Document And Entity Information
Document And Entity Information | 3 Months Ended |
Dec. 31, 2020 | |
Document And Entity Information | |
Document Type | S-1 |
Amendment Flag | false |
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 ($) | Dec. 31, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Sep. 30, 2018 |
Current assets: | |||||
Cash | $ 879,413 | $ 959,309 | $ 2,180,329 | ||
Inventory | 1,015,740 | 967,993 | 346,647 | ||
Prepaid expenses and other current assets | 197,131 | 215,673 | 362,705 | ||
Total current assets | 2,092,284 | 2,142,975 | 2,889,681 | ||
Long-term assets: | |||||
Property and equipment, net | 4,180 | 4,552 | 9,023 | ||
Other assets | 3,500 | 3,500 | 3,500 | ||
Total long-term assets | 7,680 | 8,052 | 12,523 | ||
Total assets | 2,099,964 | 2,151,027 | 2,902,204 | ||
Current liabilities: | |||||
Accounts payable | 391,151 | 342,050 | 533,555 | ||
Accrued expenses and other liabilities | 294,022 | 266,749 | 180,256 | ||
Current portion of PPP Loan | 57,273 | 37,442 | 0 | ||
Total current liabilities | 742,446 | 646,241 | 713,811 | ||
Long-term liabilities: | |||||
Long-term portion of PPP loan | 119,027 | 138,858 | 0 | ||
Promissory convertible debt | 550,000 | 0 | |||
Derivative liability | 2,207,475 | 2,316,419 | 2,995,690 | ||
Total long-term liabilities | 3,926,502 | 3,005,277 | 2,995,690 | ||
Total liabilities | 4,668,948 | 3,651,518 | 3,709,501 | ||
Commitments and contingencies | |||||
Stockholders' deficit: | |||||
Common stock, $0.001 par value, 800,000,000 shares authorized as of December 31, 2020 and September 30, 2020, 193,094,766 and 193,044,766 shares issued and outstanding as of December 31, 2020 and September 30, 2020, respectively | 193,045 | 193,045 | 172,612 | ||
Additional paid-in capital | 41,948,512 | 41,862,901 | 37,885,151 | ||
Accumulated deficit | (44,710,541) | (43,556,437) | (38,865,060) | ||
Total stockholders' deficit | (2,568,984) | (1,500,491) | $ (100,837) | (807,297) | $ 1,359,828 |
Total liabilities and stockholders' deficit | 2,099,964 | 2,151,027 | $ 2,902,204 | ||
Series 1 convertible notes | |||||
Long-term liabilities: | |||||
Convertible Notes Payable, Noncurrent | 550,000 | $ 550,000 | |||
Series 2 convertible notes | |||||
Long-term liabilities: | |||||
Convertible Notes Payable, Noncurrent | $ 1,050,000 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2020 | Sep. 30, 2020 | Jul. 01, 2020 | Jun. 30, 2020 | Sep. 30, 2019 |
Consolidated Balance Sheets | |||||
Common Stock, Par Value | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | |
Common Stock, Shares Authorized | 800,000,000 | 800,000,000 | 800,000,000 | 300,000,000 | 300,000,000 |
Common Stock, Shares Issued | 193,094,766 | 193,044,766 | 173,577,233 | ||
Common Stock, Shares Outstanding | 193,094,766 | 193,044,766 | 173,577,233 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2020 | Sep. 30, 2019 | |
Consolidated Statements of Operations | |||||||||||
Revenues | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 |
Operating expenses: | |||||||||||
General and administrative expenses | 919,458 | 975,833 | 3,759,554 | 3,974,919 | |||||||
Research and development expenses | 343,590 | 643,734 | 1,611,094 | 2,396,838 | |||||||
Total operating expenses | 1,263,048 | 1,619,567 | 5,370,648 | 6,371,757 | |||||||
Operating loss | (1,263,048) | (1,354,812) | (1,241,700) | (1,154,569) | (1,619,567) | (1,524,305) | (1,572,261) | (1,507,366) | (1,767,824) | (5,370,648) | (6,371,757) |
Other income/(expense) | |||||||||||
Decrease (increase) to fair value of derivative | 108,944 | (40,187) | 679,271 | 1,824,175 | |||||||
Total other income (expense) | 108,944 | (40,187) | 679,271 | 1,824,175 | |||||||
Net loss | $ (1,154,104) | $ (1,395,373) | $ (904,367) | $ (731,884) | $ (1,659,754) | $ (828,144) | $ (1,289,162) | $ 169,962 | $ (2,600,237) | $ (4,691,377) | $ (4,547,582) |
Earnings per share - basic and diluted | |||||||||||
Net loss per common share - basic and diluted | $ (0.01) | $ 0 | $ (0.01) | $ 0 | $ (0.01) | $ (0.01) | $ (0.01) | $ 0 | $ 0 | $ (0.02) | $ (0.03) |
Weighted common shares - basic and diluted | 193,044,766 | 192,855,962 | 188,340,505 | 186,897,947 | 184,102,916 | 188,051,683 | 166,339,862 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' (Deficit) - USD ($) | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total |
Balance at the beginning of the period at Sep. 30, 2018 | $ 159,815 | $ 35,517,491 | $ (34,317,478) | $ 1,359,828 |
Balance at the beginning of the period (in shares) at Sep. 30, 2018 | 159,815,013 | |||
Net loss | $ 0 | 0 | (4,547,582) | (4,547,582) |
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) | 477,269 | |||
Shares issued for the exercise of stock options | $ 88 | 32,312 | 0 | 32,400 |
Shares issued for the exercise of stock options (in shares) | 87,567 | |||
Issuance of restricted stock | $ 3,517 | (3,517) | 0 | 0 |
Issuance of restricted stock (in shares) | 3,517,000 | |||
Issuance of restricted stock for services | $ 100 | 42,900 | 0 | 43,000 |
Issuance of restricted stock for services (in shares) | 100,000 | |||
Stock based compensation expense | $ 0 | 1,184,349 | 0 | 1,184,349 |
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 | 172,612,233 | 173,577,233 | ||
Net loss | $ 0 | 0 | (1,659,754) | $ (1,659,754) |
Issuance of common stock and warrants, net of financing costs | $ 14,286 | 2,152,876 | 0 | 2,167,162 |
Issuance of common stock and warrants, net of financing costs (in shares) | 14,285,714 | |||
Stock based compensation expense | $ 0 | 199,052 | 0 | 199,052 |
Balance at the ending of the period at Dec. 31, 2019 | $ 186,898 | 40,237,079 | (40,524,814) | (100,837) |
Balance at the ending of the period (in shares) at Dec. 31, 2019 | 186,897,947 | |||
Balance at the beginning of the period at Sep. 30, 2019 | $ 172,612 | 37,885,151 | (38,865,060) | $ (807,297) |
Balance at the beginning of the period (in shares) at Sep. 30, 2019 | 172,612,233 | 173,577,233 | ||
Net loss | $ 0 | 0 | (4,691,377) | $ (4,691,377) |
Shares issued for the exercise of warrants | 5,182 | 927,546 | 0 | 932,728 |
Shares issued for the exercise of warrants(in shares) | 5,181,819 | |||
Issuance of common stock and warrants, net of financing costs | $ 14,286 | 2,152,876 | 0 | 2,167,162 |
Issuance of common stock and warrants, net of financing costs (in shares) | 14,285,714 | |||
Issuance of restricted stock | $ 965 | (965) | 0 | 0 |
Issuance of restricted stock (in shares) | 965,000 | |||
Stock based compensation expense | $ 0 | 898,293 | 0 | 898,293 |
Balance at the ending of the period at Sep. 30, 2020 | $ 193,045 | 41,862,901 | (43,556,437) | $ (1,500,491) |
Balance at the ending of the period (in shares) at Sep. 30, 2020 | 193,044,766 | 193,044,766 | ||
Net loss | $ 0 | 0 | (1,154,104) | $ (1,154,104) |
Stock based compensation expense | 0 | 85,611 | 0 | 85,611 |
Balance at the ending of the period at Dec. 31, 2020 | $ 193,045 | $ 41,948,512 | $ (44,710,541) | $ (2,568,984) |
Balance at the ending of the period (in shares) at Dec. 31, 2020 | 193,044,766 | 193,094,766 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Cash flows from operating activities: | ||||
Net loss | $ (1,154,104) | $ (1,659,754) | $ (4,691,377) | $ (4,547,582) |
Adjustments to reconcile net loss to cash used in operating activities: | ||||
Depreciation | 372 | 1,936 | 6,926 | 8,238 |
Stock-based compensation | 85,611 | 199,052 | 898,293 | 1,184,349 |
Issuance of restricted stock for services | 0 | 43,000 | ||
Increase in inventory reserve | 60,385 | 0 | ||
(Decrease) increase to fair value of derivative | (108,944) | 40,187 | (679,271) | (1,824,175) |
(Increase) decrease in: | ||||
Inventory | (47,747) | 146,292 | (681,731) | (346,647) |
Prepaid expenses and other current assets | 18,542 | 33,194 | 147,032 | (210,911) |
Increase (decrease) in: | ||||
Accounts payable | 49,101 | (132,007) | (191,505) | 372,609 |
Accrued expenses and other liabilities | 27,273 | 49,452 | 86,493 | 52,817 |
Net cash used in operating activities | (1,129,896) | (1,321,648) | (5,044,755) | (5,268,302) |
Cash flows from investing activities: | ||||
Purchases of property and equipment | 0 | (2,455) | (2,455) | 0 |
Net cash used in investing activities | 0 | (2,455) | (2,455) | 0 |
Cash flows from financing activities: | ||||
Proceeds received from PPP loan | 176,300 | 0 | ||
Proceeds received from Series 2 convertible notes | 550,000 | 0 | ||
Proceeds from issued common stock and warrants, net of financing costs | 0 | 2,167,162 | 2,167,162 | 2,748,821 |
Proceeds from exercise of warrants | 932,728 | 0 | ||
Proceeds from exercise of stock options | 0 | 32,400 | ||
Net cash provided by financing activities | 1,050,000 | 2,167,162 | 3,826,190 | 2,781,221 |
Net (decrease) increase in cash | (79,896) | 843,059 | (1,221,020) | (2,487,081) |
Cash, beginning of year | 959,309 | 2,180,329 | 2,180,329 | 4,667,410 |
Cash, end of period | 879,413 | 3,023,388 | 959,309 | 2,180,329 |
Non-cash financing activities: | ||||
Warrant derivative liability | 0 | 1,628,113 | ||
Exercise of stock options - cashless | 0 | 477 | ||
Issuance of restricted stock | 965 | 3,517 | ||
Issuance of restricted stock for services | 93,500 | 43,000 | ||
Series J Warrants issuance cost | $ 219,737 | $ 0 | ||
Series 2 convertible notes | ||||
Cash flows from financing activities: | ||||
Proceeds received from Series 2 convertible notes | $ 1,050,000 | $ 0 |
BASIS OF PRESENTATION AND DESCR
BASIS OF PRESENTATION AND DESCRIPTION OF BUSINESS | 3 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Sep. 30, 2020 | |
BASIS OF PRESENTATION AND DESCRIPTION OF BUSINESS | ||
BASIS OF PRESENTATION AND DESCRIPTION OF BUSINESS | 1. Organization and 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. | 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 | 3 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Sep. 30, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. The accompanying unaudited interim consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). The interim consolidated financial statements included herein are unaudited; however, they contain all normal recurring accruals and adjustments that, in the opinion of management, are necessary to present fairly our results of operations and financial position for the interim periods. Although we believe that the disclosures in these unaudited interim consolidated financial statements are adequate to make the information presented not misleading, certain information normally included in the footnotes prepared in accordance with US GAAP has been omitted as permitted by the rules and regulations of the Securities and Exchange Commission (“SEC”). These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10‑K for the fiscal year ended September 30, 2020, filed with the SEC on December 11, 2020. For a complete summary of our significant accounting policies, please refer to Note 2 included in Item 8 of our Form 10-K for the fiscal year ended September 30, 2020. There have been no material changes to our significant accounting policies during the three months ended December 31, 2020. 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. We are a biotechnology company marketing or developing a number of products and are 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) 2018-13, “Fair Value Measurement (Topic 820) Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement” was issued by the Financial Accounting Standards Board (FASB) in August 2018. The purpose of this amendment in this Update is to modify the disclosure requirements on fair value measurements in Topic 820. 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, 2019. The Company adopted ASU 2018-13 during our first quarter of fiscal year 2021. 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 December 31, 2020 and September 30, 2020. 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, goods-in-process and finished goods 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. 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. 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 three months ended December 31, 2020 and 2019 there has not been any impairment of long-lived assets. Leases The Company determines if an arrangement is a lease at its inception. Operating lease right-of-use (“ROU”) assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As our lease does not provide an implicit interest rate, we use an incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Lease expense for lease payments is recognized on a straight-line basis over the lease term. As of December 31, 2020 and September 30, 2020, our ROU asset is included in prepaid expenses and other current assets and the lease obligations is included in accrued expenses and other current liabilities on our consolidated balance sheets. As of December 31, 2020, ROU asset of approximately $30,000 represents our right to use an underlying asset for the lease term and the lease liabilities of approximately $30,000 represents our obligation to make lease payments arising from the lease. 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. 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 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 be recognized in the consolidated financial statements based on their fair values. 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 was 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 expected life for awards uses the 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 December 31, 2020 and September 30, 2020, the carrying amounts of cash, accounts payables and accrued expenses and other liabilities approximate fair value because of their short-term nature. The carrying amounts for the PPP Loan and the Convertible Notes approximate fair value. 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. Financial Statement Reclassification Certain balances in the prior year consolidated financial statements have been reclassified for comparison purposes to conform to the presentation in the current period consolidated financial statements. Subsequent Events The Company evaluated all events or transactions that occurred commencing from January 25, 2021 and ending on February 11, 2021 the date which these unaudited interim consolidated financial statements were issued. The Company disclosed material subsequent events, if any, in Note 16. 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 December 31, 2020, 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. Finally, some of our product candidates or the materials contained therein (such as the Active Pharmaceutical Ingredients (“APIs”) for our AC5(R) product line), are manufactured from facilities in areas impacted by the outbreak of the coronavirus, which could result in shortages due to ongoing efforts to address the outbreak. 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 its subsidiary 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. The continued spread of coronavirus and uncertain market conditions may also limit the Company’s ability to access capital. If the Company is unable to obtain adequate capital, the Company may be required to reduce the scope, delay, or eliminate some or all of its planned activities. These conditions, in the aggregate, raise substantial doubt as to the Company’s ability to continue as a going concern. 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. | 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. We are a biotechnology company marketing or developing a number of products and are 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 adopted ASU 2018-07 during our first quarter of fiscal year 2020, and the impact was considered immaterial on our consolidated financial statements. 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. The Company adopted ASU 2016-02 during our first quarter of fiscal year 2020, and the impact has been recorded within the consolidated financial statement using the modified retrospective method. 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, 2020 and September 30, 2019. 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, goods-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. Inventory reserves are included in research and development expenses for the fiscal year ended September 30, 2020. 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. 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, 2020 and 2019 there has not been any impairment of long-lived assets. Leases The Company determines if an arrangement is a lease at its inception. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As our lease does not provide an implicit interest rate, we use an incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Lease expense for lease payments is recognized on a straight-line basis over the lease term. As of September 30, 2020, our ROU asset is included in prepaid expenses and other current assets and the lease obligations is included in accrued expenses and other current liabilities on our consolidated balance sheets. The impact upon adoption was considered immaterial to the consolidated financial statements. As of September 30, 2020, the right-of-use (“ROU”) asset of approximately $39,000 represents our right to use an underlying asset for the lease term and the lease liabilities of approximately $39,000 represents our obligation to make lease payments arising from the lease. 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. 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 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 be recognized in the consolidated financial statements based on their fair values. 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 was 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, 2020 and September 30, 2019, the carrying amounts of cash, accounts payable, accrued expenses and other liabilities, approximate fair value because of their short-term nature. The carrying amounts for the PPP Loan and the Promissory convertible debt approximate fair value. 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, 2020 and ending on December 10, 2020 the date which these consolidated financial statements were issued. The Company disclosed material subsequent events in Note 20. 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, 2020, 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. Finally, some of our product candidates or the materials contained therein (such as the Active Pharmaceutical Ingredients (“APIs”) for our AC5 (R) product line), are manufactured from facilities in areas impacted by the outbreak of the coronavirus, which could result in shortages due to ongoing efforts to address the outbreak. 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 its subsidiary 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. The continued spread of coronavirus and uncertain market conditions may also limit the Company’s ability to access capital. If the Company is unable to obtain adequate capital, the Company may be required to reduce the scope, delay, or eliminate some or all of its planned commercial activities. These conditions, in the aggregate, raise substantial doubt as to the Company’s ability to continue as a going concern. 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 | 3 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Sep. 30, 2020 | |
PROPERTY AND EQUIPMENT | ||
PROPERTY AND EQUIPMENT | 3. At December 31, 2020 and September 30, 2020, property and equipment consisted of: Estimated Useful December 31, September 30, Life 2020 2020 Furniture and fixtures 5 years $ 9,357 $ 9,357 Leasehold improvements Life of Lease 8,983 8,983 Computer equipment 3 years 11,141 11,141 Lab equipment 5 years 1,000 1,000 30,481 30,481 Less – accumulated depreciation 26,301 25,929 Property and equipment, net $ 4,180 $ 4,552 For the three months ended December 31, 2020 and 2019 depreciation expense recorded was $372 and $1,936, respectively. | 3. PROPERTY AND EQUIPMENT At September 30, 2020 and September 30, 2019, property and equipment consisted of: Estimated September 30, September 30, Useful Life 2020 2019 Furniture and fixtures 5 years $ 9,357 $ 9,357 Leasehold improvements Life of Lease $ 8,983 $ 8,983 Computer equipment 3 years $ 11,141 $ 8,686 Lab equipment 5 years $ 1,000 $ 1,000 30,481 28,026 Less – accumulated depreciation 25,929 19,003 Property and equipment, net $ 4,552 $ 9,023 For the years ended September 30, 2020 and 2019 depreciation expense recorded was $6,926 and $8,238, respectively. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Sep. 30, 2020 | |
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: 2020 2019 Net operating loss carryforwards $ 8,451,214 $ 7,291,333 Capitalized expenditures 1,782,185 1,717,025 Research and experimentation credit carryforwards 928,734 898,610 Stock based compensation 2,321,519 2,139,119 Property and Equipment 3,152 2,234 Accrued expenses 18,518 13,660 Inventory allowance 16,497 — Deferred rent — 492 Gross deferred tax assets 13,521,819 12,062,473 Deferred tax asset valuation allowance (13,521,819) (12,062,473) Net deferred tax assets $ — $ — As of September 30, 2020 and 2019, the Company had federal net operating loss carryforwards of approximately $31,157,000 and $26,890,000, respectively, which may be available to offset future taxable income and which would begin to expire in 2026. As of September 30, 2020 and 2019, the Company had federal research and experimentation credit carryforwards of $657,000 and $542,000, respectively, which may be available to offset future income tax liabilities and which would begin to expire in 2029. As of September 30, 2020 and 2019, the Company had state net operating loss carryforwards of approximately $30,737,000 and $26,560,000, respectively, which may be available to offset future taxable income and which would begin to expire in 2030. As of September 30, 2020 and 2019, the Company had state research and experimentation credit carryforwards of $345,000 and $305,000, 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, 2020 and 2019 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 2020 by approximately $1,459,000 and increased in 2019 by approximately $1,835,000. 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, 2020, the Company is open to examination in the U.S. federal and certain state jurisdictions for tax years ended September 30, 2020, 2019, 2018 and 2017. 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 2019 remain open for examination by the IRS. |
INVENTORIES
INVENTORIES | 3 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Sep. 30, 2020 | |
INVENTORIES | ||
INVENTORIES | 4 . INVENTORIES Inventories consist of the following: December 31, September 30, 2020 2020 Finished Goods $ 300,009 $ — Goods-in-process 715,731 967,993 Total $ 1,015,740 $ 967,993 The Company capitalizes inventory that has been produced for commercial sale and has been determined to have a probable future economic benefit. The determination of whether or not the inventory has a future economic benefit requires estimates by management. Our inventory levels are analyzed to identify inventory that may expire prior to sale. To the extent that inventory is expected to expire prior to being sold, the Company will write down the value of inventory. | 5 . INVENTORIES Inventories consist of the following: September 30, September 30, 2020 2019 Goods-in-process $ 1,028,378 $ 328,500 Raw Material — 18,147 Inventory Reserves (60,385) — Total $ 967,993 $ 346,647 The increase in inventory is due to continued manufacturing and receipt of product in preparation for commercialization. There was no reserve as of September 30, 2019. Included in research and development expense for the year ended September 30, 2020 is an increase to the inventory reserve of $60,385 which the majority of which is attributable to required product testing during the manufacturing process. In determining net realizable value, appropriate consideration is given to obsolescence, excessive levels, deterioration, and other factors in evaluating net realizable value. |
2015 PRIVATE PLACEMENT FINANCIN
2015 PRIVATE PLACEMENT FINANCING | 3 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Sep. 30, 2020 | |
2015 Private Placement Financing [Member] | ||
Private Placement [Line Items] | ||
2015 PRIVATE PLACEMENT FINANCING | 6. 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. On June 3, 2020, the Company entered into an agreement (the “Agreement”) with the holders of a majority (the “Majority Holders”) of the outstanding Series D Warrants (the “Warrant”) resulting in approximately $850,000 of proceeds as a result of the full exercise of their Warrants. The Agreement provides for the reduction of the Series D Warrant exercise price from $0.25 to $0.18 per share, and the elimination of a provision that prevents the Series D Warrants from being exercised if the holder’s beneficial ownership would exceed 4.9% as a result. Under the terms of the Agreement, in exchange for fully exercising their remaining Warrants for 4,727,273 shares of common stock on June 4, 2020, the Majority Holders were issued Series J Warrants to purchase 3,545,454 shares of common stock at an exercise price of $0.25 over a 1 year term. On June 22, 2020, the Company entered into a Series J Warrant Issuance Agreement (the “Keyes Sulat Agreement”) with the Keyes Sulat Revocable Trust (the “ Trust ”), also a holder of outstanding Series D Warrants, resulting in approximately $82,000 of proceeds as a result of the full exercise of the Trust’s Warrants. Under the terms of the Keyes Sulat Agreement, in exchange for fully exercising the Trust’s remaining Warrants for 454,546 shares of common stock on June 22, 2020, the Trust was issued Series J Warrants to purchase 340,910 shares of common stock at an exercise price of $0.25 over a 1 year term. James R. Sulat, a member of the Board, is a co-trustee of the Trust, of which members of Mr. Sulat’s immediate family are beneficiaries. Mr. Sulat disclosed his interest in the Trust to the Board prior to its approval of the transaction and abstained from voting on the transaction. On November 6, 2020, as consideration for investment in the Convertible Notes, the Company entered into that certain Amendment to Series J Warrant to Purchase Common Stock, a holder of a Series J Warrant exercisable for up to 3,375,000 shares of Common Stock, to extend the term of the Series J Warrant from one (1) year to thirty (30) months. As a result of the issuance of the Series J Warrants, in conjunction with the exercise of the Series D Warrants, the Company recorded in equity a noncash equity issuance cost valued at approximately $220,000. This charge was estimated using the Black-Scholes Option Pricing Model with the following assumptions; expected volatility, 88.15%, risk-free interest rate, 0.16%, expected forfeiture rate, 0%, expected dividend yield, 0%, expected term, 1.08 years. The Series J Warrants are indexed to the Company’s stock and are classified as equity. During the year ended September 30, 2020, Series D Warrants had been exercised on a cash basis for an aggregate issuance of 5,181,819 shares of the Company’s common stock resulting in gross proceeds to the Company of $932,728. During the fiscal year ended September 30, 2019, no Series D Warrants had been exercised. As of September 30, 2020, 3,792,570 Series D Warrants expired. Common Stock At June 30, 2015 the 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 and the Series J Warrants are indexed to the Company’s stock, they are classified within stockholders’ equity (deficit) in the accompanying consolidated financial statements. | 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. On June 3, 2020, the Company entered into an agreement (the “ Agreement ”) with the holders of a majority (the “ Majority Holders ”) of the outstanding Series D Warrants (the “ Warrant ”) resulting in approximately $850,000 of proceeds as a result of the full exercise of their Warrants. The Agreement provides for the reduction of the Series D Warrant exercise price from $0.25 to $0.18 per share, and the elimination of a provision that prevents the Series D Warrants from being exercised if the holder’s beneficial ownership would exceed 4.9% as a result. Under the terms of the Agreement, in exchange for fully exercising their remaining Warrants for 4,727,273 shares of common stock on June 4, 2020, the Majority Holders were issued Series J Warrants to purchase 3,545,454 shares of common stock at an exercise price of $0.25 over a 1 year term. On June 22, 2020, the Company entered into a Series J Warrant Issuance Agreement (the “Keyes Sulat Agreement”) with the Keyes Sulat Revocable Trust (the “ Trust ”), also a holder of outstanding Series D Warrants, resulting in approximately $82,000 of proceeds as a result of the full exercise of the Trust’s Warrants. Under the terms of the Keyes Sulat Agreement, in exchange for fully exercising the Trust’s remaining Warrants for 454,546 shares of common stock on June 22, 2020, the Trust was issued Series J Warrants to purchase 340,910 shares of common stock at an exercise price of $0.25 over a 1 year term. James R. Sulat, a member of the Board, is a co-trustee of the Trust, of which members of Mr. Sulat’s immediate family are beneficiaries. Mr. Sulat disclosed his interest in the Trust to the Board prior to its approval of the transaction and abstained from voting on the transaction. As a result of the issuance of the Series J Warrants, in conjunction with the exercise of the Series D Warrants, the Company recorded in equity a noncash equity issuance cost valued at approximately $220,000. This charge was estimated using the Black-Scholes Option Pricing Model with the following assumptions; expected volatility, 88.15%, risk-free interest rate, 0.16%, expected forfeiture rate, 0%, expected dividend yield, 0%, expected term, 1.08 years. The series J Warrants are indexed to the Company’s stock and are classified as equity. During the fiscal year ended September 30, 2020, Series D Warrants had been exercised on a cash basis for an aggregate issuance of 5,181,819 shares of the Company’s common stock resulting in gross proceeds to the Company of $932,728. During the fiscal year ended September 30, 2019, no Series D Warrants had been exercised. As of September 30, 2020, 3,792,570 Series D Warrants expired. Common Stock At June 30, 2015 the 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 and the Series J 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 | 3 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Sep. 30, 2020 | |
Private Placement 2016 [Member] | ||
Private Placement [Line Items] | ||
2016 PRIVATE PLACEMENT FINANCING | 7. 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 three months ended December 31, 2020 and 2019, no Series E Warrants had been exercised. As of December 31, 2020, 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. | 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 fiscal years ended September 30, 2020 and 2019, no Series E Warrants had been exercised. As of September 30, 2020, 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 | 3 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Sep. 30, 2020 | |
REGISTERED DIRECT OFFERING 2017 [Member] | ||
REGISTERED DIRECT OFFERING [Line Items] | ||
2017 REGISTERED DIRECT OFFERING | 8 . 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, a Series F Warrant equal to 55% of the shares 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. During the three months ended December 31, 2020 and 2019, no Series F Warrants had been exercised. As of December 31, 2020, 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 three months ended December 31, 2020 and 2019, $0 and $274,404 were recorded to decrease the fair value of derivative, respectively. Fair Value Measurements Using Significant Unobservable Inputs December 31, September 30, (Level 3) 2020 2020 Beginning balance at September 30, 2020 and 2019 $ 1,000,000 $ 1,000,000 Issuances — — Adjustments to estimated fair value — — Ending balance at December 31, 2020 and September 30, 2020 $ 1,000,000 $ 1,000,000 The derivative liabilities were valued as of December 31, 2020 and September 30, 2020 using the Black Scholes Model with the following assumptions: December 31, September 30, 2020 2020 Closing price per share of common stock $ 0.15 $ 0.17 Exercise price per share $ 0.75 $ 0.75 Expected volatility 82.10 % 84.17 % Risk-free interest rate 0.10 % 0.13 % Dividend yield — — Remaining expected term of underlying securities (years) 1.35 | 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. During the fiscal years ended September 30, 2020 and 2019, no Series F Warrants had been exercised. As of September 30, 2020, 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 years ended September 30, 2020 and 2019, $0 and $274,404 were recorded to decrease the fair value of derivative, respectively. Fair Value Measurements Using Significant Unobservable Inputs September 30, September 30, (Level 3) 2020 2019 Beginning balance at beginning of year $ 1,000,000 $ 1,274,404 Issuances — — Adjustments to estimated fair value — (274,404) Ending balance at end of year $ $ The derivative liabilities were valued as of September 30, 2020 and September 30, 2019 using the Black Scholes Model with the following assumptions: September 30, September 30, 2020 2019 Closing price per share of common stock $ 0.17 $ 0.24 Exercise price per share $ 0.75 $ 0.75 Expected volatility 84.17 % 78.15 % Risk-free interest rate 0.13 % 1.60 % Dividend yield — — Remaining expected term of underlying securities (years) 1.35 2.37 |
2018 REGISTERED DIRECT OFFERING
2018 REGISTERED DIRECT OFFERING | 3 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Sep. 30, 2020 | |
Registered Direct Offering 2018 [Member] | ||
REGISTERED DIRECT OFFERING 2018 [Line Items] | ||
2018 REGISTERED DIRECT OFFERING | 9. 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, a Series G Warrant to purchase up to a number of shares of our common stock equal to 75% of the shares 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. 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. 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, 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. During the three months ended December 31, 2020 and 2019, no Series G Warrants had been exercised. As of December 31, 2020, 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. During the three months ended December 31, 2020 and 2019, $0 were recorded to decrease the fair value of derivative, respectively. Fair Value Measurements Using Significant Unobservable Inputs December 31, September 30, (Level 3) 2020 2020 Beginning balance at September 30, 2020 and 2019 $ 748,275 $ 748,275 Issuances — — Adjustments to estimated fair value — — Ending balance at December 31, 2020 and September 30, 2020 $ 748,275 $ 748,275 The derivative liabilities were valued as of December 31, 2020 and September 30, 2020 using the Black Scholes Model with the following assumptions: December 31, September 30, 2020 2020 Closing price per share of common stock $ 0.15 $ 0.17 Exercise price per share $ 0.70 $ 0.70 Expected volatility 83.31 % 83.31 % Risk-free interest rate 0.15 % 0.15 % Dividend yield — — Remaining expected term of underlying securities (years) 2.71 | 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, 2018), 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. During the years ended September 30, 2020 and 2019, no Series G Warrants had been exercised. As of September 30, 2020, 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 years ended September 30, 2020 and 2019, $0 and $1,169,073 were recorded to decrease the fair value of derivative, respectively Fair Value Measurements Using Significant Unobservable Inputs September 30, September 30, (Level 3) 2020 2019 Beginning balance at beginning of year $ 748,275 $ 1,917,348 Issuances — — Adjustments to estimated fair value — (1,169,073) Ending balance at end of year $ 748,275 $ 748,275 The derivative liabilities were valued as of September 30, 2020 and September 30, 2019 using the Black Scholes Model with the following assumptions: September 30, September 30, 2020 2019 Closing price per share of common stock $ 0.17 $ 0.24 Exercise price per share $ 0.70 $ 0.70 Expected volatility 83.31 % 78.72 % Risk-free interest rate 0.15 % 1.56 % Dividend yield — — Remaining expected term of underlying securities (years) 2.71 3.73 |
2019 REGISTERED DIRECT OFFERING
2019 REGISTERED DIRECT OFFERING | 3 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Sep. 30, 2020 | |
Registered Direct Offering 2019 [Member] | ||
REGISTERED DIRECT OFFERING 2019 [Line Items] | ||
2019 REGISTERED DIRECT OFFERING | 10. 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 (“the 2019 Warrant Shares”) 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, 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. During the three months ended December, 2020 and 2019, no Series H Warrants had been exercised. As of December 31, 2020, 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 three months ended December 31, 2020 and 2019 $108,944 and ($40,187) was recorded to decrease/(increase) the fair value of derivative liability. Fair Value Measurements Using Significant Unobservable Inputs December 31, September 30, (Level 3) 2020 2020 Beginning balance at September 30, 2020 and 2019 $ 568,144 $ 1,247,415 Issuances — — Adjustments to estimated fair value (108,944) (679,271) Ending balance at December 31, 2020 and September 30, 2020 $ 459,200 $ 568,144 The derivative liabilities were valued as of December 31, 2020 and September 30, 2020 using the Black Scholes Model with the following assumptions: December 31, September 30, 2020 2020 Closing price per share of common stock $ 0.15 $ 0.17 Exercise price per share $ 0.40 $ 0.40 Expected volatility 82.41 % 82.24 % Risk-free interest rate 0.27 % 0.22 % Dividend yield — — Remaining expected term of underlying securities (years) 3.60 | 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. During the fiscal years ended September 30, 2020 and 2019, no Series H Warrants had been exercised. As of September 30, 2020, 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 years ended September 30, 2020 and 2019, $679,271 and $380,698, respectively, was recorded to decrease the fair value of derivative. Fair Value Measurements Using Significant Unobservable Inputs September 30, September 30, (Level 3) 2020 2019 Beginning balance at beginning of year $ 1,247,415 $ — Issuances — 1,628,113 Adjustments to estimated fair value (679,271) (380,698) Ending balance at end of year $ 568,144 $ 1,247,415 The derivative liabilities were valued as of September 30, 2020, September 30, 2019 and May 14, 2019 using the Black Scholes Model with the following assumptions: September 30, September 30, May 14, 2020 2019 2019 Closing price per share of common stock $ 0.17 $ 0.24 $ 0.283 Exercise price per share $ 0.40 $ 0.40 $ 0.40 Expected volatility 82.24 % 92.11 % 93.44 % Risk-free interest rate 0.22 % 1.55 % 2.20 % Dividend yield — — — Remaining expected term of underlying securities (years) 3.60 4.61 5.00 |
OCTOBER 2019 REGISTERED DIRECT
OCTOBER 2019 REGISTERED DIRECT OFFERING | 3 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Sep. 30, 2020 | |
Registered Direct Offering 2019 [Member] | ||
REGISTERED DIRECT OFFERING 2019 [Line Items] | ||
OCTOBER 2019 REGISTERED DIRECT OFFERING | 11. On October 16, 2019, the Company entered into a Securities Purchase Agreement (“October 2019 SPA”) with 7 accredited investors (“October 2019 Investors”) providing for the issuance and sale by the Company to the 2019 Investors of an aggregate of 14,285,714 units at a purchase price of $0.175 per Unit in a registered offering (“October 2019 Financing”). The securities comprising the units sold in the October 2019 Financing were issued under the Shelf Registration Statement, and consisted of a share of Common Stock, and a Series I Warrant to purchase one share of Common Stock at an exercise price of $0.22 per share at any time prior to the fifth anniversary of the issuance date of the Series I Warrant subject to certain restrictions on exercise (“October 2019 Warrants”) and the shares issuable upon exercise of the October 2019 Warrants, (“October 2019 Warrant Shares”). As of October 18, 2019, the Company recorded the 14,285,714 shares as Common Stock. Pursuant to the Engagement Agreement (as defined below), 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. The gross proceeds to Arch from the October 2019 Financing were approximately $2.5 million before deducting financing costs of approximately $333,000 which includes approximately $158,000 of placement fees. The number of shares of the Company’s Common Stock into which each of the Series I Warrants is exercisable and the exercise price therefore are subject to adjustment, as set forth in the Series I Warrants, including adjustments for stock subdivisions or combinations (by any stock split, stock dividend, recapitalization, reorganization, scheme, arrangement or otherwise). We engaged H.C. Wainwright (“Wainwright”) as our exclusive institutional investor placement agent in connection with the October SPA pursuant to an engagement agreement (the “Engagement Agreement”) dated as of October 10, 2019, and in consideration for the services provided by it, Wainwright was entitled to receive cash fees ranging from 6.0% to 8.2% of the gross proceeds received by us, as well as reimbursement for all reasonable expenses incurred by it in connection with its engagement. We received gross proceeds of approximately $2.5 million in the aggregate, resulting in a fee of approximately $158,000. During the three months ended December 31, 2020 and 2019, no Series I Warrants or Placement Agent Warrants had been exercised. As of December 31, 2020, up to 14,285,714 and 1,071,429 shares may be acquired upon the exercise of the Series I Warrants and Placement Agent Warrants, respectively. Common Stock At October 18, 2019 the Closing Date of the October 2019 Financing, the Company issued 14,285,714 shares of Common Stock. Equity Value of Warrants The Company accounted for the Series I Warrants and the Placement Agent Warrants relating to the aforementioned October 2019 Registered Direct Offering in accordance with ASC 815-40, Derivatives and Hedging . Because the Series I Warrants and the Placement Agent Warrants are indexed to the Company’s stock, they are classified within stockholders’ equity (deficit) in the accompanying consolidated financial statements. | 11. OCTOBER 2019 REGISTERED DIRECT OFFERING On October 16, 2019, the Company entered into a Securities Purchase Agreement (“October 2019 SPA”) with 7 accredited investors (“October 2019 Investors”) providing for the issuance and sale by the Company to the 2019 Investors of an aggregate of 14,285,714 units at a purchase price of $0.175 per Unit in a registered offering (“October 2019 Financing”). The securities comprising the units sold in the October 2019 Financing were issued under the Shelf Registration Statement, and consisted of a share of Common Stock, and a Series I Warrant to purchase one share of Common Stock at an exercise price of $0.22 per share at any time prior to the fifth anniversary of the issuance date of the Series I Warrant subject to certain restrictions on exercise (“October 2019 Warrants”) and the shares issuable upon exercise of the October 2019 Warrants, (“October 2019 Warrant Shares”). As of October 18, 2019, the Company recorded the 14,285,714 shares as Common Stock. Pursuant to the Engagement Agreement (as defined below), 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. The gross proceeds to Arch from the October 2019 Financing, which were received as of October 18, 2019, were approximately $2.5 million before deducting financing costs of approximately $333,000 which includes approximately $158,000 of placement fees. The number of shares of the Company’s Common Stock into which each of the Series I Warrants is exercisable and the exercise price therefore are subject to adjustment, as set forth in the Series I Warrants, including adjustments for stock subdivisions or combinations (by any stock split, stock dividend, recapitalization, reorganization, scheme, arrangement or otherwise). We engaged H.C. Wainwright (“Wainwright”) as our exclusive institutional investor placement agent in connection with the October SPA pursuant to an engagement agreement (the “Engagement Agreement”) dated as of October 10, 2019, and in consideration for the services provided by it, Wainwright was entitled to receive cash fees equal ranging from 6.0% to 8.2% of the gross proceeds received by us, as well as reimbursement for all reasonable expenses incurred by it in connection with its engagement. We received gross proceeds of approximately $2.5 million in the aggregate, resulting in a fee of approximately $158,000. During the year ended September 30, 2020, no Series I Warrants or Placement Agent Warrants had been exercised. As of September 30, 2020, up to 14,285,714 and 1,071,429 shares may be acquired upon the exercise of the Series I Warrants and Placement Agent Warrants, respectively. Common Stock At October 18, 2019 the Closing Date of the October 2019 Financing, the Company issued 14,285,714 shares of Common Stock. Equity Value of Warrants The Company accounted for the Series I Warrants and the Placement Agent Warrants relating to the aforementioned October 2019 Registered Direct Offering in accordance with ASC 815-40, Derivatives and Hedging . Because the Series I Warrants and the Placement Agent Warrants are indexed to the Company’s stock, they are classified within stockholders’ equity (deficit) in the accompanying consolidated financial statements. |
CONVERTIBLE NOTES
CONVERTIBLE NOTES | 12 Months Ended |
Sep. 30, 2020 | |
CONVERTIBLE NOTES | |
Debt Disclosure [Text Block] | 12. CONVERTIBLE NOTES On June 4, 2020, the Company issued unsecured 10% Convertible Notes in the aggregate principal amount of $550,000. The Series 1 Convertible Notes provide, among other things, for (i) a term of approximately three (3) years; (ii) the Company’s ability to prepay the Series 1 Convertible Notes, in whole or in part, at any time; (iii) the automatic conversion of the Series 1 Convertible Notes upon a Change of Control (all capitalized terms not otherwise defined to have the meaning ascribed to such terms in the Series 1Convertible Notes) into shares of the Company’s common stock, par value $0.001 per share (Common Stock), at a per share price of $0.27 (the “ Conversion Price ”); (iv) the ability of a holder of a Convertible Note (a “ Holder ”) to convert the Series 1 Convertible Note and accrued interest, in whole or in part, into shares of Common Stock at the Conversion Price; (v) the Company’s ability to convert all Note Obligations outstanding upon a Qualified Equity Financing into shares of Common Stock at the Conversion Price; (vi) the Company’s ability to convert Series 1Convertible Notes and accrued interest, in whole or in part, into shares of Common Stock at the Conversion Price in the event the volume weighted average price (“VWAP”) of the Common Stock equals or exceeds $0.32 per share for at least fifteen (15) consecutive Trading Days; (vii) the Company’s ability to convert all outstanding Note Obligations into shares of Common Stock at the Conversion Price (an “ In-Kind Note Repayment ”) in lieu of repaying the Note Obligations outstanding on the Maturity Date, June 30, 2023; provided, however, that in the case of an In-Kind Note Repayment, the outstanding Note Obligations will be calculated by increasing by thirty-five percent (35)% the aggregate sum of the unpaid Principal Amount held by each Holder and the accrued interest at a rate of ten percent (10)% per annum, subject to, with respect to any portion of the Principal Amount that is converted or prepaid before the twelve month anniversary of the Issuance Date, a minimum interest payment equal to ten percent (10)% of the amount that is converted or prepaid. During the year ended September 30, 2020, the Company recorded interest expense as part of general and administrative expenses of approximately $18,000. |
PAYROLL PROTECTION PROGRAM LOAN
PAYROLL PROTECTION PROGRAM LOAN | 3 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Sep. 30, 2020 | |
PAYROLL PROTECTION PROGRAM LOAN | ||
PAYROLL PROTECTION PROGRAM LOAN | 14. On April 25, 2020, the Company executed a promissory note (the “ PPP Note ”) evidencing an unsecured loan in the amount of $176,300 under the Paycheck Protection Program (the “ PPP Loan ”). The Paycheck Protection Program (or “ PPP ”) was established under the Coronavirus Aid, Relief, and Economic Security Act (the “ CARES Act ”) and is administered by the U.S. Small Business Administration (“ SBA ”). The Loan has been made through First Republic Bank (the “ Lender ”). The PPP Loan has a two-year term and bears interest at a rate of 1.00% per annum. Monthly principal and interest payments are deferred until the earliest of ten months after the end of our covered period or the date the SBA makes a decision on our loan forgiveness application. Unless the PPP Loan is forgiven, the Company will be required to make monthly payments of principal and interest of approximately $20,000 to the Lender. The PPP Note contains customary events of default relating to, among other things, payment defaults, providing materially false and misleading representations to the SBA or Lender, or breaching the terms of the PPP Loan documents. The occurrence of an event of default may result in the immediate repayment of all amounts outstanding, collection of all amounts owing from the Company, or filing suit and obtaining judgment. Under the terms of the CARES Act, PPP Loan recipients can apply for and be granted forgiveness for all or a portion of loan granted under the PPP. Such forgiveness will be determined, subject to limitations, based on the use of loan proceeds for payment of payroll costs and any payments of mortgage interest, rent, and utilities. However, no assurance is provided that forgiveness for any portion of the PPP Loan will be obtained. During November 2020, the Company applied for forgiveness of the PPP Loan. | 13. PAYROLL PROTECTION PROGRAM LOAN On April 25, 2020, the Company executed a promissory note (the “ PPP Note ”) evidencing an unsecured loan in the amount of $176,300 under the Paycheck Protection Program (the “ PPP Loan ”). The Paycheck Protection Program (or “ PPP ”) was established under the Coronavirus Aid, Relief, and Economic Security Act (the “ CARES Act ”) and is administered by the U.S. Small Business Administration (“ SBA ”). The Loan has been made through First Republic Bank (the “ Lender ”). The PPP Loan has a two-year term and bears interest at a rate of 1.00% per annum. Monthly principal and interest payments are deferred until the earliest of ten months after the end of our covered period or the date the SBA makes a decision on our loan forgiveness application. Unless the PPP Loan is forgiven, the Company will be required to make monthly payments of principal and interest of approximately $20,000 to the Lender. The PPP Note contains customary events of default relating to, among other things, payment defaults, providing materially false and misleading representations to the SBA or Lender, or breaching the terms of the PPP Loan documents. The occurrence of an event of default may result in the immediate repayment of all amounts outstanding, collection of all amounts owing from the Company, or filing suit and obtaining judgment. Under the terms of the CARES Act, PPP Loan recipients can apply for and be granted forgiveness for all or a portion of loan granted under the PPP. Such forgiveness will be determined, subject to limitations, based on the use of loan proceeds for payment of payroll costs and any payments of mortgage interest, rent, and utilities. However, no assurance is provided that forgiveness for any portion of the PPP Loan will be obtained. During November 2020, the Company applied for forgiveness of the PPP Loan. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 3 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Sep. 30, 2020 | |
STOCK-BASED COMPENSATION | ||
STOCK-BASED COMPENSATION | 5. 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, 2020, a maximum number of 28,114,256 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, 2020, the aggregate number of authorized shares under the Plan was further increased by 3,000,000 shares to a total of 31,114,256 shares. As of December 31, 2020, a total of 19,179,212 options had been issued to employees and directors and 8,692,500 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 three months ended December 31, 2020, the Company granted no options to employees and directors and 975,000 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 three months ended December 31, 2020 was based on the fair market value 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 three months ended December 31, 2020; expected volatility, 79.44% - 119.44%, risk-free interest rate, 0.13% – 2.85%, expected forfeiture rate, 0%, expected dividend yield, 0%, expected term, 5.6 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 was 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 three months ended December 31, 2020 follows: Weighted Weighted Average Option Average Remaining Aggregate Shares Exercise Contractual Intrinsic Outstanding Price Term (years) Value Outstanding at September 30, 2020 18,248,346 $ 0.36 2.59 $ 79,330 Awarded 975,000 $ 0.17 — — Forfeited/Cancelled (148,191) $ 0.44 — — Outstanding at December 31, 2020 19,075,155 $ 0.35 2.61 $ 119,733 Vested at December 31, 2020 16,587,085 $ 0.37 2.64 $ 70,693 Vested and expected to vest at December 31, 2020 19,075,155 $ 0.35 2.61 $ 119,733 As of December 31, 2020, 6,873,199 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 three months ended December 31, 2020 and 2019 resulting from stock options awarded to the Company’s employees, directors and consultants was approximately $86,000 and $159,000, respectively. Of this amount during the three months ended December 31, 2020 and 2019, $26,000 and $76,000, respectively, were recorded as research and development expenses, and $60,000 and $83,000, respectively were recorded as general and administrative expenses in the Company’s Consolidated Statements of Operations. During the three months ended December 31, 2020 and 2019, no stock options awarded under the 2013 Stock Incentive Plan were exercised. As of December 31, 2020, there is approximately $265,000 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 1.41 years. Restricted Stock On October 14, 2020, the Company awarded 50,000 shares of Restricted Stock to a consultant. The shares subject to this grant are awarded under the 2013 Plan and vest 90 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 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. Avtar Dhillon in his capacity as a consultant. The shares subject to this grant are awarded under the 2013 Plan and 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. As of September 30, 2020, all restricted shares have vested. 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. As of September 30, 2020, all restricted shares have vested. Restricted stock activity in shares under the 2013 Plan for the three months ended December 31, 2020 and 2019 follows: 2020 2019 Non Vested at September 30, 2020 and 2019 — 965,000 Awarded 50,000 — Vested — — Forfeited — — Non Vested at December 31, 2020 and 2019 50,000 965,000 The weighted average restricted stock award date fair value information for the three months ended December 31, 2020 and 2019 follows: 2020 2019 Non Vested at September 30, 2020 and 2019 $ — $ 0.57 Awarded 0.18 — Vested — — Forfeited — — Non Vested at December 31, 2020 and 2019 $ 0.18 $ 0.57 For the three months ended December 31, 2020 and 2019 compensation expense recorded for the restricted stock awards was approximately $0 and $40,000, respectively. | 14. 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, 2020, a maximum number of 28,114,256 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, 2020, the aggregate number of authorized shares under the Plan was further increased by 3,000,000 shares to a total of 31,114,256 shares. As of September 30, 2020, a total of 19,179,212 options had been issued to employees and directors and 7,717,500 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 year ended September 30, 2020, the Company granted 2,685,000 options to employees and directors and 690,000 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 year ended September 30, 2020 was based on the fair market value 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 year ended September 30, 2020; expected volatility, 79.44% - 119.44%, risk-free interest rate, 0.13% - 3.23%, expected forfeiture rate, 0%, expected dividend yield, 0%, expected term, 5.6 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 was 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, 2020 follows: Weighted Weighted Average Option Average Remaining Aggregate Shares Exercise Contractual Intrinsic Outstanding Price Term (years) Value Outstanding at September 30, 2019 15,807,911 $ 0.40 3.14 $ 142,810 Awarded 3,375,000 $ 0.22 — — Forfeited/Cancelled (934,565) $ 0.44 — — Outstanding at September 30, 2020 18,248,346 $ 0.36 2.59 $ 79,330 Vested at September 30, 2020 16,077,006 $ 0.38 2.78 $ 69,305 Vested and expected to vest at September 30, 2020 18,248,346 $ 0.36 2.59 $ 79,330 As of September 30, 2020, 4,750,008 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 year ended September 30, 2020 and 2019 resulting from stock options awarded to the Company’s employees, directors and consultants was approximately $678,000 and $830,000, respectively. Of this amount during the years ended September 30, 2020 and 2019, $288,000 and $483,000, respectively, were recorded as research and development expenses, and $390,000 and $347,000, respectively were recorded as general and administrative expenses in the Company’s Consolidated Statements of Operations. During the year ended September 30, 2020, no stock options awarded under the 2013 Stock Incentive Plan were exercised for cash. 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, 2020, no stock options awarded under the 2013 Stock Incentive Plan were exercised on a cashless basis. 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. As of September 30, 2020, there is approximately $268,000 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 1.80 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. Avtar Dhillon in his capacity as a consultant. The shares subject to this grant are awarded under the 2013 Plan and 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. As of September 30, 2020, all restricted shares have vested. 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. As of September 30, 2020, all restricted shares have vested. 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 were awarded under the 2013 Plan and fully vested 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 would have immediately vested. Restricted stock activity in shares under the 2013 Plan for the years ended September 30, 2020 and 2019 follows: 2020 2019 Non Vested at September 30, 2019 and 2018 965,000 2,815,000 Awarded — — Vested (965,000) (1,850,000) Forfeited — — Non Vested at September 30, 2020 and 2019 — 965,000 The weighted average restricted stock award date fair value information for the years ended September 30, 2020 and 2019 follows: 2020 2019 Non Vested at September 30, 2019 and 2018 $ 0.43 $ 0.57 Awarded — — Vested (0.43) (0.64) Forfeited — — Non Vested at September 30, 2020 and 2019 $ — $ 0.43 For the years ended September 30, 2020 and 2019 compensation expense recorded for the restricted stock awards was approximately $220,000 and $397,000, respectively. |
RESTRICTED STOCK AWARDED OUTSID
RESTRICTED STOCK AWARDED OUTSIDE THE 2013 STOCK INCENTIVE PLAN | 12 Months Ended |
Sep. 30, 2020 | |
RESTRICTED STOCK AWARDED OUTSIDE THE 2013 STOCK INCENTIVE PLAN | |
RESTRICTED STOCK AWARDED OUTSIDE THE 2013 STOCK INCENTIVE PLAN | 15. 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 were scheduled to 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 would have immediately vested. During the year ended September 30, 2020 and 2019, 0 and 1,767,000 shares of restricted stock, respectively, awarded outside the 2013 Plan vested. Restricted Stock activity in shares for the year ended September 30, 2020 and 2019 is as follows: 2019 Non Vested at September 30, 2019 and 2018 1,767,000 Awarded — Vested (1,767,000) Forfeited — Non Vested at September 30, 2020 and 2019 — The weighted average restricted stock award date fair value information for the year ended September 30, 2020 and 2019 follows: 2019 Non Vested at September 30, 2019 and 2018 $ 0.39 Awarded — Vested 0.39 Forfeited — Non Vested at September 30, 2020 and 2019 $ — For both of the years ended September 30, 2020 and 2019, compensation expense recorded for the restricted stock awards was $0. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Sep. 30, 2020 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 16. 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, 2020 and 2019, 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, 2020 and 2019. For the years ended September 30, 2020 and 2019, 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, 2020. 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 The Company's corporate offices are located in Framingham, MA. 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. During August 2020, we extended the lease through September 30, 2021 at our current location pursuant to which we are obligated to pay annual rent of $42,000. As of September 30, 2020, the right-of-use ("ROU") asset of approximately $39,000 represents our right to use an underlying asset for the lease term and the lease liabilities of approximately $39,000 represents our obligation to make lease payments arising from the lease. Our ROU asset is included in prepaid expenses and other current assets and the lease obligations is included in accrued expenses and other current liabilities on our consolidated balance sheets. The impact upon adoption was considered immaterial to the consolidated financial statements. We believe our present offices are suitable for our current and planned near-term operations. For the fiscal year ending September 30, 2021 the Company's annual lease commitment is $42,000. |
SELECTED QUARTERLY FINANCIAL DA
SELECTED QUARTERLY FINANCIAL DATA | 12 Months Ended |
Sep. 30, 2020 | |
SELECTED QUARTERLY FINANCIAL DATA | |
SELECTED QUARTERLY FINANCIAL DATA | 17. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) The following table provides selected quarterly financial data for the fiscal years ended September 30, 2020 and 2019: Quarters Ended December 31, 2019 March 31, 2020 June 30, 2020 September 30, 2020 Net sales $ — $ — $ — $ — Gross profit $ — $ — $ — $ — Operating loss $ (1,619,567) $ (1,154,569) $ (1,241,700) (1,354,812) Net loss $ (1,659,754) $ (731,884) $ (904,367) $ (1,395,373) Net income (loss) per share - basic and diluted $ (0.01) $ — $ (0.01) $ — Weighted average shares - basic and diluted 184,102,916 186,897,947 188,340,505 192,855,962 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 (loss) per share - basic and diluted $ (0.02) $ — $ (0.01) $ (0.01) Weighted average shares - basic 161,057,300 163,285,738 168,396,553 172,575,820 Weighted average shares - diluted 161,057,300 163,620,980 168,396,553 172,575,820 |
RISKS AND UNCERTAINTIES - COVID
RISKS AND UNCERTAINTIES - COVID-19 | 3 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Sep. 30, 2020 | |
RISKS AND UNCERTAINTIES - COVID-19 | ||
RISKS AND UNCERTAINTIES - COVID-19 | 15. The Company sources its materials and services for its products and product candidates from facilities in areas impacted or which may be impacted by the outbreak of the coronavirus. This may impact the Company’s ability to obtain future inventory and impact the Company’s revenue stream as efforts to address this worldwide outbreak are undertaken. In addition, the Company has historically and principally funded its operations through debt borrowings, the issuance of convertible debt, and the issuance of units consisting of common stock and warrants which may also be impacted by economic conditions beyond the Company’s control. To the extent in which the coronavirus will impact the global economy and the Company is uncertain and cannot be reasonably measured. | 18. Risks and Uncertainties - COVID-19 The Company sources its materials and services for its products and product candidates from facilities in areas impacted or which may be impacted by the outbreak of the coronavirus. This may impact the Company's ability to obtain future inventory and impact the company's revenue stream as efforts to address this worldwide outbreak are undertaken. In addition, the Company has historically and principally funded its operations through debt borrowings, the issuance of convertible debt, and the issuance of units consisting of common stock and warrants which may also be impacted by economic conditions beyond the Company's control. To the extent in which the coronavirus will impact the global economy and the Company is uncertain and cannot be reasonably measured. |
Authorized Common Stock
Authorized Common Stock | 12 Months Ended |
Sep. 30, 2020 | |
Authorized Common Stock | |
Authorized Common Stock | 19. Authorized Common Stock On July 1, 2020, a special meeting of the Company was held. At the meeting, the stockholders approved an increase to the number of authorized shares of our common stock, par value $0.001 per share (“Common Stock”), from 300,000,000 to 800,000,000 shares. The results of the stockholders’ vote were 103,553,044 votes for, 33,707,332 votes against and 3,678,519 abstained. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Sep. 30, 2020 | |
SUBSEQUENT EVENTS | ||
SUBSEQUENT EVENTS | 16. The Company evaluated all events or transactions that occurred through the date which these consolidated financial statements were issued. On February 12, 2021, the Company announced that it had entered into a securities purchase agreement with certain institutional and accredited investors to raise approximately $6.9 million through the issuance of an aggregate of 43,125,004 shares of its common stock and warrants to purchase up to an aggregate of 32,343,753 shares of common stock, at a combined purchase price of $0.16 per share of common stock and associated warrant in a private placement (the “2021 Financing”). The Series K Warrants have an exercise price of $0.17 per share and are exercisable for a period of 5.5 years. The gross proceeds to Arch from the 2021 Financing, which is expected to close on February 17, 2021, are expected to be approximately $6.9 million before deducting financing costs of approximately $700,000. The Company engaged H.C. Wainwright & Co., LLC (the “Placement Agent) as exclusive placement agent for the 2021 Financing. Pursuant to the Company’s engagement letter with the Placement Agent, the Company also agreed to issue to the Placement Agent, or its designees, warrants to purchase up to 3,234,375 shares (the “Placement Agent 2 Warrants”). The Placement Agent 2 Warrants have substantially the same terms as the Series K Warrants, except that the exercise price of the Placement Agent Warrants is $0.20 per share. | 20. SUBSEQUENT EVENTS The Company evaluated all events or transactions that occurred through December 10, 2020, the date which these consolidated financial statements were available to be issued. On November 6, 2020, the Company issued unsecured 10% Series 2 Convertible Notes in the aggregate principal amount of $1,050,000. The Series 2 Convertible Notes provide, among other things, for (i) a term of approximately three (3) years; (ii) the Company’s ability to prepay the Series 2 Convertible Notes, in whole or in part, at any time; (iii) the automatic conversion of the Convertible Notes upon a Change of Control (all capitalized terms not otherwise defined to have the meaning ascribed to such terms in the Convertible Notes) into shares of the Company’s common stock, par value $0.001 per share (Common Stock), at a per share price of $0.25 (the “ Conversion Price ”); (iv) the ability of a holder of a Series 2 Convertible Note (a “ Holder ”) to convert the Series 2 Convertible Note and accrued interest, in whole or in part, into shares of Common Stock at the Conversion Price; (v) the Company’s ability to convert all Note Obligations outstanding upon a Qualified Equity Financing into shares of Common Stock at the Conversion Price; (vi) the Company’s ability to convert Series 2 Convertible Notes and accrued interest, in whole or in part, into shares of Common Stock at the Conversion Price in the event the volume weighted average price (“VWAP”) of the Common Stock equals or exceeds $0.32 per share for at least fifteen (15) consecutive Trading Days; (vii) the Company’s ability to convert all outstanding Note Obligations into shares of Common Stock at the Conversion Price (an “ In-Kind Note Repayment ”) in lieu of repaying the Note Obligations outstanding on the Maturity Date, November 30, 2023; provided, however, that in the case of an In-Kind Note Repayment, the outstanding Note Obligations will be calculated by increasing by thirty-five percent (35)% the aggregate sum of the unpaid Principal Amount held by each Holder and the accrued interest at a rate of ten percent (10)% per annum, subject to, with respect to any portion of the Principal Amount that is converted or prepaid before the twelve month anniversary of the Issuance Date, a minimum interest payment equal to ten percent (10)% of the amount that is converted or prepaid. In addition, on November 6, 2020, as consideration for investment in the Convertible Notes, the Company entered into that certain Amendment to Series J Warrant to Purchase Common Stock, a holder of a Series J Warrant exercisable for up to 3,375,000 shares of Common Stock, to extend the term of the Series J Warrant from one (1) year to thirty (30) months. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Sep. 30, 2020 | |
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. We are a biotechnology company marketing or developing a number of products and are devoting substantially all of its efforts to developing technologies, raising capital, establishing customer and vendor relationships, and recruiting and retaining new employees. | 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. We are a biotechnology company marketing or developing a number of products and are 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. | 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) 2018-13, “Fair Value Measurement (Topic 820) Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement” was issued by the Financial Accounting Standards Board (FASB) in August 2018. The purpose of this amendment in this Update is to modify the disclosure requirements on fair value measurements in Topic 820. 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, 2019. The Company adopted ASU 2018-13 during our first quarter of fiscal year 2021. | 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 adopted ASU 2018-07 during our first quarter of fiscal year 2020, and the impact was considered immaterial on our consolidated financial statements. 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. The Company adopted ASU 2016-02 during our first quarter of fiscal year 2020, and the impact has been recorded within the consolidated financial statement using the modified retrospective method. |
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 December 31, 2020 and September 30, 2020. | 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, 2020 and September 30, 2019. |
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, goods-in-process and finished goods 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. | 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, goods-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. Inventory reserves are included in research and development expenses for the fiscal year ended September 30, 2020. |
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. | 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. |
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. | 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 three months ended December 31, 2020 and 2019 there has not been any 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, 2020 and 2019 there has not been any impairment of long-lived assets. |
Leases | Leases The Company determines if an arrangement is a lease at its inception. Operating lease right-of-use (“ROU”) assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As our lease does not provide an implicit interest rate, we use an incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Lease expense for lease payments is recognized on a straight-line basis over the lease term. As of December 31, 2020 and September 30, 2020, our ROU asset is included in prepaid expenses and other current assets and the lease obligations is included in accrued expenses and other current liabilities on our consolidated balance sheets. As of December 31, 2020, ROU asset of approximately $30,000 represents our right to use an underlying asset for the lease term and the lease liabilities of approximately $30,000 represents our obligation to make lease payments arising from the lease. | Leases The Company determines if an arrangement is a lease at its inception. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As our lease does not provide an implicit interest rate, we use an incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Lease expense for lease payments is recognized on a straight-line basis over the lease term. As of September 30, 2020, our ROU asset is included in prepaid expenses and other current assets and the lease obligations is included in accrued expenses and other current liabilities on our consolidated balance sheets. The impact upon adoption was considered immaterial to the consolidated financial statements. As of September 30, 2020, the right-of-use (“ROU”) asset of approximately $39,000 represents our right to use an underlying asset for the lease term and the lease liabilities of approximately $39,000 represents our obligation to make lease payments arising from the lease. |
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. | 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. |
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. | 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 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 be recognized in the consolidated financial statements based on their fair values. 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 was 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 expected life for awards uses the 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. | Accounting for Stock-Based Compensation The Company accounts for 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 be recognized in the consolidated financial statements based on their fair values. 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 was 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 December 31, 2020 and September 30, 2020, the carrying amounts of cash, accounts payables and accrued expenses and other liabilities approximate fair value because of their short-term nature. The carrying amounts for the PPP Loan and the Convertible Notes approximate fair value. | 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, 2020 and September 30, 2019, the carrying amounts of cash, accounts payable, accrued expenses and other liabilities, approximate fair value because of their short-term nature. The carrying amounts for the PPP Loan and the Promissory convertible debt approximate fair value. |
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. | 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. |
Financial Statement Reclassification | Financial Statement Reclassification Certain balances in the prior year consolidated financial statements have been reclassified for comparison purposes to conform to the presentation in the current period consolidated financial statements. | |
Subsequent Events | Subsequent Events The Company evaluated all events or transactions that occurred commencing from January 25, 2021 and ending on February 11, 2021 the date which these unaudited interim consolidated financial statements were issued. The Company disclosed material subsequent events, if any, in Note 16. | Subsequent Events The Company evaluated all events or transactions that occurred commencing from October 1, 2020 and ending on December 10, 2020 the date which these consolidated financial statements were issued. The Company disclosed material subsequent events in Note 20. |
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 December 31, 2020, 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. Finally, some of our product candidates or the materials contained therein (such as the Active Pharmaceutical Ingredients (“APIs”) for our AC5(R) product line), are manufactured from facilities in areas impacted by the outbreak of the coronavirus, which could result in shortages due to ongoing efforts to address the outbreak. 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 its subsidiary 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. The continued spread of coronavirus and uncertain market conditions may also limit the Company’s ability to access capital. If the Company is unable to obtain adequate capital, the Company may be required to reduce the scope, delay, or eliminate some or all of its planned activities. These conditions, in the aggregate, raise substantial doubt as to the Company’s ability to continue as a going concern. 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. | 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, 2020, 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. Finally, some of our product candidates or the materials contained therein (such as the Active Pharmaceutical Ingredients (“APIs”) for our AC5 (R) product line), are manufactured from facilities in areas impacted by the outbreak of the coronavirus, which could result in shortages due to ongoing efforts to address the outbreak. 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 its subsidiary 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. The continued spread of coronavirus and uncertain market conditions may also limit the Company’s ability to access capital. If the Company is unable to obtain adequate capital, the Company may be required to reduce the scope, delay, or eliminate some or all of its planned commercial activities. These conditions, in the aggregate, raise substantial doubt as to the Company’s ability to continue as a going concern. 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) | 3 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Sep. 30, 2020 | |
PROPERTY AND EQUIPMENT | ||
Schedule of property and equipment | At December 31, 2020 and September 30, 2020, property and equipment consisted of: Estimated Useful December 31, September 30, Life 2020 2020 Furniture and fixtures 5 years $ 9,357 $ 9,357 Leasehold improvements Life of Lease 8,983 8,983 Computer equipment 3 years 11,141 11,141 Lab equipment 5 years 1,000 1,000 30,481 30,481 Less – accumulated depreciation 26,301 25,929 Property and equipment, net $ 4,180 $ 4,552 | At September 30, 2020 and September 30, 2019, property and equipment consisted of: Estimated September 30, September 30, Useful Life 2020 2019 Furniture and fixtures 5 years $ 9,357 $ 9,357 Leasehold improvements Life of Lease $ 8,983 $ 8,983 Computer equipment 3 years $ 11,141 $ 8,686 Lab equipment 5 years $ 1,000 $ 1,000 30,481 28,026 Less – accumulated depreciation 25,929 19,003 Property and equipment, net $ 4,552 $ 9,023 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
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: 2020 2019 Net operating loss carryforwards $ 8,451,214 $ 7,291,333 Capitalized expenditures 1,782,185 1,717,025 Research and experimentation credit carryforwards 928,734 898,610 Stock based compensation 2,321,519 2,139,119 Property and Equipment 3,152 2,234 Accrued expenses 18,518 13,660 Inventory allowance 16,497 — Deferred rent — 492 Gross deferred tax assets 13,521,819 12,062,473 Deferred tax asset valuation allowance (13,521,819) (12,062,473) Net deferred tax assets $ — $ — |
INVENTORIES (Tables)
INVENTORIES (Tables) | 3 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Sep. 30, 2020 | |
INVENTORIES | ||
Schedule of inventories | December 31, September 30, 2020 2020 Finished Goods $ 300,009 $ — Goods-in-process 715,731 967,993 Total $ 1,015,740 $ 967,993 | September 30, September 30, 2020 2019 Goods-in-process $ 1,028,378 $ 328,500 Raw Material — 18,147 Inventory Reserves (60,385) — Total $ 967,993 $ 346,647 |
2017 REGISTERED DIRECT OFFERI_2
2017 REGISTERED DIRECT OFFERING (Tables) - REGISTERED DIRECT OFFERING 2017 [Member] | 3 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Sep. 30, 2020 | |
Schedule of fair value measurements | Fair Value Measurements Using Significant Unobservable Inputs December 31, September 30, (Level 3) 2020 2020 Beginning balance at September 30, 2020 and 2019 $ 1,000,000 $ 1,000,000 Issuances — — Adjustments to estimated fair value — — Ending balance at December 31, 2020 and September 30, 2020 $ 1,000,000 $ 1,000,000 | Fair Value Measurements Using Significant Unobservable Inputs September 30, September 30, (Level 3) 2020 2019 Beginning balance at beginning of year $ 1,000,000 $ 1,274,404 Issuances — — Adjustments to estimated fair value — (274,404) Ending balance at end of year $ $ |
Schedule of assumptions used to value derivative liabilities | The derivative liabilities were valued as of December 31, 2020 and September 30, 2020 using the Black Scholes Model with the following assumptions: December 31, September 30, 2020 2020 Closing price per share of common stock $ 0.15 $ 0.17 Exercise price per share $ 0.75 $ 0.75 Expected volatility 82.10 % 84.17 % Risk-free interest rate 0.10 % 0.13 % Dividend yield — — Remaining expected term of underlying securities (years) 1.35 | The derivative liabilities were valued as of September 30, 2020 and September 30, 2019 using the Black Scholes Model with the following assumptions: September 30, September 30, 2020 2019 Closing price per share of common stock $ 0.17 $ 0.24 Exercise price per share $ 0.75 $ 0.75 Expected volatility 84.17 % 78.15 % Risk-free interest rate 0.13 % 1.60 % Dividend yield — — Remaining expected term of underlying securities (years) 1.35 2.37 |
2018 REGISTERED DIRECT OFFERI_2
2018 REGISTERED DIRECT OFFERING (Tables) - Registered Direct Offering 2018 [Member] | 3 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Sep. 30, 2020 | |
Schedule of fair value measurements | Fair Value Measurements Using Significant Unobservable Inputs December 31, September 30, (Level 3) 2020 2020 Beginning balance at September 30, 2020 and 2019 $ 748,275 $ 748,275 Issuances — — Adjustments to estimated fair value — — Ending balance at December 31, 2020 and September 30, 2020 $ 748,275 $ 748,275 | Fair Value Measurements Using Significant Unobservable Inputs September 30, September 30, (Level 3) 2020 2019 Beginning balance at beginning of year $ 748,275 $ 1,917,348 Issuances — — Adjustments to estimated fair value — (1,169,073) Ending balance at end of year $ 748,275 $ 748,275 |
Schedule of assumptions used to value derivative liabilities | The derivative liabilities were valued as of December 31, 2020 and September 30, 2020 using the Black Scholes Model with the following assumptions: December 31, September 30, 2020 2020 Closing price per share of common stock $ 0.15 $ 0.17 Exercise price per share $ 0.70 $ 0.70 Expected volatility 83.31 % 83.31 % Risk-free interest rate 0.15 % 0.15 % Dividend yield — — Remaining expected term of underlying securities (years) 2.71 | The derivative liabilities were valued as of September 30, 2020 and September 30, 2019 using the Black Scholes Model with the following assumptions: September 30, September 30, 2020 2019 Closing price per share of common stock $ 0.17 $ 0.24 Exercise price per share $ 0.70 $ 0.70 Expected volatility 83.31 % 78.72 % Risk-free interest rate 0.15 % 1.56 % Dividend yield — — Remaining expected term of underlying securities (years) 2.71 3.73 |
2019 REGISTERED DIRECT OFFERI_2
2019 REGISTERED DIRECT OFFERING (Tables) - Registered Direct Offering 2019 [Member] | 3 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Sep. 30, 2020 | |
Schedule of fair value measurements | Fair Value Measurements Using Significant Unobservable Inputs December 31, September 30, (Level 3) 2020 2020 Beginning balance at September 30, 2020 and 2019 $ 568,144 $ 1,247,415 Issuances — — Adjustments to estimated fair value (108,944) (679,271) Ending balance at December 31, 2020 and September 30, 2020 $ 459,200 $ 568,144 | Fair Value Measurements Using Significant Unobservable Inputs September 30, September 30, (Level 3) 2020 2019 Beginning balance at beginning of year $ 1,247,415 $ — Issuances — 1,628,113 Adjustments to estimated fair value (679,271) (380,698) Ending balance at end of year $ 568,144 $ 1,247,415 |
Schedule of assumptions used to value derivative liabilities | The derivative liabilities were valued as of December 31, 2020 and September 30, 2020 using the Black Scholes Model with the following assumptions: December 31, September 30, 2020 2020 Closing price per share of common stock $ 0.15 $ 0.17 Exercise price per share $ 0.40 $ 0.40 Expected volatility 82.41 % 82.24 % Risk-free interest rate 0.27 % 0.22 % Dividend yield — — Remaining expected term of underlying securities (years) 3.60 | The derivative liabilities were valued as of September 30, 2020, September 30, 2019 and May 14, 2019 using the Black Scholes Model with the following assumptions: September 30, September 30, May 14, 2020 2019 2019 Closing price per share of common stock $ 0.17 $ 0.24 $ 0.283 Exercise price per share $ 0.40 $ 0.40 $ 0.40 Expected volatility 82.24 % 92.11 % 93.44 % Risk-free interest rate 0.22 % 1.55 % 2.20 % Dividend yield — — — Remaining expected term of underlying securities (years) 3.60 4.61 5.00 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) - 2013 Stock Incentive Plan [Member] | 3 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Sep. 30, 2020 | |
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 three months ended December 31, 2020 follows: Weighted Weighted Average Option Average Remaining Aggregate Shares Exercise Contractual Intrinsic Outstanding Price Term (years) Value Outstanding at September 30, 2020 18,248,346 $ 0.36 2.59 $ 79,330 Awarded 975,000 $ 0.17 — — Forfeited/Cancelled (148,191) $ 0.44 — — Outstanding at December 31, 2020 19,075,155 $ 0.35 2.61 $ 119,733 Vested at December 31, 2020 16,587,085 $ 0.37 2.64 $ 70,693 Vested and expected to vest at December 31, 2020 19,075,155 $ 0.35 2.61 $ 119,733 | Stock compensation activity under the 2013 Plan for the year ended September 30, 2020 follows: Weighted Weighted Average Option Average Remaining Aggregate Shares Exercise Contractual Intrinsic Outstanding Price Term (years) Value Outstanding at September 30, 2019 15,807,911 $ 0.40 3.14 $ 142,810 Awarded 3,375,000 $ 0.22 — — Forfeited/Cancelled (934,565) $ 0.44 — — Outstanding at September 30, 2020 18,248,346 $ 0.36 2.59 $ 79,330 Vested at September 30, 2020 16,077,006 $ 0.38 2.78 $ 69,305 Vested and expected to vest at September 30, 2020 18,248,346 $ 0.36 2.59 $ 79,330 |
Schedule of restricted stock activity | Restricted stock activity in shares under the 2013 Plan for the three months ended December 31, 2020 and 2019 follows: 2020 2019 Non Vested at September 30, 2020 and 2019 — 965,000 Awarded 50,000 — Vested — — Forfeited — — Non Vested at December 31, 2020 and 2019 50,000 965,000 | Restricted stock activity in shares under the 2013 Plan for the years ended September 30, 2020 and 2019 follows: 2020 2019 Non Vested at September 30, 2019 and 2018 965,000 2,815,000 Awarded — — Vested (965,000) (1,850,000) Forfeited — — Non Vested at September 30, 2020 and 2019 — 965,000 |
Schedule of weighted average restricted stock award date fair value information | The weighted average restricted stock award date fair value information for the three months ended December 31, 2020 and 2019 follows: 2020 2019 Non Vested at September 30, 2020 and 2019 $ — $ 0.57 Awarded 0.18 — Vested — — Forfeited — — Non Vested at December 31, 2020 and 2019 $ 0.18 $ 0.57 | The weighted average restricted stock award date fair value information for the years ended September 30, 2020 and 2019 follows: 2020 2019 Non Vested at September 30, 2019 and 2018 $ 0.43 $ 0.57 Awarded — — Vested (0.43) (0.64) Forfeited — — Non Vested at September 30, 2020 and 2019 $ — $ 0.43 |
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, 2020 | |
Schedule of restricted stock activity | Restricted Stock activity in shares for the year ended September 30, 2020 and 2019 is as follows: 2019 Non Vested at September 30, 2019 and 2018 1,767,000 Awarded — Vested (1,767,000) Forfeited — Non Vested at September 30, 2020 and 2019 — |
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, 2020 and 2019 follows: 2019 Non Vested at September 30, 2019 and 2018 $ 0.39 Awarded — Vested 0.39 Forfeited — Non Vested at September 30, 2020 and 2019 $ — |
SELECTED QUARTERLY FINANCIAL _2
SELECTED QUARTERLY FINANCIAL DATA (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
SELECTED QUARTERLY FINANCIAL DATA | |
Schedule of quarterly financial data | The following table provides selected quarterly financial data for the fiscal years ended September 30, 2020 and 2019: Quarters Ended December 31, 2019 March 31, 2020 June 30, 2020 September 30, 2020 Net sales $ — $ — $ — $ — Gross profit $ — $ — $ — $ — Operating loss $ (1,619,567) $ (1,154,569) $ (1,241,700) (1,354,812) Net loss $ (1,659,754) $ (731,884) $ (904,367) $ (1,395,373) Net income (loss) per share - basic and diluted $ (0.01) $ — $ (0.01) $ — Weighted average shares - basic and diluted 184,102,916 186,897,947 188,340,505 192,855,962 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 (loss) per share - basic and diluted $ (0.02) $ — $ (0.01) $ (0.01) Weighted average shares - basic 161,057,300 163,285,738 168,396,553 172,575,820 Weighted average shares - diluted 161,057,300 163,620,980 168,396,553 172,575,820 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | Dec. 31, 2020 | Sep. 30, 2020 | Sep. 30, 2019 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Cash equivalents | $ 0 | $ 0 | $ 0 |
Right of use assets | 30,000 | 39,000 | |
Operating lease liabilities | $ 30,000 | $ 39,000 | |
Operating lease, liability, statement of financial position | us:gaap_OperatingLeaseLiability | us:gaap_OperatingLeaseLiability |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | |
Property and equipment, gross, Total | $ 30,481 | $ 30,481 | $ 28,026 |
Less - accumulated depreciation | 26,301 | 25,929 | 19,003 |
Property and equipment, net | $ 4,180 | $ 4,552 | 9,023 |
Furniture and fixtures | |||
Property, and equipment, Estimated Useful Life | 5 years | 5 years | |
Property and equipment, gross, Total | $ 9,357 | $ 9,357 | 9,357 |
Leasehold improvements | |||
Property and equipment, gross, Total | $ 8,983 | $ 8,983 | 8,983 |
Computer equipment | |||
Property, and equipment, Estimated Useful Life | 3 years | 3 years | |
Property and equipment, gross, Total | $ 11,141 | $ 11,141 | 8,686 |
Lab equipment | |||
Property, and equipment, Estimated Useful Life | 5 years | 5 years | |
Property and equipment, gross, Total | $ 1,000 | $ 1,000 | $ 1,000 |
PROPERTY AND EQUIPMENT - Additi
PROPERTY AND EQUIPMENT - Additional Information (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
PROPERTY AND EQUIPMENT | ||||
Depreciation expense | $ 372 | $ 1,936 | $ 6,926 | $ 8,238 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | Sep. 30, 2020 | Sep. 30, 2019 |
INCOME TAXES | ||
Net operating loss carryforwards | $ 8,451,214 | $ 7,291,333 |
Capitalized expenditures | 1,782,185 | 1,717,025 |
Research and experimentation credit carryforwards | 928,734 | 898,610 |
Stock based compensation | 2,321,519 | 2,139,119 |
Property and Equipment | 3,152 | 2,234 |
Accrued expenses | 18,518 | 13,660 |
Inventory allowance | 16,497 | |
Deferred rent | 0 | 492 |
Gross deferred tax assets | 13,521,819 | 12,062,473 |
Deferred tax asset valuation allowance | (13,521,819) | (12,062,473) |
Net deferred tax assets | $ 0 | $ 0 |
INCOME TAXES - Additional Infor
INCOME TAXES - Additional Information (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Deferred Tax Assets, Operating Loss Carryforwards, Domestic | $ 31,157,000 | $ 26,890,000 |
Deferred Tax Assets, Tax Credit Carryforwards, Research | 928,734 | 898,610 |
Deferred Tax Assets, Operating Loss Carryforwards, State and Local | 30,737,000 | 26,560,000 |
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | 1,459,000 | 1,835,000 |
Effective Income Tax Rate Reconciliation at Federal Statutory Income Tax Rate, Amount | 0 | |
Expire In 2023 | ||
Deferred Tax Assets, Tax Credit Carryforwards, Research | 345,000 | 305,000 |
Expire In 2029 | ||
Deferred Tax Assets, Tax Credit Carryforwards, Research | $ 657,000 | $ 542,000 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) | 12 Months Ended | ||
Sep. 30, 2020 | Dec. 31, 2020 | Sep. 30, 2019 | |
INVENTORIES | |||
Finished Goods | $ 300,009 | ||
Goods-in-process | $ 1,028,378 | $ 328,500 | |
Raw Material | 18,147 | ||
Inventory Reserves | (60,385) | ||
Total | 967,993 | $ 1,015,740 | $ 346,647 |
Reduction in inventory reserves | $ 60,385 |
2015 PRIVATE PLACEMENT FINANC_2
2015 PRIVATE PLACEMENT FINANCING - Additional Information (Details) | Nov. 06, 2020shares | Jun. 22, 2020USD ($)shares | Jun. 04, 2020$ / sharesshares | Jun. 03, 2020USD ($)$ / shares | Jul. 02, 2015USD ($)shares | Jul. 02, 2015USD ($)shares | Jun. 30, 2015USD ($)$ / sharesshares | Jun. 30, 2015USD ($)$ / sharesshares | Dec. 31, 2020USD ($) | Sep. 30, 2020USD ($)shares | Sep. 30, 2019USD ($)$ / sharesshares | Nov. 30, 2020 | Jun. 21, 2020$ / shares | Jun. 02, 2020$ / shares | Dec. 31, 2017$ / shares |
Private Placement [Line Items] | |||||||||||||||
Proceeds from exercise of warrants | $ | $ 932,728 | $ 0 | |||||||||||||
2015 Investors [Member] | |||||||||||||||
Private Placement [Line Items] | |||||||||||||||
Stock Issued During Period, Shares, New Issues | 454,387 | 454,387 | 13,936,367 | 454,387 | |||||||||||
Proceeds from Issuance of Common Stock | $ | $ 100,000 | $ 100,000 | $ 3,066,000 | ||||||||||||
Series D Warrants [Member] | |||||||||||||||
Private Placement [Line Items] | |||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 0.25 | ||||||||||||||
Percentage of Shares Purchased by Investors | 100.00% | 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 | $ / shares | $ 0.22 | $ 0.22 | |||||||||||||
Proceeds from Issuance of Common Stock | $ | $ 3,200,000 | ||||||||||||||
2015 Private Placement [Member] | Keyes Sulat Agreement | |||||||||||||||
Private Placement [Line Items] | |||||||||||||||
Common Stock Issuance Upon Exercise Of Warrants | 454,546 | ||||||||||||||
2015 Private Placement [Member] | Series D Warrants [Member] | |||||||||||||||
Private Placement [Line Items] | |||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 0.18 | $ 0.25 | $ 0.25 | $ 0 | $ 0.25 | ||||||||||
Proceeds from exercise of warrants | $ | $ 850,000 | $ 932,728 | |||||||||||||
Percentage of increase in ownership interest as a result of reduction in exercise price of warrant | 4.90% | ||||||||||||||
Common Stock Issuance Upon Exercise Of Warrants | 4,727,273 | 5,181,819 | |||||||||||||
Non cash interest | $ | $ 220,000 | $ 220,000 | |||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 0 | ||||||||||||||
Number of warrants expired | 3,792,570 | ||||||||||||||
2015 Private Placement [Member] | Series J warrant | |||||||||||||||
Private Placement [Line Items] | |||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 0.25 | ||||||||||||||
Common Stock Issuance Upon Exercise Of Warrants | 3,375,000 | 3,545,454 | |||||||||||||
Exercise term of warrants | 30 months | 1 year | 1 year | ||||||||||||
2015 Private Placement [Member] | Series J warrant | Keyes Sulat Agreement | |||||||||||||||
Private Placement [Line Items] | |||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 0.25 | ||||||||||||||
Proceeds from exercise of warrants | $ | $ 82,000 | ||||||||||||||
Common Stock Issuance Upon Exercise Of Warrants | 340,910 | ||||||||||||||
Exercise term of warrants | 1 year | ||||||||||||||
Measurement Input, Price Volatility [Member] | |||||||||||||||
Private Placement [Line Items] | |||||||||||||||
Derivative Liability, Measurement Input | 88.15 | 88.15 | |||||||||||||
Measurement Input, Risk Free Interest Rate [Member] | |||||||||||||||
Private Placement [Line Items] | |||||||||||||||
Derivative Liability, Measurement Input | 0.16 | 0.16 | |||||||||||||
Measurement Input, Expected Forfeiture Rate [Member] | |||||||||||||||
Private Placement [Line Items] | |||||||||||||||
Derivative Liability, Measurement Input | 0 | 0 | |||||||||||||
Measurement Input, Expected Dividend Rate [Member] | |||||||||||||||
Private Placement [Line Items] | |||||||||||||||
Derivative Liability, Measurement Input | 0 | 0 | |||||||||||||
Measurement Input, Expected Term [Member] | |||||||||||||||
Private Placement [Line Items] | |||||||||||||||
Derivative Liability, Measurement Input | 1.08 | 1.08 |
2016 PRIVATE PLACEMENT FINANC_2
2016 PRIVATE PLACEMENT FINANCING - Additional Information (Details) - USD ($) | May 26, 2016 | May 26, 2016 | May 31, 2016 | Dec. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2020 |
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% | 75.00% | ||||
Series E Warrant [Member] | ||||||
Private Placement [Line Items] | ||||||
Stock Issued During Period, Shares, New Issues | 7,063,748 | 0 | 0 | |||
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 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 61st day after delivery of such notice. | (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 61st day after delivery of such notice. | ||||
Common Stock, Capital Shares Reserved for Future Issuance | 4,214,582 | 4,214,582 | ||||
Private Placement 2016 [Member] | ||||||
Private Placement [Line Items] | ||||||
Stock Issued During Period, Shares, New Issues | 9,418,334 | 9,418,334 | ||||
Share Price | $ 0.36 | $ 0.36 | ||||
Proceeds from Issuance of Common Stock | $ 3,390,600 | $ 3,390,600 | ||||
Private Placement 2016 [Member] | Maxim Group LLC [Member] | ||||||
Private Placement [Line Items] | ||||||
Underwriting Fees, Percentage | 8.20% | 8.20% | ||||
Proceeds from Issuance of Common Stock | $ 2,084,000 | $ 2,084,000 | ||||
Payments of Stock Issuance Costs | $ 171,000 | $ 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 | $ 0.438 | $ 0.438 | ||
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 ($) | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | |
Beginning balance at beginning of year | $ 1,000,000 | $ 1,000,000 | $ 1,274,404 |
Issuances | 0 | 0 | 0 |
Adjustments to estimated fair value | 0 | 0 | (274,404) |
Ending balance at end of year | $ 1,000,000 | $ 1,000,000 | $ 1,000,000 |
2017 REGISTERED DIRECT OFFERI_4
2017 REGISTERED DIRECT OFFERING - Derivative liabilities using Black Scholes Model (Details) | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2020$ / shares | Sep. 30, 2020$ / shares | Sep. 30, 2019$ / shares | Jul. 01, 2020$ / shares | |
Closing price per share of common stock | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 |
Measurement Input, Price Volatility [Member] | ||||
Derivative Liability, Measurement Input | 88.15 | 88.15 | ||
Measurement Input, Risk Free Interest Rate [Member] | ||||
Derivative Liability, Measurement Input | 0.16 | 0.16 | ||
Measurement Input, Expected Dividend Rate [Member] | ||||
Derivative Liability, Measurement Input | 0 | 0 | ||
Measurement Input, Expected Term [Member] | ||||
Derivative Liability, Measurement Input | 1.08 | 1.08 | ||
Derivative Financial Instruments, Liabilities [Member] | REGISTERED DIRECT OFFERING 2017 [Member] | ||||
Closing price per share of common stock | $ 0.150 | $ 0.17 | $ 0.24 | |
Derivative Financial Instruments, Liabilities [Member] | REGISTERED DIRECT OFFERING 2017 [Member] | Measurement Input, Exercise Price [Member] | ||||
Derivative Liability, Measurement Input | 0.75 | 0.75 | 0.75 | |
Derivative Financial Instruments, Liabilities [Member] | REGISTERED DIRECT OFFERING 2017 [Member] | Measurement Input, Price Volatility [Member] | ||||
Derivative Liability, Measurement Input | 82.10 | 84.17 | 78.15 | |
Derivative Financial Instruments, Liabilities [Member] | REGISTERED DIRECT OFFERING 2017 [Member] | Measurement Input, Risk Free Interest Rate [Member] | ||||
Derivative Liability, Measurement Input | 0.10 | 0.13 | 1.60 | |
Derivative Financial Instruments, Liabilities [Member] | REGISTERED DIRECT OFFERING 2017 [Member] | Measurement Input, Expected Dividend Rate [Member] | ||||
Derivative Liability, Measurement Input | 0 | 0 | 0 | |
Derivative Financial Instruments, Liabilities [Member] | REGISTERED DIRECT OFFERING 2017 [Member] | Measurement Input, Expected Term [Member] | ||||
Remaining expected term of underlying securities (years) | 1 year 1 month 2 days | 1 year 4 months 6 days | 2 years 4 months 13 days |
2017 REGISTERED DIRECT OFFERI_5
2017 REGISTERED DIRECT OFFERING - Additional Information (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||
Feb. 24, 2017 | Feb. 20, 2017 | Dec. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | May 14, 2019 | Jul. 02, 2018 | Sep. 30, 2016 | |
Derivative Liability | $ 2,996,110 | $ 1,628,113 | $ 2,397,454 | ||||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Period Increase (Decrease) | $ 108,944 | $ (40,187) | $ 679,271 | $ 1,824,175 | |||||
Common Stock | |||||||||
Stock Issued During Period, Shares, New Issues | 10,166,664 | ||||||||
Series F Warrant [Member] | |||||||||
Stock Issued During Period, Shares, New Issues | 0 | 0 | |||||||
Stock Issued During Period, Value, New Issues | $ 0 | 0 | |||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 5,591,664 | 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 | ||||||||
Percentage of warrant per unit | 55.00% | ||||||||
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) | $ 0 | $ 274,404 | $ 0 | $ (274,404) | |||||
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 ($) | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | |
Beginning balance at beginning of year | $ 748,275 | $ 748,275 | $ 1,917,348 |
Issuances | 0 | 0 | 0 |
Adjustments to estimated fair value | 0 | 0 | (1,169,073) |
Ending balance at end of year | $ 748,275 | $ 748,275 | $ 748,275 |
2018 REGISTERED DIRECT OFFERI_4
2018 REGISTERED DIRECT OFFERING - Derivative liabilities using Black Scholes Model (Details) | 3 Months Ended | 12 Months Ended | ||||
Dec. 31, 2020$ / shares | Sep. 30, 2020 | Sep. 30, 2019$ / sharesUSD ($) | Sep. 30, 2020$ / shares | Sep. 30, 2020USD ($) | Jul. 01, 2020$ / shares | |
Closing price per share of common stock | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||
Measurement Input, Price Volatility [Member] | ||||||
Derivative Liability, Measurement Input | 88.15 | 88.15 | ||||
Measurement Input, Risk Free Interest Rate [Member] | ||||||
Derivative Liability, Measurement Input | 0.16 | 0.16 | ||||
Measurement Input, Expected Dividend Rate [Member] | ||||||
Derivative Liability, Measurement Input | 0 | 0 | ||||
Measurement Input, Expected Term [Member] | ||||||
Derivative Liability, Measurement Input | 1.08 | 1.08 | ||||
Registered Direct Offering 2018 [Member] | Derivative Financial Instruments, Liabilities [Member] | ||||||
Closing price per share of common stock | $ 0.15 | $ 0.24 | $ 0.17 | |||
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 | 0.70 | ||
Registered Direct Offering 2018 [Member] | Derivative Financial Instruments, Liabilities [Member] | Measurement Input, Price Volatility [Member] | ||||||
Derivative Liability, Measurement Input | 83.31 | 83.31 | 78.72 | |||
Registered Direct Offering 2018 [Member] | Derivative Financial Instruments, Liabilities [Member] | Measurement Input, Risk Free Interest Rate [Member] | ||||||
Derivative Liability, Measurement Input | 0.15 | 0.15 | 1.56 | |||
Registered Direct Offering 2018 [Member] | Derivative Financial Instruments, Liabilities [Member] | Measurement Input, Expected Dividend Rate [Member] | ||||||
Derivative Liability, Measurement Input | 0 | 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) | 2 years 5 months 16 days | 2 years 8 months 16 days | 3 years 8 months 23 days |
2018 REGISTERED DIRECT OFFERI_5
2018 REGISTERED DIRECT OFFERING - Additional Information (Details) - USD ($) | Jul. 02, 2018 | Jun. 29, 2018 | Jun. 28, 2018 | Jun. 29, 2018 | Jun. 28, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | May 14, 2019 | Feb. 24, 2017 |
Stock Issued During Period, Value, Warrants Exercised | $ 932,728 | ||||||||||
Derivative Liability | $ 2,397,454 | $ 1,628,113 | $ 2,996,110 | ||||||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Period Increase (Decrease) | $ 108,944 | $ (40,187) | $ 679,271 | $ 1,824,175 | |||||||
Class Of Series G Warrant [Member] | |||||||||||
Stock Issued During Period, Shares, New Issues | 0 | 0 | 0 | 0 | |||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 6,802,500 | 6,802,500 | |||||||||
Registered Direct Offering 2018 [Member] | |||||||||||
Stock Issued During Period, Shares, New Issues | 9,070,000 | 9,070,000 | 9,070,000 | ||||||||
Shares Issued, Price Per Share | $ 0.50 | $ 0.50 | |||||||||
Number Of Warrants Per Unit | 0.75 | ||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.70 | $ 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 | $ 4,500,000 | ||||||||
Payments of Stock Issuance Costs | $ 74,000 | 74,000 | |||||||||
Cash Price Per Each Common Stock Underlying Warrants | $ 0.11 | $ 0.11 | $ 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) | $ 0 | $ 0 | $ 0 | $ 1,169,073 | |||||||
Registered Direct Offering 2018 [Member] | Class Of Series G Warrant [Member] | |||||||||||
Percentage Of Class Of Warrant Or Right Held | 20.00% | 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] - USD ($) | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | |
Beginning balance at beginning of year | $ 568,144 | $ 1,247,415 | $ 0 |
Issuances | 0 | 0 | 1,628,113 |
Adjustments to estimated fair value | (108,944) | (679,271) | (380,698) |
Ending balance at end of year | $ 459,200 | $ 568,144 | $ 1,247,415 |
2019 REGISTERED DIRECT OFFERI_4
2019 REGISTERED DIRECT OFFERING - Derivative liabilities using Black Scholes Model (Details) | May 14, 2019$ / shares | Dec. 31, 2020$ / shares | Sep. 30, 2020$ / shares | Sep. 30, 2019$ / shares | Jul. 01, 2020$ / shares |
Closing price per share of common stock | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | |
Measurement Input, Price Volatility [Member] | |||||
Derivative Liability, Measurement Input | 88.15 | 88.15 | |||
Measurement Input, Risk Free Interest Rate [Member] | |||||
Derivative Liability, Measurement Input | 0.16 | 0.16 | |||
Measurement Input, Expected Dividend Rate [Member] | |||||
Derivative Liability, Measurement Input | 0 | 0 | |||
Measurement Input, Expected Term [Member] | |||||
Derivative Liability, Measurement Input | 1.08 | 1.08 | |||
Derivative Financial Instruments, Liabilities [Member] | Registered Direct Offering 2019 [Member] | |||||
Closing price per share of common stock | $ 0.283 | $ 0.15 | $ 0.17 | $ 0.240 | |
Derivative Financial Instruments, Liabilities [Member] | Registered Direct Offering 2019 [Member] | Measurement Input, Exercise Price [Member] | |||||
Derivative Liability, Measurement Input | 0.40 | 0.40 | 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 | 82.41 | 82.24 | 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 | 0.27 | 0.22 | 1.55 | |
Derivative Financial Instruments, Liabilities [Member] | Registered Direct Offering 2019 [Member] | Measurement Input, Expected Dividend Rate [Member] | |||||
Derivative Liability, Measurement Input | 0 | 0 | 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 | 3 years 4 months 2 days | 3 years 7 months 6 days | 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 | Dec. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Jul. 02, 2018 | Feb. 24, 2017 |
Stock Issued During Period, Value, Warrants Exercised | $ 932,728 | ||||||||
Derivative Liability | $ 1,628,113 | $ 2,397,454 | $ 2,996,110 | ||||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Period Increase (Decrease) | $ 108,944 | $ (40,187) | $ 679,271 | $ 1,824,175 | |||||
Class Of Series H Warrant [Member] | |||||||||
Stock Issued During Period, Shares, New Issues | 0 | 0 | 0 | 0 | |||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 8,615,384 | 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 | ||||||||
Proceeds from Subscribed but Unissued Common Stock and Warrants | $ 2,800,000 | $ 2,800,000 | $ 2,748,821 | $ 2,748,821 | |||||
Payments of Stock Issuance Costs | 51,200 | $ 51,200 | |||||||
Cash Price Per Each Common Stock Underlying Warrants | $ 0.0533 | 0.0533 | 0.0533 | ||||||
Allocation Of Remaining Proceeds To Common Stock Subscribed and Unissued | 1,120,708 | 1,120,708 | |||||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Period Increase (Decrease) | $ 108,944 | $ (40,187) | $ 679,271 | $ 380,698 |
OCTOBER 2019 REGISTERED DIREC_2
OCTOBER 2019 REGISTERED DIRECT OFFERING (Details) - USD ($) | Oct. 18, 2019 | Oct. 16, 2019 | Oct. 10, 2019 | Oct. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2020 |
Class Of Series I Warrant [Member] | |||||||
Stock Issued During Period, Shares, New Issues | 0 | 0 | 0 | ||||
Proceeds from Subscribed but Unissued Common Stock and Warrants | $ 2,500,000 | ||||||
Payments of Stock Issuance Costs | $ 158,000 | ||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 14,285,714 | 14,285,714 | |||||
Class Of Series I Warrant [Member] | Maximum [Member] | |||||||
Percentage of fee on Gross Proceeds of Warrants | 8.20% | ||||||
Class Of Series I Warrant [Member] | Minimum [Member] | |||||||
Percentage of fee on Gross Proceeds of Warrants | 6.00% | ||||||
Placement Agent Warrants [Member] | |||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 1,071,429 | 1,071,429 | 1,071,429 | ||||
Registered Direct Offering October 2019 [Member] | |||||||
Stock Issued During Period, Shares, New Issues | 14,285,714 | 14,285,714 | |||||
Shares Issued, Price Per Share | $ 0.175 | ||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | 0.22 | ||||||
Proceeds from Subscribed but Unissued Common Stock and Warrants | $ 2,500,000 | $ 2,500,000 | |||||
Payments of Financing Costs | 333,000 | 333,000 | |||||
Payments of Stock Issuance Costs | $ 158,000 | $ 158,000 | |||||
Registered Direct Offering October 2019 [Member] | Placement Agent Warrants [Member] | |||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.21875 | ||||||
Exercise term of warrants | 5 years |
CONVERTIBLE NOTES (Details)
CONVERTIBLE NOTES (Details) - USD ($) | Jun. 04, 2020 | Dec. 31, 2020 | Sep. 30, 2020 | Jul. 01, 2020 | Sep. 30, 2019 |
Debt Conversion [Line Items] | |||||
Common Stock, Par Value | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | |
Convertible Notes Payable | |||||
Debt Conversion [Line Items] | |||||
Aggregate principal amount | $ 550,000 | ||||
Debt Instrument, Term | 3 years | ||||
Common Stock, Par Value | $ 0.001 | ||||
Conversion Price (in dollars per share) | 0.27 | ||||
VWAP (in dollars per share) | $ 0.32 | ||||
Number of consecutive trading days for minimum VWAP | 15 days | ||||
Percentage of unpaid principal amount for outstanding note obligations | 35.00% | ||||
Percentage on Interest for Outstanding Note Obligations | 10.00% | ||||
Interest rate on the convertible debt | 10.00% | ||||
Interest expense | $ 18,000 | ||||
Series 1 convertible notes | |||||
Debt Conversion [Line Items] | |||||
Debt Instrument, Term | 3 years | ||||
Common Stock, Par Value | $ 0.001 | ||||
Conversion Price (in dollars per share) | 0.27 | ||||
VWAP (in dollars per share) | $ 0.32 | ||||
Number of consecutive trading days for minimum VWAP | 15 days | ||||
Percentage of unpaid principal amount for outstanding note obligations | 35.00% | ||||
Percentage on Interest for Outstanding Note Obligations | 10.00% | ||||
Interest rate on the convertible debt | 10.00% | ||||
Interest expense | $ 14,000 |
PAYROLL PROTECTION PROGRAM LO_2
PAYROLL PROTECTION PROGRAM LOAN (Details) - USD ($) | Jun. 04, 2020 | Apr. 25, 2020 |
PPP Loan | ||
Unsecured loan amount | $ 176,300 | |
Term of the debt (in years) | 2 years | |
Interest rate (as a percent) | 1.00% | |
Repayment deferral period (in months) | 10 months | |
Payments of principal and interest (in monthly) | $ 20,000 | |
Convertible Notes Payable | ||
Term of the debt (in years) | 3 years | |
Aggregate principal amount | $ 550,000 | |
Conversion Price (in dollars per share) | $ 0.27 | |
VWAP (in dollars per share) | $ 0.32 |
STOCK-BASED COMPENSATION - Stoc
STOCK-BASED COMPENSATION - Stock compensation activity (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | |
Option Shares Outstanding | |||
Outstanding at September 30, 2020 | 18,248,346 | 15,807,911 | |
Awarded | 975,000 | 3,375,000 | |
Forfeited/Cancelled | (148,191) | (934,565) | |
Outstanding at December 30, 2020 | 19,075,155 | 18,248,346 | 15,807,911 |
Vested at December 31, 2020 | 16,587,085 | 16,077,006 | |
Vested and expected to vest at December 31, 2020 | 19,075,155 | 18,248,346 | |
Weighted Average Exercise Price | |||
Outstanding at September 30, 2020 | $ 0.36 | $ 0.40 | |
Awarded | 0.17 | 0.22 | |
Forfeited/Cancelled | 0.44 | 0.44 | |
Outstanding at December 31, 2020 | 0.35 | 0.36 | $ 0.40 |
Vested at December 31, 2020 | 0.37 | 0.38 | |
Vested and expected to vest at December 31, 2020 | $ 0.35 | $ 0.36 | |
Weighted Average Remaining Contractual Term (years) | |||
Outstanding at September 30, 2020 | 2 years 7 months 2 days | 3 years 1 month 21 days | |
Awarded | 0 years | 0 years | |
Forfeited/Cancelled | 0 years | 0 years | |
Outstanding at December 31, 2020 | 2 years 7 months 10 days | 2 years 7 months 2 days | |
Vested at December 31, 2020 | 2 years 7 months 21 days | 2 years 9 months 11 days | |
Vested and expected to vest at December 31, 2020 | 2 years 7 months 10 days | 2 years 7 months 2 days | |
Aggregate Intrinsic Value | |||
Outstanding at September 30, 2020 | $ 79,330 | $ 142,810 | |
Awarded | 0 | 0 | |
Forfeited/Cancelled | 0 | 0 | |
Outstanding at December 31, 2020 | 119,733 | 79,330 | $ 142,810 |
Vested at December 31, 2020 | 70,693 | 69,305 | |
Vested and expected to vest at December 31, 2020 | $ 119,733 | $ 79,330 |
STOCK-BASED COMPENSATION - Rest
STOCK-BASED COMPENSATION - Restricted stock activity (Details) - 2013 Incentive Plan [Member] - shares | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Non Vested, Beginning Balance | 0 | 965,000 | 965,000 | 2,815,000 |
Awarded | 50,000 | 0 | 0 | 0 |
Vested | 0 | 0 | (965,000) | (1,850,000) |
Forfeited | 0 | 0 | 0 | 0 |
Non Vested, Ending Balance | 50,000 | 965,000 | 0 | 965,000 |
STOCK-BASED COMPENSATION - Weig
STOCK-BASED COMPENSATION - Weighted average restricted stock (Details) - 2013 Incentive Plan [Member] - $ / shares | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Non Vested, Beginning Balance | $ 0.43 | $ 0.57 |
Awarded | 0 | 0 |
Vested | (0.43) | (0.64) |
Forfeited | 0 | 0 |
Non Vested, Ending Balance | $ 0 | $ 0.43 |
STOCK-BASED COMPENSATION - Addi
STOCK-BASED COMPENSATION - Additional Information (Details) - USD ($) | Oct. 14, 2020 | Sep. 05, 2018 | Sep. 05, 2018 | Jul. 19, 2018 | Feb. 03, 2017 | Jun. 18, 2013 | Jul. 19, 2018 | Jun. 18, 2013 | Dec. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Oct. 01, 2020 | Jul. 01, 2020 | Jun. 30, 2020 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||
Share-based compensation arrangement by share-based payment award, fair value assumptions, expected volatility rate, minimum | 79.44% | 79.44% | |||||||||||||
Share-based compensation arrangement by share-based payment award, fair value assumptions, expected volatility rate, maximum | 119.44% | 119.44% | |||||||||||||
Share-based compensation arrangement by share-based payment award, fair value assumptions, risk free interest rate, minimum | 0.13% | 0.13% | |||||||||||||
Share-based compensation arrangement by share-based payment award, fair value assumptions, risk free interest rate, maximum | 2.85% | 3.23% | |||||||||||||
Share based compensation arrangement by share based payment award fair value assumptions expected forfeiture rate | 0.00% | 0.00% | |||||||||||||
Share-based compensation arrangement by share-based payment award, fair value assumptions, expected dividend rate | 0.00% | 0.00% | |||||||||||||
Share-based compensation arrangement by share-based payment award, fair value assumptions, expected term | 5 years 7 months 6 days | 5 years 7 months 6 days | |||||||||||||
Common Stock, Shares Authorized | 800,000,000 | 800,000,000 | 300,000,000 | 800,000,000 | 300,000,000 | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 975,000 | 3,375,000 | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares | 16,587,085 | 16,077,006 | |||||||||||||
Proceeds from Stock Options Exercised | $ 0 | $ 32,400 | |||||||||||||
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 | $ 0 | $ 40,000 | $ 220,000 | 397,000 | |||||||||||
Research and Development Expense [Member] | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||
Allocated share-based compensation expense | 26,000 | 76,000 | 288,000 | 483,000 | |||||||||||
General and Administrative Expense [Member] | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||
Allocated share-based compensation expense | $ 60,000 | 83,000 | 390,000 | 347,000 | |||||||||||
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 | 0 | |||||||||||||
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 | 19,179,212 | 19,179,212 | |||||||||||||
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 | 8,692,500 | 7,717,500 | |||||||||||||
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 | 100,000 | |||||||||||||
Employees, Directors And Consultants [Member] | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||
Allocated share-based compensation expense | $ 86,000 | $ 159,000 | $ 678,000 | $ 830,000 | |||||||||||
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 4 months 28 days | 1 year 9 months 18 days | |||||||||||||
Common Stock, Shares Authorized | 28,114,256 | 31,114,256 | |||||||||||||
Share-based compensation arrangement by share-based payment award, number of additional shares authorized | 3,000,000 | 3,000,000 | |||||||||||||
Stock Issued During Period, Shares, New Issues | 477,269 | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 0 | 0 | 0 | 87,567 | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Shares Issued in Period | 1,437,433 | ||||||||||||||
Proceeds from Stock Options Exercised | $ 32,400 | ||||||||||||||
2013 Stock Incentive Plan | 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 period | 90 days | ||||||||||||||
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, award vesting period | 90 days | ||||||||||||||
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% | 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, award vesting period | 365 days | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares | 50,000 | 50,000 | |||||||||||||
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 | 6,873,199 | 4,750,008 | |||||||||||||
Employee service share-based compensation, nonvested awards, compensation cost not yet recognized, total | $ 268,000 | ||||||||||||||
Plan 2013 [Member] | 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 period | 90 days | ||||||||||||||
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 | 0 | 2,685,000 | |||||||||||||
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 | 975,000 | 690,000 | |||||||||||||
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, Granted | 50,000 | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Other | 50,000 | 220,000 | 220,000 | ||||||||||||
Plan 2013 [Member] | Employees, Directors And Consultants [Member] | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||
Allocated share-based compensation expense | $ 265,000 | ||||||||||||||
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 | 745,000 | 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, 2020 | Sep. 30, 2019 | |
Non Vested, Beginning Balance | 0 | 1,767,000 |
Awarded | 0 | |
Vested | 0 | (1,767,000) |
Forfeited | 0 | |
Non Vested, Ending Balance | 0 |
RESTRICTED STOCK AWARDED OUTS_4
RESTRICTED STOCK AWARDED OUTSIDE THE 2013 STOCK INCENTIVE PLAN - Weighted average restricted stock (Details) - Restricted Stock [Member] | 12 Months Ended |
Sep. 30, 2019$ / shares | |
Non Vested, Beginning Balance | $ 0.39 |
Awarded | 0 |
Vested | 0.39 |
Forfeited | 0 |
Non Vested, Ending Balance | $ 0 |
RESTRICTED STOCK AWARDED OUTS_5
RESTRICTED STOCK AWARDED OUTSIDE THE 2013 STOCK INCENTIVE PLAN - Additional Information (Details) - USD ($) | May 03, 2016 | Dec. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018 | May 01, 2018 |
General and Administrative Expense [Member] | |||||||
Allocated Share-based Compensation Expense | $ 60,000 | $ 83,000 | $ 390,000 | $ 347,000 | |||
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 | $ 0 | |||||
Restricted Stock Units (RSUs) [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 0 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 0 | 1,767,000 | 1,767,000 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | 0 | 1,767,000 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) | 12 Months Ended | ||||
Sep. 30, 2020 | Sep. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2019 | Sep. 30, 2018 | |
Term of the operating lease | 3 years | ||||
Annual rental payments payable | $ 42,000 | $ 39,600 | $ 38,400 | ||
Right of use assets | 39,000 | $ 30,000 | |||
Operating lease liabilities | 39,000 | $ 30,000 | |||
Annual lease commitment | 42,000 | ||||
Forecast | |||||
Annual rental payments payable | $ 42,000 | ||||
MIT Licensing Agreement [Member] | |||||
Contractual Obligation | $ 50,000 | $ 50,000 | |||
Patents [Member] | |||||
Finite-Lived Intangible Asset, Useful Life | 20 years |
SELECTED QUARTERLY FINANCIAL _3
SELECTED QUARTERLY FINANCIAL DATA (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2020 | Sep. 30, 2019 | |
SELECTED QUARTERLY FINANCIAL DATA | |||||||||||
Net sales | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 |
Gross profit | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||
Operating loss | (1,263,048) | (1,354,812) | (1,241,700) | (1,154,569) | (1,619,567) | (1,524,305) | (1,572,261) | (1,507,366) | (1,767,824) | (5,370,648) | (6,371,757) |
Net loss | $ (1,154,104) | $ (1,395,373) | $ (904,367) | $ (731,884) | $ (1,659,754) | $ (828,144) | $ (1,289,162) | $ 169,962 | $ (2,600,237) | $ (4,691,377) | $ (4,547,582) |
Net income (loss) per share - basic and diluted | $ (0.01) | $ 0 | $ (0.01) | $ 0 | $ (0.01) | $ (0.01) | $ (0.01) | $ 0 | $ 0 | $ (0.02) | $ (0.03) |
Weighted average shares - basic and diluted | 193,044,766 | 192,855,962 | 188,340,505 | 186,897,947 | 184,102,916 | 188,051,683 | 166,339,862 | ||||
Weighted average shares - basic | 172,575,820 | 168,396,553 | 163,285,738 | 161,057,300 | |||||||
Weighted average shares - diluted | 172,575,820 | 168,396,553 | 163,620,980 | 161,057,300 |
Authorized Common Stock (Detail
Authorized Common Stock (Details) | Jul. 01, 2020Votestockholder$ / sharesshares | Dec. 31, 2020$ / sharesshares | Sep. 30, 2020$ / sharesshares | Jun. 30, 2020shares | Sep. 30, 2019$ / sharesshares |
Authorized Common Stock | |||||
Common Stock, Par Value | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | |
Common Stock, Shares Authorized | shares | 800,000,000 | 800,000,000 | 800,000,000 | 300,000,000 | 300,000,000 |
Stockholders' votes for authorization | 103,553,044 | ||||
Stockholders' votes against authorization | 33,707,332 | ||||
Numbers of stockholders' abstained | stockholder | 3,678,519 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | Nov. 06, 2020 | Dec. 31, 2020 | Sep. 30, 2020 | Jul. 01, 2020 | Jun. 04, 2020 | Sep. 30, 2019 |
Subsequent Event [Line Items] | ||||||
Common Stock, Par Value | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||
Series J warrant | ||||||
Subsequent Event [Line Items] | ||||||
Term of the warrants | 1 year | |||||
Series 2 convertible notes | ||||||
Subsequent Event [Line Items] | ||||||
Interest rate (as a percent) | 10.00% | |||||
Aggregate principal amount | $ 1,050,000 | |||||
Term of the debt | 3 years | |||||
Common Stock, Par Value | $ 0.001 | |||||
Conversion Price (in dollars per share) | 0.25 | |||||
VWAP (in dollars per share) | $ 0.32 | |||||
Number of consecutive trading days for minimum VWAP | 15 days | |||||
Percentage of unpaid principal amount for outstanding note obligations | 35.00% | |||||
Percentage on Interest for Outstanding Note Obligations | 10.00% | |||||
Interest rate on the convertible debt | 10.00% | |||||
Subsequent Event [Member] | Series J warrant | ||||||
Subsequent Event [Line Items] | ||||||
Term of the warrants | 30 months | |||||
Subsequent Event [Member] | Series J warrant | Maximum [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Number of shares called by warrant | 3,375,000 | |||||
Subsequent Event [Member] | Series 2 convertible notes | ||||||
Subsequent Event [Line Items] | ||||||
Interest rate (as a percent) | 10.00% | |||||
Aggregate principal amount | $ 1,050,000 | |||||
Term of the debt | 3 years | |||||
Common Stock, Par Value | $ 0.001 | |||||
Conversion Price (in dollars per share) | 0.25 | |||||
VWAP (in dollars per share) | $ 0.32 | |||||
Number of consecutive trading days for minimum VWAP | 15 days | |||||
Percentage of unpaid principal amount for outstanding note obligations | 35.00% | |||||
Percentage on Interest for Outstanding Note Obligations | 10.00% | |||||
Interest rate on the convertible debt | 10.00% |
Consolidated Balance Sheets_2
Consolidated Balance Sheets - USD ($) | Dec. 31, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Sep. 30, 2018 |
Current assets: | |||||
Cash | $ 879,413 | $ 959,309 | $ 2,180,329 | ||
Inventory | 1,015,740 | 967,993 | 346,647 | ||
Prepaid expenses and other current assets | 197,131 | 215,673 | 362,705 | ||
Total current assets | 2,092,284 | 2,142,975 | 2,889,681 | ||
Long-term assets: | |||||
Property and equipment, net | 4,180 | 4,552 | 9,023 | ||
Other assets | 3,500 | 3,500 | 3,500 | ||
Total long-term assets | 7,680 | 8,052 | 12,523 | ||
Total assets | 2,099,964 | 2,151,027 | 2,902,204 | ||
Current liabilities: | |||||
Accounts payable | 391,151 | 342,050 | 533,555 | ||
Accrued expenses and other liabilities | 294,022 | 266,749 | 180,256 | ||
Current portion of PPP Loan | 57,273 | 37,442 | 0 | ||
Total current liabilities | 742,446 | 646,241 | 713,811 | ||
Long-term liabilities: | |||||
Long-term portion of PPP loan | 119,027 | 138,858 | 0 | ||
Promissory convertible debt | 550,000 | 0 | |||
Derivative liability | 2,207,475 | 2,316,419 | 2,995,690 | ||
Total long-term liabilities | 3,926,502 | 3,005,277 | 2,995,690 | ||
Total liabilities | 4,668,948 | 3,651,518 | 3,709,501 | ||
Commitments and contingencies | |||||
Stockholders' deficit: | |||||
Common stock, $0.001 par value, 800,000,000 shares authorized as of December 31, 2020 and September 30, 2020, 193,094,766 and 193,044,766 shares issued and outstanding as of December 31, 2020 and September 30, 2020, respectively | 193,045 | 193,045 | 172,612 | ||
Additional paid-in capital | 41,948,512 | 41,862,901 | 37,885,151 | ||
Accumulated deficit | (44,710,541) | (43,556,437) | (38,865,060) | ||
Total stockholders' deficit | (2,568,984) | (1,500,491) | $ (100,837) | (807,297) | $ 1,359,828 |
Total liabilities and stockholders' deficit | 2,099,964 | 2,151,027 | $ 2,902,204 | ||
Series 1 convertible notes | |||||
Long-term liabilities: | |||||
Convertible Notes Payable, Noncurrent | 550,000 | $ 550,000 | |||
Series 2 convertible notes | |||||
Long-term liabilities: | |||||
Convertible Notes Payable, Noncurrent | $ 1,050,000 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2020 | Sep. 30, 2020 | Jul. 01, 2020 | Jun. 30, 2020 | Sep. 30, 2019 |
Consolidated Balance Sheets | |||||
Common Stock, Par Value | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | |
Common Stock, Shares Authorized | 800,000,000 | 800,000,000 | 800,000,000 | 300,000,000 | 300,000,000 |
Common Stock, Shares Issued | 193,094,766 | 193,044,766 | 173,577,233 | ||
Common Stock, Shares Outstanding | 193,094,766 | 193,044,766 | 173,577,233 |
Consolidated Statements of Op_2
Consolidated Statements of Operations - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2020 | Sep. 30, 2019 | |
Consolidated Statements of Operations | |||||||||||
Revenues | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 |
Operating expenses: | |||||||||||
General and administrative expenses | 919,458 | 975,833 | 3,759,554 | 3,974,919 | |||||||
Research and development expenses | 343,590 | 643,734 | 1,611,094 | 2,396,838 | |||||||
Total operating expenses | 1,263,048 | 1,619,567 | 5,370,648 | 6,371,757 | |||||||
Operating loss | (1,263,048) | (1,354,812) | (1,241,700) | (1,154,569) | (1,619,567) | (1,524,305) | (1,572,261) | (1,507,366) | (1,767,824) | (5,370,648) | (6,371,757) |
Other income/(expense) | |||||||||||
Decrease (increase) to fair value of derivative | 108,944 | (40,187) | 679,271 | 1,824,175 | |||||||
Total other income (expense) | 108,944 | (40,187) | 679,271 | 1,824,175 | |||||||
Net loss | $ (1,154,104) | $ (1,395,373) | $ (904,367) | $ (731,884) | $ (1,659,754) | $ (828,144) | $ (1,289,162) | $ 169,962 | $ (2,600,237) | $ (4,691,377) | $ (4,547,582) |
Earnings per share - basic and diluted | |||||||||||
Net loss per common share - basic and diluted | $ (0.01) | $ 0 | $ (0.01) | $ 0 | $ (0.01) | $ (0.01) | $ (0.01) | $ 0 | $ 0 | $ (0.02) | $ (0.03) |
Weighted common shares - basic and diluted | 193,044,766 | 192,855,962 | 188,340,505 | 186,897,947 | 184,102,916 | 188,051,683 | 166,339,862 |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Stockholders' (Deficit) - USD ($) | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total |
Balance at the beginning of the period at Sep. 30, 2018 | $ 159,815 | $ 35,517,491 | $ (34,317,478) | $ 1,359,828 |
Balance at the beginning of the period (in shares) at Sep. 30, 2018 | 159,815,013 | |||
Net loss | $ 0 | 0 | (4,547,582) | (4,547,582) |
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) | 477,269 | |||
Shares issued for the exercise of stock options | $ 88 | 32,312 | 0 | 32,400 |
Shares issued for the exercise of stock options (in shares) | 87,567 | |||
Issuance of restricted stock | $ 3,517 | (3,517) | 0 | 0 |
Issuance of restricted stock (in shares) | 3,517,000 | |||
Issuance of restricted stock for services | $ 100 | 42,900 | 0 | 43,000 |
Issuance of restricted stock for services (in shares) | 100,000 | |||
Stock based compensation expense | $ 0 | 1,184,349 | 0 | 1,184,349 |
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 | 172,612,233 | 173,577,233 | ||
Net loss | $ 0 | 0 | (1,659,754) | $ (1,659,754) |
Issuance of common stock and warrants, net of financing costs | $ 14,286 | 2,152,876 | 0 | 2,167,162 |
Issuance of common stock and warrants, net of financing costs (in shares) | 14,285,714 | |||
Stock based compensation expense | $ 0 | 199,052 | 0 | 199,052 |
Balance at the ending of the period at Dec. 31, 2019 | $ 186,898 | 40,237,079 | (40,524,814) | (100,837) |
Balance at the ending of the period (in shares) at Dec. 31, 2019 | 186,897,947 | |||
Balance at the beginning of the period at Sep. 30, 2019 | $ 172,612 | 37,885,151 | (38,865,060) | $ (807,297) |
Balance at the beginning of the period (in shares) at Sep. 30, 2019 | 172,612,233 | 173,577,233 | ||
Net loss | $ 0 | 0 | (4,691,377) | $ (4,691,377) |
Issuance of common stock and warrants, net of financing costs | $ 14,286 | 2,152,876 | 0 | 2,167,162 |
Issuance of common stock and warrants, net of financing costs (in shares) | 14,285,714 | |||
Issuance of restricted stock | $ 965 | (965) | 0 | 0 |
Issuance of restricted stock (in shares) | 965,000 | |||
Stock based compensation expense | $ 0 | 898,293 | 0 | 898,293 |
Balance at the ending of the period at Sep. 30, 2020 | $ 193,045 | 41,862,901 | (43,556,437) | $ (1,500,491) |
Balance at the ending of the period (in shares) at Sep. 30, 2020 | 193,044,766 | 193,044,766 | ||
Net loss | $ 0 | 0 | (1,154,104) | $ (1,154,104) |
Stock based compensation expense | 0 | 85,611 | 0 | 85,611 |
Balance at the ending of the period at Dec. 31, 2020 | $ 193,045 | $ 41,948,512 | $ (44,710,541) | $ (2,568,984) |
Balance at the ending of the period (in shares) at Dec. 31, 2020 | 193,044,766 | 193,094,766 |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows - USD ($) | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Cash flows from operating activities: | ||||
Net loss | $ (1,154,104) | $ (1,659,754) | $ (4,691,377) | $ (4,547,582) |
Adjustments to reconcile net loss to cash used in operating activities: | ||||
Depreciation | 372 | 1,936 | 6,926 | 8,238 |
Stock-based compensation | 85,611 | 199,052 | 898,293 | 1,184,349 |
Issuance of restricted stock for services | 0 | 43,000 | ||
Increase in inventory reserve | 60,385 | 0 | ||
(Decrease) increase to fair value of derivative | (108,944) | 40,187 | (679,271) | (1,824,175) |
(Increase) decrease in: | ||||
Inventory | (47,747) | 146,292 | (681,731) | (346,647) |
Prepaid expenses and other current assets | 18,542 | 33,194 | 147,032 | (210,911) |
Increase (decrease) in: | ||||
Accounts payable | 49,101 | (132,007) | (191,505) | 372,609 |
Accrued expenses and other liabilities | 27,273 | 49,452 | 86,493 | 52,817 |
Net cash used in operating activities | (1,129,896) | (1,321,648) | (5,044,755) | (5,268,302) |
Cash flows from investing activities: | ||||
Purchases of property and equipment | 0 | (2,455) | (2,455) | 0 |
Net cash used in investing activities | 0 | (2,455) | (2,455) | 0 |
Cash flows from financing activities: | ||||
Proceeds received from PPP loan | 176,300 | 0 | ||
Proceeds received from Series 2 convertible notes | 550,000 | 0 | ||
Proceeds from issued common stock and warrants, net of financing costs | 0 | 2,167,162 | 2,167,162 | 2,748,821 |
Proceeds from exercise of warrants | 932,728 | 0 | ||
Proceeds from exercise of stock options | 0 | 32,400 | ||
Net cash provided by financing activities | 1,050,000 | 2,167,162 | 3,826,190 | 2,781,221 |
Net (decrease) increase in cash | (79,896) | 843,059 | (1,221,020) | (2,487,081) |
Cash, beginning of year | 959,309 | 2,180,329 | 2,180,329 | 4,667,410 |
Cash, end of period | 879,413 | 3,023,388 | 959,309 | 2,180,329 |
Non-cash financing activities: | ||||
Warrant derivative liability | 0 | 1,628,113 | ||
Exercise of stock options - cashless | 0 | 477 | ||
Issuance of restricted stock | 965 | 3,517 | ||
Issuance of restricted stock for services | 93,500 | 43,000 | ||
Series J Warrants issuance cost | $ 219,737 | $ 0 | ||
Series 2 convertible notes | ||||
Cash flows from financing activities: | ||||
Proceeds received from Series 2 convertible notes | $ 1,050,000 | $ 0 |
BASIS OF PRESENTATION AND DES_2
BASIS OF PRESENTATION AND DESCRIPTION OF BUSINESS | 3 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Sep. 30, 2020 | |
BASIS OF PRESENTATION AND DESCRIPTION OF BUSINESS | ||
BASIS OF PRESENTATION AND DESCRIPTION OF BUSINESS | 1. Organization and 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. | 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 ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Sep. 30, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. The accompanying unaudited interim consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). The interim consolidated financial statements included herein are unaudited; however, they contain all normal recurring accruals and adjustments that, in the opinion of management, are necessary to present fairly our results of operations and financial position for the interim periods. Although we believe that the disclosures in these unaudited interim consolidated financial statements are adequate to make the information presented not misleading, certain information normally included in the footnotes prepared in accordance with US GAAP has been omitted as permitted by the rules and regulations of the Securities and Exchange Commission (“SEC”). These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10‑K for the fiscal year ended September 30, 2020, filed with the SEC on December 11, 2020. For a complete summary of our significant accounting policies, please refer to Note 2 included in Item 8 of our Form 10-K for the fiscal year ended September 30, 2020. There have been no material changes to our significant accounting policies during the three months ended December 31, 2020. 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. We are a biotechnology company marketing or developing a number of products and are 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) 2018-13, “Fair Value Measurement (Topic 820) Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement” was issued by the Financial Accounting Standards Board (FASB) in August 2018. The purpose of this amendment in this Update is to modify the disclosure requirements on fair value measurements in Topic 820. 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, 2019. The Company adopted ASU 2018-13 during our first quarter of fiscal year 2021. 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 December 31, 2020 and September 30, 2020. 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, goods-in-process and finished goods 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. 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. 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 three months ended December 31, 2020 and 2019 there has not been any impairment of long-lived assets. Leases The Company determines if an arrangement is a lease at its inception. Operating lease right-of-use (“ROU”) assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As our lease does not provide an implicit interest rate, we use an incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Lease expense for lease payments is recognized on a straight-line basis over the lease term. As of December 31, 2020 and September 30, 2020, our ROU asset is included in prepaid expenses and other current assets and the lease obligations is included in accrued expenses and other current liabilities on our consolidated balance sheets. As of December 31, 2020, ROU asset of approximately $30,000 represents our right to use an underlying asset for the lease term and the lease liabilities of approximately $30,000 represents our obligation to make lease payments arising from the lease. 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. 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 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 be recognized in the consolidated financial statements based on their fair values. 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 was 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 expected life for awards uses the 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 December 31, 2020 and September 30, 2020, the carrying amounts of cash, accounts payables and accrued expenses and other liabilities approximate fair value because of their short-term nature. The carrying amounts for the PPP Loan and the Convertible Notes approximate fair value. 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. Financial Statement Reclassification Certain balances in the prior year consolidated financial statements have been reclassified for comparison purposes to conform to the presentation in the current period consolidated financial statements. Subsequent Events The Company evaluated all events or transactions that occurred commencing from January 25, 2021 and ending on February 11, 2021 the date which these unaudited interim consolidated financial statements were issued. The Company disclosed material subsequent events, if any, in Note 16. 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 December 31, 2020, 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. Finally, some of our product candidates or the materials contained therein (such as the Active Pharmaceutical Ingredients (“APIs”) for our AC5(R) product line), are manufactured from facilities in areas impacted by the outbreak of the coronavirus, which could result in shortages due to ongoing efforts to address the outbreak. 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 its subsidiary 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. The continued spread of coronavirus and uncertain market conditions may also limit the Company’s ability to access capital. If the Company is unable to obtain adequate capital, the Company may be required to reduce the scope, delay, or eliminate some or all of its planned activities. These conditions, in the aggregate, raise substantial doubt as to the Company’s ability to continue as a going concern. 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. | 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. We are a biotechnology company marketing or developing a number of products and are 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 adopted ASU 2018-07 during our first quarter of fiscal year 2020, and the impact was considered immaterial on our consolidated financial statements. 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. The Company adopted ASU 2016-02 during our first quarter of fiscal year 2020, and the impact has been recorded within the consolidated financial statement using the modified retrospective method. 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, 2020 and September 30, 2019. 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, goods-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. Inventory reserves are included in research and development expenses for the fiscal year ended September 30, 2020. 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. 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, 2020 and 2019 there has not been any impairment of long-lived assets. Leases The Company determines if an arrangement is a lease at its inception. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As our lease does not provide an implicit interest rate, we use an incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Lease expense for lease payments is recognized on a straight-line basis over the lease term. As of September 30, 2020, our ROU asset is included in prepaid expenses and other current assets and the lease obligations is included in accrued expenses and other current liabilities on our consolidated balance sheets. The impact upon adoption was considered immaterial to the consolidated financial statements. As of September 30, 2020, the right-of-use (“ROU”) asset of approximately $39,000 represents our right to use an underlying asset for the lease term and the lease liabilities of approximately $39,000 represents our obligation to make lease payments arising from the lease. 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. 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 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 be recognized in the consolidated financial statements based on their fair values. 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 was 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, 2020 and September 30, 2019, the carrying amounts of cash, accounts payable, accrued expenses and other liabilities, approximate fair value because of their short-term nature. The carrying amounts for the PPP Loan and the Promissory convertible debt approximate fair value. 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, 2020 and ending on December 10, 2020 the date which these consolidated financial statements were issued. The Company disclosed material subsequent events in Note 20. 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, 2020, 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. Finally, some of our product candidates or the materials contained therein (such as the Active Pharmaceutical Ingredients (“APIs”) for our AC5 (R) product line), are manufactured from facilities in areas impacted by the outbreak of the coronavirus, which could result in shortages due to ongoing efforts to address the outbreak. 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 its subsidiary 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. The continued spread of coronavirus and uncertain market conditions may also limit the Company’s ability to access capital. If the Company is unable to obtain adequate capital, the Company may be required to reduce the scope, delay, or eliminate some or all of its planned commercial activities. These conditions, in the aggregate, raise substantial doubt as to the Company’s ability to continue as a going concern. 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_2
PROPERTY AND EQUIPMENT | 3 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Sep. 30, 2020 | |
PROPERTY AND EQUIPMENT | ||
PROPERTY AND EQUIPMENT | 3. At December 31, 2020 and September 30, 2020, property and equipment consisted of: Estimated Useful December 31, September 30, Life 2020 2020 Furniture and fixtures 5 years $ 9,357 $ 9,357 Leasehold improvements Life of Lease 8,983 8,983 Computer equipment 3 years 11,141 11,141 Lab equipment 5 years 1,000 1,000 30,481 30,481 Less – accumulated depreciation 26,301 25,929 Property and equipment, net $ 4,180 $ 4,552 For the three months ended December 31, 2020 and 2019 depreciation expense recorded was $372 and $1,936, respectively. | 3. PROPERTY AND EQUIPMENT At September 30, 2020 and September 30, 2019, property and equipment consisted of: Estimated September 30, September 30, Useful Life 2020 2019 Furniture and fixtures 5 years $ 9,357 $ 9,357 Leasehold improvements Life of Lease $ 8,983 $ 8,983 Computer equipment 3 years $ 11,141 $ 8,686 Lab equipment 5 years $ 1,000 $ 1,000 30,481 28,026 Less – accumulated depreciation 25,929 19,003 Property and equipment, net $ 4,552 $ 9,023 For the years ended September 30, 2020 and 2019 depreciation expense recorded was $6,926 and $8,238, respectively. |
INVENTORIES_2
INVENTORIES | 3 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Sep. 30, 2020 | |
INVENTORIES | ||
INVENTORIES | 4 . INVENTORIES Inventories consist of the following: December 31, September 30, 2020 2020 Finished Goods $ 300,009 $ — Goods-in-process 715,731 967,993 Total $ 1,015,740 $ 967,993 The Company capitalizes inventory that has been produced for commercial sale and has been determined to have a probable future economic benefit. The determination of whether or not the inventory has a future economic benefit requires estimates by management. Our inventory levels are analyzed to identify inventory that may expire prior to sale. To the extent that inventory is expected to expire prior to being sold, the Company will write down the value of inventory. | 5 . INVENTORIES Inventories consist of the following: September 30, September 30, 2020 2019 Goods-in-process $ 1,028,378 $ 328,500 Raw Material — 18,147 Inventory Reserves (60,385) — Total $ 967,993 $ 346,647 The increase in inventory is due to continued manufacturing and receipt of product in preparation for commercialization. There was no reserve as of September 30, 2019. Included in research and development expense for the year ended September 30, 2020 is an increase to the inventory reserve of $60,385 which the majority of which is attributable to required product testing during the manufacturing process. In determining net realizable value, appropriate consideration is given to obsolescence, excessive levels, deterioration, and other factors in evaluating net realizable value. |
STOCK-BASED COMPENSATION_2
STOCK-BASED COMPENSATION | 3 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Sep. 30, 2020 | |
STOCK-BASED COMPENSATION | ||
STOCK-BASED COMPENSATION | 5. 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, 2020, a maximum number of 28,114,256 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, 2020, the aggregate number of authorized shares under the Plan was further increased by 3,000,000 shares to a total of 31,114,256 shares. As of December 31, 2020, a total of 19,179,212 options had been issued to employees and directors and 8,692,500 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 three months ended December 31, 2020, the Company granted no options to employees and directors and 975,000 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 three months ended December 31, 2020 was based on the fair market value 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 three months ended December 31, 2020; expected volatility, 79.44% - 119.44%, risk-free interest rate, 0.13% – 2.85%, expected forfeiture rate, 0%, expected dividend yield, 0%, expected term, 5.6 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 was 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 three months ended December 31, 2020 follows: Weighted Weighted Average Option Average Remaining Aggregate Shares Exercise Contractual Intrinsic Outstanding Price Term (years) Value Outstanding at September 30, 2020 18,248,346 $ 0.36 2.59 $ 79,330 Awarded 975,000 $ 0.17 — — Forfeited/Cancelled (148,191) $ 0.44 — — Outstanding at December 31, 2020 19,075,155 $ 0.35 2.61 $ 119,733 Vested at December 31, 2020 16,587,085 $ 0.37 2.64 $ 70,693 Vested and expected to vest at December 31, 2020 19,075,155 $ 0.35 2.61 $ 119,733 As of December 31, 2020, 6,873,199 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 three months ended December 31, 2020 and 2019 resulting from stock options awarded to the Company’s employees, directors and consultants was approximately $86,000 and $159,000, respectively. Of this amount during the three months ended December 31, 2020 and 2019, $26,000 and $76,000, respectively, were recorded as research and development expenses, and $60,000 and $83,000, respectively were recorded as general and administrative expenses in the Company’s Consolidated Statements of Operations. During the three months ended December 31, 2020 and 2019, no stock options awarded under the 2013 Stock Incentive Plan were exercised. As of December 31, 2020, there is approximately $265,000 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 1.41 years. Restricted Stock On October 14, 2020, the Company awarded 50,000 shares of Restricted Stock to a consultant. The shares subject to this grant are awarded under the 2013 Plan and vest 90 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 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. Avtar Dhillon in his capacity as a consultant. The shares subject to this grant are awarded under the 2013 Plan and 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. As of September 30, 2020, all restricted shares have vested. 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. As of September 30, 2020, all restricted shares have vested. Restricted stock activity in shares under the 2013 Plan for the three months ended December 31, 2020 and 2019 follows: 2020 2019 Non Vested at September 30, 2020 and 2019 — 965,000 Awarded 50,000 — Vested — — Forfeited — — Non Vested at December 31, 2020 and 2019 50,000 965,000 The weighted average restricted stock award date fair value information for the three months ended December 31, 2020 and 2019 follows: 2020 2019 Non Vested at September 30, 2020 and 2019 $ — $ 0.57 Awarded 0.18 — Vested — — Forfeited — — Non Vested at December 31, 2020 and 2019 $ 0.18 $ 0.57 For the three months ended December 31, 2020 and 2019 compensation expense recorded for the restricted stock awards was approximately $0 and $40,000, respectively. | 14. 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, 2020, a maximum number of 28,114,256 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, 2020, the aggregate number of authorized shares under the Plan was further increased by 3,000,000 shares to a total of 31,114,256 shares. As of September 30, 2020, a total of 19,179,212 options had been issued to employees and directors and 7,717,500 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 year ended September 30, 2020, the Company granted 2,685,000 options to employees and directors and 690,000 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 year ended September 30, 2020 was based on the fair market value 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 year ended September 30, 2020; expected volatility, 79.44% - 119.44%, risk-free interest rate, 0.13% - 3.23%, expected forfeiture rate, 0%, expected dividend yield, 0%, expected term, 5.6 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 was 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, 2020 follows: Weighted Weighted Average Option Average Remaining Aggregate Shares Exercise Contractual Intrinsic Outstanding Price Term (years) Value Outstanding at September 30, 2019 15,807,911 $ 0.40 3.14 $ 142,810 Awarded 3,375,000 $ 0.22 — — Forfeited/Cancelled (934,565) $ 0.44 — — Outstanding at September 30, 2020 18,248,346 $ 0.36 2.59 $ 79,330 Vested at September 30, 2020 16,077,006 $ 0.38 2.78 $ 69,305 Vested and expected to vest at September 30, 2020 18,248,346 $ 0.36 2.59 $ 79,330 As of September 30, 2020, 4,750,008 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 year ended September 30, 2020 and 2019 resulting from stock options awarded to the Company’s employees, directors and consultants was approximately $678,000 and $830,000, respectively. Of this amount during the years ended September 30, 2020 and 2019, $288,000 and $483,000, respectively, were recorded as research and development expenses, and $390,000 and $347,000, respectively were recorded as general and administrative expenses in the Company’s Consolidated Statements of Operations. During the year ended September 30, 2020, no stock options awarded under the 2013 Stock Incentive Plan were exercised for cash. 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, 2020, no stock options awarded under the 2013 Stock Incentive Plan were exercised on a cashless basis. 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. As of September 30, 2020, there is approximately $268,000 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 1.80 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. Avtar Dhillon in his capacity as a consultant. The shares subject to this grant are awarded under the 2013 Plan and 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. As of September 30, 2020, all restricted shares have vested. 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. As of September 30, 2020, all restricted shares have vested. 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 were awarded under the 2013 Plan and fully vested 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 would have immediately vested. Restricted stock activity in shares under the 2013 Plan for the years ended September 30, 2020 and 2019 follows: 2020 2019 Non Vested at September 30, 2019 and 2018 965,000 2,815,000 Awarded — — Vested (965,000) (1,850,000) Forfeited — — Non Vested at September 30, 2020 and 2019 — 965,000 The weighted average restricted stock award date fair value information for the years ended September 30, 2020 and 2019 follows: 2020 2019 Non Vested at September 30, 2019 and 2018 $ 0.43 $ 0.57 Awarded — — Vested (0.43) (0.64) Forfeited — — Non Vested at September 30, 2020 and 2019 $ — $ 0.43 For the years ended September 30, 2020 and 2019 compensation expense recorded for the restricted stock awards was approximately $220,000 and $397,000, respectively. |
2015 PRIVATE PLACEMENT FINANC_3
2015 PRIVATE PLACEMENT FINANCING | 3 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Sep. 30, 2020 | |
2015 Private Placement Financing [Member] | ||
Private Placement [Line Items] | ||
2015 PRIVATE PLACEMENT FINANCING | 6. 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. On June 3, 2020, the Company entered into an agreement (the “Agreement”) with the holders of a majority (the “Majority Holders”) of the outstanding Series D Warrants (the “Warrant”) resulting in approximately $850,000 of proceeds as a result of the full exercise of their Warrants. The Agreement provides for the reduction of the Series D Warrant exercise price from $0.25 to $0.18 per share, and the elimination of a provision that prevents the Series D Warrants from being exercised if the holder’s beneficial ownership would exceed 4.9% as a result. Under the terms of the Agreement, in exchange for fully exercising their remaining Warrants for 4,727,273 shares of common stock on June 4, 2020, the Majority Holders were issued Series J Warrants to purchase 3,545,454 shares of common stock at an exercise price of $0.25 over a 1 year term. On June 22, 2020, the Company entered into a Series J Warrant Issuance Agreement (the “Keyes Sulat Agreement”) with the Keyes Sulat Revocable Trust (the “ Trust ”), also a holder of outstanding Series D Warrants, resulting in approximately $82,000 of proceeds as a result of the full exercise of the Trust’s Warrants. Under the terms of the Keyes Sulat Agreement, in exchange for fully exercising the Trust’s remaining Warrants for 454,546 shares of common stock on June 22, 2020, the Trust was issued Series J Warrants to purchase 340,910 shares of common stock at an exercise price of $0.25 over a 1 year term. James R. Sulat, a member of the Board, is a co-trustee of the Trust, of which members of Mr. Sulat’s immediate family are beneficiaries. Mr. Sulat disclosed his interest in the Trust to the Board prior to its approval of the transaction and abstained from voting on the transaction. On November 6, 2020, as consideration for investment in the Convertible Notes, the Company entered into that certain Amendment to Series J Warrant to Purchase Common Stock, a holder of a Series J Warrant exercisable for up to 3,375,000 shares of Common Stock, to extend the term of the Series J Warrant from one (1) year to thirty (30) months. As a result of the issuance of the Series J Warrants, in conjunction with the exercise of the Series D Warrants, the Company recorded in equity a noncash equity issuance cost valued at approximately $220,000. This charge was estimated using the Black-Scholes Option Pricing Model with the following assumptions; expected volatility, 88.15%, risk-free interest rate, 0.16%, expected forfeiture rate, 0%, expected dividend yield, 0%, expected term, 1.08 years. The Series J Warrants are indexed to the Company’s stock and are classified as equity. During the year ended September 30, 2020, Series D Warrants had been exercised on a cash basis for an aggregate issuance of 5,181,819 shares of the Company’s common stock resulting in gross proceeds to the Company of $932,728. During the fiscal year ended September 30, 2019, no Series D Warrants had been exercised. As of September 30, 2020, 3,792,570 Series D Warrants expired. Common Stock At June 30, 2015 the 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 and the Series J Warrants are indexed to the Company’s stock, they are classified within stockholders’ equity (deficit) in the accompanying consolidated financial statements. | 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. On June 3, 2020, the Company entered into an agreement (the “ Agreement ”) with the holders of a majority (the “ Majority Holders ”) of the outstanding Series D Warrants (the “ Warrant ”) resulting in approximately $850,000 of proceeds as a result of the full exercise of their Warrants. The Agreement provides for the reduction of the Series D Warrant exercise price from $0.25 to $0.18 per share, and the elimination of a provision that prevents the Series D Warrants from being exercised if the holder’s beneficial ownership would exceed 4.9% as a result. Under the terms of the Agreement, in exchange for fully exercising their remaining Warrants for 4,727,273 shares of common stock on June 4, 2020, the Majority Holders were issued Series J Warrants to purchase 3,545,454 shares of common stock at an exercise price of $0.25 over a 1 year term. On June 22, 2020, the Company entered into a Series J Warrant Issuance Agreement (the “Keyes Sulat Agreement”) with the Keyes Sulat Revocable Trust (the “ Trust ”), also a holder of outstanding Series D Warrants, resulting in approximately $82,000 of proceeds as a result of the full exercise of the Trust’s Warrants. Under the terms of the Keyes Sulat Agreement, in exchange for fully exercising the Trust’s remaining Warrants for 454,546 shares of common stock on June 22, 2020, the Trust was issued Series J Warrants to purchase 340,910 shares of common stock at an exercise price of $0.25 over a 1 year term. James R. Sulat, a member of the Board, is a co-trustee of the Trust, of which members of Mr. Sulat’s immediate family are beneficiaries. Mr. Sulat disclosed his interest in the Trust to the Board prior to its approval of the transaction and abstained from voting on the transaction. As a result of the issuance of the Series J Warrants, in conjunction with the exercise of the Series D Warrants, the Company recorded in equity a noncash equity issuance cost valued at approximately $220,000. This charge was estimated using the Black-Scholes Option Pricing Model with the following assumptions; expected volatility, 88.15%, risk-free interest rate, 0.16%, expected forfeiture rate, 0%, expected dividend yield, 0%, expected term, 1.08 years. The series J Warrants are indexed to the Company’s stock and are classified as equity. During the fiscal year ended September 30, 2020, Series D Warrants had been exercised on a cash basis for an aggregate issuance of 5,181,819 shares of the Company’s common stock resulting in gross proceeds to the Company of $932,728. During the fiscal year ended September 30, 2019, no Series D Warrants had been exercised. As of September 30, 2020, 3,792,570 Series D Warrants expired. Common Stock At June 30, 2015 the 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 and the Series J Warrants are indexed to the Company’s stock, they are classified within stockholders’ equity (deficit) in the accompanying consolidated financial statements. |
2016 PRIVATE PLACEMENT FINANC_3
2016 PRIVATE PLACEMENT FINANCING | 3 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Sep. 30, 2020 | |
Private Placement 2016 [Member] | ||
Private Placement [Line Items] | ||
2016 PRIVATE PLACEMENT FINANCING | 7. 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 three months ended December 31, 2020 and 2019, no Series E Warrants had been exercised. As of December 31, 2020, 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. | 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 fiscal years ended September 30, 2020 and 2019, no Series E Warrants had been exercised. As of September 30, 2020, 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 OFFERI_6
2017 REGISTERED DIRECT OFFERING | 3 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Sep. 30, 2020 | |
REGISTERED DIRECT OFFERING 2017 [Member] | ||
REGISTERED DIRECT OFFERING [Line Items] | ||
2017 REGISTERED DIRECT OFFERING | 8 . 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, a Series F Warrant equal to 55% of the shares 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. During the three months ended December 31, 2020 and 2019, no Series F Warrants had been exercised. As of December 31, 2020, 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 three months ended December 31, 2020 and 2019, $0 and $274,404 were recorded to decrease the fair value of derivative, respectively. Fair Value Measurements Using Significant Unobservable Inputs December 31, September 30, (Level 3) 2020 2020 Beginning balance at September 30, 2020 and 2019 $ 1,000,000 $ 1,000,000 Issuances — — Adjustments to estimated fair value — — Ending balance at December 31, 2020 and September 30, 2020 $ 1,000,000 $ 1,000,000 The derivative liabilities were valued as of December 31, 2020 and September 30, 2020 using the Black Scholes Model with the following assumptions: December 31, September 30, 2020 2020 Closing price per share of common stock $ 0.15 $ 0.17 Exercise price per share $ 0.75 $ 0.75 Expected volatility 82.10 % 84.17 % Risk-free interest rate 0.10 % 0.13 % Dividend yield — — Remaining expected term of underlying securities (years) 1.35 | 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. During the fiscal years ended September 30, 2020 and 2019, no Series F Warrants had been exercised. As of September 30, 2020, 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 years ended September 30, 2020 and 2019, $0 and $274,404 were recorded to decrease the fair value of derivative, respectively. Fair Value Measurements Using Significant Unobservable Inputs September 30, September 30, (Level 3) 2020 2019 Beginning balance at beginning of year $ 1,000,000 $ 1,274,404 Issuances — — Adjustments to estimated fair value — (274,404) Ending balance at end of year $ $ The derivative liabilities were valued as of September 30, 2020 and September 30, 2019 using the Black Scholes Model with the following assumptions: September 30, September 30, 2020 2019 Closing price per share of common stock $ 0.17 $ 0.24 Exercise price per share $ 0.75 $ 0.75 Expected volatility 84.17 % 78.15 % Risk-free interest rate 0.13 % 1.60 % Dividend yield — — Remaining expected term of underlying securities (years) 1.35 2.37 |
2018 REGISTERED DIRECT OFFERI_6
2018 REGISTERED DIRECT OFFERING | 3 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Sep. 30, 2020 | |
Registered Direct Offering 2018 [Member] | ||
REGISTERED DIRECT OFFERING 2018 [Line Items] | ||
2018 REGISTERED DIRECT OFFERING | 9. 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, a Series G Warrant to purchase up to a number of shares of our common stock equal to 75% of the shares 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. 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. 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, 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. During the three months ended December 31, 2020 and 2019, no Series G Warrants had been exercised. As of December 31, 2020, 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. During the three months ended December 31, 2020 and 2019, $0 were recorded to decrease the fair value of derivative, respectively. Fair Value Measurements Using Significant Unobservable Inputs December 31, September 30, (Level 3) 2020 2020 Beginning balance at September 30, 2020 and 2019 $ 748,275 $ 748,275 Issuances — — Adjustments to estimated fair value — — Ending balance at December 31, 2020 and September 30, 2020 $ 748,275 $ 748,275 The derivative liabilities were valued as of December 31, 2020 and September 30, 2020 using the Black Scholes Model with the following assumptions: December 31, September 30, 2020 2020 Closing price per share of common stock $ 0.15 $ 0.17 Exercise price per share $ 0.70 $ 0.70 Expected volatility 83.31 % 83.31 % Risk-free interest rate 0.15 % 0.15 % Dividend yield — — Remaining expected term of underlying securities (years) 2.71 | 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, 2018), 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. During the years ended September 30, 2020 and 2019, no Series G Warrants had been exercised. As of September 30, 2020, 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 years ended September 30, 2020 and 2019, $0 and $1,169,073 were recorded to decrease the fair value of derivative, respectively Fair Value Measurements Using Significant Unobservable Inputs September 30, September 30, (Level 3) 2020 2019 Beginning balance at beginning of year $ 748,275 $ 1,917,348 Issuances — — Adjustments to estimated fair value — (1,169,073) Ending balance at end of year $ 748,275 $ 748,275 The derivative liabilities were valued as of September 30, 2020 and September 30, 2019 using the Black Scholes Model with the following assumptions: September 30, September 30, 2020 2019 Closing price per share of common stock $ 0.17 $ 0.24 Exercise price per share $ 0.70 $ 0.70 Expected volatility 83.31 % 78.72 % Risk-free interest rate 0.15 % 1.56 % Dividend yield — — Remaining expected term of underlying securities (years) 2.71 3.73 |
2019 REGISTERED DIRECT OFFERI_6
2019 REGISTERED DIRECT OFFERING | 3 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Sep. 30, 2020 | |
Registered Direct Offering 2019 [Member] | ||
REGISTERED DIRECT OFFERING 2019 [Line Items] | ||
2019 REGISTERED DIRECT OFFERING | 10. 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 (“the 2019 Warrant Shares”) 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, 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. During the three months ended December, 2020 and 2019, no Series H Warrants had been exercised. As of December 31, 2020, 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 three months ended December 31, 2020 and 2019 $108,944 and ($40,187) was recorded to decrease/(increase) the fair value of derivative liability. Fair Value Measurements Using Significant Unobservable Inputs December 31, September 30, (Level 3) 2020 2020 Beginning balance at September 30, 2020 and 2019 $ 568,144 $ 1,247,415 Issuances — — Adjustments to estimated fair value (108,944) (679,271) Ending balance at December 31, 2020 and September 30, 2020 $ 459,200 $ 568,144 The derivative liabilities were valued as of December 31, 2020 and September 30, 2020 using the Black Scholes Model with the following assumptions: December 31, September 30, 2020 2020 Closing price per share of common stock $ 0.15 $ 0.17 Exercise price per share $ 0.40 $ 0.40 Expected volatility 82.41 % 82.24 % Risk-free interest rate 0.27 % 0.22 % Dividend yield — — Remaining expected term of underlying securities (years) 3.60 | 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. During the fiscal years ended September 30, 2020 and 2019, no Series H Warrants had been exercised. As of September 30, 2020, 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 years ended September 30, 2020 and 2019, $679,271 and $380,698, respectively, was recorded to decrease the fair value of derivative. Fair Value Measurements Using Significant Unobservable Inputs September 30, September 30, (Level 3) 2020 2019 Beginning balance at beginning of year $ 1,247,415 $ — Issuances — 1,628,113 Adjustments to estimated fair value (679,271) (380,698) Ending balance at end of year $ 568,144 $ 1,247,415 The derivative liabilities were valued as of September 30, 2020, September 30, 2019 and May 14, 2019 using the Black Scholes Model with the following assumptions: September 30, September 30, May 14, 2020 2019 2019 Closing price per share of common stock $ 0.17 $ 0.24 $ 0.283 Exercise price per share $ 0.40 $ 0.40 $ 0.40 Expected volatility 82.24 % 92.11 % 93.44 % Risk-free interest rate 0.22 % 1.55 % 2.20 % Dividend yield — — — Remaining expected term of underlying securities (years) 3.60 4.61 5.00 |
OCTOBER 2019 REGISTERED DIREC_3
OCTOBER 2019 REGISTERED DIRECT OFFERING | 3 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Sep. 30, 2020 | |
Registered Direct Offering 2019 [Member] | ||
REGISTERED DIRECT OFFERING 2019 [Line Items] | ||
OCTOBER 2019 REGISTERED DIRECT OFFERING | 11. On October 16, 2019, the Company entered into a Securities Purchase Agreement (“October 2019 SPA”) with 7 accredited investors (“October 2019 Investors”) providing for the issuance and sale by the Company to the 2019 Investors of an aggregate of 14,285,714 units at a purchase price of $0.175 per Unit in a registered offering (“October 2019 Financing”). The securities comprising the units sold in the October 2019 Financing were issued under the Shelf Registration Statement, and consisted of a share of Common Stock, and a Series I Warrant to purchase one share of Common Stock at an exercise price of $0.22 per share at any time prior to the fifth anniversary of the issuance date of the Series I Warrant subject to certain restrictions on exercise (“October 2019 Warrants”) and the shares issuable upon exercise of the October 2019 Warrants, (“October 2019 Warrant Shares”). As of October 18, 2019, the Company recorded the 14,285,714 shares as Common Stock. Pursuant to the Engagement Agreement (as defined below), 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. The gross proceeds to Arch from the October 2019 Financing were approximately $2.5 million before deducting financing costs of approximately $333,000 which includes approximately $158,000 of placement fees. The number of shares of the Company’s Common Stock into which each of the Series I Warrants is exercisable and the exercise price therefore are subject to adjustment, as set forth in the Series I Warrants, including adjustments for stock subdivisions or combinations (by any stock split, stock dividend, recapitalization, reorganization, scheme, arrangement or otherwise). We engaged H.C. Wainwright (“Wainwright”) as our exclusive institutional investor placement agent in connection with the October SPA pursuant to an engagement agreement (the “Engagement Agreement”) dated as of October 10, 2019, and in consideration for the services provided by it, Wainwright was entitled to receive cash fees ranging from 6.0% to 8.2% of the gross proceeds received by us, as well as reimbursement for all reasonable expenses incurred by it in connection with its engagement. We received gross proceeds of approximately $2.5 million in the aggregate, resulting in a fee of approximately $158,000. During the three months ended December 31, 2020 and 2019, no Series I Warrants or Placement Agent Warrants had been exercised. As of December 31, 2020, up to 14,285,714 and 1,071,429 shares may be acquired upon the exercise of the Series I Warrants and Placement Agent Warrants, respectively. Common Stock At October 18, 2019 the Closing Date of the October 2019 Financing, the Company issued 14,285,714 shares of Common Stock. Equity Value of Warrants The Company accounted for the Series I Warrants and the Placement Agent Warrants relating to the aforementioned October 2019 Registered Direct Offering in accordance with ASC 815-40, Derivatives and Hedging . Because the Series I Warrants and the Placement Agent Warrants are indexed to the Company’s stock, they are classified within stockholders’ equity (deficit) in the accompanying consolidated financial statements. | 11. OCTOBER 2019 REGISTERED DIRECT OFFERING On October 16, 2019, the Company entered into a Securities Purchase Agreement (“October 2019 SPA”) with 7 accredited investors (“October 2019 Investors”) providing for the issuance and sale by the Company to the 2019 Investors of an aggregate of 14,285,714 units at a purchase price of $0.175 per Unit in a registered offering (“October 2019 Financing”). The securities comprising the units sold in the October 2019 Financing were issued under the Shelf Registration Statement, and consisted of a share of Common Stock, and a Series I Warrant to purchase one share of Common Stock at an exercise price of $0.22 per share at any time prior to the fifth anniversary of the issuance date of the Series I Warrant subject to certain restrictions on exercise (“October 2019 Warrants”) and the shares issuable upon exercise of the October 2019 Warrants, (“October 2019 Warrant Shares”). As of October 18, 2019, the Company recorded the 14,285,714 shares as Common Stock. Pursuant to the Engagement Agreement (as defined below), 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. The gross proceeds to Arch from the October 2019 Financing, which were received as of October 18, 2019, were approximately $2.5 million before deducting financing costs of approximately $333,000 which includes approximately $158,000 of placement fees. The number of shares of the Company’s Common Stock into which each of the Series I Warrants is exercisable and the exercise price therefore are subject to adjustment, as set forth in the Series I Warrants, including adjustments for stock subdivisions or combinations (by any stock split, stock dividend, recapitalization, reorganization, scheme, arrangement or otherwise). We engaged H.C. Wainwright (“Wainwright”) as our exclusive institutional investor placement agent in connection with the October SPA pursuant to an engagement agreement (the “Engagement Agreement”) dated as of October 10, 2019, and in consideration for the services provided by it, Wainwright was entitled to receive cash fees equal ranging from 6.0% to 8.2% of the gross proceeds received by us, as well as reimbursement for all reasonable expenses incurred by it in connection with its engagement. We received gross proceeds of approximately $2.5 million in the aggregate, resulting in a fee of approximately $158,000. During the year ended September 30, 2020, no Series I Warrants or Placement Agent Warrants had been exercised. As of September 30, 2020, up to 14,285,714 and 1,071,429 shares may be acquired upon the exercise of the Series I Warrants and Placement Agent Warrants, respectively. Common Stock At October 18, 2019 the Closing Date of the October 2019 Financing, the Company issued 14,285,714 shares of Common Stock. Equity Value of Warrants The Company accounted for the Series I Warrants and the Placement Agent Warrants relating to the aforementioned October 2019 Registered Direct Offering in accordance with ASC 815-40, Derivatives and Hedging . Because the Series I Warrants and the Placement Agent Warrants are indexed to the Company’s stock, they are classified within stockholders’ equity (deficit) in the accompanying consolidated financial statements. |
SERIES 1 CONVERTIBLE NOTES
SERIES 1 CONVERTIBLE NOTES | 3 Months Ended |
Dec. 31, 2020 | |
Series 1 convertible notes | |
Debt Conversion [Line Items] | |
SERIES 1 CONVERTIBLE NOTES | 12. On June 4, 2020, the Company issued unsecured 10% Convertible Notes in the aggregate principal amount of $550,000. The Series 1 Convertible Notes provide, among other things, for (i) a term of approximately three (3) years; (ii) the Company’s ability to prepay the Series 1 Convertible Notes, in whole or in part, at any time; (iii) the automatic conversion of the Series 1 Convertible Notes upon a Change of Control (all capitalized terms not otherwise defined to have the meaning ascribed to such terms in the Series 1 Convertible Notes) into shares of the Company’s common stock, par value $0.001 per share (Common Stock), at a per share price of $0.27 (the “ Conversion Price ”); (iv) the ability of a holder of a Convertible Note (a “ Holder ”) to convert the Series 1 Convertible Note and accrued interest, in whole or in part, into shares of Common Stock at the Conversion Price; (v) the Company’s ability to convert all Note Obligations outstanding upon a Qualified Equity Financing into shares of Common Stock at the Conversion Price; (vi) the Company’s ability to convert Series 1 Convertible Notes and accrued interest, in whole or in part, into shares of Common Stock at the Conversion Price in the event the volume weighted average price (“VWAP”) of the Common Stock equals or exceeds $0.32 per share for at least fifteen (15) consecutive Trading Days; (vii) the Company’s ability to convert all outstanding Note Obligations into shares of Common Stock at the Conversion Price (an “ In-Kind Note Repayment ”) in lieu of repaying the Note Obligations outstanding on the Maturity Date, June 30, 2023; provided, however, that in the case of an In-Kind Note Repayment, the outstanding Note Obligations will be calculated by increasing by thirty-five percent (35)% the aggregate sum of the unpaid Principal Amount held by each Holder and the accrued interest at a rate of ten percent (10)% per annum, subject to, with respect to any portion of the Principal Amount that is converted or prepaid before the twelve month anniversary of the Issuance Date, a minimum interest payment equal to ten percent (10)% of the amount that is converted or prepaid. During the three months ended December 31, 2020, the Company recorded interest expense as part of general and administrative expenses of approximately $14,000. |
SERIES 2 CONVERTIBLE NOTES
SERIES 2 CONVERTIBLE NOTES | 3 Months Ended |
Dec. 31, 2020 | |
Series 2 convertible notes | |
Debt Conversion [Line Items] | |
SERIES 2 CONVERTIBLE NOTES | 13. On November 6, 2020, the Company issued unsecured 10% Series 2 Convertible Notes in the aggregate principal amount of $1,050,000. The Series 2 Convertible Notes provide, among other things, for (i) a term of approximately three (3) years; (ii) the Company’s ability to prepay the Series 2 Convertible Notes, in whole or in part, at any time; (iii) the automatic conversion of the Series 2 Convertible Notes upon a Change of Control (all capitalized terms not otherwise defined to have the meaning ascribed to such terms in the Series 2 Convertible Notes) into shares of the Company’s common stock, par value $0.001 per share (Common Stock), at a per share price of $0.25 (the “ Conversion Price ”); (iv) the ability of a holder of a Series 2 Convertible Note (a “ Holder ”) to convert the Series 2 Convertible Note and accrued interest, in whole or in part, into shares of Common Stock at the Conversion Price; (v) the Company’s ability to convert all Note Obligations outstanding upon a Qualified Equity Financing into shares of Common Stock at the Conversion Price; (vi) the Company’s ability to convert Series 2 Convertible Notes and accrued interest, in whole or in part, into shares of Common Stock at the Conversion Price in the event the volume weighted average price (“VWAP”) of the Common Stock equals or exceeds $0.32 per share for at least fifteen (15) consecutive Trading Days; (vii) the Company’s ability to convert all outstanding Note Obligations into shares of Common Stock at the Conversion Price (an “ In-Kind Note Repayment ”) in lieu of repaying the Note Obligations outstanding on the Maturity Date, November 30, 2023; provided, however, that in the case of an In-Kind Note Repayment, the outstanding Note Obligations will be calculated by increasing by thirty-five percent (35)% the aggregate sum of the unpaid Principal Amount held by each Holder and the accrued interest at a rate of ten percent (10)% per annum, subject to, with respect to any portion of the Principal Amount that is converted or prepaid before the twelve month anniversary of the Issuance Date, a minimum interest payment equal to ten percent (10)% of the amount that is converted or prepaid. During the three months ended December 31, 2020, the Company recorded interest expense as part of general and administrative expenses of approximately $15,000. |
PAYROLL PROTECTION PROGRAM LO_3
PAYROLL PROTECTION PROGRAM LOAN | 3 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Sep. 30, 2020 | |
PAYROLL PROTECTION PROGRAM LOAN | ||
PAYROLL PROTECTION PROGRAM LOAN | 14. On April 25, 2020, the Company executed a promissory note (the “ PPP Note ”) evidencing an unsecured loan in the amount of $176,300 under the Paycheck Protection Program (the “ PPP Loan ”). The Paycheck Protection Program (or “ PPP ”) was established under the Coronavirus Aid, Relief, and Economic Security Act (the “ CARES Act ”) and is administered by the U.S. Small Business Administration (“ SBA ”). The Loan has been made through First Republic Bank (the “ Lender ”). The PPP Loan has a two-year term and bears interest at a rate of 1.00% per annum. Monthly principal and interest payments are deferred until the earliest of ten months after the end of our covered period or the date the SBA makes a decision on our loan forgiveness application. Unless the PPP Loan is forgiven, the Company will be required to make monthly payments of principal and interest of approximately $20,000 to the Lender. The PPP Note contains customary events of default relating to, among other things, payment defaults, providing materially false and misleading representations to the SBA or Lender, or breaching the terms of the PPP Loan documents. The occurrence of an event of default may result in the immediate repayment of all amounts outstanding, collection of all amounts owing from the Company, or filing suit and obtaining judgment. Under the terms of the CARES Act, PPP Loan recipients can apply for and be granted forgiveness for all or a portion of loan granted under the PPP. Such forgiveness will be determined, subject to limitations, based on the use of loan proceeds for payment of payroll costs and any payments of mortgage interest, rent, and utilities. However, no assurance is provided that forgiveness for any portion of the PPP Loan will be obtained. During November 2020, the Company applied for forgiveness of the PPP Loan. | 13. PAYROLL PROTECTION PROGRAM LOAN On April 25, 2020, the Company executed a promissory note (the “ PPP Note ”) evidencing an unsecured loan in the amount of $176,300 under the Paycheck Protection Program (the “ PPP Loan ”). The Paycheck Protection Program (or “ PPP ”) was established under the Coronavirus Aid, Relief, and Economic Security Act (the “ CARES Act ”) and is administered by the U.S. Small Business Administration (“ SBA ”). The Loan has been made through First Republic Bank (the “ Lender ”). The PPP Loan has a two-year term and bears interest at a rate of 1.00% per annum. Monthly principal and interest payments are deferred until the earliest of ten months after the end of our covered period or the date the SBA makes a decision on our loan forgiveness application. Unless the PPP Loan is forgiven, the Company will be required to make monthly payments of principal and interest of approximately $20,000 to the Lender. The PPP Note contains customary events of default relating to, among other things, payment defaults, providing materially false and misleading representations to the SBA or Lender, or breaching the terms of the PPP Loan documents. The occurrence of an event of default may result in the immediate repayment of all amounts outstanding, collection of all amounts owing from the Company, or filing suit and obtaining judgment. Under the terms of the CARES Act, PPP Loan recipients can apply for and be granted forgiveness for all or a portion of loan granted under the PPP. Such forgiveness will be determined, subject to limitations, based on the use of loan proceeds for payment of payroll costs and any payments of mortgage interest, rent, and utilities. However, no assurance is provided that forgiveness for any portion of the PPP Loan will be obtained. During November 2020, the Company applied for forgiveness of the PPP Loan. |
RISKS AND UNCERTAINTIES - COV_2
RISKS AND UNCERTAINTIES - COVID-19 | 3 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Sep. 30, 2020 | |
RISKS AND UNCERTAINTIES - COVID-19 | ||
RISKS AND UNCERTAINTIES - COVID-19 | 15. The Company sources its materials and services for its products and product candidates from facilities in areas impacted or which may be impacted by the outbreak of the coronavirus. This may impact the Company’s ability to obtain future inventory and impact the Company’s revenue stream as efforts to address this worldwide outbreak are undertaken. In addition, the Company has historically and principally funded its operations through debt borrowings, the issuance of convertible debt, and the issuance of units consisting of common stock and warrants which may also be impacted by economic conditions beyond the Company’s control. To the extent in which the coronavirus will impact the global economy and the Company is uncertain and cannot be reasonably measured. | 18. Risks and Uncertainties - COVID-19 The Company sources its materials and services for its products and product candidates from facilities in areas impacted or which may be impacted by the outbreak of the coronavirus. This may impact the Company's ability to obtain future inventory and impact the company's revenue stream as efforts to address this worldwide outbreak are undertaken. In addition, the Company has historically and principally funded its operations through debt borrowings, the issuance of convertible debt, and the issuance of units consisting of common stock and warrants which may also be impacted by economic conditions beyond the Company's control. To the extent in which the coronavirus will impact the global economy and the Company is uncertain and cannot be reasonably measured. |
SUBSEQUENT EVENTS_2
SUBSEQUENT EVENTS | 3 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Sep. 30, 2020 | |
SUBSEQUENT EVENTS | ||
SUBSEQUENT EVENTS | 16. The Company evaluated all events or transactions that occurred through the date which these consolidated financial statements were issued. On February 12, 2021, the Company announced that it had entered into a securities purchase agreement with certain institutional and accredited investors to raise approximately $6.9 million through the issuance of an aggregate of 43,125,004 shares of its common stock and warrants to purchase up to an aggregate of 32,343,753 shares of common stock, at a combined purchase price of $0.16 per share of common stock and associated warrant in a private placement (the “2021 Financing”). The Series K Warrants have an exercise price of $0.17 per share and are exercisable for a period of 5.5 years. The gross proceeds to Arch from the 2021 Financing, which is expected to close on February 17, 2021, are expected to be approximately $6.9 million before deducting financing costs of approximately $700,000. The Company engaged H.C. Wainwright & Co., LLC (the “Placement Agent) as exclusive placement agent for the 2021 Financing. Pursuant to the Company’s engagement letter with the Placement Agent, the Company also agreed to issue to the Placement Agent, or its designees, warrants to purchase up to 3,234,375 shares (the “Placement Agent 2 Warrants”). The Placement Agent 2 Warrants have substantially the same terms as the Series K Warrants, except that the exercise price of the Placement Agent Warrants is $0.20 per share. | 20. SUBSEQUENT EVENTS The Company evaluated all events or transactions that occurred through December 10, 2020, the date which these consolidated financial statements were available to be issued. On November 6, 2020, the Company issued unsecured 10% Series 2 Convertible Notes in the aggregate principal amount of $1,050,000. The Series 2 Convertible Notes provide, among other things, for (i) a term of approximately three (3) years; (ii) the Company’s ability to prepay the Series 2 Convertible Notes, in whole or in part, at any time; (iii) the automatic conversion of the Convertible Notes upon a Change of Control (all capitalized terms not otherwise defined to have the meaning ascribed to such terms in the Convertible Notes) into shares of the Company’s common stock, par value $0.001 per share (Common Stock), at a per share price of $0.25 (the “ Conversion Price ”); (iv) the ability of a holder of a Series 2 Convertible Note (a “ Holder ”) to convert the Series 2 Convertible Note and accrued interest, in whole or in part, into shares of Common Stock at the Conversion Price; (v) the Company’s ability to convert all Note Obligations outstanding upon a Qualified Equity Financing into shares of Common Stock at the Conversion Price; (vi) the Company’s ability to convert Series 2 Convertible Notes and accrued interest, in whole or in part, into shares of Common Stock at the Conversion Price in the event the volume weighted average price (“VWAP”) of the Common Stock equals or exceeds $0.32 per share for at least fifteen (15) consecutive Trading Days; (vii) the Company’s ability to convert all outstanding Note Obligations into shares of Common Stock at the Conversion Price (an “ In-Kind Note Repayment ”) in lieu of repaying the Note Obligations outstanding on the Maturity Date, November 30, 2023; provided, however, that in the case of an In-Kind Note Repayment, the outstanding Note Obligations will be calculated by increasing by thirty-five percent (35)% the aggregate sum of the unpaid Principal Amount held by each Holder and the accrued interest at a rate of ten percent (10)% per annum, subject to, with respect to any portion of the Principal Amount that is converted or prepaid before the twelve month anniversary of the Issuance Date, a minimum interest payment equal to ten percent (10)% of the amount that is converted or prepaid. In addition, on November 6, 2020, as consideration for investment in the Convertible Notes, the Company entered into that certain Amendment to Series J Warrant to Purchase Common Stock, a holder of a Series J Warrant exercisable for up to 3,375,000 shares of Common Stock, to extend the term of the Series J Warrant from one (1) year to thirty (30) months. |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Sep. 30, 2020 | |
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. We are a biotechnology company marketing or developing a number of products and are devoting substantially all of its efforts to developing technologies, raising capital, establishing customer and vendor relationships, and recruiting and retaining new employees. | 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. We are a biotechnology company marketing or developing a number of products and are 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. | 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) 2018-13, “Fair Value Measurement (Topic 820) Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement” was issued by the Financial Accounting Standards Board (FASB) in August 2018. The purpose of this amendment in this Update is to modify the disclosure requirements on fair value measurements in Topic 820. 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, 2019. The Company adopted ASU 2018-13 during our first quarter of fiscal year 2021. | 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 adopted ASU 2018-07 during our first quarter of fiscal year 2020, and the impact was considered immaterial on our consolidated financial statements. 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. The Company adopted ASU 2016-02 during our first quarter of fiscal year 2020, and the impact has been recorded within the consolidated financial statement using the modified retrospective method. |
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 December 31, 2020 and September 30, 2020. | 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, 2020 and September 30, 2019. |
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, goods-in-process and finished goods 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. | 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, goods-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. Inventory reserves are included in research and development expenses for the fiscal year ended September 30, 2020. |
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. | 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. |
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. | 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 three months ended December 31, 2020 and 2019 there has not been any 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, 2020 and 2019 there has not been any impairment of long-lived assets. |
Leases | Leases The Company determines if an arrangement is a lease at its inception. Operating lease right-of-use (“ROU”) assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As our lease does not provide an implicit interest rate, we use an incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Lease expense for lease payments is recognized on a straight-line basis over the lease term. As of December 31, 2020 and September 30, 2020, our ROU asset is included in prepaid expenses and other current assets and the lease obligations is included in accrued expenses and other current liabilities on our consolidated balance sheets. As of December 31, 2020, ROU asset of approximately $30,000 represents our right to use an underlying asset for the lease term and the lease liabilities of approximately $30,000 represents our obligation to make lease payments arising from the lease. | Leases The Company determines if an arrangement is a lease at its inception. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As our lease does not provide an implicit interest rate, we use an incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Lease expense for lease payments is recognized on a straight-line basis over the lease term. As of September 30, 2020, our ROU asset is included in prepaid expenses and other current assets and the lease obligations is included in accrued expenses and other current liabilities on our consolidated balance sheets. The impact upon adoption was considered immaterial to the consolidated financial statements. As of September 30, 2020, the right-of-use (“ROU”) asset of approximately $39,000 represents our right to use an underlying asset for the lease term and the lease liabilities of approximately $39,000 represents our obligation to make lease payments arising from the lease. |
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. | 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. |
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. | 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 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 be recognized in the consolidated financial statements based on their fair values. 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 was 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 expected life for awards uses the 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. | Accounting for Stock-Based Compensation The Company accounts for 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 be recognized in the consolidated financial statements based on their fair values. 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 was 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 December 31, 2020 and September 30, 2020, the carrying amounts of cash, accounts payables and accrued expenses and other liabilities approximate fair value because of their short-term nature. The carrying amounts for the PPP Loan and the Convertible Notes approximate fair value. | 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, 2020 and September 30, 2019, the carrying amounts of cash, accounts payable, accrued expenses and other liabilities, approximate fair value because of their short-term nature. The carrying amounts for the PPP Loan and the Promissory convertible debt approximate fair value. |
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. | 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. |
Financial Statement Reclassification | Financial Statement Reclassification Certain balances in the prior year consolidated financial statements have been reclassified for comparison purposes to conform to the presentation in the current period consolidated financial statements. | |
Subsequent Events | Subsequent Events The Company evaluated all events or transactions that occurred commencing from January 25, 2021 and ending on February 11, 2021 the date which these unaudited interim consolidated financial statements were issued. The Company disclosed material subsequent events, if any, in Note 16. | Subsequent Events The Company evaluated all events or transactions that occurred commencing from October 1, 2020 and ending on December 10, 2020 the date which these consolidated financial statements were issued. The Company disclosed material subsequent events in Note 20. |
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 December 31, 2020, 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. Finally, some of our product candidates or the materials contained therein (such as the Active Pharmaceutical Ingredients (“APIs”) for our AC5(R) product line), are manufactured from facilities in areas impacted by the outbreak of the coronavirus, which could result in shortages due to ongoing efforts to address the outbreak. 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 its subsidiary 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. The continued spread of coronavirus and uncertain market conditions may also limit the Company’s ability to access capital. If the Company is unable to obtain adequate capital, the Company may be required to reduce the scope, delay, or eliminate some or all of its planned activities. These conditions, in the aggregate, raise substantial doubt as to the Company’s ability to continue as a going concern. 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. | 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, 2020, 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. Finally, some of our product candidates or the materials contained therein (such as the Active Pharmaceutical Ingredients (“APIs”) for our AC5 (R) product line), are manufactured from facilities in areas impacted by the outbreak of the coronavirus, which could result in shortages due to ongoing efforts to address the outbreak. 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 its subsidiary 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. The continued spread of coronavirus and uncertain market conditions may also limit the Company’s ability to access capital. If the Company is unable to obtain adequate capital, the Company may be required to reduce the scope, delay, or eliminate some or all of its planned commercial activities. These conditions, in the aggregate, raise substantial doubt as to the Company’s ability to continue as a going concern. 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 (Table_2
PROPERTY AND EQUIPMENT (Tables) | 3 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Sep. 30, 2020 | |
PROPERTY AND EQUIPMENT | ||
Schedule of property and equipment | At December 31, 2020 and September 30, 2020, property and equipment consisted of: Estimated Useful December 31, September 30, Life 2020 2020 Furniture and fixtures 5 years $ 9,357 $ 9,357 Leasehold improvements Life of Lease 8,983 8,983 Computer equipment 3 years 11,141 11,141 Lab equipment 5 years 1,000 1,000 30,481 30,481 Less – accumulated depreciation 26,301 25,929 Property and equipment, net $ 4,180 $ 4,552 | At September 30, 2020 and September 30, 2019, property and equipment consisted of: Estimated September 30, September 30, Useful Life 2020 2019 Furniture and fixtures 5 years $ 9,357 $ 9,357 Leasehold improvements Life of Lease $ 8,983 $ 8,983 Computer equipment 3 years $ 11,141 $ 8,686 Lab equipment 5 years $ 1,000 $ 1,000 30,481 28,026 Less – accumulated depreciation 25,929 19,003 Property and equipment, net $ 4,552 $ 9,023 |
INVENTORIES (Tables)_2
INVENTORIES (Tables) | 3 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Sep. 30, 2020 | |
INVENTORIES | ||
Schedule of inventories | December 31, September 30, 2020 2020 Finished Goods $ 300,009 $ — Goods-in-process 715,731 967,993 Total $ 1,015,740 $ 967,993 | September 30, September 30, 2020 2019 Goods-in-process $ 1,028,378 $ 328,500 Raw Material — 18,147 Inventory Reserves (60,385) — Total $ 967,993 $ 346,647 |
STOCK-BASED COMPENSATION (Tab_2
STOCK-BASED COMPENSATION (Tables) - 2013 Stock Incentive Plan [Member] | 3 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Sep. 30, 2020 | |
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 three months ended December 31, 2020 follows: Weighted Weighted Average Option Average Remaining Aggregate Shares Exercise Contractual Intrinsic Outstanding Price Term (years) Value Outstanding at September 30, 2020 18,248,346 $ 0.36 2.59 $ 79,330 Awarded 975,000 $ 0.17 — — Forfeited/Cancelled (148,191) $ 0.44 — — Outstanding at December 31, 2020 19,075,155 $ 0.35 2.61 $ 119,733 Vested at December 31, 2020 16,587,085 $ 0.37 2.64 $ 70,693 Vested and expected to vest at December 31, 2020 19,075,155 $ 0.35 2.61 $ 119,733 | Stock compensation activity under the 2013 Plan for the year ended September 30, 2020 follows: Weighted Weighted Average Option Average Remaining Aggregate Shares Exercise Contractual Intrinsic Outstanding Price Term (years) Value Outstanding at September 30, 2019 15,807,911 $ 0.40 3.14 $ 142,810 Awarded 3,375,000 $ 0.22 — — Forfeited/Cancelled (934,565) $ 0.44 — — Outstanding at September 30, 2020 18,248,346 $ 0.36 2.59 $ 79,330 Vested at September 30, 2020 16,077,006 $ 0.38 2.78 $ 69,305 Vested and expected to vest at September 30, 2020 18,248,346 $ 0.36 2.59 $ 79,330 |
Schedule of restricted stock activity | Restricted stock activity in shares under the 2013 Plan for the three months ended December 31, 2020 and 2019 follows: 2020 2019 Non Vested at September 30, 2020 and 2019 — 965,000 Awarded 50,000 — Vested — — Forfeited — — Non Vested at December 31, 2020 and 2019 50,000 965,000 | Restricted stock activity in shares under the 2013 Plan for the years ended September 30, 2020 and 2019 follows: 2020 2019 Non Vested at September 30, 2019 and 2018 965,000 2,815,000 Awarded — — Vested (965,000) (1,850,000) Forfeited — — Non Vested at September 30, 2020 and 2019 — 965,000 |
Schedule of weighted average restricted stock award date fair value information | The weighted average restricted stock award date fair value information for the three months ended December 31, 2020 and 2019 follows: 2020 2019 Non Vested at September 30, 2020 and 2019 $ — $ 0.57 Awarded 0.18 — Vested — — Forfeited — — Non Vested at December 31, 2020 and 2019 $ 0.18 $ 0.57 | The weighted average restricted stock award date fair value information for the years ended September 30, 2020 and 2019 follows: 2020 2019 Non Vested at September 30, 2019 and 2018 $ 0.43 $ 0.57 Awarded — — Vested (0.43) (0.64) Forfeited — — Non Vested at September 30, 2020 and 2019 $ — $ 0.43 |
2017 REGISTERED DIRECT OFFERI_7
2017 REGISTERED DIRECT OFFERING (Tables) - REGISTERED DIRECT OFFERING 2017 [Member] | 3 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Sep. 30, 2020 | |
Schedule of fair value measurements | Fair Value Measurements Using Significant Unobservable Inputs December 31, September 30, (Level 3) 2020 2020 Beginning balance at September 30, 2020 and 2019 $ 1,000,000 $ 1,000,000 Issuances — — Adjustments to estimated fair value — — Ending balance at December 31, 2020 and September 30, 2020 $ 1,000,000 $ 1,000,000 | Fair Value Measurements Using Significant Unobservable Inputs September 30, September 30, (Level 3) 2020 2019 Beginning balance at beginning of year $ 1,000,000 $ 1,274,404 Issuances — — Adjustments to estimated fair value — (274,404) Ending balance at end of year $ $ |
Schedule of assumptions used to value derivative liabilities | The derivative liabilities were valued as of December 31, 2020 and September 30, 2020 using the Black Scholes Model with the following assumptions: December 31, September 30, 2020 2020 Closing price per share of common stock $ 0.15 $ 0.17 Exercise price per share $ 0.75 $ 0.75 Expected volatility 82.10 % 84.17 % Risk-free interest rate 0.10 % 0.13 % Dividend yield — — Remaining expected term of underlying securities (years) 1.35 | The derivative liabilities were valued as of September 30, 2020 and September 30, 2019 using the Black Scholes Model with the following assumptions: September 30, September 30, 2020 2019 Closing price per share of common stock $ 0.17 $ 0.24 Exercise price per share $ 0.75 $ 0.75 Expected volatility 84.17 % 78.15 % Risk-free interest rate 0.13 % 1.60 % Dividend yield — — Remaining expected term of underlying securities (years) 1.35 2.37 |
2018 REGISTERED DIRECT OFFERI_7
2018 REGISTERED DIRECT OFFERING (Tables) - Registered Direct Offering 2018 [Member] | 3 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Sep. 30, 2020 | |
Schedule of fair value measurements | Fair Value Measurements Using Significant Unobservable Inputs December 31, September 30, (Level 3) 2020 2020 Beginning balance at September 30, 2020 and 2019 $ 748,275 $ 748,275 Issuances — — Adjustments to estimated fair value — — Ending balance at December 31, 2020 and September 30, 2020 $ 748,275 $ 748,275 | Fair Value Measurements Using Significant Unobservable Inputs September 30, September 30, (Level 3) 2020 2019 Beginning balance at beginning of year $ 748,275 $ 1,917,348 Issuances — — Adjustments to estimated fair value — (1,169,073) Ending balance at end of year $ 748,275 $ 748,275 |
Schedule of assumptions used to value derivative liabilities | The derivative liabilities were valued as of December 31, 2020 and September 30, 2020 using the Black Scholes Model with the following assumptions: December 31, September 30, 2020 2020 Closing price per share of common stock $ 0.15 $ 0.17 Exercise price per share $ 0.70 $ 0.70 Expected volatility 83.31 % 83.31 % Risk-free interest rate 0.15 % 0.15 % Dividend yield — — Remaining expected term of underlying securities (years) 2.71 | The derivative liabilities were valued as of September 30, 2020 and September 30, 2019 using the Black Scholes Model with the following assumptions: September 30, September 30, 2020 2019 Closing price per share of common stock $ 0.17 $ 0.24 Exercise price per share $ 0.70 $ 0.70 Expected volatility 83.31 % 78.72 % Risk-free interest rate 0.15 % 1.56 % Dividend yield — — Remaining expected term of underlying securities (years) 2.71 3.73 |
2019 REGISTERED DIRECT OFFERI_7
2019 REGISTERED DIRECT OFFERING (Tables) - Registered Direct Offering 2019 [Member] | 3 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Sep. 30, 2020 | |
Schedule of fair value measurements | Fair Value Measurements Using Significant Unobservable Inputs December 31, September 30, (Level 3) 2020 2020 Beginning balance at September 30, 2020 and 2019 $ 568,144 $ 1,247,415 Issuances — — Adjustments to estimated fair value (108,944) (679,271) Ending balance at December 31, 2020 and September 30, 2020 $ 459,200 $ 568,144 | Fair Value Measurements Using Significant Unobservable Inputs September 30, September 30, (Level 3) 2020 2019 Beginning balance at beginning of year $ 1,247,415 $ — Issuances — 1,628,113 Adjustments to estimated fair value (679,271) (380,698) Ending balance at end of year $ 568,144 $ 1,247,415 |
Schedule of assumptions used to value derivative liabilities | The derivative liabilities were valued as of December 31, 2020 and September 30, 2020 using the Black Scholes Model with the following assumptions: December 31, September 30, 2020 2020 Closing price per share of common stock $ 0.15 $ 0.17 Exercise price per share $ 0.40 $ 0.40 Expected volatility 82.41 % 82.24 % Risk-free interest rate 0.27 % 0.22 % Dividend yield — — Remaining expected term of underlying securities (years) 3.60 | The derivative liabilities were valued as of September 30, 2020, September 30, 2019 and May 14, 2019 using the Black Scholes Model with the following assumptions: September 30, September 30, May 14, 2020 2019 2019 Closing price per share of common stock $ 0.17 $ 0.24 $ 0.283 Exercise price per share $ 0.40 $ 0.40 $ 0.40 Expected volatility 82.24 % 92.11 % 93.44 % Risk-free interest rate 0.22 % 1.55 % 2.20 % Dividend yield — — — Remaining expected term of underlying securities (years) 3.60 4.61 5.00 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | Dec. 31, 2020 | Sep. 30, 2020 | Sep. 30, 2019 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Cash equivalents | $ 0 | $ 0 | $ 0 |
Right of use assets | 30,000 | 39,000 | |
Operating lease liabilities | $ 30,000 | $ 39,000 | |
Operating lease, liability, statement of financial position | us:gaap_OperatingLeaseLiability | us:gaap_OperatingLeaseLiability |
PROPERTY AND EQUIPMENT (Detai_2
PROPERTY AND EQUIPMENT (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | |
Property and equipment, gross, Total | $ 30,481 | $ 30,481 | $ 28,026 |
Less - accumulated depreciation | 26,301 | 25,929 | 19,003 |
Property and equipment, net | $ 4,180 | $ 4,552 | 9,023 |
Furniture and fixtures | |||
Property, and equipment, Estimated Useful Life | 5 years | 5 years | |
Property and equipment, gross, Total | $ 9,357 | $ 9,357 | 9,357 |
Leasehold improvements | |||
Property and equipment, gross, Total | $ 8,983 | $ 8,983 | 8,983 |
Computer equipment | |||
Property, and equipment, Estimated Useful Life | 3 years | 3 years | |
Property and equipment, gross, Total | $ 11,141 | $ 11,141 | 8,686 |
Lab equipment | |||
Property, and equipment, Estimated Useful Life | 5 years | 5 years | |
Property and equipment, gross, Total | $ 1,000 | $ 1,000 | $ 1,000 |
PROPERTY AND EQUIPMENT - Addi_2
PROPERTY AND EQUIPMENT - Additional Information (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
PROPERTY AND EQUIPMENT | ||||
Depreciation expense | $ 372 | $ 1,936 | $ 6,926 | $ 8,238 |
INVENTORIES (Details)_2
INVENTORIES (Details) - USD ($) | 12 Months Ended | ||
Sep. 30, 2020 | Dec. 31, 2020 | Sep. 30, 2019 | |
INVENTORIES | |||
Finished Goods | $ 300,009 | ||
Goods-in-process | $ 967,993 | 715,731 | |
Raw Material | $ 18,147 | ||
Inventory Reserves | (60,385) | ||
Total | 967,993 | $ 1,015,740 | $ 346,647 |
Reduction in inventory reserves | $ 60,385 |
STOCK-BASED COMPENSATION - St_2
STOCK-BASED COMPENSATION - Stock compensation activity (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | |
Option Shares Outstanding | |||
Outstanding at September 30, 2020 | 18,248,346 | 15,807,911 | |
Awarded | 975,000 | 3,375,000 | |
Forfeited/Cancelled | (148,191) | (934,565) | |
Outstanding at December 30, 2020 | 19,075,155 | 18,248,346 | 15,807,911 |
Vested at December 31, 2020 | 16,587,085 | 16,077,006 | |
Vested and expected to vest at December 31, 2020 | 19,075,155 | 18,248,346 | |
Weighted Average Exercise Price | |||
Outstanding at September 30, 2020 | $ 0.36 | $ 0.40 | |
Awarded | 0.17 | 0.22 | |
Forfeited/Cancelled | 0.44 | 0.44 | |
Outstanding at December 31, 2020 | 0.35 | 0.36 | $ 0.40 |
Vested at December 31, 2020 | 0.37 | 0.38 | |
Vested and expected to vest at December 31, 2020 | $ 0.35 | $ 0.36 | |
Weighted Average Remaining Contractual Term (years) | |||
Outstanding at September 30, 2020 | 2 years 7 months 2 days | 3 years 1 month 21 days | |
Awarded | 0 years | 0 years | |
Forfeited/Cancelled | 0 years | 0 years | |
Outstanding at December 31, 2020 | 2 years 7 months 10 days | 2 years 7 months 2 days | |
Vested at December 31, 2020 | 2 years 7 months 21 days | 2 years 9 months 11 days | |
Vested and expected to vest at December 31, 2020 | 2 years 7 months 10 days | 2 years 7 months 2 days | |
Aggregate Intrinsic Value | |||
Outstanding at September 30, 2020 | $ 79,330 | $ 142,810 | |
Awarded | 0 | 0 | |
Forfeited/Cancelled | 0 | 0 | |
Outstanding at December 31, 2020 | 119,733 | 79,330 | $ 142,810 |
Vested at December 31, 2020 | 70,693 | 69,305 | |
Vested and expected to vest at December 31, 2020 | $ 119,733 | $ 79,330 |
STOCK-BASED COMPENSATION - Re_2
STOCK-BASED COMPENSATION - Restricted stock activity (Details) - shares | May 03, 2016 | Dec. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 |
Restricted Stock [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Awarded | 2,000,000 | ||||
2013 Incentive Plan [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Non Vested, Beginning Balance | 0 | 965,000 | 965,000 | 2,815,000 | |
Awarded | 50,000 | 0 | 0 | 0 | |
Vested | 0 | 0 | (965,000) | (1,850,000) | |
Forfeited | 0 | 0 | 0 | 0 | |
Non Vested, Ending Balance | 50,000 | 965,000 | 0 | 965,000 |
STOCK-BASED COMPENSATION - We_2
STOCK-BASED COMPENSATION - Weighted average restricted stock (Details) - $ / shares | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Restricted Stock [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Non Vested, Beginning Balance | $ 0 | $ 0 | $ 0.39 | |
Awarded | 0 | |||
Vested | (0.39) | |||
Forfeited | 0 | |||
Non Vested, Ending Balance | 0 | |||
2013 Incentive Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Non Vested, Beginning Balance | $ 0 | 0.43 | 0.43 | 0.57 |
Awarded | 0 | 0 | ||
Vested | (0.43) | (0.64) | ||
Forfeited | 0 | 0 | ||
Non Vested, Ending Balance | 0 | 0.43 | ||
2013 Incentive Plan [Member] | Restricted Stock [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Non Vested, Beginning Balance | 0 | 0.57 | 0.57 | |
Awarded | 0.18 | 0 | ||
Vested | 0 | 0 | ||
Forfeited | 0 | 0 | ||
Non Vested, Ending Balance | $ 0.18 | $ 0.57 | $ 0 | $ 0.57 |
STOCK-BASED COMPENSATION - Ad_2
STOCK-BASED COMPENSATION - Additional Information (Details) - USD ($) | Oct. 14, 2020 | Sep. 05, 2018 | Sep. 05, 2018 | Jul. 19, 2018 | Feb. 03, 2017 | Jun. 18, 2013 | Jul. 19, 2018 | Jun. 18, 2013 | Dec. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Oct. 01, 2020 | Jul. 01, 2020 | Jun. 30, 2020 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||
Share-based compensation arrangement by share-based payment award, fair value assumptions, expected volatility rate, minimum | 79.44% | 79.44% | |||||||||||||
Share-based compensation arrangement by share-based payment award, fair value assumptions, expected volatility rate, maximum | 119.44% | 119.44% | |||||||||||||
Share-based compensation arrangement by share-based payment award, fair value assumptions, risk free interest rate, minimum | 0.13% | 0.13% | |||||||||||||
Share-based compensation arrangement by share-based payment award, fair value assumptions, risk free interest rate, maximum | 2.85% | 3.23% | |||||||||||||
Share based compensation arrangement by share based payment award fair value assumptions expected forfeiture rate | 0.00% | 0.00% | |||||||||||||
Share-based compensation arrangement by share-based payment award, fair value assumptions, expected dividend rate | 0.00% | 0.00% | |||||||||||||
Share-based compensation arrangement by share-based payment award, fair value assumptions, expected term | 5 years 7 months 6 days | 5 years 7 months 6 days | |||||||||||||
Common Stock, Shares Authorized | 800,000,000 | 800,000,000 | 300,000,000 | 800,000,000 | 300,000,000 | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 975,000 | 3,375,000 | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares | 16,587,085 | 16,077,006 | |||||||||||||
Proceeds from Stock Options Exercised | $ 0 | $ 32,400 | |||||||||||||
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 | $ 0 | $ 40,000 | $ 220,000 | 397,000 | |||||||||||
Research and Development Expense [Member] | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||
Allocated share-based compensation expense | 26,000 | 76,000 | 288,000 | 483,000 | |||||||||||
General and Administrative Expense [Member] | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||
Allocated share-based compensation expense | $ 60,000 | 83,000 | 390,000 | 347,000 | |||||||||||
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 | 0 | |||||||||||||
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 | 19,179,212 | 19,179,212 | |||||||||||||
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 | 8,692,500 | 7,717,500 | |||||||||||||
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 | 100,000 | |||||||||||||
Employees, Directors And Consultants [Member] | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||
Allocated share-based compensation expense | $ 86,000 | $ 159,000 | $ 678,000 | $ 830,000 | |||||||||||
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 4 months 28 days | 1 year 9 months 18 days | |||||||||||||
Common Stock, Shares Authorized | 28,114,256 | 31,114,256 | |||||||||||||
Share-based compensation arrangement by share-based payment award, number of additional shares authorized | 3,000,000 | 3,000,000 | |||||||||||||
Stock Issued During Period, Shares, New Issues | 477,269 | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 0 | 0 | 0 | 87,567 | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Shares Issued in Period | 1,437,433 | ||||||||||||||
Proceeds from Stock Options Exercised | $ 32,400 | ||||||||||||||
2013 Stock Incentive Plan | 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 period | 90 days | ||||||||||||||
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, award vesting period | 90 days | ||||||||||||||
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% | 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, award vesting period | 365 days | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares | 50,000 | 50,000 | |||||||||||||
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 | 6,873,199 | 4,750,008 | |||||||||||||
Employee service share-based compensation, nonvested awards, compensation cost not yet recognized, total | $ 268,000 | ||||||||||||||
Plan 2013 [Member] | 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 period | 90 days | ||||||||||||||
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 | 0 | 2,685,000 | |||||||||||||
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 | 975,000 | 690,000 | |||||||||||||
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, Granted | 50,000 | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Other | 50,000 | 220,000 | 220,000 | ||||||||||||
Plan 2013 [Member] | Employees, Directors And Consultants [Member] | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||
Allocated share-based compensation expense | $ 265,000 | ||||||||||||||
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 | 745,000 | 1,750,000 | 745,000 |
2015 PRIVATE PLACEMENT FINANC_4
2015 PRIVATE PLACEMENT FINANCING - Additional Information (Details) | Nov. 06, 2020shares | Jun. 22, 2020USD ($)shares | Jun. 04, 2020$ / sharesshares | Jun. 03, 2020USD ($)$ / shares | Jul. 02, 2015USD ($)shares | Jul. 02, 2015USD ($)shares | Jun. 30, 2015USD ($)$ / sharesshares | Jun. 30, 2015USD ($)$ / sharesshares | Dec. 31, 2020USD ($) | Sep. 30, 2020USD ($)shares | Sep. 30, 2019USD ($)$ / sharesshares | Nov. 30, 2020 | Jun. 21, 2020$ / shares | Jun. 02, 2020$ / shares | Dec. 31, 2017$ / shares |
Private Placement [Line Items] | |||||||||||||||
Proceeds from exercise of warrants | $ | $ 932,728 | $ 0 | |||||||||||||
2015 Investors [Member] | |||||||||||||||
Private Placement [Line Items] | |||||||||||||||
Stock Issued During Period, Shares, New Issues | 454,387 | 454,387 | 13,936,367 | 454,387 | |||||||||||
Proceeds from Issuance of Common Stock | $ | $ 100,000 | $ 100,000 | $ 3,066,000 | ||||||||||||
Series D Warrants [Member] | |||||||||||||||
Private Placement [Line Items] | |||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 0.25 | ||||||||||||||
Percentage of Shares Purchased by Investors | 100.00% | 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 | $ / shares | $ 0.22 | $ 0.22 | |||||||||||||
Proceeds from Issuance of Common Stock | $ | $ 3,200,000 | ||||||||||||||
2015 Private Placement [Member] | Keyes Sulat Agreement | |||||||||||||||
Private Placement [Line Items] | |||||||||||||||
Common Stock Issuance Upon Exercise Of Warrants | 454,546 | ||||||||||||||
2015 Private Placement [Member] | Series D Warrants [Member] | |||||||||||||||
Private Placement [Line Items] | |||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 0.18 | $ 0.25 | $ 0.25 | $ 0 | $ 0.25 | ||||||||||
Proceeds from exercise of warrants | $ | $ 850,000 | $ 932,728 | |||||||||||||
Percentage of increase in ownership interest as a result of reduction in exercise price of warrant | 4.90% | ||||||||||||||
Common Stock Issuance Upon Exercise Of Warrants | 4,727,273 | 5,181,819 | |||||||||||||
Non cash interest | $ | $ 220,000 | $ 220,000 | |||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 0 | ||||||||||||||
Number of warrants expired | 3,792,570 | ||||||||||||||
2015 Private Placement [Member] | Series J warrant | |||||||||||||||
Private Placement [Line Items] | |||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 0.25 | ||||||||||||||
Common Stock Issuance Upon Exercise Of Warrants | 3,375,000 | 3,545,454 | |||||||||||||
Exercise term of warrants | 30 months | 1 year | 1 year | ||||||||||||
2015 Private Placement [Member] | Series J warrant | Keyes Sulat Agreement | |||||||||||||||
Private Placement [Line Items] | |||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 0.25 | ||||||||||||||
Proceeds from exercise of warrants | $ | $ 82,000 | ||||||||||||||
Common Stock Issuance Upon Exercise Of Warrants | 340,910 | ||||||||||||||
Exercise term of warrants | 1 year | ||||||||||||||
Measurement Input, Price Volatility [Member] | |||||||||||||||
Private Placement [Line Items] | |||||||||||||||
Derivative Liability, Measurement Input | 88.15 | 88.15 | |||||||||||||
Measurement Input, Risk Free Interest Rate [Member] | |||||||||||||||
Private Placement [Line Items] | |||||||||||||||
Derivative Liability, Measurement Input | 0.16 | 0.16 | |||||||||||||
Measurement Input, Expected Forfeiture Rate [Member] | |||||||||||||||
Private Placement [Line Items] | |||||||||||||||
Derivative Liability, Measurement Input | 0 | 0 | |||||||||||||
Measurement Input, Expected Dividend Rate [Member] | |||||||||||||||
Private Placement [Line Items] | |||||||||||||||
Derivative Liability, Measurement Input | 0 | 0 | |||||||||||||
Measurement Input, Expected Term [Member] | |||||||||||||||
Private Placement [Line Items] | |||||||||||||||
Derivative Liability, Measurement Input | 1.08 | 1.08 |
2016 PRIVATE PLACEMENT FINANC_4
2016 PRIVATE PLACEMENT FINANCING - Additional Information (Details) - USD ($) | May 26, 2016 | May 26, 2016 | May 31, 2016 | Dec. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2020 |
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% | 75.00% | ||||
Series E Warrant [Member] | ||||||
Private Placement [Line Items] | ||||||
Stock Issued During Period, Shares, New Issues | 7,063,748 | 0 | 0 | |||
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 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 61st day after delivery of such notice. | (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 61st day after delivery of such notice. | ||||
Common Stock, Capital Shares Reserved for Future Issuance | 4,214,582 | 4,214,582 | ||||
Private Placement 2016 [Member] | ||||||
Private Placement [Line Items] | ||||||
Stock Issued During Period, Shares, New Issues | 9,418,334 | 9,418,334 | ||||
Share Price | $ 0.36 | $ 0.36 | ||||
Proceeds from Issuance of Common Stock | $ 3,390,600 | $ 3,390,600 | ||||
Private Placement 2016 [Member] | Maxim Group LLC [Member] | ||||||
Private Placement [Line Items] | ||||||
Underwriting Fees, Percentage | 8.20% | 8.20% | ||||
Proceeds from Issuance of Common Stock | $ 2,084,000 | $ 2,084,000 | ||||
Payments of Stock Issuance Costs | $ 171,000 | $ 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 | $ 0.438 | $ 0.438 | ||
Payments of Stock Issuance Costs | $ 281,000 | |||||
Stock Issued During Period, Value, New Issues | $ 3,400,000 |
2017 REGISTERED DIRECT OFFERI_8
2017 REGISTERED DIRECT OFFERING - Fair value of derivative (Details) - Fair Value, Inputs, Level 3 [Member] - REGISTERED DIRECT OFFERING 2017 [Member] - USD ($) | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | |
Beginning balance at beginning of year | $ 1,000,000 | $ 1,000,000 | $ 1,274,404 |
Issuances | 0 | 0 | 0 |
Adjustments to estimated fair value | 0 | 0 | (274,404) |
Ending balance at end of year | $ 1,000,000 | $ 1,000,000 | $ 1,000,000 |
2017 REGISTERED DIRECT OFFERI_9
2017 REGISTERED DIRECT OFFERING - Derivative liabilities using Black Scholes Model (Details) | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2020$ / shares | Sep. 30, 2020$ / shares | Sep. 30, 2019$ / shares | Jul. 01, 2020$ / shares | |
Closing price per share of common stock | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 |
Measurement Input, Price Volatility [Member] | ||||
Derivative Liability, Measurement Input | 88.15 | 88.15 | ||
Measurement Input, Risk Free Interest Rate [Member] | ||||
Derivative Liability, Measurement Input | 0.16 | 0.16 | ||
Measurement Input, Expected Dividend Rate [Member] | ||||
Derivative Liability, Measurement Input | 0 | 0 | ||
Measurement Input, Expected Term [Member] | ||||
Derivative Liability, Measurement Input | 1.08 | 1.08 | ||
Derivative Financial Instruments, Liabilities [Member] | REGISTERED DIRECT OFFERING 2017 [Member] | ||||
Closing price per share of common stock | $ 0.150 | $ 0.17 | $ 0.24 | |
Derivative Financial Instruments, Liabilities [Member] | REGISTERED DIRECT OFFERING 2017 [Member] | Measurement Input, Exercise Price [Member] | ||||
Derivative Liability, Measurement Input | 0.75 | 0.75 | 0.75 | |
Derivative Financial Instruments, Liabilities [Member] | REGISTERED DIRECT OFFERING 2017 [Member] | Measurement Input, Price Volatility [Member] | ||||
Derivative Liability, Measurement Input | 82.10 | 84.17 | 78.15 | |
Derivative Financial Instruments, Liabilities [Member] | REGISTERED DIRECT OFFERING 2017 [Member] | Measurement Input, Risk Free Interest Rate [Member] | ||||
Derivative Liability, Measurement Input | 0.10 | 0.13 | 1.60 | |
Derivative Financial Instruments, Liabilities [Member] | REGISTERED DIRECT OFFERING 2017 [Member] | Measurement Input, Expected Dividend Rate [Member] | ||||
Derivative Liability, Measurement Input | 0 | 0 | 0 | |
Derivative Financial Instruments, Liabilities [Member] | REGISTERED DIRECT OFFERING 2017 [Member] | Measurement Input, Expected Term [Member] | ||||
Remaining expected term of underlying securities (years) | 1 year 1 month 2 days | 1 year 4 months 6 days | 2 years 4 months 13 days |
2017 REGISTERED DIRECT OFFER_10
2017 REGISTERED DIRECT OFFERING - Additional Information (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||
Feb. 24, 2017 | Feb. 20, 2017 | Dec. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | May 14, 2019 | Jul. 02, 2018 | Sep. 30, 2016 | |
Derivative Liability | $ 2,996,110 | $ 1,628,113 | $ 2,397,454 | ||||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Period Increase (Decrease) | $ 108,944 | $ (40,187) | $ 679,271 | $ 1,824,175 | |||||
Common Stock | |||||||||
Stock Issued During Period, Shares, New Issues | 10,166,664 | ||||||||
Series F Warrant [Member] | |||||||||
Stock Issued During Period, Shares, New Issues | 0 | 0 | |||||||
Stock Issued During Period, Value, New Issues | $ 0 | 0 | |||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 5,591,664 | 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 | ||||||||
Percentage of warrant per unit | 55.00% | ||||||||
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) | $ 0 | $ 274,404 | $ 0 | $ (274,404) | |||||
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_8
2018 REGISTERED DIRECT OFFERING - Fair value of derivative (Details) - Fair Value, Inputs, Level 3 [Member] - Registered Direct Offering 2018 [Member] - USD ($) | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | |
Beginning balance at beginning of year | $ 748,275 | $ 748,275 | $ 1,917,348 |
Issuances | 0 | 0 | 0 |
Adjustments to estimated fair value | 0 | 0 | (1,169,073) |
Ending balance at end of year | $ 748,275 | $ 748,275 | $ 748,275 |
2018 REGISTERED DIRECT OFFERI_9
2018 REGISTERED DIRECT OFFERING - Derivative liabilities using Black Scholes Model (Details) | 3 Months Ended | 12 Months Ended | ||||
Dec. 31, 2020$ / shares | Sep. 30, 2020 | Sep. 30, 2019$ / sharesUSD ($) | Sep. 30, 2020$ / shares | Sep. 30, 2020USD ($) | Jul. 01, 2020$ / shares | |
Closing price per share of common stock | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||
Measurement Input, Price Volatility [Member] | ||||||
Derivative Liability, Measurement Input | 88.15 | 88.15 | ||||
Measurement Input, Risk Free Interest Rate [Member] | ||||||
Derivative Liability, Measurement Input | 0.16 | 0.16 | ||||
Measurement Input, Expected Dividend Rate [Member] | ||||||
Derivative Liability, Measurement Input | 0 | 0 | ||||
Measurement Input, Expected Term [Member] | ||||||
Derivative Liability, Measurement Input | 1.08 | 1.08 | ||||
Registered Direct Offering 2018 [Member] | Derivative Financial Instruments, Liabilities [Member] | ||||||
Closing price per share of common stock | $ 0.15 | $ 0.24 | $ 0.17 | |||
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 | 0.70 | ||
Registered Direct Offering 2018 [Member] | Derivative Financial Instruments, Liabilities [Member] | Measurement Input, Price Volatility [Member] | ||||||
Derivative Liability, Measurement Input | 83.31 | 83.31 | 78.72 | |||
Registered Direct Offering 2018 [Member] | Derivative Financial Instruments, Liabilities [Member] | Measurement Input, Risk Free Interest Rate [Member] | ||||||
Derivative Liability, Measurement Input | 0.15 | 0.15 | 1.56 | |||
Registered Direct Offering 2018 [Member] | Derivative Financial Instruments, Liabilities [Member] | Measurement Input, Expected Dividend Rate [Member] | ||||||
Derivative Liability, Measurement Input | 0 | 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) | 2 years 5 months 16 days | 2 years 8 months 16 days | 3 years 8 months 23 days |
2018 REGISTERED DIRECT OFFER_10
2018 REGISTERED DIRECT OFFERING - Additional Information (Details) - USD ($) | Jul. 02, 2018 | Jun. 29, 2018 | Jun. 28, 2018 | Jun. 29, 2018 | Jun. 28, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | May 14, 2019 | Feb. 24, 2017 |
Stock Issued During Period, Value, Warrants Exercised | $ 932,728 | ||||||||||
Derivative Liability | $ 2,397,454 | $ 1,628,113 | $ 2,996,110 | ||||||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Period Increase (Decrease) | $ 108,944 | $ (40,187) | $ 679,271 | $ 1,824,175 | |||||||
Class Of Series G Warrant [Member] | |||||||||||
Stock Issued During Period, Shares, New Issues | 0 | 0 | 0 | 0 | |||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 6,802,500 | 6,802,500 | |||||||||
Registered Direct Offering 2018 [Member] | |||||||||||
Stock Issued During Period, Shares, New Issues | 9,070,000 | 9,070,000 | 9,070,000 | ||||||||
Shares Issued, Price Per Share | $ 0.50 | $ 0.50 | |||||||||
Number Of Warrants Per Unit | 0.75 | ||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.70 | $ 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 | $ 4,500,000 | ||||||||
Payments of Stock Issuance Costs | $ 74,000 | 74,000 | |||||||||
Cash Price Per Each Common Stock Underlying Warrants | $ 0.11 | $ 0.11 | $ 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) | $ 0 | $ 0 | $ 0 | $ 1,169,073 | |||||||
Registered Direct Offering 2018 [Member] | Class Of Series G Warrant [Member] | |||||||||||
Percentage Of Class Of Warrant Or Right Held | 20.00% | 20.00% |
2019 REGISTERED DIRECT OFFERI_8
2019 REGISTERED DIRECT OFFERING - Fair value of derivative (Details) - Fair Value, Inputs, Level 3 [Member] - Registered Direct Offering 2019 [Member] - USD ($) | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | |
Beginning balance at beginning of year | $ 568,144 | $ 1,247,415 | $ 0 |
Issuances | 0 | 0 | 1,628,113 |
Adjustments to estimated fair value | (108,944) | (679,271) | (380,698) |
Ending balance at end of year | $ 459,200 | $ 568,144 | $ 1,247,415 |
2019 REGISTERED DIRECT OFFERI_9
2019 REGISTERED DIRECT OFFERING - Derivative liabilities using Black Scholes Model (Details) | May 14, 2019$ / shares | Dec. 31, 2020$ / shares | Sep. 30, 2020$ / shares | Sep. 30, 2019$ / shares | Jul. 01, 2020$ / shares |
Closing price per share of common stock | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | |
Measurement Input, Price Volatility [Member] | |||||
Derivative Liability, Measurement Input | 88.15 | 88.15 | |||
Measurement Input, Risk Free Interest Rate [Member] | |||||
Derivative Liability, Measurement Input | 0.16 | 0.16 | |||
Measurement Input, Expected Dividend Rate [Member] | |||||
Derivative Liability, Measurement Input | 0 | 0 | |||
Measurement Input, Expected Term [Member] | |||||
Derivative Liability, Measurement Input | 1.08 | 1.08 | |||
Derivative Financial Instruments, Liabilities [Member] | Registered Direct Offering 2019 [Member] | |||||
Closing price per share of common stock | $ 0.283 | $ 0.15 | $ 0.17 | $ 0.240 | |
Derivative Financial Instruments, Liabilities [Member] | Registered Direct Offering 2019 [Member] | Measurement Input, Exercise Price [Member] | |||||
Derivative Liability, Measurement Input | 0.40 | 0.40 | 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 | 82.41 | 82.24 | 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 | 0.27 | 0.22 | 1.55 | |
Derivative Financial Instruments, Liabilities [Member] | Registered Direct Offering 2019 [Member] | Measurement Input, Expected Dividend Rate [Member] | |||||
Derivative Liability, Measurement Input | 0 | 0 | 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 | 3 years 4 months 2 days | 3 years 7 months 6 days | 4 years 7 months 10 days |
2019 REGISTERED DIRECT OFFER_10
2019 REGISTERED DIRECT OFFERING - Additional information (Details) - USD ($) | May 14, 2019 | May 13, 2019 | May 12, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Jul. 02, 2018 | Feb. 24, 2017 |
Stock Issued During Period, Value, Warrants Exercised | $ 932,728 | ||||||||
Derivative Liability | $ 1,628,113 | $ 2,397,454 | $ 2,996,110 | ||||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Period Increase (Decrease) | $ 108,944 | $ (40,187) | $ 679,271 | $ 1,824,175 | |||||
Class Of Series H Warrant [Member] | |||||||||
Stock Issued During Period, Shares, New Issues | 0 | 0 | 0 | 0 | |||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 8,615,384 | 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 | ||||||||
Proceeds from Subscribed but Unissued Common Stock and Warrants | $ 2,800,000 | $ 2,800,000 | $ 2,748,821 | $ 2,748,821 | |||||
Payments of Stock Issuance Costs | 51,200 | $ 51,200 | |||||||
Cash Price Per Each Common Stock Underlying Warrants | $ 0.0533 | 0.0533 | 0.0533 | ||||||
Allocation Of Remaining Proceeds To Common Stock Subscribed and Unissued | 1,120,708 | 1,120,708 | |||||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Period Increase (Decrease) | $ 108,944 | $ (40,187) | $ 679,271 | $ 380,698 |
OCTOBER 2019 REGISTERED DIREC_4
OCTOBER 2019 REGISTERED DIRECT OFFERING (Details) - USD ($) | Oct. 18, 2019 | Oct. 16, 2019 | Oct. 10, 2019 | Oct. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2020 |
Class Of Series I Warrant [Member] | |||||||
Stock Issued During Period, Shares, New Issues | 0 | 0 | 0 | ||||
Proceeds from Subscribed but Unissued Common Stock and Warrants | $ 2,500,000 | ||||||
Payments of Stock Issuance Costs | $ 158,000 | ||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 14,285,714 | 14,285,714 | |||||
Class Of Series I Warrant [Member] | Maximum [Member] | |||||||
Percentage of fee on Gross Proceeds of Warrants | 8.20% | ||||||
Class Of Series I Warrant [Member] | Minimum [Member] | |||||||
Percentage of fee on Gross Proceeds of Warrants | 6.00% | ||||||
Placement Agent Warrants [Member] | |||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 1,071,429 | 1,071,429 | 1,071,429 | ||||
Registered Direct Offering October 2019 [Member] | |||||||
Stock Issued During Period, Shares, New Issues | 14,285,714 | 14,285,714 | |||||
Shares Issued, Price Per Share | $ 0.175 | ||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | 0.22 | ||||||
Proceeds from Subscribed but Unissued Common Stock and Warrants | $ 2,500,000 | $ 2,500,000 | |||||
Payments of Financing Costs | 333,000 | 333,000 | |||||
Payments of Stock Issuance Costs | $ 158,000 | $ 158,000 | |||||
Registered Direct Offering October 2019 [Member] | Placement Agent Warrants [Member] | |||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.21875 | ||||||
Exercise term of warrants | 5 years |
SERIES 1 CONVERTIBLE NOTES (Det
SERIES 1 CONVERTIBLE NOTES (Details) - USD ($) | Jun. 04, 2020 | Dec. 31, 2020 | Sep. 30, 2020 | Jul. 01, 2020 | Sep. 30, 2019 |
Debt Conversion [Line Items] | |||||
Common Stock, Par Value | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | |
Convertible Notes Payable | |||||
Debt Conversion [Line Items] | |||||
Aggregate principal amount | $ 550,000 | ||||
Debt Instrument, Term | 3 years | ||||
Common Stock, Par Value | $ 0.001 | ||||
Conversion Price (in dollars per share) | 0.27 | ||||
VWAP (in dollars per share) | $ 0.32 | ||||
Number of consecutive trading days for minimum VWAP | 15 days | ||||
Percentage of unpaid principal amount for outstanding note obligations | 35.00% | ||||
Percentage on Interest for Outstanding Note Obligations | 10.00% | ||||
Interest rate on the convertible debt | 10.00% | ||||
Interest expense | $ 18,000 | ||||
Series 1 convertible notes | |||||
Debt Conversion [Line Items] | |||||
Debt Instrument, Term | 3 years | ||||
Common Stock, Par Value | $ 0.001 | ||||
Conversion Price (in dollars per share) | 0.27 | ||||
VWAP (in dollars per share) | $ 0.32 | ||||
Number of consecutive trading days for minimum VWAP | 15 days | ||||
Percentage of unpaid principal amount for outstanding note obligations | 35.00% | ||||
Percentage on Interest for Outstanding Note Obligations | 10.00% | ||||
Interest rate on the convertible debt | 10.00% | ||||
Interest expense | $ 14,000 |
SERIES 2 CONVERTIBLE NOTES (Det
SERIES 2 CONVERTIBLE NOTES (Details) - USD ($) | Nov. 06, 2020 | Jun. 04, 2020 | Dec. 31, 2020 | Sep. 30, 2020 | Jul. 01, 2020 | Sep. 30, 2019 |
Debt Conversion [Line Items] | ||||||
Common Stock, Par Value | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||
Convertible Notes Payable | ||||||
Debt Conversion [Line Items] | ||||||
Aggregate principal amount | $ 550,000 | |||||
Debt Instrument, Term | 3 years | |||||
Common Stock, Par Value | $ 0.001 | |||||
Conversion Price (in dollars per share) | 0.27 | |||||
VWAP (in dollars per share) | $ 0.32 | |||||
Number of consecutive trading days for minimum VWAP | 15 days | |||||
Percentage of unpaid principal amount for outstanding note obligations | 35.00% | |||||
Percentage on Interest for Outstanding Note Obligations | 10.00% | |||||
Interest rate on the convertible debt | 10.00% | |||||
Interest expense | $ 18,000 | |||||
Series 2 convertible notes | ||||||
Debt Conversion [Line Items] | ||||||
Interest rate (as a percent) | 10.00% | |||||
Aggregate principal amount | $ 1,050,000 | |||||
Debt Instrument, Term | 3 years | |||||
Common Stock, Par Value | $ 0.001 | |||||
Conversion Price (in dollars per share) | 0.25 | |||||
VWAP (in dollars per share) | $ 0.32 | |||||
Number of consecutive trading days for minimum VWAP | 15 days | |||||
Percentage of unpaid principal amount for outstanding note obligations | 35.00% | |||||
Percentage on Interest for Outstanding Note Obligations | 10.00% | |||||
Interest rate on the convertible debt | 10.00% | |||||
Interest expense | $ 15,000 |
PAYROLL PROTECTION PROGRAM LO_4
PAYROLL PROTECTION PROGRAM LOAN (Details) - USD ($) | Jun. 04, 2020 | Apr. 25, 2020 |
PPP Loan | ||
Unsecured loan amount | $ 176,300 | |
Term of the debt (in years) | 2 years | |
Interest rate (as a percent) | 1.00% | |
Repayment deferral period (in months) | 10 months | |
Payments of principal and interest (in monthly) | $ 20,000 | |
Convertible Notes Payable | ||
Term of the debt (in years) | 3 years | |
Aggregate principal amount | $ 550,000 | |
Conversion Price (in dollars per share) | $ 0.27 | |
VWAP (in dollars per share) | $ 0.32 |
SUBSEQUENT EVENTS (Details)_2
SUBSEQUENT EVENTS (Details) - USD ($) | Feb. 17, 2021 | Feb. 12, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Oct. 16, 2019 |
Placement Agent Warrants [Member] | |||||
Subsequent Event [Line Items] | |||||
Warrants issued to purchase shares | 1,071,429 | 1,071,429 | 1,071,429 | ||
Subsequent Event [Member] | |||||
Subsequent Event [Line Items] | |||||
Stock issued during period, shares, new issues | 43,125,004 | ||||
Subsequent Event [Member] | Series K Warrant Member | |||||
Subsequent Event [Line Items] | |||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.17 | ||||
Warrant exercise term | 5 years 6 months | ||||
Proceeds from issuance of common stock | $ 6,900,000 | ||||
Financing costs | $ 700,000 | ||||
Subsequent Event [Member] | Placement Agent Warrants [Member] | |||||
Subsequent Event [Line Items] | |||||
Share price | $ 0.16 | ||||
Proceeds from issuance of common stock | $ 6,900,000 | ||||
Warrants issued to purchase shares | 32,343,753 | ||||
Subsequent Event [Member] | Placement Agent 2 Warrants Member | |||||
Subsequent Event [Line Items] | |||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.20 | ||||
Warrants issued to purchase shares | 3,234,375 |