Document And Entity Information
Document And Entity Information | 12 Months Ended |
Sep. 30, 2019 | |
Document And Entity Information | |
Document Type | S-1 |
Amendment Flag | false |
Document Period End Date | Sep. 30, 2019 |
Entity Registrant Name | Arch Therapeutics, Inc. |
Entity Central Index Key | 0001537561 |
Entity Filer Category | Non-accelerated Filer |
Entity Emerging Growth Company | false |
Entity Small Business | true |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Sep. 30, 2019 | Sep. 30, 2018 |
Current assets: | ||
Cash | $ 2,180,329 | $ 4,667,410 |
Inventory | 346,647 | 0 |
Prepaid expenses and other current assets | 362,705 | 151,794 |
Total current assets | 2,889,681 | 4,819,204 |
Long-term assets: | ||
Property and equipment, net | 9,023 | 17,261 |
Other assets | 3,500 | 3,500 |
Total long-term assets | 12,523 | 20,761 |
Total assets | 2,902,204 | 4,839,965 |
Current liabilities: | ||
Accounts payable | 533,555 | 160,946 |
Accrued expenses and other liabilities | 180,256 | 127,439 |
Total current liabilities | 713,811 | 288,385 |
Long-term liabilities: | ||
Long-term derivative liability | 2,995,690 | 3,191,752 |
Total long-term liabilities | 2,995,690 | 3,191,752 |
Total liabilities | 3,709,501 | 3,480,137 |
Commitments and contingencies | ||
Stockholders' equity (deficit): | ||
Common stock, $0.001 par value, 300,000,000 shares authorized, 173,577,233 and 164,397,013 shares issued and outstanding as of September 30, 2019 and September 30, 2018, respectively | 172,612 | 159,815 |
Additional paid-in capital | 37,885,151 | 35,517,491 |
Accumulated deficit | (38,865,060) | (34,317,478) |
Total stockholders' equity (deficit) | (807,297) | 1,359,828 |
Total liabilities and stockholders' equity (deficit) | $ 2,902,204 | $ 4,839,965 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2019 | Sep. 30, 2018 |
Consolidated Balance Sheets | ||
Common Stock, Par Value | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 300,000,000 | 300,000,000 |
Common Stock, Shares Issued | 173,577,233 | 164,397,013 |
Common Stock, Shares Outstanding | 173,577,233 | 164,397,013 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Consolidated Statements of Operations | ||
Revenues | $ 0 | $ 0 |
Operating expenses: | ||
General and administrative expenses | 3,974,919 | 4,565,522 |
Research and development expenses | 2,396,838 | 2,884,245 |
Total operating expenses | 6,371,757 | 7,449,767 |
Operating loss | (6,371,757) | (7,449,767) |
Other income (expense) | ||
Decrease (increase) to fair value of derivative | 1,824,175 | 2,635,735 |
Total other income (expense) | 1,824,175 | 2,635,735 |
Net loss | $ (4,547,582) | $ (4,814,032) |
Earnings per share - basic and diluted | ||
Net income (loss) per share - basic and diluted | $ (0.03) | $ (0.03) |
Weighted common shares - basic and diluted | 166,339,862 | 152,712,714 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity (Deficit) - USD ($) | Common Stock [Member] | Additional Paid-in Capital | Accumulated Deficit | Total |
Balance at the beginning of the period at Sep. 30, 2017 | $ 149,943 | $ 31,580,022 | $ (29,503,446) | $ 2,226,519 |
Balance at the beginning of the period (in shares) at Sep. 30, 2017 | 149,942,857 | |||
Net loss | $ 0 | 0 | (4,814,032) | (4,814,032) |
Shares issued for the exercise of warrants | $ 242 | 63,146 | 0 | 63,388 |
Shares issued for the exercise of warrants(in shares) | 242,273 | |||
Stock based compensation expense | $ 0 | 1,742,459 | 0 | 1,742,459 |
Shares issued for the exercise of stock options - cashless | $ 117 | (117) | 0 | 0 |
Shares issued for the exercise of stock options - cashless (in shares) | 210,000 | |||
Shares issued for the exercise of stock options (in shares) | 116,883 | |||
Issuance of restricted stock for services | $ 233 | (233) | 0 | 0 |
Issuance of restricted stock for services (in shares) | 233,000 | |||
Issuance of stock in private placement funding | $ 9,070 | 2,054,724 | 0 | 2,063,794 |
Issuance of stock in private placement funding(in shares) | 9,070,000 | |||
Shares issued for the exercise of stock options - cashless | $ 210 | 77,490 | 0 | 77,700 |
Balance at the ending of the period at Sep. 30, 2018 | $ 159,815 | 35,517,491 | (34,317,478) | $ 1,359,828 |
Balance at the ending of the period (in shares) at Sep. 30, 2018 | 164,397,013 | |||
Ending balance (in shares) at Sep. 30, 2018 | 159,815,013 | |||
Net loss | $ 0 | 0 | (4,547,582) | $ (4,547,582) |
Issuance of restricted stock | $ 3,517 | (3,517) | 0 | 0 |
Issuance of restricted stock (in shares) | 3,517,000 | |||
Stock based compensation expense | $ 0 | 1,184,349 | 0 | 1,184,349 |
Issuance of common stock and warrants, net of financing costs | $ 8,615 | 1,112,093 | 0 | 1,120,708 |
Issuance of common stock and warrants, net of financing costs (in shares) | 8,615,384 | |||
Shares issued for the exercise of stock options - cashless | $ 477 | (477) | 0 | $ 0 |
Shares issued for the exercise of stock options - cashless (in shares) | 87,567 | |||
Shares issued for the exercise of stock options (in shares) | 477,269 | 1,525,000 | ||
Issuance of restricted stock for services | $ 100 | 42,900 | 0 | $ 43,000 |
Issuance of restricted stock for services (in shares) | 100,000 | |||
Shares issued for the exercise of stock options - cashless | $ 88 | 32,312 | 0 | 32,400 |
Balance at the ending of the period at Sep. 30, 2019 | $ 172,612 | $ 37,885,151 | $ (38,865,060) | $ (807,297) |
Balance at the ending of the period (in shares) at Sep. 30, 2019 | 173,577,233 | |||
Ending balance (in shares) at Sep. 30, 2019 | 172,612,233 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash flows from operating activities: | ||
Net loss | $ (4,547,582) | $ (4,814,032) |
Adjustments to reconcile net loss to cash used in operating activities: | ||
Depreciation | 8,238 | 5,342 |
Stock-based compensation | 1,184,349 | 1,742,459 |
Non-employee stock-based compensation for services | 43,000 | 0 |
Decrease to fair value of derivative | (1,824,175) | (2,635,735) |
(Increase) decrease in: | ||
Inventory | (346,647) | 0 |
Prepaid expenses and other current assets | (210,911) | (66,451) |
Increase (decrease) in: | ||
Accounts payable | 372,609 | (103,930) |
Accrued expenses and other liabilities | 52,817 | (41,216) |
Net cash used in operating activities | (5,268,302) | (5,913,563) |
Cash flows from investing activities: | ||
Purchases of property and equipment | 0 | (15,415) |
Net cash used in investing activities | 0 | (15,415) |
Cash flows from financing activities: | ||
Proceeds from issued common stock and warrants, net of financing costs | 2,748,821 | 4,461,248 |
Proceeds from exercise of warrants | 0 | 63,388 |
Proceeds from exercise of stock options | 32,400 | 77,700 |
Net cash provided by financing activities | 2,781,221 | 4,602,336 |
Net decrease in cash | (2,487,081) | (1,326,642) |
Cash, beginning of year | 4,667,410 | 5,994,052 |
Cash, end of year | 2,180,329 | 4,667,410 |
Non-cash financing activities: | ||
Warrant derivative liability | 1,628,113 | 2,397,454 |
Exercise of stock options - cashless | 477 | 117 |
Issuance of restricted stock | 3,517 | 233 |
Issuance of restricted stock for services | $ 43,000 | $ 0 |
DESCRIPTION OF BUSINESS
DESCRIPTION OF BUSINESS | 12 Months Ended |
Sep. 30, 2019 | |
DESCRIPTION OF BUSINESS | |
DESCRIPTION OF BUSINESS | 1. DESCRIPTION OF BUSINESS Arch Therapeutics, Inc., (together with its subsidiary, the “Company” or “Arch”) was incorporated under the laws of the State of Nevada on September 16, 2009, under the name “Almah, Inc.”. Effective June 26, 2013, the Company completed a merger (the “Merger”) with Arch Biosurgery, Inc. (formerly known as Arch Therapeutics, Inc.), a Massachusetts corporation (“ABS”), and Arch Acquisition Corporation (“Merger Sub”), the Company’s wholly owned subsidiary formed for the purpose of the transaction, pursuant to which Merger Sub merged with and into ABS and ABS thereby became the wholly owned subsidiary of the Company. As a result of the acquisition of ABS, the Company abandoned its prior business plan and changed its operations to the business of a biotechnology company. Our principal offices are located in Framingham, Massachusetts. For financial reporting purposes, the Merger represented a “reverse merger”. ABS was deemed to be the accounting acquirer in the transaction and the predecessor of Arch. Consequently, the accumulated deficit and the historical operations that are reflected in the Company’s consolidated financial statements prior to the Merger are those of ABS. All share information has been restated to reflect the effects of the Merger. The Company’s financial information has been consolidated with that of ABS after consummation of the Merger on June 26, 2013, and the historical financial statements of the Company before the Merger have been replaced with the historical financial statements of ABS before the Merger in this report. ABS was incorporated under the laws of the Commonwealth of Massachusetts on March 6, 2006 as Clear Nano Solutions, Inc. On April 7, 2008, ABS changed its name from Clear Nano Solutions, Inc. to Arch Therapeutics, Inc. Effective upon the closing of the Merger, ABS changed its name from Arch Therapeutics, Inc. to Arch Biosurgery, Inc. The Company has generated no operating revenues to date, and is devoting substantially all of its efforts toward product research and development. To date, the Company has principally raised capital through debt borrowings, the issuance of convertible debt, and the issuance of units consisting of common stock and warrants. The Company expects to incur substantial expenses for the foreseeable future relating to research, development and commercialization of its potential products. However, there can be no assurance that the Company will be successful in securing additional resources when needed, on terms acceptable to the Company, if at all. Therefore, there exists substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments related to the recoverability of assets that might be necessary despite this uncertainty. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Sep. 30, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). Basis of Presentation The consolidated financial statements include the accounts of Arch Therapeutics, Inc. and its wholly owned subsidiary, Arch Biosurgery, Inc., a biotechnology company. All intercompany accounts and transactions have been eliminated in consolidation. The Company is in the development stage and is devoting substantially all of its efforts to developing technologies, raising capital, establishing customer and vendor relationships, and recruiting and retaining new employees. Use of Estimates Management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. Recently Issued Accounting Guidance Accounting Standards Update (ASU) 2018‑07, “Compensation—Stock Compensation (Topic 718) Improvements to Nonemployee Share-Based Payment Accounting” was issued by the Financial Accounting Standards Board (FASB) in June 2018. The purpose of this amendment is to address aspects of the accounting for nonemployee share-based payment transactions. The amendments in this Update are effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. The Company does not believe that this guidance will have a material impact on its consolidated results of operations, financial position or disclosures. ASU 2016‑15, “Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Payments” was issued in August 2016. The purpose of this amendment is to address eight specific cash flow issues with the objective of reducing the existing diversity in practice. The amendments in this Update are effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is permitted. The Company adopted ASU 2016‑15 during our first quarter of fiscal year 2019, which had no impact on our consolidated financial statements, and will apply the new guidance in future periods. ASU 2016‑02, “Leases (Topic 842)” was issued by the FASB in February 2016. The purpose of this amendment is to recognize most operating leases by recording a right-to-use asset and corresponding lease liability. The amendments in this Update are effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. The Company does not believe that this guidance will have a material impact on its consolidated results of operations, financial position or disclosures. Cash The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. The Company had no cash equivalents as of September 30, 2019 and September 30, 2018. Inventories Inventories are stated at the lower of cost or net realizable value. The cost of inventories comprises expenditures incurred in acquiring the inventories, the cost of conversion and other costs incurred in bringing them to their existing location and condition. The cost of raw materials, work-in-progress and finished goods and other products are determined on a First in First out (FiFo) basis. When determining net realizable value, appropriate consideration is given to obsolescence, excessive levels, deterioration, and other factors in evaluating net realizable value. As of September 30, 2019, no reserve for obsolescence was considered necessary. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of cash. The Company maintains its cash in bank deposits accounts, which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts. The Company believes it is not exposed to any significant credit risk on cash. Deferred Offering Costs Deferred Offering Costs consist of fees and expenses incurred in connection with the public offering and sale of the Company’s common stock, including legal, accounting, printing and other related expenses. These costs are netted against the proceeds received as a reduction to additional paid-in capital. Property and Equipment Property and equipment are recorded at cost and depreciated using the straight-line method over the estimated useful life of the related asset. Upon sale or retirement, the cost and accumulated depreciation are eliminated from their respective accounts, and the resulting gain or loss is included in income or loss for the period. Repair and maintenance expenditures are charged to expense as incurred. Impairment of Long-Lived Assets Long-lived assets are reviewed for impairment when circumstances indicate the carrying value of an asset may not be recoverable in accordance with ASC 360, Property, Plant and Equipment . For assets that are to be held and used, impairment is recognized when the estimated undiscounted cash flows associated with the asset or group of assets is less than their carrying value. If impairment exists, an adjustment is made to write the asset down to its fair value, and a loss is recorded as the difference between the carrying value and fair value. Fair values are determined based on quoted market values, discounted cash flows or internal and external appraisals, as applicable. Assets to be disposed of are carried at the lower of carrying value or estimated net realizable value. For the years ended September 30, 2019 and 2018 there has not been any impairment of long-lived assets. Income Taxes In accordance with FASB ASC 740, Income Taxes , we recognize deferred tax assets and liabilities for the expected future tax consequences or events that have been included in our consolidated financial statements and/or tax returns. Deferred tax assets and liabilities are based upon the differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities and for loss and credit carryforwards using enacted tax rates expected to be in effect in the years in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized. We provide reserves for potential payments of tax to various tax authorities related to uncertain tax positions when management determines that it is probable that a loss will be incurred related to these matters and the amount of the loss is reasonably determinable. On December 22, 2017, the Tax Cuts and Jobs Act (“TCJA”) was signed into United States law. The TCJA includes a number of changes to existing tax law, including, among other things, a permanent reduction in the federal corporate income tax rate to a flat rate of 21%, effective January 1, 2018, as well as the elimination of net operating loss carrybacks for losses arising in taxable years beginning after December 31, 2017. Further, operating losses arising in tax years after December 31, 2017, are carried forward indefinitely. Due to the TCJA, the Company’s deferred tax assets and liabilities recognized prior to 2017 were revalued at the newly enacted tax rates, which resulted in a corresponding adjustment in the valuation allowance. Research and Development The Company expenses internal and external research and development costs, including costs of funded research and development arrangements, in the period incurred. Accounting for Stock-Based Compensation The Company accounts for employee stock-based compensation in accordance with the guidance of FASB ASC Topic 718, Compensation-Stock Compensation (“FASB ASC Topic 718”), which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the consolidated financial statements based on their fair values. The Company accounts for non-employee stock-based compensation in accordance with the guidance of FASB ASC Topic 505, Equity (“FASB ASC Topic 505”), which requires that companies recognize compensation expense based on the estimated fair value of options granted to non-employees over their vesting period, which is generally the period during which services are rendered by such non-employees. FASB ASC Topic 505 requires the Company to re-measure the fair value of stock options issued to non- employee at each reporting period during the vesting period or until services are complete. In accordance with FASB ASC Topic 718, the Company has elected to use the Black-Scholes option pricing model to determine the fair value of options granted and recognizes the compensation cost of share-based awards on a straight-line basis over the vesting period of the award. The determination of the fair value of share-based payment awards utilizing the Black-Scholes model is affected by the fair value of the common stock and a number of other assumptions, including expected volatility, expected life, risk-free interest rate and expected dividends. Prior to January 1, 2018, the Company's expected volatility is derived from the historical daily change in the market price of its common stock since it exited shell company status, as well as the historical daily change in the market price for the peer group as determined by the Company. Effective January 1, 2018, the Company's expected volatility is derived from the historical daily change in the market price of its common stock since it exited shell company status. The life term for awards uses simplified method for all “plain vanilla” options, as defined in ASC 718‑10‑S99 and the contractual term for all other employee and non-employee awards. The risk-free interest rate assumption is based on observed interest rates appropriate for the terms of our awards. The dividend yield assumption is based on history and the expectation of paying no dividends. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Stock-based compensation expense, when recognized in the consolidated financial statements, is based on awards that are ultimately expected to vest. Fair Value Measurements The Company measures both financial and nonfinancial assets and liabilities in accordance with FASB ASC Topic 820, Fair Value Measurements and Disclosures , including those that are recognized or disclosed in the consolidated financial statements at fair value on a recurring basis. The standard created a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels as follows: Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and Level 3 inputs are unobservable inputs that reflect the Company’s own views about the assumptions market participants would use in pricing the asset or liability. At September 30, 2019 and September 30, 2018, the carrying amounts of cash, accounts payable, accrued expenses and other liabilities, approximate fair value because of their short-term nature. Derivative Liabilities The Company accounts for its warrants and other derivative financial instruments as either equity or liabilities based upon the characteristics and provisions of each instrument, in accordance with FASB ASC Topic 815, Derivatives and Hedging . Warrants classified as equity are recorded at fair value as of the date of issuance on the Company’s consolidated balance sheets and no further adjustments to their valuation are made. Warrants classified as derivative liabilities and other derivative financial instruments that require separate accounting as liabilities are recorded on the Company’s consolidated balance sheets at their fair value on the date of issuance and will be revalued on each subsequent balance sheet date until such instruments are exercised or expire, with any changes in the fair value between reporting periods recorded as other income or expense. Management estimates the fair value of these liabilities using option pricing models and assumptions that are based on the individual characteristics of the warrants or instruments on the valuation date, as well as assumptions for future financings, expected volatility, expected life, yield, and risk-free interest rate. Subsequent Events The Company evaluated all events or transactions that occurred commencing from October 1, 2019 and ending on November 18, 2019 the date which these consolidated financial statements were issued. The Company disclosed material subsequent events in Note 15. Going Concern Basis of Accounting As reflected in the consolidated financial statements, the Company has an accumulated deficit, has suffered significant net losses and negative cash flows from operations, has not generated operating revenues, and has limited working capital. The continuation of our business as a going concern is dependent upon raising additional capital and eventually attaining and maintaining profitable operations. In particular, as of September 30, 2019, the Company will be required to raise additional capital, obtain alternative means of financial support, or both, in order to continue to fund operations, and therefore there is substantial doubt about our ability to continue as a going concern. The Company expects to incur substantial expenses into the foreseeable future for the research, development and commercialization of its potential products. In addition, the Company will require additional financing in order to seek to license or acquire new assets, research and develop any potential patents and the related compounds, and obtain any further intellectual property that the Company may seek to acquire. Historically, the Company has principally funded operations through debt borrowings, the issuance of convertible debt, and the issuance of units consisting of common stock and warrants. Provisions in the Securities Purchase Agreements that the Company entered into on February 20, 2017 (“2017 SPA”) and on June 28, 2018 (“2018 SPA”) restrict the Company’s ability to effect or enter into an agreement to effect any issuance by the Company or any of its subsidiaries of Common Stock or securities convertible, exercisable or exchangeable for Common Stock (or a combination of units thereof) involving a Variable Rate Transaction (as defined in the 2017 SPA and 2018 SPA) including, but not limited to, an equity line of credit or “At-the-Market” financing facility until the three lead investors in the 2017 Financing and the institutional investors in the 2018 SPA collectively own less than 20% of the Series F Warrants and the Series G Warrants purchased by them pursuant to the 2017 SPA and 2018 SPA, respectively. In addition, the October 2019 SPA contains certain restrictions on our ability to conduct subsequent sales of our equity securities. In particular, subject to certain customary exemptions, from October 16, 2019 until 90 days after the closing of the October 2019 Financing, neither the Company nor is subsidiary shall issue, enter into any agreement to issue or announce the issuance or proposed issuance of any shares of Common Stock or securities convertible, exercisable or exchangeable for Common Stock. The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. The consolidated financial statements do not include any adjustments that might result from this uncertainty. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Sep. 30, 2019 | |
PROPERTY AND EQUIPMENT | |
PROPERTY AND EQUIPMENT | 3. PROPERTY AND EQUIPMENT At September 30, 2019 and September 30, 2018, property and equipment consisted of: Estimated September 30, September 30, Useful Life 2019 2018 Furniture and fixtures 5 years $ 9,357 $ 9,357 Leasehold improvements Life of Lease $ 8,983 $ 8,983 Computer equipment 3 years $ 8,686 $ 8,686 Lab equipment 5 years $ 1,000 $ 1,000 28,026 28,026 Less – accumulated depreciation 19,003 10,765 Property and equipment, net $ 9,023 $ 17,261 For the years ended September 30, 2019 and 2018 depreciation expense recorded was $8,238 and $5,342, respectively. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Sep. 30, 2019 | |
INCOME TAXES | |
INCOME TAXES | 4. INCOME TAXES The principal components of the Company’s net deferred tax assets consisted of the following at September 30: 2019 2018 Net operating loss carryforwards $ 7,291,333 $ 5,848,080 Capitalized expenditures 1,717,025 1,486,679 Research and experimentation credit carryforwards 898,610 802,765 Stock based compensation 2,139,119 2,074,247 Property and Equipment 2,234 1,235 Accrued expenses 13,660 13,660 Deferred rent 492 328 Gross deferred tax assets 12,062,473 10,226,994 Deferred tax asset valuation allowance (12,062,473) (10,226,994) Net deferred tax assets $ — $ — As of September 30, 2019 and 2018, the Company had federal net operating loss carryforwards of approximately $26,890,000 and $21,770,000, respectively, which may be available to offset future taxable income and which would begin to expire in 2026. As of September 30, 2019 and 2018, the Company had federal research and experimentation credit carryforwards of $661,532 and $616,217, respectively, which may be available to offset future income tax liabilities and which would begin to expire in 2029. As of September 30, 2019 and 2018, the Company had state net operating loss carryforwards of approximately $26,560,000 and $20,730,000, respectively, which may be available to offset future taxable income and which would begin to expire in 2030. As of September 30, 2019 and 2018, the Company had state research and experimentation credit carryforwards of $305,000 and $236,000, respectively, which may be able to offset future income tax liabilities and which would begin to expire in 2023. As the Company has not yet achieved profitable operations, management believes the tax benefits as of September 30, 2019 and 2018 did not satisfy the realization criteria set forth in FASB ASC Topic 740, Income Taxes, and therefore has recorded a valuation allowance for the entire deferred tax asset. The valuation allowance increased in 2019 by approximately $1,835,000 and decreased in 2018 by approximately $1,440,000. The Company’s effective income tax rate differed from the federal statutory rate due to state taxes and the Company’s full valuation allowance, the latter of which reduced the Company’s effective federal income tax rate to zero. The Company experienced an ownership change as a result of the Merger described in Note 1, causing a limitation on the annual use of the net operating loss carryforwards, which are subject to a substantial annual limitation due to the ownership change limitations set forth in Internal Revenue Code Section 382 and similar state provisions. As of September 30, 2019, the Company is open to examination in the U.S. federal and certain state jurisdictions for tax years ended September 30, 2019, 2018, 2017 and 2016. In addition, any loss years remain open to the extent that losses are available for carryover to future years. Therefore, the tax years ended 2010 through 2018 remain open for examination by the IRS. |
INVENTORIES
INVENTORIES | 12 Months Ended |
Sep. 30, 2019 | |
INVENTORIES | |
INVENTORIES | 5. INVENTORIES Inventories consist of the following: September 30, 2019 Goods-in-process $ 328,500 Raw Material 18,147 Total $ 346,647 As of September 30, 2019, no reserve for obsolescence was considered necessary. |
2015 PRIVATE PLACEMENT FINANCIN
2015 PRIVATE PLACEMENT FINANCING | 12 Months Ended |
Sep. 30, 2019 | |
2015 Private Placement Financing [Member] | |
Private Placement [Line Items] | |
2015 PRIVATE PLACEMENT FINANCING | 6. 2015 PRIVATE PLACEMENT FINANCING Beginning June 22, 2015 and through June 30, 2015, the Company entered into a series of substantially similar subscription agreements (each a “Subscription Agreement”) with 20 accredited investors (collectively, the “2015 Investors”) providing for the issuance and sale by the Company to the 2015 Investors, in a private placement, of an aggregate of 14,390,754 Units (“Unit”) at a purchase price of $0.22 per Unit (the “2015 Private Placement Financing”). Each Unit consisted of a share of Common Stock (the “2015 Shares”) and a Series D Warrant to purchase a share of Common Stock at an exercise price of $0.25 per share at any time prior to the fifth anniversary of the issuance date of the Series D Warrant (the “Series D Warrants” and the shares issuable upon exercise of the Series D Warrants, collectively, the “2015 Warrant Shares”). The Company did not engage any underwriter or placement agent in connection with the 2015 Private Placement Financing, and the aggregate gross proceeds raised by the Company in the 2015 Private Placement Financing totaled approximately $3,200,000. The Company’s obligation to issue and sell the 2015 Shares and the Series D Warrants and the corresponding obligation of the 2015 Investors to purchase such 2015 Shares and Series D Warrants were subject to a number of conditions precedent including, but not limited to, the amendment of the Company’s Series A Warrants and Series C Warrants to delete certain of the anti-dilution provisions contained therein, and other customary closing conditions. The conditions precedent were satisfied June 30, 2015 (the “Initial Closing Date”), and the Company conducted an initial closing (the “Initial Closing”) pursuant to which it sold and 19 of the 2015 Investors (the “ Initial Investors ”) purchased 13,936,367 Units at an aggregate purchase price of $3,066,000. On July 2, 2015, the Company conducted a second closing (the “Second Closing” and together with the Initial Closing, the “Closings”) pursuant to which it sold and one of the 2015 Investors purchased 454,387 Units at an aggregate purchase price of $100,000. On the Initial Closing Date, the Company entered into a registration rights agreement with the Initial Investors (the “2015 Registration Rights Agreement”), pursuant to which the Company was obligated, subject to certain conditions, to file with the Securities and Exchange Commission within 90 days after the closing of the 2015 Private Placement Financing one or more registration statements (any such registration statement, a “Resale Registration Statement”) to register the 2015 Shares and the 2015 Warrant Shares for resale under the Securities Act. The remaining 2015 Investor became a party to the 2015 Registration Rights Agreement upon the consummation of the Second Closing. The Company’s failure to satisfy certain filing and effectiveness deadlines with respect to a Resale Registration Statement and certain other requirements set forth in the 2015 Registration Rights Agreement may subject the Company to payment of monetary penalties. On October 27, 2015, we received from the SEC a Notice of Effectiveness of our Registration Statement related to the 2015 Private Placement Financing (the “2015 S‑1”) which satisfied some of our obligation to register these securities with the SEC. The 2015 Registration Rights Agreement also obligated the Company to register the resale of all securities covered by the 2015 Registration Rights Agreement on a short-form registration statement on Form S‑3 as soon as the Company becomes eligible to use Form S‑3. On October 31, 2016, the Company filed a resale registration statement on Form S‑3 (the “2015 S‑3”) to register the remaining securities covered by the 2015 Registration Rights Agreement, and the 2015 S‑3 was declared effective on November 23, 2016. Pursuant to Rule 429 promulgated under the Securities Act, the 2015 S‑3 contained a combined prospectus that covered the securities that remained unsold under the 2015 S‑1 and also registered those same securities under the 2015 S‑3. Under Rule 429, the 2015 S‑3 also constituted a post-effective amendment to the 2015 S‑1, which became effective on the date that the 2015 S‑3 was declared effective. Following each Closing, each 2015 Investor was also issued Series D Warrants to purchase shares of the Company’s Common Stock up to 100% of the 2015 Shares purchased by such 2015 Investor under such 2015 Investor’s Subscription Agreement. The Series D Warrants have an exercise price of $0.25 per share, are exercisable immediately after their issuance and have a term of exercise equal to five years after their issuance date. The number of shares of the Company’s Common Stock into which each of the Series D Warrants is exercisable and the exercise price therefore are subject to adjustment, as set forth in the Series D Warrants, including adjustments for stock subdivisions or combinations (by any stock split, stock dividend, recapitalization, reorganization, scheme, arrangement or otherwise). In addition, at any time during the term of the Series D Warrants, the Company may reduce the then-current exercise price to any amount and for any period of time deemed appropriate by the Board of the Company. During the year ended September 30, 2019, no Series D Warrants had been exercised. During the year ended September 30, 2018, Series D Warrants had been exercised on a cash basis for an aggregate issuance of 227,273 shares of the Company’s Common Stock resulting in gross proceeds to the Company of $56,818. As of September 30, 2019, up to 8,974,389 shares may be acquired upon the exercise of the Series D Warrants. Common Stock At the June 30, 2015 Initial Closing Date of the 2015 Private Placement Financing, the Company issued 13,936,367 shares of Common Stock. On July 2, 2015, the Company conducted the Second Closing pursuant to which it sold and one of the 2015 Investors purchased 454,387 shares of Common Stock. Equity Value of Warrants The Company accounted for the Series D Warrants relating to the aforementioned 2015 Private Placement Financing in accordance with ASC 815‑40, Derivatives and Hedging . Because the Series D Warrants are indexed to the Company’s stock, they are classified within stockholders’ equity (deficit) in the accompanying consolidated financial statements. |
2016 PRIVATE PLACEMENT FINANCIN
2016 PRIVATE PLACEMENT FINANCING | 12 Months Ended |
Sep. 30, 2019 | |
Private Placement 2016 [Member] | |
Private Placement [Line Items] | |
2016 PRIVATE PLACEMENT FINANCING | 7. 2016 PRIVATE PLACEMENT FINANCING Beginning May 24, 2016 and through May 26, 2016, we entered into a series of substantially similar subscription agreements (each a “2016 Subscription Agreement”) with 18 accredited investors (collectively, the “ 2016 Investors ”) providing for the issuance and sale by the Company to the 2016 Investors, in a private placement, of an aggregate of 9,418,334 Units at a purchase price of $0.36 per Unit (the “2016 Private Placement Financing”). Each Unit consisted of a share of Common Stock, and a Series E Warrant to purchase 0.75 shares of Common Stock at an exercise price of $0.4380 per share at any time prior to the fifth anniversary of the issuance date of the Series E Warrant (the “Series E Warrants” and the shares issuable upon exercise of the Series E Warrants, collectively, the “Series E Warrant Shares”). The exercise price of the Series E Warrants was set to equal the closing price of our Common Stock on the date of their issuance (May 26, 2016), which was $0.4380, and therefore the Series E Warrants were not issued at a discount to the market price of our Common Stock as of such date. The gross proceeds to Arch were approximately $3.4 million before deducting financing costs of approximately $281,000. The number of shares of Common Stock into which each of the Series E Warrants is exercisable and the exercise price therefor are subject to adjustment as set forth in the Series E Warrants, including adjustments for stock subdivisions or combinations (by any stock split, stock dividend, recapitalization, reorganization, scheme, arrangement or otherwise). In addition, (i) at any time during the term of the Series E Warrants, we may reduce the then-current exercise price to any amount and for any period of time deemed appropriate by our Board of Directors (the “Board ); and (ii) certain of the Series E Warrants provide that they shall not be exercisable in the event and to the extent that the exercise thereof would result in the holder of the Series E Warrant, together with its affiliates and any other persons whose beneficial ownership of Common Stock would be aggregated with the holder’s, would be deemed to beneficially own more than 4.99% of the Common Stock; provided, however , the holder, upon notice to us, may increase or decrease the ownership limitation, provided that any increase is limited to a maximum of 9.99% of the Company’s Common Stock, and any increase in the ownership limitation will not become effective until the 61 st day after delivery of such notice. We engaged Maxim Group LLC (“Maxim”) as our exclusive institutional investor placement agent in connection with the 2016 Private Placement Financing, and in consideration for the services provided by it, Maxim was entitled to receive cash fees equal to 8.2% of the gross proceeds received by us from certain institutional investors participating in the 2016 Private Placement Financing (the “Maxim Investors”), as well as reimbursement for all reasonable expenses incurred by it in connection with its engagement. We received gross proceeds of approximately $3,390,600 in the aggregate, of which approximately $2,084,000 was attributable to the Maxim Investors, resulting in a fee of approximately $171,000. On May 26, 2016, we entered into a registration rights agreement with the 2016 Investors (the “2016 Registration Rights Agreement”), pursuant to which we became obligated, subject to certain conditions, to file with the Securities and Exchange Commission (the “SEC”) within 45 days after the closing of the 2016 Private Placement Financing one or more registration statements (the “2016 S‑1”) to register the shares of Common Stock issued in the Closings and the Series E Warrant Shares for resale under the Securities Act of 1933, as amended (the “Securities Act”). As a result, we registered for resale under the 2016 S‑1 an aggregate of 16,482,082 shares of Common Stock, representing the 9,418,334 shares issued at the closing of the 2016 Private Placement Financing and the 7,063,748 shares underlying the Series E Warrants. On July 13, 2016, we received from the SEC a Notice of Effectiveness of the 2016 S‑1, which satisfied some of our obligation to register these securities with the SEC. The 2016 Registration Rights Agreement also obligated the Company to register the resale of all securities covered by the 2016 Registration Rights Agreement on a short-form registration statement on Form S‑3 as soon as the Company becomes eligible to use Form S‑3. On October 31, 2016, the Company filed a resale registration statement on Form S‑3 (the “2016 S‑3”) to register the remaining securities covered by the 2016 Registration Rights Agreement, and the 2016 S‑3 was declared effective on November 23, 2016. Pursuant to Rule 429 promulgated under the Securities Act, the 2016 S‑3 contained a combined prospectus that covered the securities that remained unsold under the 2016 S‑1 and also registered those same securities under the 2016 S‑3. Under Rule 429, the 2016 S‑3 also constituted a post-effective amendment to the 2016 S‑1, which became effective on the date that the 2016 S‑3 was declared effective. Following the Closing, each 2016 Investor was also issued Series E Warrants to purchase shares of the Company’s Common Stock up to 75% of the 2016 Shares purchased by such 2016 Investor under such 2016 Investor’s Subscription Agreement. The Series E Warrants have an exercise price of $0.438 per share, are exercisable immediately after their issuance and have a term of exercise equal to five years after their issuance date. The number of shares of the Company’s Common Stock into which each of the Series E Warrants is exercisable and the exercise price therefore are subject to adjustment, as set forth in the Series E Warrants, including adjustments for stock subdivisions or combinations (by any stock split, stock dividend, recapitalization, reorganization, scheme, arrangement or otherwise). In addition, at any time during the term of the Series E Warrants, the Company may reduce the then-current exercise price to any amount and for any period of time deemed appropriate by the Board of the Company. During the year ended September 30, 2019, no Series E Warrants had been exercised. During the year ended September 30, 2018, Series E Warrants had been exercised on a cash basis for an aggregate issuance of 15,000 shares of the Company’s Common stock resulting in gross proceeds to the Company of $6,570. As of September 30, 2019, up to 4,214,582 shares may be acquired upon the exercise of the Series E Warrants. Common Stock At May 26, 2016, the Closing Date of the 2016 Private Placement Financing, the Company issued 9,418,334 shares of Common Stock. Equity Value of Warrants The Company accounted for the Series E Warrants relating to the aforementioned 2016 Private Placement Financing in accordance with ASC 815‑40, Derivatives and Hedging . Because the Series E Warrants are indexed to the Company’s stock, they are classified within stockholders’ equity (deficit) in the accompanying consolidated financial statements. |
2017 REGISTERED DIRECT OFFERING
2017 REGISTERED DIRECT OFFERING | 12 Months Ended |
Sep. 30, 2019 | |
REGISTERED DIRECT OFFERING 2017 [Member] | |
REGISTERED DIRECT OFFERING [Line Items] | |
2017 REGISTERED DIRECT OFFERING | 8. 2017 REGISTERED DIRECT OFFERING On September 30, 2016, the Company filed a registration statement with the SEC utilizing a “shelf” registration process, which was subsequently declared effective by the SEC on October 20, 2016 (such registration statement, the “Shelf Registration Statement”). Under the Shelf Registration Statement, the Company may offer and sell any combination of its Common Stock, warrants, debt securities, subscription rights, and/or units comprised of the foregoing to raise up to $50,000,000 in gross proceeds. On February 20, 2017, the Company entered into Securities Purchase Agreement (the “2017 SPA”) with 6 accredited investors (collectively, the “2017 Investors”) providing for the issuance and sale by the Company to the 2017 Investors of an aggregate of 10,166,664 units at a purchase price of $0.60 per Unit in a registered offering (the “2017 Financing”). The securities comprising the units sold in the 2017 Financing were issued under the Shelf Registration Statement, and consisted of a share of Common Stock, and 0.55 of a Series F Warrant to purchase one share of Common Stock at an exercise price of $0.75 per share at any time prior to the fifth anniversary of the issuance date of the Series F Warrant subject to certain restrictions on exercise (the “2017 Warrants” and the shares issuable upon exercise of the 2017 Warrants, collectively, the “2017 Warrant Shares”). Provisions in the 2017 SPA restrict the Company’s ability to effect or enter into an agreement to effect any issuance by the Company or any of its subsidiaries of Common Stock or securities convertible, exercisable or exchangeable for Common Stock (or a combination of units thereof) involving a Variable Rate Transaction (as defined in the 2017 SPA) including, but not limited to, an equity line of credit or “At-the-Market” financing facility until the three lead investors in the 2017 Financing collectively own less than 20% of the Series F Warrants purchased by them pursuant to the 2017 SPA. The gross proceeds to Arch from the 2017 Financing, which closed on February 24, 2017, were approximately $6.1 million before deducting financing costs of approximately $112,000. The number of shares of the Company’s Common Stock into which each of the Series F Warrants is exercisable and the exercise price therefore are subject to adjustment, as set forth in the Series F Warrants, including adjustments for stock subdivisions or combinations (by any stock split, stock dividend, recapitalization, reorganization, scheme, arrangement or otherwise). In addition, at any time during the term of the Series F Warrants, the Company may reduce the then-current exercise price to any amount and for any period of time deemed appropriate by the Board of the Company. In addition, if the Company undergoes a change of control or is involved in a similar transaction, the holder may cause the Company or any successor entity to purchase its Series F Warrant for an amount of cash equal to $0.18 for each share of Common Stock underlying the Series F Warrant. As of September 30, 2019 and 2018, no Series F Warrants have been exercised. As of September 30, 2019, up to 5,591,664 shares may be acquired upon the exercise of the Series F Warrants. Common Stock At February 24, 2017, the Closing Date of the 2017 Financing, the Company issued 10,166,664 shares of Common Stock. Derivative Liabilities The Company accounted for the Series F Warrants relating to the aforementioned 2017 Financing in accordance with ASC 815‑10, Derivatives and Hedging . Since the Company may be required to purchase its Series F Warrants for an amount of cash equal to $0.18 for each share of Common Stock the underlying Series F Warrants are not classified within stockholders’ equity (deficit), they are recorded as liabilities at fair value. They are marked to market each reporting period through the consolidated statement of operations. On the Closing Date, the derivative liabilities were recorded at fair value of $2,996,110. Given that the fair value of the derivative liabilities was less than the net proceeds of the 2017 Financing of $5,987,122, the remaining proceeds of $2,991,012 were allocated to the Common Stock and additional paid-in capital. During the fiscal years ended September 30, 2019 and 2018, $274,404 and $2,156,629 was recorded to decrease the fair value of derivative, respectively. Fair Value Measurements Using Significant Unobservable Inputs September 30, September 30, (Level 3) 2019 2018 Beginning balance at beginning of year $ 1,274,404 $ 3,430,033 Issuances — — Adjustments to estimated fair value (274,404) (2,155,629) Ending balance at end of year $ $ 1,274,404 The derivative liabilities were valued as of, September 30, 2019 and September 30, 2018 using the Black Scholes Model with the following assumptions: September 30, September 30, 2019 2018 Closing price per share of common stock $ 0.24 $ 0.42 Exercise price per share $ 0.75 $ 0.75 Expected volatility 78.15 % 98.43 % Risk-free interest rate 1.60 % 2.88 % Dividend yield — — Remaining expected term of underlying securities (years) 2.37 3.38 |
2018 REGISTERED DIRECT OFFERING
2018 REGISTERED DIRECT OFFERING | 12 Months Ended |
Sep. 30, 2019 | |
Registered Direct Offering 2018 [Member] | |
REGISTERED DIRECT OFFERING 2018 [Line Items] | |
2018 REGISTERED DIRECT OFFERING | 9. 2018 REGISTERED DIRECT OFFERING On June 28, 2018, the Company entered into a Securities Purchase Agreement (“2018 SPA”) with 8 accredited investors (“2018 Investors”) providing for the issuance and sale by the Company to the 2018 Investors of an aggregate of 9,070,000 units at a purchase price of $0.50 per Unit in a registered offering (“2018 Financing”). The securities comprising the units sold in the 2018 Financing were issued under the Shelf Registration Statement, and consisted of a share of Common Stock, and 0.75 of a Series G Warrant to purchase one share of Common Stock at an exercise price of $0.70 per share at any time prior to the fifth anniversary of the issuance date of the Series G Warrant subject to certain restrictions on exercise (“2018 Warrants”) and the shares issuable upon exercise of the 2018 Warrants, (“2018 Warrant Shares”). On June 30, 2018 the shares were recorded as subscribed but not issued. On July 2, 2018, the Closing Date of the 2018 Financing, the Company issued 9,070,000 shares of Common Stock. The 2018 SPA contains certain restrictions in the Company’s ability to conduct subsequent sales of its equity securities. In particular, subject to certain customary exemptions, from June 28, 2018 until 90 days after July 2, 2018 (i.e., September 30, 2019), neither the Company nor any subsidiary shall issue, enter into any agreement to issue or announce the issuance or proposed issuance of any shares of Common Stock or securities convertible, exercisable or exchangeable for Common Stock. Similarly, until such time the three lead investors collectively own less than 20% of the Series G Warrants purchased by them pursuant to the 2018 SPA, the Company is prohibited from effecting or entering into an agreement to effect any issuance by the Company or any of its subsidiaries of Common Stock or securities convertible, exercisable or exchangeable for Common Stock (or a combination of units thereof) involving a Variable Rate Transaction (as defined in the 2018 SPA) including, but not limited to, an equity line of credit or “At-the-Market” financing facility. The gross proceeds to Arch from the 2018 Financing, which were received as of June 29, 2018, were approximately $4.5 million before deducting financing costs of approximately $74,000. The number of shares of the Company’s Common Stock into which each of the Series G Warrants is exercisable and the exercise price therefore are subject to adjustment, as set forth in the Series G Warrants, including adjustments for stock subdivisions or combinations (by any stock split, stock dividend, recapitalization, reorganization, scheme, arrangement or otherwise). In addition, if the Company undergoes a change of control or is involved in a similar transaction, the holder may cause the Company or any successor entity to purchase its Series G Warrant for an amount of cash equal to $0.11 for each share of Common Stock underlying the Series G Warrant. As of September 30, 2019, no Series G Warrants have been exercised. As of September 30, 2019, up to 6,802,500 shares may be acquired upon the exercise of the Series G Warrants. Common Stock On June 30, 2018 the shares were recorded as subscribed but not issued. On July 2, 2018, the Closing Date of the 2018 Financing, the Company issued 9,070,000 shares of Common Stock. Derivative Liabilities The Company accounted for the Series G Warrants relating to the aforementioned 2018 Financing in accordance with ASC 815‑10, Derivatives and Hedging . Since the Company may be required to purchase its Series G Warrants for an amount of cash equal to $0.11 for each share of Common Stock and the underlying Series G Warrants are not classified within stockholders’ equity (deficit), they are recorded as liabilities at fair value. They are marked to market each reporting period through the consolidated statement of operations. On the Closing Date, the derivative liabilities were recorded at fair value of $2,397,454. Given that the fair value of the derivative liabilities were less than the net proceeds of the 2018 Financing of $4,461,248, the remaining proceeds of $2,063,794 were allocated to the Common Stock Subscribed but Unissued and additional paid-in capital. On July 2, 2018 the Common Stock subscribed but Unissued was recorded as Common Stock. During the fiscal years ending September 30, 2019 and 2018, $1,169,073 and $480,106, respectively was recorded to decrease the fair value of derivative. Fair Value Measurements Using Significant Unobservable Inputs September 30, September 30, (Level 3) 2019 2018 Beginning balance at beginning of year $ 1,917,348 $ — Issuances — 2,397,454 Adjustments to estimated fair value (1,169,073) (480,106) Ending balance at end of year $ 748,275 $ 1,917,348 The derivative liabilities were valued as of September 30, 2019, September 30, 2018 and June 30, 2018 using the Black Scholes Model with the following assumptions: September 30, September 30, June 30, 2019 2018 2018 Closing price per share of common stock $ 0.24 $ 0.42 $ 0.48 Exercise price per share $ 0.70 $ 0.70 $ 0.70 Expected volatility 78.72 % 100.18 % 105.94 % Risk-free interest rate 1.56 % 2.94 % 2.73 % Dividend yield — — — Remaining expected term of underlying securities (years) 3.73 4.74 5.00 |
2019 REGISTERED DIRECT OFFERING
2019 REGISTERED DIRECT OFFERING | 12 Months Ended |
Sep. 30, 2019 | |
Registered Direct Offering 2019 [Member] | |
REGISTERED DIRECT OFFERING 2019 [Line Items] | |
2019 REGISTERED DIRECT OFFERING | 10. 2019 REGISTERED DIRECT OFFERING On May 12, 2019, the Company entered into a Securities Purchase Agreement ("2019 SPA") with 5 accredited investors ("2019 Investors") providing for the issuance and sale by the Company to the 2019 Investors of an aggregate of 8,615,384 units at a purchase price of $0.325 per Unit in a registered offering ("2019 Financing"). The securities comprising the units sold in the 2019 Financing were issued under the Shelf Registration Statement, and consisted of a share of Common Stock, and a Series H Warrant to purchase one share of Common Stock at an exercise price of $0.40 per share at any time prior to the fifth anniversary of the issuance date of the Series H Warrant subject to certain restrictions on exercise ("2019 Warrants") and the shares issuable upon exercise of the 2019 Warrants, ("2019 Warrant Shares"). As of May 14, 2019, the Company recorded the 8,615,384 shares as Common Stock. The gross proceeds to Arch from the 2019 Financing, which were received as of May 13, 2019, were approximately $2.8 million before deducting financing costs of approximately $51,200. The number of shares of the Company's Common Stock into which each of the Series H Warrants is exercisable and the exercise price therefore are subject to adjustment, as set forth in the Series H Warrants, including adjustments for stock subdivisions or combinations (by any stock split, stock dividend, recapitalization, reorganization, scheme, arrangement or otherwise). In addition, if the Company undergoes a change of control or is involved in a similar transaction, the holder may cause the Company or any successor entity to purchase its Series H Warrant for an amount of cash equal to $0.0533 for each share of Common Stock underlying the Series H Warrant. As of September 30, 2019, no Series H Warrants have been exercised. As of September 30, 2019, up to 8,615,384 shares may be acquired upon the exercise of the Series H Warrants. Common Stock At May 14, 2019 the Closing Date of the 2019 Financing, the Company issued 8,615,384 shares of Common Stock. Derivative Liabilities The Company accounted for the Series H Warrants relating to the aforementioned 2019 Financing in accordance with ASC 815-10, Derivatives and Hedging . Since the Company may be required to purchase its Series H Warrants for an amount of cash equal to $0.0533 for each share of Common Stock and the underlying Series H Warrants are not classified within stockholders' equity (deficit), they are recorded as liabilities at fair value. They are marked to market each reporting period through the consolidated statement of operations. On the Closing Date, the derivative liabilities were recorded at fair value of $1,628,113. Given that the fair value of the derivative liabilities were less than the net proceeds of the 2019 Financing of $2,748,821, the remaining proceeds of $1,120,708 were allocated to the Common Stock and additional-paid-in-capital. During the fiscal year ended September 30, 2019, $380,698 was recorded to decrease the fair value of derivative. Fair Value Measurements Using Significant Unobservable Inputs September 30, (Level 3) 2019 Beginning balance at beginning of year $ — Issuances 1,628,113 Adjustments to estimated fair value (380,698) Ending balance at end of year $ 1,247,415 The derivative liabilities were valued as of September 30, 2019 and May 14, 2019 using the Black Scholes Model with the following assumptions: September 30, May 14, 2019 2019 Closing price per share of common stock $ 0.24 $ 0.283 Exercise price per share $ 0.40 $ 0.40 Expected volatility 92.11 % 93.44 % Risk-free interest rate 1.55 % 2.20 % Dividend yield — — Remaining expected term of underlying securities (years) 4.61 5.00 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 12 Months Ended |
Sep. 30, 2019 | |
STOCK-BASED COMPENSATION | |
STOCK-BASED COMPENSATION | 11. STOCK-BASED COMPENSATION 2013 Stock Incentive Plan On June 18, 2013, the Company established the 2013 Stock Incentive Plan (the “2013 Plan”). Under the 2013 Plan, during the fiscal year ended September 30, 2019, a maximum number of 25,114,256 shares of the Company’s authorized and available common stock could be issued in the form of options, stock appreciation rights, sales or bonuses of restricted stock, restricted stock units or dividend equivalent rights, and an award may consist of one such security or benefit, or two or more of them in any combination or alternative. The 2013 Plan provides that on the first business day of each fiscal year commencing with fiscal year 2014, the number of shares of our common stock reserved for issuance under the 2013 Plan for all awards except for incentive stock option awards will be subject to increase by an amount equal to the lesser of (A) 3,000,000 Shares, (B) four (4) percent of the number of shares outstanding on the last day of the immediately preceding fiscal year of the Company, or (C) such lesser number of shares as determined by the Company’s Board of Directors (the “Board”). The exercise price of each option shall be the fair value as determined in good faith by the Board at the time each option is granted. On October 1, 2019, the aggregate number of authorized shares under the Plan was further increased by 3,000,000 shares to a total of 28,114,256 shares. As of September 30, 2019, a total of 16,494,212 options had been issued to employees and directors and 7,027,500 options had been issued to consultants. The exercise price of each option has either been equal to the closing price of a share of our common stock on the date of grant or has been determined to be in compliance with Internal Revenue Section 409A. Share-based awards During the fiscal year ended September 30, 2019, the Company granted 925,000 options to employees and directors and 1,000,000 options to consultants to purchase shares of common stock under the 2013 Plan . The Company recognizes compensation expense for stock option awards on a straight-line basis over the applicable service period of the award. The service period is generally the vesting period, with the exception of options granted subject to a consulting agreement, whereby the option vesting period and the service period are defined pursuant to the terms of the consulting agreement. Share-based compensation expense for awards granted during the fiscal year ended September 30, 2019 was based on the fair market value at period end or grant date fair value estimated using the Black-Scholes Option Pricing Model. The following assumptions were used to calculate the fair value of share based compensation for the fiscal year ended September 30, 2019; expected volatility, 83.27% - 119.44%, risk-free interest rate, 1.47% - 3.23%, expected forfeiture rate, 0%, expected dividend yield, 0%, expected term, 6.25 years. Expected price volatility is the measure by which the Company’s stock price is expected to fluctuate during the expected term of an option. The Company exited shell company status on June 26, 2013. In situations where a newly public entity has limited historical data on the price of its publicly traded shares and no other traded financial instruments, authoritative guidance is provided on estimating this assumption by basing its expected volatility on the historical, expected, or implied volatility of similar entities whose share option prices are publicly available. In making the determination as to similarity, the guidance recommends the consideration of industry, stage of life cycle, size and financial leverage of such other entities. Prior to January 1, 2018, the Company’s expected volatility is derived from the historical daily change in the market price of its common stock since it exited shell company status, as well as the historical daily change in the market price for the peer group as determined by the Company. Effective January 1, 2018, the Company’s expected volatility is derived from the historical daily change in the market price of its common stock since it exited shell company status. For so called “plain vanilla” options granted to employees, the expected term of the options is based upon the simplified method as defined in ASC 718‑10‑S99 which averages an award’s weighted-average vesting period and the contractual term for share options. The Company will continue to use the simplified method until it has the historical data necessary to provide a reasonable estimate of expected life in accordance with ASC Topic 718. The Company’s estimation of the expected term for stock options not subject to the simplified method is based upon the contractual term of the option award. For the purposes of estimating the fair value of stock option awards, the risk-free interest rate used in the Black-Scholes calculation is based on the prevailing U.S. Treasury yield. The Company has never paid any dividends on its common stock and does not anticipate paying dividends on its common stock in the foreseeable future. Stock-based compensation expense recognized in the Company’s consolidated statements of operations is based on awards ultimately expected to vest, reduced for estimated forfeitures. Authoritative guidance requires forfeitures to be estimated at the time of grant, and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Since the Company has a limited history of occurrences of stock option forfeitures and a small number of employees it continues to estimate the forfeiture rate of its outstanding stock options as zero, but will continually evaluate its historical data as a basis for determining expected forfeitures. Common Stock Options Stock compensation activity under the 2013 Plan for the year ended September 30, 2019 follows: Weighted Weighted Average Option Average Remaining Aggregate Shares Exercise Contractual Intrinsic Outstanding Price Term (years) Value Outstanding at September 30, 2018 15,684,210 $ 0.40 3.89 $ 1,142,521 Awarded 1,925,000 $ 0.38 — — Exercised (1,525,000) $ 0.37 — — Forfeited/Cancelled (276,299) $ 0.41 — — Outstanding at September 30, 2019 15,807,911 $ 0.40 3.14 $ 142,810 Vested 13,795,584 $ 0.39 3.49 $ 142,810 Vested and expected to vest at September 30, 2019 15,807,911 $ 0.40 3.14 $ 142,810 As of September 30, 2019, 4,190,443 shares are available for future grants under the 2013 Plan. Share-based compensation expense recorded in the Company’s Consolidated Statements of Operations for the years ended September 30, 2019 and 2018 resulting from stock options awarded to the Company’s employees, directors and consultants was approximately $830,000 and $913,000, respectively. Of this amount during the years ended September 30, 2019 and 2018, $347,000 and $349,000, respectively, was recorded to research and development expenses, and $483,000 and $564,000, respectively was recorded in general and administrative expenses in the Company’s Consolidated Statements of Operations. During the year ended September 30, 2019, 87,567 stock options awarded under the 2013 Stock Incentive Plan were exercised for cash resulting in proceeds to the Company of $32,400. During the year ended September 30, 2018, 210,000 stock options awarded under the 2013 Stock Incentive Plan were exercised for cash resulting in proceeds to the Company of $77,700 During the year ended September 30, 2019, 1,437,433 stock options awarded under the 2013 Stock Incentive Plan were exercised on a cashless basis for an aggregate issuance of 477,269 shares of the Company’s Common Stock. During the year ended September 30, 2018, 225,000 stock options awarded under the 2013 Stock Incentive Plan were exercised on a cashless basis for an aggregate issuance of 116,883 shares of the Company’s Common Stock. As of September 30, 2019, there is approximately $331,000 of unrecognized compensation expense related to unvested stock-based compensation arrangements granted under the 2013 Plan. That cost is expected to be recognized over a weighted average period of 1.52 years. Restricted Stock On July 19, 2018, the Company awarded 745,000 shares of Restricted Stock to members of the Board of Directors and management and 220,000 shares of Restricted Stock to Dr. Dhillon in his capacity as a consultant. The shares subject to this grant are awarded under the 2013 Plan and 100% shall fully vest on the second anniversary of the date of grant. In addition, in the event of a Change of Control (as such term is defined in the 2013 Plan), 100% of the grants will immediately vest. On September 5, 2018, the Company awarded 100,000 shares of Restricted Stock to a consultant. The shares subject to this grant are awarded under the 2013 Plan and 50,000 vest 90 days from the date of the award and 50,000 vest 365 days from the date of the award. In addition, in the event of a Change of Control (as such term is defined in the 2013 Plan), 100% of the grants will immediately vest. On February 3, 2017, the Company awarded 1,750,000 shares of Restricted Stock to members of the Board of Directors and management. The shares subject to this grant are awarded under the 2013 Plan and 100% shall fully vest on the second anniversary of the date of grant. In addition, in the event of a Change of Control (as such term is defined in the 2013 Plan), 100% of the grants will immediately vest. On August 9, 2016, we entered into a consulting agreement with Acorn Management Partners, LLC (“Acorn”). In consideration of the services to be provided under and in accordance with the terms of the consulting agreement, we issued (i) 225,000 shares of Common Stock under our 2013 Stock Incentive Plan at an agreed upon value of $0.72 per share, which was the closing price of our common stock on August 9, 2016; and (ii) an option under our 2013 Stock Incentive Plan to purchase up to 375,000 shares of Common Stock at an exercise price of price of $0.72 per share, in each case to John R. Exley, Acorn’s Chief Executive Officer and the party designated by Acorn to receive its shares and option. The shares and option are subject to time-based vesting restrictions. Of the 225,000 shares of Common Stock granted to Mr. Exley, 75,000 vest 90 days from the date of the award, 75,000 vest 120 days from the date of the award and the remaining 75,000 shares are scheduled to vest 150 days from the date of the award. Of the stock options to purchase up to 375,000 shares of Common Stock awarded to Mr. Exley, 125,000 vest 90 days from the date of the award, 125,000 vest 120 days from the date of the award and the remaining 125,000 shares are scheduled to vest 150 days from the date of the award. The issuance and sale of the shares of Common Stock and option to Acorn has not been registered under the Securities Act, and such securities may not be offered or sold in the United States absent registration under or exemption from the Securities Act and any applicable state securities laws. The securities were issued and sold in reliance upon an exemption from registration afforded by Section 4(a)(2) of the Securities Act based on the following facts: Acorn has represented that it is an accredited investor as defined in Regulation D promulgated under the Securities Act, that it is acquiring the securities for investment only and not with a view towards, or for resale in connection with, a distribution thereof in violation of applicable securities laws; that it understood that the securities would be issued as restricted securities and as a result, it must bear the economic risk of its investment in the securities for an indefinite period of time. Restricted stock activity in shares under the 2013 Plan for the year ended September 30, 2019 and 2018 follows: September 30, September 30, 2019 2018 Non Vested at beginning of year 2,815,000 1,750,000 Awarded — 1,065,000 Vested (1,850,000) — Forfeited — — Non Vested at end of year 965,000 2,815,000 The weighted average restricted stock award date fair value information for the year ended September 30, 2019 and 2018 follows: September 30, September 30, 2019 2018 Non Vested at beginning of year $ 0.57 $ 0.65 Awarded — 0.43 Vested 0.64 — Forfeited — — Non Vested at end of year $ 0.43 $ 0.57 Non-employee restricted shares subject to vesting are revalued at each vesting date and at the end of the reporting period, with all changes in fair value recorded as stock-based compensation expense. For the years ended September 30, 2019 and 2018 compensation expense recorded for the restricted stock awards was approximately $397,000 and $600,000, respectively. |
RESTRICTED STOCK AWARDED OUTSID
RESTRICTED STOCK AWARDED OUTSIDE THE 2013 STOCK INCENTIVE PLAN | 12 Months Ended |
Sep. 30, 2019 | |
RESTRICTED STOCK AWARDED OUTSIDE THE 2013 STOCK INCENTIVE PLAN | |
RESTRICTED STOCK AWARDED OUTSIDE THE 2013 STOCK INCENTIVE PLAN | 12. RESTRICTED STOCK AWARDED OUTSIDE THE 2013 STOCK INCENTIVE PLAN On May 3, 2016, the Company awarded 2,000,000 shares of Restricted Stock to members of the Board of Directors and management in a private placement in reliance upon an exemption from registration afforded by Section 4(a)(2) of the Securities Act. The shares subject to this grant are outside the 2013 Plan and 100% shall fully vest on the second anniversary of the date of grant. On May 1, 2018, the vesting date for 1,767,000 shares was amended to November 2018. In addition, in the event of a Change of Control (as such term is defined in the 2013 Plan), 100% of the grants will immediately vest. During the fiscal years ended September 30, 2019 and 2018, 1,767,000 and 233,000 shares of restricted stock, respectively, awarded outside the 2013 Plan vested. Restricted Stock activity in shares for the years ended September 30, 2019 and 2018 is as follows: September 30, September 30, 2019 2018 Non Vested at beginning of year 1,767,000 2,000,000 Awarded — — Vested (1,767,000) (233,000) Forfeited — — Non Vested at end of year — 1,767,000 The weighted average restricted stock award date fair value information for the years ended September 30, 2019 and 2018 follows: September 30, September 30, 2019 2018 Non Vested at beginning of year $ 0.39 $ 0.39 Awarded — — Vested 0.39 — Forfeited — — Non Vested at end of year $ — $ 0.39 For the years ended September 30, 2019 and 2018, compensation expense recorded for the restricted stock awards was approximately $0 and $229,000, respectively. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Sep. 30, 2019 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 13. COMMITMENTS AND CONTINGENCIES In the ordinary course of business, the Company enters into various agreements containing standard indemnification provisions. The Company’s indemnification obligations under such provisions are typically in effect from the date of execution of the applicable agreement through the end of the applicable statute of limitations. The aggregate maximum potential future liability of the Company under such indemnification provisions is uncertain. As of September 30, 2019 and 2018, no amounts have been accrued related to such indemnification provisions. From time to time, the Company may be exposed to litigation in connection with its operations. The Company’s policy is to assess the likelihood of any adverse judgments or outcomes related to legal matters, as well as ranges of probable losses. MIT Licensing Agreement In December 2007, the Company entered into a license agreement with MIT pursuant to which the Company acquired an exclusive world-wide license to develop and commercialize technology related to self-assembling peptide compositions, and methods of making and using such compositions in medical and non-medical applications, including claims that cover the Company’s proposed products and methods of use thereof. The license also provides non-exclusive rights to additional intellectual property in the fields that cover the Company’s proposed products and methods of use thereof, in order to provide freedom to operate. The license provides the Company a right to sublicense the exclusively licensed intellectual property. The Company has not sublicensed the exclusively licensed intellectual property to any party for any field. In exchange for the licenses granted in the agreement, the Company has paid MIT license maintenance fees and patent prosecution costs. The Company paid license maintenance fees of $50,000 to MIT in the fiscal years ended September 30, 2019 and 2018. For the years ended September 30, 2019 and 2018, the annual MIT license maintenance fees of $50,000 are included in accrued expenses and other liabilities on the Consolidated Balance Sheets. The license maintenance fees and patent prosecution costs cover the contract year beginning January 1 through December 31. Annual license maintenance obligations extend through the life of the patents. In addition, MIT is entitled to royalties on applicable future product sales, if any. The annual payments may be applied towards royalties payable to MIT for that year for product sales. The Company is obligated to indemnify MIT and related parties from losses arising from claims relating to the exercise of any rights granted to the Company under the license, with certain exceptions. The maximum potential amount of future payments the Company could be required to make under this provision is unlimited. The Company considers there to be a low performance risk as of September 30, 2019. The agreement expires upon the expiration or abandonment of all patents that are issued and licensed to the Company by MIT under such agreement. The Company expects that patents will be issued from presently pending U.S. and foreign patent applications. Any such patent will have a term of 20 years from the filing date of the underlying application. MIT may terminate the agreement immediately, if the Company ceases to carry on its business, if any nonpayment by the Company is not cured or the Company commits a material breach that is not cured. The Company may terminate the agreement for any reason upon six months’ notice to MIT. Leases We do not own any real property. In October 2013, we entered into a one and one-half year operating sublease agreement pursuant to which we leased the office space of our relocated headquarters in Wellesley, Massachusetts for a base annual rent equal to $5,031 per month. In April 2015, we moved our corporate offices to a property in Framingham, Massachusetts. We entered into a month-to-month operating lease agreement, pursuant to which we are obligated to pay monthly rent of $2,000, with a minimum six month commitment. During July 2017,we entered into a three year operating lease commencing October 1, 2017 and ending on September 30, 2020 at our current location. Pursuant to which we are obliged to pay annual rent of $38,400 during the first year, $39,600 during the second year and $42,000 during the third year. We are no longer party to the October 2013 lease, and we believe our present offices are suitable for our current and planned near-term operations. For the fiscal year ending September 30, 2020 the Company's annual lease commitment is $42,000. |
SELECTED QUARTERLY FINANCIAL DA
SELECTED QUARTERLY FINANCIAL DATA | 12 Months Ended |
Sep. 30, 2019 | |
SELECTED QUARTERLY FINANCIAL DATA | |
SELECTED QUARTERLY FINANCIAL DATA | 14. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) The following table provides selected quarterly financial data for the fiscal years ended September 30, 2019 and 2018: Quarters Ended December 31, 2018 March 31, 2019 June 30, 2019 September 30, 2019 Net sales $ — $ — $ — $ — Gross profit $ — $ — $ — $ — Operating loss $ (1,767,824) $ (1,507,366) $ (1,572,261) $ (1,524,305) Net loss $ (2,600,237) $ 169,962 $ (1,289,162) $ (828,144) Net income (loss) per share - basic and diluted $ (0.02) $ — $ (0.01) $ — Weighted average shares - basic 161,057,300 163,285,738 168,396,553 172,575,820 Weighted average shares - diluted 161,057,300 168,620,980 168,396,553 172,575,820 Quarters Ended December 31, 2017 March 31, 2018 June 30, 2018 September 30, 2018 Net sales $ — $ — $ — $ — Gross profit $ — $ — $ — $ — Operating loss $ (1,582,373) $ (2,013,845) $ (1,620,134) $ (2,233,415) Net loss $ 389,176 $ (1,555,361) $ (2,212,640) $ (1,435,207) Net (loss) per share - basic and diluted $ — $ (0.01) $ (0.01) $ (0.01) Weighted average shares - basic 150,144,575 150,302,013 150,550,189 159,778,165 Weighted average shares - diluted 163,527,032 150,302,013 150,550,189 159,778,165 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Sep. 30, 2019 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | 15. SUBSEQUENT EVENTS The Company evaluated all events or transactions that occurred through November 18, 2019, the date which these consolidated financial statements were available to be issued. On October 17, 2019, the Company announced the pricing of registered direct offering of 14,285,714 units, each unit consisting of a share of the Company's common stock, and a Series I Warrant ("Series I Warrant") to purchase a share of our common stock for the combined purchase price of $0.175 per unit. The Series I Warrants have an exercise price of $0.22 per share and are exercisable for a period of five years. The offering closed on October 18, 2019. The gross proceeds to Arch from the 2019 Financing were approximately $2.5 million before deducting financing costs of approximately $312,000. Pursuant to the Engagement Agreement, the Company also agreed to issue to the Placement Agent, or its designees, warrants to purchase up to 1,071,429 shares (the "Placement Agent Warrants"). The Placement Agent Warrants have substantially the same terms as the Series I Warrants, except that the exercise price of the Placement Agent Warrants is $0.21875 per share and the term of the Placement Agent Warrants is five years . |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Sep. 30, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation | Basis of Presentation The consolidated financial statements include the accounts of Arch Therapeutics, Inc. and its wholly owned subsidiary, Arch Biosurgery, Inc., a biotechnology company. All intercompany accounts and transactions have been eliminated in consolidation. The Company is in the development stage and is devoting substantially all of its efforts to developing technologies, raising capital, establishing customer and vendor relationships, and recruiting and retaining new employees. |
Use of Estimates | Use of Estimates Management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. |
Recently Issued Accounting Guidance | Recently Issued Accounting Guidance Accounting Standards Update (ASU) 2018‑07, “Compensation—Stock Compensation (Topic 718) Improvements to Nonemployee Share-Based Payment Accounting” was issued by the Financial Accounting Standards Board (FASB) in June 2018. The purpose of this amendment is to address aspects of the accounting for nonemployee share-based payment transactions. The amendments in this Update are effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. The Company does not believe that this guidance will have a material impact on its consolidated results of operations, financial position or disclosures. ASU 2016‑15, “Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Payments” was issued in August 2016. The purpose of this amendment is to address eight specific cash flow issues with the objective of reducing the existing diversity in practice. The amendments in this Update are effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is permitted. The Company adopted ASU 2016‑15 during our first quarter of fiscal year 2019, which had no impact on our consolidated financial statements, and will apply the new guidance in future periods. ASU 2016‑02, “Leases (Topic 842)” was issued by the FASB in February 2016. The purpose of this amendment is to recognize most operating leases by recording a right-to-use asset and corresponding lease liability. The amendments in this Update are effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. The Company does not believe that this guidance will have a material impact on its consolidated results of operations, financial position or disclosures. |
Cash | Cash The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. The Company had no cash equivalents as of September 30, 2019 and September 30, 2018. |
Inventories | Inventories Inventories are stated at the lower of cost or net realizable value. The cost of inventories comprises expenditures incurred in acquiring the inventories, the cost of conversion and other costs incurred in bringing them to their existing location and condition. The cost of raw materials, work-in-progress and finished goods and other products are determined on a First in First out (FiFo) basis. When determining net realizable value, appropriate consideration is given to obsolescence, excessive levels, deterioration, and other factors in evaluating net realizable value. As of September 30, 2019, no reserve for obsolescence was considered necessary. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of cash. The Company maintains its cash in bank deposits accounts, which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts. The Company believes it is not exposed to any significant credit risk on cash. |
Deferred Offering Costs | Deferred Offering Costs Deferred Offering Costs consist of fees and expenses incurred in connection with the public offering and sale of the Company’s common stock, including legal, accounting, printing and other related expenses. These costs are netted against the proceeds received as a reduction to additional paid-in capital. |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost and depreciated using the straight-line method over the estimated useful life of the related asset. Upon sale or retirement, the cost and accumulated depreciation are eliminated from their respective accounts, and the resulting gain or loss is included in income or loss for the period. Repair and maintenance expenditures are charged to expense as incurred. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Long-lived assets are reviewed for impairment when circumstances indicate the carrying value of an asset may not be recoverable in accordance with ASC 360, Property, Plant and Equipment . For assets that are to be held and used, impairment is recognized when the estimated undiscounted cash flows associated with the asset or group of assets is less than their carrying value. If impairment exists, an adjustment is made to write the asset down to its fair value, and a loss is recorded as the difference between the carrying value and fair value. Fair values are determined based on quoted market values, discounted cash flows or internal and external appraisals, as applicable. Assets to be disposed of are carried at the lower of carrying value or estimated net realizable value. For the years ended September 30, 2019 and 2018 there has not been any impairment of long-lived assets. |
Income Taxes | Income Taxes In accordance with FASB ASC 740, Income Taxes , we recognize deferred tax assets and liabilities for the expected future tax consequences or events that have been included in our consolidated financial statements and/or tax returns. Deferred tax assets and liabilities are based upon the differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities and for loss and credit carryforwards using enacted tax rates expected to be in effect in the years in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized. We provide reserves for potential payments of tax to various tax authorities related to uncertain tax positions when management determines that it is probable that a loss will be incurred related to these matters and the amount of the loss is reasonably determinable. On December 22, 2017, the Tax Cuts and Jobs Act (“TCJA”) was signed into United States law. The TCJA includes a number of changes to existing tax law, including, among other things, a permanent reduction in the federal corporate income tax rate to a flat rate of 21%, effective January 1, 2018, as well as the elimination of net operating loss carrybacks for losses arising in taxable years beginning after December 31, 2017. Further, operating losses arising in tax years after December 31, 2017, are carried forward indefinitely. Due to the TCJA, the Company’s deferred tax assets and liabilities recognized prior to 2017 were revalued at the newly enacted tax rates, which resulted in a corresponding adjustment in the valuation allowance. |
Research and Development | Research and Development The Company expenses internal and external research and development costs, including costs of funded research and development arrangements, in the period incurred. |
Accounting for Stock-Based Compensation | Accounting for Stock-Based Compensation The Company accounts for employee stock-based compensation in accordance with the guidance of FASB ASC Topic 718, Compensation-Stock Compensation (“FASB ASC Topic 718”), which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the consolidated financial statements based on their fair values. The Company accounts for non-employee stock-based compensation in accordance with the guidance of FASB ASC Topic 505, Equity (“FASB ASC Topic 505”), which requires that companies recognize compensation expense based on the estimated fair value of options granted to non-employees over their vesting period, which is generally the period during which services are rendered by such non-employees. FASB ASC Topic 505 requires the Company to re-measure the fair value of stock options issued to non- employee at each reporting period during the vesting period or until services are complete. In accordance with FASB ASC Topic 718, the Company has elected to use the Black-Scholes option pricing model to determine the fair value of options granted and recognizes the compensation cost of share-based awards on a straight-line basis over the vesting period of the award. The determination of the fair value of share-based payment awards utilizing the Black-Scholes model is affected by the fair value of the common stock and a number of other assumptions, including expected volatility, expected life, risk-free interest rate and expected dividends. Prior to January 1, 2018, the Company's expected volatility is derived from the historical daily change in the market price of its common stock since it exited shell company status, as well as the historical daily change in the market price for the peer group as determined by the Company. Effective January 1, 2018, the Company's expected volatility is derived from the historical daily change in the market price of its common stock since it exited shell company status. The life term for awards uses simplified method for all “plain vanilla” options, as defined in ASC 718‑10‑S99 and the contractual term for all other employee and non-employee awards. The risk-free interest rate assumption is based on observed interest rates appropriate for the terms of our awards. The dividend yield assumption is based on history and the expectation of paying no dividends. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Stock-based compensation expense, when recognized in the consolidated financial statements, is based on awards that are ultimately expected to vest. |
Fair Value Measurements | Fair Value Measurements The Company measures both financial and nonfinancial assets and liabilities in accordance with FASB ASC Topic 820, Fair Value Measurements and Disclosures , including those that are recognized or disclosed in the consolidated financial statements at fair value on a recurring basis. The standard created a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels as follows: Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and Level 3 inputs are unobservable inputs that reflect the Company’s own views about the assumptions market participants would use in pricing the asset or liability. At September 30, 2019 and September 30, 2018, the carrying amounts of cash, accounts payable, accrued expenses and other liabilities, approximate fair value because of their short-term nature. |
Derivative Liabilities | Derivative Liabilities The Company accounts for its warrants and other derivative financial instruments as either equity or liabilities based upon the characteristics and provisions of each instrument, in accordance with FASB ASC Topic 815, Derivatives and Hedging . Warrants classified as equity are recorded at fair value as of the date of issuance on the Company’s consolidated balance sheets and no further adjustments to their valuation are made. Warrants classified as derivative liabilities and other derivative financial instruments that require separate accounting as liabilities are recorded on the Company’s consolidated balance sheets at their fair value on the date of issuance and will be revalued on each subsequent balance sheet date until such instruments are exercised or expire, with any changes in the fair value between reporting periods recorded as other income or expense. Management estimates the fair value of these liabilities using option pricing models and assumptions that are based on the individual characteristics of the warrants or instruments on the valuation date, as well as assumptions for future financings, expected volatility, expected life, yield, and risk-free interest rate. |
Subsequent Events | Subsequent Events The Company evaluated all events or transactions that occurred commencing from October 1, 2019 and ending on November 18, 2019 the date which these consolidated financial statements were issued. The Company disclosed material subsequent events in Note 15. |
Going Concern Basis of Accounting | Going Concern Basis of Accounting As reflected in the consolidated financial statements, the Company has an accumulated deficit, has suffered significant net losses and negative cash flows from operations, has not generated operating revenues, and has limited working capital. The continuation of our business as a going concern is dependent upon raising additional capital and eventually attaining and maintaining profitable operations. In particular, as of September 30, 2019, the Company will be required to raise additional capital, obtain alternative means of financial support, or both, in order to continue to fund operations, and therefore there is substantial doubt about our ability to continue as a going concern. The Company expects to incur substantial expenses into the foreseeable future for the research, development and commercialization of its potential products. In addition, the Company will require additional financing in order to seek to license or acquire new assets, research and develop any potential patents and the related compounds, and obtain any further intellectual property that the Company may seek to acquire. Historically, the Company has principally funded operations through debt borrowings, the issuance of convertible debt, and the issuance of units consisting of common stock and warrants. Provisions in the Securities Purchase Agreements that the Company entered into on February 20, 2017 (“2017 SPA”) and on June 28, 2018 (“2018 SPA”) restrict the Company’s ability to effect or enter into an agreement to effect any issuance by the Company or any of its subsidiaries of Common Stock or securities convertible, exercisable or exchangeable for Common Stock (or a combination of units thereof) involving a Variable Rate Transaction (as defined in the 2017 SPA and 2018 SPA) including, but not limited to, an equity line of credit or “At-the-Market” financing facility until the three lead investors in the 2017 Financing and the institutional investors in the 2018 SPA collectively own less than 20% of the Series F Warrants and the Series G Warrants purchased by them pursuant to the 2017 SPA and 2018 SPA, respectively. In addition, the October 2019 SPA contains certain restrictions on our ability to conduct subsequent sales of our equity securities. In particular, subject to certain customary exemptions, from October 16, 2019 until 90 days after the closing of the October 2019 Financing, neither the Company nor is subsidiary shall issue, enter into any agreement to issue or announce the issuance or proposed issuance of any shares of Common Stock or securities convertible, exercisable or exchangeable for Common Stock. The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. The consolidated financial statements do not include any adjustments that might result from this uncertainty. |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
PROPERTY AND EQUIPMENT | |
Schedule of property and equipment | At September 30, 2019 and September 30, 2018, property and equipment consisted of: Estimated September 30, September 30, Useful Life 2019 2018 Furniture and fixtures 5 years $ 9,357 $ 9,357 Leasehold improvements Life of Lease $ 8,983 $ 8,983 Computer equipment 3 years $ 8,686 $ 8,686 Lab equipment 5 years $ 1,000 $ 1,000 28,026 28,026 Less – accumulated depreciation 19,003 10,765 Property and equipment, net $ 9,023 $ 17,261 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
INCOME TAXES | |
Schedule of deferred tax assets and liabilities | The principal components of the Company’s net deferred tax assets consisted of the following at September 30: 2019 2018 Net operating loss carryforwards $ 7,291,333 $ 5,848,080 Capitalized expenditures 1,717,025 1,486,679 Research and experimentation credit carryforwards 898,610 802,765 Stock based compensation 2,139,119 2,074,247 Property and Equipment 2,234 1,235 Accrued expenses 13,660 13,660 Deferred rent 492 328 Gross deferred tax assets 12,062,473 10,226,994 Deferred tax asset valuation allowance (12,062,473) (10,226,994) Net deferred tax assets $ — $ — |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
INVENTORIES | |
Schedule of inventories | Inventories consist of the following: September 30, 2019 Goods-in-process $ 328,500 Raw Material 18,147 Total $ 346,647 |
2017 REGISTERED DIRECT OFFERI_2
2017 REGISTERED DIRECT OFFERING (Tables) - REGISTERED DIRECT OFFERING 2017 [Member] | 12 Months Ended |
Sep. 30, 2019 | |
Schedule of Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | Fair Value Measurements Using Significant Unobservable Inputs September 30, September 30, (Level 3) 2019 2018 Beginning balance at beginning of year $ 1,274,404 $ 3,430,033 Issuances — — Adjustments to estimated fair value (274,404) (2,155,629) Ending balance at end of year $ $ 1,274,404 |
Schedule of assumptions used to value derivative liabilities | The derivative liabilities were valued as of, September 30, 2019 and September 30, 2018 using the Black Scholes Model with the following assumptions: September 30, September 30, 2019 2018 Closing price per share of common stock $ 0.24 $ 0.42 Exercise price per share $ 0.75 $ 0.75 Expected volatility 78.15 % 98.43 % Risk-free interest rate 1.60 % 2.88 % Dividend yield — — Remaining expected term of underlying securities (years) 2.37 3.38 |
2018 REGISTERED DIRECT OFFERI_2
2018 REGISTERED DIRECT OFFERING (Tables) - Registered Direct Offering 2018 [Member] | 12 Months Ended |
Sep. 30, 2019 | |
Schedule of Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | Fair Value Measurements Using Significant Unobservable Inputs September 30, September 30, (Level 3) 2019 2018 Beginning balance at beginning of year $ 1,917,348 $ — Issuances — 2,397,454 Adjustments to estimated fair value (1,169,073) (480,106) Ending balance at end of year $ 748,275 $ 1,917,348 |
Schedule of assumptions used to value derivative liabilities | The derivative liabilities were valued as of September 30, 2019, September 30, 2018 and June 30, 2018 using the Black Scholes Model with the following assumptions: September 30, September 30, June 30, 2019 2018 2018 Closing price per share of common stock $ 0.24 $ 0.42 $ 0.48 Exercise price per share $ 0.70 $ 0.70 $ 0.70 Expected volatility 78.72 % 100.18 % 105.94 % Risk-free interest rate 1.56 % 2.94 % 2.73 % Dividend yield — — — Remaining expected term of underlying securities (years) 3.73 4.74 5.00 |
2019 REGISTERED DIRECT OFFERI_2
2019 REGISTERED DIRECT OFFERING (Tables) - Registered Direct Offering 2019 [Member] | 12 Months Ended |
Sep. 30, 2019 | |
Schedule of Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | Fair Value Measurements Using Significant Unobservable Inputs September 30, (Level 3) 2019 Beginning balance at beginning of year $ — Issuances 1,628,113 Adjustments to estimated fair value (380,698) Ending balance at end of year $ 1,247,415 |
Schedule of assumptions used to value derivative liabilities | The derivative liabilities were valued as of September 30, 2019 and May 14, 2019 using the Black Scholes Model with the following assumptions: September 30, May 14, 2019 2019 Closing price per share of common stock $ 0.24 $ 0.283 Exercise price per share $ 0.40 $ 0.40 Expected volatility 92.11 % 93.44 % Risk-free interest rate 1.55 % 2.20 % Dividend yield — — Remaining expected term of underlying securities (years) 4.61 5.00 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) - 2013 Stock Incentive Plan [Member] | 12 Months Ended |
Sep. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of stock compensation activity | Stock compensation activity under the 2013 Plan for the year ended September 30, 2019 follows: Weighted Weighted Average Option Average Remaining Aggregate Shares Exercise Contractual Intrinsic Outstanding Price Term (years) Value Outstanding at September 30, 2018 15,684,210 $ 0.40 3.89 $ 1,142,521 Awarded 1,925,000 $ 0.38 — — Exercised (1,525,000) $ 0.37 — — Forfeited/Cancelled (276,299) $ 0.41 — — Outstanding at September 30, 2019 15,807,911 $ 0.40 3.14 $ 142,810 Vested 13,795,584 $ 0.39 3.49 $ 142,810 Vested and expected to vest at September 30, 2019 15,807,911 $ 0.40 3.14 $ 142,810 |
Schedule of restricted stock activity | Restricted stock activity in shares under the 2013 Plan for the year ended September 30, 2019 and 2018 follows: September 30, September 30, 2019 2018 Non Vested at beginning of year 2,815,000 1,750,000 Awarded — 1,065,000 Vested (1,850,000) — Forfeited — — Non Vested at end of year 965,000 2,815,000 |
Schedule of weighted average restricted stock award date fair value information | The weighted average restricted stock award date fair value information for the year ended September 30, 2019 and 2018 follows: September 30, September 30, 2019 2018 Non Vested at beginning of year $ 0.57 $ 0.65 Awarded — 0.43 Vested 0.64 — Forfeited — — Non Vested at end of year $ 0.43 $ 0.57 |
RESTRICTED STOCK AWARDED OUTS_2
RESTRICTED STOCK AWARDED OUTSIDE THE 2013 STOCK INCENTIVE PLAN (Tables) - Restricted Stock Units (RSUs) [Member] | 12 Months Ended |
Sep. 30, 2019 | |
Schedule of restricted stock activity | Restricted Stock activity in shares for the years ended September 30, 2019 and 2018 is as follows: September 30, September 30, 2019 2018 Non Vested at beginning of year 1,767,000 2,000,000 Awarded — — Vested (1,767,000) (233,000) Forfeited — — Non Vested at end of year — 1,767,000 |
Schedule of weighted average restricted stock award date fair value information | The weighted average restricted stock award date fair value information for the years ended September 30, 2019 and 2018 follows: September 30, September 30, 2019 2018 Non Vested at beginning of year $ 0.39 $ 0.39 Awarded — — Vested 0.39 — Forfeited — — Non Vested at end of year $ — $ 0.39 |
SELECTED QUARTERLY FINANCIAL _2
SELECTED QUARTERLY FINANCIAL DATA (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
SELECTED QUARTERLY FINANCIAL DATA | |
Schedule of quarterly financial data | The following table provides selected quarterly financial data for the fiscal years ended September 30, 2019 and 2018: Quarters Ended December 31, 2018 March 31, 2019 June 30, 2019 September 30, 2019 Net sales $ — $ — $ — $ — Gross profit $ — $ — $ — $ — Operating loss $ (1,767,824) $ (1,507,366) $ (1,572,261) $ (1,524,305) Net loss $ (2,600,237) $ 169,962 $ (1,289,162) $ (828,144) Net income (loss) per share - basic and diluted $ (0.02) $ — $ (0.01) $ — Weighted average shares - basic 161,057,300 163,285,738 168,396,553 172,575,820 Weighted average shares - diluted 161,057,300 168,620,980 168,396,553 172,575,820 Quarters Ended December 31, 2017 March 31, 2018 June 30, 2018 September 30, 2018 Net sales $ — $ — $ — $ — Gross profit $ — $ — $ — $ — Operating loss $ (1,582,373) $ (2,013,845) $ (1,620,134) $ (2,233,415) Net loss $ 389,176 $ (1,555,361) $ (2,212,640) $ (1,435,207) Net (loss) per share - basic and diluted $ — $ (0.01) $ (0.01) $ (0.01) Weighted average shares - basic 150,144,575 150,302,013 150,550,189 159,778,165 Weighted average shares - diluted 163,527,032 150,302,013 150,550,189 159,778,165 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Effective Income Tax Rate Reconciliation, Percent | 21.00% | |
Cash Equivalents, at Carrying Value | $ 0 | $ 0 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Property and equipment, gross, Total | $ 28,026 | $ 28,026 |
Less - accumulated depreciation | 19,003 | 10,765 |
Property and equipment, net | $ 9,023 | 17,261 |
Furniture and fixtures | ||
Property, and equipment, Estimated Useful Life | 5 years | |
Property and equipment, gross, Total | $ 9,357 | 9,357 |
Leasehold improvements | ||
Property and equipment, gross, Total | $ 8,983 | 8,983 |
Computer equipment | ||
Property, and equipment, Estimated Useful Life | 3 years | |
Property and equipment, gross, Total | $ 8,686 | 8,686 |
Lab equipment | ||
Property, and equipment, Estimated Useful Life | 5 years | |
Property and equipment, gross, Total | $ 1,000 | $ 1,000 |
PROPERTY AND EQUIPMENT - Additi
PROPERTY AND EQUIPMENT - Additional Information (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
PROPERTY AND EQUIPMENT | ||
Depreciation expense | $ 8,238 | $ 5,342 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | Sep. 30, 2019 | Sep. 30, 2018 |
INCOME TAXES | ||
Net operating loss carryforwards | $ 7,291,333 | $ 5,848,080 |
Capitalized expenditures | 1,717,025 | 1,486,679 |
Research and experimentation credit carryforwards | 898,610 | 802,765 |
Stock based compensation | 2,139,119 | 2,074,247 |
Property and Equipment | 2,234 | 1,235 |
Accrued expenses | 13,660 | 13,660 |
Deferred rent | 492 | 328 |
Gross deferred tax assets | 12,062,473 | 10,226,994 |
Deferred tax asset valuation allowance | (12,062,473) | (10,226,994) |
Net deferred tax assets | $ 0 | $ 0 |
INCOME TAXES - Additional Infor
INCOME TAXES - Additional Information (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Deferred Tax Assets, Operating Loss Carryforwards, Domestic | $ 26,890,000 | $ 21,770,000 |
Deferred Tax Assets, Tax Credit Carryforwards, Research | 898,610 | 802,765 |
Deferred Tax Assets, Operating Loss Carryforwards, State and Local | 26,560,000 | 20,730,000 |
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | 1,835,000 | 1,440,000 |
Effective Income Tax Rate Reconciliation at Federal Statutory Income Tax Rate, Amount | 0 | |
Expire In 2023 | ||
Deferred Tax Assets, Tax Credit Carryforwards, Research | 305,000 | 236,000 |
Expire In 2029 | ||
Deferred Tax Assets, Tax Credit Carryforwards, Research | $ 661,532 | $ 616,217 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) | Sep. 30, 2019 | Sep. 30, 2018 |
INVENTORIES | ||
Goods-in-process | $ 328,500 | |
Raw Material | 18,147 | |
Total | $ 346,647 | $ 0 |
2015 PRIVATE PLACEMENT FINANC_2
2015 PRIVATE PLACEMENT FINANCING - Additional Information (Details) - USD ($) | Jul. 02, 2015 | Jun. 30, 2015 | Jun. 30, 2015 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2017 |
2015 Investors [Member] | ||||||
Private Placement [Line Items] | ||||||
Stock Issued During Period, Shares, New Issues | 454,387 | 13,936,367 | ||||
Proceeds from Issuance of Common Stock | $ 100,000 | $ 3,066,000 | ||||
Series D Warrants [Member] | ||||||
Private Placement [Line Items] | ||||||
Stock Issued During Period, Shares, New Issues | 0 | 227,273 | ||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.25 | |||||
Proceeds from Issuance of Common Stock | $ 56,818 | |||||
Common Stock, Capital Shares Reserved for Future Issuance | 8,974,389 | |||||
Percentage of Shares Purchased by Investors | 100.00% | |||||
2015 Private Placement [Member] | ||||||
Private Placement [Line Items] | ||||||
Stock Issued During Period, Shares, New Issues | 14,390,754 | 13,936,367 | ||||
Share Price | $ 0.22 | $ 0.22 | ||||
Proceeds from Issuance of Common Stock | $ 3,200,000 | |||||
2015 Private Placement [Member] | Series D Warrants [Member] | ||||||
Private Placement [Line Items] | ||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.25 | $ 0.25 |
2016 PRIVATE PLACEMENT FINANC_2
2016 PRIVATE PLACEMENT FINANCING - Additional Information (Details) - USD ($) | May 26, 2016 | May 26, 2016 | May 31, 2016 | Sep. 30, 2019 | Sep. 30, 2018 |
Registration Rights Agreement [Member] | |||||
Private Placement [Line Items] | |||||
Stock Issued During Period, Shares, New Issues | 16,482,082 | ||||
Investor's Subscription Agreement [Member] | |||||
Private Placement [Line Items] | |||||
Percentage of Shares Purchased by Investors | 75.00% | ||||
Series E Warrant [Member] | |||||
Private Placement [Line Items] | |||||
Stock Issued During Period, Shares, New Issues | 7,063,748 | 15,000 | |||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.438 | $ 0.438 | |||
Terms Of Warrants | (i) at any time during the term of the Series E Warrants, we may reduce the then-current exercise price to any amount and for any period of time deemed appropriate by our Board of Directors (the "Board ); and (ii) certain of the Series E Warrants provide that they shall not be exercisable in the event and to the extent that the exercise thereof would result in the holder of the Series E Warrant, together with its affiliates and any other persons whose beneficial ownership of Common Stock would be aggregated with the holder's, would be deemed to beneficially own more than 4.99% of the Common Stock; provided, however , the holder, upon notice to us, may increase or | ||||
Proceeds from Issuance of Common Stock | $ 6,570 | ||||
Common Stock, Capital Shares Reserved for Future Issuance | 4,214,582 | ||||
Private Placement 2016 [Member] | |||||
Private Placement [Line Items] | |||||
Stock Issued During Period, Shares, New Issues | 9,418,334 | 9,418,334 | 9,418,334 | ||
Share Price | $ 0.36 | $ 0.36 | |||
Proceeds from Issuance of Common Stock | $ 3,390,600 | ||||
Private Placement 2016 [Member] | Maxim Group LLC [Member] | |||||
Private Placement [Line Items] | |||||
Underwriting Fees, Percentage | 8.20% | ||||
Proceeds from Issuance of Common Stock | $ 2,084,000 | ||||
Payments of Stock Issuance Costs | $ 171,000 | ||||
Private Placement 2016 [Member] | Series E Warrant [Member] | |||||
Private Placement [Line Items] | |||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 0.75 | 0.75 | |||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.4380 | $ 0.4380 | |||
Payments of Stock Issuance Costs | $ 281,000 | ||||
Stock Issued During Period, Value, New Issues | $ 3,400,000 |
2017 REGISTERED DIRECT OFFERI_3
2017 REGISTERED DIRECT OFFERING - Fair value of derivative (Details) - Fair Value, Inputs, Level 3 [Member] - REGISTERED DIRECT OFFERING 2017 [Member] - USD ($) | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Beginning balance at beginning of year | $ 1,274,404 | $ 3,430,033 |
Issuances | 0 | 0 |
Adjustments to estimated fair value | (274,404) | (2,155,629) |
Ending balance at end of year | $ 1,000,000 | $ 1,274,404 |
2017 REGISTERED DIRECT OFFERI_4
2017 REGISTERED DIRECT OFFERING - Derivative liabilities using Black Scholes Model (Details) | 12 Months Ended | |
Sep. 30, 2019$ / shares | Sep. 30, 2018$ / shares | |
Closing price per share of common stock | $ 0.001 | $ 0.001 |
Derivative Financial Instruments, Liabilities [Member] | REGISTERED DIRECT OFFERING 2017 [Member] | ||
Closing price per share of common stock | $ 0.24 | $ 0.42 |
Derivative Financial Instruments, Liabilities [Member] | REGISTERED DIRECT OFFERING 2017 [Member] | Measurement Input, Exercise Price [Member] | ||
Derivative Liability, Measurement Input | 0.75 | 0.75 |
Derivative Financial Instruments, Liabilities [Member] | REGISTERED DIRECT OFFERING 2017 [Member] | Measurement Input, Price Volatility [Member] | ||
Derivative Liability, Measurement Input | 78.15 | 98.43 |
Derivative Financial Instruments, Liabilities [Member] | REGISTERED DIRECT OFFERING 2017 [Member] | Measurement Input, Risk Free Interest Rate [Member] | ||
Derivative Liability, Measurement Input | 1.60 | 2.88 |
Derivative Financial Instruments, Liabilities [Member] | REGISTERED DIRECT OFFERING 2017 [Member] | Measurement Input, Expected Dividend Rate [Member] | ||
Derivative Liability, Measurement Input | 0 | 0 |
Derivative Financial Instruments, Liabilities [Member] | REGISTERED DIRECT OFFERING 2017 [Member] | Measurement Input, Expected Term [Member] | ||
Remaining expected term of underlying securities (years) | 2 years 4 months 13 days | 3 years 4 months 17 days |
2017 REGISTERED DIRECT OFFERI_5
2017 REGISTERED DIRECT OFFERING - Additional Information (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||||
Feb. 24, 2017 | Feb. 20, 2017 | Sep. 30, 2019 | Sep. 30, 2018 | Jul. 02, 2018 | Sep. 30, 2016 | |
Derivative Liability | $ 2,996,110 | $ 2,397,454 | ||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Period Increase (Decrease) | $ 1,824,175 | $ 2,635,735 | ||||
Common Stock [Member] | ||||||
Stock Issued During Period, Shares, New Issues | 10,166,664 | |||||
Series F Warrant [Member] | ||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 5,591,664 | |||||
REGISTERED DIRECT OFFERING 2017 [Member] | ||||||
Shelf Registration Statement, Maximum Amount Authorized | $ 50,000,000 | |||||
Stock Issued During Period, Shares, New Issues | 10,166,664 | |||||
Shares Issued, Price Per Share | $ 0.60 | |||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.75 | |||||
Stock Issued During Period, Value, New Issues | $ 6,100,000 | |||||
Number Of Warrants Per Unit | 0.55 | |||||
Cash Price Per Each Common Stock Underlying Warrants | 0.18 | |||||
Allocation Of Remaining Proceeds To Common Stock And Additional Paid In Capital | 2,991,012 | |||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Period Increase (Decrease) | $ (274,404) | $ 2,156,629 | ||||
Payments of Stock Issuance Costs | 112,000 | |||||
REGISTERED DIRECT OFFERING 2017 [Member] | Series F Warrant [Member] | ||||||
Stock Issued During Period, Value, New Issues | $ 5,987,122 | |||||
Percentage Of Class Of Warrant Or Right Held | 20.00% |
2018 REGISTERED DIRECT OFFERI_3
2018 REGISTERED DIRECT OFFERING - Fair value of derivative (Details) - Fair Value, Inputs, Level 3 [Member] - Registered Direct Offering 2018 [Member] - USD ($) | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Beginning balance at beginning of year | $ 1,917,348 | $ 0 |
Issuances | 0 | 2,397,454 |
Adjustments to estimated fair value | (1,169,073) | (480,106) |
Ending balance at end of year | $ 748,275 | $ 1,917,348 |
2018 REGISTERED DIRECT OFFERI_4
2018 REGISTERED DIRECT OFFERING - Derivative liabilities using Black Scholes Model (Details) | Jun. 30, 2018$ / sharesUSD ($) | Sep. 30, 2019$ / sharesUSD ($) | Sep. 30, 2018$ / sharesUSD ($) |
Closing price per share of common stock | $ 0.001 | $ 0.001 | |
Registered Direct Offering 2018 [Member] | Derivative Financial Instruments, Liabilities [Member] | |||
Closing price per share of common stock | $ 0.48 | $ 0.24 | $ 0.42 |
Registered Direct Offering 2018 [Member] | Derivative Financial Instruments, Liabilities [Member] | Measurement Input, Exercise Price [Member] | |||
Derivative Liability, Measurement Input | 0.70 | 0.70 | 0.70 |
Registered Direct Offering 2018 [Member] | Derivative Financial Instruments, Liabilities [Member] | Measurement Input, Price Volatility [Member] | |||
Derivative Liability, Measurement Input | 105.94 | 78.72 | 100.18 |
Registered Direct Offering 2018 [Member] | Derivative Financial Instruments, Liabilities [Member] | Measurement Input, Risk Free Interest Rate [Member] | |||
Derivative Liability, Measurement Input | 2.73 | 1.56 | 2.94 |
Registered Direct Offering 2018 [Member] | Derivative Financial Instruments, Liabilities [Member] | Measurement Input, Expected Dividend Rate [Member] | |||
Derivative Liability, Measurement Input | $ | 0 | 0 | 0 |
Registered Direct Offering 2018 [Member] | Derivative Financial Instruments, Liabilities [Member] | Measurement Input, Expected Term [Member] | |||
Remaining expected term of underlying securities (years) | 5 years | 3 years 8 months 23 days | 4 years 8 months 27 days |
2018 REGISTERED DIRECT OFFERI_5
2018 REGISTERED DIRECT OFFERING - Additional Information (Details) - USD ($) | Jul. 02, 2018 | Jun. 29, 2018 | Jun. 28, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Feb. 24, 2017 |
Derivative Liability | $ 2,397,454 | $ 2,996,110 | ||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Period Increase (Decrease) | $ 1,824,175 | $ 2,635,735 | ||||
Class Of Series G Warrant [Member] | ||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 6,802,500 | |||||
Registered Direct Offering 2018 [Member] | ||||||
Stock Issued During Period, Shares, New Issues | 9,070,000 | 9,070,000 | ||||
Shares Issued, Price Per Share | $ 0.50 | |||||
Number Of Warrants Per Unit | 0.75 | |||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.70 | |||||
Common Stock, Shares Subscribed but Unissued | 9,070,000 | |||||
Proceeds from Subscribed but Unissued Common Stock and Warrants | $ 4,461,248 | $ 4,500,000 | ||||
Payments of Stock Issuance Costs | 74,000 | |||||
Cash Price Per Each Common Stock Underlying Warrants | $ 0.11 | |||||
Allocation Of Remaining Proceeds To Common Stock Subscribed and Unissued | $ 2,063,794 | |||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Period Increase (Decrease) | $ 1,169,073 | $ 480,106 | ||||
Registered Direct Offering 2018 [Member] | Class Of Series G Warrant [Member] | ||||||
Percentage Of Class Of Warrant Or Right Held | 20.00% |
2019 REGISTERED DIRECT OFFERI_3
2019 REGISTERED DIRECT OFFERING - Fair value of derivative (Details) - Fair Value, Inputs, Level 3 [Member] - Registered Direct Offering 2019 [Member] | 12 Months Ended |
Sep. 30, 2019USD ($) | |
Beginning balance at beginning of year | $ 0 |
Issuances | 1,628,113 |
Adjustments to estimated fair value | (380,698) |
Ending balance at end of year | $ 1,247,415 |
2019 REGISTERED DIRECT OFFERI_4
2019 REGISTERED DIRECT OFFERING - Derivative liabilities using Black Scholes Model (Details) | May 14, 2019$ / shares | Sep. 30, 2019$ / shares | Sep. 30, 2018$ / shares |
Closing price per share of common stock | $ 0.001 | $ 0.001 | |
Derivative Financial Instruments, Liabilities [Member] | Registered Direct Offering 2019 [Member] | |||
Closing price per share of common stock | $ 0.283 | $ 0.24 | |
Derivative Financial Instruments, Liabilities [Member] | Registered Direct Offering 2019 [Member] | Measurement Input, Exercise Price [Member] | |||
Derivative Liability, Measurement Input | 0.40 | 0.40 | |
Derivative Financial Instruments, Liabilities [Member] | Registered Direct Offering 2019 [Member] | Measurement Input, Price Volatility [Member] | |||
Derivative Liability, Measurement Input | 93.44 | 92.11 | |
Derivative Financial Instruments, Liabilities [Member] | Registered Direct Offering 2019 [Member] | Measurement Input, Risk Free Interest Rate [Member] | |||
Derivative Liability, Measurement Input | 2.20 | 1.55 | |
Derivative Financial Instruments, Liabilities [Member] | Registered Direct Offering 2019 [Member] | Measurement Input, Expected Dividend Rate [Member] | |||
Derivative Liability, Measurement Input | 0 | 0 | |
Derivative Financial Instruments, Liabilities [Member] | Registered Direct Offering 2019 [Member] | Measurement Input, Expected Term [Member] | |||
Remaining expected term of underlying securities (years) | 5 years | 4 years 7 months 10 days |
2019 REGISTERED DIRECT OFFERI_5
2019 REGISTERED DIRECT OFFERING - Additional information (Details) - USD ($) | May 14, 2019 | May 13, 2019 | May 12, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Jul. 02, 2018 | Feb. 24, 2017 |
Derivative Liability | $ 2,397,454 | $ 2,996,110 | |||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Period Increase (Decrease) | $ 1,824,175 | $ 2,635,735 | |||||
Class Of Series H Warrant [Member] | |||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 8,615,384 | ||||||
Registered Direct Offering 2019 [Member] | |||||||
Stock Issued During Period, Shares, New Issues | 8,615,384 | 8,615,384 | |||||
Shares Issued, Price Per Share | $ 0.325 | ||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.40 | ||||||
Common Stock, Shares Subscribed but Unissued | 8,615,384 | ||||||
Proceeds from Subscribed but Unissued Common Stock and Warrants | $ 2,748,821 | $ 2,800,000 | |||||
Payments of Stock Issuance Costs | 51,200 | ||||||
Cash Price Per Each Common Stock Underlying Warrants | $ 0.0533 | $ 0.0533 | |||||
Derivative Liability | 1,628,113 | ||||||
Allocation Of Remaining Proceeds To Common Stock Subscribed and Unissued | $ 1,120,708 | ||||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Period Increase (Decrease) | $ 380,698 |
STOCK-BASED COMPENSATION - Stoc
STOCK-BASED COMPENSATION - Stock compensation activity (Details) | 12 Months Ended |
Sep. 30, 2019USD ($)$ / sharesshares | |
Option Shares Outstanding | |
Outstanding at September 30, 2018 | shares | 15,684,210 |
Awarded | shares | 1,925,000 |
Exercised | shares | (1,525,000) |
Forfeited/Cancelled | shares | (276,299) |
Outstanding at September 30, 2019 | shares | 15,807,911 |
Vested | shares | 13,795,584 |
Vested and expected to vest at September 30, 2019 | shares | 15,807,911 |
Weighted Average Exercise Price | |
Outstanding at September 30, 2018 | $ / shares | $ 0.40 |
Awarded | $ / shares | 0.38 |
Exercised | $ / shares | 0.37 |
Forfeited/Cancelled | $ / shares | 0.41 |
Outstanding at September 30, 2019 | $ / shares | 0.40 |
Vested | $ / shares | 0.39 |
Vested and expected to vest at September 30, 2019 | $ / shares | $ 0.40 |
Weighted Average Remaining Contractual Term (years) | |
Outstanding at September 30, 2018 | 3 years 10 months 21 days |
Awarded | 0 years |
Exercised | 0 years |
Forfeited/Cancelled | 0 years |
Outstanding at September 30, 2019 | 3 years 1 month 21 days |
Vested | 3 years 5 months 27 days |
Vested and expected to vest at September 30, 2019 | 3 years 1 month 21 days |
Aggregate Intrinsic Value | |
Outstanding at September 30, 2018 | $ | $ 1,142,521 |
Awarded | $ | 0 |
Exercised | $ | 0 |
Forfeited/Cancelled | $ | 0 |
Outstanding at September 30, 2019 | $ | 142,810 |
Vested | $ | 142,810 |
Vested and expected to vest at September 30, 2019 | $ | $ 142,810 |
STOCK-BASED COMPENSATION - Rest
STOCK-BASED COMPENSATION - Restricted stock activity (Details) - 2013 Incentive Plan [Member] - shares | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Non Vested, Beginning Balance | 2,815,000 | 1,750,000 |
Awarded | 0 | 1,065,000 |
Vested | (1,850,000) | 0 |
Forfeited | 0 | 0 |
Non Vested, Ending Balance | 965,000 | 2,815,000 |
STOCK-BASED COMPENSATION - Weig
STOCK-BASED COMPENSATION - Weighted average restricted stock (Details) - 2013 Incentive Plan [Member] - $ / shares | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Non Vested, Beginning Balance | $ 0.57 | $ 0.65 |
Awarded | 0 | 0.43 |
Vested | 0.64 | 0 |
Forfeited | 0 | 0 |
Non Vested, Ending Balance | $ 0.43 | $ 0.57 |
STOCK-BASED COMPENSATION - Addi
STOCK-BASED COMPENSATION - Additional Information (Details) - USD ($) | Sep. 05, 2018 | Feb. 03, 2017 | Aug. 09, 2016 | Jun. 13, 2013 | Jul. 19, 2018 | May 31, 2016 | Sep. 30, 2019 | Sep. 30, 2018 | Oct. 02, 2019 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
common stock, shares, issued | 173,577,233 | 164,397,013 | |||||||
Share-based compensation arrangement by share-based payment award, fair value assumptions, expected volatility rate, minimum | 83.27% | ||||||||
Share-based compensation arrangement by share-based payment award, fair value assumptions, expected volatility rate, maximum | 119.44% | ||||||||
Share-based compensation arrangement by share-based payment award, fair value assumptions, risk free interest rate, minimum | 1.47% | ||||||||
Share-based compensation arrangement by share-based payment award, fair value assumptions, risk free interest rate, maximum | 3.23% | ||||||||
Share based compensation arrangement by share based payment award fair value assumptions expected forfeiture rate | 0.00% | ||||||||
Share-based compensation arrangement by share-based payment award, fair value assumptions, expected dividend rate | 0.00% | ||||||||
Share-based compensation arrangement by share-based payment award, fair value assumptions, expected term | 6 years 3 months | ||||||||
Common Stock, Shares Authorized | 300,000,000 | 300,000,000 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 1,925,000 | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares | 13,795,584 | ||||||||
Proceeds from Stock Options Exercised | $ 32,400 | $ 77,700 | |||||||
Share-based compensation arrangements by share-based payment award, options, grants in period, weighted average exercise price | $ 0.38 | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 1,525,000 | ||||||||
Restricted Stock [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 100.00% | ||||||||
Non-Employee Restricted Shares [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Allocated share-based compensation expense | $ 397,000 | 600,000 | |||||||
Research and Development Expense [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Allocated share-based compensation expense | 347,000 | 349,000 | |||||||
General and Administrative Expense [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Allocated share-based compensation expense | 483,000 | 564,000 | |||||||
General and Administrative Expense [Member] | Restricted Stock [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Allocated share-based compensation expense | $ 0 | 229,000 | |||||||
Employees And Directors [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 16,494,212 | ||||||||
Consultants [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 7,027,500 | ||||||||
Consultants [Member] | Restricted Stock [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Granted | 100,000 | ||||||||
Employees, Directors And Consultants [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Allocated share-based compensation expense | $ 830,000 | $ 913,000 | |||||||
2013 Stock Incentive Plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Increase In Aggregate Number Of Shares | 3,000,000 | ||||||||
Employee service share-based compensation, nonvested awards, compensation cost not yet recognized, period for recognition | 1 year 6 months 7 days | ||||||||
Common Stock, Shares Authorized | 25,114,256 | 28,114,256 | |||||||
Share-based compensation arrangement by share-based payment award, number of additional shares authorized | 3,000,000 | ||||||||
Stock Issued During Period, Shares, New Issues | 477,269 | 116,883 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 87,567 | 210,000 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Shares Issued in Period | 1,437,433 | 225,000 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Maximum Number of Shares Per Employee | 375,000 | ||||||||
Proceeds from Stock Options Exercised | $ 32,400 | $ 77,700 | |||||||
2013 Stock Incentive Plan | Restricted Stock [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
common stock, shares, issued | 225,000 | ||||||||
Share-based compensation arrangement by share-based payment award, award vesting period | 90 days | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 225,000 | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Maximum Number of Shares Per Employee | 375,000 | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 100.00% | ||||||||
Share-based compensation arrangements by share-based payment award, options, grants in period, weighted average exercise price | $ 0.72 | ||||||||
Share Price | $ 0.72 | ||||||||
2013 Stock Incentive Plan | Restricted Stock [Member] | Share-based Compensation Award, Tranche One [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares | 50,000 | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 100.00% | 100.00% | 100.00% | ||||||
2013 Stock Incentive Plan | Restricted Stock [Member] | Share-based Compensation Award, Tranche Two [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares | 50,000 | ||||||||
2013 Stock Incentive Plan | Chief Executive Officer [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Maximum Number of Shares Per Employee | 125,000 | ||||||||
2013 Stock Incentive Plan | Chief Executive Officer [Member] | Share-based Compensation Award, Tranche One [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Share-based compensation arrangement by share-based payment award, award vesting period | 90 days | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares | 75,000 | ||||||||
2013 Stock Incentive Plan | Chief Executive Officer [Member] | Share-based Compensation Award, Tranche Two [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Share-based compensation arrangement by share-based payment award, award vesting period | 120 days | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Maximum Number of Shares Per Employee | 125,000 | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares | 75,000 | ||||||||
2013 Stock Incentive Plan | Chief Executive Officer [Member] | Share-based Compensation Award, Tranche Three [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Share-based compensation arrangement by share-based payment award, award vesting period | 150 days | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares | 75,000 | ||||||||
Plan 2013 [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Share-based compensation arrangement by share-based payment award, number of shares available for grant | 4,190,443 | ||||||||
Employee service share-based compensation, nonvested awards, compensation cost not yet recognized, total | $ 331,000 | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 100.00% | ||||||||
Plan 2013 [Member] | Employees And Directors [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 925,000 | ||||||||
Plan 2013 [Member] | Consultants [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 1,000,000 | ||||||||
Plan 2013 [Member] | Consultants [Member] | Restricted Stock [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Other | 220,000 | ||||||||
Plan 2013 [Member] | Board of Directors And Management [Member] | Restricted Stock [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Granted | 1,750,000 | 745,000 |
RESTRICTED STOCK AWARDED OUTS_3
RESTRICTED STOCK AWARDED OUTSIDE THE 2013 STOCK INCENTIVE PLAN - Restricted Stock activity (Details) - Restricted Stock Units (RSUs) [Member] - shares | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Non Vested, Beginning Balance | 1,767,000 | 2,000,000 |
Awarded | 0 | 0 |
Vested | (1,767,000) | (233,000) |
Forfeited | 0 | 0 |
Non Vested, Ending Balance | 1,767,000 |
RESTRICTED STOCK AWARDED OUTS_4
RESTRICTED STOCK AWARDED OUTSIDE THE 2013 STOCK INCENTIVE PLAN - Weighted average restricted stock (Details) - Restricted Stock [Member] - $ / shares | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Non Vested, Beginning Balance | $ 0.39 | $ 0.39 |
Awarded | 0 | 0 |
Vested | 0.39 | 0 |
Forfeited | $ 0 | 0 |
Non Vested, Ending Balance | $ 0.39 |
RESTRICTED STOCK AWARDED OUTS_5
RESTRICTED STOCK AWARDED OUTSIDE THE 2013 STOCK INCENTIVE PLAN - Additional Information (Details) - USD ($) | May 03, 2016 | May 31, 2016 | Sep. 30, 2019 | Sep. 30, 2018 | May 01, 2018 | Sep. 30, 2017 |
General and Administrative Expense [Member] | ||||||
Allocated Share-based Compensation Expense | $ 483,000 | $ 564,000 | ||||
Restricted Stock [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 2,000,000 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 100.00% | |||||
Restricted Stock [Member] | General and Administrative Expense [Member] | ||||||
Allocated Share-based Compensation Expense | $ 0 | $ 229,000 | ||||
Restricted Stock Units (RSUs) [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 0 | 0 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 1,767,000 | 1,767,000 | 2,000,000 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | 1,767,000 | 233,000 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Apr. 30, 2015 | Oct. 31, 2013 | Sep. 30, 2019 | Sep. 30, 2018 | |
Annual lease commitment | $ 42,000 | |||
MIT Licensing Agreement [Member] | ||||
Contractual Obligation | $ 50,000 | $ 50,000 | ||
Patents [Member] | ||||
Finite-Lived Intangible Asset, Useful Life | 20 years | |||
Wellesley [Member] | ||||
Payments For Rent Monthly Payments | $ 5,031 | |||
Framingham [Member] | ||||
Payments For Rent Monthly Payments | $ 2,000 | |||
Operating Leases, Future Minimum Payments, Remainder of Fiscal Year | $ 38,400 | |||
Operating Leases, Future Minimum Payments Due, Next Twelve Months | 39,600 | |||
Operating Leases, Future Minimum Payments, Due in Two Years | $ 42,000 |
SELECTED QUARTERLY FINANCIAL _3
SELECTED QUARTERLY FINANCIAL DATA (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2019 | Sep. 30, 2018 | |
SELECTED QUARTERLY FINANCIAL DATA | ||||||||||
Net sales | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 |
Gross profit | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||
Operating loss | (1,524,305) | (1,572,261) | (1,507,366) | (1,767,824) | (2,233,415) | (1,620,134) | (2,013,845) | (1,582,373) | (6,371,757) | (7,449,767) |
Net loss | $ (828,144) | $ (1,289,162) | $ 169,962 | $ (2,600,237) | $ (1,435,207) | $ (2,212,640) | $ (1,555,361) | $ 389,176 | $ (4,547,582) | $ (4,814,032) |
Net income (loss) per share - basic and diluted | $ 0 | $ (0.01) | $ 0 | $ (0.02) | $ (0.01) | $ (0.01) | $ (0.01) | $ 0 | $ (0.03) | $ (0.03) |
Weighted average shares - basic | 172,575,820 | 168,396,553 | 163,285,738 | 161,057,300 | 159,778,165 | 150,550,189 | 150,302,013 | 150,144,575 | ||
Weighted average shares - diluted | 172,575,820 | 168,396,553 | 168,620,980 | 161,057,300 | 159,778,165 | 150,550,189 | 150,302,013 | 163,527,032 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Subsequent Event [Member] | Oct. 17, 2019USD ($)$ / sharesshares |
Series I Warrant [Member] | |
Subsequent Event [Line Items] | |
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.22 |
Warrant exercise term | 5 years |
Placement Agent Warrants [Member] | |
Subsequent Event [Line Items] | |
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.21875 |
Warrant exercise term | 5 years |
Warrants issued to purchase shares | shares | 1,071,429 |
Registered Direct Offering 2019 [Member] | |
Subsequent Event [Line Items] | |
Stock issued during period, shares, new issues | shares | 14,285,714 |
Share price | $ 0.175 |
Proceeds from issuance of common stock | $ | $ 2,500,000 |
Financing costs | $ | $ 312,000 |