Stockholders' Equity | 12 Months Ended |
Sep. 30, 2013 |
Stockholders' Equity [Abstract] | ' |
Stockholders' Equity | ' |
14 | Stockholders’ Equity | | | | | | | |
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Common Stock |
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The holders of the Company's common stock are entitled to one vote per share of common stock held. |
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In September 2013, the Company increased the number of its authorized common shares to 300,000,000. |
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During the year ended September 30, 2013, the Company issued a total of 4,747,839 shares of its common stock of which 689,000 shares were issued through the exercise of warrants for $131.100, 2,104,000 shares of its common stock were issued through the conversion of $1,052,000 of principal and accrued interest on convertible debt, 498,791 shares were issued in cashless exercises of 1,590,000 common stock options, 956,048 shares were issued on the exercise of 956,048 common stock options, and 500,000 shares of common stock were issued for $245,000. The 956,048 common shares were issued through various exercises from employees, and a consultant from which the Company received $448,386. |
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During the year ended September 30, 2012, the Company issued a total of 2,290,000 shares of its common stock of which 1,850,000 shares were issued through the exercise of warrants for $318,000, 200,000 shares of its common stock were issued for the acquisition of the Anywhere software license as discussed in Note 6 and was valued at $46,000, and 240,000 were issued to a consultant for financial advisory services valued at $43,200. |
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Warrants |
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As indicated in Note 10, the Company issued warrants to seventy-one investors to purchase a total of 10,000,000 shares of the Company’s common stock at a price of $0.25 per share as part of the $2,000,000 private placement completed in February 2012 and the $3,000,000 private placement completed in October 2012. The warrants expire at various dates through September 2015. During the year ended September 30, 2013, Warrant holders exercised 689,000 warrants in the purchase of 689,000 common shares at a total purchase price of $131,100. |
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In March 2012, the Company agreed to modify the terms of warrants granted to a consultant under a new agreement that replaced a prior agreement in June 2011 to purchase 1,000,000 shares of the Company's common stock. Under the modified terms, the exercise price was reduced from $0.80 per share to $0.40 per share and the expiration date of the warrants was extended from June 14, 2014 to December 14, 2014. The Company recognized consultant’s compensation expense during the period of $53,600 on the modification. |
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Options |
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In November 2012, the Company modified the terms of stock options granted to certain employees, officers, directors, and active third-party service providers. Under the modified terms, the Company reduced the number of shares to be purchased under these option grants from a total of 17,134,334 shares to a total of 14,534,934 shares with a reduction in the purchase price on these grants from original prices ranging from $1.375 to $0.90 per share to $0.469 per share. A breakdown of the modified grants is as follows: |
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| | Shares under | | | Shares under | |
| | Original | | | Modified | |
| | Grant | | | Grant | |
Employees | | | 5,809,334 | | | | 4,914,934 | |
Officers and directors | | | 11,300,000 | | | | 9,600,000 | |
Consultant | | | 25,000 | | | | 20,000 | |
| | | 17,134,334 | | | | 14,534,934 | |
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In addition to reducing the number of options previously granted at the reduced purchase price, the Executive Chairman and Chief Executive Officer voluntarily agreed to amend their stock options to defer vesting of already vested options related to their employment agreements and half of their unvested options for an additional six months. The Company accounted for the modification to the option grants pursuant to ASC Topic 718-20-35 and recognized $489,726 as additional compensation that was charged to operations during the three months ended December 31, 2012. |
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On November 29, 2012, the Company granted options to a Director to purchase 200,000 shares of the Company common stock at a purchase price of $0.389 per share expiring five years from date of grant. The 200,000 options were valued at $26,760 under a Binomial Option Model using a trading price of $0.25 per share, a risk free interest rate of 0.63%, and volatility of 98.76%. The options immediately vested, and the $26,760 was fully charged to operations on the date of grant |
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On December 6, 2012, the Company granted options to its Executive Chairman to purchase 2,099,400 shares of the Company common stock at a purchase price of $0.469 per share expiring five years from date of grant. The 2,099,400 options were valued at $636,328 under a Binomial Option Model using a trading price of $0.46 per share, a risk free interest rate of 0.60%, and volatility of 98.54%. The options immediately vested, and the $636,328 was fully charged to operations on the date of grant. |
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On December 6, 2012, the Company granted options to an employee to purchase 500,000 shares of the Company common stock at a purchase price of $0.469 per share expiring five years from date of grant. The 500,000 options were valued at $151,550 under a Binomial Option Model using a trading price of $0.46 per share, a risk free interest rate of 0.60%, and volatility of 98.54%. The options immediately vest and the $151,550 was fully charged to operations on the date of grant. |
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On December 10, 2012, the Company granted options to a Director to purchase 200,000 shares of the Company common stock at a purchase price of $0.446 per share expiring five years from date of grant. The 200,000 options were valued at $50,220 under a Binomial Option Model using a trading price of $0.40 per share, a risk free interest rate of 0.62%, and volatility of 98.32%. The options immediately vest and the $50,220 was fully charged to operations on the date of grant. |
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On March 29, 2013, the Company granted options to a Director to purchase 200,000 shares of the Company common stock at a purchase price of $0.6870 per share expiring five years from date of grant. The 200,000 options were valued at $85,960 under a Binomial Option Model using a trading price of $0.67 per share, a risk free interest rate of 0.76%, and volatility of 97.10%. The options immediately vest and the $85.960 was fully charged to operations on the date of grant. |
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On April 16, 2013, the Company granted options to a Director to purchase 50,000 shares of the Company common stock at a purchase price of $0.676 per share expiring five years from date of grant. The 50,000 options were valued at $19,295 under a Binomial Option Model using a trading price of $0.75 per share, a risk free interest rate of 0.71%, and volatility of 96.65%. The options immediately vest and the $19.295 was fully charged to operations on the date of grant. |
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On May 1, 2013, the Company granted options to a Director to purchase 200,000 shares of the Company common stock at a purchase price of $0.705 per share expiring five years from date of grant. The 200,000 options were valued at $84,600 under a Binomial Option Model using a trading price of $0.67 per share, a risk free interest rate of 0.65%, and volatility of 96.28%. The options immediately vest and the $84,600 was fully charged to operations on the date of grant. |
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On August 27, 2013, the Company granted options to a Director to purchase 250,000 shares of the Company common stock at a purchase price of $0.604 per share expiring five years from date of grant. The 250,000 options were valued at $95,200 under a Binomial Option Model using a trading price of $0.60 per share, a risk free interest rate of 1.56%, and volatility of 94.1497%. The options immediately vest and the $95,200 was fully charged to operations on the date of grant. |
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On August 27, 2013, the Company granted options to a Director to purchase 50,000 shares of the Company common stock at a purchase price of $0.604 per share expiring five years from date of grant. The 50,000 options were valued at $19,040 under a Binomial Option Model using a trading price of $0.60 per share, a risk free interest rate of 1.56%, and volatility of 94.1497%. The options immediately vest and the $95,200 was fully charged to operations on the date of grant. |
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As discussed in Note 5, on September 11, 2013, the Company granted 5,750,000 options to a third party and valued the options at $718,871 using a Binomial Option model based upon an expected terms ranging from 1.08 years to 1.25 years, trading price of $0.52, a risk free interest of 0.12%, and expected volatility of 56.624%. |
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On August 23, 2012, the Company granted options to three directors to purchase a total of 550,000 shares of the Company’s common stock at $0.325 per share. The Company valued the options at $26,716 using a Binomial Option model based upon an expected life of five years, a risk free interest rate of 0.71%, and expected volatility of 100.95% and a market discount of 75%. At the date of grant, the Company’s common stock had a trading price of $0.30 per share. The Company is charged the $26,716 to operations as compensation expense based upon the vesting of the respective options. |
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During the year ended September 30, 2013, the Company recognized stock-based compensation expense totaling $2,242,606, of which $1,349,809 was recognized through the vesting of 5,832,400 common stock options, $489,726 was recognized as additional compensation on the modification of 17,134,334 previously granted options, and $403,071 from the amortization of prepaid consulting fees compensated through the granting of 5,750,000 options. During the year ended September 30, 2012, the Company recognized stock-based compensation expense totaling $502,591, of which $448,991 was recognized through the vesting of 6,700,666 common stock options and $53,600 was recognized as compensation on the modification of 1,000,000 warrants granted to a consultant under a new agreement replacing a prior agreement. |
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A summary of outstanding stock warrants and options is as follows: |
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| | Number | | | Weighted Average | |
| | of Shares | | | Exercise Price | |
Outstanding – September 30, 2011 | | | 49,810,986 | | | $ | 0.82 | |
Granted | | | 9,743,920 | | | $ | 0.23 | |
Exercised | | | (1,850,000 | ) | | $ | (.17 | ) |
Cancelled | | | (2,378,311 | ) | | $ | (.32 | ) |
Outstanding – September 30, 2012 | | | 55,326,595 | | | $ | 0.75 | |
Granted | | | 25,520,414 | | | $ | 0.43 | |
Exercised | | | (3,235,048 | ) | | $ | (.41 | ) |
Cancelled | | | (27,907,009 | ) | | $ | (.93 | ) |
Outstanding – September 30, 2013 | | | 49,704,952 | | | $ | 0.48 | |
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Of the 49,704,952 options and warrants outstanding, 46,788,618 are fully vested and currently available for exercise. |