STOCK WARRANTS

3 Months Ended

Dec. 31, 2018

Accounting Policies [Abstract]

STOCK WARRANTS

10. STOCK WARRANTS

The following is a summary of stock warrant activity during the three months ended December 31, 2018. 

	Number of Warrant Shares			Weighted Average Exercise Price
Balance, September 30, 2018		8,959,299		$	0.89
Warrants granted		3,113,333		$	3.24
Warrants expired		—			—
Warrants canceled		—			—
Warrants exercised		(3,000	)		0.36
Balance, December 31, 2018		12,099,632		$	1.50

As of December 31, 2018, the outstanding warrants have a weighted average remaining term of was 3.96 years and an intrinsic value of $10,475,457.

As of December 31, 2018, there are warrants exercisable to purchase 12,099,632 shares of common stock in the Company and 571,429 unvested warrants outstanding that cannot be exercised until vesting conditions are met. 7,661,980 of the warrants require a cash investment to exercise as follows, 50,000 required a cash investment of $0.80 per share, 4,498,647 require a cash investment of $1.50 per share, 1,250,000 require a cash investment of $2.00 per share, 1,030,000 require a cash investment of $2.50 per share, 500,000 require an investment of $5.00 per share and 333,333 require a cash investment of $7.50 per share. 4,437,652 of the outstanding warrants contain provisions allowing a cashless exercise at their respective exercise price.

Warrant activity for the three months ended December 31, 2018

On October 15, 2018, the Company entered into an agreement with a consultant for services. Under this agreement the Company agreed to issue 30,000 warrants to purchase shares of the Company’s common stock at an exercise price of $2.50 for a period of five years which vest evenly over a six-month period from the agreement date. During the three months ended December 31, 2018, the Company recorded stock compensation of $31,650 was recorded as a result of the stock issued under the agreement. The warrants were valued using the black-Scholes valuation model.

On December 31, 2018, in connection with a Securities purchase agreement (see note 7 for additional details) the Company issued Common Stock Purchase Warrants to acquire up to 3,083,333 shares of common stock for a term of three years on a cash-only basis at an exercise price of $2.00 per share with respect to 1,250,000 Warrant Shares, $2.50 with respect to 1,000,000 Warrant Shares, $5.00 with respect to 500,000 Warrant Shares and $7.50 with respect to 333,333 Warrant Shares.

On August 28, 2018, in connection with the Consulting agreement executed with Zero Positive, LLC. the Company issued warrants to purchase 900,000 shares of common stock at an exercise price of $0.80 per share to Zero Positive. The warrants were valued at $2,607,096 using the Black Scholes option pricing model. The warrants vest as follows: 300,000 warrants vested immediately, the balance vest evenly on the last day of each month over the forty-two months beginning August 31, 2018. As of December 31, 2018, 371,429 warrants had vested, and the Company recorded an expense of $124,147 during the three months ended December 31, 2018. (See Note 8 for additional details.)

The Black-Scholes model utilized the following inputs to value the warrants granted during the three months ended December 31, 2018:

Fair value assumptions – Warrants:	December 31, 2018
Risk free interest rate		2.46% -3.01%
Expected term (years)		3-5
Expected volatility		265-268%
Expected dividends		0%

Warrant activity for the three months ended December 31, 2017

On December 13, 2017, an investor exercised warrants to purchase 27,548 shares of the Company’s $0.001 par value common stock at a purchase price equal to $0.363 for each share of Common stock. The Company receive $10,000 as a result of this exercise.

As of December 31, 2018, the Company expects to recognize $1,531,152 of stock-based compensation for the non-vested outstanding warrants over a weighted-average period of 3.08 years.