During the three months ended March 31, 2018, 1,600,000 stock options with an exercise price of $0.17 and a five-year term where granted to our employees and directors. All of the awarded stock options vested immediately. The fair value of all of the options that were granted and vested during the three months ended March 31, 2018 was $192,000 ($0.12 per option).

During the three months ended March 31, 2017, 250,000 stock options with an exercise price of $0.33 and a three-year term where granted to a consultant company. The options vested quarterly over a one-year period. The fair value of the 62,500 options that were vested during the three months ended March 31, 2017 was $15,000 ($0.24 per option) and was classified as other general and administrative expense. The value of the remaining 187,500 options was $45,000 and was recognized evenly over the following three quarters as the options vested, including $15,000 that was recognized during the three months ended December 31, 2017, which is included in the compensation cost of options for non-employees for the six months ended March 31, 2018.

The value of the options was estimated on the date of grant with a Black-Scholes option-pricing model using the assumptions noted in the following table:

	2018	2017
Expected volatility	121.6%	128.2%
Stock price on date of grant	$0.17	$0.33
Expected dividends	-	-
Expected term (in years)	3	3
Risk-free rate	2.33%	1.68%
Expected forfeiture rate	0%	0%

For the three and six months ended March 31, 2018 and 2017, the total compensation cost of stock options for employees was $120,000 and nil, respectively. These costs were classified under salaries and benefits expense.

For the three months ended March 31, 2018 and 2017, the total compensation cost of options for non-employees was $72,000 and $15,000, respectively. These costs were classified under other general and administrative expense.

For the six months ended March 31, 2018 and 2017, the total compensation cost of options for non-employees was $87,000 and $15,000, respectively. These costs were classified under other general and administrative expense.

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, 2017			2,233,334	$	0.41
	Granted		1,600,000		0.17
	Expired		(853,334)		(0.43)
Outstanding and exercisable at March 31, 2018			2,980,000	$	0.28


Weighted average fair value of options granted during the three months ended March 31, 2018				$	0.12

Average remaining contractual term of options outstanding and exercisable at March 31, 2018 (years)					3.91

The aggregate of options exercisable as of March 31, 2018 had an intrinsic value of nil, based on the closing price of $0.17 per share of our common stock on March 31, 2018.