SHARE CAPITAL

6 Months Ended

Mar. 31, 2018

Equity [Abstract]

SHARE CAPITAL

NOTE 5 – SHARE CAPITAL

Authorized shares

The Company is authorized to issue 900,000,000 shares of common stock at par value of $0.0001 and 15,000,000 shares of Series A preferred stock at par value of $0.0001.

Common stock issued for Stock Purchase Agreement

As described elsewhere in this report, on May 27, 2016, the Company acquired 100% of the issued and outstanding shares of Iron BVI for 24,156,000 shares of common stock of the Company. The shares were valued at $.0023 per share. As a result of the First Closing being contingent on the Second Closing, the 24,156,000 shares for the purchase of IBIH was recorded as “contingent common stock” due to the uncertainty of the closing of the transaction.

On November 17, 2017, the Company entered into the Iron Settlement Agreement. As a result, IBIH has returned the certificate representing the 24,156,000 shares of common stock of the Company and the shares have been cancelled by the Company.

Common stock and Series A preferred stock sold for cash

The Company agreed to sell to CMH 30,900,000 shares of common stock and 200,000 shares of Series A preferred stock for $2,000,000 in two equal installments. The first close occurred on June 7, 2016. Originally, the second closing was to occur with the closing of the Company’s acquisition of IBIH. Since the acquisition of IBIH transaction was terminated, the second closing with CMH will not proceed.

The Series A preferred stock has the following key terms:

1) A stated value of $10 per share;

2) The holder is entitled to receive cumulative dividends at the annual rate of 1.5% of stated value payable semi-annually on June 30 and December 31;

3) The preferred stock must be redeemed at the stated value plus any unpaid dividends in 5 years.

During the first close, 15,450,000 shares of common stock and 100,000 shares of Series A preferred stock were issued and were recorded as equity and as a long-term liability, respectively. The $1,000,000 of proceeds received was allocated to the common stock and Series A preferred stock according to their relative fair values determined at the time of issuance, and as a result, the Company recorded a total discount of $45,793 on the Series A preferred stock, which is being amortized to interest expense to the date of redemption. For the three months ended March 31, 2018 and 2017, amortization of debt discount amounted to $24,098 and $2,290, respectively. For the six months ended March 31, 2018 and 2017, amortization of debt discount amounted to $26,388 and $4,579, respectively.

The terms of the Series A preferred stock issued represent mandatory redeemable shares, with a fixed redemption date (in 5 years) and the Company has a choice of redeeming the instrument either in cash or a variable number of shares of common stock based on a formula in the certificate of designation. The conversion price has a floor of $0.20 per share. As such, all dividends accrued and/or paid and any accretions are classified as part of interest expense. For the three months ended March 31, 2018 and 2017, dividends on redeemable preferred stock amounted to $2,229 and $3,750, respectively. For the six months ended March 31, 2018 and 2017, dividends on redeemable preferred stock amounted to $5,979 and $7,500, respectively. 

As a result of the termination of the IBIH transaction, the Company and CMH have agreed to enter into that certain Stock Redemption Agreement dated February 13, 2018 providing that 75,000 CMH Preferred Shares were redeemed and cancelled in consideration of $750,000 which occurred on February 13, 2018.

At March 31, 2018 and September 30, 2017, Series A redeemable preferred stock consisted of the following:

	March 31, 2018			September 30, 2017
Redeemable preferred stock (stated value)	$	250,000		$	1,000,000
Less: unamortized debt discount		(7,269	)		(33,657	)
Redeemable preferred stock, net	$	242,731		$	966,343