Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Sep. 30, 2016 | Dec. 21, 2016 | Mar. 31, 2016 | |
Document And Entity Information | |||
Entity Registrant Name | MYnd Analytics, Inc. | ||
Entity Central Index Key | 822,370 | ||
Document Type | 10-K | ||
Trading Symbol | MYAN | ||
Document Period End Date | Sep. 30, 2016 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --09-30 | ||
Entity a Well-known Seasoned Issuer | No | ||
Entity a Voluntary Filer | No | ||
Entity's Reporting Status Current | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 1,048,800 | ||
Entity Common Stock, Shares Outstanding | 2,229,061 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,016 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2016 | Sep. 30, 2015 |
CURRENT ASSETS: | ||
Cash | $ 318,200 | $ 432,100 |
Accounts receivable (net of allowance for doubtful accounts of $1,200 and $1,200 as of September 30, 2016, and September 30, 2015, respectively) | 5,100 | 11,800 |
Prepaid insurance | 59,800 | 57,400 |
Prepaid common stock | 808,000 | 39,000 |
Prepaid other assets | 18,800 | 7,900 |
Total current assets | 1,209,900 | 548,200 |
Furniture and equipment, net | 9,500 | 1,700 |
Intangible assets | 87,100 | 13,100 |
Other assets | 13,600 | 4,100 |
TOTAL ASSETS | 1,320,100 | 567,100 |
CURRENT LIABILITIES: | ||
Accounts payable (including $10,000 and $10,000 to related parties as of September 30, 2016, and September 30, 2015, respectively) | 426,600 | 852,000 |
Accrued liabilities | 61,000 | 156,300 |
Accrued compensation | 509,400 | 418,500 |
Accrued compensation - related parties | 436,200 | 226,100 |
Accrued interest | 3,900 | 103,600 |
Deferred revenue - grant funds | 45,900 | 45,900 |
Current portion of note payable | 56,300 | |
Current portion of capital lease | 1,200 | 2,400 |
Total current liabilities | 1,540,500 | 1,804,800 |
LONG-TERM LIABILITIES | ||
Secured convertible debt - related parties (net of discounts $0.00 and $209,900 as of September 30, 2016 and September 30, 2015, respectively) | 2,240,100 | |
Secured convertible debt - other (net of discounts $0.00 and $24,300 as of September 30, 2016, and September 30, 2015, respectively) | 525,700 | |
Derivative liability | 833,000 | |
Long term portion of note payable | 31,400 | |
Long term portion of capital lease | 4,700 | |
Total long-term liabilities | 36,100 | 3,598,800 |
TOTAL LIABILITIES | 1,576,600 | 5,403,600 |
STOCKHOLDERS' DEFICIT: | ||
Common stock, $0.001 par value; authorized 500,000,000 shares and issued and outstanding 1,941,061 shares and 512,405 shares as of September 30, 2016 and September 30, 2015, respectively | 1,900 | 500 |
Additional paid-in capital | 68,275,400 | 57,755,900 |
Accumulated deficit | (68,533,800) | (62,592,900) |
Total stockholders' deficit | (256,500) | (4,836,500) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ 1,320,100 | $ 567,100 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Sep. 30, 2016 | Sep. 30, 2015 |
Allowance for doubtful accounts | $ 1,200 | $ 1,200 |
Accounts payable due to related parties | $ 10,000 | 10,000 |
Secured convertible debt, net of discount | $ 234,200 | |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized | 500,000,000 | 500,000,000 |
Common stock, issued | 1,941,061 | 512,405 |
Common stock, outstanding | 1,941,061 | 512,405 |
Management [Member] | ||
Secured convertible debt, net of discount | $ 0 | $ 209,900 |
Eleven Accredited Investors [Member] | ||
Secured convertible debt, net of discount | $ 0 | $ 24,300 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
REVENUES | ||
Neurometric Services | $ 85,100 | $ 100,100 |
Cost of neurometric services revenue | 5,500 | 4,900 |
Research | 53,700 | 92,000 |
Product development | 740,500 | 691,800 |
Sales and marketing | 522,000 | 347,900 |
General and administrative | 2,530,200 | 1,613,300 |
Total operating expenses | 3,851,900 | 2,749,900 |
OPERATING LOSS | (3,766,800) | (2,649,800) |
OTHER INCOME (EXPENSE): | ||
Interest expense, net | (2,721,500) | (257,400) |
Gain (loss) on extinguishment of debt | 572,300 | (630,000) |
(Loss) gain on derivative liabilities | (34,600) | 162,800 |
Finance fees | (20,000) | |
Other miscellaneous income | 306,700 | |
Legal settlement expense | (275,000) | |
Total other expense | (2,172,100) | (724,600) |
LOSS BEFORE PROVISION FOR INCOME TAXES | (5,938,900) | (3,374,400) |
Provision for income taxes | 2,000 | 5,000 |
NET LOSS | $ (5,940,900) | $ (3,379,400) |
BASIC AND DILUTED LOSS PER SHARE: | ||
From operations (in dollars per share) | $ (9.26) | $ (6.64) |
WEIGHTED AVERAGE SHARES OUTSTANDING: | ||
Basic and Diluted (in shares) | 641,844 | 509,066 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at beginning at Sep. 30, 2014 | $ 500 | $ 57,451,400 | $ (59,213,500) | $ (1,761,600) |
Balance at beginning (in shares) at Sep. 30, 2014 | 508,655 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Stock-based compensation | 263,300 | 263,300 | ||
Restricted Stock compensation | 41,200 | 41,200 | ||
Restricted Stock compensation (in shares) | 3,750 | |||
Net loss | (3,379,400) | (3,379,400) | ||
Balance at end at Sep. 30, 2015 | $ 500 | 57,755,900 | (62,592,900) | (4,836,500) |
Balance at end (in shares) at Sep. 30, 2015 | 512,405 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Stock-based compensation | 758,400 | 758,400 | ||
Extension Warrants issued to note holders | 1,196,000 | 1,196,000 | ||
Note Warrants issued to note holders | 1,365,200 | 1,365,200 | ||
Stock issued to vendor | 6,900 | 6,900 | ||
Stock issued to vendor (in shares) | 1,500 | |||
Restricted Stock compensation | $ 100 | 877,300 | 877,400 | |
Restricted Stock compensation (in shares) | 163,750 | |||
Conversion of notes | $ 1,300 | 6,315,700 | 6,317,000 | |
Conversion of notes (in shares) | 1,263,406 | |||
Net loss | (5,940,900) | (5,940,900) | ||
Balance at end at Sep. 30, 2016 | $ 1,900 | $ 68,275,400 | $ (68,533,800) | $ (256,500) |
Balance at end (in shares) at Sep. 30, 2016 | 1,941,061 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
OPERATING ACTIVITIES: | ||
Net loss | $ (5,940,900) | $ (3,379,400) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 7,200 | 7,600 |
Gain on derivative liability valuation | 34,600 | (162,800) |
Stock based compensation | 758,400 | 241,700 |
Loss on extinguishment of debt | (572,300) | 630,000 |
Financing expenses | 2,717,300 | 275,300 |
Note issued for litigation settlement | 50,000 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | 6,700 | (2,500) |
Prepaids and other | 25,700 | (4,900) |
Accounts payable and accrued liabilities | (182,900) | (64,000) |
Amort of grant of common stock | 76,300 | |
Security deposits | (9,500) | |
Deferred compensation | 51,000 | 302,600 |
Net cash used in operating activities | (2,978,400) | (2,156,400) |
INVESTING ACTIVITIES: | ||
Purchase of fixed assets | (4,000) | |
Disposal of equipment | 1,500 | |
Intangible assets | (78,300) | |
Net cash used in investing activities | (82,300) | 1,500 |
FINANCING ACTIVITIES: | ||
Repayment of a capital lease | (3,200) | (3,600) |
Net proceeds from issuance of secured convertible debt | 2,950,000 | 1,350,000 |
Net cash provided by (used in) financing activities | 2,946,800 | 1,346,400 |
NET DECREASE IN CASH | (113,900) | (808,500) |
CASH- BEGINNING OF YEAR | 432,100 | 1,240,600 |
CASH- END OF YEAR | 318,200 | 432,100 |
Cash paid during the period for: | ||
Interest | 4,200 | 3,700 |
Finance Fees | 20,000 | |
Income taxes | 2,000 | 4,900 |
Non-cash financing activity | ||
Conversion of convertible notes to common stock | 6,266,800 | |
Conversion of Brandt litigation settlement convertible note to common stock | $ 50,200 |
NATURE OF OPERATIONS
NATURE OF OPERATIONS | 12 Months Ended |
Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF OPERATIONS | 1. NATURE OF OPERATIONS Organization and Nature of Operations At the meeting of shareholders of CNS Response, Inc. held on October 28, 2015, the shareholders approved a proposal to change the Company’s name to MYnd Analytics, Inc. The Company’s charter was officially amended on November 2, 2015. MYnd Analytics, Inc. (“MYnd,” “CNS,” “we,” “us,” “our,” or the “Company”), formerly known as CNS Response Inc., was incorporated in Delaware on March 20, 1987, under the name Age Research, Inc. Prior to January 16, 2007, the Company (then called Strativation, Inc.) was a “shell company” with nominal assets and our sole business was to identify, evaluate and investigate various companies to acquire or with which to merge. On January 16, 2007, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with CNS Response, Inc., a California corporation formed on January 11, 2000 (“CNS California”), and CNS Merger Corporation, a California corporation and the Company’s wholly-owned subsidiary (“MergerCo”) pursuant to which the Company agreed to acquire CNS California in a merger transaction wherein MergerCo would merge with and into CNS California, with CNS California being the surviving corporation (the “Merger”). On March 7, 2007, the Merger closed, CNS California became a wholly-owned subsidiary of the Company, and on the same date the corporate name was changed from Strativation, Inc. to CNS Response, Inc. At the annual meeting held on October 28, 2015, shareholders approved a change in our name from CNS Response, Inc. to MYnd Analytics, Inc. On November 2, 2015, the Company filed an amendment to its Articles of Incorporation which, among other things, effected the name change to MYnd Analytics, Inc. MYnd Analytics, Inc. (the “Company”), 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 provides objective clinical decision support to mental healthcare providers for the personalized treatment of behavioral disorders, including depression, anxiety, bipolar disorder, post-traumatic stress disorder (“PTSD”) and other non-psychotic disorders. The Company uses its proprietary neurometric platform, PEER Online, to generate Psychiatric EEG Evaluation Registry (“PEER”) Reports to predict the likelihood of response by an individual to a range of medications prescribed for the treatment of behavioral disorders. We will be conducting clinical trials focused on military personnel and their family members who are suffering from depression, PTSD and mild traumatic brain injury (“mTBI”) in order to support clinical decisions in the treatment of depression and related disorders. We are also planning to commercialize our PEER Report by focusing on the following four areas:(i) Military and Veterans, (ii) commercial growth strategy outside of the US, initially through the Canadian Armed Forces, which will provide both NATO and Health Canada experience with our PEER technology, (iii) payer and self-insured markets and (iv) market entry of provider groups. The Company acquired the Neuro-Therapy Clinic, Inc. (“NTC”) on January 15, 2008, to provide behavioral health care services. NTC’s operations were discontinued effective September 30, 2012. At our 2015 Stockholder Meeting, the Company's stockholders also approved an amendment to amend the Company’s Charter for the purposes of effecting a reverse stock-split of Common Stock at a later time and at any time until the next meeting of the Company’s stockholders which are entitled to vote on such actions, by a ratio of not less than 1-for-10 and not more than 1-for-200, and to authorize the Board to determine, at its discretion, the timing of the amendment and the specific ratio of the reverse stock-split. On August 24, 2016, the Board resolved to execute a 1- for -200 reverse stock-split. On September 20, 2016, the Company announced that on September 20, 2016, it had filed a Certificate of Amendment to its Amended and Restated Certificate of Incorporation (the “Amendment”) to (i) effect a 1-for-200 reverse stock-split (“reverse split”) of its common stock, par value $0.001 per share (the “Common Stock”), effective at 8:00 a.m. Eastern Time on September 21, 2016 (the “Effective Time”). Because the Amendment did not reduce the number of authorized shares of Common Stock, the effect of the Amendment was to increase the number of shares of Common Stock available for issuance relative to the number of shares issued and outstanding. At the Effective Time, immediately and without further action by the Company’s stockholders, every 200 shares of the Company’s Common Stock issued and outstanding immediately prior to the Effective Time were automatically combined into one share of Common Stock. In the event the reverse split left a stockholder with a fraction of a share, the number of shares due to that stockholder was rounded up. Further, any options, warrants and rights outstanding as of the Effective Time that were subject to adjustment were adjusted in accordance with the terms thereof. These adjustments included, without limitation, changes to the number of shares of Common Stock that would be obtained upon exercise or conversion of such securities, and changes to the applicable exercise or purchase price. 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 has a limited operating history and its operations are subject to certain problems, expenses, difficulties, delays, complications, risks and uncertainties frequently encountered in the operation of a business with a limited operating history. 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 continued operating losses and limited capital raise substantial doubt about its ability to continue as a going concern. The Company has limited cash resources for its operations and will need to raise additional funds to meet its obligations as they become due. As of September 30, 2016, the Company had an accumulated deficit of $68,533,800. For the year ended September 30, 2016, the Company had a net loss from operations of $3,766,800 and net cash used in operating activities of $3,028,400. To date, the Company has financed its cash requirements primarily from debt and equity financings. The Company will need to raise additional funds immediately to continue its operations and needs to raise substantial additional funds before the Company can increase demand for its PEER Online services. Until it can generate a sufficient amount of revenues to finance 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, borrowings 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. Between September 22, 2014, and August 11, 2016, the Company raised $6 million of Secured Convertible Notes. The Company exercised the Mandatory Conversion on September 19, 2016 and, on September 21, 2016, (i) converted the entire outstanding principal balance of $6,000,000, plus accrued interest of $317,000 on all of the Notes into 1,263,406 shares of the Company's common stock at a conversion price of $5.00 per share and (ii) cancelled all Warrants issued in association with the Secured Convertible Notes. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 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 accounts of the Company, an inactive parent company, and its wholly owned subsidiaries CNS California and NTC, which is a dormant company. There were no intercompany transactions to be eliminated on consolidation. 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 The Company deposits its cash with major financial institutions and may at times exceed the federally insured limit of $250,000. At September 30, 2016 cash exceeds the federally insured limit by $68,200. 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. Derivative Liabilities The Company evaluates all of its agreements to determine if such instruments have derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the consolidated statements of operations. For stock-based derivative financial instruments, the Company uses a weighted average Black-Scholes option pricing model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. As of September 30, 2016, the Company did not have any derivative financial instruments. Fair Value of Financial Instruments ASC 825-10 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 Company adopted ASC 820-10 on January 1, 2008. ASC 820-10 defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The three levels are defined as follows: Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets; Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments; and Level 3 inputs to the valuation methodology are unobservable and significant to the fair value. The Company used Level 3 inputs for its valuation methodology for the conversion option liability in determining the fair value using the Black-Scholes option-pricing model with the following assumption inputs: The range of Black-Scholes option-pricing model assumption inputs for all the valuation dates are in the table below: September 30, 2015 Low High Annual dividend yield — — Expected life (years) 2.5 5.00 Risk-free interest rate 0.56 % 1.81 % Expected volatility 191.05 % 273.10 % The a detailed roll-forward of derivative liabilities classified as Level 1,2 or 3, please refer to the table in Note 4, Derivative Liabilities. The net changes in Derivative Liabilities for transactions which were booked to other income resulted in a net loss on derivative liabilities of $34,600 for the fiscal year ended September 30, 2016 and a net gain of $162,800 for the fiscal year ended September 30, 2015. The net changes in Extinguishment of Debt for transactions which were booked to other income resulted in a net gain on extinguishment of debt of $572,300 for the fiscal year ended September 30, 2016 and a net loss of $630,000 for the fiscal year ended September 30, 2015. We had derivative liabilities of $0 and $833,000 as of September 30, 2016 and 2015 respectively. As at September 30, 2016, the Company did not identify any assets or liabilities that required presentation on the balance sheet at fair value in accordance with ASC 825-10. 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, 2016 and 2015 are $1,200 and $1,200 respectively. Furniture and Equipment Furniture and Equipment, which are recorded at cost, consist of office furniture, equipment and purchased intellectual property which are depreciated, or amortized in the case of the intellectual property, over their estimated useful life on a straight-line basis. The useful life of these assets is estimated to be between three and ten years. Depreciation and amortization for the years ended September 30, 2016 and 2015 was $7,200 and $7,600 respectively. Accumulated depreciation and amortization at September 30, 2016 and 2015 was $76,900 and $82,600, respectively. Long-Lived Assets As required by ASC 350-30 (formerly SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets The Company adopted Accounting standards update (“ASU”) 2012-02, Intangibles—Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment. The new guidance is intended to reduce the complexity and costs of the annual impairment test for indefinite-lived intangible assets by allowing companies to make a qualitative evaluation about the likelihood of impairment to determine whether it should perform a quantitative impairment test. 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, 2016, the Company had $78,400 in capitalized software development costs all of which was capitalized during the fiscal year ended September 30, 2016. The Company started amortizing the software over its estimated economic life once it was placed into service during September 2016. Consequently, for the fiscal year ended September 30, 2016, the capitalized software was amortized for one month totaling $2,200 in amortization expense. On November 23, 2011, the Company acquired intellectual property in the form of transcranial magnetic stimulation (TMS) biomarkers at a cost of $21,200 which was recorded at cost and is being amortized over its estimated useful life of 10 years on a straight-line basis. Amortization for the fiscal years ended September 30, 2016 and 2015 was $2,100 for both periods. Accumulated depreciation on the intellectual property at was $10,200 and $8,100 at the fiscal years ended September 30, 2016 and 2015 respectively. Ac ts Payable Accounts payable consists of trade payables of which $219,200 and $536,400 are for legal services at September 30, 2016 and 2015 respectively. We had accounts payable write-backs of $306,700 and $21,900 for the years ended September 30, 2016 and 2015 respectively. These were for long held-debts which have been in dispute and there has been no collection activity for five years. Accrued Compensation Accrued compensation consists of accrued vacation pay, accrued bonuses granted by the Board but not paid, and accrued pay due to former staff members. The balance also includes $125,400 accrued for two managers and $186,200 accrued for two officers who voluntarily reduced the cash portion of their salaries to help the Company conserve funds from February through July 2015. Accrued compensation also includes an accrual of $250,000 for a tax gross-up on stock awarded to the Chairman of the Company. Deferred Revenue Deferred revenue represents revenue collected but not earned as of September 30, 2016 or 2015. 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 a family member, the cost of which is not covered by other sources. These deferred revenue grant funds total $45,900 as of September 30, 2016 and 2015. Revenues The Company recognizes revenue on services, being the delivery of PEER Reports to medical providers, in accordance with the Financial Accounting Standards Board (“FASB”) ASC No. 605, “Revenue Recognition.” In all cases, revenue is recognized when we have persuasive evidence of an arrangement, a determinable fee, when collection is considered to be reasonable assured and the services are delivered. Research and Development Expenses The Company charges all research and development expenses to operations as incurred. Advertising Expenses The Company charges all advertising expenses to operations as incurred. For the years ended September 30, 2016 and 2015 advertising expenses were $148,600 and $24,000 respectively. Stock-Based Compensation The Company has adopted ASC 718-20 and related interpretations which establish the accounting for equity instruments exchanged for employee services. Under ASC 718-20, share-based compensation cost to option grantee, being employees, directors and consultants, and is measured at the grant date based on the calculated fair value of the award. The expense is recognized over the option grantees’ requisite service period, generally the vesting period of the award. 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. As a result of the implementation of certain provisions of ASC 740, Income Taxes 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. In addition, we did not record a cumulative effect adjustment related to the adoption of 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. Comprehensive Income (Loss) ASC 220-10 requires disclosure of all components of comprehensive income (loss) on an annual and interim basis. Comprehensive income (loss) is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. The Company’s comprehensive income (loss) is the same as its reported net income (loss) for the years ended September 30, 2016 and 2015. Earnings (Loss) per Share Basic earnings (loss) per share are computed by dividing income (loss) available to common stockholders 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. 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 April 2015, the FASB issued Accounting Standards Update (“ASU”) No. 2015-03 is to simplify presentation of debt issuance costs, the amendments in this Update would require that debt issuance costs be presented in the balance sheet as a direct deduction from the carrying amount of debt liability, consistent with debt discounts or premiums. The recognition and measurement guidance for debt issuance costs would not be affected by the amendments in this Update. The amendments in this ASU are effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted, including adoption in an interim period. The Company does not expect the adoption of the standard update to have a material impact on its consolidated financial position or results of operations. |
CONVERTIBLE DEBT AND EQUITY FIN
CONVERTIBLE DEBT AND EQUITY FINANCINGS | 12 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
CONVERTIBLE DEBT AND EQUITY FINANCINGS | 3. CONVERTIBLE DEBT AND EQUITY FINANCINGS Between September 22, 2014, and July 20, 2015, the Company entered into a Note Purchase Agreement (the "Original Note Purchase Agreement") in connection with a bridge financing, with nine accredited investors, including lead investor RSJ Private Equity investiční fond s proměnným základním kapitálem ("RSJ PE"). Pursuant to the Original Note Purchase Agreement, the Company issued fifteen secured convertible promissory notes (each, a "September 2014 Note") in the aggregate principal amount of $2.29 million. Of this amount, RSJ PE purchased a September 2014 Note for $750,000. Michal Votruba, a Director for Life Sciences for the RSJ/Gradus Fund, subsequently joined our Board on July 30, 2015. The September 2014 Notes were also purchased by four additional affiliates of the Company (refer to the Note Issuance and Conversion Table below). The Original Note Purchase Agreement provided for the issuance and sale of September 2014 Notes in the aggregate principal amount of up to $2.5 million, in one or more closings to occur over a six-month period beginning September 22, 2014. The Original Note Purchase Agreement also provided that the Company and the holders of the September 2014 Notes enter into a registration rights agreement covering the registration of the resale of the shares of the Common Stock underlying the September 2014 Notes. On April 14, 2015, the Company entered into Amendment No. 1 to the Original Note Purchase Agreement with the majority of the noteholders in principal, dated as of April 14, 2015 ("Amendment No. 1"), pursuant to which: (i) the aggregate principal amount of notes provided for issuance was increased by $0.5 million to a total of $3.0 million, and (ii) the period to raise the $3.0 million was extended to September 30, 2015. The Company subsequently amended and restated the Original Note Purchase Agreement solely to update for the changes made pursuant to Amendment No. 1 (such amended and restated agreement, together with the Original Note Purchase Agreement, the "Note Purchase Agreement"). On September 14, 2015, the Company entered into an Omnibus Amendment (the "Omnibus Amendment") to the Note Purchase Agreement and the notes purchased and sold pursuant thereto, with the majority of the noteholders to fix the conversion price of all notes at $10.00 per share (as adjusted for stock splits, stock dividends, combinations or the like affecting the Common Stock) (the "Fixed Conversion Price") (i) automatically, in the event of a qualified financing of not less than $5 million, or (ii) voluntarily, within 15 days prior to the maturity date of the note. The Omnibus Amendment also amended the form of note attached to the Note Purchase Agreement to reflect the Fixed Conversion Price. Subsequently thereto, on September 14, 15 and 24, 2015, the Company entered into a Note Purchase Agreement, as amended by the Omnibus Amendment, with each of six accredited investors, in connection with a bridge financing. Pursuant to these Note Purchase Agreements, the Company issued an aggregate principal amount of $710,000 of secured convertible promissory notes (collectively, the "September 2015 Notes," and together with the September 2014 Notes and all other notes purchased and sold pursuant to the Note Purchase Agreement, the "Notes"), which amount also represents the gross proceeds to the Company from the September 2015 Notes. Four of the six September 2015 Notes were purchased by affiliates of the Company, or an entity under such affiliate’s control (refer to the Note Issuance and Conversion Table below). Through December 23, 2015, and prior to further amendments to the Notes, all of the Notes were scheduled to mature on March 21, 2016, (subject to earlier conversion or prepayment), and earned interest at a rate of 5% per annum with interest payable at maturity. The Notes could not be prepaid without the prior written consent of the holder of such Notes. The Notes were secured by a security interest in the Company’s intellectual property, as detailed in a security agreement. Upon a change of control of the Company, the holder of a Note had the option to have the Note repaid with a premium equal to 50% of the outstanding principal. On December 23, 2015, the Company entered into a Second Amended and Restated Note and Warrant Purchase Agreement (which further amended and restated the Note Purchase Agreement, as modified by the Omnibus Amendment) (the "Second Amended Note & Warrant Agreement") with each of 16 accredited investors, pursuant to which (i) the aggregate principal amount of Notes available for issuance was increased from $3.0 million to up to $6.0 million, (ii) the maturity date of the Notes outstanding prior to such amendment was extended from March 21, 2016 to December 31, 2017; (iii) the time during which Notes may be issued was extended and (iv) certain warrants were issued to holders of both previously issued and Notes issued under the Second Amended Note & Warrant Agreement. Pursuant to the Second Amended Note & Warrant Agreement, on December 23 and December 28, 2015, the Company issued to the two purchasers thereof, who are both affiliates (refer to the Note Issuance and Conversion Table below) —Note Conversion and Warrant Cancellation Between February 23, 2016 and June 30, 2016, the Company issued to seven accredited investor purchasers thereof (i) an aggregate principal amount of $1,100,000 in eight separate Notes and (ii) a warrant to each holder of such Notes to purchase the Company's Common Stock, in an amount equal to 100% of the shares underlying their respective Note (each, also a "Note Warrant"). A total of 110,000 shares of Common Stock in the aggregate were underlying these Note Warrants. Five of the purchasers were affiliates of the Company (refer to the Note Issuance and Conversion Table below). —Note Conversion and Warrant Cancellation Also on December 23, 2015, in consideration for the agreement to extend the maturity date of the Notes, the Company issued to holders of all Notes outstanding prior to the date of the Second Amended Note & Warrant Agreement, warrants to purchase an aggregate of 300,000 shares of Common Stock (the "Extension Warrants", together with the Note Warrants, the "Warrants"). All Warrants had identical terms. Each such holder was issued an Extension Warrant to purchase Common Stock in an amount equal to 100% of the shares underlying each such holder's previously outstanding Notes. Extension Warrants were issued to affiliates (refer to the Note Issuance and Conversion Table below). —Note Conversion and Warrant Cancellation On August 15, 2016, the Company entered into an Amendment No. 1 to the Second Amended Note and Warrant Agreement with the investors party thereto to extend the time during which the Notes and the Warrants could be issued under the Second Amended Note and Warrant Agreement from August 11, 2016 to September 1, 2016. On September 19, 2016, the Company entered into a Second Omnibus Amendment (the "Second Omnibus Amendment"), with a majority of over 80% of the noteholders, thereby amending: (i) the Notes, (ii) the Second Amended Note and Warrant Agreement, as amended and (iii) the Warrants. Pursuant to the Second Omnibus Amendment, the Company had the option, exercisable at any time after September 1, 2016, to mandatorily convert all Notes into shares of the Company's common stock at $5.00 per share (the "Mandatory Conversion"). Note Conversion and Warrant Cancellation On September 19, 2016, pursuant to the Second Omnibus Amendment, the Company exercised the Mandatory Conversion and, on September 21, 2016, (i) converted the entire outstanding principal balance of $6,000,000, plus accrued interest of $317,000 on all of the Notes into 1,263,406 shares of the Company's common stock at a conversion price of $5.00 per share and (ii) cancelled all Warrants (refer to the Note Issuance and Conversion Table below) The below table sets forth details regarding the shares issued to certain related parties upon the Company's exercise of the Mandatory Conversion: Note Issuance and Conversion Table: Note Holder Principal Amount 2015 Carrying Value Accrued Interest Shares issued on Original Note Purchase Agreement Note Date Range Sept 22, 2014 to July 20, 2015 RSJ Private Equity (1) $ 750,000 $ 21,300 $ 728,700 $ 76,200 165,246 John Pappajohn (2) 200,000 8,100 191,900 20,400 44,089 John Pappajohn (5) 200,000 3,000 197,000 14,200 42,820 Tierney Family Trust (3) 540,000 16,000 524,000 46,000 117,199 Follman Family Trust (4) 100,000 3,000 97,000 7,700 21,538 Oman Ventures (6) 200,000 8,100 191,900 20,400 44,089 4 Accredited Investors 300,000 9,100 290,900 30,600 66,112 Subtotal for First Round $ 2,290,000 $ 68,600 $ 2,221,400 Omnibus Amendment Sept 14, 2015 Note Date Range Sept 14, 2015 to September 24, 2015 RSJ Private Equity (1) $ 350,000 $ 85,400 $ 264,600 17,300 73,462 Robin Smith (2) 60,000 7,100 52,900 3,100 12,611 John Pappajohn (2) 100,000 24,400 75,600 5,100 21,015 Follman Family Trust (4) 150,000 36,500 113,500 7,600 31,522 2 Accredited Investors 50,000 12,200 37,800 2,500 10,508 Subtotal for Second Round $ 710,000 $ 165,600 $ 544,400 Balances at September 30, 2015 $ 3,000,000 $ 234,200 $ 2,765,800 Second Amended Note December 23 & 28, 2015 RSJ Private Equity (1) $ 750,000 27,300 155,465 John Pappajohn (2) 250,000 9,300 51,856 Subtotal for Third Round $ 1,000,000 Note Date Range Feb 23, 2016 to August 16, 2016 RSJ Private Equity (1) $ 250,000 1,400 50,281 Robin Smith (2) 40,000 800 8,165 John Pappajohn (2) 850,000 14,000 172,802 Tierney Family Trust (3) 100,000 600 20,129 Follman Family Trust (4) 300,000 5,100 61,014 Carpenter, George & Jill (7) 100,000 1,300 20,254 Harris, Geoffrey (2) 10,000 300 2,058 2 Accredited Investors 300,000 5,600 61,124 Brandt Ventures (8) 50,000 200 10,047 Subtotal for Final Round $ 2,000,000 Balances Converted September 19, 2016 $ 6,000,000 $ 317,000 1,263,406 (1) RSJ PE is a greater than 5% shareholder. Michal Votruba, a Director for Life Sciences for the RSJ/Gradus Fund, subsequently joined our Board on July 30, 2015. (2) Member of the Board. (3) Thomas Tierney is a trustee of the Tierney Family Trust. Mr. Tierney originally joined the Board in February 25, 2013 and served as Chairman of the Board from March 26, 2013 till May 22, 2015 when he resigned from the Board. On September 29, 2016 Mr. Tierney rejoined the Board. The Tierney Family Trust is a greater than 5% shareholder of the Company. (4) Robert Follman is a trustee of the Follman Family Trust and is a member of the Board. (5) John Pappajohn is a member of the Board. He purchased $200,000 of Notes, which on September 6, 2015, were assigned to four accredited investors. Approximately $10,400 of interest was attributable to such transferred Notes, resulting in an aggregate of 42,084 shares being issued upon the Mandatory Conversion of such transferred Notes. (6) Mark & Jill Oman are the beneficial owners of Oman Ventures and were greater than 5% shareholders of the Company. (7) George Carpenter is the CEO of the Company. (8) Brandt Ventures was issued this note as part of the Company’s settlement of its litigation with Leonard Brandt and Brandt Ventures (refer to Note 9. Commitments and Contingent Liabilities). |
DERIVATIVE LIABILITIES
DERIVATIVE LIABILITIES | 12 Months Ended |
Sep. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE LIABILITIES | 4. DERIVATIVE LIABILITIES At September 30, 2015, the Notes totaled $3.0 million and the derivative liability value was determined to be $833,000. For the fiscal year ended September 30, 2015, gains on derivatives liabilities totaled $162,800. At September 30, 2016, all Notes had been converted to equity, and consequently, there were no derivative liabilities outstanding. For the fiscal year ended September 30, 2016, there was a derivative liability expense of $34,600. On December 23, 2015, the Company entered into the Second Amended Note & Warrant Agreement, with each of 16 accredited investors, pursuant to which (i) the aggregate principal amount of Notes available for issuance was increased from $3.0 million to up to $6.0 million, (ii) the maturity date of currently outstanding Notes was extended from March 21, 2016 to December 31, 2017; (iii) the time during which Notes may be issued was extended and (iv) certain warrants were issued to holders of both previously issued and newly issued Notes. Consequently, the existing notes totaling $3 million, plus $121,900 of accrued interest thereon, for an aggregate total debt of $3,121,900 was revalued on December 23, 2015, and on the prior trading day, December 22, 2015, to determine the impact on derivative valuation. On December 22, 2015, the derivative liability of the aggregate debt was determined to be $60,200, which resulted in a write down of $772,800 from the derivative liability balance of $833,000 at September 30, 2015, which resulted in a Gain on Derivative Liabilities of $772,800. On December 23, 2015, all the Notes were revalued with the maturity date extended to December 31, 2017. The derivative liability value was determined to be $1,022,400 and the offset was booked to other income as a Loss on Extinguishment of Debt, adjustment amount of $962,300. On June 30, 2016, the derivative liability of the issued notes was revalued; due to a lower stock price, the derivative valuation was reduced by $263,100. Pursuant to the Second Amended Note & Warrant Agreement, on December 23 and December 28, 2015, the Company issued to the two purchasers of December 2015 Notes in the aggregate principal amount of $1,000,000 of secured convertible promissory notes. Between February 23, 2016 and August 16, 2016, the Company issues a further 15 Notes to 10 investors in the aggregate principal amount of 2,000,000 of secured convertible promissory notes. The derivative liability created by the conversion feature of the notes upon origination was $1,079,800. On September 19, 2016, the Company entered into a Second Omnibus Amendment (the "Second Omnibus Amendment"), with a majority of over 80% of the noteholders, thereby amending: (i) the Notes, (ii) the Second Amended Note and Warrant Agreement, as amended and (iii) the Warrants. Pursuant to the Second Omnibus Amendment, the Company had the option, exercisable at any time after September 1, 2016, to mandatorily convert all Notes into shares of the Company's common stock at $5.00 per share. The Company exercised this Mandatory Conversion on September 19, 2016 and, on September 21, 2016, (i) converted the entire outstanding principal balance of $6,000,000, plus accrued interest of $317,000 on all of the Notes into 1,263,406 shares of the Company's common stock at a conversion price of $5.00 per share and (ii) cancelled all Warrants. Consequently, the existing notes totaling $6 million, plus $316,965 of accrued interest thereon, for an aggregate total debt of $6,316,965 was revalued on Monday, September 19, 2016, and on the prior trading day, Friday, September 16, 2016, to determine the impact on derivative valuations. On September 16, 2016, the derivative liability of the aggregate debt was determined to be $2,909,700, which resulted in an increase in the derivative liability of $1,070,500. After the modification of the notes following the Second Omnibus Amendment the derivative liability balance increased to $6,322,000 resulting in a further increase in derivative liability by $3,412,300. Upon the Mandatory Conversion of all the notes, which eliminated all the debt and consequently, the derivative liability was also eliminated; therefore the $6,322,000 derivative liability was booked as an extinguishment of debt. The range of Black-Scholes option-pricing model assumption inputs for all the valuation dates are in the table below: September 30, 2015 Low High Annual dividend yield — — Expected life (years) 2.5 5.00 Risk-free interest rate 0.56 % 1.81 % Expected volatility 191.05 % 273.10 % The following tables include a roll-forward of liabilities classified within Levels 1, 2 and 3: Level 1 Level 2 Level 3 Stock warrant and other derivative liabilities at September 30, 2014 $ - $ - $ 153,100 Change in fair value - - (153,100 ) Stock warrant and other derivative liabilities at September 30, 2015 833,000 Total derivative liabilities at September 30, 2015 $ - $ - $ 833,000 $3M of convertible debt prior to amendment 12/22/15 - - (772,800 ) $3M of convertible debt as amended 12/23/15 - - 962,300 Change in fair value as of 06/30/26 - - (263,100 ) Derivative liabilities upon Note origination 12/23/15 through 8/16/16 - - 1,079,800 $6M of convertible debt prior to amendment 09/16/16 - - 1,070,500 $6M of convertible debt as amended 09/19/16 - - 3,412,300 Elimination of derivative liabilities on Note conversion to Common Stock - - (6,322,000 ) Total derivative liabilities at September 30, 2016 $ - $ - $ - The net changes in Derivative Liabilities for transactions which were booked to other income resulted in a net loss on derivative liabilities of $34,600 for the fiscal year ended September 30, 2016 and a net gain of $162,800 for the fiscal year ended September 2015. The net changes in Extinguishment of Debt for transactions which were booked to other income resulted in a net gain on extinguishment of debt of $572,300 for the fiscal year ended September 30, 2016 and a net loss of $630,000 for the fiscal year ended September 30, 2015. We had derivative liabilities of $0 and $833,000 as of September 30, 2016 and 2015 respectively. As at September 30, 2016, the Company did not identify any assets or liabilities that required presentation on the balance sheet at fair value in accordance with ASC 825-10. |
STOCKHOLDERS' DEFICIT
STOCKHOLDERS' DEFICIT | 12 Months Ended |
Sep. 30, 2016 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' DEFICIT | 5. STOCKHOLDERS’ DEFICIT Common and Preferred Stock At the Company’s annual stockholders meeting held on October 28, 2015, (“2015 Stockholders Meeting”) stockholders approved to amend the Company’s Articles of Incorporation to increase the number of shares of Common Stock authorized for issuance from 180,000,000 to 500,000,000 shares. Also at our 2015 Stockholder Meeting, our stockholders approved an amendment to amend the Company’s Charter for the purposes of effecting a reverse stock-split of our Common Stock at a later time and at any time until the next meeting of the Company’s stockholders which are entitled to vote on such actions, by a ratio of not less than 1-for-10 and not more than 1-for-200, and to authorize the Board of Directors (“Board”) to determine, at its discretion, the timing of the amendment and the specific ratio of the reverse stock-split. On August 24, 2016, the Board approved a 1-for-200 reverse stock-split which was effected on September 21, 2016. On September 20, 2016, the Company announced that on September 21, 2016 it had filed a Certificate of Amendment to its Amended and Restated Certificate of Incorporation (the “Amendment”) to (i) effect a 1-for-200 reverse stock-split (“reverse split”) of its common stock, par value $0.001 per share (the “Common Stock”), effective at 8:00 a.m. Eastern Time on September 21, 2016 (the “Effective Time”). Because the Amendment did not reduce the number of authorized shares of Common Stock, the effect of the Amendment was to increase the number of shares of Common Stock available for issuance relative to the number of shares issued and outstanding. At the Effective Time, immediately and without further action by the Company’s stockholders, every 200 shares of the Company’s Common Stock issued and outstanding immediately prior to the Effective Time were automatically combined into one share of Common Stock. In the event the reverse split left a stockholder with a fraction of a share, the number of shares due to that stockholder was rounded up. Further, any options, warrants and rights outstanding as of the Effective Time that were subject to adjustment were adjusted in accordance with the terms thereof. These adjustments included, without limitation, changes to the number of shares of Common Stock that would be obtained upon exercise or conversion of such securities, and changes to the applicable exercise or purchase price. As of September 30, 2016, the Company is authorized to issue 515,000,000 shares of stock, of which 500,000,000 are Common Stock; the remaining 15,000,000 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. As of September 30, 2016, 1,941,061 shares of Common Stock were issued and outstanding. No shares of preferred stock were issued or outstanding. On January 15, 2016, the Company engaged Dian Griesel International (DGI) for a 12 month long consulting agreement to provide public and investor relations services. The fee for the services is $5,000 per month, plus out-of-pocket expenses. As an origination fee for the agreement, the Board approved the issuance of 1,500 shares of common stock to Ms. Griesel on January 15, 2016. The aggregate value of these shares on the date of grant was $6,900. The agreement with DGI was cancelled in May, 2016. On April 5, 2016, the Board granted shares of Common Stock to Board members as follows: 5,000 shares to our Chairman, Dr. Smith, 2,500 shares to the Chairman of our Audit Committee, Mr. Harris and 1,250 shares to each of our remaining directors, Messrs. Pappajohn, Follman, McAdoo, Sassine and Votruba. Mr. Votruba’s shares are assigned to RSJ PE, the organization which he represents. These shares, which are fully vested, were valued at $5.10 per share, the closing price of the shares on the day of grant, and were valued in aggregate at $70,100. Also on April 5, 2016, the Board granted 5,000 shares of Common Stock to each of the two officers of the Company, George Carpenter, CEO and Paul Buck CFO. The shares vest as follows: 50% vested on the date of grant and the remaining 50% vest pro rata over twelve months starting on the date of grant. These shares were valued at $5.10 per share, the closing price of the shares on the date of grant, and were valued in aggregate at $51,000. 50% of the value was expensed on the date of grant and remaining 50%, $25,500, was booked as a prepaid expense and is being amortized evenly over the twelve month vesting period. At September 30, 2016, $12,800 had been amortized leaving $12,700 as a prepaid expense. On September 19, 2016, the Company entered into the Second Omnibus Amendment, with a majority of over 80% of the noteholders, thereby amending: (i) the Notes, (ii) the Second Amended Note and Warrant Agreement, as amended and (iii) the Warrants. Pursuant to the Second Omnibus Amendment, the Company had the option, exercisable at any time after September 1, 2016, to mandatorily convert all Notes into shares of the Company's common stock at $5.00 per share. The Company exercised the Mandatory Conversion on September 19, 2016 and, on September 21, 2016, (i) converted the entire outstanding principal balance of $6,000,000, plus accrued interest of $317,000 on all of the Notes into 1,263,406 shares of the Company's common stock at a conversion price of $5.00 per share and (ii) cancelled all Warrants (for details refer to Note 3. The Convertible Debt and Equity Financing) 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, 2016, 355 options were exercised and there were 2,224 options and 31 restricted shares outstanding under the amended 2006 Plan with a residual 729 shares which will not be issued as the 2006 Plan has been frozen. The outstanding options have exercise prices to purchase shares of Common Stock ranging from $720 to $6,540. 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 1 st st (refer to Note 11. Subsequent Events) On January 8, 2015, the Board granted an option to purchase 1,250 shares of its Common Stock pursuant to the 2012 Plan, at an exercise price of $50.00 per share to a consultant. The option vesting is contingent upon the achievement of agreed upon goals. On August 20, 2015, the Board approved an award of options to purchase 1,250 shares of Common Stock for each of the Company's directors, for an aggregate grant of 8,750 options. The options are exercisable at a price per share of $11.00, the closing price of the Company's common stock on the date of grant, and will vest pro-rata over 36 months. On August 20, 2015, the Board also approved an award of 3,750 shares of the Company's restricted Common Stock pursuant to the 2012 Plan to Dr. Smith in connection with her appointment as Chairman of the Company's Board. These shares, which are fully vested, were valued at $11.00 per share, the closing price of the shares on the day of grant, and were valued in aggregate at $41,300. The issuance of the shares was processed on October 30, 2015. On April 5, 2016, the Board granted options to purchase 7,250 shares of Common Stock under the 2012 Plan to staff members and options to purchase 1,000 shares of Common Stock to our consultant, DCA. These options vest pro-rata over 12 months starting on the date of grant. The grants of options to staff and consultant have an exercise price of $5.10 per share, which was the closing price on the OTC.QB of the Company’s Common Stock on the date of grant. The grant of these options is subject to shareholder approval of the expansion of the shares allocated for the 2012 Plan at the next Annual Meeting scheduled for November 1, 2016, ( refer to Note 11. Subsequent Events) On September 22, 2016, the Board granted options to purchase 144,000 shares of Common Stock under the 2012 Plan at an exercise price of $6.00 to certain directors and officers as follows: our Chairman Dr. Smith was granted options to purchase 40,000 shares of Common Stock which vest as follows: (a) 20% vested on the date of grant, (b) 20% vested upon receiving CMS approval to bill Medicare, (c) 20% will vest upon signing a healthcare system to use our PEER technology, (d) 20% will vest upon signing a multi-practitioner group to use our PEER technology, and (e) 20% will vest upon up-listing to an exchange in 1 year; our CEO, George Carpenter, was granted options to purchase 32,000 shares of Common Stock which vest as follows: (a) 25% vested on the date of grant, (b) 25% vested on the date that we received CNS approval to bill Medicare, (c) 25% will vest upon signing a healthcare system to use our PEER technology and (d) 25% will vest upon signing a multi-practitioner group to use our PEER technology; our CFO, Paul Buck, was granted options to purchase 32,000 shares of Common Stock which vest as follows: (a) 25% vested on the date of grant, (b) 25% vested on the date that we received CNS approval to bill Medicare, (c) 25% will vest upon signing a healthcare system to use our PEER technology and (d) 25% will vest upon up-listing to an exchange in 1 year; two of our outgoing directors, Mr. McAdoo and Mr. Sassine, were each granted 20,000 fully vested options to purchase Common Stock. On September 22, 2016, pursuant to the 2012 Plan, the Board granted shares of Common Stock to Board members as follows: 40,000 shares to our Chairman, Dr. Smith, and 20,000 shares to each of our directors, Messrs. Pappajohn, Follman, Harris and Votruba. Mr. Votruba’s shares are assigned to RSJ PE, the organization which he represents. These shares, which are fully vested, were valued at $6.00 per share, the closing price of the shares on the day of grant, and were valued in aggregate at $720,000. Our outgoing directors, Mr. McAdoo and Mr. Sassine were offered stock, however, elected to each receive 20,000 fully vested options to purchase shares of Common Stock. On September 29, 2016, pursuant to the 2012 Plan, the Board granted 20,000 fully vested shares of Common Stock to Thomas Tierney who rejoined the Board. These shares were valued at $6.00 per share, the closing price of the shares on the day of grant, and were valued in aggregate at $120,000. The stock grants on September 22 and 29, 2016, which combined are valued in aggregate at $840,000 are being amortized over the 12-month period that directors are anticipated to serve until the next annual meeting. As of September 30, 2016, $70,000, representing one months of amortization, had been expensed leaving $770,000 as a prepaid expense. As of September 30, 2016, no options were exercised and options to purchase 220,896 shares of Common Stock were outstanding and 143,750 restricted shares had been issued under the 2012 Option Plan, as amended, leaving 135,354 shares available to be awarded ( refer to Note 11. Subsequent Events). 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 statements of operations for the year ended September 30, 2016 and 2015 is as follows: September 30 2016 2015 Research $ 41,600 $ 41,600 Product Development 47,900 52,300 Sales and marketing 30,200 81,600 General and administrative 638,700 66,200 Total $ 758,400 $ 241,700 Total unrecognized compensation as of September 30, 2016 amounted to $104,400. A summary of stock option activity is as follows: Number of Weighted Outstanding at September 30, 2014 62,120 $ 168.00 Granted 10,000 16.00 Exercised - - Forfeited (937 ) 22.00 Outstanding at September 30, 2015 71,183 $ 150.00 Granted 152,250 5.95 Exercised - - Forfeited (313 ) 3.60 Outstanding at September 30, 2016 223,120 $ 50.98 Following is a summary of the status of options outstanding at September 30, 2016: Exercise Number Expiration Weighted Average 2012 Omnibus Incentive Compensation Plan $ 5.10 8,250 04/2026 $ 5.10 6.00 144,000 09/2026 6.00 11.00 8,750 08/2025 11.00 9.44 43,978 12/2022 – 01/2023 9.44 50.00 13,577 03/2023 – 01/2025 50.00 52.00 2,125 07/2024 52.00 600.00 216 03/2022 600.00 2006 Stock Incentive Plan $ 1,800.00 25 11/2016 $ 1,800.00 2,400.00 144 03/2019 – 07/2020 2,400.00 2,820.00 51 03/2021 2,820.00 3,060.00 7 09/2018 3,060.00 3,300.00 1,325 03/2020 3,300.00 4,800.00 24 12/2017 4,800.00 5,340.00 162 09/2017 5,340.00 5,760.00 61 04/2018 5,760.00 6,540.00 425 08/2017 6,540.00 $ Total 223,120 Average $ 50.98 Warrants to Purchase Common Stock The warrant activity for the period starting October 1, 2014, through September 30, 2016, is described as follows: Number of Weighted Outstanding at September 30, 2014 4,078 $ 614.00 Granted 1,000 50.00 Exercised — — Expired (1,166 ) 1,828.00 Outstanding at September 30, 2015 3,912 $ 106.00 Granted 604,000 (2) 10.00 Exercised — — Expired (752 ) 200.00 Forfeited (600,000 )(2) 10.00 Outstanding at September 30, 2016 7,160 $ 50.41 Following is a summary of the status of warrants outstanding at September 30, 2016: Exercise Number Expiration Weighted Average $ 9.44 191 03/2018 $ 9.44 10.00 4,000 (1) 06/2021 10.00 50.00 1,161 03/2017 – 07/2017 50.00 55.00 1,620 06/2018 – 03/2019 55.00 200.00 104 12/2016 – 01/2017 200.00 1,800.00 84 07/2017 1,800.00 $ Total 7,160 $ 50.41 (1) On June 10, 2016, we issued two warrants, pursuant to a Finder’s Fee Agreement with Maxim Group LLC, to purchase in aggregate 4,000 shares of Common Stock following the introduction of an accredited investor who entered into a Second Amended Note and Warrant Purchase Agreement in the principal amount of $200,000. Each warrant is exercisable, in whole or in part, during the period beginning on the date of its issuance, and ending on the earlier of (i) December 31, 2020 and (ii) the date that is forty-five (45) days following the date on which the daily closing price of shares of the Company's Common Stock quoted on the OTCQB Venture Marketplace (or other bulletin board or exchange on which the Company's Common Stock is traded or listed) exceeds $50.00 for at least ten (10) consecutive trading days. In connection therewith, the Company will promptly notify the Note Warrant holders in the event that the daily closing price of the Company's shares of Common Stock exceeds $50.00 for at least ten (10) consecutive trading days. Pursuant to the Finder’s Fee Agreement, Maxim was also paid $20,000 cash for their efforts. (2) Pursuant to the Second Amended Note & Warrant Agreement, dated December 23, 2015, the Company issued an aggregate 600,000 warrants with same terms as the warrants mentioned in (1) above. On September 19, 2016, the Company entered into the Second Omnibus Amendment, with a majority of over 80% of the noteholders, thereby amending: (i) the Notes, (ii) the Second Amended Note and Warrant Agreement, as amended and (iii) the Warrants. Subsequently, the Company exercised the Mandatory Conversion on September 19, 2016, and, on September 21, 2016, (i) converted the entire outstanding principal balance of $6,000,000, plus accrued interest of $317,000 on all of the Notes into 1,263,406 shares of the Company's Common Stock at a conversion price of $5.00 per share and (ii) cancelled all 600,000 issued and outstanding warrants associated with the Notes. (refer to Note 3. Convertible Debt and Equity Financing). At September 30, 2017, there were warrants outstanding to purchase 7,160 shares of the Company’s Common Stock. The exercise prices of the outstanding warrants range from $9.44 to $1,800 with a weighted average exercise price of $50.41. The warrants expire at various times starting 2016 through 2021. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 6. INCOME TAXES The Company accounts for income taxes under the liability method. Deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities, and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance to reduce the Company’s deferred tax assets to their estimated realizable value. Reconciliations 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 each of the fiscal years ended September 30: 2016 2015 Federal income tax (benefit) at statutory rates (34.0 )% (34.0 )% Stock-based compensation (1.35 )% (0.4 )% Extinguishment of debt - % - % Change in valuation allowance (79.92 )% (16 )% True-ups and other adjustments (47.26 )% (7.62 )% State tax benefit (0.02 )% (5.98 )% 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, 2016 and 2015: 2016 2015 Deferred income tax assets: Net operating loss carryforward $ 17,492,350 $ 13,718,300 Deferred interest, consulting and compensation liabilities 3,974,100 3,596,900 Amortization - - Deferred income tax assets – other 5,486 5,600 21,471,936 17,320,800 Deferred income tax liabilities—other - - Deferred income tax asset—net before valuation allowance 21,471,936 17,320,800 Valuation allowance (21,471,936 ) (17,320,800 ) Deferred income tax asset—net $ - $ - Current and non-current deferred taxes have been recorded on a net basis in the accompanying balance sheet. As of September 30, 2016, the Company had Federal net operating loss carryforwards of approximately $45.7 million and State net operating loss carryforwards of approximately $34.1 million. Both the Federal and State net operating loss carryforwards will begin to expire in 2022 and 2017 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. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Sep. 30, 2016 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | 7. RELATED PARTY TRANSACTIONS Termination of Governance Agreements On March 28, 2015, the Company entered into a separate termination agreement with each of Equity Dynamics and SAIL, in each case to immediately terminate the respective November 28, 2012 governance agreement (collectively, the “Governance Agreements”) that the Company had entered into with each of Equity Dynamics and SAIL (collectively, the “Termination Agreements”). Equity Dynamics is an entity owned by John Pappajohn, a director of the Company, and SAIL is one of the Company’s principal stockholders of which former director, Walter Schindler, was the managing partner. Pursuant to the Governance Agreements, the Company had agreed, subject to providing required notice to stockholders, to appoint four individuals nominated by Equity Dynamics and three individuals nominated by SAIL to the Company’s Board, and to create vacancies for that purpose, if necessary. In addition, at each meeting of stockholders of the Company at which directors were nominated and elected, the Company had agreed to nominate for election the four designees of Equity Dynamics and the three designees of SAIL, and further had agreed to take all necessary action to support such election, and to oppose any challenges to such designees. The Governance Agreements also restricted the Company’s ability to increase the number of directors to more than seven without the consent of Equity Dynamics and SAIL. Pursuant to the Termination Agreements, the Governance Agreements were terminated in their entirety as of March 28, 2015, and are of no further force or effect. Note Purchase Agreement, Notes and Omnibus Amendment and Second Amendment Note & Warrant Agreement Between September 22, 2014, and August 16, 2016, the Company raised an aggregate principal amount $6 million in Note purchase agreements of which $5.3 million was purchased by directors, an officer and greater than 5% shareholders of the Company. For details of the transactions please refer to Note 3. Convertible Debt and Equity Financings Director and Officer Indemnification Agreement On December 7, 2015, the Company entered into indemnification agreements with each of its Directors and Executive Officers. The agreements provide for, among other things: the indemnification of these Directors and Officers by the Company to the fullest extent permitted by the laws of the State of Delaware; the advancement to such persons by the Company of certain expenses; related procedures and presumptions of entitlement; and other related matters. Transactions with John Pappajohn, Director On September 22, 2014, March 18, 2015, June 2, 2015 and September 15, 2015, Mr. Pappajohn purchased four Notes for $200,000, $100,000, $100,000 and $100,000 respectively. On September 6, 2015, Mr. Pappajohn irrevocably assigned $200,000 in principal of his September 2014 Notes to four outside parties in the amount of $50,000 each. On May 13, 2016, and June 27, 2016, Mr. Pappajohn gifted in aggregate 32,692 of his shares of Common Stock to 12 outside parties including family and friends. The transfer of these shares was completed on September 16, 2016. Transactions with George Carpenter, President and Chief Executive Officer On September 25, 2013, the Board approved a consulting agreement effective May 1, 2013, for marketing services provided by Decision Calculus Associates, an entity operated by Mr. Carpenter’s spouse, Jill Carpenter. For the period from May 1, 2013 through to March 25, 2015, we had paid $280,000 to Decision Calculus Associates ("DCA"). For the period from March through July of 2015, DCA was not engaged by the Company. Effective August 2015 DCA has been re-engaged at a fee of $10,000 per month. From August 2015 through September 30, 2016, DCA has been paid $130,000 with a further $10,000 balance due in accounts payable. Transactions with the SAIL Capital Partners and SAIL Holdings Mr. Schindler served as a Director between November 29, 2012 and June 11, 2015, and was the Managing Partner of SAIL Capital Partners, which was a greater than 5% stockholder of the Company, and is the general partner of all the SAIL entities except for SAIL Holding, LLC which is controlled directly by Mr. Schindler. On January 5, 2015, the Company entered into a three-month long consulting engagement with Dr. Eric Warner, Managing Partner, Europe, Middle East & Africa, SAIL Capital Partners Ltd. The objectives of the engagement include the establishment of a revenue-generating licensing agreement in the United Kingdom (U.K.) and initiation of a pilot study of our PEER Online technology. Dr. Warner has been paid $10,000 per month for a total of $30,000. On January 8, 2015, the Board granted Dr. Warner an option to purchase 250,000 shares of Common Stock with an exercise price of $0.25 per share; the option vesting is conditioned on the execution of a licensing agreement and a PEER Online pilot study. The fair value of the option, which was determined using the Black-Scholes model, was $28,300 and was expensed over the term of the engagement. Transactions with Tierney Family Trust, Greater than 5% Stockholder Mr. Tierney rejoined the Board as a Director on September 29, 2016. Previously, Mr. Tierney resigned from the Board on May 22, 2015, had served on the Board since February 2013, and had served as Chairman of the Board between March 2013 and the date of his resignation. Mr. Tierney is a trustee of the Thomas T. and Elizabeth C. Tierney Family Trust (the "Tierney Family Trust"), which is a greater than 5% stockholder. Transactions with RSJ PE, Greater than 5% Stockholder Michal Votruba joined our Board on July 30, 2015. Mr. Votruba is a director of RSJ PE, which acted as the lead investor in the private placement financing of September 2014 Notes. |
LOSS PER SHARE
LOSS PER SHARE | 12 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share [Abstract] | |
LOSS PER SHARE | 8. LOSS PER SHARE In accordance with ASC 260-10 (formerly SFAS 128, “Computation of Earnings Per Share”), basic net income (loss) per share is computed by dividing the net income (loss) to common stockholders for the period by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share is computed by dividing the net income (loss) for the period by the weighted average number of common and dilutive common equivalent shares outstanding during the period. For the fiscal years ended September 30, 2016 and 2015, the Company has excluded all common equivalent shares from the calculation of diluted net loss per share as such securities are anti-dilutive. A summary of the net income (loss) and shares used to compute net income (loss) per share for the fiscal years ended September 30, 2016 and 2015 is as follows: 2016 2015 Net Loss for computation of basic and diluted net loss per share: Net loss $ (5,940,900 ) $ (3,379,400 ) Basic and Diluted net loss per share: Basic net loss per share $ (9.26 ) $ (6.64 ) Basic and Diluted weighted average shares outstanding 641,844 509,066 Anti-dilutive common equivalent shares not included in the computation of dilutive net loss per share: Convertible debt 1,441,344 50,348 Warrants 3,484 4,132 Options 74,588 63,634 |
COMMITMENTS AND CONTINGENT LIAB
COMMITMENTS AND CONTINGENT LIABILITIES | 12 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENT LIABILITIES | 9. COMMITMENTS AND CONTINGENT LIABILITIES Litigation From time to time, the Company may be involved in litigation relating to claims arising out of the Company’s operations in the ordinary course of business. Other than as set forth below, 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. Since June 2009, the Company has been involved in litigation against Leonard J. Brandt, a stockholder, former Director and the Company’s former Chief Executive Officer (“Brandt”) in the Delaware Chancery Court, the Supreme Court of the State of Delaware, the United States District Court for the Central District of California and the Superior Court for the State of California, Orange County. Other than current actions described below, the Company has prevailed in all actions or the matters have been dismissed. On April 11, 2011, Brandt and his family business partnership Brandt Ventures, GP, filed an action in the Superior Court for the State of California, Orange County against the Company, one of its stockholders, SAIL Venture Partner, LP, and Mr. David Jones, a former member of the Board, alleging breach of a promissory note agreement entered into by Brandt Ventures, GP and the Company and alleging that Mr. Brandt was wrongfully terminated as Chief Executive Officer in April, 2009. The Company was served with a summons and complaint in the action on July 19, 2011. On November 1, 2011, Mr. Brandt and Brandt Ventures filed an amended complaint amending their claims and adding new claims against the same parties. On March 12, 2012, the court sustained demurrers to certain of the counts against each defendant. On March 22, 2012, the plaintiffs filed a second amended complaint modifying certain of their claims, but did not add new claims. On February 6, 2013, the plaintiffs moved for leave to amend the second amended complaint and file a third amended complaint. On March 6, 2013, the Court granted leave to amend, but awarded fees and costs for the defendants to again make dispositive motions. The third amended complaint adds a claim for breach of the promissory note and seeks to foreclose on the collateral securing the note obligation. In addition, Mr. Brandt is seeking approximately $170,000 of severance and compensatory and punitive damages in connection with his termination. The plaintiffs also seek rescission of a $250,000 loan made by Brandt Ventures, GP to the Company which was converted into Common Stock in accordance with its terms and restitution of the loan amount. A trial date had originally been set for May 2014. However, plaintiffs’ counsel requested a continuance until August 2014, to which the Company agreed. On June 18, 2014, at plaintiffs’ counsel’s request, the Company entered into a Standstill and Tolling Agreement, whereby the parties agreed to seek a stay of the litigation and plaintiffs agreed to provide the Company with an executed dismissal of all the claims without prejudice, with the ability to re-file the third amended complaint, without change, on or before June 18, 2015. The Company had the right to file the executed stipulation of dismissal if the Court lifted the stay. On May 7, 2015, the parties agreed to continue the Standstill and Tolling Agreement until May 6, 2016, on the same terms. On May 12, 2015, the Court agreed to stay the case for another six months. On November 4, 2015 the Court lifted the stay, and set the case for trial on March 7, 2016. On February 3, 2016, the Company filed the executed stipulation of dismissal, thereby ending the current action in Orange County which was captioned Leonard J. Brandt and Brandt Ventures, GP v. CNS Response, Inc., Sail Venture Partners and David Jones, case no. 30-2011-00465655-CU-WT-CJC. On August 8, 2016, the Company entered into a Settlement Agreement and Mutual General Release (“Settlement Agreement”) with Leonard Brandt, Brandt Ventures, GP. The Settlement Agreement is a mutual release of all complaints including actions against SAIL Venture Partners (SAIL) and David Jones. The Settlement Agreement was approved by the Board on August 15, 2016. The Settlement Agreement terms included a cash payment of $225,000 paid on August 16, 2016, along with the issuance of a $50,000 Note convertible into 5,000 shares of Common Stock at $10.00 per share and a Note Warrant for the purchase of 5,000 shares at $10.00 per share. The terms of the Note and the Warrant were substantially the same as the Notes and Warrants issued pursuant to the Second Amended Note and Warrant Purchase Agreement described in Note 3. Convertible Debt and Equity Financing On September 19, 2016, the Company entered into a Second Omnibus Amendment, with a majority of over 80% of the noteholders, thereby amending: (i) the Notes, (ii) the Second Amended Note and Warrant Agreement, as amended and (iii) the Warrants. Pursuant to the Second Omnibus Amendment, the Company had the option, exercisable at any time after September 1, 2016, to mandatorily convert all Notes into shares of the Company's common stock at $5.00 per share and cancel all Warrants. The Company exercised the its Mandatory Conversion on September 19, 2016 and, on September 21, 2016, converted the entire outstanding principal balance of $6,000,000, plus accrued interest of $317,000 on all of the Notes into 1,263,406 shares of the Company's common stock at a conversion price of $5.00 per share and (ii) cancelled all Warrants. The $50,000 Note issued to Brandt Ventures and interest on the Note was converted into 10,047 shares of Common Stock. (refer to Note 3. Convertible Debt and Equity Financing). Lease Commitments The Company had its Headquarters and Neurometric Services business premises located at 85 Enterprise, Aliso Viejo, California 92656 from February 2010 through January 2016. The Company relocated its new Headquarters and Neurometric Services business to 26522 La Alameda, Suite 290, Mission Viejo, CA 92691, which is 2,290 sqft in size. We signed a 24 month lease for our new location on January 22, 2016. The lease period commenced on February 1, 2016 and terminates on January 31, 2018. The rent for the first four months is $2,290 per month, which is abated by 50%; for months 5 through 12 the rent increases to $4,580 per month and for the final 12 months the rent will increase by 5% to $4,809 per month. On February 2, 2016, we signed a 23.5 month lease for 1,092 sqft of office space to house our EEG testing center. The premises are located at 25201 Paseo De Alicia, Laguna Hills, CA 92653. The lease period commenced on February 15, 2016 and terminates on January 31, 2018. The rent for first half month of February was prorated at $928.20; for the next 11 months the rent is $1,856 per month, and for the remaining twelve months the rent will increase by 3% to $1,911 per month. The landlord abated the rent for March 2016. The Company incurred rent expense from operations of $64,900 and $48,900 for the fiscal years ended September 30, 2016 and 2015, respectively. On April 24, 2013, we entered into a financial lease to acquire additional EEG equipment costing $8,900. The term of the lease is 36 months ending May 2016 with a monthly payment of $325. As of June 30, 2016 the lease was paid off. On January 20, 2016, we entered into a financial lease to acquire a Canon Copier costing $6,700. The term of the lease is 60 months ending January 2021 with a monthly payment of $135. As of September 30, 2016 the remaining principal lease obligation is $5,900, of which $1,200 in fiscal 2017 with $1,400 due per year for the years 2018-2020; and $500 due in 2021. Payments due by period Contractual Obligations Total Less 1 to 3 years 3 to More Operating Lease Obligations $ 99,900 $ 73,100 $ 26,800 - - Capital Lease Obligations 5,900 1,200 4,200 500 - Total $ 105,800 $ 74,300 $ 31,000 500 - |
SIGNIFICANT CUSTOMERS
SIGNIFICANT CUSTOMERS | 12 Months Ended |
Sep. 30, 2016 | |
Risks and Uncertainties [Abstract] | |
SIGNIFICANT CUSTOMERS | 10. SIGNIFICANT CUSTOMERS For the fiscal year ended September 30, 2016, four customers accounted for 55% of Neurometric Services revenue and three customers accounted for 69% of accounts receivable at September 30, 2016. For the fiscal year ended September 30, 2015, five customers accounted for 58% of Neurometric Services revenue and three customers accounted for 48% of accounts receivable at September 30, 2015. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Sep. 30, 2016 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 11. SUBSEQUENT EVENTS Annual Meeting At the 2016 Annual Meeting of Stockholders of the Company, held on November 1, 2016 (the “2016 Annual Meeting”), the holders of the Company’s common stock voted to elect each of the following directors to serve until the next annual meeting and until their successor is elected and qualified: Robin Smith M.D, John Pappajohn, Robert Follman, Thomas Tierney, Geoffrey Harris and Michal Votruba. At the 2016 Annual Meeting, the Company’s stockholders also voted to: A. approve an amendment to the Company’s 2012 Omnibus Incentive Compensation Plan (the "2012 Plan") to: (i) increase the total number of shares of Common Stock available for grant under the 2012 Plan from 75,000 shares to an aggregate of 500,000 shares, (ii) add an "evergreen" provision which, on January 1 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; B. approve the compensation of our named executive officers; and C. ratify the selection by the Audit Committee of Anton & Chia, LLP as our independent registered accounting firm for the fiscal year ending September 30, 2016. Option Grants On October 2, 2016, the Compensation Committee of the Board granted options to purchase 102,000 shares of the Company’s Common Stock under the 2012 Plan to staff members. These options vest pro-rata over 12 months starting on the date of grant. The grants of options to staff are valued $6.00 per share, which was the closing price on the OTC.QB of the Company’s Common Stock on the date of grant. Private Placement of Common Stock On November 30, 2016, the Company sold and issued an aggregate of 160,000 shares of its Common Stock, at a per share price of $6.25, in a private placement to six accredited investors, for which it received gross cash proceeds to the Company of $1,000,000. Three of the six accredited investors were affiliates who represented 50% of the cash proceeds as follows: Dr. Robin Smith, our Chairman of the Board purchased 16,000 shares for $100,000; John Pappajohn, a member of the Board, purchased 32,000 shares for $200,000; and the Tierney Family Trust, of which our Board member, Thomas Tierney is a trustee, purchased 32,000 shares for $200,000. On December 21, 2016, the Company sold and issued a further 48,000 shares of its Common Stock, at a per share price of $6.25, in a private placement to four accredited investors, for which it received gross cash proceeds to the Company of $300,000. The private placement was made pursuant to an exemption from registration afforded by Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”), and Regulation D thereunder. The Aspire Capital Equity Line of Credit On December 6, 2016, the Company, entered into a common stock purchase agreement (the “Purchase Agreement”) with Aspire Capital Fund, LLC, an Illinois limited liability company (“Aspire Capital”) which provides that, upon the terms and subject to the conditions and limitations set forth therein, 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 Purchase Agreement. Concurrently with entering into the Purchase Agreement, the Company also entered into a registration rights agreement with Aspire Capital (the “Registration Rights Agreement”), in which the Company agreed to file one or more registration statements, as permissible and necessary to register under the Securities Act of 1933, as amended (the “Securities Act”), registering the sale of the shares of the Company’s common stock that have been and may be issued to Aspire Capital under the Purchase Agreement. Under the Purchase Agreement, after the Securities and Exchange Commission (the “SEC”) has declared effective the registration statement referred to above, 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 (each, a “Purchase Notice”), directing Aspire Capital (as principal) to purchase up to 50,000 shares of the Company’s common stock per business day, up to $10.0 million of the Company’s common stock in the aggregate at a per share price (the “Purchase Price”) equal to the lesser of: 1) the lowest sale price of the Company’s common stock on the purchase date; or 2) the arithmetic average of the three (3) lowest closing sale prices for the Company’s 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 the Company's stock is 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 the Company’s 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 the Company’s 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 Purchase Agreement, so long as the most recent purchase has been completed. The Purchase Agreement provides that the Company and Aspire Capital shall not effect any sales under the 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 Purchase Agreement, and the Company will control the timing and amount of sales of the Company’s 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 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 Purchase Agreement. In consideration for entering into the Purchase Agreement, concurrently with the execution of the Purchase Agreement, the Company issued to Aspire Capital 80,000 shares of the Company’s common stock (the “Commitment Shares”). The 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 the Company’s common stock during any time prior to the termination of the Purchase Agreement. Any proceeds from the Company receives under the Purchase Agreement are expected to be used for working capital and general corporate purposes. The issuance of the Commitment Shares and all other shares of common stock that may be issued from time to time to Aspire Capital under the Purchase Agreement are 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. |
SUMMARY OF SIGNIFICANT ACCOUN18
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | 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 audited consolidated financial statements include the accounts of the Company, an inactive parent company, and its wholly owned subsidiaries CNS California and NTC, which is a dormant company. There were no intercompany transactions to be eliminated on consolidation. |
Use of 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 | Cash The Company deposits its cash with major financial institutions and may at times exceed the federally insured limit of $250,000. At September 30, 2016 cash exceeds the federally insured limit by $68,200. 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. |
Derivative Liabilities | Derivative Liabilities The Company evaluates all of its agreements to determine if such instruments have derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the consolidated statements of operations. For stock-based derivative financial instruments, the Company uses a weighted average Black-Scholes option pricing model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. As of September 30, 2016, the Company did not have any derivative financial instruments. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments ASC 825-10 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 Company adopted ASC 820-10 on January 1, 2008. ASC 820-10 defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The three levels are defined as follows: • Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets; • Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments; and • Level 3 inputs to the valuation methodology are unobservable and significant to the fair value. The Company used Level 3 inputs for its valuation methodology for the conversion option liability in determining the fair value using the Black-Scholes option-pricing model with the following assumption inputs: The range of Black-Scholes option-pricing model assumption inputs for all the valuation dates are in the table below: September 30, 2015 through to September 30, 2016 Low High Annual dividend yield — — Expected life (years) 2.5 5.00 Risk-free interest rate 0.56 % 1.81 % Expected volatility 191.05 % 273.10 % The a detailed roll-forward of derivative liabilities classified as Level 1,2 or 3, please refer to the table in Note 4, Derivative Liabilities. The net changes in Derivative Liabilities for transactions which were booked to other income resulted in a net loss on derivative liabilities of $34,600 for the fiscal year ended September 30, 2016 and a net gain of $162,800 for the fiscal year ended September 30, 2015. The net changes in Extinguishment of Debt for transactions which were booked to other income resulted in a net gain on extinguishment of debt of $572,300 for the fiscal year ended September 30, 2016 and a net loss of $630,000 for the fiscal year ended September 30, 2015. We had derivative liabilities of $0 and $833,000 as of September 30, 2016 and 2015 respectively. As at September 30, 2016, the Company did not identify any assets or liabilities that required presentation on the balance sheet at fair value in accordance with ASC 825-10. |
Accounts Receivable | 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, 2016 and 2015 are $1,200 and $1,200 respectively. |
Furniture and Equipment | Furniture and Equipment Furniture and Equipment, which are recorded at cost, consist of office furniture, equipment and purchased intellectual property which are depreciated, or amortized in the case of the intellectual property, over their estimated useful life on a straight-line basis. The useful life of these assets is estimated to be between three and ten years. Depreciation and amortization for the years ended September 30, 2016 and 2015 was $7,200 and $7,600 respectively. Accumulated depreciation and amortization at September 30, 2016 and 2015 was $76,900 and $82,600, respectively. |
Long-Lived Assets | Long-Lived Assets As required by ASC 350-30 (formerly SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets The Company adopted Accounting standards update (“ASU”) 2012-02, Intangibles—Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment. The new guidance is intended to reduce the complexity and costs of the annual impairment test for indefinite-lived intangible assets by allowing companies to make a qualitative evaluation about the likelihood of impairment to determine whether it should perform a quantitative impairment test. |
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 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, 2016, the Company had $78,400 in capitalized software development costs all of which was capitalized during the fiscal year ended September 30, 2016. The Company started amortizing the software over its estimated economic life once it was placed into service during September 2016. Consequently, for the fiscal year ended September 30, 2016, the capitalized software was amortized for one month totaling $2,200 in amortization expense. On November 23, 2011, the Company acquired intellectual property in the form of transcranial magnetic stimulation (TMS) biomarkers at a cost of $21,200 which was recorded at cost and is being amortized over its estimated useful life of 10 years on a straight-line basis. Amortization for the fiscal years ended September 30, 2016 and 2015 was $2,100 for both periods. Accumulated depreciation on the intellectual property at was $10,200 and $8,100 at the fiscal years ended September 30, 2016 and 2015 respectively. |
Accounts Payable | Ac ts Payable Accounts payable consists of trade payables of which $219,200 and $536,400 are for legal services at September 30, 2016 and 2015 respectively. We had accounts payable write-backs of $306,700 and $21,900 for the years ended September 30, 2016 and 2015 respectively. These were for long held-debts which have been in dispute and there has been no collection activity for five years. |
Accrued Compensation | Accrued Compensation Accrued compensation consists of accrued vacation pay, accrued bonuses granted by the Board but not paid, and accrued pay due to former staff members. The balance also includes $125,400 accrued for two managers and $186,200 accrued for two officers who voluntarily reduced the cash portion of their salaries to help the Company conserve funds from February through July 2015. Accrued compensation also includes an accrual of $250,000 for a tax gross-up on stock awarded to the Chairman of the Company. |
Deferred Revenue | Deferred Revenue Deferred revenue represents revenue collected but not earned as of September 30, 2016 or 2015. 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 a family member, the cost of which is not covered by other sources. These deferred revenue grant funds total $45,900 as of September 30, 2016 and 2015. |
Revenues | Revenues The Company recognizes revenue on services, being the delivery of PEER Reports to medical providers, in accordance with the Financial Accounting Standards Board (“FASB”) ASC No. 605, “Revenue Recognition.” In all cases, revenue is recognized when we have persuasive evidence of an arrangement, a determinable fee, when collection is considered to be reasonable assured and the services are delivered. |
Research and Development Expenses | Research and Development Expenses The Company charges all research and development expenses to operations as incurred. |
Advertising Expenses | Advertising Expenses The Company charges all advertising expenses to operations as incurred. For the years ended September 30, 2016 and 2015 advertising expenses were $148,600 and $24,000 respectively. |
Stock-Based Compensation | Stock-Based Compensation The Company has adopted ASC 718-20 and related interpretations which establish the accounting for equity instruments exchanged for employee services. Under ASC 718-20, share-based compensation cost to option grantee, being employees, directors and consultants, and is measured at the grant date based on the calculated fair value of the award. The expense is recognized over the option grantees’ requisite service period, generally the vesting period of the award. |
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. As a result of the implementation of certain provisions of ASC 740, Income Taxes 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. In addition, we did not record a cumulative effect adjustment related to the adoption of 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. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) ASC 220-10 requires disclosure of all components of comprehensive income (loss) on an annual and interim basis. Comprehensive income (loss) is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. The Company’s comprehensive income (loss) is the same as its reported net income (loss) for the years ended September 30, 2016 and 2015. |
Earnings (Loss) per Share | Earnings (Loss) per Share Basic earnings (loss) per share are computed by dividing income (loss) available to common stockholders 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. |
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 April 2015, the FASB issued Accounting Standards Update (“ASU”) No. 2015-03 is to simplify presentation of debt issuance costs, the amendments in this Update would require that debt issuance costs be presented in the balance sheet as a direct deduction from the carrying amount of debt liability, consistent with debt discounts or premiums. The recognition and measurement guidance for debt issuance costs would not be affected by the amendments in this Update. The amendments in this ASU are effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted, including adoption in an interim period. The Company does not expect the adoption of the standard update to have a material impact on its consolidated financial position or results of operations. |
SUMMARY OF SIGNIFICANT ACCOUN19
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Schedule of fair value inputs liabilities | The range of Black-Scholes option-pricing model assumption inputs for all the valuation dates are in the table below: September 30, 2015 Low High Annual dividend yield — — Expected life (years) 2.5 5.00 Risk-free interest rate 0.56 % 1.81 % Expected volatility 191.05 % 273.10 % |
CONVERTIBLE DEBT AND EQUITY F20
CONVERTIBLE DEBT AND EQUITY FINANCINGS (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of convertable debt | The below table sets forth details regarding the shares issued to certain related parties upon the Company's exercise of the Mandatory Conversion: Note Issuance and Conversion Table: Note Holder Principal Amount 2015 Carrying Value Accrued Interest Shares issued on Original Note Purchase Agreement Note Date Range Sept 22, 2014 to July 20, 2015 RSJ Private Equity (1) $ 750,000 $ 21,300 $ 728,700 $ 76,200 165,246 John Pappajohn (2) 200,000 8,100 191,900 20,400 44,089 John Pappajohn (5) 200,000 3,000 197,000 14,200 42,820 Tierney Family Trust (3) 540,000 16,000 524,000 46,000 117,199 Follman Family Trust (4) 100,000 3,000 97,000 7,700 21,538 Oman Ventures (6) 200,000 8,100 191,900 20,400 44,089 4 Accredited Investors 300,000 9,100 290,900 30,600 66,112 Subtotal for First Round $ 2,290,000 $ 68,600 $ 2,221,400 Omnibus Amendment Sept 14, 2015 Note Date Range Sept 14, 2015 to September 24, 2015 RSJ Private Equity (1) $ 350,000 $ 85,400 $ 264,600 17,300 73,462 Robin Smith (2) 60,000 7,100 52,900 3,100 12,611 John Pappajohn (2) 100,000 24,400 75,600 5,100 21,015 Follman Family Trust (4) 150,000 36,500 113,500 7,600 31,522 2 Accredited Investors 50,000 12,200 37,800 2,500 10,508 Subtotal for Second Round $ 710,000 $ 165,600 $ 544,400 Balances at September 30, 2015 $ 3,000,000 $ 234,200 $ 2,765,800 Second Amended Note December 23 & 28, 2015 RSJ Private Equity (1) $ 750,000 27,300 155,465 John Pappajohn (2) 250,000 9,300 51,856 Subtotal for Third Round $ 1,000,000 Note Date Range Feb 23, 2016 to August 16, 2016 RSJ Private Equity (1) $ 250,000 1,400 50,281 Robin Smith (2) 40,000 800 8,165 John Pappajohn (2) 850,000 14,000 172,802 Tierney Family Trust (3) 100,000 600 20,129 Follman Family Trust (4) 300,000 5,100 61,014 Carpenter, George & Jill (7) 100,000 1,300 20,254 Harris, Geoffrey (2) 10,000 300 2,058 2 Accredited Investors 300,000 5,600 61,124 Brandt Ventures (8) 50,000 200 10,047 Subtotal for Final Round $ 2,000,000 Balances Converted September 19, 2016 $ 6,000,000 $ 317,000 1,263,406 (1) RSJ PE is a greater than 5% shareholder. Michal Votruba, a Director for Life Sciences for the RSJ/Gradus Fund, subsequently joined our Board on July 30, 2015. (2) Member of the Board. (3) Thomas Tierney is a trustee of the Tierney Family Trust. Mr. Tierney originally joined the Board in February 25, 2013 and served as Chairman of the Board from March 26, 2013 till May 22, 2015 when he resigned from the Board. On September 29, 2016 Mr. Tierney rejoined the Board. The Tierney Family Trust is a greater than 5% shareholder of the Company. (4) Robert Follman is a trustee of the Follman Family Trust and is a member of the Board. (5) John Pappajohn is a member of the Board. He purchased $200,000 of Notes, which on September 6, 2015, were assigned to four accredited investors. Approximately $10,400 of interest was attributable to such transferred Notes, resulting in an aggregate of 42,084 shares being issued upon the Mandatory Conversion of such transferred Notes. (6) Mark & Jill Oman are the beneficial owners of Oman Ventures and were greater than 5% shareholders of the Company. (7) George Carpenter is the CEO of the Company. (8) Brandt Ventures was issued this note as part of the Company’s settlement of its litigation with Leonard Brandt and Brandt Ventures (refer to Note 9. Commitments and Contingent Liabilities). |
DERIVATIVE LIABILITIES (Tables)
DERIVATIVE LIABILITIES (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of black-scholes option-pricing model assumption inputs | The range of Black-Scholes option-pricing model assumption inputs for all the valuation dates are in the table below: September 30, 2015 Low High Annual dividend yield — — Expected life (years) 2.5 5.00 Risk-free interest rate 0.56 % 1.81 % Expected volatility 191.05 % 273.10 % |
Schedule of changes in the derivative valuation | The following tables include a roll-forward of liabilities classified within Levels 1, 2 and 3: Level 1 Level 2 Level 3 Stock warrant and other derivative liabilities at September 30, 2014 $ - $ - $ 153,100 Change in fair value - - (153,100 ) Stock warrant and other derivative liabilities at September 30, 2015 833,000 Total derivative liabilities at September 30, 2015 $ - $ - $ 833,000 $3M of convertible debt prior to amendment 12/22/15 - - (772,800 ) $3M of convertible debt as amended 12/23/15 - - 962,300 Change in fair value as of 06/30/26 - - (263,100 ) Derivative liabilities upon Note origination 12/23/15 through 8/16/16 - - 1,079,800 $6M of convertible debt prior to amendment 09/16/16 - - 1,070,500 $6M of convertible debt as amended 09/19/16 - - 3,412,300 Elimination of derivative liabilities on Note conversion to Common Stock - - (6,322,000 ) Total derivative liabilities at September 30, 2016 $ - $ - $ - |
STOCKHOLDERS' DEFICIT (Tables)
STOCKHOLDERS' DEFICIT (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
Stockholders' Equity Note [Abstract] | |
Schedule of stock-based compensation expense | 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 statements of operations for the year ended September 30, 2016 and 2015 is as follows: September 30 2016 2015 Research $ 41,600 $ 41,600 Product Development 47,900 52,300 Sales and marketing 30,200 81,600 General and administrative 638,700 66,200 Total $ 758,400 $ 241,700 |
Schedule of stock option activity | A summary of stock option activity is as follows: Number of Weighted Outstanding at September 30, 2014 62,120 $ 168.00 Granted 10,000 16.00 Exercised - - Forfeited (937 ) 22.00 Outstanding at September 30, 2015 71,183 $ 150.00 Granted 152,250 5.95 Exercised - - Forfeited (313 ) 3.60 Outstanding at September 30, 2016 223,120 $ 50.98 |
Schedule of the status of options outstanding | Following is a summary of the status of options outstanding at September 30, 2016: Exercise Number Expiration Weighted Average 2012 Omnibus Incentive Compensation Plan $ 5.10 8,250 04/2026 $ 5.10 6.00 144,000 09/2026 6.00 11.00 8,750 08/2025 11.00 9.44 43,978 12/2022 – 01/2023 9.44 50.00 13,577 03/2023 – 01/2025 50.00 52.00 2,125 07/2024 52.00 600.00 216 03/2022 600.00 2006 Stock Incentive Plan $ 1,800.00 25 11/2016 $ 1,800.00 2,400.00 144 03/2019 – 07/2020 2,400.00 2,820.00 51 03/2021 2,820.00 3,060.00 7 09/2018 3,060.00 3,300.00 1,325 03/2020 3,300.00 4,800.00 24 12/2017 4,800.00 5,340.00 162 09/2017 5,340.00 5,760.00 61 04/2018 5,760.00 6,540.00 425 08/2017 6,540.00 $ Total 223,120 Average $ 50.98 |
Schedule of share-based compensation warrants | The warrant activity for the period starting October 1, 2014, through September 30, 2016, is described as follows: Number of Weighted Outstanding at September 30, 2014 4,078 $ 614.00 Granted 1,000 50.00 Exercised — — Expired (1,166 ) 1,828.00 Outstanding at September 30, 2015 3,912 $ 106.00 Granted 604,000 (2) 10.00 Exercised — — Expired (752 ) 200.00 Forfeited (600,000 )(2) 10.00 Outstanding at September 30, 2016 7,160 $ 50.41 |
Schedule of the status of warrants outstanding | Following is a summary of the status of warrants outstanding at September 30, 2016: Exercise Number Expiration Weighted Average $ 9.44 191 03/2018 $ 9.44 10.00 4,000 (1) 06/2021 10.00 50.00 1,161 03/2017 – 07/2017 50.00 55.00 1,620 06/2018 – 03/2019 55.00 200.00 104 12/2016 – 01/2017 200.00 1,800.00 84 07/2017 1,800.00 $ Total 7,160 $ 50.41 (1) On June 10, 2016, we issued two warrants, pursuant to a Finder’s Fee Agreement with Maxim Group LLC, to purchase in aggregate 4,000 shares of Common Stock following the introduction of an accredited investor who entered into a Second Amended Note and Warrant Purchase Agreement in the principal amount of $200,000. Each warrant is exercisable, in whole or in part, during the period beginning on the date of its issuance, and ending on the earlier of (i) December 31, 2020 and (ii) the date that is forty-five (45) days following the date on which the daily closing price of shares of the Company's Common Stock quoted on the OTCQB Venture Marketplace (or other bulletin board or exchange on which the Company's Common Stock is traded or listed) exceeds $50.00 for at least ten (10) consecutive trading days. In connection therewith, the Company will promptly notify the Note Warrant holders in the event that the daily closing price of the Company's shares of Common Stock exceeds $50.00 for at least ten (10) consecutive trading days. Pursuant to the Finder’s Fee Agreement, Maxim was also paid $20,000 cash for their efforts. (2) Pursuant to the Second Amended Note & Warrant Agreement, dated December 23, the Company issued an aggregate 600,000 warrants with same terms as the warrants mentioned in (1) above. On September 19, 2016, the Company entered into the Second Omnibus Amendment, with a majority of over 80% of the noteholders, thereby amending: (i) the Notes, (ii) the Second Amended Note and Warrant Agreement, as amended and (iii) the Warrants. Subsequently, the Company exercised the Mandatory Conversion on September 19, 2016, and, on September 21, 2016, (i) converted the entire outstanding principal balance of $6,000,000, plus accrued interest of $317,000 on all of the Notes into 1,263,406 shares of the Company's Common Stock at a conversion price of $5.00 per share and (ii) cancelled all 600,000 issued and outstanding warrants associated with the Notes. (refer to Note 3. Convertible Debt and Equity Financing). |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of provision (benefit) for income taxes | Reconciliations 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 each of the fiscal years ended September 30: 2016 2015 Federal income tax (benefit) at statutory rates (34.0 )% (34.0 )% Stock-based compensation (1.35 )% (0.4 )% Extinguishment of debt - % - % Change in valuation allowance (79.92 )% (16 )% True-ups and other adjustments (47.26 )% (7.62 )% State tax benefit (0.02 )% (5.98 )% |
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, 2016 and 2015: 2016 2015 Deferred income tax assets: Net operating loss carryforward $ 17,492,350 $ 13,718,300 Deferred interest, consulting and compensation liabilities 3,974,100 3,596,900 Amortization - - Deferred income tax assets – other 5,486 5,600 21,471,936 17,320,800 Deferred income tax liabilities—other - - Deferred income tax asset—net before valuation allowance 21,471,936 17,320,800 Valuation allowance (21,471,936 ) (17,320,800 ) Deferred income tax asset—net $ - $ - |
LOSS PER SHARE (Tables)
LOSS PER SHARE (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
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 fiscal years ended September 30, 2016 and 2015 is as follows: 2016 2015 Net Loss for computation of basic and diluted net loss per share: Net loss $ (5,940,900 ) $ (3,379,400 ) Basic and Diluted net loss per share: Basic net loss per share $ (9.26 ) $ (6.64 ) Basic and Diluted weighted average shares outstanding 641,844 509,066 Anti-dilutive common equivalent shares not included in the computation of dilutive net loss per share: Convertible debt 1,441,344 50,348 Warrants 3,484 4,132 Options 74,588 63,634 |
COMMITMENTS AND CONTINGENT LI25
COMMITMENTS AND CONTINGENT LIABILITIES (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of contractual obligations | Payments due by period Contractual Obligations Total Less than 1 year 1 to 3 years 3 to 5 years More than 5 years Operating Lease Obligations $ 99,900 $ 73,100 $ 26,800 - - Capital Lease Obligations 5,900 1,200 4,200 500 - Total $ 105,800 $ 74,300 $ 31,000 500 - |
NATURE OF OPERATIONS (Details N
NATURE OF OPERATIONS (Details Narrative) - USD ($) | Sep. 20, 2016 | Aug. 24, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 23, 2015 |
Reverse stock-split | 1-for-200 | 1-for-200 | Approved a 1-for-200 reverse stock-split which was effected on September 21, 2016. | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | ||
Common stock, issued | 200 | 1,941,061 | 512,405 | ||
Common stock, outstanding | 200 | 1,941,061 | 512,405 | ||
Accumulated deficit | $ (68,533,800) | $ (62,592,900) | |||
Net loss from operations | (3,766,800) | (2,649,800) | |||
Net cash used in operating activities | 2,978,400 | $ 2,156,400 | |||
Accrued interest | $ 317,000 | ||||
Warrants [Member] | |||||
Warrant exercise price (in dollars per share) | $ 50.41 | ||||
Second Amended Note & Warrant Agreement [Member] | Secured Convertible Promissory Notes ( December 2015 Notes) [Member] | |||||
Debt face value | $ 1,000,000 | ||||
Accrued interest | $ 317,000 | ||||
Debt conversion price (in dollars per share) | $ 5 | ||||
Second Amended Note & Warrant Agreement [Member] | Warrants [Member] | |||||
Debt face value | $ 6,000,000 | ||||
Number of shares called | 1,263,406 | ||||
Debt conversion price (in dollars per share) | $ 0.25 | ||||
Warrant exercise price (in dollars per share) | $ 0.05 | ||||
Maximum [Member] | |||||
Reverse stock-split | 1-for-200 | ||||
Maximum [Member] | Second Amended Note & Warrant Agreement [Member] | Warrants [Member] | |||||
Warrant exercise price (in dollars per share) | 1,800 | ||||
Minimum [Member] | |||||
Reverse stock-split | 1-for-10 | ||||
Minimum [Member] | Second Amended Note & Warrant Agreement [Member] | Warrants [Member] | |||||
Warrant exercise price (in dollars per share) | $ 9.44 |
SUMMARY OF SIGNIFICANT ACCOUN27
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 12 Months Ended |
Sep. 30, 2016 | |
Minimum [Member] | |
Annual dividend yield | |
Expected life (years) | 2 years 6 months |
Risk-free interest rate | 0.56% |
Expected volatility | 191.05% |
Maximum [Member] | |
Annual dividend yield | |
Expected life (years) | 5 years |
Risk-free interest rate | 1.81% |
Expected volatility | 273.10% |
SUMMARY OF SIGNIFICANT ACCOUN28
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Cash, FDIC insured amount | $ 68,200 | |
Net gain (loss) on derivative liabilities | 34,600 | $ 162,800 |
Net gain (loss) on extinguishment of debt | 572,300 | (630,000) |
Derivative liabilities | 0 | 833,000 |
Allowance for doubtful accounts | 1,200 | 1,200 |
Depreciation and amortization | 7,200 | 7,600 |
Accounts payable consists of trade payables | 219,200 | 536,400 |
Write-backs of accounts payable | $ 306,700 | 21,900 |
Description of collection terms | These were for long held-debts which have been in dispute and there has been no collection activity for five years. | |
Accrued compensation | $ 436,200 | 226,100 |
Deferred revenue | 45,900 | 45,900 |
Advertising expense | $ 148,600 | 24,000 |
Intellectual Property [Member] | ||
Useful life | 10 years | |
Depreciation and amortization | $ 10,200 | 8,100 |
Acquired intellectual property | 21,200 | |
Amortization expense | 2,100 | 2,100 |
Two managers [Member] | ||
Accrued compensation | 125,400 | |
Two officers [Member] | ||
Accrued compensation | 186,200 | |
Robin L. Smith [Member] | ||
Accrued compensation | 250,000 | |
Furniture and Equipment [Member] | ||
Depreciation and amortization | 7,200 | 7,600 |
Accumulated depreciation and amortization | $ 76,900 | $ 82,600 |
Furniture and Equipment [Member] | Minimum [Member] | ||
Useful life | 3 years | |
Furniture and Equipment [Member] | Maximum [Member] | ||
Useful life | 10 years | |
Computer Software development [Member] | ||
Capitalized software development costs | $ 78,400 | |
Amortization expense | $ 2,200 |
CONVERTIBLE DEBT AND EQUITY F29
CONVERTIBLE DEBT AND EQUITY FINANCINGS (Details) - USD ($) | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | ||
Principal Amount | $ 6,000,000 | $ 3,000,000 | |
Discount | 234,200 | ||
Carrying Value | 2,765,800 | ||
Accrued Interest | $ 317,000 | ||
Shares issued on Conversion | 1,263,406 | ||
Original Note Purchase Agreement [Member] | Note Date Range Sept 22, 2014 to July 20, 2015 [Member] | |||
Principal Amount | 2,290,000 | ||
Discount | 68,600 | ||
Carrying Value | 2,221,400 | ||
Original Note Purchase Agreement [Member] | Note Date Range Sept 22, 2014 to July 20, 2015 [Member] | RSJ Private Equity (Michal Votruba) [Member] | |||
Principal Amount | [1] | 750,000 | |
Discount | [1] | 21,300 | |
Carrying Value | [1] | 728,700 | |
Accrued Interest | [1] | $ 76,200 | |
Shares issued on Conversion | [1] | 165,246 | |
Original Note Purchase Agreement [Member] | Note Date Range Sept 22, 2014 to July 20, 2015 [Member] | John Pappajohn [Member] | |||
Principal Amount | [2] | $ 200,000 | |
Discount | [2] | 8,100 | |
Carrying Value | [2] | 191,900 | |
Accrued Interest | [2] | $ 20,400 | |
Shares issued on Conversion | [2] | 44,089 | |
Original Note Purchase Agreement [Member] | Note Date Range Sept 22, 2014 to July 20, 2015 [Member] | John Pappajohn [Member] | |||
Principal Amount | [3] | $ 200,000 | |
Discount | [3] | 3,000 | |
Carrying Value | [3] | 197,000 | |
Accrued Interest | [3] | $ 14,200 | |
Shares issued on Conversion | [3] | 42,820 | |
Original Note Purchase Agreement [Member] | Note Date Range Sept 22, 2014 to July 20, 2015 [Member] | Thomas Tierney (Tierney Family Trust) [Member] | |||
Principal Amount | [4] | $ 540,000 | |
Discount | [4] | 16,000 | |
Carrying Value | [4] | 524,000 | |
Accrued Interest | [4] | $ 46,000 | |
Shares issued on Conversion | [4] | 117,199 | |
Original Note Purchase Agreement [Member] | Note Date Range Sept 22, 2014 to July 20, 2015 [Member] | Robert Follman (Follman Family Trust) [Member] | |||
Principal Amount | [5] | $ 100,000 | |
Discount | [5] | 3,000 | |
Carrying Value | [5] | 97,000 | |
Accrued Interest | [5] | $ 7,700 | |
Shares issued on Conversion | [5] | 21,538 | |
Original Note Purchase Agreement [Member] | Note Date Range Sept 22, 2014 to July 20, 2015 [Member] | Oman Ventures [Member] | |||
Principal Amount | [6] | $ 200,000 | |
Discount | [6] | 8,100 | |
Carrying Value | [6] | 191,900 | |
Accrued Interest | [6] | $ 20,400 | |
Shares issued on Conversion | [6] | 44,089 | |
Original Note Purchase Agreement [Member] | Note Date Range Sept 22, 2014 to July 20, 2015 [Member] | Four Accredited Investors [Member] | |||
Principal Amount | $ 300,000 | ||
Discount | 9,100 | ||
Carrying Value | 290,900 | ||
Accrued Interest | $ 30,600 | ||
Shares issued on Conversion | 66,112 | ||
Omnibus Amendment Sept 14, 2015 [Member] | Note Date Range Sept 14, 2015 to September 24, 2015 [Member] | |||
Principal Amount | $ 710,000 | ||
Discount | 165,600 | ||
Carrying Value | 544,400 | ||
Omnibus Amendment Sept 14, 2015 [Member] | Note Date Range Sept 14, 2015 to September 24, 2015 [Member] | RSJ Private Equity (Michal Votruba) [Member] | |||
Principal Amount | [1] | 350,000 | |
Discount | [1] | 85,400 | |
Carrying Value | [1] | 264,600 | |
Accrued Interest | [1] | $ 17,300 | |
Shares issued on Conversion | [1] | 73,462 | |
Omnibus Amendment Sept 14, 2015 [Member] | Note Date Range Sept 14, 2015 to September 24, 2015 [Member] | John Pappajohn [Member] | |||
Principal Amount | [2] | $ 100,000 | |
Discount | [2] | 24,400 | |
Carrying Value | [2] | 75,600 | |
Accrued Interest | [2] | $ 5,100 | |
Shares issued on Conversion | [2] | 21,015 | |
Omnibus Amendment Sept 14, 2015 [Member] | Note Date Range Sept 14, 2015 to September 24, 2015 [Member] | Robert Follman (Follman Family Trust) [Member] | |||
Principal Amount | [5] | $ 150,000 | |
Discount | [5] | 36,500 | |
Carrying Value | [5] | 113,500 | |
Accrued Interest | [5] | $ 7,600 | |
Shares issued on Conversion | [5] | 31,522 | |
Omnibus Amendment Sept 14, 2015 [Member] | Note Date Range Sept 14, 2015 to September 24, 2015 [Member] | Robin L. Smith [Member] | |||
Principal Amount | [2] | $ 60,000 | |
Discount | [2] | 7,100 | |
Carrying Value | [2] | 52,900 | |
Accrued Interest | [2] | $ 3,100 | |
Shares issued on Conversion | [2] | 12,611 | |
Omnibus Amendment Sept 14, 2015 [Member] | Note Date Range Sept 14, 2015 to September 24, 2015 [Member] | Two Accredited Investors [Member] | |||
Principal Amount | $ 50,000 | ||
Discount | 12,200 | ||
Carrying Value | 37,800 | ||
Accrued Interest | $ 2,500 | ||
Shares issued on Conversion | 10,508 | ||
Second Amended Note & Warrant Agreement [Member] | Note Date Range December 23 & 28, 2015 [Member] | |||
Principal Amount | $ 1,000,000 | ||
Second Amended Note & Warrant Agreement [Member] | Note Date Range December 23 & 28, 2015 [Member] | RSJ Private Equity (Michal Votruba) [Member] | |||
Principal Amount | [1] | 750,000 | |
Accrued Interest | [1] | $ 27,300 | |
Shares issued on Conversion | [1] | 155,465 | |
Second Amended Note & Warrant Agreement [Member] | Note Date Range December 23 & 28, 2015 [Member] | John Pappajohn [Member] | |||
Principal Amount | [2] | $ 250,000 | |
Accrued Interest | [2] | $ 9,300 | |
Shares issued on Conversion | [2] | 51,856 | |
Second Omnibus Amendment [Member] | Note Date Range Feb 23, 2016 to August 16, 2016 [Member] | |||
Principal Amount | $ 200,000 | ||
Second Omnibus Amendment [Member] | Note Date Range Feb 23, 2016 to August 16, 2016 [Member] | RSJ Private Equity (Michal Votruba) [Member] | |||
Principal Amount | [1] | 250,000 | |
Accrued Interest | [1] | $ 1,400 | |
Shares issued on Conversion | [1] | 50,281 | |
Second Omnibus Amendment [Member] | Note Date Range Feb 23, 2016 to August 16, 2016 [Member] | John Pappajohn [Member] | |||
Principal Amount | [2] | $ 850,000 | |
Accrued Interest | [2] | $ 14,000 | |
Shares issued on Conversion | [2] | 172,802 | |
Second Omnibus Amendment [Member] | Note Date Range Feb 23, 2016 to August 16, 2016 [Member] | Thomas Tierney (Tierney Family Trust) [Member] | |||
Principal Amount | [4] | $ 100,000 | |
Accrued Interest | [4] | $ 600 | |
Shares issued on Conversion | [4] | 20,129 | |
Second Omnibus Amendment [Member] | Note Date Range Feb 23, 2016 to August 16, 2016 [Member] | Robert Follman (Follman Family Trust) [Member] | |||
Principal Amount | [5] | $ 300,000 | |
Accrued Interest | [5] | $ 5,100 | |
Shares issued on Conversion | [5] | 61,014 | |
Second Omnibus Amendment [Member] | Note Date Range Feb 23, 2016 to August 16, 2016 [Member] | Robin L. Smith [Member] | |||
Principal Amount | [2] | $ 40,000 | |
Accrued Interest | [2] | $ 800 | |
Shares issued on Conversion | [2] | 8,165 | |
Second Omnibus Amendment [Member] | Note Date Range Feb 23, 2016 to August 16, 2016 [Member] | Two Accredited Investors [Member] | |||
Principal Amount | $ 300,000 | ||
Accrued Interest | $ 5,600 | ||
Shares issued on Conversion | 61,124 | ||
Second Omnibus Amendment [Member] | Note Date Range Feb 23, 2016 to August 16, 2016 [Member] | Mr. George Carpenter [Member] | |||
Principal Amount | [7] | $ 100,000 | |
Accrued Interest | [7] | $ 1,300 | |
Shares issued on Conversion | [7] | 20,254 | |
Second Omnibus Amendment [Member] | Note Date Range Feb 23, 2016 to August 16, 2016 [Member] | Geoffrey E. Harris [Member] | |||
Principal Amount | [2] | $ 10,000 | |
Accrued Interest | [2] | $ 300 | |
Shares issued on Conversion | [2] | 2,058 | |
Second Omnibus Amendment [Member] | Note Date Range Feb 23, 2016 to August 16, 2016 [Member] | Brandt Ventures [Member] | |||
Principal Amount | [8] | $ 50,000 | |
Accrued Interest | [8] | $ 200 | |
Shares issued on Conversion | [8] | 10,047 | |
[1] | RSJ PE is a greater than 5% shareholder. Michal Votruba, a Director for Life Sciences for the RSJ/Gradus Fund, subsequently joined our Board on July 30, 2015. | ||
[2] | Member of the Board. | ||
[3] | John Pappajohn is a member of the Board. He purchased $200,000 of Notes, which on September 6, 2015, were assigned to four accredited investors. Approximately $10,400 of interest was attributable to such transferred Notes, resulting in an aggregate of 42,084 shares being issued upon the Mandatory Conversion of such transferred Notes. | ||
[4] | Thomas Tierney is a trustee of the Tierney Family Trust. Mr. Tierney originally joined the Board in February 25, 2013 and served as Chairman of the Board from March 26, 2013 till May 22, 2015 when he resigned from the Board. On September 29, 2016 Mr. Tierney rejoined the Board. The Tierney Family Trust is a greater than 5% shareholder of the Company. | ||
[5] | Robert Follman is a trustee of the Follman Family Trust and is a member of the Board. | ||
[6] | Mark & Jill Oman are the beneficial owners of Oman Ventures and were greater than 5% shareholders of the Company. | ||
[7] | George Carpenter is the CEO of the Company | ||
[8] | Brandt Ventures was issued this note as part of the Company's settlement of its litigation with Leonard Brandt and Brandt Ventures (refer to Note 9. Commitments and Contingent Liabilities) |
CONVERTIBLE DEBT AND EQUITY F30
CONVERTIBLE DEBT AND EQUITY FINANCINGS (Details Narrative) | Sep. 19, 2016USD ($) | Dec. 23, 2015USD ($)Number$ / sharesshares | Apr. 14, 2015USD ($) | Sep. 30, 2016USD ($)Numbershares | Jun. 30, 2016USD ($)Number | Sep. 30, 2015USD ($) | Sep. 24, 2015USD ($)Number | Sep. 15, 2015USD ($) | Sep. 14, 2015$ / shares | Jun. 02, 2015USD ($) | Mar. 18, 2015USD ($) | Sep. 22, 2014USD ($) |
Purchase of convertible note | $ 6,000,000 | $ 3,000,000 | ||||||||||
Accrued Interest | $ 317,000 | |||||||||||
Shares issued on Conversion | shares | 1,263,406 | |||||||||||
Seven Accredited Investor [Member] | Note Warrant [Member] | ||||||||||||
Number of accredited investors | Number | 7 | |||||||||||
Number of secured notes issued | Number | 8 | |||||||||||
Number of purchasers | Number | 5 | |||||||||||
Face amount | $ 1,100,000 | |||||||||||
5% Senior Secured Notes Convertible (the "September 2014 Notes") [Member] | John Pappajohn [Member] | ||||||||||||
Accrued Interest | $ 10,400 | |||||||||||
Shares issued on Conversion | shares | 42,084 | |||||||||||
Amendment Note Purchase Agreement [Member] | 5% Senior Secured Notes Convertible (the "September 2014 Notes") [Member] | ||||||||||||
Face amount | $ 3,000,000 | |||||||||||
Issuance of debt | $ 500,000 | |||||||||||
Conversion price (in dollars per share) | $ / shares | $ 10 | |||||||||||
Description of conversion terms | Conversion price of all notes at $10.00 per share (as adjusted for stock splits, stock dividends, combinations or the like affecting the Common Stock) (the "Fixed Conversion Price") (i) automatically, in the event of a qualified financing of not less than $5 million, or (ii) voluntarily, within 15 days prior to the maturity date of the note. The Omnibus Amendment also amended the form of note attached to the Note Purchase Agreement to reflect the Fixed Conversion Price. | |||||||||||
Amendment Note Purchase Agreement [Member] | Secured Convertible Promissory Notes (September 2015 Notes) [Member] | Six Accredited Investors [Member] | ||||||||||||
Number of accredited investors | Number | 6 | |||||||||||
Face amount | $ 710,000 | |||||||||||
Amendment Note Purchase Agreement [Member] | Secured Convertible Promissory Notes (September 2015 Notes) [Member] | John Pappajohn [Member] | ||||||||||||
Purchase of convertible note | $ 100,000 | |||||||||||
Original Note Purchase Agreement [Member] | 5% Senior Secured Notes Convertible (the "September 2014 Notes") [Member] | ||||||||||||
Face amount | $ 2,500,000 | |||||||||||
Purchase of convertible note | $ 3,121,900 | $ 3,000,000 | ||||||||||
Accrued Interest | $ 121,900 | |||||||||||
Original Note Purchase Agreement [Member] | 5% Senior Secured Notes Convertible (the "September 2014 Notes") [Member] | RSJ Private Equity (Michal Votruba) [Member] | ||||||||||||
Purchase of convertible note | $ 750,000 | |||||||||||
Original Note Purchase Agreement [Member] | 5% Senior Secured Notes Convertible (the "September 2014 Notes") [Member] | RSJ Private Equity & Nine Accredited Investors [Member] | ||||||||||||
Number of accredited investors | Number | 9 | |||||||||||
Number of secured notes issued | Number | 15 | |||||||||||
Face amount | $ 6,000,000 | |||||||||||
Original Note Purchase Agreement [Member] | 5% Senior Secured Notes Convertible (the "September 2014 Notes") [Member] | John Pappajohn [Member] | ||||||||||||
Purchase of convertible note | $ 100,000 | $ 100,000 | $ 100,000 | $ 200,000 | ||||||||
Second Amended Note & Warrant Agreement [Member] | Note Warrant [Member] | ||||||||||||
Conversion price (in dollars per share) | $ / shares | $ 50 | |||||||||||
Number of shares called | shares | 3,000,000 | |||||||||||
Second Amended Note & Warrant Agreement [Member] | Sixteen Accredited Investors [Member] | ||||||||||||
Number of accredited investors | Number | 16 | |||||||||||
Number of secured notes issued | Number | 16 | |||||||||||
Purchase of convertible note | $ 6,000,000 | |||||||||||
Maturity date of the notes | Dec. 31, 2017 | |||||||||||
Second Amended Note & Warrant Agreement [Member] | Secured Convertible Promissory Notes ( December 2015 Notes) [Member] | ||||||||||||
Face amount | $ 1,000,000 | |||||||||||
Conversion price (in dollars per share) | $ / shares | $ 5 | |||||||||||
Description of collateral | Secured by a security interest in the Company's intellectual property, as detailed in the amended and restated security agreement. | |||||||||||
Description of repayment priority | Upon a change of control of the Company (as described in the Notes), the holder of a Note will have the option to have the Note repaid with a premium equal to 50% of the outstanding principal. | |||||||||||
Accrued Interest | $ 317,000 | |||||||||||
Second Omnibus Amendment [Member] | 5% Senior Secured Notes Convertible (the "September 2014 Notes") [Member] | ||||||||||||
Face amount | $ 6,000,000 | |||||||||||
Accrued Interest | $ 316,965 | |||||||||||
Second Omnibus Amendment [Member] | Secured Convertible Promissory Notes [Member] | ||||||||||||
Description of conversion terms | Pursuant to the Second Omnibus Amendment, the Company had the option, exercisable at any time after September 1, 2016, to mandatorily convert all Notes into shares of the Company's common stock at $5.00 per share (the "Mandatory Conversion"). |
DERIVATIVE LIABILITIES (Details
DERIVATIVE LIABILITIES (Details) | 12 Months Ended |
Sep. 30, 2016 | |
Minimum [Member] | |
Annual dividend yield | |
Expected life | 2 years 6 months |
Risk-free interest rate | 0.56% |
Expected volatility | 191.05% |
Maximum [Member] | |
Annual dividend yield | |
Expected life | 5 years |
Risk-free interest rate | 1.81% |
Expected volatility | 273.10% |
DERIVATIVE LIABILITIES (Detai32
DERIVATIVE LIABILITIES (Details 1) - USD ($) | 12 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Total derivative liabilities at beginning | $ 833,000 | |
Total derivative liabilities at ending | $ 833,000 | |
Level 1 [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Stock warrant and other derivative liabilities at beginning | ||
$3M of convertible debt prior to amendment | ||
$3M of convertible debt as amended | ||
Change in fair value | ||
Derivative liabilities upon Note origination | ||
$6M of convertible debt prior to amendment | ||
$6M of convertible debt as amended | ||
Elimination of derivative liabilities on Note conversion to Common Stock | ||
Level 2 [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Stock warrant and other derivative liabilities at beginning | ||
$3M of convertible debt prior to amendment | ||
$3M of convertible debt as amended | ||
Change in fair value | ||
Derivative liabilities upon Note origination | ||
$6M of convertible debt prior to amendment | ||
$6M of convertible debt as amended | ||
Elimination of derivative liabilities on Note conversion to Common Stock | ||
Level 3 [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Stock warrant and other derivative liabilities at beginning | 833,000 | 153,100 |
Total derivative liabilities at beginning | 833,000 | |
$3M of convertible debt prior to amendment | (772,800) | |
$3M of convertible debt as amended | 962,300 | |
Change in fair value | $ (263,100) | (153,100) |
Derivative liabilities upon Note origination | 1,079,800 | |
$6M of convertible debt prior to amendment | $ 1,070,500 | |
$6M of convertible debt as amended | 3,412,300 | |
Elimination of derivative liabilities on Note conversion to Common Stock | (6,322,000) | |
Stock warrant and other derivative liabilities at ending | 833,000 | |
Total derivative liabilities at ending | $ 833,000 |
DERIVATIVE LIABILITIES (Detai33
DERIVATIVE LIABILITIES (Details Narrative) | Dec. 23, 2015USD ($)Number$ / sharesshares | Dec. 22, 2015USD ($) | Sep. 30, 2016USD ($)$ / shares | Sep. 30, 2016USD ($)$ / shares | Sep. 30, 2015USD ($) | Sep. 19, 2016USD ($) | Sep. 16, 2016USD ($) | Aug. 16, 2016USD ($)Number | Jun. 30, 2016USD ($) | Sep. 22, 2014USD ($) |
Secured convertible debt | $ 6,000,000 | $ 6,000,000 | $ 3,000,000 | |||||||
Derivative liability | 0 | 0 | 833,000 | |||||||
Gain (loss) on derivative liabilities | (34,600) | 162,800 | ||||||||
Gains (losses) on extinguishment of debt, total | 572,300 | (630,000) | ||||||||
Accrued interest | $ 317,000 | $ 317,000 | ||||||||
Warrants [Member] | ||||||||||
Warrant exercise price (in dollars per share) | $ / shares | $ 50.41 | $ 50.41 | ||||||||
Note Warrant [Member] | Ten Accredited Investor [Member] | ||||||||||
Derivative liability | $ 1,079,800 | |||||||||
Face amount | $ 2,000,000 | |||||||||
Number of accredited investors | Number | 10 | |||||||||
Second Amended Note & Warrant Agreement [Member] | Sixteen Accredited Investors [Member] | ||||||||||
Secured convertible debt | $ 6,000,000 | |||||||||
Number of accredited investors | Number | 16 | |||||||||
Maturity date | Dec. 31, 2017 | |||||||||
Second Amended Note & Warrant Agreement [Member] | 5% Senior Secured Notes Convertible (the "September 2014 Notes") [Member] | ||||||||||
Derivative liability | $ 60,200 | |||||||||
Gains (losses) on extinguishment of debt, total | $ 772,800 | |||||||||
Second Amended Note & Warrant Agreement [Member] | Secured Convertible Promissory Notes ( December 2015 Notes) [Member] | ||||||||||
Conversion price (in dollars per share) | $ / shares | $ 5 | |||||||||
Face amount | $ 1,000,000 | |||||||||
Accrued interest | $ 317,000 | |||||||||
Second Amended Note & Warrant Agreement [Member] | Warrants [Member] | ||||||||||
Conversion price (in dollars per share) | $ / shares | $ 0.25 | |||||||||
Face amount | $ 6,000,000 | |||||||||
Number of shares called | shares | 1,263,406 | |||||||||
Warrant exercise price (in dollars per share) | $ / shares | $ 0.05 | |||||||||
Second Amended Note & Warrant Agreement [Member] | Note Warrant [Member] | ||||||||||
Conversion price (in dollars per share) | $ / shares | $ 50 | |||||||||
Number of shares called | shares | 3,000,000 | |||||||||
Second Omnibus Amendment [Member] | 5% Senior Secured Notes Convertible (the "September 2014 Notes") [Member] | ||||||||||
Derivative liability | $ 3,412,300 | $ 3,412,300 | $ 1,070,500 | |||||||
Face amount | $ 6,000,000 | |||||||||
Aggregate derivative liability | 6,322,000 | 6,322,000 | 6,316,965 | $ 2,909,700 | ||||||
Accrued interest | $ 316,965 | |||||||||
Extinguishment of debt | $ 6,322,000 | |||||||||
Original Note Purchase Agreement [Member] | 5% Senior Secured Notes Convertible (the "September 2014 Notes") [Member] | ||||||||||
Secured convertible debt | $ 3,121,900 | 3,000,000 | ||||||||
Derivative liability | 833,000 | |||||||||
Gain (loss) on derivative liabilities | $ 34,600 | $ 162,800 | ||||||||
Gains (losses) on extinguishment of debt, total | 962,300 | |||||||||
Face amount | $ 2,500,000 | |||||||||
Aggregate derivative liability | 1,022,400 | $ 263,100 | ||||||||
Accrued interest | $ 121,900 |
STOCKHOLDERS' DEFICIT (Details)
STOCKHOLDERS' DEFICIT (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Total | $ 758,400 | $ 241,700 |
Research [Member] | ||
Total | 41,600 | 41,600 |
Product Development [Member] | ||
Total | 47,900 | 52,300 |
Sales And Marketing [Member] | ||
Total | 30,200 | 81,600 |
General And Administrative [Member] | ||
Total | $ 638,700 | $ 66,200 |
STOCKHOLDERS' DEFICIT (Details
STOCKHOLDERS' DEFICIT (Details 1) - $ / shares | 12 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Outstanding, beginning | 71,183 | 62,120 |
Granted | 152,250 | 10,000 |
Exercised | ||
Forfeited | (313) | (937) |
Outstanding, ending | 223,120 | 71,183 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | ||
Outstanding, beginning | $ 150 | $ 168 |
Granted | 5.95 | 16 |
Exercised | ||
Forfeited | 3.60 | 22 |
Outstanding, ending | $ 50.98 | $ 150 |
STOCKHOLDERS' DEFICIT (Detail36
STOCKHOLDERS' DEFICIT (Details 2) - $ / shares | 12 Months Ended | ||||
Sep. 30, 2016 | Sep. 30, 2015 | Jan. 08, 2015 | Sep. 30, 2014 | Aug. 03, 2006 | |
Exercise Price | $ 50.98 | $ 150 | $ 168 | ||
Number of Shares | 223,120 | ||||
Weighted Average Exercise Price | $ 50.98 | ||||
2012 Omnibus Incentive Compensation Plan [Member] | |||||
Exercise Price | $ 50 | ||||
2012 Omnibus Incentive Compensation Plan [Member] | $5.10 [Member] | |||||
Exercise Price | $ 5.10 | ||||
Number of Shares | 8,250 | ||||
Expiration Date | 2026-04 | ||||
Weighted Average Exercise Price | $ 5.10 | ||||
2012 Omnibus Incentive Compensation Plan [Member] | $6.00 [Member] | |||||
Exercise Price | $ 6 | ||||
Number of Shares | 144,000 | ||||
Expiration Date | 2026-09 | ||||
Weighted Average Exercise Price | $ 6 | ||||
2012 Omnibus Incentive Compensation Plan [Member] | $11.00 [Member] | |||||
Exercise Price | $ 11 | ||||
Number of Shares | 8,750 | ||||
Expiration Date | 2025-08 | ||||
Weighted Average Exercise Price | $ 11 | ||||
2012 Omnibus Incentive Compensation Plan [Member] | $9.44 [Member] | |||||
Exercise Price | $ 9.44 | ||||
Number of Shares | 43,978 | ||||
Weighted Average Exercise Price | $ 9.44 | ||||
2012 Omnibus Incentive Compensation Plan [Member] | $9.44 [Member] | Minimum [Member] | |||||
Expiration Date | 2022-12 | ||||
2012 Omnibus Incentive Compensation Plan [Member] | $9.44 [Member] | Maximum [Member] | |||||
Expiration Date | 2023-01 | ||||
2012 Omnibus Incentive Compensation Plan [Member] | $50.00 [Member] | |||||
Exercise Price | $ 50 | ||||
Number of Shares | 13,577 | ||||
Weighted Average Exercise Price | $ 50 | ||||
2012 Omnibus Incentive Compensation Plan [Member] | $50.00 [Member] | Minimum [Member] | |||||
Expiration Date | 2023-03 | ||||
2012 Omnibus Incentive Compensation Plan [Member] | $50.00 [Member] | Maximum [Member] | |||||
Expiration Date | 2025-01 | ||||
2012 Omnibus Incentive Compensation Plan [Member] | $52.00 [Member] | |||||
Exercise Price | $ 52 | ||||
Number of Shares | 2,125 | ||||
Expiration Date | 2024-07 | ||||
Weighted Average Exercise Price | $ 52 | ||||
2012 Omnibus Incentive Compensation Plan [Member] | $600.00 [Member] | |||||
Exercise Price | $ 600 | ||||
Number of Shares | 216 | ||||
Expiration Date | 2022-03 | ||||
Weighted Average Exercise Price | $ 600 | ||||
2006 Stock Incentive Plan [Member] | Minimum [Member] | |||||
Exercise Price | $ 720 | ||||
2006 Stock Incentive Plan [Member] | Maximum [Member] | |||||
Exercise Price | $ 6,540 | ||||
2006 Stock Incentive Plan [Member] | $1800.00 [Member] | |||||
Exercise Price | $ 1,800 | ||||
Number of Shares | 25 | ||||
Expiration Date | 2016-11 | ||||
Weighted Average Exercise Price | $ 1,800 | ||||
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] | $2400.00 [Member] | Minimum [Member] | |||||
Expiration Date | 2019-03 | ||||
2006 Stock Incentive Plan [Member] | $2400.00 [Member] | Maximum [Member] | |||||
Expiration Date | 2020-07 | ||||
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] | $3060.00 [Member] | |||||
Exercise Price | $ 3,060 | ||||
Number of Shares | 7 | ||||
Expiration Date | 2018-09 | ||||
Weighted Average Exercise Price | $ 3,060 | ||||
2006 Stock Incentive Plan [Member] | $3300.00 [Member] | |||||
Exercise Price | $ 3,300 | ||||
Number of Shares | 1,325 | ||||
Expiration Date | 2020-03 | ||||
Weighted Average Exercise Price | $ 3,300 | ||||
2006 Stock Incentive Plan [Member] | $4800.00 [Member] | |||||
Exercise Price | $ 4,800 | ||||
Number of Shares | 24 | ||||
Expiration Date | 2017-12 | ||||
Weighted Average Exercise Price | $ 4,800 | ||||
2006 Stock Incentive Plan [Member] | $5340.00 [Member] | |||||
Exercise Price | $ 5,340 | ||||
Number of Shares | 162 | ||||
Expiration Date | 2017-09 | ||||
Weighted Average Exercise Price | $ 5,340 | ||||
2006 Stock Incentive Plan [Member] | $5760.00 [Member] | |||||
Exercise Price | $ 5,760 | ||||
Number of Shares | 61 | ||||
Expiration Date | 2018-04 | ||||
Weighted Average Exercise Price | $ 5,760 | ||||
2006 Stock Incentive Plan [Member] | $6540.00 [Member] | |||||
Exercise Price | $ 6,540 | ||||
Number of Shares | 425 | ||||
Expiration Date | 2017-08 | ||||
Weighted Average Exercise Price | $ 6,540 |
STOCKHOLDERS' DEFICIT (Detail37
STOCKHOLDERS' DEFICIT (Details 3) - Warrants [Member] - $ / shares | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Outstanding, beginning | 3,912 | 4,078 | |
Granted | 604,000 | [1] | 1,000 |
Exercised | |||
Expired | (752) | (1,166) | |
Forfeited | (600,000) | ||
Outstanding, ending | 7,160 | 3,912 | |
Share Based Compensation Arrangement By Share Based Payment Award Other Than Options Outstanding Weighted Average Exercise Price [Roll Forward] | |||
Outstanding, beginning | $ 106 | $ 614 | |
Granted | 10 | 50 | |
Exercised | |||
Expired | 200 | 1,828 | |
Forfeited | 10 | ||
Outstanding, ending | $ 50.41 | $ 106 | |
[1] | Pursuant to the Second Amended Note & Warrant Agreement, dated December 23, 2015, the Company issued an aggregate 600,000 warrants with same terms as the warrants mentioned in (1) above. On September 19, 2016, the Company entered into the Second Omnibus Amendment, with a majority of over 80% of the noteholders, thereby amending: (i) the Notes, (ii) the Second Amended Note and Warrant Agreement, as amended and (iii) the Warrants. Subsequently, the Company exercised the Mandatory Conversion on September 19, 2016, and, on September 21, 2016, (i) converted the entire outstanding principal balance of $6,000,000, plus accrued interest of $317,000 on all of the Notes into 1,263,406 shares of the Company's Common Stock at a conversion price of $5.00 per share and (ii) cancelled all 600,000 issued and outstanding warrants associated with the Notes. (refer to Note 3. Convertible Debt and Equity Financing). |
STOCKHOLDERS' DEFICIT (Detail38
STOCKHOLDERS' DEFICIT (Details 4) - $ / shares | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | |
Warrants [Member] | |||
Exercise Price | $ 50.41 | ||
Number of Shares | 7,160 | 3,912 | 4,078 |
Weighted Average Exercise Price | $ 50.41 | $ 106 | $ 614 |
Warrant One [Member] | |||
Exercise Price | $ 9.44 | ||
Number of Shares | 191 | ||
Expiration Date | 2018-03 | ||
Weighted Average Exercise Price | $ 9.44 | ||
Warrant Two [Member] | |||
Exercise Price | $ 10 | ||
Number of Shares | 4,000 | ||
Expiration Date | 2021-06 | ||
Weighted Average Exercise Price | $ 10 | ||
Warrant Three [Member] | |||
Exercise Price | $ 50 | ||
Number of Shares | 1,161 | ||
Weighted Average Exercise Price | $ 50 | ||
Warrant Three [Member] | Minimum [Member] | |||
Expiration Date | 2017-03 | ||
Warrant Three [Member] | Maximum [Member] | |||
Expiration Date | 2017-07 | ||
Warrant Four [Member] | |||
Exercise Price | $ 55 | ||
Number of Shares | 1,620 | ||
Weighted Average Exercise Price | $ 55 | ||
Warrant Four [Member] | Minimum [Member] | |||
Expiration Date | 2018-06 | ||
Warrant Four [Member] | Maximum [Member] | |||
Expiration Date | 2019-03 | ||
Warrant Five [Member] | |||
Exercise Price | $ 200 | ||
Number of Shares | 104 | ||
Weighted Average Exercise Price | $ 200 | ||
Warrant Five [Member] | Minimum [Member] | |||
Expiration Date | 2016-12 | ||
Warrant Five [Member] | Maximum [Member] | |||
Expiration Date | 2017-01 | ||
Warrant Six [Member] | |||
Exercise Price | $ 1,800 | ||
Number of Shares | 84 | ||
Expiration Date | 2017-07 | ||
Weighted Average Exercise Price | $ 1,800 |
STOCKHOLDERS' DEFICIT (Detail39
STOCKHOLDERS' DEFICIT (Details Narrative) - USD ($) | Sep. 29, 2016 | Sep. 22, 2016 | Sep. 20, 2016 | Aug. 24, 2016 | Apr. 05, 2016 | Jan. 15, 2016 | Aug. 20, 2015 | Jan. 08, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 | Mar. 26, 2013 | Dec. 10, 2012 | Mar. 22, 2012 | Aug. 03, 2006 |
Common stock authorized previously | 180,000,000 | ||||||||||||||
Common stock authorized | 500,000,000 | 500,000,000 | |||||||||||||
Description of reverse stock-split | 1-for-200 | 1-for-200 | Approved a 1-for-200 reverse stock-split which was effected on September 21, 2016. | ||||||||||||
Common and preferred stock authorized | 515,000,000 | ||||||||||||||
Blank-check preferred stock authorized | 15,000,000 | ||||||||||||||
Blank-check preferred stock par value (in dollars per share) | $ 0.001 | ||||||||||||||
Common stock issued | 200 | 1,941,061 | 512,405 | ||||||||||||
Common stock outstanding | 200 | 1,941,061 | 512,405 | ||||||||||||
Number of options outstanding | 223,120 | 71,183 | 62,120 | ||||||||||||
Number of options exercised | |||||||||||||||
Common stock exercise price (in dollars per share) | $ 50.98 | $ 150 | $ 168 | ||||||||||||
Number of stock options granted | 152,250 | 10,000 | |||||||||||||
Number of shares | 223,120 | ||||||||||||||
Total unrecognized stock-based compensation | $ 104,400 | ||||||||||||||
Consulting Agreement [Member] | Dian Griesel International [Member] | |||||||||||||||
Monthly professional fees | $ 5,000 | ||||||||||||||
Consulting Agreement [Member] | Dian Griesel International [Member] | |||||||||||||||
Aggregate intrinsic value of awarded shares | $ 6,900 | ||||||||||||||
Number of shares issued upon services | 1,500 | ||||||||||||||
Minimum [Member] | |||||||||||||||
Description of reverse stock-split | 1-for-10 | ||||||||||||||
Maximum [Member] | |||||||||||||||
Description of reverse stock-split | 1-for-200 | ||||||||||||||
Mr. George Carpenter [Member] | |||||||||||||||
Number of awarded shares | 5,000 | ||||||||||||||
Mr. Paul Buck [Member] | |||||||||||||||
Number of awarded shares | 5,000 | ||||||||||||||
Mr. George Carpenter & Mr. Paul Buck [Member] | |||||||||||||||
Weighted exercise price of awarded shares (in dollars per share) | $ 5.10 | ||||||||||||||
Aggregate intrinsic value of awarded shares | $ 51,000 | ||||||||||||||
Description of vesting rights | 50% vested on the date of grant and the remaining 50% vest pro rata over twelve months starting on the date of grant. | ||||||||||||||
Intrinsic value of award granted booked as prepaid expenses | $ 25,500 | 12,700 | |||||||||||||
Amortization of prepaid expenses | $ 12,800 | ||||||||||||||
Stock Compensation Plan [Member] | |||||||||||||||
Weighted exercise price of awarded shares (in dollars per share) | $ 5.10 | ||||||||||||||
Aggregate intrinsic value of awarded shares | $ 70,100 | ||||||||||||||
Stock Compensation Plan [Member] | Other Directors [Member] | |||||||||||||||
Number of awarded shares | 1,250 | ||||||||||||||
Stock Compensation Plan [Member] | Geoffrey E. Harris [Member] | |||||||||||||||
Number of awarded shares | 2,500 | ||||||||||||||
Stock Compensation Plan [Member] | Robin L. Smith [Member] | |||||||||||||||
Number of awarded shares | 5,000 | ||||||||||||||
Options [Member] | Management [Member] | $0.055 [Member] | |||||||||||||||
Number of awarded shares | 1,250 | ||||||||||||||
Common stock exercise price (in dollars per share) | $ 11 | ||||||||||||||
Number of shares | 8,750 | ||||||||||||||
Expiration period | 36 months | ||||||||||||||
2012 Omnibus Incentive Compensation Plan [Member] | |||||||||||||||
Aggregate intrinsic value of awarded shares | $ 840,000 | $ 720,000 | |||||||||||||
Number of shares reserved for future issuance | 135,354 | ||||||||||||||
Number of options outstanding | 220,896 | ||||||||||||||
Common stock exercise price (in dollars per share) | $ 50 | ||||||||||||||
Number of options authorized | 500,000 | 200,000 | 75,000 | 27,500 | 1,667 | ||||||||||
Number of stock options granted | 1,250 | ||||||||||||||
Description of vesting rights | The option vesting is contingent upon the achievement of agreed upon goals. | ||||||||||||||
Description of plan terms | (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. | ||||||||||||||
Intrinsic value of award granted booked as prepaid expenses | $ 770,000 | ||||||||||||||
Amortization of prepaid expenses | $ 70,000 | ||||||||||||||
2012 Omnibus Incentive Compensation Plan [Member] | Mr. George Carpenter [Member] | |||||||||||||||
Number of awarded shares | 32,000 | ||||||||||||||
Description of vesting rights | a) 25% vested on the date of grant, (b) 25% vested on the date that we received CNS approval to bill Medicare, (c) 25% will vest upon signing a healthcare system to use our PEER technology and (d) 25% will vest upon signing a multi-practitioner group to use our PEER technology. | ||||||||||||||
2012 Omnibus Incentive Compensation Plan [Member] | Mr. Paul Buck [Member] | |||||||||||||||
Number of awarded shares | 32,000 | ||||||||||||||
Description of vesting rights | (a) 25% vested on the date of grant, (b) 25% vested on the date that we received CNS approval to bill Medicare, (c) 25% will vest upon signing a healthcare system to use our PEER technology and (d) 25% will vest upon up-listing to an exchange in 1 year. | ||||||||||||||
2012 Omnibus Incentive Compensation Plan [Member] | Geoffrey E. Harris [Member] | |||||||||||||||
Weighted exercise price of awarded shares (in dollars per share) | $ 6 | ||||||||||||||
Number of awarded shares | 20,000 | ||||||||||||||
2012 Omnibus Incentive Compensation Plan [Member] | Robin L. Smith [Member] | |||||||||||||||
Number of awarded shares | 40,000 | ||||||||||||||
Description of vesting rights | (a) 20% vested on the date of grant, (b) 20% vested upon receiving CMS approval to bill Medicare, (c) 20% will vest upon signing a healthcare system to use our PEER technology, (d) 20% will vest upon signing a multi-practitioner group to use our PEER technology, and (e) 20% will vest upon up-listing to an exchange in 1 year. | ||||||||||||||
2012 Omnibus Incentive Compensation Plan [Member] | Staff Members [Member] | |||||||||||||||
Number of awarded shares | 1,000 | ||||||||||||||
Issuance date | Nov. 1, 2016 | ||||||||||||||
Common stock exercise price (in dollars per share) | $ 5.10 | ||||||||||||||
Number of stock options granted | 7,250 | ||||||||||||||
Description of vesting rights | These shares vest pro-rata over 12 months starting on the date of grant. | ||||||||||||||
2012 Omnibus Incentive Compensation Plan [Member] | Mr. Zachary McAdoo [Member] | |||||||||||||||
Number of awarded shares | 20,000 | ||||||||||||||
2012 Omnibus Incentive Compensation Plan [Member] | Mr. Andrew H. Sassine [Member] | |||||||||||||||
Number of awarded shares | 20,000 | ||||||||||||||
2012 Omnibus Incentive Compensation Plan [Member] | John Pappajohn [Member] | |||||||||||||||
Weighted exercise price of awarded shares (in dollars per share) | $ 6 | ||||||||||||||
Number of awarded shares | 20,000 | ||||||||||||||
2012 Omnibus Incentive Compensation Plan [Member] | Robert Follman (Follman Family Trust) [Member] | |||||||||||||||
Weighted exercise price of awarded shares (in dollars per share) | $ 6 | ||||||||||||||
Number of awarded shares | 20,000 | ||||||||||||||
2012 Omnibus Incentive Compensation Plan [Member] | Mr. Michal Votruba [Member] | |||||||||||||||
Weighted exercise price of awarded shares (in dollars per share) | $ 6 | ||||||||||||||
Number of awarded shares | 20,000 | ||||||||||||||
2012 Omnibus Incentive Compensation Plan [Member] | Thomas Tierney (Tierney Family Trust) [Member] | |||||||||||||||
Weighted exercise price of awarded shares (in dollars per share) | $ 6 | ||||||||||||||
Number of awarded shares | 20,000 | ||||||||||||||
Aggregate intrinsic value of awarded shares | $ 120,000 | ||||||||||||||
2012 Omnibus Incentive Compensation Plan [Member] | Restricted Stock [Member] | |||||||||||||||
Number of equity instruments other than options outstanding | 143,750 | ||||||||||||||
2012 Omnibus Incentive Compensation Plan [Member] | Restricted Stock [Member] | Robin L. Smith [Member] | |||||||||||||||
Weighted exercise price of awarded shares (in dollars per share) | $ 11 | ||||||||||||||
Number of awarded shares | 3,750 | ||||||||||||||
Aggregate intrinsic value of awarded shares | $ 41,300 | ||||||||||||||
Issuance date | Oct. 30, 2015 | ||||||||||||||
2006 Stock Incentive Plan [Member] | |||||||||||||||
Number of shares reserved for future issuance | 3,339 | ||||||||||||||
Number of options outstanding | 2,224 | ||||||||||||||
Number of options exercised | 355 | ||||||||||||||
Number of shares expired | 729 | ||||||||||||||
2006 Stock Incentive Plan [Member] | Minimum [Member] | |||||||||||||||
Common stock exercise price (in dollars per share) | $ 720 | ||||||||||||||
2006 Stock Incentive Plan [Member] | Maximum [Member] | |||||||||||||||
Common stock exercise price (in dollars per share) | $ 6,540 | ||||||||||||||
2006 Stock Incentive Plan [Member] | Restricted Stock [Member] | |||||||||||||||
Number of equity instruments other than options outstanding | 31 |
STOCKHOLDERS' DEFICIT (Detail40
STOCKHOLDERS' DEFICIT (Details Narrative 1) - USD ($) | Jun. 10, 2016 | Dec. 23, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2014 |
Accrued interest | $ 317,000 | ||||
Warrants [Member] | |||||
Warrant outstanding | 7,160 | 3,912 | 4,078 | ||
Warrant exercise price (in dollars per share) | $ 50.41 | ||||
Finder's Fee Agreement [Member] | Warrants [Member] | Maxim Group LLC [Member] | |||||
Number of shares called | 4,000 | ||||
Finder's fee paid | $ 20,000 | ||||
Second Amended Note & Warrant Agreement [Member] | Secured Convertible Promissory Notes ( December 2015 Notes) [Member] | |||||
Face amount | $ 1,000,000 | ||||
Accrued interest | $ 317,000 | ||||
Debt conversion price (in dollars per share) | $ 5 | ||||
Second Amended Note & Warrant Agreement [Member] | Maxim Group LLC [Member] | |||||
Face amount | $ 200,000 | ||||
Second Amended Note & Warrant Agreement [Member] | Warrants [Member] | |||||
Face amount | $ 6,000,000 | ||||
Number of shares called | 1,263,406 | ||||
Debt conversion price (in dollars per share) | $ 0.25 | ||||
Number of shares cancelled | 600,000 | ||||
Warrant outstanding | 7,160 | ||||
Warrant exercise price (in dollars per share) | $ 0.05 | ||||
Second Amended Note & Warrant Agreement [Member] | Warrants [Member] | Minimum [Member] | |||||
Warrant exercise price (in dollars per share) | $ 9.44 | ||||
Second Amended Note & Warrant Agreement [Member] | Warrants [Member] | Maximum [Member] | |||||
Warrant exercise price (in dollars per share) | 1,800 | ||||
Second Amended Note & Warrant Agreement [Member] | Warrants [Member] | Weighted Average [Member] | |||||
Warrant exercise price (in dollars per share) | $ 50.41 |
INCOME TAXES (Details)
INCOME TAXES (Details) | 12 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Income Tax Disclosure [Abstract] | ||
Federal income tax (benefit) at statutory rates | (34.00%) | (34.00%) |
Stock-based compensation | (1.35%) | (0.40%) |
Extinguishment of debt | ||
Change in valuation allowance | (79.92%) | (16.00%) |
True-ups and other adjustments | (47.26%) | (7.62%) |
State tax benefit | (0.02%) | (5.98%) |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) - USD ($) | Sep. 30, 2016 | Sep. 30, 2015 |
Deferred income tax assets: | ||
Net operating loss carryforward | $ 17,492,350 | $ 13,718,300 |
Deferred interest, consulting and compensation liabilities | 3,974,100 | 3,596,900 |
Amortization | ||
Deferred income tax assets - other | 5,486 | 5,600 |
Deferred income tax assets - gross | 21,471,936 | 17,320,800 |
Deferred income tax liabilities - other | ||
Deferred income tax asset - net before valuation allowance | 21,471,936 | 17,320,800 |
Valuation allowance | (21,471,936) | (17,320,800) |
Deferred income tax asset - net |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) | 12 Months Ended |
Sep. 30, 2016USD ($) | |
State and Local Jurisdiction [Member] | |
Net operating loss carryforwards | $ 34,100,000 |
Net operating loss carryforwards, expiration date | Sep. 30, 2017 |
Domestic Tax Authority [Member] | |
Net operating loss carryforwards | $ 45,700,000 |
Net operating loss carryforwards, expiration date | Sep. 30, 2022 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) | Sep. 06, 2015USD ($)Number | Jan. 08, 2015USD ($)$ / sharesshares | Jan. 05, 2015USD ($) | Sep. 30, 2016USD ($)Number | Sep. 30, 2016USD ($)Number$ / sharesshares | Sep. 30, 2015USD ($)$ / sharesshares | Mar. 25, 2015USD ($) | Dec. 23, 2015USD ($) | Sep. 15, 2015USD ($) | Jun. 02, 2015USD ($) | Mar. 28, 2015Number | Mar. 18, 2015USD ($) | Sep. 22, 2014USD ($) | Oct. 19, 2012USD ($) |
Purchase of convertible note | $ 6,000,000 | $ 6,000,000 | $ 3,000,000 | |||||||||||
Marketing expense due | $ 426,600 | $ 426,600 | $ 852,000 | |||||||||||
Number of stock options granted | shares | 152,250 | 10,000 | ||||||||||||
Exercise price (in dollars per share) | $ / shares | $ 5.95 | $ 16 | ||||||||||||
Robert Follman (Follman Family Trust) [Member] | October 2012 Note [Member] | ||||||||||||||
Purchase of convertible note | $ 200,000 | |||||||||||||
Seven Accredited Investors [Member] | Note Warrant [Member] | ||||||||||||||
Number of accredited investors | Number | 7 | 7 | ||||||||||||
Original Note Purchase Agreement [Member] | 5% Senior Secured Notes Convertible (the "September 2014 Notes") [Member] | ||||||||||||||
Purchase of convertible note | $ 3,000,000 | $ 3,121,900 | ||||||||||||
Original Note Purchase Agreement [Member] | RSJ Private Equity & Nine Accredited Investors [Member] | 5% Senior Secured Notes Convertible (the "September 2014 Notes") [Member] | ||||||||||||||
Number of accredited investors | Number | 9 | 9 | ||||||||||||
Original Note Purchase Agreement [Member] | John Pappajohn [Member] | 5% Senior Secured Notes Convertible (the "September 2014 Notes") [Member] | ||||||||||||||
Purchase of convertible note | $ 100,000 | $ 100,000 | $ 100,000 | $ 200,000 | ||||||||||
Original Note Purchase Agreement [Member] | John Pappajohn [Member] | 5% Senior Secured Notes Convertible (the "September 2014 Notes") [Member] | Private Placement [Member] | ||||||||||||||
Proceeds from issuance of private placement | $ 50,000 | |||||||||||||
Number of accredited investors | Number | 4 | |||||||||||||
Amendment Note Purchase Agreement [Member] | John Pappajohn [Member] | Secured Convertible Promissory Notes (September 2015 Notes) [Member] | ||||||||||||||
Purchase of convertible note | $ 100,000 | |||||||||||||
Marketing Services Consulting Agreement [Member] | Decision Calculus Associates (Jill Carpenter) [Member] | ||||||||||||||
Marketing expense paid | $ 280,000 | |||||||||||||
Marketing expense due | $ 130,000 | $ 130,000 | ||||||||||||
Marketing expense paid per month | $ 10,000 | |||||||||||||
Three-Month Long Consulting Engagement With Dr. Eric Warner [Member] | ||||||||||||||
Total professional fees | $ 30,000 | |||||||||||||
Number of stock options granted | shares | 250,000 | |||||||||||||
Exercise price (in dollars per share) | $ / shares | $ 0.25 | |||||||||||||
Fair value of option | $ 28,300 | |||||||||||||
Monthly professional fees | $ 10,000 | |||||||||||||
Governance Agreements [Member] | Termination Agreements With SAIL Capital Partners [Member] | ||||||||||||||
Number of directors nominated under agreement | Number | 3 | |||||||||||||
Governance Agreements [Member] | Termination Agreements With Equity Dynamics,Inc [Member] | ||||||||||||||
Number of directors nominated under agreement | Number | 4 |
LOSS PER SHARE (Details)
LOSS PER SHARE (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Net Loss for computation of basic and diluted net loss per share: | ||
Net loss | $ (5,940,900) | $ (3,379,400) |
Basic and Diluted net loss per share: | ||
Basic net loss per share (in dollars per share) | $ (9.26) | $ (6.64) |
Basic and Diluted weighted average shares outstanding (in shares) | 641,844 | 509,066 |
Convertible Debt [Member] | ||
Anti-dilutive common equivalent shares not included in the computation of dilutive net loss per share: | ||
Anti-dilutive common equivalent shares | 1,441,344 | 50,348 |
Options [Member] | ||
Anti-dilutive common equivalent shares not included in the computation of dilutive net loss per share: | ||
Anti-dilutive common equivalent shares | 74,588 | 63,634 |
Warrants [Member] | ||
Anti-dilutive common equivalent shares not included in the computation of dilutive net loss per share: | ||
Anti-dilutive common equivalent shares | 3,484 | 4,132 |
COMMITMENTS AND CONTINGENT LI46
COMMITMENTS AND CONTINGENT LIABILITIES (Details) | Sep. 30, 2016USD ($) |
Operating Lease Obligations | |
Operating Lease Obligations, Less than 1 year | $ 73,100 |
Operating Lease Obligations, 1 to 3 years | 26,800 |
Operating Lease Obligations, 3 to 5 years | |
Operating Lease Obligations, More than 5 years | |
Operating Lease Obligations, Total | 99,900 |
Capital Lease Obligations | |
Capital Lease Obligations, Less than 1 year | 1,200 |
Capital Lease Obligations, 1 to 3 years | 4,200 |
Capital Lease Obligations, 3 to 5 years | 500 |
Capital Lease Obligations, More than 5 years | |
Capital Lease Obligations, Total | 5,900 |
Total Lease Obligations | |
Total, Less than 1 year | 74,300 |
Total, 1 to 3 years | 31,000 |
Total, 3 to 5 years | 500 |
Total, More than 5 years | |
Total | $ 105,800 |
COMMITMENTS AND CONTINGENT LI47
COMMITMENTS AND CONTINGENT LIABILITIES (Details Narrative) | Feb. 02, 2016USD ($)ft² | Jan. 22, 2016 | Jan. 20, 2016USD ($) | Apr. 24, 2013USD ($) | Mar. 06, 2013USD ($) | Sep. 30, 2016USD ($)ft²Number$ / shares | Sep. 30, 2015USD ($) | Sep. 19, 2016USD ($)shares | Dec. 23, 2015USD ($)$ / sharesshares |
Loss Contingencies [Line Items] | |||||||||
Accrued interest | $ 317,000 | ||||||||
Operating leases monthly lease payments | $ 1,856 | 4,580 | |||||||
Operating leases rent expense | 64,900 | $ 48,900 | |||||||
Capital leases future minimum payments due | 5,900 | ||||||||
Capital leases future minimum payments due for 2017 | 1,200 | ||||||||
Capital leases future minimum payments due for 2018-2020 | 1,400 | ||||||||
Capital leases future minimum payments due for 2021 | 500 | ||||||||
Headquarters and Neurometric Services [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Operating leases term of contract | 24 months | ||||||||
Operating leases monthly lease payments | 2,290 | ||||||||
Operating leases rent expense | $ 4,809 | ||||||||
Area of land | ft² | 2,290 | ||||||||
Commence period | Feb. 1, 2016 | ||||||||
Expiration period | Jan. 31, 2018 | ||||||||
EEG Equipment [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Operating leases term of contract | 23 months 15 days | ||||||||
Operating leases monthly lease payments | $ 928 | $ 325 | |||||||
Operating leases rent expense | $ 1,911 | ||||||||
Proceeds from long-term capital lease obligations | $ 8,900 | ||||||||
Capital lease term | 36 months | ||||||||
Area of land | ft² | 1,092 | ||||||||
Commence period | Feb. 15, 2016 | ||||||||
Expiration period | Jan. 31, 2018 | ||||||||
Canon Copier [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Operating leases term of contract | 60 months | ||||||||
Operating leases monthly lease payments | $ 135 | ||||||||
Capital leases future minimum payments due | $ 5,900 | ||||||||
Financial lease to acquire | $ 6,700 | ||||||||
Leonard J. Brandt and Brandt Ventures, GP v. CNS Response, Inc., Sail Venture Partners and David Jones [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Damages sought value | $ 170,000 | 250,000 | |||||||
Potential monetary settlement | $ 225,000 | ||||||||
Leonard J. Brandt and Brandt Ventures, GP v. CNS Response, Inc., Sail Venture Partners and David Jones [Member] | Common Stock [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Number of shares converted | Number | 5,000 | ||||||||
Leonard J. Brandt and Brandt Ventures, GP v. CNS Response, Inc., Sail Venture Partners and David Jones [Member] | Long-Term Promissory Note [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Face amount | $ 50,000 | ||||||||
Number of shares converted | Number | 5,000 | ||||||||
Conversion price (in dollars per share) | $ / shares | $ 10 | ||||||||
Warrants [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Warrant exercise price (in dollars per share) | $ / shares | $ 50.41 | ||||||||
Second Amended Note & Warrant Agreement [Member] | Warrants [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Number of shares called | shares | 1,263,406 | ||||||||
Face amount | $ 6,000,000 | ||||||||
Conversion price (in dollars per share) | $ / shares | $ 0.25 | ||||||||
Warrant exercise price (in dollars per share) | $ / shares | $ 0.05 | ||||||||
Second Amended Note & Warrant Agreement [Member] | Warrants [Member] | Leonard J. Brandt and Brandt Ventures, GP v. CNS Response, Inc., Sail Venture Partners and David Jones [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Number of shares called | shares | 10,047 | ||||||||
Face amount | $ 50,000 | ||||||||
Second Amended Note & Warrant Agreement [Member] | Secured Convertible Promissory Notes ( December 2015 Notes) [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Accrued interest | $ 317,000 | ||||||||
Face amount | $ 1,000,000 | ||||||||
Conversion price (in dollars per share) | $ / shares | $ 5 |
SIGNIFICANT CUSTOMERS (Details
SIGNIFICANT CUSTOMERS (Details Narrative) - Customer Concentration Risk [Member] - Number | 12 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Sales Revenue, Services, Net [Member] | ||
Concentration Risk [Line Items] | ||
Number of customers | 4 | 5 |
Percentage of concentration risk | 55.00% | 58.00% |
Accounts Receivable [Member] | ||
Concentration Risk [Line Items] | ||
Number of customers | 3 | 3 |
Percentage of concentration risk | 69.00% | 48.00% |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) | Dec. 21, 2016USD ($)$ / sharesshares | Dec. 06, 2016$ / sharesshares | Nov. 01, 2016shares | Oct. 02, 2016$ / sharesshares | Sep. 22, 2016$ / sharesshares | Apr. 05, 2016shares | Jan. 08, 2015shares | Nov. 30, 2016USD ($)Number$ / sharesshares | Sep. 30, 2016shares | Sep. 30, 2015shares | Sep. 29, 2016$ / shares | Mar. 26, 2013shares | Dec. 10, 2012shares | Mar. 22, 2012shares |
Number of awarded shares | 152,250 | 10,000 | ||||||||||||
Common Stock [Member] | ||||||||||||||
Number of common stock issued | 1,500 | |||||||||||||
2012 Omnibus Incentive Compensation Plan [Member] | ||||||||||||||
Number of options authorized | 500,000 | 200,000 | 75,000 | 27,500 | 1,667 | |||||||||
Description of plan terms | (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. | |||||||||||||
Number of awarded shares | 1,250 | |||||||||||||
Description of vesting rights | The option vesting is contingent upon the achievement of agreed upon goals. | |||||||||||||
2012 Omnibus Incentive Compensation Plan [Member] | Staff Members [Member] | ||||||||||||||
Number of awarded shares | 7,250 | |||||||||||||
Description of vesting rights | These shares vest pro-rata over 12 months starting on the date of grant. | |||||||||||||
2012 Omnibus Incentive Compensation Plan [Member] | Mr. Robin L. Smith [Member] | ||||||||||||||
Description of vesting rights | (a) 20% vested on the date of grant, (b) 20% vested upon receiving CMS approval to bill Medicare, (c) 20% will vest upon signing a healthcare system to use our PEER technology, (d) 20% will vest upon signing a multi-practitioner group to use our PEER technology, and (e) 20% will vest upon up-listing to an exchange in 1 year. | |||||||||||||
2012 Omnibus Incentive Compensation Plan [Member] | Mr. John Pappajohn [Member] | ||||||||||||||
Weighted exercise price of awarded shares (in dollars per share) | $ / shares | $ 6 | |||||||||||||
2012 Omnibus Incentive Compensation Plan [Member] | Mr. Thomas Tierney (Tierney Family Trust) [Member] | ||||||||||||||
Weighted exercise price of awarded shares (in dollars per share) | $ / shares | $ 6 | |||||||||||||
Subsequent Event [Member] | Staff Members [Member] | ||||||||||||||
Number of awarded shares | 102,000 | |||||||||||||
Description of vesting rights | Vest pro-rata over 12 months starting on the date of grant. | |||||||||||||
Weighted exercise price of awarded shares (in dollars per share) | $ / shares | $ 6 | |||||||||||||
Subsequent Event [Member] | Six Accredited Investors [Member] | Private Placement [Member] | ||||||||||||||
Number of common stock issued | 160,000 | |||||||||||||
Proceeds from issuance of private placement | $ | $ 1,000,000 | |||||||||||||
Number of accredited investors | Number | 6 | |||||||||||||
Common stock issued price per share | $ / shares | $ 6.25 | |||||||||||||
Subsequent Event [Member] | Mr. Robin L. Smith [Member] | Private Placement [Member] | ||||||||||||||
Number of common stock issued | 16,000 | |||||||||||||
Proceeds from issuance of private placement | $ | $ 100,000 | |||||||||||||
Subsequent Event [Member] | Mr. John Pappajohn [Member] | Private Placement [Member] | ||||||||||||||
Number of common stock issued | 32,000 | |||||||||||||
Proceeds from issuance of private placement | $ | $ 200,000 | |||||||||||||
Subsequent Event [Member] | Mr. Thomas Tierney (Tierney Family Trust) [Member] | Private Placement [Member] | ||||||||||||||
Number of common stock issued | 32,000 | |||||||||||||
Proceeds from issuance of private placement | $ | $ 200,000 | |||||||||||||
Subsequent Event [Member] | Aspire Capital Fund, LLC, an Illinois Limited Liability Company [Member] | Common Stock [Member] | Purchase Agreement [Member] | ||||||||||||||
Purchase agreement term | 30 months | |||||||||||||
Subsequent Event [Member] | Aspire Capital Fund, LLC, an Illinois Limited Liability Company [Member] | Common Stock [Member] | Purchase Agreement [Member] | Maximum [Member] | ||||||||||||||
Number of common stock issued | 10,000,000 | |||||||||||||
Subsequent Event [Member] | Aspire Capital Fund, LLC, an Illinois Limited Liability Company [Member] | Common Stock [Member] | Purchase Notice [Member] | ||||||||||||||
Description of purchase price | 1) the lowest sale price of the Company’s common stock on the purchase date; or 2) the arithmetic average of the three (3) lowest closing sale prices for the Company’s common stock during the twelve (12) consecutive trading days ending on the trading day immediately preceding the purchase date. | |||||||||||||
Purchase price (in dollars per share) | $ / shares | $ 0.50 | |||||||||||||
Subsequent Event [Member] | Aspire Capital Fund, LLC, an Illinois Limited Liability Company [Member] | Common Stock [Member] | Purchase Notice [Member] | Maximum [Member] | ||||||||||||||
Common stock issued price per share | $ / shares | $ 0.50 | |||||||||||||
Number of common stock issued per business day | 50,000 | |||||||||||||
Subsequent Event [Member] | Aspire Capital Fund, LLC, an Illinois Limited Liability Company [Member] | Common Stock ("Commitment Shares") [Member] | Purchase Agreement [Member] | ||||||||||||||
Number of common stock issued | 80,000 | |||||||||||||
Subsequent Event [Member] | Four Accredited Investors [Member] | Private Placement [Member] | ||||||||||||||
Number of common stock issued | 48,000 | |||||||||||||
Proceeds from issuance of private placement | $ | $ 300,000 | |||||||||||||
Common stock issued price per share | $ / shares | $ 6.25 | |||||||||||||
Subsequent Event [Member] | 2012 Omnibus Incentive Compensation Plan [Member] | ||||||||||||||
Number of options authorized | 500,000 | |||||||||||||
Description of plan terms | (i) increase the total number of shares of Common Stock available for grant under the 2012 Plan from 75,000 shares to an aggregate of 500,000 shares, (ii) add an "evergreen" provision which, on January 1 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; |