Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | |
Sep. 30, 2018 | Jan. 09, 2019 | |
Entity Registrant Name | CLEANSPARK, INC. | |
Entity Central Index Key | 827,876 | |
Document Type | 10-K | |
Document Period End Date | Sep. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --09-30 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Is Entity Emerging Growth Company? | false | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Public Float | $ 29,017,804 | |
Entity Common Stock, Shares Outstanding | 39,740,596 | |
Document Fiscal Period Focus | FY | |
Document Fiscal Year Focus | 2,018 | |
Entity Shell Company | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Sep. 30, 2018 | Sep. 30, 2017 |
Current assets | ||
Cash | $ 412,777 | $ 57,128 |
Accounts receivable | 34,141 | 41,947 |
Cost in excess of billings | 52,439 | |
Prepaid expense and other current assets | 49,023 | 29,556 |
Total current assets | 548,380 | 128,631 |
Fixed assets, net | 86,731 | 125,441 |
Capitalized Software, net | 8,786,226 | 9,709,444 |
Intangible assets, net | 3,214,467 | 5,903,686 |
Goodwill | 4,919,858 | 4,919,858 |
Deposits | (5,742) | |
Total assets | 17,555,662 | 20,792,802 |
Current liabilities | ||
Accounts payable and accrued liabilities | 131,724 | 143,225 |
Convertible notes, net of unamortized discounts | 69,121 | |
Customer deposits | 16,000 | |
Due to related parties | 308,373 | 61,021 |
Loans from related parties | 382,790 | 73,333 |
Loans payable, net of unamortized discounts | 457,579 | 7,712 |
Total current liabilities | 1,349,587 | 301,291 |
Long- term liabilities | ||
Loans payable | 150,000 | 150,000 |
Total liabilities | 1,499,587 | 451,291 |
Stockholders' equity | ||
Common stock; $0.001 par value; 100,000,000 shares authorized; 36,116,447 and 33,409,471 shares issued and outstanding as of September 30, 2018 and September 30, 2017, respectively | 36,116 | 33,409 |
Preferred stock; $0.001 par value; 10,000,000 shares authorized; 1,000,000 and 1,000,000 shares issued and outstanding as of September 30, 2018 and September 30, 2017, respectively | 1,000 | 1,000 |
Additional paid-in capital | 82,958,490 | 40,240,468 |
Accumulated earnings (deficit) | (66,939,531) | (19,933,366) |
Total stockholders' equity | 16,056,075 | 20,341,511 |
Total liabilities and stockholders' equity | $ 17,555,662 | $ 20,792,802 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2018 | Sep. 30, 2017 | Apr. 13, 2017 |
Statement of Financial Position [Abstract] | |||
Common Stock, par value | $ 0.001 | $ 0.001 | |
Common Stock, Shares authorized | 100,000,000 | 100,000,000 | |
Common Stock, shares issued | 36,116,447 | 33,409,471 | 25,000 |
Preferred Stock, par value | $ 0.001 | $ 0.001 | |
Preferred Stock, Shares authorized | 10,000,000 | 10,000,000 | |
Preferred Stock, shares issued | 1,000,000 | 1,000,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Income Statement [Abstract] | ||
Revenues, net | $ 578,635 | $ 447,963 |
Cost of revenues | 390,774 | 296,295 |
Gross profit | 187,861 | 151,668 |
Operating expenses | ||
Professional fees | 1,271,005 | 1,016,934 |
Payroll expenses | 1,579,197 | 264,063 |
Product development | 1,375,650 | 1,067,556 |
Research and development | 7,190 | 591 |
General and administrative expenses | 279,679 | 365,819 |
Loss on disposal of assets | 12,817 | |
Impairment expense | 1,896,090 | 8,551,321 |
Depreciation and amortization | 854,981 | 2,250,784 |
Total operating expenses | 7,263,792 | 13,529,885 |
Loss from operations | (7,075,931) | (13,378,217) |
Other income (expense) | ||
Loss on settlement of debt | (41,092) | (117,414) |
Loss on derivative liability | (38,964,688) | |
Interest expense | (2,895) | |
Total other income (expense) | (39,930,234) | (120,309) |
Net loss | $ (47,006,165) | $ (13,498,526) |
Basic loss per common share | $ (1.36) | $ (0.42) |
Basic weighted average common shares outstanding | 34,517,986 | 32,182,107 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) | Preferred Stock | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Beginning balance, shares at Sep. 30, 2016 | 1,000,000 | 27,834,415 | |||
Beginning balance, amount at Sep. 30, 2016 | $ 1,000 | $ 27,834 | $ 39,068,127 | $ (6,434,840) | $ 32,662,121 |
Option and warrants issued for services, amount | 16,666 | 16,666 | |||
Shares issued upon exercise of warrants, shares | 4,399,056 | ||||
Shares issued upon exercise of warrants, amount | $ 4,399 | (4,399) | |||
Shares issued for direct investment, shares | 1,101,000 | ||||
Shares issued for direct investment, amount | $ 1,101 | 878,899 | 880,000 | ||
Shares issued for settlement of debt, shares | 50,000 | ||||
Shares issued for settlement of debt, amount | $ 50 | 212,450 | 212,500 | ||
Resolution of derivative liability | |||||
Preferred shares issued for services, shares | 25,000 | ||||
Preferred shares issued for services, amount | $ 25 | 68,725 | 68,725 | ||
Net loss | (13,498,526) | (13,498,526) | |||
Ending balance, shares at Sep. 30, 2017 | 1,000,000 | 33,409,471 | |||
Ending balance, amount at Sep. 30, 2017 | $ 1,000 | $ 33,409 | 40,240,468 | (19,933,366) | 20,341,511 |
Shares issued for services, shares | 30,000 | ||||
Shares issued for services, amount | $ 30 | 55,070 | 55,100 | ||
Option and warrants issued for services, amount | 1,507,418 | 1,507,418 | |||
Shares issued upon exercise of warrants, shares | 718,290 | ||||
Shares issued upon exercise of warrants, amount | $ 718 | 44,220 | 44,938 | ||
Commitment and returnable shares issued with debt, shares | 762,500 | ||||
Commitment and returnable shares issued with debt, amount | $ 763 | 547,765 | $ 548,528 | ||
Shares issued for direct investment, shares | 339,875 | 339,875 | |||
Shares issued for direct investment, amount | $ 340 | 271,560 | $ 271,900 | ||
Shares issued for settlement of debt, shares | 514,671 | ||||
Shares issued for settlement of debt, amount | $ 514 | 462,690 | 463,204 | ||
Fair value of tainted warrants reclassified to derivative liability, amount | (12,537,117) | (12,537,117) | |||
Resolution of derivative liability | 52,291,024 | 52,291,024 | |||
Shares issued to escrow as collateral, shares | 300,000 | ||||
Shares issued to escrow as collateral, amount | $ 300 | (300) | |||
Settlement of accounts payable, shares | 41,640 | ||||
Settlement of accounts payable, amount | $ 42 | 75,692 | 75,734 | ||
Net loss | (47,006,165) | (47,006,165) | |||
Ending balance, shares at Sep. 30, 2018 | 1,000,000 | 36,116,447 | |||
Ending balance, amount at Sep. 30, 2018 | $ 1,000 | $ 36,116 | $ 82,958,490 | $ (66,939,531) | $ 16,056,075 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Cash Flows from Operating Activities | ||
Net loss | $ (47,006,165) | $ (13,498,526) |
Loss on disposal of fixed assets | 12,817 | |
Stock based compensation | 1,502,343 | 135,546 |
Impairment expense | 1,896,090 | 8,551,321 |
Commitment shares issued with debt | 218,626 | |
Depreciation and amortization | 854,981 | 2,250,784 |
Amortization of capitalized software | 1,379,483 | 1,067,556 |
Loss on derivative liability | 38,964,688 | |
Loss on settlement of debt | 41,092 | 117,414 |
Amortization of debt discount | 638,090 | |
Changes in assets and liabilities | ||
(Increase) decrease in prepaid expenses and other current assets | 12,983 | (21,964) |
(Increase) decrease in deposits | 5,742 | (5,153) |
Increase in costs in excess of billings | (52,439) | |
Decrease in accounts receivable | 7,806 | 15,148 |
Increase (decrease) in customer deposits | (16,000) | 16,000 |
Increase in accounts payable | 44,807 | 144 |
Increase (decrease) in due to related parties | 247,352 | (2,952) |
Net cash used in operating activities | (1,260,521) | (1,361,865) |
Cash Flows from investing | ||
Purchase of intangible assets | (7,915) | (28,919) |
Purchase of fixed assets | (15,227) | (5,112) |
Investment in microgrid assets | (5,566) | |
Investment in capitalized software | (396,090) | (93,723) |
Cash received on sale of assets | 7,000 | |
Net cash used in investing activities | (419,232) | (126,320) |
Cash Flows from Financing Activities | ||
Payments on promissory notes | (101,143) | (20,255) |
Proceeds from promissory notes | 672,500 | 25,706 |
Proceeds from related part debts | 382,790 | 80,000 |
Payments on related party debts | (73,333) | (6,667) |
Proceeds from convertible debt, net of issuance costs | 837,750 | |
Proceeds from exercise of warrants | 44,938 | |
Proceeds from long term loans | 150,000 | |
Proceeds from issuance of common stock | 271,900 | 880,000 |
Net cash from financing activities | 2,035,402 | 1,108,784 |
Net increase (decrease) in Cash | 355,649 | (379,401) |
Beginning cash balance | 57,128 | 436,529 |
Ending cash balance | 412,777 | 57,128 |
Supplemental disclosure of cash flow information | ||
Cash paid for interest | 106,970 | 1,629 |
Cash paid for tax | ||
Non-Cash investing and financing transactions | ||
Cashless exercise of options | $ 4,399 | |
Stock issued to settle accounts payable | 75,734 | 212,500 |
Shares issued on conversion of debt and interest | 463,204 | |
Financing of prepaid insurance | $ 32,450 | |
Debt discount on convertible debt | 837,750 | |
Debt discount on promissory notes | 281,373 | |
Shares issued and held in escrow as collateral | 300 | |
Recognition of derivative liability due to tainted equity instruments | 12,537,117 | |
Resolution of derivative liability reclassified to additional paid in capital | $ 52,291,024 | |
Option expense capitalized as software development costs | 60,175 |
ORGANIZATION AND LINE OF BUSINE
ORGANIZATION AND LINE OF BUSINESS | 12 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Line of Business | 1. ORGANIZATION AND LINE OF BUSINESS Organization CleanSpark, Inc. (“we”, “our”, the "Company") was incorporated in the state of Nevada on October 15, 1987 as SmartData Corporation. SmartData conducted a 504-public offering in the State of Nevada in December 1987 and began trading publicly in January 1988. Due to a series of unfortunate events, including the untimely death of the founding CEO, SmartData discontinued active business operations in 1992. On March 25, 2014, we began operations in the alternative energy sector. In December 2014, the Company changed its name to Stratean Inc. through a short-form merger in order to better reflect the new business plan. On July 1, 2016, the Company entered into an Asset Purchase Agreement, as amended (the “Purchase Agreement”), with CleanSpark Holdings LLC, CleanSpark LLC, CleanSpark Technologies LLC and Specialized Energy Solutions, Inc. (together, the “Seller”). Pursuant to the Purchase Agreement, the Company acquired CleanSpark, LLC and all the assets related to the Seller and its line of business and assumed $200,000 in liabilities. In October 2016, the Company changed its name to CleanSpark, Inc. through a short-form merger in order to better reflect the brand identity. Line of Business Through the acquisition of CleanSpark, LLC, the Company provides microgrid solutions to military, commercial and residential properties. The services offered consist of turn-key microgrid implementation services, microgrid design and engineering, project development consulting services and solar photovoltaic installation and consulting. The work is performed under fixed price bid contracts and negotiated price contracts. The Company performed all of its work in California during the year ended September 30, 2018. |
SUMMARY OF SIGNIFICANT POLICIES
SUMMARY OF SIGNIFICANT POLICIES | 12 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT POLICIES | 2. SUMMARY OF SIGNIFICANT POLICIES This summary of significant accounting policies of CleanSpark Inc. is presented to assist in understanding the Company’s consolidated financial statements. The consolidated financial statements and notes are representations of the Company’s management, who are responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the consolidated financial statements. Basis of Presentation The Company has incurred losses for the past several years while developing infrastructure and its software platforms. As shown in the accompanying audited consolidated financial statements, the Company incurred net losses of $47,006,165 and $13,498,526 during the years ended September 30, 2018 and September 30, 2017, respectively. Additionally, as of September 30, 2018, the Company had a working capital deficit of approximately $801,207. In response to these conditions, subsequent to September 30, 2018 we have raised additional capital through the sale of debt and equity securities pursuant to a registration statement on Form S-3. (See Note 17 for additional details.) The Company’s Company’s Company’s management’s Principles of Consolidation The accompanying consolidated financial statements include the accounts of CleanSpark, Inc., and its wholly owned operating subsidiaries, CleanSpark, LLC, CleanSpark, II, LLC and CleanSpark Acquisition, Inc. All material intercompany transactions have been eliminated upon consolidation of these entities. Use of estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include estimates used to review the Company’s goodwill impairment, impairments and estimations of long-lived assets, revenue recognition on percentage of completion type contracts, allowances for uncollectible accounts, derivative instruments valuation, and the valuations of non-cash capital stock issuances. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable in 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 from these estimates under different assumptions or conditions. Revenue Recognition Revenues and related costs on construction contracts are recognized using the “percentage of completion method” of accounting in accordance with ASC 605-35, Accounting for Performance of Construction-Type and Certain Production Type Contracts (“ASC 605-35”). Under this method, contract revenues and related expenses are recognized over the performance period of the contract in direct proportion to the costs incurred as a percentage of total estimated costs for the entirety of the contract. Costs include direct material, direct labor, subcontract labor and any allocable indirect costs. All un-allocable indirect costs and corporate general and administrative costs are charged to the periods as incurred. However, in the event a loss on a contract is foreseen, the Company will recognize the loss as it is determined. Revisions in cost and profit estimates during the course of the contract are reflected in the accounting period in which the facts, which require the revision, become known. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Changes in job performance, job conditions, and estimated profitability, including those arising from contract penalty provisions, and final contract settlements may result in revisions to costs and income and are recognized in the period in which the revisions are determined. The Asset, “Costs in excess of billings”, represents revenues recognized in excess of amounts billed on contracts in progress. The Liability, “Billings in excess of costs”, represents billings in excess of revenues recognized on contracts in progress. At September 30, 2018 and September 30, 2017, the costs in excess of billings balance were $52,439 and $0, and the billings in excess of costs balance were $0 and $0, respectively. Accounts receivables are recorded on contracts for amounts currently due based upon progress billings, as well as retention, which are collectible upon completion of the contracts. Accounts payable to material suppliers and subcontractors are recorded for amounts currently due based upon work completed or materials received, as are retention due subcontractors, which are payable upon completion of the contract. General and administrative expenses are charged to operations as incurred and are not allocated to contract costs. Retention receivable is the amount withheld by a customer until a contract is completed. Retention receivables of $17,751 and $0 were included in the balance of trade accounts receivable as of September 30, 2018 and September 30, 2017, respectively. Accounts Receivable Cash and cash equivalents Concentration Risk At times throughout the year, the Company may maintain cash balances in certain bank accounts in excess of FDIC limits. As of September 30, 2018, the cash balance in excess of the FDIC limits was $149,429. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk in these accounts. The Company had certain customers whose revenue individually represented 10% or more of the Company’s total revenue. (See Note 17 for details.) Warranty Liability Stock-based compensation Compensation-Stock Compensation, Earnings (loss) per share Earnings Per Share, Long-lived Assets Intangible Assets and Goodwill The Company reviews its indefinite lived intangibles and goodwill for impairment annually or whenever events or circumstances indicate that the carrying amount of the asset exceeds its fair value and may not be recoverable. In accordance with its policies, the Company performed an assessment of indefinite lived intangibles and goodwill and determined there was no impairment for the years ended September 30, 2018 and 2017. Software Development Costs Commencing upon a product's release, capitalized software development costs are amortized to "Cost of revenues—software amortization " based on the ratio of current revenues to total projected revenues for the specific product, generally resulting in an amortization period of seven years for our current product offerings. In accordance with ASC 985-35 in recognition of the uncertainties involved in estimating future revenue, amortization will never be less than straight-line amortization of the products remaining estimated economic life. We evaluate the future recoverability of capitalized software development costs on a quarterly basis. For products that have been released in prior periods, the primary evaluation criterion is the actual performance of the software platform to which the costs relate. For products that are scheduled to be released in future periods, recoverability is evaluated based on the expected performance of the specific products to which the costs relate. Criteria used to evaluate expected product performance include: historical performance of comparable products developed with comparable technology; market performance of comparable software; orders for the product prior to its release; pending contracts and general market conditions. Significant management judgments and estimates are utilized in assessing the recoverability of capitalized costs. In evaluating the recoverability of capitalized costs, the assessment of expected product performance utilizes forecasted sales amounts and estimates of additional costs to be incurred. If revised forecasted or actual product sales are less than the originally forecasted amounts utilized in the initial recoverability analysis, the net realizable value may be lower than originally estimated in any given quarter, which could result in an impairment charge. Material differences may result in the amount and timing of expenses for any period if matters resolve in a manner that is inconsistent with management's expectations. If an impairment occurs the reduced amount of the capitalized software costs that have been written down to the net realizable value at the close of each annual fiscal period will be considered the cost for subsequent accounting purposes. Income taxes Income Taxes Reclassifications Segment Reporting Recently issued accounting pronouncements In May 2014, the FASB issued Accounting Standards Update No. 2014-09 Revenue from Contracts with Customers In July 2015, the FASB made a decision to defer the effective date of the new standard for one year and permit early adoption as of the original effective date. The new standard will be effective for the Company as of October 1, 2018. The Company has evaluated the impact of the adoption of this standard on its revenue recognition policy and does not believe it will have a material impact on its financial statements. The Company has evaluated all other recent accounting pronouncements, and believes that none of them will have a material effect on the Company's financial position, results of operations or cash flows. |
COSTS AND ESTIMATED EARNINGS ON
COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS | 12 Months Ended |
Sep. 30, 2018 | |
Health Care Organizations [Abstract] | |
COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS | 3. COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS The Asset, “Costs in excess of billings”, represents revenues recognized in excess of amounts billed on contracts in progress. The Liability, “Billings in excess of costs”, represents billings in excess of revenues recognized on contracts in progress. At September 30, 2018 and September 30, 2017, the costs in excess of billings balance were $52,439 and $0, and the billings in excess of costs balance were $0 and $0, respectively. The following is a summary of the costs and estimated earnings on contracts as of September 30, 2018. There were no open percentage-of-completion method contracts as of September 30, 2017. Year ended September 30, 2018 Costs incurred on contracts $ 292,990 Estimated earnings 114,471 407,461 Less billings to date (355,022) Total 52,439 Costs and estimated earnings in excess of billings 52,439 Billings in excess of costs and estimated earnings — Total $ 52,439 All contracts open as of September 30, 2018 are expected to be completed in the fiscal year ending September 30, 2019. |
CAPITALIZED SOFTWARE
CAPITALIZED SOFTWARE | 12 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Capitalized Software | 4. CAPITALIZED SOFTWARE Capitalized software consists of the following as of September 30, 2018 and September 30, 2017: September 30, 2018 September 30, 2017 mVSO software $ 4,708,203 $ 4,663,513 MPulse software 6,334,772 5,923,197 Less: accumulated amortization (2,256,749 ) (877,266) Capitalized Software, net $ 8,786,226 $ 9,709,444 In accordance with ASC 985-20 the Company capitalized $456,265 in software development costs (including capitalized stock compensation cost of $60,175) related to the enhancements created for our mPulse and mVSO 2.0 platforms during the year ended September 30, 2018. Capitalized software amortization recorded as product development expense for the years ended September 30, 2018 and 2017 was $1,379,483 and $1,067,556, respectively. During the year ended September 30, 2017, the Company recorded an impairment of $5,039,078 related directly to components of our original software that were replaced. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 12 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
INTANGIBLE AND OTHER ASSETS | 5. INTANGIBLE ASSETS Intangible assets consist of the following as of September 30, 2018 and September 30, 2017: September 30, 2018 September 30, 2017 Patents $ 71,962 $ 89,473 Websites 16,482 14,532 Brand and Client lists — 2,497,472 Trademarks 5,928 5,928 Engineering trade secrets 4,020,269 4,020,269 Software 26,990 26,990 Less: accumulated amortization (927,164 ) (750,978) Intangible assets, net $ 3,214,467 $ 5,903,686 Amortization expense for the years ended September 30, 2018 and 2017 was $802,287 and $675,379, respectively. During the years ended September 30, 2018 and 2017 the Company recorded an impairment of $1,894,847 and $0, respectively. |
FIXED ASSETS
FIXED ASSETS | 12 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
FIXED ASSETS | 6. FIXED ASSETS Fixed assets consist of the following as of September 30, 2018 and September 30, 2017: September 30, 2018 September 30, 2017 Machinery and equipment $ 130,191 $ 133,061 Furniture and fixtures 54,251 74,393 Total 184,442 207,454 Less: accumulated depreciation (97,711 ) (82,013) Fixed assets, net $ 86,731 $ 125,441 Depreciation expense for the years ended September 30, 2018 and 2017 was $52,694 and $102,054, respectively. In 2017, the Company also recorded additional depreciation expense of $1,601,936 related to microgrid assets, which were impaired in the year ended September 30, 2017. During the years ended September 30, 2018 and 2017 the Company recorded an impairment of fixed assets of $1,243 and $3,512,243, respectively. |
LOANS
LOANS | 12 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
LOANS | 7. LOANS Long term September 30, 2018 September 30, 2017 Long-term loans payable consist of the following: Promissory notes $ 150,000 $ 150,000 Total $ 150,000 $ 150,000 On November 11, 2017, the Company executed a 10% secured promissory note with a face value of $100,000 with an investor. Under the terms of the promissory note the Company received $100,000 and agreed to make monthly interest payments and repay the note principal 24 months from the date of issuance. The note is secured by 100,000 shares which would be issued to the note holder only in the case of an uncured default. As of September 30, 2018, the Company owed $100,000 in principal and $822 in accrued interest under the terms of the agreement and recorded interest expense of $6,411 for the year ended September 30, 2018. On December 5, 2017, the Company executed a 9% secured promissory note with a face value of $50,000 with an investor. Under the terms of the promissory note the Company received $50,000 and agreed to make monthly interest payments and repay the note principal 24 months from the date of issuance. The note is secured by 50,000 shares which would be issued to the note holder only in the case of an uncured default. As of September 30, 2018, The Company owed $50,000 in principal and $370 in accrued interest under the terms of the agreement and recorded interest expense of $2,552 for the year ended September 30, 2018. Current September 30, 2018 September 30, 2017 Current loans payable consist of the following: Promissory notes $ 628,951 $ — Insurance financing loans 10,257 7,712 Unamortized debt discount (181,629 ) — Total, net of unamortized discount $ 457,579 $ 7,712 Promissory Notes On September 5, 2017, the Company executed a 9% secured promissory note with a face value of $150,000 with an investor. Under the terms of the promissory note, the Company received $150,000 and agreed to make monthly interest payments and repay the note principal 24 months from the date of issuance. The note is secured by 150,000 shares which are held in escrow and would be issued to the note holder only in the case of an uncured default. As of September 30, 2018, the Company owed $150,000 in principal and $0 in accrued interest under the terms of the agreement and recorded interest expense of $13,500 during the year ended September 30, 2018. On October 6, 2017, the Company executed an unsecured variable interest rate promissory note with a maximum interest rate of 58.3% and a face value of $45,000 with a financial institution. Under the terms of the promissory note the Company received $45,000 and agreed to repay the note evenly over 12 months. As of September 30, 2018, the Company owed $3,750 in principal and $450 in accrued interest under the terms of the agreement and recorded interest expense of $14,175 during the year ended September 30, 2018. The Company repaid all principal and outstanding interest on October 1, 2018. On November 20, 2017, the Company executed a 10% unsecured promissory note with a face value of $80,000 with an investor. Under the terms of the promissory note the Company received $80,000 and agreed to make monthly interest payments and repay the note principal 12 months from the date of issuance. As of September 30, 2018, the Company owed $80,000 in principal and $0 in accrued interest under the terms of the agreement and recorded interest expense of $6,882 during the year ended September 30, 2018. On November 21, 2018, the investor extended the maturity date to December 31, 2018. The Company repaid all principal and outstanding interest on December 31, 2018. On January 12, 2018, the Company executed an unsecured variable interest rate promissory note with a maximum interest rate of 58.5% and a face value of $18,400 with a financial institution. Under the terms of the promissory note the Company received $18,400 and agreed to repay the note and interest evenly over 12 months. As of September 30, 2018, the Company owed $6,133 in principal and $184 in accrued interest under the terms of the agreement and recorded interest expense of $5,520 during the year ended September 30, 2018. The Company repaid all principal and outstanding interest on October 1, 2018. On February 27, 2018, we entered into an unsecured promissory note pursuant to which we borrowed $125,000. The note carries an original issue discount of 5.6% ($7,000). Interest under the promissory note was 10% per annum. Under the terms of the promissory note the Company agreed to make interest and principal payments equal to $2,500 or greater on a monthly basis. All unpaid balances under the note were due in full on August 1, 2018. The note was settled in full on August 1, 2018 through the issuance of a new promissory note. The Company recorded interest expense of $5,453 during the year ended September 30, 2018. The aggregate original issued issue discount has been accreted and charged to interest expenses as a financing expense in the amount of $7,000 during the year ended September 30, 2018. On May 22, 2018, the Company executed an unsecured variable interest rate promissory note with a maximum interest rate of 51.0% and a face value of $24,500 with a financial institution. Under the terms of the promissory note the Company received $24,500 and agreed to repay the note and interest evenly over 12 months. As of September 30, 2018, the Company owed $18,375 in principal and $1,960 in accrued interest under the terms of the agreement and recorded interest expense of $4,900 during the year ended September 30, 2018. The Company repaid all principal and outstanding interest on October 1, 2018. On June 15, 2018, we entered into a 10% secured promissory note with a face value of $116,600 pursuant to which we received $110,000, net of an original issue discount of 6% ($6,600). The Company also issued 116,600 5-year warrants exercisable at $0.80 in connection with issuance of the promissory note. Under the terms of the promissory note the Company agreed to make monthly interest payments and repay the note principal on December 15, 2018. The note is secured by the Company’s accounts receivable. As of September 30, 2018, the Company owed $116,600 in principal and $0 in accrued interest under the terms of the agreement and recorded interest expense of $3,418 during the year ended September 30, 2018. The Company has determined the value associated with the warrants issued in connection with the note to be $110,000 which has been recorded as a debt discount. The aggregate original issue discount, and debt discount related to the warrants have been accreted and charged to interest expenses as a financing expense in the amount of $68,176 for the year ended September 30, 2018. The unamortized discount as of September 30, 2018 amounted to $48,424. The Company repaid all principal and outstanding interest on January 2, 2019. On August 1, 2018, we entered into a 10% secured promissory note with a face value of $130,625 pursuant to which we received $125,000, net of an original issue discount of 4.5% ($5,625). The Company also issued 25,000 5-year warrants exercisable at $0.80 in connection with purchase of the promissory note. The proceeds of the note were used to settle in full a note issued on February 27, 2018. Under the terms of the promissory note the Company agreed to make monthly interest only payments and repay the note principal on November 30, 2018. The note is secured by the Company’s accounts receivable. As of September 30, 2018, the Company owed $127,748 in principal and $0 in accrued interest under the terms of the agreement and recorded interest expense of $2,171 during the year ended September 30, 2018. The Company has determined the value associated with the warrants issued in connection with the note to be $71,373 which has been recorded as a debt discount. The aggregate original issue discount, and debt discount related to the warrants have been accreted and charged to interest expenses as a financing expense in the amount of $38,499 the year ended September 30, 2018. The unamortized discount as of September 30, 2018 amounted to $38,499. The Company repaid all principal and outstanding interest on January 2, 2019. On August 14, 2018, the Company executed an unsecured variable interest rate promissory note with a maximum interest rate of 58.57% and a face value of $19,600 with a financial institution. Under the terms of the promissory note the Company received $19,600 and agreed to repay the note and interest evenly over 12 months. As of September 30, 2018, the Company owed $17,967 in principal and $784 in accrued interest under the terms of the agreement and recorded interest expense of $1,568 during the year ended September 30, 2018. The Company repaid all principal and outstanding interest on October 1, 2018. On September 20, 2018, the Company executed a 10% unsecured promissory note with a face value of $52,500 with an investor, net of an original issue discount of 5% ($2,500). Under the terms of the promissory note the Company received $50,000 and agreed to repay the note principal and all accrued interest on December 31, 2018. The Company also issued 25,000 5-year warrants exercisable at $0.80 in connection with purchase of the promissory note. As of September 30, 2018, the Company owed $50,000 in principal and $144 in accrued interest under the terms of the agreement and recorded interest expense of $144 during the year ended September 30, 2018. The Company has determined the value associated with the warrants issued in connection with the notes to be $50,000 which has been recorded as a debt discount. The aggregate original issue discount, and debt discount related to the warrants have been accreted and charged to interest expenses as a financing expense in the amount of $5,147 the year ended September 30, 2018. The unamortized discount as of September 30, 2018 amounted to $47,353. The Company repaid all principal and outstanding interest on December 31, 2018 On September 21, 2018, the Company executed a 10% unsecured promissory note with a face value of $52,500 with an investor, the note included an original issue discount of 5% ($2,500). Under the terms of the promissory note the Company received $50,000 and agreed to repay the note principal and all accrued interest on December 31, 2018. The Company also issued 25,000 5-year warrants exercisable at $0.80 in connection with purchase of the promissory note. As of September 30, 2018, the Company owed $50,000 in principal and $144 in accrued interest under the terms of the agreement and recorded interest expense of $144 during the year ended September 30, 2018. The Company has determined the value associated with the warrants issued in connection with the notes to be $50,000 which has been recorded as a debt discount. The aggregate original issue discount, and debt discount related to the warrants have been accreted and charged to interest expenses as a financing expense in the amount of $5,147 the year ended September 30, 2018. The unamortized discount as of September 30, 2018 amounted to $47,353. The Company repaid all principal and outstanding interest on December 31, 2018. Insurance financing loans In February 2018, the Company executed two unsecured 6.1% installment loans with a total face value of $35,089 with a financial institutional to finance its insurance policies. Under the terms of the installment notes the Company received $35,089 and agreed to make equal payments and repay the notes’ principal 10 months from their dates of issuance. As of September 30, 2018, the Company owed $10,257 in principal and $0 in accrued interest under the terms of the agreement. The Company repaid all principal and outstanding interest on December 1, 2018. |
CONVERTIBLE NOTES PAYABLE
CONVERTIBLE NOTES PAYABLE | 12 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
CONVERTIBLE NOTES PAYABLE | Convertible Notes Payable consists of the following: September 30, 2018 Labrys Fund, LP – March 23, 2018 Promissory Note Funding On March 23, 2018, we entered into a master convertible promissory note pursuant to which we could borrow up to $500,000. On March 23, 2018 the Company borrowed $200,000, less debt issuance costs of $15,750. The note carries an original issue discount of 10% ($20,000). Interest under the convertible promissory note is 12% per annum, and the principal and all accrued but unpaid interest is due on September 23, 2018. The Lender also received 237,500 commitment shares at execution as an inducement for entering into the agreement. The Company also incurred $15,750 of debt issuance costs on the note which was recorded as a debt discount. The note was convertible at any date after the issuance date at the noteholder’s option into shares of our common stock at a variable conversion price, The Conversion price equals the lesser of (1) 70% multiplied by the lowest "Trading Price" during the previous 20 Trading Day period ending on the latest complete Trading Day prior to the date of this Note and (2) 70% multiplied by the lowest "Trading Price" for the Common Stock during the 20 Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. The "Trading Price" as defined by the agreement is the lesser of: (a) the lowest trade price on the OTC Pink, OTCQB, or applicable trading market (the “OTC Market”) as reported by a reliable reporting service (“Reporting Service”) designated by the Holder and (b) the lowest closing bid price on the OTC Market as reported by a Reporting Service designated by the Holder. The Company recorded a debt discount in the amount of $85,348 in connection with the commitment shares and $98,902 in connection with the initial valuation of the derivative liability related to the embedded conversion option of the note to be amortized utilizing the effective interest method of accretion over the term of the note. On September 19, 2018, all principal and accrued interest of $220,000 and $12,730, respectively was converted into 258,589 shares of the Company’s common stock. The aggregate debt discount have been accreted and charged to interest expenses as a financing expense in the amount of $220,000 during the year ended September 30, 2018, respectively. — Total, net of unamortized discount $ — Auctus Fund, LLC – July 2, 2018 Promissory Note Funding On July 2, 2018 the Company entered into a Securities Purchase Agreement with Auctus Fund, LLC (“Auctus”), which was later amended on July 6, 2018, pursuant to which the Company issued to Auctus a Master Convertible Promissory Note (“Note”) pursuant to which the Company could borrow up to $500,000. The Company also incurred $11,900 of debt issuance costs on the note which was recorded as a debt discount. On July 11, Auctus paid $225,000 less $26,000 in legal and due diligence fees. The Note has a maturity date of six months for each tranche funded and the Company has agreed to pay interest on the unpaid principal balance of the Note at the rate of twelve percent (12%) per annum from the date on which the Note is issued (the “Issue Date”) until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. The Company has the right to prepay the Note, provided it makes a payment to Auctus as set forth in the Note within 180 days of its Issue Date. In connection with the issuance of the Note, the Company issued to Auctus, as a commitment fee, 137,500 shares of its common stock (the “Returnable Shares”) as well as 150,000 shares of its common stock (the “Non-Returnable Shares”), as further provided in the Note. The Returnable Shares shall be returned to the Company’s treasury if the Note is fully repaid and satisfied prior to the date, which is one hundred eighty (180) days following the Issue Date, subject further to the terms and conditions of the Note. The Note is convertible at any date after the issuance date at the noteholder’s option into shares of our common stock at a variable conversion price of 70% of the lowest closing market price of our common stock during the previous 20 days to the date of the notice of conversion, subject to adjustment in the case of default. The Note contains certain covenants, such as restrictions on: (i) distributions on capital stock, (ii) stock repurchases, (iii) certain loans, (iii) sales and the transfer of assets, and (iv) participation in 3(a)(10) transactions. The Note also contains certain anti-dilution provisions that apply in connection with any stock split, stock dividend, stock combination, recapitalization or similar transactions. In addition, subject to limited exceptions, Auctus will not have the right to convert any portion of the Note if Auctus, together with its affiliates, would beneficially own in excess of 4.99% of the number of shares of the Company’s common stock outstanding immediately after giving effect to its conversion. The Company recorded a debt discount in the amount of $130,829 in connection with the Non-returnable shares and $56,271 in connection with the initial valuation of the derivative liability related to the embedded conversion option of the Note to be amortized utilizing the effective interest method of accretion over the term of the Note. On September 21, 2018, all principal and accrued interest of $225,000 and $5,474, respectively was converted into 256,082 shares of the Company’s common stock. The aggregate debt discount have been accreted and charged to interest expenses as a financing expense in the amount of $225,000 during the year ended September 30, 2018. — Total, net of unamortized discount $ — EMA Financial, LLC – August 21, 2018 Promissory Note Funding On August 21, 2018 we entered into a Securities Purchase Agreement with EMA Financial, LLC, (“EMA”), pursuant to which we issued and sold to EMA a convertible promissory note, dated August 21, 2018 in the principal amount of $225,000 (the “Note”). The Note is due six months from the date of issuance and bears interest at the rate of 12% per annum. The Company received $199,000 from the investment less fees and debt issuance costs of $26,000 which was recorded as a debt discount. In connection with the issuance of the Note, the Company issued to EMA, as a commitment fee, 137,500 shares of its common stock (the “Returnable Shares”) as well as 100,000 shares of its common stock (the “Non-Returnable Shares”), as further provided in the Note. The Returnable Shares shall be returned to the Company’s treasury if the Note is fully repaid and satisfied prior to the date, which is one hundred eighty (180) days following August 21, 2018, subject further to the terms and conditions of the Note. The Note as amended on September 27, 2018, is convertible at any date after the issuance date at the noteholder’s option into shares of our common stock at a variable conversion price, equal to the lesser of (i) 70% of the lowest trading price during the previous 20 days and ending on the latest trading date prior to the date of the Note, or (ii) a 70% of the lowest trading price for our common stock during the 20 trading day period immediately prior to conversion but subject to a conversion floor price of $3.05. The floor price is subject to reset under certain conditions. We have the right to prepay the Note at any time prior to 180 days following the closing date. If we pay after September 24, 2018, we must pay an additional $25,000 as a prepayment penalty. The Note contains customary default events which, if triggered and not timely cured, will result in default interest and penalties. The Note also contains a right of first refusal provision with respect to future financings by us. The Company recorded a debt discount in the amount of $113,727 in connection with the Non-returnable shares and $73,373 in connection with the initial valuation of the derivative liability related to the embedded conversion option of the Note to be amortized utilizing the effective interest method of accretion over the term of the Note. The aggregate debt discount have been accreted and charged to interest expenses as a financing expense in the amount of $48,955 during the year ended September 30, 2018. As of September 30, 2018, the Company owed $225,000 in principal and $2,959 in accrued interest under the terms of the agreement and recorded interest expense of $2,959 during the year ended September 30, 2018. 225,000 Unamortized debt discount (176,045) Total, net of unamortized discount $ 48,955 Labrys Fund, LP – September 19, 2018 Promissory Note Funding On March 23, 2018, we entered into a master convertible promissory note pursuant to which we could borrow up to $500,000. On September 19, 2018 borrowed $330,000, less debt issuance costs of $20,700. The note also carries an original issue discount of 10% ($30,000). Interest under the convertible promissory note is 12% per annum, and the principal and all accrued but unpaid interest is due six months from the date of issuance. The Note, as amended on September 27, 2018, is convertible at any date after the issuance date at the noteholder’s option into shares of our common stock at a variable conversion price subject to a conversion floor price of $3.05, The Conversion price equals the lesser of (1) 70% multiplied by the lowest "Trading Price" during the previous 20 Trading Day period ending on the latest complete Trading Day prior to the date of this Note and (2) 70% multiplied by the lowest "Trading Price" for the Common Stock during the 20 Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. The "Trading Price" as defined by the agreement is the lesser of: (a) the lowest trade price on the OTC Pink, OTCQB, or applicable trading market (the “OTC Market”) as reported by a reliable reporting service (“Reporting Service”) designated by the Holder and (b) the lowest closing bid price on the OTC Market as reported by a Reporting Service designated by the Holder. If the note is not repaid within 180 days of issuance the floor will cease to apply. The Company recorded a debt discount in the amount of $279,300 in connection with the initial valuation of the derivative liability related to the embedded conversion option of the note to be amortized utilizing the effective interest method of accretion over the term of the note. The aggregate debt discount have been accreted and charged to interest expenses as a financing expense in the amount of $20,166 during the year ended September 30, 2018. 330,000 Unamortized debt discount (309,834) Total, net of unamortized discount $ 20,166 Total convertible notes, net $ 69,121 The Company did not enter into any convertible note agreements in the year ended September 30, 2017. |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS AND DERIVATIVE LIABILITIES | 12 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
FAIR VALUE OF FINANCIAL INSTRUMENTS AND DERIVATIVE LIABILITIES | 9. FAIR VALUE OF FINANCIAL INSTRUMENTS AND DERIVATIVE LIABILITIES The carrying value of cash, accounts payable and accrued expenses, and debt (See Notes 8 & 9) approximate their fair values because of the short-term nature of these instruments. Management believes the Company is not exposed to significant interest or credit risks arising from these financial instruments. The carrying amount of the Company’s long-term debt is also stated at fair value of $150,000 since the stated rate of interest approximates market rates. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. The Company utilizes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable. ● Level 1 Quoted prices in active markets for identical assets or liabilities. These are typically obtained from real-time quotes for transactions in active exchange markets involving identical assets. ● Level 2 Quoted prices for similar assets and liabilities in active markets; quoted prices included for identical or similar assets and liabilities that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. These are typically obtained from readily-available pricing sources for comparable instruments. ● Level 3 Unobservable inputs, where there is little or no market activity for the asset or liability. These inputs reflect the reporting entity’s own beliefs about the assumptions that market participants would use in pricing the asset or liability, based on the best information available in the circumstances. The following table presents the derivative financial instruments, the Company’s only financial liabilities measured and recorded at fair value on the Company’s balance sheets on a recurring basis, and their level within the fair value hierarchy as of September 30, 2018: Amount Level 1 Level 2 Level 3 Embedded conversion derivative liability $ — $ — $ — $ — Warrant and option derivative liabilities $ — $ — $ — $ — Total $ — $ — $ — $ — The embedded conversion feature in the convertible debt instruments that the Company issued (See Note 9), was convertible at issuance which qualified them as a derivative instrument since the number of shares issuable under the note is indeterminate based on guidance in ASC Topic No. 815-15, “Derivatives and Hedging (“Topic No. 815-15”). Topic No. 815-15 requires the Company to bifurcate and separately account for the conversion features as an embedded derivative contained in the Company’s convertible debt. This convertible debt tainted all other equity linked instruments including all outstanding non-employee options and warrants on the date that the instrument became convertible. The Company is required to carry the embedded derivative on its balance sheet at fair value and account for any unrealized change in fair value as a component of results of operations. On September 27, 2018, all derivative instruments held by the Company had been either extinguished through settlement of the associated debts or through amendments to the instruments that removed the derivative aspect of the instrument. The Black-Scholes model utilized the following inputs to value the derivative liabilities at the date of issuance of the convertible note through September 27, 2018 which was the date the derivative liability was terminated: Fair value assumptions: March 23, 2018 through September 27, 2018 Risk free interest rate 1.92-2.81% Expected term (years) 0.26-6.99 Expected volatility 134%-334% Expected dividends 0% The following table presents a summary of the Company’s derivative liabilities associated with its convertible notes as of September 30, 2018: Amount Balance September 30, 2017 $ — Debt discount originated from derivative liabilities 789,219 Initial derivative loss recorded 4,160,476 Fair value of derivative liability at issuance reclassified from additional paid in capital 12,537,117 Resolution of derivative liability reclassified to additional paid in capital (52,291,024) Change in fair market value of derivative liabilities 34,804,212 Balance September 30, 2018 $ — |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Sep. 30, 2018 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | 10. RELATED PARTY TRANSACTIONS Matthew Schultz- Chief Executive Officer and Director The Company has a consulting agreement with Matthew Schultz, our Chief Executive Officer, for management services. In accordance with this agreement, as amended, Mr. Schultz provides services to us in exchange for $15,000 in compensation for services plus a $1,000 medical insurance stipend, each month plus a bonus of 0.5% of gross revenue. The Company has also agreed to reimburse Mr. Schultz for expenses incurred. The term of the agreement is one year and automatically renews until cancelled by either party. During the year ended September 30, 2018 and 2017, Mr. Schultz earned $194,527 and $193,425, respectively, in accordance with this agreement. During the year ended September 30, 2018, Mr. Schultz allowed the Company to defer $123,114 as accrued compensation. The Company owed Mr. Schultz $123,796 and $58,810 in deferred compensation and reimbursable expenses as of September 30, 2018 and 2017, respectively. Deferred compensation is reported under due to related parties in the consolidated balance sheets. During the year ended September 30, 2018, the Company executed two 15% promissory notes with a total face value of $30,000 with the spouse of the CEO of our Company. Under the terms of the promissory notes the Company received $30,000 and agreed to repay the note on demand. As of September 30, 2018, Company owed $30,000 in principal and $2,832 in accrued interest under the terms of the agreement. On January 1, 2019, the Company settled all remaining obligations under the notes through the payment of all outstanding principal and interest then outstanding. Zachary Bradford – President, Chief Financial Officer and Director The Company has a consulting agreement with ZRB Holdings, Inc, an entity wholly owned by Zachary Bradford, our Chief Financial Officer and director, for management services. In accordance with this agreement, as amended, Mr. Bradford provides services to us in exchange for $15,000 in compensation for services plus a $1,000 medical insurance stipend, each month plus a bonus of 0.5% of gross revenue. The Company has also agreed to reimburse Mr. Bradford for expenses incurred. The term of the agreement is one year and automatically renews until cancelled by either party. During the years ended September 30, 2018 and 2017, Mr. Bradford earned $194,527 and $193,425, respectively, in accordance with this agreement. During the year ended September 30, 2018, Mr. Bradford allowed the Company to defer $87,746 as accrued compensation. The Company owed Mr. Bradford $89,351and $78,252 in deferred compensation and reimbursable expenses as of September 30, 2018 and 2017, respectively. Deferred compensation is reported under due to related parties in the consolidated balance sheets. On August 13, 2017, the Company executed a 15% promissory note with a face value of $80,000 with Zachary Bradford, its President and Chief Financial Officer. Under the terms of the promissory note the Company received $80,000 and agreed to repay the note evenly over 12 months. The Company repaid $73,333 and 6,667 in principal during the years ended September 30, 2018 and 2017, respectively. The Company incurred interest expense of $12,000 and $1,800 in interest during the years ended September 30, 2018 and 2017, respectively. The Company owed $0 and $73,333 in principal and $600 and $0 in accrued interest under the terms of the agreement as of September 30, 2018 and 2017, respectively. During the year ended September 30, 2018, the Company executed eleven 15% promissory notes with a total face value of $189,690 with Zachary Bradford, its President and Chief Financial Officer. Under the terms of the promissory notes the Company received $189,690 and agreed to repay the notes on demand. As of September 30, 2018, Company owed $189,690 in principal and $10,733 in accrued interest under the terms of the agreement. On January 3, 2019, the Company settled all remaining obligations under the notes through the payment of all outstanding principal and interest then outstanding. Bryan Huber – Chief operations Officer and Director The Company has a consulting agreement with Bryan Huber, our Chief Operations Officer and director, for management services. In accordance with the original agreement, Mr. Huber provided services to us in exchange for $117,000 in compensation for services plus a $500 medical insurance stipend and a bonus of 0.5% of gross revenue. On August 28, 2018, the Company replaced the original agreement with an agreement with Zero Positive, LLC an entity controlled by Mr. Huber. In accordance with this agreement with Zero Positive, LLC, Mr. Huber agrees to provide services through to the Company in exchange for $160,000 in annual compensation plus a $500 medical insurance stipend and a bonus of 0.5% of gross revenue. Under the agreement Mr. Huber was also granted a one-time bonus of $50,000, payment of which will be deferred until the Company completes a qualified financing that exceeds three-million dollars or average monthly revenues of the Company exceed one-million dollars for three months. The Company has also agreed to reimburse Zero Positive, LLC for expenses incurred. The term of the agreement is one year and automatically renews until cancelled by either party. During the year ended September 30, 2018 and 2017, Mr. Huber and Zero positive earned $180,612 and $116,377, respectively, in accordance with this agreement. During the years ended September 30, 2018, Mr. Huber allowed the Company to defer $69,604 as accrued compensation. The Company owed Mr. Huber $73,625 and $6,288 in deferred compensation and reimbursable expenses as of September 30, 2018 and 2017, respectively. Deferred compensation is reported under due to related parties in the consolidated balance sheets. On May 10, 2018, Bryan Huber the Company’s Chief Operations Officer exercised warrants to purchase 1,353 shares of the Company’s $0.001 par value common stock at a purchase price equal to $1.50 for each share of common stock. The Company receive $2,030 as a result of this exercise. On September 28, 2018, in connection with the consulting agreement executed with Zero Positive, LLC Company issued warrants to purchase 900,000 shares of common stock at an exercise price of $0.80 per share to Zero Positive. The warrants were valued at $2,607,096 using the Black Scholes option pricing model based upon the following assumptions: term of 10 years, risk free interest rate of 3.05%, a dividend yield of 0% and volatility rate of 191%. The warrants vest as follows: 300,000 vested immediately, the balance vest evenly on the last day of each month over forty-two months beginning August 31, 2018. As of September 30, 2018, 328,571 warrants had vested, and the Company recorded an expense of $951,797 during the year ended September 30, 2018. Larry McNeill – Chairman of the Board of Directors During the year ended September 30, 2018, the Company executed eight 15% promissory notes with a total face value of $163,100 with Larry McNeill, a Director of the Company. Under the terms of the promissory notes the Company received $163,100 and agreed to repay the note on demand. As of September 30, 2018, Company owed $163,100 in principal and $6,562 in accrued interest under the terms of the agreement. On December 31, 2018, the Company settled all remaining obligations under the note through the payment of all outstanding principal and interest then outstanding. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
STOCKHOLDERS EQUITY (DEFICIT) | 11. STOCKHOLDERS’ EQUITY Overview The Company’s authorized capital stock consists of 100,000,000 shares of common stock and 10,000,000 shares of preferred stock, par value $0.001 per share. As of September 30, 2018, there were 36,116,447 shares of common stock issued and outstanding and 1,000,000 shares of preferred stock issued and outstanding. Common Stock issuances during the year ended September 30, 2018 During the period commencing October 1, 2017 through September 30, 2018, the Company received $271,900 from 16 investors pursuant to private placement agreements with the investors to purchase 339,875 shares of the Company’s $0.001 par value common stock at a purchase price equal to $0.80 for each share of common stock. During the year ended September 30, 2018, the Company issued 41,640 shares of the Company’s $0.001 par value common stock to settle accounts payable. The shares were valued at $75,734 and the Company recorded a loss on settlement of debt of $41,092 result of the issuance. In connection with the issuance of the March 23, 2018, Labrys Fund, LP Convertible Note, the Company issued, as a commitment fee, 137,500 shares of its common stock (the “Returnable Shares”) as well as 100,000 shares of its common stock (the “Non-Returnable Shares”). The agreement was amended on June 29, 2018 and as a result the returnable shares were no longer returnable. Consequently, the fair value of the returnable shares of $218,626 was charged to interest expense. On September 19, 2018, all principal and accrued interest of $220,000 and $12,730, respectively was converted into 258,589 shares of the Company’s common stock. (See Note 8 for additional details) In connection with the issuance of the Auctus Fund, LLC Convertible Note, the Company issued to Auctus, as a commitment fee, 137,500 shares of its common stock (the “Returnable Shares”) as well as 150,000 shares of its common stock (the “Non-Returnable Shares”). On September 21, 2018, all principal and accrued interest of $225,000 and $5,474, respectively was converted into 256,082 shares of the Company’s common stock. Subsequent to September 30, 2018, as a result of the conversion the 137,500 returnable shares were returned to the Company and cancelled. (See Note 8 for additional details) In connection with the issuance of a the EMA Financial, LLC Convertible Note, the Company issued EMA, as a commitment fee, 137,500 shares of its common stock (the “Returnable Shares”) as well as 100,000 shares of its common stock (the “Non-Returnable Shares”). Subsequent to September 30, 2018, the Company repaid all obligations under the note and the 137,500 returnable shares were returned to the Company and cancelled on January 8, 2019. (See Note 8 for additional details) On September 11, 2018, the Company entered into an agreement with Regal Consulting, LLC for investor relations services. Under this agreement the Company agreed to issue 30,000 shares of the Company’s common stock per month as compensation for services plus $20,000 per month in cash. As of September 30, 2018, the Company had issued 30,000 shares of its common stock in accordance with the agreement. Stock compensation of $55,100 was recorded as a result of the stock issued under the agreement. Common Stock issuances during the year ended September 30, 2017 During the period commencing October 1, 2016 through September 30, 2017, the Company received $880,000 from 38 investors pursuant to private placement agreements with the investors to purchase 1,101,000 shares of the Company’s $0.001 par value common stock at a purchase price equal to $0.80 for each share of Common stock. In November of 2016, the Company issued 2,932,704 shares of common stock to two officers for the cashless exercise of 3,000,000 options. In December of 2016, the Company issued 1,466,352 shares of common stock to a director for the cashless exercise of 1,500,000 options. On April 13, 2017, the Company issued 25,000 shares of common stock to a consultant for services. The shares were valued at $2.75 per share or $68,750, which was the quoted closing price of our Common stock on the date of issuance. On February 9, 2017, the Company entered into a Debt Settlement Agreement with Webcor Construction LP (“Webcor”) to settle $158,753 in debt owed to Webcor. The Company agreed to pay Webcor $58,000 on or before February 28, 2017 and to issue 50,000 shares of the Company’s common stock within 4 days of execution. Upon receipt of payment, Webcor agreed to release the full amount of the debt. The shares issued were deemed to have a fair value of $212,500 on the date of the transaction and a loss on settlement of debt of $111,747 was recorded as a result of the Debt Settlement Agreement. The cash payment was made per the agreement on February 28, 2017. |
STOCK WARRANTS
STOCK WARRANTS | 12 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
STOCK WARRANTS | The following is a summary of stock warrant activity during the years ended September 30, 2018 and September 30, 2017. Number of Warrant Shares Weighted Average Exercise Price Balance, September 30, 2016 13,112,100 $ 0.59 Warrants granted — $ — Warrants expired — — Warrants canceled — — Warrants exercised (4,500,000 ) 0.083 Balance, September 30, 2017 8,612,100 $ 0.85 Warrants granted 1,191,600 $ 0.80 Warrants expired — — Warrants canceled — — Warrants exercised (814,401 ) 0.36 Balance, September 30, 2018 8,989,299 $ 0.89 As of September 30, 2018, the outstanding warrants have a weighted average remaining term of was 4.85 years and an intrinsic value of $45,021,758. As of September 30, 2018, there are warrants exercisable to purchase 8,417,870 shares of common stock in the Company and 571,429 unvested warrants outstanding that cannot be exercised until vesting conditions are met. 4,498,647 of the outstanding warrants require a cash investment of $1.50 per share to exercise and 4,490,652 of the outstanding warrants contain provisions allowing a cashless exercise at their respective exercise price. Warrant activity for the year ended September 30, 2018 During the year ended September 30, 2018, certain investors exercised warrants to purchase 258,401 shares of the Company’s common stock at purchase prices ranging from $0.083 to $1.50. The Company received total proceeds of $44,938 from the warrant exercises. During the year ended September 30, 2018, a total of 459,889 shares of the Company’s common stock were issued in connection with the cashless exercise of 556,000 common stock warrants with an exercise prices of $0.36. On January 1, 2018, the Company issued warrants to purchase 100,000 shares of common stock at an exercise price of $0.80 per share to an advisor for business advisory services. The warrants were valued at $234,095 using the Black Scholes option pricing model. The warrants vest evenly over the six-month service period ended September 30, 2018. On June 15, 2018, the Company issued 116,600 5-year warrants exercisable at $0.80 to a lender in connection with a promissory note agreement. (See Note7 for additional details.) On August 1, 2018, the Company issued 25,000 5-year warrants exercisable at $0.80 to a lender in connection with a promissory note agreement. (See Note 7 for additional details.) On August 28, 2018, in connection with the Consulting agreement executed with Zero Positive, LLC. the Company issued warrants to purchase 900,000 shares of common stock at an exercise price of $0.80 per share to an Zero Positive. The warrants were valued at $2,607,096 using the Black Scholes option pricing model. The warrants vest as follows: 300,000 warrants vested immediately, the balance vest evenly on the last day of each month over the forty-two months beginning August 31, 2018. As of September 30, 2018, 328,571 warrants had vested, and the Company recorded an expense of $951,797 during the year ended September 30, 2018. (See Note 10 for additional details.) On September 20, 2018, the Company issued 25,000 5-year warrants exercisable at $0.80 to a lender in connection with a promissory note agreement. (See Note 7 for additional details.) On September 21, 2018, the Company issued 25,000 5-year warrants exercisable at $0.80 to a lender in connection with a promissory note agreement. (See Note 7 for additional details.) The Black-Scholes model utilized the following inputs to value the warrants granted during the year ended September 30, 2018: Fair value assumptions – Warrants: September 30, 2018 Risk free interest rate 2.01-3.05% Expected term (years) 5-10 Expected volatility 158%-265% Expected dividends 0% Warrant activity for the year ended September 30, 2017 In the year ending September 30, 2017, the Company issued 4,399,056 shares of common stock to two officers and a director for the cashless exercise of 4,500,000 options with a strike price of $0.83. As of September 30, 2017, the Company expects to recognize $1,655,299 of stock-based compensation for the non-vested outstanding warrants over a weighted-average period of 3.33 years. |
STOCK OPTIONS
STOCK OPTIONS | 12 Months Ended |
Sep. 30, 2018 | |
Other Liabilities Disclosure [Abstract] | |
STOCK OPTIONS | 13. STOCK OPTIONS The Company sponsors a stock-based incentive compensation plan known as the 2017 Incentive Plan (the “Plan”), which was established by the Board of Directors of the Company on June 19, 2017. A total of 3,000,000 shares were initially reserved for issuance under the Plan. As of September 30, 2018, there were 2,680,794 shares available for issuance under the plan. The Plan allows the Company to grant incentive stock options, non-qualified stock options, stock appreciation right, or restricted stock. The incentive stock options are exercisable for up to ten years, at an option price per share not less than the fair market value on the date the option is granted. The incentive stock options are limited to persons who are regular full-time employees of the Company at the date of the grant of the option. Non-qualified options may be granted to any person, including, but not limited to, employees, independent agents, consultants and attorneys, who the Company’s Board believes have contributed, or will contribute, to the success of the Company. Non-qualified options may be issued at option prices of less than fair market value on the date of grant and may be exercisable for up to ten years from date of grant. The option vesting schedule for options granted is determined by the Board of Directors at the time of the grant. The Plan provides for accelerated vesting of unvested options if there is a change in control, as defined in the Plan. The following is a summary of stock option activity during the years ended September 30, 2018 and year ended September 30, 2017. Number of Option Shares Weighted Average Exercise Price Balance, September 30, 2016 — $ — Options granted 6,902 $ 3.45 Options expired — — Options canceled — — Options exercised — — Balance, September 30, 2017 6,902 $ 3.45 Options granted 312,304 $ 1.13 Options expired — — Options canceled — — Options exercised — — Balance, September 30, 2018 319,206 $ 1.18 As of September 30, 2018, there are options exercisable to purchase 209,932 shares of common stock in the Company and 110,274 unvested options outstanding that cannot be exercised until vesting conditions are met. As of September 30, 2018, the outstanding options have a weighted average remaining term of was 2.26 years and an intrinsic value of $2,871,783. Option activity for the year ended September 30, 2018 During the year ended September 30, 2018, the Company issued 62,304 options to purchase shares of the common stock to employees, the shares were granted at quoted market prices ranging from $1.57 to $3.45. The shares were valued at issuance using the Black Scholes model and stock compensation expense of $130,000 was recorded as a result of the issuances. On March 10, 2018 the Company issued a total of 250,000 options to four consultants for advisory services. The options vest evenly 12 months from issuance. The options expire 24 months after issuance and require a cash investment to exercise. The options were valued at issuance using the Black Scholes model at $342,500 and amortized of the term of the agreement. During the year ended September 30, 2018, $191,526 was been expensed as stock-based compensation. The Black-Scholes model utilized the following inputs to value the options granted during the year ended September 30, 2018: Fair value assumptions – Options: September 30, 2018 Risk free interest rate 1.46-2.78% Expected term (years) 2-3 Expected volatility 120%-191% Expected dividends 0% Option activity for the year ended September 30, 2017 During the year ended September 30, 2017, the Company issued 6,902 options to purchase shares of the common stock to employees, the shares were granted at quoted market price of $3.45. The shares were valued at issuance using the Black Scholes model and stock compensation expense of $16,665 was recorded as a result of the issuances. The Black-Scholes model utilized the following inputs to value the options granted during the year ended September 30, 2017: Fair value assumptions – Options: September 30, 2017 Risk free interest rate 1.46-1.50% Expected term (years) 3 Expected volatility 116%-120% Expected dividends 0% As of September 30, 2018, the Company expects to recognize $150,974 million of stock-based compensation for the non-vested outstanding options over a weighted-average period of 0.44 years. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 14. INCOME TAXES The Company provides for income taxes under FASB ASC 740, Accounting for Income Taxes. FASB ASC 740 requires the use of an asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect currently. FASB ASC 740 requires the reduction of deferred tax assets by a valuation allowance, if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. In the Company’s opinion, it is uncertain whether they will generate sufficient taxable income in the future to fully utilize the net deferred tax asset. Accordingly, a valuation allowance equal to the deferred tax asset has been recorded. The total deferred tax asset is approximately $5.8 million as of September 30, 2018 which is calculated by multiplying a 21% estimated tax rate by the cumulative net operating loss (NOL) of approximately $27.6 million. Due to the enactment of the Tax Reform Act of 2017, we have calculated our deferred tax assets using an estimated corporate tax rate of 21%. US Tax codes and laws may be subject to further reform or adjustment which may have a material impact to the Company’s deferred tax assets and liabilities. The significant components of the Company's deferred tax assets and liabilities as of September 30, 2018 and 2017 are as follows: As of September 30, 2018 2017 Cumulative tax net operating losses (in millions) $ 27.6 $ 21.0 Deferred tax asset (in millions) $ 5.8 $ 4.4 Valuation allowance (in millions) (5.8 ) (4.4) Current taxes payable — — Income tax expense $ — $ — As of September 30, 2018, and 2017, the Company had gross federal net operating loss carryforwards of approximately $27.6 million and $21.0 million, respectively. The Company plans to file its U.S. federal return for the year ended September 30, 2018 upon the issuance of this filing. Upon filing of the tax return for the year ended September 30, 2018 the actual deferred tax asset and associated valuation allowance available to the Company may differ from management’s estimates. The tax years 2014-2017 remained open to examination for federal income tax purposes by the major tax jurisdictions to which the Company is subject. No tax returns are currently under examination by any tax authorities. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 15. COMMITMENTS AND CONTINGENCIES Office leases The Company’s corporate offices are located at 70 North Main Street, Suite 105, Bountiful, Utah 84010. The Company occupies the leased space on a month to month basis at a rate of $850 per month. Future minimum lease payments under the operating leases for the facilities as of September 30, 2018, are $0. On May 15, 2018, the Company executed a 37-month lease agreement, which commenced on July 1, 2018 at 4360 Viewridge Avenue, Suite C, San Diego, California. The agreement calls for the Company to make payments of $4,057 in base rent per month through July 31, 2021 subject to an annual 3% rent escalation. Future minimum lease payments under the operating leases for the facilities as of September 30, 2018, are as follows: Fiscal year ending September 30, 2019 $49,049 Fiscal year ending September 30, 2020 $50,521 Fiscal year ending September 30, 2021 $43,170 Contracts and awards The Company was awarded a $900,000 contract from Bethel-Webcor JV. Under the contract terms we will install a turn-key advanced microgrid system at the U.S. Marine Corps Base Camp Pendleton. The contract is in direct support of the United States Department of Navy's communication information system (CIS) operations complex at the U.S. Marine Corps Base Camp Pendleton that was recently awarded to the Joint-Venture. The Company begin on-site work for this project in February of 2018 and expects to complete its scope of work in early 2019. |
MAJOR CUSTOMERS AND VENDORS
MAJOR CUSTOMERS AND VENDORS | 12 Months Ended |
Sep. 30, 2018 | |
Notes to Financial Statements | |
MAJOR CUSTOMER | 16. MAJOR CUSTOMERS AND VENDORS For the years ended September 30, 2018 and 2017, the Company had the following customers that represented more than 10% of sales. September 30, 2018 September 30, 2017 Bethel-Webcor JV-1 70.42 % 10.8% Daoust 11.82 % — Jacobs/ HDR a joint venture — 13.0% Macerich — 24.4% Firenze — 20.0% For the years ended September 30, 2018 and 2017, the Company had the following suppliers that represented more than 10% of direct material costs. September 30, 2018 September 30, 2017 CED Greentech 13.57 % 54.9% Rexel USA, Inc. 27.47 % — ESS, Inc. 19.29 % — Ideal Power, Inc. 14.72 % — Integrated power systems — 11.5% Simpliphi Power 1.8 % 27.6% |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Sep. 30, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 17. SUBSEQUENT EVENTS Issuance of Common stock During the period commencing October 1, 2018 through December 10, 2018, the Company received $361,800 from 14 investors pursuant to private placement agreements with the investors to purchase 452,250 shares of the Company’s $0.001 par value common stock at a purchase price equal to $0.80 for each share of common stock. During the period commencing October 1, 2018 through December 31, 2018, the Company issued 90,000 shares of the Company’s $0.001 par value common stock to Regal Consulting, LLC for investor relations services. During the period commencing October 1, 2018 through December 31, 2018, the Company issued 30,000 shares of the Company’s $0.001 par value common stock and 30,000 warrants to a Consultant for services. Warrant exercise On October 2, 2018, an investor exercised warrants to purchase 3,000 shares of the Company’s $0.001 par value common stock at a purchase price equal to $0.363 for each share of Common stock. The Company receive $1,089 as a result of this exercise. On January 7, 2019, a total of 1,444,170 shares of the Company’s common stock were issued in connection with the cashless exercise of 1,500,000 common stock warrants with an exercise prices of $0.083. Issuance of Stock options to employees During the period commencing October 1, 2018 through January 1, 2019, the Company issued 111,682 options to purchase shares of the common stock to employees, the shares were granted at quoted market prices ranging from $1.51 to $5.90. Loans from related parties During the year ended September 30, 2018, the Company executed eight 15% promissory notes with a total face value of $163,100 with Larry McNeill, a Director of the Company. Subsequent to the year ended September 30, 2018, the Company executed one additional 15% promissory note with a total face value of $50,000. Under the terms of the promissory notes the Company received a total of $213,100 and agreed to repay the note on demand. On December 31, 2018, the Company settled all remaining obligations under the note through the payment of all outstanding principal and interest then outstanding of $213,100 and $5,816, respectively. During the year ended September 30, 2018, the Company executed eleven 15% promissory notes with a total face value of $189,690 with Zachary Bradford, its President and Chief Financial Officer. Subsequent to the year ended September 30, 2018, the Company executed two additional 15% promissory notes with a total face value of $25,030. Under the terms of the promissory notes the Company received a total of $214,720 and agreed to repay the notes on demand. On January 3, 2019, the Company settled all remaining obligations under the notes through the payment of all outstanding principal and interest then outstanding of $214,720 and $3,037, respectively. During the year ended September 30, 2018, the Company executed two 15% promissory notes with a total face value of $30,000 with the spouse of the CEO of our Company. Under the terms of the promissory notes the Company received $30,000 and agreed to repay the note on demand. On January 3, 2019, the Company settled all remaining obligations under the notes through the payment of all outstanding principal and interest then outstanding of $30,000 and $383, respectively. Convertible note repayments EMA Financial, LLC – August 21, 2018 Promissory Note On January 3, 2019, the Company settled all remaining obligations under the EMA note through the payment of all outstanding principal, prepayment penalties and interest then outstanding of $225,000, $35,000 and $10,736, respectively. In connection with the issuance of the Note, the Company issued to the Purchaser, as a commitment fee, 137,500 returnable shares of its common stock. As a result of the repayment the shares were returned to treasury and cancelled on January 8, 2019. Labrys Fund, LP – September 19, 2018 Promissory Note On January 3, 2019, the Company settled all remaining obligations under the Labrys Fund, LP note through the payment of all outstanding principal and interest then outstanding of $330,000 and $11,609, respectively. Auctus Fund, LLC –July 2, 2018 Promissory Note In connection with the issuance of the Note, the Company issued to the Purchaser, as a commitment fee, 137,500 returnable shares of its common stock. As a result of the conversion of the note on September 21, 2018, the shares were returned to treasury and cancelled on December 21, 2018. Convertible notes executed On December 31, 2018, the Company entered into a Securities Purchase Agreement (the “SPA”) with an otherwise unaffiliated third-party institutional investor (the “Investor”), pursuant to which the Company issued to the Investor a Senior Secured Redeemable Convertible Debenture (the “Debenture”) in the aggregate face value of $5,250,000. The note is secured by all assets of the Company. The Debenture has a maturity date two years from the issuance date and the Company has agreed to pay compounded interest on the unpaid principal balance of the Debenture at the rate equal 7.5% per annum. Interest is payable on the date the applicable principal is converted or on maturity. The interest must be paid in cash and, in certain circumstances, may be paid in shares of common stock. The transactions described above closed on December 31, 2018. In connection with the issuance of the Debenture and pursuant to the terms of the SPA, the Company issued to the Investor 100,000 shares of common stock and a Common Stock Purchase Warrant to acquire up to 3,083,333 shares of common stock for a term of three years (the “Warrant”) on a cash-only basis at an exercise price of $2.00 per share with respect to 1,250,000 Warrant Shares, $2.50 with respect to 1,000,000 Warrant Shares, $5.00 with respect to 500,000 Warrant Shares and $7.50 with respect to 333,333 Warrant Shares Pursuant to the terms of the SPA, the Investor agreed to tender to the Company the sum of $5,000,000, of which the Company received the full amount as of the closing. Pursuant to the SPA, the Company agreed to sell the Debenture, the shares of common stock issuable upon conversion of the Debenture, the Warrant and the shares of common stock issuable upon exercise of the Warrant pursuant to an effective shelf registration statement on Form S-3 (Registration No 333-228063), declared effective by the Securities and Exchange Commission on November 20, 2018. Prior to the maturity date, provided that no trigger event has occurred, the Company will have the right at any time upon 30 trading days’ prior written notice, in its sole and absolute discretion, to redeem all or any portion of the Debenture then outstanding by paying to the Investor an amount equal to 140% of the of the portion of the Debenture being redeemed. The Investor may convert the Debenture into shares of the Company’s common stock at a conversion price equal to 95% of the mathematical average of the 5 lowest individual daily volume weighted average prices of the common stock, less $.05 per share, during the period beginning on the issuance date and ending on the maturity date subject to certain floor price restrictions. In the event certain equity conditions exist, the Company may require that the Investor convert the Debenture. In no event shall the Debenture be allowed to affect a conversion if such conversion, along with all other shares of Company common stock beneficially owned by the Investor and its affiliates would exceed 4.99% of the outstanding shares of the common stock of the Company. On January 7, 2019, the investor converted $2,500,000 in principal and $875,000 in interest as a conversion premium, for 1,784,729 shares of the Company common stock at an effective conversion price of $1.90, due to a trigger event for the Company not filing its annual report on Form 10-K for the fiscal year ended September 30, 2018 on or before December 31, 2018. Repayment of Promissory Notes Subsequent to September 30, 2018, the Company settled 8 promissory notes (See Note 8) through the repayment of outstanding principal and accrued interest totaling to $420,208 and $7,565, respectively. On December 31, 2018, the Company settlement a $52,500 promissory note (See Note 8) through the issuance of 25,000 shares of the Company’s common stock and payment of $27,500 in outstanding principal and interest then outstanding of $1,467. |
SUMMARY OF SIGNIFICANT POLICI_2
SUMMARY OF SIGNIFICANT POLICIES (Policies) | 12 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The Company has incurred losses for the past several years while developing infrastructure and its software platforms. As shown in the accompanying audited consolidated financial statements, the Company incurred net losses of $47,006,165 and $13,498,526 during the years ended September 30, 2018 and September 30, 2017, respectively. Additionally, as of September 30, 2018, the Company had a working capital deficit of approximately $801,207. In response to these conditions, subsequent to September 30, 2018 we have raised additional capital through the sale of debt and equity securities pursuant to a registration statement on Form S-3. (See Note 17 for additional details.) The Company’s independent registered public accounting firm expressed in its report on the Company’s financial statements for the year ended September 30, 2017 a substantial doubt about the Company’s ability to continue as a going concern. Based on management’s plans and the capital raised subsequent to the year ended September 30, 2018, that substantial doubt has been alleviated. |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of CleanSpark, Inc., and its wholly owned operating subsidiaries, CleanSpark, LLC, CleanSpark, II, LLC and CleanSpark Acquisition, Inc. All material intercompany transactions have been eliminated upon consolidation of these entities. |
Use of Estimates | Use of estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include estimates used to review the Company’s goodwill impairment, impairments and estimations of long-lived assets, revenue recognition on percentage of completion type contracts, allowances for uncollectible accounts, derivative instruments valuation, and the valuations of non-cash capital stock issuances. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable in 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 from these estimates under different assumptions or conditions. |
Cash and cash equivalents | Cash and cash equivalents |
Revenue recognition | Revenue Recognition Revenues and related costs on construction contracts are recognized using the “percentage of completion method” of accounting in accordance with ASC 605-35, Accounting for Performance of Construction-Type and Certain Production Type Contracts (“ASC 605-35”). Under this method, contract revenues and related expenses are recognized over the performance period of the contract in direct proportion to the costs incurred as a percentage of total estimated costs for the entirety of the contract. Costs include direct material, direct labor, subcontract labor and any allocable indirect costs. All un-allocable indirect costs and corporate general and administrative costs are charged to the periods as incurred. However, in the event a loss on a contract is foreseen, the Company will recognize the loss as it is determined. Revisions in cost and profit estimates during the course of the contract are reflected in the accounting period in which the facts, which require the revision, become known. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Changes in job performance, job conditions, and estimated profitability, including those arising from contract penalty provisions, and final contract settlements may result in revisions to costs and income and are recognized in the period in which the revisions are determined. The Asset, “Costs in excess of billings”, represents revenues recognized in excess of amounts billed on contracts in progress. The Liability, “Billings in excess of costs”, represents billings in excess of revenues recognized on contracts in progress. At September 30, 2018 and September 30, 2017, the costs in excess of billings balance were $52,439 and $0, and the billings in excess of costs balance were $0 and $0, respectively. Accounts receivables are recorded on contracts for amounts currently due based upon progress billings, as well as retention, which are collectible upon completion of the contracts. Accounts payable to material suppliers and subcontractors are recorded for amounts currently due based upon work completed or materials received, as are retention due subcontractors, which are payable upon completion of the contract. General and administrative expenses are charged to operations as incurred and are not allocated to contract costs. Retention receivable is the amount withheld by a customer until a contract is completed. Retention receivables of $17,751 and $0 were included in the balance of trade accounts receivable as of September 30, 2018 and September 30, 2017, respectively. |
Long-lived Assets | Long-lived Assets |
Stock-based compensation | Stock-based compensation Compensation-Stock Compensation, |
Income taxes | Income taxes Income Taxes |
Earnings (loss) per share | Earnings (loss) per share Earnings Per Share, |
Warranty Liability | Warranty Liability |
Segment Reporting | Segment Reporting – Operating segments are defined as components of an enterprise for which separate financial information is available and evaluated regularly by the chief operating decision maker, or decision-making group, in deciding the method to allocate resources and assess performance. The Company currently has one reportable segment for financial reporting purposes, which represents the Company's core business. |
Recently Issued Accounting Pronouncements | Recently issued accounting pronouncements In May 2014, the FASB issued Accounting Standards Update No. 2014-09 Revenue from Contracts with Customers In July 2015, the FASB made a decision to defer the effective date of the new standard for one year and permit early adoption as of the original effective date. The new standard will be effective for the Company as of October 1, 2018. The Company has evaluated the impact of the adoption of this standard on its revenue recognition policy and does not believe it will have a material impact on its financial statements. The Company has evaluated all other recent accounting pronouncements, and believes that none of them will have a material effect on the Company's financial position, results of operations or cash flows. |
Accounts Receivable | Accounts Receivable |
Concentration Risk | Concentration Risk At times throughout the year, the Company may maintain cash balances in certain bank accounts in excess of FDIC limits. As of September 30, 2018, the cash balance in excess of the FDIC limits was $149,429. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk in these accounts. The Company had certain customers whose revenue individually represented 10% or more of the Company’s total revenue. (See Note 17 for details.) |
Intangible Assets and Goodwill | Intangible Assets and Goodwill The Company reviews its indefinite lived intangibles and goodwill for impairment annually or whenever events or circumstances indicate that the carrying amount of the asset exceeds its fair value and may not be recoverable. In accordance with its policies, the Company performed an assessment of indefinite lived intangibles and goodwill and determined there was no impairment for the years ended September 30, 2018 and 2017. |
Software Development Costs | Software Development Costs Commencing upon a product's release, capitalized software development costs are amortized to "Cost of revenues—software amortization " based on the ratio of current revenues to total projected revenues for the specific product, generally resulting in an amortization period of seven years for our current product offerings. In accordance with ASC 985-35 in recognition of the uncertainties involved in estimating future revenue, amortization will never be less than straight-line amortization of the products remaining estimated economic life. We evaluate the future recoverability of capitalized software development costs on a quarterly basis. For products that have been released in prior periods, the primary evaluation criterion is the actual performance of the software platform to which the costs relate. For products that are scheduled to be released in future periods, recoverability is evaluated based on the expected performance of the specific products to which the costs relate. Criteria used to evaluate expected product performance include: historical performance of comparable products developed with comparable technology; market performance of comparable software; orders for the product prior to its release; pending contracts and general market conditions. Significant management judgments and estimates are utilized in assessing the recoverability of capitalized costs. In evaluating the recoverability of capitalized costs, the assessment of expected product performance utilizes forecasted sales amounts and estimates of additional costs to be incurred. If revised forecasted or actual product sales are less than the originally forecasted amounts utilized in the initial recoverability analysis, the net realizable value may be lower than originally estimated in any given quarter, which could result in an impairment charge. Material differences may result in the amount and timing of expenses for any period if matters resolve in a manner that is inconsistent with management's expectations. If an impairment occurs the reduced amount of the capitalized software costs that have been written down to the net realizable value at the close of each annual fiscal period will be considered the cost for subsequent accounting purposes. |
Reclassifications | Reclassifications |
COSTS AND ESTIMATED EARNINGS _2
COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Health Care Organizations [Abstract] | |
Costs and estimated earnings on contracts | Year ended September 30, 2018 Costs incurred on contracts $ 292,990 Estimated earnings 114,471 407,461 Less billings to date (355,022) Total 52,439 Costs and estimated earnings in excess of billings 52,439 Billings in excess of costs and estimated earnings — Total $ 52,439 |
CAPITALIZED SOFTWARE (Tables)
CAPITALIZED SOFTWARE (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Capitalized Software | September 30, 2018 September 30, 2017 mVSO software $ 4,708,203 $ 4,663,513 MPulse software 6,334,772 5,923,197 Less: accumulated amortization (2,256,749 ) (877,266) Capitalized Software, net $ 8,786,226 $ 9,709,444 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | September 30, 2018 September 30, 2017 Patents $ 71,962 $ 89,473 Websites 16,482 14,532 Brand and Client lists — 2,497,472 Trademarks 5,928 5,928 Engineering trade secrets 4,020,269 4,020,269 Software 26,990 26,990 Less: accumulated amortization (927,164 ) (750,978) Intangible assets, net $ 3,214,467 $ 5,903,686 |
FIXED ASSETS (Tables)
FIXED ASSETS (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Fixed Assets | September 30, 2018 September 30, 2017 Machinery and equipment $ 130,191 $ 133,061 Furniture and fixtures 54,251 74,393 Total 184,442 207,454 Less: accumulated depreciation (97,711 ) (82,013) Fixed assets, net $ 86,731 $ 125,441 |
LOANS (Tables)
LOANS (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Long Term Notes Payable | September 30, 2018 September 30, 2017 Long-term loans payable consist of the following: Promissory notes $ 150,000 $ 150,000 Total $ 150,000 $ 150,000 |
Current Notes Payable | September 30, 2018 September 30, 2017 Current loans payable consist of the following: Promissory notes $ 628,951 $ — Insurance financing loans 10,257 7,712 Unamortized debt discount (181,629 ) — Total, net of unamortized discount $ 457,579 $ 7,712 |
CONVERTIBLE NOTES PAYABLE (Tabl
CONVERTIBLE NOTES PAYABLE (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Convertible Notes Payable | Convertible Notes Payable consists of the following: September 30, 2018 Labrys Fund, LP – March 23, 2018 Promissory Note Funding On March 23, 2018, we entered into a master convertible promissory note pursuant to which we could borrow up to $500,000. On March 23, 2018 the Company borrowed $200,000, less debt issuance costs of $15,750. The note carries an original issue discount of 10% ($20,000). Interest under the convertible promissory note is 12% per annum, and the principal and all accrued but unpaid interest is due on September 23, 2018. The Lender also received 237,500 commitment shares at execution as an inducement for entering into the agreement. The Company also incurred $15,750 of debt issuance costs on the note which was recorded as a debt discount. The note was convertible at any date after the issuance date at the noteholder’s option into shares of our common stock at a variable conversion price, The Conversion price equals the lesser of (1) 70% multiplied by the lowest "Trading Price" during the previous 20 Trading Day period ending on the latest complete Trading Day prior to the date of this Note and (2) 70% multiplied by the lowest "Trading Price" for the Common Stock during the 20 Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. The "Trading Price" as defined by the agreement is the lesser of: (a) the lowest trade price on the OTC Pink, OTCQB, or applicable trading market (the “OTC Market”) as reported by a reliable reporting service (“Reporting Service”) designated by the Holder and (b) the lowest closing bid price on the OTC Market as reported by a Reporting Service designated by the Holder. The Company recorded a debt discount in the amount of $85,348 in connection with the commitment shares and $98,902 in connection with the initial valuation of the derivative liability related to the embedded conversion option of the note to be amortized utilizing the effective interest method of accretion over the term of the note. On September 19, 2018, all principal and accrued interest of $220,000 and $12,730, respectively was converted into 258,589 shares of the Company’s common stock. The aggregate debt discount have been accreted and charged to interest expenses as a financing expense in the amount of $220,000 during the year ended September 30, 2018, respectively. — Total, net of unamortized discount $ — Auctus Fund, LLC – July 2, 2018 Promissory Note Funding On July 2, 2018 the Company entered into a Securities Purchase Agreement with Auctus Fund, LLC (“Auctus”), which was later amended on July 6, 2018, pursuant to which the Company issued to Auctus a Master Convertible Promissory Note (“Note”) pursuant to which the Company could borrow up to $500,000. The Company also incurred $11,900 of debt issuance costs on the note which was recorded as a debt discount. On July 11, Auctus paid $225,000 less $26,000 in legal and due diligence fees. The Note has a maturity date of six months for each tranche funded and the Company has agreed to pay interest on the unpaid principal balance of the Note at the rate of twelve percent (12%) per annum from the date on which the Note is issued (the “Issue Date”) until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. The Company has the right to prepay the Note, provided it makes a payment to Auctus as set forth in the Note within 180 days of its Issue Date. In connection with the issuance of the Note, the Company issued to Auctus, as a commitment fee, 137,500 shares of its common stock (the “Returnable Shares”) as well as 150,000 shares of its common stock (the “Non-Returnable Shares”), as further provided in the Note. The Returnable Shares shall be returned to the Company’s treasury if the Note is fully repaid and satisfied prior to the date, which is one hundred eighty (180) days following the Issue Date, subject further to the terms and conditions of the Note. The Note is convertible at any date after the issuance date at the noteholder’s option into shares of our common stock at a variable conversion price of 70% of the lowest closing market price of our common stock during the previous 20 days to the date of the notice of conversion, subject to adjustment in the case of default. The Note contains certain covenants, such as restrictions on: (i) distributions on capital stock, (ii) stock repurchases, (iii) certain loans, (iii) sales and the transfer of assets, and (iv) participation in 3(a)(10) transactions. The Note also contains certain anti-dilution provisions that apply in connection with any stock split, stock dividend, stock combination, recapitalization or similar transactions. In addition, subject to limited exceptions, Auctus will not have the right to convert any portion of the Note if Auctus, together with its affiliates, would beneficially own in excess of 4.99% of the number of shares of the Company’s common stock outstanding immediately after giving effect to its conversion. The Company recorded a debt discount in the amount of $130,829 in connection with the Non-returnable shares and $56,271 in connection with the initial valuation of the derivative liability related to the embedded conversion option of the Note to be amortized utilizing the effective interest method of accretion over the term of the Note. On September 21, 2018, all principal and accrued interest of $225,000 and $5,474, respectively was converted into 256,082 shares of the Company’s common stock. The aggregate debt discount have been accreted and charged to interest expenses as a financing expense in the amount of $225,000 during the year ended September 30, 2018. — Total, net of unamortized discount $ — EMA Financial, LLC – August 21, 2018 Promissory Note Funding On August 21, 2018 we entered into a Securities Purchase Agreement with EMA Financial, LLC, (“EMA”), pursuant to which we issued and sold to EMA a convertible promissory note, dated August 21, 2018 in the principal amount of $225,000 (the “Note”). The Note is due six months from the date of issuance and bears interest at the rate of 12% per annum. The Company received $199,000 from the investment less fees and debt issuance costs of $26,000 which was recorded as a debt discount. In connection with the issuance of the Note, the Company issued to EMA, as a commitment fee, 137,500 shares of its common stock (the “Returnable Shares”) as well as 100,000 shares of its common stock (the “Non-Returnable Shares”), as further provided in the Note. The Returnable Shares shall be returned to the Company’s treasury if the Note is fully repaid and satisfied prior to the date, which is one hundred eighty (180) days following August 21, 2018, subject further to the terms and conditions of the Note. The Note as amended on September 27, 2018, is convertible at any date after the issuance date at the noteholder’s option into shares of our common stock at a variable conversion price, equal to the lesser of (i) 70% of the lowest trading price during the previous 20 days and ending on the latest trading date prior to the date of the Note, or (ii) a 70% of the lowest trading price for our common stock during the 20 trading day period immediately prior to conversion but subject to a conversion floor price of $3.05. The floor price is subject to reset under certain conditions. We have the right to prepay the Note at any time prior to 180 days following the closing date. If we pay after September 24, 2018, we must pay an additional $25,000 as a prepayment penalty. The Note contains customary default events which, if triggered and not timely cured, will result in default interest and penalties. The Note also contains a right of first refusal provision with respect to future financings by us. The Company recorded a debt discount in the amount of $113,727 in connection with the Non-returnable shares and $73,373 in connection with the initial valuation of the derivative liability related to the embedded conversion option of the Note to be amortized utilizing the effective interest method of accretion over the term of the Note. The aggregate debt discount have been accreted and charged to interest expenses as a financing expense in the amount of $48,955 during the year ended September 30, 2018. As of September 30, 2018, the Company owed $225,000 in principal and $2,959 in accrued interest under the terms of the agreement and recorded interest expense of $2,959 during the year ended September 30, 2018. 225,000 Unamortized debt discount (176,045) Total, net of unamortized discount $ 48,955 Labrys Fund, LP – September 19, 2018 Promissory Note Funding On March 23, 2018, we entered into a master convertible promissory note pursuant to which we could borrow up to $500,000. On September 19, 2018 borrowed $330,000, less debt issuance costs of $20,700. The note also carries an original issue discount of 10% ($30,000). Interest under the convertible promissory note is 12% per annum, and the principal and all accrued but unpaid interest is due six months from the date of issuance. The Note, as amended on September 27, 2018, is convertible at any date after the issuance date at the noteholder’s option into shares of our common stock at a variable conversion price subject to a conversion floor price of $3.05, The Conversion price equals the lesser of (1) 70% multiplied by the lowest "Trading Price" during the previous 20 Trading Day period ending on the latest complete Trading Day prior to the date of this Note and (2) 70% multiplied by the lowest "Trading Price" for the Common Stock during the 20 Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. The "Trading Price" as defined by the agreement is the lesser of: (a) the lowest trade price on the OTC Pink, OTCQB, or applicable trading market (the “OTC Market”) as reported by a reliable reporting service (“Reporting Service”) designated by the Holder and (b) the lowest closing bid price on the OTC Market as reported by a Reporting Service designated by the Holder. If the note is not repaid within 180 days of issuance the floor will cease to apply. The Company recorded a debt discount in the amount of $279,300 in connection with the initial valuation of the derivative liability related to the embedded conversion option of the note to be amortized utilizing the effective interest method of accretion over the term of the note. The aggregate debt discount have been accreted and charged to interest expenses as a financing expense in the amount of $20,166 during the year ended September 30, 2018. 330,000 Unamortized debt discount (309,834) Total, net of unamortized discount $ 20,166 Total convertible notes, net $ 69,121 The Company did not enter into any convertible note agreements in the year ended September 30, 2017. |
FAIR VALUE OF FINANCIAL INSTR_2
FAIR VALUE OF FINANCIAL INSTRUMENTS AND DERIVATIVE LIABILITIES (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Derivative Liabilities | Amount Level 1 Level 2 Level 3 Embedded conversion derivative liability $ — $ — $ — $ — Warrant and option derivative liabilities $ — $ — $ — $ — Total $ — $ — $ — $ — |
Fair Value Assumptions | Fair value assumptions: March 23, 2018 through September 27, 2018 Risk free interest rate 1.92-2.81% Expected term (years) 0.26-6.99 Expected volatility 134%-334% Expected dividends 0% |
Derivative Liability to Convertible Notes | Amount Balance September 30, 2017 $ — Debt discount originated from derivative liabilities 789,219 Initial derivative loss recorded 4,160,476 Fair value of derivative liability at issuance reclassified from additional paid in capital 12,537,117 Resolution of derivative liability reclassified to additional paid in capital (52,291,024) Change in fair market value of derivative liabilities 34,804,212 Balance September 30, 2018 $ — |
STOCK WARRANTS (Tables)
STOCK WARRANTS (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Warrant Summary | Number of Warrant Shares Weighted Average Exercise Price Balance, September 30, 2016 13,112,100 $ 0.59 Warrants granted — $ — Warrants expired — — Warrants canceled — — Warrants exercised (4,500,000 ) 0.083 Balance, September 30, 2017 8,612,100 $ 0.85 Warrants granted 1,191,600 $ 0.80 Warrants expired — — Warrants canceled — — Warrants exercised (814,401 ) 0.36 Balance, September 30, 2018 8,989,299 $ 0.89 |
Fair Value Assumptions | Fair value assumptions – Warrants: September 30, 2018 Risk free interest rate 2.01-3.05% Expected term (years) 5-10 Expected volatility 158%-265% Expected dividends 0% |
STOCK OPTIONS (Tables)
STOCK OPTIONS (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Other Liabilities Disclosure [Abstract] | |
Stock Options | Number of Option Shares Weighted Average Exercise Price Balance, September 30, 2016 — $ — Options granted 6,902 $ 3.45 Options expired — — Options canceled — — Options exercised — — Balance, September 30, 2017 6,902 $ 3.45 Options granted 312,304 $ 1.13 Options expired — — Options canceled — — Options exercised — — Balance, September 30, 2018 319,206 $ 1.18 |
Fair Value Assumptions | Fair value assumptions – Options: September 30, 2018 Risk free interest rate 1.46-2.78% Expected term (years) 2-3 Expected volatility 120%-191% Expected dividends 0% |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Deferred Tax Assets | As of September 30, 2018 2017 Cumulative tax net operating losses (in millions) $ 27.6 $ 21.0 Deferred tax asset (in millions) $ 5.8 $ 4.4 Valuation allowance (in millions) (5.8 ) (4.4) Current taxes payable — — Income tax expense $ — $ — |
MAJOR CUSTOMER (Tables)
MAJOR CUSTOMER (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Notes to Financial Statements | |
Major Customers | September 30, 2018 September 30, 2017 Bethel-Webcor JV-1 70.42 % 10.8% Daoust 11.82 % — Jacobs/ HDR a joint venture — 13.0% Macerich — 24.4% Firenze — 20.0% |
Major Suppliers | September 30, 2018 September 30, 2017 CED Greentech 13.57 % 45.7% Rexel USA, Inc. 27.47 % — ESS, Inc. 19.29 % — Ideal Power, Inc. 14.72 % — Simpliphi Power 1.8 % 12.3% |
ORGANIZATION AND LINE OF BUSI_2
ORGANIZATION AND LINE OF BUSINESS (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2018 | Jul. 01, 2016 | |
Date of Incorporation | Oct. 15, 1987 | |
Date began publically trading | Jan. 1, 1988 | |
Liabilities Assumed | $ 200,000 |
SUMMARY OF SIGNIFICANT POLICI_3
SUMMARY OF SIGNIFICANT POLICIES (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Accounting Policies [Abstract] | ||
Net loss | $ (47,006,165) | $ (13,498,526) |
Woking Capital Deficit | 801,207 | |
Cash | 412,777 | 57,128 |
Revenues | 578,635 | 447,963 |
Costs in excess of billings | 52,439 | |
Billings in excess of costs | 0 | 0 |
Retention Receivables | 17,751 | 0 |
Allowance for doubtful accounts. net of | 0 | 0 |
Cash balance in excess of FDIC limits | 149,429 | |
Warranty costs and associated liabilities | $ 0 | 0 |
Options to puchase shares issued | 319,206 | |
Exercise Price of options minimum | $ 0.80 | |
Exercise Price of options maximum | $ 3.45 | |
Shares issuable upon excercise of outstanding options | 9,461,102 | |
Reclassified as intangible assets | 4,020,269 | |
Reclassified as intangible assets, net of | 333,139 | |
Reclassified as product development expense | 1,067,556 | |
Impairment Expense | $ 1,896,090 | $ 8,551,321 |
COSTS AND ESTIMATED EARNINGS _3
COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS (Details) | 12 Months Ended |
Sep. 30, 2018USD ($) | |
Health Care Organizations [Abstract] | |
Costs incurred on contracts | $ 292,990 |
Estimated earnings | 114,471 |
Total costs incurred on contracts and estimated earnings | 407,461 |
Billings to date | (355,022) |
Costs and estimated earnings in excess of billings | 52,439 |
Billings in excess of costs and estimated earnings | 0 |
Total | $ 52,439 |
COSTS AND ESTIMATED EARNINGS _4
COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS (Details Narrative) - USD ($) | Sep. 30, 2018 | Sep. 30, 2017 |
Health Care Organizations [Abstract] | ||
Costs in excess of billings | $ 52,439 | |
Billings in excess of costs | $ 0 | $ 0 |
CAPITALIZED SOFTWARE (Details)
CAPITALIZED SOFTWARE (Details) - USD ($) | Sep. 30, 2018 | Sep. 30, 2017 |
Fair Value Disclosures [Abstract] | ||
mVSO software | $ 4,708,203 | $ 4,663,513 |
mPulse software | 6,334,772 | 5,923,197 |
Accumulated Amortization | (2,256,749) | (877,266) |
Capitalized Software, net | $ 8,786,226 | $ 9,709,444 |
CAPITALIZED SOFTWARE (Details N
CAPITALIZED SOFTWARE (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | ||
Product Development Expense | $ 1,379,483 | $ 1,067,556 |
Capitalized in Software Development | 456,265 | |
Capitalized Stock Compensation Cost | 60,175 | |
Impairment | $ 5,039,078 |
INTANGIBLE ASSETS - Schedule o
INTANGIBLE ASSETS - Schedule of Intangible Assets (Details) - USD ($) | Sep. 30, 2018 | Sep. 30, 2017 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Patents | $ 71,962 | $ 89,473 |
Websites | 16,482 | 14,532 |
Brand and Client List | 2,497,472 | |
Trademarks | 5,928 | 5,928 |
Engineering trade secrets | 4,020,269 | 4,020,269 |
Software | 26,990 | 26,990 |
Less: accumulated depreciation | (927,164) | (750,978) |
Intangible Assets, Net | $ 3,214,467 | $ 5,903,686 |
INTANGIBLE ASSETS (Details Narr
INTANGIBLE ASSETS (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Accounting Policies [Abstract] | ||
Amortization Expense | $ 802,287 | $ 675,379 |
FIXED ASSETS - Schedule of Prop
FIXED ASSETS - Schedule of Property Pant and Equipment (Details) - USD ($) | Sep. 30, 2018 | Sep. 30, 2017 |
Property, Plant and Equipment [Abstract] | ||
Machinery and equipment | $ 130,191 | $ 133,061 |
Furniture and fixtures | 54,251 | 74,393 |
Total | 184,442 | 207,454 |
Less: accumulated depreciation | (97,711) | (82,013) |
Fixed assets, net of accumulated depreciation | $ 86,731 | $ 125,441 |
FIXED ASSETS (Details Narrative
FIXED ASSETS (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Accounting Policies [Abstract] | ||
Depreciation Expense | $ 52,694 | $ 102,054 |
Additional Depreciation Expense | 1,601,936 | |
Impairment of fixed assets | $ 1,243 | $ 3,512,243 |
LOANS - Long Term (Details)
LOANS - Long Term (Details) - USD ($) | Sep. 30, 2018 | Sep. 30, 2017 |
Debt Disclosure [Abstract] | ||
Promissory Notes | $ 150,000 | $ 150,000 |
Total | $ 150,000 | $ 150,000 |
LOANS - Current (Details)
LOANS - Current (Details) - USD ($) | Sep. 30, 2018 | Sep. 30, 2017 |
Debt Disclosure [Abstract] | ||
Prommisory Notes | $ 628,951 | |
Insurance financing loans | 10,257 | $ 7,712 |
Unamortized Debt Discount | (181,629) | |
Total Net Of Unamortized Discount | $ 457,579 | $ 7,712 |
LOANS (Details Narrative)
LOANS (Details Narrative) - USD ($) | 12 Months Ended | ||||||||||||||||
Sep. 30, 2018 | Sep. 21, 2018 | Sep. 20, 2018 | Sep. 19, 2018 | Aug. 14, 2018 | Aug. 01, 2018 | Jun. 15, 2018 | May 22, 2018 | Mar. 23, 2018 | Feb. 27, 2018 | Feb. 01, 2018 | Jan. 12, 2018 | Dec. 05, 2017 | Nov. 20, 2017 | Nov. 11, 2017 | Oct. 06, 2017 | Sep. 05, 2017 | |
Face Value of note | $ 130,625 | $ 116,600 | $ 24,500 | $ 18,400 | $ 50,000 | $ 80,000 | $ 100,000 | $ 45,000 | $ 150,000 | ||||||||
Cash received | 125,000 | 110,000 | $ 24,500 | $ 18,400 | $ 50,000 | $ 80,000 | $ 100,000 | $ 45,000 | $ 150,000 | ||||||||
Original Issue Discount | $ 30,000 | 5,625 | 6,600 | $ 20,000 | |||||||||||||
Accrued Interest | $ 12,730 | ||||||||||||||||
Warrants Issued | $ 25,000 | $ 116,600 | |||||||||||||||
Warrant Exercise Price | $ 0.8 | $ 0.80 | |||||||||||||||
Loans Payable 1 | |||||||||||||||||
Date Executed | Sep. 5, 2017 | ||||||||||||||||
Promissory Note interest rate | 9.00% | ||||||||||||||||
Term of repayment | 24 months | ||||||||||||||||
Owed in principal | $ 150,000 | ||||||||||||||||
Accrued Interest | $ 0 | ||||||||||||||||
Shares used to secure note | 150,000 | ||||||||||||||||
Interest Expense | $ 13,500 | ||||||||||||||||
Loans Payable 4 | |||||||||||||||||
Date Executed | Nov. 11, 2017 | ||||||||||||||||
Promissory Note interest rate | 10.00% | ||||||||||||||||
Term of repayment | 24 months | ||||||||||||||||
Owed in principal | $ 100,000 | ||||||||||||||||
Accrued Interest | $ 822 | ||||||||||||||||
Shares used to secure note | 100,000 | ||||||||||||||||
Interest Expense | $ 6,411 | ||||||||||||||||
Loans Payable 5 | |||||||||||||||||
Date Executed | Dec. 5, 2017 | ||||||||||||||||
Promissory Note interest rate | 9.00% | ||||||||||||||||
Term of repayment | 24 months | ||||||||||||||||
Owed in principal | $ 50,000 | ||||||||||||||||
Accrued Interest | $ 370 | ||||||||||||||||
Shares used to secure note | 50,000 | ||||||||||||||||
Interest Expense | $ 2,552 | ||||||||||||||||
Loans Payable 2 | |||||||||||||||||
Date Executed | Oct. 6, 2017 | ||||||||||||||||
Promissory Note interest rate | 5830.00% | ||||||||||||||||
Term of repayment | 12 months | ||||||||||||||||
Owed in principal | $ 3,750 | ||||||||||||||||
Accrued Interest | 450 | ||||||||||||||||
Interest Expense | $ 14,175 | ||||||||||||||||
Loans Payable 3 | |||||||||||||||||
Date Executed | Nov. 20, 2017 | ||||||||||||||||
Promissory Note interest rate | 10.00% | ||||||||||||||||
Maturity Date | Dec. 31, 2018 | ||||||||||||||||
Term of repayment | 12 months | ||||||||||||||||
Owed in principal | $ 80,000 | ||||||||||||||||
Accrued Interest | 0 | ||||||||||||||||
Interest Expense | $ 6,882 | ||||||||||||||||
Loans Payable 6 | |||||||||||||||||
Date Executed | Jan. 12, 2018 | ||||||||||||||||
Promissory Note interest rate | 5850.00% | ||||||||||||||||
Term of repayment | 12 months | ||||||||||||||||
Owed in principal | $ 6,133 | ||||||||||||||||
Accrued Interest | 184 | ||||||||||||||||
Interest Expense | $ 5,520 | ||||||||||||||||
Loans Payable 9 | |||||||||||||||||
Date Executed | Feb. 27, 2018 | ||||||||||||||||
Promissory Note interest rate | 10.00% | ||||||||||||||||
Face Value of note | $ 125,000 | ||||||||||||||||
Cash received | 125,000 | ||||||||||||||||
Original Issue Discount | 7,000 | ||||||||||||||||
Principal and Interest Payments | $ 2,500 | ||||||||||||||||
Interest Expense | $ 5,453 | ||||||||||||||||
Financing Expense | $ 7,000 | ||||||||||||||||
Loans Payable 10 | |||||||||||||||||
Date Executed | May 22, 2018 | ||||||||||||||||
Promissory Note interest rate | 51.00% | ||||||||||||||||
Term of repayment | 12 months | ||||||||||||||||
Owed in principal | $ 18,375 | ||||||||||||||||
Accrued Interest | 1,960 | ||||||||||||||||
Interest Expense | $ 4,900 | ||||||||||||||||
Loans Payable 11 | |||||||||||||||||
Date Executed | Jun. 15, 2018 | ||||||||||||||||
Promissory Note interest rate | 10.00% | ||||||||||||||||
Owed in principal | $ 116,600 | ||||||||||||||||
Accrued Interest | 0 | ||||||||||||||||
Interest Expense | 3,418 | ||||||||||||||||
Financing Expense | 68,176 | ||||||||||||||||
Value of Warrants Issued - Debt Discount | 110,000 | ||||||||||||||||
Unamortized Discount | $ 48,424 | ||||||||||||||||
Loans Payable 12 | |||||||||||||||||
Date Executed | Aug. 1, 2018 | ||||||||||||||||
Promissory Note interest rate | 10.00% | ||||||||||||||||
Owed in principal | $ 127,748 | ||||||||||||||||
Accrued Interest | 0 | ||||||||||||||||
Interest Expense | 2,171 | ||||||||||||||||
Financing Expense | 38,499 | ||||||||||||||||
Value of Warrants Issued - Debt Discount | 71,373 | ||||||||||||||||
Unamortized Discount | $ 38,499 | ||||||||||||||||
Loans Payable 13 | |||||||||||||||||
Date Executed | Aug. 14, 2018 | ||||||||||||||||
Promissory Note interest rate | 5857.00% | ||||||||||||||||
Face Value of note | $ 19,600 | ||||||||||||||||
Cash received | $ 19,600 | ||||||||||||||||
Term of repayment | 12 months | ||||||||||||||||
Owed in principal | $ 17,967 | ||||||||||||||||
Accrued Interest | 784 | ||||||||||||||||
Interest Expense | $ 1,568 | ||||||||||||||||
Loans Payable 14 | |||||||||||||||||
Date Executed | Sep. 20, 2018 | ||||||||||||||||
Promissory Note interest rate | 10.00% | ||||||||||||||||
Face Value of note | $ 52,500 | ||||||||||||||||
Cash received | 50,000 | ||||||||||||||||
Original Issue Discount | 2,500 | ||||||||||||||||
Owed in principal | $ 50,000 | ||||||||||||||||
Accrued Interest | 144 | ||||||||||||||||
Interest Expense | 144 | ||||||||||||||||
Financing Expense | 5,147 | ||||||||||||||||
Warrants Issued | $ 25,000 | ||||||||||||||||
Warrant Exercise Price | $ 0.8 | ||||||||||||||||
Value of Warrants Issued - Debt Discount | 50,000 | ||||||||||||||||
Unamortized Discount | $ 47,353 | ||||||||||||||||
Loans Payable 15 | |||||||||||||||||
Promissory Note interest rate | 10.00% | ||||||||||||||||
Face Value of note | $ 52,500 | ||||||||||||||||
Cash received | 50,000 | ||||||||||||||||
Original Issue Discount | 2,500 | ||||||||||||||||
Owed in principal | $ 50,000 | ||||||||||||||||
Accrued Interest | 144 | ||||||||||||||||
Interest Expense | 144 | ||||||||||||||||
Financing Expense | 5,147 | ||||||||||||||||
Warrants Issued | $ 25,000 | ||||||||||||||||
Warrant Exercise Price | $ 0.8 | ||||||||||||||||
Value of Warrants Issued - Debt Discount | 50,000 | ||||||||||||||||
Unamortized Discount | $ 47,353 | ||||||||||||||||
Installment Loans | |||||||||||||||||
Promissory Note interest rate | 6.10% | ||||||||||||||||
Term of repayment | 10 months | ||||||||||||||||
Owed in principal | $ 10,257 | ||||||||||||||||
Accrued Interest | $ 0 | ||||||||||||||||
Installment Loans | |||||||||||||||||
Face Value of note | $ 35,089 | ||||||||||||||||
Cash received | $ 35,089 |
CONVERTIBLE NOTES PAYABLE - Con
CONVERTIBLE NOTES PAYABLE - Convertible Note Payable (Details) | Sep. 30, 2018USD ($) |
Convertible Notes Payable One[Member] | |
Convertible Note payable | |
Total Net of unamortized discount | |
Convertible Notes Payable Two[Member] | |
Convertible Note payable | |
Total Net of unamortized discount | |
Convertible Notes Payable Three[Member] | |
Convertible Note payable | 225,000 |
Unamortized debt discount | (176,045) |
Total Net of unamortized discount | 48,955 |
Convertible Notes Payable Four[Member] | |
Convertible Note payable | 330,000 |
Unamortized debt discount | (309,834) |
Total Net of unamortized discount | 20,166 |
Total convertible notes, net | $ 69,121 |
CONVERTIBLE NOTES PAYABLE (Deta
CONVERTIBLE NOTES PAYABLE (Details Narrative) - USD ($) | 12 Months Ended | ||||||
Sep. 30, 2018 | Sep. 19, 2018 | Aug. 21, 2018 | Aug. 01, 2018 | Jul. 02, 2018 | Jun. 15, 2018 | Mar. 23, 2018 | |
Master Convertible Promissory Note | $ 330,000 | $ 225,000 | $ 500,000 | $ 500,000 | |||
Amount borrowed | 199,000 | 200,000 | |||||
Original issue discount, value | $ 30,000 | $ 5,625 | $ 6,600 | $ 20,000 | |||
Original issue discount, rate | 10.00% | 10.00% | |||||
Accrued Interest | $ 12,730 | ||||||
Legal fees paid | 225,000 | ||||||
Due diligence fees paid | $ 26,000 | ||||||
Pre payment penalty | $ 25,000 | ||||||
Convertible Notes Payable One[Member] | |||||||
Interest Rate | 12.00% | ||||||
Debt issuance costs | $ 15,750 | ||||||
Commitment shares received | 237,500 | ||||||
Debt discount | $ 85,348 | ||||||
Debt discount initial valuation | 98,902 | ||||||
Principal owed | 220,000 | ||||||
Accrued Interest | $ 12,730 | ||||||
Accrued interest converted to shares | 258,589 | ||||||
Aggregate debt discount as financing expense | $ 220,000 | ||||||
Convertible Notes Payable Two[Member] | |||||||
Interest Rate | 12.00% | ||||||
Debt issuance costs | $ 11,900 | ||||||
Commitment shares received | 137,500 | ||||||
Non returnable shares | 150,000 | ||||||
Debt discount | $ 130,829 | ||||||
Debt discount initial valuation | 56,271 | ||||||
Principal owed | 225,000 | ||||||
Accrued Interest | $ 5,474 | ||||||
Accrued interest converted to shares | 256,082 | ||||||
Aggregate debt discount as financing expense | $ 225,000 | ||||||
Convertible Notes Payable Three[Member] | |||||||
Interest Rate | 12.00% | ||||||
Debt issuance costs | $ 26,000 | ||||||
Commitment shares received | 137,500 | ||||||
Non returnable shares | 100,000 | ||||||
Debt discount | $ 113,727 | ||||||
Debt discount initial valuation | 73,373 | ||||||
Principal owed | 225,000 | ||||||
Accrued Interest | 2,959 | ||||||
Aggregate debt discount as financing expense | 48,955 | ||||||
Interest Expense | $ 2,959 | ||||||
Convertible Notes Payable Four[Member] | |||||||
Interest Rate | 12.00% | ||||||
Debt issuance costs | $ 20,700 | ||||||
Debt discount | 279,300 | ||||||
Aggregate debt discount as financing expense | $ 20,166 |
FAIR VALUE OF FINANCIAL INSTR_3
FAIR VALUE OF FINANCIAL INSTRUMENTS AND DERIVATIVE LIABILITIES - Derivative Financial Instruments (Details) | 12 Months Ended |
Sep. 30, 2018USD ($) | |
Amount | |
Embedded Conversion Derivative Liability | |
Warrant and Option Derivative Liabilities | |
Total | |
Level 1 | |
Embedded Conversion Derivative Liability | |
Warrant and Option Derivative Liabilities | |
Total | |
Level 2 | |
Embedded Conversion Derivative Liability | |
Warrant and Option Derivative Liabilities | |
Total | |
Level 3 | |
Embedded Conversion Derivative Liability | |
Warrant and Option Derivative Liabilities | |
Total |
FAIR VALUE OF FINANCIAL INSTR_4
FAIR VALUE OF FINANCIAL INSTRUMENTS AND DERIVATIVE LIABILITIES - Fair Value Assumptions (Details) | 12 Months Ended |
Sep. 30, 2018USD ($) | |
Debt Disclosure [Abstract] | |
Risk Free Interest Rate Min | 1.92% |
Risk Free Interest Rate Max | 2.81% |
Exptected Term in years Min | 3 months 5 days |
Expected Term Max | 6 years 12 months 29 days |
Expected Volatility Min | 13400.00% |
Expected Volatility Max | 33400.00% |
Expected Dividends | $ 0 |
FAIR VALUE OF FINANCIAL INSTR_5
FAIR VALUE OF FINANCIAL INSTRUMENTS AND DERIVATIVE LIABILITIES - Derivative Liabilities (Details) | Sep. 30, 2018USD ($) |
Debt Disclosure [Abstract] | |
Debt Discount from derivative liabilities | $ 789,219 |
Initial Loss Recorded | 4,160,476 |
Fair value of derivative liability at issuance | 12,537,117 |
Resolution of derivative liability reclassified to additional paid in capital | (52,291,024) |
Change in fair market value | 34,804,212 |
Closing Balance |
FAIR VALUE OF FINANCIAL INSTR_6
FAIR VALUE OF FINANCIAL INSTRUMENTS AND DERIVATIVE LIABILITIES (Details Narrative) | 12 Months Ended |
Sep. 30, 2018USD ($) | |
Long Term Debt stated at fair value | $ 150,000 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Interest Expense | $ 2,895 | |
Consulting Agmt | ||
Bonus on Revenue | 50.00% | |
Employment Agreement costs maximum per year | $ 15,000 | |
Medical Insurance Stripend | 1,000 | |
Paid earnings | 194,527 | 193,425 |
Defered as Accrued Compensation | 123,114 | |
Deferred Compensation Owed | $ 123,796 | 58,810 |
Consulting Agmt 2 | ||
Bonus on Revenue | 50.00% | |
Employment Agreement costs maximum per year | $ 15,000 | |
Medical Insurance Stripend | 1,000 | |
Paid earnings | 194,527 | 193,425 |
Defered as Accrued Compensation | 87,746 | |
Deferred Compensation Owed | $ 89,351 | 78,252 |
Consulting Agmt 3 | ||
Date of Agreement | Jul. 1, 2016 | |
Term of Agreement | 1 year | |
Professional fees per year minimum | $ 117,000 | |
Professional fees per year maximum | 117,000 | |
Professional fees owed | $ 160,000 | |
Bonus on Revenue | 50.00% | |
Bonus on Revenue from Direct Sales | 5000000.00% | |
Medical Insurance Stripend | $ 500 | |
Paid earnings | 180,612 | 116,377 |
Defered as Accrued Compensation | 69,604 | |
Deferred Compensation Owed | $ 73,625 | 6,288 |
Two Promissory Notes | ||
Date of Agreement | Feb. 9, 2018 | |
Promissory Note, Value | $ 30,000 | |
Prommisory Note, interest rate | 15.00% | |
Principal Owed | $ 30,000 | |
Interest Owed | $ 2,832 | |
Promissory Note | ||
Date of Agreement | Aug. 13, 2017 | |
Term of Agreement | 12 months | |
Promissory Note, Value | $ 80,000 | |
Prommisory Note, interest rate | 15.00% | |
Principal Owed | $ 0 | 73,333 |
Repaid to principal | 73,333 | 6,667 |
Interest Expense | 12,000 | 1,800 |
Interest Owed | 600 | $ 0 |
11 Promissory Notes | ||
Promissory Note, Value | $ 189,690 | |
Prommisory Note, interest rate | 15.00% | |
Principal Owed | $ 189,690 | |
Interest Owed | $ 10,733 | |
Warrant Purchase One | ||
Shares purchased from warrant exercise | 1,353 | |
Par value of warrants | $ .001 | |
Purchase price of warrants | $ 1.5 | |
Value of warrant to company | $ 2,030 | |
Warrant Purchase Two | ||
Shares purchased from warrant exercise | 900,000 | |
Purchase price of warrants | $ .80 | |
Value of warrant to company | $ 2,607,096 | |
Term of Warrant | 10 years | |
Risk free interest rate | 3.05% | |
Dividend Yield | 0.00% | |
Volatility Rate | 191.00% | |
Vested Immediately | $ 300,000 | |
Warrants Vested | 328,571 | |
Company Expense | 951,797 | |
Promissory Note, Value | $ 9,000 | |
Prommisory Note, interest rate | 15.00% | |
Principal Owed | $ 9,000 | |
Interest Owed | 629 | |
Eight Promissory Notes | ||
Value of warrant to company | 163,100 | |
Promissory Note, Value | $ 163,100 | |
Prommisory Note, interest rate | 15.00% | |
Principal Owed | $ 163,100 | |
Interest Owed | $ 6,562 |
STOCKHOLDERS' EQUITY (Details N
STOCKHOLDERS' EQUITY (Details Narrative) | 1 Months Ended | 12 Months Ended | |||||
Dec. 30, 2016USD ($)shares | Nov. 30, 2016USD ($)shares | Sep. 30, 2018USD ($)$ / sharesshares | Sep. 30, 2017USD ($)$ / sharesshares | Aug. 01, 2018$ / shares | Jun. 15, 2018$ / shares | Apr. 13, 2017USD ($)shares | |
Common Stock issued to settle accounts payable | 41,640 | ||||||
Common Stock issued to settle accounts payable, value | $ | $ 75,734 | ||||||
Common Stock, Shares authorized | 100,000,000 | 100,000,000 | |||||
Common Stock, par value | $ / shares | $ 0.001 | $ 0.001 | |||||
Preferred Stock, Shares authorized | 10,000,000 | 10,000,000 | |||||
Preferred Stock, par value | $ / shares | $ 0.001 | $ 0.001 | |||||
Common Stock, shares issued | 36,116,447 | 33,409,471 | 25,000 | ||||
Common Stock, value per share | 2.75 | ||||||
Common Stock Issued, Value | $ | $ 68,750 | ||||||
Preferred Stock, Shares issued | 1,000,000 | 1,000,000 | |||||
Series A Preferred Stock, Shares | 1,000,000 | ||||||
Series A Preferred Stock, Par Value | $ / shares | $ 0.001 | ||||||
Cashless Exercise of options | $ | $ 4,399 | ||||||
Shares issued for direct investment | 339,875 | ||||||
Shares issued for direct investment, value | $ | $ 271,900 | $ 880,000 | |||||
Number of investors in private placement | 1600.00% | ||||||
Purchase Price per share issued for Direct Investment | $ / shares | $ 0.80 | ||||||
Converted Shares | 258,589 | ||||||
Warrant, exercise price | $ / shares | $ 0.8 | $ 0.80 | |||||
Dividend Rate | 2.00% | ||||||
Liquidation Preference Per Share | $ / shares | $ .02 | ||||||
Date of Certificate of Amendment | Apr. 15, 2015 | ||||||
Voting rates for shareholders | 45 | ||||||
Returnable Shares issued as commitment fee | 137,500 | ||||||
Non Returnable Shares issued | 100,000 | ||||||
Date of Ammendment to Agreement | Jun. 29, 2018 | ||||||
Principal | $ | $ 220,000 | ||||||
Accrued Interest | $ | 12,730 | ||||||
Stock Compensation | $ | $ 218,625 | ||||||
Director [Member] | |||||||
Common stock Issued | 1,466,352 | ||||||
Cashless Exercise of options | $ | $ 1,500,000 | ||||||
Auctus Fund LLC [Member] | |||||||
Converted Shares | 256,082 | ||||||
Shares cancelled and retuned to Company | 137,500 | ||||||
Returnable Shares issued as commitment fee | 137,500 | ||||||
Non Returnable Shares issued | 150,000 | ||||||
Principal | $ | $ 225,000 | ||||||
Accrued Interest | $ | $ 5,474 | ||||||
EMA Financial LLC [Member] | |||||||
Shares cancelled and retuned to Company | 137,500 | ||||||
Returnable Shares issued as commitment fee | 137,500 | ||||||
Non Returnable Shares issued | 100,000 | ||||||
Regal Consulting LLC [Member] | |||||||
Date of Issuance | Sep. 11, 2018 | ||||||
Returnable Shares issued as commitment fee | 30,000 | ||||||
Stock Compensation | $ | $ 55,100 | ||||||
Cash issued for services | $ | $ 20,000 | ||||||
Thirty Eight Investors [Member] | |||||||
Shares issued for direct investment | 1,101,000 | ||||||
Shares issued for direct investment, value | $ | $ 880,000 | ||||||
Number of investors in private placement | 3800.00% | ||||||
Purchase Price per share issued for Direct Investment | $ / shares | $ 0.80 | ||||||
Teo Officers [Member] | |||||||
Common stock Issued | 2,932,704 | ||||||
Cashless Exercise of options | $ | $ 3,000,000 | ||||||
Webcor Construction LP [Member] | |||||||
Shares issued for direct investment | 50,000 | ||||||
Debt settlement | $ | $ 158,753 | ||||||
Fair Value of Returnable Shares | $ | 212,500 | ||||||
Cash issued for services | $ | 58,000 | ||||||
Loss on settlement of debt | $ | $ 111,747 |
STOCK WARRANTS - Schedule of Wa
STOCK WARRANTS - Schedule of Warrant Summary (Details) - $ / shares | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Accounting Policies [Abstract] | |||
Beginning Balance, number of shares | 8,612,100 | 8,612,100 | 13,122,100 |
Beginning Balance, weighted average exercise price | $ 0.85 | $ 0.59 | |
Warrants Granted and Assumed, number of shares | 1,191,600 | 216,600 | |
Warrants Granted and Assumed, weighted average exercise price | $ 0.80 | ||
Warrants exercised, number of shares | (814,401) | 684,401 | (4,500,000) |
Warrants exercised, weighted average exercise price | $ .36 | $ 0.29 | $ 0.083 |
Ending Balance, number of shares | 8,989,299 | 8,612,100 | 8,612,100 |
Ending Balance, weighted average exercise price | $ .89 | $ 0.85 | $ 0.59 |
STOCK WARRANTS - Fair Value Ass
STOCK WARRANTS - Fair Value Assumptions Warrants (Details) | 12 Months Ended |
Sep. 30, 2018USD ($) | |
Debt Disclosure [Abstract] | |
Risk Free Interest Rate Min | 2.01% |
Risk Free Interest Rate Max | 3.05% |
Exptected Term in years Min | 5 years |
Expected Term Max | 10 years |
Expected Volatility Min | 15800.00% |
Expected Volatility Max | 16500.00% |
Expected Dividends | $ 0 |
STOCK WARRANTS (Details Narrati
STOCK WARRANTS (Details Narrative) - USD ($) | 12 Months Ended | |||||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 21, 2018 | Sep. 20, 2018 | Aug. 28, 2018 | Aug. 01, 2018 | Jun. 15, 2018 | Jan. 01, 2018 | |
Cashless exercise of options | $ 4,399 | |||||||
Stock Based Compensation | $ 1,655,299 | |||||||
Weighted Average Period | 3 years 3 months 3 days | |||||||
Warrants Exercisable | 8,417,870 | |||||||
Warrants requiring cash investment | $ 4,498,647 | |||||||
Warrants containing cashless provisions | 4,460,652 | |||||||
Warrant price per share | $ 1.5 | |||||||
Unvested Warrants outstanding | 541,429 | |||||||
Investors exercised warrant to purchase | 258,401 | |||||||
Purchase Price per share minimum | $ 0.083 | |||||||
Purchase price per share maximum | $ 1.5 | |||||||
Company received | $ 44,938 | |||||||
Company Issued Shares of Common Stock | 459,889 | |||||||
Cashless exercise | 556,000 | |||||||
Warants issued, exercise price | $ .36 | |||||||
Intrinsic Value of outstanding warrants | $ 45,021,758 | |||||||
Weighted Average remaining term of warrants | 4 years 10 months 6 days | |||||||
Officers And Directors | ||||||||
Common Stock Issued | $ 4,399,056 | |||||||
Cashless exercise of options | $ 4,500,000 | |||||||
Strike Price of options | $ .83 | |||||||
Investor 2 | ||||||||
Warrant price per share | $ 0.80 | |||||||
Company Issued Shares of Common Stock | 100,000 | |||||||
Warrants issued, value | $ 234,095 | |||||||
Investor 4 | ||||||||
Investors exercised warrant to purchase | 116,600 | |||||||
par value of stock | 80.00% | |||||||
Investor 3 | ||||||||
Investors exercised warrant to purchase | 25,000 | |||||||
par value of stock | 80.00% | |||||||
Zero Positive LLC | ||||||||
Investors exercised warrant to purchase | 900,000 | |||||||
par value of stock | 80.00% | |||||||
Vested immediately | 300,000 | |||||||
Vested Warrants | 328,571 | |||||||
Expense recorded | $ 951,797 | |||||||
Warrants issued, value | $ 2,607,096 | |||||||
Investor 5 | ||||||||
Investors exercised warrant to purchase | 25,000 | |||||||
par value of stock | 80.00% | |||||||
Investor 6 | ||||||||
Investors exercised warrant to purchase | 25,000 | |||||||
par value of stock | 80.00% |
STOCK OPTIONS - Schedule of Opt
STOCK OPTIONS - Schedule of Option Summary (Details) - $ / shares | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Other Liabilities Disclosure [Abstract] | |||
Beginning Balance, number of shares | 319,206 | 6,902 | |
Beginning Balance, weighted average exercise price | $ 1.18 | $ 3.45 | |
Options Granted and Assumed, number of shares | 312,304 | 6,902 | |
Options Granted and Assumed, weighted average exercise price | $ 1.18 | ||
Ending Balance, number of shares | 319,206 | 6,902 | |
Ending Balance, weighted average exercise price | $ 1.18 | $ 3.45 |
STOCK OPTIONS - Fair Value Ass
STOCK OPTIONS - Fair Value Assumptions 2018 (Details) | 12 Months Ended |
Sep. 30, 2018USD ($)$ / shares | |
Other Liabilities Disclosure [Abstract] | |
Risk Free Interest Rate Min | $ .0146 |
Risk Free Interest Rate Max | $ .0278 |
Exptected Term in years Min | 2 years |
Expected Volatility Min | 15800.00% |
Expected Volatility Max | 16500.00% |
Expected Dividends | $ | $ 0 |
STOCK OPTIONS - Fair Value A_2
STOCK OPTIONS - Fair Value Assumptions 2017 (Details) | 12 Months Ended |
Sep. 30, 2018USD ($) | |
Other Liabilities Disclosure [Abstract] | |
Risk Free Interest Rate Min | 1.46% |
Risk Free Interest Rate Max | 2.78% |
Exptected Term in years | 3 years |
Expected Volatility Min | 11600.00% |
Expected Volatility Max | 12000.00% |
Expected Dividends | $ 0 |
STOCK OPTIONS (Details Narrativ
STOCK OPTIONS (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2018 | Mar. 10, 2018 | |
Date of incetive plan | Jun. 19, 2017 | |
Shares reserved for issuance | 3,000,000 | |
Shares available for issuance | 2,680,164 | |
Options exercisable to purchase | 208,932 | |
Unvested options outstanding | 110,273 | |
Options Issued to purchase shares | 62,304 | |
Minimum Market Price | 157.00% | |
Maximum Market Price | 345.00% | |
Value of Shares | $ 75,001 | |
Options Issued to Consultants | 250,000 | |
Vesting Period | 12 months | |
Expiration of Options Period | 24 months | |
Value of Options | $ 342,500 | |
Expenses as Stock Compensation | $ 130,000 | $ 191,426 |
Intrinsic Value | $ 2,871,783 | |
Weighted average remaining term | 2 years 3 months 3 days | |
Stock based compensation for non-vested options | $ 151,074 | |
Weighted Average remaining term options | 5 months 10 days | |
Consultants | ||
Date of incetive plan | Mar. 10, 2018 | |
Vesting Period | 12 months | |
Expiration of Options Period | 24 months | |
Employees | ||
Options Issued to purchase shares | 6,902 | |
Maximum Market Price | 345.00% | |
Prepaid Stock Compensation | $ 16,665 |
INCOME TAXES - Schedule of Inco
INCOME TAXES - Schedule of Income Tax Expense (Details) - USD ($) | Sep. 30, 2018 | Sep. 30, 2017 |
Income Tax Disclosure [Abstract] | ||
Cumulative tax net operating losses | $ 27,600,000 | $ 21,000,000 |
Deferred tax asset | 5,800,000 | 4,400,000 |
Valuation allowance | (5,800,000) | (4,400,000) |
Current taxes payable | ||
Income tax expense |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | ||
Deferred tax asset | $ 5,800,000 | $ 4,400,000 |
Effective tax rate | 21.00% | |
Gross federal net operating loss | $ 27,600,000 | $ 21,000,000 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | 12 Months Ended | ||||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | |
Future minimum lease payments | $ 43,170 | $ 50,521 | $ 49,049 | ||
Contract from Bethel-Webcor | $ 900,000 | ||||
Annual Rent Excalation | 3.00% | ||||
Lease Agreements 2 | |||||
Monthly Rent Expense Minimum | $ 4,057 | ||||
Term of Agreement | 37 months | ||||
Term of Agreement After Year One | 1 month | ||||
Date of Agreement | May 15, 2018 | ||||
Lease Agreements | |||||
Monthly Rent Expense | $ 850 | ||||
Term of Agreement | 1 year | ||||
Date of Lease Termination | Jan. 22, 2016 |
MAJOR CUSTOMER - Customers (Det
MAJOR CUSTOMER - Customers (Details) | Sep. 30, 2018 | Sep. 30, 2017 |
Notes to Financial Statements | ||
Bethel-Webcor | 7042.00% | 1080.00% |
Jacobs/HDR a joint venture | 1300.00% | |
Macerich | 2440.00% | |
Firenze | 2000.00% | |
Daust | 1182.00% |
MAJOR CUSTOMER - Suppliers (Det
MAJOR CUSTOMER - Suppliers (Details) | Sep. 30, 2018 | Sep. 30, 2017 |
Notes to Financial Statements | ||
CED Greentech | 1357.00% | 5490.00% |
Rexel USA, Inc. | 2747.00% | |
ESS, Inc. | 1929.00% | |
Ideal Power, Inc. | 1472.00% | |
Integrated Power Systems | 1150.00% | |
Simpliphi Power | 180.00% | 2760.00% |
MAJOR CUSTOMER (Details Narrati
MAJOR CUSTOMER (Details Narrative) | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Notes to Financial Statements | ||
Customer Representation Percentage | 1000.00% | 1000.00% |
Supplier Representaion Percentage | 1000.00% | 1000.00% |