Note 8 - Stock-based Awards

3 Months Ended

Dec. 31, 2015

Notes

Note 8 - Stock-based Awards:

NOTE 8 – STOCK-BASED AWARDS:

During the year ended September 30, 2015 our Board of Directors adopted and our stockholders approved the adoption of the Company’s 2015 Stock and Incentive Plan. This plan replaces our 2005 Equity Incentive Plan, as amended.  The aggregate number of shares that may be issued to employees, directors, and consultants under all stock-based awards made under the 2015 Stock and Incentive Plan is 4 million shares of our common stock.  Upon exercise of stock-based awards, shares are issued from the available authorized shares of the Company.  Option awards are granted with an exercise price equal to the fair value of our stock at the date of grant. 

The 2005 Equity Incentive Plan, as amended, terminated on May 28, 2015 and no stock or option awards may be granted under this plan after it was terminated.  533,778 stock options remain outstanding and may be exercised under the 2005 Equity Incentive Plan, as amended. 

During the three months ended December 31, 2015, 43,837 stock options and 675,000 stock unit awards were granted to certain employees by the Company’s Board of Directors and vested immediately.  Stock unit awards are awards granted under the Company’s 2015 Stock and Incentive Plan which are payable in common shares of the Company upon the occurrence of certain events, achievement of certain milestones, or at a future date.  Total compensation cost of options and stock unit awards for employees was $351,966 and $55,500 for the three months ended December 31, 2015 and 2014 respectively.  These costs are classified under salaries and benefits expense.  The fair value of the stock unit awards was determined by the closing price of the Company’s common stock on the NYSE MKT on the grant date.  The fair value of the option awards was estimated on the date of grant with a Black-Scholes option-pricing model using the assumptions noted in the following table:

	October 6, 2015
Expected volatility	110.4%
Stock price on date of grant	$0.50
Expected dividends	-
Expected term (in years)	3
Risk-free rate	0.90%
Expected forfeiture rate	0%

The following is a summary of our options issued under the Amended 2005 Equity Incentive Plan and the 2015 Stock and Incentive Plan:

		Options		Weighted  Average  Exercise Price
Outstanding at September 30, 2015			533,778	$	2.48
	Granted		43,837		0.50
	Exercised		-		-
	Expired		-		-
Outstanding at December 31, 2015			577,615	$	2.33
Exercisable at December 31, 2015			577,615	$	2.33
Weighted average fair value of options granted during the three months ended December 31, 2015				$	0.33
Unrecognized compensation expense related to options at December 31, 2015				$	-
Average remaining contractual term of options outstanding and exercisable at December 31, 2015 (years)
Outstanding					3.31
Exercisable					3.31

The aggregate of options exercisable as of December 31, 2015 had an intrinsic value of nil based on the closing price of $0.17 per share of our common stock on December 31, 2015.