0001558370-24-016491 | 10-K | XBRL Viewer

Year ended September 30,

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Income Taxes (Details) - USD ($)	12 Months Ended
Income Taxes (Details) - USD ($)	Sep. 30, 2024	Sep. 30, 2023
Income Taxes
State tax	$ 2,800	$ 2,800

Commitments and Contingencies (Tables)

12 Months Ended

Sep. 30, 2024

Commitments and Contingencies.

Schedule of lease information

The components of lease cost for the years ended September 30, 2024 and 2023 were as follows:


	Year ended September 30,
	2024		2023
Lease cost:
Interest on lease liabilities	$	116	$	1,399
Total finance lease cost		116		1,399
Operating lease cost		57,973		44,867
Total lease cost	$	58,089	$	46,266

Amounts reported in the consolidated balance sheets for leases where the Company is the lessee were as follows:


	September 30,
	2024		2023
Operating leases:
Right-of-use asset	$	274,645	$	26,172
Operating lease liabilities		297,829		—
Finance leases:
Right-of-use asset	$	—	$	—
Financing lease liabilities		—		4,267
Weighted-average remaining lease term (years):
Operating leases		4.6		0.6
Finance leases		—		0.3
Weighted-average discount rate:
Operating leases		9.9%		7.5%
Finance leases		—		13.0%

Other information related to leases for the years ended September 30, 2024 and 2023 are as follows:


	Year ended September 30,
	2024		2023
Cash paid for amounts included in the measurement of lease obligations:
Operating cash flows from finance leases	$	116	$	1,399
Operating cash flows from operating leases		14,514		27,675
Financing cash flows from finance leases		4,267		11,751
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	294,416	$	—

Schedule of operating lease future minimum payments


	Operating leases
2025	$	78,091
2026		79,954
2027		81,817
2028		83,680
2029		49,447
Total undiscounted lease payments		372,989
Less: Imputed interest		75,160
Total lease obligations	$	297,829

Schedule of finance lease future minimum payments


	Operating leases
2025	$	78,091
2026		79,954
2027		81,817
2028		83,680
2029		49,447
Total undiscounted lease payments		372,989
Less: Imputed interest		75,160
Total lease obligations	$	297,829

Income Taxes - Deferred (Details) - USD ($)	Sep. 30, 2024	Sep. 30, 2023
Deferred tax assets:
Net operating loss carryforwards	$ 102,906,140	$ 92,961,718
Capitalized research and development costs	15,200,918	6,531,508
Stock-based compensation	6,463,068	5,066,375
Lease liability	83,720
Research and development credit carryforward	13,748,600	11,953,956
Foreign tax credits	290,188	1,562,639
Accruals and others	144,079	1,656,239
Gross deferred tax assets	138,836,713	119,732,435
Less: valuation allowance	(138,759,510)	(119,725,078)
Deferred tax assets net of valuation allowance	77,203	7,357
Deferred tax liabilities:
Right-of-use assets	$ (77,203)	$ (7,357)

Stockholders' Equity (Tables)

12 Months Ended

Sep. 30, 2024

Stockholders' Equity

Schedule of warrants outstanding


		Shares of
		common stock
		issuable upon
		exercise of	Exercise Price
Expiration Date		warrants	Per Share
December 22, 2024	(i)	13,850	$	240.00
February 24, 2025		8,642	$	25.40
April 13, 2025	(i)	7,284	$	240.00
May 31, 2025	(i)	3,121	$	240.00
June 22, 2025		9,563	$	30.38
December 28, 2025		25,787	$	21.00
January 28, 2026		12,576	$	25.00
February 2, 2026		93,238	$	25.00
November 23, 2026		104,999	$	31.25
March 18, 2029	(ii)	12,857,133	$	7.70
April 15, 2029	(ii)	1,071,429	$	7.70
		14,207,622

(i)

The warrants were issued in connection with the convertible senior secured notes originally issued pursuant to the certain Note and Warrant Purchase Agreement dated December 22, 2017 and are classified as liabilities on the accompanying consolidated balance sheets, as the warrants include cash settlement features at the option of the holders under certain circumstances. Refer to Note 4 for fair value measurements disclosures.

(ii)

The warrants were issued in connection with private placements that closed on March 18, 2024 and April 15, 2024 and are exercisable only for cash, except in limited circumstances, at any time after the date of issuance. The Company evaluated the warrants under ASC 815-40 guidance and determined that the warrants did not meet Step 2 of the indexation. As a result they are not indexed to the Company’s own stock and must be classified as liabilities. Refer to the disclosure above under the header “—Common stock” for further details.

A holder of warrants may not exercise the warrant if the holder, together with its affiliates, would beneficially own more than a specified percentage of the outstanding common stock (4.99%, 9.99% or 19.99%, as applicable), immediately after giving effect to such exercise, which may be increased or decreased at the holders’ option (not to exceed 19.99%), effective 61 days after written notice to the Company. In addition, the Company may require the holders to cash exercise the warrants under certain circumstances as follows: (i) if the daily volume weighted average price (the “VWAP”) of the common stock equals or exceeds $20.00 per share (subject to adjustment in the event of stock splits, combinations or similar events, such as the reverse stock split implemented prior to closing) for 30 consecutive days (the “Stock Price Condition”) at any time after the Company publicly announces topline data from its NORSE EIGHT clinical trial evidencing satisfaction of the trial’s primary endpoints (the “NORSE EIGHT Announcement”), upon the consent of a majority of the members of the Company’s board of directors, the Company may require the holders to exercise up to 20% of the aggregate number of warrants issued to such holder on the issue date; and (ii) the Company may require up to the remainder of the warrants be exercised (A) if the Stock Price Condition is satisfied at any time after the Company publicly announces approval from the FDA of its BLA for ONS-5010/LYTENAVA, upon the consent of a majority of the members of the board of directors or (B) if the Stock Price Condition is satisfied at any time after the NORSE EIGHT Announcement, upon the unanimous consent of the members of the Company’s Board of Directors present at a duly called meeting.

Stockholders' Equity - Warrants (Details) - $ / shares	12 Months Ended
Stockholders' Equity - Warrants (Details) - $ / shares	Sep. 30, 2024	Apr. 15, 2024	Mar. 18, 2024
Common Stock and Stockholders' Equity
Common stock issuable on exercise of warrants (in shares)	14,207,622	1,071,429	12,857,133
Exercise price per share		$ 7.7	$ 7.7
Beneficial ownership exercise restriction, one (as a percent)	4.99%
Beneficial ownership exercise restriction, two (as a percent)	9.99%
Beneficial ownership exercise restriction, three (as a percent)	19.99%
Warrant holders exercise under certain conditions (as a percent)	20.00%
December 22, 2024
Common Stock and Stockholders' Equity
Common stock issuable on exercise of warrants (in shares)	13,850
Exercise price per share	$ 240
February 24, 2025
Common Stock and Stockholders' Equity
Common stock issuable on exercise of warrants (in shares)	8,642
Exercise price per share	$ 25.4
April 13, 2025
Common Stock and Stockholders' Equity
Common stock issuable on exercise of warrants (in shares)	7,284
Exercise price per share	$ 240
May 31, 2025
Common Stock and Stockholders' Equity
Common stock issuable on exercise of warrants (in shares)	3,121
Exercise price per share	$ 240
June 22, 2025
Common Stock and Stockholders' Equity
Common stock issuable on exercise of warrants (in shares)	9,563
Exercise price per share	$ 30.38
December 28, 2025
Common Stock and Stockholders' Equity
Common stock issuable on exercise of warrants (in shares)	25,787
Exercise price per share	$ 21
January 28, 2026
Common Stock and Stockholders' Equity
Common stock issuable on exercise of warrants (in shares)	12,576
Exercise price per share	$ 25
February 2, 2026
Common Stock and Stockholders' Equity
Common stock issuable on exercise of warrants (in shares)	93,238
Exercise price per share	$ 25
November 23, 2026
Common Stock and Stockholders' Equity
Common stock issuable on exercise of warrants (in shares)	104,999
Exercise price per share	$ 31.25
March 18, 2029
Common Stock and Stockholders' Equity
Common stock issuable on exercise of warrants (in shares)	12,857,133
Exercise price per share	$ 7.7
April 15, 2029
Common Stock and Stockholders' Equity
Common stock issuable on exercise of warrants (in shares)	1,071,429
Exercise price per share	$ 7.7

Basis of Presentation and Summary of Significant Accounting Policies (Details)		12 Months Ended
	Mar. 14, 2024	Sep. 30, 2024 USD ($) $ / shares shares	Sep. 30, 2023 $ / shares shares
Antidilutive securities
Stock split ratio	0.05
Performance-based stock units
Antidilutive securities
Antidilutive securities			123
Performance-based stock options
Antidilutive securities
Antidilutive securities		666,500	35,000
Employee Stock Option
Antidilutive securities
Antidilutive securities		1,946,646	1,197,774
Common stock warrants
Antidilutive securities
Antidilutive securities		14,207,622	366,427
Convertible debt
Antidilutive securities
Antidilutive securities		1,171,100	854,962
Debt conversion rate (in dollars per share) \| $ / shares			$ 40
Convertible debt \| Scenario one
Antidilutive securities
Original principal amount \| $		$ 3,750,000
Debt conversion rate (in dollars per share) \| $ / shares		$ 7
Convertible debt \| Scenario two
Antidilutive securities
Debt conversion rate (in dollars per share) \| $ / shares		$ 40

Subsequent Events

12 Months Ended

Sep. 30, 2024

Subsequent Events

Subsequent Events

14. Subsequent Events

Departure of Chief Executive Officer

On December 3, 2024, C. Russell Trenary III stepped down as the President and Chief Executive Officer the Company and as a member of the Company’s Board of Directors (the “Board”), effective immediately (the “Effective Date”). The Board has resolved to reduce its size to nine directors immediately upon Mr. Trenary’s resignation.

Mr. Trenary’s departure constituted a termination of employment without “cause” for purposes of any employment, equity compensation or benefit agreement, plan or arrangement of the Company and its subsidiaries to which Mr. Trenary is a party or otherwise participates, including that certain executive employment agreement, dated as of July 6, 2021, by and between Mr. Trenary and the Company (the “Employment Agreement”). Accordingly, subject to Mr. Trenary’s execution and non-revocation of a separation agreement containing a release of claims against the Company, Mr. Trenary is entitled to continued payment of his base salary for 12 months following the termination, 100% of his target bonus for the calendar year of termination paid in a lump sum, employee benefit coverage for up to 12 months, full vesting of 50% of his then unvested equity awards, and reimbursement of expenses owed to him through the date of his termination.

On December 3, 2024, Lawrence A. Kenyon, the Company’s Chief Financial Officer, was appointed Interim Chief Executive Officer of the Company, effective as of the Effective Date, to serve while the Board conducts a formal search process to identify and appoint a permanent Chief Executive Officer.

Reduction in Workforce

On December 10, 2024, the Board approved a reduction of the Company’s workforce in connection with its plans to reduce operating expenses and preserve capital. On December 13, 2024, the Company reduced its workforce by five people, or approximately 23% of its existing headcount. At a minimum, all employees affected by the workforce reduction are eligible to receive severance payments and paid COBRA premiums for a specified time period post-termination, subject to execution of a general release of claims against the Company. The Company estimates that it will incur approximately $336,000 in restructuring charges in connection with the workforce reduction, consisting of cash-based expenses related to employee severance and notice period payments, benefits and related costs.

Commitments and Contingencies - Lease cash flow (Details) - USD ($)	12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Leases
Operating cash flows from finance leases	$ 116	$ 1,399
Operating cash flows from operating leases	14,514	27,675
Financing cash flows from finance leases	4,267	$ 11,751
Right-of-use assets obtained in exchange for operating lease obligations	$ 294,416

Debt - Summary (Details) - USD ($)	Sep. 30, 2024	Sep. 30, 2023
Debt
Less: current portion	$ (29,440,000)	$ (35,551,000)
Unsecured convertible promissory note
Debt
Total debt	$ 29,440,000	$ 35,551,000

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

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+ Details

Fair Value Measurements

12 Months Ended

Sep. 30, 2024

Fair Value Measurements

Fair Value Measurements

4. Fair Value Measurements

The following table presents the Company’s liabilities that are measured at fair value on a recurring basis:


	September 30, 2024
	(Level 1)		(Level 2)		(Level 3)
Liabilities
Unsecured convertible promissory note	$	—	$	—	$	29,440,000
Warrant liability		—		—		59,099,013
Total	$	—	$	—	$	88,539,013

	September 30, 2023
	(Level 1)		(Level 2)		(Level 3)
Liabilities
Unsecured convertible promissory note	$	—	$	—	$	35,551,000
Warrant liability		—		—		6,219
Total	$	—	$	—	$	35,557,219

The table presented below is a summary of changes in the fair value of the Company’s Level 3 valuation for the warrant liability and the December 2022 Note for the years ended September 30, 2024 and 2023:


	Unsecured Convertible
	Promissory Note		Warrants
Balance at October 1, 2022	$	—	$	57,138
Fair value at issuance		31,820,000		—
Accrued interest converted to common stock		(25,000)		—
Change in fair value		3,756,000		(50,919)
Balance at September 30, 2023		35,551,000		6,219
Issued in connection with sale of common stock		—		97,730,836
Promissory note maturity extension fee added to outstanding balance		2,681,847		—
Principal and accrued interest converted to common stock		(11,250,000)		—
Change in fair value		2,457,153		(38,638,042)
Balance at September 30, 2024	$	29,440,000	$	59,099,013

As further described in Note 7, the Company elected the fair value option to account for the December 2022 Note. The fair value of the December 2022 Note is estimated using a binomial lattice model, which evaluates the payouts under hold, convert or call decisions. Significant estimates in the binomial lattice model include the Company’s stock price, volatility, risk-free rate of return, and credit-adjusted discount rate.

The fair values of the December 2022 Note as of September 30, 2024 and 2023 were estimated using a binomial lattice model with the following assumptions:


	September 30,
	2024			2023
Term (years)		0.8			0.3
Volatility		91.0	%		71.0	%
Risk-free rate		4.2	%		5.5	%
Dividend yield		—	%		—	%
Credit-adjusted discount rate		20.4	%		22.8	%
Stock price	$	5.34		$	4.40

The warrants related to the Note and Warrant Purchase Agreement dated December 22, 2017 are classified as liabilities as the warrants include cash settlement features at the option of the holders under certain circumstances. The warrants issued in connection with private placements that closed on March 18, 2024 and April 15, 2024 are classified as liabilities as the Company assessed that they are not indexed to the Company’s own stock and must be classified as liabilities. For further details on the evaluation refer to Note 9.

The above warrant liabilities are revalued each reporting period with the change in fair values recorded in the accompanying consolidated statements of operations until the warrants are exercised or expire. The fair values of the warrant liabilities are estimated using the Black-Scholes option pricing model using the following weighted average assumptions:


	September 30,
	2024			2023
Risk-free interest rate		3.58	%		5.30	%
Remaining contractual term of warrants (years)		4.5			1.4
Expected volatility		125.0	%		158.3	%
Annual dividend yield		—	%		—	%
Fair value of common stock (per share)	$	5.34		$	4.40

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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-Topic 820
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+ Details

Fair Value Measurements - Fair value changes (Details) - USD ($)	12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Unsecured convertible promissory note
Liabilities fair value changes
Balance, beginning	$ 35,551,000
Fair value at issuance		$ 31,820,000
Promissory note maturity extension fee added to outstanding balance	2,681,847
Converted to common stock	(11,250,000)	(25,000)
Change in fair value	$ 2,457,153	$ 3,756,000
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration]	Change In Fair Value Of Redemption Feature	Change In Fair Value Of Redemption Feature
Balance, ending	$ 29,440,000	$ 35,551,000
Common stock warrants
Liabilities fair value changes
Balance, beginning	6,219	57,138
Fair value at issuance	97,730,836
Change in fair value	$ (38,638,042)	$ (50,919)
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration]	Fair Value Adjustment of Warrants	Fair Value Adjustment of Warrants
Balance, ending	$ 59,099,013	$ 6,219

Accrued Expenses

12 Months Ended

Sep. 30, 2024

Accrued Expenses

Accrued Expenses

6. Accrued Expenses

Accrued expenses consists of:


	September 30,
	2024		2023
Compensation	$	1,012,962	$	919,970
Professional fees		1,798,767		165,192
Research and development		41,373		1,234,192
Other accrued expenses		384,366		426,386
	$	3,237,468	$	2,745,740

Fair Value Measurements - Assumptions (Details)	Sep. 30, 2024 $ / shares Y	Sep. 30, 2023 $ / shares Y
Term
Fair value inputs
Debt inputs \| Y	0.8	0.3
Warrant inputs \| Y	4.5	1.4
Volatility
Fair value inputs
Debt inputs	0.91	0.71
Warrant inputs	1.25	1.583
Risk-free rate
Fair value inputs
Debt inputs	0.042	0.055
Warrant inputs	0.0358	0.053
Dividend yield
Fair value inputs
Debt inputs	0	0
Warrant inputs	0	0
Credit-adjusted discount rate
Fair value inputs
Debt inputs	0.204	0.228
Stock price (in dollars per share)
Fair value inputs
Debt inputs \| $ / shares	5.34	4.4
Warrant inputs \| $ / shares	5.34	4.4

Collaboration Arrangements (Details) - Syntone - USD ($)		1 Months Ended
	May 22, 2020	Jun. 30, 2020
Collaborative arrangements
Ownership (as a percent)	20.00%
Investment in joint venture		$ 900,000
Expected future investment	$ 2,100,000
Syntone PRC
Collaborative arrangements
Ownership (as a percent)	80.00%

Accrued Expenses (Details) - USD ($)	Sep. 30, 2024	Sep. 30, 2023
Accrued Expenses
Compensation	$ 1,012,962	$ 919,970
Professional fees	1,798,767	165,192
Research and development	41,373	1,234,192
Other accrued expenses	384,366	426,386
Total accrued expenses	$ 3,237,468	$ 2,745,740

Stock-Based Compensation - Non-options (Details) - Performance-based stock units	12 Months Ended
	Sep. 30, 2024 $ / shares shares
Number of PSUs
Balance, Beginning \| shares	123
Expired \| shares	(123)
Weighted Average Base Price Per Unit
Balance, Beginning \| $ / shares	$ 999.4
Expired \| $ / shares	$ 999.4

Equity Method Investment

12 Months Ended

Sep. 30, 2024

Equity Method Investment

Equity Method Investment

5. Equity Method Investment

In connection with the execution of a stock purchase agreement with Syntone Ventures LLC (“Syntone Ventures”), the U.S. based affiliate of Syntone Technologies Group Co. Ltd. (“Syntone PRC”) on May 22, 2020, the Company and Syntone PRC entered into a joint venture agreement pursuant to which they agreed to form a People’s Republic of China (“PRC”) joint venture, Beijing Syntone Biopharma Ltd (“Syntone JV”), that is 80% owned by Syntone PRC and 20% owned by the Company. As the Company can exert significant influence over, but does not control, Syntone JV’s operations through voting rights or representation on Syntone JV’s board of directors, the Company accounts for this investment using the equity method of accounting. Upon formation of Syntone JV in April 2021, the Company entered into a royalty-free license with Syntone JV for the development, commercialization and manufacture of ONS-5010/LYTENAVA in the greater China market, which includes Hong Kong, Taiwan and Macau.

The Company made the initial investment of $900,000 in June 2020 and is committed to making capital contributions to Syntone JV of approximately $2,100,000, based upon the development plan contemplated in the license agreement. The maximum exposure to a loss as a result of the Company’s involvement in Syntone JV is limited to the initial investment and the future capital contributions totaling approximately $2,100,000.

Basis of Presentation and Summary of Significant Accounting Policies (Policies)

12 Months Ended

Sep. 30, 2024

Basis of Presentation and Summary of Significant Accounting Policies

Basis of presentation

The accompanying consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”). The accompanying consolidated financial statements include the accounts of the Company and Outlook Therapeutics Pty Ltd, its wholly-owned subsidiary incorporated in Australia (the “Subsidiary”). All intercompany accounts and transactions have been eliminated in consolidation. The Company has determined the functional currency of the Subsidiary to be the U.S. dollar. The Company translates assets and liabilities of its foreign operations at exchange rates in effect at the balance sheet date. The Company records remeasurement gains and losses on monetary assets and liabilities, such as incentive and tax receivables and accounts payables, which are not in the functional currency of the operation. These remeasurement gains and losses are recorded in the consolidated statements of operations as they occur.

Reverse stock split

Effective on March 14, 2024, the Company amended its amended and restated certificate of incorporation to implement a one-for-twenty reverse stock split of its common stock. As a result of the reverse stock split, the Company made corresponding adjustments to the share amounts under its employee incentive plans, outstanding options, and common stock warrant agreements with third parties. The disclosure of common shares and per common share data in the accompanying consolidated financial statements and related notes reflect the reverse stock split for all periods presented.

Cash and cash equivalents

Cash and cash equivalents include cash-on-hand and demand deposits with financial institutions and other short-term investments with maturities of less than three months when acquired and convertible to known cash amounts. At September 30, 2024 and 2023, the Company’s cash equivalents consist of a money market account.

Equity method investment

The Company accounts for equity investments where it owns a non-controlling interest, but has the ability to exercise significant influence, under the equity method of accounting. Under the equity method of accounting, the original cost of the investment is adjusted for the Company’s share of equity in the earnings or loss of the equity investee and reduced by dividends and distributions of capital received, unless the fair value option is elected, in which case the investment balance

is marked to fair value each reporting period and the impact of changes in fair value of the equity investment are reported in earnings. The Company has not elected the fair value option. The Company assesses its investment for other-than-temporary impairment when events or changes in circumstances indicate that the carrying amount of the investment might not be recoverable and recognize an impairment loss to adjust the investment to its then-current fair value.

Use of estimates

The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Due to the uncertainty of factors surrounding the estimates or judgments used in the preparation of the consolidated financial statements, actual results may materially vary from these estimates. Estimates and assumptions are periodically reviewed and the effects of revisions are reflected in the consolidated financial statements in the period they are determined to be necessary.

Fair value of financial instruments

Certain assets and liabilities are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable:

●

Level 1 — Quoted prices in active markets for identical assets or liabilities.

●

Level 2 — Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data.

●

Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques.

The asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.

At September 30, 2024 and 2023, the Company’s financial instruments included cash and cash equivalents, accounts payable, accrued expenses, unsecured convertible promissory note and warrant liabilities. The carrying amount of accounts payable, and accrued expenses approximates fair value due to the short-term maturities of these instruments.

Fair Value Option

The Company elected the fair value option to account for the December 2022 Note. Refer to Note 7 for further details on the December 2022 Note.

Leases

Leases

At lease commencement, the Company records a lease liability based on the present value of lease payments over the expected lease term including any options to extend the lease that the Company is reasonably certain to exercise. The Company calculates the present value of lease payments using an incremental borrowing rate as the Company’s leases do not provide an implicit interest rate. The Company’s incremental borrowing rate for a lease is the rate of interest it would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms. At the lease

commencement date, the Company records a corresponding right-of-use lease asset based on the lease liability, adjusted for any lease incentives received and any initial direct costs paid to the lessor prior to the lease commencement date. The Company may enter into leases with an initial term of 12 months or less (“Short-Term Leases”). For Short-Term Leases, the Company records the rent expense on a straight-line basis and does not record the leases on the consolidated balance sheet. The Company had no Short-Term Leases as of September 30, 2024.

After lease commencement, the Company measures its leases as follows: (i) the lease liability based on the present value of the remaining lease payments using the discount rate determined at lease commencement and (ii) the right-of-use lease asset based on the re-measured lease liability, adjusted for any unamortized lease incentives received, any unamortized initial direct costs and the cumulative difference between rent expense and amounts paid under the lease agreement. Any lease incentives received, and any initial direct costs incurred are amortized on a straight-line basis over the expected lease term. Rent expense is recorded on a straight-line basis over the expected lease term.

Stock-based compensation

The Company measures equity classified stock-based awards based on the estimated fair value on the date of grant and recognizes compensation expense of those awards on a straight-line basis over the requisite service period, which is generally the vesting period of the respective award. The Company accounts for forfeitures of stock option awards as they occur.

The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option pricing model, which is described more fully in Note 11. The fair value of each restricted stock award is measured as the fair value per share of the Company’s common stock on the date of grant.

Research and development

Research and development costs are expensed as incurred and consist primarily of funds paid to third parties for the provision of services for product candidate development, clinical and preclinical development and related supply and manufacturing costs, and regulatory compliance costs. At the end of the reporting period, the Company compares payments made to third-party service providers to the estimated progress toward completion of the research or development objectives. Such estimates are subject to change as additional information becomes available. Depending on the timing of payments to the service providers and the progress that the Company estimates has been made as a result of the service provided, the Company may record net prepaid or accrued expense relating to these costs.

Upfront milestone payments made to third parties who perform research and development services on the Company’s behalf are expensed as services are rendered. Costs incurred in obtaining technology licenses are charged to research and development expense as acquired in-process research and development if the technology licensed has not reached technological feasibility and has no alternative future use.

Income taxes

The Company accounts for income taxes using the asset and liability method. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recorded to the extent it is more likely than not that some portion or all of the deferred tax assets will not be realized.

Net loss per share

Basic net loss per common share is determined by dividing net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. For purposes of calculating diluted net loss per common share, the denominator includes both the weighted average common shares outstanding and the number of

common stock equivalents if the inclusion of such common stock equivalents would be dilutive. Dilutive common stock equivalents potentially include convertible debt, warrants, performance-based stock options and units, and stock options the treasury stock method. For all periods presented, there is no difference in the number of shares used to compute basic and diluted shares due to the Company’s losses.

The following potentially dilutive securities have been excluded from the computation of diluted weighted-average shares outstanding as of September 30, 2024 and 2023, as they would be antidilutive:


	As of September 30,
	2024		2023
Performance-based stock units	—		123
Performance-based stock options	666,500		35,000
Stock options	1,946,646		1,197,774
Common stock warrants	14,207,622		366,427
Convertible debt	1,171,100	⁽ⁱ⁾	854,962	⁽ⁱⁱ⁾

(i)

The calculation for potentially dilutive securities pertaining to convertible debt is as follows: $3,750,000 of outstanding principal and accrued interest as of September 30, 2024, is converted at a rate of $7.00, and the remaining amount is converted based on a fixed conversion price of $40.00 per share, which is subject to change as described in Note 7.

(ii)

The potentially dilutive securities related to convertible debt are calculated based on a fixed conversion price of $40.00 per share, which is subject to change as described in Note 7.

Recently issued accounting pronouncements

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. ASU 2023-07, which is applicable to entities with a single reportable segment and will primarily require enhanced disclosures about significant segment expenses and enhanced disclosures in interim periods. The guidance in ASU 2023-07 will be applied retrospectively and is effective for annual reporting periods in fiscal years beginning after December 15, 2023 and interim reporting periods in fiscal years beginning after December 31, 2024, with early adoption permitted. The Company is currently evaluating the impact that the adoption of ASU 2023-07 will have on its consolidated financial statements and disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 which is intended to improve income tax disclosure requirements by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) the disaggregation of income taxes paid by jurisdiction. The guidance makes several other changes to the income tax disclosure requirements. The guidance in ASU 2023-09 will be effective for annual reporting periods in fiscal years beginning after December 15, 2024. The Company is currently evaluating the impact that the adoption of ASU 2023-09 will have on its consolidated financial statements and disclosures.

Stock-Based Compensation - Information (Details) - shares	1 Months Ended	12 Months Ended
	Aug. 31, 2024	Sep. 30, 2024
Share-based Compensation
Share-based stock authorized (in shares)	7,293,901
Share-based stock available for grant (in shares)		4,680,755
Term of award	10 years
Minimum
Share-based Compensation
Vesting period	1 year
Maximum
Share-based Compensation
Vesting period	4 years
Employee Stock Option
Share-based Compensation
Term of award		10 years
Employee Stock Option \| Minimum
Share-based Compensation
Vesting period		1 year
Employee Stock Option \| Maximum
Share-based Compensation
Vesting period		4 years
Performance-based stock options
Share-based Compensation
Term of award		10 years
Performance-based stock units
Share-based Compensation
Term of award		10 years

Consolidated Statements of Operations - USD ($)	12 Months Ended
Consolidated Statements of Operations - USD ($)	Sep. 30, 2024	Sep. 30, 2023
Operating expenses:
Research and development	$ 41,763,047	$ 26,452,942
General and administrative	29,940,188	26,673,440
Loss from operations	(71,703,235)	(53,126,382)
Loss on equity method investment	100,742	10,998
Interest income	(906,150)	(971,480)
Interest expense	3,156,964	2,531,228
Loss on extinguishment of debt		577,659
Change in fair value of promissory notes	2,457,153	3,756,000
Warrant related expenses (Note 9)	37,490,012
Change in fair value of warrant liability	(38,638,042)	(50,919)
Income (loss) before income taxes	(75,363,914)	(58,979,868)
Income tax expense	2,800	2,800
Net income (loss)	$ (75,366,714)	$ (58,982,668)
Per share information:
Net income (loss) per share of common stock, basic (in dollars per share)	$ (4.06)	$ (4.72)
Net loss per share of common stock, diluted (in dollars per share)	$ (4.06)	$ (4.72)
Weighted average shares outstanding, basic (in shares)	18,548,813	12,508,817
Weighted average shares outstanding, diluted (in shares)	18,548,813	12,508,817

Basis of Presentation and Summary of Significant Accounting Policies

12 Months Ended

Sep. 30, 2024

Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation and Summary of Significant Accounting Policies

3. Basis of Presentation and Summary of Significant Accounting Policies

Basis of presentation

Reverse stock split

Cash and cash equivalents

Equity method investment

Use of estimates

Fair value of financial instruments

●

Level 1 — Quoted prices in active markets for identical assets or liabilities.

●

Fair Value Option

The Company elected the fair value option to account for the December 2022 Note. Refer to Note 7 for further details on the December 2022 Note.

Leases

Stock-based compensation

Research and development

Income taxes

Net loss per share

The following potentially dilutive securities have been excluded from the computation of diluted weighted-average shares outstanding as of September 30, 2024 and 2023, as they would be antidilutive:


	As of September 30,
	2024		2023
Performance-based stock units	—		123
Performance-based stock options	666,500		35,000
Stock options	1,946,646		1,197,774
Common stock warrants	14,207,622		366,427
Convertible debt	1,171,100	⁽ⁱ⁾	854,962	⁽ⁱⁱ⁾

(i)

(ii)

The potentially dilutive securities related to convertible debt are calculated based on a fixed conversion price of $40.00 per share, which is subject to change as described in Note 7.

Recently issued accounting pronouncements

Document And Entity Information - USD ($) $ in Millions	12 Months Ended
Document And Entity Information - USD ($) $ in Millions	Sep. 30, 2024	Dec. 24, 2024	Mar. 31, 2024
Document And Entity Information
Document Type	10-K
Document Annual Report	true
Document Period End Date	Sep. 30, 2024
Document Transition Report	false
Securities Act File Number	001-37759
Entity Registrant Name	OUTLOOK THERAPEUTICS, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	38-3982704
Entity Address, Address Line One	111 S. Wood Avenue, Unit #100
Entity Address, City or Town	Iselin
Entity Address, State or Province	NJ
Entity Address, Postal Zip Code	08852
City Area Code	609
Local Phone Number	619-3990
Title of 12(b) Security	Common Stock
Trading Symbol	OTLK
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
ICFR Auditor Attestation Flag	false
Document Financial Statement Error Correction [Flag]	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		24,905,635
Entity Public Float			$ 180.4
Entity Central Index Key	0001649989
Current Fiscal Year End Date	--09-30
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	FY
Amendment Flag	false
Auditor Firm ID	185
Auditor Name	KPMG LLP
Auditor Location	Philadelphia, Pennsylvania

Stock-Based Compensation

12 Months Ended

Sep. 30, 2024

Stock-Based Compensation

Stock-Based Compensation

11. Stock-Based Compensation

2011 Equity Incentive Plan

The Company’s 2011 Equity Compensation Plan (the “2011 Plan”) provided for the Company to sell or issue restricted common stock, restricted stock units (“RSUs”), performance-based awards (“PSUs”), cash-based awards or to grant stock options for the purchase of common stock to officers, employees, consultants and directors of the Company. The 2011 Plan was administered by the board of directors or, at the discretion of the board of directors, by a committee of the board. As of September 30, 2024, there were no equity awards outstanding under the 2011 Plan. In light of the December 2015 adoption of the 2015 Equity Incentive Plan, (the “2015 Plan”) no future awards under the 2011 Plan will be granted.

2024 Equity Incentive Plan

In December 2015, the Company adopted the 2015 Plan. The 2015 Plan provided for the grant of stock options, stock appreciation rights, restricted stock awards, RSU awards, performance stock awards and other forms of equity

compensation to Company employees, directors and consultants. In August 2024, the Company’s stockholders approved the amendment and restatement of the 2015 Plan and, in connection with amending and restating the 2015 Plan, the name of the 2015 Plan was updated to the Outlook Therapeutics, Inc. 2024 Equity Incentive Plan (the “2024 Plan”). The 2024 Plan provides for the grant of stock options, stock appreciation rights, restricted stock awards, RSU awards, performance stock awards and other forms of equity compensation to Company employees, directors and consultants. The aggregate number of shares of common stock authorized for issuance pursuant to the Company’s 2024 Plan is 7,293,901. As of September 30, 2024, 4,680,755 shares remained available for grant under the 2024 Plan.

Stock options and RSUs granted under the Company's 2024 Plan generally vest over a period of one to four years from the date of grant and, in the case of stock options, have a term of 10 years. The Company recognizes the grant date fair value of each option and share of RSU over its vesting period.

The Company recorded stock-based compensation expense in the following expense categories of its consolidated statements of operations for the years ended September 30, 2024 and 2023:


	Year ended September 30,
	2024		2023
Research and development	$	800,956	$	986,598
General and administrative		4,584,168		4,560,421
	$	5,385,124	$	5,547,019

Stock options

The following table summarizes all of the Company’s stock option activity for the years ended September 30, 2024:


				Weighted
				Average
		Weighted		Remaining
	Number of	Average		Contractual	Aggregate
	Shares	Exercise Price		Term (Years)	Intrinsic Value
Balance at October 1, 2023	1,197,774	$	28.72
Granted	817,729		6.69
Forfeited	(59,212)		26.27
Expired	(9,645)		34.50
Balance at September 30, 2024	1,946,646	$	19.51	7.7	$	53,985
Vested and exercisable at September 30, 2024	1,006,079	$	26.84	6.5	$	53,985

The aggregate intrinsic value represents the total amount by which the fair market value of the common stock subject to options exceeds the exercise price of the related options.

The Company estimated the fair value of each stock option award on the grant date using the Black-Scholes option pricing model, wherein expected volatility is based on a weighted average of the Company’s historical volatility and the volatilities of similar entities within the Company’s industry which are commensurate with the expected term assumption. The expected term calculation is based on the “simplified” method described in Staff Accounting Bulletin (“SAB”) No. 107, Share-Based Payment, and SAB No. 110, Share-Based Payment, since the simplified method provides a reasonable estimate in comparison to actual experience. The risk-free interest rate is based on the U.S. Treasury yield at the date of grant for an instrument with a maturity that is commensurate with the expected term of the stock options. The dividend yield is zero since the Company has never paid cash dividends on its common stock and has no present intention to pay cash dividends. Options granted under the 2024 Plan generally vest over one to four years and have a term of 10 years.

The weighted average grant date fair value of the options awarded to employees and directors for the years ended September 30, 2024 and 2023 was $6.04 and $19.40 per option, respectively. The fair value of the options was estimated on the date of grant using a Black-Scholes option pricing model with the following weighted-average assumptions:


	Year ended September 30,
	2024		2023
Risk-free interest rate	4.3	%	3.7	%
Expected term (years)	6.0		5.9
Expected volatility	131.4	%	111.6	%
Expected dividend yield	—		—

As of September 30, 2024, there was $7,508,106 of unrecognized compensation expense that is expected to be recognized over a weighted-average period of 1.3 years.

Performance-based stock options

The Company granted certain officers of the Company option awards where vesting was contingent upon meeting certain company-wide performance goals. The performance stock options were granted “at-the-money” and have a term of 10 years.

The fair value of each option grant under the performance share option plan was estimated on the date of grant using the same option valuation model used for non-statutory options above. Compensation expense for performance-based stock options is only recognized when management determines it is probable that the awards will vest.

The following table summarizes all of the Company’s performance-based stock option activity for the years ended September 30, 2024.


				Weighted
				Average
		Weighted		Remaining
	Number of	Average		Contractual	Aggregate
	Shares	Exercise Price		Term (Years)	Intrinsic Value
Balance at October 1, 2023	35,000	$	28.80
Granted	634,000		6.78
Forfeited	(2,500)		6.78
Balance at September 30, 2024	666,500	$	7.94	9.3	$	—
Vested and exercisable at September 30, 2024	35,000	$	28.80	6.3	$	—

The weighted average grant date fair value of the performance stock options awarded for the years ended September 30, 2024 and 2023 was $6.52 and $18.20 per option, respectively. During the year ended September 30, 2024, no expense was recognized because the performance conditions were not considered probable of achievement. As of September 30, 2024, the Company assessed that the performance conditions related to the performance options granted were not probable of achievement. The assessment was based on the relevant facts and circumstances and therefore no compensation costs were recognized. The fair value of the options was estimated on the date of grant using a Black-Scholes option pricing model with the following weighted-average assumptions:


	Year ended September 30,
	2024		2023
Risk-free interest rate	4.3	%	3.8	%
Expected term (years)	10.0		10.0
Expected volatility	125.6	%	91.3	%
Expected dividend yield	—		—

Performance-based stock units

The Company has issued PSUs, which generally have a ten-year life from the date of grant. Upon exercise, the PSU holder receives common stock or cash at the Company’s discretion. The following table summarizes the activity related to PSUs during the years ended September 30, 2024:


				Weighted
				Average
	Number	Exercise		Remaining
	of	Price		Contractual	Aggregate
	PSUs	Per PSU		Term (Years)	Intrinsic Value
Balance at October 1, 2023	123	$	999.40
Expired	(123)		999.40
Balance at September 30, 2024	—	$	—	—	$	—
Vested and exercisable at September 30, 2024	—	$	—	—	$	—

Consolidated Statements of Cash Flows - USD ($)	12 Months Ended
Consolidated Statements of Cash Flows - USD ($)	Sep. 30, 2024	Sep. 30, 2023
OPERATING ACTIVITIES
Net loss	$ (75,366,714)	$ (58,982,668)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	113,859	44,188
Loss on extinguishment of debt		577,659
Non-cash interest expense	2,681,847	2,529,830
Stock-based compensation	5,385,124	5,547,019
Change in fair value of promissory notes	2,457,153	3,756,000
Warrant related expenses (Note 9)	37,490,012
Change in fair value of warrant liability	(38,638,042)	(50,919)
Loss on equity method investment	100,742	10,998
Interest paid on debt		(1,158,609)
Changes in operating assets and liabilities:
Prepaid expenses and other current assets	(4,901,282)	2,616,925
Other assets	(5,900)	(208,203)
Operating lease liabilities	3,413	(26,995)
Accounts payable	1,394,202	3,083,038
Accrued expenses	491,728	(711,661)
Net cash used in operating activities	(68,793,858)	(42,973,398)
FINANCING ACTIVITIES
Proceeds from the sale of common stock and warrants to purchase common stock, net of issuance costs	60,333,681	30,024,213
Proceeds from debt		30,000,000
Payments of finance lease obligations	(4,267)	(11,751)
Repayment of debt		(10,220,000)
Payment of financing costs		(823,894)
Net cash provided by financing activities	60,329,414	48,968,568
Net (decrease) increase in cash and cash equivalents	(8,464,444)	5,995,170
Cash and cash equivalents at beginning of period	23,391,982	17,396,812
Cash and cash equivalents at end of period	14,927,538	23,391,982
Supplemental disclosure of cash flow information:
Cash paid for interest	475,000	1,160,008
Supplemental schedule of non-cash financing activities:
Convertible promissory note converted into common stock	11,250,000	25,000
Recognition of warrant liability	97,730,836
Deferred offering costs amortization		$ 141,600
Right-of-use asset and lease liability recognized for new operating lease liabilities	$ 294,416

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Sep. 30, 2024
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

Stock-Based Compensation (Tables)

12 Months Ended

Sep. 30, 2024

Share-based Compensation

Schedule of stock-based compensation expense


	Year ended September 30,
	2024		2023
Research and development	$	800,956	$	986,598
General and administrative		4,584,168		4,560,421
	$	5,385,124	$	5,547,019

Schedule of performance-based stock units activity


				Weighted
				Average
	Number	Exercise		Remaining
	of	Price		Contractual	Aggregate
	PSUs	Per PSU		Term (Years)	Intrinsic Value
Balance at October 1, 2023	123	$	999.40
Expired	(123)		999.40
Balance at September 30, 2024	—	$	—	—	$	—
Vested and exercisable at September 30, 2024	—	$	—	—	$	—

Employee Stock Option

Share-based Compensation

Schedule of stock option activity


				Weighted
				Average
		Weighted		Remaining
	Number of	Average		Contractual	Aggregate
	Shares	Exercise Price		Term (Years)	Intrinsic Value
Balance at October 1, 2023	1,197,774	$	28.72
Granted	817,729		6.69
Forfeited	(59,212)		26.27
Expired	(9,645)		34.50
Balance at September 30, 2024	1,946,646	$	19.51	7.7	$	53,985
Vested and exercisable at September 30, 2024	1,006,079	$	26.84	6.5	$	53,985

Schedule of option assumptions


	Year ended September 30,
	2024		2023
Risk-free interest rate	4.3	%	3.7	%
Expected term (years)	6.0		5.9
Expected volatility	131.4	%	111.6	%
Expected dividend yield	—		—

Performance-based stock options

Share-based Compensation

Schedule of stock option activity


				Weighted
				Average
		Weighted		Remaining
	Number of	Average		Contractual	Aggregate
	Shares	Exercise Price		Term (Years)	Intrinsic Value
Balance at October 1, 2023	35,000	$	28.80
Granted	634,000		6.78
Forfeited	(2,500)		6.78
Balance at September 30, 2024	666,500	$	7.94	9.3	$	—
Vested and exercisable at September 30, 2024	35,000	$	28.80	6.3	$	—

Schedule of option assumptions


	Year ended September 30,
	2024		2023
Risk-free interest rate	4.3	%	3.8	%
Expected term (years)	10.0		10.0
Expected volatility	125.6	%	91.3	%
Expected dividend yield	—		—

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

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+ Details

Organization and Description of Business

12 Months Ended

Sep. 30, 2024

Organization and Description of Business

Organization and Description of Business

1. Organization and Operations

Description of the Business

Outlook Therapeutics, Inc. (“Outlook” or the “Company”) was incorporated in New Jersey on January 5, 2010, started operations in July 2011, reincorporated in Delaware by merging with and into a Delaware corporation in October 2015 and changed its name to “Outlook Therapeutics, Inc.” in November 2018. The Company is a biopharmaceutical company focused on developing and commercializing ONS-5010/LYTENAVA™ (bevacizumab-gamma), an ophthalmic formulation of bevacizumab for use in retinal indications. The Company is based in Iselin, New Jersey.

In May 2024, the Company received Marketing Authorization from the European Commission for ONS-5010/LYTENAVA, an ophthalmic formulation of bevacizumab for the treatment of wet age-related macular degeneration (“AMD”) in the European Union (“EU”). Additionally, in July 2024 the Company also received marketing authorization for ONS-5010/LYTENAVA in the United Kingdom (“UK”) from the UK Medicines and Healthcare products Regulatory Agency (MHRA). ONS-5010/LYTENAVA is the first and only authorized ophthalmic formulation of bevacizumab for use in treating wet AMD in the EU and UK.

In the fourth quarter of calendar 2023, the Company agreed to conduct an additional adequate and well-controlled clinical trial following discussions with the U.S. Food and Drug Administration (“FDA”) in support of the Company’s Biologics License Application (“BLA”) for ONS-5010/LYTENAVA. In December 2023, the Company submitted a Special Protocol Assessment (“SPA”) to the FDA for this study (NORSE EIGHT) seeking confirmation that, if successful, it will address the FDA’s requirement for a second adequate and well-controlled clinical trial to support its planned resubmission of the ONS-5010/LYTENAVA BLA. In January 2024, the Company received confirmation that the FDA had reviewed and agreed upon the NORSE EIGHT trial protocol pursuant to the SPA and that, if the NORSE EIGHT trial is successful, it would satisfy the FDA’s requirement for a second adequate and well-controlled clinical trial to address fully the clinical deficiency identified in the Complete Response Letter (“CRL”). In addition, through a Type A meeting and additional interactions, the Company has identified the approaches needed to resolve the chemistry, manufacturing and controls (“CMC”) comments in the CRL. In November 2024, the Company reported that ONS-5010/LYTENAVA did not meet the pre-specified non-inferiority endpoint at week 8 set forth in the SPA. However, the preliminary data from the trial demonstrated an improvement in vision and the presence of biologic activity, as well as a continued favorable safety profile for ONS-5010. Analysis of the data is ongoing as the month 3 data from NORSE EIGHT is being collected, which is expected to be available in January 2025.

Pay vs Performance Disclosure - USD ($)	12 Months Ended
Pay vs Performance Disclosure - USD ($)	Sep. 30, 2024	Sep. 30, 2023
Pay vs Performance Disclosure
Net Income (Loss)	$ (75,366,714)	$ (58,982,668)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

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Reference 25: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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Reference 26: http://www.xbrl.org/2003/role/disclosureRef
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Reference 27: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org/1943274/2147480097/470-10-S99-1B

Reference 28: http://www.xbrl.org/2003/role/disclosureRef
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Reference 29: http://www.xbrl.org/2003/role/disclosureRef
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Reference 30: http://www.xbrl.org/2003/role/disclosureRef
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Reference 32: http://www.xbrl.org/2003/role/disclosureRef
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Reference 35: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Stockholders' Equity

12 Months Ended

Sep. 30, 2024

Stockholders' Equity

Stockholders' Equity

9. Stockholders’ Equity

Common stock

On March 7, 2024, following receipt of stockholder approval at the Company’s 2024 annual meeting of stockholders, the number of authorized shares of common stock under the Company’s Certificate of Incorporation was increased from 21,250,000 shares to 60,000,000 shares.

On March 18, 2024, in a private placement (the “Private Placement”) pursuant to a securities purchase agreement entered in January 2024 with certain institutional and accredited investors, including GMS Ventures and Investments (“GMS Ventures”), the Company’s largest stockholder, the Company issued an aggregate of 8,571,423 shares of common stock and warrants to purchase an aggregate of 12,857,133 shares of common stock at a purchase price per share of $7.00 per share and accompanying warrant to purchase one and one-half shares of common stock for $55,498,311 in net proceeds after payment of placement agent fees and other offering costs. GMS Ventures purchased an aggregate of 2,305,714 shares of common stock and warrants to purchase an aggregate of 3,458,571 shares of common stock in the Private Placement. The Warrants have an exercise price of $7.70 per share of common stock and will expire on March 18, 2029.

On April 15, 2024, in a private placement with Syntone pursuant to a securities purchase agreement entered into in January 2024 (the “Syntone Private Placement”), the Company issued 714,286 shares of common stock and accompanying warrants to purchase 1,071,429 shares of common stock for $4,835,371 in net proceeds on substantially the same terms as those in the Private Placement. The warrants have an exercise price of $7.70 per share of common stock and will expire on April 15, 2029.

The Company evaluated the equity classification for the common stock warrants and considered the conditions as prescribed within ASC 815-40, Derivatives and Hedging, Contracts in an Entity’s own Equity (“ASC 815-40”). The Company determined that the warrants did not meet the “fixed for fixed” settlement provision set forth in Step 2 of the indexation guidance and as a result they are not indexed to the Company’s own stock and must be classified as liabilities. The warrants were measured at fair value at issuance and recorded as a liability and will be remeasured to fair value at each subsequent reporting date, with changes in fair value recorded in current earnings. The net proceeds from the Private Placement were allocated first to the warrants at fair value, with the residual amount recorded as common stock at par value. The Company will continue to classify such warrants as liabilities until they are exercised, expire, or are no longer required to be classified as liabilities.

In December 2022, in a registered direct equity offering to certain institutional and accredited investors, including GMS Ventures, the Company issued 1,423,041 shares of common stock at a purchase price per share of $17.568 for $23,208,679 in net proceeds after payment of placement agent fees and other offering costs. GMS Ventures purchased an aggregate of 711,520 shares of common stock in the registered direct equity offering. In connection with the registered direct equity offering, the Company issued to M.S. Howells & Co., the placement agent, warrants to purchase up to an aggregate of 25,787 shares of common stock at an exercise price of $21.00 per share, which warrants have a three-year term.

Each share of common stock entitles the holder to one vote on all matters submitted to a vote of the Company’s stockholders. Subject to preferences that may apply to any outstanding preferred stock, holders of common stock are entitled to receive ratably any dividends that the Company’s board of directors may declare out of funds legally available for that purpose on a non-cumulative basis. No dividends had been declared through September 30, 2024.

H.C. Wainwright & Co. At-the-Market Offering Agreement

On March 26, 2021, the Company entered into an At-the-Market Offering Agreement with H.C. Wainwright & Co., as sales agent (“Wainwright”), (the “Wainwright ATM Agreement” or the “Wainwright ATM Offering”), under which the Company may issue and sell shares of its common stock from time to time through Wainwright as sales agent. The Company filed a prospectus supplement, dated March 26, 2021, with the Securities and Exchange Commission pursuant to which the Company may offer and sell shares of common stock having an aggregate offering price of up to up to $40,000,000 from time to time through Wainwright. The Company incurred financing costs of $197,654 which were

capitalized and were being reclassified to additional paid in capital on a pro rata basis when the Company sold common stock under the Wainwright ATM Offering.

Under the Wainwright ATM Offering, the Company paid Wainwright a commission equal to 3.0% of the aggregate gross proceeds of any sales of common stock under the Wainwright ATM Agreement. The Company terminated the Wainwright ATM Agreement effective May 15, 2023. As a result, the Company wrote off unamortized deferred costs under the Wainwright ATM Agreement. During the year ended September 30, 2023, the Company sold 44,769 shares of common stock under the Wainwright ATM Offering and generated $1,089,105 in net proceeds after paying fees to Wainwright of $38,799.

BTIG, LLC At-the-Market Offering Agreement

On May 16, 2023, the Company entered into an At-the-Market Sales Agreement with BTIG, LLC (“BTIG”), as sales agent (the “BTIG ATM Agreement” or the “BTIG ATM Offering”), under which the Company may issue and sell shares of its common stock having an aggregate offering price of up to $100,000,000 from time to time through BTIG. The Company incurred financing costs of $353,688, which were capitalized and are being reclassified to additional paid in capital on a pro rata basis when the Company sells common stock under the BTIG ATM Offering. As of September 30, 2024, $331,512 of such deferred costs are included in other assets on the consolidated balance sheets.

Under the BTIG ATM Agreement, the Company pays BTIG a commission equal to 3.0% of the aggregate gross proceeds of any sales of common stock under the BTIG ATM Agreement. The offering of common stock pursuant to the BTIG ATM Agreement will terminate upon the earlier of (i) the sale of all common stock subject to the BTIG ATM Agreement or (ii) termination of the BTIG ATM Agreement in accordance with its terms.

During the year ended September 30, 2024, no shares of common stock were sold under the BTIG ATM Offering. During the year ended September 30, 2023, the Company sold 178,911 shares of common stock under the BTIG ATM Offering and generated $6,080,088 in net proceeds after paying fees to BTIG and other issuance costs of $188,044.

Common stock warrants

As of September 30, 2024, the Company had the following warrants outstanding to acquire shares of its common stock:


		Shares of
		common stock
		issuable upon
		exercise of	Exercise Price
Expiration Date		warrants	Per Share
December 22, 2024	(i)	13,850	$	240.00
February 24, 2025		8,642	$	25.40
April 13, 2025	(i)	7,284	$	240.00
May 31, 2025	(i)	3,121	$	240.00
June 22, 2025		9,563	$	30.38
December 28, 2025		25,787	$	21.00
January 28, 2026		12,576	$	25.00
February 2, 2026		93,238	$	25.00
November 23, 2026		104,999	$	31.25
March 18, 2029	(ii)	12,857,133	$	7.70
April 15, 2029	(ii)	1,071,429	$	7.70
		14,207,622

(i)

(ii)

- Definition

The entire disclosure for equity.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481112/505-10-50-13

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
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-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481112/505-10-50-13

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477968/946-235-50-2

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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-Paragraph 2
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-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477968/946-235-50-2

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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-Publisher FASB
-URI https://asc.fasb.org/1943274/2147478448/946-505-50-6

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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Reference 11: http://www.xbrl.org/2003/role/disclosureRef
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Reference 13: http://www.xbrl.org/2003/role/disclosureRef
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Reference 18: http://www.xbrl.org/2003/role/disclosureRef
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Reference 19: http://www.xbrl.org/2003/role/disclosureRef
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-Publisher FASB
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+ Details

Income Taxes (Tables)

12 Months Ended

Sep. 30, 2024

Income Taxes

Schedule of Income tax expense

Schedule of tax expense reconciliation


	Year ended September 30,
	2024		2023
U.S. federal statutory rate	(21.0)	%	(21.0)	%
State taxes, net of federal benefit	(6.2)		(7.3)
Deferred true-up	0.2		0.1
Permanent differences	2.5		(0.7)
Foreign tax credits	1.7		1.3
Research and development credit	(2.4)		(1.3)
Change in valuation allowance	25.3		29.0
Other	(0.1)		(0.1)
Effective income tax rate	0.0	%	0.0	%

Schedule of deferred taxes


	September 30,
	2024		2023
Deferred tax assets:
Net operating loss carryforwards	$	102,906,140	$	92,961,718
Capitalized research and development costs		15,200,918		6,531,508
Stock-based compensation		6,463,068		5,066,375
Lease liability		83,720		—
Research and development credit carryforward		13,748,600		11,953,956
Foreign tax credits		290,188		1,562,639
Accruals and others		144,079		1,656,239
Gross deferred tax assets		138,836,713		119,732,435
Less: valuation allowance		(138,759,510)		(119,725,078)
		77,203		7,357
Deferred tax liabilities:
Property and equipment		—		—
Right-of-use assets		(77,203)		(7,357)
Net deferred tax assets	$	—	$	—

Schedule of reconciliation of unrecognized tax benefits


	Year ended September 30,
	2024		2023
Balance at beginning of year	$	1,856,629	$	1,856,629
Changes based on tax positions related to the current year		—		—
Balance at end of year	$	1,856,629	$	1,856,629

Preferred Stock (Details) - shares	Sep. 30, 2024	May 13, 2024	Sep. 30, 2023
Preferred Stock.
Preferred stock, shares outstanding	0	0	0
Preferred stock, shares authorized	10,000,000		10,000,000

Consolidated Balance Sheets (Parentheticals) - $ / shares	Sep. 30, 2024	Sep. 30, 2023
Consolidated Balance Sheets
Preferred stock, par value per share (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value per share (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	60,000,000	60,000,000
Common stock, shares issued	23,905,635	13,012,833
Common stock, shares outstanding	23,905,635	13,012,833

Consolidated Balance Sheets - USD ($)	Sep. 30, 2024	Sep. 30, 2023
Current assets:
Cash and cash equivalents	$ 14,927,538	$ 23,391,982
Prepaid expenses and other current assets	12,488,498	7,587,216
Total current assets	27,416,036	30,979,198
Operating lease right-of-use assets, net	274,645	26,172
Equity method investment	693,190	793,932
Other assets	439,283	501,299
Total assets	28,823,154	32,300,601
Current liabilities:
Unsecured convertible promissory note	29,440,000	35,551,000
Finance lease liabilities		4,267
Current portion of operating lease liabilities	50,907
Accounts payable	7,968,725	6,574,523
Accrued expenses	3,237,468	2,745,740
Income taxes payable	1,856,629	1,856,629
Total current liabilities	42,553,729	46,732,159
Operating lease liabilities	246,922
Warrant liability	59,099,013	6,219
Total liabilities	101,899,664	46,738,378
Commitments and contingencies (Note 8)
Stockholders' deficit:
Preferred stock, par value $0.01 per share: 10,000,000 shares authorized, no shares issued and outstanding
Common stock, par value $0.01 per share; 60,000,000 shares authorized; 23,905,635 and 13,012,833 shares issued and outstanding at September 30, 2024 and September 30, 2023, respectively	239,057	130,128
Additional paid-in capital	469,969,333	453,350,281
Accumulated deficit	(543,284,900)	(467,918,186)
Total stockholders' deficit	(73,076,510)	(14,437,777)
Total liabilities and stockholders' deficit	$ 28,823,154	$ 32,300,601

Collaboration Arrangements

12 Months Ended

Sep. 30, 2024

Collaboration Arrangements

Collaboration Arrangements

12. Collaboration Arrangements

Syntone Strategic Partnership and PRC Joint Venture

In connection with a stock purchase agreement entered in May 2020 between the Company and Syntone, the Company and Syntone entered into a joint venture agreement pursuant to which they agreed to form a PRC joint venture that will be 80% owned by Syntone and 20% owned by the Company. Upon formation of the PRC joint venture in April 2021, the Company entered into a royalty-free license with the PRC joint venture for the development, commercialization and manufacture of ONS-5010/LYTENAVA in the greater China market, which includes Hong Kong, Taiwan and Macau.

The Company made the initial investment of $900,000 in June 2020. The Company is committed to making up to $2,100,000 in additional capital contributions to the PRC joint venture, based upon the development plan contemplated in the license agreement or on such other terms.

Stock-Based Compensation - Option activity (Details) - USD ($)	12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Weighted Average Remaining Contractual Term (Years)
Stock-based compensation expense	$ 5,385,124	$ 5,547,019
Employee Stock Option
Number of Shares
Balance, Beginning (in shares)	1,197,774
Granted (in shares)	817,729
Forfeited (in shares)	(59,212)
Expired (in shares)	(9,645)
Balance, Ending (in shares)	1,946,646	1,197,774
Vested and exercisable (in shares)	1,006,079
Weighted Average Exercise Price
Balance, Beginning (in dollars per share)	$ 28.72
Granted (in dollars per share)	6.69
Forfeited (in dollars per share)	26.27
Expired (in dollars per share)	34.5
Balance, Ending (in dollars per share)	19.51	$ 28.72
Vested and exercisable (in dollars per share)	$ 26.84
Weighted Average Remaining Contractual Term (Years)
Balance-Remaining contractual term	7 years 8 months 12 days
Vested and exercisable -Remaining contractual term	6 years 6 months
Aggregate intrinsic value, Outstanding	$ 53,985
Aggregate intrinsic value, Vested and exercisable	$ 53,985
Grant date fair value of options (in dollars per share)	$ 6.04	$ 19.4
Performance-based stock options
Number of Shares
Balance, Beginning (in shares)	35,000
Granted (in shares)	634,000
Forfeited (in shares)	(2,500)
Balance, Ending (in shares)	666,500	35,000
Vested and exercisable (in shares)	35,000
Weighted Average Exercise Price
Balance, Beginning (in dollars per share)	$ 28.8
Granted (in dollars per share)	6.78
Forfeited (in dollars per share)	6.78
Balance, Ending (in dollars per share)	7.94	$ 28.8
Vested and exercisable (in dollars per share)	$ 28.8
Weighted Average Remaining Contractual Term (Years)
Balance-Remaining contractual term	9 years 3 months 18 days
Vested and exercisable -Remaining contractual term	6 years 3 months 18 days
Grant date fair value of options (in dollars per share)	$ 6.52	$ 18.2
Stock-based compensation expense	$ 0

Debt (Tables)

12 Months Ended

Sep. 30, 2024

Debt

Schedule of debt


	September 30,
	2024		2023
Unsecured convertible promissory note (measured at fair value)	$	29,440,000	$	35,551,000
Less: current portion		(29,440,000)		(35,551,000)
Long-term debt	$	—	$	—

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
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Reference 2: http://www.xbrl.org/2003/role/exampleRef
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Reference 4: http://www.xbrl.org/2009/role/commonPracticeRef
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+ Details

Commitments and Contingencies (Details)	Sep. 30, 2024 USD ($)
Selexis
Commitments
Remaining future financial obligations	$ 332,779

Fair Value Measurements (Tables)

12 Months Ended

Sep. 30, 2024

Fair value

Schedule of assets and liabilities measured at fair value


	September 30, 2024
	(Level 1)		(Level 2)		(Level 3)
Liabilities
Unsecured convertible promissory note	$	—	$	—	$	29,440,000
Warrant liability		—		—		59,099,013
Total	$	—	$	—	$	88,539,013

	September 30, 2023
	(Level 1)		(Level 2)		(Level 3)
Liabilities
Unsecured convertible promissory note	$	—	$	—	$	35,551,000
Warrant liability		—		—		6,219
Total	$	—	$	—	$	35,557,219

Schedule of changes in the fair value of Level 3 liabilities


	Unsecured Convertible
	Promissory Note		Warrants
Balance at October 1, 2022	$	—	$	57,138
Fair value at issuance		31,820,000		—
Accrued interest converted to common stock		(25,000)		—
Change in fair value		3,756,000		(50,919)
Balance at September 30, 2023		35,551,000		6,219
Issued in connection with sale of common stock		—		97,730,836
Promissory note maturity extension fee added to outstanding balance		2,681,847		—
Principal and accrued interest converted to common stock		(11,250,000)		—
Change in fair value		2,457,153		(38,638,042)
Balance at September 30, 2024	$	29,440,000	$	59,099,013

December 2022 Note

Fair value

Schedule of fair value inputs


	September 30,
	2024			2023
Term (years)		0.8			0.3
Volatility		91.0	%		71.0	%
Risk-free rate		4.2	%		5.5	%
Dividend yield		—	%		—	%
Credit-adjusted discount rate		20.4	%		22.8	%
Stock price	$	5.34		$	4.40

Common stock warrants

Fair value

Schedule of fair value inputs


	September 30,
	2024			2023
Risk-free interest rate		3.58	%		5.30	%
Remaining contractual term of warrants (years)		4.5			1.4
Expected volatility		125.0	%		158.3	%
Annual dividend yield		—	%		—	%
Fair value of common stock (per share)	$	5.34		$	4.40

Stock-Based Compensation - Option Assumptions (Details) - USD ($)	12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Employee Stock Option
Share-based Compensation
Risk-free interest rate	4.30%	3.70%
Expected term (years)	6 years	5 years 10 months 24 days
Expected volatility	131.40%	111.60%
Expected dividend yield	0.00%
Unrecognized compensation expense	$ 7,508,106
Unrecognized compensation exercise period	1 year 3 months 18 days
Performance-based stock options
Share-based Compensation
Risk-free interest rate	4.30%	3.80%
Expected term (years)	10 years	10 years
Expected volatility	125.60%	91.30%

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

+ Details

Income Taxes - Reconciliation (Details)	12 Months Ended
Income Taxes - Reconciliation (Details)	Sep. 30, 2024	Sep. 30, 2023
Reconciliation of income taxes (as a percent)
U.S. federal statutory rate	(21.00%)	(21.00%)
State taxes, net of federal benefit	(6.20%)	(7.30%)
Deferred true-up	0.20%	0.10%
Permanent differences	2.50%	(0.70%)
Foreign tax credits	1.70%	1.30%
Research and development credit	(2.40%)	(1.30%)
Change in valuation allowance	25.30%	29.00%
Other	(0.10%)	(0.10%)
Effective income tax rate	0.00%	0.00%

Income Taxes

12 Months Ended

Sep. 30, 2024

Income Taxes

Income Taxes

13. Income Taxes

Income tax benefit for the years ended September 30, 2024 and 2023 consists of the following:

A reconciliation of income tax expense (benefit) at the statutory federal income tax rate and income taxes as reflected in the financial statements is as follows:


	Year ended September 30,
	2024		2023
U.S. federal statutory rate	(21.0)	%	(21.0)	%
State taxes, net of federal benefit	(6.2)		(7.3)
Deferred true-up	0.2		0.1
Permanent differences	2.5		(0.7)
Foreign tax credits	1.7		1.3
Research and development credit	(2.4)		(1.3)
Change in valuation allowance	25.3		29.0
Other	(0.1)		(0.1)
Effective income tax rate	0.0	%	0.0	%

The tax effects of the temporary differences that gave rise to deferred taxes were as follows:


	September 30,
	2024		2023
Deferred tax assets:
Net operating loss carryforwards	$	102,906,140	$	92,961,718
Capitalized research and development costs		15,200,918		6,531,508
Stock-based compensation		6,463,068		5,066,375
Lease liability		83,720		—
Research and development credit carryforward		13,748,600		11,953,956
Foreign tax credits		290,188		1,562,639
Accruals and others		144,079		1,656,239
Gross deferred tax assets		138,836,713		119,732,435
Less: valuation allowance		(138,759,510)		(119,725,078)
		77,203		7,357
Deferred tax liabilities:
Property and equipment		—		—
Right-of-use assets		(77,203)		(7,357)
Net deferred tax assets	$	—	$	—

As of September 30, 2024, the Company had approximately $406.7 million and $242.5 million of U.S. federal and New Jersey NOLs that will begin to expire in 2030 and 2039, respectively. As of September 30, 2024, the Company had federal and state research and development tax credit carryforwards of $13.0 million and $0.8 million, respectively, available to reduce future tax liabilities which will begin to expire in 2032 and 2033, respectively. As of September 30, 2024, the Company has federal foreign tax credit (“FTC”) carryforwards of $0.3 million available to reduce future tax liabilities which began to expire starting in 2023, of which $0.3 million of the FTC carryforward is included in the balance of unrecognized tax benefits. Realization of the deferred tax asset is contingent on future taxable income and based upon the level of historical losses, management has concluded that the deferred tax asset does not meet the more-likely-than-not threshold for realizability. Accordingly, a full valuation allowance continues to be recorded against the Company’s deferred tax assets as of September 30, 2024 and 2023. The valuation allowance increased by $19.0 million and $17.1 million during the year ended September 30, 2024 and 2023, respectively.

When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that the benefit will more likely-than-not be realized. The determination as to whether the tax benefit will more-likely-than-not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances. The Company recognizes interest and penalties accrued on any unrecognized tax benefits within the provision for income taxes in its consolidated statements of operations.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:


	Year ended September 30,
	2024		2023
Balance at beginning of year	$	1,856,629	$	1,856,629
Changes based on tax positions related to the current year		—		—
Balance at end of year	$	1,856,629	$	1,856,629

The Company does not anticipate material change in the unrecognized tax benefits in the next 12 months. These unrecognized tax benefits, if recognized, would affect the annual effective tax rate. The Company’s income tax returns for the years from 2011 through 2023 remain open for examination by the Internal Revenue Service as well as various states and municipalities.

Due to the change in ownership provisions of the Code, the availability of the Company’s NOL carryforwards may be subject to annual limitations against taxable income in future periods, which could substantially limit the eventual utilization of such carryforwards. The Company has not analyzed the historical or potential impact of its equity financings

on beneficial ownership and therefore no determination has been made whether the net operating loss carry forward is subject to any Code Section 382 limitation. To the extent there is a limitation, there would be a reduction in the deferred tax assets with an offsetting reduction in the valuation allowance.

- Definition

The entire disclosure for income tax.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482685/740-10-50-12

Reference 2: http://www.xbrl.org/2003/role/exampleRef
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
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-Publisher FASB
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+ Details

Commitments and Contingencies - Employee Benefit (Details) - USD ($)	12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Commitments and Contingencies.
Maximum employee annual contributions (as a percent)	100.00%
Maximum employer annual contributions (as a percent)	100.00%
Maximum employer match (as a percent)	3.00%
Expense related to matching contribution	$ 177,309	$ 136,914

Income Taxes - Carryforwards (Details) - USD ($)	12 Months Ended
Income Taxes - Carryforwards (Details) - USD ($)	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2022
Carryforwards
Increase (decrease) in valuation allowance	$ 19,000,000	$ 17,100,000
Unrecognized tax benefits	1,856,629	$ 1,856,629	$ 1,856,629
Federal
Carryforwards
NOL carryforwards	406,700,000
Tax credit carryforward	13,000,000
State
Carryforwards
NOL carryforwards	242,500,000
Tax credit carryforward	800,000
Foreign
Carryforwards
Tax credit carryforward	300,000
Unrecognized tax benefits	$ 300,000

Accrued Expenses (Tables)

12 Months Ended

Sep. 30, 2024

Accrued Expenses

Schedule of accrued expenses


	September 30,
	2024		2023
Compensation	$	1,012,962	$	919,970
Professional fees		1,798,767		165,192
Research and development		41,373		1,234,192
Other accrued expenses		384,366		426,386
	$	3,237,468	$	2,745,740

Subsequent Events (Details) - Subsequent Events	Dec. 10, 2024 USD ($)
Subsequent Events
Positions eliminated	5
Positions eliminated (as a percent)	23.00%
Estimated restructuring charges	$ 336,000

Stockholders' Equity - Common Stock (Details) - USD ($)					1 Months Ended	12 Months Ended
Stockholders' Equity - Common Stock (Details) - USD ($)	Apr. 15, 2024	Mar. 18, 2024	May 16, 2023	Mar. 26, 2021	Dec. 31, 2022	Sep. 30, 2024	Sep. 30, 2023	Mar. 07, 2024	Mar. 06, 2024
Common Stock and Stockholders' Equity
Common stock, shares authorized						60,000,000	60,000,000	60,000,000	21,250,000
Common stock issued (in shares)	714,286	8,571,423
Common stock issuable on exercise of warrants (in shares)	1,071,429	12,857,133				14,207,622
Shares issued price (in dollars per share)		$ 7
Common stock issuable by each warrants (in shares)		1.5
Proceeds from issuance of stock	$ 4,835,371	$ 55,498,311				$ 60,333,681	$ 30,024,213
Exercise price per share	$ 7.7	$ 7.7
Common stock voting rights						one
Dividends						$ 0
Warrants related expenses						$ 37,490,012
GMS Ventures & Investments
Common Stock and Stockholders' Equity
Common stock issued (in shares)		2,305,714
Common stock issuable on exercise of warrants (in shares)		3,458,571
Direct registered offering
Common Stock and Stockholders' Equity
Common stock issued (in shares)					1,423,041
Shares issued price (in dollars per share)					$ 17.568
Proceeds from issuance of stock					$ 23,208,679
Direct registered offering \| GMS Ventures & Investments
Common Stock and Stockholders' Equity
Common stock issued (in shares)					711,520
Underwriter
Common Stock and Stockholders' Equity
Common stock issuable on exercise of warrants (in shares)					25,787
Exercise price per share					$ 21
Warrants exercise term					3 years
Wainwright ATM offering
Common Stock and Stockholders' Equity
Common stock issued (in shares)							44,769
Proceeds from issuance of stock							$ 1,089,105
Aggregate maximum offering price				$ 40,000,000
Amount reclassified on additional paid in capital				$ 197,654
Payment of fees to sales agent							$ 38,799
Common stock sale commission (as a percent)				3.00%
BTIG ATM
Common Stock and Stockholders' Equity
Common stock issued (in shares)						0	178,911
Proceeds from issuance of stock							$ 6,080,088
Aggregate maximum offering price			$ 100,000,000
Amount reclassified on additional paid in capital			$ 353,688
Payment of fees to sales agent							$ 188,044
Deferred costs						$ 331,512
Common stock sale commission (as a percent)			3.00%

Liquidity (Details) - USD ($)			2 Months Ended	12 Months Ended
Liquidity (Details) - USD ($)	Apr. 15, 2024	Mar. 18, 2024	Dec. 31, 2024	Sep. 30, 2024	Sep. 30, 2023
Accumulated deficit				$ 543,284,900	$ 467,918,186
Debt, interest, fees				31,352,857
Common stock issued (in shares)	714,286	8,571,423
Proceeds from issuance of stock	$ 4,835,371	$ 55,498,311		$ 60,333,681	$ 30,024,213
Subsequent Events
Common stock issued (in shares)			1,000,000
Proceeds from issuance of stock			$ 1,742,343
Payment of fees to sales agent			$ 53,918
BTIG ATM
Common stock issued (in shares)				0	178,911
Proceeds from issuance of stock					$ 6,080,088
Payment of fees to sales agent					$ 188,044

- Definition

Fair value portion of debt instrument payable, including, but not limited to, notes payable and loans payable.

+ References

Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2E
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-URI https://asc.fasb.org/1943274/2147482907/825-10-50-10

+ Details

- Definition

Amount of accumulated undistributed earnings (deficit).

+ References + Details

Consolidated Statements of Stockholders' Equity (Deficit) - USD ($)	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Total
Balance, beginning at Sep. 30, 2022	$ 113,655	$ 417,558,434	$ (408,935,518)	$ 8,736,571
Balance, beginning (in shares) at Sep. 30, 2022	11,365,486
Increase (Decrease) in Stockholders' Equity
Sale of common stock, net of issuance costs	$ 16,467	30,219,834		30,236,301
Sale of common stock, net of issuance costs (in shares)	1,646,722
Issuance of common stock in connection with conversion of convertible promissory note	$ 6	24,994		25,000
Issuance of common stock in connection with conversion of convertible promissory note (in shares)	625
Stock-based compensation expense		5,547,019		5,547,019
Net Income (Loss)			(58,982,668)	(58,982,668)
Balance, ending at Sep. 30, 2023	$ 130,128	453,350,281	(467,918,186)	(14,437,777)
Balance, ending (in shares) at Sep. 30, 2023	13,012,833
Increase (Decrease) in Stockholders' Equity
Sale of common stock, net of issuance costs	$ 92,857			92,857
Sale of common stock, net of issuance costs (in shares)	9,285,709
Issuance of common stock in connection with conversion of convertible promissory note	$ 16,072	11,233,928		11,250,000
Issuance of common stock in connection with conversion of convertible promissory note (in shares)	1,607,093
Stock-based compensation expense		5,385,124		5,385,124
Net Income (Loss)			(75,366,714)	(75,366,714)
Balance, ending at Sep. 30, 2024	$ 239,057	$ 469,969,333	$ (543,284,900)	$ (73,076,510)
Balance, ending (in shares) at Sep. 30, 2024	23,905,635

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

+ Details

- Definition

Equity impact of the value of new stock issued during the period. Includes shares issued in an initial public offering or a secondary public offering.

+ References + Details

- Definition

Amount of equity (deficit) attributable to parent. Excludes temporary equity and equity attributable to noncontrolling interest.

+ References

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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://www.xbrl.org/2009/role/commonPracticeRef
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-Name Accounting Standards Codification
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-Paragraph 3
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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Reference 12: http://www.xbrl.org/2009/role/commonPracticeRef
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Reference 13: http://www.xbrl.org/2009/role/commonPracticeRef
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-Name Accounting Standards Codification
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-Name Accounting Standards Codification
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-Paragraph 2
-Subparagraph (SAB Topic 4.E)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480418/310-10-S99-2

+ Details

Commitments and Contingencies - Lease cost (Details) - USD ($)	12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Mar. 31, 2024	Mar. 31, 2021
Leases
Operating lease term			5 years	3 years
Lease cost
Interest on lease liabilities	$ 116	$ 1,399
Total finance lease cost	116	1,399
Operating lease cost	57,973	44,867
Total lease cost	$ 58,089	$ 46,266
Minimum
Leases
Finance lease term	12 months
Finance lease interest (as a percent)	4.00%
Maximum
Leases
Finance lease term	36 months
Finance lease interest (as a percent)	13.00%

Income Taxes - Unrecognized benefits (Details) - USD ($)	12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Unrecognized tax benefits
Balance at beginning of year	$ 1,856,629	$ 1,856,629
Changes based on tax positions related to the current year	0	0
Balance at end of year	$ 1,856,629	$ 1,856,629

Debt - Information (Details)				1 Months Ended	12 Months Ended
Debt - Information (Details)	Jan. 22, 2024 USD ($) $ / shares	Dec. 22, 2022 USD ($) D $ / shares	Nov. 16, 2021 USD ($)	Dec. 31, 2023 USD ($)	Sep. 30, 2024 USD ($) shares	Sep. 30, 2023 USD ($)
Debt
Proceeds from loan						$ 30,000,000
Carrying value of notes exchanged					$ 11,250,000	25,000
Interest expense					3,156,964	2,531,228
Payment of lender fees						823,894
Interest paid						1,158,609
Loss on extinguishment of debt						(577,659)
December 2022 Note
Debt
Original principal amount		$ 31,820,000
Debt issuance costs	$ 2,681,847	1,820,000		$ 475,000		1,820,000
Proceeds from loan		$ 18,052,461
Interest rate (as a percent)				9.50%
Stock trigger price (in dollars per share) \| $ / shares		$ 50
Trading day threshold \| D		30
Additional fee cash payments (as a percent)		7.50%
Increase in debt balance for a Major Trigger Event (as a percent)		10.00%
Increase in debt balance for a Minor Trigger Event (as a percent)		5.00%
Threshold trading days for Trigger Event cure		10 days
Default interest rate (as a percent)		22.00%
Debt conversion rate (in dollars per share) \| $ / shares		$ 40
Conversion notice threshold (in dollars per share) \| $ / shares		$ 3.51
Participation right in future financing (as a percent)		10.00%
Extension fee based on balance (as a percent)	7.50%
Variable rate (as a percent)	3.00%
Debt Instrument, Variable Interest Rate, Type [Extensible Enumeration]	us-gaap:PrimeRateMember
Quarterly payment	$ 3,000,000
Carrying value of notes exchanged					$ 11,250,000
Shares converted \| shares					1,607,093
Interest expense					$ 3,156,847	2,074,964
Payment of lender fees						$ 254,964
December 2022 Note \| Major Trigger Event
Debt
Trading day threshold \| D		3
Stock price trigger threshold (as a percent)		90.00%
Debt conversion rate (in dollars per share) \| $ / shares		$ 40
December 2022 Note \| Scenario one
Debt
Original principal amount	$ 15,000,000
Debt conversion rate (in dollars per share) \| $ / shares	$ 7
December 2022 Note \| Scenario two
Debt
Debt conversion rate (in dollars per share) \| $ / shares	$ 40
December 2022 Note \| Minimum
Debt
Total interest rate (as a percent)	9.50%
November 2021 Note
Debt
Original principal amount			$ 10,220,000
Debt issuance costs			820,000
Proceeds from loan			$ 10,000,000
Interest rate (as a percent)			9.50%
Interest expense					454,866
Redemption price (as a percent)		105.00%	105.00%
Repayments of unsecured debt		$ 11,947,539
Interest paid		1,158,609
Loss on extinguishment of debt		(577,659)
Amortization of debt issuance costs		8,729			$ 190,775
Prepayment fee		$ 568,930

Fair Value Measurements (Details) - USD ($)	Sep. 30, 2024	Sep. 30, 2023
Liabilities
Derivative Liability, Statement of Financial Position [Extensible Enumeration]	Warrants and Rights Outstanding	Warrants and Rights Outstanding
Recurring \| Level 3
Liabilities
Unsecured convertible promissory note	$ 29,440,000	$ 35,551,000
Warrant liability	59,099,013	6,219
Total	$ 88,539,013	$ 35,557,219

- Definition

Fair value, after the effects of master netting arrangements, of a financial liability or contract with one or more underlyings, notional amount or payment provision or both, and the contract can be net settled by means outside the contract or delivery of an asset. Includes liabilities not subject to a master netting arrangement and not elected to be offset.

+ References

Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (bbb)(2)(i)
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-URI https://asc.fasb.org/1943274/2147482106/820-10-50-2

Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 820
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Reference 3: http://www.xbrl.org/2009/role/commonPracticeRef
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org/1943274/2147478795/946-210-50-6

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
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-Publisher FASB
-URI https://asc.fasb.org/1943274/2147478795/946-210-50-6

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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Reference 11: http://www.xbrl.org/2003/role/disclosureRef
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Reference 12: http://www.xbrl.org/2003/role/disclosureRef
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Reference 13: http://www.xbrl.org/2003/role/disclosureRef
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Reference 14: http://www.xbrl.org/2003/role/disclosureRef
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Reference 15: http://www.xbrl.org/2003/role/disclosureRef
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Reference 16: http://www.xbrl.org/2009/role/commonPracticeRef
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Reference 17: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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Reference 18: http://www.xbrl.org/2003/role/disclosureRef
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Reference 19: http://www.xbrl.org/2003/role/disclosureRef
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Reference 20: http://www.xbrl.org/2003/role/disclosureRef
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Reference 21: http://www.xbrl.org/2003/role/disclosureRef
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Reference 22: http://www.xbrl.org/2003/role/disclosureRef
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Reference 23: http://www.xbrl.org/2003/role/disclosureRef
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Reference 24: http://www.xbrl.org/2003/role/disclosureRef
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Reference 25: http://www.xbrl.org/2003/role/disclosureRef
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Reference 26: http://www.xbrl.org/2003/role/disclosureRef
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Reference 27: http://www.xbrl.org/2003/role/disclosureRef
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Reference 28: http://www.xbrl.org/2003/role/exampleRef
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Reference 29: http://www.xbrl.org/2003/role/disclosureRef
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Reference 30: http://www.xbrl.org/2003/role/disclosureRef
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-Section 50
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-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482907/825-10-50-10

+ Details

Commitments and Contingencies - Minimum lease payments (Details) - USD ($)	Sep. 30, 2024	Sep. 30, 2023
Operating leases
2025	$ 78,091
2026	79,954
2027	81,817
2028	83,680
2029	49,447
Total undiscounted lease payments	372,989
Less: Imputed interest	75,160
Total lease obligations	$ 297,829
Finance leases
Total lease obligations		$ 4,267

Stock-Based Compensation - Expense (Details) - USD ($)	12 Months Ended
Stock-Based Compensation - Expense (Details) - USD ($)	Sep. 30, 2024	Sep. 30, 2023
Share-based Compensation
Stock-based compensation expense	$ 5,385,124	$ 5,547,019
Research and development
Share-based Compensation
Stock-based compensation expense	800,956	986,598
General and administrative
Share-based Compensation
Stock-based compensation expense	$ 4,584,168	$ 4,560,421

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

+ Details

Debt

12 Months Ended

Sep. 30, 2024

Debt

Debt

7. Debt

Debt consists of:


	September 30,
	2024		2023
Unsecured convertible promissory note (measured at fair value)	$	29,440,000	$	35,551,000
Less: current portion		(29,440,000)		(35,551,000)
Long-term debt	$	—	$	—

December 2022 Note

On December 22, 2022, the Company entered into a Securities Purchase Agreement and issued the December 2022 Note with a face amount of $31,820,000 to Streeterville Capital, LLC (the “Lender”), the holder of the Company’s unsecured promissory note issued in November 2021 (the “November 2021 Note”). The December 2022 Note has an original issue discount of $1,820,000. The Company received net proceeds of $18,052,461 upon the closing on December 28, 2022 after deducting the Lender’s transaction costs in connection with the issuance and a full payment of the remaining outstanding principal and accrued interest on the November 2021 Note. The November 2021 Note was cancelled upon repayment. See below for additional disclosures relating to the November 2021 Note.

In December 2023, the Company extended the maturity of the December 2022 Note from January 1, 2024 to April 1, 2024. The Company incurred a $475,000 extension fee. The December 2022 Note bore interest at 9.5% per annum through April 1, 2024.

The December 2022 Note contains customary covenants, including a restriction on the Company’s ability to pledge certain of the Company’s assets, subject to certain exceptions, without the Lender’s consent. Beginning on April 1, 2023, the Lender had the right to convert the December 2022 Note at the Conversion Price (as defined below). The principal amount and conversion price of the December 2022 Note were subject to adjustment upon certain triggering events. In addition, the Company had the right to convert all or any portion of the outstanding balance under the December 2022 Note into shares of common stock at the Conversion Price if certain conditions have been met at the time of conversion, including if at any time after the six-month anniversary of the closing date, the daily volume-weighted average price of the common stock on Nasdaq equals or exceeds $50.00 per share (subject to adjustments for stock splits and stock combinations) for a period of 30 consecutive trading days. Payments may be made by the Company (i) in cash, (ii) in shares of common stock, with the number of shares being equal to the portion of the applicable payment amount divided by the Conversion Price (as defined below), or (iii) a combination of cash and shares of common stock. Any payments made by the Company in cash, including prepayments or repayment at maturity, will be subject to an additional fee of 7.5%. Upon the occurrence of certain events described in the December 2022 Note, including, among others, the Company’s failure to pay amounts due and payable under the December 2022 Note, events of insolvency or bankruptcy, failure to observe covenants contained in the Securities Purchase Agreement and the December 2022 Note, breaches of representations and warranties in the Securities Purchase Agreement, and the occurrence of certain transactions without the Lender’s consent (each such event, a “Trigger Event”), the Lender shall have the right, subject to certain exceptions, to increase the balance of the December 2022 Note by 10% for a Major Trigger Event (as defined in the December 2022 Note) and 5% for a Minor Trigger Event (as defined in the December 2022 Note). If a Trigger Event is not cured within ten (10) trading days of written notice thereof from the Lender, it will result in an event of default (such event, an “Event of Default”). Following an Event of Default, the Lender may accelerate the December 2022 Note such that all amounts thereunder become immediately due and payable, and interest shall accrue at a rate of 22% annually until paid. Prior to April 1, 2024, under the December 2022 Note, “Conversion Price” meant, prior to a Major Trigger Event, $40.00 per share (subject to adjustment for stock splits and stock combinations), and following a Major Trigger Event, the lesser of (i) $40.00 per share (subject to adjustment for stock splits and stock combinations), and (ii) 90% multiplied by the lowest closing bid price of the Company’s common stock in the three trading days prior to the date on which the conversion notice is delivered. If the Conversion Price is below $3.51 per share, the Company will be required to satisfy a conversion notice from the Lender in cash. Subject to certain exceptions, while the December 2022 Note is outstanding, the Lender will have a consent right on any future variable rate transactions or any debt and a 10% participation right in any future debt or equity financings.

On January 22, 2024, the Company entered into an amendment to the December 2022 Note (the “January 2024 Note Amendment”) with the Lender, which became effective on April 1, 2024 after satisfaction of certain conditions, including various required stockholder approvals and the closing of the private placement on March 18, 2024. The maturity of the December 2022 Note was extended to July 1, 2025. An extension fee of $2,681,847 (calculated as 7.5% of the outstanding balance of the December 2022 Note) was added to the outstanding balance on March 18, 2024. The extension fee was included in interest expense in the consolidated statement of operations for the year ended September 30, 2024.

Under the January 2024 Note Amendment, the initial conversion price with respect to $15,000,000 in aggregate principal amount of the December 2022 Note was changed to $7.00, the price per share in the private placement that closed on March 18, 2024 and the remaining aggregate principal amount has a conversion price of $40.00 per share. Effective April 1, 2024, the December 2022 Note bears interest at the prime rate (as published in the Wall Street Journal) plus 3% (subject to a floor of 9.5%) and the Company has an obligation to repay at least $3,000,000 of the outstanding balance of the December 2022 Note for each calendar quarter beginning with the second calendar quarter of 2024 (subject to adjustment for conversions by the Lender and to payment of an exit fee as set forth in the January 2024 Note Amendment) and continuing until the December 2022 Note is repaid in full.

During the year ended September 30, 2024, an aggregate of principal and accrued interest totaling $11,250,000 of the December 2022 Note was converted into 1,607,093 shares of the Company’s common stock.

The Company elected to account for the December 2022 Note at fair value (Note 4) and was not required to bifurcate the conversion option as a derivative and as a result the original issue discount of $1,820,000 and debt issuance costs were written off upon election to fair value and accounted for as interest. During the year ended September 30, 2024, the Company recognized $3,156,847 of interest expense related to extension fees. During the year ended September 30, 2023, the Company recognized $2,074,964 of interest expense related to original issue discount of $1,820,000 and other third party debt issuance costs of $254,964.

November 2021 Note

On November 16, 2021, the Company received $10,000,000 in net proceeds from the issuance of the November 2021 Note with a face amount of $10,220,000. Debt issuance costs totaling $820,000 were recorded as debt discount and were deducted from the principal in the accompanying consolidated balance sheets. The debt discount was amortized as a component of interest expense over the term of the underlying debt using the effective interest method. The note bore interest at a rate of 9.5% per annum compounding daily and was set to mature on January 1, 2023. The Company could prepay all or a portion of the note at any time by paying 105% of the outstanding balance elected for prepayment.

As discussed above, the November 2021 Note was cancelled using proceeds from the December 2022 Note issued to the same lender. The total repayment was $11,947,539, which represented 105% of the outstanding balance and included $1,158,609 of interest expense. The transaction has been accounted for as an extinguishment of the November 2021 Note. As a result, the Company recorded a loss on debt extinguishment of $577,659, which included $8,729 of unamortized debt discount, and prepayment fees of $568,930.

During the year ended September 30, 2023, the Company recognized $454,866 of interest expense related to the unsecured promissory note, of which $190,775 was related to the amortization of debt discount.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481544/470-10-50-6

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481544/470-10-50-6

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 405
-SubTopic 40
-Name Accounting Standards Codification
-Section 50
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-Subparagraph (d)
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+ Details

Preferred Stock

12 Months Ended

Sep. 30, 2024

Preferred Stock.

Preferred Stock

10. Preferred Stock

On May 13, 2024, the Company filed a Certificate of Elimination to its Certificate of Incorporation, as then amended, with the Secretary of State of the State of Delaware to eliminate from the Certificate of Incorporation all matters set forth in the Certificates of Designation filed with the Secretary of State of the State of Delaware on September 8, 2017 (with respect to its Series A Convertible Preferred Stock and the Series B Convertible Preferred Stock) and July 18, 2018, as amended on March 19, 2020 (with respect to its Series A-1 Convertible Preferred Stock) and returning each of the Series A Convertible Preferred Stock, Series B Convertible Preferred Stock and Series A-1 Convertible Preferred Stock to the status of authorized but unissued shares of preferred stock of the Company, without designation as to series. There were no outstanding shares of Series A Convertible Preferred Stock, Series B Convertible Preferred Stock or Series A-1 Convertible Preferred Stock as of May 13, 2024. Immediately following the filing of the Certificate of Elimination, the Company filed a Restated Certificate of Incorporation of the Company with the Secretary of State of the State of Delaware, which restates and integrates but does not further amend the Company’s Certificate of Incorporation, as then amended. The number of authorized shares of preferred stock under the Company’s Certificate of Incorporation is 10,000,000 shares.

Commitments and Contingencies

12 Months Ended

Sep. 30, 2024

Commitments and Contingencies.

Commitments and Contingencies

8. Commitments and Contingencies

Selexis Commercial License Agreements

In April 2013, the Company entered into commercial license agreements with Selexis for each of the ONS-3010, ONS-1045 and ONS-1050 biosimilar product candidates (which agreements were subsequently amended on May 21, 2014). Under the terms of each commercial license agreement, the Company acquired a non-exclusive worldwide license under the Selexis Technology to use the applicable Selexis expression technology along with the resulting Selexis

materials/cell lines, each developed under the research license, to manufacture and commercialize licensed and final products, with a limited right to sublicense.

The Company paid an upfront licensing fee to Selexis for each commercial license and also agreed to pay a fixed milestone payment for each licensed product. In addition, the Company is required to pay a low single-digit royalty on a final product-by-final product and country-by-country basis, based on worldwide net sales of such final products by the Company or any of the Company’s affiliates or sublicensees during the royalty term. The royalty term for each final product in each country is the period commencing from the first commercial sale of the applicable final product in the applicable country and ending on the expiration of the specified patent coverage. At any time during the term, the Company has the right to terminate its royalty payment obligation by providing written notice to Selexis and paying Selexis a royalty termination fee.

Each of the Company’s commercial agreements with Selexis will expire upon the expiration of all applicable Selexis patent rights. Either party may terminate the related agreement in the event of an uncured material breach by the other party or in the event the other party becomes subject to specified bankruptcy, winding up or similar circumstances. Either party may also terminate the related agreement under designated circumstances if the Selexis Technology infringes third-party intellectual property rights. In addition, the Company has the right to terminate each of the commercial agreements at any time at its convenience; however, with respect to the agreements relating to ONS-3010 and ONS-1045, this right is subject to the licensee’s consent pursuant to a corresponding letter the Company executed in conjunction with the standby agreement entered into between Selexis and Laboratories Liomont, S.A. de C.V. (“Liomont”) in November 2014.

The standby agreement permits Liomont to assume the license under the applicable commercial agreement for Mexico upon specified triggering events involving the Company’s bankruptcy, insolvency or similar circumstances.

Technology License

The Company entered into a technology license agreement with Selexis that will require milestone payments of $332,779 (based on an exchange rate on September 30, 2024 for converting Swiss Francs to U.S. dollars) to the licensor by the Company upon achievement of certain clinical milestones and pay a single digit royalty on net sales by the Company utilizing such technology. The Company also has the contractual right to buy out the royalty payments at a future date.

Litigation

On November 3, 2023, a securities class action lawsuit was filed against the Company and certain of its officers in the United States District Court for the District of New Jersey. The class action complaint alleges violations of the Securities Exchange Act of 1934, as amended, or the Exchange Act, in connection with allegedly false and misleading statements made by the Company related to the Company’s BLA during the period from August 3, 2021 through August 29, 2023. The complaint alleges, among other things, that the Company violated Sections 10(b) and 20(a) of the Exchange Act and SEC Rule 10b-5 by failing to disclose that there was an alleged lack of evidence supporting ONS-5010/LYTENAVA as a treatment for wet AMD and that the Company and/or their manufacturing partner had deficient CMC controls for ONS-5010/LYTENAVA, which remained unresolved at the time the Company’s BLA was re-submitted to the FDA and, as a result, the FDA was unlikely to approve the Company’s BLA, and that the Company’s stock price dropped when such information was disclosed. The plaintiffs in the class action complaint seek damages and interest, and an award of reasonable costs, including attorneys’ fees. Defendants’ motion to dismiss is currently pending before the court.

On October 10, 2024, certain of the company’s officers and directors were named as defendants in a shareholder derivative action filed in the District Court of the District of Delaware. The derivative complaint alleges that defendants breached their fiduciary duties by causing and/or allowing the Company to violate federal securities laws based on the same alleged misstatements as the securities class action. The derivative complaint also alleges defendants violated Section 14(a) of the Exchange Act, as well as claims for contribution, unjust enrichment, and waste of corporate assets. The derivative complaint seeks unspecified damages, corporate governance reforms, restitution, contribution, attorneys’ fees, and other costs.

The pending lawsuits and any other related lawsuits are subject to inherent uncertainties, and the actual defense and disposition costs will depend upon many unknown factors. The outcome of the pending lawsuits and any other related lawsuits is necessarily uncertain. The Company could be forced to expend significant resources in the defense of the pending lawsuits and any additional lawsuits, and the Company may not prevail. In addition, the Company may incur substantial legal fees and costs in connection with such lawsuits. The Company currently is not able to estimate the possible cost to it from these matters, as the pending lawsuits are currently at an early stage, and the Company cannot be certain how long it may take to resolve the pending lawsuits or the possible amount of any damages that the Company may be required to pay. Such amounts could be material to the Company’s financial statements if it does not prevail in the defense of the pending lawsuits and any other related lawsuits, or even if it does prevail. The Company has not established any reserve for any potential liability relating to the pending lawsuits and any other related lawsuits. It is possible that the Company could, in the future, incur judgments or enter into settlements of claims for monetary damages.

Leases

Corporate office

In March 2021, the Company entered into a three-year term corporate office lease in Iselin, New Jersey that ended on April 30, 2024.

In March 2024, the Company entered into a five-year term corporate office lease for its new corporate headquarters in Iselin, New Jersey that commenced on May 1, 2024.

Equipment leases

As of September 30, 2024, all equipment leases had expired. The Company had equipment leases with terms between 12 and 36 months and had recorded those leases as finance leases. The equipment leases bore interest between 4.0% and 13.0% per annum. Payments due under the lease contracts included minimum payments that the Company was obligated to make under the non-cancelable initial terms of the leases as the renewal terms were at the Company’s option. Lease expense was recorded as research and development or general and administrative based on the use of the leased asset.

The components of lease cost for the years ended September 30, 2024 and 2023 were as follows:


	Year ended September 30,
	2024		2023
Lease cost:
Interest on lease liabilities	$	116	$	1,399
Total finance lease cost		116		1,399
Operating lease cost		57,973		44,867
Total lease cost	$	58,089	$	46,266

Amounts reported in the consolidated balance sheets for leases where the Company is the lessee were as follows:


	September 30,
	2024		2023
Operating leases:
Right-of-use asset	$	274,645	$	26,172
Operating lease liabilities		297,829		—
Finance leases:
Right-of-use asset	$	—	$	—
Financing lease liabilities		—		4,267
Weighted-average remaining lease term (years):
Operating leases		4.6		0.6
Finance leases		—		0.3
Weighted-average discount rate:
Operating leases		9.9%		7.5%
Finance leases		—		13.0%

Other information related to leases for the years ended September 30, 2024 and 2023 are as follows:


	Year ended September 30,
	2024		2023
Cash paid for amounts included in the measurement of lease obligations:
Operating cash flows from finance leases	$	116	$	1,399
Operating cash flows from operating leases		14,514		27,675
Financing cash flows from finance leases		4,267		11,751
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	294,416	$	—

Future minimum payments under noncancelable leases at September 30, 2024 are as follows for the years ending September 30:


	Operating leases
2025	$	78,091
2026		79,954
2027		81,817
2028		83,680
2029		49,447
Total undiscounted lease payments		372,989
Less: Imputed interest		75,160
Total lease obligations	$	297,829

Employee Benefit Plan

The Company maintains a defined contribution 401(k) plan (the “Plan”) in which employees may contribute up to 100% of their salary and bonus, subject to statutory maximum contribution amounts. The Company matches 100% of the first 3% of employee contributions. The Company assumes all administrative costs of the Plan. For the years ended September 30, 2024 and 2023, the expense relating to the matching contribution was $177,309 and $136,914, respectively.

Equity Method Investment - Syntone (Details) - Syntone - USD ($)		1 Months Ended
	May 22, 2020	Jun. 30, 2020
Investments
Ownership (as a percent)	20.00%
Investment in joint venture		$ 900,000
Expected future investment	$ 2,100,000
Syntone PRC
Investments
Ownership (as a percent)	80.00%

Commitments and Contingencies - Lease balance sheet (Details) - USD ($)	Sep. 30, 2024	Sep. 30, 2023
Leases
Operating leases, Right-of-use asset	$ 274,645	$ 26,172
Operating lease liabilities	$ 297,829
Financing lease liabilities		$ 4,267
Operating leases, Weighted-average remaining lease term	4 years 7 months 6 days	7 months 6 days
Finance leases, Weighted-average remaining lease term		3 months 18 days
Operating leases, Weighted-average discount rate (as a percent)	9.90%	7.50%
Finance leases, Weighted-average discount rate (as a percent)		13.00%

Basis of Presentation and Summary of Significant Accounting Policies (Tables)

12 Months Ended

Sep. 30, 2024

Basis of Presentation and Summary of Significant Accounting Policies

Schedule of anti-dilutive securities


	As of September 30,
	2024		2023
Performance-based stock units	—		123
Performance-based stock options	666,500		35,000
Stock options	1,946,646		1,197,774
Common stock warrants	14,207,622		366,427
Convertible debt	1,171,100	⁽ⁱ⁾	854,962	⁽ⁱⁱ⁾

(i)

(ii)

The potentially dilutive securities related to convertible debt are calculated based on a fixed conversion price of $40.00 per share, which is subject to change as described in Note 7.

Liquidity

12 Months Ended

Sep. 30, 2024

Liquidity

Liquidity

2. Liquidity

The Company has incurred recurring losses and negative cash flows from operations since its inception and has an accumulated deficit of $ 543,284,900 as of September 30, 2024. As of September 30, 2024, the Company had $31,352,857 of principal, accrued interest and exit fees due under an unsecured convertible promissory note issued in December 2022 (the “December 2022 Note”), maturing on July 1, 2025, as amended. As a result, there is substantial doubt about the Company’s ability to continue as a going concern. The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty.

In November 2024 and December 2024, the Company sold 1,000,000 shares of common stock under the BTIG ATM Offering and generated $1,742,343 in net proceeds after paying fees to BTIG and other issuance costs of $53,918. Refer to Note 9 for further details on the BTIG ATM Offering.

Management does not believe that the Company’s existing cash and cash equivalents as of September 30, 2024, together with $1,742,343 in net proceeds from the sale of shares of common stock under the BTIG ATM Offering since September 30, 2024, are sufficient to fund the Company’s operations through one year from the Form 10-K filing date. As a result, there is substantial doubt about the Company’s ability to continue as a going concern and additional financing will be

needed by the Company to fund its operations in the future and to commercially develop ONS-5010/LYTENAVA and to develop any other product candidates. Management is currently evaluating different strategies to obtain the required funding for future operations, including but not limited to, the exercise of outstanding warrants to purchase shares of the Company’s common stock (subject to meeting the requirements for calling such warrants), proceeds from potential licensing and/or marketing arrangements or collaborations with pharmaceutical or other companies, sale of the development and commercial rights to the Company’s drug product candidates in regions outside of the U.S., the issuance of additional debt, the issuance of equity securities, including accessing capital through at-the-market offering agreements (refer to Note 9 for further details), and revenues from potential future product sales, if any. There can be no assurance that these future funding efforts will be successful. The Company’s consolidated financial statements do not include any adjustments that might be necessary if it is unable to continue as a going concern.

The Company’s future operations are highly dependent on a combination of factors, including (i) the timely and successful completion of additional financing discussed above; (ii) the Company’s ability to successfully begin marketing of its product candidates or complete revenue-generating partnerships with other companies; (iii) the success of its research and development; (iv) the development of competitive therapies by other biotechnology and pharmaceutical companies; and, ultimately, (v) regulatory approval and market acceptance of the Company’s proposed future products.