

 

The weighted average Restricted Stock award date fair value information for the nine months ended June 30, 2022 and 2021 follows:

 

   

Nine Months Ended

 
   

June 30, 2022

   

June 30, 2021

 

Non Vested at September 30, 2021 and 2020

  $ 0.10     $  

Awarded

          0.19  

Vested

    (0.10

)

    (0.19 )

Forfeited

           

Non Vested at June 30, 2022 and 2021

  $ 0.10     $  

 

For the three months ended June 30, 2022 and 2021, compensation expense recorded for the Restricted Stock awards was approximately $10,000 and $0, respectively. For the nine months ended June 30, 2022 and 2021, compensation expense recorded for the Restricted Stock awards was approximately $30,000 and $104,000, respectively.