XML 25 R12.htm IDEA: XBRL DOCUMENT

6. SHARE-BASED COMPENSATION

6 Months Ended

Mar. 31, 2019

Share-based Payment Arrangement [Abstract]

NOTE 6 SHARE-BASED COMPENSATION

Stock Options

The fair value of each option award is estimated on the date of grant using the Black-Scholes option pricing model that uses the following assumptions. The expected term represents the period over which the stock option awards are expected to be outstanding. The Company utilizes the "simplified" method to develop an estimate of the expected term of "plain vanilla" employee option grants. The expected volatility used is based on the historical price of the Company's stock over the most recent period commensurate with the expected term of the award. The risk-free interest rate used is based on the implied yield of U.S. Treasury zero-coupon issues with a remaining term equivalent to the award's expected term. The Company historically has not paid any dividends on its common stock and had no intention to do so on the date the share-based awards were granted. The estimated annual forfeiture rate is based on management's expectations and will reduce expense ratably over the vesting period. The forfeiture rate will be adjusted periodically based on the extent to which actual option forfeitures differ, or are expected to differ, from the previous estimate, when it is material.

In applying the Black-Scholes option pricing model to options granted, the Company used the following assumptions:


	For the Three Months Ended March 31,		For the Six Months Ended March 31,
	2019	2018	2019	2018
Expected term (years)	2.50-2.75	3.50	2.50-2.75	3.50
Expected volatility	82.0%	103.1%	82.0%	103.1%
Risk free interest rate	2.53%	2.45%	2.53%	2.45%
Expected dividends	0.00%	0.00%	0.00%	0.00%
Estimated annual forfeiture rate	0%	10%	0%	10%

On February 5, 2019, the Company granted five-year options to three non-employee directors to purchase an aggregate of 150,021 shares of common stock at an exercise price of $1.54 per share. The shares vest one year from the grant date. The options had an aggregate grant date fair value of $120,000, which is being amortized over the vesting period of the options.

On February 5, 2019, the Company granted five-year immediately vested options to two non-employee directors to purchase an aggregate of 140,460 shares of common stock at an exercise price of $1.54 per share. The options had an aggregate grant date fair value of $107,800, which was recognized immediately.

The options granted during the three and six months ended March 31, 2019 had a weighted average grant date value of $0.78 per share.

The following table summarizes stock option activity during the six months ended March 31, 2019:

	Number of Options	Weighted Average Exercise Price	Weighted Average Remaining Life In Years	Intrinsic Value
Outstanding, September 30, 2018	545,066	$ 1.78
Granted	290,481	1.54
Exercised	-	-
Forfeited	(21,000)	1.79
Expired	-	-
Outstanding, March 31, 2019	815,547	$ 1.69	4.3	$ 63,268
Exercisable, March 31, 2019	622,673	$ 1.73	4.2	$ 63,268

The Company recognized compensation expense of approximately $135,000 and $4,000 during the three months ended March 31, 2019 and 2018, respectively, and approximately $145,000 and $5,000 during the six months ended March 31, 2019 and 2018, respectively, for stock option awards in its condensed consolidated statements of operations and comprehensive income (loss).

As of March 31, 2019, there was approximately $130,000 of total unrecognized compensation cost related to nonvested stock option awards that is expected to be recognized over a weighted average period of 1.0 years.

The following table provides additional information regarding stock option awards that were outstanding and exercisable at March 31, 2019:

Options Outstanding				Options Exercisable
	Weighted			Weighted		Weighted
	Average		Outstanding	Average		Average	Exercisable
Exercise	Exercise		Number of	Exercise		Remaining Life	Number of
Price	Price		Options	Price		In Years	Options

$0.64 to $1.23	$	0.80	77,500	$	0.80	5.6	77,500
$1.44 to $1.67		1.51	609,547		1.49	4.8	416,673
$2.43 to $2.73		2.48	66,000		2.48	1.1	66,000
$3.73 to $3.79		3.74	62,500		3.74	1.9	62,500
			815,547			4.2	622,673

Restricted Stock Awards

The Company recognized compensation expense of approximately $1,000 and $41,000 during the three months ended March 31, 2019 and 2018, respectively, and approximately $3,000 and $36,000 during the six months ended March 31, 2019 and 2018, respectively, for restricted stock awards in its condensed consolidated statements of operations and comprehensive income (loss). As of March 31, 2019, there was no unrecognized compensation expense related to nonvested restricted stock awards.

The following table summarizes restricted stock activity during the six months ended March 31, 2019:

			Weighted
			Average		Total
	Number of		Grant Date		Grant Date
	Shares		Fair Value		Fair Value
Non-vested, September 30, 2018	6,028		$	1.24	$	7,475
Granted	-			-		-
Vested	(6,028	)		1.24		(7,475	)
Forfeited	-			-		-
Non-vested, March 31, 2019	-		$	-	$	-