Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | Financial Gravity Companies, Inc. | |
Entity Central Index Key | 0001377167 | |
Document Type | 10-K/A | |
Document Period End Date | Sep. 30, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --09-30 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Public Float | $ 3,046,000 | |
Entity Common Stock, Shares Outstanding | 41,524,589 | |
Document Fiscal Period Focus | FY | |
Document Fiscal Year Focus | 2019 | |
Entity small business | true | |
Entity emerging growth | false | |
Entity Shell company | false | |
Interactive data current | Yes | |
Incorporation state | NV | |
Entity file number | 001-34770 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Sep. 30, 2019 | Sep. 30, 2018 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 36,053 | $ 32,220 |
Trade accounts receivable, net | 147,377 | 15,907 |
Accounts receivable - related party | 0 | 1,791 |
Prepaid expenses and other current assets | 12,010 | 25,657 |
Total current assets | 195,440 | 75,575 |
OTHER ASSETS | ||
Property and equipment, net | 139,991 | 138,286 |
Customer relationships, net | 0 | 11,225 |
Proprietary content, net | 262,550 | 328,188 |
Trade name | 0 | 69,300 |
Non-compete agreements, net | 5,260 | 10,520 |
Intellectual Property | 53,170 | 48,940 |
Goodwill | 1,094,702 | 1,094,702 |
Total assets | 1,751,113 | 1,776,736 |
CURRENT LIABILITIES | ||
Accounts payable - trade | 174,749 | 105,435 |
Accrued expenses | 146,872 | 132,989 |
Deferred revenue | 94,733 | 0 |
Line of credit | 63,919 | 59,646 |
Notes payable | 13,393 | 356,173 |
Total current liabilities | 493,666 | 654,243 |
Notes payable | 23,534 | 676,233 |
STOCKHOLDERS' EQUITY | ||
Common stock | 41,436 | 35,838 |
Additional paid-in capital | 7,391,592 | 5,986,052 |
Accumulated deficit | (6,199,115) | (5,575,630) |
Total stockholders' equity | 1,233,913 | 446,260 |
Liabilities and Stockholders Equity | $ 1,751,113 | $ 1,776,736 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2019 | Sep. 30, 2018 |
Statement of Financial Position [Abstract] | ||
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock par value | $ .001 | $ 0.001 |
Common stock shares issued | 41,436,033 | 35,837,900 |
Common stock shares outstanding | 41,436,033 | 35,837,900 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Total revenue | $ 4,075,048 | $ 3,886,993 |
OPERATING EXPENSES | ||
Cost of services | 54,927 | 85,998 |
Professional services | 141,835 | 827,272 |
Depreciation and amortization | 189,070 | 113,122 |
General and administrative | 533,805 | 747,897 |
Marketing | 131,529 | 266,930 |
Salaries and wages | 3,501,744 | 3,259,446 |
Total operating expenses | 4,552,910 | 5,300,665 |
Net operating loss | (477,862) | (1,413,672) |
OTHER EXPENSE | ||
Interest expense | (145,623) | (106,960) |
Total other expense | (145,623) | (106,960) |
NET LOSS | $ (623,485) | $ (1,520,632) |
LOSS PER SHARE - Basic and Diluted | $ (0.02) | $ (0.04) |
Investment management fees [Member] | ||
Total revenue | $ 1,884,117 | $ 1,775,838 |
Commissions and Service Income [Member] | ||
Total revenue | $ 2,190,931 | |
Commissions [Member] | ||
Total revenue | $ 2,111,155 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) | Common Stock | Additional Paid-In Capital | Retained Earnings / Accumulated Deficit | Total |
Beginning balance, shares at Sep. 30, 2017 | 35,737,900 | |||
Beginning balance, value at Sep. 30, 2017 | $ 35,738 | $ 5,679,668 | $ (4,054,998) | $ 1,660,408 |
Common stock issued under a private placement memorandum, shares | 100,000 | |||
Common stock issued under a private placement memorandum, value | $ 100 | 99,900 | 100,000 | |
Stock based compensation | 206,484 | 206,484 | ||
Net loss | (1,520,632) | (1,520,632) | ||
Ending balance, shares at Sep. 30, 2018 | 35,837,900 | |||
Ending balance, value at Sep. 30, 2018 | $ 35,838 | 5,986,052 | (5,575,630) | 446,260 |
Stock options in lieu of expenses, as marketing expenses | 38,660 | 38,660 | ||
Common stock issued upon conversion of debt, shares | 5,598,133 | |||
Common stock issued upon conversion of debt, value | $ 5,598 | 1,002,066 | 1,007,664 | |
Stock based compensation | 364,814 | 364,814 | ||
Net loss | (623,485) | (623,485) | ||
Ending balance, shares at Sep. 30, 2019 | 41,436,033 | |||
Ending balance, value at Sep. 30, 2019 | $ 41,436 | $ 7,391,592 | $ (6,199,115) | $ 1,233,913 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (623,485) | $ (1,520,632) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities | ||
Depreciation and amortization | 189,070 | 113,122 |
Common stock issued in exchange for services | 38,660 | 0 |
Stock based compensation | 364,814 | 206,484 |
Bad debt expense | 0 | 21,876 |
Changes in operating assets and liabilities | ||
Trade accounts receivable, net | (131,470) | 72,012 |
Accounts receivable - related party | 1,791 | 2,715 |
Prepaid expenses | 13,647 | 38,946 |
Accounts payable - trade | 127,997 | 53,621 |
Accrued expenses | 75,283 | 10,437 |
Deferred revenue | 33,333 | (95,601) |
Net cash provided by (used in) operating activities | 89,640 | (1,097,020) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Cash paid on purchase of property and equipment | (39,353) | (41,783) |
Purchases of trademarks | (4,229) | (18,856) |
Net cash used in investing activities | (43,582) | (60,639) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Borrowings from line of credit | 14,521 | 77,561 |
Payments on line of credit | (10,248) | (110,089) |
Borrowings from note payable | 202,205 | 740,000 |
Payments on note payable | (248,703) | (62,013) |
Proceeds from the sale of common stock | 0 | 100,000 |
Net cash (used in) provided by financing activities | (42,225) | 745,459 |
TOTAL CHANGE IN CASH AND CASH EQUIVALENTS | 3,833 | (412,200) |
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR | 32,220 | 444,420 |
CASH AND CASH EQUIVALENTS AT END OF YEAR | 36,053 | 32,220 |
Supplemental disclosures of cash flow information: | ||
Interest | 101,061 | 95,756 |
Non-cash activities: | ||
Accrued interest converted to equity | 58,683 | 0 |
Notes payable converted to equity | $ 948,981 | $ 0 |
Nature of Business
Nature of Business | 12 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Business | NATURE OF BUSINESS Financial Gravity Companies, Inc. and Subsidiaries (the “Company”) located in Allen, Texas. The wholly-owned subsidiaries of the organization include: Financial Gravity Holdings, Inc. (dissolved February 13, 2019), Financial Gravity Operations, Inc. (dissolved February 12, 2019), Financial Gravity Tax, Inc (sold October 31, 2019)., Sofos, Inc. (formerly Financial Gravity Wealth, Inc.), MPath Advisor Resources, LLC. (formerly Financial Gravity Business, LLC), Financial Gravity Ventures, LLC., Tax Master Network, LLC, and SASH Corporation (inactive and awaiting dissolution). Financial Gravity Holdings, Inc. (“FGH”) was established on September 29, 2014 to engage in the acquisition and integration of financial and other businesses which will deliver a wide range of accounting, tax planning and management services to high net worth individuals and businesses in the Dallas/Fort Worth region, with further expansion into other markets in accordance with its long-term growth rate and strategic business plan. FGH was merged into the Company, February 13, 2019 and subsequently dissolved. Financial Gravity Operations, Inc. (“FGO”) was established as a wholly-owned subsidiary of FGH in Texas on September 29, 2014. FGO did not have any activity through September 30, 2014. Activity commenced in 2015 for FGO related to the management of operational expenses for the shared services of the subsidiaries. FGO was merged into the FGH, February 12, 2019 and subsequently dissolved. MPath Advisor Resources, LLC. (formerly Financial Gravity Business, LLC.) (“MPath”) MPath is an insurance marketing organization and provides insurance products and services to insurance agents or agencies. Financial Gravity Ventures, LLC. (“FGV”) formerly Cloud9 Accelerator, LLC was acquired by Cloud9 Holdings Company (Cloud9) effective December 31, 2014 and holds acquired companies and business assets until they are integrated into the main stream Financial Gravity business structure. FGV did not have any financial activity through September 30, 2019. Financial Gravity Tax, Inc. (“FG Tax”) formerly Business Legacy, Inc., (“BLI”) was acquired by FGO for no cost effective December 1, 2015 and is located in Allen, Texas. BLI is a bookkeeping, tax planning, tax preparation, and payroll service provider to small companies and individuals. FG Tax was sold October 31, 2019. Sofos, Inc. (formerly Financial Gravity Wealth, Inc.) (“Sofos”) Sofos is a registered investment advisor, located in Allen, Texas. Sofos provides asset management services. SASH Corporation, an Oklahoma corporation doing business as Metro Data Processing (“MDP”) was acquired August 12, 2015. The purchase was made by Cloud9Accelerator, LLC. MDP was located in Tulsa, Oklahoma, and provided payroll services, software, and support solutions to business owners. This business was sold during fiscal 2019 for a net gain of $28,585. MDP is inactive and awaiting dissolution. Tax Master Network, LLC (“TMN”), was acquired effective October 1, 2015, and is an Ohio limited liability company. The purchase was made by FGH. TMN, located in Cincinnati, Ohio, provides three primary services including monthly subscriptions to the “Tax Coach” software system, coaching and email marketing services. |
1. Summary of Significant Accou
1. Summary of Significant Accounting Policies | 12 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A summary of the significant accounting polices consistently applied in the preparation of the accompanying consolidated financial statement in accordance with accounting principles generally accepted in the United States of America (“GAAP”) is as follows. Basis of Consolidation The consolidated financial statements include the accounts of Financial Gravity Companies, FGW, FGT, and TMN , (collectively referred to as the “Company”). All significant intercompany accounts and transactions have been eliminated on consolidation. Cash and Cash Equivalents The Company considers all highly liquid investments with an initial maturity of three months or less, when purchased, to be cash equivalents. The Company maintains cash balances at several financial institutions located throughout the United States, which at times may exceed insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents. Trade Accounts Receivable Trade accounts receivable are carried at the invoiced amount less an estimate made for doubtful accounts based on management’s review of outstanding balances. The collectability of the Company’s accounts receivable is reviewed on an ongoing basis, using historical payment trends and a review of specific accounts. Accounts receivable are written off after all reasonable collection efforts have been exhausted and when management determines the amounts to be uncollectible. Recoveries of receivables previously written off are recorded when received. The allowance for doubtful accounts was $0 and $21,876 as of September 30, 2019 and 2018, respectively. In the normal course of business, the Company may extend credit to its customers, on an unsecured basis, substantially all of whom are located in the United States of America. The Company does not believe that they are exposed to any significant risk of loss on accounts receivable. Prepaid Expenses Prepaid expenses consist of expenses the Company has paid for prior to the service or good being provided. These prepaid expenses will be recorded as expense at the time the service has been provided. Property and Equipment Property and equipment are stated at cost, less accumulated depreciation. Depreciation is provided in amounts sufficient to relate the cost of depreciable assets to earnings over their estimated service lives by the straight-line method. Maintenance and repairs are charged to earnings as incurred; major repairs and replacements are capitalized. When items of property or equipment are sold or retired, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is included in operations. Property and equipment operated under material leases which transfer substantially all benefits and risks associated with the assets to the Company are capitalized. An asset and liability equal to the present or fair value, if appropriate, of minimum payments over the term of the leases are recorded. Amortization of the asset is computed using the straight-line method. Expenses associated with all other leases (operating leases) are charged to expense as incurred. Customer Relationships The customer relationships acquired from the TMN purchase have been recognized in the accompanying consolidated balance sheets at $44,900, the value attributed to it on the date of the purchase. The customer relationships are being amortized on a straight-line basis over a four- year estimated life. During the years ended September 30, 2019 and 2018, the Company recorded amortization expense of $11,225 on this intangible asset, which is included in depreciation and amortization expense in the accompanying consolidated statements of operations. Accumulated amortization at September 30, 2019 and 2018 was $44,900, and $33,675 respectively. This has been fully amortized as of September 30, 2019. Proprietary Content The proprietary content acquired as a part of the TMN purchase has been recognized in the accompanying consolidated balance sheets at $525,100, the value attributed to it on the date of the purchase. The proprietary content is being amortized on a straight-line basis over an eight- year estimated life. During the years ended September 30, 2019 and 2018, the Company recorded amortization expense of $65,638 on this intangible asset, which is included in depreciation and amortization expense in the accompanying consolidated statements of operations. Accumulated amortization at September 30, 2019 and 2018 was $262,550 and $196,912, respectively. Future amortization of proprietary content is estimated to be as follows for the years ended September 30: 2020 $ 65,638 2021 65,638 2022 65,638 2023 65,636 $ 262,550 Trade Name The trade name acquired as a part of the TMN purchase has been recognized in the accompanying consolidated balance sheets at $69,300, the value attributed to it on the date of the purchase. Management has determined that the trade name had no future value and considers the value of the trade name recorded in the accompanying consolidated balance sheet to be impaired as of September 30, 2019. Accordingly, this asset was fully written off in 2019. Non-compete Agreements Non-compete agreements established as a part of the TMN purchase have been recognized in the accompanying consolidated balance sheets at $26,300, the value attributed to them on the date of the purchase. The non-compete agreements are being amortized on a straight-line basis over the five-year term of the non-compete clause of the agreement. During the years ended September 30, 2019 and 2018, the Company recorded amortization expense of $5,260 on this intangible asset, which is included in depreciation and amortization expense in the accompanying consolidated statements of operations. Accumulated amortization at September 30, 2019 and 2018 was $21,040 and $15,780, respectively. Future amortization of the non-compete agreements is estimated to be as follows for the years ended September 30: 2020 $ 5,260 Intellectual Property The Company accounts for intellectual property in accordance with GAAP and accordingly, intellectual property are stated at cost. Intellectual property with indefinite lives are not amortized but are tested for impairment at least annually. Management has determined that the intellectual property have an indefinite life and do not consider the value of intellectual property recorded in the accompanying consolidated balance sheet to be impaired as of September 30, 2019 and 2018. Goodwill Goodwill represents the excess of the value of the purchase price and related costs over the identifiable assets from business acquisitions. The Company conducts an annual impairment assessment, at the reporting unit level, of its recorded goodwill. The Company assesses qualitative factors in order to determine whether it is more likely than not that the fair value of a reporting unit is less than it is carrying amount. The qualitative factors evaluated by the Company include: macro-economic conditions of the local business environment, overall financial performance, and other entity specific factors as deemed appropriate. If, through this qualitative assessment, the conclusion is made that it is more likely than not that a reporting unit’s fair value is less than it is carrying amount, a two-step impairment test is performed. Management determined, by assessing the qualitative factors, that it is more likely than not that the fair value of the reporting unit is greater than it carries value. Management does not consider the value of goodwill recorded for TMN in the accompanying consolidated balance sheets to be impaired as of September 30, 2019, and 2018. Goodwill consists of the following: Goodwill at September 30, 2018 $ 1,094,702 Goodwill at September 30, 2019 $ 1,094,702 Income Taxes The Company accounts for Federal and state income taxes pursuant to GAAP, which requires an asset and liability approach for financial accounting and reporting for income taxes based on tax effects of differences between the financial statement and tax basis of assets and liabilities. The Company accounts for all uncertain tax positions in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 740 – Income Taxes (“ASC 740”). ASC 740 provides guidance on de-recognition, classification, interest and penalties and disclosure related to uncertain income tax positions. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as a component of income tax expense. There was no accrued interest or penalties as of September 30, 2019 and 2018. From time to time, the Company is audited by taxing authorities. These audits could result in proposed assessments of additional taxes. The Company believes that its tax positions comply in all material respects with applicable tax law. However, tax law is subject to interpretation, and interpretations by taxing authorities could be different from those of the Company, which could result in the imposition of additional taxes. The Company’s Federal returns since 2016 are still subject for examination by taxing authorities. Earnings Per Share Basic earnings per common share is computed by dividing net earnings available to common stockholders by the weighted average number of common shares outstanding for the reporting period. Average number of common shares were 37,825,239 and 35,830,228 for years ended September 30, 2019 and 2018, respectively. For the years ended September 30, 2019 and 2018, approximately 2,788,476 and 3,361,538 common stock options, respectively, and 25,000 and 200,000 warrants, respectively, were not added to the diluted average shares because inclusion of such shares would be antidilutive. Revenue Recognition The Company adopted the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Updates (“ASU”) ASU 2014-09, Revenue from Contracts with Customers October 1, 2018 on a modified basis. As the initial adoption of the standard did not have a material impact on the Company's financial condition or results of operations, no cumulative effect was recognized at the date of initial application. The Company also had no significant changes to systems, processes, or controls. The Company derives its revenues primarily from six components: Investment Management Fees, Tax Master Network subscriptions, Tax Operating System subscriptions, Financial Advisor subscriptions, Tax BluePrint sales, and Insurance Sales. FG Wealth generates investment management fees for services provided by the Company. Investment management fees include fees earned from assets under management by providing professional services to manage client investments. Revenue is recognized as earned, at the end of each period. FG Tax generates service income from its consulting and other professional services performed. Revenue recognized as service is provided. Commission revenue is derived from the sale of annuities and premiums on life insurance policies held by third parties. The revenue is recognized when commissions are received from insurers and issuers of the products. Revenue represents gross billings less discounts, and are net of sales taxes, as applicable. Amounts invoiced for work not yet completed are shown as deferred revenue in the accompanying consolidated balance sheets. Tax Master Network has five levels of services that are charged and collected on a month to month subscription basis. None of these programs come with a long-term commitment or contract, and there is no up-front payment beyond the monthly subscription fee. Cancellations are processed within the month requested and memberships are closed at the end of the period for which the most recent payment was made. Members are not entitled to refunds for unused memberships. Any subscription fees paid for a future period are deferred in the financial statements. TMN also sells Tax Blueprint®. These are tax planning strategies guides, to save customers taxes through the implementation of the recommended tax strategies. After an initial assessment, the customers pay half of the year one tax savings. Revenue is deferred until the customer reviews and accepts the final Tax Blueprint® document and returns an executed delivery agreement. Advertising Advertising costs are charged to operations when incurred. Advertising and marketing expense were $131,529 and $266,930 for the years ended September 30, 2019 and 2018, respectively. Stock-Based Compensation The Company recognizes the fair value of the stock-based compensation awards as wages in the accompanying statements of operations on a straight-line basis over the vesting period based on the Black-Scholes option pricing model based on a risk-free rate of 1.50% to 2.89% in 2019 and 1.49% to 2.55% in 2018, dividend yield of 0%, expected life of 10 years and volatility of 25.32% to 34.05%. Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Going Concern The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the Company will need to manage additional asset units under contract and/or additional financing to fully implement its business plan, including continued growth and establishment of a stronger brand. On May 23, 2017, the Company and GHS Investments, LLC (“GHS Investments”) entered into an Equity Financing Agreement (the “Agreement”). The Agreement was filed as an exhibit to a registration statement on Form S-1, filed with the Securities and Exchange Commission (“SEC”) on September 18, 2017. The agreement was approved by the SEC November 13, 2018. The Agreement contemplates a series of transactions, pursuant to which the Company will “put” shares of its common stock to GHS in consideration of the payment to the Company of eighty percent (80%) of the “Market Price” of such shares. “Market Price” shall mean the average of the two lowest trading prices of the Company’s Common Stock during the ten (10) consecutive trading days preceding the receipt of the applicable put notice. Accordingly, on each instance the Company exercises a put option, the Company will know in advance, both the number of shares issuable upon exercise of the put option, and the dollar amount of the purchase price for such shares. The maximum purchase price for shares to be purchased by GHS Investments under the Agreement is $11,000,000. To facilitate the sale of the shares so purchased by GHS Investments, the Company agreed to file a registration statement with the Securities and Exchange Commission. The Company also entered into a Registration Rights Agreement with GHS Investments, pursuant to which the Company has agreed to provide certain registration rights under the Securities Act of 1933, the rules and regulations promulgated thereunder, and applicable state securities laws. The Agreement will terminate (i) when GHS Investments has purchased an aggregate of $11,000,000 of the common stock of the Company, or (ii) 36 months after the effective date of the Agreement, or (iii) at such time that the registration statement is no longer in effect. Additionally, the Company is also actively seeking growth of its service offerings, both organically and via new client relationships. Management, in the ordinary course of business, is trying to raise additional capital through sales of common stock as well as seeking financing via equity or debt, or both from third parties. There are no assurances that additional financing will be available on favorable terms, or at all. If additional financing is not available, the Company will need to reduce, defer or cancel development programs, planned initiatives and overhead expenditures. The failure to adequately fund its capital requirements could have a material adverse effect on the Company’s business, financial condition and results of operations. Moreover, the sale of additional equity securities to raise financing will result in additional dilution to the Company’s stockholders and incurring additional indebtedness could involve an increased debt service cash obligation, the imposition of covenants that restrict the Company’s operations or the Company’s ability to perform on its current debt service requirements. The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. Future Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13 Financial Instruments-Credit Losses, which amends how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income, which applies to trade accounts receivable and the calculation of the allowance for uncollectible accounts receivable. The new standard will become effective for the Company for annual and interim periods beginning after December 31, 2019, with early adoption permitted. The Company is currently evaluating the impact of the adoption of this accounting guidance will have on the consolidated financial statements. Since the Company currently uses an expected losses from customers method, the Company does not anticipate the adoption of ASU 2016-13 will have a material impact on the Company's financial condition or results of operations. In January 2017, the FASB issued ASU No. 2017-04 Intangibles-Goodwill and Other Simplifying the Test for Goodwill Impairment, which provides guidance to simplify the subsequent measurement of goodwill by eliminating the Step 2 procedure from the goodwill impairment test. The new guidance is effective for the Company beginning with the fourth quarter of 2020. The Company does not anticipate the adoption of ASU 2017-04 will have a material impact on the Company's financial condition or results of operations. In February 2018, the FASB issued ASU Update No. 2018-02 Leases (Topic 842). Under the new guidance, a lessee will be required to recognize assets and liabilities for leases with lease terms of more than 12 months. Consistent with current GAAP, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance or operating lease. However, unlike current GAAP - which requires only capital leases to be recognized on the balance sheet - the new ASU will require both types of leases to be recognized on the balance sheet. ASU 2018-02 is effective for the years beginning after December 31, 2019 and for all periods presented. Early application of the amendments in this ASU is permitted. The Company does not expect any significant financial impact to the financial statements upon adoption of this standard. In March 2018, the FASB issued ASU Update No. 2018-07, Investments – Equity Method and Joint Ventures (Topic 323). The amendments in this Update eliminate the requirement that when an investment qualifies for use of the equity method as a result of an increase in the level of ownership interest or degree of influence, an investor must adjust the investment, results of operations, and retained earnings retroactively on a step-by-step basis as if the equity method had been in effect during all previous periods that the investment had been held. ASU 2018-07 is effective for the years beginning after December 31, 2018. Early application of the amendments in this ASU is permitted. The Company does not expect any significant financial impact to the financial statements upon adoption of this standard. In March 2018, the FASB issued ASU Update No. 2018-09, Compensation – Stock Compensation (Topic 718). The amendments in this Update are to simplify several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2018-09 is effective for annual periods beginning after December 31, 2018, and interim periods within those annual periods. The Company has yet to do a full analysis on the impact this will have but will do during the next fiscal year. The Company does not expect any significant financial impact to the financial statements upon adoption of this standard. |
2. Property and Equipment
2. Property and Equipment | 12 Months Ended |
Sep. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 2. PROPERTY AND EQUIPMENT Property and equipment consist of the following at September 30: Estimated 2019 2018 Furniture, fixtures and equipment 2 to 5 years $ 93,073 $ 53,271 Internally developed software 10 years 152,000 152,000 245,073 205,721 Less accumulated depreciation and amortization 105,082 67,435 $ 139,991 $ 138,286 Depreciation expense was $37,647 and $31,899 during the years ended September 30, 2019 and 2018, respectively. |
3. Intellectual Property
3. Intellectual Property | 12 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTELLECTUAL PROPERTY | 3. INTELLECTUAL PROPERTY Intellectual property consists of the following: Trademarks at September 30, 2017 $ 30,085 Trademarks purchased at cost 18,855 Trademarks at September 30, 2018 $ 48,940 Trademarks purchased at cost 4,230 Trademarks at September 30, 2019 $ 53,170 |
4. Line of Credit
4. Line of Credit | 12 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Line of Credit | 4. LINE OF CREDIT The Company has a revolving line of credit with Wells Fargo Bank, N.A. in the amount of $67,500. Amounts drawn under this line of credit are due on demand, and monthly interest and principal payments are required. The interest rate on the line of credit is 9.5%. This line of credit is collateralized by the personal guarantee of the majority stockholder. Line of credit balance was $63,919 and $59,646 for the years ended September 30, 2019 and 2018, respectively. |
5. Notes Payable
5. Notes Payable | 12 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Notes Payable | 5. NOTES PAYABLE On August 9, 2017 the Company entered into a Promissory Note Payable with Elmer Fink (Fink) in the amount of $100,000. The interest rate on the note is 10%. First year payment is equal to 10% of the loan value. A second-year payment equal to 10% of the loan was issued on December 1, 2019 with monthly principal and interest of $4,614 starting on year three. The remaining principal and accrued interest of this note is due on the maturity date, July 15, 2021. On December 1, 2019, the original note payable was amended. Payments from December 2019, through July 2019 to be interest only. Full principal and interest payments to commence August 9, 2019 until maturity, when all remaining principal and interest will be due and payable. On June 15, 2019, Fink and the Company entered into an agreement to convert the note into common shares of the Company and the note and accrued interest were settled in full as of that date. The outstanding balance was $0 and $100,000 at September 30, 2019 and 2018, respectively. On August 9, 2017 the Company entered into a Promissory Note Payable with Mike and Terri Ashby (Ashby) in the amount of $100,000. The interest rate on the note was 10%. First year payment was equal to 10% of the loan value with monthly principal and interest of $4,614 starting on year two. The remaining principal and accrued interest of this note was due on the maturity date, August 15, 2020. On December 31, 2019, the original note payable was amended. The new interest rate on the note is 15%. The remaining principal and accrued interest of this note is now due on the maturity date, July 15, 2022. A second-year payment equal to 15% of the loan was issued on February 6, 2019 with monthly principal and interest of $4,614 starting on year three. On June 15, 2019, Ashby and the Company entered into an agreement to convert the note into common shares of the Company and the note and accrued interest were settled in full as of that date. The outstanding balance was $0 and $92,406 at September 30, 2019 and 2018, respectively. On September 5, 2017 the Company entered into a Promissory Note Payable with Heleon Investment Company, Ltd. (Heleon) in the amount of $100,000. The interest rate on the note is 10%. First year payment is equal to 10% of the loan value with monthly principal and interest of $4,614 starting on year two. The remaining principal and accrued interest of this note is due on the maturity date, August 15, 2020. On December 31, 2019, the original note payable was amended. The new interest rate on the note is 15%. Payment on the note is deferred until December 31, 2020. Interest for the deferment period will be capitalized into the amount due, December 31, 2020, resulting in a new Amount Due. The New Amount Due plus interest will amortize over the following 24 months, with the first payment due December 31, 2020. On June 15, 2019, Heleon and the Company entered into an agreement to convert the note into common shares of the Company and the note and accrued interest were settled in full as of that date. The outstanding balance was $0 and $100,000 at September 30, 2019 and 2018, respectively. On October 2, 2017 the Company entered into a Promissory Note Payable with Indy and Sybil Bally (Bally) in the amount of $100,000. The interest rate on the note was 10%. First year payment was equal to 10% of the loan value with monthly principal and interest of $4,614 starting on year two. The remaining principal and accrued interest of this note is due on the maturity date, October 2, 2020. On December 20, 2019, the original note payable was amended. The new interest rate on the note is 15%. Payment on the note is deferred until February 2, 2020. Interest for the deferment period will be capitalized into the amount due, February 2, 2020, resulting in a new Amount Due. The New Amount Due plus interest will amortize over the following 24 months, with the first payment due February 2, 2020. On June 15, 2019, Bally and the Company entered into an agreement to convert the note into common shares of the Company and the note and accrued interest were settled in full as of that date. The outstanding balance was $0 and $100,000 at September 30, 2019 and 2018, respectively. On October 2, 2017 the Company entered into a Promissory Note Payable with Paul Frueh (Frueh) in the amount of $100,000. The interest rate on the note is 10%. First year payment is equal to 10% of the loan value with monthly principal and interest of $4,614 starting on year two. The remaining principal and accrued interest of this note is due on the maturity date, October 20, 2020. On June 15, 2019, Frueh and the Company entered into an agreement to convert the note into common shares of the Company and the note and accrued interest were settled in full as of that date. The outstanding balance was $0 and $100,000 at September 30, 2019 and 2018, respectively. On November 2, 2017 the Company entered into a Promissory Note Payable with Michael and Donna Dade (Dade) in the amount of $340,000. The interest rate on the note was 10%. First year payment was equal to 10% of the loan value with monthly principal and interest of $15,689 starting on year two. The remaining principal and accrued interest of this note is due on the maturity date, October 20, 2020. On December 20, 2019, the original note payable was amended. The new interest rate on the note is 15%. Payment on the note is deferred until February 20, 2020. Interest for the deferment period will be capitalized into the amount due, February 20, 2020, resulting in a new Amount Due. The New Amount Due plus interest will amortize over the following 24 months, with the first payment due February 20, 2020. On June 15, 2019, Dade and the Company entered into an agreement to convert the note into common shares of the Company and the note and accrued interest were settled in full as of that date. The outstanding balance was $0 and $340,000 at September 30, 2019 and 2018, respectively. On March 15, 2018 the Company entered into a Promissory Note Payable with Helen Janssen (Janssen) in the amount of $200,000. The interest rate on the note is 10%. First year payment is equal to 10% of the loan value with monthly principal and interest of $9,229 starting on year two. The remaining principal and accrued interest of this note is due on the maturity date, February 15, 2021. On December 31, 2019, the original note payable was amended. The new interest rate on the note is 15%. Payment on the note is deferred until February 15, 2020. Interest for the deferment period will be capitalized into the amount due, February 15, 2020, resulting in a new Amount Due. The New Amount Due plus interest will amortize over the following 24 months, with the first payment due February 15, 2020. On June 15, 2019, Janssen and the Company entered into an agreement to convert the note into common shares of the Company and the note and accrued interest were settled in full as of that date. The outstanding balance was $0 and $200,000 at September 30, 2019 and 2018, respectively. On November 29, 2018 the Company entered into a Promissory Note Payable with Knight Capital in the amount of $155,000. There is no interest rate associated with this note. The repayment streams for this are calculated from a factoring of the receivables sold, and are payable in daily payments of $1,504 and is due on the maturity date, July 11, 2019. The outstanding balance was $0 at September 30, 2019. On April 19, 2019 the Company entered into a Promissory Note Payable with Charles O’Banon (“O’Banon”), a customer, in the amount of $32,205. The note is in settlement of tax penalties and interest he incurred, that were proximately caused by the Company’s actions. The monthly principal and interest payments are $623, with a balloon payment of $14,048 in April 2022. The note is being repaid over 36 months and bears an interest rate of 6%. The Company has instituted abatement efforts on O’Banon’s behalf, with the taxing authority. Should the abatement efforts be successful, all monies paid O’Banon by the Company shall be returned. Should the abatement efforts result in mitigation, any monies paid by the Company, in excess of the mitigated amounts, shall be returned. The outstanding balance on September 30, 2019 and 2018, was $29,401 and $0 respectively. On April 12, 2019, the Company entered into a promissory note payable with a related party, John Pollock, the current EVP, in the amount of $15,000, and bears interest at 2.76%. The note is scheduled to be repaid in full by December 1, 2019. The outstanding balance on September 30, 2019 and 2018, was $7,526 and $0 respectively. The Company’s maturities of debt subsequent to September 30, 2019 are as follows: 2020 $ 13,393 2021 6,229 2022 17,305 $ 36,927 |
6. Accrued Expenses
6. Accrued Expenses | 12 Months Ended |
Sep. 30, 2019 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | 6. ACCRUED EXPENSES Accrued expenses consist of the following at September 30: 2019 2018 Accrued payroll $ 19,502 $ 19,689 Accrued operating expenses 113,013 113,300 Deferred rent 14,357 – $ 146,872 $ 132,989 |
7. Income Taxes
7. Income Taxes | 12 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 7. INCOME TAXES The Company elected C Corporation tax status from inception. Net operating losses (“NOL”) since that date total $5,624,574 as of September 30, 2019 and may be carried forward to offset future taxable income; accordingly, no current provision for income tax has been recorded in the accompanying statements of operations. NOL carry-forward benefits begin to expire in 2035. The following table summarizes the difference between the actual tax provision and the amounts obtained by applying the statutory tax rates to the income or loss before income taxes for the years ended September 30: 2019 2018 Tax benefit calculated at statutory rate 21.00% 24.25% Expense not deductible (1.83% ) (0.16% ) State tax, net of federal benefit – (0.45% ) Effect of rate change – (26.99% ) Changes to valuation allowance (19.17% ) 3.35% Provision for income taxes –% –% A deferred tax liability or asset is determined based on the difference between the financial statement and tax bases of assets and liabilities as measured by the enacted tax rates which will be in effect when these differences reverse. Deferred tax expense or benefit in the accompanying consolidated statements of operations are the result of changes in the assets and liabilities for deferred taxes. The measurement of deferred tax assets is reduced, if necessary, by the amount for any tax benefits that, based on available evidence, are not expected to be realized. Income tax expense is the current tax payable or refundable for the year plus or minus the net change in the deferred tax assets and liabilities. Deferred income taxes of the Company arise from the temporary differences between financial statement and income tax recognition of NOL carry-forwards. The deferred tax assets and liabilities in the accompanying consolidated balance sheets include the following components at September 30: 2019 2018 Net non-current deferred tax assets: Net operating loss carry-forward $ 1,181,160 $ 1,098,314 Property and equipment 6,921 3,456 1,188,081 1,101,770 Net non-current deferred tax liabilities: Intangible assets 10,319 7,996 Net 1,177,762 1,093,774 Less valuation allowance (1,177,762 ) (1,093,774 ) Net deferred taxes $ – $ – The Tax Cuts and Jobs Act (the “Tax Act”), which was enacted December 22, 2018, reduced the corporate income tax rate effective December 1, 2019 from 35% to 21%. Among the other significant tax law changes that potentially affect the Company are the limitations on the deduction for interest incurred in 2019 or later of up to 70% of its taxable income for the carryforward year and the limitation of the utilization of post 2018 net operating loss carryforwards. The Company does not anticipate material changes to its income tax provision as a result of the passage of the Tax Act until pretax law change net operating losses are fully utilized or expire in 2026. The Company has remeasured certain deferred federal tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21%. The deferred tax assets of the Company were reduced by $408,041 as a result of this remeasurement. This change was fully offset by the corresponding change in the valuation allowance. The Company is still analyzing certain aspects of the Tax Act, and refining its calculations, which could potentially affect the measurement of those balances or potentially give rise to new deferred tax amounts. The Company’s estimates may also be affected in the future as the Company gains a more thorough understanding of the Tax Act, and how the individual states are implementing this new law. |
8. Commitments, Contingencies a
8. Commitments, Contingencies and Concentrations | 12 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments, Contingencies and Concentrations | 8. COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS Leases The Company conducts operations from leased premises leased through 2024. Some of these leases provide for payment of taxes, insurance, utilities and maintenance. The Company also leases certain equipment under operating leases. Total rent expense for the years ended September 30, 2019 and 2018 was $135,041 and $118,126, respectively. Rent expense is recorded on a straight-line basis over the term of the lease. The difference between rental expense and rental payments is recorded as deferred rent within accrued expenses in the accompanying consolidated balance sheets. Management expects that in the normal course of business, leases will be renewed or replaced by other leases. Minimum future annual rental payments under non-cancelable operating leases having original terms in excess of one year are as follows: 2020 $ 123,144 2021 110,444 2022 96,016 2023 97,752 Thereafter 32,584 $ 459,940 Legal Proceedings From time to time, we are a party to or are otherwise involved in legal proceedings, claims and other legal matters, arising in the ordinary course of our business or otherwise. Management does not believe that there are any current, material legal proceedings ongoing at this time. |
9. Stockholders' Equity
9. Stockholders' Equity | 12 Months Ended |
Sep. 30, 2019 | |
STOCKHOLDERS' EQUITY | |
Stockholders' Equity | 9. STOCKHOLDERS’ EQUITY Common Stock The Company is authorized to issue up to 300,000,000 shares of common stock, par value $0.001 per share. Preferred Stock The Company does not have a preferred stock authorization in its articles of incorporation. Financial Gravity Holdings, a subsidiary of the Company, has authorized the issuance of up to 10,000,000 shares of preferred stock, by action of the Board of Directors. The preferred stock authorization has not been formalized via the filing of an amendment to the certificate of formation of Financial Gravity Holdings. The rights and obligations of the preferred stock are as determined by the Board of Directors at the time of issuance. Financial Gravity Holdings was dissolved February 13, 2019. For each of the Company and Financial Gravity Holdings, its subsidiary, there were no preferred shares issued or outstanding as of September 30, 2019 and 2018. Warrants In the three months ended December 31, 2017, an aggregate of 100,000 shares of the Company’s common stock had been sold for $100,000 for which the Company issued warrants for the purchase of 25,000 shares of common stock of the Company at an exercise price of $1.25 per share for a 1 year term and an additional 25,000 shares of common stock of the Company at an exercise price of $1.50 for a 2-year term. The Company follows the provisions of ASC 815, “Derivatives and Hedging”. ASC 815 requires freestanding contracts that are settled in a company’s own stock to be designated as an equity instrument, assets or liability. Under the provisions of ASC 815, a contract designated as an asset, or liability must be initially recorded and carried at fair value until the contract meets the requirements for classification as equity, until the contract is exercised or until the contract expires. However, the Company determined that these warrants should be accounted for as equity and as such no determination of fair value was necessary. Additional Common Stock Issuances During the years ended September 30, 2019 and 2018, 0 and 100,000 shares were issued, for $0 and $100,000 respectively. |
10. Stock Option Plan
10. Stock Option Plan | 12 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock Option Plan | 10. STOCK OPTION PLAN Effective February 27, 2015, the Company established the 2015 Stock Option Plan (the “2015 Plan”). The Board of Directors of the Company has the authority and discretion to grant stock options. The maximum number of shares of stock that may be issued and exercised under the Plan is 9,000,000. Eligible individuals include any employee of the Company or any director, consultant, or other person providing services to the Company. The expiration date and exercise price are as established by the Board of Directors of the Company. The last date any options were granted under the 2015 Plan was March 14, 2016. Effective November 22, 2016, the Company established the 2016 Stock Option Plan (the “2016 Plan”). The Board of Directors of the Company has the authority and discretion to grant stock options. The maximum number of shares of stock that may be issued and exercised under the Plan is 20,000,000. Eligible individuals include any employee of the Company or any director, consultant, or other person providing services to the Company. The expiration date and exercise price are as established by the Board of Directors of the Company. The first date any options were granted under the 2016 Plan was December 19, 2016. Stock option activity is summarized as follows: Shares Value of Weighted Weighted Outstanding - September 30, 2017 2,817,146 $ 317,561 $ 0.67 101 months Granted 895,000 119,736 0.27 113 months Exercised – – – – Canceled or expired 80,596 20,052 0.27 – Outstanding - September 30, 2018 3,361,538 417,245 0.58 101 months Granted 2,269,650 472,048 0.21 113 months Exercised – – – Canceled or expired 3,112,712 338,838 0.24 Outstanding - September 30, 2019 2,788,476 $ 550,455 $ 0.29 99 months Exercisable - September 30, 2019 2,707,209 $ 0.29 98 months All outstanding 2015 Plan stock options at September 30, 2016 became immediately vested upon the completion of the reverse merger with Pacific Oil Company. Most of the stock options granted under the 2016 Plan have 2-year vesting periods but there were 650,000 and 20,000 options that vested at issuance during fiscal 2018 and 2019, respectively. Total compensation expense included in salaries and wages of previously unamortized stock compensation was $364,814 and $206,484 for the years ended September 30, 2019 and 2018, respectively. Unamortized share-based compensation expense as of September 30, 2019 amounted to $12,871 which is expected to recognize over the next 1.84 years. |
11. Related Party Transactions
11. Related Party Transactions | 12 Months Ended |
Sep. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 11. RELATED PARTY TRANSACTIONS Accounts receivable due from the largest stockholder of the entity, included in accounts receivable – related party in the accompanying consolidated balance sheets was $0 and $1,791 as of September 30, 2019 and September 30, 2018, respectively. Management fees paid to the majority stockholder of the entity, included in salaries and wages in the accompanying consolidated statements of operations were $152,500 and $203,000 for fiscal 2019 and 2018, respectively. Included in salaries and wages were consulting fees paid to a related party as a condition to the TMN acquisition. The agreement requires payments each month totaling $21,500. The total paid under this agreement in fiscal 2019 and 2018 respectively, were $258,000 and $403,160. On April 12, 2019 the Company entered into a loan agreement with John Pollock, Executive Vice President of the Company. The note bears interest at 2.76%, and will be repaid in six equal installments of $2,520, beginning July 1, 2019. The balance of the loan at September 30, 2019 was $7,526. |
12. Subsequent Events
12. Subsequent Events | 12 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | 12. SUBSEQUENT EVENTS September 30, 2019, the Company entered into a merger agreement with Forta Financial Group, Inc. (formerly Presidential Brokerage, Inc. (“Forta”), to acquire Forta in exchange for Company stock. 45,797,684 shares of Financial Gravity Companies, Inc. will be issued in exchange for the stock of Forta. Companies will assume approximately $860,000 of Forta debt and receive approximately $1,220,000 in Forta assets. Subsequent to September 30, 2019, the Company applied to FINRA for approval of the merger. The merger is subject to FINRA approval and will be finalized upon such approval. |
1. Summary of Significant Acc_2
1. Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Consolidation | Basis of Consolidation The consolidated financial statements include the accounts of Financial Gravity Companies, FGW, FGT, and TMN , (collectively referred to as the “Company”). All significant intercompany accounts and transactions have been eliminated on consolidation. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with an initial maturity of three months or less, when purchased, to be cash equivalents. The Company maintains cash balances at several financial institutions located throughout the United States, which at times may exceed insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents. |
Trade Accounts Receivable | Trade Accounts Receivable Trade accounts receivable are carried at the invoiced amount less an estimate made for doubtful accounts based on management’s review of outstanding balances. The collectability of the Company’s accounts receivable is reviewed on an ongoing basis, using historical payment trends and a review of specific accounts. Accounts receivable are written off after all reasonable collection efforts have been exhausted and when management determines the amounts to be uncollectible. Recoveries of receivables previously written off are recorded when received. The allowance for doubtful accounts was $0 and $21,876 as of September 30, 2019 and 2018, respectively. In the normal course of business, the Company may extend credit to its customers, on an unsecured basis, substantially all of whom are located in the United States of America. The Company does not believe that they are exposed to any significant risk of loss on accounts receivable. |
Prepaid Expenses | Prepaid Expenses Prepaid expenses consist of expenses the Company has paid for prior to the service or good being provided. These prepaid expenses will be recorded as expense at the time the service has been provided. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost, less accumulated depreciation. Depreciation is provided in amounts sufficient to relate the cost of depreciable assets to earnings over their estimated service lives by the straight-line method. Maintenance and repairs are charged to earnings as incurred; major repairs and replacements are capitalized. When items of property or equipment are sold or retired, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is included in operations. Property and equipment operated under material leases which transfer substantially all benefits and risks associated with the assets to the Company are capitalized. An asset and liability equal to the present or fair value, if appropriate, of minimum payments over the term of the leases are recorded. Amortization of the asset is computed using the straight-line method. Expenses associated with all other leases (operating leases) are charged to expense as incurred. |
Customer Relationships | Customer Relationships The customer relationships acquired from the TMN purchase have been recognized in the accompanying consolidated balance sheets at $44,900, the value attributed to it on the date of the purchase. The customer relationships are being amortized on a straight-line basis over a four- year estimated life. During the years ended September 30, 2019 and 2018, the Company recorded amortization expense of $11,225 on this intangible asset, which is included in depreciation and amortization expense in the accompanying consolidated statements of operations. Accumulated amortization at September 30, 2019 and 2018 was $44,900, and $33,675 respectively. This has been fully amortized as of September 30, 2019. |
Proprietary Content | Proprietary Content The proprietary content acquired as a part of the TMN purchase has been recognized in the accompanying consolidated balance sheets at $525,100, the value attributed to it on the date of the purchase. The proprietary content is being amortized on a straight-line basis over an eight- year estimated life. During the years ended September 30, 2019 and 2018, the Company recorded amortization expense of $65,638 on this intangible asset, which is included in depreciation and amortization expense in the accompanying consolidated statements of operations. Accumulated amortization at September 30, 2019 and 2018 was $262,550 and $196,912, respectively. Future amortization of proprietary content is estimated to be as follows for the years ended September 30: 2020 $ 65,638 2021 65,638 2022 65,638 2023 65,636 $ 262,550 |
Trade Name | Trade Name The trade name acquired as a part of the TMN purchase has been recognized in the accompanying consolidated balance sheets at $69,300, the value attributed to it on the date of the purchase. Management has determined that the trade name had no future value and considers the value of the trade name recorded in the accompanying consolidated balance sheet to be impaired as of September 30, 2019. Accordingly, this asset was fully written off in 2019. |
Non-compete Agreements | Non-compete Agreements Non-compete agreements established as a part of the TMN purchase have been recognized in the accompanying consolidated balance sheets at $26,300, the value attributed to them on the date of the purchase. The non-compete agreements are being amortized on a straight-line basis over the five-year term of the non-compete clause of the agreement. During the years ended September 30, 2019 and 2018, the Company recorded amortization expense of $5,260 on this intangible asset, which is included in depreciation and amortization expense in the accompanying consolidated statements of operations. Accumulated amortization at September 30, 2019 and 2018 was $21,040 and $15,780, respectively. Future amortization of the non-compete agreements is estimated to be as follows for the years ended September 30: 2020 $ 5,260 |
Intellectual Property | Intellectual Property The Company accounts for intellectual property in accordance with GAAP and accordingly, intellectual property are stated at cost. Intellectual property with indefinite lives are not amortized but are tested for impairment at least annually. Management has determined that the intellectual property have an indefinite life and do not consider the value of intellectual property recorded in the accompanying consolidated balance sheet to be impaired as of September 30, 2019 and 2018. |
Goodwill | Goodwill Goodwill represents the excess of the value of the purchase price and related costs over the identifiable assets from business acquisitions. The Company conducts an annual impairment assessment, at the reporting unit level, of its recorded goodwill. The Company assesses qualitative factors in order to determine whether it is more likely than not that the fair value of a reporting unit is less than it is carrying amount. The qualitative factors evaluated by the Company include: macro-economic conditions of the local business environment, overall financial performance, and other entity specific factors as deemed appropriate. If, through this qualitative assessment, the conclusion is made that it is more likely than not that a reporting unit’s fair value is less than it is carrying amount, a two-step impairment test is performed. Management determined, by assessing the qualitative factors, that it is more likely than not that the fair value of the reporting unit is greater than it carries value. Management does not consider the value of goodwill recorded for TMN in the accompanying consolidated balance sheets to be impaired as of September 30, 2019, and 2018. Goodwill consists of the following: Goodwill at September 30, 2018 $ 1,094,702 Goodwill at September 30, 2019 $ 1,094,702 |
Income Taxes | Income Taxes The Company accounts for Federal and state income taxes pursuant to GAAP, which requires an asset and liability approach for financial accounting and reporting for income taxes based on tax effects of differences between the financial statement and tax basis of assets and liabilities. The Company accounts for all uncertain tax positions in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 740 – Income Taxes (“ASC 740”). ASC 740 provides guidance on de-recognition, classification, interest and penalties and disclosure related to uncertain income tax positions. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as a component of income tax expense. There was no accrued interest or penalties as of September 30, 2019 and 2018. From time to time, the Company is audited by taxing authorities. These audits could result in proposed assessments of additional taxes. The Company believes that its tax positions comply in all material respects with applicable tax law. However, tax law is subject to interpretation, and interpretations by taxing authorities could be different from those of the Company, which could result in the imposition of additional taxes. The Company’s Federal returns since 2016 are still subject for examination by taxing authorities. |
Earnings Per Share | Earnings Per Share Basic earnings per common share is computed by dividing net earnings available to common stockholders by the weighted average number of common shares outstanding for the reporting period. Average number of common shares were 37,825,239 and 35,830,228 for years ended September 30, 2019 and 2018, respectively. For the years ended September 30, 2019 and 2018, approximately 2,788,476 and 3,361,538 common stock options, respectively, and 25,000 and 200,000 warrants, respectively, were not added to the diluted average shares because inclusion of such shares would be antidilutive. |
Revenue Recognition | Revenue Recognition The Company adopted the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Updates (“ASU”) ASU 2014-09, Revenue from Contracts with Customers October 1, 2018 on a modified basis. As the initial adoption of the standard did not have a material impact on the Company's financial condition or results of operations, no cumulative effect was recognized at the date of initial application. The Company also had no significant changes to systems, processes, or controls. The Company derives its revenues primarily from six components: Investment Management Fees, Tax Master Network subscriptions, Tax Operating System subscriptions, Financial Advisor subscriptions, Tax BluePrint sales, and Insurance Sales. FG Wealth generates investment management fees for services provided by the Company. Investment management fees include fees earned from assets under management by providing professional services to manage client investments. Revenue is recognized as earned, at the end of each period. FG Tax generates service income from its consulting and other professional services performed. Revenue recognized as service is provided. Commission revenue is derived from the sale of annuities and premiums on life insurance policies held by third parties. The revenue is recognized when commissions are received from insurers and issuers of the products. Revenue represents gross billings less discounts, and are net of sales taxes, as applicable. Amounts invoiced for work not yet completed are shown as deferred revenue in the accompanying consolidated balance sheets. Tax Master Network has five levels of services that are charged and collected on a month to month subscription basis. None of these programs come with a long-term commitment or contract, and there is no up-front payment beyond the monthly subscription fee. Cancellations are processed within the month requested and memberships are closed at the end of the period for which the most recent payment was made. Members are not entitled to refunds for unused memberships. Any subscription fees paid for a future period are deferred in the financial statements. TMN also sells Tax Blueprint®. These are tax planning strategies guides, to save customers taxes through the implementation of the recommended tax strategies. After an initial assessment, the customers pay half of the year one tax savings. Revenue is deferred until the customer reviews and accepts the final Tax Blueprint® document and returns an executed delivery agreement. |
Advertising | Advertising Advertising costs are charged to operations when incurred. Advertising and marketing expense were $131,529 and $266,930 for the years ended September 30, 2019 and 2018, respectively. |
Stock-Based Compensation | Stock-Based Compensation The Company recognizes the fair value of the stock-based compensation awards as wages in the accompanying statements of operations on a straight-line basis over the vesting period based on the Black-Scholes option pricing model based on a risk-free rate of 1.50% to 2.89% in 2019 and 1.49% to 2.55% in 2018, dividend yield of 0%, expected life of 10 years and volatility of 25.32% to 34.05%. |
Use of Estimates | Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. |
Going Concern | Going Concern The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the Company will need to manage additional asset units under contract and/or additional financing to fully implement its business plan, including continued growth and establishment of a stronger brand. On May 23, 2017, the Company and GHS Investments, LLC (“GHS Investments”) entered into an Equity Financing Agreement (the “Agreement”). The Agreement was filed as an exhibit to a registration statement on Form S-1, filed with the Securities and Exchange Commission (“SEC”) on September 18, 2017. The agreement was approved by the SEC November 13, 2018. The Agreement contemplates a series of transactions, pursuant to which the Company will “put” shares of its common stock to GHS in consideration of the payment to the Company of eighty percent (80%) of the “Market Price” of such shares. “Market Price” shall mean the average of the two lowest trading prices of the Company’s Common Stock during the ten (10) consecutive trading days preceding the receipt of the applicable put notice. Accordingly, on each instance the Company exercises a put option, the Company will know in advance, both the number of shares issuable upon exercise of the put option, and the dollar amount of the purchase price for such shares. The maximum purchase price for shares to be purchased by GHS Investments under the Agreement is $11,000,000. To facilitate the sale of the shares so purchased by GHS Investments, the Company agreed to file a registration statement with the Securities and Exchange Commission. The Company also entered into a Registration Rights Agreement with GHS Investments, pursuant to which the Company has agreed to provide certain registration rights under the Securities Act of 1933, the rules and regulations promulgated thereunder, and applicable state securities laws. The Agreement will terminate (i) when GHS Investments has purchased an aggregate of $11,000,000 of the common stock of the Company, or (ii) 36 months after the effective date of the Agreement, or (iii) at such time that the registration statement is no longer in effect. Additionally, the Company is also actively seeking growth of its service offerings, both organically and via new client relationships. Management, in the ordinary course of business, is trying to raise additional capital through sales of common stock as well as seeking financing via equity or debt, or both from third parties. There are no assurances that additional financing will be available on favorable terms, or at all. If additional financing is not available, the Company will need to reduce, defer or cancel development programs, planned initiatives and overhead expenditures. The failure to adequately fund its capital requirements could have a material adverse effect on the Company’s business, financial condition and results of operations. Moreover, the sale of additional equity securities to raise financing will result in additional dilution to the Company’s stockholders and incurring additional indebtedness could involve an increased debt service cash obligation, the imposition of covenants that restrict the Company’s operations or the Company’s ability to perform on its current debt service requirements. The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. |
Future Accounting Pronouncements | Future Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13 Financial Instruments-Credit Losses, which amends how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income, which applies to trade accounts receivable and the calculation of the allowance for uncollectible accounts receivable. The new standard will become effective for the Company for annual and interim periods beginning after December 31, 2019, with early adoption permitted. The Company is currently evaluating the impact of the adoption of this accounting guidance will have on the consolidated financial statements. Since the Company currently uses an expected losses from customers method, the Company does not anticipate the adoption of ASU 2016-13 will have a material impact on the Company's financial condition or results of operations. In January 2017, the FASB issued ASU No. 2017-04 Intangibles-Goodwill and Other Simplifying the Test for Goodwill Impairment, which provides guidance to simplify the subsequent measurement of goodwill by eliminating the Step 2 procedure from the goodwill impairment test. The new guidance is effective for the Company beginning with the fourth quarter of 2020. The Company does not anticipate the adoption of ASU 2017-04 will have a material impact on the Company's financial condition or results of operations. In February 2018, the FASB issued ASU Update No. 2018-02 Leases (Topic 842). Under the new guidance, a lessee will be required to recognize assets and liabilities for leases with lease terms of more than 12 months. Consistent with current GAAP, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance or operating lease. However, unlike current GAAP - which requires only capital leases to be recognized on the balance sheet - the new ASU will require both types of leases to be recognized on the balance sheet. ASU 2018-02 is effective for the years beginning after December 31, 2019 and for all periods presented. Early application of the amendments in this ASU is permitted. The Company does not expect any significant financial impact to the financial statements upon adoption of this standard. In March 2018, the FASB issued ASU Update No. 2018-07, Investments – Equity Method and Joint Ventures (Topic 323). The amendments in this Update eliminate the requirement that when an investment qualifies for use of the equity method as a result of an increase in the level of ownership interest or degree of influence, an investor must adjust the investment, results of operations, and retained earnings retroactively on a step-by-step basis as if the equity method had been in effect during all previous periods that the investment had been held. ASU 2018-07 is effective for the years beginning after December 31, 2018. Early application of the amendments in this ASU is permitted. The Company does not expect any significant financial impact to the financial statements upon adoption of this standard. In March 2018, the FASB issued ASU Update No. 2018-09, Compensation – Stock Compensation (Topic 718). The amendments in this Update are to simplify several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2018-09 is effective for annual periods beginning after December 31, 2018, and interim periods within those annual periods. The Company has yet to do a full analysis on the impact this will have but will do during the next fiscal year. The Company does not expect any significant financial impact to the financial statements upon adoption of this standard. |
1. Summary of Significant Acc_3
1. Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Schedule of goodwill | Goodwill consists of the following: Goodwill at September 30, 2018 $ 1,094,702 Goodwill at September 30, 2019 $ 1,094,702 |
Proprietary Content [Member] | |
Schedule of future amortization | Future amortization of proprietary content is estimated to be as follows for the years ended September 30: 2020 $ 65,638 2021 65,638 2022 65,638 2023 65,636 $ 262,550 |
Noncompete Agreements [Member] | |
Schedule of future amortization | Future amortization of the non-compete agreements is estimated to be as follows for the years ended September 30: 2020 $ 5,260 |
2. Property and Equipment (Tabl
2. Property and Equipment (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | Estimated 2019 2018 Furniture, fixtures and equipment 2 to 5 years $ 93,073 $ 53,271 Internally developed software 10 years 152,000 152,000 245,073 205,721 Less accumulated depreciation and amortization 105,082 67,435 $ 139,991 $ 138,286 |
3. Intellectual Property (Table
3. Intellectual Property (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intellectual property | Trademarks at September 30, 2017 $ 30,085 Trademarks purchased at cost 18,855 Trademarks at September 30, 2018 $ 48,940 Trademarks purchased at cost 4,230 Trademarks at September 30, 2019 $ 53,170 |
5. Notes Payable (Tables)
5. Notes Payable (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of debt maturities | The Company’s maturities of debt subsequent to September 30, 2019 are as follows: 2020 $ 13,393 2021 6,229 2022 17,305 $ 36,927 |
6. Accrued Expenses (Tables)
6. Accrued Expenses (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Payables and Accruals [Abstract] | |
Schedule of accrued expenses | 2019 2018 Accrued payroll $ 19,502 $ 19,689 Accrued operating expenses 113,013 113,300 Deferred rent 14,357 – $ 146,872 $ 132,989 |
7. Income Taxes (Tables)
7. Income Taxes (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Reconciliation of income tax rates | 2019 2018 Tax benefit calculated at statutory rate 21.00% 24.25% Expense not deductible (1.83% ) (0.16% ) State tax, net of federal benefit – (0.45% ) Effect of rate change – (26.99% ) Changes to valuation allowance (19.17% ) 3.35% Provision for income taxes –% –% |
Schedule of deferred taxes | 2019 2018 Net non-current deferred tax assets: Net operating loss carry-forward $ 1,181,160 $ 1,098,314 Property and equipment 6,921 3,456 1,188,081 1,101,770 Net non-current deferred tax liabilities: Intangible assets 10,319 7,996 Net 1,177,762 1,093,774 Less valuation allowance (1,177,762 ) (1,093,774 ) Net deferred taxes $ – $ – |
8. Commitments, Contingencies_2
8. Commitments, Contingencies and Concentrations (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of minimum lease payments | Minimum future annual rental payments under non-cancelable operating leases having original terms in excess of one year are as follows: 2020 $ 123,144 2021 110,444 2022 96,016 2023 97,752 Thereafter 32,584 $ 459,940 |
10. Stock Option Plan (Tables)
10. Stock Option Plan (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of option activity | Shares Value of Weighted Weighted Outstanding - September 30, 2017 2,817,146 $ 317,561 $ 0.67 101 months Granted 895,000 119,736 0.27 113 months Exercised – – – – Canceled or expired 80,596 20,052 0.27 – Outstanding - September 30, 2018 3,361,538 417,245 0.58 101 months Granted 2,269,650 472,048 0.21 113 months Exercised – – – Canceled or expired 3,112,712 338,838 0.24 Outstanding - September 30, 2019 2,788,476 $ 550,455 $ 0.29 99 months Exercisable - September 30, 2019 2,707,209 $ 0.29 98 months |
1. Summary of Significant Acc_4
1. Summary of Significant Accounting Policies (Details - Amortization) | Sep. 30, 2019USD ($) |
Proprietary Content [Member] | |
Future amortization, 2020 | $ 65,638 |
Future amortization, 2021 | 65,638 |
Future amortization, 2022 | 65,638 |
Future amortization, 2023 | 65,636 |
Future amortization | 262,550 |
Noncompete Agreements [Member] | |
Future amortization, 2020 | 5,260 |
Future amortization | $ 5,260 |
1. Summary of Significant Acc_5
1. Summary of Significant Accounting Policies (Details - Goodwill) - USD ($) | Sep. 30, 2019 | Sep. 30, 2018 |
Accounting Policies [Abstract] | ||
Goodwill | $ 1,094,702 | $ 1,094,702 |
1. Summary of Significant Acc_6
1. Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Allowance for doubtful accounts | $ 0 | $ 21,876 |
Indefinite lived trade name | 0 | 69,300 |
Advertising and marketing expense | $ 131,529 | $ 266,930 |
Risk free interest rate minimum | 1.50% | 1.49% |
Risk free interest rate maximum | 2.89% | 2.55% |
Dividend yield | 0.00% | |
Expected life | 10 years | |
Volatility rate minimum | 25.32% | |
Volatility rate maximum | 34.05% | |
Weighted average number of shares outstanding | 37,825,239 | 35,830,228 |
Options [Member] | ||
Antidilutive shares excluded from computation of EPS | 2,788,476 | 3,361,538 |
Warrants [Member] | ||
Antidilutive shares excluded from computation of EPS | 25,000 | 200,000 |
Tax Coach Software [Member] | Trade Names [Member] | ||
Indefinite lived trade name | $ 0 | $ 69,300 |
Tax Coach Software [Member] | Customer Relationships [Member] | ||
Finite lived intangible assets | 44,900 | |
Amortization expense | 11,225 | 11,225 |
Accumulated amortization | 44,900 | 33,675 |
Tax Coach Software [Member] | Proprietary Content [Member] | ||
Finite lived intangible assets | 525,100 | |
Amortization expense | 65,638 | 65,638 |
Accumulated amortization | 262,550 | 196,912 |
Tax Coach Software [Member] | Noncompete Agreements [Member] | ||
Finite lived intangible assets | 26,300 | |
Amortization expense | 5,260 | 5,260 |
Accumulated amortization | $ 21,040 | $ 15,780 |
2. Property and Equipment (Deta
2. Property and Equipment (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Property and equipment, gross | $ 245,073 | $ 205,721 |
Accumulated depreciation and amortization | 105,082 | 67,435 |
Property and equipment, net | 139,991 | 138,286 |
Furniture, Fixtures and Equipment [Member] | ||
Property and equipment, gross | $ 93,073 | 53,271 |
Estimated service lives | 2 to 5 years | |
Internally Developed Software [Member] | ||
Property and equipment, gross | $ 152,000 | $ 152,000 |
Estimated service lives | 10 years |
2. Property and Equipment (De_2
2. Property and Equipment (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 37,647 | $ 31,899 |
3. Intellectual Property (Detai
3. Intellectual Property (Details) - Trademarks [Member] - USD ($) | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Trademarks, beginning balance | $ 48,940 | $ 30,085 |
Trademarks purchased | 4,230 | 18,855 |
Trademarks, ending balance | $ 53,170 | $ 48,940 |
4. Line of Credit (Details Narr
4. Line of Credit (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Line of credit, amount outstanding | $ 63,919 | $ 59,646 |
Wells Fargo [Member] | ||
Line of credit maximum amount | $ 67,500 | |
Line of credit interest rate | 9.50% |
5. Notes Payable (Details - Deb
5. Notes Payable (Details - Debt maturity) | Sep. 30, 2019USD ($) |
Debt Disclosure [Abstract] | |
Debt maturity 2020 | $ 13,393 |
Debt maturity 2021 | 6,229 |
Debt maturity 2022 | 17,305 |
Total debt | $ 36,927 |
5. Notes Payable (Details Narra
5. Notes Payable (Details Narrative) - USD ($) | Oct. 02, 2017 | Nov. 02, 2017 | Nov. 29, 2018 | Dec. 31, 2019 | Dec. 20, 2019 | Mar. 15, 2018 | Apr. 19, 2019 | Aug. 09, 2017 | Sep. 05, 2017 | Dec. 20, 2020 | Sep. 30, 2019 | Apr. 12, 2019 | Sep. 30, 2018 |
Elmer Fink [Member] | |||||||||||||
Debt issuance date | Aug. 9, 2017 | ||||||||||||
Debt face amount | $ 100,000 | ||||||||||||
Debt stated interest rate | 10.00% | ||||||||||||
Debt maturity date | Jul. 15, 2021 | ||||||||||||
Notes payable | $ 0 | $ 100,000 | |||||||||||
Mike and Terri Ashby [Member] | |||||||||||||
Debt issuance date | Aug. 9, 2017 | ||||||||||||
Debt face amount | $ 100,000 | ||||||||||||
Debt stated interest rate | 10.00% | ||||||||||||
Debt maturity date | Aug. 15, 2020 | ||||||||||||
Notes payable | 0 | 92,406 | |||||||||||
Heleon Investment Company [Member] | |||||||||||||
Debt issuance date | Sep. 5, 2017 | ||||||||||||
Debt face amount | $ 100,000 | ||||||||||||
Debt stated interest rate | 10.00% | ||||||||||||
Debt maturity date | Aug. 15, 2020 | ||||||||||||
Notes payable | 0 | 100,000 | |||||||||||
Heleon Investment Company [Member] | Subsequent Event [Member] | |||||||||||||
Debt stated interest rate | 15.00% | ||||||||||||
Debt maturity date | Dec. 31, 2020 | ||||||||||||
Bally [Member] | |||||||||||||
Debt issuance date | Oct. 2, 2017 | ||||||||||||
Debt face amount | $ 100,000 | ||||||||||||
Debt stated interest rate | 10.00% | ||||||||||||
Debt maturity date | Oct. 2, 2020 | ||||||||||||
Notes payable | 100,000 | 0 | |||||||||||
Bally [Member] | Subsequent Event [Member] | |||||||||||||
Debt stated interest rate | 15.00% | ||||||||||||
Debt maturity date | Feb. 2, 2020 | ||||||||||||
Frueh [Member] | |||||||||||||
Debt issuance date | Oct. 2, 2017 | ||||||||||||
Debt face amount | $ 100,000 | ||||||||||||
Debt stated interest rate | 10.00% | ||||||||||||
Debt maturity date | Oct. 20, 2020 | ||||||||||||
Notes payable | $ 100,000 | 0 | 100,000 | ||||||||||
Dade [Member] | |||||||||||||
Debt issuance date | Nov. 2, 2017 | ||||||||||||
Debt face amount | $ 340,000 | ||||||||||||
Debt stated interest rate | 10.00% | ||||||||||||
Debt maturity date | Oct. 20, 2020 | ||||||||||||
Notes payable | 0 | 340,000 | |||||||||||
Dade [Member] | Subsequent Event [Member] | |||||||||||||
Debt stated interest rate | 15.00% | ||||||||||||
Debt maturity date | Feb. 20, 2020 | ||||||||||||
Janssen [Member] | |||||||||||||
Debt issuance date | Mar. 15, 2018 | ||||||||||||
Debt face amount | $ 200,000 | ||||||||||||
Debt stated interest rate | 10.00% | ||||||||||||
Debt maturity date | Feb. 15, 2021 | ||||||||||||
Notes payable | 0 | $ 200,000 | |||||||||||
Janssen [Member] | Subsequent Event [Member] | |||||||||||||
Debt stated interest rate | 15.00% | ||||||||||||
Debt maturity date | Feb. 15, 2020 | ||||||||||||
Knight Capital [Member] | |||||||||||||
Debt face amount | $ 155,000 | ||||||||||||
Debt stated interest rate | 0.00% | ||||||||||||
Debt maturity date | Jul. 11, 2019 | ||||||||||||
Notes payable | 0 | ||||||||||||
Charles O'Banon [Member] | |||||||||||||
Debt face amount | $ 32,205 | ||||||||||||
Debt stated interest rate | 6.00% | ||||||||||||
Debt maturity date | Apr. 30, 2022 | ||||||||||||
Notes payable | 29,401 | ||||||||||||
John Pollock [Member] | |||||||||||||
Debt face amount | $ 15,000 | ||||||||||||
Debt stated interest rate | 2.76% | ||||||||||||
Notes payable | $ 7,526 |
6. Accrued Expenses (Details)
6. Accrued Expenses (Details) - USD ($) | Sep. 30, 2019 | Sep. 30, 2018 |
Payables and Accruals [Abstract] | ||
Accrued payroll | $ 19,502 | $ 19,689 |
Accrued operating expenses | 113,013 | 113,300 |
Deferred rent | 14,357 | 0 |
Total accrued expenses | $ 146,872 | $ 132,989 |
7. Income Taxes (Details - Tax
7. Income Taxes (Details - Tax rates) | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||
Tax benefit calculated at statutory rate | 21.00% | 24.25% |
Expense not deductible | (1.83%) | (0.16%) |
State tax, net of federal benefit | 0.00% | (0.45%) |
Effect of rate change | 0.00% | (26.99%) |
Changes to valuation allowance | (19.17%) | (3.35%) |
Provision for income taxes | 0.00% | 0.00% |
7. Income Taxes (Details - Defe
7. Income Taxes (Details - Deferred taxes) - USD ($) | Sep. 30, 2019 | Sep. 30, 2018 |
Net non-current deferred tax assets: | ||
Net operating loss carry-forward | $ 1,181,160 | $ 1,098,314 |
Property and equipment | 6,921 | 3,456 |
Total non-current deferred tax assets | 1,188,081 | 1,101,770 |
Net non-current deferred tax liabilities: | ||
Intangible assets | 10,319 | 7,996 |
Deferred tax assets less deferred tax liabilities | 1,177,762 | 1,093,774 |
Less valuation allowance | (1,177,762) | (1,093,774) |
Net deferred taxes | $ 0 | $ 0 |
7. Income Taxes (Details Narrat
7. Income Taxes (Details Narrative) | 12 Months Ended |
Sep. 30, 2019USD ($) | |
Income Tax Disclosure [Abstract] | |
Net operating loss carryover | $ 5,624,574 |
NOL beginning expiration date | Dec. 31, 2035 |
8. Commitments, Contingencies_3
8. Commitments, Contingencies and Concentrations (Details) | Sep. 30, 2019USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Future lease commitment, 2020 | $ 123,144 |
Future lease commitment, 2021 | 110,444 |
Future lease commitment, 2022 | 96,016 |
Future lease commitment, 2023 | 97,752 |
Future lease commitment, thereafter | 32,584 |
Future lease commitment | $ 459,940 |
8. Commitments, Contingencies_4
8. Commitments, Contingencies and Concentrations (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Rent expense | $ 135,041 | $ 118,126 |
9. Stockholders' Equity (Detail
9. Stockholders' Equity (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Stock issued for cash, value | $ 100,000 | |
Common Stock | ||
Stock issued for cash, shares | 0 | 100,000 |
Stock issued for cash, value | $ 0 | $ 100,000 |
10. Stock Option Plan (Details)
10. Stock Option Plan (Details) - Options [Member] - USD ($) | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Number of Options | ||
Options outstanding, beginning balance | 3,361,538 | 2,817,146 |
Options granted | 2,269,650 | 895,000 |
Options exercised | 0 | 0 |
Options cancelled or expired | 3,112,712 | 80,596 |
Options outstanding, ending balance | 2,778,476 | 3,361,538 |
Options exercisable | 2,707,209 | |
Value of Shares Under Option | ||
Options outstanding, beginning balance | $ 417,245 | $ 317,561 |
Options granted | 472,048 | 119,736 |
Options cancelled or expired | 338,838 | 20,052 |
Options outstanding, ending balance | $ 550,455 | $ 417,245 |
Weighted average exercise price | ||
Weighted average exercise price, options outstanding, beginning balance | $ 0.58 | $ 0.67 |
Weighted average exercise price, options granted | 0.21 | 0.27 |
Weighted average exercise price, options cancelled or expired | 0.24 | 0.27 |
Weighted average exercise price, options outstanding, ending balance | 0.29 | $ 0.58 |
Weighted average exercise price, options exercisable | $ 0.29 | |
Weighted average remaining contractual life | ||
Weighted average remaining contractual life, options granted | 113 months | 113 months |
Weighted average remaining contractual life, options outstanding | 99 months | 101 months |
Weighted average remaining contractual life, options exercisable | 98 months |
10. Stock Option Plan (Details
10. Stock Option Plan (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Share based compensation | $ 364,814 | $ 206,484 |
Unamortized share-based compensation expense | $ 12,871 | |
Unamortized share-based compensation expense recognition period | 1 year 10 months 3 days | |
2015 Stock Option Plan [Member] | ||
Maximum shares allowed under plan | 9,000,000 | |
2016 Stock Option Plan [Member] | ||
Maximum shares allowed under plan | 20,000,000 |
11. Related Party Transactions
11. Related Party Transactions (Details Narrative) - USD ($) | 6 Months Ended | 12 Months Ended | |
Apr. 12, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | |
Accounts receivable - related party | $ 0 | $ 1,791 | |
Majority Stockholder [Member] | |||
Accounts receivable - related party | 0 | 1,791 | |
Management fees | 152,500 | 203,000 | |
Related party TMN Acquisition [Member] | |||
Salaries and wages | 258,000 | $ 403,160 | |
John Pollock [Member] | |||
Debt issuance date | Apr. 12, 2019 | ||
Debt stated interest rate | 2.76% | ||
Note payable related party | $ 7,526 |