Annual report pursuant to Section 13 and 15(d)

SUBSEQUENT EVENTS

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SUBSEQUENT EVENTS
12 Months Ended
Sep. 30, 2018
SUBSEQUENT EVENTS [Abstract]  
SUBSEQUENT EVENTS
NOTE 19 – SUBSEQUENT EVENTS

On December 17, 2018, the Company consummated the offering of an 8% Convertible Promissory Note in the principal amount of $57,000 (the “8% Note”) and a 10% Convertible Promissory Note in the principal amount of $110,000 (the “10% Note” and, together with the 8% Note, the “Notes”), respectively, in private placements to accredited investors.  The 10% Note was issued for the purchase price of $100,000 and included an original issue discount of $10,000.

In connection with the sale of the 10% Note, the Company also entered into a Securities Purchase Agreement relating to the sale of the 10% Note (the “Purchase Agreement”), and a Common Stock Purchase Warrant (the “Warrant”) providing for the purchase of up to 372,754 shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”).

The 8% Convertible Promissory Note

The 8% Note will mature on December 14, 2019, and bears interest at a rate of 8% per annum.  It is convertible into Common Stock on any date after June 12, 2019, after which the 8% Note may be converted into Common Stock at a 40% discount to the Common Stock’s lowest trading price during the 20 trading days prior to the date of the conversion notice.  Such conversion is subject to certain additional terms and conditions, including a waivable limitation on the noteholder’s ability to convert the 8% Note into an amount of Common Stock that would result in the noteholder, together with its affiliates, owning more than 4.99% of the outstanding Common Stock.

The 8% Note may be prepaid in full on any day on or prior to June 12, 2019 but is subject to prepayment premiums that increase over time.  Upon maturity of the 8% Note, those prepayment premiums cease to be effective.

No mandatory redemption or sinking fund provisions are provided for in the 8% Note.  However, the 8% Note is subject to certain additional terms and conditions, including certain remedies in connection with certain customary events of default.

The 10% Convertible Promissory Note

The 10% Note will mature on December 17, 2019, and bears interest at a rate of 10% per annum.  It is convertible into Common Stock at any time, at a 35% discount to the Common Stock’s lowest trading price during the 20 full trading days prior to the conversion date.  Such conversion is subject to certain additional terms and conditions, including a waivable limitation on the noteholder’s ability to convert the 10% Note into an amount of Common Stock that would result in the noteholder, together with its affiliates, owning more than 4.99% of the outstanding Common Stock, and an non-waivable limitation on the noteholder’s ability to convert the 10% Note into an amount of Common Stock that would result in the noteholder, together with its affiliates, owning more than 9.99% of the outstanding Common Stock.

The 10% Note may be prepaid in full on any day on or prior to June 15, 2019 but is subject to prepayment premiums that increase over time.  Upon maturity of the 10% Note, those prepayment premiums cease to be effective.

No mandatory redemption or sinking fund provisions are provided for in the 10% Note.  However, the 10% Note is subject to certain additional terms and conditions, including certain remedies in connection with certain customary events of default.

In connection with the sale of the 10% Note, the Company entered into a Purchase Agreement relating to the sale of the 10% Note, which includes certain customary representations and warranties, and pursuant to which the Company agreed to comply with certain customary affirmative and negative covenants during the period the 10% Note is outstanding.

In connection with the sale of the 10% Note, the Company also issued the noteholder a Warrant, expiring on December 17, 2023 and providing for the purchase of up to 372,754 shares of Common Stock at an exercise price of $0.50 per share.  Exercise of the warrant is subject to certain additional terms and conditions, including a limitation on exercise in the event it would result in the noteholder (together with its affiliates) beneficially owning in excess of 4.99% of the issued and outstanding Common Stock.

Stock issuances

In October 2018, the Company issued 271,094 and 324,749 shares of common stock to the Company’s CMO and CEO, respectively, for deferred wages, with a value of $0.075 per share. Total accrued wages were $87,750 and $42,327, respectively, as of September 30, 2018.

In October 2018, the Company issued 333,333 shares of the Company’s common stock to an accredited investor at a price of $0.075 per share.