Cover
Cover | 6 Months Ended |
Mar. 31, 2022 | |
Cover [Abstract] | |
Entity Registrant Name | Know Labs, Inc. |
Entity Central Index Key | 0001074828 |
Document Type | S-1 |
Amendment Flag | false |
Entity Small Business | true |
Entity Emerging Growth Company | false |
Entity Filer Category | Non-accelerated Filer |
Entity Incorporation State Country Code | NV |
Entity Tax Identification Number | 90-0273142 |
Entity Address Address Line 1 | 500 Union Street |
Entity Address Address Line 2 | Suite 810 |
Entity Address City Or Town | Seattle |
Entity Address State Or Province | WA |
Entity Address Postal Zip Code | 98101 |
City Area Code | 206 |
Local Phone Number | 903-1351 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Mar. 31, 2022 | Sep. 30, 2021 | Sep. 30, 2020 |
CURRENT ASSETS: | |||
Cash and cash equivalents | $ 11,187,073 | $ 12,258,218 | $ 4,298,179 |
Accounts receivable- related party | 119,210 | 0 | |
Total current assets | 11,306,283 | 12,258,218 | 4,298,179 |
PROPERTY AND EQUIPMENT, NET | 1,037,392 | 328,504 | 128,671 |
OTHER ASSETS | |||
Other assets | 13,767 | 13,767 | 25,180 |
Intangible assets | 0 | 101,114 | |
Operating lease right of use asset | 305,462 | 289,002 | 129,003 |
TOTAL ASSETS | 12,662,904 | 12,889,491 | 4,682,147 |
CURRENT LIABILITIES: | |||
Accounts payable - trade | 411,865 | 419,093 | 493,497 |
Accrued expenses | 265,859 | 893,137 | 401,178 |
Accrued expenses - related parties | 2,273,286 | 421,599 | 591,600 |
Notes payable- PPP loans, current | 431,803 | 0 | |
Convertible notes payable, net | 2,255,066 | 9,191,155 | 3,967,578 |
Simple Agreements for Future Equity | 0 | 785,000 | |
Current portion of operating lease right of use liability | 157,166 | 112,371 | 108,779 |
Total current liabilities | 5,363,242 | 11,037,355 | 6,347,632 |
NON-CURRENT LIABILITIES: | |||
Notes payable- PPP loans | 431,803 | 431,803 | 226,170 |
Operating lease right of use liability, net of current portion | 138,632 | 178,170 | 23,256 |
Total non-current liabilities | 570,435 | 609,973 | 249,426 |
STOCKHOLDERS' EQUITY (DEFICIT) | |||
Preferred stock - $0.001 par value, 5,000,000 shares authorized, 0 shares issued and outstanding at 9/30/2021 and 9/30/2020 respectively | 0 | 0 | |
Common stock - $0.001 par value, 200,000,000 shares authorized, 43,737,772 and 35,166,551 shares issued and outstanding at 3/31/2022 and 9/30/2021, respectively | 43,739 | 35,168 | 24,807 |
Additional paid in capital | 99,506,534 | 82,530,684 | 54,023,758 |
Accumulated deficit | (92,823,851) | (81,326,494) | (55,966,281) |
Total stockholders' equity | 6,729,227 | 1,242,163 | (1,914,911) |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 12,662,904 | 12,889,491 | 4,682,147 |
Series C Convertible Preferred Stock [Member] | |||
STOCKHOLDERS' EQUITY (DEFICIT) | |||
Preferred stock - $0.001 par value, 5,000,000 shares authorized, 0 shares issued and outstanding at 9/30/2021 and 9/30/2020 respectively | 1,790 | 1,790 | |
Series D Convertible Preferred Stock | |||
STOCKHOLDERS' EQUITY (DEFICIT) | |||
Preferred stock - $0.001 par value, 5,000,000 shares authorized, 0 shares issued and outstanding at 9/30/2021 and 9/30/2020 respectively | 1,015 | $ 1,015 | |
Series C Preferred Stock [Member] | |||
STOCKHOLDERS' EQUITY (DEFICIT) | |||
Preferred stock - $0.001 par value, 5,000,000 shares authorized, 0 shares issued and outstanding at 9/30/2021 and 9/30/2020 respectively | 1,790 | 1,790 | |
Series D Preferred Stock [Member] | |||
STOCKHOLDERS' EQUITY (DEFICIT) | |||
Preferred stock - $0.001 par value, 5,000,000 shares authorized, 0 shares issued and outstanding at 9/30/2021 and 9/30/2020 respectively | $ 1,015 | $ 1,015 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2022 | Sep. 30, 2021 | Sep. 30, 2020 |
Preferred stock shares authorized | 5,000,000 | 5,000,000 | 5,000,000 |
STOCKHOLDERS' DEFICIT | |||
Preferred stock shares issued | 0 | 0 | 0 |
Preferred stock shares outstanding | 0 | 0 | 0 |
Common stock par value | $ 0.001 | $ 0.001 | $ 0.001 |
Common stock shares authorized | 200,000,000 | 100,000,000 | 100,000,000 |
Common stock shares issued | 43,737,772 | 35,166,551 | 24,804,874 |
Common stock shares outstanding | 43,737,772 | 35,166,551 | 24,804,874 |
Preferred stock par value | $ 0.001 | $ 0.001 | $ 0.001 |
Convertible Preferred Stock Series C [Member] | |||
Preferred stock shares authorized | 1,785,715 | 1,785,715 | |
STOCKHOLDERS' DEFICIT | |||
Preferred stock shares issued | 1,785,715 | 1,785,715 | |
Preferred stock shares outstanding | 1,785,715 | 1,785,715 | |
Preferred stock par value | $ 0.001 | $ 0.001 | |
Series C Convertible Preferred Stock [Member] | |||
Preferred stock shares authorized | 1,785,714 | 1,785,715 | 1,785,714 |
STOCKHOLDERS' DEFICIT | |||
Preferred stock shares issued | 1,785,715 | 1,785,715 | |
Preferred stock shares outstanding | 1,785,715 | 1,785,715 | |
Preferred stock par value | $ 0.001 | $ 0.001 | |
Series D Convertible Preferred Stock | |||
Preferred stock shares authorized | 1,016,014 | 1,016,014 | |
STOCKHOLDERS' DEFICIT | |||
Preferred stock shares issued | 1,016,004 | 1,016,004 | |
Preferred stock shares outstanding | 1,016,004 | 1,016,004 | |
Preferred stock par value | $ 0.001 | $ 0.001 | |
Convertible Preferred Stock D [Member] | |||
Preferred stock shares authorized | 1,016,014 | 1,016,014 | |
STOCKHOLDERS' DEFICIT | |||
Preferred stock shares issued | 1,016,004 | 1,016,004 | |
Preferred stock shares outstanding | 1,016,004 | 1,016,004 | |
Preferred stock par value | $ 0.001 | $ 0.001 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | |
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||
REVENUE | $ 8,687 | $ 0 | $ 4,360,087 | $ 0 | $ 0 | $ 121,939 |
COST OF SALES | 0 | 69,726 | ||||
GROSS PROFIT | 0 | 52,213 | ||||
OPERATING EXPENSES- | ||||||
RESEARCH AND DEVELOPMENT EXPENSES | 1,248,707 | 1,258,678 | 2,134,459 | 2,225,539 | 3,969,972 | 2,033,726 |
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 1,448,227 | 1,342,644 | 2,665,174 | 3,939,864 | 6,476,176 | 4,844,415 |
SELLING AND TRANSACTIONAL COSTS FOR DIGITAL ASSETS | 154,502 | 0 | 3,272,862 | 0 | ||
Total operating expenses | 2,851,436 | 2,601,322 | 8,072,495 | 6,165,403 | ||
OPERATING LOSS | (2,842,749) | (2,601,322) | (3,712,408) | (6,165,403) | (10,446,148) | (6,825,928) |
OTHER INCOME (EXPENSE): | ||||||
Interest expense | (3,297,989) | (2,772,296) | (7,784,949) | (4,507,546) | (14,914,065) | (6,094,682) |
Other income | 0 | 65,769 | ||||
(Loss) on debt settlements | 0 | (707,800) | ||||
Total other (expense), net | (3,297,989) | (2,772,296) | (7,784,949) | (4,507,546) | (14,914,065) | (6,736,713) |
LOSS BEFORE INCOME TAXES | (6,140,738) | (5,373,618) | (11,497,357) | (10,672,949) | (25,360,213) | (13,562,641) |
Income tax expense | 0 | 0 | 0 | 0 | 0 | 0 |
NET LOSS | $ (6,140,738) | $ (5,373,618) | $ (11,497,357) | $ (10,672,949) | $ (25,360,213) | $ (13,562,641) |
Basic and diluted loss per share | $ (0.16) | $ (0.20) | $ (0.31) | $ (0.41) | $ (0.86) | $ (0.62) |
Weighted average shares of common stock outstanding- basic and diluted | 37,872,406 | 26,710,585 | 36,655,905 | 25,951,403 | 29,370,596 | 21,791,058 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' (DEFICIT) EQUITY - USD ($) | Total | Convertible Preferred Stock Series C [Member] | Series D Convertible Preferred Stock [Member] | Series D Convertible Preferred Stock | Series C Convertible Preferred Stock [Member] | Common Stock | Additional Paid-In Capital | Retained Earnings (Accumulated Deficit) |
Balance, shares at Sep. 30, 2019 | 1,016,004 | 1,785,715 | 18,366,178 | |||||
Balance, amount at Sep. 30, 2019 | $ (3,297,290) | $ 1,015 | $ 1,790 | $ 18,366 | $ 39,085,179 | $ (42,403,640) | ||
Stock compensation expense - employee options | 1,702,085 | 0 | 0 | $ 0 | 1,702,085 | 0 | ||
Stock option exercise, shares | 73,191 | |||||||
Stock option exercise, amount | $ 0 | 0 | 0 | $ 73 | $ (73) | 0 | ||
Conversion of debt offering and accrued interest (Note 7), shares | 975,326 | 4,581,917 | 975,326 | |||||
Conversion of debt offering and accrued interest (Note 7), amount | $ 4,596,537 | 0 | 0 | $ 4,585 | $ 4,591,952 | 0 | ||
Beneficial conversion feature (Note 7) | 3,766,074 | 0 | 0 | 0 | 3,766,074 | 0 | ||
Issuance of warrants to debt holders (Note 7) | 1,824,998 | 0 | 0 | $ 0 | 1,824,998 | 0 | ||
Issuance of common stock for services, shares | 550,000 | |||||||
Issuance of common stock for services, amount | 1,045,000 | 0 | $ 550 | 1,044,450 | 0 | |||
Issuance of common stock for exercise of warrants, shares | 733,588 | |||||||
Issuance of common stock for exercise of warrants, amount | 85,000 | 0 | 0 | $ 733 | 84,267 | 0 | ||
Issuance of shares related to Settlement and Mutual Release and Subscription Agreements, shares | 500,000 | |||||||
Issuance of shares related to Settlement and Mutual Release and Subscription Agreements, amount | 950,000 | 0 | 0 | $ 500 | 949,500 | 0 | ||
Net loss | (13,562,641) | $ 0 | $ 0 | $ 0 | 0 | (13,562,641) | ||
Balance, shares at Sep. 30, 2020 | 1,785,715 | 1,016,004 | 1,016,004 | 1,785,715 | 24,804,874 | |||
Balance, amount at Sep. 30, 2020 | (1,914,911) | $ 1,790 | $ 1,015 | $ 1,015 | $ 1,790 | $ 24,807 | 54,023,758 | (55,966,281) |
Stock compensation expense - employee options | 175,442 | 0 | 0 | $ 0 | 175,442 | 0 | ||
Conversion of debt offering and accrued interest (Note 7), shares | 561,600 | |||||||
Conversion of debt offering and accrued interest (Note 7), amount | 561,600 | 0 | 0 | $ 562 | 561,038 | 0 | ||
Issuance of common stock for exercise of warrants, shares | 3,750 | |||||||
Issuance of common stock for exercise of warrants, amount | 4,688 | 0 | 0 | $ 4 | 4,684 | 0 | ||
Net loss | (5,299,331) | 0 | 0 | 0 | 0 | (5,299,331) | ||
Issuance of warrant for services to related party | 1,811,691 | $ 0 | $ 0 | $ 0 | 1,811,691 | 0 | ||
Balance, shares at Dec. 31, 2020 | 1,785,715 | 1,016,004 | 25,370,224 | |||||
Balance, amount at Dec. 31, 2020 | (4,660,822) | $ 1,790 | $ 1,015 | $ 25,372 | 56,576,613 | (61,265,612) | ||
Balance, shares at Sep. 30, 2020 | 1,785,715 | 1,016,004 | 1,016,004 | 1,785,715 | 24,804,874 | |||
Balance, amount at Sep. 30, 2020 | (1,914,911) | $ 1,790 | $ 1,015 | $ 1,015 | $ 1,790 | $ 24,807 | 54,023,758 | (55,966,281) |
Beneficial conversion feature (Note 7) | 9,769,683 | |||||||
Net loss | (10,672,949) | |||||||
Balance, shares at Mar. 31, 2021 | 1,785,715 | 1,016,004 | 28,257,467 | |||||
Balance, amount at Mar. 31, 2021 | 7,413,756 | $ 1,790 | $ 1,015 | $ 28,258 | 74,021,923 | (66,639,230) | ||
Balance, shares at Sep. 30, 2020 | 1,785,715 | 1,016,004 | 1,016,004 | 1,785,715 | 24,804,874 | |||
Balance, amount at Sep. 30, 2020 | (1,914,911) | $ 1,790 | $ 1,015 | $ 1,015 | $ 1,790 | $ 24,807 | 54,023,758 | (55,966,281) |
Stock compensation expense - employee options | 1,028,522 | 0 | 0 | $ 0 | 1,028,522 | 0 | ||
Conversion of debt offering and accrued interest (Note 7), shares | 6,090,660 | |||||||
Conversion of debt offering and accrued interest (Note 7), amount | 6,098,058 | 0 | 0 | $ 6,091 | 6,091,968 | 0 | ||
Beneficial conversion feature (Note 7) | 9,769,683 | 0 | 0 | 0 | 9,769,683 | 0 | ||
Issuance of warrants to debt holders (Note 7) | 4,439,317 | 0 | 0 | $ 0 | 4,439,317 | 0 | ||
Issuance of common stock for services, shares | 97,000 | |||||||
Issuance of common stock for services, amount | 202,820 | 0 | 0 | $ 97 | 202,723 | 0 | ||
Issuance of common stock for exercise of warrants, shares | 3,676,542 | |||||||
Issuance of common stock for exercise of warrants, amount | 1,313,203 | 0 | 0 | $ 3,675 | 1,309,528 | 0 | ||
Net loss | (25,360,213) | 0 | 0 | 0 | 0 | (25,360,213) | ||
Issuance of warrant for services | 2,547,436 | 0 | 0 | 0 | 2,547,436 | 0 | ||
Issuance of warrants for services related to debt offering (Note 7), amount | 1,667,281 | 0 | 0 | $ 0 | 1,667,281 | 0 | ||
Issuance of common stock for stock option exercises, shares | 16,875 | |||||||
Issuance of common stock for stock option exercises, amount | 23,344 | 0 | 0 | $ 17 | 23,327 | 0 | ||
Issuance of shares and warrants for conversion of Simple Agreements for Future Equity, shares | 480,600 | |||||||
Issuance of shares and warrants for conversion of Simple Agreements for Future Equity, amount | 1,427,622 | $ 0 | $ 0 | $ 481 | 1,427,141 | 0 | ||
Balance, shares at Sep. 30, 2021 | 1,785,715 | 1,016,004 | 1,016,004 | 1,785,715 | 35,166,551 | |||
Balance, amount at Sep. 30, 2021 | 1,242,163 | $ 1,790 | $ 1,015 | $ 1,015 | $ 1,790 | $ 35,168 | 82,530,684 | (81,326,494) |
Balance, shares at Dec. 31, 2020 | 1,785,715 | 1,016,004 | 25,370,224 | |||||
Balance, amount at Dec. 31, 2020 | (4,660,822) | $ 1,790 | $ 1,015 | $ 25,372 | 56,576,613 | (61,265,612) | ||
Stock compensation expense - employee options | 127,407 | 0 | 0 | $ 0 | 127,407 | 0 | ||
Conversion of debt offering and accrued interest (Note 7), shares | 210,600 | |||||||
Conversion of debt offering and accrued interest (Note 7), amount | 210,606 | 0 | 0 | $ 211 | 210,395 | 0 | ||
Beneficial conversion feature (Note 7) | 9,769,683 | 0 | $ 0 | 9,769,683 | 0 | |||
Issuance of common stock for exercise of warrants, shares | 2,579,643 | |||||||
Issuance of common stock for exercise of warrants, amount | 648,516 | 0 | 0 | $ 2,578 | 645,938 | 0 | ||
Net loss | (5,373,618) | 0 | 0 | 0 | 0 | (5,373,618) | ||
Issuance of warrant for services to related party | 382,566 | 0 | 0 | 0 | 382,566 | 0 | ||
Issuance of warrants to debt holders (Note 7) | 4,439,317 | 0 | 0 | 0 | 4,439,317 | 0 | ||
Issuance of warrants for services related to debt offering (Note 7) | 1,667,281 | 0 | 0 | $ 0 | 1,667,281 | 0 | ||
Issuance of common stock for services, shares | 97,000 | |||||||
Issuance of common stock for services, amount | 202,820 | $ 0 | $ 0 | $ 97 | 202,723 | 0 | ||
Balance, shares at Mar. 31, 2021 | 1,785,715 | 1,016,004 | 28,257,467 | |||||
Balance, amount at Mar. 31, 2021 | 7,413,756 | $ 1,790 | $ 1,015 | $ 28,258 | 74,021,923 | (66,639,230) | ||
Balance, shares at Sep. 30, 2021 | 1,785,715 | 1,016,004 | 1,016,004 | 1,785,715 | 35,166,551 | |||
Balance, amount at Sep. 30, 2021 | 1,242,163 | $ 1,790 | $ 1,015 | $ 1,015 | $ 1,790 | $ 35,168 | 82,530,684 | (81,326,494) |
Stock compensation expense - employee options | 204,170 | 0 | 0 | $ 0 | 204,170 | 0 | ||
Issuance of common stock for exercise of warrants, shares | 801,486 | |||||||
Issuance of common stock for exercise of warrants, amount | 766,486 | 0 | 0 | $ 801 | 765,685 | 0 | ||
Net loss | (5,356,619) | 0 | 0 | $ 0 | 0 | (5,356,619) | ||
Issuance of common stock for stock option exercises, shares | 1,875 | |||||||
Issuance of common stock for stock option exercises, amount | 2,344 | $ 0 | $ 0 | $ 2 | 2,342 | 0 | ||
Balance, shares at Dec. 31, 2021 | 1,785,715 | 1,016,004 | 35,969,912 | |||||
Balance, amount at Dec. 31, 2021 | (3,141,456) | $ 1,790 | $ 1,015 | $ 35,971 | 83,502,881 | (86,683,113) | ||
Balance, shares at Sep. 30, 2021 | 1,785,715 | 1,016,004 | 1,016,004 | 1,785,715 | 35,166,551 | |||
Balance, amount at Sep. 30, 2021 | 1,242,163 | $ 1,790 | $ 1,015 | $ 1,015 | $ 1,790 | $ 35,168 | 82,530,684 | (81,326,494) |
Beneficial conversion feature (Note 7) | 0 | |||||||
Net loss | (11,497,357) | |||||||
Balance, shares at Mar. 31, 2022 | 1,785,715 | 1,016,004 | 43,737,772 | |||||
Balance, amount at Mar. 31, 2022 | 6,729,227 | $ 1,790 | $ 1,015 | $ 43,739 | 99,506,534 | (92,823,851) | ||
Balance, shares at Dec. 31, 2021 | 1,785,715 | 1,016,004 | 35,969,912 | |||||
Balance, amount at Dec. 31, 2021 | (3,141,456) | $ 1,790 | $ 1,015 | $ 35,971 | 83,502,881 | (86,683,113) | ||
Stock compensation expense - employee options | 432,481 | 0 | 0 | $ 0 | 432,481 | 0 | ||
Conversion of debt offering and accrued interest (Note 7), shares | 7,672,860 | |||||||
Conversion of debt offering and accrued interest (Note 7), amount | 15,345,720 | 0 | 0 | $ 7,673 | 15,338,047 | 0 | ||
Net loss | (6,140,738) | 0 | 0 | 0 | 0 | (6,140,738) | ||
Issuance of warrant for services to related party | 71,220 | 0 | 0 | $ 0 | 71,220 | 0 | ||
Issuance of common stock for stock option exercises, shares | 5,000 | |||||||
Issuance of common stock for stock option exercises, amount | 9,000 | 0 | 0 | $ 5 | 8,995 | 0 | ||
Issuance of common stock for services, shares | 90,000 | |||||||
Issuance of common stock for services, amount | 153,000 | $ 0 | $ 0 | $ 90 | 152,910 | 0 | ||
Balance, shares at Mar. 31, 2022 | 1,785,715 | 1,016,004 | 43,737,772 | |||||
Balance, amount at Mar. 31, 2022 | $ 6,729,227 | $ 1,790 | $ 1,015 | $ 43,739 | $ 99,506,534 | $ (92,823,851) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 6 Months Ended | 12 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | |
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||
Net loss | $ (11,497,357) | $ (10,672,949) | $ (25,360,213) | $ (13,562,641) |
operating activities | ||||
Depreciation and amortization | 118,068 | 129,257 | 200,807 | 242,987 |
Issuance of common stock for services | 153,000 | 202,820 | 23,344 | 0 |
Issuance of common stock warrants for services | 71,220 | 0 | 202,820 | 1,045,000 |
Stock based compensation- warrants | 0 | 2,194,257 | ||
Stock based compensation- stock option grants | 636,651 | 302,849 | 1,028,522 | 1,702,085 |
Right of use, net | (11,203) | 0 | (1,493) | 422 |
Amortization of debt discount to interest expense | 7,272,911 | 4,198,105 | 13,722,672 | 5,662,690 |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||
Provision on loss on accounts receivable | 0 | 634 | ||
Accounts receivable- related party | (119,210) | 0 | ||
Other long-term assets | 0 | 11,413 | (11,413) | 11,414 |
Accounts payable - trade and accrued expenses | 2,353,901 | 386,261 | 797,337 | 218,018 |
NET CASH (USED IN) OPERATING ACTIVITIES | (1,022,019) | (3,247,353) | (6,850,699) | (3,913,803) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||
Purchase of research and development equipment | (826,956) | (34,967) | (299,525) | (70,134) |
NET CASH (USED IN) INVESTING ACTIVITIES: | (826,956) | (34,967) | (299,525) | (70,134) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||
Proceeds from convertible notes payable | 0 | 14,209,000 | 14,209,000 | 5,639,500 |
Repayment from Simple Agreements for Future Equity | (253,800) | 0 | ||
Proceeds from issuance of shares related to debt settlement | 0 | 125,000 | ||
Payments for issuance costs from notes payable | 0 | (727,117) | (727,117) | (479,965) |
Proceeds from Simple Agreements for Future Equity | 0 | 340,000 | 340,000 | 785,000 |
Proceeds from note payable - PPP | 0 | 205,633 | 205,633 | 226,170 |
Proceeds from issuance of common stock for stock options exercise | 11,344 | 0 | ||
Proceeds from issuance of common stock for warrant exercise | 766,486 | 653,204 | 1,313,203 | 85,575 |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 777,830 | 14,680,720 | 15,110,263 | 6,381,280 |
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | (1,071,145) | 11,398,400 | 7,960,039 | 2,397,343 |
CASH AND CASH EQUIVALENTS, beginning of period | 12,258,218 | 4,298,179 | 4,298,179 | 1,900,836 |
CASH AND CASH EQUIVALENTS, end of period | 11,187,073 | 15,696,579 | 12,258,218 | 4,298,179 |
Adjustments to reconcile net loss to net cash (used in) operating activities | ||||
Interest paid | 0 | 0 | 18,800 | 0 |
Taxes paid | 0 | 0 | 0 | 1,922 |
Non-cash investing and financing activities: | ||||
Stock based compensation - warrants | 2,547,436 | 0 | ||
Beneficial conversion feature | 0 | 9,769,683 | 9,769,683 | 3,766,074 |
Issuance of warrants for services related to debt offering | 0 | 1,667,281 | 1,667,281 | 975,326 |
Cashless warrant exercise (fair value) | 0 | 493,601 | 515,975 | 111,554 |
Conversion of debt | 14,209,000 | 713,775 | 5,638,275 | 4,245,448 |
Conversion of accrued interest | 1,136,720 | 58,430 | 460,185 | 351,089 |
Loss on sale of assets | 0 | 4,663 | ||
(Gain) on debt settlement | 0 | 117,200 | ||
Loss related to issuance of shares for debt settlement | 0 | 825,000 | ||
Changes in operating assets and liabilities: | ||||
Accounts receivable | 0 | 63,049 | ||
Prepaid expenses | 0 | 6,435 | ||
Inventory | 0 | 7,103 | ||
Other long term assets | $ 0 | $ (11,413) | 11,413 | (11,414) |
Non-cash investing and financing activities: | ||||
Beneficial conversion feature | 9,769,683 | 3,766,074 | ||
Issuance of warrant to debt holders | 4,439,317 | 1,824,998 | ||
Cashless stock options exercise (fair value) | 0 | 18,298 | ||
Issuance of shares and warrants for conversion of Simple Agreements for Future Equity | $ 1,427,141 | $ 0 |
ORGANIZATION
ORGANIZATION | 6 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Sep. 30, 2021 | |
ORGANIZATION | ||
ORGANISATION | 1. ORGANIZATION Know Labs, Inc. was incorporated under the laws of the State of Nevada in 1998. The Company has authorized 205,000,000 shares of capital stock, of which 200,000,000 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. At the annual shareholder meeting held on October 15, 2021, our authorized shares of common stock was increased to 200,000,000 shares of voting common stock, par value $0.001 per share. The Company is focused on the development and commercialization of proprietary biosensor technologies which, when paired with our AI deep learning platform, are capable of uniquely identifying and measuring almost any material or analyte using electromagnetic energy to detect, record, identify and measure the unique “signature” of said materials or analytes. The Company calls these our “Bio-RFID™” technology platform when pertaining to radio and microwave spectroscopy; and “ChromaID” technology platform when pertaining to optical spectroscopy. The data obtained with the Company’s biosensor technology is analyzed with our trade secret algorithms which are driven by our AI Deep Learning platform. ChromaID is the first technology developed and patented by the Company. For the past several years, the Company has focused upon extensions and new patentable inventions that are derived from and extend beyond our ChromaID technology and intellectual property. The Company calls this technology platform Bio-RFID. The rapid advances made with our Bio-RFID technology in our laboratory have caused us to move quickly into the commercialization phase of our Company as we work to create revenue generating products for the marketplace. Today, the primary focus of the Company is on its Bio-RFID technology, its commercialization and development of related patent assets. Through its wholly owned subsidiary corporations the Company works to exploit additional opportunities and markets that its broad intellectual property and trade secret portfolio addresses. On April 30, 2020, the Company approved and ratified the incorporation of Particle, Inc. Particle is focused on the development and commercialization of our extensive intellectual property relating to electromagnetic energy outside of the medical diagnostic arena which remains the parent company’s singular focus. Since incorporation, Particle has engaged in research and development activities on threaded light bulbs that have a warm white light and can inactivate germs, including bacteria and viruses. It is now looking for partners to take the product to market. On September 17, 2021, the Company incorporated of AI Mind, Inc. AI Mind is focused on monetizing the AI Deep Learning Platform. Since incorporation it initially focused on creating graphical images which were sold as Non Fungible Tokens (“NFTs”). During the six months ended March 31, 2022, | 1. 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. At the annual shareholder meeting held on October 15, 2021, our authorized shares of common stock was increased to 200,000,000 shares of voting common stock, par value $0.001 per share. The Company is focused on the development and commercialization of proprietary biosensor technologies which, when paired with our AI deep learning platform, are capable of uniquely identifying and measuring almost any material or analyte using electromagnetic energy to detect, record, identify and measure the unique “signature” of said materials or analytes. The Company calls these our “Bio-RFID™” technology platform when pertaining to radio and microwave spectroscopy; and “ChromaID” technology platform when pertaining to optical spectroscopy. The data obtained with the Company’s biosensor technology is analyzed with our trade secret algorithms which are driven by our AI Deep Learning platform. ChromaID is the first technology developed and patented by the Company. For the past several years, the Company has focused upon extensions and new patentable inventions that are derived from and extend beyond our ChromaID technology and intellectual property. The Company calls this technology platform Bio-RFID. The rapid advances made with our Bio-RFID technology in our laboratory have caused us to move quickly into the commercialization phase of our Company as we work to create revenue generating products for the marketplace. Today, the primary focus of the Company is on its Bio-RFID technology, its commercialization and development of related patent assets. Through its wholly owned subsidiary corporations the Company works to exploit additional opportunities and markets that its broad intellectual property and trade secret portfolio addresses. On April 30, 2020, the Company approved and ratified the incorporation of Particle, Inc. Particle is focused on the development and commercialization of our extensive intellectual property relating to electromagnetic energy outside of the medical diagnostic arena which remains the parent company’s singular focus. Since incorporation, Particle has engaged in research and development activities on threaded light bulbs that have a warm white light and can inactivate germs, including bacteria and viruses. It is now looking for partners to take the product to market. On September 17, 2021, the Company approved and ratified the incorporation of AI Mind, Inc. AI Mind is focused on monetizing the AI Deep Learning Platform. Since incorporation it has focused on creating patterns from Company data which were sold as NFTs. The Company will continue to look for opportunities for new applications on its AI Deep Learning Platform to generate revenues to support the continued development of its non-invasive diagnostic technology. In 2010, the Company acquired TransTech Systems, Inc. as an adjunct to the Company’s business. 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. While it did provide our prior year revenues, it was not central to our current focus as a Company. Moreover, the Company wrote down any goodwill associated with its historic acquisition. TransTech ceased operation on June 30, 2020 and was dissolved as of September 30, 2020. |
LIQUIDITY and GOING CONCERN
LIQUIDITY and GOING CONCERN | 6 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Sep. 30, 2021 | |
LIQUIDITY and GOING CONCERN | ||
LIQUIDITY and GOING CONCERN | 2. LIQUIDITY and GOING CONCERN The Company has cash and cash equivalents of $11,187,073 and net working capital of $8,355,273 (exclusive of convertible notes payable and right of use liabilities) as of March 31, 2022. The Company anticipates that it will record losses from operations for the foreseeable future. The Company believes that it has enough available cash to operate until June 30, 2023. As of March 31, 2022, the Company’s accumulated deficit was $92,823,851. The Company has had limited capital resources and intends to seek additional cash via equity and debt offerings. | 2. LIQUIDITY The Company has cash of approximately $12,258,218 and net working capital of approximately $10,092,586 (exclusive of convertible notes payable and right of use asset and liabilities) as of September 30, 2021.The Company anticipates that it will record losses from operations for the foreseeable future. The Company believes that it has enough available cash to operate until December 2023. As of September 30, 2021, the Company’s accumulated deficit was $81,326,494. The Company has had limited capital resources and intends to seek additional cash via equity and debt offerings. . On March 15, 2021, the Company closed private placement for gross proceeds of $14,209,000 in exchange for issuing 8% Subordinated Convertible Notes and 3,552,250 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 Convertible Notes and accrued interest will be automatically converted to Common Stock at $2.00 per share on the one year anniversary starting on March 15, 2022. See Note 15 for discussion of transactions subsequent to September 30, 2021 that generated additional cash for the Company. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES ADOPTION OF ACCOUNTING STANDARDS | 6 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Sep. 30, 2021 | |
SIGNIFICANT ACCOUNTING POLICIES ADOPTION OF ACCOUNTING STANDARDS | ||
SIGNIFICANT ACCOUNTING POLICIES: ADOPTION OF ACCOUNTING STANDARDS | 3. SIGNIFICANT ACCOUNTING POLICIES: ADOPTION OF ACCOUNTING STANDARDS Basis of Presentation Principles of Consolidation Cash and Cash Equivalents Equipment Long-Lived Assets Intangible Assets Revenue Recognition · identification of the contract, or contracts, with the customer; · identification of the performance obligations in the contract; · determination of the transaction price; · allocation of the transaction price to the performance obligations in the contract; and · recognition of the revenue when, or as, the Company satisfies a performance obligation. Revenue is recognized when control of the promised goods or services is transferred to the customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. During the six months ended March 31, 2022, the Company’s artificial intelligence (AI) Deep Learning Platform began generating revenue from digital asset sales of NFT’s. The Company engineering team, using its research date, AI and proprietary algorithms, produced NFT’s in the form of digital art. The NFT’s produced had no recorded cost basis. Digital Asset Sales - After the sale of the NFT, the Ethereum is converted to US dollars as soon as practically possible. The Company records the total value of the gross NFT sale in revenue. Costs incurred in connection with the NFT transaction are recorded in the statement of operations as Selling and Transactional Cost of Digital Assets and include costs to outside consultants, estimated employee and CEO special bonus compensation, and estimated sales and use tax. 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 $2,134,459, $3,969,972 and $2,033,726 for the six months ended March 31, 2022 and the years ended September 30, 2021 and 2020, 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 March 31, 2022 and September 30, 2021 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 March 31, 2022 and September 30, 2021 was 8,036,515 and $12,217,714, respectively. Derivative Financial Instruments – The Company determined that the conversion features for purposes of bifurcation within convertible notes payable were immaterial and there was no derivative liability to be recorded as of March 31, 2022 and September 30, 2021. Stock Based Compensation Convertible Securities Net Loss per Share As of March 31, 2021, the Company had 28,257,467 shares of common stock issued and outstanding. As of March 31, 2021, there were options outstanding for the purchase of 14,786,995 common shares (including unearned stock option grants totaling 11,775,745 shares related to performance targets), warrants for the purchase of 23,440,456 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 21,049,264 common shares (9,020,264 common shares at the current price of $0.25 per share, 4,924,500 common shares at the current price of $1.00 per share and 7,104,500 common shares at the current price of $2.00 per share) reserved and are issuable upon conversion of convertible debentures of $19,133,500. All of which could potentially dilute future earnings per share but are excluded from the March 31, 2021 calculation of net loss per share because their impact is antidilutive. Comprehensive loss Dividend Policy Use of Estimates Recent Accounting Pronouncements Debt -- debt with Conversion and Other Options (Subtopic470-20) and Derivatives and Hedging --Contracts in Entity’ Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’ Own Equity Based on the Company’s review of accounting standard updates issued since the filing of the March 31, 2022 Form 10-Q, 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 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 $3,969,972 and $2,033,726 for the year ended September 30, 2021 and 2020, 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 September 30, 2021 and 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 September 30, 2021 and 2020 was $12,217,714 and $4,252,959, respectively. 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 September 30, 2021 and 2020. Stock Based Compensation Convertible Securities Net Loss per Share As of September 30, 2020, there were options outstanding for the purchase of 4,805,000 common shares (including unearned stock option grants totaling 2,630,000 shares related to performance targets), warrants for the purchase of 20,016,367common 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 14,659,764 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 are issuable upon conversion of convertible debentures of $7,894,566. All of which could potentially dilute future earnings per share but excluded from the September 30, 2020 calculation of net loss per share because their impact is antidilutive. Comprehensive loss Dividend Policy Use of Estimates Recent Accounting Pronouncements In August 2020, the FASB issued Accounting Standards Update (“ASU”) No. 2020-06, Debt --debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging --Contracts in Entity’ Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’ Own Equity Based on the Company’s review of accounting standard updates issued since the filing of the 2021 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. |
ARTIFICIAL INTELLIGENCE (AI) DE
ARTIFICIAL INTELLIGENCE (AI) DEEP LEARNING PLATFORM | 6 Months Ended |
Mar. 31, 2022 | |
ARTIFICIAL INTELLIGENCE (AI) DEEP LEARNING PLATFORM | |
ARTIFICIAL INTELLIGENCE (AI) DEEP LEARNING PLATFORM | 4. Artificial Intelligence (AI) Deep Learning Platform AI Revenue During the six months ended March 31, 2022, During the three months ended March 31, 2022, the Company was able to establish a digital wallet and corporate account at Circle in order to receive the Ethereum and then convert it to cash. The Company received $2,908,551 of Ethereum and recorded a reduction in value of $96,820 related to the decline in value of the Ethereum. The accounts receivable-related party was $119,210 as of March 31, 2022. As of March 31, 2022, accrued expenses - related parties include approximately $326,378 of expenses, primarily sales and use tax and $1,564,852 in compensation that the Company expects to pay for the NFT sales. During 2021, approximately $1.3 million of the selling and transactional costs for the digital assets was paid through the CEO’s personal digital asset account including approximately $1.075 million which was paid to a consultant via the transfer of Ethereum. |
FIXED ASSETS
FIXED ASSETS | 12 Months Ended |
Sep. 30, 2021 | |
FIXED ASSETS | |
FIXED ASSETS | 4. FIXED ASSETS Property and equipment as of September 30, 2021 and 2020 was comprised of the following: Estimated Useful Lives September 30, 2021 September 30, 2020 Machinery and equipment 2-3 years $ 654,798 $ 355,272 Leasehold improvements 5 years 3,612 3,612 Furniture and fixtures 5 years 26,855 26,855 Less: accumulated depreciation (356,761 ) (257,068 ) $ 328,504 $ 128,671 Total depreciation expense was $99,693 and $69,655 for the year ended September 30, 2021 and 2020, respectively. All equipment is used for general and administrative purposes and accordingly all depreciation is classified in general and administrative expenses. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 6 Months Ended |
Mar. 31, 2022 | |
PROPERTY AND EQUIPMENT | |
PROPERTY AND EQUIPMENT | 5. PROPERTY AND EQUIPMENT Property and equipment as of March 31, 2022 and September 30, 2021 was comprised of the following: Estimated Useful Lives March 31, 2022 September 30, 2021 Machinery and equipment 2-3 years $ 1,481,754 $ 654,798 Leasehold improvements 5 years 3,612 3,612 Furniture and fixtures 5 years 26,855 26,855 Less: accumulated depreciation (474,829 ) (356,761 ) $ 1,037,392 $ 328,504 Total depreciation expense was $118,068 and $42,591 for the six months ended March 31, 2022 and 2021, respectively. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 12 Months Ended |
Sep. 30, 2021 | |
INTANGIBLE ASSETS | |
INTANGIBLE ASSETS | 5. INTANGIBLE ASSETS Intangible assets as of September 30, 2021 and 2020 consisted of the following: Estimated September 30, September 30, Useful Lives 2021 2020 Technology 3 years $ 520,000 $ 520,000 Less: accumulated amortization (520,000 ) (418,886 ) Intangible assets, net $ - $ 101,114 Total amortization expense was $101,114 and $173,332 for the years ended September 30, 2021 and 2020, respectively. 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. |
LEASES
LEASES | 6 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Sep. 30, 2021 | |
LEASES | ||
LEASES | 6. 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 March 31, 2022 and September 30, 2021 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 March 31, 2022 and September 30, 2021 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 $305,462 as of March 31, 2022. 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 years ended March 31, 2022 and September 30, 2021, the Company amended two leases and recognized the rent payments as an expense in the current period. As of March 31, 2022 and September 30, 2021, total operating lease liabilities for remaining long term lease was approximately $295,798 and $290,000, respectively. In the six months ended March 31, 2022 and 2021, the Company recognized approximately $100,103 and $76,423, 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 year ended March 31, 2022 was as follows: Cash paid for ROU operating lease liability $50,051 Weighted-average remaining lease term 23 months Weighted-average discount rate 7% The minimum future lease payments as of March 31, 2022 are as follows: Years Ended March 31, $ 2022 $ 170,489 2023 117,941 2024 27,411 Total remaining payments 315,840 Less Imputed Interest (20,042 ) Total lease liability $ 295,798 | 6. 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 September 30, 2021 and 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 September 30, 2021 and 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 $291,000 as of September 30, 2021. 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 years ended September 30, 2021 and 2020, the Company had three leases expire and recognized the rent payments as an expense in the current period. As of September 30, 2021 and September 30, 2020, total operating lease liabilities for remaining long term lease was approximately $290,000 and $132,000, respectively. In the year ended September 30, 2021 and 2020, the Company recognized approximately $139,643 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 year ended September 30, 2021 was as follows: Cash paid for ROU operating lease liability $139,643 Weighted-average remaining lease term 28 months Weighted-average discount rate 7% The minimum future lease payments as of September 30, 2021 are as follows: Years Ended September 30, $ 2022 $ 128,987 2023 107,662 2024 73,095 2025 - 2026 - Total Remaining Payments 309,744 Of which Imputed Interest (19,203 ) Total Lease Liability $ 290,541 |
CONVERTIBLE NOTES PAYABLE AND N
CONVERTIBLE NOTES PAYABLE AND NOTE PAYABLE | 6 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Sep. 30, 2021 | |
CONVERTIBLE NOTES PAYABLE AND NOTE PAYABLE | ||
CONVERTIBLE NOTES PAYABLE AND NOTE PAYABLE | 7. CONVERTIBLE NOTES PAYABLE AND NOTE PAYABLE Convertible notes payable as of March 31, 2022 and September 30, 2021 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 $82,801 and $79,062 as of March 31, 2022 and September 30, 2021, respectively. On May 3, 2022, the Company signed Amendments to the convertible promissory or OID notes, extending the due dates to September 30, 2022. 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 $251,671 and $216,246 as of March 31, 2022 and September 30, 2021, respectively. On April 4, 2022, the Company approved Amendments to the convertible redeemable promissory notes with Ronald P. Erickson and J3E2A2Z, extending the due dates to September 30, 2022. 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 exercise prices of $1.20 and $2.40 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 March 31, 2022, the Company has raised approximately $24 million through these offerings, of which $14,209,000 and $5,639,500 were raised in the years ended September 30, 2021 and 2020, respectively. During the year ended September 30, 2021, the Company issued 6,091,960 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 Convertible Notes issued during the year ended September 30, 2021 are initially convertible into 7,104,500 shares of Common Stock, subject to certain adjustments, and the Warrants are initially exercisable for 3,552,250 shares of Common Stoc. As of March 31, 2022 all convertible notes and accrued interest had been converted to common stock. The fair value of the Warrants issued to debt holders during the year ended September 30, 2021 was $4,439,317 on the date of issuance and was amortized over the one-year term of the Convertible Notes. The fair value of the warrants was recorded as debt discount (with an offset to APIC) and was amortized over the one-year term of the Convertible Notes. In connection with the debt offering during the year ended September 30, 2021, the placement agent for the Convertible Notes and the Warrants received a cash fee of 727,117 and warrants to purchase 492,090 shares of the Company’s common stock, all based on 2-8% of gross proceeds to the Company. The warrants issued for these services had a fair value of $1,667,281 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 $727,117 cash fee was recorded as issuance costs and was amortized over the one-year term of the related Convertible Notes. During the year ended September 30, 2021, the Company recorded a debt discount of $9,769,683 associated with a beneficial conversion feature on the debt, which was accreted to interest expense using the effective interest method over the one-year term of the Convertible Notes. During the six and three quarters ended March 31, 2022, amortization related to the debt offerings of $7,272,911 and $4,184,657 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 March 31, 2022 and September 30, 2021 are summarized below: March 31, 2022 September 30, 2021 Convertible note- Clayton A. Struve $ 1,071,000 $ 1,071,000 Convertible note- Ronald P. Erickson and affiliates 1,184,066 1,184,066 2020 Convertible notes - 5,639,500 2021 Convertible notes 14,209,000 14,209,000 Boustead fee refund (originally booked as contra debt) - 50,000 Less conversions of notes (14,209,000 ) (5,639,500 ) Less debt discount - BCF - (4,308,337 ) Less debt discount - warrants - (1,957,590 ) Less debt discount - warrants issued for services - (1,056,984 ) $ 2,255,066 $ 9,191,155 Note Payable-PPP Loans 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 March 31, 2022 and September 30, 2021, the Company recorded interest expense of $4,350 and $3,222, respectively. On April 27, 2022, the Company was notified by the SBA that the Company is required to repay principal of $98,106 and interest of $1,997. The loan balance of $128,064 was forgiven. On February 1, 2021, the Company received $205,633 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 March 31, 2022 and September 30, 2021, the Company recorded interest expense of $2,293 and $1,268, respectively. The Company filed the application for the loan forgiveness during the six months ended March 31, 2022. | 7. CONVERTIBLE NOTES PAYABLE AND NOTE PAYABLE Convertible notes payable as of September 30, 2021 and 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 $79,062 and $71,562 as of September 30, 2021 and 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. On November 8, 2021, the Company signed Amendments to the convertible promissory or OID notes, extending the due dates to March 31, 2022. Mr. Struve also invested $1,000,000 in the May 2019 Convertible Debt Offering and such note was converted to common stock in May 2020. 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 $216,246 and $145,202 as of September 30, 2021 and 2020, respectively. On September 30, 2021, the Company approved Amendments to the convertible redeemable promissory notes with Ronald P. Erickson and J3E2A2Z, extending the due dates to March 31, 2022. 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 exercise prices of $1.20 and $2.40 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, 2021, the Company has raised approximately $24 million through these offerings, of which $14,209,000 and $5,639,500 were raised in the years ended September 30, 2021 and 2020, respectively. The Convertible Notes issued during the year ended September 30, 2021 are initially convertible into 7,104,500 shares of Common Stock, subject to certain adjustments, and the Warrants are initially exercisable for 3,552,250 shares of Common Stock. The fair value of the Warrants issued to debt holders during the year ended September 30, 2021 was $4,439,317 on the date of issuance and will be amortized over the one-year term of the Convertible Notes. 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. In connection with the debt offering during the year ended June 30, 2021, the placement agent for the Convertible Notes and the Warrants received a cash fee of $727,117 and warrants to purchase 492,090 shares of the Company’s common stock, all based on 2-8% of gross proceeds to the Company. The warrants issued for these services had a fair value of $1,667,281 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 $727,117 cash fee was recorded as issuance costs and will be amortized over the one-year term of the related Convertible Notes. During the years ended September 30, 2021 and 2020, the Company recorded a debt discount of $9,769,683 and $3,766,074 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 year ended September 30, 2021, the Company issued 6,091,960 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 year ended September 30, 2021 and 2020, amortization related to the debt offerings of $13,256,250 and $5,662,690 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 September 30, 2021 and 2020 are summarized below: September 30, 2021 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 2020 Convertible notes 5,639,500 5,639,500 Q2 2021 Convertible notes 14,209,000 - Boustead fee refund (originally booked as contra debt) 50,000 50,000 Less conversions of notes (9,881,990 ) (4,242,490 ) Less debt discount - BCF (4,308,337 ) (2,127,894 ) Less debt discount - warrants (1,957,590 ) (1,025,512 ) Less debt discount - warrants issued for services (1,056,984 ) (823,582 ) $ 9,191,155 $ 3,967,578 Note Payable-PPP Loans 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 September 30, 2021 and 2020, the Company recorded interest expense of $3,222 and $960, respectively. The Company utilized 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 filed the application for the loan forgiveness during the three months ended December 31, 2021 and the Company is expecting approval by the SBA. On February 1, 2021, the Company received $205,633 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 September 30, 2021, the Company recorded interest expense of $1,268. The Company utilized 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 be outstanding. The Company filed the application for the loan forgiveness during the three months ended December 31, 2021 and the Company is expecting approval by the SBA. |
SIMPLE AGREEMENTS FOR FUTURE EQ
SIMPLE AGREEMENTS FOR FUTURE EQUITY | 12 Months Ended |
Sep. 30, 2021 | |
CONVERTIBLE NOTES PAYABLE AND NOTE PAYABLE | |
SIMPLE AGREEMENTS FOR FUTURE EQUITY | 8. 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. During the three months ended March 31, 2021, Particle entered into Simple Agreements for Future Equity (“SAFE”) with five accredited investors pursuant to which Particle received $340,000 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 $23,660 in broker fees which were expensed as business development expenses. Through August 9, 2021, $1,125,000 has been raised through the sale of SAFE instruments. On this date, certain investors elected to convert their SAFE instruments balance and accrued interest into Know Labs common stock. The Company issued 480,600 shares of common stock at an average price of $2.00 per share or $961,200 related to the conversion into the Company’s common shares. The exercise price was below the fair market value of Know Labs stock, as such the Company recorded a beneficial conversion feature of $72,090. The Company also issued five year warrants to these investors for 240,000 shares of the Company’s common stock. The warrants are exercisable at $2.40 per share. The warrants were valued at $1.641 per share or $394,332 and were expensed during the current year The Company repaid $253,800 to investors that elected to redeem their SAFE instruments for cash. The Company recorded interest expense of $90,000 and paid $54,108 to Boustead Securities LLC in fees during the year ended September 30, 2021 related to this transaction. The Company also issued a five year warrant to Boustead Securities LLC for 43,254 shares of the Company’s common stock. The warrant is exercisable at $2.40 per share and was valued at $1.641 per share or $70,980. |
EQUITY
EQUITY | 6 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Sep. 30, 2021 | |
EQUITY | ||
EQUITY | 8. EQUITY Authorized Capital Stock The Company was incorporated under the laws of the State of Nevada in 1998. The Company has authorized 205,000,000 shares of capital stock, of which 200,000,000 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. At the annual shareholder meeting held on October 15, 2021, our authorized shares of common stock was increased to 200,000,000 shares of voting common stock, par value $0.001 per share. As of March 31, 2022, there were options outstanding for the purchase of 17,878,245 common shares (including unearned stock option grants totaling 11,550,745 shares related to performance targets), warrants for the purchase of 21,714,023 common shares, and 8,108,356 shares of our common stock issuable upon the conversion of Series C and Series D Convertible Preferred Stock. In addition, the Company currently has 9,020,264 common shares at the current price of $0.25 per share reserved and are issuable upon conversion of convertible debentures of $2,255,066. All of which could potentially dilute future earnings per share but are excluded from the March 31, 2022, calculation of net loss per share because their impact is antidilutive. Annual Shareholder Meeting On October 15, 2021, the Company held its annual shareholder meeting. The Company’s shareholders approved and adopted various motions as detailed in the Company’s Form 8-K that was filed with the SEC on October 19, 2021. Second Amended and Restated Bylaws On October 15, 2021, the shareholders of the Company approving the Second Amended and Restated Bylaws effective October 15, 2021. Certificate of Amendment to Articles of Incorporation On December 6, 2021, the Company received approval from the State of Nevada for a Certificate of Amendment to the Articles of Incorporation related to the increase in the number of authorized common shares. 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 March 31, 2022 and September 30, 2021 there are 1,785,715 Series C Preferred shares outstanding. On May 3, 2022, the Company approved the Extension of Warrant Agreement with Clayton Struve, extending the exercise dates to August 4, 2024. As of March 31, 2022 and September 30, 2021, the Company has $750,000 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 March 31, 2022 and September 30, 2021, there are no Series F shares outstanding. Securities Subject to Price Adjustments In the future, if the Company’s 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 $2,255,066 or 9,020,264 common shares at $0.25 per share and the exercise price of additional outstanding warrants to purchase 10,334,381 shares of common stock would adjust below $0.25 per share pursuant to the documents governing such instruments. Warrants totaling 4,487,207 would adjust below $1.20 per share pursuant to the documents governing such instruments. Warrants totaling 3,954,625 would adjust below $2.40 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. Six Months Ended March 31, 2022 The Company issued 801,486 shares of common stock related to warrant exercises and received $766,486. The Company issued 6,875 shares related to the exercise of stock option grants and received $11,344. The Company issued 7,672,860 shares of common stock related to the automatic conversion of Convertible Notes and interest from a private placement to accredited investors in 2021. The Convertible Notes and interested were automatically converted to Common Stock at $2.00 per share on the one year anniversary in March 2022. On January 5, 2022, the Company issued 30,000 shares each to three directors shares at an exercise price of $1.70 per share. On January 5, 2022, the Company issued 20,000 warrants to purchase common stock each to three directors shares at $1.70 per share. The warrants expire on January 5, 2027. Warrants to Purchase Common Stock Six Months Ended March 31, 2022 On January 5, 2022, the Company issued 20,000 warrants to purchase common stock each to three directors shares at $1.70 per share. The warrants expire on January 5, 2027. During the six months ended March 31, 2022, the Company issued 801,486 shares of common stock related to warrant exercises and received $766,486. During the six months ended March 31, 2022, warrants to purchase 108,756 shares of common stock at $1.00 per share expired. March 31, 2022 Weighted Average Exercise Shares Price Outstanding at beginning of period 22,564,255 $ 0.998 Issued 60,000 - Exercised (801,486 ) (0.956 ) Forfeited - - Expired (108,756 ) (1.000 ) Outstanding at end of period 21,714,013 $ 1.001 Exerciseable at end of period 21,714,013 The following table summarizes information about warrants outstanding and exercisable as of March 31, 2022: March 31, 2022 Weighted Weighted Weighted Average Average Average Number of Remaining Exercise Shares Exercise Warrants Life ( In Years) Price Exercisable Price 10,779,381 1.02 $ 0.250 10,779,381 $ 0.250 6,559,707 2.84 1.20-1.85 6,559,707 1.20-1.85 4,364,925 4.00 2.00-2.40 4,364,925 2.00-2.40 10,000 1.25 4.080 10,000 4.080 21,714,013 3.17 $ 1.001 21,714,013 $ 1.001 There were vested warrants of 21,714,013 with an aggregate intrinsic value of $19,956,371. | 9. EQUITY Authorized Capital Stock 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 of preferred stock, par value $0.001 per share. At the annual shareholder meeting held on October 15, 2021, our authorized shares of common stock was increased to 200,000,000 shares of voting common stock, par value $0.001 per share. We have authorized 5,000,000 are shares of preferred stock, par value $0.001 per share. As of September 30, 2021, we had 35,166,551 shares of common stock issued and outstanding, held by 163 stockholders of record. The number of stockholders, including beneficial owners holding shares through nominee names, is approximately 3,600. 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 September 30, 2021, there were options outstanding for the purchase of 15,315,120 common shares (including unearned stock option grants totaling 11,775,745 shares related to performance targets), warrants for the purchase of 22,564,255 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 16,124,764 common shares (9,020,264 common shares at the current price of $0.25 per share and 7,104,500 common shares at the current price of $2.00 per share) reserved and are issuable upon conversion of convertible debentures of $16,464,066. All of which could potentially dilute future earnings per share but are excluded from the September 30, 2021, calculation of net loss per share because their impact is antidilutive. 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 September 30, 2021 and 2020 there are 1,785,715 Series C Preferred shares outstanding. On January 5, 2021, the Company extended the warrant expiration date to August 4, 2023. As of September 30, 2021 and 2020, the Company has $750,000 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 remainissued 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 September 30, 2021 and 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 $16,464,066 or 16,124,764 common shares (9,020,264 common shares at $0.25 per share and 7,104,500 at $2.00) and the exercise price of additional outstanding warrants to purchase 10,384,381 shares of common stock would adjust below $0.25 per share pursuant to the documents governing such instruments. Warrants totaling 4,487,207 would adjust below $1.20 per share pursuant to the documents governing such instruments. Warrants totaling 3,954,625 would adjust below $2.40 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. Year Ended September 30, 2021 The Company issued 6,091,960 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 3,676,542 shares of common stock at an average price of 0.582 per share related to the exercise of warrants. The Company issued 97,000 shares related to services. The shares were valued at the fair market value of $202,820. The Company issued 16,875 shares related to the exercise of stock option grants at $1.38 per share. The Company issued 480,600 shares of common stock at an average price of $2.00 per share or $961,200 related to the conversion of Particle Simple Agreements for Future Equity into the Company’s common shares. Year Ended September 30, 2020 On November 9, 2019, a former employee exercised stock option grants on a cashless basis. The former employee received 73,191 shares of common stock for vested stock option grants. The stock option grant had an exercise price of $0.25 per share. During the year ended September 30, 2020, the Company issued 550,000 shares of restricted common stock for services. The shares were issued were valued at $1.90 per share, the market price of our common stock, or $1,045,000. During the year ended September 30, 2020, the Company issued 4,581,917 shares of common stock related to the automatic conversion of Convertible Notes and interest from a private placement to accredited investors in 2019. The Convertible Notes and interested were automatically converted to Common Stock at $1.00 per share on the one year anniversary starting on February 15, 2020. During the year ended September 30, 2020, the Company issued 733,588 shares of common stock at $0.889 per share related to the exercise of warrants. On July 1, 2020, the Company entered into a Settlement Agreement and General Mutual Release with a shareholder of the Company. On July 6, 2020, the shareholder paid $125,000 us and we issued 500,000 shares of common stock. We accrued for the loss on debt settlement of $825,000 as of June 30, 2020 which represents the difference between the fair market value of the stock and $125,000 paid by the shareholder. Warrants to Purchase Common Stock Year Ended September 30, 2021 The Company issued warrants to Ronald P. Erickson for 2,000,000 shares of common stock. The five year warrant is immediately vested and exercisable on a cash or cashless basis at $1.53 per share and was valued using a Black-Scholes model at $1,811,691. During the year ended September 30, 2021, the Company issued warrants to five directors and service providers for 269,510 shares of common stock. The five year warrant is convertible at $1.918 per share and was valued using a Black-Scholes model at $735,745. The Convertible Notes issued during the year ended September 30, 2021 are initially convertible into 7,104,500 shares of Common Stock, subject to certain adjustments, and the Warrants are initially exercisable for 3,552,250 shares of Common Stock. The Company issued 3,676,542 shares of common stock at an average price of $0.582 per share related to the exercise of warrants. Warrants to exercise 384,359 shares of common stock were forfeited at an average of $1.155 per share. The Company also issued a five year warrant to Boustead Securities LLC for 43,254 shares of the Company’s common stock related to the conversion of Particle Simple Agreements for Future Equity into the Company’s common shares. The warrant is exercisable at $2.40 per share. The warrant was valued at $1.641 per share or $70,980. Year Ended September 30, 2020 The following warrant transactions occurred during the year ended September 30, 2020: During the year ended September 30, 2020, the Company issued 733,588 shares of common stock at $0.952 per share and cancelled warrants to purchase 507,560 shares of common stock at $1.120 per share to related to the exercise of warrants. During the year ended September 30, 2020, the Company issued 75,000 shares of common stock at $1.95 per share. The warrant was valued at $1.770 per share. Convertible Debt Offering Warrants The Warrants issued for the 2020 convertible Debt Offering were granted on a 1:0.5 basis (one-half Warrant for each full share of Common Stock into which the Convertible Notes are convertible). The Warrants have a five-year term and an exercise price equal to 120% of the per share conversion price of the Qualified Financing or other mandatory conversion. Warrants issued in connection with 2020 convertible debt offering are initially exercisable for 2,819,750 shares of Common Stock at an exercise price of $1.20 per share of Common Stock, also subject to certain adjustments. In connection with the 2020 convertible debt offering, the placement agent for the Convertible Notes and the Warrants received warrants to 615,675 shares of the Company’s common stock, all based on 8% of gross proceeds to the Company. A summary of the warrants outstanding as of September 30, 2021 were as follows: September 30, 2021 Weighted Average Exercise Shares Price Outstanding at beginning of period 20,016,367 $ 0.556 Issued 6,608,789 2.117 Exercised (3,676,542 ) (0.582 ) Forfeited (384,359 ) (1.155 ) Expired - - Outstanding at end of period 22,564,255 $ 0.998 Exerciseable at end of period 22,564,255 The following table summarizes information about warrants outstanding and exercisable as of September 30, 2021: September 30, 2021 Weighted Weighted Weighted Average Average Average Number of Remaining Exercise Shares Exercise Warrants Life ( In Years) Price Exerciseable Price 10,829,381 1.24 $ 0.250 10,829,381 $ 0.250 847,742 0.12 1.000 847,742 1.000 6,512,207 3.32 1.20-1.85 6,512,207 1.20-1.85 4,364,925 4.50 2.00-2.40 4,364,925 2.00-2.40 10,000 1.75 4.080 10,000 4.080 22,564,255 3.49 $ 0.998 22,564,255 $ 0.998 The significant weighted average assumptions relating to the valuation of the Company’s warrants for the year ended September 30, 2021 were as follows: Dividend yield 0 % Expected life 3-5 years Expected volatility 140 % Risk free interest rate 0.37 % There were vested and in the money warrants of 22,554,255 with an aggregate intrinsic value of $34,314,540. |
STOCK INCENTIVE PLAN
STOCK INCENTIVE PLAN | 6 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Sep. 30, 2021 | |
EQUITY | ||
STOCK INCENTIVE PLAN | 9. STOCK INCENTIVE PLANS Know Labs, Inc. Stock Incentive Plan On October 15, 2021, at the annual shareholder meeting held on October 15, 2021, the 2021 Equity Incentive Plan was adopted and approved, increasing size of the stock available under the Stock Option Plan to 20,000,000 shares. On December 10, 2021, the Company filed a registration statement on Form S-8 that registered 34,650,120 shares issued under the 2011 Stock Incentive Plan and 2021 Equity Incentive Plan. Six Months Ended March 31, 2022 The Compensation committee issued stock option grants to twelve employees and consultants for 1,085,000 shares at an average exercise price of $2.079 per share. The stock option grants expire in five years. The stock option grant vests quarterly over four years. On December 16, 2021, the Company issued a stock option grant to Ronald P. Erickson for 1,000,000 shares at an exercise price of $2.09 per share. The stock option grant expires in five years. The stock option grant vests quarterly over four years. On December 16, 2021, the Company issued a stock option grant to Phillip A. Bosua for 1,300,000 shares at an exercise price of $2.09 per share. The stock option grant expires in five years. The stock option grant vests quarterly over four years. During the six months ended March 31, 2022, two employees and consultants exercised stock option grants for 6,875 shares at $1.650. During the six months ended March 31, 2022, four employees and consultants forfeited stock option grants for 815,000 shares at an average $1.842 per share. There are currently 17,878,245 (including unearned stock option grants totaling 11,550,745 shares related to performance milestones) options to purchase common stock at an average exercise price of $1.651 per share outstanding as of March 31, 2022 under the 2021 Stock Incentive Plan. The Company recorded $636,651 and $302,849 of compensation expense, net of related tax effects, relative to stock options for the six months ended March 31, 2022 and 2021, respectively in accordance with ASC 718. As of March 31, 2022, there is approximately $5,313,062, 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 3.80 years. Stock option activity for the six months ended March 31,2022 and the years ended September 30, 2021 and 2020 was as follows: Weighted Average Options Exercise Price Proceed $ Outstanding as of October 1, 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 10,650,745 1.766 18,807,990 Exercised (20,625 ) (1.359 ) (28,031 ) Forfeitures (120,000 ) (3.300 ) (396,000 ) Outstanding as of September 30, 2021 15,315,120 1.565 23,964,509 Granted 3,385,000 2.087 7,062,900 Exercised (6,875 ) (1.650 ) (11,344 ) Forfeitures (815,000 ) (1.842 ) (1,501,350 ) Outstanding as of March 31, 2022 17,878,245 $ 1.651 $ 29,514,715 The following table summarizes information about stock options outstanding and exercisable as of March 31, 2022: Weighted Weighted Weighted Average Average Average Range of Number Remaining Life Exercise Price Number Exercise Price Exercise Prices Outstanding In Years Outstanding Exerciseable Exerciseable $ 0.25 230,000 1.21 $ 0.250 186,875 $ 0.250 1.10-1.25 2,932,500 2.60 1.101 514,531 1.105 1.28-1.53 9,280,745 3.45 1.501 1,098,125 1.302 1.79-3.67 5,435,000 4.50 2.263 413,750 1.826 17,878,245 3.80 $ 1.651 2,213,281 $ 1.445 There are stock option grants of 17,878,245 shares as of March 31, 2022 with an aggregate intrinsic value of $8,556,635. As of September 30, 2021, the 2020 Particle Stock Incentive Plan, was terminated and all stock option grants were cancelled by the participants. The Company recorded $197,553 and $833,771 of compensation expense, net of related tax effects, relative to Particle stock options for the years ended September 30, 2021 and 2020 and in accordance with ASC 718. | 10. STOCK INCENTIVE PLANS Know Labs, Inc. Stock Incentive Plan 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. On October 15, 2021, at the annual shareholder meeting held on October 15, 2021, the 2021 Equity Incentive Plan was adopted and approved, increasing size of the stock available under the Stock Option Plan to 20,000,000 shares. On December 10, 2021, the Company filed a registration statement on Form S-8 that registered 34,650,120 shares issued under the 2011 Stock Incentive Plan and 2021 Equity Incentive Plan. Year Ended September 30, 2021 During the year ended September 30, 2021, the Company issued stock option grants to seventeen employees and consultants totaling 10,650,745 shares of common stock at an average price of $1.766 per share. The stock option grants expire in five years. Stock option grants totaling 9,145,745 vest when earned based on certain performance criteria and 1,505,000 option grants vest quarterly over 4 years, with nothing vesting in the first two quarters. No stock compensation expense has been recorded through September 30, 2021 for those options with performance milestones. During the year ended September 30, 2021, two consultants exercised stock option grants for 20,625 shares at $1.359 per share. During the year ended September 30, 2021, an employee forfeited a stock option grant for 120,000 shares at $3.30 per share. Year Ended September 30, 2020 The Company had the following stock option transactions during the year ended September 30, 2020: During the year ended September 30, 2020, the Company granted stock option grants to executives, directors and consultants for 3,085,000 shares with a weighted average exercise price of $1.142 per share. The grants expire in five years and generally vest quarterly over four years. Stock option grants totaling 2,630,000 shares of common stock are performance stock option grants and are not vested until the performance is achieved. No stock compensation expense has been recorded through September 30, 2020 for those options with performance milestones. During the year ended September 30, 2020, executives and employees voluntarily cancelled stock option grants for 2,739,477 shares with a weighted average exercise price of $2.593 per share. On November 9, 2019, a former employee exercised stock option grants on a cashless basis. The former employee received 73,191 shares of common stock for vested stock option grants totaling 93,750 shares. The stock option grant had an exercise price of $0.25 per share. There are currently 15,315,120 (including unearned stock option grants totaling 11,775,745 shares related to performance milestones) options to purchase common stock at an average exercise price of $1.565 per share outstanding as of September 30, 2021 under the 2011 Stock Incentive Plan. The Company recorded $1,028,522 and $1,702,085 of compensation expense, net of related tax effects, relative to stock options for the year ended September 30, 2021 and 2020 and in accordance with ASC 718. As of September 30, 2021, there is approximately $1,312,936, 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 3.82 years. Stock option activity for the years ended September 30, 2021 and 2020 was as follows: Weighted Average Options Exercise Price $ 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 10,650,745 1.766 18,807,990 Exercised (20,625 ) (1.359 ) (28,031 ) Forfeitures (120,000 ) (3.300 ) (396,000 ) Outstanding as of September 30, 2021 15,315,120 $ 1.565 $ 23,964,509 The following table summarizes information about stock options outstanding and exercisable as of September 30, 2021: Weighted Weighted Weighted Average Average Average Range of Number Remaining Life Exercise Price Number Exercise Price Exercise Prices Outstanding In Years Outstanding Exerciseable Exerciseable $ 0.25 230,000 1.71 0.250 172,500 $ 0.250 1.10-1.25 3,074,375 3.15 1.108 445,456 1.105 1.28-1.53 9,480,745 3.58 1.499 993,750 1.307 1.79-3.67 2,530,000 4.64 2.192 108,750 1.895 15,315,120 3.82 $ 1.565 1,720,456 $ 1.316 There stock option grants of 15,315,120 shares as of September 30, 2021 with an aggregate intrinsic value of $14,916,905. Particle, Inc. Stock Incentive Plan 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 year ended September 30, 2021, Particle approved a stock option grant to nine employees and consultants totaling 1,900,000 shares at an average of $0.80 per share. The stock option grant vests (i) 33.3% with the first shipment; (ii) 33.3% with $50 million in sales are achieved; and (iii) 33.4% after $200 million in sales are achieved. During the year ended September 30, 2021, Particle approved stock option grants to employees totaling 550,000 shares at $0.80 per share. The stock option grants vest annually over four years, with no vesting in the first two quarters. As of September 30, 2021 the 2020 Stock Incentive Plan, was terminated and all stock option grants were cancelled by the participants. The Company recorded $197,553 and $833,771 of compensation expense, net of related tax effects, relative to stock options for the years ended September 30, 2021 and 2020 and in accordance with ASC 718. |
SIGNIFICANT AND OTHER TRANSACTI
SIGNIFICANT AND OTHER TRANSACTIONS WITH RELATED PARTIES | 6 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Sep. 30, 2021 | |
SIGNIFICANT AND OTHER TRANSACTIONS WITH RELATED PARTIES | ||
SIGNIFICANT AND OTHER TRANSACTIONS WITH RELATED PARTIES | 10. SIGNIFICANT AND OTHER TRANSACTIONS WITH RELATED PARTIES Transactions with Clayton Struve See Notes 7, 8 and 13 for related party transactions 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 82,801 and $79,062 as of March 31, 2022 and September 30, 2021, respectively. On May 3, 2022, the Company signed Amendments to the convertible promissory or OID notes, extending the due dates to September 30, 2022. Related Party Transactions with Ronald P. Erickson See Notes 7, 9, 11 and 13 for related party transactions with Ronald P. Erickson. On December 16, 2021, the Company issued a stock option grant to Ronald P. Erickson for 1,000,000 shares at an exercise price of $2.09 per share. The stock option grant expires in five years. The stock option grant vests quarterly over four years. Mr. Erickson and/or entities with which he is affiliated also have accrued compensation, travel and interest of approximately $256,702 and $421,599 as of March 31, 2022 and September 30, 2021, respectively. During the six months ended March 31, 2022, the Company paid $75,000 of salaries to Mr. Erickson that were previously accrued and reported but were deferred. Related Party Transaction with Phillip A. Bosua See Notes 9 and 11 for related party transactions with Phillip A. Bosua. On December 16, 2021, the Company issued a stock option grant to Phillip A. Bosua for 1,300,000 shares at an exercise price of $2.09 per share. The stock option grant expires in five years. The stock option grant vests quarterly over four years. As of December 31, 2021 the Company has recorded an accounts receivable-related party of $3,124,581 for the cash it expects to receive from the CEO’s personal digital account. Included in accrued expenses-related party at December 31, 2021 is approximately $1.56 million of special bonus compensation the Company expects to pay employees and its CEO for the NFT sales once the cash is received. As of December 31, 2021, accrued expenses include approximately $326,000 of expenses, primarily sales and use tax, that the Company expects to pay for the NFT sales. During 2021, approximately $1.3 million of the selling and transactional costs for the digital assets was paid through the CEO”s personal digital asset account including approximately $1.075 million which was paid to a consultant via the transfer of Ethereum. During the three months ended March 31, 2022, the Company was able to establish a digital wallet and corporate account at Circle in order to receive the Ethereum. The Company received $2,908,551 and recorded a reduction in value of $96,820 related to the decline in value of the Ethereum. The accounts receivable was $119,210 as of March 31, 2022. As of March 31, 2022, accrued expenses include approximately $326,378 of expenses, primarily sales and use tax and $1,564,852 in compensation that the Company expects to pay for the NFT sales. Related Party Transactions with Directors On January 5, 2022, the Company issued 30,000 shares each to three directors shares at an exercise price of $1.70 per share. On January 5, 2022, the Company issued 20,000 warrants to purchase common stock each to three directors shares at $1.70 per share. The warrants expire on January 5, 2027. | 11. OTHER SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES Transactions with Clayton Struve See Notes 7, 9 and 15 for related party transactions with Clayton A. Struve. On January 5, 2021, the Company extended the warrant expiration date to August 4, 2023 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 warrants for 187,500 and 187,500 that were just extended as discussed above. The Company owes Clayton A. Struve $1,071,000 under convertible promissory or OID notes. On November 8, 2021, the Company signed Amendments to the convertible promissory or OID notes, extending the due dates to March 31, 2022. Mr. Struve invested $1,000,000 in the Debt Offering which closed in May 2019. On March 18, 2020, Mr. Struve received 1,080,000 shares of common stock related to the automatic conversion of the $1,000,000 invested in the Debt Offering. Related Party Transactions with Ronald P. Erickson See Notes 9, 10, 12 and 15 for related party transactions with Ronald P. Erickson. On October 4, 2019, Ronald P. Erickson voluntarily cancelled a stock option grant for 1,000,000 shares with an exercise price of $3.03 per share. The grant was related to performance and was not vested. On November 4, 2019, the Company granted a stock option grant to Ronald P. Erickson for 1,200,000 shares with an exercise price of $1.10 per share. The performance grant expires November 4, 2024 and vests upon uplisting to the NASDAQ or NYSE exchanges. On January 1, 2020, the Company issued 100,000 shares of restricted common stock to Ronald P. Erickson. The shares were issued in accordance with the 2011 Stock Incentive Plan and were valued at $1.90 per share, the market price of our common stock, or $190,000. On June 1, 2020, Mr. Erickson received a salary of $10,000 per month for work on Particle, Inc. This salary was cancelled as of August 15, 2021. On July 2, 2020, Particle issued a stock option grant for 1,500,000 shares at $0.10 per share to Ronald P. Erickson. The stock option grant vests (i) 33.3% upon issuance; (ii) 33.3% after the first sale; and (iii) 33.4% after one million in sales are achieved. The stock option grant was forfeited as of September 30, 2021. 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 exercisable for cash or non-cash 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. Mr. Erickson and/or entities with which he is affiliated also have accrued compensation, travel and interest of approximately $421,599 and $597,177 as of September 30, 2021 and 2020, respectively. During the year ended September 30, 2021, the Company paid $272,500 of salaries to Mr. Erickson that were previously accrued and reported but were deferred. On September 30, 2021, the Company approved Amendments to the convertible redeemable promissory notes with Ronald P. Erickson and J3E2A2Z, extending the due dates to March 31, 2022. Related Party Transaction with Phillip A. Bosua See Notes 9, 10 and 12 for related party transactions with Phillip A. Bosua. On October 4, 2019, Philip A. Bosua voluntarily cancelled a stock option grant for 1,000,000 shares with an exercise price of $3.03 per share. The grants was related to performance and was not vested. On November 4, 2019, the Company granted a stock option grant to Philip A. Bosua for 1,200,000 shares with an exercise price of $1.10 per share. The performance grant expires November 4, 2024 and vests upon FDA approval of the UBAND blood glucose monitor. On January 1, 2020, the Company issued 150,000 shares of restricted common stock to Phillip A. Bosua. The shares were issued in accordance with the 2011 Stock Incentive Plan and were valued at $1.90 per share, the market price of the Company’s common stock, or $285,000. On June 1, 2020, Mr. Bosua received a salary of $10,000 per month for work on Particle, Inc. This salary was cancelled as of August 15, 2021. On July 2, 2020, Particle issued a stock option grant for 1,500,000 shares at $0.10 per share to Philip A. Bosua. The stock option grant vests (i) 33.3% upon issuance; (ii) 33.3% after the first sale; and (iii) 33.4% after one million in sales are achieved. The stock option grant was forfeited as of September 30, 2021. 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. On March 18, 2021, the Company approved a $250,000 bonus for Mr. Bosua. The bonus was paid during April 2021. Stock Issuances and Cancellations to Named Executive Officers and Directors On November 4, 2019, the Company granted stock option grants to two directors totaling 105,000 shares with an exercise price of $1.10 per share. The stock option grants expire in five years. The stock option grants vested immediately. On January 1, 2020, the Company issued 120,000 shares of restricted common stock to three directors. The shares were issued in accordance with the 2011 Stock Incentive Plan and were valued at $1.90 per share, the market price of the Company’s common stock, or $228,000. 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. |
COMMITMENTS CONTINGENCIES AND L
COMMITMENTS CONTINGENCIES AND LEGAL PROCEEDINGS | 6 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Sep. 30, 2021 | |
COMMITMENTS CONTINGENCIES AND LEGAL PROCEEDINGS | ||
COMMITMENTS, CONTINGENCIES AND LEGAL PROCEEDINGS | 11. 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 21, 2021. 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 21, 2021. Properties and Operating Leases The Company is obligated under the following leases for its various facilities. Corporate Offices On April 13, 2017, the Company leased its executive office located at 500 Union Street, Suite 810, Seattle, Washington, USA, 98101. The Company leases 943 square feet and the current net monthly payment is $3,334. The monthly payment increases approximately 3% each year and the lease expires on May 31, 2022. On October 31, 2021, the Company extended the lease from June 1, 2022 to May 31, 2023 at $2,986 per month. Lab Facilities and Executive Offices On February 1, 2019, the Company leased its lab facilities and executive offices located at 915 E Pine Street, Suite 212, Seattle, WA 98122. The Company leases 2,642 square feet and the net monthly payment at September 30, 2021 is $8,697. The monthly payment increases approximately 3% annually each year on July 1. The lease expires on June 30, 2024. On October 11, 2021, the Company entered into First Amendment of Lease and added 1,030 square feet for year for $1,000 for $5,000 per month. The space will be utilized for clinical trials. | 12. 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 Phillip A. Bosua was appointed our Chief Executive Officer on April 10, 2018. Previously, Mr. Bosua served as the Company’s Chief Product Officer since August 2017. The Company entered into a Consulting Agreement with Mr. Bosua’s company, Blaze Clinical on July 7, 2017. From September 2012 to February 2015, Mr. Bosua was the founder and Chief Executive Officer of LIFX Inc. (where he developed and marketed an innovative “smart” light bulb) and from August 2015 until February 2016 was Vice President Consumer Products at Soraa (which markets specialty LED light bulbs). From February 2016 to July 2017, Mr. Bosua was the founder and CEO of RAAI, Inc. (where he continued the development of his smart lighting technology). From May 2008 to February 2013 he was the Founder and CEO of LimeMouse Apps, a leading developer of applications for the Apple App Store. On April 10, 2018, we entered into an Employment Agreement with Mr. Bosua reflecting his appointment as Chief Executive Officer. The Employment Agreement is for an initial term of 12 months (subject to earlier termination) and will be automatically extended for additional 12-month terms unless either party notifies the other party of its intention to terminate the Employment Agreement with at least ninety (90) days prior to the end of the Initial Term or renewal term. Mr. Bosua was paid a base salary of $225,000 per year, received 500,000 shares of common stock valued at $0.33 per share and may be entitled to bonuses and equity awards at the discretion of the Board or a committee of the Board. The Employment Agreement provides for severance pay equal to 12 months of base salary if Mr. Bosua is terminated without “cause” or voluntarily terminates his employment for “good reason.” During the years ended September 30, 2021 and 2020, the Compensation Committee and the Board compensated Phillip A. Bosua, its Chief Executive Officer, with an annual salary of $240,000 from October 1, 2019 to May 1, 2020. May 1, 2020 to March 31, 2021, the annual compensation was $260,000. From April 1, 2021 to September 30, 2021, the annual compensation was $350,000. The Compensation Committee and the Board of Particle, Inc. compensated Phillip A. Bosua with an annual salary of $120,000 from June 1, 2020 to August 15, 2021. Mr. Bosua will be entitled to participate in all group employment benefits that are offered by us to our senior executives and management employees from time to time, subject to the terms and conditions of such benefit plans, including any eligibility requirements. If the Company terminates Mr. Bosua’s employment at any time prior to the expiration of the Term without Cause, as defined in the Employment Agreement, or if Mr. Bosua terminates his employment at any time for “Good Reason” or due to a “Disability,” Mr. Bosua will be entitled to receive (i) his Base Salary amount for one year; and (ii) medical benefits for eighteen months. Employment Agreement with Ronald P. Erickson, Chairman of the Board and Interim Chief Financial Officer On April 10, 2018, we entered into an Amended Employment Agreement for Ronald P. Erickson which amends the Employment Agreement dated July 1, 2017. The Agreement expires March 21, 2019. automatically be extended for additional one (1) year periods unless either Party delivers written notice of such Party’s intention to terminate this Agreement at least ninety (90) days prior to the end of the Initial Term or renewal term. During the years ended September 30, 2021 and 2020, the Compensation Committee and the Board compensated Ronald P. Erickson, its Chairman of the Board and Interim Financial Officer, with an annual salary of $195,000 from October 1, 2019 to May 1, 2020. From May 1, 2020 to March 31, 2021, the annual compensation was $215,000. From April 1, 2021 to September 30, 2021, the annual compensation was $300,000. The Compensation Committee and the Board of Particle Inc. compensated Ronald P. Erickson with an annual salary of $120,000 from June 1, 2020 to August 15, 2021. Mr. Erickson will be entitled to participate in all group employment benefits that are offered by us to our senior executives and management employees from time to time, subject to the terms and conditions of such benefit plans, including any eligibility requirements. If the Company terminates Mr. Erickson’s employment at any time prior to the expiration of the Term without Cause, as defined in the Employment Agreement, or if Mr. Erickson terminates his employment at any time for “Good Reason” or due to a “Disability,” Mr. Erickson will be entitled to receive (i) his Base Salary amount for one year; and (ii) medical benefits for eighteen months. Properties and Operating Leases The Company is obligated under the following leases for its various facilities. Corporate Offices On April 13, 2017, the Company leased its executive office located at 500 Union Street, Suite 810, Seattle, Washington, USA, 98101. The Company leases 943 square feet and the current net monthly payment is $3,334. The monthly payment increases approximately 3% each year and the lease expires on May 31, 2022. Lab Facilities and Executive Offices On February 1, 2019, the Company leased its lab facilities and executive offices located at 915 E Pine Street, Suite 212, Seattle, WA 98122. We lease 2,642 square feet and the net monthly payment at September 30, 2021 is $8,697. The monthly payment increases approximately 3% annually each year on July 1. The lease expires on June 30, 2024. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Sep. 30, 2021 | |
INCOME TAXES | |
INCOME TAXES | 13. INCOME TAXES The Company has incurred losses since inception, which have generated net operating loss carryforwards. The net operating loss carryforwards arise from United States sources. Losses arising from United States taxable operations were approximately $6.5 million and $5.1 million for the years ended September 30, 2021 and 2020. The Company has Federal net operating loss carryforwards of approximately $43.8 million which expire in 2028-2041. Because it is not more likely than not that sufficient tax earnings will be generated to utilize the net operating loss carryforwards, a corresponding valuation allowance equal to 100% of the gross deferred tax asset of approximately $9.7 million and $8.0 million was established as of September 30, 2021 and 2020. The Company does not recognize the majority of state tax loss operating loss carryforwards as a deferred tax asset given it no longer has any operation in that state. Under the Tax Reform Act of 1986, the amounts of, and benefits from, net operating losses may be limited in certain circumstances, including a change in control. Section 382 of the Internal Revenue Code generally imposes an annual limitation on the amount of net operating loss carryforwards that may be used to offset taxable income when a corporation has undergone significant changes in its stock ownership. There can be no assurance that the Company will be able to utilize any net operating loss carryforwards in the future. The Company is subject to possible tax examination for the years 2016 through 2021. The principal components of the Company’s deferred tax assets at September 30, 2021 and 2020 are as follows: 2021 2020 Net operating loss carryforward $ 8,051,000 $ 6,536,000 Stock based compensation 975,000 1,196,000 Intangibles 276,000 305,000 Accruals and reserves 399,000 11,000 Total deferred tax asset 9,701,000 8,048,000 Valuation allowance (9,701,000 ) (8,048,000 ) Net deferred tax assets $ - $ - Change in valuation allowance during the year $ (1,653,000 ) $ (1,092,357 ) A reconciliation of the United States Federal Statutory rate to the Company’s effective tax rate for the years ended September 30, 2021 and 2020 are as follows. For the year ended September 30, 2021 and 2020, the Company’s effective tax rate differs from the federal statutory rate principally due to non deductible warrant interest expense plus an increase in the deferred tax asset valuation allowance. 2021 2020 Income tax provision at statutory rate -21.0 % -21.0 % Warrant interest expense 12 % 9 % Change in valuation allowance 7 % 9 % Prior year true up 2 % 3 % Effective tax rate 0 % 0 % As of September 30, 2021, there were no uncertain tax positions. Management does not anticipate any future adjustments in the next twelve months which would result in a material change to its tax position. For the years ended September 30, 2021 and 2020, the Company did not have any interest and penalties. |
SEGMENT REPORTING
SEGMENT REPORTING | 6 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Sep. 30, 2021 | |
SEGMENT REPORTING | ||
SEGMENT REPORTING | 12. SEGMENT REPORTING The management of the Company considers the business to currently have three operating segments (i) the development of the Bio-RFID™” and “ChromaID™” technologies; (ii) Particle, Inc. technology; and (iii) AI sales of NFT products. Particle commenced operations in the three months ended June 30, 2020. AI commenced operations during the six months ended March 31, 2022. The reporting for the three and six months ended March 31, 2022 and 2021 was as follows (in thousands): Operating Segment Segment Revenue (Loss) Assets Three Months Ended March 31, 2022 Development of the Bio-RFID™” and “ChromaID™” technologies $ - $ (2,682 ) $ 12,543 Particle, Inc. technology - (15 ) 1 Digital asset sales 9 (146 ) 119 Total segments $ 9 $ (2,843 ) $ 12,663 Three Months Ended March 31, 2021 Development of the Bio-RFID™” and “ChromaID™” technologies $ - $ (2,179 ) $ 15,759 Particle, Inc. technology - (423 ) 149 Total segments $ - $ (2,602 ) $ 15,908 Segment Operating Segment Segment Revenue Profit (Loss) Assets Six Months Ended March 31, 2022 Development of the Bio-RFID™” and “ChromaID™” technologies $ - $ (4,778 ) $ 12,543 Particle, Inc. technology - (22 ) 1 Digital asset sales 4,361 1,088 119 Total segments $ 4,361 $ (3,712 ) $ 12,663 Six Months Ended March 31, 2021 Development of the Bio-RFID™” and “ChromaID™” technologies $ - $ (5,369 ) $ 15,759 Particle, Inc. technology - (796 ) 149 Total segments $ - $ (6,165 ) $ 15,908 During the six months ended March 31, 2022 and 2021, the Company incurred non-cash expenses related to operations of $8,240,647 and $7,027,922, respectively. | 14. SEGMENT REPORTING The management of the Company considers the business to currently have two operating segments (i) the development of the Bio-RFID™” and “ChromaID™” technologies; (ii) Particle, Inc. technology. ) TransTech, a distributor of products for employee and personnel identification and authentication was shut down on June 30, 2020. Particle commenced operations in the three months ended June 30, 2020. The reporting for the year ended September 30, 2021 and 2020 was as follows (in thousands): Gross Operating Segment Segment Revenue Margin (Loss) Assets Year Ended September 30, 2021 Development of the Bio-RFID™” and “ChromaID™” technologies $ - $ - $ (9,373 ) $ 12,867 Particle, Inc. technology - - (1,073 ) 22 TransTech distribution business - - - - Total segments $ - $ - $ (10,446 ) $ 12,889 Year Ended September 30, 2020 Development of the Bio-RFID™” and “ChromaID™” technologies $ - $ - $ (5,481 ) $ 4,360 Particle, Inc. technology - - (1,280 ) 322 TransTech distribution business 122 70 (65 ) - Total segments $ 122 $ 70 $ (6,826 ) $ 4,682 During years ended September 30, 2021 and 2020, the Company incurred non-cash expenses related to operations of $3,979,584 and $2,990,072. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Sep. 30, 2021 | |
SUBSEQUENT EVENTS | ||
SUBSEQUENT EVENTS | 13. 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 March 31, 2022, there were the following material transactions that require disclosure: Extension of Convertible Promissory Notes with Clayton A. Struve On May 3, 2022, the Company approved the Amendment to the senior secured convertible redeemable notes with Clayton A. Struve, extending the due dates to September 30, 2022. Extension of Convertible Redeemable Promissory Notes with Ronald P. Erickson and J3E2A2Z On April 4, 2022, the Company approved Amendments to the convertible redeemable promissory notes with Ronald P. Erickson and J3E2A2Z, extending the due dates to September 30, 2022. Extension of Warrant Agreement with Clayton A. Struve On May 3, 2022, the Company approved the Extension of Warrant Agreement with Clayton Struve, extending the exercise dates as follows: Warrant No./Class Issue Date No. Warrant Shares Exercise Price Original Expiration Date Amended Expiration Date Clayton A. Struve Warrant 08-14-2017 1,440,000 $ 0.25 08-13-2023 08-13-2024 Clayton A. Struve Warrant 12-12-2017 1,200,000 $ 0.25 12-11-2023 12-11-2024 Clayton A. Struve Warrant 08-04-2016 1,785,715 $ 0.25 08-04-2023 08-04-2024 Clayton A. Struve Warrant 02-28-2018 1,344,000 $ 0.25 02-28-2023 02-28-2024 Note Payable-PPP Loan 1 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 March 31, 2022 and September 30, 2021, the Company recorded interest expense of $4,350 and $3,222, respectively. On April 27, 2022, the Company was notified by the SBA that the Company is required to repay principal of $98,106 and interest of $1,997. The loan balance of $128,064 was forgiven. | 15. 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 September 30, 2021, there were the following material transactions that require disclosure: Annual Shareholder Meeting On October 15, 2021, the Company held its annual shareholder meeting. The Company’s shareholders approved and adopted various motions as detailed in the Company’s Form 8-K that was filed with the SEC on October 19, 2021. 2021 Equity Incentive Plan On October 15, 2021, at the annual shareholder meeting held on October 15, 2021, the 2021 Equity Incentive Plan was adopted and approved, increasing size of the stock available under the Stock Option Plan to 20,000,000 shares. On December 10, 2021, the Company filed a registration statement on Form S-8 that registered 34,650,120 shares issued under the 2011 Stock Incentive Plan and 2021 Equity Incentive Plan. Second Amended and Restated Bylaws On October 15, 2021, the shareholders of the Company approving the Second Amended and Restated Bylaws effective October 15, 2021. Lease Modifications On April 13, 2017, the Company leased its executive office located at 500 Union Street, Suite 810, Seattle, Washington, USA, 98101. The Company leases 943 square feet and the current net monthly payment is $3,334. The monthly payment increases approximately 3% each year and the lease expires on May 31, 2022. On October 31, 2021, the Company extended the lease from June 1, 2022 to May 31, 2023 at $2,986 per month. On February 1, 2019, the Company leased its lab facilities and executive offices located at 915 E Pine Street, Suite 212, Seattle, WA 98122. The Company leases 2,642 square feet and the net monthly payment at September 30, 2021 is $8,697. The monthly payment increases approximately 3% annually each year on July 1. The lease expires on June 30, 2024. On October 11, 2021, the Company entered into First Amendment of Lease and added 1,030 square feet for year for $1,000 for $5,000 per month. The space will be utilized for clinical trials. Extension of Convertible Promissory Notes with Clayton A. Struve On November 8, 2021, the Company signed Amendments to the convertible promissory or OID notes, extending the due dates to March 31, 2022. Certificate of Amendment to Articles of Incorporation On December 6, 2021, the Company received approval from the State of Nevada for a Certificate of Amendment to the Articles of Incorporation related to the increase in the number of authorized common shares. AI Revenue On December 16, 2021, the Company, announced the Company’s Artificial Intelligence (AI) Deep Learning Platform has generated initial revenue of approximately $4.2 million from Non-Fungible Token (NFT) sales. Note Payable-PPP Loans 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). The Company filed the application for the loan forgiveness during the three months ended December 31, 2021 and the Company is expecting approval by the SBA. On February 1, 2021, the Company received $205,633 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). The Company filed the application for the loan forgiveness during the three months ended December 31, 2021 and the Company is expecting approval by the SBA. Stock Option Exercises and Issuances The Company issued 803,361 shares of common stock related to warrant and stock option exercises and received $768,830. The Compensation committee issued stock option grants to seven employees and three consultants for 910,000 shares at an exercise price of $2.09 per share. The stock option grants expire in five years. The stock option grant vests quarterly over four years. On December 16, 2021, the Company issued a stock option grant to Ronald P. Erickson for 1,000.000 shares at an exercise price of $2.09 per share. The stock option grant expires in five years. The stock option grant vests quarterly over four years. On December 16, 2021, the Company issued a stock option grant to Phillip A. Bosua for 1,300,000 shares at an exercise price of $2.09 per share. The stock option grant expires in five years. The stock option grant vests quarterly over four years. On December 16, 2021, the Company approved 30,000 shares each to three directors shares at terms to be determined during January 2022. On December 16, 2021, the Company issued 20,000 warrants to purchase common stock each to three directors shares at terms to be determined during January 2022. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES ADOPTION OF ACCOUNTING STANDARDS (Policies) | 6 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Sep. 30, 2021 | |
SIGNIFICANT ACCOUNTING POLICIES ADOPTION OF ACCOUNTING STANDARDS | ||
Basis of Presentation | Basis of Presentation | Basis of Presentation |
Principles of Consolidation | Principles of Consolidation | Principles of Consolidation |
Cash and Cash Equivalents | Cash and Cash Equivalents | Cash and Cash Equivalents |
Equipment | Equipment | Equipment |
Long-Lived Assets | Long-Lived Assets | Long-Lived Assets |
Intangible 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 $2,134,459, $3,969,972 and $2,033,726 for the six months ended March 31, 2022 and the years ended September 30, 2021 and 2020, respectively, on development activities. | 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 $3,969,972 and $2,033,726 for the year ended September 30, 2021 and 2020, respectively, on development activities. |
Advertising | 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 March 31, 2022 and September 30, 2021 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 March 31, 2022 and September 30, 2021 was 8,036,515 and $12,217,714, respectively. | 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 September 30, 2021 and 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 September 30, 2021 and 2020 was $12,217,714 and $4,252,959, respectively. |
Derivative Financial Instruments | Derivative Financial Instruments – The Company determined that the conversion features for purposes of bifurcation within convertible notes payable were immaterial and there was no derivative liability to be recorded as of March 31, 2022 and September 30, 2021. | 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 September 30, 2021 and 2020. |
Stock Based Compensation | Stock Based Compensation | Stock Based Compensation |
Convertible Securities | Convertible Securities | Convertible Securities |
Net Loss per Share | Net Loss per Share As of March 31, 2021, the Company had 28,257,467 shares of common stock issued and outstanding. As of March 31, 2021, there were options outstanding for the purchase of 14,786,995 common shares (including unearned stock option grants totaling 11,775,745 shares related to performance targets), warrants for the purchase of 23,440,456 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 21,049,264 common shares (9,020,264 common shares at the current price of $0.25 per share, 4,924,500 common shares at the current price of $1.00 per share and 7,104,500 common shares at the current price of $2.00 per share) reserved and are issuable upon conversion of convertible debentures of $19,133,500. All of which could potentially dilute future earnings per share but are excluded from the March 31, 2021 calculation of net loss per share because their impact is antidilutive. | Net Loss per Share As of September 30, 2020, there were options outstanding for the purchase of 4,805,000 common shares (including unearned stock option grants totaling 2,630,000 shares related to performance targets), warrants for the purchase of 20,016,367common 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 14,659,764 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 are issuable upon conversion of convertible debentures of $7,894,566. All of which could potentially dilute future earnings per share but excluded from the September 30, 2020 calculation of net loss per share because their impact is antidilutive. |
Comprehensive Loss | Comprehensive loss | Comprehensive loss |
Dividend Policy | Dividend Policy | Dividend Policy |
Use of Estimates | Use of Estimates | Use of Estimates |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Debt -- debt with Conversion and Other Options (Subtopic470-20) and Derivatives and Hedging --Contracts in Entity’ Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’ Own Equity Based on the Company’s review of accounting standard updates issued since the filing of the March 31, 2022 Form 10-Q, 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. | In August 2020, the FASB issued Accounting Standards Update (“ASU”) No. 2020-06, Debt --debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging --Contracts in Entity’ Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’ Own Equity Based on the Company’s review of accounting standard updates issued since the filing of the 2021 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. |
Revenue Recognition | Revenue Recognition · identification of the contract, or contracts, with the customer; · identification of the performance obligations in the contract; · determination of the transaction price; · allocation of the transaction price to the performance obligations in the contract; and · recognition of the revenue when, or as, the Company satisfies a performance obligation. Revenue is recognized when control of the promised goods or services is transferred to the customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. During the six months ended March 31, 2022, the Company’s artificial intelligence (AI) Deep Learning Platform began generating revenue from digital asset sales of NFT’s. The Company engineering team, using its research date, AI and proprietary algorithms, produced NFT’s in the form of digital art. The NFT’s produced had no recorded cost basis. | |
Digital Asset Sales | Digital Asset Sales - After the sale of the NFT, the Ethereum is converted to US dollars as soon as practically possible. The Company records the total value of the gross NFT sale in revenue. Costs incurred in connection with the NFT transaction are recorded in the statement of operations as Selling and Transactional Cost of Digital Assets and include costs to outside consultants, estimated employee and CEO special bonus compensation, and estimated sales and use tax. |
FIXED ASSETS (Tables)
FIXED ASSETS (Tables) | 6 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Sep. 30, 2021 | |
PROPERTY AND EQUIPMENT | ||
Schedule of Property and equipment | Estimated Useful Lives March 31, 2022 September 30, 2021 Machinery and equipment 2-3 years $ 1,481,754 $ 654,798 Leasehold improvements 5 years 3,612 3,612 Furniture and fixtures 5 years 26,855 26,855 Less: accumulated depreciation (474,829 ) (356,761 ) $ 1,037,392 $ 328,504 | Estimated Useful Lives September 30, 2021 September 30, 2020 Machinery and equipment 2-3 years $ 654,798 $ 355,272 Leasehold improvements 5 years 3,612 3,612 Furniture and fixtures 5 years 26,855 26,855 Less: accumulated depreciation (356,761 ) (257,068 ) $ 328,504 $ 128,671 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 6 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Sep. 30, 2021 | |
PROPERTY AND EQUIPMENT | ||
Schedule of Property and equipment | Estimated Useful Lives March 31, 2022 September 30, 2021 Machinery and equipment 2-3 years $ 1,481,754 $ 654,798 Leasehold improvements 5 years 3,612 3,612 Furniture and fixtures 5 years 26,855 26,855 Less: accumulated depreciation (474,829 ) (356,761 ) $ 1,037,392 $ 328,504 | Estimated Useful Lives September 30, 2021 September 30, 2020 Machinery and equipment 2-3 years $ 654,798 $ 355,272 Leasehold improvements 5 years 3,612 3,612 Furniture and fixtures 5 years 26,855 26,855 Less: accumulated depreciation (356,761 ) (257,068 ) $ 328,504 $ 128,671 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
INTANGIBLE ASSETS | |
Schedule of intangible assets | Estimated September 30, September 30, Useful Lives 2021 2020 Technology 3 years $ 520,000 $ 520,000 Less: accumulated amortization (520,000 ) (418,886 ) Intangible assets, net $ - $ 101,114 |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Sep. 30, 2021 | |
LEASES | ||
Summary of minimum future lease payments | Years Ended March 31, $ 2022 $ 170,489 2023 117,941 2024 27,411 Total remaining payments 315,840 Less Imputed Interest (20,042 ) Total lease liability $ 295,798 | Years Ended September 30, $ 2022 $ 128,987 2023 107,662 2024 73,095 2025 - 2026 - Total Remaining Payments 309,744 Of which Imputed Interest (19,203 ) Total Lease Liability $ 290,541 |
CONVERTIBLE NOTES PAYABLE AND_2
CONVERTIBLE NOTES PAYABLE AND NOTE PAYABLE (Tables) | 6 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Sep. 30, 2021 | |
CONVERTIBLE NOTES PAYABLE AND NOTE PAYABLE | ||
Schedule of convertible notes | March 31, 2022 September 30, 2021 Convertible note- Clayton A. Struve $ 1,071,000 $ 1,071,000 Convertible note- Ronald P. Erickson and affiliates 1,184,066 1,184,066 2020 Convertible notes - 5,639,500 2021 Convertible notes 14,209,000 14,209,000 Boustead fee refund (originally booked as contra debt) - 50,000 Less conversions of notes (14,209,000 ) (5,639,500 ) Less debt discount - BCF - (4,308,337 ) Less debt discount - warrants - (1,957,590 ) Less debt discount - warrants issued for services - (1,056,984 ) $ 2,255,066 $ 9,191,155 | September 30, 2021 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 2020 Convertible notes 5,639,500 5,639,500 Q2 2021 Convertible notes 14,209,000 - Boustead fee refund (originally booked as contra debt) 50,000 50,000 Less conversions of notes (9,881,990 ) (4,242,490 ) Less debt discount - BCF (4,308,337 ) (2,127,894 ) Less debt discount - warrants (1,957,590 ) (1,025,512 ) Less debt discount - warrants issued for services (1,056,984 ) (823,582 ) $ 9,191,155 $ 3,967,578 |
EQUITY (Tables)
EQUITY (Tables) | 6 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Sep. 30, 2021 | |
EQUITY | ||
Warrant activity | March 31, 2022 Weighted Average Exercise Shares Price Outstanding at beginning of period 22,564,255 $ 0.998 Issued 60,000 - Exercised (801,486 ) (0.956 ) Forfeited - - Expired (108,756 ) (1.000 ) Outstanding at end of period 21,714,013 $ 1.001 Exerciseable at end of period 21,714,013 | September 30, 2021 Weighted Average Exercise Shares Price Outstanding at beginning of period 20,016,367 $ 0.556 Issued 6,608,789 2.117 Exercised (3,676,542 ) (0.582 ) Forfeited (384,359 ) (1.155 ) Expired - - Outstanding at end of period 22,564,255 $ 0.998 Exerciseable at end of period 22,564,255 |
Warrants outstanding and exercisable | March 31, 2022 Weighted Weighted Weighted Average Average Average Number of Remaining Exercise Shares Exercise Warrants Life ( In Years) Price Exercisable Price 10,779,381 1.02 $ 0.250 10,779,381 $ 0.250 6,559,707 2.84 1.20-1.85 6,559,707 1.20-1.85 4,364,925 4.00 2.00-2.40 4,364,925 2.00-2.40 10,000 1.25 4.080 10,000 4.080 21,714,013 3.17 $ 1.001 21,714,013 $ 1.001 | September 30, 2021 Weighted Weighted Weighted Average Average Average Number of Remaining Exercise Shares Exercise Warrants Life ( In Years) Price Exerciseable Price 10,829,381 1.24 $ 0.250 10,829,381 $ 0.250 847,742 0.12 1.000 847,742 1.000 6,512,207 3.32 1.20-1.85 6,512,207 1.20-1.85 4,364,925 4.50 2.00-2.40 4,364,925 2.00-2.40 10,000 1.75 4.080 10,000 4.080 22,564,255 3.49 $ 0.998 22,564,255 $ 0.998 |
Weighted average assumptions relating to the valuation of the Company's warrants | Dividend yield 0 % Expected life 3-5 years Expected volatility 140 % Risk free interest rate 0.37 % |
STOCK INCENTIVE PLANS (Tables)
STOCK INCENTIVE PLANS (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Sep. 30, 2021 | |
EQUITY | ||
Stock option activity | Weighted Average Options Exercise Price Proceed $ Outstanding as of October 1, 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 10,650,745 1.766 18,807,990 Exercised (20,625 ) (1.359 ) (28,031 ) Forfeitures (120,000 ) (3.300 ) (396,000 ) Outstanding as of September 30, 2021 15,315,120 1.565 23,964,509 Granted 3,385,000 2.087 7,062,900 Exercised (6,875 ) (1.650 ) (11,344 ) Forfeitures (815,000 ) (1.842 ) (1,501,350 ) Outstanding as of March 31, 2022 17,878,245 $ 1.651 $ 29,514,715 | Weighted Average Options Exercise Price $ 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 10,650,745 1.766 18,807,990 Exercised (20,625 ) (1.359 ) (28,031 ) Forfeitures (120,000 ) (3.300 ) (396,000 ) Outstanding as of September 30, 2021 15,315,120 $ 1.565 $ 23,964,509 |
Summarize information about particle stock option and exercisable | Weighted Weighted Weighted Average Average Average Range of Number Remaining Life Exercise Price Number Exercise Price Exercise Prices Outstanding In Years Outstanding Exerciseable Exerciseable $ 0.25 230,000 1.71 0.250 172,500 $ 0.250 1.10-1.25 3,074,375 3.15 1.108 445,456 1.105 1.28-1.53 9,480,745 3.58 1.499 993,750 1.307 1.79-3.67 2,530,000 4.64 2.192 108,750 1.895 15,315,120 3.82 $ 1.565 1,720,456 $ 1.316 | |
Stock options outstanding and exercisable | Weighted Weighted Weighted Average Average Average Range of Number Remaining Life Exercise Price Number Exercise Price Exercise Prices Outstanding In Years Outstanding Exerciseable Exerciseable $ 0.25 230,000 1.21 $ 0.250 186,875 $ 0.250 1.10-1.25 2,932,500 2.60 1.101 514,531 1.105 1.28-1.53 9,280,745 3.45 1.501 1,098,125 1.302 1.79-3.67 5,435,000 4.50 2.263 413,750 1.826 17,878,245 3.80 $ 1.651 2,213,281 $ 1.445 |
OTHER SIGNIFICANT TRANSACTIONS
OTHER SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
SIGNIFICANT AND OTHER TRANSACTIONS WITH RELATED PARTIES | |
Related party transactions | 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 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
INCOME TAXES | |
Schedule of components of the Company's deferred tax assets | 2021 2020 Net operating loss carryforward $ 8,051,000 $ 6,536,000 Stock based compensation 975,000 1,196,000 Intangibles 276,000 305,000 Accruals and reserves 399,000 11,000 Total deferred tax asset 9,701,000 8,048,000 Valuation allowance (9,701,000 ) (8,048,000 ) Net deferred tax assets $ - $ - Change in valuation allowance during the year $ (1,653,000 ) $ (1,092,357 ) |
Schedule of effective tax rate reconciliation | 2021 2020 Income tax provision at statutory rate -21.0 % -21.0 % Warrant interest expense 12 % 9 % Change in valuation allowance 7 % 9 % Prior year true up 2 % 3 % Effective tax rate 0 % 0 % |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 6 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Sep. 30, 2021 | |
SEGMENT REPORTING | ||
Segment reporting | Operating Segment Segment Revenue (Loss) Assets Three Months Ended March 31, 2022 Development of the Bio-RFID™” and “ChromaID™” technologies $ - $ (2,682 ) $ 12,543 Particle, Inc. technology - (15 ) 1 Digital asset sales 9 (146 ) 119 Total segments $ 9 $ (2,843 ) $ 12,663 Three Months Ended March 31, 2021 Development of the Bio-RFID™” and “ChromaID™” technologies $ - $ (2,179 ) $ 15,759 Particle, Inc. technology - (423 ) 149 Total segments $ - $ (2,602 ) $ 15,908 Segment Operating Segment Segment Revenue Profit (Loss) Assets Six Months Ended March 31, 2022 Development of the Bio-RFID™” and “ChromaID™” technologies $ - $ (4,778 ) $ 12,543 Particle, Inc. technology - (22 ) 1 Digital asset sales 4,361 1,088 119 Total segments $ 4,361 $ (3,712 ) $ 12,663 Six Months Ended March 31, 2021 Development of the Bio-RFID™” and “ChromaID™” technologies $ - $ (5,369 ) $ 15,759 Particle, Inc. technology - (796 ) 149 Total segments $ - $ (6,165 ) $ 15,908 | Gross Operating Segment Segment Revenue Margin (Loss) Assets Year Ended September 30, 2021 Development of the Bio-RFID™” and “ChromaID™” technologies $ - $ - $ (9,373 ) $ 12,867 Particle, Inc. technology - - (1,073 ) 22 TransTech distribution business - - - - Total segments $ - $ - $ (10,446 ) $ 12,889 Year Ended September 30, 2020 Development of the Bio-RFID™” and “ChromaID™” technologies $ - $ - $ (5,481 ) $ 4,360 Particle, Inc. technology - - (1,280 ) 322 TransTech distribution business 122 70 (65 ) - Total segments $ 122 $ 70 $ (6,826 ) $ 4,682 |
SUBSEQUENT EVENT (Tables)
SUBSEQUENT EVENT (Tables) | 6 Months Ended |
Mar. 31, 2022 | |
SUBSEQUENT EVENTS | |
Schedule of extension of warrant agreement | Warrant No./Class Issue Date No. Warrant Shares Exercise Price Original Expiration Date Amended Expiration Date Clayton A. Struve Warrant 08-14-2017 1,440,000 $ 0.25 08-13-2023 08-13-2024 Clayton A. Struve Warrant 12-12-2017 1,200,000 $ 0.25 12-11-2023 12-11-2024 Clayton A. Struve Warrant 08-04-2016 1,785,715 $ 0.25 08-04-2023 08-04-2024 Clayton A. Struve Warrant 02-28-2018 1,344,000 $ 0.25 02-28-2023 02-28-2024 |
ORGANIZATION (Details Narrative
ORGANIZATION (Details Narrative) - USD ($) | 6 Months Ended | |||
Mar. 31, 2022 | Oct. 15, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | |
ORGANIZATION | ||||
Authorized shares of capital common stock | 200,000,000 | 205,000,000 | 100,000,000 | |
Authorized shares of capital stock par value | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 |
Preferred stock shares authorized | 5,000,000 | 5,000,000 | 5,000,000 | |
Preferred stock share par value | $ 0.001 | $ 0.001 | $ 0.001 | |
Sales | $ 4,360,000 | |||
Authorized common stock increased | 200,000,000 |
LIQUIDITY and GOING CONCERN (De
LIQUIDITY and GOING CONCERN (Details Narrative) - USD ($) | Mar. 15, 2021 | Mar. 31, 2022 | Sep. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2020 | Sep. 30, 2019 |
LIQUIDITY and GOING CONCERN | ||||||
Cash and cash equivalents | $ 11,187,073 | $ 12,258,218 | $ 15,696,579 | $ 4,298,179 | $ 1,900,836 | |
Working capital | 8,355,273 | 10,092,586 | ||||
Accumulated deficit | $ (92,823,851) | $ (81,326,494) | $ (55,966,281) | |||
Gross proceeds from private placement | $ 14,209,000 | |||||
Warrants in private placement to accredited investors | 3,552,250 | |||||
Convertible notes converted into common stock, per share | $ 2 | |||||
Bear annual interest rate | 8% |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES ADOPTION OF ACCOUNTING STANDARDS (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 15, 2020 | Jul. 06, 2020 | |
FDIC insurance | $ 250,000 | $ 250,000 | $ 250,000 | |||||
Research and development expense | 1,248,707 | $ 1,258,678 | 2,134,459 | $ 2,225,539 | 3,969,972 | $ 2,033,726 | ||
Advertising and marketing costs | 387,434 | $ 162,933 | 329,375 | 230,844 | ||||
Money market accounts | $ 8,036,515 | $ 8,036,515 | $ 12,217,714 | $ 4,252,959 | ||||
Common stock shares issued | 43,737,772 | 28,257,467 | 43,737,772 | 28,257,467 | 35,166,551 | 24,804,874 | 500,000 | |
Common stock shares outstanding | 43,737,772 | 28,257,467 | 43,737,772 | 28,257,467 | 35,166,551 | 24,804,874 | ||
Issuable upon conversion of convertible debentures | 2,255,066 | 19,133,500 | 2,255,066 | 19,133,500 | 16,124,764 | 7,894,566 | ||
Uninsured deposits | $ 12,008,228 | $ 4,048,179 | ||||||
Unearned stock option grants | 32,629,376 | |||||||
Common shares current price per share | $ 1.90 | $ 1.20 | $ 1.155 | |||||
Convertible Preferred Stock | ||||||||
Antidilutive securities | 8,108,356 | 8,108,356 | 8,108,356 | 8,108,356 | ||||
Warrants | ||||||||
Antidilutive securities | 17,878,245 | 22,564,255 | 20,016,367 | |||||
Stock Option 1 | ||||||||
Unearned stock option grants | 11,550,745 | 11,775,745 | 11,775,745 | 2,630,000 | ||||
Antidilutive securities | 23,440,456 | 15,315,120 | 4,805,000 | |||||
Leasehold Improvements | ||||||||
Estimated useful lives of assets | 5 years | 5 years | ||||||
Minimum | ||||||||
Estimated useful lives of assets | 2 years | 2 years | ||||||
Maximum | ||||||||
Estimated useful lives of assets | 5 years | 5 years | ||||||
Transaction 1 | ||||||||
Common stock shares | 9,020,264 | 9,020,264 | 9,020,264 | 9,020,264 | ||||
Common shares current price per share | $ 0.25 | $ 0.25 | $ 0.25 | $ 0.25 | $ 0.25 | $ 0.25 | ||
Transaction 2 | ||||||||
Common stock shares | 2,255,066 | 4,924,500 | 7,104,500 | 5,639,500 | ||||
Common shares current price per share | 1 | $ 1 | $ 2 | $ 1 | ||||
Transaction 3 | ||||||||
Common stock shares | 7,104,500 | |||||||
Common shares current price per share | $ 2 | $ 2 |
Artificial Intelligence (AI) _2
Artificial Intelligence (AI) Deep Learning Platform (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2022 | Mar. 31, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | |
Reduction in value, related to the Ethereum | $ 96,820 | ||||
Accounts receivable related party | $ 119,210 | $ 0 | |||
Accrued expenses | 265,859 | 265,859 | $ 893,137 | $ 401,178 | |
Received cash | 2,908,551 | 2,908,551 | |||
Selling and transactional costs | 1,300,000 | ||||
Artificial Intelligence [Member] | |||||
Reduction in value, related to the Ethereum | 96,820 | ||||
Revenue Digital Asset Sales | 4,360,087 | ||||
Accounts receivable related party | 119,210 | ||||
Accrued expenses | 326,378 | 326,378 | |||
Payment to consultant | 1,075,000 | ||||
Received cash | 2,908,551 | $ 2,908,551 | |||
Selling and transactional costs | $ 156,485,200,000 | $ 1,300,000 |
FIXED ASSETS (Details)
FIXED ASSETS (Details) - USD ($) | Mar. 31, 2022 | Sep. 30, 2021 | Sep. 30, 2020 |
PROPERTY AND EQUIPMENT | |||
Machinery and equipment (2-3 years) | $ 1,481,754 | $ 654,798 | $ 355,272 |
Leasehold improvements (5 years) | 3,612 | 3,612 | 3,612 |
Furniture and fixtures (5 years) | 26,855 | 26,855 | 26,855 |
Less: accumulated depreciation | (474,829) | (356,761) | (257,068) |
Property and equipment, net | $ 1,037,392 | $ 328,504 | $ 128,671 |
FIXED ASSETS (Details Narrative
FIXED ASSETS (Details Narrative) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | |
PROPERTY AND EQUIPMENT | ||||
Depreciation expense | $ 118,068 | $ 42,591 | $ 99,693 | $ 69,655 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) | Mar. 31, 2022 | Sep. 30, 2021 | Sep. 30, 2020 |
PROPERTY AND EQUIPMENT | |||
Machinery and equipment (2-3 years) | $ 1,481,754 | $ 654,798 | $ 355,272 |
Leasehold improvements (5 years) | 3,612 | 3,612 | 3,612 |
Furniture and fixtures (5 years) | 26,855 | 26,855 | 26,855 |
Less: accumulated depreciation | (474,829) | (356,761) | (257,068) |
Property and equipment, net | $ 1,037,392 | $ 328,504 | $ 128,671 |
PROPERTY AND EQUIPMENT (Detai_2
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | |
PROPERTY AND EQUIPMENT | ||||
Depreciation expense | $ 118,068 | $ 42,591 | $ 99,693 | $ 69,655 |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) - USD ($) | Sep. 30, 2021 | Sep. 30, 2020 |
Technology (3 years) | $ 276,000 | $ 305,000 |
Technology | ||
Technology (3 years) | 520,000 | 520,000 |
Less: accumulated amortization | (520,000) | (418,886) |
Intangible assets, net | $ 0 | $ 101,114 |
INTANGIBLE ASSETS (Details Narr
INTANGIBLE ASSETS (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
INTANGIBLE ASSETS | ||
Amortization expense | $ 101,114 | $ 173,332 |
Fair value of intellectual property assocated | $ 520,000 |
LEASES (Details)
LEASES (Details) - USD ($) | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Sep. 30, 2020 |
LEASES | ||||
2022 | $ 170,489 | $ 128,987 | ||
2023 | 117,941 | 107,662 | ||
2024 | 27,411 | 73,095 | ||
Total Remaining Payments | 315,840 | 309,744 | ||
Imputed interest | (20,042) | (19,203) | ||
Total lease liability | $ 295,798 | 290,000 | $ 290,000 | $ 132,000 |
2025 | 0 | |||
2026 | $ 0 |
LEASES (Details Narrative)
LEASES (Details Narrative) - USD ($) | 6 Months Ended | 12 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Jun. 30, 2021 | |
LEASES | |||||
Lease cost | $ 100,103 | $ 76,423 | $ 139,643 | $ 136,718 | |
Operating lease right of use asset | 305,462 | 289,002 | 129,003 | $ 291,000 | |
Total lease liability | 295,798 | 290,000 | $ 132,000 | $ 290,000 | |
Cash paid for ROU operating lease liability | $ 50,051 | $ 139,643 | |||
Weighted-average remaining lease term | 23 years | 28 years | |||
Weighted-average discount rate | 7% | 7% |
CONVERTIBLE NOTES PAYABLE AND_3
CONVERTIBLE NOTES PAYABLE AND NOTE PAYABLE (Details) - USD ($) | Mar. 31, 2022 | Sep. 30, 2021 | Sep. 30, 2020 |
less conversions of notes | $ (14,209,000) | $ (5,639,500) | $ (4,242,490) |
less debt discount - BCF | 0 | (4,308,337) | (2,127,894) |
less debt discount - warrants | 0 | (1,957,590) | (1,025,512) |
less debt discount - warrants issued for services | 0 | (1,056,984) | (823,582) |
Convertible notes, net | 2,255,066 | 9,191,155 | 3,967,578 |
Convertible Note - Clayton A. Struve | |||
Convertible notes, gross | 1,071,000 | 1,071,000 | 1,071,000 |
Convertible Note - Ronald P. Erickson and Affiliates | |||
Convertible notes, gross | 1,184,066 | 1,184,066 | 1,184,066 |
2019 Convertible Notes | |||
Convertible notes, gross | 4,242,490 | 4,242,490 | |
2020 Convertible Notes | |||
Convertible notes, gross | 0 | 5,639,500 | 5,639,500 |
Q2 2021 Convertible Notes | |||
Convertible notes, gross | 14,209,000 | 14,209,000 | 0 |
Bousted Fee Refund (Originally Booked as Contra Debt) | |||
Convertible notes, gross | $ 0 | $ 50,000 | $ 50,000 |
CONVERTIBLE NOTES PAYABLE AND_4
CONVERTIBLE NOTES PAYABLE AND NOTE PAYABLE (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||
Feb. 02, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Apr. 30, 2020 | May 31, 2019 | Mar. 16, 2018 | Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2022 | Mar. 31, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | |
Interest expense | $ 3,297,989 | $ 2,772,296 | $ 1,733,738 | $ 7,784,949 | $ 4,507,546 | $ 14,914,065 | $ 6,094,682 | ||||||
Issuance costs of debt | $ 0 | $ 727,117 | $ 727,117 | 479,965 | |||||||||
Fund raised by convertible debt offerings | $ 2,819,750 | ||||||||||||
Common stock issued related to conversion of convertible notes and interest | 2,255,066 | 19,133,500 | 2,255,066 | 19,133,500 | 16,124,764 | 7,894,566 | |||||||
Note Payable | |||||||||||||
Interest expense | $ 1,268 | $ 3,222 | $ 960 | ||||||||||
Proceeds from paycheck protection program loan | $ 205,633 | $ 226,170 | |||||||||||
Note Payable | On April 30, 2020 [Member] | |||||||||||||
Interest expense | $ 4,350 | 3,222 | |||||||||||
Repay of principal amount | 98,106 | ||||||||||||
Repayment of principal Interest Amount | 1,997 | ||||||||||||
Loan balance | 128,064 | ||||||||||||
Note Payable | On February 1, 2021 [Member] | |||||||||||||
Interest expense | 2,293 | 1,268 | |||||||||||
Convertible Note - Clayton A. Struve | |||||||||||||
Accrued interest | $ 82,801 | 82,801 | 79,062 | 71,562 | |||||||||
Convertible promissory or OID notes | 1,071,000 | 1,071,000 | 1,071,000 | ||||||||||
Convertible debt offering invested amount | $ 1,000,000 | ||||||||||||
Convertible Note - Ronald P. Erickson and Affiliates | |||||||||||||
Fair value of warrants | $ 110,545 | ||||||||||||
Warrant to purchase common stock shares | 1,039,666 | ||||||||||||
Accrued interest | 251,671 | 251,671 | 216,246 | $ 145,202 | |||||||||
Exercise price of warrants | $ 0.50 | ||||||||||||
Convertible Debt Offering | |||||||||||||
Issuance costs of debt | 727,117 | ||||||||||||
Fair value of warrants | $ 4,439,317 | ||||||||||||
Warrant to purchase common stock shares | 492,090 | ||||||||||||
Warrants to purchase common stock equal to percentage rate | 50% | 50% | |||||||||||
Fund raised by convertible debt offerings | $ 24,000,000 | $ 24,000,000 | $ 14,209,000 | $ 5,639,500 | |||||||||
Common stock convertible subject to certain adjustments | 7,104,500 | ||||||||||||
Warrants exercisable for shares of common stock | 3,552,250 | ||||||||||||
Proceeds from convertible notes and warrants | $ 727,117 | ||||||||||||
Warrants issued for services fair value | 1,667,281 | ||||||||||||
Debt discount beneficial conversion feature | $ 9,769,683 | $ 3,766,074 | |||||||||||
Common stock issued related to conversion of convertible notes and interest | 6,091,960 | ||||||||||||
Common stock conversion price per share | $ 1 | ||||||||||||
Amortization related to debt offerings | $ 7,272,911 | $ 4,184,657 | $ 13,256,250 | ||||||||||
Beneficial conversion feature, warrants issued to debt holders and placement agent | $ 5,662,690 | ||||||||||||
Convertible Debt Offering | Minimum | |||||||||||||
Exercise price of warrants | $ 1.20 | $ 1.20 | $ 1.20 | ||||||||||
Gross proceeds percentage by warrant to purchase common stock | 2% | ||||||||||||
Convertible Debt Offering | Maximum | |||||||||||||
Exercise price of warrants | $ 2.40 | $ 2.40 | $ 2.40 | ||||||||||
Gross proceeds percentage by warrant to purchase common stock | 8% | ||||||||||||
Convertible Note - J3E2A2Z Notes | |||||||||||||
Convertible redeemable promissory note amount | $ 664,233 | ||||||||||||
Convertible redeemable promissory note principal amount | 664,233 | ||||||||||||
Convertible Note - J3E2A2Z Account Payable | |||||||||||||
Convertible redeemable promissory note amount | 519,833 | ||||||||||||
Convertible redeemable promissory note principal amount | $ 519,833 |
SIMPLE AGREEMENTS FOR FUTURE _2
SIMPLE AGREEMENTS FOR FUTURE EQUITY (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||
Aug. 09, 2021 | Oct. 31, 2020 | Jul. 31, 2020 | Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2022 | Mar. 31, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 15, 2020 | |
Interest expense | $ 3,297,989 | $ 2,772,296 | $ 1,733,738 | $ 7,784,949 | $ 4,507,546 | $ 14,914,065 | $ 6,094,682 | ||||
Proceeds from issuance of SAFE | $ 0 | $ 340,000 | $ 340,000 | $ 785,000 | |||||||
Shares issued price per share | $ 1.90 | $ 1.20 | $ 1.155 | ||||||||
Boustead Securities LLC [Member] | |||||||||||
Interest expense | $ 90,000 | $ 54,108 | |||||||||
Warrant's issued | 43,254 | ||||||||||
Warrant exercisable | $ 2.40 | ||||||||||
Warrant issued value | $ 70,980 | ||||||||||
Shares issued price per share | $ 2.40 | ||||||||||
Simple Agreement for Future Equity ("SAFE") | |||||||||||
Warrant's issued | 394,332 | ||||||||||
Warrant exercisable | $ 2.40 | ||||||||||
Warrant issued value | $ 240,000 | ||||||||||
Proceeds from issuance of SAFE | $ 1,125,000 | $ 55,000 | $ 785,000 | $ 340,000 | |||||||
Shares issued | 480,600 | 68,750 | 981,250 | 68,750 | 68,750 | ||||||
Conversion into common stock converted amount | $ 961,200 | ||||||||||
Shares issued price per share | $ 2 | $ 0.80 | $ 0.80 | $ 0.80 | $ 0.80 | $ 1.641 | |||||
Beneficial conversion feature | $ 72,090 | ||||||||||
Broker fees | $ 4,125 | $ 47,100 | $ 23,660 | ||||||||
Repayment of cash | $ 253,800 |
EQUITY (Details)
EQUITY (Details) - $ / shares | 6 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Sep. 30, 2021 | Sep. 30, 2020 | |
Shares | |||
Issued | 60,000 | 6,608,789 | |
Exercised | (801,486) | ||
Forfeited | 0 | 384,359 | |
Expired | (108,756) | ||
Share Outstanding at ending of period | 21,714,013 | 22,564,255 | 20,016,367 |
Exercisable at end of period | 21,714,013 | 22,564,255 | |
Weighted Average Exercise Price Issued | $ 0 | $ 2.117 | |
Weighted Average Exercise Price Exercised | (0.956) | ||
Weighted Average Exercise Price Forfeited | 1.842 | 3.300 | $ 2.593 |
Weighted Average Exercise PriceExpired | (1) | 0 | |
Outstanding at ending of period | $ 1.001 | $ 0.998 | 1.161 |
Outstanding at beginning of period | 22,564,255 | 20,016,367 | |
Exercised | (3,676,542) | ||
Forfeited | 0 | (384,359) | |
Weighted Average Exercise Price | |||
Outstanding at beginning of period | $ 0.998 | $ 1.161 | |
Exercised | (0.582) | ||
Forfeited | 1.842 | 3.300 | $ 2.593 |
Expired | $ 1 | $ 0 |
EQUITY (Details 1)
EQUITY (Details 1) - $ / shares | 6 Months Ended | 12 Months Ended | ||
Mar. 31, 2022 | Sep. 30, 2021 | Sep. 30, 2020 | Nov. 09, 2019 | |
Number of warrants | 15,315,120 | |||
Weighted average remaining life (years) | 3 years 1 month 24 days | |||
Weighted average exercise price, outstanding | $ 1.316 | |||
Shares exercisable | 1,720,456 | |||
Weighted average exercise price, exercisable | $ 0.80 | $ 2.593 | $ 0.25 | |
Warrent Five [Member] | ||||
Number of warrants | 21,714,013 | |||
Weighted average remaining life (years) | 3 years 2 months 1 day | |||
Weighted average exercise price, outstanding | $ 1.001 | |||
Shares exercisable | 21,714,013 | |||
Weighted average exercise price, exercisable | $ 1.001 | |||
Warrant Total | ||||
Number of warrants | 22,564,255 | |||
Weighted average remaining life (years) | 3 years 5 months 26 days | |||
Weighted average exercise price, outstanding | $ 0.998 | |||
Shares exercisable | 22,564,255 | |||
Weighted average exercise price, exercisable | $ 0.998 | |||
Warrant One | ||||
Number of warrants | 10,779,381 | 10,829,381 | ||
Weighted average remaining life (years) | 1 year 7 days | 1 year 2 months 26 days | ||
Weighted average exercise price, outstanding | $ 0.250 | $ 0.250 | ||
Shares exercisable | 10,779,381 | 10,829,381 | ||
Weighted average exercise price, exercisable | $ 0.250 | $ 0.250 | ||
Warrant Two | ||||
Number of warrants | 6,559,707 | |||
Weighted average remaining life (years) | 2 years 10 months 2 days | |||
Shares exercisable | 6,559,707 | |||
Warrant Two | Minimum | ||||
Weighted average exercise price, outstanding | $ 1.20 | |||
Weighted average exercise price, exercisable | 1.20 | |||
Warrant Two | Maximum | ||||
Weighted average exercise price, outstanding | 1.85 | |||
Weighted average exercise price, exercisable | $ 1.85 | |||
Warrant Three | ||||
Number of warrants | 4,364,925 | 847,742 | ||
Weighted average remaining life (years) | 4 years | 1 month 13 days | ||
Weighted average exercise price, outstanding | $ 1 | |||
Shares exercisable | 4,364,925 | 847,742 | ||
Weighted average exercise price, exercisable | $ 1 | |||
Warrant Three | Minimum | ||||
Weighted average exercise price, outstanding | $ 2 | |||
Weighted average exercise price, exercisable | 2 | |||
Warrant Three | Maximum | ||||
Weighted average exercise price, outstanding | 2.40 | |||
Weighted average exercise price, exercisable | $ 2.40 | |||
Warrant Four | ||||
Number of warrants | 10,000 | 6,512,207 | ||
Weighted average remaining life (years) | 1 year 3 months | 3 years 3 months 25 days | ||
Weighted average exercise price, outstanding | $ 4.080 | |||
Shares exercisable | 10,000 | 6,512,207 | ||
Weighted average exercise price, exercisable | $ 4.080 | |||
Warrant Four | Minimum | ||||
Weighted average exercise price, outstanding | $ 1.20 | |||
Weighted average exercise price, exercisable | 1.20 | |||
Warrant Four | Maximum | ||||
Weighted average exercise price, outstanding | 1.85 | |||
Weighted average exercise price, exercisable | $ 1.85 | |||
Warrant Five | ||||
Number of warrants | 4,364,925 | |||
Weighted average remaining life (years) | 4 years 6 months | |||
Shares exercisable | 4,364,925 | |||
Warrant Five | Minimum | ||||
Weighted average exercise price, outstanding | $ 2 | |||
Weighted average exercise price, exercisable | 2 | |||
Warrant Five | Maximum | ||||
Weighted average exercise price, outstanding | 2.40 | |||
Weighted average exercise price, exercisable | $ 2.40 | |||
Warrant Six | ||||
Number of warrants | 10,000 | |||
Weighted average remaining life (years) | 1 year 9 months | |||
Weighted average exercise price, outstanding | $ 4.080 | |||
Shares exercisable | 10,000 | |||
Weighted average exercise price, exercisable | $ 4.080 |
EQUITY (Details 2)
EQUITY (Details 2) | 12 Months Ended |
Sep. 30, 2021 | |
Warrants | |
Dividend yield | 0% |
Risk free interest rate | 0.37% |
Expected volatility | 140% |
Warrant One | Minimum | |
Expected life | 3 years |
Warrant One | Maximum | |
Expected life | 5 years |
EQUITY (Details Narrative)
EQUITY (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||||||||||||
Feb. 05, 2022 | Jul. 06, 2020 | Jan. 01, 2020 | Mar. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2022 | Mar. 31, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Oct. 15, 2021 | Jun. 30, 2021 | Feb. 09, 2021 | Jan. 28, 2021 | Jan. 15, 2021 | Dec. 15, 2020 | Nov. 04, 2019 | Oct. 04, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | |
Convertible debt | $ 2,819,750 | ||||||||||||||||||||
Warrants totaling | $ 4,487,207 | 615,675 | |||||||||||||||||||
Net loss | $ (6,140,738) | $ (5,356,619) | $ (5,373,618) | $ (5,299,331) | $ (11,497,357) | $ (10,672,949) | (25,360,213) | (13,562,641) | |||||||||||||
Convertible Notes Payable | $ 2,255,066 | 2,255,066 | $ 16,464,066 | $ 9,020,264 | |||||||||||||||||
Exercise price | $ 1.90 | $ 1.20 | $ 1.155 | ||||||||||||||||||
Intrinsic value | 19,956,371 | $ 34,314,540 | |||||||||||||||||||
Money warrants | $ 21,714,013 | $ 22,554,255 | |||||||||||||||||||
Common stock par value | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||||||||
Unearned stock option grants | 11,550,745 | 11,775,745 | |||||||||||||||||||
Preferred stock shares authorized | 5,000,000 | 5,000,000 | 5,000,000 | 5,000,000 | |||||||||||||||||
Preferred stock par value | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||||||||||
Shareholders paid | $ 125,000 | $ 125,000 | |||||||||||||||||||
Common stock fair market value | $ 1,045,000 | ||||||||||||||||||||
Common stock shares issued | 500,000 | 43,737,772 | 28,257,467 | 43,737,772 | 28,257,467 | 35,166,551 | 24,804,874 | ||||||||||||||
Common stock restricted shares issued for services | 550,000 | ||||||||||||||||||||
Loss related to issuance of shares for debt settlement | $ 0 | $ 825,000 | |||||||||||||||||||
Price of warrants | $ 0.889 | ||||||||||||||||||||
Common stock shares outstanding | 43,737,772 | 28,257,467 | 43,737,772 | 28,257,467 | 35,166,551 | 24,804,874 | |||||||||||||||
Warrants vested | 23,440,456 | ||||||||||||||||||||
Intrinsic value | $ 29,514,715 | $ 52,105,394 | $ 29,514,715 | $ 52,105,394 | $ 23,964,509 | $ 5,580,550 | $ 52,105,394 | $ 9,180,369 | $ 3,706,519 | ||||||||||||
Options to purchase common stock share | 17,878,245 | 17,878,245 | 15,315,120 | ||||||||||||||||||
Warrant issued to common stock | 21,714,023 | 21,714,023 | 22,564,255 | ||||||||||||||||||
Conversion of convertible debentures | $ 16,464,066 | ||||||||||||||||||||
Common shares | 16,124,764 | 9,020,264 | |||||||||||||||||||
Proceeds from issuance of common stock | $ 153,000 | 202,820 | $ 23,344 | $ 0 | |||||||||||||||||
Authorized common stock increased | 200,000,000 | ||||||||||||||||||||
Common stock shares authorized | 200,000,000 | 200,000,000 | 100,000,000 | 100,000,000 | |||||||||||||||||
Warrants initially exercisable | $ 766,486 | $ 653,204 | $ 1,313,203 | $ 85,575 | |||||||||||||||||
Warrants to Purchase Common Stock [Member] | |||||||||||||||||||||
Exercise price | $ 1.120 | $ 0.952 | |||||||||||||||||||
Common stock par value | $ 1 | $ 1 | |||||||||||||||||||
Common stock fair market value | $ 507,560 | ||||||||||||||||||||
Common stock shares issued | 733,588 | ||||||||||||||||||||
Proceeds from issuance of common stock | $ 766,486 | ||||||||||||||||||||
Shrare issued warrant to purchased | 20,000 | 108,756 | |||||||||||||||||||
Shrare issued warrant to purchased price | $ 1.70 | ||||||||||||||||||||
Warrants expiration period | Jan. 05, 2027 | ||||||||||||||||||||
Common Stock Shares issued | 801,486 | 801,486 | |||||||||||||||||||
November 9, 2019 [Member] | |||||||||||||||||||||
Common stock shares issued | 733,588 | ||||||||||||||||||||
Common stock shares received | 73,191 | ||||||||||||||||||||
Exercise price | $ 0.25 | ||||||||||||||||||||
Simple Agreements for Future Equity [Member] | |||||||||||||||||||||
Common stock shares issued | 480,600 | ||||||||||||||||||||
Price of warrants | $ 2 | ||||||||||||||||||||
Common stock shares related party | $ 961,200 | ||||||||||||||||||||
Warrant [Member] | |||||||||||||||||||||
Proceeds from issuance of common stock | $ 766,486 | ||||||||||||||||||||
Common Stock Shares issued | 801,486 | 801,486 | |||||||||||||||||||
Directors [Member] | |||||||||||||||||||||
Convertible Notes Payable | $ 7,104,500 | ||||||||||||||||||||
Exercise price | $ 1.90 | $ 1.918 | $ 2 | ||||||||||||||||||
Common stock shares issued | 3,676,542 | ||||||||||||||||||||
Warrant issued to common stock | 269,510 | 2,000,000 | |||||||||||||||||||
Common Stock Shares issued | 30,000 | ||||||||||||||||||||
Preferred stock purchase | $ 384,359 | ||||||||||||||||||||
Restricted common stock issued, value | $ 228,000 | 735,745 | |||||||||||||||||||
Warrants initially exercisable | 3,552,250 | ||||||||||||||||||||
Boustead Securities LLC [Member] | |||||||||||||||||||||
Convertible Notes Payable | $ 43,254 | ||||||||||||||||||||
Exercise price | $ 2.40 | ||||||||||||||||||||
Common stock fair market value | $ 1,045,000 | ||||||||||||||||||||
Restricted common stock issued, value | $ 1,641 | ||||||||||||||||||||
Ronald P. Erickson [Member] | |||||||||||||||||||||
Exercise price | $ 1.90 | $ 2.09 | $ 2.09 | $ 1.53 | $ 1.95 | $ 0.80 | $ 0.25 | $ 1.53 | $ 1.10 | $ 3.03 | |||||||||||
Warrant issued to common stock | 1,000,000 | 1,000,000 | 2,000,000 | 1,770 | 2,000,000 | 1,200,000 | 1,000,000 | ||||||||||||||
Restricted common stock issued, value | $ 190,000 | $ 1,811,691 | $ 75,000 | ||||||||||||||||||
Three Director [Member] | |||||||||||||||||||||
Exercise price | $ 2 | ||||||||||||||||||||
Common Stock Shares issued | 30,000 | ||||||||||||||||||||
Common Stock Shares issued excercised price | $ 1.70 | ||||||||||||||||||||
Three Director [Member] | Warrant [Member] | |||||||||||||||||||||
Shrare issued warrant to purchased | 20,000 | ||||||||||||||||||||
Shrare issued warrant to purchased price | $ 1.70 | ||||||||||||||||||||
Warrants expiration period | Jan. 05, 2027 | ||||||||||||||||||||
Series C Convertible Preferred Stock [Member] | |||||||||||||||||||||
Preferred stock shares authorized | 1,785,714 | 1,785,714 | 1,785,715 | 1,785,714 | |||||||||||||||||
Preferred stock par value | $ 0.001 | $ 0.001 | |||||||||||||||||||
Price of warrants | $ 0.25 | $ 0.25 | 0.25 | 0.25 | |||||||||||||||||
Conversion price | $ 0.70 | $ 0.70 | |||||||||||||||||||
Preferred stock purchase | $ 1,250,000 | $ 1,250,000 | $ 1,250,000 | ||||||||||||||||||
Preferred stock yield | 8% | 8% | 8% | ||||||||||||||||||
Ownership percentage | 4.99% | 4.99% | 4.99% | ||||||||||||||||||
Warrant expiry | Aug. 04, 2024 | Aug. 04, 2023 | |||||||||||||||||||
Price of warrants | $ 0.25 | ||||||||||||||||||||
Conversion of stock | 8,108,356 | ||||||||||||||||||||
Series D Convertible Preferred Stock | |||||||||||||||||||||
Preferred stock shares authorized | 1,016,014 | 1,016,014 | |||||||||||||||||||
Preferred stock par value | $ 0.001 | $ 0.001 | |||||||||||||||||||
Conversion price | $ 0.25 | $ 0.25 | |||||||||||||||||||
Preferred stock purchase | $ 750,000 | $ 750,000 | |||||||||||||||||||
Preferred stock yield | 8% | 8% | |||||||||||||||||||
Ownership percentage | 4.99% | 4.99% | |||||||||||||||||||
Annual yield | 8% | 8% | |||||||||||||||||||
Stock at 0.25 | |||||||||||||||||||||
Warrants totaling | $ 4,487,207 | $ 4,487,207 | $ 4,487,207 | ||||||||||||||||||
Price of warrants | $ 0.25 | $ 0.25 | $ 0.25 | ||||||||||||||||||
Common shares | 9,020,264 | 9,020,264 | 9,020,264 | ||||||||||||||||||
Adjusting amount of shares, percentage | 1.20% | ||||||||||||||||||||
Stock at 2.00 | |||||||||||||||||||||
Warrants totaling | $ 3,954,625 | $ 3,954,625 | $ 3,954,625 | ||||||||||||||||||
Price of warrants | $ 0.25 | ||||||||||||||||||||
Common shares | 7,104,500 | ||||||||||||||||||||
Adjusting amount of shares, percentage | 2.40% | ||||||||||||||||||||
Series F Preferred Stock [Member] | |||||||||||||||||||||
Common shares | 100,000 | 100,000 | 100,000 | ||||||||||||||||||
Description of explosion date of shares | 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. | 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 | |||||||||||||||||||
Common Preferred Stock [Member] | |||||||||||||||||||||
Convertible Notes Payable | $ 6,091,960 | ||||||||||||||||||||
Exercise price | $ 1 | $ 1 | |||||||||||||||||||
Common stock fair market value | $ 202,820 | ||||||||||||||||||||
Common stock shares issued | 3,676,542 | 4,581,917 | |||||||||||||||||||
Proceeds from issuance of common stock | $ 11,344 | ||||||||||||||||||||
Conversion price | $ 0.582 | $ 1 | |||||||||||||||||||
Common stock shares related party | 97,000 | ||||||||||||||||||||
Exercise of stock option | 6,875 | 16,875 | |||||||||||||||||||
Stock option grants per share | $ 1.38 | ||||||||||||||||||||
Authorized Capital Stock [Member] | |||||||||||||||||||||
Common stock par value | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||||||||||
Preferred stock shares authorized | 5,000,000 | 5,000,000 | 5,000,000 | ||||||||||||||||||
Preferred stock par value | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||||||||||
Common stock shares issued | 200,000,000 | 200,000,000 | 100,000,000 | ||||||||||||||||||
Conversion of convertible debentures | $ 2,255,066 | $ 2,255,066 | |||||||||||||||||||
Common shares | 9,020,264 | 9,020,264 | 16,124,764 | 9,020,264 | |||||||||||||||||
Authorized common stock increased | 200,000,000 | ||||||||||||||||||||
Common stock shares authorized | 205,000,000 | 205,000,000 | 105,000,000 | ||||||||||||||||||
Convertible Preferred Stock D [Member] | |||||||||||||||||||||
Conversion price | $ 0.25 | $ 0.25 | $ 0.25 | ||||||||||||||||||
Preferred stock purchase | $ 750,000 | $ 750,000 | |||||||||||||||||||
Preferred stock yield | 8% | 8% | |||||||||||||||||||
Ownership percentage | 4.99% | 4.99% | |||||||||||||||||||
Annual yield | 8% | 8% |
STOCK INCENTIVE PLANS (Details)
STOCK INCENTIVE PLANS (Details) - USD ($) | 6 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Sep. 30, 2021 | Sep. 30, 2020 | |
Aggregate Intrinsic Value | |||
Outstanding at beginning of period | $ 23,964,509 | $ 5,580,550 | $ 9,180,369 |
Granted | $ 18,807,990 | $ 3,522,400 | |
Outstanding at begin of period | $ 1.565 | $ 1.161 | $ 2.025 |
Exercised | $ (28,031) | $ (18,298) | |
Forfeitures | (396,000) | (7,103,921) | |
Outstanding at end of period | $ 29,514,715 | $ 23,964,509 | $ 5,580,550 |
Weighted Average Exercise Price Granted | $ 2.087 | $ 1.766 | $ 1.142 |
Weighted Average Exercise Price Exercised | (1.650) | (1.359) | (0.250) |
Forfeited | 1.842 | 3.300 | 2.593 |
Outstanding at ending of period | $ 1.651 | $ 1.565 | $ 1.161 |
Granted | $ 7,062,900 | $ 18,807,990 | $ 3,522,400 |
Exercised | (11,344) | (28,031) | (18,298) |
Forfeitures | $ (1,501,350) | $ (396,000) | $ (7,103,921) |
Outstanding at beginning of period | $ 0.998 | $ 1.161 | |
Weighted average exercise price exercised | (0.582) | ||
Outstanding at ending of period | $ 1.001 | $ 0.998 | $ 1.161 |
Outstanding at beginning of period | 22,564,255 | 20,016,367 | |
Shares granted | 60,000 | 6,608,789 | |
Shares exercised | (3,676,542) | ||
Shares forfeited | 0 | 384,359 | |
Share Outstanding at ending of period | 21,714,013 | 22,564,255 | 20,016,367 |
Exercised | (801,486) | ||
Stock Option | |||
Aggregate Intrinsic Value | |||
Outstanding at beginning of period | 15,315,120 | 4,805,000 | 4,532,668 |
Shares granted | 3,385,000 | 10,650,745 | 3,085,000 |
Shares forfeited | 815,000 | 120,000 | 2,739,477 |
Share Outstanding at ending of period | 17,878,245 | 15,315,120 | 4,805,000 |
Exercised | (6,875) | (20,625) | (73,191) |
Stock Option Activity | |||
Aggregate Intrinsic Value | |||
Outstanding at beginning of period | 15,315,120 | 4,805,000 | 4,532,668 |
Shares granted | 10,650,745 | 3,085,000 | |
Shares exercised | (20,625) | (73,191) | |
Shares forfeited | 120,000 | 2,739,477 | |
Share Outstanding at ending of period | 15,315,120 | 4,805,000 | |
Weighted Average Exercise Price: | |||
Aggregate Intrinsic Value | |||
Outstanding at beginning of period | $ 1.565 | $ 1.161 | $ 2.025 |
Weighted average exercise price, granted | 1.766 | 1.142 | |
Weighted average exercise price exercised | (1.359) | (0.250) | |
Weighted average exercise price forfeited | (3.300) | (2.593) | |
Outstanding at ending of period | $ 1.565 | $ 1.161 |
STOCK INCENTIVE PLANS (Details
STOCK INCENTIVE PLANS (Details 1) - $ / shares | 6 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Sep. 30, 2021 | |
Number of outstanding stock options | 15,315,120 | |
Weighted average remaining life (years) | 3 years 1 month 24 days | |
Weighted average exercise price outstanding | $ 1.565 | |
Weighted average exercise price exerciseable | $ 1.316 | |
Number exercisable | 1,720,456 | |
Employee Stock Options One [Member] | ||
Number of outstanding stock options | 17,878,245 | |
Weighted average remaining life (years) | 3 years 9 months 18 days | |
Weighted average exercise price outstanding | $ 1.651 | |
Weighted average exercise price exerciseable | $ 1.445 | |
Number exercisable | 2,213,281 | |
Stock Options 1 | ||
Number of outstanding stock options | 230,000 | |
Weighted average remaining life (years) | 1 year 2 months 15 days | |
Weighted average exercise price outstanding | $ 0.250 | |
Weighted average exercise price exerciseable | $ 0.250 | |
Number exercisable | 186,875 | |
Range of exercise prices | $ 0.25 | |
Stock Options 2 | ||
Number of outstanding stock options | 2,932,500 | |
Weighted average remaining life (years) | 2 years 7 months 6 days | |
Weighted average exercise price outstanding | $ 1.101 | |
Weighted average exercise price exerciseable | $ 1.105 | |
Number exercisable | 514,531 | |
Stock Option 3 | ||
Number of outstanding stock options | 9,280,745 | |
Weighted average remaining life (years) | 3 years 5 months 12 days | |
Weighted average exercise price outstanding | $ 1.501 | |
Weighted average exercise price exerciseable | $ 1.302 | |
Number exercisable | 1,098,125 | |
Stock Option 4 | ||
Number of outstanding stock options | 5,435,000 | |
Weighted average remaining life (years) | 4 years 6 months | |
Weighted average exercise price outstanding | $ 2.263 | |
Weighted average exercise price exerciseable | $ 1.826 | |
Number exercisable | 413,750 | |
Minimum | Stock Option 3 | ||
Range of exercise prices | $ 1.28 | $ 1.28 |
Minimum | Stock Option 4 | ||
Range of exercise prices | 1.79 | 1.79 |
Maximum | Stock Option 3 | ||
Range of exercise prices | 1.53 | 1.53 |
Maximum | Stock Option 4 | ||
Range of exercise prices | 3.67 | $ 3.67 |
Stock Option 1 | ||
Number of outstanding stock options | 230,000 | |
Weighted average remaining life (years) | 1 year 8 months 15 days | |
Weighted average exercise price outstanding | $ 0.250 | |
Weighted average exercise price exerciseable | $ 0.250 | |
Number exercisable | 172,500 | |
Range of exercise prices | $ 0.25 | |
Stock Option 2 | ||
Number of outstanding stock options | 3,074,375 | |
Weighted average remaining life (years) | 3 years 6 months 29 days | |
Weighted average exercise price outstanding | $ 1.108 | |
Weighted average exercise price exerciseable | $ 1.105 | |
Number exercisable | 445,456 | |
Stock Option 2 | Minimum | ||
Range of exercise prices | 1.10 | $ 1.10 |
Stock Option 2 | Maximum | ||
Range of exercise prices | $ 1.25 | $ 1.25 |
Stock Option 3 | ||
Number of outstanding stock options | 9,480,745 | |
Weighted average remaining life (years) | 3 years 9 months 25 days | |
Weighted average exercise price outstanding | $ 1.499 | |
Weighted average exercise price exerciseable | $ 1.307 | |
Number exercisable | 993,750 | |
Stock Option 4 | ||
Number of outstanding stock options | 2,530,000 | |
Weighted average remaining life (years) | 4 years 7 months 20 days | |
Weighted average exercise price outstanding | $ 2.192 | |
Weighted average exercise price exerciseable | $ 1.895 | |
Number exercisable | 108,750 |
STOCK INCENTIVE PLANS (Detail_2
STOCK INCENTIVE PLANS (Details Narrative) - USD ($) | 1 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||||||||
Nov. 09, 2019 | Feb. 09, 2021 | May 21, 2020 | Mar. 31, 2022 | Mar. 31, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 10, 2021 | Oct. 15, 2021 | Jan. 28, 2021 | Dec. 15, 2020 | Nov. 23, 2020 | Jan. 01, 2020 | Nov. 04, 2019 | Oct. 04, 2019 | May 22, 2019 | Jan. 23, 2019 | |
Compensation expense | $ 636,651 | $ 302,849 | $ 1,028,522 | $ 1,702,085 | |||||||||||||
Unrecognized compensation costs | $ 5,313,062 | $ 1,312,936 | |||||||||||||||
Average exercise price | $ 0.25 | $ 0.80 | $ 2.593 | ||||||||||||||
Unearned stock option grants | 11,550,745 | 11,775,745 | |||||||||||||||
Stock option grants | 2,739,477 | ||||||||||||||||
Common stock for vested stock option | 73,191 | ||||||||||||||||
Common stock for vested stock option, totaling | 93,750 | ||||||||||||||||
Period for recognition | 3 years 9 months 25 days | ||||||||||||||||
Options to purchase common stock | 15,315,120 | ||||||||||||||||
Warrant issued to common stock | 21,714,023 | 22,564,255 | |||||||||||||||
Exercise price | $ 1.90 | $ 1.20 | $ 1.155 | ||||||||||||||
Stock options granted | 32,629,376 | ||||||||||||||||
Intrinsic value | $ 19,956,371 | $ 34,314,540 | |||||||||||||||
Ronald P. Erickson [Member] | |||||||||||||||||
Period for recognition | 3 years 9 months 18 days | ||||||||||||||||
Warrant issued to common stock | 1,000,000 | 2,000,000 | 1,770 | 2,000,000 | 1,200,000 | 1,000,000 | |||||||||||
Exercise price | $ 0.80 | $ 2.09 | $ 1.53 | $ 1.95 | $ 0.25 | $ 1.53 | $ 1.90 | $ 1.10 | $ 3.03 | ||||||||
Stock options granted | 500,000 | ||||||||||||||||
Phillip A. Bosua [Member] | |||||||||||||||||
Period for recognition | 5 years | ||||||||||||||||
Warrant issued to common stock | 1,300,000 | ||||||||||||||||
Exercise price | $ 0.80 | $ 2.09 | $ 1.53 | $ 1.90 | $ 1.10 | $ 3.03 | |||||||||||
Stock options granted | 500,000 | ||||||||||||||||
Stock Option | Employees | |||||||||||||||||
Average exercise price | $ 3.30 | ||||||||||||||||
Stock options granted | 120,000 | ||||||||||||||||
Stock Option | Employees One | |||||||||||||||||
Average exercise price | $ 0.80 | ||||||||||||||||
Stock options granted | 550,000 | ||||||||||||||||
Stock Option | Seventeen Employees And Consultants | |||||||||||||||||
Average exercise price | $ 1.766 | $ 1.142 | |||||||||||||||
Period for recognition | 5 years | ||||||||||||||||
Stock options granted | 15,315,120 | 3,085,000 | |||||||||||||||
Stock option grants, total | 9,145,745 | 2,630,000 | |||||||||||||||
Intrinsic value | $ 14,916,905 | ||||||||||||||||
Stock Option | Two Consultants | |||||||||||||||||
Average exercise price | $ 1.650 | $ 1.359 | |||||||||||||||
Stock options granted | 6,875 | 20,625 | |||||||||||||||
Stock Option | Seven Employees And Consultants [Member] | |||||||||||||||||
Average exercise price | $ 2.079 | ||||||||||||||||
Period for recognition | 5 years | ||||||||||||||||
Stock options granted | 1,085,000 | ||||||||||||||||
Stock option grants, total | 17,878,245 | ||||||||||||||||
Intrinsic value | $ 8,556,635 | ||||||||||||||||
Stock Option | Four Consultants | |||||||||||||||||
Average exercise price | $ 1.842 | ||||||||||||||||
Stock options granted | 815,000 | ||||||||||||||||
2011 Stock Incentive Plan | |||||||||||||||||
Average exercise price | $ 1.651 | $ 1.565 | |||||||||||||||
Unearned stock option grants | 11,550,745 | 11,775,745 | |||||||||||||||
Options to purchase common stock | 17,878,245 | 15,315,120 | 9,750,000 | 3,000,000 | 2,500,000 | ||||||||||||
Stock option grant vests description | (i) 33.3% with the first shipment; (ii) 33.3% with $50 million in sales are achieved; and (iii) 33.4% after $200 million in sales are achieved | ||||||||||||||||
2021 Equity Incentive Plan | |||||||||||||||||
Unearned stock option grants | 1,505,000 | ||||||||||||||||
Options to purchase common stock | 20,000,000 | ||||||||||||||||
Stock options granted | 10,650,745 | ||||||||||||||||
Stock option grants, total | 1,900,000 | ||||||||||||||||
2011 And 2021 Stock Incentive Plan [Member] | |||||||||||||||||
Registered shares issued | 34,650,120 | ||||||||||||||||
Particle, Inc. | |||||||||||||||||
Compensation expense | $ 197,553 | $ 833,771 | |||||||||||||||
Period for recognition | 4 years | 4 years 2 months 15 days | |||||||||||||||
Options to purchase common stock | 8,000,000 |
SIGNIFICANT AND OTHER TRANSAC_2
SIGNIFICANT AND OTHER TRANSACTIONS WITH RELATED PARTIES (Details) | 12 Months Ended |
Sep. 30, 2021 $ / shares shares | |
Clayton Struve Warrant: Series C Warrant W98 | |
Issue date | 08-04-2016 |
Number of warrant shares | shares | 1,785,715 |
Exercise price | $ / shares | $ 0.25 |
Original expiration date | 08-04-2021 |
Amended expiration date | 08-04-2023 |
Clayton Struve Warrant: Series F Warrant F-1 | |
Issue date | 11-14-2016 |
Number of warrant shares | shares | 187,500 |
Exercise price | $ / shares | $ 0.25 |
Original expiration date | 11-13-2021 |
Amended expiration date | 11-13-2023 |
Clayton Struve Warrant: Series F Warrant F-2 | |
Issue date | 12-19-2016 |
Number of warrant shares | shares | 187,500 |
Exercise price | $ / shares | $ 0.25 |
Original expiration date | 12-18-2021 |
Amended expiration date | 12-18-2023 |
SIGNIFICANT AND OTHER TRANSAC_3
SIGNIFICANT AND OTHER TRANSACTIONS WITH RELATED PARTIES (Details narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 8 Months Ended | 11 Months Ended | 12 Months Ended | 14 Months Ended | |||||||||||||||
Feb. 05, 2022 | Jan. 15, 2021 | Dec. 15, 2020 | Jul. 02, 2020 | Jun. 01, 2020 | Jan. 01, 2020 | Feb. 09, 2021 | Jan. 28, 2021 | Mar. 18, 2020 | Nov. 04, 2019 | May 31, 2019 | Mar. 31, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Mar. 31, 2021 | May 31, 2020 | Mar. 31, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Aug. 15, 2021 | Dec. 31, 2021 | Oct. 04, 2019 | |
Special bonus compensation | $ 1,560,000 | |||||||||||||||||||||
Account receivable-related parties | $ 119,210 | 119,210 | $ 0 | $ 0 | $ 3,124,581 | |||||||||||||||||
Sales and use tax | 326,000 | |||||||||||||||||||||
Selling and transactional costs | 1,300,000 | |||||||||||||||||||||
Amount paid to consultant | $ 1,075,000 | |||||||||||||||||||||
Warrant issued to common stock | 21,714,023 | 21,714,023 | 22,564,255 | 22,564,255 | ||||||||||||||||||
Reduction in value, related to the Ethereum | $ 96,820 | |||||||||||||||||||||
Accounts receivable related party | $ 119,210 | |||||||||||||||||||||
Accrued expenses | 326,378 | 326,378 | ||||||||||||||||||||
Received cash | 2,908,551 | 2,908,551 | ||||||||||||||||||||
Selling and transactional costs | $ 156,485,200,000 | 156,485,200,000 | ||||||||||||||||||||
Option granted | 32,629,376 | |||||||||||||||||||||
Exercise price | $ 1.155 | $ 1.90 | $ 1.90 | $ 1.20 | ||||||||||||||||||
Period for recognition | 3 years 9 months 25 days | |||||||||||||||||||||
Stock exercised | $ 11,344 | $ 0 | ||||||||||||||||||||
Warrant [Member] | ||||||||||||||||||||||
Common Stock Shares issued | 801,486 | 801,486 | ||||||||||||||||||||
Ronald P. Erickson [Member] | ||||||||||||||||||||||
Warrant issued to common stock | 2,000,000 | 1,200,000 | 1,000,000 | 1,000,000 | 2,000,000 | 2,000,000 | 1,770 | 1,000,000 | ||||||||||||||
Option granted | 500,000 | |||||||||||||||||||||
Restricted common stock issued, value | $ 190,000 | $ 1,811,691 | $ 75,000 | |||||||||||||||||||
Restricted common stock issued | 100,000 | |||||||||||||||||||||
Exercise price | $ 1.53 | $ 1.90 | $ 0.80 | $ 0.25 | $ 1.10 | $ 2.09 | $ 2.09 | $ 1.53 | $ 1.53 | $ 1.95 | $ 3.03 | |||||||||||
Period for recognition | 3 years 9 months 18 days | |||||||||||||||||||||
Salary per month | $ 10,000 | |||||||||||||||||||||
Description of particle issued a stock option | Particle issued a stock option grant for 1,500,000 shares at $0.10 per share to Ronald P. Erickson. The stock option grant vests (i) 33.3% upon issuance; (ii) 33.3% after the first sale; and (iii) 33.4% after one million in sales are achieved | |||||||||||||||||||||
Accrued Compensation | 256,702 | 256,702 | 421,599 | 421,599 | ||||||||||||||||||
Annual Salary | $ 75,000 | $ 300,000 | $ 195,000 | $ 215,000 | $ 260,000 | $ 120,000 | ||||||||||||||||
Accrued compensation, travel and interest | $ 421,599 | 597,177 | ||||||||||||||||||||
Salaries | 272,500 | 272,500 | ||||||||||||||||||||
Term period | 5 years | |||||||||||||||||||||
Accounts payable and accrued liabilities | 421,599 | 421,599 | 597,177 | |||||||||||||||||||
Ronald P. Erickson [Member] | Tranche One [Member] | ||||||||||||||||||||||
Sales achieved upto | $ 50,000,000 | |||||||||||||||||||||
Ronald P. Erickson [Member] | Tranche Two [Member] | ||||||||||||||||||||||
Sales achieved upto | $ 200,000,000 | |||||||||||||||||||||
Ronald P. Erickson [Member] | Stock Option 2 | ||||||||||||||||||||||
Option granted | 1,865,675 | |||||||||||||||||||||
Exercise price | $ 1.53 | |||||||||||||||||||||
Term period | 5 years | |||||||||||||||||||||
Ronald P. Erickson [Member] | Stock Option 1 | ||||||||||||||||||||||
Option granted | 1,865,675 | |||||||||||||||||||||
Exercise price | $ 1.53 | |||||||||||||||||||||
Term period | 5 years | |||||||||||||||||||||
Phillip A. Bosua [Member] | ||||||||||||||||||||||
Warrant issued to common stock | 1,300,000 | 1,300,000 | ||||||||||||||||||||
Option granted | 500,000 | |||||||||||||||||||||
Restricted common stock issued, value | $ 285,000 | |||||||||||||||||||||
Restricted common stock issued | 150,000 | |||||||||||||||||||||
Exercise price | $ 1.53 | $ 1.90 | $ 0.80 | $ 1.10 | $ 2.09 | $ 2.09 | $ 3.03 | |||||||||||||||
Period for recognition | 5 years | |||||||||||||||||||||
Cancelled a stock option grant | 1,000,000 | |||||||||||||||||||||
Stock option grant | 1,200,000 | |||||||||||||||||||||
Salary per month | $ 10,000 | |||||||||||||||||||||
Description of particle issued a stock option | Particle issued a stock option grant for 1,500,000 shares at $0.10 per share to Philip A. Bosua. The stock option grant vests (i) 33.3% upon issuance; (ii) 33.3% after the first sale; and (iii) 33.4% after one million in sales are achieved | |||||||||||||||||||||
Bonus | 250,000 | |||||||||||||||||||||
Accrued liabilities related party | 250,000 | 250,000 | ||||||||||||||||||||
Annual Salary | 350,000 | 240,000 | $ 260,000 | $ 120,000 | ||||||||||||||||||
Phillip A. Bosua [Member] | Tranche One [Member] | ||||||||||||||||||||||
Sales achieved upto | $ 50,000,000 | |||||||||||||||||||||
Phillip A. Bosua [Member] | Tranche Two [Member] | ||||||||||||||||||||||
Sales achieved upto | $ 200,000,000 | |||||||||||||||||||||
Phillip A. Bosua [Member] | Stock Option 2 | ||||||||||||||||||||||
Option granted | 2,132,200 | |||||||||||||||||||||
Exercise price | $ 1.53 | |||||||||||||||||||||
Term period | 5 years | |||||||||||||||||||||
Phillip A. Bosua [Member] | Stock Option 1 | ||||||||||||||||||||||
Option granted | 2,132,195 | |||||||||||||||||||||
Exercise price | $ 1.53 | |||||||||||||||||||||
Term period | 5 years | |||||||||||||||||||||
Clayton Struve Warrant [Member] | ||||||||||||||||||||||
Exercise price | $ 0.25 | |||||||||||||||||||||
Accrued Interest | $ 82,801 | $ 82,801 | 79,062 | 79,062 | ||||||||||||||||||
Convertible promissory notes | $ 1,071,000 | $ 1,071,000 | $ 1,071,000 | $ 1,071,000 | ||||||||||||||||||
Stock exercised | $ 889,880 | |||||||||||||||||||||
Directors [Member] | ||||||||||||||||||||||
Warrant issued to common stock | 2,000,000 | 269,510 | 269,510 | |||||||||||||||||||
Restricted common stock issued, value | $ 228,000 | $ 735,745 | ||||||||||||||||||||
Restricted common stock issued | 120,000 | |||||||||||||||||||||
Exercise price | $ 2 | $ 1.90 | $ 1.918 | $ 1.918 | ||||||||||||||||||
Common Stock Shares issued | 30,000 | |||||||||||||||||||||
Three Director [Member] | ||||||||||||||||||||||
Exercise price | $ 2 | |||||||||||||||||||||
Common Stock Shares issued | 30,000 | |||||||||||||||||||||
Common Stock Shares issued excercised price | $ 1.70 | |||||||||||||||||||||
Number of warrants issued | 20,000 | |||||||||||||||||||||
Three Director [Member] | Warrant [Member] | ||||||||||||||||||||||
Shrare issued warrant to purchased | 20,000 | |||||||||||||||||||||
Warrants expiration period | Jan. 05, 2027 | |||||||||||||||||||||
Shrare issued warrant to purchased price | $ 1.70 | |||||||||||||||||||||
Two Directors [Member] | ||||||||||||||||||||||
Exercise price | $ 1.10 | |||||||||||||||||||||
Number of warrants issued | 105,000 | |||||||||||||||||||||
Mr. Struve [Member] | ||||||||||||||||||||||
Common shares issued | 1,080,000 | |||||||||||||||||||||
Invested in debt | $ 1,000,000 | |||||||||||||||||||||
Conversion of common stock in debt | $ 1,000,000 |
COMMITMENTS, CONTINGENCIES AND
COMMITMENTS, CONTINGENCIES AND LEGAL PROCEEDINGS (Details narrative) - USD ($) | 1 Months Ended | 6 Months Ended | 8 Months Ended | 11 Months Ended | 12 Months Ended | 14 Months Ended | ||||||
Feb. 01, 2019 | Apr. 10, 2018 | Apr. 13, 2017 | Oct. 31, 2021 | Oct. 11, 2021 | Mar. 31, 2022 | Sep. 30, 2021 | May 31, 2020 | Mar. 31, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Aug. 15, 2021 | |
Leases, net monthly payment | $ 8,697 | $ 3,334 | ||||||||||
Lease description | The lease expires on June 30, 2024 | lease expires on May 31, 2022 | the Company extended the lease from June 1, 2022 to May 31, 2023 at $2,986 per month. | the Company entered into First Amendment of Lease and added 1,030 square feet for year for $1,000 for $5,000 per month. | ||||||||
Mr. Bosua | ||||||||||||
Base salary | $ 225,000 | |||||||||||
Common stock shares received | 500,000 | |||||||||||
Common stock per shares | $ 0.33 | |||||||||||
Ronald P. Erickson [Member] | ||||||||||||
Annual salary | $ 75,000 | $ 300,000 | $ 195,000 | $ 215,000 | $ 260,000 | $ 120,000 | ||||||
Phillip A. Bosua [Member] | ||||||||||||
Annual salary | $ 350,000 | $ 240,000 | $ 260,000 | $ 120,000 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
INCOME TAXES | ||
Net operating loss carryforward | $ 8,051,000 | $ 6,536,000 |
Stock based compensation | 975,000 | 1,196,000 |
Intangibles | 276,000 | 305,000 |
Accruals and reserves | 399,000 | 11,000 |
Total deferred tax asset | 9,701,000 | 8,048,000 |
Valuation allowance | (9,701,000) | (8,048,000) |
Net deferred tax assets | 0 | 0 |
Change in valuation allowance during the year | $ (1,653,000) | $ (1,092,357) |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Increase in Income Taxes Resulting from: | ||
Income tax provision at statutory rate | (21.00%) | (21.00%) |
Warrant interest expense | 12% | 9% |
Change in valuation allowance | 7% | 9% |
Prior year true up | 2% | 3% |
Effective tax rate | 0% | 0% |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) $ in Millions | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
INCOME TAXES | ||
Loss before tax | $ 6.5 | $ 5.1 |
Deferred tax asset, gross | 9.7 | $ 8 |
Net operating loss carryforwards | $ 43.8 | |
Net operating loss carryforwards, expiration dates | 2028-2041 |
SEGMENT REPORTING (Details)
SEGMENT REPORTING (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | |
Revenue | $ 4,361,000 | $ 0 | $ 122,000 | |||
Segment Operating Profit (Loss) | $ (2,843,000) | $ (2,602,000) | (3,712,000) | $ (6,165,000) | ||
Gross margin | 0 | 70,000 | ||||
Segment assets | 12,663,000 | 15,908,000 | 12,663,000 | 15,908,000 | 12,889,000 | 4,682,000 |
Development of the Bio-RFID and ChromaID Technologies | ||||||
Revenue | 9 | 0 | 0 | |||
Segment Operating Profit (Loss) | (2,682,000) | (2,179,000) | (4,778,000) | (5,369,000) | (9,373,000) | (5,481,000) |
Gross margin | 0 | 0 | ||||
Segment assets | 12,543,000 | 15,759,000 | 12,543,000 | 15,759,000 | 12,867,000 | 4,360,000 |
Particle, Inc. Technology | ||||||
Revenue | 0 | 0 | ||||
Segment Operating Profit (Loss) | (15,000) | (423,000) | (22,000) | (796,000) | (1,073,000) | (1,280,000) |
Gross margin | 0 | 0 | ||||
Segment assets | 1,000 | $ 149,000 | 1,000 | $ 149,000 | 22,000 | 322,000 |
TransTech Distribution Business | ||||||
Revenue | 0 | 122,000 | ||||
Segment Operating Profit (Loss) | 0 | (65,000) | ||||
Gross margin | 0 | 70,000 | ||||
Segment assets | $ 0 | $ 0 | ||||
Digital asset sales [Member] | ||||||
Revenue | 9,000 | 4,361,000 | ||||
Segment Operating Profit (Loss) | (146,000) | 1,088,000 | ||||
Segment assets | $ 119,000 | $ 119,000 |
SEGMENT REPORTING (Details Narr
SEGMENT REPORTING (Details Narrative) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | |
SEGMENT REPORTING | ||||
Non-cash expenses | $ 8,240,647 | $ 7,027,922 | $ 3,979,584 | $ 2,990,072 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - $ / shares | 6 Months Ended | |
Mar. 31, 2022 | Sep. 30, 2021 | |
Options to purchase common stock | 15,315,120 | |
Clayton A. Struve Warrant | ||
Issue Date | Aug. 14, 2017 | |
Options to purchase common stock | 1,440,000 | |
Exercise Price | $ 0.25 | |
Original Expiration Date | Aug. 13, 2023 | |
Amended Expiration Dates | Aug. 13, 2024 | |
Clayton A. Struve Warrant One | ||
Issue Date | Dec. 12, 2017 | |
Options to purchase common stock | 1,200,000 | |
Exercise Price | $ 0.25 | |
Original Expiration Date | Dec. 11, 2023 | |
Amended Expiration Dates | Dec. 11, 2024 | |
Clayton A. Struve Warrant Two | ||
Issue Date | Aug. 04, 2016 | |
Options to purchase common stock | 1,785,715 | |
Exercise Price | $ 0.25 | |
Original Expiration Date | Aug. 04, 2023 | |
Amended Expiration Dates | Aug. 04, 2024 | |
Clayton A. Struve Warrant Three | ||
Issue Date | Feb. 28, 2018 | |
Options to purchase common stock | 1,344,000 | |
Exercise Price | $ 0.25 | |
Original Expiration Date | Feb. 28, 2023 | |
Amended Expiration Dates | Feb. 28, 2024 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||||||
Oct. 11, 2021 | Apr. 13, 2017 | Apr. 27, 2022 | Dec. 16, 2021 | Oct. 31, 2021 | Feb. 01, 2021 | Apr. 30, 2020 | Feb. 01, 2019 | Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2022 | Mar. 31, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Oct. 15, 2021 | Dec. 15, 2020 | |
Proceeds from notes payable | $ 0 | $ 14,209,000 | $ 14,209,000 | $ 5,639,500 | |||||||||||||
Interest expense | $ 3,297,989 | $ 2,772,296 | $ 1,733,738 | $ 7,784,949 | 4,507,546 | $ 14,914,065 | $ 6,094,682 | ||||||||||
Common stock shares issued upon exercise of stock options/warrants, shares | 801,486 | ||||||||||||||||
Exercise price | $ 1.90 | $ 1.20 | $ 1.155 | ||||||||||||||
Loan interest | $ 0 | $ 0 | $ 18,800 | $ 0 | |||||||||||||
Warrant and stock option [Member] | |||||||||||||||||
Common stock shares issued upon exercise of stock options/warrants, amount | $ 768,830 | ||||||||||||||||
Common stock shares issued upon exercise of stock options/warrants, shares | 803,361 | ||||||||||||||||
Note Payable-PPP Loans [Member] | |||||||||||||||||
Proceeds from notes payable | $ 205,633 | $ 226,170 | |||||||||||||||
Interest expense | $ 4,350 | $ 3,222 | |||||||||||||||
Note Payable-PPP Loans [Member] | Subsequent Event [Member] | |||||||||||||||||
Repayment loan | $ 98,106 | ||||||||||||||||
Loan interest | 1,997 | ||||||||||||||||
Loan amount forgiven | $ 128,064 | ||||||||||||||||
Lease modification, pine street [Member] | |||||||||||||||||
Lease expiration date | Jun. 30, 2024 | ||||||||||||||||
Lease periodic payments, payable under agreement | $ 8,697 | ||||||||||||||||
Change in rental payments, each year, percentage | 3% | ||||||||||||||||
First amendment to lease, description | the Company entered into First Amendment of Lease and added 1,030 square feet for year for $1,000 for $5,000 per month. | ||||||||||||||||
Lease modification, union street [Member] | |||||||||||||||||
Lease expiration date | May 31, 2022 | May 31, 2023 | |||||||||||||||
Lease periodic payments, payable under agreement | $ 3,334 | $ 2,986 | |||||||||||||||
Change in rental payments, each year, percentage | 3% | ||||||||||||||||
2021 Equity Incentive Plan [Member] | |||||||||||||||||
Common stock shares reserved for future issuance | 20,000,000 | ||||||||||||||||
2021 And 2011 Equity Incentive Plan [Member] | |||||||||||||||||
Common stock issued under incentive plans | 34,650,120 | ||||||||||||||||
Ronald P. Erickson [Member] | |||||||||||||||||
Term | 5 years | ||||||||||||||||
Common stock shares reserved for future issuance | 1,000 | ||||||||||||||||
Exercise price | $ 2.09 | ||||||||||||||||
Phillip A. Bosua [Member] | |||||||||||||||||
Term | 5 years | ||||||||||||||||
Common stock shares reserved for future issuance | 1,300,000 | ||||||||||||||||
Exercise price | $ 2.09 | ||||||||||||||||
Three directors [Member] | |||||||||||||||||
Common stock shares reserved for future issuance | 30,000 | ||||||||||||||||
Number of warrants issued | 20,000 | ||||||||||||||||
Seven employees and three consultants [Member] | |||||||||||||||||
Term | 5 years | ||||||||||||||||
Common stock shares reserved for future issuance | 910,000 | ||||||||||||||||
Exercise price | $ 2.09 |