Document and Entity Information
Document and Entity Information | 6 Months Ended |
Mar. 31, 2019 | |
Document And Entity Information | |
Entity Registrant Name | MYnd Analytics, Inc. |
Entity Central Index Key | 0000822370 |
Document Type | S-4 |
Trading Symbol | MYND |
Document Period End Date | Mar. 31, 2019 |
Amendment Flag | false |
Entity Emerging Growth Company | false |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | true |
Entity Ex Transition Period | false |
UNAUDITED CONDENSED CONSOLIDATE
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Mar. 31, 2019 | Sep. 30, 2018 | Sep. 30, 2017 |
CURRENT ASSETS: | |||
Cash and cash equivalents | $ 1,203,200 | $ 3,254,700 | $ 5,449,000 |
Accounts receivable, net | 154,400 | 63,300 | 6,500 |
Prepaid insurance | 9,700 | 57,900 | 57,200 |
Note receivable - related party | 159,500 | ||
Prepaid expenses and other current assets | 181,200 | 134,700 | 22,000 |
Total current assets | 1,548,500 | 3,510,600 | 5,694,200 |
Property and equipment, net | 87,700 | 110,800 | 120,700 |
Intangible assets, net | 88,400 | 116,500 | 60,200 |
Investment in Arcadian | 195,900 | ||
Goodwill | 1,386,800 | 1,386,800 | |
Other assets | 29,600 | 27,100 | 25,100 |
TOTAL ASSETS | 3,141,000 | 5,151,800 | 6,096,100 |
CURRENT LIABILITIES: | |||
Accounts payable (including $36,400 and $30,350 to related parties as of March 31, 2019 and September 30, 2018, respectively) | 970,700 | 346,900 | 736,900 |
Accrued liabilities | 204,700 | 268,900 | 55,200 |
Accrued compensation | 244,900 | 175,400 | 466,000 |
Accrued compensation - related parties | 322,800 | 209,300 | 204,600 |
Accrued interest and other liabilities | 3,900 | 3,900 | 3,900 |
Deferred revenue | 152,100 | 159,700 | 45,900 |
Current portion of note payable | 31,500 | ||
Current portion of leases | 1,400 | 1,300 | 1,300 |
Total current liabilities | 1,900,500 | 1,165,400 | 1,545,300 |
LONG-TERM LIABILITIES | |||
Long-term borrowing, net | 606,500 | 587,700 | |
Accrued interest on long-term borrowing | 120,500 | 110,100 | |
Long-term portion of capital lease | 1,400 | 2,100 | 3,400 |
Total long-term liabilities | 728,400 | 699,900 | 3,400 |
TOTAL LIABILITIES | 2,628,900 | 1,865,300 | 1,548,700 |
STOCKHOLDERS' EQUITY: | |||
Preferred stock value | 1,100 | 1,100 | |
Common stock value | 8,900 | 7,400 | 4,300 |
Additional paid-in capital | 91,895,900 | 89,257,700 | 80,189,700 |
Accumulated deficit | (89,881,400) | (85,245,300) | (75,646,600) |
Total controlling interests | 2,024,500 | 4,020,900 | 4,547,400 |
Non-controlling interest | (1,512,400) | (734,400) | |
Total stockholders' equity | 512,100 | 3,286,500 | 4,547,400 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 3,141,000 | $ 5,151,800 | $ 6,096,100 |
UNAUDITED CONDENSED CONSOLIDA_2
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Mar. 31, 2019 | Sep. 30, 2018 | Sep. 30, 2017 |
Accounts payable due to related parties | $ 36,400 | $ 30,350 | $ 36,200 |
Preferred stock, par value (in dollars per shares) | $ 0.001 | $ 0.001 | $ 0.001 |
Preferred stock, authorized | 15,000,000 | 15,000,000 | 15,000,000 |
Preferred stock, issued | |||
Preferred stock, outstanding | |||
Preferred stock, liquidation preference | $ 1,968,750 | $ 1,968,750 | |
Common stock, par value (in dollars per shares) | $ 0.001 | $ 0.001 | $ 0.001 |
Common stock, authorized | 250,000,000 | 250,000,000 | 500,000,000 |
Common stock, issued | 8,936,695 | 7,407,254 | 4,299,311 |
Common stock, outstanding | 8,936,695 | 7,407,254 | 4,299,311 |
Series A Preferred Stock | |||
Preferred stock, authorized | 1,500,000 | 1,500,000 | |
Preferred stock, issued | 550,000 | 550,000 | |
Preferred stock, outstanding | 550,000 | 550,000 | |
Series A-1 Preferred Stock | |||
Preferred stock, authorized | 500,000 | 500,000 | |
Preferred stock, issued | 500,000 | 500,000 | |
Preferred stock, outstanding | 500,000 | 500,000 |
UNAUDITED CONDENSED CONSOLIDA_3
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | |
REVENUES | ||||||
Total revenues | $ 460,100 | $ 459,900 | $ 847,200 | $ 581,900 | $ 1,315,500 | $ 128,500 |
COST OF REVENUES | 296,300 | 298,300 | 521,400 | 383,200 | 827,400 | 53,500 |
GROSS MARGIN | 163,800 | 161,600 | 325,800 | 198,700 | 488,100 | 75,000 |
OPERATING EXPENSES | ||||||
Research | 60,800 | 73,400 | 141,600 | 154,900 | 231,500 | 123,900 |
Product development | 237,300 | 342,200 | 474,300 | 611,400 | 1,146,000 | 1,237,200 |
Sales and marketing | 199,400 | 638,000 | 351,300 | 1,305,200 | 1,617,900 | 1,226,700 |
General and administrative | 2,350,300 | 1,740,900 | 4,724,100 | 3,515,800 | 7,737,600 | 4,590,800 |
Total operating expenses | 2,847,800 | 2,794,500 | 5,691,300 | 5,587,300 | 10,733,000 | 7,178,600 |
OPERATING LOSS | (2,684,000) | (2,632,900) | (5,365,500) | (5,388,600) | (10,244,900) | (7,103,600) |
OTHER INCOME (EXPENSE): | ||||||
Interest expense, net | (23,400) | (24,800) | (46,300) | (38,500) | (86,300) | (6,600) |
Total other income (expense) | (23,400) | (24,800) | (46,300) | (38,500) | (86,300) | (6,600) |
LOSS BEFORE PROVISION FOR INCOME TAXES | (2,707,400) | (2,657,700) | (5,411,800) | (5,427,100) | (10,331,200) | (7,110,200) |
Income taxes | 2,300 | 1,900 | 2,300 | 1,900 | 1,900 | 2,600 |
NET LOSS | (2,709,700) | (2,659,600) | (5,414,100) | (5,429,000) | (10,333,100) | (7,112,800) |
Net loss attributable to non-controlling interest | (451,100) | (72,300) | (778,000) | (72,300) | (734,400) | |
Net Loss attributable to MYnd Analytics, Inc. | $ (2,258,600) | $ (2,587,300) | $ (4,636,100) | $ (5,356,700) | $ (9,598,700) | $ (7,112,800) |
BASIC AND DILUTED LOSS PER SHARE: | $ (0.27) | $ (0.59) | $ (0.58) | $ (1.23) | $ (1.86) | $ (2.52) |
WEIGHTED AVERAGE SHARES OUTSTANDING: | ||||||
Basic and Diluted | 8,399,443 | 4,362,564 | 7,964,021 | 4,347,745 | 5,199,566 | 2,817,415 |
Neurometric Services [Member] | ||||||
REVENUES | ||||||
Total revenues | $ 44,800 | $ 79,800 | $ 124,000 | $ 133,100 | $ 263,700 | $ 128,500 |
COST OF REVENUES | 5,100 | 69,700 | 11,500 | 118,800 | 131,200 | 53,500 |
Telepsychiatry Services [Member] | ||||||
REVENUES | ||||||
Total revenues | 415,300 | 380,100 | 723,200 | 448,800 | 1,051,800 | |
COST OF REVENUES | $ 291,200 | $ 228,600 | $ 509,900 | $ 264,400 | $ 696,200 |
UNAUDITED CONDENSED CONSOLIDA_4
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) | Common Stock | Preferred Stock | Additional Paid-in Capital | Accumulated Deficit | Sub-total MYnd Stockholders' Equity | Non-controlling Interest | Total |
Balance at Sep. 30, 2016 | $ 1,900 | $ 67,467,400 | $ (68,533,800) | $ (1,064,500) | $ (1,064,500) | ||
Balance, shares at Sep. 30, 2016 | 1,941,061 | ||||||
Stock-based compensation | 2,086,000 | 2,086,000 | 2,086,000 | ||||
Stock issued for private placement of shares | $ 500 | 2,980,800 | 2,981,300 | 2,981,300 | |||
Stock issued for private placement of shares, shares | 477,000 | ||||||
Stock issued for purchase agreement to Aspire Capital | 145,000 | 145,000 | 145,000 | ||||
Stock issued for purchase agreement to Aspire Capital, shares | 20,000 | ||||||
Shares issued to Aspire Capital Purchase Agreement | $ 100 | (100) | |||||
Shares issued to Aspire Capital Purchase Agreement, shares | 80,000 | ||||||
Common Stock issued to vendors for services | 173,000 | 173,000 | 173,000 | ||||
Common Stock issued to vendors for services, shares | 26,250 | ||||||
Restricted stock compensation | $ 100 | (100) | |||||
Restricted stock compensation, shares | 79,000 | ||||||
Common stock issued to Arcadian | 5,900 | 5,900 | 5,900 | ||||
Common stock issued to Arcadian, shares | 1,000 | ||||||
Common stock - public Offering | $ 1,700 | 7,480,400 | 7,482,100 | 7,482,100 | |||
Common stock - public Offering, shares | 1,675,000 | ||||||
Offering costs - legal fees Arcadian | (148,600) | (148,600) | (148,600) | ||||
Net loss | (7,112,800) | (7,112,800) | (7,112,800) | ||||
Balance at Sep. 30, 2017 | $ 4,300 | 80,189,700 | (75,646,600) | 4,547,400 | 4,547,400 | ||
Balance, shares at Sep. 30, 2017 | 4,299,311 | ||||||
Balance at Sep. 30, 2017 | $ 4,300 | 80,189,700 | (75,646,600) | 4,547,400 | 4,547,400 | ||
Stock-based compensation | $ 100 | 336,500 | 336,600 | 336,600 | |||
Stock-based compensation, shares | 37,500 | ||||||
Common Stock issued to vendors for services | 14,800 | 14,800 | 14,800 | ||||
Common Stock issued to vendors for services, shares | 23,750 | ||||||
Net loss | (2,769,300) | (2,769,300) | (2,769,300) | ||||
Balance at Dec. 31, 2017 | $ 4,400 | 80,541,000 | (78,415,900) | 2,129,500 | 2,129,500 | ||
Balance, shares at Dec. 31, 2017 | 4,360,561 | ||||||
Balance at Sep. 30, 2017 | $ 4,300 | 80,189,700 | (75,646,600) | 4,547,400 | 4,547,400 | ||
Balance, shares at Sep. 30, 2017 | 4,299,311 | ||||||
Net loss | (5,429,000) | ||||||
Balance at Mar. 31, 2018 | $ 4,400 | $ 1,100 | 82,907,300 | (81,075,600) | 1,837,200 | (72,300) | 1,764,900 |
Balance, shares at Mar. 31, 2018 | 4,364,311 | 1,050,000 | |||||
Balance at Sep. 30, 2017 | $ 4,300 | 80,189,700 | (75,646,600) | 4,547,400 | 4,547,400 | ||
Balance, shares at Sep. 30, 2017 | 4,299,311 | ||||||
Stock-based compensation | 1,588,300 | 1,588,300 | 1,588,300 | ||||
Stock issued for preferred shares | $ 1,100 | 2,036,000 | 2,037,100 | 2,037,100 | |||
Stock issued for preferred shares, shares | 1,050,000 | ||||||
Stock issued to Aspire Capital | $ 2,310 | 4,257,900 | 4,260,210 | 4,260,210 | |||
Stock issued to Aspire Capital, shares | 2,314,671 | ||||||
Issuance of common stock | $ 175 | 80,300 | 80,475 | 80,475 | |||
Issuance of common stock, shares | 183,814 | ||||||
Stock issued for private placement of shares | $ 460 | 849,500 | 849,960 | 849,960 | |||
Stock issued for private placement of shares, shares | 459,458 | ||||||
Common Stock issued to vendors for services | $ 120 | 201,800 | 201,920 | 201,920 | |||
Common Stock issued to vendors for services, shares | 115,000 | ||||||
Proceeds from option exercise | $ 35 | 54,200 | 54,235 | 54,235 | |||
Proceeds from option exercise, shares | 35,000 | ||||||
Net loss | $ (9,598,700) | (9,598,700) | (734,400) | (10,333,100) | |||
Balance at Sep. 30, 2018 | $ 7,400 | $ 1,100 | 89,257,700 | (85,245,300) | 4,020,900 | (734,400) | 3,286,500 |
Balance, shares at Sep. 30, 2018 | 7,407,254 | 1,050,000 | |||||
Balance at Dec. 31, 2017 | $ 4,400 | 80,541,000 | (78,415,900) | 2,129,500 | 2,129,500 | ||
Balance, shares at Dec. 31, 2017 | 4,360,561 | ||||||
Stock-based compensation | 256,400 | 256,400 | 256,400 | ||||
Stock-based compensation, shares | 20,000 | ||||||
Stock issued for preferred shares | $ 1,100 | 2,098,900 | 2,100,000 | 2,100,000 | |||
Stock issued for preferred shares, shares | 1,050,000 | ||||||
Common Stock issued to vendors for services | 11,000 | 11,000 | 11,000 | ||||
Common Stock issued to vendors for services, shares | (16,250) | ||||||
Net loss | (2,659,700) | (2,659,700) | (72,300) | (2,659,600) | |||
Balance at Mar. 31, 2018 | $ 4,400 | $ 1,100 | 82,907,300 | (81,075,600) | 1,837,200 | (72,300) | 1,764,900 |
Balance, shares at Mar. 31, 2018 | 4,364,311 | 1,050,000 | |||||
Balance at Sep. 30, 2018 | $ 7,400 | $ 1,100 | 89,257,700 | (85,245,300) | 4,020,900 | (734,400) | 4,020,900 |
Balance, shares at Sep. 30, 2018 | 7,407,254 | 1,050,000 | |||||
Shares issued to Aspire Capital Purchase Agreement | $ 200 | 517,100 | 517,300 | 517,300 | |||
Shares issued to Aspire Capital Purchase Agreement, shares | 144,000 | ||||||
Common Stock issued to vendors for services | 5,600 | 5,600 | 5,600 | ||||
Common Stock issued to vendors for services, shares | 3,750 | ||||||
Net loss | (2,377,500) | (2,377,500) | (326,900) | (2,704,400) | |||
Balance at Dec. 31, 2018 | $ 7,600 | $ 1,100 | 89,780,400 | (87,622,800) | 2,166,300 | (1,061,300) | 1,105,000 |
Balance, shares at Dec. 31, 2018 | 7,555,004 | 1,050,000 | |||||
Balance at Sep. 30, 2018 | $ 7,400 | $ 1,100 | 89,257,700 | (85,245,300) | 4,020,900 | (734,400) | $ 4,020,900 |
Balance, shares at Sep. 30, 2018 | 7,407,254 | 1,050,000 | |||||
Issuance of common stock, shares | 463,636 | ||||||
Net loss | $ (5,414,100) | ||||||
Balance at Mar. 31, 2019 | $ 8,900 | $ 1,100 | 91,895,900 | (89,881,400) | 2,024,500 | (1,512,400) | 512,100 |
Balance, shares at Mar. 31, 2019 | 8,936,695 | 1,050,000 | |||||
Balance at Dec. 31, 2018 | $ 7,600 | $ 1,100 | 89,780,400 | (87,622,800) | 2,166,300 | (1,061,300) | 1,105,000 |
Balance, shares at Dec. 31, 2018 | 7,555,004 | 1,050,000 | |||||
Stock-based compensation | 258,000 | 258,000 | 258,000 | ||||
Stock-based compensation, shares | 30,000 | ||||||
Shares issued to Aspire Capital Purchase Agreement | $ 1,300 | 1,810,500 | 1,811,800 | 1,811,800 | |||
Shares issued to Aspire Capital Purchase Agreement, shares | 1,315,429 | ||||||
Common Stock issued to vendors for services | 47,000 | 47,000 | 47,000 | ||||
Common Stock issued to vendors for services, shares | 36,262 | ||||||
Net loss | (2,258,600) | (2,258,600) | (451,100) | (2,709,700) | |||
Balance at Mar. 31, 2019 | $ 8,900 | $ 1,100 | $ 91,895,900 | $ (89,881,400) | $ 2,024,500 | $ (1,512,400) | $ 512,100 |
Balance, shares at Mar. 31, 2019 | 8,936,695 | 1,050,000 |
UNAUDITED CONDENSED CONSOLIDA_5
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 6 Months Ended | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | |
OPERATING ACTIVITIES: | ||||
Net loss | $ (5,414,100) | $ (5,429,000) | $ (10,333,100) | $ (7,112,800) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
Depreciation and amortization | 60,300 | 57,500 | 117,900 | 48,700 |
Change in provision for doubtful accounts | 6,300 | 1,200 | 800 | |
Stock based compensation | 775,300 | 593,000 | 1,588,300 | 2,086,000 |
Common stock issued to vendors for services | (52,600) | (25,800) | (201,920) | (173,000) |
Accretion of debt discount and non-cash interest expense | 46,700 | 35,500 | 82,300 | |
Changes in operating assets and liabilities: | ||||
Accounts receivable | (97,400) | (156,200) | (500) | (1,400) |
Prepaid expenses and other assets | (800) | (97,200) | (91,500) | (12,100) |
Accounts payable and accrued liabilities | 559,600 | 112,400 | (432,700) | 301,500 |
Deferred revenue | (7,600) | 125,000 | 113,800 | |
Deferred compensation | 183,000 | (8,300) | (285,900) | (275,000) |
Net cash used in operating activities | (3,836,100) | (4,740,300) | (9,038,680) | (4,792,100) |
INVESTING ACTIVITIES: | ||||
Purchase of furniture/property and equipment | (9,100) | (55,200) | (55,200) | (127,900) |
Investment in Arcadian | (190,000) | |||
Payment for acquisition of business, net of cash acquired | (306,600) | (306,600) | ||
Loan Advance - Plotkin | (159,500) | |||
Purchase of intangible assets | (2,100) | |||
Net cash used in investing activities | (9,100) | (361,800) | (361,800) | (479,500) |
FINANCING ACTIVITIES: | ||||
Principal payments on capital lease | (600) | (600) | (2,600) | (1,200) |
Principal payments on long-term debt | (37,000) | |||
Principal payments on note payable | (17,500) | (34,100) | (36,200) | (56,200) |
Proceeds from Aspire Capital purchase agreements | 4,260,210 | 145,000 | ||
Proceeds from sale of preferred stock and common stock warrants | 2,037,100 | |||
Proceeds from sale of common stock, net of costs | 1,811,800 | 2,100,000 | 930,435 | 2,981,300 |
Proceeds from public offering | 7,482,100 | |||
Proceeds from stock options exercised | 54,235 | |||
Deferred offering costs | (148,600) | |||
Net cash provided by financing activities | 1,793,700 | 2,065,300 | 7,206,180 | 10,402,400 |
NET INCREASE (DECREASE) IN CASH | (2,051,500) | (3,036,800) | (2,194,300) | 5,130,800 |
CASH AND CASH EQUIVALENTS - BEGINNING OF THE PERIOD | 3,254,700 | 5,449,000 | 5,449,000 | 318,200 |
CASH AND CASH EQUIVALENTS - END OF THE PERIOD | 1,203,200 | 2,412,200 | 3,254,700 | 5,449,000 |
Cash paid during the period for: | ||||
Interest | 2,000 | 4,700 | 8,200 | 6,600 |
Income taxes | 2,300 | 1,900 | 1,900 | 2,600 |
Non-cash financing and investing activities | ||||
Long-term borrowings assumed in business combination | $ 651,700 | 651,700 | ||
Commitment shares issued to Aspire Capital as offering cost | 795,000 | 708,000 | ||
Investment in Arcadian 1,000 shares at $5.90 per share of common stock | $ 5,900 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - $ / shares | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Statement of Cash Flows [Abstract] | ||
Number of shares issued | 1,000 | |
Shares issued price per share (in dollars per share) | $ 5.90 |
ORGANIZATION, NATURE OF OPERATI
ORGANIZATION, NATURE OF OPERATIONS AND GOING CONCERN UNCERTAINTY | 6 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
ORGANIZATION, NATURE OF OPERATIONS AND GOING CONCERN UNCERTAINTY | 1. ORGANIZATION, NATURE OF OPERATIONS AND GOING CONCERN UNCERTAINTY MYnd Analytics, Inc. (“MYnd,” “CNS,” “we,” “us,” “our,” or the “Company”), formerly known as CNS Response Inc., is a predictive analytics company that has developed a decision support tool to help physicians reduce trial and error treatment in mental health and provide more personalized care to patients. The Company employs a clinically validated scalable technology platform to support personalized care for mental health patients. The Company utilizes its patented machine learning, artificial intelligence, data analytics platform for the delivery of telebehavioral health services and its PEER predictive analytics product offering. On November 13, 2017, the Company acquired Arcadian Telepsychiatry Services LLC (“Arcadian”), which manages the delivery of telepsychiatry and telebehavioral health services through a nationwide network of licensed and credentialed psychiatrists, psychologists and master’s-level therapists. The Company is commercializing its PEER predictive analytics tool to help physicians reduce trial and error treatment in mental health. MYnd’s patented, clinically validated technology platform (“PEER Online”) utilizes complex algorithms to analyze electroencephalograms (“EEGs”) to generate Psychiatric EEG Evaluation Registry (“PEER”) Reports to predict individual responses to a range of medications prescribed for the treatment of behavioral disorders including depression, anxiety, bipolar disorder, PTSD and other non-psychotic disorders. Going Concern Uncertainty The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”), which contemplate continuation of the Company as a going concern. The Company’s operations are subject to certain problems, expenses, difficulties, delays, complications, risks and uncertainties frequently encountered in the operation of a business. These risks include the ability to obtain adequate financing on a timely basis, if at all, the failure to develop or supply technology or services to meet the demands of the marketplace, the failure to attract and retain qualified personnel, competition within the industry, government regulation and the general strength of regional and national economies. The Company’s recurring net losses and negative cash flows from operations raise substantial doubt about its ability to continue as a going concern. During the six months ended March 31, 2019, the Company incurred a net loss of $5.4 million and used $3.8 million of net cash in operating activities. As of March 31, 2019, the Company’s accumulated deficit was $89.9 million. In connection with these unaudited condensed consolidated financial statements, management evaluated whether there were conditions and events, considered in the aggregate, that raised substantial doubt about the Company’s ability to meet its obligations as they become due for the next twelve months from the date of issuance of these financial statements. Management assessed that there were such conditions and events, including a history of recurring operating losses, and negative cash flows from operating activities. To date, the Company has financed its cash requirements primarily from equity financings. As of March 31, 2019, the Company’s principal sources of liquidity were its cash balance of $1.2 million and the remaining amount available under the Aspire Equity Line of Credit of $6.3 million. The Company will need to raise funds immediately to continue its operations and increase demand for its services. Until it can generate sufficient revenues to meet its cash requirements, which it may never do, the Company must continue to finance future cash needs primarily through public or private equity offerings, debt financings or strategic collaborations. The Company’s liquidity and capital requirements depend on several factors, including the rate of market acceptance of its services, the future profitability of the Company, the rate of growth of the Company’s business and other factors described elsewhere in this Quarterly Report on Form 10-Q. The Company continues to explore additional sources of capital, but there is substantial doubt as to whether any financing arrangement will be available in amounts and on terms acceptable to the Company to permit it to continue operations. The accompanying unaudited condensed consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. | 1. NATURE OF OPERATIONS Organization, Nature of Operations and Going Concern Uncertainty MYnd Analytics, Inc. ("MYnd," "CNS," "we," "us," "our," or the "Company"), formerly known as CNS Response Inc., is a predictive analytics company that has developed a decision support tool to help physicians reduce trial and error treatment in mental health and provide more personalized care to patients. The Company employs a clinically validated scalable technology platform to support personalized care for mental health patients. The Company utilizes its patented machine learning, artificial intelligence, data analytics platform for the delivery of telebehavioral health services and its PEER predictive analytics product offering. On November 13, 2017, the Company acquired Arcadian, which manages the delivery of telepsychiatry and telebehavioral health services through a nationwide network of licensed and credentialed psychiatrists, psychologists and master's-level therapists. The Company is commercializing its PEER predictive analytics tool to help physicians reduce trial and error treatment in mental health. MYnd's patented, clinically validated technology platform ("PEER Online") utilizes complex algorithms to analyze electroencephalograms ("EEGs") to generate Psychiatric EEG Evaluation Registry ("PEER") Reports to predict individual responses to a range of medications prescribed for the treatment of behavioral disorders including depression, anxiety, bipolar disorder, PTSD and other non-psychotic disorders. Going Concern Uncertainty The accompanying consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles ("GAAP"), which contemplate continuation of the Company as a going concern. The Company's operations are subject to certain problems, expenses, difficulties, delays, complications, risks and uncertainties frequently encountered in the operation of a business. These risks include the ability to obtain adequate financing on a timely basis, if at all, the failure to develop or supply technology or services to meet the demands of the marketplace, the failure to attract and retain qualified personnel, competition within the industry, government regulation and the general strength of regional and national economies. The Company's recurring net losses and negative cash flows from operations raise substantial doubt about its ability to continue as a going concern. During the twelve months ended September 30, 2018, the Company incurred a net loss of $10.3 million and used $9.0 million of net cash in operating activities. As of September 30, 2018, the Company's accumulated deficit was $85.2 million. In connection with these consolidated financial statements, management evaluated whether there were conditions and events, considered in the aggregate, that raised substantial doubt about the Company's ability to meet its obligations as they become due for the next twelve months from the date of issuance of these financial statements. Management assessed that there were such conditions and events, including a history of recurring operating losses, and negative cash flows from operating activities. If the Company raises additional funds by issuing additional equity or convertible debt securities, the fully diluted ownership percentages of existing stockholders will be reduced. In addition, any equity or debt securities that the Company would issue may have rights, preferences or privileges senior to those of the holders of its common stock. To date, the Company has financed its cash requirements primarily from equity financings. The Company will need to raise funds immediately to continue its operations and increase demand for its services. Until it can generate sufficient revenues to meet its cash requirements, which it may never do, the Company must continue to finance future cash needs primarily through public or private equity offerings, debt financings or strategic collaborations. The Company's liquidity and capital requirements depend on several factors, including the rate of market acceptance of its services, the future profitability of the Company, the rate of growth of the Company's business and other factors described elsewhere in this Annual Report on Form 10-K. The Company continues to explore additional sources of capital, but there is substantial doubt as to whether any financing arrangement will be available in amounts and on terms acceptable to the Company to permit it to continue operations. The accompanying consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Sep. 30, 2018 | |
Accounting Policies [Abstract] | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with GAAP and applicable rules and regulations of the Securities and Exchange Commission (the “SEC”) regarding interim financial reporting. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting of normal recurring accruals and adjustments) necessary to present fairly the financial position, changes in stockholders’ equity, results of operations and cash flows of the Company at the dates and for the periods indicated. The interim results for the quarter ended March 31, 2019 are not necessarily indicative of results for the full 2019 fiscal year or any other future interim periods. As such, the information included in this quarterly report on Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company’s Form 10- K for the year ended September 30, 2018. Basis of Consolidation The unaudited condensed consolidated financial statements include the results of the Company, its wholly owned subsidiary, Arcadian, two professional associations, Arcadian Telepsychiatry PA (“Texas PA”) incorporated in Texas, Arcadian Telepsychiatry Florida P.A. (“Florida PA”) incorporated in Florida, and two professional corporations, Arcadian Telepsychiatry P.C. (“Pennsylvania PC”) incorporated in Pennsylvania and Arcadian Telepsychiatry of California, P.C. incorporated in California (“California PC” and together with the Pennsylvania PC, Florida PA and Texas PA, the “Arcadian Entities.”) Arcadian is party to Management Services Agreements by and among it and the Arcadian Entities, pursuant to which Arcadian provides management and administrative services to each of the Arcadian Entities. Each entity is established pursuant to the requirements of its respective domestic jurisdiction governing the corporate practice of medicine. All intercompany balances and transactions have been eliminated upon consolidation. Segments We view our operations and manage our business as one operating segment. Variable Interest Entities (VIE) On November 13, 2017, Arcadian entered into a management and administrative services agreement with Texas PA and with Pennsylvania PC, for an initial fixed term of 20 years. In accordance with relevant accounting guidance, Texas PA and Pennsylvania PC are each determined to be a Variable Interest Entity (“VIE”) as MYnd is the primary beneficiary with the ability to direct the activities (excluding clinical decisions) that most significantly affect Texas PA’s and Pennsylvania PC’s economic performance through its majority representation of the Texas PA and Pennsylvania PC; therefore, Texas PA and Pennsylvania PC are consolidated by MYnd. On January 19, 2018, Arcadian entered into a management and administrative services agreement with California PC, for an initial fixed term of 20 years. In accordance with relevant accounting guidance, California PC is determined to be a VIE and MYnd is the primary beneficiary with the ability to direct the activities (excluding clinical decisions) that most significantly affect California PC’s economic performance through its majority representation of California PC; therefore, California PC is consolidated by MYnd. On March 27, 2018, Arcadian entered into a management and administrative services agreement with Florida PA, for an initial fixed term of 20 years. In accordance with relevant accounting guidance, Florida PA is determined to be a VIE and MYnd is the primary beneficiary with the ability to direct the activities (excluding clinical decisions) that most significantly affect Florida PA’s economic performance through its majority representation of Florida PA; therefore, Florida PA is consolidated by MYnd. The Company holds a variable interest in the entities which contract with physicians and other health professionals in order to provide telepsychiatry services to Arcadian. The entities are considered variable interest entities since they do not have sufficient equity to finance their activities without additional financial support. An enterprise having a controlling financial interest in a VIE must consolidate the VIE if it has both power and benefits-that is, it has (1) the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance (power) and (2) the obligation to absorb losses of the VIE that potentially could be significant to the VIE or the right to receive benefits from the VIE that potentially could be significant to the VIE (benefits). The Company has the power and rights to control all activities of the entities and funds and absorbs all losses of the VIE. In accordance with management service agreements entered into between the Company and medical professional corporations and associations in compliance with regulatory requirements within certain states, the Company has the power to direct activities of the VIE’s and may transfer the assets from the individual VIEs. Therefore, the Company considers that there are no assets in any of the consolidated VIEs that may be relied upon to settle obligations of these entities. Furthermore, creditors of the VIEs do not have recourse to the general credit of the Company for any of the liabilities of the VIEs. Finally, none of the professional corporations or associations have purchased equipment nor are they responsible for handling cash or accounts receivable. There is no either explicit or implicit arrangement that requires the Company to provide financial support to the VIE, including events or circumstances that could expose the Company to a loss. For the six months ended March 31, 2019 and 2018, the Company did not provide, nor does it intend to provide in the future, any financial or other support either explicitly or implicitly during the periods presented to its variable interest entities. In addition, there are no restrictions on the net income earned by the VIEs. The Company allocates all of the net income earned to the primary owner of the VIE. As part of the operating agreement with the VIE, the Company will be reimbursed for all cost incurred related to operating the VIE in addition to a management fee charged for oversight. For the six months ended March 31, 2019 and 2018, no net income was allocated to the VIEs nor have any dividends been paid from the Company to the VIEs from inception to date, respectively. In addition, to the extent that the VIE is not a shareholder of the Company, the Company has not paid any dividends to the VIEs from inception to date and there are no dividend obligations within the management services agreement entered into with the medical professional corporations and associations. Use of Estimates The preparation of the unaudited condensed consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expense, and related disclosure of assets and liabilities. On an ongoing basis, the Company evaluates its estimates, including those related to revenue recognition, allowance for doubtful accounts, useful lives of furniture and equipment, intangible assets, valuation allowance on deferred taxes, valuation of equity instruments, and accrued liabilities. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from these estimates. Cash and Cash Equivalents The Company considers all liquid instruments purchased with a maturity of three months or less to be cash equivalents. The Company deposits its cash with major financial institutions and may at times exceed the federally insured limit of $250,000. At March 31, 2019 cash exceeds the federally insured limit by $1.1 million. The Company believes that the risk of loss is minimal. To date, the Company has not experienced any losses related to cash deposits with financial institutions. Debt Instruments Debt instruments are initially recorded at fair value, with coupon interest and amortization of debt issuance discounts recognized in the statement of operations as interest expense at each period end while such instruments are outstanding. Fair Value of Financial Instruments Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, ASC 825-10 Recognition and Measurement of Financial Assets and Financial Liabilities defines financial instruments and requires disclosure of the fair value of financial instruments held by the Company. The Company considers the carrying amount of cash, accounts receivable, other receivables, accounts payable and accrued liabilities, to approximate their fair values because of the short period of time between the origination of such instruments and their expected realization. The Company also analyzes all financial instruments with features of both liabilities and equity under ASC 480-10, ASC 815-10 and ASC 815-40. The FASB has established a framework for measuring fair value using generally accepted accounting principles. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy are described as follows: ● Level I inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets; ● Level II inputs to the valuation methodology include: ○ Quoted prices for similar assets or liabilities in active markets; ○ Quoted prices for identical or similar assets or liabilities in inactive markets; Inputs other than quoted prices that are observable for the asset or liability; ○ Inputs that are derived principally from or corroborated by observable market data by correlation or other means; If the asset or liability has a specified (contractual) term, the level 2 input must be observable for substantially the full term of the asset or liability. ● Level III inputs to the valuation methodology are unobservable and significant to the fair value measurement. The asset or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used must maximize the use of observable inputs and minimize the use of unobservable inputs. Accounts Receivable, net The Company estimates the collectability of customer receivables on an ongoing basis by reviewing past-due invoices and assessing the current creditworthiness of each customer. Allowances are provided for specific receivables deemed to be at risk for collection which as of March 31, 2019 and September 30, 2018 were $8,100 and $1,800, respectively. Property and Equipment Property and equipment, which are recorded at cost, consist of office furniture and equipment which are depreciated, over their estimated useful lives on a straight-line basis. The useful lives of these assets are estimated to be between three and five years. Depreciation expense on furniture and equipment for the three months ended March 31, 2019 and 2018 was $16,100 and $15,600, respectively. Depreciation expense on furniture and equipment for the six months ended March 31, 2019 and 2018 was 32,300 and 28,000, respectively. Accumulated depreciation at March 31, 2019 and September 30, 2018 was $181,500 and 149,200, respectively. Intangible Assets Costs for software developed for internal use are accounted for through the capitalization of those costs incurred in connection with developing or obtaining internal-use software. Capitalized costs for internal-use software are included in intangible assets in the unaudited condensed consolidated balance sheets. Capitalized software development costs are amortized over three years. Costs incurred during the preliminary project along with post-implementation stages of internal use computer software development and costs incurred to maintain existing product offerings are expensed as incurred. The capitalization and ongoing assessment of recoverability of development costs require considerable judgment by management with respect to certain external factors, including, but not limited to, technological and economic feasibility and estimated economic life. On November 13, 2017, the Company acquired customer relationship and tradename intangibles in connection with the Arcadian acquisition which were recorded at fair value and are being amortized over an estimated useful life of four years on a straight-line basis. Amortization for the three months ended March 31, 2019 and 2018 was $14,000 and $13,800, respectively. Amortization for the six months ended March 31, 2019 and 2018 was 28,000 and 24,700, respectively. Accumulated amortization was $122,300 and $94,200 at March 31, 2019 and September 30, 2018 respectively. The expected amortization of the intangible assets, as of March 31, 2019, is as follows: For the year ended September 30, Intangible assets 2019 (for the remaining six months) $ 26,100 2020 29,400 2021 29,400 2022 3,500 Total $ 88,400 Goodwill Goodwill represents the excess of the aggregate purchase price paid over the fair value of the net assets acquired in our business combinations. Goodwill is not amortized and is tested for impairment at least annually or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Events or changes in circumstances that could trigger an impairment review include a significant adverse change in business climate, an adverse action or assessment by a regulator, unanticipated competition, a loss of key personnel, significant changes in the manner of our use of the acquired assets or the strategy for our overall business, significant negative industry or economic trends, or significant under performance relative to expected historical or projected future results of operations. The Company has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying value, including goodwill. If, after assessing the totality of events or circumstances, the Company determines that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, additional impairment testing is not required. The Company tests for goodwill impairment annually on September 30. The Company performed a qualitative goodwill assessment at September 30, 2018 and concluded there was no impairment based on consideration of a number of factors, including the improvement in the Company’s key operating metrics over the prior year, improvement in the strength of the general economy and the Company’s continued execution against its overall strategic objectives. Based on the foregoing, the Company determined that it was not more likely than not that the fair value of its reporting unit is less than its carrying amount and therefore that no further impairment testing was required. During the six months ended March 31, 2019, the Company did not record any Goodwill impairment. Accrued Compensation Accrued compensation consists of accrued vacation pay, accrued compensation granted by the Board but not paid, and accrued pay due to staff members. Accrued compensation – related parties consists of accrued vacation pay, accrued bonuses granted by the Board but not paid for officers and directors. Deferred Revenue Deferred revenue represents cash collected in advance of services being rendered but not earned as of March 31, 2019 and September 30, 2018. This represents a philanthropic grant for the payment of PEER Reports ordered in a clinical trial for a member of the U.S. Military, a veteran or their family members, the cost of which is not covered by other sources. On August 1, 2017, the Company entered into a Research Study Funding Agreement with Horizon Healthcare Services, Inc. dba Horizon Blue Cross Blue Shield of New Jersey and its subsidiaries (collectively “Horizon”) and Cota, Inc. (“Cota”). On February 6, 2018, Horizon prepaid for part of the study in the amount of $125,000 and the Company paid Cota $15,000 out of this payment for its services under the Study. These deferred revenue grant funds total $152,100 and $159,700 as of March 31, 2019 and September 30, 2018, respectively. Revenue Recognition Neurometric services - gross service revenue is recorded in the accounting records at the time the services are provided on an accrual basis at the provider’s established rates, regardless of whether the provider expects to collect that amount. The Company reserves a provision for contractual adjustment and discounts that are deducted from gross service revenue. The Company reports revenues net of any sales, use and value added taxes. Telepsychiatry services - The Company satisfies its performance obligation to stand ready to provide telepsychiatry services which occurs when the Company’s clients have access to the telepsychiatry service. The Company generally bills for the telepsychiatry services on a monthly basis with payment terms generally being 30 days. There are not significant differences between the timing of revenue recognition and billing. Consequently, the Company has determined that client contracts do not include a financing component. Revenue is recognized in an amount that reflects the consideration that is expected in exchange for the service and this may include a variable transaction price as the number of members may vary from the initial billing. Based on historical experience, the Company estimates this amount which is recorded as a component of revenue. Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers . Revenue Recognition Revenue from providing neurometric and telepsychiatry services are recognized under Topic 606 in a manner that reasonably reflects the delivery of its services to customers in return for expected consideration and includes the following elements: ○ executed contracts with the Company’s customers that it believes are legally enforceable; ○ identification of performance obligations in the respective contract; ○ determination of the transaction price for each performance obligation in the respective contract; ○ allocation the transaction price to each performance obligation; and ○ recognition of revenue only when the Company satisfies each performance obligation. Research and Development Expenses The Company charges research and development expenses to operations as incurred. Advertising Expenses The Company charges all advertising expenses to operations as incurred. For the three months ended March 31, 2019 and 2018 advertising expenses were $4,800 and $97,500, respectively. For the six months ended March 31, 2019 and 2018 advertising expenses were $4,800 and $248,500, respectively Stock-Based Compensation The Company accounts for employee stock options in accordance with ASC 718, Compensation-Stock Compensation. For stock options issued to employees and directors we use the Black-Scholes option valuation model for estimating fair value at the date of grant. For stock options issued for services rendered by non-employees, we recognize compensation expense in accordance with the requirements of ASC 505-50, Equity, as amended. Non-employee option grants that do not vest immediately upon grant are recorded as an expense over the vesting period. At the end of each financial reporting period prior to performance, the value of these options, as calculated using the Black-Scholes option valuation model, is determined, and compensation expense recognized or recovered during the period is adjusted accordingly. Since the fair value of options granted to non-employees is subject to change in the future, the amount of the future compensation expense is subject to adjustment until the common stock options or warrants are fully vested. Warrants From time to time, the Company has issued warrants to purchase shares of common stock. These warrants have been issued in connection with the Company’s financing transactions. The Company’s warrants are subject to standard anti-dilution provisions applicable to shares of our common stock. The Company estimates the fair value of warrants using the Black-Scholes option valuation model with the following inputs: market prices of the stock, time to maturity, volatility, zero expected dividend rate and risk free rate all at the date of the warrant issuance. Income Taxes The Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are recorded, when necessary, to reduce deferred tax assets to the amount expected to be realized. On December 22, 2017, new legislation was adopted that significantly revises the Internal Revenue Code of 1986, as amended, or the Code. The newly enacted federal income tax law, among other things, contains significant changes to corporate taxation, including reduction of the corporate tax rate from a top marginal rate of 35 percent to a flat rate of 21 percent, limitation of the tax deduction for interest expense to 30 percent of adjusted earnings (except for certain small businesses), limitation of the deduction for net operating losses to 80 percent of current-year taxable income and elimination of net operating loss carrybacks, one time taxation of offshore earnings at reduced rates regardless of whether they are repatriated, immediate deductions for certain new investments instead of deductions for depreciation expense over time, and modifying or repealing many business deductions and credits. As a result of the implementation of certain provisions of FASB ASC 740, Income Taxes, which clarifies the accounting and disclosure for uncertainty in tax positions, the Company has analyzed filing positions in each of the federal and state jurisdictions where required to file income tax returns, as well as all open tax years in these jurisdictions. We have identified U.S. Federal and California as our major tax jurisdictions. Generally, the Company remains subject to Internal Revenue Service examination of our 2014 through 2016 U.S. federal income tax returns, and remain subject to California Franchise Tax Board examination of our 2013 through 2016 California Franchise Tax Returns. The Company has certain tax attribute carryforwards which will remain subject to review and adjustment by the relevant tax authorities until the statute of limitations closes with respect to the year in which such attributes are utilized. The Company believes that its income tax filing positions and deductions will be sustained on audit and do not anticipate any adjustments that will result in a material change to its financial position. Therefore, no reserves for uncertain income tax positions have been recorded pursuant to ASC 740. Our policy for recording interest and penalties associated with income-based tax audits is to record such items as a component of income taxes. Deferred taxes have been recorded on a net basis in the accompanying balance sheet. The Act reduces the U.S. statutory tax rate from 35% to 21%, effective January 1, 2018. As of September 30, 2018, the Company had gross Federal net operating loss carryforwards of approximately $60.2 million and State gross net operating loss carryforwards of approximately $33.8 million. Both the Federal and State net operating loss carryforwards will begin to expire in 2022 and 2023 respectively. The Company’s ability to utilize net operating loss carryforwards may be limited in the event that a change in ownership, as defined in the Internal Revenue Code, occurs in the future. The Company has placed a valuation allowance against the deferred tax assets in excess of deferred tax liabilities due to the uncertainty surrounding the realization of such excess tax assets. Management periodically evaluates the recoverability of the deferred tax assets and the level of the valuation allowance. At such time as it is determined that it is more likely than not that the deferred tax assets are realizable, the valuation allowance will be reduced accordingly. Non-controlling Interest The Company consolidates entities in which the Company has a controlling financial interest. The Company consolidates subsidiaries in which the Company holds, directly or indirectly, more than 50% of the voting rights, and VIEs for which the Company is the primary beneficiary. Non-controlling interests represent third-party equity ownership interests in the Company’s consolidated entities. The amount of net loss attributable to non-controlling interests for the three months ended March 31, 2019 and 2018 was $451,100 and $72,300, respectively. The amount of net loss attributable to non-controlling interests for the six months ended March 31, 2019 and 2018 was $778,000 and $72,300, respectively. Earnings (Loss) per Share Basic and diluted earnings (loss) per share is presented in conformity with the two-class method. Under the two-class method, basic net loss per share is computed by dividing income (loss) available to common stockholders by the weighted average common shares outstanding during the period. Net loss per share is calculated as the net loss less the current period preferred stock dividends. Diluted earnings (loss) per share takes into account the potential dilution that could occur if securities or other contracts to issue Common Stock were exercised and converted into Common Stock. Recent Accounting Pronouncements Apart from the below-mentioned recent accounting pronouncements, there are no new accounting pronouncements that are currently applicable to the Company. In June 2018, the FASB issued ASU 2018-07, Improvements to Nonemployee Share-Based Payment Accounting (Topic 718). The amendments in this Update expand the scope of Topic 718 to include share based payment transactions for acquiring goods and services from nonemployees. An entity should apply the requirements of Topic 718 to nonemployee awards except for specific guidance on inputs to an option pricing model and the attribution of cost (that is, the period of time over which share-based payment awards vest and the pattern of cost recognition over that period). The amendments specify that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. The amendments also clarify that Topic 718 does not apply to share-based payments used to effectively provide (1) financing to the issuer or (2) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under Topic 606, Revenue from Contracts with Customers. The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. The Company is currently evaluating the impact of adoption of this standard to its financial statements. ASU 2016-15, “Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Payments” was issued by the Financial Accounting Standards Board (FASB) in August 2016. The purpose of this amendment is to address eight specific cash flow issues with the objective of reducing the existing diversity in practice. The amendments in this Update are effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is permitted. The Company adopted ASU 2016-15 during our first quarter of fiscal year 2019, which had no impact on our consolidated financial statements, and will apply the new guidance in future periods. ASU 2016-02, “Leases (Topic 842)” was issued by the FASB in February 2016. The guidance requires lessees to recognize the assets and liabilities that arise from leases on the balance sheet. ASU 2016-02 is effective for annual periods beginning after December 15, 2018, including interim periods within those annual periods, and should be applied using a modified retrospective approach. The guidance is effective for the Company on October 1, 2019. The Company will elect the prospective transition method with the effects of adoption recognized as a cumulative effect adjustment to the opening balance of retained earnings in the Company’s fiscal 2020 financial statements, with no restatement of comparative periods. The Company will also elect the package of three practical expedients permitted under the transition guidance within the new standard, which among other things, allows the Company to carryforward the historical lease classification. The Company is currently assessing the impact of adopting this guidance on its consolidated financial statements and related disclosures. The Company expects to record right of use assets and lease liabilities, which may be material, on its consolidated balance sheet upon adoption of this standard and is still assessing the impact to its results of operations and cash flows. Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers . Revenue Recognition | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying consolidated financial statements of the Company have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the "SEC") and are in accordance with accounting principles generally accepted in the United States of America. Basis of Consolidation The audited consolidated financial statements include the results of MYnd, its wholly owned subsidiary, Arcadian Telepsychiatry Services LLC ("Arcadian Services"), two professional associations, Arcadian Telepsychiatry PA ("Texas PA") which is incorporated in Texas and Arcadian Telepsychiatry Florida P.A. ("Florida PA") which is incorporated in Florida, and two professional corporations, Arcadian Telepsychiatry P.C. ("Pennsylvania PC") which is incorporated in Pennsylvania and Arcadian Telepsychiatry of California, P.C. ("California PC") which is incorporated in California collectively "the Arcadian Entities." Arcadian Services is party to Management Services Agreements by and among it and the Arcadian Entities pursuant to which each entity provides services to Arcadian Services. Each entity is established pursuant to the requirements of its respective domestic jurisdiction governing the corporate practice of medicine. All intercompany balances and transactions have been eliminated upon consolidation. Segments We view our operations and manage our business as one operating segment. Variable Interest Entities (VIE) On November 13, 2017, Arcadian Services entered into a management and administrative services agreement with Texas PA and with Pennsylvania PC, for an initial fixed term of 20 years. In accordance with relevant accounting guidance, Texas PA and Pennsylvania PC are determined to be a Variable Interest Entity ("VIE") as MYnd is the primary beneficiary with the ability to direct the activities (excluding clinical decisions) that most significantly affect Texas PA's and Pennsylvania PC's economic performance through its majority representation of the Texas PA and Pennsylvania PC; therefore, Texas PA and Pennsylvania PC are consolidated by MYnd. On January 19, 2018, Arcadian Services entered into a management and administrative services agreement with California PC, for an initial fixed term of 20 years. In accordance with relevant accounting guidance, California PC is determined to be a VIE and MYnd is the primary beneficiary with the ability to direct the activities (excluding clinical decisions) that most significantly affect California PC's economic performance through its majority representation of California PC; therefore, California PC is consolidated by MYnd. On March 27, 2018, Arcadian Services entered into a management and administrative services agreement with Florida PA, for an initial fixed term of 20 years. In accordance with relevant accounting guidance, Florida PA is determined to be a VIE and MYnd is the primary beneficiary with the ability to direct the activities (excluding clinical decisions) that most significantly affect Florida PA's economic performance through its majority representation of Florida PA; therefore, Florida PA is consolidated by MYnd. The Company holds a variable interest in the entities which contract with physicians and other health professionals in order to provide telepsychiatry services to Arcadian Services. The entities are considered variable interest entities since they do not have sufficient equity to finance their activities without additional financial support. An enterprise having a controlling financial interest in a VIE must consolidate the VIE if it has both power and benefits, that is, it has (1) the power to direct the activities of a VIE that most significantly impact the VIE's economic performance (power) and (2) the obligation to absorb losses of the VIE that potentially could be significant to the VIE or the right to receive benefits from the VIE that potentially could be significant to the VIE (benefits). The Company has the power and rights to control all activities of the entities and funds and absorbs all losses of the VIE. Use of Estimates The preparation of the consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expense, and related disclosure of contingent assets and liabilities. On an ongoing basis, the Company evaluates its estimates, including those related to revenue recognition, doubtful accounts, intangible assets, income taxes, valuation of equity instruments, accrued liabilities, contingencies and litigation. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from these estimates. Cash and Cash Equivalents The Company considers all liquid instruments purchased with a maturity of three months or less to be cash equivalents. The Company deposits its cash with major financial institutions and may at times exceed the federally insured limit of $250,000. At September 30, 2018 cash exceeds the federally insured limit by $3.0 million. The Company believes that the risk of loss is minimal. To date, the Company has not experienced any losses related to cash deposits with financial institutions. Debt Instruments Debt instruments are initially recorded at fair value, with coupon interest and amortization of debt issuance discounts recognized in the statement of operations as interest expense at each period end while such instruments are outstanding. Fair Value of Financial Instruments Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, ASC 825-10 - Recognition and Measurement of Financial Assets and Financial Liabilities defines financial instruments and requires disclosure of the fair value of financial instruments held by the Company. The Company considers the carrying amount of cash, accounts receivable, other receivables, accounts payable and accrued liabilities, to approximate their fair values because of the short period of time between the origination of such instruments and their expected realization. The Company also analyzes all financial instruments with features of both liabilities and equity under ASC 480-10, ASC 815-10 and ASC 815-40. The FASB has established a framework for measuring fair value using generally accepted accounting principles. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy are described as follows: ● Level I inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets; ● Level II inputs to the valuation methodology include: ○ quoted prices for similar assets and liabilities in active markets; ○ Quoted prices for identical or similar assets or liabilities in inactive markets; ○ Inputs other than quoted prices that are observable for the asset or liability; ○ Inputs that are derived principally from or corroborated by observable market data by correlation or other means; If the asset or liability has a specified (contractual) term, the level 2 input must be observable for substantially the full term of the asset or liability. ● Level III inputs to the valuation methodology are unobservable and significant to the fair value measurement. The asset or liability's fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used must maximize the use of observable inputs and minimize the use of unobservable inputs. Accounts Receivable The Company estimates the collectability of customer receivables on an ongoing basis by reviewing past-due invoices and assessing the current creditworthiness of each customer. Allowances are provided for specific receivables deemed to be at risk for collection which as of September 30, 2018 and 2017 are $1,800 and $1,000 respectively. Property and Equipment Property and Equipment, which are recorded at cost, consist of office furniture and equipment, which are depreciated, over their estimated useful lives on a straight-line basis. The useful lives of these assets is estimated to be between three and five years. Depreciation expense on furniture and equipment for the twelve months ended September 30, 2018 and 2017 was $60,300 and $19,700 respectively. Accumulated depreciation at September 30, 2018 and 2017 was $149,200 and $84,200, respectively. Long-Lived Assets As required by ASC 350-30 - Intangibles—Goodwill and other, the Company reviews the carrying value of its long-lived assets at least annually or whenever events or changes in circumstances indicate that the historical cost-carrying value of an asset may no longer be recoverable. The Company assesses recoverability of the carrying value of the asset by estimating the future undiscounted net cash flows expected to result from the asset, including eventual disposition. If the future net cash flows are less than the carrying value of the asset, an impairment loss is recorded equal to the difference between the asset's carrying value and fair value. No impairment loss was recorded for the years ended September 30, 2018 and 2017. Intangible Assets Costs for software developed for internal use are accounted for through the capitalization of those costs incurred in connection with developing or obtaining internal-use software. Capitalized costs for internal-use software are included in intangible assets in the consolidated balance sheet. Capitalized software development costs are amortized over three years. Costs incurred during the preliminary project along with post-implementation stages of internal use computer software development and costs incurred to maintain existing product offerings are expensed as incurred. The capitalization and ongoing assessment of recoverability of development costs require considerable judgment by management with respect to certain external factors, including, but not limited to, technological and economic feasibility and estimated economic life. At September 30, 2018, the Company had $101,700 in capitalized software development costs. Amortization for the twelve months ended September 30, 2018 and 2017 was $29,000 and $29,000, respectively. Accumulated amortization was $70,400 and $39,300 at September 30, 2018 and 2017, respectively. On November 13, 2017, the Company acquired customer relationships and tradename intangibles in connection with the Arcadian Services acquisition of which $109,000 were recorded at fair value and are being amortized over an estimated useful life of four years on a straight-line basis. Amortization for the twelve months ended September 30, 2018 and 2017 was $23,800 and none, respectively. Accumulated amortization was $23,800 and $0 at September 30, 2018 and 2017, respectively. The expected amortization of the intangible assets, as of September 30, 2018, for each of the next four years is as follows: For the year ended September 30, Intangible 2019 $ 54,200 2020 29,400 2021 29,400 2022 3,500 Total $ 116,500 Goodwill Goodwill represents the excess of the aggregate purchase price paid over the fair value of the net assets acquired in our business combinations. Goodwill is not amortized and is tested for impairment at least annually or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Events or changes in circumstances that could trigger an impairment review include a significant adverse change in business climate, an adverse action or assessment by a regulator, unanticipated competition, a loss of key personnel, significant changes in the manner of our use of the acquired assets or the strategy for our overall business, significant negative industry or economic trends, or significant underperformance relative to expected historical or projected future results of operations. The Company has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying value, including goodwill. If, after assessing the totality of events or circumstances, the Company determines that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, additional impairment testing is not required. The Company tests for goodwill impairment annually on September 30. The Company performed a qualitative goodwill assessment at September 30, 2018 and concluded there was no impairment based on consideration of a number of factors, including the improvement in the Company's key operating metrics over the prior year, improvement in the strength of the general economy and the Company's continued execution against its overall strategic objectives. Based on the foregoing, the Company determined that it was not more likely than not that the fair value of its reporting unit is less than its carrying amount and therefore that no further impairment testing was required. Accrued Compensation Accrued compensation consists of accrued vacation pay, accrued compensation granted by the Board but not paid, and accrued pay due to staff members. Accrued compensation – related parties consists of accrued vacation pay, accrued bonuses granted by the Board but not paid for officers and directors. Deferred Revenue Deferred revenue represents cash collected in advance of services being rendered but not earned as of September 30, 2018 and 2017. This represents a philanthropic grant for the payment of PEER Reports ordered in a clinical trial for a member of the U.S. Military, a veteran or their family members, the cost of which is not covered by other sources. On August 1, 2017, the Company entered into a Research Study Funding Agreement with Horizon Healthcare Services, Inc. dba Horizon Blue Cross Blue Shield of New Jersey and its subsidiaries (collectively "Horizon") and Cota, Inc. ("Cota"). On February 6, 2018, Horizon prepaid for part of the study, $125,000 and the Company paid Cota $15,000 out of this payment for its services under the Study. These deferred revenue grant funds total $159,700 and $45,900 as of September 30, 2018 and 2017, respectively. Revenues The Company derives substantially all of its revenue from neurometric and telepsychiatry services. The Company recognizes revenues in accordance with ASC 605, and accordingly revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable, collectability is reasonably assured and acceptance criteria, if any, have been met. If any of these criteria are not met, revenue recognition is deferred until such time that all of the criteria are met. The Company's neurometric and telepsychiatry services are recognized in the month the services are delivered by the physician. Research The Company charges research and development expenses to operations as incurred. Advertising Expenses The Company charges all advertising expenses to operations as incurred. For the year ended September 30, 2018 and 2017 advertising expenses were $248,600 and $152,000, respectively. Stock-Based Compensation The Company accounts for awards to employees in accordance with ASC 718, Compensation-Stock Compensation. For stock options issued to employees and directors we use the Black-Scholes option valuation model for estimating fair value at the date of grant. For stock options issued for services rendered by non-employees, we recognize compensation expense in accordance with the requirements of ASC 505-50, Equity, or ASC 505-50, as amended. Non-employee option grants that do not vest immediately upon grant are recorded as an expense over the vesting period. At the end of each financial reporting period prior to performance, the value of these options, as calculated using the Black-Scholes option valuation model, is determined, and compensation expense recognized or recovered during the period is adjusted accordingly. Since the fair value of options granted to non-employees is subject to change in the future, the amount of the future compensation expense is subject to adjustment until the common stock options or warrants are fully vested. Warrants From time to time, the Company has issued warrants to purchase shares of common stock. These warrants have been issued in connection with the Company's financing transactions. The Company's warrants are subject to standard anti-dilution provisions applicable to shares of our common stock. The Company estimates the fair value of warrants using the Black-Scholes option valuation model with the following assumptions: market prices of the stock, time to maturity, volatility, zero expected dividend rate and risk free rate all at the date of the warrant issuance. Income Taxes The Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are recorded, when necessary, to reduce deferred tax assets to the amount expected to be realized. On December 22, 2017, President Trump signed into law new legislation that significantly revises the Internal Revenue Code of 1986, as amended, or the Code. The newly enacted federal income tax law, among other things, contains significant changes to corporate taxation, including reduction of the corporate tax rate from a top marginal rate of 35 percent to a flat rate of 21 percent, limitation of the tax deduction for interest expense to 30 percent of adjusted earnings (except for certain small businesses), limitation of the deduction for net operating losses to 80 percent of current-year taxable income and elimination of net operating loss carrybacks, one time taxation of offshore earnings at reduced rates regardless of whether they are repatriated, immediate deductions for certain new investments instead of deductions for depreciation expense over time, and modifying or repealing many business deductions and credits. As a result of the implementation of certain provisions of FASB ASC 740, Income Taxes, which clarifies the accounting and disclosure for uncertainty in tax positions, the Company has analyzed filing positions in each of the federal and state jurisdictions where required to file income tax returns, as well as all open tax years in these jurisdictions. We have identified U.S. Federal and California as our major tax jurisdictions. Generally, we remain subject to Internal Revenue Service examination of our 2013 through 2016 U.S. federal income tax returns, and remain subject to California Franchise Tax Board examination of our 2012 through 2016 California Franchise Tax Returns. We have certain tax attribute carryforwards which will remain subject to review and adjustment by the relevant tax authorities until the statute of limitations closes with respect to the year in which such attributes are utilized. We believe that our income tax filing positions and deductions will be sustained on audit and do not anticipate any adjustments that will result in a material change to our financial position. Therefore, no reserves for uncertain income tax positions have been recorded pursuant to ASC 740. Our policy for recording interest and penalties associated with income-based tax audits is to record such items as a component of income taxes. Non-controlling Interest The Company consolidates entities in which the Company has a controlling financial interest. The Company consolidates subsidiaries in which the Company holds, directly or indirectly, more than 50% of the voting rights, and VIEs for which the Company is the primary beneficiary. Non-controlling interests represent third-party equity ownership interests in the Company's consolidated entities. The amount of net loss attributable to non-controlling interests for the year ended September 30, 2018 and 2017 was $734,400 and $0, respectively. Earnings (Loss) per Share Basic and diluted earnings (loss) per share is presented in conformity with the two-class method. Under the two-class method, basic net loss per share is computed by dividing income (loss) available to common stockholders by the weighted average common shares outstanding during the period. Net loss per share is calculated as the net loss less the current period preferred stock dividends. Diluted earnings (loss) per share takes into account the potential dilution that could occur if securities or other contracts to issue Common Stock were exercised and converted into Common Stock. Recent Accounting Pronouncements Apart from the below-mentioned recent accounting pronouncements, there are no new accounting pronouncements that are currently applicable to the Company. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, as amended, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers, or the new revenue standard. The new revenue standard also includes Subtopic 340-40, Other Assets and Deferred Costs - Contracts with Customers, which discusses the deferral of incremental costs of obtaining a contract with a customer. The new revenue standard is effective for annual periods beginning after December 15, 2017. The standard permits the use of either a full retrospective or modified retrospective transition method. The Company will adopt the new revenue standard as of October 1, 2018, using the modified retrospective transition method applied to those contracts which were not completed as of that date. Upon adoption, we will recognize the cumulative effect of adopting this guidance as an adjustment to our opening balance of accumulated deficit. Prior periods will not be retrospectively adjusted. We do not expect the new revenue standard to have a material impact on our revenue upon adoption. Also, we do not expect the new standard to have a material impact as it relates to the deferral of incremental costs of obtaining contracts. The Company is in the process of implementing the necessary changes to its accounting policies, processes, internal controls and information systems that will be required to meet the new revenue standard's reporting and disclosure requirements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). This ASU requires that a lessee recognize lease assets and lease liabilities for those leases classified as operating leases. The guidance is effective for interim and annual periods beginning after December 15, 2018. The Company is currently evaluating the impact of adoption of this standard to its financial statements. In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting. This ASU simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, accounting for forfeitures, and classification of awards as either equity or liabilities, and classification on the statement of cash flows. The guidance is effective for interim and annual periods beginning after December 15, 2016, with early adoption permitted. The guidance will be applied prospectively, retrospectively, or by means of a cumulative-effect adjustment to equity as of the beginning of the period in which the guidance is adopted, dependent upon the specific amendment that is adopted within the ASU. The adoption of this new guidance did not have a material effect on the consolidated results of operations, cash flows, and financial position. The Company adopted the guidance on October 1, 2017 and chose to prospectively apply the guidance in its financial statements. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. This guidance narrows the definition of a business. This standard provides guidance to assist entities with evaluating when a set of transferred assets and activities is a business. This guidance is effective for interim and annual reporting periods beginning after December 15, 2017, and early adoption is permitted. This guidance must be applied prospectively to transactions occurring within the period of adoption. The Company adopted ASU 2017-01 on October 1, 2017, and prospectively applied ASU 2017-01 as required with no impact on its consolidated financial position, results of operations or cash flows. In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This guidance eliminates Step 2 from the goodwill impairment test, instead requiring an entity to recognize a goodwill impairment charge for the amount by which the goodwill carrying amount exceeds the reporting unit's fair value. This guidance is effective for interim and annual goodwill impairment tests in fiscal years beginning after December 15, 2019, and early adoption is permitted. This guidance must be applied on a prospective basis. The Company adopted ASU 2017-04 in the first quarter of 2018, and prospectively applied ASU 2017-04 as required with no impact on its consolidated financial position, results of operations or cash flows. In May 2017, the FASB issued ASU 2017-9, "Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting," to provide clarity and reduce both diversity in practice and cost complexity when applying the guidance in Topic 718 to a change to the terms and conditions of a stock-based payment award. ASU 2017-9 also provides guidance about the types of changes to the terms or conditions of a share-based payment award that require an entity to apply modification accounting in accordance with Topic 718. For all entities, including emerging growth companies, the standard is effective for annual periods beginning after December 15, 2017, and for interim periods therein. Early adoption is permitted. The Company adopted the guidance on October 1, 2017 and there was no impact on the financial statements. In July 2017, the FASB issued a two-part ASU 2017-11, I. Accounting for Certain Financial Instruments With Down Round Features and II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Non-controlling Interests with a Scope Exception ("ASU 2017-11"). ASU 2017-11 amends guidance in FASB ASC 260, Earnings Per Share, FASB ASC 480, Distinguishing Liabilities from Equity, and FASB ASC 815, Derivatives and Hedging. The amendments in Part I of ASU 2017-11 change the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features. The amendments in Part II of ASU 2017-11 re-characterize the indefinite deferral of certain provisions of Topic 480 that now are presented as pending content in the Codification, to a scope exception. Those amendments do not have an accounting effect. ASU 2017-11 is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. The Company adopted ASU 2017-11 ended October 1, 2017, and retrospectively applied ASU 2017-11 as required with no impact on its consolidated financial position or results of operations. In June 2018, the FASB issued ASU 2018-07, Improvements to Nonemployee Share-Based Payment Accounting (Topic 718). The amendments in this Update expand the scope of Topic 718 to include share based payment transactions for acquiring goods and services from nonemployees. An entity should apply the requirements of Topic 718 to nonemployee awards except for specific guidance on inputs to an option pricing model and the attribution of cost (that is, the period of time over which share-based payment awards vest and the pattern of cost recognition over that period). The amendments specify that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor's own operations by issuing share-based payment awards. The amendments also clarify that Topic 718 does not apply to share-based payments used to effectively provide (1) financing to the issuer or (2) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under Topic 606, Revenue from Contracts with Customers. The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. The Company is currently evaluating the impact of adoption of this standard to its financial statements. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 6 Months Ended |
Mar. 31, 2019 | |
Revenue Recognition [Abstract] | |
REVENUE RECOGNITION | 3. REVENUE RECOGNITION At the adoption of Topic 606, the cumulative effect of initially applying the new revenue standard is required to be presented as an adjustment to the opening balance of retained earnings. The Company determined there was no impact to opening retained earnings based on applying the new revenue standard. The Company operates as one reportable segment, the healthcare delivery segment. The Company disaggregates revenue from contracts by service type and by payor. This level of detail provides useful information pertaining to how the Company generates revenue by significant revenue stream and by type of direct contracts. The condensed consolidated statements of operations present disaggregated revenue by service type. The following table presents disaggregated revenue for the three and six months ended March 31, 2019 and 2018: Three months ended Six months ended 2019 2018 2019 2018 Neurometric services $ 44,800 $ 79,800 $ 124,000 $ 133,100 Telepsychiatry services 415,300 380,100 723,200 448,800 Revenue 460,100 459,900 847,200 581,900 As of March 31, 2019, accounts receivable, net of allowance for doubtful accounts, was $154,400. The allowance for doubtful accounts reflects our best estimate of probable losses inherent in the accounts receivable balance. The Company determines the allowance based on historical experience, specific account information and other currently available evidence. The Company receives payments from the following sources for services rendered: (i) commercial insurers; (ii) the federal government under the Medicare program administered by CMS; (iii) state governments under the Medicaid and other programs; (iv) other third party payors (e.g., hospitals); and (v) individual patients and clients. As the period between the time of service and time of payment is typically one year or less, the Company elected the practical expedient under ASC 606-10-32-18 and did not adjust for the effects of a significant financing component. The Company derives a significant portion of its revenue from Medicare, Medicaid and other payors that receive discounts from established billing rates. The Medicare and Medicaid regulations and various managed care contracts under which these discounts must be calculated are complex, subject to interpretation and adjustment, and may include multiple reimbursement mechanisms for different types of services provided and cost settlement provisions. Management estimates the transaction price on a payor-specific basis given its interpretation of the applicable regulations or contract terms. The services authorized and provided and related reimbursements are often subject to interpretation that could result in payments that differ from the Company’s estimates. Additionally, updated regulations and contract renegotiations occur frequently, necessitating regular review and assessment of the estimation process by management. Settlements under cost reimbursement agreements with third-party payors are estimated and recorded in the period in which the related services are rendered and are adjusted in future periods as final settlements are determined. Final determination of amounts earned under the Medicare and Medicaid programs often occurs in subsequent years because of audits by such programs, rights of appeal and the application of numerous technical provisions. Under the new revenue standard, the Company has elected to apply the following practical expedients and optional exemptions: ● Recognize incremental costs of obtaining a contract with amortization periods of one year or less as expense when incurred. These costs are recorded within general and administrative expenses. ● Recognize revenue in the amount of consideration to which the Company has a right to invoice the customer if that amount corresponds directly with the value to the customer of the Company’s services completed to date. ● Exemptions from disclosing the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less, (ii) contracts for which revenue is recognized in the amount of consideration to which the Company has a right to invoice for services performed, and (iii) contracts for which variable consideration is allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied promise to transfer a distinct service that forms part of a single performance obligation. ● Use a portfolio approach for the fee-for-service (FFS) revenue stream to group contracts with similar characteristics and analyze historical cash collections trends. ● No adjustment is made for the effects of a significant financing component as the period between the time of service and time of payment is typically one year or less. Contract Assets Typically, revenues and receivables are recognized once the Company has satisfied its performance obligation. Accordingly, the Company’s contract assets are comprised of accounts receivable. Generally, the Company does not have material amounts of other contract assets. Contract Liabilities (Deferred Revenue Contract liabilities are recorded when cash payments are received in advance of the Company’s performance. The Company’s contract liability balance was $152,100 and $159,700 as of March 31, 2019 and September 30, 2018 and is presented within the “Deferred Revenue” line item of the condensed consolidated balance sheets. $7,600 of the amounts recorded as of September 30, 2018 was recognized as revenue for the six months ended March 31, 2019. The Company has elected the optional exemption to not disclose the remaining performance obligations of its contracts since substantially all of its contracts have a duration of one year or less. |
ACCOUNTS RECEIVABLE
ACCOUNTS RECEIVABLE | 6 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Sep. 30, 2018 | |
Receivables [Abstract] | ||
ACCOUNTS RECEIVABLE | 4. ACCOUNTS RECEIVABLE Accounts receivable, net, is as follows: March 31, September 30, Accounts receivable $ 162,500 $ 65,100 Allowance for doubtful accounts (8,100 ) (1,800 ) Accounts receivable, net $ 154,400 $ 63,300 | 3. ACCOUNTS RECEIVABLE, NET Accounts receivable, net, is as follows: September 30, September 30, 2018 2017 Accounts receivable $ 65,100 $ 7,500 Allowance for doubtful accounts (1,800 ) (1,000 ) Accounts receivable, net $ 63,300 $ 6,500 |
LONG - TERM BORROWINGS AND OTHE
LONG - TERM BORROWINGS AND OTHER NOTE PAYABLE | 6 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Sep. 30, 2018 | |
Debt Disclosure [Abstract] | ||
LONG - TERM BORROWINGS AND OTHER NOTE PAYABLE | 5. LONG - TERM BORROWINGS AND OTHER NOTES PAYABLE Debt assumed from Arcadian As a result of the acquisition of Arcadian, the Company guaranteed Arcadian’s then outstanding debt obligations totaling $700,000 owed to Ben Franklin Technology Partners of Southeastern Pennsylvania (“BFTP”). The maturity date for the debt is September 30, 2021 and interest accrues at an 8% annual rate. Unpaid interest was $120,500 as of March 31, 2019. The Company recorded the debt at its fair value and recorded a discount of $93,500 as of March 31, 2019 attributable to the difference between the market interest rate and the stated interest rate on the debt. Interest expense related to the accretion of debt discount for the three months ended March 31, 2019 and 2018 was $9,400 and 9,400, respectively. Interest expense related to the accretion of debt discount for the six months ended March 31, 2019 and 2018 was $18,800 and $14,000, respectively. A balloon payment of $700,000 plus interest will be made on the scheduled maturity date of September 30, 2021. The changes in carrying amounts of the debt acquired through acquisition for the six months ended March 31, 2019 were as follows: Beginning balance (September 30, 2018) $ 587,700 Accretion of debt discount 18,800 Ending balance (March 31, 2019) $ 606,500 | 4. LONG - TERM BORROWINGS AND OTHER NOTES PAYABLE Debt assumed from Arcadian Services As a result of the acquisition of Arcadian Services, the Company guaranteed Arcadian Services' then outstanding debt obligations totaling $700,000 owed to Ben Franklin Technology Partners of Southeastern Pennsylvania ("BFTP"). The maturity date for the debt is September 30, 2021 and interest accrues at an 8% annual rate. Unpaid interest was $110,100 as of September 30, 2018. The Company recorded the debt at its fair value and recorded a discount of $112,300 as of September 30, 2018 attributable to the difference between the market interest rate and the stated interest rate on the debt. Interest expense related to the accretion of debt discount for the twelve months ended September 30, 2018 was $32,800. A balloon payment of $700,000 plus interest will be made on the scheduled maturity date of September 30, 2021. Other Notes Payable Note Payable - finance company, principal is payable over thirty-six equal payments of $1,200 through May 8, 2018. Interest is payable monthly on the unpaid balance at 19% per annum. The outstanding balance was paid in full on May 8, 2018. Loan payable to a vendor, principal payments of $5,000 per month, together with interest computed at 6% per annum. The outstanding balance was paid in full on May 8, 2018. |
ACQUISITION
ACQUISITION | 6 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Sep. 30, 2018 | |
Business Combinations [Abstract] | ||
ACQUISITION | 6. ACQUISITION On November 13, 2017, the Company acquired Arcadian. The Company accounted for the acquisition of Arcadian using the acquisition method of accounting for business combinations under ASC 805, Business Combinations. The total purchase price is allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date. Fair value estimates are based on a complex series of judgments about future events and uncertainties and rely heavily on estimates and assumptions. The judgments used to determine the estimated fair value assigned to each class of assets acquired and liabilities assumed, as well as asset lives and the expected future cash flows and related discount rates, can materiality impact our results of operations. Significant inputs used for the model included the amount of cash flows, the expected period of the cash flows and the discount rates. The purchase price, including the value of the indebtedness and payables of Arcadian, is $1,339,600 based upon a deemed acquisition of all of the assets and liabilities of Arcadian, including the equity interests in Arcadian. The aggregate purchase price consists of (i) initial investment in Arcadian of $195,900 (ii) $317,000 of forgiveness of a note receivable with the primary member of Arcadian (iii) assumption by Arcadian of subordinated debt (“Arcadian Note”) with a fair value of $555,000, plus accrued interest of $96,700 (iv) $175,000 payment for the redemption and cancellation of two warrants to purchase equity interests in Arcadian Services. The Arcadian Note bears interest at an annual rate of 8% and matures on September 30, 2021. Unaudited Pro Forma Financial Information The following unaudited pro forma statement of operations data presents the combined results of operations for the six months ended March 31, 2018 as if the acquisition of Arcadian had taken place on October 1, 2017. The unaudited pro forma financial information includes the effects of certain adjustments, including the amortization of acquired intangibles and the associated tax effect and the elimination of the Company’s and the acquiree’s non-recurring acquisition related expenses. The unaudited pro forma information presented does not purport to be indicative of the results that would have been achieved had the acquisitions been consummated at October 1, 2017 nor of the results which may occur in the future. The pro forma adjustments are based upon available information and certain assumptions that the Company believes are reasonable. Pro Forma Three Months Ended Six Months Ended Revenues $ 459,900 $ 727,100 Net income (loss) (2,659,600 ) (5,605,300 ) Basic and diluted loss per share: $ (0.61 ) $ (1.29 ) Outstanding at weighted average shares outstanding 4,362,564 4,347,745 | 5. ACQUISITION The Company accounted for the acquisition of Arcadian Services using the acquisition method of accounting for business combinations under ASC 805, Business Combinations. The total purchase price is allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date. Fair value estimates are based on a complex series of judgments about future events and uncertainties and rely heavily on estimates and assumptions. The judgments used to determine the estimated fair value assigned to each class of assets acquired and liabilities assumed, as well as asset lives and the expected future cash flows and related discount rates, can materiality impact our results of operations. Significant inputs used for the model included the amount of cash flows, the expected period of the cash flows and the discount rates. The finalization of the purchase accounting assessment may result in a change in the fair value of the debt assumed and intangible assets, which may have a material impact on our results of operations and financial position. On November 13, 2017, the Company acquired Arcadian Services. The purchase price, including the value of the indebtedness and payables of Arcadian Services, is $1,339,600 based upon a deemed acquisition of all of the assets and liabilities of Arcadian Services, including the equity interests in Arcadian Services. The aggregate purchase price consists of (i) initial investment in Arcadian of $195,900 (ii) $317,000 of forgiveness of a note receivable with the primary member of Arcadian (iii) assumption by Arcadian Services of subordinated debt ("Arcadian Note") with a fair value of $555,000, plus accrued interest of $96,700 (iv) $175,000 payment for the redemption and cancellation of two warrants to purchase equity interests in Arcadian Services. The Arcadian Note bears interest at an annual rate of 8% and matures on September 30, 2021. The following table summarizes the allocation of the purchase consideration and the estimated fair value of the assets acquired and the liabilities assumed for the acquisition of Arcadian Services made by the Company: Assets acquired: Cash $ 25,900 Accounts receivable 57,100 Other assets 24,000 Intangibles 109,000 Goodwill 1,386,800 Total assets acquired $ 1,602,800 Liabilities assumed Accounts payable $ 147,700 Accrued other liabilities 108,700 Notes payable 6,800 Total liabilities assumed $ 263,200 Net assets acquired $ 1,339,600 Consideration paid: Initial investment in Arcadian Services 195,900 Long-term debt 555,000 Accrued interest 96,700 Payment on warrant outstanding 175,000 Forgiveness of loan in relation of acquisition 317,000 Total consideration $ 1,339,600 The weighted average useful life of all identified acquired intangible assets is 3.9 years. The useful lives for trade names and customer relationships are 1.0 years and 4.0 years. Identifiable intangible assets with definite lives are amortized over the period of estimated benefit using the straight-line method and the estimated useful lives of one to four years. The straight-line method of amortization represents the Company's best estimate of the distribution of the economic value of the identifiable intangible assets. As a result of the acquisition, the Company recorded $1,386,800 of goodwill. The goodwill balance is primarily attributed to the anticipated synergies from the acquisition and expanded market opportunities with respect to the integration of Arcadian Services' products with the Company's other solutions. The Company believes that the factors listed above support the amount of goodwill recorded as a result of the purchase price paid. For the year ended September 30, 2018, the Company incurred transaction costs of $438,600 and $0 in connection with the Arcadian Services acquisition, which were expensed as incurred and included in general and administrative expenses within the accompanying consolidated statements of operations. Unaudited Pro Forma Financial Information The following unaudited pro forma statement of operations data presents the combined results of operations for the years ended September 30, 2018 and 2017 as if the acquisition of Arcadian Telepsychiatry Services LLC had taken place on October 1, 2016. The unaudited pro forma financial information includes the effects of certain adjustments, including the amortization of acquired intangibles and the associated tax effect and the elimination of the Company's and the acquiree's non-recurring acquisition related expenses. The unaudited pro forma information presented does not purport to be indicative of the results that would have been achieved had the acquisitions been consummated at October 1, 2016 nor of the results which may occur in the future. The pro forma adjustments are based upon available information and certain assumptions that the Company believes are reasonable. Pro Forma Years Ended September 30, 2018 2017 Revenues $ 1,460,800 $ 1,154,500 Net income (loss) $ (10,558,000 ) $ (7,894,700 ) Basic and diluted loss per share: $ (2.03 ) $ (2.80 ) weighted shares outstanding: 5,199,566 2,817,415 |
REVERSE MERGER
REVERSE MERGER | 6 Months Ended |
Mar. 31, 2019 | |
Business Combinations [Abstract] | |
REVERSE MERGER | 7. REVERSE MERGER Merger Agreement On January 4, 2019, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) by and among the Company, the Company’s wholly owned subsidiary, Athena Merger Subsidiary, Inc., a Delaware corporation (“Merger Sub”), and Emmaus Life Sciences, Inc., a Delaware corporation (“Emmaus”). Under the terms of the Merger Agreement, pending stockholder approval of the transaction, Merger Sub will merge with and into Emmaus with Emmaus surviving the merger and becoming a wholly-owned subsidiary of MYnd (the “Merger”). Subject to the terms of the Merger Agreement, at the effective time of the Merger, Emmaus stockholders will receive a number of newly issued shares of MYnd common stock determined using the exchange ratio described below in exchange for their shares of Emmaus stock. Following the Merger, stockholders of Emmaus will become the majority owners of MYnd. The exchange ratio will be determined prior to closing and will cause the MYnd securityholders (including holders of options and warrants) prior to the effective time to collectively own 5.9% of the post-merger company on a fully diluted basis and Emmaus securityholders (including holders of options, warrants and convertible notes) prior to the effective time to collectively own 94.1% of the post-merger company on a fully diluted basis. The exchange ratio will reflect any dilution that may result from securities sold by MYnd or Emmaus prior to the closing of the Merger and any changes to the number of outstanding convertible securities of each company. The Merger Agreement provides that if Emmaus converts certain debt obligations into equity within six months of the completion of the Merger, Emmaus will issue additional shares (equal to 5.9% of the shares issued in connection with the debt conversion to third parties) to an existing subsidiary of MYnd which is expected to be spun-off to stockholders of MYnd prior to the effective time of the merger, as described below. The post-merger company, led by Emmaus’ management team, is expected to be named “Emmaus Life Sciences, Inc.” Prior to the closing of the Merger, MYnd will seek shareholder approval to conduct a reverse split of its outstanding shares if necessary to satisfy listing requirements of the Nasdaq Capital Market (the “NasdaqCM”). The post-merger company is expected to trade on the NasdaqCM under a new ticker symbol. At the closing, the post-merger company’s board of directors is expected to consist of one member from MYnd and up to six members from Emmaus. The Merger has been unanimously approved by the Board of Directors of each company. The transaction is expected to close no later than July 31, 2019, subject to approvals by the stockholders of MYnd and Emmaus, and other closing conditions, including but not limited to the approval of the continued listing of the post-merger company’s common stock on the NasdaqCM, conversion of MYnd’s preferred stock into common stock, satisfaction of certain cash and debt conversion conditions and consummation of the MYnd spin-off described below. The parties to the Merger Agreement have made representations and warranties to each other as of specific dates for the purpose of allocating risk and not for the purpose of establishing facts. Accordingly, the representations and warranties should not be relied on as characterizations of the actual state of facts. The Merger Agreement contains certain termination rights for each of MYnd and Emmaus, and further provides that, upon certain terminations of the Merger Agreement, MYnd may be required to pay Emmaus a termination fee of $750,000 and Emmaus may be required to pay MYnd a termination fee of $750,000; provided that if the termination results from the failure to obtain the approval of the continued listing of the post-merger company’s common stock on the NasdaqCM, this fee payable by Emmaus will be $1,600,000. In connection with the termination of the Merger Agreement upon certain circumstances, either party also may be required to pay the other party’s third party expenses up to $600,000. The termination of the Merger Agreement will not relieve any party thereto from any liability or damages resulting from or arising out of any fraud or willful or intentional breach of any representation, warranty, covenant, obligation or other provision contained in the Merger Agreement. Spin-Off Prior to the closing of the Merger, we intend, subject to obtaining any required regulatory approvals and the completion of certain tax analyses, to transfer all of our businesses, assets and liabilities not assumed by Emmaus to our existing wholly-owned subsidiary, Telemynd, Inc., a Delaware corporation (“Telemynd”), pursuant to the terms of the Amended and Restated Separation and Distribution Agreement (the “Separation Agreement”) entered into on March 27, 2019 by us, Telemynd and MYnd Analytics, Inc., a California corporation (“MYnd California”). We intend to distribute all shares of Telemynd held by us to our stockholders of record as a future record date will be determined for such potential distribution. The Separation Agreement: (i) amended and restated in its entirety that certain Separation and Distribution Agreement dated as of January 4, 2019, by and between MYnd and MYnd California (the “Prior Agreement”) and (ii) caused Telemynd to assume all of the rights and obligations of MYnd California under the Prior Agreement. Pursuant to the Separation Agreement, the Telemynd Business (as defined in the Separation Agreement) would be separated from the Company upon, and subject to, the closing of the transactions contemplated by the Separation Agreement (provided that such transactions occur at all), and the Company intends to distribute all shares of Telemynd held by it to the Company’s stockholders of record as of a future record date to be determined for such potential distribution. The Separation Agreement includes the terms of the proposed spin-off and the distribution to the Company’s stockholders and includes representations and warranties, covenants and conditions, which would impact the terms of the proposed spin-off and distribution. The proposed spin-off will be subject to conditions and regulatory approvals not entirely under the control of the Company and the terms of the proposed spin-off, if and when completed, are subject to change. The foregoing summary of the Separation Agreement is not complete and qualified in its entirety by reference to the text of the Separation Agreement filed herewith. Amendment to Merger Agreement On May 10, 2019, the parties executed amendment no. 1 to the Merger Agreement. By executing amendment no. 1, MYnd, Emmaus and Merger Sub agreed that: (i) the definition “Parent California Subsidiary” should be amended to refer to Telemynd, Inc., the newly formed wholly-owned corporation, (ii) MYnd would not adopt a new equity incentive plan at closing, which had been contemplated previously and determined to be unnecessary at this time, (iii) MYnd would be entitled to receive credit in its Net Liabilities calculation for certain agreed upon prepaid costs, (iv) Telemynd would be entitled to receive shares of MYnd after closing if the exchange ratio applicable to any Emmaus Warrants, Emmaus Convertible Notes or Emmaus Debentures is modified in a manner which causes additional shares of Emmaus to be issued upon exercise, conversation or exchange, during the six (6) month period after the closing of the Merger for any reason, and (v) the outside termination date was extended from May 31, 2019 to July 31, 2019. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 6 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Sep. 30, 2018 | |
Equity [Abstract] | ||
STOCKHOLDERS' EQUITY | 8. STOCKHOLDERS’ EQUITY The Aspire Capital Equity Credit Lines On December 6, 2016, the Company, entered into the first common stock purchase agreement (the “First Purchase Agreement”) with Aspire Capital Fund, LLC (“Aspire Capital”) which provided that, upon the terms and subject to the conditions and limitations set forth therein, Aspire Capital was committed to purchase up to an aggregate of $10.0 million of shares of the Company’s Common Stock over the 30-month term of the First Purchase Agreement. Concurrently with entering into the First Purchase Agreement, the Company also entered into a registration rights agreement with Aspire Capital (the “Registration Rights Agreement”), pursuant to which the Company maintained an effective registration statement registering the sale of the shares of Common Stock that were issued to Aspire under the First Purchase Agreement. Under the First Purchase Agreement, on any trading day selected by the Company on which the closing sale price of its Common Stock is equal to or greater than $0.50 per share, the Company had the right, in its sole discretion, to present Aspire Capital with a purchase notice, directing Aspire Capital (as principal) to purchase up to 50,000 shares of Common Stock per business day, up to $10.0 million of the Company’s common stock in the aggregate at a per share purchase price equal to the lesser of: a) the lowest sale price of Common Stock on the purchase date; or b) the arithmetic average of the three (3) lowest closing sale prices for Common Stock during the twelve (12) consecutive trading days ending on the trading day immediately preceding the purchase date. In addition, on any date on which the Company submitted a purchase notice to Aspire Capital in an amount equal to 50,000 shares, and the closing sale price of its Common Stock is equal to or greater than $0.50 per share, the Company also had the right, in its sole discretion, to present Aspire Capital with a volume-weighted average price purchase notice (each, a “VWAP Purchase Notice”) directing Aspire Capital to purchase an amount of stock equal to up to 30% of the aggregate shares of Common Stock traded on its principal market on the next trading day (the “VWAP Purchase Date”), subject to a maximum number of shares the Company may determine. The purchase price per share pursuant to such VWAP Purchase Notice is generally 95% of the volume-weighted average price for Common Stock traded on its principal market on the VWAP Purchase Date. The purchase price was subject to adjustment for any reorganization, recapitalization, non-cash dividend, stock split, or other similar transaction occurring during the period(s) used to compute the First Purchase Price. The Company could deliver multiple Purchase Notices and VWAP Purchase Notices to Aspire Capital from time to time during the term of the Purchase Agreement, so long as the most recent purchase has been completed. The First Purchase Agreement provided that the Company and Aspire Capital would not effect any sales under the First Purchase Agreement on any purchase date where the closing sale price of the Company’s common stock was less than $0.50. There were no trading volume requirements or restrictions under the First Purchase Agreement, and the Company could control the timing and amount of sales of Common Stock to Aspire Capital. Aspire Capital had no right to require any sales by the Company, but was obligated to make purchases from the Company as directed by the Company in accordance with the First Purchase Agreement. There were no limitations on use of proceeds, financial or business covenants, restrictions on future fundings, rights of first refusal, participation rights, penalties or liquidated damages in the First Purchase Agreement. In consideration for entering into the Purchase Agreement, concurrently with the execution of the First Purchase Agreement, the Company issued to Aspire Capital 80,000 shares of Common Stock (the “First Commitment Shares”). The First Purchase Agreement was terminated and replaced by the Second Purchase Agreement defined below on May 15, 2018. Aspire Capital has agreed that neither it nor any of its agents, representatives and affiliates shall engage in any direct or indirect short-selling or hedging of Common Stock during any time prior to the termination of the Purchase Agreement. Any proceeds from the Company receives under the First Purchase Agreement are expected to be used for working capital and general corporate purposes. The Company cannot request Aspire to purchase more than $100,000 per business day. As of March 31, 2019, the Company has issued purchase notices to Aspire Capital under the First Purchase Agreement to purchase an aggregate of 1,180,000 shares of common stock, at a per share price of $2.00, resulting in gross cash proceeds of approximately $2.4 million. The issuance of shares of common stock that were issued from time to time to Aspire Capital under the First Purchase Agreement were exempt from registration under the Securities Act, pursuant to the exemption for transactions by an issuer not involving any public offering under Section 4(a)(2) of the Securities Act. The Second Purchase Agreement with Aspire Capital On May 15, 2018, the Company terminated the First Purchase Agreement, and entered into a second common stock purchase agreement (the “Second Purchase Agreement”) with Aspire Capital under substantially the same terms, conditions and limitations as the First Purchase Agreement which are: Aspire Capital is committed to purchase up to an aggregate of $10.0 million of shares of the Company’s Common Stock over the 30-month term of the Second Purchase Agreement. Concurrently with entering into the Second Purchase Agreement, the Company also entered into a registration rights agreement with Aspire Capital (the “Registration Rights Agreement”), pursuant to which the Company maintains an effective registration statement registering the sale of the shares of Common Stock that have and may be issued to Aspire under the Second Purchase Agreement. Under the Second Purchase Agreement, on any trading day selected by the Company on which the closing sale price of its Common Stock is equal to or greater than $0.50 per share, the Company has the right, in its sole discretion, to present Aspire Capital with a purchase notice, directing Aspire Capital (as principal) to purchase up to 50,000 shares of Common Stock per business day, up to $10.0 million of the Company’s common stock in the aggregate at a per share purchase price equal to the lesser of: a) the lowest sale price of Common Stock on the purchase date; or b) the arithmetic average of the three (3) lowest closing sale prices for Common Stock during the twelve (12) consecutive trading days ending on the trading day immediately preceding the purchase date. In addition, on any date on which the Company submits a purchase notice to Aspire Capital in an amount equal to 50,000 shares, and the closing sale price of its Common Stock is equal to or greater than $0.50 per share, the Company also has the right, in its sole discretion, to present Aspire Capital with a volume-weighted average price purchase notice (each, a “VWAP Purchase Notice”) directing Aspire Capital to purchase an amount of stock equal to up to 30% of the aggregate shares of Common Stock traded on its principal market on the next trading day (the “VWAP Purchase Date”), subject to a maximum number of shares the Company may determine. The purchase price per share pursuant to such VWAP Purchase Notice is generally 95% of the volume-weighted average price for Common Stock traded on its principal market on the VWAP Purchase Date. The purchase price will be adjusted for any reorganization, recapitalization, non-cash dividend, stock split, or other similar transaction occurring during the period(s) used to compute the Purchase Price. The Company may deliver multiple Purchase Notices and VWAP Purchase Notices to Aspire Capital from time to time during the term of the Second Purchase Agreement, so long as the most recent purchase has been completed. The Second Purchase Agreement provides that the Company and Aspire Capital will not effect any sales under the Second Purchase Agreement on any purchase date where the closing sale price of the Company’s common stock is less than $0.50. There are no trading volume requirements or restrictions under the Second Purchase Agreement, and the Company will control the timing and amount of sales of Common Stock to Aspire Capital. Aspire Capital has no right to require any sales by the Company, but is obligated to make purchases from the Company as directed by the Company in accordance with the Second Purchase Agreement. There are no limitations on use of proceeds, financial or business covenants, restrictions on future fundings, rights of first refusal, participation rights, penalties or liquidated damages in the Second Purchase Agreement. In consideration for entering into the Second Purchase Agreement, concurrently with the execution of the Second Purchase Agreement, the Company issued to Aspire Capital 250,000 shares of Common Stock (the “Second Commitment Shares”). The Second Purchase Agreement may be terminated by the Company at any time, at its discretion, without any cost to the Company. Aspire Capital has agreed that neither it nor any of its agents, representatives and affiliates shall engage in any direct or indirect short-selling or hedging of Common Stock during any time prior to the termination of the Second Purchase Agreement. Any proceeds from the Company receives under the Second Purchase Agreement are expected to be used for working capital and general corporate purposes. The Company cannot request Aspire to purchase more than $300,000 per business day. As of March 31, 2019, the Company has issued purchase notices to Aspire Capital under the Second Purchase Agreement to purchase an aggregate of 2,200,100 shares of common stock, resulting in gross cash proceeds of approximately $3.7 million. The issuance of shares of common stock that were issued from time to time to Aspire Capital under the Second Purchase Agreement were exempt from registration under the Securities Act, pursuant to the exemption for transactions by an issuer not involving any public offering under Section 4(a)(2) of the Securities Act. Shareholder Approval for Removal of Exchange Cap The Second Purchase Agreement previously restricted the amount of shares that may be sold to Aspire Capital thereunder to 1,134,671 shares of Common Stock (the “Exchange Cap”). On November 26, 2018, the Company received shareholder approval to remove the Exchange Cap in compliance with the applicable listing rules of the Nasdaq Stock Market. Pursuant to Nasdaq Listing Rule 5635(d), shareholder approval is required prior to the issuance of securities in connection with a transaction other than a public offering involving the sale, issuance or potential issuance by the Company of common stock (or securities convertible into or exercisable common stock) equal to 20% or more of the common stock outstanding before the issuance for less than the greater of book or market value of the stock. Following receipt of shareholder approval, the Company may issue an additional $8.1 million, up to an aggregate of $10 million, of common stock to Aspire Capital under the Second Purchase Agreement, with remaining availability of $6.3 million at March 31, 2019. Common and Preferred Stock As of March 31, 2019, the Company is authorized to issue 265,000,000 shares of stock of which 250,000,000 are common stock, and 15,000,000 shares were preferred shares, with a par value of $0.001 per shares are blank-check preferred stock which the Board is expressly authorized to issue without stockholder approval, for one or more series of preferred stock and, with respect to each such series, to fix the number of shares constituting such series and the designation of such series, the voting powers, if any, of the shares of such series, and the preferences and relative, participating, optional or other special rights, if any, and any qualifications, limitations or restrictions thereof, of the shares of such series. The powers, preferences and relative, participating, optional and other special rights of each series of preferred stock, and the qualifications, limitations or restrictions thereof, if any, may differ from those of any and all other series at any time outstanding. Private Placement with Directors and Management On September 21, 2018, the Company entered into definitive agreements with George C. Carpenter IV, President and then Chief Executive Officer, Robin L. Smith, Chairman, as well as John Pappajohn, and Peter Unanue, each a director of the Company, and entities affiliated with Michal Votruba, a member of the Board of Directors of MYnd Analytics and Director of Life Sciences for the European-based RSJ-Gradus fund, relating to a private placement of an aggregate of 459,458 units for $1.85 per unit, with each unit consisting of one share of common stock and one common stock purchase warrant to purchase one share of Common Stock for $2.00 per share. Stock-Option Plans 2006 Stock Incentive Plan On August 3, 2006, CNS Response, Inc. adopted the CNS 2006 Stock Incentive Plan (the “2006 Plan”). The 2006 Plan provided for the issuance of awards in the form of restricted shares, stock options (which may constitute incentive stock options (ISO) or non-statutory stock options (NSO), stock appreciation rights and stock unit grants to eligible employees, directors and consultants and is administered by the Board. A total of 3,339 shares of stock were ultimately reserved for issuance under the 2006 Plan. As of March 31, 2019, zero options were exercised and there were 1,435 option shares outstanding under the amended 2006 Plan. The outstanding options have exercise prices to purchase shares of common stock ranging from $2,400 to $3,300 per share. 2012 Omnibus Incentive Compensation Plan On March 22, 2012, our Board approved the MYnd Analytics, Inc. 2012 Omnibus Incentive Compensation Plan (the “2012 Plan”), reserved 1,667 shares of stock for issuance and on December 10, 2012, the Board approved the amendment of the 2012 Plan to increase the shares authorized for issuance from 1,667 shares to 27,500 shares. On March 26, 2013, the Board further approved the amendment of the 2012 Plan to increase the shares authorized for issuance from 27,500 shares to 75,000 shares. The 2012 Plan, as amended, was approved by our stockholders at the 2013 annual meeting held on May 23, 2013. On April 5, 2016, the Board approved a further amendment of the 2012 Plan to increase the Common Stock authorized for issuance from 75,000 shares to 200,000 shares. On September 22, 2016 the Board amended the 2012 Plan to: (i) increase the total number of shares of Common Stock available for grant under the 2012 Plan from 200,000 shares to an aggregate of 500,000 shares, (ii) add an “evergreen” provision which, on January 1st of each year through 2022, automatically increases the number of shares subject to the 2012 Plan by the lesser of: (a) a number equal to 10% of the shares of Common Stock authorized under the 2012 Plan as of the preceding December 31st, or (b) an amount, or no amount, as determined by the Board, but in no event may the number of shares of Common Stock authorized under the 2012 Plan exceed 885,781 and (iii) increase the annual individual award limits under the 2012 Plan to 100,000 shares of Common Stock, subject to adjustment in accordance with the 2012 Plan. Per the above mentioned “evergreen” provision, an additional 50,000 shares were automatically allocated for distribution under the 2012 Plan as of January 1, 2017. At the 2017 Annual Meeting of Stockholders of the Company, held on August 21, 2017 (the “2017 Annual Meeting”), the holders of the Company’s common stock voted to amend the Company’s 2012 Plan to increase: (i) the total number of shares of common stock, par value $0.001 per share (“Common Stock”), available for grant under the 2012 Plan (subject to the overall limits described in clause (ii) below) from 550,000 shares to an aggregate of 975,000 shares; (ii) the aggregate limitation on authorized shares available for grant under the 2012 Plan, following any increases pursuant to the evergreen provision, from 885,781 shares to 1,570,248 shares and (iii) the annual individual award limits under the 2012 Plan to 150,000 shares of Common Stock (subject to adjustment in accordance with the 2012 Plan); At the 2018 Annual Meeting of Stockholders of the Company, held on April 4, 2018 (the “2018 Annual Meeting”), the holders of the Company’s common stock voted to amend the 2012 Plan to increase (i) the total number of shares of Common Stock available for grant under the 2012 Plan (subject to the overall limit described in clause (ii) below) from 1,072,500 shares to an aggregate of 1,500,000 shares and (ii) the aggregate limitation on the authorization shares available for grant under the 2012 Plan, following any increases pursuant to the evergreen provision, from 1,570,248 shares to 2,200,000 shares. At the Special Meeting of Stockholders of the Company, held on November 26, 2018, the holders of the Company’s common and preferred stock voted to (i) amend the 2012 Plan to eliminate the annual individual award limits under the 2012 Plan and (ii) amend 2012 Plan to increase: (a) the total number of shares of common stock, par value $0.001 per share (“Common Stock”), available for grant under the 2012 Plan (subject to the overall limits described in clause (b) below) from 1,500,000 shares to an aggregate of 2,250,000 shares and (b) the aggregate limitation on authorized shares available for grant under the 2012 Plan, following any increases pursuant to the evergreen provision (the “Evergreen Provision”), from 2,200,000 shares to 2,950,000 shares. Amendment to Chief Executive Officer’s Agreement On April 19, 2018, the Company and George C. Carpenter, IV, the former CEO of the Company, entered into an amendment to his Employment Agreement, dated as of September 7, 2007 (the “CEO Amendment”), pursuant to which Mr. Carpenter’s annual salary was reduced from $270,000 to $206,250. This change is retroactive to April 13, 2018. Further, pursuant to the CEO Amendment, Mr. Carpenter was granted 34,380 restricted shares of common stock under the 2012 Plan. The shares granted under the CEO Amendment will vest quarterly. If the employee’s relationship with the Company is terminated, the above grant will be prorated. On or before December 31, 2018, the parties will review this modification to determine if the above salary reduction adjustment will be renewed. As of May 9, 2019, the parties have not amended the modification. Appointment of Chief Innovation Officer; Amendment to Former CEO Employment Agreement As of December 12, 2018, George C. Carpenter, IV no longer served in the position of Chief Executive Officer and became, in addition to President, the Chief Innovation Officer of the Company. In connection therewith, on December 12, 2018, the Company and Mr. Carpenter entered into an amendment to his Employment Agreement, dated as of September 7, 2007 (the “Carpenter Amendment”), pursuant to which Mr. Carpenter was given the title of President and Chief Innovation Officer of the Company. Pursuant to the Carpenter Amendment, Mr. Carpenter received an option to purchase 50,000 shares of common stock of the Company, with such option vesting over a twelve-month period. Appointment of Patrick Herguth as CEO; Herguth Employment Agreement Effective December 12, 2018, the Company appointed Patrick Herguth to the position of Chief Executive Officer. In connection with Mr. Herguth’s appointment to the position of Chief Executive Officer, the Company entered into an employment agreement with Mr. Herguth, dated as of December 12, 2018 (the “Herguth Employment Agreement”). Pursuant to the Herguth Employment Agreement, Mr. Herguth will serve as the Company’s Chief Executive Officer and will receive a base annual compensation of $325,000, subject to periodic increases. For fiscal year 2019, Mr. Herguth is eligible to receive a performance bonus in a target amount of $340,000, with payment of such bonuses subject to achievement of certain performance goals set forth in the Herguth Employment Agreement. The employment agreement also provides that Mr. Herguth will receive an option to purchase up to 200,000 shares of the Company’s common stock, subject to the time-based vesting schedule and up to 200,000 shares of the Company’s common stock subject to a performance-based vesting schedule, both as specified in the Herguth Employment Agreement, with options to purchase 50,000 of such shares vesting on the date of the Herguth Employment Agreement. The time-based options will be subject to vesting upon a change of control of the Company. Election of Patrick Herguth to the Board of Directors Effective December 12, 2018, the Board increased the number of directors on the Board by one and elected Mr. Herguth to the Board to serve as a director of the Company to fill the vacancy created by such increase. Mr. Herguth has not been appointed to any committee of the Board. Stock-based Compensation and Expenses As of March 31, 2019, options to purchase 1,428,500 shares of Common Stock were outstanding under the 2012 Plan with exercise prices ranging from $1.20 to $600.00 per share, with a weighted average exercise price of $3.05 per share. Additionally, 580,564 restricted shares of Common Stock have been granted under the 2012 Plan, leaving 465,936 shares of Common Stock available to be awarded under the 2012 Plan. Stock-based compensation expenses are generally recognized over the employees’ or service provider’s requisite service period, generally the vesting period of the award. Stock-based compensation expense included in the accompanying unaudited condensed consolidated statements of operations for the six months ended March 31, 2019 and 2018 is as follows: Six months ended March 31, 2019 2018 Stock-based compensation expense - stock options Stock-based compensation expense - restricted shares Stock-based compensation expense - stock options Stock-based compensation expense restricted shares Research $ — $ — $ — $ — Product development 29,200 17,800 100 — Sales and marketing 12,000 — 100 — General and administrative 404,200 312,100 302,900 289,900 Total $ 445,400 $ 329,900 $ 303,100 $ 289,900 Total unrecognized stock compensation expense as of March 31, 2019 amounted to $334,900. The following table sets forth the Company’s unrecognized stock-based compensation expense, net of estimated forfeitures, by type of award and the weighted-average period over which that expense is expected to be recognized: March 31, 2019 2018 Type of Award: Unrecognized Expense, net of estimated forfeitures Weighted average Recognition Period (in years) Unrecognized Expense, net of estimated forfeitures Weighted average Recognition Period (in years) Stock Options $ 329,600 1.40 $ 682,900 0.53 Restricted Stock 5,300 0.05 139,100 0.48 Total $ 334,900 1.38 $ 822,000 0.52 A summary of all stock option activity is as follows: Number of Weighted Weighted- Intrinsic Outstanding at September 30, 2018 803,937 $ 10.13 8.75 $ 7,500 Granted 864,758 1.34 — Exercised — — — Forfeited or expired (38,760 ) 2.28 Outstanding at March 31, 2019 1,629,935 $ 5.65 8.89 $ 52,600 There are 825,100 options vested and 804,835 unvested as of March 31, 2019; there are 531,604 options vested and 272,333 options unvested as of September 30, 2018; Following is a summary of the restricted stock activity for the six months ended March 31, 2019: Number of Weighted Outstanding at September 30, 2018 406,564 $ 4.09 Granted 174,000 1.35 Forfeited — — Outstanding at March 31, 2019 580,564 $ 3.27 There are 567,469 shares of restricted stock vested and 13,095 unvested as of March 31, 2019; there are 351,522 shares of restricted stock vested and 55,042 unvested as of September 30, 2018; The range of Black-Scholes option-pricing model assumption inputs for all the valuation dates are in the table below: Six Months Ended March 31, 2019 Low High Annual dividend yield — % — % Expected life (years) 3.0 5.0 Risk-free interest rate 2.23 % 2.90 % Expected volatility 172.89 % 200.47 % Expected Dividend Yield Expected Life Expected Volatility. Risk-free Interest Rate The warrant activity for the six months ended March 31, 2019, are described as follows: Number of Weighted Outstanding at September 30, 2018 6,075,874 $ 4.53 Expired/ Forfeited (555 ) 55.00 Outstanding at March 31, 2019 6,075,319 $ 4.52 Following is a summary of the status of warrants outstanding at March 31, 2019: Exercise Number Expiration Weighted Average $ 2.00 459,458 (1) 09/2023 $ 2.00 2.34 1,050,000 (2) 03/2023 2.34 5.25 2,539,061 (3) 07/2022 5.25 5.25 1,675,000 (4) 07/2022 5.25 5.25 213,800 (5) 07/2022 5.25 6.04 134,000 (6) 07/2022 6.04 10.00 4,000 06/2021 10.00 Total 6,075,319 $ 4.52 (1) On September 21, 2018, the Company entered into definitive agreements with George C. Carpenter IV, President and former Chief Executive Officer, Robin L. Smith, Chairman, as well as John Pappajohn, and Peter Unanue, each a director of the Company, and entities affiliated with Michal Votruba, a member of the Board of Directors of MYnd Analytics and Director of Life Sciences for the European-based RSJ-Gradus fund, relating to a private placement of an aggregate of 459,458 units for $1.85 per unit, with each unit consisting of one share of Common Stock and one Common Stock Purchase Warrant to purchase one share of Common Stock for $2.00 per share. The closing price per share of the Common Stock on the Nasdaq Stock Market on September 20, 2018 was $1.72 per share. (2) On March 29, 2018, the Company sold an aggregate of 1,050,000 units for $2.00 per Unit each consisting of one share of newly-designated Series A Preferred Stock, and one warrant in a private placement to three affiliates of the Company, for gross proceeds of $2.1 million. The private placement closed on March 29, 2018. The closing price per share of the Common Stock on the Nasdaq Stock Market on March 29, 2018 was $1.19 per share. (3) On July 13, 2017, the Company declared a special dividend of warrants to purchase shares of the Company’s common stock to record holders of Common Stock as of such date. Warrants to purchase 2,539,061 shares of Common Stock were distributed pro rata to all holders of common stock on the record date. These warrants are exercisable (in accordance with their terms) to purchase one share of common stock, at an exercise price of $5.25 per share. The warrants will become exercisable commencing not less than 12 months following their July 27, 2017 distribution date and will expire five years from the date of issuance. (4) On July 19, 2017, the Company issued 1,675,000 shares of Common Stock and accompanying Warrants to purchase up to 1,675,000 shares of Common Stock in connection with an underwritten public offering. (5) On August 23, 2017, the Company issued warrants to purchase 213,800 shares of common stock to underwriters as part of the exercise of the overallotment option attributed to the July 2017 underwritten public offering. (6) As part of the underwritten public offering on July 19, 2017, the Company issued warrants to purchase 134,000 shares of common stock to the underwriters as part of the services performed by them in connection with the underwritten public offering. | 6. STOCKHOLDERS' EQUITY The Aspire Capital Equity Line On December 6, 2016, the Company, entered into the first common stock purchase agreement (the "First Purchase Agreement") with Aspire Capital Fund, LLC ("Aspire Capital") which provided that, upon the terms and subject to the conditions and limitations set forth therein, Aspire Capital was committed to purchase up to an aggregate of $10.0 million of shares of the Company's Common Stock over the 30-month term of the First Purchase Agreement. Concurrently with entering into the First Purchase Agreement, the Company also entered into a registration rights agreement with Aspire Capital (the "Registration Rights Agreement"), pursuant to which the Company maintained an effective registration statement registering the sale of the shares of Common Stock that were issued to Aspire under the First Purchase Agreement. Under the First Purchase Agreement, on any trading day selected by the Company on which the closing sale price of its Common Stock is equal to or greater than $0.50 per share, the Company had the right, in its sole discretion, to present Aspire Capital with a purchase notice, directing Aspire Capital (as principal) to purchase up to 50,000 shares of Common Stock per business day, up to $10.0 million of the Company's common stock in the aggregate at a per share purchase price equal to the lesser of: a) the lowest sale price of Common Stock on the purchase date; or b) the arithmetic average of the three (3) lowest closing sale prices for Common Stock during the twelve (12) consecutive trading days ending on the trading day immediately preceding the purchase date. In addition, on any date on which the Company submitted a purchase notice to Aspire Capital in an amount equal to 50,000 shares, and the closing sale price of its Common Stock is equal to or greater than $0.50 per share, the Company also had the right, in its sole discretion, to present Aspire Capital with a volume-weighted average price purchase notice (each, a "VWAP Purchase Notice") directing Aspire Capital to purchase an amount of stock equal to up to 30% of the aggregate shares of Common Stock traded on its principal market on the next trading day (the "VWAP Purchase Date"), subject to a maximum number of shares the Company may determine. The purchase price per share pursuant to such VWAP Purchase Notice is generally 95% of the volume-weighted average price for Common Stock traded on its principal market on the VWAP Purchase Date. The purchase price was subject to adjustment for any reorganization, recapitalization, non-cash dividend, stock split, or other similar transaction occurring during the period(s) used to compute the First Purchase Price. The Company could deliver multiple Purchase Notices and VWAP Purchase Notices to Aspire Capital from time to time during the term of the Purchase Agreement, so long as the most recent purchase has been completed. The First Purchase Agreement provided that the Company and Aspire Capital would not effect any sales under the First Purchase Agreement on any purchase date where the closing sale price of the Company's common stock was less than $0.50. There were no trading volume requirements or restrictions under the First Purchase Agreement, and the Company could control the timing and amount of sales of Common Stock to Aspire Capital. Aspire Capital had no right to require any sales by the Company, but was obligated to make purchases from the Company as directed by the Company in accordance with the First Purchase Agreement. There were no limitations on use of proceeds, financial or business covenants, restrictions on future fundings, rights of first refusal, participation rights, penalties or liquidated damages in the First Purchase Agreement. In consideration for entering into the First Purchase Agreement, concurrently with the execution of the First Purchase Agreement, the Company issued to Aspire Capital 80,000 shares of Common Stock (the "First Commitment Shares"). The First Purchase Agreement was terminated and replaced by the Second Purchase Agreement on May 15, 2018. Aspire Capital has agreed that neither it nor any of its agents, representatives and affiliates shall engage in any direct or indirect short-selling or hedging of Common Stock during any time prior to the termination of the First Purchase Agreement. Any proceeds the Company receives under the First Purchase Agreement are expected to be used for working capital and general corporate purposes. The Company cannot request Aspire to purchase more than $100,000 per business day. As of September 30, 2018, the Company has issued purchase notices to Aspire Capital under the First Purchase Agreement to purchase an aggregate of 1,180,000 shares of common stock, at a per share price of $2.00, resulting in gross cash proceeds of approximately $2.4 million. The issuance of shares of common stock that were issued from time to time to Aspire Capital under the First Purchase Agreement were exempt from registration under the Securities Act, pursuant to the exemption for transactions by an issuer not involving any public offering under Section 4(a)(2) of the Securities Act. The Second Purchase Agreement with Aspire Capital On May 15, 2018, the Company, entered into the Second Purchase Agreement with Aspire Capital under substantially the same terms, conditions and limitations as the First Purchase Agreement. Pursuant to the Second Purchase Agreement, Aspire Capital is committed to purchase up to an aggregate of $10.0 million of shares of the Company's Common Stock over 80 the 30-month term of the Second Purchase Agreement. Concurrently with entering into the Second Purchase Agreement, the Company also entered into a registration rights agreement with Aspire Capital (the "Registration Rights Agreement"), pursuant to which the Company maintains an effective registration statement registering the sale of the shares of Common Stock that have and may be issued to Aspire under the Second Purchase Agreement. Under the Second Purchase Agreement, on any trading day selected by the Company on which the closing sale price of its Common Stock is equal to or greater than $0.50 per share, the Company has the right, in its sole discretion, to present Aspire Capital with a purchase notice, directing Aspire Capital (as principal) to purchase up to 50,000 shares of Common Stock per business day, up to $10.0 million of the Company's common stock in the aggregate at a per share purchase price equal to the lesser of: a) the lowest sale price of Common Stock on the purchase date; or b) the arithmetic average of the three (3) lowest closing sale prices for Common Stock during the twelve (12) consecutive trading days ending on the trading day immediately preceding the purchase date. In addition, on any date on which the Company submits a purchase notice to Aspire Capital in an amount equal to 50,000 shares, and the closing sale price of its Common Stock is equal to or greater than $0.50 per share, the Company also has the right, in its sole discretion, to present Aspire Capital with a volume-weighted average price purchase notice (each, a "VWAP Purchase Notice") directing Aspire Capital to purchase an amount of stock equal to up to 30% of the aggregate shares of Common Stock traded on its principal market on the next trading day (the "VWAP Purchase Date"), subject to a maximum number of shares the Company may determine. The purchase price per share pursuant to such VWAP Purchase Notice is generally 95% of the volume-weighted average price for Common Stock traded on its principal market on the VWAP Purchase Date. The purchase price will be adjusted for any reorganization, recapitalization, non-cash dividend, stock split, or other similar transaction occurring during the period(s) used to compute the Purchase Price. The Company may deliver multiple Purchase Notices and VWAP Purchase Notices to Aspire Capital from time to time during the term of the Second Purchase Agreement, so long as the most recent purchase has been completed. The Second Purchase Agreement provides that the Company and Aspire Capital will not effect any sales under the Second Purchase Agreement on any purchase date where the closing sale price of the Company's common stock is less than $0.50. There are no trading volume requirements or restrictions under the Second Purchase Agreement, and the Company will control the timing and amount of sales of Common Stock to Aspire Capital. Aspire Capital has no right to require any sales by the Company, but is obligated to make purchases from the Company as directed by the Company in accordance with the Second Purchase Agreement. There are no limitations on use of proceeds, financial or business covenants, restrictions on future fundings, rights of first refusal, participation rights, penalties or liquidated damages in the Second Purchase Agreement. In consideration for entering into the Second Purchase Agreement, concurrently with the execution of the Second Purchase Agreement, the Company issued to Aspire Capital 2,500,000 shares of Common Stock (the "Second Commitment Shares"). The Second Purchase Agreement may be terminated by the Company at any time, at its discretion, without any cost to the Company. Aspire Capital has agreed that neither it nor any of its agents, representatives and affiliates shall engage in any direct or indirect short-selling or hedging of Common Stock during any time prior to the termination of the Second Purchase Agreement. Any proceeds from the Company receives under the Second Purchase Agreement are expected to be used for working capital and general corporate purposes. The Company cannot request Aspire to purchase more than $300,000 per business day. As of September 30, 2018, the Company has issued purchase notices to Aspire Capital under the Second Purchase Agreement to purchase an aggregate of 884,671 shares of common stock, resulting in gross cash proceeds of approximately $1.9 million. The issuance of shares of common stock that were issued from time to time to Aspire Capital under the Second Purchase Agreement were exempt from registration under the Securities Act, pursuant to the exemption for transactions by an issuer not involving any public offering under Section 4(a)(2) of the Securities Act. Shareholder Approval for Removal of Exchange Cap The Second Purchase Agreement previously restricted the amount of shares that may be sold to Aspire Capital thereunder to 1,134,671 shares of Common Stock (the "Exchange Cap"). On November 26, 2018, the Company received shareholder approval to remove the Exchange Cap in compliance with the applicable listing rules of the NASDAQ Stock Market. Pursuant to NASDAQ Listing Rule 5635(d), shareholder approval is required prior to the issuance of securities in connection with a transaction other than a public offering involving the sale, issuance or potential issuance by the Company of common stock (or securities convertible into or exercisable common stock) equal to 20% or more of the common stock outstanding before the issuance for less than the greater of book or market value of the stock. Following receipt of shareholder approval, the Company may issue an additional $8.1 million, up to an aggregate of $10 million, of common stock to Aspire Capital under the Second Purchase Agreement. Common and Preferred Stock As of September 30, 2017, the Company is authorized to issue 515,000,000 shares of stock of which 500,000,000 are common stock, and 15,000,000 shares were preferred shares. As of September 30, 2018, the Company is authorized to issue 265,000,000 shares of stock of which 250,000,000 are common stock, and 15,000,000 shares were preferred shares, with a par value of $0.001 per shares are blank-check preferred stock which the Board is expressly authorized to issue without stockholder approval, for one or more series of preferred stock and, with respect to each such series, to fix the number of shares constituting such series and the designation of such series, the voting powers, if any, of the shares of such series, and the preferences and relative, participating, optional or other special rights, if any, and any qualifications, limitations or restrictions thereof, of the shares of such series. The powers, preferences and relative, participating, optional and other special rights of each series of preferred stock, and the qualifications, limitations or restrictions thereof, if any, may differ from those of any and all other series at any time outstanding. Private Placement with Directors and Management On September 21, 2018, the Company entered into definitive agreements with George C. Carpenter IV, President and Chief Executive Officer, Robin L. Smith, Chairman, as well as John Pappajohn, and Peter Unanue, each a director of the Company, and entities affiliated with Michal Votruba, a member of the board of directors of MYnd Analytics and Director of Life Sciences for the European-based RSJ-Gradus fund, relating to a private placement of an aggregate of 459,458 units for $1.85 per unit, with each unit consisting of one share of common stock and one common stock purchase warrant to purchase one share of Common Stock for $2.00 per share. Stock-Option Plans 2006 Stock Incentive Plan On August 3, 2006, CNS California adopted the CNS California 2006 Stock Incentive Plan (the "2006 Plan"). The 2006 Plan provides for the issuance of awards in the form of restricted shares, stock options (which may constitute incentive stock options (ISO) or non-statutory stock options (NSO), stock appreciation rights and stock unit grants to eligible employees, directors and consultants and is administered by the Board. A total of 3,339 shares of stock were ultimately reserved for issuance under the 2006 Plan. As of September 30, 2018, zero options were exercised and there were 1,445 option shares outstanding under the amended 2006 Plan. The outstanding options have exercise prices to purchase shares of Common Stock ranging from $2,400 to $3,300 per share. 2012 Omnibus Incentive Compensation Plan On March 22, 2012, our Board approved the MYnd Analytics, Inc. 2012 Omnibus Incentive Compensation Plan (the "2012 Plan"), and reserved 1,667 shares of stock for issuance under the 2012 plan. On December 10, 2012, the Board approved the amendment of the 2012 Plan to increase the shares authorized for issuance from 1,667 shares to 27,500 shares. On March 26, 2013, the Board further approved the amendment of the 2012 Plan to increase the shares authorized for issuance from 27,500 shares to 75,000 shares. The 2012 Plan, as amended, was approved by our stockholders at the 2013 annual meeting held on May 23, 2013. On April 5, 2016, the Board approved a further amendment of the 2012 Plan to increase the Common Stock authorized for issuance from 75,000 shares to 200,000 shares. On September 22, 2016 the Board amended the 2012 Plan to: (i) increase the total number of shares of Common Stock available for grant under the 2012 Plan from 200,000 shares to an aggregate of 500,000 shares, (ii) add an "evergreen" provision which, on January 1st of each year through 2022, automatically increases the number of shares subject to the 2012 Plan by the lesser of: (a) a number equal to 10% of the shares of Common Stock authorized under the 2012 Plan as of the preceding December 31st, or (b) an amount, or no amount, as determined by the Board, but in no event may the number of shares of Common Stock authorized under the 2012 Plan exceed 885,781 and (iii) increase the annual individual award limits under the 2012 Plan to 100,000 shares of Common Stock, subject to adjustment in accordance with the 2012 Plan. Per the above mentioned "evergreen" provision, an additional 50,000 shares were automatically allocated for distribution under the 2012 Plan as of January 1, 2017. At the 2017 Annual Meeting of Stockholders of MYnd Analytics, Inc. ("the Company"), held on August 21, 2017 (the "2017 Annual Meeting"), the holders of the Company's common stock voted to amend the Company's 2012 Omnibus Incentive Compensation Plan (the "2012 Plan") to increase: (i) the total number of shares of common stock, par value $0.001 per share ("Common Stock"), available for grant under the 2012 Plan (subject to the overall limits described in clause (ii) below) from 550,000 shares to an aggregate of 975,000 shares; (ii) the aggregate limitation on authorized shares available for grant under the 2012 Plan, following any increases pursuant to the evergreen provision, from 885,781 shares to 1,570,248 shares and (iii) the annual individual award limits under the 2012 Plan to 150,000 shares of Common Stock (subject to adjustment in accordance with the 2012 Plan); At the 2018 Annual Meeting of Stockholders of the Company, held on April 4, 2018, the holders of the Company's common stock voted to amend the 2012 Plan to increase (i) the total number of shares of Common Stock available for grant under the 2012 Plan (subject to the overall limit described in clause (ii) below) from 1,072,500 shares to an aggregate of 1,500,000 shares and (ii) the aggregate limitation on the authorization shares available for grant under the 2012 Plan, following any increases pursuant to the evergreen provision, from 1,570,248 shares to 2,200,000 shares. At the Special Meeting of Stockholders of the Company, held on November 26, 2018, the holders of the Company's common and preferred stock voted to (i) amend the 2012 Plan to eliminate the annual individual award limits under the 2012 Plan and (ii) amend 2012 Plan to increase: (a) the total number of shares of common stock, par value $0.001 per share ("Common Stock"), available for grant under the 2012 Plan (subject to the overall limits described in clause (b) below) from 1,500,000 shares to an aggregate of 2,250,000 shares and (b) the aggregate limitation on authorized shares available for grant under the 2012 Plan, following any increases pursuant to the evergreen provision (the "Evergreen Provision"), from 2,200,000 shares to 2,950,000 shares. Chairman Agreements and Amendments On July 14, 2017, the Company entered into a Chairman Services Agreement (the "Agreement") with Robin L. Smith, M.D., the Chairman of the Company's board of directors (the "Board"). Pursuant to the Agreement, Dr. Smith is entitled to receive the following equity awards: (a) on the Effective Date, a grant of 25,000 shares of restricted stock (vesting immediately) under the 2012 Plan; (b) on the Effective Date, options to purchase 75,000 shares of Common Stock under the Plan; and (c) on the date of the Company's 2017 annual meeting of stockholders, an award of options to purchase 50,000 shares of Common Stock (the "2017 Option Award") was granted. In addition, at each annual meeting of stockholders of the Company thereafter beginning in 2018 during the Term, Dr. Smith will be entitled to receive a grant of 25,000 shares of restricted stock (vesting immediately) under the Plan and options to purchase 75,000 shares of Common Stock under the Plan. Other than the 2017 Option Award, all options granted under the Agreement will vest 1/3 on the date of grant, 1/3 on the six month anniversary of the date of grant and 1/3 on the twelve month anniversary of the date of grant. The 2017 Option Award will vest on December 1, 2018. Pursuant to the Agreement, all options owned by Dr. Smith will remain exercisable for a period of 10 years from the date of grant, even if Dr. Smith is no longer with the Company. On April 24, 2018, the Company and Dr. Smith agreed to amend the Chairman Services Agreement, dated as of July 14, 2017 (the "Chairman Amendment") to provide that Dr. Smith's annual compensation for the 2018 calendar year would be reduced from $300,000 to $250,000. This change was retroactive to January 1st. Further, pursuant to the Chairman Amendment, Dr. Smith was granted an option on April 16, 2018 to purchase 50,000 shares of common stock under the Company's 2012 Plan, which will not be terminated if Dr. Smith is no longer affiliated with the Company. The options granted under the Chairman Amendment will vest on the date of the grant. Agreement with Maxim Group LLC On April 2, 2018, the Company entered into an Advisory Agreement with Maxim Group LLC ("Maxim") for general financial advisory and investment banking services. Maxim's compensation under the agreement was 100,000 shares of the Company's Common Stock, payable in one payment of 50,000 shares of Common Stock and five monthly payments of 10,000 shares of Common Stock from April through August 2018. The shares of Common Stock will have unlimited piggyback registration rights and the same rights afforded other holders of the Company's Common Stock. Compensation expense under this agreement was $162,300 and was recorded as general and administrative expenses in the consolidated statement of operations for the year ended September 30, 2018. Amendment to Chief Executive Officer's Agreement On April 19, 2018, the Company and George C. Carpenter, IV, the Chief Executive Officer of the Company, entered into an amendment to his Employment Agreement, dated as of September 7, 2007 (the "CEO Amendment"), pursuant to which Mr. Carpenter's annual salary as reduced from $270,000 to $206,250. This change is retroactive to April 13, 2018. Further, pursuant to the CEO Amendment, Mr. Carpenter was granted 34,380 restricted shares of common stock under the 2012 Plan. The shares granted under the CEO Amendment will vest quarterly. If the employee's relationship with the Company is terminated, the above grant will be prorated. On or before December 31, 2018, the parties will review this modification to determine if the above salary reduction adjustment will be renewed. As of September 30, 2018, options to purchase 802,492 shares of Common Stock were outstanding under the 2012 Plan with exercise prices ranging from $1.55 to $600, with a weighted average exercise price of $4.39. Additionally, 406,564 restricted shares of Common Stock have been issued under the 2012 Plan, leaving 290,944 shares of Common Stock available to be awarded. Stock-based compensation expense is generally recognized over the employees' or service provider's requisite service period, generally the vesting period of the award. Stock-based compensation expense included in the accompanying statements of operations for the years ended September 30, 2018 and 2017 is as follows: September 30, 2018 2017 Stock-based compensation Expense non- Restricted Shares Stock-based compensation Expense Restricted Shares Stock-based compensation Expense non- Restricted Shares Stock-based compensation Expense Restricted Shares Research $ — $ — $ 10,900 $ — Product development 20,000 16,400 360,600 — Sales and marketing 3,400 — 175,300 — General and administrative 1,034,800 513,700 647,200 892,000 Total $ 1,058,200 $ 530,100 $ 1,194,000 $ 892,000 Total unrecognized compensation expense was $185,537 as of September 30, 2018. The following table sets forth the Company's unrecognized stock-based compensation expense, net of estimated forfeitures, by type of award and the weighted-average period over which that expense is expected to be recognized: September 30 2018 2017 Type of Award: Unrecognized Weighted Unrecognized Weighted Stock Options $ 126,509 0.96 $ 860,915 3.54 Restricted Stock $ 59,028 0.55 $ 205,858 1.00 Total $ 185,537 0.83 $ 1,066,773 3.05 A summary of stock option activity is as follows: Number of Weighted Weighted- Intrinsic Value Outstanding at September 30, 2016 223,120 $ 50.98 6.63 $ 819,137 Granted 334,000 4.85 — — Exercised — — — — Forfeited (3,037 ) 1,335.06 — — Outstanding at September 30, 2017 554,083 $ 16.14 6.63 $ 7,425 Granted 468,000 2.01 — — Exercised (35,000 ) 1.55 — — Forfeited or expired (183,146 ) 8.19 — — Outstanding at September 30, 2018 803,937 $ 10.13 8.75 $ 7,500 There are 531,604 shares of options vested and 272,333 unvested as of September 30, 2018; there are 249,284 shares of options vested and 304,799 unvested as of September 30, 2017. Following is a summary of the status of options outstanding at September 30, 2018: Exercise Number Expiration Weighted Average 2012 Omnibus Incentive Compensation Plan $ 1.55 250,000 4/2028 1.55 1.99 50,000 4/2028 1.99 2.35 10,000 6/2028 2.35 2.98 10,000 5/2028 2.98 3.60 54,000 09/2027 3.60 3.74 5,000 12/2027 3.74 3.88 20,000 11/2027 3.88 3.96 35,000 11/2027 3.96 4.10 5,000 08/2027 4.10 4.16 50,000 08/2027 4.16 4.33 75,000 07/2027 4.33 5.10 7,750 04/2026 5.10 5.90 18,000 03/2027 5.90 6.00 174,000 09/2026 6.00 9.44 22,307 12/2022 – 01/2023 9.44 11.00 6,250 08/2025 11.00 50.00 9,518 03/2023 – 01/2025 50.00 52.00 625 07/2024 52.00 $ 600.00 42 03/2022 600.00 Sub-Total 802,492 Weighted Average $ 4.39 2006 Stock Incentive Plan $ 2,400.00 144 03/2019 – 07/2020 $ 2,400.00 2,820.00 51 03/2021 2,820.00 $ 3,300.00 1,250 03/2020 $ 3,300.00 Sub-Total 1,445 Weighted Average $ 3,193.37 Total 803,937 Weighted Average $ 10.13 Following is a summary of the status of restricted shares outstanding at September 30, 2018: Number of Weighted Amount Outstanding at September 30, 2016 143,750 $ 6.13 $ 881,250 Granted 79,000 3.83 302,650 Forfeited — — — Outstanding at September 30, 2017 222,750 $ 5.31 $ 1,183,900 Granted 183,814 2.62 480,862 Forfeited — — — Outstanding at September 30, 2018 406,564 $ 4.09 $ 1,664,762 The range of Black-Scholes option-pricing model assumption inputs for all the valuation dates are in the table below: September 30, 2017 through to September 30, 2018 Low High Annual dividend yield — % — % Expected life (years) 5 5 Risk-free interest rate 1.14 % 2.94 % Expected volatility 194.36 % 210.39 % September 30, 2016 through to September 30, 2017 Low High Annual dividend yield — % — % Expected life (years) 5 5 Risk-free interest rate 1.14 % 1.93 % Expected volatility 196.77 % 234.54 % Expected Dividend Yield. The Company has never declared or paid any cash dividends and does not presently plan to pay cash dividends in the foreseeable future. Expected Life. The Company elected to utilize the "simplified" method for "plain vanilla" options to value stock option grants. Under this approach, the weighted-average expected life is presumed to be the average of the vesting term and the contractual term. Expected Volatility. The expected volatility rate used to value stock option grants is based on the historical volatilities of the Company's common stock. Risk-free Interest Rate. The risk-free interest rate assumption was based on U.S. Treasury Bill instruments that had terms consistent with the expected term of the Company's stock option grants. The warrant activity for the years ending September 30, 2018 and 2017, is described as follows: Number of Weighted Outstanding at September 30, 2016 7,160 $ 50.41 Granted 4,561,861 5.27 Exercised — — Expired (1,349 ) 185.61 Forfeited — — Outstanding at September 30, 2017 4,567,672 $ 5.30 Granted 1,509,458 2.24 Exercised — — Expired/ Forfeited (1,256 ) 48.07 Outstanding at September 30, 2018 6,075,874 $ 4.53 Following is a summary of the status of warrants outstanding at September 30, 2018: Exercise Number of Shares Expiration Weighted Average 2.00 459,458 (1) 9/21/2028 2.00 2.34 1,050,000 (2) 03/2023 2.34 5.25 2,539,061 (3) 07/2022 5.25 5.25 1,675,000 (4) 07/2022 5.25 5.25 213,800 (5) 07/2022 5.25 6.04 134,000 (6) 07/2022 6.04 10.00 4,000 06/2021 10.00 55.00 555 06/2018 – 03/2019 55.00 Total 6,075,874 $ 4.53 (1) On September 21, 2018, the Company entered into definitive agreements with George C. Carpenter IV, President and Chief Executive Officer, Robin L. Smith, Chairman, as well as John Pappajohn, and Peter Unanue, each a director of the Company, and entities affiliated with Michal Votruba, a member of the board of directors of MYnd Analytics and Director of Life Sciences for the European-based RSJ-Gradus fund, relating to a private placement of an aggregate of 459,458 units for $1.85 per unit, with each unit consisting of one share of Common Stock and one Common Stock Purchase Warrant to purchase one share of Common Stock for $2.00 per share. The closing price per share of the Common Stock on the NASDAQ Stock Market on September 20, 2018 was $1.72 per share. (2) On March 29, 2018, the Company sold an aggregate of 1,050,000 units for $2.00 per Unit each consisting of one share of newly-designated Series A Preferred Stock, and one warrant for $2.34 per share in a private placement to three affiliates of the Company, for gross proceeds of $2.1 million. The private placement closed on March 29, 2018. The closing price per share of the Common Stock on the NASDAQ Stock Market on March 29, 2018 was $1.19 per share. (3) O (4) On July 19, 2017, the Company issued 1,675,000 shares of Common Stock and accompanying Warrants to purchase up to 1,675,000 shares of Common Stock in connection with an underwritten public offering. (5) On August 23, 2017, the Company issued 213,800 common stock warrants to underwriters as part of the overallotment attributed to the July 2017 underwritten public offering. (6) As part of the underwritten public offering on July 19, 2017, the Company issued 134,000 common stock warrants to the underwriters as part of the services performed by them in connection with the underwritten public offering. At September 30, 2018, there were warrants outstanding to purchase 6,075,874 shares of the Company's Common Stock. The exercise prices of the outstanding warrants range from $2.00 to $55 with a weighted average exercise price of $4.53. The warrants expire at various times starting November 2018 through September 2028. |
CONVERTIBLE PREFERRED STOCK
CONVERTIBLE PREFERRED STOCK | 12 Months Ended |
Sep. 30, 2018 | |
Convertible Preferred Stock | |
CONVERTIBLE PREFERRED STOCK | 7. CONVERTIBLE PREFERRED STOCK On March 29, 2018, the Company sold an aggregate of 1,050,000 units for $2.00 per Unit, each consisting of one share of newly-designated Series A Preferred Stock, par value $0.001 per share and one Warrant to purchase one share of Common Stock, par value $0.001 per share for $2.34 per share in a private placement to three affiliates of the Company, for gross proceeds of $2.1 million (the "Financing"). The closing price per share of the Common Stock on the NASDAQ Stock Market on March 29, 2018 was $1.19 per share. The Warrants will be exercisable for a period of five years for an exercise price of $2.34. The exercise price is subject to adjustment for stock splits, stock dividends, combinations or similar events. The Warrants may not be exercised on a cashless basis. John Pappajohn and Peter Unanue, directors of the Company, purchased $1,000,000 and $100,000 of the Units, respectively. Mary Pappajohn, the spouse of John Pappajohn, purchased $1,000,000 of the Units. On April 30, 2018, the Company entered into the First Amended Subscription Agreement for Shares of Series A Preferred Stock and Common Stock Purchase Warrants (the "Amended Agreement") with John Pappajohn and Mary Pappajohn (each an "Investor", and collectively the "Investors"), which provides for the issuance, as of the date of the Original Agreement, of an aggregate of 500,000 Shares of Series A-1 Convertible Preferred Stock, par value $0.001 per share ("Series A-1 Convertible Preferred Stock"), in lieu of the same number of Shares of Series A Convertible Preferred Stock that the Company had originally agreed to issue to the Investors. The Series A-1 Convertible Preferred Stock will have substantially the same rights and preferences as the Shares of Series A Preferred Stock, except that the Shares of Series A-1 Convertible Preferred Stock are non-voting and cannot be converted into Common Stock by an Investor if, as a result of such conversion, such Investor would beneficially own greater than 19.9% of the outstanding shares of Common Stock. Additionally, the Warrants were amended to provide that they would not be exercisable by an Investor if, following any such exercise, such Investor would beneficially own greater than 19.9% of the outstanding shares of Common Stock. Dividends Shares of the Series A and Series A-1 Preferred Stock will be entitled to receive cash dividends at the rate of five percent (5.00%) of the Original Series A and Series A-1 Issue Price per annum, payable out of funds legally available therefor. Such dividends shall (i) accrue on shares of Series A and Series A-1 Preferred Stock from the date of issuance of such shares, (ii) be cumulative, and (iii) be payable only (A) when, as and if declared by the board of directors, (B) upon the occurrence of a Liquidation Event or a Deemed Liquidation Event (whether or not such dividends have been declared) and (C) "in kind" upon a conversion of the Series A Preferred Stock. The value of Common Stock for purposes of determining shares issuable upon a payment in kind shall not be less than the original issue price of the Series A Preferred Stock. At September 30, 2018 and 2017, the amount of undeclared cumulative dividends totaled $49,200 and $0, respectively. Voting Rights. Each holder of a share of Series A Preferred Stock shall have the right to one vote for each share of Common Stock into which such Series A Preferred Stock could then be converted (with any fractional share determined on an aggregate conversion basis being rounded down to the nearest whole share). The holders shall be entitled to vote as a class on certain significant or corporate actions. Holders of shares of Series A-1 Preferred Stock do not have any voting rights. Rank. With respect to distributions upon a Liquidation Event (as defined below), the Series A and Series A-1 Preferred Stock shall rank senior to the Common Stock and to each other class of the Company's capital stock existing now or hereafter created that are not specifically designated as ranking senior to the Series A Preferred Stock. Liquidation Preference. In the event of any voluntary or involuntary liquidation, dissolution or winding-up of the Company or such subsidiaries the assets of which constitute all or substantially all of the assets of the business of the Company and its subsidiaries, taken as a whole ("Liquidation Event"), the holders of shares of Series A and Series A-1 Preferred Stock shall be entitled to receive, prior and in preference to any distribution in such Liquidation Event to the holders of any junior securities, including the Common Stock, by reason of their ownership thereof, an amount per share equal to the Series A and Series A-1 Liquidation Preference for each outstanding share of Series A and Series A-1 Preferred Stock then held by them. After the payment or setting apart of payment of the full preferential amounts required to be paid to the holders of shares of Series A and Series A-1 Preferred Stock, the remaining assets and funds legally available for distribution to the Company's stockholders shall be distributed among the holders of the shares of Common Stock ratably on a per-share basis. Consolidation; Merger. A (i) consolidation or merger of the Company with or into any other entity in which the stockholders of the Company immediately prior to such transaction do not own a majority of the voting capital stock of the surviving entity, (ii) sale, lease, transfer, exclusive license, conveyance or disposition of all or substantially all of the assets of the Company, or (iii) the effectuation by the Company of a transaction or series of related transactions in which more than 50% of the voting power of the Company is disposed of (each of (i), (ii) and (iii), a "Deemed Liquidation Event"), will each be deemed to be a Liquidation Event within the meaning of the Certificate of Designation, unless elected otherwise by vote of the Required Holders. Any securities to be delivered to the stockholders pursuant to a Deemed Liquidation Event will be valued at fair market value. Conversion. Each Holder of shares of Series A Preferred Stock shall have the right (the "Conversion Right"), at any time and from time to time, at such holder's option, to convert all or any portion of such holder's shares of Series A Preferred Stock into fully paid and non-assessable shares of Common Stock. Upon a holder's election to exercise its Conversion Right, each share of Series A Preferred Stock for which the Conversion Right is exercised shall be converted into such number of shares of Common Stock as is determined by dividing the Original Purchase Price by the conversion price for the Series A Preferred Stock at the time in effect. Series A-1 Preferred stock cannot be converted into Common Stock by an Investor if, as a result of such conversion, such Investor would beneficially own greater than 19.9% of the outstanding shares of Common Stock. Additionally, the Warrants were amended to provide that they would not be exercisable by an Investor if, following any such exercise, such Investor would beneficially own greater than 19.9% of the outstanding shares of Common Stock. In connection with the Financing, the Company also entered into a registration rights agreement (the "Registration Rights Agreement") with the investors, requiring the Company to register the resale of the shares of Common Stock underlying the preferred stock and the Warrants. Under the Registration Rights Agreement, holders of a majority of the registrable securities then outstanding (the "Majority Holders") may by a written Demand Notice to the Company (a "Demand Notice") commencing six (6) months from the closing date, request the Company to effect the registration of all or part of the registrable securities owned by such Majority Holders and their respective affiliates on a Registration Statement on Form S-3. The Company has agreed to use its reasonable best efforts to cause such registration and/or qualification to be complete as soon as practicable, but in no event later than sixty (60) days, after receipt of the Demand Notice. The shares of Series A and Series A-1 Preferred Stock were offered and sold in reliance upon the exemption from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"), set forth under Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated under the Securities Act, relating to sales by an issuer not involving any public offering and in reliance on similar exemptions under applicable state laws. Each purchaser represented that it is an accredited investor and that it acquired the Series A Preferred Stock and Warrants for investment purposes only and not with a view to any resale, distribution or other disposition of such securities in violation of the United States federal securities laws. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 8. INCOME TAXES The following is a reconciliation of the provision (benefit) for income taxes to the amount compiled by applying the statutory federal income tax rate to profit (loss) before income taxes is as follows for the years ended September 30, 2018 and 2017. 2018 2017 Federal income tax (benefit) at statutory rates 24.25 % 34.0 % Stock-based compensation (0.22 )% (3.46 )% Rate change (81.08 )% — Change in valuation allowance 58.95 % (29.29 )% True-ups and other adjustments (0.09 )% (1.27 )% State tax benefit (1.82 )% (0.02 )% Total (0.02 )% (0.04 )% The provision for income taxes consisted of the following for the years ended September 30, 2018 and 2017: 2018 2017 Current: Federal: $ — $ — State: 1,900 2,600 Deferred: Federal: 129,700 2,082,900 State: (246,500 ) (840,600 ) Change in valuation allowance (116,800 ) (1,242,300 ) Total 1,900 2,600 2018 2017 Current: Federal: $ — $ — State: 1,900 2,600 Total current 1,900 2,600 Deferred: Federal: (5,819,600 ) 2,082,900 State: (246,500 ) (840,600 ) Total deferred (6,066,100 ) 1,242,300 Change in valuation allowance 6,066,100 (1,242,300 ) Total $ 1,900 $ 2,600 In accordance with U.S. GAAP as determined by ASC 740, Income Taxes, the Company is required to record the effects of tax law changes in the period enacted. As the Company has a September 30th fiscal year end, its U.S. federal corporate income tax rate will be blended in fiscal 2018, resulting in a statutory federal rate of approximately 24% (three months at 34% and nine months at 21%), and will be 21% for subsequent fiscal years. The Company remeasured its existing deferred tax assets and liabilities at the rate the Company expects to be in effect when those deferred taxes will be realized (24% if in 2018 or 21% thereafter) and recorded a one-time deferred tax expense of approximately $8.4 million during the year ended September 30, 2018. Temporary differences between the financial statement carrying amounts and bases of assets and liabilities that give rise to significant portions of deferred taxes relate to the following at September 30, 2018 and 2017: 2018 2017 Deferred income tax assets: Net operating loss carryforward $ 13,921,773 $ 19,024,793 Deferred interest, consulting and compensation liabilities 2,850,840 3,850,567 Deferred income tax assets – other 155,517 118,793 16,928,130 22,994,153 Deferred income tax liabilities—other — — Deferred income tax asset—net before valuation allowance 16,928,130 22,994,153 Valuation allowance (16,928,130 ) (22,994,153 ) Deferred income tax asset—net $ — $ — As of September 30, 2018, the Company had gross Federal net operating loss carryforwards of approximately $60.2 million and State gross net operating loss carryforwards of approximately $33.8 million. Both the Federal and State net operating loss carryforwards will begin to expire in 2022 and 2023 respectively. Our ability to utilize net operating loss carryforwards may be limited in the event that a change in ownership, as defined in the Internal Revenue Code, occurs in the future. The Company has placed a valuation allowance against the deferred tax assets in excess of deferred tax liabilities due to the uncertainty surrounding the realization of such excess tax assets. Management periodically evaluates the recoverability of the deferred tax assets and the level of the valuation allowance. At such time as it is determined that it is more likely than not that the deferred tax assets are realizable, the valuation allowance will be reduced accordingly. The Company's estimate of the potential outcome of any uncertain tax position is subject to management's assessment of relevant risks, facts, and circumstances existing at that time. The Company believes that it has adequately provided for these matters. However, the Company's future results may include favorable or unfavorable adjustments to its estimates in the period the audits are resolved, which may impact the Company's effective tax rate. The Company does not believe that it is reasonably possible that the total amount of unrecognized tax benefits will significantly increase or decrease in the next 12 months. As of September 30, 2018, the Company's tax filings are generally subject to examination in major tax jurisdictions for years ending on or after September 30, 2014. The Company does not accrue for potential interest and penalties attributed to uncertain tax positions as it is not material. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Sep. 30, 2018 | |
Related Party Transactions [Abstract] | ||
RELATED PARTY TRANSACTIONS | 9. RELATED PARTY TRANSACTIONS DCA Agreement On September 25, 2013, the Board approved a consulting agreement effective May 1, 2013, for marketing services provided by Decision Calculus Associates (“DCA”), an entity operated by Mr. Carpenter’s spouse, Jill Carpenter. Effective August 2015, DCA was engaged at a fee of $10,000 per month. From August 2015 through February 2017, DCA has been paid $170,000. The DCA contract was renewed at $3,000 a month effective March 1, 2017. On May 1, 2018, the Company amended the agreement with DCA to reduce the monthly fee to $2,000 a month. The amendment provides for a term of one year with a 30 day termination clause. The Company incurred fees of $6,000 and $9,000 for the three months ended March 31, 2019 and 2018, respectively. The Company incurred fees of $12,000 and $18,000 for the six months ended March 31, 2019 and 2018, respectively. The agreement with DCA was terminated on April 20, 2019. Hooper Holmes Agreement In 2016, we entered into an agreement with Hooper Holmes Inc., for which Dr. Smith, our Chairman of the Board, became an advisory member of its board as of March 16, 2017, and in which Mr. Pappajohn, our director, has participated in equity raises to become the beneficial owner of a greater than 10% interest. Hooper Holmes performs EEGs nationwide to patients who wish to obtain a PEER report. The Company paid $0 and $54,300 for these services during the three months ended March 31, 2019 and 2018, respectively. The Company paid $2,600 and $90,700 for these services during the six months ended March 31, 2019 and 2018, respectively. The agreement with Hooper Holmes was deleted on December 31, 2018. Private Placement with Directors and Management On September 21, 2018, the Company entered into definitive agreements with George C. Carpenter IV, President and then Chief Executive Officer, Robin L. Smith, Chairman, as well as John Pappajohn, and Peter Unanue, each a director of the Company, and entities affiliated with Michal Votruba, a member of the Board of Directors of MYnd Analytics and Director of Life Sciences for the European-based RSJ-Gradus fund, relating to a private placement of an aggregate of 459,458 units for $1.85 per unit, with each unit consisting of one share of common stock and one common stock purchase warrant to purchase one share of Common Stock for $2.00 per share. | 9. RELATED PARTY TRANSACTIONS DCA Agreement On September 25, 2013, the Board approved a consulting agreement effective May 1, 2013, for marketing services provided by Decision Calculus Associates (“DCA”), an entity operated by Mr. Carpenter’s spouse, Jill Carpenter. Effective August 2015, DCA was engaged at a fee of $10,000 per month. From August 2015 through February 2017, DCA has been paid $170,000. The DCA contract was renewed at $3,000 a month effective March 1, 2017. The Company incurred fees of $31,000 and $$57,000 for the years ended September 30, 2018 and 2017, respectively. On May 1, 2018, the Company amended the agreement with DCA to reduce the monthly fee to $2,000 a month. The amendment provides for a term of one year with a 30 day termination clause. Hooper Holmes Agreement In 2016, we entered into an agreement with Hooper Holmes Inc., for which Dr. Smith, our Chairman of the Board, became an advisory member of its board as of March 16, 2017, and in which Mr. Pappajohn, our director, has participated in equity raises to become the beneficial owner of a greater than 10% interest. Hooper Holmes performs EEGs nationwide to patients who wish to obtain a PEER report. The Company paid $110,100 and $20,300 for these services during the years ended September 30, 2018 and 2017, respectively. Sale of Preferred Shares On March 29, 2018, the Company sold an aggregate of 1,050,000 shares for $2.00 per Unit, each consisting of one share of newly-designated Series A Preferred Stock or Series A-1 Preferred Stock, par value $0.001 per share and one Warrant to purchase one share of Common Stock, par value $0.001 per share for $2.34 per share in a private placement to three affiliates of the Company, John And Mary Pappajohn and Peter Unanue, for gross proceeds of $2.1 million. The private placement closed on March 29, 2018. Private Placement with Directors and Management On September 21, 2018, the Company entered into definitive agreements with George C. Carpenter IV, President and Chief Executive Officer, Robin L. Smith, Chairman, as well as John Pappajohn, and Peter Unanue, each a director of the Company, and entities affiliated with Michal Votruba, a member of the board of directors of MYnd Analytics and Director of Life Sciences for the European-based RSJ-Gradus fund, relating to a private placement of an aggregate of 459,458 units for $1.85 per unit, with each unit consisting of one share of common stock and one common stock purchase warrant to purchase one share of Common Stock for $2.00 per share. |
LOSS PER SHARE
LOSS PER SHARE | 6 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Sep. 30, 2018 | |
Earnings Per Share [Abstract] | ||
LOSS PER SHARE | 10. LOSS PER SHARE Basic earnings (loss) per share is computed by dividing income (loss) available to common stockholders less the current period preferred stock dividend by the weighted average common shares outstanding during the period. Diluted earnings (loss) per share takes into account the potential dilution that could occur if securities or other contracts to issue Common Stock were exercised and converted into Common Stock A summary of the net income (loss) and shares used to compute net income (loss) per share for the three and six months ended March 31, 2019 and 2018 is as follows: Three Months Ended Six Months Ended 2019 2018 2019 2018 Net loss for computation of basic and diluted net loss per share: Net Loss attributable to MYnd Analytics, Inc. $ (2,258,600 ) $ (2,587,300 ) $ (4,636,100 ) $ (5,356,700 ) Preferred stock dividends (24,600 ) — (49,200 ) — $ (2,283,200 ) $ (2,587,300 ) $ (4,685,300 ) $ (5,356,700 ) Basic and diluted net loss per share: Basic and diluted net loss per share $ (0.27 ) $ (0.59 ) $ (0.59 ) $ (1.23 ) Basic and diluted weighted average shares outstanding 8,399,443 4,362,564 7,964,021 4,347,745 Anti-dilutive common equivalent shares not included in the computation of dilutive net loss per share: Warrants 6,075,319 5,617,481 6,075,319 5,617,481 Restricted common stock 13,095 42,416 13,095 42,416 Options 1,629,935 554,059 1,629,935 554,059 Total 7,718,349 6,213,956 7,718,349 6,213,956 | 10. LOSS PER SHARE Basic earnings (loss) per share is computed by dividing income (loss) available to common stockholders less the current period preferred stock dividend by the weighted average common shares outstanding during the period. Diluted earnings (loss) per share takes into account the potential dilution that could occur if securities or other contracts to issue Common Stock were exercised and converted into Common Stock. A summary of the net income (loss) and shares used to compute net income (loss) per share for the fiscal years ended September 30, 2018 and 2017 is as follows: 2018 2017 Net Loss for computation of basic and diluted net loss per share: Net loss attributable to MYnd Analytics, Inc. $ (9,598,700 ) $ (7,112,800 ) Preferred stock dividends (49,200 ) — $ (9,647,900 ) $ (7,112,800 ) Basic and Diluted net loss per share: Basic net loss per share $ (1.86 ) $ (2.52 ) Basic and Diluted weighted average shares outstanding 5,199,566 2,817,415 Anti-dilutive common equivalent shares not included in the computation of dilutive net loss per share: Warrants 6,075,874 957,198 Restricted common stock 406,564 4,500 Options 803,937 359,704 |
COMMITMENTS AND CONTINGENT LIAB
COMMITMENTS AND CONTINGENT LIABILITIES | 6 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | ||
COMMITMENTS AND CONTINGENT LIABILITIES | 11. COMMITMENTS AND CONTINGENT LIABILITIES Litigation The Company is not currently party to any legal proceedings, the adverse outcome of which, in the Company’s management’s opinion, individually or in the aggregate, would have a material adverse effect on the Company’s results of operations or financial position. Lease Commitments The Company has entered into operating lease agreements for its office locations in California, Virginia and Pennsylvania which expire at various times through September 30, 2020. Minimum future lease payments under these leases are as follows: Payments due by period Contractual Obligations Total 2019 2020 Operating Lease Obligations $ 177,300 $ 129,800 $ 47,500 Total $ 177,300 $ 129,800 $ 47,500 | 11. COMMITMENTS AND CONTINGENT LIABILITIES Litigation The Company is not currently party to any legal proceedings, the adverse outcome of which, in the Company's management's opinion, individually or in the aggregate, would have a material adverse effect on the Company's results of operations or financial position. Lease Commitments The Company is a party to four leases, three are for office space located in Mission Viejo and Laguna Hills, California which house the corporate headquarters and neurometric business. The total lease payments per month are $10,666. The two leases for office space located in Mission Viejo and Laguna Hills have been renewed through February 28, 2020 and the total lease payments per month will be $8,411 beginning February 1, 2019. As of November 30, 2018, the third lease for a small annex office in Laguna Hills has been terminated. The Company has one three-year lease for office space in Tysons, Virginia. As of June 1, 2018, the Company has sublet the premises under the Tyson, Virginia office space lease. The master lease period expires on September 30, 2020. The rent through September 30, 2018 was prorated at $2,508 per month; for the subsequent 12 months the rent is prorated at $2,576 per month; and for the remaining twelve months the rent will be prorated at $2,647 per month. The subtenant is paying approximately seventy seven percent of the master lease payment for the fourteen months ending on September 30, 2019 and has an option to renew for the final lease year. Arcadian Services' business has office space located in Fort Washington, PA. The lease period expires on February 28, 2020. The rent is currently $3,312 per month and will increase to $3,410 per month on March 1, 2019 for the remainder of the lease. Payments due by fiscal year Contractual Obligations 2019 2020 Total Operating Lease Obligations $ 114,000 $ 48,800 $ 162,800 Total $ 114,000 $ 48,800 $ 162,800 |
SIGNIFICANT CUSTOMERS
SIGNIFICANT CUSTOMERS | 12 Months Ended |
Sep. 30, 2018 | |
Significant Customers | |
SIGNIFICANT CUSTOMERS | 12. SIGNIFICANT CUSTOMERS For the fiscal year ended September 30, 2018, four customers accounted for 29% of Neurometric Services revenue and three customers accounted for 35% of accounts receivable at September 30, 2018. For the fiscal year ended September 30, 2017, four customers accounted for 50% of Neurometric Services revenue and three customers accounted for 72% of accounts receivable at September 30, 2017. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Sep. 30, 2018 | |
Subsequent Events [Abstract] | ||
SUBSEQUENT EVENTS | 12. SUBSEQUENT EVENTS Aspire Line Subsequent to March 31, 2019, the Company issued purchase notices to Aspire Capital to purchase 463,636 shares of common stock, at a weighted average per share price of $1.10, resulting in gross cash proceeds of $510,000. Equity Grant to Chairman of the Board On May 8, 2019, | 13. SUBSEQUENT EVENTS Special Meeting of Stockholders At the Special Meeting of Stockholders of the Company, held on November 26, 2018 ("Special Meeting 2018") the holders of the Company's common and preferred stock voted to (i) amend the 2012 Plan to eliminate the annual individual award limits under the 2012 Plan and (ii) amend 2012 Plan to increase: (a) the total number of shares of common stock, par value $0.001 per share ("Common Stock"), available for grant under the 2012 Plan (subject to the overall limits described in clause (b) below) from 1,500,000 shares to an aggregate of 2,250,000 shares and (b) the aggregate limitation on authorized shares available for grant under the 2012 Plan, following any increases pursuant to the evergreen provision (the "Evergreen Provision"), from 2,200,000 shares to 2,950,000 shares. In addition, to the above, the Company received shareholder approval to remove the exchange cap under the Second Purchase Agreement in compliance with the applicable listing rules of the NASDAQ Stock Market. Pursuant to NASDAQ Listing Rule 5635(d), shareholder approval is required prior to the issuance of securities in connection with a transaction other than a public offering involving the sale, issuance or potential issuance by the Company of common stock (or securities convertible into or exercisable common stock) equal to 20% or more of the common stock outstanding before the issuance for less than the greater of book or market value of the stock. Following receipt of shareholder approval, the Company may issue an additional $8.1 million, up to an aggregate of $10 million, of common stock to Aspire Capital under the Second Purchase Agreement. Share Grants to Directors On October 8, 2018, the Compensation Committee and the Board granted to Director Votruba 144,000 restricted shares of common stock under the 2012 Plan for efforts expended as a Board member to explore and identify licensing and other opportunities for the Company in Europe. Mr. Votruba is a representative of RSJ and has agreed to assign to RSJ the benefit of all options and restricted shares granted to him in connection with his service as a member of the board of directors. On October 8, 2018, the Board granted (i) 30,000 restricted shares under the 2012 Plan to each of John Pappajohn and Peter Unanue, Members of the Board and (ii) 45,000 restricted shares under the 2012 Plan to Geoffrey Harris, who serves as the Audit Committee chairperson, these shares will vest quarterly. Option Grants to the Chairman, Executive Officers and Other Employees On October 8, 2018, the Board granted an option to Dr. Robin Smith, the Chairman of the Board to purchase 48,000 shares of Common Stock. On the same date, the Board granted options to purchase 48,000 and 30,000 shares to each of George Carpenter, the President and Chief Executive Officer and Donald D'Ambrosio, the Chief Financial Officer, respectively, and options to purchase an aggregate of 100,500 shares to other employees and consultants. All of the above options will vest upon certain milestones being met and were subject to the shareholder approval which was granted on November 26, 2018 at the Special Meeting of Shareholders. On December 3, 2018, options were granted to purchase 30,000 and 26,500 shares of Company common stock to each of George Carpenter, the President and Chief Executive Officer and Donald D'Ambrosio, the Chief Financial Officer, respectively, and options to purchase an aggregate of 46,758 shares of Company common stock were granted to other employees. One-third of the options granted vested on December 3, 2018 and one-third will vest on each of December 3, 2019 and December 3, 2020. Leases In October and November of 2018, the Company renewed the office space leases in Mission Viejo and Laguna Hills, California until February 28, 2020. The total lease payments per month will be $8,411 beginning February 1, 2019. As of November 30, 2018, the third lease for a small annex office in Laguna Hills has been terminated. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Sep. 30, 2018 | |
Accounting Policies [Abstract] | ||
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with GAAP and applicable rules and regulations of the Securities and Exchange Commission (the “SEC”) regarding interim financial reporting. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting of normal recurring accruals and adjustments) necessary to present fairly the financial position, changes in stockholders’ equity, results of operations and cash flows of the Company at the dates and for the periods indicated. The interim results for the quarter ended March 31, 2019 are not necessarily indicative of results for the full 2019 fiscal year or any other future interim periods. As such, the information included in this quarterly report on Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company’s Form 10- K for the year ended September 30, 2018. | Basis of Presentation The accompanying consolidated financial statements of the Company have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the "SEC") and are in accordance with accounting principles generally accepted in the United States of America. |
Basis of Consolidation | Basis of Consolidation The unaudited condensed consolidated financial statements include the results of the Company, its wholly owned subsidiary, Arcadian, two professional associations, Arcadian Telepsychiatry PA (“Texas PA”) incorporated in Texas, Arcadian Telepsychiatry Florida P.A. (“Florida PA”) incorporated in Florida, and two professional corporations, Arcadian Telepsychiatry P.C. (“Pennsylvania PC”) incorporated in Pennsylvania and Arcadian Telepsychiatry of California, P.C. incorporated in California (“California PC” and together with the Pennsylvania PC, Florida PA and Texas PA, the “Arcadian Entities.”) Arcadian is party to Management Services Agreements by and among it and the Arcadian Entities, pursuant to which Arcadian provides management and administrative services to each of the Arcadian Entities. Each entity is established pursuant to the requirements of its respective domestic jurisdiction governing the corporate practice of medicine. All intercompany balances and transactions have been eliminated upon consolidation. | Basis of Consolidation The audited consolidated financial statements include the results of MYnd, its wholly owned subsidiary, Arcadian Telepsychiatry Services LLC ("Arcadian Services"), two professional associations, Arcadian Telepsychiatry PA ("Texas PA") which is incorporated in Texas and Arcadian Telepsychiatry Florida P.A. ("Florida PA") which is incorporated in Florida, and two professional corporations, Arcadian Telepsychiatry P.C. ("Pennsylvania PC") which is incorporated in Pennsylvania and Arcadian Telepsychiatry of California, P.C. ("California PC") which is incorporated in California collectively "the Arcadian Entities." Arcadian Services is party to Management Services Agreements by and among it and the Arcadian Entities pursuant to which each entity provides services to Arcadian Services. Each entity is established pursuant to the requirements of its respective domestic jurisdiction governing the corporate practice of medicine. All intercompany balances and transactions have been eliminated upon consolidation. |
Segments | Segments We view our operations and manage our business as one operating segment. | Segments We view our operations and manage our business as one operating segment. |
Variable Interest Entities (VIE) | Variable Interest Entities (VIE) On November 13, 2017, Arcadian entered into a management and administrative services agreement with Texas PA and with Pennsylvania PC, for an initial fixed term of 20 years. In accordance with relevant accounting guidance, Texas PA and Pennsylvania PC are each determined to be a Variable Interest Entity (“VIE”) as MYnd is the primary beneficiary with the ability to direct the activities (excluding clinical decisions) that most significantly affect Texas PA’s and Pennsylvania PC’s economic performance through its majority representation of the Texas PA and Pennsylvania PC; therefore, Texas PA and Pennsylvania PC are consolidated by MYnd. On January 19, 2018, Arcadian entered into a management and administrative services agreement with California PC, for an initial fixed term of 20 years. In accordance with relevant accounting guidance, California PC is determined to be a VIE and MYnd is the primary beneficiary with the ability to direct the activities (excluding clinical decisions) that most significantly affect California PC’s economic performance through its majority representation of California PC; therefore, California PC is consolidated by MYnd. On March 27, 2018, Arcadian entered into a management and administrative services agreement with Florida PA, for an initial fixed term of 20 years. In accordance with relevant accounting guidance, Florida PA is determined to be a VIE and MYnd is the primary beneficiary with the ability to direct the activities (excluding clinical decisions) that most significantly affect Florida PA’s economic performance through its majority representation of Florida PA; therefore, Florida PA is consolidated by MYnd. The Company holds a variable interest in the entities which contract with physicians and other health professionals in order to provide telepsychiatry services to Arcadian. The entities are considered variable interest entities since they do not have sufficient equity to finance their activities without additional financial support. An enterprise having a controlling financial interest in a VIE must consolidate the VIE if it has both power and benefits-that is, it has (1) the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance (power) and (2) the obligation to absorb losses of the VIE that potentially could be significant to the VIE or the right to receive benefits from the VIE that potentially could be significant to the VIE (benefits). The Company has the power and rights to control all activities of the entities and funds and absorbs all losses of the VIE. In accordance with management service agreements entered into between the Company and medical professional corporations and associations in compliance with regulatory requirements within certain states, the Company has the power to direct activities of the VIE’s and may transfer the assets from the individual VIEs. Therefore, the Company considers that there are no assets in any of the consolidated VIEs that may be relied upon to settle obligations of these entities. Furthermore, creditors of the VIEs do not have recourse to the general credit of the Company for any of the liabilities of the VIEs. Finally, none of the professional corporations or associations have purchased equipment nor are they responsible for handling cash or accounts receivable. There is no either explicit or implicit arrangement that requires the Company to provide financial support to the VIE, including events or circumstances that could expose the Company to a loss. For the six months ended March 31, 2019 and 2018, the Company did not provide, nor does it intend to provide in the future, any financial or other support either explicitly or implicitly during the periods presented to its variable interest entities. In addition, there are no restrictions on the net income earned by the VIEs. The Company allocates all of the net income earned to the primary owner of the VIE. As part of the operating agreement with the VIE, the Company will be reimbursed for all cost incurred related to operating the VIE in addition to a management fee charged for oversight. For the six months ended March 31, 2019 and 2018, no net income was allocated to the VIEs nor have any dividends been paid from the Company to the VIEs from inception to date, respectively. In addition, to the extent that the VIE is not a shareholder of the Company, the Company has not paid any dividends to the VIEs from inception to date and there are no dividend obligations within the management services agreement entered into with the medical professional corporations and associations. | Variable Interest Entities (VIE) On November 13, 2017, Arcadian Services entered into a management and administrative services agreement with Texas PA and with Pennsylvania PC, for an initial fixed term of 20 years. In accordance with relevant accounting guidance, Texas PA and Pennsylvania PC are determined to be a Variable Interest Entity ("VIE") as MYnd is the primary beneficiary with the ability to direct the activities (excluding clinical decisions) that most significantly affect Texas PA's and Pennsylvania PC's economic performance through its majority representation of the Texas PA and Pennsylvania PC; therefore, Texas PA and Pennsylvania PC are consolidated by MYnd. On January 19, 2018, Arcadian Services entered into a management and administrative services agreement with California PC, for an initial fixed term of 20 years. In accordance with relevant accounting guidance, California PC is determined to be a VIE and MYnd is the primary beneficiary with the ability to direct the activities (excluding clinical decisions) that most significantly affect California PC's economic performance through its majority representation of California PC; therefore, California PC is consolidated by MYnd. On March 27, 2018, Arcadian Services entered into a management and administrative services agreement with Florida PA, for an initial fixed term of 20 years. In accordance with relevant accounting guidance, Florida PA is determined to be a VIE and MYnd is the primary beneficiary with the ability to direct the activities (excluding clinical decisions) that most significantly affect Florida PA's economic performance through its majority representation of Florida PA; therefore, Florida PA is consolidated by MYnd. The Company holds a variable interest in the entities which contract with physicians and other health professionals in order to provide telepsychiatry services to Arcadian Services. The entities are considered variable interest entities since they do not have sufficient equity to finance their activities without additional financial support. An enterprise having a controlling financial interest in a VIE must consolidate the VIE if it has both power and benefits, that is, it has (1) the power to direct the activities of a VIE that most significantly impact the VIE's economic performance (power) and (2) the obligation to absorb losses of the VIE that potentially could be significant to the VIE or the right to receive benefits from the VIE that potentially could be significant to the VIE (benefits). The Company has the power and rights to control all activities of the entities and funds and absorbs all losses of the VIE. |
Use of Estimates | Use of Estimates The preparation of the unaudited condensed consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expense, and related disclosure of assets and liabilities. On an ongoing basis, the Company evaluates its estimates, including those related to revenue recognition, allowance for doubtful accounts, useful lives of furniture and equipment, intangible assets, valuation allowance on deferred taxes, valuation of equity instruments, and accrued liabilities. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from these estimates. | Use of Estimates The preparation of the consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expense, and related disclosure of contingent assets and liabilities. On an ongoing basis, the Company evaluates its estimates, including those related to revenue recognition, doubtful accounts, intangible assets, income taxes, valuation of equity instruments, accrued liabilities, contingencies and litigation. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from these estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all liquid instruments purchased with a maturity of three months or less to be cash equivalents. The Company deposits its cash with major financial institutions and may at times exceed the federally insured limit of $250,000. At March 31, 2019 cash exceeds the federally insured limit by $1.1 million. The Company believes that the risk of loss is minimal. To date, the Company has not experienced any losses related to cash deposits with financial institutions. | Cash and Cash Equivalents The Company considers all liquid instruments purchased with a maturity of three months or less to be cash equivalents. The Company deposits its cash with major financial institutions and may at times exceed the federally insured limit of $250,000. At September 30, 2018 cash exceeds the federally insured limit by $3.0 million. The Company believes that the risk of loss is minimal. To date, the Company has not experienced any losses related to cash deposits with financial institutions. |
Debt Instruments | Debt Instruments Debt instruments are initially recorded at fair value, with coupon interest and amortization of debt issuance discounts recognized in the statement of operations as interest expense at each period end while such instruments are outstanding. | Debt Instruments Debt instruments are initially recorded at fair value, with coupon interest and amortization of debt issuance discounts recognized in the statement of operations as interest expense at each period end while such instruments are outstanding. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, ASC 825-10 Recognition and Measurement of Financial Assets and Financial Liabilities defines financial instruments and requires disclosure of the fair value of financial instruments held by the Company. The Company considers the carrying amount of cash, accounts receivable, other receivables, accounts payable and accrued liabilities, to approximate their fair values because of the short period of time between the origination of such instruments and their expected realization. The Company also analyzes all financial instruments with features of both liabilities and equity under ASC 480-10, ASC 815-10 and ASC 815-40. The FASB has established a framework for measuring fair value using generally accepted accounting principles. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy are described as follows: ● Level I inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets; ● Level II inputs to the valuation methodology include: ○ Quoted prices for similar assets or liabilities in active markets; ○ Quoted prices for identical or similar assets or liabilities in inactive markets; Inputs other than quoted prices that are observable for the asset or liability; ○ Inputs that are derived principally from or corroborated by observable market data by correlation or other means; If the asset or liability has a specified (contractual) term, the level 2 input must be observable for substantially the full term of the asset or liability. ● Level III inputs to the valuation methodology are unobservable and significant to the fair value measurement. The asset or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used must maximize the use of observable inputs and minimize the use of unobservable inputs. | Fair Value of Financial Instruments Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, ASC 825-10 - Recognition and Measurement of Financial Assets and Financial Liabilities defines financial instruments and requires disclosure of the fair value of financial instruments held by the Company. The Company considers the carrying amount of cash, accounts receivable, other receivables, accounts payable and accrued liabilities, to approximate their fair values because of the short period of time between the origination of such instruments and their expected realization. The Company also analyzes all financial instruments with features of both liabilities and equity under ASC 480-10, ASC 815-10 and ASC 815-40. The FASB has established a framework for measuring fair value using generally accepted accounting principles. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy are described as follows: ● Level I inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets; ● Level II inputs to the valuation methodology include: ○ quoted prices for similar assets and liabilities in active markets; ○ Quoted prices for identical or similar assets or liabilities in inactive markets; ○ Inputs other than quoted prices that are observable for the asset or liability; ○ Inputs that are derived principally from or corroborated by observable market data by correlation or other means; If the asset or liability has a specified (contractual) term, the level 2 input must be observable for substantially the full term of the asset or liability. ● Level III inputs to the valuation methodology are unobservable and significant to the fair value measurement. The asset or liability's fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used must maximize the use of observable inputs and minimize the use of unobservable inputs. |
Accounts Receivable, net | Accounts Receivable, net The Company estimates the collectability of customer receivables on an ongoing basis by reviewing past-due invoices and assessing the current creditworthiness of each customer. Allowances are provided for specific receivables deemed to be at risk for collection which as of March 31, 2019 and September 30, 2018 were $8,100 and $1,800, respectively. | Accounts Receivable The Company estimates the collectability of customer receivables on an ongoing basis by reviewing past-due invoices and assessing the current creditworthiness of each customer. Allowances are provided for specific receivables deemed to be at risk for collection which as of September 30, 2018 and 2017 are $1,800 and $1,000 respectively. |
Property and Equipment | Property and Equipment Property and equipment, which are recorded at cost, consist of office furniture and equipment which are depreciated, over their estimated useful lives on a straight-line basis. The useful lives of these assets are estimated to be between three and five years. Depreciation expense on furniture and equipment for the three months ended March 31, 2019 and 2018 was $16,100 and $15,600, respectively. Depreciation expense on furniture and equipment for the six months ended March 31, 2019 and 2018 was 32,300 and 28,000, respectively. Accumulated depreciation at March 31, 2019 and September 30, 2018 was $181,500 and 149,200, respectively. | Property and Equipment Property and Equipment, which are recorded at cost, consist of office furniture and equipment, which are depreciated, over their estimated useful lives on a straight-line basis. The useful lives of these assets is estimated to be between three and five years. Depreciation expense on furniture and equipment for the twelve months ended September 30, 2018 and 2017 was $60,300 and $19,700 respectively. Accumulated depreciation at September 30, 2018 and 2017 was $149,200 and $84,200, respectively. |
Long-Lived Assets | Long-Lived Assets As required by ASC 350-30 - Intangibles—Goodwill and other, the Company reviews the carrying value of its long-lived assets at least annually or whenever events or changes in circumstances indicate that the historical cost-carrying value of an asset may no longer be recoverable. The Company assesses recoverability of the carrying value of the asset by estimating the future undiscounted net cash flows expected to result from the asset, including eventual disposition. If the future net cash flows are less than the carrying value of the asset, an impairment loss is recorded equal to the difference between the asset's carrying value and fair value. No impairment loss was recorded for the years ended September 30, 2018 and 2017. | |
Intangible Assets | Intangible Assets Costs for software developed for internal use are accounted for through the capitalization of those costs incurred in connection with developing or obtaining internal-use software. Capitalized costs for internal-use software are included in intangible assets in the unaudited condensed consolidated balance sheets. Capitalized software development costs are amortized over three years. Costs incurred during the preliminary project along with post-implementation stages of internal use computer software development and costs incurred to maintain existing product offerings are expensed as incurred. The capitalization and ongoing assessment of recoverability of development costs require considerable judgment by management with respect to certain external factors, including, but not limited to, technological and economic feasibility and estimated economic life. On November 13, 2017, the Company acquired customer relationship and tradename intangibles in connection with the Arcadian acquisition which were recorded at fair value and are being amortized over an estimated useful life of four years on a straight-line basis. Amortization for the three months ended March 31, 2019 and 2018 was $14,000 and $13,800, respectively. Amortization for the six months ended March 31, 2019 and 2018 was 28,000 and 24,700, respectively. Accumulated amortization was $122,300 and $94,200 at March 31, 2019 and September 30, 2018 respectively. The expected amortization of the intangible assets, as of March 31, 2019, is as follows: For the year ended September 30, Intangible assets 2019 (for the remaining six months) $ 26,100 2020 29,400 2021 29,400 2022 3,500 Total $ 88,400 | Intangible Assets Costs for software developed for internal use are accounted for through the capitalization of those costs incurred in connection with developing or obtaining internal-use software. Capitalized costs for internal-use software are included in intangible assets in the consolidated balance sheet. Capitalized software development costs are amortized over three years. Costs incurred during the preliminary project along with post-implementation stages of internal use computer software development and costs incurred to maintain existing product offerings are expensed as incurred. The capitalization and ongoing assessment of recoverability of development costs require considerable judgment by management with respect to certain external factors, including, but not limited to, technological and economic feasibility and estimated economic life. At September 30, 2018, the Company had $101,700 in capitalized software development costs. Amortization for the twelve months ended September 30, 2018 and 2017 was $29,000 and $29,000, respectively. Accumulated amortization was $70,400 and $39,300 at September 30, 2018 and 2017, respectively. On November 13, 2017, the Company acquired customer relationships and tradename intangibles in connection with the Arcadian Services acquisition of which $109,000 were recorded at fair value and are being amortized over an estimated useful life of four years on a straight-line basis. Amortization for the twelve months ended September 30, 2018 and 2017 was $23,800 and none, respectively. Accumulated amortization was $23,800 and $0 at September 30, 2018 and 2017, respectively. The expected amortization of the intangible assets, as of September 30, 2018, for each of the next four years is as follows: For the year ended September 30, Intangible 2019 $ 54,200 2020 29,400 2021 29,400 2022 3,500 Total $ 116,500 |
Goodwill | Goodwill Goodwill represents the excess of the aggregate purchase price paid over the fair value of the net assets acquired in our business combinations. Goodwill is not amortized and is tested for impairment at least annually or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Events or changes in circumstances that could trigger an impairment review include a significant adverse change in business climate, an adverse action or assessment by a regulator, unanticipated competition, a loss of key personnel, significant changes in the manner of our use of the acquired assets or the strategy for our overall business, significant negative industry or economic trends, or significant under performance relative to expected historical or projected future results of operations. The Company has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying value, including goodwill. If, after assessing the totality of events or circumstances, the Company determines that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, additional impairment testing is not required. The Company tests for goodwill impairment annually on September 30. The Company performed a qualitative goodwill assessment at September 30, 2018 and concluded there was no impairment based on consideration of a number of factors, including the improvement in the Company’s key operating metrics over the prior year, improvement in the strength of the general economy and the Company’s continued execution against its overall strategic objectives. Based on the foregoing, the Company determined that it was not more likely than not that the fair value of its reporting unit is less than its carrying amount and therefore that no further impairment testing was required. During the six months ended March 31, 2019, the Company did not record any Goodwill impairment. | Goodwill Goodwill represents the excess of the aggregate purchase price paid over the fair value of the net assets acquired in our business combinations. Goodwill is not amortized and is tested for impairment at least annually or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Events or changes in circumstances that could trigger an impairment review include a significant adverse change in business climate, an adverse action or assessment by a regulator, unanticipated competition, a loss of key personnel, significant changes in the manner of our use of the acquired assets or the strategy for our overall business, significant negative industry or economic trends, or significant underperformance relative to expected historical or projected future results of operations. The Company has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying value, including goodwill. If, after assessing the totality of events or circumstances, the Company determines that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, additional impairment testing is not required. The Company tests for goodwill impairment annually on September 30. The Company performed a qualitative goodwill assessment at September 30, 2018 and concluded there was no impairment based on consideration of a number of factors, including the improvement in the Company's key operating metrics over the prior year, improvement in the strength of the general economy and the Company's continued execution against its overall strategic objectives. Based on the foregoing, the Company determined that it was not more likely than not that the fair value of its reporting unit is less than its carrying amount and therefore that no further impairment testing was required. |
Accrued Compensation | Accrued Compensation Accrued compensation consists of accrued vacation pay, accrued compensation granted by the Board but not paid, and accrued pay due to staff members. Accrued compensation – related parties consists of accrued vacation pay, accrued bonuses granted by the Board but not paid for officers and directors. | Accrued Compensation Accrued compensation consists of accrued vacation pay, accrued compensation granted by the Board but not paid, and accrued pay due to staff members. Accrued compensation – related parties consists of accrued vacation pay, accrued bonuses granted by the Board but not paid for officers and directors. |
Deferred Revenue | Deferred Revenue Deferred revenue represents cash collected in advance of services being rendered but not earned as of March 31, 2019 and September 30, 2018. This represents a philanthropic grant for the payment of PEER Reports ordered in a clinical trial for a member of the U.S. Military, a veteran or their family members, the cost of which is not covered by other sources. On August 1, 2017, the Company entered into a Research Study Funding Agreement with Horizon Healthcare Services, Inc. dba Horizon Blue Cross Blue Shield of New Jersey and its subsidiaries (collectively “Horizon”) and Cota, Inc. (“Cota”). On February 6, 2018, Horizon prepaid for part of the study in the amount of $125,000 and the Company paid Cota $15,000 out of this payment for its services under the Study. These deferred revenue grant funds total $152,100 and $159,700 as of March 31, 2019 and September 30, 2018, respectively. | Deferred Revenue Deferred revenue represents cash collected in advance of services being rendered but not earned as of September 30, 2018 and 2017. This represents a philanthropic grant for the payment of PEER Reports ordered in a clinical trial for a member of the U.S. Military, a veteran or their family members, the cost of which is not covered by other sources. On August 1, 2017, the Company entered into a Research Study Funding Agreement with Horizon Healthcare Services, Inc. dba Horizon Blue Cross Blue Shield of New Jersey and its subsidiaries (collectively "Horizon") and Cota, Inc. ("Cota"). On February 6, 2018, Horizon prepaid for part of the study, $125,000 and the Company paid Cota $15,000 out of this payment for its services under the Study. These deferred revenue grant funds total $159,700 and $45,900 as of September 30, 2018 and 2017, respectively. |
Revenue Recognition | Revenue Recognition Neurometric services - gross service revenue is recorded in the accounting records at the time the services are provided on an accrual basis at the provider’s established rates, regardless of whether the provider expects to collect that amount. The Company reserves a provision for contractual adjustment and discounts that are deducted from gross service revenue. The Company reports revenues net of any sales, use and value added taxes. Telepsychiatry services - The Company satisfies its performance obligation to stand ready to provide telepsychiatry services which occurs when the Company’s clients have access to the telepsychiatry service. The Company generally bills for the telepsychiatry services on a monthly basis with payment terms generally being 30 days. There are not significant differences between the timing of revenue recognition and billing. Consequently, the Company has determined that client contracts do not include a financing component. Revenue is recognized in an amount that reflects the consideration that is expected in exchange for the service and this may include a variable transaction price as the number of members may vary from the initial billing. Based on historical experience, the Company estimates this amount which is recorded as a component of revenue. Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers . Revenue Recognition Revenue from providing neurometric and telepsychiatry services are recognized under Topic 606 in a manner that reasonably reflects the delivery of its services to customers in return for expected consideration and includes the following elements: ○ executed contracts with the Company’s customers that it believes are legally enforceable; ○ identification of performance obligations in the respective contract; ○ determination of the transaction price for each performance obligation in the respective contract; ○ allocation the transaction price to each performance obligation; and ○ recognition of revenue only when the Company satisfies each performance obligation. | Revenues The Company derives substantially all of its revenue from neurometric and telepsychiatry services. The Company recognizes revenues in accordance with ASC 605, and accordingly revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable, collectability is reasonably assured and acceptance criteria, if any, have been met. If any of these criteria are not met, revenue recognition is deferred until such time that all of the criteria are met. The Company's neurometric and telepsychiatry services are recognized in the month the services are delivered by the physician. |
Research and Development Expenses | Research and Development Expenses The Company charges research and development expenses to operations as incurred. | Research The Company charges research and development expenses to operations as incurred. |
Advertising Expenses | Advertising Expenses The Company charges all advertising expenses to operations as incurred. For the three months ended March 31, 2019 and 2018 advertising expenses were $4,800 and $97,500, respectively. For the six months ended March 31, 2019 and 2018 advertising expenses were $4,800 and $248,500, respectively | Advertising Expenses The Company charges all advertising expenses to operations as incurred. For the year ended September 30, 2018 and 2017 advertising expenses were $248,600 and $152,000, respectively. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for employee stock options in accordance with ASC 718, Compensation-Stock Compensation. For stock options issued to employees and directors we use the Black-Scholes option valuation model for estimating fair value at the date of grant. For stock options issued for services rendered by non-employees, we recognize compensation expense in accordance with the requirements of ASC 505-50, Equity, as amended. Non-employee option grants that do not vest immediately upon grant are recorded as an expense over the vesting period. At the end of each financial reporting period prior to performance, the value of these options, as calculated using the Black-Scholes option valuation model, is determined, and compensation expense recognized or recovered during the period is adjusted accordingly. Since the fair value of options granted to non-employees is subject to change in the future, the amount of the future compensation expense is subject to adjustment until the common stock options or warrants are fully vested. | Stock-Based Compensation The Company accounts for awards to employees in accordance with ASC 718, Compensation-Stock Compensation. For stock options issued to employees and directors we use the Black-Scholes option valuation model for estimating fair value at the date of grant. For stock options issued for services rendered by non-employees, we recognize compensation expense in accordance with the requirements of ASC 505-50, Equity, or ASC 505-50, as amended. Non-employee option grants that do not vest immediately upon grant are recorded as an expense over the vesting period. At the end of each financial reporting period prior to performance, the value of these options, as calculated using the Black-Scholes option valuation model, is determined, and compensation expense recognized or recovered during the period is adjusted accordingly. Since the fair value of options granted to non-employees is subject to change in the future, the amount of the future compensation expense is subject to adjustment until the common stock options or warrants are fully vested. |
Warrants | Warrants From time to time, the Company has issued warrants to purchase shares of common stock. These warrants have been issued in connection with the Company’s financing transactions. The Company’s warrants are subject to standard anti-dilution provisions applicable to shares of our common stock. The Company estimates the fair value of warrants using the Black-Scholes option valuation model with the following inputs: market prices of the stock, time to maturity, volatility, zero expected dividend rate and risk free rate all at the date of the warrant issuance. | Warrants From time to time, the Company has issued warrants to purchase shares of common stock. These warrants have been issued in connection with the Company's financing transactions. The Company's warrants are subject to standard anti-dilution provisions applicable to shares of our common stock. The Company estimates the fair value of warrants using the Black-Scholes option valuation model with the following assumptions: market prices of the stock, time to maturity, volatility, zero expected dividend rate and risk free rate all at the date of the warrant issuance. |
Income Taxes | Income Taxes The Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are recorded, when necessary, to reduce deferred tax assets to the amount expected to be realized. On December 22, 2017, new legislation was adopted that significantly revises the Internal Revenue Code of 1986, as amended, or the Code. The newly enacted federal income tax law, among other things, contains significant changes to corporate taxation, including reduction of the corporate tax rate from a top marginal rate of 35 percent to a flat rate of 21 percent, limitation of the tax deduction for interest expense to 30 percent of adjusted earnings (except for certain small businesses), limitation of the deduction for net operating losses to 80 percent of current-year taxable income and elimination of net operating loss carrybacks, one time taxation of offshore earnings at reduced rates regardless of whether they are repatriated, immediate deductions for certain new investments instead of deductions for depreciation expense over time, and modifying or repealing many business deductions and credits. As a result of the implementation of certain provisions of FASB ASC 740, Income Taxes, which clarifies the accounting and disclosure for uncertainty in tax positions, the Company has analyzed filing positions in each of the federal and state jurisdictions where required to file income tax returns, as well as all open tax years in these jurisdictions. We have identified U.S. Federal and California as our major tax jurisdictions. Generally, the Company remains subject to Internal Revenue Service examination of our 2014 through 2016 U.S. federal income tax returns, and remain subject to California Franchise Tax Board examination of our 2013 through 2016 California Franchise Tax Returns. The Company has certain tax attribute carryforwards which will remain subject to review and adjustment by the relevant tax authorities until the statute of limitations closes with respect to the year in which such attributes are utilized. The Company believes that its income tax filing positions and deductions will be sustained on audit and do not anticipate any adjustments that will result in a material change to its financial position. Therefore, no reserves for uncertain income tax positions have been recorded pursuant to ASC 740. Our policy for recording interest and penalties associated with income-based tax audits is to record such items as a component of income taxes. Deferred taxes have been recorded on a net basis in the accompanying balance sheet. The Act reduces the U.S. statutory tax rate from 35% to 21%, effective January 1, 2018. As of September 30, 2018, the Company had gross Federal net operating loss carryforwards of approximately $60.2 million and State gross net operating loss carryforwards of approximately $33.8 million. Both the Federal and State net operating loss carryforwards will begin to expire in 2022 and 2023 respectively. The Company’s ability to utilize net operating loss carryforwards may be limited in the event that a change in ownership, as defined in the Internal Revenue Code, occurs in the future. The Company has placed a valuation allowance against the deferred tax assets in excess of deferred tax liabilities due to the uncertainty surrounding the realization of such excess tax assets. Management periodically evaluates the recoverability of the deferred tax assets and the level of the valuation allowance. At such time as it is determined that it is more likely than not that the deferred tax assets are realizable, the valuation allowance will be reduced accordingly. | Income Taxes The Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are recorded, when necessary, to reduce deferred tax assets to the amount expected to be realized. On December 22, 2017, President Trump signed into law new legislation that significantly revises the Internal Revenue Code of 1986, as amended, or the Code. The newly enacted federal income tax law, among other things, contains significant changes to corporate taxation, including reduction of the corporate tax rate from a top marginal rate of 35 percent to a flat rate of 21 percent, limitation of the tax deduction for interest expense to 30 percent of adjusted earnings (except for certain small businesses), limitation of the deduction for net operating losses to 80 percent of current-year taxable income and elimination of net operating loss carrybacks, one time taxation of offshore earnings at reduced rates regardless of whether they are repatriated, immediate deductions for certain new investments instead of deductions for depreciation expense over time, and modifying or repealing many business deductions and credits. As a result of the implementation of certain provisions of FASB ASC 740, Income Taxes, which clarifies the accounting and disclosure for uncertainty in tax positions, the Company has analyzed filing positions in each of the federal and state jurisdictions where required to file income tax returns, as well as all open tax years in these jurisdictions. We have identified U.S. Federal and California as our major tax jurisdictions. Generally, we remain subject to Internal Revenue Service examination of our 2013 through 2016 U.S. federal income tax returns, and remain subject to California Franchise Tax Board examination of our 2012 through 2016 California Franchise Tax Returns. We have certain tax attribute carryforwards which will remain subject to review and adjustment by the relevant tax authorities until the statute of limitations closes with respect to the year in which such attributes are utilized. We believe that our income tax filing positions and deductions will be sustained on audit and do not anticipate any adjustments that will result in a material change to our financial position. Therefore, no reserves for uncertain income tax positions have been recorded pursuant to ASC 740. Our policy for recording interest and penalties associated with income-based tax audits is to record such items as a component of income taxes. |
Non-controlling Interest | Non-controlling Interest The Company consolidates entities in which the Company has a controlling financial interest. The Company consolidates subsidiaries in which the Company holds, directly or indirectly, more than 50% of the voting rights, and VIEs for which the Company is the primary beneficiary. Non-controlling interests represent third-party equity ownership interests in the Company’s consolidated entities. The amount of net loss attributable to non-controlling interests for the three months ended March 31, 2019 and 2018 was $451,100 and $72,300, respectively. The amount of net loss attributable to non-controlling interests for the six months ended March 31, 2019 and 2018 was $778,000 and $72,300, respectively. | Non-controlling Interest The Company consolidates entities in which the Company has a controlling financial interest. The Company consolidates subsidiaries in which the Company holds, directly or indirectly, more than 50% of the voting rights, and VIEs for which the Company is the primary beneficiary. Non-controlling interests represent third-party equity ownership interests in the Company's consolidated entities. The amount of net loss attributable to non-controlling interests for the year ended September 30, 2018 and 2017 was $734,400 and $0, respectively. |
Earnings (Loss) per Share | Earnings (Loss) per Share Basic and diluted earnings (loss) per share is presented in conformity with the two-class method. Under the two-class method, basic net loss per share is computed by dividing income (loss) available to common stockholders by the weighted average common shares outstanding during the period. Net loss per share is calculated as the net loss less the current period preferred stock dividends. Diluted earnings (loss) per share takes into account the potential dilution that could occur if securities or other contracts to issue Common Stock were exercised and converted into Common Stock. | Earnings (Loss) per Share Basic and diluted earnings (loss) per share is presented in conformity with the two-class method. Under the two-class method, basic net loss per share is computed by dividing income (loss) available to common stockholders by the weighted average common shares outstanding during the period. Net loss per share is calculated as the net loss less the current period preferred stock dividends. Diluted earnings (loss) per share takes into account the potential dilution that could occur if securities or other contracts to issue Common Stock were exercised and converted into Common Stock. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Apart from the below-mentioned recent accounting pronouncements, there are no new accounting pronouncements that are currently applicable to the Company. In June 2018, the FASB issued ASU 2018-07, Improvements to Nonemployee Share-Based Payment Accounting (Topic 718). The amendments in this Update expand the scope of Topic 718 to include share based payment transactions for acquiring goods and services from nonemployees. An entity should apply the requirements of Topic 718 to nonemployee awards except for specific guidance on inputs to an option pricing model and the attribution of cost (that is, the period of time over which share-based payment awards vest and the pattern of cost recognition over that period). The amendments specify that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. The amendments also clarify that Topic 718 does not apply to share-based payments used to effectively provide (1) financing to the issuer or (2) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under Topic 606, Revenue from Contracts with Customers. The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. The Company is currently evaluating the impact of adoption of this standard to its financial statements. ASU 2016-15, “Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Payments” was issued by the Financial Accounting Standards Board (FASB) in August 2016. The purpose of this amendment is to address eight specific cash flow issues with the objective of reducing the existing diversity in practice. The amendments in this Update are effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is permitted. The Company adopted ASU 2016-15 during our first quarter of fiscal year 2019, which had no impact on our consolidated financial statements, and will apply the new guidance in future periods. ASU 2016-02, “Leases (Topic 842)” was issued by the FASB in February 2016. The guidance requires lessees to recognize the assets and liabilities that arise from leases on the balance sheet. ASU 2016-02 is effective for annual periods beginning after December 15, 2018, including interim periods within those annual periods, and should be applied using a modified retrospective approach. The guidance is effective for the Company on October 1, 2019. The Company will elect the prospective transition method with the effects of adoption recognized as a cumulative effect adjustment to the opening balance of retained earnings in the Company’s fiscal 2020 financial statements, with no restatement of comparative periods. The Company will also elect the package of three practical expedients permitted under the transition guidance within the new standard, which among other things, allows the Company to carryforward the historical lease classification. The Company is currently assessing the impact of adopting this guidance on its consolidated financial statements and related disclosures. The Company expects to record right of use assets and lease liabilities, which may be material, on its consolidated balance sheet upon adoption of this standard and is still assessing the impact to its results of operations and cash flows. Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers . Revenue Recognition | Recent Accounting Pronouncements Apart from the below-mentioned recent accounting pronouncements, there are no new accounting pronouncements that are currently applicable to the Company. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, as amended, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers, or the new revenue standard. The new revenue standard also includes Subtopic 340-40, Other Assets and Deferred Costs - Contracts with Customers, which discusses the deferral of incremental costs of obtaining a contract with a customer. The new revenue standard is effective for annual periods beginning after December 15, 2017. The standard permits the use of either a full retrospective or modified retrospective transition method. The Company will adopt the new revenue standard as of October 1, 2018, using the modified retrospective transition method applied to those contracts which were not completed as of that date. Upon adoption, we will recognize the cumulative effect of adopting this guidance as an adjustment to our opening balance of accumulated deficit. Prior periods will not be retrospectively adjusted. We do not expect the new revenue standard to have a material impact on our revenue upon adoption. Also, we do not expect the new standard to have a material impact as it relates to the deferral of incremental costs of obtaining contracts. The Company is in the process of implementing the necessary changes to its accounting policies, processes, internal controls and information systems that will be required to meet the new revenue standard's reporting and disclosure requirements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). This ASU requires that a lessee recognize lease assets and lease liabilities for those leases classified as operating leases. The guidance is effective for interim and annual periods beginning after December 15, 2018. The Company is currently evaluating the impact of adoption of this standard to its financial statements. In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting. This ASU simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, accounting for forfeitures, and classification of awards as either equity or liabilities, and classification on the statement of cash flows. The guidance is effective for interim and annual periods beginning after December 15, 2016, with early adoption permitted. The guidance will be applied prospectively, retrospectively, or by means of a cumulative-effect adjustment to equity as of the beginning of the period in which the guidance is adopted, dependent upon the specific amendment that is adopted within the ASU. The adoption of this new guidance did not have a material effect on the consolidated results of operations, cash flows, and financial position. The Company adopted the guidance on October 1, 2017 and chose to prospectively apply the guidance in its financial statements. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. This guidance narrows the definition of a business. This standard provides guidance to assist entities with evaluating when a set of transferred assets and activities is a business. This guidance is effective for interim and annual reporting periods beginning after December 15, 2017, and early adoption is permitted. This guidance must be applied prospectively to transactions occurring within the period of adoption. The Company adopted ASU 2017-01 on October 1, 2017, and prospectively applied ASU 2017-01 as required with no impact on its consolidated financial position, results of operations or cash flows. In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This guidance eliminates Step 2 from the goodwill impairment test, instead requiring an entity to recognize a goodwill impairment charge for the amount by which the goodwill carrying amount exceeds the reporting unit's fair value. This guidance is effective for interim and annual goodwill impairment tests in fiscal years beginning after December 15, 2019, and early adoption is permitted. This guidance must be applied on a prospective basis. The Company adopted ASU 2017-04 in the first quarter of 2018, and prospectively applied ASU 2017-04 as required with no impact on its consolidated financial position, results of operations or cash flows. In May 2017, the FASB issued ASU 2017-9, "Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting," to provide clarity and reduce both diversity in practice and cost complexity when applying the guidance in Topic 718 to a change to the terms and conditions of a stock-based payment award. ASU 2017-9 also provides guidance about the types of changes to the terms or conditions of a share-based payment award that require an entity to apply modification accounting in accordance with Topic 718. For all entities, including emerging growth companies, the standard is effective for annual periods beginning after December 15, 2017, and for interim periods therein. Early adoption is permitted. The Company adopted the guidance on October 1, 2017 and there was no impact on the financial statements. In July 2017, the FASB issued a two-part ASU 2017-11, I. Accounting for Certain Financial Instruments With Down Round Features and II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Non-controlling Interests with a Scope Exception ("ASU 2017-11"). ASU 2017-11 amends guidance in FASB ASC 260, Earnings Per Share, FASB ASC 480, Distinguishing Liabilities from Equity, and FASB ASC 815, Derivatives and Hedging. The amendments in Part I of ASU 2017-11 change the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features. The amendments in Part II of ASU 2017-11 re-characterize the indefinite deferral of certain provisions of Topic 480 that now are presented as pending content in the Codification, to a scope exception. Those amendments do not have an accounting effect. ASU 2017-11 is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. The Company adopted ASU 2017-11 ended October 1, 2017, and retrospectively applied ASU 2017-11 as required with no impact on its consolidated financial position or results of operations. In June 2018, the FASB issued ASU 2018-07, Improvements to Nonemployee Share-Based Payment Accounting (Topic 718). The amendments in this Update expand the scope of Topic 718 to include share based payment transactions for acquiring goods and services from nonemployees. An entity should apply the requirements of Topic 718 to nonemployee awards except for specific guidance on inputs to an option pricing model and the attribution of cost (that is, the period of time over which share-based payment awards vest and the pattern of cost recognition over that period). The amendments specify that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor's own operations by issuing share-based payment awards. The amendments also clarify that Topic 718 does not apply to share-based payments used to effectively provide (1) financing to the issuer or (2) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under Topic 606, Revenue from Contracts with Customers. The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. The Company is currently evaluating the impact of adoption of this standard to its financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Sep. 30, 2018 | |
Accounting Policies [Abstract] | ||
Schedule of expected amortization of the intangible assets | The expected amortization of the intangible assets, as of March 31, 2019, is as follows: For the year ended September 30, Intangible assets 2019 (for the remaining six months) $ 26,100 2020 29,400 2021 29,400 2022 3,500 Total $ 88,400 | The expected amortization of the intangible assets, as of September 30, 2018, for each of the next four years is as follows: For the year ended September 30, Intangible 2019 $ 54,200 2020 29,400 2021 29,400 2022 3,500 Total $ 116,500 |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 6 Months Ended |
Mar. 31, 2019 | |
Revenue Recognition [Abstract] | |
Schedulle of disaggregated revenue generated by each payor type | The following table presents disaggregated revenue for the three and six months ended March 31, 2019 and 2018: Three months ended Six months ended 2019 2018 2019 2018 Neurometric services $ 44,800 $ 79,800 $ 124,000 $ 133,100 Telepsychiatry services 415,300 380,100 723,200 448,800 Revenue 460,100 459,900 847,200 581,900 |
ACCOUNTS RECEIVABLE (Tables)
ACCOUNTS RECEIVABLE (Tables) | 6 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Sep. 30, 2018 | |
Receivables [Abstract] | ||
Schedule of accounts receivable | Accounts receivable, net, is as follows: March 31, September 30, Accounts receivable $ 162,500 $ 65,100 Allowance for doubtful accounts (8,100 ) (1,800 ) Accounts receivable, net $ 154,400 $ 63,300 | Accounts receivable, net, is as follows: September 30, September 30, 2018 2017 Accounts receivable $ 65,100 $ 7,500 Allowance for doubtful accounts (1,800 ) (1,000 ) Accounts receivable, net $ 63,300 $ 6,500 |
LONG - TERM BORROWINGS AND OT_2
LONG - TERM BORROWINGS AND OTHER NOTES PAYABLE (Tables) | 6 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of changes in carrying amounts of the debt acquired through acquisition | The changes in carrying amounts of the debt acquired through acquisition for the six months ended March 31, 2019 were as follows: Beginning balance (September 30, 2018) $ 587,700 Accretion of debt discount 18,800 Ending balance (March 31, 2019) $ 606,500 |
ACQUISITION (Tables)
ACQUISITION (Tables) | 6 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Sep. 30, 2018 | |
Business Combinations [Abstract] | ||
Schedule of consideration for arcadian services | The following table summarizes the allocation of the purchase consideration and the estimated fair value of the assets acquired and the liabilities assumed for the acquisition of Arcadian Services made by the Company: Assets acquired: Cash $ 25,900 Accounts receivable 57,100 Other assets 24,000 Intangibles 109,000 Goodwill 1,386,800 Total assets acquired $ 1,602,800 Liabilities assumed Accounts payable $ 147,700 Accrued other liabilities 108,700 Notes payable 6,800 Total liabilities assumed $ 263,200 Net assets acquired $ 1,339,600 Consideration paid: Initial investment in Arcadian Services 195,900 Long-term debt 555,000 Accrued interest 96,700 Payment on warrant outstanding 175,000 Forgiveness of loan in relation of acquisition 317,000 Total consideration $ 1,339,600 | |
Schedule of unaudited pro forma financial information | The pro forma adjustments are based upon available information and certain assumptions that the Company believes are reasonable. Pro Forma Three Months Ended Six Months Ended Revenues $ 459,900 $ 727,100 Net income (loss) (2,659,600 ) (5,605,300 ) Basic and diluted loss per share: $ (0.61 ) $ (1.29 ) Outstanding at weighted average shares outstanding 4,362,564 4,347,745 | The pro forma adjustments are based upon available information and certain assumptions that the Company believes are reasonable. Pro Forma Years Ended September 30, 2018 2017 Revenues $ 1,460,800 $ 1,154,500 Net income (loss) $ (10,558,000 ) $ (7,894,700 ) Basic and diluted loss per share: $ (2.03 ) $ (2.80 ) weighted shares outstanding: 5,199,566 2,817,415 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 6 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Sep. 30, 2018 | |
Equity [Abstract] | ||
Schedule of stock-based compensation expense | Stock-based compensation expense included in the accompanying unaudited condensed consolidated statements of operations for the six months ended March 31, 2019 and 2018 is as follows: Six months ended March 31, 2019 2018 Stock-based compensation expense - stock options Stock-based compensation expense - restricted shares Stock-based compensation expense - stock options Stock-based compensation expense restricted shares Research $ — $ — $ — $ — Product development 29,200 17,800 100 — Sales and marketing 12,000 — 100 — General and administrative 404,200 312,100 302,900 289,900 Total $ 445,400 $ 329,900 $ 303,100 $ 289,900 | Stock-based compensation expense is generally recognized over the employees' or service provider's requisite service period, generally the vesting period of the award. Stock-based compensation expense included in the accompanying statements of operations for the years ended September 30, 2018 and 2017 is as follows: September 30, 2018 2017 Stock-based compensation Expense non- Restricted Shares Stock-based compensation Expense Restricted Shares Stock-based compensation Expense non- Restricted Shares Stock-based compensation Expense Restricted Shares Research $ — $ — $ 10,900 $ — Product development 20,000 16,400 360,600 — Sales and marketing 3,400 — 175,300 — General and administrative 1,034,800 513,700 647,200 892,000 Total $ 1,058,200 $ 530,100 $ 1,194,000 $ 892,000 |
Schedule of unrecognized stock-based compensation expense | The following table sets forth the Company’s unrecognized stock-based compensation expense, net of estimated forfeitures, by type of award and the weighted-average period over which that expense is expected to be recognized: March 31, 2019 2018 Type of Award: Unrecognized Expense, net of estimated forfeitures Weighted average Recognition Period (in years) Unrecognized Expense, net of estimated forfeitures Weighted average Recognition Period (in years) Stock Options $ 329,600 1.40 $ 682,900 0.53 Restricted Stock 5,300 0.05 139,100 0.48 Total $ 334,900 1.38 $ 822,000 0.52 | Total unrecognized compensation expense was $185,537 as of September 30, 2018. The following table sets forth the Company's unrecognized stock-based compensation expense, net of estimated forfeitures, by type of award and the weighted-average period over which that expense is expected to be recognized: September 30 2018 2017 Type of Award: Unrecognized Weighted Unrecognized Weighted Stock Options $ 126,509 0.96 $ 860,915 3.54 Restricted Stock $ 59,028 0.55 $ 205,858 1.00 Total $ 185,537 0.83 $ 1,066,773 3.05 |
Schedule of stock option activity | A summary of all stock option activity is as follows: Number of Weighted Weighted- Intrinsic Outstanding at September 30, 2018 803,937 $ 10.13 8.75 $ 7,500 Granted 864,758 1.34 — Exercised — — — Forfeited or expired (38,760 ) 2.28 Outstanding at March 31, 2019 1,629,935 $ 5.65 8.89 $ 52,600 | A summary of stock option activity is as follows: Number of Weighted Weighted- Intrinsic Value Outstanding at September 30, 2016 223,120 $ 50.98 6.63 $ 819,137 Granted 334,000 4.85 — — Exercised — — — — Forfeited (3,037 ) 1,335.06 — — Outstanding at September 30, 2017 554,083 $ 16.14 6.63 $ 7,425 Granted 468,000 2.01 — — Exercised (35,000 ) 1.55 — — Forfeited or expired (183,146 ) 8.19 — — Outstanding at September 30, 2018 803,937 $ 10.13 8.75 $ 7,500 |
Schedule of options outstanding | Following is a summary of the status of options outstanding at September 30, 2018: Exercise Number Expiration Weighted Average 2012 Omnibus Incentive Compensation Plan $ 1.55 250,000 4/2028 1.55 1.99 50,000 4/2028 1.99 2.35 10,000 6/2028 2.35 2.98 10,000 5/2028 2.98 3.60 54,000 09/2027 3.60 3.74 5,000 12/2027 3.74 3.88 20,000 11/2027 3.88 3.96 35,000 11/2027 3.96 4.10 5,000 08/2027 4.10 4.16 50,000 08/2027 4.16 4.33 75,000 07/2027 4.33 5.10 7,750 04/2026 5.10 5.90 18,000 03/2027 5.90 6.00 174,000 09/2026 6.00 9.44 22,307 12/2022 – 01/2023 9.44 11.00 6,250 08/2025 11.00 50.00 9,518 03/2023 – 01/2025 50.00 52.00 625 07/2024 52.00 $ 600.00 42 03/2022 600.00 Sub-Total 802,492 Weighted Average $ 4.39 2006 Stock Incentive Plan $ 2,400.00 144 03/2019 – 07/2020 $ 2,400.00 2,820.00 51 03/2021 2,820.00 $ 3,300.00 1,250 03/2020 $ 3,300.00 Sub-Total 1,445 Weighted Average $ 3,193.37 Total 803,937 Weighted Average $ 10.13 | |
Schedule of status of restricted shares outstanding | Following is a summary of the restricted stock activity for the six months ended March 31, 2019: Number of Weighted Outstanding at September 30, 2018 406,564 $ 4.09 Granted 174,000 1.35 Forfeited — — Outstanding at March 31, 2019 580,564 $ 3.27 | Following is a summary of the status of restricted shares outstanding at September 30, 2018: Number of Weighted Amount Outstanding at September 30, 2016 143,750 $ 6.13 $ 881,250 Granted 79,000 3.83 302,650 Forfeited — — — Outstanding at September 30, 2017 222,750 $ 5.31 $ 1,183,900 Granted 183,814 2.62 480,862 Forfeited — — — Outstanding at September 30, 2018 406,564 $ 4.09 $ 1,664,762 |
Schedule of black-scholes option-pricing model assumption | The range of Black-Scholes option-pricing model assumption inputs for all the valuation dates are in the table below: Six Months Ended March 31, 2019 Low High Annual dividend yield — % — % Expected life (years) 3.0 5.0 Risk-free interest rate 2.23 % 2.90 % Expected volatility 172.89 % 200.47 % | The range of Black-Scholes option-pricing model assumption inputs for all the valuation dates are in the table below: September 30, 2017 through to September 30, 2018 Low High Annual dividend yield — % — % Expected life (years) 5 5 Risk-free interest rate 1.14 % 2.94 % Expected volatility 194.36 % 210.39 % September 30, 2016 through to September 30, 2017 Low High Annual dividend yield — % — % Expected life (years) 5 5 Risk-free interest rate 1.14 % 1.93 % Expected volatility 196.77 % 234.54 % |
Schedule of warrant activity | The warrant activity for the six months ended March 31, 2019, are described as follows: Number of Weighted Outstanding at September 30, 2018 6,075,874 $ 4.53 Expired/ Forfeited (555 ) 55.00 Outstanding at March 31, 2019 6,075,319 $ 4.52 | The warrant activity for the years ending September 30, 2018 and 2017, is described as follows: Number of Weighted Outstanding at September 30, 2016 7,160 $ 50.41 Granted 4,561,861 5.27 Exercised — — Expired (1,349 ) 185.61 Forfeited — — Outstanding at September 30, 2017 4,567,672 $ 5.30 Granted 1,509,458 2.24 Exercised — — Expired/ Forfeited (1,256 ) 48.07 Outstanding at September 30, 2018 6,075,874 $ 4.53 |
Schedule of the status of warrants outstanding | Following is a summary of the status of warrants outstanding at March 31, 2019: Exercise Number Expiration Weighted Average $ 2.00 459,458 (1) 09/2023 $ 2.00 2.34 1,050,000 (2) 03/2023 2.34 5.25 2,539,061 (3) 07/2022 5.25 5.25 1,675,000 (4) 07/2022 5.25 5.25 213,800 (5) 07/2022 5.25 6.04 134,000 (6) 07/2022 6.04 10.00 4,000 06/2021 10.00 Total 6,075,319 $ 4.52 (1) On September 21, 2018, the Company entered into definitive agreements with George C. Carpenter IV, President and former Chief Executive Officer, Robin L. Smith, Chairman, as well as John Pappajohn, and Peter Unanue, each a director of the Company, and entities affiliated with Michal Votruba, a member of the Board of Directors of MYnd Analytics and Director of Life Sciences for the European-based RSJ-Gradus fund, relating to a private placement of an aggregate of 459,458 units for $1.85 per unit, with each unit consisting of one share of Common Stock and one Common Stock Purchase Warrant to purchase one share of Common Stock for $2.00 per share. The closing price per share of the Common Stock on the Nasdaq Stock Market on September 20, 2018 was $1.72 per share. (2) On March 29, 2018, the Company sold an aggregate of 1,050,000 units for $2.00 per Unit each consisting of one share of newly-designated Series A Preferred Stock, and one warrant in a private placement to three affiliates of the Company, for gross proceeds of $2.1 million. The private placement closed on March 29, 2018. The closing price per share of the Common Stock on the Nasdaq Stock Market on March 29, 2018 was $1.19 per share. (3) On July 13, 2017, the Company declared a special dividend of warrants to purchase shares of the Company’s common stock to record holders of Common Stock as of such date. Warrants to purchase 2,539,061 shares of Common Stock were distributed pro rata to all holders of common stock on the record date. These warrants are exercisable (in accordance with their terms) to purchase one share of common stock, at an exercise price of $5.25 per share. The warrants will become exercisable commencing not less than 12 months following their July 27, 2017 distribution date and will expire five years from the date of issuance. (4) On July 19, 2017, the Company issued 1,675,000 shares of Common Stock and accompanying Warrants to purchase up to 1,675,000 shares of Common Stock in connection with an underwritten public offering. (5) On August 23, 2017, the Company issued warrants to purchase 213,800 shares of common stock to underwriters as part of the exercise of the overallotment option attributed to the July 2017 underwritten public offering. (6) As part of the underwritten public offering on July 19, 2017, the Company issued warrants to purchase 134,000 shares of common stock to the underwriters as part of the services performed by them in connection with the underwritten public offering. | Following is a summary of the status of warrants outstanding at September 30, 2018: Exercise Number of Shares Expiration Weighted Average 2.00 459,458 (1) 9/21/2028 2.00 2.34 1,050,000 (2) 03/2023 2.34 5.25 2,539,061 (3) 07/2022 5.25 5.25 1,675,000 (4) 07/2022 5.25 5.25 213,800 (5) 07/2022 5.25 6.04 134,000 (6) 07/2022 6.04 10.00 4,000 06/2021 10.00 55.00 555 06/2018 – 03/2019 55.00 Total 6,075,874 $ 4.53 (1) On September 21, 2018, the Company entered into definitive agreements with George C. Carpenter IV, President and Chief Executive Officer, Robin L. Smith, Chairman, as well as John Pappajohn, and Peter Unanue, each a director of the Company, and entities affiliated with Michal Votruba, a member of the board of directors of MYnd Analytics and Director of Life Sciences for the European-based RSJ-Gradus fund, relating to a private placement of an aggregate of 459,458 units for $1.85 per unit, with each unit consisting of one share of Common Stock and one Common Stock Purchase Warrant to purchase one share of Common Stock for $2.00 per share. The closing price per share of the Common Stock on the NASDAQ Stock Market on September 20, 2018 was $1.72 per share. (2) On March 29, 2018, the Company sold an aggregate of 1,050,000 units for $2.00 per Unit each consisting of one share of newly-designated Series A Preferred Stock, and one warrant for $2.34 per share in a private placement to three affiliates of the Company, for gross proceeds of $2.1 million. The private placement closed on March 29, 2018. The closing price per share of the Common Stock on the NASDAQ Stock Market on March 29, 2018 was $1.19 per share. (3) O (4) On July 19, 2017, the Company issued 1,675,000 shares of Common Stock and accompanying Warrants to purchase up to 1,675,000 shares of Common Stock in connection with an underwritten public offering. (5) On August 23, 2017, the Company issued 213,800 common stock warrants to underwriters as part of the overallotment attributed to the July 2017 underwritten public offering. (6) As part of the underwritten public offering on July 19, 2017, the Company issued 134,000 common stock warrants to the underwriters as part of the services performed by them in connection with the underwritten public offering. |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Income Taxes Tables Abstract | |
Schedule of reconciliation of the provision (benefit) | The following is a reconciliation of the provision (benefit) for income taxes to the amount compiled by applying the statutory federal income tax rate to profit (loss) before income taxes is as follows for the years ended September 30, 2018 and 2017. 2018 2017 Federal income tax (benefit) at statutory rates 24.25 % 34.0 % Stock-based compensation (0.22 )% (3.46 )% Rate change (81.08 )% — Change in valuation allowance 58.95 % (29.29 )% True-ups and other adjustments (0.09 )% (1.27 )% State tax benefit (1.82 )% (0.02 )% Total (0.02 )% (0.04 )% |
Schedule of provision (benefit) for income taxes | The provision for income taxes consisted of the following for the years ended September 30, 2018 and 2017: 2018 2017 Current: Federal: $ — $ — State: 1,900 2,600 Deferred: Federal: 129,700 2,082,900 State: (246,500 ) (840,600 ) Change in valuation allowance (116,800 ) (1,242,300 ) Total 1,900 2,600 2018 2017 Current: Federal: $ — $ — State: 1,900 2,600 Total current 1,900 2,600 Deferred: Federal: (5,819,600 ) 2,082,900 State: (246,500 ) (840,600 ) Total deferred (6,066,100 ) 1,242,300 Change in valuation allowance 6,066,100 (1,242,300 ) Total $ 1,900 $ 2,600 |
Schedule of deferred taxes | Temporary differences between the financial statement carrying amounts and bases of assets and liabilities that give rise to significant portions of deferred taxes relate to the following at September 30, 2018 and 2017: 2018 2017 Deferred income tax assets: Net operating loss carryforward $ 13,921,773 $ 19,024,793 Deferred interest, consulting and compensation liabilities 2,850,840 3,850,567 Deferred income tax assets – other 155,517 118,793 16,928,130 22,994,153 Deferred income tax liabilities—other — — Deferred income tax asset—net before valuation allowance 16,928,130 22,994,153 Valuation allowance (16,928,130 ) (22,994,153 ) Deferred income tax asset—net $ — $ — |
LOSS PER SHARE (Tables)
LOSS PER SHARE (Tables) | 6 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Sep. 30, 2018 | |
Earnings Per Share [Abstract] | ||
Schedule of earnings per share | A summary of the net income (loss) and shares used to compute net income (loss) per share for the three and six months ended March 31, 2019 and 2018 is as follows: Three Months Ended Six Months Ended 2019 2018 2019 2018 Net loss for computation of basic and diluted net loss per share: Net Loss attributable to MYnd Analytics, Inc. $ (2,258,600 ) $ (2,587,300 ) $ (4,636,100 ) $ (5,356,700 ) Preferred stock dividends (24,600 ) — (49,200 ) — $ (2,283,200 ) $ (2,587,300 ) $ (4,685,300 ) $ (5,356,700 ) Basic and diluted net loss per share: Basic and diluted net loss per share $ (0.27 ) $ (0.59 ) $ (0.59 ) $ (1.23 ) Basic and diluted weighted average shares outstanding 8,399,443 4,362,564 7,964,021 4,347,745 Anti-dilutive common equivalent shares not included in the computation of dilutive net loss per share: Warrants 6,075,319 5,617,481 6,075,319 5,617,481 Restricted common stock 13,095 42,416 13,095 42,416 Options 1,629,935 554,059 1,629,935 554,059 Total 7,718,349 6,213,956 7,718,349 6,213,956 | A summary of the net income (loss) and shares used to compute net income (loss) per share for the fiscal years ended September 30, 2018 and 2017 is as follows: 2018 2017 Net Loss for computation of basic and diluted net loss per share: Net loss attributable to MYnd Analytics, Inc. $ (9,598,700 ) $ (7,112,800 ) Preferred stock dividends (49,200 ) — $ (9,647,900 ) $ (7,112,800 ) Basic and Diluted net loss per share: Basic net loss per share $ (1.86 ) $ (2.52 ) Basic and Diluted weighted average shares outstanding 5,199,566 2,817,415 Anti-dilutive common equivalent shares not included in the computation of dilutive net loss per share: Warrants 6,075,874 957,198 Restricted common stock 406,564 4,500 Options 803,937 359,704 |
COMMITMENTS AND CONTINGENT LI_2
COMMITMENTS AND CONTINGENT LIABILITIES (Tables) | 6 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Schedule of future minimum lease payments under non-cancelate operating lease | Minimum future lease payments under these leases are as follows: Payments due by period Contractual Obligations Total 2019 2020 Operating Lease Obligations $ 177,300 $ 129,800 $ 47,500 Total $ 177,300 $ 129,800 $ 47,500 | Payments due by fiscal year Contractual Obligations 2019 2020 Total Operating Lease Obligations $ 114,000 $ 48,800 $ 162,800 Total $ 114,000 $ 48,800 $ 162,800 |
ORGANIZATION, NATURE OF OPERA_2
ORGANIZATION, NATURE OF OPERATIONS AND GOING CONCERN UNCERTAINTY (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||
Net loss | $ (2,258,600) | $ (2,587,300) | $ (4,636,100) | $ (5,356,700) | $ (9,598,700) | $ (7,112,800) | |
Net cash in operating activities | (3,836,100) | (4,740,300) | (9,038,680) | (4,792,100) | |||
Accumulated deficit | (89,881,400) | (89,881,400) | (85,245,300) | (75,646,600) | |||
Cash and cash equivalents | 1,203,200 | $ 2,412,200 | 1,203,200 | $ 2,412,200 | $ 3,254,700 | $ 5,449,000 | $ 318,200 |
Line of credit | $ 6,300,000 | $ 6,300,000 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | Mar. 31, 2019 | Sep. 30, 2018 |
Intangible assets | ||
2019 (for the remaining six months) | $ 26,100 | $ 54,200 |
2020 | 29,400 | 29,400 |
2021 | 29,400 | 29,400 |
2022 | 3,500 | 3,500 |
Total | $ 88,400 | $ 116,500 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) | Dec. 22, 2017 | Dec. 31, 2017 | Jun. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 |
Summary Of Significant Accounting Policies | |||||
Previous corporate tax | 35.00% | ||||
Current corporate tax | 21.00% | 34.00% | 21.00% | 24.25% | 34.00% |
Percentage of limitation of the tax deduction for interest expense | 30.00% | ||||
Percent of current-year taxable income | 80.00% |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative 1) - USD ($) | Nov. 13, 2017 | Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Feb. 06, 2018 |
Cash, FDIC insured amount | $ 1,100,000 | $ 1,100,000 | $ 3,000,000 | |||||
Allowance for doubtful accounts | 8,100 | 8,100 | 1,800 | $ 1,000 | ||||
Depreciation and amortization | 60,300 | $ 57,500 | 117,900 | 48,700 | ||||
Deferred revenue | 152,100 | 152,100 | 159,700 | 45,900 | ||||
Advertising expense | 4,800 | $ 97,500 | 4,800 | 248,500 | 248,600 | 152,000 | ||
Amortization expense | 14,000 | 13,800 | 28,000 | 24,700 | ||||
Accumulated amortization of intangible assets | 122,300 | 94,200 | 122,300 | 94,200 | ||||
Goodwill | 1,386,800 | 1,386,800 | 1,386,800 | |||||
Net income attributable to noncontrolling interests | 451,100 | 72,300 | 778,000 | 72,300 | 734,400 | 0 | ||
Net operating loss carryforwards | 33,800,000 | |||||||
Federal net operating loss carryforwards | 60,200,000 | |||||||
Research Study Funding Agreement [Member] | Horizon Healthcare Services, Inc [Member] | ||||||||
Deferred revenue | $ 125,000 | |||||||
Research Study Funding Agreement [Member] | Cota, Inc [Member] | ||||||||
Deferred revenue | $ 15,000 | |||||||
Furniture and Equipment [Member] | ||||||||
Depreciation and amortization | 16,100 | 15,600 | 32,300 | 28,000 | $ 60,300 | $ 19,700 | ||
Accumulated depreciation and amortization | $ 181,500 | $ 149,200 | $ 181,500 | $ 149,200 | ||||
Furniture and Equipment [Member] | Maximum [Member] | ||||||||
Useful life | 5 years | |||||||
Furniture and Equipment [Member] | Minimum [Member] | ||||||||
Useful life | 3 years | |||||||
Computer Software development [Member] | ||||||||
Intangible asset, useful life | 3 years | |||||||
Capitalized software development costs | $ 101,700 | |||||||
Amortization expense | 29,000 | $ 29,000 | ||||||
Arcadian Telepsychiatry Services LLC [Member] | ||||||||
Goodwill | $ 1,386,800 | |||||||
Intellectual Property [Member] | ||||||||
Accumulated depreciation and amortization | 70,400 | 39,300 | ||||||
Intellectual Property [Member] | Arcadian Telepsychiatry Services LLC [Member] | ||||||||
Intangible asset, useful life | 4 years | |||||||
Accumulated depreciation and amortization | 23,800 | 0 | ||||||
Acquired intellectual property | $ 109,000 | |||||||
Amortization expense | $ 23,800 |
REVENUE RECOGNITION (Details)
REVENUE RECOGNITION (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenue | $ 460,100 | $ 459,900 | $ 847,200 | $ 581,900 | $ 1,315,500 | $ 128,500 |
Neurometric Services [Member] | ||||||
Revenue | 44,800 | 79,800 | 124,000 | 133,100 | 263,700 | 128,500 |
Telepsychiatry Services [Member] | ||||||
Revenue | $ 415,300 | $ 380,100 | $ 723,200 | $ 448,800 | $ 1,051,800 |
REVENUE RECOGNITION (Details Na
REVENUE RECOGNITION (Details Narrative) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenue Recognition [Abstract] | ||||
Accounts receivable, net | $ 154,400 | $ 63,300 | $ 6,500 | |
Deferred revenue | 152,100 | 159,700 | 45,900 | |
Recorded deferred revenue | $ (7,600) | $ 125,000 | $ 113,800 |
ACCOUNTS RECEIVABLE, NET (Detai
ACCOUNTS RECEIVABLE, NET (Details) - USD ($) | Mar. 31, 2019 | Sep. 30, 2018 | Sep. 30, 2017 |
Receivables [Abstract] | |||
Accounts receivable | $ 162,500 | $ 65,100 | $ 7,500 |
Allowance for doubtful accounts | (8,100) | (1,800) | (1,000) |
Accounts receivable, net | $ 154,400 | $ 63,300 | $ 6,500 |
LONG - TERM BORROWINGS AND OT_3
LONG - TERM BORROWINGS AND OTHER NOTES PAYABLE (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | |
Debt Disclosure [Abstract] | ||||||
Beginning balance (September 30, 2018) | $ 587,700 | |||||
Accretion of debt discount | $ 9,400 | $ 9,400 | 46,700 | $ 35,500 | 82,300 | |
Ending balance (March 31, 2019) | $ 606,500 | $ 606,500 | $ 587,700 |
LONG - TERM BORROWINGS AND OT_4
LONG - TERM BORROWINGS AND OTHER NOTE PAYABLES (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | |
Debt outstanding | $ 700,000 | $ 700,000 | $ 700,000 | |||
Debt maturity date | Sep. 30, 2021 | Sep. 30, 2021 | ||||
Debt discount | $ 93,500 | $ 93,500 | $ 112,300 | |||
Accrude rate of interest | 8.00% | 8.00% | 8.00% | |||
Debt balloon payment amount | $ 700,000 | |||||
Accrued interest on debt | $ 120,500 | $ 120,500 | 110,100 | |||
Accretion of debt discount expenses | $ 9,400 | $ 9,400 | $ 46,700 | $ 35,500 | 82,300 | |
6% Loan Payable [Member] | ||||||
Principal payments | $ 5,000 | |||||
19% Note Payable - Finance Company [Member] | ||||||
Description of debt payment terms | Over thirty-six equal payments of $1,200 through May 8, 2018. | |||||
Description of frequency of periodic payment | Monthly | |||||
Principal payments | $ 1,200 |
ACQUISITION (Details)
ACQUISITION (Details) - USD ($) | Mar. 31, 2019 | Sep. 30, 2018 | Nov. 13, 2017 | Sep. 30, 2017 |
Assets acquired: | ||||
Goodwill | $ 1,386,800 | $ 1,386,800 | ||
Consideration paid: | ||||
Initial investment in Arcadian Services | $ 195,900 | |||
Arcadian Telepsychiatry Services LLC [Member] | ||||
Assets acquired: | ||||
Cash | $ 25,900 | |||
Accounts receivable | 57,100 | |||
Other assets | 24,000 | |||
Intangibles | 109,000 | |||
Goodwill | 1,386,800 | |||
Total assets acquired | 1,602,800 | |||
Liabilities assumed | ||||
Accounts payable | 147,700 | |||
Accrued other liabilities | 108,700 | |||
Notes payable | 6,800 | |||
Total liabilities assumed | 263,200 | |||
Net assets acquired | 1,339,600 | |||
Consideration paid: | ||||
Initial investment in Arcadian Services | 195,900 | |||
Long-term debt | 555,000 | |||
Accrued interest | 96,700 | |||
Payment on warrant outstanding | 175,000 | |||
Forgiveness of loan in relation of acquisition | 317,000 | |||
Total consideration | $ 1,339,600 |
ACQUISITION (Details 1)
ACQUISITION (Details 1) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Business Combinations [Abstract] | ||||
Revenues | $ 459,900 | $ 727,100 | $ 1,460,800 | $ 1,154,500 |
Net income (loss) | $ (2,659,600) | $ (5,605,300) | $ (10,558,000) | $ (7,894,700) |
Basic and diluted loss per share: (in dollars per share) | $ (0.61) | $ (1.29) | $ (2.03) | $ (2.80) |
Weighted shares outstanding (in shares) | 4,362,564 | 4,347,745 | 5,199,566 | 2,817,415 |
ACQUISITION (Details Narrative)
ACQUISITION (Details Narrative) - USD ($) | Nov. 13, 2017 | Mar. 31, 2019 | Sep. 30, 2018 | Sep. 30, 2017 |
Goodwill | $ 1,386,800 | $ 1,386,800 | ||
Previous investment in Arcadian Services | $ 195,900 | |||
Accrude rate of interest | 8.00% | 8.00% | ||
Debt maturity date | Sep. 30, 2021 | Sep. 30, 2021 | ||
Arcadian Telepsychiatry Services LLC [Member] | ||||
Intangible asset, useful life | 3 years 10 months 24 days | |||
Goodwill | $ 1,386,800 | |||
Transaction costs | $ 438,600 | |||
Previous investment in Arcadian Services | 195,900 | |||
Forgiveness of loan in relation of acquisition | 317,000 | |||
Long-term debt | 555,000 | |||
Accrued interest | 96,700 | |||
Payment on warrant outstanding | 175,000 | |||
Indebtedness and payables | $ 1,339,600 | |||
Accrude rate of interest | 8.00% | |||
Debt maturity date | Sep. 30, 2021 | |||
Arcadian Telepsychiatry Services LLC [Member] | Customer Relationships [Member] | ||||
Intangible asset, useful life | 4 years | |||
Arcadian Telepsychiatry Services LLC [Member] | Trade Names [Member] | ||||
Intangible asset, useful life | 1 year | |||
Minimum [Member] | Arcadian Telepsychiatry Services LLC [Member] | ||||
Intangible asset, estimated useful life | 1 year | |||
Maximum [Member] | Arcadian Telepsychiatry Services LLC [Member] | ||||
Intangible asset, estimated useful life | 4 years |
REVERSE MERGER (Details Narrati
REVERSE MERGER (Details Narrative) - USD ($) | Jan. 04, 2019 | Mar. 31, 2019 | Mar. 31, 2018 | Sep. 30, 2018 | Sep. 30, 2017 |
Number of shares issued | 463,636 | ||||
Shares issued price per share (in dollars per share) | $ 1.10 | $ 5.90 | |||
Proceeds from issuance of stock | $ 1,811,800 | $ 2,100,000 | $ 930,435 | $ 2,981,300 | |
Agreement And Plan Of Merger [Member] | |||||
Percentage of securityholders collectively own on a fully diluted basis | 5.90% | ||||
Termination right term | Upon certain terminations of the Merger Agreement, MYnd may be required to pay Emmaus a termination fee of $750,000 and Emmaus may be required to pay MYnd a termination fee of $750,000; provided that if the termination results from the failure to obtain the approval of the continued listing of the post-merger company’s common stock on the NasdaqCM, this fee payable by Emmaus will be $1,600,000. | ||||
Third party expenses pay to other party | $ 600,000 | ||||
Agreement And Plan Of Merger [Member] | Emmaus Life Sciences, Inc. [Member] | |||||
Percentage of securityholders collectively own on a fully diluted basis | 94.10% | ||||
Percentage of share issued with debt conversion | 5.90% |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | |
Total | $ 1,058,200 | $ 1,194,000 | ||
Stock Option [Member] | ||||
Total | $ 445,400 | $ 303,100 | ||
General and Administrative [Member] | ||||
Total | 1,034,800 | 647,200 | ||
General and Administrative [Member] | Stock Option [Member] | ||||
Total | 404,200 | 302,900 | ||
Sales and Marketing [Member] | ||||
Total | 3,400 | 175,300 | ||
Sales and Marketing [Member] | Stock Option [Member] | ||||
Total | 12,000 | 100 | ||
Product Development [Member] | ||||
Total | 20,000 | 360,600 | ||
Product Development [Member] | Stock Option [Member] | ||||
Total | 29,200 | 100 | ||
Research [Member] | ||||
Total | 10,900 | |||
Research [Member] | Stock Option [Member] | ||||
Total | ||||
Restricted Stock [Member] | ||||
Total | 329,900 | 289,900 | 530,100 | 892,000 |
Restricted Stock [Member] | General and Administrative [Member] | ||||
Total | 312,100 | 289,900 | 513,700 | 892,000 |
Restricted Stock [Member] | Sales and Marketing [Member] | ||||
Total | ||||
Restricted Stock [Member] | Product Development [Member] | ||||
Total | 17,800 | 16,400 | ||
Restricted Stock [Member] | Research [Member] | ||||
Total |
STOCKHOLDERS' EQUITY (Details 1
STOCKHOLDERS' EQUITY (Details 1) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | |
Unrecognized Expense | $ 334,900 | $ 822,000 | $ 185,537 | $ 1,066,773 |
Weighted average Recognition Period | 1 year 4 months 17 days | 6 months 7 days | 9 months 29 days | 3 years 1 month 18 days |
Restricted Stock [Member] | ||||
Unrecognized Expense | $ 5,300 | $ 139,100 | $ 59,028 | $ 205,858 |
Weighted average Recognition Period | 18 days | 5 months 23 days | 6 months 18 days | 1 year |
Stock Options [Member] | ||||
Unrecognized Expense | $ 329,600 | $ 682,900 | $ 126,509 | $ 860,915 |
Weighted average Recognition Period | 1 year 4 months 24 days | 6 months 10 days | 11 months 16 days | 3 years 6 months 14 days |
STOCKHOLDERS' EQUITY (Details 2
STOCKHOLDERS' EQUITY (Details 2) - USD ($) | 6 Months Ended | 12 Months Ended | |
Mar. 31, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
Outstanding, beginning | 803,937 | 554,083 | 223,120 |
Granted | 864,758 | 468,000 | 334,000 |
Exercised | (35,000) | ||
Forfeited | (38,760) | (183,146) | (3,037) |
Outstanding, ending | 1,629,935 | 803,937 | 554,083 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | |||
Outstanding, beginning | $ 10.13 | $ 16.14 | $ 50.98 |
Granted | 1.34 | 2.01 | 4.85 |
Exercised | 1.55 | ||
Forfeited | 2.28 | 8.19 | 1,335.06 |
Outstanding, ending | $ 5.65 | $ 10.13 | $ 16.14 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term [Roll Forward] | |||
Outstanding, beginning | 8 years 9 months | 6 years 7 months 17 days | 6 years 7 months 17 days |
Outstanding, ending | 8 years 10 months 21 days | 8 years 9 months | 6 years 7 months 17 days |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value [Roll Forward] | |||
Outstanding, beginning | $ 7,500 | $ 7,425 | $ 819,137 |
Outstanding, ending | $ 52,600 | $ 7,500 | $ 7,425 |
STOCKHOLDERS' EQUITY (Details 3
STOCKHOLDERS' EQUITY (Details 3) - $ / shares | 12 Months Ended | ||||
Sep. 30, 2018 | Mar. 31, 2019 | Sep. 30, 2017 | Sep. 30, 2016 | Aug. 03, 2006 | |
Exercise Price | $ 10.13 | $ 5.65 | $ 16.14 | $ 50.98 | |
Number of Shares | 803,937 | ||||
Weighted Average Exercise Price | $ 10.13 | ||||
Omnibus Incentive Compensation Plan 2012 [Member] | |||||
Number of Shares | 802,492 | ||||
Weighted Average Exercise Price | $ 4.39 | ||||
Omnibus Incentive Compensation Plan 2012 [Member] | $1.55 [Member] | |||||
Exercise Price | $ 1.55 | ||||
Number of Shares | 250,000 | ||||
Expiration Date | 2028-04 | ||||
Weighted Average Exercise Price | $ 1.55 | ||||
Omnibus Incentive Compensation Plan 2012 [Member] | $1.99 [Member] | |||||
Exercise Price | $ 1.99 | ||||
Number of Shares | 50,000 | ||||
Expiration Date | 2028-04 | ||||
Weighted Average Exercise Price | $ 1.99 | ||||
Omnibus Incentive Compensation Plan 2012 [Member] | $2.35 [Member] | |||||
Exercise Price | $ 2.35 | ||||
Number of Shares | 10,000 | ||||
Expiration Date | 2028-06 | ||||
Weighted Average Exercise Price | $ 2.35 | ||||
Omnibus Incentive Compensation Plan 2012 [Member] | $2.98 [Member] | |||||
Exercise Price | $ 2.98 | ||||
Number of Shares | 10,000 | ||||
Expiration Date | 2028-05 | ||||
Weighted Average Exercise Price | $ 2.98 | ||||
Omnibus Incentive Compensation Plan 2012 [Member] | $3.60 [Member] | |||||
Exercise Price | $ 3.60 | ||||
Number of Shares | 54,000 | ||||
Expiration Date | 2027-09 | ||||
Weighted Average Exercise Price | $ 3.60 | ||||
Omnibus Incentive Compensation Plan 2012 [Member] | $3.74 [Member] | |||||
Exercise Price | $ 3.74 | ||||
Number of Shares | 5,000 | ||||
Expiration Date | 2027-12 | ||||
Weighted Average Exercise Price | $ 3.74 | ||||
Omnibus Incentive Compensation Plan 2012 [Member] | $3.88 [Member] | |||||
Exercise Price | $ 3.88 | ||||
Number of Shares | 20,000 | ||||
Expiration Date | 2027-11 | ||||
Weighted Average Exercise Price | $ 3.88 | ||||
Omnibus Incentive Compensation Plan 2012 [Member] | $3.96 [Member] | |||||
Exercise Price | $ 3.96 | ||||
Number of Shares | 35,000 | ||||
Expiration Date | 2027-11 | ||||
Weighted Average Exercise Price | $ 3.96 | ||||
Omnibus Incentive Compensation Plan 2012 [Member] | $4.10 [Member] | |||||
Exercise Price | $ 4.10 | ||||
Number of Shares | 5,000 | ||||
Expiration Date | 2027-08 | ||||
Weighted Average Exercise Price | $ 4.10 | ||||
Omnibus Incentive Compensation Plan 2012 [Member] | $4.16 [Member] | |||||
Exercise Price | $ 4.16 | ||||
Number of Shares | 50,000 | ||||
Expiration Date | 2027-08 | ||||
Weighted Average Exercise Price | $ 4.16 | ||||
Omnibus Incentive Compensation Plan 2012 [Member] | $4.33 [Member] | |||||
Exercise Price | $ 4.33 | ||||
Number of Shares | 75,000 | ||||
Expiration Date | 2027-07 | ||||
Weighted Average Exercise Price | $ 4.33 | ||||
Omnibus Incentive Compensation Plan 2012 [Member] | $5.10 [Member] | |||||
Exercise Price | $ 5.10 | ||||
Number of Shares | 7,750 | ||||
Expiration Date | 2026-04 | ||||
Weighted Average Exercise Price | $ 5.10 | ||||
Omnibus Incentive Compensation Plan 2012 [Member] | $5.90 [Member] | |||||
Exercise Price | $ 5.90 | ||||
Number of Shares | 18,000 | ||||
Expiration Date | 2027-03 | ||||
Weighted Average Exercise Price | $ 5.90 | ||||
Omnibus Incentive Compensation Plan 2012 [Member] | $6.00 [Member] | |||||
Exercise Price | $ 6 | ||||
Number of Shares | 174,000 | ||||
Expiration Date | 2026-09 | ||||
Weighted Average Exercise Price | $ 6 | ||||
Omnibus Incentive Compensation Plan 2012 [Member] | $9.44 [Member] | |||||
Exercise Price | $ 9.44 | ||||
Number of Shares | 22,307 | ||||
Weighted Average Exercise Price | $ 9.44 | ||||
Omnibus Incentive Compensation Plan 2012 [Member] | $11.00 [Member] | |||||
Exercise Price | $ 11 | ||||
Number of Shares | 6,250 | ||||
Expiration Date | 2025-08 | ||||
Weighted Average Exercise Price | $ 11 | ||||
Omnibus Incentive Compensation Plan 2012 [Member] | $50.00 [Member] | |||||
Exercise Price | $ 50 | ||||
Number of Shares | 9,518 | ||||
Weighted Average Exercise Price | $ 50 | ||||
Omnibus Incentive Compensation Plan 2012 [Member] | $52.00 [Member] | |||||
Exercise Price | $ 52 | ||||
Number of Shares | 625 | ||||
Expiration Date | 2024-07 | ||||
Weighted Average Exercise Price | $ 52 | ||||
Omnibus Incentive Compensation Plan 2012 [Member] | $600.00 [Member] | |||||
Exercise Price | $ 600 | ||||
Number of Shares | 42 | ||||
Expiration Date | 2022-03 | ||||
Weighted Average Exercise Price | $ 600 | ||||
2006 Stock Incentive Plan [Member] | |||||
Number of Shares | 1,445 | ||||
Weighted Average Exercise Price | $ 3,193.37 | ||||
2006 Stock Incentive Plan [Member] | $2400.00 [Member] | |||||
Exercise Price | $ 2,400 | ||||
Number of Shares | 144 | ||||
Weighted Average Exercise Price | $ 2,400 | ||||
2006 Stock Incentive Plan [Member] | $2820.00 [Member] | |||||
Exercise Price | $ 2,820 | ||||
Number of Shares | 51 | ||||
Expiration Date | 2021-03 | ||||
Weighted Average Exercise Price | $ 2,820 | ||||
2006 Stock Incentive Plan [Member] | $3300.00 [Member] | |||||
Exercise Price | $ 3,300 | ||||
Number of Shares | 1,250 | ||||
Expiration Date | 2020-03 | ||||
Weighted Average Exercise Price | $ 3,300 | ||||
Minimum [Member] | Omnibus Incentive Compensation Plan 2012 [Member] | |||||
Exercise Price | $ 1.55 | 1.20 | |||
Minimum [Member] | Omnibus Incentive Compensation Plan 2012 [Member] | $9.44 [Member] | |||||
Expiration Date | 2022-12 | ||||
Minimum [Member] | Omnibus Incentive Compensation Plan 2012 [Member] | $50.00 [Member] | |||||
Expiration Date | 2023-03 | ||||
Minimum [Member] | 2006 Stock Incentive Plan [Member] | |||||
Exercise Price | $ 2,400 | ||||
Minimum [Member] | 2006 Stock Incentive Plan [Member] | $2400.00 [Member] | |||||
Expiration Date | 2019-03 | ||||
Maximum [Member] | Omnibus Incentive Compensation Plan 2012 [Member] | |||||
Exercise Price | $ 600 | $ 600 | |||
Maximum [Member] | Omnibus Incentive Compensation Plan 2012 [Member] | $9.44 [Member] | |||||
Expiration Date | 2023-01 | ||||
Maximum [Member] | Omnibus Incentive Compensation Plan 2012 [Member] | $50.00 [Member] | |||||
Expiration Date | 2025-01 | ||||
Maximum [Member] | 2006 Stock Incentive Plan [Member] | |||||
Exercise Price | $ 3,300 | ||||
Maximum [Member] | 2006 Stock Incentive Plan [Member] | $2400.00 [Member] | |||||
Expiration Date | 2020-07 |
STOCKHOLDERS' EQUITY (Details 4
STOCKHOLDERS' EQUITY (Details 4) - Restricted Stock [Member] - USD ($) | 6 Months Ended | 12 Months Ended | |
Mar. 31, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Outstanding, beginning | 406,564 | 222,750 | 143,750 |
Granted | 174,000 | 183,814 | 79,000 |
Forfeited | |||
Outstanding, ending | 580,564 | 406,564 | 222,750 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | |||
Outstanding, beginning | $ 4.09 | $ 5.31 | $ 6.13 |
Granted | 1.35 | 2.62 | 3.83 |
Forfeited | |||
Outstanding, ending | $ 3.27 | $ 4.09 | $ 5.31 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value [Roll Forward] | |||
Outstanding, beginning | $ 1,664,762 | $ 1,183,900 | $ 881,250 |
Granted | 480,862 | 302,650 | |
Forfeited | |||
Outstanding, ending | $ 1,664,762 | $ 1,183,900 |
STOCKHOLDERS' EQUITY (Details 5
STOCKHOLDERS' EQUITY (Details 5) | 6 Months Ended | 12 Months Ended | |
Mar. 31, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Maximum [Member] | |||
Annual dividend yield | 0.00% | 0.00% | 0.00% |
Expected life | 5 years | 5 years | 5 years |
Risk-free interest rate | 2.90% | 2.94% | 1.93% |
Expected volatility | 200.47% | 210.39% | 234.54% |
Minimum [Member] | |||
Annual dividend yield | 0.00% | 0.00% | 0.00% |
Expected life | 3 years | 5 years | 5 years |
Risk-free interest rate | 2.23% | 1.14% | 1.14% |
Expected volatility | 172.89% | 194.36% | 196.77% |
STOCKHOLDERS' EQUITY (Details 6
STOCKHOLDERS' EQUITY (Details 6) - Warrant [Member] - $ / shares | 6 Months Ended | 12 Months Ended | |
Mar. 31, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Outstanding, beginning | 6,075,874 | 4,567,672 | 7,160 |
Granted | 1,509,458 | 4,561,861 | |
Exercised | |||
Expired | (1,256) | (1,349) | |
Forfeited | |||
Expired/ Forfeited | (555) | ||
Outstanding, ending | 6,075,874 | 6,075,874 | 4,567,672 |
Share Based Compensation Arrangement By Share Based Payment Award Other Than Options Outstanding Weighted Average Exercise Price [Roll Forward] | |||
Outstanding, beginning | $ 4.53 | $ 5.30 | $ 50.41 |
Granted | 2.24 | 5.27 | |
Exercised | |||
Expired | 48.07 | 185.61 | |
Forfeited | |||
Outstanding, ending | $ 4.52 | $ 4.53 | $ 5.30 |
STOCKHOLDERS' EQUITY (Details 7
STOCKHOLDERS' EQUITY (Details 7) - $ / shares | 6 Months Ended | 12 Months Ended | |||
Mar. 31, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | ||
Warrant Eight [Member] | |||||
Exercise Price | $ 55 | ||||
Number of Shares | 555 | ||||
Weighted Average Exercise Price | $ 55 | ||||
Warrant [Member] | |||||
Number of Shares | 6,075,874 | 6,075,874 | 4,567,672 | 7,160 | |
Weighted Average Exercise Price | $ 4.52 | $ 4.53 | $ 5.30 | $ 50.41 | |
Warrant One [Member] | |||||
Exercise Price | $ 2 | ||||
Number of Shares | [1] | 459,458 | |||
Expiration Date | 2028-09 | ||||
Weighted Average Exercise Price | $ 2 | ||||
Warrant Two [Member] | |||||
Exercise Price | $ 2.34 | ||||
Number of Shares | [2] | 1,050,000 | |||
Expiration Date | 2023-03 | ||||
Weighted Average Exercise Price | $ 2.34 | ||||
Warrant Three [Member] | |||||
Exercise Price | $ 5.25 | ||||
Number of Shares | [3] | 2,539,061 | |||
Expiration Date | 2022-07 | ||||
Weighted Average Exercise Price | $ 5.25 | ||||
Warrant Four [Member] | |||||
Exercise Price | $ 5.25 | ||||
Number of Shares | [4] | 1,675,000 | |||
Expiration Date | 2022-07 | ||||
Weighted Average Exercise Price | $ 5.25 | ||||
Warrant Five [Member] | |||||
Exercise Price | $ 5.25 | ||||
Number of Shares | [5] | 213,800 | |||
Expiration Date | 2022-07 | ||||
Weighted Average Exercise Price | $ 5.25 | ||||
Warrant Six [Member] | |||||
Exercise Price | $ 6.04 | ||||
Number of Shares | [6] | 134,000 | |||
Expiration Date | 2022-07 | ||||
Weighted Average Exercise Price | $ 6.04 | ||||
Warrant Seven [Member] | |||||
Exercise Price | $ 10 | ||||
Number of Shares | 4,000 | ||||
Expiration Date | 2021-06 | ||||
Weighted Average Exercise Price | $ 10 | ||||
Minimum [Member] | Warrant Eight [Member] | |||||
Expiration Date | 2018-06 | ||||
Maximum [Member] | Warrant Eight [Member] | |||||
Expiration Date | 2019-03 | ||||
[1] | On September 21, 2018, the Company entered into definitive agreements with George C. Carpenter IV, President and Chief Executive Officer, Robin L. Smith, Chairman, as well as John Pappajohn, and Peter Unanue, each a director of the Company, and entities affiliated with Michal Votruba, a member of the Board of Directors of MYnd Analytics and Director of Life Sciences for the European-based RSJ-Gradus fund, relating to a private placement of an aggregate of 459,458 units for $1.85 per unit, with each unit consisting of one share of Common Stock and one Common Stock Purchase Warrant to purchase one share of Common Stock for $2.00 per share. The closing price per share of the Common Stock on the Nasdaq Stock Market on September 20, 2018 was $1.72 per share. | ||||
[2] | On March 29, 2018, the Company sold an aggregate of 1,050,000 units for $2.00 per Unit each consisting of one share of newly-designated Series A Preferred Stock, and one warrant for $2.34 per share in a private placement to three affiliates of the Company, for gross proceeds of $2.1 million. The private placement closed on March 29, 2018. The closing price per share of the Common Stock on the Nasdaq Stock Market on March 29, 2018 was $1.19 per share. | ||||
[3] | On July 13, 2017, the Company declared a special dividend of warrants to purchase shares of the Company's common stock to record holders of Common Stock as of such date. Warrants to purchase 2,539,061 shares of Common Stock were distributed pro rata to all holders of common stock on the record date. These warrants will be exercisable (in accordance with their terms) to purchase one share of common stock, at an exercise price of $5.25 per share. The warrants will become exercisable commencing not less than 12 months following their July 27, 2017 distribution date and will expire five years thereafter. | ||||
[4] | On July 19, 2017, the Company issued 1,675,000 shares of Common Stock and accompanying Warrants to purchase up to 1,675,000 shares of Common Stock in connection with an underwritten public offering. | ||||
[5] | On August 23, 2017, the Company issued 213,800 common stock warrants to underwriters as part of the overallotment attributed to the July 2017 underwritten public offering. | ||||
[6] | As part of the underwritten public offering on July 19, 2017, the Company issued 134,000 common stock warrants to the underwriters as part of the services performed by them in connection with the underwritten public offering. |
STOCKHOLDERS' EQUITY (Details N
STOCKHOLDERS' EQUITY (Details Narrative) - USD ($) | Dec. 12, 2018 | Nov. 26, 2018 | Sep. 21, 2018 | May 15, 2018 | Apr. 24, 2018 | Apr. 19, 2018 | Apr. 04, 2018 | Apr. 02, 2018 | Mar. 29, 2018 | Sep. 07, 2017 | Aug. 24, 2017 | Jul. 19, 2017 | Jul. 14, 2017 | Jul. 13, 2017 | Dec. 06, 2016 | Sep. 22, 2016 | Jul. 31, 2017 | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Aug. 21, 2017 | Sep. 30, 2016 | Apr. 05, 2016 | Mar. 26, 2013 | Dec. 10, 2012 | Mar. 22, 2012 | Aug. 03, 2006 |
Number of common stock issued | 463,636 | ||||||||||||||||||||||||||||||
Total number of share authorized | 265,000,000 | 265,000,000 | |||||||||||||||||||||||||||||
Common stock authorized | 250,000,000 | 250,000,000 | 250,000,000 | 500,000,000 | |||||||||||||||||||||||||||
Preferred stock authorized | 15,000,000 | 15,000,000 | 15,000,000 | 15,000,000 | |||||||||||||||||||||||||||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||||||||||||||||||||
Common stock outstanding | 8,936,695 | 8,936,695 | 7,407,254 | 4,299,311 | |||||||||||||||||||||||||||
Number of options outstanding | 1,629,935 | 1,629,935 | 803,937 | 554,083 | 223,120 | ||||||||||||||||||||||||||
Common stock exercise price (in dollars per share) | $ 5.65 | $ 5.65 | $ 10.13 | $ 16.14 | $ 50.98 | ||||||||||||||||||||||||||
Number of stock options granted | 864,758 | 468,000 | 334,000 | ||||||||||||||||||||||||||||
Total unrecognized stock-based compensation | $ 334,900 | $ 822,000 | $ 334,900 | $ 822,000 | $ 185,537 | $ 1,066,773 | |||||||||||||||||||||||||
Number of vested shares | 825,100 | 531,604 | 249,284 | ||||||||||||||||||||||||||||
Number of unvested shares | 804,835 | 804,835 | 272,333 | 304,799 | |||||||||||||||||||||||||||
Gross cash proceeds | $ 1,811,800 | 2,100,000 | $ 930,435 | $ 2,981,300 | |||||||||||||||||||||||||||
Shares issued price per share (in dollars per share) | $ 1.10 | $ 1.10 | $ 5.90 | ||||||||||||||||||||||||||||
Restricted Stock [Member] | |||||||||||||||||||||||||||||||
Number of equity instruments other than options outstanding | 580,564 | 580,564 | 406,564 | 222,750 | 143,750 | ||||||||||||||||||||||||||
Total unrecognized stock-based compensation | $ 5,300 | 139,100 | $ 5,300 | 139,100 | $ 59,028 | $ 205,858 | |||||||||||||||||||||||||
Number of shares granted under the plan | 174,000 | 183,814 | 79,000 | ||||||||||||||||||||||||||||
Stock Options [Member] | |||||||||||||||||||||||||||||||
Total unrecognized stock-based compensation | 329,600 | 682,900 | $ 329,600 | 682,900 | $ 126,509 | $ 860,915 | |||||||||||||||||||||||||
Common Stock [Member] | |||||||||||||||||||||||||||||||
Number of common stock issued | 183,814 | ||||||||||||||||||||||||||||||
Preferred Stock [Member] | |||||||||||||||||||||||||||||||
Number of common stock issued | |||||||||||||||||||||||||||||||
Second Common Stock Purchase Agreement [Member] | Aspire Capital Fund, LLC [Member] | |||||||||||||||||||||||||||||||
Number of common shares purchased | 10,000,000 | ||||||||||||||||||||||||||||||
Agreement term | 30 months | ||||||||||||||||||||||||||||||
Common stock purchase price (in dollars per share) | $ 0.50 | ||||||||||||||||||||||||||||||
Description of purchase notice | Amount equal to 50,000 shares, and the closing sale price of its Common Stock is equal to or greater than $0.50 per share, the Company also has the right, in its sole discretion, to present Aspire Capital with a volume-weighted average price purchase notice (each, a “VWAP Purchase Notice”) directing Aspire Capital to purchase an amount of stock equal to up to 30% of the aggregate shares of Common Stock traded on its principal market on the next trading day (the “VWAP Purchase Date”), subject to a maximum number of shares the Company may determine. The purchase price per share pursuant to such VWAP Purchase Notice is generally 95% of the volume-weighted average price for Common Stock traded on its principal market on the VWAP Purchase Date. | ||||||||||||||||||||||||||||||
Number of common stock issued | 2,200,100 | 884,671 | |||||||||||||||||||||||||||||
Proceeds from issuance of private placement | $ 3,700,000 | $ 1,900,000 | |||||||||||||||||||||||||||||
Second Common Stock Purchase Agreement [Member] | Aspire Capital Fund, LLC [Member] | Maximum [Member] | |||||||||||||||||||||||||||||||
Number of shares sold per day | 50,000 | ||||||||||||||||||||||||||||||
Second Common Stock Purchase Agreement [Member] | Aspire Capital Fund, LLC [Member] | Commitment Shares [Member] | |||||||||||||||||||||||||||||||
Number of common shares purchased | 2,500,000 | ||||||||||||||||||||||||||||||
Number of share not request purchase per day | 300,000 | ||||||||||||||||||||||||||||||
Chairman Services Agreement [Member] | Mr. Robin L. Smith, M.D [Member] | |||||||||||||||||||||||||||||||
Annual cash fee | $ 300,000 | 250,000 | |||||||||||||||||||||||||||||
Chairman Services Agreement [Member] | Mr. Robin L. Smith, M.D [Member] | Stock Options [Member] | |||||||||||||||||||||||||||||||
Expiration period | 10 years | ||||||||||||||||||||||||||||||
Employment Agreement [Member] | Mr. George C. Carpenter, IV [Member] | |||||||||||||||||||||||||||||||
Annual cash fee | $ 270,000 | $ 206,250 | 206,250 | ||||||||||||||||||||||||||||
Advisory Agreement [Member] | Maxim Group LLC [Member] | |||||||||||||||||||||||||||||||
Description of compensation under the agreement | The agreement was 100,000 shares of the Company's Common Stock, payable in one payment of 50,000 shares of Common Stock and five monthly payments of 10,000 shares of Common Stock from April through August 2018. | ||||||||||||||||||||||||||||||
Advisory Agreement [Member] | Maxim Group LLC [Member] | General and Administrative [Member] | |||||||||||||||||||||||||||||||
Compensation expense | $ 162,300 | ||||||||||||||||||||||||||||||
First Common Stock Purchase Agreement [Member] | Aspire Capital Fund, LLC [Member] | |||||||||||||||||||||||||||||||
Number of common shares purchased | 10,000,000 | 1,180,000 | 1,180,000 | ||||||||||||||||||||||||||||
Agreement term | 30 months | ||||||||||||||||||||||||||||||
Common stock purchase price (in dollars per share) | $ 0.50 | $ 2 | |||||||||||||||||||||||||||||
Description of purchase notice | Amount equal to 50,000 shares, and the closing sale price of its Common Stock is equal to or greater than $0.50 per share, the Company also has the right, in its sole discretion, to present Aspire Capital with a volume-weighted average price purchase notice (each, a “VWAP Purchase Notice”) directing Aspire Capital to purchase an amount of stock equal to up to 30% of the aggregate shares of Common Stock traded on its principal market on the next trading day (the “VWAP Purchase Date”), subject to a maximum number of shares the Company may determine. The purchase price per share pursuant to such VWAP Purchase Notice is generally 95% of the volume-weighted average price for Common Stock traded on its principal market on the VWAP Purchase Date. | ||||||||||||||||||||||||||||||
Gross cash proceeds | $ 2,400,000 | $ 2,400,000 | |||||||||||||||||||||||||||||
First Common Stock Purchase Agreement [Member] | Aspire Capital Fund, LLC [Member] | Maximum [Member] | |||||||||||||||||||||||||||||||
Number of shares sold per day | 50,000 | ||||||||||||||||||||||||||||||
Hooper Holmes Agreement [Member] | Director5Member | |||||||||||||||||||||||||||||||
Annual cash fee | $ 0 | $ 54,300 | $ 2,600 | $ 90,700 | $ 110,100 | $ 20,300 | |||||||||||||||||||||||||
Herguth Employment Agreement [Member] | Mr. George C. Carpenter, IV [Member] | |||||||||||||||||||||||||||||||
Number of vested shares | 50,000 | ||||||||||||||||||||||||||||||
Compensation expense | $ 325,000 | ||||||||||||||||||||||||||||||
Performance bonus | $ 340,000 | ||||||||||||||||||||||||||||||
Number of stock option subject to the time-based vesting schedule | 200,000 | ||||||||||||||||||||||||||||||
Number of stock option subject to the performance-based vesting schedule | 200,000 | ||||||||||||||||||||||||||||||
Amendment To Employment Agreement [Member] | Mr. George C. Carpenter, IV [Member] | |||||||||||||||||||||||||||||||
Number of stock options granted | 50,000 | ||||||||||||||||||||||||||||||
Option vesting period | 12 months | ||||||||||||||||||||||||||||||
Private Placement [Member] | Warrant [Member] | |||||||||||||||||||||||||||||||
Common stock purchase price (in dollars per share) | $ 2.34 | ||||||||||||||||||||||||||||||
Preferred stock, par value (in dollars per share) | $ 0.001 | ||||||||||||||||||||||||||||||
Private Placement [Member] | Affiliates [Member] | |||||||||||||||||||||||||||||||
Number of common shares purchased | 1,050,000 | ||||||||||||||||||||||||||||||
Common stock purchase price (in dollars per share) | $ 2 | ||||||||||||||||||||||||||||||
Proceeds from issuance of private placement | $ 2,100,000 | ||||||||||||||||||||||||||||||
Preferred stock, par value (in dollars per share) | $ 0.001 | ||||||||||||||||||||||||||||||
Private Placement [Member] | Definitive Agreements [Member] | Directors And Management [Member] | |||||||||||||||||||||||||||||||
Number of common shares purchased | 459,458 | ||||||||||||||||||||||||||||||
Common stock purchase price (in dollars per share) | $ 1.85 | ||||||||||||||||||||||||||||||
45-day Option Over-Allotment Option [Member] | Underwriters [Member] | Warrant [Member] | |||||||||||||||||||||||||||||||
Number of common stock issued | 213,800 | ||||||||||||||||||||||||||||||
Public Offering [Member] | Warrant [Member] | |||||||||||||||||||||||||||||||
Number of common stock issued | 134,000 | 1,675,000 | |||||||||||||||||||||||||||||
Public Offering [Member] | Common Stock [Member] | |||||||||||||||||||||||||||||||
Number of common stock issued | 1,675,000 | ||||||||||||||||||||||||||||||
Pro-Rate Option [Member] | Warrant [Member] | |||||||||||||||||||||||||||||||
Number of common stock issued | 2,539,061 | ||||||||||||||||||||||||||||||
Warrant exercise price (in dollars per share) | $ 5.25 | ||||||||||||||||||||||||||||||
Number of each warrant called | 1 | ||||||||||||||||||||||||||||||
Omnibus Incentive Compensation Plan 2012 [Member] | |||||||||||||||||||||||||||||||
Common stock purchase price (in dollars per share) | $ 0.001 | ||||||||||||||||||||||||||||||
Common stock authorized | 975,000 | ||||||||||||||||||||||||||||||
Weighted exercise price of awarded shares (in dollars per share) | $ 4.39 | ||||||||||||||||||||||||||||||
Number of options outstanding | 802,492 | ||||||||||||||||||||||||||||||
Number of options authorized | 200,000 | 75,000 | 27,500 | 1,667 | |||||||||||||||||||||||||||
Number of authorized shares available for grant previously | 885,781 | ||||||||||||||||||||||||||||||
Number of authorized shares available for grant | 1,570,248 | ||||||||||||||||||||||||||||||
Maximum number of shares granted to individual | 150,000 | ||||||||||||||||||||||||||||||
Description of plan terms | The holders of the Company's common and preferred stock voted to (i) amend the 2012 Plan to eliminate the annual individual award limits under the 2012 Plan and (ii) amend 2012 Plan to increase: (a) the total number of shares of common stock, par value $0.001 per share (“Common Stock”), available for grant under the 2012 Plan (subject to the overall limits described in clause (b) below) from 1,500,000 shares to an aggregate of 2,250,000 shares and (b) the aggregate limitation on authorized shares available for grant under the 2012 Plan, following any increases pursuant to the evergreen provision (the “Evergreen Provision”), from 2,200,000 shares to 2,950,000 shares. | The holders of the Company's common stock voted to amend the 2012 Plan to increase (i) the total number of shares of Common Stock available for grant under the 2012 Plan (subject to the overall limit described in clause (ii) below) from 1,072,500 shares to an aggregate of 1,500,000 shares and (ii) the aggregate limitation on the authorization shares available for grant under the 2012 Plan, following any increases pursuant to the evergreen provision, from 1,570,248 shares to 2,200,000 shares. | on January 1st of each year through 2022, automatically increases the number of shares subject to the 2012 Plan by the lesser of: (a) a number equal to 10% of the shares of Common Stock authorized under the 2012 Plan as of the preceding December 31st, or (b) an amount, or no amount, as determined by the Board, but in no event may the number of shares of Common Stock authorized under the 2012 Plan exceed 885,781 and (iii) increase the annual individual award limits under the 2012 Plan to 100,000 shares of Common Stock, subject to adjustment in accordance with the 2012 Plan. Per the above mentioned “evergreen” provision, an additional 50,000 shares were automatically allocated for distribution under the 2012 Plan as of January 1, 2017. | ||||||||||||||||||||||||||||
Omnibus Incentive Compensation Plan 2012 [Member] | Restricted Stock [Member] | |||||||||||||||||||||||||||||||
Number of shares reserved for future issuance | 465,936 | 465,936 | 290,944 | ||||||||||||||||||||||||||||
Number of equity instruments other than options outstanding | 580,564 | 580,564 | |||||||||||||||||||||||||||||
Omnibus Incentive Compensation Plan 2012 [Member] | Maximum [Member] | |||||||||||||||||||||||||||||||
Common stock exercise price (in dollars per share) | $ 600 | $ 600 | $ 600 | ||||||||||||||||||||||||||||
Omnibus Incentive Compensation Plan 2012 [Member] | Minimum [Member] | |||||||||||||||||||||||||||||||
Common stock exercise price (in dollars per share) | $ 1.20 | $ 1.20 | $ 1.55 | ||||||||||||||||||||||||||||
Omnibus Incentive Compensation Plan 2012 [Member] | Chairman Services Agreement [Member] | Mr. Robin L. Smith, M.D [Member] | Restricted Stock [Member] | |||||||||||||||||||||||||||||||
Number of shares granted under the plan | 25,000 | ||||||||||||||||||||||||||||||
Omnibus Incentive Compensation Plan 2012 [Member] | Chairman Services Agreement [Member] | Mr. Robin L. Smith, M.D [Member] | Stock Options [Member] | |||||||||||||||||||||||||||||||
Number of stock options granted | 75,000 | ||||||||||||||||||||||||||||||
Number of option to purchase granted annual award limits | 50,000 | ||||||||||||||||||||||||||||||
2012 Plan [Member] | Mr. Robin L. Smith, M.D [Member] | |||||||||||||||||||||||||||||||
Number of options outstanding | 75,000 | ||||||||||||||||||||||||||||||
Common stock exercise price (in dollars per share) | $ 1.55 | ||||||||||||||||||||||||||||||
2012 Plan [Member] | Employment Agreement [Member] | Mr. George C. Carpenter, IV [Member] | Restricted Stock [Member] | |||||||||||||||||||||||||||||||
Number of stock options granted | 34,380 | ||||||||||||||||||||||||||||||
2006 Stock Incentive Plan [Member] | |||||||||||||||||||||||||||||||
Common stock outstanding | 1,445 | ||||||||||||||||||||||||||||||
Number of shares reserved for future issuance | 3,339 | ||||||||||||||||||||||||||||||
2006 Stock Incentive Plan [Member] | Maximum [Member] | |||||||||||||||||||||||||||||||
Common stock exercise price (in dollars per share) | $ 3,300 | ||||||||||||||||||||||||||||||
2006 Stock Incentive Plan [Member] | Minimum [Member] | |||||||||||||||||||||||||||||||
Common stock exercise price (in dollars per share) | $ 2,400 |
STOCKHOLDERS' EQUITY (Details_2
STOCKHOLDERS' EQUITY (Details Narrative 1) - USD ($) | Sep. 21, 2018 | May 15, 2018 | Mar. 29, 2018 | Dec. 06, 2016 | Mar. 31, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | Apr. 30, 2018 | Sep. 30, 2016 | |
Amount of additional common stock issue | $ 80,475 | |||||||||
Maximum amount of common stock issue | $ 7,482,100 | |||||||||
Number of authorized share issue | 250,000,000 | 250,000,000 | 500,000,000 | |||||||
Number of common stock issue | 8,936,695 | 7,407,254 | 4,299,311 | |||||||
Number of blank-check preferred stock | 15,000,000 | 15,000,000 | 15,000,000 | |||||||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | |||||||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | |||||||
Warrant [Member] | ||||||||||
Warrant outstanding | 6,075,874 | 6,075,874 | 4,567,672 | 7,160 | ||||||
Warrant [Member] | Maximum [Member] | ||||||||||
Warrant expiration year | 2018 | |||||||||
Warrant [Member] | Minimum [Member] | ||||||||||
Warrant expiration year | 2028 | |||||||||
Warrant One [Member] | ||||||||||
Warrant outstanding | [1] | 459,458 | ||||||||
Warrant exercise price (in dollars per share) | $ 2 | |||||||||
Warrant Two [Member] | ||||||||||
Warrant outstanding | [2] | 1,050,000 | ||||||||
Warrant exercise price (in dollars per share) | $ 2.34 | |||||||||
Warrant Three [Member] | ||||||||||
Warrant outstanding | [3] | 2,539,061 | ||||||||
Warrant exercise price (in dollars per share) | $ 5.25 | |||||||||
Warrant Four [Member] | ||||||||||
Warrant outstanding | [4] | 1,675,000 | ||||||||
Warrant exercise price (in dollars per share) | $ 5.25 | |||||||||
Warrant Five [Member] | ||||||||||
Warrant outstanding | [5] | 213,800 | ||||||||
Warrant exercise price (in dollars per share) | $ 5.25 | |||||||||
Warrant Six [Member] | ||||||||||
Warrant outstanding | [6] | 134,000 | ||||||||
Warrant exercise price (in dollars per share) | $ 6.04 | |||||||||
Warrant Seven [Member] | ||||||||||
Warrant outstanding | 4,000 | |||||||||
Warrant exercise price (in dollars per share) | $ 10 | |||||||||
Warrant Eight [Member] | ||||||||||
Warrant outstanding | 555 | |||||||||
Warrant exercise price (in dollars per share) | $ 55 | |||||||||
Series A Preferred Stock [Member] | ||||||||||
Number of blank-check preferred stock | 1,500,000 | 1,500,000 | ||||||||
Blank Check Preferred Stock [Member] | ||||||||||
Number of blank-check preferred stock | 15,000,000 | 15,000,000 | ||||||||
Series A-1 Preferred Stock [Member] | ||||||||||
Number of blank-check preferred stock | 500,000 | 500,000 | ||||||||
Definitive Agreements [Member] | Directors And Management [Member] | Second Purchase Agreement [Member] | ||||||||||
Description of stock unit term | Each unit consisting of one share of common stock and one common stock purchase warrant to purchase one share of Common Stock for $2.00 per share. | |||||||||
Common stock, par value (in dollars per share) | $ 2 | |||||||||
Second Common Stock Purchase Agreement [Member] | Aspire Capital Fund, LLC [Member] | ||||||||||
Number of share issued or sold | 10,000,000 | |||||||||
Unit price (in dollars per share) | $ 0.50 | |||||||||
First Common Stock Purchase Agreement [Member] | Aspire Capital Fund, LLC [Member] | ||||||||||
Number of share issued or sold | 10,000,000 | 1,180,000 | 1,180,000 | |||||||
Unit price (in dollars per share) | $ 0.50 | $ 2 | ||||||||
Second Purchase Agreement [Member] | Aspire Capital [Member] | ||||||||||
Number of share issued or sold | 1,134,671 | |||||||||
Percentage of exercisable common stock | 20.00% | |||||||||
Amount of additional common stock issue | $ 8 | |||||||||
Maximum amount of common stock issue | $ 10 | |||||||||
Second Amended Note & Warrant Agreement [Member] | Warrant [Member] | Maximum [Member] | ||||||||||
Warrant exercise price (in dollars per share) | $ 55 | |||||||||
Second Amended Note & Warrant Agreement [Member] | Warrant [Member] | Minimum [Member] | ||||||||||
Warrant exercise price (in dollars per share) | 2 | |||||||||
Second Amended Note & Warrant Agreement [Member] | Warrant [Member] | Weighted Average [Member] | ||||||||||
Warrant exercise price (in dollars per share) | $ 4.53 | |||||||||
First Amended Subscription Agreement [Member] | Series A-1 Convertible Preferred Stock [Member] | ||||||||||
Preferred stock, par value (in dollars per share) | $ 0.001 | |||||||||
Private Placement [Member] | Series A Preferred Stock [Member] | ||||||||||
Number of share issued or sold | 1,050,000 | |||||||||
Unit price (in dollars per share) | $ 2 | |||||||||
Private Placement [Member] | Affiliates [Member] | ||||||||||
Number of share issued or sold | 1,050,000 | |||||||||
Unit price (in dollars per share) | $ 2 | |||||||||
Preferred stock, par value (in dollars per share) | $ 0.001 | |||||||||
Description of stock unit term | Each consisting of one share of newly-designated Series A Preferred Stock or Series A-1 Preferred Stock, par value $0.001 per share and one Warrant to purchase one share of Common Stock, par value $0.001 per share | |||||||||
Common stock, par value (in dollars per share) | $ 0.001 | |||||||||
Private Placement [Member] | Definitive Agreements [Member] | Directors And Management [Member] | ||||||||||
Number of share issued or sold | 459,458 | |||||||||
Unit price (in dollars per share) | $ 1.85 | |||||||||
Number of common stock issue | 459,458 | |||||||||
Description of stock unit term | Each unit consisting of one share of common stock and one common stock purchase warrant to purchase one share of Common Stock for $2.00 per share. | |||||||||
Common stock, par value (in dollars per share) | $ 2 | |||||||||
Closing price (in dollars per share) | $ 1.72 | |||||||||
[1] | On September 21, 2018, the Company entered into definitive agreements with George C. Carpenter IV, President and Chief Executive Officer, Robin L. Smith, Chairman, as well as John Pappajohn, and Peter Unanue, each a director of the Company, and entities affiliated with Michal Votruba, a member of the Board of Directors of MYnd Analytics and Director of Life Sciences for the European-based RSJ-Gradus fund, relating to a private placement of an aggregate of 459,458 units for $1.85 per unit, with each unit consisting of one share of Common Stock and one Common Stock Purchase Warrant to purchase one share of Common Stock for $2.00 per share. The closing price per share of the Common Stock on the Nasdaq Stock Market on September 20, 2018 was $1.72 per share. | |||||||||
[2] | On March 29, 2018, the Company sold an aggregate of 1,050,000 units for $2.00 per Unit each consisting of one share of newly-designated Series A Preferred Stock, and one warrant for $2.34 per share in a private placement to three affiliates of the Company, for gross proceeds of $2.1 million. The private placement closed on March 29, 2018. The closing price per share of the Common Stock on the Nasdaq Stock Market on March 29, 2018 was $1.19 per share. | |||||||||
[3] | On July 13, 2017, the Company declared a special dividend of warrants to purchase shares of the Company's common stock to record holders of Common Stock as of such date. Warrants to purchase 2,539,061 shares of Common Stock were distributed pro rata to all holders of common stock on the record date. These warrants will be exercisable (in accordance with their terms) to purchase one share of common stock, at an exercise price of $5.25 per share. The warrants will become exercisable commencing not less than 12 months following their July 27, 2017 distribution date and will expire five years thereafter. | |||||||||
[4] | On July 19, 2017, the Company issued 1,675,000 shares of Common Stock and accompanying Warrants to purchase up to 1,675,000 shares of Common Stock in connection with an underwritten public offering. | |||||||||
[5] | On August 23, 2017, the Company issued 213,800 common stock warrants to underwriters as part of the overallotment attributed to the July 2017 underwritten public offering. | |||||||||
[6] | As part of the underwritten public offering on July 19, 2017, the Company issued 134,000 common stock warrants to the underwriters as part of the services performed by them in connection with the underwritten public offering. |
CONVERTIBLE PREFERRED STOCK (De
CONVERTIBLE PREFERRED STOCK (Details Narrative) - USD ($) | Apr. 30, 2018 | Mar. 29, 2018 | Mar. 31, 2019 | Sep. 30, 2018 | Sep. 30, 2017 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | ||
Proceeds from sale of Preferred Stock and common stock warrants | $ 2,037,100 | ||||
Number of shares issued | 463,636 | ||||
Undeclared cumulative dividends | $ 49,200 | $ 0 | |||
Common Stock [Member] | |||||
Number of shares issued | 183,814 | ||||
Preferred Stock [Member] | |||||
Number of shares issued | |||||
Private Placement [Member] | |||||
Closing price of common stock, per share | $ 1.19 | ||||
Private Placement [Member] | Warrant [Member] | |||||
Sale of stock, price per share | 2.34 | ||||
Preferred stock, par value (in dollars per share) | 0.001 | ||||
Common stock, par value (in dollars per share) | $ 0.001 | ||||
Warrants term | 5 years | ||||
Series A Preferred Stock [Member] | |||||
Percentage of cash dividends | 5.00% | ||||
Series A Preferred Stock [Member] | Private Placement [Member] | |||||
Number of share issued or sold | 1,050,000 | ||||
Sale of stock, price per share | $ 2 | ||||
Proceeds from sale of Preferred Stock and common stock warrants | $ 2,100,000 | ||||
Series A Preferred Stock [Member] | Private Placement [Member] | Mary Pappajohn [Member] | |||||
Amount received on units sold | 1,000,000 | ||||
Series A Preferred Stock [Member] | Private Placement [Member] | John Pappajohn [Member] | |||||
Amount received on units sold | 1,000,000 | ||||
Series A Preferred Stock [Member] | Private Placement [Member] | Peter Unanue [Member] | |||||
Amount received on units sold | $ 100,000 | ||||
First Amended Subscription Agreement [Member] | Series A-1 Convertible Preferred Stock [Member] | |||||
Preferred stock, par value (in dollars per share) | $ 0.001 | ||||
Number of shares issued | 500,000 |
INCOME TAXES (Details)
INCOME TAXES (Details) | Dec. 22, 2017 | Dec. 31, 2017 | Jun. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 |
Income Tax Disclosure [Abstract] | |||||
Federal income tax (benefit) at statutory rates | (21.00%) | (34.00%) | (21.00%) | (24.25%) | (34.00%) |
Stock-based compensation | (0.22%) | (3.46%) | |||
Rate change | (81.08%) | ||||
Change in valuation allowance | 58.95% | (29.29%) | |||
True-ups and other adjustments | (0.09%) | (1.27%) | |||
State tax benefit | (1.82%) | (0.02%) | |||
Total | (0.02%) | (0.04%) |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | |
Current: | ||||||
Federal: | ||||||
State: | 1,900 | 2,600 | ||||
Deferred: | ||||||
Federal: | (5,819,600) | 2,082,900 | ||||
State: | (246,500) | (840,600) | ||||
Change in valuation allowance | 6,066,100 | (1,242,300) | ||||
Total | $ 2,300 | $ 1,900 | $ 2,300 | $ 1,900 | $ 1,900 | $ 2,600 |
INCOME TAXES (Details 2)
INCOME TAXES (Details 2) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | |
Current: | ||||||
Federal: | ||||||
State: | 1,900 | 2,600 | ||||
Total current | 1,900 | 2,600 | ||||
Deferred: | ||||||
Federal: | (5,819,600) | 2,082,900 | ||||
State: | (246,500) | (840,600) | ||||
Total deferred | (6,066,100) | 1,242,300 | ||||
Change in valuation allowance | 6,066,100 | (1,242,300) | ||||
Total | $ 2,300 | $ 1,900 | $ 2,300 | $ 1,900 | $ 1,900 | $ 2,600 |
INCOME TAXES (Details 3)
INCOME TAXES (Details 3) - USD ($) | Sep. 30, 2018 | Sep. 30, 2017 |
Deferred income tax assets: | ||
Net operating loss carryforward | $ 13,921,773 | $ 19,024,793 |
Deferred interest, consulting and compensation liabilities | 2,850,840 | 3,850,567 |
Deferred income tax assets - other | 155,517 | 118,793 |
Deferred income tax assets gross | 16,928,130 | 22,994,153 |
Deferred income tax liabilities-other | ||
Deferred income tax asset-net before valuation allowance | 16,928,130 | 22,994,153 |
Valuation allowance | (16,928,130) | (22,994,153) |
Deferred income tax asset-net |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | Dec. 22, 2017 | Dec. 31, 2017 | Jun. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 |
Net operating loss carryforwards | $ 33,800,000 | |||||
Corporate income tax rate | 21.00% | 34.00% | 21.00% | 24.25% | 34.00% | |
Deferred tax expense | $ 8,400,000 | |||||
Subsequent Event [Member] | ||||||
Corporate income tax rate | 21.00% | |||||
State and Local Jurisdiction [Member] | ||||||
Net operating loss carryforwards | 33,800,000 | |||||
Domestic Tax Authority [Member] | ||||||
Net operating loss carryforwards | 60,200,000 | |||||
Operating loss caryforwards, tax affected | $ 12,600,000 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | Sep. 21, 2018 | May 01, 2018 | Apr. 24, 2018 | Apr. 19, 2018 | Mar. 29, 2018 | Mar. 01, 2017 | Aug. 31, 2015 | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Feb. 28, 2017 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||||
Marketing Services Consulting Agreement [Member] | Decision Calculus Associates (Jill Carpenter) [Member] | |||||||||||||||
Marketing expense paid per month | $ 2,000 | $ 3,000 | $ 10,000 | ||||||||||||
Marketing expense paid | $ 170,000 | ||||||||||||||
Expenses related related party | $ 6,000 | $ 9,000 | $ 12,000 | $ 18,000 | $ 31,000 | $ 57,000 | |||||||||
Hooper Holmes Agreement [Member] | Director5Member | |||||||||||||||
Professional fees | $ 0 | $ 54,300 | $ 2,600 | $ 90,700 | 110,100 | $ 20,300 | |||||||||
Chairman Services Agreement [Member] | Mr. Robin L. Smith, M.D [Member] | |||||||||||||||
Professional fees | $ 300,000 | 250,000 | |||||||||||||
Employment Agreement [Member] | Mr. George C. Carpenter, IV [Member] | |||||||||||||||
Professional fees | $ 270,000 | $ 206,250 | $ 206,250 | ||||||||||||
Private Placement [Member] | Affiliates [Member] | |||||||||||||||
Number of share issued or sold | 1,050,000 | ||||||||||||||
Unit price (in dollars per share) | $ 2 | ||||||||||||||
Preferred stock, par value (in dollars per share) | 0.001 | ||||||||||||||
Common stock, par value (in dollars per share) | 0.001 | ||||||||||||||
Share price | $ 2.34 | ||||||||||||||
Description of stock unit term | Each consisting of one share of newly-designated Series A Preferred Stock or Series A-1 Preferred Stock, par value $0.001 per share and one Warrant to purchase one share of Common Stock, par value $0.001 per share | ||||||||||||||
Gross proceeds | $ 2,100,000 | ||||||||||||||
Private Placement [Member] | Definitive Agreements [Member] | Directors And Management [Member] | |||||||||||||||
Number of share issued or sold | 459,458 | ||||||||||||||
Unit price (in dollars per share) | $ 1.85 | ||||||||||||||
Common stock, par value (in dollars per share) | $ 2 | ||||||||||||||
Description of stock unit term | Each unit consisting of one share of common stock and one common stock purchase warrant to purchase one share of Common Stock for $2.00 per share. |
LOSS PER SHARE (Details)
LOSS PER SHARE (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | |
Net loss for computation of basic and diluted net loss per share: | ||||||
Net Loss attributable to MYnd Analytics, Inc. | $ (2,258,600) | $ (2,587,300) | $ (4,636,100) | $ (5,356,700) | $ (9,598,700) | $ (7,112,800) |
Preferred stock dividends | $ (49,200) | (49,200) | ||||
Total | $ (9,647,900) | $ (7,112,800) | ||||
Basic and diluted net loss per share: | ||||||
Basic and diluted net loss per share (in dollars per share) | $ (0.27) | $ (0.59) | $ (0.58) | $ (1.23) | $ (1.86) | $ (2.52) |
Basic and diluted weighted average shares outstanding (in shares) | 8,399,443 | 4,362,564 | 7,964,021 | 4,347,745 | 5,199,566 | 2,817,415 |
Anti-dilutive common equivalent shares not included in the computation of dilutive net loss per share: | ||||||
Total (in shares) | 7,718,349 | 6,213,956 | 7,718,349 | 6,213,956 | 6,911,283 | 344,586 |
Warrant [Member] | ||||||
Anti-dilutive common equivalent shares not included in the computation of dilutive net loss per share: | ||||||
Total (in shares) | 6,075,319 | 5,617,481 | 6,075,319 | 5,617,481 | 6,075,874 | 957,198 |
Restricted Stock [Member] | ||||||
Anti-dilutive common equivalent shares not included in the computation of dilutive net loss per share: | ||||||
Total (in shares) | 13,095 | 42,416 | 13,095 | 42,416 | 406,564 | 4,500 |
Stock Option [Member] | ||||||
Anti-dilutive common equivalent shares not included in the computation of dilutive net loss per share: | ||||||
Total (in shares) | 1,629,935 | 554,059 | 1,629,935 | 554,059 | ||
Stock Options [Member] | ||||||
Anti-dilutive common equivalent shares not included in the computation of dilutive net loss per share: | ||||||
Total (in shares) | 803,937 | 359,704 |
COMMITMENTS AND CONTINGENT LI_3
COMMITMENTS AND CONTINGENT LIABILITIES (Details) - USD ($) | Sep. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 |
Operating Lease Obligations | $ 177,300 | $ 162,800 | |||
Total | 177,300 | $ 162,800 | |||
Payments due by period [Member] | |||||
Operating Lease Obligations | $ 48,800 | $ 47,500 | $ 114,000 | 129,800 | |
Total | $ 48,800 | $ 47,500 | $ 114,000 | $ 129,800 |
COMMITMENTS AND CONTINGENT LI_4
COMMITMENTS AND CONTINGENT LIABILITIES (Details Narrative) | 12 Months Ended |
Sep. 30, 2018USD ($) | |
Premises [Member] | |
Loss Contingencies [Line Items] | |
Operating leases term of contract | $ 2 |
Operating leases monthly lease payments | $ 8,411 |
Commence date | Feb. 1, 2019 |
Headquarters and Neurometric Services [Member] | |
Loss Contingencies [Line Items] | |
Operating leases monthly lease payments | $ 10,666 |
Expiration date | Jan. 31, 2019 |
Premises [Member] | |
Loss Contingencies [Line Items] | |
Operating leases term of contract | $ 3 |
Operating leases monthly lease payments | 2,508 |
Operating leases next 12 months monthly lease payments | 2,576 |
Operating leases remaining twelve months monthly lease payments | $ 2,647 |
Commence date | Sep. 30, 2018 |
Expiration date | Sep. 30, 2020 |
Arcadian Telepsychiatry Services LLC [Member] | |
Loss Contingencies [Line Items] | |
Operating leases remaining twelve months monthly lease payments | $ 3,312 |
Operating leases rent expense | $ 3,410 |
Expiration date | Feb. 28, 2020 |
SIGNIFICANT CUSTOMERS (Details
SIGNIFICANT CUSTOMERS (Details Narrative) - Customer Concentration Risk [Member] - Customer | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Sales Revenue, Services, Net [Member] | ||
Concentration Risk [Line Items] | ||
Number of customers | 4 | 4 |
Percentage of concentration risk | 29.00% | 50.00% |
Accounts Receivable [Member] | ||
Concentration Risk [Line Items] | ||
Number of customers | 3 | 3 |
Percentage of concentration risk | 35.00% | 72.00% |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | May 08, 2019 | Dec. 03, 2018 | Nov. 26, 2018 | Oct. 08, 2018 | Dec. 06, 2016 | Feb. 01, 2019 | Mar. 31, 2019 | Mar. 31, 2018 | Sep. 30, 2018 | Sep. 30, 2017 |
Amount raise upto maximum additional common stock | $ 8,900 | $ 7,400 | $ 4,300 | |||||||
Amount of maximum additional common stock issue | $ 80,475 | |||||||||
Number of stock options granted | 864,758 | 468,000 | 334,000 | |||||||
Number of shares issued | 463,636 | |||||||||
Proceeds from issuance of stock | $ 1,811,800 | $ 2,100,000 | $ 930,435 | $ 2,981,300 | ||||||
Shares issued price per share (in dollars per share) | $ 1.10 | $ 5.90 | ||||||||
Aspire Capital Fund, LLC [Member] | First Common Stock Purchase Agreement [Member] | ||||||||||
Number of common shares purchased | 10,000,000 | 1,180,000 | 1,180,000 | |||||||
Proceeds from issuance of stock | $ 2,400,000 | $ 2,400,000 | ||||||||
Subsequent Event [Member] | ||||||||||
Description of special meeting of stockholders | The holders of the Company’s common and preferred stock voted to (i) amend the 2012 Plan to eliminate the annual individual award limits under the 2012 Plan and (ii) amend 2012 Plan to increase: (a) the total number of shares of common stock, par value $0.001 per share (“Common Stock”), available for grant under the 2012 Plan (subject to the overall limits described in clause (b) below) from 1,500,000 shares to an aggregate of 2,250,000 shares and (b) the aggregate limitation on authorized shares available for grant under the 2012 Plan, following any increases pursuant to the evergreen provision (the “Evergreen Provision”), from 2,200,000 shares to 2,950,000 shares. | |||||||||
Percentage of exerciable common stock | 20.00% | |||||||||
Maximum number of shares granted to other employees and consultants | 46,758 | 100,500 | ||||||||
Total lease payments per month | $ 8,411 | |||||||||
Subsequent Event [Member] | Dr. Robin Smith [Member] | ||||||||||
Number of stock options granted | 48,000 | |||||||||
Number of shares to be forfeited | 25,000 | |||||||||
Subsequent Event [Member] | Dr. Robin Smith [Member] | Restricted Stock [Member] | ||||||||||
Number of stock options granted | 100,000 | |||||||||
Number of shares to be forfeited | 25,000 | |||||||||
Subsequent Event [Member] | Dr. Robin Smith [Member] | Amended and Restated Omnibus Incentive Compensation Plan 2012 [Member] | Restricted Stock [Member] | ||||||||||
Number of common stock granted | 50,000 | |||||||||
Subsequent Event [Member] | Donald D' Ambrosio [Member] | ||||||||||
Number of stock options granted | 26,500 | 30,000 | ||||||||
Subsequent Event [Member] | George Carpenter [Member] | ||||||||||
Number of stock options granted | 30,000 | 48,000 | ||||||||
Subsequent Event [Member] | Aspire Capital Fund, LLC [Member] | Second Purchase Agreement [Member] | ||||||||||
Amount raise upto maximum additional common stock | $ 8,100,000 | |||||||||
Amount of maximum additional common stock issue | $ 10,000,000 | |||||||||
Subsequent Event [Member] | Votruba [Member] | Omnibus Incentive Compensation Plan 2012 [Member] | Restricted Stock [Member] | ||||||||||
Number of common stock granted | 144,000 | |||||||||
Subsequent Event [Member] | John Pappajohn And Peter Unanue [Member] | Omnibus Incentive Compensation Plan 2012 [Member] | Restricted Stock [Member] | ||||||||||
Number of common stock granted | 30,000 | |||||||||
Subsequent Event [Member] | Geoffrey Harris [Member] | Omnibus Incentive Compensation Plan 2012 [Member] | Restricted Stock [Member] | ||||||||||
Number of common stock granted | 45,000 |