Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Mar. 31, 2017 | May 12, 2017 | |
Document And Entity Information | ||
Entity Registrant Name | CIPHERLOC Corp | |
Entity Central Index Key | 1,022,505 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --09-30 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 6,293,696 | |
Trading Symbol | CLOK | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,017 |
Balance Sheets (Unaudited)
Balance Sheets (Unaudited) - USD ($) | Mar. 31, 2017 | Sep. 30, 2016 |
Current Assets | ||
Cash | $ 119,994 | $ 344,138 |
Prepaid officer compensation | 52,244 | 44,788 |
Other prepaid expenses | 2,500 | |
Total Current Assets | 172,238 | 391,426 |
Other assets | 12,217 | 12,218 |
Fixed assets, net | 13,933 | 13,897 |
Total Assets | 198,388 | 417,541 |
Current Liabilities | ||
Accounts payable and accrued liabilities | 18,580 | 62,270 |
Accrued compensation | 314,414 | 420,334 |
Deferred revenue-current | 442,000 | 442,000 |
Total Current Liabilities | 774,994 | 924,604 |
Long-Term Liabilities | ||
Deferred revenue, net of current portion | 104,275 | 341,522 |
Total Long-Term Liabilities | 104,275 | 341,522 |
Total Liabilities | 879,269 | 1,266,126 |
Series A Convertible Preferred stock, $0.01 par value, 10,000,000 shares authorized; 10,000,000 issued and outstanding as of March 31, 2017 and September 30, 2016 | 100,000 | 100,000 |
Common stock, $0.01 par value, 650,000,000 shares authorized; 6,274,336 and 5,268,859 issued and outstanding as of March 31, 2017 and September 30, 2016, respectively | 62,743 | 52,688 |
Additional paid-in capital | 48,508,133 | 44,779,296 |
Accumulated deficit | (49,351,757) | (45,780,569) |
Total Stockholders' Deficit | (680,881) | (848,585) |
Total Liabilities and Stockholders' Deficit | $ 198,388 | $ 417,541 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2017 | Sep. 30, 2016 |
Statement of Financial Position [Abstract] | ||
Series A Convertible Preferred Stock, par value | $ 0.01 | $ 0.01 |
Series A Convertible Preferred Stock, shares authorized | 10,000,000 | 10,000,000 |
Series A Convertible Preferred Stock, shares issued | 10,000,000 | 10,000,000 |
Series A Convertible Preferred Stock, shares outstanding | 10,000,000 | 10,000,000 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 650,000,000 | 650,000,000 |
Common stock, shares issued | 6,274,336 | 5,268,859 |
Common stock, shares outstanding | 6,274,336 | 5,268,859 |
Statements of Operations (Unaud
Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | |
Income Statement [Abstract] | ||||
Revenues | $ 124,747 | $ 112,500 | $ 237,247 | $ 116,314 |
Cost of revenues | 30,300 | 30,300 | 60,600 | 30,300 |
Gross Profit | 94,447 | 82,200 | 176,647 | 86,014 |
Operating Expenses | ||||
General and administrative (includes stock-based expense of $74,500 and $2,192,200 for the three and six months ended March 31, 2017, respectively) | 277,971 | 251,550 | 2,708,908 | 577,817 |
Sales and marketing (includes stock-based expense of $0 and $31,248 for the three and six months ended March 31, 2017, respectively) | 55,110 | 153,484 | ||
Research and development (includes stock-based expense of $14,965 and $491,515 for the three and six months ended March 31, 2017, respectively, and $0 and $27,500 for the three and six months ended March 31, 2016, respectively) | 156,536 | 110,493 | 756,495 | 237,643 |
Settlement expense | 106,250 | |||
Total Operating Expenses | 489,617 | 362,043 | 3,725,137 | 815,460 |
Operating Loss | (395,170) | (279,843) | (3,548,490) | (729,446) |
Other Income (Expenses) | ||||
Gain on extinguishment | 43,911 | 43,911 | ||
Interest expense | (11,759) | (22,698) | (106) | |
Net Loss | $ (406,929) | $ (235,932) | $ (3,571,188) | $ (685,641) |
Net Loss per Common Share – Basic and Diluted: | $ (0.07) | $ (0.05) | $ (0.60) | $ (0.15) |
Weighted Average Common Shares Outstanding – Basic and Diluted | 6,205,097 | 4,494,241 | 5,930,434 | 4,480,662 |
Statements of Operations (Unau5
Statements of Operations (Unaudited) (Parenthetical) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | |
Income Statement [Abstract] | ||||
General and administrative included in stock-based expense | $ 0 | $ 0 | $ 2,117,700 | $ 2,117,700 |
Sales and marketing included in stock-based expense | 0 | 0 | 31,250 | 31,250 |
Research and development included in stock-based expense | $ 14,965 | $ 0 | $ 491,515 | $ 27,500 |
Statements of Cash Flows (Unaud
Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (3,571,188) | $ (685,641) |
Adjustments to reconcile net loss to net cash flows used in operating activities: | ||
Depreciation | 2,762 | |
Stock-based compensation | 2,117,700 | 27,500 |
Stock issued for services | 629,222 | |
Termination of software license | 106,250 | |
Gain on extinguishment | (43,911) | |
Changes in operating assets and liabilities: | ||
Prepaid officer compensation | (7,456) | |
Prepaid expenses and other assets | 2,501 | |
Deferred revenue | (237,247) | (116,314) |
Accounts payable and accrued liabilities | (145,610) | (680,853) |
Net cash used in operating activities | (1,103,066) | (1,499,219) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of fixed assets and software | (2,798) | |
Deposit with others | (7,216) | |
Net cash used in investing activities | (2,798) | (7,216) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Repayment of advances from officer | (1,205) | |
Common stock issued for cash | 881,720 | 265,001 |
Net cash provided by financing activities | 881,720 | 263,796 |
DECREASE IN CASH | (224,144) | (1,242,639) |
CASH, BEGINNING OF PERIOD | 344,138 | 1,993,406 |
CASH, END OF PERIOD | $ 119,994 | $ 750,767 |
Statement of Stockholders' Defi
Statement of Stockholders' Deficit (Unaudited) - 6 months ended Mar. 31, 2017 - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at Sep. 30, 2016 | $ 100,000 | $ 52,688 | $ 44,779,296 | $ (45,780,569) | $ (848,585) |
Balance, shares at Sep. 30, 2016 | 10,000,000 | 5,268,859 | |||
Common stock issued for services | $ 1,365 | 627,857 | 629,222 | ||
Common stock issued for services, shares | 136,477 | ||||
Common stock issued for cash | $ 4,540 | 877,180 | $ 881,720 | ||
Common stock issued for cash, shares | 454,000 | 123,000 | |||
Common stock issued for license termination | $ 250 | 106,000 | $ 106,250 | ||
Common stock issued for license termination, shares | 25,000 | ||||
Common stock issued to officers | $ 3,900 | 2,117,800 | 2,121,700 | ||
Common stock issued to officers, shares | 390,000 | ||||
Net loss | (3,571,188) | (3,571,188) | |||
Balance at Mar. 31, 2017 | $ 100,000 | $ 62,743 | $ 48,508,133 | $ (49,351,757) | $ (680,881) |
Balance, shares at Mar. 31, 2017 | 10,000,000 | 6,274,336 |
Description of Business
Description of Business | 6 Months Ended |
Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | NOTE 1 - DESCRIPTION OF BUSINESS Cipherloc Corporation (the “Company”) was incorporated in Texas on June 22, 1953 as American Mortgage Company. On March 15, 2015, the Company changed its name to Cipherloc Corporation. The name change became effective by the Amended Certificate as of March 23, 2015. Cipherloc is a data security solutions company. Our highly innovative products, based on our patented polymorphic encryption technology, are designed to enable an iron-clad layer of protection to be added to existing solutions. Cipherloc has developed technology that: ● Dramatically enhances data security ● Can be easily added to existing products ● Is scalable and future-proof |
Basis of Presentation of Interi
Basis of Presentation of Interim Financial Statements | 6 Months Ended |
Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation of Interim Financial Statements | NOTE 2 - BASIS OF PRESENTATION OF INTERIM FINANCIAL STATEMENTS The Company prepares its financial statements in accordance with accounting principles generally accepted in the United States of America. The accompanying interim unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X. In our opinion, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three and six months ended March 31, 2017 are not necessarily indicative of the results that may be expected for the year ending September 30, 2017. Notes to the unaudited interim financial statements that would substantially duplicate the disclosures contained in the audited financial statements for the year ended September 30, 2016 have been omitted; this report should be read in conjunction with the audited financial statements and the footnotes thereto for the fiscal year ended September 30, 2016 included within the Company’s Form 10-K as filed with the Securities and Exchange Commission. |
Going Concern
Going Concern | 6 Months Ended |
Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern | NOTE 3 - GOING CONCERN The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. The Company has incurred losses from operations and has an accumulated deficit at March 31, 2017 of $49,351,757. The Company intends to continue raising money through a private placement memorandum and through the sale of products during the 2017 calendar year to fund operations. These factors raise doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty. The Company’s continued existence is dependent upon management’s ability to develop profitable operations and the ability to obtain additional funding sources to explore potential strategic relationships and to provide capital and other resources for the further development and marketing of the Company’s products and business. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 4 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Company prepares its financial statements in accordance with accounting principles generally accepted in the United States of America. Significant accounting policies are as follows: Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. At March 31, 2017 and September 30, 2016, cash and cash equivalents include cash on hand and cash in the bank. The Company maintains its cash in accounts held by large, globally recognized banks which, at times, may exceed federally insured limits as guaranteed by the Federal Deposit Insurance Corporation (FDIC). The FDIC insures these deposits up to $250,000. At March 31, 2017, none of the Company’s cash balance was uninsured, and at September 30, 2016, $94,138 was uninsured. The Company has not experienced any losses in such accounts. Basic and Diluted Net Loss per Common Share Basic loss per share is computed by dividing net loss available to common shareholders by the weighted average number of common shares outstanding during the reporting period. The weighted average number of shares is calculated by taking the number of shares outstanding and weighting them by the amount of time that they were outstanding. Diluted earnings per share reflects the potential dilution that could occur if stock options, warrants, and other commitments to issue common stock were exercised or equity awards vest, resulting in the issuance of common stock that could share in the earnings of the Company. As of March 31, 2017 and September 30, 2016, the Company had 10,000,000 shares of preferred stock outstanding, which are convertible into 15,000,000 shares of common stock. The Company issued 123,000 shares and 454,000 shares of restricted common shares through a Private Placement Memorandum for proceeds totaling $233,120 and $881,720 during the three and six months ended March 31, 2017, respectively. The Company also issued 25,000 shares of restricted stock pursuant to Rule 144 to terminate a perpetual software license during the three months ended December 31, 2016. Diluted loss per share is the same as basic loss per share during periods where net losses are incurred since the inclusion of the potential common stock equivalents would be anti-dilutive as a result of the net loss. Concentration of Credit Risk and Customer Concentrations All of the Company’s cash and cash equivalents are maintained in regional and national financial institutions. The Company has exposure to credit risk to the extent that its cash and cash equivalents exceed amounts covered by the U.S. federal deposit insurance; however, the Company has not experienced any losses in such accounts. In management’s opinion, the capitalization and operating history of the financial institutions are such that the likelihood of material loss is remote. During the three and six months ended March 31, 2017, one customer made up 100% of revenues. Management believes the loss of this customer would have a material impact on the Company’s financial position, results of operations, and cash flows. Revenue Recognition Software license revenue is generally recognized when a signed contract or other persuasive evidence of an arrangement exists, the software has been electronically delivered, the license fee is fixed or is measured on a paid user basis, and collection of the resulting receivable is probable. When contracts contain multiple elements wherein Vendor-Specific Objective Evidence (“VSOE”) exists for all undelivered elements, we account for the delivered elements in accordance with the “Residual Method.” VSOE of fair value for maintenance and support is established by a stated renewal rate, if substantive, included in the license arrangement or rates charged in stand-alone sales of maintenance and support. Revenue from subscription license agreements, which include software and rights to unspecified future products and maintenance, is recognized ratably over the term of the subscription period. When VSOE of fair value for post-contract customer support cannot be determined, the revenue is recognized ratably over the contract period. In June 2014, the Company entered into an agreement to provide software and support to a third party for which no VSOE for any elements is known. Delivery of the use of the license was not achieved until December 2015. The only remaining undelivered element was post-contract support services, and accordingly, the revenues will be recognized on a pro rata basis prospectively over the remaining 30 months of the related contracts. Deferred revenue results from fees billed to or collected from customers for which revenue has not yet been recognized. The Company has deferred revenue from one customer of $546,275 as of March 31, 2017 and $783,522 as of September 30, 2016. Research and Development and Software Development Costs Capitalization of certain software development costs are recorded after the determination of technological feasibility. Based on our product development process, technological feasibility is determined upon the completion of a working model. To date, costs incurred by us from the completion of the working model to the point at which the product is ready for general release do not have technological feasibility. Accordingly, we have charged all such costs to research and development expense in the period incurred. Research and development costs for the three months ended March 31, 2017 and 2016 were $156,536 and $110,493, respectively. Research and development costs for the six months ended March 31, 2017 and 2016 were $756,495 and $237,643, respectively. Recent Accounting Announcements The Financial Accounting Standards Board (“FASB”) issues Accounting Standards Updates (“ASU”) to amend the authoritative literature in the Accounting Standards Codification (“ASC”). There have been a number of ASUs to date that amend the original text of the ASC. The Company believes those updates issued-to-date either (i) provide supplemental guidance, (ii) are technical corrections, (iii) are not applicable to the Company, or (iv) are not expected to have a significant impact on the Company. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Mar. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 5 - COMMITMENTS AND CONTINGENCIES Terminated Employment Agreement with Former Chief Financial Officer The Company previously had an employment agreement with its Chief Financial Officer, which terminated in 2015. There were amounts that were accrued and unpaid as of March 31, 2017 and September 30, 2016, totaling $314,414 and $291,715, respectively. According to the original agreement, the unpaid salaries were to accrue interest at 15%, which has been accrued at each reporting date. Interest expense was $11,759 and $22,698 during the three and six months ended March 31, 2017, respectively. Management believes that such amounts were previously satisfied through the issuance of common stock and does not intend to pay such amounts. Employment Agreement with Chief Executive Officer During the six months ended March 31, 2017 and 2016, cash compensation amounted to $220,584 and $243,274, including benefits, respectively. During the six months ended March 31, 2017 and 2016, stock-based compensation amounted to $1,629,000 and $0, respectively. As of March 31, 2017, the Chief Executive Officer was prepaid $52,244, which was included within prepaid officer’s compensation on the accompanying balance sheet. |
Stockholders' Deficit
Stockholders' Deficit | 6 Months Ended |
Mar. 31, 2017 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Deficit | NOTE 6 - STOCKHOLDERS’ DEFICIT As of March 31, 2017, the Company was authorized to issue 650,000,000 common shares and 10,000,000 preferred shares at a par value of $0.01. Common Stock Management determines the fair value of stock issuances using the closing stock price on the grant date. During the three months ended March 31, 2017, there were 331,000 shares of common stock sold for $648,600, net of $18,400 in offering costs. During the six months ended March 31, 2017, there were 454,000 shares of common stock sold for $881,720, net of $35,280 in offering costs. Additionally, the Company issued 25,000 shares of common stock with a fair value of $106,250 for a software termination settlement during the three months ended December 31, 2016. During the three months ended December 31, 2016, the Company issued 390,000 shares of common stock with a fair value of $2,121,700 to its officers, including 300,000 shares with a fair value of $1,633,000 to Michael De La Garza for his tenure as Chairman of the Board and as a CEO stock award, 70,000 shares with a fair value of $380,100 to Eric Marquez for his tenure as a Board Director and as a CFO stock award, and 20,000 shares with a fair value of $108,600 to Gino Mauriello for his tenure as a Board Director. Furthermore, the Company issued 50,000 shares of common stock with a fair value of $271,500 to Albert Carlson as an employee bonus, 25,000 shares with a fair value of $135,750 to Robert LeBlanc for patent work, and 10,000 shares with a fair value of $54,300 to Michael Hufnagel as an employee bonus. The Company also issued 10,146 shares of common stock with a fair value of $31,250 to Mike Salas and 3,968 shares with a fair value of $15,000 to Mike Hufnagel as part of their quarterly compensation. During the three months ended March 31, 2017, the Company issued 12,363 shares of common stock with a fair value of $46,922 to Mike Salas and Michael Hufnagel as part of their quarterly compensation. The Company also issued 25,000 shares of common stock with a fair value of $74,500 to StockVest for investor relations services. Preferred Stock The Company’s Series A Preferred Stock is convertible into the Company’s common stock at a rate of 1 to 1.5 common shares. As of March 31, 2017, there are a total of 10,000,000 shares of the Series A Preferred Stock authorized and outstanding which are convertible into a total of 15,000,000 shares of common stock. Each share of the Preferred Stock has 150 votes on all matters presented to be voted by the holders of common stock. The holders of the Series A Preferred Stock can only convert the shares if agreed upon by 50.1% vote of all preferred shareholders. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Mar. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 7 – SUBSEQUENT EVENTS There have been no reportable events that have occurred after March 31, 2017. |
Summary of Significant Accoun15
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. At March 31, 2017 and September 30, 2016, cash and cash equivalents include cash on hand and cash in the bank. The Company maintains its cash in accounts held by large, globally recognized banks which, at times, may exceed federally insured limits as guaranteed by the Federal Deposit Insurance Corporation (FDIC). The FDIC insures these deposits up to $250,000. At March 31, 2017, none of the Company’s cash balance was uninsured, and at September 30, 2016, $94,138 was uninsured. The Company has not experienced any losses in such accounts. |
Basic and Diluted Net Loss per Common Share | Basic and Diluted Net Loss per Common Share Basic loss per share is computed by dividing net loss available to common shareholders by the weighted average number of common shares outstanding during the reporting period. The weighted average number of shares is calculated by taking the number of shares outstanding and weighting them by the amount of time that they were outstanding. Diluted earnings per share reflects the potential dilution that could occur if stock options, warrants, and other commitments to issue common stock were exercised or equity awards vest, resulting in the issuance of common stock that could share in the earnings of the Company. As of March 31, 2017 and September 30, 2016, the Company had 10,000,000 shares of preferred stock outstanding, which are convertible into 15,000,000 shares of common stock. The Company issued 123,000 shares and 454,000 shares of restricted common shares through a Private Placement Memorandum for proceeds totaling $233,120 and $881,720 during the three and six months ended March 31, 2017, respectively. The Company also issued 25,000 shares of restricted stock pursuant to Rule 144 to terminate a perpetual software license during the three months ended December 31, 2016. Diluted loss per share is the same as basic loss per share during periods where net losses are incurred since the inclusion of the potential common stock equivalents would be anti-dilutive as a result of the net loss. |
Concentration of Credit Risk and Customer Concentrations | Concentration of Credit Risk and Customer Concentrations All of the Company’s cash and cash equivalents are maintained in regional and national financial institutions. The Company has exposure to credit risk to the extent that its cash and cash equivalents exceed amounts covered by the U.S. federal deposit insurance; however, the Company has not experienced any losses in such accounts. In management’s opinion, the capitalization and operating history of the financial institutions are such that the likelihood of material loss is remote. During the three and six months ended March 31, 2017, one customer made up 100% of revenues. Management believes the loss of this customer would have a material impact on the Company’s financial position, results of operations, and cash flows. |
Revenue Recognition | Revenue Recognition Software license revenue is generally recognized when a signed contract or other persuasive evidence of an arrangement exists, the software has been electronically delivered, the license fee is fixed or is measured on a paid user basis, and collection of the resulting receivable is probable. When contracts contain multiple elements wherein Vendor-Specific Objective Evidence (“VSOE”) exists for all undelivered elements, we account for the delivered elements in accordance with the “Residual Method.” VSOE of fair value for maintenance and support is established by a stated renewal rate, if substantive, included in the license arrangement or rates charged in stand-alone sales of maintenance and support. Revenue from subscription license agreements, which include software and rights to unspecified future products and maintenance, is recognized ratably over the term of the subscription period. When VSOE of fair value for post-contract customer support cannot be determined, the revenue is recognized ratably over the contract period. In June 2014, the Company entered into an agreement to provide software and support to a third party for which no VSOE for any elements is known. Delivery of the use of the license was not achieved until December 2015. The only remaining undelivered element was post-contract support services, and accordingly, the revenues will be recognized on a pro rata basis prospectively over the remaining 30 months of the related contracts. Deferred revenue results from fees billed to or collected from customers for which revenue has not yet been recognized. The Company has deferred revenue from one customer of $546,275 as of March 31, 2017 and $783,522 as of September 30, 2016. |
Research and Development and Software Development Costs | Research and Development and Software Development Costs Capitalization of certain software development costs are recorded after the determination of technological feasibility. Based on our product development process, technological feasibility is determined upon the completion of a working model. To date, costs incurred by us from the completion of the working model to the point at which the product is ready for general release do not have technological feasibility. Accordingly, we have charged all such costs to research and development expense in the period incurred. Research and development costs for the three months ended March 31, 2017 and 2016 were $156,536 and $110,493, respectively. Research and development costs for the six months ended March 31, 2017 and 2016 were $756,495 and $237,643, respectively. |
Recent Accounting Announcements | Recent Accounting Announcements The Financial Accounting Standards Board (“FASB”) issues Accounting Standards Updates (“ASU”) to amend the authoritative literature in the Accounting Standards Codification (“ASC”). There have been a number of ASUs to date that amend the original text of the ASC. The Company believes those updates issued-to-date either (i) provide supplemental guidance, (ii) are technical corrections, (iii) are not applicable to the Company, or (iv) are not expected to have a significant impact on the Company. |
Going Concern (Details Narrativ
Going Concern (Details Narrative) - USD ($) | Mar. 31, 2017 | Sep. 30, 2016 |
Accounting Policies [Abstract] | ||
Accumulated deficit | $ 49,351,757 | $ 45,780,569 |
Summary of Significant Accoun17
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Mar. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | Sep. 30, 2016 | |
FDIC insured cash | $ 250,000 | $ 250,000 | ||||
Cash balance uninsured | $ 0 | $ 0 | $ 94,138 | |||
Series A Preferred Stock, shares outstanding | 10,000,000 | 10,000,000 | 10,000,000 | |||
Number of shares issued for conversion | 15,000,000 | |||||
Number of restricted common stock shares issued through a private placement | 123,000 | |||||
Common stock issued for cash through a private placement | $ 233,120 | $ 881,720 | $ 265,001 | |||
Number of restricted common stock shares issued for terminate a perpetual software license | 25,000 | |||||
Deferred revenue | 671,022 | $ 783,522 | ||||
Research and development costs | $ 156,536 | $ 110,493 | $ 756,495 | $ 237,643 | ||
Sales Revenue, Net [Member] | Customer Concentration Risk [Member] | ||||||
Customer concentration percentage | 100.00% | 100.00% | ||||
Restricted Stock [Member] | ||||||
Number of restricted common stock shares issued through a private placement | 454,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | Sep. 30, 2016 | |
Accrued and unpaid | $ 314,414 | $ 314,414 | $ 291,715 | ||
Percentage of accrued interest rate | 15.00% | 15.00% | |||
Interest expense | $ 11,759 | $ 22,698 | $ 106 | ||
Stock-based compensation | 2,117,700 | $ 27,500 | |||
Employment Agreement With Chief Executive Officer [Member] | |||||
Cash compensation | 220,584 | 243,274 | |||
Stock-based compensation | 1,629,000 | $ 0 | |||
Prepaid compensation | $ 52,244 | $ 52,244 |
Stockholders' Deficit (Details
Stockholders' Deficit (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 15 Months Ended | |||
Mar. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2017 | Sep. 30, 2016 | |
Common stock, shares authorized | 650,000,000 | 650,000,000 | 650,000,000 | |||
Series A preferred stock, shares authorized | 10,000,000 | 10,000,000 | 10,000,000 | |||
Preferred stock, par value | $ 0.01 | $ 0.01 | $ 0.01 | |||
Sale of common stock, shares | 331,000 | 454,000 | ||||
Sale of common stock | $ 648,600 | $ 881,720 | ||||
Offering costs | $ 18,400 | $ 35,280 | ||||
Number of shares issued for software termination settlement | 25,000 | |||||
Fair value of common stock for a software termination settlement | $ 106,250 | |||||
Number of common stock shares issued to officers | 390,000 | |||||
Number of common stock shares issued to officers, value | $ 2,121,700 | |||||
Common stock rate description | 1 to 1.5 common shares | |||||
Series A preferred stock, shares outstanding | 10,000,000 | 10,000,000 | 10,000,000 | |||
Number of shares issued for conversion | 15,000,000 | |||||
Preferred stock, voting rights | Each share of the Preferred Stock has 150 votes. | |||||
Percentage of vote for preferred shareholders | 50.10% | |||||
Number of shares issued for services, value | $ (629,222) | |||||
Investor [Member] | ||||||
Number of shares issued for services | 25,000 | |||||
Number of shares issued for services, value | $ 74,500 | |||||
Michael De La Garza [Member] | ||||||
Number of common stock shares issued to officers | 300,000 | |||||
Number of common stock shares issued to officers, value | $ 1,633,000 | |||||
Eric Marquez [Member] | ||||||
Number of common stock shares issued to officers | 70,000 | |||||
Number of common stock shares issued to officers, value | $ 380,100 | |||||
Gino Mauriello [Member] | ||||||
Number of common stock shares issued to officers | 20,000 | |||||
Number of common stock shares issued to officers, value | $ 108,600 | |||||
Albert Carlson [Member] | ||||||
Number of common stock shares issued to officers | 50,000 | |||||
Number of common stock shares issued to officers, value | $ 271,500 | |||||
Robert LeBlanc [Member] | ||||||
Number of common stock shares issued to officers | 25,000 | |||||
Number of common stock shares issued to officers, value | $ 135,750 | |||||
Michael Hufnagel [Member] | ||||||
Number of common stock shares issued to officers | 10,000 | |||||
Number of common stock shares issued to officers, value | $ 54,300 | |||||
Mike Salas [Member] | ||||||
Number of common stock shares issued to officers | 10,146 | |||||
Number of common stock shares issued to officers, value | $ 31,250 | |||||
Mike Hufnagel [Member] | ||||||
Number of common stock shares issued to officers | 3,968 | |||||
Number of common stock shares issued to officers, value | $ 15,000 | |||||
Mike Salas and Michael Hufnagel [Member] | ||||||
Number of common stock shares issued to officers | 12,363 | |||||
Number of common stock shares issued to officers, value | $ 46,922 |