XML 25 R13.htm IDEA: XBRL DOCUMENT v3.7.0.1
Changes in Stockholders' Equity
6 Months Ended
Mar. 31, 2017
Equity [Abstract]  
Changes in Stockholders' Equity

Note 8 - Changes in Stockholders’ Equity

 

Convertible Preferred Stock

 

The Company is authorized to issue 10,000,000 shares of preferred stock with a par value of $0.001 per share, of which 6,000,000 have been designated as Series A Convertible Preferred Stock (“Series A Preferred”). The Board of Directors is authorized to determine any number of series into which shares of preferred stock may be divided and to determine the rights, preferences, privileges and restrictions granted to any series of the preferred stock. As of March 31, 2017, there were 2,290,442 shares of Series A Preferred issued and outstanding. Shares of Series A Preferred are convertible into common stock at a fixed conversion rate of $0.20 per share.

 

The conversion price is adjustable in the event of stock splits and other adjustments in the Company’s capitalization, and in the event of certain negative actions undertaken by the Company. At the current conversion price, the 2,290,442 shares of Series A Preferred outstanding at March 31, 2017 are convertible into 11,452,210 shares of the common stock of the Company. No holder is permitted to convert its shares of Series A Preferred if such conversion would cause the holder to beneficially own more than 4.99% of the issued and outstanding common stock of the Company immediately after such conversion, unless waived by such holder by providing at least sixty-five days’ notice.

 

Preferred Stock Conversions

 

During the six months ended March 31, 2017, a total of 1,230,000 Series A Preferred shares were converted into 6,150,000 shares of common stock. The stock was converted in accordance with the conversion terms; therefore no gain or loss has been recognized.

 

Common Stock

 

Common stock consists of $0.001 par value, 90,000,000 shares authorized, of which 30,754,616 shares were issued and outstanding as of March 31, 2017.

 

Common Stock Sales

 

On February 21, 2017, the Company sold 1,428,575 units, consisting of 1,428,575 shares of its common stock and 714,285 warrants, exercisable at $0.26 per share over a thirty six month period, in exchange for total proceeds of $250,000. The proceeds received were allocated between the common stock and warrants on a relative fair value basis. The warrants were assigned to two individuals by the purchaser at the time of the sale.

 

Common Stock Issued for Services

 

On March 1, 2017, the Company issued 25,000 shares of common stock to its CFO as a bonus for services rendered. The aggregate fair value of the common stock was $6,623 based on the closing price of the Company’s common stock on the date of grant, and was expensed in full.

 

On March 1, 2017, the Company issued 50,000 shares of common stock to its Chief Scientist as a bonus for services rendered. The aggregate fair value of the common stock was $13,245 based on the closing price of the Company’s common stock on the date of grant, and was expensed in full.

 

On February 23, 2017, the Company issued 100,000 shares of common stock to a consultant for services to be rendered over a six month period. The aggregate fair value of the common stock was $29,000 based on the closing price of the Company’s common stock on the date of grant, and is being expensed over the requisite service period.

 

On February 22, 2017, the Company issued 100,000 shares of common stock to Dr. Alfredo Axtmayer in connection with his appointment to our Board of Directors. The aggregate fair value of the common stock was $34,000 based on the closing price of the Company’s common stock on the date of grant, and was expensed in full.

 

On February 22, 2017, the Company issued 40,000 shares of common stock to a consultant for services rendered. The aggregate fair value of the common stock was $13,600 based on the closing price of the Company’s common stock on the date of grant, and was expensed in full.

 

On February 7, 2017, a total of 370,000 shares of common stock were issued to six consultants that were engaged to assist the Company with acquisition activities over a six month period. The aggregate fair value of the common stock was $82,251 based on the closing price of the Company’s common stock on the date of grant, and is being expensed over the six month requisite service period.

  

On January 1, 2016, an affiliate of Mr. Bianco, a director of the Company, became entitled to receive 500,000 shares of common stock for consulting services to be performed during 2016, subject to a ratable “claw back” provision the event of an early termination of the consulting agreement. The total fair value of the common stock was $70,000 based on the closing price of the Company’s common stock on the date of grant, and is being expensed over the twelve month requisite service period, resulting in $17,500 of stock based compensation during the period.

 

A total of $123,028 of stock-based compensation expense was recognized from the amortization of common stock issued for services over the requisite service period during the six months ended March 31, 2017.

 

Amortization of Stock Options

 

A total of $199,820 of stock-based compensation expense was recognized from the amortization of options over their vesting period during the six months ended March 31, 2017.