Quarterly report pursuant to Section 13 or 15(d)

9. Stock Options

9. Stock Options

9 Months Ended

Jun. 30, 2016

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

Stock Options

The following table summarizes stock option activity for the nine months ended June 30, 2016:

	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life		Intrinsic Value
Outstanding at September 30, 2015		1,050,000	$	1.87		4.76	$	225,750
Granted		–
Exercised		–
Forfeited		–
Outstanding at June 30, 2016		1,050,000	$	1.87		4.01	$	162,500
Exercisable at June 30, 2016		1,012,500	$	1.85		3.94	$	162,500

The Company recognized compensation expense of $254,710 and $621,311 during the nine months ended June 30, 2016 and 2015, respectively, related to stock option awards granted to certain employees and executives based on the grant date fair value of the awards, net of estimated forfeitures.

At June 30, 2016, the Company had $5,089 of unrecognized compensation expense (net of estimated forfeitures) associated with stock option awards which the Company expects will be recognized through June 2017.

The exercise price for options outstanding and exercisable at June 30, 2016 is as follows:

Outstanding			Exercisable
Number of	Exercise		Number of		Exercise
Options	Price		Options		Price
187,500	$	0.83		187,500	$	0.83
150,000		1.25		150,000		1.25
187,500		1.67		187,500		1.67
37,500		2.08		37,500		2.08
37,500		2.50		–		2.50
450,000		2.53		450,000		2.53
1,050,000				1,012,500

The following table summarizes information about the Company’s non-vested shares as of June 30, 2016:

				Weighted- Average
	Number of			Grant-Date
Non-vested Shares	Shares			Fair Value
Nonvested at September 30, 2015		375,000		$	1.44
Granted		–
Vested		(337,500	)
Nonvested at June 30, 2016		37,500		$	1.44

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

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