XML 25 R15.htm IDEA: XBRL DOCUMENT v3.20.4
Note 9 - Equity
 12 Months Ended
Sep. 30, 2020
Notes to Financial Statements  
Stockholders' Equity Note Disclosure [Text Block]
NOTE 
9.
EQUITY
 
Preferred Stock
 
The Company has authorized
20,000,000
shares of
$.0001
par value preferred stock.
No
preferred shares were outstanding at
September 30, 2020
and
2019.
 
Common Stock
 
On
December 12, 2017,
the Company entered into an amended and restated equity line agreement with Mountain States Capital, LLC (MSC). Under the equity line agreement, MSC agreed to provide the Company with up to
$10,000,000
of funding through the purchase of shares of the Company's common stock.
 
During the term of the Agreement, the Company, at its sole discretion,
may
deliver a Put Notice to MSC, which will specify the dollar amount which the Company wants to draw down under the Equity Line. The amount the Company can draw down at any
one
time is the lesser of twice the average of the
10
-day average daily trading volume (computed by multiplying the volume weighted average price for each day by the number of shares traded for that day), or
$500,000.
 
A closing will occur on the date which is
no
earlier than
five
trading days following and
no
later than
seven
trading days following the applicable Put Notice. On each Closing Date, the Company will sell, and MSC will purchase, the shares of the Company's common stock specified in the Put Notice.
 
The amount to be paid by MSC on a particular Closing Date will be determined by dividing the dollar amount specified in the Put Notice by the Purchase Price. The Purchase Price is
90%
of the lowest daily volume weighted average price of the Company's common stock during the Pricing Period. The Pricing Period, with respect to a particular Put Notice, is
five
consecutive trading days including, and immediately following, the delivery of a Put Notice. However,
no
Put Notice
may
be delivered on a day that is
not
a Trading Day.
 
The equity line agreement expired on
August 14, 2019.
 
During the year ended
September 30, 2019,
the Company submitted Put Notices for a total of
715,981
shares for
$1,211,000
in cash.
 
During the year ended
September 30, 2019,
the Company converted debt and interest of
$261,513
into
174,342
shares of common stock.
 
During the year ended
September 30, 2019,
we issued
119,734
shares of stock for services valued
$154,998.
 
During the year ended
September 30, 2020,
we issued
191,490
shares of stock for services valued
$90,000.
 
During the year ended
September 30, 2019,
the Company issued
388,000
shares of common stock for total proceeds of
$475,500
from the exercise of warrants.
 
Stock Options
On
August 18, 2017,
our board of directors adopted a stock incentive plan (“the plan”) that provides for the grant of Incentive Stock Options, Non-Qualified Stock Options or Stock Bonuses to persons who are employees of the Company, employees of subsidiaries of the Company, directors, officers, and consultants. Under the plan, the Company
may
grant up to
1,500,000
options, each to purchase
one
share of common stock, subject to an exercise price and vesting schedule to be established by the board of directors at the time of the grant.
 
The fair value of the options granted during the years ended
September 30, 2020
and
2019
were established using the Black Scholes option pricing model using the following assumptions:
 
 
●
Risk-free interest rate – 
0.28%
 to
1.55%
 
●
Expected term –
4.8
to
5.0
years
 
●
Volatility – 
118%
 to
142%
 
Options Issuances in
2020
 
On
September 30, 2020,
the Company awarded a total of
500,000
options to
two
executives at an exercise price of
$1.50
per share. The options vested immediately and can be exercised at any time on or before
September 30, 2025.
 
On
September 30, 2020,
the Company also awarded a total of
500,000
options to
two
executives at an exercise price of
$3.00
per share. The options vested immediately and can be exercised at any time on or before
September 30, 2025.
 
As these options were fully vested at grant date, the full value of
$301,770
was recognized immediately as stock based compensation expense and
no
further expense will be recognized associated with these awards.
 
Options Issuances in
2019
 
On
September 30, 2019,
the Company awarded a total of
600,000
options to
two
executives at an exercise price of
$1.50
per share. The options vested immediately and can be exercised at any time on or before
August 2, 2024.
 
As these options were fully vested at grant date, the full value of
$488,793
was recognized immediately as stock based compensation expense and
no
further expense will be recognized associated with these awards.
 
On
August 27, 2019,
the Company awarded a total of
300,000
options to an executive at an exercise price of
$1.50
per share. The options vest over a period of
2.5
years and can be exercised any time on or before
August, 27, 2024.
 
 The following table shows the stock option activity for the years ended
September 30, 2020
and
2019:
 
 
   
 
 
 
  
 
 
 
  
Weighted
    
 
 
 
   
 
 
 
  
Weighted
    
Average
    
 
 
 
   
 
 
 
  
Average
    
Contractual
    
Aggregate
  
   
Number of
    
Exercise
    
Term
    
Intrinsic
  
   
Shares
    
Price
    
(Years)
    
Value
 
                                 
Outstanding as of September 30, 2018
    
150,000
     $
2.21
      
2.9
     $
-
  
Granted
    
900,000
      
1.50
      
4.8
      
-
  
Outstanding as of September 30, 2019
    
1,050,000
     $
1.64
      
4.4
     $
-
  
Granted
    
1,000,000
     $
2.25
      
5.0
     $
-
  
Forfeited
    
(200,000
 )   $
1.50
      
 
      
 
  
Outstanding as of September 30, 2020
    
1,850,000
     $
1.99
      
4.2
     $
-
  
Vested and expected to vest at September 30, 2020
    
1,850,000
     $
1.99
      
4.2
     $
-
  
Exercisable at September 30, 2020
    
1,850,000
     $
1.99
      
4.2
      
 
  
 
Stock based compensation expense related to the options was
$471,971
and
$578,790
for the years ended
September 30, 2020
and
2019,
respectively. At
September 30, 2020,
unrecognized stock-based compensation associated with stock options amounted to
$0.
During the years ended
September 30, 2020
and
2019,
we received proceeds of
$0
from stock option exercises.
 
Warrants
 
Warrant Issuances in
2020
 
The Company did
not
issue any warrants during the year ended
September 30, 2020.
 
Warrant Issuances in
2019
 
As disclosed in Notes
5
and
10,
the Company issued warrants to purchase up to
600,000
shares of common stock at an exercise price of
$1.50
per share and expire on
August 2, 2024.
The fair value of the warrants was determined using the Black-Scholes option pricing model.
 
In
August 2019,
as part of the Company's
$4,000,000
financing, the Company issued warrants to purchase
48,000
shares of the Company's stock to the placement agent as commission. The warrants are exercisable at a price of
$1.50
per share and expire on
August 2, 2024.
 
In
September 2010,
as part of the Company's debt modification, the Company issued warrants to purchase up to
1,500,000
shares of the Company's stock to the noteholder. The warrants are exercisable at a price of
$1.25
per share and expire on
December 31, 2022.
 
The fair value of the warrants issued in
2019
was determined using the Black-Scholes option pricing model using the following assumptions:
 
 
● 
Expected term –
3.25
to
5
years
 
● 
Volatility –
119%
to
144%
 
● 
Risk-free rate –
1.56%
to
1.67%
 
● 
Stock price -
$0.95
 to
$1.23
 
● 
Expected dividends –
$0
 
The following table shows the warrant activity for the years ended
September 30, 2020
and
2019:
 
 
   
 
 
 
  
 
 
 
  
Weighted
    
 
 
 
   
 
 
 
  
Weighted
    
Average
    
 
 
 
   
 
 
 
  
Average
    
Contractual
    
Aggregate
  
   
Number of
    
Exercise
    
Term
    
Intrinsic
  
   
Shares
    
Price
    
(Years)
    
Value
 
                                 
Outstanding as of September 30, 2018    
9,478,650
     $
1.55
     $
2.6
     $
-
  
Granted    
2,148,000
      
1.33
      
-
      
 
  
Exercised    
(388,000
 )    
1.23
      
 
      
 
  
Outstanding as of September 30, 2019
    
11,238,650
      
1.52
      
2.30
     $
-
  
Expired
    
(1,600,000
 )    
2.25
      
 
     $
 
  
Outstanding as of September 30, 2020
    
9,638,650
      
1.39
      
1.80
      
-
  
Exercisable at September 30, 2020
    
9,638,650
      
1.39
      
1.50
     $
-