Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Jun. 30, 2016 | Aug. 19, 2016 | |
Document And Entity Information | ||
Entity Registrant Name | Stratean Inc. | |
Entity Central Index Key | 827,876 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --09-30 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | No | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 27,684,420 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,015 |
Balance Sheets
Balance Sheets - USD ($) | Jun. 30, 2016 | Sep. 30, 2015 |
Current assets | ||
Cash | $ 81,854 | $ 88,533 |
Prepaid expense | 11,912 | 24,391 |
Total current assets | 93,766 | 112,924 |
Deposits | 589 | 2,358 |
Fixed Assets | 635,495 | 657,647 |
Intangible assets | 51,175 | 44,470 |
Total assets | 781,025 | 817,399 |
Current liabilities | ||
Accounts payable and accrued liabilities | 60,189 | 53,967 |
Due to related parties | 1,473 | 1,473 |
Total current liabilities | 61,662 | 55,440 |
Total liabilities | 61,662 | 55,440 |
Stockholders' equity (deficit) | ||
Common stock; $0.001 par value; 100,000,000 shares authorized; 21,058,415 and 20,378,415 shares issued and outstanding as of June 30, 2016 and September 30, 2015, respectively | 21,086 | 2,037 |
Preferred stock; $0.001 par value; 10,000,000 shares authorized; 1,000,000 and 400,000 shares issued and outstanding as of June 30, 2016 and September 30, 2015, respectively | 1,000 | 400 |
Additional paid-in capital | 4,987,424 | 4,635,459 |
Accumulated earnings (deficit) | (4,290,147) | (3,894,278) |
Total stockholders' equity (deficit) | 719,363 | 761,959 |
Total liabilities and stockholders' equity (deficit) | $ 781,025 | $ 817,399 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2016 | Sep. 30, 2015 |
Statement of Financial Position [Abstract] | ||
Common Stock, par value | $ 0.001 | $ 0.001 |
Common Stock, Shares authorized | 100,000,000 | 100,000,000 |
Common Stock, shares issued | 21,058,415 | 20,378,415 |
Preferred Stock, par value | $ 0.001 | $ 0.001 |
Preferred Stock, Shares authorized | 10,000,000 | 10,000,000 |
Preferred Stock, Shares issued | 1,000,000 | 400,000 |
Statements of Operations
Statements of Operations - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Income Statement [Abstract] | ||||
Revenues | ||||
Cost of revenues | ||||
Gross Profit | ||||
Operating expenses | ||||
Professional fees | 54,403 | 45,713 | 268,560 | 3,336,369 |
Research and development | 50,000 | 74 | 51,826 | 52,288 |
General and administrative expenses | 15,674 | 8,258 | 42,293 | 39,170 |
Depreciation and amortization | 13,426 | 731 | 33,911 | 2,060 |
Total operating expenses | 133,503 | 54,776 | 396,590 | 3,429,887 |
Loss from operations | (133,503) | (54,776) | (396,590) | (3,429,887) |
Other income (expense) | ||||
Interest expense | 5,144 | |||
Gain on disposal of assets | 721 | |||
Total other income (expense) | 721 | 5,144 | ||
Net income (loss) | $ (133,503) | $ (54,776) | $ (395,869) | $ (3,435,031) |
Basic income (loss) per common share | $ (0.01) | $ 0 | $ (0.02) | $ (0.18) |
Basic weighted average common shares outstanding | 21,058,415 | 20,378,415 | 20,842,065 | 18,841,734 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) | 9 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Cash Flows from Operating Activities | ||
Net loss | $ (395,869) | $ (3,435,031) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Imputed interest on related party debt | 5,143 | |
Stock based consulting | 149,126 | 3,228,517 |
Depreciation and amortization | 33,267 | 2,060 |
Changes in assets and liabilities | ||
(Increase) decrease in prepaid expense | (850) | 1,143 |
(Increase) decrease in deposits | 1,769 | (2,358) |
Increase (decrease) in accounts payable | 6,222 | (3,381) |
Increase (decrease) in accounts payable related party | ||
Net cash from operating activities | (206,335) | (203,907) |
Cash Flows from investing | ||
Purchase of intangible assets | (6,315) | (2,594) |
Purchase of fixed assets | (9,750) | (26,304) |
Gain on disposal of fixed assets | 721 | |
Net cash used in investing activities | (15,344) | (28,898) |
Cash Flows from Financing Activities | ||
Proceeds from issuance of common stock | 215,000 | 242,000 |
Net cash from financing activities | 215,000 | 242,000 |
Net increase (decrease) in Cash | (6,679) | 9,195 |
Beginning cash balance | 88,533 | 116,741 |
Ending cash balance | 81,854 | 125,936 |
Supplemental disclosure of cash flow information | ||
Cash paid for interest | ||
Cash paid for tax | ||
Non-Cash investing and financing transactions | ||
Shares issued for debt | $ 50,000 | |
Shares issued for services | 11,666 | 690,000 |
Options and warrants for services | $ 138,005 | $ 2,556,296 |
BASIS OF PRESENTATION AND GOING
BASIS OF PRESENTATION AND GOING CONCERN | 9 Months Ended |
Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION AND GOING CONCERN | 1. BASIS OF PRESENTATION AND GOING CONCERN The accompanying unaudited interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited financial statements and notes thereto contained in the Companys most recent Annual Financial Statements filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim period presented have been reflected herein. The results of operations for the interim period are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal period, as reported in the Form 10-K, have been omitted. Going concern |
SUMMARY OF SIGNIFICANT POLICIES
SUMMARY OF SIGNIFICANT POLICIES | 9 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT POLICIES | 2. SUMMARY OF SIGNIFICANT POLICIES This summary of significant accounting policies of Stratean Inc. is presented to assist in understanding the Companys financial statements. The financial statements and notes are representations of the Companys management, who are responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America, and have been consistently applied in the preparation of the financial statements. Use of estimates Cash and cash equivalents Fair Value of Financial Instruments As required by the Fair Value Measurements and Disclosures Topic of the FASB ASC, fair value is measured based on a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted prices in active markets; (Level 2) inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and (Level 3) unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. The three levels of the fair value hierarchy are described below: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2: Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity). Revenue recognition Long-lived Assets Stock-based compensation Compensation-Stock Compensation, Non-Employee Stock Based Compensation Earnings (loss) per share Earnings Per Share, Recently Issued Accounting Pronouncements |
FIXED ASSETS
FIXED ASSETS | 9 Months Ended |
Jun. 30, 2016 | |
Property, Plant and Equipment [Abstract] | |
FIXED ASSETS | 3. FIXED ASSETS Fixed assets consist of the following as of June 30, 2016 and September 30, 2015 June 30, 2016 September 30, 2015 Machinery and equipment $ 665,006 $ 654,918 Tenant improvements - 1,533 Furniture and fixtures 2,202 1,475 Total 667,208 657,926 Less: accumulated depreciation (31,713 ) (279 ) Fixed assets, net $ 635,495 $ 657,647 Depreciation expense for the nine months ended June 30, 2016 and 2015 was $31,825 and $187, respectively. |
INTANGIBLE AND OTHER ASSETS
INTANGIBLE AND OTHER ASSETS | 9 Months Ended |
Jun. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE AND OTHER ASSETS | 4. INTANGIBLE AND OTHER ASSETS Intangible assets consist of the following as of June 30, 2016 and September 30, 2015 June 30, 2016 September 30, 2015 Patents $ 60,387 $ 51,596 Less: accumulated amortization (9,212 ) (7,126 ) Intangible assets, net $ 51,175 $ 44,470 Amortization expense for the nine months ended June 30, 2016 and 2015 was $2,086 and $1,873, respectively. On April 26, 2016, the Company entered into Stock Purchase Agreement with James Harper (the "Agreement") to acquire a patent from Mr. Harper as represented in an Assignment of even date. Specifically, the Agreement grants 7,500, shares of the Companys common stock to Mr. Harper in exchange for the Assignment of United States Patent No. 8,342829 issued January 8, 2013 by the United States Patent and Trademark Office (the Patent). The Assignment transfers the Patent and all rights associated therewith to the Company. Through this Assignment, the Company is now the sole owner of the Patent, which is an invention entitled Electrolytic Reactor and Related Methods for Supplementing the Air Intake of an Internal Combustion Engine. The Company anticipates integrating this technology, in whole or in part, into its downdraft gasification system, enabling the capture and conversion of process byproducts into incremental energy. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Jun. 30, 2016 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | 5. RELATED PARTY TRANSACTIONS On October 1, 2014 the Company entered into a Consulting agreement with Matthew Schultz, its Chief Financial Officer for management services. In accordance with this agreement, Mr. Schultz provides services to the Company in exchange for $7,500 per month plus reimbursable expenses incurred. The term of the agreement is one month and automatically renews each month until cancelled by either party. During the nine months ending June 30, 2016, Mr. Schultz was paid $67,500 in accordance with this agreement. |
PREPAID EXPENSES
PREPAID EXPENSES | 9 Months Ended |
Jun. 30, 2016 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
PREPAID EXPENSES | 6. PREPAID EXPENSES The Board of Directors created a Board of Advisors to provide the Officers and Directors with advice and insight and appointed Brad Patee to serve as a member of the board of advisors for a period of one year. As compensation for his appointment, Mr. Patee was granted 180,000 non-statutory options under the following terms: non-transferable, fully vest on March 31, 2015, expire five years from the date of grant, strike price of $0.083 and become immediately exercisable upon the occurrence of a significant liquidating, restructuring or change of control event. The 180,000 stock options were valued at $54,411 using the Black-Scholes option pricing model based upon the following assumptions: term of 5 years, risk free interest rate of 2.11%, a dividend yield of 0% and volatility rates of 110%. The amount was capitalized as a prepaid expense and will be amortized over a twelve-month term, during the nine months ended June 30, 2016 the Company recorded an expense of $24,232. On January 22, 2016, the Company appointed Mr. Greg Gohlinghorst as a member of the Companys board of advisors. He was issued 35,000 shares of common stock for his appointment. The shares were valued at $11,666 or $0.33 per share. The amount was capitalized as a prepaid expense and will be amortized over a twelve-month term, during the nine months ended June 30, 2016 the Company recorded an expense of $7,299. On January 15, 2016, we entered into an Investor Relations Consulting Agreement with Hayden IR (HIR) to serve as our investor relations firm for a period of twelve months. Under the Agreement, HIRs responsibilities include: implementing and maintaining an ongoing market support system to expand awareness of our company in the investment community; arranging conference calls and interviews; providing feedback on expectations of results and company value; assisting with the presentation of periodic results of operations; monitoring newswires and industry publications; drafting and coordinating press releases, among other services. As compensation for the services under the Agreement, we agreed to pay HIR a cash monthly fee of $3,500 for the first six months of the Agreement. The monthly fee will increase to $6,500 for the last six months of the Agreement. We also agreed to issue to HIR 20,000 shares of restricted common stock within 30 days of execution. The shares were valued at $6,720 or $0.33 per share. The Stock compensation has been recorded as a prepaid expense and will be amortized evenly over the twelve-month service period. As of June 30, 2016 the company has recorded $3,075 in stock based compensation associated with this agreement. |
STOCKHOLDERS EQUITY (DEFICIT)
STOCKHOLDERS EQUITY (DEFICIT) | 9 Months Ended |
Jun. 30, 2016 | |
Equity [Abstract] | |
STOCKHOLDERS EQUITY (DEFICIT) | 7. STOCKHOLDERS EQUITY (DEFICIT) Overview Our authorized capital stock consists of 100,000,000 shares of common stock and 10,000,000 shares of preferred stock, par value $0.001 per share. As of June 30, 2016, there were 21,058,415 shares of our common stock issued and outstanding and 1,000,000 shares of preferred stock issued and outstanding. Description of Common Stock Our common stock is entitled to one vote per share on all matters submitted to a vote of the stockholders, including the election of directors. Except as otherwise required by law or provided in any resolution adopted by our board of directors with respect to any series of preferred stock, the holders of our common stock will possess all voting power. Generally, all matters to be voted on by stockholders must be approved by a majority (or, in the case of election of directors, by a plurality) of the votes entitled to be cast by all shares of our common stock that are present in person or represented by proxy, subject to any voting rights granted to holders of any preferred stock. Holders of our common stock representing fifty percent (50%) of our capital stock issued, outstanding and entitled to vote, represented in person or by proxy, are necessary to constitute a quorum at any meeting of our stockholders. A vote by the holders of a majority of our outstanding shares is required to effectuate certain fundamental corporate changes such as a liquidation, merger or an amendment to our articles of incorporation. Subject to any preferential rights of any outstanding series of preferred stock created by our board of directors from time to time, the holders of shares of our common stock will be entitled to such cash dividends as may be declared from time to time by our board of directors from funds available therefor. Subject to any preferential rights of any outstanding series of preferred stock created from time to time by our board of directors, upon liquidation, dissolution or winding up, the holders of shares of our common stock will be entitled to receive pro rata all assets available for distribution to such holders. In the event of any merger or consolidation of our company with or into another company in connection with which shares of our common stock are converted into or exchangeable for shares of stock, other securities or property (including cash), all holders of our common stock will be entitled to receive the same kind and amount of shares of stock and other securities and property (including cash). Holders of our common stock have no pre-emptive rights, no conversion rights and there are no redemption provisions applicable to our common stock. Description of Preferred Stock Our board of directors is authorized to divide the authorized shares of our preferred stock into one or more series, each of which must be so designated as to distinguish the shares of each series of preferred stock from the shares of all other series and classes. Our board of directors is authorized, within any limitations prescribed by law and our articles of incorporation, to fix and determine the designations, rights, qualifications, preferences, limitations and terms of the shares of any series of preferred stock, including, but not limited to, the following: · the rate of dividend, the time of payment of dividends, whether dividends are cumulative, and the date from which any dividends accrue; · whether shares may be redeemed, and, if so, the redemption price and the terms and conditions of redemption; · the amount payable upon shares in the event of voluntary or involuntary liquidation; · sinking fund or other provisions, if any, for the redemption or purchase of shares; · the terms and conditions on which shares may be converted, if the shares of any series are issued with the privilege of conversion; · voting powers, if any, provided that if any of the preferred stock or series thereof have voting rights, such preferred stock or series shall vote only on a share for share basis with the common stock on any matter, including, but not limited to, the election of directors, for which such preferred stock or series has such rights; and, · subject to the foregoing, such other terms, qualifications, privileges, limitations, options, restrictions, and special or relative rights and preferences, if any, of shares or such series as the board of directors may, at the time so acting, lawfully fix and determine under the laws of the State of Nevada. On April 15, 2015, the Company filed a Certificate of Amendment to the Companys Articles of Incorporation (the Certificate of Amendment) with the Nevada Secretary of State. The Certificate of Amendment authorized ten million (10,000,000) shares of preferred stock. The Companys Board of Directors and a majority of its shareholders approved the Certificate of Amendment. On April 15, 2015, pursuant to Article IV of our Articles of Incorporation, the Companys Board of Directors voted to designate a class of preferred stock entitled Series A Preferred Stock, consisting of up to one million (1,000,000) shares, par value $0.001. Under the Certificate of Designation, holders of Series A Preferred Stock will be entitled to quarterly dividends on 2% of our earnings before interest, taxes and amortization. The dividends are payable in cash or common stock. The holders will also have a liquidation preference on the state value of $0.02 per share plus any accumulated but unpaid dividends. The holders are further entitled to have the Company redeem their Series A Preferred Stock for three shares of common stock in the event of a change of control and they are entitled to vote together with the holders of the Companys common stock on all matters submitted to shareholders at a rate of forty-five (45) votes for each share held. On June 30, 2016, the Company issued a total of 600,000 shares of its Series A Preferred Stock to the four members of the Companys board of directors for services rendered. During the period commencing October 1, 2015 through March 31, 2016, the Company received $215,000 from 16 investors pursuant to private placement agreements with the investors to purchase 645,000 shares of Stratean $0.001 par value common stock and warrants to purchase 64,500 shares of Stratean $0.001 par value common stock at a purchase price equal to $0.33 for each share of Common stock and 10% warrant coverage. The warrant allows the holder to purchase shares of the Company's $0.001 par value common stock at $0.367 per share. The Company did not accept any private placements during the quarter ending June 30, 2016. |
STOCK WARRANTS
STOCK WARRANTS | 9 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
STOCK WARRANTS | 8. STOCK WARRANTS The following is a summary of warrants activity during the year ended September 30, 2015 and nine months ending June 30, 2016. Number of Shares Weighted Average Exercise Price Balance, September 30, 2014 60,000 $ 0.36 Warrants granted and assumed 8,037,600 $ 0.10 Warrants expired Warrants canceled Warrants exercised Balance, September 30, 2015 8,097,600 $ 0.10 Warrants granted and assumed 514,500 $ 0.36 Warrants expired Warrants canceled Warrants exercised Balance, June 30, 2016 8,612,100 $ 0.11 As of June 30, 2016, 8,612,100 warrants are exercisable. On January 22, 2016, the Company issued warrants to purchase 450,000 shares of common stock to a Mr. Greg Gohlinghorst for business advisory services. The warrants were valued at $116,811 using the Black Scholes option pricing model based upon the following assumptions: term of 5 years, risk free interest rate of 1.49%, a dividend yield of 0% and volatility rate of 110%. The warrants were fully earned and vested on January 31, 2016. |
DEFINITIVE AGREEMENTS
DEFINITIVE AGREEMENTS | 9 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
DEFINITIVE AGREEMENTS | 9. DEFINITIVE AGREEMENTS Combustion Resources, Inc. On December 5, 2014, the Company and Combustion Resources, Inc. ("Combustion Resources") executed a Service Agreement ("Agreement") to independently test the Companys Gasifier to further establish its capability of producing large volumes of clean, renewable energy from any carbon compound (Municipal Solid Waste (MSW), Coal, Sewage Sludge) into clean Synthesis Gas. The testing will be comprised of seven stages. As of the date of this filing, Combustion Resources had completed stages one through five. Upon completion of the fifth stage an initial project report was published outlining the results and suggested improvements. The Company is preparing the suggested improvements and anticipates that the cost of these improvements will be between $50,000 to $75,000. It is anticipated that improvements and the remaining stages will be completed prior to December 31, 2016. Each of the seven stages are briefly outlined below. 1. Characterize Feedstock: 2. Review Design Data: 3. Prepare Gasifier for Test Runs: 4. Preliminary Test Runs of Gasifier: 5. Perform Baseline Run of Gasifier: 6. Perform Extended Run of Gasifier: 7. Project Report: Pursuant to the Agreement, the Company will make payments totaling $147,144. On December, 9, 2014, the Company made an initial payment of $50,000 to begin the project. Another $50,000 will be due upon completion of task five and the balance of $47,144 is due upon delivery of the Final Project report. As of the date of this filing Combustion Resources has not issued a request for payment or an invoice for the second payment, the Company intends to remit payment upon presentation of this such notice. Appointment of Corporate Secretary Effective May 2, 2016, the Company entered into an agreement with Mr. Thompson to act as the Companys Secretary. The agreement will have an initial term of 180 days with a right for the Company to renew following the term. Under the agreement, the Company agreed to compensate Mr. Thompson, based on his performance, with a combination of shares of common stock and cash, not to exceed 150,000 shares of common stock and $150,000. As of the date of this filing no Compensation has earned or been paid. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Jun. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 10. COMMITMENTS AND CONTINGENCIES On January 22, 2016, the Company terminated its lease agreement at 2391 South 1560 West, Unit B, Woods Cross Utah and relocated its corporate office to 70 north Main Street, Suite 105, Bountiful Utah 84010. The Company executed a one-year lease agreement that calls for the Company to make payments of $850 per month. The Company has prepaid rent for January 2017. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Jun. 30, 2016 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 11. SUBSEQUENT EVENTS On July 1, 2016, Stratean, Inc. and Cleanspark II, LLC, a wholly-owned subsidiary of Stratean, Inc. (together, the Company), entered into an Asset Purchase Agreement, as amended (the Purchase Agreement) with CleanSpark Holdings LLC, CleanSpark LLC, CleanSpark Technologies LLC and Specialized Energy Solutions, Inc. (together, the Seller). The closing of the transactions contemplated by the Purchase Agreement, as amended, occurred on July 1, 2016 (the Closing Date). On the Closing Date, pursuant to the Purchase Agreement, the Company acquired all the assets (the Assets) and assume certain liabilities (the Assumed Liabilities) related to Seller and its line of business. The Assets the Company purchased from Seller include: Equipment and other tangible assets; Domain names, websites and intellectual property; All rights to causes of action, lawsuits, judgments, claims and demands of any nature available to or being pursued by the Seller; Contracts to which Seller is bound; Current and future customer accounts, including accounts receivable; All investments, including the holdings that CleanSpark Holdings LLC has in CleanSpark LLC, CleanSpark Technologies LLC and Specialized Energy Solutions, Inc., and any investments those subsidiaries have as well; and Any other assets of any nature whatsoever that are related to or used in connection with the business of Seller and its goodwill. On July 20, 2016, the parties to the Purchase Agreement entered into an amendment (the Amendment) that revised the assets to be acquired under the Purchase Agreement. Specifically, the parties decided on the following: Specialized Energy Solutions, Inc. would transfer and assign the ability to use its name and all of its Intellectual Property to Cleanspark II, LLC, and thereafter Specialized Energy Solutions, Inc. will not be included in the Assets acquired. Clean Spark Technologies, LLC agrees to transfer and assign all of its Intellectual Property to Cleanspark II, LLC, and thereafter Clean Spark Technologies, LLC will not be included in the Assets acquired. The Amendment also included an option to acquire Specialized Energy Solutions, Inc. and Clean Spark Technologies, LLC, which the parties agreed upon as follows: Cleanspark II, LLC is hereby granted a 3-year exclusive option to purchase Specialized Energy Solutions, Inc. for 1,000 shares of Stratean Common Stock; and Cleanspark II, LLC is hereby granted a 3-year exclusive option to purchase Clean Spark Technologies, LLC for 1,000 shares of Stratean Common Stock. On August 19, 2016, the parties to the Purchase Agreement entered into a second amendment that revised the Closing Date to July 1, 2016. In exchange for the Assets, the Company assumed the Assumed Liabilities, consisting of certain accounts payable amounting to approximately $200,000 arising out of the Assets. The Company also issued to Seller six million (6,000,000) shares of common stock and two-year warrants to purchase four million five hundred thousand (4,500,000) shares of common stock at an exercise price of $1.50 per share. Simultaneously with the Purchase Agreement, the Company entered into certain ancillary agreements (the Ancillary Agreements) with Seller, consisting of a bill of sale, intellectual property assignment and lock-up/leak-out agreement. The lock-up/leak-out agreement prevents Seller from selling the Companys securities in the public market for a year. The Purchase Agreement contains customary representations, warranties and covenants. In addition, the Company and Seller agreed to certain post-closing covenants, including the following: The board of directors of the Company shall have approval and oversight over a management developed budget to exploit the Assets and will work with the management of CleanSpark II, LLC, to which the Assets have been transferred. For a period of nine months from the Closing Date, the Company agrees to fund on a monthly basis all pre-approved budgetary needs for CleanSpark II, LLC to achieve its business objectives. The strategic management of Cleanspark II, LLC shall be determined by the board of directors of the Company. Management shall be appointed for Cleanspark II, LLC and they shall control the day-to-day operations of Cleanspark II, LLC, subject to the oversight of the Company and its board of directors. Employment agreements for appointed management of Cleanspark II, LLC will be negotiated prior to close but will hold an effective date post-closing. The parties shall jointly agree to a business plan for Cleanspark II, LLC within sixty (60) days of closing. Within thirty (30) days of the Closing Date, the Company agrees to appoint one (1) candidate chosen by Seller to the board of directors of the Company. The Companys board of directors still maintains exclusive rights to accept the suggested appointment and in the case the suggested appointment is rejected by the board, Seller will have the right to present a new candidate until such time as the candidate is approved by the Companys board of directors. The term of the appointment of Sellers member of the board shall be in accordance with the Companys bylaws. The Company will appoint an accounting firm of its choosing to maintain Sellers financial records to ensure compliance with US GAAP. Within 71 days of closing, Seller shall provide the Company with an audit for the two latest fiscal year periods and reviewed financials for an interim period ending June 30, 2016 prepared by Sellers independent auditor, satisfactory to the Company. |
BASIS OF PRESENTATION AND GOI17
BASIS OF PRESENTATION AND GOING CONCERN (Policies) | 9 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Going Concern | The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred cumulative net losses of $(4,290,118) since its inception and requires capital for its contemplated operational and marketing activities to take place. The Companys ability to raise additional capital through the future issuances of common stock is unknown. The obtainment of additional financing, the successful development of the Companys contemplated plan of operations, and its transition, ultimately, to the attainment of profitable operations are necessary for the Company to continue operations. The ability to successfully resolve these factors raise substantial doubt about the Companys ability to continue as a going concern. The financial statements of the Company do not include any adjustments that may result from the outcome of these aforementioned uncertainties. |
SUMMARY OF SIGNIFICANT POLICI18
SUMMARY OF SIGNIFICANT POLICIES (Policies) | 9 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Use of Estimates | The process of preparing financial statements in conformity with accounting principles generally accepted in the United States of America requires the use of estimates and assumptions regarding certain types of assets, liabilities, revenues, and expenses. Such estimates primarily relate to unsettled transactions and events as of the date of the financial statements. Accordingly, upon settlement, actual results may differ from estimated amounts. |
Cash and cash equivalents | For purposes of the statement of cash flows, the Company considers all highly liquid investments and short-term debt instruments with original maturities of three months or less to be cash equivalents. There was $81,854 and $88,533 in cash and cash equivalents as of June 30, 2016 and September 30, 2015, respectively. |
Fair Value of Financial Instruments | The carrying amounts reflected in the balance sheets for cash, accounts payable and accrued expenses approximate the respective fair values due to the short maturities of these items. The Company does not hold any investments that are available-for-sale. As required by the Fair Value Measurements and Disclosures Topic of the FASB ASC, fair value is measured based on a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted prices in active markets; (Level 2) inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and (Level 3) unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. The three levels of the fair value hierarchy are described below: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2: Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity). |
Revenue recognition | The Company recognizes revenue on arrangements in accordance with Securities and Exchange Commission Staff Accounting Bulletin No. 101, Revenue Recognition in Financial Statements and No. 104, Revenue Recognition. In all cases, revenue is recognized only when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service is performed and collectability is reasonably assured. For the periods ended June 30, 2016 and 2015 the Company reported revenues of $nil and $nil, respectively. |
Long-lived Assets | In accordance with the Financial Accounting Standards Board ("FASB") Accounts Standard Codification (ASC) ASC 360-10, "Property, Plant and Equipment," the carrying value of intangible assets and other long-lived assets is reviewed on a regular basis for the existence of facts or circumstances that may suggest impairment. The Company recognizes impairment when the sum of the expected undiscounted future cash flows is less than the carrying amount of the asset. Impairment losses, if any, are measured as the excess of the carrying amount of the asset over its estimated fair value. |
Stock-based compensation | The Company follows the guidelines in FASB Codification Topic ASC 718-10 Compensation-Stock Compensation, |
Non-Employee Stock Based Compensation | The Company accounts for stock based compensation awards issued to non-employees for services, as prescribed by ASC 718-10, at either the fair value of the services rendered or the instruments issued in exchange for such services, whichever is more readily determinable, using the measurement date guidelines enumerated in ASC 505-50. The Company may issue compensatory shares for services including, but not limited to, executive, management, accounting, operations, corporate communication, financial and administrative consulting services. |
Earnings (loss) per share | The Company reports earnings (loss) per share in accordance with Financial Accounting Standards Boards (FASB) Accounting Standards Codification (ASC) 260-10 Earnings Per Share, |
FIXED ASSETS (Tables)
FIXED ASSETS (Tables) | 9 Months Ended |
Jun. 30, 2016 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property Pant and Equipment | June 30, 2016 September 30, 2015 Machinery and equipment $ 665,006 $ 654,918 Tenant improvements - 1,533 Furniture and fixtures 2,202 1,475 Total 667,208 657,926 Less: accumulated depreciation (31,713 ) (279 ) Fixed assets, net $ 635,495 $ 657,647 |
INTANGIBLE AND OTHER ASSETS (Ta
INTANGIBLE AND OTHER ASSETS (Tables) | 9 Months Ended |
Jun. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | June 30, 2016 September 30, 2015 Patents $ 60,387 $ 51,596 Less: accumulated amortization (9,212 ) (7,126 ) Intangible assets, net $ 51,175 $ 44,470 |
STOCK WARRANTS (Tables)
STOCK WARRANTS (Tables) | 9 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Schedule of Warrant Summary | Number of Shares Weighted Average Exercise Price Balance, September 30, 2014 60,000 $ 0.36 Warrants granted and assumed 8,037,600 $ 0.10 Warrants expired Warrants canceled Warrants exercised Balance, September 30, 2015 8,097,600 $ 0.10 Warrants granted and assumed 514,500 $ 0.36 Warrants expired Warrants canceled Warrants exercised Balance, June 30, 2016 8,612,100 $ 0.11 |
BASIS OF PRESENTATION AND GOI22
BASIS OF PRESENTATION AND GOING CONCERN (Details Narrative) - USD ($) | Jun. 30, 2016 | Sep. 30, 2015 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accumulated earnings (deficit) | $ (4,290,147) | $ (3,894,278) |
SUMMARY OF SIGNIFICANT POLICI23
SUMMARY OF SIGNIFICANT POLICIES (Details Narrative) - USD ($) | Jun. 30, 2016 | Sep. 30, 2015 |
Accounting Policies [Abstract] | ||
Cash | $ 81,854 | $ 88,533 |
FIXED ASSETS - Schedule of Prop
FIXED ASSETS - Schedule of Property Pant and Equipment (Details) - USD ($) | Jun. 30, 2016 | Sep. 30, 2015 |
Property, Plant and Equipment [Abstract] | ||
Machinery and equipment | $ 655,006 | $ 654,918 |
Tenat improvements | 1,533 | |
Furniture and fixtures | 2,202 | 1,475 |
Total | 667,208 | 657,926 |
Less: accumulated depreciation | (31,713) | (279) |
Fixed assets, net of accumulated depreciation | $ 635,495 | $ 657,647 |
FIXED ASSETS (Details Narrative
FIXED ASSETS (Details Narrative) - USD ($) | 9 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation Expense | $ 31,825 | $ 187 |
INTANGIBLE AND OTHER ASSETS - S
INTANGIBLE AND OTHER ASSETS - Schedule of Intangible Assets (Details) - USD ($) | Jun. 30, 2016 | Sep. 30, 2015 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Patents | $ 60,837 | $ 51,596 |
Less: accumulated depreciation | (9,212) | (7,126) |
Fixed assets, net of accumulated depreciation | $ 51,175 | $ 44,470 |
INTANGIBLE AND OTHER ASSETS (De
INTANGIBLE AND OTHER ASSETS (Details Narrative) - USD ($) | 9 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Apr. 26, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization Expense | $ 2,086 | $ 1,873 | |
Common Stock Issued | $ 7,500 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Professional fees | $ 54,403 | $ 45,713 | $ 268,560 | $ 3,336,369 |
Consulting Agreement | ||||
Date of Agreement | Oct. 1, 2014 | |||
Monthly Fee | $ 7,500 | |||
Term of Agreement | 1 year | |||
Professional fees | $ 67,500 |
PREPAID EXPENSES (Details Narra
PREPAID EXPENSES (Details Narrative) | 9 Months Ended |
Jun. 30, 2016USD ($)$ / sharesshares | |
Consulting Agreement | |
Date of Agreement | Jan. 15, 2016 |
Options Granted, Fair Value | $ 6,720 |
Value Per Share | $ / shares | $ .33 |
Options Term | 1 year |
Shares Issued | shares | 20,000 |
Cash Monthly Fee First Six Months | $ 3,500 |
Cash Monthly Fee First Last Months | $ 6,500 |
Board Member | |
Date Vested | Mar. 15, 2015 |
Options Granted, Shares | shares | 180,000 |
Strike Price | $ / shares | $ 0.083 |
Options Granted, Fair Value | $ 54,411 |
Prepaid expense | $ 24,232 |
Options Term | 5 years |
Risk Free Interest Rate | 2.11% |
Dividend Yield | 0.00% |
Volatility Rate | 11000.00% |
Board Advisor | |
Date of Agreement | Jan. 22, 2016 |
Strike Price | $ / shares | $ 0.33 |
Options Granted, Fair Value | $ 11,666 |
Prepaid expense | $ 7,299 |
Shares Issued | shares | 35,000 |
Consulting Agreement | |
Stock Based Compensation | $ 3,075 |
STOCKHOLDERS EQUITY (DEFICIT) (
STOCKHOLDERS EQUITY (DEFICIT) (Details Narrative) - $ / shares | 9 Months Ended | |
Jun. 30, 2016 | Sep. 30, 2015 | |
Common Stock, Shares authorized | 100,000,000 | 100,000,000 |
Common Stock, par value | $ 0.001 | $ 0.001 |
Preferred Stock, Shares authorized | 10,000,000 | 10,000,000 |
Preferred Stock, par value | $ 0.001 | $ 0.001 |
Common Stock, shares issued | 21,058,415 | 20,378,415 |
Preferred Stock, Shares issued | 1,000,000 | 400,000 |
Series A Preferred Stock, Shares | 1,000,000 | |
Series A Preferred Stock, Par Value | $ 0.001 | |
Dividend Rate | 2.00% | |
Liquidation Preference Per Share | $ .02 | |
Private Placement #6 | ||
Shares issued for direct investment | 600,000 |
STOCK WARRANTS - Schedule of Wa
STOCK WARRANTS - Schedule of Warrant Summary (Details) - $ / shares | 9 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Sep. 30, 2015 | |
Stock Warrants - Schedule Of Warrant Summary Details | ||
Beginning Balance, number of shares | 8,097,600 | 60,000 |
Beginning Balance, weighted average exercise price | $ 0.10 | $ 0.36 |
Warrants Granted and Assumed, number of shares | 514,500 | 8,037,600 |
Warrants Granted and Assumed, weighted average exercise price | $ 0.36 | $ 0.10 |
Ending Balance, number of shares | 8,612,100 | 8,097,600 |
Ending Balance, weighted average exercise price | $ 0.11 | $ 0.10 |
STOCK WARRANTS (Details Narrati
STOCK WARRANTS (Details Narrative) - Board Advisor | 9 Months Ended |
Jun. 30, 2016USD ($)shares | |
Date of Issuance | Jan. 22, 2016 |
Warrants Issued | shares | 450,000 |
Warrant, Fair Value | $ | $ 116,811 |
Warrant, Description | The warrants were valued at $116,811 using the Black Scholes option pricing model based upon the following assumptions: term of 5 years, risk free interest rate of 1.49%, a dividend yield of 0% and volatility rate of 110%. The warrants were fully earned and vested on January 31, 2016. |
DEFINITIVE AGREEMENTS (Details
DEFINITIVE AGREEMENTS (Details Narrative) | 9 Months Ended |
Jun. 30, 2016USD ($)shares | |
Service Agreement #2 | |
Date of Agreement | Dec. 5, 2014 |
Payment for Operating Activities | $ 147,144 |
Initial Payment, Due | 50,000 |
Second Payment, Due | 50,000 |
Final Payment, Due | 47,144 |
Estimation of Cost of Improvements Minimum | 50,000 |
Estimation of Cost of Improvements Maximum | $ 75,000 |
Service Agreement #3 | |
Date of Agreement | May 2, 2016 |
Issuance of Shares, Officer Compensation | shares | 150,000 |
Issuance of Shares, Officer Compensation, Value | $ 150,000 |
Term of Agreement | 180 days |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - Lease Agreements | 9 Months Ended |
Jun. 30, 2016USD ($) | |
Monthly Rent Expense | $ 850 |
Term of Agreement | 1 year |
Date of Lease Termination | Jan. 22, 2016 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | 10 Months Ended | 11 Months Ended |
Jul. 20, 2016 | Aug. 19, 2016 | |
Purchase Agreement Amendment 2 | ||
Date of Agreement | Jul. 1, 2016 | |
Date of First Amendment | Jul. 20, 2016 | |
Date of Second Amendment | Aug. 19, 2016 | |
Issuance of Shares | 6,000,000 | |
Shares Issued upon exercise | 4,500,000 | |
Exercise Price Per Share | $ 1.50 | |
Liabilities Assumed | $ 200,000 | |
Option One | ||
Shares Issued upon exercise | 1,000 | |
Term of Agreement | 3 years | |
Option Two | ||
Shares Issued upon exercise | 1,000 | |
Term of Agreement | 3 years |