Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | |
Sep. 30, 2014 | Dec. 26, 2014 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Vape Holdings, Inc. | |
Entity Central Index Key | 1455819 | |
Amendment Flag | FALSE | |
Current Fiscal Year End Date | -21 | |
Document Type | 10-K | |
Document Period End Date | 30-Sep-14 | |
Document Fiscal Period Focus | FY | |
Document Fiscal Year Focus | 2014 | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | No | |
Entity Filer Category | Smaller Reporting Company | |
Entity Public Float | $0.90 | |
Entity Common Stock, Shares Outstanding | 10,849,789 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Sep. 30, 2014 | Sep. 30, 2013 |
Current assets: | ||
Cash | $48,370 | $568 |
Accounts receivable | 16,771 | |
Inventory | 227,530 | |
Prepaid Inventory | 246,491 | |
Other current assets | 44,100 | |
Total current assets | 583,262 | 568 |
Tooling, net of accumulated depreciation | 106,377 | |
Trademarks | 119,575 | |
Pending patents | 14,890 | |
TOTAL ASSETS | 824,104 | 568 |
Current liabilities: | ||
Accounts payable | 216,388 | 60,346 |
Accrued expenses | 169,513 | 7,573 |
Convertible notes payable, net of unamortized discount of $32,333 at September 30, 2014 | 187,667 | |
Related party convertible notes payable, net of unamortized discount of $4,168 at September 30, 2014 | 45,832 | |
Related party notes payable | 234,824 | |
Total current liabilities | 619,400 | 302,743 |
Long term liabilities: | ||
Convertible notes payable, long-term, net of unamortized discount of $19,800 at September 30, 2014 | 178,200 | |
Related party convertible notes payable, long-term, net of unamortized discount of $125,480 at September 30, 2014 | 199,115 | |
Related party notes payable, long-term | 341,290 | |
Accounts payable - related party | 15,000 | |
Warrant liability | 2,464,232 | |
Total liabilities | 3,802,237 | 317,743 |
Commitments and contingencies | ||
Stockholders' deficit: | ||
Preferred stock, $0.00001 par value - 100,000,000 authorized; - Series A; 500,000 outstanding at September 30, 2014 | ||
Common stock, $0.00001 par value - authorized 1,000,000,000 shares; 10,032,436 and 6,250,000 issued and outstanding, respectively | 100 | 62 |
Additional paid-in capital | 22,402,662 | |
Accumulated deficit | -25,380,895 | -317,237 |
Total stockholders' deficit | -2,978,133 | -317,175 |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $824,104 | $568 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Sep. 30, 2014 | Sep. 30, 2013 |
Balance Sheets [Abstract] | ||
Unamortized discount convertible notes payable, current | $32,333 | |
Unamortized discount related party convertible notes payable, current | 4,168 | |
Unamortized discount convertible notes payable, non current | 19,800 | |
Unamortized discount related party convertible notes payable, non current | $125,480 | |
Preferred stock, par value | $0.00 | $0.00 |
Preferred stock, shares authorized | 100,000,000 | 100,000,000 |
Preferred stock, shares outstanding | 500,000 | 500,000 |
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued | 10,032,436 | 6,250,000 |
Common stock, shares outstanding | 10,032,436 | 6,250,000 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 6 Months Ended | 12 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2014 | |||
Income Statement [Abstract] | ||||
Net sales | $841,724 | |||
Cost of sales | 458,387 | |||
Gross profit | 383,337 | |||
Operating expense: | ||||
Sales and marketing | 219,891 | |||
Research and development | 45,757 | |||
General and administrative (A) | 93,910 | [1] | 1,315,710 | [1] |
Total operating expenses | 93,910 | 1,581,358 | ||
Operating loss | -93,910 | -1,198,021 | ||
Other expense: | ||||
Interest expense | 241,065 | |||
Interest expense - related party | 7,573 | 219,714 | ||
Loss on settlement of warrants | 23,404,058 | |||
Total other expense, net | 7,573 | 23,864,837 | ||
Loss before provision for income taxes | -101,483 | -25,062,858 | ||
Provision for income taxes | 800 | |||
Net loss | ($101,483) | ($25,063,658) | ||
Weighted average shares - basic and diluted | 6,277,480 | 7,822,212 | ||
Loss per common share - basic and diluted | ($0.02) | ($3.20) | ||
[1] | (A) Includes stock-based compensation related to options during the year ended September 30, 2014 and March 26, 2013 ("Inception") to September 30, 2013 of $450,501 and $0, respectively. It consisted of approximately $327,000 of options related to employees and $124,000 related to non-employees in 2014. |
Consolidated_Statements_of_Ope1
Consolidated Statements of Operations (Parenthetical) (USD $) | 12 Months Ended |
Sep. 30, 2014 | |
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |
Stock-based compensation - options | $450,501 |
Employees [Member] | |
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |
Stock-based compensation - options | 327,000 |
Non-Employees [Member] | |
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |
Stock-based compensation - options | $124,000 |
Consolidated_Statements_of_Sto
Consolidated Statements of Stockholders' (Deficit) (USD $) | Total | Series A Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] |
Balance at Mar. 26, 2013 | |||||
Balance, Shares at Mar. 26, 2013 | |||||
Issuances of founder shares, net return of capital of $17,750 | 10,695 | 46 | 10,295 | 354 | |
Issuances of founder shares, net return of capital of $17,750, shares | 4,684,537 | ||||
Fair value of officer services | 30,000 | 30,000 | |||
Assumption of debt due to related parties | -40,295 | -40,295 | |||
Net loss | -101,483 | -317,591 | |||
Balance at Sep. 30, 2013 | -317,175 | 46 | -317,237 | ||
Balance, Shares at Sep. 30, 2013 | 4,684,537 | ||||
Shares retained by PeopleString shareholders upon merger | 16 | 16 | |||
Shares retained by PeopleString shareholders upon merger, Shares | 1,565,463 | ||||
Conversion of related party note payable | 341,545 | 7 | 341,538 | ||
Conversion of related party note payable, Shares | 571,630 | ||||
Conversion of note payables | 55,586 | 55,586 | |||
Conversion of note payables, Shares | 28,836 | ||||
Fair value of officer services | 15,000 | 15,000 | |||
Common stock issued for services | 133,200 | 133,200 | |||
Common stock issued for services, shares | 50,000 | ||||
Discount on convertible note payable at 10% | 4,424 | 4,424 | |||
Discount on convertible notes payable at 8% | 158,402 | 158,402 | |||
Discount on convertible note payable at 6% | 108,000 | 108,000 | |||
Discount on related party convertible note payable at 8% | 193,217 | 193,217 | |||
Discount on related party convertible note payable at 6% | 3,000 | 3,000 | |||
Common stock issued in connection with warrant settlement | 98,822 | 98,822 | |||
Common stock issued in connection with warrant settlement, Shares | 3,542 | ||||
Cashless exercise of warrants | 20,841,003 | 31 | 20,840,972 | ||
Cashless exercise of warrants, shares | 3,128,428 | ||||
Stock-based compensation - employees | 326,812 | 326,812 | |||
Stock-based compensation - non employees | 123,689 | 123,689 | |||
Issuance of preferred stock for HIVE asset acquisition, Value | |||||
Issuance of preferred stock for HIVE asset acquisition, shares | 500,000 | ||||
Net loss | -25,063,658 | -25,063,658 | |||
Balance at Sep. 30, 2014 | ($2,978,133) | $100 | $22,402,662 | ($25,380,895) | |
Balance, Shares at Sep. 30, 2014 | 500,000 | 10,032,436 |
Consolidated_Statements_of_Sto1
Consolidated Statements of Stockholders' Deficit (Parenthetical) (USD $) | 6 Months Ended | 12 Months Ended |
Sep. 30, 2013 | Sep. 30, 2014 | |
Statement of Stockholders' Equity [Abstract] | ||
Issuance of shares, return of capital | $17,750 | |
Discount on convertible note payable percentage, one | 10.00% | |
Discount on convertible note payable percentage, two | 8.00% | |
Discount on convertible note payable percentage, three | 6.00% | |
Discount on related party convertible note payable | 8.00% | |
Discount on related party convertible note payable | 6.00% |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 6 Months Ended | 12 Months Ended |
Sep. 30, 2013 | Sep. 30, 2014 | |
Cash flows from operating activities: | ||
Net loss | ($101,483) | ($25,063,658) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation | 16,178 | |
Accretion of debt discounts | 7,573 | 366,431 |
Fair value in excess of stock issued for conversion of notes payable and accrued interest | 1,323 | |
Fair value in excess of stock issued for conversion of related party notes payable and accrued interest | 44,239 | |
Loss on settlement of warrants | 23,404,058 | |
Fair value of officer services | 30,000 | 15,000 |
Common stock issues for services | 133,200 | |
Stock-based compensation | 450,501 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | -16,771 | |
Inventory | -474,021 | |
Other assets | -2,433 | |
Accounts payable | 77,954 | 156,042 |
Accrued expenses | 7,573 | -10,092 |
Net cash provided by (used in) operating activities | 21,617 | -980,003 |
Cash flows from investing activities: | ||
Capital expenditures | -122,555 | |
Purchase of trademarks and pending patents | -134,465 | |
Net cash used in investing activities | -257,020 | |
Cash flows from financing activities: | ||
Proceeds from issuances of convertible notes payable | 438,000 | |
Proceeds from issuances of related party convertible notes payable | 505,535 | |
Proceeds from issuances of related party notes payable | 341,290 | |
Net cash provided by financing activities | 1,284,825 | |
Net change in cash | 21,617 | 47,802 |
Cash, beginning of period | 568 | |
Cash, end of period | 568 | 48,370 |
Cash paid during the period for: | ||
Interest | ||
Taxes | ||
Non-cash investing and financing activities: | ||
Conversion of related party notes payable and accrued interest | 64,951 | 341,545 |
Conversion of notes payable and accrued interest | 55,586 | |
Issuance of convertible note payable for services | 41,667 | |
Issuance of convertible note payable for former officer services | 50,000 | |
Issuance of common stock in connection with warrant settlement | $98,822 |
Description_of_Business_Recent
Description of Business, Recent Acquisitions and Summary of Significant Accounting Policies | 12 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Description of Business, Recent Acquisitions and Summary of Significant Accounting Policies [Abstarct] | |||||||||||||||||
DESCRIPTION OF BUSINESS, RECENT ACQUISITIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1. DESCRIPTION OF BUSINESS, RECENT ACQUISITIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||||||||||
BUSINESS | |||||||||||||||||
Vape Holdings, Inc. (formerly PeopleString Corporation) (“Vape,” the “Company,” “we,” “us,” “our,” “our company”) is a holding company with its primary focus in the manufacturing and distribution of healthy and sustainable vaporization products. The Company has designed and recently began marketing and distributing ceramic vaporization products under a unique brand. The Company has introduced a nonporous, non-corrosive, chemically inert medical-grade ceramic vaporization element as a healthy, sustainable alternative to traditional titanium and quartz vaporization materials, as well as lower-grade ceramic found in traditional electronic cigarettes and vaporizers. This material can be used for a wide range of applications, including stand-alone vaporization products and "E-cigs." Electronic cigarettes come in a variety of designs ranging from those that look vastly like traditional cigarettes, to larger vaporizer units which are capable of vaporizing liquid with varying viscosity. The process of vaporization is believed to eliminate the smoke, tar, ash, and other byproducts of traditional smoking by utilizing lower temperatures in a controlled electronic environment. | |||||||||||||||||
HIVE Ceramics is the premier brand under the Vape umbrella. HIVE manufactures and distributes a proprietarily blended ceramic vaporization element for torched, electronic and portable vaporizers with countless design and product crossover capabilities in existing and emerging markets. HIVE is dedicated to bringing the healthiest and cleanest vaporization experience possible to the market. The HIVE product line currently consists of over 13 distinct ceramic elements, including the 2 piece domeless, domeless direct inject, and HIVE’s signature domeless elements covering 10mm, 14mm and 18mm applications as well as regular elements, the HIVE Flower Cup, the HIVE Carb Cap and the HIVE Stinger Dabber. The full HIVE product line is currently being manufactured and distributed and is available now. | |||||||||||||||||
The Company has recently launched ‘HIVE Glass’. HIVE Glass is Vape’s newest line of products under the HIVE brand name. The HIVE GLASS line is precision made using state of the art manufacturing processes and techniques, and exclusively uses German Schott glass and fittings through all production phases. The aim with HIVE Glass is to create an affordable, high quality glass product that is both aesthetically pleasing and a highly functional vaporization product. Vape’s existing customer base and distribution network will be the catalyst for expansion of this new HIVE product line. | |||||||||||||||||
Vape has also announced the launch of ‘HIVE Supply’ coming in early 2015. HIVE Supply is a packaging and sourcing division of Vape designed to serve as a competitively priced, comprehensive “one-stop shop” for all medical and recreational marijuana packaging needs. As with all of Vape’s products, HIVE Supply will operate in full compliance with all federal laws and the laws of each individual state in which it does business. HIVE Supply will focus on providing much-needed support to legal cannabis businesses in regards to sourcing consumer products, brand management and marketing services. | |||||||||||||||||
In connection with its launch of HIVE Supply and HIVE Glass, the Company plans to open ‘THE HIVE’ retail store and gallery in Los Angeles; an end-user experience to showcase the complete line of HIVE Ceramics and HIVE Glass products, while introducing HIVE Supply and all the new products being tested and developed through each vertical. | |||||||||||||||||
The Company has expanded its distribution network to include several distributors throughout the United States, Canada, Europe and South America to pair with its existing e-commerce website at www.HiveCeramics.com and its wholesale authorized dealer network of over 1,100 authorized shops. | |||||||||||||||||
The Company intends to rely on a combination of trademark, copyright, trade secret and patent laws in the United States as well as confidentiality procedures and contractual provisions to protect future proprietary technology and its brands, as they are developed. The Company has created or acquired and continues in the process of creating and/or acquiring proprietary vaporizers and e-cigarettes, and various trademarks, patents and copyrights for brands which are developed or in development. The Company is actively engaged in improving and expanding lines of branded products through business alliances and acquisitions, as well as developing its branded retail business expansion. Vape and its business units are organized and directed to operate strictly in accordance with all applicable state and federal laws. | |||||||||||||||||
RECENT ACQUISITIONS | |||||||||||||||||
On September 30, 2013, the then PeopleString Corporation, and its wholly-owned subsidiary, RewardString Corporation (“RewardString”), and Vape Holdings, Inc., a Nevada corporation (the “Private Company”), closed a Merger and Reorganization Agreement whereby the Private Company merged with RewardString, with the Private Company being the surviving entity (the “Merger”). The Private Company shareholders represented approximately 74.95% of the total issued and outstanding common stock of the merged company. | |||||||||||||||||
The merger among PeopleString, RewardString and the Private Company was accounted for as a reverse acquisition and change in reporting entity, whereby the Private Company was the accounting acquirer. The Merger was accounted for using the purchase method of accounting in accordance with ASC 805 Business Combinations, whereby the estimated purchase was allocated to tangible net assets acquired based upon preliminary fair values at the date of acquisition. Accordingly, the assets and liabilities of PeopleString and RewardString were recorded at fair value; the assets of PeopleString and RewardString were not significant. The historical results of operations and cash flows of the Private Company were reported since its inception on March 26, 2013 (“Inception”). On September 30, 2013, the Company approved a change in fiscal year end of the Company from December 31st to September 30th due to a change in reporting entity. | |||||||||||||||||
Vape commenced revenue generating operations late in the three month period ended March 31, 2014. | |||||||||||||||||
Effective as of January 8, 2014, the Company amended its Certificate of Incorporation with the Delaware Secretary of State pursuant to a certificate of amendment to formally change its name from PeopleString Corporation to Vape Holdings, Inc. (the “Name Change”). The Company’s Board of Directors and shareholders representing approximately 53.3% of the outstanding shares of the Company’s common stock approved the Name Change by written consent on December 24, 2013. | |||||||||||||||||
HIVE Ceramics Asset Purchase | |||||||||||||||||
On February 28, 2014, the Company entered into an Asset Purchase Agreement (the “Agreement”) with HIVE Ceramics, LLC (“HIVE”) whereby the Company agreed to acquire all right, title and interest to the HIVE vaporization product line and related intellectual property in exchange for the issuance of 500,000 shares of Series A Preferred Stock ( the “Series A Shares”) to HIVE. The Transaction formally closed on March 27, 2014. | |||||||||||||||||
HIVE had been in development of a ceramic product line for use in the vaporization market. The development of this initial product line was completed in 2014. No sales of this product line were made prior to the acquisition of the HIVE product on March 27, 2014. | |||||||||||||||||
The Company also received $250,000 in capital from HIVE at closing and, as a result, the Company issued a note payable to HIVE (the “HIVE Note”). The HIVE Note is dated March 27, 2014 payable to HIVE. In accordance with the Agreement, the Company issued the HIVE Note in exchange for the principal amount of $250,000. Per the terms of the HIVE Note, the maturity date is February 27, 2016 and the annual rate of interest is six percent (6%). No prepayment penalty exists. The HIVE Note is unsecured. | |||||||||||||||||
Employment Agreements for Michael Cook as Director of Business Development and Kyle Tracey as Chief Executive Officer were also executed at Closing. Per Mr. Cook’s employment agreement, he is entitled to $80,000 per year in salary over a two (2) year employment term In the event that his employment is terminated without cause he will be entitled to payment of his base salary for a six (6) month period following termination. Per Mr. Tracey’s employment agreement, he is entitled to $120,000 per year in salary over a two (2) year employment term. In the event that his employment is terminated without cause he will be entitled to the remaining salary of the two (2) year employment term plus the issuance of five percent (5%) of the Company’s common stock on a fully diluted basis. | |||||||||||||||||
As of September 30, 2014, the Company accrued wages and taxes of $29,446 and $59,273 for Mr. Cook and Mr. Tracey, respectively. | |||||||||||||||||
BASIS OF PRESENTATION | |||||||||||||||||
The accounting and reporting policies of the Company are in accordance with accounting principles generally accepted in the United States of America, which is based on the accrual method of accounting. | |||||||||||||||||
As a result of the merger between Vape and PeopleString, the Vape shareholders controlled the Company post-merger. This resulted in a change in reporting entity, whereby the historical financial statements of Vape are presented herein. The assets acquired and liabilities assumed were recorded at fair value; however, there were no significant assets acquired and approximately $24,000 in liabilities assumed. | |||||||||||||||||
USE OF ESTIMATES | |||||||||||||||||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates and assumptions include losses for warrant contingencies and the valuation of conversion features in notes. | |||||||||||||||||
FAIR VALUE OF FINANCIAL INSTRUMENTS | |||||||||||||||||
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants as of the measurement date. Applicable accounting guidance provides an established hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors that market participants would use in valuing the asset or liability. There are three levels of inputs that may be used to measure fair value: | |||||||||||||||||
Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. | |||||||||||||||||
Level 2 - Include other inputs that are directly or indirectly observable in the marketplace. | |||||||||||||||||
Level 3 - Unobservable inputs which are supported by little or no market activity. | |||||||||||||||||
The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Derivative instruments include the warrant liability (Level 2). Derivative instruments are valued using standard calculations/models that are primarily based on observable inputs, including volatilities and interest rates. Therefore, derivative instruments are included in Level 2. | |||||||||||||||||
Fair-value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of September 30, 2014 and the period March 26, 2013 (“Inception”) to September 30, 2013. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash, prepaids, accounts payable, accrued liabilities, notes payable, and convertible notes payable. Fair values for these items were assumed to approximate carrying values because of their short term in nature or they are payable on demand. | |||||||||||||||||
The following table presents the Company’s fair value hierarchy for assets and liabilities measured at fair value on a recurring basis at September 30, 2014: | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Assets | |||||||||||||||||
Cash and cash equivalents | $ | 48,370 | $ | – | $ | – | $ | 48,370 | |||||||||
Total assets measured at fair value | $ | 48,370 | $ | – | $ | – | $ | 48,370 | |||||||||
Liabilities | |||||||||||||||||
Derivative instruments | $ | – | $ | 2,464,232 | $ | – | $ | 2,464,232 | |||||||||
Total liabilities measured at fair value | $ | – | $ | 2,464,232 | $ | – | $ | 2,464,232 | |||||||||
The following table presents the Company’s fair value hierarchy for assets measured at fair value on a recurring basis at September 30, 2013: | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Assets | |||||||||||||||||
Cash and cash equivalents | $ | 568 | $ | – | $ | – | $ | 568 | |||||||||
Total assets measured at fair value | $ | 568 | $ | – | $ | – | $ | 568 | |||||||||
Liabilities | |||||||||||||||||
Derivative instruments | $ | – | $ | - | $ | – | $ | - | |||||||||
Total liabilities measured at fair value | $ | – | $ | - | $ | – | $ | - | |||||||||
INCOME TAXES | |||||||||||||||||
The Company adopted ASC 740-10-25 on formation, which provides criteria for the recognition, measurement, presentation and disclosure of uncertain tax position. The Company must recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. The Company did not recognize additional liabilities for uncertain tax positions as a result of the implementation of ASC 740-10-25 for the year ended September 30, 2014 and the period March 26, 2013 (“Inception”) to September 30, 2013. | |||||||||||||||||
CONCENTRATION | |||||||||||||||||
Credit Risk | |||||||||||||||||
At times, the Company maintains cash balances at a financial institution in excess of the FDIC insurance limit. In addition, at we extend credit to customers in the normal course of business, after we evaluate the credit worthiness. The Company does not expect to take any unnecessary credit risks causing significant causing write-offs of potentially uncollectible accounts. | |||||||||||||||||
REVENUE RECOGNITION | |||||||||||||||||
The Company recognizes revenues from product sales when (a) persuasive evidence that an agreement exists; (b) the products have been delivered; (c) the prices are fixed and determinable and not subject to refund or adjustment; and (d) collection of the amounts due is reasonably assured. Revenue is recorded when products are shipped. Sales tax is charged on retail sales in in the applicable district and recorded as a liability. Products are warrantied 24 hours of delivery if they are damaged during the shipping. | |||||||||||||||||
INVENTORY | |||||||||||||||||
Inventory is valued at the lower of cost or market, as determined primarily by the average cost inventory method, and are stated using the first-in, first-out (FIFO) method. Management will record a provision for loss for obsolete or slow moving inventory to reduce carrying amounts to net realizable value. | |||||||||||||||||
We purchase product sourced from China which we are required to pay 50% upon placing the order. Amounts paid for products, which have not been received, are recorded as prepaid inventory. There are no amounts paid which are in dispute or otherwise in which we may not recover the recorded value. | |||||||||||||||||
PROPERTY AND EQUIPMENT | |||||||||||||||||
Property and equipment are recorded at cost and depreciation is provided over the estimated useful lives of the related assets using the straight-line method for financial statement purposes. The estimated life of tooling related to our ceramic products is three (3) years. | |||||||||||||||||
IMPAIRMENT OF LONG-LIVED AND PURCHASED INTANGIBLE ASSETS | |||||||||||||||||
The Company has adopted Accounting Standards Codification (“ASC”) 350 “Intangibles – Goodwill and Other.” The Statement requires that long-lived assets and certain identifiable intangibles held and used by the Company be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Events relating to recoverability may include significant unfavorable changes in business conditions, recurring losses, or a forecasted inability to achieve break-even operating results over an extended period. The Company evaluates the recoverability of long-lived assets based upon forecasted undercounted cash flows. Should impairment in value be indicated, the carrying value of intangible assets will be adjusted, based on estimates of future discounted cash flows resulting from the use and ultimate disposition of the asset. ASC 350 also requires assets to be disposed of be reported at the lower of the carrying amount or the fair value less costs to sell. | |||||||||||||||||
Long-lived assets, such as property and equipment and purchased intangibles subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of the asset is measured by comparison of its carrying amount to undiscounted future net cash flows the asset is expected to generate. If such assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the asset exceeds its fair market value. Estimates of expected future cash flows represent management's best estimate based on currently available information and reasonable and supportable assumptions. Any impairment recognized is permanent and may not be restored. During the year ended September 30, 2014 and the period March 26, 2013 (“Inception”) to September 30, 2013, the Company did not record any impairment of its trademarks and pending patents as its expected future cash flows are in excess of their carrying amounts. | |||||||||||||||||
RESEARCH AND DEVELOPMENT | |||||||||||||||||
Research and development costs are expensed as incurred. The costs of materials and equipment that will be acquired or constructed for research and development activities, and that have alternative future uses, both in research and development, marketing or sales, will be classified as property and equipment and depreciated over their estimated useful lives. To date, research and development costs include the research and development expenses related to prototypes of the Company’s products. During the year ended September 30, 2014 and the Period from March 26, 2013 (“Inception”), research and development costs were $45,757 and $0, respectively. | |||||||||||||||||
CONVERTIBLE DEBT | |||||||||||||||||
Convertible debt is accounted for under the guidelines established by ASC 470-20 “Debt with Conversion and Other Options”. ASC 470-20 governs the calculation of an embedded beneficial conversion, which is treated as an additional discount to the instruments where derivative accounting (explained below) does not apply. The amount of the value of warrants and beneficial conversion feature may reduce the carrying value of the instrument to zero, but no further. The discounts relating to the initial recording of the derivatives or beneficial conversion features are accreted over the term of the debt. Many of the conversion features embedded in the Company's convertible notes are variable and are adjusted based on a discount to market prices which could cause an unlimited number of common stock to be issued. The management and board of directors currently have the ability to authorize additional shares of common stock primarily through their super voting rights under the Series A Preferred stock (See “NOTE 5 – CONVERTIBLE NOTES PAYABLE”). | |||||||||||||||||
When applicable, the Company calculates the fair value of warrants and conversion features issued with the convertible instruments using the Black-Scholes valuation method, using the same assumptions used for valuing employee options for purposes of ASC 718 “Compensation – Stock Compensation”, except that the contractual life of the warrant or conversion feature is used. Under these guidelines, the Company allocates the value of the proceeds received from a convertible debt transaction between the conversion feature and any other detachable instruments (such as warrants) on a relative fair value basis. The allocated fair value is recorded as a debt discount or premium and is amortized over the expected term of the convertible debt to interest expense. If the fair value exceeds the carrying value of the debt, an immediate charge to operations is recorded by management. Each reporting period, the Company will compute the estimated fair value of derivatives and record changes to operations. Currently no instruments are being recorded as such. | |||||||||||||||||
The Company accounts for modifications of its BCF’s in accordance with ASC 470-50 “Modifications and Extinguishments.” ASC 470-50 requires the modification of a convertible debt instrument that changes the fair value of an embedded conversion feature and the subsequent recognition of interest expense or the associated debt instrument when the modification does not result in a debt extinguishment. | |||||||||||||||||
DERIVATIVE FINANCIAL INSTRUMENTS | |||||||||||||||||
Derivative financial instruments, as defined in ASC 815, “Accounting for Derivative Financial Instruments and Hedging Activities”, consist of financial instruments or other contracts that contain a notional amount and one or more underlying (e.g. interest rate, security price or other variable), require no initial net investment and permit net settlement. Derivative financial instruments may be free-standing or embedded in other financial instruments. Further, derivative financial instruments are initially, and subsequently, measured at fair value and recorded as liabilities or, in rare instances, assets. | |||||||||||||||||
The Company does not use derivative financial instruments to hedge exposures to cash-flow, market or foreign-currency risks. However, the Company has issued financial instruments including senior convertible notes payable and freestanding stock purchase warrants with features that are either (i) not afforded equity classification, (ii) embody risks not clearly and closely related to host contracts, or (iii) may be net-cash settled by the counterparty. As required by ASC 815, in certain instances, these instruments are required to be carried as derivative liabilities, at fair value, in our financial statements. | |||||||||||||||||
The Company estimates the fair values of derivative financial instruments using various techniques (and combinations thereof) that are considered to be consistent with objectively measuring fair values. In selecting the appropriate technique, consideration is given to, among other factors, the nature of the instrument, the market risks that it embodies and the expected means of settlement. For less complex derivative instruments, such as free-standing warrants, the Company generally uses the Black-Scholes option valuation technique because it embodies all of the requisite assumptions (including trading volatility, estimated terms and risk free rates) necessary to fair value these instruments. Estimating fair values of derivative financial instruments requires the development of significant and subjective estimates that may, and are likely to, change over the duration of the instrument with related changes in internal and external market factors. In addition, option-based techniques are highly volatile and sensitive to changes in the trading market price of our common stock, which has a high-historical volatility. Since derivative financial instruments are initially and subsequently carried at fair values, the Company's operating results will reflect the volatility in these estimate and assumption changes. | |||||||||||||||||
PER-SHARE INFORMATION | |||||||||||||||||
Basic per-share information includes the weighted average shares outstanding during the periods. Dilutive per-share information includes shares available under convertible notes, options and warrants, to the extent these are not anti-dilutive. | |||||||||||||||||
The following is a summary of outstanding securities that would have been included in the calculation of diluted shares outstanding since the exercise prices did not exceed the average market value of the Company’s common stock if the Company generated net income for the year ended September 30, 2014 and the period March 26, 2013 (“Inception”) to September 30, 2013: | |||||||||||||||||
For the Year Ended | For the Period From March 26, | ||||||||||||||||
2013 (“Inception”) to | |||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2014 | 2013 | ||||||||||||||||
Series A Preferred stock | 500,000 | - | |||||||||||||||
Common stock options | 303,889 | - | |||||||||||||||
Common stock warrants | 1,184,727 | - | |||||||||||||||
Convertible notes | 843,213 | - | |||||||||||||||
2,831,829 | - | ||||||||||||||||
The Company would have excluded 125,000 options from the computation for the periods presented, as their exercise prices were in excess of the average closing market price of the Company’s common stock, causing their effects to be anti-dilutive using the treasury stock method. | |||||||||||||||||
STOCK-BASED COMPENSATION | |||||||||||||||||
ASC 718, “Share-Based Payment” requires that compensation cost related to share-based payment transactions be recognized in the financial statements. Share-based payment transactions within the scope of ASC 718 include stock options, restricted stock plans, performance-based awards, stock appreciation rights, and employee share purchase plans. | |||||||||||||||||
The Company adopted ASC 718, which requires disclosure of the fair value and other characteristics of stock options and more prominent disclosure about the effects of an entity’s accounting policy decisions with respect to stock-based compensation on reported net loss. The Company has reflected the expense of such stock based compensation based on the fair value at the grant date for awards consistent with the provisions of ASC 718. | |||||||||||||||||
In connection with the adoption of ASC 718, the fair value of our share-based compensation has been determined utilizing the Black-Scholes pricing model. The fair value of the options granted is amortized as compensation expense on a straight line basis over the requisite service period of the award, which is generally the vesting period. The fair value calculations involve significant judgments, assumptions, estimates and complexities that impact the amount of compensation expense to be recorded in current and future periods. Upon option exercise, the Company issues new shares of stock. | |||||||||||||||||
The following weighted average variables were used in the Black Scholes model for all option issuances valued during the fiscal year ended September 30, 2014 and the period March 26, 2013 (“Inception”) to September 30, 2013: | |||||||||||||||||
Year ended | Stock Price at | Dividend | Exercise Price | Risk Free | Volatility | Average | |||||||||||
March 31, | Grant Date | Yield | Interest Rate | Life | |||||||||||||
2014 | $1.66 | –% | $1.66 | 2.54% | 401% | 10 | |||||||||||
2013 | n/a | n/a | n/a | n/a | n/a | n/a | |||||||||||
The Company's accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows the provisions of Emerging Issues Task Force (“EITF”) 96-18, “Accounting for Equity Instruments That are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services”, codified into ASC 505. The measurement date for the fair value of the equity instruments issued is determined at the earlier of (i) the date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant or vendor's performance is complete. In the case of equity instruments issued to consultants, the fair value of the equity instrument is recognized over the term of the consulting agreement. | |||||||||||||||||
During the year ended September 30, 2014, the Company recorded $450,001 of non-cash “stock options expense” related to the options issued/granted. There was no such expense in the same period during fiscal year 2013. | |||||||||||||||||
RECENT ACCOUNTING PRONOUNCEMENTS | |||||||||||||||||
In May 2014, the FASB issued Accounting Standards Update No. 2014-09, “Revenue from Contracts with Customers”, which supersedes most of the current revenue recognition requirements. The core principle of the new 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 these goods or services. New disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers are also required. This guidance is effective for the Company in the first quarter of fiscal year 2018 and early application is not permitted. Entities must adopt the new guidance using one of two retrospective application methods. The Company is currently evaluating the standard but does not expect it to have a material impact on our financial position, results of operations or cash flows. | |||||||||||||||||
The Financial Accounting Standards Board issues Accounting Standard Updates (“ASUs”) to amend the authoritative literature in Accounting Standards Codification (“ASC”). There have been a number of ASUs to date that amend the original text of ASC. The Company believes those issued to date either (i) provide supplemental guidance, (ii) are technical corrections, (iii) are not applicable to the Company or (iv) are not expected to have a significant impact on the Company. | |||||||||||||||||
Going_Concern
Going Concern | 12 Months Ended |
Sep. 30, 2014 | |
Going Concern [Abstract] | |
GOING CONCERN | NOTE 2. GOING CONCERN |
Vape’s financial statements reflect a net loss of $25,063,658 for the year ended September 30, 2014, and net cash used in operations of $980,003. The Company also has a working capital deficit of $36,138. These matters raise substantial doubt about the ability of Vape to continue as a going concern. Management expects to obtain funding for the new operations for the foreseeable future; however, there are no assurances that the Company will obtain such funding. Vape’s financial statements do not include any adjustments to reflect the possible effects on recoverability and classification of assets or the amounts and classification of liabilities that may result from the inability to continue as a going concern. See Note 11 for subsequent events regarding financing activities. |
Accrued_Expenses
Accrued Expenses | 12 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Accrued Expenses [Abstract] | |||||||||
ACCRUED EXPENSES | NOTE 3. ACCRUED EXPENSES | ||||||||
The following is a summary of accrued expenses as of September 30, 2014 and 2013: | |||||||||
September 30, | September 30, | ||||||||
2014 | 2013 | ||||||||
Accrued interest | $ | 16,300 | $ | - | |||||
Accrued interest - related party | 18,325 | 7,573 | |||||||
Accrued wages and taxes | 108,374 | - | |||||||
Other | 26,514 | - | |||||||
$ | 169,513 | $ | 7,573 |
Third_Party_Debt
Third Party Debt | 12 Months Ended |
Sep. 30, 2014 | |
Third Party Debt/ ANSLOW & JACLIN, LLP CONVERTIBLE PROMISSORY NOTE [Abstract] | |
THIRD PARTY DEBT | NOTE 4. THIRD PARTY DEBT |
CONVERTIBLE NOTES PAYABLE | |
On January 31, 2014, the Company issued a 10% Convertible Note (the “10% Note”) to a third-party consultant (the “Holder”) in the principal amount of $100,000 for services rendered to the Company. The 10% Note is not secured by any collateral or any assets pledged to the Holder. The maturity date is January 31, 2015 and the annual rate of interest is ten percent (10%). Subject to certain limitations, the Holder can, at its sole discretion, convert the outstanding and unpaid principal and interest into fully paid and nonassessable shares of the Company’s common stock. The conversion price for the 10% Note is $2.00 per share. We recorded a discount totaling $84,375 related to the beneficial conversion feature embedded in the note upon issuance. As of May 1, 2014, the holder discontinued performing services for the Company and thus we extinguished the remaining balance of $58,333 and unamortized discount of $63,281. On July 10, 2014, the holder of the 10% Note converted principal of $41,667 and outstanding accrued and unpaid interest of $345 into 21,006 shares of the Company’s common stock at a per share conversion price of $2.00, which is in accordance with the terms of the convertible note payable. The conversion of the 10% Note was in full satisfaction of the note payable. We amortized $21,094 of the discount to interest expense during the year ended September 30, 2014. The Company recorded $793 to interest expense for the excess in fair market value of the stock issued. | |
Beginning on February 11, 2014, the Company issued 6% Convertible Notes (the “6% Notes”) pursuant to subscription agreements to ten (10) accredited investors (the “Holders”) with the aggregate principal amount of $230,000. The 6% Notes are not secured by any collateral or any assets pledged to the Holders. The maturity dates are from February 28, 2015 to March 31, 2015, and the annual rate of interest is six percent (6%). Subject to certain limitations, the Holders can, at their sole discretion, convert the outstanding and unpaid principal and interest of their notes into fully paid and nonassessable shares of the Company’s common stock. The conversion price of these 6% Notes is the average of the fifteen (15) lowest daily VWAP’s occurring during the twenty (20) consecutive trading days immediately preceding the date each Holder elects convert all of their 6% Note minus a discount of 40%. In no event will the conversion price be less than $1.00 per share or greater than $3.00 per share. The Company had a preexisting relationship with each of the Holders, and no general solicitation or advertising was used in connection with the issuance of the 6% Notes. We recorded a discount totaling $92,000 related to the beneficial conversion feature embedded in the notes upon issuance and amortized $57,667 of the discount to interest expense during the year ended September 30, 2014. | |
On July 28, 2014, a holder of the 6% Notes converted principal of $10,000 and outstanding accrued and unpaid interest of $252 into 7,830 shares of the Company’s common stock at a per share conversion price of $1.31, which is in accordance with the terms of the convertible note payable. The conversion of this 6% Note was in full satisfaction of the note payable as to this holder. The Company recorded $530 to interest expense for the excess in fair market value of the stock issued. | |
CONVERTIBLE NOTES PAYABLE, LONG-TERM | |
On February 18, 2014, the Company issued 8% Convertible Notes to two third parties to cover outstanding accounts payable in the amount of $20,000. Per the terms of the notes, the aggregate principal balance is $20,000, and is not secured by any collateral or any assets pledged to the holders. The maturity date is February 18, 2016, and the annual rate of interest is eight percent (8%). Subject to certain limitations, the holders can, at their sole discretion, convert the outstanding and unpaid principal and interest into fully paid and nonassessable shares of the Company’s common stock. The conversion price for the notes is the lowest market closing price per share within the previous twenty (20) market days of the date of conversion minus a discount of forty percent (40%). We recorded a discount totaling $8,000 related to the beneficial conversion feature embedded in the notes upon issuance. We amortized $1,000 and $1,667 of the discount to interest expense during the three and nine months ended June 30, 2014, respectively. On October 28, 2014, the Company received a Notice of Conversion on two (2) 8% Convertible Notes issued to third parties on February 18, 2014 to cover expenses of the Company. The noteholders converted aggregate principal of $20,000 and aggregate outstanding accrued and unpaid interest of $1,100 into an aggregate of 42,370 shares of restricted common stock of the Company at a per share conversion price of $0.498 in accordance with the terms of their convertible notes payable. The conversion of these notes was in full satisfaction of the notes payable. The shares of common stock under the conversion were issued by the Company on November 7, 2014 and therefore classified the note as long-term on the accompanying balance sheet. | |
On March 19, 2014, the Company issued an 8% Convertible Note to W-net Fund I, LP in exchange for the contribution of capital to the Company in the amount of $198,000 (the “W-net Note”). Per the terms of the W-net Note, the principal balance is $198,000, and is not secured by any collateral or any assets pledged to the holder. The maturity date is November 19, 2014 and interest accrues at 8% per annum. Subject to certain limitations, the holder can, at its sole discretion, convert the outstanding and unpaid principal and interest into fully paid and nonassessable shares of the Company’s common stock. The conversion price for the W-net Note is eighty percent (80%) of the average of the three (3) lowest daily closing bid prices (the 3 lowest prices will be calculated on a VWAP basis) occurring during the ten (10) consecutive Trading Days immediately preceding the applicable conversion date on which the holder elects to convert. In no event shall the conversion price be less than $1.00 or greater than $300. We recorded a discount totaling $158,400 related to the beneficial conversion feature embedded in the notes upon issuance. On June 2, 2014, the W-net Note was assigned in its entirety to a third party free of any liens or encumbrances. We amortized $138,600 of the discount to interest expense during the year ended September 30, 2014. On October 28, 2014, the Company received a Notice of Conversion for the W-net Note. The noteholder converted principal of $198,000 and outstanding accrued and unpaid interest of $9,764 into 207,764 shares of restricted common stock of the Company at a per share conversion price of $1.00 in accordance with the terms of the convertible note payable. The conversion of this note was in full satisfaction of the note payable. The shares of common stock under the conversion were issued by the Company on November 7, 2014 and therefore classified the note as long-term on the accompanying balance sheet. | |
During the year ended September 30, 2014, the Company had recorded $19,264 of interest expense related to these notes. As of September 30, 2014, future principal payments of third party debt are $476,333 for the fiscal year ending September 30, 2015. The Company has the ability to increase the authorized common stock of the Company in the event that the convertible notes require more shares than available. |
Related_Party_Debt
Related Party Debt | 12 Months Ended |
Sep. 30, 2014 | |
Related Party Debt [Abstract] | |
RELATED PARTY DEBT | NOTE 5. RELATED PARTY DEBT |
RELATED PARTY NOTES PAYABLE | |
The Company had outstanding accounts payable balance to a related party (shareholder of the Company) in the amount of $15,000 as of September 30, 2013. This payable was converted into a note payable on December 7, 2013. The note payable bears interest of 6% per annum with a maturity date of December 1, 2016. | |
On December 7, 2013, the Company issued a note payable to a shareholder of the Company in the amount of $23,462 for monies previously borrowed from shareholder. The note is unsecured and bears interest of 6% per annum and matures on December 1, 2016. | |
RELATED PARTY NOTES PAYABLE, LONG-TERM | |
On May 12, 2014, the Company issued a note payable to its President, Joe Andreae in the amount of $40,000 for monies previously borrowed during the three and six months ended March 31, 2014 (the “Andreae Note”). The note is unsecured and bears interest of 6% per annum and matures on May 1, 2016. On December 4, 2014, the Company repaid the principal balance of $40,000 and accrued interest of $1,348 on the Andreae Note and therefore classified the note as long-term on the accompanying balance sheet. | |
On August 11, 2014, the Company issued a 6% note payable to its President, Joe Andreae, for monies borrowed from Mr. Andreae to cover outstanding accounts payable in the amount of $12,828 (the “Andreae Note II”). Per the terms of the Andreae Note, the original principal balance is $12,828, and is not secured by any collateral or any assets pledged to the holder. The maturity date is November 30, 2014, and the annual rate of interest is six percent (6%). The monies were funded during the three and nine months ended June 30, 2014. On December 4, 2014, the Company repaid principal balance of $12,828 and accrued interest of $240 on the Andreae Note II and therefore classified the note as long-term on the accompanying balance sheet. | |
See NOTE 1 regarding a $250,000 note payable to HIVE. | |
During the year ended September 30, 2014, the Company had recorded $8,879 of interest expense related to these notes. As of September 30, 2014, future principal payments of related party notes payable are $52,828 and $288,462 for the fiscal years ending September 30, 2015 and 2016, respectively. | |
RELATED PARTY CONVERTIBLE NOTES PAYABLE | |
On October 16, 2013, the Company issued an 8% Convertible Note to a shareholder (“8% Note I”), in exchange for $2,420 which the Company received on April 15, 2013. Per the terms of 8% Note I, the original principal balance was $2,420, and was not secured by any collateral or any assets pledged to the holder. The maturity date was April 15, 2015. Subject to certain limitations, the holder, at its sole discretion, could convert the outstanding and unpaid principal and interest into fully paid and nonassessable shares of the Company’s common stock. The conversion price for 8% Note I was the lowest market closing price per share within the previous twenty (20) market days of the date of conversion minus a discount of forty percent (40%). The note was converted on December 23, 2013 into 3,990 shares. We recorded a discount totaling $968 related to the beneficial conversion feature embedded in the note upon issuance. Such amount was fully accreted to interest expense during the year ended September 30, 2014 due to the conversion, together with accrued interest of $134. | |
On October 16, 2013, the Company issued an 8% Convertible Note to a shareholder (“8% Note II”), in exchange for $30,300 which the Company received on July 3, 2013. Per the terms of 8% Note II, the original principal balance was $30,300, and was not secured by any collateral or any assets pledged to the holder. The maturity was July 3, 2015. Subject to certain limitations, the holder, at its sole discretion, could convert the outstanding and unpaid principal and interest into fully paid and nonassessable shares of the Company’s common stock. The conversion price for 8% Note II was the lowest market closing price per share within the previous twenty (20) market days of the date of conversion minus a discount of forty percent (40%). The note was converted on December 23, 2013 into 49,139 shares of the Company’s common stock. We recorded a discount totaling $12,120 related to the beneficial conversion feature embedded in the note upon issuance. Such amount was fully accreted to interest expense during the year ended September 30, 2014 due to the conversion, together with accrued interest of $1,239. | |
On October 16, 2013, the Company issued an 8% Convertible Note to a shareholder (“8% Note III”) (collectively, the “8% Notes), in exchange for $180,940 which the Company received on March 5, 2013. Per the terms of 8% Note III, the original principal balance is $180,940, and is not secured by any collateral or any assets pledged to the holder. The maturity date is March 5, 2015, and the annual rate of interest is eight percent (8%). Subject to certain limitations, the holder can, at its sole discretion, convert the outstanding and unpaid principal and interest into fully paid and nonassessable shares of the Company’s common stock. The conversion price for 8% Note III is the lowest market closing price per share within the previous twenty (20) market days of the date of conversion minus a discount of forty percent (40%). We recorded a discount totaling $72,376 related to the beneficial conversion feature embedded in the note upon issuance. On July 16, 2014, the note holder converted principal of $180,940 and outstanding accrued and unpaid interest of $19,750 into 296,003 shares of the Company’s common stock at a per share conversion price of $0.678, which is in accordance with the terms of the convertible note payable. The conversion of the 8% Note III was in full satisfaction of the note payable. Upon conversion, we recorded the remaining unamortized discount of $31,665 to interest expense during the year ended September 30, 2014. The Company recorded $44,239 to interest expense for the excess in fair market value of the stock issued. | |
On March 17, 2014, the Company issued an 8% Convertible Note to Jerome Kaiser, former CEO, CFO and Director of the Company for services rendered to the Company in the amount of $50,000 (the “Kaiser Note”) which was charged to expense during the three months March 31, 2014. Per the terms of the Kaiser Note, the principal balance is $50,000, and is not secured by any collateral or any assets pledged to the holders. The maturity date is March 17, 2015, and the annual rate of interest is eight percent (8%). Subject to certain limitations, the holder can, at his sole discretion, convert the outstanding and unpaid principal and interest into fully paid and nonassessable shares of the Company’s common stock. The conversion price for the Kaiser Note is the market closing price of the market day immediately preceding the date of conversion minus twenty percent (20%). We recorded a discount totaling $10,000 related to the beneficial conversion feature embedded in the notes upon issuance. We amortized $5,833 of the discount to interest expense during the year ended September 30, 2014. | |
RELATED PARTY CONVERTIBLE NOTES PAYABLE, LONG-TERM | |
On May 12, 2014, in connection with the 6% Notes, the Company issued a note for $40,000 to Kyle Tracey, which is recorded as a related party convertible note payable. We recorded a discount totaling $16,000 related to the beneficial conversion feature embedded in the 6% note to Mr. Tracey upon issuance. We amortized $6,667 of the discount to interest expense during the year ended September 30, 2014. On October 28, 2014, the Company received a Notice of Conversion on the 6% Convertible Note issued on May 13, 2014 to Mr. Tracey (the “Tracey PPM Note”) as part of a private placement transaction in exchange for capital of $40,000. Mr. Tracey converted principal of $40,000 and outstanding accrued and unpaid interest of $1,098 into 41,098 shares of restricted common stock of the Company at a per share conversion price of $1.00 in accordance with the terms of the convertible note. The conversion of the Tracey PPM Note was in full satisfaction of the note. The shares of common stock under the conversion were issued by the Company on November 7, 2014 and therefore classified the note as long-term on the accompanying balance sheet. | |
On February 18, 2014, the Company issued an 8% Convertible Note to Kyle Tracey for monies borrowed from Mr. Tracey to cover outstanding accounts payable in the amount of $10,612 (the “Tracey Note”). Per the terms of the Tracey Note, the original principal balance is $10,612, and is not secured by any collateral or any assets pledged to the holder. The maturity date is February 18, 2016, and the annual rate of interest is eight percent (8%). Subject to certain limitations, the holder can, at its sole discretion, convert the outstanding and unpaid principal and interest into fully paid and nonassessable shares of the Company’s common stock. The conversion price for the Tracey Note is the lowest market closing price per share within the previous twenty (20) market days of the date of conversion minus a discount of forty percent (40%). We recorded a discount totaling $4,245 related to the beneficial conversion feature embedded in the notes upon issuance. We amortized $1,415 of the discount to interest expense during the year ended September 30, 2014. On October 28, 2014, the Company received a Notice of Conversion the Tracey Note. Mr. Tracey converted principal of $10,612 and outstanding accrued and unpaid interest of $584 into 22,481 shares of restricted common stock of the Company at a per share conversion price of $0.498 in accordance with the terms of the convertible note payable. The conversion of the Tracey Note was in full satisfaction of the note payable. The shares of common stock under the conversion were issued by the Company on November 7, 2014 and therefore classified the note as long-term on the accompanying balance sheet. | |
On May 12, 2014, the Company issued an 8% Convertible Note to Kyle Tracey for monies borrowed from Mr. Tracey to cover outstanding accounts payable in the amount of $11,042 (the “Tracey Note II”). Per the terms of the Tracey Note II, the original principal balance is $11,042, and is not secured by any collateral or any assets pledged to the holder. The maturity date is May 12, 2016, and the annual rate of interest is eight percent (8%). Subject to certain limitations, the holder can, at its sole discretion, convert the outstanding and unpaid principal and interest into fully paid and nonassessable shares of the Company’s common stock. The conversion price for the Tracey Note II is the lowest market closing price per share within the previous twenty (20) market days of the date of conversion minus a discount of forty percent (40%). We recorded a discount totaling $4,417 related to the beneficial conversion feature embedded in the notes upon issuance. We amortized $920 of the discount to interest expense during the year ended September 30, 2014. On October 28, 2014, the Company received a Notice of Conversion on the Tracey Note II. Tracey converted principal of $11,042 and outstanding accrued and unpaid interest of $407 into 22,989 shares of restricted common stock of the Company at a per share conversion price of $0.498 in accordance with the terms of the convertible note payable. The conversion of the Tracey Note II was in full satisfaction of the note payable. The shares of common stock under the conversion were issued by the Company on November 7, 2014 and therefore classified the note as long-term on the accompanying balance sheet. | |
On May 12, 2014, the Company issued an 8% Convertible Note to its Director of Business Development, Michael Cook, for monies borrowed from Mr. Cook to cover outstanding accounts payable in the amount of $11,825 (the “Cook Note”). Per the terms of the Cook Note, the original principal balance is $11,825, and is not secured by any collateral or any assets pledged to the holder. The maturity date is May 12, 2016, and the annual rate of interest is eight percent (8%). Subject to certain limitations, the holder can, at its sole discretion, convert the outstanding and unpaid principal and interest into fully paid and nonassessable shares of the Company’s common stock. The conversion price for the Cook Note is the lowest market closing price per share within the previous twenty (20) market days of the date of conversion minus a discount of forty percent (40%). We recorded a discount totaling $4,730 related to the beneficial conversion feature embedded in the notes upon issuance. We amortized $985 of the discount to interest expense during the year ended September 30, 2014. On October 28, 2014, the Company received a Notice of Conversion on the “Cook Note. Mr. Cook converted principal of $11,825 and outstanding accrued and unpaid interest of $435 into 24,619 shares of restricted common stock of the Company at a per share conversion price of $0.498 in accordance with the terms of the convertible note payable. The conversion of the Cook Note was in full satisfaction of the note payable. The shares of common stock under the conversion were issued by the Company on November 7, 2014 and therefore classified the note as long-term on the accompanying balance sheet. | |
On August 11, 2014, the Company issued a second 8% Convertible Note to Mr. Cook for monies borrowed from Mr. Cook to cover outstanding accounts payable in the amount of $15,115 (the “Cook Note II”). Per the terms of the Cook Note II, the original principal balance is $15,115, and is not secured by any collateral or any assets pledged to the holder. The maturity date is August 11 2016, and the annual rate of interest is eight percent (8%). Subject to certain limitations, the holder can, at its sole discretion, convert the outstanding and unpaid principal and interest into fully paid and nonassessable shares of the Company’s common stock. The conversion price for the Cook Note II is the lowest market closing price per share within the previous twenty (20) market days of the date of conversion minus a discount of forty percent (40%). We recorded a discount totaling $6,046 related to the beneficial conversion feature embedded in the notes upon issuance. On October 28, 2014, the Company received a Notice of Conversion on the Cook Note II. Mr. Cook converted principal of $15,115 and outstanding accrued and unpaid interest of $255 into 30,864 shares of restricted common stock of the Company at a per share conversion price of $0.498 in accordance with the terms of the convertible note payable. The conversion of the Cook Note II was in full satisfaction of the note payable. The shares of common stock under the conversion were issued by the Company on November 7, 2014 and therefore classified the note as long-term on the accompanying balance sheet. | |
On August 11, 2014, the Company issued an 8% Convertible Note to Mr. Tracey for monies borrowed from Mr. Tracey to cover outstanding accounts payable in the amount of $216,001 (the “Tracey Note III”). Per the terms of the Tracey Note III, the original principal balance is $216,001, and is not secured by any collateral or any assets pledged to the holder. The maturity date is August 11, 2016, and the annual rate of interest is eight percent (8%). Subject to certain limitations, the holder can, at its sole discretion, convert the outstanding and unpaid principal and interest into fully paid and nonassessable shares of the Company’s common stock. The conversion price for the Tracey Note III is the lowest market closing price per share within the previous twenty (20) market days of the date of conversion minus a discount of forty percent (40%). We recorded a discount totaling $86,401 related to the beneficial conversion feature embedded in the notes upon issuance. On October 28, 2014, the Company received a Notice of Conversion on the Tracey Note III. Mr. Tracey converted principal of $216,001 and outstanding accrued and unpaid interest of $3,645 into 441,057 shares of restricted common stock of the Company at a per share conversion price of $0.498 in accordance with the terms of the convertible note payable. The shares of common stock under the conversion were issued by the Company on November 7, 2014 and therefore classified the note as long-term on the accompanying balance sheet. | |
During the year ended September 30, 2014, the Company had recorded $25,572 of interest expense related to these notes. As of September 30, 2014, future principal payments of related party convertible notes payable are $90,000 and $284,595 for the fiscal years ending September 30: 2015 and 2016, respectively. The Company has the ability to increase the authorized common stock of the Company in the event that the convertible notes require more shares than available. | |
Anslow_Jaclin_LLP_Convertible_
Anslow & Jaclin, LLP Convertible Promissory Note | 12 Months Ended |
Sep. 30, 2014 | |
Third Party Debt/ ANSLOW & JACLIN, LLP CONVERTIBLE PROMISSORY NOTE [Abstract] | |
ANSLOW & JACLIN, LLP CONVERTIBLE PROMISSORY NOTE | NOTE 6. ANSLOW & JACLIN, LLP CONVERTIBLE PROMISSORY NOTE |
As of February 1, 2013, the Company had incurred certain debt owed to its former legal counsel, Anslow & Jaclin, LLP. In or about May 2013, this debt was sold to certain founding shareholders of the Private Company on a pro rata basis (the “A&J Debt”). The Company later issued a 6% Convertible Note documenting the convertible A&J Debt acquired by the founding shareholders of the Private Company (the “A&J Note”). Per the terms of the A&J Note, the original principal balance is $17,750, and is not secured by any collateral or any assets pledged to the holder. The maturity date is December 31, 2015, and the annual rate of interest is six percent (6%). Subject to certain limitations, a majority-in-interest of the shareholders can convert the outstanding and unpaid principal and interest into fully paid and nonassessable shares of the Company’s common stock. The conversion price for the A&J Note is $0.002 per share. Additionally, the Company shall have the right to call the conversion of the A&J Note upon completion of the merger transaction between the Private Company and Vape and an increase in the authorized common stock of Vape. We recorded a discount totaling $17,750 related to the beneficial conversion feature embedded in the note upon issuance. | |
On December 24, 2013, the Company converted the entire principal and accrued interest of the A&J Note in the amount of $17,799 into 222,498 shares of the Company’s common stock at a per share conversion price of $0.002 issued on a pro rata basis to the shareholders of the Private Company. All fractional shares created by the conversion of the A&J Note were rounded to the nearest whole share. If the fraction created was one half or less, it was rounded down to the nearest whole share. If the fraction was more than one half, it was rounded up to the nearest whole share. Each shareholder received at least one share. We fully accreted the discount of $17,750 to interest expense during the three months ended December 31, 2013 due to the conversion, together with accrued interest of $1,592. | |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended |
Sep. 30, 2014 | |
Commitments and Contingencies [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 7. COMMITMENTS AND CONTINGENCIES |
EMPLOYMENT AGREEMENTS | |
On March 27, 2014, the Company entered into an Executive Employment Agreement with Kyle Tracey (the “Tracey Agreement”) pursuant to which we engaged Mr. Tracey to provide executive services as our Chief Executive Officer for a period of two (2) years. Mr. Tracey shall receive an annual salary of $120,000, he shall be eligible for any benefits made generally available by the Company, he shall be eligible to receive any bonuses made generally available by the Company, and he shall be reimbursed for any reasonable expenses incurred while performing his duties as the Company’s Chief Executive Officer. Additionally, Mr. Tracey is entitled to receive severance in the form of salary continuation of his base salary for the remainder of the two year employment term if terminated without cause plus the issuance of 5% of the Company’s common stock on a fully diluted basis. | |
Additionally, on June 28, 2014, Mr. Tracey was granted 190,000 stock options pursuant to the Company’s 2014 Incentive and Nonstatutory Stock Option Plan (see Note 9). The stock options were granted at an exercise price of $1.66 which was equal to the fair market value of one share of the Company’s common stock on the date of grant | |
On March 27, 2014, the Company entered into an Executive Employment Agreement with Michael Cook (the “Cook Agreement”) pursuant to which we engaged Mr. Cook to provide executive services as our Director of Business Development for a period of two (2) years. Mr. Cook shall receive an annual salary of $80,000, he shall be eligible for any benefits made generally available by the Company, he shall be eligible to receive any bonuses made generally available by the Company, and he shall be reimbursed for any reasonable expenses incurred while performing his duties as the Company’s Director of Business Development. Additionally, Mr. Cook is entitled to receive severance equal to six (6) months base salary if terminated without cause by the Company. | |
Additionally, on June 28, 2014, Mr. Cook was granted 100,000 stock options pursuant to the Company’s 2014 Incentive and Nonstatutory Stock Option Plan which was disclosed on a Current Report on Form 8-K filed on July 3, 2014. The stock options were granted at an exercise price of $1.66 which was equal to the fair market value of one share of the Company’s common stock on the date of grant. | |
On April 21, 2014 , the Company entered into an Executive Employment Agreement with Joe Andreae (the “Andreae Agreement”) pursuant to which we engaged Mr. Andreae to provide executive services as our President for a period of two (2) years. Mr. Andreae shall receive an annual salary of $75,000, he shall be eligible for any benefits made generally available by the Company, he shall be eligible to receive any bonuses made generally available by the Company, and he shall be reimbursed for any reasonable expenses incurred while performing his duties as the Company’s President. Additionally, Mr. Andreae is entitled to receive severance equal to six (6) months base salary if terminated without cause by the Company. | |
Mr. Andreae is also eligible to participate in the Company’s stock option plan. On June 28, 2014, Mr. Andreae was granted 190,000 stock options pursuant to the Company’s 2014 Incentive and Nonstatutory Stock Option Plan which was disclosed on a Current Report on Form 8-K filed on July 3, 2014. The stock options were granted at an exercise price of $1.66 which was equal to the fair market value of one share of the Company’s common stock on the date of grant. | |
On June 25, 2014, the Company entered into an Executive Employment Agreement with Allan Viernes (the “Viernes Agreement”) pursuant to which we engaged Mr. Viernes to provide executive services as our Chief Financial Officer for a period of one (1) year. Mr. Viernes shall receive a monthly salary of $4,000, he shall be eligible for any benefits made generally available by the Company, he shall be eligible to receive any bonuses made generally available by the Company, and he shall be reimbursed for any reasonable expenses incurred while performing his duties as the Company’s Chief Financial Officer. Mr. Viernes and/or the Company may terminate the Viernes Agreement at any time upon thirty (30) days written notice. | |
SETTLEMENT LIABILITIES | |
On or about April 4, 2014, Cranshire Capital, LP, a private investment fund with its principal place of business in Northbrook, Illinois (“Cranshire”), filed a lawsuit against the Company. Cranshire alleged that it was a holder of various warrants to purchase common stock ("Warrant Shares") issued by the Company back in May 2011, and that by reason of certain equity issuances made by the Company, the exercise and conversion prices in Cranshire’s warrants should have been reset. Specifically, Cranshire alleged that the warrants contained “full ratchet anti-dilution provisions” whereby certain “subsequent equity sales” made by the Company at any time after 2011 below the exercise price on the warrants resulted in Cranshire’s exercise price adjusting down to the same price at which the equity was issued. In addition, a corresponding increase in the Warrant Shares issuable resulted from the adjustment to maintain the aggregate value of the warrants. | |
On April 16, 2014, the Company, entered into separate settlement agreements with Cranshire and another warrant holder, Iroquois Master Fund, Ltd. (“Iroquois”). Pursuant to the settlement agreements, the Company agreed to issue an aggregate of 583,427 shares of the Company’s common stock to the settling holders upon partial exercise of their warrant positions pursuant to exercise notices previously submitted by them. An additional 337,626 Warrant Shares remain outstanding and may be exercised by the settling holders in the future at their election. The Company and the settling holders provided mutual general releases. In connection with the settlements, Cranshire agreed to dismiss with prejudice its action filed on April 4, 2014 against the Company. | |
The settlement agreements also provide for certain selling restrictions on the settling holders. Each holder separately agreed with the Company that (i) on any trading day on which the aggregate dollar volume of the common stock on the principal exchange on which the common stock of the company is then traded is less than $1,000,000, the holders shall not sell a number of Warrant Shares that exceeds 15% of the daily trading volume of the common stock on such trading day as measured on the principal exchange on which such common stock is then traded and (ii) on any trading day on which the aggregate dollar volume of the common stock on the principal exchange on which the common stock of the Company is then traded is greater than or equal to $1,000,000, the holders shall not sell a number of Warrant Shares that exceeds 20% of the daily trading volume of the common stock on such trading day as measured on the principal exchange on which such common stock is then traded. In addition, the settlement agreements contain what is commonly referred to as “most favored nation” provisions whereby the settling holders are entitled to the benefit of more favorable terms if any future agreements are entered into with similar warrant holders on more favorable terms. | |
Upon learning of the settlements with Cranshire and Iroquois, the Warberg WF I, LP and related entities (collectively, the “Warberg Entities”) disputed their original exercise which resulted in 3,542 shares issued to them | |
On April 22, 2014, the Company entered into a settlement agreement with the Warberg Entities. Pursuant to the settlement agreement, the Company agreed to issue an aggregate of 356,415 shares of the Company’s common stock in the aggregate to the settling holders upon partial exercise of their warrant positions pursuant to exercise notices previously submitted by them. An additional 378,855 Warrant Shares remained outstanding to be exercised by the settling holders in the future at their election. Warrants Shares of 3,992,800 were cancelled as a result of the settlement. | |
The Company and the Warberg Entities provided mutual general releases and the settlement agreement with the Warberg Entities included identical selling restrictions to the Cranshire and Iroquois settlements. | |
On April 24, 2014, the Company entered into a settlement agreement with Sphinx Trading, LP (“Sphinx”). Pursuant to the settlement agreement, the Company agreed to issue an aggregate of 481,569 shares of the Company’s common stock to the settling holder upon partial exercise of its warrants pursuant to exercise notices previously submitted by it. An additional 100 Warrant Shares remain outstanding and may be exercised by the settling holder in the future at its election. Warrants Shares of 9,559 were cancelled as a result of the settlement. | |
The Company and Sphinx provided mutual general releases and the settlement agreement with Sphinx included identical selling restrictions and most favored nations provisions as provided in the Cranshire and Iroquois settlements. | |
On April 24, 2014, Cranshire was issued an additional 262,523 shares of common stock of the Company pursuant to a notice of exercise of their outstanding, but unissued warrants as set forth in its settlement agreement with the Company. Following this exercise Cranshire has 2,000 warrants outstanding. Warrants Shares of 5,211 were cancelled as a result of the settlement. | |
On April 28, 2014, the Warberg Entities were issued an additional 368,903 shares of common stock of the Company pursuant to a notice of exercise in full of their outstanding, but unissued warrants as set forth in their settlement agreement with the Company. Following this exercise, the Warberg Entities had zero warrants outstanding. Warrants Shares of 9,952 were cancelled as a result of the settlement. | |
On May 14, 2014, Cranshire was issued an additional 99,538 shares of common stock of the Company pursuant to a notice of exercise in full of a warrant that was assigned to Cranshire from an unsettled warrant holder. A total of 3,620 Warrant Shares were cancelled as a result of the conversion and no further Warrant Shares were outstanding in connection with this assignment. | |
On May 27, 2014, Cranshire was issued an additional 195,359 shares of common stock of the Company pursuant to a notice of exercise of a warrant in full that was assigned to Cranshire from an unsettled warrant holder. A total of 10,956 Warrant Shares were cancelled as a result of the conversion and no further Warrant Shares were outstanding in connection with this assignment. | |
On June 4, 2014, an unsettled warrant holder was issued 344,456 shares of common stock of the Company pursuant to a partial notice of cashless exercise. A total of 21,044 Warrant Shares were cancelled as a result of the conversion. | |
On June 12, 2014, the same warrant holder was issued 373,576 shares of common stock of the Company pursuant to notice of exercise in full of the remainder of its warrant position. A total of 28,468 Warrant Shares were cancelled as a result of the conversion. Following this exercise, the warrant holder had zero warrants outstanding. | |
On August 21, 2014, Iroquois was issued 62,662 shares of common stock of the Company pursuant to notice of exercise in full of the remainder of its warrant position. A total of 2,742 Warrant Shares were cancelled as a result of the conversion. Following this exercise, the warrant holder had zero warrants outstanding. | |
As a result of the settlements, the exercise price of the Warrants decreased from $28.00 per share to $0.114 per share and the Warrants outstanding increased from 34,200 to 8,400,000. Each of the above Warrant conversions occurred at the same $0.114 per share price. As of the time of this filing, the Company has issued 3,128,428 shares of common stock to its warrant holders at $0.114 per share as a result of the above warrant exercises and has cancelled 4,083,303 Warrants via settlement and/or cashless exercise. An additional 1,184,727 Warrants remain outstanding and unexercised. | |
The Company recorded the estimated settlement liability as of March 31, 2014 for the Warrant Shares issued and the Warrants that remain outstanding and unexercised that would be entitled to the same settlement based on the number of shares expected to be issued and the market price of the Company’s common stock on the dates of the actual settlements from $4.72 per share to $7.25 per share, and market price of the first settlement of $7.25 for the unsettled claims. We believe the issuance of convertible notes in the three months ended March 31, 2014 triggered the full ratchet anti-dilution adjustment; before the provision was triggered, the fair value of the warrant liability was not significant as the exercise was so far out of the money. As a result of the above settlements with warrant holders, the Company recorded a loss on settlement of warrants of $29,528,844 during the three and six months ended March 31, 2014 and a long-term warrant liability of $29,430,022 as of March 31, 2014 based on 4,407,200 shares of common stock under the settlement at the Company’s closing stock prices discussed above. As of September 30, 2014, the estimated settlement liability is $2,464,232 based on the fair market value of 1,184,727 remaining warrants and reduced the change in derivative liability of $6,598,965 against the loss on settlement of stock. Management has recorded the amounts settled to additional paid-in capital in proportion to the total estimated settlement liability. |
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Income Taxes [Abstract] | |||||||||
INCOME TAXES | NOTE 8. INCOME TAXES | ||||||||
The following table presents the current and deferred income tax provision for federal and state income taxes for the year ended September 30, 2014 and the period March 26, 2013 (“Inception”) to September 30, 2013: | |||||||||
2014 | 2013 | ||||||||
Current tax provision (benefit): | |||||||||
Federal | $ | - | $ | - | |||||
State | 800 | - | |||||||
Total | 800 | (41,000 | ) | ||||||
Deferred tax provision (benefit) | |||||||||
Federal | (262,000 | ) | (29,000 | ) | |||||
State | - | - | |||||||
Valuation allowance | 262,000 | 29,000 | |||||||
Total | - | - | |||||||
Total provision (benefit) for income taxes | $ | 800 | $ | - | |||||
Reconciliations of the U.S. federal statutory rate to the actual tax rate for the year ended September 30, 2014 and the period March 26, 2013 (“Inception”) to September 30, 2013: | |||||||||
2014 | 2013 | ||||||||
US federal statutory income tax rate | (34.0 | %) | (34.5 | %) | |||||
State tax – net of benefit | (6.0 | %) | (6.0 | %) | |||||
(40.0 | %) | (40.5 | %) | ||||||
Permanent differences | 38.7 | % | 11.8 | % | |||||
Changes of deferred tax assets | 0.2 | % | - | % | |||||
Net operating losses and other | 1 | % | - | % | |||||
Increase in valuation allowance | 0.1 | % | 28.7 | % | |||||
Effective tax rate | - | % | - | % | |||||
The components of the Company’s deferred tax assets and (liabilities) for federal and state income taxes as of September 30, 2014 and 2013 consisted of the following: | |||||||||
As of September, | |||||||||
2014 | 2013 | ||||||||
Current deferred tax assets (liabilities): | |||||||||
Accrued expenses and other | $ | - | $ | - | |||||
Total current deferred tax assets | - | - | |||||||
Non-current deferred tax assets and liabilities: | |||||||||
State taxes | - | - | |||||||
Contributed services | (18,000 | ) | (12,000 | ) | |||||
Stock options | (180,000 | ) | - | ||||||
Property, plant and equipment | (49,000 | ) | - | ||||||
Debt discounts | (166,000 | ) | - | ||||||
Net operating losses | 704,000 | 41,000 | |||||||
Total non-current deferred tax assets | 291,000 | 29,000 | |||||||
Valuation allowance | (291,000 | ) | (29,000 | ) | |||||
Total non-current deferred tax assets | - | - | |||||||
Net deferred tax assets | $ | - | $ | - | |||||
During the year ended September 30, 2014 and the period March 26, 2013 (“Inception”) to September 30, 2013, the valuation allowance increased by $233,000 and $29,000, respectively. At September 30, 2014, the Company had approximately $730,000 of federal and state gross net operating losses allocated to continuing operations available. The net operating loss carry forwards, if not utilized, will begin to expire in 2033 for federal purposes and 2031 for state purposes. | |||||||||
Based on the available objective evidence, including the Company’s limited operating history and current liabilities in excess of assets, management believes it is more likely than not that some of the net deferred tax assets, specifically certain net operating losses, at September 30, 2014 will not be fully realizable. In addition, subsequent to year end significant shares were issued to shareholders in connection with the conversion of notes payable and a subscription for the purchase of common stock. In connection, with these issuances the Company determined that the historical NOLs have probably been impaired due to IRS Section 382 limitations. Due to the uncertainty surrounding realization of the remaining deferred tax assets, specifically the NOLs, the Company has provided a valuation allowance of $262,000 and $29,000 against its net deferred tax assets at September 30, 2014 and 2013, respectively. We will continue to monitor the recoverability of our net deferred tax assets. | |||||||||
As of September 30, 2014 and 2013, the Company has a State tax liability of $0 and $0, respectively. As of September 30, 2014 and 2013, the Company recorded no estimated taxes payable for Federal and State. | |||||||||
The Company has filed all United States Federal and State tax returns. The Company has identified the United States Federal tax returns as its “major” tax jurisdiction. The United States Federal return years 2013 through 2014 are still subject to tax examination by the United States Internal Revenue Service; however, we do not currently have any ongoing tax examinations. The Company is subject to examination by the California Franchise Tax Board for the years ended 2013 through 2014 and currently does not have any ongoing tax examinations. |
Stockholders_Deficit
Stockholders' Deficit | 12 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Stockholders' Deficit [Abstract] | |||||||||||||||||
STOCKHOLDERS' DEFICIT | |||||||||||||||||
NOTE 9. STOCKHOLDERS’ DEFICIT | |||||||||||||||||
COMMON STOCK | |||||||||||||||||
On November 27, 2013, the board of directors and shareholders approved an increase in the authorized number of shares of common and preferred stock which may be issued by the Company to 1,000,000,000 shares and 100,000,000 shares, respectively. On December 3, 2013, the certificate of amendment was filed with the Secretary of State of Delaware to reflect the increase in authorized. | |||||||||||||||||
REVERSE STOCK SPLIT | |||||||||||||||||
On December 24, 2013, the Company’s Board and a majority of its shareholders approved a one for forty (1:40) reverse stock split of the Company’s common stock (the “Reverse Stock Split”). The Reverse Stock Split became effective on January 8, 2014. As a result of the Reverse Stock Split, all share information has been retroactively adjusted for all periods presented. All fractional shares created by the Reverse Stock Split were rounded to the nearest whole share. If the fraction created was one half or less, it was rounded down to the nearest whole share. If the fraction was more than one half, it was rounded up to the nearest whole share. Each shareholder received at least one share. The number of the Company’s authorized shares of common stock did not change in connection with the Reverse Stock Split. | |||||||||||||||||
PREFERRED STOCK | |||||||||||||||||
On April 1, 2014, the Board formally approved the filing of a Preferred Stock Designation in connection with the commitment of 500,000 Series A Shares to HIVE on March 27, 2014 pursuant to its authority to issue blank check preferred stock as provided in the Company’s Certificate of Incorporation. Per the Certificate of Designation (the “Designation”), there are 100,000,000 shares of preferred stock authorized by the Company’s Certificate of Incorporation. The Company is authorized to issue 500,000 shares of Series A Shares pursuant to the Designation. As provided in the Designation (and as set forth in the HIVE Asset Purchase Agreement), Series A Shares are entitled to vote at a 15-1 ratio to Common Stock. Each share of preferred stock shall initially be convertible into one share of common stock (500,000 shares of common stock in the aggregate). On the two year anniversary of the transaction of HIVE, the preferred stock conversion ratio shall be adjusted as follows: a one-time pro rata adjustment of up to ten-for-one (10-1) based upon the Company generating aggregate gross revenues over the two years of at least $8,000,000 (e.g. If the Company generates only $4,000,000 in aggregate gross revenues over the two year period then the convertible ratio will adjust to 5-1). In no event will the issuance convert into more than 5,000,000 shares of common stock of the Company. | |||||||||||||||||
On June 19, 2014, the Company formally issued the 500,000 Series A Shares to HIVE. | |||||||||||||||||
The value ascribed to the Series A Shares was based on the historical costs of the assets acquired on March 27, 2014 from HIVE since the transfer of assets was made among entities under common control. | |||||||||||||||||
COMMON STOCK ISSUED FOR SERVICES | |||||||||||||||||
On January 31, 2014, the Company entered into an agreement to issue a 10% convertible promissory note to a consultant as compensation for investor relations services for a period of up to one (1) year. The agreement was terminated after five (5) months. On July 10, 2014, the holder converted principal of $41,667 and outstanding accrued and unpaid interest of $345 into 21,006 shares of the Company’s common stock at a per share conversion price of $2.00, which is in accordance with the terms of the convertible note payable. The conversion of the 10% Note was in full satisfaction of the note payable. See Note 4 for terms of the 10% Note. The Company recorded $462,356 to interest expense for the excess in fair market value of the stock issued. | |||||||||||||||||
On June 6, 2014, the Company entered into an agreement to issue 20,000 shares of its common stock to a consultant as compensation for investor relations services for a period of six (6) months valued at $29,600 at the date of issuance and $41,600 as of September 30, 2014. Per the terms of the agreement, 10,000 shares vest immediately, 5,000 shares vest after ninety (90) days, and 5,000 shares vest after one hundred days. The fair value of the stock vested and recorded during the year ended September 30, 2014 was $31,200 | |||||||||||||||||
CONTRIBUTED SERVICES | |||||||||||||||||
During the period from March 26, 2013 (“Inception”) to March 31, 2014, services were provided by the Company’s Chief Executive Officer at no cost. The Company has recorded $5,000 per month for the services prior to commencing significant operations. The fair value of contributed services were based on previously negotiated monthly salary and has been recognized in the statement of stockholders’ deficit as contributed services, and the accompanying statements of operations as general and administrative expenses. | |||||||||||||||||
WARRANTS | |||||||||||||||||
Before the settlements described above in NOTE 7, on March 26, 2014 and March 31, 2014, respectively, the Warberg Entities exercised a total of 19,250 Series A Warrants (the “Warrants”) issued in May 2011 at $28.00 exercise price per share. In connection with this exercise, the Company issued 3,542 shares to the Warberg Entities via cashless exercise as provided in the Warrants. | |||||||||||||||||
The table below summarizes the Company’s warrant activity during the year ended September 30, 2014: | |||||||||||||||||
Shares | Weighted Average Price | Weighted Average Remaining Contractual Term | Aggregate Intrinsic Value | ||||||||||||||
Warrants outstanding at September 30, 2013 | 8,400,000 | $ | 28 | 2.6 | $ | - | |||||||||||
Warrants Issued | - | - | |||||||||||||||
Warrants Exercised | (3,131,970 | ) | 0.114 | ||||||||||||||
Cancelled/forfeited/expired | (4,083,303 | ) | 0.114 | ||||||||||||||
Warrants outstanding at September 30, 2014 | 1,184,727 | $ | 0.114 | 1.6 | $ | 7,217,234 | |||||||||||
OPTIONS | |||||||||||||||||
On June 27, 2014, the Company authorized the “2014 Incentive and Nonstatutory Stock Option Plan” (the “Plan”) whereby a maximum of 2,000,000 shares of the Company’s common stock could be granted in the form of incentive and nonstatutory stock options. If any shares of common stock subject to an award under the Plan are forfeited, expire, are settled for cash or are tendered by the participant or withheld by us to satisfy any tax withholding obligation, then, in each case, the shares subject to the award may be used again for awards under the Plan to the extent of the forfeiture, expiration, cash settlement or withholding. The stock option awards issuable under the Plan can be made up of any combination of incentive and nonstatutory stock options. The stock options will be granted at fair market value on the date of grant and will vest as directed by the Board of Directors. Generally, the options will vest 25% at grant and 25% each subsequent six (6) months from the date of grant. Incentive stock options are available to employees only whereas nonstatutory stock options are available to independent contractors and consultants of the Company. | |||||||||||||||||
On June 27, 2014, concurrent with the formal adoption of the Plan, the Company’s Board of Directors granted a total of 1,000,000 stock options to certain employees, consultants and/or independent contractors of the Company (the “Option Grant”). The Option Grant includes options to purchase 520,000 shares granted to employees, consultants and/or independent contractors of the Company that are not executive officers. In addition, the Board determined that executive officer Michael Cook, Director of Business Development, should receive options to purchase 100,000 shares and that Kyle Tracey, Chief Executive Officer and Chairman, and Joe Andreae, President and member of the Board, should receive options to purchase 190,000 shares each. The options were granted at the market price of the Company’s common stock at close of business ($1.66 per share) on June 27, 2014, pursuant to the Company’s standard form stock option agreements under the Plan. The options vest 25% at grant and 25% each subsequent six (6) months from the date of grant. The aggregate value of the 1,000,000 options on the grant date was $1,660,000 and the amount expensed upon the grant date was $415,000 as result of 250,000 options immediately vested. During the year ended September 30, 2014 an additional $22,312 was expensed due to the revaluing 212,500 non-employee options. | |||||||||||||||||
On July 28, 2014, the Company granted 25,000 nonstatutory stock options to a consultant pursuant to the Company’s 2014 Incentive and Nonstatutory Stock Option Plan. The options were granted at an exercise price of $2.14 which was equal to the fair market value of one share of the Company’s common stock on the date of grant. The aggregate value of the 25,000 options on the grant date was $52,750 and the amount expensed upon the grant date was $13,187 as result of 2,963 options immediately vested. | |||||||||||||||||
The description of the incentive and nonstatutory stock options herein is qualified in its entirety by reference to the full text of the Form of Incentive Stock Option Agreement and Nonstatutory Stock Option Agreement, which are attached as Exhibits 10.2 and 10.3, respectively, to the Current Report on Form 8-K filed with the SEC on July 3, 2014. | |||||||||||||||||
Option activity during the year ended September 30, 2014, was as follows: | |||||||||||||||||
Shares | Weighted | Weighted | Aggregate | ||||||||||||||
Average | Average | Intrinsic | |||||||||||||||
Exercise | Remaining | Value | |||||||||||||||
Price | Contractual Term | ||||||||||||||||
Options outstanding at September 30, 2013 | 125,000 | $ | 13.2 | 2.3 | $ | - | |||||||||||
Options granted | 1,025,000 | $ | 1.67 | ||||||||||||||
Options exercised | - | $ | - | ||||||||||||||
Options cancelled/forfeited/expired | - | $ | - | ||||||||||||||
Options outstanding at September 30, 2014 | 1,150,000 | $ | 2.92 | 8.7 | $ | 4,648,294 | |||||||||||
Options exercisable at September 30, 2014 | 303,889 | $ | 6.41 | 5.8 | $ | 811,877 | |||||||||||
The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the aggregate difference between the closing stock prices of Vape’s common stock at the specified dates and the exercise prices for in-the-money options) that would have been received by the option holders if all in-the-money options had been exercised on the specified dates. | |||||||||||||||||
The fair value of each option award is estimated on the date of grant using the Black-Scholes valuation model, consistent with the provisions of ASC 718. Because option-pricing models require the use of subjective assumptions, changes in these assumptions can materially affect the fair value of the options. Vape has limited relevant historical information to support the expected exercise behavior because no exercises have taken place. | |||||||||||||||||
As of September 30, 2014, future stock compensation expense related to employee grants for the years ending September 30, 2015 and 2016 is expected to be $654,625 and $326,812, respectively. As of September 30, 2014, future stock compensation expense related to non-employee grants for the years ending September 30, 2015 and 2016 is expected to be $247,375 and $123,687, respectively. |
Intellectual_Property
Intellectual Property | 12 Months Ended |
Sep. 30, 2014 | |
Intellectual Property [Abstract] | |
INTELLECTUAL PROPERTY | NOTE 10. INTELLECTUAL PROPERTY |
The Company plans to rely on a combination of trademark, copyright, trade secret and patent laws in the United States as well as confidentiality procedures and contractual provisions to protect future proprietary technology and its brands, as they are developed. The Company has begun to execute on this plan with the acquisition of the patent pending HIVE Ceramic vaporization product and the HIVE trademark as well as several pending trademark applications. The Company intends to continue to create or acquire proprietary vaporizers and e-cigarettes, and various trademarks, patents and/or copyrights for brands which are developed. | |
TRADEMARKS | |
On March 27, 2014, the Company and Stone Arch Studio, LLC entered into a Trademark Assignment Agreement whereby the Company acquired all right, title, priority and interest to the HIVE trademark U.S. Registration No. 44513069 as registered with the U.S. Patent and Trade Office (“USPTO”). This acquisition further protects the Company’s HIVE Ceramics brand vaporization line. As of September 30, 2014, the Company has capitalized $116,000 in costs paid related to the trademarks. | |
In addition, the Company has trademarks with the USPTO on several additional trademarks and tradenames utilized by the Company valued at $3,575. | |
PATENTS | |
On March 27, 2014, the Company formally closed its acquisition of the patent pending HIVE Ceramics vaporization technology. The Company has already begun exploiting this technology and intends to prosecute the patent application to completion. As of September 30, 2014, the Company has capitalized $14,890 in costs related to the pending patents. | |
The Company also has been in discussions to acquire additional patented technology from third parties to further grow and develop its branded product lines in the vaporization market. | |
Subsequent_Events
Subsequent Events | 12 Months Ended |
Sep. 30, 2014 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 11. SUBSEQUENT EVENTS |
Kyle Tracey Convertible Notes | |
See Notes 5 for subsequent conversions. | |
Joseph Andreae Notes Payable | |
See Notes 5 for subsequent repayments. | |
Michael Cook Convertible Notes | |
See Note 5 for subsequent conversions. | |
Misc. Convertible Notes | |
See Note 4 and 5 for subsequent conversions. | |
On December 3, 2014, Vape Holdings, Inc. (the “Company”) entered into a securities purchase agreement (the “Securities Purchase Agreement”) with an accredited investor (the “Investor”) pursuant to which the Company agreed to sell, and the Investor agreed to purchase, an unsecured convertible promissory note (the “Note”) in the principal amount of $560,000 less an original issue discount (“OID”) of $50,000 and transaction expenses of $10,000 for a total purchase price of $500,000. The closing under the Securities Purchase Agreement occurred on December 3, 2014. | |
The Note bears interest at the rate of 10% per annum and is convertible into common stock of the Company at a conversion price per share of 70% of the average of the three (3) lowest Closing Sale Prices in the ten (10) Trading Days immediately preceding the applicable Conversion (subject to adjustment in the event of stock splits, stock dividends, and similar transactions, and in the event of subsequent sales of common stock at a lower purchase price (subject to certain exceptions))(the “Conversion Price”). In no event will the Conversion Price be less than $0.50 per share. Repayment of principal on the Note, together with accrued interest thereon, is due in twelve monthly installments, commencing six months from issuance. The Company may make such payments in cash (in which event the Company will pay a 25% premium) or, subject to certain conditions, in shares of common stock valued at the lower of the Conversion Price or 70% of the average of the three (3) lowest Closing Sale Prices in the ten (10) Trading Days immediately preceding the applicable payment date. The Maturity Date of the Note is seventeen months from the date of issuance. The Company paid a finder’s fee in the amount of $25,000 in connection with this transaction. | |
Consulting Agreements | |
On October 20, 2014, the Company entered into consulting agreements with two consultants to provide business development and acquisition services to the Company. The consultants were each issued 100,000 options to purchase common stock of the Company by the Board of Directors as consideration for consulting services. The options were granted at the market price of the Company’s common stock at close of business ($0.83 per share). The options vest 25% at grant and 25% each subsequent six (6) months from the date of grant. | |
Officer Compensation and Bonuses | |
On October 20, 2014, the Company’s Board of Directors issued bonus stock grants of 30,000 shares of restricted common stock each to Joe Andreae and Kyle Tracey. An additional 30,000 shares of restricted common stock were granted to an employee. | |
On December 4, 2014, the Company’s Board of Directors increased the annual salaries of Joseph Andreae and Allan Viernes to $75,000 and $60,000, respectively. In addition, the Company paid bonuses of $3,000 and $5,000 to Joseph Andreae and Allan Viernes, respectively. | |
On December 4, 2014, the Company’s Board of Directors paid Kyle Tracey and Michael Cook bonuses of $3,000 and $3,500, respectively. | |
On December 4, 2014, the Company’s Board of Directors paid $11,000 in bonuses to various employees. | |
Additional Option Grants Under 2014 Stock Option Plan | |
On October 20, 2014, the Company’s Board of Directors granted a total of 20,000 stock options to certain employees and canceled 20,000 options previously allocated (but not issued) to employees. The options were granted at the market price of the Company’s common stock at close of business ($0.83 per share). The options vest 25% at grant and 25% each subsequent six (6) months from the date of grant. | |
On December 22, 2014, the Company’s Board of Directors granted a total of 775,000 stock options to certain employees. The option grant includes options to purchase 225,000 shares granted to employees that are not executive officers. In addition, the Board determined that executive officer Michael Cook, Director of Business Development, should receive options to purchase 25,000 shares and that Kyle Tracey, Chief Executive Officer and Chairman, and Joe Andreae, President and member of the Board, and Allan Viernes, Chief Financial Officer should receive options to purchase 175,000 shares each. The options were granted at the market price of the Company’s common stock at close of business ($0.70 per share). The options vest 25% at grant and 25% each subsequent six (6) months from the date of grant. |
Description_of_Business_Recent1
Description of Business, Recent Acquisitions and Summary of Significant Accounting Policies (Policies) | 12 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Description of Business, Recent Acquisitions and Summary of Significant Accounting Policies [Abstarct] | |||||||||||||||||
BUSINESS | BUSINESS | ||||||||||||||||
Vape Holdings, Inc. (formerly PeopleString Corporation) (“Vape,” the “Company,” “we,” “us,” “our,” “our company”) is a holding company with its primary focus in the manufacturing and distribution of healthy and sustainable vaporization products. The Company has designed and recently began marketing and distributing ceramic vaporization products under a unique brand. The Company has introduced a nonporous, non-corrosive, chemically inert medical-grade ceramic vaporization element as a healthy, sustainable alternative to traditional titanium and quartz vaporization materials, as well as lower-grade ceramic found in traditional electronic cigarettes and vaporizers. This material can be used for a wide range of applications, including stand-alone vaporization products and "E-cigs." Electronic cigarettes come in a variety of designs ranging from those that look vastly like traditional cigarettes, to larger vaporizer units which are capable of vaporizing liquid with varying viscosity. The process of vaporization is believed to eliminate the smoke, tar, ash, and other byproducts of traditional smoking by utilizing lower temperatures in a controlled electronic environment. | |||||||||||||||||
HIVE Ceramics is the premier brand under the Vape umbrella. HIVE manufactures and distributes a proprietarily blended ceramic vaporization element for torched, electronic and portable vaporizers with countless design and product crossover capabilities in existing and emerging markets. HIVE is dedicated to bringing the healthiest and cleanest vaporization experience possible to the market. The HIVE product line currently consists of over 13 distinct ceramic elements, including the 2 piece domeless, domeless direct inject, and HIVE’s signature domeless elements covering 10mm, 14mm and 18mm applications as well as regular elements, the HIVE Flower Cup, the HIVE Carb Cap and the HIVE Stinger Dabber. The full HIVE product line is currently being manufactured and distributed and is available now. | |||||||||||||||||
The Company has recently launched ‘HIVE Glass’. HIVE Glass is Vape’s newest line of products under the HIVE brand name. The HIVE GLASS line is precision made using state of the art manufacturing processes and techniques, and exclusively uses German Schott glass and fittings through all production phases. The aim with HIVE Glass is to create an affordable, high quality glass product that is both aesthetically pleasing and a highly functional vaporization product. Vape’s existing customer base and distribution network will be the catalyst for expansion of this new HIVE product line. | |||||||||||||||||
Vape has also announced the launch of ‘HIVE Supply’ coming in early 2015. HIVE Supply is a packaging and sourcing division of Vape designed to serve as a competitively priced, comprehensive “one-stop shop” for all medical and recreational marijuana packaging needs. As with all of Vape’s products, HIVE Supply will operate in full compliance with all federal laws and the laws of each individual state in which it does business. HIVE Supply will focus on providing much-needed support to legal cannabis businesses in regards to sourcing consumer products, brand management and marketing services. | |||||||||||||||||
In connection with its launch of HIVE Supply and HIVE Glass, the Company plans to open ‘THE HIVE’ retail store and gallery in Los Angeles; an end-user experience to showcase the complete line of HIVE Ceramics and HIVE Glass products, while introducing HIVE Supply and all the new products being tested and developed through each vertical. | |||||||||||||||||
The Company has expanded its distribution network to include several distributors throughout the United States, Canada, Europe and South America to pair with its existing e-commerce website at www.HiveCeramics.com and its wholesale authorized dealer network of over 1,100 authorized shops. | |||||||||||||||||
The Company intends to rely on a combination of trademark, copyright, trade secret and patent laws in the United States as well as confidentiality procedures and contractual provisions to protect future proprietary technology and its brands, as they are developed. The Company has created or acquired and continues in the process of creating and/or acquiring proprietary vaporizers and e-cigarettes, and various trademarks, patents and copyrights for brands which are developed or in development. The Company is actively engaged in improving and expanding lines of branded products through business alliances and acquisitions, as well as developing its branded retail business expansion. Vape and its business units are organized and directed to operate strictly in accordance with all applicable state and federal laws. | |||||||||||||||||
RECENT ACQUISITIONS | RECENT ACQUISITIONS | ||||||||||||||||
On September 30, 2013, the then PeopleString Corporation, and its wholly-owned subsidiary, RewardString Corporation (“RewardString”), and Vape Holdings, Inc., a Nevada corporation (the “Private Company”), closed a Merger and Reorganization Agreement whereby the Private Company merged with RewardString, with the Private Company being the surviving entity (the “Merger”). The Private Company shareholders represented approximately 74.95% of the total issued and outstanding common stock of the merged company. | |||||||||||||||||
The merger among PeopleString, RewardString and the Private Company was accounted for as a reverse acquisition and change in reporting entity, whereby the Private Company was the accounting acquirer. The Merger was accounted for using the purchase method of accounting in accordance with ASC 805 Business Combinations, whereby the estimated purchase was allocated to tangible net assets acquired based upon preliminary fair values at the date of acquisition. Accordingly, the assets and liabilities of PeopleString and RewardString were recorded at fair value; the assets of PeopleString and RewardString were not significant. The historical results of operations and cash flows of the Private Company were reported since its inception on March 26, 2013 (“Inception”). On September 30, 2013, the Company approved a change in fiscal year end of the Company from December 31st to September 30th due to a change in reporting entity. | |||||||||||||||||
Vape commenced revenue generating operations late in the three month period ended March 31, 2014. | |||||||||||||||||
Effective as of January 8, 2014, the Company amended its Certificate of Incorporation with the Delaware Secretary of State pursuant to a certificate of amendment to formally change its name from PeopleString Corporation to Vape Holdings, Inc. (the “Name Change”). The Company’s Board of Directors and shareholders representing approximately 53.3% of the outstanding shares of the Company’s common stock approved the Name Change by written consent on December 24, 2013. | |||||||||||||||||
HIVE Ceramics Asset Purchase | HIVE Ceramics Asset Purchase | ||||||||||||||||
On February 28, 2014, the Company entered into an Asset Purchase Agreement (the “Agreement”) with HIVE Ceramics, LLC (“HIVE”) whereby the Company agreed to acquire all right, title and interest to the HIVE vaporization product line and related intellectual property in exchange for the issuance of 500,000 shares of Series A Preferred Stock ( the “Series A Shares”) to HIVE. The Transaction formally closed on March 27, 2014. | |||||||||||||||||
HIVE had been in development of a ceramic product line for use in the vaporization market. The development of this initial product line was completed in 2014. No sales of this product line were made prior to the acquisition of the HIVE product on March 27, 2014. | |||||||||||||||||
The Company also received $250,000 in capital from HIVE at closing and, as a result, the Company issued a note payable to HIVE (the “HIVE Note”). The HIVE Note is dated March 27, 2014 payable to HIVE. In accordance with the Agreement, the Company issued the HIVE Note in exchange for the principal amount of $250,000. Per the terms of the HIVE Note, the maturity date is February 27, 2016 and the annual rate of interest is six percent (6%). No prepayment penalty exists. The HIVE Note is unsecured. | |||||||||||||||||
Employment Agreements for Michael Cook as Director of Business Development and Kyle Tracey as Chief Executive Officer were also executed at Closing. Per Mr. Cook’s employment agreement, he is entitled to $80,000 per year in salary over a two (2) year employment term In the event that his employment is terminated without cause he will be entitled to payment of his base salary for a six (6) month period following termination. Per Mr. Tracey’s employment agreement, he is entitled to $120,000 per year in salary over a two (2) year employment term. In the event that his employment is terminated without cause he will be entitled to the remaining salary of the two (2) year employment term plus the issuance of five percent (5%) of the Company’s common stock on a fully diluted basis. | |||||||||||||||||
As of September 30, 2014, the Company accrued wages and taxes of $29,446 and $59,273 for Mr. Cook and Mr. Tracey, respectively. | |||||||||||||||||
BASIS OF PRESENTATION | BASIS OF PRESENTATION | ||||||||||||||||
The accounting and reporting policies of the Company are in accordance with accounting principles generally accepted in the United States of America, which is based on the accrual method of accounting. | |||||||||||||||||
As a result of the merger between Vape and PeopleString, the Vape shareholders controlled the Company post-merger. This resulted in a change in reporting entity, whereby the historical financial statements of Vape are presented herein. The assets acquired and liabilities assumed were recorded at fair value; however, there were no significant assets acquired and approximately $24,000 in liabilities assumed. | |||||||||||||||||
USE OF ESTIMATES | USE OF ESTIMATES | ||||||||||||||||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates and assumptions include losses for warrant contingencies and the valuation of conversion features in notes. | |||||||||||||||||
FAIR VALUE OF FINANCIAL INSTRUMENTS | FAIR VALUE OF FINANCIAL INSTRUMENTS | ||||||||||||||||
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants as of the measurement date. Applicable accounting guidance provides an established hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors that market participants would use in valuing the asset or liability. There are three levels of inputs that may be used to measure fair value: | |||||||||||||||||
Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. | |||||||||||||||||
Level 2 - Include other inputs that are directly or indirectly observable in the marketplace. | |||||||||||||||||
Level 3 - Unobservable inputs which are supported by little or no market activity. | |||||||||||||||||
The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Derivative instruments include the warrant liability (Level 2). Derivative instruments are valued using standard calculations/models that are primarily based on observable inputs, including volatilities and interest rates. Therefore, derivative instruments are included in Level 2. | |||||||||||||||||
Fair-value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of September 30, 2014 and the period March 26, 2013 (“Inception”) to September 30, 2013. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash, prepaids, accounts payable, accrued liabilities, notes payable, and convertible notes payable. Fair values for these items were assumed to approximate carrying values because of their short term in nature or they are payable on demand. | |||||||||||||||||
The following table presents the Company’s fair value hierarchy for assets and liabilities measured at fair value on a recurring basis at September 30, 2014: | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Assets | |||||||||||||||||
Cash and cash equivalents | $ | 48,370 | $ | – | $ | – | $ | 48,370 | |||||||||
Total assets measured at fair value | $ | 48,370 | $ | – | $ | – | $ | 48,370 | |||||||||
Liabilities | |||||||||||||||||
Derivative instruments | $ | – | $ | 2,464,232 | $ | – | $ | 2,464,232 | |||||||||
Total liabilities measured at fair value | $ | – | $ | 2,464,232 | $ | – | $ | 2,464,232 | |||||||||
The following table presents the Company’s fair value hierarchy for assets measured at fair value on a recurring basis at September 30, 2013: | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Assets | |||||||||||||||||
Cash and cash equivalents | $ | 568 | $ | – | $ | – | $ | 568 | |||||||||
Total assets measured at fair value | $ | 568 | $ | – | $ | – | $ | 568 | |||||||||
Liabilities | |||||||||||||||||
Derivative instruments | $ | – | $ | - | $ | – | $ | - | |||||||||
Total liabilities measured at fair value | $ | – | $ | - | $ | – | $ | - | |||||||||
INCOME TAXES | INCOME TAXES | ||||||||||||||||
The Company adopted ASC 740-10-25 on formation, which provides criteria for the recognition, measurement, presentation and disclosure of uncertain tax position. The Company must recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. The Company did not recognize additional liabilities for uncertain tax positions as a result of the implementation of ASC 740-10-25 for the year ended September 30, 2014 and the period March 26, 2013 (“Inception”) to September 30, 2013. | |||||||||||||||||
CONCENTRATION | CONCENTRATION | ||||||||||||||||
Credit Risk | |||||||||||||||||
At times, the Company maintains cash balances at a financial institution in excess of the FDIC insurance limit. In addition, at we extend credit to customers in the normal course of business, after we evaluate the credit worthiness. The Company does not expect to take any unnecessary credit risks causing significant causing write-offs of potentially uncollectible accounts. | |||||||||||||||||
REVENUE RECOGNITION | REVENUE RECOGNITION | ||||||||||||||||
The Company recognizes revenues from product sales when (a) persuasive evidence that an agreement exists; (b) the products have been delivered; (c) the prices are fixed and determinable and not subject to refund or adjustment; and (d) collection of the amounts due is reasonably assured. Revenue is recorded when products are shipped. Sales tax is charged on retail sales in in the applicable district and recorded as a liability. Products are warrantied 24 hours of delivery if they are damaged during the shipping. | |||||||||||||||||
INVENTORY | INVENTORY | ||||||||||||||||
Inventory is valued at the lower of cost or market, as determined primarily by the average cost inventory method, and are stated using the first-in, first-out (FIFO) method. Management will record a provision for loss for obsolete or slow moving inventory to reduce carrying amounts to net realizable value. | |||||||||||||||||
We purchase product sourced from China which we are required to pay 50% upon placing the order. Amounts paid for products, which have not been received, are recorded as prepaid inventory. There are no amounts paid which are in dispute or otherwise in which we may not recover the recorded value. | |||||||||||||||||
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT | ||||||||||||||||
Property and equipment are recorded at cost and depreciation is provided over the estimated useful lives of the related assets using the straight-line method for financial statement purposes. The estimated life of tooling related to our ceramic products is three (3) years. | |||||||||||||||||
IMPAIRMENT OF LONG-LIVED AND PURCHASED INTANGIBLE ASSETS | IMPAIRMENT OF LONG-LIVED AND PURCHASED INTANGIBLE ASSETS | ||||||||||||||||
The Company has adopted Accounting Standards Codification (“ASC”) 350 “Intangibles – Goodwill and Other.” The Statement requires that long-lived assets and certain identifiable intangibles held and used by the Company be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Events relating to recoverability may include significant unfavorable changes in business conditions, recurring losses, or a forecasted inability to achieve break-even operating results over an extended period. The Company evaluates the recoverability of long-lived assets based upon forecasted undercounted cash flows. Should impairment in value be indicated, the carrying value of intangible assets will be adjusted, based on estimates of future discounted cash flows resulting from the use and ultimate disposition of the asset. ASC 350 also requires assets to be disposed of be reported at the lower of the carrying amount or the fair value less costs to sell. | |||||||||||||||||
Long-lived assets, such as property and equipment and purchased intangibles subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of the asset is measured by comparison of its carrying amount to undiscounted future net cash flows the asset is expected to generate. If such assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the asset exceeds its fair market value. Estimates of expected future cash flows represent management's best estimate based on currently available information and reasonable and supportable assumptions. Any impairment recognized is permanent and may not be restored. During the year ended September 30, 2014 and the period March 26, 2013 (“Inception”) to September 30, 2013, the Company did not record any impairment of its trademarks and pending patents as its expected future cash flows are in excess of their carrying amounts. | |||||||||||||||||
RESEARCH AND DEVELOPMENT | RESEARCH AND DEVELOPMENT | ||||||||||||||||
Research and development costs are expensed as incurred. The costs of materials and equipment that will be acquired or constructed for research and development activities, and that have alternative future uses, both in research and development, marketing or sales, will be classified as property and equipment and depreciated over their estimated useful lives. To date, research and development costs include the research and development expenses related to prototypes of the Company’s products. During the year ended September 30, 2014 and the Period from March 26, 2013 (“Inception”), research and development costs were $45,757 and $0, respectively. | |||||||||||||||||
CONVERTIBLE DEBT | CONVERTIBLE DEBT | ||||||||||||||||
Convertible debt is accounted for under the guidelines established by ASC 470-20 “Debt with Conversion and Other Options”. ASC 470-20 governs the calculation of an embedded beneficial conversion, which is treated as an additional discount to the instruments where derivative accounting (explained below) does not apply. The amount of the value of warrants and beneficial conversion feature may reduce the carrying value of the instrument to zero, but no further. The discounts relating to the initial recording of the derivatives or beneficial conversion features are accreted over the term of the debt. Many of the conversion features embedded in the Company's convertible notes are variable and are adjusted based on a discount to market prices which could cause an unlimited number of common stock to be issued. The management and board of directors currently have the ability to authorize additional shares of common stock primarily through their super voting rights under the Series A Preferred stock (See “NOTE 5 – CONVERTIBLE NOTES PAYABLE”). | |||||||||||||||||
When applicable, the Company calculates the fair value of warrants and conversion features issued with the convertible instruments using the Black-Scholes valuation method, using the same assumptions used for valuing employee options for purposes of ASC 718 “Compensation – Stock Compensation”, except that the contractual life of the warrant or conversion feature is used. Under these guidelines, the Company allocates the value of the proceeds received from a convertible debt transaction between the conversion feature and any other detachable instruments (such as warrants) on a relative fair value basis. The allocated fair value is recorded as a debt discount or premium and is amortized over the expected term of the convertible debt to interest expense. If the fair value exceeds the carrying value of the debt, an immediate charge to operations is recorded by management. Each reporting period, the Company will compute the estimated fair value of derivatives and record changes to operations. Currently no instruments are being recorded as such. | |||||||||||||||||
The Company accounts for modifications of its BCF’s in accordance with ASC 470-50 “Modifications and Extinguishments.” ASC 470-50 requires the modification of a convertible debt instrument that changes the fair value of an embedded conversion feature and the subsequent recognition of interest expense or the associated debt instrument when the modification does not result in a debt extinguishment. | |||||||||||||||||
DERIVATIVE FINANCIAL INSTRUMENTS | DERIVATIVE FINANCIAL INSTRUMENTS | ||||||||||||||||
Derivative financial instruments, as defined in ASC 815, “Accounting for Derivative Financial Instruments and Hedging Activities”, consist of financial instruments or other contracts that contain a notional amount and one or more underlying (e.g. interest rate, security price or other variable), require no initial net investment and permit net settlement. Derivative financial instruments may be free-standing or embedded in other financial instruments. Further, derivative financial instruments are initially, and subsequently, measured at fair value and recorded as liabilities or, in rare instances, assets. | |||||||||||||||||
The Company does not use derivative financial instruments to hedge exposures to cash-flow, market or foreign-currency risks. However, the Company has issued financial instruments including senior convertible notes payable and freestanding stock purchase warrants with features that are either (i) not afforded equity classification, (ii) embody risks not clearly and closely related to host contracts, or (iii) may be net-cash settled by the counterparty. As required by ASC 815, in certain instances, these instruments are required to be carried as derivative liabilities, at fair value, in our financial statements. | |||||||||||||||||
The Company estimates the fair values of derivative financial instruments using various techniques (and combinations thereof) that are considered to be consistent with objectively measuring fair values. In selecting the appropriate technique, consideration is given to, among other factors, the nature of the instrument, the market risks that it embodies and the expected means of settlement. For less complex derivative instruments, such as free-standing warrants, the Company generally uses the Black-Scholes option valuation technique because it embodies all of the requisite assumptions (including trading volatility, estimated terms and risk free rates) necessary to fair value these instruments. Estimating fair values of derivative financial instruments requires the development of significant and subjective estimates that may, and are likely to, change over the duration of the instrument with related changes in internal and external market factors. In addition, option-based techniques are highly volatile and sensitive to changes in the trading market price of our common stock, which has a high-historical volatility. Since derivative financial instruments are initially and subsequently carried at fair values, the Company's operating results will reflect the volatility in these estimate and assumption changes. | |||||||||||||||||
PER-SHARE INFORMATION | PER-SHARE INFORMATION | ||||||||||||||||
Basic per-share information includes the weighted average shares outstanding during the periods. Dilutive per-share information includes shares available under convertible notes, options and warrants, to the extent these are not anti-dilutive. | |||||||||||||||||
The following is a summary of outstanding securities that would have been included in the calculation of diluted shares outstanding since the exercise prices did not exceed the average market value of the Company’s common stock if the Company generated net income for the year ended September 30, 2014 and the period March 26, 2013 (“Inception”) to September 30, 2013: | |||||||||||||||||
For the Year Ended | For the Period From March 26, | ||||||||||||||||
2013 (“Inception”) to | |||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2014 | 2013 | ||||||||||||||||
Series A Preferred stock | 500,000 | - | |||||||||||||||
Common stock options | 303,889 | - | |||||||||||||||
Common stock warrants | 1,184,727 | - | |||||||||||||||
Convertible notes | 843,213 | - | |||||||||||||||
2,831,829 | - | ||||||||||||||||
The Company would have excluded 125,000 options from the computation for the periods presented, as their exercise prices were in excess of the average closing market price of the Company’s common stock, causing their effects to be anti-dilutive using the treasury stock method. | |||||||||||||||||
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION | ||||||||||||||||
ASC 718, “Share-Based Payment” requires that compensation cost related to share-based payment transactions be recognized in the financial statements. Share-based payment transactions within the scope of ASC 718 include stock options, restricted stock plans, performance-based awards, stock appreciation rights, and employee share purchase plans. | |||||||||||||||||
The Company adopted ASC 718, which requires disclosure of the fair value and other characteristics of stock options and more prominent disclosure about the effects of an entity’s accounting policy decisions with respect to stock-based compensation on reported net loss. The Company has reflected the expense of such stock based compensation based on the fair value at the grant date for awards consistent with the provisions of ASC 718. | |||||||||||||||||
In connection with the adoption of ASC 718, the fair value of our share-based compensation has been determined utilizing the Black-Scholes pricing model. The fair value of the options granted is amortized as compensation expense on a straight line basis over the requisite service period of the award, which is generally the vesting period. The fair value calculations involve significant judgments, assumptions, estimates and complexities that impact the amount of compensation expense to be recorded in current and future periods. Upon option exercise, the Company issues new shares of stock. | |||||||||||||||||
The following weighted average variables were used in the Black Scholes model for all option issuances valued during the fiscal year ended September 30, 2014 and the period March 26, 2013 (“Inception”) to September 30, 2013: | |||||||||||||||||
Year ended | Stock Price at | Dividend | Exercise Price | Risk Free | Volatility | Average | |||||||||||
March 31, | Grant Date | Yield | Interest Rate | Life | |||||||||||||
2014 | $1.66 | –% | $1.66 | 2.54% | 401% | 10 | |||||||||||
2013 | n/a | n/a | n/a | n/a | n/a | n/a | |||||||||||
The Company's accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows the provisions of Emerging Issues Task Force (“EITF”) 96-18, “Accounting for Equity Instruments That are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services”, codified into ASC 505. The measurement date for the fair value of the equity instruments issued is determined at the earlier of (i) the date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant or vendor's performance is complete. In the case of equity instruments issued to consultants, the fair value of the equity instrument is recognized over the term of the consulting agreement. | |||||||||||||||||
During the year ended September 30, 2014, the Company recorded $450,001 of non-cash “stock options expense” related to the options issued/granted. There was no such expense in the same period during fiscal year 2013. | |||||||||||||||||
RECENT ACCOUNTING PRONOUNCEMENTS | RECENT ACCOUNTING PRONOUNCEMENTS | ||||||||||||||||
In May 2014, the FASB issued Accounting Standards Update No. 2014-09, “Revenue from Contracts with Customers”, which supersedes most of the current revenue recognition requirements. The core principle of the new 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 these goods or services. New disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers are also required. This guidance is effective for the Company in the first quarter of fiscal year 2018 and early application is not permitted. Entities must adopt the new guidance using one of two retrospective application methods. The Company is currently evaluating the standard but does not expect it to have a material impact on our financial position, results of operations or cash flows. | |||||||||||||||||
The Financial Accounting Standards Board issues Accounting Standard Updates (“ASUs”) to amend the authoritative literature in Accounting Standards Codification (“ASC”). There have been a number of ASUs to date that amend the original text of ASC. The Company believes those issued to date either (i) provide supplemental guidance, (ii) are technical corrections, (iii) are not applicable to the Company or (iv) are not expected to have a significant impact on the Company. |
Description_of_Business_Recent2
Description of Business, Recent Acquisitions and Summary of Significant Accounting Policies (Tables) | 12 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Description of Business, Recent Acquisitions and Summary of Significant Accounting Policies [Abstarct] | |||||||||||||||||
Company's financial assets accounted for at fair value on a recurring basis | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Assets | |||||||||||||||||
Cash and cash equivalents | $ | 48,370 | $ | – | $ | – | $ | 48,370 | |||||||||
Total assets measured at fair value | $ | 48,370 | $ | – | $ | – | $ | 48,370 | |||||||||
Liabilities | |||||||||||||||||
Derivative instruments | $ | – | $ | 2,464,232 | $ | – | $ | 2,464,232 | |||||||||
Total liabilities measured at fair value | $ | – | $ | 2,464,232 | $ | – | $ | 2,464,232 | |||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Assets | |||||||||||||||||
Cash and cash equivalents | $ | 568 | $ | – | $ | – | $ | 568 | |||||||||
Total assets measured at fair value | $ | 568 | $ | – | $ | – | $ | 568 | |||||||||
Liabilities | |||||||||||||||||
Derivative instruments | $ | – | $ | - | $ | – | $ | - | |||||||||
Total liabilities measured at fair value | $ | – | $ | - | $ | – | $ | - | |||||||||
Schedule of securities to be included in diluted share calculation | |||||||||||||||||
For the Year Ended | For the Period From March 26, | ||||||||||||||||
2013 (“Inception”) to | |||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2014 | 2013 | ||||||||||||||||
Series A Preferred stock | 500,000 | - | |||||||||||||||
Common stock options | 303,889 | - | |||||||||||||||
Common stock warrants | 1,184,727 | - | |||||||||||||||
Convertible notes | 843,213 | - | |||||||||||||||
2,831,829 | - | ||||||||||||||||
Weighted average variables used in the Black Scholes model | |||||||||||||||||
Year ended | Stock Price at | Dividend | Exercise Price | Risk Free | Volatility | Average | |||||||||||
March 31, | Grant Date | Yield | Interest Rate | Life | |||||||||||||
2014 | $1.66 | –% | $1.66 | 2.54% | 401% | 10 | |||||||||||
2013 | n/a | n/a | n/a | n/a | n/a | n/a | |||||||||||
Accrued_Expenses_Tables
Accrued Expenses (Tables) | 12 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Accrued Expenses [Abstract] | |||||||||
Summary of accrued expenses | September 30, | September 30, | |||||||
2014 | 2013 | ||||||||
Accrued interest | $ | 16,300 | $ | - | |||||
Accrued interest - related party | 18,325 | 7,573 | |||||||
Accrued wages and taxes | 108,374 | - | |||||||
Other | 26,514 | - | |||||||
$ | 169,513 | $ | 7,573 |
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Income Taxes [Abstract] | |||||||||
Schedule of current and deferred income tax provision for federal and state income taxes | |||||||||
2014 | 2013 | ||||||||
Current tax provision (benefit): | |||||||||
Federal | $ | - | $ | - | |||||
State | 800 | - | |||||||
Total | 800 | (41,000 | ) | ||||||
Deferred tax provision (benefit) | |||||||||
Federal | (262,000 | ) | (29,000 | ) | |||||
State | - | - | |||||||
Valuation allowance | 262,000 | 29,000 | |||||||
Total | - | - | |||||||
Total provision (benefit) for income taxes | $ | 800 | $ | - | |||||
Schedule of reconciliations of the U.S. federal statutory rate to the actual tax rate | |||||||||
2014 | 2013 | ||||||||
US federal statutory income tax rate | (34.0 | %) | (34.5 | %) | |||||
State tax – net of benefit | (6.0 | %) | (6.0 | %) | |||||
(40.0 | %) | (40.5 | %) | ||||||
Permanent differences | 38.7 | % | 11.8 | % | |||||
Changes of deferred tax assets | 0.2 | % | - | % | |||||
Net operating losses and other | 1 | % | - | % | |||||
Increase in valuation allowance | 0.1 | % | 28.7 | % | |||||
Effective tax rate | - | % | - | % | |||||
Schedule of deferred tax assets and liabilities | |||||||||
As of September, | |||||||||
2014 | 2013 | ||||||||
Current deferred tax assets (liabilities): | |||||||||
Accrued expenses and other | $ | - | $ | - | |||||
Total current deferred tax assets | - | - | |||||||
Non-current deferred tax assets and liabilities: | |||||||||
State taxes | - | - | |||||||
Contributed services | (18,000 | ) | (12,000 | ) | |||||
Stock options | (180,000 | ) | - | ||||||
Property, plant and equipment | (49,000 | ) | - | ||||||
Debt discounts | (166,000 | ) | - | ||||||
Net operating losses | 704,000 | 41,000 | |||||||
Total non-current deferred tax assets | 291,000 | 29,000 | |||||||
Valuation allowance | (291,000 | ) | (29,000 | ) | |||||
Total non-current deferred tax assets | - | - | |||||||
Net deferred tax assets | $ | - | $ | - | |||||
Stockholders_Deficit_Tables
Stockholders' Deficit (Tables) | 12 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Employee Stock Option [Member] | |||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||
Schedule of option activity | Shares | Weighted | Weighted | Aggregate | |||||||||||||
Average | Average | Intrinsic | |||||||||||||||
Exercise | Remaining | Value | |||||||||||||||
Price | Contractual Term | ||||||||||||||||
Options outstanding at September 30, 2013 | 125,000 | $ | 13.2 | 2.3 | $ | - | |||||||||||
Options granted | 1,025,000 | $ | 1.67 | ||||||||||||||
Options exercised | - | $ | - | ||||||||||||||
Options cancelled/forfeited/expired | - | $ | - | ||||||||||||||
Options outstanding at September 30, 2014 | 1,150,000 | $ | 2.92 | 8.7 | $ | 4,648,294 | |||||||||||
Options exercisable at September 30, 2014 | 303,889 | $ | 6.41 | 5.8 | $ | 811,877 | |||||||||||
Warrant [Member] | |||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||
Schedule of option activity | |||||||||||||||||
Shares | Weighted Average Price | Weighted Average Remaining Contractual Term | Aggregate Intrinsic Value | ||||||||||||||
Warrants outstanding at September 30, 2013 | 8,400,000 | $ | 28 | 2.6 | $ | - | |||||||||||
Warrants Issued | - | - | |||||||||||||||
Warrants Exercised | (3,131,970 | ) | 0.114 | ||||||||||||||
Cancelled/forfeited/expired | (4,083,303 | ) | 0.114 | ||||||||||||||
Warrants outstanding at September 30, 2014 | 1,184,727 | $ | 0.114 | 1.6 | $ | 7,217,234 | |||||||||||
Description_of_Business_Recent3
Description of Business, Recent Acquisitions and Summary of Significant Accounting Policies (Details) (Fair Value, Measurements, Recurring [Member], USD $) | Sep. 30, 2014 | Sep. 30, 2013 |
Assets | ||
Cash and cash equivalents | $48,370 | $568 |
Total assets measured at fair value | 48,370 | 568 |
Liabilities | ||
Derivative instruments | 2,464,232 | |
Total liabilities measured at fair value | 2,464,232 | |
Level 1 [Member] | ||
Assets | ||
Cash and cash equivalents | 48,370 | 568 |
Total assets measured at fair value | 48,370 | 568 |
Liabilities | ||
Derivative instruments | ||
Total liabilities measured at fair value | ||
Level 2 [Member] | ||
Assets | ||
Cash and cash equivalents | ||
Total assets measured at fair value | ||
Liabilities | ||
Derivative instruments | 2,464,232 | |
Total liabilities measured at fair value | 2,464,232 | |
Level 3 [Member] | ||
Assets | ||
Cash and cash equivalents | ||
Total assets measured at fair value | ||
Liabilities | ||
Derivative instruments | ||
Total liabilities measured at fair value |
Description_of_Business_Recent4
Description of Business, Recent Acquisitions and Summary of Significant Accounting Policies (Details 1) | 6 Months Ended | 12 Months Ended |
Sep. 30, 2013 | Sep. 30, 2014 | |
Description Of Business [Line Items] | ||
Diluted shares outstanding | 2,831,829 | |
Convertible notes [Member] | ||
Description Of Business [Line Items] | ||
Diluted shares outstanding | 843,213 | |
Series A Preferred Stock [Member] | ||
Description Of Business [Line Items] | ||
Diluted shares outstanding | 500,000 | |
Common stock options [Member] | ||
Description Of Business [Line Items] | ||
Diluted shares outstanding | 303,889 | |
Common stock warrants [Member] | ||
Description Of Business [Line Items] | ||
Diluted shares outstanding | 1,184,727 |
Description_of_Business_Recent5
Description of Business, Recent Acquisitions and Summary of Significant Accounting Policies (Details 2) (USD $) | 6 Months Ended | 12 Months Ended |
Sep. 30, 2013 | Sep. 30, 2014 | |
Weighted average variables used in the Black Scholes model | ||
Stock Price at Grant Date | $1.66 | |
Dividend Yield | ||
Exercise Price | $1.66 | |
Risk Free Interest Rate | 2.54% | |
Volatility | 401.00% | |
Average Life | 10 years |
Description_of_Business_Recent6
Description of Business, Recent Acquisitions and Summary of Significant Accounting Policies (Details Textual) (USD $) | 6 Months Ended | 12 Months Ended | 18 Months Ended | 0 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 24, 2013 | Feb. 28, 2014 | |
Shop | |||||
Description of Business And Summary of Significant Accounting Policies (Textual) | |||||
Liabilities assumed | $24,000 | ||||
Principal amount | 476,333 | 476,333 | |||
Interest rate | 6.00% | 6.00% | |||
Maturity date | 27-Feb-16 | ||||
Research and development expense | 45,757 | 45,757 | |||
Purchase interest rate | 50.00% | ||||
Wholesale authorized dealer network shops | 1,100 | ||||
Estimated useful lives | 3 years | ||||
Stock options expense | 450,001 | ||||
Option [Member] | |||||
Description of Business And Summary of Significant Accounting Policies (Textual) | |||||
Number of options excluded from the compution of diluted shares outstanding | 125,000 | ||||
Board Of Directors And Shareholders [Member] | |||||
Description of Business And Summary of Significant Accounting Policies (Textual) | |||||
Percentage of common stock outstanding representing by the Board of Directors and shareholders | 53.30% | ||||
Per Mr Cooks [Member] | |||||
Description of Business And Summary of Significant Accounting Policies (Textual) | |||||
Compensation | 80,000 | ||||
Employment Term | 2 years | ||||
Employment Agreement Description | In the event that his employment is terminated without cause he will be entitled to payment of his base salary for a six (6) month period following termination. | ||||
Accrued wages and taxes payable | 29,446 | ||||
Per Mr Traceys [Member] | |||||
Description of Business And Summary of Significant Accounting Policies (Textual) | |||||
Compensation | 120,000 | ||||
Employment Term | 2 years | ||||
Employment Agreement Description | In the event that his employment is terminated without cause he will be entitled to the remaining salary of the two (2) year employment term plus the issuance of five percent (5%) of the Company's common stock on a fully diluted basis. | ||||
Accrued wages and taxes payable | 59,273 | ||||
Hive Ceramics [Member] | |||||
Description of Business And Summary of Significant Accounting Policies (Textual) | |||||
Capital from HIVE Ceramics | 250,000 | 250,000 | |||
Principal amount | $250,000 | $250,000 | |||
Interest rate | 6.00% | 6.00% | |||
Maturity date | 27-Feb-16 | ||||
Merger And Reorganization Agreement [Member] | |||||
Description of Business And Summary of Significant Accounting Policies (Textual) | |||||
Business mergers and acquistion, Description | On September 30, 2013, the then PeopleString Corporation, and its wholly-owned subsidiary, RewardString Corporation ("RewardString"), and Vape Holdings, Inc., a Nevada corporation (the "Private Company"), closed a Merger and Reorganization Agreement whereby the Private Company merged with RewardString, with the Private Company being the surviving entity (the "Merger"). The Private Company shareholders represented approximately 74.95% of the total issued and outstanding common stock of the merged company. | ||||
Percentage of common shares issued to Vape shareholders out of total issued and outstanding of merged company | 74.95% | ||||
Asset Purchase Agreement [Member] | |||||
Description of Business And Summary of Significant Accounting Policies (Textual) | |||||
Shares issued during period | 500,000 |
Going_Concern_Details
Going Concern (Details) (USD $) | 6 Months Ended | 12 Months Ended |
Sep. 30, 2013 | Sep. 30, 2014 | |
Going Concern (Textual) | ||
Working capital deficit | $36,138 | |
Net cash used in operating activities | 21,617 | -980,003 |
Net loss | ($101,483) | ($25,063,658) |
Accrued_Expenses_Details
Accrued Expenses (Details) (USD $) | Sep. 30, 2014 | Sep. 30, 2013 |
Summary of Accrued Expenses: | ||
Accrued interest | $16,300 | |
Accrued interest - related party | 18,325 | 7,573 |
Accrued wages and taxes | 108,374 | |
Other | 26,514 | |
Accrued expenses | $169,513 | $7,573 |
Third_Party_Debt_Details
Third Party Debt (Details) (USD $) | 6 Months Ended | 12 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2013 | Sep. 30, 2014 | Feb. 11, 2014 | Jul. 10, 2014 | Jan. 31, 2014 | Jul. 28, 2014 | Oct. 28, 2014 | Mar. 19, 2014 | Feb. 18, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | |
Third Party Debt (Textual) | |||||||||||
Principal amount | $476,333 | ||||||||||
Maturity date | 27-Feb-16 | ||||||||||
Interest rate | 6.00% | ||||||||||
Convertible Notes payable | 7,667 | 121,336 | 121,336 | ||||||||
Interest expense | 241,065 | ||||||||||
Interest expense in excess of fair market value of the stock issued | 44,239 | ||||||||||
Minimum [Member] | |||||||||||
Third Party Debt (Textual) | |||||||||||
Maturity date | 28-Feb-15 | ||||||||||
Conversion price | $3 | ||||||||||
Maximum [Member] | |||||||||||
Third Party Debt (Textual) | |||||||||||
Maturity date | 31-Mar-15 | ||||||||||
Conversion price | $8 | ||||||||||
10% Convertible Note [Member] | |||||||||||
Third Party Debt (Textual) | |||||||||||
Principal amount | 41,667 | 100,000 | |||||||||
Maturity date | 31-Jan-15 | ||||||||||
Interest rate | 10.00% | 10.00% | |||||||||
Conversion price | $2 | $2 | |||||||||
Amortized discount to interest expense | 21,094 | 84,375 | |||||||||
Discount related to beneficial conversion feature | 58,333 | ||||||||||
Unamortized discount | 63,281 | ||||||||||
Accrued and unpaid interest | 345 | ||||||||||
Common stock issued on conversion | 21,006 | ||||||||||
Interest expense in excess of fair market value of the stock issued | 793 | ||||||||||
6% Convertible Notes [Member] | |||||||||||
Third Party Debt (Textual) | |||||||||||
Principal amount | 230,000 | 10,000 | |||||||||
Interest rate | 6.00% | 6.00% | |||||||||
Conversion price | $1.31 | ||||||||||
Amortized discount to interest expense | 57,667 | ||||||||||
Discount related to beneficial conversion feature | 92,000 | ||||||||||
Accrued and unpaid interest | 252 | ||||||||||
Common stock issued on conversion | 7,830 | ||||||||||
Number of accredited investors | 10 | ||||||||||
Conversion description | The conversion price of these 6% Notes is the average of the fifteen (15) lowest daily VWAP's occurring during the twenty (20) consecutive trading days immediately preceding the date each Holder elects convert all of their 6% Note minus a discount of 40%. | ||||||||||
Interest expense in excess of fair market value of the stock issued | 530 | ||||||||||
6% Convertible Notes [Member] | Minimum [Member] | |||||||||||
Third Party Debt (Textual) | |||||||||||
Maturity date | 28-Feb-15 | ||||||||||
Conversion price | $1 | ||||||||||
6% Convertible Notes [Member] | Maximum [Member] | |||||||||||
Third Party Debt (Textual) | |||||||||||
Maturity date | 31-Mar-15 | ||||||||||
Conversion price | $3 | ||||||||||
8% Convertible Notes [Member] | |||||||||||
Third Party Debt (Textual) | |||||||||||
Principal amount | 198,000 | 198,000 | 20,000 | ||||||||
Maturity date | 19-Nov-14 | 18-Feb-16 | |||||||||
Interest rate | 8.00% | 8.00% | |||||||||
Conversion price | $1 | $0.50 | |||||||||
Amortized discount to interest expense | 138,600 | 1,000 | 1,667 | ||||||||
Discount related to beneficial conversion feature | 158,400 | 8,000 | |||||||||
Convertible Notes payable | 198,000 | ||||||||||
Accrued and unpaid interest | 9,764 | 1,100 | |||||||||
Common stock issued on conversion | 207,764 | 42,370 | |||||||||
Conversion description | The conversion price for the W-net Note is eighty percent (80%) of the average of the three (3) lowest daily closing bid prices (the 3 lowest prices will be calculated on a VWAP basis) occurring during the ten (10) consecutive Trading Days immediately preceding the applicable conversion date on which the holder elects to convert. | The conversion price for the notes is the lowest market closing price per share within the previous twenty (20) market days of the date of conversion minus a discount of forty percent (40%). | |||||||||
Interest expense | $19,264 | ||||||||||
8% Convertible Notes [Member] | Minimum [Member] | |||||||||||
Third Party Debt (Textual) | |||||||||||
Conversion price | $1 | ||||||||||
8% Convertible Notes [Member] | Maximum [Member] | |||||||||||
Third Party Debt (Textual) | |||||||||||
Conversion price | $300 |
Related_Party_Debt_Details
Related Party Debt (Details) (USD $) | 3 Months Ended | 12 Months Ended | 1 Months Ended | 0 Months Ended | 3 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | ||||||||
Dec. 31, 2013 | Sep. 30, 2014 | Dec. 23, 2013 | Oct. 16, 2013 | Jul. 16, 2014 | 12-May-14 | Aug. 11, 2014 | 12-May-14 | Dec. 04, 2014 | Mar. 17, 2014 | Oct. 28, 2014 | Feb. 18, 2014 | Dec. 07, 2013 | Jan. 31, 2014 | Sep. 30, 2013 | Dec. 03, 2014 | |
Related Party Debt (Textual) | ||||||||||||||||
Interest rate | 6.00% | |||||||||||||||
Notes payable, related parties | $341,290 | |||||||||||||||
Accrued interest | 16,300 | |||||||||||||||
Maturity date | 27-Feb-16 | |||||||||||||||
Interest expense related to notes payable | 17,750 | 8,879 | ||||||||||||||
Notes payable | 250,000 | |||||||||||||||
Principal amount | 476,333 | |||||||||||||||
Interest expense in excess of fair market value of the stock issued | 44,239 | |||||||||||||||
8% Note I [Member] | ||||||||||||||||
Related Party Debt (Textual) | ||||||||||||||||
Convertible note | 2,420 | |||||||||||||||
Maturity date | 15-Apr-15 | |||||||||||||||
Interest expense related to notes payable | 134 | |||||||||||||||
Principal amount | 2,420 | |||||||||||||||
Common stock issued on conversion | 3,990 | |||||||||||||||
Discount related to beneficial conversion feature | 968 | |||||||||||||||
Conversion description | The conversion price for 8% Note I was the lowest market closing price per share within the previous twenty (20) market days of the date of conversion minus a discount of forty percent (40%). | |||||||||||||||
8% Note II [Member] | ||||||||||||||||
Related Party Debt (Textual) | ||||||||||||||||
Convertible note | 30,300 | |||||||||||||||
Maturity date | 3-Jul-15 | |||||||||||||||
Interest expense related to notes payable | 1,239 | |||||||||||||||
Principal amount | 30,300 | |||||||||||||||
Common stock issued on conversion | 49,139 | |||||||||||||||
Discount related to beneficial conversion feature | 12,120 | |||||||||||||||
Conversion description | The conversion price for 8% Note II was the lowest market closing price per share within the previous twenty (20) market days of the date of conversion minus a discount of forty percent (40%). | |||||||||||||||
8% Note III [Member] | ||||||||||||||||
Related Party Debt (Textual) | ||||||||||||||||
Convertible note | 180,940 | |||||||||||||||
Interest rate | 8.00% | |||||||||||||||
Maturity date | 5-Mar-15 | |||||||||||||||
Interest expense related to notes payable | 19,750 | |||||||||||||||
Principal amount | 180,940 | 180,940 | ||||||||||||||
Conversion price | $0.68 | |||||||||||||||
Unamortized discount | 31,665 | |||||||||||||||
Common stock issued on conversion | 296,003 | |||||||||||||||
Discount related to beneficial conversion feature | 72,376 | |||||||||||||||
Conversion description | The conversion price for 8% Note III is the lowest market closing price per share within the previous twenty (20) market days of the date of conversion minus a discount of forty percent (40%). | |||||||||||||||
Interest expense in excess of fair market value of the stock issued | 44,239 | |||||||||||||||
Long term convertible notes payable [Member] | ||||||||||||||||
Related Party Debt (Textual) | ||||||||||||||||
Interest expense related to notes payable | 25,572 | |||||||||||||||
September 30 2015 [Member] | ||||||||||||||||
Related Party Debt (Textual) | ||||||||||||||||
Future principal payments of related party notes payable | 52,828 | |||||||||||||||
September 30 2015 [Member] | Long term convertible notes payable [Member] | ||||||||||||||||
Related Party Debt (Textual) | ||||||||||||||||
Future principal payments of related party notes payable | 90,000 | |||||||||||||||
September 30 2016 [Member] | ||||||||||||||||
Related Party Debt (Textual) | ||||||||||||||||
Future principal payments of related party notes payable | 288,462 | |||||||||||||||
September 30 2016 [Member] | Long term convertible notes payable [Member] | ||||||||||||||||
Related Party Debt (Textual) | ||||||||||||||||
Future principal payments of related party notes payable | 284,595 | |||||||||||||||
Subsequent Event [Member] | ||||||||||||||||
Related Party Debt (Textual) | ||||||||||||||||
Interest rate | 70.00% | |||||||||||||||
Principal amount | 500,000 | |||||||||||||||
Conversion description | The Note bears interest at the rate of 10% per annum and is convertible into common stock of the Company at a conversion price per share of 70% of the average of the three (3) lowest Closing Sale Prices in the ten (10) Trading Days immediately preceding the applicable Conversion (subject to adjustment in the event of stock splits, stock dividends, and similar transactions, and in the event of subsequent sales of common stock at a lower purchase price (subject to certain exceptions))(the “Conversion Price”). In no event will the Conversion Price be less than $0.50 per share. Repayment of principal on the Note, together with accrued interest thereon, is due in twelve monthly installments, commencing six months from issuance. The Company may make such payments in cash (in which event the Company will pay a 25% premium) or, subject to certain conditions, in shares of common stock valued at the lower of the Conversion Price or 70% of the average of the three (3) lowest Closing Sale Prices in the ten (10) Trading Days immediately preceding the applicable payment date. | |||||||||||||||
Related Party [Member] | ||||||||||||||||
Related Party Debt (Textual) | ||||||||||||||||
Accounts payable, related parties | 40,000 | 40,000 | ||||||||||||||
Maturity date | 1-May-16 | |||||||||||||||
Joe Andreae [Member] | ||||||||||||||||
Related Party Debt (Textual) | ||||||||||||||||
Accounts payable outstanding | 12,828 | |||||||||||||||
Interest rate | 6.00% | 6.00% | 6.00% | |||||||||||||
Notes payable, related parties | 40,000 | 12,828 | 40,000 | |||||||||||||
Maturity date | 30-Nov-14 | 1-May-16 | ||||||||||||||
Joe Andreae [Member] | Subsequent Event [Member] | ||||||||||||||||
Related Party Debt (Textual) | ||||||||||||||||
Accrued interest | 1,348 | |||||||||||||||
Repayament of principal balance | 40,000 | |||||||||||||||
Joe Andreae [Member] | Subsequent Event [Member] | Andreae Note II [Member] | ||||||||||||||||
Related Party Debt (Textual) | ||||||||||||||||
Accrued interest | 240 | |||||||||||||||
Repayament of principal balance | 12,828 | |||||||||||||||
Jerome Kaiser [Member] | 8% Convertible Note [Member] | ||||||||||||||||
Related Party Debt (Textual) | ||||||||||||||||
Interest rate | 8.00% | |||||||||||||||
Maturity date | 17-Mar-15 | |||||||||||||||
Future principal payments of related party notes payable | 50,000 | |||||||||||||||
Notes payable | 50,000 | |||||||||||||||
Discount related to beneficial conversion feature | 10,000 | |||||||||||||||
Amortized discount to interest expense | 5,833 | |||||||||||||||
Conversion description | The conversion price for the Kaiser Note is the market closing price of the market day immediately preceding the date of conversion minus twenty percent (20%). | |||||||||||||||
Kyle [Member] | 6% Note [Member] | ||||||||||||||||
Related Party Debt (Textual) | ||||||||||||||||
Interest rate | 6.00% | 6.00% | ||||||||||||||
Notes payable, related parties | 40,000 | 40,000 | 40,000 | |||||||||||||
Interest expense related to notes payable | 1,098 | |||||||||||||||
Conversion price | $1 | |||||||||||||||
Common stock issued on conversion | 41,098 | |||||||||||||||
Discount related to beneficial conversion feature | 16,000 | |||||||||||||||
Amortized discount to interest expense | 6,667 | |||||||||||||||
Kyle Tracey [Member] | 8% Convertible Note [Member] | ||||||||||||||||
Related Party Debt (Textual) | ||||||||||||||||
Interest rate | 8.00% | |||||||||||||||
Accounts payable, related parties | 10,612 | |||||||||||||||
Maturity date | 18-Feb-16 | |||||||||||||||
Interest expense related to notes payable | 584 | |||||||||||||||
Principal amount | 10,612 | |||||||||||||||
Conversion price | $0.50 | |||||||||||||||
Common stock issued on conversion | 22,481 | |||||||||||||||
Discount related to beneficial conversion feature | 4,245 | |||||||||||||||
Amortized discount to interest expense | 1,415 | |||||||||||||||
Conversion description | The conversion price for the Tracey Note is the lowest market closing price per share within the previous twenty (20) market days of the date of conversion minus a discount of forty percent (40%). | |||||||||||||||
Kyle Tracey Two [Member] | 8% Convertible Note [Member] | ||||||||||||||||
Related Party Debt (Textual) | ||||||||||||||||
Interest rate | 8.00% | 8.00% | ||||||||||||||
Accounts payable, related parties | 11,042 | 11,042 | ||||||||||||||
Maturity date | 12-May-16 | |||||||||||||||
Interest expense related to notes payable | 407 | |||||||||||||||
Principal amount | 11,042 | 11,042 | ||||||||||||||
Conversion price | $0.50 | |||||||||||||||
Common stock issued on conversion | 22,989 | |||||||||||||||
Discount related to beneficial conversion feature | 4,417 | |||||||||||||||
Amortized discount to interest expense | 920 | |||||||||||||||
Conversion description | The conversion price for the Tracey Note II is the lowest market closing price per share within the previous twenty (20) market days of the date of conversion minus a discount of forty percent (40%). | |||||||||||||||
Michael Cook [Member] | 8% Convertible Note [Member] | ||||||||||||||||
Related Party Debt (Textual) | ||||||||||||||||
Interest rate | 8.00% | 8.00% | ||||||||||||||
Accounts payable, related parties | 11,825 | 11,825 | ||||||||||||||
Maturity date | 12-May-16 | |||||||||||||||
Interest expense related to notes payable | 435 | |||||||||||||||
Principal amount | 11,825 | 11,825 | ||||||||||||||
Conversion price | $0.50 | |||||||||||||||
Common stock issued on conversion | 24,619 | |||||||||||||||
Discount related to beneficial conversion feature | 4,730 | |||||||||||||||
Amortized discount to interest expense | 985 | |||||||||||||||
Conversion description | The conversion price for the Cook Note is the lowest market closing price per share within the previous twenty (20) market days of the date of conversion minus a discount of forty percent (40%). | |||||||||||||||
Mr. Cook [Member] | 8% Convertible Note [Member] | ||||||||||||||||
Related Party Debt (Textual) | ||||||||||||||||
Interest rate | 8.00% | |||||||||||||||
Accounts payable, related parties | 15,115 | |||||||||||||||
Maturity date | 11-Aug-16 | |||||||||||||||
Interest expense related to notes payable | 255 | |||||||||||||||
Principal amount | 15,115 | |||||||||||||||
Conversion price | $0.50 | |||||||||||||||
Common stock issued on conversion | 30,864 | |||||||||||||||
Discount related to beneficial conversion feature | 6,046 | |||||||||||||||
Conversion description | The conversion price for the Cook Note II is the lowest market closing price per share within the previous twenty (20) market days of the date of conversion minus a discount of forty percent (40%). | |||||||||||||||
Mr. Tracey [Member] | 8% Convertible Note [Member] | ||||||||||||||||
Related Party Debt (Textual) | ||||||||||||||||
Interest rate | 8.00% | |||||||||||||||
Accounts payable, related parties | 216,001 | |||||||||||||||
Maturity date | 11-Aug-16 | |||||||||||||||
Interest expense related to notes payable | 3,645 | |||||||||||||||
Principal amount | 216,001 | |||||||||||||||
Conversion price | $0.50 | |||||||||||||||
Common stock issued on conversion | 441,057 | |||||||||||||||
Discount related to beneficial conversion feature | 86,401 | |||||||||||||||
Conversion description | The conversion price for the Tracey Note III is the lowest market closing price per share within the previous twenty (20) market days of the date of conversion minus a discount of forty percent (40%). | |||||||||||||||
Shareholder [Member] | ||||||||||||||||
Related Party Debt (Textual) | ||||||||||||||||
Interest rate | 6.00% | |||||||||||||||
Notes payable, related parties | 23,462 | |||||||||||||||
Accounts payable, related parties | $15,000 | |||||||||||||||
Maturity date | 1-Dec-16 |
Anslow_Jaclin_LLP_Convertible_1
Anslow & Jaclin, LLP Convertible Promissory Note (Details) (USD $) | 0 Months Ended | 3 Months Ended | 12 Months Ended | |
Dec. 24, 2013 | Feb. 01, 2013 | Dec. 31, 2013 | Sep. 30, 2014 | |
Anslow & Jaclin, LP Convertible Promissory Note (Textual) | ||||
Maturity date | 27-Feb-16 | |||
Accrued interest | $16,300 | |||
A & J Note [Member] | ||||
Anslow & Jaclin, LP Convertible Promissory Note (Textual) | ||||
Principle amount | 17,799 | 17,750 | ||
Conversion price | $0.00 | $0.00 | ||
Annual rate of interest | 6.00% | |||
Conversion shares | 222,498 | |||
Maturity date | 31-Dec-15 | |||
Discount related to beneficial conversion feature | 17,750 | 17,750 | ||
Accrued interest | $1,592 |
Commitments_and_Contingencies_
Commitments and Contingencies (Details) (USD $) | 3 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | 1 Months Ended | 9 Months Ended | 12 Months Ended | 1 Months Ended | ||||||||||
Mar. 31, 2014 | Apr. 16, 2014 | Jun. 28, 2014 | Mar. 27, 2014 | Apr. 21, 2014 | Jun. 25, 2014 | Oct. 20, 2014 | Dec. 22, 2014 | Mar. 31, 2014 | Sep. 30, 2014 | Apr. 22, 2014 | Apr. 24, 2014 | Jun. 12, 2014 | Jun. 04, 2014 | Apr. 28, 2014 | 27-May-14 | 14-May-14 | Aug. 21, 2014 | |
Warberg WF I, LP | ||||||||||||||||||
Commitments And Contingencies Textuals [Abstract] | ||||||||||||||||||
Warrants issued | 19,250 | 19,250 | ||||||||||||||||
Exercise price per share | $28 | $28 | ||||||||||||||||
Shares issued during period | 3,542 | |||||||||||||||||
Iroquois Master Fund, Ltd | ||||||||||||||||||
Commitments And Contingencies Textuals [Abstract] | ||||||||||||||||||
Shares issued during period | 583,427 | |||||||||||||||||
Warrants outstanding | 337,626 | |||||||||||||||||
Mr. Cook [Member] | ||||||||||||||||||
Commitments And Contingencies Textuals [Abstract] | ||||||||||||||||||
Annual salary | $80,000 | |||||||||||||||||
Additionally granted stock options | 100,000 | |||||||||||||||||
Exercise Price | $1.66 | |||||||||||||||||
Employment term | 2 years | |||||||||||||||||
Employment agreement description | Mr. Cook is entitled to receive severance equal to six (6) months base salary if terminated without cause by the Company. | |||||||||||||||||
Kyle Tracey [Member] | ||||||||||||||||||
Commitments And Contingencies Textuals [Abstract] | ||||||||||||||||||
Annual salary | 120,000 | |||||||||||||||||
Percentage of company common stock | 5.00% | |||||||||||||||||
Employment term | 2 years | |||||||||||||||||
Mr. Tracey [Member] | ||||||||||||||||||
Commitments And Contingencies Textuals [Abstract] | ||||||||||||||||||
Additionally granted stock options | 190,000 | |||||||||||||||||
Exercise Price | $1.66 | |||||||||||||||||
Mr.Andrea [Member] | ||||||||||||||||||
Commitments And Contingencies Textuals [Abstract] | ||||||||||||||||||
Annual salary | 75,000 | |||||||||||||||||
Additionally granted stock options | 190,000 | |||||||||||||||||
Exercise Price | $1.66 | |||||||||||||||||
Employment term | 2 years | |||||||||||||||||
Employment agreement description | Mr. Andreae is entitled to receive severance equal to six (6) months base salary if terminated without cause by the Company. | |||||||||||||||||
Allen Viemes [Member] | ||||||||||||||||||
Commitments And Contingencies Textuals [Abstract] | ||||||||||||||||||
Annual salary | 4,000 | |||||||||||||||||
Employment term | 1 year | |||||||||||||||||
Employment agreement description | Mr. Viernes and/or the Company may terminate the Viernes Agreement at any time upon thirty (30) days written notice. | |||||||||||||||||
Subsequent Event [Member] | ||||||||||||||||||
Commitments And Contingencies Textuals [Abstract] | ||||||||||||||||||
Additionally granted stock options | 30,000 | 225,000 | ||||||||||||||||
Exercise Price | $0.83 | $0.70 | ||||||||||||||||
Subsequent Event [Member] | Chief Executive Officer [Member] | ||||||||||||||||||
Commitments And Contingencies Textuals [Abstract] | ||||||||||||||||||
Additionally granted stock options | 30,000 | 25,000 | ||||||||||||||||
Warrants [Member] | ||||||||||||||||||
Commitments And Contingencies Textuals [Abstract] | ||||||||||||||||||
Warrants outstanding | 0 | |||||||||||||||||
Warrants cancelled | 28,468 | 21,044 | ||||||||||||||||
Warrant unissued | 373,576 | 344,456 | ||||||||||||||||
Warrants outstanding and unexercised | 1,184,727 | |||||||||||||||||
Loss on settlement of stock | 29,528,844 | 29,528,844 | 2,464,232 | |||||||||||||||
Long term warrant liability | 29,430,022 | 29,430,022 | ||||||||||||||||
Closing stock shares | 4,407,200 | 4,407,200 | ||||||||||||||||
Shares issued, price per share | $7.25 | $7.25 | ||||||||||||||||
Change in derivative liability | 6,598,965 | |||||||||||||||||
Warrants [Member] | Warberg WF I, LP | ||||||||||||||||||
Commitments And Contingencies Textuals [Abstract] | ||||||||||||||||||
Warrants issued | 3,128,428 | |||||||||||||||||
Exercise price per share | $0.11 | |||||||||||||||||
Shares issued during period | 356,415 | |||||||||||||||||
Warrants outstanding | 378,855 | 0 | ||||||||||||||||
Warrants cancelled | 4,083,303 | 3,992,800 | 9,952 | |||||||||||||||
Warrant unissued | 368,903 | |||||||||||||||||
Warrants outstanding and unexercised | 1,184,727 | |||||||||||||||||
Warrants [Member] | Cranshire Capital, LP | ||||||||||||||||||
Commitments And Contingencies Textuals [Abstract] | ||||||||||||||||||
Warrants outstanding | 2,000 | |||||||||||||||||
Warrants cancelled | 5,211 | 10,956 | 3,620 | |||||||||||||||
Warrant unissued | 262,523 | 195,359 | 99,538 | |||||||||||||||
Warrants [Member] | Iroquois Master Fund, Ltd | ||||||||||||||||||
Commitments And Contingencies Textuals [Abstract] | ||||||||||||||||||
Shares issued during period | 3,542 | |||||||||||||||||
Warrants outstanding | 0 | |||||||||||||||||
Warrants cancelled | 2,742 | |||||||||||||||||
Warrant unissued | 62,662 | |||||||||||||||||
Warrants [Member] | Sphinx Trading, LP | ||||||||||||||||||
Commitments And Contingencies Textuals [Abstract] | ||||||||||||||||||
Shares issued during period | 481,569 | |||||||||||||||||
Warrants outstanding | 100 | |||||||||||||||||
Warrants cancelled | 9,559 | |||||||||||||||||
Warrants [Member] | Minimum [Member] | ||||||||||||||||||
Commitments And Contingencies Textuals [Abstract] | ||||||||||||||||||
Shares issued, price per share | $4.72 | |||||||||||||||||
Warrants [Member] | Minimum [Member] | Warberg WF I, LP | ||||||||||||||||||
Commitments And Contingencies Textuals [Abstract] | ||||||||||||||||||
Exercise price per share | $0.11 | |||||||||||||||||
Warrants outstanding | 34,200 | |||||||||||||||||
Warrants [Member] | Minimum [Member] | Iroquois Master Fund, Ltd | ||||||||||||||||||
Commitments And Contingencies Textuals [Abstract] | ||||||||||||||||||
Principal exchange of common stock | 1,000,000 | |||||||||||||||||
Number of warrants perecentage | 15.00% | |||||||||||||||||
Warrants [Member] | Maximum [Member] | ||||||||||||||||||
Commitments And Contingencies Textuals [Abstract] | ||||||||||||||||||
Shares issued, price per share | $7.25 | |||||||||||||||||
Warrants [Member] | Maximum [Member] | Warberg WF I, LP | ||||||||||||||||||
Commitments And Contingencies Textuals [Abstract] | ||||||||||||||||||
Exercise price per share | $28 | |||||||||||||||||
Warrants outstanding | 8,400,000 | |||||||||||||||||
Warrants [Member] | Maximum [Member] | Iroquois Master Fund, Ltd | ||||||||||||||||||
Commitments And Contingencies Textuals [Abstract] | ||||||||||||||||||
Principal exchange of common stock | 1,000,000 | |||||||||||||||||
Number of warrants perecentage | 20.00% |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 6 Months Ended | 12 Months Ended |
Sep. 30, 2013 | Sep. 30, 2014 | |
Current tax provision (benefit): | ||
Federal | ||
State | 800 | |
Total | -41,000 | 800 |
Deferred tax provision (benefit) | ||
Federal | -29,000 | -262,000 |
State | ||
Valuation allowance | 29,000 | 262,000 |
Total | ||
Total provision (benefit) for income taxes | $800 |
Income_Taxes_Details_1
Income Taxes (Details 1) | 6 Months Ended | 12 Months Ended |
Sep. 30, 2013 | Sep. 30, 2014 | |
Reconciliations of the U.S. federal statutory rate to the actual tax rate | ||
US federal statutory income tax rate | -34.50% | -34.00% |
State tax - net of benefit | -6.00% | -6.00% |
Effective income tax rate reconciliation total | -40.50% | -40.00% |
Permanent differences | 11.80% | 38.70% |
Changes of deferred tax assets | 0.20% | |
Net operating losses and other | 1.00% | |
Increase in valuation allowance | 28.70% | 0.10% |
Effective tax rate |
Income_Taxes_Details_2
Income Taxes (Details 2) (USD $) | Sep. 30, 2014 | Sep. 30, 2013 |
Current deferred tax assets (liabilities): | ||
Accrued expenses and other | ||
Total current deferred tax assets | ||
Non-current deferred tax assets and liabilities: | ||
State taxes | ||
Contributed services | -18,000 | -12,000 |
Stock options | -180,000 | |
Property, plant and equipment | -49,000 | |
Debt discounts | -166,000 | |
Net operating losses | 704,000 | 41,000 |
Total non-current deferred tax assets | 291,000 | 29,000 |
Valuation allowance | -291,000 | -29,000 |
Total non-current deferred tax assets | ||
Net deferred tax assets |
Income_Taxes_Details_Textual
Income Taxes (Details Textual) (USD $) | 6 Months Ended | 12 Months Ended |
Sep. 30, 2013 | Sep. 30, 2014 | |
Income Taxes (Textual) | ||
Valuation allowance, Deferred tax assets | $29,000 | $233,000 |
Net operating losses | 41,000 | 704,000 |
Operating Loss Carryforward Expiration Date | The net operating loss carry forwards, if not utilized, will begin to expire in 2033 for federal purposes and 2031 for state purposes | |
State tax liability | ||
Valuation allowance | $29,000 | $262,000 |
Stockholders_Deficit_Details
Stockholders' Deficit (Details) (USD $) | 12 Months Ended |
Sep. 30, 2014 | |
Warrant [Member] | |
STOCK OPTIONS/WARRANTS: | |
Options/ Warrants outstanding, Shares, Beginning balance | 8,400,000 |
Option/ Warrants Exercised | -3,131,970 |
Cancelled/forfeited/expired | -4,083,303 |
Options/ Warrants Outstanding, Shares, Ending Balance | 1,184,727 |
Option/ Warrents Weighted Average Exercise Price, Beginning balance | $28 |
Option/ Warrents Exercised, Weighted Average Exercise Price | $0.11 |
Option/ Warrents Cancelled/forfeited/expired, Weighted Average Exercise Price | $0.11 |
Option/ Warrents Weighted Average Exercise Price, Ending Balance | $0.11 |
Options/ Warrants outstanding, Weighted Average Remaining Contractual Term, Beginning | 2 years 7 months 6 days |
Options/ Warrants outstanding, Weighted Average Remaining Contractual Term, Ending | 1 year 7 months 6 days |
Option/ Warrents Outstanding, Aggregate Intrinsic Value, Beginning balance | |
Option/ Warrents Outstanding, Aggregate Intrinsic value, Balance | 7,217,234 |
Stock Options [Member] | |
STOCK OPTIONS/WARRANTS: | |
Options/ Warrants outstanding, Shares, Beginning balance | 125,000 |
Options/ Warrants granted | 1,025,000 |
Option/ Warrants Exercised | |
Cancelled/forfeited/expired | |
Options/ Warrants Outstanding, Shares, Ending Balance | 1,150,000 |
Options/ Warrants exercisable, Shares | 303,889 |
Option/ Warrents Weighted Average Exercise Price, Beginning balance | $13.20 |
Option/ Warrents Granted, Weighted Average Exercise Price | $1.67 |
Option/ Warrents Exercised, Weighted Average Exercise Price | |
Option/ Warrents Cancelled/forfeited/expired, Weighted Average Exercise Price | |
Option/ Warrents Weighted Average Exercise Price, Ending Balance | $2.92 |
Options/ Warrants exercisable, Weighted Average Exercise Price | $6.41 |
Options/ Warrants outstanding, Weighted Average Remaining Contractual Term, Beginning | 2 years 3 months 18 days |
Options/ Warrants outstanding, Weighted Average Remaining Contractual Term, Ending | 8 years 8 months 12 days |
Options/ Warrants exercisable, Weighted Average Remaining Contractual Term | 5 years 9 months 18 days |
Option/ Warrents Outstanding, Aggregate Intrinsic Value, Beginning balance | |
Option/ Warrents Outstanding, Aggregate Intrinsic value, Balance | 4,648,294 |
Options/ Warrants exercisable, Aggregate Intrinsic value | $811,877 |
Stockholders_Deficit_Details_T
Stockholders' Deficit (Details Textual) (USD $) | 0 Months Ended | 1 Months Ended | 3 Months Ended | 12 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | ||||||
Feb. 11, 2014 | Jan. 31, 2014 | Jul. 28, 2014 | Jun. 27, 2014 | Mar. 31, 2014 | Sep. 30, 2014 | Oct. 20, 2014 | Dec. 22, 2014 | Jul. 10, 2014 | Jun. 19, 2014 | Dec. 24, 2013 | Jun. 06, 2014 | Sep. 30, 2013 | Dec. 03, 2014 | Aug. 11, 2014 | |
Stockholders' Deficit (Textual) | |||||||||||||||
Contributed services rendered | $133,200 | ||||||||||||||
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 | |||||||||||||
Preferred stock, shares authorized | 100,000,000 | 100,000,000 | |||||||||||||
Convertible price, description | The conversion price of these 6% Notes is the average of the fifteen (15) lowest daily VWAPs occurring during the twenty (20) consecutive trading days immediately preceding the date each Holder elects convert all of their 6% Note minus a discount of 40%. | ||||||||||||||
Shares Authorized | 2,000,000 | ||||||||||||||
Share-based Compensation Expense | 5,000 | ||||||||||||||
Agreement to issue Convertible Promissory Note | 10.00% | ||||||||||||||
Principal amount | 476,333 | ||||||||||||||
Option exercise price | 2.14 | ||||||||||||||
Share based compensation arrangement by share based payment award accelerated vesting | 13,187 | ||||||||||||||
Interest expense in excess of fair market value of the stock issued | 44,239 | ||||||||||||||
Stock Options [Member] | |||||||||||||||
Stockholders' Deficit (Textual) | |||||||||||||||
Vesting rights, Description | The options vest 25% at grant and 25% each subsequent six (6) months from the date of grant. | ||||||||||||||
Options/ Warrants granted | 1,025,000 | ||||||||||||||
Option/ Warrents Granted, Weighted Average Exercise Price | $1.67 | ||||||||||||||
September 30, 2015 [Member] | Stock Options [Member] | |||||||||||||||
Stockholders' Deficit (Textual) | |||||||||||||||
Share-based Compensation Expense | 654,625 | ||||||||||||||
September 30, 2015 [Member] | Non Employeeb Stock Option [Member] | |||||||||||||||
Stockholders' Deficit (Textual) | |||||||||||||||
Share-based Compensation Expense | 247,375 | ||||||||||||||
September 30, 2016 [Member] | Stock Options [Member] | |||||||||||||||
Stockholders' Deficit (Textual) | |||||||||||||||
Share-based Compensation Expense | 326,812 | ||||||||||||||
September 30, 2016 [Member] | Non Employeeb Stock Option [Member] | |||||||||||||||
Stockholders' Deficit (Textual) | |||||||||||||||
Share-based Compensation Expense | 123,687 | ||||||||||||||
Subsequent Event [Member] | |||||||||||||||
Stockholders' Deficit (Textual) | |||||||||||||||
Vesting rights, Description | The options vest 25% at grant and 25% each subsequent six (6) months from the date of grant. | The options vest 25% at grant and 25% each subsequent six (6) months from the date of grant. | |||||||||||||
Options/ Warrants granted | 30,000 | 225,000 | |||||||||||||
Option/ Warrents Granted, Weighted Average Exercise Price | $0.83 | $0.70 | |||||||||||||
Options to purchase shares | 100,000 | 175,000 | |||||||||||||
Principal amount | 500,000 | ||||||||||||||
10% Convertible Note [Member] | |||||||||||||||
Stockholders' Deficit (Textual) | |||||||||||||||
Convertible price, description | On January 31, 2014, the Company entered into an agreement to issue a 10% convertible promissory note to a consultant as compensation for investor relations services for a period of up to one (1) year. The agreement was terminated after five (5) months. | ||||||||||||||
Principal amount | 100,000 | 41,667 | |||||||||||||
Accrued and unpaid interest | 345 | ||||||||||||||
Conversion price | $2 | $2 | |||||||||||||
Common stock issued on conversion | 21,006 | ||||||||||||||
Interest expense in excess of fair market value of the stock issued | 793 | ||||||||||||||
Series A Preferred Stock [Member] | |||||||||||||||
Stockholders' Deficit (Textual) | |||||||||||||||
Contributed services rendered | |||||||||||||||
Stock Issued During Period, Shares, Issued for Services | |||||||||||||||
Shares issued during period | 500,000 | ||||||||||||||
Preferred stock, shares authorized | 500,000 | ||||||||||||||
Preferred Stock [Member] | |||||||||||||||
Stockholders' Deficit (Textual) | |||||||||||||||
Shares issued during period | 500,000 | ||||||||||||||
Preferred stock, shares authorized | 100,000,000 | ||||||||||||||
Description of asset purchase agreement | Series A Shares are entitled to vote at a 15-1 ratio to Common Stock and are convertible on a maximum 10 for one basis into Common Stock | ||||||||||||||
Warberg WF I, LP | |||||||||||||||
Stockholders' Deficit (Textual) | |||||||||||||||
Shares issued during period | 3,542 | ||||||||||||||
Warrants issued | 19,250 | ||||||||||||||
Exercise price per share | $28 | ||||||||||||||
Chief Executive Officer [Member] | |||||||||||||||
Stockholders' Deficit (Textual) | |||||||||||||||
Options to purchase shares | 100,000 | ||||||||||||||
Chief Executive Officer [Member] | Subsequent Event [Member] | |||||||||||||||
Stockholders' Deficit (Textual) | |||||||||||||||
Options/ Warrants granted | 30,000 | 25,000 | |||||||||||||
Principal amount | 216,001 | ||||||||||||||
Board Of Directors And Shareholders [Member] | |||||||||||||||
Stockholders' Deficit (Textual) | |||||||||||||||
Reverse stock split, Description | On December 24, 2013, the Company's Board and a majority of its shareholders approved a one for forty (1:40) reverse stock split of the Company's common stock (the "Reverse Stock Split"). The Reverse Stock Split became effective on January 8, 2014. As a result of the Reverse Stock Split, all share information has been retroactively adjusted for all periods presented. All fractional shares created by the Reverse Stock Split were rounded to the nearest whole share. | ||||||||||||||
Vesting rights, Description | The options vest 25% at grant and 25% each subsequent six (6) months from the date of grant. | ||||||||||||||
Options/ Warrants granted | 1,000,000 | ||||||||||||||
Option/ Warrents Granted, Weighted Average Exercise Price | 1.66 | ||||||||||||||
Options to purchase shares | 520,000 | ||||||||||||||
Aggregate value of options | 1,000,000 | ||||||||||||||
Share-based Compensation Expense | 1,660,000 | ||||||||||||||
Compensation cost upon grant date | 415,000 | ||||||||||||||
Additional expenses | 22,312 | ||||||||||||||
Non employee options | 212,500 | ||||||||||||||
Consultant [Member] | |||||||||||||||
Stockholders' Deficit (Textual) | |||||||||||||||
Contributed services rendered | 41,600 | 29,600 | |||||||||||||
Stock Issued During Period, Shares, Issued for Services | 20,000 | ||||||||||||||
Convertible price, description | A one-time pro rata adjustment of up to ten-for-one (10-1) based upon the Company generating aggregate gross revenues over the two years of at least $8,000,000 (e.g. If the Company generates only $4,000,000 in aggregate gross revenues over the two year period then the convertible ratio will adjust to 5-1). In no event will the issuance convert into more than 5,000,000 shares of common stock of the Company. | ||||||||||||||
Vesting rights, Description | Per the terms of the agreement, 10,000 shares vest immediately, 5,000 shares vest after ninety (90) days, and 5,000 shares vest after one hundred days. | ||||||||||||||
Options/ Warrants granted | 25,000 | ||||||||||||||
Compensation cost upon grant date | 52,750 | ||||||||||||||
Fair value of the stock vested | 31,200 | ||||||||||||||
Share based compensation arrangement by share based payment award accelerated vesting | 2,963 | ||||||||||||||
Joe Andreae [Member] | |||||||||||||||
Stockholders' Deficit (Textual) | |||||||||||||||
Options to purchase shares | 190,000 | ||||||||||||||
Joe Andreae [Member] | Subsequent Event [Member] | |||||||||||||||
Stockholders' Deficit (Textual) | |||||||||||||||
Options/ Warrants granted | 30,000 | ||||||||||||||
Principal amount | $12,828 |
Intellectual_Property_Details
Intellectual Property (Details) (USD $) | Sep. 30, 2014 | Sep. 30, 2013 |
Intellectual Property (Textual) | ||
Finite-lived trademarks, gross | $119,575 | |
Finite-Lived Patents, Gross | 14,890 | |
Trademarks [Member] | ||
Intellectual Property (Textual) | ||
Finite-lived trademarks, gross | 116,000 | |
Trademarks and Trade Names [Member] | ||
Intellectual Property (Textual) | ||
Finite-lived trademarks, gross | $3,575 |
Subsequent_Event_Details
Subsequent Event (Details) (USD $) | 1 Months Ended | 0 Months Ended | 1 Months Ended | 12 Months Ended | 0 Months Ended | |||
Jun. 27, 2014 | Oct. 20, 2014 | Dec. 22, 2014 | Sep. 30, 2014 | Dec. 03, 2014 | Dec. 04, 2014 | Dec. 03, 2014 | Aug. 11, 2014 | |
Subsequent Events (Textual) | ||||||||
Principal amount | $476,333 | |||||||
Joe Andreae [Member] | ||||||||
Subsequent Events (Textual) | ||||||||
Options to purchase shares | 190,000 | |||||||
Kyle Tracey [Member] | ||||||||
Subsequent Events (Textual) | ||||||||
Options to purchase shares | 100,000 | |||||||
Subsequent Event [Member] | ||||||||
Subsequent Events (Textual) | ||||||||
Conversion description | The Note bears interest at the rate of 10% per annum and is convertible into common stock of the Company at a conversion price per share of 70% of the average of the three (3) lowest Closing Sale Prices in the ten (10) Trading Days immediately preceding the applicable Conversion (subject to adjustment in the event of stock splits, stock dividends, and similar transactions, and in the event of subsequent sales of common stock at a lower purchase price (subject to certain exceptions))(the “Conversion Price”). In no event will the Conversion Price be less than $0.50 per share. Repayment of principal on the Note, together with accrued interest thereon, is due in twelve monthly installments, commencing six months from issuance. The Company may make such payments in cash (in which event the Company will pay a 25% premium) or, subject to certain conditions, in shares of common stock valued at the lower of the Conversion Price or 70% of the average of the three (3) lowest Closing Sale Prices in the ten (10) Trading Days immediately preceding the applicable payment date. | |||||||
Principal amount | 500,000 | |||||||
Additionally granted stock options | 30,000 | 225,000 | ||||||
Option Granted, Weighted Average Exercise Price | $0.83 | $0.70 | ||||||
Bonuses | 11,000 | |||||||
Finder's fee | 25,000 | |||||||
Options to purchase shares | 100,000 | 175,000 | ||||||
Vesting rights, Description | The options vest 25% at grant and 25% each subsequent six (6) months from the date of grant. | The options vest 25% at grant and 25% each subsequent six (6) months from the date of grant. | ||||||
Subsequent Event [Member] | Securities Investment [Member] | ||||||||
Subsequent Events (Textual) | ||||||||
Principal amount | 560,000 | |||||||
Original issue discount | 50,000 | |||||||
Transaction expenses | 10,000 | |||||||
Subsequent Event [Member] | Under 2014 Stock Option Plan [Member] | ||||||||
Subsequent Events (Textual) | ||||||||
Additionally granted stock options | 20,000 | |||||||
Option Granted, Weighted Average Exercise Price | $0.83 | |||||||
Vesting rights, Description | The options vest 25% at grant and 25% each subsequent six (6) months from the date of grant. | |||||||
Subsequent Event [Member] | Michael Cook [Member] | ||||||||
Subsequent Events (Textual) | ||||||||
Principal amount | 15,115 | |||||||
Bonuses | 3,500 | |||||||
Subsequent Event [Member] | Joe Andreae [Member] | ||||||||
Subsequent Events (Textual) | ||||||||
Principal amount | 12,828 | |||||||
Additionally granted stock options | 30,000 | |||||||
Subsequent Event [Member] | Kyle Tracey [Member] | ||||||||
Subsequent Events (Textual) | ||||||||
Principal amount | 216,001 | |||||||
Additionally granted stock options | 30,000 | 25,000 | ||||||
Bonuses | 3,000 | |||||||
Subsequent Event [Member] | Joseph Andreae [Member] | ||||||||
Subsequent Events (Textual) | ||||||||
Bonuses | 3,000 | |||||||
Salaries | 75,000 | |||||||
Subsequent Event [Member] | Allen Viemes [Member] | ||||||||
Subsequent Events (Textual) | ||||||||
Bonuses | 5,000 | |||||||
Salaries | $60,000 | |||||||
Subsequent Event [Member] | Convertible Note [Member] | ||||||||
Subsequent Events (Textual) | ||||||||
Additionally granted stock options | 775,000 |
Uncategorized_Items
Uncategorized Items | ||||||||||
[us-gaap_SharesOutstanding] | 9,644,935 | 500,000 | ||||||||
[us-gaap_StockholdersEquity] | 21,560,222 | 96 | -31,481,188 |