Annual report pursuant to Section 13 and 15(d)

COMMON STOCK/PAID IN CAPITAL

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

NOTE 9 - 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 7, during the year ended September 30, 2016, the Company issued 26.2 million warrants in conjunction with the Bridge Financing Notes. The warrants have an exercise price of $0.03 and a term of the earlier of 3 years or upon a change of control. In November 2016, the Company issued 1.7 million warrants in conjunction with the Bridge Financing Notes. The warrants have an exercise price of $0.03 and a term of the earlier of 3 years or upon a change of control. In 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. In January 2018, the maturity date of all of the Bridge Financing Notes was extended to April 16, 2018 in exchange for the issuance of 10% additional warrants. The warrants have an exercise price of $0.10 and the same expiration date (three years from original transaction) as the original warrants. In June 2018, a majority of the Bridge Note holders extended their notes to January 15, 2019, thus extending all the remaining Bridge Notes to this date. The fair value of the warrants were determined using the Black Scholes valuation model with the following key assumptions:

 

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:   $ 0.054 (1)   $ 0.040 (1)   $ 0.032 (1)   $ 0.029 (1)   $ 0.025 (1)   $ 0.019 (1)   $ 0.016 (1)   $ 0.11 (1)
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  
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.

 

A summary of warrants, issued in conjunction with the Bridge Financing Notes and outstanding at September 30, 2018:

 

          Warrants Outstanding     Warrants Exercisable  
Date Issued   Exercise Price     Number Outstanding     Weighted Average Remaining Contractual Life (Yrs)     Weighted Average Exercise Price     Number Exercisable     Weighted Average Exercise Price  
June 2016   $ 0.03       12,566,667       .69     $ 0.03       12,566,667     $ 0.03  
July 2016   $ 0.03       10,000,000       .79     $ 0.03       10,000,000     $ 0.03  
August 2016   $ 0.03       3,333,333       .88     $ 0.03       3,333,333     $ 0.03  
November 2016   $ 0.03       1,666,667       1.13     $ 0.03       1,666,667     $ 0.03  
June 2017   $ 0.03       3,141,667       .69     $ 0.03       3,141,667     $ 0.03  
July 2017   $ 0.03       2,500,000       .79     $ 0.03       2,500,000     $ 0.03  
August 2017   $ 0.03       833,333       .88     $ 0.03       833,333     $ 0.03  
August 2017   $ 0.03       416,667       1.13     $ 0.03       416,667     $ 0.03  
January 2018   $ 0.10       2,790,000        .78     $ 0.10       2,790,000     $ 0.10  

 

In December 2016 and March 2017 the Company issued 500,000 and 1,000,000 shares of GulfSlope Energy stock, respectively to an investor as part of a financing transaction (see Financing Notes in Note 7). In December 2016 and March 2017 the Company issued 550,000 and 1,100,000 warrants to purchase stock at $0.10 per share to an investor as part of a financing transaction (see Financing Notes in Note 7). The warrants have a term of 5 years.

 

In October 2017 and December 2017 the Company issued 1,000,000 and 1,000,000 shares of GulfSlope Energy stock, respectively to an investor as part of a financing transaction (see Financing Notes in Note 7). In October 2017 and December 2017 the Company issued 1,100,000 and 1,100,000 warrants to purchase stock at $0.10 per share to an investor as part of a financing transaction (see Financing Notes in Note 7). The warrants have a term of 5 years.

 

A summary of the Financing Note warrants, issued in conjunction with the Financing Notes and outstanding at September 30, 2018:

 

      Warrants Outstanding     Warrants Exercisable  
Exercise Price     Number Outstanding     Remaining Contractual Life (Yrs)     Weighted Average Exercise Price     Number Exercisable     Weighted Average Exercise Price  
 $ 0.10       550,000       3.25     $ 0.10       550,000     $ 0.10  
 $ 0.10       1,100,000       3.46     $ 0.10       1,100,000     $ 0.10  
 $ 0.10       1,100,000       4.04     $ 0.10       1,100,000     $ 0.10  
 $ 0.10       1,100,000       4.21     $ 0.10       1,100,000     $ 0.10  

 

Beginning in August 2018, the Company began negotiating a capital raise which is expected to consist of the issuance of common shares and warrants. The specific terms of the capital raise have not been finalized including the number of shares and warrants to be received by each investor. Through September 30, 2018, approximately $970,000 has been received from investors related to this capital raise; however, the agreements have not been finalized, and no shares or equity have been issued. As such, the funds received have been recorded as a liability on the balance sheet as of September 30, 2018.

 

In September 2018, the Company issued approximately 4 million shares of common stock valued at approximately $231,000 on the date of grant and 2 million warrants valued at $80,000 utilizing the Black Scholes model with an exercise price of $0.15 per share in settlement of a liability for services rendered.