STOCK-BASED AWARDS

12 Months Ended

Sep. 30, 2022

STOCK-BASED AWARDS

STOCK-BASED AWARDS

NOTE 9 – STOCK-BASED AWARDS:

During the year ended September 30, 2019, the Company’s shareholders approved and the Company’s Board of Directors adopted of the Company’s 2018 Stock and Incentive Plan. This plan replaced the Company’s 2015 Equity Incentive Plan. The aggregate number of shares that could be issued to employees, directors, and consultants under all stock-based awards made under the 2018 Stock and Incentive Plan was 8 million shares of the Company’s common stock.

During the year ended September 30, 2021, the Company’s shareholders approved an increase to the number of shares of common stock reserved for issuance under the Plan to 15,000,000 shares of common stock, including 10,000,000 shares of common stock reserved for incentive stock options. Upon exercise of options or other 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 the Company’s stock at the date of grant.

On October 8, 2020, the Company granted a total of 750,000 options to purchase shares of the Company’s common stock that vest over a three-year period. These vesting options had a total fair value of $177,284, with $44,322 recognized immediately and $44,321 being recognized in each of following three years covered by the vesting period. An additional 350,000 options with the same terms were also granted on this date that vested immediately with a total fair value of $82,700.

On May 6, 2021, the Company granted a total of 2,785,000 options to employees, consultants, officers and directors to purchase shares of the Company’s common stock that expire in five years with an exercise price of $0.25. All options vested upon issuance.

The share-based compensation for the option awards granted during 2021 recognized during the years ended September 30, 2022 and 2021 was $44,321 and $646,422, respectively. Unrecognized compensation of $88,642 will be recognized over the next 13 months. Fair values of options issued were measured on the date of the grant with a Black-Scholes option-pricing model using the assumptions noted in the following table:

	Options Granted at May 6, 2021			Options Granted at October 8, 2020
Expected volatility		167.9	%		171.9	%
Stock price on date of grant	$	0.20		$	0.25
Exercise price	$	0.25		$	0.25
Expected dividends		-			-
Expected term (in years)		5			5
Risk-free rate		0.05	%		0.09	%
Expected forfeiture rate		0	%		0	%
Fair value of vested options at grant date	$	519,400		$	259,984

The cost of options granted to employees is recorded as salaries and benefits, and the cost of options granted to directors and consultants is recorded as other general and administrative expenses. The total compensation cost of options vested under the plan, charged against operations, is included in the consolidated statements of operations as follows:

	Fiscal year ended September 30,
	2022		2021
Salaries and benefits	$	44,321	$	271,522
Other general and administrative expenses		-		374,900
Total	$	44,321	$	646,422

The following is a summary of the Company’s options issued under the Amended 2005 Equity Incentive Plan, the 2015 Stock and Incentive Plan and the 2018 Stock and Incentive Plan:

	Options		Weighted Average  Exercise Price
Outstanding at September 30, 2021		8,335,000		0.18
Outstanding at September 30, 2022		8,335,000	$	0.18
Exercisable at September 30, 2022		7,960,000	$	0.17
Weighted average fair value of options granted during the fiscal year ended September 30, 2022			$	-
Average remaining contractual term of options outstanding and exercisable at September 30, 2022 (years)				2.31
Intrinsic value of options outstanding at September 30, 2022			$	79,500
Intrinsic value of options exercisable at September 30, 2022			$	79,500