Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Sep. 30, 2018 | Jul. 10, 2019 | Mar. 31, 2018 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | CREATIVE LEARNING Corp | ||
Entity Central Index Key | 0001394638 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --09-30 | ||
Document Type | 10-K | ||
Document Period End Date | Sep. 30, 2018 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2018 | ||
Entity a Well-known Seasoned Issuer | No | ||
Entity a Voluntary Filer | No | ||
Entity's Reporting Status Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Entity Emerging Growth Company | false | ||
Entity Common Stock, Shares Outstanding | 12,089,140 | ||
Entity Public Float | $ 1,800,000 | ||
Entity Filer Number | 000-52883 | ||
Entity Interactive Data Current | Yes | ||
Entity Incorporation State Country Code | DE |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Sep. 30, 2018 | Sep. 30, 2017 |
Current Assets: | ||
Cash | $ 80,693 | $ 213,950 |
Restricted Cash (marketing fund) | 22,505 | 118,337 |
Accounts receivable, less allowance for doubtful accounts of approximately $938,000 and $262,000, respectively | 194,835 | 356,830 |
Prepaid expense | 29,725 | 73,337 |
Assets held for sale | 43,178 | 52,737 |
Notes receivables - current portion, less allowance for doubtful accounts of approximately $91,000 and $33,000, respectively | 11,955 | 2,730 |
Total Current Assets | 382,891 | 817,921 |
Notes receivables - net of current portion | 3,045 | 59,150 |
Property and equipment, net of accumulated depreciation of approximately $273,000 and $232,000, respectively | 357,930 | 207,537 |
Intangible assets | 23,300 | |
Deposits | 1,425 | 15,053 |
Total Assets | 745,291 | 1,122,781 |
Current Liabilities: | ||
Accounts payable | 161,011 | 148,021 |
Accrued liabilities | 14,605 | 153,677 |
Accrued marketing fund | 97,334 | 131,909 |
Total Current Liabilities | 272,950 | 433,607 |
Commitments and Contingencies (Note 10) | ||
Stockholders' Equity: | ||
Preferred stock, $.0001 par value; 10,000,000 shares authorized; -0- shares issued and outstanding | ||
Common stock, $.0001 par value; 50,000,000 shares authorized; 12,075,875 shares issued and 12,010,775 shares outstanding as of September 30, 2018 and 2017 | 1,207 | 1,207 |
Additional paid-in capital | 2,897,285 | 2,895,285 |
Treasury Stock, 65,100 shares, at cost | (34,626) | (34,626) |
Accumulated Deficit | (2,391,525) | (2,172,692) |
Total Stockholders' Equity | 472,341 | 689,174 |
Total Liabilities and Stockholders' Equity | $ 745,291 | $ 1,122,781 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Sep. 30, 2018 | Sep. 30, 2017 |
Consolidated Balance Sheets | ||
Allowance for doubtful accounts receivable | $ 938,000 | $ 262,000 |
Allowance for doubtful notes receivable | 91,000 | 33,000 |
Accumulated depreciation | $ 273,000 | $ 232,000 |
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, authorized | 10,000,000 | 10,000,000 |
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, authorized | 50,000,000 | 50,000,000 |
Common stock, issued | 12,075,875 | 12,075,875 |
Common stock, outstanding | 12,010,775 | 12,010,775 |
Treasury stock, shares | 65,100 | 65,100 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Revenues | ||
Royalties fees | $ 2,207,442 | $ 2,249,023 |
Initial franchise fees | 191,503 | 206,950 |
Merchandise sales | 17,781 | 60 |
TOTAL REVENUES | 2,416,726 | 2,456,033 |
COST OF GOODS SOLD | 6,662 | |
GROSS PROFIT | 2,410,064 | 2,456,033 |
OPERATING EXPENSES | ||
Salaries and payroll taxes, including $2,000 and $360,738 of stock-based compensation in 2018 and 2017 | 695,884 | 1,077,348 |
Professional fees and legal settlements | 598,237 | 1,316,838 |
Bad debt expense | 732,590 | 177,288 |
Other general and administrative expenses | 391,923 | 312,809 |
Franchise consulting and commissions | 50,699 | 161,776 |
Franchise training and expenses | 46,567 | 15,710 |
Depreciation | 51,607 | 57,175 |
Advertising | 30,323 | 21,027 |
Impairment expense | 23,200 | |
Office expense | 4,114 | 8,514 |
TOTAL OPERATING EXPENSES | 2,625,144 | 3,148,485 |
OPERATING LOSS | (215,080) | (692,452) |
OTHER INCOME (EXPENSE) | (3,753) | 26,103 |
LOSS BEFORE INCOME TAXES | (218,833) | (666,349) |
PROVISION FOR INCOME TAXES | (364,653) | |
NET LOSS | $ (218,833) | $ (1,031,002) |
NET LOSS PER SHARE | ||
Basic and diluted | $ (0.02) | $ (0.09) |
Basic and diluted weighted average number of common shares outstanding (in shares) | 12,010,775 | 12,007,736 |
Consolidated Statements of Op_2
Consolidated Statements of Operations (Parenthetical) - USD ($) | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Income Statement [Abstract] | ||
Stock-based compensation of salaries and payroll taxes | $ 2,000 | $ 360,738 |
Consolidated Statement of Chang
Consolidated Statement of Changes in Stockholders' Equity - USD ($) | Treasury Stock | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total |
Balance at Sep. 30, 2016 | $ (34,626) | $ 1,200 | $ 2,534,554 | $ (1,141,690) | $ 1,359,438 |
Balance (in shares) at Sep. 30, 2016 | (65,100) | 12,001,409 | |||
Compensatory stock issuances | $ 7 | 14,493 | 14,500 | ||
Compensatory stock issuances (in shares) | 74,466 | ||||
Compensatory stock options issuances | 346,238 | (346,238) | |||
Net loss | (1,031,002) | (1,031,002) | |||
Balance at Sep. 30, 2017 | $ (34,626) | $ 1,207 | 2,895,285 | (2,172,692) | 689,174 |
Balance (shares) at Sep. 30, 2017 | (65,100) | 12,075,875 | |||
Stock-based compensation | 2,000 | 2,000 | |||
Net loss | (218,833) | (218,833) | |||
Balance at Sep. 30, 2018 | $ (34,626) | $ 1,207 | $ 2,897,285 | $ (2,391,525) | $ 472,341 |
Balance (shares) at Sep. 30, 2018 | (65,100) | 12,075,875 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Cash flows from operating activities: | ||
Net Loss | $ (218,833) | $ (1,031,002) |
Adjustments to reconcile net loss to net cash provided by/(used in) operating activities: | ||
Depreciation | 51,607 | 57,175 |
Bad debt expense | 732,590 | 177,288 |
Deferred income taxes | 343,444 | |
Stock issued for compensation | 14,500 | |
Stock options issued for compensation | 50,312 | |
Stock options issued for directors fees | 295,926 | |
Stock based compensation | 2,000 | |
Impairment loss on intangible assets | 23,300 | 78,604 |
Changes in operating assets and liabilities: | ||
Restricted cash | 95,832 | 44,110 |
Accounts receivable | (513,107) | (285,604) |
Prepaid expenses | 72,420 | 46,663 |
Deposits | 13,628 | (13,628) |
Accounts payable | (15,818) | (23,807) |
Accrued liabilities | (139,072) | (208,978) |
Accrued marketing fund | (34,575) | (15,318) |
Income tax receivable | 424,938 | |
Customer deposits | (5,000) | |
Net cash provided by (used in) operating activities | 69,972 | (50,377) |
Cash flows from investing activities: | ||
Acquisition of property and equipment | (192,621) | (19,349) |
(Issuance)/Collection of Notes receivable | (10,608) | 6,991 |
Net cash used in investing activities | (203,229) | (12,358) |
Net change in cash | (133,257) | (62,735) |
Cash, beginning of year | 213,950 | 276,685 |
Cash, end of year | 80,693 | 213,950 |
Noncash financing activity: | ||
Financed Insurance | $ 28,808 |
Nature of Organization and Summ
Nature of Organization and Summary of Significant Accounting Policies | 12 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Organization and Summary of Significant Accounting Policies | (1) Nature of Organization and Summary of Significant Accounting Policies Nature of Organization Creative Learning Corporation ("CLC"), formerly B2 Health, Inc., was incorporated March 8, 2006 in the State of Delaware. BFK Franchise Company LLC ("BFK") was formed in the State of Nevada on May 19, 2009. Effective July 2, 2010, CLC was acquired by BFK in a transaction classified as a reverse acquisition. CLC concurrently changed its name from B2 Health, Inc. to Creative Learning Corporation. In addition to the accounts of CLC and BFK, the accompanying consolidated financial statements include the accounts of CLC's subsidiaries, BFK Development Company LLC ("BFKD"), and SF LLC ("Sew Fun Studios"). The organizational documents for BFK Development Company LLC and SF LLC do not specify a termination date. Each of the above listed LLC's has a single member, controlled 100% by CLC. CLC operates wholly-owned subsidiaries BFK and SF under the trade names Bricks 4 KidzĀ® and Sew Fun Studiosā¢ respectively, that offer children's enrichment and education franchises. CLC and its wholly own subsidiaries BFK, BFKD, and SF LLC are hereinafter referred to collectively as the "Company". Basis of Presentation The Company financial statements are presented on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America ("GAAP"). International franchise fees vary and are set relative to the potential of the franchised territories. In addition, the Company awards master agreements outside of the United States and Canada. The royalty structure is the same for both our US and International franchisees. Contracts are structured as such that the Company collects revenue from foreign franchises in US dollars. We do not have international subsidiaries. The Company has multiple franchise concepts, but all concepts are managed centrally as one segment and are reviewed by the Company in total. Accordingly, decision-making regarding the Company's overall operating performance and allocation of Company resources are assessed on a consolidated basis. As such, the Company operates as one reporting segment. Principles of Consolidation The accompanying consolidated financial statements include the accounts of CLC and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Fiscal year The Company operates on a September 30 fiscal year-end. Use of Estimates The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of financial statements and the reported amounts of revenues and expenses during the reporting period. The significant estimates and assumptions made by management include allowance for doubtful accounts, allowance for deferred tax assets, depreciation of property and equipment, recoverability of long lived assets and fair value of equity instruments. Actual results could differ from those estimates as the current economic environment has increased the degree of uncertainty inherent in these estimates and assumptions. Cash, Restricted Cash, and Cash Equivalents The Company considers all highly liquid securities with original maturities of three months or less when acquired, to be cash equivalents. We had no cash equivalents at September 30, 2018 and 2017. The Company had restricted cash of approximately $23,000 and $118,000, respectively at fiscal years ended September 30, 2018 and 2017, associated with marketing funds collected from the franchisees. Per the franchise agreements, a marketing fund of 2% of franchisees' gross cash receipts is collected by the Company and held to be spent on the promotion of the brand (see Note 8). The Company maintains cash balances which at times exceed the federally insured limit of $250,000. The Company believes there is no significant risk with respect to these deposits. Accounts Receivable The Company reviews accounts receivable periodically for collectability and establishes an allowance for doubtful accounts and records bad debt expense when deemed necessary. The Company records an allowance for doubtful accounts that is based on historical trends, customer knowledge, any known disputes, and considers the aging of the accounts receivable balances combined with management's estimate of future potential recoverability. Accounts and receivables are written off against the allowance after all attempts to collect a receivable have failed. The Company believes its allowances for doubtful accounts at September 30, 2018 and 2017 are adequate, but actual write-offs could exceed the recorded allowance. During the years ended September 30, 2018 and 2017 the balance in the allowance for doubtful accounts was approximately $938,000 and $262,000, respectively. Notes Receivable ASC 310, Receivables, provides guidance for receivables and notes that arise from credit sales, loans or other transactions. Financing receivable includes loans and notes receivable. Originated loans we hold for which we have the intent and ability to hold for the foreseeable future or to maturity (or payoff) are classified as held for investment. Financing receivables held for investment are reported in our consolidated balance sheets at the outstanding principal balance adjusted for any write -offs , allowance for loan losses, deferred fees or costs, and any unamortized premiums or discounts. Interest income is accrued on outstanding principal as earned. Unamortized discounts and premiums are amortized using the interest method with the amortization recognized as part of interest income in the consolidated statements of operations. During the years ended September 30, 2018 and 2017 the balance in the allowance for doubtful notes receivable was approximately $91,000 and $33,000, respectively. Long-Lived Assets The Company's long-lived assets consist of property and equipment, and intangible assets. The Company tests for impairment losses on long-lived assets used in operations whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Recoverability of an asset to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the asset. If such asset is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value. Impairment evaluations involve management's estimates of asset useful lives and future cash flows. Actual useful lives and cash flows could be different from those estimated by management which could have a material effect on our reporting results and financial positions. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. During fiscal year 2018, the Company recognized an Impairment Loss on long-lived assets relating to concepts and trademarks for SF LLC. Impairment is included in operating expenses in the consolidated statement of operations. See Note 5 for more information. Property, Equipment and Depreciation Property and equipment are stated at cost. Depreciation is calculated using the straight-line method over the estimated useful lives of the related assets. Expenditures for additions and improvements are capitalized, while repairs and maintenance costs are expensed as incurred. The cost and related accumulated depreciation of property and equipment sold or otherwise disposed of are removed from the accounts and any gain or loss is recorded in the year of disposal. Property and Equipment Useful Life Equipment 5 years Furniture and Fixtures 5 years Property Improvements 15-40 years Software 3 years Treasury stock. The Company records treasury stock at cost. Treasury stock is comprised of shares of common stock purchased by the Company in the secondary market. Fair Value of Financial Instruments The carrying amounts of cash, accounts receivable, and accounts payable approximate fair value because of the relative short-term maturity of these items and current payment expected. These fair value estimates are subjective in nature and involve uncertainties and matters of significant judgment, and therefore cannot be determined with precision. Changes in assumptions could significantly affect these estimates. The Company does not hold or issue financial instruments for trading purposes, nor does it utilize derivative instruments. Notes receivable are recorded at par value less allowance for doubtful accounts. The carrying amount is consistent with fair value based upon similar notes issued to other franchisees. ASC 825, Financial Instruments, clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. It also requires disclosure about how fair value is determined for assets and liabilities and establishes a hierarchy for which these assets and liabilities must be grouped, based on significant levels of inputs as follows: Level 1: Quoted prices in active markets for identical assets or liabilities. Level 2: Quoted prices in active markets for similar assets and liabilities and inputs that are observable for the asset or liability. Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. The determination of where assets and liabilities fall within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The carrying value of financial assets and liabilities recorded at fair value is measured on a recurring or nonrecurring basis. Financial assets and liabilities measured on a non-recurring basis are those that are adjusted to fair value when a significant event occurs. The Company had no financial assets or liabilities carried and measured on a recurring basis during the reporting periods. Financial assets and liabilities measured on a recurring basis are those that are adjusted to fair value each time a financial statement is prepared. Revenue Recognition Revenue is recognized on an accrual basis after services have been performed under contract terms and in accordance with regulatory requirements, the service price to the client is fixed or determinable, and collectability is reasonably assured. Since the Company's franchises are primarily a mobile concept and do not require finding locations or construction, the franchisees can begin operations as soon as they complete training. The franchise fees are fully collectible and nonrefundable as of the date of the signing of the franchise agreement, but the franchise fees are not recognized as revenue until initial training has been completed and when substantially all of the services required by the franchise agreement have been fulfilled by the Company in accordance with ASC Topic 952-605 Revenue Recognition-Franchisor At September 30, 2018 and 2017 the Company had no unearned revenue for franchise fees collected but not yet earned per the revenue recognition policy. Advertising Costs Advertising costs are expensed as incurred. The Company incurred advertising costs for the years ended September 30, 2018 and 2017 of approximately $30,000 and $21,000, respectively. Income Taxes The provision for income taxes and deferred income taxes are determined using the asset and liability method. Deferred tax assets and liabilities are determined based on temporary differences between the financial carrying amounts and the tax basis of assets and liabilities using enacted tax rates in effect in the years in which the temporary differences are expected to reverse. On a periodic basis, the Company assesses the probability that its net deferred tax assets, if any, will be recovered. If after evaluating all of the positive and negative evidence, a conclusion is made that it is more likely than not that some portion or all of the net deferred tax assets will not be recovered, a valuation allowance is provided by a charge to tax expense to reserve the portion of the deferred tax assets which are not expected to be realized. The Company reviews its filing positions for all open tax years in all U.S. federal and state jurisdictions where the Company is required to file. When there are uncertainties related to potential income tax benefits, in order to qualify for recognition, the position the Company takes has to have at least a "more likely than not" chance of being sustained (based on the position's technical merits) upon challenge by the respective authorities. The term "more likely than not" means a likelihood of more than 50 percent. Otherwise, the Company may not recognize any of the potential tax benefit associated with the position. The Company recognizes a benefit for a tax position that meets the "more likely than not" criterion at the largest amount of tax benefit that is greater than 50 percent likely of being realized upon its effective resolution. Unrecognized tax benefits involve management's judgment regarding the likelihood of the benefit being sustained. The final resolution of uncertain tax positions could result in adjustments to recorded amounts and may affect our results of operations, financial position and cash flows. The Company's policy is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company had no accrual for interest or penalties at September 30, 2018 and 2017, respectively, and has not recognized interest and/or penalties during the years ended September 30, 2018 and 2017, respectively, since there are no material unrecognized tax benefits. Management believes no material change to the amount of unrecognized tax benefits will occur within the next twelve months. The tax years subject to examination by major tax jurisdictions include the years 2015 and forward by the U.S. Internal Revenue Service, and the years 2014 and forward for various states. Net earnings (loss) per share Basic earnings (loss) per share are computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflect the potential dilution that could occur if stock options or other contracts to issue common stock were exercised or converted during the period. FASB ASC 260, Earnings per Share Stock-based compensation The Company accounts for employee stock awards for services based on the grant date fair value of the instrument issued and those issued to non-employees are recorded based on the grant date fair value of the consideration received or the fair value of the equity instrument, whichever is more reliably measurable. Stock Awards are expensed over the service period. Forfeitures are recognized as they occur. Reclassifications Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations. Recent accounting pronouncements In May 2014, the FASB issued Accounting Standards Update ("ASU") 2014-09, "Revenue from Contracts with Customers". ASU 2014-09, as amended by subsequent ASUs on the topic, establishes a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most of the existing revenue recognition guidance. This standard, which is effective for interim and annual reporting periods in fiscal years that begin after December 15, 2017, requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services and also requires certain additional disclosures. The Company adopted this standard effective October 1, 2018 using the modified retrospective approach, which requires applying the new standard to all existing contracts not yet completed as of the effective date and recording a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. Management has not yet completed the assessment of the impact the adoption of the standard is expected to have on the financial statements. They do, however, expect the adoption of Topic 606 to impact the accounting for initial franchise fees. Currently, the Company recognizes revenue from initial franchise fees in a single, up-front transaction, upon the completion of training of new franchisees, in the period in which all material obligations and initial services have been performed. Upon the adoption of Topic 606, we believe the Company will need to recognize the revenue related to initial franchise fees over the term of the related franchise agreement. This will result in less revenue in the short-term and more deferred revenue recognized over a period of time. In February 2016, the FASB issued ASU No. 2016-02, "Leases", which requires lessees to recognize a right-to-use asset and a lease obligation for all leases. Lessees are permitted to make an accounting policy election to not recognize an asset and liability for leases with a term of twelve months or less. Additional qualitative and quantitative disclosures, including significant judgments made by management, will be required. The new standard will become effective for the Company beginning with the first quarter 2020 and requires a modified retrospective transition approach and includes a number of practical expedients. Early adoption of the standard is permitted. The Company is currently evaluating the impacts the adoption of this accounting guidance will have on the consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, which requires companies to include amounts generally described as restricted cash and restricted cash equivalents in cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This guidance will be effective in the first quarter of the fiscal year ended September 30, 2019 and early adoption is permitted. Management determined that this will affect the presentation of consolidated statement of cash flows upon adoption in the quarter ended December 31, 2018. In June 2016, the FASB issued ASU No. 2016-13āMeasurement of Credit Losses on Financial Instruments, which changes how companies measure credit losses on most financial instruments measured at amortized cost and certain other instruments, such as loans, receivables and held-to-maturity debt securities. Rather than generally recognizing credit losses when it is probable that the loss has been incurred, the revised guidance requires companies to recognize an allowance for credit losses for the difference between the amortized cost basis of a financial instrument and the amount of amortized cost that the company expects to collect over the instrument's contractual life. ASU 2016-13 is effective for fiscal periods beginning after December 15, 2019 and must be adopted as a cumulative effect adjustment to retained earnings. Early adoption is permitted. The Company does not believe adoption of this guidance will have an impact on its consolidated financial statements All other newly issued accounting pronouncements, but not yet effective, have been deemed either immaterial or not applicable. |
Going Concern
Going Concern | 12 Months Ended |
Sep. 30, 2018 | |
Going Concern [Abstract] | |
Going Concern |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Sep. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | (3) Related Party Transactions In December 2017, the Company granted 14,286 warrants to two Directors of the Company. These warrants were granted in conjunction with the issuance of standby letters of credit from the two directors. The warrants were valued using the Black Scholes method. The fair value of the warrants on the date of grant were $2,000, and the shares vested immediately. The Company expensed $2,000 in connection with the grant during the quarter ended December 31, 2017. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Sep. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 4) Property and Equipment Property and equipment consisted of the following: September 30, Description 2018 2017 Depreciable Property and Equipment: Equipment $ 74,456 $ 66,969 Furniture and Fixtures 83,427 83,427 Property and Improvements 180,878 180,878 Software 114,884 98,307 Total Depreciable Property and Equipment 453,645 429,581 Accumulated Depreciation (282,541 ) (240,493 ) Total Net Depreciable Property and Equipment 171,104 189,088 Non-depreciable Property and Equipment: Work in progress 186,826 18,269 Total Net Property and Equipment $ 357,930 $ 207,357 Prior to the end of fiscal 2018, the Company listed one of its owned condominiums for sale located at 701 Market Street, Suite 113, St. Augustine, FL for $98,900. Property and equipment of $43,178 and $52,737 related to the net book value of this asset has been classified as Assets held for sale in the Consolidated Balance Sheet at September 30, 2018 and 2017 respectively. Depreciation expense totaled approximately $52,000 and $57,000, respectively, for the years ended September 30, 2018 and 2017. |
Intangible Assets
Intangible Assets | 12 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | (5) Intangible Assets Intangible Assets consist of purchased franchise rights and trademarks. The Intangible assets consists of Sew Fun Trademarks, Business Concepts and Curriculum which was purchased by the Company. During the fiscal year 2017, the Company determined that certain long-lived assets, related to repurchases of BFK territories during fiscal year 2013 and 2014, were over-valued. The Company determined that these territories and their associated fixed assets had no fair value outside of their unimproved territory value compared to other unsold territories. The impairment loss of $78,604 related to these assets is included in the other general and administrative expenses line on the Consolidated Statements of Operations for the year ended September 30, 2017. The Company abandoned the revenue stream for SF for which the intangible assets were intended to provide future economic value and therefore determined that the asset was fully impaired as of September 30, 2018. $23,300 was recorded as an impairment loss in the other general and administrative expenses line on the Consolidated Statements of Operations for the year ended September 30, 2018. |
Notes and Other Receivables
Notes and Other Receivables | 12 Months Ended |
Sep. 30, 2018 | |
Receivables [Abstract] | |
Notes and Other Receivables | (6) Notes and Other Receivables At September 30, 2018 and 2017, respectively, the Company held certain notes receivable totaling approximately $106,000 and $95,000 respectively for extended payment terms of franchise fees. The Company had an allowance on notes receivable of $91,000 and $33,000 as of September 30, 2018 and 2017, respectively. The net notes receivable was approximately $15,000 and $62,000 and was included in the consolidated balance sheet as of September 30, 2018 and 2017 respectively. The notes were generally non-interest-bearing notes with monthly payments, payable within one to two years. 2019 2020 Total Payment schedules for Notes Receivable $ 11,955 $ 94,045 $ 106,000 |
Accrued Marketing Fund
Accrued Marketing Fund | 12 Months Ended |
Sep. 30, 2018 | |
Accrued Liabilities and Other Liabilities [Abstract] | |
Accrued Marketing Fund | (7) Accrued Marketing Fund Per the terms of the franchise agreements, the Company collects 2% of franchiseeās gross revenues for a marketing fund, managed by the Company, to allocate toward national branding of the Companyās concepts to benefit the franchisees. The marketing fund amounts are accounted for as a liability on the balance sheet and the actual collections are deposited into a marketing fund bank account. Expenses pertaining to the marketing fund activities are paid from the marketing fund and reduce the liability account. At September 30, 2018 and 2017, the accrued marketing fund liability balances were approximately $97,000 and $132,000 respectively. |
Accrued Liabilities
Accrued Liabilities | 12 Months Ended |
Sep. 30, 2018 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | (8) Accrued Liabilities The Company had accrued liabilities at September 30, 2018, and September 30, 2017 as follows: Accrued Liabilities September 30, September 30, Accrued legal Fees $ - $ 77,719 Accrued Legal Settlements - 32,143 Accrued Exit Agreement - 9,739 Accrued Compensation and payroll taxes 14,605 17,950 Accrued Other - 16,126 $ 14,605 $ 153,677 |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Sep. 30, 2018 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | (9) Stock-Based Compensation In December 2017, the Company granted an aggregate of 14,286 warrants to two Directors of the Company. (See Note 3). The Company utilized the Black-Scholes valuation model for estimating fair value of the warrants. Each grant was evaluated based upon assumptions at the time of the grant. The assumptions used in our calculations are no dividend yield, expected volatility of approximately 247%, a risk-free interest rate of 1.76%, and an expected term of 5 years. The dividend yield of zero is based on the fact that the Company does not pay cash dividends and has no present intention to pay cash dividends. Expected volatility is estimated based on the Company's historical stock prices over a period equivalent to the expected life in years. The risk-free interest rate is based on the U.S. Treasury's Daily Treasury Yield Curve Rates at the date of grant with a term consistent with the expected life of the options granted. The expected term calculation is based on the "simplified method" allowed by the Securities and Exchange Commission (the "SEC"), due to no applicable historical exercise data available. On May 14, 2017, the Company granted options consistent with its corporate by-laws to purchase shares of the Company's common stock to each of the members of the Company's then Board, as follows: Charles Grant ā 900,000 shares, Joseph Marucci ā 324,000 shares, Michael Gorin ā 324,000 shares and JoyAnn Kenny, 216,000 shares. Each of the options has an exercise price of $0.30 per share, and is exercisable in full at any time during the five-year period commencing on the date of grant. The option grants were approved by the Board based upon an investigation by an independent compensation consultant, who provided analysis and compensation recommendations to the Board. Among other things, the report concluded that the directors have: (i) served entirely without compensation (other than $4,500 paid to Mr. Marucci in or prior to July 2015) ā Messrs. Grant and Marucci since March 2015 and Mr. Gorin and Ms. Kenny since July 2015; (ii) devoted more time and effort than what is to be expected or considered normal (especially the audit committee); (iii) been confronted by extenuating circumstances regarding the Company's affairs that required substantial additional effort. Finally, the analysis indicated that Board Chair, Charles Grant, had expended a particularly large amount of effort, spending considerably more time performing board services than the other board members. On May 13, 2017, pursuant to the employment agreement of Karla Kretsch, the Company's then President, the Company issued 8,000 shares of the Company's common stock, and granted options to purchase 28,000 shares of the Company's common stock at an exercise price of $0.25 per share, exercisable in full at any time during the five-year period commencing on the date of the grant. The shares and options were issued pursuant to the terms of Ms. Kretsch's employment agreement with the Company, on account of Ms. Kretsch's service to the Company for the quarter ended March 31, 2017. Based on the same employment agreement, for the quarter ending June 30, 2017, the Company issued 12,118 shares of the Company's common stock, and granted options to purchase 42,414 shares of the Company's common stock at an exercise price of $0.2063 per share, exercisable in full at any time during the five-year period commencing on the date of the grant. On July 26, 2017, Karla Kretsch informed the Company of her intention to resign as President of the Company. Since Ms. Kretsch's employment was terminated by Ms. Kretsch for "Good Reason" (as such term is defined in the Employment Agreement), Ms. Kretsch will be paid an amount equivalent to her base salary for a period of three months following the date of termination in equal amounts every two weeks, and will also be entitled to receive the Equity Awards due for the quarter in which termination occurred, as well as the immediately following three quarters, paid as scheduled at quarter-end. Therefore, for the quarter ending September 30, 2017, the Company recorded a total of approximately $34,000 in stock-based compensation expense for the fair value of equity awards according to the Employment Agreement. The Employment Agreement requires the grant of stock options to purchase 190,216 shares of the Company's common stock at an exercise price of $0.1840 per share, as well as stock grants for 54,348 shares. On October 26, 2017, the Board granted options to purchase 118,793 shares of the Company's common stock at an exercise price of $0.1840 per share, exercisable in full at any time during the five-year period commencing on the date of the grant to Christian Miller per his employment agreement from July of 2016. These options were retroactively issued on September 30, 2017 and are included in salaries and payroll taxes in the consolidated statement of operations as of September 30, 2017. The Company utilizes the Black-Scholes valuation model for estimating fair value of stock compensation for options awarded to officers and members of the Board. Each grant is evaluated based upon assumptions at the time of the grant. The assumptions used in our calculations are no dividend yield, expected volatility between 129.03% and 134.69%, risk-free interest rate of 1.85% to 1.89%, and expected term of 2.5 years. The dividend yield of zero is based on the fact that the Company does not pay cash dividends and has no present intention to pay cash dividends. Expected volatility is estimated based on the Company's historical stock prices over a period equivalent to the expected life in years. The risk-free interest rate is based on the U.S. Treasury's Daily Treasury Yield Curve Rates at the date of grant with a term consistent with the expected life of the options granted. The expected term calculation is based on the "simplified method" allowed by the Securities and Exchange Commission (the "SEC), due to no applicable historical exercise data available. The following are activity of options: Number of Shares Average Exercise Price Expiration Date Average Remaining Life Weighted Average Grant Date Fair Value Granted May 13, 2017 1,792,000 $ 0.30 05/13/22 44.5 Months 0.17 Granted June 30, 2017 42,414 $ 0.21 06/30/22 45 Months 0.15 Granted September 30, 2017 309,009 $ 0.18 09/30/22 48 Months 0.13 Vested and Exercisable at September 30, 2018 2,143,423 $ 0.28 0.16 No options were granted or forfeited during the year ended September 30, 2018. The aggregate intrinsic value of the options as of September 30, 2018 was $0. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | (10) Commitments and Contingencies Lease Commitments The following table summarizes the Companyās contractual lease obligations at September 30, 2018: Obligation 2019 Total Commercial Lease (Suite 114) $ 12,113 $ 12,113 The lease for Suite 114 expires in June 2019 and will not be renewed. Space will be leased on a month-to-month basis in Boise, Idaho subsequent to the expiration of the above lease. Rent expense was approximately $18,000 and $16,000, respectively, for the years ended September 30, 2018 and 2017. Litigation From time to time, the Company has been and may become involved in legal proceedings arising in the ordinary course of its business. Regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources, and other factors. On October 2, 2015, the Company filed suit in the state court in St. Johnās County, Florida, Case No. CA 15-1076, against its former Chief Executive Officer Brian Pappas, Christine Pappas, its former Human Resources officer, and an independent company controlled by Mr. Pappas named Franventures, LLC (āFranventuresā). The lawsuit seeks return of company emails and other electronic materials in the possession of the defendants, company control over the process by which the companyās documents are identified, and a court judgment that the property is the Companyās. Mr. and Mrs. Pappas have returned certain company documents that they have identified, but other issues remain. On December 11, 2017, Brian Pappas filed a counterclaim alleging the Company is required to indemnify him for a multitude of matters. The Company denies the allegation and is actively litigating this matter. In a separate suit, filed on March 7, 2016 in the state court in St. Johnās County, Florida (Case No. CA 16-236), Franventures, LLC (āFVā) alleged that it is due an unstated amount of money from the Company pursuant to a contract the Company had previously terminated. On June 23, 2016, the Company filed a counterclaim against Franventures, which also included a complaint against former Chairman of the Board and Chief Executive Officer Brian Pappas. The counterclaim seeks redress for losses and expenditures caused by alleged fraud, conversion of company assets, and breaches of fiduciary duty that the Company alleges that defendants perpetrated upon CLC, including assertions regarding actions by Brian Pappas that the Company alleges occurred while Mr. Pappas was serving as the Chief Executive Officer of CLC and as a member of its board of directors. This case is being actively litigated by the Company. On October 27, 2016, Brian Pappas filed a motion to amend the complaint to add a claim alleging that the Company slandered him by virtue of a press release issued on or about August 1, 2016, in which the Company reported to shareholders on steps it had taken and improvements it had implemented. The motion has still not been ruled upon by the Court. If Mr. Pappas does amend his complaint, the Company will vigorously defend the proposed claim. On February 24, 2017, franchisee, Team Kasa, LLC, along with its three owners, filed suit in the Eastern District of New York (Case No. 2:17-cv-01074) against former CEO Brian Pappas, and Franventures. The same Plaintiffs also initiated arbitration on the same issues (American Arbitration Association, Case No. 01-17-0001-1968), alleging the Company is jointly and severally liable for damages resulting from the allegations against Mr. Pappas and Franventures. The Company is contesting the allegations and its liability for any damages. On May 9, 2017, franchisee, Back and 4th, LLC, along with its owner, Kristena Bins-Turner, initiated arbitration against the Company for breach of contract, alleging that they did not receive adequate value for royalty payments made under the franchise agreement, for fraud, alleging material misrepresentations and omissions prior to entry into the franchise agreements, and for misrepresentation violations of Florida Statute 817.416. (American Arbitration Association, Case. No. 01-16-004-3745). Franchisee and its owner seek an unspecified amount of damages. The Company contested the allegations and its liability for any damages at an evidentiary hearing held December 5-7, 2017. This matter has been settled for $45,500 and included in other general and administrative expenses in the consolidated statement of operations the year ended September 30, 2018. On August 21, 2017, the SEC filed a Civil Complaint against the Company and certain former executive officers and directors in the United States District Court for the Middle District of Florida, Jacksonville Division, as Civil Action No. 3:17-cv-00954-TJC-JRK. The Civil Complaint was in regards to alleged violations of federal securities law occurring between 2011 and 2015. On August 22, 2017, the SEC also filed with the court the Companyās formal Consent to a full resolution of all allegations pertaining to the Company. Pursuant to the Consent, without admitting or denying the allegations, the Company agreed to the entry of a final judgment that permanently enjoins it from violating the sections of the federal securities laws listed in the Civil Complaint. On September 20, 2017, the United States District Court for the Middle District of Florida, Jacksonville Division issued the final judgment order as to the Company in the Civil Action No. 3:17-cv-00954-TJC-JRK. The entering of the final judgment order has resolved all allegations pertaining to the Company. The Company was not assessed any monetary penalties. As stated in the above, this matter is resolved and closed. On September 21, 2017, the Company filed a notice of voluntary dismissal without prejudice in the United States District Court for the Middle District of Florida, Jacksonville Division, in its lawsuit against Blake and Anik Furlow relating to their conduct in the shareholder consent the complaint on May 15, 2017, and after consideration, decided it was not in the best interest of the Company to proceed with the litigation. The action is closed. The dismissal is public record and is case # 3:17-cv-00552. On November 8, 2017, franchisee, Indy Bricks, LLC, along with its two owners, Ben and Kate Schreiber initiated arbitration against the Company. (American Arbitration Association, Case No. 01-17-0006-8120). Plaintiffs allege breach of contract, fraud, material misrepresentations and omissions, violations of the Indiana Franchise Act, and violations of the Indiana Deceptive Franchise Practices Act. The Company is vigorously contesting the allegations and its liability for any damages. |
Income Taxes
Income Taxes | 12 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | (11) Income Taxes The components of the deferred tax assets at September 30, 2018 and September 30, 2017 were as follows: 2018 2017 Deferred tax assets: Allowance for bad debt $ 159,907 $ 104,056 Charitable contributions 127 176 Stock-based compensation 87,675 121,919 Foreign Tax Credit 96,491 66,085 Net operating loss 304,953 466,998 Total gross deferred tax asset 649,153 759,234 Deferred tax liabilities: Depreciation timing difference (10,444 ) (11,445 ) Total deferred tax liability (10,444 ) (11,445 ) Gross net deferred tax asset 638,709 747,789 Less: Valuation allowances (638,709 ) (747,789 ) Net deferred tax asset $ - $ - The Company has recorded various deferred tax assets and liabilities as reflected above. In assessing the ability to realize the deferred tax assets, management considers, whether it is more likely than not, that some portion, or all of the deferred tax assets and liabilities will be realized. The ultimate realization is dependent on generating sufficient taxable income in future years. The valuation allowance is equal to 100% of the Net deferred tax asset. Given recurring losses, the Company cannot conclude that it is more likely than not that such assets will be realized, therefore a full valuation allowance has been recorded. The components of the provisions for income taxes for the fiscal years ended September 30, 2018 and 2017 are as follows: 2018 2017 Current: Federal $ - $ (53,587 ) State - (10,497 ) Total - 64,084 Deferred: Additional deferred tax related to book tax differences 109,081 (56,410 ) Valuation allowance (109,081 ) 485,147 Total Tax Provision $ - $ 364,653 A reconciliation of the provisions for income taxes for the fiscal years ended September 2018 and 2017 as compared to statutory rates is as follows: 2018 2017 Amount % Amount % Provision at statutory rates $ (53,125 ) 24.28 % $ (226,559 ) 34.00 % State income tax, net of federal benefit (7,477 ) 3.42 % (24,188 ) 3.63 % Penalties - 0.00 % 18,815 -2.82 % Meals & Entertainment 2,158 -0.99 % 1,040 -0.16 % Stock-based compensation - 0.00 % 130,289 -19.55 % Tax credits (23,024 ) 10.52 % - 0.00 % Other tax differences (10,754 ) 4.91 % (19,891 ) 2.99 % Change in rate 201,303 -91.99 % - 0.00 % Valuation Allowance on deferred tax assets (109,081 ) 49.85 % 485,147 -72.81 % Total income tax provision $ - 0 % $ 364,653 -54.72 % In December 2017, the United States Government passed new tax legislation that, among other provisions, will lower the corporate tax rate from 35% to 21%. In addition to applying the new lower corporate tax rate in 2018 and thereafter to any taxable income we may have, the legislation affects the way we can use and carryforward net operating losses previously accumulated and results in a revaluation of deferred tax assets and liabilities recorded on our balance sheet. Given that current deferred tax assets are offset by a full valuation allowance, these changes will have no net impact on the balance sheet. However, when we become profitable, we will receive a reduced benefit from such deferred tax assets. The effect of the legislation is a reduction in deferred tax assets and the corresponding valuation allowance of approximately $201,000, as of September 30, 2018. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Sep. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | (12) Subsequent Events The Company evaluates subsequent events that occur after the balance sheet date through the financial statements were issued. The following are subsequent events requiring disclosure: On November 14, 2018, the Company completed the sale of its condominium held for sale for proceeds of approximately $86,000 and recorded a gain of approximately $43,000, which represented the excess of the proceeds over the carrying value on that date. On March 27, 2019, the Company issued 13,265 shares of common stock to the former President of the Company due to a calculation error in relation to her terminated employment agreement. All equity compensation relating to this agreement was properly fully recognized during the year ended September 30, 2017. On June 24, 2019, the Company entered into a business venture with BPL Enterprises for Brickz4Schoolz (BPL) to form Bricks4Schoolz, LLC, a company that will deliver curriculum to Elementary and Middle School students which serves to help further children's academic performance and reduce anxiety in Mathematics and Sciences. The Company will provide access to its curriculum, manuals and training materials. BPL will develop digital delivery systems, market and act as manager. The Company will receive twelve percent (12%) royalty from all gross sales generated by Bricks4Schoolz, LLC. The Company did not provide any capital contributions to the venture. On July 9, 2019 the Company completed the sale of a condominium conference space listed for sale subsequent to year end for proceeds of $60,000 and recorded a gain of approximately $22,000 which represented the excess of the proceeds over the carrying value on that date. |
Nature of Organization and Su_2
Nature of Organization and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The Company financial statements are presented on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America ("GAAP"). International franchise fees vary and are set relative to the potential of the franchised territories. In addition, the Company awards master agreements outside of the United States and Canada. The royalty structure is the same for both our US and International franchisees. Contracts are structured as such that the Company collects revenue from foreign franchises in US dollars. We do not have international subsidiaries. The Company has multiple franchise concepts, but all concepts are managed centrally as one segment and are reviewed by the Company in total. Accordingly, decision-making regarding the Company's overall operating performance and allocation of Company resources are assessed on a consolidated basis. As such, the Company operates as one reporting segment. |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of CLC and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. |
Fiscal year | Fiscal year The Company operates on a September 30 fiscal year-end. |
Use of Estimates | Use of Estimates The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of financial statements and the reported amounts of revenues and expenses during the reporting period. The significant estimates and assumptions made by management include allowance for doubtful accounts, allowance for deferred tax assets, depreciation of property and equipment, recoverability of long lived assets and fair value of equity instruments. Actual results could differ from those estimates as the current economic environment has increased the degree of uncertainty inherent in these estimates and assumptions. |
Cash and Cash Equivalents | Cash, Restricted Cash, and Cash Equivalents The Company considers all highly liquid securities with original maturities of three months or less when acquired, to be cash equivalents. We had no cash equivalents at September 30, 2018 and 2017. The Company had restricted cash of approximately $23,000 and $118,000, respectively at fiscal years ended September 30, 2018 and 2017, associated with marketing funds collected from the franchisees. Per the franchise agreements, a marketing fund of 2% of franchisees' gross cash receipts is collected by the Company and held to be spent on the promotion of the brand (see Note 8). The Company maintains cash balances which at times exceed the federally insured limit of $250,000. The Company believes there is no significant risk with respect to these deposits. |
Accounts Receivables | Accounts Receivable The Company reviews accounts receivable periodically for collectability and establishes an allowance for doubtful accounts and records bad debt expense when deemed necessary. The Company records an allowance for doubtful accounts that is based on historical trends, customer knowledge, any known disputes, and considers the aging of the accounts receivable balances combined with management's estimate of future potential recoverability. Accounts and receivables are written off against the allowance after all attempts to collect a receivable have failed. The Company believes its allowances for doubtful accounts at September 30, 2018 and 2017 are adequate, but actual write-offs could exceed the recorded allowance. During the years ended September 30, 2018 and 2017 the balance in the allowance for doubtful accounts was approximately $938,000 and $262,000, respectively. |
Notes Receivable | Notes Receivable ASC 310, Receivables, provides guidance for receivables and notes that arise from credit sales, loans or other transactions. Financing receivable includes loans and notes receivable. Originated loans we hold for which we have the intent and ability to hold for the foreseeable future or to maturity (or payoff) are classified as held for investment. Financing receivables held for investment are reported in our consolidated balance sheets at the outstanding principal balance adjusted for any write -offs , allowance for loan losses, deferred fees or costs, and any unamortized premiums or discounts. Interest income is accrued on outstanding principal as earned. Unamortized discounts and premiums are amortized using the interest method with the amortization recognized as part of interest income in the consolidated statements of operations. During the years ended September 30, 2018 and 2017 the balance in the allowance for doubtful notes receivable was approximately $91,000 and $33,000, respectively. |
Long-Lived Assets | Long-Lived Assets The Company's long-lived assets consist of property and equipment, and intangible assets. The Company tests for impairment losses on long-lived assets used in operations whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Recoverability of an asset to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the asset. If such asset is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value. Impairment evaluations involve management's estimates of asset useful lives and future cash flows. Actual useful lives and cash flows could be different from those estimated by management which could have a material effect on our reporting results and financial positions. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. During fiscal year 2018, the Company recognized an Impairment Loss on long-lived assets relating to concepts and trademarks for SF LLC. Impairment is included in operating expenses in the consolidated statement of operations. See Note 5 for more information. |
Property, Equipment and Depreciation | Property, Equipment and Depreciation Property and equipment are stated at cost. Depreciation is calculated using the straight-line method over the estimated useful lives of the related assets. Expenditures for additions and improvements are capitalized, while repairs and maintenance costs are expensed as incurred. The cost and related accumulated depreciation of property and equipment sold or otherwise disposed of are removed from the accounts and any gain or loss is recorded in the year of disposal. Property and Equipment Useful Life Equipment 5 years Furniture and Fixtures 5 years Property Improvements 15-40 years Software 3 years |
Treasury stock | Treasury stock. The Company records treasury stock at cost. Treasury stock is comprised of shares of common stock purchased by the Company in the secondary market. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying amounts of cash, accounts receivable, and accounts payable approximate fair value because of the relative short-term maturity of these items and current payment expected. These fair value estimates are subjective in nature and involve uncertainties and matters of significant judgment, and therefore cannot be determined with precision. Changes in assumptions could significantly affect these estimates. The Company does not hold or issue financial instruments for trading purposes, nor does it utilize derivative instruments. Notes receivable are recorded at par value less allowance for doubtful accounts. The carrying amount is consistent with fair value based upon similar notes issued to other franchisees. ASC 825, Financial Instruments, clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. It also requires disclosure about how fair value is determined for assets and liabilities and establishes a hierarchy for which these assets and liabilities must be grouped, based on significant levels of inputs as follows: Level 1: Quoted prices in active markets for identical assets or liabilities. Level 2: Quoted prices in active markets for similar assets and liabilities and inputs that are observable for the asset or liability. Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. The determination of where assets and liabilities fall within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The carrying value of financial assets and liabilities recorded at fair value is measured on a recurring or nonrecurring basis. Financial assets and liabilities measured on a non-recurring basis are those that are adjusted to fair value when a significant event occurs. The Company had no financial assets or liabilities carried and measured on a recurring basis during the reporting periods. Financial assets and liabilities measured on a recurring basis are those that are adjusted to fair value each time a financial statement is prepared. |
Revenue Recognition | Revenue Recognition Revenue is recognized on an accrual basis after services have been performed under contract terms and in accordance with regulatory requirements, the service price to the client is fixed or determinable, and collectability is reasonably assured. Since the Company's franchises are primarily a mobile concept and do not require finding locations or construction, the franchisees can begin operations as soon as they complete training. The franchise fees are fully collectible and nonrefundable as of the date of the signing of the franchise agreement, but the franchise fees are not recognized as revenue until initial training has been completed and when substantially all of the services required by the franchise agreement have been fulfilled by the Company in accordance with ASC Topic 952-605 Revenue Recognition-Franchisor At September 30, 2018 and 2017 the Company had no unearned revenue for franchise fees collected but not yet earned per the revenue recognition policy. |
Advertising Costs | Advertising Costs Advertising costs are expensed as incurred. The Company incurred advertising costs for the years ended September 30, 2018 and 2017 of approximately $30,000 and $21,000, respectively. |
Income Taxes | Income Taxes The provision for income taxes and deferred income taxes are determined using the asset and liability method. Deferred tax assets and liabilities are determined based on temporary differences between the financial carrying amounts and the tax basis of assets and liabilities using enacted tax rates in effect in the years in which the temporary differences are expected to reverse. On a periodic basis, the Company assesses the probability that its net deferred tax assets, if any, will be recovered. If after evaluating all of the positive and negative evidence, a conclusion is made that it is more likely than not that some portion or all of the net deferred tax assets will not be recovered, a valuation allowance is provided by a charge to tax expense to reserve the portion of the deferred tax assets which are not expected to be realized. The Company reviews its filing positions for all open tax years in all U.S. federal and state jurisdictions where the Company is required to file. When there are uncertainties related to potential income tax benefits, in order to qualify for recognition, the position the Company takes has to have at least a "more likely than not" chance of being sustained (based on the position's technical merits) upon challenge by the respective authorities. The term "more likely than not" means a likelihood of more than 50 percent. Otherwise, the Company may not recognize any of the potential tax benefit associated with the position. The Company recognizes a benefit for a tax position that meets the "more likely than not" criterion at the largest amount of tax benefit that is greater than 50 percent likely of being realized upon its effective resolution. Unrecognized tax benefits involve management's judgment regarding the likelihood of the benefit being sustained. The final resolution of uncertain tax positions could result in adjustments to recorded amounts and may affect our results of operations, financial position and cash flows. The Company's policy is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company had no accrual for interest or penalties at September 30, 2018 and 2017, respectively, and has not recognized interest and/or penalties during the years ended September 30, 2018 and 2017, respectively, since there are no material unrecognized tax benefits. Management believes no material change to the amount of unrecognized tax benefits will occur within the next twelve months. The tax years subject to examination by major tax jurisdictions include the years 2015 and forward by the U.S. Internal Revenue Service, and the years 2014 and forward for various states. |
Net earnings (loss) per share | Net earnings (loss) per share Basic earnings (loss) per share are computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflect the potential dilution that could occur if stock options or other contracts to issue common stock were exercised or converted during the period. FASB ASC 260, Earnings per Share |
Stock-based compensation | Stock-based compensation The Company accounts for employee stock awards for services based on the grant date fair value of the instrument issued and those issued to non-employees are recorded based on the grant date fair value of the consideration received or the fair value of the equity instrument, whichever is more reliably measurable. Stock Awards are expensed over the service period. Forfeitures are recognized as they occur. |
Reclassifications | Reclassifications Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations. |
Recent accounting pronouncements | Recent accounting pronouncements In May 2014, the FASB issued Accounting Standards Update ("ASU") 2014-09, "Revenue from Contracts with Customers". ASU 2014-09, as amended by subsequent ASUs on the topic, establishes a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most of the existing revenue recognition guidance. This standard, which is effective for interim and annual reporting periods in fiscal years that begin after December 15, 2017, requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services and also requires certain additional disclosures. The Company adopted this standard effective October 1, 2018 using the modified retrospective approach, which requires applying the new standard to all existing contracts not yet completed as of the effective date and recording a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. Management has not yet completed the assessment of the impact the adoption of the standard is expected to have on the financial statements. They do, however, expect the adoption of Topic 606 to impact the accounting for initial franchise fees. Currently, the Company recognizes revenue from initial franchise fees in a single, up-front transaction, upon the completion of training of new franchisees, in the period in which all material obligations and initial services have been performed. Upon the adoption of Topic 606, we believe the Company will need to recognize the revenue related to initial franchise fees over the term of the related franchise agreement. This will result in less revenue in the short-term and more deferred revenue recognized over a period of time. In February 2016, the FASB issued ASU No. 2016-02, "Leases", which requires lessees to recognize a right-to-use asset and a lease obligation for all leases. Lessees are permitted to make an accounting policy election to not recognize an asset and liability for leases with a term of twelve months or less. Additional qualitative and quantitative disclosures, including significant judgments made by management, will be required. The new standard will become effective for the Company beginning with the first quarter 2020 and requires a modified retrospective transition approach and includes a number of practical expedients. Early adoption of the standard is permitted. The Company is currently evaluating the impacts the adoption of this accounting guidance will have on the consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, which requires companies to include amounts generally described as restricted cash and restricted cash equivalents in cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This guidance will be effective in the first quarter of the fiscal year ended September 30, 2019 and early adoption is permitted. Management determined that this will affect the presentation of consolidated statement of cash flows upon adoption in the quarter ended December 31, 2018. In June 2016, the FASB issued ASU No. 2016-13āMeasurement of Credit Losses on Financial Instruments, which changes how companies measure credit losses on most financial instruments measured at amortized cost and certain other instruments, such as loans, receivables and held-to-maturity debt securities. Rather than generally recognizing credit losses when it is probable that the loss has been incurred, the revised guidance requires companies to recognize an allowance for credit losses for the difference between the amortized cost basis of a financial instrument and the amount of amortized cost that the company expects to collect over the instrument's contractual life. ASU 2016-13 is effective for fiscal periods beginning after December 15, 2019 and must be adopted as a cumulative effect adjustment to retained earnings. Early adoption is permitted. The Company does not believe adoption of this guidance will have an impact on its consolidated financial statements All other newly issued accounting pronouncements, but not yet effective, have been deemed either immaterial or not applicable. |
Nature of Organization and Su_3
Nature of Organization and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Property and Equipment Useful Lifes | Property and Equipment Useful Life Equipment 5 years Furniture and Fixtures 5 years Property Improvements 15-40 years Software 3 years |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | September 30, Description 2018 2017 Depreciable Property and Equipment: Equipment $ 74,456 $ 66,969 Furniture and Fixtures 83,427 83,427 Property and Improvements 180,878 180,878 Software 114,884 98,307 Total Depreciable Property and Equipment 453,645 429,581 Accumulated Depreciation (282,541 ) (240,493 ) Total Net Depreciable Property and Equipment 171,104 189,088 Non-depreciable Property and Equipment: Work in progress 186,826 18,269 Total Net Property and Equipment $ 357,930 $ 207,357 |
Notes and Other Receivables (Ta
Notes and Other Receivables (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Receivables [Abstract] | |
Schedule of Future Payments for Notes and Other Receivables | 2019 2020 Total Payment schedules for Notes Receivable $ 11,955 $ 94,045 $ 106,000 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | Accrued Liabilities September 30, September 30, Accrued legal Fees $ - $ 77,719 Accrued Legal Settlements - 32,143 Accrued Exit Agreement - 9,739 Accrued Compensation and payroll taxes 14,605 17,950 Accrued Other - 16,126 $ 14,605 $ 153,677 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Stock Option Activity | The following are activity of options: Number of Shares Average Exercise Price Expiration Date Average Remaining Life Weighted Average Grant Date Fair Value Granted May 13, 2017 1,792,000 $ 0.30 05/13/22 44.5 Months 0.17 Granted June 30, 2017 42,414 $ 0.21 06/30/22 45 Months 0.15 Granted September 30, 2017 309,009 $ 0.18 09/30/22 48 Months 0.13 Vested and Exercisable at September 30, 2018 2,143,423 $ 0.28 0.16 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Contractual Lease Obligations | Obligation 2019 Total Commercial Lease (Suite 114) $ 12,113 $ 12,113 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Deferred Taxes | 2018 2017 Deferred tax assets: Allowance for bad debt $ 159,907 $ 104,056 Charitable contributions 127 176 Stock-based compensation 87,675 121,919 Foreign Tax Credit 96,491 66,085 Net operating loss 304,953 466,998 Total gross deferred tax asset 649,153 759,234 Deferred tax liabilities: Depreciation timing difference (10,444 ) (11,445 ) Total deferred tax liability (10,444 ) (11,445 ) Gross net deferred tax asset 638,709 747,789 Less: Valuation allowances (638,709 ) (747,789 ) Net deferred tax asset $ - $ - |
Schedule of Components of Provision For Income Taxes | 2018 2017 Current: Federal $ - $ (53,587 ) State - (10,497 ) Total - 64,084 Deferred: Additional deferred tax related to book tax differences 109,081 (56,410 ) Valuation allowance (109,081 ) 485,147 Total Tax Provision $ - $ 364,653 |
Schedule of Reconciliation of Income Tax Provision | 2018 2017 Amount % Amount % Provision at statutory rates $ (53,125 ) 24.28 % $ (226,559 ) 34.00 % State income tax, net of federal benefit (7,477 ) 3.42 % (24,188 ) 3.63 % Penalties - 0.00 % 18,815 -2.82 % Meals & Entertainment 2,158 -0.99 % 1,040 -0.16 % Stock-based compensation - 0.00 % 130,289 -19.55 % Tax credits (23,024 ) 10.52 % - 0.00 % Other tax differences (10,754 ) 4.91 % (19,891 ) 2.99 % Change in rate 201,303 -91.99 % - 0.00 % Valuation Allowance on deferred tax assets (109,081 ) 49.85 % 485,147 -72.81 % Total income tax provision $ - 0 % $ 364,653 -54.72 % |
Nature of Organization and Su_4
Nature of Organization and Summary of Significant Accounting Policies (Details) | 12 Months Ended |
Sep. 30, 2018 | |
Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and Equipment | 5 years |
Furniture and Fixtures [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and Equipment | 5 years |
Property Improvements [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and Equipment | 15 years |
Property Improvements [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and Equipment | 40 years |
Software [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and Equipment | 3 years |
Nature of Organization and Su_5
Nature of Organization and Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Restricted cash | $ 22,505 | $ 118,337 |
Cash amount insured by FDIC | 250,000 | |
Value of accounts written-off to reserve during period | 938,000 | 262,000 |
Advertising costs | 30,323 | 21,027 |
Allowance receivable | $ 91,000 | $ 33,000 |
Loss per share | $ 2,157,709 | $ 2,143,423 |
BFK Franchise Co., LLC ("BFK") [Member] | ||
Percentage of gross revenues collected for marketing fund | 100.00% | |
BFK Franchise Co., LLC ("BFK") [Member] | Franchise Agreements [Member] | ||
Percentage of gross revenues collected for marketing fund | 2.00% |
Going Concern (Details)
Going Concern (Details) | 12 Months Ended |
Sep. 30, 2018USD ($) | |
Going Concern [Abstract] | |
Net loss | $ 218,833 |
Accumulated losses | $ (2,391,525) |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended |
Dec. 31, 2017 | Sep. 30, 2018 | |
Related Party Transaction [Line Items] | ||
Fair value of the warrants | $ 2,000 | |
Two Director [Member] | ||
Related Party Transaction [Line Items] | ||
Warrants granted | 14,286 | |
Related Party Expense | $ 2,000 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | Sep. 30, 2018 | Sep. 30, 2017 |
Property, Plant and Equipment [Line Items] | ||
Total Depreciable Fixed Assets | $ 453,645 | $ 429,581 |
Accumulated Depreciation | (273,000) | (232,000) |
Total Net Depreciable Property and Equipment | 171,104 | 189,088 |
Non-depreciable Property and Equipment: | ||
Work In Progress | 186,826 | 18,269 |
Total Net Fixed Assets | 357,930 | 207,537 |
Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total Depreciable Fixed Assets | 74,456 | 66,969 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total Depreciable Fixed Assets | 83,427 | 83,427 |
Property Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total Depreciable Fixed Assets | 180,878 | 180,878 |
Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total Depreciable Fixed Assets | $ 114,884 | $ 98,307 |
Property and Equipment (Detai_2
Property and Equipment (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 51,607 | $ 57,175 |
Sale of property plant and equipment | 98,900 | |
Assets held for sale | $ 43,178 | $ 52,737 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Impairment loss | $ (23,300) | $ (78,604) |
Intangible assets | $ 23,300 |
Notes and Other Receivables (De
Notes and Other Receivables (Details) | Sep. 30, 2018USD ($) |
Receivables [Abstract] | |
2019 | $ 11,955 |
2020 | 94,045 |
Total | $ 106,000 |
Notes and Other Receivables (_2
Notes and Other Receivables (Details Narrative) - USD ($) | Sep. 30, 2018 | Sep. 30, 2017 |
Receivables [Abstract] | ||
Other receivables | $ 106,000 | $ 95,000 |
Allowance on notes receivable | 91,000 | 33,000 |
Notes receivable | $ 15,000 | $ 62,000 |
Accrued Marketing Fund (Details
Accrued Marketing Fund (Details Narrative) - USD ($) | Sep. 30, 2018 | Sep. 30, 2017 |
Accrued marketing fund | $ 97,334 | $ 131,909 |
BFK Franchise Co., LLC ("BFK") [Member] | ||
Percentage of gross revenues collected for marketing fund | 100.00% | |
BFK Franchise Co., LLC ("BFK") [Member] | Franchise Agreements [Member] | ||
Percentage of gross revenues collected for marketing fund | 2.00% |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) | Sep. 30, 2018 | Sep. 30, 2017 |
Payables and Accruals [Abstract] | ||
Accrued legal Fees | $ 77,719 | |
Accrued Legal Settlements | 32,143 | |
Accrued Exit Agreement | 9,739 | |
Accrued Compensation and payroll taxes | 14,605 | 17,950 |
Accrued Other | 16,126 | |
Accrued Liabilities | $ 14,605 | $ 153,677 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - $ / shares | Jun. 30, 2017 | May 13, 2017 | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 |
Number of Shares | |||||
Granted | 42,414 | 1,792,000 | 14,286 | 309,009 | |
Options vested and exercisable at end of period | 2,143,423 | ||||
Average Exercise Price | |||||
Options granted | $ 0.21 | $ 0.30 | $ 0.18 | ||
Vested and Exercisable at end of period | $ 0.28 | ||||
Expiration Date | Jun. 30, 2022 | May 13, 2022 | Sep. 30, 2022 | ||
Average Remaining Life | |||||
Vested and Exercisable | 45 years | 44 years 6 months | 48 years | ||
Weighted Average Grant Date Fair Value | |||||
Granted | $ 0.15 | $ 0.17 | $ 0.13 | ||
Vested and Exercisable at end of period | $ 0.16 |
Stock-Based Compensation (Det_2
Stock-Based Compensation (Details Narrative) - USD ($) | Oct. 26, 2017 | Jun. 30, 2017 | May 14, 2017 | May 13, 2017 | Jul. 31, 2015 | Sep. 30, 2018 | Sep. 30, 2017 | Jun. 30, 2017 | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 |
Value for shares issued | $ 0 | ||||||||||
Number of shares granted | 42,414 | 1,792,000 | 14,286 | 309,009 | |||||||
Exercise price (in dollars per share) | $ 0.21 | $ 0.30 | $ 0.18 | ||||||||
Exercisable contractual term | 2 years 6 months | ||||||||||
Compensation paid | $ 598,237 | $ 1,316,838 | |||||||||
Dividend yield | 0.00% | ||||||||||
Expected volatility rate | 247.00% | ||||||||||
Risk-free interest rate | 1.76% | ||||||||||
Minimum [Member] | |||||||||||
Expected volatility rate | 129.03% | ||||||||||
Risk-free interest rate | 1.85% | ||||||||||
Maximum [Member] | |||||||||||
Expected volatility rate | 134.69% | ||||||||||
Risk-free interest rate | 1.89% | ||||||||||
Employment Agreement [Member] | |||||||||||
Number of shares issued | 12,118 | ||||||||||
Number of shares granted | 42,414 | ||||||||||
Exercise price (in dollars per share) | $ 0.2063 | ||||||||||
Exercisable contractual term | 5 years | ||||||||||
Mr. Charles Grant [Member] | |||||||||||
Number of shares granted | 900,000 | ||||||||||
Exercise price (in dollars per share) | $ 0.30 | ||||||||||
Exercisable contractual term | 5 years | ||||||||||
Mr. Joseph Marucci [Member] | |||||||||||
Number of shares granted | 324,000 | ||||||||||
Exercise price (in dollars per share) | $ 0.30 | ||||||||||
Exercisable contractual term | 5 years | ||||||||||
Compensation paid | $ 4,500 | ||||||||||
Mr. Michael Gorin [Member] | |||||||||||
Number of shares granted | 324,000 | ||||||||||
Exercise price (in dollars per share) | $ 0.30 | ||||||||||
Exercisable contractual term | 5 years | ||||||||||
Mr. JoyAnn Kenny [Member] | |||||||||||
Number of shares granted | 216,000 | ||||||||||
Exercise price (in dollars per share) | $ 0.30 | ||||||||||
Exercisable contractual term | 5 years | ||||||||||
Ms. Karla Kretsch [Member] | |||||||||||
Number of shares issued | 8,000 | 190,216 | |||||||||
Number of shares granted | 28,000 | 54,348 | |||||||||
Exercise price (in dollars per share) | $ 0.25 | $ 0.1840 | |||||||||
Exercisable contractual term | 5 years | 5 years | |||||||||
Compensation paid | $ 34,000 | ||||||||||
Christian Miller [Member] | Employment Agreement [Member] | Stock Grants, Per Employment Agreement [Member] | |||||||||||
Number of shares granted | 118,793 | ||||||||||
Exercise price (in dollars per share) | $ 0.1840 | ||||||||||
Exercisable contractual term | 5 years |
Commitments and Contingencies_2
Commitments and Contingencies (Details) - Commercial Lease Suite 114 [Member] | Sep. 30, 2018USD ($) |
Operating Leased Assets [Line Items] | |
2019 | $ 12,113 |
Total | $ 12,113 |
Commitments and Contingencies_3
Commitments and Contingencies (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Rent expense | $ 18,000 | $ 16,000 |
Othergeneral and administrative expenses | $ 391,923 | $ 312,809 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | Sep. 30, 2018 | Sep. 30, 2017 |
Deferred tax assets: | ||
Allowance for bad debt | $ 159,907 | $ 104,056 |
Charitable contributions | 127 | 176 |
Stock-based compensation | 87,675 | 121,919 |
Foreign Tax Credit | 96,491 | 66,085 |
Net operating loss | 304,953 | 466,998 |
Total gross deferred tax asset | 649,153 | 759,234 |
Deferred tax liabilities: | ||
Depreciation timing difference | (10,444) | (11,445) |
Total deferred liability | (10,444) | (11,445) |
Gross net deferred tax asset | 638,709 | 747,789 |
Less: Valuation allowances | (638,709) | (747,789) |
Net deferred tax asset |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Current | ||
Federal | $ (53,587) | |
State | (10,497) | |
Total | 64,084 | |
Deferred: | ||
Additional deferred tax related to book tax differences | 109,081 | (56,410) |
Valuation allowance provision | (109,081) | 485,147 |
Total Tax Provision | $ 364,653 |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Income Tax Provision Reconciliation (Amount): | ||
Provision at statutory rates | $ (53,125) | $ (226,559) |
State income tax, net of federal benefit | (7,477) | (24,188) |
Penalties | 18,815 | |
Meals & Entertainment | 2,158 | 1,040 |
Stock-based compensation | 130,289 | |
Tax credits | (23,024) | |
Other tax differences | (10,754) | (19,891) |
Change in rate | 201,303 | |
Valuation allowance on net operating loss carryover | (109,081) | 485,147 |
Total Tax Provision | $ 364,653 | |
Income Tax Provision Reconciliation (%): | ||
Provision at statutory rates | 24.28% | 34.00% |
State income tax, net of federal benefit | 3.42% | 3.63% |
Penalties | 0.00% | (2.82%) |
Meals & Entertainment | (0.99%) | (0.16%) |
Stock-based compensation | 0.00% | (19.55%) |
Tax credits | 10.52% | 0.00% |
Other tax differences | 4.91% | 2.99% |
Change in rate | (91.99%) | 0.00% |
Valuation allowance on net operating loss carryover | 49.85% | (7281.00%) |
Total income tax provision | 0.00% | (54.72%) |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 1 Months Ended | |
Dec. 31, 2017 | Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||
Corporate tax rate changes, description | 35% to 21%. | |
Deferred tax assets valuation allowance | $ 201,000 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - Subsequent Event [Member] - USD ($) | Jul. 09, 2019 | Nov. 14, 2018 | Mar. 27, 2019 | Jun. 24, 2019 |
Proceeds from sale of condominium | $ 60,000 | $ 86,000 | ||
Gain on sale of condominium | $ 22,000 | $ 43,000 | ||
Royalty percentage from gross sales | 12.00% | |||
Former President [Member] | ||||
Common stock issued during the period | 13,265 |