Note 10 - Stockholders' Equity

9 Months Ended

Jun. 30, 2012

Equity [Abstract]

Note 10 - Stockholders' Equity

Common Stock

The Company has 600,000,000 authorized shares of common stock, par value $0.001 per share. As of June 30, 2012, the Company had 349,823,438 shares issued and 369,758,275 shares outstanding. As of September 30, 2011, the Company had 299,331,673 shares of common stock issued and outstanding.

During the nine months ended June 30, 2012, the Company issued 19,831,184 shares of common stock (valued at $1,029,550 based on closing market prices), for services. The Company also issued 13,026,887 shares of common stock for conversion of debt in the amount of $435,597 (including interest). During the same period, the Company received $400,200 from the sale of 6,670,001 shares of common stock together with warrants to purchase 3,334,999 shares of common stock, and issued 9,988,709 shares of common stock in settlement of certain accounts payable and accrued compensation.

Employee Stock Options and Warrants

A summary of the Company’s activity for employee stock options and warrants:

							Weighted
			Weighted				Average
			Average		Aggregate		Remaining
	Number		Exercise		Intrinsic		Contractual
	of Options		Price		Value		Life
Outstanding at October 1, 2011		38,866,316	$	0.12	$	-		3.01
Granted		3,850,000		0.14
Expired		-		-
Forfeited		-		-
Exercised		-		-
Outstanding at June 30, 2012		42,716,316	$	0.12	$	74,150		2.46
Exercisable at June 30, 2012		42,267,960	$	0.12	$	73,587		2.45

Outstanding and exercisable as of June 30, 2012:

				Weighted				Weighted
				Average				Average
				Remaining				Remaining
Exercise		Options		Contractual		Options		Contractual
Price		Outstanding		Life		Exercisable		Life
$	0.06		7,415,000		3.19		7,358,699		3.18
$	0.07		2,000,000		3.50		2,000,000		3.50
$	0.09		2,000,000		3.50		2,000,000		3.50
$	0.10		9,416,850		2.07		9,416,850		2.07
$	0.12		8,450,940		1.78		8,450,940		1.78
$	0.14		500,000		2.80		107,945		2.80
$	0.15		9,000,000		2.80		9,000,000		2.80
$	0.17		1,000,000		3.92		1,000,000		3.92
$	0.25		2,933,526		0.47		2,933,526		0.47
			42,716,316		2.46		42,267,960		2.45

During the nine months ended June 30, 2012, the Company granted a total of 3,850,000 options and warrants to certain officers and employees. The options and warrants vested immediately upon grant and have a term of five years. The weighted average grant-date fair value of these options and warrants was $203,766.   The fair value of these options and warrants was estimated on the date of the grant using the Black-Scholes option-pricing model with the following weighted-average assumptions:

●   risk free rate of return of 0.72%-0.88%;

●   volatility of 168% - 171%

●   dividend yield of 0%; and

●   expected term of 5 years.

Stock Warrants

A summary of the Company’s warrant activity with non-employees:

				Weighted
				Average		Aggregate
	Number			Exercise		Intrinsic
	of Warrants			Price		Value
Outstanding at October 1, 2011		94,266,670		$	0.15	$	75,000
Granted		6,034,999			0.14
Expired		(1,602,272	)		-
Forfeited		(9,039,312	)		0.25
Exercised		-			-
Outstanding as of June 30, 2012		89,660,085		$	0.14	$	75,000
Exercisable as of June 30, 2012		89,660,085		$	0.14	$	75,000

Warrants outstanding and exercisable as of June 30, 2012:

						Weighted
						Average
						Remaining		Weighted Average
Exercise		Warrants		Warrants		Contractual		Exercise Price
Price		Outstanding		Exercisable		Life		Outstanding		Exercisable
$	0.06		7,500,000		7,500,000		3.88	$	0.06	$	0.06
$	0.07		22,833,333		22,833,333		1.79	$	0.07	$	0.07
$	0.10		6,726,578		6,726,578		3.61	$	0.10	$	0.10
$	0.12		6,226,000		6,226,000		1.44	$	0.12	$	0.12
$	0.14		5,000,000		5,000,000		3.31	$	0.14	$	0.14
$	0.15		2,107,667		2,107,667		2.33	$	0.15	$	0.15
$	0.17		27,993,325		27,993,325		3.41	$	0.17	$	0.17
$	0.18		850,000		850,000		0.54	$	0.18	$	0.18
$	0.25		6,730,000		6,730,000		1.06	$	0.25	$	0.25
$	0.30		3,693,182		3,693,182		0.74	$	0.30	$	0.30
			89,660,085		89,660,085

Noncontrolling Interests

In March 2012 Sionix formed a subsidiary named Williston Basin I, LLC, a Nevada limited liability company (“Williston”). On March 12, 2012, Williston entered into securities purchase agreements with 19 accredited investors for the sale and issuance of 4,000 membership units, constituting 40% of the outstanding equity of Williston, for an aggregate purchase price of $1,350,000. Williston consummated the issuance of its membership units to investors on March 16, 2012. The Company holds a 60% interest in Williston, and is entitled to 60% of its net profit and/or distributable assets. Out of its entitlement to net profit, the Company agreed to pay an amount equal to 15% of any operating net profit generated by Williston in its first 12 months of operations, to certain investors. Williston intends to use the proceeds principally for the acquisition of assets relating to the McFall project, as well as LLC operating expenses. Williston was formed for the purpose of delivering services to McFall Incorporated under its February 2012 Water Treatment Agreement. The entity has a five year term, but the term may be extended by majority consent of its members.

In connection with the formation and financing of Williston, Sionix (i) agreed to assign its rights to the McFall Water Treatment Agreement to Williston, and (ii) will contribute one of its Mobile Water Treatment Systems (MWTS) to Williston, which it will operate during the project.

During the period ended June 30, 2012 the Company formed five more limited liability companies for the purpose of funding additional projects in the Williston Basin should they become available to the Company. In connection with these Sionix received an advance of $250,000 against a funding commitment from REVH20 who holds an approximately 20% interest in Williston. The terms of these additional limited liability companies are expected to be substantially the same as that of Williston. As of August 10, 2012 the Company had not received any additional funding into these new limited liability companies.