STOCK OPTIONS AND WARRANTS

12 Months Ended

Sep. 30, 2015

Stock Options And Warrants [Abstract]

Stock Options And Warrants [Text Block]

NOTE 8:  STOCK OPTIONS AND WARRANTS

As of September 30, 2015, we had issued options and warrants still outstanding to purchase up to 350,000 ONSM common shares, including 50,000 shares under Plan Options to financial and other consultants and 300,000 shares under warrants issued in connection with various financings and other transactions.

On September 18, 2007, our Board of Directors and a majority of our shareholders adopted the 2007 Equity Incentive Plan (the “Plan”), which authorized the issuance of up to 1,000,000 shares of ONSM common stock pursuant to stock options, stock purchase rights, stock appreciation rights and/or stock awards for employees, directors and consultants. On March 25, 2010, our Board of Directors and a majority of our shareholders approved a 1,000,000 increase in the number of shares authorized for issuance under the Plan, for total authorization of 2,000,000 shares and on June 13, 2011 they authorized a further increase in authorized Plan shares by 2,500,000 to 4,500,000. Based on the issuance of 3,627,763 common shares under the Plan (including 2,875,000 Executive Incentive Shares issued plus 375,000 Executive Incentive Shares accrued for potential issuance, both as discussed in note 5) through September 30, 2015 and 50,000 outstanding financial consultant Plan Options as of September 30, 2015, there are 822,237 shares available for additional issuances under the Plan.

Details of employee, consultant, and director Plan Option activity under the Plan for the year ended September 30, 2015 are as follows:

	Number of Shares	Weighted Average  Exercise  Price
Balance, September 30, 2014	481,185	$	1.76
Granted during the period	-	$	-
Expired or forfeited during the period	(481,185)	$	1.76
Balance, September 30, 2015	-	$	-
Exercisable at September 30, 2015	-	$	-

As of September 30, 2015, there were outstanding and fully vested Plan Options issued to financial and other consultants for the purchase of 50,000 common shares, as follows:

	Number of  common  shares
		Exercise price  per share		Expiration Date
Issuance date			Type
November 2011	30,000	$0.92	Plan	Nov 2016
July 2012	20,000	$6.00	Plan	July 2016
Total common shares underlying financial consultant  options as of  September 30, 2015	50,000

As of September 30, 2015, there were outstanding vested warrants, issued in connection with various financings, to purchase an aggregate of 300,000 shares of common stock, as follows:

	Number of  common  shares
		Exercise price  per share	Expiration  Date
Description of transaction
LPC stock purchase – February 2012 (“New LPC Warrant 2”)	50,000	$0.38	February 2017
LPC Purchase Agreement – September 2010 (“New LPC Warrant 1”)	250,000	$0.38	March 2016
Total common shares underlying warrants as of September 30, 2015	300,000

On September 17, 2010, we entered into a purchase agreement (the “LPC Purchase Agreement”) with Lincoln Park Capital Fund, LLC (“LPC”), whereby LPC agreed to purchase, and did purchase, a certain number of our common and preferred shares during the term of the LPC Purchase Agreement, which term expired on September 17, 2013. In connection with the LPC Purchase Agreement, we also issued LPC a five-year warrant to purchase 540,000 unregistered common shares at an exercise price of $2.00 per share, which due to certain anti-dilution provisions was eventually adjusted to allow purchase of 627,907 shares at $1.72 per share (“LPC Warrant 1”). Effective October 25, 2012, LPC Warrant 1 was cancelled and replaced with New LPC Warrant 1, with 250,000 underlying common shares exercisable at $0.38 per share, with such amounts only adjustable in accordance with standard anti-dilution provisions – certain price-based anti-dilution provisions that were in LPC Warrant 1 are not included in New LPC Warrant 1.

On February 15, 2012, in exchange for $140,000 cash proceeds, we issued LPC 200,000 unregistered common shares and a five-year warrant to purchase 100,000 unregistered common shares at an exercise price of $1.00 per share (“LPC Warrant 2”). This transaction was unrelated to the LPC Purchase Agreement. Effective October 25, 2012, LPC Warrant 2 was cancelled and replaced with New LPC Warrant 2, which was issued with 50,000 underlying common shares exercisable at $0.38 per share, with such amounts only adjustable in accordance with standard anti-dilution provisions.

New LPC Warrant 1 and New LPC Warrant 2 contain certain cashless exercise rights, as did the predecessor warrants. The number of shares of ONSM common stock that can be issued upon the exercise of New LPC Warrant 1 or New LPC Warrant 2 is limited to the extent necessary to ensure that following the exercise the total number of shares of ONSM common stock beneficially owned by the holder does not exceed 4.99% of our issued and outstanding common stock, although this percentage may be changed at the holder’s option upon not less than 61 days advance notice to us and provided the changed limitation does not exceed 9.99%.

The exercise prices of New LPC Warrant 1 and New LPC Warrant 2 are subject to adjustment for various factors, including in the event of stock splits, stock dividends, pro rata distributions of equity securities, evidences of indebtedness, rights or warrants to purchase common stock or cash or any other asset or mergers or consolidations. Such adjustment of the exercise price would in most cases result in a corresponding adjustment in the number of shares underlying the warrant.