Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | |
Sep. 30, 2017 | Nov. 15, 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-K | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Period Focus | FY | |
Document Fiscal Year Focus | 2,017 | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Public Float | $ 2,500,000 | |
Entity Common Stock, Shares Outstanding | 1,000,000,000 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Sep. 30, 2017 | Sep. 30, 2016 |
Current assets: | ||
Cash | $ 5,360 | |
Accounts receivable, net | 2,010 | |
Inventory | 18,254 | |
Other current assets | 3,297 | 8,219 |
Total current assets | 8,657 | 28,483 |
TOTAL ASSETS | 8,657 | 28,483 |
Current liabilities: | ||
Accounts payable | 397,999 | 473,654 |
Accrued expenses | 1,060,023 | 555,994 |
Related party convertible notes payable | 200,000 | 300,000 |
Convertible notes payable, net of unamortized discounts of $88,449 and $119,680, respectively | 642,001 | 537,291 |
Related party notes payable | 15,000 | 15,000 |
Settlement liability | 100,000 | 422,000 |
Derivative liabilities | 1,405,728 | 2,755,544 |
Total current liabilities | 3,820,751 | 5,059,483 |
Long term liabilities: | ||
Convertible notes payable, long-term, net of unamortized discounts of $0 | 41,121 | |
Total liabilities | 3,820,751 | 5,100,604 |
Commitments and contingencies | ||
Stockholders' deficit: | ||
Common stock, $0.00001 par value - authorized 1,000,000,000 shares; 867,887,137 issued at September 30, 2017, 866,861,512 outstanding at September 30, 2017 and 589,422,978 issued at September 30, 2016, 588,397,353 outstanding at September 30, 2016 | 8,668 | 5,883 |
Additional paid-in capital | 32,903,267 | 30,319,265 |
Treasury stock, 1,025,625 shares at September 30, 2017 and 2016 | (372,601) | (372,601) |
Accumulated deficit | (36,351,428) | (35,024,668) |
Total stockholders' deficit | (3,812,094) | (5,072,121) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | 8,657 | 28,483 |
Series A Convertible Preferred stock | ||
Stockholders' deficit: | ||
Preferred stock, value | ||
Total stockholders' deficit | ||
Series B Convertible Preferred stock | ||
Stockholders' deficit: | ||
Preferred stock, value |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Sep. 30, 2017 | Sep. 30, 2016 |
Unamortized discounts convertible notes payable, current | $ 88,449 | $ 119,680 |
Unamortized discount convertible notes payable, non current | $ 0 | $ 0 |
Common stock, par value | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued | 867,887,137 | 589,422,978 |
Common stock, shares outstanding | 866,861,512 | 589,422,978 |
Treasury stock, shares | 1,025,625 | 1,025,625 |
Series A Convertible Preferred stock | ||
Preferred stock, par value | $ 0.00001 | $ 0.00001 |
Preferred stock, shares authorized | 90,000,000 | 90,000,000 |
Preferred stock, shares outstanding | 500,000 | 500,000 |
Series B Convertible Preferred stock | ||
Preferred stock, par value | $ 0.00001 | $ 0.00001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares outstanding | 0 | 0 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | ||
Income Statement [Abstract] | |||
Revenue | $ 128,696 | $ 890,514 | |
Cost of revenue | 100,033 | 1,112,168 | |
Gross profit | 28,663 | (221,654) | |
Operating expenses: | |||
Sales and marketing | [1] | 88,202 | 375,807 |
Research and development | 47,648 | ||
General and administrative | [2] | 515,173 | 1,028,736 |
Impairment of intangible assets | 123,150 | ||
Total operating expenses | 603,375 | 1,575,341 | |
Operating loss | (574,712) | (1,796,995) | |
Other income (expense): | |||
Interest expense | (549,860) | (1,945,231) | |
Interest expense - related party | (16,612) | (18,624) | |
Loss from effects of derivative liabilities | (185,576) | (2,507,067) | |
Gain on settlements , net | 175,769 | ||
Total other income (expense), net | (752,048) | (4,295,153) | |
Loss before provision for income taxes | (1,326,760) | (6,092,148) | |
Provision for income taxes | 1,800 | ||
Net loss | $ (1,326,760) | $ (6,093,948) | |
Net loss available to common shareholders: | |||
Loss per common share - basic | $ 0 | $ (0.02) | |
Loss per common share - diluted | $ 0 | $ (0.02) | |
Weighted average shares - basic | 685,124,688 | 380,654,922 | |
Weighted average shares - diluted | 685,124,688 | 380,654,922 | |
[1] | Stock-based compensation was $0 and $34,800 for the years ended September 30, 2017 and 2016, respectively. | ||
[2] | Stock-based compensation was $0 and $32,889 for the years ended September 30, 2017 and 2016, respectively. |
Consolidated Statements of Op_2
Consolidated Statements of Operations (Parenthetical) - USD ($) | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Sales and marketing [Member] | ||
Stock-based compensation | $ 0 | $ 34,800 |
General and administrative [Member] | ||
Stock-based compensation | $ 0 | $ 32,889 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Deficit - USD ($) | Series A Preferred Stock | Series B Preferred Stock | Common Stock [Member] | Additional Paid-in Capital | Accumulated Deficit | Treasury Stock | Total |
Balance at Sep. 30, 2015 | $ 192 | $ 25,814,829 | $ (28,930,720) | $ (367,531) | $ (3,483,230) | ||
Balance, Shares at Sep. 30, 2015 | 500,000 | 19,205,896 | |||||
Conversion of notes payable and accrued interest | $ 5,624 | 4,336,036 | 4,341,660 | ||||
Conversion of notes payable and accrued interest, Shares | 562,444,952 | ||||||
Conversion of unpaid wages | $ 41 | 95,667 | 95,708 | ||||
Conversion of unpaid wages, Shares | 4,138,888 | ||||||
Common stock issued for services | $ 14 | 31,675 | 31,689 | ||||
Common stock issued for services, Shares | 1,442,617 | ||||||
Common stock issued for bonuses | $ 15 | 35,985 | 36,000 | ||||
Common stock issued for bonuses, Shares | 1,500,000 | ||||||
Surrender of common stock | $ (3) | 5,073 | (5,070) | ||||
Surrender of common stock, Shares | (335,000) | ||||||
Net loss | (6,093,948) | (6,093,948) | |||||
Balance at Sep. 30, 2016 | $ 5,883 | 30,319,265 | (35,024,668) | (372,601) | (5,072,121) | ||
Balance, Shares at Sep. 30, 2016 | 500,000 | 588,397,353 | |||||
Conversion of notes payable and accrued interest | $ 2,458 | 822,568 | 825,026 | ||||
Conversion of notes payable and accrued interest, Shares | 245,764,159 | ||||||
Stock issued for settlement liability | $ 327 | 150,673 | 151,000 | ||||
Stock issued for settlement liability, Shares | 32,700,000 | ||||||
Discount on convertible note payable | 1,610,761 | 1,610,761 | |||||
Net loss | (1,326,760) | (1,326,760) | |||||
Balance at Sep. 30, 2017 | $ 8,668 | $ 32,903,267 | $ (36,351,428) | $ (372,601) | $ (3,812,094) | ||
Balance, Shares at Sep. 30, 2017 | 500,000 | 866,861,512 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash flows from operating activities: | ||
Net loss | $ (1,326,760) | $ (6,093,948) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Impairment on intangible assets | 123,150 | |
Depreciation | 161,427 | |
Accretion of debt discounts | 515,404 | 1,752,743 |
Loss from effects of derivative liabilities | 185,576 | 2,507,067 |
Gain on settlements, net | (175,769) | |
Common stock issued for services | 67,689 | |
Other | (223,798) | |
Changes in operating assets and liabilities: | ||
Accounts receivable | 2,010 | 70,391 |
Inventory | 18,254 | 240,762 |
Other assets | 4,922 | 32,460 |
Accounts payable | (75,655) | 357,716 |
Accrued expenses | 408,109 | 672,556 |
Net cash used in operating activities | (268,140) | (507,554) |
Cash flows from investing activities: | ||
Capital expenditures | (43,100) | |
Net cash used in investing activities | (43,100) | |
Cash flows from financing activities: | ||
Net proceeds from issuance of convertible notes payable | 273,500 | 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 | 273,500 | 276,750 |
Net change in cash | 5,360 | (273,904) |
Cash, beginning of period | 273,904 | |
Cash, end of period | 5,360 | |
Cash paid during the period for: | ||
Interest | ||
Taxes | 800 | |
Non-cash investing and financing activities: | ||
Conversion of notes payable and accrued interest | 825,026 | 4,341,660 |
Stock issued for settlement liability | 151,000 | |
Discount on convertible note payable | $ 1,610,761 |
Description of Business, Recent
Description of Business, Recent Acquisitions and Summary of Significant Accounting Policies | 12 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF BUSINESS, RECENT ACQUISITIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1. DESCRIPTION OF BUSINESS, RECENT ACQUISITIONS 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. See Note 5 for discussion of HIVE activity and litigation. BASIS OF PRESENTATION The accompanying consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) and Generally Accepted Accounting Principles. 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. CONSOLIDATION The consolidated financial statements include the assets, liabilities, and operating results of the Company and its wholly-owned subsidiaries, HIVE Ceramics, Revival Offset, and Nouveau after elimination of all material inter-company accounts and transactions. No segment information is presented as the assets, liabilities, and results of HIVE represent over 95% of the Company’s operations. USE OF ESTIMATES The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates and assumptions include losses for warrant contingencies and the valuation of conversion features in notes. FAIR VALUE OF FINANCIAL INSTRUMENTS Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants as of the measurement date. Applicable accounting guidance provides an established hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors that market participants would use in valuing the asset or liability. There are three levels of inputs that may be used to measure fair value: Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 - Include other inputs that are directly or indirectly observable in the marketplace. Level 3 - Unobservable inputs which are supported by little or no market activity. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Derivative instruments include the convertible notes payable derivative liability and warrant liability (Level 2). Derivative instruments are valued using standard calculations/models that are primarily based on observable inputs, including volatilities and interest rates. Therefore, derivative instruments are included in Level 2. Fair-value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of September 30, 2017 and 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 September 30, 2017: Level 1 Level 2 Level 3 Total Assets Cash and cash equivalents $ 5,360 $ - $ - $ 5,360 Total assets measured at fair value $ 5,360 $ - $ - $ 5,360 Liabilities Derivative instruments $ - $ 1,405,728 $ - $ 1,405,728 Total liabilities measured at fair value $ - $ 1,405,728 $ - $ 1,405,728 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 CONCENTRATION Credit Risk At times, the Company maintains cash balances at a financial institution in excess of the FDIC insurance limit. In addition, at we extend credit to customers in the normal course of business, after we evaluate the credit worthiness. The Company does not expect to take any unnecessary credit risks causing significant write-offs of potentially uncollectible accounts. Customers There were no customer concentrations during the years ended September 30, 2017 and 2016. Suppliers All purchases were from one (1) supplier during the years ended September 30, 2017 and 2016. REVENUE RECOGNITION The Company recognizes revenues from product sales when (a) persuasive evidence that an agreement exists; (b) the products have been delivered; (c) the prices are fixed and determinable and not subject to refund or adjustment; and (d) collection of the amounts due is reasonably assured. Revenue is recorded when sales orders are shipped. ALLOWANCE FOR DOUBTFUL ACCOUNTS The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of the Company’s customers to make required payments. The Company considers the following factors when determining if collection of required payments is reasonably assured: customer credit-worthiness; past transaction history with the customer; current economic industry trends; changes in customer payment terms; and bank credit-worthiness for letters of credit. If the Company has no previous experience with the customer, the Company may request financial information, including financial statements or other documents, to determine that the customer has the means of making payment. The Company may also obtain reports from various credit organizations to determine that the customer has a history of paying its creditors. If these factors do not indicate collection is reasonably assured, revenue is deferred as a reduction to accounts receivable until collection becomes reasonably assured, which is generally upon receipt of cash. If the financial condition of the Company’s customers was to deteriorate, adversely affecting their ability to make payments, additional allowances would be required. INVENTORY Inventory is valued at the lower of cost or market, as determined primarily by the average cost inventory method, and are stated using the first-in, first-out (FIFO) method. Management will record a provision for loss for obsolete or slow moving inventory to reduce carrying amounts to net realizable value. IMPAIRMENT OF LONG-LIVED AND PURCHASED INTANGIBLE ASSETS The Company has adopted Accounting Standards Codification (“ASC”) 350 “Intangibles - Goodwill and Other.” The Statement requires that long-lived assets and certain identifiable intangibles held and used by the Company be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Events relating to recoverability may include significant unfavorable changes in business conditions, recurring losses, or a forecasted inability to achieve break-even operating results over an extended period. The Company evaluates the recoverability of long-lived assets based upon forecasted undercounted cash flows. Should impairment in value be indicated, the carrying value of intangible assets will be adjusted, based on estimates of future discounted cash flows resulting from the use and ultimate disposition of the asset. ASC 350 also requires assets to be disposed of be reported at the lower of the carrying amount or the fair value less costs to sell. Long-lived assets, such as fixed assets and purchased intangibles subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of the asset is measured by comparison of its carrying amount to undiscounted future net cash flows the asset is expected to generate. If such assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the asset exceeds its fair market value. Estimates of expected future cash flows represent management’s best estimate based on currently available information and reasonable and supportable assumptions. Any impairment recognized is permanent and may not be restored. During the years ended September 30, 2017 and 2016, the Company recorded impairments on $0 and $123,150 of its trademarks, respectively, as its expected cash flows did not exceed its carrying amounts and none towards its trademarks as its expected future cash flows are in excess of their carrying amounts. RESEARCH AND DEVELOPMENT Research and development costs are expensed as incurred. The costs of materials and equipment that will be acquired or constructed for research and development activities, and that have alternative future uses, both in research and development, marketing or sales, will be classified as fixed assets and depreciated over their estimated useful lives. To date, research and development costs include the research and development expenses related to prototypes of the Company’s products. During the years ended September 30, 2017 and 2016, research and development costs were $0 and $47,648, respectively. CONVERTIBLE DEBT AND EMBEDDED DERIVATIVES The Company accounts for embedded conversion features (“ECF”s) in convertible notes in accordance with ASC 815. ASC 815 generally requires companies to bifurcate ECFs in convertible notes from their host instruments and to account for them as free standing derivative financial instruments. The Company has evaluated the terms and conditions of the convertible note under the guidance of ASC 815. The conversion features did not meet the definition of “indexed to a company’s own stock” provided for in ASC 815 since the conversion prices are adjustable based on the passage of time or certain events that are out of the Company’s control, including certain events of default. These convertible instruments have no explicit limit on the number of shares that the holder can convert into. When these ECF’s exist, we report the ECF as a derivative liability, at fair value under ASC 815 “Derivatives and Hedging”. The excess of fair value of the embedded conversion feature, together with the original issue discounts and issue costs over the face value of the debt, is recorded as an immediate charge in the accompanying statements of operations and cash flows. Each reporting period, the Company will compute the estimated fair value of derivatives and record changes to operations. The discounts are accreted over the term of the debt, which is generally nine months after the notes become convertible, using the effective interest method. We accounted for the ECFs in all of our convertible notes as derivative liabilities during the years presented. The Company estimates the fair values of derivative financial instruments using various techniques (and combinations thereof) that are considered to be consistent with objectively measuring fair values. In selecting the appropriate technique, consideration is given to, among other factors, the nature of the instrument, the market risks that it embodies and the expected means of settlement. For less complex derivative instruments, such as free-standing warrants, the Company generally uses the Black-Scholes option valuation technique because it embodies all of the requisite assumptions (including trading volatility, estimated terms and risk free rates) necessary to fair value these instruments. Estimating fair values of derivative financial instruments requires the development of significant and subjective estimates that may, and are likely to, change over the duration of the instrument with related changes in internal and external market factors. In addition, option-based techniques are highly volatile and sensitive to changes in the trading market price of our common stock, which has a high-historical volatility. Since derivative financial instruments are initially and subsequently carried at fair values, the Company’s operating results will reflect the volatility in these estimate and assumption changes. ASC 470-50, Extinguishments EARNINGS / LOSS PER COMMON SHARE Basic earnings per common share is computed by dividing net income available to common shareholders by the weighted-average number of common shares outstanding during the reporting period. Diluted earnings per common share is computed by dividing net income available to common shareholders by the combination of dilutive common share equivalents, comprised of shares issuable under the Company’s share-based compensation plans and the weighted-average number of common shares outstanding during the reporting period. Dilutive common share equivalents include the dilutive effect of in-the-money share equivalents, which are calculated, based on the average share price for each period using the treasury stock method. Under the treasury stock method, the exercise price of an award, if any, the amount of compensation cost, if any, for future service that the Company has not yet recognized, and the estimated tax benefits that would be recorded in paid-in capital, if any, when an award is settled are assumed to be used to repurchase shares in the current period. 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 years ended September 30, 2017 and 2016: For the For the September 30, September 30, 2017 2016 Series A Preferred stock 500,000 500,000 Convertible notes 131,612,863 878,368,698 132,112,863 878,868,698 The Company does not have sufficient shares to accommodate the series A preferred stock and convertible notes, thus, the amounts reflected above are those that bring total to the amount authorized of one billion. If all holders were to convert, the Company would have outstanding shares in excess of two billion as of September 30, 2017. 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. RISKS AND UNCERTAINTIES The Company has issued several convertible notes which are generally convertible after 180 days. The notes have conversion features that adjustable over time or in the event of certain events of default, many of which are out of the control of the Company’s management. The adjustment provisions do not explicitly limit the number of shares the notes are convertible into. Each of the Company’s convertible note holders is entitled to a “share reserve” per their agreements with the Company which entitle them to reserve a certain allotment of common stock out of the authorized but unissued common stock of the Company for future conversions of their notes. The Company is further obligated under the agreements to increase the Company’s authorized share count to accommodate for a sufficient amount of share reserves. Due to the declining market price of the Company’s common stock, the note holders have reserve claims in excess of the common stock authorized at this time. The inability of the Company to meet its share reserve obligations may be considered a technical violation of their agreements with the note holders. The Company’s ability to issue common stock other than those presently allocated to note holders is restricted during this time, since we have lost the ability to increase the share reserves due to the significantly increased outstanding held by convertible note holders and a shareholder vote is required to increase the authorized amount of shares the Company may issue. Further, the combination of limited capital and depleted share reserves have severely damaged the Company’s ability to fund operations or enable us to seek mergers or acquisitions. Also, see Note 2 Going Concern below. |
Going Concern
Going Concern | 12 Months Ended |
Sep. 30, 2017 | |
Going Concern [Abstract] | |
GOING CONCERN | NOTE 2. GOING CONCERN VAPE’s consolidated financial statements reflect a net loss of $1,326,760 during the year ended September 30, 2017. As of September 30, 2017, we had $5,360 of cash, a working capital deficit of $3,812,094, and an accumulated deficit of $36,351,428. 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 9 for subsequent events regarding financing activities. |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Sep. 30, 2017 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES | NOTE 3. ACCRUED EXPENSES The following is a summary of accrued expenses as of September 30, 2017 and 2016: September 30, September 30, Accrued interest $ 303,766 $ 183,390 Accrued interest - related party 59,774 43,162 Accrued wages and taxes 692,124 324,086 Other 4,359 5,356 $ 1,060,023 $ 555,994 As of September 30, 2017, $25,000 for Kyle Tracey, $16,667 for Joe Andreae, $63,742 for Mike Cook, $206,381 for Allan Viernes, $208,048 for Benjamin Beaulieu, $51,333 for Alex Viernes and $65,000 for Justin Braune are recorded in accrued wages. |
Convertible Notes Payable
Convertible Notes Payable | 12 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
CONVERTIBLE NOTES PAYABLE | NOTE 4. CONVERTIBLE NOTES PAYABLE At September 30, 2017, convertible notes payable consisted of the following: Counterparty Principal Amount Unamortized Discount Carrying Value Accrued Interest Derivative Liability Interest Expense GHS Investments $ 281,284 $ 25,949 $ 255,335 $ 240,341 $ 590,552 $ 180,356 Typenex 449,166 62,500 386,666 63,425 815,176 369,504 $ 730,450 $ 88,449 $ 642,001 $ 303,766 $ 1,405,728 $ 549,860 During the year ended September 30, 2017, Typenex acquired the Adar Bays, JMJ, and Odyssey Research convertible notes payable. 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 $ 135,174 $ 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 Odyssey Research 90,000 15,000 75,000 - 311,365 75,341 $ 698,092 $ 119,680 $ 578,412 $ 183,390 $ 2,755,544 $ 1,945,231 Redwood On February 10, 2015, the Company issued an unsecured convertible promissory note in the principal amount of $2,000,000 less an OID of $182,000 and transaction expenses of $10,000 for a total purchase price of $1,808,000. The stated rate interest on the note was 10%, per annum and a default rate 22%, per annum. In 2015, the Company received $800,000 under the note with an original issue discount of $148,600 and transaction costs for net proceeds of $651,395. The note was ultimately convertible into common stock at a discount of 55 % to the lowest trading price during the prior 15 days from the date of notice to convert, since certain events of default occurred. There was no explicit limit on the number of shares that the note is convertible into. During the year ended September 30, 2016, the note holder converted $498,150 of principal and accrued interest into 82,775,494 shares. On February 23, 2016, the note was assigned to GHS Investments (“GHS”), and $36,038 was added to the principal balance and immediately charged to interest expense. The assigned note balance and accrued interest of $93,614 was fully converted into 77,722,625 shares during the year ended September 30, 2016. Convertible Note Financings – August 2015 In 2015, the Company entered into a series of convertible note financings with an aggregate face value of $646,000 for net proceeds of $541,000. The stated rates of interest on the notes range from 8% to 12%, per annum; one note had a one-time charge of 12% on principal. The notes were subject to default rates of interest of up to 22%, per annum. In the event of default, the principal and accrued interest increased 150%. The notes were convertible into common stock based on a discount of 48% of lowest traded price due to events of default. There was no explicit limit on the number of shares that the note is convertible into. On March 7, 2016, an August 5, 2015 note with a face value of $112,000, together with accrued interest of $7,806 was assigned to GHS for a total of $119,706. Since the notes were not repaid at 180 days at a premium, the notes were convertible into common stock based on a discount of 45% of the lowest trading price over prior 20 days trading. The assigned note balance and accrued interest of $121,400 was fully converted into 48,223,268 shares during the year ended September 30, 2016. On March 21, 2016, an August 5, 2015 note with a face value of $105,000, together with accrued interest, was assigned to GHS for a total of $125,000. In the event the notes were not repaid at 180 days at a premium, the notes become convertible into common stock based on a discount of 45% of the lowest trading price over prior 20 days trading, subject to an additional 10% discount in certain events. In the event of default, the note increased 150% of the principal and accrued interest. During the years ended September 30, 2017 and 2016, the assigned note balance and accrued interest of $70,795 and $102,742, respectively, were converted into 36,398,894 and 144,242,185 shares, respectively. See Note 6 for two notes (Union and LG Capital) that resulted in settlements and are included in Settlement Liabilities in the accompanying balance sheet at September 30, 2016 aggregating $322,000. December 15, 2015 Convertible Note On December 15, 2015, an accredited investor provided the Company with $50,000 in additional proceeds under the same terms of their original convertible note with a term of two years in August 2015. A one-time interest charge of 12% and an original issue discount of 10%, aggregating $11,600, was added to the principal of the note. The total face amount of the note was $61,600 as of December 15, 2015. The note was subject to a default rate of interest of 18%, per annum. The note had default penalty of 150% principal and accrued interest. In the event the notes were not repaid at 180 days, the notes become convertible into common stock based on a discount of 60% of the lowest trading price over the 20 days prior to notice of conversion, subject to further adjustment of up to 15% in certain events. There is no explicit limit on the number of shares that the note is convertible into. Upon issuance of the note, the Company recorded the note as a derivative liability at fair value of $144,127, a derivative discount of $61,600, and the excess in fair value of $82,527 to loss from effects of derivatives during the year ended September 30, 2016. On November 1, 2017, the note, together with an August 5, 2015 note held by the same investor and accrued interest, was assigned to Typenex for a total of $128,100. During the years ended September 30, 2017 and 2016, no amounts of this note were converted into shares of common stock. GHS Convertible Note On April 19, 2016, the Company entered into convertible note financing transaction in the principal amount of $193,765, less fees and costs. The convertible note bears interest at the stated rate of 10%, per annum, subject to a default rate of 22%, per annum., and is convertible into common stock of the Company at any time after 180 days from issuance of the note at a conversion price per share equal to 55% of the lowest trading price in the 20 trading days immediately preceding the applicable conversion date. The conversion rate will decrease to 45% or 50% from 55% in certain conditions of default. The Company had the option to prepay the convertible note in the first 180 days from closing subject to a prepayment penalty of 150% of principal plus interest. The maturity date of the convertible note was January 19, 2017. The Company recorded the prepayment penalty of $91,011 as a discount to the convertible note and fully amortized it to interest expense during the year ended September 30, 2016. Due to default, the principal and accrued interest increased by 150%, and the Company recorded $99,556 to interest expense during the year ended September 30, 2017. As of September 30, 2017, the entire amount was included within unpaid principal and accrued interest. Upon issuance of the note, the Company recorded the note as a derivative liability at fair value of $566,977, a discount of $176,150, and the excess in fair value of the embedded conversion feature of $390,827 to loss from effects of derivatives during the year ended September 30, 2016. During the years ended September 30, 2017 and 2016, no amounts of this note were converted into shares of common stock. Odyssey Investment On December 10, 2015, an investor purchased $90,000 in common stock at a purchase price equal to 90% of the average of the closing prices of the common stock for the three (3) trading days immediately preceding the date that is six (6) months from the date of the agreement. As of June 7, 2016, the Company entered into an agreement for proceeds of $90,000 to be recorded as a convertible note payable with a conversion feature of 55% of the lowest trading price for the prior twenty (20) days. The Company recorded the ECF in the note as a derivative liability at estimated fair value of $118,722, a derivative discount of $90,000, and the excess in fair value of $28,722 to loss from effects of derivatives during the year ended September 30, 2016. 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 was 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 was memorialized in Secured Promissory Note #1, the funding of which occurred on or immediately after the execution of the Typenex Agreement; net proceeds of $235,500 were received during the year ended September 30, 2017. As a result of the funding, the Company recorded a loss from effects of derivative liabilities of $374,665 during the year ended September 30, 2017. The Company recorded a derivative discount of $235,500 against the convertible note payable. The remaining discount will be amortized to interest expense during the year ended September 30, 2018. Each Tranche Note, or any part of it, is convertible into common stock of the Company. The Conversion Price is as described in the Typenex Agreement and is based on at least a 45% discount, and up to 55% discount based on events of default, to the trading price during the prior 20 days of notice of intent to convert by the holder into 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 of approximately 450,000,000 shares as of September 30, 2017. The Company is in default and accrued interest at the default rate of twenty-two percent (22 %) per annum. Due to default, the principal and accrued interest increased by 115%. As a result of these default events, the Company recorded $118,187 to interest expense during the year ended September 30, 2017. As of September 30, 2017, the entire amount was included within unpaid principal and accrued interest. During the years ended September 30, 2017 and 2016, Typenex converted original and assigned notes totaling $126,826 and $265,860, respectively, of principal and accrued interest into 87,302,137 and 72,136,082 shares of common stock, respectively. 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 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 year ended September 30, 2017, GHS provided net proceeds of $38,000. As a result of the funding, the Company recorded a loss from effects of derivative liabilities of $363,010 during the year ended September 30, 2017. The Company recorded a derivative discount of $38,000 against the convertible note payable and amortized the entire amount to interest expense during the year ended September 30, 2017. 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 Tranche Note, or any part of it, is convertible into 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, and up to 55% discount based on events of default, to the lowest trading price during the prior 20 days of notice of intent to convert by the holder into 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 of approximately. The Company is in default and accrued interest at the default rate of twenty-two percent (20%) per annum. 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 years ended September 30, 2017 and 2016, GHS converted original and assigned notes totaling $214,846 and $549,583, respectively, of principal and accrued interest into 158,462,022 and 394,470,363 shares of common stock, respectively . The following weighted average variables were used in the Black Scholes model for all the derivative liabilities as of September 30, 2017 and 2016: Balance Sheet Date Stock Dividend Exercise Risk Free Volatility Average September 30, 2017 $ 0.002 - % $ 0.001 1.47 % 118 % 0.5 September 30, 2016 $ 0.004 - % $ 0.001 0.45 % 298 % 0.5 |
Related Party Debt
Related Party Debt | 12 Months Ended |
Sep. 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 September 30, 2017, there is $3,473 in accrued interest expense related to this note and the Company recorded $913 in interest expense related to this note during the years ended September 30, 2017 and 2016. 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, Iliad 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 year ended September 30, 2017, $126,826 of the note and accrued interest were converted into 87,302,137 shares of common stock. As a result of the purchase, the Company recorded a loss from effects of derivative liabilities of $93,325 during the year ended September 30, 2017. The Company recorded a derivative discount of $125,000 against the convertible note payable and amortized the entire amount to interest expense during the year ended September 30, 2017. During the year ended September 30, 2017, the Company recorded $15,700 of interest expense related to the Series B Notes. As of September 30, 2017, $200,000 of the Series B Notes along with $56,302 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. Subsequent to the year ended September 30, 2017, on April 28, 2018, subsequent to the period covered by this filing, 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. Legal Fees During the year ended September 30, 2017, the Company’s law firm waived fees of $122,000, which has been included as a reduction of general and administrative expenses. The law firm was a former shareholder of the Company. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Sep. 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. As a result, during the year ended September 30, 2016, the Company recorded a settlement liability of $151,000. In or around December 2016 and continuing into early January 2017, 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. On or about January 10, 2017, GHS and the Company entered into a Convertible Promissory Note in the amount of $161,000 which represented that amount paid by GHS to LG Capital. On January 25, 2017, the Company issued 32,700,000 shares of common stock in satisfaction of the debt. 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 settled this matter in July 2017 without further court proceedings for $170,000. On or about July 21, 2017, GHS purchased the settlement amount from Union, and entered into a Convertible Promissory Note with the Company in the amount of $170,000, which represented that amount paid by GHS to Union. During the year ended September 30, 2017, $144,051 of the note and accrued interest were converted into 122,063,128 shares of common stock. As a result of the purchase, the Company recorded a loss from effects of derivative liabilities of $221,260 during the year ended September 30, 2017. The Company recorded a derivative discount of $170,000 against the convertible note payable and amortized $144,051 to interest expense during the year ended September 30, 2017, resulting in an unamortized discount of $25,949 as of September 30, 2017. 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. 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 $100,000 during the year ended September 30, 2016, which remained recorded in settlement liabilities at both September 30, 2017 and 2016 year end. See Note 5 for discussion of Kyle Tracey and HIVE activity and litigation. |
Income Taxes
Income Taxes | 12 Months Ended |
Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 7. INCOME TAXES The following table presents the current and deferred income tax provision for federal and state income taxes for the years ended September 30, 2017 and 2016: 2017 2016 Current tax provision (benefit): Federal $ - $ - State - 1,800 Total - 1,800 Deferred tax provision (benefit) Federal (399,000 ) (790,000 ) State - - Valuation allowance 399,000 790,000 Total - - Total provision (benefit) for income taxes $ - $ 1,800 Reconciliations of the U.S. federal statutory rate to the actual tax rate for the years ended September 30, 2017 and 2016: 2017 2016 US federal statutory income tax rate (34.0 )% (34.0 )% State tax – (6.0 )% (6.0 )% (40.0 )% (40.0 )% Permanent differences: Stock-based compensation 0.00 % 0.03 % Amortization of debt discounts and non-cash interest 15.5 % 12.1 % Non-deductible gains and losses (5.6 )% 12.2 % Increase in valuation allowance 30.1 % 15.4 % Effective tax rate - % - % The Company incurred certain non-cash transactions which are not includable or deductible for income tax reporting purposes, such the change in fair value of warrant liability, certain stock-based compensation and accretion of debt discounts. The components of the Company’s deferred tax assets and (liabilities) for federal and state income taxes as of September 30, 2017 and 2016: As of September 30, 2017 2016 Current deferred tax assets (liabilities): Accrued expenses and other $ - $ - Total current deferred tax assets - - Non-current deferred tax assets and liabilities: Property, plant and equipment - - Net operating losses 1,856,000 1,457,000 Total non-current deferred tax assets 1,856,000 1,457,000 Valuation allowance (1,856,000 ) (1,457,000 ) Total non-current deferred tax assets - - Net deferred tax assets $ - $ - During the years ended September 30, 2017 and 2016 the valuation allowance decreased and increased by $399,000 and $790,000, respectively. At September 30, 2017, the Company had approximately $4,643,000 of federal and state gross net operating losses allocated to continuing operations available. The net operating loss carry forwards, if not utilized, will begin to expire in 2034 for federal purposes and 2032 for state purposes. Based on the available objective evidence, including the Company’s limited operating history and current liabilities in excess of assets, management believes it is more likely than not that some of the net deferred tax assets, specifically certain net operating losses, at September 30, 2017 will not be fully realizable. In addition, subsequent to year end significant shares were issued to shareholders in connection with the conversion of notes payable and a subscription for the purchase of common stock. In connection, with these issuances the Company determined that the historical NOLs have probably been impaired due to IRS Section 382 limitations. Due to the uncertainty surrounding realization of the remaining deferred tax assets, specifically the NOLs, the Company has provided a valuation allowance of $1,856,000 and $1,457,000 against its net deferred tax assets at September 30, 2017 and 2016, respectively. We will continue to monitor the recoverability of our net deferred tax assets. As of September 30, 2017 and 2016, the Company had a California minimum state tax liability of $800 per entity or approximately $2,400. The Company has not filed all United States Federal and State tax returns since 2014. The Company has identified the United States Federal tax returns as its “major” tax jurisdiction. The United States Federal return years since the last ones that were filed are still subject to tax examination by the United States Internal Revenue Service; however, we do not currently have any ongoing tax examinations. The Company is subject to examination by the California Franchise Tax Board from 2014 on and currently does not have any ongoing tax examinations. |
Stockholders' Deficit
Stockholders' Deficit | 12 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
STOCKHOLDERS' DEFICIT | NOTE 8. STOCKHOLDERS’ DEFICIT COMMON STOCK On November 15, 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. The Company’s conversions of debt and accrued interest include derivative liabilities associated with the embedded conversion features. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 9. SUBSEQUENT EVENTS HIVE See Note 5 for discussion of Kyle Tracey and HIVE activity subsequent to year end. Justin Braune On April 4, 2018, Braune filed an Ex Parte Application for an Order to Enter Judgment 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. There is a motion to appoint receiver scheduled for November 13, 2018. Common Stock Issued for Conversion of Debt Subsequent to September 30, 2017, the Company issued 132,697,863 shares of common stock for conversion of $217,331 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. |
Description of Business, Rece_2
Description of Business, Recent Acquisitions and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BUSINESS | 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. See Note 5 for discussion of HIVE activity and litigation. |
BASIS OF PRESENTATION | BASIS OF PRESENTATION The accompanying consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) and Generally Accepted Accounting Principles. 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. |
CONSOLIDATION | CONSOLIDATION The consolidated financial statements include the assets, liabilities, and operating results of the Company and its wholly-owned subsidiaries, HIVE Ceramics, Revival Offset, and Nouveau after elimination of all material inter-company accounts and transactions. No segment information is presented as the assets, liabilities, and results of HIVE represent over 95% of the Company’s operations. |
USE OF ESTIMATES | USE OF ESTIMATES The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates and assumptions include losses for warrant contingencies and the valuation of conversion features in notes. |
FAIR VALUE OF FINANCIAL INSTRUMENTS | FAIR VALUE OF FINANCIAL INSTRUMENTS Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants as of the measurement date. Applicable accounting guidance provides an established hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors that market participants would use in valuing the asset or liability. There are three levels of inputs that may be used to measure fair value: Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 - Include other inputs that are directly or indirectly observable in the marketplace. Level 3 - Unobservable inputs which are supported by little or no market activity. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Derivative instruments include the convertible notes payable derivative liability and warrant liability (Level 2). Derivative instruments are valued using standard calculations/models that are primarily based on observable inputs, including volatilities and interest rates. Therefore, derivative instruments are included in Level 2. Fair-value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of September 30, 2017 and 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 September 30, 2017: Level 1 Level 2 Level 3 Total Assets Cash and cash equivalents $ 5,360 $ - $ - $ 5,360 Total assets measured at fair value $ 5,360 $ - $ - $ 5,360 Liabilities Derivative instruments $ - $ 1,405,728 $ - $ 1,405,728 Total liabilities measured at fair value $ - $ 1,405,728 $ - $ 1,405,728 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 |
CONCENTRATION | CONCENTRATION Credit Risk At times, the Company maintains cash balances at a financial institution in excess of the FDIC insurance limit. In addition, at we extend credit to customers in the normal course of business, after we evaluate the credit worthiness. The Company does not expect to take any unnecessary credit risks causing significant write-offs of potentially uncollectible accounts. Customers There were no customer concentrations during the years ended September 30, 2017 and 2016. Suppliers All purchases were from one (1) supplier during the years ended September 30, 2017 and 2016. |
REVENUE RECOGNITION | REVENUE RECOGNITION The Company recognizes revenues from product sales when (a) persuasive evidence that an agreement exists; (b) the products have been delivered; (c) the prices are fixed and determinable and not subject to refund or adjustment; and (d) collection of the amounts due is reasonably assured. Revenue is recorded when sales orders are shipped. |
ALLOWANCE FOR DOUBTFUL ACCOUNTS | ALLOWANCE FOR DOUBTFUL ACCOUNTS The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of the Company’s customers to make required payments. The Company considers the following factors when determining if collection of required payments is reasonably assured: customer credit-worthiness; past transaction history with the customer; current economic industry trends; changes in customer payment terms; and bank credit-worthiness for letters of credit. If the Company has no previous experience with the customer, the Company may request financial information, including financial statements or other documents, to determine that the customer has the means of making payment. The Company may also obtain reports from various credit organizations to determine that the customer has a history of paying its creditors. If these factors do not indicate collection is reasonably assured, revenue is deferred as a reduction to accounts receivable until collection becomes reasonably assured, which is generally upon receipt of cash. If the financial condition of the Company’s customers was to deteriorate, adversely affecting their ability to make payments, additional allowances would be required. |
INVENTORY | INVENTORY Inventory is valued at the lower of cost or market, as determined primarily by the average cost inventory method, and are stated using the first-in, first-out (FIFO) method. Management will record a provision for loss for obsolete or slow moving inventory to reduce carrying amounts to net realizable value. |
IMPAIRMENT OF LONG-LIVED AND PURCHASED INTANGIBLE ASSETS | IMPAIRMENT OF LONG-LIVED AND PURCHASED INTANGIBLE ASSETS The Company has adopted Accounting Standards Codification (“ASC”) 350 “Intangibles - Goodwill and Other.” The Statement requires that long-lived assets and certain identifiable intangibles held and used by the Company be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Events relating to recoverability may include significant unfavorable changes in business conditions, recurring losses, or a forecasted inability to achieve break-even operating results over an extended period. The Company evaluates the recoverability of long-lived assets based upon forecasted undercounted cash flows. Should impairment in value be indicated, the carrying value of intangible assets will be adjusted, based on estimates of future discounted cash flows resulting from the use and ultimate disposition of the asset. ASC 350 also requires assets to be disposed of be reported at the lower of the carrying amount or the fair value less costs to sell. Long-lived assets, such as fixed assets and purchased intangibles subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of the asset is measured by comparison of its carrying amount to undiscounted future net cash flows the asset is expected to generate. If such assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the asset exceeds its fair market value. Estimates of expected future cash flows represent management’s best estimate based on currently available information and reasonable and supportable assumptions. Any impairment recognized is permanent and may not be restored. During the years ended September 30, 2017 and 2016, the Company recorded impairments on $0 and $123,150 of its trademarks, respectively, as its expected cash flows did not exceed its carrying amounts and none towards its trademarks as its expected future cash flows are in excess of their carrying amounts. |
RESEARCH AND DEVELOPMENT | RESEARCH AND DEVELOPMENT Research and development costs are expensed as incurred. The costs of materials and equipment that will be acquired or constructed for research and development activities, and that have alternative future uses, both in research and development, marketing or sales, will be classified as fixed assets and depreciated over their estimated useful lives. To date, research and development costs include the research and development expenses related to prototypes of the Company’s products. During the years ended September 30, 2017 and 2016, research and development costs were $0 and $47,648, respectively. |
CONVERTIBLE DEBT AND EMBEDDED DERIVATIVES | CONVERTIBLE DEBT AND EMBEDDED DERIVATIVES The Company accounts for embedded conversion features (“ECF”s) in convertible notes in accordance with ASC 815. ASC 815 generally requires companies to bifurcate ECFs in convertible notes from their host instruments and to account for them as free standing derivative financial instruments. The Company has evaluated the terms and conditions of the convertible note under the guidance of ASC 815. The conversion features did not meet the definition of “indexed to a company’s own stock” provided for in ASC 815 since the conversion prices are adjustable based on the passage of time or certain events that are out of the Company’s control, including certain events of default. These convertible instruments have no explicit limit on the number of shares that the holder can convert into. When these ECF’s exist, we report the ECF as a derivative liability, at fair value under ASC 815 “Derivatives and Hedging”. The excess of fair value of the embedded conversion feature, together with the original issue discounts and issue costs over the face value of the debt, is recorded as an immediate charge in the accompanying statements of operations and cash flows. Each reporting period, the Company will compute the estimated fair value of derivatives and record changes to operations. The discounts are accreted over the term of the debt, which is generally nine months after the notes become convertible, using the effective interest method. We accounted for the ECFs in all of our convertible notes as derivative liabilities during the years presented. The Company estimates the fair values of derivative financial instruments using various techniques (and combinations thereof) that are considered to be consistent with objectively measuring fair values. In selecting the appropriate technique, consideration is given to, among other factors, the nature of the instrument, the market risks that it embodies and the expected means of settlement. For less complex derivative instruments, such as free-standing warrants, the Company generally uses the Black-Scholes option valuation technique because it embodies all of the requisite assumptions (including trading volatility, estimated terms and risk free rates) necessary to fair value these instruments. Estimating fair values of derivative financial instruments requires the development of significant and subjective estimates that may, and are likely to, change over the duration of the instrument with related changes in internal and external market factors. In addition, option-based techniques are highly volatile and sensitive to changes in the trading market price of our common stock, which has a high-historical volatility. Since derivative financial instruments are initially and subsequently carried at fair values, the Company’s operating results will reflect the volatility in these estimate and assumption changes. ASC 470-50, Extinguishments |
EARNINGS / LOSS PER COMMON SHARE | EARNINGS / LOSS PER COMMON SHARE Basic earnings per common share is computed by dividing net income available to common shareholders by the weighted-average number of common shares outstanding during the reporting period. Diluted earnings per common share is computed by dividing net income available to common shareholders by the combination of dilutive common share equivalents, comprised of shares issuable under the Company’s share-based compensation plans and the weighted-average number of common shares outstanding during the reporting period. Dilutive common share equivalents include the dilutive effect of in-the-money share equivalents, which are calculated, based on the average share price for each period using the treasury stock method. Under the treasury stock method, the exercise price of an award, if any, the amount of compensation cost, if any, for future service that the Company has not yet recognized, and the estimated tax benefits that would be recorded in paid-in capital, if any, when an award is settled are assumed to be used to repurchase shares in the current period. 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 years ended September 30, 2017 and 2016: For the For the September 30, September 30, 2017 2016 Series A Preferred stock 500,000 500,000 Convertible notes 131,612,863 878,368,698 132,112,863 878,868,698 The Company does not have sufficient shares to accommodate the series A preferred stock and convertible notes, thus, the amounts reflected above are those that bring total to the amount authorized of one billion. If all holders were to convert, the Company would have outstanding shares in excess of two billion as of September 30, 2017. |
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. |
RISKS AND UNCERTAINTIES | RISKS AND UNCERTAINTIES The Company has issued several convertible notes which are generally convertible after 180 days. The notes have conversion features that adjustable over time or in the event of certain events of default, many of which are out of the control of the Company’s management. The adjustment provisions do not explicitly limit the number of shares the notes are convertible into. Each of the Company’s convertible note holders is entitled to a “share reserve” per their agreements with the Company which entitle them to reserve a certain allotment of common stock out of the authorized but unissued common stock of the Company for future conversions of their notes. The Company is further obligated under the agreements to increase the Company’s authorized share count to accommodate for a sufficient amount of share reserves. Due to the declining market price of the Company’s common stock, the note holders have reserve claims in excess of the common stock authorized at this time. The inability of the Company to meet its share reserve obligations may be considered a technical violation of their agreements with the note holders. The Company’s ability to issue common stock other than those presently allocated to note holders is restricted during this time, since we have lost the ability to increase the share reserves due to the significantly increased outstanding held by convertible note holders and a shareholder vote is required to increase the authorized amount of shares the Company may issue. Further, the combination of limited capital and depleted share reserves have severely damaged the Company’s ability to fund operations or enable us to seek mergers or acquisitions. Also, see Note 2 Going Concern below. |
Description of Business, Rece_3
Description of Business, Recent Acquisitions and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [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 September 30, 2017: Level 1 Level 2 Level 3 Total Assets Cash and cash equivalents $ 5,360 $ - $ - $ 5,360 Total assets measured at fair value $ 5,360 $ - $ - $ 5,360 Liabilities Derivative instruments $ - $ 1,405,728 $ - $ 1,405,728 Total liabilities measured at fair value $ - $ 1,405,728 $ - $ 1,405,728 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 outstanding securities to be included in calculation of diluted shares outstanding | For the For the September 30, September 30, 2017 2016 Series A Preferred stock 500,000 500,000 Convertible notes 131,612,863 878,368,698 132,112,863 878,868,698 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Sep. 30, 2017 | |
Payables and Accruals [Abstract] | |
Schedule of accrued expenses | September 30, September 30, Accrued interest $ 303,766 $ 183,390 Accrued interest - related party 59,774 43,162 Accrued wages and taxes 692,124 324,086 Other 4,359 5,356 $ 1,060,023 $ 555,994 |
Convertible Notes Payable (Tabl
Convertible Notes Payable (Tables) | 12 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of convertible notes payable | At September 30, 2017, convertible notes payable consisted of the following: Counterparty Principal Amount Unamortized Discount Carrying Value Accrued Interest Derivative Liability Interest Expense GHS Investments $ 281,284 $ 25,949 $ 255,335 $ 240,341 $ 590,552 $ 180,356 Typenex 449,166 62,500 386,666 63,425 815,176 369,504 $ 730,450 $ 88,449 $ 642,001 $ 303,766 $ 1,405,728 $ 549,860 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 $ 135,174 $ 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 Odyssey Research 90,000 15,000 75,000 - 311,365 75,341 $ 698,092 $ 119,680 $ 578,412 $ 183,390 $ 2,755,544 $ 1,945,231 |
Schedule of weighted average variables derivative liabilities | Balance Sheet Date Stock Dividend Exercise Risk Free Volatility Average September 30, 2017 $ 0.002 - % $ 0.001 1.47 % 118 % 0.5 September 30, 2016 $ 0.004 - % $ 0.001 0.45 % 298 % 0.5 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of current and deferred income tax provision for federal and state income taxes | 2017 2016 Current tax provision (benefit): Federal $ - $ - State - 1,800 Total - 1,800 Deferred tax provision (benefit) Federal (399,000 ) (790,000 ) State - - Valuation allowance 399,000 790,000 Total - - Total provision (benefit) for income taxes $ - $ 1,800 |
Schedule of reconciliations of the U.S. federal statutory rate to the actual tax rate | 2017 2016 US federal statutory income tax rate (34.0 )% (34.0 )% State tax – (6.0 )% (6.0 )% (40.0 )% (40.0 )% Permanent differences: Stock-based compensation 0.00 % 0.03 % Amortization of debt discounts and non-cash interest 15.5 % 12.1 % Non-deductible gains and losses (5.6 )% 12.2 % Increase in valuation allowance 30.1 % 15.4 % Effective tax rate - % - % |
Schedule of deferred tax assets and (liabilities) for federal and state income taxes | As of September 30, 2017 2016 Current deferred tax assets (liabilities): Accrued expenses and other $ - $ - Total current deferred tax assets - - Non-current deferred tax assets and liabilities: Property, plant and equipment - - Net operating losses 1,856,000 1,457,000 Total non-current deferred tax assets 1,856,000 1,457,000 Valuation allowance (1,856,000 ) (1,457,000 ) Total non-current deferred tax assets - - Net deferred tax assets $ - $ - |
Description of Business, Rece_4
Description of Business, Recent Acquisitions and Summary of Significant Accounting Policies (Details) - Fair value on a recurring basis [Member] - USD ($) | Sep. 30, 2017 | Sep. 30, 2016 |
Assets | ||
Cash and cash equivalents | $ 5,360 | |
Total assets measured at fair value | 5,360 | |
Liabilities | ||
Derivative instruments | 1,405,728 | 2,755,544 |
Total liabilities measured at fair value | 1,405,728 | 2,755,544 |
Level 1 [Member] | ||
Assets | ||
Cash and cash equivalents | 5,360 | |
Total assets measured at fair value | 5,360 | |
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 | 1,405,728 | 2,755,544 |
Total liabilities measured at fair value | 1,405,728 | 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 |
Description of Business, Rece_5
Description of Business, Recent Acquisitions and Summary of Significant Accounting Policies (Details 1) - shares | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Diluted shares outstanding | 132,112,863 | 878,868,698 |
Convertible notes [Member] | ||
Diluted shares outstanding | 131,612,863 | 878,368,698 |
Series A Preferred Stock [Member] | ||
Diluted shares outstanding | 500,000 | 500,000 |
Description of Business, Rece_6
Description of Business, Recent Acquisitions and Summary of Significant Accounting Policies (Details Textual) | 12 Months Ended | |
Sep. 30, 2017USD ($)Supliers / Number | Sep. 30, 2016USD ($)Supliers / Number | |
Description of Business, Recent Acquisitions and Summary of Significant Accounting Policies (Textual) | ||
Research and development costs | $ 47,648 | |
Option to pay convertible notes, description | The terms of the original note are significantly modified, defined as a greater than 10% change in expected cash flows.</p>" id="sjs-B5"><p style="margin: 0pt">The terms of the original note are significantly modified, defined as a greater than 10% change in expected cash flows.</p> | |
Number of suppliers | Supliers / Number | 1 | 1 |
Description of accommodate shares | The Company does not have sufficient shares to accommodate the series A preferred stock and convertible notes, thus, the amounts reflected above are those that bring total to the amount authorized of one billion. If all holders were to convert, the Company would have outstanding shares in excess of two billion as of September 30, 2017.<p></p></p>" id="sjs-B7"><p class="MsoNormal">The Company does not have sufficient shares to accommodate the series A preferred stock and convertible notes, thus, the amounts reflected above are those that bring total to the amount authorized of one billion. If all holders were to convert, the Company would have outstanding shares in excess of two billion as of September 30, 2017.<p></p></p> | |
Trademarks [Member] | ||
Description of Business, Recent Acquisitions and Summary of Significant Accounting Policies (Textual) | ||
Impairment charges | $ 0 | $ 123,150 |
Hive Ceramics [Member] | ||
Description of Business, Recent Acquisitions and Summary of Significant Accounting Policies (Textual) | ||
Description of segment information presented by consolidation | No segment information is presented as the assets, liabilities, and results of HIVE represent over 95% of the Companys operations. |
Going Concern (Details)
Going Concern (Details) - USD ($) | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2015 | |
Going Concern (Textual) | |||
Net loss | $ (1,326,760) | $ (6,093,948) | |
Cash | 5,360 | $ 273,904 | |
Working capital deficit | 3,812,094 | ||
Accumulated deficit | $ (36,351,428) | $ (35,024,668) |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) | Sep. 30, 2017 | Sep. 30, 2016 |
Payables and Accruals [Abstract] | ||
Accrued interest | $ 303,766 | $ 183,390 |
Accrued interest - related party | 59,774 | 43,162 |
Accrued wages and taxes | 692,124 | 324,086 |
Other | 4,359 | 5,356 |
Accrued expenses | $ 1,060,023 | $ 555,994 |
Accrued Expenses (Details Textu
Accrued Expenses (Details Textual) | 12 Months Ended |
Sep. 30, 2017USD ($) | |
Justin Braune [Member] | |
Accrued Expenses (Textual) | |
Accrued wages | $ 65,000 |
Allan Viernes [Member] | |
Accrued Expenses (Textual) | |
Accrued wages | 206,381 |
Alex Viernes [Member] | |
Accrued Expenses (Textual) | |
Accrued wages | 51,333 |
Benjamin Beaulieu [Member] | |
Accrued Expenses (Textual) | |
Accrued wages | 208,048 |
Kyle Tracey [Member] | |
Accrued Expenses (Textual) | |
Accrued wages | 25,000 |
Mike Cook [Member] | |
Accrued Expenses (Textual) | |
Accrued wages | 63,742 |
Joe Andreae [Member] | |
Accrued Expenses (Textual) | |
Accrued wages | $ 16,667 |
Convertible Notes Payable (Deta
Convertible Notes Payable (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Debt Instrument [Line Items] | ||
Principal Amount | $ 730,450 | $ 698,092 |
Unamortized Discount | 88,449 | 119,680 |
Carrying Value | 642,001 | 578,412 |
Accrued Interest | 303,766 | 183,390 |
Derivative Liability | 1,405,728 | 2,755,544 |
Interest Expense | 549,860 | 1,945,231 |
GHS Investments [Member] | ||
Debt Instrument [Line Items] | ||
Principal Amount | 281,284 | 248,926 |
Unamortized Discount | 25,949 | 88,075 |
Carrying Value | 255,335 | 160,852 |
Accrued Interest | 240,341 | 135,174 |
Derivative Liability | 590,552 | 1,255,774 |
Interest Expense | 180,356 | 1,323,000 |
Typenex [Member] | ||
Debt Instrument [Line Items] | ||
Principal Amount | 449,166 | |
Unamortized Discount | 62,500 | |
Carrying Value | 386,666 | |
Accrued Interest | 63,425 | |
Derivative Liability | 815,176 | |
Interest Expense | $ 369,504 | |
Adar Bays [Member] | ||
Debt Instrument [Line Items] | ||
Principal Amount | 187,500 | |
Unamortized Discount | ||
Carrying Value | 187,500 | |
Accrued Interest | 25,042 | |
Derivative Liability | 610,117 | |
Interest Expense | 153,174 | |
JMJ Financial [Member] | ||
Debt Instrument [Line Items] | ||
Principal Amount | 171,666 | |
Unamortized Discount | 16,605 | |
Carrying Value | 155,060 | |
Accrued Interest | 23,174 | |
Derivative Liability | 578,288 | |
Interest Expense | 211,790 | |
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 | |
Odyssey Research [Member] | ||
Debt Instrument [Line Items] | ||
Principal Amount | 90,000 | |
Unamortized Discount | 15,000 | |
Carrying Value | 75,000 | |
Accrued Interest | ||
Derivative Liability | 311,365 | |
Interest Expense | $ 75,341 |
Convertible Notes Payable (De_2
Convertible Notes Payable (Details 1) - $ / shares | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Debt Disclosure [Abstract] | ||
Stock Price at Valuation Date | $ 0.002 | $ 0.004 |
Dividend Yield | ||
Exercise Price | $ 0.001 | $ 0.001 |
Risk Free Interest Rate | 1.47% | 0.45% |
Volatility | 118.00% | 298.00% |
Average Life | 6 months | 6 months |
Convertible Notes Payable (De_3
Convertible Notes Payable (Details Textual) - USD ($) | Nov. 01, 2016 | Apr. 19, 2016 | Dec. 15, 2015 | Feb. 10, 2015 | Nov. 01, 2017 | Oct. 28, 2016 | Jun. 07, 2016 | Mar. 21, 2016 | Mar. 07, 2016 | Feb. 23, 2016 | Dec. 10, 2015 | Aug. 31, 2015 | Sep. 30, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2015 |
Convertible Notes Payable (Textual) | ||||||||||||||||
Original issue discount | $ 88,449 | $ 88,449 | $ 119,680 | |||||||||||||
Loss on debt extinguishment | 175,769 | |||||||||||||||
Interest expense | $ 549,860 | 1,945,231 | ||||||||||||||
Common stock converted shares | 132,697,863 | |||||||||||||||
Settlement liabilities | $ 100,000 | $ 100,000 | $ 422,000 | |||||||||||||
Typenex Co-Investment, LLC [Member] | ||||||||||||||||
Convertible Notes Payable (Textual) | ||||||||||||||||
Common stock issued on conversion | 87,302,137 | 72,136,082 | ||||||||||||||
Principal amount converts of common stock | $ 126,826 | $ 265,860 | ||||||||||||||
December 15, 2015 Convertible Note [Member] | ||||||||||||||||
Convertible Notes Payable (Textual) | ||||||||||||||||
Original principal amount | $ 193,765 | $ 11,600 | ||||||||||||||
Interest rate | 150.00% | |||||||||||||||
Original issue discount | $ 61,600 | |||||||||||||||
Convertible notes payable, description | An accredited investor provided the Company with $50,000 in additional proceeds under the same terms of their original convertible note with a term of two years in August 2015. A one-time interest charge of 12% and an original issue discount of 10%, aggregating $11,600, was added to the principal of the note. The total face amount of the note was $61,600 as of December 15, 2015. The note was subject to a default rate of interest of 18%, per annum. The note had default penalty of 150% principal and accrued interest. In the event the notes were not repaid at 180 days, the notes become convertible into common stock based on a discount of 60% of the lowest trading price over the 20 days prior to notice of conversion, subject to further adjustment of up to 15% in certain events. | |||||||||||||||
Description of conversion price | The Conversion Price is as described in the GHS Purchase Agreement and is based on at least a 45% discount, and up to 55% discount based on events of default, to the lowest trading price during the prior 20 days of notice of intent to convert by the holder into the Company’s common stock. | |||||||||||||||
Stated rates of interest | 55.00% | |||||||||||||||
Loss on the change in fair value of the derivative liability | $ 82,527 | |||||||||||||||
Fair value of derivative Liability | $ 144,127 | |||||||||||||||
Accrued Interest | $ 128,100 | |||||||||||||||
Received note | $ 235,500 | 235,500 | ||||||||||||||
Convertible Note Financings - August 2015 [Member] | ||||||||||||||||
Convertible Notes Payable (Textual) | ||||||||||||||||
Issuance of convertible securities | $ 105,000 | $ 112,000 | $ 646,000 | |||||||||||||
Original principal amount | $ 125,000 | $ 119,706 | $ 541,000 | |||||||||||||
Interest rate | 12.00% | |||||||||||||||
Convertible notes payable, description | In the event the notes were not repaid at 180 days at a premium, the notes become convertible into common stock based on a discount of 45% of the lowest trading price over prior 20 days trading, subject to an additional 10% discount in certain events. In the event of default, the note increased 150% of the principal and accrued interest. | Since the notes were not repaid at 180 days at a premium, the notes were convertible into common stock based on a discount of 45% of the lowest trading price over prior 20 days trading. | The notes were convertible into common stock based on a discount of 48% of lowest traded price due to events of default. | |||||||||||||
Stated rates of interest | 150.00% | |||||||||||||||
Accrued Interest | $ 7,806 | $ 121,400 | ||||||||||||||
Common stock converted shares | 48,223,268 | |||||||||||||||
Settlement liabilities | $ 322,000 | |||||||||||||||
Convertible Note Financings - August 2015 [Member] | Maximum [Member] | ||||||||||||||||
Convertible Notes Payable (Textual) | ||||||||||||||||
Stated rates of interest | 12.00% | |||||||||||||||
Convertible Note Financings - August 2015 [Member] | Minimum [Member] | ||||||||||||||||
Convertible Notes Payable (Textual) | ||||||||||||||||
Stated rates of interest | 8.00% | |||||||||||||||
Convertible Note Financings - August 2015 [Member] | GHS Investments, LLC [Member] | ||||||||||||||||
Convertible Notes Payable (Textual) | ||||||||||||||||
Accrued Interest | $ 70,795 | $ 102,742 | ||||||||||||||
Common stock converted shares | 36,398,894 | 144,242,185 | ||||||||||||||
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 | |||||||||||||||
Convertible notes payable, description | The investment from Typenex was 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 was memorialized in Secured Promissory Note #1, the funding of which occurred on or immediately after the execution of the Typenex Agreement. Net proceeds of $235,500 were received during the year ended September 30, 2017 under the Typenex Agreement.</p>" id="sjs-B50"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The investment from Typenex was 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 was memorialized in Secured Promissory Note #1, the funding of which occurred on or immediately after the execution of the Typenex Agreement. Net proceeds of $235,500 were received during the year ended September 30, 2017 under the Typenex Agreement.</p> | 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 of approximately 450,000,000 shares as of September 30, 2017. The Company is in default and accrued interest at the default rate of twenty-two percent (22 %) per annum. Due to default, the principal and accrued interest increased by 115%. As a result of these default events, the Company recorded $118,187 to interest expense during the year ended September 30, 2017. As of September 30, 2017, the entire amount was included within unpaid principal and accrued interest.</p>" id="sjs-O50"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">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 of approximately 450,000,000 shares as of September 30, 2017. The Company is in default and accrued interest at the default rate of twenty-two percent (22 %) per annum. Due to default, the principal and accrued interest increased by 115%. As a result of these default events, the Company recorded $118,187 to interest expense during the year ended September 30, 2017. As of September 30, 2017, the entire amount was included within unpaid principal and accrued interest.</p> | ||||||||||||||
First tranche note | $ 40,000 | |||||||||||||||
Description of conversion price | The Conversion Price is as described in the Typenex Agreement and is based on at least a 45% discount, and up to 55% discount based on events of default, to the trading price during the prior 20 days of notice of intent to convert by the holder into the Company’s common stock.</p>" id="sjs-B52"><p style="margin: 0pt">The Conversion Price is as described in the Typenex Agreement and is based on at least a 45% discount, and up to 55% discount based on events of default, to the trading price during the prior 20 days of notice of intent to convert by the holder into the Company’s common stock.</p> | |||||||||||||||
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 | |||||||||||||||
Convertible notes payable, description | 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 year ended September 30, 2017, GHS provided net proceeds of $38,000. As a result of the funding, the Company recorded a loss from effects of derivative liabilities of $363,010 during the year ended September 30, 2017. The Company recorded a derivative discount of $38,000 against the convertible note payable and amortized the entire amount to interest expense during the year ended September 30, 2017.</p>" id="sjs-G60"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">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 year ended September 30, 2017, GHS provided net proceeds of $38,000. As a result of the funding, the Company recorded a loss from effects of derivative liabilities of $363,010 during the year ended September 30, 2017. The Company recorded a derivative discount of $38,000 against the convertible note payable and amortized the entire amount to interest expense during the year ended September 30, 2017.</p> | |||||||||||||||
Common stock issued on conversion | 158,462,022 | 394,470,363 | ||||||||||||||
Principal amount converts of common stock | $ 214,846 | $ 549,583 | ||||||||||||||
Fair value of derivative Liability | 363,010 | $ 363,010 | ||||||||||||||
Percentage of accrued interest | 20.00% | |||||||||||||||
Derivative discount | $ 38,000 | |||||||||||||||
GHS Convertible Note [Member] | ||||||||||||||||
Convertible Notes Payable (Textual) | ||||||||||||||||
Interest rate | 150.00% | |||||||||||||||
Original issue discount | 176,150 | $ 176,150 | ||||||||||||||
Convertible notes payable, description | The convertible note bears interest at the stated rate of 10%, per annum, subject to a default rate of 22%, per annum., and is convertible into common stock of the Company at any time after 180 days from issuance of the note at a conversion price per share equal to 55% of the lowest trading price in the 20 trading days immediately preceding the applicable conversion date. The conversion rate will decrease to 45% or 50% from 55% in certain conditions of default. The Company had the option to prepay the convertible note in the first 180 days from closing subject to a prepayment penalty of 150% of principal plus interest. The maturity date of the convertible note was January 19, 2017.<p></p></p>" id="sjs-C70"><p class="MsoNormal">The convertible note bears interest at the stated rate of 10%, per annum, subject to a default rate of 22%, per annum., and is convertible into common stock of the Company at any time after 180 days from issuance of the note at a conversion price per share equal to 55% of the lowest trading price in the 20 trading days immediately preceding the applicable conversion date. The conversion rate will decrease to 45% or 50% from 55% in certain conditions of default. The Company had the option to prepay the convertible note in the first 180 days from closing subject to a prepayment penalty of 150% of principal plus interest. The maturity date of the convertible note was January 19, 2017.<p></p></p> | |||||||||||||||
Interest expense | 99,556 | |||||||||||||||
Fair value of derivative Liability | 566,977 | 566,977 | ||||||||||||||
Amortized discount | 88,075 | |||||||||||||||
Prepayment of penalty | 91,011 | |||||||||||||||
Embedded conversion feature | $ 390,827 | |||||||||||||||
Odyssey Investment [Member] | ||||||||||||||||
Convertible Notes Payable (Textual) | ||||||||||||||||
Original issue discount | 90,000 | 90,000 | ||||||||||||||
Convertible notes payable, description | The Company entered into an agreement for proceeds of $90,000 to be recorded as a convertible note payable with a conversion feature of 55% of the lowest trading price for the prior twenty (20) days. | An investor purchased $90,000 in common stock at a purchase price equal to 90% of the average of the closing prices of the common stock for the three (3) trading days immediately preceding the date that is six (6) months from the date of the agreement. | ||||||||||||||
Fair value of derivative Liability | $ 118,722 | 118,722 | ||||||||||||||
Embedded conversion feature | $ 28,722 | |||||||||||||||
Redwood [Member] | ||||||||||||||||
Convertible Notes Payable (Textual) | ||||||||||||||||
Original principal amount | $ 1,808,000 | |||||||||||||||
Unsecured convertible promissory note Principal amount | $ 2,000,000 | $ 800,000 | ||||||||||||||
Interest rate | 22.00% | |||||||||||||||
Original issue discount | $ 182,000 | 148,600 | ||||||||||||||
Transaction fee | $ 10,000 | $ 651,395 | ||||||||||||||
Convertible notes payable, description | The note was ultimately convertible into common stock at a discount of 55</font> <font style="font-family: Times New Roman, Times, Serif">% to the lowest trading price during the prior 15 days from the date of notice to convert, since certain events of default occurred.</p>" id="sjs-E89"><p style="margin: 0pt">The note was ultimately convertible into common stock at a discount of 55</font> <font style="font-family: Times New Roman, Times, Serif">% to the lowest trading price during the prior 15 days from the date of notice to convert, since certain events of default occurred.</p> | |||||||||||||||
Common stock issued on conversion | 82,775,494 | |||||||||||||||
Principal amount converts of common stock | $ 498,150 | |||||||||||||||
Interest expense | $ 36,038 | |||||||||||||||
Stated rates of interest | 10.00% | |||||||||||||||
Accrued Interest | $ 93,614 | |||||||||||||||
Common stock converted shares | 77,722,625 |
Related Party Debt (Details)
Related Party Debt (Details) - USD ($) | Dec. 10, 2015 | Dec. 07, 2013 | Apr. 28, 2018 | May 24, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2013 |
Related Party Debt (Textual) | |||||||
Accrued interest | $ 303,766 | $ 183,390 | |||||
Interest expense related to notes payable | 15,700 | ||||||
Subsequent Events [Member] | |||||||
Related Party Debt (Textual) | |||||||
Settlement agreement, description | 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. | ||||||
Iliad 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 | $ 126,826 | ||||||
Accrued interest converts of common stock | 87,302,137 | ||||||
Series B Preferred Stock [Member] | |||||||
Related Party Debt (Textual) | |||||||
Accrued interest | $ 56,302 | ||||||
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 | 10,000,000 | 10,000,000 | ||||
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 | |||||
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] | Iliad Research and Trading [Member] | |||||||
Related Party Debt (Textual) | |||||||
Series B convertible note payable purchased | $ 125,000 | ||||||
Derivative liabilities | 93,325 | ||||||
Derivative discount | 125,000 | ||||||
Shareholder [Member] | |||||||
Related Party Debt (Textual) | |||||||
Accounts payable, related parties | $ 15,000 | ||||||
Accrued interest | 3,473 | ||||||
Interest expense related to notes payable | 913 | ||||||
Interest rate | 6.00% | ||||||
Maturity date | Dec. 1, 2016 | ||||||
Law firm waived fees | $ 122,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | Dec. 06, 2017 | Dec. 10, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Jul. 31, 2017 | Jan. 25, 2017 | Dec. 01, 2016 |
Commitments and Contingencies (Textual) | |||||||
Recorded a settlement liability | $ 100,000 | $ 422,000 | |||||
Convertible promissory note | 41,121 | ||||||
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. 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. | ||||||
Provision for loss | 100,000 | ||||||
Unamortized discount | 88,449 | 119,680 | |||||
Union Capital, LLC [Member] | Convertible Promissory Note [Member] | |||||||
Commitments and Contingencies (Textual) | |||||||
Recorded a settlement liability | $ 170,000 | ||||||
Convertible promissory note | 144,051 | ||||||
Amount paid by GHS to LG Capital | $ 170,000 | ||||||
Shares of common stock issued | 122,063,128 | 32,700,000 | |||||
Unamortized discount | $ 25,949 | ||||||
LG Capital Funding [Member] | |||||||
Commitments and Contingencies (Textual) | |||||||
Gain on settlement | $ 300,000 | ||||||
Recorded a settlement liability | $ 151,000 | ||||||
LG Capital Funding [Member] | Convertible Promissory Note [Member] | |||||||
Commitments and Contingencies (Textual) | |||||||
Recorded a settlement liability | $ 151,000 | ||||||
Amount paid by GHS to LG Capital | $ 161,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Current tax provision (benefit): | ||
Federal | ||
State | 1,800 | |
Total | 1,800 | |
Deferred tax provision (benefit) | ||
Federal | (399,000) | (790,000) |
State | ||
Valuation allowance | 399,000 | 790,000 |
Total | ||
Total provision (benefit) for income taxes | $ 1,800 |
Income Taxes (Details 1)
Income Taxes (Details 1) | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Reconciliations of the U.S. federal statutory rate to the actual tax rate | ||
US federal statutory income tax rate | (34.00%) | (34.00%) |
State tax - net of benefit | (6.00%) | (6.00%) |
Effective income tax rate reconciliation total | (40.00%) | (40.00%) |
Permanent differences: | ||
Stock-based compensation | 0.00% | 0.03% |
Amortization of debt discounts and non-cash interest | 15.50% | 12.10% |
Non-deductible gains and losses | (5.60%) | 12.20% |
Increase in valuation allowance | 30.10% | 15.40% |
Effective tax rate |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) | Sep. 30, 2017 | Sep. 30, 2016 |
Current deferred tax assets (liabilities): | ||
Accrued expenses and other | ||
Total current deferred tax assets | ||
Non-current deferred tax assets and liabilities: | ||
Property, plant and equipment | ||
Net operating losses | 1,856,000 | 1,457,000 |
Total non-current deferred tax assets | 1,856,000 | 1,457,000 |
Valuation allowance | (1,856,000) | (1,457,000) |
Total non-current deferred tax assets | ||
Net deferred tax assets |
Income Taxes (Details Textual)
Income Taxes (Details Textual) - USD ($) | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Income Taxes (Textual) | ||
Valuation allowance, Deferred tax assets | $ 399,000 | $ 790,000 |
Net operating losses | $ 2,041,000 | |
Operating loss carryforward expiration date | The net operating loss carry forwards, if not utilized, will begin to expire in 2034 for federal purposes and 2032 for state purposes. | |
Valuation allowance | $ 1,856,000 | 1,457,000 |
California minimum state tax liability | $ 800 | $ 2,400 |
Stockholders' Deficit (Details)
Stockholders' Deficit (Details) - shares | Apr. 01, 2014 | Jun. 19, 2014 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 10, 2015 | Nov. 15, 2013 |
Stockholders' Deficit (Textual) | ||||||
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 | ||||
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 $4,000,000 in aggregate gross revenues over the two-year period then the convertible ratio will adjust to 5-1). In no event will the issuance convert into more than 5,000,000 shares of common stock of the Company. | |||||
Description of asset purchase agreement ratio | Series A Shares are entitled to vote at a 15-1 ratio to Common Stock. | |||||
Common Stock [Member] | ||||||
Stockholders' Deficit (Textual) | ||||||
Common stock, shares authorized | 1,000,000,000 | |||||
Preferred stock, shares authorized | 100,000,000 | |||||
Series A Preferred Stock [Member] | ||||||
Stockholders' Deficit (Textual) | ||||||
Shares issued during period | 500,000 | 500,000 | ||||
Preferred stock, shares authorized | 500,000 | 90,000,000 | 90,000,000 | |||
Series B Preferred Stock [Member] | ||||||
Stockholders' Deficit (Textual) | ||||||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | 30,000,000 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Subsequent Events (Textual) | ||
Conversion of common stock shares issued | 132,697,863 | |
Conversion of common stock amount | $ 217,331 | |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Conversion Debt [Member] | ||
Subsequent Events (Textual) | ||
Common stock, shares authorized | 1,000,000,000 |