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EQUITY-BASED COMPENSATION

12 Months Ended

Sep. 30, 2024

EQUITY-BASED COMPENSATION

EQUITY-BASED COMPENSATION

8. EQUITY-BASED COMPENSATION

The Company recognized the following expenses for options issued or vested and restricted stock awarded during the year:

		Year Ended September 30,
		2024				2023
Employees		$	4,270,180			$	6,286,231
Non-employees		$	680,768			$	655,740

As of September 30, 2024, the total compensation cost related to non-vested options and restricted stock awarded to employees and non-employees not yet recognized was approximately $4.5 million and $0.1 million, respectively, and the weighted-average period over which it is expected to be recognized is 1.9 and 0.54 years, respectively.

During the years ended September 30, 2024 and 2023, the fair value of each option grant was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions.

		2024				2023
Expected stock price volatility		100.89 – 101.66%				99.18 – 100.18%
Risk-free interest rate		3.77 – 4.58%				3.41 – 4.25%
Expected life of options		9.61 – 9.64 years				9.63 – 9.66 years
Expected dividend yield			-				-

Non-Qualified Stock Option Plans

During the year ended September 30, 2024, the Company adopted the 2024 Non-Qualified Stock Option Plan, which provides for the issuance of up to 2,000,000 options to purchase shares of common stock. On April 19, 2024, the Company granted 1,962,000 options to purchase shares of common stock from the 2024 Non-Qualified Stock Option Plan to officers, directors and employees. Each option entitles the holder to purchase one share of the Company’s common stock at a price of $1.50 per share, vests in three equal annual installments commencing one year after the grant date and expires on April 18, 2034.

During the year ended September 30, 2023, the Company adopted the 2023 Non-Qualified Stock Option Plan, which provides for the issuance of up to 2,000,000 options to purchase shares of common stock. On August 8, 2023, the Company granted 1,958,500 options to purchase shares of common stock from the 2023 Non-Qualified Stock Option Plan to officers, directors and employees. Each option entitles the holder to purchase one share of the Company’s common stock at a price of $1.36 per share, vests in three equal annual installments commencing one year after the grant date and expires on August 7, 2033.

At September 30, 2024, the Company has collectively authorized the issuance of 17,787,200 options to purchase shares of common stock under its Non-Qualified Stock Option Plans. Options typically vest over a three-year period and expire no later than ten years after the grant date. Terms of the options were determined by the Company’s Compensation Committee which administers the plans. The Company’s employees, directors, officers, and consultants or advisors are eligible to be granted options under the Non-Qualified Stock Option Plans.

Incentive Stock Option Plans – At September 30, 2024, the Company had collectively authorized the issuance of 138,400 options to purchase shares of common stock under its Incentive Stock Option Plans. Options typically vest over a three-year period and expire no later than ten years after the grant date. Terms of the options were determined by the Company’s Compensation Committee which administers the Plans. Only the Company’s employees are eligible to be granted options under the Incentive Stock Option Plans.

Activity in the Company’s Non-Qualified and Incentive Stock Option Plans for the two years ended September 30, 2024 is summarized as follows:

Non-Qualified and Incentive Stock Option Plans

		Outstanding																Exercisable
		Number of Shares				Weighted Average Exercise Price				Weighted Average Remaining Contractual Term (Years)				Aggregate Intrinsic Value				Number of Shares				Weighted Average Exercise Price				Weighted Average Remaining Contractual Term (Years)				Aggregate Intrinsic Value

Outstanding at September 30, 2022			12,964,014			$	9.06				7.35			$	1,866,240				7,067,617			$	6.21				6.21			$	1,866,105
Vested																			952,256			$	8.41
Granted (a)			2,065,500			$	1.37
Exercised			-																-
Forfeited			(213,165	)		$	9.19
Expired			(58,791	)		$	61.05												(58,791	)		$	61.05
Outstanding at September 30, 2023			14,757,558			$	7.78				6.81			$	0				7,961,082			$	6.07				5.60			$	0
Vested																			1,501,583			$	4.24
Granted (b)			1,969,000			$	1.50
Exercised			-				-												-				-
Forfeited			(406,333	)		$	10.01												-				-
Expired			(62,145	)		$	27.35												(62,145	)		$	27.35
Outstanding at September 30, 2024			16,258,080			$	6.88				6.25			$	0				9,400,520			$	5.64				5.19			$	0

(a)	Includes 1,965,500 performance based options issued to officers and directors, 100,000 options issued to consultants. The weighted average grant date fair value was $1.22.
(b)	The weighted average grant date fair value was $1.36.

A summary of the status of the Company’s unvested options for the two years ended September 30, 2024 is presented below:

		Number of Options				Weighted Average Grant Date Fair Value
Unvested at September 30, 2022			5,896,397			$	3.63
Vested			(952,256	)		$	7.30
Granted			2,065,500			$	1.22
Forfeited			(213,165	)		$	8.02
Unvested at September 30, 2023			6,796,476			$	2.25
Vested			(1,501,583	)		$	3.73
Granted			1,969,000			$	1.36
Forfeited			(406,333	)		$	1.94
Unvested at September 30, 2024			6,857,560			$	1.69

Incentive Stock Bonus Plan – On September 30, 2024, 610,500 of the shares granted under the 2014 Incentive Stock Bonus Plan remain outstanding, of which 463,250 shares are fully vested. During the year ended September 30, 2024 and 2023, there were 0 and 4,000 unvested shares that were forfeited, respectively. The shares are being earned upon the achievement of certain milestones leading to the commercialization of the Company’s Multikine technology, or specified increases in the market price of the Company’s stock. The fair value of the shares on the grant date was calculated using the market value on the grant-date for issuances where the attainment of performance criteria is likely and using a Monte Carlo Simulation for issuances where the attainment of performance criteria is uncertain. The grant date fair value of shares issued that remain outstanding as of September 30, 2024 was approximately $8.6 million. The total value of the shares, if earned, is being expensed over the requisite service periods for each milestone, provided the requisite service periods are rendered, regardless of whether the market conditions are met. No compensation cost is recognized for awards where the requisite service period is not rendered. During the years ended September 30, 2024 and 2023, the Company recorded expense relating to the issuance of restricted stock pursuant to the plan of approximately $0 and $(22,000), respectively. As of September 30, 2023, all compensation expense related to the 2014 Incentive Stock Bonus Plan has been fully recognized.

A summary of the status of the Company’s restricted common stock issued from the Incentive Stock Bonus Plan for the two years ended September 30, 2024 is presented below:

		Number of Shares				Weighted Average Grant Date Fair Value
Unvested at September 30, 2022			151,250			$	13.75
Forfeited			(4,000	)
Vested			-
Unvested at September 30, 2023			147,250			$	13.75
Forfeited			-
Vested			-
Unvested at September 30, 2024			147,250			$	13.75

Stock Bonus Plans – As of September 30, 2024, the Company authorized to issue up to 1,283,760 shares of common stock from the Stock Bonus Plans and has issued a total of 649,840 shares of common stock under its Stock Bonus Plans. All employees, directors, officers, consultants, and advisors are eligible to be granted shares.

Stock Compensation Plans – On September 30, 2024, 634,000 shares were authorized for issuance pursuant to the Company’s Stock Compensation Plans, of which 153,195 shares were issued and outstanding. No shares were issued from the Stock Compensation Plans during the years ended September 30, 2024 and 2023.