• Filing Date: 2019-05-14
  • Form Type: 10-Q/A
  • Description: Quarterly report (Amendment)
v3.19.1
Document and Entity Information - shares
6 Months Ended
Mar. 31, 2019
May 09, 2019
Document And Entity Information    
Entity Registrant Name CEL SCI CORP  
Entity Central Index Key 0000725363  
Document Type 10-Q  
Document Period End Date Mar. 31, 2019  
Amendment Flag false  
Current Fiscal Year End Date --09-30  
Is Entity's Reporting Status Current? Yes  
Entity Filer Category Non-accelerated Filer  
Entity Emerging Growth Company false  
Entity Small Business true  
Entity Common Stock, Shares Outstanding   33,702,852
Document Fiscal Period Focus Q2  
Document Fiscal Year Focus 2019  
v3.19.1
BALANCE SHEETS - USD ($)
Mar. 31, 2019
Sep. 30, 2018
CURRENT ASSETS:    
Cash and cash equivalents $ 5,514,013 $ 10,310,044
Receivables 123,236 118,657
Prepaid expenses 355,948 364,622
Inventory used for R&D and manufacturing 761,012 645,238
Total current assets 6,754,209 11,438,561
Plant, property and equipment, net 16,086,828 16,218,851
Patent costs, net 243,253 258,093
Deposits 1,670,917 1,670,917
Total Assets 24,755,207 29,586,422
CURRENT LIABILITIES:    
Accounts payable 4,158,732 5,743,913
Accrued expenses 287,890 205,310
Due to employees 1,010,015 764,941
Derivative instruments, current portion 0 2,498,606
Other current liabilities 13,984 14,029
Total current liabilities 5,470,621 9,226,799
Derivative instruments - net of current portion 4,727,929 6,818,458
Lease Liability 13,444,394 13,379,962
Deferred income 126,849 126,795
Other liabilities 29,892 33,492
Total liabilities 23,799,685 29,585,506
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY    
Preferred stock, $.01 par value-200,000 shares authorized; -0- shares issued and outstanding 0 0
Common stock, $.01 par value - 600,000,000 shares authorized; 29,951,628 and 28,034,487 shares issued and outstanding at March 31, 2019 and September 30, 2018, respectively 299,517 280,346
Additional paid-in capital 337,449,398 331,312,184
Accumulated deficit (336,793,393) (331,591,614)
Total stockholders' equity 955,522 916
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 24,755,207 $ 29,586,422
v3.19.1
BALANCE SHEETS (Parenthetical) - $ / shares
Mar. 31, 2019
Sep. 30, 2018
Stockholders Equity    
Preferred Stock Shares Par Value $ 0.01 $ 0.01
Preferred Stock Shares Authorized 200,000 200,000
Preferred Stock Shares Issued 0 0
Preferred Stock Shares Outstanding 0 0
Common Stock Shares Par Value $ 0.01 $ 0.01
Common Stock Shares Authorized 600,000,000 600,000,000
Common Stock Shares Issued 29,951,628 28,034,487
Common Stock Shares Outstanding 29,951,628 28,034,487
v3.19.1
STATEMENTS OF OPERATIONS - USD ($)
3 Months Ended 6 Months Ended
Mar. 31, 2019
Mar. 31, 2018
Mar. 31, 2019
Mar. 31, 2018
Income Statement [Abstract]        
Grant income $ 150,769 $ 114,271 $ 277,183 $ 210,586
Operating Expenses:        
Research and development 2,525,460 2,962,297 5,657,648 5,288,311
General & administrative 1,931,909 1,375,410 3,960,597 4,074,723
Total operating expenses 4,457,369 4,337,707 9,618,245 9,363,034
Operating loss (4,306,600) (4,223,436) (9,341,062) (9,152,448)
Other income 18,216 17,691 36,127 35,273
(Loss) gain on derivative instruments (967,171) 1,154,815 4,589,135 196,585
Other non-operating gain (loss) (730,823) (768,810) 421,353 (22,109)
Interest expense, net (461,303) (888,395) (907,332) (1,953,266)
Net loss available to common shareholders $ (6,447,681) $ (4,708,135) $ (5,201,779) $ (10,895,965)
Net loss per common share        
Basic $ (0.22) $ (0.31) $ (0.18) $ (0.81)
Diluted $ (0.22) $ (0.31) $ (0.19) $ (0.81)
Weighted average common shares outstanding        
Basic 29,113,910 15,210,296 28,543,417 13,403,878
Diluted 29,113,910 15,210,296 28,548,818 13,403,878
v3.19.1
STATEMENTS OF CASH FLOWS - USD ($)
6 Months Ended
Mar. 31, 2019
Mar. 31, 2018
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net loss $ (5,201,779) $ (10,895,965)
Adjustments to reconcile net income (loss) to net cash used in operating activities:    
Depreciation and amortization 316,083 308,259
Share-based payments for services 511,424 157,991
Equity based compensation 1,104,490 1,727,915
Common stock contributed to 401(k) plan 72,124 72,400
Shares issued for settlement of clinical research costs 1,290,000 1,247,400
Gain on derivative instruments (4,589,135) (196,585)
Amortization of debt discount 0 1,023,084
Capitalized lease interest 64,432 83,564
(Increase)/decrease in assets:    
Receivables (4,579) 81,698
Prepaid expenses (74,741) 42,748
Inventory used for R&D and manufacturing (115,774) 42,211
Deposits 0 150,000
Increase/(decrease) in liabilities:    
Accounts payable (1,489,234) (541,767)
Accrued expenses 82,580 (33,966)
Due to employees 245,074 360,972
Other liabilities (1,057) 2,638
Net cash used in operating activities (7,790,092) (6,367,403)
CASH FLOWS FROM INVESTING ACTIVITIES:    
Purchases of equipment (160,920) 0
Expenditures for patent costs (67,661) (1,113)
Net cash used in investing activities (228,581) (1,113)
CASH FLOWS FROM FINANCING ACTIVITIES:    
Proceeds from issuance of common stock and warrants 0 7,127,141
Payments of stock issuance costs (80,224) (62,004)
Proceeds from exercise of warrants 3,305,387 0
Payments on obligations under capital lease (2,521) (3,870)
Net cash provided by financing activities 3,222,642 7,061,267
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (4,796,031) 692,751
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 10,310,044 2,369,438
CASH AND CASH EQUIVALENTS, END OF PERIOD 5,514,013 3,062,189
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:    
Capitalizable patent costs included in accounts payable 0 8,137
Capital lease obligation included in accounts payable 428 402
Stock issuance costs included in accounts payable 10,000 68,374
Prepaid consulting services paid with issuance of common stock (83,415) 95,911
Notes payable converted into common shares 0 184,300
Cash paid for interest expense $ 902,091 $ 872,087
v3.19.1
A. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
6 Months Ended
Mar. 31, 2019
Accounting Policies [Abstract]  
A. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

 

The accompanying condensed financial statements of CEL-SCI Corporation (the Company) are unaudited and certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to the rules and regulations of the Securities and Exchange Commission. While management of the Company believes that the disclosures presented are adequate to make the information presented not misleading, these interim condensed financial statements should be read in conjunction with the financial statements and notes included in the Company’s annual report on Form 10-K for the year ended September 30, 2018.

 

In the opinion of management, the accompanying unaudited condensed financial statements contain all accruals and adjustments (each of which is of a normal recurring nature) necessary for a fair presentation of the Company’s financial position as of March 31, 2019 and the results of its operations for the six and three months then ended. The condensed balance sheet as of September 30, 2018 is derived from the September 30, 2018 audited financial statements. Significant accounting policies have been consistently applied in the interim financial statements. The results of operations for the six and three months ended March 31, 2019 are not necessarily indicative of the results to be expected for the entire year.

 

The financial statements have been prepared assuming that the Company will continue as a going concern, but due to recurring losses from operations, which are expected for the foreseeable future, and future liquidity needs, there is substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Refer to discussion in Note B.

 

Summary of Significant Accounting Policies:

 

Research and Office Equipment and Leasehold Improvements – The leased manufacturing facility is recorded at total project costs incurred and is depreciated over the 20-year useful life of the building. Research and office equipment is recorded at cost and depreciated using the straight-line method over estimated useful lives of five to seven years. Leasehold improvements are depreciated over the shorter of the estimated useful life of the asset or the term of the lease. Repairs and maintenance which do not extend the life of the asset are expensed when incurred. The fixed assets are reviewed on a quarterly basis to determine if any of the assets are impaired.

 

Patents - Patent expenditures are capitalized and amortized using the straight-line method over the shorter of the expected useful life or the legal life of the patent (17 years). In the event changes in technology or other circumstances impair the value or life of the patent, appropriate adjustment in the asset value and period of amortization is made. An impairment loss is recognized when estimated future undiscounted cash flows expected to result from the use of the asset, and from its disposition, is less than the carrying value of the asset. The amount of the impairment loss would be the difference between the estimated fair value of the asset and its carrying value.

 

Research and Development Costs - Research and development costs are expensed as incurred. Management accrues Clinical Research Organization (“CRO”) expenses and clinical trial study expenses based on services performed and relies on the CROs to provide estimates of those costs applicable to the completion stage of a study. Estimated accrued CRO costs are subject to revisions as such studies progress to completion. The Company charges revisions to estimated expense in the period in which the facts that give rise to the revision become known.

 

Income Taxes - The Company uses the asset and liability method of accounting for income taxes. Under the asset and liability method, deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating and tax loss carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company records a valuation allowance to reduce the deferred tax assets to the amount that is more likely than not to be recognized.  A full valuation allowance was recorded against the deferred tax assets as of March 31, 2019 and September 30, 2018.

 

On December 22, 2017, the “Tax Cuts and Jobs Act” (the “Tax Act"), was signed into law by the President of the United States (U.S.). The Tax Act includes significant changes to corporate taxation, including reduction of the U.S. corporate tax rate from 35% to 21%, effective January 1, 2018, limitation of the tax deduction for interest expense to 30% of earnings (except for certain small businesses), limitation of the deduction for net operating losses to 80% of current year taxable income and elimination of net operating loss carrybacks. The Company has accounted for the income tax effects of the Act in applying FASB ASC 740 to the current reporting period. Because the Company records a valuation allowance for its entire deferred income tax asset, there was no impact to the amounts reported in the Company’s financial statements resulting from the Tax Act.

 

Derivative Instruments – The Company has entered into financing arrangements that consist of freestanding derivative instruments that contain embedded derivative features. The Company accounts for these arrangements in accordance with Accounting Standards Codification (ASC) 815, “Accounting for Derivative Instruments and Hedging Activities.” In accordance with accounting principles generally accepted in the United States (U.S. GAAP), derivative instruments and hybrid instruments are recognized as either assets or liabilities in the balance sheet and are measured at fair value with gains or losses recognized in earnings or other comprehensive income depending on the nature of the derivative or hybrid instruments. The Company determines the fair value of derivative instruments and hybrid instruments based on available market data using appropriate valuation models giving consideration to all of the rights and obligations of each instrument. The derivative liabilities are re-measured at fair value at the end of each interim period.

 

Deferred Rent– Certain of the Company’s operating leases provide for minimum annual payments that adjust over the life of the lease.  The aggregate minimum annual payments are expensed on a straight-line basis over the minimum lease term. The Company recognizes a deferred rent liability for rent escalations when the amount of straight-line rent exceeds the lease payments, and reduces the deferred rent liability when the lease payments exceed the straight-line rent expense.  For tenant improvement allowances and rent holidays, the Company records a deferred rent liability and amortizes the deferred rent over the lease term as a reduction to rent expense.

 

Leases – Leases are categorized as either operating or capital leases at inception. Operating lease costs are recognized on a straight-line basis over the term of the lease. An asset and a corresponding liability for the capital lease obligation are established for the cost of capital leases. The capital lease obligation is amortized over the life of the lease. For build-to-suit leases, the Company establishes an asset and liability for the estimated construction costs incurred to the extent that it is involved in the construction of structural improvements or takes construction risk prior to the commencement of the lease. Upon occupancy of facilities under build-to-suit leases, the Company assesses whether these arrangements qualify for sales recognition under the sale-leaseback accounting guidance. If a lease does not meet the criteria to qualify for a sale-leaseback transaction, the established asset and liability remain on the Company's balance sheet.

 

Stock-Based Compensation – Compensation cost for all stock-based awards is measured at fair value as of the grant date in accordance with the provisions of ASC 718 “Compensation – Stock Compensation.” The fair value of stock options is calculated using the Black-Scholes option pricing model. The Black-Scholes model requires various judgmental assumptions including volatility and expected option life. The stock-based compensation cost is recognized on the straight-line allocation method as expense over the requisite service or vesting period.

 

Equity instruments issued to non-employees are accounted for in accordance with ASC 505-50, “Equity-Based Payments to Non-Employees.” Accordingly, compensation is recognized when goods or services are received and is measured using the Black-Scholes valuation model. The Black-Scholes model requires various judgmental assumptions regarding the fair value of the equity instruments at the measurement date and the expected life of the options.

 

The Company has Incentive Stock Option Plans, Non-Qualified Stock Option Plans, a Stock Compensation Plan, Stock Bonus Plans and an Incentive Stock Bonus Plan. In some cases, these Plans are collectively referred to as the "Plans". All Plans have been approved by the stockholders.

 

The Company’s stock options are not transferable, and the actual value of the stock options that an employee may realize, if any, will depend on the excess of the market price on the date of exercise over the exercise price. The Company has based its assumption for stock price volatility on the variance of daily closing prices of the Company’s stock. The risk-free interest rate assumption was based on the U.S. Treasury rate at date of the grant with term equal to the expected life of the option. Forfeitures are accounted for when they occur. The expected term of options represents the period that options granted are expected to be outstanding and has been determined based on an analysis of historical exercise behavior. If any of the assumptions used in the Black-Scholes model change significantly, stock-based compensation expense for new awards may differ materially in the future from that recorded in the current period.

 

Vesting of restricted stock granted under the Incentive Stock Bonus Plan is subject to service, performance and market conditions and meets the classification of equity awards. These awards were measured at market value on the grant-dates for issuances where the attainment of performance criteria is likely and at fair value on the grant-dates, using a Monte Carlo simulation for issuances where the attainment of performance criteria is uncertain. The total compensation cost will be expensed over the estimated requisite service period.

 

New Accounting Pronouncements

 

In June 2018, the Financial Accounting Standards Board ("FASB") issued ASU 2018-07, Compensation—Stock Compensation (Topic 718), (“ASU 2018-7”), which expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. An entity should apply the requirements of Topic 718 to nonemployee awards except for specific guidance on inputs to an option pricing model and the attribution of cost. Under current GAAP, non-employee share-based payment awards are measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever can be more reliably measured. Under ASU 2018-07, non-employee share-based payments would be measured at the grant-date fair value of the equity instruments an entity is obligated to issue when the good has been delivered or the service has been rendered and any other conditions necessary to earn the right to benefit from the instruments have been satisfied. Under current GAAP, the measurement date for equity classified non-employee share-based payment awards is the earlier of the date at which a commitment for performance by the counterparty is reached or the date at which the counterparty’s performance is complete. Under ASU 2018-07, equity-classified nonemployee share-based payment awards are measured at the grant date. The definition of the term grant date is amended to generally state the date at which a grantor and a grantee reach a mutual understanding of the key terms and conditions of a share-based payment award. The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. Early adoption is permitted, but no earlier than an entity’s adoption date of Topic 606. An entity should only remeasure liability-classified awards that have not been settled by the date of adoption and equity classified awards for which a measurement date has not been established through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. Upon transition, the entity is required to measure these non-employee awards at fair value as of the adoption date. The entity must not remeasure awards that are completed. The Company is currently evaluating the impact the adoption of the standard will have on the Company’s financial position and results of operations.

 

In February 2016, the FASB issued ASU 2016-02, Leases, which will require most leases (except of leases with terms of less than one year) to be recognized on the balance sheet as an asset and a lease liability. Leases will be classified as an operating lease or a financing lease. Operating leases are expensed using the straight-line method whereas financing leases will be treated similarly to a capital lease under the current standard. The new standard will be effective for annual and interim periods, within those fiscal years, beginning after December 15, 2018, but early adoption is permitted. The new standard must be presented using the modified retrospective method beginning with the earliest comparative period presented.  As permitted by the guidance, the Company has an option to retain the original lease classification and historical accounting for initial direct costs for leases existing prior to the adoption date. Furthermore, the Company will not have to reassess contracts entered into prior to the adoption date for the existence of a lease. The Company also has an option not to restate prior periods for the impact of the adoption of the new standard and may instead recognize a cumulative-effect adjustment to beginning retained earnings as of October 1, 2019 for any prior period income statement effects identified. The Company will evaluate the effect that adoption of this new standard will have on the Company’s financial statements. The Company will evaluate the effect that adoption of this new standard on its financial statements and related disclosures.

 

The Company has considered all other recently issued accounting pronouncements and does not believe the adoption of such pronouncements will have a material impact on its financial statements.

 

v3.19.1
B. OPERATIONS AND FINANCING
6 Months Ended
Mar. 31, 2019
B. Operations And Financing  
B. OPERATIONS AND FINANCING

The Company has incurred significant costs since its inception for the acquisition of certain patented and unpatented proprietary technology and know-how relating to the human immunological defense system, patent applications, research and development, administrative costs, construction of laboratory facilities, and clinical trials.  The Company has funded such costs with proceeds from loans and the public and private sale of its common stock.  The Company will be required to raise additional capital or find additional long-term financing to continue with its research efforts.  The ability to raise capital may be dependent upon market conditions that are outside the control of the Company. The ability of the Company to complete the necessary clinical trials and obtain FDA approval for the sale of products to be developed on a commercial basis is uncertain. Ultimately, the Company must complete the development of its products, obtain the appropriate regulatory approvals and obtain sufficient revenues to support its cost structure. The Company is taking cost-cutting initiatives, as well as exploring other sources of funding, to finance operations over the next 12 months. The Company believes that there is a high likelihood that it will continue to receive funds from warrant conversions in a way similar to the way it has substantial funds for the past 12 months. However, there can be no assurance that the Company will be able to raise sufficient capital to support its operations.

 

The Company is currently in the final stages of its large multi-national Phase 3 clinical trial for head and neck cancer with its partners TEVA Pharmaceuticals and Orient Europharma. To finance the study beyond the next twelve months, the Company plans to raise additional capital in the form of corporate partnerships, debt issuances and/or equity financings. The Company believes that it will be able to obtain additional financing because it has done so consistently in the past and because Multikine is a product in the Phase 3 clinical trial stage. However, there can be no assurance that the Company will be successful in raising additional funds on a timely basis or that the funds will be available to the Company on acceptable terms or at all.  If the Company does not raise the necessary amounts of money, it may have to curtail its operations until it can raise the required funding.

 

The financial statements have been prepared assuming the Company will continue as a going concern, but due to the Company’s recurring losses from operations and future liquidity needs, there is substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Since the Company launched its Phase 3 clinical trial for Multikine, the Company has incurred expenses of approximately $53.5 million as of March 31, 2019 on direct costs for the Phase 3 clinical trial. The Company estimates it will incur additional expenses of approximately $6.3 million for the remainder of the Phase 3 clinical trial. It should be noted that this estimate is based only on the information currently available in the Company’s contracts with the Clinical Research Organizations responsible for managing the Phase 3 clinical trial and does not include other related costs, e.g., the manufacturing of the drug. This number may be affected by the rate of death accumulation in the study, foreign currency exchange rates, and many other factors, some of which cannot be foreseen today. It is therefore possible that the cost of the Phase 3 clinical trial will be higher than currently estimated.

 

Nine hundred twenty-eight (928) head and neck cancer patients have been enrolled and have completed treatment in the Phase 3 study. The study end point is a 10% increase in overall survival of patients between the two main comparator groups in favor of the group receiving the Multikine treatment regimen. The determination if the study end point has been met will occur when there are a total of 298 deaths in those two groups.

 

v3.19.1
C. STOCKHOLDERS EQUITY
6 Months Ended
Mar. 31, 2019
Equity [Abstract]  
C. STOCKHOLDERS' EQUITY

The changes in stockholders’ equity during the six months ended March 31, 2019 are as follows:

 

                Additional              
    Common     Stock     Paid-In     Accumulated        
     Shares     Amount     Capital     Deficit     Total  
                               
BALANCES AT OCTOBER 1, 2018     28,034,487     $ 280,346     $ 331,312,184     $ (331,591,614 )   $ 916  
Warrant exercises     298,682       2,987       646,766       -       649,753  
401(k) contributions paid in common stock     12,279       123       35,118       -       35,241  
                                         
Stock issued to nonemployees for service     62,784       628       201,752       -       202,380  
Shares returned for settlement of clinical research costs     (564,905 )     (5,649 )     5,649       -       -  
Equity based compensation - employees     -       -       573,660       -       573,660  
Net income     -       -       -       1,245,902       1,245,902  
                                         
BALANCES AT DECEMBER 31, 2018     27,843,327       278,435       332,775,129       (330,345,712 )     2,707,852  
                                         
Warrant exercises     1,523,933       15,239       2,640,395       -       2,655,634  
401(k) contributions paid in common stock     10,419       104       36,779       -       36,883  
Stock issued to nonemployees for service     77,449       774       224,855       -       225,629  
Equity based compensation - employees     (3,500 )     (35 )     530,865       -       530,830  
Shares issued for settlement of clinical research costs     500,000       5,000       1,285,000       -       1,290,000  
Stock issuance costs     -       -       (43,625 )     -       (43,625 )
Net loss     -       -       -       (6,447,681 )     (6,447,681 )
                                         
BALANCES AT MARCH 31, 2019     29,951,628     $ 299,517     $ 337,449,398     $ (336,793,393 )   $ 955,522  

 

The changes in stockholders’ equity during the six months ended March 31, 2018 are as follows:

 

                Additional              
    Common     Stock     Paid-In     Accumulated        
     Shares     Amount     Capital     Deficit     Total  
                               
BALANCES AT OCTOBER 1, 2017     11,903,133     $ 119,031     $ 296,298,401     $ (299,754,409 )   $ (3,336,977 )
                                         
Sale of common stock     1,289,478       12,895       2,437,105       -       2,450,000  
401(k) contributions paid in common stock     18,984       190       35,690       -       35,880  
Stock issued to nonemployees for service     13,705       137       25,270       -       25,407  
Equity based compensation - employees     -       -       1,448,098       -       1,448,098  
Net loss     -       -       -       (6,187,830 )     (6,187,830 )
                                         
BALANCES AT DECEMBER 31, 2017     13,258,051       132,581       300,975,618       (305,942,239 )     (4,834,040 )
                                         
Sale of common stock     2,501,145       25,011       4,652,130       -       4,667,141  
401(k) contributions paid in common stock     25,901       259       36,261       -       36,520  
Stock issued to nonemployees for service     124,082       1,241       227,254       -       228,495  
Equity based compensation - employees     -       -       279,817       -       279,817  
Conversion of notes payable and interest to common stock     55,373       554       108,746       -       109,300  
Shares issued for settlement of clinical research costs     660,000       6,600       1,240,800       -       1,247,400  
Stock issuance cost     -       -       (94,773 )     -       (94,773 )
Net loss     -       -       -       (4,708,135 )     (4,708,135 )
                                         
BALANCES AT MARCH 31, 2018     16,624,552     $ 166,246     $ 307,425,853     $ (310,650,374 )   $ (3,058,275 )

 

Stock options, stock bonuses and compensation granted by the Company as of March 31, 2019 are as follows:

 

Name of Plan   Total Shares Reserved Under Plans     Shares Reserved for Outstanding Options     Shares Issued    

Remaining Options/Shares

Under Plans

 
                         
Incentive Stock Options Plans     138,400       123,558       N/A       385  
Non-Qualified Stock Option Plans     3,387,200       3,010,476       N/A       335,619  
Stock Bonus Plans     783,760       N/A       322,928       460,799  
Stock Compensation Plan     134,000       N/A       115,590       18,410  
Incentive Stock Bonus Plan     640,000       N/A       620,500       16,000  

 

Stock options, stock bonuses and compensation granted by the Company as of September 30, 2018 are as follows:

 

Name of Plan   Total Shares Reserved Under Plans     Shares Reserved for Outstanding Options     Shares Issued     Remaining Options/Shares Under Plans  
                         
Incentive Stock Option Plans     138,400       123,558       N/A       385  
Non-Qualified Stock Option Plans     3,387,200       3,036,569       N/A       309,526  
Stock Bonus Plans     783,760       N/A       297,230       486,497  
Stock Compensation Plan     134,000       N/A       118,590       15,410  
Incentive Stock Bonus Plan     640,000       N/A       624,000       16,000  

 

Stock option activity:

  Six Months Ended March 31,
      2019     2018
Granted 500 10,300
Expired  2,400  24,379
Forfeited  24,193    1,393

 

  Three Months Ended March 31,
  2019 2018
Granted  -   -  
Expired   -   584 
Forfeited  24,193   6,856 

 

Employee stock based compensation expense includes the expense related to options issued or vested and restricted stock. Non-employee expense includes the expense related to options and stock issued to consultants expensed over the period of their service contracts. Stock based compensation expense is included in general and administrative expenses on the statements of operations.

 

Non-employee stock based compensation expense includes the value of shares and options issued under consulting arrangements. At March 31, 2019 and September 30, 2018, approximately $124,000 and $207,000, respectively, are included in prepaid expenses.

 

Warrants and Non-Employee Options

 

The following chart represents the warrants and non-employee options outstanding at March 31, 2019:

Warrant Issue Date  

Shares Issuable upon Exercise

of Warrants

    Exercise Price  

Expiration Date

 
Series N 8/18/2008     85,339     $ 3.00   2/18/2020  
Series V 5/28/2015     810,127     $ 19.75   5/28/2020    
Series UU 6/11/2018     187,562     $ 2.80   6/11/2020    
Series W 10/28/2015     688,930     $ 16.75   10/28/2020    
Series X 1/13/2016     120,000     $ 9.25   1/13/2021    
Series Y 2/15/2016     26,000     $ 12.00   2/15/2021    
Series ZZ 5/23/2016     20,000     $ 13.75   5/18/2021    
Series BB 8/26/2016     16,000     $ 13.75   8/22/2021    
Series Z 5/23/2016     264,000     $ 13.75   11/23/2021    
Series FF 12/8/2016     68,048     $ 3.91   12/1/2021    
Series CC 12/8/2016     680,480     $ 5.00   12/8/2021    
Series HH 2/23/2017     20,000     $ 3.13   2/16/2022    
Series AA 8/26/2016     200,000     $ 13.75   2/22/2022      
Series JJ 3/14/2017     30,000     $ 3.13   3/8/2022      
Series LL 4/30/2017     26,398     $ 3.59   4/30/2022      
Series MM 6/22/2017     893,491     $ 1.86   6/22/2022      
Series NN 7/24/2017     539,300     $ 2.52   7/24/2022      
Series OO 7/31/2017     60,000     $ 2.52   7/31/2022      
Series QQ 8/22/2017     3,500     $ 2.50   8/22/2022      
Series GG 2/23/2017     200,000     $ 3.00   8/23/2022      
Series II 3/14/2017     216,500     $ 3.00   9/14/2022      
Series RR 10/30/2017     555,370     $ 1.65   10/30/2022      
Series KK 5/3/2017     213,870     $ 3.04   11/3/2022      
Series SS 12/19/2017     794,740     $ 2.09   12/18/2022      
Series TT 2/5/2018     1,210,827     $ 2.24   2/5/2023      
Series PP 8/28/2017     112,500     $ 2.30   2/28/2023      
Series WW 7/2/2018     69,225     $ 1.63   6/28/2023      
Series VV 7/2/2018     2,515,000     $ 1.75   1/2/2024      
Consultants 7/1/16 - 7/28/17     28,000     $ 2.18-$11.50   6/30/2019- 7/27/2027      

 

* No current period changes to these warrants

 

1. Derivative Liabilities

 

The table below presents the fair value of the warrant liabilities at the balance sheet dates:

 

   

March 31,

2019

   

September 30,

2018

 
Series S warrants   $ -     $ 33  
Series V warrants     275,584       770,436  
Series W warrants     383,053       999,081  
Series Z warrants     372,936       487,767  
Series ZZ warrants     21,577       34,215  
Series AA warrants     287,206       380,474  
Series BB warrants     20,720       28,456  
Series CC warrants     1,440,026       1,779,724  
Series DD warrants     -       1,249,287  
Series EE warrants     -       1,249,287  
Series FF warrants     154,318       188,921  
Series GG warrants     500,478       607,228  
Series HH warrants     48,174       58,816  
Series II warrants     544,792       660,135  
Series JJ warrants     72,716       88,642  
Series KK warrants     543,463       656,930  
Series LL warrants     62,886       77,632  
Total warrant liabilities   $ 4,727,929     $ 9,317,064  
                 

 

The table below presents the gains/(losses) on the warrant liabilities for the six months ended March 31:

 

     2019      2018  
Series S warrants   $ 33     $ 11,927  
Series V warrants     494,852       (3,547 )
Series W warrants     616,028       (24,131 )
Series Z warrants     114,831       8,095  
Series ZZ warrants     12,638       189  
Series AA warrants     93,268       8,676  
Series BB warrants     7,736       293  
Series CC warrants     339,698       41,919  
Series DD warrants     1,249,287       5,456  
Series EE warrants     1,249,287       5,456  
Series FF warrants     34,603       7,301  
Series GG warrants     106,750       37,419  
Series HH warrants     10,642       2,683  
Series II warrants     115,343       50,608  
Series JJ warrants     15,926       4,010  
Series KK warrants     113,467       36,924  
Series LL warrants     14,746       3,307  
Net gain on warrant liabilities   $ 4,589,135     $ 196,585  

 

The table below presents the gains/(losses) on the warrant liabilities for the three months ended March 31:

 

     2019      2018  
Series S warrants   $ -     $ (1,141 )
Series V warrants     (61,480 )     94,766  
Series W warrants     (10,822 )     105,336  
Series Z warrants     (89,290 )     63,630  
Series ZZ warrants     (1,685 )     3,532  
Series AA warrants     (63,951 )     56,036  
Series BB warrants     (4,374 )     2,924  
Series CC warrants     (325,908 )     238,740  
Series DD warrants     -       (27 )
Series EE warrants     -       (27 )
Series FF warrants     (34,459 )     25,348  
Series GG warrants     (106,032 )     152,551  
Series HH warrants     (10,309 )     8,345  
Series II warrants     (115,246 )     229,414  
Series JJ warrants     (15,536 )     12,552  
Series KK warrants     (114,628 )     151,951  
Series LL warrants     (13,451 )     10,885  
Net (loss)/gain on warrant liabilities   $ (967,171 )   $ 1,154,815  

 

The Company reviews all outstanding warrants in accordance with the requirements of ASC 815. This topic provides that an entity should use a two-step approach to evaluate whether an equity-linked financial instrument (or embedded feature) is indexed to its own stock, including evaluating the instrument’s contingent exercise and settlement provisions. The warrant agreements provide for adjustments to the exercise price for certain dilutive events. Under the provisions of ASC 815, the warrants are not considered indexed to the Company’s stock because future equity offerings or sales of the Company’s stock are not an input to the fair value of a “fixed-for-fixed” option on equity shares, and equity classification is therefore precluded.

 

In accordance with ASC 815, derivative liabilities must be measured at fair value upon issuance and re-valued at the end of each reporting period through expiration. Any change in fair value between the respective reporting dates is recognized as a gain or loss.

 

Expiration of Derivative Liabilities

 

On December 10, 2018, 1,360,960 Series DD and 1,360,960 Series EE warrants, with an exercise price of $4.50, expired.

 

On October 11, 2018, 327,729 Series S warrants, with an exercise price of $31.25, expired.

 

No derivative liabilities expired during the three months ended March 31, 2019.

 

   2.             Securities Purchase Agreement

 

The Company has entered into several Securities Purchase Agreements (SPAs) with Ergomed plc, one of its Clinical Research Organizations responsible for managing the Phase 3 clinical trial, to facilitate a partial payment of amounts due Ergomed. Under the Agreements, the Company issued Ergomed shares of common stock as a forbearance fee in exchange for Ergomed’s agreement to provisionally forbear collection of the payables in an amount equal to the net proceeds from the resales of the shares issued to Ergomed. Upon issuance, the Company expenses the full value of the shares as Other Non-Operating Gain/Loss and subsequently offsets the expense as amounts are realized through the resale by Ergomed and reduces accounts payable to Ergomed. Any amounts received from the resell of the shares in excess of the payables will be applied towards the satisfaction of any future amounts owed.

 

On December 31, 2018, the prior SPA expired. Pursuant to that arrangement, Ergomed returned all 564,905 unsold shares for cancellation. The par value of those shares was reclassed from Common Stock to Additional Paid-In Capital on the balance sheet.

 

On January 9, 2019, the Company entered into a new SPA under which it issued Ergomed 500,000 restricted shares of the Company’s common stock valued at approximately $1.3 million. This current SPA expires on December 31, 2019.

 

During the six months ended March 31, 2019 and 2018, respectively, the Company decreased Accounts Payable by approximately $1.7 million and $1.2 million through the resale of 545,324 and 684,541 shares.

 

The following table summarizes the Other Non-Operating Gains (Loss) for the six and three months ended March 31, 2019 and 2018 relating to these agreements:

 

    Six Months Ended     Three Months Ended  
    3/31/2019     3/31/2018     3/31/2019     3/31/2018  
Amount realized through the resale of shares   $ 1,711,353     $ 1,225,291     $ 559,177     $ 478,590  
Fair value of shares upon issuance     1,290,000       1,247,400       1,290,000       1,247,400  
Other non-operating gain (loss)   $ 421,353     $ (22,109 )   $ (730,823 )   $ (768,810 )

 

As of March 31, 2019, Ergomed holds 308,671 shares and may resell the shares or return the shares to the Company for cancellation until December 31, 2019.

 

3. Incentive Stock Bonus Plan

 

During the six and three months ended March 31, 2019, 3,500 shares of common stock issued from the 2014 Incentive Stock Bonus Plan were forfeited.

 

v3.19.1
D. FAIR VALUE MEASUREMENTS
6 Months Ended
Mar. 31, 2019
Fair Value Disclosures [Abstract]  
D. FAIR VALUE MEASUREMENTS

In accordance with ASC 820-10, “Fair Value Measurements,” the Company determines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company generally applies the income approach to determine fair value. This method uses valuation techniques to convert future amounts to a single present amount. The measurement is based on the value indicated by current market expectations with respect to those future amounts.

  

ASC 820-10 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to active markets for identical assets and liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The Company classifies fair value balances based on the observability of those inputs. The three levels of the fair value hierarchy are as follows:

 

●  Level 1 – Observable inputs such as quoted prices in active markets for identical assets or liabilities

 

●  Level 2 – Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active and amounts derived from valuation models where all significant inputs are observable in active markets

 

●  Level 3 – Unobservable inputs that reflect management’s assumptions

 

For disclosure purposes, assets and liabilities are classified in their entirety in the fair value hierarchy level based on the lowest level of input that is significant to the overall fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the placement within the fair value hierarchy levels.

 

The table below sets forth the assets and liabilities measured at fair value on a recurring basis, by input level, in the condensed balance sheet at March 31, 2019:

 

 

Quoted Prices in Active Markets for Identical Assets or Liabilities

 (Level 1)

Significant Other Observable Inputs

 (Level 2)

Significant Unobservable Inputs

 (Level 3)

Total
         
Derivative instruments  $ -  $ -   $4,727,929  $4,727,929

 

The table below sets forth the assets and liabilities measured at fair value on a recurring basis, by input level, in the condensed balance sheet at September 30, 2018:

 

 

Quoted Prices in Active Markets for Identical Assets or Liabilities

(Level 1)

Significant Other Observable Inputs

(Level 2)

Significant Unobservable Inputs

(Level 3)

Total
         
Derivative instruments  $33   $ -   $9,317,031   $9,317,064 

  

The following sets forth the reconciliation of beginning and ending balances related to fair value measurements using significant unobservable inputs (Level 3) for the three months ended March 31, 2019 and the year ended September 30, 2018:

 

    Six Months Ended     Year Ended  
   

March 31,

2019

   

September 30,

2018

 
             
Beginning balance   $ 9,317,031     $ 2,020,629  
Issuances     -       -  
Exercises     -       (595,780 )
Realized and unrealized (gains) and losses     (4,589,102 )     7,892,182  
Ending balance   $ 4,727,929     $ 9,317,031  
                 

The fair values of the Company’s derivative instruments disclosed above under Level 3 are primarily derived from valuation models where significant inputs such as historical price and volatility of the Company’s stock, as well as U.S. Treasury Bill rates, are observable in active markets.

 

v3.19.1
E. COMMITMENTS AND CONTINGENCIES
6 Months Ended
Mar. 31, 2019
Commitments and Contingencies Disclosure [Abstract]  
E. COMMITMENTS AND CONTINGENCIES

Clinical Research Agreements 

 

Under co-development and revenue sharing agreements with Ergomed, Ergomed agreed to contribute up to $12 million towards the Company’s Phase 3 Clinical Trial in the form of discounted clinical services in exchange for a single digit percentage of milestone and royalty payments, up to a specific maximum amount. The Company accounted for the co-development and revenue sharing agreements in accordance with ASC 808 “Collaborative Arrangements”. The Company determined the payments to Ergomed are within the scope of ASC 730 “Research and Development.” Therefore, the Company records the discount on the clinical services as a credit to research and development expense on its Statements of Operations. Since the inception of the agreement with Ergomed, the Company has incurred research and development expenses of approximately $29.6million for Ergomed’s services. This amount is net of Ergomed’s discount of approximately $9.9 million. During the six months ended March 31, 2019 and 2018, the Company recorded, net of Ergomed’s discount, approximately $1.5 million and $1.7 million, respectively, as research and development expense related to Ergomed’s services. During the three months ended March 31, 2019 and 2018, the Company recorded, net of Ergomed’s discount, approximately $0.7 million and $0.8 million, respectively, as research and development expense related to Ergomed’s services.

 

Lease Agreements

 

The Company leases a manufacturing facility near Baltimore, Maryland (the San Tomas lease). The building was remodeled in accordance with the Company’s specifications so that it can be used by the Company to manufacture Multikine for the Company’s Phase 3 clinical trial and sales of the drug if approved by the FDA. The lease is for a term of twenty years and requires annual base rent to escalate each year at 3%. The Company is required to pay all real estate and personal property taxes, insurance premiums, maintenance expenses, repair costs and utilities. The lease allows the Company, at its election, to extend the lease for two ten-year periods or to purchase the building at the end of the 20-year lease. The Company contributed approximately $9.3 million towards the tenant-directed improvements, of which $3.2 million is being refunded during years six through twenty through reduced rental payments. The landlord paid approximately $11.9 million towards the purchase of the building, land and the tenant-directed improvements. The Company placed the building in service in October 2008.

 

The Company was deemed to be the owner of the building for accounting purpose under the build-to-suit guidance in ASC 840-40-55. In addition to tenant improvements the Company incurred, the Company also recorded an asset for tenant-directed improvements and for the costs paid by the lessor to purchase the building and to perform improvements, as well as a corresponding liability for the landlord costs. Upon completion of the improvements, the Company did not meet the “sale-leaseback” criteria under ASC 840-40-25, Accounting for Lease, Sale-Leaseback Transactions, and therefore, treated the lease as a financing obligation. Thus, the asset and corresponding liability were not de-recognized. As of March 31, 2019 and September 30, 2018, the leased building asset has a net book value of approximately $15.8 and $16.1 million, respectively, and the landlord liability has a balance of approximately $13.4 million as of both balance sheet dates. The leased building is being depreciated using a straight-line method over the 20-year lease term to a residual value. The landlord liability is being amortized over the 20 years using the effective interest method. Lease payments allocated to the landlord liability are accounted for as debt service payments on that liability using the finance method of accounting per ASC 840-40-55.

 

The Company was required to deposit the equivalent of one year of base rent in accordance with the lease. When the Company meets the minimum cash balance required by the lease, the deposit will be returned to the Company. The approximate $1.7 million deposit is included in non-current assets at March 31, 2019 and September 30, 2018.

 

Approximate future minimum lease payments under the San Tomas lease as of March 31, 2019 are as follows:

 

 Six months ending September 30, 2019      $ 907,000  
 Year ending September 30,        
 2020     1,872,000  
 2021     1,937,000  
 2022     2,004,000  
 2023     2,073,000  
 2024     2,145,000  
 Thereafter     9,540,000  
 Total future minimum lease obligation     20,478,000  
 Less imputed interest on financing obligation     (7,034,000 )
 Net present value of lease financing obligation   $ 13,444,000  

 

The Company subleases a portion of its rental space on a month-to-month term lease, which requires a 30-day notice for termination. The sublease rental income for each of the six months ended March 31, 2019 and 2018 was approximately $36,000. The sublease rental income for each of the three months ended March 31, 2019 and 2018 was approximately $18,000.

 

The Company leases its research and development laboratory under a 60-month lease which expires February 28, 2022. The operating lease includes escalating rental payments. The Company is recognizing the related rent expense on a straight-line basis over the full 60-month term of the lease at the rate of approximately $13,000 per month. As of March 31, 2019 and September 30, 2018, the Company has recorded a deferred rent liability of approximately $14,000 and $12,000, respectively.

 

The Company leases its office headquarters under a 60-month lease which expires June 30, 2020. The operating lease includes escalating rental payments. The Company is recognizing the related rent expense on a straight-line basis over the full 60-month term of the lease at the rate approximately $8,000 per month. As of March 31, 2019 and September 30, 2018, the Company has recorded a deferred rent liability of approximately $11,000 and $14,000, respectively.

 

As of March 31, 2019, material contractual obligations, excluding the San Tomas lease, consisting of non-cancelable operating lease payments are as follows:

 

Six months ending September 30, 2019   $ 130,000  
Year ending September 30,        
2020     238,000  
2021     163,000  
2022     69,000  
Total   $ 600,000  

 

The Company leases office equipment under a capital lease arrangement. The term of the capital lease is 60 months and expires on October 31, 2021. The monthly lease payment is $505. The lease bears interest at an annual interest rate of 6.25%.

 

v3.19.1
F. PATENTS
6 Months Ended
Mar. 31, 2019
Intangible Assets, Net (Excluding Goodwill) [Abstract]  
F. PATENTS

During the six months ended March 31, 2019 and 2018, no patent impairment charges were recorded. For the six and three months ended March 31, 2019, amortization of patent costs totaled approximately $23,000 and $11,000, respectively. For the six and three months ended March 31, 2018, amortization of patent costs totaled approximately $19,000 and $9,000, respectively. Approximate estimated future amortization expense is as follows:

 

Six months ending September 30, 2019   $ 20,000  
Year ending September 30,        
2020     39,000  
2021     36,000  
2022     31,000  
2023     21,000  
2024     18,000  
Thereafter     78,000  
Total   $ 243,000  

 

v3.19.1
G. LOSS PER COMMON SHARE
6 Months Ended
Mar. 31, 2019
Net loss per common share  
G. LOSS PER COMMON SHARE

The following tables provide the details of the basic and diluted loss per-share computations:

 

    Six months ended March 31,     Three months ended March 31,  
    2019     2018     2019     2018  
Loss per share - basic                        
Net loss available to common shareholders - basic   $ (5,201,779 )   $ (10,895,965 )   $ (6,447,681 )   $ (4,708,135 )
Weighted average shares outstanding - basic     28,543,417       13,403,878       29,113,910       15,210,296  
Basic loss per common share   $ (0.18 )   $ (0.81 )   $ (0.22 )   $ ( 0.31 )
                                 
Loss per share - diluted                                
Net loss available to common shareholders - basic   $ (5,201,779 )   $ (10,895,965 )   $ (6,447,681 )   $ (4,708,135 )
Gain on derivatives (1)     (335,560 )     -       -       -  
Net loss available to common shareholders - diluted   $ (5,537,339 )   $ (10,895,965 )   $ (6,447,681 )   $ (4,708,135 )
                                 
Weighted average shares outstanding - basic     28,543,417       13,403,878       29,113,910       15,210,296  
Incremental shares underlying dilutive "in the money" warrants (1)     5,401       -       -       -  
Weighted average shares outstanding - diluted     28,548,818       13,403,878       29,113,910       15,210,296  
Diluted loss per common share   $ (0.19 )   $ (0.81 )   $ (0.22 )   $ (0.31 )
                                 

 

(1) Includes series GG, II and KK for the six months ended March 31, 2019.

 

The gain on derivatives priced lower than the average market price during the period is excluded from the numerator and the related shares are excluded from the denominator in calculating diluted loss per share.

 

In accordance with the contingently issuable shares guidance of FASB ASC Topic 260, Earnings Per Share, the calculation of diluted net earnings (loss) per share excludes the following securities because their inclusion would have been anti-dilutive as of March 31:

 

  2019 2018
     
Options and Warrants 10,576,881  12,381,730
Unvested Restricted Stock    308,500    312,000
Convertible debt    -      1,077,982
Total 10,885,381  13,771,712

 

v3.19.1
H. SUBSEQUENT EVENTS
6 Months Ended
Mar. 31, 2019
Subsequent Events [Abstract]  
H. SUBSEQUENT EVENTS

Between April 1, 2019 and May 13, 2019, the Company received approximately $7.6 million through the exercise of options and warrants to purchase shares of the Company’s common stock.

 

On May 7, 2019, the Company received security purchase agreements for the purchase of 30,612 restricted shares of the Company’s common stock at the closing price on May 6, 2019 of $6.86 in the principal amount of approximately $210,000 from five officers and directors of the Company.

 

v3.19.1
A. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (POLICIES)
6 Months Ended
Mar. 31, 2019
Accounting Policies [Abstract]  
Basis of Presentation

The accompanying condensed financial statements of CEL-SCI Corporation (the Company) are unaudited and certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to the rules and regulations of the Securities and Exchange Commission. While management of the Company believes that the disclosures presented are adequate to make the information presented not misleading, these interim condensed financial statements should be read in conjunction with the financial statements and notes included in the Company’s annual report on Form 10-K for the year ended September 30, 2018.

 

In the opinion of management, the accompanying unaudited condensed financial statements contain all accruals and adjustments (each of which is of a normal recurring nature) necessary for a fair presentation of the Company’s financial position as of March 31, 2019 and the results of its operations for the six and three months then ended. The condensed balance sheet as of September 30, 2018 is derived from the September 30, 2018 audited financial statements. Significant accounting policies have been consistently applied in the interim financial statements. The results of operations for the six and three months ended March 31, 2019 are not necessarily indicative of the results to be expected for the entire year.

 

The financial statements have been prepared assuming that the Company will continue as a going concern, but due to recurring losses from operations, which are expected for the foreseeable future, and future liquidity needs, there is substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Refer to discussion in Note B.

Research and Office Equipment and Leasehold Improvements

Research and Office Equipment and Leasehold Improvements – The leased manufacturing facility is recorded at total project costs incurred and is depreciated over the 20-year useful life of the building. Research and office equipment is recorded at cost and depreciated using the straight-line method over estimated useful lives of five to seven years. Leasehold improvements are depreciated over the shorter of the estimated useful life of the asset or the term of the lease. Repairs and maintenance which do not extend the life of the asset are expensed when incurred. The fixed assets are reviewed on a quarterly basis to determine if any of the assets are impaired.

Patents

Patents - Patent expenditures are capitalized and amortized using the straight-line method over the shorter of the expected useful life or the legal life of the patent (17 years). In the event changes in technology or other circumstances impair the value or life of the patent, appropriate adjustment in the asset value and period of amortization is made. An impairment loss is recognized when estimated future undiscounted cash flows expected to result from the use of the asset, and from its disposition, is less than the carrying value of the asset. The amount of the impairment loss would be the difference between the estimated fair value of the asset and its carrying value.

Research and Development Costs

Research and Development Costs - Research and development costs are expensed as incurred. Management accrues Clinical Research Organization (“CRO”) expenses and clinical trial study expenses based on services performed and relies on the CROs to provide estimates of those costs applicable to the completion stage of a study. Estimated accrued CRO costs are subject to revisions as such studies progress to completion. The Company charges revisions to estimated expense in the period in which the facts that give rise to the revision become known.

Income Taxes

Income Taxes - The Company uses the asset and liability method of accounting for income taxes. Under the asset and liability method, deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating and tax loss carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company records a valuation allowance to reduce the deferred tax assets to the amount that is more likely than not to be recognized.  A full valuation allowance was recorded against the deferred tax assets as of March 31, 2019 and September 30, 2018.

 

On December 22, 2017, the “Tax Cuts and Jobs Act” (the “Tax Act"), was signed into law by the President of the United States (U.S.). The Tax Act includes significant changes to corporate taxation, including reduction of the U.S. corporate tax rate from 35% to 21%, effective January 1, 2018, limitation of the tax deduction for interest expense to 30% of earnings (except for certain small businesses), limitation of the deduction for net operating losses to 80% of current year taxable income and elimination of net operating loss carrybacks. The Company has accounted for the income tax effects of the Act in applying FASB ASC 740 to the current reporting period. Because the Company records a valuation allowance for its entire deferred income tax asset, there was no impact to the amounts reported in the Company’s financial statements resulting from the Tax Act.

Derivative Instruments

Derivative Instruments – The Company has entered into financing arrangements that consist of freestanding derivative instruments that contain embedded derivative features. The Company accounts for these arrangements in accordance with Accounting Standards Codification (ASC) 815, “Accounting for Derivative Instruments and Hedging Activities.” In accordance with accounting principles generally accepted in the United States (U.S. GAAP), derivative instruments and hybrid instruments are recognized as either assets or liabilities in the balance sheet and are measured at fair value with gains or losses recognized in earnings or other comprehensive income depending on the nature of the derivative or hybrid instruments. The Company determines the fair value of derivative instruments and hybrid instruments based on available market data using appropriate valuation models giving consideration to all of the rights and obligations of each instrument. The derivative liabilities are re-measured at fair value at the end of each interim period.

Deferred Rent

Deferred Rent– Certain of the Company’s operating leases provide for minimum annual payments that adjust over the life of the lease.  The aggregate minimum annual payments are expensed on a straight-line basis over the minimum lease term. The Company recognizes a deferred rent liability for rent escalations when the amount of straight-line rent exceeds the lease payments, and reduces the deferred rent liability when the lease payments exceed the straight-line rent expense.  For tenant improvement allowances and rent holidays, the Company records a deferred rent liability and amortizes the deferred rent over the lease term as a reduction to rent expense.

Leases

Leases – Leases are categorized as either operating or capital leases at inception. Operating lease costs are recognized on a straight-line basis over the term of the lease. An asset and a corresponding liability for the capital lease obligation are established for the cost of capital leases. The capital lease obligation is amortized over the life of the lease. For build-to-suit leases, the Company establishes an asset and liability for the estimated construction costs incurred to the extent that it is involved in the construction of structural improvements or takes construction risk prior to the commencement of the lease. Upon occupancy of facilities under build-to-suit leases, the Company assesses whether these arrangements qualify for sales recognition under the sale-leaseback accounting guidance. If a lease does not meet the criteria to qualify for a sale-leaseback transaction, the established asset and liability remain on the Company's balance sheet.

Stock-Based Compensation

Stock-Based Compensation – Compensation cost for all stock-based awards is measured at fair value as of the grant date in accordance with the provisions of ASC 718 “Compensation – Stock Compensation.” The fair value of stock options is calculated using the Black-Scholes option pricing model. The Black-Scholes model requires various judgmental assumptions including volatility and expected option life. The stock-based compensation cost is recognized on the straight-line allocation method as expense over the requisite service or vesting period.

 

Equity instruments issued to non-employees are accounted for in accordance with ASC 505-50, “Equity-Based Payments to Non-Employees.” Accordingly, compensation is recognized when goods or services are received and is measured using the Black-Scholes valuation model. The Black-Scholes model requires various judgmental assumptions regarding the fair value of the equity instruments at the measurement date and the expected life of the options.

 

The Company has Incentive Stock Option Plans, Non-Qualified Stock Option Plans, a Stock Compensation Plan, Stock Bonus Plans and an Incentive Stock Bonus Plan. In some cases, these Plans are collectively referred to as the "Plans". All Plans have been approved by the stockholders.

 

The Company’s stock options are not transferable, and the actual value of the stock options that an employee may realize, if any, will depend on the excess of the market price on the date of exercise over the exercise price. The Company has based its assumption for stock price volatility on the variance of daily closing prices of the Company’s stock. The risk-free interest rate assumption was based on the U.S. Treasury rate at date of the grant with term equal to the expected life of the option. Forfeitures are accounted for when they occur. The expected term of options represents the period that options granted are expected to be outstanding and has been determined based on an analysis of historical exercise behavior. If any of the assumptions used in the Black-Scholes model change significantly, stock-based compensation expense for new awards may differ materially in the future from that recorded in the current period.

 

Vesting of restricted stock granted under the Incentive Stock Bonus Plan is subject to service, performance and market conditions and meets the classification of equity awards. These awards were measured at market value on the grant-dates for issuances where the attainment of performance criteria is likely and at fair value on the grant-dates, using a Monte Carlo simulation for issuances where the attainment of performance criteria is uncertain. The total compensation cost will be expensed over the estimated requisite service period.

 

New Accounting Pronouncements

In June 2018, the Financial Accounting Standards Board ("FASB") issued ASU 2018-07, Compensation—Stock Compensation (Topic 718), (“ASU 2018-7”), which expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. An entity should apply the requirements of Topic 718 to nonemployee awards except for specific guidance on inputs to an option pricing model and the attribution of cost. Under current GAAP, non-employee share-based payment awards are measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever can be more reliably measured. Under ASU 2018-07, non-employee share-based payments would be measured at the grant-date fair value of the equity instruments an entity is obligated to issue when the good has been delivered or the service has been rendered and any other conditions necessary to earn the right to benefit from the instruments have been satisfied. Under current GAAP, the measurement date for equity classified non-employee share-based payment awards is the earlier of the date at which a commitment for performance by the counterparty is reached or the date at which the counterparty’s performance is complete. Under ASU 2018-07, equity-classified nonemployee share-based payment awards are measured at the grant date. The definition of the term grant date is amended to generally state the date at which a grantor and a grantee reach a mutual understanding of the key terms and conditions of a share-based payment award. The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. Early adoption is permitted, but no earlier than an entity’s adoption date of Topic 606. An entity should only remeasure liability-classified awards that have not been settled by the date of adoption and equity classified awards for which a measurement date has not been established through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. Upon transition, the entity is required to measure these non-employee awards at fair value as of the adoption date. The entity must not remeasure awards that are completed. The Company is currently evaluating the impact the adoption of the standard will have on the Company’s financial position and results of operations.

 

In February 2016, the FASB issued ASU 2016-02, Leases, which will require most leases (except of leases with terms of less than one year) to be recognized on the balance sheet as an asset and a lease liability. Leases will be classified as an operating lease or a financing lease. Operating leases are expensed using the straight-line method whereas financing leases will be treated similarly to a capital lease under the current standard. The new standard will be effective for annual and interim periods, within those fiscal years, beginning after December 15, 2018, but early adoption is permitted. The new standard must be presented using the modified retrospective method beginning with the earliest comparative period presented.  As permitted by the guidance, the Company has an option to retain the original lease classification and historical accounting for initial direct costs for leases existing prior to the adoption date. Furthermore, the Company will not have to reassess contracts entered into prior to the adoption date for the existence of a lease. The Company also has an option not to restate prior periods for the impact of the adoption of the new standard and may instead recognize a cumulative-effect adjustment to beginning retained earnings as of October 1, 2019 for any prior period income statement effects identified. The Company will evaluate the effect that adoption of this new standard will have on the Company’s financial statements. The Company will evaluate the effect that adoption of this new standard on its financial statements and related disclosures.

 

The Company has considered all other recently issued accounting pronouncements and does not believe the adoption of such pronouncements will have a material impact on its financial statements.

v3.19.1
C. STOCKHOLDERS EQUITY (Tables)
6 Months Ended
Mar. 31, 2019
Equity [Abstract]  
Changes in stockholders' equity

 

                Additional              
    Common     Stock     Paid-In     Accumulated        
     Shares     Amount     Capital     Deficit     Total  
                               
BALANCES AT OCTOBER 1, 2018     28,034,487     $ 280,346     $ 331,312,184     $ (331,591,614 )   $ 916  
Warrant exercises     298,682       2,987       646,766       -       649,753  
401(k) contributions paid in common stock     12,279       123       35,118       -       35,241  
                                         
Stock issued to nonemployees for service     62,784       628       201,752       -       202,380  
Shares returned for settlement of clinical research costs     (564,905 )     (5,649 )     5,649       -       -  
Equity based compensation - employees     -       -       573,660       -       573,660  
Net income     -       -       -       1,245,902       1,245,902  
                                         
BALANCES AT DECEMBER 31, 2018     27,843,327       278,435       332,775,129       (330,345,712 )     2,707,852  
                                         
Warrant exercises     1,523,933       15,239       2,640,395       -       2,655,634  
401(k) contributions paid in common stock     10,419       104       36,779       -       36,883  
Stock issued to nonemployees for service     77,449       774       224,855       -       225,629  
Equity based compensation - employees     (3,500 )     (35 )     530,865       -       530,830  
Shares issued for settlement of clinical research costs     500,000       5,000       1,285,000       -       1,290,000  
Stock issuance costs     -       -       (43,625 )     -       (43,625 )
Net loss     -       -       -       (6,447,681 )     (6,447,681 )
                                         
BALANCES AT MARCH 31, 2019     29,951,628     $ 299,517     $ 337,449,398     $ (336,793,393 )   $ 955,522  

 

The changes in stockholders’ equity during the six months ended March 31, 2018 are as follows:

 

                Additional              
    Common     Stock     Paid-In     Accumulated        
     Shares     Amount     Capital     Deficit     Total  
                               
BALANCES AT OCTOBER 1, 2017     11,903,133     $ 119,031     $ 296,298,401     $ (299,754,409 )   $ (3,336,977 )
                                         
Sale of common stock     1,289,478       12,895       2,437,105       -       2,450,000  
401(k) contributions paid in common stock     18,984       190       35,690       -       35,880  
Stock issued to nonemployees for service     13,705       137       25,270       -       25,407  
Equity based compensation - employees     -       -       1,448,098       -       1,448,098  
Net loss     -       -       -       (6,187,830 )     (6,187,830 )
                                         
BALANCES AT DECEMBER 31, 2017     13,258,051       132,581       300,975,618       (305,942,239 )     (4,834,040 )
                                         
Sale of common stock     2,501,145       25,011       4,652,130       -       4,667,141  
401(k) contributions paid in common stock     25,901       259       36,261       -       36,520  
Stock issued to nonemployees for service     124,082       1,241       227,254       -       228,495  
Equity based compensation - employees     -       -       279,817       -       279,817  
Conversion of notes payable and interest to common stock     55,373       554       108,746       -       109,300  
Shares issued for settlement of clinical research costs     660,000       6,600       1,240,800       -       1,247,400  
Stock issuance cost     -       -       (94,773 )     -       (94,773 )
Net loss     -       -       -       (4,708,135 )     (4,708,135 )
                                         
BALANCES AT MARCH 31, 2018     16,624,552     $ 166,246     $ 307,425,853     $ (310,650,374 )   $ (3,058,275 )

 

Stock options, stock bonuses and compensation granted by the Company

Stock options, stock bonuses and compensation granted by the Company as of March 31, 2019 are as follows:

 

Name of Plan   Total Shares Reserved Under Plans     Shares Reserved for Outstanding Options     Shares Issued    

Remaining Options/Shares

Under Plans

 
                         
Incentive Stock Options Plans     138,400       123,558       N/A       385  
Non-Qualified Stock Option Plans     3,387,200       3,010,476       N/A       335,619  
Stock Bonus Plans     783,760       N/A       322,928       460,799  
Stock Compensation Plan     134,000       N/A       115,590       18,410  
Incentive Stock Bonus Plan     640,000       N/A       620,500       16,000  

 

Stock options, stock bonuses and compensation granted by the Company as of September 30, 2018 are as follows:

 

Name of Plan   Total Shares Reserved Under Plans     Shares Reserved for Outstanding Options     Shares Issued     Remaining Options/Shares Under Plans  
                         
Incentive Stock Option Plans     138,400       123,558       N/A       385  
Non-Qualified Stock Option Plans     3,387,200       3,036,569       N/A       309,526  
Stock Bonus Plans     783,760       N/A       297,230       486,497  
Stock Compensation Plan     134,000       N/A       118,590       15,410  
Incentive Stock Bonus Plan     640,000       N/A       624,000       16,000  

 

Stock option activity
  Six Months Ended March 31,
      2019     2018
Granted 500 10,300
Expired  2,400  24,379
Forfeited  24,193    1,393

 

  Three Months Ended March 31,
  2019 2018
Granted  -   -  
Expired   -   584 
Forfeited  24,193   6,856 

 

Derivative liabilities, warrants and other options
Warrant Issue Date  

Shares Issuable upon Exercise

of Warrants

    Exercise Price  

Expiration Date

 
Series N 8/18/2008     85,339     $ 3.00   2/18/2020  
Series V 5/28/2015     810,127     $ 19.75   5/28/2020    
Series UU 6/11/2018     187,562     $ 2.80   6/11/2020    
Series W 10/28/2015     688,930     $ 16.75   10/28/2020    
Series X 1/13/2016     120,000     $ 9.25   1/13/2021    
Series Y 2/15/2016     26,000     $ 12.00   2/15/2021    
Series ZZ 5/23/2016     20,000     $ 13.75   5/18/2021    
Series BB 8/26/2016     16,000     $ 13.75   8/22/2021    
Series Z 5/23/2016     264,000     $ 13.75   11/23/2021    
Series FF 12/8/2016     68,048     $ 3.91   12/1/2021    
Series CC 12/8/2016     680,480     $ 5.00   12/8/2021    
Series HH 2/23/2017     20,000     $ 3.13   2/16/2022    
Series AA 8/26/2016     200,000     $ 13.75   2/22/2022      
Series JJ 3/14/2017     30,000     $ 3.13   3/8/2022      
Series LL 4/30/2017     26,398     $ 3.59   4/30/2022      
Series MM 6/22/2017     893,491     $ 1.86   6/22/2022      
Series NN 7/24/2017     539,300     $ 2.52   7/24/2022      
Series OO 7/31/2017     60,000     $ 2.52   7/31/2022      
Series QQ 8/22/2017     3,500     $ 2.50   8/22/2022      
Series GG 2/23/2017     200,000     $ 3.00   8/23/2022      
Series II 3/14/2017     216,500     $ 3.00   9/14/2022      
Series RR 10/30/2017     555,370     $ 1.65   10/30/2022      
Series KK 5/3/2017     213,870     $ 3.04   11/3/2022      
Series SS 12/19/2017     794,740     $ 2.09   12/18/2022      
Series TT 2/5/2018     1,210,827     $ 2.24   2/5/2023      
Series PP 8/28/2017     112,500     $ 2.30   2/28/2023      
Series WW 7/2/2018     69,225     $ 1.63   6/28/2023      
Series VV 7/2/2018     2,515,000     $ 1.75   1/2/2024      
Consultants 7/1/16 - 7/28/17     28,000     $ 2.18-$11.50   6/30/2019- 7/27/2027      
Tabular disclosure of derivative liabilities at fair value
   

March 31,

2019

   

September 30,

2018

 
Series S warrants   $ -     $ 33  
Series V warrants     275,584       770,436  
Series W warrants     383,053       999,081  
Series Z warrants     372,936       487,767  
Series ZZ warrants     21,577       34,215  
Series AA warrants     287,206       380,474  
Series BB warrants     20,720       28,456  
Series CC warrants     1,440,026       1,779,724  
Series DD warrants     -       1,249,287  
Series EE warrants     -       1,249,287  
Series FF warrants     154,318       188,921  
Series GG warrants     500,478       607,228  
Series HH warrants     48,174       58,816  
Series II warrants     544,792       660,135  
Series JJ warrants     72,716       88,642  
Series KK warrants     543,463       656,930  
Series LL warrants     62,886       77,632  
Total warrant liabilities   $ 4,727,929     $ 9,317,064  
                 
Schedule of gains and (losses) on derivative liabilities

The table below presents the gains/(losses) on the warrant liabilities for the six months ended March 31:

 

     2019      2018  
Series S warrants   $ 33     $ 11,927  
Series V warrants     494,852       (3,547 )
Series W warrants     616,028       (24,131 )
Series Z warrants     114,831       8,095  
Series ZZ warrants     12,638       189  
Series AA warrants     93,268       8,676  
Series BB warrants     7,736       293  
Series CC warrants     339,698       41,919  
Series DD warrants     1,249,287       5,456  
Series EE warrants     1,249,287       5,456  
Series FF warrants     34,603       7,301  
Series GG warrants     106,750       37,419  
Series HH warrants     10,642       2,683  
Series II warrants     115,343       50,608  
Series JJ warrants     15,926       4,010  
Series KK warrants     113,467       36,924  
Series LL warrants     14,746       3,307  
Net gain on warrant liabilities   $ 4,589,135     $ 196,585  

 

The table below presents the gains/(losses) on the warrant liabilities for the three months ended March 31:

 

     2019      2018  
Series S warrants   $ -     $ (1,141 )
Series V warrants     (61,480 )     94,766  
Series W warrants     (10,822 )     105,336  
Series Z warrants     (89,290 )     63,630  
Series ZZ warrants     (1,685 )     3,532  
Series AA warrants     (63,951 )     56,036  
Series BB warrants     (4,374 )     2,924  
Series CC warrants     (325,908 )     238,740  
Series DD warrants     -       (27 )
Series EE warrants     -       (27 )
Series FF warrants     (34,459 )     25,348  
Series GG warrants     (106,032 )     152,551  
Series HH warrants     (10,309 )     8,345  
Series II warrants     (115,246 )     229,414  
Series JJ warrants     (15,536 )     12,552  
Series KK warrants     (114,628 )     151,951  
Series LL warrants     (13,451 )     10,885  
Net (loss)/gain on warrant liabilities   $ (967,171 )   $ 1,154,815  

 

Other non-operating gain (loss)
    Six Months Ended     Three Months Ended  
    3/31/2019     3/31/2018     3/31/2019     3/31/2018  
Amount realized through the resale of shares   $ 1,711,353     $ 1,225,291     $ 559,177     $ 478,590  
Fair value of shares upon issuance     1,290,000       1,247,400       1,290,000       1,247,400  
Other non-operating gain (loss)   $ 421,353     $ (22,109 )   $ (730,823 )   $ (768,810 )
v3.19.1
D. FAIR VALUE MEASUREMENTS (Tables)
6 Months Ended
Mar. 31, 2019
Fair Value Disclosures [Abstract]  
Measured at fair value on a recurring basis

 

The table below sets forth the assets and liabilities measured at fair value on a recurring basis, by input level, in the condensed balance sheet at March 31, 2019:

 

 

Quoted Prices in Active Markets for Identical Assets or Liabilities

 (Level 1)

Significant Other Observable Inputs

 (Level 2)

Significant Unobservable Inputs

 (Level 3)

Total
         
Derivative instruments  $ -  $ -   $4,727,929  $4,727,929

 

The table below sets forth the assets and liabilities measured at fair value on a recurring basis, by input level, in the condensed balance sheet at September 30, 2018:

 

 

Quoted Prices in Active Markets for Identical Assets or Liabilities

(Level 1)

Significant Other Observable Inputs

(Level 2)

Significant Unobservable Inputs

(Level 3)

Total
         
Derivative instruments  $33   $ -   $9,317,031   $9,317,064 

  

Reconciliation of beginning and ending balances related to fair value measurements using significant unobservable inputs (Level 3)
    Six Months Ended     Year Ended  
   

March 31,

2019

   

September 30,

2018

 
             
Beginning balance   $ 9,317,031     $ 2,020,629  
Issuances     -       -  
Exercises     -       (595,780 )
Realized and unrealized (gains) and losses     (4,589,102 )     7,892,182  
Ending balance   $ 4,727,929     $ 9,317,031  
                 
v3.19.1
E. COMMITMENTS AND CONTINGENCIES (Tables)
6 Months Ended
Mar. 31, 2019
Commitments and Contingencies Disclosure [Abstract]  
Future minimum lease payments under the San Tomas lease
 Six months ending September 30, 2019      $ 907,000  
 Year ending September 30,        
 2020     1,872,000  
 2021     1,937,000  
 2022     2,004,000  
 2023     2,073,000  
 2024     2,145,000  
 Thereafter     9,540,000  
 Total future minimum lease obligation     20,478,000  
 Less imputed interest on financing obligation     (7,034,000 )
 Net present value of lease financing obligation   $ 13,444,000  
Schedule of future minimum payments under operating leases
Six months ending September 30, 2019   $ 130,000  
Year ending September 30,        
2020     238,000  
2021     163,000  
2022     69,000  
Total   $ 600,000  
v3.19.1
F. PATENTS (Tables)
6 Months Ended
Mar. 31, 2019
Intangible Assets, Net (Excluding Goodwill) [Abstract]  
Schedule of total estimated future amortization
Six months ending September 30, 2019   $ 20,000  
Year ending September 30,        
2020     39,000  
2021     36,000  
2022     31,000  
2023     21,000  
2024     18,000  
Thereafter     78,000  
Total   $ 243,000  
v3.19.1
G. LOSS PER COMMON SHARE (Tables)
6 Months Ended
Mar. 31, 2019
Net loss per common share  
Computation of dilutive net loss per share
    Six months ended March 31,     Three months ended March 31,  
    2019     2018     2019     2018  
Loss per share - basic                        
Net loss available to common shareholders - basic   $ (5,201,779 )   $ (10,895,965 )   $ (6,447,681 )   $ (4,708,135 )
Weighted average shares outstanding - basic     28,543,417       13,403,878       29,113,910       15,210,296  
Basic loss per common share   $ (0.18 )   $ (0.81 )   $ (0.22 )   $ ( 0.31 )
                                 
Loss per share - diluted                                
Net loss available to common shareholders - basic   $ (5,201,779 )   $ (10,895,965 )   $ (6,447,681 )   $ (4,708,135 )
Gain on derivatives (1)     (335,560 )     -       -       -  
Net loss available to common shareholders - diluted   $ (5,537,339 )   $ (10,895,965 )   $ (6,447,681 )   $ (4,708,135 )
                                 
Weighted average shares outstanding - basic     28,543,417       13,403,878       29,113,910       15,210,296  
Incremental shares underlying dilutive "in the money" warrants (1)     5,401       -       -       -  
Weighted average shares outstanding - diluted     28,548,818       13,403,878       29,113,910       15,210,296  
Diluted loss per common share   $ (0.19 )   $ (0.81 )   $ (0.22 )   $ (0.31 )
                                 
Antidilutive securities
  2019 2018
     
Options and Warrants 10,576,881  12,381,730
Unvested Restricted Stock    308,500    312,000
Convertible debt    -      1,077,982
Total 10,885,381  13,771,712
v3.19.1
C. STOCKHOLDERS EQUITY (Details) - USD ($)
3 Months Ended 6 Months Ended
Mar. 31, 2019
Dec. 31, 2018
Mar. 31, 2018
Dec. 31, 2017
Mar. 31, 2019
Mar. 31, 2018
Common Stock            
Beginning balance $ 278,435 $ 280,346 $ 132,581 $ 119,031 $ 280,346 $ 119,031
Beginning balance, shares 27,843,327 28,034,487 13,258,051 11,903,133 28,034,487 11,903,133
Sale of common stock     $ 25,011 $ 12,895    
Sale of common stock, shares     2,501,145 1,289,478    
Warrant exercises $ 15,239 $ 2,987        
Warrant exercises, shares 1,523,933 298,682        
401(k) contributions paid in common stock $ 104 $ 123 $ 259 $ 190    
401(k) contributions paid in common stock, shares 10,419 12,279 25,901 18,984    
Stock issued to nonemployees for service $ 774 $ 628 $ 1,241 $ 137    
Stock issued to nonemployees for service, shares 77,449 62,784 124,082 13,705    
Conversion of notes payable and interest to common stock     $ 554      
Conversion of notes payable and interest to common stock, shares     55,373      
Shares issued (returned) for settlement of clinical research costs $ 5,000 $ (5,649) $ 6,600      
Shares issued (returned) for settlement of clinical research costs, shares 500,000 (564,905) 660,000      
Equity based compensation - employees $ (35)          
Equity based compensation - employees, shares (3,500)          
Ending balance $ 299,517 $ 278,435 $ 166,246 $ 132,581 $ 299,517 $ 166,246
Ending balance, shares 29,951,628 27,843,327 16,624,552 13,258,051 29,951,628 16,624,552
Additional Paid-In Capital            
Beginning balance $ 332,775,129 $ 331,312,184 $ 300,975,618 $ 296,298,401 $ 331,312,184 $ 296,298,401
Sale of common stock     4,652,130 2,437,105    
Warrant exercises 2,640,395 646,766        
401(k) contributions paid in common stock 36,779 35,118 36,261 35,690    
Stock issued to nonemployees for service 224,855 201,752 227,254 25,270    
Conversion of notes payable and interest to common stock     108,746      
Shares issued (returned) for settlement of clinical research costs 1,285,000 5,649 1,240,800      
Equity based compensation - employees 530,865 573,660   1,448,098    
Stock issuance cost (43,625)   (94,773)      
Ending balance 337,449,398 332,775,129 307,425,853 300,975,618 337,449,398 307,425,853
Accumulated Deficit            
Beginning balance (330,345,712) (331,591,614) (305,942,239) (299,754,409) (331,591,614) (299,754,409)
Net income (loss) (6,447,681) 1,245,902 (4,708,135) (6,187,830)    
Ending balance (336,793,393) (330,345,712) (310,650,374) (305,942,239) (336,793,393) (310,650,374)
Beginning balance 2,707,852 916 (4,834,040) (3,336,977) 916 (3,336,977)
Sale of common stock     4,667,141 2,450,000    
Warrant exercises 2,655,634 649,753        
401(k) contributions paid in common stock 36,883 35,241 36,520 35,880 72,124 72,400
Stock issued to nonemployees for service 225,629 202,380 228,495 25,407    
Conversion of notes payable and interest to common stock     109,300      
Shares issued (returned) for settlement of clinical research costs 1,290,000 0 1,247,400      
Equity based compensation - employees 530,830 573,660   1,448,098    
Stock issuance cost (43,625)   (94,773)      
Net income (loss) (6,447,681) 1,245,902 (4,708,135) (6,187,830) (5,201,779) (10,895,965)
Ending balance $ 955,522 $ 2,707,852 $ (3,058,275) $ (4,834,040) $ 955,522 $ (3,058,275)
v3.19.1
C. STOCKHOLDERS EQUITY (Details 1) - shares
Mar. 31, 2019
Sep. 30, 2018
Incentive Stock Option Plans    
Total shares reserved under plans 138,400 138,400
Shares reserved for outstanding options 123,558 123,558
Shares issued 0 0
Remaining options/shares under plans 385 385
Non Qualified Stock Option Plans    
Total shares reserved under plans 3,387,200 3,387,200
Shares reserved for outstanding options 3,010,476 3,036,569
Shares issued 0 0
Remaining options/shares under plans 335,619 309,526
Stock Bonus Plans    
Total shares reserved under plans 783,760 783,760
Shares reserved for outstanding options 0 0
Shares issued 322,928 297,230
Remaining options/shares under plans 460,799 486,497
Stock Compensation Plan    
Total shares reserved under plans 134,000 134,000
Shares reserved for outstanding options 0 0
Shares issued 115,590 118,590
Remaining options/shares under plans 18,410 15,410
Incentive Stock Bonus Plan    
Total shares reserved under plans 640,000 640,000
Shares reserved for outstanding options 0 0
Shares issued 620,500 624,000
Remaining options/shares under plans 16,000 16,000
v3.19.1
C. STOCKHOLDERS EQUITY (Details 2) - shares
3 Months Ended 6 Months Ended
Mar. 31, 2019
Mar. 31, 2018
Mar. 31, 2019
Mar. 31, 2018
Equity [Abstract]        
Granted 0 0 500 10,300
Expired 0 584 2,400 24,379
Forfeited 24,193 6,856 24,193 1,393
v3.19.1
C. STOCKHOLDERS EQUITY (Details 3)
6 Months Ended
Mar. 31, 2019
$ / shares
shares
Series N [Member]  
STOCKHOLDERS' EQUITY  
Issue date 8/18/2008
Shares issuable upon exercise of warrant | shares 85,339
Exercise price $ 3.00
Expiration date 2/18/2020
Series V [Member]  
STOCKHOLDERS' EQUITY  
Issue date 5/28/2015
Shares issuable upon exercise of warrant | shares 810,127
Exercise price $ 19.75
Expiration date 5/28/2020
Series UU [Member]  
STOCKHOLDERS' EQUITY  
Issue date 6/11/2018
Shares issuable upon exercise of warrant | shares 187,562
Exercise price $ 2.80
Expiration date 6/11/2020
Series W [Member]  
STOCKHOLDERS' EQUITY  
Issue date 10/28/2015
Shares issuable upon exercise of warrant | shares 688,930
Exercise price $ 16.75
Expiration date 10/28/2020
Series X [Member]  
STOCKHOLDERS' EQUITY  
Issue date 1/13/2016
Shares issuable upon exercise of warrant | shares 120,000
Exercise price $ 9.25
Expiration date 1/13/2021
Series Y [Member]  
STOCKHOLDERS' EQUITY  
Issue date 2/15/2016
Shares issuable upon exercise of warrant | shares 26,000
Exercise price $ 12.00
Expiration date 2/15/2021
Series ZZ [Member]  
STOCKHOLDERS' EQUITY  
Issue date 5/23/2016
Shares issuable upon exercise of warrant | shares 20,000
Exercise price $ 13.75
Expiration date 5/18/2021
Series BB [Member]  
STOCKHOLDERS' EQUITY  
Issue date 8/26/2016
Shares issuable upon exercise of warrant | shares 16,000
Exercise price $ 13.75
Expiration date 8/22/2021
Series Z [Member]  
STOCKHOLDERS' EQUITY  
Issue date 5/23/2016
Shares issuable upon exercise of warrant | shares 264,000
Exercise price $ 13.75
Expiration date 11/23/2021
Series FF [Member]  
STOCKHOLDERS' EQUITY  
Issue date 12/8/2016
Shares issuable upon exercise of warrant | shares 68,048
Exercise price $ 3.91
Expiration date 12/1/2021
Series CC [Member]  
STOCKHOLDERS' EQUITY  
Issue date 12/8/2016
Shares issuable upon exercise of warrant | shares 680,480
Exercise price $ 5.00
Expiration date 12/8/2021
Series HH [Member]  
STOCKHOLDERS' EQUITY  
Issue date 2/23/2017
Shares issuable upon exercise of warrant | shares 20,000
Exercise price $ 3.13
Expiration date 2/16/2022
Series AA [Member]  
STOCKHOLDERS' EQUITY  
Issue date 8/26/2016
Shares issuable upon exercise of warrant | shares 200,000
Exercise price $ 13.75
Expiration date 2/22/2022
Series JJ [Member]  
STOCKHOLDERS' EQUITY  
Issue date 3/14/2017
Shares issuable upon exercise of warrant | shares 30,000
Exercise price $ 3.13
Expiration date 3/8/2022
Series LL [Member]  
STOCKHOLDERS' EQUITY  
Issue date 4/30/2017
Shares issuable upon exercise of warrant | shares 26,398
Exercise price $ 3.59
Expiration date 4/30/2022
Series MM [Member]  
STOCKHOLDERS' EQUITY  
Issue date 6/22/2017
Shares issuable upon exercise of warrant | shares 893,491
Exercise price $ 1.86
Expiration date 6/22/2022
Series NN [Member]  
STOCKHOLDERS' EQUITY  
Issue date 7/24/2017
Shares issuable upon exercise of warrant | shares 539,300
Exercise price $ 2.52
Expiration date 7/24/2022
Series OO [Member]  
STOCKHOLDERS' EQUITY  
Issue date 7/31/2017
Shares issuable upon exercise of warrant | shares 60,000
Exercise price $ 2.52
Expiration date 7/31/2022
Series QQ [Member]  
STOCKHOLDERS' EQUITY  
Issue date 8/22/2017
Shares issuable upon exercise of warrant | shares 3,500
Exercise price $ 2.50
Expiration date 8/22/2022
Series GG [Member]  
STOCKHOLDERS' EQUITY  
Issue date 2/23/2017
Shares issuable upon exercise of warrant | shares 200,000
Exercise price $ 3.00
Expiration date 8/23/2022
Series II [Member]  
STOCKHOLDERS' EQUITY  
Issue date 3/14/2017
Shares issuable upon exercise of warrant | shares 216,500
Exercise price $ 3.00
Expiration date 9/14/2022
Series RR [Member]  
STOCKHOLDERS' EQUITY  
Issue date 10/30/2017
Shares issuable upon exercise of warrant | shares 555,370
Exercise price $ 1.65
Expiration date 10/30/2022
Series KK [Member]  
STOCKHOLDERS' EQUITY  
Issue date 5/3/2017
Shares issuable upon exercise of warrant | shares 213,870
Exercise price $ 3.04
Expiration date 11/3/2022
Series SS [Member]  
STOCKHOLDERS' EQUITY  
Issue date 12/19/2017
Shares issuable upon exercise of warrant | shares 794,740
Exercise price $ 2.09
Expiration date 12/18/2022
Series TT [Member]  
STOCKHOLDERS' EQUITY  
Issue date 2/5/2018
Shares issuable upon exercise of warrant | shares 1,210,827
Exercise price $ 2.24
Expiration date 2/5/2023
Series PP [Member]  
STOCKHOLDERS' EQUITY  
Issue date 8/28/2017
Shares issuable upon exercise of warrant | shares 112,500
Exercise price $ 2.30
Expiration date 2/28/2023
Series WW [Member]  
STOCKHOLDERS' EQUITY  
Issue date 7/2/2018
Shares issuable upon exercise of warrant | shares 69,225
Exercise price $ 1.63
Expiration date 6/28/2023
Series VV [Member]  
STOCKHOLDERS' EQUITY  
Issue date 7/2/2018
Shares issuable upon exercise of warrant | shares 2,515,000
Exercise price $ 1.75
Expiration date 1/2/2024
Consultants [Member]  
STOCKHOLDERS' EQUITY  
Issue date 7/1/16 - 7/28/17
Shares issuable upon exercise of warrant | shares 28,000
Exercise price minimum $ 2.18
Exercise price maximum $ 11.50
Expiration date 6/30/2019- 7/27/2027
v3.19.1
C. STOCKHOLDERS EQUITY (Details 4) - USD ($)
3 Months Ended 6 Months Ended
Mar. 31, 2019
Mar. 31, 2018
Mar. 31, 2019
Mar. 31, 2018
Sep. 30, 2018
Equity [Abstract]          
Series S warrants $ 0   $ 0   $ 33
Series V warrants 275,584   275,584   770,436
Series W warrants 383,053   383,053   999,081
Series Z warrants 372,936   372,936   487,767
Series ZZ warrants 21,577   21,577   34,215
Series AA warrants 287,206   287,206   380,474
Series BB warrants 20,720   20,720   28,456
Series CC warrants 1,440,026   1,440,026   1,779,724
Series DD warrants 0   0   1,249,287
Series EE warrants 0   0   1,249,287
Series FF warrants 154,318   154,318   188,921
Series GG warrants 500,478   500,478   607,228
Series HH warrants 48,174   48,174   58,816
Series II warrants 544,792   544,792   660,135
Series JJ warrants 72,716   72,716   88,642
Series KK warrants 543,463   543,463   656,930
Series LL warrants 62,886   62,886   77,632
Total warrant liabilities 4,727,929   4,727,929   $ 9,317,064
Series S warrants 0 $ (1,141) 33 $ 11,927  
Series V warrants (61,480) 94,766 494,852 (3,547)  
Series W warrants (10,822) 105,336 616,028 (24,131)  
Series Z warrants (89,290) 63,630 114,831 8,095  
Series ZZ warrants (1,685) 3,532 12,638 189  
Series AA warrants (63,951) 56,036 93,268 8,676  
Series BB warrants (4,374) 2,924 7,736 293  
Series CC warrants (325,908) 238,740 339,698 41,919  
Series DD warrants 0 (27) 1,249,287 5,456  
Series EE warrants 0 (27) 1,249,287 5,456  
Series FF warrants (34,459) 25,348 34,603 7,301  
Series GG warrants (106,032) 152,551 106,750 37,419  
Series HH warrants (10,309) 8,345 10,642 2,683  
Series II warrants (115,246) 229,414 115,343 50,608  
Series JJ warrants (15,536) 12,552 15,926 4,010  
Series KK warrants (114,628) 151,951 113,467 36,924  
Series LL warrants (13,451) 10,885 14,746 3,307  
Net (loss)/gain on warrant liabilities $ (967,171) $ 1,154,815 $ 4,589,135 $ 196,585  
v3.19.1
C. STOCKHOLDERS EQUITY (Details 5) - USD ($)
3 Months Ended 6 Months Ended
Mar. 31, 2019
Mar. 31, 2018
Mar. 31, 2019
Mar. 31, 2018
Equity [Abstract]        
Amount realized through the resale of shares $ 559,177 $ 478,590 $ 1,711,353 $ 1,225,291
Fair value of shares upon issuance 1,290,000 1,247,400 1,290,000 1,247,400
Other non-operating gain (loss) $ (730,823) $ (768,810) $ 421,353 $ (22,109)
v3.19.1
C. STOCKHOLDERS EQUITY (Details Narrative) - USD ($)
3 Months Ended
Mar. 31, 2019
Dec. 31, 2018
Mar. 31, 2018
Dec. 31, 2017
Equity [Abstract]        
Consulting agreement expense $ 225,629 $ 202,380 $ 228,495 $ 25,407
v3.19.1
D. FAIR VALUE MEASUREMENTS (Details) - USD ($)
Mar. 31, 2019
Sep. 30, 2018
Derivative instruments $ 4,727,929 $ 9,317,064
Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)    
Derivative instruments 0 33
Significant Other Observable Inputs (Level 2)    
Derivative instruments 0 0
Significant Unobservable Inputs (Level 3)    
Derivative instruments $ 4,727,929 $ 9,317,031
v3.19.1
D. FAIR VALUE MEASUREMENTS (Details 1) - USD ($)
6 Months Ended 12 Months Ended
Mar. 31, 2019
Sep. 30, 2018
Fair Value Disclosures [Abstract]    
Beginning balance $ 9,317,031 $ 2,020,629
Issuances 0 0
Exercises 0 (595,780)
Realized and unrealized (gains) and losses (4,589,102) 7,892,182
Ending balance $ 4,727,929 $ 9,317,031
v3.19.1
E. COMMITMENTS AND CONTINGENCIES (Details)
Mar. 31, 2019
USD ($)
Commitments and Contingencies Disclosure [Abstract]  
Six months ending March 31, 2019 $ 907,000
2020 1,872,000
2021 1,937,000
2022 2,004,000
2023 2,073,000
2024 2,145,000
Thereafter 9,540,000
Total future minimum lease obligation 20,478,000
Less imputed interest on financing obligation (7,034,000)
Net present value of lease financing obligation $ 13,444,000
v3.19.1
E. COMMITMENTS AND CONTINGENCIES (Details 1)
Mar. 31, 2019
USD ($)
Commitments and Contingencies Disclosure [Abstract]  
Six months ending March 31, 2019 $ 130,000
2020 238,000
2021 163,000
2022 69,000
Total $ 600,000