Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Jun. 30, 2018 | Aug. 13, 2018 | |
Document And Entity Information | ||
Entity Registrant Name | DigiPath,Inc. | |
Entity Central Index Key | 1,502,966 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --09-30 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 41,564,235 | |
Trading Symbol | DIGP | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,018 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Jun. 30, 2018 | Sep. 30, 2017 |
Current assets: | ||
Cash | $ 40,070 | $ 178,177 |
Accounts receivable | 200,867 | 266,613 |
Prepaid expenses | 67,732 | 73,750 |
Deposits | 25,647 | 25,647 |
Total current assets | 334,316 | 544,187 |
Fixed assets, net | 1,007,832 | 1,027,049 |
Total Assets | 1,342,148 | 1,571,236 |
Current liabilities: | ||
Accounts payable | 196,234 | 121,994 |
Accrued expenses | 30,894 | 42,004 |
Deferred revenues | 2,775 | |
Total current liabilities | 229,903 | 163,998 |
Total Liabilities | 229,903 | 163,998 |
Stockholders' Equity: | ||
Series A convertible preferred stock, $0.001 par value, 10,000,000 shares authorized; 1,425,942 and 1,897,942 shares issued and outstanding at June 30, 2018 and September 30, 2017, respectively | 1,426 | 1,898 |
Common stock, $0.001 par value, 90,000,000 shares authorized; 40,897,568 and 35,027,118 shares issued and outstanding at June 30, 2018 and September 30, 2017, respectively | 40,898 | 35,027 |
Additional paid-in capital | 13,946,080 | 12,866,984 |
Accumulated (deficit) | (12,876,159) | (11,496,671) |
Total Stockholders' Equity | 1,112,245 | 1,407,238 |
Total Liabilities and Stockholders' Equity | $ 1,342,148 | $ 1,571,236 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2018 | Sep. 30, 2017 |
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 | 1,425,942 | 1,897,942 |
Series A convertible preferred stock, shares outstanding | 1,425,942 | 1,897,942 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 90,000,000 | 90,000,000 |
Common stock, shares issued | 40,897,568 | 35,027,118 |
Common stock, shares outstanding | 40,897,568 | 35,027,118 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Income Statement [Abstract] | ||||
Revenues | $ 521,772 | $ 389,315 | $ 2,223,630 | $ 1,296,115 |
Cost of sales | 520,888 | 215,729 | 1,563,518 | 640,871 |
Gross profit | 884 | 173,586 | 660,112 | 655,244 |
Operating expenses: | ||||
General and administrative | 360,689 | 300,924 | 1,108,202 | 907,994 |
Professional fees | 228,482 | 279,843 | 964,269 | 745,437 |
Bad debts expense (recoveries) | (45,200) | 4,396 | 53,041 | 23,150 |
Total operating expenses | 543,971 | 585,163 | 2,125,512 | 1,676,581 |
Operating loss | (543,087) | (411,577) | (1,465,400) | (1,021,337) |
Other income: | ||||
Other income | 43,012 | 3,000 | 85,912 | 263,000 |
Total other income | 43,012 | 3,000 | 85,912 | 263,000 |
Net loss | (500,075) | (408,577) | (1,379,488) | (758,337) |
Available-for-sale investments: | ||||
Change in net unrealized loss (net of tax effect) | (9,080) | (2,560) | ||
Comprehensive loss | $ (500,075) | $ (417,657) | $ (1,379,488) | $ (760,897) |
Weighted average number of common shares outstanding - basic and fully diluted | 40,374,897 | 31,542,189 | 38,237,869 | 27,849,386 |
Net loss per share - basic and fully diluted | $ (0.01) | $ (0.01) | $ (0.04) | $ (0.03) |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Cash flows from operating activities | ||
Net loss | $ (1,379,488) | $ (758,337) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Bad debts expense | 53,041 | 30,650 |
Depreciation and amortization expense | 213,225 | 186,922 |
Stock issued for services | 377,204 | 224,294 |
Options and warrants granted for services | 438,683 | 299,760 |
Decrease (increase) in assets: | ||
Accounts receivable | 12,705 | (96,429) |
Prepaid expenses | 6,018 | (48,404) |
Deposits | 14,203 | |
Increase (decrease) in liabilities: | ||
Accounts payable | 74,240 | (3,239) |
Accrued expenses | (11,110) | (33,953) |
Deferred revenues | 2,775 | |
Net cash used in operating activities | (212,707) | (184,533) |
Cash flows from investing activities | ||
Purchase of fixed assets | (194,008) | (136,894) |
Net cash used in investing activities | (194,008) | (136,894) |
Cash flows from financing activities | ||
Proceeds from sale of common stock | 268,608 | 300,000 |
Net cash provided by financing activities | 268,608 | 300,000 |
Net decrease in cash | (138,107) | (21,427) |
Cash - beginning | 178,177 | 135,390 |
Cash - ending | 40,070 | 113,963 |
Supplemental disclosures: | ||
Interest paid | ||
Income taxes paid | ||
Non-cash investing and financing activities: | ||
Net change in unrealized gain (loss) on available-for-sale securities | (2,560) | |
Value of preferred stock converted to common stock | $ 472,000 | $ 1,372,500 |
Organization, Basis of Presenta
Organization, Basis of Presentation and Significant Accounting Policies | 9 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Organization, Basis of Presentation and Significant Accounting Policies | Note 1 – Organization, Basis of Presentation and Significant Accounting Policies Organization 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 industry’s best practices for reliable testing, cannabis education and training, and brings unbiased cannabis news coverage to the cannabis industry. Our business units are described below. Digipath Labs, Inc The National Marijuana News Corp Basis of Presentation The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Intercompany accounts and transactions have been eliminated. The unaudited condensed consolidated financial statements of the Company and the accompanying notes included in this Quarterly Report on Form 10-Q are unaudited. In the opinion of management, all adjustments necessary for a fair presentation of the Condensed Consolidated Financial Statements have been included. Such adjustments are of a normal, recurring nature. The Condensed Consolidated Financial Statements, and the accompanying notes, are prepared in accordance with GAAP and do not contain certain information included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2017. The interim Condensed Consolidated Financial Statements should be read in conjunction with that Annual Report on Form 10-K. Results for the interim periods presented are not necessarily indicative of the results that might be expected for the entire fiscal year. 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 June 30, 2018: State of Name of Entity (1) Incorporation Relationship Digipath, Inc. (2) Nevada Parent Digipath Labs, Inc. Nevada Subsidiary TNM News, Inc. Nevada Subsidiary GroSciences, Inc. (3) Colorado Subsidiary (1) (2) (3) 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 Prior period interest income in the amount of $7,500 has been reclassified to net against the related $7,500 of bad debt expense to conform to the current period presentation. These reclassifications had no impact on net earnings, financial position or cash flows. 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 company’s management organizes segments within the company for making operating decisions and assessing performance. The Company operates as a single segment and will evaluate additional segment disclosure requirements as it expands its operations. Fair Value of Financial Instruments Under FASB ASC 820-10-05, the Financial Accounting Standards Board establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. This Statement reaffirms that fair value is the relevant measurement attribute. The adoption of this standard did not have a material effect on the Company’s financial statements as reflected herein. The carrying amounts of cash, accounts receivable, accounts payable and accrued expenses reported on the balance sheets are estimated by management to approximate fair value primarily due to the short term nature of the instruments. Revenue Recognition Effective January 1, 2018, the Company adopted ASC 606 — Revenue from Contracts with Customers. Under ASC 606, the Company recognizes revenue from the commercial sales of products, licensing agreements and contracts to perform pilot studies by applying the following steps: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract; and (5) recognize revenue when each performance obligation is satisfied. For the comparative periods, revenue has not been adjusted and continues to be reported under ASC 605 — Revenue Recognition. Under ASC 605, revenue is recognized when the following criteria are met: (1) persuasive evidence of an arrangement exists; (2) the performance of service has been rendered to a customer or delivery has occurred; (3) the amount of fee to be paid by a customer is fixed and determinable; and (4) the collectability of the fee is reasonably assured. There was no impact on the Company’s financial statements as a result of adopting ASC 606 for the nine months ended June 30, 2018 and 2017, or the twelve months ended September 30, 2017. Revenue is primarily generated through our subsidiary, Digipath Labs, Inc., which recognizes revenue from the analytical testing of cannabis products to licensed producers and cultivators within the state of Nevada on a determinable fixed fee per test, or panel of tests basis. Revenue from the performance of those services is recognized upon completion of the tests, at which time test results are delivered to the customer, provided collectability of the fee is reasonably assured. We typically require payment within thirty days of the delivery of results. Management estimates an allowance for doubtful accounts based on the aging of its receivables. The Company also recognizes revenue through our subsidiary, TNM News Corp., which primarily recognizes revenue from advertisements through partnered merchants. Payment for ad revenues are received prior to the distribution of the ad campaign, and the revenues are recognized ratably over the campaign. The Company defers any revenue for which the term of the campaign has not yet been realized. To date, these revenues have not been materially significant. 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 counterparty’s 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. Recent Accounting Pronouncements In June 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting In March 2018, the FASB issued ASU No. 2018-05, Income Taxes (Topic 740) - Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 In February 2018, the FASB issued ASU No. 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting 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 | 9 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern | Note 2 – Going Concern As shown in the accompanying condensed consolidated financial statements, the Company has incurred recurring losses from operations resulting in an accumulated deficit of ($12,876,159), and as of June 30, 2018, the Company’s cash on hand may not be sufficient to sustain operations. These factors raise substantial doubt about the Company’s 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 Company’s 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. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Jun. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 3 – Related Party Transactions Stock Based Compensation for Services On June 25, 2018, the Company issued 118,421 shares of common stock to its then CEO for services rendered pursuant to his employment agreement. The aggregate fair value of the common stock was $22,500 based on the closing price of the Company’s common stock on the date of grant, and was expensed over the requisite service period that ended on June 30, 2018. On June 25, 2018, the Company issued 31,579 shares of common stock to its then President and COO for services rendered pursuant to his employment agreement. The aggregate fair value of the common stock was $6,000 based on the closing price of the Company’s common stock on the date of grant, and was expensed over the requisite service period that ended on June 30, 2018. On June 25, 2018, the Company issued 78,947 shares of common stock to its CFO for services rendered pursuant to his employment agreement. The aggregate fair value of the common stock was $15,000 based on the closing price of the Company’s common stock on the date of grant, and was expensed over the requisite service period that ended on June 30, 2018. On March 26, 2018, the Company issued 207,852 shares of common stock to its then CEO for services rendered pursuant to his employment agreement. The aggregate fair value of the common stock was $45,000 based on the closing price of the Company’s common stock on the date of grant, and was expensed over the requisite service period that ended on June 30, 2018. On March 26, 2018, the Company issued 55,427 shares of common stock to its then President and COO for services rendered pursuant to his employment agreement. The aggregate fair value of the common stock was $12,000 based on the closing price of the Company’s common stock on the date of grant, and was expensed over the requisite service period that ended on June 30, 2018. On March 26, 2018, the Company issued 138,568 shares of common stock to its CFO for services rendered pursuant to his employment agreement. The aggregate fair value of the common stock was $30,000 based on the closing price of the Company’s common stock on the date of grant, and was expensed over the requisite service period that ended on June 30, 2018. On December 22, 2017, the Company issued 300,000 shares of common stock to its CFO as a bonus for services rendered. The aggregate fair value of the common stock was $78,828 based on the closing price of the Company’s common stock on the date of grant, and was expensed in full. On December 22, 2017, the Company issued 100,000 shares of common stock to Dr. Alfredo Axtmayer for his service on our Board of Directors. The aggregate fair value of the common stock was $26,276 based on the closing price of the Company’s common stock on the date of grant, and was expensed in full. On December 22, 2017, we granted fully vested options to purchase 500,000 shares of common stock as compensation for services to our President and COO. The options are exercisable over a ten year period at an exercise price of $0.27 per share. The estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 112% and a call option value of $0.2094, was $104,698. The options were expensed over the vesting period, resulting in $104,698 of stock based compensation expense during the nine months ended June 30, 2018. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Jun. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Note 4 – 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 Company’s 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 June 30, 2018 and September 30, 2017, respectively: Fair Value Measurements at June 30, 2018 Level 1 Level 2 Level 3 Assets Cash $ 40,070 $ - $ - Total assets 40,070 - - Liabilities Total liabilities - - - $ 40,070 $ - $ - Fair Value Measurements at September 30, 2017 Level 1 Level 2 Level 3 Assets Cash $ 178,177 $ - $ - Total assets 178,177 - - Liabilities Total liabilities - - - $ 178,177 $ - $ - 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 nine months ended June 30, 2018 or the year ended September 30, 2017. |
Accounts Receivable
Accounts Receivable | 9 Months Ended |
Jun. 30, 2018 | |
Receivables [Abstract] | |
Accounts Receivable | Note 5 – Accounts Receivable Accounts receivable was $200,867 and $266,613 at June 30, 2018 and September 30, 2017, respectively, net of allowance for doubtful accounts of $85,221 and $32,180 at June 30, 2018 and September 30, 2017, respectively. |
Fixed Assets
Fixed Assets | 9 Months Ended |
Jun. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Fixed Assets | Note 6 – Fixed Assets Fixed assets consist of the following at June 30, 2018 and September 30, 2017: June 30, September 30, 2018 2017 Software $ 123,492 $ 121,617 Office equipment 52,520 36,080 Furniture and fixtures 28,486 14,285 Lab equipment 1,099,942 938,450 Leasehold improvements 489,147 489,147 1,793,587 1,599,579 Less: accumulated depreciation (785,755 ) (572,530 ) Total $ 1,007,832 $ 1,027,049 Depreciation and amortization expense totaled $213,225 and $186,922 for the nine months ended June 30, 2018 and 2017, respectively. |
Changes in Stockholders' Equity
Changes in Stockholders' Equity | 9 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Changes in Stockholders' Equity | Note 7 - Changes in Stockholders’ Equity Convertible 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”), with the remaining 4,000,000 shares available for designation from time to time by the Board as set forth below. As of June 30, 2018, there were 1,425,942 shares of Series A Preferred issued and outstanding. The Board of Directors is authorized to determine any number of series into which the undesignated shares of preferred stock may be divided and to determine the rights, preferences, privileges and restrictions granted to any series of the preferred stock. Shares of Series A Preferred are convertible into common stock at a fixed conversion rate of $0.20 per share. The conversion price is adjustable in the event of stock splits and other adjustments in the Company’s capitalization, and in the event of certain negative actions undertaken by the Company. At the current conversion price, the 1,425,942 shares of Series A Preferred outstanding at June 30, 2018 are convertible into 7,129,710 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. Preferred Stock Conversions During the three months ended March 31, 2018, a total of 322,000 Series A Preferred shares were converted into 1,610,000 shares of common stock. The stock was converted in accordance with the conversion terms; therefore no gain or loss has been recognized. During the three months ended December 31, 2017, a total of 150,000 Series A Preferred shares 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 40,897,568 shares were issued and outstanding as of June 30, 2018. Common Stock Sales On April 13, 2018, the Company sold 14 units, consisting of an aggregate of 140,000 shares of its common stock and warrants to purchase 70,000 shares of common stock, exercisable at $0.30 per share over a thirty six month period, in exchange for total proceeds of $25,200. The proceeds received were allocated between the common stock and warrants on a relative fair value basis. On April 12, 2018, the Company sold 28 units, consisting of an aggregate of 280,000 shares of its common stock and warrants to purchase 140,000 shares of common stock, exercisable at $0.30 per share over a thirty six month period, in exchange for total proceeds of $50,400. The proceeds received were allocated between the common stock and warrants on a relative fair value basis. On April 10, 2018, the Company sold 27.78 units, consisting of an aggregate of 277,778 shares of its common stock and warrants to purchase 138,889 shares of common stock, exercisable at $0.30 per share over a thirty six month period, in exchange for total proceeds of $50,000. The proceeds received were allocated between the common stock and warrants on a relative fair value basis. On December 20, 2017, the Company sold 10 units, consisting of an aggregate of 100,000 shares of its common stock and warrants to purchase 50,000 shares of common stock, exercisable at $0.26 per share over a thirty six month period, in exchange for total proceeds of $18,000. The proceeds received were allocated between the common stock and warrants on a relative fair value basis. On December 14, 2017, the Company sold 13.89 units, consisting of an aggregate of 138,889 shares of its common stock and warrants to purchase 69,445 shares of common stock, exercisable at $0.26 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 December 14, 2017, the Company sold 55.56 units, consisting of an aggregate of 555,600 shares of its common stock and warrants to purchase 277,800 shares of common stock, exercisable at $0.26 per share over a thirty six month period, in exchange for total proceeds of $100,008. The proceeds received were allocated between the common stock and warrants on a relative fair value basis. Exercise of Options On January 3, 2018, two option holders exercised options to purchase a total of 500,000 shares of common stock at $0.181 per share on a cashless basis, resulting in the issuance of 317,172 shares of common stock. On January 2, 2018, an option holder exercised options to purchase 37,500 shares of common stock at $0.22 per share on a cashless basis, resulting in the issuance of 21,000 shares of common stock. Exercise of Warrants On January 3, 2018, a warrant holder exercised warrants to purchase 71,428 shares of common stock at $0.26 per share on a cashless basis, resulting in the issuance of 34,285 shares of common stock. Common Stock Issued for Services On June 25, 2018, the Company issued 118,421 shares of common stock to its then CEO for services rendered pursuant to his employment agreement. The aggregate fair value of the common stock was $22,500 based on the closing price of the Company’s common stock on the date of grant, and was expensed over the requisite service period that ended on June 30, 2018. On June 25, 2018, the Company issued 31,579 shares of common stock to its then President and COO for services rendered pursuant to his employment agreement. The aggregate fair value of the common stock was $6,000 based on the closing price of the Company’s common stock on the date of grant, and was expensed over the requisite service period that ended on June 30, 2018. On June 25, 2018, the Company issued 78,947 shares of common stock to its CFO for services rendered pursuant to his employment agreement. The aggregate fair value of the common stock was $15,000 based on the closing price of the Company’s common stock on the date of grant, and was expensed over the requisite service period that ended on June 30, 2018. On June 25, 2018, the Company issued 131,579 shares of common stock to a consultant for business development services. The fair value of the common stock was $25,000 based on the closing price of the Company’s common stock on the date of grant, and was expensed over the requisite service period that ended on June 30, 2018. On June 25, 2018, the Company issued 100,000 shares of common stock to another consultant for business development services. The fair value of the common stock was $19,000 based on the closing price of the Company’s common stock on the date of grant, and was expensed over the requisite service period that ended on June 30, 2018. On March 26, 2018, the Company issued 207,852 shares of common stock to its then CEO for services rendered pursuant to his employment agreement. The aggregate fair value of the common stock was $45,000 based on the closing price of the Company’s common stock on the date of grant, and was expensed over the requisite service period that ended on March 31, 2018. On March 26, 2018, the Company issued 55,427 shares of common stock to its then President and COO for services rendered pursuant to his employment agreement. The aggregate fair value of the common stock was $12,000 based on the closing price of the Company’s common stock on the date of grant, and was expensed over the requisite service period that ended on March 31, 2018. On March 26, 2018, the Company issued 138,568 shares of common stock to its CFO for services rendered pursuant to his employment agreement. The aggregate fair value of the common stock was $30,000 based on the closing price of the Company’s common stock on the date of grant, and was expensed over the requisite service period that ended on March 31, 2018. On March 26, 2018, the Company issued 69,284 shares of common stock to a consultant for business development services. The fair value of the common stock was $15,000 based on the closing price of the Company’s common stock on the date of grant, and was expensed over the requisite service period that ended on March 31, 2018. On December 22, 2017, the Company issued 300,000 shares of common stock to its CFO as a bonus for services rendered. The aggregate fair value of the common stock was $78,828 based on the closing price of the Company’s common stock on the date of grant, and was expensed in full. On December 22, 2017, the Company issued 100,000 shares of common stock to Dr. Alfredo Axtmayer for his service on our Board of Directors. The aggregate fair value of the common stock was $26,276 based on the closing price of the Company’s common stock on the date of grant, and was expensed in full. On November 29, 2017, a total of 314,069 shares of common stock were issued to three consultants that were engaged to assist the Company with acquisition activities. The aggregate fair value of the common stock was $82,600 based on the closing price of the Company’s common stock on the date of grant, and was expensed over the requisite service period that ended on December 31, 2017. Amortization of Stock Options A total of $438,683 of stock-based compensation expense was recognized from the amortization of options over their vesting period during the nine months ended June 30, 2018. |
Common Stock Options
Common Stock Options | 9 Months Ended |
Jun. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Common Stock Options | Note 8 – Common Stock Options Stock Incentive Plan On June 21, 2016, we amended and restated our 2012 Stock Incentive Plan (the “2012 Plan”), which was originally adopted on March 5, 2012 and previously amended on May 20, 2014. As amended, the 2012 Plan provides for the issuance of up to 11,500,000 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. 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. A total of 8,352,500 options were outstanding as of June 30, 2018. During the three months ended June 30, 2018, options to purchase an aggregate total of 40,000 shares of common stock at a weighted average exercise price of $0.27 per share expired, during the three months ended March 31, 2018, options to purchase an aggregate total of 55,000 shares of common stock at a weighted average exercise price of $0.24 per share expired, and during the three months ended December 31, 2017, options to purchase an aggregate total of 1,110,000 shares of common stock at a weighted average exercise price of $0.40 per share also expired. On January 3, 2018, two option holders exercised options to purchase a total of 500,000 shares of common stock at $0.181 per share on a cashless basis, resulting in the issuance of 317,172 shares of common stock. On January 2, 2018, an option holder exercised options to purchase 37,500 shares of common stock at $0.22 per share on a cashless basis, resulting in the issuance of 21,000 shares of common stock. On December 22, 2017, we granted fully vested options to purchase 500,000 shares of common stock as compensation for services to our then President and COO. The options are exercisable over a ten year period at an exercise price of $0.27 per share. The estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 112% and a call option value of $0.2094, was $104,698. The options were expensed over the vesting period, resulting in $104,698 of stock based compensation expense during the nine months ended June 30, 2018. On November 29, 2017, we granted fully vested options to purchase 100,000 shares of common stock as compensation for services to our Chief Scientist. The options are exercisable over a ten year period at an exercise price of $0.27 per share. The estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 112% and a call option value of $0.21, was $21,004. The options were expensed over the vesting period, resulting in $21,004 of stock based compensation expense during the nine months ended June 30, 2018. On November 29, 2017, we granted fully vested options to purchase an aggregate of 205,000 shares of common stock as compensation for services to a total of ten of our employees. The options are exercisable over a ten year period at an exercise price of $0.27 per share. The estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 112% and a call option value of $0.21, was $43,057. The options were expensed over the vesting period, resulting in $43,057 of stock based compensation expense during the nine months ended June 30, 2018. |
Common Stock Warrants
Common Stock Warrants | 9 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Common Stock Warrants | Note 9 – Common Stock Warrants Warrants to purchase a total of 6,117,128 shares of common stock were outstanding as of June 30, 2018. On January 3, 2018, a warrant holder exercised warrants to purchase 71,428 shares of common stock at $0.26 per share on a cashless basis, resulting in the issuance of 34,285 shares of common stock. On December 31, 2017, warrants to purchase 200,000 shares of common stock at $0.30 per share expired, and on December 30, 2017, warrants to purchase another 300,000 shares of common stock at $0.45 per share also expired. Warrants to purchase an aggregate 348,889 shares of common stock at $0.30 per share over a 36 month period were issued at various dates in April of 2018 pursuant to unit offerings for the sale of an aggregate of 697,778 shares of common stock in exchange for total proceeds of $125,600. Warrants to purchase 50,000 shares of common stock at $0.26 per share over a 36 month period were issued on December 20, 2017 pursuant to a unit offering for the sale of 100,000 shares of common stock in exchange for proceeds of $18,000, and warrants to purchase a total of 347,245 shares of common stock at $0.26 per share over a 36 month period were issued on December 14, 2017 pursuant to two unit offerings for the sale of an aggregate 694,489 shares of common stock in exchange for total proceeds of $125,008. |
Other Income
Other Income | 9 Months Ended |
Jun. 30, 2018 | |
Other Income and Expenses [Abstract] | |
Other Income | Note 10 – Other Income Other income for the nine months ended June 30, 2018 and 2017 consisted of the following: June 30, 2018 2017 Settlement income on license agreement $ - $ 250,000 Rental income on subleases 57,600 3,000 Restitution income 28,312 10,000 $ 85,912 $ 263,000 |
Income Tax
Income Tax | 9 Months Ended |
Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Tax | Note 11 - 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 nine months ended June 30, 2018 and the year ended September 30, 2017, 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 June 30, 2018, the Company had approximately $7,787,000 of federal net operating losses. The net operating loss carry forwards, if not utilized, will begin to expire in 2031. Based on the available objective evidence, including the Company’s 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 June 30, 2018 and September 30, 2017, respectively. In accordance with FASB ASC 740, the Company has evaluated its tax positions and determined there are no uncertain tax positions. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Jun. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 12 – Subsequent Events Common Stock Sales On July 11, 2018, the Company sold 66.67 units, consisting of 666,667 shares of its common stock and warrants to purchase 333,334 shares of common stock, exercisable at $0.30 per share over a thirty six month period, in exchange for total proceeds of $100,000. The proceeds received were allocated between the common stock and warrants on a relative fair value basis. |
Organization, Basis of Presen18
Organization, Basis of Presentation and Significant Accounting Policies (Policies) | 9 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Organization | Organization 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 industry’s best practices for reliable testing, cannabis education and training, and brings unbiased cannabis news coverage to the cannabis industry. Our business units are described below. Digipath Labs, Inc The National Marijuana News Corp |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Intercompany accounts and transactions have been eliminated. The unaudited condensed consolidated financial statements of the Company and the accompanying notes included in this Quarterly Report on Form 10-Q are unaudited. In the opinion of management, all adjustments necessary for a fair presentation of the Condensed Consolidated Financial Statements have been included. Such adjustments are of a normal, recurring nature. The Condensed Consolidated Financial Statements, and the accompanying notes, are prepared in accordance with GAAP and do not contain certain information included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2017. The interim Condensed Consolidated Financial Statements should be read in conjunction with that Annual Report on Form 10-K. Results for the interim periods presented are not necessarily indicative of the results that might be expected for the entire fiscal year. |
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 June 30, 2018: State of Name of Entity (1) Incorporation Relationship Digipath, Inc. (2) Nevada Parent Digipath Labs, Inc. Nevada Subsidiary TNM News, Inc. Nevada Subsidiary GroSciences, Inc. (3) Colorado Subsidiary (1) (2) (3) 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 Prior period interest income in the amount of $7,500 has been reclassified to net against the related $7,500 of bad debt expense to conform to the current period presentation. These reclassifications had no impact on net earnings, financial position or cash flows. |
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 company’s management organizes segments within the company for making operating decisions and assessing performance. The Company operates as a single segment and will evaluate additional segment disclosure requirements as it expands its operations. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Under FASB ASC 820-10-05, the Financial Accounting Standards Board establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. This Statement reaffirms that fair value is the relevant measurement attribute. The adoption of this standard did not have a material effect on the Company’s financial statements as reflected herein. The carrying amounts of cash, accounts receivable, accounts payable and accrued expenses reported on the balance sheets are estimated by management to approximate fair value primarily due to the short term nature of the instruments. |
Revenue Recognition | Revenue Recognition Effective January 1, 2018, the Company adopted ASC 606 — Revenue from Contracts with Customers. Under ASC 606, the Company recognizes revenue from the commercial sales of products, licensing agreements and contracts to perform pilot studies by applying the following steps: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract; and (5) recognize revenue when each performance obligation is satisfied. For the comparative periods, revenue has not been adjusted and continues to be reported under ASC 605 — Revenue Recognition. Under ASC 605, revenue is recognized when the following criteria are met: (1) persuasive evidence of an arrangement exists; (2) the performance of service has been rendered to a customer or delivery has occurred; (3) the amount of fee to be paid by a customer is fixed and determinable; and (4) the collectability of the fee is reasonably assured. There was no impact on the Company’s financial statements as a result of adopting ASC 606 for the nine months ended June 30, 2018 and 2017, or the twelve months ended September 30, 2017. Revenue is primarily generated through our subsidiary, Digipath Labs, Inc., which recognizes revenue from the analytical testing of cannabis products to licensed producers and cultivators within the state of Nevada on a determinable fixed fee per test, or panel of tests basis. Revenue from the performance of those services is recognized upon completion of the tests, at which time test results are delivered to the customer, provided collectability of the fee is reasonably assured. We typically require payment within thirty days of the delivery of results. Management estimates an allowance for doubtful accounts based on the aging of its receivables. The Company also recognizes revenue through our subsidiary, TNM News Corp., which primarily recognizes revenue from advertisements through partnered merchants. Payment for ad revenues are received prior to the distribution of the ad campaign, and the revenues are recognized ratably over the campaign. The Company defers any revenue for which the term of the campaign has not yet been realized. To date, these revenues have not been materially significant. |
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 counterparty’s 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. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In June 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting In March 2018, the FASB issued ASU No. 2018-05, Income Taxes (Topic 740) - Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 In February 2018, the FASB issued ASU No. 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting 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. |
Organization, Basis of Presen19
Organization, Basis of Presentation and Significant Accounting Policies (Tables) | 9 Months Ended |
Jun. 30, 2018 | |
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 June 30, 2018: State of Name of Entity (1) Incorporation Relationship Digipath, Inc. (2) Nevada Parent Digipath Labs, Inc. Nevada Subsidiary TNM News, Inc. Nevada Subsidiary GroSciences, Inc. (3) Colorado Subsidiary (1) (2) (3) |
Fair Value of Financial Instr20
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Jun. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Summary of Financial Instruments at Fair Value on Recurring Basis | The following schedule summarizes the valuation of financial instruments at fair value on a recurring basis in the balance sheets as of June 30, 2018 and September 30, 2017, respectively: Fair Value Measurements at June 30, 2018 Level 1 Level 2 Level 3 Assets Cash $ 40,070 $ - $ - Total assets 40,070 - - Liabilities Total liabilities - - - $ 40,070 $ - $ - Fair Value Measurements at September 30, 2017 Level 1 Level 2 Level 3 Assets Cash $ 178,177 $ - $ - Total assets 178,177 - - Liabilities Total liabilities - - - $ 178,177 $ - $ - |
Fixed Assets (Tables)
Fixed Assets (Tables) | 9 Months Ended |
Jun. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Fixed Assets | Fixed assets consist of the following at June 30, 2018 and September 30, 2017: June 30, September 30, 2018 2017 Software $ 123,492 $ 121,617 Office equipment 52,520 36,080 Furniture and fixtures 28,486 14,285 Lab equipment 1,099,942 938,450 Leasehold improvements 489,147 489,147 1,793,587 1,599,579 Less: accumulated depreciation (785,755 ) (572,530 ) Total $ 1,007,832 $ 1,027,049 |
Other Income (Tables)
Other Income (Tables) | 9 Months Ended |
Jun. 30, 2018 | |
Other Income and Expenses [Abstract] | |
Schedule of Other Income | Other income for the nine months ended June 30, 2018 and 2017 consisted of the following: June 30, 2018 2017 Settlement income on license agreement $ - $ 250,000 Rental income on subleases 57,600 3,000 Restitution income 28,312 10,000 $ 85,912 $ 263,000 |
Organization, Basis of Presen23
Organization, Basis of Presentation and Significant Accounting Policies (Details Narrative) | 9 Months Ended |
Jun. 30, 2018USD ($)Segment | |
Number of reportable segment | Segment | 1 |
Bad Debt [Member] | |
Prior period reclassification net value | $ 7,500 |
Interest Income [Member] | |
Prior period reclassification net value | $ 7,500 |
Schedule of Entities Under Comm
Schedule of Entities Under Common Control and Ownership (Details) - Entities Under Common Control and Ownership [Member] | 9 Months Ended | |
Jun. 30, 2018 | ||
Name of Entity | Digipath, Inc. | [1],[2] |
State of Incorporation | Nevada | [2] |
Relationship | Parent | [2] |
Name of Entity | Digipath Labs, Inc. | [1] |
State of Incorporation | Nevada | |
Relationship | Subsidiary | |
Name of Entity | TNM News, Inc. | [1] |
State of Incorporation | Nevada | |
Relationship | Subsidiary | |
Name of Entity | GroSciences, Inc. | [1],[3] |
State of Incorporation | Colorado | [3] |
Relationship | Subsidiary | [3] |
[1] | All entities are in the form of a corporation. | |
[2] | Holding company, which owns each of the wholly-owned subsidiaries. All subsidiaries shown above are wholly-owned by Digipath, Inc., the parent company. | |
[3] | Entity formed for prospective purposes, but has not incurred any income or expenses to date. |
Going Concern (Details Narrativ
Going Concern (Details Narrative) - USD ($) | Jun. 30, 2018 | Sep. 30, 2017 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accumulated deficit | $ (12,876,159) | $ (11,496,671) |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | Jun. 25, 2018 | Mar. 26, 2018 | Dec. 22, 2017 | Jun. 30, 2018 |
Number of common stock shares issued for services | 1,010,000 | |||
Chief Executive Officer [Member] | ||||
Number of common stock shares issued for services | 118,421 | 207,852 | ||
Number of common stock issued for services | $ 22,500 | $ 45,000 | ||
President and Chief Operating Officer [Member] | ||||
Number of common stock shares issued for services | 31,579 | 55,427 | ||
Number of common stock issued for services | $ 6,000 | $ 12,000 | ||
Number of common stock shares compensation issued for services | 500,000 | |||
Options exercisable description | The options are exercisable over a ten year period | |||
Common stock exercise price | $ 0.27 | |||
Fair value measurements, volatility rate | 112.00% | |||
Call option value | $ 0.2094 | |||
Stock based compensation expense | $ 104,698 | |||
Chief Financial Officer [Member] | ||||
Number of common stock shares issued for services | 78,947 | 138,568 | 300,000 | |
Number of common stock issued for services | $ 15,000 | $ 30,000 | $ 78,828 | |
Dr. Alfredo Axtmayer [Member] | ||||
Number of common stock shares issued for services | 100,000 | |||
Number of common stock issued for services | $ 26,276 |
Fair Value of Financial Instr27
Fair Value of Financial Instruments - Summary of Financial Instruments at Fair Value on Recurring Basis (Details) - USD ($) | Jun. 30, 2018 | Sep. 30, 2017 |
Level 1 [Member] | ||
Cash | $ 40,070 | $ 178,177 |
Total assets | 40,070 | 178,177 |
Total liabilities | ||
Total | 40,070 | 178,177 |
Level 2 [Member] | ||
Cash | ||
Total assets | ||
Total liabilities | ||
Total | ||
Level 3 [Member] | ||
Cash | ||
Total assets | ||
Total liabilities | ||
Total |
Accounts Receivable (Details Na
Accounts Receivable (Details Narrative) - USD ($) | Jun. 30, 2018 | Sep. 30, 2017 |
Receivables [Abstract] | ||
Accounts receivable | $ 200,867 | $ 266,613 |
Allowance for doubtful accounts | $ 85,221 | $ 32,180 |
Fixed Assets (Details Narrative
Fixed Assets (Details Narrative) - USD ($) | 9 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation and amortization expense | $ 213,225 | $ 186,922 |
Fixed Assets - Schedule of Fixe
Fixed Assets - Schedule of Fixed Assets (Details) - USD ($) | Jun. 30, 2018 | Sep. 30, 2017 |
Property, Plant and Equipment [Abstract] | ||
Software | $ 123,492 | $ 121,617 |
Office equipment | 52,520 | 36,080 |
Furniture and fixtures | 28,486 | 14,285 |
Lab equipment | 1,099,942 | 938,450 |
Leasehold improvements | 489,147 | 489,147 |
Fixed assets, gross | 1,793,587 | 1,599,579 |
Less: accumulated depreciation | (785,755) | (572,530) |
Total | $ 1,007,832 | $ 1,027,049 |
Changes in Stockholders' Equi31
Changes in Stockholders' Equity (Details Narrative) - USD ($) | Jun. 25, 2018 | Apr. 13, 2018 | Apr. 12, 2018 | Apr. 10, 2018 | Mar. 26, 2018 | Jan. 03, 2018 | Jan. 02, 2018 | Dec. 22, 2017 | Dec. 20, 2017 | Dec. 14, 2017 | Nov. 29, 2017 | Apr. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 30, 2017 | Sep. 30, 2017 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | 10,000,000 | ||||||||||||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||||||||
Preferred stock, shares issued | 1,425,942 | 1,425,942 | 1,897,942 | ||||||||||||||||
Preferred stock, shares outstanding | 1,425,942 | 1,425,942 | 1,897,942 | ||||||||||||||||
Common stock par value | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||||||||
Common stock authorized | 90,000,000 | 90,000,000 | 90,000,000 | ||||||||||||||||
Common stock, shares issued | 40,897,568 | 40,897,568 | 35,027,118 | ||||||||||||||||
Common Stock, shares outstanding | 40,897,568 | 40,897,568 | 35,027,118 | ||||||||||||||||
Number of common stock sold | 14 | 28 | 27.78 | 10 | 13.89 | ||||||||||||||
Number of warrant to purchase of common stock shares | 71,428 | 200,000 | 300,000 | ||||||||||||||||
Warrants exercise price per share | $ 0.26 | $ 0.30 | $ 0.45 | ||||||||||||||||
Proceeds from sale of common stock | $ 268,608 | $ 300,000 | |||||||||||||||||
Share issued in exercise stock option | 37,500 | 40,000 | 55,000 | 1,110,000 | |||||||||||||||
Stock option exercise price per share | $ 0.22 | $ 0.27 | $ 0.24 | $ 0.40 | |||||||||||||||
Common stock shares issued | 34,285 | 21,000 | |||||||||||||||||
Number of common stock issued for services | 1,010,000 | ||||||||||||||||||
Stock-based compensation expense | $ 438,683 | ||||||||||||||||||
Three Consultants [Member] | |||||||||||||||||||
Number of common stock issued for services | 314,069 | ||||||||||||||||||
Common stock issued for services | $ 82,600 | ||||||||||||||||||
Chief Executive Officer [Member] | |||||||||||||||||||
Number of common stock issued for services | 118,421 | 207,852 | |||||||||||||||||
Common stock issued for services | $ 22,500 | $ 45,000 | |||||||||||||||||
President and Chief Operating Officer [Member] | |||||||||||||||||||
Stock option exercise price per share | $ 0.27 | ||||||||||||||||||
Number of common stock issued for services | 31,579 | 55,427 | |||||||||||||||||
Common stock issued for services | $ 6,000 | $ 12,000 | |||||||||||||||||
Chief Financial Officer [Member] | |||||||||||||||||||
Number of common stock issued for services | 78,947 | 138,568 | 300,000 | ||||||||||||||||
Common stock issued for services | $ 15,000 | $ 30,000 | $ 78,828 | ||||||||||||||||
Consultant One [Member] | |||||||||||||||||||
Number of common stock issued for services | 131,579 | ||||||||||||||||||
Common stock issued for services | $ 25,000 | ||||||||||||||||||
Consultant Two [Member] | |||||||||||||||||||
Number of common stock issued for services | 100,000 | ||||||||||||||||||
Common stock issued for services | $ 19,000 | ||||||||||||||||||
Consultant [Member] | |||||||||||||||||||
Number of common stock issued for services | 69,284 | ||||||||||||||||||
Common stock issued for services | $ 15,000 | ||||||||||||||||||
Dr. Alfredo Axtmayer [Member] | |||||||||||||||||||
Number of common stock issued for services | 100,000 | ||||||||||||||||||
Common stock issued for services | $ 26,276 | ||||||||||||||||||
Series A Convertible Preferred Stock [Member] | |||||||||||||||||||
Preferred stock, shares designated | 6,000,000 | 6,000,000 | |||||||||||||||||
Preferred stock, shares designated remaining | 4,000,000 | 4,000,000 | |||||||||||||||||
Series A Preferred Stock [Member] | |||||||||||||||||||
Preferred stock, shares issued | 1,425,942 | 1,425,942 | |||||||||||||||||
Preferred stock, shares outstanding | 1,425,942 | 1,425,942 | |||||||||||||||||
Preferred stock convertible into common stock at fixed conversion price per share | $ 0.20 | $ 0.20 | |||||||||||||||||
Preferred stock convertible into common stock shares | 7,129,710 | 7,129,710 | |||||||||||||||||
Percentage of equity beneficial ownership | 4.99% | 4.99% | |||||||||||||||||
Stock conversion, shares converted | 322,000 | 150,000 | |||||||||||||||||
Stock conversion, shares issued | 1,610,000 | 750,000 | |||||||||||||||||
Common Stock [Member] | |||||||||||||||||||
Number of common stock sold | 140,000 | 280,000 | 277,778 | 100,000 | 138,889 | 697,778 | |||||||||||||
Number of warrant to purchase of common stock shares | 70,000 | 140,000 | 138,889 | 50,000 | 69,445 | 348,889 | |||||||||||||
Warrants exercise price per share | $ 0.30 | $ 0.30 | $ 0.30 | $ 0.26 | $ 0.26 | $ .30 | |||||||||||||
Proceeds from sale of common stock | $ 25,200 | $ 50,400 | $ 50,000 | $ 18,000 | $ 25,000 | ||||||||||||||
Common Stock Unit [Member] | |||||||||||||||||||
Number of common stock sold | 55.56 | ||||||||||||||||||
Common Stock One [Member] | |||||||||||||||||||
Number of common stock sold | 555,600 | ||||||||||||||||||
Number of warrant to purchase of common stock shares | 277,800 | ||||||||||||||||||
Warrants exercise price per share | $ 0.26 | ||||||||||||||||||
Proceeds from sale of common stock | $ 100,008 | ||||||||||||||||||
Two Option Holder [Member] | |||||||||||||||||||
Share issued in exercise stock option | 500,000 | 37,500 | |||||||||||||||||
Stock option exercise price per share | $ 0.181 | $ 0.22 | |||||||||||||||||
Common stock shares issued | 317,172 | 21,000 |
Common Stock Options (Details N
Common Stock Options (Details Narrative) - USD ($) | Jun. 25, 2018 | Mar. 26, 2018 | Jan. 03, 2018 | Jan. 02, 2018 | Dec. 22, 2017 | Nov. 29, 2017 | Jun. 21, 2016 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Jun. 30, 2018 |
Number of options outstanding | 8,352,500 | 8,352,500 | |||||||||
Share issued in exercise stock option | 37,500 | 40,000 | 55,000 | 1,110,000 | |||||||
Stock option exercise price per share | $ 0.22 | $ 0.27 | $ 0.24 | $ 0.40 | |||||||
Common stock shares issued | 34,285 | 21,000 | |||||||||
Option to purchase shares of common stock for services | 1,010,000 | ||||||||||
Ten Employees [Member] | |||||||||||
Stock option exercise price per share | $ 0.27 | ||||||||||
Stock options exercisable period | 10 years | ||||||||||
Number of shares granted fully vested common stock option | 205,000 | ||||||||||
Volatility rate | 112.00% | ||||||||||
Value of call option per share | $ 0.21 | ||||||||||
Value of option | $ 43,057 | ||||||||||
Stock based compensation expense | $ 43,057 | ||||||||||
President and Chief Operating Officer [Member] | |||||||||||
Stock option exercise price per share | $ 0.27 | ||||||||||
Option to purchase shares of common stock for services | 31,579 | 55,427 | |||||||||
Stock options exercisable period | 10 years | ||||||||||
Number of shares granted fully vested common stock option | 500,000 | ||||||||||
Volatility rate | 112.00% | ||||||||||
Value of call option per share | $ 0.2094 | ||||||||||
Value of option | $ 104,698 | ||||||||||
Stock based compensation expense | 104,698 | ||||||||||
Chief Scientist [Member] | |||||||||||
Stock option exercise price per share | $ 0.27 | ||||||||||
Stock options exercisable period | 10 years | ||||||||||
Number of shares granted fully vested common stock option | 100,000 | ||||||||||
Volatility rate | 112.00% | ||||||||||
Value of call option per share | $ 0.21 | ||||||||||
Value of option | $ 21,004 | ||||||||||
Stock based compensation expense | $ 21,004 | ||||||||||
Two Option Holder [Member] | |||||||||||
Share issued in exercise stock option | 500,000 | 37,500 | |||||||||
Stock option exercise price per share | $ 0.181 | $ 0.22 | |||||||||
Common stock shares issued | 317,172 | 21,000 | |||||||||
2012 Stock Incentive Plan [Member] | |||||||||||
Number of shares issued under stock plan | 11,500,000 |
Common Stock Warrants (Details
Common Stock Warrants (Details Narrative) - USD ($) | Apr. 13, 2018 | Apr. 12, 2018 | Apr. 10, 2018 | Jan. 03, 2018 | Jan. 02, 2018 | Dec. 20, 2017 | Dec. 20, 2017 | Dec. 14, 2017 | Apr. 30, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | Dec. 30, 2017 |
Number of warrant to purchase of common stock shares | 71,428 | 200,000 | 300,000 | |||||||||
Warrants exercise price per share | $ 0.26 | $ 0.30 | $ 0.45 | |||||||||
Number issuance of common stock, shares | 34,285 | 21,000 | ||||||||||
Number of common stock sold | 14 | 28 | 27.78 | 10 | 13.89 | |||||||
Common Stock Warrant [Member] | ||||||||||||
Number of warrant to purchase of common stock shares | 50,000 | 50,000 | 347,245 | 6,117,128 | ||||||||
Warrants exercise price per share | $ 0.26 | $ 0.26 | $ 0.26 | |||||||||
Number of common stock sold | 100,000 | 694,489 | ||||||||||
Warrant term | 36 months | 36 months | ||||||||||
Proceeds from issuance of warrant | $ 18,000 | $ 125,008 | ||||||||||
Common Stock [Member] | ||||||||||||
Number of warrant to purchase of common stock shares | 70,000 | 140,000 | 138,889 | 50,000 | 50,000 | 69,445 | 348,889 | |||||
Warrants exercise price per share | $ 0.30 | $ 0.30 | $ 0.30 | $ 0.26 | $ 0.26 | $ 0.26 | $ .30 | |||||
Number of common stock sold | 140,000 | 280,000 | 277,778 | 100,000 | 138,889 | 697,778 | ||||||
Warrant term | 36 months | |||||||||||
Proceeds from issuance of warrant | $ 125,600 |
Other Income - Schedule of Othe
Other Income - Schedule of Other Income (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Other Income and Expenses [Abstract] | ||||
Settlement income on license agreement | $ 250,000 | |||
Rental income on subleases | 57,600 | 3,000 | ||
Restitution income | 28,312 | 10,000 | ||
Other income | $ 43,012 | $ 3,000 | $ 85,912 | $ 263,000 |
Income Tax (Details Narrative)
Income Tax (Details Narrative) | 9 Months Ended |
Jun. 30, 2018USD ($) | |
Income Tax Disclosure [Abstract] | |
Net operating loss carry forwards | $ 7,787,000 |
Operating loss expiration year | 2,031 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Jul. 11, 2018 | Apr. 13, 2018 | Apr. 12, 2018 | Apr. 10, 2018 | Jan. 03, 2018 | Jan. 02, 2018 | Dec. 20, 2017 | Dec. 14, 2017 | Dec. 31, 2017 | Dec. 30, 2017 |
Number of units sold | 14 | 28 | 27.78 | 10 | 13.89 | |||||
Common stock shares issued | 34,285 | 21,000 | ||||||||
Number of warrant to purchase of common stock shares | 71,428 | 200,000 | 300,000 | |||||||
Warrants exercise price per share | $ 0.26 | $ 0.30 | $ 0.45 | |||||||
Subsequent Event [Member] | ||||||||||
Number of units sold | 66.67 | |||||||||
Common stock shares issued | 666,667 | |||||||||
Number of warrant to purchase of common stock shares | 333,334 | |||||||||
Warrants exercise price per share | $ .30 | |||||||||
Warrant term | 36 months | |||||||||
Proceeds from issuance of warrant | $ 100,000 |