Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Sep. 30, 2018 | Dec. 29, 2018 | Mar. 31, 2018 | |
Proceeds to be received under farm out agreement | |||
Entity Registrant Name | GULFSLOPE ENERGY, INC. | ||
Entity Central Index Key | 1,341,726 | ||
Document Type | 10-K | ||
Trading Symbol | GSPE | ||
Document Period End Date | Sep. 30, 2018 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --09-30 | ||
Entity a Well-known Seasoned Issuer | No | ||
Entity a Voluntary Filer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Shell Company | false | ||
Entity Ex Transition Period | false | ||
Entity Public Float | $ 26,889,251 | ||
Shares held by non-affiliates | 440,807,388 | ||
Entity share price | $ .061 | ||
Entity Common Stock, Shares Outstanding | 832,013,272 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,018 |
BALANCE SHEETS
BALANCE SHEETS - USD ($) | Sep. 30, 2018 | Sep. 30, 2017 |
Current Assets | ||
Cash | $ 5,621,814 | $ 6,426 |
Accounts Receivable, Net | 6,286,796 | |
Prepaid Expenses and Other Current Assets | 32,042 | 40,573 |
Total Current Assets | 11,940,652 | 46,999 |
Property and Equipment, net of depreciation | 14,786 | 3,484 |
Oil and Natural Gas Properties, Full Cost Method of Accounting, Unproved Properties | 8,112,784 | 1,887,879 |
Other Non-Current Assets | 24,785 | |
Total Non-Current Assets | 8,152,355 | 1,891,363 |
Total Assets | 20,093,007 | 1,938,362 |
Current Liabilities | ||
Accounts Payable | 7,591,236 | 476,244 |
Deposits from Joint Interest Owners | 4,078,786 | |
Related Party Payable | 306,386 | 298,458 |
Accrued Interest Payable | 1,732,239 | 1,318,188 |
Accrued Expenses and Other Payables | 268,862 | 1,321,927 |
Loans from Related Parties | 9,084,500 | 9,155,581 |
Notes Payable | 3,690 | |
Convertible Promissory Notes Payable | 135,000 | 669,419 |
Derivative Financial Instrument | 271,710 | |
Funds Received from Capital Raise | 965,800 | |
Stock Payable | 11,605 | |
Other | 44,723 | |
Total Current Liabilities | 24,479,242 | 13,255,112 |
Total Liabilities | 24,479,242 | 13,255,112 |
Commitments and Contingencies (Note 11) | ||
Stockholders' Deficit | ||
Preferred Stock; par value ($0.001); Authorized 50,000,000 shares none issued or outstanding | ||
Common Stock; par value ($0.001); Authorized 1,500,000,000 as of September 30, 2018 and 975,000,000 as of September 30, 2017; issued and outstanding 832,013,272 and 692,196,625, as of September 30, 2018 and 2017, respectively | 832,013 | 692,196 |
Additional Paid-in Capital | 36,640,009 | 27,212,577 |
Accumulated Deficit | (41,858,257) | (39,221,523) |
Total Stockholders' Deficit | (4,386,235) | (11,316,750) |
Total Liabilities and Stockholders' Deficit | $ 20,093,007 | $ 1,938,362 |
BALANCE SHEETS (Parenthetical)
BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2018 | Sep. 30, 2017 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, authorized | 50,000,000 | 50,000,000 |
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized | 1,500,000,000 | 975,000,000 |
Common stock, issued | 832,013,272 | 692,196,625 |
Common stock, outstanding | 832,013,272 | 692,196,625 |
STATEMENTS OF OPERATIONS
STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Income Statement [Abstract] | ||
Impairment of Oil and Natural Gas Properties | $ 3,316,212 | |
General & Administrative Expenses | $ 1,220,247 | 964,309 |
Net Loss from Operations | (1,220,247) | (4,280,521) |
Other Income/(Expenses): | ||
Interest Expense | (780,513) | (1,324,127) |
Interest Income | (27,312) | |
Loss on Derivative Financial Instrument | (136,827) | |
Loss on Debt Extinguishment | (526,459) | (89,701) |
Net Loss Before Income Taxes | (2,636,734) | (5,694,349) |
Provision for Income Taxes | 0 | 0 |
Net Loss | $ (2,636,734) | $ (5,694,349) |
Loss Per Share - Basic and Diluted (in dollars per share) | $ 0 | $ (0.01) |
Weighted Average Shares Outstanding - Basic and Diluted (in shares) | 768,365,759 | 684,935,344 |
STATEMENTS OF STOCKHOLDERS' DEF
STATEMENTS OF STOCKHOLDERS' DEFICIT - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Total |
Beginning balance at Sep. 30, 2016 | $ 682,402 | $ 26,151,376 | $ (33,527,174) | $ (6,693,396) |
Beginning balance (in shares) at Sep. 30, 2016 | 682,402,225 | |||
Common stock issued for services | $ 1,250 | (1,250) | ||
Common stock issued for services (in shares) | 1,250,000 | |||
Common stock issued resulting from anti-dilution provision | 131,165 | 131,165 | ||
Restricted common stock issued to employees | 81,861 | 81,861 | ||
Value of warrants in conjunction with convertible promissory notes | $ 1,500 | 24,210 | 25,710 | |
Value of warrants in conjunction with convertible promissory notes (in shares) | 1,500,000 | |||
Value of beneficial conversion feature in conjunction with convertible promissory notes | $ 7,044 | 120,844 | 127,888 | |
Value of beneficial conversion feature in conjunction with convertible promissory notes (in shares) | 7,044,400 | |||
Loss from extension of due date and issuance of Bridge Note extensions | 50,701 | 50,701 | ||
Value of warrants issued in conjunction with Bridge Note extensions | 653,670 | 653,670 | ||
Net loss | (5,694,349) | (5,694,349) | ||
Ending balance at Sep. 30, 2017 | $ 692,196 | 27,212,577 | (39,221,523) | $ (11,316,750) |
Ending balance (in shares) at Sep. 30, 2017 | 692,196,625 | 692,196,625 | ||
Common stock issued for services | $ 84,349 | 5,122,404 | $ 5,206,753 | |
Common stock issued for services (in shares) | 84,348,985 | |||
Value of warrants in conjunction with convertible promissory notes | 47,387 | 47,387 | ||
Value of beneficial conversion feature in conjunction with convertible promissory notes | 103,519 | 103,519 | ||
Amortization of employee stock options and restricted stock | 1,857,531 | 1,857,531 | ||
Common stock issued for convertible promissory notes | $ 2,000 | 47,093 | 49,093 | |
Common stock issued for convertible promissory notes (in shares) | 2,000,000 | |||
Common stock issued for conversion of convertible promissory notes plus accrued interest | $ 41,851 | 924,474 | 966,325 | |
Common stock issued for conversion of convertible promissory notes plus accrued interest (in shares) | 41,850,996 | |||
Common stock issued for warrants exercised | $ 417 | 12,083 | 12,500 | |
Common stock issued for warrants exercised (in shares) | 416,666 | |||
Common stock issued to settle debt | $ 11,200 | 1,095,800 | 1,107,000 | |
Common stock issued to settle debt (in shares) | 11,200,000 | |||
Value of warrants issued in conjunction with Bridge Note extensions | 217,141 | 217,141 | ||
Net loss | (2,636,734) | (2,636,734) | ||
Ending balance at Sep. 30, 2018 | $ 832,013 | $ 36,640,009 | $ (41,858,257) | $ (4,386,235) |
Ending balance (in shares) at Sep. 30, 2018 | 832,013,272 | 832,013,272 |
STATEMENTS OF CASH FLOWS
STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
OPERATING ACTIVITIES | ||
Net Loss | $ (2,636,734) | $ (5,694,349) |
Adjustments to Reconcile Net Loss to Cash Provided by (Used in) Operating Activities: | ||
Impairment of Oil and Natural Gas Properties | 3,316,212 | |
Change in Allowance For Doubtful Accounts Receivable | (128,024) | |
Depreciation | 4,723 | 20,804 |
Debt Discount Amortization | 254,501 | 810,540 |
Loss on Debt Extinguishment | 526,459 | 89,701 |
Stock Based Compensation | 1,036,654 | 458,543 |
Stock Issued for Services | 503,076 | |
Change in fair value of Derivatives | 136,827 | |
Changes in Operating Assets and Liabilities: | ||
(Increase) Decrease in Accounts Receivable | (6,286,796) | 191,171 |
(Increase) Decrease in Prepaid Expenses and other Current Assets | 146,488 | 156,927 |
Increase (Decrease) in Deposits from Joint Interest Owners | 4,078,786 | |
Increase (Decrease) in Accounts Payable | 5,914,705 | (30,205) |
Increase (Decrease) in Related Party Payable | 7,928 | 32,626 |
Increase (Decrease) in Accrued Interest Payable | 520,375 | 509,139 |
Increase (Decrease) in Accrued Liabilities and Other Payables | 633,865 | |
Increase (Decrease) in Other | 44,723 | |
Net Cash Provided by (Used in) Operating Activities | 4,885,581 | (266,915) |
INVESTING ACTIVITIES | ||
Leases Purchased / Lease Rentals Paid | (280,268) | (284,089) |
Proceeds From Sale of Working Interest | 2,884,651 | 26,400 |
Capitalized Exploration and Wells In Process Costs | (1,904,618) | (175,931) |
Deposits and Equipment Purchases | (22,050) | |
Net Cash Provided by (Used in) Investing Activities | 677,715 | (433,620) |
FINANCING ACTIVITIES | ||
Proceeds from Related Party Loans | 652,500 | |
Payments on Note Payable | (160,408) | (159,653) |
Proceeds from Convertible Promissory Notes and Warrants | 212,500 | 150,000 |
Net Cash Provided by (Used in) Financing Activities | 52,092 | 642,847 |
Net Increase (Decrease) in Cash | 5,615,388 | (57,688) |
Beginning Cash Balance | 6,426 | 64,114 |
Ending Cash Balance | 5,621,814 | 6,426 |
Supplemental Schedule of Cash Flow Activities | ||
Cash Paid for Interest | 5,636 | 4,448 |
Non-Cash Investing and Financing Activities | ||
Prepaid Asset Financed Through Notes Payable | 156,718 | 159,188 |
Accrued Liabilities, Convertible Notes and Accrued Interest Settled Through Issuance of Common Stock | 1,896,999 | |
Purchase of Developmental Capital Expenditures | ||
Included in Accounts Payable | 1,223,792 | 49,177 |
Through Stock Based Compensation to Employees | 820,877 | $ 195,127 |
Through Issuance of Common Stock | $ 4,880,000 |
ORGANIZATION AND SUMMARY OF SIG
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Organization GulfSlope Energy, Inc. (the “Company” or “GulfSlope”) is an independent oil and natural gas exploration company whose interests are concentrated in the United States Gulf of Mexico federal waters offshore Louisiana. The Company has leased 14 federal Outer Continental Shelf blocks (referred to as “prospect,” “portfolio” or “leases”) and licensed three-dimensional (3-D) seismic data in its area of concentration. (b) Basis of Presentation The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and the instructions to Form 10-K and Regulation S-X published by the US Securities and Exchange Commission (the “SEC”). The accompanying financial statements include the accounts of the Company. (c) Going Concern The Company’s financial statements have been presented on the basis that it is a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred net losses through September 30, 2018 of $41.9 million, has a lack of cash on-hand not from joint interest owners, and a working capital deficit. These factors raise substantial doubt as to the Company’s ability to continue as a going concern. Management intends to raise additional operating funds through equity and/or debt offerings. Management also plans to extend the agreements associated with loans from related parties, the accrued interest payable on these loans, as well as the Company’s accrued liabilities. However there can be no assurance that additional financing will be available, or if available, will be on terms acceptable to the Company. If adequate working capital is not available, the Company may be required to curtail or cease operations or the Company would need to sell assets or consider alternative plans up to and including restructuring. (d) Cash The Company considers all short-term highly liquid investments with an original maturity at the date of purchase of three months or less to be cash equivalents. There were no cash equivalents at September 30, 2018 and 2017, respectively. (e) Accounts Receivable The Company records an accounts receivable for operations expense reimbursements due from joint interest partners. The Company estimates allowances for doubtful accounts based on the aged receivable balances and historical losses. If the Company determines any account to be uncollectible based on significant delinquency or other factors, it is immediately written off. As of September 30, 2018 and 2017, no allowance was recorded. Accounts receivable from joint operations are $6.7 million at September 30, 2018. (f) Full Cost Method The Company uses the full cost method of accounting for its oil and gas exploration and development activities. 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”), whereby capitalized costs are amortized over total proved 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 cost center ceiling is defined as the sum of (a) estimated future net revenues, discounted at 10% per annum, from proved reserves, (b) the cost of properties not being amortized, if any, and (c) the lower of cost or market value of unproved properties included in the cost being amortized. 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 September 30, 2018, the Company’s oil and gas properties consisted of unproved properties, wells in process and no proved reserves. (g) Property and Equipment Property and equipment are carried at cost and include expenditures for new equipment and those expenditures that substantially increase the productive lives of existing equipment and leasehold improvements. Maintenance and repair costs are expensed as incurred. Property and equipment are depreciated on a straight-line basis over the assets’ estimated useful lives. Fully depreciated property and equipment still in use are not eliminated from the accounts. The Company assesses the carrying value of its property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparing estimated undiscounted cash flows, expected to be generated from such assets, to their net book value. If net book value exceeds estimated cash flows, the asset is written down to its fair value, determined by the estimated discounted cash flows from such asset. When an asset is retired or sold, its cost and related accumulated depreciation and amortization are removed from the accounts. The difference between the net book value of the asset and proceeds on disposition is recorded as a gain or loss in our statements of operations in the period in which they occur. (h) Income Taxes Deferred tax assets and liabilities are recognized for the temporary differences between the financial reporting basis and tax basis of the Company’s assets and liabilities at enacted tax rates expected to be in effect when such amounts are realized or settled. A valuation allowance is provided if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company’s policy is to recognize potential interest and penalties accrued related to unrecognized tax benefits as a component of income tax expense. (i) Stock-Based Compensation The Company records expenses associated with the fair value of stock-based compensation. For fully vested and restricted stock grants, the Company calculates the stock based compensation expense based upon estimated fair value on the date of grant. For stock warrants and options, the Company uses the Black-Scholes option valuation model to calculate stock based compensation at the date of grant. Option pricing models require the input of highly subjective assumptions, including the expected price volatility. Changes in these assumptions can materially affect the fair value estimate. (j) Stock Issuance The Company records the stock-based compensation awards issued to non-employees and other external entities for goods and services at either the fair market value of the goods received or services rendered or the instruments issued in exchange for such services, whichever is more readily determinable. (k) Earnings per Share Basic earnings per share (“EPS”) is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period. 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, convertible notes and restricted stock. The number of potential common shares outstanding relating to stock options, warrants, and restricted stock is computed using the treasury stock or if-converted method. As the Company has incurred losses for the years ended September 30, 2018 and 2017, the potentially dilutive shares are anti-dilutive and thus not added into the EPS calculations. As of September 30, 2018 and 2017, there were 213,089,281 and 164,345,443 potentially dilutive shares, respectively. (l) Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. (m) Impact of New Accounting Standards 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 replaces most existing revenue recognition guidance. ASU 2014-09 will be effective for us October 1, 2018. Once implemented, the Company can use one of two retrospective application methods for prior periods. The Company has completed its evaluation of the provisions of this standard and concluded that the adoption will not result in any adjustment to beginning accumulated deficit as the Company does not have any revenues. The Company will adopt this new standard effective October 1, 2018 using the modified retrospective method of adoption as permitted by the standard. The adoption of Topic 606 will have no material impact on our financial position, results of operations, stockholders’ equity, or cash flows, but will impact disclosures when the Company has revenue. On February 25, 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) he new guidance establishes the principles to report transparent and economically neutral information about the assets and liabilities that arise from leases. The new guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, and early application is permitted for all organizations. The Company has not yet selected the period during which it will implement this pronouncement, and it is currently evaluating the impact the adoption of ASU 2016-02 will have on its financial statements. The Jumpstart Our Business Startups Act, or JOBS Act, provides that an emerging growth company can take advantage of the extended transition period for complying with new or revised accounting standards. An emerging growth company can therefore delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. However, the Company has elected not to take advantage of such extended transition period, and as a result, will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. 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. |
LIQUIDITY_GOING CONCERN
LIQUIDITY/GOING CONCERN | 12 Months Ended |
Sep. 30, 2018 | |
Liquiditygoing Concern | |
LIQUIDITY/GOING CONCERN | NOTE 2 – LIQUIDITY/GOING CONCERN The Company has incurred accumulated losses as of September 30, 2018 of $41.9 million, and has a net capital deficiency. Further losses are anticipated in developing our business, and there exists substantial doubt about the Company’s ability to continue as a going concern. As of September 30, 2018, the Company had $5.6 million of unrestricted cash on hand, $4.5 million of this amount is for the payment of joint payables from drilling operations. The Company estimates that it will need to raise a minimum of $8 million to meet its obligations and planned expenditures through December 2019. The Company plans to finance the Company through equity and/or debt financings and/or farm-out agreements. The Company also plans to extend the agreements associated with all loans, the accrued interest payable on these loans, as well as the Company’s accrued liabilities. 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. |
OIL AND NATURAL GAS PROPERTIES
OIL AND NATURAL GAS PROPERTIES | 12 Months Ended |
Sep. 30, 2018 | |
Oil and Gas Exploration and Production Industries Disclosures [Abstract] | |
OIL AND NATURAL GAS PROPERTIES | NOTE 3 – OIL AND NATURAL GAS PROPERTIES In January 2018, the Company entered into a strategic partnership with Delek Group Ltd. (“Delek”), and Texas South Energy, Inc. (“Texas South”) (collectively, the “Parties”) and executed a participation agreement for a multi-phase exploration program. Under the terms of the Agreement, the Parties have committed to drill the Company’s “Canoe” and “Tau” prospects (the “Initial Phase”) with Delek having the option to participate in two additional two-well drilling phases and a final, three-well drilling phase (collectively, the “Phases”). In each Phase, Delek will earn a 75% working interest upon paying 90% of the exploratory costs associated with drilling each exploratory well. The Company will retain a 20% working interest while paying 8% of the exploratory costs associated with drilling each well. The Company will be required to fund 20% of any well costs in excess of 115% of budget. In addition, Delek will pay the Company approximately $1.1 million in cash for each Prospect when the respective exploration plan is filed with BOEM. Also, each Party will be responsible for their pro rata share (based on working interest) of delay rentals associated with the Prospects. The Company will be the Operator during exploratory drilling of the Prospect, however, subsequent to a commercial discovery, Delek will have the right to become the Operator. Delek will have the right to terminate this Agreement at the conclusion of any drilling Phase. Delek will also have the option to purchase up to 5% of the Company’s common stock, par value $0.001 per share (the “Common Stock”), upon fulfilling its obligation for each Phase (maximum of 20% in the aggregate) at a price per share equal to a 10% discount to the 30-day weighted average closing price for the Common Stock preceding the acquisition. This option will expire January 8, 2020. The Company will assign an eight-tenths of one percent of eight/eights net profits interest in certain of the Company’s oil and gas leases to include Vermilion Area, South Addition 378, Ship Shoal Area, South Addition 336, and Ship Shoal Area, South Addition 351, to Hi-View Investment Partners, LLC (“Hi-View”) in consideration for oil and gas consulting services provided pursuant to a non-exclusive consulting engagement dated October 25, 2017, by and between Hi-View, the Company, and Texas South (the “Advisory Agreement”). Hi-View will be entitled to additional assignments on the same terms and conditions as described above related to any of the Leases whereby Delek elects to participate in drilling of an exploratory well. In addition, the Company issued an aggregate of eighty million shares of Common Stock to Hi-View in consideration for oil and gas consulting services provided in facilitating the Delek farm out agreement. The value of the shares of $4.8 million determined using the share price on March 29, 2018, the date the shares were owed to Hi-View per the agreement which was the date of the funding obligation of the first well, was capitalized to unproved properties. The Company, as the operator of two wells being drilled in the Gulf of Mexico, has incurred tangible and intangible drilling costs for the wells in process and has billed its working interest partners for their respective shares of the drilling costs to date. The first of the two wells has been drilled and is being evaluated. The second well was spud in September 2018 and is currently being drilled. The Company paid $376,368 in gross annual lease rental payments to the BOEM for the year ended September 30, 2017. The Company’s share of these amounts are included in unproved properties. In August 2017, the Company competitively bid on one block in the Central Gulf of Mexico Lease Sale 249 conducted by BOEM. The Company was the high bidder on the block and paid $26,398, which represents 20% of the total lease bonus amount. On September he Company’s bid was accepted. After payment in October 2017 of $140,591, which represents the remaining 80% lease bonus and first year rentals, the Company was awarded the lease block in October 2017. In August 2017, the Company entered into a letter agreement with Texas South that sets out the terms of an agreement for the Company’s Tau prospect. In exchange for $166,989, Texas South acquired an undivided 20% interest in the prospect. In accordance with full cost requirements, the Company recorded the proceeds from the transaction as an adjustment to the capitalized costs of its oil and gas properties with no gain or loss recognition. In October 2017, the Company executed the second amendment to the March 2014 farm-out agreement with Texas South under which Texas South acquired 20% of Gulfslope’s interest in two prospects for $329,062. On January 1, 2018, the Company executed the third amendment to the March 2014 farm-out agreement with Texas South under which Texas South acquired 20% of GulfSlope’s interest in two prospects for $225,000. For the year ended September 30, 2017, the Company incurred $172,094 in consulting fees, salaries and benefits, $195,127 in stock option costs associated with geoscientists, and $53,014 associated with technological infrastructure and third party hosting services. As these G&G costs relate to specific company-owned unevaluated properties, the Company capitalized these G&G costs to unproved properties. For the year ended September 30, 2018, the Company incurred $229,267 in consulting fees, salaries and benefits associated with geoscientists, $820,877 in stock option costs associated with geoscientists and engineers, $53,934 associated with technological infrastructure and third party hosting, and $138,729 in capitalized acquisition costs. The Company capitalized these G&G costs to unproved properties. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Sep. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 4 – PROPERTY AND EQUIPMENT Property and equipment consist of the following as of September 30, 2018 and 2017: 2018 2017 Office equipment and computers $ 133,089 $ 143,897 Furniture and fixtures 16,280 16,280 Leasehold improvements 5,756 4,054 Total 155,125 164,231 Less: accumulated depreciation (140,339 ) (160,747 ) Net property and equipment $ 14,786 $ 3,484 Depreciation is computed on a straight-line basis over the estimated useful lives of the assets, which were as follows: Life Office equipment and computers 3 years Furniture and fixtures 5 years Leasehold improvements Shorter of 5 years or related lease term Depreciation expense was $4,724 and $20,804 for the years ended September 30, 2018 and 2017, respectively. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 5 – INCOME TAXES The provision for income taxes consists of the following as of September 30, 2018 and 2017: 9/30/2018 9/30/2017 FEDERAL Current $ — $ — Deferred — — STATE Current — — Deferred — — TOTAL PROVISION $ — $ — The difference between the actual income tax provision versus tax computed at the statutory rate is as follows for the years ended September 30, 2018 and 2017, respectively: 9/30/2018 9/30/2017 Expected provision (based on statutory rate of 21% in 2018 and 15% in 2017) $ (553,714 ) $ (854,152 ) Effect of: Increase in valuation allowance 2,696,631 732,562 Non-deductible expense 53,493 121,590 Rate change (2,305,270 ) — Other, net 108,860 — Total actual provision $ — $ — On December 22, 2017, the President of the United States (“the President”) signed into law the tax bill commonly referred to as the “Tax Cuts and Job Act” (“TCJA”), significantly changing federal income tax laws. According to ASC section 740, “Income Taxes,” a company is required to record the effects of an enacted tax law or rate change in the period of enactment, which is the date the bill is signed by the President and becomes law. The Company does not have any material uncertain tax positions. The Company’s policy is to recognize interest and penalties accrued related to unrecognized tax benefits as a component of income tax expense (benefit). For the years ended September 30, 2018 and 2017, the Company did not recognize any interest or penalties, nor did we have any interest or penalties accrued as of September 30, 2018 and 2017 relating to unrecognized benefits. Deferred income tax assets and liabilities at September 30, 2018 and 2017 consist of the following: 9/30/2018 9/30/2017 DEFERRED TAX ASSETS (LIABILITIES) Net operating losses $ 7,131,636 $ 5,611,276 Exploration costs (1,503,472 ) (931,289 ) Oil and natural gas leases 2,192,654 691,336 Stock based compensation 411,287 138,278 Accrued interest and expenses not paid 271,190 246,360 Derivative financial instrument (57,059 ) — Differences in book/tax depreciation 13,573 7,215 Net deferred tax asset $ 8,459,809 $ 5,763,176 Valuation allowance (8,459,809 ) (5,763,176 ) NET DEFERRED TAXES $ — $ — The Company’s valuation allowance increased $2,696,633 during the year ended September 30, 2018 and $732,562 during the year ended September 30, 2017. At September 30, 2018, the Company had approximately $34.0 million of NOLs, 95% of which will expire from 2032 to 2037. All of the Company’s NOLs are allowable as a deduction against 100 percent of future taxable income since they were generated prior to the effective date of limitations imposed by the TCJA. The tax years ended September 30, 2015 through 2018 are open for examination for federal income tax purposes and by other major taxing jurisdictions to which we are subject. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Sep. 30, 2018 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 6 – 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 year ended September 30, 2017, the Company entered into promissory notes with John Seitz whereby it borrowed a total of $602,500. 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 September 30, 2018 and September 30, 2017 the total amount owed to John Seitz, our CEO, is $8,675,500. There was a total of $1,641,086 and $1,201,286 of unpaid interest associated with these loans included in accrued interest within our balance sheet as of September 30, 2018 and 2017, respectively. 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 former 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 September 30, 2018, the total amount owed to Dr. Bain and his affiliate was $267,000. There was a total of $42,706 and $27,171 of accrued interest associated with these loans included within our balance sheet as of September 30, 2018 and 2017, respectively. In June of 2016, Dr. Ronald Bain also entered into a $92,000 convertible promissory note with associated warrants under the same terms received by other investors (see Note 7). On November 15, 2016, a family member of the CEO, a related party, entered into a $50,000 convertible promissory note with associated warrants under the same terms received by other investors (see Note 7). Domenica Seitz CPA, related to John Seitz, has provided accounting consulting services to the Company. During the years ended September 30, 2018 and 2017, the services provided were valued at $23,660 and $32,625, respectively. The Company has accrued these amounts within accrued expenses and other payables, and they have been reflected in the September 30, 2018 and 2017 financial statements. John Seitz has not received a salary since May 31, 2013, the date he commenced serving as our CEO and accordingly, no amount has been accrued on our financial statements. |
NOTES PAYABLE
NOTES PAYABLE | 12 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE | NOTE 7 – NOTES PAYABLE Between June and November 2016, the Company issued eleven convertible promissory notes (“Bridge Financing 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 had a maturity of one year (prior to extension), 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 represented embedded derivatives. 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 approximately $452,000 to the warrants and approximately $385,000 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 approximately $385,000. Accordingly, the debt discount associated with these notes was approximately $837,000. Such discount was amortized using the effective interest rate method over the term (one year) of the convertible notes. Upon maturity of eight of the eleven promissory notes in June 2017, the Company issued 3,225,000 extension warrants with an exercise price of $0.03 per share (equal to 25% of the original warrant amount) to the holders of the notes to extend the terms to January 15, 2018. The Company evaluated this modification including considering the fair value of the warrants issued and concluded that extinguishment accounting was required as the present value of future cash flows from the new note, including the fair value of the warrants issued to extend, exceeded the present value of future cash flows of the old note by more than 10%. The fair value of the warrants was deemed to be approximately $51,000 and such amount was recognized immediately as a loss on extinguishment of debt. The fair value of the warrants was determined using the Black-Scholes option pricing model. In July and August 2017, the three remaining promissory notes issued in July, August and November 2016 were extended until January 15, 2018 and issued 3,750,000 extension warrants (equal to 25% of the original warrant amount). The Company evaluated this transaction including considering the fair value of the warrants issued and concluded that modification accounting was required as the present value of future cash flows from the new note, including the fair value of the warrants issued to extend, was less than 10% of the present value of future cash flows of the old note. When an instrument is modified, any incremental increase in value (in this case the warrants) should be added to the discount of the notes and such discount should be amortized to interest expense using the effective interest rate method over the new remaining life of the note. The fair value of the warrants, approximately $39,000, was determined using the Black-Scholes option pricing model. Upon revised maturity of the eleven promissory notes on January 15, 2018, the Company issued 2,790,000 extension warrants with an exercise price of $0.10 per share (equal to 10% of the original warrant amount) to the holders of the notes to extend the term to April 16, 2018. The Company evaluated this transaction including considering the fair value of the warrants issued and concluded that extinguishment accounting was required as the present value of future cash flows from the new note, including the fair value of the warrants issued to extend, exceeded the present value of future cash flows of the old note by more than 10%. The fair value of the warrants was deemed to be approximately $217,000 and such amount was recognized immediately as a loss on extinguishment of debt. The fair value of the warrants was determined using the Black-Scholes option pricing model. In June 2018, the maturity date of all of the notes was extended to January 15, 2019. For the year ended September 30, 2018, the amortization of the discounts associated with the Bridge Financing Notes was approximately $30,000. Six of the Bridge Financing Notes with a principal balance of $560,000 plus accrued interest of $86,525 were converted during the year ended September 30, 2018. The remaining note balance at September 30, 2018 is $277,000. See Note 9 for a summary of the warrants outstanding relating to the Bridge Financing Notes. On December 28, 2016, the Company issued a convertible promissory note (together with the convertible promissory notes issued below, the “Financing Notes”) 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 approximately $56,000, which includes 10% original issue discount (“OID”) 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 represented embedded derivatives. 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 approximately $8,000 to the restricted stock, approximately $8,000 to the warrants and approximately $34,000 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 approximately $34,000. Accordingly, at December 28, 2016, the debt discount associated with these notes was approximately $56,000. Such discount was amortized using the effective interest rate method over the term (seven months) of the convertible note. For the year ended September 30, 2017 amortization of this discount totaled $56,000 and is included in interest expense in the statement of operations. The note, related OID and accrued interest were converted into approximately 5.5 million shares of GulfSlope Energy common stock in a series of conversions beginning on July 10, 2017 and ending with a conversion on September 18, 2017 on which date all were paid in full. 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 approximately $111,000, which includes 10% original issue discount (“OID”), 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 represented embedded derivatives. 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 approximately $17,000 to the restricted stock, approximately $14,000 to the warrants and approximately $69,000 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 approximately $69,000. Accordingly, at March 14, 2017, the debt discount associated with these notes was approximately $111,000. Such discount will be amortized using the effective interest rate method over the term (seven months) of the convertible note. For the year ended September 30, 2017 amortization of this discount totaled approximately $106,000 and is included in interest expense in the statement of operations. In September 2017, $30,000 was converted into 1.5 million shares of stock, leaving a note balance of $81,111 at September 30, 2017. The remaining balance and accrued interest were converted in October 2017 at which time all was paid in full. On October 16, 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 $110,000, which includes 10% original issue discount (“OID”), 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 $250,000 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 represented embedded derivatives. 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 approximately $21,000 to the restricted stock, approximately $20,000 to the warrants and approximately $59,000 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 approximately $59,000. Accordingly, at October 16, 2017, the debt discount associated with these notes was $110,000. Such discount was amortized using the effective interest rate method over the term (seven months) of the convertible note. In April 2018 the note and accrued interest was converted into 5.8 million shares of common stock and paid in full. On December 15, 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 $110,000, which includes 10% original issue discount (“OID”), 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 $150,000 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 represented embedded derivatives. 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 approximately $28,000 to the restricted stock, approximately $27,000 to the warrants and approximately $45,000 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 approximately $45,000. Accordingly, at December 15, 2017, the debt discount associated with these notes was $110,000. Such discount was amortized using the effective interest rate method over the term (seven months) of the convertible note. In June 2018 the note and accrued interest was converted into 5.8 million shares of common stock and paid in full. See Note 9 for a summary of the warrants outstanding relating to the Financing Notes. |
Fair Value Measurement
Fair Value Measurement | 12 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement | NOTE 8 – Fair Value Measurement Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are classified and disclosed in one of the following categories: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. GulfSlope considers active markets as those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability. This category includes those derivative instruments that GulfSlope values using observable market data. Substantially all of these inputs are observable in the marketplace throughout the term of the derivative instrument, can be derived from observable data, or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category include non-exchange traded derivative financial instruments as well as long-term incentive plan liabilities calculated using the Black-Scholes model to estimate the fair value as of the measurement date. Level 3: Measured based on prices or valuation models that require inputs that are both significant to the fair value measurement and less observable from objective sources (i.e. supported by little or no market activity). Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. Fair Value on a Recurring Basis The following table sets forth by level within the fair value hierarchy GulfSlope Energy, Inc.’s liabilities that were accounted for at fair value on a recurring basis as of September 30, 2018 (no financial assets or liabilities were accounted for at fair value on a recurring basis as of September 30, 2017): Fair Value Measurements Using Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Total Carrying Description (Level 1) (Level 2) (Level 3) Value as of (In thousands) Derivative Financial Instrument $ — $ (271,710 ) $ — $ (271,710 ) Total as of Total as of September 30, 2018 $ — $ (271,710 ) $ — $ (271,710 ) During the years ended September 30, 2018 and 2017, the Company did not have any assets or liabilities measured at fair value on a non-recurring basis. |
COMMON STOCK_PAID IN CAPITAL
COMMON STOCK/PAID IN CAPITAL | 12 Months Ended |
Sep. 30, 2018 | |
Stockholders' Equity Note [Abstract] | |
COMMON STOCK/PAID IN CAPITAL | NOTE 9 - COMMON STOCK/PAID IN CAPITAL At our annual shareholder meeting in May of 2018 our shareholders approved increasing the number of authorized shares of common stock from 975,000,000 to 1,500,000,000. The number of authorized shares of preferred stock was not changed and is 50,000,000. As discussed in Note 7, during the year ended September 30, 2016, the Company issued 26.2 million warrants in conjunction with the Bridge Financing Notes. The warrants have an exercise price of $0.03 and a term of the earlier of 3 years or upon a change of control. In November 2016, the Company issued 1.7 million warrants in conjunction with the Bridge Financing Notes. The warrants have an exercise price of $0.03 and a term of the earlier of 3 years or upon a change of control. In June through August 2017, the maturity date of all of the Bridge Financing Notes was extended to January 15, 2018 in exchange for the issuance of 25% additional warrants. The warrants have an exercise price of $0.03 and the same expiration date (three years from original transaction) as the original warrants. In January 2018, the maturity date of all of the Bridge Financing Notes was extended to April 16, 2018 in exchange for the issuance of 10% additional warrants. The warrants have an exercise price of $0.10 and the same expiration date (three years from original transaction) as the original warrants. In June 2018, a majority of the Bridge Note holders extended their notes to January 15, 2019, thus extending all the remaining Bridge Notes to this date. The fair value of the warrants were determined using the Black Scholes valuation model with the following key assumptions: 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 June 2017 July 2017 August 2017 January 2018 Warrants Issued 12.9 million 10.0 million 3.3 million 1.7 million 3.2 million 2.5 million 1.25 million 2.8 Million Stock Price: $ 0.054 (1) $ 0.040 (1) $ 0.032 (1) $ 0.029 (1) $ 0.025 (1) $ 0.019 (1) $ 0.016 (1) $ 0.11 (1) Exercise Price $ 0.03 $ 0.03 $ 0.03 $ 0.03 $ 0.03 $ 0.03 $ 0.03 $ 0.10 Term 3 years 3 years 3 years 3 years 2 years 2 years 2 years 1.5 years Risk Free Rate .87 % .80 % .88 % 1.28 % 1.35 % 1.35 % 1.33 % 1.89% Volatility 135 % 138 % 137 % 131 % 135 % 136 % 135 % 163% (1) Fair market value on the date of agreement. A summary of warrants, issued in conjunction with the Bridge Financing Notes and outstanding at September 30, 2018: Warrants Outstanding Warrants Exercisable Date Issued Exercise Price Number Outstanding Weighted Average Remaining Contractual Life (Yrs) Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price June 2016 $ 0.03 12,566,667 .69 $ 0.03 12,566,667 $ 0.03 July 2016 $ 0.03 10,000,000 .79 $ 0.03 10,000,000 $ 0.03 August 2016 $ 0.03 3,333,333 .88 $ 0.03 3,333,333 $ 0.03 November 2016 $ 0.03 1,666,667 1.13 $ 0.03 1,666,667 $ 0.03 June 2017 $ 0.03 3,141,667 .69 $ 0.03 3,141,667 $ 0.03 July 2017 $ 0.03 2,500,000 .79 $ 0.03 2,500,000 $ 0.03 August 2017 $ 0.03 833,333 .88 $ 0.03 833,333 $ 0.03 August 2017 $ 0.03 416,667 1.13 $ 0.03 416,667 $ 0.03 January 2018 $ 0.10 2,790,000 .78 $ 0.10 2,790,000 $ 0.10 In December 2016 and March 2017 the Company issued 500,000 and 1,000,000 shares of GulfSlope Energy stock, respectively to an investor as part of a financing transaction (see Financing Notes in Note 7). In December 2016 and March 2017 the Company issued 550,000 and 1,100,000 warrants to purchase stock at $0.10 per share to an investor as part of a financing transaction (see Financing Notes in Note 7). The warrants have a term of 5 years. In October 2017 and December 2017 the Company issued 1,000,000 and 1,000,000 shares of GulfSlope Energy stock, respectively to an investor as part of a financing transaction (see Financing Notes in Note 7). In October 2017 and December 2017 the Company issued 1,100,000 and 1,100,000 warrants to purchase stock at $0.10 per share to an investor as part of a financing transaction (see Financing Notes in Note 7). The warrants have a term of 5 years. A summary of the Financing Note warrants, issued in conjunction with the Financing Notes and outstanding at September 30, 2018: Warrants Outstanding Warrants Exercisable Exercise Price Number Outstanding Remaining Contractual Life (Yrs) Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price $ 0.10 550,000 3.25 $ 0.10 550,000 $ 0.10 $ 0.10 1,100,000 3.46 $ 0.10 1,100,000 $ 0.10 $ 0.10 1,100,000 4.04 $ 0.10 1,100,000 $ 0.10 $ 0.10 1,100,000 4.21 $ 0.10 1,100,000 $ 0.10 Beginning in August 2018, the Company began negotiating a capital raise which is expected to consist of the issuance of common shares and warrants. The specific terms of the capital raise have not been finalized including the number of shares and warrants to be received by each investor. In September 2018, the Company issued approximately 4 million shares of common stock valued at approximately $231,000 on the date of grant and 2 million warrants valued at $80,000 utilizing the Black Scholes model with an exercise price of $0.15 per share in settlement of a liability for services rendered. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 12 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK-BASED COMPENSATION | NOTE 10 – STOCK-BASED COMPENSATION On January 1, 2017, 33.5 million stock options were granted to employees, officers and directors of the Company. The CEO was not included in the award. The stock options vested 50% on January 1, 2017 and 50% on January 1, 2018. The stock options are exercisable for seven years from the original grant date of January 1, 2017, until January 1, 2024. In May 2018, 500,000 stock options were granted to an employee. In June 2018, 33.5 million stock options were granted to employees, officers and directors of the Company. The CEO was not included in the award. Approximately 33% of the stock options vested on June 1, 2018 and approximately 33% will vest on June 1, 2019 and 2020, respectively, provided that the option holder continues to serve as an employee or director on the vesting date. The stock options are exercisable from the original grant date until December 31, 2025. Stock-based compensation cost is measured at the grant date, based on the estimated fair value of the award, and is recognized over the vesting period. The Company recognized $1,857,531 and $653,669 in stock-based compensation expense for the years ended September 30, 2018 and 2017, respectively. A portion of these costs allocable to the Company’s exploration activities, $820,877 and $195,125 were capitalized to unproved properties and the remainder was recorded as general and administrative expenses, for the years ended September 30, 2018 and 2017, respectively. The following table summarizes the Company’s stock option activity during the year ended September 30, 2018: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Average Intrinsic Value Outstanding at beginning of period 35,500,000 $ 0.033 Granted 68,000,000 0.075 — Exercised — — — Cancelled — — — Outstanding at end of period 103,500,000 $ 0.0605 3.32 $ 1.2 million Vested and expected to vest 103,500,000 $ 0.0605 3.32 $ 1.2 million Exercisable at end of period 54,500,000 $ 0.0475 — $ 1.3 million The Company uses the Black-Scholes option-pricing model to estimate the fair value of options granted. The weighted-average fair values of stock options granted for the years ended September 30, 2018 and 2017 were based on the following assumptions at the date of grant as follows: 2018 2017 Expected dividend yield 0 % 0 % Expected stock price volatility 145.2 % 127.2 % Risk-free interest rate 2.7 % 1.71 % Expected life of options 7 years 4 years Weighted-average grant date fair value $ 0.065 $ 0.022 The Company used its historical stock trading price volatility for the last four years. 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. As of September 30, 2018 there was $2.7 million of unrecognized stock-based compensation cost related to the stock option grants expected to be amortized over a weighted average period of three years. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 11 – COMMITMENTS AND CONTINGENCIES From time to time, the Company may become involved in litigation relating to claims arising out of its operations in the normal course of business. No legal proceedings, government actions, administrative actions, investigations or claims are currently pending against us or involve the Company. In July 2018 the Company entered into a 39 month lease for approximately 5,000 square feet of office space in 4 Houston Center in downtown Houston. Annual base rent is approximately $94 thousand for the first 18 months, increasing to approximately $97 thousand and $99 thousand, respectively during the remaining term of the lease. The Company reached an agreement with a vendor in August 2018 for the settlement of approximately $1 million in debt. The vendor was paid $150,000 in cash, future cash payments of $7,500 and 10 million shares of GulfSlope common stock. The agreement contains a provision that upon the sale of the common stock if the original debt is not fully satisfied, full payment will be made, under a mutually agreed payment plan. If the stock is sold for a gain any surplus in excess of $1.3 million shall be a credit against future purchases from the vendor. The agreement was determined to meet the definition of a derivative in accordance with ASC 815. At September 30, 2018 there is a fair value liability of $271,710. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Sep. 30, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 12 – SUBSEQUENT EVENTS In October 2018, the Company purchased an insurance policy for $159,995 and financed $146,310 of the premium by executing a note payable. In October 2018, the Company paid the 80% lease bonus payment and the first year rentals in the amount of $139,809 and was awarded Gulf of Mexico lease block Eugene Island, South Addition 371. In November 2018, the Company paid the 80% lease bonus payment and the first year rentals in the amount of $187,809 and was awarded Gulf of Mexico lease block Vermillion, South Addition 376. |
ORGANIZATION AND SUMMARY OF S_2
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | (b) Basis of Presentation The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and the instructions to Form 10-K and Regulation S-X published by the US Securities and Exchange Commission (the “SEC”). The accompanying financial statements include the accounts of the Company. |
Going Concern | (c) Going Concern The Company’s financial statements have been presented on the basis that it is a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred net losses through September 30, 2018 of $41.9 million, has a lack of cash on-hand not from joint interest owners, and a working capital deficit. These factors raise substantial doubt as to the Company’s ability to continue as a going concern. Management intends to raise additional operating funds through equity and/or debt offerings. Management also plans to extend the agreements associated with loans from related parties, the accrued interest payable on these loans, as well as the Company’s accrued liabilities. However there can be no assurance that additional financing will be available, or if available, will be on terms acceptable to the Company. If adequate working capital is not available, the Company may be required to curtail or cease operations or the Company would need to sell assets or consider alternative plans up to and including restructuring. |
Cash | (d) Cash The Company considers all short-term highly liquid investments with an original maturity at the date of purchase of three months or less to be cash equivalents. There were no cash equivalents at September 30, 2018 and 2017, respectively. |
Accounts Receivable | (e) Accounts Receivable The Company records an accounts receivable for operations expense reimbursements due from joint interest partners. The Company estimates allowances for doubtful accounts based on the aged receivable balances and historical losses. If the Company determines any account to be uncollectible based on significant delinquency or other factors, it is immediately written off. As of September 30, 2018 and 2017, no allowance was recorded. Accounts receivable from joint operations are $6.7 million at September 30, 2018. |
Full Cost Method | (f) Full Cost Method The Company uses the full cost method of accounting for its oil and gas exploration and development activities. 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”), whereby capitalized costs are amortized over total proved 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 cost center ceiling is defined as the sum of (a) estimated future net revenues, discounted at 10% per annum, from proved reserves, (b) the cost of properties not being amortized, if any, and (c) the lower of cost or market value of unproved properties included in the cost being amortized. 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 September 30, 2018, the Company’s oil and gas properties consisted of unproved properties, wells in process and no proved reserves. |
Property and Equipment | (g) Property and Equipment Property and equipment are carried at cost and include expenditures for new equipment and those expenditures that substantially increase the productive lives of existing equipment and leasehold improvements. Maintenance and repair costs are expensed as incurred. Property and equipment are depreciated on a straight-line basis over the assets’ estimated useful lives. Fully depreciated property and equipment still in use are not eliminated from the accounts. The Company assesses the carrying value of its property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparing estimated undiscounted cash flows, expected to be generated from such assets, to their net book value. If net book value exceeds estimated cash flows, the asset is written down to its fair value, determined by the estimated discounted cash flows from such asset. When an asset is retired or sold, its cost and related accumulated depreciation and amortization are removed from the accounts. The difference between the net book value of the asset and proceeds on disposition is recorded as a gain or loss in our statements of operations in the period in which they occur. |
Income Taxes | (h) Income Taxes Deferred tax assets and liabilities are recognized for the temporary differences between the financial reporting basis and tax basis of the Company’s assets and liabilities at enacted tax rates expected to be in effect when such amounts are realized or settled. A valuation allowance is provided if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company’s policy is to recognize potential interest and penalties accrued related to unrecognized tax benefits as a component of income tax expense. |
Stock-Based Compensation | (i) Stock-Based Compensation The Company records expenses associated with the fair value of stock-based compensation. For fully vested and restricted stock grants, the Company calculates the stock based compensation expense based upon estimated fair value on the date of grant. For stock warrants and options, the Company uses the Black-Scholes option valuation model to calculate stock based compensation at the date of grant. Option pricing models require the input of highly subjective assumptions, including the expected price volatility. Changes in these assumptions can materially affect the fair value estimate. (j) Stock Issuance The Company records the stock-based compensation awards issued to non-employees and other external entities for goods and services at either the fair market value of the goods received or services rendered or the instruments issued in exchange for such services, whichever is more readily determinable. |
Earnings per Share | (k) Earnings per Share Basic earnings per share (“EPS”) is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period. 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, convertible notes and restricted stock. The number of potential common shares outstanding relating to stock options, warrants, and restricted stock is computed using the treasury stock or if-converted method. As the Company has incurred losses for the years ended September 30, 2018 and 2017, the potentially dilutive shares are anti-dilutive and thus not added into the EPS calculations. As of September 30, 2018 and 2017, there were 213,089,281 and 164,345,443 potentially dilutive shares, respectively. |
Use of Estimates | (l) Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Impact of New Accounting Standards | (m) Impact of New Accounting Standards 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 replaces most existing revenue recognition guidance. ASU 2014-09 will be effective for us October 1, 2018. Once implemented, the Company can use one of two retrospective application methods for prior periods. The Company has completed its evaluation of the provisions of this standard and concluded that the adoption will not result in any adjustment to beginning accumulated deficit as the Company does not have any revenues. The Company will adopt this new standard effective October 1, 2018 using the modified retrospective method of adoption as permitted by the standard. The adoption of Topic 606 will have no material impact on our financial position, results of operations, stockholders’ equity, or cash flows, but will impact disclosures when the Company has revenue. On February 25, 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) he new guidance establishes the principles to report transparent and economically neutral information about the assets and liabilities that arise from leases. The new guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, and early application is permitted for all organizations. The Company has not yet selected the period during which it will implement this pronouncement, and it is currently evaluating the impact the adoption of ASU 2016-02 will have on its financial statements. The Jumpstart Our Business Startups Act, or JOBS Act, provides that an emerging growth company can take advantage of the extended transition period for complying with new or revised accounting standards. An emerging growth company can therefore delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. However, the Company has elected not to take advantage of such extended transition period, and as a result, will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. 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. |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | Property and equipment consist of the following as of September 30, 2018 and 2017: 2018 2017 Office equipment and computers $ 133,089 $ 143,897 Furniture and fixtures 16,280 16,280 Leasehold improvements 5,756 4,054 Total 155,125 164,231 Less: accumulated depreciation (140,339 ) (160,747 ) Net property and equipment $ 14,786 $ 3,484 |
Schedule of estimated useful lives of assets | Depreciation is computed on a straight-line basis over the estimated useful lives of the assets, which were as follows: Life Office equipment and computers 3 years Furniture and fixtures 5 years Leasehold improvements Shorter of 5 years or related lease term |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of actual income tax provision for continuing operations | The provision for income taxes consists of the following as of September 30, 2018 and 2017: 9/30/2018 9/30/2017 FEDERAL Current $ — $ — Deferred — — STATE Current — — Deferred — — TOTAL PROVISION $ — $ — |
Schedule of provision for income taxes | The difference between the actual income tax provision versus tax computed at the statutory rate is as follows for the years ended September 30, 2018 and 2017, respectively: 9/30/2018 9/30/2017 Expected provision (based on statutory rate of 21% in 2018 and 15% in 2017) $ (553,714 ) $ (854,152 ) Effect of: Increase in valuation allowance 2,696,631 732,562 Non-deductible expense 53,493 121,590 Rate Change (2,305,270 ) — Other, net 108,860 — Total actual provision $ — $ — |
Schedule of deferred income tax assets and liabilities | Deferred income tax assets and liabilities at September 30, 2018 and 2017 consist of the following: 9/30/2018 9/30/2017 DEFERRED TAX ASSETS (LIABILITIES) Net operating losses $ 7,131,636 $ 5,611,276 Exploration costs (1,503,472 ) (931,289 ) Oil and natural gas leases 2,192,654 691,336 Stock based compensation 411,287 138,278 Accrued interest and expenses not paid 271,190 246,360 Derivative financial instrument (57,059 ) — Differences in book/tax depreciation 13,573 7,215 Net deferred tax asset $ 8,459,809 $ 5,763,176 Valuation allowance (8,459,809 ) (5,763,176 ) NET DEFERRED TAXES $ — $ — |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value on recurring basis | The following table sets forth by level within the fair value hierarchy GulfSlope Energy, Inc.’s liabilities that were accounted for at fair value on a recurring basis as of September 30, 2018 (no financial assets or liabilities were accounted for at fair value on a recurring basis as of September 30, 2017): Fair Value Measurements Using Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Total Carrying Description (Level 1) (Level 2) (Level 3) Value as of (In thousands) Derivative Financial Instrument $ — $ (271,710 ) $ — $ (271,710 ) Total as of Total as of September 30, 2018 $ — $ (271,710 ) $ — $ (271,710 ) |
COMMON STOCK_PAID IN CAPITAL (T
COMMON STOCK/PAID IN CAPITAL (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
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 June 2017 July 2017 August 2017 January 2018 Warrants Issued 12.9 million 10.0 million 3.3 million 1.7 million 3.2 million 2.5 million 1.25 million 2.8 Million Stock Price: $ 0.054 (1) $ 0.040 (1) $ 0.032 (1) $ 0.029 (1) $ 0.025 (1) $ 0.019 (1) $ 0.016 (1) $ 0.11 Exercise Price $ 0.03 $ 0.03 $ 0.03 $ 0.03 $ 0.03 $ 0.03 $ 0.03 $ 0.10 Term 3 years 3 years 3 years 3 years 2 years 2 years 2 years 1.5 years Risk Free Rate .87 % .80 % .88 % 1.28 % 1.35 % 1.35 % 1.33 % 1.89% Volatility 135 % 138 % 137 % 131 % 135 % 136 % 135 % 163% (1) Fair market value on the date of agreement. |
Schedule of warrants issued in conjunction with Financing Notes | A summary of warrants, issued in conjunction with the Bridge Financing Notes and outstanding at September 30, 2018: Warrants Outstanding Warrants Exercisable Date Issued Exercise Price Number Outstanding Weighted Average Remaining Contractual Life (Yrs) Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price June 2016 $ 0.03 12,566,667 .69 $ 0.03 12,566,667 $ 0.03 July 2016 $ 0.03 10,000,000 .79 $ 0.03 10,000,000 $ 0.03 August 2016 $ 0.03 3,333,333 .88 $ 0.03 3,333,333 $ 0.03 November 2016 $ 0.03 1,666,667 1.13 $ 0.03 1,666,667 $ 0.03 June 2017 $ 0.03 3,141,667 .69 $ 0.03 3,141,667 $ 0.03 July 2017 $ 0.03 2,500,000 .79 $ 0.03 2,500,000 $ 0.03 August 2017 $ 0.03 833,333 .88 $ 0.03 833,333 $ 0.03 August 2017 $ 0.03 416,667 1.13 $ 0.03 416,667 $ 0.03 January 2018 $ 0.10 2,790,000 .78 $ 0.10 2,790,000 $ 0.10 A summary of the Financing Note warrants, issued in conjunction with the Financing Notes and outstanding at September 30, 2018: Warrants Outstanding Warrants Exercisable Exercise Price Number Outstanding Remaining Contractual Life (Yrs) Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price $ 0.10 550,000 3.25 $ 0.10 550,000 $ 0.10 $ 0.10 1,100,000 3.46 $ 0.10 1,100,000 $ 0.10 $ 0.10 1,100,000 4.04 $ 0.10 1,100,000 $ 0.10 $ 0.10 1,100,000 4.21 $ 0.10 1,100,000 $ 0.10 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of fair value assumptions for stock-options | The following table summarizes the Company’s stock option activity during the year ended September 30, 2018: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Average Intrinsic Value Outstanding at beginning of period 35,500,000 $ 0.033 Granted 68,000,000 0.075 — Exercised — — — Cancelled — — — Outstanding at end of period 103,500,000 $ 0.0605 3.32 $ 1.2 million Vested and expected to vest 103,500,000 $ 0.0605 3.32 $ 1.2 million Exercisable at end of period 54,500,000 $ 0.0475 — $ 1.3 million |
Summary of stock options activity | The Company uses the Black-Scholes option-pricing model to estimate the fair value of options granted. The weighted-average fair values of stock options granted for the years ended September 30, 2018 and 2017 were based on the following assumptions at the date of grant as follows: 2018 2017 Expected dividend yield 0 % 0 % Expected stock price volatility 145.2 % 127.2 % Risk-free interest rate 2.7 % 1.71 % Expected life of options 7 years 4 years Weighted-average grant date fair value $ 0.065 $ 0.022 |
ORGANIZATION AND SUMMARY OF S_3
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) | 12 Months Ended | |
Sep. 30, 2018USD ($)Numbershares | Sep. 30, 2017USD ($)shares | |
Accounting Policies [Abstract] | ||
Number of leased federal outer continental shelf blocks | Number | 14 | |
Number of licensed three-dimensional (3-D) seismic data | Number | 3 | |
Accumulated losses | $ | $ (41,858,257) | $ (39,221,523) |
Antidilutive securities excluded from EPS calculation | shares | 213,089,281 | 164,345,443 |
Accounts receivable, net | $ | $ 6,286,796 |
LIQUIDITY_GOING CONCERN (Detail
LIQUIDITY/GOING CONCERN (Details Narrative) - USD ($) | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Liquiditygoing Concern | |||
Accumulated losses | $ (41,858,257) | $ (39,221,523) | |
Unrestricted cash | 5,621,814 | $ 6,426 | $ 64,114 |
Payment of joint payables for drilling operations | 4,500,000 | ||
Minimum capital which company estimated to raise to meet its obligations and planned expenditures | $ 8,000,000 |
OIL AND NATURAL GAS PROPERTIES
OIL AND NATURAL GAS PROPERTIES (Details Narrative) | Jan. 08, 2018USD ($)$ / shares | Oct. 25, 2017USD ($) | Oct. 31, 2017USD ($) | Aug. 31, 2017USD ($)Number | Sep. 30, 2018USD ($)$ / shares | Sep. 30, 2017USD ($)$ / shares | Mar. 29, 2018USD ($) | Jan. 02, 2018USD ($) |
Impairment of oil and natural gas properties | $ 3,316,212 | |||||||
Ownership percentage by Texas South | 20.00% | |||||||
Proceeds received under letter agreement | $ 166,989 | |||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | ||||||
Issuance of stock for consulting services | $ 5,206,753 | |||||||
Value of common stock | 832,013 | $ 692,196 | ||||||
Hi-View Investment Partners, LLC [Member] | ||||||||
Issuance of stock for consulting services | $ 80,000,000 | |||||||
Value of common stock | $ 4,800,000 | |||||||
Second Amendment [Member] | ||||||||
Ownership percentage by Texas South | 20.00% | |||||||
Proceeds to be received under farm out agreement | $ 329,062 | |||||||
Participation agreement [Member] | ||||||||
Percent of working interest | 20.00% | |||||||
Percent of exploratory costs | 8.00% | |||||||
Participation agreement [Member] | Delek GOM Investments, LLC [Member] | ||||||||
Percent of working interest | 75.00% | |||||||
Percent of exploratory costs | 90.00% | |||||||
Cash for each prospect exploration plan | $ 1,100,000 | |||||||
Percentage of option to purchase | 5.00% | |||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | |||||||
Percent of obligation for each Phase | 20.00% | |||||||
Percent of common stock preceding under acquisition | 10.00% | |||||||
Participation agreement [Member] | Delek GOM Investments, LLC [Member] | Minimum [Member] | ||||||||
Percent to fund well costs | 20.00% | |||||||
Percent of budget to fund well costs | 115.00% | |||||||
Third Amendment [Member] | ||||||||
Ownership percentage by Texas South | 20.00% | |||||||
Proceeds to be received under farm out agreement | $ 225,000 | |||||||
Consulting Fees And Salaries And Benefits [Member] | ||||||||
Exploration costs capitalized during the period | 229,267 | 172,094 | ||||||
Stock Option Costs [Member] | ||||||||
Exploration costs capitalized during the period | 820,877 | 195,127 | ||||||
Technological Infrastructure And Third Party Hosting Services [Member] | ||||||||
Exploration costs capitalized during the period | 53,934 | 53,014 | ||||||
Capitalized Acquisition Costs [Member] | ||||||||
Exploration costs capitalized during the period | $ 138,729 | |||||||
Bureau Of Ocean Energy Management [Member] | ||||||||
Gross annual lease rental payments | $ 376,368 | |||||||
Blocks acquired | Number | 1 | |||||||
Lease paid | $ 140,591 | $ 26,398 | ||||||
Percent of total lease bonus amount | 80.00% | 20.00% |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation | $ 4,723 | $ 20,804 |
PROPERTY AND EQUIPMENT (Detai_2
PROPERTY AND EQUIPMENT (Details) - USD ($) | Sep. 30, 2018 | Sep. 30, 2017 |
Property, Plant and Equipment [Line Items] | ||
Gross property and equipment | $ 155,125 | $ 164,231 |
Less: accumulated depreciation | (140,339) | (160,747) |
Net property and equipment | 14,786 | 3,484 |
Office Equipment And Computers [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Gross property and equipment | 133,089 | 143,897 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Gross property and equipment | 16,280 | 16,280 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Gross property and equipment | $ 5,756 | $ 4,054 |
PROPERTY AND EQUIPMENT (Detai_3
PROPERTY AND EQUIPMENT (Details 1) | 12 Months Ended |
Sep. 30, 2018 | |
Leasehold Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Lives | 5 years |
Furniture and Fixtures [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Lives | 5 years |
Office Equipment And Computers [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Lives | 3 years |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | ||
Valuation allowance increase | $ 2,696,633 | $ 732,562 |
Net operating loss carryforwards | $ 34,000,000 | |
Percent of net operating loss expire from 2032 to 2037 | 95.00% | |
Percent of NOLs allowable deduction against future taxable income | 100.00% |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
FEDERAL | ||
Current | $ 0 | $ 0 |
Deferred | 0 | 0 |
STATE | ||
Current | 0 | 0 |
Deferred | 0 | 0 |
TOTAL PROVISION | $ 0 | $ 0 |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) - USD ($) | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | ||
Expected provision (based on statutory rate of 21% in 2018 and 15% in 2017) | $ (553,714) | $ (854,152) |
Effect of: | ||
Increase in valuation allowance | 2,696,631 | 732,562 |
Non-deductible expense | 53,493 | 121,590 |
Rate Change | (2,305,270) | |
Other, net | 108,860 | |
TOTAL PROVISION | $ 0 | $ 0 |
Statutory tax rate | 21.00% | 15.00% |
INCOME TAXES (Details 2)
INCOME TAXES (Details 2) - USD ($) | Sep. 30, 2018 | Sep. 30, 2017 |
DEFERRED TAX ASSETS | ||
Net operating losses | $ 7,131,636 | $ 5,611,276 |
Exploration costs | (1,503,472) | (931,289) |
Oil and natural gas leases | 2,192,654 | 691,336 |
Stock based compensation | 411,287 | 138,278 |
Accrued interest and expenses not paid | 271,190 | 246,360 |
Derivative financial instrument | (57,059) | 0 |
Differences in book/tax depreciation | 13,573 | 7,215 |
Net deferred tax asset | 8,459,809 | 5,763,176 |
Valuation allowance | (8,459,809) | (5,763,176) |
NET DEFERRED TAXES | $ 0 | $ 0 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | Nov. 15, 2016 | May 31, 2013 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | Jun. 30, 2016 | Feb. 29, 2016 | Dec. 31, 2015 | Sep. 30, 2013 |
Dr. Ronald Bain, President [Member] | |||||||||
Debt face amount | $ 267,000 | ||||||||
Interest rate | 5.00% | ||||||||
Amount owed to related party | $ 267,000 | ||||||||
Accrued interest payable | $ 42,706 | $ 27,171 | |||||||
Dr. Ronald Bain, President [Member] | Convertible Promissory Notes [Member] | |||||||||
Debt face amount | $ 92,000 | ||||||||
John Seitz, CEO [Member] | Convertible Promissory Notes [Member] | |||||||||
Debt face amount | $ 602,500 | $ 363,000 | $ 2,410,000 | $ 6,500,000 | |||||
Interest rate | 5.00% | 5.00% | 5.00% | 5.00% | |||||
Debt conversion, price per share | $ 0.12 | ||||||||
Debt maturity date | due on demand | ||||||||
Amount owed to related party | $ 8,675,500 | $ 8,675,500 | |||||||
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 | 1,641,086 | 1,201,286 | |||||||
Accounting Consulting Service [Member] | |||||||||
Accounting consulting services, included in related party payables | $ 23,660 | $ 32,625 | |||||||
Related party [Member] | Promissory Notes [Member] | |||||||||
Proceeds from issuance of convertible notes and warrants | $ 50,000 |
NOTES PAYABLE (Details Narrativ
NOTES PAYABLE (Details Narrative) | Jan. 15, 2018$ / sharesshares | Nov. 15, 2016USD ($) | Nov. 30, 2016USD ($)Number$ / sharesshares | Sep. 30, 2018USD ($)Number$ / shares | Sep. 30, 2017USD ($) |
Warrant exercise price | $ / shares | $ 0.15 | ||||
Amortization of debt discount | $ 254,501 | $ 810,540 | |||
Interest expense | $ 780,513 | $ 1,324,127 | |||
Convertible Promissory Notes [Member] | |||||
Number of convertible promissory notes converted | Number | 6 | ||||
Amortization of debt discount | $ 30,000 | ||||
Debt amount converted | 560,000 | ||||
Accrued interest amount converted | 86,525 | ||||
Outstanding debt amount | $ 277,000 | ||||
June - Nov 2016 Promissory Notes [Member] | |||||
Proceeds from issuance of convertible notes | $ 837,000 | ||||
Number of convertible promissory notes issued | Number | 11 | ||||
Maturity term | 1 year | ||||
Interest rate | 8.00% | ||||
Conversion price | $ / shares | $ 0.025 | ||||
Qualified equity financing amount | $ 3,000,000 | ||||
Amount allocated to debt | 385,000 | ||||
Amount allocated to warrants | 452,000 | ||||
Beneficial conversion feature | 385,000 | ||||
Debt discount | 837,000 | ||||
June - Nov 2016 Promissory Notes [Member] | Related Parties [Member] | |||||
Proceeds from issuance of convertible notes | $ 222,000 | ||||
Number of convertible promissory notes issued | Number | 3 | ||||
Extinguishment of related party payables | $ 70,000 | ||||
June - Nov 2016 Promissory Notes [Member] | Warrants [Member] | |||||
Number of warrants issued | shares | 2,790,000 | 27,900,000 | |||
Warrant exercise price | $ / shares | $ 0.10 | $ 0.03 | |||
Warrant term | 3 years | ||||
June - Nov 2016 Promissory Notes [Member] | Warrants [Member] | Related Parties [Member] | |||||
Number of warrants issued | shares | 7,400,000 | ||||
Promissory Notes [Member] | Related party [Member] | |||||
Proceeds from issuance of convertible notes | $ 50,000 |
NOTES PAYABLE (Details Narrat_2
NOTES PAYABLE (Details Narrative 1) - USD ($) | Jan. 15, 2018 | Dec. 15, 2017 | Oct. 16, 2017 | Mar. 14, 2017 | Dec. 28, 2016 | Sep. 30, 2018 | Jun. 30, 2017 | Aug. 31, 2017 | Nov. 30, 2016 | Sep. 30, 2018 | Sep. 30, 2017 | Jun. 30, 2018 | Apr. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2016 |
Warrant exercise price | $ 0.15 | $ 0.15 | |||||||||||||
Loss on Debt Extinguishment | $ (526,459) | $ (89,701) | |||||||||||||
Stock Price | $ .061 | ||||||||||||||
Amortization of debt discount | 254,501 | 810,540 | |||||||||||||
Interest expense | 780,513 | 1,324,127 | |||||||||||||
Stock issued | 4,000,000 | ||||||||||||||
Fair value of warrants | $ 136,827 | ||||||||||||||
March 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 | $ 69,000 | ||||||||||||||
Amount allocated to warrants | $ 14,000 | ||||||||||||||
Percentage of original warrants issued | 10.00% | ||||||||||||||
Beneficial conversion feature | $ 69,000 | ||||||||||||||
Debt discount | 111,000 | ||||||||||||||
Amortization of debt discount | $ 106,000 | ||||||||||||||
Face value | 111,000 | ||||||||||||||
Additional funding available | 350,000 | ||||||||||||||
Amount allocated to restricted stock | $ 17,000 | ||||||||||||||
Number of shares converted into stock | 1,500,000 | ||||||||||||||
Amount of balance | $ 81,111 | ||||||||||||||
March 2017 Promissory Notes [Member] | Private Placement [Member] | Restricted Stock [Member] | |||||||||||||||
Stock issued | 1,000,000 | ||||||||||||||
March 2017 Promissory Notes [Member] | Private Placement [Member] | Warrants [Member] | |||||||||||||||
Number of warrants issued | 1,100,000 | ||||||||||||||
Warrant exercise price | $ 0.10 | ||||||||||||||
Warrant term | 5 years | ||||||||||||||
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 | $ 34,000 | ||||||||||||||
Amount allocated to warrants | $ 8,000 | ||||||||||||||
Percentage of original warrants issued | 10.00% | ||||||||||||||
Beneficial conversion feature | $ 33,571 | ||||||||||||||
Debt discount | 55,555 | ||||||||||||||
Amortization of debt discount | 55,555 | ||||||||||||||
Interest expense | $ 3,333 | ||||||||||||||
Face value | 56,000 | ||||||||||||||
Additional funding available | 450,000 | ||||||||||||||
Amount allocated to restricted stock | $ 8,000 | ||||||||||||||
Number of shares converted into stock | 5,500,000 | ||||||||||||||
Dec 2016 Promissory Notes [Member] | Private Placement [Member] | Restricted Stock [Member] | |||||||||||||||
Stock issued | 500,000 | ||||||||||||||
Dec 2016 Promissory Notes [Member] | Private Placement [Member] | Warrants [Member] | |||||||||||||||
Number of warrants issued | 550,000 | ||||||||||||||
Warrant exercise price | $ 0.10 | ||||||||||||||
Warrant term | 5 years | ||||||||||||||
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 | 385,000 | ||||||||||||||
Amount allocated to warrants | 452,000 | ||||||||||||||
Beneficial conversion feature | 385,000 | ||||||||||||||
Debt discount | 837,000 | ||||||||||||||
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] | Warrants [Member] | |||||||||||||||
Number of warrants issued | 2,790,000 | 27,900,000 | |||||||||||||
Warrant exercise price | $ 0.10 | $ 0.03 | |||||||||||||
Warrant term | 3 years | ||||||||||||||
Percentage of original warrants issued | 10.00% | ||||||||||||||
Fair value of warrants | $ 217,000 | ||||||||||||||
Warrants outstanding | 27,600,000 | 27,600,000 | |||||||||||||
June - Nov 2016 Promissory Notes [Member] | Warrants [Member] | Related Parties [Member] | |||||||||||||||
Number of warrants issued | 7,400,000 | ||||||||||||||
June - Nov 2016 Promissory Notes [Member] | June 2017 Warrants [Member] | |||||||||||||||
Number of warrants issued | 3,225,000 | ||||||||||||||
Warrant exercise price | $ 0.03 | ||||||||||||||
Loss on Debt Extinguishment | $ (50,701) | ||||||||||||||
Percentage of original warrants issued | 25.00% | ||||||||||||||
Dec 2016 Promissory Notes [Member] | January 2018 Warrants [Member] | |||||||||||||||
Number of warrants issued | 3,750,000 | ||||||||||||||
Loss on Debt Extinguishment | $ 39,000 | ||||||||||||||
Percentage of original warrants issued | 25.00% | ||||||||||||||
Fair value of warrants | $ 51,000 | ||||||||||||||
Dec 2016 Promissory Notes [Member] | Private Placement [Member] | |||||||||||||||
Warrant exercise price | $ 0.10 | ||||||||||||||
October 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 | $ 59,000 | ||||||||||||||
Amount allocated to warrants | $ 20,000 | ||||||||||||||
Percentage of original warrants issued | 10.00% | ||||||||||||||
Beneficial conversion feature | $ 59,000 | ||||||||||||||
Debt discount | 110,000 | ||||||||||||||
Face value | 110,000 | ||||||||||||||
Additional funding available | 250,000 | ||||||||||||||
Amount allocated to restricted stock | $ 21,000 | ||||||||||||||
Accrued interest paid | $ 5,800,000 | ||||||||||||||
October 2017 Promissory Notes [Member] | Private Placement [Member] | Restricted Stock [Member] | |||||||||||||||
Stock issued | 1,000,000 | ||||||||||||||
October 2017 Promissory Notes [Member] | Private Placement [Member] | Warrants [Member] | |||||||||||||||
Number of warrants issued | 1,100,000 | ||||||||||||||
Warrant exercise price | $ 0.10 | ||||||||||||||
Warrant term | 5 years | ||||||||||||||
December 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 | $ 44,981 | ||||||||||||||
Amount allocated to warrants | $ 27,000 | ||||||||||||||
Percentage of original warrants issued | 10.00% | ||||||||||||||
Beneficial conversion feature | $ 45,000 | ||||||||||||||
Debt discount | 110,000 | ||||||||||||||
Face value | 110,000 | ||||||||||||||
Additional funding available | 150,000 | ||||||||||||||
Amount allocated to restricted stock | $ 28,000 | ||||||||||||||
Accrued interest paid | $ 5,800,000 | ||||||||||||||
December 2017 Promissory Notes [Member] | Private Placement [Member] | Restricted Stock [Member] | |||||||||||||||
Stock issued | 1,000,000 | ||||||||||||||
December 2017 Promissory Notes [Member] | Private Placement [Member] | Warrants [Member] | |||||||||||||||
Number of warrants issued | 1,100,000 | ||||||||||||||
Warrant exercise price | $ 0.10 | ||||||||||||||
Warrant term | 5 years |
Fair Value Measurement (Details
Fair Value Measurement (Details) | Sep. 30, 2018USD ($) |
Derivative Financial Instrument | $ (271,710) |
Total as of Total as of September 30, 2018 | (271,710) |
Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | |
Derivative Financial Instrument | (271,710) |
Total as of Total as of September 30, 2018 | $ (271,710) |
COMMON STOCK_PAID IN CAPITAL (D
COMMON STOCK/PAID IN CAPITAL (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2018 | Aug. 31, 2018 | Dec. 31, 2017 | Oct. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Nov. 30, 2016 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | May 31, 2018 | |
Stock issued | 4,000,000 | ||||||||||
Number of warrants issued | 2,000,000 | ||||||||||
Term | 7 years | 4 years | |||||||||
Warrant exercise price | $ 0.15 | $ 0.15 | |||||||||
Common stock, authorized | 1,500,000,000 | 1,500,000,000 | 975,000,000 | 975,000,000 | |||||||
Preferred stock, authorized | 50,000,000 | 50,000,000 | 50,000,000 | ||||||||
Proceeds from issuance of common shares and warrants | $ 970,000 | ||||||||||
Peoceeds from share issue | $ 231,000 | ||||||||||
Proceeds from warrants issue | $ 80,000 | ||||||||||
March 2017 Promissory Notes [Member] | Private Placement [Member] | |||||||||||
Number of warrants issued | 1,100,000 | ||||||||||
Term | 5 years | ||||||||||
Warrant exercise price | $ 0.10 | ||||||||||
Common stock issued for cash, shares | 1,000,000 | ||||||||||
Dec 2016 Promissory Notes [Member] | Private Placement [Member] | |||||||||||
Number of warrants issued | 550,000 | ||||||||||
Term | 5 years | ||||||||||
Warrant exercise price | $ 0.10 | ||||||||||
Common stock issued for cash, shares | 500,000 | ||||||||||
Dec 2017 Promissory Notes [Member] | Private Placement [Member] | |||||||||||
Number of warrants issued | 1,100,000 | ||||||||||
Term | 5 years | ||||||||||
Warrant exercise price | $ 0.10 | ||||||||||
Common stock issued for cash, shares | 1,000,000 | ||||||||||
Oct 2017 Promissory Notes [Member] | Private Placement [Member] | |||||||||||
Number of warrants issued | 1,100,000 | ||||||||||
Term | 5 years | ||||||||||
Warrant exercise price | $ 0.10 | ||||||||||
Common stock issued for cash, shares | 1,000,000 | ||||||||||
June 2016 Warrants [Member] | |||||||||||
Warrant exercise price | $ 0.03 | $ 0.03 | |||||||||
Fair value of warrants | $ 431,527 | $ 431,527 | |||||||||
Warrants [Member] | |||||||||||
Number of warrants issued | 1,700,000 | 26,200,000 | |||||||||
Term | 3 years | 3 years | |||||||||
Warrant exercise price | $ 0.03 | ||||||||||
Fair value of warrants | $ 20,895 |
COMMON STOCK_PAID IN CAPITAL _2
COMMON STOCK/PAID IN CAPITAL (Details) | Sep. 30, 2018Numbershares | |
June 2016 Warrants [Member] | ||
Warrants issued | 12,900,000 | |
June 2016 Warrants [Member] | Share Price [Member] | ||
Measurement Input | .054 | [1] |
June 2016 Warrants [Member] | Exercise Price [Member] | ||
Measurement Input | .03 | |
June 2016 Warrants [Member] | Risk Free Interest Rate [Member] | ||
Measurement Input | .0087 | |
June 2016 Warrants [Member] | Expected Term [Member] | ||
Measurement Input | 3 | |
June 2016 Warrants [Member] | Volatility [Member] | ||
Measurement Input | 1.35 | |
July 2016 Warrants [Member] | ||
Warrants issued | 10,000,000 | |
July 2016 Warrants [Member] | Share Price [Member] | ||
Measurement Input | .040 | [1] |
July 2016 Warrants [Member] | Exercise Price [Member] | ||
Measurement Input | .03 | |
July 2016 Warrants [Member] | Risk Free Interest Rate [Member] | ||
Measurement Input | .0080 | |
July 2016 Warrants [Member] | Expected Term [Member] | ||
Measurement Input | Number | 3 | |
July 2016 Warrants [Member] | Volatility [Member] | ||
Measurement Input | 1.38 | |
August 2016 Warrants [Member] | ||
Warrants issued | 3,300,000 | |
August 2016 Warrants [Member] | Share Price [Member] | ||
Measurement Input | 0.032 | [1] |
August 2016 Warrants [Member] | Exercise Price [Member] | ||
Measurement Input | 0.03 | |
August 2016 Warrants [Member] | Risk Free Interest Rate [Member] | ||
Measurement Input | 0.008 | |
August 2016 Warrants [Member] | Expected Term [Member] | ||
Measurement Input | 3 | |
August 2016 Warrants [Member] | Volatility [Member] | ||
Measurement Input | 1.37 | |
November 2016 Warrants [Member] | ||
Warrants issued | 1,700,000 | |
November 2016 Warrants [Member] | Share Price [Member] | ||
Measurement Input | .029 | [1] |
November 2016 Warrants [Member] | Exercise Price [Member] | ||
Measurement Input | .03 | |
November 2016 Warrants [Member] | Risk Free Interest Rate [Member] | ||
Measurement Input | .0128 | |
November 2016 Warrants [Member] | Expected Term [Member] | ||
Measurement Input | 3 | |
November 2016 Warrants [Member] | Volatility [Member] | ||
Measurement Input | 1.31 | |
June 2017 Warrants [Member] | ||
Warrants issued | 3,200,000 | |
June 2017 Warrants [Member] | Share Price [Member] | ||
Measurement Input | .025 | [1] |
June 2017 Warrants [Member] | Exercise Price [Member] | ||
Measurement Input | .03 | |
June 2017 Warrants [Member] | Risk Free Interest Rate [Member] | ||
Measurement Input | .0135 | |
June 2017 Warrants [Member] | Expected Term [Member] | ||
Measurement Input | 2 | |
June 2017 Warrants [Member] | Volatility [Member] | ||
Measurement Input | 1.35 | |
July 2017 Warrants [Member] | ||
Warrants issued | 2,500,000 | |
July 2017 Warrants [Member] | Share Price [Member] | ||
Measurement Input | .019 | [1] |
July 2017 Warrants [Member] | Exercise Price [Member] | ||
Measurement Input | .03 | |
July 2017 Warrants [Member] | Risk Free Interest Rate [Member] | ||
Measurement Input | .0135 | |
July 2017 Warrants [Member] | Expected Term [Member] | ||
Measurement Input | 2 | |
July 2017 Warrants [Member] | Volatility [Member] | ||
Measurement Input | 1.36 | |
August 2017 Warrants [Member] | ||
Warrants issued | 1,250,000 | |
August 2017 Warrants [Member] | Share Price [Member] | ||
Measurement Input | .016 | [1] |
August 2017 Warrants [Member] | Exercise Price [Member] | ||
Measurement Input | .03 | |
August 2017 Warrants [Member] | Risk Free Interest Rate [Member] | ||
Measurement Input | .0133 | |
August 2017 Warrants [Member] | Expected Term [Member] | ||
Measurement Input | 2 | |
August 2017 Warrants [Member] | Volatility [Member] | ||
Measurement Input | 1.35 | |
January 2018 Warrants [Member] | ||
Warrants issued | 2,800,000 | |
January 2018 Warrants [Member] | Share Price [Member] | ||
Measurement Input | .11 | [1] |
January 2018 Warrants [Member] | Exercise Price [Member] | ||
Measurement Input | .10 | |
January 2018 Warrants [Member] | Risk Free Interest Rate [Member] | ||
Measurement Input | .0189 | |
January 2018 Warrants [Member] | Expected Term [Member] | ||
Measurement Input | 1.5 | |
January 2018 Warrants [Member] | Volatility [Member] | ||
Measurement Input | 1.63 | |
[1] | Fair market value on the date of agreement. |
COMMON STOCK_PAID IN CAPITAL _3
COMMON STOCK/PAID IN CAPITAL (Details 1) | 12 Months Ended |
Sep. 30, 2018USD ($)$ / sharesshares | |
Bridge Financing Note Warrants [Member] | June 2016 Warrants [Member] | |
Number of warrants - outstanding | $ | $ 12,566,667 |
Weighted Average Remaining Contractual Life (Yrs) | 8 months 9 days |
Weighted Average Exercise Price - outstanding | $ 0.03 |
Number of warrants - exercisable | shares | 12,566,667 |
Weighted Average Exercise Price- exercisable | $ 0.03 |
Bridge Financing Note Warrants [Member] | July 2016 Warrants [Member] | |
Number of warrants - outstanding | $ | $ 10,000,000 |
Weighted Average Remaining Contractual Life (Yrs) | 9 months 14 days |
Weighted Average Exercise Price - outstanding | $ 0.03 |
Number of warrants - exercisable | shares | 10,000,000 |
Weighted Average Exercise Price- exercisable | $ 0.03 |
Bridge Financing Note Warrants [Member] | August 2016 Warrants [Member] | |
Number of warrants - outstanding | $ | $ 3,333,333 |
Weighted Average Remaining Contractual Life (Yrs) | 10 months 17 days |
Weighted Average Exercise Price - outstanding | $ 0.03 |
Number of warrants - exercisable | shares | 3,333,333 |
Weighted Average Exercise Price- exercisable | $ 0.03 |
Bridge Financing Note Warrants [Member] | November 2016 Warrants [Member] | |
Number of warrants - outstanding | $ | $ 1,666,667 |
Weighted Average Remaining Contractual Life (Yrs) | 1 year 1 month 16 days |
Weighted Average Exercise Price - outstanding | $ 0.03 |
Number of warrants - exercisable | shares | 1,666,667 |
Weighted Average Exercise Price- exercisable | $ 0.03 |
Bridge Financing Note Warrants [Member] | June 2017 Warrants [Member] | |
Number of warrants - outstanding | $ | $ 3,141,667 |
Weighted Average Remaining Contractual Life (Yrs) | 8 months 9 days |
Weighted Average Exercise Price - outstanding | $ 0.03 |
Number of warrants - exercisable | shares | 3,141,667 |
Weighted Average Exercise Price- exercisable | $ 0.03 |
Bridge Financing Note Warrants [Member] | July 2017 Warrants [Member] | |
Number of warrants - outstanding | $ | $ 2,500,000 |
Weighted Average Remaining Contractual Life (Yrs) | 9 months 14 days |
Weighted Average Exercise Price - outstanding | $ 0.03 |
Number of warrants - exercisable | shares | 2,500,000 |
Weighted Average Exercise Price- exercisable | $ 0.03 |
Bridge Financing Note Warrants [Member] | August 2017 Warrants [Member] | |
Number of warrants - outstanding | $ | $ 833,333 |
Weighted Average Remaining Contractual Life (Yrs) | 10 months 17 days |
Weighted Average Exercise Price - outstanding | $ 0.03 |
Number of warrants - exercisable | shares | 833,333 |
Weighted Average Exercise Price- exercisable | $ 0.03 |
Bridge Financing Note Warrants [Member] | August 2017 Warrants [Member] | |
Number of warrants - outstanding | $ | $ 416,667 |
Weighted Average Remaining Contractual Life (Yrs) | 1 year 1 month 16 days |
Weighted Average Exercise Price - outstanding | $ 0.03 |
Number of warrants - exercisable | shares | 416,667 |
Weighted Average Exercise Price- exercisable | $ 0.03 |
Bridge Financing Note Warrants [Member] | January 2018 Warrants [Member] | |
Number of warrants - outstanding | $ | $ 2,790,000 |
Weighted Average Remaining Contractual Life (Yrs) | 9 months 11 days |
Weighted Average Exercise Price - outstanding | $ 0.10 |
Number of warrants - exercisable | shares | 2,790,000 |
Weighted Average Exercise Price- exercisable | $ 0.10 |
Financing Note Warrants #3 [Member] | |
Number of warrants - outstanding | $ | $ 1,100,000 |
Weighted Average Remaining Contractual Life (Yrs) | 4 years 14 days |
Weighted Average Exercise Price - outstanding | $ 0.10 |
Number of warrants - exercisable | shares | 1,100,000 |
Weighted Average Exercise Price- exercisable | $ 0.10 |
Financing Note Warrants #4 [Member] | |
Number of warrants - outstanding | $ | $ 1,100,000 |
Weighted Average Remaining Contractual Life (Yrs) | 4 years 2 months 16 days |
Weighted Average Exercise Price - outstanding | $ 0.10 |
Number of warrants - exercisable | shares | 1,100,000 |
Weighted Average Exercise Price- exercisable | $ 0.10 |
Financing Note Warrants #1 [Member] | |
Number of warrants - outstanding | $ | $ 550,000 |
Weighted Average Remaining Contractual Life (Yrs) | 3 years 3 months |
Weighted Average Exercise Price - outstanding | $ 0.10 |
Number of warrants - exercisable | shares | 550,000 |
Weighted Average Exercise Price- exercisable | $ 0.10 |
Financing Note Warrants #2 [Member] | |
Number of warrants - outstanding | $ | $ 1,100,000 |
Weighted Average Remaining Contractual Life (Yrs) | 3 years 5 months 16 days |
Weighted Average Exercise Price - outstanding | $ 0.10 |
Number of warrants - exercisable | shares | 1,100,000 |
Weighted Average Exercise Price- exercisable | $ 0.10 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details Narrative) - USD ($) | Jun. 01, 2018 | Jan. 01, 2017 | Jun. 01, 2018 | May 01, 2018 | Sep. 30, 2018 | Sep. 30, 2017 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock-based compensation expense | $ 1,857,531 | $ 653,669 | ||||
Stock-based compensation capitalized to unproved properties | 820,877 | $ 195,125 | ||||
Unrecognized compensation expense related to stock options | $ 2,700,000 | |||||
Number of stock options granted | 68,000,000 | |||||
Expected life of options | 3 years | |||||
Share-based Compensation Award, Tranche January 1, 2017 [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock option of vested | 50.00% | |||||
Share-based Compensation Award, Tranche January 1, 2018 [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock option of vested | 50.00% | |||||
Share-based Compensation Award, Tranche June 1, 2018 [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock option of vested | 33.00% | |||||
Share-based Compensation Award, Tranche June 1, 2019 [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock option of vested | 33.00% | |||||
Share-based Compensation Award, Tranche June 1, 2020 [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock option of vested | 33.00% | |||||
Employee Stock Option [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of stock options granted | 33,500,000 | 33,500,000 | 500,000 |
STOCK-BASED COMPENSATION (Det_2
STOCK-BASED COMPENSATION (Details) | 12 Months Ended |
Sep. 30, 2018USD ($)$ / sharesshares | |
Number of Options | |
Outstanding at beginning of period | shares | 35,500,000 |
Granted | shares | 68,000,000 |
Outstanding at end of period | shares | 103,500,000 |
Vested and expected to vest | shares | 103,500,000 |
Exercisable at end of period | shares | 54,500,000 |
Weighted Average Exercise Price | |
Outstanding at beginning of period | $ / shares | $ 0.033 |
Granted | $ / shares | 0.075 |
Outstanding at end of period | $ / shares | 0.0605 |
Vested and expected to vest | $ / shares | 0.0605 |
Exercisable at end of period | $ / shares | $ 0.0475 |
Weighted Average Remaining Contractual Term | |
Outstanding at end of period | 3 years 3 months 25 days |
Vested and expected to vest | 3 years 3 months 25 days |
Average Intrinsic Value | |
Outstanding at end of period | $ | $ 1,200,000 |
Vested and expected to vest | $ | 1,200,000 |
Exercisable at end of period | $ | $ 1,300,000 |
STOCK-BASED COMPENSATION (Det_3
STOCK-BASED COMPENSATION (Details 1) - $ / shares | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Stock-based Compensation Details 1 | ||
Expected dividend yield | 0.00% | 0.00% |
Expected stock price volatility | 145.20% | 127.20% |
Risk-free interest rate | 2.70% | 1.71% |
Expected life of options | 7 years | 4 years |
Weighted-average grant date fair value | $ 0.065 | $ 0.022 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) | 1 Months Ended | 12 Months Ended | |
Aug. 31, 2018USD ($) | Jul. 31, 2018USD ($)ft² | Sep. 30, 2018USD ($) | |
Lease term | 39 months | ||
Office space | ft² | 5,000 | ||
Annual base rent for the first 18 months | $ 94 | ||
Annual base rent - Year two | $ 97 | ||
Annual base rent - Year two | 99 | ||
Common stock issued to vendor for settlement of debt | 1,896,999 | ||
Fair value liability | $ 271,710 | ||
Vendor [Member] | |||
Principal amount | $ 1,000,000 | ||
Repayment of debt | 150,000 | ||
Future cash payments | 7,500 | ||
Common stock issued to vendor for settlement of debt | 10,000,000 | ||
Vendor [Member] | Minimum [Member] | |||
Gain on sale of stock by vendor in excess of | $ 1,300,000 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - Subsequent Event [Member] - USD ($) | 1 Months Ended | |
Nov. 30, 2018 | Oct. 31, 2018 | |
Insurance policy purchased | $ 159,995 | |
Insurance policy premium | 146,310 | |
Lease bonus payments first year rentals | $ 187,809 | $ 139,809 |
Percent lease bonus payment | 80.00% | 80.00% |