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PREPAID EXPENSES
9 Months Ended
Jun. 30, 2016
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]  
PREPAID EXPENSES

6. PREPAID EXPENSES

 

The Board of Directors created a Board of Advisors to provide the Officers and Directors with advice and insight and appointed Brad Patee to serve as a member of the board of advisors for a period of one year.

 

As compensation for his appointment, Mr. Patee was granted 180,000 non-statutory options under the following terms: non-transferable, fully vest on March 31, 2015, expire five years from the date of grant, strike price of $0.083 and become immediately exercisable upon the occurrence of a significant liquidating, restructuring or change of control event.

 

The 180,000 stock options were valued at $54,411 using the Black-Scholes option pricing model based upon the following assumptions: term of 5 years, risk free interest rate of 2.11%, a dividend yield of 0% and volatility rates of 110%.   The amount was capitalized as a prepaid expense and will be amortized over a twelve-month term, during the nine months ended June 30, 2016 the Company recorded an expense of $24,232. 

 

On January 22, 2016, the Company appointed Mr. Greg Gohlinghorst as a member of the Company’s board of advisors. He was issued 35,000 shares of common stock for his appointment.  The shares were valued at $11,666 or $0.33 per share. The amount was capitalized as a prepaid expense and will be amortized over a twelve-month term, during the nine months ended June 30, 2016 the Company recorded an expense of $7,299. 

 

On January 15, 2016, we entered into an Investor Relations Consulting Agreement with Hayden IR (“HIR”) to serve as our investor relations firm for a period of twelve months. Under the Agreement, HIR’s responsibilities include: implementing and maintaining an ongoing market support system to expand awareness of our company in the investment community; arranging conference calls and interviews; providing feedback on expectations of results and company value; assisting with the presentation of periodic results of operations; monitoring newswires and industry publications; drafting and coordinating press releases, among other services.

 

As compensation for the services under the Agreement, we agreed to pay HIR a cash monthly fee of $3,500 for the first six months of the Agreement. The monthly fee will increase to $6,500 for the last six months of the Agreement. We also agreed to issue to HIR 20,000 shares of restricted common stock within 30 days of execution. The shares were valued at $6,720 or $0.33 per share. The Stock compensation has been recorded as a prepaid expense and will be amortized evenly over the twelve-month service period. As of June 30, 2016 the company has recorded $3,075 in stock based compensation associated with this agreement.