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STOCK OPTIONS AND WARRANTS | 9 Months Ended
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Jun. 30, 2013
Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract] |
STOCK OPTIONS AND WARRANTS | NOTE F - STOCK OPTIONS AND WARRANTS Warrants The following table summarizes the changes in warrants outstanding and the related prices for the shares of Common Stock issued to non-employees of the Company. These warrants were granted in lieu of cash compensation for services performed or financing expenses in connection with the sale of Common Stock.
|  |  |  |  |  | Warrants |  |  |  |  |  |  |
|  |  |  |  |  | Outstanding |  | Weighted |  |  |  | Exercisable |
|  |  |  |  |  | Remaining |  | Average |  | Weighted |  | Weighted |
Exercise |  | Number |  | Contractual |  | Exercise |  | Average |  | Average |
Prices |  | Outstanding |  | Life (Years) |  | Price |  | Exercisable |  | Exercise Price |
$ | 0.04000 |  | 3,000,000 |  |  | 2.17 |  |  | $ | 0.04000 |  | 3,000,000 |  | $ | 0.04000 |
$ | 0.04405 |  | 510,784 |  |  | 4.04 |  |  | $ | 0.04405 |  | 510,784 |  | $ | 0.04405 |
$ | 0.04750 |  | 3,789,489 |  |  | 5.04 |  |  | $ | 0.04750 |  | 3,789,489 |  | $ | 0.04750 |
$ | 0.05529 |  | 226,081 |  |  | 4.53 |  |  | $ | 0.05529 |  | 226,081 |  | $ | 0.05529 |
$ | 0.06000 |  | 2,000,000 |  |  | 0.64 |  |  | $ | 0.06000 |  | 2,000,000 |  | $ | 0.06000 |
$ | 0.07100 |  | 1,000,000 |  |  | 1.57 |  |  | $ | 0.07100 |  | 1,000,000 |  | $ | 0.07100 |
$ | 0.09000 |  | 6,900,000 |  |  | 3.18 |  |  | $ | 0.09000 |  | 6,900,000 |  | $ | 0.09000 |
$ | 0.17900 |  | 100,000 |  |  | 2.35 |  |  | $ | 0.17900 |  | 100,000 |  | $ | 0.17900 |
$ | 0.21400 |  | 100,000 |  |  | 2.85 |  |  | $ | 0.21400 |  | — |  |  | — |
$ | 0.50000 |  | 1,600,000 |  |  | 0.32 |  |  | $ | 0.50000 |  | 1,600,000 |  | $ | 0.50000 |
|  |  | 19,226,354 |  |  | 2.83 |  |  | $ | 0.10331 |  | 19,126,354 |  | $ | 0.10273 |
Transactions involving warrants are summarized as follows:
|  | Number of Shares |  |  | Weighted Average Price Per Share |
Balance, October 1, 2011 |  |  | 58,205,280 |  |  | $ | 0.140 |
Granted |  |  | 1,075,000 |  |  |  | 0.071 |
Exercised |  |  | (5,039,633 | ) |  |  | (0.045 | )
Cancelled or expired |  |  | (8,400,000 | ) |  |  | (0.161 | )
Balance at September 30, 2012 |  |  | 45,840,647 |  |  | $ | 0.145 |
Granted |  |  | 67,404,300 |  |  |  | 0.223 |
Exercised |  |  | (60,236,873 | ) |  |  | (0.170 | )
Cancelled or expired |  |  | (33,781,720 | ) |  |  | (0.280 | )
Balance, June 30, 2013 |  |  | 19,226,354 |  |  | $ | 0.103 |
Transactions involving warrants are summarized as follows: On November 7, 2012, 100,000 warrants were issued in connection with services. The warrants are exercisable on or after May 7, 2013 for three years at an exercise price of $0.179 per share. The fair value of the warrants of $13,238 was determined using the Black Scholes Option Pricing Model with the following assumptions: dividend yield $-0-, volatility of 129.56% and risk free rate from 0.36% and were charged to current period operations. On November 29, 2012, in connection with a securities purchase agreement as described in Note E above, the Company issued an aggregate of 67,204,300 warrants to purchase the Company’s common stock exercisable for one to five years after defined date or events, at an exercise price of $0.2232. In March 2013, the Company issued an aggregate of 1,500,000 shares of its common stock in connection with the exercise of warrants at an exercise price of $0.10 per share; net proceeds of $150,000. In April 2013, the Company issued 11,285,376 shares of its common stock in connection with the cashless exercise of 15,438,337 warrants to acquire the Company’s stock at a weighted average exercise price of $0.063 per share. In May 2013, the Company issued 2,418,971 shares of its common stock in connection with the cashless exercise of 2,975,956 warrants to acquire the Company’s stock at a weighted average exercise price of $0.042 per share. On May 7, 2013, 100,000 warrants were issued in connection with services. The warrants are exercisable on or after November 7, 2013 for three years at an exercise price of $0.214 per share. The fair value of the warrants of $15,018 was determined using the Black Scholes Option Pricing Model with the following assumptions: dividend yield $-0-, volatility of 119.72% and risk free rate from 0.35% and were charged to current period operations. As described in Note E above, on January 22, 2013, the Company exercised its option to repurchase 26,881,720 Series C Warrants issued to Crede for $50,000. On April 25, 2013, Crede effected the cashless exercise of 10,752,688 Series A Warrants and 29,569,892 Series B Warrants, and the Company thereupon issued to Crede an aggregate of 31,257,045 shares of its Common Stock. Employee Stock Options On January 26, 2005, the Board of Directors, and on February 15, 2005, the holders of a majority of the outstanding shares of Common Stock approved the 2005 Incentive Stock Plan and authorized the issuance of 16,000,000 shares of Common Stock as stock awards and stock options there under. On May 16, 2007, at the annual meeting of stockholders, the holders of a majority of the outstanding shares of Common Stock approved an increase in the number of shares subject to the 2005 Incentive Stock Plan to 20,000,000 shares of Common Stock. On June 17, 2008, the Board of Directors unanimously adopted an amendment to the 2005 Incentive Stock Plan that increased the total number of shares of Common Stock issuable pursuant to the 2005 Incentive Stock Plan from a total of 20,000,000 shares to a total of 100,000,000 shares, which was approved by our stockholders at the 2008 annual meeting of stockholders held on December 16, 2008. On November 30, 2011, the Board of Directors unanimously adopted an amendment to the 2005 Incentive Stock Plan that increased the total number of shares of Common Stock issuable there under to 350,000,000 and the number of shares of Common Stock that can be covered by awards made to any participant in any calendar year to 50,000,000, which was approved by our stockholders at the 2012 annual meeting of stockholders held on January 27, 2012. The 2005 Incentive Stock Plan is designed to retain directors, executives, and selected employees and consultants by rewarding them for making contributions to the Company’s success with an award of options to purchase shares of Common Stock. As of June 30, 2013, a total of 137,583,192 shares have been issued and options to purchase 121,354,192 shares are outstanding under the 2005 Incentive Stock Plan. The following table summarizes the changes in options outstanding and the related prices for the shares of Common Stock issued to employees of the Company under the 2005 Incentive Stock Plan:
Options Outstanding |  |  | Options Exercisable |
Exercise Prices |  | Number Outstanding |  | Weighted Average Remaining Contractual Life (Years) |  | Weighted Average Exercise Price |  | Number Exercisable |  | Weighted Average Exercise Price |
$ | 0.0500 |  | 24,000,000 |  |  | 1.91 |  |  | $ | 0.0500 |  |  | 24,000,000 |  | $ | 0.0500 |
$ | 0.0585 |  | 50,000,000 |  |  | 5.04 |  |  | $ | 0.0585 |  |  | 31,250,000 |  | $ | 0.0585 |
$ | 0.0600 |  | 30,000,000 |  |  | 2.00 |  |  | $ | 0.0600 |  |  | 22,500,000 |  | $ | 0.0600 |
$ | 0.0650 |  | 634,825 |  |  | 3.43 |  |  | $ | 0.6500 |  |  | 634,825 |  | $ | 0.0650 |
$ | 0.0680 |  | 4,770,000 |  |  | 3.42 |  |  | $ | 0.0680 |  |  | 4,770,000 |  | $ | 0.0680 |
$ | 0.0700 |  | 2,850,000 |  |  | 1.86 |  |  | $ | 0.0700 |  |  | 1,837,500 |  | $ | 0.0700 |
$ | 0.0900 |  | 1,500,000 |  |  | 3.17 |  |  | $ | 0.0900 |  |  | 1,500,000 |  | $ | 0.0900 |
$ | 0.1100 |  | 5,400,000 |  |  | 4.96 |  |  | $ | 0.1100 |  |  | 5,400,000 |  | $ | 0.1100 |
$ | 0.1799 |  | 2,099,367 |  |  | 4.42 |  |  | $ | 0.1799 |  |  | — |  | $ | — |
$ | 0.2000 |  | 100,000 |  |  | 4.88 |  |  | $ | 0.2000 |  |  | — |  | $ | — |
|  |  | 121,354,192 |  |  | 3.49 |  |  | $ | 0.0628 |  |  | 91,892,325 |  | $ | 0.0610 |
Transactions involving stock options issued to employees are summarized as follows:
|  | Number of Shares |  |  | Weighted Average Exercise Price Per Share |  |  | Aggregate Intrinsic Value
Outstanding at October 1, 2011 |  |  | 120,650,000 |  |  | $ | 0.060 |  |  |  |
Granted |  |  | 6,558,825 |  |  |  | 0.070 |  |  |  |
Exercised |  |  | (500,000 | ) |  |  | (0.080 | ) |  |  |
Cancelled or expired |  |  | (1,500,000 | ) |  |  | (0.080 | ) |  |  |
Outstanding at September 30, 2012 |  |  | 125,208,825 |  |  | $ | 0.060 |  |  |  |
Granted |  |  | 7,599,367 |  |  |  | 0.131 |  |  |  |
Exercised |  |  | (5,979,000 | ) |  |  | (0.042 | ) |  |  |
Canceled or expired |  |  | (5,475,000 | ) |  |  | (0.109 | ) |  |  |
Outstanding at June 30, 2013 |  |  | 121,354,192 |  |  | $ | 0.063 |  |  |  |
Vested at June 30, 2013 |  |  | 91,892,325 |  |  | $ | 0.061 |  |  | $ | 0.138
Non-vested at June 30, 2013 |  |  | 29,461,867 |  |  | $ | 0.068 |  |  | $ | 0.131
Transactions involving stock options granted to employees are summarized as follows: On November 30, 2012, the Company granted an aggregate of 2,099,367 options to non-employee board of director members (except Mr. Catenacci) under the 2005 Incentive Stock Plan. The options are exercisable at $0.1799 per share for five years, vesting one year from the date of issuance. The fair value of options was determined using the Black Scholes Option Pricing Model with the following assumptions: dividend yield $-0-, volatility of 146.33% and risk free rate of 0.82%. On May 12, 2013, the Company granted an aggregate of 100,000 options to an employee under the 2005 Incentive Stock Plan. The options are exercisable at $0.20 per share for five years, vesting at 25% each anniversary for the next four years. The fair value of the options was determined using the Black Scholes Option Pricing Model with the following assumptions: dividend yield $-0-, volatility of 117.57% and risk free rate of 0.60%. During the nine months ended June 30, 2013, the Company issued 4,639,483 shares of its Common Stock in connection with the cashless exercise of 5,954,000 options to acquire the Company stock at weighted average $.053 per share. The Company also issued 25,000 shares of its Common Stock in connection with the exercise of 25,000 options at $0.06 per share. On May 15, 2013 the Company extended the term of 5,400,000 options that were set to expire to June 16, 2018. The Company recorded $408,605 of stock compensation expense for the three and nine months ended June 30, 2013 in connection with this modification as the incremental difference between the fair value of the stock options immediately before and after the modification. The Company recorded $870,576 and $1,743,598 (including the stock option modification) as stock compensation expense for the three and nine month periods ended June 30, 2013, respectively, and $389,533 and $1,564,311 for the three and nine month periods ended June 30, 2012, respectively, for the vesting portion of all employee options outstanding. As of June 30, 2013, unrecorded compensation cost related to non-vested awards was $289,106, which is expected to be recognized through 2018.

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- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6406099&loc=d3e25284-112666 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 14 + Details
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