Quarterly report pursuant to Section 13 or 15(d)

COMMON STOCK/PAID IN CAPITAL

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COMMON STOCK/PAID IN CAPITAL
9 Months Ended
Jun. 30, 2018
Stockholders' Equity Note [Abstract]  
COMMON STOCK/PAID IN CAPITAL

NOTE 6 – COMMON STOCK/PAID IN CAPITAL  

At our annual shareholder meeting in May of 2018 our shareholders approved increasing the number of authorized shares of common stock from 975,000,000 to 1,500,000,000. The number of authorized shares of preferred stock was not changed and is 50,000,000.

 

As discussed in Note 5, between June and November 2016, the Company issued 27.9 million warrants in conjunction with convertible notes payable. The warrants have an exercise price of $0.03 and a term of the earlier of 3 years or upon a change of control. Based upon the allocation of proceeds between the convertible notes payable and the warrants, approximately $452,422 was allocated to the warrants. During June through August 2017, the maturity date of all of the Bridge Financing Notes was extended to January 15, 2018 in exchange for the issuance of 25% additional warrants. The warrants have an exercise price of $0.03 and the same expiration date (three years from original transaction) as the original warrants. On January 15, 2018 the maturity date of the Bridge Financing Notes was extended to April 16, 2018 in exchange for the issuance of 10% additional warrants. (See Note 5 for status of notes). The warrants have an exercise price of $0.10 per share and the same expiration date (three years from original transaction) as the original warrants.

The fair value of the warrants were determined using the Black Scholes valuation model with the following key assumptions:

 

    June 2016     July 2016     August 2016     November 2016     June 2017     July 2017     August 2017     January 2018  
Warrants Issued   12.9 million     10.0 million     3.3 million     1.7 million     3.2 million     2.5 million     1.25 million     2.8 million  
Stock Price (1)   $ 0.054     $ 0.040     $ 0.032     $ 0.029     $ 0.025     $ 0.019     $ 0.016     $ 0.11  
Exercise Price   $ 0.03     $ 0.03     $ 0.03     $ 0.03     $ 0.03     $ 0.03     $ 0.03     $ 0.10  
Term     3 years       3 years       3 years       3 years       2 years       2 years       2 years       1.5 years (2)  
Risk Free Rate     .87 %     .80 %     .88 %     1.28 %     1.35 %     1.35 %     1.33 %     1.89 %
Volatility     135 %     138 %     137 %     131 %     135 %     136 %     135 %     163 %

(1) Fair market value on the date of agreement.

(2) Average term.

During the period December 2016 through December 2017 the Company issued 3,500,000 shares of restricted stock to an investor as part of financing transactions (see Note 5).

As discussed in Note 5, in December 2016, the Company issued 550,000 warrants in conjunction with a convertible note payable. The warrants have an exercise price of $0.10 and a term of the earlier of 5 years or upon a change of control. Based upon the allocation of proceeds between the convertible note payable and the warrants, approximately $13,188 was allocated to the warrants. In March 2017, the Company issued 1,100,000 warrants in conjunction with a convertible note payable. The warrants have an exercise price of $0.10 and a term of the earlier of 5 years or upon a change of control. Based upon the allocation of proceeds between the convertible note payable and the warrants, approximately $14,051 was allocated to the warrants. In October 2017, the Company issued 1,100,000 warrants in conjunction with a convertible note payable. The warrants have an exercise price of $0.10 and a term of the earlier of 5 years or upon a change of control. Based upon the allocation of proceeds between the convertible note payable and the warrants, approximately $20,175 was allocated to the warrants. In December 2017, the Company issued 1,100,000 warrants in conjunction with a convertible note payable. The warrants have an exercise price of $0.10 and a term of the earlier of 5 years or upon a change of control. Based upon the allocation of proceeds between the convertible note payable and the warrants, approximately $27,212 was allocated to the warrants. 

The fair value of the warrants were determined using the Black Scholes valuation model with the following key assumptions:  

 

  December 2016 March 2017 October 2017 December 2017
Number of Warrants Issued   550,000   1,100,000   1,100,000   1,100,000
Stock Price: $ 0.028 $ 0.0279 $ 0.04 $ 0.068
Exercise Price: $ 0.10 $ 0.10 $ 0.10 $ 0.10
Term:   5 years   5 years   5 years   5 years
Risk Free Rate:   2.02%   2.13%   1.95%   2.16%
Volatility:   155%   127%   150%   149%