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12. Derivatives Liability | 9 Months Ended
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Jun. 30, 2017
Notes |
12. Derivatives Liability | 12. Derivatives Liability The derivatives liability as of June 30, 2017 and September 30, 2016, was $4,231,983 and $2,054,071, respectively. The derivatives liability as of June 30, 2017 and September 30, 2016 is related to a variable conversion price adjustment on outstanding notes payable and warrants. All of the derivatives outstanding as of September 30, 2015, were eliminated during February 2016, due to the conversion of notes payable into shares of common stock. During the nine months ended June 30, 2017, the Company estimated the fair value of some of the embedded derivatives upon issuance at the end of each reporting period using a binomial option-pricing model with the following assumptions, according to the instrument: exercise price of $8 to $15 per share; risk free interest rate of 0.85% to 1.14%; expected life of 0.53 to 1.03 years; expected dividends of 0%; volatility factor of 260.57% to 282.07%; and stock price of $8 to $15. During the nine months ended June 30, 2017, the Company estimated the fair value of the remaining embedded derivatives upon issuance and at the end of each reporting period using a Monte Carlo valuation model with the following assumptions: exercise prices ranging from $2.50 to $25.00 per share; risk free interest rates ranging from 0.44% to 1.99%; expected lives ranging from 0.09 to 4.93 years; expected dividends of 0%; volatility factors of 128% - 194%; and stock prices ranging from $2.50 to $25.00. During fiscal year 2016, the Company estimated the fair value of some of the embedded derivatives upon issuance, at the end of each reporting period and prior to their conversion and elimination using a binomial option-pricing model with the following assumptions, according to the instrument: exercise prices ranging from $14.50 to $46.75 per share; risk free interest rates ranging from 0.16% to 1.06%; expected lives ranging from 0.05 to 2.09 years; expected dividends of 0%; volatility factors ranging from 125.33% to 510.03%; and stock prices ranging from $15 to $70. During fiscal 2016, the Company estimated the fair value of the remaining embedded derivatives upon issuance and at the end of each reporting period using a Monte Carlo valuation model with the following assumptions: exercise prices ranging from $20 to $125 per share; risk free interest rates ranging from 0.18% to 1.44%; expected lives ranging from 0.04 to 6.40 years; expected dividends of 0%; volatility factors of 129% to 140%; and stock prices ranging from $20 to $475 per share. The expected lives of the instruments were equal to the average term of the conversion option or expected exercise period of the warrants. The expected volatility is based on the historical price volatility of the Company's common stock. The risk-free interest rate represents the US Treasury constant maturities rate for the expected life of the related conversion option. The dividend yield represents anticipated cash dividends to be paid over the expected life of the conversion option. The Company recognized a gain on derivatives liability for the three months ended June 30, 2017 of $64,145 and a gain on derivatives liability for the three months ended June 30, 2016 of $5,603,411. The Company recognized a gain on derivatives liability for the nine months ended June 30, 2017 of $230,163 and a gain on derivatives liability for the nine months ended June 30, 2016 of $2,796,542.

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- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -URI http://asc.fasb.org/topic&trid=2229140 + Details
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