Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Sep. 30, 2014 | Jan. 02, 2015 | Mar. 31, 2014 | |
Document And Entity Information | |||
Entity Registrant Name | Regenicin, Inc. | ||
Entity Central Index Key | 1412659 | ||
Document Type | 10-K | ||
Document Period End Date | 30-Sep-14 | ||
Amendment Flag | FALSE | ||
Current Fiscal Year End Date | -21 | ||
Is Entity a Well-known Seasoned Issuer? | No | ||
Is Entity a Voluntary Filer? | No | ||
Is Entity's Reporting Status Current? | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $1,829,193 | ||
Entity Common Stock, Shares Outstanding | 143,090,083 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2014 |
Balance_Sheets
Balance Sheets (USD $) | Sep. 30, 2014 | Sep. 30, 2013 |
CURRENT ASSETS | ||
Cash | $492 | $22,500 |
Prepaid expenses and other current assets | 49,462 | 66,335 |
Deferred income taxes | 2,829,000 | |
Total current assets | 2,878,954 | 88,835 |
Intangible assets | 7,500 | 7,500 |
Total assets | 2,886,454 | 96,335 |
CURRENT LIABILITIES | ||
Accounts payable | 1,393,605 | 1,392,481 |
Accrued expenses | 1,991,332 | 1,475,002 |
Note payable - insurance financing | 51,613 | 52,220 |
Bridge financing (net of discount of $-0- and $1,226) | 450,000 | 538,774 |
Convertible promissory notes (net of discount of $20,645 and $136,452) | 295,617 | 264,417 |
Loan payable | 10,000 | 10,000 |
Loans payable - related parties | 205,817 | 64,400 |
Derivative liabilities | 5,164 | 438,779 |
Total current liabilities | 4,403,148 | 4,236,073 |
Total liabilities | 4,403,148 | 4,236,073 |
STOCKHOLDERS DEFICIENCY | ||
Series A 10% Convertible Preferred stock, $0.001 par value, 5,500,000 shares authorized; 885,000 issued and outstanding | 885 | 885 |
Common stock, $0.001 par value; 200,000,000 shares authorized; 139,598,152 and 120,159,009 issued, respectively; 135,169,792 and 115,730,649 outstanding, respectively | 139,601 | 120,160 |
Common stock to be issued; 10,367,094 and 6,701,018 shares | 402,040 | 334,968 |
Additional paid-in capital | 8,897,799 | 8,501,390 |
Accumulated deficit | -10,952,591 | -13,092,713 |
Less: treasury stock; 4,428,360 shares at par | -4,428 | -4,428 |
Total stockholders deficiency | -1,516,694 | -4,139,738 |
Total liabilities and stockholders deficiency | $2,886,454 | $96,335 |
Balance_Sheets_Parenthetical
Balance Sheets (Parenthetical) (USD $) | Sep. 30, 2014 | Sep. 30, 2013 |
Statement of Financial Position [Abstract] | ||
Series A Preferred Stock, Par Value | $0.00 | $0.00 |
Series A Preferred Stock, Shares Authorized | 5,500,000 | 5,500,000 |
Series A Preferred Stock, Issued and outstanding | 885,000 | 885,000 |
Common Stock, Par Value | $0.00 | $0.00 |
Common Stock, Shares Authorized | 200,000,000 | 200,000,000 |
Common Stock, Issued and outstanding | 139,598,152 | 120,159,000 |
Common Stock, Outstanding | 135,169,792 | 115,730,649 |
Common Stock, To Be Issued | 10,367,094 | 6,701,018 |
Treasury Stock, Issued | 4,428,360 | 4,428,360 |
Bridge financing discount | $0 | $1,226 |
Convertible promissory note discount | $20,645 | $136,452 |
Statements_of_Operations
Statements of Operations (USD $) | 12 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Income Statement [Abstract] | ||
Revenues | ||
Operating expenses | ||
Research and development | 80,000 | |
General and administrative | 698,339 | 917,763 |
Impairment of intangible asset | 3,000,000 | |
Stock based compensation - general and administrative | 27,556 | |
Total operating expenses | 725,895 | 3,997,763 |
Loss from operations | -725,895 | -3,997,763 |
Other income (expenses) | ||
Interest expense, including amortization of debt discounts and beneficial conversion features | -232,379 | -766,680 |
Gain (loss) on derivative liabilities | 269,396 | -140,369 |
Total other income (expenses) | 37,017 | -907,049 |
Loss before income tax benefit | -688,878 | -4,904,812 |
Income tax benefit | 2,829,000 | |
Net income (loss) | 2,140,122 | -4,904,812 |
Preferred stock dividends | -70,800 | -46,198 |
Net income (loss) attributable to common stockholders | $2,069,322 | ($4,951,010) |
Income (loss) per share Basic | $0.02 | ($0.05) |
Income (loss) per share Diluted | $0.01 | ($0.05) |
Weighted average number of shares outstanding Basic | 132,966,528 | 109,139,729 |
Weighted average number of shares outstanding Diluted | 191,425,784 | 109,139,729 |
Shareholders_Equity
Shareholders Equity (USD $) | Convertible Preferred Stock | Common Stock | Common StockTo Be Issued | Additional Paid-In Capital | Accumulated Deficit | Treasury Stock | Total |
Balance Beginning, Amount at Sep. 30, 2012 | $93,837 | $368,326 | $7,274,799 | ($8,187,901) | ($4,428) | ($454,482) | |
Balance Beginning, Shares at Sep. 30, 2012 | 93,836,324 | ||||||
Preferred stock dividends, Amount | -46,198 | -46,198 | |||||
Shares issued for conversion of debt and accrued interest | 25,521,685 | ||||||
Shares issued for conversion of debt and accrued interest, amount | 25,522 | -453,827 | 944,406 | 516,101 | |||
Share to be issued in connection with conversion of debt and accrued interest | 420,469 | 420,469 | |||||
Shares issued under Consulting Agreement | 801,000 | ||||||
Shares issued under Consulting Agreement, Amount | 801 | 88,569 | 89,370 | ||||
Reversal of derivative liabilities ot equity | 78,862 | 78,862 | |||||
Beneficial conversion features on bridge financing | 160,952 | ||||||
Net loss | -4,904,812 | -4,904,812 | |||||
Balance Ending, Amount at Sep. 30, 2013 | 885 | 120,160 | 334,968 | 8,501,390 | -13,092,713 | -4,428 | -4,139,738 |
Balance Ending, Shares at Sep. 30, 2013 | 885,000 | 120,159,009 | |||||
Preferred stock dividends, Amount | -70,800 | -70,800 | |||||
Shares issued for conversion of debt and accrued interest | 11,440,392 | ||||||
Shares issued for conversion of debt and accrued interest, amount | 17,411 | -41,613 | 240,975 | 216,803 | |||
Share to be issued in connection with conversion of debt and accrued interest | 108,685 | 108,685 | |||||
Shares issued under Consulting Agreement | 1,038,751 | ||||||
Shares issued under Consulting Agreement, Amount | 1,040 | 34,811 | 35,851 | ||||
Shares issued for exercise of warrant, Shares | 960,000 | ||||||
Shares issued for exercise of warrant, Amount | 960 | -320 | 640 | ||||
Reversal of derivative liabilities ot equity | 84,070 | 84,070 | |||||
Beneficial conversion features on bridge financing | 75,000 | 75,000 | |||||
Stock compensation expense | 27,556 | 27,556 | |||||
Issuance of warrant to Cristoforo | 5,117 | 5,117 | |||||
Net loss | 2,140,122 | 2,140,122 | |||||
Balance Ending, Amount at Sep. 30, 2014 | $885 | $139,601 | $402,040 | $8,897,799 | ($10,952,591) | ($4,428) | ($1,516,694) |
Balance Ending, Shares at Sep. 30, 2014 | 885,000 | 133,598,152 |
Statements_of_Cash_Flows
Statements of Cash Flows (USD $) | 12 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income (loss) | $2,140,122 | ($4,904,812) |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||
Deferred income taxes | -2,829,000 | |
Impairment of intangible | 3,000,000 | |
Amortization of debt discounts | 155,576 | 170,053 |
Accrued interest on notes and loans payable | 59,289 | 77,419 |
Amortization of beneficial conversion features | 54,545 | 276,049 |
Original interest discount on convertible note payable | 4,156 | 95,905 |
Stock based compensation - G&A | 27,556 | |
Stock based compensation - Interest expense | 89,370 | |
(Gain) loss on derivative liabilities | -269,393 | 140,368 |
Other gain related to derivative liabilities | -63,095 | |
Changes in operating assets and liabilities | ||
Prepaid expenses and other current assets | 68,486 | 45,896 |
Accounts payable | 1,124 | 31,129 |
Accrued expenses | 420,151 | 293,481 |
Net cash used in operating activities | -211,845 | -685,142 |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from the issuance of notes payable | 100,000 | 715,000 |
Proceeds from loans from related parties | 143,507 | 6,400 |
Repayments of loans from related party | -2,090 | |
Repayments of notes payable - insurance financing | -52,220 | -47,832 |
Proceeds from the sale of common stock | 640 | |
Net cash provided by financing activities | 189,837 | 673,568 |
NET DECREASE IN CASH | -22,008 | -11,574 |
CASH - BEGINNING OF YEAR | 22,500 | 34,074 |
CASH - END OF YEAR | 492 | 22,500 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | 4,453 | 1,664 |
Non-cash activities: | ||
Preferred stock dividends | 70,800 | 46,198 |
Shares issued/to be issued in connection with conversion of debt and accrued interest | 304,874 | 936,570 |
Beneficial conversion feature and warrant value on bridge financing | 75,000 | 160,952 |
Derivative liabilities reclassified to additional paid-in capital | 104,684 | 57,892 |
Common stock issued for accrued expenses | $35,851 | $78,862 |
THE_COMPANY
THE COMPANY | 12 Months Ended |
Sep. 30, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
THE COMPANY | Windstar, Inc. was incorporated in the state of Nevada on September 6, 2007. On July 19, 2010, the Company amended its Articles of Incorporation to change the name of the Company to Regenicin, Inc. (“Regenicin”). In September 2013, Regenicin formed a new wholly-owned subsidiary for the sole purpose of conducting research in the State of Georgia (together, the “Company”). The subsidiary has no activity since its formation due to the lack of funding. |
The Company’s original business was the development of a purification device. Such business was assigned to the Company’s former management in July 2010. | |
The Company has adopted a new business plan and intended to develop and commercialize a potentially lifesaving technology by the introduction of tissue-engineered skin substitutes to restore the qualities of healthy human skin for use in the treatment of burns, chronic wounds and a variety of plastic surgery procedures. | |
The Company entered into a Know-How License and Stock Purchase Agreement (the “Know-How SPA”) with Lonza Walkersville, Inc. (“Lonza Walkersville”) on July 21, 2010. Pursuant to the terms of the Know-How SPA, the Company paid Lonza Walkersville $3,000,000 and, in exchange, the Company was to receive an exclusive license to use certain proprietary know-how and information necessary to develop and seek approval by the U.S. Food and Drug Administration (“FDA”) for the commercial sale of technology held by the Cutanogen Corporation (“Cutanogen”), a subsidiary of Lonza Walkersville. Additionally, pursuant to the terms of the Know-How SPA, the Company was entitled to receive certain related assistance and support from Lonza Walkersville upon payment of the $3,000,000. Under the Know-How SPA, once FDA approval was secured for the commercial sale of the technology, the Company would be entitled to acquire Cutanogen, Lonza Walkersville’s subsidiary, for $2,000,000 in cash. | |
Unfortunately, after prolonged attempts to negotiate disputes with Lonza Walkersville failed, on September 30, 2013, the Company filed a lawsuit against Lonza Walkersville, Lonza Group Ltd. (“Lonza Group”) and Lonza America, Inc. (“Lonza America”) (collectively, the “Defendant”) in Fulton County Superior Court in the State of Georgia. | |
The Company alleged in the complaint that, because of the Defendant’s breaches and tortious conduct, that the Company lost fees paid to the Defendant, which the Defendant did not earn, and suffered consequential damages and lost opportunities. It should also be noted that the $3,000,000 initially paid to Lonza Walkersville, which was recorded as an intangible asset, was fully written off in the accompanying consolidated financial statements as of September 30, 2013. See Notes C and J. | |
On November 7, 2014, the Company entered into an Asset Sale Agreement (the “Sale Agreement”) with Amarantus Bioscience Holdings, Inc., (“Amarantus”). Under the Sale Agreement, the Company agreed to sell to Amarantus all of its rights and claims in the litigation currently pending in the United States District Court for the District of New Jersey against Lonza Walkersville and Lonza America, Inc. (the “Lonza Litigation”). This includes all of the Cutanagen intellectual property rights and any Lonza manufacturing know-how technology. In addition, the Company has agreed to sell the PermaDerm® trademark and related intellectual property rights associated with it. The purchase price to be paid by Amarantus will consist of: (i) $3,500,000 in cash, and (ii) shares of common stock in Amarantus having a value of $3,000,000. See Note K for a further discussion. | |
The Company intends to use the net proceeds of the transaction to fund development of cultured cell technology and to pursue approval of the products through the U.S. Food and Drug Administration. We intend to use some of the proceeds from our recent sale of assets to Amarantus to develop and commercialize our own new technology for cultured skin substitutes. We have been developing our own unique cultured skin substitute since we received Lonza’s termination notice. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Accounting Policies [Abstract] | ||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Principles of Consolidation: | |||||||
The accompanying consolidated financial statements include the accounts of Regenicin and its wholly-owned subsidiary. All significant inter-company balances and transactions have been eliminated. | ||||||||
Going Concern: | ||||||||
The Company's consolidated financial statements have been prepared assuming that the Company will continue as a going concern which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company has incurred cumulative losses of approximately $11 million from inception, expects to incur further losses in the development of its business and has been dependent on funding operations through the issuance of convertible debt and private sale of equity securities. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management's plans include continuing to finance operations through the private or public placement of debt and/or equity securities and the reduction of expenditures. In addition, the Company intends on using the proceeds from the Asset Sale to fund operations. However, no assurance can be given at this time as to whether the Company will be able to achieve these objectives. The consolidated financial statements do not include any adjustment relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. | ||||||||
Development Stage Activities and Operations: | ||||||||
In June 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-10, “Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation” (“ASU 2014-10”). ASU 2014-10 eliminates the distinction of a development stage entity and certain related disclosure requirements, including the elimination of inception-to-date information on the statements of operations, cash flows and stockholders’ deficiency. The amendments in ASU 2014-10 will be effective prospectively for annual reporting periods beginning after December 15, 2014, and interim periods within those annual periods, however, early adoption is permitted. The Company evaluated and adopted ASU 2014-10 for the reporting period ended June 30, 2014. The Company’s consolidated financial statements will be impacted by the adoption of ASU 2014-10 primarily by the removal of inception-to-date information in the Company’s consolidated statements of operations, cash flows, and stockholders’ deficiency. | ||||||||
Intangible assets: | ||||||||
Intangible assets, which include purchased licenses, patents and patent rights, are stated at cost and will be amortized using the straight-line method over their useful lives based upon the pattern in which the expected benefits will be realized, or on a straight-line basis, whichever is greater (see Note C). Such amortization will begin once the Company has a saleable product. As discussed below in Note L, the Company sold its intangible assets on November 7, 2014. | ||||||||
The Company reviews intangible assets subject to amortization whenever events or changes in circumstances indicate that the carrying amount of such an asset may not be recoverable. Recoverability of these assets is measured by comparison of their carrying amount to the future undiscounted cash flows the assets are expected to generate. If such assets are considered impaired, the impairment to be recognized is equal to the amount by which the carrying value of the assets exceeds their fair value determined by either a quoted market price, if any, or a value determined by utilizing a discounted cash flow technique. In assessing recoverability, the Company must make assumptions regarding estimated future cash flows and discount factors. If these estimates or related assumptions change in the future, the Company may be required to record impairment charges. The Company recorded an impairment charge of $-0- and $3,000,000 in the years ended September 30, 2014 and 2013 (see Note C). | ||||||||
Research and development: | ||||||||
Research and development costs are charged to expense as incurred. | ||||||||
Income (loss) per share: | ||||||||
Basic income (loss) per share is computed by dividing the net income (loss) by the weighted average number of common shares outstanding during the period. Diluted loss per share give effect to dilutive convertible securities, options, warrants and other potential common stock outstanding during the period, only in periods in which such effect is dilutive. The following table summarizes the components of the income (loss) per common share calculation: | ||||||||
Year Ended | ||||||||
September 30, | ||||||||
2014 | 2013 | |||||||
Income (Loss) Per Common Share – Basic: | ||||||||
Net income (loss) available to common stockholders | $ | 2,069,322 | $ | (4,951,010 | ) | |||
Weighted-average common shares outstanding | 132,966,528 | 109,139,729 | ||||||
Basic income (loss) per share | $ | 0.02 | $ | (0.05 | ) | |||
Income (Loss) Per Common Share – Diluted: | ||||||||
Net income (loss) | $ | 2,069,322 | $ | (4,951,010 | ) | |||
Weighted-average common shares outstanding | 132,966,528 | 109,139,729 | ||||||
Convertible preferred stock | 44,250,000 | — | ||||||
Convertible debentures | 14,209,256 | — | ||||||
Weighted-average common shares outstanding and common share equivalents | 191,425,784 | 109,139,729 | ||||||
Diluted income (loss) per share | $ | 0.01 | $ | (0.05 | ) | |||
The following securities have been excluded from the calculation of net loss per share, as their effect would be anti-dilutive: | ||||||||
Shares of Common Stock | ||||||||
Issuable upon Conversion/Exercise | ||||||||
as of September 30, | ||||||||
2014 | 2013 | |||||||
Options | 5,542,688 | 5,542,688 | ||||||
Warrants | 3,611,167 | 3,663,667 | ||||||
Convertible preferred stock | — | 17,700,000 | ||||||
Convertible debentures | — | 31,828,330 | ||||||
Financial Instruments and Fair Value Measurement: | ||||||||
The carrying value of cash, prepaid expenses and other current assets, accounts payable, accrued expenses and all loans and notes payable in the Company’s consolidated balance sheets approximated their values as of September 30, 2014 and 2013 due to their short-term nature. | ||||||||
The Company issued notes payable that contained conversion features which were accounted for separately as derivative liabilities and measured at fair value on a recurring basis. Changes in fair value are charged to other income (expenses) as appropriate. The fair value of the derivate liabilities was determined based on Level 2 inputs utilizing observable quoted prices for similar instruments in active markets and observable quoted prices for identical or similar instruments in markets that are not very active. Derivative liabilities totaled $5,164 and $438,779 as of September 30, 2014 and 2013, respectively.. | ||||||||
See Note F – Notes Payable – Convertible Promissory Notes for additional information. | ||||||||
Use of Estimates: | ||||||||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Such estimation includes the selection of assumptions underlying the calculation of the fair value of options. Actual results could differ from those estimates. | ||||||||
Stock-Based Compensation: | ||||||||
The Company accounts for stock-based compensation in accordance with FASB ASC 718, “Compensation - Stock Compensation.” Under the fair value recognition provision of the ASC, stock-based compensation cost is estimated at the grant date based on the fair value of the award. The Company estimates the fair value of stock options granted using the Black-Scholes-Merton option pricing model. | ||||||||
The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with FASB ASC 505, “Equity.” Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earlier of a performance commitment or completion of performance by the provider of goods or services as defined by ASC 505. | ||||||||
Income Taxes: | ||||||||
The Company accounts for income taxes in accordance with accounting guidance now codified as FASB ASC 740, "Income Taxes," which requires that the Company recognize deferred tax liabilities and assets based on the differences between the financial statement carrying amounts and the tax bases of assets and liabilities, using enacted tax rates in effect in the years the differences are expected to reverse. Deferred income tax benefit (expense) results from the change in net deferred tax assets or deferred tax liabilities. A valuation allowance is recorded when it is more likely than not that some or all deferred tax assets will not be realized. | ||||||||
The Company has adopted the provisions of FASB ASC 740-10-05 "Accounting for Uncertainty in Income Taxes." The ASC clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements. The ASC prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The ASC provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. | ||||||||
Recently Issued Accounting Pronouncements: | ||||||||
Effective January 1, 2014, the Company adopted ASU No. 2013-11, “Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists” (“ASU 2013-11”). ASU 2013-11 is expected to reduce diversity in practice by providing guidance on the presentation of unrecognized tax benefits and will better reflect the manner in which an entity would settle at the reporting date any additional income taxes that would result from the disallowance of a tax position when net operating loss carryforwards, similar tax losses, or tax credit carryforwards exist. The amendments in this update should be applied prospectively for annual and interim periods beginning after December 15, 2013. The adoption of ASU 2013-11 did not have a material effect on the Company’s consolidated financial statements. | ||||||||
In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers.” The amendments in ASU 2014-09 affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (e.g., insurance contracts or lease contracts). This ASU will supersede the revenue recognition requirements in ASC 605, “Revenue Recognition,” and most industry-specific guidance, and creates an ASC 606, “Revenue from Contracts with Customers.” The core principle of the guidance is that an entity should 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. To achieve that core principle, an entity should apply the following steps: | ||||||||
Step 1: Identify the contract(s) with a customer. | ||||||||
Step 2: Identify the performance obligations in the contract. | ||||||||
Step 3: Determine the transaction price. | ||||||||
Step 4: Allocate the transaction price to the performance obligations in the contract. | ||||||||
Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation. | ||||||||
ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. The Company’s has not yet determined the effect to the current consolidated financial statements by the adoption of ASU 2014-09. | ||||||||
In August 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements Going Concern (Subtopic 205-40) – Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.” Currently, there is no guidance in U.S. GAAP about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern or to provide related footnote disclosures. The amendments in this Update provide that guidance. In doing so, the amendments are intended to reduce diversity in the timing and content of footnote disclosures. The amendments require management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management’s plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). The amendments in this Update are effective for public and nonpublic entities for annual periods ending after December 15, 2016 and early adoption is permitted. | ||||||||
Management does not believe that any other recently issued, but not yet effective, accounting standard if currently adopted would have a material effect on the accompanying financial statements. |
INTANGIBLE_ASSETS
INTANGIBLE ASSETS | 12 Months Ended |
Sep. 30, 2014 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLES ASSETS | In July 2010, the Company entered into an agreement with Lonza to purchase an exclusive license to use certain proprietary know-how and information necessary to develop and seek approval by the FDA for the commercial sale of PermaDerm®. |
The Company made an initial payment of $3,000,000 to Lonza to purchase this exclusive know-how license and assistance in gaining FDA approval. In conjunction with Lonza, the Company's management intended to create and implement a strategy to conduct clinical trials and assemble and present relevant information and data in order to obtain the necessary approvals. The $3,000,000 payment was recorded as an intangible asset. | |
After prolonged negotiations, the Company has been unable to resolve contractual and other disputes with Lonza. As a result, on September 30, 2013, the Company filed a lawsuit against Lonza and related entities. The complaint alleges that Lonza determined it would make more money on PermaDerm® if it was not approved by the FDA and that Lonza used certain proprietary information, which the Company had purchased, for at least 13 other companies. The allegations also included that Lonza utilized threats and coercion, including false claims of breach of contract and securities violations, in order to terminate the exclusive know-how license. As a result, the Company received neither the exclusive know-how license that Lonza had promised nor the benefits of the exclusive know-how license. | |
For the year ended September 30, 2013, due to ongoing disputes and pending any settlement of the lawsuit, the Company determined that the value of the intangible asset and related intellectual property had been fully impaired. As a result, the Company wrote down the value of the intangible asset to $0. | |
In August 2010, the Company paid $7,500 and obtained the rights to the trademarks PermaDerm® and TempaDerm® from KJR-10 Corp. | |
At both September 30, 2014 and 2013, intangible assets totaled $7,500. | |
As discussed below in Note K, the Company sold its intangible assets on November 7, 2014. |
ACCRUED_EXPENSES
ACCRUED EXPENSES | 12 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Notes to Financial Statements | ||||||||
ACCRUED EXPENSES | Accrued expenses consisted of the following: | |||||||
September 30, | ||||||||
2014 | 2013 | |||||||
Registration penalty | $ | 250,203 | $ | 250,203 | ||||
Salaries and payroll taxes | 1,163,389 | 792,907 | ||||||
Professional fees | 216,472 | 166,802 | ||||||
Accrued dividends | 251,242 | 180,442 | ||||||
Interest | 110,026 | 84,648 | ||||||
$ | 1,991,332 | $ | 1,475,002 |
LOANS_PAYABLE
LOANS PAYABLE | 12 Months Ended |
Sep. 30, 2014 | |
Notes to Financial Statements | |
LOANS PAYABLE | Loan Payable: |
In February 2011, an investor advanced $10,000. The loan does not bear interest and is due on demand. At both September 30, 2014 and 2013, the loan payable totaled $10,000. | |
Loans Payable - Related Parties: | |
In October 2011 and again in May 2014, Craig Eagle, a director of the Company, advanced a total of $38,221 to the Company. The loans do not bear interest and are due on demand. At September 30, 2014 and 2013, the loan balance was $38,221 and $35,000, respectively. | |
During the year ended September 30, 2014, Randall McCoy, the Company’s Chief Executive Officer, made advances to the Company. The loans do not bear interest and are due on demand. At September 30, 2014 and 2013, the loan balance was $8,500 and $0, respectively. | |
John Weber, the Company’s Chief Financial Officer, has made advances to the Company. The loans do not bear interest and are due on demand. At September 30, 2014 and 2013, the loan balance was $122,100 and $28,100, respectively. | |
In March through September 2014 the Company received other advances totaling $35,696. The loans do not bear interest and are due on demand. At September 30, 2014 and 2013, the loan balances were $36,996 and $1,300, respectively. | |
At September 30, 2014 and 2013, loans payable - related parties totaled $205,817 and $64,400, respectively. |
NOTES_PAYABLE
NOTES PAYABLE | 12 Months Ended |
Sep. 30, 2014 | |
Notes to Financial Statements | |
NOTES PAYABLE | Note Payable - Insurance Financing: |
In August 2013, the Company renewed its policy and financed premiums totaling $57,892. The new note was payable over a nine-month term. At September 30, 2013, the balance owed under the note was $52,220. At September 30, 2014, the note was paid in full in accordance with the original terms | |
In September 2014, the Company financed certain insurance premiums totaling $51,613. The note requires an initial down payment of 10,322 and is payable over a nine-month term. At September 30, 2014, the balance owed under the note was $51,613. | |
Bridge Financing: | |
On December 21, 2011, the Company issued a $150,000 promissory note (“Note 2”) to an individual. Note 2 bore interest so that the Company would repay $175,000 on the maturity date of June 21, 2012, which correlated to an effective rate of 31.23%. Additional interest of 10% will be charged on any late payments. Note 2 was not paid at the maturity date and the Company is incurring additional interest described above. At both September 30, 2014 and 2013, the Note 2 balance was $175,000. | |
On January 18, 2012, the Company issued a $165,400 convertible promissory note (“Note 3”) to an individual. Note 3 bore interest at the rate of 5% per annum and was due on June 18, 2012. Note 3 and accrued interest thereon were convertible into units at a conversion price of $2.00 per unit. A unit consisted of one share of Series A Convertible Preferred Stock (“Series A Preferred”) and a warrant to purchase one-fourth (1/4), or 25% of one share of common stock. Upon maturity, Note 3 was not automatically converted and the Units were not issued. Instead, in October 2012, a new note was issued with a six month term. The new note bore interest at the rate of 8% per annum and the principal and accrued interest thereon were convertible into shares of common stock at a rate of $0.05 per share. In addition, at the date of conversion, the Company was to issue a two-year warrant to purchase an additional 500,000 shares of common stock at $0.10 per share. The warrant has not been issued. At maturity, the principal and interest automatically converted and the Company was supposed to issue 3,522,440 shares of common stock. As of September 30, 2014, the shares were not issued and were classified as common stock to be issued. At both September 30, 2014 and September 30, 2013, the Note 3 balance was $0. | |
On January 27, 2012, the Company issued a $149,290 convertible promissory note (“Note 4”) to an individual. Note 4 bore interest at the rate of 8% per annum and was due on March 31, 2012. Note 4 and accrued interest thereon were convertible into shares of common stock at a rate of $0.05 per share. In addition, the Company issued a warrant to purchase an additional 500,000 shares of common stock at $0.10 per share that expires on January 27, 2014. On March 31, 2012, Note 4 and the accrued interest became due and the Company was supposed to issue 3,027,683 shares of common stock. In May 2013, the Company issued the shares. At both September 30, 2014 and 2013, the Note 4 balance was $0. | |
In March 2012, the Company issued a series of convertible promissory notes (“Notes 5-9”) totaling $186,000 to four individuals. Notes 5-9 bore interest at the rate of 33% per annum and were due in August and September 2012. Notes 5-9 and accrued interest thereon were convertible into shares of common stock at the rate of $0.05 per share and automatically converted on the maturity dates unless paid sooner by the Company. At maturity, the principal and interest automatically converted and the Company was supposed to issue 4,335,598 shares of common stock. In December 2012, the Company issued 4,079,000 shares to the note holders of Notes 5, 6, 7 and 9. The unissued 256,598 shares for Note 8 are classified as common stock to be issued at September 30, 2014. At both September 30, 2014 and 2013, the Note 5-9 balances were $0. | |
In April 2012 through June 2012, the Company issued a series of convertible promissory notes (“Notes 10-18”) totaling $220,000 to nine individuals. Notes 10-18 bore interest at the rate of 33% per annum and were due in October through November 2012. Notes 10-18 and accrued interest thereon were convertible into shares of common stock at the rate of $0.05 per share and automatically converted on the maturity dates unless paid sooner by the Company. In December 2012, the Company issued 5,124,500 shares of its common stock for the conversion of principal and accrued interest through the various maturity dates of the notes. At both September 30, 2014 and 2013, the Note 10-18 balances were $0. | |
In April 2012, the Company issued a convertible promissory note (“Note 19”) totaling $25,000 to an individual for services previously rendered. Note 19 bore interest at the rate of 33% per annum and was due in October 2012. Note 19 and accrued interest thereon were convertible into shares of common stock at the rate of $0.05 per share and automatically converted on the maturity date unless paid sooner by the Company. In December 2012, the Company issued 582,500 shares of its common stock for the conversion of principal and accrued interest through the maturity date. At both September 30, 2014 and 2013, the Note 19 balance was $0. | |
In July 2012, the Company issued a series of convertible promissory notes (“Notes 20-22”) totaling $100,000 to three individuals. Notes 20-22 bore interest at the rate of 10% per annum and were due in December 2012 and January 2013. Notes 20-22 and accrued interest thereon were convertible into shares of common stock at the rate of $0.10 per share and automatically converted on the maturity dates unless paid sooner by the Company. For financial reporting purposes, the Company recorded discounts of $67,500 to reflect the beneficial conversion features. The discounts were amortized over the terms of Notes 20-22. In February 2013, the Company issued 1,050,000 shares of common stock for the conversion of Notes 20-22 and accrued interest thereon. At both September 30, 2014 and 2013, the Note 20-22 balances were $0. | |
In July 2012, the Company issued a convertible promissory note (“Note 23”) totaling $100,000 to an individual. Note 23 bore interest at the rate of 8% per annum and was due in January 2013. Note 23 and accrued interest thereon were convertible into shares of common stock at the rate of $0.05 per share and automatically converted on the maturity date, unless paid sooner by the Company. In addition, at the date of conversion, the Company was to issue a two-year warrant to purchase an additional 500,000 shares of common stock at $0.10 per share. The warrant has not been issued. For financial reporting purposes, the Company recorded a discount of $100,000 to reflect the beneficial conversion feature. The discount was amortized over the term of the Note. In January 2013, the Company issued 2,080,000 shares of common stock for the conversion of Note 23 and accrued interest thereon. At both September 30, 2014 and 2013, the Note 23 balance was $0. | |
In December 2012, the Company issued a convertible promissory note (“Note 24”) totaling $100,000 to an individual. Note 24 bore interest at the rate of 8% per annum and was due in June 2013. Note 24 and accrued interest thereon were convertible into shares of common stock at the rate of $0.05 per share and automatically converted on the maturity date, unless paid sooner by the Company. In addition, at the date of conversion, the Company was to issue a two-year warrant to purchase an additional 500,000 shares of common stock at $0.10 per share. The warrant has not been issued. For financial reporting purposes, the Company recorded a discount of $100,000 to reflect the beneficial conversion feature. The discount was amortized over the term of Note 24. At maturity, the principal and interest automatically converted and the Company was supposed to issue 2,089,880 shares of common stock. As of September 30, 2014, the shares were not issued and were classified as common stock to be issued. The warrant has not been issued as of the date of the issuance of the consolidated financial statements. At both September 30, 2014 and 2013, the Note 24 balance was $0. | |
In January 2013, the Company issued a convertible promissory note (“Note 25”) totaling $35,000 to an individual. Note 25 bore interest at the rate of 8% per annum and was due in July 2013. Note 25 and accrued interest thereon were convertible into shares of common stock at the rate of $0.05 per share and automatically converted on the maturity date unless paid sooner by the Company. In addition, at the date of conversion, the Company was to issue a two-year warrant to purchase an additional 175,000 shares of common stock at $0.50 per share. The warrant has not been issued. For financial reporting purposes, the Company recorded a discount of $21,000 to reflect the value of the beneficial conversion feature. The value of the warrant was not recorded as the value was deemed to be immaterial. The discount was amortized over the term of Note 25. On August 1, 2013, the Company issued 728,000 shares of common stock for the conversion of principal and accrued interest through the date of maturity. The warrant has not been issued as of the issuance of the consolidated financial statements. At both September 30, 2014 and 2013, the Note 25 balance was $0. | |
In March 2013, the Company issued a convertible promissory note (“Note 26”) totaling $25,000 to an individual. Note 26 bore interest at the rate of 8% per annum and was due in September 2013. Note 26 and accrued interest thereon were convertible into shares of common stock at the rate of $0.05 per share and automatically converted on the maturity date unless paid sooner by the Company. In addition, at the date of conversion, the Company was to issue a one-year warrant to purchase an additional 640,000 shares of common stock at $0.001 per share. For financial reporting purposes, the Company recorded a discount of $14,507 to reflect the value of the warrant and a discount of $10,493 to reflect the value of the beneficial conversion feature. The discounts were amortized over the term of Note 26. On February 28, 2014, the Company issued 520,000 shares of common stock for the conversion of principal and accrued interest through the date of maturity. The warrant was issued in December 2013 and was exercised on December 24, 2013. At both September 30, 2014 and 2013, the Note 26 balance was $0. | |
In April 2013, the Company issued a convertible promissory note (“Note 27”) totaling $15,000 to an individual. Note 27 bore interest at the rate of 8% per annum and was due in September 2013. Note 27 and accrued interest thereon were convertible into shares of common stock at the rate of $0.05 per share and automatically converted on the maturity date unless paid sooner by the Company. For financial reporting purposes, the Company recorded a discount of $1,500 to reflect the beneficial conversion feature. The discount was amortized over the term of Note 27. On February 28, 2014, the Company issued 312,000 shares of common stock for the conversion of principal and accrued interest through the date of maturity. At both September 30, 2014 and 2013, the Note 27 balance was $0. | |
In April 2013, the Company issued a convertible promissory note (“Note 28”) totaling $25,000 to an individual. Note 28 bears interest at the rate of 8% per annum and was due in October 2013. Note 28 and accrued interest thereon were convertible into shares of common stock at the rate of $0.05 per share and automatically converted on the maturity date unless paid sooner by the Company. For financial reporting purposes, the Company recorded a discount of $10,000 to reflect the beneficial conversion feature. The discount was amortized over the term of Note 28. On February 28, 2014, the Company issued 520,000 shares of common stock for the conversion of principal and accrued interest through the date of maturity. At both September 30, 2014 and 2013, the Note 28 balance was $0 and $25,000, respectively. | |
In May 2013, the Company issued a convertible promissory note (“Note 29”) totaling $25,000 to an individual. Note 29 bore interest at the rate of 8% per annum and was due in November 2013. Note 29 and accrued interest thereon were convertible into shares of common stock at the rate of $0.05 per share and automatically converted on the maturity date unless paid sooner by the Company. The Company did not record a discount for the conversion feature as the conversion price was greater than the price of the common stock on the issuance date. At maturity, the principal and interest were scheduled to convert to 520,055 shares of common stock but the individual waived the conversion of the principal and accrued interest. At both September 30, 2014 and 2013, the Note 29 balance was $25,000. | |
In June 2013, the Company issued convertible promissory notes (“Notes 30-31”) totaling $30,000 to two individuals. The notes bore interest at the rate of 8% per annum and were due in December 2013. The principal and accrued interest thereon were convertible into shares of common stock at the rate of $0.05 per share and automatically converted on the maturity dates unless paid sooner by the Company. In addition, at the date of conversion, the Company was to issue two-year warrants to purchase an additional 150,000 shares of common stock at $0.50 per share. The warrants have not been issued. For financial reporting purposes, the Company recorded discounts of $3,451 to reflect the value of the warrants but did not record discounts for the conversion features as the conversion prices were greater than the stock prices at the issuance dates. The discounts are being amortized over the terms of Notes 30-31. At maturity, the principal and interest automatically converted and the Company was supposed to issue 624,066 shares of common stock. As of September 30, 2014, the shares were not issued and were classified as common stock to be issued. At September 30, 2014, the Note 30-31 balances were $0. At September 30, 2013, the Notes 30-31 balances were $28,774, net of debt discounts of $1,226. | |
In June 2013, the Company issued a convertible promissory note (“Note 31A”) totaling $25,000 to an individual. The note bore interest at the rate of 8% per annum and was due in December 2013. The principal and accrued interest thereon were convertible into shares of common stock at the rate of $0.05 per share and automatically converted on the maturity date unless paid sooner by the Company. In addition, at the date of conversion, the Company was to issue a one-year warrant to purchase an additional 320,000 shares of common stock at $0.001 per share. For financial reporting purposes, the Company recorded a discount of $5,116 to reflect the value of the warrants but did not record a discount for the conversion feature as the conversion price was greater than the stock price at the issuance date. The discount was amortized over the term of Note 31A. On February 7, 2014, the Company issued 520,000 shares of common stock for the conversion of principal and accrued interest through the date of maturity. The warrant was exercised on February 7, 2014. At September 30, 2014 and 2013, the Note 31A balance was $0 and $25,000, respectively. | |
In July 2013, the Company issued convertible promissory notes (“Note 32-34”) totaling $35,000 to three individuals. The notes bore interest at the rate of 8% per annum and were due in January 2014. The principal and accrued interest thereon were convertible into shares of common stock at the rate of $0.05 per share and automatically converted on the maturity dates unless paid sooner by the Company. The Company did not record discounts for the conversion features as the conversion prices were greater than the prices of the common stock on the issuance dates. In February and March 2014, the Company issued 728,000 shares of common stock for the conversion of principal and accrued interest through the date of maturity. At September 30, 2014 and 2013, the Notes 32-34 balances were $0 and $35,000, respectively. | |
In August 2013, the Company issued convertible promissory notes (“Note 35-36”) totaling $250,000 to two individuals. The notes bear interest at the rate of 8% per annum and are due in August 2014. The principal and accrued interest thereon are convertible into shares of common stock at the rate of $0.03 per share and automatically convert on the maturity dates unless paid sooner by the Company. The Company did not record discounts for the conversion features as the conversion prices were greater than the prices of the common stock on the issuance dates. At maturity, the principal and interest were scheduled to automatically convert into 4,500,000 shares of common stock but the individuals waived the conversion of the principal and accrued interest. At both September 30, 2014 and 2013, the Notes 35-36 balances were $250,000. | |
On December 31, 2013, the Company issued a convertible promissory note (“Note 37”) totaling $75,000 to an individual. The note bore interest at the rate of 8% per annum and was due in May 2014. The principal and accrued interest thereon were convertible into shares of common stock at the rate of $0.02 per share and automatically converted on the maturity date unless paid sooner by the Company. In addition, at the date of conversion, the Company was to issue a two-year warrant to purchase an additional 937,500 shares of common stock at $0.25 per share. The warrant has not been issued. For financial reporting purposes, the Company recorded discounts of $20,455 to reflect the value of the warrant and a discount of $54,545 to reflect the value of the beneficial conversion feature. The discount was amortized over the term of Note 37. At maturity, the principal and interest automatically converted and the Company was supposed to issue 3,874,110 shares of common stock. As of September 30, 2014, the shares were not issued and were classified as common stock to be issued. At September 30, 2014, the Note 37 balance was $0. | |
Convertible Promissory Note: | |
In October 2012, the Company issued a promissory note to a financial institution (the “Lender”) to borrow up to a maximum of $225,000. The note bears interest so that the Company would repay a maximum of $250,000 at maturity, which correlated to an effective rate of 10.59%. In October 2012, the Company received $50,000 upon the signing of the note and then in January through September 2013, the Company received additional proceeds totaling $100,000. In February 2014 the Company received an additional $25,000. Material terms of the note include the following: | |
1. The Lender may make additional loans in such amounts and at such dates at its sole discretion. | |
2. The maturity date of each loan is one year after such loan is received. | |
3. The original interest discount is prorated to each loan received. | |
4. Principal and accrued interest is convertible into shares of the Company’s common stock at the lesser of $0.069 or 65%-70% (as defined) of the lowest trading price in the 25 trading days previous to the conversion. | |
5. Unless otherwise agreed to in writing by both parties, at no time can the Lender convert any amount of the principal and/or accrued interest owed into common stock that would result in the Lender owning more than 4.99% of the common stock outstanding. | |
6. There is a one-time interest payment of 10% of amounts borrowed that is due at the maturity date of each loan. | |
7. At all times during which the note is convertible, the Company shall reserve from its authorized and unissued common stock to provide for the issuance of common stock under the full conversion of the promissory note. The Company will at all times reserve at least 13,000,000 shares of its common stock for conversion. | |
8. The Company agreed to include on its next registration statement it files, all shares issuable upon conversion of balances due under the promissory note. Failure to do so would result in liquidating damages of 25% of the outstanding principal balance of the promissory note but not less than $25,000. | |
The Company is accreting the original issue discount (“OID”) on the initial loan over the life of the loan using the effective interest method. For the year ended September 30, 2014 and 2013, the accretion amounted to $5,450 and $8,405, respectively. | |
The conversion feature contained in the promissory note is considered to be an embedded derivative. The Company bifurcated the conversion feature and recorded a derivative liability on the consolidated balance sheet. The Company recorded the derivative liability equal to its estimated fair value. Such amount was also recorded as a discount to the convertible promissory note and is being amortized to interest expense using the effective interest method. For the year ended September 30, 2014 and 2013, amortization of the debt discount amounted to $64,675 and $64,125, respectively. At September 30, 2014 and 2013, the unamortized discount is $7,675 and $72,348, respectively. | |
The Company is required to mark-to-market the derivative liability at the end of each reporting period. For the year ended September 30, 2014 and 2013, the Company recorded a loss on the change in fair value of the conversion option of $76,149 and $60,559, respectively and as of September 30, 2014 and 2013, the fair value of the conversion option was $5,163 and $213,858, respectively. | |
In May 2013, the Company issued a convertible promissory note totaling $293,700 to Clark Corporate Law Group LLP (“CCLG”) in lieu of amounts payable. The note bears interest at the rate of 12% per annum and was originally due November 21, 2013. The maturity date of the note was extended to February 21, 2014 and extended again to August 31, 2014. The note is secured by all of the assets of the Company. The note and accrued interest are convertible into shares of common stock at a conversion rate of the lower of $0.04 per share or 80% of the average of the lowest three trading prices in the 20 trading days previous to the conversion but the number of shares that can be issued is limited as defined in the note agreement. In addition, the Company issued a five-year warrant to purchase an additional 50,000 shares of common stock at a per share exercise price of the lower of $0.04 per share or 80% of the average of the lowest three trading prices in the 20 trading days previous to the conversion. The note was not paid at the maturity date but no action was taken by CCLG. For the period from October 1, 2014 through January 12, 2015, the Company paid $200,000 of principal and accrued interest. See Note K. | |
The conversion features contained in the promissory note and the warrant are considered to be embedded derivatives. The Company bifurcated the conversion features and recorded derivative liabilities on the consolidated balance sheet. The Company recorded the derivative liabilities equal to their estimated fair value of $153,300. Such amount was also recorded as a discount to the convertible promissory note and was amortized to interest expense using the effective interest method. For the year ended September 30, 2014 and 2013, amortization of the debt discount amounted to $64,104 and $89,195, respectively. At September 30, 2014 and 2013, the unamortized discount is $-0- and $64,104, respectively | |
The Company is required to mark-to-market the derivative liabilities at the end of each reporting period. For the year ended September 30, 2014 and 2013, the Company recorded a gain (loss) on the change in fair value of the conversion option of $193,247 and $(60,559), respectively, and as of September 30, 2014 and 2013, the fair value of the conversion option was $-0- and $213,858, respectively. | |
At September 30, 2014 and 2013, the balance of the convertible note was $293,700 and $229,596 net of the debt discount of $-0- and $64,105, respectively. |
RELATED_PARTY_TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Sep. 30, 2014 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | Officers: |
The Company’s principal executive offices are located in Little Falls, New Jersey. The headquarters is located in the offices of McCoy Enterprises LLC, an entity controlled by Mr. McCoy. The office is attached to his residence but has its own entrances, restroom and kitchen facilities. | |
The Company also maintains an office in Pennington, New Jersey, which is the materials and testing laboratory. This office is owned by Materials Testing Laboratory, and the principal is an employee of the Company. | |
No rent is charged for either premise. |
INCOME_TAXES
INCOME TAXES | 12 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Income Tax Disclosure [Abstract] | ||||||||
INCOME TAXES | The Company did not incur current tax expense for both the years ended September 30, 2014 and 2013. | |||||||
At September 30, 2014, the Company had available approximately $7.1 million of net operating loss carry forwards which expire in the years 2028 through 2033. | ||||||||
The provision for income tax benefits of $2,440,000 for the year ended September 30, 2014 represents deferred taxes. There was no provision for the year ended September 30, 2013. | ||||||||
Significant components of the Company’s deferred tax assets at September 30, 2014 and 2013 are as follows: | ||||||||
2014 | 2013 | |||||||
Net operating loss carry forwards | $ | 2,850,535 | $ | 2,698,087 | ||||
Intangible assets | 1,200,000 | 1,200,000 | ||||||
Stock based compensation | 355,265 | 355,265 | ||||||
Accrued expenses | 539,912 | 396,232 | ||||||
Total deferred tax assets | 4,945,712 | 4,649,584 | ||||||
Valuation allowance | (2,116,712 | ) | (4,649,584 | ) | ||||
Net deferred tax assets | $ | 2,829,000 | $ | — | ||||
Due to the uncertainty of their realization, a valuation allowance has been established for a portion of the income tax benefit for these deferred tax assets. The decrease in the valuation allowance was the result of the estimated tax benefits that will result from the Sale Agreement (see Note K). | ||||||||
The following is a reconciliation of the Company’s income tax rate using the federal statutory rate to the actual income tax rate as of September 30, 2014 and 2013: | ||||||||
2014 | 2013 | |||||||
Federal tax rate | (34 | )% | (34 | )% | ||||
Effect of state taxes | (6 | )% | (6 | )% | ||||
Reversal of valuation allowance | 412 | % | 0 | % | ||||
Permanent differences | 3 | % | 5 | % | ||||
Net operating loss carry forward | 37 | % | 35 | % | ||||
Total | 412 | % | 0 | % | ||||
At September 30, 2014 and 2013, the Company had no material unrecognized tax benefits and no adjustments to liabilities or operations were required. The Company does not expect that its unrecognized tax benefits will materially increase within the next twelve months. The Company recognizes interest and penalties related to uncertain tax positions in general and administrative expense. As of September 30, 2014 and 2013, the Company has not recorded any provisions for accrued interest and penalties related to uncertain tax positions. | ||||||||
The Company files its federal income tax returns under a statute of limitations. The 2011 through 2014 tax years generally remain subject to examination by federal tax authorities. The Company has not filed any of its state income tax returns since inception. Due to recurring losses, management believes that once such returns are filed, the Company would incur state minimum tax liabilities that were not deemed material to accrue. |
STOCKHOLDERS_DEFICIENCY_EQUITY
STOCKHOLDERS (DEFICIENCY) EQUITY | 12 Months Ended | ||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||
STOCKHOLDERS (DEFICIENCY) EQUITY | Preferred Stock: | ||||||||||||||||||||||
Series A | |||||||||||||||||||||||
Series A Preferred pays a dividend of 8% per annum on the stated value and has a liquidation preference equal to the stated value of the shares. Each share of Preferred Stock has an initial stated value of $1 and was convertible into shares of the Company’s common stock at the rate of 10 for 1. Series A Preferred contains a full ratchet anti-dilution feature on the shares of common stock underlying the Series A Preferred for three years on any stock issued below $0.10 per share with the exception of shares issued in a merger or acquisition. As the Company issued common stock at $0.02 per share for the conversion of debt in May 2014, the conversion rate for the Series A Preferred is now 50 to 1. | |||||||||||||||||||||||
The dividends are cumulative commencing on the issue date whether or not declared. Dividends amounted to $70,800 and $46,198 for the years ended September 30, 2014 and 2013, respectively. At September 30, 2014 and 2013, dividends payable totaled $251,242 and $180,442, respectively, and are included in accrued expenses. | |||||||||||||||||||||||
At both September 30, 2014 and 2013, 885,000 shares of Series A Preferred were outstanding. | |||||||||||||||||||||||
Series B | |||||||||||||||||||||||
On January 23, 2012, the Company designated a new class of preferred stock called Series B Convertible Preferred Stock (“Series B Preferred”). Four million shares have been authorized with a liquidation preference of $2.00 per share. Each share of Series B Preferred is convertible into ten shares of common stock. Holders of Series B Convertible Preferred Stock have a right to a dividend (pro-rata to each holder) based on a percentage of the gross revenue earned by the Company in the United States, if any, and the number of outstanding shares of Series B Convertible Preferred Stock, as follows: Year 1 - Total Dividend to all Series B holders =03 x Gross Revenue in the U.S. Year 2 - Total Dividend to all Series B holders =02 x Gross Revenue in the U.S. Year 3 - Total Dividend to all Series B holders =01 x Gross Revenue in the U.S. At September 30, 2014, no shares of Series B Preferred are outstanding. | |||||||||||||||||||||||
Common Stock Issuances: | |||||||||||||||||||||||
2013 Transactions | |||||||||||||||||||||||
1. On December 18, 2012, we issued 801,000 shares of our common stock as a finder's fee to an entity for introducing investors and/or lenders who provided funding to us. The shares were valued at $89,370. | |||||||||||||||||||||||
2. The Company issued 16,671,685 shares of its common stock for the conversion of notes payable issued under the Bridge Financing and accrued interest. | |||||||||||||||||||||||
3. The Company issued 8,850,000 shares of common stock for the conversion of principal and accreted interest owed to the Lender. | |||||||||||||||||||||||
2014 Transactions | |||||||||||||||||||||||
1. The Company issued 2,600,000 shares of its common stock for the conversion of notes payable issued under the Bridge Financing and accrued interest. | |||||||||||||||||||||||
2. The Company issued 14,840,392 shares of common stock for the conversion of principal and accreted interest owed to the Lender. | |||||||||||||||||||||||
3. For the year ended September 30, 2014 the Company issued 960,000 shares of common stock for the exercise of a warrant. | |||||||||||||||||||||||
4. On December 24, 2013, the Company issued 1,038,751 shares of its common stock as a finder’s fee to an entity for introducing investors and/or lenders who provided funding to the Company in fiscal 2013. The shares were valued at $35,851. | |||||||||||||||||||||||
2010 Incentive Plan: | |||||||||||||||||||||||
On December 15, 2010, the board of directors approved the Regenicin, Inc. 2010 Incentive Plan (the “Plan”). The Plan provides for the granting of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock, stock units, performance shares and performance units to the Company’s employees, officers, directors and consultants, including incentive stock options, non-qualified stock options, restricted stock, and other benefits. The Plan provides for the issuance of up to 4,428,360 shares of the Company’s common stock. | |||||||||||||||||||||||
On January 6, 2011, the Company approved the issuance of 885,672 options to each of the four members of the board of directors at an exercise price of $0.62 per share. The options originally vested over a three-year period and expire on December 22, 2015. On May 11, 2011, the terms of the options were amended to allow for immediate vesting. On December 10, 2013, the exercise price of the options was changed to $0.035 per share. As a result, the Company revalued the options as required under generally accepted accounting principles and recognized an expense of $27,556. The options were revalued utilizing the Black-Scholes option pricing model with the following assumptions: exercise price: $0.035 - $0.62; expected volatility: 20.71%; risk-free rate: 0.13% - 0.14%; expected term: 1 year. | |||||||||||||||||||||||
The expected life is the number of years that the Company estimates, based upon history, that warrants will be outstanding prior to exercise or forfeiture. Expected life is determined using the “simplified method” permitted by Staff Accounting Bulletin No. 107. The stock volatility factor is based on the Nasdaq Biotechnology Index. The Company did not use the volatility rate for Company’s common stock as the Company’s common stock had not been trading for the sufficient length of time to accurately compute its volatility when these options were issued. | |||||||||||||||||||||||
On December 18, 2012, the Company issued 801,000 shares of its common stock as a finder’s fee to an entity for introducing investors and/or lenders who provided funding to the Company. The shares were valued at $89,370. | |||||||||||||||||||||||
Stock based compensation amounted to $27,556 for the year ended September 30, 2014 and is included in general and administrative expenses. Stock based compensation amounted to $89,370 for the year ended September 30, 2013 and is included in interest expense. | |||||||||||||||||||||||
In addition, in November 2010, the Company issued 2,000,000 options to a consultant at an exercise price of $0.46 per share. The options vested immediately and expire in November 2015. | |||||||||||||||||||||||
Option activity for 2013 and 2014 is summarized as follows: | |||||||||||||||||||||||
Options | Weighted Average Exercise Price | ||||||||||||||||||||||
Options outstanding, October 1, 2012 | 5,542,688 | $ | 0.19 | ||||||||||||||||||||
Granted | — | — | |||||||||||||||||||||
Forfeited | — | — | |||||||||||||||||||||
Options outstanding, September 30, 2013 and 2014 | 5,542,688 | $ | 0.19 | ||||||||||||||||||||
Aggregate intrinsic value | $ | — | |||||||||||||||||||||
The aggregate intrinsic value was calculated based on the positive difference between the closing market price of the Company’s Common Stock and the exercise price of the underlying options. | |||||||||||||||||||||||
The following table summarizes information regarding stock options outstanding at September 30, 2014: | |||||||||||||||||||||||
Weighted Average Remaining | Options Exercisable Weighted Average | ||||||||||||||||||||||
Ranges of prices | Number | Contractual | Exercise | Number | Exercise | ||||||||||||||||||
Outstanding | Life | Price | Exercisable | Price | |||||||||||||||||||
$ | 0.035 | 3,542,688 | 1.27 | $ | 0.035 | 3,542,688 | $ | 0.035 | |||||||||||||||
$ | 0.46 | 2,000,000 | 1.14 | 0.46 | 2,000,000 | 0.46 | |||||||||||||||||
$0.035-$0.46 | 5,542,688 | 1.22 | $ | 0.19 | 5,542,688 | $ | 0.19 | ||||||||||||||||
There were no option grants in 2013 or 2014. | |||||||||||||||||||||||
As of September 30, 2014, there was no unrecognized compensation cost related to non-vested options granted. | |||||||||||||||||||||||
Warrants: | |||||||||||||||||||||||
In fiscal 2013 in connection with the issuance of convertible notes the Company issued warrants to purchase 2,365,000 shares of common stock at a per share exercise prices ranging from $0.001 to $0.50. | |||||||||||||||||||||||
These warrants were valued utilizing a Black-Scholes option pricing model with the following assumptions: exercise price: $0.001 - $0.50; expected volatility: 13.43%; risk-free rate: 0.14%; expected term: 1 - 5 years. | |||||||||||||||||||||||
In fiscal 2014 in connection with the issuance of convertible notes the Company issued warrants to purchase 1,407,500 shares of common stock at a per share exercise prices ranging from $0.001 to $0.50. | |||||||||||||||||||||||
These warrants were valued utilizing a Black-Scholes option pricing model with the following assumptions: exercise price: $0.001 - $0.50; expected volatility: 20.88%; risk-free rate: 0.11% - 0.13%; expected term: .5 year - 1year. | |||||||||||||||||||||||
The expected life is the number of years that the Company estimates, based upon history, that warrants will be outstanding prior to exercise or forfeiture. Expected life is determined using the “simplified method” permitted by Staff Accounting Bulletin No. 107. The stock volatility factor is based on the Nasdaq Biotechnology Index. The Company did not use the volatility rate for Company’s common stock as the Company’s common stock had not been trading for the sufficient length of time to accurately compute its volatility when these options were issued. | |||||||||||||||||||||||
A summary of the warrants outstanding at September 30, 2014 is as follows: | |||||||||||||||||||||||
Exercise | Expiration | ||||||||||||||||||||||
Warrants | Price | Date | |||||||||||||||||||||
50,000 | Various | 2018 | |||||||||||||||||||||
1,500,000 | $ | 0.1 | 2015 | ||||||||||||||||||||
672,500 | $ | 0.15 | 2018 | ||||||||||||||||||||
937,500 | $ | 0.25 | 2016 | ||||||||||||||||||||
325,000 | $ | 0.5 | 2015 | ||||||||||||||||||||
10,000 | $ | 0.75 | 2016 | ||||||||||||||||||||
49,500 | $ | 1 | 2015 | ||||||||||||||||||||
66,667 | $ | 1.5 | 2016 | ||||||||||||||||||||
3,611,667 | |||||||||||||||||||||||
Registration Penalties: | |||||||||||||||||||||||
On August 16, 2010, the Company sold 4,035,524 shares of common stock as part of a Securities Purchase Agreement with certain accredited investors (the “Purchasers”) pursuant to the closing of the Private Placement Offering (the “Offering”). | |||||||||||||||||||||||
Pursuant to a Registration Rights Agreement that accompanied the Securities Purchase Agreement, the Company agreed to file an initial registration statement covering the resale of the common stock no later than 45 days from the closing of the Offering and to have such registration statement declared effective no later than 180 days from filing of the registration statement. If the Company did not timely file the registration statement, cause it to be declared effective by the required date, or maintain the filing, then each Purchaser in the offering was entitled to liquidated damages equal to 1% of the aggregate purchase price paid by such Purchaser for the securities, and an additional 1% for each month that the Company did not file the registration statement, cause it to be declared effective, or fail to maintain the filing (subject to a maximum penalty of 10% of the aggregate purchase price). The Offering closed on August 16, 2010. The Company did not file an initial registration statement and accrued liquidating damages from October 1, 2010. Registration penalties totaled $250,203 for the year ended September 30, 2011. The registration penalties have not been paid and are included in accrued expenses in the consolidated balance sheets as of September 30, 2014 and 2013. No actions have been taken by the investors to collect the penalty. |
CONTINGENCY
CONTINGENCY | 12 Months Ended |
Sep. 30, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | |
CONTINGENCY | Lonza Transaction: |
The Company entered into the Know-How SPA with Lonza Walkersville on July 21, 2010. Pursuant to the terms of the Know-How SPA, the Company paid Lonza Walkersville $3,000,000 and, in exchange, the Company was to receive an exclusive license to use certain proprietary know-how and information necessary to develop and seek approval by the FDA for the commercial sale of the Cutanogen technology. Additionally, pursuant to the terms of the Know-How SPA, the Company was entitled to receive certain related assistance and support from Lonza Walkersville upon payment of the $3,000,000. Under the Know-How SPA, once FDA approval was secured for the commercial sale of the technology, the Company would be entitled to acquire Cutanogen, Lonza Walkersville’s subsidiary, for $2,000,000 in cash. | |
On September 30, 2013, the Company filed a lawsuit against the Defendant in Fulton County Superior Court in the State of Georgia. | |
The Company continued to negotiate for almost six months after Lonza paid the previous shareholders of Cutanogen to settle their lawsuit. The Company attempted to acquire the Cutanogen technology from Lonza in lieu of a license but to no avail. The Company has retained a national law firm to represent its interests in this case. | |
In the complaint, the Company alleged that it entered into a Know-How SPA with Lonza Walkersville, on July 21, 2010. Pursuant to the terms of the Know-How SPA, the Company paid Lonza Walkersville $3,000,000 and, in exchange, the Company was to receive an exclusive license to use certain proprietary know-how and information necessary to develop and seek approval by the FDA. Under the Know-How SPA, once FDA approval was secured for the commercial sale of the technology, the Company would be entitled to acquire Cutanogen, Lonza Walkersville’s subsidiary, for $2,000,000 in cash. | |
However, as the Company alleges in the complaint, the Company believes the Defendant determined that it would make more money on the Cutanogen technology if it was not approved by the FDA and, unbeknownst to the Company, the Company believes Lonza Walkersville never intended to fulfill its obligations under the Know-How SPA. In this regard, the Company alleges in the complaint that Lonza Walkersville used certain proprietary know-how and information for at least thirteen (13) other companies. The Company alleges in the complaint that this is the same certain proprietary know-how and information the Company had purchased for $3 million under the exclusive Know-How SPA. | |
Further, as the Company alleges in the complaint, the Defendant utilized threats and coercion against the Company throughout the contract term, including false claims of breach and securities violations, in order to attempt to terminate the Know-How SPA unilaterally. As a result, the Company received neither the exclusive license the Defendant had promised, nor the benefit of the exclusive proprietary know-how. Therefore, the Company alleges in the complaint that, because of the Defendant’s breaches and tortious conduct, the Company lost the fees paid to the Defendant, which the Defendant did not earn, and suffered consequential damages and lost opportunities. In addition, the Company did not receive compensation from Lonza Walkersville for the time spent working on the Armed Forces Institute of Regenitive Medicine (AFIRM) grant, nor the time spent working on the Department of Defense (DOD) contract, which the Company was contractually supposed to be paid. The Company also will not receive the expected financial benefit from the DOD contract to help offset the cost of the clinical trials going forward. Lonza’s failure to secure a renewal of the DOD contract will have a significant financial impact on the Company. It should also be noted that the $3 million initially paid to Lonza, which was recorded as an intangible asset, has been fully written off in the accompanying consolidated financial statements as of September 30, 2013. | |
The case has been removed to the United States District Court for the Northern District of Georgia by the Defendant. In conjunction with its removal of the litigation, the Defendant filed a motion asking the Federal Court to either dismiss the complaint or to require the Company to file additional details providing more specific information about the Company’s claims. The Company has opposed that motion and filed its own motion asking the Federal Court to remand the case back to the Fulton County Superior Court. | |
The case was then transferred from Georgia to New Jersey for the convenience of the majority of the witnesses in the case and because the Court found that New Jersey had more significant and stronger ties to the parties than Georgia. In 2013, the Defendant filed a Motion to Dismiss. In February 2014, the Company successfully defeated the Defendant’s Motion to Dismiss. In the February 2014 Order, the Court noted that “[a]fter a single reading of the complaint the Court was able to understand Regenicin’s general averments.” The Court further stated, “[c]onsidering their relationship and Regenicin’s numerous allegations, a lengthy pleading is probably unavoidable.” The Court then ordered the Company to amend the Complaint and noted, “[t]here are three Defendants in this action, and Regenicin must be more specific in ascribing its allegations among them Regenicin must replead its complaint to attribute its allegations to specific Defendants.” In accordance with the February 2014 Order, the Company amended its Complaint to add additional details regarding the various misrepresentations that each Lonza entity allegedly made to Regenicin. A month later, the Defendant filed a Second Motion to Dismiss. The Company responded in opposition to the Defendant’s Second Motion to Dismiss and is awaiting the New Jersey District Court’s ruling on the Motion. The Company files notices of appearance and pro hac admissions of New Jersey counsel. | |
On November 7, 2014, the Company sold all of its rights and claims in this lawsuit to Amarantus (see Note K). |
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 12 Months Ended | ||
Sep. 30, 2014 | |||
Subsequent Events [Abstract] | |||
SUBSEQUENT EVENTS | On November 7, 2014, the Company entered into a Sale Agreement with Amarantus, CCLG and Gordon & Rees, LLP (“Gordon & Rees”). Under the Sale Agreement, the Company agreed to sell to Amarantus: all of its rights and claims in the litigation currently pending in the United States District Court for the District of New Jersey against Lonza Walkersville and Lonza America, Inc. These include all of the Cutanagen intellectual property rights and any Lonza manufacturing know-how technology. In addition, they have agreed to sell their PermaDerm® trademark and related intellectual property rights associated with it. The purchase price to be paid by Amarantus will consist of: (i) $3,500,000 in cash, and (ii) shares of common stock in Amarantus having a value of $3,000,000. A portion of the cash purchase price has been allocated to repay debt. | ||
The cash portion of the sale price will be paid as follows: | |||
1 | $300,000 to the Company and $200,000 to CCLG at closing. Both amounts were received. | ||
2 | $150,000 to the Company and $100,000 to CCLG on or before December 31, 2014. The Company received the $150,000. | ||
3 | $2,550,000 to the Company and $200,000 to CCLG on January 31, 2015. | ||
The payments to CCLG, when completed, will satisfy in full the obligations owed to CCLG under its secured promissory note. The $3,000,000 in Amarantus common stock was satisfied by the issuance of 37,500,000 shares of Amarantus common stock from Amarantus to the Company. In addition to the sale price, Amarantus will pay Gordon & Rees $450,000 at closing. The payment to Gordon & Rees will satisfy in full all obligations for litigation fees and costs owed to Gordon & Rees in connection with the Lonza Litigation. | |||
In addition, the Company granted to Amarantus an exclusive five (5) year option to license any engineered skin designed for the treatment of patients designated as severely burned by the FDA developed by the Company. Amrantus can exercise this option at a cost of $10,000,000 plus a royalty of 5% on gross revenues in excess of $150 million. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Accounting Policies [Abstract] | ||||||||
Principles of Consolidation | The accompanying consolidated financial statements include the accounts of Regenicin and its wholly-owned subsidiary. All significant inter-company balances and transactions have been eliminated. | |||||||
Going Concern | The Company's consolidated financial statements have been prepared assuming that the Company will continue as a going concern which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company has incurred cumulative losses of approximately $11 million from inception, expects to incur further losses in the development of its business and has been dependent on funding operations through the issuance of convertible debt and private sale of equity securities. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management's plans include continuing to finance operations through the private or public placement of debt and/or equity securities and the reduction of expenditures. In addition, the Company intends on using the proceeds from the Asset Sale to fund operations. However, no assurance can be given at this time as to whether the Company will be able to achieve these objectives. The consolidated financial statements do not include any adjustment relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. | |||||||
Development Stage Activities and Operations | In June 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-10, “Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation” (“ASU 2014-10”). ASU 2014-10 eliminates the distinction of a development stage entity and certain related disclosure requirements, including the elimination of inception-to-date information on the statements of operations, cash flows and stockholders’ deficiency. The amendments in ASU 2014-10 will be effective prospectively for annual reporting periods beginning after December 15, 2014, and interim periods within those annual periods, however, early adoption is permitted. The Company evaluated and adopted ASU 2014-10 for the reporting period ended June 30, 2014. The Company’s consolidated financial statements will be impacted by the adoption of ASU 2014-10 primarily by the removal of inception-to-date information in the Company’s consolidated statements of operations, cash flows, and stockholders’ deficiency. | |||||||
Intangible assets | Intangible assets, which include purchased licenses, patents and patent rights, are stated at cost and will be amortized using the straight-line method over their useful lives based upon the pattern in which the expected benefits will be realized, or on a straight-line basis, whichever is greater (see Note C). Such amortization will begin once the Company has a saleable product. As discussed below in Note L, the Company sold its intangible assets on November 7, 2014. | |||||||
The Company reviews intangible assets subject to amortization whenever events or changes in circumstances indicate that the carrying amount of such an asset may not be recoverable. Recoverability of these assets is measured by comparison of their carrying amount to the future undiscounted cash flows the assets are expected to generate. If such assets are considered impaired, the impairment to be recognized is equal to the amount by which the carrying value of the assets exceeds their fair value determined by either a quoted market price, if any, or a value determined by utilizing a discounted cash flow technique. In assessing recoverability, the Company must make assumptions regarding estimated future cash flows and discount factors. If these estimates or related assumptions change in the future, the Company may be required to record impairment charges. The Company recorded an impairment charge of $-0- and $3,000,000 in the years ended September 30, 2014 and 2013 (see Note C). | ||||||||
Research and development | Research and development costs are charged to expense as incurred. | |||||||
Loss per share | Basic income (loss) per share is computed by dividing the net income (loss) by the weighted average number of common shares outstanding during the period. Diluted loss per share give effect to dilutive convertible securities, options, warrants and other potential common stock outstanding during the period, only in periods in which such effect is dilutive. The following table summarizes the components of the income (loss) per common share calculation: | |||||||
Year Ended | ||||||||
September 30, | ||||||||
2014 | 2013 | |||||||
Income (Loss) Per Common Share – Basic: | ||||||||
Net income (loss) available to common stockholders | $ | 2,069,322 | $ | (4,951,010 | ) | |||
Weighted-average common shares outstanding | 132,966,528 | 109,139,729 | ||||||
Basic income (loss) per share | $ | 0.02 | $ | (0.05 | ) | |||
Income (Loss) Per Common Share – Diluted: | ||||||||
Net income (loss) | $ | 2,069,322 | $ | (4,951,010 | ) | |||
Weighted-average common shares outstanding | 132,966,528 | 109,139,729 | ||||||
Convertible preferred stock | 17,700,000 | — | ||||||
Convertible debentures | 14,209,256 | — | ||||||
Weighted-average common shares outstanding and common share equivalents | 164,875,784 | 109,139,729 | ||||||
Diluted income (loss) per share | $ | 0.01 | $ | (0.05 | ) | |||
The following securities have been excluded from the calculation of net loss per share, as their effect would be anti-dilutive: | ||||||||
Shares of Common Stock | ||||||||
Issuable upon Conversion/Exercise | ||||||||
as of September 30, | ||||||||
2014 | 2013 | |||||||
Options | 5,542,688 | 5,542,688 | ||||||
Warrants | 3,611,167 | 3,663,667 | ||||||
Convertible preferred stock | — | 17,700,000 | ||||||
Convertible debentures | — | 31,828,330 | ||||||
Fair Value of Financial Instruments | The carrying value of cash, prepaid expenses and other current assets, accounts payable, accrued expenses and all loans and notes payable in the Company’s consolidated balance sheets approximated their values as of September 30, 2014 and 2013 due to their short-term nature. | |||||||
The Company issued notes payable that contained conversion features which were accounted for separately as derivative liabilities and measured at fair value on a recurring basis. Changes in fair value are charged to other income (expenses) as appropriate. The fair value of the derivate liabilities was determined based on Level 2 inputs utilizing observable quoted prices for similar instruments in active markets and observable quoted prices for identical or similar instruments in markets that are not very active. Derivative liabilities totaled $5,164 and $438,779 as of September 30, 2014 and 2013, respectively.. | ||||||||
See Note F – Notes Payable – Convertible Promissory Notes for additional information. | ||||||||
Use of Estimates | The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Such estimation includes the selection of assumptions underlying the calculation of the fair value of options. Actual results could differ from those estimates. | |||||||
Stock-Based Compensation | The Company accounts for stock-based compensation in accordance with FASB ASC 718, “Compensation - Stock Compensation.” Under the fair value recognition provision of the ASC, stock-based compensation cost is estimated at the grant date based on the fair value of the award. The Company estimates the fair value of stock options granted using the Black-Scholes-Merton option pricing model. | |||||||
The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with FASB ASC 505, “Equity.” Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earlier of a performance commitment or completion of performance by the provider of goods or services as defined by ASC 505. | ||||||||
Income Taxes | The Company accounts for income taxes in accordance with accounting guidance now codified as FASB ASC 740, "Income Taxes," which requires that the Company recognize deferred tax liabilities and assets based on the differences between the financial statement carrying amounts and the tax bases of assets and liabilities, using enacted tax rates in effect in the years the differences are expected to reverse. Deferred income tax benefit (expense) results from the change in net deferred tax assets or deferred tax liabilities. A valuation allowance is recorded when it is more likely than not that some or all deferred tax assets will not be realized. | |||||||
The Company has adopted the provisions of FASB ASC 740-10-05 "Accounting for Uncertainty in Income Taxes." The ASC clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements. The ASC prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The ASC provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. | ||||||||
Recently Issued Accounting Pronouncements | Effective January 1, 2014, the Company adopted ASU No. 2013-11, “Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists” (“ASU 2013-11”). ASU 2013-11 is expected to reduce diversity in practice by providing guidance on the presentation of unrecognized tax benefits and will better reflect the manner in which an entity would settle at the reporting date any additional income taxes that would result from the disallowance of a tax position when net operating loss carryforwards, similar tax losses, or tax credit carryforwards exist. The amendments in this update should be applied prospectively for annual and interim periods beginning after December 15, 2013. The adoption of ASU 2013-11 did not have a material effect on the Company’s consolidated financial statements. | |||||||
In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers.” The amendments in ASU 2014-09 affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (e.g., insurance contracts or lease contracts). This ASU will supersede the revenue recognition requirements in ASC 605, “Revenue Recognition,” and most industry-specific guidance, and creates an ASC 606, “Revenue from Contracts with Customers.” The core principle of the guidance is that an entity should 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. To achieve that core principle, an entity should apply the following steps: | ||||||||
Step 1: Identify the contract(s) with a customer. | ||||||||
Step 2: Identify the performance obligations in the contract. | ||||||||
Step 3: Determine the transaction price. | ||||||||
Step 4: Allocate the transaction price to the performance obligations in the contract. | ||||||||
Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation. | ||||||||
ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. The Company’s has not yet determined the effect to the current consolidated financial statements by the adoption of ASU 2014-09. | ||||||||
In August 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements Going Concern (Subtopic 205-40) – Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.” Currently, there is no guidance in U.S. GAAP about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern or to provide related footnote disclosures. The amendments in this Update provide that guidance. In doing so, the amendments are intended to reduce diversity in the timing and content of footnote disclosures. The amendments require management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management’s plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). The amendments in this Update are effective for public and nonpublic entities for annual periods ending after December 15, 2016 and early adoption is permitted. | ||||||||
Management does not believe that any other recently issued, but not yet effective, accounting standard if currently adopted would have a material effect on the accompanying financial statements. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Accounting Policies [Abstract] | ||||||||
Schedule Of Income Loss per Common Share | Year Ended | |||||||
September 30, | ||||||||
2014 | 2013 | |||||||
Income (Loss) Per Common Share – Basic: | ||||||||
Net income (loss) available to common stockholders | $ | 2,069,322 | $ | (4,951,010 | ) | |||
Weighted-average common shares outstanding | 132,966,528 | 109,139,729 | ||||||
Basic income (loss) per share | $ | 0.02 | $ | (0.05 | ) | |||
Income (Loss) Per Common Share – Diluted: | ||||||||
Net income (loss) | $ | 2,069,322 | $ | (4,951,010 | ) | |||
Weighted-average common shares outstanding | 132,966,528 | 109,139,729 | ||||||
Convertible preferred stock | 44,250,000 | — | ||||||
Convertible debentures | 14,209,256 | — | ||||||
Weighted-average common shares outstanding and common share equivalents | 191,425,784 | 109,139,729 | ||||||
Diluted income (loss) per share | $ | 0.01 | $ | (0.05 | ) | |||
Schedule of Loss Per Share Exclusions | Shares of Common Stock | |||||||
Issuable upon Conversion/Exercise | ||||||||
as of September 30, | ||||||||
2014 | 2013 | |||||||
Options | 5,542,688 | 5,542,688 | ||||||
Warrants | 3,611,167 | 3,663,667 | ||||||
Convertible preferred stock | — | 17,700,000 | ||||||
Convertible debentures | — | 31,828,330 |
ACCRUED_EXPENSES_Tables
ACCRUED EXPENSES (Tables) | 12 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Notes to Financial Statements | ||||||||
SCHEDULE OF ACCRUED EXPENSES | September 30, | |||||||
2014 | 2013 | |||||||
Registration penalty | $ | 250,203 | $ | 250,203 | ||||
Salaries and payroll taxes | 1,163,389 | 792,907 | ||||||
Professional fees | 216,472 | 166,802 | ||||||
Accrued dividends | 251,242 | 180,442 | ||||||
Interest | 110,026 | 84,648 | ||||||
$ | 1,991,332 | $ | 1,475,002 |
INCOME_TAXES_Tables
INCOME TAXES (Tables) | 12 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Income Tax Disclosure [Abstract] | ||||||||
Deferred Tax Assets | 2014 | 2013 | ||||||
Net operating loss carry forwards | $ | 2,850,535 | $ | 2,698,087 | ||||
Intangible assets | 1,200,000 | 1,200,000 | ||||||
Stock based compensation | 355,265 | 355,265 | ||||||
Accrued expenses | 539,912 | 396,232 | ||||||
Total deferred tax assets | 4,945,712 | 4,649,584 | ||||||
Valuation allowance | (2,116,712 | ) | (4,649,584 | ) | ||||
Net deferred tax assets | $ | 2,829,000 | $ | — | ||||
Schedule Of Effective Income Tax Rate | 2014 | 2013 | ||||||
Federal tax rate | (34 | )% | (34 | )% | ||||
Effect of state taxes | (6 | )% | (6 | )% | ||||
Reversal of valuation allowance | 412 | % | 0 | % | ||||
Permanent differences | 3 | % | 5 | % | ||||
Net operating loss carry forward | 37 | % | 35 | % | ||||
Total | 412 | % | 0 | % |
STOCKHOLDERS_DEFICIENCY_EQUITY1
STOCKHOLDERS (DEFICIENCY) EQUITY (Tables) | 12 Months Ended | ||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||
SCHEDULE OF OPTION ACTIVITY | Options | Weighted Average Exercise Price | |||||||||||||||||||||
Options outstanding, October 1, 2012 | 5,542,688 | $ | 0.19 | ||||||||||||||||||||
Granted | — | — | |||||||||||||||||||||
Forfeited | — | — | |||||||||||||||||||||
Options outstanding, September 30, 2013 and 2014 | 5,542,688 | $ | 0.19 | ||||||||||||||||||||
Aggregate intrinsic value | $ | — | |||||||||||||||||||||
SCHEDULE OF STOCK OPTIONS | Weighted Average Remaining | Options Exercisable Weighted Average | |||||||||||||||||||||
Ranges of prices | Number | Contractual | Exercise | Number | Exercise | ||||||||||||||||||
Outstanding | Life | Price | Exercisable | Price | |||||||||||||||||||
$ | 0.035 | 3,542,688 | 1.27 | $ | 0.035 | 3,542,688 | $ | 0.035 | |||||||||||||||
$ | 0.46 | 2,000,000 | 1.14 | 0.46 | 2,000,000 | 0.46 | |||||||||||||||||
$0.035-$0.46 | 5,542,688 | 1.22 | $ | 0.19 | 5,542,688 | $ | 0.19 | ||||||||||||||||
SCHEDULE OF WARRANTS OUTSTANDING | Exercise | Expiration | |||||||||||||||||||||
Warrants | Price | Date | |||||||||||||||||||||
50,000 | Various | 2018 | |||||||||||||||||||||
1,500,000 | $ | 0.1 | 2015 | ||||||||||||||||||||
672,500 | $ | 0.15 | 2018 | ||||||||||||||||||||
937,500 | $ | 0.25 | 2016 | ||||||||||||||||||||
325,000 | $ | 0.5 | 2015 | ||||||||||||||||||||
10,000 | $ | 0.75 | 2016 | ||||||||||||||||||||
49,500 | $ | 1 | 2015 | ||||||||||||||||||||
66,667 | $ | 1.5 | 2016 | ||||||||||||||||||||
3,611,667 |
THE_COMPANY_Details_Narrative
THE COMPANY (Details Narrative) (USD $) | 12 Months Ended | 3 Months Ended |
Sep. 30, 2014 | Dec. 31, 2014 | |
Date Of Incorporation | 6-Sep-07 | |
Sale Agreement | ||
Date of Agreement | 7-Nov-14 | |
Purchase Price | $3,500,000 | |
Know How SPA | ||
Date of Agreement | 21-Jul-10 | |
Payment to Acquire Intangible Assets | 3,000,000 | |
Payment to Acquire Subsidiary | 2,000,000 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) (USD $) | 12 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Accounting Policies [Abstract] | ||
Impairment of intangible asset | $3,000,000 | |
Derivative liabilities | $5,164 | $438,779 |
Schedule_of_Income_Loss_per_Co
Schedule of Income Loss per Common Share (Details) (USD $) | 12 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Income (Loss) Per Common Share Basic | ||
Net income (loss) attributable to common stockholders | $2,069,322 | ($4,951,010) |
Weighted average number of shares outstanding Basic | 132,966,528 | 109,139,729 |
Basic income (loss) per share | $0.02 | ($0.05) |
Income (Loss) Per Common Share Diluted | ||
Net income (loss) attributable to common stockholders | 2,069,322 | -4,951,010 |
Weighted average number of shares outstanding Basic | 132,966,528 | 109,139,729 |
Convertible preferred stock | 44,250,000 | |
Convertible debentures | $14,209,256 | |
Weighted average number of shares outstanding Diluted | 191,425,784 | 109,139,729 |
Income (loss) per share Diluted | $0.01 | ($0.05) |
LOSS_PER_SHARE_Schedule_Of_Inc
LOSS PER SHARE - Schedule Of Income Loss per Common Share Exclusions (Details) | Sep. 30, 2014 | Sep. 30, 2013 |
Earnings Per Share [Abstract] | ||
Options | 5,542,688 | 5,542,688 |
Warrants | 3,611,167 | 3,663,667 |
Convertible preferred stock | 17,700,000 | |
Convertible debentures | 31,828,330 |
INTANGIBLE_ASSETS_Details_Narr
INTANGIBLE ASSETS (Details Narrative) (USD $) | 12 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2010 | |
Intangible assets | $7,500 | $7,500 | |
Impairment of intangible asset | 3,000,000 | ||
Know How SPA | |||
Date of Agreement | 21-Jul-10 | ||
Payment to Acquire Intangible Assets | 3,000,000 | ||
KJR 10 Corp | |||
Payment to Acquire Intangible Assets | $7,500 |
ACCRUED_EXPENSES_Schedule_Of_A
ACCRUED EXPENSES - Schedule Of Accrued Expenses (Details) (USD $) | Sep. 30, 2014 | Sep. 30, 2013 |
Notes to Financial Statements | ||
Registration penalty | $250,203 | $250,203 |
Salaries and payroll taxes | 1,163,389 | 792,907 |
Professional fees | 216,472 | 166,802 |
Accrued dividends | 251,242 | 180,442 |
Interest | 110,026 | 84,648 |
Accrued Expenses | $1,991,332 | $1,475,002 |
LOANS_PAYABLE_Details_Narrativ
LOANS PAYABLE (Details Narrative) (USD $) | Sep. 30, 2014 | Sep. 30, 2013 | Feb. 28, 2011 | 31-May-11 | Mar. 31, 2014 |
Loan payable | $10,000 | $10,000 | |||
Loans payable - related parties | 205,817 | 64,400 | |||
Investor | |||||
Loan payable | 10,000 | 10,000 | 10,000 | ||
Director | |||||
Loans payable - related parties | 38,221 | 38,221 | 38,221 | ||
Chief Executive Officer | |||||
Loans payable - related parties | 85,000 | 0 | |||
Chief Executive Officer | |||||
Loans payable - related parties | 122,100 | 28,100 | |||
Related Party Other | |||||
Loans payable - related parties | $36,996 | $1,300 | $35,696 |
NOTES_PAYABLE_Details_Narrativ
NOTES PAYABLE (Details Narrative) (USD $) | 12 Months Ended | 1 Months Ended | 8 Months Ended | 12 Months Ended | 3 Months Ended | ||
Sep. 30, 2014 | Feb. 28, 2014 | Oct. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Jan. 13, 2015 | Aug. 31, 2013 | |
Note payable - insurance financing | $51,613 | $52,220 | $52,220 | ||||
Insurance Financing #1 | |||||||
Date of Agreement | 31-Aug-13 | ||||||
Note payable - insurance financing | 0 | 52,220 | 52,220 | 57,892 | |||
Insurance Financing #2 | |||||||
Date of Agreement | 30-Sep-14 | ||||||
Note payable - insurance financing | 51,613 | ||||||
Note payable - insurance financing, down payment | 10,322 | ||||||
Promissory Note 2 | |||||||
Date of Note | 21-Dec-11 | ||||||
Convertible Notes Payable | 150,000 | ||||||
Convertible Notes Payable, amount to be repaid | 175,000 | ||||||
Interest rate | 31.23% | ||||||
Additional interest rate if late | 10.00% | ||||||
Maturity Date | 21-Jun-12 | ||||||
Discount on debt | 56,250 | ||||||
Convertible Notes Payable, Balance | 175,000 | 175,000 | 175,000 | ||||
Promissory Note 3 | |||||||
Date of Note | 31-Oct-12 | ||||||
Convertible Notes Payable | 165,400 | ||||||
Interest rate | 8.00% | ||||||
Maturity Date | 30-Apr-13 | ||||||
Shares to be issued pursuant to Convertible Notes Payable | 3,522,440 | ||||||
Conversion price per unit | $0.05 | ||||||
Convertible Notes Payable, Balance | 0 | 0 | 0 | ||||
Warrants to purchase issued | 500,000 | ||||||
Warrants to purchase issued, price per share | $0.10 | ||||||
Warrants to purchase issued, term | P2Y | ||||||
Promissory Note 4 | |||||||
Date of Note | 27-Jan-12 | ||||||
Convertible Notes Payable | 149,290 | ||||||
Interest rate | 8.00% | ||||||
Conversion price per share | $0.05 | ||||||
Convertible Notes Payable, Balance | 0 | ||||||
Common stock issued | 3,027,683 | ||||||
Warrants to purchase issued | 500,000 | ||||||
Warrants to purchase issued, price per share | $0.10 | ||||||
Warrants to purchase, expiration date | 27-Jan-14 | ||||||
Promissory Note 5 to 9 | |||||||
Date of Note | 30-Mar-12 | ||||||
Convertible Notes Payable | 186,000 | ||||||
Interest rate | 33.00% | ||||||
Shares to be issued pursuant to Convertible Notes Payable | 256,598 | ||||||
Shares issued pursuant to Convertible Notes Payable | 4,079,000 | ||||||
Conversion price per share | $0.05 | ||||||
Convertible Notes Payable, Balance | 0 | 0 | 0 | ||||
Promissory Note 10 to 18 | |||||||
Convertible Notes Payable | 220,000 | ||||||
Interest rate | 33.00% | ||||||
Shares issued pursuant to Convertible Notes Payable | 5,124,500 | ||||||
Conversion price per share | $0.05 | ||||||
Convertible Notes Payable, Balance | 0 | 0 | 0 | ||||
Promissory Note 19 | |||||||
Date of Note | 30-Apr-12 | ||||||
Convertible Notes Payable | 25,000 | ||||||
Interest rate | 33.00% | ||||||
Shares issued pursuant to Convertible Notes Payable | 582,500 | ||||||
Conversion price per share | $0.05 | ||||||
Convertible Notes Payable, Balance | 0 | 0 | 0 | ||||
Promissory Note 20 to 22 | |||||||
Date of Note | 30-Jul-12 | ||||||
Convertible Notes Payable | 100,000 | ||||||
Interest rate | 10.00% | ||||||
Shares issued pursuant to Convertible Notes Payable | 1,050,000 | ||||||
Conversion price per share | $0.10 | ||||||
Convertible Notes Payable, Balance | 0 | 0 | 0 | ||||
Beneficial Conversion Feature | 67,500 | ||||||
Promissory Note 23 | |||||||
Date of Note | 31-Jul-12 | ||||||
Convertible Notes Payable | 100,000 | ||||||
Interest rate | 8.00% | ||||||
Shares issued pursuant to Convertible Notes Payable | 2,080,000 | ||||||
Conversion price per share | $0.05 | ||||||
Convertible Notes Payable, Balance | 0 | 0 | 0 | ||||
Beneficial Conversion Feature | 100,000 | ||||||
Warrants to purchase issued | 500,000 | ||||||
Warrants to purchase issued, price per share | $0.10 | ||||||
Warrants to purchase issued, term | P2Y | ||||||
Promissory Note 24 | |||||||
Date of Note | 31-Dec-12 | ||||||
Convertible Notes Payable | 100,000 | ||||||
Interest rate | 8.00% | ||||||
Shares to be issued pursuant to Convertible Notes Payable | 2,089,863 | ||||||
Conversion price per share | $0.05 | ||||||
Convertible Notes Payable, Balance | 0 | 0 | 0 | ||||
Beneficial Conversion Feature | 100,000 | ||||||
Warrants to purchase issued | 500,000 | ||||||
Warrants to purchase issued, price per share | $0.10 | ||||||
Warrants to purchase issued, term | P2Y | ||||||
Promissory Note 25 | |||||||
Date of Note | 31-Jan-13 | ||||||
Convertible Notes Payable | 35,000 | ||||||
Interest rate | 8.00% | ||||||
Shares issued pursuant to Convertible Notes Payable | 728,000 | ||||||
Conversion price per share | $0.05 | ||||||
Convertible Notes Payable, Balance | 0 | 0 | 0 | ||||
Beneficial Conversion Feature | 21,000 | ||||||
Warrants to purchase issued | 175,000 | ||||||
Warrants to purchase issued, price per share | $0.50 | ||||||
Warrants to purchase issued, term | P2Y | ||||||
Promissory Note 26 | |||||||
Date of Note | 31-Mar-13 | ||||||
Convertible Notes Payable | 25,000 | ||||||
Interest rate | 8.00% | ||||||
Shares to be issued pursuant to Convertible Notes Payable | 520,000 | ||||||
Conversion price per share | $0.05 | ||||||
Discount on debt | 14,507 | ||||||
Convertible Notes Payable, Balance | 0 | 0 | 0 | ||||
Beneficial Conversion Feature | 10,493 | ||||||
Warrants to purchase issued | 640,000 | ||||||
Warrants to purchase issued, price per share | $0.00 | ||||||
Warrants to purchase issued, term | P1Y | ||||||
Promissory Note 27 | |||||||
Date of Note | 30-Apr-13 | ||||||
Convertible Notes Payable | 15,000 | ||||||
Interest rate | 8.00% | ||||||
Shares to be issued pursuant to Convertible Notes Payable | 312,100 | ||||||
Conversion price per share | $0.05 | ||||||
Convertible Notes Payable, Balance | 0 | 0 | 0 | ||||
Beneficial Conversion Feature | 1,500 | ||||||
Promissory Note 28 | |||||||
Date of Note | 30-Apr-13 | ||||||
Convertible Notes Payable | 25,000 | ||||||
Interest rate | 8.00% | ||||||
Shares issued pursuant to Convertible Notes Payable | 520,000 | ||||||
Conversion price per share | $0.05 | ||||||
Discount on debt | 10,000 | ||||||
Convertible Notes Payable, Balance | 0 | 25,000 | 25,000 | ||||
Promissory Note 29 | |||||||
Date of Note | 31-May-13 | ||||||
Convertible Notes Payable | 25,000 | ||||||
Interest rate | 8.00% | ||||||
Conversion price per share | $0.05 | ||||||
Convertible Notes Payable, Balance | 25,000 | 25,000 | 25,000 | ||||
Promissory Note 30 to 31 | |||||||
Date of Note | 30-Jun-13 | ||||||
Convertible Notes Payable | 30,000 | ||||||
Interest rate | 8.00% | ||||||
Shares to be issued pursuant to Convertible Notes Payable | 624,066 | ||||||
Conversion price per share | $0.05 | ||||||
Discount on debt | 1,226 | 1,226 | |||||
Convertible Notes Payable, Balance | 0 | 28,774 | 28,774 | ||||
Beneficial Conversion Feature | 3,451 | ||||||
Warrants to purchase issued | 150,000 | ||||||
Warrants to purchase issued, price per share | $0.05 | ||||||
Warrants to purchase issued, term | P2Y | ||||||
Promissory Note 31A | |||||||
Date of Note | 30-Jun-13 | ||||||
Convertible Notes Payable | 25,000 | ||||||
Interest rate | 8.00% | ||||||
Shares issued pursuant to Convertible Notes Payable | 520,000 | ||||||
Conversion price per share | $0.05 | ||||||
Discount on debt | 5,116 | ||||||
Convertible Notes Payable, Balance | 0 | 25,000 | 25,000 | ||||
Warrants to purchase issued | 320,000 | ||||||
Warrants to purchase issued, price per share | $0.00 | ||||||
Warrants to purchase issued, term | P1Y | ||||||
Promissory Note 32 to 34 | |||||||
Date of Note | 31-Jul-13 | ||||||
Convertible Notes Payable | 35,000 | ||||||
Interest rate | 8.00% | ||||||
Shares issued pursuant to Convertible Notes Payable | 728,000 | ||||||
Conversion price per share | $0.05 | ||||||
Convertible Notes Payable, Balance | 0 | 35,000 | 35,000 | ||||
Promissory Note 35 to 36 | |||||||
Date of Note | 31-Aug-13 | ||||||
Convertible Notes Payable | 250,000 | ||||||
Interest rate | 8.00% | ||||||
Conversion price per share | $0.03 | ||||||
Convertible Notes Payable, Balance | 250,000 | 250,000 | 250,000 | ||||
Promissory Note 37 | |||||||
Date of Note | 31-Dec-13 | ||||||
Convertible Notes Payable | 75,000 | ||||||
Interest rate | 8.00% | ||||||
Shares to be issued pursuant to Convertible Notes Payable | 3,874,110 | ||||||
Conversion price per share | $0.02 | ||||||
Discount on debt | 20,455 | ||||||
Convertible Notes Payable, Balance | 0 | ||||||
Beneficial Conversion Feature | 54,545 | ||||||
Warrants to purchase issued | 937,500 | ||||||
Warrants to purchase issued, price per share | $0.25 | ||||||
Warrants to purchase issued, term | P2Y | ||||||
Promissory Note To Lender | |||||||
Date of Agreement | 31-Oct-13 | ||||||
Interest rate | 10.59% | ||||||
Line Of Credit Current Borrowing Capacity | 225,000 | ||||||
Notes Payable, Proceeds | 25,000 | 50,000 | 100,000 | ||||
Accreted Interest | 5,450 | 8,405 | |||||
Unamortized Debt Discount | 7,675 | 72,348 | 72,348 | ||||
Loss on the change in fair value of the conversion option | 76,149 | 60,559 | |||||
Fair value of the conversion option | 5,163 | 213,858 | 213,858 | ||||
Debt Discount, Amortized | 64,675 | 64,125 | 64,125 | ||||
Debt Instrument Description | Material terms of the note include the following: | ||||||
1. The Lender may make additional loans in such amounts and at such dates at its sole discretion. | |||||||
2. The maturity date of each loan is one year after such loan is received. | |||||||
3. The original interest discount is prorated to each loan received. | |||||||
4. Principal and accrued interest is convertible into shares of the Company’s common stock at the lesser of $0.069 or 65%-70% (as defined) of the lowest trading price in the 25 trading days previous to the conversion. | |||||||
5. Unless otherwise agreed to in writing by both parties, at no time can the Lender convert any amount of the principal and/or accrued interest owed into common stock that would result in the Lender owning more than 4.99% of the common stock outstanding. | |||||||
6. There is a one-time interest payment of 10% of amounts borrowed that is due at the maturity date of each loan. | |||||||
7. At all times during which the note is convertible, the Company shall reserve from its authorized and unissued common stock to provide for the issuance of common stock under the full conversion of the promissory note. The Company will at all times reserve at least 13,000,000 shares of its common stock for conversion. | |||||||
8. The Company agreed to include on its next registration statement it files, all shares issuable upon conversion of balances due under the promissory note. Failure to do so would result in liquidating damages of 25% of the outstanding principal balance of the promissory note but not less than $25,000. | |||||||
Convertible Note To Vendor | |||||||
Date of Note | 31-May-13 | ||||||
Convertible Notes Payable | 293,700 | ||||||
Convertible Notes Payable, Repayment | 200,000 | ||||||
Interest rate | 12.00% | ||||||
Conversion price per share | $0.04 | ||||||
Convertible Notes Payable, Balance | 293,700 | 229,596 | 229,596 | ||||
Warrants to purchase issued | 50,000 | ||||||
Warrants to purchase issued, term | P5Y | ||||||
Fair Value of Derivative Liability | 153,300 | ||||||
Unamortized Debt Discount | 0 | 64,104 | 64,104 | ||||
Loss on the change in fair value of the conversion option | 193,247 | -60,559 | |||||
Fair value of the conversion option | 0 | 213,858 | 213,858 | ||||
Debt Discount, Amortized | $64,104 | $89,195 | $89,195 |
INCOME_TAXES_Deferred_Tax_Asse
INCOME TAXES - Deferred Tax Assets (Details) (USD $) | Sep. 30, 2014 | Sep. 30, 2013 |
Deferred tax asset attributable to: | ||
Net operating loss carryover | $2,850,535 | $2,698,087 |
Intangible assets | 1,200,000 | 1,200,000 |
Stock based compensation | 355,265 | 355,265 |
Accrued expenses | 539,912 | 396,232 |
Total deferred tax assets | 4,945,712 | 4,649,584 |
Valuation allowance | -2,116,712 | -4,649,584 |
Net deferred tax asset | $2,829,000 |
INCOME_TAXES_Schedule_Of_Effec
INCOME TAXES - Schedule Of Effective Income Tax Rate (Details) | 12 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Notes to Financial Statements | ||
Federal tax rate | -34.00% | -34.00% |
Effect of state taxes | -6.00% | -6.00% |
Reversal of valuation allowance | 412.00% | 0.00% |
Permanent differences | 3.00% | 5.00% |
Net operating loss carry forward | 37.00% | 31.00% |
Total | 412.00% | 0.00% |
INCOME_TAXES_Details_Narrative
INCOME TAXES (Details Narrative) (USD $) | 12 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Operating Loss Carryforwards | $7,100,000 | |
Carryforward Expiration Date | 1-Jan-33 | |
Provision for income tax benefits | $2,440,000 |
STOCKHOLDERS_DEFICIENCY_EQUITY2
STOCKHOLDERS (DEFICIENCY) EQUITY - Schedule of Option Activity (Details) (USD $) | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 |
Other Liabilities Disclosure [Abstract] | |||
Beginning Balance, Issued Options | 5,542,688 | 5,542,688 | 5,542,688 |
Beginning Balance, Average Exercise Price | $0.19 | $0.19 | $0.19 |
Ending Balance, Issued Options | 5,542,688 | 5,542,688 | 5,542,688 |
Ending Balance, Average Exercise Price | $0.19 | $0.19 | $0.19 |
STOCKHOLDERS_DEFICIENCY_EQUITY3
STOCKHOLDERS (DEFICIENCY) EQUITY - Schedule of Stock Options (Details) (USD $) | 12 Months Ended |
Sep. 30, 2014 | |
Stock Options 1 | |
Number Outstanding | 2,000,000 |
Weighted Average Remaining Contractual Life | 1 year |
Weighted Average Remaining Exercise Price | $0.46 |
Options Exercisable Weighted Average Number Exercisable | 2,000,000 |
Options Exercisable Weighted Average Exercise Price | $0.46 |
Stock Options 2 | |
Number Outstanding | 3,542,688 |
Weighted Average Remaining Contractual Life | 1 year |
Weighted Average Remaining Exercise Price | $0.04 |
Options Exercisable Weighted Average Number Exercisable | 3,542,688 |
Options Exercisable Weighted Average Exercise Price | $0.04 |
Stock Options (total) | |
Number Outstanding | 5,542,688 |
Weighted Average Remaining Contractual Life | 1 year |
Weighted Average Remaining Exercise Price | $0.19 |
Options Exercisable Weighted Average Number Exercisable | 5,542,688 |
Options Exercisable Weighted Average Exercise Price | $0.19 |
STOCKHOLDERS_DEFICIENCY_EQUITY4
STOCKHOLDERS (DEFICIENCY) EQUITY - SCHEDULE OF WARRANTS OUTSTANDING (Details) (USD $) | 12 Months Ended |
Sep. 30, 2014 | |
Warrant 1 | |
Warrant Amount | 50,000 |
Expiration Date | 1-Jan-18 |
Warrant 2 | |
Warrant Amount | 1,500,000 |
Exercise Price | 0.1 |
Expiration Date | 1-Jan-15 |
Warrant 3 | |
Warrant Amount | 672,500 |
Exercise Price | 0.15 |
Expiration Date | 1-Jan-18 |
Warrant 4 | |
Warrant Amount | 937,500 |
Exercise Price | 0.25 |
Expiration Date | 1-Jan-16 |
Warrant 5 | |
Warrant Amount | 325,000 |
Exercise Price | 0.5 |
Expiration Date | 1-Jan-15 |
Warrant 6 | |
Warrant Amount | 10,000 |
Exercise Price | 0.75 |
Expiration Date | 1-Jan-16 |
Warrant 7 | |
Warrant Amount | 49,500 |
Exercise Price | 1 |
Expiration Date | 1-Jan-15 |
Warrant 8 | |
Warrant Amount | 66,667 |
Exercise Price | 1.5 |
Expiration Date | 1-Jan-16 |
Warrant (total) | |
Warrant Amount | 3,611,667 |
STOCKHOLDERS_DEFICIENCY_EQUITY5
STOCKHOLDERS (DEFICIENCY) EQUITY (Details Narrative) (USD $) | 12 Months Ended | |||||||||||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2011 | Sep. 30, 2012 | Dec. 24, 2013 | Dec. 18, 2012 | Dec. 15, 2010 | Dec. 10, 2013 | Jan. 06, 2011 | Nov. 30, 2010 | Mar. 31, 2012 | Aug. 16, 2010 | |
Series A Preferred Stock, Shares Authorized | 5,500,000 | 5,500,000 | ||||||||||
Common stock, Issued | 139,598,152 | 120,159,000 | ||||||||||
Common stock, Value | $139,601 | $120,160 | ||||||||||
Series A Preferred Stock, Issued and outstanding | 885,000 | 885,000 | ||||||||||
Common Stock, Shares Authorized | 200,000,000 | 200,000,000 | ||||||||||
Registration penalty | 250,203 | |||||||||||
Stock based compensation - general and administrative | 27,556 | |||||||||||
Stock based compensation - interest expense | 89,370 | |||||||||||
Series A | ||||||||||||
Series A Preferred Stock, Shares Authorized | 5,500,000 | |||||||||||
Dividends | 70,800 | 46,198 | ||||||||||
Dividends payable | 251,242 | 180,442 | ||||||||||
Series A Preferred Stock, Issued and outstanding | 885,000 | |||||||||||
Series B | ||||||||||||
Series B Preferred Stock, Shares Authorized | 4,000,000 | 4,000,000 | ||||||||||
Series B Preferred Stock, Outstanding | 0 | 0 | ||||||||||
Finders Fee | ||||||||||||
Common stock, Issued | 1,038,751 | 801,000 | ||||||||||
Common stock, Value | 35,851 | 89,370 | ||||||||||
Bridge Financing Conversion | ||||||||||||
Common stock, Issued | 2,600,000 | 16,671,685 | ||||||||||
Lender Conversion | ||||||||||||
Common stock, Issued | 14,840,392 | 8,850,000 | ||||||||||
2010 Incentive Plan | ||||||||||||
Common Stock, Shares Authorized | 4,428,360 | |||||||||||
4 Board Members | ||||||||||||
Common Stock Option, Issued | 885,672 | |||||||||||
Common Stock Option, Exercise Price | $0.04 | $0.62 | ||||||||||
Common Stock Option, Value | $27,556 | |||||||||||
Consultant Options | ||||||||||||
Common Stock Option, Issued | 2,000,000 | |||||||||||
Common Stock Option, Exercise Price | $0.46 | |||||||||||
Note Conversion | ||||||||||||
Warrants issued | 2,365,000 | 1,407,500 | ||||||||||
Warrants issued, exercise price | $0.00 | $0.00 | ||||||||||
Warrants issued, exercise price, max | $0.50 | $0.50 | ||||||||||
SPA | ||||||||||||
Common stock, Issued | 4,035,524 |
CONTINGENCY_Details_Narrative
CONTINGENCY (Details Narrative) (Know How SPA, USD $) | 12 Months Ended |
Sep. 30, 2014 | |
Know How SPA | |
Date of Agreement | 21-Jul-10 |
Payment to Acquire Intangible Assets | $3,000,000 |
Payment to Acquire Subsidiary | $2,000,000 |
SUBSEQUENT_EVENTS_Details_Narr
SUBSEQUENT EVENTS (Details Narrative) (USD $) | 3 Months Ended |
Dec. 31, 2014 | |
Sale Agreement | |
Date of Agreement | 7-Nov-14 |
Purchase Price | $3,500,000 |
Sale Agreement Option | |
Purchase Price | $10,000,000 |
Term of Option | P5Y |
Royalty Fee | 5.00% |