SideChannel (SDCH) 10-Q 5 Jun 19 2019 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Mar. 31, 2019	May 30, 2019
Document And Entity Information
Entity Registrant Name	CIPHERLOC Corp
Entity Central Index Key	0001022505
Document Type	10-Q
Document Period End Date	Mar. 31, 2019
Amendment Flag	false
Current Fiscal Year End Date	--09-30
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Ex Transition Period	false
Entity Common Stock, Shares Outstanding		40,792,510
Trading Symbol	CLOK
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2019

Condensed Balance Sheets (Unaud

Condensed Balance Sheets (Unaudited) - USD ($)	Mar. 31, 2019	Sep. 30, 2018
Current assets
Cash and cash equivalents	$ 11,090,605	$ 14,056,346
Prepaid expenses	95,022
Total current assets	11,185,627	14,056,346
Other assets	12,216	12,218
Note receivable	401,000
Fixed assets, net	53,073	20,050
Total assets	11,651,916	14,088,614
Current liabilities
Accounts payable and accrued liabilities	36,812	52,043
Accrued compensation	149,616	72,489
Total current liabilities	186,428	124,532
Commitments and contingencies (Note 4)
Series A convertible preferred stock, $0.01 par value, 10,000,000 shares authorized; 1,000,000 issued and outstanding as of March 31, 2019 and September 30, 2018	10,000	10,000
Common stock, $0.01 par value, 650,000,000 shares authorized; 40,792,510 and 40,743,917 issued and outstanding as of March 31, 2019 and September 30, 2018, respectively	407,925	407,438
Additional paid-in capital	68,179,886	68,169,157
Accumulated deficit	(57,132,323)	(54,622,513)
Total stockholders' equity	11,465,488	13,964,082
Total liabilities and stockholders' equity	$ 11,651,916	$ 14,088,614

Condensed Balance Sheets (Una_2

Condensed Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Mar. 31, 2019	Sep. 30, 2018
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	1,000,000	1,000,000
Series A convertible preferred stock, shares outstanding	1,000,000	1,000,000
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	650,000,000	650,000,000
Common stock, shares issued	40,792,510	40,743,917
Common stock, shares outstanding	40,792,510	40,743,917

Condensed Statements of Operati

Condensed Statements of Operations (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018
Income Statement [Abstract]
Revenues		$ 113,129		$ 228,771
Cost of revenues		45,506		75,806
Gross profit		67,623		152,965
Operating expenses
General and administrative	505,807	230,366	1,038,781	414,286
Sales and marketing	434,800	22,195	648,775	45,162
Research and development	479,677	251,136	825,572	365,988
Settlement expense		81,000		81,000
Total operating expenses	1,420,284	584,697	2,513,128	906,436
Operating loss	(1,420,284)	(517,074)	(2,513,128)	(753,471)
Other income (expense)
Gain (loss) on extinguishment of convertible note		66,912		(291,126)
Excess fair value of derivatives in convertible note				(486,745)
Change in fair value of embedded conversion features in convertible notes		256,669		120,737
Interest income (expense), net	2,421	(312,282)	3,318	(508,318)
Net loss	$ (1,417,863)	$ (505,775)	$ (2,509,810)	$ (1,918,923)
Net loss per common share - basic and diluted	$ (0.03)	$ (0.03)	$ (0.06)	$ (0.16)
Weighted average common shares outstanding - basic and diluted	40,786,279	17,806,123	40,774,152	12,228,585

Condensed Statements of Cash Fl

Condensed Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (1,417,863)	$ (505,775)	$ (2,509,810)	$ (1,918,923)
Adjustments to reconcile net loss to net cash flows used in operating activities:
Depreciation			4,036	2,608
Stock-based compensation			11,216	167,743
Stock issued for services			40,000
Legal settlement		81,000		81,000
Loss on extinguishment of convertible notes		(66,912)		291,126
Excess fair value of derivatives in convertible note				486,745
Change in fair value of embedded conversion features in convertible notes		(256,669)		(120,737)
Debt discount amortization				482,935
Changes in operating assets and liabilities:
Prepaid expenses and other			(95,020)
Accounts payable and accrued liabilities			(15,231)	(107,138)
Accrued compensation			77,127
Deferred revenue				(228,771)
Net cash used in operating activities			(2,487,682)	(863,412)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of fixed assets			(37,059)
Funding of note receivable			(401,000)
Net cash used in investing activities			(438,059)
CASH FLOWS FROM FINANCING ACTIVITIES:
Common stock issued for cash				1,177,325
Proceeds from convertible note, net				242,600
Repayment of convertible notes				(350,000)
Repayment of oversubscription			(40,000)
Net cash provided by (used in) financing activities			(40,000)	1,069,925
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS			(2,965,741)	206,513
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD			14,056,346	227,396
CASH AND CASH EQUIVALENTS, END OF PERIOD	$ 11,090,605	$ 433,909	11,090,605	433,909
Non-cash investing and financing activities:
Conversion of debt into common stock				77,500
Conversion of preferred stock to common stock				$ 135,000

Condensed Statements of Stockho

Condensed Statements of Stockholders' Equity (Unaudited) - USD ($)	Preferred Stock [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Accumulated Deficit [Member]	Total
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
Common stock issued for cash		$ 370	56,830		57,200
Common stock issued for cash, shares		37,000
Common stock issued to officers and employees		$ 55	9,945		10,000
Common stock issued to officers and employees, shares		5,537
Convertible notes - issuance of common stock		$ 3,625	498,875		502,500
Convertible notes - issuance of common stock, shares		362,500
Convertible note - issuance of warrants			90,345		90,345
Convertible note - amendment of existing warrants			74,041		74,041
Net loss				(1,413,148)	(1,413,148)
Balance at Dec. 31, 2017	$ 100,000	$ 70,401	50,108,483	(51,614,878)	(1,335,994)
Balance, shares at Dec. 31, 2017	10,000,000	7,040,164
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
Net loss					(1,918,923)
Balance at Mar. 31, 2018	$ 10,000	$ 219,990	51,485,262	(52,120,653)	(405,401)
Balance, shares at Mar. 31, 2018	1,000,000	21,999,081
Balance at Dec. 31, 2017	$ 100,000	$ 70,401	50,108,483	(51,614,878)	(1,335,994)
Balance, shares at Dec. 31, 2017	10,000,000	7,040,164
Common stock issued for cash		$ 12,760	1,107,365		1,120,125
Common stock issued for cash, shares		1,276,000
Common stock issued to officers and employees		$ 829	156,914		157,743
Common stock issued to officers and employees, shares		82,917
Settlement of convertible note		$ 500	77,000		77,500
Settlement of convertible note, shares		50,000
Common stock issued for legal settlement		$ 500	80,500		81,000
Common stock issued for legal settlement, shares		50,000
Related party conversion of preferred stock	$ (90,000)	$ 135,000	(45,000)
Related party conversion of preferred stock, shares	(9,000,000)	13,500,000
Net loss				(505,775)	(505,775)
Balance at Mar. 31, 2018	$ 10,000	$ 219,990	51,485,262	(52,120,653)	(405,401)
Balance, shares at Mar. 31, 2018	1,000,000	21,999,081
Balance at Sep. 30, 2018	$ 10,000	$ 407,438	68,169,157	(54,622,513)	13,964,082
Balance, shares at Sep. 30, 2018	1,000,000	40,743,917
Common stock issued for services		$ 200	39,800		40,000
Common stock issued for services, shares		20,000
Correction of shares outstanding		$ 193	(193)
Correction of shares outstanding, shares		19,247
Net loss				(1,091,947)	(1,091,947)
Balance at Dec. 31, 2018	$ 10,000	$ 407,831	68,208,764	(55,714,460)	12,912,135
Balance, shares at Dec. 31, 2018	1,000,000	40,783,164
Balance at Sep. 30, 2018	$ 10,000	$ 407,438	68,169,157	(54,622,513)	$ 13,964,082
Balance, shares at Sep. 30, 2018	1,000,000	40,743,917
Related party conversion of preferred stock, shares					1,500,000
Refund of oversubscription					$ 40,000
Net loss					(2,509,810)
Balance at Mar. 31, 2019	$ 10,000	$ 407,925	68,179,886	(57,132,323)	11,465,488
Balance, shares at Mar. 31, 2019	1,000,000	40,792,510
Balance at Dec. 31, 2018	$ 10,000	$ 407,831	68,208,764	(55,714,460)	12,912,135
Balance, shares at Dec. 31, 2018	1,000,000	40,783,164
Common stock issued to an employee		$ 94	11,122		11,216
Common stock issued to an employee, shares		9,346
Refund of oversubscription			(40,000)		(40,000)
Net loss				(1,417,863)	(1,417,863)
Balance at Mar. 31, 2019	$ 10,000	$ 407,925	$ 68,179,886	$ (57,132,323)	$ 11,465,488
Balance, shares at Mar. 31, 2019	1,000,000	40,792,510

The Company

The Company	6 Months Ended
	Mar. 31, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]
The Company	NOTE 1 – THE COMPANY Cipherloc Corporation (the “Company” or “Cipherloc”) was incorporated in Texas on June 22, 1953 as American Mortgage Company. In March 2015, the Company changed its name to Cipherloc Corporation.

Basis of Presentation of Interi

Basis of Presentation of Interim Financial Statements	6 Months Ended
	Mar. 31, 2019
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 the opinion of management, 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, 2019 are not necessarily indicative of the results that may be expected for the year ending September 30, 2019 or any future period. 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, 2018 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, 2018 included within the Company’s Form 10-K, as filed with the Securities and Exchange Commission.

Summary of Significant Accounti

Summary of Significant Accounting Policies	6 Months Ended
	Mar. 31, 2019
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	NOTE 3 - 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 a maturity at the time of purchase of three months or less to be cash equivalents. At March 31, 2019 and September 30, 2018, cash includes cash on hand and cash in the bank. The Company maintains its cash in accounts held by a large, globally recognized bank, and the balance of such accounts, 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, 2019, $10,840,605 of the Company’s cash balance was uninsured. Basic and Diluted Net Loss per Common Share Basic net loss per share is computed by dividing net loss for the period 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 net loss 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, 2019 and September 30, 2018, the Company had 1,000,000 shares of preferred stock outstanding, which are convertible into 1,500,000 shares of common stock. Diluted net loss per share is the same as basic net loss per share during periods where net losses are incurred because the inclusion of the potential common stock equivalents would be anti-dilutive as a result of the net loss. During the three and six months ended March 31, 2019, 25,015,866 warrants and 1,500,000 shares of convertible preferred stock were excluded from the calculation of diluted net loss per share because their effect would be anti-dilutive. During the three and six months ended March 31, 2018, 1,241,000 warrants to purchase common stock and 1,500,000 shares of convertible preferred stock were excluded from the calculation of diluted net loss per share because their effect would be anti-dilutive. Research and Development and Software Development Costs The Company expenses all research and development costs, including patent and software development costs. Adoption of Recent Accounting Standard In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) Recent Accounting Pronouncements The FASB issues ASUs to amend the authoritative literature in the ASC. There have been a number of ASUs to date that amend the original text of the ASC. Other than those discussed below, 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 February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) Leases (Topic 842): Targeted Improvements In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurements (Topic 820) – Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement In June 2018, the FASB issued ASU No. 2018-07, Compensation – Stock Compensation (Topic 718) – Improvements to Nonemployee Share-Based Payment Accounting Compensation – Stock Compensation

Notes Receivable

Notes Receivable	6 Months Ended
	Mar. 31, 2019
Receivables [Abstract]
Notes Receivable	NOTE 4 – NOTES RECEIVABLE The Company advanced $401,000 to Quality Health Care International, LLC (“QHC”) during the quarter ended March 31, 2019. Subsequent to March 31, 2019, the Company advanced an additional $15,000. As of May 30, 2019, the Company executed a note receivable with QHC in the amount of $416,000. The note provides that if the funds are repaid within one year of the date of the note any interest charge will be waived. Beyond one year, the note will bear interest at the rate of 4% annuum. The due date of the note is on or before May 29, 2021. The effect of the waived interest is deemed to be de minimis. The purpose of the funds is to expedite training and development of a marketing program within QHC to sale the Company’s product to QHC’s hospital networks. The Company also entered into a Reseller Agreement with QHC as of May 30, 2019.

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Mar. 31, 2019
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	NOTE 5 – COMMITMENTS AND CONTINGENCIES Litigation The Company is currently not involved in any litigation that it believes could have a material adverse effect on its financial condition or results of operations. A disgruntled former consultant has brought an action in Texas state court against the Company and its chief executive officer, alleging fraud and misrepresentation pertaining to stock and payments alleged to be owed to the consultant. The Company has made all required payments and delivered the stock to the consultant. The consultant has also included a claim of partial ownership of some of the Company’s patents, which is without merit in that any interest he may have had has been assigned to the Company. The claim is frivolous and without merit. The case is being vigorously defended on the Company’s behalf by its insurance carrier. Leases In March 2019, the Company guaranteed a lease on behalf of Ageos, LLC, a sales representative assisting the Company with securing contracts with agencies of the United States government. The lease has a term of three years for 4,359 square feet of space in McClean, Virginia. The initial rent cost is $7,991 per month and the lease agreement provides for annual rent increases of approximately 4.0%. The amount of future payments guaranteed is $291,364. The nature of the guarantee and the operating agreement with Ageos, as discussed below, makes Cipherloc primarily responsible for the lease. As such, lease payments and lease obligations will be shown in the financial statements of Cipherloc. In February 2019, the Company and the landlord for its leased office space in Buda, Texas entered into a new lease agreement, and the Company reduced its rented space from approximately 3,900 to 1,302 square feet. The new lease was effective February 1, 2019 and has a three-year term. The initial monthly rent is $2,566, and the lease agreement provides for annual rent increases of approximately 2.7%. The lease automatically renews for a three-year term, unless either party to the lease agreement notifies the other of the intent to terminate the lease in writing at least 180 days prior to the expiration of the current term. In February 2019, the Company terminated its lease agreement for 1,005 square feet of office space on Butherus Drive in Scottsdale, Arizona effective March 1, 2019. In exchange for the lease termination, the Company relinquished its right to payments it had made to prepay rent through October 31, 2019. As a result of the termination, the Company recorded a charge to rent expense of approximately $13,000. In October 2018, the Company leased approximately 3,900 square feet of office space on North Scottsdale Road in Scottsdale, Arizona. The lease for this facility began on October 4, 2018 and continues until October 31, 2021. Annual rent of $77,180 was prepaid for the first year from November 1, 2018 to October 31, 2019, and the lease agreement provides for annual rent increases of approximately 5.0%. Ageos, LLC Operating Agreement In the quarter ended March 31, 2019, the Company paid Ageos, LLC, a newly formed separate entity, approximately $700,000. The purpose of the funds was to establish an office in McLean, Virginia and to develop the resources and personnel to market the Company’s products to governmental sources, primarily requiring advanced security clearances that the Company does not currently have. On April 24, 2019 the Company entered into an Operating Agreement with Ageos that provides for how revenues will be shared from sales derived from the Company’s products. The advances through March 31, 2019 have been expensed as incurred in the accompanying statements of operations. As Ageos is a newly formed venture, designed primarily to work with the Company in marketing its products, management is in the process of determining if Ageos represents a Variable Interest Entity that must be consolidated with the operations of the Company. The Company has expensed all advances to date, which largely represent non-capitalizable expenditures, and consequently believes that consolidation would not change the reported results of operations for the quarter ended March 31, 2019.

Stockholders' Equity

Stockholders' Equity	6 Months Ended
	Mar. 31, 2019
Stockholders' Equity Note [Abstract]
Stockholders' Equity	NOTE 6 - STOCKHOLDERS’ EQUITY The Company is authorized to issue 650,000,000 common shares and 10,000,000 preferred shares at a par value of $0.01 per share. Common Stock Management determines the fair value of stock issuances using the closing stock price on the grant date. During the six months ended March 31, 2019, the Company issued 20,000 shares of common stock with a fair value of $40,000 to Pycnocline, LLC for management consulting services, which was recorded in research and development expense. During the six months ended March 31, 2019, the Company issued 9,346 shares of common stock with a fair value of $11,216 to an employee, which was recorded as stock-based compensation expenses in research and development expense in the statement of operations. During the six months ended March 31, 2019, the Company refunded $40,000 for common stock, due to these funds exceeding the latest private placement offering maximum requirement allowed. Preferred Stock Each share of preferred stock is convertible into the Company’s common stock at a rate of one preferred share to 1.5 common shares. Each share of preferred stock has 1.5 votes on all matters presented to be voted by the holders of common stock. The holders of preferred stock can only convert the shares upon approval of the Company’s board of directors. If declared by the board of directors, holders of preferred stock are entitled to receive dividends prior and in preference to any declaration or payment of any dividend on the common stock of the Company. In the event of liquidation or dissolution of the Company, holders of preferred stock shall be paid out of the assets of the Company prior and in preference to any payment or distribution to holders of common stock of the Company.

Subsequent Events

Subsequent Events	6 Months Ended
	Mar. 31, 2019
Subsequent Events [Abstract]
Subsequent Events	NOTE 7- SUBSEQUENT EVENTS On April 24, 2019 the Company entered into an Operating Agreement with Ageos, LLC a Virginia Limited Liability Company. The Operator has the required expertise, clearances and credentials to work with certain US government departments, agencies and affiliates; and the Operator will assist the Company in securing sales to the US Government and other contracts. The Company’s products will be sold to the Government at our normal pricing and the Company agreed to guarantee the lease for the secured facility in Virginia and to advance the cost at an amount not to exceed $1.6 million annually including the lease guarantee. The advanced funds will be reimbursed to the Company from Ageos’ profits generated by Ageos sales of the Company’s products. The Company chose to report payments to Ageos, LLC as an operational expense but did give separate disclosure consideration to reporting it as a Variable Interest Entity relationship. On June , 2019 the Company executed an exclusive Reseller Agreement with Quality Health Care International, LLC a Nevada Limited Liability Company a very experienced supplier of software to the healthcare industry in the United States and in other countries. The agreement is for a five year period with automatic renewals unless cancelled by either party. The market is the Healthcare industry in the United States and its territories. Other countries may be added in the future. The products to be licensed are those designed for commercial use, which are beneficial for the healthcare industry and will be sold at our normal pricing. The Company advanced cost in the amount of $416,000 to the Reseller which is evidenced by a two-year promissory note executed by the Reseller.

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)	6 Months Ended
	Mar. 31, 2019
Accounting Policies [Abstract]
Cash and Cash Equivalents	Cash and Cash Equivalents The Company considers all highly liquid investments with a maturity at the time of purchase of three months or less to be cash equivalents. At March 31, 2019 and September 30, 2018, cash includes cash on hand and cash in the bank. The Company maintains its cash in accounts held by a large, globally recognized bank, and the balance of such accounts, 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, 2019, $10,840,605 of the Company’s cash balance was uninsured.
Basic and Diluted Net Loss Per Common Share	Basic and Diluted Net Loss per Common Share Basic net loss per share is computed by dividing net loss for the period 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 net loss 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, 2019 and September 30, 2018, the Company had 1,000,000 shares of preferred stock outstanding, which are convertible into 1,500,000 shares of common stock. Diluted net loss per share is the same as basic net loss per share during periods where net losses are incurred because the inclusion of the potential common stock equivalents would be anti-dilutive as a result of the net loss. During the three and six months ended March 31, 2019, 25,015,866 warrants and 1,500,000 shares of convertible preferred stock were excluded from the calculation of diluted net loss per share because their effect would be anti-dilutive. During the three and six months ended March 31, 2018, 1,241,000 warrants to purchase common stock and 1,500,000 shares of convertible preferred stock were excluded from the calculation of diluted net loss per share because their effect would be anti-dilutive.
Research and Development and Software Development Costs	Research and Development and Software Development Costs The Company expenses all research and development costs, including patent and software development costs.
Adoption of Recent Accounting Standard	Adoption of Recent Accounting Standard In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606)
Recent Accounting Announcements	Recent Accounting Pronouncements The FASB issues ASUs to amend the authoritative literature in the ASC. There have been a number of ASUs to date that amend the original text of the ASC. Other than those discussed below, 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 February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) Leases (Topic 842): Targeted Improvements In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurements (Topic 820) – Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement In June 2018, the FASB issued ASU No. 2018-07, Compensation – Stock Compensation (Topic 718) – Improvements to Nonemployee Share-Based Payment Accounting Compensation – Stock Compensation

Summary of Significant Accoun_3

Summary of Significant Accounting Policies (Details Narrative) - USD ($)	6 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Sep. 30, 2018
FDIC insured cash	$ 250,000
Cash balance uninsured	$ 10,840,605
Preferred stock, shares outstanding	1,000,000		1,000,000
Number of shares issued for conversion	1,500,000
Warrants [Member]
Anti-dilutive common stock equivalents	25,015,866	1,241,000
Convertible Preferred Stock [Member]
Anti-dilutive common stock equivalents	1,500,000	1,500,000

Notes Receivable (Details Narra

Notes Receivable (Details Narrative) - USD ($)	6 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Advances to notes receivable	$ 401,000
Quality Health Care International, LLC [Member]
Advances to notes receivable	$ 401,000
Notes receivable, description	The note provides that if the funds are repaid within one year of the date of the note any interest charge will be waived.
Quality Health Care International, LLC [Member] | May 30, 2019 [Member]
Notes receivable	$ 416,000
Note bearing interest	4.00%
Note due date	May 29, 2021
Quality Health Care International, LLC [Member] | Subsequent to March 31, 2019 [Member]
Advances to notes receivable	$ 15,000

Commitments and Contingencies (

Commitments and Contingencies (Details Narrative)	1 Months Ended			6 Months Ended
	Mar. 31, 2019USD ($)ft²	Feb. 28, 2019USD ($)ft²	Oct. 31, 2018USD ($)ft²	Mar. 31, 2019USD ($)ft²
Arizona [Member]
Area of lease | ft²			3,900
Rental cost			$ 77,180
Annual rent increase percentage			5.00%
Lease description			The lease for this facility began on October 4, 2018 and continues until October 31, 2021. Annual rent of $77,180 was prepaid for the first year from November 1, 2018 to October 31, 2019.
New Lease Agreement [Member]
Area of lease | ft²		3,900
Reduction in lease area | ft²		1,302
Rental cost		$ 2,566
Annual rent increase percentage		2.70%
Lease description		The lease automatically renews for a three-year term, unless either party to the lease agreement notifies the other of the intent to terminate the lease in writing at least 180 days prior to the expiration of the current term.
Lease Agreement [Member] | Arizona [Member]
Area of lease | ft²		1,005
Rental cost		$ 13,000
Lease description		In exchange for the lease termination, the Company relinquished its right to payments it had made to prepay rent through October 31, 2019.
Ageos, LLC [Member]
Lease term	3 years			3 years
Area of lease | ft²	4,359			4,359
Rental cost	$ 7,991
Annual rent increase percentage	4.00%
Future payments of operating lease	$ 291,364			$ 291,364
Ageos, LLC [Member] | Operating Agreement [Member]
Operating lease payment				$ 700,000

Stockholders' Equity (Details N

Stockholders' Equity (Details Narrative) - USD ($)	3 Months Ended				6 Months Ended
	Mar. 31, 2019	Dec. 31, 2018	Mar. 31, 2018	Dec. 31, 2017	Mar. 31, 2019	Sep. 30, 2018
Common stock, shares authorized	650,000,000				650,000,000	650,000,000
Preferred stock, shares authorized	10,000,000				10,000,000	10,000,000
Common stock, par value	$ 0.01				$ 0.01	$ 0.01
Preferred stock, par value	$ 0.01				$ 0.01	$ 0.01
Number of shares issued for services, value		$ 40,000
Common stock issued to employees			$ 157,743	$ 10,000
Refund of oversubscription	$ (40,000)				$ 40,000
Stcok conversion description					Each share of preferred stock is convertible into the Company's common stock at a rate of one preferred share to 1.5 common shares.
Preferred stock, voting rights					Each share of preferred stock has 1.5 votes on all matters presented to be voted by the holders of common stock.
Research and Development Expense [Member]
Common stock issued to employees, shares					9,346
Common stock issued to employees					$ 11,216
Pycnocline, LLC for Management Consulting Services [Member]
Number of shares issued for services					20,000
Number of shares issued for services, value					$ 40,000

Subsequent Events (Details Narr

Subsequent Events (Details Narrative) - USD ($)	Jun. 04, 2019	Apr. 24, 2019	Mar. 31, 2019	Mar. 31, 2018
Advances to notes receivable			$ 401,000
Quality Health Care International, LLC [Member]
Advances to notes receivable			401,000
Operating Agreement [Member] | Ageos, LLC [Member]
Operating lease payment			$ 700,000
Subsequent Event [Member] | Operating Agreement [Member] | Ageos, LLC [Member]
Operating lease payment		$ 1,600,000
Subsequent Event [Member] | Reseller Agreement [Member] | Quality Health Care International, LLC [Member] | Two-Year Promissory Note [Member]
Description for reseller agreement	The agreement is for a five year period with automatic renewals unless cancelled by either party.
Advances to notes receivable	$ 416,000