v3.8.0.1

10. Related Party Notes Payable: Schedule of Related Party Transactions (Tables) | 9 Months Ended
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Jun. 30, 2017
Tables/Schedules |
Schedule of Related Party Transactions |
|  | June 30, |  | September 30,
|  | 2017 |  | 2016
Secured borrowings from entities controlled by an officer who purchased a $2,813,175 customer receivable for $1,710,500. The note is currently in technical default. However, as of the time of this report, the lender has informally agreed to work with the Company until such time as the note can be repaid. The Company repurchased the receivable for $1,950,000 less cash received by the entities through March 2015. The $239,500 difference between the buyback and cash received plus $253,500 of loan origination fees was amortized to interest expense through March 2015. In September 2015, the note was modified to extend the maturity date to January 2017, with interest at 18% per annum. The Company added $81,600 of extension fees and issued 6,000 shares of common stock to a lender as part of the modification. The note is convertible into common stock at $150 per share. The $540,000 fair value of the common stock was recognized as a loss on extinguishment of debt in fiscal 2015. In February 2016, the note was amended to subordinate to other notes payable also issued during February 2016, and the conversion price was reduced to $30 per share, which was below the fair value of the Company's stock on the date of the amendment. The conversion of the note is now limited to a maximum of 40,000 common shares in combination with other convertible notes payable held by the lenders. The note has a default penalty of 8,407 shares of common stock, in combination with other convertible notes held by the lenders, if not paid by maturity. The Company recorded the value of the combined beneficial conversion features of $1,400,000 to loss on termination of debt as a result of the amendment. During the three months ended March 31, 2017, the Company entered into a letter agreement related to the remainder of the note to convert the outstanding principal and interest into shares of common stock contingent upon the completion of the Offering, which has expired (see Note 17). Subsequent to June 30, 2017, the Company received a letter related to the note wherein the lenders waived any historical and future events of default through August 24, 2017 and extended the maturity date through August 24, 2017 and later sent an additional letter where the lenders waived any historical and future events of default through January 12, 2018 and extended the maturity date through January 12, 2018 (see Note 18). In November 2017, the officer assigned $2,000,000 of principal all of the notes payable held by the related-party entities to a third party who the Company owed aggregate principal of $1,200,000 as of June 30, 2017. Interest accrued on the $2,000,000 assigned principal will continue to be payable to the related-party entities (see Note 18). | $ | 1,721,100 | $ | 1,721,100
Unsecured note payable to an entity controlled by an officer with interest at 18% per annum, due January 2017, convertible into common stock at $150 per share. The note is currently in technical default. However, as of the time of this report, the lender has informally agreed to work with the Company until such time as the note can be repaid. The Company issued 6,000 shares of common stock to a lender as loan origination fees. The $540,000 fair value of the common stock was recognized as a loss on extinguishment of debt in fiscal 2015. In February 2016, the note was amended to subordinate to other notes payable also issued during February 2016, and reduced the conversion price to $30 per share, which was below the fair value of the Company's stock on the date of the amendment. The conversion of the note is now limited to a maximum of 40,000 common shares in combination with other convertible notes payable held by the lender. The note has a default penalty of 8,407 shares of common stock, in combination with other convertible notes held by the lender, if not paid by maturity. The Company recorded the value of the combined beneficial conversion features of $1,400,000 to loss on termination of debt as a result of the amendment. During the three months ended March 31, 2017, the Company entered into a letter agreement related to the remainder of the note to convert the outstanding principal and interest into shares of common stock contingent upon the completion of the Offering, which has expired (see Note 17). Subsequent to June 30, 2017, the Company received a letter related to the note wherein the lender waived any historical and future events of default through August 24, 2017 and extended the maturity date through August 24, 2017 and later sent an additional letter where the lenders waived any historical and future events of default through January 12, 2018 and extended the maturity date through January 12, 2018 (see Note 18). In November 2017, the officer assigned $2,000,000 of principal all of the notes payable held by the related-party entities to a third party who the Company owed aggregate principal of $1,200,000 as of June 30, 2017. Interest accrued on the $2,000,000 assigned principal will continue to be payable to the related-party entities (see Note 18). |  | 1,303,135 |  | 1,303,135
Unsecured note payable to an entity controlled by a former Executive Chairman of the Board of Directors with interest at 18% per annum, due January 2017. The note is currently in technical default. However, as of the time of this report, the lender has informally agreed to work with the Company until such time as the note can be repaid. In February 2016, notes payable to the same entity, with outstanding balances of $511,005 plus accrued interest of $30,999 combined into this note. The note is subordinated to notes payable to unrelated parties and is convertible into shares of common stock at $30 per share, which was below the fair value of the Company's stock on the date of the agreement. The conversion of the note is limited to a maximum of 18,500 common shares. The Company recorded the value of the beneficial conversion feature of $632,339 to loss on termination of debt. The note has a default penalty of 1,469 shares of common stock if not paid by maturity. The note may only be converted if the holder owns less than 4.99% of the Company's common stock after conversion. During the three months ended March 31, 2017, the Company entered into a letter agreement related to the remainder of the note to convert the outstanding principal and interest into shares of common stock contingent upon the completion of the Offering, which has expired (see Note 17). Subsequent to June 30, 2017, the Company received a letter related to the note wherein the lender waived any historical and future events of default through August 24, 2017 and extended the maturity date through August 24, 2017 and later sent an additional letter where the lenders waived any historical and future events of default through January 12, 2018 and extended the maturity date through January 12, 2018 (see Note 18). |  | 542,004 |  | 542,004
Unsecured note payable to an entity controlled by an officer with interest at 12% per annum, due September 2016, subordinated to other third party notes payable. The note is currently in technical default. However, as of the time of this report, the lender has informally agreed to work with the Company until such time as the note can be repaid. In connection with the issuance of the note, the Company issued 2,000 shares of common stock. The $70,000 fair value of the stock is being amortized to interest expense over the term of the note. During the three months ended March 31, 2017, the Company entered into a letter agreement related to the remainder of the note to convert the outstanding principal and interest into shares of common stock contingent upon the completion of the Offering, which has expired (see Note 17). Subsequent to June 30, 2017, the Company received a letter related to the note wherein the lender waived any historical and future events of default through August 24, 2017 and extended the maturity date through August 24, 2017 and later sent an additional letter where the lenders waived any historical and future events of default through January 12, 2018 and extended the maturity date through January 12, 2018 (see Note 18). In November 2017, the officer assigned $2,000,000 of principal all of the notes payable held by the related-party entities to a third party who the Company owed aggregate principal of $1,200,000 as of June 30, 2017. Interest accrued on the $2,000,000 assigned principal will continue to be payable to the related-party entities (see Note 18). |  | 250,000 |  | 250,000
Unsecured note payable to a former officer with interest at 12% per annum, due September 2013. This note is in default and is convertible into common stock at $375 per share. |  | 26,721 |  | 26,721
Unsecured note payable to an entity controlled by an officer with interest at 18% per annum, due on demand. The note is currently in technical default. However, as of the time of this report, the lender has informally agreed to work with the Company until such time as the note can be repaid. In February 2016, the note was amended to subordinate the note to other notes payable also issued during February 2016. The note is convertible into shares of common stock at $30 per share, which was below the fair value of the Company's stock on the date of the amendment. The conversion of the note is now limited to a maximum of 40,000 common shares in combination with other convertible notes payable held by the entity. The note has a default penalty of 8,407 shares of common stock, in combination with other convertible notes held by the entity, if not paid by maturity. The Company recorded the value of the combined beneficial conversion features of $1,400,000 to loss on termination of debt as a result of the amendment. In January 2017 and February 2017, the note was amended to extend the maturity date to February 15, 2017 and April 30, 2017, respectively. Subsequent to June 30, 2017, the Company received a letter related to the note wherein the lender waived any historical and future events of default through August 24, 2017 and extended the maturity date through August 24, 2017 and later sent an additional letter where the lenders waived any historical and future events of default through January 12, 2018 and extended the maturity date through January 12, 2018 (see Note 18). In November 2017, the officer assigned $2,000,000 of principal all of the notes payable held by the related-party entities to a third party who the Company owed aggregate principal of $1,200,000 as of June 30, 2017. Interest accrued on the $2,000,000 assigned principal will continue to be payable to the related-party entities (see Note 18). |  | 25,463 |  | 25,463
Unsecured note payable to a former officer with interest at 15% per annum, due June 2012, in default. The note included a $3,000 loan origination fee added to the principal and is convertible into common stock at $250 per share. |  | 1,260 |  | 17,227
Unsecured note payable to a former officer with interest at 12% per annum, due on demand. |  | - |  | 12,474
Total notes payable, related-party |  | 3,869,683 |  | 3,898,124
Less current portion |  | (3,869,683) |  | (3,898,124)
Notes payable, related-party, net of current portion | $ | - | $ | -

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- Definition Tabular disclosure of related party transactions. Examples of related party transactions include, but are not limited to, transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners and (d) affiliates. + References No definition available. + Details
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- References No definition available. + Details
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