| Summary of Significant Accounting Policies | 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A summary of the significant accounting
polices consistently applied in the preparation of the accompanying consolidated financial statements in accordance with accounting
principles generally accepted in the United States of America (“GAAP”) is as follows. Basis of Consolidation The consolidated financial statements include
the accounts of its subsidiaries. All significant intercompany accounts and transactions have been eliminated on consolidation. Cash and Cash Equivalents The Company considers all highly liquid
investments with an initial maturity of three months or less, when purchased, to be cash equivalents. The Company maintains cash
balances at several financial institutions located throughout the United States, which at times may exceed insured limits. The
Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash and
cash equivalents. Receivables Receivables include trade accounts receivable
and are carried at the invoiced amount less an estimate made for doubtful accounts based on management’s review of outstanding
balances. The collectability of the Company’s accounts receivable is reviewed on an ongoing basis, using historical payment
trends and a review of specific accounts. Accounts receivable are written off after all reasonable collection efforts have been
exhausted and when management determines the amounts to be uncollectible. Recoveries of receivables previously written off are
recorded when received. The allowance for doubtful accounts was $0 as of December 31, 2018 and $21,876 as of September 30, 2018. In the normal course of business, the Company
may extend credit to its customers, on an unsecured basis, substantially all of whom are located in the United States of America.
The Company does not believe that it is exposed to any significant risk of loss on accounts receivable. Prepaid Expenses Prepaid expenses consist of expenses the
Company has paid for prior to the service or good being provided. These prepaid expenses will be recorded as expense at the time
the service has been provided. Property and Equipment Property and equipment are stated at cost,
less accumulated depreciation. Depreciation is provided in amounts sufficient to relate the cost of depreciable assets to earnings
over their estimated service lives by the straight-line method. Maintenance and repairs are charged to
earnings as incurred; major repairs and replacements are capitalized. When items of property or equipment are sold or retired,
the related cost and accumulated depreciation are removed from the accounts and any gain or loss is included in operations. Property and equipment operated under material
leases which transfer substantially all benefits and risks associated with the assets to the Company are capitalized. An asset
and liability equal to the present or fair value, if appropriate, of minimum payments over the term of the leases are recorded.
Amortization of the asset is computed using the straight-line method. Expenses associated with all other leases (operating leases)
are charged to income as incurred. Customer Relationships The customer relationships acquired as
part of the TMN purchase have been recognized in the accompanying consolidated balance sheets at $44,900, the value attributed
to such relationships on the date of the purchase. The customer relationships are being amortized on a straight-line basis over
a four-year estimated life. During each of the quarters ended December 31, 2018 and 2017, the Company recorded amortization expense
of $2,806, respectively, on this intangible asset, which is included in depreciation and amortization expense in the accompanying
consolidated statements of operations. Accumulated amortization at December 31, 2018 was $36,481 and $33,675 at September 30, 2018. Proprietary Content The proprietary content acquired as a part
of the TMN purchase has been recognized in the accompanying consolidated balance sheets at $525,100, the value attributed to such
content on the date of the purchase. The proprietary content is being amortized on a straight-line basis over an eight-year estimated
life. During each of the quarters ended December 31, 2018 and 2017, the Company recorded amortization expense of $16,410 on this
intangible asset, which is included in depreciation and amortization expense in the accompanying consolidated statements of operations.
Accumulated amortization at December 31, 2018 was $213,321 and $196,912 at September 30, 2018. Trade Name The trade name acquired as a part of the
TMN purchase has been recognized in the accompanying consolidated balance sheets at $69,300, the value attributed to such name
on the date of the purchase. Management has determined that the trade name has an indefinite life and does not consider the value
of the trade name recorded in the accompanying consolidated balance sheets to be impaired as of December 31, 2018 and September
30, 2018. Non-compete Agreements Non-compete agreements entered into as
a part of the TMN purchase have been recognized in the accompanying consolidated balance sheets at $26,300, the value attributed
to such agreements on the date of the purchase. The non-compete agreements are being amortized on a straight-line basis over the
five-year term of the non-compete clause of the agreement. During each of the quarters ended December 31, 2018 and 2017, the Company
recorded amortization expense of $1,315 on this intangible asset, which is included in depreciation and amortization expense in
the accompanying consolidated statements of operations. Accumulated amortization at December 31, 2018 was $17,095 and $15,780 at
September 30, 2017. Intellectual Property Financial Gravity maintains copyrights
or trademarks on all of its printed marketing materials, the financialgravity.com website and other web pages, and proprietary
software. Financial Gravity’s goal is to preserve its trade secrets and operate without infringing on the proprietary rights
of other parties. The Company accounts for Intellectual
Property in accordance with GAAP and accordingly, Intellectual Property are stated at cost. Intellectual Property with indefinite
lives is not amortized but are tested for impairment at least annually. Management has determined that the Intellectual Property
have an indefinite life and do not consider the value of Intellectual Property recorded in the accompanying consolidated balance
sheet to be impaired as of December 31, 2018 and September 30, 2018. Goodwill Goodwill represents the excess of the value
of the purchase price and related costs over the identifiable assets from business acquisitions. The Company conducts an annual
impairment assessment, at the reporting unit level, of its recorded goodwill. The Company assesses qualitative factors in order
to determine whether it is more likely than not that the fair value of a reporting unit is less than it’s carrying amount.
The qualitative factors evaluated by the Company include: macro-economic conditions of the local business environment, overall
financial performance, and other entity specific factors as deemed appropriate. If, through this qualitative assessment, the conclusion
is made that it is more likely than not that a reporting unit’s fair value is less than it’s carrying amount, a two-step
impairment test is performed. Management determined, by assessing the qualitative factors, that it is more likely than not that
the fair value of the reporting unit is greater than it’s carrying value. Management does not consider the value of goodwill
recorded for TMN in the accompanying consolidated balance sheets to be impaired as of December 31, 2018 and September 30, 2018. The fair values of the assets acquired,
and liabilities assumed were determined primarily using the income approach, which determines the fair value for the asset based
on the present value of cash flows projected to be generated by the asset. Projected cash flows are discounted at a rate of return
that reflects the relative risk of achieving the cash flow and the time value of money. The fair value of relationships was determined
by projecting expected cash flows and subtracting the portion of the cash flow derived by the relevant contributory assets. The accompanying consolidated balance sheets,
consolidated statements of operations and cash flows include the results of operations of the acquired subsidiaries from the date
of acquisition. Income Taxes The Company accounts for Federal and state
income taxes pursuant to GAAP, which requires an asset and liability approach for financial accounting and reporting for income
taxes based on tax effects of differences between the financial statement and tax basis of assets and liabilities. The Company accounts for all uncertain
tax positions in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”)
740 – Income Taxes (“ASC 740”). ASC 740 provides guidance on de-recognition, classification, interest and penalties
and disclosure related to uncertain income tax positions. The Company recognizes accrued interest and penalties related to unrecognized
tax benefits as a component of income tax expense. There was no accrued interest or penalties as of December 31, 2018 and September
30, 2018. From time to time, the Company is audited
by taxing authorities. These audits could result in proposed assessments of additional taxes. The Company believes that its tax
positions comply in all material respects with applicable tax law. However, tax law is subject to interpretation, and interpretations
by taxing authorities could be different from those of the Company, which could result in the imposition of additional taxes. The
Company’s Federal returns since 2015 are still subject for examination by taxing authorities. Loss Per Share Basic loss per common share is computed
by dividing net losses available to common stockholders by the weighted average number of common shares outstanding for the reporting
period. Average number of common shares were 35,837,900 and 35,812,952 for the quarters ended December 31, 2018 and 2017, respectively. For the quarter ended December 31, 2018,
approximately 3,840,121 common stock shares were not added to the diluted average shares because inclusion of such shares would
be antidilutive. The antidilutive shares for December 31, 2018 include 350,000 warrants and 3,490,121 in options. For the quarter
ended December 31, 2017, approximately 3,430,646 common stock shares were not added to the diluted average shares because inclusion
of such shares would be antidilutive. The antidilutive shares for December 31, 2017 include 350,000 warrants and 3,080,646 in
options. Revenue Recognition FG Wealth generates investment management
fees for services provided by the Company. Investment management fees include fees earned from assets under management by providing
professional services to manage client investments. FG Tax generates service income from consulting
and other professional services performed. Commission revenue is derived from the
sale of annuities and premiums on life insurance policies held by third parties. The revenue is recognized at the time the policy
is issued. Revenue represents gross billings less
discounts, and is calculated net of sales taxes, as applicable. Amounts invoiced for work not yet completed are shown as deferred
revenue in the accompanying consolidated balance sheets. Tax Master Network has 3 types of services
that are charged and collected on a month to month subscription basis (Tax Master basic, elite, and advanced membership, All-Stars
coaching, Networker and Wire Service weekly broadcast email). None of these programs come with a long-term commitment or contract,
and there is no up-front payment beyond the monthly subscription fee. Cancellations are processed within the month requested and
memberships are closed at the end of the period for which the most recent payment was made. Members are not entitled to refunds
for unused memberships. Recent Accounting Pronouncement In May 2014, the FASB issued
Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which supersedes
nearly all existing revenue recognition guidance under U.S. GAAP. The guidance requires entities to recognize revenue using
the following five-step model: identify the contract with a customer, identify the performance obligations in the contract,
determine the transaction price, allocate the transaction price to the performance obligations in the contract, and recognize
revenue as the entity satisfies each performance obligation. Adoption of this standard could result in retrospective
application, either in the form of recasting all prior periods presented or a cumulative adjustment to equity in the period
of adoption. The guidance was effective for annual and interim reporting periods beginning after December 15, 2017. On October 1, 2018 we adopted ASU
2014-09 using the full retrospective method. The Company completed its review of its material revenue streams and determined
that there will be no impact to its consolidated financial statements, results of operations or liquidity. When comparing the
Company’s current revenue recognition to the new applied revenue recognition under Accounting Standards Codification
(“ASC”) 606, there was no change to the amount or timing of revenue recognized. Therefore, no quantitative
adjustment was required to be made to the prior periods presented on the unaudited condensed consolidated financial
statements after the adoption of ASC 606. Advertising Advertising costs are charged to operations
when incurred. Advertising and marketing expense were $31,644 and $60,937 for the quarters ended December 31, 2018 and 2017, respectively. Stock-Based Compensation The Company recognizes
the fair value of stock-based compensation awards as wages in the accompanying statements of operations on a straight-line basis
over the vesting period, using the Black-Scholes option pricing model, which is based on risk-free of 2.89% rates in 2019 and 1.49%
to 2.55% in 2018, dividend yield of 0%, expected life of 2 years and volatility of 35% to 40%. Use of Estimates The preparation of the consolidated financial
statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported assets and liabilities
and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of
revenues and expenses during the reporting period. Actual results could differ from these estimates. Adjustments All adjustments that, in the opinion of
management, are necessary for a fair presentation for the periods presented have been reflected in the financial statements. Going Concern The accompanying consolidated financial
statements have been prepared assuming that the Company will continue as a going concern, which contemplates the Company will need
to manage additional asset units under contract and/or additional financing to fully implement its business plan, including continued
growth and establishment of a stronger brand. On May 23, 2017, the Company and GHS Investments,
LLC (“GHS Investments”) entered into an Equity Financing Agreement (the “Agreement”). The Agreement was
filed as an exhibit to a registration statement on Form S-1, filed with the Securities and Exchange Commission on September 18,
2017. The Agreement contemplates a series of transactions, pursuant to which the Company will “put” shares of its common
stock to GHS in consideration of the payment to the Company of eighty percent (80%) of the “Market Price” of such shares.
“Market Price” shall mean the average of the two lowest trading prices of the Company’s Common Stock during the
ten (10) consecutive trading days preceding the receipt of the applicable put notice. Accordingly, on each instance the Company
exercises a put option, the Company will know in advance, both the number of shares issuable upon exercise of the put option, and
the dollar amount of the purchase price for such shares. The maximum purchase price for shares to be purchased by GHS Investments
under the Agreement is $11,000,000. To facilitate the sale of the shares so purchased by GHS Investments, the Company agreed to
file a registration statement with the Securities and Exchange Commission. The Company also entered into a Registration Rights
Agreement with GHS Investments, pursuant to which the Company has agreed to provide certain registration rights under the Securities
Act of 1933, the rules and regulations promulgated thereunder, and applicable state securities laws. The Agreement will terminate
(i) when GHS Investments has purchased an aggregate of $11,000,000 of the common stock of the Company, or (ii) 36 months after
the effective date of the Agreement, or (iii) at such time that the registration statement is no longer in effect. Additionally, the Company is also actively
seeking growth of its service offerings, both organically and via new client relationships. Management, in the ordinary course
of business, is trying to raise additional capital through sales of common stock as well as seeking financing via equity or debt,
or both from third parties. There are no assurances that additional financing will be available on favorable terms, or at all.
If additional financing is not available, the Company will need to reduce, defer or cancel development programs, planned initiatives
and overhead expenditures. The failure to adequately fund its capital requirements could have a material adverse effect on the
Company’s business, financial condition and results of operations. Moreover, the sale of additional equity securities to
raise financing will result in additional dilution to the Company’s stockholders and incurring additional indebtedness could
involve an increased debt service cash obligation, the imposition of covenants that restrict the Company’s operations or
the Company’s ability to perform on its current debt service requirements. The consolidated financial statements do not include
any adjustments that might be necessary if the Company is unable to continue as a going concern. Future Accounting Pronouncements In February 2017, the FASB issued ASU Update
No. 2017-02 Leases (Topic 842). Under the new guidance, a lessee will be required to recognize assets and liabilities for leases
with lease terms of more than 12 months. Consistent with current GAAP, the recognition, measurement, and presentation of expenses
and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance or operating lease. However,
unlike current GAAP - which requires only capital leases to be recognized on the balance sheet - the new ASU will require both
types of leases to be recognized on the balance sheet. ASU 2017-02 is effective for the years beginning after December 15, 2018
and for all periods presented. Early application of the amendments in this ASU is permitted. The Company does not expect any significant
financial impact to the financial statements upon adoption of this standard. |
