Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Sep. 30, 2015 | Jan. 12, 2016 | Mar. 31, 2015 | |
Document And Entity Information | |||
Entity Registrant Name | DigiPath,Inc. | ||
Entity Central Index Key | 1,502,966 | ||
Document Type | 10-K | ||
Document Period End Date | Sep. 30, 2015 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --09-30 | ||
Entity a Well-known Seasoned Issuer | No | ||
Entity a Voluntary Filer | No | ||
Entity's Reporting Status Current | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 5,755,922 | ||
Entity Common Stock, Shares Outstanding | 15,129,372 | ||
Trading Symbol | DIGP | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,015 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Sep. 30, 2015 | Sep. 30, 2014 |
Current assets: | ||
Cash | $ 481,095 | $ 5,102,620 |
Accounts receivable | 6,146 | 123,045 |
Inventory | 192,561 | 285,255 |
Prepaid expenses | 60,447 | 81,770 |
Deposits | 44,949 | 36,035 |
Total current assets | 785,198 | 5,628,725 |
Fixed assets, net | 1,373,691 | $ 20,735 |
Available-for-sale securities | $ 14,000 | |
Intangible assets | $ 28,336 | |
Total Assets | $ 2,172,889 | 5,677,796 |
Current liabilities: | ||
Accounts payable | 62,383 | 125,854 |
Accrued expenses | 21,671 | 25,910 |
Deferred revenues | 73,121 | 39,133 |
Total current liabilities | 157,175 | 190,897 |
Total Liabilities | 157,175 | 190,897 |
Stockholders' Equity: | ||
Series A convertible preferred stock, $0.001 par value, 10,000,000 shares authorized; 4,351,442 and 5,850,000 shares issued and outstanding at September 30, 2015 and 2014, respectively | 4,351 | 5,850 |
Common stock, $0.001 par value, 90,000,000 shares authorized; 13,762,705 and 5,875,640 shares issued and outstanding at September 30, 2015 and 2014, respectively | 13,763 | 5,876 |
Additional paid-in capital | 10,224,551 | $ 9,333,795 |
Accumulated other comprehensive loss | (36,000) | |
Accumulated (deficit) | (7,847,418) | $ (3,515,089) |
Total digipath, Inc. Stockholders' Equity | 2,359,247 | 5,830,432 |
Noncontrolling interest | (343,533) | (343,533) |
Total Stockholders' Equity | 2,015,714 | 5,486,899 |
Total Liabilities and Stockholders' Equity | $ 2,172,889 | $ 5,677,796 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2015 | May. 27, 2015 | Sep. 30, 2014 |
Statement of Financial Position [Abstract] | |||
Series A convertible preferred stock, par value | $ 0.001 | $ 0.001 | |
Series A convertible preferred stock, shares authorized | 10,000,000 | 10,000,000 | |
Series A convertible preferred stock, shares issued | 4,351,442 | 5,850,000 | |
Series A convertible preferred stock, shares outstanding | 4,351,442 | 5,850,000 | |
Common stock, par value | $ 0.001 | $ 0.001 | |
Common stock, shares authorized | 90,000,000 | 900,000,000 | 90,000,000 |
Common stock, shares issued | 13,762,705 | 5,875,640 | |
Common stock, shares outstanding | 13,762,705 | 5,875,640 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) | 12 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Income Statement [Abstract] | ||
Revenues | $ 16,084 | $ 54,941 |
Cost of sales | 85,551 | 29,272 |
Gross profit (loss) | (69,467) | 25,669 |
Operating expenses: | ||
General and administrative | 3,228,221 | 2,338,651 |
Research and development | 143,766 | 23,125 |
Total operating expenses | 3,371,987 | 2,361,776 |
Net operating loss | (3,441,454) | $ (2,336,107) |
Other income (expense): | ||
Other income | $ 36,000 | |
Interest expense | $ (11,636) | |
Loss on disposal of fixed assets | $ (8,303) | |
Loss on impairment of intangible asset | (300,000) | |
Total other income (expense) | (272,303) | $ (11,636) |
Net loss from continuing operations | (3,713,757) | (2,347,743) |
Loss from operations of discontinued business component | (618,572) | (484,459) |
Net loss | $ (4,332,329) | $ (2,832,202) |
Weighted average number of common shares outstanding - basic and fully diluted | $ 9,906,468 | $ 2,447,106 |
Net (loss) per share - basic and fully diluted | (0.37) | (0.96) |
Net loss attributable to DigiPath, Inc. from continuing operations | $ (4,332,329) | $ (2,832,202) |
Available-for-sale investments: | ||
Change in net unrealized loss (net of tax effect) | (36,000) | |
Comprehensive loss | $ (4,368,329) | $ (2,832,202) |
Consolidated Statement of Stock
Consolidated Statement of Stockholders' Equity - USD ($) | Series A Convertible Preferred Stock [Member] | Common Stock [Member] | Additional Paid-In Capital [Member] | Non-Controlling Interest [Member] | Accumulated Other Comprehensive Loss [Member] | Accumulated (Deficit) [Member] | Total |
Balance at Sep. 30, 2013 | $ 554 | $ 135,411 | $ (682,887) | $ (546,922) | |||
Balance, shares at Sep. 30, 2013 | 553,640 | ||||||
Common stock issued for services | $ 151 | 29,849 | $ 30,000 | ||||
Common stock issued for services, shares | 151,000 | 25,000 | |||||
Options exercised for cash | $ 1 | 3,299 | $ 3,300 | ||||
Options exercised for cash, shares | 1,000 | (1,000) | |||||
Common stock issued for cash | $ 4,420 | 2,205,580 | $ 2,210,000 | ||||
Common stock issued for cash, shares | 4,420,000 | ||||||
Common stock options issued for services | 10,377 | 10,377 | |||||
Common stock options issued for services, shares | |||||||
Preferred stock issued for cash | $ 6,000 | 5,994,000 | 6,000,000 | ||||
Preferred stock issued for cash, shares | 6,000,000 | ||||||
Vesting of previously issued common stock | 268,813 | 268,813 | |||||
Warrants in subsidiary issued for services | 343,533 | $ 343,533 | |||||
Non-controlling interest in subsidiary | 343,533 | $ (343,533) | |||||
Conversion of preferred shares to common | $ (150) | $ 750 | $ (600) | ||||
Conversion of preferred shares to common, shares | (150,000) | 750,000 | |||||
Net loss for the year ended | $ (2,832,202) | $ (2,832,202) | |||||
Balance at Sep. 30, 2014 | $ 5,850 | $ 5,876 | $ 9,333,795 | $ (343,533) | $ (3,515,089) | 5,486,899 | |
Balance, shares at Sep. 30, 2014 | 5,850,000 | 5,875,640 | |||||
Common stock issued for services | $ 237 | 223,775 | 224,012 | ||||
Common stock issued for services, shares | 237,545 | ||||||
Options exercised for cash | $ 3 | 9,503 | $ 9,506 | ||||
Options exercised for cash, shares | 2,881 | ||||||
Common stock options issued for services | 663,626 | $ 663,626 | |||||
Conversion of preferred shares to common | $ (1,499) | $ 7,722 | (6,223) | ||||
Conversion of preferred shares to common, shares | (1,498,558) | 7,721,639 | |||||
Cancellation of common stock | $ (75) | $ 75 | |||||
Cancellation of common stock, shares | (75,000) | ||||||
Unrealized loss on available-for-sale securities | $ (36,000) | $ (36,000) | |||||
Net loss for the year ended | $ (4,332,329) | (4,332,329) | |||||
Balance at Sep. 30, 2015 | $ 4,351 | $ 13,763 | $ 10,224,551 | $ (343,533) | $ (36,000) | $ (7,847,418) | $ 2,015,714 |
Balance, shares at Sep. 30, 2015 | 4,351,442 | 13,762,705 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Cash flows from operating activities | ||
Net loss | $ (4,332,329) | $ (2,832,202) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Bad debts expense | 42,514 | |
Depreciation and amortization expense | 83,725 | $ 4,586 |
Stock issued for services | 224,012 | 298,813 |
Options and warrants granted for services | 663,626 | $ 353,911 |
Loss on disposal of fixed assets | 8,303 | |
Loss on impairment of development costs | 28,336 | $ 1,003,416 |
Loss on impairment of intangible asset | 300,000 | |
Decrease (increase) in assets: | ||
Accounts receivable | 74,385 | $ (79,449) |
Inventory | 92,694 | (126,292) |
Prepaid expenses | 21,323 | (66,070) |
Deposits | (8,914) | (36,035) |
Increase (decrease) in liabilities: | ||
Accounts payable | (63,471) | $ 95,967 |
Accrued expenses | $ (4,239) | |
Due to related party | $ (123,811) | |
Deferred revenues | $ 33,988 | (189,815) |
Net cash used in operating activities | $ (2,836,047) | (1,696,981) |
Cash flows from investing activities | ||
Purchase of development costs | (1,003,416) | |
Purchase of fixed assets | $ (1,444,984) | (28,336) |
Purchase of intangible assets | (300,000) | $ (23,607) |
Purchase of available-for-sale securities | (50,000) | |
Net cash used in investing activities | $ (1,794,984) | $ (1,055,359) |
Cash flows from financing activities | ||
Proceeds from revolving note due to related party | 105,000 | |
Repayment of revolving note due to related party | (98,703) | |
Proceeds from exercised options | $ 9,506 | 3,300 |
Proceeds from sale of preferred stock | 5,600,000 | |
Proceeds from sale of common stock | 2,210,000 | |
Net cash provided by financing activities | $ 9,506 | 7,819,597 |
Net increase (decrease) in cash | (4,621,525) | 5,067,257 |
Cash - beginning | 5,102,620 | 35,363 |
Cash - ending | $ 481,095 | 5,102,620 |
Supplemental disclosures: | ||
Interest paid | $ 218 | |
Income taxes paid | ||
Non-cash investing and financing activities: | ||
Note payable exchanged for preferred stock | $ 400,000 | |
Value of preferred stock converted to common stock | $ 1,498,558 |
Nature of Business and Signific
Nature of Business and Significant Accounting Policies | 12 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Nature of Business and Significant Accounting Policies | Note 1 Nature of Business and Significant Accounting Policies Nature of Business DigiPath, Inc. was incorporated in Nevada on October 5, 2010. DigiPath, Inc. and its subsidiaries (DigiPath, the Company, we, our or us) supports the cannabis industrys best practices for reliable testing, cannabis education and training, and brings unbiased cannabis news coverage to the cannabis industry. Our three business units as of September 30, 2015, which were all wholly-owned subsidiaries of DigiPath, Inc. as of such date, are described below. Ø DigiPath Labs, Inc Ø The National Marijuana News Corp Ø DigiPath Corp Stock Split All share and per share amounts herein have been given retroactive effect to the 1-for-10 reverse stock split of the Companys common stock effected May 27, 2015 (See Note 12). Basis of Accounting The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (SEC). Intercompany accounts and transactions have been eliminated. All references to Generally Accepted Accounting Principles (GAAP) are in accordance with The FASB Accounting Standards Codification (ASC) and the Hierarchy of Generally Accepted Accounting Principles. Principles of Consolidation The accompanying consolidated financial statements include the accounts of the following entities, all of which were under common control and ownership at September 30, 2015: State of Abbreviated Name of Entity (1) Incorporation Relationship Reference DigiPath, Inc. (2) Nevada Parent DIGP DigiPath Labs, Inc. Nevada Subsidiary LABS TNM News, Inc. Nevada Subsidiary TNM GroSciences, Inc. (3) Colorado Subsidiary GRO DigiPath Corp. (4)(5) Nevada Subsidiary CORP (1) (2) (3) (4) (5) The consolidated financial statements herein contain the operations of the wholly-owned subsidiaries listed above. All significant inter-company transactions have been eliminated in the preparation of these financial statements. The parent company and subsidiaries will be collectively referred to herein as the Company, DigiPath or DIGP. The Company's headquarters are located in Las Vegas, Nevada and substantially all of its customers are within the United States. These statements reflect all adjustments, consisting of normal recurring adjustments, which in the opinion of management are necessary for fair presentation of the information contained therein. Reclassifications Certain prior year amounts have been reclassified to conform to the current period presentation. These reclassifications had no impact on net earnings, financial position or cash flows. Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that may 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 these estimates. Segment Reporting ASC Topic 280, Segment Reporting, requires use of the management approach model for segment reporting. The management approach model is based on the way a companys management organizes segments within the company for making operating decisions and assessing performance. The Company determined it has two reportable segments. Fair Value of Financial Instruments The Company adopted ASC 820, Fair Value Measurements and Disclosures (ASC 820). ASC 820 defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The three levels are defined as follows: - Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. - Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. - Level 3 inputs to valuation methodology are unobservable and significant to the fair measurement. The carrying value of cash, accounts receivable, accounts payables and accrued expenses are estimated by management to approximate fair value primarily due to the short term nature of the instruments. Cash and Cash Equivalents Cash and cash equivalents includes all highly liquid instruments with an original maturity of three months or less. The Company had no cash equivalents as of September 30, 2015 and 2014. Cash in Excess of FDIC Insured Limits The Company maintains its cash in bank deposit accounts which, at times, may exceed federally insured limits. Accounts are guaranteed by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 under current regulations. The Company had approximately $85,008 and $3,514,125 in excess of FDIC insured limits at September 30, 2015 and 2014, respectively. The Company has not experienced any losses in such accounts. Accounts Receivable Accounts receivable are carried at their estimated collectible amounts. Trade accounts receivable are periodically evaluated for collectability based on past credit history with customers and their current financial condition. The Company had an allowance for doubtful accounts of $36,715 and $-0- as of September 30, 2015 and 2014, respectively. Inventory Inventory is valued at the lower of cost or market. Cost is determined on a first-in, first-out method. Inventory consists of digital slide scanners and slide scanner parts. Fixed Assets Fixed assets are stated at the lower of cost or estimated net recoverable amount. The cost of property, plant and equipment is depreciated using the straight-line method based on the lesser of the estimated useful lives of the assets or the lease term based on the following life expectancy: Software 2-3 years Office equipment 5 years Furniture and fixtures 5 years Lab equipment 7 years Leasehold improvements 6 years Repairs and maintenance expenditures are charged to operations as incurred. Major improvements and replacements, which have extend the useful life of an asset, are capitalized and depreciated over the remaining estimated useful life of the asset. When assets are retired or sold, the cost and related accumulated depreciation and amortization are eliminated and any resulting gain or loss is reflected in operations. Impairment of Long-Lived Assets Long-lived assets held and used by the Company are reviewed for possible impairment whenever events or circumstances indicate the carrying amount of an asset may not be recoverable or is impaired. Recoverability is assessed using undiscounted cash flows based upon historical results and current projections of earnings before interest and taxes. Impairment is measured using discounted cash flows of future operating results based upon a rate that corresponds to the cost of capital. Impairments are recognized in operating results to the extent that carrying value exceeds discounted cash flows of future operations. The Company recognized impairment losses on the disposal of fixed assets of $8,303 and $-0- during the years ended September 30, 2015 and 2014, respectively. Our intellectual property is comprised of indefinite-lived brand name acquired and have been assigned an indefinite life as we currently anticipate that these brand names will contribute cash flows to the Company perpetually. We evaluate the recoverability of intangible assets periodically by taking into account events or circumstances that may warrant revised estimates of useful lives or that indicate the asset may be impaired. The Company recognized an impairment loss on the carrying value of development costs of $28,336 and $1,003,416 for the years ended September 30, 2015 and 2014, respectively. Management believes these developed products will continue to be utilized by the Company to generate revenues; however, since the Company does not have historical operating experience, these amounts were written off. In addition, the Company recognized an impairment loss on the carrying value of its investment in TissueBLOX TM Marketable Securities The Company classifies its debt and marketable equity securities into held-to-maturity, trading, or available-for-sale categories. Debt securities are classified as held-to-maturity when the Company has the positive intent and ability to hold the securities to maturity. Debt securities for which the Company does not have the intent or ability to hold to maturity are classified as available for sale. Held-to-maturity securities are recorded as either short-term or long-term on the balance sheet based on contractual maturity date and are stated at amortized cost. Marketable securities that are bought and held principally for the purpose of selling them in the near term are classified as trading securities and are reported at fair value, with unrealized gains and losses recognized in earnings. Debt and marketable equity securities not classified as held-to-maturity or as trading are classified as available-for-sale and are carried at fair market value, with the unrealized gains and losses, net of tax, included in the determination of comprehensive income and reported in shareholders equity. Revenue Recognition The Company recognizes revenue in accordance with ASC 605, Revenue Recognition. ASC 605 requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery of product has met the criteria established in the arrangement or services rendered; (3) the fee is fixed and determinable; and (4) collectability is reasonably assured. This occurs when the products or services are completed in accordance with the contracts we have with clients. In connection with our products and services arrangements, when we are paid in advance, these amounts are classified as deferred revenue and amortized over the term of the agreement. With respect to our cannabis lab testing revenues, we sell our services on a determinable fixed fee per test, or panel of tests basis, and offer a discounted price for customers that agree to enter into exclusive, long term contracts. We require payment prior to the delivery of results, as such, revenues are typically recognized upon the delivery of results upon completion of the tests. Advertising Costs The Company expenses the cost of advertising and promotions as incurred. Advertising and promotions expense was $145,293 and $103,219 for the years ended September 30, 2015 and 2014, respectively. Basic and Diluted Loss Per Share The basic net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding. Diluted net loss per common share is computed by dividing the net loss adjusted on an as if converted basis, by the weighted average number of common shares outstanding plus potential dilutive securities. For the years ended September 30, 2015 and 2014, potential dilutive securities had an anti-dilutive effect and were not included in the calculation of diluted net loss per common share. Stock-Based Compensation The Company accounts for equity instruments issued to employees in accordance with the provisions of ASC 718 Stock Compensation (ASC 718) and Equity-Based Payments to Non-employees pursuant to ASC 505-50 (ASC 505-50). All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. The measurement date of the fair value of the equity instrument issued is the earlier of the date on which the counterpartys performance is complete or the date at which a commitment for performance by the counterparty to earn the equity instruments is reached because of sufficiently large disincentives for nonperformance. Income Taxes The Company recognizes deferred tax assets and liabilities based on differences between the financial reporting and tax basis of assets and liabilities using the enacted tax rates and laws that are expected to be in effect when the differences are expected to be recovered. The Company provides a valuation allowance for deferred tax assets for which it does not consider realization of such assets to be more likely than not. Uncertain Tax Positions In accordance with ASC 740, Income Taxes (ASC 740), the Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be capable of withstanding examination by the taxing authorities based on the technical merits of the position. These standards prescribe a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. These standards also provide guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. Various taxing authorities periodically audit the Companys income tax returns. These audits include questions regarding the Companys tax filing positions, including the timing and amount of deductions and the allocation of income to various tax jurisdictions. In evaluating the exposures connected with these various tax filing positions, including state and local taxes, the Company records allowances for probable exposures. A number of years may elapse before a particular matter, for which an allowance has been established, is audited and fully resolved. The Company has not yet undergone an examination by any taxing authorities. The assessment of the Companys tax position relies on the judgment of management to estimate the exposures associated with the Companys various filing positions. Various taxing authorities periodically audit the Companys income tax returns. These audits include questions regarding the Companys tax filing positions, including the timing and amount of deductions and the allocation of income to various tax jurisdictions. In evaluating the exposures connected with these various tax filing positions, including state and local taxes, the Company records allowances for probable exposures. A number of years may elapse before a particular matter, for which an allowance has been established, is audited and fully resolved. The Company has not yet undergone an examination by any taxing authorities. Recent Accounting Pronouncements In September, 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2015-16, Business Combinations (Topic 805) In August, 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date In April 2015, the FASB issued ASU No. 2015-03, InterestImputation of Interest (Subtopic 835-30) In August, 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40) In June 2014, the FASB issued ASU No. 2014-12, Compensation Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period In May 2014, the FASB issued ASU No. 2014-09 Revenue from Contracts with Customers There are no other recently issued accounting pronouncements that the Company has yet to adopt that are expected to have a material effect on its financial position, results of operations, or cash flows. |
Going Concern
Going Concern | 12 Months Ended |
Sep. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern | Note 2 Going Concern As shown in the accompanying consolidated financial statements, the Company has incurred recurring losses from operations resulting in an accumulated deficit of ($7,847,418), and as of September 30, 2015, the Companys cash on hand may not be sufficient to sustain operations. These factors raise substantial doubt about the Companys ability to continue as a going concern. Management is actively pursuing new customers to increase revenues. In addition, the Company is currently seeking additional sources of capital to fund short term operations. Management believes these factors will contribute toward achieving profitability. The accompanying consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of any uncertainty as to the Companys ability to continue as a going concern. These financial statements also do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern. |
Discontinued Business Component
Discontinued Business Component | 12 Months Ended |
Sep. 30, 2015 | |
Discontinued Business Component | |
Discontinued Business Component | Note 3 Discontinued Business Component The digital pathology business operating under the subsidiary DigiPath Corp. has been accounted for as a discontinued business component. The results of operations of this business have been removed from the results of continuing operations for all periods presented within our statements of operations. In October of 2015, DigiPath, Inc., divested approximately two-thirds of its ownership of DigiPath Corp. to warrant holders of DigiPath Corp. through the sale of common stock and the exercise of warrants, including warrants held by Steven D. Barbee, our former Director. Subsequent to the year ended September 30, 2015, our interest in DigiPath Corp. will be accounted for pursuant to the equity method of accounting due to our lack of control and reduced ownership percentage of approximately 33.3%. DigiPath Corp. continues to operate. However the change in accounting method for DigiPath, Inc. necessitates the deconsolidation of DigiPath Corp. be retrospectively presented as a discontinued business component. The operating results of the Digital Pathology business, which have been extracted and presented as Loss from operations of discontinued business component within the statements of operations, are summarized below: For the Years Ended September 30, 2015 2014 Revenues $ 395,718 $ 430,929 Cost of sales 360,652 268,257 Gross profit 35,066 162,672 Expenses: General and administrative 433,569 647,131 Research and development 220,432 - Total operating expenses 654,001 647,131 Net operating loss, net of tax (618,935 ) (484,459 ) Other income 363 - Net loss, net of tax $ (618,572 ) $ (484,459 ) |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Sep. 30, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 4 Related Party Transactions Options Issued to CFO for Services On June 19, 2015, the Company granted 100,000 common stock options as compensation for services to our new Chief Financial Officer. The options vest ratably in quarterly increments over one (1) year beginning September 19, 2015. The options are exercisable until June 19, 2025 at an exercise price of $0.33 per share. The estimated fair value using the Black-Scholes Pricing Model, based on a volatility rate of 237% and a call option value of $0.3274, was $32,744. The options are being expensed over the vesting period. The Company recognized $8,186 of stock based compensation expense during the year ended September 30, 2015. Stock Issued for Debt with Eric Stoppenhagen On April 9, 2014, pursuant to a series A convertible preferred stock purchase agreement (the Series A SPA), Mr. Stoppenhagen, who was then an affiliate of the Company, purchased 71,864 shares of the Issuers Series A Preferred Stock by way of a note payable for expenses converted on January 15, 2014 and 27,788 shares of the Issuers Series A Preferred Stock by way of a note payable for accounts payable converted on January 15, 2014 for an aggregate of 99,652 shares of the Issuers Series A Preferred Stock held by Mr. Stoppenhagen as a trustee of the Eric Paul Stoppenhagen Trust, dated September 30, 2013. On April 9, 2014, pursuant to a series A convertible preferred stock purchase agreement (the Verdad Series A SPA), Verdad Telecom, Inc. purchased 253,649 shares of the Issuers Series A Preferred Stock by way of a secured note payable and 46,699 shares of the Issuers Series A Preferred Stock by way of interest on a secured note payable through December 31, 2014 for an aggregate of 300,348 shares of the Issuers Series A Preferred Stock held by Verdad Telecom, Inc., of which Mr. Stoppenhagen owns 100% of the issued and outstanding stock. This note payable was satisfied in full by this exchange of company Series A Preferred Stock. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Sep. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Note 5 Fair Value of Financial Instruments Under FASB ASC 820-10-5, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). The standard outlines a valuation framework and creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures. Under GAAP, certain assets and liabilities must be measured at fair value, and FASB ASC 820-10-50 details the disclosures that are required for items measured at fair value. The Company has certain financial instruments that must be measured under the new fair value standard. The Companys financial assets and liabilities are measured using inputs from the three levels of the fair value hierarchy. The three levels are as follows: Level 1 - Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Level 2 - Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs). Level 3 - Unobservable inputs that reflect our assumptions about the assumptions that market participants would use in pricing the asset or liability. The following schedule summarizes the valuation of financial instruments at fair value on a recurring basis in the balance sheets as of September 30, 2015 and 2014, respectively: Fair Value Measurements at September 30, 2015 Level 1 Level 2 Level 3 Assets Cash $ 481,095 $ - $ - Available-for-sale securities 14,000 - - Total assets 495,095 - - Liabilities None - - - Total liabilities - - - $ 495,095 $ - $ - Fair Value Measurements at September 30, 2014 Level 1 Level 2 Level 3 Assets Cash $ 5,102,620 $ - $ - Intellectual properties - - 28,336 Total assets 5,102,620 - 28,336 Liabilities None - - - Total liabilities - - - $ 5,102,620 $ - $ 28,336 The fair value of our intellectual properties are deemed to approximate book value, and are considered Level 3 inputs as defined by ASC Topic 820-10-35. There were no transfers of financial assets or liabilities between Level 1, Level 2 and Level 3 inputs for the years ended September 30, 2015 or 2014. We recognized total impairment losses of $328,336 and $1,003,416 on our intellectual properties during the years ended September 30, 2015 and 2014, respectively. |
Accounts Receivable
Accounts Receivable | 12 Months Ended |
Sep. 30, 2015 | |
Receivables [Abstract] | |
Accounts Receivable | Note 6 Accounts Receivable Accounts receivable was $6,146 and $123,045 at September 30, 2015 and 2014, respectively, net of allowance for uncollectible accounts of $36,715 and $-0- at September 30, 2015 and 2014, respectively. |
Inventory
Inventory | 12 Months Ended |
Sep. 30, 2015 | |
Inventory Disclosure [Abstract] | |
Inventory | Note 7 Inventory Inventory was $192,561 and $285,255 at September 30, 2015 and 2014, respectively. There is no allowance for inventory obsolescence. A total of $73,179 and $51,553 was written off due to obsolescence and included in the loss from operations of discontinued business component within the consolidated statements of operations during the years ended September 30, 2015 and 2014, respectively. |
Fixed Assets
Fixed Assets | 12 Months Ended |
Sep. 30, 2015 | |
Property, Plant and Equipment [Abstract] | |
Fixed Assets | Note 8 Fixed Assets Fixed assets consist of the following at September 30, 2015 and 2014: For the Years Ended September 30, 2015 2014 Software $ 131,636 $ 10,019 Office equipment 35,467 - Furniture and fixtures 14,607 13,359 Lab equipment 835,006 35,420 Leasehold improvements 487,066 13,589 1,503,782 72,387 Less: accumulated depreciation (130,091 ) (51,652 ) Total $ 1,373,691 $ 20,735 During the year ended September 30, 2015, we realized a loss on the disposal of leasehold improvements in the amount of $8,303 when we terminated a lease whereby we had capitalized improvements with a historical cost basis of $13,586 and a net carrying value of $8,303 upon disposal. Depreciation and amortization expense totaled $83,725 and $4,586 for the years ended September 30, 2015 and 2014, respectively. |
Available-for-Sale Securities
Available-for-Sale Securities | 12 Months Ended |
Sep. 30, 2015 | |
Schedule of Investments [Abstract] | |
Available-for-Sale Securities | Note 9 Available-for-Sale Securities Available-for-sale securities consist of the following at September 30, 2015: Gains in Losses in Accumulated Accumulated Other Other Estimated Amortized Comprehensive Comprehensive Fair Cost Income Income Value Common stock $ 50,000 - $ (36,000 ) $ 14,000 Total available-for-sale securities $ 50,000 - $ (36,000 ) $ 14,000 Common stock consisted of a purchase of 400,000 shares of common stock acquired in March of 2015, in the amount of $50,000 in Blue Line Protection Group, Inc., a Nevada corporation. The Company had no investments in securities during the year ended September 30, 2014. |
Intangible Assets
Intangible Assets | 12 Months Ended |
Sep. 30, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Note 10 Intangible Assets For the years ended September 30, 2015 and 2014, the Company determined that the carrying value of its intangible assets were impaired. As a result, we recognized losses on impairment of $328,336 and $1,003,416 during the years ended September 30, 2015 and 2014, respectively. The Company recognized an impairment loss on the carrying value of development costs of $28,336 and $1,003,416 for the years ended September 30, 2015 and 2014, respectively. Management believes these developed products will continue to be utilized by the Company to generate revenues; however, since the Company does not have historical operating experience, these amounts were written off. In addition, the Company recognized an impairment loss on the carrying value of its investment in TissueBLOX TM |
Deferred Revenues
Deferred Revenues | 12 Months Ended |
Sep. 30, 2015 | |
Deferred Revenue Disclosure [Abstract] | |
Deferred Revenues | Note 11 Deferred Revenues Deferred revenues consist of the following at September 30, 2015 and 2014, respectively. For the Years Ended September 30, 2015 2014 Unearned advertising revenue $ 4,167 $ - Unearned software support 68,954 39,133 Total $ 73,121 $ 39,133 |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Sep. 30, 2015 | |
Equity [Abstract] | |
Stockholders' Equity | Note 12 Stockholders Equity Reverse Stock Split On May 27, 2015, the Company effected a 1-for-10 reverse stock split (the Reverse Stock Split). No fractional shares were issued, and no cash or other consideration was paid in connection with the Reverse Stock Split. Instead, the Company issued one whole share of the post-Reverse Stock Split common stock to any stockholder who otherwise would have received a fractional share as a result of the Reverse Stock Split. The Company was authorized to issue 900,000,000 shares of common stock prior to the Reverse Stock Split. As a result of the Reverse Stock Split, the Companys authorized shares decreased ratably to 90,000,000 shares of common stock. The Reverse Stock Split did not have any effect on the stated par value of the common stock, or the Companys authorized preferred stock. Unless otherwise stated, all share and per share information in this Annual Report on Form 10-K has been retroactively adjusted to reflect the Reverse Stock Split. Preferred Stock The Company is authorized to issue 10,000,000 shares of preferred stock with a par value of $0.001 per share, of which 6,000,000 have been designated as Series A Convertible Preferred Stock (Series A Preferred). As of September 30, 2015, there are 4,351,442 shares of Series A Preferred issued and outstanding. The Board of Directors is authorized to determine any number of series into which shares of preferred stock may be divided and to determine the rights, preferences, privileges and restrictions granted to any series of the preferred stock. Effective as of April 4, 2014, the designations, rights and preferences of the preferred shares changed to blank check preferred. On April 9, 2014, the Company entered into Securities Purchase Agreements with accredited investors pursuant to which the Company issued an aggregates of 6,000,000 shares of Series A Preferred in exchange for $6,000,000, which consisted of cash paid by investors and the cancellation of indebtedness of the Company under advances previously made to the Company by such investors. Shares of Series A Preferred were initially convertible into common stock based on a conversion formula equal to the price per share ($1.00) divided by a conversion price equal to the lesser of (A) $0.02 and (B) seventy percent (70%) of the average of the three (3) lowest daily volume weighted average prices (VWAPs) occurring during the twenty (20) consecutive trading days immediately preceding the applicable conversion date on which the Holder elects to convert any shares of Series A Preferred. On March 13, 2015, following the approval of our Board of Directors and the written consent of the holders of our Series A Preferred, the conversion price of the Series A Preferred was amended to remove the VWAP conversion feature from it, so that the Series A Preferred was convertible into common stock at a fixed price of $0.02 per share. As a result of the Reverse Stock Split, the conversion price of the Series A Preferred is currently $0.20 per share. The conversion price is adjustable in the event of stock splits and other adjustments in the Companys capitalization, and in the event of certain negative actions undertaken by the Company. At the current conversion price, the 4,351,442 shares of Series A Preferred outstanding at September 30, 2015 are convertible into 21,757,210 shares of the common stock of the Company. No holder is permitted to convert its shares of Series A Preferred if such conversion would cause the holder to beneficially own more than 4.99% of the issued and outstanding common stock of the Company immediately after such conversion, unless waived by such holder by providing at least sixty-five days notice. Additional terms of the Series A Preferred include the following: ● The shares of Series A Preferred are entitled to dividends when, as and if declared by the Board as to the shares of the common stock of the Company into which such Series A Preferred may then be converted, subject to the 4.99% beneficial ownership limitation described above. ● Upon the liquidation or dissolution of the Company, or any merger or sale of all or substantially all of the assets, the shares of Series A Preferred are entitled to receive, prior to any distribution to the holders of common stock, 100% of the purchase price per share of Series A Preferred plus all accrued but unpaid dividends. ● The Series A Preferred plus all declared but unpaid dividends thereon automatically will be converted into common stock, at the then applicable conversion rate, upon the affirmative vote of the holders of a majority of the outstanding shares of Series A Preferred. ● Each share of Series A Preferred will carry a number of votes equal to the number of shares of common stock into which such Series A Preferred may then be converted, subject to the 4.99% beneficial ownership limitation described above. The Series A Preferred generally will vote together with the common stock and not as a separate class, except as provided below. ● Consent of the holders of the outstanding Series A Preferred is required in order for the Company to: (i) amend or change the rights, preferences, privileges or powers of, or the restrictions provided for the benefit of, the Series A Preferred; (ii) authorize, create or issue shares of any class of stock having rights, preferences, privileges or powers superior to the Series A Preferred; (iii) reclassify any outstanding shares into shares having rights, preferences, privileges or powers superior to the Series A Preferred; or (iv) amend the Companys Articles of Incorporation or Bylaws in a manner that adversely affects the rights of the Series A Preferred. ● Pursuant to the Securities Purchase Agreements, holders of Series A Preferred are entitled to unlimited piggyback registration rights on registrations by the Company, subject to pro rata cutback at any underwriters discretion. Preferred Stock Conversions for the Year Ended September 30, 2015 For the year ended September 30, 2015, a total of 1,498,558 shares of Series A Preferred were converted into 7,721,685 shares of common stock. The stock was converted in accordance with the conversion terms; therefore no gain or loss has been recognized. Preferred Stock Conversions for the Year Ended September 30, 2014 For the year ended September 30, 2014, a total of 150,000 shares of Series A Preferred were converted into 750,000 shares of common stock. The stock was converted in accordance with the conversion terms; therefore no gain or loss has been recognized. Common Stock Common stock consists of $0.001 par value, 90,000,000 shares authorized, of which 13,762,705 shares were issued and outstanding as of September 30, 2015. Additional Common Stock Issuances for the Year Ended September 30, 2015 On August 10, 2015, the Company issued 25,000 shares of restricted common stock for professional services provided. The total fair value of the common stock was $5,887 based on the closing price of the Companys common stock on the date of grant. During the quarter ended March 31, 2015, the Company issued 40,000 shares of common stock and cancelled 75,000 shares of common stock associated with transactions fully recorded in a previous period. During the same period, the Company issued 12,500 shares of common stock and recognized compensation expense associated with the issuance and vesting of these shares in the amount of $23,063. During the quarter ended December 31, 2014, the Company cancelled 1,219,589 non-plan options and issued 1,110,000 plan options and 500,000 warrants with exercise prices ranging from $0.30 to $0.85 per share, vesting immediately. The Company recorded the replacement of the stock options award as a modification of the terms of the cancelled awards, with the total compensation cost measured at the date of cancellation and replacement as being the sum of the portion of the grant-date fair value of the original award for which the requisite compensation expense had already been recognized at that date plus the incremental cost resulting from the cancellation and replacement. The Company recorded a net total of $845,540 stock option compensation expense related to these issuances and cancellations. During the quarter ended December 31, 2014, the Company issued 2,881 shares associated with the exercise of options with an exercise price of $3.30 per share and received $9,506 in cash. During the same period, the Company approved the issuance of 160,000 shares of the Companys common stock and recognized $114,083 of compensation expense associated with the issuance and vesting of these shares, and additional compensation expense of $68,333 for the vesting of prior period awards. Common Stock Issuances for the Year Ended September 30, 2014 From July 1, 2011 to September 30, 2014, the Company issued 20,965 shares of its common stock for services received by an unrelated party. On May 14, 2014, the Company completed a private placement offering to certain accredited investors pursuant to which the Company sold an aggregate of 4,420,000 shares of the Companys common stock resulting in gross proceeds of $2,210,000 to the Company. For the year ended September 30, 2014, the Company approved the issuance of 1,500,000 shares of the Companys common stock. The Company recorded a stock compensation expense of $67,500 associated with these issuances for the vesting portion and $25,000 as issuance to the service providers. During the quarter ended June 30, 2014, the Company issued 1,000 shares associated with the exercise of 1,000 options at $3.30 and received $3,300 cash. During the year ended September 30, 2014, the Company approved the issuance of 105,500 shares of the Companys common stock. The Company recorded a stock compensation expense of $92,788 associated with these issuances for the vesting portion plus a compensation expense of $101,188 for the vesting of prior period awards. |
Common Stock Options
Common Stock Options | 12 Months Ended |
Sep. 30, 2015 | |
Equity [Abstract] | |
Common Stock Options | Note 13 Common Stock Options Stock Incentive Plan On March 5, 2012, we adopted our 2012 Stock Incentive Plan (the 2012 Plan) providing for the issuance of up to 500,000 shares of common stock pursuant to the grant of options or other awards, including stock grants, to employees, officers or directors of, and consultants to, the Company and its subsidiaries. On May 20, 2014, the 2012 Plan was amended to increase the number of shares of Common Stock which may be issued pursuant to awards granted under the plan to 3,000,000. Options granted under the 2012 Plan may either be intended to qualify as incentive stock options under the Internal Revenue Code of 1986, or may be non-qualified options, and are exercisable over periods not exceeding ten years from date of grant. Common Stock Option Issuances for the Year Ended September 30, 2015 On June 19, 2015, the Company granted 100,000 common stock options as compensation for services to our new Chief Financial Officer. The options vest ratably in quarterly increments over one (1) year beginning September 19, 2015. The options are exercisable until June 19, 2025 at an exercise price of $0.33 per share. The estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 237% and a call option value of $0.3274, was $32,744. The options are being expensed over the vesting period. The Company recognized $8,186 of stock based compensation expense during the year ended September 30, 2015. On June 1, 2015, the Company granted options to purchase 200,000 shares of common stock as compensation for services to our Chief Scientist. The options vest ratably in quarterly increments over two (2) years beginning September 1, 2015. The options are exercisable until June 1, 2025 at an exercise price of $0.40 per share. The estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 247% and a call option value of $0.3978, was $79,552. The options are being expensed over the vesting period. The Company recognized $4,972 of stock based compensation expense on this option during the year ended September 30, 2015. During the quarter ended March 31, 2015, the Company did not issue any stock or option awards and recognized compensation expense associated with the vesting of option and stock awards issued in prior periods in the amount of $23,063. During the quarter ended December 31, 2014, the Company cancelled 1,219,589 non-plan options and issued 1,110,000 plan options and 500,000 warrants with exercise prices ranging from $0.40 to $0.85 per share, vesting immediately. The Company recorded the replacement of the stock options award as a modification of the terms of the cancelled awards, with the total compensation cost measured at the date of cancellation and replacement as being the sum of the portion of the grant-date fair value of the original award for which the requisite compensation expense had already been recognized at that date plus the incremental cost resulting from the cancellation and replacement. The Company recorded a net total of $845,540 stock option compensation expense related to these issuances and cancellations. Common Stock Options Exercised for the Year Ended September 30, 2015 On October 20, 2014, the Company issued 2,881 shares associated with the exercise of options with an exercise price of $3.30 per share and received $9,506 in cash. Common Stock Options Exercised for the Year Ended September 30, 2015 On December 31, 2014, the Company cancelled 300,000 unvested common stock options exercisable over a three year period from the original grant date of April 15, 2014 with an exercise price of $0.20 per share. On December 31, 2014, the Company cancelled 100,000 unvested common stock options exercisable over a three year period from the original grant date of June 1, 2014 with an exercise price of $0.50 per share. The following is a summary of information about the stock options outstanding at September 30, 2015. Shares Underlying Shares Underlying Options Outstanding Options Exercisable Weighted Shares Average Weighted Shares Weighted Range of Underlying Remaining Average Underlying Average Exercise Options Contractual Exercise Options Exercise Prices Outstanding Life Price Exercisable Price $0.33 $3.30 1,413,881 3.82 years $ 0.43 1,163,881 $ 0.45 The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions used for grants under the fixed option plan: September 30, September 30, 2015 2014 Average risk-free interest rates 1.62 % 0.81 % Average expected life (in years) 4.49 3.00 Volatility 254 % 104 % The Black-Scholes option pricing model was developed for use in estimating the fair value of short-term traded options that have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions including expected stock price volatility. Because the Companys common stock options have characteristics significantly different from those of traded options and because changes in the subjective input assumptions can materially affect the fair value estimate, in managements opinion the existing models do not necessarily provide a reliable single measure of the fair value of its common stock options. During the years ended September 30, 2015 and September 30, 2014, there were no options granted with an exercise price below the fair value of the underlying stock at the grant date. The weighted average fair value of options granted with exercise prices at the current fair value of the underlying stock during the years ended September 30, 2015 and 2014 was approximately $0.42 and $0.21 per option, respectively. The following is a summary of activity of outstanding common stock options: Weighted Average Number Exercise of Shares Price Balance, September 30, 2013 6,232 $ 3.30 Options expired - - Options cancelled - - Options granted 401,530 0.30 Options exercised (1,000 ) (3.30 ) Balance, September 30, 2014 406,762 0.30 Options expired (402,881 ) (0.30 ) Options cancelled - - Options granted 1,410,000 0.43 Options exercised - - Balance, September 30, 2015 1,413,881 $ 0.43 Exercisable, September 30, 2015 1,163,881 $ 0.45 The Company expensed $663,626 and $49,325 from the amortization of common stock options during the years ended September 30, 2015 and 2014, respectively. As of September 30, 2015, these options in the aggregate had no intrinsic value as the per share market price of $0.20 of the Companys common stock as of such date was less than the weighted-average exercise price of these options of $0.43. Non-Plan Options During the three month period ended December 31, 2014, the Company issued options outside of the 2012 Plan to purchase 100,000 shares of common stock with an exercise price of $0.85, vesting quarterly over a period of one year, resulting in compensation expense of $82,826. These options were cancelled and re-issued as options under our 2012 plan in the quarter ended December 31, 2015. In addition to options granted under the 2012 Plan, at December 31, 2014, the Company had outstanding options to purchase 200,000 shares of common stock. During the three month period ended December 31, 2014, holders of non-plan options to purchase 200,000 shares of common stock surrendered such options to the Company for cancellation. |
Common Stock Warrants
Common Stock Warrants | 12 Months Ended |
Sep. 30, 2015 | |
Equity [Abstract] | |
Common Stock Warrants | Note 14 Common Stock Warrants Common Stock Warrants On December 31, 2014, the Company issued fully vested warrants to purchase 200,000 shares of common stock at an exercise price of $0.30 per share over three years to a service provider following the return for cancellation of prior stock grants and options totaling 200,000 shares. On December 30, 2014, the Company issued fully vested warrants to purchase 300,000 shares of common stock at an exercise price of $0.40 per share over three years to a former employee following the return for cancellation of prior stock grants and options totaling 300,000 shares. The following is a summary of information about the Common Stock Warrants outstanding at September 30, 2015. Shares Underlying Shares Underlying Warrants Outstanding Warrants Exercisable Weighted Shares Average Weighted Shares Weighted Range of Underlying Remaining Average Underlying Average Exercise Warrants Contractual Exercise Warrants Exercise Prices Outstanding Life Price Exercisable Price $0.30 $0.40 500,000 2.25 years $ 0.36 500,000 $ 0.36 The fair value of each warrant grant is estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions used for grants under the fixed option plan: September 30, September 30, 2015 2014 Average risk-free interest rates 1.64 % - % Average expected life (in years) 3.00 - Volatility 257 % - % The weighted average fair value of warrants granted with exercise prices at the current fair value of the underlying stock during the year ended September 30, 2015 was approximately $0.36 per warrant. The following is a summary of activity of outstanding common stock warrants: Weighted Average Number Exercise of Shares Price Balance, September 30, 2013 - $ - Warrants expired - - Warrants cancelled - - Warrants granted - - Warrants exercised - - Balance, September 30, 2014 - - Warrants expired - - Warrants cancelled - - Warrants granted 500,000 0.36 Warrants exercised - - Balance, September 30, 2015 500,000 $ 0.36 Exercisable, September 30, 2015 500,000 $ 0.36 Subsidiary Warrants On April 19, 2014, DigiPath Corp., a subsidiary of DigiPath, Inc. which is dedicated to digital microscopy, granted five-year common stock Purchase Warrants to Steven Barbee and Eric Stoppenhagen (the Consultants) to purchase an aggregate of 6,000,000 shares of common stock of DigiPath Corp. at an exercise price of $0.10 per share over a five (5) year period from the date of grant. The Company recorded a total of $343,533 of expense associated with the issuance of these warrants and recorded a non-controlling interest as a reduction to total stockholders equity on the Companys balance sheet because the warrants were issued by the Companys subsidiary. No continued allocation of the non-controlling interest in the equity of the subsidiary has been recognized, as the warrants hadnt been exercised and DigiPath, Inc. was still in control of 100% of the interests of the subsidiary as of September 30, 2015. The Company recorded a total of total of $343,533 expense associated with warrants and recorded as a non-controlling interest because the warrants are issued by the subsidiary. As a result of the Companys divestiture of DigiPath Corp. as described in Note 18, these warrants are no longer outstanding. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 15 Commitments and Contingencies Lease Commitment The Company leases space for its lab operations in Las Vegas, Nevada. Amounts of minimum future annual commitments, including common area maintenance fees, under non-cancelable operating leases are as follows: 2016 $ 24,028 2017 196,673 2018 204,540 2019 212,722 2020 388,015 Total $ 1,025,978 In addition to this commitment, the Company pays monthly rent in the aggregate amount of $2,616 for potential lab space, which is rented on a month-to-month basis. Rent expense was $228,616 and $63,974 for the years ended September 30, 2015 and 2014, respectively. |
Income Tax
Income Tax | 12 Months Ended |
Sep. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Tax | Note 16 Income Tax The Company accounts for income taxes under FASB ASC 740-10, which requires use of the liability method. FASB ASC 740-10-25 provides that deferred tax assets and liabilities are recorded based on the differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes, referred to as temporary differences. For the years ended September 30, 2015 and 2014, the Company incurred a net operating loss and, accordingly, no provision for income taxes has been recorded. In addition, no benefit for income taxes has been recorded due to the uncertainty of the realization of any tax assets. At September 30, 2015, the Company had approximately $6,652,500 of federal net operating losses. The net operating loss carry forwards, if not utilized, will begin to expire in 2031. The effective income tax rate for the years ended September 30, 2015 and 2014 consisted of the following: September 30, 2015 2014 Federal statutory income tax rate 35.00 % 34.00 % State income taxes 3.95 % 6.90 % Change in valuation allowance (38.95 )% (40.90 )% Net effective income tax rate - - The components of the Companys deferred tax asset are as follows: September 30, 2015 2014 Deferred tax assets: Net operating loss carry forwards $ 2,328,375 $ 1,433,582 Net deferred tax assets before valuation allowance $ 2,328,375 $ 1,433,582 Less: Valuation allowance (2,328,375 ) (1,433,582 ) Net deferred tax assets $ - $ - Based on the available objective evidence, including the Companys history of its loss, management believes it is more likely than not that the net deferred tax assets will not be fully realizable. Accordingly, the Company provided for a full valuation allowance against its net deferred tax assets at September 30, 2015 and 2014, respectively. In accordance with FASB ASC 740, the Company has evaluated its tax positions and determined there are no uncertain tax positions. |
Segment Operating Results
Segment Operating Results | 12 Months Ended |
Sep. 30, 2015 | |
Segment Reporting [Abstract] | |
Segment Operating Results | Note 17 Segment Operating Results Our business is comprised of two general divisions: cannabis related and digital pathology (microscopy) sales and services. The following table shows operating results for these two divisions for the years ended September 30, 2015 and 2014. The microscopy segment has been extracted and presented as Loss from operations of discontinued business component within the statements of operations pursuant to a subsequent divestiture. For the years ended September 30, 2015 2014 Cannabis Microscopy Cannabis Microscopy Revenues $ 16,084 $ 395,718 $ - $ 485,870 Cost of sales 85,551 360,652 - 297,529 Gross profit (loss) (69,467 ) 35,066 - 188,341 Operating expenses (3,371,070 ) (654,001 ) (2,323,899 ) (685,008 ) Loss from operations (3,440,537 ) (618,935 ) (2,323,899 ) (496,667 ) Other income (expense) (273,220 ) 363 - (11,636 ) Net loss $ (3,713,757 ) $ (618,572 ) $ (2,323,899 ) $ (508,303 ) The following table shows net assets for these two divisions, along with the corporate holding company, as of September 30, 2015 and 2014. September 30, 2015 September 30, 2014 Corporate Cannabis Microscopy Corporate Cannabis Microscopy Net assets $ 362,513 $ 1,470,902 $ 182,299 $ 3,907,777 $ 1,017,680 $ 561,442 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Sep. 30, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 18 Subsequent Events Appointment of Chairman of Board of Directors On October 7, 2015, we appointed Joseph Bianco to chair our Board of Directors. On November 23, 2015, we entered into an agreement with our Chairman of the Board for an initial term of 15 months, commencing retroactively from October 1, 2015 and ending on December 31, 2016, in which Mr. Bianco will be entitled to a monthly fee of $4,000, of which $2,000 shall be deferred until the Companys operations become cash flow positive. Also, commencing on January 1, 2016, if no notice of cancellation has been issued prior thereto, Mr. Bianco shall be awarded 500,000 shares of common stock for each calendar year of service, subject to a ratable claw back provision. As of the date of this filing, the shares have not yet been issued. Preferred Stock Conversions On October 29, 2015, a shareholder converted 100,000 shares of Series A Preferred into 500,000 shares of common stock. The stock was converted in accordance with the conversion terms; therefore no gain or loss has been recognized. On October 8, 2015, a shareholder converted 120,000 shares of Series A Preferred into 600,000 shares of common stock. The stock was converted in accordance with the conversion terms; therefore no gain or loss has been recognized. Preferred Stock Cancellation On October 1, 2015, a shareholder cancelled 60,000 shares of Series A Preferred as part of the divestiture of DigiPath Corp., as more fully explained below. Common Stock Sales On December 21, 2015, the Company sold 166,667 units, consisting of 166,667 shares of its common stock and an equal number of warrants, exercisable at $0.30 per share over a thirty six month period, in exchange for total proceeds of $25,000. The proceeds received were allocated between the common stock and warrants on a relative fair value basis. On November 23, 2015, the Company sold 100,000 units, consisting of 100,000 shares of its common stock and an equal number of warrants, exercisable at $0.40 per share over a thirty six month period, in exchange for total proceeds of $20,000. The proceeds received were allocated between the common stock and warrants on a relative fair value basis. Common Stock Options Issued for Services On November 20, 2015, the Company granted 500,000 fully vested common stock options as compensation for services to a consultant. The options are exercisable over a three year period at an exercise price of $0.181 per share. The estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 234% and a call option value of $0.1734, was $86,708. Divestiture of Wholly-Owned Subsidiary, DigiPath Corp. On October 1, 2015, DigiPath, Inc., entered into an Omnibus Agreement and Amendment (the Agreement) with DigiPath Corp., and our former Director, Steven D. Barbee. Pursuant to the Agreement, among other things: ● The exercise price of the warrant held by Mr. Barbee to purchase 3,000,000 shares of common stock of DigiPath Corp. (the Barbee Warrant) was reduced from $0.10 per share to $0.0333333 per share, and Mr. Barbee subsequently exercised the warrant. ● Mr. Barbee resigned as a director of the Company. ● The Consulting, Confidentiality and Proprietary Rights Agreement, dated as of May 30, 2014, between the Company and Mr. Barbee, as amended, was terminated. ● Indebtedness of approximately $18,000 owed by the Company to DigiPath Corp. was cancelled. ● DigiPath Corp. was provided with the right to require the Company to change its name so as not to include the name DigiPath in the event of the sale of all or substantially all of the assets or capital stock of DigiPath Corp., or a merger of DigiPath Corp. following which the Company ceases to be a shareholder of DigiPath Corp., in each case, that occurs within 12 months following the date of the Agreement. ● The Company, as a shareholder of DigiPath Corp, was provided with (i) rights of first-refusal and co-sale rights with respect to sales of common stock of DigiPath Corp by Barbee, and (ii) pre-emptive rights with respect to issuances of common stock by DigiPath Corp. Concurrently with the execution of the Agreement, DigiPath Corp. agreed to issue 3,000,000 shares of its common stock to a third party for an aggregate purchase price of $100,000, and an affiliate of such party agreed to surrender 60,000 shares of Series A Preferred of the Company for cancellation, and terminate a previously held warrant to purchase 3,000,000 shares of common stock of DigiPath Corp. As a result of such issuance of shares of DigiPath Corp common stock, and after giving effect to the exercise of the Barbee Warrant, the Company continued to hold approximately 34% of the outstanding shares of common stock of DigiPath Corp. Following the execution of the Agreement, Mr. Barbee continued to serve as the President and sole director of DigiPath Corp. |
Nature of Business and Signif25
Nature of Business and Significant Accounting Policies (Policies) | 12 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Nature of Business | Nature of Business DigiPath, Inc. was incorporated in Nevada on October 5, 2010. DigiPath, Inc. and its subsidiaries (DigiPath, the Company, we, our or us) supports the cannabis industrys best practices for reliable testing, cannabis education and training, and brings unbiased cannabis news coverage to the cannabis industry. Our three business units as of September 30, 2015, which were all wholly-owned subsidiaries of DigiPath, Inc. as of such date, are described below. Ø DigiPath Labs, Inc Ø The National Marijuana News Corp Ø DigiPath Corp |
Stock Split | Stock Split All share and per share amounts herein have been given retroactive effect to the 1-for-10 reverse stock split of the Companys common stock effected May 27, 2015 (See Note 12). |
Basis of Accounting | Basis of Accounting The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (SEC). Intercompany accounts and transactions have been eliminated. All references to Generally Accepted Accounting Principles (GAAP) are in accordance with The FASB Accounting Standards Codification (ASC) and the Hierarchy of Generally Accepted Accounting Principles. |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of the following entities, all of which were under common control and ownership at September 30, 2015: State of Abbreviated Name of Entity (1) Incorporation Relationship Reference DigiPath, Inc. (2) Nevada Parent DIGP DigiPath Labs, Inc. Nevada Subsidiary LABS TNM News, Inc. Nevada Subsidiary TNM GroSciences, Inc. (3) Colorado Subsidiary GRO DigiPath Corp. (4)(5) Nevada Subsidiary CORP (1) (2) (3) (4) (5) The consolidated financial statements herein contain the operations of the wholly-owned subsidiaries listed above. All significant inter-company transactions have been eliminated in the preparation of these financial statements. The parent company and subsidiaries will be collectively referred to herein as the Company, DigiPath or DIGP. The Company's headquarters are located in Las Vegas, Nevada and substantially all of its customers are within the United States. These statements reflect all adjustments, consisting of normal recurring adjustments, which in the opinion of management are necessary for fair presentation of the information contained therein. |
Reclassifications | Reclassifications Certain prior year amounts have been reclassified to conform to the current period presentation. These reclassifications had no impact on net earnings, financial position or cash flows. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that may 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 these estimates. |
Segment Reporting | Segment Reporting ASC Topic 280, Segment Reporting, requires use of the management approach model for segment reporting. The management approach model is based on the way a companys management organizes segments within the company for making operating decisions and assessing performance. The Company determined it has two reportable segments. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company adopted ASC 820, Fair Value Measurements and Disclosures (ASC 820). ASC 820 defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The three levels are defined as follows: - Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. - Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. - Level 3 inputs to valuation methodology are unobservable and significant to the fair measurement. The carrying value of cash, accounts receivable, accounts payables and accrued expenses are estimated by management to approximate fair value primarily due to the short term nature of the instruments. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents includes all highly liquid instruments with an original maturity of three months or less. The Company had no cash equivalents as of September 30, 2015 and 2014. |
Cash in Excess of FDIC Insured Limits | Cash in Excess of FDIC Insured Limits The Company maintains its cash in bank deposit accounts which, at times, may exceed federally insured limits. Accounts are guaranteed by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 under current regulations. The Company had approximately $85,008 and $3,514,125 in excess of FDIC insured limits at September 30, 2015 and 2014, respectively. The Company has not experienced any losses in such accounts. |
Accounts Receivable | Accounts Receivable Accounts receivable are carried at their estimated collectible amounts. Trade accounts receivable are periodically evaluated for collectability based on past credit history with customers and their current financial condition. The Company had an allowance for doubtful accounts of $36,715 and $-0- as of September 30, 2015 and 2014, respectively. |
Inventory | Inventory Inventory is valued at the lower of cost or market. Cost is determined on a first-in, first-out method. Inventory consists of digital slide scanners and slide scanner parts. |
Fixed Assets | Fixed Assets Fixed assets are stated at the lower of cost or estimated net recoverable amount. The cost of property, plant and equipment is depreciated using the straight-line method based on the lesser of the estimated useful lives of the assets or the lease term based on the following life expectancy: Software 2-3 years Office equipment 5 years Furniture and fixtures 5 years Lab equipment 7 years Leasehold improvements 6 years Repairs and maintenance expenditures are charged to operations as incurred. Major improvements and replacements, which have extend the useful life of an asset, are capitalized and depreciated over the remaining estimated useful life of the asset. When assets are retired or sold, the cost and related accumulated depreciation and amortization are eliminated and any resulting gain or loss is reflected in operations. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Long-lived assets held and used by the Company are reviewed for possible impairment whenever events or circumstances indicate the carrying amount of an asset may not be recoverable or is impaired. Recoverability is assessed using undiscounted cash flows based upon historical results and current projections of earnings before interest and taxes. Impairment is measured using discounted cash flows of future operating results based upon a rate that corresponds to the cost of capital. Impairments are recognized in operating results to the extent that carrying value exceeds discounted cash flows of future operations. The Company recognized impairment losses on the disposal of fixed assets of $8,303 and $-0- during the years ended September 30, 2015 and 2014, respectively. Our intellectual property is comprised of indefinite-lived brand name acquired and have been assigned an indefinite life as we currently anticipate that these brand names will contribute cash flows to the Company perpetually. We evaluate the recoverability of intangible assets periodically by taking into account events or circumstances that may warrant revised estimates of useful lives or that indicate the asset may be impaired. The Company recognized an impairment loss on the carrying value of development costs of $28,336 and $1,003,416 for the years ended September 30, 2015 and 2014, respectively. Management believes these developed products will continue to be utilized by the Company to generate revenues; however, since the Company does not have historical operating experience, these amounts were written off. In addition, the Company recognized an impairment loss on the carrying value of its investment in TissueBLOX TM |
Marketable Securities | Marketable Securities The Company classifies its debt and marketable equity securities into held-to-maturity, trading, or available-for-sale categories. Debt securities are classified as held-to-maturity when the Company has the positive intent and ability to hold the securities to maturity. Debt securities for which the Company does not have the intent or ability to hold to maturity are classified as available for sale. Held-to-maturity securities are recorded as either short-term or long-term on the balance sheet based on contractual maturity date and are stated at amortized cost. Marketable securities that are bought and held principally for the purpose of selling them in the near term are classified as trading securities and are reported at fair value, with unrealized gains and losses recognized in earnings. Debt and marketable equity securities not classified as held-to-maturity or as trading are classified as available-for-sale and are carried at fair market value, with the unrealized gains and losses, net of tax, included in the determination of comprehensive income and reported in shareholders equity. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue in accordance with ASC 605, Revenue Recognition. ASC 605 requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery of product has met the criteria established in the arrangement or services rendered; (3) the fee is fixed and determinable; and (4) collectability is reasonably assured. This occurs when the products or services are completed in accordance with the contracts we have with clients. In connection with our products and services arrangements, when we are paid in advance, these amounts are classified as deferred revenue and amortized over the term of the agreement. With respect to our cannabis lab testing revenues, we sell our services on a determinable fixed fee per test, or panel of tests basis, and offer a discounted price for customers that agree to enter into exclusive, long term contracts. We require payment prior to the delivery of results, as such, revenues are typically recognized upon the delivery of results upon completion of the tests. |
Advertising Costs | Advertising Costs The Company expenses the cost of advertising and promotions as incurred. Advertising and promotions expense was $145,293 and $103,219 for the years ended September 30, 2015 and 2014, respectively. |
Basic and Diluted Loss Per Share | Basic and Diluted Loss Per Share The basic net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding. Diluted net loss per common share is computed by dividing the net loss adjusted on an as if converted basis, by the weighted average number of common shares outstanding plus potential dilutive securities. For the years ended September 30, 2015 and 2014, potential dilutive securities had an anti-dilutive effect and were not included in the calculation of diluted net loss per common share. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for equity instruments issued to employees in accordance with the provisions of ASC 718 Stock Compensation (ASC 718) and Equity-Based Payments to Non-employees pursuant to ASC 505-50 (ASC 505-50). All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. The measurement date of the fair value of the equity instrument issued is the earlier of the date on which the counterpartys performance is complete or the date at which a commitment for performance by the counterparty to earn the equity instruments is reached because of sufficiently large disincentives for nonperformance. |
Income Taxes | Income Taxes The Company recognizes deferred tax assets and liabilities based on differences between the financial reporting and tax basis of assets and liabilities using the enacted tax rates and laws that are expected to be in effect when the differences are expected to be recovered. The Company provides a valuation allowance for deferred tax assets for which it does not consider realization of such assets to be more likely than not. |
Uncertain Tax Positions | Uncertain Tax Positions In accordance with ASC 740, Income Taxes (ASC 740), the Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be capable of withstanding examination by the taxing authorities based on the technical merits of the position. These standards prescribe a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. These standards also provide guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. Various taxing authorities periodically audit the Companys income tax returns. These audits include questions regarding the Companys tax filing positions, including the timing and amount of deductions and the allocation of income to various tax jurisdictions. In evaluating the exposures connected with these various tax filing positions, including state and local taxes, the Company records allowances for probable exposures. A number of years may elapse before a particular matter, for which an allowance has been established, is audited and fully resolved. The Company has not yet undergone an examination by any taxing authorities. The assessment of the Companys tax position relies on the judgment of management to estimate the exposures associated with the Companys various filing positions. Various taxing authorities periodically audit the Companys income tax returns. These audits include questions regarding the Companys tax filing positions, including the timing and amount of deductions and the allocation of income to various tax jurisdictions. In evaluating the exposures connected with these various tax filing positions, including state and local taxes, the Company records allowances for probable exposures. A number of years may elapse before a particular matter, for which an allowance has been established, is audited and fully resolved. The Company has not yet undergone an examination by any taxing authorities. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In September, 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2015-16, Business Combinations (Topic 805) In August, 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date In April 2015, the FASB issued ASU No. 2015-03, InterestImputation of Interest (Subtopic 835-30) In August, 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40) In June 2014, the FASB issued ASU No. 2014-12, Compensation Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period In May 2014, the FASB issued ASU No. 2014-09 Revenue from Contracts with Customers There are no other recently issued accounting pronouncements that the Company has yet to adopt that are expected to have a material effect on its financial position, results of operations, or cash flows. |
Nature of Business and Signif26
Nature of Business and Significant Accounting Policies (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Schedule of Entities Under Common Control and Ownership | The accompanying consolidated financial statements include the accounts of the following entities, all of which were under common control and ownership at September 30, 2015: State of Abbreviated Name of Entity (1) Incorporation Relationship Reference DigiPath, Inc. (2) Nevada Parent DIGP DigiPath Labs, Inc. Nevada Subsidiary LABS TNM News, Inc. Nevada Subsidiary TNM GroSciences, Inc. (3) Colorado Subsidiary GRO DigiPath Corp. (4)(5) Nevada Subsidiary CORP (1) (2) (3) (4) (5) |
Schedule of Estimated Useful Lives of Fixed Assets Property, Plant and Equipment | Software 2-3 years Office equipment 5 years Furniture and fixtures 5 years Lab equipment 7 years Leasehold improvements 6 years |
Discontinued Business Compone27
Discontinued Business Component (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Discontinued Business Component Tables | |
Schedule of Discontinued Business Component | The operating results of the Digital Pathology business, which have been extracted and presented as Loss from operations of discontinued business component within the statements of operations, are summarized below: For the Years Ended September 30, 2015 2014 Revenues $ 395,718 $ 430,929 Cost of sales 360,652 268,257 Gross profit 35,066 162,672 Expenses: General and administrative 433,569 647,131 Research and development 220,432 - Total operating expenses 654,001 647,131 Net operating loss, net of tax (618,935 ) (484,459 ) Other income 363 - Net loss, net of tax $ (618,572 ) $ (484,459 ) |
Fair Value of Financial Instr28
Fair Value of Financial Instruments (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Summary of Financial Instruments at Fair Value on Recurring Basic | The following schedule summarizes the valuation of financial instruments at fair value on a recurring basis in the balance sheets as of September 30, 2015 and 2014, respectively: Fair Value Measurements at September 30, 2015 Level 1 Level 2 Level 3 Assets Cash $ 481,095 $ - $ - Available-for-sale securities 14,000 - - Total assets 495,095 - - Liabilities None - - - Total liabilities - - - $ 495,095 $ - $ - Fair Value Measurements at September 30, 2014 Level 1 Level 2 Level 3 Assets Cash $ 5,102,620 $ - $ - Intellectual properties - - 28,336 Total assets 5,102,620 - 28,336 Liabilities None - - - Total liabilities - - - $ 5,102,620 $ - $ 28,336 |
Fixed Assets (Tables)
Fixed Assets (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Fixed Assets | Fixed assets consist of the following at September 30, 2015 and 2014: For the Years Ended September 30, 2015 2014 Software $ 131,636 $ 10,019 Office equipment 35,467 - Furniture and fixtures 14,607 13,359 Lab equipment 835,006 35,420 Leasehold improvements 487,066 13,589 1,503,782 72,387 Less: accumulated depreciation (130,091 ) (51,652 ) Total $ 1,373,691 $ 20,735 |
Available-for-Sale Securities (
Available-for-Sale Securities (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Schedule of Investments [Abstract] | |
Schedule of Available-for-Sale Securities | Available-for-sale securities consist of the following at September 30, 2015: Gains in Losses in Accumulated Accumulated Other Other Estimated Amortized Comprehensive Comprehensive Fair Cost Income Income Value Common stock $ 50,000 - $ (36,000 ) $ 14,000 Total available-for-sale securities $ 50,000 - $ (36,000 ) $ 14,000 |
Deferred Revenues (Tables)
Deferred Revenues (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Deferred Revenue Disclosure [Abstract] | |
Schedule of Deferred Revenues | Deferred revenues consist of the following at September 30, 2015 and 2014, respectively. For the Years Ended September 30, 2015 2014 Unearned advertising revenue $ 4,167 $ - Unearned software support 68,954 39,133 Total $ 73,121 $ 39,133 |
Common Stock Options (Tables)
Common Stock Options (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Equity [Abstract] | |
Summary of Common Stock Option Outstanding | The following is a summary of information about the stock options outstanding at September 30, 2015. Shares Underlying Shares Underlying Options Outstanding Options Exercisable Weighted Shares Average Weighted Shares Weighted Range of Underlying Remaining Average Underlying Average Exercise Options Contractual Exercise Options Exercise Prices Outstanding Life Price Exercisable Price $0.33 $3.30 1,413,881 3.82 years $ 0.43 1,163,881 $ 0.45 |
Schedule of Option Pricing Model Weighted-average Assumptions Used for Grands Under Fixed Option Plan | The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions used for grants under the fixed option plan: September 30, September 30, 2015 2014 Average risk-free interest rates 1.62 % 0.81 % Average expected life (in years) 4.49 3.00 Volatility 254 % 104 % |
Summary of Common Stock Options Activity Outstanding | The following is a summary of activity of outstanding common stock options: Weighted Average Number Exercise of Shares Price Balance, September 30, 2013 6,232 $ 3.30 Options expired - - Options cancelled - - Options granted 401,530 0.30 Options exercised (1,000 ) (3.30 ) Balance, September 30, 2014 406,762 0.30 Options expired (402,881 ) (0.30 ) Options cancelled - - Options granted 1,410,000 0.43 Options exercised - - Balance, September 30, 2015 1,413,881 $ 0.43 Exercisable, September 30, 2015 1,163,881 $ 0.45 |
Common Stock Warrants (Tables)
Common Stock Warrants (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Equity [Abstract] | |
Summary of Common Stock Warrants Outstanding | The following is a summary of information about the Common Stock Warrants outstanding at September 30, 2015. Shares Underlying Shares Underlying Warrants Outstanding Warrants Exercisable Weighted Shares Average Weighted Shares Weighted Range of Underlying Remaining Average Underlying Average Exercise Warrants Contractual Exercise Warrants Exercise Prices Outstanding Life Price Exercisable Price $0.30 $0.40 500,000 2.25 years $ 0.36 500,000 $ 0.36 |
Schedule of Warrant Pricing Model Weighted-average Assumptions Used for Grands Under Fixed Option Plan | The fair value of each warrant grant is estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions used for grants under the fixed option plan: September 30, September 30, 2015 2014 Average risk-free interest rates 1.64 % - % Average expected life (in years) 3.00 - Volatility 257 % - % |
Summary of Common Stock Warrants Activity Outstanding | The following is a summary of activity of outstanding common stock warrants: Weighted Average Number Exercise of Shares Price Balance, September 30, 2013 - $ - Warrants expired - - Warrants cancelled - - Warrants granted - - Warrants exercised - - Balance, September 30, 2014 - - Warrants expired - - Warrants cancelled - - Warrants granted 500,000 0.36 Warrants exercised - - Balance, September 30, 2015 500,000 $ 0.36 Exercisable, September 30, 2015 500,000 $ 0.36 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Rental Payment Under Operating Leases | The Company leases space for its lab operations in Las Vegas, Nevada. Amounts of minimum future annual commitments, including common area maintenance fees, under non-cancelable operating leases are as follows: 2016 $ 24,028 2017 196,673 2018 204,540 2019 212,722 2020 388,015 Total $ 1,025,978 |
Income Tax (Tables)
Income Tax (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
Schedule of Effective Income Tax Rate Reconciliation | The effective income tax rate for the years ended September 30, 2015 and 2014 consisted of the following: September 30, 2015 2014 Federal statutory income tax rate 35.00 % 34.00 % State income taxes 3.95 % 6.90 % Change in valuation allowance (38.95 )% (40.90 )% Net effective income tax rate - - |
Schedule of Deferred Tax Asset | The components of the Companys deferred tax asset are as follows: September 30, 2015 2014 Deferred tax assets: Net operating loss carry forwards $ 2,328,375 $ 1,433,582 Net deferred tax assets before valuation allowance $ 2,328,375 $ 1,433,582 Less: Valuation allowance (2,328,375 ) (1,433,582 ) Net deferred tax assets $ - $ - |
Segment Operating Results (Tabl
Segment Operating Results (Tables) | 12 Months Ended |
Sep. 30, 2015 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting | For the years ended September 30, 2015 2014 Cannabis Microscopy Cannabis Microscopy Revenues $ 16,084 $ 395,718 $ - $ 485,870 Cost of sales 85,551 360,652 - 297,529 Gross profit (loss) (69,467 ) 35,066 - 188,341 Operating expenses (3,371,070 ) (654,001 ) (2,323,899 ) (685,008 ) Loss from operations (3,440,537 ) (618,935 ) (2,323,899 ) (496,667 ) Other income (expense) (273,220 ) 363 - (11,636 ) Net loss $ (3,713,757 ) $ (618,572 ) $ (2,323,899 ) $ (508,303 ) |
Schedule of Segment Operating Results Net Assets | September 30, 2015 September 30, 2014 Corporate Cannabis Microscopy Corporate Cannabis Microscopy Net assets $ 362,513 $ 1,470,902 $ 182,299 $ 3,907,777 $ 1,017,680 $ 561,442 |
Nature of Business and Signif37
Nature of Business and Significant Accounting Policies (Details Narrative) - USD ($) | May. 27, 2015 | Apr. 19, 2014 | Sep. 30, 2015 | Sep. 30, 2014 |
Accounting Policies [Abstract] | ||||
Own minority interest | 100.00% | 33.34% | ||
Reverse stock split | 1-for-10 reverse stock split | |||
Warrants issued to purchase common stock, shares | 6,000,000 | |||
Percentage of ownership in non-controlling interest upon exercise of stock | 66.67% | |||
Percentage of ownership in non-controlling interest upon dilution | 33.33% | |||
Fair value of the warrants in non-controlling interest | $ 343,533 | |||
Cash equivalents | ||||
Federal Deposit Insurance Corporation | $ 250,000 | |||
Exceeded insured amounts FDIC | 85,008 | $ 3,514,125 | ||
Allowance for doubtful accounts | 36,715 | 0 | ||
Impairment of Long-Lived Assets | 8,303 | 0 | ||
Loss on impairment of development costs | 28,336 | $ 1,003,416 | ||
Loss on impairment of intangible asset | 300,000 | |||
Repay investment impaired | 300,000 | |||
Advertising and promotions expense | $ 145,293 | $ 103,219 |
Nature of Business and Signif38
Nature of Business and Significant Accounting Policies - Schedule of Entities Under Common Control and Ownership (Details) - Entities Under Common Control and Ownership [Member] | 12 Months Ended | |
Sep. 30, 2015 | ||
Name of Entity | DigiPath, Inc. | [1],[2] |
State of Incorporation | Nevada | |
Relationship | Parent | |
Abbreviated Reference | DIGP | |
Name of Entity | DigiPath Labs, Inc. | [1] |
State of Incorporation | Nevada | |
Relationship | Subsidiary | |
Abbreviated Reference | LABS | |
Name of Entity | TNM News, Inc. | [1] |
State of Incorporation | Nevada | |
Relationship | Subsidiary | |
Abbreviated Reference | TNM | |
Name of Entity | GroSciences, Inc. | [1],[3] |
State of Incorporation | Colorado | |
Relationship | Subsidiary | |
Abbreviated Reference | GRO | |
Name of Entity | DigiPath Corp. | [1],[4],[5] |
State of Incorporation | Nevada | |
Relationship | Subsidiary | |
Abbreviated Reference | CORP | |
[1] | All entities are in the form of a corporation. | |
[2] | Holding company, which owns each of the wholly-owned subsidiaries. As of September 30, 2015, all subsidiaries were wholly-owned by the holding company. | |
[3] | Entity formed for prospective purposes, but has not incurred any income or expenses to date. | |
[4] | On April 19, 2014, DigiPath Corp. issued warrants to purchase an aggregate 6,000,000 shares of common stock, which, if exercised in total would represent approximately two thirds (66.67%) of the equity of the subsidiary, resulting in dilution of DigiPath, Inc.’s. ownership to approximately one third (33.33%). The fair value of the warrants resulted in a non-controlling interest of $343,533, which was recorded as a reduction to total stockholder's equity on the Company's balance sheet. No continued allocation of the non-controlling interest in the equity of the subsidiary had been recognized through September 30, 2015, as the warrants hadn't been exercised and DigiPath, Inc. was still in control of 100% of the interests of the subsidiary. | |
[5] | On October 1, 2015, subsequent to the periods presented in these financial statements, we divested two-thirds of this entity through the exercise of warrants and sale of new issuances. We now own a minority interest of 33.34%. The historical income and loss of the deconsolidated entity have been retroactively presented as a discontinued business component in the financial statements herein. |
Nature of Business and Signif39
Nature of Business and Significant Accounting Policies - Schedule of Estimated Useful Lives of Fixed Assets Property, Plant and Equipment (Details) | 12 Months Ended |
Sep. 30, 2015 | |
Software [Member] | Minimum [Member] | |
Property, Plant and Equipment, Useful Life | 2 years |
Software [Member] | Maximum [Member] | |
Property, Plant and Equipment, Useful Life | 3 years |
Office Equipment [Member] | |
Property, Plant and Equipment, Useful Life | 5 years |
Furniture And Fixtures [Member] | |
Property, Plant and Equipment, Useful Life | 5 years |
Lab Equipment [Member] | |
Property, Plant and Equipment, Useful Life | 7 years |
Leasehold Improvements [Member] | |
Property, Plant and Equipment, Useful Life | 6 years |
Going Concern (Details Narrativ
Going Concern (Details Narrative) - USD ($) | Sep. 30, 2015 | Sep. 30, 2014 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accumulated deficit | $ (7,847,418) | $ (3,515,089) |
Discontinued Business Compone41
Discontinued Business Component (Details Narrative) | Sep. 30, 2015 | Apr. 19, 2014 |
Own minority interest | 33.34% | 100.00% |
DigiPath Corp [Member] | ||
Own minority interest | 33.30% |
Discontinued Business Compone42
Discontinued Business Component - Schedule of Discontinued Business Component (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Discontinued Business Component - Schedule Of Discontinued Business Component Details | ||
Revenues | $ 395,718 | $ 430,929 |
Cost of sales | 360,652 | 268,257 |
Gross profit | 35,066 | 162,672 |
General and administrative | 433,569 | $ 647,131 |
Research and development | 220,432 | |
Total operating expenses | 654,001 | $ 647,131 |
Net operating loss, net of tax | (618,935) | $ (484,459) |
Other income | 363 | |
Net loss, net of tax | $ (618,572) | $ (484,459) |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | Jun. 19, 2015 | Jun. 01, 2015 | May. 14, 2014 | Apr. 09, 2014 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Apr. 19, 2014 |
Company granted stock options as compensation for services | 25,000 | ||||||||
Exercise price | $ 0.45 | ||||||||
Volatility rate | 237.00% | 247.00% | 254.00% | 104.00% | |||||
Stock based compensation expense | $ 8,186 | $ 4,972 | $ 845,540 | ||||||
Issuance of common stock, shares | 4,420,000 | 40,000 | |||||||
Own minority interest | 33.34% | 100.00% | |||||||
Common Stock [Member] | Chief Financial Officer [Member] | |||||||||
Company granted stock options as compensation for services | 100,000 | ||||||||
Options exercisable term | until June 19, 2025 | ||||||||
Exercise price | $ 0.33 | ||||||||
Volatility rate | 237.00% | ||||||||
Call option value | $ 0.3274 | ||||||||
Stock option vlaue | $ 32,744 | ||||||||
Stock based compensation expense | $ 8,186 | ||||||||
Series A Convertible Preferred Stock [Member] | Eric Stoppenhagen [Member] | |||||||||
Stock issued for debt | 27,788 | ||||||||
Stock issued during period, shares settlement | 99,652 | ||||||||
Series A Convertible Preferred Stock [Member] | Verdad Telecom, Inc [Member] | |||||||||
Stock issued for debt | 253,649 | ||||||||
Series A Convertible Preferred Stock [Member] | Verdad Telecom, Inc [Member] | December 31, 2014 [Member] | |||||||||
Stock issued for debt | 46,699 | ||||||||
Stock issued during period, shares settlement | 300,348 | ||||||||
Series A Convertible Preferred Stock [Member] | Mr. Stoppenhagen [Member] | |||||||||
Own minority interest | 100.00% | ||||||||
Series A Convertible Preferred Stock [Member] | Mr. Stoppenhagen [Member] | |||||||||
Stock issued for debt | 71,864 |
Fair Value of Financial Instr44
Fair Value of Financial Instruments (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Fair Value Disclosures [Abstract] | ||
Impairment losses | $ 328,336 | $ 1,003,416 |
Fair Value of Financial Instr45
Fair Value of Financial Instruments - Summary of Financial Instruments at Fair Value on Recurring Basic (Details) - USD ($) | Sep. 30, 2015 | Sep. 30, 2014 |
Level 1 [Member] | ||
Cash | $ 481,095 | $ 5,102,620 |
Available-for-sale securities | 14,000 | |
Intellectual properties | ||
Assets | $ 495,095 | $ 5,102,620 |
Total liabilities | ||
Total | $ 495,095 | $ 5,102,620 |
Level 2 [Member] | ||
Cash | ||
Available-for-sale securities | ||
Intellectual properties | ||
Assets | ||
Total liabilities | ||
Total | ||
Level 3 [Member] | ||
Cash | ||
Available-for-sale securities | ||
Intellectual properties | $ 28,336 | |
Assets | $ 28,336 | |
Total liabilities | ||
Total | $ 28,336 |
Accounts Receivable (Details Na
Accounts Receivable (Details Narrative) - USD ($) | Sep. 30, 2015 | Sep. 30, 2014 |
Receivables [Abstract] | ||
Accounts receivable | $ 6,146 | $ 123,045 |
Allowance for uncollectible accounts, net | $ 36,715 | $ 0 |
Inventory (Details Narrative)
Inventory (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Inventory Disclosure [Abstract] | ||
Inventory | $ 192,561 | $ 285,255 |
Inventory written off | $ 73,179 | $ 51,553 |
Fixed Assets (Details Narrative
Fixed Assets (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Fixed Assets Details Narrative | ||
Loss on the disposal of leasehold improvements | $ 8,303 | |
Lease capitalized improvements cost | 13,586 | |
Disposal of fixed assets | 8,303 | |
Depreciation and amortization expense | $ 83,725 | $ 4,586 |
Fixed Assets - Schedule of Fixe
Fixed Assets - Schedule of Fixed Assets (Details) - USD ($) | Sep. 30, 2015 | Sep. 30, 2014 |
Property, Plant and Equipment [Abstract] | ||
Software | $ 131,636 | $ 10,019 |
Office equipment | 35,467 | |
Furniture and fixtures | 14,607 | $ 13,359 |
Lab equipment | 835,006 | 35,420 |
Leasehold improvements | 487,066 | 13,589 |
Fixed Assets, Gross | 1,503,782 | 72,387 |
Less: accumulated depreciation | (130,091) | (51,652) |
Total | $ 1,373,691 | $ 20,735 |
Available-for-Sale Securities50
Available-for-Sale Securities (Details Narrative) - USD ($) | May. 14, 2014 | Mar. 31, 2015 | Mar. 31, 2015 |
Issuance of common stock, shares | 4,420,000 | 40,000 | |
Blue Line Protection Group, Inc [Member] | |||
Issuance of common stock, shares | 400,000 | ||
Issuance of common stock, amount | $ 50,000 |
Available-for-Sale Securities -
Available-for-Sale Securities - Schedule of Available-for-Sale Securities (Details) | Sep. 30, 2015USD ($) |
Amortized Cost [Member] | |
Common stock | $ 50,000 |
Total available-for-sale securities | $ 50,000 |
Gains In Accumulated Other Comprehensive Income [Member] | |
Common stock | |
Total available-for-sale securities | |
Losses In Accumulated Other Comprehensive Income [Member] | |
Common stock | $ (36,000) |
Total available-for-sale securities | (36,000) |
Estimated Fair Value [Member] | |
Common stock | 14,000 |
Total available-for-sale securities | $ 14,000 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Intangible Assets Details Narrative | ||
Losses on impairment | $ 328,336 | $ 1,003,416 |
Loss on impairment of development costs | 28,336 | $ 1,003,416 |
Loss on impairment of intangible asset | 300,000 | |
Repay investment impaired | $ 300,000 |
Deferred Revenues - Schedule of
Deferred Revenues - Schedule of Deferred Revenues (Details) - USD ($) | Sep. 30, 2015 | Sep. 30, 2014 |
Deferred Revenue | $ 73,121 | $ 39,133 |
Unearned Advertising Revenue [Member] | ||
Deferred Revenue | 4,167 | |
Unrecognized Software Support [Member] | ||
Deferred Revenue | $ 68,954 | $ 39,133 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) | Aug. 10, 2015 | Jun. 19, 2015 | Jun. 01, 2015 | May. 27, 2015 | Mar. 13, 2015 | Oct. 20, 2014 | May. 14, 2014 | Apr. 09, 2014 | Sep. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Jun. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Apr. 19, 2014 |
Reverse stock split | 1-for-10 reverse stock split | ||||||||||||||||
Common stock, shares authorized | 900,000,000 | 90,000,000 | 90,000,000 | 90,000,000 | 90,000,000 | 90,000,000 | |||||||||||
Number of reverse stock split authorized shares decreased ratably shares of common stock | 90,000,000 | ||||||||||||||||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | 10,000,000 | 10,000,000 | 10,000,000 | ||||||||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||||
Preferred stock, shares issued | 4,351,442 | 4,351,442 | 5,850,000 | 5,850,000 | 5,850,000 | ||||||||||||
Preferred stock, shares outstanding | 4,351,442 | 4,351,442 | 5,850,000 | 5,850,000 | 5,850,000 | ||||||||||||
Percentage of equity beneficial ownership | 33.34% | 33.34% | 100.00% | ||||||||||||||
Common stock, shares issued | 13,762,705 | 13,762,705 | 5,875,640 | 5,875,640 | 5,875,640 | ||||||||||||
Common stock, shares outstanding | 13,762,705 | 13,762,705 | 5,875,640 | 5,875,640 | 5,875,640 | ||||||||||||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||||
Common stock issued for professional services, value | $ 224,012 | $ 30,000 | |||||||||||||||
Common stock issued for professional services, shares | 25,000 | ||||||||||||||||
Issuance of common stock, shares | 4,420,000 | 40,000 | |||||||||||||||
Proceeds from issueane of common stock | $ 2,210,000 | $ 2,210,000 | |||||||||||||||
Shares issued of common stock for compensation expense | 12,500 | 105,500 | 1,500,000 | ||||||||||||||
Stock option compensation expense | $ 23,063 | $ 67,500 | |||||||||||||||
Shares issued in exercise of stock option | 2,881 | 1,000 | (1,000) | ||||||||||||||
Stock option exercise price per share | $ 0.33 | $ 0.40 | $ 3.30 | $ 3.30 | $ (3.30) | ||||||||||||
Proceeds from stock option exercised | $ 9,506 | $ 3,300 | $ 9,506 | $ 3,300 | |||||||||||||
Stock compensation expense | $ 8,186 | $ 4,972 | $ 845,540 | ||||||||||||||
Warrants exercise price per share | $ 0.36 | $ 0.36 | |||||||||||||||
Common stock cancelled during period | 75,000 | ||||||||||||||||
Vesting Period [Member] | |||||||||||||||||
Stock compensation expense | $ 92,788 | ||||||||||||||||
Vesting of Prior Period Awards [Member] | |||||||||||||||||
Stock compensation expense | $ 23,063 | $ 101,188 | |||||||||||||||
Unrelated Party [Member] | |||||||||||||||||
Common stock issued for professional services, shares | 20,965 | ||||||||||||||||
Issuances for Vesting Portion Two [Member] | |||||||||||||||||
Stock compensation expense | 114,083 | ||||||||||||||||
Vesting of Prior Period Awards [Member] | |||||||||||||||||
Stock compensation expense | $ 68,333 | ||||||||||||||||
Minimum [Member] | |||||||||||||||||
Warrants exercise price per share | $ 0.40 | ||||||||||||||||
Maximum [Member] | |||||||||||||||||
Warrants exercise price per share | $ 0.85 | ||||||||||||||||
Non-Plan Options [Member] | |||||||||||||||||
Debt instruments cancelled during the period | 1,219,589 | ||||||||||||||||
Plan Options [Member] | |||||||||||||||||
Debt instruments cancelled during the period | 1,110,000 | ||||||||||||||||
Series A Preferred Stock [Member] | |||||||||||||||||
Reverse split stock conversion price per share | $ 0.20 | ||||||||||||||||
Stock conversion price per share | $ 0.02 | ||||||||||||||||
Common Stock One [Member] | |||||||||||||||||
Issuance of common stock, shares | 160,000 | ||||||||||||||||
Shares issued in exercise of stock option | 2,881 | ||||||||||||||||
Stock option exercise price per share | $ 3.30 | ||||||||||||||||
Proceeds from stock option exercised | $ 9,506 | ||||||||||||||||
Securities Purchase Agreements [Member] | |||||||||||||||||
Preferred stock, shares issued | 6,000,000 | ||||||||||||||||
Money paid by investors from subscription and advances made | $ 6,000,000 | ||||||||||||||||
Securities Purchase Agreement [Member] | |||||||||||||||||
Stock conversion price per share | $ 0.02 | ||||||||||||||||
Stock conversion description | Shares of Series A Preferred were initially convertible into common stock based on a conversion formula equal to the price per share ($1.00) divided by a conversion price equal to the lesser of (A) $0.02 and (B) seventy percent (70%) of the average of the three (3) lowest daily volume weighted average prices (VWAPs) occurring during the twenty (20) consecutive trading days immediately preceding the applicable conversion date on which the Holder elects to convert any shares of Series A Preferred. | ||||||||||||||||
Percentage of purchase price plus all accrued but unpaid dividends | 100.00% | ||||||||||||||||
Securities Purchase Agreement [Member] | Series A Preferred Stock [Member] | |||||||||||||||||
Stock conversion price per share | $ 1 | ||||||||||||||||
Series A Convertible Preferred Stock [Member] | |||||||||||||||||
Preferred stock, shares designated | 6,000,000 | 6,000,000 | |||||||||||||||
Series A Preferred Stock [Member] | |||||||||||||||||
Preferred stock, shares issued | 4,351,442 | 4,351,442 | |||||||||||||||
Preferred stock, shares outstanding | 4,351,442 | 4,351,442 | |||||||||||||||
Preferred stock conversion into common stock | 21,757,210 | ||||||||||||||||
Percentage of equity beneficial ownership | 4.99% | 4.99% | |||||||||||||||
Convertible Preferred Stock One [Member] | |||||||||||||||||
Preferred stock, shares outstanding | 1,498,558 | 1,498,558 | 150,000 | 150,000 | 150,000 | ||||||||||||
Preferred stock conversion into common stock | 7,721,685 | 750,000 | |||||||||||||||
Restricted Common Stock [Member] | |||||||||||||||||
Common stock issued for professional services, value | $ 25,000 | ||||||||||||||||
Common stock issued for professional services, shares | 5,887 | ||||||||||||||||
Warrant [Member] | |||||||||||||||||
Debt instruments cancelled during the period | 500,000 | ||||||||||||||||
Warrant [Member] | Minimum [Member] | |||||||||||||||||
Warrants exercise price per share | $ 0.30 | $ 0.30 | |||||||||||||||
Warrant [Member] | Maximum [Member] | |||||||||||||||||
Warrants exercise price per share | $ 0.85 | $ 0.85 |
Common Stock Options (Details N
Common Stock Options (Details Narrative) - USD ($) | Jun. 19, 2015 | Jun. 01, 2015 | Dec. 31, 2014 | Oct. 20, 2014 | May. 20, 2014 | Mar. 05, 2012 | Mar. 31, 2015 | Dec. 31, 2014 | Jun. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 |
Number of shares granted under compensation plan | 1,410,000 | 401,530 | |||||||||
Maximum date to exercise the option | Jun. 19, 2025 | Jun. 1, 2025 | |||||||||
Stock option exercise price per share | $ 0.33 | $ 0.40 | $ 3.30 | $ 3.30 | $ (3.30) | ||||||
Volatility rate | 237.00% | 247.00% | 254.00% | 104.00% | |||||||
Value of call option per share | $ 0.3274 | $ 0.3978 | |||||||||
Value of option | $ 32,744 | $ 79,552 | |||||||||
Stock compensation expense | $ 8,186 | $ 4,972 | $ 845,540 | ||||||||
Shares cancelled during period | 75,000 | ||||||||||
Warrants exercise price range per share | $ 0.36 | ||||||||||
Shares issued in exercise of stock option | 2,881 | 1,000 | (1,000) | ||||||||
Proceeds from stock option exercised | $ 9,506 | $ 3,300 | $ 9,506 | $ 3,300 | |||||||
Minimum [Member] | |||||||||||
Warrants exercise price range per share | $ 0.40 | $ 0.40 | |||||||||
Maximum [Member] | |||||||||||
Warrants exercise price range per share | 0.85 | $ 0.85 | |||||||||
Non-Plan Options [Member] | |||||||||||
Shares cancelled during period | 1,219,589 | ||||||||||
Plan Options [Member] | |||||||||||
Stock option exercise price per share | $ 0.42 | $ 0.21 | |||||||||
Shares cancelled during period | 1,110,000 | ||||||||||
Amortization of common stock options | $ 663,626 | $ 49,325 | |||||||||
Options exercise price description | these options in the aggregate had no intrinsic value as the per share market price of $0.20 of the Companys common stock as of such date was less than the weighted-average exercise price of these options of $0.43. | ||||||||||
Warrant [Member] | |||||||||||
Volatility rate | 257.00% | 0.00% | |||||||||
Shares cancelled during period | 500,000 | ||||||||||
Non-Plan Options Two [Member] | |||||||||||
Number of shares issued under stock plan | 100,000 | ||||||||||
Number of shares granted under compensation plan | 200,000 | ||||||||||
Stock option exercise price per share | $ 0.85 | ||||||||||
Stock compensation expense | $ 82,826 | ||||||||||
Shares cancelled during period | 200,000 | ||||||||||
Vesting of Prior Period Awards [Member] | |||||||||||
Stock compensation expense | $ 23,063 | $ 101,188 | |||||||||
April 15, 2014 [Member] | |||||||||||
Stock option exercise price per share | $ 0.20 | ||||||||||
Shares cancelled during period | 300,000 | ||||||||||
June 1, 2014 [Member] | |||||||||||
Stock option exercise price per share | $ 0.50 | ||||||||||
Shares cancelled during period | 100,000 | ||||||||||
Chief Financial Officer [Member] | |||||||||||
Number of shares granted under compensation plan | 100,000 | ||||||||||
Chief Scientist [Member] | |||||||||||
Number of shares granted under compensation plan | 200,000 | ||||||||||
2012 Stock Incentive Plan [Member] | |||||||||||
Number of shares issued under stock plan | 500,000 | ||||||||||
Change in number if shares issued under stock plan | 3,000,000 |
Common Stock Options - Summary
Common Stock Options - Summary of Common Stock Option Outstanding (Details) | 12 Months Ended |
Sep. 30, 2015$ / sharesshares | |
Equity [Abstract] | |
Range of Exercise Price, Minimum | $ 0.33 |
Range of Exercise Price, Maximum | $ 3.30 |
Number of Options Outstanding | shares | 1,413,881 |
Weighted Average Remaining Contractual Life | 3 years 9 months 26 days |
Weighted Average Exercise Price | $ 0.43 |
Number of Shares Exercisable | shares | 1,163,881 |
Weighted Average Exercise Price Exercisable | $ 0.45 |
Common Stock Options - Schedule
Common Stock Options - Schedule of Option Pricing Model Weighted-average Assumptions Used for Grands Under Fixed Option Plan (Details) | Jun. 19, 2015 | Jun. 01, 2015 | Sep. 30, 2015 | Sep. 30, 2014 |
Equity [Abstract] | ||||
Average risk-free interest rates | 1.62% | 0.81% | ||
Expected average term | 4 years 5 months 27 days | 3 years | ||
Volatility | 237.00% | 247.00% | 254.00% | 104.00% |
Common Stock Options - Summar58
Common Stock Options - Summary of Common Stock Options Activity Outstanding (Details) - $ / shares | Jun. 19, 2015 | Jun. 01, 2015 | Oct. 20, 2014 | Mar. 31, 2015 | Jun. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 |
Equity [Abstract] | |||||||
Shares Outstanding, Beginning balance | 406,762 | 6,232 | |||||
Shares, Expired | (402,881) | ||||||
Shares, Cancelled | 75,000 | ||||||
Shares, Granted | 1,410,000 | 401,530 | |||||
Shares, Exercised | 2,881 | 1,000 | (1,000) | ||||
Shares Outstanding, Ending balance | 1,413,881 | 406,762 | |||||
Shares Exercisable | 1,163,881 | ||||||
Weighted Average Exercise Price, Outstanding, Beginning | $ 0.30 | $ 3.30 | |||||
Weighted Average Exercise Price, Expired | $ (0.30) | ||||||
Weighted Average Exercise Price, Cancelled | |||||||
Weighted Average Exercise Price, Granted | $ 0.43 | $ 0.30 | |||||
Weighted Average Exercise Price, Exercised | $ 0.33 | $ 0.40 | $ 3.30 | $ 3.30 | (3.30) | ||
Weighted Average Exercise Price, Outstanding, Ending | $ 0.43 | $ 0.30 | |||||
Weighted Average Exercise Price, Exercisable | $ 0.45 |
Common Stock Warrants (Details
Common Stock Warrants (Details Narrative) - USD ($) | Jun. 19, 2015 | Jun. 01, 2015 | Dec. 30, 2014 | Oct. 20, 2014 | Apr. 19, 2014 | Mar. 31, 2015 | Jun. 30, 2014 | Sep. 30, 2015 | Dec. 31, 2014 | Sep. 30, 2014 |
Exercise price of common stock | $ 0.33 | $ 0.40 | $ 3.30 | $ 3.30 | $ (3.30) | |||||
Common stock cancelled during period | 75,000 | |||||||||
Fair value of warrants weighted average exercise price | $ 0.36 | |||||||||
Expenses associated with issuance of warrants | $ 343,533 | |||||||||
DigiPath Corp [Member] | ||||||||||
Expenses associated with issuance of warrants | $ 343,533 | |||||||||
Precentage of ownership in non contorlling interest | 100.00% | |||||||||
Consultants [Member] | ||||||||||
Number of common stock purchased through issuance of warrants | 6,000,000 | |||||||||
Exercise price of common stock | $ 0.10 | |||||||||
Common Stock Warrants One [Member] | ||||||||||
Number of common stock purchased through issuance of warrants | 200,000 | |||||||||
Exercise price of common stock | $ 0.30 | |||||||||
Common stock cancelled during period | 200,000 | |||||||||
Common Stock Warrants Two [Member] | ||||||||||
Number of common stock purchased through issuance of warrants | 300,000 | |||||||||
Exercise price of common stock | $ 0.40 | |||||||||
Common stock cancelled during period | 300,000 |
Common Stock Warrants - Summary
Common Stock Warrants - Summary of Common Stock Warrants Outstanding (Details) - $ / shares | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2013 | |
Equity [Abstract] | |||
Range of Exercise Price, Minimum | $ 0.30 | ||
Range of Exercise Price, Maximum | $ 0.40 | ||
Number of Warrants Outstanding | 500,000 | ||
Weighted Average Remaining Contractual Life | 2 years 3 months | ||
Weighted Average Exercise Price | $ 0.36 | ||
Number of Shares Exercisable | 500,000 | ||
Weighted Average Exercise Price Exercisable | $ 0.36 |
Common Stock Warrants - Schedul
Common Stock Warrants - Schedule of Warrant Pricing Model Weighted-average Assumptions Used for Grands Under Fixed Option Plan (Details) | Jun. 19, 2015 | Jun. 01, 2015 | Sep. 30, 2015 | Sep. 30, 2014 |
Average risk-free interest rates | 1.62% | 0.81% | ||
Average expected life (in years) | 4 years 5 months 27 days | 3 years | ||
Volatility | 237.00% | 247.00% | 254.00% | 104.00% |
Warrant [Member] | ||||
Average risk-free interest rates | 1.64% | 0.00% | ||
Average expected life (in years) | 3 years | 0 years | ||
Volatility | 257.00% | 0.00% |
Common Stock Warrants - Summa62
Common Stock Warrants - Summary of Common Stock Warrants Activity Outstanding (Details) - $ / shares | 12 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Equity [Abstract] | ||
Shares Outstanding, Beginning balance | ||
Shares, Expired | ||
Shares, Cancelled | ||
Shares, Granted | 500,000 | |
Shares, Exercised | ||
Shares Outstanding, Ending balance | 500,000 | |
Shares Exercisable | 500,000 | |
Weighted Average Exercise Price, Outstanding, Beginning | ||
Weighted Average Exercise Price, Expired | ||
Weighted Average Exercise Price, Cancelled | ||
Weighted Average Exercise Price, Granted | $ 0.36 | |
Weighted Average Exercise Price, Exercised | ||
Weighted Average Exercise Price, Outstanding, Ending | $ 0.36 | |
Weighted Average Exercise Price, Exercisable | $ 0.36 |
Commitments and Contingencies63
Commitments and Contingencies (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Monthly rent payable | $ 2,616 | |
Operating lease rent | $ 228,616 | $ 63,974 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Future Minimum Rental Payment Under Operating Leases (Details) | Sep. 30, 2015USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,016 | $ 24,028 |
2,017 | 196,673 |
2,018 | 204,540 |
2,019 | 212,722 |
2,020 | 388,015 |
Total | $ 1,025,978 |
Income Tax (Details Narrative)
Income Tax (Details Narrative) | 12 Months Ended |
Sep. 30, 2015USD ($) | |
Income Tax Disclosure [Abstract] | |
Provision for income taxes | |
Net operating loss carry forwards | $ 6,652,500 |
Operating loss expiration year | 2,031 |
Income Tax - Schedule of Effect
Income Tax - Schedule of Effective Income Tax Rate Reconciliation (Details) | 12 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Income Tax Disclosure [Abstract] | ||
Federal statutory income tax rate | 35.00% | 34.00% |
State income taxes | 3.95% | 6.90% |
Change in valuation allowance | (38.95%) | (40.90%) |
Net effective income tax rate | 0.00% | 0.00% |
Income Tax - Schedule of Deferr
Income Tax - Schedule of Deferred Tax Asset (Details) - USD ($) | Sep. 30, 2015 | Sep. 30, 2014 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carry forwards | $ 2,328,375 | $ 1,433,582 |
Net deferred tax assets before valuation allowance | 2,328,375 | 1,433,582 |
Less: Valuation allowance | $ (2,328,375) | $ (1,433,582) |
Net deferred tax assets |
Segment Operating Results (Deta
Segment Operating Results (Details Narrative) | 12 Months Ended |
Sep. 30, 2015Segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |
Segment Operating Results - Sch
Segment Operating Results - Schedule of Segment Reporting (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Revenues | $ 16,084 | $ 54,941 |
Gross profit (loss) | (69,467) | 25,669 |
Operating expenses | 3,371,987 | 2,361,776 |
Loss from operations | (3,441,454) | (2,336,107) |
Net loss | (4,332,329) | $ (2,832,202) |
Cannabis [Member] | ||
Revenues | 16,084 | |
Cost of sales | 85,551 | |
Gross profit (loss) | (69,467) | |
Operating expenses | (3,371,070) | $ (2,323,899) |
Loss from operations | (3,440,537) | $ (2,323,899) |
Other income (expense) | (273,220) | |
Net loss | (3,713,757) | $ (2,323,899) |
Microscopy [Member] | ||
Revenues | 395,718 | 485,870 |
Cost of sales | 360,652 | 297,529 |
Gross profit (loss) | 35,066 | 188,341 |
Operating expenses | (654,001) | (685,008) |
Loss from operations | (618,935) | (496,667) |
Other income (expense) | 363 | (11,636) |
Net loss | $ (618,572) | $ (508,303) |
Segment Operating Results - S70
Segment Operating Results - Schedule of Segment Operating Results Net Assets (Details) - USD ($) | Sep. 30, 2015 | Sep. 30, 2014 |
Corporate [Member] | ||
Net assets | $ 362,513 | $ 3,907,777 |
Cannabis [Member] | ||
Net assets | 1,470,902 | 1,017,680 |
Microscopy [Member] | ||
Net assets | $ 182,299 | $ 561,442 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Dec. 21, 2015 | Nov. 23, 2015 | Nov. 20, 2015 | Oct. 29, 2015 | Oct. 08, 2015 | Oct. 01, 2015 | Jun. 19, 2015 | Jun. 01, 2015 | Oct. 20, 2014 | May. 14, 2014 | Mar. 31, 2015 | Jun. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | Apr. 19, 2014 |
Common stock issued for services, shares | 25,000 | |||||||||||||||
Warrants exercise price per share | $ 0.36 | |||||||||||||||
Stock option exercise price per share | $ 0.33 | $ 0.40 | $ 3.30 | $ 3.30 | $ (3.30) | |||||||||||
Fair value assumption of volatility rate | 237.00% | 247.00% | 254.00% | 104.00% | ||||||||||||
Fair value of stock option | $ 224,012 | $ 298,813 | ||||||||||||||
Number of common stock shares issued during the period | 4,420,000 | 40,000 | ||||||||||||||
Percentage of outstanding shares of common stock | 33.34% | 100.00% | ||||||||||||||
Maximum [Member] | ||||||||||||||||
Warrants exercise price per share | $ 0.85 | |||||||||||||||
Minimum [Member] | ||||||||||||||||
Warrants exercise price per share | $ 0.40 | |||||||||||||||
Subsequent Event [Member] | ||||||||||||||||
Number of common stock shares sold during the period | 166,667 | 100,000 | ||||||||||||||
Number of warrants units sold during the period | 166,667 | 100,000 | ||||||||||||||
Warrants exercise price per share | $ 0.30 | $ 0.40 | ||||||||||||||
Warrants period | 36 months | 36 months | ||||||||||||||
Proceeds from sale of common stock | $ 25,000 | $ 20,000 | ||||||||||||||
Proceeds from sale of warrants | $ 25,000 | $ 20,000 | ||||||||||||||
Fair value assumption of call option value | $ 0.1734 | |||||||||||||||
Subsequent Event [Member] | Series A Preferred Stock [Member] | ||||||||||||||||
Number of converted shares of convertible preferred stock, shares | 100,000 | 120,000 | ||||||||||||||
Number of shares converted into common stock | 500,000 | 600,000 | ||||||||||||||
Number of preferred stock shares cancellation during | 60,000 | |||||||||||||||
Subsequent Event [Member] | Joseph Bianco [Member] | ||||||||||||||||
Agreement initial term | 15 months | |||||||||||||||
Monthly fees | $ 4,000 | |||||||||||||||
Deferred fee | $ 2,000 | |||||||||||||||
Common stock issued for services, shares | 500,000 | |||||||||||||||
Subsequent Event [Member] | Board of Directors [Member] | ||||||||||||||||
Number of common stock options granted fully vested shares | 500,000 | |||||||||||||||
Options exercisable period | 3 years | |||||||||||||||
Stock option exercise price per share | $ 0.181 | |||||||||||||||
Fair value assumption of volatility rate | 234.00% | |||||||||||||||
Fair value of stock option | $ 86,708 | |||||||||||||||
Subsequent Event [Member] | Steven D. Barbee [Member] | ||||||||||||||||
Number of warrants purchase of common stock shares during the period | 3,000,000 | |||||||||||||||
Indebtedness owned amount | $ 18,000 | |||||||||||||||
Subsequent Event [Member] | Steven D. Barbee [Member] | Maximum [Member] | ||||||||||||||||
Warrants exercise price per share | $ 0.10 | |||||||||||||||
Subsequent Event [Member] | Steven D. Barbee [Member] | Minimum [Member] | ||||||||||||||||
Warrants exercise price per share | $ 0.0333333 | |||||||||||||||
Subsequent Event [Member] | Third Party [Member] | ||||||||||||||||
Number of warrants purchase of common stock shares during the period | 3,000,000 | |||||||||||||||
Number of common stock shares issued during the period | 3,000,000 | |||||||||||||||
Number of common stock purchase value during the period | $ 100,000 | |||||||||||||||
Number of preferred stock shares surrender during the period | 60,000 | |||||||||||||||
Percentage of outstanding shares of common stock | 34.00% |