Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Jun. 30, 2017 | Jun. 21, 2018 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Vape Holdings, Inc. | |
Entity Central Index Key | 1,455,819 | |
Amendment Flag | false | |
Trading Symbol | VAPE | |
Current Fiscal Year End Date | --09-30 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2017 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,017 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 1,000,000,000 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) | Jun. 30, 2017 | Sep. 30, 2016 |
Current assets: | ||
Cash | $ 13,125 | |
Accounts receivable, net | 2,010 | 2,010 |
Inventory | 18,254 | |
Other current assets | 14,836 | 8,219 |
Total current assets | 29,971 | 28,483 |
TOTAL ASSETS | 29,971 | 28,483 |
Current liabilities: | ||
Accounts payable | 397,660 | 473,654 |
Accrued expenses | 949,391 | 555,994 |
Related party convertible notes payable | 200,000 | 300,000 |
Convertible notes payable, net of unamortized discount of $105,000 and $119,680, respectively | 906,431 | 537,291 |
Related party notes payable | 15,000 | 15,000 |
Settlement liability | 281,618 | 422,000 |
Derivative liabilities | 1,716,439 | 2,755,544 |
Total current liabilities | 4,466,539 | 5,059,483 |
Long term liabilities: | ||
Convertible notes payable, long-term, net of unamortized discount of $0 and $0, respectively | 41,121 | |
Total liabilities | 4,466,539 | 5,100,604 |
Commitments and contingencies | ||
Stockholders' deficit: | ||
Preferred stock, $0.00001 par value - 100,000,000 authorized; 500,000 outstanding at March 31, 2017 and September 30, 2016 | ||
Common stock, $0.00001 par value - authorized 1,000,000,000 shares; 666,027,781 issued at June 30, 2017, 666,587,156 outstanding at June 30, 2017 and 588,837,978 issued at September 30, 2016, 588,397,353 outstanding at September 30, 2016 | 6,665 | 5,883 |
Additional paid-in capital | 31,038,705 | 30,319,265 |
Treasury stock, 1,025,625 shares at June 30, 2017 and September 30, 2016 | (372,601) | (372,601) |
Accumulated deficit | (35,109,337) | (35,024,668) |
Total stockholders' deficit | (4,436,568) | (5,072,121) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ 29,971 | $ 28,483 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) (Unaudited) - USD ($) | Jun. 30, 2017 | Sep. 30, 2016 |
Statement of Financial Position [Abstract] | ||
Unamortized discount convertible notes payable, current | $ 105,000 | $ 119,680 |
Unamortized discount convertible notes payable, non current | $ 0 | $ 0 |
Preferred stock, par value | $ 0.00001 | $ 0.00001 |
Preferred stock, shares authorized | 100,000,000 | 100,000,000 |
Preferred stock, shares outstanding | 500,000 | 500,000 |
Common stock, par value | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued | 666,027,781 | 588,837,978 |
Common stock, shares outstanding | 666,587,156 | 588,397,353 |
Treasury stock, shares | 1,025,625 | 1,025,625 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | ||
Income Statement [Abstract] | |||||
Revenue | $ 24,291 | $ 156,514 | $ 109,051 | $ 890,742 | |
Cost of revenue | 9,513 | 385,705 | 83,308 | 1,040,420 | |
Gross profit (loss) | 14,778 | (229,191) | 25,743 | (149,678) | |
Operating expenses: | |||||
Sales and marketing | [1] | 22,617 | 84,246 | 85,805 | 342,618 |
Research and development | 950 | 47,648 | |||
General and administrative | [2] | 218,663 | 280,470 | 486,169 | 841,319 |
Total operating expenses | 241,280 | 365,666 | 571,974 | 1,231,585 | |
Operating loss | (226,502) | (594,857) | (546,231) | (1,381,263) | |
Other income (expense): | |||||
Interest expense | (69,175) | (337,707) | (211,274) | (1,887,152) | |
Interest expense - related party | (3,506) | (4,776) | (13,061) | (13,792) | |
Change in derivative liabilities | 537,550 | 3,099,805 | 685,897 | 554,885 | |
Total other income (expense), net | 464,869 | 2,757,322 | 461,562 | (1,346,059) | |
Income (loss) before provision for income taxes | 238,367 | 2,162,465 | (84,669) | (2,727,322) | |
Provision for income taxes | 800 | ||||
Net income (loss) | $ 238,367 | $ 2,162,465 | $ (84,669) | $ (2,728,122) | |
Net loss available to common shareholders: | |||||
Income (loss) per common share - basic | $ 0 | $ 0.01 | $ 0 | $ (0.01) | |
Income (loss) per common share - diluted | $ 0 | $ 0 | $ 0 | $ (0.01) | |
Weighted average shares - basic | 635,028,015 | 215,717,808 | 631,046,743 | 220,677,405 | |
Weighted average shares - diluted | 993,499,503 | 1,097,384,088 | 631,046,743 | 220,677,405 | |
[1] | Stock-based compensation was $0 and $0, and $0 and $34,800 for the three and nine months ended June 30, 2017 and 2016, respectively. | ||||
[2] | Stock-based compensation was $0 and $0, and $0 and $128,597 for the three and nine months ended June 30, 2017 and 2016, respectively. |
Consolidated Statements of Ope5
Consolidated Statements of Operations (Unaudited) (Parenthetical) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
General and administrative [Member] | ||||
Stock-based compensation | $ 0 | $ 0 | $ 0 | $ 128,597 |
Sales and marketing [Member] | ||||
Stock-based compensation | $ 0 | $ 0 | $ 0 | $ 34,800 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Cash flows from operating activities: | ||
Net loss | $ (84,669) | $ (2,728,122) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 106,967 | |
Accretion of debt discounts | 180,533 | 1,696,706 |
Fair value in excess of stock issued for conversion of notes payable and accrued interest | ||
Gain on change in derivative liabilities | (685,897) | (586,287) |
Forbearance and assignment settlements | 190,718 | |
Common stock issued for services | 31,689 | |
Stock-based compensation | 131,708 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | 57,999 | |
Inventory | 18,254 | 220,210 |
Other assets | (6,617) | 27,214 |
Accounts payable | 75,006 | 220,152 |
Accrued expenses | 253,015 | 128,903 |
Net cash used in operating activities | (250,375) | (502,143) |
Cash flows from investing activities: | ||
Capital expenditures | (43,101) | |
Net cash used in investing activities | (43,101) | |
Cash flows from financing activities: | ||
Net proceeds from issuances of common stock | ||
Net proceeds from issuance of convertible notes payable | 263,500 | 312,150 |
Net proceeds from issuances of related party convertible notes payable | 50,000 | |
Repayments on convertible notes payable | (85,400) | |
Net cash provided by financing activities | 263,500 | 276,750 |
Net change in cash | 13,125 | (268,494) |
Cash, beginning of period | 273,904 | |
Cash, end of period | 13,125 | 5,410 |
Cash paid during the period for: | ||
Interest | ||
Taxes | 800 | |
Non-cash investing and financing activities: | ||
Conversion of notes payable, accrued interest, and derivatives | 569,222 | 3,707,140 |
Issuance of common stock for settlement liability | $ 151,000 |
Description of Business and Sum
Description of Business and Summary of Significant Accounting Policies | 9 Months Ended |
Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BUSINESS Vape Holdings, Inc. (“VAPE,” the “Company,” “we,” “us,” “our,” “our company”) is a holding company with its primary focus in the manufacturing and distribution of healthy and sustainable vaporization products. The Company designs, markets and distributes ceramic vaporization products under a unique brand. The Company has introduced a nonporous, non-corrosive, chemically inert medical-grade ceramic vaporization element as a healthy, sustainable alternative to traditional titanium and quartz vaporization materials, as well as lower-grade ceramic found in traditional electronic cigarettes and vaporizers. This material can be used for a wide range of applications, including stand-alone vaporization products and “E-cigs.” Electronic cigarettes come in a variety of designs ranging from those that look vastly like traditional cigarettes, to larger vaporizer units which are capable of vaporizing liquid with varying viscosity. The process of vaporization is believed to eliminate the smoke, tar, ash, and other byproducts of traditional smoking by utilizing lower temperatures in a controlled electronic environment. HIVE CERAMICS HIVE Ceramics (“HIVE”) was the premier brand under the VAPE umbrella. HIVE outsource manufactures and distributes a proprietarily blended ceramic vaporization element for torched, electronic and portable vaporizers with countless design and product crossover capabilities in existing and emerging markets. HIVE is dedicated to bringing the healthiest and cleanest vaporization experience possible to the market. HIVE Ceramics saw a significant decrease in sales due to competition in the market and restricted operations. While sales channels are still open, without an infusion, the revenues are not large enough to support HIVE Ceramics outside of its existing product line. |
Accounting Policies and Basis o
Accounting Policies and Basis of Presentation | 9 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
ACCOUNTING POLICIES AND BASIS OF PRESENTATION | NOTE 2. ACCOUNTING POLICIES AND BASIS OF PRESENTATION GOING CONCERN VAPE’s consolidated financial statements reflect a net loss of $84,669 during the nine months ended June 30, 2017. As of June 30, 2017, we had cash of $13,125, a working capital deficit of $4,436,568, and an accumulated deficit of $35,109,337. In addition, the ongoing need to obtain financing to fund operations also raise substantial doubt about the ability of Vape to continue as a going concern. Management expects to obtain funding for the new operations for the foreseeable future; however, there are no assurances that the Company will obtain such funding. VAPE’s financial statements do not include any adjustments to reflect the possible effects on recoverability and classification of assets or the amounts and classification of liabilities that may result from the inability to continue as a going concern. See Note 8 for subsequent events regarding financing activities. BASIS OF PRESENTATION The accompanying unaudited interim consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the SEC. Certain information and disclosures normally included in the annual financial statements prepared in accordance with the accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, all adjustments and disclosures necessary for a fair presentation of these consolidated financial statements have been included. Such adjustments consist of normal recurring adjustments. The current results are not an indication of the full year. Fair-value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of June 30, 2017 and September 30, 2016. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash, prepaid expenses, accounts payable, accrued liabilities, and notes payable. Fair values for these items were assumed to approximate carrying values because of their short-term nature or they are payable on demand. The following table presents the Company’s fair value hierarchy for assets measured at fair value on a recurring basis at June 30, 2017: Level 1 Level 2 Level 3 Total Assets Cash and cash equivalents $ 13,125 $ - $ - $ 13,125 Total assets measured at fair value $ 13,125 $ - $ - $ 13,125 Liabilities Derivative instruments $ - $ 1,716,439 $ - $ 1,716,439 Total liabilities measured at fair value $ - $ 1,716,439 $ - $ 1,716,439 The following table presents the Company’s fair value hierarchy for assets measured at fair value on a recurring basis at September 30, 2016: Level 1 Level 2 Level 3 Total Assets Cash and cash equivalents $ - $ - $ - $ - Total assets measured at fair value $ - $ - $ - $ - Liabilities Derivative instruments $ - $ 2,755,544 $ - $ 2,755,544 Total liabilities measured at fair value $ - $ 2,755,544 $ - $ 2,755,544 EARNINGS (LOSS) PER COMMON SHARE The following is a summary of outstanding securities which have been included in the calculation of diluted net income per share and reconciliation of net income to net income available to common stock holders for the three months ended June 30, 2017 and 2016: For the Three Months Ended For the Three Months Ended 2017 2016 Weighted average common shares outstanding used in calculating basic earnings per share 635,028,015 215,717,808 Effect of preferred stock 500,000 500,000 Effect of convertible notes payable 357,971,489 881,166,280 Weighted average common and common equivalent shares used in calculating diluted earnings per share 993,499,503 1,097,384,088 Net income as reported $ 238,367 $ 2,162,465 Add - interest on convertible notes payable 69,175 337,707 Net income available to common stockholders $ 307,542 $ 2,500,171 The following is a summary of outstanding securities that would have been included in the calculation of diluted shares outstanding since the exercise prices did not exceed the average market value of the Company’s common stock had the Company generated net income for the nine months ended June 30, 2017 and 2016: For the Nine Months Ended For the Nine Months Ended June 30, June 30, 2017 2016 Series A Preferred stock 500,000 500,000 Common stock warrants - 1,184,726 Convertible notes 357,971,489 631,560,394 358,471,489 633,245,120 The Company does not have sufficient shares to accommodate the convertible notes. RECENT ACCOUNTING PRONOUNCEMENTS In May 2014, the FASB issued Accounting Standards Update No. 2014-09, “Revenue from Contracts with Customers”, which supersedes most of the current revenue recognition requirements. The core principle of the new guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for these goods or services. New disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers are also required. This guidance is effective for the Company in the first quarter of fiscal year 2018 and early application is not permitted. Entities must adopt the new guidance using one of two retrospective application methods. The Company is currently evaluating the standard but does not expect it to have a material impact on our financial position, results of operations or cash flows. The Financial Accounting Standards Board issues Accounting Standard Updates (“ASUs”) to amend the authoritative literature in Accounting Standards Codification (“ASC”). There have been a number of ASUs to date that amend the original text of ASC. The Company believes those issued to date either (i) provide supplemental guidance, (ii) are technical corrections, (iii) are not applicable to the Company or (iv) are not expected to have a significant impact on the Company. AMENDMENT We have amended the previous three and nine months ended June 30, 2016 in this Form 10-Q to correctly account for the following non-cash transactions: In August 2015, the Company entered into convertible notes without conversion floors resulting in an unlimited potential of shares to be issued. Accordingly, we adjusted the consolidated financial statements to recognize the embedded conversion feature of the instruments. On August 13, 2015 and August 26, 2015, the convertible notes due to Redwood and Typenex, respectively, were amended which removed the fixed conversion floors per common share creating a potentially unlimited number of shares to be issued on the date of the amendment. Accordingly, we amended this Form 10-Q to account for the embedded conversion features as derivative financial instruments at fair value upon their original issuance dates. This increased the loss on debt extinguishments and interest expense previously recorded, as well as the derivative liabilities at fair value. The following was the effect on the previously reported consolidated financial statements. As As Restated June 30, Change June 30, LIABILITIES AND STOCKHOLDERS’ DEFICIT Total current liabilities $ 2,032,366 $ 414,726 $ 2,447,092 Total liabilities $ 2,366,199 $ 224,309 $ 2,590,508 Total stockholders’ deficit $ (2,116,505 ) $ (224,309 ) $ (2,340,814 ) TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT $ 249,694 $ - $ 249,694 As Previously Reported Three Months Ended Change As Restated Three Months Ended Interest expense $ (408,419 ) $ 70,712 $ (337,707 ) Gain from the effects of derivative liabilities $ 2,579,283 $ 657,049 $ 3,236,332 Net income $ 1,434,703 $ 727,762 $ 2,162,465 Net loss available to common shareholders Income per common share - basic $ 0.01 $ 0.01 Income per common share - diluted $ 0.00 $ 0.00 As Previously Reported Nine Months Ended Change As Restated Nine Months Ended Interest expense $ (1,727,304 ) $ (159,848 ) $ (1,887,152 ) Gain from the effects of derivative liabilities $ 452,425 $ 1,297,483 $ 1,749,908 Net loss $ (3,865,758 ) $ 1,137,636 $ (2,728,122 ) Net loss available to common shareholders Loss per common share - basic $ (0.02 ) $ (0.01 ) Loss per common share - diluted $ (0.02 ) $ (0.01 ) |
Accrued Expenses
Accrued Expenses | 9 Months Ended |
Jun. 30, 2017 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES | NOTE 3. ACCRUED EXPENSES The following is a summary of accrued expenses as of June 30, 2017 and September 30, 2016: June 30, September 30, Accrued interest $ 203,513 $ 183,390 Accrued interest - related party 56,223 43,162 Accrued wages and taxes 685,087 324,086 Other 4,568 5,356 $ 949,391 $ 555,994 As of June 30, 2017, $25,000 for Kyle Tracey, $16,667 for Joe Andreae, $73,742 for Mike Cook, $168,881 for Allan Viernes, $170,548 for Benjamin Beaulieu, $66,333 for Alex Viernes and $65,000 for Justin Braune are recorded in accrued wages. |
Convertible Notes Payable
Convertible Notes Payable | 9 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
CONVERTIBLE NOTES PAYABLE | NOTE 4. CONVERTIBLE NOTES PAYABLE At June 30, 2017, convertible notes payable consisted of the following: Counterparty Principal Amount Unamortized Discount Carrying Value Accrued Interest Derivative Liability Interest Expense GHS Investments $ 457,265 $ - $ 457,265 $ 142,854 $ 975,134 $ 122,227 Adar Bays 187,500 - 187,500 36,417 190,926 11,375 JMJ Financial 171,666 - 171,666 23,174 224,802 16,605 Odyssey Research 90,000 - 90,000 - 146,241 15,000 Illiad Research and Trading 105,000 105,000 - 1,068 179,336 46,067 $ 1,011,431 $ 105,000 $ 906,431 $ 203,513 $ 1,716,439 $ 211,274 At September 30, 2016, convertible notes payable consisted of the following: Counterparty Principal Amount Unamortized Discount Carrying Value Accrued Interest Derivative Liability Interest Expense GHS Investments $ 248,926 $ 88,075 $ 160,852 $ 124,872 $ 1,255,774 $ 1,323,000 Adar Bays 187,500 - 187,500 25,042 610,117 153,174 JMJ Financial 171,666 16,605 155,060 23,174 578,288 211,790 Union - - - - - 90,909 LG Capital - - - - - 91,017 Oddyssey Research 90,000 15,000 75,000 - 311,365 75,341 $ 698,092 $ 119,680 $ 578,412 $ 173,088 $ 2,755,544 $ 1,945,231 Securities Purchase Agreement with Typenex Co-Investment, LLC On November 1, 2016, the Company closed a Securities Purchase Agreement (the “Typenex Agreement”) with Typenex. Pursuant to the Typenex Agreement, Typenex purchased a Convertible Promissory Note from the Company in the original principal amount of up to $1,413,000 (the “Typenex Note”), at an interest rate of ten percent (10%) per annum. The Typenex Note is unsecured. The principal amount of the Typenex Note included an original issue discount of $128,000 and a transaction fee of $5,000. The investment from Typenex is scheduled to occur in a series of sixteen (16) tranches, represented each by a separate Secured Investor Promissory Note (the “Tranche Notes”) in varying amounts. The first Tranche Note of $40,000 is memorialized in Secured Promissory Note #1, the funding of which occurred on or immediately after the execution of the Typenex Agreement. Each Tranche Note, or any part of it, is convertible into fully paid and non-assessable $0.00001 par value common stock of the Company. The Conversion Price is as described in the Typenex Agreement and is based on at least a 45% discount to the trading price of the Company’s common stock. As a part of the Typenex Agreement, the Company agreed to use its best efforts to cause its authorized but unissued stock to be increased in order for the Company to create a reserve sufficient to meet its conversion obligations under the Typenex Note. The Company is in the process of taking steps in order to increase its authorized but unissued stock to meet its obligations. There is no guarantee that Typenex will fund the remainder of the Typenex Note and in fact it is within Typenex’s sole and absolute discretion whether it ultimately funds Tranche Notes #2- #12. However, in order to secure Typenex’s performance of its obligations under the Typenex Note, as well as any subsequent Tranche Notes, Typenex agreed to pledge a 40% membership interest in Typenex Medical, LLC, an Illinois limited liability company. Should Typenex decide it won’t fund the remainder of the Tranche Notes, the Company’s operating results will suffer and its ability to remain a going concern will be jeopardized. Securities Purchase Agreement with GHS Investments, LLC On October 28, 2016, the Company closed a Securities Purchase Agreement (the “GHS Purchase Agreement”) with GHS. Pursuant to the GHS Purchase Agreement, GHS agreed to purchase and the Company agreed to sell up to $1,105,000 of convertible securities, in the form of a Convertible Promissory Note (the “GHS Note”), at an interest rate of ten percent (10%) per annum. The GHS Note is also attached as Exhibit 10.6 to the 12/27/16 Form 8K and is incorporated herein by this reference. The GHS Note included a ten percent (10%) original issuance discount (i.e., $100,000) and a $5,000 initial transaction fee, as defined in the GHS Purchase Agreement. Upon the closing of the GHS Purchase Agreement, GHS funded $40,000 to the Company (the “Initial Tranche”). Within 15 days of certain conditions being met, an additional $40,000 shall be disbursed by GHS to the Company, in its sole discretion (“Second Tranche”). Within 30 days from the Second Tranche’s issuance, so long as there are no defaults under the GHS Note, GHS in its discretion may fund an additional $50,000 to the Company every 30 days (“Subsequent Tranches”) until $1,000,000 has been funded to the Company. During the three and nine months ended June 30, 2017, GHS provided other tranches of $0 and $263,500. The principal sum and corresponding interest due to GHS shall be prorated based on the consideration actually paid by GHS to the Company in accordance with the GHS Purchase Agreement. Each GHS Note, or any part of it, is convertible into fully paid and non-assessable $0.00001 par value common stock of the Company. The Conversion Price is as described in the GHS Purchase Agreement and is based on at least a 45% discount to the trading price of the Company’s common stock. As a part of the GHS Purchase Agreement, the Company agreed to use its best efforts to cause its authorized but unissued stock to be increased in order for the Company to create a reserve sufficient to meet its conversion obligations. There is no guarantee that GHS will fund the remainder of the Subsequent Tranches and in fact it is within GHS’s sole and absolute discretion whether it ultimately funds the Subsequent Tranches. Should GHS decide it won’t fund the Subsequent Tranches, the Company’s operating results will suffer and its ability to remain a going concern will be jeopardized. During the three and nine months ended June 30, 2017, GHS converted $0 and $70,795 of principal and accrued interest into 36,398,894 shares of common stock. The following weighted average variables were used in the Black Scholes model for the derivative liabilities as of June 30, 2017 and September 30, 2016: Balance Sheet Date Stock Dividend Exercise Risk Free Volatility Average June 30, 2017 $ 0.003 - % $ 0.002 1.26 % 216 % 0.8 September 30, 2016 $ 0.004 - % $ 0.001 0.45 % 298 % 0.5 |
Related Party Debt
Related Party Debt | 9 Months Ended |
Jun. 30, 2017 | |
Related Party Transactions [Abstract] | |
RELATED PARTY DEBT | NOTE 5. RELATED PARTY DEBT Related Party Note Payable The Company had outstanding accounts payable balance to a related party (shareholder of the Company) in the amount of $15,000 as of September 30, 2013. This payable was converted into a note payable on December 7, 2013. The note payable bears interest of 6% per annum with a maturity date of December 1, 2016. As of June 30, 2017, there is $3,243 in accrued interest expense related to this note and the Company recorded $228 and $683 in interest expense related to this note during the three and nine months ended June 30, 2017, respectively. Related Party Convertible Notes Payable On December 10, 2015, the Company entered into two Secured Series B Preferred Stock Convertible Notes (the “Series B Notes”) for an aggregate principal of $300,000 including 1) $50,000 from Hive Ceramics, LLC in new capital to the Company and 2) an amended and restated note for Hive Ceramics LLC in the amount of $250,000 for capital previously contributed which is soon to be due and payable. The Company failed to pay the Series B Note and the Amended Note on the Maturity Date (December 10, 2016). On December 15, 2016, the Company received a Notice of Default from counsel for Holder. Holder’s counsel demanded that all amounts owed under the Series B Note and the Amended Note be paid no later than December 20, 2016. The Company was unable to pay the demanded amounts by December 20, 2016. The Company believes that the Holder intends to execute on the security for the Series B Note and the Amended Note, namely, all of the assets of the Company. The Company is attempting to negotiate a resolution that does not include seizure of the Company’s assets however there is no guarantee that the Company will be able to work out a satisfactory resolution that does not include seizure of the Company’s assets. The Series B Notes accrue interest at eight percent (8%) per annum, mature one (1) year from issuance and are secured by all of the assets and property of the Company. Upon the election of the noteholder, the Series B Notes are convertible into newly created Series B Preferred Stock on a one-for-one (1:1) basis into shares of common stock of the Company at a fixed price per share of $0.01. Concurrently, the Company filed a Certificate of Designation with the Delaware Secretary of State on the Series B Preferred Stock which provides, in pertinent part, for the following rights and privileges: Authorized Amount of Series B Preferred Stock Voting Rights Rank pari passu On May 24, 2017, Illiad Research and Trading purchased $100,000 of the Series B convertible note payable for $125,000 with the reserve to convert into common stock at 58% of the lowest trading price of the previous thirteen (13) days. During the three and nine months ended June 30, 2017, $20,000 of the note and accrued interest were converted into 9,090,909 shares of common stock. See Note 4 for the principal, accrued interest, and interest expense related to the convertible note payable. During the three and nine months ended June 30, 2017, the Company recorded $3,533 and $12,633, respectively, of interest expense related to the Series B Notes. As of June 30, 2017, $200,000 of the Series B Notes along with $53,235 of accrued interest are outstanding. The Board of Directors authorized the designation of the Series B Preferred Stock pursuant to the authority of the Certificate of Incorporation, which confers said authority on the Board, and the issuance of the Series B Notes pursuant to a unanimous written consent of the Board dated December 10, 2015. The value ascribed to the Series B Notes were based on the fixed conversion price of the instruments into common stock and such no beneficial conversion feature was recorded. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Jun. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 6. COMMITMENTS AND CONTINGENCIES Settlement LiabilitIES On or about December 1, 2016, LG Capital Funding, LLC (“LG Capital”) obtained a judgment in the amount of $151,000. On or about December 10, 2016, the Company learned that LG Capital had placed a judgment lien on the Company’s operating account. The effect of the lien was that the Company’s operating account was frozen for an amount twice the judgment, or approximately $300,000. In or around December 2016 and continuing into early January 2017, GHS Investments, LLC (“GHS”) and LG Capital negotiated a transaction whereby GHS purchased the rights to the LG Capital Convertible Promissory Note and/or the right to collect on the LG Capital judgment for $161,000. As of September 30, 2016, the Company recorded a settlement liability of $151,000. On January 25, 2017, the Company issued 32,700,000 shares of common stock in satisfaction of the $151,000 settlement liability. On February 22, 2016, a convertible promissory note holder, Union Capital, LLC (“Union”), filed suit against the Company in the United States District Court for the Southern District of New York claiming breach of contract and conversion and seeking specific performance, permanent injunction, and damages arising from the Company’s rejection of certain conversion notices submitted by Union. The Company and Union subsequently settled this matter without further court proceedings for $170,000 in 2017. As of September 30, 2016, the Company recorded a settlement liability of $170,000. Justin Braune v. Vape Holdings, Inc. et.al. On May 16, 2017, Justin Braune, the Company’s former Chief Executive Officer filed a civil lawsuit in Los Angeles County Superior Court against the Company, Allan Viernes and Ben Beaulieu claiming breach of Mr. Braune’s employment contract, including, but not limited to failure to pay wages including deferred salary and commissions, and wages upon separation of employment and seeking damages arising from the Company’s breach. The Company and Justin Braune subsequently settled this matter without further court proceedings. On September 25, 2017, the parties participated in a full-day mediation and agreed to settle and resolve all matters including the lawsuit. On December 6, 2017, the parties entered into a Settlement Agreement whereby, the Allan Viernes and Ben Beaulieu 1) shall pay the sum of $15,000 by December 8, 2017 and the Company shall, 2) $40,000 on or before December 31, 2018, and 3) a convertible promissory note in the amount of $100,000.00. The convertible note and/or any shares issued in connection shall have a buyout cash value of no less than 125% of the cash value. The Company recorded a provision for loss of approximately $165,000 during the year ended September 30, 2016. |
Stockholders' Deficit
Stockholders' Deficit | 9 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
STOCKHOLDERS' DEFICIT | NOTE 7. STOCKHOLDERS’ DEFICIT COMMON STOCK On November 27, 2013, the Board and shareholders approved an increase in the authorized number of shares of common and preferred stock which may be issued by the Company to 1,000,000,000 shares and 100,000,000 shares, respectively. On December 3, 2013, the certificate of amendment was filed with the Secretary of State of Delaware to reflect the increase in authorized. PREFERRED STOCK On April 1, 2014, the Board formally approved the filing of a Preferred Stock Designation in connection with the commitment of 500,000 Series A Shares to HIVE on March 27, 2014 pursuant to its authority to issue blank check preferred stock as provided in the Company’s Certificate of Incorporation. Per the Certificate of Designation (the “Designation”), there are 100,000,000 shares of preferred stock authorized by the Company’s Certificate of Incorporation. The Company is authorized to issue 500,000 shares of Series A Shares pursuant to the Designation. As provided in the Designation (and as set forth in the HIVE Asset Purchase Agreement), Series A Shares are entitled to vote at a 15-1 ratio to Common Stock. Each share of preferred stock shall initially be convertible into one share of common stock (500,000 shares of common stock in the aggregate). On the two-year anniversary of the transaction of HIVE, the preferred stock conversion ratio shall be adjusted as follows: a one-time pro rata adjustment of up to ten-for-one (10-1) based upon the Company generating aggregate gross revenues over the two years of at least $8,000,000 (e.g. If the Company generates only $4,000,000 in aggregate gross revenues over the two-year period then the convertible ratio will adjust to 5-1). In no event will the issuance convert into more than 5,000,000 shares of common stock of the Company. On June 19, 2014, the Company formally issued the 500,000 Series A Shares to HIVE. The value ascribed to the Series A Shares was based on the historical costs of the assets acquired on March 27, 2014 from HIVE since the transfer of assets was made among entities under common control. On December 10, 2015, the Company approved the filing of a Preferred Stock Designation for up to 30,000,000 shares of Series B Preferred Stock. No Series B Preferred Stock are issued or outstanding. See discussion of designation of Series B Preferred Stock in Note 5. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Jun. 30, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 8. SUBSEQUENT EVENTS HIVE On April 28, 2018, the Company received a Notice of Default from Hive Ceramics and Kyle Tracey (the “Notice”) with respect to the Company’s breach of the Settlement Agreement and Release, dated as of April 28, 2017. The breaches consist of failure to pay $234,000 owed under the Tracey Note and failure to pay the $7,000 monthly payment obligations set forth in the Settlement Agreement, and $216,222 owed for failure to repay the Hive Note. The Company has not been able to resolve the defaults set forth in the Notice and Hive/Tracey have been informed the Company will hand over possession of the Hive Assets when arrangements can be made. Concurrently, the Company has proposed to enter into a Sales Representative Agreement whereby the Company may continue to sell Hive products for a period of 12 months on a non-exclusive basis in exchange for a commission on net sales. The HIVE/Tracey Settlement Agreement and Release documents are qualified in their entirety by reference to the full text of the agreements, copies of which were filed on Company’s Current Report on Form 8-K May 3, 2017 as Exhibit 10.1. Justin Braune On April 4, 2018, Braune filed an Ex Parte Application for an Order to Enter Judgement Against the Company for breach of the Settlement Agreement for failure to pay under the terms of the Settlement Agreement, which the Court granted in favor of Braune. The Ex Parte Application was denied. On May 23, 2018, Braune brought a different Ex Parte Application for Appointment of a Receiver. The hearing was held on May 23, 2018, during which the Company submitted papers opposing the appointment, and which ultimately resulted in the Court denying Braune’s application. The Ex Parte Application was denied. Common Stock Issued for Conversion of Debt Subsequent to June 30, 2017, the Company issued 332,972,219 shares of common stock for conversion of $468,208 of notes payable and accrued interest. As of the date of this filing the Company has 1,000,000,000 shares of common stock outstanding. |
Accounting Policies and Basis15
Accounting Policies and Basis of Presentation (Policies) | 9 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
GOING CONCERN | GOING CONCERN VAPE’s consolidated financial statements reflect a net loss of $84,669 during the nine months ended June 30, 2017. As of June 30, 2017, we had cash of $13,125, a working capital deficit of $4,436,568, and an accumulated deficit of $35,109,337. In addition, the ongoing need to obtain financing to fund operations also raise substantial doubt about the ability of Vape to continue as a going concern. Management expects to obtain funding for the new operations for the foreseeable future; however, there are no assurances that the Company will obtain such funding. VAPE’s financial statements do not include any adjustments to reflect the possible effects on recoverability and classification of assets or the amounts and classification of liabilities that may result from the inability to continue as a going concern. See Note 8 for subsequent events regarding financing activities. |
BASIS OF PRESENTATION | BASIS OF PRESENTATION The accompanying unaudited interim consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the SEC. Certain information and disclosures normally included in the annual financial statements prepared in accordance with the accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, all adjustments and disclosures necessary for a fair presentation of these consolidated financial statements have been included. Such adjustments consist of normal recurring adjustments. The current results are not an indication of the full year. Fair-value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of June 30, 2017 and September 30, 2016. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash, prepaid expenses, accounts payable, accrued liabilities, and notes payable. Fair values for these items were assumed to approximate carrying values because of their short-term nature or they are payable on demand. The following table presents the Company’s fair value hierarchy for assets measured at fair value on a recurring basis at June 30, 2017: Level 1 Level 2 Level 3 Total Assets Cash and cash equivalents $ 13,125 $ - $ - $ 13,125 Total assets measured at fair value $ 13,125 $ - $ - $ 13,125 Liabilities Derivative instruments $ - $ 1,716,439 $ - $ 1,716,439 Total liabilities measured at fair value $ - $ 1,716,439 $ - $ 1,716,439 The following table presents the Company’s fair value hierarchy for assets measured at fair value on a recurring basis at September 30, 2016: Level 1 Level 2 Level 3 Total Assets Cash and cash equivalents $ - $ - $ - $ - Total assets measured at fair value $ - $ - $ - $ - Liabilities Derivative instruments $ - $ 2,755,544 $ - $ 2,755,544 Total liabilities measured at fair value $ - $ 2,755,544 $ - $ 2,755,544 |
EARNINGS (LOSS) PER COMMON SHARE | EARNINGS (LOSS) PER COMMON SHARE The following is a summary of outstanding securities which have been included in the calculation of diluted net income per share and reconciliation of net income to net income available to common stock holders for the three months ended June 30, 2017 and 2016: For the Three Months Ended For the Three Months Ended 2017 2016 Weighted average common shares outstanding used in calculating basic earnings per share 635,028,015 215,717,808 Effect of preferred stock 500,000 500,000 Effect of convertible notes payable 357,971,489 881,166,280 Weighted average common and common equivalent shares used in calculating diluted earnings per share 993,499,503 1,097,384,088 Net income as reported $ 238,367 $ 2,162,465 Add - interest on convertible notes payable 69,175 337,707 Net income available to common stockholders $ 307,542 $ 2,500,171 The following is a summary of outstanding securities that would have been included in the calculation of diluted shares outstanding since the exercise prices did not exceed the average market value of the Company’s common stock had the Company generated net income for the nine months ended June 30, 2017 and 2016: For the Nine Months Ended For the Nine Months Ended June 30, June 30, 2017 2016 Series A Preferred stock 500,000 500,000 Common stock warrants - 1,184,726 Convertible notes 357,971,489 631,560,394 358,471,489 633,245,120 The Company does not have sufficient shares to accommodate the convertible notes. |
RECENT ACCOUNTING PRONOUNCEMENTS | RECENT ACCOUNTING PRONOUNCEMENTS In May 2014, the FASB issued Accounting Standards Update No. 2014-09, “Revenue from Contracts with Customers”, which supersedes most of the current revenue recognition requirements. The core principle of the new guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for these goods or services. New disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers are also required. This guidance is effective for the Company in the first quarter of fiscal year 2018 and early application is not permitted. Entities must adopt the new guidance using one of two retrospective application methods. The Company is currently evaluating the standard but does not expect it to have a material impact on our financial position, results of operations or cash flows. The Financial Accounting Standards Board issues Accounting Standard Updates (“ASUs”) to amend the authoritative literature in Accounting Standards Codification (“ASC”). There have been a number of ASUs to date that amend the original text of ASC. The Company believes those issued to date either (i) provide supplemental guidance, (ii) are technical corrections, (iii) are not applicable to the Company or (iv) are not expected to have a significant impact on the Company. |
AMENDMENT | AMENDMENT We have amended the previous three and nine months ended June 30, 2016 in this Form 10-Q to correctly account for the following non-cash transactions: In August 2015, the Company entered into convertible notes without conversion floors resulting in an unlimited potential of shares to be issued. Accordingly, we adjusted the consolidated financial statements to recognize the embedded conversion feature of the instruments. On August 13, 2015 and August 26, 2015, the convertible notes due to Redwood and Typenex, respectively, were amended which removed the fixed conversion floors per common share creating a potentially unlimited number of shares to be issued on the date of the amendment. Accordingly, we amended this Form 10-Q to account for the embedded conversion features as derivative financial instruments at fair value upon their original issuance dates. This increased the loss on debt extinguishments and interest expense previously recorded, as well as the derivative liabilities at fair value. The following was the effect on the previously reported consolidated financial statements. As As Restated June 30, Change June 30, LIABILITIES AND STOCKHOLDERS’ DEFICIT Total current liabilities $ 2,032,366 $ 414,726 $ 2,447,092 Total liabilities $ 2,366,199 $ 224,309 $ 2,590,508 Total stockholders’ deficit $ (2,116,505 ) $ (224,309 ) $ (2,340,814 ) TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT $ 249,694 $ - $ 249,694 As Previously Reported Three Months Ended Change As Restated Three Months Ended Interest expense $ (408,419 ) $ 70,712 $ (337,707 ) Gain from the effects of derivative liabilities $ 2,579,283 $ 657,049 $ 3,236,332 Net income $ 1,434,703 $ 727,762 $ 2,162,465 Net loss available to common shareholders Income per common share - basic $ 0.01 $ 0.01 Income per common share - diluted $ 0.00 $ 0.00 As Previously Reported Nine Months Ended Change As Restated Nine Months Ended Interest expense $ (1,727,304 ) $ (159,848 ) $ (1,887,152 ) Gain from the effects of derivative liabilities $ 452,425 $ 1,297,483 $ 1,749,908 Net loss $ (3,865,758 ) $ 1,137,636 $ (2,728,122 ) Net loss available to common shareholders Loss per common share - basic $ (0.02 ) $ (0.01 ) Loss per common share - diluted $ (0.02 ) $ (0.01 ) |
Accounting Policies and Basis16
Accounting Policies and Basis of Presentation (Tables) | 9 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Schedule of assets and liabilities measured at fair value on a recurring basis | The following table presents the Company’s fair value hierarchy for assets measured at fair value on a recurring basis at June 30, 2017: Level 1 Level 2 Level 3 Total Assets Cash and cash equivalents $ 13,125 $ - $ - $ 13,125 Total assets measured at fair value $ 13,125 $ - $ - $ 13,125 Liabilities Derivative instruments $ - $ 1,716,439 $ - $ 1,716,439 Total liabilities measured at fair value $ - $ 1,716,439 $ - $ 1,716,439 The following table presents the Company’s fair value hierarchy for assets measured at fair value on a recurring basis at September 30, 2016: Level 1 Level 2 Level 3 Total Assets Cash and cash equivalents $ - $ - $ - $ - Total assets measured at fair value $ - $ - $ - $ - Liabilities Derivative instruments $ - $ 2,755,544 $ - $ 2,755,544 Total liabilities measured at fair value $ - $ 2,755,544 $ - $ 2,755,544 |
Schedule of securities to be included in diluted net income calculation | For the Three Months Ended For the Three Months Ended 2017 2016 Weighted average common shares outstanding used in calculating basic earnings per share 635,028,015 215,717,808 Effect of preferred stock 500,000 500,000 Effect of convertible notes payable 357,971,489 881,166,280 Weighted average common and common equivalent shares used in calculating diluted earnings per share 993,499,503 1,097,384,088 Net income as reported $ 238,367 $ 2,162,465 Add - interest on convertible notes payable 69,175 337,707 Net income available to common stockholders $ 307,542 $ 2,500,171 |
Schedule of securities to be included in diluted share calculation | For the Nine Months Ended For the Nine Months Ended June 30, June 30, 2017 2016 Series A Preferred stock 500,000 500,000 Common stock warrants - 1,184,726 Convertible notes 357,971,489 631,560,394 358,471,489 633,245,120 |
Schedule of previously reported consolidated financial statements | As As Restated June 30, Change June 30, LIABILITIES AND STOCKHOLDERS’ DEFICIT Total current liabilities $ 2,032,366 $ 414,726 $ 2,447,092 Total liabilities $ 2,366,199 $ 224,309 $ 2,590,508 Total stockholders’ deficit $ (2,116,505 ) $ (224,309 ) $ (2,340,814 ) TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT $ 249,694 $ - $ 249,694 As Previously Reported Three Months Ended Change As Restated Three Months Ended Interest expense $ (408,419 ) $ 70,712 $ (337,707 ) Gain from the effects of derivative liabilities $ 2,579,283 $ 657,049 $ 3,236,332 Net income $ 1,434,703 $ 727,762 $ 2,162,465 Net loss available to common shareholders Income per common share - basic $ 0.01 $ 0.01 Income per common share - diluted $ 0.00 $ 0.00 As Previously Reported Nine Months Ended Change As Restated Nine Months Ended Interest expense $ (1,727,304 ) $ (159,848 ) $ (1,887,152 ) Gain from the effects of derivative liabilities $ 452,425 $ 1,297,483 $ 1,749,908 Net loss $ (3,865,758 ) $ 1,137,636 $ (2,728,122 ) Net loss available to common shareholders Loss per common share - basic $ (0.02 ) $ (0.01 ) Loss per common share - diluted $ (0.02 ) $ (0.01 ) |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 9 Months Ended |
Jun. 30, 2017 | |
Payables and Accruals [Abstract] | |
Summary of accrued expenses | June 30, September 30, Accrued interest $ 203,513 $ 183,390 Accrued interest - related party 56,223 43,162 Accrued wages and taxes 685,087 324,086 Other 4,568 5,356 $ 949,391 $ 555,994 |
Convertible Notes Payable (Tabl
Convertible Notes Payable (Tables) | 9 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of convertible notes payable | At June 30, 2017, convertible notes payable consisted of the following: Counterparty Principal Amount Unamortized Discount Carrying Value Accrued Interest Derivative Liability Interest Expense GHS Investments $ 457,265 $ - $ 457,265 $ 142,854 $ 975,134 $ 122,227 Adar Bays 187,500 - 187,500 36,417 190,926 11,375 JMJ Financial 171,666 - 171,666 23,174 224,802 16,605 Odyssey Research 90,000 - 90,000 - 146,241 15,000 Illiad Research and Trading 105,000 105,000 - 1,068 179,336 46,067 $ 1,011,431 $ 105,000 $ 906,431 $ 203,513 $ 1,716,439 $ 211,274 At September 30, 2016, convertible notes payable consisted of the following: Counterparty Principal Amount Unamortized Discount Carrying Value Accrued Interest Derivative Liability Interest Expense GHS Investments $ 248,926 $ 88,075 $ 160,852 $ 124,872 $ 1,255,774 $ 1,323,000 Adar Bays 187,500 - 187,500 25,042 610,117 153,174 JMJ Financial 171,666 16,605 155,060 23,174 578,288 211,790 Union - - - - - 90,909 LG Capital - - - - - 91,017 Oddyssey Research 90,000 15,000 75,000 - 311,365 75,341 $ 698,092 $ 119,680 $ 578,412 $ 173,088 $ 2,755,544 $ 1,945,231 |
Schedule of weighted average variables derivative liabilities | Balance Sheet Date Stock Price at Valuation Date Dividend Yield Exercise Price Risk Free Interest Rate Volatility Average Life June 30, 2017 $ 0.003 - % $ 0.002 1.26 % 216 % 0.8 September 30, 2016 $ 0.004 - % $ 0.001 0.45 % 298 % 0.5 |
Accounting Policies and Basis19
Accounting Policies and Basis of Presentation (Details) - Fair Value, Measurements, Recurring [Member] - USD ($) | Jun. 30, 2017 | Sep. 30, 2016 |
Assets | ||
Cash and cash equivalents | $ 13,125 | |
Total assets measured at fair value | 13,125 | |
Liabilities | ||
Derivative instruments | 1,716,439 | 2,755,544 |
Total liabilities measured at fair value | 1,716,439 | 2,755,544 |
Level 1 [Member] | ||
Assets | ||
Cash and cash equivalents | 13,125 | |
Total assets measured at fair value | 13,125 | |
Liabilities | ||
Derivative instruments | ||
Total liabilities measured at fair value | ||
Level 2 [Member] | ||
Assets | ||
Cash and cash equivalents | ||
Total assets measured at fair value | ||
Liabilities | ||
Derivative instruments | 1,716,439 | 2,755,544 |
Total liabilities measured at fair value | 1,716,439 | 2,755,544 |
Level 3 [Member] | ||
Assets | ||
Cash and cash equivalents | ||
Total assets measured at fair value | ||
Liabilities | ||
Derivative instruments | ||
Total liabilities measured at fair value |
Accounting Policies and Basis20
Accounting Policies and Basis of Presentation (Details 1) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Weighted average common shares outstanding used in calculating basic earnings per share | 635,028,015 | 215,717,808 | 631,046,743 | 220,677,405 |
Effect of preferred stock | 500,000 | 500,000 | ||
Effect of convertible notes payable | 357,971,489 | 881,166,280 | ||
Weighted average common and common equivalent shares used in calculating diluted earnings per share | 993,499,503 | 1,097,384,088 | 631,046,743 | 220,677,405 |
Net income as reported | $ 238,367 | $ 2,162,465 | $ (84,669) | $ (2,728,122) |
Add - interest on convertible notes payable | 69,175 | 337,707 | $ 211,274 | $ 1,887,152 |
Net income available to common stockholders | $ 307,542 | $ 2,500,171 |
Accounting Policies and Basis21
Accounting Policies and Basis of Presentation (Details 2) - shares | 9 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Diluted shares outstanding | 358,471,489 | 633,245,120 |
Series A Preferred Stock [Member] | ||
Diluted shares outstanding | 500,000 | 500,000 |
Common stock warrants [Member] | ||
Diluted shares outstanding | 1,184,726 | |
Convertible notes [Member] | ||
Diluted shares outstanding | 357,971,489 | 631,560,394 |
Accounting Policies and Basis22
Accounting Policies and Basis of Presentation (Details 3) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Sep. 30, 2016 | |
LIABILITIES AND STOCKHOLDERS' DEFICIT | |||||
Total current liabilities | $ 4,466,539 | $ 2,447,092 | $ 4,466,539 | $ 2,447,092 | $ 5,059,483 |
Total liabilities | 4,466,539 | 2,590,508 | 4,466,539 | 2,590,508 | 5,100,604 |
Total stockholders' deficit | (4,436,568) | (2,340,814) | (4,436,568) | (2,340,814) | (5,072,121) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | 29,971 | 249,694 | 29,971 | 249,694 | $ 28,483 |
Interest expense | (69,175) | (337,707) | (211,274) | (1,887,152) | |
Gain from the effects of derivative liabilities | 537,550 | 3,099,805 | 685,897 | 554,885 | |
Net income loss | $ 238,367 | $ 2,162,465 | $ (84,669) | $ (2,728,122) | |
Net loss available to common shareholders | |||||
Loss per common share - basic | $ 0 | $ 0.01 | $ 0 | $ (0.01) | |
Loss per common share - diluted | $ 0 | $ 0 | $ 0 | $ (0.01) | |
As Previously Reported [Member] | |||||
LIABILITIES AND STOCKHOLDERS' DEFICIT | |||||
Total current liabilities | $ 2,032,366 | $ 2,032,366 | |||
Total liabilities | 2,366,199 | 2,366,199 | |||
Total stockholders' deficit | (2,116,505) | (2,116,505) | |||
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | 249,694 | 249,694 | |||
Interest expense | (408,419) | (1,727,304) | |||
Gain from the effects of derivative liabilities | 2,579,283 | 452,425 | |||
Net income loss | $ 1,434,703 | $ (3,865,758) | |||
Net loss available to common shareholders | |||||
Loss per common share - basic | $ (0.01) | $ (0.02) | |||
Loss per common share - diluted | $ 0 | $ (0.02) | |||
Change [Member] | |||||
LIABILITIES AND STOCKHOLDERS' DEFICIT | |||||
Total current liabilities | $ 414,726 | $ 414,726 | |||
Total liabilities | 224,309 | 224,309 | |||
Total stockholders' deficit | (224,309) | (224,309) | |||
Interest expense | 70,712 | (159,848) | |||
Gain from the effects of derivative liabilities | 657,049 | 1,297,483 | |||
Net income loss | $ 727,762 | $ 1,137,636 |
Accounting Policies and Basis23
Accounting Policies and Basis of Presentation (Details Textual) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | |
Accounting Policies and Basis of Presentation (Textual) | ||||||
Net income | $ 238,367 | $ 2,162,465 | $ (84,669) | $ (2,728,122) | ||
Cash | 13,125 | $ 5,410 | 13,125 | $ 5,410 | $ 273,904 | |
Working capital deficit | 4,436,568 | 4,436,568 | ||||
Accumulated deficit | $ (35,109,337) | $ (35,109,337) | $ (35,024,668) |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) | Jun. 30, 2017 | Sep. 30, 2016 |
Payables and Accruals [Abstract] | ||
Accrued interest | $ 203,513 | $ 183,390 |
Accrued interest - related party | 56,223 | 43,162 |
Accrued wages and taxes | 685,087 | 324,086 |
Other | 4,568 | 5,356 |
Accrued expenses | $ 949,391 | $ 555,994 |
Accrued Expenses (Details Textu
Accrued Expenses (Details Textual) | 9 Months Ended |
Jun. 30, 2017USD ($) | |
Justin Brauneare [Member] | |
Accrued Expenses (Textual) | |
Accrued wages | $ 65,000 |
Allan Viernes [Member] | |
Accrued Expenses (Textual) | |
Accrued wages | 168,881 |
Benjamin Beaulieu [Member] | |
Accrued Expenses (Textual) | |
Accrued wages | 170,548 |
Kyle Tracey [Member] | |
Accrued Expenses (Textual) | |
Accrued wages | 25,000 |
Mike Cook [Member] | |
Accrued Expenses (Textual) | |
Accrued wages | 73,742 |
Alex Viernes [Member] | |
Accrued Expenses (Textual) | |
Accrued wages | 66,333 |
Joe Andreae [Member] | |
Accrued Expenses (Textual) | |
Accrued wages | $ 16,667 |
Convertible Notes Payable (Deta
Convertible Notes Payable (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Sep. 30, 2016 | |
Debt Instrument [Line Items] | ||
Principal Amount | $ 1,011,431 | $ 698,092 |
Unamortized Discount | 105,000 | 119,680 |
Carrying Value | 906,431 | 578,412 |
Accrued Interest | 203,513 | 173,088 |
Derivative Liability | 1,716,439 | 2,755,544 |
Interest Expense | 211,274 | 1,945,231 |
Odyssey Research [Member] | ||
Debt Instrument [Line Items] | ||
Principal Amount | 90,000 | 90,000 |
Unamortized Discount | 15,000 | |
Carrying Value | 90,000 | 75,000 |
Accrued Interest | ||
Derivative Liability | 146,241 | 311,365 |
Interest Expense | 15,000 | 75,341 |
JMJ Financial [Member] | ||
Debt Instrument [Line Items] | ||
Principal Amount | 171,666 | 171,666 |
Unamortized Discount | 16,605 | |
Carrying Value | 171,666 | 155,060 |
Accrued Interest | 23,174 | 23,174 |
Derivative Liability | 224,802 | 578,288 |
Interest Expense | 16,605 | 211,790 |
Adar Bays [Member] | ||
Debt Instrument [Line Items] | ||
Principal Amount | 187,500 | 187,500 |
Unamortized Discount | ||
Carrying Value | 187,500 | 187,500 |
Accrued Interest | 36,417 | 25,042 |
Derivative Liability | 190,926 | 610,117 |
Interest Expense | 11,375 | 153,174 |
GHS Investments [Member] | ||
Debt Instrument [Line Items] | ||
Principal Amount | 457,265 | 248,926 |
Unamortized Discount | 88,075 | |
Carrying Value | 457,265 | 160,852 |
Accrued Interest | 142,854 | 124,872 |
Derivative Liability | 975,134 | 1,255,774 |
Interest Expense | 122,227 | 1,323,000 |
Union [Member] | ||
Debt Instrument [Line Items] | ||
Principal Amount | ||
Unamortized Discount | ||
Carrying Value | ||
Accrued Interest | ||
Derivative Liability | ||
Interest Expense | 90,909 | |
LG Capital [Member] | ||
Debt Instrument [Line Items] | ||
Principal Amount | ||
Unamortized Discount | ||
Carrying Value | ||
Accrued Interest | ||
Derivative Liability | ||
Interest Expense | $ 91,017 | |
Illiad Research and Trading [Member] | ||
Debt Instrument [Line Items] | ||
Principal Amount | 105,000 | |
Unamortized Discount | 105,000 | |
Accrued Interest | 1,068 | |
Derivative Liability | 179,336 | |
Interest Expense | $ 46,067 |
Convertible Notes Payable (De27
Convertible Notes Payable (Details 1) - $ / shares | 9 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Sep. 30, 2016 | |
Debt Disclosure [Abstract] | ||
Stock Price at Valuation Date | $ 0.003 | $ 0.004 |
Dividend Yield | ||
Exercise Price | $ 0.002 | $ 0.001 |
Risk Free Interest Rate | 1.26% | 0.45% |
Volatility | 216.00% | 298.00% |
Average Life | 9 months 18 days | 6 months |
Convertible Notes Payable (De28
Convertible Notes Payable (Details Textual) - USD ($) | Nov. 01, 2016 | Oct. 28, 2016 | Jun. 30, 2017 | Jun. 30, 2017 | Sep. 30, 2016 |
Convertible Notes Payable (Textual) | |||||
Original issue discount | $ 105,000 | $ 105,000 | $ 119,680 | ||
Common stock, par value | $ 0.00001 | $ 0.00001 | $ 0.00001 | ||
Securities Purchase Agreement [Member] | Typenex Co-Investment, LLC [Member] | |||||
Convertible Notes Payable (Textual) | |||||
Original principal amount | $ 1,413,000 | ||||
Interest rate | 10.00% | ||||
Original issue discount | $ 128,000 | ||||
Transaction fee | $ 5,000 | ||||
Description of tranches | The investment from Typenex is scheduled to occur in a series of sixteen (16) tranches, represented each by a separate Secured Investor Promissory Note (the "Tranche Notes") in varying amounts. | ||||
First tranche note | $ 40,000 | ||||
Common stock, par value | $ 0.00001 | ||||
Description of conversion price | The Conversion Price is as described in the Typenex Agreement and is based on at least a 45% discount to the trading price of the Company's common stock. | ||||
Membership interest, percentage | 40.00% | ||||
Securities Purchase Agreement [Member] | GHS Investments, LLC [Member] | |||||
Convertible Notes Payable (Textual) | |||||
Issuance of convertible securities | $ 1,105,000 | ||||
Interest rate | 10.00% | ||||
Original issue discount | $ 100,000 | ||||
Transaction fee | $ 5,000 | ||||
Description of tranches | GHS Purchase Agreement, GHS funded $40,000 to the Company (the “Initial Tranche”). Within 15 days of certain conditions being met, an additional $40,000 shall be disbursed by GHS to the Company, in its sole discretion (“Second Tranche”). Within 30 days from the Second Tranche’s issuance, so long as there are no defaults under the GHS Note, GHS in its discretion may fund an additional $50,000 to the Company every 30 days (“Subsequent Tranches”) until $1,000,000 has been funded to the Company. During the three and nine months ended June 30, 2017, GHS provided other tranches of $0 and $263,500. | ||||
Common stock, par value | $ 0.00001 | ||||
Description of conversion price | The Conversion Price is as described in the GHS Purchase Agreement and is based on at least a 45% discount to the trading price of the Company's common stock. | ||||
Common stock issued on conversion | 36,398,894 | 36,398,894 | |||
Principal amount converts of common stock | $ 0 | $ 70,795 |
Related Party Debt (Details)
Related Party Debt (Details) - USD ($) | Dec. 10, 2015 | Dec. 07, 2013 | May 24, 2017 | Jun. 30, 2017 | Jun. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2013 |
Related Party Debt (Textual) | |||||||
Accrued interest | $ 203,513 | $ 203,513 | $ 183,390 | ||||
Interest expense related to notes payable | $ 3,533 | $ 12,633 | |||||
Preferred stock, shares authorized | 100,000,000 | 100,000,000 | 100,000,000 | ||||
Illiad Research and Trading [Member] | |||||||
Related Party Debt (Textual) | |||||||
Series B convertible note payable purchased | $ 100,000 | ||||||
Trading Price of Series B convertible note payable | 58.00% | ||||||
Note amount converts of common stock | $ 20,000 | $ 20,000 | |||||
Accrued interest converts of common stock | 9,090,909 | 9,090,909 | |||||
Series B Preferred Stock [Member] | |||||||
Related Party Debt (Textual) | |||||||
Accrued interest | $ 53,235 | $ 53,235 | |||||
Interest rate | 8.00% | ||||||
Term of convertible note | 1 year | ||||||
Common stock conversion basis | Series B Preferred Stock on a one-for-one (1:1) basis into shares of common stock of the Company at a fixed price per share of $0.01. | ||||||
Common stock fixed price per share | $ 0.01 | ||||||
Preferred stock, shares authorized | 30,000,000 | ||||||
Voting rights, description | Each share of Series B shall be entitled to five (5) votes for every one (1) vote entitled to each share of Common Stock. | ||||||
Aggregate principal amount | $ 300,000 | 200,000 | 200,000 | ||||
Equity investment by the investor, description | 1) $50,000 from Hive Ceramics, LLC in new capital to the Company and 2) an amended and restated note for Hive Ceramics LLC in the amount of $250,000 for capital previously contributed which is soon to be due and payable. | ||||||
Series B Preferred Stock [Member] | Illiad Research and Trading [Member] | |||||||
Related Party Debt (Textual) | |||||||
Series B convertible note payable purchased | $ 125,000 | ||||||
Shareholder [Member] | |||||||
Related Party Debt (Textual) | |||||||
Accounts payable, related parties | $ 15,000 | ||||||
Accrued interest | 3,243 | 3,243 | |||||
Interest expense related to notes payable | $ 228 | $ 683 | |||||
Interest rate | 6.00% | ||||||
Maturity date | Dec. 1, 2016 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | Dec. 06, 2017 | Dec. 10, 2016 | Feb. 22, 2016 | Jun. 30, 2017 | Sep. 30, 2016 | Jan. 25, 2017 | Dec. 01, 2016 |
Commitments and Contingencies (Textual) | |||||||
Recorded a settlement liability | $ 281,618 | $ 422,000 | |||||
Convertible promissory note | 41,121 | ||||||
Provision for loss | 165,000 | ||||||
LG Capital Funding [Member] | |||||||
Commitments and Contingencies (Textual) | |||||||
Gain on settlement | $ 300,000 | ||||||
Recorded a settlement liability | $ 151,000 | ||||||
Subsequent Events [Member] | |||||||
Commitments and Contingencies (Textual) | |||||||
Settlement agreement, description | The parties entered into a Settlement Agreement whereby, the Allan Viernes and Ben Beaulieu 1) shall pay the sum of $15,000 by December 8, 2017 and the Company shall, 2) $40,000 on or before December 31, 2018, and 3) a convertible promissory note in the amount of $100,000.00. The convertible note and/or any shares issued in connection shall have a buyout cash value of no less than 125% of the cash value. | ||||||
Convertible Promissory Note [Member] | LG Capital Funding [Member] | |||||||
Commitments and Contingencies (Textual) | |||||||
Recorded a settlement liability | 151,000 | ||||||
Right to collect on the LG Capital judgment amount | $ 161,000 | ||||||
Convertible Promissory Note [Member] | Union Capital, LLC [Member] | |||||||
Commitments and Contingencies (Textual) | |||||||
Recorded a settlement liability | $ 170,000 | $ 151,000 | |||||
Court proceedings amount | $ 170,000 | ||||||
Shares of common stock issued | 32,700,000 |
Stockholders' Deficit (Details)
Stockholders' Deficit (Details) - shares | Apr. 01, 2014 | Jun. 19, 2014 | Jun. 30, 2017 | Sep. 30, 2016 | Dec. 10, 2015 | Nov. 27, 2013 |
Stockholders' Deficit (Textual) | ||||||
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 | ||||
Preferred stock, shares authorized | 100,000,000 | 100,000,000 | ||||
Preferred Stock [Member] | ||||||
Stockholders' Deficit (Textual) | ||||||
Preferred stock, shares authorized | 100,000,000 | |||||
Convertible price, description | A one-time pro rata adjustment of up to ten-for-one (10-1) based upon the Company generating aggregate gross revenues over the two years of at least $8,000,000 (e.g. If the Company generates only $4,000,000 in aggregate gross revenues over the two-year period then the convertible ratio will adjust to 5-1). In no event will the issuance convert into more than 5,000,000 shares of common stock of the Company. | |||||
Description of asset purchase agreement ratio | Series A Shares are entitled to vote at a 15-1 ratio to Common Stock. | |||||
Common Stock [Member] | ||||||
Stockholders' Deficit (Textual) | ||||||
Common stock, shares authorized | 1,000,000,000 | |||||
Preferred stock, shares authorized | 100,000,000 | |||||
Series A Preferred Stock [Member] | ||||||
Stockholders' Deficit (Textual) | ||||||
Shares issued during period | 500,000 | 500,000 | ||||
Preferred stock, shares authorized | 500,000 | |||||
Series B Preferred Stock [Member] | ||||||
Stockholders' Deficit (Textual) | ||||||
Preferred stock, shares authorized | 30,000,000 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | 1 Months Ended | 9 Months Ended | |
Apr. 28, 2018 | Jun. 30, 2017 | Sep. 30, 2016 | |
Subsequent Events (Textual) | |||
Conversion of common stock shares issued | 332,972,219 | ||
Conversion of common stock amount | $ 468,208 | ||
Common stock, shares outstanding | 666,587,156 | 588,397,353 | |
Subsequent Event [Member] | |||
Subsequent Events (Textual) | |||
Settlement agreement, description | The Company's breach of the Settlement Agreement and Release, dated as of April 28, 2017. The beaches consist of failure to pay $234,000 owed under the Tracey Note and failure to pay the $7,000 monthly payment obligations set forth in the Settlement Agreement, and $216,222 owed for failure to repay the Hive Note. | ||
Conversion Debt [Member] | |||
Subsequent Events (Textual) | |||
Common stock, shares outstanding | 1,000,000,000 |