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SUBSEQUENT EVENTS
9 Months Ended
Jun. 30, 2019
SUBSEQUENT EVENTS  
NOTE 11 - SUBSEQUENT EVENTS

On or about July 2, 2019 (signed June 25, 2019), the Company issued a convertible promissory note to Labrys Fund, LP (“Labrys”) for the principal sum of $112,500, together with interest at the rate of 12% per annum, with a maturity date of December 25, 2020. Labrys has the right at any time after the date of the Note to convert all or any part of the outstanding and unpaid principal amount of the Note into fully paid and non-assessable shares of Common Stock at a Variable Conversion Price which is equal 60% multiplied by the Market Price (representing a discount rate of 40%), in which Market Price is the average of the two lowest trading prices for the Company’s Common Stock during the preceding 20 trading day period prior to the Conversion Date. The Company paid $12,500 fees which is recorded as a debt discount and being amortized over the life of the loan.

 

The conversion feature of the note represents an embedded derivative. A derivative liability with an intrinsic value of $0.0696 was $182,517 using a binomial pricing model and was calculated as a discount to the note. That amount is recorded as a new contra-note payable amount (similar to the recorded transaction costs), but only for an amount not in excess of and thus capped by the otherwise undiscounted amount of the note payable. Because of the derivative nature of the $182,517 valuation of the conversion feature, $82,517 is recorded was an expense in the current period and reported as a loss on issuance of convertible debt.

 

During the period ended June 30, 2019, $184, of regular interest, $114 of original issue discount, and $911 of derivative liability was expensed. There was no corresponding expense during the period ended June 30, 2018.

 

On or about July 12, 2019, the Company issued a convertible promissory note to Auctus Fund, LLC (“Auctus”) for the principal sum of $75,000, together with interest at the rate of 12% per annum, with a maturity date of April 12, 2020. Auctus has the right at any time after the date of the Note to convert all or any part of the outstanding and unpaid principal amount of the Note into fully paid and non-assessable shares of Common Stock at a Variable Conversion Price which is equal 50% multiplied by the Market Price (representing a discount rate of 40%), in which Market Price is the average of the two lowest trading prices for the Company’s Common Stock during the preceding 25 trading day period prior to the Conversion Date. The Company paid $10,250 fees which is recorded as a debt discount and being amortized over the life of the loan.

 

The conversion feature of the Note represents an embedded derivative. A derivative liability has an intrinsic value of which has not yet been calculated.

 

Management has evaluated subsequent events through the date these financial statements were available to be issued. Based on our evaluation no other material events have occurred that require disclosure.