Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Sep. 30, 2016 | Jan. 10, 2017 | Mar. 31, 2016 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | AMERICAN POWER GROUP CORP | ||
Entity Central Index Key | 932,699 | ||
Document Type | 10-K | ||
Document Period End Date | Sep. 30, 2016 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --09-30 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 6,223,000 | ||
Entity Common Stock, Shares Outstanding | 76,787,016 | ||
Trading Symbol | APGI | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,016 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Sep. 30, 2016 | Sep. 30, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 211,201 | $ 67,162 |
Certificates of deposit, restricted | 309,984 | |
Accounts receivable, trade, less allowance for doubtful accounts of $698 and $12,657 as of September 30, 2016 and September 30, 2015 | 403,108 | 779,020 |
Inventory | 508,245 | 540,994 |
Note receivable, related party | 497,190 | 737,190 |
Prepaid expenses | 130,709 | 113,759 |
Other current assets | 139,075 | 30,341 |
Total current assets | 1,889,528 | 2,578,450 |
Property and equipment, net | 3,790,365 | 3,739,053 |
Other assets: | ||
Seller's note, related party, non-current | 797,387 | 797,387 |
Long term contracts, net | 406,667 | 486,667 |
Purchased technology, net | 141,667 | 191,667 |
Software development costs, net | 2,503,102 | 2,998,076 |
Other | 264,434 | 220,457 |
Total other assets | 4,113,257 | 4,694,254 |
Total assets | 9,793,150 | 11,011,757 |
Current liabilities: | ||
Accounts payable | 491,607 | 1,016,579 |
Accrued expenses | 1,496,879 | 819,196 |
Notes payable, current, net of discount and financing fees | 104,925 | 854,682 |
Contingent convertible promissory notes - related parties | 2,475,000 | |
Notes payable, related parties, current | 744,614 | 342,562 |
Obligations due under lease settlement, current | 181,704 | 68,518 |
Total current liabilities | 3,019,729 | 5,576,537 |
Notes payable, net of current portion and net of debt discount and financing fees | 2,153,413 | 2,205,031 |
Notes payable, related parties, net of current portion and net of financing fees | 2,741,368 | 2,727,258 |
Warrant liability | 37,285 | 223,608 |
Obligations due under lease settlement, net of current portion | 211,504 | 505,540 |
Total liabilities | 8,163,299 | 11,237,974 |
Stockholders' equity (deficit) | ||
Preferred stock, $1.00 par value, 998,654 shares authorized, 0 shares issued and outstanding | ||
Common stock, $.01 par value, 350 million and 150 million shares authorized, 75,055,296 shares and 55,287,349 issued and outstanding at September 30, 2016 and September 30, 2015 | 750,553 | 552,874 |
Additional paid-in capital | 74,564,138 | 62,497,398 |
Accumulated deficit | (73,686,256) | (63,277,627) |
Total stockholders' equity (deficit) | 1,629,851 | (226,217) |
Total liabilities and stockholders' equity (deficit) | 9,793,150 | 11,011,757 |
10% Convertible Preferred Stock [Member] | ||
Stockholders' equity (deficit) | ||
Preferred stock, $1.00 par value, 998,654 shares authorized, 0 shares issued and outstanding | 740 | 938 |
Series B 10% Convertible Preferred Stock [Member] | ||
Stockholders' equity (deficit) | ||
Preferred stock, $1.00 par value, 998,654 shares authorized, 0 shares issued and outstanding | 200 | |
Series C Convertible Preferred Stock [Member] | ||
Stockholders' equity (deficit) | ||
Preferred stock, $1.00 par value, 998,654 shares authorized, 0 shares issued and outstanding | 52 | |
Series D Convertible Preferred Stock [Member] | ||
Stockholders' equity (deficit) | ||
Preferred stock, $1.00 par value, 998,654 shares authorized, 0 shares issued and outstanding | 22 | |
Series D2 Convertible Preferred Stock [Member] | ||
Stockholders' equity (deficit) | ||
Preferred stock, $1.00 par value, 998,654 shares authorized, 0 shares issued and outstanding | 397 | |
Series D3 Convertible Preferred Stock [Member] | ||
Stockholders' equity (deficit) | ||
Preferred stock, $1.00 par value, 998,654 shares authorized, 0 shares issued and outstanding | $ 205 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Sep. 30, 2016 | Sep. 30, 2015 |
Accounts receivable, trade, allowance for doubtful accounts | $ 698 | $ 12,657 |
Preferred stock, par value | $ 1 | $ 1 |
Preferred stock, shares authorized | 998,654 | 998,654 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 350,000,000 | 150,000,000 |
Common stock, shares issued | 75,055,296 | 55,287,349 |
Common stock, shares outstanding | 75,055,296 | 55,287,349 |
10% Convertible Preferred Stock [Member] | ||
Preferred stock, par value | $ 1 | $ 1 |
Preferred stock, shares authorized | 1,146 | 1,146 |
Preferred stock, shares issued | 740 | 938 |
Preferred stock, shares outstanding | 740 | 938 |
Series B 10% Convertible Preferred Stock [Member] | ||
Preferred stock, par value | $ 1 | $ 1 |
Preferred stock, shares authorized | 200 | 200 |
Preferred stock, shares issued | 0 | 200 |
Preferred stock, shares outstanding | 0 | 200 |
Series C Convertible Preferred Stock [Member] | ||
Preferred stock, par value | $ 1 | $ 1 |
Preferred stock, shares authorized | 275 | 275 |
Preferred stock, shares issued | 52 | 0 |
Preferred stock, shares outstanding | 52 | 0 |
Series D Convertible Preferred Stock [Member] | ||
Preferred stock, par value | $ 1 | $ 1 |
Preferred stock, shares authorized | 22 | 22 |
Preferred stock, shares issued | 22 | 0 |
Preferred stock, shares outstanding | 22 | 0 |
Series D2 Convertible Preferred Stock [Member] | ||
Preferred stock, par value | $ 1 | $ 1 |
Preferred stock, shares authorized | 400 | 400 |
Preferred stock, shares issued | 397 | 0 |
Preferred stock, shares outstanding | 397 | 0 |
Series D3 Convertible Preferred Stock [Member] [Member] | ||
Preferred stock, par value | $ 1 | $ 1 |
Preferred stock, shares authorized | 210 | 210 |
Preferred stock, shares issued | 205 | 0 |
Preferred stock, shares outstanding | 205 | 0 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Net sales | $ 1,862,585 | $ 2,958,581 |
Cost of sales | 3,057,127 | 3,125,623 |
Gross loss | (1,194,542) | (167,042) |
Operating expenses | ||
Selling, general and administrative | 4,086,034 | 4,179,560 |
Operating loss from continuing operations | (5,280,576) | (4,346,602) |
Non operating income (expense) | ||
Interest and financing costs | (807,152) | (382,166) |
Interest - discount on contingent convertible promissory notes - warrants | (906,874) | |
Interest - discount on contingent convertible promissory notes - beneficial conversion feature | (649,813) | |
Interest income | 145,845 | 56,193 |
Loss on extinguishment of debt | (447,492) | |
Warrant extension expense | (454,253) | |
Revaluation of warrants | 186,323 | 5,774,178 |
Other, net | 200,605 | (173,076) |
Non operating (loss) income, net | (2,278,558) | 4,820,876 |
Net (loss) income | (7,559,134) | 474,274 |
Net loss available to common stockholders | $ (10,408,629) | $ (1,045,897) |
(Loss) income from continuing operations per share - basic and diluted | $ (0.13) | $ 0.01 |
Net loss attributable to Common stockholders - basic and diluted | $ (0.18) | $ (0.02) |
Weighted average shares outstanding: Basic | 58,317,346 | 51,405,043 |
Weighted average shares outstanding: Diluted | 58,317,346 | 51,405,043 |
10% Convertible Preferred Stock [Member] | ||
Non operating income (expense) | ||
Convertible preferred dividends | $ (1,298,571) | $ (1,125,540) |
Net loss per Common share - Preferred dividend | $ (0.02) | $ (0.02) |
Series B 10% Convertible Preferred Stock [Member] | ||
Non operating income (expense) | ||
Convertible preferred dividends | $ (394,631) | |
Net loss per Common share - Preferred dividend | $ (0.01) | |
Series D Convertible Preferred Stock [Member] | ||
Non operating income (expense) | ||
Convertible preferred dividends | $ (1,550,924) | |
Net loss per Common share - Preferred dividend | $ (0.03) |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity (Deficit) - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Total |
Beginning balance at Sep. 30, 2014 | $ 941 | $ 507,351 | $ 58,248,103 | $ (62,231,730) | $ (3,475,335) |
Beginning balance, shares at Sep. 30, 2014 | 941 | 50,735,050 | |||
Compensation expense associated with stock options | 46,826 | 46,826 | |||
Common stock issued for expenses | $ 1,289 | 16,760 | 18,049 | ||
Common stock issued for expenses, shares | 128,925 | ||||
Common Stock issued upon option and warrant exercise | $ 109 | (109) | |||
Common Stock issued upon option and warrant exercise, shares | 10,870 | ||||
Common stock issued for license agreement | $ 20,000 | 280,000 | 300,000 | ||
Common stock issued for license agreement, shares | 2,000,000 | ||||
Warrant extension expense | 454,253 | 454,253 | |||
Common stock issued upon Preferred Stock conversion | $ (3) | $ 916 | (913) | ||
Common stock issued upon Preferred Stock conversion, shares | (3) | 91,667 | |||
Sale of 10% Convertible Preferred stock, net of fees | $ 200 | 1,253,288 | |||
Sale of 10% Convertible Preferred stock, net of fees, shares | 200 | ||||
Series B Preferred stock beneficial conversion feature | 394,631 | (394,631) | |||
Fair value of warrant liability reclassified as additional paid in capital | 1,193,846 | 1,193,846 | |||
Fair value of warrants issued for financing | 86,923 | 86,923 | |||
Common stock issued for 10% Convertible Preferred stock dividend | $ 23,209 | 523,790 | (546,999) | ||
Common stock issued for 10% Convertible Preferred stock dividend, shares | 2,320,837 | ||||
10% Convertible Preferred stock dividend paid in cash | (578,541) | (578,541) | |||
Net income (loss) | 474,274 | 474,274 | |||
Ending balance at Sep. 30, 2015 | $ 1,138 | $ 552,874 | 62,497,398 | (63,277,627) | (226,217) |
Ending balance, shares at Sep. 30, 2015 | 1,138 | 55,287,349 | |||
Compensation expense associated with stock options | 160,244 | 160,244 | |||
Common stock issued for expenses | $ 4,553 | 41,974 | 46,527 | ||
Common stock issued for expenses, shares | 455,270 | ||||
Common stock issued for license agreement | |||||
Warrant extension expense | |||||
Sale of 10% Convertible Preferred stock, net of fees | $ 257 | 2,569,258 | 2,569,515 | ||
Sale of 10% Convertible Preferred stock, net of fees, shares | 257 | ||||
Common stock issued for 10% Convertible Preferred stock dividend | $ 86,600 | 1,156,954 | (1,137,635) | 105,919 | |
Common stock issued for 10% Convertible Preferred stock dividend, shares | 8,659,984 | ||||
Warrants issued for services rendered | 21,109 | 21,109 | |||
Common stock issued for related party note payment | $ 12,098 | 157,281 | 169,379 | ||
Common stock issued for related party note payment, shares | 1,209,857 | ||||
Common stock issued upon Preferred Stock conversion | $ (1) | $ 223 | (222) | ||
Common stock issued upon Preferred Stock conversion, shares | (1) | 22,303 | |||
Interest - discount on contingent convertible promissory notes - beneficial conversion feature | 649,813 | 649,813 | |||
Interest - discount on contingent convertible promissory notes - warrants | 906,874 | 906,874 | |||
Sales of Series D Convertible Preferred stock, net of fees | $ 22 | 2,127,812 | 2,127,834 | ||
Sales of Series D Convertible Preferred stock, net of fees, shares | 22 | ||||
Series D Convertible Preferred stock beneficial conversion feature | 1,550,924 | (1,550,924) | |||
Common stock issued, net of fees | $ 94,205 | 1,400,037 | 1,494,242 | ||
Common stock issued, net of fees, shares | 9,420,533 | ||||
Warrants issued in connection with debt financing | 1,324,682 | 1,324,682 | |||
10% Convertible Preferred stock accrued but not paid | (160,936) | (160,936) | |||
Net income (loss) | (7,559,134) | (7,559,134) | |||
Ending balance at Sep. 30, 2016 | $ 1,416 | $ 750,553 | $ 74,564,138 | $ (73,686,256) | $ 1,629,851 |
Ending balance, shares at Sep. 30, 2016 | 1,416 | 75,055,296 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Cash flows from operating activities: | ||
Net (loss) income | $ (7,559,134) | $ 474,274 |
Adjustments to reconcile net income to net cash used in operating activities: | ||
Revaluation of warrants | (186,323) | (5,774,178) |
Warrant extension expense | 454,253 | |
Interest - discount on contingent convertible promissory notes - warrants | 906,874 | |
Interest - discount on contingent convertible promissory notes - beneficial conversion feature | 649,813 | |
Inventory valuation allowance | 85,942 | 122,008 |
Shares issued in lieu of wages | 46,527 | |
Loss on disposal of property and equipment | 11,740 | 2,298 |
Loss on extinguishment of debt | 447,492 | |
Warrants issued for services rendered | 7,243 | |
Depreciation expense | 394,559 | 323,014 |
Amortization of deferred financing costs | 55,655 | 12,294 |
Stock compensation expense | 160,244 | 46,826 |
(Recovery) provision for bad debts | (11,959) | 12,657 |
Amortization of software development costs | 728,948 | 607,942 |
Amortization of long term contracts | 80,000 | 55,000 |
Amortization of purchased technology | 50,000 | 50,000 |
(Increase) decrease in assets: | ||
Accounts receivable | 387,871 | 921,962 |
Inventory | (53,193) | 131,209 |
Prepaid and other current assets | 8,256 | 141,661 |
Other assets | (43,977) | (41,456) |
Increase (decrease) in liabilities: | ||
Accounts payable | (386,269) | (190,116) |
Accrued expenses | 368,611 | (99,922) |
Net cash used in operating activities | (3,851,080) | (2,750,274) |
Cash flows from investing activities: | ||
Proceeds from certificate of deposit | 310,120 | |
Proceeds from note receivable, related party | 50,000 | |
Payments to acquire note receivable | (737,190) | |
Proceeds from sale and disposal of property and equipment | 38,000 | 107,500 |
Purchase of property and equipment | (20,604) | (186,675) |
Purchases for construction in progress | (214,953) | (1,395,356) |
Software development costs | (230,674) | (404,038) |
Net cash used in investing activities | (68,111) | (2,615,759) |
Cash flows from financing activities: | ||
Proceeds from sales of Series D Convertible Preferred stock, net of fees | 2,127,834 | |
Proceeds from sale of common stock | 1,494,242 | |
Proceeds from line of credit | 365,000 | 500,000 |
Proceeds from notes payable | 166,488 | |
Proceeds from contingent convertible promissory notes | 2,475,000 | |
Proceeds from notes payable, related party | 500,000 | 1,400,000 |
Repayment of notes payable | (533,399) | (328,332) |
Repayment of notes payable, related party | (56,935) | (212,657) |
Payment of cash dividend on 10% convertible preferred stock | (475,355) | |
Net proceeds on issuance of 10% convertible preferred stock | 1,948,119 | |
Net cash provided by financing activities | 4,063,230 | 5,306,775 |
Net increase (decrease) in cash and cash equivalents | 144,039 | (59,258) |
Cash and cash equivalents at beginning of year | 67,162 | 126,420 |
Cash and cash equivalents at end of year | 211,201 | 67,162 |
Supplemental disclosure of cash flow information: | ||
Interest paid | 550,349 | 225,907 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Contingent convertible promissory notes and accrued interest converted into Series C Convertible Preferred Stock | 2,569,515 | |
Refinancing of note payable | 2,567,000 | |
Equipment financed with long-term note | 1,716,500 | |
Reclassification into additional paid in capital due to waived down-round provision right | 1,193,846 | |
Warrants issued for financing costs | 1,324,682 | 86,923 |
Dividends paid on preferred stock through issuance of common stock | 1,137,635 | 546,999 |
Dividends included in accrued expenses and accounts payable | 55,017 | 103,186 |
Shares issued for related party note payment | 169,379 | |
Equipment received in lieu of payment on note receivable | 190,000 | |
Warrants issued | 21,109 | 694,631 |
Beneficial conversion feature attributable to issuance of Series B, Preferred Stock | 394,631 | |
Shares issued in connection with license agreement | 300,000 | |
Refinancing related party note payable | 150,000 | |
Insurance premiums financed with short-term debt | 120,210 | 123,080 |
Capitalized interest included in construction in progress | 53,660 | 14,820 |
Software development expenditures included in accounts payable and accrued expenses | 3,300 | 83,182 |
Bank fees financed with long-term note | 30,000 | |
Construction in progress expenditures included in accounts payable | 26,732 | |
Shares issued in lieu of expenses | 18,049 | |
Fixed asset expenditures included in accrued expenses and accounts payable | $ 9,261 | $ 0 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 1. Summary of Significant Accounting Policies APG (together with its subsidiaries “we”, “us” or “our”) was founded in 1992 and has operated as a Delaware corporation since 1995. Recent Developments On January 8, 2016, we sold 22 shares of Series D Convertible Preferred Stock for gross proceeds of $2.2 million to several existing shareholders and entities affiliated with several members of our Board of Directors and issued warrants to purchase up to 44,000,000 shares of our Common Stock at an exercise price of $.10 per share. On May 13, 2016, our shareholders approved the 2016 Stock Option Plan and approved an amendment to the Restated Certificate of Incorporation to increase the number of authorized shares of Common Stock from 200,000,000 to 350,000,000. During the period of July to September 2016, entities related to two Directors loaned us $840,000 under short term 10% promissory notes. These notes were subsequently converted into a $1.498 million private placement of units consisting of one share of Common Stock and a warrant to purchase one share of Common Stock. On September 14, 2016, we entered into a new $3 million term loan agreement and a new $500,000 working capital line of credit with Iowa State Bank in which we refinanced approximately $2,835,000 due to the bank under prior loan agreements. Two of our Directors each guaranteed, severally and not jointly, to guaranty the payment of up to $1,750,000 of the Iowa State obligations. In December 2016, our Board approved a non-binding term sheet with entities related to two of our Directors and an existing shareholder to raise up to $3 million in new capital. Under this term sheet, we expect that the investors and two officers will loan us $2.38 million in January 2017 under 10% convertible promissory notes. These notes would be automatically convertible, subject to shareholder approval of an increase in the number of authorized shares of our Common Stock from 350,000,000 to 600,000,000, into shares of a new proposed Series E 12.5% Convertible Preferred Stock. Upon conversion of the notes, we will issue each investor a ten-year warrant to purchase a number of shares of Common Stock equal to ten times the number of shares of Common Stock into which their Series E Preferred Stock is convertible. Concurrent with the closing of these loans, Neil Braverman, a Director, is expected to become Chairman of the Board of Directors, replacing Maurice Needham who will remain as a Director. In connection with the proposed financing, WPU Leasing is expected to defer all current and future cash interest and principal payments due under approximately $1.8 million of notes until such time as our Board of Directors determines we are in a position to resume normal payments but no later than such time as we are EBITDA positive at a Corporate level for two consecutive quarters. In addition, WPU Leasing is expected to amend their notes, as of December 1, 2016 to reduce the current normal interest rate from 22.2% to 15% and eliminate the penalty interest provision. There can be no assurance that the financing and other transactions contemplated by the non-binding term sheet will be completed. As of January 2017, we have an industry-leading 503 overall approvals from the Environmental Protection Agency (“EPA”) including 47 approvals for engine families with SCR (selective catalytic reduction) technology. We believe that of the approximately 2 million Class 8 trucks operating in North America, an estimated 600,000 to 700,000 Class 8 trucks fall into the Inside Useful Life designation. We have also received State of California Air Resources Board (“CARB”) Executive Order Certifications for Volvo/Mack D-13/MP8 (2010-2013), Cummins ISX (2010-2012) and Detroit Diesel DD15 (2010-2012) engine models for the heavy-duty diesel engine families ranging from 375HP to 600HP. Nature of Operations, Risks, and Uncertainties Dual Fuel Technology Subsidiary - American Power Group, Inc. Our patented dual fuel conversion system is a unique external fuel delivery enhancement system that converts existing diesel engines into more efficient and environmentally friendly engines that have the flexibility, depending on the circumstances, to run on: ● Diesel fuel and compressed natural gas (CNG) or liquefied natural gas (LNG); ● Diesel fuel and pipeline gas, well-head gas or approved bio-methane; or ● 100% diesel. Our proprietary technology seamlessly displaces up to 75% (average displacement ranges from 40% to 65%) of the normal diesel fuel consumption with various forms of natural gas. Installation requires no engine modification, unlike the more expensive fuel injected alternative fuel systems in the market. By displacing highly polluting diesel fuel with less expensive, abundant and cleaner burning natural gas, a user can: ● Reduce fuel and operating costs by 5% to 15%; ● Reduce toxic emissions such as nitrogen oxide (NOX), carbon monoxide (CO) and fine particulate emissions; and ● Enhance the engine’s operating life, since natural gas is a cleaner burning fuel source. Primary end market applications include both primary and back-up diesel generators as well as mid- to heavy-duty vehicular diesel engines. Wellhead Gas Flare Capture and Recovery Services Subsidiary - Trident NGL Services a division of American Power Group, Inc. When oil is extracted from shale, a mixture of hydrocarbon gases (methane, ethane, propane, butane, pentane and other heavy gases) reach the surface at each well site. These gases are either gathered in low-pressure pipelines for downstream NGL and methane extraction by large mid-stream processing companies or flared into the atmosphere when the gas-gathering infrastructure is too far away (remote well sites) or the pipeline is insufficient to accommodate the volumes of associated gas (stranded well sites). Many areas in North America are facing significant state imposed penalties and restrictions associated with the elimination of flared well head gas by oil and gas production companies. In August 2015, we entered flare gas capture and recovery business through a relationship with Trident Resources, LLC whereby they exclusively licensed to us their proprietary next generation natural gas liquids (“NGL”) compression/refrigeration process. The proprietary Trident NGL capture and recovery process captures and converts a higher percent of the gases at these remote and stranded well sites, with its mobile and modular design when compared to other competitive capture technologies. NGL’s can be sold to a variety of end markets for heating, emulsifiers, or as a combined NGL liquid called Y Grade that can be sold to midstream companies who separate the liquids into their final commodities. The majority of the remaining associated gas is comprised of methane which is currently not sold but, if further processed, can produce pipeline grade natural gas for use in stationary and vehicular engines utilizing APG’s Fueled By Flare™ dual fuel solution. This process is designed to capture and separate the methane flare in order to produce a premium quality natural gas capable of being compressed and used for many natural gas applications including both stationary and vehicular APG dual fuel conversions. During the twelve months ended September 30, 2016, operations from our Natural Gas Liquids Division were not significant. Liquidity and Management’s Plans As of September 30, 2016, we had $211,201 in cash and cash equivalents and a working capital deficit of $1,130,201. The accompanying financial statements have been prepared on a basis that assumes we will continue as a going concern and that contemplates the continuity of operations, realization of assets and the satisfaction of liabilities and commitments in the normal course of business. We continue to incur recurring losses from operations, which raises substantial doubt about our ability to continue as a going concern unless we secure additional capital to fund our operations as well as implement initiatives to reduce our cash burn in light of lower diesel/natural gas price spreads and the impact it has had on our business as well as the slower than anticipated ramp of our flare capture and recovery business. The accompanying financial statements do not include any adjustments that might result from the outcome of the uncertainty. Management understands that our continued existence is dependent on our ability to generate positive operating cash flow, achieve profitability on a sustained basis and generate improved performance. Based on the information discussed below, our fiscal 2017 operating plan, the cash saving initiatives that have been implemented below and anticipated cash flows from operations, we believe we will have sufficient resources to satisfy our cash requirements through fiscal 2017. In order to ensure the future viability of American Power Group beyond that point, management has implemented or is in the process of implementing the following actions: A. 10% Contingent Convertible Promissory Notes and Series E Convertible Preferred Stock In December 2016, our Board approved a non-binding term sheet with entities related to two of our Directors and an existing shareholder to raise up to $3 million in new capital. Under this term sheet, we expect that the investors and two officers will loan us $2.38 million in January 2017 under 10% convertible promissory notes. These notes would be automatically convertible, subject to shareholder approval of an increase in the number of authorized shares of our Common Stock from 350,000,000 to 600,000,000, into shares of a new proposed Series E 12.5% Convertible Preferred Stock. Upon conversion of the notes, we will issue each investor a ten-year warrant to purchase a number of shares of Common Stock equal to ten times the number of shares of Common Stock into which their Series E Preferred Stock is convertible. There can be no assurance that the financing and other transactions contemplated by the non-binding term sheet will be completed. B. Deferment of WPU Leasing Payments and Cash Dividend Payments In connection with the proposed financing, WPU Leasing is expected to agree to defer all current and future cash interest and principal payments due under approximately $1.8 million of notes until such time as our Board of Directors determines we are in a position to resume normal payments but no later than such time as we are EBITDA positive at a Corporate level for two consecutive quarters. In addition, WPU Leasing is expected to amend their notes, as of December 1, 2016, to reduce the current normal interest rate from 22.2% to 15% and eliminate the penalty interest provision. These changes will reduce our cash outflow commitments by approximately $760,000 during fiscal 2017. Our Board of Directors have determined that our cash resources are not currently sufficient to permit the payment of cash dividends with respect of our Convertible Preferred Stock and suspended the payment of cash dividends, commencing with the dividend payable on September 30, 2015. During fiscal 2016 and 2015, certain stockholders agreed to accept shares of Common Stock valued at $1,243,554 and $547,000, respectively in lieu of cash dividend representing 96% and 49% of all dividends due during those respective periods. C. New Iowa State Bank Credit Facility In September 2016, we entered into a new $3 million ten year term loan agreement and a new $500,000 working capital line of credit with Iowa State Bank in which we refinanced approximately $2,835,000 due to the bank under an existing loan agreements. In conjunction with the new Credit Facility, Iowa State Bank agreed to reduce our interest rate on both loans from a minimum of 8% to 4% on the term loan (for the initial three years) and based on New York Prime plus a .5% (4% at September 30, 2016) on the working capital line. We had $355,000 of additional availability on our working capital line at September 30, 2016. E. July 2016 Private Placement of Common Stock and Warrants During the period of July to September 2016, we completed a $1.498 million private placement of units consisting of one share of Common Stock and a warrant to purchase one share of common stock to a group of accredited investors including a Director and two entities affiliated with two other Directors. The purchase price of the common stock and exercise price of the warrant were equal the 20 day volume weighted average price preceding the receipt of each investor’s funds. F. Series D Convertible Preferred Stock Private Placement On January 8, 2016, we completed a $2.2 million private placement of Series D Convertible Preferred Stock with accredited investors affiliated with several members of our Board of Directors and shareholders. In addition, we issued warrants to purchase 44 million shares of Common Stock at $.10 which do not contain a cashless exercise provision. Pursuant to the terms of the offering, the investors are required to exercise all Series D warrants before exercising any other warrants they or their affiliates own (all containing cashless provisions). G. Amendment of Trident Promissory Note In December 2015, we amended the terms of the $1.716 million of secured notes payable to Trident Resources so that we are not required to make payments under the note until such time as the two purchased NGL processing systems are producing a minimum of 200,000 gallons of saleable product on a monthly basis. The original notes would have required cumulative payments through September 2016 of approximately $1.4 million which based on our fiscal 2017 operating plan has been reduced to approximately $200,000. Principles of Consolidation and Basis of Presentation The consolidated financial statements include the accounts of APG and our wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Management Estimates The preparation of financial statements in conformity with the United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the amounts of revenues and expenses recorded during the reporting period. Actual results could differ from those estimates. Such estimates relate primarily to the evaluation of intangible assets, the valuation reserve on inventory, the value of our lease settlement obligation, the warranty accrual and the value of equity instruments issued. The amount that may be ultimately realized from assets and liabilities could differ materially from the values recorded in the accompanying financial statements as of September 30, 2016. Cash Equivalents Cash equivalents include short-term investments with original maturities of three months or less. Certificates of Deposit All certificate of deposit investments have an original maturity of more than three months but less than three years and are stated at original purchase price plus interest, which approximates fair value. As of fiscal year ended September 30, 2016 and 2015, respectively, we have pledged a certificate of deposit for $0 and $309,984, as collateral for two loans currently outstanding with Iowa State Bank. Concentration of Credit Risk Financial instruments which potentially subject us to a concentration of credit risk are cash and cash equivalents. We maintain our bank accounts at multiple banks which at times such balances may exceed FDIC insured limits. We have not experienced any losses as a result of this practice. Accounts Receivable Accounts receivable are carried at original invoice amount less an estimate made for doubtful accounts. Management determines the allowance for doubtful accounts by regularly evaluating past due individual customer receivables and considering a customer’s financial condition, credit history, and the current economic conditions. Individual accounts receivable are written off when deemed uncollectible, with any future recoveries recorded as income, when received. Inventory Raw material inventory primarily consists of dual fuel conversion components. Work in progress includes materials, labor and direct overhead associated with incomplete dual fuel conversion projects. All inventory is valued at the lower of cost or market on the first-in first-out (FIFO) method. As of September 30, 2016 and September 30, 2015, respectively, we had recorded inventory valuation allowance of $279,580 and $193,637. Inventory consists of the following: September 30, 2016 September 30, 2015 Raw materials, net of valuation allowance $ 507,035 $ 514,041 Work in progress - 25,784 Finished goods 1,210 1,169 Total inventory $ 508,245 $ 540,994 Property and Equipment Property and equipment are stated at cost. Depreciation and amortization expense is provided on the straight-line method. Expenditures for maintenance, repairs and minor renewals are charged to expense as incurred. Significant improvements and major renewals that extend the useful life of equipment are capitalized. Advertising Costs We expense advertising costs as incurred. Advertising costs were $106,780 and $127,558 for the fiscal years ended September 30, 2016 and 2015, respectively. Revenue Recognition Our dual fuel conversion operations derive revenue from (1) product revenue which is earned from the sale and installation of dual fuel conversion equipment and (2) maintenance and service work orders. All components are purchased from external sources including several proprietary patented components which are configured by our internal engineering staff to a customer’s specific diesel engine family. The components are assembled into installation kits by us and then delivered on site for installation. All installations are managed by an American Power Group led team or certified third party installer. Overall, our services and dual fuel conversion equipment for both vehicular and stationary systems are generally sold based upon purchase orders or contracts with our dealers and customers that include fixed or determinable prices but do not include right of return provisions or other significant post-delivery obligations. We recognize revenue from product sales when title passes to the customer, the customer assumes risks and rewards of ownership, collectability is reasonably assured, and delivery occurs as directed by our customer. Service revenue, including engineering services, is recognized when the services are rendered and collectability is reasonably assured. Our wellhead flare capture and recovery services (“NGL”) operation derives revenues from product sales at the time title to the product transfers to the purchaser, which typically occurs upon receipt of the product by the purchaser. We record transportation costs and volume differentials, as cost of sales when incurred. Volume differentials result from differences in the measurement of product volumes when delivered to customer terminals. Bill and Hold Arrangements. Multiple-Element Arrangements Shipping and Handling Fees and Costs Shipping and handling fees and costs billed to customers and incurred by us are reported on a net basis in cost of sales in the consolidated statements of operations. Income Taxes Deferred tax assets and liabilities are recorded for temporary differences between the financial statement and tax basis of assets and liabilities using the currently enacted income tax rates expected to be in effect when the taxes are actually paid or recovered. A deferred tax asset is also recorded for net operating loss and tax credit carryforwards to the extent their realization is more likely than not. The deferred tax benefit for the period represents the change in the net deferred tax asset or liability from the beginning to the end of the period. As of September 30, 2016, we had no uncertain tax positions that qualify for either recognition or disclosure in the financial statements. With few exceptions, we are no longer subject to U.S. Federal, state or local income tax examinations by authorities for years before fiscal 2013. Stock-Based Compensation We measure and recognize compensation cost for all share-based awards based on the grant-date fair value estimated using the Black-Scholes option pricing model. We have estimated for forfeitures in determining expected terms on stock options for calculating expense. Amortization of stock compensation expense was $160,244 and $46,826 for the fiscal years ended September 30, 2016 and 2015, respectively. The unamortized compensation expense at September 30, 2016 was $296,800 and will be amortized over a weighted average remaining amortizable life of approximately 4.25 years. The fair value of each option grant during the year ended September 30, 2016 under the 2016 Stock Option Plan was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions; dividend yield of 0%; risk-free interest rates of approximately 1.5%; expected volatility based on historical trading information of approximately 72% and expected terms of 5 years. The fair value of each option grant during the year ended September 30, 2016 under the 2005 Stock Option Plan was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions; dividend yield of 0%; risk-free interest rate of approximately 2%; expected volatility based on historical trading information of approximately 56% and expected terms of 5 years. The fair value of each option grant during the year ended September 30, 2015 under the 2005 Stock Option Plan was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions; dividend yield of 0%; risk-free interest rate of approximately 2%; expected volatility based on historical trading information of approximately 56% and expected term of 10 years. Intangible Assets We review intangibles for impairment annually, or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of our intangible assets below their carrying value. In conjunction with the exclusive license agreement from Trident Resources, LLC, we recognized $300,000 associated with the execution of the agreement. The value is being amortized on a straight line basis over an estimated useful life of 120 months. Amortization expense associated with the long term technology license agreement is $30,000 and $5,000 for the fiscal years ended September 30, 2016 and 2015, respectively. Accumulated amortization was $35,000 and $5,000 at September 30, 2016 and 2015, respectively. In conjunction with the American Power Group acquisition and license agreement, we recognized $500,000 associated with the execution of a long term technology license agreement and $500,000 associated with the purchase of the dual fuel conversion technology. Both values are being amortized on a straight line basis over an estimated useful life of 120 months. Amortization expenses associated with the long term technology license agreement and the purchased dual fuel conversion technology was $100,000 for each of the fiscal years ended September 30, 2016 and 2015. Accumulated amortization was $716,667 and $616,667 at September 30, 2016 and 2015, respectively. A critical component of our dual fuel aftermarket conversion solution is the internally developed software component of our electronic control unit. The software allows us to seamlessly and constantly monitor and control the various gaseous fuels to maximize performance and emission reduction while remaining within all original OEM diesel engine performance parameters. We have developed a base software application and EPA testing protocol for both our OUL and IUL engine applications, which will be customized for each engine family approved in order to maximize the performance of the respective engine family. During fiscal year 2011, we incurred costs to develop these software applications that were recorded as research and development costs and expensed as incurred until we were able to establish technological feasibility, which we did in September 2011 with our first EPA engine family approval. As a result, we began capitalizing costs associated with our software application development. We will cease capitalization of additional costs when each engine family is available for general release to customers. As of September 30, 2016, we have capitalized $4,609,222 of development costs associated with our Outside Useful Life (“OUL”) ($1,927,433) and Inside Useful Life (“IUL”) ($2,681,789) applications, which will be amortized on a straight line basis over an estimated useful life of 60 months for OUL applications and 84 months for IUL applications. Amortization costs for the fiscal years ended September 30, 2016 and 2015, respectively, were $728,948 and $607,942. Amortization expense associated with related intangibles during the next five years and thereafter is anticipated to be: NGL Services Dual Fuel Years ending September 30: Contracts Contracts Technology Software Development Total 2017 $ 30,000 $ 50,000 $ 50,000 $ 737,401 $ 867,401 2018 30,000 50,000 50,000 565,418 695,418 2019 30,000 41,667 41,667 387,017 500,351 2020 30,000 — — 335,037 365,037 2021 30,000 — — 317,797 347,797 2022 and thereafter 115,000 — — 160,432 275,432 $ 265,000 $ 141,667 $ 141,667 $ 2,503,102 $ 3,051,436 Product Warranty Costs We provide for the estimated cost of product warranties for our dual fuel products at the time product revenue is recognized. Factors that affect our warranty reserves include the number of units sold, historical and anticipated rates of warranty repairs, and the cost per repair. We assess the adequacy of the warranty provision on a quarterly basis and we may adjust this provision if necessary. The following table provides the detail of the change in our product warranty accrual relating to dual fuel products as of: September 30, 2016 September 30, 2015 Warranty accrual at the beginning of the period $ 167,180 $ 221,562 Charged to costs and expenses relating to new sales 51,754 70,426 Costs of product warranty claims (30,221 ) (124,808 ) Warranty accrual at the end of period $ 188,713 $ 167,180 Long-Lived Assets Long-lived assets to be held and used are analyzed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. We evaluate at each balance sheet date whether events and circumstances have occurred that indicate possible impairment. If there are indications of impairment, we use future undiscounted cash flows of the related asset or asset grouping over the remaining life in measuring whether the assets are fully recoverable. In the event such cash flows are not expected to be sufficient to recover the recorded asset values, the assets are written down to their estimated fair value. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value of asset less the cost to sell. Recently Issued Accounting Pronouncements Revenue from Contracts with Customers Share Based Payments. Going Concern Debt Issuance Costs. Inventory Measurement. Leases. Leases (Topic 842) Revenue Standard’s Principal-Versus-Agent Guidance. Share-Based Compensation No other new accounting pronouncement issued or effective has had, or is expected to have, a material impact on our consolidated financial statements. Reclassification Certain amounts in the 2015 financial statements have been reclassified to conform to the 2016 presentation. These reclassifications had no effect on previously reported results of operations or retained earnings. Net Income Per Share Basic net income per share is calculated by dividing the net income less the sum of 10% Convertible Preferred Stock dividends declared by the weighted average number of common shares outstanding during the period. Diluted earnings per share reflect additional common shares that would have been outstanding if potentially dilutive common shares had been issued, as well as any adjustment to income that would result from the assumed conversion. Potential common shares that may be issued by us relate to outstanding 10% Convertible Preferred Stock, stock options and warrants. Basic net income per share is calculated by dividing the net loss less the sum of 10% Convertible Preferred Stock dividends declared by the weighted average number of common shares outstanding during the period. Diluted earnings per share reflect additional common shares that would have been outstanding if potentially dilutive common shares had been issued, as well as any adjustment to income that would result from the assumed conversion. Potential common shares that may be issued by us relate to outstanding 10% Convertible Preferred Stock, stock options and warrants. Basic and diluted net (loss) income per share is ($0.13) and $0.01 for the years ended September 30, 2016 and 2015, respectively, which does not include the effect of the inclusion of 10% Convertible Preferred Stock, outstanding options and warrants since their inclusion would be anti-dilutive. The calculation of diluted net income per share above excludes 38,600,194 options and warrants that are outstanding at September 30, 2015 and 28,444,452 shares issuable upon conversion of Preferred Stock at September 30, 2015. Despite our operating income, these options and warrants are deemed to be anti-dilutive as their exercise price exceeds the average closing price used in the calculation of fully diluted shares. In addition, in October 2015, we issued $2.475 million of Series C Convertible Preferred Stock which converted into 12.85 million shares of Common Stock and warrants to purchase 12.85 million shares of Common Stock. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Sep. 30, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 2. Property and Equipment Property and equipment for our American Power Group subsidiary consist of the following: September 30, 2016 September 30, 2015 Estimated Useful Lives Leasehold improvements $ 127,087 $ 127,087 5 years Machinery and equipment 3,133,075 3,342,202 3 – 10 years Construction in progress 1,902,654 1,436,908 Less accumulated depreciation (1,372,451 ) (1,167,144 ) Machinery and equipment, net $ 3,790,365 $ 3,739,053 |
Note Receivable, Related Party
Note Receivable, Related Party | 12 Months Ended |
Sep. 30, 2016 | |
Receivables [Abstract] | |
Note Receivable, Related Party | 3. Note Receivable, Related Party On June 30, 2015, we entered into a Loan and Security Agreement with Trident Resources LLC, pursuant to which we loaned Trident $737,190 under the terms of a 6% senior secured demand promissory note due September 30, 2015. The note is secured by a first priority security interest in all of Trident’s assets and has been guaranteed on a secured basis by Trident’s sole owner. On December 1, 2015, we amended and restated the note to extend the maturity until December 31, 2015 and provide for certain additional penalties in the event of any default under such note, including a 5.0% penalty for late payment. In October 2015, Trident repaid $240,000, of the outstanding principal balance including $50,000 in cash and equipment valued at $190,000. As of September 30, 2016, the outstanding unpaid principal balance was $497,190 and accrued but unpaid interest and late fees were approximately $112,598. As of January 10, 2016, Trident has made no additional payments. We are evaluating our alternatives but believe the value of the collateral pledged by Trident equals or exceeds the balance due and therefore believe no reserve for uncollectiblity is necessary as of September 30, 2016. |
Seller's Note Receivable, Relat
Seller's Note Receivable, Related Party | 12 Months Ended |
Sep. 30, 2016 | |
Receivables [Abstract] | |
Seller's Note Receivable, Related Party | 4. Seller’s Note Receivable, Related Party In conjunction with the July 2009 acquisition of substantially all the American Power Group operating assets, including the name American Power Group (excluding its dual fuel patent), we acquired a promissory note from the previous owners of American Power Group (renamed M&R Development, Inc.), payable to the Company, in the principal amount of $797,387. The note bears interest at the rate of 5.5% per annum and was based on the difference between the assets acquired and the consideration given. In conjunction with the 10% Convertible Preferred Stock financing in April 2012, we amended the note to increase the amount of royalties payable under a technology license that can be applied to the outstanding principal and interest payments to 50% of the royalty payments due to M & R and defer all interest and principal payments due under the note through the end of calendar 2013. Thereafter, the aggregate principal amount due under the note was to be paid in eight equal quarterly payments plus interest but M&R will not be required to make any payments under the note until such time as we begin to make royalty payments and then, those payments will be limited to a maximum of 50% of any royalty payment due M&R on a quarterly basis. No payments have been made under the amended note as of September 30, 2016. We have classified 100% of the balance as long term. We consider this a related party note as one of the former owners of American Power Group is now an employee of ours. As of September 30, 2016, accrued interest due under the note was $192,967 and is included with other assets on the balance sheet. |
Notes Payable_Credit Facilities
Notes Payable/Credit Facilities | 12 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Notes Payable/Credit Facilities | 5. Notes Payable/Credit Facilities Credit Facilities September 30, 2016 September 30, 2015 Notes payable consists of the following at: Revolving line of credit, Iowa State Bank, secured by Security Agreement, Business Loan Agreement and guaranty from two related party shareholders dated September 14, 2016, with an interest rate of 4%, with interest payments due monthly and principal due September 14, 2017 $ 165,000 $ 500,000 Term note payable, Iowa State Bank, secured by Security Agreement and Business Loan Agreement dated September 14, 2016 and guaranty from two related party shareholders, with an interest rate of 4%, requiring monthly payments of $30,659, beginning December 14, 2016. The maturity date of the loan is November 14, 2026. 3,000,000 2,541,414 Other unsecured term note payable with interest rate ranging from 3.54% to 4.03%, requiring monthly payments of principal and interest with due dates ranging from February 2017 to June 2017 39,028 44,315 3,204,028 3,085,729 Less current portion (391,496 ) (854,682 ) Less unamortized discount and deferred financing fees, net of current (659,119 ) (26,016 ) Notes payable, non-current portion $ 2,153,413 $ 2,205,031 As a result of refinancing the Credit Facility, we recorded a $497,492 loss on extinguishment of debt during the fourth quarter of 2016. This amount includes $718,161 recorded as a discount to the principal amount of the Credit Facility, which is being accreted to interest expense over the term of the Credit Facility using the effective interest method, $22,055 of original debt issuance costs expensed at the time of the refinancing, and $1,143,598 in warrants issued to the Guarantors as consideration for their guarantee. The warrants were valued using the Black-Scholes pricing model with the following assumptions; dividend yield 0%; risk-free interest rate of 1.2%; volatility of approximately 73%, and expected term of 5 years. See Note 9, Fair Value Measurements, for further discussion regarding the recorded value of the Credit Facility. The aggregate annual maturities (which excludes unamortized discount of $0.7 million) for all notes payable as of September 30, 2016, over the next five years and thereafter, are as follows: Years Ending September 30: 2017 $ 391,496 2018 258,639 2019 269,326 2020 280,208 2021 and beyond 2,004,359 $ 3,204,028 Refinancing of Credit Facility On September 14, 2016, we entered into a new $3 million term loan agreement and new $500,000 working capital line of credit (collectively referred to as the “Credit Facility”) with Iowa State Bank in which we refinanced approximately $2,835,000 due to the bank under existing loan agreements. Under the terms of the new term loan we will make (i) 36 consecutive monthly payments of $30,659, beginning on December 14, 2016, which includes interest at the rate of 4.0% per annum, followed by (ii) 84 consecutive monthly payments of $30,659, beginning on December 14, 2019, adjusted to reflect an interest rate equal to The Wall Street Journal U.S. Prime Rate plus 0.5%. The final payment of all principal and accrued interest on the term loan is due on November 14, 2026. In addition, Iowa State Bank has provided a new $500,000 working capital line of credit which has an initial expiration of September 14, 2017 and bearing interest at a rate equal to The Wall Street Journal U.S. Prime Rate plus 0.5% (4% as of September 30, 2016). The maximum amount we may borrow from time to time under the line of credit remains equal to lesser of (i) the sum of 70% of our eligible accounts receivable, other than accounts receivable outstanding for more than 90 days, and 50% of the value of our inventory, or (ii) $500,000. As of September 30, 2016, the balance on the line of credit was $165,000 and we had sufficient collateral to borrow an additional $335,000. Our obligations under the Credit Facility are secured by the grant of a first priority security interest in all of our assets, a Parent guaranty, and a limited personal guaranty of two of our Directors (the “Guarantors”) which replaced several prior security agreements including (i) our commitment to issue up to 2,000,000 shares of its common stock, par value $.01 per share, to Iowa State Bank in the event of a payment default, and (ii) a stock pledge of 500,000 shares of our Common Stock in aggregate, owned by a Board member and two members of the our management team. Amounts borrowed under the Credit Facility are subject to acceleration upon certain events of default, including: (i) any failure to pay when due any amount owed under the Credit Facility; (ii) any failure to keep the collateral insured; (iii) any default under any of the documents related to the Credit Facility; (iv) any attempt by any other creditor of ours to collect any indebtedness through court proceedings; (v) any assignment for the benefit of creditors by us, or our insolvency; (vi) the institution of certain bankruptcy proceedings by or against us; (vii) any breach by us of any covenant in the documents related to the Credit Facility; and (viii) any other occurrence that either significantly impairs the value of the collateral or causes Iowa State Bank to reasonably believe that they will have difficultly collecting the amounts borrowed under the Credit Facility. Agreements with the Guarantors The Guarantors have each agreed, severally and not jointly, to guaranty the payment of up to $1,750,000 of the Credit Facility obligations, including the payment of principal, interest and all costs of collection. We entered into a Credit Support Agreement with the Guarantors pursuant to which, in consideration of their guaranty of the Credit Facility obligations, we issued each Guarantor a ten year warrant to purchase up to 6,950,000 shares of our Common Stock, at an initial exercise price of $.20 per share. Each Warrant may be exercised at any time during the term for up to 5,560,000 shares with the remaining 1,390,000 additional shares becoming exercisable based on any the following conditions: (i) if Iowa State Bank initiates any action to enforce the Guarantor’s guaranty, (ii) if the Guarantors, as provided for, elect to repay, on our behalf, all of the obligations due under the Credit Facility before September 13, 2019 or (iii) in the absence of either of the foregoing events if their guarantees have not been released by Iowa State Bank prior to September 13, 2019. The Guarantors have agreed that if they payoff Iowa State Bank prior to September 13, 2019 they will succeed to all of the rights and interests of Iowa State Bank as the lender and secured party under all agreements, promissory notes and other instruments which comprise the Credit Facility. Unless otherwise agreed by us, no other term or condition of the Credit Facility will be deemed to amended or restated. If the Guarantor’s payoff Iowa State Bank subsequent to September 13, 2019, they have the right to receive shares of our Common Stock (valued at the 20 day VWAP prior to payment) equal to the amount paid plus a warrant to purchase a number of shares (at the same 20 day VWAP price) equal to the shares of Common Stock issued in payment of the bank obligations. Using the Black-Scholes option pricing model we determined the value of the warrants issued to the Guarantor(s) to be $1,324,682. We allocated $181,084 of the warrant value to the line of credit, in addition to third party legal fees which is being amortized over twelve months. |
Notes Payable, Related Parties
Notes Payable, Related Parties | 12 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Notes Payable, Related Parties | 6. Notes Payable, Related Parties September 30, 2016 September 30, 2015 Notes payable, related parties consists of the following at: Term note payable, Trident Resources, LLC, secured by liens on equipment with an interest rate of 6.0% and requiring 48 monthly payments of $40,312, commencing February 29, 2016 with a due date of January 31, 2020 1,716,500 1,716,500 Term notes payable, WPU Leasing LLC, secured by liens on equipment with an interest rate of 22.2% and requiring the first partial payment of $21,821, with various payment structures with varying amounts, commencing on various dates with a due date of August 31, 2019 1,758,484 1,385,843 Officer’s 10% promissory note, due September 30, 2017 50,000 50,000 3,524,984 3,152,343 Less current portion (744,614 ) (386,083 ) Less deferred financing fees (39,002 ) (39,002 ) Notes payable, related parties non-current portion $ 2,741,368 $ 2,727,258 The following is a summary of maturities of carrying values of all notes payable as it relates to the related party notes as of September 30, 2016: Years Ending September 30: 2017 $ 744,614 2018 926,660 2019 1,036,215 2020 463,592 2021 and beyond 353,903 $ 3,524,984 Notes Payable-Related Party-Trident Resources, LLC On August 12, 2015, we purchased two processing systems from Trident for $1,716,500 and in return we issued Trident a promissory note for $832,000, which was payable in twelve equal monthly installments of principal and interest at 6.75% commencing September 20, 2015 and a second secured promissory note for $884,500, which was payable in 36 equal monthly installments of principal and interest at 6% commencing September 20, 2016. These notes are secured by liens on the purchased equipment. As of December 1, 2015 we amended and restated, these two secured promissory notes and combined the obligations of the original notes into a new note for $1,716,500 which bears interest at 6% per year with 48 monthly payments of principal and interest commencing on February 29, 2016 assuming the Trident NGL Services division meets specified production goals in the preceding month. If these productions goals are not met, the new note provides that we may defer payments otherwise due in any month following a month in which the production goals are not met to the maturity date, without incurring any additional interest. The amended and restated note also permits us to offset against amounts otherwise due under such note in the event of any default by Trident under their promissory note to the Company. As of January 10, 2017 no principal or interest payments have been made on this note. As of September 30, 2016, we have accrued interest expense of $120,345 associated with this note which is included in accrued expenses. Financing Agreement -WPU Leasing, LLC On August 24, 2015, we entered into a Secured Financing Agreement with WPU Leasing LLC, an accredited institutional investor, the members of which are affiliated with certain members of our Board of Directors. Pursuant to this agreement, WPU Leasing committed to loan us up to $3,250,000 to fund our purchase of two additional wellhead gas processing systems. Our initial note of $1,400,000 under the financing agreement was issued on August 24, 2015 and the second note of $500,000 was issued on October 9, 2015. The obligation to provide the remaining $1.325 million expired in March 2016. The notes bear interest at the rate of 22.2% per annum, and are secured by a security interest in the purchased equipment and are guaranteed by the Company. In January 2016, we reached an agreement pursuant to which WPU Leasing agreed to defer cash payments on approximately 70% of the $1.9 million of debt outstanding. The deferral of payments reduced our cash outflow commitments by approximately $500,000 during fiscal 2016. WPU Leasing had the option, starting June 30, 2016, of taking deferred and current payments in shares of our Common Stock (based on the 20 day volume weighted average price prior to conversion) which would positively impact our cash flow position going forward. At June 30, 2016, a member of WPU Leasing, LLC which is affiliated with one of our Directors agreed to accept 1,209,857 shares of common stock (valued at $.14 per share) in lieu of cash for deferred principal and interest payments due as of June 30, 2016 of $169,379. No other payments have been made since June 30, 2016. As of September 30, 2016, we have accrued interest associated with this note of $238,953, which is included in accrued expenses. In consideration of WPU Leasing’s commitment under the Financing Agreement, we issued to WPU Leasing’s members warrants (the “Warrants”) to purchase up to the lesser of (i) an aggregate of 3,250,000 shares of our Common Stock or (ii) one share of Common Stock for each dollar borrowed by us under the Loan Agreement. During the fiscal year ended September 30, 2016, we terminated Warrants to purchase 1,325,000 shares of Common Stock due to the fact WPU Leasing had not provided the remaining $1.325 million of their commitment. The exercise price of the Warrants is $0.20 per share and are exercisable for a period of four years from the date of issue and may be exercised on a cashless basis. We determined the value of these warrants using the Black Scholes option pricing model and recorded deferred financing costs of $86,923, which will be amortized over the term of the finance agreement. In connection with the proposed financing described earlier in Recent Developments, WPU Leasing is expected to defer all current and future cash interest and principal payments due under approximately $1.8 million of notes until such time as our Board of Directors determines we are in a position to resume normal payments, but no later than such time as we are EBITDA positive for two consecutive quarters. In addition, WPU Leasing is expected to amend its notes, retroactive to December 1, 2016, to reduce the current normal interest rate from 22.2% to 15% and eliminate the penalty interest provision. We expect to issue WPU Leasing warrants to purchase a number of shares of common stock equal to the calculated interest savings associated with the 7.2% reduction in interest divided by the strike price of the Series E warrants. WPU Leasing has waived any existing or anticipated defaults through January 31,2017, while we work to formalize the changes noted above. There can be no assurance that the financing and other transactions contemplated by the non-binding term sheet will be completed. Officer’s Promissory Note In 2010, an officer loaned us $50,000 under an unsecured promissory note, the maturity of which has been extended several times. In September 2016, the officer agreed to extend the maturity of the outstanding $50,000 balance to September 30, 2017. Contingent Convertible Promissory Notes - Related Parties On June 2, 2015 we completed the private placement of $2.475 million of Contingent Convertible Promissory Notes (“Notes”) with several existing shareholders and investors affiliated with members of our Board of Directors. The unsecured notes bore simple interest at the rate of 10% per annum and were automatically convertible into shares of Series C Convertible Preferred Stock at a conversion price of $10,000 per share upon the effectiveness of the filing of a Certificate of Designation of Preferences, Rights and Limitations of Series C Convertible Preferred Stock with the Secretary of State of Delaware. On October 21, 2015 the outstanding principal amount $2,475,000, together with approximately $96,000 of accrued but unpaid interest, automatically was converted into approximately 257 shares of our Series C Convertible Preferred Stock. (See Note 10) We determined the discount on the contingent convertible promissory note to be $1,556,687 of which $906,874 was allocable to the warrants and $649,813 was allocable to the intrinsic value of the conversion feature. The discount was recorded as paid-in-capital and as non-cash financing expense on the date of the conversion and is included in the results for the twelve months ended September 30, 2016. In connection with this private placement, our securities purchase agreements dated April 30, 2012 and November 26, 2014 were amended to provide that the issuance of the Series C Preferred Stock would not trigger adjustments to the exercise price of the warrants issued in connection with those agreements (the “Prior Warrants”). We also amended the Prior Warrants to extend the term of any Prior Warrant held by the purchasers of the Notes (and their affiliates, members of their families and certain related trusts) as of the issuance of the Notes or subsequently acquired by such persons. The maximum period by which any Prior Warrant was extended is the difference between 60 months and the remaining term of the respective Prior Warrant as of the initial issuance of the Notes. The fair value of the warrants before and after the modification was determined using Black-Scholes and recorded on the balance sheet, and the difference between fair value of the extended terms and of the existing terms of $454,253 was recognized in the income statement as non-cash warrant extension expense during the twelve months ended September 30, 2015. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 7. Commitments and Contingencies Employment Agreements On April 1, 2016, we gave notice of non-renewal of our Chairman’s employment agreement. Upon the termination of that agreement on April 1, 2017, he will become an employee at will. Our Chairman has agreed to reduce his cash salary by 50% commencing April 1, 2016 and accepted 355,258 unregistered shares of our Common Stock for the remaining balance of his salary, net of taxes. In addition, previously granted stock options to purchase 850,000 shares of Common Stock were terminated and he was granted the following stock options under the 2016 Stock Option Plan: (i) immediately exercisable options to purchase up to 250,000 shares of the our Common Stock; (ii) options to purchase up to 600,000 shares of our Common Stock which vest in equal annual installments on October 1 st On April 25, 2016, we entered into new employment agreements with our CEO and CFO with an initial term ending October 1, 2017 and no changes to their current base salary or benefits. The employment agreements may be renewed by the Company for additional one year terms. Rental Agreements We rent approximately 1,100 square feet of office space in Lynnfield, Massachusetts, on a rolling six-month basis at $1,250 per month. For the years ended September 30, 2016 and 2015, total rental expense in connection with this office space lease amounted to $15,000 per year. Our dual fuel conversion subsidiary leases office and warehousing space in Iowa from M&R Development (“M&R”), a company co-owned by an American Power Group employee. In April 2014, we renewed the lease agreement through April 2017 at monthly rental payments of $10,260 on a triple net basis. For the fiscal years ended September 30, 2016 and 2015, total related party rental expense in connection with non-cancellable real estate leases amounted to $142,575 and $144,934, respectively. The total future minimum rental commitment at September 30, 2016 under the above related party office and warehousing space operating lease is as follows: Years Ending September 30, 2017 $ 71,820 Lease Settlement Obligations We are currently renting property located in Georgia relating to a former discontinued business. We have the right to terminate the Georgia lease with 6 months’ notice but are obligated to continue to pay rent until the earlier of (1) the sale by the landlord of the premises; (2) the date on which a new long term tenant takes over; or (3) 3 years from the date on which we vacate the property. As a result, we have recorded a lease settlement obligation of $574,058 representing the net present value of the 36 months maximum obligation due under the new amended agreement. We currently sublease two portions of the property to an entity which is paying $8,000 per month starting in September 2015 up from $7,500 per month on a tenant-at-will basis. In March 2016, we notified the landlord of our intent to terminate the lease and are working with the landlord and our tenant towards a goal of our tenant leasing the entire facility from the landlord. In addition, we amended the existing lease with the landlord to reduce the monthly rental amount by $2,500 per month to $15,152 starting April 1, 2016. As a result, we recorded other income of $90,000 during the twelve months ended September 30, 2016 associated with the reduced net present value of the 36 months maximum obligations due under the new monthly rate. During fiscal years 2016 and 2015, we had rental income of $96,000 and $90,500, respectively, associated with the Georgia property and rental expense of $141,532 and $248,233, respectively. As a result of providing our notice of termination in March 2016, beginning in April 2016, we began reducing the lease settlement obligation liability by the monthly rental payments in lieu of expensing them. The total future minimum rental obligations at September 30, 2016, under the above real estate operating lease is as follows: Years Ending September 30, 2017 $ 181,704 2018 181,704 2019 29,800 $ 393,208 License Agreement - M & R Development In April 2012, we amended the Exclusive Patent License Agreement between M&R and us to modify the calculation of the royalty payments and the timing of the royalty payments. Under the provisions of this amendment, effective April 27, 2012 the monthly royalty due shall be the lesser of 10% of net sales (or 6% of net sales when we have paid $15 million in cumulative royalties) or 30% of pre-royalty EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization). No royalties will be due if cumulative EBITDA is less than $0. M&R has agreed that once we have paid $15 million in cumulative royalties, we can purchase all rights, title and interest in and to their dual fuel technology for an additional payment of $17.5 million to be made within twelve months thereafter. If we do not exercise the foregoing purchase right during this period, M&R has agreed to assign all dual fuel technology to us upon the receipt of $36 million in cumulative royalty payments. During the fiscal years ended September 30, 2016 and 2015, we incurred license fees to M&R of $0 and $0, respectively. License Agreement - Trident Resources, LLC On August 12, 2015, American Power Group, Inc., our wholly-owned subsidiary (“APGI”) entered into an exclusive license agreement with Trident Resources LLC, a North Dakota limited liability company (“Trident”). Pursuant to the license, APGI acquired the exclusive worldwide right, with the right to grant sublicenses, to commercialize Trident’s proprietary Natural Gas Liquids (“NGL”) process technology. Trident’s modular and mobile NGL systems process flared wellhead gas, converting the gas into hydro-carbon liquids, commonly referred to as NGL. A portion of the NGL being processed by Trident is sold as fuel, emulsifiers/dilutants or as feed stock to be further processed by refiners. The majority of the remaining associated gas is comprised of methane which is currently not sold but, if further processed, can produce pipeline grade natural gas for use in stationary and vehicular engines utilizing APG’s Fueled By Flare™ dual fuel solution. In conjunction with executing the license agreement, we issued Trident 2,000,000 shares of our common stock, valued at $300,000 (based on the value of our stock on the date of the license). The value assigned to this long-term contract is being amortized on a straight line basis over an estimated useful life of 120 months. In further consideration of the license, APGI will be required to pay royalties to Trident in the amount of 5.1% of the annual pre-tax net income of APGI’s newly formed NGL division. The royalties payable to Trident will be reduced to 3.0% of the division’s annual pre-tax net income from and after the date that the sum of all royalties paid to Trident under the license equals $15,000,000 on a cumulative basis, and will be eliminated altogether from and after the date that the sum of all royalties paid to Trident equals $36,000,000 on a cumulative basis. Upon the receipt by Trident of $36,000,000 in cumulative royalties, all right, title and interest in the licensed technology will be transferred to APGI, without further consideration. There have been no royalties paid for the years ended September 30, 2016 and September 30, 2015. |
Warrants to Purchase Common Sto
Warrants to Purchase Common Stock | 12 Months Ended |
Sep. 30, 2016 | |
Warrants and Rights Note Disclosure [Abstract] | |
Warrants to Purchase Common Stock | 8. Warrants to Purchase Common Stock In conjunction with the issuance of our 10% Convertible Preferred stock in 2012, we issued warrants which contained a “down-round” provision that provides for a reduction in the warrant exercise price if there are subsequent issuances of additional shares of common stock for consideration per share less than the per share warrant exercise prices. In October 2012, the Financial Accounting Standards Board (FASB), issued ASU 2012-04 Technical Corrections and Improvement (“ASU 2012-04”) We have historically used the Black-Scholes option pricing model to determine the fair value of options and warrants. We have considered the facts and circumstances in choosing the Black-Scholes model to calculate the fair value of the warrants with a down-round price protection feature as well as the likelihood of triggering the down-round price protection feature, which, as described below, we have concluded is remote. In determining the initial fair value of the warrants as of October 1, 2013, we prepared a valuation simulation using the Black Scholes option pricing model as well as additional models using a modified Black Scholes option pricing model and a Binomial Tree option pricing model. Both additional simulations included various reset scenarios, different exercise prices, and other assumptions, such as price volatility and interest rates, that were kept consistent with our original Black-Scholes model. The resulting warrant values as determined under the modified Black-Scholes model and the Binomial Tree option model were not materially different from the values generated using the Black-Scholes model. We have therefore determined to use the Black-Scholes model as we believe it provides a reasonable basis for valuation and takes into consideration the relevant factors of the warrants, including the down round provision. During the years ended September 30, 2016 and September 30, 2015, we recorded net warrant valuation income of $186,323 and $5,774,178, respectively associated with a change in the fair value of all warrants containing the down round provision outstanding as of September 30, 2016 and September 30, 2015. Our warrant liability was $37,285 and $223,608 as of September 30, 2016 and 2015, respectively. The warrant liabilities were valued at September 30, 2016 and 2015, using the Black-Scholes option-pricing model with the following assumptions. 10% Convertible Preferred Stock Financing Private Placement 1 Private Placement 2 September 30, 2016 September 30, 2015 September 30, 2016 September 30, 2015 Closing price per share of common stock $ 0.17 $ 0.29 $ 0.17 $ 0.29 Exercise price per share $ 0.50 $ 0.50 $ 0.50 $ 0.50 Expected volatility 73.0 % 64.0 % 73.0 % 64.0 % Risk-free interest rate .6 % .6 % .8 % .01 % Dividend yield — — — — Remaining expected term of underlying securities (years) 1.0 2.0 2.0 3.0 Warrants outstanding 17,623,387 17,623,387 6,032,787 6,032,787 Warrants outstanding with down-round provision 2,742,763 2,742,763 905,917 905,917 Private Placement 1 Private Placement 2 As of September 30, 2016, approximately 3.6 million of warrants with down-round provision remained outstanding. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 9. Fair Value Measurements Accounting principles provide guidance for using fair value to measure assets and liabilities. The guidance includes a three level hierarchy of valuation techniques used to measure fair value, defined as follows: ● Level 1 - Unadjusted Quoted Prices. The fair value of an asset or liability is based on unadjusted quoted prices in active markets for identical assets or liabilities. ● Level 2 - Pricing Models with Significant Observable Inputs. The fair value of an asset or liability is based on information derived from either an active market quoted price, which may require further adjustment based on the attributes of the financial asset or liability being measured, or an inactive market transaction. ● Level 3 - Pricing Models with Significant Unobservable Inputs. The fair value of an asset or liability is primarily based on internally derived assumptions surrounding the timing and amount of expected cash flows for the financial instrument. Therefore, these assumptions are unobservable in either an active or inactive market. We consider an active market as one in which transactions for the asset or liability occurs with sufficient frequency and volume to provide pricing information on an ongoing basis. Conversely, we view an inactive market as one in which there are few transactions of the asset or liability, the prices are not current, or price quotations vary substantially either over time or amount market makers. When appropriate, non-performance risk, or that of counterparty, is considered in determining the fair values of liabilities and assets, respectively. At September 30, 2016 and 2015, our financial instruments consisted of accounts receivable, accounts payable, notes payable and convertible notes payable. These instruments approximate their fair values as these instruments are either due currently or were negotiated currently and bear interest at market rates. Balances Measured at Fair Value on a Recurring Basis: We have classified certain warrants related to our 10% Convertible Preferred Stock private placements as a Level 3 Liability. Assumptions used in the calculation require significant judgment. The unobservable inputs in our valuation model include the probability of additional equity financing and whether the additional equity financing would trigger a reset on the down-round protection. We have assessed the fair value of the warrant on a quarterly basis retrospectively and we will reassess the fair value of the warrant liabilities on a quarterly basis going forward. The following table summarizes the financial liabilities measured a fair value on a recurring basis as of September 30, 2015 and September 30, 2016. Total Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) September 30, 2015 Warrant liability $ 223,608 $ — $ — $ 223,608 September 30, 2016 Warrant liability $ 37,285 $ — $ — $ 37,285 Level 3 Valuation The following table provides a summary of the changes in fair value of our financial liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the twelve month period ended September 30, 2016. Warrant Liability Balance at September 30, 2015 $ 223,608 Revaluation of warrants recognized in earnings (186,323 ) Balance at September 30, 2016 $ 37,285 Balances Measured at Fair Value on a Nonrecurring Basis: Effective September 14, 2016, we refinanced our debt agreement with Iowa State Bank to extend the term of the agreement and reduce the interest rate from 8.0% to 4.0%. As a result of this refinancing, it was determined that the original and new debt instruments were substantially different, and therefore, the new debt instrument was recorded at its fair value of $2,281,839 using Level 3 inputs. The fair value was determined using a discount rate of 10% and term of 120 months. See Note 5, Notes Payable, for further discussion regarding the modification of the terms of the Credit Facility. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Sep. 30, 2016 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | 10. Stockholders’ Equity Authorized Shares On October 21, 2015, our shareholders approved an amendment to our Restated Certificate of Incorporation to increase the number of authorized shares of Common Stock from 150 million to 200 million shares and on May 13, 2016 approved an additional increase to 350 million shares. Common Stock On August 12, 2015, we issued 2,000,000 shares of our unregistered common stock valued at $300,000 (based on the value of our stock on the date of the agreement) in connection with execution of an exclusive license agreement with Trident Resources LLC to commercialize their proprietary Natural Gas Liquids (“NGL”) process technology. (See Note 6). During the twelve months ended September 30, 2015, a holder exercised options to purchase 100,000 shares of Common Stock at an exercise price of $0.41 utilizing a cashless exercise feature resulting in the net issuance of 10,870 shares of Common Stock. In addition, two officers agreed to accept 128,925 shares of our Common Stock (valued at $18,049) in lieu of amounts due to them for vacation pay due them. During the twelve months ended September 30, 2016, an officer agreed to accept 100,012 shares of our Common Stock valued at $11,000 in lieu of vacation pay due him and our Chairman agreed to accept 355,258 shares of our Common Stock for a portion of his annual salary, net of taxes (valued at $35,525). Private Placement of Common Stock and Warrants During the period of July to September 2016, we completed a $1.498 million private placement of units consisting of one share of Common Stock and a warrant to purchase one share of common stock to a group of accredited investors including a Director and two entities affiliated with two other Directors. The purchase price of the common stock and exercise price of the warrant were equal the 20 day volume weighted average price preceding the receipt of each investor’s funds. In addition to $753,507 of cash proceeds, several investors agreed to convert $744,911 (including $4,911 of interest) due under 10% Related Party notes. As a result, we have issued 9,420,533 shares of Common Stock at prices ranging from $.14 to $.18 per share and warrants to purchase the same number of shares of Common Stock at exercise prices ranging from $.14 to $.17. 10% Convertible Preferred Stock In April 2012, we completed a private placement in which we entered into a securities purchase agreement with certain accredited investors and sold approximately 822 units for gross proceeds to us of $8,216,000 and provided the investors with an additional investment right to invest up to approximately $2.7 million to buy approximately 274 additional units under the same terms described above, which they did. Each unit had a purchase price of $10,000 and consisted of one share of 10% Convertible Preferred Stock convertible, at any time at the option of the holder, into 25,000 shares of Common Stock at a conversion price of $0.40 per share and one warrant to purchase 25,000 shares of Common Stock at an exercise price of $0.50 per share. The warrants may be exercised at any time during a five year period beginning October 30, 2012. The 10% Convertible Preferred Stock has a 10% annual dividend, payable quarterly in cash (currently deferred) or in shares of Common Stock. In conjunction with the January 2016 Series D 10% Convertible Preferred Stock offering, certain investors participating in the Series D offering exchanged approximately 197 shares of their 10% Convertible Preferred Stock for an equal number of Series D-2 Convertible Preferred Stock. As of September 30, 2016, there were approximately 740 shares of 10% Convertible Preferred Stock outstanding which are convertible into approximately 18,500,000 shares of Common Stock which had a fair value of approximately $3,145,000 based on the closing price of our Common Stock on September 30, 2016. During the twelve months ended September 30, 2015, 3.67 shares of 10% Convertible Preferred Stock were converted into 91,667 shares of Common Stock. Series B 10% Convertible Preferred Stock In November 2014, we sold 200 shares of Series B 10% Convertible Preferred Stock for gross proceeds of $2 million issued a warrant to purchase up to 5,000,000 shares of our common stock. Each share of the Series B 10% Convertible Preferred Stock is convertible, at any time at the option of the holder, into 25,000 shares of common stock at a conversion price of $0.40 per share. The warrant enables the investor to purchase up to 5,000,000 shares of common stock at an exercise price of $0.50 per share. The Series B 10% Convertible Preferred Stock has a 10% annual dividend, payable quarterly in cash (currently deferred) or in shares of common stock. In conjunction with the January 2016 Series D 10% Convertible Preferred Stock offering, all 200 shares of Series B 10% Convertible Preferred Stock was exchanged for an equal number of Series D-2 Convertible Preferred Stock. Series C Convertible Preferred Stock On October 21, 2015, all outstanding principal ($2.475 million) and accrued but unpaid interest (approximately $96,000) associated with our Contingent Convertible Promissory Notes (See Note 6) were automatically converted into approximately 257 shares of our Series C Convertible Preferred Stock. Each share of Series C Convertible Preferred Stock is convertible, at any time at the option of the holder, into 50,000 shares of common stock at a conversion price of $0.20 per share. In addition, we issued to each investor a five year warrant (“Warrants”) to purchase a number of shares of common stock equal to the number of shares issuable upon conversion of the Series C Preferred Stock, exercisable at $0.20 per share. In addition, one of the investors, Arrow LLC, was granted the right under certain conditions to designate two members of our Board of Directors. In conjunction with the January 2016 Series D 10% Convertible Preferred Stock offering, certain investors participating in the Series D offering exchanged approximately 205 shares of their Series C Convertible Preferred Stock for an equal number of Series D-3 Convertible Preferred Stock. As of September 30, 2016, there were approximately 52 shares of 10% Convertible Preferred Stock outstanding which are convertible into approximately 2,597,000 shares of Common Stock which had a fair value of approximately $441,000 based on the closing price of our Common Stock on September 30, 2016. Series D Convertible Preferred Stock On January 8, 2016, we sold 22 shares of Series D Convertible Preferred Stock for gross proceeds of $2.2 million to several existing shareholders and entities affiliated with several members of our Board of Directors and issued warrants to purchase up to 44,000,000 shares of our Common Stock at an exercise price of $.10 per share. Each share of the Series D Convertible Preferred Stock, which has a stated value of $100,000, is convertible, at any time at the option of the holder, into 1 million shares of Common Stock at a conversion price of $0.10 per share. The Series D Preferred Stock has a 10% annual dividend, payable quarterly in cash or in shares of Common Stock at our Board of Director’s discretion. The holders of the Series D Preferred Stock will receive certain liquidation preferences over the holders of our other convertible preferred stock and common stock, and have been provided similar preferential treatment with respect to all other shares of convertible preferred stock held by them. The warrants are subject to certain exercise restrictions, do not contain cashless exercise provisions and do not contain anti-dilution protections. The warrants may be exercised at any time with respect to not more than 22,000,000 shares of Common Stock until such time as the Company has filed a certificate of amendment to its Restated Certificate of Incorporation with the Secretary of State of the State of Delaware increasing the number of authorized shares of Common Stock from 200,000,000 to 350,000,000 shares. On May 13, 2016, our shareholders approved the increase in authorized shares and we filed the amendment shortly thereafter. If the holders of a majority of the Series D Convertible Preferred Stock (measured with reference to the number of shares of Common Stock issuable from time to time upon the exercise of all New Warrants) exercise their respective Series D warrants in whole or part, the holders of all Series D warrants are required to exercise a pro rata Each Series D investor (and their affiliates, members of their families and certain related trusts) agreed to exchange their existing 10% Convertible Preferred Stock (197 shares) and/or Series B 10% Convertible Preferred Stock (200 shares) for an equal number of shares of our new Series D-2 Convertible Preferred Stock and exchanged their Series C Convertible Preferred Stock (205 shares) for an equal number of shares of a new Series D-3 Convertible Preferred Stock. Except for the liquidation preferences described below, the terms and conditions of the Series D-2 Preferred Stock are substantially equivalent to the terms and conditions of the Series A Preferred Stock and of the Series B Preferred Stock, and the terms and conditions of the Series D-3 Preferred Stock are substantially equivalent to the terms and conditions of the Series C Preferred Stock. In connection with this private placement, our securities purchase agreements dated April 30, 2012, November 26, 2014 and June 2, 2015 were amended to reduce the exercise price on approximately 21 million warrants previously issued to the Purchasers (and their affiliates, members of their families and certain related trusts) in conjunction with these agreements to the Series D Preferred Stock conversion price noted above. We determined the relative fair value of the Series D Convertible Preferred Stock to be $894,925, the relative fair value of the investor warrants to be $1,087,333 and the relative fair value of change in exercise price of the approximate 21 million previously issued warrants to be $217,742. The fair value of the investor warrants and the repriced warrants before and after the modification was determined using Black-Scholes and recorded on the balance sheet as part of stockholder’s equity. We determined a beneficial conversion feature of $1,550,924 based on the intrinsic value of the shares of common stock to be issued pursuant to these rights. The value of the beneficial conversion feature is considered a “deemed dividend” recorded as a charge to retained earnings during the twelve months ended September 30, 2016. The April 30, 2014 Voting Agreement between us and the 10% Convertible Preferred Stock holders was amended and restated to allow the holders of a majority of the Series D Convertible Preferred Stock to designate (i) three persons to be appointed or elected to our Board of Directors and (ii) nominate three candidates for election to the Board of Directors by the holders of Common Stock voting together as a single class. As of September 30, 2016, there were 22 shares of Series D Preferred Stock outstanding which are convertible into 22,000,000 shares of Common Stock, 397 shares of Series D-2 Preferred Stock outstanding which are convertible into 9,922,215 shares of Common Stock and 205 shares of Series D-3 Preferred Stock outstanding which are convertible into 10,256,478 shares of Common Stock, which collectively had a fair value of approximately $7.2 million based on the closing price of our Common Stock on September 30, 2016. 10% Convertible Preferred Stock Dividends Our Board of Directors has determined that our cash resources are not currently sufficient to permit the payment of cash dividends in respect of any of the 10% Convertible Preferred Stock. The Board of Directors has therefore determined to suspend the payment of cash dividends, commencing with the dividend payable on September 30, 2015, until such time as the Board of Directors determines that the Company possesses funds legally available for the payment of dividends. Holders of approximately 69% of the 10% Convertible Preferred Stock and 100% of the Series B and Series D 10% Convertible Preferred Stock have agreed to defer cash payments indefinitely. During the fiscal year ended September 30, 2016, we recorded Preferred Stock dividends of $1,298,571, of which $321,692 remains in accrued dividends. Certain stockholders agreed to accept 8,659,984 shares of Common Stock (valued at $1,243,554) in lieu of cash dividend payments of $1,137,635 due for fiscal 2016 and $105,919 due for previous fiscal years. During the fiscal year ended September 30, 2015, we recorded a dividend on our 10% Convertible Preferred Stock and Series B 10% Convertible Preferred Stock of $1,125,541, of which $476,729 was paid in cash. Certain stockholders agreed to accept 2,320,837 shares of Common Stock (valued at $547,000) in lieu of cash dividend payments. 2005 Stock Option Plan The options granted under the 2005 Stock Option Plan (the “2005 Plan”) may be either options intended to qualify as “incentive stock options” under Section 422 of the Internal Revenue Code of 1986, as amended; or non-qualified stock options. The 2005 Plan expired in 2015 and was replaced by the 2016 Stock Option Plan. During fiscal year 2016, we granted options to a director to purchase an aggregate of 250,000 shares of our Common Stock at an exercise price of $0.25 per share, which represented the closing price of our stock on the date of the grant. The options granted have a ten-year term and vested equally over an eighteen month period from date of grant. The fair value of the options at the date of grant was $35,394 which was determined on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions; dividend yield of 0%; risk-free interest rate of approximately 1.4%; expected volatility based on historical trading information of approximately 68% and expected term of 10 years. During fiscal year 2016, we terminated previously granted stock options to our Chairman, CEO and CFO to purchase 2,147,000 shares, in aggregate of our Common Stock at exercise prices ranging from $.23 to $.80 per share and granted them new options under our new 2016 Plan. In addition, our Board of Directors agreed to extend the exercise period from 3 months to 18 months on options to purchase 340,000 shares of our Common Stock owned by a former director who resigned on October 1, 2015. The fair value of the options before and after the modification was determined using Black-Scholes and the difference between fair value of the extended terms and of the existing terms was $15,793 and is included in compensation expense for the twelve months ended September 30, 2016. During fiscal year 2015, we granted options to an employee to purchase an aggregate of 200,000 shares of our Common Stock at an exercise price of $0.16 per share, which represented the closing price of our stock on the date of the grant. The options granted have a ten-year term and vested immediately on date of grant. The fair value of the options at the date of grant was $21,333 which was determined on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions; dividend yield of 0%; risk-free interest rate of approximately 2%; expected volatility based on historical trading information of approximately 56% and expected term of 10 years. Year Ended Year Ended September 30, 2016 September 30, 2015 Shares Weighted Average Exercise Price Shares Weighted Average Exercise Price Outstanding at beginning of period 4,002,000 $ .36 3,802,000 $ .37 Granted 250,000 .25 200,000 .16 Forfeited or expired (2,712,000 ) .36 — — Exercised — — — — Outstanding at end of period 1,540,000 .34 4,002,000 .36 Exercisable at end of period 1,386,667 .34 3,832,000 .35 Reserved for future grants — 1,195,000 Aggregate intrinsic value of exercisable options $ 2,000 $ 57,900 Aggregate intrinsic value of all options $ 2,000 $ 57,900 Weighted average fair value of options granted during the period $ .14 $ .11 Information pertaining to options outstanding under the plan at September 30, 2016 is as follows: Options Outstanding Options Exercisable Exercise Prices Number Outstanding Weighted Average Remaining Contractual Life Weighted Average Exercise Price Number Exercisable Weighted Average Remaining Contractual Life Weighted Average Exercise Price $ .16 - .80 1,540,000 4.1 years $ .34 1,386,667 4.0 years $ .34 The following table summarizes activity related to non-vested options: Year Ended September 30, 2016 Shares Weighted Average Grant Date Fair Value Non-vested at beginning of period 170,000 $ .29 Granted 250,000 .14 Vested or terminated (266,667 ) .20 Non-vested at end of period 153,333 .21 2016 Stock Option Plan The 2016 Stock Option plan (the “2016 Plan”) was approved by our shareholders in March 2016 and has 21 million shares authorized. The options granted under the 2016 Plan may be either options intended to qualify as “incentive stock options” under Section 422 of the Internal Revenue Code of 1986, as amended; or non-qualified stock options. During fiscal 2016, we granted options under the 2016 Stock Option Plan to employees and a director to purchase 1,530,000 shares of our Common Stock in aggregate at exercise prices ranging from $.12 to $.18 per share, which represented the closing price of our stock on the date each grants. The options have a ten year term and vest equally over a period of 60 months from date of grant with the exception of 250,000 which vest equally over an eighteen month period from date of grant. The fair value of the options at the date of grant in aggregate was $133,084, which was determined on the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions; dividend yield of 0%; risk-free interest rates of approximately 1.5%; expected volatility based on historical trading information of approximately 72% and expected term of 5 years. In addition, we granted stock options to our Chairman, CEO and CFO the following aggregate stock options under the 2016 Stock Option Plan at prices ranging from $.10 to $.12 representing the closing stock price on the date of grant: (i) immediately exercisable options to purchase up to 1.85 million shares of the our Common Stock; (ii) options to purchase up to 2.6 million shares of our Common Stock which vest equally over a 5 years term from date of grant; (iii) options to purchase up to 600,000 shares of our Common Stock which vest equally over a 4 years term commencing October 1, 2016 and (iv) options to purchase up to 3.8 million shares of our Common Stock, which options shall vest in four installments upon our CEO and CFO achieving certain annual performance milestones as determined annually by our Board of Directors beginning with the fiscal year ending September 30, 2017. The fair value of the options in aggregate was $302,095, which was determined on the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions; dividend yield of 0%; risk-free interest rates of approximately ranging from 1.2% to 1.5%; expected volatility based on historical trading information of approximately 70% and expected term of 5 years. We determined that 1.85 million of the newly granted options were deemed to be modifications to the existing options under the 2005 Plan that were terminated in conjunction with the new grant. The fair value of the options before and after the modification was determined using Black-Scholes and the difference between fair value of the new options and of the existing options and $61,970 of the $241,132 overall fair value was recognized in the income statement as stock option expense during the twelve months ended September 30, 2016. The balance will be amortized over the remaining vesting term of the options. Year Ended September 30, 2016 Shares Weighted Average Exercise Price Outstanding at beginning of period — $ — Granted 10,380,000 .11 Forfeited or expired (50,000 ) .15 Exercised — — Outstanding at end of period 10,330,000 .11 Exercisable at end of period 1,877,778 .10 Reserved for future grants 10,670,000 Aggregate intrinsic value of exercisable options $ 125,889 Aggregate intrinsic value of all options $ 637,600 Weighted average fair value of options granted during the period $ .06 Information pertaining to options outstanding under the plan at September 30, 2016 is as follows: Options Outstanding Options Exercisable Exercise Prices Number Outstanding Weighted Average Remaining Contractual Life Weighted Average Exercise Price Number Exercisable Weighted Average Remaining Contractual Life Weighted Average Exercise Price $ .10 - .18 10,330,000 330 9.6 years $ .11 1,877,778 9.6 years $ .10 The following table summarizes activity related to non-vested options: Year Ended September 30, 2016 Shares Weighted Average Grant Date Fair Value Non-vested at beginning of period — $ — Granted 10,380,000 .06 Vested or terminated (1,927,778 ) .03 Non-vested at end of period 8,452,222 .04 Warrants Information pertaining to all warrants granted and outstanding is as follows: Year Ended Year Ended September 30, 2016 September 30, 2015 Shares Weighted Average Exercise Price Shares Weighted Average Exercise Price Outstanding at beginning of period 34,558,794 $ .38 26,488,294 $ .50 Granted 80,323,586 .13 8,250,000 .43 Forfeited, expired, repurchased (2,035,593 ) .35 (39,500 ) .65 Exercised — — (100,000 ) .41 Outstanding at end of period 112,846,787 .19 34,558,794 .38 Exercisable at end of period 109,966,787 .19 32,708,794 .41 Aggregate intrinsic value of exercisable warrants $ 4,727,102 $ 126,000 Aggregate intrinsic value of all warrants $ 4,729,102 $ 292,500 Weighted average fair value of options granted during the period $ .11 $ .12 Warrants Outstanding Warrants Exercisable Exercise Prices Number Outstanding Weighted Average Remaining Contractual Life Weighted Average Exercise Price Number Exercisable Weighted Average Remaining Contractual Life Weighted Average Exercise Price $ 0.10 - $0.64 112,846,787 4.5 years $ .19 109,966,787 4.5 years $ .19 Common Stock Reserved We have reserved common stock at September 30, 2016 as follows: Stock options reserved for the 2005 Stock Option Plan 1,540,000 Stock options reserved for the 2016 Stock Option Plan 10,330,000 Warrants 112,846,787 Shares issuable upon conversion of preferred stock 63,275,202 187,991,989 Approximately 86.6 million of shares reserved for the warrants relate to our various Preferred Stock offerings; approximately 13.9 million of shares relate to warrants associated with the Iowa State Bank guaranty; 9.4 million shares associated with the July 2016 Private Placement of Common Stock; approximately 1.9 million shares relate to our WPU Leasing borrowings and approximately 1 million shares relate to warrants issued to the Wheel Time Network. |
Employee Benefit Plan
Employee Benefit Plan | 12 Months Ended |
Sep. 30, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Employee Benefit Plan | 11. Employee Benefit Plan We have implemented a Section 401(k) plan for all eligible employees. Employees are permitted to make elective deferrals of up to 75% of employee compensation up to the maximum contribution allowed by law and employee contributions to the 401(k) plan are fully vested at all times. We may make discretionary contributions to the 401(k) plan which becomes vested over a period of five years. There were no corporate contributions to the 401(k) plan during the years ended September 30, 2016 and 2015. |
Concentrations
Concentrations | 12 Months Ended |
Sep. 30, 2016 | |
Risks and Uncertainties [Abstract] | |
Concentrations | 12. Concentrations Long-lived Assets, Revenues and Revenue by Geographic Areas: We have assets located in Iowa and North Dakota, where 100% of the long-lived assets are held. During the fiscal year ended September 30, 2016, approximately 24% of our sales were derived from our dual fuel stationary solution for oil and gas applications and 75% from our dual fuel vehicular applications. During the fiscal year ended September 30, 2015, approximately 65% of our sales were derived from our dual fuel stationary solution for oil and gas applications and 33% from our dual fuel vehicular applications. Sales of our natural gas liquids made up less than 2% of our sales in fiscal year ended September 30, 2016 and September 30, 2015. Our dual fuel revenue decreased 37% in fiscal year ended September 30, 2016, as compared to total revenue in the prior fiscal year. Our stationary dual fuel sales in fiscal year September 30, 2016, decreased 77% as compared to stationary dual fuel sales in fiscal year September 30, 2015. Vehicular dual fuel sales from fiscal year ended September 30, 2015, increased 43% as compared to vehicular dual fuel sales for fiscal year September 30, 2015. Sales of natural gas liquids began in August 2015 and operations ceased in November 2015, when low oil prices impacted both the number of potential well sites as well as the price we are paid for the NGLs. This prompted us to idle our flare recovery systems pending improvement in both metrics. Consequently, we did not have significant earnings from natural gas liquids during the fiscal years ended September 30, 2016 or September 30, 2015. September 30, 2016 September 30, 2015 Stationary Dual Fuel Systems $ 438,862 $ 1,936,364 Vehicular Dual Fuel Systems 1,393,741 975,374 Natural Gas Liquids $ 29,982 $ 46,843 $ 1,862,585 $ 2,958,581 The following table sets forth sales by geographic area: September 30, 2016 September 30, 2015 United States $ 1,378,590 $ 2,407,734 Canada 97,333 218,897 Dominican Republic — 224,200 Mexico 386,662 65,750 Peru — 42,000 $ 1,862,585 $ 2,958,581 Customers: During the fiscal year ended September 30, 2016, one oil and gas stationary customer accounted for 10% of consolidated net sales. The customer also accounted for 39% of consolidated net sales in fiscal year ended September 30, 2015. This customer is one of our stationary Dealer/Certified Installers who focuses specifically on the oil and gas industry. While we believe the loss of this Dealer/Certified Installer would have a short term negative impact on our business, we believe that end customer interest remains strong and there are alternatives available to us to continue meeting end customer demand, including the ability to market and install through in-house resources. Therefore, we do not believe that the loss of this individual customer would have a material adverse effect on our business. In addition, we believe the impact of the loss of this individual customer would be mitigated with the signing of additional Dealer/Installer agreements. During the fiscal year ended September 30, 2016, three dual fuel vehicular customers accounted for 59% of consolidated net sales. One of the customers is a vehicular Dealer/Certified Installer who focuses specifically on rebuilding Class 8 “Glider” tractors. A Glider is a new tractor with rebuilt or remanufactured powertrain components and in some cases can weigh 1,000 pounds less than a new tractor making it more cost effective to operate. The second customer is an international vehicular Dealer/Certified Installer who focuses specifically on Class 8 tractor maintenance and repair opportunities, who is located in Mexico. The third is an APG direct end customer, where a Dealer/Certified Installer was not available. During the fiscal year ended September 30, 2015, one dual fuel vehicular customer accounted for 14% of consolidated net sales. This customer is a vehicular Dealer/Certified Installer who focuses specifically on Class 8 tractor maintenance and repair opportunities but is not one of the three dual fuel customers identified in fiscal year ended September 30, 2016. While we believe the loss of this direct end customer and the Dealer/Certified Installers would have a short term negative impact on our business, we believe that end customer interest remains strong and there are alternatives available to us to continue meeting end customer demand, including the ability to market and install through in-house resources. Therefore, we do not believe that the loss of this individual customer would have a material adverse effect on our business. Vehicular revenues for the fiscal year ended September 30, 2016 increased approximately $418,000 or 43% to approximately $1.4 million. The increase in vehicular revenue was due to the addition of a new Dealer/Installer in Mexico. Vehicular revenues for the fiscal year ended September 30, 2015 decreased approximately $956,000 or 49% to approximately $1 million. Because our dual fuel technology displaces higher cost diesel fuel with lower cost and cleaner burning natural gas, the decrease in oil/diesel pricing impacted the timing of dealer restocking orders and the implementation schedules of existing and prospective customers. With over 3.0 million Class 8 vehicles on the road in North America, our industry leading EPA approvals of 497 and our network of dealers/installers, we believe we have the resources necessary to continue to grow our vehicular revenue to mitigate the potential loss of any one individual oil and gas stationary customer. As of January 2017, we have an industry-leading 503 overall approvals from the Environmental Protection Agency (“EPA”) including 47 approvals for engine families with SCR (selective catalytic reduction) technology. We believe that of the approximately 2 million Class 8 trucks operating in North America, an estimated 600,000 to 700,000 Class 8 trucks fall into the Inside Useful Life designation. We have also received State of California Air Resources Board (“CARB”) Executive Order Certifications for Volvo/Mack D-13/MP8 (2010-2013), Cummins ISX (2010-2012) and Detroit Diesel DD15 (2010-2012) engine models for the heavy-duty diesel engine families ranging from 375HP to 600HP. |
Segment Information
Segment Information | 12 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
Segment Information | 13. Segment Information We have two reportable operating segments: (1) dual fuel conversion operations and (2) natural gas liquids operations. Each operating segment has its respective management team. Our Chief Executive Officer has been identified as the chief operating decision maker (CODM) as he is responsible for assessing the performance of the segments and decides how to allocate resources to the segments. Income (loss) from operations is the measure of profit and loss that our CODM uses to assess performance and make decisions. Assets are a measure used to assess the performance of the company by the CODM; therefore we will report assets by segment in our disclosures. Income (loss) from operations represents the net sales less the cost of sales and direct operating expenses incurred within the operating segments as well as the allocation of some but not all corporate operating expenses. These unallocated costs include certain corporate functions (certain legal, accounting, wage, public relations and interest expense) and are included in the results below under Corporate in the reconciliation of operating results. Management does not consider unallocated Corporate in its management of segment reporting. There were no sales between segments for the fiscal years ending September 30, 2016 and September 30, 2015. Dual Fuel Conversions NGL Services Corporate Consolidated Fiscal 2016 Net sales $ 1,832,603 $ 29,982 $ — $ 1,862,585 Amortization 828,948 30,000 167,487 1,026,435 Depreciation 221,259 173,300 — 394,559 Operating loss from continuing operations (3,080,407 ) (759,912 ) (1,440,257 ) (5,280,576 ) Interest and financing costs 280,657 526,495 — 807,152 Total assets 5,799,967 3,056,199 961,899 9,818,065 Capital expenditures 29,865 465,746 — 495,611 Software development 233,974 — — 233,974 Dual Fuel Conversions NGL Services Corporate Consolidated Fiscal 2015 Net sales $ 2,911,738 $ 46,843 $ — $ 2,958,581 Amortization 707,942 5,000 46,826 759,768 Depreciation 294,131 28,883 — 323,014 Operating loss from continuing operations (2,738,171 ) (212,218 ) (1,396,213 ) (4,346,602 ) Interest and financing costs 287,265 36,139 58,762 382,166 Total assets 6,479,389 3,342,992 1,189,376 11,011,757 Capital expenditures 377,212 3,153,408 — 3,530,620 Software development 487,220 — — 487,220 |
Income Taxes
Income Taxes | 12 Months Ended |
Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 14. Income Taxes Historically we have provided a valuation reserve equal to 100% of our potential deferred tax benefit due to the uncertainty of our ability to realize the anticipated benefit given our historical losses. The difference between the statutory federal income tax rate of 34% and the effective rate is primarily due to net operating losses incurred by us and the provision of a valuation reserve against the related deferred tax assets. The following differences give rise to deferred income taxes: September 30, 2016 September 30, 2015 Net operating loss carry forwards $ 15,066,164 $ 13,401,012 General business credits 352,582 323,480 Differences in fixed asset basis (95,345 ) (51,039 ) Alternative Minimum Tax amounts 14,923 14,923 State NOL amounts 1,131,620 944,948 Capitalized development costs (921,142 ) (1,043,330 ) Other, net 291,865 201,039 15,840,667 13,791,033 Valuation reserve (15,840,667 ) (13,791,033 ) Net deferred tax asset $ — $ — The following differences between the U.S. Federal statutory income tax rate and our effective tax rate are: September 30, 2016 September 30, 2015 Statutory U.S. tax rate 34.0 % 34.0 % State taxes, net of federal benefit 2.8 2.3 Amortization (0.4 ) 4.0 All others, net (2.9 ) 11.1 U.S. business credits 0.3 (3.6 ) Revaluation of warrants 0.9 (419.8 ) Contingent Convertible Notes/Warrant extensions (7.2 ) 33.0 Valuation allowance (27.5 ) 339.0 Effective Tax Rate — % — % As of September 30, 2016, we had net operating loss carryforwards of approximately $44 million. The net operating loss carryforwards expire beginning in 2021 through 2034. In addition, we have Federal tax credit carryforwards of approximately $368,000 available to reduce future tax liabilities. The Federal tax credit carryforwards expire beginning in 2030 through 2034. These carryforwards may be subject to limitations under Sections 382 and 383 of the Internal Revenue Code if significant ownership changes have been determined to have occurred. |
Summary of Significant Accoun21
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of Presentation The consolidated financial statements include the accounts of APG and our wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. |
Management Estimates | Management Estimates The preparation of financial statements in conformity with the United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the amounts of revenues and expenses recorded during the reporting period. Actual results could differ from those estimates. Such estimates relate primarily to the evaluation of intangible assets, the valuation reserve on inventory, the value of our lease settlement obligation, the warranty accrual and the value of equity instruments issued. The amount that may be ultimately realized from assets and liabilities could differ materially from the values recorded in the accompanying financial statements as of September 30, 2016. |
Cash Equivalents | Cash Equivalents Cash equivalents include short-term investments with original maturities of three months or less. |
Certificates of Deposit | Certificates of Deposit All certificate of deposit investments have an original maturity of more than three months but less than three years and are stated at original purchase price plus interest, which approximates fair value. As of fiscal year ended September 30, 2016 and 2015, respectively, we have pledged a certificate of deposit for $0 and $309,984, as collateral for two loans currently outstanding with Iowa State Bank. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments which potentially subject us to a concentration of credit risk are cash and cash equivalents. We maintain our bank accounts at multiple banks which at times such balances may exceed FDIC insured limits. We have not experienced any losses as a result of this practice. |
Accounts Receivable | Accounts Receivable Accounts receivable are carried at original invoice amount less an estimate made for doubtful accounts. Management determines the allowance for doubtful accounts by regularly evaluating past due individual customer receivables and considering a customer’s financial condition, credit history, and the current economic conditions. Individual accounts receivable are written off when deemed uncollectible, with any future recoveries recorded as income, when received. |
Inventory | Inventory Raw material inventory primarily consists of dual fuel conversion components. Work in progress includes materials, labor and direct overhead associated with incomplete dual fuel conversion projects. All inventory is valued at the lower of cost or market on the first-in first-out (FIFO) method. As of September 30, 2016 and September 30, 2015, respectively, we had recorded inventory valuation allowance of $279,580 and $193,637. Inventory consists of the following: September 30, 2016 September 30, 2015 Raw materials, net of valuation allowance $ 507,035 $ 514,041 Work in progress - 25,784 Finished goods 1,210 1,169 Total inventory $ 508,245 $ 540,994 |
Property and Equipment | Property and Equipment Property and equipment are stated at cost. Depreciation and amortization expense is provided on the straight-line method. Expenditures for maintenance, repairs and minor renewals are charged to expense as incurred. Significant improvements and major renewals that extend the useful life of equipment are capitalized. |
Advertising Costs | Advertising Costs We expense advertising costs as incurred. Advertising costs were $106,780 and $127,558 for the fiscal years ended September 30, 2016 and 2015, respectively. |
Revenue Recognition | Revenue Recognition Our dual fuel conversion operations derive revenue from (1) product revenue which is earned from the sale and installation of dual fuel conversion equipment and (2) maintenance and service work orders. All components are purchased from external sources including several proprietary patented components which are configured by our internal engineering staff to a customer’s specific diesel engine family. The components are assembled into installation kits by us and then delivered on site for installation. All installations are managed by an American Power Group led team or certified third party installer. Overall, our services and dual fuel conversion equipment for both vehicular and stationary systems are generally sold based upon purchase orders or contracts with our dealers and customers that include fixed or determinable prices but do not include right of return provisions or other significant post-delivery obligations. We recognize revenue from product sales when title passes to the customer, the customer assumes risks and rewards of ownership, collectability is reasonably assured, and delivery occurs as directed by our customer. Service revenue, including engineering services, is recognized when the services are rendered and collectability is reasonably assured. Our wellhead flare capture and recovery services (“NGL”) operation derives revenues from product sales at the time title to the product transfers to the purchaser, which typically occurs upon receipt of the product by the purchaser. We record transportation costs and volume differentials, as cost of sales when incurred. Volume differentials result from differences in the measurement of product volumes when delivered to customer terminals. Bill and Hold Arrangements. Multiple-Element Arrangements |
Shipping and Handling Fees and Costs | Shipping and Handling Fees and Costs Shipping and handling fees and costs billed to customers and incurred by us are reported on a net basis in cost of sales in the consolidated statements of operations. |
Income Taxes | Income Taxes Deferred tax assets and liabilities are recorded for temporary differences between the financial statement and tax basis of assets and liabilities using the currently enacted income tax rates expected to be in effect when the taxes are actually paid or recovered. A deferred tax asset is also recorded for net operating loss and tax credit carryforwards to the extent their realization is more likely than not. The deferred tax benefit for the period represents the change in the net deferred tax asset or liability from the beginning to the end of the period. As of September 30, 2016, we had no uncertain tax positions that qualify for either recognition or disclosure in the financial statements. With few exceptions, we are no longer subject to U.S. Federal, state or local income tax examinations by authorities for years before fiscal 2013. |
Stock-Based Compensation | Stock-Based Compensation We measure and recognize compensation cost for all share-based awards based on the grant-date fair value estimated using the Black-Scholes option pricing model. We have estimated for forfeitures in determining expected terms on stock options for calculating expense. Amortization of stock compensation expense was $160,244 and $46,826 for the fiscal years ended September 30, 2016 and 2015, respectively. The unamortized compensation expense at September 30, 2016 was $296,800 and will be amortized over a weighted average remaining amortizable life of approximately 4.25 years. The fair value of each option grant during the year ended September 30, 2016 under the 2016 Stock Option Plan was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions; dividend yield of 0%; risk-free interest rates of approximately 1.5%; expected volatility based on historical trading information of approximately 72% and expected terms of 5 years. The fair value of each option grant during the year ended September 30, 2016 under the 2005 Stock Option Plan was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions; dividend yield of 0%; risk-free interest rate of approximately 2%; expected volatility based on historical trading information of approximately 56% and expected terms of 5 years. The fair value of each option grant during the year ended September 30, 2015 under the 2005 Stock Option Plan was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions; dividend yield of 0%; risk-free interest rate of approximately 2%; expected volatility based on historical trading information of approximately 56% and expected term of 10 years. |
Intangible Assets | Intangible Assets We review intangibles for impairment annually, or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of our intangible assets below their carrying value. In conjunction with the exclusive license agreement from Trident Resources, LLC, we recognized $300,000 associated with the execution of the agreement. The value is being amortized on a straight line basis over an estimated useful life of 120 months. Amortization expense associated with the long term technology license agreement is $30,000 and $5,000 for the fiscal years ended September 30, 2016 and 2015, respectively. Accumulated amortization was $35,000 and $5,000 at September 30, 2016 and 2015, respectively. In conjunction with the American Power Group acquisition and license agreement, we recognized $500,000 associated with the execution of a long term technology license agreement and $500,000 associated with the purchase of the dual fuel conversion technology. Both values are being amortized on a straight line basis over an estimated useful life of 120 months. Amortization expenses associated with the long term technology license agreement and the purchased dual fuel conversion technology was $100,000 for each of the fiscal years ended September 30, 2016 and 2015. Accumulated amortization was $716,667 and $616,667 at September 30, 2016 and 2015, respectively. A critical component of our dual fuel aftermarket conversion solution is the internally developed software component of our electronic control unit. The software allows us to seamlessly and constantly monitor and control the various gaseous fuels to maximize performance and emission reduction while remaining within all original OEM diesel engine performance parameters. We have developed a base software application and EPA testing protocol for both our OUL and IUL engine applications, which will be customized for each engine family approved in order to maximize the performance of the respective engine family. During fiscal year 2011, we incurred costs to develop these software applications that were recorded as research and development costs and expensed as incurred until we were able to establish technological feasibility, which we did in September 2011 with our first EPA engine family approval. As a result, we began capitalizing costs associated with our software application development. We will cease capitalization of additional costs when each engine family is available for general release to customers. As of September 30, 2016, we have capitalized $4,609,222 of development costs associated with our Outside Useful Life (“OUL”) ($1,927,433) and Inside Useful Life (“IUL”) ($2,681,789) applications, which will be amortized on a straight line basis over an estimated useful life of 60 months for OUL applications and 84 months for IUL applications. Amortization costs for the fiscal years ended September 30, 2016 and 2015, respectively, were $728,948 and $607,942. Amortization expense associated with related intangibles during the next five years and thereafter is anticipated to be: NGL Services Dual Fuel Years ending September 30: Contracts Contracts Technology Software Development Total 2017 $ 30,000 $ 50,000 $ 50,000 $ 737,401 $ 867,401 2018 30,000 50,000 50,000 565,418 695,418 2019 30,000 41,667 41,667 387,017 500,351 2020 30,000 — — 335,037 365,037 2021 30,000 — — 317,797 347,797 2022 and thereafter 115,000 — — 160,432 275,432 $ 265,000 $ 141,667 $ 141,667 $ 2,503,102 $ 3,051,436 |
Product Warranty Costs | Product Warranty Costs We provide for the estimated cost of product warranties for our dual fuel products at the time product revenue is recognized. Factors that affect our warranty reserves include the number of units sold, historical and anticipated rates of warranty repairs, and the cost per repair. We assess the adequacy of the warranty provision on a quarterly basis and we may adjust this provision if necessary. The following table provides the detail of the change in our product warranty accrual relating to dual fuel products as of: September 30, 2016 September 30, 2015 Warranty accrual at the beginning of the period $ 167,180 $ 221,562 Charged to costs and expenses relating to new sales 51,754 70,426 Costs of product warranty claims (30,221 ) (124,808 ) Warranty accrual at the end of period $ 188,713 $ 167,180 |
Long-Lived Assets | Long-Lived Assets Long-lived assets to be held and used are analyzed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. We evaluate at each balance sheet date whether events and circumstances have occurred that indicate possible impairment. If there are indications of impairment, we use future undiscounted cash flows of the related asset or asset grouping over the remaining life in measuring whether the assets are fully recoverable. In the event such cash flows are not expected to be sufficient to recover the recorded asset values, the assets are written down to their estimated fair value. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value of asset less the cost to sell. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements Revenue from Contracts with Customers Share Based Payments. Going Concern Debt Issuance Costs. Inventory Measurement. Leases. Leases (Topic 842) Revenue Standard’s Principal-Versus-Agent Guidance. Share-Based Compensation No other new accounting pronouncement issued or effective has had, or is expected to have, a material impact on our consolidated financial statements. |
Reclassification | Reclassification Certain amounts in the 2015 financial statements have been reclassified to conform to the 2016 presentation. These reclassifications had no effect on previously reported results of operations or retained earnings. |
Net Income Per Share | Net Income Per Share Basic net income per share is calculated by dividing the net income less the sum of 10% Convertible Preferred Stock dividends declared by the weighted average number of common shares outstanding during the period. Diluted earnings per share reflect additional common shares that would have been outstanding if potentially dilutive common shares had been issued, as well as any adjustment to income that would result from the assumed conversion. Potential common shares that may be issued by us relate to outstanding 10% Convertible Preferred Stock, stock options and warrants. Basic net income per share is calculated by dividing the net loss less the sum of 10% Convertible Preferred Stock dividends declared by the weighted average number of common shares outstanding during the period. Diluted earnings per share reflect additional common shares that would have been outstanding if potentially dilutive common shares had been issued, as well as any adjustment to income that would result from the assumed conversion. Potential common shares that may be issued by us relate to outstanding 10% Convertible Preferred Stock, stock options and warrants. Basic and diluted net (loss) income per share is ($0.13) and $0.01 for the years ended September 30, 2016 and 2015, respectively, which does not include the effect of the inclusion of 10% Convertible Preferred Stock, outstanding options and warrants since their inclusion would be anti-dilutive. The calculation of diluted net income per share above excludes 38,600,194 options and warrants that are outstanding at September 30, 2015 and 28,444,452 shares issuable upon conversion of Preferred Stock at September 30, 2015. Despite our operating income, these options and warrants are deemed to be anti-dilutive as their exercise price exceeds the average closing price used in the calculation of fully diluted shares. In addition, in October 2015, we issued $2.475 million of Series C Convertible Preferred Stock which converted into 12.85 million shares of Common Stock and warrants to purchase 12.85 million shares of Common Stock. |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Schedule of Inventory | Inventory consists of the following: September 30, 2016 September 30, 2015 Raw materials, net of valuation allowance $ 507,035 $ 514,041 Work in progress - 25,784 Finished goods 1,210 1,169 Total inventory $ 508,245 $ 540,994 |
Schedule of Intangible Assets of Future Amortization Expenses | Amortization expense associated with related intangibles during the next five years and thereafter is anticipated to be: NGL Services Dual Fuel Years ending September 30: Contracts Contracts Technology Software Development Total 2017 $ 30,000 $ 50,000 $ 50,000 $ 737,401 $ 867,401 2018 30,000 50,000 50,000 565,418 695,418 2019 30,000 41,667 41,667 387,017 500,351 2020 30,000 — — 335,037 365,037 2021 30,000 — — 317,797 347,797 2022 and thereafter 115,000 — — 160,432 275,432 $ 265,000 $ 141,667 $ 141,667 $ 2,503,102 $ 3,051,436 |
Schedule of Product Warranty Cost | The following table provides the detail of the change in our product warranty accrual relating to dual fuel products as of: September 30, 2016 September 30, 2015 Warranty accrual at the beginning of the period $ 167,180 $ 221,562 Charged to costs and expenses relating to new sales 51,754 70,426 Costs of product warranty claims (30,221 ) (124,808 ) Warranty accrual at the end of period $ 188,713 $ 167,180 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment for our American Power Group subsidiary consist of the following: September 30, 2016 September 30, 2015 Estimated Useful Lives Leasehold improvements $ 127,087 $ 127,087 5 years Machinery and equipment 3,133,075 3,342,202 3 – 10 years Construction in progress 1,902,654 1,436,908 Less accumulated depreciation (1,372,451 ) (1,167,144 ) Machinery and equipment, net $ 3,790,365 $ 3,739,053 |
Notes Payable_Credit Faciliti24
Notes Payable/Credit Facilities (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Summary of Notes Payable | Credit Facilities September 30, 2016 September 30, 2015 Notes payable consists of the following at: Revolving line of credit, Iowa State Bank, secured by Security Agreement, Business Loan Agreement and guaranty from two related party shareholders dated September 14, 2016, with an interest rate of 4%, with interest payments due monthly and principal due September 14, 2017 $ 165,000 $ 500,000 Term note payable, Iowa State Bank, secured by Security Agreement and Business Loan Agreement dated September 14, 2016 and guaranty from two related party shareholders, with an interest rate of 4%, requiring monthly payments of $30,659, beginning December 14, 2016. The maturity date of the loan is November 14, 2026. 3,000,000 2,541,414 Other unsecured term note payable with interest rate ranging from 3.54% to 4.03%, requiring monthly payments of principal and interest with due dates ranging from February 2017 to June 2017 39,028 44,315 3,204,028 3,085,729 Less current portion (391,496 ) (854,682 ) Less unamortized discount and deferred financing fees, net of current (659,119 ) (26,016 ) Notes payable, non-current portion $ 2,153,413 $ 2,205,031 |
Schedule of Maturities of Carrying Values of Notes Payable | The aggregate annual maturities (which excludes unamortized discount of $0.7 million) for all notes payable as of September 30, 2016, over the next five years and thereafter, are as follows: Years Ending September 30: 2017 $ 391,496 2018 258,639 2019 269,326 2020 280,208 2021 and beyond 2,004,359 $ 3,204,028 |
Notes Payable, Related Parties
Notes Payable, Related Parties (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Summary of Notes Payable - Related Parties | September 30, 2016 September 30, 2015 Notes payable, related parties consists of the following at: Term note payable, Trident Resources, LLC, secured by liens on equipment with an interest rate of 6.0% and requiring 48 monthly payments of $40,312, commencing February 29, 2016 with a due date of January 31, 2020 1,716,500 1,716,500 Term notes payable, WPU Leasing LLC, secured by liens on equipment with an interest rate of 22.2% and requiring the first partial payment of $21,821, with various payment structures with varying amounts, commencing on various dates with a due date of August 31, 2019 1,758,484 1,385,843 Officer’s 10% promissory note, due September 30, 2017 50,000 50,000 3,524,984 3,152,343 Less current portion (744,614 ) (386,083 ) Less deferred financing fees (39,002 ) (39,002 ) Notes payable, related parties non-current portion $ 2,741,368 $ 2,727,258 |
Schedule of Maturities of Carrying Values of Notes Payable - Related Parties | The following is a summary of maturities of carrying values of all notes payable as it relates to the related party notes as of September 30, 2016: Years Ending September 30: 2017 $ 744,614 2018 926,660 2019 1,036,215 2020 463,592 2021 and beyond 353,903 $ 3,524,984 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
Leases [Abstract] | |
Schedule of Future Minimum Rental Commitment | The total future minimum rental commitment at September 30, 2016 under the above related party office and warehousing space operating lease is as follows: Years Ending September 30, 2017 $ 71,820 The total future minimum rental obligations at September 30, 2016, under the above real estate operating lease is as follows: Years Ending September 30, 2017 $ 181,704 2018 181,704 2019 29,800 $ 393,208 |
Warrants to Purchase Common S27
Warrants to Purchase Common Stock (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
Warrants and Rights Note Disclosure [Abstract] | |
Assumptions Used For Valuation of Warrant Liabilities | The warrant liabilities were valued at September 30, 2016 and 2015, using the Black-Scholes option-pricing model with the following assumptions. 10% Convertible Preferred Stock Financing Private Placement 1 Private Placement 2 September 30, 2016 September 30, 2015 September 30, 2016 September 30, 2015 Closing price per share of common stock $ 0.17 $ 0.29 $ 0.17 $ 0.29 Exercise price per share $ 0.50 $ 0.50 $ 0.50 $ 0.50 Expected volatility 73.0 % 64.0 % 73.0 % 64.0 % Risk-free interest rate .6 % .6 % .8 % .01 % Dividend yield — — — — Remaining expected term of underlying securities (years) 1.0 2.0 2.0 3.0 Warrants outstanding 17,623,387 17,623,387 6,032,787 6,032,787 Warrants outstanding with down-round provision 2,742,763 2,742,763 905,917 905,917 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Summary of Financial Liabilities Measured at Fair Value on Recurring Basis | The following table summarizes the financial liabilities measured a fair value on a recurring basis as of September 30, 2015 and September 30, 2016. Total Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) September 30, 2015 Warrant liability $ 223,608 $ — $ — $ 223,608 September 30, 2016 Warrant liability $ 37,285 $ — $ — $ 37,285 |
Summary of Changes in Fair Value of Financial Liabilities Measured at Fair Value | The following table provides a summary of the changes in fair value of our financial liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the twelve month period ended September 30, 2016. Warrant Liability Balance at September 30, 2015 $ 223,608 Revaluation of warrants recognized in earnings (186,323 ) Balance at September 30, 2016 $ 37,285 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
Schedule of Warrants Granted and Outstandings | Information pertaining to all warrants granted and outstanding is as follows: Year Ended Year Ended September 30, 2016 September 30, 2015 Shares Weighted Average Exercise Price Shares Weighted Average Exercise Price Outstanding at beginning of period 34,558,794 $ .38 26,488,294 $ .50 Granted 80,323,586 .13 8,250,000 .43 Forfeited, expired, repurchased (2,035,593 ) .35 (39,500 ) .65 Exercised — — (100,000 ) .41 Outstanding at end of period 112,846,787 .19 34,558,794 .38 Exercisable at end of period 109,966,787 .19 32,708,794 .41 Aggregate intrinsic value of exercisable warrants $ 4,727,102 $ 126,000 Aggregate intrinsic value of all warrants $ 4,729,102 $ 292,500 Weighted average fair value of options granted during the period $ .11 $ .12 |
Schedule of Warrants Outstanding and Warrants Exercisable | Warrants Outstanding Warrants Exercisable Exercise Prices Number Outstanding Weighted Average Remaining Contractual Life Weighted Average Exercise Price Number Exercisable Weighted Average Remaining Contractual Life Weighted Average Exercise Price $ 0.10 - $0.64 112,846,787 4.5 years $ .19 109,966,787 4.5 years $ .19 |
Schedule of Common Stock Reserved | We have reserved common stock at September 30, 2016 as follows: Stock options reserved for the 2005 Stock Option Plan 1,540,000 Stock options reserved for the 2016 Stock Option Plan 10,330,000 Warrants 112,846,787 Shares issuable upon conversion of preferred stock 63,275,202 187,991,989 |
2005 Stock Option Plan [Member] | |
Schedule of Stock Options Activity | Year Ended Year Ended September 30, 2016 September 30, 2015 Shares Weighted Average Exercise Price Shares Weighted Average Exercise Price Outstanding at beginning of period 4,002,000 $ .36 3,802,000 $ .37 Granted 250,000 .25 200,000 .16 Forfeited or expired (2,712,000 ) .36 — — Exercised — — — — Outstanding at end of period 1,540,000 .34 4,002,000 .36 Exercisable at end of period 1,386,667 .34 3,832,000 .35 Reserved for future grants — 1,195,000 Aggregate intrinsic value of exercisable options $ 2,000 $ 57,900 Aggregate intrinsic value of all options $ 2,000 $ 57,900 Weighted average fair value of options granted during the period $ .14 $ .11 |
Schedule of Options Outstanding | Information pertaining to options outstanding under the plan at September 30, 2016 is as follows: Options Outstanding Options Exercisable Exercise Prices Number Outstanding Weighted Average Remaining Contractual Life Weighted Average Exercise Price Number Exercisable Weighted Average Remaining Contractual Life Weighted Average Exercise Price $ .16 - .80 1,540,000 4.1 years $ .34 1,386,667 4.0 years $ .34 |
Schedule of Activity Related to Non-vested Options | The following table summarizes activity related to non-vested options: Year Ended September 30, 2016 Shares Weighted Average Grant Date Fair Value Non-vested at beginning of period 170,000 $ .29 Granted 250,000 .14 Vested or terminated (266,667 ) .20 Non-vested at end of period 153,333 .21 |
2016 Stock Option Plan [Member] | |
Schedule of Stock Options Activity | The balance will be amortized over the remaining vesting term of the options. Year Ended September 30, 2016 Shares Weighted Average Exercise Price Outstanding at beginning of period — $ — Granted 10,380,000 .11 Forfeited or expired (50,000 ) .15 Exercised — — Outstanding at end of period 10,330,000 .11 Exercisable at end of period 1,877,778 .10 Reserved for future grants 10,670,000 Aggregate intrinsic value of exercisable options $ 125,889 Aggregate intrinsic value of all options $ 637,600 Weighted average fair value of options granted during the period $ .06 |
Schedule of Options Outstanding | Information pertaining to options outstanding under the plan at September 30, 2016 is as follows: Options Outstanding Options Exercisable Exercise Prices Number Outstanding Weighted Average Remaining Contractual Life Weighted Average Exercise Price Number Exercisable Weighted Average Remaining Contractual Life Weighted Average Exercise Price $ .10 - .18 10,330,000 330 9.6 years $ .11 1,877,778 9.6 years $ .10 |
Schedule of Activity Related to Non-vested Options | The following table summarizes activity related to non-vested options: Year Ended September 30, 2016 Shares Weighted Average Grant Date Fair Value Non-vested at beginning of period — $ — Granted 10,380,000 .06 Vested or terminated (1,927,778 ) .03 Non-vested at end of period 8,452,222 .04 |
Concentrations (Tables)
Concentrations (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
Risks and Uncertainties [Abstract] | |
Schedules of Concentration of Risk | September 30, 2016 September 30, 2015 Stationary Dual Fuel Systems $ 438,862 $ 1,936,364 Vehicular Dual Fuel Systems 1,393,741 975,374 Natural Gas Liquids $ 29,982 $ 46,843 $ 1,862,585 $ 2,958,581 The following table sets forth sales by geographic area: September 30, 2016 September 30, 2015 United States $ 1,378,590 $ 2,407,734 Canada 97,333 218,897 Dominican Republic — 224,200 Mexico 386,662 65,750 Peru — 42,000 $ 1,862,585 $ 2,958,581 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | There were no sales between segments for the fiscal years ending September 30, 2016 and September 30, 2015. Dual Fuel Conversions NGL Services Corporate Consolidated Fiscal 2016 Net sales $ 1,832,603 $ 29,982 $ — $ 1,862,585 Amortization 828,948 30,000 167,487 1,026,435 Depreciation 221,259 173,300 — 394,559 Operating loss from continuing operations (3,080,407 ) (759,912 ) (1,440,257 ) (5,280,576 ) Interest and financing costs 280,657 526,495 — 807,152 Total assets 5,799,967 3,056,199 961,899 9,818,065 Capital expenditures 29,865 465,746 — 495,611 Software development 233,974 — — 233,974 Dual Fuel Conversions NGL Services Corporate Consolidated Fiscal 2015 Net sales $ 2,911,738 $ 46,843 $ — $ 2,958,581 Amortization 707,942 5,000 46,826 759,768 Depreciation 294,131 28,883 — 323,014 Operating loss from continuing operations (2,738,171 ) (212,218 ) (1,396,213 ) (4,346,602 ) Interest and financing costs 287,265 36,139 58,762 382,166 Total assets 6,479,389 3,342,992 1,189,376 11,011,757 Capital expenditures 377,212 3,153,408 — 3,530,620 Software development 487,220 — — 487,220 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of Deferred Tax Assets and Liabilities | The following differences give rise to deferred income taxes: September 30, 2016 September 30, 2015 Net operating loss carry forwards $ 15,066,164 $ 13,401,012 General business credits 352,582 323,480 Differences in fixed asset basis (95,345 ) (51,039 ) Alternative Minimum Tax amounts 14,923 14,923 State NOL amounts 1,131,620 944,948 Capitalized development costs (921,142 ) (1,043,330 ) Other, net 291,865 201,039 15,840,667 13,791,033 Valuation reserve (15,840,667 ) (13,791,033 ) Net deferred tax asset $ — $ — |
Schedule of Effective Income Tax Rate Reconciliation | The following differences between the U.S. Federal statutory income tax rate and our effective tax rate are: September 30, 2016 September 30, 2015 Statutory U.S. tax rate 34.0 % 34.0 % State taxes, net of federal benefit 2.8 2.3 Amortization (0.4 ) 4.0 All others, net (2.9 ) 11.1 U.S. business credits 0.3 (3.6 ) Revaluation of warrants 0.9 (419.8 ) Contingent Convertible Notes/Warrant extensions (7.2 ) 33.0 Valuation allowance (27.5 ) 339.0 Effective Tax Rate — % — % |
Summary of Significant Accoun33
Summary of Significant Accounting Policies (Details Narrative) | Sep. 14, 2016USD ($) | Jan. 08, 2016USD ($)$ / sharesshares | Dec. 31, 2015USD ($) | Oct. 31, 2015USD ($)shares | Oct. 21, 2015USD ($)shares | Sep. 30, 2016USD ($)vehicleshares | Sep. 30, 2016USD ($)vehicle$ / sharesshares | Sep. 30, 2015USD ($)$ / sharesshares | May 13, 2016shares | Sep. 30, 2014USD ($) |
Proceeds from sale of series convertible preferred stock, net of fees | $ 2,127,834 | |||||||||
Common stock, shares authorized | shares | 200,000,000 | 350,000,000 | 350,000,000 | 150,000,000 | 350,000,000 | |||||
Debt interest rate percentage | 6.00% | 6.00% | ||||||||
Debt conversion, converted value | $ 1,556,687 | |||||||||
Approvals, granted by environmental protection agency | vehicle | 497 | 497 | ||||||||
Vehicles on the road, class 8 | vehicle | 3,000,000 | 3,000,000 | ||||||||
Utilities operating, dual fuel conversion system, percentage of diesel fuel used | 1 | 1 | ||||||||
Utilities operating, dual fuel conversion system, percentage reduction of fuel consumption, potential | 0.75 | 0.75 | ||||||||
Working capital deficit | $ 1,130,201 | $ 1,130,201 | ||||||||
Cash and cash equivalents | 211,201 | 211,201 | $ 67,162 | $ 126,420 | ||||||
Certificates of deposit, restricted | 309,984 | |||||||||
Inventory valuation allowance | 279,580 | 279,580 | 193,637 | |||||||
Advertising costs | 106,780 | 127,558 | ||||||||
Stock compensation expense | 160,244 | 46,826 | ||||||||
Unamortized compensation expense | $ 296,800 | |||||||||
Weighted average remaining amortizable life | 4 years 3 months | |||||||||
Capitalized of development costs | $ 4,609,222 | $ 4,609,222 | ||||||||
Amortization of software development costs | $ 728,948 | $ 607,942 | ||||||||
Basic and diluted net (loss) income per share | $ / shares | $ (0.13) | $ 0.01 | ||||||||
Antidilutive securities excluded from computation of earnings per share, amount | shares | 58,317,346 | |||||||||
Number of shares issuable upon conversion of preferred stock | shares | 28,444,452 | |||||||||
2016 Stock Option Plan [Member] | ||||||||||
Fair value assumptions, expected dividend yield | 0.00% | |||||||||
Fair value assumptions, risk free interest rate | 1.50% | |||||||||
Fair value assumptions, expected volatility rate | 72.00% | |||||||||
Fair value assumptions, expected term | 5 years | |||||||||
2005 Stock Option Plan [Member] | ||||||||||
Fair value assumptions, expected dividend yield | 0.00% | 0.00% | ||||||||
Fair value assumptions, risk free interest rate | 2.00% | 2.00% | ||||||||
Fair value assumptions, expected volatility rate | 56.00% | 56.00% | ||||||||
Fair value assumptions, expected term | 5 years | 10 years | ||||||||
January 2017 [Member] | ||||||||||
Approvals, granted during the period by environmental protection agency | vehicle | 503 | |||||||||
Approvals, granted by environmental protection agency | vehicle | 47 | 47 | ||||||||
Vehicles on the road, class 8 | vehicle | 2,000,000 | 2,000,000 | ||||||||
Vehicle engine and fuel description | Volvo/Mack D-13/MP8 (2010-2013), Cummins ISX (2010-2012) and Detroit Diesel DD15 (2010-2012) engine models for the heavy-duty diesel engine families ranging from 375HP to 600HP. | |||||||||
Private Placement [Member] | ||||||||||
Debt interest rate percentage | 10.00% | 10.00% | ||||||||
Debt conversion, converted value | $ 1,498,000 | |||||||||
Number of common stock units issued | shares | 1 | |||||||||
Warrant to purchase share of common stock | shares | 1 | 1 | ||||||||
Two Directors And Existing Shareholder [Member] | December 2016 [Member] | ||||||||||
Line of credit facility | $ 3,000,000 | $ 3,000,000 | ||||||||
WPU Leasing LLC [Member] | ||||||||||
Debt interest rate percentage | 22.20% | |||||||||
Debt payment | $ 21,821 | $ 21,821 | ||||||||
Trident Resources, LLC [Member] | ||||||||||
Debt interest rate percentage | 6.00% | 6.00% | 6.00% | |||||||
Debt payment | $ 40,312 | $ 40,312 | ||||||||
Term of loan | 48 months | 48 months | ||||||||
Recognized of finite-lived intangibles | $ 300,000 | $ 300,000 | ||||||||
Estimated useful life of intangible assets | 120 months | |||||||||
Amortization of intangible assets | $ 30,000 | $ 5,000 | ||||||||
Finite-lived intangible assets, accumulated amortization | 35,000 | 35,000 | 5,000 | |||||||
American Power Group Acquisition and License Agreement [Member] | ||||||||||
Recognized of finite-lived intangibles | 500,000 | $ 500,000 | ||||||||
Estimated useful life of intangible assets | 120 months | |||||||||
Amortization of intangible assets | $ 100,000 | 100,000 | ||||||||
Finite-lived intangible assets, accumulated amortization | 716,667 | 716,667 | 616,667 | |||||||
Payment to purchase of dual fuel conversion technology | $ 500,000 | |||||||||
OUL Engine Category [Member] | ||||||||||
Estimated useful life of intangible assets | 60 months | |||||||||
Capitalized of development costs | 1,927,433 | $ 1,927,433 | ||||||||
IUL Engine Category [Member] | ||||||||||
Estimated useful life of intangible assets | 84 months | |||||||||
Capitalized of development costs | 2,681,789 | $ 2,681,789 | ||||||||
Short Term 10% Promissory Notes [Member] | Two Directors [Member] | ||||||||||
Promissory note | 840,000 | 840,000 | ||||||||
10% Convertible Promissory Notes [Member] | January 31 2017 [Member] | ||||||||||
Promissory note | $ 2,380,000 | $ 2,380,000 | ||||||||
Debt interest rate percentage | 10.00% | 10.00% | ||||||||
Series E 12.5% Convertible Preferred Stock [Member] | December 2016 [Member] | ||||||||||
Debt interest rate percentage | 12.50% | 12.50% | ||||||||
Deferment of WPU Leasing Payments and Cash Dividend Payments [Member] | ||||||||||
Debt payment | $ 1,800,000 | |||||||||
Cash outflow for lease | $ 760,000 | 760,000 | ||||||||
Common stock value issue | $ 1,243,554 | $ 547,000 | ||||||||
Common stock dividend, percentage | 96.00% | 49.00% | ||||||||
New Iowa State Bank Credit Facility [Member] | ||||||||||
Debt interest rate percentage | 4.00% | 4.00% | ||||||||
Term of loan | 3 years | |||||||||
Line of credit availability | $ 355,000 | $ 355,000 | ||||||||
New Iowa State Bank Credit Facility [Member] | New York Prime Rate [Member] | ||||||||||
Debt interest rate percentage | 5.00% | 5.00% | ||||||||
July 2016 Private Placement of Common Stock and Warrants [Member] | ||||||||||
Debt conversion, converted value | $ 1,498,000 | |||||||||
Number of common stock units issued | shares | 1 | |||||||||
Warrant to purchase share of common stock | shares | 1 | 1 | ||||||||
Weighted average volume period | 20 days | |||||||||
Series D Convertible Preferred Stock Private Placement [Member] | ||||||||||
Proceeds from sale of series convertible preferred stock, net of fees | $ 2,200,000 | |||||||||
Number of warrants to purchase, shares | shares | 44,000,000 | |||||||||
Exercise price per share | $ / shares | $ 0.10 | |||||||||
Debt conversion, converted value | $ 2,200,000 | |||||||||
Number of common stock units issued | shares | 1 | |||||||||
Warrant to purchase share of common stock | shares | 1 | |||||||||
Amendment of Trident Promissory Note [Member] | ||||||||||
Promissory note | $ 1,716,000 | |||||||||
Debt payment | $ 1,400,000 | |||||||||
Number of gallons of saleable product description | 200,000 gallons of saleable product on a monthly basis | |||||||||
Amendment of Trident Promissory Note [Member] | 2017 operating plan [Member] | ||||||||||
Debt payment | $ 200,000 | |||||||||
10 % Convertible Preferred Stock [Member] | ||||||||||
Basic and diluted net (loss) income per share | $ / shares | $ 0.13 | $ 0.01 | ||||||||
Option [Member] | ||||||||||
Antidilutive securities excluded from computation of earnings per share, amount | shares | 38,600,194 | |||||||||
Warrant [Member] | ||||||||||
Antidilutive securities excluded from computation of earnings per share, amount | shares | 38,600,194 | |||||||||
Minimum [Member] | ||||||||||
Common stock, shares authorized | shares | 200,000,000 | 150,000,000 | 150,000,000 | 150,000,000 | ||||||
Average displacement percentage | 40.00% | 40.00% | ||||||||
Operating costs percentage | 5.00% | 5.00% | ||||||||
Minimum [Member] | January 2017 [Member] | ||||||||||
Vehicles on the road, class 8 | vehicle | 600,000 | 600,000 | ||||||||
Minimum [Member] | WPU Leasing LLC [Member] | December 1, 2016 [Member] | ||||||||||
Debt interest rate percentage | 15.00% | 15.00% | ||||||||
Minimum [Member] | Series E 12.5% Convertible Preferred Stock [Member] | ||||||||||
Common stock, shares authorized | shares | 350,000,000 | 350,000,000 | ||||||||
Minimum [Member] | Deferment of WPU Leasing Payments and Cash Dividend Payments [Member] | ||||||||||
Debt interest rate percentage | 15.00% | 15.00% | ||||||||
Maximum [Member] | ||||||||||
Number of warrants to purchase, shares | shares | 22,000,000 | |||||||||
Common stock, shares authorized | shares | 350,000,000 | 200,000,000 | 200,000,000 | 200,000,000 | ||||||
Average displacement percentage | 65.00% | 65.00% | ||||||||
Operating costs percentage | 15.00% | 15.00% | ||||||||
Maximum [Member] | January 2017 [Member] | ||||||||||
Vehicles on the road, class 8 | vehicle | 700,000 | 700,000 | ||||||||
Maximum [Member] | WPU Leasing LLC [Member] | December 1, 2016 [Member] | ||||||||||
Debt interest rate percentage | 22.20% | 22.20% | ||||||||
Maximum [Member] | Series E 12.5% Convertible Preferred Stock [Member] | ||||||||||
Common stock, shares authorized | shares | 600,000,000 | 600,000,000 | ||||||||
Maximum [Member] | Deferment of WPU Leasing Payments and Cash Dividend Payments [Member] | ||||||||||
Debt interest rate percentage | 22.20% | 22.20% | ||||||||
2016 Stock Option Plan [Member] | Minimum [Member] | ||||||||||
Common stock, shares authorized | shares | 200,000,000 | |||||||||
2016 Stock Option Plan [Member] | Maximum [Member] | ||||||||||
Common stock, shares authorized | shares | 350,000,000 | |||||||||
Term Loan Agreement [Member] | ||||||||||
Line of credit facility | $ 2,835,000 | |||||||||
Debt payment | 30,659 | |||||||||
Working capital deficit | $ 500,000 | |||||||||
Line of credit interest rate | 4.00% | |||||||||
Term Loan Agreement [Member] | Iowa State Bank [Member] | ||||||||||
Promissory note | $ 3,000,000 | |||||||||
Line of credit | 2,835,000 | |||||||||
Line of credit facility | 500,000 | |||||||||
Debt payment | $ 1,750,000 | |||||||||
Line of credit interest rate | 4.00% | |||||||||
Loan Agreement [Member] | New Iowa State Bank Credit Facility [Member] | ||||||||||
Promissory note | $ 3,000,000 | $ 3,000,000 | ||||||||
Line of credit | 500,000 | 500,000 | ||||||||
Line of credit facility | $ 2,835,000 | $ 2,835,000 | ||||||||
Term of loan | 10 years | |||||||||
Line of credit interest rate | 8.00% | |||||||||
Loan Agreement [Member] | Minimum [Member] | New Iowa State Bank Credit Facility [Member] | ||||||||||
Line of credit interest rate | 4.00% | |||||||||
Board of Directors [Member] | WPU Leasing LLC [Member] | ||||||||||
Debt payment | $ 1,800,000 | |||||||||
Series D Convertible Preferred Stock [Member] | ||||||||||
Proceeds from sale of series convertible preferred stock, net of fees | $ 2,200,000 | |||||||||
Number of warrants to purchase, shares | shares | 44,000,000 | |||||||||
Number of shares issuable upon conversion of preferred stock | shares | 100,000 | 22,000,000 | 22,000,000 | |||||||
Series D Convertible Preferred Stock [Member] | Board of Directors [Member] | ||||||||||
Sale of stock, number of shares issued | shares | 22 | |||||||||
Proceeds from sale of series convertible preferred stock, net of fees | $ 2,200,000 | |||||||||
Warrant [Member] | Board of Directors [Member] | ||||||||||
Number of warrants to purchase, shares | shares | 44,000,000 | |||||||||
Exercise price per share | $ / shares | $ 0.10 | |||||||||
Series E Convertible Preferred Stock [Member] | 10% Contingent Convertible Promissory Notes [Member] | December 2016 [Member] | ||||||||||
Line of credit facility | $ 3,000,000 | $ 3,000,000 | ||||||||
Series E Convertible Preferred Stock [Member] | 10% Contingent Convertible Promissory Notes [Member] | January 2017 [Member] | ||||||||||
Promissory note | $ 2,380,000 | $ 2,380,000 | ||||||||
Debt interest rate percentage | 10.00% | 10.00% | ||||||||
Series C Convertible Preferred Stock [Member] | ||||||||||
Number of warrants to purchase, shares | shares | 12,850,000 | |||||||||
Promissory note | $ 2,475,000 | |||||||||
Debt interest rate percentage | 10.00% | 10.00% | ||||||||
Debt conversion, converted value | $ 2,475,000 | |||||||||
Number of shares issuable upon conversion of preferred stock | shares | 50,000 | |||||||||
Debt conversion shares issued | shares | 12,850,000 | 257 |
Summary of Significant Accoun34
Summary of Significant Accounting Policies - Schedule of Inventory (Details) - USD ($) | Sep. 30, 2016 | Sep. 30, 2015 |
Accounting Policies [Abstract] | ||
Raw materials, net of valuation allowance | $ 507,035 | $ 514,041 |
Work in progress | 25,784 | |
Finished goods | 1,210 | 1,169 |
Total inventory | $ 508,245 | $ 540,994 |
Summary of Significant Accoun35
Summary of Significant Accounting Policies - Schedule of Intangible Assets of Future Amortization Expenses (Details) | Sep. 30, 2016USD ($) |
Acquired Finite-Lived Intangible Assets [Line Items] | |
2,017 | $ 867,401 |
2,018 | 695,418 |
2,019 | 500,351 |
2,020 | 365,037 |
2,021 | 347,797 |
2022 and thereafter | 275,432 |
Total | 3,051,436 |
Contracts [Member] | NGL Services [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
2,017 | 30,000 |
2,018 | 30,000 |
2,019 | 30,000 |
2,020 | 30,000 |
2,021 | 30,000 |
2022 and thereafter | 115,000 |
Total | 265,000 |
Dual Fuel Contracts [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
2,017 | 50,000 |
2,018 | 50,000 |
2,019 | 41,667 |
2,020 | |
2,021 | |
2022 and thereafter | |
Total | 141,667 |
Dual Fue Technology [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
2,017 | 50,000 |
2,018 | 50,000 |
2,019 | 41,667 |
2,020 | |
2,021 | |
2022 and thereafter | |
Total | 141,667 |
Dual Fuel Software Development [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
2,017 | 737,401 |
2,018 | 565,418 |
2,019 | 387,017 |
2,020 | 335,037 |
2,021 | 317,797 |
2022 and thereafter | 160,432 |
Total | $ 2,503,102 |
Summary of Significant Accoun36
Summary of Significant Accounting Policies - Schedule of Product Warranty Cost (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Accounting Policies [Abstract] | ||
Warranty accrual at the beginning of the period | $ 167,180 | $ 221,562 |
Charged to costs and expenses relating to new sales | 51,754 | 70,426 |
Costs of product warranty claims | (30,221) | (124,808) |
Warranty accrual at the end of period | $ 188,713 | $ 167,180 |
Property and Equipment - Summar
Property and Equipment - Summary of Property and Equipment (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Property, Plant and Equipment [Line Items] | ||
Less accumulated depreciation | $ (1,372,451) | $ (1,167,144) |
Property, plant and equipment, net | $ 3,790,365 | 3,739,053 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, Estimated Useful Lives | 5 years | |
Property, plant and equipment, gross | $ 127,087 | 127,087 |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 3,133,075 | 3,342,202 |
Machinery and Equipment [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, Estimated Useful Lives | 3 years | |
Machinery and Equipment [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, Estimated Useful Lives | 10 years | |
Construction in Progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 1,902,654 | $ 1,436,908 |
Note Receivable, Related Party
Note Receivable, Related Party (Details Narrative) - USD ($) | Dec. 02, 2015 | Jun. 30, 2015 | Oct. 31, 2015 | Sep. 30, 2016 | Sep. 30, 2015 |
Notes receivable related parties | $ 497,190 | $ 737,190 | |||
Promissory note, interest rate | 6.00% | ||||
Repayment of notes receivables | $ 50,000 | ||||
Accrued unpaid interest rate and late fees | $ 112,598 | ||||
Trident Resources [Member] | |||||
Repayment of notes receivables | $ 240,000 | ||||
Trident Resources [Member] | Cash [Member] | |||||
Repayment of notes receivables | 50,000 | ||||
Trident Resources [Member] | Equivalents [Member] | |||||
Repayment of notes receivables | $ 190,000 | ||||
Loan and Security Agreement [Member] | Trident Resources [Member] | |||||
Notes receivable related parties | $ 737,190 | ||||
Promissory note, interest rate | 6.00% | ||||
Debt instrument, maturity date | Sep. 30, 2015 | ||||
Debt instrument default payment description | we amended and restated the note to extend the maturity until December 31, 2015 and provide for certain additional penalties in the event of any default under such note, including a 5.0% penalty for late payment. |
Seller's Note Receivable, Rel39
Seller's Note Receivable, Related Party (Details Narrative) | 1 Months Ended | ||
Apr. 30, 2012Quarterly | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | |
Due from related parties | $ 797,387 | $ 797,387 | |
Promissory note, interest rate | 6.00% | ||
Convertible preferred stock, dividend rate | 10.00% | ||
Other Assets [Member] | |||
Accrued interest due | $ 192,967 | ||
M & R Development [Member] | |||
Percentage of royalties payable applied to outstanding principal and interest | 50.00% | ||
Number of quarterly payments | Quarterly | 8 | ||
Long term balance, percent | 100.00% | ||
July 2009 Acquisition [Member] | |||
Due from related parties | $ 797,387 | ||
Promissory note, interest rate | 5.50% |
Notes Payable_Credit Faciliti40
Notes Payable/Credit Facilities (Details Narrative) - USD ($) | Sep. 30, 2016 | Sep. 14, 2016 | Sep. 30, 2016 | Sep. 30, 2015 |
Loss on extinguishment of debt | $ (447,492) | |||
Debt instrument unamortized discount | $ (659,119) | (659,119) | (26,016) | |
Working capital deficit | 1,130,201 | 1,130,201 | ||
Line of credit | 165,000 | 165,000 | ||
Credit facility obliagtions, payment agreed | 1,750,000 | |||
Fair value of warrants issued | (186,323) | $ (5,774,178) | ||
Collateral [Member] | ||||
Line of credit | 335,000 | $ 335,000 | ||
Iowa State Bank [Member] | ||||
Debt instrument priority | our commitment to issue up to 2,000,000 shares of its common stock, par value $.01 per share, to Iowa State Bank in the event of a payment default | |||
Iowa State Bank [Member] | Board Member and Two Members [Member] | ||||
Debt instrument priority | a stock pledge of 500,000 shares of our Common Stock in aggregate, owned by a Board member and two members of the our management team. | |||
Term Loan Agreement [Member] | ||||
Term loan | $ 3,000,000 | |||
Working capital deficit | 500,000 | |||
Line of credit facility maximum borrowing capacity | $ 2,835,000 | |||
Monthly payments description | Under the terms of the new term loan we will make (i) 36 consecutive monthly | |||
Debt payment | $ 30,659 | |||
term loan interest rate | 4.00% | |||
Term Loan Agreement [Member] | Beginning on December 14, 2019 [Member] | Prime Rate [Member] | ||||
Monthly payments description | 84 consecutive monthly payments | |||
Debt payment | $ 30,659 | |||
term loan interest rate | 0.50% | |||
Principal and accrued interest final due date | Nov. 14, 2026 | |||
Credit Support Agreement [Member] | Guarantors [Member] | ||||
Warrant terms | 10 years | |||
Fair value of warrants issued | $ 1,324,682 | |||
Allocation of warrant value to line of credit | $ 181,084 | |||
Credit Support Agreement [Member] | Guarantors [Member] | Minimum [Member] | ||||
Number of warrants exercisable | 1,390,000 | |||
Credit Support Agreement [Member] | Guarantors [Member] | Maximum [Member] | ||||
Number of warrants exercisable | 5,560,000 | |||
Credit Support Agreement [Member] | Guarantors [Member] | Common Stock [Member] | ||||
Warrants issued for consideration | $ 6,950,000 | |||
Warrant exercise price | $ 0.20 | |||
Credit Facility [Member] | ||||
Loss on extinguishment of debt | $ 497,492 | |||
Interest expense | 718,161 | |||
Original debt issuance costs | 22,055 | 22,055 | ||
Warrants issued for consideration | $ 1,143,598 | |||
Dividend yield | 0.00% | |||
Risk-free interest rate | 1.20% | |||
Volatility | 73.00% | |||
Expected term | 5 years | |||
Debt instrument unamortized discount | $ 700,000 | $ 700,000 | ||
Iowa State Bank [Member] | Term Loan Agreement [Member] | ||||
term loan interest rate | 0.50% | |||
Principal and accrued interest final due date | Sep. 14, 2017 | |||
Iowa State Bank [Member] | Term Loan Agreement [Member] | Prime Rate [Member] | ||||
term loan interest rate | 4.00% | |||
Maximum borrowing capacity description | The maximum amount we may borrow from time to time under the line of credit remains equal to lesser of (i) the sum of 70% of our eligible accounts receivable, other than accounts receivable outstanding for more than 90 days, and 50% of the value of our inventory, or (ii) $500,000. |
Notes Payable_Credit Faciliti41
Notes Payable/Credit Facilities - Summary of Notes Payable (Details) - USD ($) | Sep. 30, 2016 | Sep. 30, 2015 |
Notes payable | $ 3,204,028 | $ 3,085,729 |
Less current portion | (104,925) | (854,682) |
Less unamortized discount and deferred financing fees, net of current | (659,119) | (26,016) |
Notes payable, non-current portion | 2,153,413 | 2,205,031 |
Iowa State Bank [Member] | Security Agreement, Business Loan Agreement [Member] | Due September 14, 2017 [Member] | ||
Notes payable | 165,000 | 500,000 |
Iowa State Bank [Member] | Security Agreement, Business Loan Agreement [Member] | November 14, 2026 [Member] | ||
Notes payable | 3,000,000 | 2,541,414 |
Iowa State Bank [Member] | Security Agreement, Business Loan Agreement [Member] | February 2017 to June 2017 [Member] | ||
Notes payable | $ 39,028 | $ 44,315 |
Notes Payable_Credit Faciliti42
Notes Payable/Credit Facilities - Summary of Notes Payable (Details) (Parenthetical) | 12 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Interest rate | 6.00% | |
Iowa State Bank [Member] | Security Agreement, Business Loan Agreement [Member] | Due September 14, 2017 [Member] | ||
Interest rate | 4.00% | 4.00% |
Debt instrument maturity date | Sep. 14, 2017 | Sep. 14, 2017 |
Iowa State Bank [Member] | Security Agreement, Business Loan Agreement [Member] | November 14, 2026 [Member] | ||
Interest rate | 4.00% | 4.00% |
Debt instrument maturity date | Nov. 14, 2026 | Nov. 14, 2026 |
Debt instrument due date description | 30,659 | 30,659 |
Iowa State Bank [Member] | Security Agreement, Business Loan Agreement [Member] | February 2017 to June 2017 [Member] | ||
Debt instrument due date description | from February 2017 to June 2017 | from February 2017 to June 2017 |
Iowa State Bank [Member] | Security Agreement, Business Loan Agreement [Member] | February 2017 to June 2017 [Member] | Minimum [Member] | ||
Interest rate | 3.54% | 3.54% |
Iowa State Bank [Member] | Security Agreement, Business Loan Agreement [Member] | February 2017 to June 2017 [Member] | Maximum [Member] | ||
Interest rate | 4.03% | 4.03% |
Notes Payable_Credit Faciliti43
Notes Payable/Credit Facilities - Schedule of Maturities of Notes Payable (Details) - USD ($) | Sep. 30, 2016 | Sep. 30, 2015 |
Debt Disclosure [Abstract] | ||
2,017 | $ 391,496 | |
2,018 | 258,639 | |
2,019 | 269,326 | |
2,020 | 280,208 | |
2021 and beyond | 2,004,359 | |
Long term notes payable | $ 3,204,028 | $ 3,085,729 |
Notes Payable, Related Partie44
Notes Payable, Related Parties (Details Narrative) | Jun. 30, 2016USD ($)$ / sharesshares | Dec. 02, 2015USD ($) | Oct. 31, 2015USD ($)shares | Oct. 21, 2015USD ($)$ / sharesshares | Aug. 12, 2015USD ($)processing_system | Sep. 30, 2016USD ($)$ / sharesshares | Jan. 31, 2016USD ($) | Sep. 30, 2016USD ($)$ / sharesshares | Sep. 30, 2015USD ($)shares | Oct. 09, 2015USD ($) | Aug. 24, 2015USD ($) | Dec. 31, 2010USD ($) |
Debt Instrument [Line Items] | ||||||||||||
Number of processing systems acquired | processing_system | 2 | |||||||||||
Payments to acquire processing system | $ 1,716,000 | $ 20,604 | $ 186,675 | |||||||||
Debt interest rate percentage | 6.00% | 6.00% | ||||||||||
Notes payable, related parties | $ 3,524,984 | $ 3,524,984 | $ 3,152,343 | |||||||||
Debt principal payment | $ 2,475,000 | |||||||||||
Accrued interest | 96,000 | |||||||||||
Common stock shares issued | shares | 75,055,296 | 75,055,296 | 55,287,349 | |||||||||
Debt conversion, converted instrument, amount | $ 1,556,687 | |||||||||||
Convertible notes payable, current | $ 2,475,000 | |||||||||||
Amount of allocable to the warrants | 906,874 | |||||||||||
Amount of allocable to the intrinsic value | 649,813 | |||||||||||
Warrant extension expense | $ 454,253 | |||||||||||
Private Placement [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt interest rate percentage | 10.00% | 10.00% | ||||||||||
Debt conversion, converted instrument, amount | $ 1,498,000 | |||||||||||
Convertible notes payable, current | $ 2,475,000 | $ 2,475,000 | ||||||||||
Series C Convertible Preferred Stock [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Promissory note | $ 2,475,000 | |||||||||||
Debt interest rate percentage | 10.00% | 10.00% | ||||||||||
Shares issued price per share | $ / shares | $ 0.20 | |||||||||||
Debt conversion, converted instrument, amount | $ 2,475,000 | |||||||||||
Conversion price | $ / shares | $ 10,000 | $ 10,000 | ||||||||||
Number of shares converted | shares | 12,850,000 | 257 | ||||||||||
WPU Leasing LLC [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt interest rate percentage | 22.20% | |||||||||||
Notes payable, related parties | $ 1,758,484 | $ 1,758,484 | $ 1,385,843 | |||||||||
Debt instrument, maturity date | Aug. 31, 2019 | Aug. 31, 2019 | ||||||||||
WPU Leasing LLC [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt principal payment | $ 1,800,000 | $ 1,800,000 | ||||||||||
WPU Leasing LLC [Member] | Series E Warrant [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt interest rate percentage | 7.20% | 7.20% | ||||||||||
Officer [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Unsecured promisory note | $ 50,000 | $ 50,000 | $ 50,000 | |||||||||
Debt instrument, maturity date | Sep. 30, 2017 | |||||||||||
January 10, 2017 [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt principal payment | $ 0 | $ 0 | ||||||||||
December 1, 2016 [Member] | WPU Leasing LLC [Member] | Maximum [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt interest rate percentage | 22.20% | 22.20% | ||||||||||
December 1, 2016 [Member] | WPU Leasing LLC [Member] | Minimum [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt interest rate percentage | 15.00% | 15.00% | ||||||||||
Secured Debt [Member] | Secured Financing Agreement [Member] | WPU Leasing LLC [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Promissory note | $ 3,250,000 | |||||||||||
Debt interest rate percentage | 22.20% | |||||||||||
Notes payable, related parties | $ 500,000 | |||||||||||
Debt principal payment | $ 0 | |||||||||||
Accrued interest | $ 238,953 | $ 238,953 | ||||||||||
Debt instrument, percentage of debt outstanding on which cash payment is deferred | 70.00% | |||||||||||
Long term debt | $ 1,900,000 | |||||||||||
Decrease in cah flow commitment | $ 500,000 | |||||||||||
Common stock shares issued | shares | 1,209,857 | |||||||||||
Shares issued price per share | $ / shares | $ 0.14 | |||||||||||
Debt conversion, converted instrument, amount | $ 169,379 | |||||||||||
Deferred financing costs | $ 86,923 | $ 86,923 | ||||||||||
Secured Debt [Member] | Secured Financing Agreement [Member] | WPU Leasing LLC [Member] | Common Stock [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Number of warrants issued | shares | 3,250,000 | |||||||||||
Secured Debt [Member] | Secured Financing Agreement [Member] | WPU Leasing LLC [Member] | Warrant [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Number of warrants issued | shares | 1,325,000 | |||||||||||
Exercise price per share | $ / shares | $ 0.20 | $ 0.20 | ||||||||||
Class of warrant or right, exercise period | 4 years | |||||||||||
Secured Debt [Member] | Secured Financing Agreement 1 [Member] | WPU Leasing LLC [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Promissory note | $ 1,400,000 | |||||||||||
Trident Secured Promissory Note [Member] | Secured Debt [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt interest rate percentage | 6.00% | |||||||||||
Trident Secured Promissory Note 1 [Member] | Secured Debt [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Promissory note | $ 832,000 | |||||||||||
Debt interest rate percentage | 6.75% | |||||||||||
Term of loan | 12 months | |||||||||||
Trident Secured Promissory Note 2 [Member] | Secured Debt [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Promissory note | $ 884,500 | |||||||||||
Debt interest rate percentage | 6.00% | |||||||||||
Term of loan | 36 months | |||||||||||
Trident Secured Promissory Note Commencing February 2016 [Member] | Secured Debt [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Promissory note | $ 1,716,500 | |||||||||||
Debt interest rate percentage | 6.00% | |||||||||||
Term of loan | 48 months | |||||||||||
Accrued interest | $ 120,345 | $ 120,345 |
Notes Payable, Related Partie45
Notes Payable, Related Parties - Summary of Notes Payable - Related Parties (Details) - USD ($) | Sep. 30, 2016 | Sep. 30, 2015 |
Notes Payable, Related Parties | $ 3,524,984 | $ 3,152,343 |
Less current portion | (744,614) | (386,083) |
Less deferred financing fees | (39,002) | (39,002) |
Notes payable, related parties non-current portion | 2,741,368 | 2,727,258 |
Trident Resources, LLC [Member] | ||
Notes Payable, Related Parties | 1,716,500 | 1,716,500 |
WPU Leasing LLC [Member] | ||
Notes Payable, Related Parties | 1,758,484 | 1,385,843 |
Officer's Promissory Note [Member] | ||
Notes Payable, Related Parties | $ 50,000 | $ 50,000 |
Notes Payable, Related Partie46
Notes Payable, Related Parties - Summary of Notes Payable - Related Parties (Details) (Parenthetical) - USD ($) | 12 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Debt interest rate percentage | 6.00% | |
Trident Resources, LLC [Member] | ||
Debt interest rate percentage | 6.00% | 6.00% |
Term of loan | 48 months | 48 months |
Debt monthly payments | $ 40,312 | $ 40,312 |
Debt instrument due date | Jan. 31, 2020 | Jan. 31, 2020 |
WPU Leasing LLC [Member] | ||
Debt interest rate percentage | 22.20% | |
Debt monthly payments | $ 21,821 | $ 21,821 |
Debt instrument due date | Aug. 31, 2019 | Aug. 31, 2019 |
Officer's Promissory Note [Member] | ||
Debt interest rate percentage | 10.00% | 10.00% |
Debt instrument due date | Sep. 30, 2017 | Sep. 30, 2017 |
Notes Payable, Related Partie47
Notes Payable, Related Parties - Schedule of Maturities of Carrying Values of Notes Payable - Related Parties (Details) | Sep. 30, 2016USD ($) |
2,017 | $ 391,496 |
2,018 | 258,639 |
2,019 | 269,326 |
2,020 | 280,208 |
2021 and beyond | 2,004,359 |
Notes Payable Related Party [Member] | |
2,017 | 744,614 |
2,018 | 926,660 |
2,019 | 1,036,215 |
2,020 | 463,592 |
2021 and beyond | 353,903 |
Total | $ 3,524,984 |
Commitments and Contingencies48
Commitments and Contingencies (Details Narrative) | Apr. 02, 2016shares | Aug. 12, 2015USD ($)shares | Mar. 31, 2016USD ($) | Sep. 30, 2015USD ($) | Apr. 30, 2014USD ($) | Apr. 30, 2012USD ($) | Sep. 30, 2016USD ($)ft² | Sep. 30, 2015USD ($) | Apr. 02, 2017 |
Operating Leased Assets [Line Items] | |||||||||
Annual rental expense | $ 15,000 | $ 15,000 | |||||||
Maximum obligation | P36M | ||||||||
Other income | $ 90,000 | ||||||||
Cumulative royalties | $ 36,000,000 | $ 36,000,000 | |||||||
License fee | 0 | 0 | |||||||
Number of common stock shares issued | shares | 2,000,000 | ||||||||
Number of common stock shares issued, value | $ 300,000 | 2,569,515 | |||||||
Royalty | 0 | 0 | |||||||
Related Party [Member] | |||||||||
Operating Leased Assets [Line Items] | |||||||||
Monthly rent expense | $ 142,575 | 144,934 | |||||||
Lynnfield, Massachusetts [Member] | |||||||||
Operating Leased Assets [Line Items] | |||||||||
Area of land | ft² | 1,100 | ||||||||
Monthly rent expense | $ 1,250 | ||||||||
M&R Development [Member] | |||||||||
Operating Leased Assets [Line Items] | |||||||||
Monthly rent expense | $ 10,260 | ||||||||
M&R Development [Member] | License Agreement [Member] | |||||||||
Operating Leased Assets [Line Items] | |||||||||
Monthly payment | $ 17,500,000 | ||||||||
Monthly royalty percentage | 10.00% | ||||||||
Cumulative royalties | $ 15,000,000 | ||||||||
Percentage of earnings before interest, taxes, depreciation and amortization | 30.00% | ||||||||
Georgia Property [Member] | |||||||||
Operating Leased Assets [Line Items] | |||||||||
Monthly rent expense | $ 15,152 | $ 141,532 | 248,233 | ||||||
Termination period | 6 months | ||||||||
Number of years after vacating the property | 3 years | ||||||||
Lease settlement obligation | $ 574,058 | ||||||||
Maximum obligation | P36M | ||||||||
Monthly payment | $ 7,500 | 8,000 | |||||||
Reduction in rent expense | $ 2,500 | ||||||||
Rental income | $ 96,000 | 90,500 | |||||||
Common Stock [Member] | |||||||||
Operating Leased Assets [Line Items] | |||||||||
Number of common stock shares issued, value | |||||||||
Chairman [Member] | |||||||||
Operating Leased Assets [Line Items] | |||||||||
Reduction in cash salary, percentage | 50.00% | ||||||||
Chairman [Member] | Common Stock [Member] | |||||||||
Operating Leased Assets [Line Items] | |||||||||
Number of unregistered shares of common stock | shares | 355,258 | ||||||||
Term of common stock shares granted | 10 years | ||||||||
Chairman [Member] | Common Stock [Member] | Share-based Compensation Award, Tranche One [Member] | |||||||||
Operating Leased Assets [Line Items] | |||||||||
Granted stock option to purchase shares of common stock | shares | 850,000 | ||||||||
Number of options to purchase shares of common stock | shares | 250,000 | ||||||||
Chairman [Member] | Common Stock [Member] | Share-based Compensation Award, Tranche Two [Member] | |||||||||
Operating Leased Assets [Line Items] | |||||||||
Number of options to purchase shares of common stock | shares | 600,000 | ||||||||
Trident Resources, LLC [Member] | License Agreement [Member] | |||||||||
Operating Leased Assets [Line Items] | |||||||||
Cumulative royalties | $ 15,000,000 | ||||||||
Number of common stock shares issued | shares | 2,000,000 | ||||||||
Number of common stock shares issued, value | $ 300,000 | ||||||||
Estimated useful life | 120 months | ||||||||
Annual pre tax net income percentage | 5.10% | ||||||||
Trident Resources, LLC [Member] | License Agreement [Member] | NGL Division[Member] | |||||||||
Operating Leased Assets [Line Items] | |||||||||
Annual pre tax net income percentage | 3.00% |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Future Minimum Rental Commitment (Details) | Sep. 30, 2016USD ($) |
2,017 | $ 181,704 |
2,018 | 181,704 |
2,019 | 29,800 |
Total future minimum rental obligations | 393,208 |
Related Party [Member] | |
2,017 | $ 71,820 |
Warrants to Purchase Common S50
Warrants to Purchase Common Stock (Details Narrative) - USD ($) | Sep. 30, 2016 | Aug. 12, 2015 | Mar. 31, 2013 | Dec. 31, 2012 | Apr. 30, 2012 | Apr. 30, 2012 | Sep. 30, 2016 | Sep. 30, 2015 |
Class of Warrant or Right [Line Items] | ||||||||
Preferred stock dividend rate percentage | 10.00% | |||||||
Revaluation of warrants | $ 186,323 | $ 5,774,178 | ||||||
Warrant liability | $ 37,285 | $ 37,285 | $ 223,608 | |||||
Number of shares sold | 2,000,000 | |||||||
Warrants outstanding | 3,600,000 | 3,600,000 | ||||||
10% Convertible Preferred Stock [Member] | ||||||||
Class of Warrant or Right [Line Items] | ||||||||
Preferred stock dividend rate percentage | 69.00% | 10.00% | ||||||
10% Convertible Preferred Stock [Member] | Private Placement 1 [Member] | ||||||||
Class of Warrant or Right [Line Items] | ||||||||
Preferred stock dividend rate percentage | 10.00% | |||||||
Number of shares sold | 821.6 | |||||||
10% Convertible Preferred Stock [Member] | Private Placement 2 [Member] | ||||||||
Class of Warrant or Right [Line Items] | ||||||||
Preferred stock dividend rate percentage | 10.00% | |||||||
Number of shares sold | 274 |
Warrants to Purchase Common S51
Warrants to Purchase Common Stock - Assumptions Used For Valuation of Warrant Liabilities (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Class of Warrant or Right [Line Items] | ||
Warrants outstanding | 3,600,000 | |
Private Placement 1 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Closing price per share of common stock | $ 0.17 | $ 0.29 |
Exercise price per share | $ 0.50 | $ 0.50 |
Expected volatility | 73.00% | 64.00% |
Risk-free interest rate | 0.60% | 0.60% |
Dividend yield | 0.00% | 0.00% |
Remaining expected term of underlying securities | 1 year | 2 years |
Warrants outstanding | 17,623,387 | 17,623,387 |
Warrants outstanding with down-round provision | $ 2,742,763 | $ 2,742,763 |
Private Placement 2 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Closing price per share of common stock | $ 0.17 | $ 0.29 |
Exercise price per share | $ 0.50 | $ 0.50 |
Expected volatility | 73.00% | 64.00% |
Risk-free interest rate | 0.80% | 0.01% |
Dividend yield | 0.00% | 0.00% |
Remaining expected term of underlying securities | 2 years | 3 years |
Warrants outstanding | 6,032,787 | 6,032,787 |
Warrants outstanding with down-round provision | $ 905,917 | $ 905,917 |
Fair Value Measurements (Detail
Fair Value Measurements (Details Narrative) - USD ($) | Sep. 30, 2016 | Sep. 14, 2016 |
Debt interest rate percentage | 6.00% | |
Fair value of debt | $ 2,281,839 | |
Debt instrument discount rate | 10.00% | |
Lowa State Bank [Member] | Maximum [Member] | ||
Debt interest rate percentage | 8.00% | |
Lowa State Bank [Member] | Minimum [Member] | ||
Debt interest rate percentage | 4.00% | |
Private Placement [Member] | ||
Percentage of warrant related to convertible preferred stock | 10.00% | |
Debt interest rate percentage | 10.00% |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Financial Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) | Sep. 30, 2016 | Sep. 30, 2015 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Warrant liability | $ 37,285 | $ 223,608 |
Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Warrant liability | ||
Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Warrant liability | ||
Significant Other Observable Inputs (Level 3) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Warrant liability | $ 37,285 | $ 223,608 |
Fair Value Measurements - Sum54
Fair Value Measurements - Summary of Changes in Fair Value of Financial Liabilities Measured at Fair Value (Details) - Warrant Liability [Member] - Fair Value, Inputs, Level 3 [Member] | 12 Months Ended |
Sep. 30, 2016USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Fair value, liabilities measured on recurring basis, beginning balance | $ 223,608 |
Revaluation of warrants recognized in earnings | (186,323) |
Fair value, liabilities measured on recurring basis, ending balance | $ 37,285 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) | Sep. 30, 2016 | Jan. 08, 2016 | Nov. 30, 2015 | Oct. 31, 2015 | Oct. 21, 2015 | Aug. 12, 2015 | Dec. 31, 2012 | Apr. 30, 2012 | Apr. 30, 2012 | Jan. 31, 2016 | Apr. 30, 2012 | Sep. 30, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | May 13, 2016 | Mar. 31, 2016 |
Common stock, shares authorized | 350,000,000 | 200,000,000 | 350,000,000 | 350,000,000 | 150,000,000 | 350,000,000 | 350,000,000 | 150,000,000 | 350,000,000 | ||||||||||
Number of common stock shares issued | 2,000,000 | ||||||||||||||||||
Number of common stock shares issued, value | $ 300,000 | $ 2,569,515 | |||||||||||||||||
Number of common stock issued for services | $ 46,527 | 18,049 | |||||||||||||||||
Weighted average remaining amortizable life | 4 years 3 months | ||||||||||||||||||
Net cash used in investing activities | $ (68,111) | (2,615,759) | |||||||||||||||||
Debt conversion, converted value | $ 1,556,687 | ||||||||||||||||||
Debt interest rate percentage | 6.00% | 6.00% | 6.00% | 6.00% | 6.00% | ||||||||||||||
Preferred stock dividend rate percentage | 10.00% | ||||||||||||||||||
Proceeds from sale of series convertible preferred stock, net of fees | $ 2,127,834 | ||||||||||||||||||
Convertible preferred stock, shares issued upon conversion | 28,444,452 | 28,444,452 | |||||||||||||||||
Convertible preferred stock outstanding | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||
Type of stock converted | Convertible Preferred Stock were converted into 91,667 shares of Common Stock | ||||||||||||||||||
Preferred stock, shares outstanding | 91,667 | ||||||||||||||||||
Fair value adjustment of warrant | $ (186,323) | $ (5,774,178) | |||||||||||||||||
Debt instrument, convertible, beneficial conversion feature | $ 1,550,924 | ||||||||||||||||||
Preferred stock dividends | $ 160,936 | ||||||||||||||||||
Preferred stock dividends paid | $ (578,541) | ||||||||||||||||||
Class of warrants | 3,600,000 | 3,600,000 | 3,600,000 | 3,600,000 | 3,600,000 | ||||||||||||||
IowaStateBank [Member] | |||||||||||||||||||
Class of warrants | 13,900,000 | 13,900,000 | 13,900,000 | 13,900,000 | 13,900,000 | ||||||||||||||
2005 Stock Option Plan [Member] | |||||||||||||||||||
Common stock price per share | $ 0.25 | $ 0.25 | $ 0.25 | $ 0.25 | $ 0.25 | ||||||||||||||
2016 Stock Option Plan [Member] | |||||||||||||||||||
Common stock, shares authorized | 21,000,000 | ||||||||||||||||||
Stock option granted | 302,095 | ||||||||||||||||||
Dividend yield | 0.00% | ||||||||||||||||||
Expected volatility | 70.00% | ||||||||||||||||||
Expected term | 5 years | ||||||||||||||||||
Private Placement [Member] | |||||||||||||||||||
Debt conversion, converted value | $ 1,498,000 | ||||||||||||||||||
Debt interest rate percentage | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | ||||||||||||||
Class of warrants | 9,400,000 | 9,400,000 | 9,400,000 | 9,400,000 | 9,400,000 | ||||||||||||||
Existing Option [Member] | 2005 Stock Option Plan [Member] | |||||||||||||||||||
Option granted | $ 18,500,000 | ||||||||||||||||||
Stock option plan expenses | 241,132 | ||||||||||||||||||
New Option [Member] | 2005 Stock Option Plan [Member] | |||||||||||||||||||
Stock option plan expenses | $ 61,970 | ||||||||||||||||||
10 % Convertible Preferred Stock [Member] | |||||||||||||||||||
Preferred units, issued | 822 | 822 | 822 | ||||||||||||||||
Proceeds from issuance of private placement | $ 8,216,000 | ||||||||||||||||||
WPU Leasing [Member] | |||||||||||||||||||
Class of warrants | 1,900,000 | 1,900,000 | 1,900,000 | 1,900,000 | 1,900,000 | ||||||||||||||
Wheel Time Network [Member] | |||||||||||||||||||
Class of warrants | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | ||||||||||||||
Private Placement of Common Stock and Warrants [Member] | |||||||||||||||||||
Number of common stock shares issued, value | $ 1,498,000 | ||||||||||||||||||
Weighted average remaining amortizable life | 20 days | ||||||||||||||||||
Private Placement of Common Stock and Warrants [Member] | Investor [Member] | |||||||||||||||||||
Net cash used in investing activities | $ 753,507 | ||||||||||||||||||
Debt conversion, converted value | 744,911 | ||||||||||||||||||
Interest payable, current | $ 4,911 | $ 4,911 | $ 4,911 | $ 4,911 | $ 4,911 | ||||||||||||||
Debt interest rate percentage | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | ||||||||||||||
Investors [Member] | |||||||||||||||||||
Fair value adjustment of warrant | $ 1,087,333 | ||||||||||||||||||
Investors [Member] | 10 % Convertible Preferred Stock [Member] | |||||||||||||||||||
Exercise price per share | $ 0.50 | $ 0.50 | $ 0.50 | ||||||||||||||||
Preferred units, issued | 274 | 274 | 274 | ||||||||||||||||
Proceeds from issuance of private placement | $ 2,700,000 | ||||||||||||||||||
Purchase price of units | $ 10,000 | $ 10,000 | $ 10,000 | ||||||||||||||||
Number of shares of common stock per warrant for units purchased | 25,000 | 25,000 | 25,000 | ||||||||||||||||
Preferred stock conversion basis | consisted of one share of 10% Convertible Preferred Stock convertible, at any time at the option of the holder, into 25,000 shares of Common Stock at a conversion price of $0.40 per share | ||||||||||||||||||
Common stock conversion price | $ 0.40 | ||||||||||||||||||
Number of warrants to purchase shares of common stock | 1 | ||||||||||||||||||
Preferred stock dividend rate percentage | 10.00% | ||||||||||||||||||
Director [Member] | |||||||||||||||||||
Option to purchase common stock | 340,000 | ||||||||||||||||||
Share based compensation | $ 15,793 | ||||||||||||||||||
Director [Member] | 2005 Stock Option Plan [Member] | |||||||||||||||||||
Stock option granted | 250,000 | ||||||||||||||||||
Stock option term | 10 years | ||||||||||||||||||
Stock option vesting period | 18 months | ||||||||||||||||||
Option granted | $ 35,394 | ||||||||||||||||||
Dividend yield | 0.00% | ||||||||||||||||||
Risk free interest | 1.40% | ||||||||||||||||||
Expected volatility | 68.00% | ||||||||||||||||||
Expected term | 10 years | ||||||||||||||||||
Chairman CEO And CFO [Member] | |||||||||||||||||||
Stock option granted | 2,147,000 | ||||||||||||||||||
Exercise price lower limit | $ 0.23 | ||||||||||||||||||
Exercise price upper limit | $ 0.80 | ||||||||||||||||||
Employee [Member] | |||||||||||||||||||
Common stock price per share | $ 0.16 | $ 0.16 | |||||||||||||||||
Stock option granted | 200,000 | ||||||||||||||||||
Stock option term | 10 years | ||||||||||||||||||
Option granted | $ 21,333 | ||||||||||||||||||
Dividend yield | 0.00% | ||||||||||||||||||
Risk free interest | 2.00% | ||||||||||||||||||
Expected volatility | 56.00% | ||||||||||||||||||
Expected term | 10 years | ||||||||||||||||||
Employee And Director [Member] | |||||||||||||||||||
Stock option granted | 1,530,000 | ||||||||||||||||||
Option granted | $ 133,084 | ||||||||||||||||||
Dividend yield | 0.00% | ||||||||||||||||||
Risk free interest | 1.50% | ||||||||||||||||||
Expected volatility | 72.00% | ||||||||||||||||||
Expected term | 5 years | ||||||||||||||||||
Exercise price lower limit | $ 0.12 | ||||||||||||||||||
Exercise price upper limit | 0.18 | ||||||||||||||||||
Employee And Director [Member] | 2016 Stock Option Plan [Member] | |||||||||||||||||||
Exercise price lower limit | 0.10 | ||||||||||||||||||
Exercise price upper limit | $ 0.12 | ||||||||||||||||||
Option to purchase common stock | 18,500,000 | ||||||||||||||||||
Employee And Director [Member] | 5 Years [Member] | |||||||||||||||||||
Stock option vesting period | 5 years | ||||||||||||||||||
Option to purchase common stock | 2,600,000 | ||||||||||||||||||
Employee And Director [Member] | 4 Years [Member] | |||||||||||||||||||
Stock option vesting period | 4 years | ||||||||||||||||||
Option to purchase common stock | 600,000 | ||||||||||||||||||
CEO And CFO [Member] | 2016 Stock Option Plan [Member] | |||||||||||||||||||
Option to purchase common stock | 3,800,000 | ||||||||||||||||||
Common Stock [Member] | Private Placement [Member] | |||||||||||||||||||
Exercise price per share | $ 0.10 | ||||||||||||||||||
Common Stock [Member] | Officer [Member] | |||||||||||||||||||
Number of common stock issued for services, shares | 100,012 | ||||||||||||||||||
Number of common stock issued for services | $ 11,000 | ||||||||||||||||||
Common Stock [Member] | Chairman [Member] | |||||||||||||||||||
Number of common stock issued for services, shares | 355,258 | ||||||||||||||||||
Number of common stock issued for services | $ 35,525 | ||||||||||||||||||
Series D Convertible Preferred Stock [Member] | |||||||||||||||||||
Number of common stock shares issued | 22 | 200 | 8,659,984 | ||||||||||||||||
Number of common stock shares issued, value | $ 1,243,554 | ||||||||||||||||||
Common stock price per share | $ 0.10 | ||||||||||||||||||
Common stock conversion price | $ 0.10 | ||||||||||||||||||
Preferred stock dividend rate percentage | 10.00% | 10.00% | |||||||||||||||||
Proceeds from sale of series convertible preferred stock, net of fees | $ 2,200,000 | ||||||||||||||||||
Number of securities called by warrants | 44,000,000 | ||||||||||||||||||
Convertible preferred stock, shares issued upon conversion | 22,000,000 | 100,000 | 22,000,000 | 22,000,000 | 22,000,000 | 22,000,000 | |||||||||||||
Convertible preferred stock outstanding | 22 | 22 | 22 | 0 | 22 | 22 | 0 | ||||||||||||
Fair value of preferred stock | $ 894,925 | ||||||||||||||||||
Preferred stock dividends | $ 1,298,571 | ||||||||||||||||||
Preferred stock accrued dividend | 321,692 | ||||||||||||||||||
Preferred stock dividends paid | $ 1,137,635 | $ 105,919 | |||||||||||||||||
Series D Convertible Preferred Stock [Member] | Securities Purchase Agreement [Member] | |||||||||||||||||||
Number of securities called by warrants | 21,000,000 | ||||||||||||||||||
Series D Convertible Preferred Stock [Member] | Investors [Member] | |||||||||||||||||||
Number of common stock shares issued | 205 | ||||||||||||||||||
Convertible preferred stock, shares issued upon conversion | 18,500,000 | 18,500,000 | 18,500,000 | 18,500,000 | 18,500,000 | ||||||||||||||
Preferred stock, shares outstanding | 740 | ||||||||||||||||||
Exchange of preferred stock | 197 | ||||||||||||||||||
Fair value of shares convertible | $ 3,145,000 | ||||||||||||||||||
Series B 10% Convertible Preferred Stock [Member] | |||||||||||||||||||
Number of common stock shares issued | 200 | 2,320,837 | |||||||||||||||||
Number of common stock shares issued, value | $ 547,000 | ||||||||||||||||||
Common stock conversion price | $ 0.40 | ||||||||||||||||||
Proceeds from sale of series convertible preferred stock, net of fees | $ 2,000,000 | ||||||||||||||||||
Number of securities called by warrants | 5,000,000 | ||||||||||||||||||
Convertible preferred stock, shares issued upon conversion | 25,000 | ||||||||||||||||||
Convertible preferred stock outstanding | 0 | 0 | 0 | 200 | 0 | 0 | 200 | ||||||||||||
Exchange of preferred stock | 200 | ||||||||||||||||||
Preferred stock dividends | $ 1,125,541 | ||||||||||||||||||
Preferred stock dividends paid | $ 476,729 | ||||||||||||||||||
Series B 10% Convertible Preferred Stock [Member] | Investor [Member] | |||||||||||||||||||
Common stock price per share | $ 0.50 | ||||||||||||||||||
Preferred stock dividend rate percentage | 10.00% | ||||||||||||||||||
Number of securities called by warrants | 5,000,000 | ||||||||||||||||||
Series C Convertible Preferred Stock [Member] | |||||||||||||||||||
Debt conversion, converted value | $ 2,475,000 | ||||||||||||||||||
Debt conversion shares issued | 12,850,000 | 257 | |||||||||||||||||
Debt interest rate percentage | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | ||||||||||||||
Common stock price per share | $ 0.20 | ||||||||||||||||||
Common stock conversion price | $ 0.20 | ||||||||||||||||||
Number of securities called by warrants | 12,850,000 | ||||||||||||||||||
Convertible preferred stock, shares issued upon conversion | 50,000 | ||||||||||||||||||
Debt instrumrnt outstanding amount | $ 2,475,000 | ||||||||||||||||||
Debt instrument, increase, accrued interest | $ 96,000 | ||||||||||||||||||
Convertible preferred stock outstanding | 52 | 52 | 52 | 0 | 52 | 52 | 0 | ||||||||||||
Exchange of preferred stock | 205 | ||||||||||||||||||
10 % Convertible Preferred Stock [Member] | |||||||||||||||||||
Fair value of common stock | $ 441,000 | $ 441,000 | $ 441,000 | $ 441,000 | $ 441,000 | ||||||||||||||
Convertible preferred stock, shares issued upon conversion | 2,597,000 | 2,597,000 | 2,597,000 | 2,597,000 | 2,597,000 | ||||||||||||||
Convertible preferred stock outstanding | 52 | 52 | 52 | 52 | 52 | ||||||||||||||
10% Convertible Preferred Stock [Member] | |||||||||||||||||||
Preferred stock dividend rate percentage | 69.00% | 10.00% | |||||||||||||||||
Convertible preferred stock outstanding | 740 | 740 | 740 | 938 | 740 | 740 | 938 | ||||||||||||
10% Convertible Preferred Stock [Member] | Series D Investor [Member] | |||||||||||||||||||
Exchange of preferred stock | 197 | ||||||||||||||||||
Series D2 Convertible Preferred Stock [Member] | |||||||||||||||||||
Convertible preferred stock, shares issued upon conversion | 9,922,215 | 9,922,215 | 9,922,215 | 9,922,215 | 9,922,215 | ||||||||||||||
Convertible preferred stock outstanding | 397 | 397 | 397 | 0 | 397 | 397 | 0 | ||||||||||||
Series D3 Convertible Preferred Stock [Member] [Member] | |||||||||||||||||||
Convertible preferred stock, shares issued upon conversion | 10,256,478 | 10,256,478 | 10,256,478 | 10,256,478 | 10,256,478 | ||||||||||||||
Convertible preferred stock outstanding | 205 | 205 | 205 | 0 | 205 | 205 | 0 | ||||||||||||
Series D Convertible Preferred Stock [Member] [Member] | |||||||||||||||||||
Fair value of shares convertible | $ 7,200,000 | ||||||||||||||||||
Series B and D Convertible Preferred Stock [Member] | |||||||||||||||||||
Preferred stock dividend rate percentage | 100.00% | ||||||||||||||||||
Preferred Stock [Member] | |||||||||||||||||||
Class of warrants | 86,600,000 | 86,600,000 | 86,600,000 | 86,600,000 | 86,600,000 | ||||||||||||||
Minimum [Member] | |||||||||||||||||||
Common stock, shares authorized | 150,000,000 | 200,000,000 | 150,000,000 | 150,000,000 | 150,000,000 | 150,000,000 | 150,000,000 | ||||||||||||
Minimum [Member] | 2016 Stock Option Plan [Member] | |||||||||||||||||||
Risk free interest | 1.20% | ||||||||||||||||||
Minimum [Member] | Private Placement of Common Stock and Warrants [Member] | |||||||||||||||||||
Common stock price per share | $ 0.14 | $ 0.14 | $ 0.14 | $ 0.14 | $ 0.14 | ||||||||||||||
Exercise price per share | $ 0.14 | $ 0.14 | $ 0.14 | $ 0.14 | $ 0.14 | ||||||||||||||
Maximum [Member] | |||||||||||||||||||
Common stock, shares authorized | 200,000,000 | 350,000,000 | 200,000,000 | 200,000,000 | 200,000,000 | 200,000,000 | 200,000,000 | ||||||||||||
Number of securities called by warrants | 22,000,000 | ||||||||||||||||||
Maximum [Member] | 2016 Stock Option Plan [Member] | |||||||||||||||||||
Risk free interest | 1.50% | ||||||||||||||||||
Maximum [Member] | Private Placement of Common Stock and Warrants [Member] | |||||||||||||||||||
Common stock price per share | $ 0.18 | $ 0.18 | $ 0.18 | $ 0.18 | $ 0.18 | ||||||||||||||
Exercise price per share | $ 0.17 | $ 0.17 | $ 0.17 | $ 0.17 | $ 0.17 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Stock Options Activity (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
2005 Stock Option Plan [Member] | ||
Number of Shares Outstanding, beginning balance | 4,002,000 | 3,802,000 |
Number of Shares, Granted | 250,000 | 200,000 |
Number of Shares, Forfeited or expired | (2,712,000) | |
Number of Shares, Exercised | ||
Number of Shares Outstanding, ending balance | 1,540,000 | 4,002,000 |
Number of Shares Exercisable, ending balance | 1,386,667 | 3,832,000 |
Number of shares Reserved for future grants | 1,195,000 | |
Aggregate intrinsic value of exercisable options | $ 2,000 | $ 57,900 |
Aggregate intrinsic value of all options | $ 2,000 | $ 57,900 |
Weighted Average Exercise Price Outstanding, beginning balance | $ 0.36 | $ 0.37 |
Weighted Average Exercise Price, Granted | 0.25 | 0.16 |
Weighted Average Exercise Price, Forfeited or expired | 0.36 | |
Weighted Average Exercise Price, Exercised | ||
Weighted Average Exercise Price Outstanding, ending balance | 0.34 | 0.36 |
Weighted Average Exercise Price Exercisable, ending balance | 0.34 | 0.35 |
Weighted average fair value of options granted during the period | $ 0.14 | $ 0.11 |
2016 Stock Option Plan [Member] | ||
Number of Shares Outstanding, beginning balance | ||
Number of Shares, Granted | 10,380,000 | |
Number of Shares, Forfeited or expired | (50,000) | |
Number of Shares, Exercised | ||
Number of Shares Outstanding, ending balance | 10,330,000 | |
Number of Shares Exercisable, ending balance | 1,877,778 | |
Number of shares Reserved for future grants | 10,670,000 | |
Aggregate intrinsic value of exercisable options | $ 125,889 | |
Aggregate intrinsic value of all options | $ 637,600 | |
Weighted Average Exercise Price Outstanding, beginning balance | ||
Weighted Average Exercise Price, Granted | 0.11 | |
Weighted Average Exercise Price, Forfeited or expired | 0.15 | |
Weighted Average Exercise Price, Exercised | ||
Weighted Average Exercise Price Outstanding, ending balance | 0.11 | |
Weighted Average Exercise Price Exercisable, ending balance | 0.10 | |
Weighted average fair value of options granted during the period | $ 0.06 |
Stockholders' Equity - Schedu57
Stockholders' Equity - Schedule of Options Outstanding (Details) | 12 Months Ended |
Sep. 30, 2016$ / sharesshares | |
2005 Stock Option Plan [Member] | |
Exercise Prices, Lower limit | $ 0.16 |
Exercise Prices, Upper limit | $ 0.80 |
Number of Options Outstanding | shares | 1,540,000 |
Options Outstanding Weighted Average Remaining Contractual Life | 4 years 1 month 6 days |
Options Outstanding Weighted Average Exercise price | $ 0.34 |
Number of Options Exercisable | shares | 1,386,667 |
Options Exercisable, Weighted Average Remaining Contractual Life | 4 years |
Options Exercisable, Weighted Average Exercise Price | $ 0.34 |
2016 Stock Option Plan [Member] | |
Exercise Prices, Lower limit | 0.10 |
Exercise Prices, Upper limit | $ 0.18 |
Number of Options Outstanding | shares | 10,330,000,330 |
Options Outstanding Weighted Average Remaining Contractual Life | 9 years 7 months 6 days |
Options Outstanding Weighted Average Exercise price | $ 0.11 |
Number of Options Exercisable | shares | 1,877,778 |
Options Exercisable, Weighted Average Remaining Contractual Life | 9 years 7 months 6 days |
Options Exercisable, Weighted Average Exercise Price | $ 0.10 |
Stockholders' Equity - Schedu58
Stockholders' Equity - Schedule of Activity Related to Non-vested Options (Details) - $ / shares | 12 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
2005 Stock Option Plan [Member] | ||
Shares Non-vested, beginning balance | 170,000 | |
Shares Granted | 250,000 | 200,000 |
Shares Vested or terminated | (266,667) | |
Shares Non-vested, ending balance | 153,333 | 170,000 |
Weighted Average Grant Date Fair Value Non-vested, beginning balance | $ 0.29 | |
Weighted Average Grant Date Fair Value, Granted | 0.14 | $ 0.11 |
Weighted Average Grant Date Fair Value Vested or terminated | 0.20 | |
Weighted Average Grant Date Fair Value Non-vested, ending balance | $ 0.21 | $ 0.29 |
2016 Stock Option Plan [Member] | ||
Shares Non-vested, beginning balance | ||
Shares Granted | 10,380,000 | |
Shares Vested or terminated | (1,927,778) | |
Shares Non-vested, ending balance | 8,452,222 | |
Weighted Average Grant Date Fair Value Non-vested, beginning balance | ||
Weighted Average Grant Date Fair Value, Granted | 0.06 | |
Weighted Average Grant Date Fair Value Vested or terminated | 0.03 | |
Weighted Average Grant Date Fair Value Non-vested, ending balance | $ 0.04 |
Stockholders' Equity - Schedu59
Stockholders' Equity - Schedule of Warrants Activity (Details) - Warrant [Member] - USD ($) | 12 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Shares Outstanding, beginning balance | 34,558,794 | 26,488,294 |
Shares, Granted | 80,323,586 | 8,250,000 |
Shares Forfeited, expired, repurchased | (2,035,593) | (39,500) |
Shares Exercised | (100,000) | |
Shares Outstanding, ending balance | 112,846,787 | 34,558,794 |
Shares Exercisable at end of period | 109,966,787 | 32,708,794 |
Aggregate intrinsic value of exercisable warrants | $ 4,727,102 | $ 126,000 |
Aggregate intrinsic value of all warrants | $ 4,729,102 | $ 292,500 |
Weighted Average Exercise Price Outstanding, beginning balance | $ 0.38 | $ 0.50 |
Weighted Average Exercise Price, Granted | 0.13 | 0.43 |
Weighted Average Exercise Price, Forfeited, expired, repurchased | 0.35 | 0.65 |
Weighted Average Exercise Price, Exercised | 0.41 | |
Weighted Average Exercise Price Outstanding, ending balance | 0.19 | 0.38 |
Weighted Average Exercise Price Exercisable | 0.19 | 0.41 |
Weighted Average Exercise Price Aggregate intrinsic value of exercisable warrants | ||
Weighted Exercise Price Aggregate intrinsic value of all warrants | ||
Weighted average fair value of options granted during the period | $ 0.11 | $ 0.12 |
Stockholders' Equity - Schedu60
Stockholders' Equity - Schedule of Warrants Outstanding and Exercisable (Details) - Warrant [Member] | 12 Months Ended |
Sep. 30, 2016$ / sharesshares | |
Warrants Outstanding Exercise Prices, Lower limit | $ 0.10 |
Warrants Outstanding Exercise Prices, Upper limit | $ 0.64 |
Number of Warrants Outstanding | shares | 112,846,787 |
Warrants Outstanding Weighted Average Remaining Contractual Life | 4 years 6 months |
Warrants Outstanding Weighted Average Exercise price | $ 0.19 |
Number of Warrants Exercisable | shares | 109,966,787 |
Warrants Exercisable, Weighted Average Remaining Contractual Life | 4 years 6 months |
Warrants Exercisable, Weighted Average Exercise Price | $ 0.19 |
Stockholders' Equity - Schedu61
Stockholders' Equity - Schedule of Stock by Class (Details) | Sep. 30, 2016shares |
Warrants | 112,846,787 |
Shares issuable upon conversion of preferred stock | 63,275,202 |
Common Stock Reserved | 187,991,989 |
2005 Stock Option Plan [Member] | |
Stock options reserved | 1,540,000 |
2016 Stock Option Plan [Member] | |
Stock options reserved | 10,330,000 |
Employee Benefit Plan (Details
Employee Benefit Plan (Details Narative) | 12 Months Ended |
Sep. 30, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Maximum annual contribution per employee, percent | 75.00% |
Vesting period | 5 years |
Concentrations (Details Narrati
Concentrations (Details Narrative) | 12 Months Ended | |
Sep. 30, 2016USD ($)vehicle | Sep. 30, 2015USD ($) | |
Vehicles on the road, class eight | 3,000,000 | |
Approvals, granted by environmental protection agency | 497 | |
January 2017 [Member] | ||
Vehicles on the road, class eight | 2,000,000 | |
Approvals, granted by environmental protection agency | 47 | |
Maximum [Member] | January 2017 [Member] | ||
Vehicles on the road, class eight | 700,000 | |
Minimum [Member] | January 2017 [Member] | ||
Vehicles on the road, class eight | 600,000 | |
Stationary Dual Fuel Systems [Member] | ||
Sales revenue, goods, net, percent period decrease | 37.00% | |
Sales, goods, net, percent period decrease | 77.00% | |
Vehicular Dual Fuel Systems [Member] | ||
Sales revenue, goods, net, percent period decrease | 49.00% | |
Sales revenue, goods, net, percent period increase | 43.00% | 43.00% |
Sales revenue, goods, net, period increase | $ | $ 418,000 | |
Net increase (decrease) in sales and transfer prices and production costs | $ | $ 1,400,000 | $ 1,000,000 |
Sales revenue, goods, net, period decrease | $ | $ 956,000 | |
Assets [Member] | UNITED STATES | ||
Concentration risk, percentage | 100.00% | |
Sales Revenue [Member] | Oil and Gas Customer One [Member ] | ||
Concentration risk, percentage | 10.00% | 39.00% |
Sales Revenue [Member] | Duel Fuel Vehicular Customer Three [Member ] | ||
Concentration risk, percentage | 59.00% | |
Sales Revenue [Member] | Duel Fuel Vehicular Customer One [Member ] | ||
Concentration risk, percentage | 14.00% | |
Sales Revenue [Member] | Stationary Dual Fuel Systems [Member] | ||
Concentration risk, percentage | 24.00% | 65.00% |
Sales Revenue [Member] | Vehicular Dual Fuel Systems [Member] | ||
Concentration risk, percentage | 75.00% | 33.00% |
Sales Revenue [Member] | Natural Gas Liquids [Member] | Maximum [Member] | ||
Concentration risk, percentage | 2.00% | 2.00% |
Concentrations - Schedule of Ne
Concentrations - Schedule of Net Sales (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Total net sales | $ 1,862,585 | $ 2,958,581 |
United States [Member] | ||
Total net sales | 1,378,590 | 2,407,734 |
Canada [Member] | ||
Total net sales | 97,333 | 218,897 |
Dominican Republic [Member] | ||
Total net sales | 224,200 | |
Mexico [Member] | ||
Total net sales | 386,662 | 65,750 |
Peru [Member] | ||
Total net sales | 42,000 | |
Stationary Dual Fuel Systems [Member] | ||
Total net sales | 438,862 | 1,936,364 |
Vehicular Dual Fuel Systems [Member] | ||
Total net sales | 1,393,741 | 975,374 |
Natural Gas Liquids [Member] | ||
Total net sales | $ 29,982 | $ 46,843 |
Segment Information (Details Na
Segment Information (Details Narrative) | 12 Months Ended |
Sep. 30, 2016segment | |
Consolidated [Member] | |
Reportable operating segments | 2 |
Segment Information - Schedule
Segment Information - Schedule of Segment Reporting Information, by Segment (Details) - USD ($) | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Jun. 30, 2015 | |
Segment Reporting Information [Line Items] | |||
Net sales | $ 1,862,585 | $ 2,958,581 | |
Operating loss from continuing operations | (5,280,576) | (4,346,602) | |
Interest and financing costs | 807,152 | 382,166 | |
Total assets | 9,793,150 | 11,011,757 | |
Operating Segments [Member] | Dual Fuel Conversion [Member] | |||
Segment Reporting Information [Line Items] | |||
Net sales | 1,832,603 | 2,911,738 | |
Amortization | 828,948 | 707,942 | |
Depreciation | 221,259 | 294,131 | |
Operating loss from continuing operations | (3,080,407) | (2,738,171) | |
Interest and financing costs | 280,657 | 287,265 | |
Total assets | 5,799,967 | 6,479,389 | |
Capital expenditures | 29,865 | 377,212 | |
Software development | 233,974 | 487,220 | |
Operating Segments [Member] | NGL Services [Member] | |||
Segment Reporting Information [Line Items] | |||
Net sales | 29,982 | 46,843 | |
Amortization | 30,000 | 5,000 | |
Depreciation | 173,300 | 28,883 | |
Operating loss from continuing operations | (759,912) | (212,218) | |
Interest and financing costs | 526,495 | 36,139 | |
Total assets | 3,056,199 | 3,342,992 | |
Capital expenditures | 465,746 | 3,153,408 | |
Software development | |||
Operating Segments [Member] | Corporate [Member] | |||
Segment Reporting Information [Line Items] | |||
Net sales | |||
Amortization | 167,487 | 46,826 | |
Depreciation | |||
Operating loss from continuing operations | (1,440,257) | (1,396,213) | |
Interest and financing costs | 58,762 | ||
Total assets | 961,899 | 1,189,376 | |
Capital expenditures | |||
Software development | |||
Consolidated [Member] | |||
Segment Reporting Information [Line Items] | |||
Net sales | 1,862,585 | 2,958,581 | |
Amortization | 1,026,435 | 759,768 | |
Depreciation | 394,559 | 323,014 | |
Operating loss from continuing operations | (5,280,576) | (4,346,602) | |
Interest and financing costs | 807,152 | 382,166 | |
Total assets | 9,818,065 | $ 11,011,757 | |
Capital expenditures | 495,611 | 3,530,620 | |
Software development | $ 233,974 | $ 487,220 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Income Tax Disclosure [Abstract] | ||
Potential deferred tax benefit percentage | 100.00% | |
Percentage of statutory federal income tax rate | 34.00% | 34.00% |
Net operating loss carryforwards | $ 44,000,000 | |
Net operating loss carryforwards expire description | expire beginning in 2021 through 2034 | |
Federal tax credit carryforwards | $ 368,000 | |
Federal tax credit carryforwards expire description | expire beginning in 2030 through 2034 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) | Sep. 30, 2016 | Sep. 30, 2015 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carry forwards | $ 15,066,164 | $ 13,401,012 |
General business credits | 352,582 | 323,480 |
Differences in fixed asset basis | (95,345) | (51,039) |
Alternative Minimum Tax amounts | 14,923 | 14,923 |
State NOL amounts | 1,131,620 | 944,948 |
Capitalized development costs | (921,142) | (1,043,330) |
Other, net | 291,865 | 201,039 |
Deferred tax assets gross | 15,840,667 | 13,791,033 |
Valuation reserve | (15,840,667) | (13,791,033) |
Net deferred tax asset |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) | 12 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Income Tax Disclosure [Abstract] | ||
Statutory U.S. tax rate | 34.00% | 34.00% |
State taxes, net of federal benefit | 2.80% | 2.30% |
Amortization | (0.40%) | 4.00% |
All others, net | (2.90%) | 11.10% |
U.S. business credits | 0.30% | (3.60%) |
Revaluation of warrants | 0.90% | (419.80%) |
Contingent Convertible Notes/Warrant extensions | (7.20%) | 33.00% |
Valuation allowance | (27.50%) | 339.00% |
Effective Tax Rate | 0.00% | 0.00% |