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C. STOCKHOLDERS EQUITY

6 Months Ended

Mar. 31, 2018

Notes to Financial Statements

C. STOCKHOLDERS' EQUITY

Stock options, stock bonuses and compensation granted by the Company as of March 31, 2018 are as follows:

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

Incentive Stock Options Plans			138,400				123,558				N/A				385
Non-Qualified Stock Option Plans			1,187,200				1,100,814				N/A				45,341
Stock Bonus Plans			383,760				N/A				248,475				135,252
Stock Compensation Plan			134,000				N/A				115,590				18,410
Incentive Stock Bonus Plan			640,000				N/A				624,000				16,000

Stock options, stock bonuses and compensation granted by the Company as of September 30, 2017 are as follows:

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

Incentive Stock Option Plans			138,400				124,758				N/A				454
Non-Qualified Stock Option Plans			1,187,200				1,115,086				N/A				42,830
Bonus Plans			383,760				N/A				206,390				177,337
Stock Compensation Plan			134,000				N/A				115,590				18,410
Incentive Stock Bonus Plan			640,000				N/A				624,000				16,000

Stock option activity:

		Six Months Ended March 31,
		2018				2017
Granted			10,300				-
Expired			24,379				15,281
Forfeited			1,393				1,061

		Three Months Ended March 31,
		2018				2017
Granted			-				-
Expired			584				200
Forfeited			6,856				1,061

Stock-Based Compensation Expense

		Six months Ended March 31,
		2018				2017
Employees		$	1,727,915			$	677,755
Non-employees		$	157,991			$	112,778

		Three months Ended March 31,
		2018				2017
Employees		$	279,817			$	365,380
Non-employees		$	115,649			$	34,225

Employee compensation expense includes the expense related to options issued or vested and restricted stock. The increase in employee’s expense in 2018 is primarily due to an increase of approximately $1.1 million in equity based compensation related to the Company’s shareholder approved 2014 Incentive Stock Bonus Plan. Non-employee expense includes the expense related to options and stock issued to consultants expensed over the period of their service contracts. Stock based compensation expense is included in general and administrative expenses on the statements of operations.

Warrants and Non-employee Options

The following chart presents the outstanding warrants and non-employee options, listed by expiration date at March 31, 2018:

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

Series DD		12/8/2016		1,360,960		$4.50		7/1/2018		1
Series EE		12/8/2016		1,360,960		$4.50		7/1/2018		1
Series N		8/18/2008		85,339		$3.00		8/18/2018		*
Series S		10/11/13- 10/24/14		1,037,120		$3.00		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		*
Series Y		2/15/2016		26,000		$12.00		2/15/2021		*
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		*
Series NN		7/24/2017		539,300		$2.52		7/24/2022		*
Series OO		7/31/2017		60,000		$2.52		7/31/2022		*
Series QQ		8/22/2017		87,500		$2.50		8/22/2022		*
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 RR		10/30/2017		583,057		$1.65		10/30/2022		2
Series KK		5/3/2017		395,970		$3.04		11/3/2022		1
Series SS		12/19/2017		1,289,478		$2.09		12/18/2022		2
Series TT		2/5/2018		1,875,860		$2.24		2/5/2023		2
Series PP		8/28/2017		1,750,000		$2.30		2/28/2023		*
Consultants		7/1/15- 7/28/17		38,400		$2.18- $16.50		6/30/18- 7/27/27		3

*No current period changes occurred relating to these warrants.

1.	Derivative Liabilities

The table below presents the warrant liabilities and their respective balances at the balance sheet dates:

		March 31, 2018				September 30, 2017

Series S warrants		$	20,847			$	32,773
Series V warrants			76,457				72,912
Series W warrants			107,885				83,754
Series Z warrants			69,122				77,216
Series ZZ warrants			4,564				4,753
Series AA warrants			56,411				65,087
Series BB warrants			4,029				4,322
Series CC warrants			352,301				394,220
Series DD warrants			36				5,492
Series EE warrants			36				5,492
Series FF warrants			39,853				47,154
Series GG warrants			304,754				342,173
Series HH warrants			13,331				16,014
Series II warrants			461,028				511,636
Series JJ warrants			20,193				24,203
Series KK warrants			308,796				345,720
Series LL warrants			17,174				20,481

Total warrant liabilities		$	1,856,817			$	2,053,402

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

		2018				2017
Series S Warrants		$	11,927			$	2,579,836
Series V warrants			(3,547	)			1,417,721
Series W warrants			(24,131	)			1,609,415
Series Z warrants			8,095				828,263
Series ZZ warrants			189				61,195
Series AA warrants			8,676				646,665
Series BB warrants			293				50,338
Series CC warrants			41,919				429,869
Series DD warrants			5,456				413,948
Series EE warrants			5,456				512,238
Series FF warrants			7,301				47,166
Series GG warrants			37,419				108,211
Series HH warrants			2,683				5,340
Series II warrants			50,608				161,419
Series JJ warrants			4,010				7,988
Series KK warrants			36,924				-
Series LL warrants			3,307				-
Net gain on warrant liabilities		$	196,585			$	8,879,612

The table below presents the gains and (losses) on the warrant liabilities for the three months ended March 31:

		2018				2017
Series S Warrants		$	(1,141	)		$	(41,485	)
Series V warrants			94,766				-
Series W warrants			105,336				(58,189	)
Series Z warrants			63,630				(40,524	)
Series ZZ warrants			3,532				(2,689	)
Series AA warrants			56,036				(32,904	)
Series BB warrants			2,924				(2,334	)
Series CC warrants			238,740				(174,623	)
Series DD warrants			(27	)			43,029
Series EE warrants			(27	)			(2,365	)
Series FF warrants			25,348				(19,574	)
Series GG warrants			152,551				108,211
Series HH warrants			8,345				5,340
Series II warrants			229,414				161,419
Series JJ warrants			12,552				7,988
Series KK warrants			151,951				-
Series LL warrants			10,885				-
Net gain (loss) on warrant liabilities		$	1,154,815			$	(48,700	)

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 in the accompanying statements of operations.

Changes in Liability Classified Warrants

On January 12, 2018, the exercise price of the Company’s outstanding Series S warrants that are publicly traded under the symbol “CVM WS” on the NYSE American, was changed to $3.00 per share for a three month period which will end on April 12, 2018. On April 3, 2018, the price was reduced to $1.75 and was extended through June 11, 2018. (See Note J, “Subsequent Events”). After this date, the exercise price will revert back to $31.25 per share of common stock. This modification was reflected in the fair value measurement of the warrants. Twenty-five (25) Series S warrants are required to purchase one share of common stock. The Series S warrants expire on October 11, 2018.

On February 23, 2018, the Company extended the expiration date of its Series DD and Series EE warrants to July 1, 2018. This modification was reflected in the fair value measurement of the warrants.

On October 17, 2017, 17,821 Series U warrants, with an exercise price of $43.75 expired. The fair value of the Series U 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.

2.	Issuance of Equity Warrants

Series TT Warrants

On February 5, 2018, the Company sold 2,501,145 shares of its common stock at a price of $1.87 per share for total proceeds of approximately $4.7 million. The common stock is restricted unless registered. The purchasers of the common stock also received Series TT warrants which allow the purchasers to acquire up to 1,875,860 shares of the Company’s common stock. The warrants are exercisable at a fixed price of $2.24 per share, will not be exercisable for 6 months and one day and expire on February 5, 2023. Shares issuable upon the exercise of the warrants are restricted securities unless registered. The shares and warrants were registered on February 28, 2018. The Company allocated the proceeds received to the shares and the Series TT warrants on a relative fair value basis. As a result of such allocation, the Company determined the relative fair value of the Series TT warrants to be approximately $1.56 million. The Series TT warrants qualify for equity treatment in accordance with ASC 815.

Series SS Warrants

On December 19, 2017 the Company received subscription agreements for the purchase of 1,289,478 shares of its common stock at a price of $1.90 in the principal amount of $2.45 million. The purchasers of the common stock also received Series SS warrants which allow the purchasers to acquire up to 1,289,478 shares of the Company’s common stock. The warrants are exercisable at a fixed price of $2.09 per share, are exercisable on June 20, 2018 and will expire on December 18, 2022. Shares issuable upon the exercise of the warrants will be restricted securities unless registered. The shares and warrants were registered on January 23, 2018. The Company allocated the proceeds received to the shares and the Series SS warrants on a relative fair value basis. As a result of such allocation, the Company determined the relative fair value of the Series SS warrants to be approximately $1.0 million. The Series SS warrants qualify for equity treatment in accordance with ASC 815.

Series RR Warrants

On October 30, 2017, holders of convertible notes in the principal amount of $1.1 million issued in June 2017 and holders of convertible notes in the principal amount of $1.2 million issued in July 2017 agreed to extend the maturity date of these notes to September 21, 2018. In consideration for the extension of the maturity date of the convertible notes, the Company issued a total of 583,057 Series RR warrants to the convertible note holders that agreed to the extension. Each Series RR warrant entitles the holder to purchase one share of the Company’s common stock. The Series RR warrants may be exercised at any time on or before October 30, 2022 at an exercise price of $1.65 per share. The Series RR warrants were recorded at approximately $0.7 million, the relative fair value on the date of issuance, as described in Note F.

3.	Options and shares issued to Consultants

The Company typically enters into consulting arrangements in exchange for common stock or stock options. During the six and three months ended March 31, 2018, the Company issued 137,787 and 124,082 shares of common stock respectively, all of which were restricted shares. During the six and three months ended March 31, 2017, the Company issued 18,999 and 4,100 shares of common stock, respectively, of which 10,800 and 0 were restricted shares. The weighted average grant date fair value of the shares issued to consultants during the six months ended March 31, 2018 and 2017, was $1.84 and $4.45 respectively. 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 six and three months ended March 31, 2018, the Company recorded total expense of approximately $158,000 and $116,000, respectively, relating to these consulting agreements. During the six and three months ended March 31, 2017, the Company recorded total expense of approximately $113,000 and $34,000, respectively, relating to these consulting agreements. At March 31, 2018 and September 30, 2017, approximately $141,000 and $45,000, respectively, are included in prepaid expenses. As of March 31, 2018, the Company had 38,400 options outstanding, which were issued to consultants as payment for services. All off these options were vested and all were issued from the Non-Qualified Stock Option plans.

Other Equity Transactions

Effective January 1, 2018, the Company entered into a Securities Purchase Agreement with Ergomed plc, the Company’s Clinical Research Provider, to facilitate a partial payment of the accounts payable balances due Ergomed. Under the Agreement, the Company issued Ergomed 660,000 shares, with a fair market value of approximately $1.3 million, as a forbearance fee in exchange for Ergomed’s agreement to provisionally forbear collection of the payables in an amount equal to the net proceeds from the resales of the shares issued to Ergomed. During the quarter ended March 31, 2018, the Company recorded the full amount of the expense upon issuance, offset by amounts realized through the resale by Ergomed of 269,333 shares for approximately $0.5 million and the corresponding reduction of the payables resulting in a net expense of approximately $0.8 million. As of March 31, 2018, Ergomed holds the remaining 390,667 shares and may resell the shares or return the shares to the Company for cancellation until December 31, 2018.

On August 15, 2017, the Company entered into a similar Securities Purchase Agreement with Ergomed plc, whereby the Company issued Ergomed 480,000 shares, with a fair market value of approximately $1.3 million, as a forbearance fee in exchange for Ergomed’s agreement to provisionally forbear collection of the payables in an amount equal to the net proceeds from the resales of the shares issued to Ergomed. During the year ended September 30, 2017, the Company recorded the full amount of the expense upon issuance, offset by amounts realized through the resale of 64,792 shares and the corresponding reduction of the payables, for a net expense of $1.2 million. During the quarter ended December 31, 2017, the Company realized approximately $0.7 million through the resale of the remaining 415,208 shares and reduced the payables and interest expense by that amount.