Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Dec. 31, 2020 | Feb. 16, 2021 | |
Cover [Abstract] | ||
Entity Registrant Name | KNOW LABS, INC. | |
Entity Central Index Key | 0001074828 | |
Document Type | 10-Q | |
Document Period End Date | Dec. 31, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --09-30 | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Interactive Data Current | Yes | |
Entity Incorporation, State or Country Code | NV | |
Entity File Number | 000-30262 | |
Entity Common Stock, Shares Outstanding | 26,301,354 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2021 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2020 | Sep. 30, 2020 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 2,927,234 | $ 4,298,179 |
Total current assets | 2,927,234 | 4,298,179 |
PROPERTY AND EQUIPMENT, NET | 117,004 | 128,671 |
OTHER ASSETS | ||
Intangible assets | 57,781 | 101,114 |
Other assets | 25,181 | 25,180 |
Operating lease right of use asset | 96,672 | 129,003 |
TOTAL ASSETS | 3,223,872 | 4,682,147 |
CURRENT LIABILITIES: | ||
Accounts payable - trade | 573,224 | 487,810 |
Accounts payable - related parties | 7,559 | 5,687 |
Accrued expenses | 480,403 | 401,178 |
Accrued expenses - related parties | 613,641 | 591,600 |
Convertible notes payable | 5,044,558 | 3,967,578 |
Note payable | 226,170 | 226,170 |
Simple agreements for future equity | 840,000 | 785,000 |
Current portion of operating lease right of use liability | 84,537 | 108,779 |
Total current liabilities | 7,870,092 | 6,573,802 |
NON-CURRENT LIABILITIES: | ||
Operating lease right of use liability, net of current portion | 14,602 | 23,256 |
Total non-current liabilities | 14,602 | 23,256 |
COMMITMENTS AND CONTINGENCIES (Note 14) | ||
STOCKHOLDERS' DEFICIT | ||
Preferred stock | 0 | 0 |
Common stock - $0.001 par value, 100,000,000 shares authorized, 25,370,224 and 24,804,874 shares issued and outstanding at 12/31/2020 and 9/30/2020, respectively | 25,372 | 24,807 |
Additional paid in capital | 56,576,613 | 54,023,758 |
Accumulated deficit | (61,265,612) | (55,966,281) |
Total stockholders' deficit | (4,660,822) | (1,914,911) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | 3,223,872 | 4,682,147 |
Series C Convertible Preferred Stock | ||
STOCKHOLDERS' DEFICIT | ||
Preferred stock | 1,790 | 1,790 |
Series D Convertible Preferred Stock | ||
STOCKHOLDERS' DEFICIT | ||
Preferred stock | $ 1,015 | $ 1,015 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2020 | Sep. 30, 2020 |
STOCKHOLDERS' DEFICIT | ||
Preferred stock par value | $ .001 | $ .001 |
Preferred stock shares authorized | 5,000,000 | 5,000,000 |
Preferred stock shares issued | 0 | 0 |
Preferred stock shares outstanding | 0 | 0 |
Common stock par value | $ .001 | $ 0.001 |
Common stock shares authorized | 100,000,000 | 100,000,000 |
Common stock shares issued | 25,370,224 | 24,804,874 |
Common stock shares outstanding | 25,370,224 | 24,804,874 |
Series C Convertible Preferred Stock | ||
STOCKHOLDERS' DEFICIT | ||
Preferred stock par value | $ .001 | $ 0.001 |
Preferred stock shares authorized | 1,785,715 | 1,785,715 |
Preferred stock shares issued | 1,785,715 | 1,785,715 |
Preferred stock shares outstanding | 1,785,715 | 1,785,715 |
Series D Convertible Preferred Stock | ||
STOCKHOLDERS' DEFICIT | ||
Preferred stock par value | $ 0.001 | $ 0.001 |
Preferred stock shares authorized | 1,016,014 | 1,016,014 |
Preferred stock shares issued | 1,016,004 | 1,016,004 |
Preferred stock shares outstanding | 1,016,004 | 1,016,004 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Statement [Abstract] | ||
REVENUE | $ 0 | $ 117,393 |
COST OF SALES | 0 | 65,935 |
GROSS PROFIT | 0 | 51,458 |
RESEARCH AND DEVELOPMENT EXPENSES | 966,861 | 491,138 |
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 2,598,732 | 920,551 |
OPERATING LOSS | (3,565,593) | (1,360,231) |
OTHER INCOME (EXPENSE): | ||
Interest expense | (1,733,738) | (1,679,490) |
Other income | 0 | 24,708 |
Total other (expense), net | (1,733,738) | (1,654,782) |
LOSS BEFORE INCOME TAXES | (5,299,331) | (3,015,013) |
Income tax expense | 0 | 0 |
NET LOSS | $ (5,299,331) | $ (3,015,013) |
Basic and diluted loss per share | $ (0.21) | $ (0.16) |
Weighted average shares of common stock outstanding- basic and diluted | 25,208,726 | 18,409,902 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT - USD ($) | Series C Convertible Preferred Stock | Series D Convertible Preferred Stock | Common Stock | Additional Paid in Capital | Accumulated Deficit | Total |
Beginning balance, shares at Sep. 30, 2019 | 1,785,715 | 1,016,004 | 18,366,178 | |||
Beginning balance, amount at Sep. 30, 2019 | $ 1,790 | $ 1,015 | $ 18,366 | $ 39,085,179 | $ (42,403,640) | $ (3,297,290) |
Stock compensation expense - employee options | 175,442 | 175,442 | ||||
Stock option exercise, shares | 73,191 | |||||
Stock option exercise, amount | $ 73 | (73) | 0 | |||
Beneficial conversion feature | 330,082 | 330,082 | ||||
Issuance of warrants to debt holders | 168,270 | 168,270 | ||||
Issuance of warrants for services related to debt offering | 160,427 | 160,427 | ||||
Issuance of common stock for exercise of warrants, shares | 28,688 | |||||
Issuance of common stock for exercise of warrants, amount | $ 29 | (29) | 0 | |||
Net loss | (3,015,013) | (3,015,013) | ||||
Ending balance, shares at Dec. 31, 2019 | 1,785,715 | 1,016,004 | 18,468,057 | |||
Ending balance, amount at Dec. 31, 2019 | $ 1,790 | $ 1,015 | $ 18,468 | 39,919,298 | (45,418,653) | (5,478,082) |
Beginning balance, shares at Sep. 30, 2019 | 1,785,715 | 1,016,004 | 18,366,178 | |||
Beginning balance, amount at Sep. 30, 2019 | $ 1,790 | $ 1,015 | $ 18,366 | 39,085,179 | (42,403,640) | (3,297,290) |
Net loss | (13,562,641) | |||||
Ending balance, shares at Sep. 30, 2020 | 1,785,715 | 1,016,004 | 24,804,874 | |||
Ending balance, amount at Sep. 30, 2020 | $ 1,790 | $ 1,015 | $ 24,807 | 54,023,758 | (55,966,281) | (1,914,911) |
Stock compensation expense - employee options | 175,442 | $ 175,442 | ||||
Stock option exercise, shares | 0 | |||||
Beneficial conversion feature | $ 0 | |||||
Conversion of debt offering and accrued interest (Note 9 and 11), shares | 561,600 | |||||
Conversion of debt offering and accrued interest (Note 9 and 11), amount | $ 562 | 561,038 | 561,600 | |||
Issuance of warrants to debt holders | 0 | |||||
Issuance of warrant for services to related party | 1,811,691 | 1,811,691 | ||||
Issuance of common stock for exercise of warrants, shares | 3,750 | |||||
Issuance of common stock for exercise of warrants, amount | $ 4 | 4,684 | 4,688 | |||
Net loss | (5,299,331) | (5,299,331) | ||||
Ending balance, shares at Dec. 31, 2020 | 1,785,715 | 1,016,004 | 25,370,224 | |||
Ending balance, amount at Dec. 31, 2020 | $ 1,790 | $ 1,015 | $ 25,372 | $ 56,576,613 | $ (61,265,612) | $ (4,660,822) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (5,299,331) | $ (3,015,013) |
Adjustments to reconcile net loss to net cash (used in) operating activities | ||
Depreciation and amortization | 64,633 | 60,316 |
Stock based compensation - warrants | 1,811,691 | 0 |
Stock based compensation - stock option grants | 175,442 | 399,897 |
Amortization of debt discount | 1,596,980 | 1,567,047 |
Right of use, net | (565) | 458 |
Provision on loss on accounts receivable | 0 | 40,000 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 0 | 23,049 |
Prepaid expenses | 0 | 1,243 |
Inventory | 0 | 7,103 |
Accounts payable - trade and accrued expenses | 230,150 | 91,575 |
NET CASH (USED IN) OPERATING ACTIVITIES | (1,421,000) | (824,325) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of research and development equipment | (9,633) | (15,357) |
NET CASH (USED IN) INVESTING ACTIVITIES | (9,633) | (15,357) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from convertible notes payable | 0 | 520,000 |
Proceeds from simple agreements for future equity | 55,000 | 0 |
Payments for issuance costs from notes payable | 0 | (78,845) |
Proceeds from issuance of common stock for warrant exercise | 4,688 | 0 |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 59,688 | 441,155 |
NET DECREASE IN CASH AND CASH EQUIVALENTS | (1,370,945) | (398,527) |
CASH AND CASH EQUIVALENTS, beginning of period | 4,298,179 | 1,900,836 |
CASH AND CASH EQUIVALENTS, end of period | 2,927,234 | 1,502,309 |
Supplemental disclosures of cash flow information: | ||
Interest paid | 0 | 0 |
Taxes paid | 0 | 0 |
Non-cash investing and financing activities: | ||
Beneficial conversion feature | 0 | 330,082 |
Issuance of warrants to debt holders | 0 | 168,270 |
Issuance of warrants for services related to debt offering | 0 | 160,427 |
Cashless warrant exercise (fair value) | 0 | 7,172 |
Cashless stock options exercise (fair value) | 0 | 18,298 |
Conversion of debt offering | 520,000 | 0 |
Conversion of accrued interest | $ 41,599 | $ 0 |
1. ORGANIZATION
1. ORGANIZATION | 3 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION | Know Labs, Inc. (the “Company”) was incorporated under the laws of the State of Nevada in 1998. The Company has authorized 105,000,000 shares of capital stock, of which 100,000,000 are shares of voting common stock, par value $0.001 per share, and 5,000,000 are shares preferred stock, par value $0.001 per share. The Company is focused on the development, marketing and sales of proprietary technologies which are capable of uniquely identifying or authenticating almost any substance or material using electromagnetic energy to record, detect, and identify the unique “signature” of the substance or material. The Company call these our “Bio-RFID™” and “ChromaID™” technologies. Historically, the Company focused on the development of our proprietary ChromaID technology. Using light from low-cost LEDs (light emitting diodes) the ChromaID technology maps the color of substances, fluids and materials. With the Company’s proprietary processes we can authenticate and identify based upon the color that is present. The color is both visible to the Company as humans but also outside of the humanly visible color spectrum in the near infra-red and near ultra-violet and beyond. The Company’s ChromaID scanner sees what we like to call “Nature’s Color Fingerprint.” Everything in nature has a unique color identifier and with ChromaID the Company can see, and identify, and authenticate based upon the color that is present. The Company’s ChromaID scanner is capable of uniquely identifying and authenticating almost any substance or liquid using light to record, detect and identify its unique color signature. Today the Company is focused upon extensions and new inventions that are derived from and extend beyond the Company’s ChromaID technology. The Company calls this new technology “Bio-RFID.” The rapid advances made with the Company’s Bio-RFID technology in our laboratory have caused us to move quickly into the commercialization phase as the Company works to create revenue generating products for the marketplace. Today, the sole focus of the Company is on its Bio-RFID technology and its commercialization. Particle, Inc. was incorporated April 30, 2020 and to date has engaged in activities consisting primarily of research and development on threaded light bulbs that have a warm white light that can inactivate germs, including bacteria and viruses. On June 1, 2020, the Company approved and ratified entry into an intercompany Patent License Agreement dated May 21, 2020 with Particle. Pursuant to the Agreement, Particle received an exclusive non-transferrable license to use certain patents and trademarks of the Company, in exchange the Company shall receive: (i) a one-time fee of $250,000 upon a successful financing of Particle, and (ii) a quarterly royalty payment equal to the greater of 5% of the Gross Sales, net of returns, from Particle or $5,000. As of December 31, 2020 the operations of Particle have generated no sales and operations are just commencing. The first product, the Particle bulb can be used in households, businesses and other facilities to inactivating bacteria and viruses. Through internal preliminary testing, Particle personnel has confirmed the bulb’s efficacy in inactivating common germs such as E. coli Staphylococcus In 2010, the Company acquired TransTech Systems, Inc. as an adjunct to our business. Operating as an independent subsidiary, TransTech was a distributor of products for employee and personnel identification and authentication. TransTech historically provided substantially all of the Company’s revenues. The financial results from our TransTech subsidiary had been diminishing as vendors of their products increasingly moved to the Internet and direct sales to their customers. TransTech closed June 30, 2020. |
2. GOING CONCERN
2. GOING CONCERN | 3 Months Ended |
Dec. 31, 2020 | |
Exercise Price 13.500 | |
GOING CONCERN | The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company incurred net losses of $5,299,331, $13,562,641 and $7,612,316 for the three months ended December 31, 2020 and the years ended September 30, 2020 and 2019, respectively. Net cash used in operating activities was $1,421,000, $3,913,803 and $3,104,035 the three months ended December 31, 2020 and the years ended September 30, 2020 and 2019, respectively. The Company anticipates that it will record losses from operations for the foreseeable future. As of December 31, 2020, the Company’s accumulated deficit was $61,265,612. The Company has limited capital resources. These conditions raise substantial doubt about our ability to continue as a going concern. The audit report prepared by the Company’s independent registered public accounting firm relating to our consolidated financial statements for the year ended September 30, 2020 includes an explanatory paragraph expressing the substantial doubt about the Company’s ability to continue as a going concern. The Company believes that its cash on hand will be sufficient to fund our operations until July 31, 2021. The Company may need additional financing to implement our business plan and to service our ongoing operations and pay our current debts. There can be no assurance that we will be able to secure any needed funding, or that if such funding is available, the terms or conditions would be acceptable to us. If we are unable to obtain additional financing when it is needed, we will need to restructure our operations, and divest all or a portion of our business. We may seek additional capital through a combination of private and public equity offerings, debt financings and strategic collaborations. Debt financing, if obtained, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, and could increase our expenses and require that our assets secure such debt. Equity financing, if obtained, could result in dilution to the Company’s then-existing stockholders and/or require such stockholders to waive certain rights and preferences. If such financing is not available on satisfactory terms, or is not available at all, the Company may be required to delay, scale back, eliminate the development of business opportunities and our operations and financial condition may be materially adversely affected. |
3. SIGNIFICANT ACCOUNTING POLIC
3. SIGNIFICANT ACCOUNTING POLICIES: ADOPTION OF ACCOUNTING STANDARDS | 3 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES: ADOPTION OF ACCOUNTING STANDARDS | Basis of Presentation Principles of Consolidation Cash and Cash Equivalents Equipment Long-Lived Assets Intangible Assets Research and Development Expenses The Company’s current research and development efforts are primarily focused on improving our Bio-RFID technology, extending its capacity and developing new and unique applications for this technology. As part of this effort, the Company conducts on-going laboratory testing to ensure that application methods are compatible with the end-user and regulatory requirements, and that they can be implemented in a cost-effective manner. The Company also is actively involved in identifying new applications. The Company’s current internal team along with outside consultants has considerable experience working with the application of the Company’s technologies and their applications. The Company engages third party experts as required to supplement our internal team. The Company believes that continued development of new and enhanced technologies is essential to our future success. The Company incurred expenses of $966,861, $2,033,726 and $1,257,872 for the three months ended December 31, 2020 and the years ended September 30, 2020 and 2019, respectively, on development activities. Advertising Fair Value Measurements and Financial Instruments Fair Value Measurement and Disclosures Level 1 – Quoted prices in active markets for identical assets and liabilities; Level 2 – Inputs other than level one inputs that are either directly or indirectly observable; and Level 3 - Inputs to the valuation methodology are unobservable and significant to the fair value measurement. The recorded value of other financial assets and liabilities, which consist primarily of cash and cash equivalents, accounts receivable, other current assets, and accounts payable and accrued expenses approximate the fair value of the respective assets and liabilities as of December 31, 2020 and September 30, 2020 are based upon the short-term nature of the assets and liabilities. The Company has a money market account which is considered a level 1 asset. The balance as of December 31, 2020 and September 30, 2020 was $2,853,419 and $4,252,959, respectively. The following table represents a roll-forward of the fair value of the Simple Agreement for Future Equity (“SAFE”) for which fair value is determined by Level 3 inputs: Balance as of October 1, 2019 $ - Proceeds from issuance of SAFE 785,000 Fair value adjustment - Balance as of September 30, 2020 $ 785,000 Proceeds from issuance of SAFE 55,000 Fair value adjustment - Balance as of December 31, 2020 $ 840,000 Fair value of the SAFE on issuance was determined to be equal to the proceeds received (see Note 8). There were no transfers among Level 1, Level 2, or Level 3 categories in the periods presented. Derivative Financial Instruments – The Company determined that the conversion features for purposes of bifurcation within its currently outstanding convertible notes payable were immaterial and there was no derivative liability to be recorded as of December 31, 2020 and September 30, 2020. Stock Based Compensation Convertible Securities Net Loss per Share As of December 31, 2019, there were options outstanding for the purchase of 4,812,668 common shares (including unearned stock option grants totaling 2,680,000 and excluding certain stock option grants for a cancelled kickstarter program), warrants for the purchase of 18,044,490 common shares, and 8,108,356 shares of the Company’s common stock issuable upon the conversion of Series C and Series D Convertible Preferred Stock. In addition, the Company currently has 13,782,779 common shares (9,020,264 common shares at the current price of $0.25 per share and 4,762,515 common shares at the current price of $1.00 per share) and are issuable upon conversion of convertible debentures of $7,017,581. All of which could potentially dilute future earnings per share. Comprehensive Loss Dividend Policy Use of Estimates Recent Accounting Pronouncements Based on the Company’s review of accounting standard updates issued since the filing of the 2020 Form 10-K, there have been no other newly issued or newly applicable accounting pronouncements that have had, or are expected to have, a significant impact on the Company’s consolidated financial statements. Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company’s consolidated financial statements upon adoption. |
4. FIXED ASSETS
4. FIXED ASSETS | 3 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
FIXED ASSETS | Property and equipment as of December 31, 2020 and September 30, 2020 was comprised of the following: Estimated December 31, September 30, Useful Lives 2020 2020 Machinery and equipment 2-3 years $ 361,020 $ 355,272 Leasehold improvements 5 years 3,612 3,612 Furniture and fixtures 5 years 26,855 26,855 Software and websites - - Less: accumulated depreciation (278,044 ) (257,068 ) $ 113,443 $ 128,671 Total depreciation expense was $21,300 and $16,983 for the three months ended December 31, 2020 and 2019, respectively. All equipment is used for selling, general and administrative purposes and accordingly all depreciation is classified in selling, general and administrative expenses. |
5. INTANGIBLE ASSETS
5. INTANGIBLE ASSETS | 3 Months Ended |
Dec. 31, 2020 | |
Finite-Lived Intangible Assets, Net [Abstract] | |
INTANGIBLE ASSETS | Intangible assets as of December 31, 2020 and September 30, 2020 consisted of the following: Estimated December 31, September 30, Useful Lives 2020 2020 Technology 3 years $ 520,000 $ 520,000 Less: accumulated amortization (462,219 ) (418,886 ) Intangible assets, net $ 57,781 $ 101,114 Total amortization expense was $43,333 for the three months ended December 31, 2020 and 2019. Merger with RAAI Lighting, Inc. On April 10, 2018, the Company entered into an Agreement and Plan of Merger with 500 Union Corporation, a Delaware corporation and a wholly owned subsidiary of the Company, and RAAI Lighting, Inc., a Delaware corporation. Pursuant to the Merger Agreement, the Company acquired all the outstanding shares of RAAI’s capital stock through a merger of Merger Sub with and into RAAI (the “Merger”), with RAAI surviving the Merger as a wholly owned subsidiary of the Company. The fair value of the intellectual property associated with the assets acquired was $520,000 estimated by using a discounted cash flow approach based on future economic benefits. In summary, the estimate was based on a projected income approach and related discounted cash flows over five years, with applicable risk factors assigned to assumptions in the forecasted results. |
6. LEASES
6. LEASES | 3 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
LEASES | The Company has entered into operating leases for office and development facilities. These leases have terms which range from two to three years and include options to renew. These operating leases are listed as separate line items on the Company's December 31, 2020 and September 30, 2020 Consolidated Balance Sheets and represent the Company’s right to use the underlying asset for the lease term. The Company’s obligation to make lease payments are also listed as separate line items on the Company's December 31, 2020 and September 30, 2020 Consolidated Balance Sheets. Based on the present value of the lease payments for the remaining lease term of the Company's existing leases, the Company recognized right-of-use assets and lease liabilities for operating leases of approximately $250,000 on October 1, 2018. Operating lease right-of-use assets and liabilities commencing after October 1, 2018 are recognized at commencement date based on the present value of lease payments over the lease term. During the three months ended December 31, 2020 and September 30, 2020, the Company had one lease expire and recognized the rent payments as an expense in the current period. As of December 31, 2020 and September 30, 2020, total right-of-use assets and operating lease liabilities for remaining long term lease was approximately $99,000 and $132,000, respectively. In the three months ended December 31, 2020 and the year ended September 30, 2020, the Company recognized approximately $37,612 and $136,718, respectively in total lease costs for the leases. Because the rate implicit in each lease is not readily determinable, the Company uses its incremental borrowing rate to determine the present value of the lease payments. Information related to the Company's operating right-of-use assets and related lease liabilities as of and for the period ended December 31, 2020 was as follows: Cash paid for ROU operating lease liability $34,813 Weighted-average remaining lease term 1.2 years Weighted-average discount rate 7% The minimum future lease payments as of December 31, 2020 are as follows: Year $ 2021 $ 87,463 2022 17,917 Imputed interest (6,241 ) Total lease liability $ 99,139 |
7. CONVERTIBLE NOTES PAYABLE AN
7. CONVERTIBLE NOTES PAYABLE AND NOTE PAYABLE | 3 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
CONVERTIBLE NOTES PAYABLE AND NOTE PAYABLE | Convertible notes payable as of December 31, 2020 and September 30, 2020 consisted of the following: Convertible Promissory Notes with Clayton A. Struve The Company owes Clayton A. Struve $1,071,000 under convertible promissory or OID notes. The Company recorded accrued interest of $73,452 and $71,562 as of December 31, 2020 and September 30, 2020, respectively. On December 23, 2020, the Company signed Amendments to the convertible promissory or OID notes, extending the due dates to March 31, 2021. Mr. Struve also invested $1,000,000 in the May 2019 Debt Offering. Convertible Redeemable Promissory Notes with Ronald P. Erickson and J3E2A2Z On March 16, 2018, the Company entered into a Note and Account Payable Conversion Agreement pursuant to which (a) all $664,233 currently owing under the J3E2A2Z Notes was converted to a Convertible Redeemable Promissory Note in the principal amount of $664,233, and (b) all $519,833 of the J3E2A2Z Account Payable was converted into a Convertible Redeemable Promissory Note in the principal amount of $519,833 together with a warrant to purchase up to 1,039,666 shares of common stock of the Company for a period of five years. The initial exercise price of the warrants described above is $0.50 per share, also subject to certain adjustments. The warrants were valued at $110,545. Because the note is immediately convertible, the warrants and beneficial conversion were expensed as interest. The Company recorded accrued interest of $163,109 and $145,202 as of December 31, 2020 and September 30, 2020, respectively. On December 8, 2020, the Company signed Amendment 4 to the convertible promissory or OID notes, extending the due dates to March 31, 2021. Convertible Debt Offering Beginning in 2019, the Company entered into series of debt offerings with similar and consistent terms. The Company issued Subordinated Convertible Notes and Warrants in a private placement to accredited investors, pursuant to a series of substantially identical Securities Purchase Agreements, Common Stock Warrants, and related documents. The notes are convertible into one share of common stock for each dollar invested in a Convertible Note Payable and automatically convert to common stock after one year. The convertible notes contain terms and conditions which are deemed to be a Beneficial Conversion Feature (BCF). Warrants are issued to purchase common stock with an exercise price of $1.20 per share and the number of warrants are equal to 50% of the convertible note balance. The Company compensates the placement agent with a cash fee and warrants. Through December 31, 2020, the Company has raised approximately $10 million through this offerings, of which $0 and $520,000 were raised in the three months ended December 31, 2020 and 2019. The Convertible Notes are initially convertible into 520,000 shares of Common Stock, subject to certain adjustments, and the Warrants are initially exercisable for 260,000 shares of Common Stock. The fair value of the Warrants issued to debt holders was $168,270 on the date of issuance and were amortized over the one-year term of the Convertible Notes. In connection with the debt offering, the placement agent for the Convertible Notes and the Warrants received a cash fee of $78,845 and warrants to purchase 71,400 shares of the Company’s common stock, all based on 8-10% of gross proceeds to the Company. The warrants issued for these services had a fair value of $160,427 at the date of issuance. The fair value of the warrants was recorded as debt discount (with an offset to APIC) and will be amortized over the one-year term of the Convertible Notes. The $78,845 cash fee was recorded as issuance costs and will be amortized over the one-year term of the related Convertible Notes. The Company recorded a debt discount of $330,082 associated with a beneficial conversion feature on the debt, which is being accreted using the effective interest method over the one-year term of the Convertible Notes. During the three months ended December 31, 2020, the Company issued 561,600 shares of common stock related to the automatic conversion of Convertible Notes and interest from a private placement to accredited investors in 2020. The Convertible Notes and interested were automatically converted to Common Stock at $1.00 per share on the one year anniversary starting on October 17, 2020. During the three months ended December 31, 2020, amortization related to the 2020 debt offerings of $1,596,980 of the beneficial conversion feature, warrants issued to debt holders and placement agent was recognized as interest expense in the consolidated statements of operations. Convertible notes payable as of December 31, 2020 and September 30, 2020 are summarized below: December 31, 2020 September 30, 2020 Convertible note- Clayton A. Struve $ 1,071,000 $ 1,071,000 Convertible note- Ronald P. Erickson and affiliates 1,184,066 1,184,066 2019 Convertible notes 4,242,490 4,242,490 Q1 2020 Convertible notes 520,000 520,000 Q2 2020 Convertible notes 195,000 195,000 Q3 2020 Convertible notes 4,924,500 4,924,500 Boustead fee refund (originally booked as contra debt) 50,000 50,000 Less conversions of 2019 and 2020 notes (4,762,490 ) (4,242,490 ) Less debt discount - BCF (1,237,832 ) (2,127,894 ) Less debt discount - warrants (595,743 ) (1,025,512 ) Less debt discount - warrants issued for services (546,433 ) (823,582 ) $ 5,044,558 $ 3,967,578 Note Payable On April 30, 2020, the Company received $226,170 under the Paycheck Protection Program of the U.S. Small Business Administration’s 7(a) Loan Program pursuant to the Coronavirus, Aid, Relief and Economic Security Act (CARES Act), Pub. Law 116-136, 134 Stat. 281 (2020). As of December 31, 2020 and September 30, 2020, the Company recorded interest expense of $1,530 and $960, respectively. The Company is utilizing the funds in accordance with the legal requirements and expects this loan to be forgiven. Until the loan is legally forgiven, the loan balance will outstanding. The Company expects to start the application for the loan forgiveness during the three months ended March 31, 2021. |
8. SIMPLE AGREEMENTS FOR FUTURE
8. SIMPLE AGREEMENTS FOR FUTURE EQUITY | 3 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
SIMPLE AGREEMENTS FOR FUTURE EQUITY | In July 2020, Particle entered into Simple Agreements for Future Equity (“SAFE”) with twenty two accredited investors pursuant to which Particle received $785,000 in cash in exchange for the providing the investor the right to receive shares of the Particle stock. The Company expects to issue 981,250 shares of the Particle stock that was initially valued at $0.80 per share. The Company paid $47,100 in broker fees which were expensed as business development expenses. In October 2020, Particle entered into Simple Agreements for Future Equity (“SAFE”) with two accredited investors pursuant to which Particle received $55,000 in cash in exchange for the providing the investor the right to receive shares of the Particle stock. The Company expects to issue 68,750 shares of the Particle stock that was initially valued at $0.80 per share. The Company paid $4,125 in broker fees which were expensed as business development expenses. The SAFE contained a number of conversion and redemption provisions, including settlement upon liquidity or dissolution events. The final price and shares are not known until settlement upon liquidity or dissolution events conditions are achieved. The Company elected the fair value option of accounting for the SAFE. |
9. EQUITY
9. EQUITY | 3 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
EQUITY | Authorized Capital Stock The Company authorized 105,000,000 shares of capital stock, of which 100,000,000 are shares of voting common stock, par value $0.001 per share, and 5,000,000 are shares preferred stock, par value $0.001 per share. As of December 31, 2020, the Company had 25,370,224 shares of common stock issued and outstanding, held by 125 stockholders of record. The number of stockholders, including beneficial owners holding shares through nominee names, is approximately 2,300. Each share of common stock entitles its holder to one vote on each matter submitted to the stockholders for a vote, and no cumulative voting for directors is permitted. Stockholders do not have any preemptive rights to acquire additional securities issued by the Company. As of December 31, 2020, there were options outstanding for the purchase of 12,936,995 common shares (including unearned stock option grants totaling 10,625,745 shares related to performance targets), warrants for the purchase of 22,016,367 common shares, and 8,108,356 shares of the Company’s common stock issuable upon the conversion of Series C and Series D Convertible Preferred Stock. In addition, the Company currently has 14,189,764 common shares (9,020,264 common shares at the current price of $0.25 per share and 5,169,500 common shares at the current price of $1.20 per share) reserved and are issuable upon conversion of convertible debentures of $7,424,566. All of which could potentially dilute future earnings per share but are excluded from the December 31, 2020 calculation of net loss per share because their impact is antidilutive. Voting Preferred Stock The Company is authorized to issue up to 5,000,000 shares of preferred stock with a par value of $0.001. Series C and D Preferred Stock and Warrants On August 5, 2016, the Company closed a Series C Preferred Stock and Warrant Purchase Agreement with Clayton A. Struve, an accredited investor for the purchase of $1,250,000 of preferred stock with a conversion price of $0.70 per share. The preferred stock has a yield of 8% and an ownership blocker of 4.99%. In addition, Mr. Struve received a five-year warrant to acquire 1,785,714 shares of common stock at $0.70 per share. On August 14, 2017, the price of the Series C Stock were adjusted to $0.25 per share pursuant to the documents governing such instruments. On December 31, 2020 and September 30, 2020 there are 1,785,715 Series C Preferred shares outstanding. As of December 31, 2020 and September 30, 2020, the Company has 1,016,014 of Series D Preferred Stock outstanding with Clayton A. Struve, an accredited investor. On August 14, 2017, the price of the Series D Stock were adjusted to $0.25 per share pursuant to the documents governing such instruments. The Series D Preferred Stock is convertible into shares of common stock at a price of $0.25 per share or by multiplying the number of Series D Preferred Stock shares by the stated value and dividing by the conversion price then in effect, subject to certain diluted events, and has the right to vote the number of shares of common stock the Series D Preferred Stock would be issuable on conversion, subject to a 4.99% blocker. The Preferred Series D has an annual yield of 8% The Series D Preferred Stock is convertible into shares of common stock at a price of $0.25 per share or by multiplying the number of Series D Preferred Stock shares by the stated value and dividing by the conversion price then in effect, subject to certain diluted events, and has the right to vote the number of shares of common stock the Series D Preferred Stock would be issuable on conversion, subject to a 4.99% blocker. The Preferred Series D has an annual yield of 8% if and when dividends are declared. Series F Preferred Stock On August 1, 2018, the Company filed with the State of Nevada a Certificate of Designation establishing the Designations, Preferences, Limitations and Relative Rights of Series F Preferred Stock. The Designation authorized 500 shares of Series F Preferred Stock. The Series F Preferred Stock shall only be issued to the current Board of Directors on the date of the Designation’s filing and is not convertible into common stock. As set forth in the Designation, the Series F Preferred Stock has no rights to dividends or liquidation preference and carries rights to vote 100,000 shares of common stock per share of Series F upon a Trigger Event, as defined in the Designation. A Trigger Event includes certain unsolicited bids, tender offers, proxy contests, and significant share purchases, all as described in the Designation. Unless and until a Trigger Event, the Series F shall have no right to vote. The Series F Preferred Stock shall remain issued and outstanding until the date which is 731 days after the issuance of Series F Preferred Stock (“Explosion Date”), unless a Trigger Event occurs, in which case the Explosion Date shall be extended by 183 days. As of December 31, 2020 and September 30, 2020, there are no Series F shares outstanding. Securities Subject to Price Adjustments In the future, if the Company sells its common stock at a price below $0.25 per share, the exercise price of 8,108,356 outstanding shares of Series C and D Preferred Stock that adjust below $0.25 per share pursuant to the documents governing such instruments. In addition, the conversion price of Convertible Notes Payable of $7,894,566 or 14,659,764 common shares (9,020,264 common shares at the current price of $0.25 per share and 5,639,500 common shares at the current price of $1.00 per share) and the exercise price of additional outstanding warrants to purchase 12,588,286 shares of common stock would adjust below $0.25 per share pursuant to the documents governing such instruments. Warrants totaling 5,191,636 would adjust below $1.20 per share pursuant to the documents governing such instruments. Common Stock All of the offerings and sales described below were deemed to be exempt under Rule 506 of Regulation D and/or Section 4(a)(2) of the Securities Act. No advertising or general solicitation was employed in offering the securities, the offerings and sales were made to a limited number of persons, all of whom were accredited investors and transfer was restricted by the company in accordance with the requirements of Regulation D and the Securities Act. All issuances to accredited and non-accredited investors were structured to comply with the requirements of the safe harbor afforded by Rule 506 of Regulation D, including limiting the number of non-accredited investors to no more than 35 investors who have sufficient knowledge and experience in financial and business matters to make them capable of evaluating the merits and risks of an investment in our securities. The following equity issuances occurred during the three months ended December 31, 2020: The Company issued 561,600 shares of common stock related to the automatic conversion of Convertible Notes and interest from a private placement to accredited investors in 2020. The Convertible Notes and interested were automatically converted to Common Stock at $1.00 per share on the one year anniversary starting on October 17, 2020. The Company issued 3,750 shares of common stock at $1.25 per share related to the exercise of warrants. Warrants to Purchase Common Stock The following warrant transactions occurred during the three months ended December 31, 2020: On December 15, 2020, the Company issued a fully vested warrant to Ronald P. Erickson for 2,000,000 shares of common stock. The five year warrant is convertible at $1.53 per share and was valued using a Black-Scholes model at $1,811,691. A summary of the warrants outstanding as of December 31, 2020 were as follows: December 31, 2020 Weighted Average Exercise Shares Price Outstanding at beginning of period 20,016,367 $ 0.556 Issued 2,000,000 1.530 Exercised - - Forfeited - - Expired - - Outstanding at end of period 22,016,367 $ 0.644 Exercisable at end of period 22,016,367 The following table summarizes information about warrants outstanding and exercisable as of December 31, 2020: December 31, 2020 Weighted Weighted Weighted Average Average Average Number of Remaining Exercise Shares Exercise Warrants Life ( In Years) Price Exercisable Price 13,133,286 1.52 $ 0.250 13,133,286 $ 0.250 714,286 0.58 0.700 714,286 0.700 882,159 0.87 1.000 882,159 1.000 7,191,636 4.25 1.20-1.50 7,191,636 1.20-1.50 95,000 3.94 2.00-4.08 95,000 2.34-4.08 22,016,367 3.27 $ 0.644 22,016,367 $ 0.644 The significant weighted average assumptions relating to the valuation of the Company’s warrants issued during the three months ended December 31, 2020 were as follows: Dividend yield 0% Expected life 3 years Expected volatility 140% Risk free interest rate 0.4% There were vested warrants of 22,016,367 with an aggregate intrinsic value of $36,904,487. |
10. STOCK INCENTIVE PLANS
10. STOCK INCENTIVE PLANS | 3 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
STOCK INCENTIVE PLANS | Know Labs, Inc. On January 23, 2019, the Board approved an amendment to its 2011 Stock Incentive Plan increasing the number of shares of common stock reserved under the Incentive Plan from 2,200,000 to 2,500,000 to common shares. On May 22, 2019, the Compensation Committee approved an amendment to its 2011 Stock Incentive Plan increasing the number of shares of common stock reserved under the Incentive Plan from 2,500,000 to 3,000,000 to common shares. On November 23, 2020, the Board of Directors increased the size of the stock available under the Stock Option Plan by 9,750,000 shares. This increase is based on an industry peer group study. Determining Fair Value under ASC 718 The Company records compensation expense associated with stock options and other equity-based compensation using the Black-Scholes-Merton option valuation model for estimating fair value of stock options granted under our plan. The Company amortizes the fair value of stock options on a ratable basis over the requisite service periods, which are generally the vesting periods. The expected life of awards granted represents the period of time that they are expected to be outstanding. The Company estimates the volatility of our common stock based on the historical volatility of its own common stock over the most recent period corresponding with the estimated expected life of the award. The Company bases the risk-free interest rate used in the Black Scholes-Merton option valuation model on the implied yield currently available on U.S. Treasury zero-coupon issues with an equivalent remaining term equal to the expected life of the award. The Company has not paid any cash dividends on our common stock and does not anticipate paying any cash dividends in the foreseeable future. Consequently, the Company uses an expected dividend yield of zero in the Black-Scholes-Merton option valuation model and adjusts share-based compensation for changes to the estimate of expected equity award forfeitures based on actual forfeiture experience. The effect of adjusting the forfeiture rate is recognized in the period the forfeiture estimate is changed. Stock Option Activity The Company had the following stock option transactions during the three months ended December 31, 2020: A consultant exercised a stock option for 3,750 shares of common stock for a vested stock option grant. The stock option grant had an exercise price of $1.25 per share. The Compensation committee issued a stock option grant to an employee for 140,000 shares at an exercise price of $1.24 per share. The stock option grant expires in five years. The stock option grant vests quarterly over four years after a six month cliff vesting period. On December 15, 2020, the Company issued two stock option grants to Ronald P. Erickson one for 1,865,675 shares and one for 1,865,675 shares at an exercise price of $1.53 per share. The stock option grants expire in five years. The stock option grants vest when earned based on certain performance criteria. On December 15, 2020, the Company issued two stock option grants to Phillip A. Bosua one for 2,132,195 shares and one for 2,132,200 shares at an exercise price of $1.53 per share. The stock option grants expire in five years. The stock option grants vest when earned based on certain performance criteria. There are currently 12,936,995 (including unearned stock option grants totaling 10,625,745 shares related to performance targets) options to purchase common stock at an average exercise price of $1.390 per share outstanding as of December 31, 2020 under the 2011 Stock Incentive Plan. The Company recorded $119,483 and 175,442 of compensation expense, net of related tax effects, relative to stock options for the three months ended December 31, 2020 and 2019 and in accordance with ASC 718. As of December 31, 2020, there is approximately $505,996, net of forfeitures, of total unrecognized costs related to employee granted stock options that are not vested. These costs are expected to be recognized over a period of approximately 3.84 years. Stock option activity for the three months ended December 31, 2020 and the years ended September 30, 2020 and 2019 were as follows: Weighted Average Options Exercise Price $ Outstanding as of September 30, 2018 2,182,668 $ 1.698 $ 3,706,519 Granted 2,870,000 2.615 7,504,850 Exercised - - - Forfeitures (520,000 ) (3.906 ) (2,031,000 ) Outstanding as of September 30, 2019 4,532,668 2.025 9,180,369 Granted 3,085,000 1.142 3,522,400 Exercised (73,191 ) (0.250 ) (18,298 ) Forfeitures (2,739,477 ) (2.593 ) (7,103,921 ) Outstanding as of September 30, 2020 4,805,000 1.161 5,580,550 Granted 8,135,745 1.525 12,407,090 Exercised (3,750 ) (1.250 ) (4,688 ) Forfeitures - - - Outstanding as of December 31, 2020 12,936,995 $ 1.390 $ 17,982,952 The following table summarizes information about stock options outstanding and exercisable as of December 31, 2020: Weighted Weighted Weighted Average Average Average Range of Number Remaining Life Exercise Price Number Exercise Price Exercise Prices Outstanding In Years Outstanding Exercisable Exercisable $ 0.25 230,000 2.45 $ 0.250 129,375 $ 0.250 1.10-1.25 3,076,250 3.89 1.05 340,729 1.104 1.28-1.52 9,495,745 3.89 1.50 773,646 1.310 1.79-2.25 135,000 3.01 2.13 71,875 2.145 12,936,995 3.84 $ 1.390 1,315,625 $ 1.294 There were in the money stock option grants of 12,936,995 shares as of December 31, 2020 with an aggregate intrinsic value of $11,794,416. Particle, Inc. On May 21, 2020, Particle approved a 2020 Stock Incentive Plan and reserved 8,000,000 shares under the Plan. The Plan requires vesting annually over four years, with no vesting in the first two quarters. During the three months ended September 30, 2020, Particle approved stock option grants to non-executive employees and consultants totaling 2,250,000 shares at an average of $0.147 per share. The stock option grants vest annually over four years, with no vesting in the first two quarters. On July 2, 2020, Particle approved stock option grants for 1,500,000 shares at $0.10 per share to both Phillip A. Bosua and Ronald P. Erickson. The stock option grants vest (i) 33.3% upon issuance; (ii) 33.3% after the first sale; and (iii) 33.4% after one million in sales are achieved. The 500,000 vested stock option grants for both Mr. Bosua and Erickson were valued at $0.788 per share or $394,000. During November 2020, Particle approved a stock option grant to a consultant totaling 50,000 shares at an average of $0.80 per share. The stock option grant vests quarterly over four years, with no vesting in the first two quarters. The Company recorded $55,959 and $0 of compensation expense, net of related tax effects, relative to stock options for the three months ended December 31, 2020 and 2019 and in accordance with ASC 718. As of December 31, 2020, there is approximately $802,445, net of forfeitures, of total unrecognized costs related to employee granted stock options that are not vested. These costs are expected to be recognized over a period of approximately 4.52 years. The following table summarizes information about Particle stock options outstanding and exercisable as of December 31, 2020: Weighted Weighted Average Weighted Average Range of Number Remaining Life Average Number Exercise Price Exercise Prices Outstanding In Years Exercise Price Exercisable Exercisable $ 0.10 5,100,000 4.51 $ 0.10 1,000,000 $ 0.10 0.80 200,000 4.77 $ 0.80 - - 5,300,000 4.52 $ 4.52 1,000,000 $ 0.10 There were in the money stock option grants of 1,000,000 shares as of December 31, 2020 with an aggregate intrinsic value of $673,585. |
11. OTHER SIGNIFICANT TRANSACTI
11. OTHER SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES | 3 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
OTHER SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES | Related Party Transactions with Ronald P. Erickson See Notes 7, 9, 10 and 12 for related party transactions with Ronald P. Erickson. Mr. Erickson and/or entities with which he is affiliated also have accrued compensation, travel and interest of approximately $619,218 and $597,177 as of December 31, 2020 and September 30, 2020, respectively. On December 15, 2020, the Company issued a fully vested warrant to Ronald P. Erickson for 2,000,000 shares of common stock. The five year warrant is convertible at $1.53 per share and was valued using a Black-Scholes model at $1,811,691. On December 15, 2020, the Company issued two stock option grants to Ronald P. Erickson, one for 1,865,675 shares and one for 1,865,675 shares at an exercise price of $1.53 per share. The stock option grants expire in five years. The stock option grants vest when earned based on certain performance criteria. Related Party Transaction with Phillip A. Bosua See Notes 10 and 12 for related party transactions with Phillip A. Bosua. On December 15, 2020, the Company issued two stock option grant to Phillip A. Bosua, one for 2,132,195 shares and one for 2,132,200 shares at an exercise price of $1.53 per share. The stock option grants expire in five years. The stock option grants vest when earned based on certain performance criteria. |
12. COMMITMENTS, CONTINGENCIES
12. COMMITMENTS, CONTINGENCIES AND LEGAL PROCEEDINGS | 3 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS, CONTINGENCIES AND LEGAL PROCEEDINGS | Legal Proceedings The Company may from time to time become a party to various legal proceedings arising in the ordinary course of our business. The Company is currently not a party to any pending legal proceeding that is not ordinary routine litigation incidental to our business. Employment Agreement with Phillip A. Bosua, Chief Executive Officer See the Employment Agreement for Phillip A. Bosua that was disclosed in Form 10-K filed with the SEC on December 29, 2020. Phillip A. Bosua. Employment Agreement with Ronald P. Erickson, Chairman of the Board and Interim Chief Financial Officer See the Employment Agreement for Ronald P. Erickson that was disclosed in Form 10-K filed with the SEC on December 29, 2020. Properties and Operating Leases See the Property Leases that were disclosed in Form 10-K filed with the SEC on December 29, 2020. |
13. SEGMENT REPORTING
13. SEGMENT REPORTING | 3 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | The management of the Company considers the business to have two operating segments (i) the development of the Bio-RFID™” and “ChromaID™” technologies; (ii) Particle, Inc. technology; and (iii) TransTech, a distributor of products for employee and personnel identification and authentication. TransTech has historically provided substantially all of the Company’s revenues. TransTech closed on June 30, 2020. Particle commenced operations in the three months ended June 30, 2020. The reporting for the three months ended December 31, 2020 and 2019 was as follows (in thousands): Segment Gross Operating Segment Segment Revenue Margin Profit (Loss) Assets Three Months Ended December 31, 2020 Development of the Bio-RFID™” and “ChromaID™” technologies $ - $ - $ (3,190 ) $ 3,158 Particle, Inc. technology - - (375 ) 66 TransTech distribution business - - - - Total segments $ - $ - $ (3,565 ) $ 3,224 Three Months Ended December 31, 2019 Development of the Bio-RFID™” and “ChromaID™” technologies $ - $ - $ (1,393 ) $ 2,077 TransTech distribution business 117 51 32 18 Total segments $ 117 $ 51 $ (1,361 ) $ 2,095 During the three months ended December 31, 2020 and 2019, the Company incurred non-cash expenses of $3,648,181 and $2,067,718. |
14. SUBSEQUENT EVENTS
14. SUBSEQUENT EVENTS | 3 Months Ended |
Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | The Company evaluated subsequent events, for the purpose of adjustment or disclosure, up through the date the financial statements were issued. Subsequent to December 31, 2020, there were the following material transactions that require disclosure: Stock Option Exercises and Issuances On January 14, 2021, the Company issued a warrant to purchase 50,000 shares of common stock to Financial Genetics LLC at $2.00 per share. The warrants were issued for investor relation services. The warrant expires on January 14, 2026. On January 14, 2021, the Company issued a stock option grant to purchase 180,000 shares of common stock to an employee at $2.00 per share. The stock option grant expires in five years and vests quarterly over four years (none in the first six months). On January 15, 2021, the Company issued 30,000 shares each to three directors shares at an exercise price of $2.00 per share. On January 15, 2021, the Company issued 20,000 warrants to purchase common stock each to three directors shares at $2.00 per share. The warrants expire on January 15, 2026. On February 4, 2021, the Company issued a stock option grant to purchase 200,000 shares of common stock to an employee at $2.04 per share. The stock option grant expires in five years and vests quarterly over four years (none in the first six months). On February 9, 2021, the Company issued stock option grants to seven employees and two consultants for 1,350,000 shares at an exercise price of $2.35 per share. The stock option grants expire in five years. The stock option grants vest when earned based on certain performance criteria. On February 4, 2021, Particle issued a stock option grant to purchase 500,000 shares of common stock to an employee at $0.80 per share. The stock option grant expires in five years and vests quarterly over four years (none in the first six months). On February 9, 2021, Particle issued stock option grants to seven employees and one consultant to purchase 1,900,000 shares at an exercise price of $0.80 per share. The stock option grants expire in five years. The stock option grants vest when earned based on certain performance criteria. On February 12, 2021, the Company issued 17,500 shares and received $21,000 related to the exercise of warrants. On February 12, 2021, Particle entered into Simple Agreements for Future Equity (“SAFE”) with accredited investors pursuant to which Particle received $111,815 in cash in exchange for the providing the investor the right to receive shares of the Particle stock. Transactions with Clayton A. Struve On January 5, 2021, the Company extended the due date of the following warrants with Clayton A. Struve, a major investor in the Company: Warrant No./Class Issue Date No. Warrant Shares Exercise Price Original Expiration Date Amended Expiration Date Clayton Struve Warrant Series C Warrant W98 08-04-2016 1,785,715 $0.25 08-04-2021 08-04-2023 Clayton Struve Warrant Series F Warrant F-1 11-14-2016 187,500 $0.25 11-13-2021 11-13-2023 Clayton Struve Warrant Series F Warrant F-2 12-19-2016 187,500 $0.25 12-18-2021 12-18-2023 On January 28, 2021, Clayton A. Struve exercised warrants on a cashless basis for 889,880 shares of common stock at $0.25 per share, including 187,500 and 187,500 that were just extended as discussed above. Particle Test Results The first product, the Particle bulb can be used in households, businesses and other facilities to inactivate bacteria and viruses. Through internal preliminary testing, Particle personnel has confirmed the bulb’s efficacy in inactivating common germs such as E. coli Staphylococcus Appointment of Financial Expert On February 12, 2021, the Audit Committee appointed William A. Owens as “audit committee financial expert” as defined by the Securities and Exchange Commission (“SEC”) and as adopted under the Sarbanes-Oxley Act of 2002. |
3. SIGNIFICANT ACCOUNTING POL_2
3. SIGNIFICANT ACCOUNTING POLICIES: ADOPTION OF ACCOUNTING STANDARDS (Policies) | 3 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation |
Principles of Consolidation | Principles of Consolidation |
Cash and Cash Equivalents | Cash and Cash Equivalents |
Equipment | Equipment |
Long-Lived Assets | Long-Lived Assets |
Intangible Assets | Intangible Assets |
Research and Development Expenses | Research and Development Expenses The Company’s current research and development efforts are primarily focused on improving our Bio-RFID technology, extending its capacity and developing new and unique applications for this technology. As part of this effort, the Company conducts on-going laboratory testing to ensure that application methods are compatible with the end-user and regulatory requirements, and that they can be implemented in a cost-effective manner. The Company also is actively involved in identifying new applications. The Company’s current internal team along with outside consultants has considerable experience working with the application of the Company’s technologies and their applications. The Company engages third party experts as required to supplement our internal team. The Company believes that continued development of new and enhanced technologies is essential to our future success. The Company incurred expenses of $966,861, $2,033,726 and $1,257,872 for the three months ended December 31, 2020 and the years ended September 30, 2020 and 2019, respectively, on development activities. |
Advertising | Advertising |
Fair Value Measurements and Financial Instruments | Fair Value Measurements and Financial Instruments Fair Value Measurement and Disclosures Level 1 – Quoted prices in active markets for identical assets and liabilities; Level 2 – Inputs other than level one inputs that are either directly or indirectly observable; and Level 3 - Inputs to the valuation methodology are unobservable and significant to the fair value measurement. The recorded value of other financial assets and liabilities, which consist primarily of cash and cash equivalents, accounts receivable, other current assets, and accounts payable and accrued expenses approximate the fair value of the respective assets and liabilities as of December 31, 2020 and September 30, 2020 are based upon the short-term nature of the assets and liabilities. The Company has a money market account which is considered a level 1 asset. The balance as of December 31, 2020 and September 30, 2020 was $2,853,419 and $4,252,959, respectively. The following table represents a roll-forward of the fair value of the Simple Agreement for Future Equity (“SAFE”) for which fair value is determined by Level 3 inputs: Balance as of October 1, 2019 $ - Proceeds from issuance of SAFE 785,000 Fair value adjustment - Balance as of September 30, 2020 $ 785,000 Proceeds from issuance of SAFE 55,000 Fair value adjustment - Balance as of December 31, 2020 $ 840,000 Fair value of the SAFE on issuance was determined to be equal to the proceeds received (see Note 8). There were no transfers among Level 1, Level 2, or Level 3 categories in the periods presented. |
Derivative Financial Instruments | Derivative Financial Instruments – The Company determined that the conversion features for purposes of bifurcation within its currently outstanding convertible notes payable were immaterial and there was no derivative liability to be recorded as of December 31, 2020 and September 30, 2020. |
Stock Based Compensation | Stock Based Compensation |
Convertible Securities | Convertible Securities |
Net Loss per Share | Net Loss per Share As of December 31, 2019, there were options outstanding for the purchase of 4,812,668 common shares (including unearned stock option grants totaling 2,680,000 and excluding certain stock option grants for a cancelled kickstarter program), warrants for the purchase of 18,044,490 common shares, and 8,108,356 shares of the Company’s common stock issuable upon the conversion of Series C and Series D Convertible Preferred Stock. In addition, the Company currently has 13,782,779 common shares (9,020,264 common shares at the current price of $0.25 per share and 4,762,515 common shares at the current price of $1.00 per share) and are issuable upon conversion of convertible debentures of $7,017,581. All of which could potentially dilute future earnings per share. |
Comprehensive Loss | Comprehensive Loss |
Dividend Policy | Dividend Policy |
Use of Estimates | Use of Estimates |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Based on the Company’s review of accounting standard updates issued since the filing of the 2020 Form 10-K, there have been no other newly issued or newly applicable accounting pronouncements that have had, or are expected to have, a significant impact on the Company’s consolidated financial statements. Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company’s consolidated financial statements upon adoption. |
3. SIGNIFICANT ACCOUNTING POL_3
3. SIGNIFICANT ACCOUNTING POLICIES: ADOPTION OF ACCOUNTING STANDARDS (Tables) | 3 Months Ended |
Dec. 31, 2020 | |
Significant Accounting Policies Adoption Of Accounting Standards | |
Fair value of the simple agreement for future equity | Balance as of October 1, 2019 $ - Proceeds from issuance of SAFE 785,000 Fair value adjustment - Balance as of September 30, 2020 $ 785,000 Proceeds from issuance of SAFE 55,000 Fair value adjustment - Balance as of December 31, 2020 $ 840,000 |
4. FIXED ASSETS (Tables)
4. FIXED ASSETS (Tables) | 3 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | Estimated December 31, September 30, Useful Lives 2020 2020 Machinery and equipment 2-3 years $ 361,020 $ 355,272 Leasehold improvements 5 years 3,612 3,612 Furniture and fixtures 5 years 26,855 26,855 Software and websites - - Less: accumulated depreciation (278,044 ) (257,068 ) $ 113,443 $ 128,671 |
5. INTANGIBLE ASSETS (Tables)
5. INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Dec. 31, 2020 | |
Finite-Lived Intangible Assets, Net [Abstract] | |
Schedule of intangible assets | Estimated December 31, September 30, Useful Lives 2020 2020 Technology 3 years $ 520,000 $ 520,000 Less: accumulated amortization (462,219 ) (418,886 ) Intangible assets, net $ 57,781 $ 101,114 |
6. LEASES (Tables)
6. LEASES (Tables) | 3 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Schedule of minimum future lease payments | Year $ 2021 $ 87,463 2022 17,917 Imputed interest (6,241 ) Total lease liability $ 99,139 |
7. CONVERTIBLE NOTES PAYABLE _2
7. CONVERTIBLE NOTES PAYABLE AND NOTE PAYABLE (Tables) | 3 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Summary of convertible notes | December 31, 2020 September 30, 2020 Convertible note- Clayton A. Struve $ 1,071,000 $ 1,071,000 Convertible note- Ronald P. Erickson and affiliates 1,184,066 1,184,066 2019 Convertible notes 4,242,490 4,242,490 Q1 2020 Convertible notes 520,000 520,000 Q2 2020 Convertible notes 195,000 195,000 Q3 2020 Convertible notes 4,924,500 4,924,500 Boustead fee refund (originally booked as contra debt) 50,000 50,000 Less conversions of 2019 and 2020 notes (4,762,490 ) (4,242,490 ) Less debt discount - BCF (1,237,832 ) (2,127,894 ) Less debt discount - warrants (595,743 ) (1,025,512 ) Less debt discount - warrants issued for services (546,433 ) (823,582 ) $ 5,044,558 $ 3,967,578 |
9. EQUITY (Tables)
9. EQUITY (Tables) | 3 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Summary of warrant activity | December 31, 2020 Weighted Average Exercise Shares Price Outstanding at beginning of period 20,016,367 $ 0.556 Issued 2,000,000 1.530 Exercised - - Forfeited - - Expired - - Outstanding at end of period 22,016,367 $ 0.644 Exercisable at end of period 22,016,367 |
Summary of the status of the warrants outstanding and exercisable | December 31, 2020 Weighted Weighted Weighted Average Average Average Number of Remaining Exercise Shares Exercise Warrants Life ( In Years) Price Exercisable Price 13,133,286 1.52 $ 0.250 13,133,286 $ 0.250 714,286 0.58 0.700 714,286 0.700 882,159 0.87 1.000 882,159 1.000 7,191,636 4.25 1.20-1.50 7,191,636 1.20-1.50 95,000 3.94 2.00-4.08 95,000 2.34-4.08 22,016,367 3.27 $ 0.644 22,016,367 $ 0.644 |
Weighted average assumptions relating to the valuation of the Company's warrants | Dividend yield 0% Expected life 3 years Expected volatility 140% Risk free interest rate 0.4% |
10. STOCK INCENTIVE PLANS (Tabl
10. STOCK INCENTIVE PLANS (Tables) | 3 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Stock option activity | Weighted Average Options Exercise Price $ Outstanding as of September 30, 2018 2,182,668 $ 1.698 $ 3,706,519 Granted 2,870,000 2.615 7,504,850 Exercised - - - Forfeitures (520,000 ) (3.906 ) (2,031,000 ) Outstanding as of September 30, 2019 4,532,668 2.025 9,180,369 Granted 3,085,000 1.142 3,522,400 Exercised (73,191 ) (0.250 ) (18,298 ) Forfeitures (2,739,477 ) (2.593 ) (7,103,921 ) Outstanding as of September 30, 2020 4,805,000 1.161 5,580,550 Granted 8,135,745 1.525 12,407,090 Exercised (3,750 ) (1.250 ) (4,688 ) Forfeitures - - - Outstanding as of December 31, 2020 12,936,995 $ 1.390 $ 17,982,952 |
Stock options outstanding and exercisable | The following table summarizes information about stock options outstanding and exercisable as of December 31, 2020: Weighted Weighted Weighted Average Average Average Range of Number Remaining Life Exercise Price Number Exercise Price Exercise Prices Outstanding In Years Outstanding Exercisable Exercisable $ 0.25 230,000 2.45 $ 0.250 129,375 $ 0.250 1.10-1.25 3,076,250 3.89 1.05 340,729 1.104 1.28-1.52 9,495,745 3.89 1.50 773,646 1.310 1.79-2.25 135,000 3.01 2.13 71,875 2.145 12,936,995 3.84 $ 1.390 1,315,625 $ 1.294 The following table summarizes information about Particle stock options outstanding and exercisable as of December 31, 2020: Weighted Weighted Average Weighted Average Range of Number Remaining Life Average Number Exercise Price Exercise Prices Outstanding In Years Exercise Price Exercisable Exercisable $ 0.10 5,100,000 4.51 $ 0.10 1,000,000 $ 0.10 0.80 200,000 4.77 $ 0.80 - - 5,300,000 4.52 $ 4.52 1,000,000 $ 0.10 |
13. SEGMENT REPORTING (Tables)
13. SEGMENT REPORTING (Tables) | 3 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Schedule of segment reporting | Segment Gross Operating Segment Segment Revenue Margin Profit (Loss) Assets Three Months Ended December 31, 2020 Development of the Bio-RFID™” and “ChromaID™” technologies $ - $ - $ (3,190 ) $ 3,158 Particle, Inc. technology - - (375 ) 66 TransTech distribution business - - - - Total segments $ - $ - $ (3,565 ) $ 3,224 Three Months Ended December 31, 2019 Development of the Bio-RFID™” and “ChromaID™” technologies $ - $ - $ (1,393 ) $ 2,077 TransTech distribution business 117 51 32 18 Total segments $ 117 $ 51 $ (1,361 ) $ 2,095 |
14. SUBSEQUENT EVENTS (Tables)
14. SUBSEQUENT EVENTS (Tables) | 3 Months Ended |
Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
Schedule of subsequent events | Warrant No./Class Issue Date No. Warrant Shares Exercise Price Original Expiration Date Amended Expiration Date Clayton Struve Warrant Series C Warrant W98 08-04-2016 1,785,715 $0.25 08-04-2021 08-04-2023 Clayton Struve Warrant Series F Warrant F-1 11-14-2016 187,500 $0.25 11-13-2021 11-13-2023 Clayton Struve Warrant Series F Warrant F-2 12-19-2016 187,500 $0.25 12-18-2021 12-18-2023 |
2. GOING CONCERN (Details Narra
2. GOING CONCERN (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Exercise Price 13.500 | ||||
Net loss | $ (5,299,331) | $ (3,015,013) | $ (13,562,641) | $ (7,612,316) |
Net cash used in operating activities | (1,421,000) | $ (824,325) | (3,913,803) | $ (3,104,035) |
Accumulated deficit | $ (61,265,612) | $ (55,966,281) |
3. SIGNIFICANT ACCOUNTING POL_4
3. SIGNIFICANT ACCOUNTING POLICIES: ADOPTION OF ACCOUNTING STANDARDS (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2020 | |
Proceeds from issuance of SAFE | $ 55,000 | $ 0 | |
Simple Agreement for Future Equity ("SAFE") | |||
Balance, beginning | 785,000 | $ 0 | $ 0 |
Proceeds from issuance of SAFE | 55,000 | 785,000 | |
Fair value adjustment | 0 | 0 | |
Balance, ending | $ 840,000 | $ 785,000 |
3. SIGNIFICANT ACCOUNTING POL_5
3. SIGNIFICANT ACCOUNTING POLICIES: ADOPTION OF ACCOUNTING STANDARDS (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Uninsured deposits | $ 2,677,234 | |||
Research and development expense | 966,861 | $ 491,138 | $ 2,033,726 | $ 1,257,872 |
Advertising and marketing costs | 118,750 | $ 0 | ||
Money market accounts | $ 2,853,419 | $ 4,252,959 | ||
Minimum | ||||
Estimated useful lives of assets | 2 years | |||
Maximum | ||||
Estimated useful lives of assets | 5 years | |||
Leasehold Improvements | ||||
Estimated useful lives of assets | 5 years |
4. FIXED ASSETS (Details)
4. FIXED ASSETS (Details) - USD ($) | Dec. 31, 2020 | Sep. 30, 2020 |
Property, Plant and Equipment [Abstract] | ||
Machinery and equipment (2-3 years) | $ 361,020 | $ 355,272 |
Leasehold improvements (5 years) | 3,612 | 3,612 |
Furniture and fixtures (5 years) | 26,855 | 26,855 |
Software and websites | 0 | 0 |
Less: accumulated depreciation | (278,044) | (257,068) |
Property and equipment, net | $ 117,004 | $ 128,671 |
4. FIXED ASSETS (Details Narrat
4. FIXED ASSETS (Details Narrative) - USD ($) | 3 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 21,300 | $ 16,983 |
5. INTANGIBLE ASSETS (Details)
5. INTANGIBLE ASSETS (Details) - Technology - USD ($) | Dec. 31, 2020 | Sep. 30, 2020 |
Technology (3 years) | $ 520,000 | $ 520,000 |
Less: accumulated amortization | (462,219) | (418,886) |
Intangible assets, net | $ 57,781 | $ 101,114 |
5. INTANGIBLE ASSETS (Details N
5. INTANGIBLE ASSETS (Details Narrative) - USD ($) | 3 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Finite-Lived Intangible Assets, Net [Abstract] | ||
Amortization expense | $ 43,333 | $ 43,333 |
6. LEASES (Details)
6. LEASES (Details) - USD ($) | Dec. 31, 2020 | Sep. 30, 2020 |
Leases [Abstract] | ||
2021 | $ 87,463 | |
2022 | 17,917 | |
Imputed interest | (6,241) | |
Total lease liability | $ 99,139 | $ 132,035 |
6. LEASES (Details Narrative)
6. LEASES (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Sep. 30, 2020 | |
Leases [Abstract] | ||
Right-of-use assets | $ 96,672 | $ 129,003 |
Operating lease liabilities | 99,139 | 132,035 |
Lease cost | 37,612 | $ 136,718 |
Cash paid for ROU operating lease liability | $ 34,813 | |
Weighted-average remaining lease term | 1 year 2 months 12 days | |
Weighted-average discount rate | 7.00% |
7. CONVERTIBLE NOTES PAYABLE _3
7. CONVERTIBLE NOTES PAYABLE AND NOTE PAYABLE (Details) - USD ($) | Dec. 31, 2020 | Sep. 30, 2020 |
less conversions | $ (4,762,490) | $ (4,242,490) |
less debt discount - beneficial conversion feature | (1,237,832) | (2,127,894) |
less debt discount - warrants | (595,743) | (1,025,512) |
less debt discount - warrants issued for services related to debt offering | (546,433) | (823,582) |
Convertible notes, net | 5,044,558 | 3,967,578 |
Convertible Note - Clayton A. Struve | ||
Convertible notes, gross | 1,071,000 | 1,071,000 |
Convertible Note - Ronald P. Erickson and Affiliates | ||
Convertible notes, gross | 1,184,066 | 1,184,066 |
2019 Convertible Notes | ||
Convertible notes, gross | 4,242,490 | 4,242,490 |
Q1 2020 Convertible Notes | ||
Convertible notes, gross | 520,000 | 520,000 |
Q2 2020 Convertible Notes | ||
Convertible notes, gross | 195,000 | 195,000 |
Q3 2020 Convertible Notes | ||
Convertible notes, gross | 4,924,500 | 4,924,500 |
Bousted Fee Refund (Originally Booked as Contra Debt) | ||
Convertible notes, gross | $ 50,000 | $ 50,000 |
7. CONVERTIBLE NOTES PAYABLE _4
7. CONVERTIBLE NOTES PAYABLE AND NOTE PAYABLE (Details Narrative) - USD ($) | 3 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2020 | |
Amortization of debt discount | $ 1,596,980 | $ 1,567,047 | |
Convertible Note - Clayton A. Struve | |||
Accrued interest | 73,452 | $ 71,562 | |
Convertible Note - Ronald P. Erickson and Affiliates | |||
Accrued interest | $ 163,109 | $ 145,202 |
9. EQUITY (Details)
9. EQUITY (Details) | 3 Months Ended |
Dec. 31, 2020$ / sharesshares | |
Shares | |
Outstanding at beginning of period | 20,016,367 |
Issued | 2,000,000 |
Exercised | 0 |
Forfeited | 0 |
Expired | 0 |
Outstanding at end of period | 22,016,367 |
Exercisable at end of period | 22,016,367 |
Weighted Average Exercise Price: | |
Outstanding at beginning of period | $ / shares | $ .556 |
Issued | $ / shares | 1.530 |
Exercised | $ / shares | (.000) |
Forfeited | $ / shares | .000 |
Expired | $ / shares | (.000) |
Outstanding at end of period | $ / shares | $ .644 |
9. EQUITY (Details 1)
9. EQUITY (Details 1) | 3 Months Ended |
Dec. 31, 2020$ / sharesshares | |
Number of warrants | shares | 22,016,367 |
Weighted average remaining life (years) | 3 years 3 months 7 days |
Weighted average exercise price, outstanding | $ .644 |
Shares exercisable | shares | 22,016,367 |
Weighted average exercise price, exercisable | $ 0.644 |
Warrant One | |
Number of warrants | shares | 13,133,286 |
Weighted average remaining life (years) | 1 year 6 months 7 days |
Weighted average exercise price, outstanding | $ .250 |
Shares exercisable | shares | 13,133,286 |
Weighted average exercise price, exercisable | $ 0.250 |
Warrant Two | |
Number of warrants | shares | 714,286 |
Weighted average remaining life (years) | 6 months 29 days |
Weighted average exercise price, outstanding | $ .700 |
Shares exercisable | shares | 714,286 |
Weighted average exercise price, exercisable | $ 0.700 |
Warrant Three | |
Number of warrants | shares | 882,159 |
Weighted average remaining life (years) | 10 months 13 days |
Weighted average exercise price, outstanding | $ 1 |
Shares exercisable | shares | 882,159 |
Weighted average exercise price, exercisable | $ 1 |
Warrant Four | |
Number of warrants | shares | 7,191,636 |
Weighted average remaining life (years) | 4 years 3 months |
Shares exercisable | shares | 7,191,636 |
Warrant Four | Minimum | |
Weighted average exercise price, outstanding | $ 1.200 |
Weighted average exercise price, exercisable | 1.200 |
Warrant Four | Maximum | |
Weighted average exercise price, outstanding | 1.500 |
Weighted average exercise price, exercisable | $ 1.500 |
Warrant Five | |
Number of warrants | shares | 95,000 |
Weighted average remaining life (years) | 3 years 11 months 8 days |
Shares exercisable | shares | 95,000 |
Warrant Five | Minimum | |
Weighted average exercise price, outstanding | $ 2 |
Weighted average exercise price, exercisable | 2.340 |
Warrant Five | Maximum | |
Weighted average exercise price, outstanding | 4.080 |
Weighted average exercise price, exercisable | $ 4.080 |
9. EQUITY (Details 2)
9. EQUITY (Details 2) - Warrants | 3 Months Ended |
Dec. 31, 2020 | |
Dividend yield | 0.00% |
Expected life | 3 years |
Expected volatility | 140.00% |
Risk free interest rate | 0.40% |
9. EQUITY (Details Narrative)
9. EQUITY (Details Narrative) | Dec. 31, 2020USD ($)shares |
Equity [Abstract] | |
Warrants vested | shares | 22,016,367 |
Intrinsic value | $ | $ 36,904,487 |
10. STOCK INCENTIVE PLANS (Deta
10. STOCK INCENTIVE PLANS (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | |
Shares: | |||
Outstanding at beginning of period | 20,016,367 | ||
Shares granted | 2,000,000 | ||
Shares exercised | 0 | ||
Shares forfeited | 0 | ||
Outstanding at end of period | 22,016,367 | 20,016,367 | |
Weighted Average Exercise Price: | |||
Outstanding at beginning of period | $ .556 | ||
Shares granted | 1.530 | ||
Shares exercised | (.000) | ||
Shares forfeited | (.000) | ||
Outstanding at end of period | $ .644 | $ .556 | |
Aggregate Intrinsic Value | |||
Outstanding at end of period | $ 36,904,487 | ||
Stock Options | |||
Shares: | |||
Outstanding at beginning of period | 4,805,000 | 4,532,668 | 2,182,668 |
Shares granted | 8,135,745 | 3,085,000 | 2,870,000 |
Shares exercised | (3,750) | (73,191) | 0 |
Shares forfeited | 0 | (2,739,477) | (50,000) |
Outstanding at end of period | 12,936,995 | 4,805,000 | 4,532,668 |
Weighted Average Exercise Price: | |||
Outstanding at beginning of period | $ 1.161 | $ 2.025 | $ 1.698 |
Shares granted | 1.525 | 1.142 | 2.615 |
Shares exercised | (1.250) | (0.250) | 0 |
Shares forfeited | (.000) | (2.593) | (3.906) |
Outstanding at end of period | $ 1.390 | $ 1.161 | $ 2.025 |
Aggregate Intrinsic Value | |||
Outstanding at beginning of period | $ 5,580,550 | $ 9,180,369 | $ 3,706,519 |
Shares granted | $ 12,407,090 | $ 3,522,400 | $ 7,504,850 |
Shares exercised | $ (4,688) | $ (18,298) | $ 0 |
Shares forfeited | $ 0 | $ (7,103,921) | $ (2,031,000) |
Outstanding at end of period | $ 17,982,952 | $ 5,580,550 | $ 9,180,369 |
10. STOCK INCENTIVE PLANS (De_2
10. STOCK INCENTIVE PLANS (Details 1) | 3 Months Ended |
Dec. 31, 2020$ / sharesshares | |
Number of outstanding stock options | shares | 22,016,367 |
Weighted average remaining life (years) | 3 years 3 months 7 days |
Weighted average exercise price exerciseable | $ .644 |
Number exercisable | shares | 22,016,367 |
Particle, Inc. | |
Number of outstanding stock options | shares | 5,300,000 |
Weighted average remaining life (years) | 4 years 6 months 7 days |
Weighted average exercise price exerciseable | $ 4.52 |
Number exercisable | shares | 1,000,000 |
Weighted average exercise price exerciseable | $ .10 |
Stock Option 1 | |
Range of exercise prices | $ .250 |
Number of outstanding stock options | shares | 230,000 |
Weighted average remaining life (years) | 2 years 5 months 12 days |
Weighted average exercise price exerciseable | $ .250 |
Number exercisable | shares | 129,375 |
Weighted average exercise price exerciseable | $ .250 |
Stock Option 1 | Particle, Inc. | |
Range of exercise prices | $ .10 |
Number of outstanding stock options | shares | 5,100,000 |
Weighted average remaining life (years) | 4 years 6 months 4 days |
Weighted average exercise price exerciseable | $ .10 |
Number exercisable | shares | 1,000,000 |
Weighted average exercise price exerciseable | $ .10 |
Stock Option 2 | |
Number of outstanding stock options | shares | 3,076,250 |
Weighted average remaining life (years) | 3 years 10 months 20 days |
Weighted average exercise price exerciseable | $ 1.050 |
Number exercisable | shares | 340,729 |
Weighted average exercise price exerciseable | $ 1.104 |
Stock Option 2 | Particle, Inc. | |
Range of exercise prices | $ .80 |
Number of outstanding stock options | shares | 200,000 |
Weighted average remaining life (years) | 4 years 9 months 7 days |
Weighted average exercise price exerciseable | $ .80 |
Number exercisable | shares | 0 |
Weighted average exercise price exerciseable | $ .00 |
Stock Option 2 | Minimum | |
Range of exercise prices | 1.100 |
Stock Option 2 | Maximum | |
Range of exercise prices | $ 1.250 |
Stock Option 3 | |
Number of outstanding stock options | shares | 9,495,745 |
Weighted average remaining life (years) | 3 years 10 months 20 days |
Weighted average exercise price exerciseable | $ 1.500 |
Number exercisable | shares | 773,646 |
Weighted average exercise price exerciseable | $ 1.310 |
Stock Option 3 | Minimum | |
Range of exercise prices | 1.280 |
Stock Option 3 | Maximum | |
Range of exercise prices | $ 1.520 |
Stock Option 4 | |
Number of outstanding stock options | shares | 135,000 |
Weighted average remaining life (years) | 3 years 4 days |
Weighted average exercise price exerciseable | $ 2.130 |
Number exercisable | shares | 71,875 |
Weighted average exercise price exerciseable | $ 2.145 |
Stock Option 4 | Minimum | |
Range of exercise prices | 1.790 |
Stock Option 4 | Maximum | |
Range of exercise prices | $ 2.250 |
Stock Options | |
Number of outstanding stock options | shares | 12,936,995 |
Weighted average remaining life (years) | 3 years 10 months 2 days |
Weighted average exercise price exerciseable | $ 1.390 |
Number exercisable | shares | 1,315,625 |
Weighted average exercise price exerciseable | $ 1.294 |
10. STOCK INCENTIVE PLANS (De_3
10. STOCK INCENTIVE PLANS (Details Narrative) - USD ($) | 3 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Options to purchase common stock under 2011 Stock Incentive Plan | 22,016,367 | |
Average exercise price under 2011 Stock Incentive Plan | $ 0.644 | |
Compensation expense | $ 119,483 | $ 175,442 |
Unrecognized compensation costs | $ 505,996 | |
Period for recognition | 3 years 10 months 2 days | |
Stock options granted | 12,936,955 | |
Aggregate intrinsic value | $ 11,794,416 | |
Particle, Inc. | ||
Options to purchase common stock under 2011 Stock Incentive Plan | 5,300,000 | |
Compensation expense | $ 55,959 | $ 0 |
Unrecognized compensation costs | $ 802,445 | |
Period for recognition | 4 years 6 months 7 days | |
Stock options granted | 1,000,000 | |
Aggregate intrinsic value | $ 673,585 | |
2011 Stock Incentive Plan | ||
Options to purchase common stock under 2011 Stock Incentive Plan | 12,936,995 | |
Average exercise price under 2011 Stock Incentive Plan | $ 1.390 |
11. OTHER SIGNIFICANT TRANSAC_2
11. OTHER SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES (Details narrative) - USD ($) | 3 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Sep. 30, 2020 | |
Chief Executive Officer | ||
Accrued compensation, travel and interest | $ 619,218 | $ 597,177 |
13. SEGMENT REPORTING (Details)
13. SEGMENT REPORTING (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Revenue | $ 0 | $ 117 |
Gross margin | 0 | 51 |
Segment operating profit (loss) | (3,565) | (1,361) |
Segment assets | 3,224 | 2,095 |
Development of the Bio-RFID and ChromaID Technologies | ||
Revenue | 0 | 0 |
Gross margin | 0 | 0 |
Segment operating profit (loss) | (3,190) | (1,393) |
Segment assets | 3,158 | 2,077 |
Particle, Inc. Technology | ||
Revenue | 0 | |
Gross margin | 0 | |
Segment operating profit (loss) | (375) | |
Segment assets | 66 | |
TransTech Distribution Business | ||
Revenue | 0 | 117 |
Gross margin | 0 | 51 |
Segment operating profit (loss) | 0 | 32 |
Segment assets | $ 0 | $ 18 |
13. SEGMENT REPORTING (Details
13. SEGMENT REPORTING (Details Narrative) - USD ($) | 3 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Segment Reporting [Abstract] | ||
Non-cash expenses | $ 3,648,181 | $ 2,067,718 |
14. SUBSEQUENT EVENTS (Details)
14. SUBSEQUENT EVENTS (Details) | Jan. 05, 2021$ / sharesshares |
Clayton Struve Warrant: Series C Warrant W98 | |
Issue date | Aug. 4, 2016 |
Number of warrant shares | shares | 1,785,715 |
Exercise price | $ / shares | $ .25 |
Original expiration date | Aug. 4, 2021 |
Amended expiration date | Aug. 4, 2023 |
Clayton Struve Warrant: Series F Warrant F-1 | |
Issue date | Nov. 14, 2016 |
Number of warrant shares | shares | 187,500 |
Exercise price | $ / shares | $ .25 |
Original expiration date | Nov. 13, 2021 |
Amended expiration date | Nov. 13, 2023 |
Clayton Struve Warrant: Series F Warrant F-2 | |
Issue date | Dec. 19, 2016 |
Number of warrant shares | shares | 187,500 |
Exercise price | $ / shares | $ .25 |
Original expiration date | Dec. 18, 2021 |
Amended expiration date | Dec. 18, 2023 |