Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Sep. 30, 2016 | Jan. 13, 2017 | Dec. 31, 2016 | |
Document And Entity Information | |||
Entity Registrant Name | NuLife Sciences, Inc. | ||
Entity Central Index Key | 1,592,603 | ||
Document Type | 10-K/A | ||
Document Period End Date | Sep. 30, 2016 | ||
Amendment Flag | true | ||
Current Fiscal Year End Date | --09-30 | ||
Is Entity a Well-known Seasoned Issuer? | No | ||
Is Entity a Voluntary Filer? | Yes | ||
Is Entity's Reporting Status Current? | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 6,440,768 | ||
Entity Common Stock, Shares Outstanding | 31,085,800 | ||
Amendment Description | This amendment is for the sole purpose of filing the XBRL financial report. | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,016 |
BALANCE SHEETS
BALANCE SHEETS - USD ($) | Sep. 30, 2016 | Sep. 30, 2015 |
CURRENT ASSETS: | ||
Cash | $ 1,086 | $ 2,160 |
Prepaid expenses | 0 | 3,165 |
Note receivable | 25,241 | 0 |
Total Current Assets | 26,327 | 5,325 |
TOTAL ASSETS | 26,327 | 5,325 |
CURRENT LIABILITIES: | ||
Accrued expenses | 338,159 | 182,144 |
Due to related parties | 175,700 | 9,500 |
Notes payable and accrued interest payable | 47,885 | 85,193 |
Notes payable, related parties | 74,500 | 0 |
TOTAL CURRENT LIABILITIES | 636,244 | 276,837 |
Convertible notes, net of debt discount of $91,480 and $-0- | 8,545 | 0 |
Derivative liability | 169,221 | 0 |
TOTAL LONG TERM LIABILITIES | 177,766 | 0 |
TOTAL LIABILITIES | 814,010 | 276,837 |
STOCKHOLDERS’ EQUITY (DEFICIT): | ||
Preferred stock, $0.001 par value; 5,000,000 shares authorized; none issued or outstanding | 0 | 0 |
Common stock, $0.001 par value; 200,000,000 shares authorized; 31,085,800 and 30,385,800 shares issued and outstanding respectively | 31,086 | 30,386 |
Additional paid in capital | 392,739 | 132,439 |
Accumulated deficit | (1,211,508) | (652,239) |
Common stock to be issued | 0 | 217,902 |
TOTAL STOCKHOLDERS’ EQUITY (DEFICIT) | (787,683) | (271,512) |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | $ 26,327 | $ 5,325 |
BALANCE SHEETS (Parenthetical)
BALANCE SHEETS (Parenthetical) - USD ($) | Sep. 30, 2016 | Sep. 30, 2015 |
Balance Sheets Parenthetical | ||
Debt discount | $ 91,480 | |
Preferred stock; Par Value | $ 0.001 | $ 0.001 |
Preferred stock; Shares Authorized | 5,000,000 | 5,000,000 |
Preferred stock; Shares Issued | 0 | 0 |
Preferred stock; Shares Outstanding | 0 | 0 |
Common Stock; Par Value | $ 0.001 | $ 0.001 |
Common Stock; Shares Authorized | 200,000,000 | 200,000,000 |
Common Stock; Shares Issued | 31,085,800 | 30,385,800 |
Common Stock; Shares Outstanding | 31,085,800 | 30,385,800 |
STATEMENTS OF OPERATIONS (Unaud
STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 12 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Statements Of Operations | ||
Revenue | $ 0 | $ 0 |
Cost of sales | 0 | 0 |
Gross Profit | 0 | 0 |
Operating expense: | ||
General and administrative expenses | (256,164) | (451,762) |
Related party compensation | (215,098) | (39,234) |
Total operating expense | (471,262) | (490,996) |
Loss from operations | (471,262) | (490,996) |
Interest expense | (21,280) | (5,516) |
Interest income | 2,469 | 0 |
Loss on change in fair value of derivative and derivative expense | (69,196) | 0 |
Loss before provision for income tax | (559,269) | (496,512) |
Provision for income taxes | 0 | 0 |
Net loss | $ (559,269) | $ (496,512) |
Basic and diluted loss per share | $ (0.01) | $ (0.01) |
Weighted average common shares outstanding – basic and diluted | 30,740,595 | 30,385,800 |
STATEMENT OF CHANGES IN STOCKHO
STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT - USD ($) | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Common Stock to be Issued | Total |
Beginning balance, Shares at Sep. 30, 2014 | 30,385,800 | ||||
Beginning balance, Amount at Sep. 30, 2014 | $ 30,386 | $ 132,439 | $ (155,727) | $ 7,098 | |
Shares to be issued services, Shares | 217,902 | 217,902 | |||
Shares to be issued for services, Amount | 496,512 | $ 496,512 | |||
Net loss | (496,512) | ||||
Ending balance, Shares at Sep. 30, 2015 | 30,385,800 | ||||
Ending balance, Amount at Sep. 30, 2015 | $ 30,386 | 132,439 | (652,239) | $ 217,902 | (271,512) |
Shares to be issued services, Shares | 700,000 | ||||
Shares to be issued for services, Amount | $ 700 | 260,300 | $ 217,902 | 43,098 | |
Net loss | (559,269) | ||||
Ending balance, Shares at Sep. 30, 2016 | 31,085,800 | ||||
Ending balance, Amount at Sep. 30, 2016 | $ 31,086 | $ 392,739 | $ (1,211,508) | $ (787,683) |
STATEMENT OF CASH FLOWS (Unaudi
STATEMENT OF CASH FLOWS (Unaudited) - USD ($) | 12 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
CASH FLOW FROM OPERATING ACTIVITIES: | ||
Net loss | $ (559,269) | $ (496,512) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Intangible asset impairment loss | 0 | 74,495 |
Amortization of debt discount | 8,545 | 0 |
Loss on change iin fair value of derivative expense | 69,196 | 0 |
Stock issued for services | 43,098 | 217,902 |
Change in operating assets and liabilities: | ||
Prepaid expenses | 3,165 | (3,165) |
Note receivable | (25,000) | 0 |
Interest receivable | (241) | |
Accounts payable and accrued expenses | 156,015 | 94,612 |
Due to related party | 166,200 | 9,500 |
Accrued interest payable | 12,717 | 5,516 |
Net Cash Used in Operating Activities | (125,574) | (97,652) |
CASH FLOW FROM FINANCING ACTIVITIES: | ||
Proceeds from the issuance of notes payable | 0 | 50,025 |
Repayment of note payable | 0 | (25,000) |
Proceeds from the issuance of notes payable – related party | 74,500 | 0 |
Proceeds from the issuance of convertible notes | 50,000 | 0 |
Net Cash Provided by Financing Activities | 124,500 | 25,025 |
CHANGE IN CASH | (1,074) | (72,627) |
CASH AT BEGINNING OF PERIOD | 2,160 | 74,787 |
CASH AT END OF PERIOD | 1,086 | 2,160 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||
Cash paid for: Interest | 0 | 0 |
Cash paid for: Income taxes | 0 | 0 |
Non-cash investing and financing activities: | ||
Note payable reissued as convertible debt | 50,025 | 0 |
Derivative liability | $ 194,620 | $ 0 |
NOTE 1 - ORGANIZATION
NOTE 1 - ORGANIZATION | 12 Months Ended |
Sep. 30, 2016 | |
Notes to Financial Statements | |
ORGANIZATION | NuLife Sciences Inc., formerly Smoofi, Inc. (the "Company") was incorporated under the laws of the State of Nevada on October 15, 2013. The Company issued 7,250,000 shares of its common stock to our founder, Derek Cahill, as consideration for the purchase of a business plan along with a website. On April 21, 2015, the Board of Directors of the Company approved a three-for-one forward stock split of the Company's common stock (the “Forward Split”). Accordingly, shareholders owning shares of the Company's common stock received two additional shares of the Company for each share they owned, and Mr. Cahill’s 7,250,000 shares became 21,750,000 shares. Prior to the Forward Split the Company had 10,128,600 shares issued and outstanding and following the Forward Split the Company has 31,085,800 shares issued and outstanding. Online marketplace and community The Company's initially-defined business strategy is to acquire and/or develop and market software and services that will significantly enhance the performance and functionality of the Internet services used by individuals and by small to medium sized businesses. The Company's products and services, essentially an online marketplace and community, will use proprietary technology that will enable users, both service requestors and service providers, to work collaboratively to obtain substantial improvements in performance, reliability and usability. Service requestors (people or companies requesting a service) name their own price, date and time for any service. A service requestor can also select qualifying criteria such as number of reviews or review rankings of a service provider. The first service provider who can provide that service, on that date, at that time and meets the service ranking requirements will get the project. The web site and the platform, originally titled www.AnytimeJobe.com experienced security issues shortly after it was launched and had to be taken down to correct the security problems. At the present time the additional programing to eliminate the security problem has not been completed and the platform is not available online. Once the security issues with the platform are resolved, the Company's online marketplace and online community will match up daily job or service requests and fill market demand for service requests throughout a particular local community, county or city and will connect local resources with local needs. A goal is to create jobs and provide market value for basic services by aggregating these low cost services within each local market. This will maximize value for either the person or company requesting the service and for the person or company providing the service. In other words, service providers will get the best possible price for their service and the party requesting the service will pay the lowest possible price. Operations, Consulting and Advisory Services in the Organ Transplant segment of the Healthcare Industry On December 30, 2016, the Company announced the completion of an Asset Purchase Agreement to acquire all of the assets (the “Asset Purchase”) of GandTex, LLC, a Texas limited liability company (“GandTex”). Pursuant to which the Company purchased from GandTex certain proprietary patents and a related license in respect of a series of procedures and medical techniques focused on advancing human organ transplant technology which would eliminate the need for an organ or tissue match, and the necessity for anti-rejection drugs (the “NuLife Process”). Pursuant to the terms of the Asset Purchase, and upon achieving certain pro-forma goals, the Company agreed to provide additional funding for the newly developed procedure, using the patents and License, to conduct tests of the new procedure on animal (“Animal Trials”) in the aggregate amount of $300,000. In exchange for the Assets, the Company issued to GandTex 10,000,000 shares of its Series B Convertible Preferred Stock. |
NOTE 2 - SUMMARY OF SIGNIFICANT
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Sep. 30, 2016 | |
Notes to Financial Statements | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Basis of Presentation The Company's financial statements are prepared using the accrual method of accounting. The Company has elected a September 30 fiscal year-end. For purposes of the balance sheet and statement of cash flows, the Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents. Stock-based Compensation The Company follows ASC 718-10, Stock Compensation Use of Estimates and Assumptions Preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. The Company has adopted the provisions of ASC 260. Loss per Share The basic loss per share is calculated by dividing the Company's net loss available to common shareholders by the weighted average number of common shares during the year. The diluted loss per share is calculated by dividing the Company's net loss available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. Diluted earnings (loss) per share are the same as basic earnings (loss) per share due to the lack of dilutive items in the Company. Fair Value Measurements and Disclosures Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of September 30, 2016 and 2015. The respective carrying value of certain on-balance-sheet financial instruments, approximate their fair values. These financial instruments include cash, accounts receivable, accounts payable, accrued expenses and notes payable. Fair values were assumed to approximate carrying values for these financial instruments because they are short term in nature and their carrying amounts approximate fair values or they are receivable or payable on demand. The Company uses fair value measurements under the three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure 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 assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. • Level 3 inputs to the valuation methodology are unobservable and significant to the fair value. Fair Value Measurements Level 1 Level 2 Level 3 Convertible notes (net of discount) – September 30, 2016 $ — $ — $ 8,545 Convertible notes (net of discount) – September 30, 2015 $ — $ — $ — Derivative liability – September 30, 2016 $ — $ — $ 169,221 Derivative liability – September 30, 2015 $ — $ — $ — The following table provides a summary of the changes in fair value of the Company’s Promissory Notes, which are both Level 3 liabilities as of September 30, 2016: Balance at September 30, 2015 $ -0- Issuance of notes 100,025 Debt discount on convertible notes (100,025 ) Accretion of debt discount 8,545 Balance September 30, 2016 $ 8,545 The Company determined the value of its convertible notes using a market interest rate and the value of the derivative liability issued at the time of the transaction less the accretion. There is no active market for the debt and the value was based on the delayed payment terms in addition to other facts and circumstances at the end of September 30, 2016 and 2015. Derivative Financial Instruments The Company evaluates our financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, the Company uses the Black-Scholes-Merton pricing model to value the derivative instruments. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. Derivative instruments that become subject to reclassification are reclassified at the fair value of the instrument on the reclassification date. Derivative instrument liabilities will be classified in the balance sheet as current or non-current based on whether or not settlement of the derivative instrument is expected within 12 months of the balance sheet date. The Company estimates the fair value of these instruments using the Black-Scholes option pricing model and the intrinsic value if the convertible notes are due on demand. We have determined that certain convertible debt instruments outstanding as of the date of these financial statements include an exercise price “reset” adjustment that qualifies as derivative financial instruments under the provisions of ASC 815-40, Derivatives and Hedging - Contracts in an Entity’s Own Stock (“ASC 815-40”). Certain of the convertible debentures have a variable exercise price, thus are convertible into an indeterminate number of shares for which we cannot determine if we have sufficient authorized shares to settle the transaction with. Accordingly, the embedded conversion option is a derivative liability and is marked to market through earnings at the end of each reporting period. Any change in fair value during the period recorded in earnings as “Other income (expense) - gain (loss) on change in derivative liabilities.” The following table represents the Company’s derivative liability activity for the period ended: Balance at September 30, 2015 $ — Initial measurement at issuance date of the notes 100,025 Derivative expense 94,595 Change in fair value of derivative at period end (25,399 ) Balance September 30, 2016 $ 169,221 Income Taxes Income taxes are provided in accordance with ASC 740, Income Taxes Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. No provision was made for Federal or State income taxes. Advertising Advertising will be expensed in the period in which it is incurred. There have been no advertising expenses for the reporting periods presented. Intangible Assets Intangible assets with finite lives are amortized over their estimated useful life. The Company monitors conditions related to these assets to determine whether events and circumstances warrant a revision to the remaining amortization period. The Company tests its intangible assets with finite lives for potential impairment whenever management concludes events or changes in circumstances indicate that the carrying amount may not be recoverable. The original estimate of an asset's useful life and the impact of an event or circumstance on either an asset's useful life or carrying value involve significant judgment. Recently Issued Accounting Pronouncement In August 2014, the FASB issued ASU No. 2014-15, "Presentation of Financial Statements — Going Concern (Subtopic 205-40), Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern". Continuation of a reporting entity as a going concern is presumed as the basis for preparing financial statements unless and until the entity's liquidation becomes imminent. Preparation of financial statements under this presumption is commonly referred to as the going concern basis of accounting. Currently, there is no guidance under U.S. GAAP about management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern or to provide related footnote disclosures. The amendments in this Update provide that guidance. In doing so, the amendments should reduce diversity in the timing and content of footnote disclosures. The amendments require management to assess an entity's ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management's plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management's plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). For the period ended September 30, 2016, management evaluated the Company's ability to continue as a going concern and concluded that substantial doubt has not been alleviated about the Company's ability to continue as a going concern. While the Company continues to explore further significant sources of financing, management's assessment was based on the uncertainty related to the amount and nature of such financing over the next twelve months. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which supersedes the existing guidance for lease accounting, Leases (Topic 840). ASU 2016-02 requires lessees to recognize leases on their balance sheets, and leaves lessor accounting largely unchanged. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early application is permitted for all entities. ASU 2016-02 requires a modified retrospective approach for all leases existing at, or entered into after, the date of initial application, with an option to elect to use certain transition relief. The Company is currently evaluating the impact of this new standard on its consolidated financial statements. The Company reviewed all recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the AICPA, and the SEC and they did not or are not believed by management to have a material impact on the Company's present or future financial statements. |
NOTE 3 - GOING CONCERN
NOTE 3 - GOING CONCERN | 12 Months Ended |
Sep. 30, 2016 | |
Notes to Financial Statements | |
GOING CONCERN | The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As reflected in the accompanying financial statements, the Company had negative working capital of $609,917 and, having incurred net losses since inception, an accumulated deficit of $1,211,508 at September 30, 2016. While the Company believes that, with adequate financial resources, it will be able to generate revenues from services, including cannabis industry consulting services, and further developing and launching its marketplace platform, the Company's cash position is not sufficient to support theses growth plans and daily operations. Management believes that the actions presently being taken to further broaden and implement its business plan and generate additional services, products and revenue provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of its strategy to realize revenues and in its ability to raise additional funds, there can be no assurances that will ever occur. The Company's ability to continue as a going concern is dependent upon its ability to obtain adequate financing beyond the limited funding it has received in this fiscal year from a related party (See Note 7), and achieve profitable operations. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. |
NOTE 4 - PREPAID EXPENSES
NOTE 4 - PREPAID EXPENSES | 12 Months Ended |
Sep. 30, 2016 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
PREPAID EXPENSES | During the year ended September 30, 2015, the Company prepaid certain expenses related to legal expenses. At September 30, 2016 and 2015, $-0- and $3,165 of these expenses remain to be amortized over the useful life through March 2016. |
NOTE 5 - NOTES RECEIVABLE
NOTE 5 - NOTES RECEIVABLE | 12 Months Ended |
Sep. 30, 2016 | |
Notes to Financial Statements | |
NOTE RECEIVABLE | On January 15, 2016, the Company entered into a secured promissory note in the amount of $46,400 to advance funds to the sellers of certain farm property in Colorado the Company was seeking to purchase. Closing was subject to financing and other contingencies per a non-binding Letter of Intent. This note had an interest rate of 8% per annum, with principal and unpaid and accrued interest originally due on June 30, 2016. On March 31, 2016, the Company entered into Amendment #1 to this note to (i) extend the due date to June 30, 2016, unless the contemplated transaction closes prior thereto, in which case the note will be cancelled, (ii) reduce the principal to $31,400 to characterize $15,000 of the funds transferred to sellers as a non-refundable earnest money payment and (iii) stipulate that interest is to accrue on the lower $31,400 principal since inception. On June 30, 2016, the Company entered into Amendment #2 to this note to (i) extend the due date to September 30, 2016, unless the contemplated transaction closes prior thereto, in which case the note will be cancelled. On September 30, 2016, the Company determined this note to no longer be collectible. As such, the principal amount of $31,400, the non-refundable deposit amount of $15,000 and accrued interest in the amount of $2,228 was written off and included in operating expense for the year ended September 30, 2016. On August 17, 2016, the Company entered into a secured promissory note in the amount of $25,000 to advance funds to the sellers of assets. This note has an interest rate of 8% per annum, with principal and unpaid and accrued interest due on February 17, 2017. As of September 30, 2016, the total outstanding under this note including accrued interest is $25,241. |
NOTE_6 - CONSULTING AGREEMENT
NOTE 6 - CONSULTING AGREEMENT | 12 Months Ended |
Sep. 30, 2016 | |
Notes to Financial Statements | |
CONSULTING AGREEMENT | On April 1, 2015, the Company entered into a twelve-month consulting agreement with an investor relations firm. Per the agreement, the Company will pay the consultant a monthly fee of $8,500 on the first day of each month with the payment deferred until the Company closes financing in the amount of $3 million or greater. Additionally, the Company was required to issue the consultant 200,000 shares of common stock on October 1, 2015. On the date of the consulting agreement entered, April 1, 2015, the shares were valued at $1.00 per share which was the unadjusted share price prior to three-for-one forward stock split. The shares, which have not been issued as of September 30, 2015 and were recorded under equity - shares to be issued, will be issued in a subsequent period. During the year ended September 30, 2015 and 2016, the Company recorded stock based compensation expense in the amount of $217,902 and $43,098 associated with the vesting of the common stock, respectively. |
NOTE 7 - NOTES PAYABLE
NOTE 7 - NOTES PAYABLE | 12 Months Ended |
Sep. 30, 2016 | |
Notes to Financial Statements | |
NOTES PAYABLE | As of September 30, 2016, the Company had one note payable issued and outstanding to third party lenders with a total principle of $25,000 and accrued interest of $12,156. The note was due on June 30, 2015, has an interest rate of 12%. This note remains unpaid. The note is in default as of September 30, 2016. As of September 30, 2016, the Company had three notes payable issued and outstanding with a related party with a total principle of $74,500 and accrued interest of $5,038. The three notes, in the amount of $47,000, $15,000 and $12,500, were issued on January 14, 2016. February 10, 2016 and February 29, 2016, respectively. The three notes are due on the earlier of one week after the closing of a certain contemplated farm property acquisition or July 31, 2016, and have an interest rate of 10%. The related party for all three notes is East West Secured Developments, LLC, an Arizona Limited Liability Company of which Mr. Brian Loiselle, a director of and consultant to the Company, is a managing member. On June 30, 2016, the Company entered into Amendment #1 to these three notes to extend the due date to the earlier of one week after the closing of a certain contemplated farm property acquisition or October 31, 2016. The three notes are currently in default. However, the default interest demand of 18% by Mr. Loiselle is being disputed by the Company due to the lack of provision for default interest in the notes. |
NOTE 8 - CONVERTIBLE NOTES
NOTE 8 - CONVERTIBLE NOTES | 12 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
CONVERTIBLE NOTES | Convertible notes consists of the following: September 30, September 30, Convertible note payable, annual interest rate of 8%, convertible into common stock at a variable rate per share and due December 2017. $ 50,025 $ -0- Convertible note payable, annual interest rate of 10%, convertible into common stock at a variable rate per share and due August 2019. 50,000 -0- Unamortized debt discount (91,480 ) -0- 8,545 -0- Less current portion -0- -0- Convertible debt, net of current portion and debt discount $ 8,545 $ -0- On September 2, 2016, the Company amended and restated that certain outstanding promissory note of the Company, dated July 3, 2015, in the principal amount of $50,025. The replacement convertible promissory note matures on December 31, 2017 and bears interest at the rate of 8% per annum, and the principal and interest due thereunder may be prepaid at any time. The note, together with all interest as accrued, is convertible into shares of the Company’s common stock at 50% of the trailing average highest closing bid price of the Company’s common stock on the date of conversion. As of September 30, 2016, the note balance and accrued interest is $50,025 and $5,033, respectively. Also on September 2, 2016, the Company entered into those certain Note Purchase Agreements in connection with the issuance of certain convertible promissory notes in the aggregate principal amount of $50,000. All of the Purchase Notes mature thirty-six months from the date of issuance and bear interest at the rate of 10% per annum. Each of the Purchase Notes may be prepaid until the Maturity Date at 110% of the principal and interest amount outstanding. The Purchase Notes, together with all interest as accrued, are each convertible into shares of the Company’s common stock at 50% of the trailing average highest closing bid price of the Company’s common stock on the date of conversion. As of September 30, 2016, the note balances and accrued interest are $50,000 and $658, respectively. |
NOTE 9 - DERIVATIVE LIABILITY
NOTE 9 - DERIVATIVE LIABILITY | 12 Months Ended |
Sep. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE LIABILITY | During August 2016, the Company entered into a Loan Agreement with an investor pursuant to which the Company issued a convertible promissory note in the principal amount of $50,025. The Note is convertible into shares of common stock at an initial conversion price subject to adjustment as contained in the Note. The note, together with all interest as accrued, is convertible into shares of the Company’s common stock at 50% of the trailing average highest closing bid price of the Company’s common stock on the date of conversion. The Note accrues interest at a rate of 8% per annum and matures on December 31, 2017. During August 2016, the Company entered into Loan Agreements with investors pursuant to which the Company issued convertible promissory notes in the principal amount of $50,000. The Notes are convertible into shares of common stock at an initial conversion price subject to adjustment as contained in the Note. The note, together with all interest as accrued, is convertible into shares of the Company’s common stock at 50% of the trailing average highest closing bid price of the Company’s common stock on the date of conversion. The Notes accrue interest at a rate of 10 per annum and mature on August 1, 2019 Due to the variable conversion price associated with these convertible promissory notes, the Company has determined that the conversion feature is considered a derivative liability. The accounting treatment of derivative financial instruments requires that the Company record the fair value of the derivatives as of the inception date of the Convertible Promissory Note and to adjust the fair value as of each subsequent balance sheet date. The initial fair value of the embedded debt derivative of $194,620 was allocated as a debt discount in the amount of $100,025 and was determined using intrinsic value with the remainder $94,595 charged to current period operations as interest expenses, loss on derivative. The fair value of the described embedded derivative was determined using the Black-Scholes Model with the following assumptions: (1) dividend yield of 0%; (2) expected volatility of 243% - 413%, (3) risk-free interest rate of 0.50% - 0.88%, (4) expected life of 1-3 years, and (5) fair value of the Company’s common stock of $0.11 per share. During the years ended September 30, 2016 and 2015, the Company recorded the loss (gain) in fair value of derivative and derivative expense in the amount of $69,196 and $-0-, respectively. For the years ended September 30, 2016 and 2015, $8,545 and $-0-, were expensed in the statement of operation as amortization of debt discount related to above notes and shown as interest expenses, respectively. The following table represents the Company’s derivative liability activity for the period ended: Balance at September 30, 2015 $ – Initial measurement at issuance date of the notes 100,025 Derivative expense 94,595 Change in fair value of derivative at period end (25,399 ) Balance September 30, 2016 $ 169,221 The following table presents the components of the Company’s derivative financial instruments associated with convertible promissory notes (Notes 8), using the market price of the common stock and are derived using the Black-Scholes option pricing model measured at fair value on a recurring basis, using Level 1 and 3 inputs to the fair value hierarchy, at September 30, 2016: 2016 2015 Embedded conversion features $ – $ – Derivative financial instruments $ – $ – These derivative financial instruments arise as a result of applying ASC 815 Derivative and Hedging |
NOTE 10 - SHARE CAPITAL
NOTE 10 - SHARE CAPITAL | 12 Months Ended |
Sep. 30, 2016 | |
Notes to Financial Statements | |
SHARE CAPITAL | The Company is authorized to issue 200,000,000 shares of common stock and 5,000,000 shares of preferred stock. The Company issued 1,500,000 shares of its common stock to its Mr. Sean Clarke, the Company’s Chief Financial Officer and sole director, as founder shares. The Company issued 21,750,000 shares of our common stock to Derek Cahill as consideration for the purchase of a business plan along with a website. The acquisition of the business plan and website was valued at $72,500. On October 29, 2013, the Company completed a private placement where it issued 5,400,000 shares of its common stock to accredited investors for $18,000. On April 16, 2014, the Company completed a public offering whereby 1,735,800 shares of common stock were sold at $0.042 per share for total gross proceeds of $72,325. On April 1, 2015, the Company entered into a twelve-month consulting agreement with an investor relations firm. Per the agreement, the Company granted 200,000 shares of restricted common stock to the investor relations firm which fully vested on October 1, 2015. The final issuance resulted in 600,000 shares of restricted common stock due to the three-for-one forward stock split. On the date of the consulting agreement was entered into, April 1, 2015, the shares were valued at $1.00 per share which was the unadjusted share price prior to three-for-one forward stock split. The subject shares of common stock were issued on March 29, 2016. During the year ended September 30, 2015, the Company recorded share based compensation expense in the amount of $200,000 associated with the vesting of the common stock granted. On March 31, 2016, the Company and the investor relations firm entered into Amendment #1 to the consulting agreement to suspend the monthly fee indefinitely until such time as the Company requests that the services resume. On April 21, 2015, the Board of Directors of the Company approved a three-for-one forward stock split of the Company's common stock. Accordingly, shareholders owning shares of the Company's common stock will receive two additional shares of the Company for each share they own. The Company had 10,128,600 shares issued and outstanding prior to the forward stock split. At September 30, 2016 and September 30, 2015 the Company has 31,085,800 shares and 30,385,800 shares, respectively, of common stock issued and outstanding. The Company received notification from the Financial Industry Regulatory Authority (FINRA) on May 7, 2015, that it could proceed with the three-for-one forward stock split. Additional funds were reallocated from Additional Paid in Capital to the Common Stock account in an amount equal to the additional par value represented by the additional shares issued under the stock split. All share information presented in these financial statements and accompanying footnotes has been retroactively adjusted to reflect the increased number of shares resulting from this transaction. On August 7, 2015, the Company granted 100,000 shares of restricted common stock to its chief operating officer. On the date of grant, the shares were valued at $.61 per share which was the unadjusted closing share price on that date for a fair value of $61,000. The shares vested over a six-month period; accordingly, during the six months ended March 31, 2016, the Company recorded stock based compensation expense in the amount of $61,000 associated with vesting of the common stock granted. The subject shares of common stock were issued on March 29, 2016. During the year ended September 30, 2016, the Company recorded stock based compensation expense in the amount of $43,098, associated with vesting of common stock granted. On October 31, 2016, the Company amended and restated its Articles of Incorporation in the form attached hereto as Exhibit 3.1. The purpose of the amendment and restatement of the Articles of Incorporation was to: (i) Change the Company’s name from “SmooFi, Inc.” to “NuLife Sciences, Inc.” (ii) Symbol change from “SMFI” to “NULF”; (iii) Increase the number of authorized shares of Preferred Stock to 25,000,000; (iv) Increase the number of authorized shares of Common Stock to 475,000,000; (v) Define, with respect to the Preferred Stock, the manner in which the Board may define the powers, preferences, rights, and restrictions thereof. Concurrent with the Company’s increase of its authorized common and preferred stock, the Company requested and received from, the Financial Industry Regulatory Authority, approval for a name change from Smoofi, Inc. to NuLife Sciences, Inc., and a symbol change from “SMFI” to “NULF”. The amended and restated Bylaws of the Company are hereto as Exhibit 3.2. Also on October 31, 2016, the Company adopted a 2016 Non-Qualified Incentive Stock Compensation Plan (the “Compensation Plan”), and reserved 7,000,000 shares for issuance from the Compensation Plan. AS of the date of this report no shares have been issued from the Compensation Plan. On November 1, 2016, the Company amended and restated its Bylaws, providing for a change in the Company’s name from “SmooFi, Inc.” to “NuLife Science, Inc.” The amended and restated Bylaws of the Company are hereto as Exhibit 3.2. On November 1, 2016, the Board approved the Certificates of Designation to the Company’s Articles of Incorporation in respect of Series A Preferred Stock and Series B Preferred Stock, to provide for the rights, preferences, and privileges as described Exhibits 3.3 and 3.4 hereto. |
NOTE_11 - INCOME TAXES
NOTE 11 - INCOME TAXES | 12 Months Ended |
Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | As of September 30, 2016, the Company had net operating loss carry forwards of approximately $936,186 that may be available to reduce future years' taxable income through 2036. As of As of Deferred tax assets: Net operating tax carryforwards $ 365,113 $ 254,373 Other — — Gross deferred tax assets 365,113 254,373 Valuation allowance (365,113 ) (254,373 ) Net deferred tax assets $ — $ — Realization of deferred tax assets is dependent upon sufficient future taxable income during the period that deductible temporary differences and carryforwards are expected to be available to reduce taxable income. Management periodically reviews the likelihood that that it will be able to recover its deferred tax assets. As the achievement of required future taxable income is uncertain based on an assessment of all available evidence, the Company recorded a valuation allowance equal to the full amount of its deferred tax assets as of September 30, 2016 and 2015. Reconciliation between the provision for income taxes and the expected tax benefit using the federal statutory rate of 34% and state statutory rate of 5.0% for 2016 and 2015 is as follows: 2016 2015 Income tax benefit at federal statutory rate (34.00 )% (34.00 )% State income tax benefit, net of effect on federal taxes (5.00 )% (5.00 )% Valuation allowance 39.00 39.00 % Effective rate 0.00 0.00 % |
NOTE 12 - RELATED PARTY TRANSAC
NOTE 12 - RELATED PARTY TRANSACTIONS | 12 Months Ended |
Sep. 30, 2016 | |
Notes to Financial Statements | |
RELATED PARTY TRANSACTIONS | In April of 2015 Mr. Brian Loiselle, a former director of the Company, agreed to transfer his ownership interest in a cannabis farm and related equipment known as the "Tamarack Project", which was the subject of a certain Letter of Intent to which the Company was a party. In addition, it was proposed that Mr. Cahill sell all of his 21,750,000 shares of the Company to a company controlled by Mr. Loiselle. The transfer of the Tamarack Project and other projects which Mr. Loiselle offered in substitution to the Tamarack Project were never completed, and the shares of the Company held by Mr. Cahill never were transferred. Mr. Loiselle induced the Company to make a non-refundable payment of $50,000 in connection with his attempt to purchase a replacement cannabis farm and property, the “Stroud Farm”, which never closed and the $50,000 was written off in the year ended September 30, 2015. After giving Mr. Loiselle several extensions of time to perform on his proposed multi-part transaction, we severed relations with Mr. Loiselle in August 2016. As of September 30, 2016, $53,200 was due to Mr. Loiselle and included as Due to Related Party which is in dispute as described below. Effective January 1, 2016, in recognition of the absence of employment and consulting agreements and the time commitment to the Company on the part Mr. Fred Luke, the Company’s President, and Mr. Sean Clarke, the Company's Chief Financial Officer and sole director, and Brian Loiselle, a former member of the Board of Directors, respectively, the Board of Directors on March 31, 2016 approved monthly compensation in the amount of $10,000 to be paid to Mr. Sean Clarke and Brian Loiselle, to be deferred and accrued and only paid following the Closing of the purchase of the Stroud Farm and at such time as the Company has the necessary financial resources. Effective April 1, 2016, such monthly compensation was revised from $10,000 to $5,000, but the Board of Directors reaffirmed that such payment was to be deferred and accrued, and only paid following the Closing of the purchase of the Stroud Farm and at such time as the Company has the necessary financial resources At September 30, 2016, $120,000 has been accrued and is included in Due to Related Parties . As of September 30, 2016, the Company had three notes payable issued and outstanding with an entity controlled by Mr. Loiselle with a total principle of $74,500 and accrued interest of $5,038. The three notes, in the amount of $47,000, $15,000 and $12,500, were issued on January 14, 2016. February 10, 2016 and February 29, 2016, respectively. The three notes are due on the earlier of one week after the closing of a certain contemplated farm property acquisition or July 31, 2016, and have an interest rate of 10%. The related party for all three notes is EastWest Secured Developments, LLC; an Arizona Limited Liability Company of which Mr. Brian Loiselle, a director of and consultant to the Company, is a managing member. On June 30, 2016, the Company entered into Amendment #1 to these three notes to extend the due date to the earlier of one week after the closing of a certain contemplated farm property acquisition or October 31, 2016. On April 22, 2015, the Company and Newport Board Group entered into an Advisory Services Agreement whereby Mr. Donahue would serve as the Company's Chief Operating Officer. The term of the initial agreement was for 60 days. The Board of Directors approved by resolution to extend the Agreement with the Newport Board Group on June 9, 2015, but no definitive agreement was signed and no set termination date was set; however, the resolutions provided for either party to terminate the extension at any time with 30 days' written notice. The monthly fee under the original agreement was $4,000 to be paid monthly for Mr. Donahue to serve as the Chief Operations Officer and was negotiated and connected to the original proposed transfer of the Tamarack Project to the Company by Mr. Loiselle. During the year ended September 30, 2016, the Company paid $-0- to Newport Board Group, with an additional $57,500 of monthly fees deferred and included as Due to Related Party at September 30, 2016. During the year ended September 30, 2015, the Company paid $11,832 to Newport Board Group, with an additional $9,500 of monthly fees deferred and included as Due to Related Party at September 30, 2015. The Company terminated the extension in September 2016, effective October 15, 2016. The Company has continued to defer and accrue all additional fees through the date of filing of this Report. On August 7, 2015, the Company granted 100,000 shares of restricted common stock to Mr. John Donahue, the Company’s former Chief Operations Officer. As of September 30, 2016, the Company owed Mr. Clarke and Mr. Luke $60,000 and $5,000, respectively, of accrued and unpaid compensation. These amounts are included as Due to Related Party at September 30, 2016. During the year ended September 30, 2016 and 2015 the Company paid Mr. Clarke and Mr. Luke $-0- and $10,000, respectively, as compensation. |
NOTE 13_- CONTINGENCY
NOTE 13 - CONTINGENCY | 12 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
NOTE 13 - CONTINGENCY | As of September 30, 2016, as described in Note 12, the Company has accrued $53,200 in Due to Related party - Mr. Loiselle , note payable of $74,500 and accrued interest of $5,038 due to EastWest Secured Developments, LLC, an entity controlled by Mr. Brian Loiselle, As of today, the aggregated amount of $132,738 has been in default and past due. On top of the amount accrued by the Company, Mr. Loiselle had demanded for a penalty fee of $101,235, which is approximately 18% monthly default rate on the amount past due. We believe the penalty fee imposed is invalid and are currently in dispute with Mr. Loiselle. |
NOTE 14_- SUBSEQUENT EVENTS
NOTE 14 - SUBSEQUENT EVENTS | 12 Months Ended |
Sep. 30, 2016 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | On October 3, 2016 the Company entered into a definitive Asset Purchase Agreement to acquire all of the assets of GandTex, LLC, a Texas limited liability company (“GandTex”), as disclosed by the Company on Form 8-K on October 17, 2016. The transaction had a soft Closing on November 30, 2016 with the Assignment to the Company of one of the GandTex patents and a License based upon another patent where James Gandy was a co-inventor. A final Closing of this transaction occurred on December 30, 2016 with the issuance of ten Million (10,000,000) shares of the Company’s Series B Convertible Preferred Stock to GandTex LLC. Pursuant to the terms of the Asset Purchase, and upon achieving certain pro-forma goals, the Company agreed to provide additional funding for the newly developed procedure, using the patents and License, to conduct tests of the new procedure on animal (“Animal Trials”) in the aggregate amount of $300,000. On September 16, 2016 we asked Mr. John Hollister to join our management team as our Chief Executive Officer. Due to the financial constraints of the Company Mr. Hollister did not accept the offer. However, in October 2016 Mr. Hollister agreed to serve as a consultant, then as our interim our Chief Executive Officer, pending the completion of the sale the Purchase Notes. There has yet to be a definitive agreement executed between the Company and Mr. Hollister although we expect to have a final agreement finalized in January 2017. On November 1, 2016, pursuant to, and in preparation for, the fulfillment of the Asset Purchase Agreement to acquire all of the assets of GandTex, the Company formed 2 subsidiaries in the state of Nevada, NuLife BioMed, Inc., and NuLife Technologies, Inc. GandTex is a biomedical company focused on advancing human organ transplant technology and medical research. The assets being transferred consist of certain proprietary patents for eliminating the need for an organ or tissue match, and the necessity for anti-rejection drugs, as well as management of, and historical data for, animal trials conducted by GandTex. On September 27, 2016, the Company entered into those four (4) Note Purchase Agreements (collectively, the “Purchase Agreements”) in connection with the issuance of certain convertible promissory notes, dated October 11, 2016 (collectively, the “Purchase Notes”) in the aggregate principal amount of $50,000. All of the Purchase Notes are due upon demand, provided however, that the holder thereof can’t make demand until after Ninety (90) days from the date of issuance (the “Maturity Date”). The Purchase Notes bear interest at the rate of 8% compounded monthly. The Purchase Notes, together with all interest as accrued, are each convertible into shares of the Company’s common stock at 50% of the trailing average highest closing bid price of the Company’s common stock on the date of conversion. The Purchase Agreements and the Purchase Notes contain representations, warranties, conditions, restrictions, and covenants of the Company that are customary in such transactions with smaller companies. The Company executed the Purchase Agreements and issued the Purchase Notes as described in above. The Purchase Notes may be accelerated by the holders thereof in the event of default. In addition, the amounts due and payable under the Purchase Notes (and, consequently, the number of shares of common stock convertible thereunto) may be increased to 150% of the principal and interest amounts of the Purchase Notes. The Purchase Notes are a direct financial obligation of the Company and are considered a current liability of the Company for accounting purposes. From November 18, 2016 to December 3, 2016, the Company entered into eight (8) Note Purchase Agreements (collectively, the “Purchase Agreements”) in connection with the issuance of certain convertible promissory notes (collectively, the “Purchase Notes”) in the aggregate principal amount of $540,000. All of the Purchase Notes are due upon demand, provided however, that the holder thereof can’t make demand until after Ninety (90) days from the date of issuance (the “Maturity Date”). The Purchase Notes bear interest at the rate of 8% compounded monthly. The Purchase Notes, together with all interest as accrued, are each convertible into shares of the Company’s common stock at a conversion price of Eleven cents ($0.11) per share. The Purchase Agreements and the Purchase Notes contain representations, warranties, conditions, restrictions, and covenants of the Company that are customary in such transactions with smaller companies. Copies of the Purchase Agreements and Purchase Notes are included as an Exhibit hereto. From November 18, 2016 to December 3, 2016, the Company executed the Purchase Agreements and issued the Purchase Notes as described above. The Purchase Notes may be accelerated by the holders thereof in the event of default. In addition, the amounts due and payable under the Purchase Notes (and, consequently, the number of shares of common stock convertible thereunto) may be increased to 150% of the principal and interest amounts of the Purchase Notes. The Purchase Notes are a direct financial obligation of the Company and are considered a current liability of the Company for accounting purposes. In respect of the aforementioned convertible note issuances of the Company, the note holders are each an “accredited investor” as such term is defined by rules promulgated by the Securities and Exchange Commission (“SEC”). No solicitation was made and no underwriting discounts were given or paid in connection with these transactions. The Company believes that the issuance of the convertible promissory notes pursuant to their respective agreements were exempt from registration with the SEC pursuant to Section 4(2) of the Securities Act of 1933. On November 15, 2016, the Board approved the grant of 1,500,000 common stock purchase options to Fred Luke, the Company’s President, at an exercise price of not less than One Hundred Ten percent (110%) of the ten (10) day lowest trailing average closing bid price of such shares on the date of execution of the Option Agreement (the “Option Agreement”) which was Fourteen cents ($0.14) per share and subject to certain adjustments on November 15, 2016. Concurrent with the Company’s filing with the Nevada Secretary of State’s office, the Company requested and received from the Financial Industry Regulatory Authority, approval for the following: (i) Change the Company’s name from “SmooFi, Inc.” to “NuLife Sciences, Inc.”; (i) Symbol change from “SMFI” to “NULF”; (ii) Increase the number of authorized shares of Preferred Stock to 25,000,000; (iii) Increase the number of authorized shares of Common Stock to 475,000,000; and (iv) Define, with respect to the Preferred Stock, the manner in which the Board may define the powers, preferences, rights, and restrictions thereof. Also on October 31, 2016, the Company adopted a 2016 Non-Qualified Incentive Stock Compensation Plan (the “Compensation Plan”), and reserved 7,000,000 shares for issuance from the Compensation Plan. As of the date of this report no shares have been issued from the Compensation Plan. These changes to our Articles of Incorporation will enable the Company’s board of directors, without further authorization from shareholders, to issue up to 475,000,000 shares of common stock and up to 25,000,000 shares of preferred stock having such rights, privileges, and preferences as determined by the board of directors, for consideration deemed adequate in exchange for such shares. |
NOTE 2 - SUMMARY OF SIGNIFICA21
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Sep. 30, 2016 | |
Summary Of Significant Accounting Policies Policies | |
Basis of Presentation | The Company's financial statements are prepared using the accrual method of accounting. The Company has elected a September 30 fiscal year-end. |
Cash Equivalents | For purposes of the balance sheet and statement of cash flows, the Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents. |
Stock-based compensation | The Company follows ASC 718-10, Stock Compensation |
Use of Estimates and Assumptions | Preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. The Company has adopted the provisions of ASC 260. |
Loss Per Share | The basic loss per share is calculated by dividing the Company's net loss available to common shareholders by the weighted average number of common shares during the year. The diluted loss per share is calculated by dividing the Company's net loss available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. Diluted earnings (loss) per share are the same as basic earnings (loss) per share due to the lack of dilutive items in the Company. |
Fair Value Measurements and Disclosures | Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of September 30, 2016 and 2015. The respective carrying value of certain on-balance-sheet financial instruments, approximate their fair values. These financial instruments include cash, accounts receivable, accounts payable, accrued expenses and notes payable. Fair values were assumed to approximate carrying values for these financial instruments because they are short term in nature and their carrying amounts approximate fair values or they are receivable or payable on demand. The Company uses fair value measurements under the three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure 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 assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. • Level 3 inputs to the valuation methodology are unobservable and significant to the fair value. Fair Value Measurements Level 1 Level 2 Level 3 Convertible notes (net of discount) – September 30, 2016 $ — $ — $ 8,545 Convertible notes (net of discount) – September 30, 2015 $ — $ — $ — Derivative liability – September 30, 2016 $ — $ — $ 169,221 Derivative liability – September 30, 2015 $ — $ — $ — The following table provides a summary of the changes in fair value of the Company’s Promissory Notes, which are both Level 3 liabilities as of September 30, 2016: Balance at September 30, 2015 $ -0- Issuance of notes 100,025 Debt discount on convertible notes (100,025 ) Accretion of debt discount 8,545 Balance September 30, 2016 $ 8,545 The Company determined the value of its convertible notes using a market interest rate and the value of the derivative liability issued at the time of the transaction less the accretion. There is no active market for the debt and the value was based on the delayed payment terms in addition to other facts and circumstances at the end of September 30, 2016 and 2015. |
Derivative Financial Instruments | The Company evaluates our financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, the Company uses the Black-Scholes-Merton pricing model to value the derivative instruments. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. Derivative instruments that become subject to reclassification are reclassified at the fair value of the instrument on the reclassification date. Derivative instrument liabilities will be classified in the balance sheet as current or non-current based on whether or not settlement of the derivative instrument is expected within 12 months of the balance sheet date. The Company estimates the fair value of these instruments using the Black-Scholes option pricing model and the intrinsic value if the convertible notes are due on demand. We have determined that certain convertible debt instruments outstanding as of the date of these financial statements include an exercise price “reset” adjustment that qualifies as derivative financial instruments under the provisions of ASC 815-40, Derivatives and Hedging - Contracts in an Entity’s Own Stock (“ASC 815-40”). Certain of the convertible debentures have a variable exercise price, thus are convertible into an indeterminate number of shares for which we cannot determine if we have sufficient authorized shares to settle the transaction with. Accordingly, the embedded conversion option is a derivative liability and is marked to market through earnings at the end of each reporting period. Any change in fair value during the period recorded in earnings as “Other income (expense) - gain (loss) on change in derivative liabilities.” The following table represents the Company’s derivative liability activity for the period ended: Balance at September 30, 2015 $ — Initial measurement at issuance date of the notes 100,025 Derivative expense 94,595 Change in fair value of derivative at period end (25,399 ) Balance September 30, 2016 $ 169,221 |
Income Taxes | Income taxes are provided in accordance with ASC 740, Income Taxes Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. No provision was made for Federal or State income taxes. |
Advertising | Advertising will be expensed in the period in which it is incurred. There have been no advertising expenses for the reporting periods presented. |
Intangible Assets | Intangible assets with finite lives are amortized over their estimated useful life. The Company monitors conditions related to these assets to determine whether events and circumstances warrant a revision to the remaining amortization period. The Company tests its intangible assets with finite lives for potential impairment whenever management concludes events or changes in circumstances indicate that the carrying amount may not be recoverable. The original estimate of an asset's useful life and the impact of an event or circumstance on either an asset's useful life or carrying value involve significant judgment. |
Recently Issued Accounting Pronouncements | In August 2014, the FASB issued ASU No. 2014-15, "Presentation of Financial Statements — Going Concern (Subtopic 205-40), Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern". Continuation of a reporting entity as a going concern is presumed as the basis for preparing financial statements unless and until the entity's liquidation becomes imminent. Preparation of financial statements under this presumption is commonly referred to as the going concern basis of accounting. Currently, there is no guidance under U.S. GAAP about management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern or to provide related footnote disclosures. The amendments in this Update provide that guidance. In doing so, the amendments should reduce diversity in the timing and content of footnote disclosures. The amendments require management to assess an entity's ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management's plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management's plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). For the period ended September 30, 2016, management evaluated the Company's ability to continue as a going concern and concluded that substantial doubt has not been alleviated about the Company's ability to continue as a going concern. While the Company continues to explore further significant sources of financing, management's assessment was based on the uncertainty related to the amount and nature of such financing over the next twelve months. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which supersedes the existing guidance for lease accounting, Leases (Topic 840). ASU 2016-02 requires lessees to recognize leases on their balance sheets, and leaves lessor accounting largely unchanged. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early application is permitted for all entities. ASU 2016-02 requires a modified retrospective approach for all leases existing at, or entered into after, the date of initial application, with an option to elect to use certain transition relief. The Company is currently evaluating the impact of this new standard on its consolidated financial statements. The Company reviewed all recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the AICPA, and the SEC and they did not or are not believed by management to have a material impact on the Company's present or future financial statements. |
NOTE 8 - CONVERTIBLE NOTES (Tab
NOTE 8 - CONVERTIBLE NOTES (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Convertible notes | September 30, September 30, Convertible note payable, annual interest rate of 8%, convertible into common stock at a variable rate per share and due December 2017. $ 50,025 $ -0- Convertible note payable, annual interest rate of 10%, convertible into common stock at a variable rate per share and due August 2019. 50,000 -0- Unamortized debt discount (91,480 ) -0- 8,545 -0- Less current portion -0- -0- Convertible debt, net of current portion and debt discount $ 8,545 $ -0- |
NOTE 9 - DERIVATIVE LIABILITY (
NOTE 9 - DERIVATIVE LIABILITY (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Determination of embeded debt derivative | (1) dividend yield of 0%; (2) expected volatility of 243% - 413%, (3) risk-free interest rate of 0.50% - 0.88%, (4) expected life of 1-3 years, and (5) fair value of the Company’s common stock of $0.11 per share. |
Derivative liability activity | Balance at September 30, 2015 $ – Initial measurement at issuance date of the notes 100,025 Derivative expense 94,595 Change in fair value of derivative at period end (25,399 ) Balance September 30, 2016 $ 169,221 |
Components of the Company's derivative financial instruments | 2016 2015 Embedded conversion features $ – $ – Derivative financial instruments $ – $ – |
NOTE_11 - INCOME TAXES (Tables)
NOTE 11 - INCOME TAXES (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Net deferred tax assets | As of As of Deferred tax assets: Net operating tax carryforwards $ 365,113 $ 254,373 Other — — Gross deferred tax assets 365,113 254,373 Valuation allowance (365,113 ) (254,373 ) Net deferred tax assets $ — $ — |
Reconciliation of income taxes and the expected tax benefit | 2016 2015 Income tax benefit at federal statutory rate (34.00 )% (34.00 )% State income tax benefit, net of effect on federal taxes (5.00 )% (5.00 )% Valuation allowance 39.00 39.00 % Effective rate 0.00 0.00 % |
NOTE 8 - CONVERTIBLE NOTES - Co
NOTE 8 - CONVERTIBLE NOTES - Convertible notes (Details) - USD ($) | Sep. 30, 2016 | Sep. 30, 2015 |
Convertible note payable, due December 2017 | ||
Convertible note payable | $ 50,025 | $ 0 |
Unamortized debt discount | (91,480) | 0 |
Less current portion | 0 | 0 |
Convertible debt, net of current portion and debt discount | 8,545 | 0 |
Convertible note payable, due August 2019 | ||
Convertible note payable | 50,000 | 0 |
Unamortized debt discount | (50,000) | 0 |
Less current portion | 0 | 0 |
Convertible debt, net of current portion and debt discount | $ 0 | $ 0 |
NOTE 9 - DERIVATIVE LIABILITY -
NOTE 9 - DERIVATIVE LIABILITY - Determination of embeded debt derivative (Details) | 12 Months Ended |
Sep. 30, 2016$ / shares | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Dividend yield of | 0.00% |
Volatility minimum | 243.00% |
Volatility maximum | 413.00% |
Risk free rate minimum | 0.50% |
Risk free rate maximum | 0.88% |
Expected life of | 3 years |
Fair value of the Company's common stock of | $ .11 |
NOTE 9 - DERIVATIVE LIABILITY27
NOTE 9 - DERIVATIVE LIABILITY - Derivative liability activity (Details) | 12 Months Ended |
Sep. 30, 2016USD ($) | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Balance at September 30, 2015 | $ 0 |
Initial measurement at issuance date of the notes | 100,025 |
Derivative expense | 94,595 |
Change in fair value of derivative at period end | (25,399) |
Balance September 30, 2016 | $ 169,221 |
NOTE 9 - DERIVATIVE LIABILITY28
NOTE 9 - DERIVATIVE LIABILITY - Components of the Company's derivative financial instruments (Details) | 12 Months Ended |
Sep. 30, 2016USD ($) | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Embedded conversion features | $ 0 |
Derivative financial instruments | $ 0 |
NOTE_11 - INCOME TAXES - Net de
NOTE 11 - INCOME TAXES - Net deferred tax assets (Details) - USD ($) | Sep. 30, 2016 | Sep. 30, 2015 |
Deferred tax assets: | ||
Net operating tax carryforwards | $ 365,113 | $ 254,373 |
Other | 0 | 0 |
Gross deferred tax assets | 365,113 | 254,373 |
Valuation allowance | (365,113) | (254,373) |
Net deferred tax assets | $ 0 | $ 0 |
NOTE_11 - INCOME TAXES - Reconc
NOTE 11 - INCOME TAXES - Reconciliation of income taxes and the expected tax benefit (Details) | 12 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Income Tax Disclosure [Abstract] | ||
Income tax benefit at federal statutory rate | (3400.00%) | (3400.00%) |
State income tax benefit, net of effect on federal taxes | (500.00%) | (500.00%) |
Valuation allowance | 3900.00% | 39.00% |
Effective rate | 3400.00% | 3400.00% |
NOTE 3 - GOING CONCERN (Details
NOTE 3 - GOING CONCERN (Details Narrative) - USD ($) | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 |
Going Concern Details Narrative | |||
Working capital | $ (787,683) | $ (271,512) | $ 7,098 |
Accumulated deficit | $ (1,211,508) | $ (652,239) |
NOTE 4 - PREPAID EXPENSES (Deta
NOTE 4 - PREPAID EXPENSES (Details Narrative) - USD ($) | Sep. 30, 2016 | Sep. 30, 2015 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid legal expenses | $ 0 | $ 3,165 |
NOTE 5 - NOTES RECEIVABLE (Deta
NOTE 5 - NOTES RECEIVABLE (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Note receivable | $ 25,241 | $ 0 |
Total outstanding including accrued interest | (25,000) | $ 0 |
Promissory Note (1) | ||
Note receivable | $ 46,400 | |
Interest rate | 8.00% | |
Promissory Note (2) | ||
Note receivable | $ 25,000 | |
Interest rate | 8.00% | |
Total outstanding including accrued interest | $ 25,241 | |
Promissory Note (1) | ||
Terms of the Note | On January 15, 2016, the Company entered into a secured promissory note in the amount of $46,400 to advance funds to the sellers of certain farm property in Colorado the Company was seeking to purchase. Closing was subject to financing and other contingencies per a non-binding Letter of Intent. This note had an interest rate of 8% per annum, with principal and unpaid and accrued interest originally due on June 30, 2016. On March 31, 2016, the Company entered into Amendment #1 to this note to (i) extend the due date to June 30, 2016, unless the contemplated transaction closes prior thereto, in which case the note will be cancelled, (ii) reduce the principal to $31,400 to characterize $15,000 of the funds transferred to sellers as a non-refundable earnest money payment and (iii) stipulate that interest is to accrue on the lower $31,400 principal since inception. On June 30, 2016, the Company entered into Amendment #2 to this note to (i) extend the due date to September 30, 2016, unless the contemplated transaction closes prior thereto, in which case the note will be cancelled. On September 30, 2016, the Company determined this note to no longer be collectible. As such, the principal amount of $31,400, the non-refundable deposit amount of $15,000 and accrued interest in the amount of $2,228 was written off and included in operating expense for the year ended September 30, 2016. |
NOTE_6 - CONSULTING AGREEMENT (
NOTE 6 - CONSULTING AGREEMENT (Details Narrative) | 12 Months Ended |
Sep. 30, 2016USD ($) | |
Notes to Financial Statements | |
Consulting agreement monthly fee | $ 8,500 |
NOTE 7 - NOTES PAYABLE (Details
NOTE 7 - NOTES PAYABLE (Details Narrative) | Sep. 30, 2016USD ($) |
Notes Payable (1) | |
Note Payable | $ 25,000 |
Accrued interest | 12,156 |
Notes Payable (2) | |
Note Payable | 74,500 |
Accrued interest | $ 5,038 |
NOTE 10 - SHARE CAPITAL (Detail
NOTE 10 - SHARE CAPITAL (Details Narrative) - shares | Oct. 31, 2016 | Sep. 30, 2016 | Sep. 30, 2015 |
Common Stock; Shares Issued | 31,085,800 | 30,385,800 | |
Common Stock; Shares Outstanding | 31,085,800 | 30,385,800 | |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | |
Common stock, shares authorized | 200,000,000 | 200,000,000 | |
Amended and Restated Articles of Incorporation | |||
Preferred stock, shares authorized | 25,000,000 | ||
Common stock, shares authorized | 475,000,000 | ||
Common Stock | |||
Common Stock; Shares Issued | 30,385,800 | 31,085,800 | |
Common Stock; Shares Outstanding | 30,385,800 | 31,085,800 |
NOTE_11 - INCOME TAXES (Details
NOTE 11 - INCOME TAXES (Details Narrative) - USD ($) | Sep. 30, 2016 | Sep. 30, 2015 |
Operating loss carry forwards | $ 365,113 | $ 254,373 |
Income Taxed | ||
Operating loss carry forwards | $ 936,186 |
NOTE 12 - RELATED PARTY TRANS38
NOTE 12 - RELATED PARTY TRANSACTIONS (Details Narrative) | 12 Months Ended |
Sep. 30, 2016USD ($) | |
Note 12 - Related Party Transactions Details Narrative | |
Notes payable issued and outstanding | $ 74,500 |
Accrued interest | $ 5,038 |
NOTE 14_- SUBSEQUENT EVENTS (De
NOTE 14 - SUBSEQUENT EVENTS (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended |
Dec. 31, 2016 | Sep. 30, 2016 | |
Subsequent Events [Abstract] | ||
Series B Preferred stock, shares issued | 10,000,000 | |
Convertible promissory notes | $ 540,000 | $ 50,000 |
Common stock purchase options | 1,500,000 |