Quarterly report pursuant to Section 13 or 15(d)

4. Stock-based Compensation

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4. Stock-based Compensation
9 Months Ended
Jun. 30, 2014
Share-based Compensation [Abstract]  
Stock-based Compensation

From time to time, the Company grants stock options and restricted stock awards to officers, directors, employees and consultants. These awards are valued based on the grant date fair value of the instruments, net of estimated forfeitures. The value of each award is amortized on a straight-line basis over the requisite service period.

 

Stock Options

 

The following table summarizes stock option activity for the nine months ended June 30, 2014:

 

          Weighted     Weighted        
          Average     Average        
    Number of     Exercise     Remaining        
    Shares     Price     Contractual Life     Intrinsic Value  
Outstanding at September 30, 2013     675,000     $ 2.82                  
Granted                              
Exercised                              
Forfeited                              
Outstanding at June 30, 2014     675,000     $ 2.82       5.11        
Exercisable at June 30, 2014     187,500     $ 2.82       3.25        

 

The Company recognized compensation expense of $32,735 and $138,595 during the three and nine months ended June 30, 2014, respectively, and $75,189 and $107,198 during the three and nine months ended June 30, 2013, related to stock option awards granted to certain employees and executives based on the grant date fair value of the awards, net of estimated forfeitures.

 

At June 30, 2014, the Company had $129,473 of unrecognized compensation expense (net of estimated forfeitures) associated with stock option awards which the Company expects will be recognized over a weighted-average period of 1.48 years.

 

The following table summarizes information about the Company’s non-vested shares as of June 30, 2014:

 

             
          Weighted-Average  
    Number of     Grant-Date  
Non-vested Shares   Shares   Fair Value  
Nonvested at September 30, 2013     600,000     $ 0.73  
Granted              
Vested     (112,500 )        
Nonvested at June 30, 2014     487,500     $ 0.73  

 

Restricted Stock Awards

 

The Company has previously granted shares of restricted stock to certain individuals. The following table sets forth changes in compensation-related restricted stock awards during the nine months ended June 30, 2014:

 

Outstanding (unvested) at September 30, 2013      
Granted     21,000  
Forfeited      
Vested     (21,000 )
Outstanding (unvested) at June 30, 2014      

 

On January 6, 2014, the Company issued 21,000 shares of common stock in exchange for professional services. As of June 30, 2014, all 21,000 shares were fully vested.

 

Stock Awards Granted to Directors

 

In September 2011, in an effort to preserve cash, our Board, after consultation with the Compensation Committee, determined to compensate members of the Board for their monthly retainer and other services as directors and/or members of the Board’s various standing committees through the award of shares of the Company’s common stock under the Company’s Amended and Restated 2003 Stock Plan (the “2003 Stock Plan”) in lieu of cash payments to directors. Under the terms of this arrangement, each non-employee director received a monthly award of a number of fully vested shares of the Company’s common stock equal to his or her monthly board of director cash fees divided by the closing market price of the Company’s common stock on the grant date. An aggregate of 251,965 shares have been issued to members of the Board of Directors pursuant to such arrangement. Other than as described immediately above, 30,084 shares of the Company’s common stock were recorded but not yet issued to members of the Board at June 30, 2014.