Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Mar. 31, 2017 | May 15, 2017 | |
Document And Entity Information | ||
Entity Registrant Name | GULFSLOPE ENERGY, INC. | |
Entity Central Index Key | 1,341,726 | |
Document Type | 10-Q | |
Trading Symbol | GSPE | |
Document Period End Date | Mar. 31, 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 Common Stock, Shares Outstanding | 685,152,225 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,017 |
Condensed Balance Sheets (Unaud
Condensed Balance Sheets (Unaudited) - USD ($) | Mar. 31, 2017 | Sep. 30, 2016 |
Current Assets | ||
Cash and Cash Equivalents | $ 64,407 | $ 64,114 |
Prepaid Expenses and Other Current Assets | 127,312 | 38,311 |
Accounts Receivable, Net | 63,147 | |
Total Current Assets | 191,719 | 165,572 |
Property and Equipment, Net of Depreciation | 10,468 | 24,288 |
Oil and Natural Gas Properties, Full Cost Method of Accounting | 4,774,429 | 4,526,171 |
Total Non-Current Assets | 4,784,897 | 4,550,459 |
Total Assets | 4,976,616 | 4,716,031 |
Current Liabilities | ||
Accounts Payable | 440,917 | 426,271 |
Related Party Payable | 286,629 | 265,834 |
Accrued Interest Payable | 1,067,830 | 812,383 |
Accrued Expenses and Other Payables | 1,321,927 | 1,352,929 |
Loans from Related Parties | 8,692,276 | 8,382,891 |
Notes Payable | 78,270 | 4,156 |
Convertible Promissory Notes Payable | 482,855 | 153,358 |
Stock Payable | 11,605 | 11,605 |
Total Current Liabilities | 12,382,309 | 11,409,427 |
Total Liabilities | 12,382,309 | 11,409,427 |
Stockholders' Deficit | ||
Preferred Stock; par value ($0.001); Authorized 50,000,000 shares none issued or outstanding | ||
Common Stock; par value ($0.001); Authorized 975,000,000 shares; 685,152,225 and 682,902,225 issued and and outstanding, respectively | 685,152 | 682,402 |
Additional Paid-in-Capital | 26,815,322 | 26,151,376 |
Accumulated Deficit | (34,906,167) | (33,527,174) |
Total Stockholders' Deficit | (7,405,693) | (6,693,396) |
Total Liabilities and Stockholders' Deficit | $ 4,976,616 | $ 4,716,031 |
Condensed Balance Sheets (Unau3
Condensed Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2017 | Sep. 30, 2016 |
Statement of Financial Position [Abstract] | ||
Preferred Stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred Stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred Stock, shares issued | 0 | 0 |
Preferred Stock, shares outstanding | 0 | 0 |
Common Stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common Stock, shares authorized | 975,000,000 | 975,000,000 |
Common Stock, shares issued | 685,152,225 | 682,902,225 |
Common Stock, shares outstanding | 685,152,225 | 682,902,225 |
Condensed Statements of Operati
Condensed Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | |
Income Statement [Abstract] | ||||
General & Administrative Expenses | $ 456,898 | $ 422,454 | $ 676,826 | $ 1,009,604 |
Net Loss from Operations | (456,898) | (422,454) | (676,826) | (1,009,604) |
Other Income/(Expenses): | ||||
Interest Expense | (369,332) | (103,367) | (702,167) | (206,743) |
Net Loss Before Income Taxes | (826,230) | (525,821) | (1,378,993) | (1,216,347) |
Net Loss | $ (826,230) | $ (525,821) | $ (1,378,993) | $ (1,216,347) |
Loss Per Share - Basic and Diluted (in dollars per share) | $ 0 | $ 0 | $ 0 | $ 0 |
Weighted Average Shares Outstanding - Basic and Diluted (in shares) | 684,327,225 | 680,163,471 | 683,356,895 | 676,159,210 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
OPERATING ACTIVITIES | ||
Net Loss | $ (1,378,993) | $ (1,216,347) |
Adjustments to reconcile net loss to net cash From Operating Activities: | ||
Change in Accounts Receivable | 63,147 | |
Depreciation | 13,820 | 26,087 |
Stock-based Compensation Expense | 327,531 | |
Stock Issued for Services | 182,298 | |
Debt Discount Amortization | 444,172 | |
Changes in Operating Assets and Liabilities | ||
(Increase)/Decrease in Prepaid Expenses | 70,186 | 125,718 |
Increase/(Decrease) in Accounts Payable and Stock Payable | (34,006) | 107,030 |
Increase/(Decrease) in Related Party Payable | 20,795 | 29,760 |
Increase/(Decrease) in Accrued Interest | 255,447 | 203,128 |
Increase/(Decrease) in Accrued Liabilities | 39,514 | |
Net Cash From Operating Activities | (217,901) | (502,812) |
INVESTING ACTIVITIES | ||
Exploration Costs | (91,232) | (966,307) |
Net Cash From Investing Activities | (91,232) | (966,307) |
FINANCING ACTIVITIES | ||
Proceeds from Related Party Loans | 244,500 | 228,000 |
Proceeds from Convertible Promissory Notes and Warrants | 150,000 | |
Payments on Note Payable | (85,074) | (126,801) |
Net Cash From Financing Activities | 309,426 | 101,199 |
Net Increase/(Decrease) in Cash | 293 | (1,367,920) |
Beginning Cash Balance | 64,114 | 1,428,014 |
Ending Cash Balance | 64,407 | 130,173 |
Supplemental Schedule of Cash Flow Activities | ||
Cash Paid for Interest | 2,547 | 3,615 |
Non-Cash Financing and Investing Activities | ||
Prepaid Asset Financed by Note Payable | 159,188 | 240,848 |
Capital Expenditures Included in Accounts Payable | 17,651 | 191,878 |
Capital Expenditures Included in Stock Payable | 11,605 | |
Stock-Based Compensation Capitalized to Unproved Properties | $ 139,375 | $ 225,747 |
ORGANIZATION AND NATURE OF BUSI
ORGANIZATION AND NATURE OF BUSINESS | 6 Months Ended |
Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND NATURE OF BUSINESS | NOTE 1 – ORGANIZATION AND NATURE OF BUSINESS GulfSlope Energy, Inc. (the “Company,” “GulfSlope,” “our” and words of similar import), a Delaware corporation, is an independent crude oil and natural gas exploration company whose interests are concentrated in the United States Gulf of Mexico federal waters offshore Louisiana. The Company currently has under lease 17 federal Outer Continental Shelf blocks (referred to as “prospect,” “portfolio” or “leases” in this Report). Since March 2013, we have been singularly focused on identifying high-potential oil and gas prospects. We have licensed 3-D seismic data covering approximately 2.2 million acres and have evaluated this data using advanced interpretation technologies. As a result of these analyses, we have identified and acquired leases on 17 prospects that we believe may contain economically recoverable hydrocarbon deposits, and we plan to continue to conduct more refined analyses of our prospects as well as target additional lease and property acquisitions. Our activities have been focused exclusively in the federal waters of the Gulf of Mexico. We have given preference to areas with water depths of 450 feet or less where production infrastructure already exists. Sixteen of our seventeen prospects are in less than 450 feet of water depth. We believe this will allow for any discoveries to be developed faster and less expensively, given our goal to reduce economic risk while increasing returns. As of March 31, 2017, we have no proved reserves. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES The condensed financial statements included herein are unaudited. However, these condensed financial statements include all adjustments (consisting of normal recurring adjustments) which in the opinion of management, are necessary for a fair presentation of financial position, results of operations and cash flows for the interim periods. The results of operations for interim periods are not necessarily indicative of the results to be expected for an entire year. The preparation of financial statements in accordance with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the Company’s condensed financial statements and accompanying notes. Actual results could differ materially from those estimates. Certain information, accounting policies, and footnote disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been omitted in this Form 10-Q pursuant to certain rules and regulations of the Securities and Exchange Commission (“SEC”). The condensed financial statements should be read in conjunction with the audited financial statements for the year ended September 30, 2016, which were included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2016 and filed with the Securities and Exchange Commission on December 27, 2016. Cash and Cash Equivalents GulfSlope considers highly liquid investments with insignificant interest rate risk and original maturities to the Company of three months or less to be cash equivalents. Cash equivalents consist primarily of interest-bearing bank accounts and money market funds. The Company’s cash positions represent assets held in checking and money market accounts. These assets are generally available on a daily or weekly basis and are highly liquid in nature. Liquidity/Going Concern The Company has incurred accumulated losses as of March 31, 2017 of $34.9 million. Further losses are anticipated in developing our business. As a result, our auditor expressed substantial doubt about our ability to continue as a going concern on its report for the year ended September 30, 2016. As of March 31, 2017, we had $0.06 million of unrestricted cash on hand. Management has analyzed its cash needs for the 12 month period beginning from the filing date of these financial statements, and determined that the Company will need to raise a minimum of $4 million to meet its obligations and planned expenditures through May 2018. The Company plans to finance its operations through the issuance of equity, debt financings or joint ventures, further sale of working interests in prospects or bridge financing. Our policy has been to periodically raise funds through the sale of equity on a limited basis, to avoid undue dilution while at the early stages of execution of our business plan. Short term needs have been historically funded through loans from executive management and other related parties. There are no assurances that financing will be available with acceptable terms, if at all. If the Company is not successful in obtaining financing, operations would need to be curtailed or ceased. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Full Cost Method The Company uses the full cost method of accounting for its oil and gas exploration and development activities as defined by the Securities and Exchange Commission (“SEC”). Under the full cost method of accounting, all costs associated with successful and unsuccessful exploration and development activities are capitalized on a country-by-country basis into a single cost center (“full cost pool”). Such costs include property acquisition costs, geological and geophysical (“G&G”) costs, carrying charges on non-producing properties, costs of drilling both productive and non-productive wells and overhead charges directly related to acquisition, exploration and development activities. Proceeds from property sales will generally be credited to the full cost pool, with no gain or loss recognized, unless such a sale would significantly alter the relationship between capitalized costs and the proved reserves attributable to these costs. A significant alteration would typically involve a sale of 25% or more of the proved reserves related to a single full cost pool. Proved properties are amortized on a country-by-country basis using the units of production method (UOP). The UOP calculation multiplies the percentage of estimated proved reserves produced each quarter by the cost of those reserves. The amortization base in the UOP calculation includes the sum of proved property, net of accumulated depreciation, depletion and amortization (DD&A), estimated future development costs (future costs to access and develop proved reserves), and asset retirement costs, less related salvage value. The costs of unproved properties and related capitalized costs (such as G&G costs) are withheld from the amortization calculation until such time as they are either developed or abandoned. Unproved properties and properties under development are reviewed for impairment at least quarterly and are determined through an evaluation considering, among other factors, seismic data, requirements to relinquish acreage, drilling results, remaining time in the commitment period, remaining capital plan, and political, economic, and market conditions. In countries where proved reserves exist, exploratory drilling costs associated with dry holes are transferred to proved properties immediately upon determination that a well is dry and amortized accordingly. In countries where a reserve base has not yet been established, impairments are charged to earnings. Companies that use the full cost method of accounting for oil and natural gas exploration and development activities are required to perform a ceiling test calculation each quarter. The full cost ceiling test is an impairment test prescribed by SEC Regulation S-X Rule 4-10. The ceiling test is performed quarterly, on a country-by-country basis, utilizing the average of prices in effect on the first day of the month for the preceding twelve-month period. The ceiling limits such pooled costs to the aggregate of the present value of future net revenues attributable to proved crude oil and natural gas reserves discounted at 10%, plus the lower of cost or market value of unproved properties less any associated tax effects. If such capitalized costs exceed the ceiling, the Company will record a write-down to the extent of such excess as a non-cash charge to earnings. Any such write-down will reduce earnings in the period of occurrence and results in a lower depreciation, depletion and amortization rate in future periods. A write-down may not be reversed in future periods even though higher oil and natural gas prices may subsequently increase the ceiling. As of March 31, 2017, the Company’s oil and gas properties consisted of unproved properties and no proved reserves. Basic and Dilutive Earnings Per Share Basic earnings per share (“EPS”) is computed by dividing net income (loss) (the numerator) by the weighted average number of common shares outstanding for the period (denominator). Diluted EPS is computed by dividing net income (loss) by the weighted average number of common shares and potential common shares outstanding (if dilutive) during each period. Potential common shares include stock options, warrants, and restricted stock. The number of potential common shares outstanding relating to stock options, warrants, and restricted stock is computed using the treasury stock method. As the Company has incurred losses for the six months ended March 31, 2017 and 2016, the potentially dilutive shares are anti-dilutive and are thus not added into the loss per share calculations. As of March 31, 2017 and 2016, there were 159,353,071 and 52,947,389 potentially dilutive shares, respectively. Recent Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update No. 2014-09 (“ASU No. 2014-09”), which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in GAAP when it becomes effective. As amended, the new standard is effective for annual reporting periods beginning after December 15, 2017. Early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method.The Company does not anticipate the adoption of this standard to have a material impact on its financial statements. In August 2014, the FASB issued Accounting Standard Update No. 2014-15 (“ASU No. 2014-15”), Presentation of Financial Statements Going Concern (Subtopic 205-40) On February 25, 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) In March 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”) In March 2016, the FASB issued ASU No. 2016-06, Derivatives and Hedging (Topic 815): Contingent Put and Call Options in Debt Instruments (a consensus of the Emerging Issues Task Force) The Company has evaluated all other recent accounting pronouncements and believes that none of them will have a significant effect on the Company’s financial statements. |
OIL AND NATURAL GAS PROPERTIES
OIL AND NATURAL GAS PROPERTIES | 6 Months Ended |
Mar. 31, 2017 | |
Oil and Gas Exploration and Production Industries Disclosures [Abstract] | |
OIL AND NATURAL GAS PROPERTIES | NOTE 3 – OIL AND NATURAL GAS PROPERTIES In March 2014, the Company was awarded 21 blocks in the Central Gulf of Mexico Lease Sale 231, conducted by the Bureau of Ocean Energy Management (“BOEM”). In March 2015, the Company was awarded two blocks in the Central Gulf of Mexico Lease Sale 235. During the quarter ended June 30, 2016, the Company relinquished six of the lease blocks acquired in 2014. The relinquished leases are Ewing Bank 904 and 945, Garden Banks 173, Eugene Island 395, Vermilion 393 and South Marsh Island 187. The capitalized lease costs of $2,610,678 associated with these blocks were recorded as impairment of oil and natural gas properties. The Company also deducted $280,000 as an impairment of certain capitalized exploration costs that were directly allocable to the relinquished blocks, for a total impairment deduction of $2,890,678. In May 2016, the Company entered into a letter of intent (the “LOI”) with Texas South that sets out the terms and conditions of a proposed farm-out arrangement (the “Farm-out”) to develop two shallow-depth oil and gas prospects located on offshore Gulf of Mexico blocks currently leased by the Company. Through March 31, 2017 the Company received $400,000 under the terms of the LOI. In accordance with full cost requirements, the Company recorded the proceeds from the transaction as an adjustment to the capitalized costs of its oil & gas properties with no gain or loss recognition. The Company also received lease rental reimbursements of $63,147 under the terms of this letter of intent. The Company paid $0 and $632,665 in gross annual lease rental payments to the BOEM for the six months ended March 31, 2017 and year ended September 30, 2016, respectively. The Company’s share of these amounts are included in unproved properties. For the year ended September 30, 2016, the Company incurred $1,354,674 in consulting fees and salaries and benefits associated with full-time geoscientists, and $463,497 associated with technological infrastructure, third party hosting services and seismic data. The Company capitalized these G&G costs because the Company owned specific unevaluated properties that these costs relate to. At June 30, 2016, a portion of these costs, $280,000, specifically related to leases relinquished in June 2016 were immediately impaired. These remaining capitalized amounts when added to the amount paid in 2016 for lease rental payments of $632,665 and netted with the 2016 receipts from sale of a working interest of $400,000 as well as the relinquished leases impairment amount of $2,610,678 subtracting lease rentals receivable of $191,171 results in unproved oil and gas properties of $4,526,171, reflected on our balance sheet at September 30, 2016. For the six months ended March 31, 2017, the Company incurred $86,731 in consulting fees, salaries and benefits, $139,375 in stock option costs associated with geoscientists, and $22,152 associated with technological infrastructure and third party hosting services. The Company capitalized these G&G costs because the Company owned specific unevaluated properties that these costs relate to. These amounts when added to unproved properties at September 30, 2016 result in $4,774,429 unproved properties at March 31, 2017. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Mar. 31, 2017 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 4 – RELATED PARTY TRANSACTIONS During April through September 2013, the Company entered into convertible promissory notes whereby it borrowed a total of $6,500,000 from John Seitz, its current chief executive officer. The notes are due on demand, bear interest at the rate of 5% per annum, and are convertible into shares of common stock at a conversion price equal to $0.12 per share of common stock (the then offering price of shares of common stock to unaffiliated investors). In May 2013, John Seitz converted $1,200,000 of the aforementioned debt into 10,000,000 shares of common stock, which shares were issued in July 2013. Between June of 2014 and December 2015, the Company entered into promissory notes whereby it borrowed a total of $2,410,000 from Mr. Seitz. The notes are not convertible, due on demand and bear interest at a rate of 5% per annum. During January through September 2016, the Company entered into promissory notes whereby it borrowed a total of $363,000 from Mr. Seitz. The notes are due on demand, bear interest at the rate of 5% per annum, and the outstanding principal and interest is convertible at the option of the holder into securities issued by the Company in a future offering, at the same price and terms received by unaffiliated investors. Additionally, during the six months ended March 31, 2017, the Company entered into promissory notes with John Seitz whereby it borrowed a total of $194,500. The notes are due on demand, bear interest at the rate of 5% per annum, and the outstanding principal and interest is convertible at the option of the holder into securities issued by the Company in a future offering, at the same price and terms received by unaffiliated investors. As of March 31, 2017 the total amount owed to John Seitz, our CEO, is $8,267,500. There was a total of $987,861 of unpaid interest associated with these loans included in accrued interest payable within our balance sheet as of March 31, 2017. From August 2015 through February 2016 the Company entered into promissory notes whereby it borrowed a total of $267,000 from Dr. Ronald Bain, its current president and chief operating officer, and his affiliate ConRon Consulting, Inc. These notes are not convertible, due on demand and bear interest at the rate of 5% per annum. As of March 31, 2017, the total amount owed to Dr. Bain and his affiliate was $267,000. There was a total of $21,385 of accrued interest associated with these loans and the Company has recorded interest expense for the same amount. During the fiscal year ended September 30, 2016, Dr. Ronald Bain also entered into a $92,000 convertible promissory note with associated warrants (“Bridge Financing”) under the same terms received by other investors (see Note 5). Domenica Seitz, CPA, a related party, has provided accounting consulting services to the Company. During the three and six month period ended March 31, 2017, services provided were $5,915 and $20,795, respectively. The Company has accrued these amounts, and they are reflected in the March 31, 2017 condensed financial statements. On November 15, 2016, a family member of the CEO, a related party, entered into a $50,000 convertible promissory note with associated warrants (“Bridge Financing”) under the same terms received by other investors (see Note 5). John Seitz has not received a salary since May 31, 2013, the date he commenced serving as our chief executive officer and accordingly, no amount has been accrued on our financial statements. Kevin Bain, son of Dr. Bain, is a geoscientist, employee of the Company. All employees of the Company (including executive management), who are all shareholders of the Company have been paid a reduced salary plus benefits beginning on January 1, 2016. On January 1, 2017, 1.25 million restricted shares, that vested in September 2016, were issued to an employee. On January 1, 2017, 33.5 million stock options were granted to six employees and two directors of the Company. The CEO was not included in the award. The stock options vested 50% on January 1, 2017 and the remaining 50% will vest on January 1, 2018, provided that the option holder continues to serve as an employee or director on the vesting date. The stock options are exercisable for seven years from the original grant date of January 1, 2017, until January 1, 2024. |
BRIDGE FINANCING - CONVERTIBLE
BRIDGE FINANCING - CONVERTIBLE PROMISSORY NOTES WITH ASSOCIATED WARRANTS | 6 Months Ended |
Mar. 31, 2017 | |
Bridge Financing - Convertible Promissory Notes With Associated Warrants | |
BRIDGE FINANCING - CONVERTIBLE PROMISSORY NOTES WITH ASSOCIATED WARRANTS | NOTE 5 – BRIDGE FINANCING – CONVERTIBLE PROMISSORY NOTES WITH ASSOCIATED WARRANTS Between June and November 2016, the Company issued eleven convertible promissory notes with associated warrants in a private placement to accredited investors for total gross proceeds of $837,000. Three of the notes were to related parties for proceeds totaling $222,000, including the extinguishment of $70,000 worth of related party payables. The convertible notes have a maturity of one year, bear an annual interest rate of 8% and can be converted at the option of the holder at a conversion price of $0.025 per share. In addition, the convertible notes will automatically convert if a qualified equity financing of at least $3 million occurs before maturity and such mandatory conversion price will equal the effective price per share paid in the qualified equity financing. In addition to the convertible notes, the investors received 27.9 million warrants (7.4 million to the above mentioned related parties) with an exercise price of $0.03 and a term of the earlier of three years or upon a change of control. The Company evaluated the various financial instruments under ASC 480 and ASC 815 and determined no instruments or features required fair value accounting. Therefore, in accordance with ASC 470-20-25-2, the Company allocated the proceeds between the convertible notes and warrants based on their relative fair values. This resulted in an allocation of $452,422 to the warrants and $384,578 to the convertible notes. After such allocation, the Company evaluated the conversion option to discern whether a beneficial conversion feature existed based upon comparing the effective exercise price of the convertible notes to the fair value of the shares they are convertible into. The Company concluded a beneficial conversion feature existed and measured such beneficial conversion feature at $384,368. Accordingly, the debt discount associated with these notes was $836,790. Such discount will be amortized using the effective interest rate method over the term (one year) of the convertible notes. For the quarter ended March 31, 2017 amortization of this discount totaled $206,332 and is included in interest expense in the statement of operations. Accrued interest expense for the quarter ended March 31, 2017 is $16, 740. On December 28, 2016, the Company issued a convertible promissory note with 500,000 shares of restricted stock and 550,000 warrants in a private placement to an accredited investor for $50,000 in proceeds. The warrants have a five-year term and an exercise price of $0.10. The promissory note has a face value of $55,555 and incurs a one-time upfront interest charge of six percent. The holder of the note has the option to convert the note into shares of common stock at a conversion price of $0.02 per share. Approximately $450,000 of additional funding is available under similar terms if the Company and the lender mutually agree to further tranches. The Company evaluated the various financial instruments under ASC 480 and ASC 815 and determined no material instruments or features required fair value accounting. Therefore, in accordance with ASC 470-20-25-2, the Company allocated the proceeds between the convertible note, restricted common stock, and warrants based on their relative fair values. This resulted in an allocation of $8,460 to the restricted stock, $7,969 to the warrants and $33,571 to the convertible note. After such allocation, the Company evaluated the conversion option to discern whether a beneficial conversion feature existed based upon comparing the effective exercise price of the convertible note to the fair value of the shares it is convertible into. The Company concluded a beneficial conversion feature existed and measured such beneficial conversion feature at $33,571. Accordingly, at December 28, 2016, the debt discount associated with these notes was $55,555. Such discount will be amortized using the effective interest rate method over the term (seven months) of the convertible note. For the three months ended March 31, 2017 amortization of this discount totaled $23,585 and is included in interest expense in the statement of operations. Accrued interest expense for the quarter ended March 31, 2017 is zero. On March 14, 2017, the Company issued a convertible promissory note with 1,000,000 shares of restricted stock and 1,100,000 warrants in a private placement to an accredited investor for $100,000 in proceeds. The warrants have a five-year term and an exercise price of $0.10. The promissory note has a face value of $111,111 and incurs a one-time upfront interest charge of six percent. The holder of the note has the option to convert the note into shares of common stock at a conversion price of $0.02 per share. Approximately $350,000 of additional funding is available under similar terms if the Company and the lender mutually agree to further tranches. The Company evaluated the various financial instruments under ASC 480 and ASC 815 and determined no material instruments or features required fair value accounting. Therefore, in accordance with ASC 470-20-25-2, the Company allocated the proceeds between the convertible note, restricted common stock, and warrants based on their relative fair values. This resulted in an allocation of $17,250 to the restricted stock, $14,051 to the warrants and $68,699 to the convertible note. After such allocation, the Company evaluated the conversion option to discern whether a beneficial conversion feature existed based upon comparing the effective exercise price of the convertible note to the fair value of the shares it is convertible into. The Company concluded a beneficial conversion feature existed and measured such beneficial conversion feature at $68,699. Accordingly, at March 14, 2017, the debt discount associated with these notes was $111,111. Such discount will be amortized using the effective interest rate method over the term (seven months) of the convertible note. For the three months ended March 31, 2017 amortization of this discount totaled $8,827 and is included in interest expense in the statement of operations. Accrued interest expense for the quarter ended March 31, 2017 is $6,666. |
COMMON STOCK_PAID IN CAPITAL
COMMON STOCK/PAID IN CAPITAL | 6 Months Ended |
Mar. 31, 2017 | |
Stockholders' Equity Note [Abstract] | |
COMMON STOCK/PAID IN CAPITAL | NOTE 6 – COMMON STOCK/PAID IN CAPITAL In March 2016, the Company issued 520,273 shares of common stock to one vendor as consideration for services rendered in the ordinary course of business. As discussed in Note 5, between June and November 2016, the Company issued 27.9 million warrants in conjunction with convertible notes payable. The warrants have an exercise price of $0.03 and a term of the earlier of 3 years or upon a change of control. Based upon the allocation of proceeds between the convertible notes payable and the warrants, approximately $452,422 was allocated to the warrants. The fair value of the warrants were determined using the Black Scholes valuation model with the following key assumptions: June 2016 July 2016 August 2016 November 2016 Number of Warrants Issued 12.9 million 10.0 million 3.3 million 1.7 million Stock Price: $0.054 $0.040 $0.032 $0.029 Exercise Price: $0.03 $0.03 $0.03 $0.03 Term: 3 years 3 years 3 years 3 years Risk Free Rate: .87% .80% .88% 1.28% Volatility: 135% 138% 137% 131% In December 2016, 500,000 shares of restricted stock were issued in conjunction with a financing transaction (see Note 5). As discussed in Note 5, in December 2016, the Company issued 550,000 warrants in conjunction with a convertible note payable. The warrants have an exercise price of $0.10 and a term of the earlier of 5 years or upon a change of control. Based upon the allocation of proceeds between the convertible note payable and the warrants, approximately $7,969 was allocated to the warrants. In March 2017, 1,000,000 shares of restricted stock were issued in conjunction with a financing transaction (see Note 5). As discussed in Note 5, in March 2017, the Company issued 1,100,000 warrants in conjunction with a convertible note payable. The warrants have an exercise price of $0.10 and a term of the earlier of 5 years or upon a change of control. Based upon the allocation of proceeds between the convertible note payable and the warrants, approximately $14,051 was allocated to the warrants. The fair value of the warrants were determined using the Black Scholes valuation model with the following key assumptions: December 2016 March 2017 Number of Warrants Issued 550,000 1,100,000 Stock Price: $0.028 $0.0279 Exercise Price: $0.10 $0.10 Term: 5 years 5 years Risk Free Rate: 2.02% 2.13% Volatility: 155% 127% |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 6 Months Ended |
Mar. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK-BASED COMPENSATION | NOTE 7– STOCK-BASED COMPENSATION On January 1, 2017, 33.5 million stock options were granted to 6 employees and 2 directors of the Company. The CEO was not included in the award. The stock options vested 50% on January 1, 2017 and the remaining 50% will vest on January 1, 2018, provided that the option holder continues to serve as an employee or director on the vesting date. The stock options are exercisable for seven years from the original grant date of January 1, 2017, until January 1, 2024. The fair value of the stock-options were determined using the Black Scholes valuation model with the following key assumptions: January 1, 2017 Number of Stock Options Awarded 33,500,000 Stock Price: $0.0278 Exercise Price: $0.0278 Term: 4 years Risk Free Rate: 1.71% Volatility: 127% The Company used the historical volatility of its stock for the period March 21, 2013 (the date the exploration activities began) through January 1, 2017 for the Black Scholes computation. The Company has no historical data regarding the expected life of the options and therefore used the simplified method of calculating the expected life. The risk free rate was calculated using the U.S. Treasury constant maturity rates similar to the expected life of the options, as published by the Federal Reserve. The Company has no plans to declare any future dividends. Stock-based compensation cost is measured at the grant date, using the estimated fair value of the award, and is recognized over the required vesting period. The Company recognized $466,906 in stock-based compensation during the three and six months ended March 31, 2017, and $202,650 and $408,044 in stock-based compensation during the three and six months ended March 31, 2016, respectively. A portion of these costs, $139,375 and $112,050, were capitalized to unproved properties and the remainder were recorded as general and administrative expenses for the three months ended March 31, 2017 and 2016, respectively. For the six months ended March 31, 2017 and 2016, $139,375 and $225,746, respectively, were capitalized to unproved properties. The following table summarizes the Company’s stock option activity during the three months ended March 31, 2017: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term Outstanding at December 31, 2016 2,000,000 $ 0.12 — Granted 33,500,000 $ .0278 4 years Exercised — — — Cancelled — — — Outstanding at March 31, 2017 35,500,000 $ .0330 3.9 years Vested and expected to vest 18,750,000 $ .0330 3.9 years Exercisable at March 31, 2017 18,750,000 .0330 — As of March 31, 2017, remaining expense to be recognized related to outstanding options was $280,144. As of March 31, 2017 there was $33,500 of intrinsic value for stock options outstanding as of March 31, 2017. On January 1, 2017, 1.25 million restricted shares, that vested in September 2016, were issued to an employee. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Mar. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 8 – COMMITMENTS AND CONTINGENCIES In March 2013, the Company licensed certain seismic data pursuant to two agreements. With respect to the first agreement, as of March 31, 2017, the Company has paid $6,135,500 in cash, with no additional amount due. With respect to the second agreement, as of March 31, 2017, the Company has paid $3,009,195 in cash and is obligated to pay $1,003,065 during fiscal 2017. In October 2016, the Company purchased a directors and officers insurance policy for $170,850 and financed $155,010 of the premium by executing a note payable. The balance of the note payable at March 31, 2017 is $78,270. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Mar. 31, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 9 – SUBSEQUENT EVENTS The company entered into a promissory note with John Seitz in May 2017 whereby it borrowed a total of $27,000. The note is due on demand, bears interest at the rate of 5% per annum, and the principal amount is convertible at the option of the holder into securities issued by the Company in a future offering, at the same price and terms received by unaffiliated investors. |
SIGNIFICANT ACCOUNTING POLICI15
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Cash and Cash Equivalents | Cash and Cash Equivalents GulfSlope considers highly liquid investments with insignificant interest rate risk and original maturities to the Company of three months or less to be cash equivalents. Cash equivalents consist primarily of interest-bearing bank accounts and money market funds. The Company’s cash positions represent assets held in checking and money market accounts. These assets are generally available on a daily or weekly basis and are highly liquid in nature. |
Liquidity/Going Concern | Liquidity/Going Concern The Company has incurred accumulated losses as of March 31, 2017 of $34.9 million. Further losses are anticipated in developing our business. As a result, our auditor expressed substantial doubt about our ability to continue as a going concern on its report for the year ended September 30, 2016. As of March 31, 2017, we had $0.06 million of unrestricted cash on hand. Management has analyzed its cash needs for the 12 month period beginning from the filing date of these financial statements, and determined that the Company will need to raise a minimum of $4 million to meet its obligations and planned expenditures through May 2018. The Company plans to finance its operations through the issuance of equity, debt financings or joint ventures, further sale of working interests in prospects or bridge financing. Our policy has been to periodically raise funds through the sale of equity on a limited basis, to avoid undue dilution while at the early stages of execution of our business plan. Short term needs have been historically funded through loans from executive management and other related parties. There are no assurances that financing will be available with acceptable terms, if at all. If the Company is not successful in obtaining financing, operations would need to be curtailed or ceased. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. |
Full Cost Method | Full Cost Method The Company uses the full cost method of accounting for its oil and gas exploration and development activities as defined by the Securities and Exchange Commission (“SEC”). Under the full cost method of accounting, all costs associated with successful and unsuccessful exploration and development activities are capitalized on a country-by-country basis into a single cost center (“full cost pool”). Such costs include property acquisition costs, geological and geophysical (“G&G”) costs, carrying charges on non-producing properties, costs of drilling both productive and non-productive wells and overhead charges directly related to acquisition, exploration and development activities. Proceeds from property sales will generally be credited to the full cost pool, with no gain or loss recognized, unless such a sale would significantly alter the relationship between capitalized costs and the proved reserves attributable to these costs. A significant alteration would typically involve a sale of 25% or more of the proved reserves related to a single full cost pool. Proved properties are amortized on a country-by-country basis using the units of production method (UOP). The UOP calculation multiplies the percentage of estimated proved reserves produced each quarter by the cost of those reserves. The amortization base in the UOP calculation includes the sum of proved property, net of accumulated depreciation, depletion and amortization (DD&A), estimated future development costs (future costs to access and develop proved reserves), and asset retirement costs, less related salvage value. The costs of unproved properties and related capitalized costs (such as G&G costs) are withheld from the amortization calculation until such time as they are either developed or abandoned. Unproved properties and properties under development are reviewed for impairment at least quarterly and are determined through an evaluation considering, among other factors, seismic data, requirements to relinquish acreage, drilling results, remaining time in the commitment period, remaining capital plan, and political, economic, and market conditions. In countries where proved reserves exist, exploratory drilling costs associated with dry holes are transferred to proved properties immediately upon determination that a well is dry and amortized accordingly. In countries where a reserve base has not yet been established, impairments are charged to earnings. Companies that use the full cost method of accounting for oil and natural gas exploration and development activities are required to perform a ceiling test calculation each quarter. The full cost ceiling test is an impairment test prescribed by SEC Regulation S-X Rule 4-10. The ceiling test is performed quarterly, on a country-by-country basis, utilizing the average of prices in effect on the first day of the month for the preceding twelve-month period. The ceiling limits such pooled costs to the aggregate of the present value of future net revenues attributable to proved crude oil and natural gas reserves discounted at 10%, plus the lower of cost or market value of unproved properties less any associated tax effects. If such capitalized costs exceed the ceiling, the Company will record a write-down to the extent of such excess as a non-cash charge to earnings. Any such write-down will reduce earnings in the period of occurrence and results in a lower depreciation, depletion and amortization rate in future periods. A write-down may not be reversed in future periods even though higher oil and natural gas prices may subsequently increase the ceiling. As of March 31, 2017, the Company’s oil and gas properties consisted of unproved properties and no proved reserves. |
Basic and Dilutive Earnings Per Share | Basic and Dilutive Earnings Per Share Basic earnings per share (“EPS”) is computed by dividing net income (loss) (the numerator) by the weighted average number of common shares outstanding for the period (denominator). Diluted EPS is computed by dividing net income (loss) by the weighted average number of common shares and potential common shares outstanding (if dilutive) during each period. Potential common shares include stock options, warrants, and restricted stock. The number of potential common shares outstanding relating to stock options, warrants, and restricted stock is computed using the treasury stock method. As the Company has incurred losses for the six months ended March 31, 2017 and 2016, the potentially dilutive shares are anti-dilutive and are thus not added into the loss per share calculations. As of March 31, 2017 and 2016, there were 159,353,071 and 52,947,389 potentially dilutive shares, respectively. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update No. 2014-09 (“ASU No. 2014-09”), which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in GAAP when it becomes effective. As amended, the new standard is effective for annual reporting periods beginning after December 15, 2017. Early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method.The Company does not anticipate the adoption of this standard to have a material impact on its financial statements. In August 2014, the FASB issued Accounting Standard Update No. 2014-15 (“ASU No. 2014-15”), Presentation of Financial Statements Going Concern (Subtopic 205-40) On February 25, 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) In March 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”) In March 2016, the FASB issued ASU No. 2016-06, Derivatives and Hedging (Topic 815): Contingent Put and Call Options in Debt Instruments (a consensus of the Emerging Issues Task Force) The Company has evaluated all other recent accounting pronouncements and believes that none of them will have a significant effect on the Company’s financial statements. |
COMMON STOCK_PAID IN CAPITAL (T
COMMON STOCK/PAID IN CAPITAL (Tables) | 6 Months Ended |
Mar. 31, 2017 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Fair Value Assumptions for Warrants | The fair value of the warrants were determined using the Black Scholes valuation model with the following key assumptions: June 2016 July 2016 August 2016 November 2016 Number of Warrants Issued 12.9 million 10.0 million 3.3 million 1.7 million Stock Price: $0.054 $0.040 $0.032 $0.029 Exercise Price: $0.03 $0.03 $0.03 $0.03 Term: 3 years 3 years 3 years 3 years Risk Free Rate: .87% .80% .88% 1.28% Volatility: 135% 138% 137% 131% The fair value of the warrants were determined using the Black Scholes valuation model with the following key assumptions: December 2016 March 2017 Number of Warrants Issued 550,000 1,100,000 Stock Price: $0.028 $0.0279 Exercise Price: $0.10 $0.10 Term: 5 years 5 years Risk Free Rate: 2.02% 2.13% Volatility: 155% 127% |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 6 Months Ended |
Mar. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Fair Value Assumptions for Stock Options | The fair value of the stock-options were determined using the Black Scholes valuation model with the following key assumptions: January 1, 2017 Number of Stock Options Awarded 33,500,000 Stock Price: $0.0278 Exercise Price: $0.0278 Term: 4 years Risk Free Rate: 1.71% Volatility: 127% |
Summary of Stock Options Activity | The following table summarizes the Company’s stock option activity during the three months ended March 31, 2017: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term Outstanding at December 31, 2016 2,000,000 $ 0.12 — Granted 33,500,000 $ .0278 4 years Exercised — — — Cancelled — — — Outstanding at March 31, 2017 35,500,000 $ .0330 3.9 years Vested and expected to vest 18,750,000 $ .0330 3.9 years Exercisable at March 31, 2017 18,750,000 .0330 — |
ORGANIZATION AND NATURE OF BU18
ORGANIZATION AND NATURE OF BUSINESS (Details Narrative) | 6 Months Ended |
Mar. 31, 2017aNumber | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of leased federal outer continental shelf blocks | Number | 17 |
Concentration of 3-D seismic data | a | 2,200,000 |
SIGNIFICANT ACCOUNTING POLICI19
SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 6 Months Ended | |||
Mar. 31, 2017 | Mar. 31, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | |
Accounting Policies [Abstract] | ||||
Accumulated losses | $ 34,906,167 | $ 33,527,174 | ||
Unrestricted cash | 64,407 | $ 130,173 | $ 64,114 | $ 1,428,014 |
Minimum capital which company estimated to raise to meet its obligations and planned expenditures | $ 4,000,000 | |||
Shares excluded from the computation of diluted loss per share | 159,353,071 | 52,947,389 |
OIL AND NATURAL GAS PROPERTIES
OIL AND NATURAL GAS PROPERTIES (Details Narrative) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 11 Months Ended | 12 Months Ended | ||
Mar. 31, 2015Number | Mar. 31, 2014Number | Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($)Number | Mar. 31, 2017USD ($) | Mar. 31, 2017USD ($) | Sep. 30, 2016USD ($) | |
Blocks acquired | Number | 2 | 21 | |||||
Blocks divested | Number | 6 | ||||||
Impairment of oil and natural gas properties | $ 2,890,678 | $ 2,610,678 | |||||
Impairment of capitalized exploration costs | $ 280,000 | ||||||
Unproved oil and gas properties | $ 4,774,429 | $ 4,774,429 | $ 4,526,171 | ||||
Proceeds from sale of working interest | $ 400,000 | ||||||
Decrease in lease rentals receivable | 63,147 | ||||||
Lease rentals receivable | 191,171 | ||||||
Consulting Fees And Salaries And Benefits [Member] | |||||||
Exploration costs capitalized during the period | 86,731 | 1,354,674 | |||||
Technological Infrastructure And Third Party Hosting Services [Member] | |||||||
Exploration costs capitalized during the period | 22,152 | 463,497 | |||||
Stock Option Costs [Member] | |||||||
Exploration costs capitalized during the period | 139,375 | ||||||
Bureau Of Ocean Energy Management [Member] | |||||||
Gross annual lease rental payments | $ 0 | $ 632,665 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | Nov. 15, 2016 | May 31, 2013 | Mar. 31, 2017 | Mar. 31, 2017 | Sep. 30, 2013 | Feb. 29, 2016 | Sep. 30, 2016 | Dec. 31, 2015 | Nov. 30, 2016 |
Options granted | 33,500,000 | ||||||||
Restricted Stock [Member] | |||||||||
Restricted shares issued | 1,250,000 | ||||||||
Stock Options [Member] | |||||||||
Options granted | 33,500,000 | ||||||||
Vesting terms | 50.00% | ||||||||
Options expiration period | 7 years | ||||||||
Options expiration date | Jan. 1, 2024 | ||||||||
John Seitz, CEO [Member] | Convertible Promissory Notes [Member] | |||||||||
Debt Face amount | $ 194,500 | $ 194,500 | $ 6,500,000 | $ 363,000 | $ 2,410,000 | ||||
Interest rate | 5.00% | 5.00% | 5.00% | 5.00% | |||||
Debt conversion, price per share | $ 0.12 | ||||||||
Debt maturity date | due on demand | due on demand | due on demand | ||||||
Amount owed to related party | $ 8,267,500 | $ 8,267,500 | |||||||
Stock issued in conversion of notes payable, shares | 10,000,000 | ||||||||
Value of stock issued in conversion of notes payable | $ 1,200,000 | ||||||||
Accrued interest payable | 987,861 | 987,861 | |||||||
Dr. Ronald Bain, President [Member] | |||||||||
Debt Face amount | $ 267,000 | ||||||||
Interest rate | 5.00% | ||||||||
Debt maturity date | due on demand | ||||||||
Amount owed to related party | 267,000 | 267,000 | |||||||
Accrued interest payable | 21,385 | 21,385 | |||||||
Dr. Ronald Bain, President [Member] | Convertible Promissory Notes [Member] | |||||||||
Debt Face amount | $ 92,000 | ||||||||
Accounting Consulting Service [Member] | |||||||||
Accounting consulting services, included in related party payables | $ 5,915 | $ 20,795 | |||||||
Related party [Member] | Promissory Notes [Member] | |||||||||
Proceeds from issuance of convertible notes and warrants | $ 50,000 |
BRIDGE FINANCING - CONVERTIBL22
BRIDGE FINANCING - CONVERTIBLE PROMISSORY NOTES WITH ASSOCIATED WARRANTS (Details Narrative) - USD ($) | Mar. 14, 2017 | Dec. 28, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Nov. 30, 2016 | Mar. 31, 2016 |
Amortization of debt discount | $ 444,172 | ||||||
Interest expense | $ 369,332 | $ 103,367 | $ 702,167 | $ 206,743 | |||
June - Nov 2016 Promissory Notes [Member] | |||||||
Proceeds from issuance of convertible notes and warrants | $ 837,000 | ||||||
Maturity term | 1 year | ||||||
Interest rate | 8.00% | ||||||
Conversion price | $ 0.025 | ||||||
Qualified equity financing amount | $ 3,000,000 | ||||||
Amount allocated to debt | 384,578 | ||||||
Amount allocated to warrants | 452,422 | ||||||
Beneficial conversion feature | 384,368 | ||||||
Debt discount | $ 836,790 | ||||||
Amortization of debt discount | 206,332 | ||||||
Interest expense | 16,740 | ||||||
June - Nov 2016 Promissory Notes [Member] | Warrants [Member] | |||||||
Number of warrants issued | 27,900,000 | ||||||
Warrant term | 3 years | ||||||
June - Nov 2016 Promissory Notes [Member] | Related Parties [Member] | |||||||
Proceeds from issuance of convertible notes and warrants | $ 222,000 | ||||||
Extinguishment of related party payables | $ 70,000 | ||||||
June - Nov 2016 Promissory Notes [Member] | Related Parties [Member] | Warrants [Member] | |||||||
Number of warrants issued | 7,400,000 | ||||||
Dec 2016 Promissory Notes [Member] | Private Placement [Member] | |||||||
Proceeds from issuance of convertible notes and warrants | $ 50,000 | ||||||
Interest rate | 6.00% | ||||||
Conversion price | $ 0.02 | ||||||
Amount allocated to debt | $ 33,571 | ||||||
Amount allocated to warrants | 7,969 | ||||||
Beneficial conversion feature | 33,571 | ||||||
Debt discount | 55,555 | ||||||
Amortization of debt discount | 23,585 | ||||||
Interest expense | 0 | ||||||
Face value | 55,555 | ||||||
Additional funding available | 450,000 | ||||||
Amount allocated to restricted stock | $ 8,460 | ||||||
Dec 2016 Promissory Notes [Member] | Private Placement [Member] | Restricted Stock [Member] | |||||||
Stock issued | 500,000 | ||||||
Dec 2016 Promissory Notes [Member] | Warrants [Member] | Private Placement [Member] | |||||||
Number of warrants issued | 550,000 | ||||||
Warrant term | 5 years | ||||||
Mar 2017 Promissory Notes [Member] | Private Placement [Member] | |||||||
Proceeds from issuance of convertible notes and warrants | $ 100,000 | ||||||
Interest rate | 6.00% | ||||||
Conversion price | $ 0.02 | ||||||
Amount allocated to debt | $ 68,699 | ||||||
Amount allocated to warrants | 14,051 | ||||||
Beneficial conversion feature | 68,699 | ||||||
Debt discount | 111,111 | ||||||
Amortization of debt discount | 8,827 | ||||||
Interest expense | $ 6,666 | ||||||
Face value | 111,111 | ||||||
Additional funding available | 350,000 | ||||||
Amount allocated to restricted stock | $ 17,250 | ||||||
Mar 2017 Promissory Notes [Member] | Private Placement [Member] | Restricted Stock [Member] | |||||||
Stock issued | 1,000,000 | ||||||
Mar 2017 Promissory Notes [Member] | Warrants [Member] | Private Placement [Member] | |||||||
Number of warrants issued | 1,100,000 | ||||||
Warrant term | 5 years |
COMMON STOCK_PAID IN CAPITAL (D
COMMON STOCK/PAID IN CAPITAL (Details Narrative) | Mar. 14, 2017USD ($)shares | Dec. 28, 2016USD ($)shares | Mar. 31, 2016Numbershares | Nov. 30, 2016USD ($) |
Shares of stock issued for services | shares | 520,273 | |||
Number of individuals to whom restricted stock awarded | Number | 1 | |||
June - Nov 2016 Promissory Notes [Member] | ||||
Amount allocated to warrants | $ | $ 452,422 | |||
Dec 2016 Promissory Notes [Member] | Private Placement [Member] | ||||
Amount allocated to warrants | $ | $ 7,969 | |||
Dec 2016 Promissory Notes [Member] | Private Placement [Member] | Restricted Stock [Member] | ||||
Stock issued | shares | 500,000 | |||
Mar 2017 Promissory Notes [Member] | Private Placement [Member] | ||||
Amount allocated to warrants | $ | $ 14,051 | |||
Mar 2017 Promissory Notes [Member] | Private Placement [Member] | Restricted Stock [Member] | ||||
Stock issued | shares | 1,000,000 |
COMMON STOCK_PAID IN CAPITAL 24
COMMON STOCK/PAID IN CAPITAL (Details) | 6 Months Ended |
Mar. 31, 2017$ / sharesshares | |
June 2016 Warrants [Member] | |
Number of warrants issued | shares | 12,900,000 |
Stock Price | $ 0.054 |
Exercise Price | $ 0.03 |
Term | 3 years |
Risk Free Rate | 0.87% |
Volatility | 135.00% |
July 2016 Warrants [Member] | |
Number of warrants issued | shares | 10,000,000 |
Stock Price | $ 0.040 |
Exercise Price | $ 0.03 |
Term | 3 years |
Risk Free Rate | 0.80% |
Volatility | 138.00% |
August 2016 Warrants [Member] | |
Number of warrants issued | shares | 3,300,000 |
Stock Price | $ 0.032 |
Exercise Price | $ 0.03 |
Term | 3 years |
Risk Free Rate | 0.88% |
Volatility | 137.00% |
November 2016 Warrants [Member] | |
Number of warrants issued | shares | 1,700,000 |
Stock Price | $ 0.029 |
Exercise Price | $ 0.03 |
Term | 3 years |
Risk Free Rate | 1.28% |
Volatility | 131.00% |
December 2016 Warrants [Member] | |
Number of warrants issued | shares | 550,000 |
Stock Price | $ 0.028 |
Exercise Price | $ 0.10 |
Term | 5 years |
Risk Free Rate | 2.02% |
Volatility | 155.00% |
March 2017 Warrants [Member] | |
Number of warrants issued | shares | 1,100,000 |
Stock Price | $ 0.0279 |
Exercise Price | $ 0.10 |
Term | 5 years |
Risk Free Rate | 2.13% |
Volatility | 127.00% |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details Narrative) | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2017USD ($) | Mar. 31, 2016USD ($) | Mar. 31, 2017USD ($)shares | Mar. 31, 2016USD ($) | Jan. 01, 2017Number | |
Stock-based compensation expense | $ 466,906 | $ 202,650 | $ 466,906 | $ 408,044 | |
Stock-based compensation capitalized to unproved properties | 139,375 | $ 112,050 | 139,375 | $ 225,747 | |
Unrecognized compensation expense related to stock options | 280,144 | 280,144 | |||
Intrinsic value of stock options outstanding | $ 33,500 | $ 33,500 | |||
Stock Options [Member] | |||||
Vesting (percent) | 50.00% | ||||
Options expiration period | 7 years | ||||
Options expiration date | Jan. 1, 2024 | ||||
Number of employees granted options | Number | 6 | ||||
Number of directors granted options | Number | 2 | ||||
Restricted Stock [Member] | |||||
Restricted shares issued | shares | 1,250,000 |
STOCK-BASED COMPENSATION (Det26
STOCK-BASED COMPENSATION (Details) | 6 Months Ended |
Mar. 31, 2017$ / shares | |
Exercise Price | $ 0.0278 |
Stock Options [Member] | |
Stock Price | 0.0278 |
Exercise Price | $ 0.0278 |
Term | 4 years |
Risk Free Rate | 1.71% |
Volatility | 127.00% |
STOCK-BASED COMPENSATION (Det27
STOCK-BASED COMPENSATION (Details 1) | 6 Months Ended |
Mar. 31, 2017$ / sharesshares | |
Number of Options | |
Outstanding at beginning of period | shares | 2,000,000 |
Granted | shares | 33,500,000 |
Outstanding at end of period | shares | 35,500,000 |
Vested and expected to vest | shares | 18,750,000 |
Exercisable at end of period | shares | 18,750,000 |
Weighted Average Exercise Price | |
Outstanding at beginning of period | $ / shares | $ 0.12 |
Granted | $ / shares | 0.0278 |
Outstanding at end of period | $ / shares | 0.0330 |
Vested and expected to vest | $ / shares | 0.0330 |
Exercisable at end of period | $ / shares | $ 0.0330 |
Weighted Average Remaining Contractual Term | |
Granted | 4 years |
Outstanding at end of period | 3 years 10 months 24 days |
Vested and expected to vest | 3 years 10 months 24 days |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | 1 Months Ended | 6 Months Ended | |
Oct. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | |
Payments for exploration costs | $ 91,232 | $ 966,307 | |
Directors and Officers [Member] | |||
Insurance policy purchased | $ 170,850 | ||
Insurance policy Premium | $ 155,010 | ||
Related party notes payable | 78,270 | ||
First Agreement [Member] | |||
Payments for exploration costs | 6,135,500 | ||
Second Agreement [Member] | |||
Payments for exploration costs | 3,009,195 | ||
Payment due during fiscal 2017 | $ 1,003,065 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - Subsequent Event [Member] - John Seitz, CEO [Member] - Promissory Notes [Member] | May 15, 2017USD ($) |
Debt Face amount | $ 27,000 |
Interest rate | 5.00% |
Debt maturity date | Due on demand |