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C. STOCKHOLDERS EQUITY

6 Months Ended

Mar. 31, 2015

Stock options, stock bonuses and compensation granted by the Company as of March 31, 2015 are as follows:

Name of Plan	Total Shares Reserved Under Plans		Shares Reserved for Outstanding Options		Shares Issued as Stock Bonus		Remaining Options/Shares Under Plans

Incentive Stock Options Plans		1,960,000		1,708,331		N/A		5,969
Non-Qualified Stock Option Plans		5,680,000		5,055,402		N/A		67,679
Stock Bonus Plans		1,594,000		N/A		1,303,491		289,753
Stock Compensation Plan		1,350,000		N/A		1,316,949		-
Incentive Stock Bonus Plan		16,000,000		N/A		15,600,000		400,000

Stock options granted and forfeited during the six and three months ended March 31, 2015 and 2014 are as follows:

	Six Months Ended March 31,
	2015		2014
Granted		2,000		743,040
Forfeited		109,416		-

	Three Months Ended March 31,
		2015		2014
Granted		1,000		743,040
Forfeited		11,916		-

During the three months ended March 31, 2015, 100,000 shares of non-vested restricted stock were forfeited.

Stock-Based Compensation Expense

	Six Months Ended March 31,
	2015		2014
Employees	$	3,951,854	$	1,030,429
Non-employees	$	300,129	$	421,509

	Three Months Ended March 31,
	2015		2014
Employees	$	892,063	$	520,151
Non-employees	$	110,985	$	206,789

During the six and three months ended March 31, 2015 and 2014, employee compensation expense included options issued or vested and restricted stock.

Derivative Liabilities, Warrants and Other Options

Below is a chart showing the derivative liabilities, warrants and other options outstanding at March 31, 2015:

Warrant	Issue Date	Shares Issuable upon Exercise of Warrant		Exercise Price		Expiration Date	Reference

Series H	1/26/12		1,200,000	$	5.00	8/1/15		1
Series Q	6/21/12		1,200,000	$	5.00	12/22/15		1
Series R	12/6/12		2,625,000	$	4.00	12/6/16		1
Series S	10/11/13 -10/24/14		25,928,010	$	1.25	10/11/18		1
Series U	4/17/14		445,514	$	1.75	10/17/17		1
Series L (repriced)	4/18/07		70,000	$	2.50	4/2/15		2
Series N	8/18/08		2,844,627	$	0.53	8/18/15		2
Series P	2/10/12		590,001	$	4.50	3/6/17		2
Consultants	10/14/05– 3/30/15		188,000	$	0.85-$20.00	10/14/15 -3/29/2018		3

1.	Derivative Liabilities

The table below presents the derivative instruments outstanding at the balance sheet dates and their respective balances:

	March 31, 2015		September 30, 2014
Series A through E warrants	$	-	$	6,105
Series H warrants		12,000		12,000
Series Q warrants		12,000		12,000
Series R warrants		131,250		157,500
Series S warrants		8,296,963		5,197,352
Series U warrants		133,596		120,289
Total derivative liabilities	$	8,585,809	$	5,505,246

The table below presents the gains and (losses) on the derivative instruments for the six months ended March 31:

	2015			2014
Series A through E warrants	$	6,105		$	(24,423	)
Series F and G warrants		-			(36,666	)
Series H warrants		-			(36,000	)
Series N warrants		-			(1,404,027	)
Series Q warrants		-			(72,000	)
Series R warrants		26,250			(183,750	)
Series S warrants		(2,638,874	)		(3,764,665	)
Series U warrants		(13,307	)		-
Net loss on derivative instruments	$	(2,619,826	)	$	(5,521,531	)

The table below presents the losses on the derivative instruments for the three months ended March 31:

	2015			2014
Series A through E warrants	$	-		$	(24,423	)
Series F and G warrants		-			(36,666	)
Series H warrants		-			(60,000	)
Series N warrants		-			(914,273	)
Series Q warrants		-			(96,000	)
Series R warrants		(105,000	)		(315,000	)
Series S warrants		(4,589,257	)		(5,685,986	)
Series U warrants		(88,539	)		-
Net loss on derivative instruments	$	(4,782,796	)	$	(7,132,348	)

The Company reviews all outstanding warrants in accordance with the requirements of ASC 815. This topic provides that an entity should use a two-step approach to evaluate whether an equity-linked financial instrument (or embedded feature) is indexed to its own stock, including evaluating the instrument’s contingent exercise and settlement provisions. The warrant agreements provide for adjustments to the exercise price for certain dilutive events. Under the provisions of ASC 815, the warrants are not considered indexed to the Company’s stock because future equity offerings or sales of the Company’s stock are not an input to the fair value of a “fixed-for-fixed” option on equity shares, and equity classification is therefore precluded.

In accordance with ASC 815, derivative liabilities must be measured at fair value upon issuance and re-valued at the end of each reporting period through expiration. Any change in fair value between the respective reporting dates is recognized as a gain or loss.

Issuance of additional Warrants

On October 24, 2014, the Company closed an underwritten public offering of 7,894,737 shares of common stock and 1,973,684 Series S warrants to purchase shares of common stock. Additionally, on October 21, 2014, the Company sold 1,320,000 shares of common stock and 330,000 Series S warrants to purchase shares of common stock in a private offering. For every four shares of common stock sold in these offerings, investors were issued one Series S warrant to purchase one share of common stock. The common stock and Series S warrants were sold at a combined per unit price of $0.76 for net proceeds of approximately $6.4 million, net of underwriting discounts and commissions and offering expenses. The Series S warrants may be exercised at a price of $1.25 and expire on October 11, 2018. The Series S warrants trade on the NYSE MKT under the symbol CVM WS.

The initial cost of the Series S warrants of $460,737 was added to the existing Series S warrant liability. As of March 31, 2015, the total Series S warrant liability was adjusted to fair value as noted in the above table.

Warrants Exercised

During the six and three months ended March 31, 2015, no derivative warrants were exercised. During the six and three months ended March 31, 2014, 1,601,112 Series S warrants and 106,793 Series N warrants were exercised. The fair value of the Series S warrants on the date of exercise was $838,144. The fair value of the Series N warrants on the date of exercise was $137,000. The Company received cash proceeds of $2,001,390 for the Series S warrants and $7,424 for 14,078 of the Series N warrants exercised. The remaining 92,715 Series N warrants were exercised in a cashless exercise.

Expiration of Warrants

On October 6, 2014, 1,200,000 Series F warrants, with an exercise price of $4.00, expired. The fair value of the Series F warrants was $0 on the date of expiration. On October 17, 2014, 1,782,057 Series T warrants, with an exercise price of $1.58, expired. The fair value of the Series T warrants was $0 on the date of expiration. On December 24, 2014, 130,347 Series A warrants, with an exercise price of $5.00, expired. The fair value of the warrants on the date of expiration was $1,303. On January 8, 2015, 16,750 Series A warrants, with an exercise price of $5.00, expired. The fair value of the Series A warrants was $0 on the date of expiration. On February 20, 2015, 463,487 Series C warrants, with an exercise price of $5.50, expired. The fair value of the Series C warrants was $0 on the date of expiration. During the six and three months ended March 31, 2014, no derivative warrants expired.

2.	Equity-based warrants

During the six and three months ended March 31, 2015, no equity-based warrants were exercised. During the six and three months ended March 31, 2014, 500,000 Series M warrants were exercised, and the Company received cash proceeds of $500,000 for the Series M warrants exercised.

On December 24, 2014, 164,824 warrants held by an officer or director, with an exercise price of $4.00, expired. On January 6, 2015, 184,930 warrants held by an officer or director, with an exercise price of $5.00, expired. During the six and three months ended March 31, 2014, 758,438 equity-based warrants expired.

3.	Options and shares issued to Consultants

As of March 31, 2015, 188,000 options issued to consultants as payment for services remained outstanding, of which 180,000 options were issued from the Non-Qualified Stock Option plans.

On December 15, 2014, the Company entered into a one-year consulting agreement for services to be provided through December 15, 2015. In consideration for services provided, the Company agreed to issue the consultant 100,000 restricted shares in three installments – 34,000 in December 2014, 33,000 on May 15, 2015, and 33,000 on August 15, 2015. Accordingly, during the six months ended March 31, 2015, the Company issued the consultant 34,000 shares of restricted stock at the fair market value of $0.57 per share. The aggregate fair market value of $19,380 was recorded as a prepaid expense and is being charged to general and administrative expense over the period of service. During the six months ended March 31, 2014, the Company had previously entered into a one-year consulting agreement with this consultant and issued 100,000 restricted shares for an aggregate fair market value of $108,710, which was recorded as a prepaid expense and charged to general and administrative expense over the period of service.

On October 20, 2013, the Company entered into a consulting agreement for services to be provided through October 19, 2016. In consideration for services provided, the Company agreed to issue the consultant 34,164 restricted shares each month of the agreement, with the first three months being issued in advance. During the six months ended March 31, 2015 and 2014, the Company issued the consultant 204,984 shares of restricted stock at the fair market value of $162,279 and $210,109, respectively. The aggregate fair market value was recorded as a prepaid expense and is being charged to general and administrative expense over the period of service. In November 2014, the Company issued the same consultant 150,000 shares of common stock at the aggregate fair market value of $97,500, in consideration for services provided.

The Company also engaged a third consultant for services to be provided from June 1, 2014 through November 30, 2014. During the six months ended March 31, 2015, the Company issued the consultant 10,000 shares of restricted stock at the fair market value of $7,250. No other shares were issued to this consultant.

During the quarter ended March 31, 2015, the Company entered into a new agreement for consulting services. The agreement engaged a consultant for services to be provided from February 9, 2015 through August 9, 2015. The Company issued the consultant 25,000 shares of restricted stock in January 2015 and agreed to issue an additional 25,000 shares in April 2015. The January shares were issued at an aggregate fair market value of $17,250, which was recorded as a prepaid expense and is being charged to general and administrative expense over the period of service. Also during the quarter ended March 31, 2015, the Company granted two other consultants a total of 40,000 fully vested options to purchase common stock at a price of $1.02 per share. The fair value of the options issued was $19,855 and was recorded as a general and administrative expense.

During the six months ended March 31, 2015 and 2014, the Company recorded total expense of $300,129 and $278,375 relating to these consulting agreements. In addition, $66,143 was expensed during the six months ended March 31, 2014 for prior year consulting agreements. At March 31, 2015 and September 30, 2014, respectively, $49,853 and $26,468 relating to these consulting agreements is included in prepaid expenses.