Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | |
Sep. 30, 2017 | Jan. 10, 2018 | |
Document And Entity Information | ||
Entity Registrant Name | CIPHERLOC Corp | |
Entity Central Index Key | 1,022,505 | |
Document Type | 10-K | |
Document Period End Date | Sep. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --09-30 | |
Entity a Well-known Seasoned Issuer | No | |
Entity a Voluntary Filer | No | |
Entity's Reporting Status Current | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Public Float | $ 10,293,766 | |
Entity Common Stock, Shares Outstanding | 6,982,411 | |
Trading Symbol | CLOK | |
Document Fiscal Period Focus | FY | |
Document Fiscal Year Focus | 2,017 |
Balance Sheets
Balance Sheets - USD ($) | Sep. 30, 2017 | Sep. 30, 2016 |
Current assets: | ||
Cash | $ 227,396 | $ 344,138 |
Prepaid officer compensation | 44,788 | |
Other prepaid expenses | 2,500 | |
Total current assets | 227,396 | 391,426 |
Other assets | 12,218 | 12,218 |
Fixed assets, net | 11,170 | 13,897 |
Total assets | 250,784 | 417,541 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 59,763 | 62,270 |
Accrued compensation | 505,027 | 420,334 |
Convertible note payable, net of discount of $303,322 | 26,678 | |
Deferred revenue-current | 308,412 | 442,000 |
Total current liabilities | 899,880 | 924,604 |
Long term liabilities: | ||
Deferred revenue, net of current portion | 7,836 | 341,522 |
Total long term liabilities | 7,836 | 341,522 |
Total liabilities | 907,716 | 1,266,126 |
COMMITMENTS AND CONTINGENCIES (NOTE 7) | ||
STOCKHOLDERS' DEFICIT | ||
Series A Convertible Preferred stock, $0.01 par value, 10,000,000 shares authorized; 10,000,000 issued and outstanding as of September 30, 2017 and 2016, respectively | 100,000 | 100,000 |
Common stock, $0.01 par value, 650,000,000 shares authorized; 6,635,127 and 5,268,859 issued and outstanding as of September 30, 2017 and 2016, respectively | 66,351 | 52,688 |
Additional paid-in capital | 49,378,447 | 44,779,296 |
Accumulated deficit | (50,201,730) | (45,780,569) |
Total stockholders' deficit | (656,932) | (848,585) |
Total liabilities and stockholders' deficit | $ 250,784 | $ 417,541 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - USD ($) | Sep. 30, 2017 | Sep. 30, 2016 |
Statement of Financial Position [Abstract] | ||
Convertible note payable, discount | $ 303,322 | |
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 | 6,635,127 | 5,268,859 |
Common stock, shares outstanding | 6,635,127 | 5,268,859 |
Statements of Operations
Statements of Operations - USD ($) | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Income Statement [Abstract] | ||
Revenues | $ 467,274 | $ 341,478 |
Cost of revenues | 121,200 | 90,900 |
Gross profit | 346,074 | 250,578 |
Operating expenses: | ||
General and administrative (includes stock-based expense of $2,192,200 for 2017 and $211,600 for 2016) | 3,166,471 | 1,167,466 |
Sales and marketing (includes stock-based expense of $93,748 for 2017 and $54,803 for 2016) | 354,005 | 218,722 |
Research and development (includes stock-based expense of $536,515 for 2017 and $46,291 for 2016) | 1,087,372 | 755,159 |
Settlement expenses | 106,250 | 763,469 |
Total operating expenses | 4,714,098 | 2,904,816 |
Operating loss | (4,368,024) | (2,654,238) |
Other (expenses) income: | ||
Gain on extinguishment | 59,612 | |
Interest expense | (53,137) | (47,117) |
Total other (expenses) income | (53,137) | 12,495 |
Net loss | $ (4,421,161) | $ (2,641,743) |
Net loss per common share - Basic and diluted: | $ (0.71) | $ (0.56) |
Weighted average common shares outstanding - Basic and diluted | 6,183,909 | 4,744,815 |
Statements of Operations (Paren
Statements of Operations (Parenthetical) - USD ($) | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
General and Administrative [Member] | ||
Expenses included in stock-based expense | $ 2,192,200 | $ 211,600 |
Sales and Marketing [Member] | ||
Expenses included in stock-based expense | 93,748 | 54,803 |
Research and Development [Member] | ||
Expenses included in stock-based expense | $ 536,515 | $ 46,291 |
Statements of Stockholders' Def
Statements of Stockholders' Deficit - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Subscription Receivable [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at Sep. 30, 2015 | $ 100,000 | $ 43,567 | $ (50,000) | $ 42,815,934 | $ (43,138,826) | $ (229,325) |
Balance, shares at Sep. 30, 2015 | 10,000,000 | 4,356,741 | ||||
Common stock issued to officers and employees | $ 107 | 73,487 | 73,594 | |||
Common stock issued to officers and employees, shares | 10,677 | |||||
Common stock issued for cash | $ 5,135 | 941,185 | 946,320 | |||
Common stock issued for cash, shares | 513,500 | |||||
Common stock issued for license termination | $ 3,071 | 760,398 | 763,469 | |||
Common stock issued for license termination, shares | 307,141 | |||||
Common stock issued for services | $ 808 | 238,292 | 239,100 | |||
Common stock issued for services, shares | 80,800 | |||||
Reversal of subscription receivable | 50,000 | (50,000) | ||||
Common stock issued with convertible note, shares | 15,000,000 | |||||
Net loss | (2,641,743) | $ (2,641,743) | ||||
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 to officers and employees | $ 5,423 | 2,778,499 | 2,783,922 | |||
Common stock issued to officers and employees, shares | 542,268 | |||||
Common stock issued for cash | $ 7,240 | 1,376,080 | 1,383,320 | |||
Common stock issued for cash, shares | 724,000 | |||||
Common stock issued for license termination | $ 250 | 106,000 | 106,250 | |||
Common stock issued for license termination, shares | 25,000 | |||||
Common stock issued for services | $ 250 | 74,250 | 74,500 | |||
Common stock issued for services, shares | 25,000 | |||||
Reversal of subscription receivable | ||||||
Common stock issued with convertible note | $ 500 | 44,109 | $ 44,609 | |||
Common stock issued with convertible note, shares | 50,000 | 15,000,000 | ||||
Issuance of warrants | 84,227 | $ 84,227 | ||||
Beneficial conversion feature on convertible note | 135,986 | 135,986 | ||||
Net loss | (4,421,161) | (4,421,161) | ||||
Balance at Sep. 30, 2017 | $ 100,000 | $ 66,351 | $ 49,378,447 | $ (50,201,730) | $ (656,932) | |
Balance, shares at Sep. 30, 2017 | 10,000,000 | 6,635,127 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (4,421,161) | $ (2,641,743) |
Adjustments to reconcile net loss from continuing operations to net cash used in operating activities: | ||
Depreciation | 5,524 | 2,132 |
Stock-based compensation | 2,858,422 | 312,694 |
Gain on settlements | (59,612) | |
Termination of software license | 106,250 | 763,469 |
Changes in operating assets and liabilities: | ||
Prepaid officer compensation | 44,788 | (44,788) |
Prepaid expenses and other assets | 2,501 | 732 |
Deferred revenue | (467,274) | (341,478) |
Accounts payable and accrued liabilities | 82,186 | (558,747) |
Net cash used in operating activities | (1,788,764) | (2,567,341) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchase of fixed assets and software | (2,798) | (16,029) |
Other assets | (12,218) | |
Net cash used in investing activities | (2,798) | (28,247) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Common stock issued for cash, net of offering costs | 1,383,320 | 946,320 |
Proceeds from related party notes | 70,000 | |
Repayment of related party notes | (70,000) | |
Issuance of convertible note | 291,500 | |
Net cash provided by financing activities | 1,674,820 | 946,320 |
DECREASE IN CASH | (116,742) | (1,649,268) |
CASH, BEGINNING OF YEAR | 344,138 | 1,993,406 |
CASH, END OF YEAR | 227,396 | 344,138 |
CASH PAID FOR: | ||
Interest paid | ||
Income taxes paid |
Description of Business
Description of Business | 12 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | NOTE 1- DESCRIPTION OF BUSINESS Cipherloc Corporation (the “Company” or “Cipherloc”) 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 through 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. |
Risks and Uncertainties
Risks and Uncertainties | 12 Months Ended |
Sep. 30, 2017 | |
Risks and Uncertainties [Abstract] | |
Risks and Uncertainties | NOTE 2 – RISKS AND UNCERTAINTIES Going Concern The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”), which contemplate continuation of the Company as a going concern. However, the Company has incurred losses from operations, has an accumulated deficit at September 30, 2017 of $50,201,730 and needs additional cash to maintain its 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, continued contributions from the Company’s executive officers to finance its 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. Convertible Notes In September 2017, the Company issued a convertible note with a principal amount of $330,000 which includes an original issue discount of $30,000. The note accrues interest at 5% per annum and matures six months following the issuance date. The note provides the holder with the right, at any time on or after the note’s maturity date, to convert all or a portion of the outstanding principal balance and accrued interest to shares of the Company’s common stock at a fixed conversion price. The note includes adjustments to the conversion price based on the market price of the Company’s common stock after 180 days if the note is not repaid on the maturity date. Refer to Note 5 for further details. After the maturity date, the note does not contain a minimum conversion price or floor price per share, nor does it contain an explicit limit on the number of shares that may be issued upon conversion. If the Company is not able to repay the convertible note in cash at maturity, the conversion of the note by the holders could have a material adverse effect on the Company’s common stock. In December 2017, the Company issued an additional convertible note in the amount of $300,000 payable in three years. Refer to Note 10 for further details. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | NOTE 3 – 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: Use of Estimates and Assumptions The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities, (ii) the disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and (iii) the reported amount of net revenues and expenses recognized during the periods presented. Adjustments made with respect to the use of estimates often relate to improved information not previously available. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of financial statements; accordingly, actual results could differ from these estimates. The Company’s most significant estimates relate to the valuation of its convertible note and the valuation of its common stock. Legal The Company is subject to legal proceedings, claims and liabilities which arise in the ordinary course of business. The Company accrues for losses associated with legal claims when such losses are probable and can be reasonably estimated. These accruals are adjusted as additional information becomes available or circumstances change. Legal fees are charged to expense as they are incurred. Cash and Cash Equivalents and Concentration of Credit Risk The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. At September 30, 2017 and 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. The Company has not experienced any losses in such accounts. Website and Software Costs The Company’s accounting for software development costs complies with Accounting Standards Codification (“ASC”) 985-20, Costs of Software to be Sold, Leased or Marketed, whereby capitalization begins when the Company has a working prototype and has been tested, thereby achieving technological feasibility. This occurs very late in the development stage of the software product. The Company has determined the software costs do not fall under ASC 350-40, Internal-Use Software, based on the guidance in ASC 985-605-55-119 through 125 which covers guidance for hosting agreements. The Company’s product will generally not be hosted and will reside on the technology platform available to the user. Fixed Assets Fixed assets are recorded at cost and depreciation is provided over the estimated useful lives of the related assets using the straight-line method for financial statement purposes. The estimated life of equipment is three (3) years. The estimated life of our leasehold improvements is the lesser of the term of the related lease and useful life. Long-Lived Assets Long-lived assets are evaluated for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate. Each impairment test is based on a comparison of the undiscounted future cash flows to the recorded value of the asset. If impairment is indicated, the asset is written down to its estimated fair value. Fair Value of Financial Instruments The Company's financial instruments consisted primarily of cash, accounts payable and accrued expenses, deferred revenue, convertible note payable, as well as embedded conversion features. The carrying amounts of such financial instruments approximate their respective estimated fair value due to the short-term maturities and approximate market interest rates of these instruments. The embedded conversion feature in the convertible note payable will have to be re-evaluated when the convertible note payable first becomes convertible, which is after six months. At which time, it is probable that the embedded convertible feature will become a derivative which requires bifurcation and is separately recorded as a derivative liability at its estimated fair value. Fair value is focused on an exit price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Within the measurement of fair value, the use of market-based information is prioritized over entity specific information and a three-level hierarchy for fair value measurements is used based on the nature of inputs used in the valuation of an asset or liability as of the measurement date. The three-level hierarchy for fair value measurements is defined as follows: ● Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets; liabilities in active markets; ● Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability other than quoted prices, either directly or indirectly, including inputs in markets that are not considered to be active; or directly or indirectly including inputs in markets that are not considered to be active; ● Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement. Convertible Debt Convertible debt is accounted for under the guidelines established by ASC 470-20, Debt with Conversion and Other Options When equity instruments, such as common stock and/or warrants, are issued with convertible debt, the net proceeds from the transaction are allocated to the convertible debt and equity instruments based on their relative fair values. The proceeds allocated to the equity instruments may reduce the carrying value of the convertible debt, and such discount is amortized to interest expense over the term of the debt. In the event a convertible note has an embedded conversion feature which, among other features, allows an unlimited number of common shares to be issued upon conversion since the conversion price is based on the quoted market price of the Company’s common stock, the Company records a derivative liability, which is marked to market at each reporting period and charged to the statement of operations in accordance with ASC 815, Accounting for Derivative Financial Instruments and Hedging Activities Customer Concentration During the years ended September 30, 2017 and 2016, one customer accounted for 100% of revenues. The loss of this customer will have a significant impact on operations. 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, rights to unspecified future products and maintenance, is recognized ratably over the term of the subscription period. When the fair value of VSOE of 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 of $316,248 and $783,522 as of September 30, 2017 and 2016, respectively. 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. Our research and development costs incurred for the years ended September 30, 2017 and 2016 were $1,087,372 and $755,159, respectively. Share-Based Compensation The Company measures the cost of services provided by employees in exchange for an award of an equity instrument based on the grant-date fair value of the award. Compensation cost is recognized over the vesting or requisite service period. The Black-Scholes option-pricing model is used to estimate the fair value of options or warrants granted. Performance-based grants should be recognized prior to completion if the assessment is that it is probable that the performance condition will be met. For non-employees, the Company uses the fair value at each reporting date over the service period, which is usually the vesting period. Income Taxes The Company utilizes the asset and liability method in accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for operating loss and tax credit carry-forwards and 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 year 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 the results of operations in the period that includes the enactment date. A valuation allowance is recorded to reduce the carrying amounts of deferred tax assets unless it is more likely than not that the value of such assets will be realized. The Company uses the two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not, that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount, which is more than 50% likely of being realized upon ultimate settlement. The Company considers many factors when evaluating and estimating the Company’s tax positions and tax benefits, which may require periodic adjustments. The Company did not record any liabilities for uncertain tax positions for the years ended September 30, 2017 or 2016. Basic and Diluted Net Loss per Common Share Basic income (loss) per share is computed by dividing net income (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 September 30, 2017 and 2016, the Company had 10,000,000 shares of preferred stock outstanding which are convertible into 15,000,000 shares of common stock. 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. Recent Accounting Announcements The Financial Accounting Standards Board (“FASB”) issues Accounting Standards Updates (“ASU”) to amend the authoritative literature in the ASC. There have been a number of ASUs to date that amend the original text of 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. In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260) – Accounting for Certain Financial Instruments with Down Round Features In February 2016, the FASB issued ASU 2016-02, Leases (Topic 840), to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The amendments in this standard are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, for a public entity. Early adoption of the amendments in this standard is permitted for all entities and the Company must recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The Company is currently in the process of evaluating the effect this guidance will have on its financial statements and related disclosures. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). Under this guidance, revenue is recognized when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. The updated standard will replace most existing revenue recognition guidance under U.S. GAAP when it becomes effective and permits the use of either the retrospective or cumulative effect transition method. Early adoption is not permitted. The updated standard will be effective for the Company beginning January 1, 2018. The Company is currently evaluating the effect that the updated standard will have on its financial statements and related disclosures. In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements—Going Concern: Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Subtopic 205-40), which requires management to evaluate, at each annual and interim reporting period, whether there are conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date the financial statements are issued and provide related disclosures. ASU No. 2014-15 is effective for annual periods ending after December 15, 2016 and interim periods thereafter. Early application is permitted. The Company is currently evaluating the effect that the updated standard will have on its financial statements and related disclosures. In November 2015, the FASB issued ASU No. 2015-17, Income Taxes: Balance Sheet Classification of Deferred Taxes (Topic 740), which requires deferred tax liabilities and assets to be classified as noncurrent in a classified statement of financial position. ASU No. 2015-17 will align the presentation of deferred income tax assets and liabilities with International Financial Reporting Standards. The new standard will be effective for fiscal years beginning after December 15, 2016, including interim periods within those annual years, and early application is permitted. The Company is currently evaluating the effect that the updated standard will have on its financial statements and related disclosures. |
Software Licenses
Software Licenses | 12 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Software Licenses | NOTE 4 – SOFTWARE LICENSES Gawk On June 14, 2014, the Company entered into a license agreement with Gawk to use the Cipherloc engine for $1,125,000 for a period of four (4) years. This customer licensed the CipherShop-Cipherloc encryption software technology and support services. The Company was not required to make significant modifications at the time the contract was executed. The Company has never sold or licensed the CipherShop-Cipherloc encryption software, nor any support services for such. Under the license agreement, the Company is to provide access to its software on an operational basis and provide training. The Company will also provide unspecified upgrades, if and when available, and 24/7 support over the license term. No Vendor-Specific Objective Evidence was known for any of the elements. After the agreement was executed, the licensee requested modifications to the software because they could not use the software with the requested modifications. The Company made the newly requested modifications to the software. Management delivered the finished product in late December 2015, thus delivery had not deemed to have occurred until such date. The contract termination date was not extended beyond the initial date of June 2018. Revenues are being recorded from the date of delivery over the remaining term of the agreement or approximately 30 months. For these reasons, revenue is recognized ratably from December 2015 until June 2018. During the years ended September 30, 2017 and 2016, the Company recognized revenues of $467,274 and $341,478, and had deferred revenue balances of $316,248 and $783,522, respectively. |
Convertible Note Payable
Convertible Note Payable | 12 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Convertible Note Payable | NOTE 5 – CONVERTIBLE NOTE PAYABLE On September 26, 2017, the Company issued a convertible note to FirstFire Global Opportunities Fund, LLC with a principal amount of $330,000 which includes an original issue discount of $30,000. The Company incurred $8,500 in direct costs. The note accrues interest at 5% per annum and matures on March 26, 2018, six months following the issuance date. The note provides the holder with the right, at any time on or after the note’s maturity date, to convert all or a portion of the outstanding principal balance and accrued interest to shares of the Company’s common stock at a conversion price of $2.00 per share, subject to certain adjustments to the conversion price under certain circumstances. In the event of default, the conversion price shall equal the lower of $2.00 per share or 70% multiplied by the lowest bid price of the Company’s common stock during the 25 trading days preceding the conversion date. An event of default, among other events, is the non-payment of the note at maturity. If shares of the Company’s common stock trade below $2.00 per share on the day following the conversion date, the conversion price shall be retroactively adjusted to equal 75% multiplied by the lowest traded price on the day following the conversion date. If the Company consummates a registered or unregistered primary offering of its securities for capital raising purposes, the holder of the note shall have the right to demand repayment in full or convert the outstanding principal balance and accrued interest into shares of the Company’s common stock at the lower of $2.00 per share or a 20% discount to the offering price to investors in the primary offering. Together with the convertible note, the Company also issued 50,000 shares of its common stock, as well as warrants to purchase an additional 165,000 shares of common stock at $4.50 per share, to FirstFire Global Opportunities Fund, LLC. The relative fair value of the common stock and warrants were $44,609 and $84,227, respectively. Refer to Note 8 below for further discussion of the common stock and warrants that were issued with the convertible note. Based on this allocation, the Company concluded that the convertible note contained a beneficial conversion feature, which was valued at $135,986 and recorded as an additional discount and within additional paid-in capital on the balance sheet, resulting in an aggregate discount of $303,322. The Company is amortizing the discount over the term of the note to interest expense using the effective interest method, commencing October 1, 2017. See Note 10 for a subsequent amendment to the convertible note, which reduced the conversion price of the convertible note, reduced the exercise price of the warrants, and also specified additional shares to be issued. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Sep. 30, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 6 – RELATED PARTY TRANSACTIONS Notes Payable to Chief Executive Officer In September 2017, the Company’s Chief Executive Officer (“CEO”) issued four notes with an aggregate principal amount of $70,000 to the Company. The notes bore interest at 3% per annum and matured one year from the issuance date. The Company repaid all four notes in full at the end of September. As of September 30, 2017, there were no outstanding notes payable to the Company’s CEO. See Note 8 for additional related party transactions. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 7 – COMMITMENTS AND CONTINGENCIES Litigation As of September 30, 2017, the Company is not involved in any material litigation. The Company has settled all litigation in which it was involved. The matter that was pending in the United States Federal District Court for the Southern District of Mississippi was settled and dismissed on July 12, 2016 and the matter pending in Chancery Court of Rankin County Mississippi was settled and dismissed on July 18, 2016. The Company repurchased its stock with the $45,580 it held in escrow as the Company’s contribution to the settlements and all other expenses and costs were covered by the Company’s insurance carrier. The repurchased stock had a fair market value of $61,281 resulting in a gain on settlement. Employment Contracts The Company entered into an employment agreement with its Chief Executive Officer on January 1, 2013. The employment agreement will expire on January 1, 2018 and shall automatically renew for another five years unless terminated in accordance with the provisions of the employment agreement. The employment agreement provides for: i. A monthly salary of $20,833 per month subject to an annual increase of 10% per year and consistent with the Company policy applicable to other senior executives and officers and approval by the Board of Directors. During the year ended September 30, 2017, the base salary was $360,000. ii. A cash bonus of 25% of his annual base salary each year if the Company reaches the following milestones: a. The Company posts annual gross revenues on a consolidated basis of at least $5,000,000; b. The Company’s earnings before the deduction of income taxes and amortization expenses (“EBITA”), including cash extraordinary items but before officer’s bonuses, on a consolidated basis for any year is at least $1,000,000; iii. An automobile allowance of $1,500 per month. iv. A medical insurance allowance of $1,500 per month. v. In the event the executive’s employment is terminated without cause he will receive the entire contract remaining on the agreement. The Company has removed other provisions from the original employment agreement. During the years ended September 30, 2017 and 2016, cash compensation amounted to $390,278 and $397,854 including benefits, respectively. Of the total compensation at September 30, 2017, $96,885 was unpaid. The Chief Executive Officer was prepaid $52,244 in compensation in 2016 which was offset by a $60,000 bonus in 2017. The Chief Executive Officer is still due the remainder of this bonus, which is included in accrued compensation, as of September 30, 2017. During the years ended September 30, 2017 and 2016, stock-based compensation amounted to $1,633,000 and $0, respectively. As of September 30, 2017, we also have employment agreements with Michael Salas and Michael Hufnagel (the “Agreements”). The Agreements are for a term of one year, with Mr. Salas’s Agreement commencing on April 25, 2016 and expiring on April 24, 2017, and Mr. Hufnagel’s commencing on June 27, 2016 and expiring on June 26, 2017. Both Agreements have three successive one-year extensions and were extended. Mr. Salas has an annual salary of $175,000 and quarterly stock issuances equal to $125,000 per year. Mr. Hufnagel has an annual salary of $145,000, an initial sign-on bonus of $10,000 and quarterly stock issuances equal to $60,000 per year. As of September 30, 2017, these individuals were owed common shares for services, but for which shares have not yet been issued. An accrual has been recorded to equity totaling $46,250 to accrue the common shares earned. The Agreement provides that, in addition to receiving paid vacation in accordance with the Company’s policies as well as other customary benefits and provisions, Mr. Salas and Mr. Hufnagel shall receive an annual base salary, a signing bonus and a stock grant. If, at any time during the term of the Agreement, Mr. Salas or Mr. Hufnagel is terminated “without cause,” they will be entitled to receive a cash payment equal to the aggregate compensation payable to them during the remaining term of the Agreement. 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 September 30, 2017 and 2016, totaling $338,437 and $291,715, respectively. According to the original agreement, the unpaid salaries were to accrue interest at each reporting date. Interest expense was $46,722 and $47,119 for the years ended September 30, 2017 and 2016, respectively. Management believes that such amounts were previously satisfied through the issuance of common stock and does not intend to pay such amounts. Commission Agreement The Company entered into an agreement with BrokerBank Securities, Inc. to raise up to $40 million from the issuance of common stock. In connection therewith, the Company agreed to pay a commission of 8% in cash. During the year ended September 30, 2017, the Company paid cash commissions of $73,680. During the year ended September 30, 2016, the Company paid cash commissions of $20,680 and 28,000 shares of common stock. These amounts were netted against the proceeds received. Leases The Company leases 3,906 square feet of office space Buda, Texas. The lease for the Buda facility began on April 1, 2016 and continues until March 31, 2019. The current monthly rent payment of $7,379 continues until March 31, 2018. On April 1, 2018, the monthly rent payment increases to $7,542 and continues until March 31, 2019. The lease shall be automatically renewed for two one-year periods - $7,705 per month through March 31, 2020 and $7,867 per month until March 31, 2021 unless either party to the lease agreement notifies the other in writing at least 180 days prior to the expiration of the current term. Future annual minimum lease obligations at September 30, 2017 are as follows: Year Ending September 30, Amount 2018 $ 89,520 2019 45,252 $ 134,772 |
Stockholders' Deficit
Stockholders' Deficit | 12 Months Ended |
Sep. 30, 2017 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Deficit | NOTE 8 - STOCKHOLDERS’ DEFICIT Common Stock As of September 30, 2017 and 2016, the Company had 6,635,127 and 5,268,859 shares of common stock outstanding, respectively, and was authorized to issue 650,000,000 shares of common stock at a par value of $0.01. Common Stock Issued for Cash During the year ended September 30, 2017, through the utilization of a Private Placement Memorandum and upon receipt of executed Subscription Agreements, the Company issued 724,000 shares of common stock for $1,383,320 in net cash proceeds pursuant to the exemption from the registration provisions of the Securities Act of 1933, as amended, afforded by Rule 506 of Regulation D. During the year ended September 30, 2017, the Company also issued 50,000 shares of common stock with a relative fair value of $44,609 to FirstFire Global Opportunities Fund, LLC based on the relative fair value of the convertible debt and warrants issued. See Note 5 for additional information. During the year ended September 30, 2016, through the utilization of a Private Placement Memorandum and upon receipt of executed Subscription Agreements, the Company issued 513,500 shares of common stock for $946,320 in net cash proceeds. Common Stock Issued to Officers and Employees During the year ended September 30, 2017, the Company issued 300,000 shares of common stock with a fair value of $1,633,000 to the CEO and 242,268 shares of common stock with a fair value of $1,150,922 to its other officers and employees as part of their compensation. The shares were valued on the date of issuance based upon the closing market price of the Company’s common stock as the performance was complete. During the year ended September 30, 2016, the Company issued 10,677 shares of common stock with a fair value of $32,138 and accrued earned shares of common stock amounting to $41,456 as compensation to certain officers pursuant to their employment agreements. The shares were valued on the date of issuance based upon the closing market price of the Company’s common stock as the performance was complete. Common Stock Issued for Services During the year ended September 30, 2017, the Company issued 25,000 shares of common stock with a fair value of $74,500 to StockVest for investor relations services. The shares were valued on the date of issuance based upon the closing market price of the Company’s common stock as the performance was complete. During the year ended September 30, 2016, the Company issued 800 shares for marketing services valued at $1,600 and 5,000 shares for software development valued at $27,500. The Company also issued 75,000 shares for legal services valued at $210,000. The shares for these issuances were valued using the closing market price of the Company's common stock on the commitment date. Common Stock Issued for License Termination During the year ended September 30, 2017, the Company issued 25,000 shares of common stock with a fair value of $106,250 for a software termination settlement. The shares were valued on the date of agreement based upon the closing market price of the Company’s common stock. During the year ended September 30, 2016, the Company issued 307,141 shares of common stock with a fair value of $763,469 for the termination of software licenses related to seven separate licenses in that the software usage would possibly interfere with the Company’s future software development. The shares were valued on the date of agreement based upon the closing market price of the Company’s common stock. Preferred Stock As of both September 30, 2017 and 2016, 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 Preferred A shares can only convert the shares if agreed upon by 50.1% vote of all preferred shareholders. Warrants During the year ended September 30, 2017, the Company issued warrants to FirstFire Opportunities Fund LLC to purchase 165,000 shares of common stock valued at $84,227 based on the relative fair value of the convertible debt and common stock. See Note 5 for additional information. The warrants have an exercise price of $4.50 and a term of two years, subject to adjustment in the event of a lower price per share offered, similar to a ratchet provision. Additionally, during the year ended September 30, 2017, the Company issued 560,000 warrants to the Private Placement Investors. The Private Placement Investors were granted units, which consisted of one share of common stock and a warrant to purchase two additional shares of common stock, for $2 each. The warrants were issued with an exercise price of $4.50 and a term of two years. The fair value of these warrants was $313,192; however, no entry was required to be recorded in equity related to these warrants. Warrant activity for the years ended September 30, 2017 and 2016 is as follows: Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Life Outstanding at September 30, 2015 - $ - - Granted - - - Exercised - - - Canceled/Forfeited - - - Outstanding at September 30, 2016 - - - Granted 725,000 4.50 1.78 Exercised - - - Canceled/Forfeited - - - Outstanding at September 30, 2017 725,000 $ 4.50 1.78 Vested at September 30, 2017 725,000 $ 4.50 1.78 Exerciseable at September 30, 2017 725,000 $ 4.50 1.78 The Company valued the warrants using the Black-Scholes pricing model on the date of grant using the following inputs: Expected life (years) 2.00 Risk-free interest rate 1.45 % Expected volatility 150 % Annual dividend yield 0 % |
Income Taxes
Income Taxes | 12 Months Ended |
Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 9 - INCOME TAXES The provision (benefit) for income taxes from continued operations for the years ended September 30, 2017 and 2016 consist of the following: September 30, 2017 2016 Current: Federal $ - $ - State - - $ - $ - Deferred: Federal $ (781,817 ) $ (603,753 ) State - - (781,817 ) (603,753 ) Valuation allowance 781,817 603,753 Provision (benefit) for income taxes, net $ - $ - The difference between income tax expense computed by applying the federal statutory corporate tax rate and actual income tax expense is as follows: September 30, 2017 2016 Statutory federal income tax rate 34.0 % 34.0 % State income taxes and other 0.0 0.0 Non-deductible stock-based compensation -16.0 -11.0 Valuation allowance (18.0 ) (23.0 ) Effective tax rate 0.0 % 0.0 % Deferred income taxes result from temporary differences in the recognition of income and expenses for the financial reporting purposes and for tax purposes. The tax effect of these temporary differences representing deferred tax asset and liabilities result principally from the following: September 30, 2017 2016 Net operating loss carry forward $ 4,725,000 $ 3,943,000 Valuation allowance (4,725,000 ) (3,943,000 ) Deferred income tax asset $ - $ - The Company has a net operating loss carry forward of $13.9 million available to offset future taxable income. For income tax reporting purposes, the Company’s aggregate unused net operating losses were subject to the limitations of Section 382 of the Internal Revenue Code, as amended. The Company has provided a valuation reserve against the full amount of the net operating loss benefit, because in the opinion of management based upon the earning history of the Company; it is more likely than not that the benefits will not be realized. For income tax reporting purposes, Management has determined that net operating losses prior to February 5, 2015 are subject to an annual limitation of approximately $600,000. For the years ended September 30, 2017 and 2016, the difference between the amounts of income tax expense or benefit that would result from applying the statutory rates to pretax income to the reported income tax expense of $0 is the result of the net operating loss carry forward and the related valuation allowance, as well as non-deductible stock-based compensation. The Company anticipates it will continue to record a valuation allowance against the losses of certain jurisdictions, primarily federal and state, until such time as it is able to determine it is “more-likely-than-not” the deferred tax asset will be realized. Such position is dependent on whether there will be sufficient future taxable income to realize such deferred tax assets. The Company’s effective tax rate may vary from period to period based on changes in estimated taxable income or loss by jurisdiction, changes to the valuation allowance, changes to federal, state or foreign tax laws, future expansion into areas with varying country, state, and local income tax rates, deductibility of certain costs and expenses by jurisdiction. The Company has not filed its federal income tax returns since 2012, which is through the fiscal year ending September 30, 2013. The Company is preparing the 2013 through 2015 filings, which report activity for the fiscal years ending September 30, 2014 through 2016. The September 30, 2017 tax return is not due at this time. The Company intends to remediate the lack of filing timely tax returns immediately. There are currently no ongoing tax examinations. In December 2017, the Tax Cuts and Jobs Act, which provides tax relief for certain corporations, effective January 1, 2018, was passed. Management is currently evaluating the impact of the effects of the regulations. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 10 - SUBSEQUENT EVENTS The Company has continued to raise equity financing through a Private Placement. After September 30, 2017, the Company has sold 42,000 shares of common stock for approximately $77,000, net of offering costs. On October 18, 2017, the Company received a letter of resignation from Michael Salas, Vice President of Marketing and Sales, with an effective date of October 27, 2017. On October 27, 2017, Mike Hufnagel was appointed Chief Operating Officer by the Board of Directors with an effective date of November 1, 2017. On December 14, 2017, the Company entered into the following agreements with Peak One Opportunity Fund L.P. (“Peak One”). The agreements became effective on December 22, 2017. 1. A convertible note in the amount of $300,000 payable in three years in common stock and convertible into common shares at $1.00 per share at Peak One’s option. If an Event of Default has occurred or the date of conversion is on or after the date that is one hundred eighty (180) days after the Issuance Date, the lesser of (a) $1.00 or (b) Seventy percent (70%) of the lowest traded price (as reported by Bloomberg LP) of the Common Stock for the twenty (20) Trading Days immediately preceding the date of the date of conversion of the Debentures (provided, further, that if either the Company is not DWAC Operational at the time of conversion or the Common Stock is traded on the OTC Pink (“OTCP”) at the time of conversion, then Seventy percent (70%) shall automatically adjust to Sixty Five percent (65%) of the lowest traded price (as reported by Bloomberg LP) of the Common Stock for the twenty (20) Trading Days immediately preceding the date of conversion of the Debentures), subject in each case to equitable adjustments resulting from any stock splits, stock dividends, recapitalizations or similar events. The net cash received from the note was $242,600, and will be accounted for as an original issue discount, together with the relative fair value of the warrant and debt. 2. A warrant agreement wherein Peak One may purchase up to 75,000 shares of common stock of the Company for $2.00 per share with an expiration date of five years from the date of the warrant agreement. 3. A stock purchase agreement setting forth the details of the above stated agreements, including an additional convertible debenture in the amount of $300,000. 4. An e quity purchase agreement for up to $7,000,000 of the Company’s common stock and related registration rights agreement, which will require a registration statement to be filed, both a e December 14, 2017, b a a n C a n a Peak One, as well an agreement to issue 275,000 shares of the Company’s common stock as commitment shares to Peak One or it’s designee in connection therewith . On December 20, 2017, the Company entered into a Memorandum of Understanding with FirstFire Global Opportunities Fund, LLC (“FirstFire”), acknowledging that the following adjustments have been triggered due to the Company’s intent to consummate a corporate finance transaction with Peak One Opportunity Fund L.P. 1. FirstFire waives its rights under Section 3.20 of the Senior Convertible Promissory Note (with respect to the enforcement of an event of default) and Sections 4(d) and Section 4(q) of the Securities Purchase Agreement, with respect to the intended transaction with Peak One only. 2. The fixed conversion price of the convertible note shall be reduced from $2.00 to $1.00 pursuant to Section 4.14 of the Senior Convertible Promissory Note. 3. The terms of the warrant shall automatically be adjusted as a result of the intended transaction with Peak One, pursuant to the terms of the warrant. 4. The total commitment shares shall be increased to 137,500 shares of the Company’s common stock pursuant to Section 4.14 of the Senior Convertible Promissory Note, such that the Company shall issue an additional 87,500 shares of the Company’s common stock to FirstFire within three days after December 20, 2017. 5. Section 1.9 of the Senior Convertible Promissory Note shall be adjusted, such that if the Company exercises its right to prepay the convertible note at any time from the 151st through the 180th day following September 26, 2017, then the Company shall pay to FirstFire 130% multiplied by the outstanding principal amount plus accrued and unpaid interest. 6. The warrant exercise price is adjusted to $2.00 per the terms of the original agreement. |
Significant Accounting Polici18
Significant Accounting Policies (Policies) | 12 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Use of Estimates and Assumptions | Use of Estimates and Assumptions The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities, (ii) the disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and (iii) the reported amount of net revenues and expenses recognized during the periods presented. Adjustments made with respect to the use of estimates often relate to improved information not previously available. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of financial statements; accordingly, actual results could differ from these estimates. The Company’s most significant estimates relate to the valuation of its convertible note and the valuation of its common stock. |
Legal | Legal The Company is subject to legal proceedings, claims and liabilities which arise in the ordinary course of business. The Company accrues for losses associated with legal claims when such losses are probable and can be reasonably estimated. These accruals are adjusted as additional information becomes available or circumstances change. Legal fees are charged to expense as they are incurred. |
Cash and Cash Equivalents and Concentration of Credit Risk | Cash and Cash Equivalents and Concentration of Credit Risk The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. At September 30, 2017 and 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. The Company has not experienced any losses in such accounts. |
Website and Software Costs | Website and Software Costs The Company’s accounting for software development costs complies with Accounting Standards Codification (“ASC”) 985-20, Costs of Software to be Sold, Leased or Marketed, whereby capitalization begins when the Company has a working prototype and has been tested, thereby achieving technological feasibility. This occurs very late in the development stage of the software product. The Company has determined the software costs do not fall under ASC 350-40, Internal-Use Software, based on the guidance in ASC 985-605-55-119 through 125 which covers guidance for hosting agreements. The Company’s product will generally not be hosted and will reside on the technology platform available to the user. |
Fixed Assets | Fixed Assets Fixed assets are recorded at cost and depreciation is provided over the estimated useful lives of the related assets using the straight-line method for financial statement purposes. The estimated life of equipment is three (3) years. The estimated life of our leasehold improvements is the lesser of the term of the related lease and useful life. |
Long-Lived Assets | Long-Lived Assets Long-lived assets are evaluated for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate. Each impairment test is based on a comparison of the undiscounted future cash flows to the recorded value of the asset. If impairment is indicated, the asset is written down to its estimated fair value. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company's financial instruments consisted primarily of cash, accounts payable and accrued expenses, deferred revenue, convertible note payable, as well as embedded conversion features. The carrying amounts of such financial instruments approximate their respective estimated fair value due to the short-term maturities and approximate market interest rates of these instruments. The embedded conversion feature in the convertible note payable will have to be re-evaluated when the convertible note payable first becomes convertible, which is after six months. At which time, it is probable that the embedded convertible feature will become a derivative which requires bifurcation and is separately recorded as a derivative liability at its estimated fair value. Fair value is focused on an exit price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Within the measurement of fair value, the use of market-based information is prioritized over entity specific information and a three-level hierarchy for fair value measurements is used based on the nature of inputs used in the valuation of an asset or liability as of the measurement date. The three-level hierarchy for fair value measurements is defined as follows: ● Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets; liabilities in active markets; ● Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability other than quoted prices, either directly or indirectly, including inputs in markets that are not considered to be active; or directly or indirectly including inputs in markets that are not considered to be active; ● Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement. |
Convertible Debt | Convertible Debt Convertible debt is accounted for under the guidelines established by ASC 470-20, Debt with Conversion and Other Options When equity instruments, such as common stock and/or warrants, are issued with convertible debt, the net proceeds from the transaction are allocated to the convertible debt and equity instruments based on their relative fair values. The proceeds allocated to the equity instruments may reduce the carrying value of the convertible debt, and such discount is amortized to interest expense over the term of the debt. In the event a convertible note has an embedded conversion feature which, among other features, allows an unlimited number of common shares to be issued upon conversion since the conversion price is based on the quoted market price of the Company’s common stock, the Company records a derivative liability, which is marked to market at each reporting period and charged to the statement of operations in accordance with ASC 815, Accounting for Derivative Financial Instruments and Hedging Activities |
Customer Concentration | Customer Concentration During the years ended September 30, 2017 and 2016, one customer accounted for 100% of revenues. The loss of this customer will have a significant impact on operations. |
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, rights to unspecified future products and maintenance, is recognized ratably over the term of the subscription period. When the fair value of VSOE of 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 of $316,248 and $783,522 as of September 30, 2017 and 2016, respectively. |
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. Our research and development costs incurred for the years ended September 30, 2017 and 2016 were $1,087,372 and $755,159, respectively. |
Share-Based Compensation | Share-Based Compensation The Company measures the cost of services provided by employees in exchange for an award of an equity instrument based on the grant-date fair value of the award. Compensation cost is recognized over the vesting or requisite service period. The Black-Scholes option-pricing model is used to estimate the fair value of options or warrants granted. Performance-based grants should be recognized prior to completion if the assessment is that it is probable that the performance condition will be met. For non-employees, the Company uses the fair value at each reporting date over the service period, which is usually the vesting period. |
Income Taxes | Income Taxes The Company utilizes the asset and liability method in accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for operating loss and tax credit carry-forwards and 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 year 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 the results of operations in the period that includes the enactment date. A valuation allowance is recorded to reduce the carrying amounts of deferred tax assets unless it is more likely than not that the value of such assets will be realized. The Company uses the two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not, that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount, which is more than 50% likely of being realized upon ultimate settlement. The Company considers many factors when evaluating and estimating the Company’s tax positions and tax benefits, which may require periodic adjustments. The Company did not record any liabilities for uncertain tax positions for the years ended September 30, 2017 or 2016. |
Basic and Diluted Net Loss Per Common Share | Basic and Diluted Net Loss per Common Share Basic income (loss) per share is computed by dividing net income (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 September 30, 2017 and 2016, the Company had 10,000,000 shares of preferred stock outstanding which are convertible into 15,000,000 shares of common stock. 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. |
Recent Accounting Announcements | Recent Accounting Announcements The Financial Accounting Standards Board (“FASB”) issues Accounting Standards Updates (“ASU”) to amend the authoritative literature in the ASC. There have been a number of ASUs to date that amend the original text of 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. In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260) – Accounting for Certain Financial Instruments with Down Round Features In February 2016, the FASB issued ASU 2016-02, Leases (Topic 840), to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The amendments in this standard are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, for a public entity. Early adoption of the amendments in this standard is permitted for all entities and the Company must recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The Company is currently in the process of evaluating the effect this guidance will have on its financial statements and related disclosures. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). Under this guidance, revenue is recognized when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. The updated standard will replace most existing revenue recognition guidance under U.S. GAAP when it becomes effective and permits the use of either the retrospective or cumulative effect transition method. Early adoption is not permitted. The updated standard will be effective for the Company beginning January 1, 2018. The Company is currently evaluating the effect that the updated standard will have on its financial statements and related disclosures. In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements—Going Concern: Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Subtopic 205-40), which requires management to evaluate, at each annual and interim reporting period, whether there are conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date the financial statements are issued and provide related disclosures. ASU No. 2014-15 is effective for annual periods ending after December 15, 2016 and interim periods thereafter. Early application is permitted. The Company is currently evaluating the effect that the updated standard will have on its financial statements and related disclosures. In November 2015, the FASB issued ASU No. 2015-17, Income Taxes: Balance Sheet Classification of Deferred Taxes (Topic 740), which requires deferred tax liabilities and assets to be classified as noncurrent in a classified statement of financial position. ASU No. 2015-17 will align the presentation of deferred income tax assets and liabilities with International Financial Reporting Standards. The new standard will be effective for fiscal years beginning after December 15, 2016, including interim periods within those annual years, and early application is permitted. The Company is currently evaluating the effect that the updated standard will have on its financial statements and related disclosures. |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Annual Minimum Operating Lease Obligations | Future annual minimum lease obligations at September 30, 2017 are as follows: Year Ending September 30, Amount 2018 $ 89,520 2019 45,252 $ 134,772 |
Stockholders' Deficit (Tables)
Stockholders' Deficit (Tables) | 12 Months Ended |
Sep. 30, 2017 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Warrant Activity | Warrant activity for the years ended September 30, 2017 and 2016 is as follows: Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Life Outstanding at September 30, 2015 - $ - - Granted - - - Exercised - - - Canceled/Forfeited - - - Outstanding at September 30, 2016 - - - Granted 725,000 4.50 1.78 Exercised - - - Canceled/Forfeited - - - Outstanding at September 30, 2017 725,000 $ 4.50 1.78 Vested at September 30, 2017 725,000 $ 4.50 1.78 Exerciseable at September 30, 2017 725,000 $ 4.50 1.78 |
Schedule of Warrants Valued Using Black-Scholes Pricing Model | The Company valued the warrants using the Black-Scholes pricing model on the date of grant using the following inputs: Expected life (years) 2.00 Risk-free interest rate 1.45 % Expected volatility 150 % Annual dividend yield 0 % |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of Provision (Benefit) for Income Taxes from Continued Operations | The provision (benefit) for income taxes from continued operations for the years ended September 30, 2017 and 2016 consist of the following: September 30, 2017 2016 Current: Federal $ - $ - State - - $ - $ - Deferred: Federal $ (781,817 ) $ (603,753 ) State - - (781,817 ) (603,753 ) Valuation allowance 781,817 603,753 Provision (benefit) for income taxes, net $ - $ - |
Schedule of Federal Statutory Corporate Tax Rate and Actual Income Tax Expense | The difference between income tax expense computed by applying the federal statutory corporate tax rate and actual income tax expense is as follows: September 30, 2017 2016 Statutory federal income tax rate 34.0 % 34.0 % State income taxes and other 0.0 0.0 Non-deductible stock-based compensation -16.0 -11.0 Valuation allowance (18.0 ) (23.0 ) Effective tax rate 0.0 % 0.0 % |
Schedule of Deferred Tax Assets and Liabilities | The tax effect of these temporary differences representing deferred tax asset and liabilities result principally from the following: September 30, 2017 2016 Net operating loss carry forward $ 4,725,000 $ 3,943,000 Valuation allowance (4,725,000 ) (3,943,000 ) Deferred income tax asset $ - $ - |
Risks and Uncertainties (Detail
Risks and Uncertainties (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Accumulated deficit | $ 50,201,730 | $ 45,780,569 |
Original issue discount | 303,322 | |
Convertible note issued | $ 291,500 | |
Convertible note maturity description | Matures six months following the issuance date. | |
December 2017 [Member] | ||
Convertible note issued | $ 300,000 | |
Convertible note maturity description | Payable in three years | |
Convertible Notes [Member] | ||
Convertible note principal amount | $ 330,000 | |
Original issue discount | $ 30,000 | |
Debt interest rate | 5.00% |
Significant Accounting Polici23
Significant Accounting Policies (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
FDIC insured cash | $ 250,000 | |
Deferred revenue | 316,248 | $ 783,522 |
Research and development costs | $ 1,087,372 | $ 755,159 |
Series A preferred stock, shares outstanding | 10,000,000 | 10,000,000 |
Number of shares issued for conversion | 15,000,000 | 15,000,000 |
Sales Revenue, Net [Member] | Customer Concentration Risk [Member] | ||
Customer concentration percentage | 100.00% | 100.00% |
Equipment [Member] | ||
Assets estimated useful life | 3 years |
Software Licenses (Details Narr
Software Licenses (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Revenue recognized | $ 467,274 | $ 341,478 |
Deferred revenue | 7,836 | 341,522 |
Gawk [Member] | ||
Payment to software license | $ 1,125,000 | |
License expiration period | 4 years | |
Revenue recognized | $ 467,274 | 341,478 |
Deferred revenue | $ 316,248 | $ 783,522 |
Convertible Note Payable (Detai
Convertible Note Payable (Details Narrative) | Sep. 26, 2017USD ($)Integer$ / sharesshares | Sep. 30, 2017USD ($)shares | Sep. 30, 2016USD ($) |
Debt instrument original issue discount | $ 303,322 | ||
FirstFire Global Opportunities Fund, LLC [Member] | |||
Debt instrument principal amount | $ 330,000 | ||
Debt instrument original issue discount | 30,000 | ||
Direct cost | $ 8,500 | ||
Debt interest rate | 5.00% | ||
Debt instrument maturity date | Mar. 26, 2018 | ||
Debt conversion price | $ / shares | $ 2 | ||
Common stock lowest bid price percentage | 70.00% | ||
Debt instrument convertible trading days | Integer | 25 | ||
Issue of common stock | shares | 50,000 | ||
Warrant purchase additional common stock | shares | 165,000 | 165,000 | |
Shares issued price per share | $ / shares | $ 4.50 | ||
Fair value of common stock | $ 44,609 | ||
Common stock warrants issued, value | $ 84,227 | ||
FirstFire Global Opportunities Fund, LLC [Member] | Common Stock Trade Below $2.00 [Member] | |||
Common stock lowest bid price percentage | 75.00% | ||
Discount percentage to offering price | 20.00% |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | |
Proceeds from issuance of notes | $ 70,000 | ||
Note, maturity date, description | Matures six months following the issuance date. | ||
Chief Executive Officer [Member] | Four Notes [Member] | |||
Proceeds from issuance of notes | $ 70,000 | ||
Note, interest rate | 3.00% | ||
Note, maturity date, description | Matured one year from the issuance date. | ||
Notes description | The Company repaid all four notes in full at the end of September. As of September 30, 2017, there were no outstanding notes payable to the Companys CEO. |
Commitments and Contingencies27
Commitments and Contingencies (Details Narrative) | 12 Months Ended | |
Sep. 30, 2017USD ($)ft² | Sep. 30, 2016USD ($)shares | |
Stock repurchased | $ 45,580 | |
Gain on fair market value of stock repurchased | 61,281 | |
Cash compensation | 390,278 | $ 397,854 |
Unpaid compensation | 96,885 | |
Stock-based compensation | 2,858,422 | 312,694 |
Accrued and unpaid | 338,437 | 291,715 |
Interest expense | $ 46,722 | 47,119 |
Area of lease | ft² | 3,906 | |
Lease rent renewed period | 2 years | |
BrokerBank Securities, Inc [Member] | ||
Proceeds from issuance shares | $ 40,000,000 | |
Percentage of commission to be paid | 8.00% | |
Commission paid | $ 73,680 | $ 20,680 |
Commissions paid by shares of common stock | shares | 28,000 | |
March 31, 2018 [Member] | ||
Current rental rate | 7,379 | |
March 31, 2019 [Member] | ||
Current rental rate | 7,542 | |
March 31, 2020 [Member] | ||
Current rental rate | 7,705 | |
March 31, 2021 [Member] | ||
Current rental rate | 7,867 | |
Chief Executive Officer [Member] | ||
Prepaid compensation | $ 52,244 | |
Bonus | 60,000 | |
Stock-based compensation | 1,633,000 | $ 0 |
Employment Agreement [Member] | ||
Monthly salary | $ 20,833 | |
Salary increase percentage description | A monthly salary of $20,833 per month subject to an annual increase of 10% per year and consistent with the Company policy applicable to other senior executives and officers and approval by the Board of Directors. During the year ended September 30, 2017, the base salary was $360,000. | |
Base salary | $ 360,000 | |
Annual base salary of cash bonus, percentage | 25.00% | |
Posts annual gross revenues | $ 5,000,000 | |
Officer's bonuses, description | The Companys earnings before the deduction of income taxes and amortization expenses (EBITA), including cash extraordinary items but before officers bonuses, on a consolidated basis for any year is at least $1,000,000 | |
Per month automobile allowance | $ 1,500 | |
Per month medical insurance allowance | 1,500 | |
Accrued common stock shares earned | 46,250 | |
Employment Agreement [Member] | Michael Salas [Member] | ||
Base salary | $ 175,000 | |
Agreement expiring date | Apr. 24, 2017 | |
Quarterly stock issuances | $ 125,000 | |
Employment Agreement [Member] | Michael Hufnagel [Member] | ||
Base salary | 145,000 | |
Bonus | $ 10,000 | |
Agreement expiring date | Jun. 26, 2017 | |
Quarterly stock issuances | $ 60,000 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Future Annual Minimum Operating Lease Obligations (Details) | Sep. 30, 2017USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,018 | $ 89,520 |
2,019 | 45,252 |
TOTAL | $ 134,772 |
Stockholders' Deficit (Details
Stockholders' Deficit (Details Narrative) - USD ($) | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 26, 2017 | |
Common stock, shares outstanding | 6,635,127 | 5,268,859 | |
Common stock, shares authorized | 650,000,000 | 650,000,000 | |
Preferred stock, par value | $ 0.01 | $ 0.01 | |
Common stock issued to officers and employees | $ 2,783,922 | $ 73,594 | |
Compensation | 390,278 | 397,854 | |
Number of shares issued for services, value | $ (74,500) | $ (239,100) | |
Number of shares issued for license termination | 25,000 | 307,141 | |
Number of shares issued for license termination, value | $ 106,250 | $ 763,469 | |
Series a preferred stock, shares authorized | 10,000,000 | 10,000,000 | |
Series a preferred stock, shares outstanding | 10,000,000 | 10,000,000 | |
Number of shares issued for conversion | 15,000,000 | 15,000,000 | |
Preferred stock, voting rights | Each share of the Preferred Stock has 150 votes. | ||
Percentage of vote for preferred shareholders | 50.10% | ||
Marketing Services [Member] | |||
Number of shares issued for services | 800 | ||
Number of shares issued for services, value | $ 1,600 | ||
Software Development [Member] | |||
Number of shares issued for services | 5,000 | ||
Number of shares issued for services, value | $ 27,500 | ||
Legal Services [Member] | |||
Number of shares issued for services | 75,000 | ||
Number of shares issued for services, value | $ 210,000 | ||
Investor [Member] | |||
Number of shares issued for services | 25,000 | ||
Number of shares issued for services, value | $ 74,500 | ||
Chief Executive Officer [Member] | |||
Common stock issued to officers and employees | $ 300,000 | ||
Common stock issued to officers and employees, shares | 1,633,000 | ||
Officer [Member] | |||
Number of common stock shares issued to officers | 242,268 | ||
Number of common stock shares issued to officers, value | $ 1,150,922 | ||
Employment Agreement [Member] | Officer [Member] | |||
Common stock issued to officers and employees | $ 10,677 | ||
Common stock issued to officers and employees, shares | 32,138 | ||
Compensation | $ 41,456 | ||
FirstFire Global Opportunities Fund, LLC [Member] | |||
Number of shares issued for cash | 50,000 | ||
Number of shares issued for cash, value | $ 44,609 | ||
Warrant outstanding shares | 165,000 | 165,000 | |
Common stock warrants issued, value | $ 84,227 | ||
Warrant exercise price | $ 4.50 | ||
Warrant term | 2 years | ||
Private Placement Memorandum [Member] | Subscription Agreements [Member] | |||
Number of shares issued for cash | 513,500 | ||
Number of shares issued for cash, value | $ 946,320 | ||
Private Placement Investors [Member] | |||
Warrant outstanding shares | 560,000 | ||
Common stock warrants issued, value | $ 84,227 | ||
Warrant exercise price | $ 4.50 | ||
Warrant term | 2 years | ||
Warrant to purchase shares | 2 | ||
Fair value of warrants | $ 313,192 | ||
Subscription Agreement [Member] | |||
Number of shares issued for cash | 724,000 | ||
Number of shares issued for cash, value | $ 1,383,320 |
Stockholders' Deficit - Schedul
Stockholders' Deficit - Schedule of Warrant Activity (Details) - $ / shares | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Stockholders Deficit - Schedule Of Warrant Activity Details | ||
Number of warrant, outstanding beginning | ||
Number of warrant, granted | 725,000 | |
Number of warrant, exercised | ||
Number of warrant, canceled/forfeited | ||
Number of warrant outstanding ending | 725,000 | |
Number of warrant, vested | 725,000 | |
Number of warrant, exercisable | $ 725,000 | |
Weighted average exercise price outstanding beginning | ||
Weighted average exercise price, granted | 4.50 | |
Weighted average exercise price, exercised | ||
Weighted average exercise price, canceled/forfeited | ||
Weighted average exercise price, outstanding ending | 4.50 | |
Weighted average exercise price, vested | 4.50 | |
Weighted average exercise price, exercisable | $ 4.50 | |
Weighted average remaining life, granted | 1 year 9 months 11 days | |
Weighted average remaining life, ending | 1 year 9 months 11 days | |
Weighted average remaining life, vested | 1 year 9 months 11 days | |
Weighted average remaining life, exercisable | 1 year 9 months 11 days |
Stockholders' Deficit - Sched31
Stockholders' Deficit - Schedule of Warrants Valued Using Black-Scholes Pricing Model (Details) | 12 Months Ended |
Sep. 30, 2017 | |
Stockholders' Equity Note [Abstract] | |
Expected life (years) | 2 years |
Risk-free interest rate | 1.45% |
Expected volatility | 150.00% |
Annual dividend yield | 0.00% |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | Feb. 05, 2015 | Sep. 30, 2017 | Sep. 30, 2016 |
Income Tax Disclosure [Abstract] | |||
Net operating loss carry forward | $ 13,900,000 | ||
Net operating loss | $ 600,000 | (4,368,024) | $ (2,654,238) |
Income tax expense |
Income Taxes - Schedule of Prov
Income Taxes - Schedule of Provision (Benefit) for Income Taxes from Continued Operations (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | ||
Current Federal | ||
Current State | ||
Current Federal and State Income Tax Expense (Benefit) | ||
Deferred Federal | (781,817) | (603,753) |
Deferred State | ||
Deferred Federal and State Income Tax Expense (Benefit) | (781,817) | (603,753) |
Valuation allowance | 781,817 | 603,753 |
Provision (benefit) for income taxes, net |
Income Taxes - Schedule of Fede
Income Taxes - Schedule of Federal Statutory Corporate Tax Rate and Actual Income Tax Expense (Details) | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | ||
Statutory federal income tax rate | 34.00% | 34.00% |
State income taxes and other | 0.00% | 0.00% |
Non-deductible stock-based compensation | (16.00%) | (11.00%) |
Valuation allowance | (18.00%) | (23.00%) |
Effective tax rate | 0.00% | 0.00% |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) | Sep. 30, 2017 | Sep. 30, 2016 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carry forward | $ 4,725,000 | $ 3,943,000 |
Valuation Allowance | (4,725,000) | (3,943,000) |
Deferred income tax asset |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Dec. 20, 2017 | Dec. 14, 2017 | Sep. 26, 2017 | Sep. 30, 2017 |
FirstFire Global Opportunities Fund, LLC [Member] | ||||
Debt conversion price | $ 2 | |||
Warrant outstanding shares | 165,000 | 165,000 | ||
Warrant exercise price | $ 4.50 | |||
Warrant term | 2 years | |||
Debt instrument convertible percentage | 70.00% | |||
Subsequent Event [Member] | FirstFire Global Opportunities Fund, LLC [Member] | Senior Convertible Promissory Note [Member] | ||||
Number of commitment shares increased | 137,500 | |||
Number of common stock shares issued | 87,500 | |||
Debt instrument convertible percentage | 130.00% | |||
Subsequent Event [Member] | FirstFire Global Opportunities Fund, LLC [Member] | Senior Convertible Promissory Note [Member] | Maximum [Member] | ||||
Debt conversion price | $ 2 | |||
Subsequent Event [Member] | FirstFire Global Opportunities Fund, LLC [Member] | Senior Convertible Promissory Note [Member] | Minimum [Member] | ||||
Debt conversion price | 1 | |||
Subsequent Event [Member] | Original Agreement [Member] | FirstFire Global Opportunities Fund, LLC [Member] | ||||
Warrant exercise price | $ 2 | |||
Subsequent Event [Member] | Peak One Opportunity Fund L.P. [Member] | ||||
Convertible notes payable | $ 300,000 | |||
Debt instrument term | 3 years | |||
Debt conversion price | $ 1 | |||
Debt conversion features description | If an Event of Default has occurred or the date of conversion is on or after the date that is one hundred eighty (180) days after the Issuance Date, the lesser of (a) $1.00 or (b) Seventy percent (70%) of the lowest traded price (as reported by Bloomberg LP) of the Common Stock for the twenty (20) Trading Days immediately preceding the date of the date of conversion of the Debentures (provided, further, that if either the Company is not DWAC Operational at the time of conversion or the Common Stock is traded on the OTC Pink (OTCP) at the time of conversion, then Seventy percent (70%) shall automatically adjust to Sixty Five percent (65%) of the lowest traded price (as reported by Bloomberg LP) of the Common Stock for the twenty (20) Trading Days immediately preceding the date of conversion of the Debentures), subject in each case to equitable adjustments resulting from any stock splits, stock dividends, recapitalizations or similar events. | |||
Proceeds from issuance of debt | $ 242,600 | |||
Subsequent Event [Member] | Peak One Opportunity Fund L.P. [Member] | Warrant Agreement [Member] | ||||
Warrant outstanding shares | 75,000 | |||
Warrant exercise price | $ 2 | |||
Warrant term | 5 years | |||
Subsequent Event [Member] | Peak One Opportunity Fund L.P. [Member] | Stock Purchase Agreement [Member] | ||||
Convertible notes payable | $ 300,000 | |||
Subsequent Event [Member] | Peak One Opportunity Fund L.P. [Member] | Equity Purchase Agreement [Member] | ||||
Stock issued during period, value, acquisitions | $ 7,000,000 | |||
Stock issued during period, shares, acquisitions | 275,000 | |||
Subsequent Event [Member] | Private Placement [Member] | ||||
Sale of stock of during period | 42,000 | |||
Sale of stock of during period, value | $ 77,000 |