Colorado
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84-1384159
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(State of Incorporation)
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(I.R.S. Employer
Identification No.)
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(Check one):
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☐ Large accelerated filer
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☐Accelerated filer
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☐ Non-accelerated filer
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☒ Smaller reporting company
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Page
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PART I
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Item 1.
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1
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Item 1A.
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6
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Item 1B.
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13
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Item 2.
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13
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Item 3.
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13
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Item 4.
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13
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PART II
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Item 5.
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14
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Item 6.
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15
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Item 7.
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15
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Item 7A.
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18
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Item 8.
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19
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Item 9.
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19
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Item 9A.
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19
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Item 9B.
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20
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PART III
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Item 10.
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21
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Item 11.
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23
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Item 12.
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25
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Item 13.
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26
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Item 14.
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26
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PART IV
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Item 15.
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27
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28
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F-1
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•
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Solar provides the ability to control and predict future energy costs. Our customers invest in the ability to self-generate power to offset and/or eliminate the purchase of third party utility provided electric energy. These investments provide predictability and control of energy costs, and can significantly reduce overall energy costs while insulating clients from rising retail electricity prices.
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•
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Maturity and dependability of solar technologies. The results and benefits from investments in solar power systems have produced extensive statistical performance data. This historical performance data allows investment benefits for near and long term future operations to be accurately estimated. This provides customers greater reliance on future results, and the confidence to make investments in solar.
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•
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Rapid capital recovery of solar investments. Reports provided by U.S. Energy Department continue to indicate that the installed price reductions for solar PV systems are driving record installation demand. These cost reductions for the major components that make up PV systems allow us to provide per watt pricing that, coupled with tax and operating benefits, can often result in capital investment recovery within 3 to 4 years.
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•
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Government Incentives. Helping to further facilitate the market for investments into solar power are Federal, State, and local government tax and investment incentives. Federal, state and local government bodies provide incentives to owners, operators, and end users of solar energy systems to promote solar energy in the form of rebates, tax credits, exclusion of solar energy systems from property tax assessments and, to a diminishing degree, other financial incentives such as system performance payments, payments for renewable energy credits associated with renewable energy generation and. These incentives help to drive customer acceptance of solar energy as an alternative to utility-provided power.
The Federal government currently offers a 30% Investment Tax Credit (“ITC”) under Section 48(a) of the Internal Revenue Code, or the ITC, for the installation of certain solar power facilities until December 31, 2016. By statute, this tax credit was scheduled to decrease to 10% on January 1, 2017, but was extended in December by Congress through 2019, after which it will fall to 26 percent in 2020, 22 percent in 2021 and 10 percent in 2022.
The investment economics for purchasing a solar energy system are also increased through its eligibility for accelerated depreciation, also known as the modified accelerated cost recovery system, or MACRS, depreciation, which allows for the depreciation of equipment according to an accelerated schedule set forth by the Internal Revenue Service. This acceleration of the investment depreciation creates a valuable tax benefit that reduces the overall cost of the solar energy system and improves the return on solar investment.
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•
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Lead Generation. We market our services utilizing efforts that include internet marketing, website, search engine optimization, direct mailer campaigns, and customer referrals. Our sales development efforts work with prospective customers from initial interest through tailored proposals and, ultimately, signed contracts.
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•
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Detailed Investment Analysis. We use information related to our customer’s energy usage, costs, planned operations, and tax basis to determine optimal solar system and investment sizing. We combine this data and provide customers with 25 year investment projections that detail capital recovery expectations, system performance and energy savings, tax and operating benefits, and property re-sale value improvement estimates.
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•
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Financing. We have established relationships with lenders and have been approved to offer their finance options to prospective customers. Through our lender association network we offer customers financing options that include commercial equipment loans, lease options, power purchase agreements (PPA’s), PACE & HERO financing through property tax assessment, and we offer clients the option to apply tax or local utility incentives towards system purchase buy-downs thereby reducing up front out of pocket expenditures or the amount of capital financed.
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•
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Design & Engineering. To ensure accuracy we perform our site surveys directly and do not rely on third party services. We then finalize designs that will match proposed financial results, and work with a highly skilled team of qualified engineers with extensive commercial solar experience to ensure compliance with all codes, and best practices for the solar system operation.
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•
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Installation. We make the installation process simple for our customers. Once we complete the design and engineering of a solar energy system, we obtain all necessary building permits. Then, as the general contractor and construction manager, we provide all materials and components and use qualified licensed contractors with commercial and solar experience to provide on-site assembly of solar systems, utility interconnections, and roofing or structural work. We manage and ensure local building department approvals, and arrange for interconnection to the power grid with the utility.
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•
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Monitoring, Maintenance, and Service. We provide our customers with real-time facility wide monitoring of solar energy generation, and facility wide energy consumption. In addition to providing clients with a better understanding of their energy usage, and the opportunity to modify their usage to realize savings, these monitoring systems allow us to confirm the continuing proper operation of installed solar energy systems. We also service what we sell and provide customers with a single source for all system maintenance or warranty coordination and service.
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•
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the construction of a significant number of new power generation plants, including nuclear, coal, natural gas or renewable energy technologies, and;
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•
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a reduction in the price of natural gas as a result of new drilling techniques or a relaxation of associated regulatory standards;
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investors may have difficulty buying and selling or obtaining market quotations;
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market visibility for our common stock may be limited; and
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a lack of visibility for our common stock may have a depressive effect on the market for our common stock.
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technological innovations or new products and services by us or our competitors;
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additions or departures of key personnel;
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sales of our common stock;
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our ability to integrate operations, technology, products and services;
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our ability to execute our business plan;
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operating results below expectations;
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loss of any strategic relationship;
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industry developments;
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economic and other external factors; and
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period-to-period fluctuations in our financial results.
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Year Ended September 30, 2016
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High
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Low
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Close
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|||||||||
First Quarter ended December 31, 2015
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0.0085
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0.0048
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0.0060
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|||||||||
Second Quarter ended March 31, 2016
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0.0075
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0.0035
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0.0044
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Third Quarter ended June 30, 2016
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0.0480
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0.0021
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0.0031
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|||||||||
Fourth Quarter ended September 30, 2016
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0.0030
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0.0002
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0.0012
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|||||||||
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||||||||||||
Year Ended September 30, 2015
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||||||||||||
First Quarter ended December 31, 2014
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0.009
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0.0047
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0.0051
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Second Quarter ended March 31, 2015
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0.029
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0.0051
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0.0125
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Third Quarter ended June 30, 2015
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0.014
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0.0090
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0.0109
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Fourth Quarter ended September 30, 2015
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0.011
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0.0061
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0.0082
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Leasehold improvements
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Length of the lease
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Computer software and equipment
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3 Years
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Furniture & fixtures
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5 Years
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Machinery & equipment
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5 Years
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Name
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Age
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Position Held
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Tenure
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Tom Djokovich
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59
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CEO, President, Director, Secretary, and acting Principal Accounting Officer
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CEO and Director since October 2003, Secretary & PAO since September 2009, President since January 2013
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Thomas Anderson
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51
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Director
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Since August 2001
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Oz Fundingsland
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73
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Director
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Since November 2007
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Michael Russak
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69
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Director
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Since November 2007
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Name and Principal Position
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Year
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Salary ($)
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Contributed
Services ($)
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Bonus ($)
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Stock
Awards ($)
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Option
Awards ($)
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All Other
Compensation ($)
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Total
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|||||||||||||||||||||||
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Tom Djokovich, CEO(1)
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2016
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169,000
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0
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0
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0
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0
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17,644
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186,644
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2015 |
169,000
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0
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0
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0
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0
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15,594
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184,594
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(1) |
In addition to Mr. Djokovich’s salary compensation the Company provided Mr. Djokovich with co-payments totaling $17,644 and $15,594 for health insurance premiums as part of the Company’s health insurance program in the fiscal periods ended 2016, and 2015 respectively.
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Name
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Grant
Date
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All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#)
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Exercise or
Base Price
of Option
Awards
($/Sh)
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Grant Date
Fair Value of
Stock and
Option Awards
($)
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Tom Djokovich, CEO
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2016
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0
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0
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0
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2015
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0
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0
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0
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OPTION AWARDS
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STOCK AWARDS
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Equity
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Equity
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Equity
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Incentive Plan
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Incentive Plan
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Incentive Plan
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Awards:
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Awards:
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|||||||||
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Number of
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Awards:
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Market
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Number of
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Market or
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|||||||||
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Number of
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Securities
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Number of
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Number of
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Value of
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Unearned
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Payout Value of
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|||||||||
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Securities
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Underlying
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Securities
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Shares or
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Shares or
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Shares, Units
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Unearned
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|||||||||
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Underlying
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Unexercised
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Underlying
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Units of
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Units of
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or Other
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Shares, Units or
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|||||||||
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Unexercised
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Unearned
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Unexercisable
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Option
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Option
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Stock That
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Stock that
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Rights That
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Other Rights
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|||||||||
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Options (#)
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Options (#)
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Unearned
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Exercise
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Expiration
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Have Not
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Have Not
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Have Not
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That Have Not
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|||||||||
Name
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Exercisable
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Unexercisable
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Options (#)
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Price ($)
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Date
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Vested (#)
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Vested ($)
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Vested (#)
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Vested (#)
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|||||||||
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|||||||||
Tom Djokovich,
CEO
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-
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-
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-
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-
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-
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-
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-
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-
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-
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Fees
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||||||||||||||||||||
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Earned or
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All
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|||||||||||||||||||
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Paid in
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Stock
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Option
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Other
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|||||||||||||||||
Name
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Cash ($)
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Awards ($)
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Awards ($)
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Compensation ($)
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Total ($)
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||||||||||||||||
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|||||||||||||||||||||
Tom Djokovich
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$
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0
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0
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0
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0
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$
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0
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||||||||||||||
Thomas Anderson
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$
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0
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0
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0
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0
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$
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0
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||||||||||||||
Oz Fundingsland
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$
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0
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0
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0
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0
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$
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0
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||||||||||||||
Dr. Michael Russak
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$
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0
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0
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0
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0
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$
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0
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Shareholders/Beneficial Owners
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Number of
Common Shares
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Number of
Series A Preferred Shares
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Ownership
Percentage(1)
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|||||||||
Tom Djokovich (1) (2) (3)
President & Director
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14,068,000
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5,000
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61.8
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%
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||||||||
Thomas Anderson
Director
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4,433,333
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0
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< 1
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% | ||||||||
Oz Fundingsland
Director
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4,166,667
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0
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< 1
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% | ||||||||
Mike Russak
Director
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4,433,333
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0
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< 1
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% | ||||||||
All Officers & Directors as a Group (4 individuals)
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27,101,333
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0
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63.5
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%
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(1) |
Applicable percentage ownership is based on 889,331,125shares of common stock issued and outstanding as of December 14 2016. Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities. Shares of common stock that are currently exercisable or exercisable within 60 days of December 14, 2016 are deemed to be beneficially owned by the person holding such securities for the purpose of computing the percentage of ownership of such person, but are not treated as outstanding for the purpose of computing the percentage ownership of any other person.
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(2) |
Includes 14,068,000 shares owned by the Djokovich Limited Partnership at September 30, 2016. Mr. Djokovich shares voting and dispositive power with respect to these shares with Mrs. Djokovich.
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(3) |
The Series A Preferred Shares have the voting equivalent of not less than 60% of the issued and outstanding common stock (representing a super majority voting power) of the vote required to approve any action, in which the shareholders of the Company’s common stock may vote. As of September 30, 2016, Mr. Djokovich held 14,068,000 shares of the Company’s common stock and 5,000 shares of the Company’s Series A Preferred stock representing the combined voting equivalent of 469,848,287 shares of common stock or approximately 61.8% of the Company’s voting stock.
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Exhibit
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Description
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3.1
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Articles of Incorporation(1)
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3.2
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Bylaws(2)
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10.1
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XsunX Plan of Reorganization and Asset Purchase Agreement, dated September 23, 2003.(3)
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10.2
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2014 XSUNX, Inc. Stock Option and Award Plan, dated May 20, 2014.(4)
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10.3
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Amendment to Articles of Incorporation for the increase to authorized shares.(5)
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10.4
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Certificate of Designation for Preferred Shares.(6)
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10.5
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Form of Third Extension Agreement to 12% Note used in connection with the exchange and 18 month extension to a promissory note that had become due September 30, 2015. (7)
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10.6
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Form of Convertible 10% Promissory Note issued on November 20, 2014, used in connection with the sale of a convertible promissory note in an amount up to $400,000. (8)
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10.7
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10.8
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Form of Convertible Promissory Notes issued to four members of the Board of Directors dated October 1, 2013. (9)
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10.9
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Form of 10% Promissory Note issued on August 5, 2014, used in connection with establishing access to interim financing requirements for solar system installations. (10)
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31.1
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32.1
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101.INS
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XBRL Instance Document (11)
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101.SCH
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XBRL Taxonomy Extension Schema Document (11)
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101.CAL
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XBRL Taxonomy Extension Calculation Linkbase Document (11)
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101.DEF
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XBRL Taxonomy Extension Label Linkbase Document (11)
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101.LAB
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XBRL Taxonomy Extension Presentation Linkbase Document (11)
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101.PRE
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XBRL Taxonomy Extension Definition Linkbase Document (11)
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(1)
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Incorporated by reference to Registration Statement Form 10SB12G #000-29621 dated February 18, 2000 and by reference to exhibits included with the Company’s prior Report on Form 8-K/A filed with the Securities and Exchange Commission dated October 29, 2003.
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(2)
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Incorporated by reference to Registration Statement Form 10SB12G #000-29621 filed with the Securities and Exchange Commission dated February 18, 2000.
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(3)
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Incorporated by reference to exhibits included with the Company’s Report on Form 8-K/A filed with the Securities and Exchange Commission dated October 29, 2003.
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(4)
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Incorporated by reference to exhibits included with the Company’s Report on Form 8-K filed with the Securities and Exchange Commission dated May 21, 2014.
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(5)
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Incorporated by reference to exhibits included with the Company’s Report on Form 8-K filed with the Securities and Exchange Commission dated August 19, 2013.
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(6)
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Incorporated by reference to exhibits included with the Company’s Report on Form 8-K filed with the Securities and Exchange Commission dated July 2, 2013.
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(7)
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Incorporated by reference to exhibits included with the Company’s Report on Form 10-K filed with the Securities and Exchange Commission dated January 8, 2016.
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(8)
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Incorporated by reference to exhibits included with the Company’s Report on Form 8-K filed with the Securities and Exchange Commission dated November 26, 2014.
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(9)
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Incorporated by reference to exhibits included with the Company’s Report on Form 8-K filed with the Securities and Exchange Commission dated November 12, 2013.
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(10)
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Incorporated by reference to exhibits included with the Company’s Report on Form 10-Q filed with the Securities and Exchange Commission dated August 18, 2014.
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(11)
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Provided Herewith
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Date: December 14, 2016
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XSUNX, INC.
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By:
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/s/ Tom Djokovich
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Name:
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Tom Djokovich
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Title:
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CEO and Principal Accounting Officer
|
/s/ Tom Djokovich
|
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December 14, 2016
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Tom Djokovich, Chief Executive Officer,
Principal Executive Officer, Principal
Financial and Accounting Officer, and Director
|
|
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/s/ Thomas Anderson
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December 14, 2016
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Thomas Anderson, Director
|
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Oz Fundingsland
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|
December 14, 2016
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Oz Fundingsland, Director
|
|
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|
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/s/ Michael Russak
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December 14, 2016
|
Michael Russak, Director
|
|
|
September 30, 2016
|
September 30, 2015
|
|||||||
ASSETS
|
||||||||
CURRENT ASSETS
|
||||||||
Cash
|
$
|
22,172
|
$
|
78,770
|
||||
Contract receivables
|
30,800
|
-
|
||||||
Cost in excess of billing
|
10,126
|
6,661
|
||||||
Prepaid expenses
|
2,266
|
4,171
|
||||||
Total Current Assets
|
65,364
|
89,602
|
||||||
PROPERTY & EQUIPMENT
|
||||||||
Office & miscellaneous equipment
|
29,842
|
35,853
|
||||||
Machinery & equipment
|
626
|
64,538
|
||||||
30,468
|
100,391
|
|||||||
Less accumulated depreciation
|
(29,930
|
)
|
(95,126
|
)
|
||||
Net Property & Equipment
|
538
|
5,265
|
||||||
TOTAL ASSETS
|
$
|
65,902
|
$
|
94,867
|
||||
LIABILITIES AND SHAREHOLDERS’ DEFICIT
|
||||||||
CURRENT LIABILITIES
|
||||||||
Accounts payable
|
$
|
46,515
|
$
|
41,919
|
||||
Credit card payable
|
65,114
|
41,707
|
||||||
Accrued expenses
|
-
|
3,787
|
||||||
Accrued interest on notes payable
|
28,849
|
22,086
|
||||||
Billing in excess of cost
|
41,454
|
-
|
||||||
Deferred revenue
|
-
|
15,000
|
||||||
Derivative liability
|
430,532
|
622,201
|
||||||
Promissory note, related party
|
35,000
|
-
|
||||||
Convertible promissory note, related party
|
12,000
|
12,000
|
||||||
Convertible promissory notes, current portion net of $11,148 and $64,582 in discounts
|
131,886
|
215,418
|
||||||
Total Current Liabilities
|
791,350
|
974,118
|
||||||
LONG TERM LIABILITIES
|
||||||||
Convertible promissory notes
|
115,000
|
-
|
||||||
Total Long Term Liabilities
|
115,000
|
-
|
||||||
TOTAL LIABILITIES
|
906,350
|
974,118
|
||||||
SHAREHOLDERS’ DEFICIT
|
||||||||
Preferred stock 50,000,000 shares authorized, shares issued and outstanding designated as follows:
|
||||||||
Preferred Stock Series A, $0.01 par value, 10,000 authorized
5,000 and 5,000 shares issued and outstanding, respectively
|
50
|
50
|
||||||
Common stock, no par value;
2,000,000,000 authorized common shares
783,080,479 and 704,918,657 shares issued and outstanding, respectively
|
32,640,840
|
32,359,171
|
||||||
Additional paid in capital
|
5,335,398
|
5,335,398
|
||||||
Paid in capital, common stock warrants
|
3,811,700
|
3,811,700
|
||||||
Accumulated deficit
|
(42,628,436
|
)
|
(42,385,570
|
)
|
||||
TOTAL SHAREHOLDERS’ DEFICIT
|
(840,448
|
)
|
(879,251
|
)
|
||||
TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIT
|
$
|
65,902
|
$
|
94,867
|
Years Ended
|
||||||||
September 30, 2016
|
September 30, 2015
|
|||||||
SALES
|
$
|
750,556
|
$
|
1,215,632
|
||||
COST OF GOODS SOLD
|
474,030
|
912,404
|
||||||
GROSS PROFIT
|
276,526
|
303,228
|
||||||
OPERATING EXPENSES
|
||||||||
Selling, general and administrative expenses
|
482,779
|
520,800
|
||||||
Depreciation and amortization expense
|
1,604
|
4,650
|
||||||
TOTAL OPERATING EXPENSES
|
484,383
|
525,450
|
||||||
LOSS FROM OPERATIONS BEFORE OTHER INCOME/(EXPENSES)
|
(207,857
|
)
|
(222,222
|
)
|
||||
OTHER INCOME/(EXPENSES)
|
||||||||
Penalties
|
(222
|
)
|
(472
|
)
|
||||
Loss on commitment fees
|
-
|
(22,081
|
)
|
|||||
Gain on forgiveness of debt
|
16,604
|
58,273
|
||||||
Gain on sale of asset
|
12,249
|
-
|
||||||
Gain/(Loss) on conversion of debt and change in derivative liability
|
40,123
|
(918,041
|
)
|
|||||
Interest expense
|
(103,763
|
)
|
(216,105
|
)
|
||||
TOTAL OTHER INCOME/(EXPENSES)
|
(35,009
|
)
|
(1,098,426
|
)
|
||||
NET LOSS
|
$
|
(242,866
|
)
|
$
|
(1,320,648
|
)
|
||
BASIC AND DILUTED EARNING (LOSS) PER SHARE
|
$
|
(0.00
|
)
|
$
|
(0.00
|
)
|
||
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING
BASIC AND DILUTED
|
733,536,795
|
649,711,950
|
Preferred Stock
|
Common Stock
|
Additional
Paid-in |
Stock Options/
Warrants
|
Accumulated
|
||||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Paid-in-Capital
|
Deficit
|
Total
|
|||||||||||||||||||||||||
Balance at September 30, 2014
|
5,000
|
$
|
50
|
591,400,069
|
$
|
31,014,990
|
$
|
5,335,398
|
$
|
3,811,700
|
$
|
(41,064,922
|
)
|
$
|
(902,784
|
)
|
||||||||||||||||
Issuance of common stock for conversion of notes and interest
|
-
|
-
|
113,518,588
|
1,344,181
|
-
|
-
|
-
|
1,344,181
|
||||||||||||||||||||||||
Net loss for the year ended September 30, 2015
|
-
|
-
|
-
|
-
|
-
|
-
|
(1,320,648
|
)
|
(1,320,648
|
)
|
||||||||||||||||||||||
Balance at September 30, 2015
|
5,000
|
50
|
704,918,657
|
32,359,171
|
5,335,398
|
3,811,700
|
(42,385,570
|
)
|
(879,251
|
)
|
||||||||||||||||||||||
Common stock issued upon conversion of debt and accrued interest
|
-
|
-
|
78,161,822
|
281,669
|
-
|
-
|
-
|
281,669
|
||||||||||||||||||||||||
Net loss for the year ended September 30, 2016
|
-
|
-
|
-
|
-
|
-
|
-
|
(242,866
|
)
|
(242,866
|
)
|
||||||||||||||||||||||
Balance at September 30, 2016
|
5,000
|
$
|
50
|
783,080,479
|
$
|
32,640,840
|
$
|
5,335,398
|
$
|
3,811,700
|
$
|
(42,628,436
|
)
|
$
|
(840,448
|
)
|
Years Ended
|
||||||||
September 30, 2016
|
September 30, 2015
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net loss
|
$
|
(242,866
|
)
|
$
|
(1,320,648
|
)
|
||
Adjustment to reconcile net loss to net cash used in operating activities
|
||||||||
Depreciation & amortization
|
1,604
|
4,650
|
||||||
Commitment fees
|
-
|
22,080
|
||||||
Gain on sale of asset
|
(12,249
|
)
|
-
|
|||||
Gain on forgiveness of debt
|
(16,604
|
)
|
(58,273
|
)
|
||||
(Gain) Loss on conversion of debt and change in derivative liability
|
(40,123
|
)
|
918,041
|
|||||
Amortization of debt discount recorded as interest expense
|
68,852
|
178,925
|
||||||
-
|
||||||||
Change in Assets and Liabilities:
|
||||||||
(Increase) Decrease in Change in Assets
|
||||||||
Contract receivables
|
(30,800
|
)
|
-
|
|||||
Cost in excess of billing
|
(3,465
|
)
|
(6,661
|
)
|
||||
Prepaid expenses
|
1,905
|
4,527
|
||||||
Increase (Decrease) in:
|
||||||||
Accounts payable
|
44,606
|
7,277
|
||||||
Accrued expenses
|
30,714
|
38,014
|
||||||
Billing in excess of cost
|
41,454
|
-
|
||||||
Deferred revenue
|
(15,000
|
)
|
5,000
|
|||||
NET CASH USED BY OPERATING ACTIVITIES
|
(171,972
|
)
|
(207,068
|
)
|
||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Purchase of fixed asset
|
(626
|
)
|
-
|
|||||
Proceeds from sale of assets
|
16,000
|
-
|
||||||
NET CASH PROVIDED BY INVESTING ACTIVITIES
|
15,374
|
-
|
||||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Proceeds from convertible promissory notes
|
165,000
|
235,000
|
||||||
Payments on convertible promissory notes
|
(100,000
|
)
|
-
|
|||||
Proceeds from related party promissory notes
|
35,000
|
61,000
|
||||||
Payment of related party promissory notes
|
-
|
(61,000
|
)
|
|||||
NET CASH PROVIDED BY FINANCING ACTIVITIES
|
100,000
|
235,000
|
||||||
NET DECREASE/INCREASE IN CASH
|
(56,598
|
)
|
27,932
|
|||||
CASH, BEGINNING OF YEAR
|
78,770
|
50,838
|
||||||
CASH, END OF YEAR
|
$
|
22,172
|
$
|
78,770
|
||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
|
||||||||
Interest paid
|
$
|
410
|
$
|
2,953
|
||||
Taxes paid
|
$
|
-
|
$
|
-
|
||||
SUPPLEMENTAL DISCLOSURES OF NON CASH TRANSACTIONS
|
||||||||
Issuance of common stock upon conversion of debt
|
$
|
281,669
|
$
|
1,344,181
|
||||
Debt discount recorded for new issuances of derivative liabilities
|
$
|
15,417
|
$
|
167,105
|
||||
Accrued interest capitalized into principal
|
$
|
16,033
|
$
|
26,758
|
Leasehold improvements
|
Length of the lease
|
Computer software and equipment
|
3 Years
|
Furniture & fixtures
|
5 Years
|
Machinery & equipment
|
5 Years
|
For the years ended
|
||||||||
September 30,
|
||||||||
2016
|
2015
|
|||||||
(Loss) to common shareholders (Numerator)
|
$
|
(242,866
|
)
|
$
|
(1,320,648
|
)
|
||
Basic and diluted weighted average number of common shares outstanding (Denominator)
|
733,536,795
|
649,711,950
|
·
|
Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets;
|
·
|
Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and
|
·
|
Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
|
Total
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
|||||||||||||
Derivative Liability
|
$
|
430,532
|
$
|
-
|
$
|
-
|
$
|
430,532
|
||||||||
Total Liabilities measured at fair value
|
$
|
430,532
|
$
|
-
|
$
|
-
|
$
|
430,532
|
Total
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
|||||||||||||
Derivative Liability
|
$
|
622,201
|
$
|
-
|
$
|
-
|
$
|
622,201
|
||||||||
Total Liabilities measured at fair value
|
$
|
622,201
|
$
|
-
|
$
|
-
|
$
|
622,201
|
Balance as of September 30, 2014
|
$
|
546,280
|
||
Fair Value of derivative liabilities issued
|
201,065
|
|||
Net Gain on change in derivative liability
|
(125,144
|
)
|
||
Ending balance as of September 30, 2015
|
622,201
|
|||
Fair value of derivative liabilities issued
|
15,417
|
|||
Net Gain on change in derivative liability
|
(207,086
|
)
|
||
Ending balance as of September 30, 2016
|
$
|
430,532
|
9/30/2016
|
9/30/2015
|
|||||||||||||||
Weighted
|
Weighted
|
|||||||||||||||
Number
|
average
|
Number
|
average
|
|||||||||||||
of
|
exercise
|
of
|
exercise
|
|||||||||||||
Options
|
price
|
Options
|
price
|
|||||||||||||
Outstanding, beginning of the period
|
4,500,000
|
$
|
0.024
|
7,000,000
|
$
|
0.033
|
||||||||||
Granted
|
-
|
-
|
-
|
-
|
||||||||||||
Exercised
|
-
|
-
|
-
|
-
|
||||||||||||
Expired
|
(3,000,000
|
)
|
0.014
|
(2,500,000
|
)
|
0.050
|
||||||||||
Outstanding, end of the period
|
1,500,000
|
$
|
0.045
|
4,500,000
|
$
|
0.024
|
||||||||||
Exercisable at the end of the period
|
1,500,000
|
$
|
0.030
|
4,500,000
|
$
|
0.017
|
||||||||||
Weighted average fair value of
options granted during the period
|
$
|
-
|
$
|
-
|
Weighted
|
|||||||||||
Average
|
|||||||||||
Stock
|
Stock
|
Remaining
|
|||||||||
Exercisable
|
Options
|
Options
|
Contractual
|
||||||||
Prices
|
Outstanding
|
Exercisable
|
Life (years)
|
||||||||
$
|
0.045
|
1,500,000
|
1,500,000
|
0.28 years
|
|||||||
1,500,000
|
1,500,000
|
Weighted
|
|||||||||||
Average
|
|||||||||||
Stock
|
Stock
|
Remaining
|
|||||||||
Exercisable
|
Options
|
Options
|
Contractual
|
||||||||
Prices
|
Outstanding
|
Exercisable
|
Life (years)
|
||||||||
$
|
0.014
|
3,000,000
|
3,000,000
|
0.47 years
|
|||||||
$
|
0.045
|
1,500,000
|
1,500,000
|
1.28 years
|
|||||||
4,500,000
|
4,500,000
|
Risk free interest rate
|
Between 0.10% and 1.06%
|
|
Stock volatility factor
|
Between 61.10% and 256.58%
|
|
Months to Maturity
|
6 months to 2 years
|
|
Expected dividend yield
|
None
|
|
9/30/2016
|
9/30/2015
|
||||||
Book Income
|
$
|
(97,200
|
)
|
$
|
(528,300
|
)
|
||
Nondeductible Stock Compensation
|
-
|
-
|
||||||
Nondeductible Other Expenses
|
(50,600
|
)
|
50,200
|
|||||
Nondeductible Penalties
|
200
|
200
|
||||||
Loss on Settlement of Debt
|
66,800
|
403,700
|
||||||
Meals & Entertainment
|
700
|
500
|
||||||
Depreciation
|
400
|
1,300
|
||||||
Related Party Accrual
|
(1,100
|
)
|
1,100
|
|||||
Valuation Allowance
|
80,800
|
71,300
|
||||||
Income Tax Expense
|
$
|
-
|
$
|
-
|
|
9/30/2016
|
9/30/2015
|
||||||
Deferred Tax Assets:
|
||||||||
NOL Carryforward
|
$
|
8,540,800
|
$
|
8,455,200
|
||||
Capital loss Carry-forward
|
-
|
2,913,800
|
||||||
R&D Carryforward
|
46,150
|
46,150
|
||||||
Related Party Accruals
|
2,118
|
1,090
|
||||||
Depreciation
|
140
|
-
|
||||||
Deferred Tax Liabilities:
|
||||||||
Depreciation
|
-
|
(580
|
)
|
|||||
|
||||||||
Valuation Allowance
|
(8,589,208
|
)
|
(11,415,660
|
)
|
||||
Net Deferred Tax Asset
|
$
|
-
|
$
|
-
|
A.
|
The Borrower and the Lender have entered into that certain convertible promissory note in the original Principal Sum of up to $400,000 issued by the Borrower to the Lender with an Effective Date of November 20, 2014 (the “Note”).
|
B.
|
The Borrower and the Lender desire to revise the Note as provided in this Addendum.
|
C.
|
The terms used in this Addendum will have the meanings ascribed to them in the Note unless otherwise defined herein.
|
1.
|
Addendum.
|
2.
|
Effect of Addendum.
|
3.
|
Counterparts.
|
BORROWER: XSUNX, INC. | LENDER: _______________________ | |
By:
|
By:
|
|
Tom Djokovich, Chief Executive Officer
|
/s/ Tom Djokovich
|
|
Name: Tom Djokovich
|
|
Titles: President, Chief Executive Officer, Principal Financial and
Accounting Officer, and Director
|
/s/ Tom Djokovich
|
|
Name: Tom Djokovich
|
|
Title: President, Chief Executive Officer, and Principal Financial and
Accounting Officer, and Director
|
Document And Entity Information - USD ($) |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2016 |
Dec. 14, 2016 |
Mar. 31, 2016 |
|
Document and Entity Information [Abstract] | |||
Entity Registrant Name | XSUNX INC | ||
Document Type | 10-K | ||
Current Fiscal Year End Date | --09-30 | ||
Entity Common Stock, Shares Outstanding | 889,331,125 | ||
Entity Public Float | $ 3,124,899 | ||
Amendment Flag | false | ||
Entity Central Index Key | 0001039466 | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Well-known Seasoned Issuer | No | ||
Document Period End Date | Sep. 30, 2016 | ||
Document Fiscal Year Focus | 2016 | ||
Document Fiscal Period Focus | FY |
BALANCE SHEETS (Parentheticals) - USD ($) |
Sep. 30, 2016 |
Sep. 30, 2015 |
---|---|---|
Convertible promissory notes, discounts (in Dollars) | $ 11,148 | $ 64,582 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred stock shares, authorized (in Dollars per share) | $ 0.01 | |
Common stock, shares authorized | 2,000,000,000 | 2,000,000,000 |
Common stock, shares issued | 783,080,479 | 704,918,657 |
Common stock, shares outstanding | 783,080,479 | 704,918,657 |
Common stock, no par value (in Dollars per share) | $ 0 | $ 0 |
Series A Preferred Stock [Member] | ||
Preferred stock, shares authorized | 10,000 | 10,000 |
Preferred stock shares, authorized (in Dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares issued | 5,000 | 5,000 |
Preferred stock shares, authorized | 5,000 | 5,000 |
STATEMENTS OF OPERATIONS - USD ($) |
12 Months Ended | |
---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
|
SALES | $ 750,556 | $ 1,215,632 |
COST OF GOODS SOLD | 474,030 | 912,404 |
GROSS PROFIT | 276,526 | 303,228 |
OPERATING EXPENSES | ||
Selling, general and administrative expenses | 482,779 | 520,800 |
Depreciation and amortization expense | 1,604 | 4,650 |
TOTAL OPERATING EXPENSES | 484,383 | 525,450 |
LOSS FROM OPERATIONS BEFORE OTHER INCOME/(EXPENSES) | (207,857) | (222,222) |
OTHER INCOME/(EXPENSES) | ||
Penalties | (222) | (472) |
Loss on commitment fees | 0 | (22,081) |
Gain on forgiveness of debt | 16,604 | 58,273 |
Gain on sale of asset | 12,249 | 0 |
Gain/(Loss) on conversion of debt and change in derivative liability | 40,123 | (918,041) |
Interest expense | (103,763) | (216,105) |
TOTAL OTHER INCOME/(EXPENSES) | (35,009) | (1,098,426) |
NET LOSS | $ (242,866) | $ (1,320,648) |
BASIC AND DILUTED EARNING (LOSS) PER SHARE (in Dollars per share) | $ 0.00 | $ 0.00 |
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING BASIC AND DILUTED (in Shares) | 733,536,795 | 649,711,950 |
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) |
Preferred Stock [Member] |
Common Stock [Member] |
Additional Paid-in Capital [Member] |
Additional Paid in Capital Stock Options / Warrants [Member] |
Retained Earnings [Member] |
Total |
---|---|---|---|---|---|---|
Balance at Sep. 30, 2014 | $ 50 | $ 31,014,990 | $ 5,335,398 | $ 3,811,700 | $ (41,064,922) | $ (902,784) |
Balance (in Shares) at Sep. 30, 2014 | 5,000 | 591,400,069 | ||||
Common stock issued upon conversion of debt and accrued interest | $ 1,344,181 | 1,344,181 | ||||
Common stock issued upon conversion of debt and accrued interest (in Shares) | 113,518,588 | |||||
Net loss for the year | (1,320,648) | (1,320,648) | ||||
Balance at Sep. 30, 2015 | $ 50 | $ 32,359,171 | 5,335,398 | 3,811,700 | (42,385,570) | (879,251) |
Balance (in Shares) at Sep. 30, 2015 | 5,000 | 704,918,657 | ||||
Common stock issued upon conversion of debt and accrued interest | $ 281,669 | 281,669 | ||||
Common stock issued upon conversion of debt and accrued interest (in Shares) | 78,161,822 | |||||
Net loss for the year | (242,866) | (242,866) | ||||
Balance at Sep. 30, 2016 | $ 50 | $ 32,640,840 | $ 5,335,398 | $ 3,811,700 | $ (42,628,436) | $ (840,448) |
Balance (in Shares) at Sep. 30, 2016 | 5,000 | 783,080,479 |
1. ORGANIZATION AND LINE OF BUISNESS |
12 Months Ended |
---|---|
Sep. 30, 2016 | |
Disclosure Text Block [Abstract] | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | 1. ORGANIZATION AND LINE OF BUSINESS Organization XsunX, Inc. (“XsunX,” the “Company” or the “issuer”) is a Colorado corporation formerly known as Sun River Mining Inc. “Sun River”).The Company was originally incorporated in Colorado on February 25, 1997. Effective September 24, 2003, the Company completed a Plan of Reorganization and Asset Purchase Agreement (the “Plan”). Line of Business The Company’s focus is on marketing, sales, and delivery of commercial solar power systems as a licensed contractor in California. We see these efforts as a significant business development opportunity as management has the skillset associated with construction management, we have extensive experience associated with solar PV technologies, the design requirements associated with the delivery of a solar power systems, and there is a market demand available for us to provide these services to. Going Concern The accompanying financial statements have been prepared on a going concern basis of accounting, which contemplates continuity of operations, realization of assets and liabilities and commitments in the normal course of business. The accompanying financial statements do not reflect any adjustments that might result if the Company is unable to continue as a going concern. The Company does not generate significant revenue, and has negative cash flows from operations, which raise substantial doubt about the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern and appropriateness of using the going concern basis is dependent upon, among other things, additional cash infusion. The Company has obtained funds from its shareholders since its inception through the year ended September 30, 2016. Management believes the existing shareholders and the prospective new investors will provide the additional cash needed to meet the Company’s obligations as they become due, and will allow the development of its business development efforts in the solar PV industry. |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
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Significant Accounting Policies [Text Block] | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES This summary of significant accounting policies of XsunX, Inc. is presented to assist in understanding the Company’s financial statements. The financial statements and notes are representations of the Company’s management, which is 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 financial statements. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the accompanying financial statements. Significant estimates made in preparing these financial statements include the estimate of useful lives of property and equipment, the deferred tax valuation allowance, and the fair value of stock options. Actual results could differ from those estimates. Cash and Cash Equivalents For purposes of the statements of cash flows, cash and cash equivalents include cash in banks and money markets with an original maturity of three months or less. Property and Equipment Property and equipment are stated at cost, and are depreciated using straight line over its estimated useful lives:
The Company capitalizes property and equipment over $500. Property and equipment under $500 are expensed in the year purchased. The depreciation expense for the years ended September 30, 2016, and 2015, were $1,604 and $4,650, respectively. Revenue Recognition Revenue 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. The Company made a change in estimating recognized revenue during the current year, whereby, the Company no longer requires contracts have 10% completion before revenue is recognized. Revenue is recognized based on the percentage of cost incurred. Costs include all direct materials, subcontractor costs, direct labor and those indirect costs related to contract performance, such as indirect labor, supplies, project planning and preparation, tools and repairs. 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, estimated profitability, 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 billing” represents revenues recognized in excess of amounts billed on contracts in progress. The Liability, “Billing in excess of costs”, represents billings in excess of revenues recognized on contracts in progress. At September 30, 2016, the cost in excess of billing was $10,126 and the billing in excess of costs was $41,454. Revisions in cost and profit estimates during the course of the contract are reflected in the accounting period in which the facts for the revisions 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, which are recognized in the period the revisions are determined. Contract Receivables Contract receivables are recorded on contracts for amounts currently due based upon progress billings, as well as any retentions, 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. The net contract receivable balance was $30,800 and $0 at September 30, 2016 and 2015, respectively. Project Warranties Customers in our target market of California who purchase solar energy systems are covered by a warranty of up to 10 years in duration for material defects and workmanship. In addition, we provide a pass-through of the major components such as module mounting, inverter and solar panel manufacturers’ warranties to our customers, which generally range from 10 to 25 years. The Company has a limited history of project installations and will access potential warranty costs, and other allowances, based on our experience in servicing warranty claims as they may arise in the future. During the years ended September 30, 2016 and 2015, the Company did not experience costs related to warranty claims. Stock-Based Compensation Share-based Payment applies to transactions in which an entity exchanges its equity instruments for goods or services and also applies to liabilities an entity may incur for goods or services that are to follow a fair value of those equity instruments. We are required to follow a fair value approach using an option-pricing model, such as the Black Scholes option valuation model, at the date of a stock option grant. The deferred compensation calculated under the fair value method would then be amortized over the respective vesting period of the stock option. This has not had a material impact on our results of operations. Basic and Diluted Net Income (Loss) per Share Calculations Income (Loss) per Share dictates the calculation of basic earnings per share and diluted earnings per share. Basic earnings per share are computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding. Diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. The shares for employee options, and convertible notes were not used in the calculation of the (Loss) per share as their effect would be antidilutive.
Fair Value of Financial Instruments Fair Value of Financial Instruments, requires disclosure of the fair value information, whether or not recognized in the balance sheet, where it is practicable to estimate that value. As of September 30, 2016, the balances reported for cash, prepaid expenses, accounts payable, accrued expenses approximate the fair value because of their short maturities. We adopted ASC Topic 820 for financial instruments measured as fair value on a recurring basis. ASC Topic 820 defines fair value, established a framework for measuring fair value in accordance with accounting principles generally accepted in the United States and expands disclosures about fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 established a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include:
We measure certain financial instruments at fair value on a recurring basis. Assets and liabilities measured at fair value on a recurring basis are as follows at September 30, 2016:
We measure certain financial instruments at fair value on a recurring basis. Assets and liabilities measured at fair value on a recurring basis are as follows at September 30, 2015:
The following is a reconciliation of the derivative liability for which Level 3 inputs were used in determining the approximate fair value:
Advertising Advertising expenses are expensed as incurred. Total advertising expenses were $22,407 and $22,253 for the years ended September 30, 2016, and 2015, respectively. Recent Accounting Pronouncements Management does not believe that any recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying condensed financial statements. In March 2016, FASB issued accounting standards update ASU-2016-09, “Compensation –Stock Compensation (Topic 718) – Improvements to Employee Share-Based Payment Accounting”. The amendments are intended to improve the accounting for employee share-based payments and affect all organizations that issue share-based payment awards to their employees. Several aspects of the accounting for share-based payments award transactions are simplified, including: (a) income tax consequences; (b) classification of awards as either equity or liabilities; and (c) classification on the statement of cash flows. For public companies, the amendments are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted for any organization in any interim or annual period. The Company is currently evaluating the impact of the adoption of ASU 2016-9 on the Company’s financial statements. In March 2016, FASB issued accounting standards update ASU-2016-06, “Derivatives and Hedging (Topic 815) – Contingent Put and Call Options in Debt Instruments”. The amendments apply to all entities that are issuers of or investors in debt instruments (or hybrid financial instruments that are determined to have a debt host) with embedded call (put) options. U.S. GAAP provides specific guidance for assessing whether call (put) options that can accelerate the repayment of principal on a debt instrument meet the clearly and closely related criterion. The guidance states that for contingent call (put) options to be considered clearly and closely related, they can be indexed only to interest rates or credit risk. Public companies must apply the new requirements for fiscal years beginning after December 15, 2016 and interim periods within those fiscal years. The Company is currently evaluating the impact of the adoption of ASU 2016-06 on the Company’s financial statements. In May, 2016, FASB issued accounting standards update ASU-2016-12, Revenue from Contracts with Customers (Topic 606) – Narrow-Scope Improvements and Practical Expedients. The amendments do not change the core revenue recognition principle in Topic 606. The amendments provide clarifying guidance in certain narrow areas and add some practical expedients. These amendments are effective at the same time Topic 606 is effective. Topic 606 is effective for public entities for annual reporting periods beginning after December 15, 2017, including interim reporting periods therein (i.e., January 1, 2018, for a calendar year entity). The Company is currently evaluating the impact of the adoption of ASU 2016-12 on the Company’s financial statements. In August 2016, FASB issued accounting standards update ASU-2016-15, “Statement of Cash Flows” (Topic 230) – Classification of Certain Cash Receipts and Cash Payments”, to address diversity in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The amendments in this ASU are effective for public and nonpublic entities for fiscal years beginning after December 15, 2018, and interim periods with fiscal years beginning after December 15, 2019. Early adoption is permitted, including adoption in an interim period. The Company is currently evaluating the impact of the adoption of ASU 2016-15 on the Company’s financial statements. |
3. CAPITAL STOCK |
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Stockholders' Equity Note [Abstract] | |
Stockholders' Equity Note Disclosure [Text Block] | 3. CAPITAL STOCK At September 30, 2016, the Company’s authorized stock consisted of 2,000,000,000 shares of common stock, with no par value. The Company is also authorized to issue 50,000,000 shares of preferred stock with a par value of $0.01 per share of which 10,000 shares have been designated as Series A Preferred Stock. The rights, preferences and privileges of the holders of the preferred stock are determined by the Board of Directors prior to issuance of such shares. Preferred Stock As of September 30, 2016 and 2015, the Company had 5,000 shares of issued and outstanding Series A Preferred Stock issued to the Company’s Chief Executive Officer and Director, Tom M. Djokovich. The shares were issued in consideration for the contribution of services by Mr. Djokovich to the Company valued at fifty dollars, which the Board deemed full and fair consideration. As a result of such issuance, Mr. Djokovich has the ability to influence and determine stockholder votes. Common Stock During the year ended September 30, 2016, the Company issued 78,161,819 shares of common stock upon conversion of principal in the amount of $103,000, plus accrued interest of $11,705 at prices ranging from $0.0005 to $0.00205 per share. Total fair value of the shares was $281,669, which included a loss on conversion of debt of $166,965. During the year ended September 30, 2015, the Company issued 113,518,588 shares of common stock upon conversion of promissory notes in the principal amount of $319,335, plus interest of $15,621 at prices ranging from $0.0023 to $0.0059 per share. Total fair value of the shares was $1,344,181, which included a loss on conversion of debt of $1,009,225. |
4. STOCK OPTIONS |
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Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | 4. STOCK OPTIONS On May 20, 2014, the Company adopted the 2014 XSUNX, Inc. Stock Option and Award Plan (the “Plan”) to enable the Company to obtain and retain the services of the types of Employees, Consultants and Directors who will contribute to the Company’s long range success and to provide incentives which are linked directly to increases in share value which will inure to the benefit of all stockholders of the Company. The 2007 Stock Option Plan was superseded by the newly adopted 2014 XSUNX, Inc. Stock Option and Award Plan. Options granted under the Plan may be either Incentive Options or Nonqualified Options and shall be administered by the Company’s Board of Directors (“Board”). Each Option shall be exercisable to the nearest whole share, in installments otherwise, as the respective Option agreements may provide. Notwithstanding any other provision of the Plan or of any Option agreement or, each Option shall expire on the date specified in the Option agreement. A summary of the Company’s stock option activity and related information follows:
The weighted average remaining contractual life of options outstanding issued under the plan as of September 30, 2016 was as follows:
The weighted average remaining contractual life of options outstanding issued under the plan as of September 30, 2015 was as follows:
We account for stock-based payment award forfeitures as they occur. The Company did not recognized stock-based compensation expense in the statement of operations during the year ended September 30, 2016 and 2015, respectively. |
5. CONVERTIBLE PROMISSORY NOTES |
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Debt Disclosure [Abstract] | |||||||||||||
Debt Disclosure [Text Block] | 5. CONVERTIBLE PROMISSORY NOTES On September 30, 2014, the amended note dated September 30, 2013 expired. On October 1, 2014, the Company and the Holder of the note entered into an extension of the note on October 1, 2014. The remaining principal balance of $203,496, plus interest of $26,758 and a commitment fee of $22,081 was combined in the extended new note for a balance of $252,335 as of October 1, 2014. No additional cash consideration was provided or exchanged. The maturity date of the note was extended to September 30, 2015. On October 20, 2015, the Company entered into a third extension of the note with mandatory payments of $10,000 per month beginning November 1, 2015 until the note in the amount of $143,033 is paid in full. The note bears interest at 12% annum, and a conversion price of 60% of the lowest volume weighted average price (“VWAP”) occurring during the twenty trading days preceding any conversion date by Holder. The balance of the provisions remained substantially the same. During the year ended September 30, 2016, the Company paid $100,000 of the principal balance, leaving a remaining balance of $43,033. On November 20, 2014, the Company issued a 10% unsecured convertible promissory note (the “Note”) for the principal sum of up to $400,000 plus accrued interest on any advanced principal funds. The Note matures eighteen months from each advance. The Note may be converted by the lender into shares of common stock of the Company at the lesser of $.0125 per share or fifty percent (50%) of the three lowest trade prices of three separate trading days recorded in the twenty five (25) trading days prior to the conversion of any outstanding funded principal or accrued interest under the Note. The Company recorded debt discount of $201,137 related to the conversion feature of the notes, along with derivative liabilities at inception. On November 20, 2014, the lender advanced $50,000 to the Company under the Note at inception. On various dates from February 18, 2015 through September 30, 2016, the lender advanced an additional $350,000 under the Note. As of September 30, 2016, there remains an aggregate outstanding principal balance of $215,000. During the year ended September 30, 2016, the Company recognized debt amortization as interest expense in the amount of $68,852. Issuance of Convertible Promissory Notes for Services to Related Party As of September 30, 2016, the remaining unsecured Convertible Promissory Notes (the “Notes”) in the amount of $12,000 to a Board member (the “Holder”) in exchange for retention as a director during the fiscal year ending September 30, 2014. The Note can be converted into shares of common stock by the Holder for $0.0045 per share. The Note matured on October 1, 2015, and bore a one-time interest charge of $1,200 which was applied to the principal on October 1, 2014. So long as any shares issuable under a conversion are subject to transfer and sale restrictions imposed pursuant to SEC Rule 144 of the Rules promulgated under the Securities Act of 1933, the Company shall, upon written request by Holder, file Form S-8, if applicable, with the U.S. Securities and Exchange commission to register the issued. For purpose of determining the fair market value of the derivative liability for the embedded conversion, the Company used Black Scholes option valuation model. The significant assumptions used in the Black Scholes valuation of the derivative are as follows:
At September 30, 2016, the fair value of the derivative liability was $430,532. |
6. NOTE PAYABLE-RELATED PARTY |
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Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure [Text Block] | 6. NOTE PAYABLE-RELATED PARTY During the year ended September 30, 2016, the Company issued a 10% unsecured promissory note (the “Note”) to a related party in the aggregate principal amount of up to $80,000, plus accrued interest on any advanced principal funds. During the year ended September 30, 2016, the Company received advances in the aggregate of $35,000. The principal use of the proceeds from any advance under the Note are intended to assist in the purchase of materials, and services for the solar PV systems that we sell and install. The Note matures twelve (12) months from the advances. The balance as of September 30, 2016 was $35,000, plus accrued interest of $4,096. |
7. INCOME TAXES |
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Income Tax Disclosure [Abstract] | |
Income Tax Disclosure [Text Block] | 7. INCOME TAXES The Company files income tax returns in the U.S. Federal jurisdiction, and the state of California. With few exceptions, the Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years before 2013. Included in the balance at September 30, 2016, are no tax positions for which the ultimate deductibility is highly certain, but for which there is uncertainty about the timing of such deductibility. Because of the impact of deferred tax accounting, other than interest and penalties, the disallowance of the shorter deductibility period would not affect the annual effective tax rate but would accelerate the payment of cash to the taxing authority to an earlier period. The Company’s policy is to recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. During the period ended September 30, 2016, the Company did not recognize interest and penalties. |
8. DEFERRED TAX BENEFIT |
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Other Current Assets [Text Block] | 8. DEFERRED TAX BENEFIT At September 30, 2016, the Company had net operating loss carry-forwards of approximately $21,357,000 that may be offset against future taxable income from the year 2016 through 2036. No tax benefit has been reported in the September 30, 2016 financial statements since the potential tax benefit is offset by a valuation allowance of the same amount. The income tax provision differs from the amount of income tax determined by applying the U.S. federal and state income tax rate of 40% to pretax income from continuing operations for the years ended September 30, 2016 and 2015 due to the following:
Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry-forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. Net deferred tax assets consist of the following components as of September 30, 2016 and 2015:
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9. CHANGE IN PRINCIPAL ACCOUNTANT |
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Disclosure Text Block Supplement [Abstract] | |
Accounting Changes [Text Block] | 9. CHANGE IN PRINCIPAL ACCOUNTANT On January 18, 2016 (the “Resignation Date”) HJ Associates & Consultants, LLP resigned as the independent registered public accounting firm for XsunX, Inc. (the “Company”). Effective as of January 25, 2016, the board of directors of the Registrant unanimously approved the engagement of Haynie & Company, Salt Lake City, Utah, (“HC”) as its principal independent registered public accounting firm to audit the Registrant’s financial statements. The Registrant did not consult HC on any matters described in Item 304(a)(2) of Regulation S-K during the Registrant’s two (2) most recent fiscal years or any subsequent interim period prior to engaging HC. |
10. SUBSEQUENT EVENTS |
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Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | 10. SUBSEQUENT EVENTS Management has evaluated subsequent events as of the financial statement date according to the requirements of ASC TOPIC 855 and has the following events to be reported: On October 13, 2016, the Company entered into an addendum providing for the sixty month extension to the maturity date for a 10% unsecured convertible promissory note (the “Note”) first issued on November 30, 2014 for the principal sum of up to $400,000. The 10% Note will now mature May 20, 2021. The balance of provisions under the Note remained substantially the same. On October 11, 2016 the Company issued 37,041,096 shares of common stock, and on November 8, 2016 the Company issued 36,620,744 shares of common stock upon the aggregate conversion of $14,200 of principal and $2,321 in accrued interest by the holder of a 10% unsecured convertible promissory note (the “Note”) issued on November 20, 2014 for the principal sum of up to $400,000 plus accrued interest on any advanced principal funds. The securities above were offered and sold pursuant to an exemption from the registration requirements under Section 4(a) 2 of the Securities Act since, among other things, the transactions did not involve a public offering. On December 12, 2016 the Company issued 32,588,806 shares of common stock, upon the aggregate conversion of $10,100 of principal and $1,306 in accrued interest by the holder of a 10% unsecured convertible promissory note (the “Note”) issued on November 20, 2014 for the principal sum of up to $400,000 plus accrued interest on any advanced principal funds. The securities above were offered and sold pursuant to an exemption from the registration requirements under Section 4(a) 2 of the Securities Act since, among other things, the transactions did not involve a public offering. |
Accounting Policies, by Policy (Policies) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Use of Estimates, Policy [Policy Text Block] | Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the accompanying financial statements. Significant estimates made in preparing these financial statements include the estimate of useful lives of property and equipment, the deferred tax valuation allowance, and the fair value of stock options. Actual results could differ from those estimates. |
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Cash and Cash Equivalents, Policy [Policy Text Block] | Cash and Cash Equivalents For purposes of the statements of cash flows, cash and cash equivalents include cash in banks and money markets with an original maturity of three months or less. |
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Property, Plant and Equipment, Policy [Policy Text Block] | Property and Equipment Property and equipment are stated at cost, and are depreciated using straight line over its estimated useful lives:
The Company capitalizes property and equipment over $500. Property and equipment under $500 are expensed in the year purchased. The depreciation expense for the years ended September 30, 2016, and 2015, were $1,604 and $4,650, respectively. |
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Revenue Recognition, Policy [Policy Text Block] | Revenue Recognition Revenue 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. The Company made a change in estimating recognized revenue during the current year, whereby, the Company no longer requires contracts have 10% completion before revenue is recognized. Revenue is recognized based on the percentage of cost incurred. Costs include all direct materials, subcontractor costs, direct labor and those indirect costs related to contract performance, such as indirect labor, supplies, project planning and preparation, tools and repairs. 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, estimated profitability, 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 billing” represents revenues recognized in excess of amounts billed on contracts in progress. The Liability, “Billing in excess of costs”, represents billings in excess of revenues recognized on contracts in progress. At September 30, 2016, the cost in excess of billing was $10,126 and the billing in excess of costs was $41,454. Revisions in cost and profit estimates during the course of the contract are reflected in the accounting period in which the facts for the revisions 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, which are recognized in the period the revisions are determined. |
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Receivables, Policy [Policy Text Block] | Contract Receivables Contract receivables are recorded on contracts for amounts currently due based upon progress billings, as well as any retentions, 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. The net contract receivable balance was $30,800 and $0 at September 30, 2016 and 2015, respectively. |
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Guarantees, Indemnifications and Warranties Policies [Policy Text Block] | Project Warranties Customers in our target market of California who purchase solar energy systems are covered by a warranty of up to 10 years in duration for material defects and workmanship. In addition, we provide a pass-through of the major components such as module mounting, inverter and solar panel manufacturers’ warranties to our customers, which generally range from 10 to 25 years. The Company has a limited history of project installations and will access potential warranty costs, and other allowances, based on our experience in servicing warranty claims as they may arise in the future. During the years ended September 30, 2016 and 2015, the Company did not experience costs related to warranty claims. |
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Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | Stock-Based Compensation Share-based Payment applies to transactions in which an entity exchanges its equity instruments for goods or services and also applies to liabilities an entity may incur for goods or services that are to follow a fair value of those equity instruments. We are required to follow a fair value approach using an option-pricing model, such as the Black Scholes option valuation model, at the date of a stock option grant. The deferred compensation calculated under the fair value method would then be amortized over the respective vesting period of the stock option. This has not had a material impact on our results of operations. |
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Earnings Per Share, Policy [Policy Text Block] | Basic and Diluted Net Income (Loss) per Share Calculations Income (Loss) per Share dictates the calculation of basic earnings per share and diluted earnings per share. Basic earnings per share are computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding. Diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. The shares for employee options, and convertible notes were not used in the calculation of the (Loss) per share as their effect would be antidilutive.
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Fair Value of Financial Instruments, Policy [Policy Text Block] | Fair Value of Financial Instruments Fair Value of Financial Instruments, requires disclosure of the fair value information, whether or not recognized in the balance sheet, where it is practicable to estimate that value. As of September 30, 2016, the balances reported for cash, prepaid expenses, accounts payable, accrued expenses approximate the fair value because of their short maturities. We adopted ASC Topic 820 for financial instruments measured as fair value on a recurring basis. ASC Topic 820 defines fair value, established a framework for measuring fair value in accordance with accounting principles generally accepted in the United States and expands disclosures about fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 established a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include:
We measure certain financial instruments at fair value on a recurring basis. Assets and liabilities measured at fair value on a recurring basis are as follows at September 30, 2016:
We measure certain financial instruments at fair value on a recurring basis. Assets and liabilities measured at fair value on a recurring basis are as follows at September 30, 2015:
The following is a reconciliation of the derivative liability for which Level 3 inputs were used in determining the approximate fair value:
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Advertising Costs, Policy [Policy Text Block] | Advertising Advertising expenses are expensed as incurred. Total advertising expenses were $22,407 and $22,253 for the years ended September 30, 2016, and 2015, respectively. |
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New Accounting Pronouncements, Policy [Policy Text Block] | Recent Accounting Pronouncements Management does not believe that any recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying condensed financial statements. In March 2016, FASB issued accounting standards update ASU-2016-09, “Compensation –Stock Compensation (Topic 718) – Improvements to Employee Share-Based Payment Accounting”. The amendments are intended to improve the accounting for employee share-based payments and affect all organizations that issue share-based payment awards to their employees. Several aspects of the accounting for share-based payments award transactions are simplified, including: (a) income tax consequences; (b) classification of awards as either equity or liabilities; and (c) classification on the statement of cash flows. For public companies, the amendments are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted for any organization in any interim or annual period. The Company is currently evaluating the impact of the adoption of ASU 2016-9 on the Company’s financial statements. In March 2016, FASB issued accounting standards update ASU-2016-06, “Derivatives and Hedging (Topic 815) – Contingent Put and Call Options in Debt Instruments”. The amendments apply to all entities that are issuers of or investors in debt instruments (or hybrid financial instruments that are determined to have a debt host) with embedded call (put) options. U.S. GAAP provides specific guidance for assessing whether call (put) options that can accelerate the repayment of principal on a debt instrument meet the clearly and closely related criterion. The guidance states that for contingent call (put) options to be considered clearly and closely related, they can be indexed only to interest rates or credit risk. Public companies must apply the new requirements for fiscal years beginning after December 15, 2016 and interim periods within those fiscal years. The Company is currently evaluating the impact of the adoption of ASU 2016-06 on the Company’s financial statements. In May, 2016, FASB issued accounting standards update ASU-2016-12, Revenue from Contracts with Customers (Topic 606) – Narrow-Scope Improvements and Practical Expedients. The amendments do not change the core revenue recognition principle in Topic 606. The amendments provide clarifying guidance in certain narrow areas and add some practical expedients. These amendments are effective at the same time Topic 606 is effective. Topic 606 is effective for public entities for annual reporting periods beginning after December 15, 2017, including interim reporting periods therein (i.e., January 1, 2018, for a calendar year entity). The Company is currently evaluating the impact of the adoption of ASU 2016-12 on the Company’s financial statements. In August 2016, FASB issued accounting standards update ASU-2016-15, “Statement of Cash Flows” (Topic 230) – Classification of Certain Cash Receipts and Cash Payments”, to address diversity in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The amendments in this ASU are effective for public and nonpublic entities for fiscal years beginning after December 15, 2018, and interim periods with fiscal years beginning after December 15, 2019. Early adoption is permitted, including adoption in an interim period. The Company is currently evaluating the impact of the adoption of ASU 2016-15 on the Company’s financial statements. |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Table Text Block] |
Property and equipment are stated at cost, and are depreciated using straight line over its estimated useful lives:
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Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] |
Income (Loss) per Share dictates the calculation of basic earnings per share and diluted earnings per share. Basic earnings per share are computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding. Diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. The shares for employee options, and convertible notes were not used in the calculation of the (Loss) per share as their effect would be antidilutive.
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Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block] |
We measure certain financial instruments at fair value on a recurring basis. Assets and liabilities measured at fair value on a recurring basis are as follows
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Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block] |
The following is a reconciliation of the derivative liability for which Level 3 inputs were used in determining the approximate fair value:
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4. STOCK OPTIONS (Tables) |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] |
A summary of the Company’s stock option activity and related information follows:
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Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding and Exercisable [Table Text Block] |
The weighted average remaining contractual life of options outstanding issued under the plan was as follows:
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5. CONVERTIBLE PROMISSORY NOTES (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Table Text Block] |
For purpose of determining the fair market value of the derivative liability for the embedded conversion, the Company used Black Scholes option valuation model. The significant assumptions used in the Black Scholes valuation of the derivative are as follows:
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8. DEFERRED TAX BENEFIT (Tables) |
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Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] |
The income tax provision differs from the amount of income tax determined by applying the U.S. federal and state income tax rate of 40% to pretax income from continuing operations for the years ended September 30, 2016 and 2015 due to the following:
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Schedule of Deferred Tax Assets and Liabilities [Table Text Block] |
Net deferred tax assets consist of the following components as of September 30, 2016 and 2015:
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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) |
12 Months Ended | |
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Sep. 30, 2016 |
Sep. 30, 2015 |
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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | ||
Depreciation | $ 1,604 | $ 4,650 |
Costs in Excess of Billings | 10,126 | |
Billings in Excess of Cost | 41,454 | 0 |
Accounts Receivable, Net, Current | 30,800 | 0 |
Advertising Expense | $ 22,407 | $ 22,253 |
Minimum [Member] | ||
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | ||
Product Warranty, Term | 10 years | |
Maximum [Member] | ||
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | ||
Product Warranty, Term | 25 years |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - Property, Plant and Equipment |
12 Months Ended |
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Sep. 30, 2016 | |
Leasehold Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Estimated Useful Life | Length of the lease |
Computer Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Estimated Useful Life | 3 years |
Furniture and Fixtures [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Estimated Useful Life | 5 years |
Machinery and Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Estimated Useful Life | 5 years |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - Schedule of Earnings Per Share, Basic and Diluted - USD ($) |
12 Months Ended | |
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Sep. 30, 2016 |
Sep. 30, 2015 |
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Schedule of Earnings Per Share, Basic and Diluted [Abstract] | ||
(Loss) to common shareholders (Numerator) | $ (242,866) | $ (1,320,648) |
Basic and diluted weighted average number of common shares outstanding (Denominator) | 733,536,795 | 649,711,950 |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation - USD ($) |
12 Months Ended | |
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Sep. 30, 2016 |
Sep. 30, 2015 |
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Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Abstract] | ||
Balance | $ 622,201 | $ 546,280 |
Fair Value of derivative liabilities issued | 15,417 | 201,065 |
Net Gain on change in derivative liability | (207,086) | (125,144) |
Balance | $ 430,532 | $ 622,201 |
4. STOCK OPTIONS (Details) - Schedule of Share-based Compensation, Stock Options, Activity - $ / shares |
12 Months Ended | |
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Sep. 30, 2016 |
Sep. 30, 2015 |
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Schedule of Share-based Compensation, Stock Options, Activity [Abstract] | ||
Outstanding, beginning of the period (in Shares) | 4,500,000 | 7,000,000 |
Outstanding, beginning of the period | $ 0.024 | $ 0.033 |
Granted (in Shares) | 0 | 0 |
Granted | $ 0 | $ 0 |
Exercised (in Shares) | 0 | 0 |
Exercised | $ 0 | $ 0 |
Expired (in Shares) | (3,000,000) | (2,500,000) |
Expired | $ 0.014 | $ 0.050 |
Outstanding, end of the period (in Shares) | 1,500,000 | 4,500,000 |
Outstanding, end of the period | $ 0.045 | $ 0.024 |
Exercisable at the end of the period (in Shares) | 1,500,000 | 4,500,000 |
Exercisable at the end of the period | $ 0.030 | $ 0.017 |
Weighted average fair value of options granted during the period | $ 0 | $ 0 |
5. CONVERTIBLE PROMISSORY NOTES (Details) - Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques |
12 Months Ended |
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Sep. 30, 2016 | |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |
Expected dividend yield | 0.00% |
Minimum [Member] | |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |
Risk free interest rate | 0.10% |
Stock volatility factor | 61.10% |
Months to Maturity | 6 months |
Maximum [Member] | |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |
Risk free interest rate | 1.06% |
Stock volatility factor | 256.58% |
Months to Maturity | 2 years |
6. NOTE PAYABLE-RELATED PARTY (Details) - USD ($) |
12 Months Ended | |
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Sep. 30, 2016 |
Sep. 30, 2015 |
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6. NOTE PAYABLE-RELATED PARTY (Details) [Line Items] | ||
Proceeds from Related Party Debt | $ 35,000 | $ 61,000 |
Notes Payable, Related Parties, Current | 35,000 | 0 |
Interest Payable, Current | $ 28,849 | $ 22,086 |
Loans Payable [Member] | ||
6. NOTE PAYABLE-RELATED PARTY (Details) [Line Items] | ||
Debt Instrument, Interest Rate, Stated Percentage | 10.00% | |
Debt Instrument, Face Amount | $ 80,000 | |
Proceeds from Related Party Debt | $ 35,000 | |
Debt Instrument, Maturity Date, Description | twelve (12) months from the advances | |
Notes Payable, Related Parties, Current | $ 35,000 | |
Interest Payable, Current | $ 4,096 |
8. DEFERRED TAX BENEFIT (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
|
8. DEFERRED TAX BENEFIT (Details) [Line Items] | ||
Operating Loss Carryforwards | $ 21,357,000 | |
Effective Income Tax Rate Reconciliation, Percent | 40.00% | 40.00% |
Minimum [Member] | ||
8. DEFERRED TAX BENEFIT (Details) [Line Items] | ||
Operating Loss Carryforwards, Expiration Year | 2016 | |
Maximum [Member] | ||
8. DEFERRED TAX BENEFIT (Details) [Line Items] | ||
Operating Loss Carryforwards, Expiration Year | 2036 |
8. DEFERRED TAX BENEFIT (Details) - Schedule of Effective Income Tax Rate Reconciliation - USD ($) |
12 Months Ended | |
---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Schedule of Effective Income Tax Rate Reconciliation [Abstract] | ||
Book Income | $ (97,200) | $ (528,300) |
Nondeductible Stock Compensation | 0 | 0 |
Nondeductible Other Expenses | (50,600) | 50,200 |
Nondeductible Penalties | 200 | 200 |
Loss on Settlement of Debt | 66,800 | 403,700 |
Meals & Entertainment | 700 | 500 |
Depreciation | 400 | 1,300 |
Related Party Accrual | (1,100) | 1,100 |
Valuation Allowance | 80,800 | 71,300 |
Income Tax Expense | $ 0 | $ 0 |
8. DEFERRED TAX BENEFIT (Details) - Schedule of Deferred Tax Assets and Liabilities - USD ($) |
Sep. 30, 2016 |
Sep. 30, 2015 |
---|---|---|
Deferred Tax Assets: | ||
NOL Carryforward | $ 8,540,800 | $ 8,455,200 |
Capital loss Carry-forward | 0 | 2,913,800 |
R&D Carryforward | 46,150 | 46,150 |
Related Party Accruals | 2,118 | 1,090 |
Depreciation | 140 | 0 |
Deferred Tax Liabilities: | ||
Depreciation | 0 | (580) |
Valuation Allowance | (8,589,208) | (11,415,660) |
Net Deferred Tax Asset | $ 0 | $ 0 |
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