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4. WARRANTS AND NON-EMPLOYEE OPTIONS | 12 Months Ended
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Sep. 30, 2017
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
4. WARRANTS AND NON-EMPLOYEE OPTIONS | The following chart represents the warrants and non-employee options outstanding at September 30, 2017:
Warrant | Issue Date | Shares Issuable upon Exercise of Warrants | Exercise Price | Expiration Date | Refer-ence
Series U | 4/17/2014 | 17,821 | $43.75 | 10/17/2017 | 1
Series DD | 12/8/2016 | 1,360,960 | $4.50 | 12/1/2017 | 1
Series EE | 12/8/2016 | 1,360,960 | $4.50 | 12/1/2017 | 1
Series N | 8/18/2008 | 85,339 | $3.00 | 8/18/2018 | 2
Series S | 10/11/13- 10/24/14 | 1,037,120 | $31.25 | 10/11/2018 | 1
Series V | 5/28/2015 | 810,127 | $19.75 | 5/28/2020 | 1
Series W | 10/28/2015 | 688,930 | $16.75 | 10/28/2020 | 1
Series X | 1/13/2016 | 120,000 | $9.25 | 1/13/2021 | 2
Series Y | 2/15/2016 | 26,000 | $12.00 | 2/15/2021 | 2
Series ZZ | 5/23/2016 | 20,000 | $13.75 | 5/18/2021 | 1
Series BB | 8/26/2016 | 16,000 | $13.75 | 8/22/2021 | 1
Series Z | 5/23/2016 | 264,000 | $13.75 | 11/23/2021 | 1
Series FF | 12/8/2016 | 68,048 | $3.91 | 12/1/2021 | 1
Series CC | 12/8/2016 | 680,480 | $5.00 | 12/8/2021 | 1
Series HH | 2/23/2017 | 20,000 | $3.13 | 2/16/2022 | 1
Series AA | 8/26/2016 | 200,000 | $13.75 | 2/22/2022 | 1
Series JJ | 3/14/2017 | 30,000 | $3.13 | 3/8/2022 | 1
Series LL | 4/30/2017 | 26,398 | $3.59 | 4/30/2022 | 1
Series MM | 6/22/2017 | 893,491 | $1.86 | 6/22/2022 | 2
Series NN | 7/24/2017 | 539,300 | $2.52 | 7/24/2022 | 2
Series OO | 7/31/2017 | 60,000 | $2.52 | 7/31/2022 | 2
Series QQ | 8/22/2017 | 87,500 | $2.50 | 8/22/2022 | 2
Series GG | 2/23/2017 | 400,000 | $3.00 | 8/23/2022 | 1
Series II | 3/14/2017 | 600,000 | $3.00 | 9/14/2022 | 1
Series KK | 5/3/2017 | 395,970 | $3.04 | 11/3/2022 | 1
Series PP | 8/28/2017 | 1,750,000 | $2.30 | 2/28/2023 | 2
Consultants | 12/28/12- 7/28/17 | 42,000 | $2.18- $70.00 | 12/27/17- 7/27/27 | 3
The following chart represents the warrants and non-employee options outstanding at September 30, 2016:
Warrant | Issue Date | Shares Issuable upon Exercise of Warrants | Exercise Price | Expiration Date | Refer-ence
Series N | 8/18/08 | 113,785 | $13.18 | 8/18/17 | 2
Series R | 12/6/12 | 105,000 | $100.00 | 12/6/16 | 1
Series U | 4/17/14 | 17,821 | $43.75 | 10/17/17 | 1
Series S | 10/11/13 -10/24/14 | 1,037,120 | $31.25 | 10/11/18 | 1
Series V | 5/28/15 | 810,127 | $19.75 | 5/28/20 | 1
Series W | 10/28/15 | 688,930 | $16.75 | 10/28/20 | 1
Series X | 1/13/16 | 120,000 | $9.25 | 1/13/21 | 2
Series Y | 2/15/16 | 26,000 | $12.00 | 2/15/21 | 2
Series ZZ | 5/23/16 | 20,000 | $13.75 | 5/18/21 | 1
Series Z | 5/23/16 | 264,000 | $13.75 | 11/23/21 | 1
Series AA | 8/26/16 | 200,000 | $13.75 | 2/22/22 | 1
Series BB | 8/26/16 | 16,000 | $13.75 | 8/22/21 | 1
Series P | 2/10/12 | 23,600 | $112.50 | 3/6/17 | 2
Consultants | 12/2/11- 7/1/16 | 25,600 | $9.25- $87.50 | 10/27/16- 6/30/19 | 3
1. | Warrant Liabilities
The table below presents the warrant liabilities and their respective balances at September 30:
|  | 2017 |  |  | 2016 |
Series S warrants |  | $ | 32,773 |  |  | $ | 3,111,361 |
Series U warrants |  |  | - |  |  |  | - |
Series V warrants |  |  | 72,912 |  |  |  | 1,620,253 |
Series W warrants |  |  | 83,754 |  |  |  | 1,799,858 |
Series Z warrants |  |  | 77,216 |  |  |  | 970,604 |
Series ZZ warrants |  |  | 4,753 |  |  |  | 70,609 |
Series AA warrants |  |  | 65,087 |  |  |  | 763,661 |
Series BB warrants |  |  | 4,322 |  |  |  | 58,588 |
Series CC warrants |  |  | 394,220 |  |  |  | - |
Series DD warrants |  |  | 5,492 |  |  |  | - |
Series EE warrants |  |  | 5,492 |  |  |  | - |
Series FF warrants |  |  | 47,154 |  |  |  | - |
Series GG warrants |  |  | 342,173 |  |  |  | - |
Series HH warrants |  |  | 16,014 |  |  |  | - |
Series II warrants |  |  | 511,636 |  |  |  | - |
Series JJ warrants |  |  | 24,203 |  |  |  | - |
Series KK warrants |  |  | 345,720 |  |  |  | - |
Series LL warrants |  |  | 20,481 |  |  |  | - |
Total warrant liabilities |  | $ | 2,053,402 |  |  | $ | 8,394,934 |
The table below presents the gains on the warrant liabilities for the years ended September 30:
|  | 2017 |  |  | 2016 |
Series S Warrants |  | $ | 3,078,588 |  |  | $ | 4,252,193 |
Series U warrants |  |  | - |  |  |  | 44,552 |
Series V warrants |  |  | 1,547,341 |  |  |  | 4,658,228 |
Series W warrants |  |  | 1,716,104 |  |  |  | 3,260,913 |
Series Z warrants |  |  | 893,388 |  |  |  | 997,226 |
Series ZZ warrants |  |  | 65,856 |  |  |  | 75,229 |
Series AA warrants |  |  | 698,574 |  |  |  | 672,246 |
Series BB warrants |  |  | 54,266 |  |  |  | 53,139 |
Series CC warrants |  |  | 666,203 |  |  |  | - |
Series DD warrants |  |  | 437,780 |  |  |  | - |
Series EE warrants |  |  | 685,915 |  |  |  | - |
Series FF warrants |  |  | 73,828 |  |  |  | - |
Series GG warrants |  |  | 272,464 |  |  |  | - |
Series HH warrants |  |  | 13,616 |  |  |  | - |
Series II warrants |  |  | 404,823 |  |  |  | - |
Series JJ warrants |  |  | 20,410 |  |  |  | - |
Series KK warrants |  |  | 25,564 |  |  |  | - |
Series LL warrants |  |  | 352,495 |  |  |  | - |
Net gain on warrant liabilities |  | $ | 11,007,215 |  |  | $ | 14,013,726 |
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 periods is recognized as a gain or loss in the statement of operations. Issuance of Fiscal 2017 Warrant Liabilities On April 30, 2017, the Company entered into a securities purchase agreement with an institutional investor whereby it sold 527,960 shares of its common stock for net proceeds of approximately $1.4 million, or $2.875 per share, in a registered direct offering. In a concurrent private placement, the Company also issued to the purchaser of the Company’s common stock Series KK warrants to purchase 395,970 shares of common stock. The warrants can be exercised at a price of $3.04 per share at any time on or after November 3, 2017 and expire on November 3, 2022. In addition, the Company issued 26,398 Series LL warrants to the placement agent as part of its compensation. The Series LL warrants are exercisable on October 30, 2017 at a price of $3.59 per share and expire on April 30, 2022. The fair value of the Series KK and LL warrants of approximately $0.7 million on the date of issuance was recorded as a warrant liability. On March 14, 2017, the Company sold 600,000 registered shares of common stock and 600,000 Series II warrants to purchase 600,000 unregistered shares of common stock at combined offering price of $2.50 per share. The Series II warrants have an exercise price of $3.00 per share and expire September 14, 2022. In addition, the Company issued 30,000 Series JJ warrants to purchase 30,000 shares of unregistered common stock to the placement agent. The Series JJ warrants have an exercise price $3.13 and expire on March 8, 2022. The net proceeds from this offering were approximately $1.3 million. The fair value of the Series II and JJ warrants of approximately $1.0 million on the date of issuance was recorded as a warrant liability. On February 23, 2017, the Company sold 400,000 registered shares of common stock and 400,000 Series GG warrants to purchase 400,000 unregistered shares of common stock at a combined price of $2.50 per share. The Series GG warrants have an exercise price of $3.00 per share and expire August 23, 2022. In addition, the Company issued to the placement agent 20,000 Series HH warrants to purchase 20,000 shares of unregistered common stock. The Series HH warrants have an exercise price $3.13 and expire on February 16, 2022. The net proceeds from this offering were approximately $0.8 million. The fair value of the Series GG and HH warrants of approximately $0.6 million on the date of issuance was recorded as a warrant liability. On December 8, 2016, the Company sold 1,360,960 shares of common stock and warrants to purchase common stock at a price of $3.13 in a public offering. The warrants consist of 680,480 Series CC warrants to purchase 680,480 shares of common stock, 1,360,960 Series DD warrants to purchase 1,360,960 shares of common stock and 1,360,960 Series EE warrants to purchase 1,360,960 shares of common stock. The Series CC warrants were immediately exercisable, expire in five-years from the offering date and have an exercise price of $5.00 per share. The Series DD warrants were immediately exercisable and have an exercise price of $4.50 per share. On June 5, 2017 and June 29, 2017, the expiration date of the Series DD warrants was extended from June 8, 2017 to July 10, 2017 and then to August 10, 2017. On August 29, 2017, the expiration date of the Series DD warrants was extended to December 1, 2017. The Series EE warrants are immediately exercisable and have an exercise price of $4.50 per share. On August 29, 2017, the initial expiration date of the Series EE warrants was extended from September 8, 2017 to December 1, 2017. In addition, the Company issued 68,048 Series FF warrants to purchase 68,048 shares of common stock to the placement agent. The FF warrants expire on December 1, 2021 and have an exercise price $3.91. Net proceeds from this offering were approximately $3.7 million. The fair value of the Series CC, DD, EE and FF warrants of approximately $2.3 million on the date of issuance was recorded as a warrant liability. . Series AA and BB Warrants On August 26, 2016, the Company closed a registered direct offering of 400,000 shares of common stock and 200,000 Series AA warrants to purchase 200,000 shares of common stock. The common stock and warrants were sold at a combined per unit price of $12.50 for proceeds of approximately $4.5 million, net of placement agent’s commissions and offering expenses. The Series AA warrants may be exercised at any time after February 22, 2017 and on or before February 22, 2022 at a price of $13.75 per share. The Company also issued 16,000 Series BB warrants to the placement agent as part of its compensation. The Series BB warrants may be exercised at any time on or after February 22, 2017 and on or before August 22, 2021 at a price of $13.75 per share. The fair value of the Series AA and Series BB warrants of approximately $1.5 million on the date of issuance was recorded as a warrant liability. Series Z and ZZ Warrants On May 23, 2016, the Company closed a registered direct offering of 400,000 shares of common stock and 264,000 Series Z warrants to purchase shares of common stock. The common stock and warrants were sold at a combined per unit price of $12.50 for net proceeds of approximately $4.6 million, net of placement agent’s commissions and offering expenses. The Series Z warrants may be exercised at any time on or after November 23, 2016 and on or before November 23, 2021 at a price of $13.75 per share. The Company also issued 20,000 Series ZZ warrants to the placement agent as part of its compensation. The Series ZZ warrants may be exercised at any time on or after November 23, 2016 and on or before May 18, 2021 at a price of $13.75 per share. The fair value of the Series Z and Series ZZ warrants of approximately $2.1 million on the date of issuance was recorded as a warrant liability. Series W Warrants On October 28, 2015, the Company closed an underwritten public offering of 688,930 shares of common stock and 688,930 Series W warrants to purchase shares of common stock. The common stock and warrants were sold at a combined per unit price of $16.75 for net proceeds of approximately $10.5 million, net of underwriting discounts and commissions and offering expenses. The Series W warrants are immediately exercisable at a price of $16.75 and expire on October 28, 2020. The fair value at issuance of the Series W warrants of approximately $5.1 million was recorded as warrant liability. Expiration of Warrants On March 16, 2017, 23,600 Series P warrants, with an exercise price of $112.50, expired. The fair value of the Series P warrants was $0 on the date of expiration. On December 6, 2016, 105,000 Series R warrants, with an exercise price of $100.00, expired. The fair value of the Series R warrants was $0 on the date of expiration. On December 22, 2015, 48,000 Series Q warrants, with an exercise price of $125.00, expired. The fair value of the Series Q warrants was $0 on the date of expiration.
2. | Equity Warrants
Series PP and Series QQ Warrants On August 22, 2017, the Company entered into a securities purchase agreement with institutional investors whereby it sold 1,750,000 shares of its common stock for net proceeds of approximately $3.2 million, or $2.00 per share, in a registered direct offering. In a concurrent private placement, the Company also issued to the purchasers of the Company’s common stock Series PP warrants to purchase 1,750,000 shares of common stock. The warrants can be exercised at a price of $2.30 per share at any time on or after February 28, 2018 and expire on February 28, 2023. In addition, the Company issued 87,500 Series QQ warrants to the placement agent as part of its compensation. The Series QQ warrants are exercisable on February 22, 2018 at a price of $2.50 per share and expire on August 22, 2022. The Series PP and Series QQ warrants qualify for equity treatment in accordance with ASC 815. The relative fair value of the warrants was approximately $1.4 million. Series OO Warrants On July 26, 2017, the Company entered into a securities purchase agreement with an investor whereby it sold 100,000 shares of its common stock for gross proceeds of $229,000, or $2.29 per share, in a registered offering. In a concurrent private placement, the Company also issued to the purchaser of the common stock Series OO warrants to purchase 60,000 shares of the Company’s common stock. The warrants can be exercised at a price of $2.52 per share, commencing six months after the date of issuance and ending five years after the date of issuance. The Series OO warrants qualify for equity treatment in accordance with ASC 815. The relative fair value of the warrants was approximately $62,000. Series NN Warrants On July 24, 2017, in connection with the issuances of convertible notes (See Note 7), the Company issued the note holders Series NN warrants which entitle the purchasers to acquire up to an aggregate of 539,300 shares of the Company’s common stock. The warrants are exercisable at a fixed price of $2.52 per share and expire on July 24, 2022. Shares issuable upon the exercise of the notes and warrants were restricted securities unless registered. The shares were registered effective September 1, 2017. Proceeds from the sale of notes payable and the issuance of the warrants were approximately $1.2 million. The Company allocated the proceeds received to the notes and the Series NN warrants on a relative fair value basis. As a result of such allocation, the Company determined the initial carrying value of the Series NN warrants to be approximately $0.5 million. The Series NN warrants qualify for equity treatment in accordance with ASC 815. Series MM Warrants On June 22, 2017, in connection with the issuance of convertible notes (see Note 7), the Company issued the note holders Series MM warrants, which entitle the purchasers to acquire up to an aggregate of 893,491 shares of the Company’s common stock. The Series MM warrants are exercisable at a price of $1.86 per share and expire on June 22, 2022. Shares issuable upon the exercise of the notes and warrants were restricted securities unless registered. The shares were registered effective August 8, 2017. Proceeds from the sale of notes payable and the issuance of the warrants were $1.5 million. The Company allocated proceeds received to the Notes and the Series MM warrants on a relative fair value basis. As a result of such allocation, the Company determined the initial carrying value of the Series MM warrants to be approximately $0.6 million. The Series MM warrants qualify for equity treatment in accordance with ASC 815. Series X Warrants In January 2016, the Company sold 120,000 shares of its common stock and 120,000 Series X warrants to the de Clara Trust for approximately $1.1 million. The de Clara Trust is controlled by Geert Kersten, the Company's Chief Executive Officer and a director. Each Series X warrant allows the de Clara Trust to purchase one share of the Company's common stock at a price of $9.25 per share at any time on or before January 13, 2021. The Series X warrants qualify for equity treatment in accordance with ASC 815. The relative fair value of the warrants was approximately $417,000. Series Y Warrants On February 15, 2016, the Company sold 52,000 shares of its common stock and 26,000 Series Y warrants to a private investor for $624,000. Each Series Y warrant allows the holder to purchase one share of the Company's common stock at a price of $12.00 per share at any time on or before February 15, 2021. The Series Y warrants qualify for equity treatment in accordance with ASC 815. The relative fair value on the date of issuance of the warrants was approximately $144,000. Series N Warrants Series N warrants were previously issued in connection with a financing and were subsequently transferred to the de Clara Trust, of which the Company’s CEO, Geert Kersten, is a beneficiary. On July 17, 2017, the Series N warrants held in the de Clara Trust were modified. The modification extended the expiration date by one year to expire on August 18, 2018; the 113,785 warrants outstanding were reduced by 25% to 85,339 warrants outstanding; and the exercise price was reduced to $3.00 per share. The incremental cost of this modification was approximately $64,000, which was recorded as a deemed dividend.
3. | Options and Shares Issued to Consultants
The Company typically enters into consulting arrangements in exchange for common stock or stock options. During the years ended September 30, 2017 and 2016 the Company issued 76,551 and 49,954 shares, respectively, of common stock to consultants of which 68,352 and 31,360 shares, respectively, were restricted shares. Under these arrangements, the common stock was issued with stock prices ranging between $1.73 and $7.25 per share. Additionally, during the years ended September 30, 2017 and 2016 the Company issued to consultants 20,000 and 16,400 options, respectively, to purchase common stock with an exercise price of $2.18 per share and a fair value of $1.87 per share. The aggregate values of the issuances of restricted common stock and common stock options are recorded as prepaid expenses and are charged to general and administrative expenses over the periods of service. During the years ended September 30, 2017 and 2016, the Company recorded total expense of approximately $233,000 and $752,000, respectively, relating to these consulting agreements. At September 30, 2017 and 2016, approximately $45,000 and $48,000, respectively, are included in prepaid expenses. As of September 30, 2017, 42,000 options issued to consultants as payment for services remained outstanding, all of which were issued from the Non-Qualified Stock Option plans and are fully vested.

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- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -URI http://asc.fasb.org/topic&trid=2229140 + Details
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