Cover
Cover - shares | 6 Months Ended | |
Mar. 31, 2024 | May 15, 2024 | |
Cover [Abstract] | ||
Entity Registrant Name | KNOW LABS, INC. | |
Entity Central Index Key | 0001074828 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Current Fiscal Year End Date | --09-30 | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Current Reporting Status | Yes | |
Document Period End Date | Mar. 31, 2024 | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2024 | |
Entity Common Stock Shares Outstanding | 85,512,166 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 000-30262 | |
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 Country | US | |
Entity Address Postal Zip Code | 98101 | |
City Area Code | 206 | |
Local Phone Number | 903-1351 | |
Security 12b Title | Common Stock, par value $0.001 per share | |
Trading Symbol | KNW | |
Security Exchange Name | NYSE | |
Entity Interactive Data Current | Yes |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Mar. 31, 2024 | Sep. 30, 2023 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 4,709,690 | $ 8,023,716 |
Total current assets | 4,709,690 | 8,023,716 |
PROPERTY AND EQUIPMENT, NET | 55,655 | 81,325 |
OTHER ASSETS | ||
Other assets | 163,628 | 15,766 |
Operating lease right-of-use asset | 9,175 | 145,090 |
TOTAL ASSETS | 4,938,148 | 8,265,897 |
CURRENT LIABILITIES: | ||
Accounts payable - trade | 1,031,600 | 1,292,861 |
Accrued expenses | 98,954 | 94,062 |
Accrued expenses - related parties | 97,822 | 218,334 |
Convertible notes payable, net | 3,819,660 | 2,761,931 |
Current portion of operating lease right-of-use liability | 14,500 | 154,797 |
Total current liabilities | 5,062,536 | 4,521,985 |
NON-CURRENT LIABILITIES: | ||
Non-current portion of convertible notes payable, net | 1,629,586 | 0 |
Total liabilities | 6,692,122 | 4,521,985 |
STOCKHOLDERS' EQUITY | ||
Common stock - $0.001 par value, 200,000,000 shares authorized, 82,512,166 and 80,358,463 shares issued and outstanding at 3/31/2024 and 9/30/2023, respectively | 82,512 | 80,358 |
Additional paid in capital | 129,008,023 | 125,501,537 |
Accumulated deficit | (130,847,314) | (121,840,788) |
Total stockholders' equity | (1,753,974) | 3,743,912 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 4,938,148 | 8,265,897 |
Convertible Preferred Stock Series C [Member] | ||
STOCKHOLDERS' EQUITY | ||
Preferred stock, value | 1,790 | 1,790 |
Convertible Preferred Stocks Series D [Member] | ||
STOCKHOLDERS' EQUITY | ||
Preferred stock, value | $ 1,015 | $ 1,015 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2024 | Sep. 30, 2023 |
Preferred stock par value | $ 0.001 | $ 0.001 |
Preferred stock shares authorized | 5,000,000 | 5,000,000 |
Common stock par value | $ 0.001 | $ 0.001 |
Common stock shares authorized | 200,000,000 | 200,000,000 |
Common stock shares issued | 82,512,166 | 80,358,463 |
Common stock shares outstanding | 82,512,166 | 80,358,463 |
Convertible Preferred Stock Series C [Member] | ||
Preferred stock par value | $ 0.001 | $ 0.001 |
Preferred stock shares authorized | 30,000 | 30,000 |
Preferred stock shares issued | 17,858 | 17,858 |
Preferred stock shares outstanding | 17,858 | 17,858 |
Convertible Preferred Stock Series D [Member] | ||
Preferred stock par value | $ 0.001 | $ 0.001 |
Preferred stock shares authorized | 20,000 | 20,000 |
Preferred stock shares issued | 10,161 | 10,161 |
Preferred stock shares outstanding | 10,161 | 10,161 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Mar. 31, 2024 | Mar. 31, 2023 | |
OPERATING EXPENSES- | ||||
RESEARCH AND DEVELOPMENT EXPENSES | $ 2,175,245 | $ 2,563,469 | $ 3,661,633 | $ 4,306,520 |
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 2,550,848 | 2,242,658 | 4,538,657 | 4,147,729 |
Total operating expenses | 4,726,093 | 4,806,127 | 8,200,290 | 8,454,249 |
OPERATING LOSS | (4,726,093) | (4,806,127) | (8,200,290) | (8,454,249) |
OTHER INCOME (EXPENSE), NET | ||||
Interest income | 45,243 | 0 | 96,253 | 0 |
Interest expense | (716,814) | (124,075) | (740,251) | (298,812) |
Total other income (expense), net | (671,571) | (124,075) | (643,998) | (298,812) |
LOSS BEFORE INCOME TAXES | (5,397,664) | (4,930,202) | (8,844,288) | (8,753,061) |
Income tax expense | 0 | 0 | 0 | 0 |
NET LOSS | (5,397,664) | (4,930,202) | (8,844,288) | (8,753,061) |
Deemed dividends on Series C and D Preferred Stock | (98,609) | 0 | (162,238) | 0 |
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ (5,496,273) | $ (4,930,202) | $ (9,006,526) | $ (8,753,061) |
Basic and diluted loss per share | $ (0.07) | $ (0.10) | $ (0.11) | $ (0.18) |
Weighted average shares of common stock outstanding- basic and diluted | 81,766,128 | 48,207,937 | 81,428,231 | 48,197,581 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' (DEFICIT) EQUITY (Unaudited) - USD ($) | Total | Series C Convertibles Preferred Stock [Member] | Series D Convertible Preferred Stock [Member] | Common Stock [Member] | Additional Paid In Capital [Member] | Accumulated Deficit [Member] |
Balance, shares at Oct. 31, 2022 | 17,858 | 10,161 | 48,156,062 | |||
Balance, amount at Oct. 31, 2022 | $ 9,862,613 | $ 1,790 | $ 1,015 | $ 48,158 | $ 111,209,388 | $ (101,397,738) |
Stock compensation expense - employee options | 744,640 | 0 | 0 | $ 0 | 744,640 | 0 |
Issuance of common stock for stock option exercises, shares | 1,875 | |||||
Issuance of common stock for stock option exercises, amount | 2,343 | 0 | 0 | $ 1 | 2,342 | 0 |
Issuance of common stock for exercise of warrants, shares | 50,000 | |||||
Issuance of common stock for exercise of warrants, amount | 12,500 | 0 | 0 | $ 50 | 12,450 | 0 |
Expenses for extension of notes and warrants | 206,994 | 0 | 0 | 0 | 206,994 | 0 |
Net loss | (3,822,859) | $ 0 | $ 0 | $ 0 | 0 | (3,822,859) |
Balance, shares at Dec. 31, 2022 | 17,858 | 10,161 | 48,207,937 | |||
Balance, amount at Dec. 31, 2022 | 7,006,231 | $ 1,790 | $ 1,015 | $ 48,209 | 112,175,814 | (105,220,597) |
Stock compensation expense - employee options | 1,182,547 | 0 | 0 | 0 | 1,182,547 | 0 |
Expenses for extension of notes and warrants | 142,727 | 0 | 0 | 0 | 142,727 | 0 |
Net loss | (4,930,202) | $ 0 | $ 0 | $ 0 | 0 | (4,930,202) |
Deemed dividends on Series C and D Preferred Stock | 0 | |||||
Balance, shares at Mar. 31, 2023 | 17,858 | 10,161 | 48,207,937 | |||
Balance, amount at Mar. 31, 2023 | 3,401,303 | $ 1,790 | $ 1,015 | $ 48,209 | 113,501,088 | (110,150,799) |
Balance, amount at Sep. 30, 2023 | $ 3,743,912 | |||||
Issuance of common stock for stock option exercises, shares | 714,828 | |||||
Net loss | $ (8,844,288) | |||||
Deemed dividends on Series C and D Preferred Stock | 162,238 | |||||
Balance, shares at Mar. 31, 2024 | 17,858 | 10,161 | 82,512,166 | |||
Balance, amount at Mar. 31, 2024 | (1,753,974) | $ 1,790 | $ 1,015 | $ 82,512 | 129,008,023 | (130,847,314) |
Balance, shares at Oct. 31, 2023 | 17,858 | 10,161 | 80,358,463 | |||
Balance, amount at Oct. 31, 2023 | 3,743,912 | $ 1,790 | $ 1,015 | $ 80,358 | 125,501,537 | (121,840,788) |
Stock compensation expense - employee options | 699,246 | 0 | 0 | $ 0 | 699,246 | 0 |
Issuance of common stock for stock option exercises, shares | 883,061 | |||||
Issuance of common stock for stock option exercises, amount | 203,105 | 0 | 0 | $ 884 | 202,221 | 0 |
Net loss | (3,446,624) | 0 | 0 | $ 0 | 0 | (3,446,624) |
Issuance of common stock for services, shares | 105,000 | |||||
Issuance of common stock for services, amount | 26,250 | 0 | 0 | $ 105 | 26,145 | 0 |
Deemed dividends on Series C and D Preferred Stock | 0 | $ 0 | $ 0 | $ 0 | 63,629 | (63,629) |
Balance, shares at Dec. 31, 2023 | 17,858 | 10,161 | 81,346,524 | |||
Balance, amount at Dec. 31, 2023 | 1,225,889 | $ 1,790 | $ 1,015 | $ 81,347 | 126,492,778 | (125,351,041) |
Stock compensation expense - employee options | 616,317 | 0 | 0 | $ 0 | 616,317 | 0 |
Issuance of common stock for exercise of warrants, shares | 714,848 | |||||
Issuance of common stock for exercise of warrants, amount | 0 | 0 | 0 | $ 715 | (715) | 0 |
Expenses for extension of notes and warrants | 594,761 | 0 | 0 | 0 | 594,761 | 0 |
Net loss | (5,397,664) | 0 | 0 | $ 0 | 0 | (5,397,664) |
Issuance of common stock for services, shares | 348,492 | |||||
Issuance of common stock for services, amount | 170,760 | 0 | 0 | $ 347 | 170,413 | 0 |
Deemed dividends on Series C and D Preferred Stock | 98,609 | 0 | 0 | $ 0 | 98,609 | (98,609) |
Issuance of shares and warrants in connection with debt offering, shares | 102,302 | |||||
Issuance of shares and warrants in connection with debt offering, amount | 1,035,963 | $ 0 | $ 0 | $ 103 | 1,035,860 | 0 |
Balance, shares at Mar. 31, 2024 | 17,858 | 10,161 | 82,512,166 | |||
Balance, amount at Mar. 31, 2024 | $ (1,753,974) | $ 1,790 | $ 1,015 | $ 82,512 | $ 129,008,023 | $ (130,847,314) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 6 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (8,844,288) | $ (8,753,061) |
Adjustments to reconcile net loss to net cash (used in) operating activities | ||
Depreciation and amortization | 38,367 | 205,094 |
Stock based compensation - stock option grants | 1,315,563 | 1,927,187 |
Issuance of common stock for services | 277,010 | 0 |
Amortization of operating lease right-of-use asset | 135,915 | 89,612 |
Amortization of debt issuance costs | 100,029 | 0 |
Interest expense for extension of notes and warrants | 594,761 | 349,721 |
Changes in operating assets and liabilities: | ||
Other long-term assets | (147,862) | (1,999) |
Operating lease right-of-use liability | (140,297) | (92,270) |
Accounts payable - trade and accrued expenses | (376,882) | (64,933) |
NET CASH (USED IN) OPERATING ACTIVITIES | (7,047,684) | (6,340,649) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of research and development equipment | (12,696) | (41,857) |
NET CASH (USED IN) INVESTING ACTIVITIES: | (12,696) | (41,857) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from debt offering | 3,805,699 | 0 |
Proceeds from issuance of common stock offering, net | 203,105 | 0 |
Payments for debt offering | (262,450) | 0 |
Proceeds from issuance of common stock for stock options exercise | 0 | 2,343 |
Proceeds from issuance of common stock for warrant exercise | 0 | 12,500 |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 3,746,354 | 14,843 |
NET (DECREASE) IN CASH AND CASH EQUIVALENTS | (3,314,026) | (6,367,663) |
CASH AND CASH EQUIVALENTS, beginning of period | 8,023,716 | 12,593,692 |
CASH AND CASH EQUIVALENTS, end of period | 4,709,690 | 6,226,029 |
Supplemental disclosure of non-cash financing activity: | ||
Deemed dividends on Series C and D Preferred Stock | 162,238 | 0 |
Warrants issued for debt offering | $ 1,536,743 | $ 0 |
ORGANIZATION
ORGANIZATION | 6 Months Ended |
Mar. 31, 2024 | |
ORGANIZATION | |
ORGANISATION | 1. ORGANIZATION Know Labs, Inc. (the “Company”) was incorporated under the laws of the State of Nevada in 1998. The Company currently 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. The Company is focused on the development and commercialization of our proprietary sensor technology utilizing radio and microwave spectroscopy. When paired with our machine learning platform, our technology is 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 first application of our sensor technology is in a product to non-invasively monitor blood glucose levels. Our device will provide the user with real-time information on their blood glucose levels. We launched the Generation 2 working prototype device during the three months ended March 31, 2024. This device embodies the sensor which has been used in internal clinical testing. The device, which is a wearable format and may be a final form factor, ready for commercialization. That device will be utilized in expanded internal and external testing. The device may be refined over time and will require FDA clearance prior to entering the market. |
LIQUIDITY AND GOING CONCERN
LIQUIDITY AND GOING CONCERN | 6 Months Ended |
Mar. 31, 2024 | |
LIQUIDITY AND GOING CONCERN | |
LIQUIDITY | 2. LIQUIDITY AND GOING CONCERN The Company has cash and cash equivalents of $4,709,690 and net working capital of $3,466,814 ($3,819,660 exclusive of current portion of convertible notes payable) as of March 31, 2024. The Company anticipates that it will record losses from operations for the foreseeable future. The Company’s ability to transition profitable operations is dependent upon achieving a level of revenues adequate to support its cost structure. The Company believes that it has enough available cash and flexibility with its operating expenses to operate until at least October 31, 2024. On February 27, 2024, the Company (a) entered into a securities purchase agreement with the selling stockholder pursuant to which we may issue to the selling stockholder one or more senior convertible notes in the aggregate principal amount of up $14,400,000 for an aggregate purchase price equal to up to $12,000,000 and common stock purchase warrants and (b) issued a $4,800,000 Note and the Warrant to the selling stockholder in exchange for a purchase price of $4,000,000 and net proceeds of $3,805,699. See Note 6. On March 20, 2024, the Company entered into an At the Market Offering Agreement with The Benchmark Company, LLC pursuant to which we may, from time to time, offer and sell shares of our common stock through or to The Benchmark Company, LLC as the Company’s sales agent or manager in an aggregate amount of up to $5,000,000. The proceeds of warrants currently outstanding, which could be exercised on a cash basis, may generate potential proceeds of up to $20,808,000. The Company expects that portions of these warrants will be exercised but there is no guarantee any portion will be exercised. Management of the Company intends to raise additional funds through the issuance of equity securities or debt. The Company is currently working on some capital fund raising transactions. There can be no assurance that, in the event the Company requires additional financing, such financing will be available at terms acceptable to the Company, if at all. Failure to generate sufficient cash flows from operations, raise additional capital and reduce discretionary spending could have a material adverse effect on the Company’s ability to achieve its intended business objectives. As a result, the substantial doubt about the Company’s ability to continue as a going concern has not been alleviated. The accompanying consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES ADOPTION OF ACCOUNTING STANDARDS | 6 Months Ended |
Mar. 31, 2024 | |
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 Property and Equipment Long-Lived 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. Research and Development Expenses 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, accounts payable and accrued expenses approximate the fair value of the respective assets and liabilities as of March 31, 2024 and 2023 are based upon the short-term nature of the assets and liabilities. The fair value of the Company’s convertible notes payable are not readily available given the terms and conditions, including the conversion features, are complex. The Company has a money market account which is considered a Level 1 asset. The balance as of March 31, 2024 and September 30, 2023 was $4,782,621 and $7,836,393, respectively. No other assets or liabilities are required to be recorded at fair value on a recurring nature. 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 March 31, 2024 and 2023. Stock Based Compensation Convertible Securities Net Loss per Share As of March 31, 2024, the Company had 82,512,166 shares of common stock issued and outstanding. As of March 31, 2024, there were options outstanding for the purchase of 29,022,016 shares of the Company’s common stock (including unearned stock option grants totaling 4,179,825 shares related to performance targets), warrants for the purchase of 22,984,961 shares of the Company’s common stock, 8,108,356 shares of the Company’s common stock issuable, collectively, upon the conversion of our Series C Convertible Preferred Stock and Series D Convertible Preferred Stock, and approximately 3,361,095 shares of the Company’s common stock, collectively, reserved to pay accrued dividends on our Series C Convertible Preferred Stock and Series D Convertible Preferred Stock. In addition, the Company currently has 9,020,264 shares of its common stock at the current price of $0.25 per share reserved and are issuable upon conversion of convertible debentures of $2,761,939 and 4,800,000 shares of its common stock at the current price of $1.00 per share reserved and are issuable upon conversion of convertible debentures of $4,800,000. Further, under the current terms of our Series C Convertible Preferred Stock and Series D Convertible Preferred Stock, and assuming no changes in the ownership thereof, going forward on a quarterly basis the Company will accrete as a preferred dividend the value of approximately 160,000 shares of common stock, which are issuable if such dividends become payable as additional shares of preferred stock, and such preferred stock is then converted into common stock. All of the foregoing shares could potentially dilute future earnings per share but are excluded from the March 31, 2024, calculation of net loss per share because the impact is antidilutive. As of March 31, 2023, the Company had 48,207,937 shares of common stock issued and outstanding. As of March 31, 2023, there were options outstanding for the purchase of 15,019,596 common shares (including unearned stock option grants totaling 3,999,825 shares related to performance targets), warrants for the purchase of 21,736,313 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 the foregoing shares could potentially dilute future earnings per share but are excluded from the March 31, 2023, calculation of net loss per share because their impact is antidilutive. Comprehensive loss Dividend Policy Use of Estimates Recent Accounting Pronouncements Based on the Company’s review of accounting standard updates recently issued, those standards not yet required to be adopted and proposed standards for the future, the Company does not believe such items are expected to have a significant impact on the Company’s consolidated financial statements. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 6 Months Ended |
Mar. 31, 2024 | |
PROPERTY AND EQUIPMENT | |
PROPERTY AND EQUIPMENT | 4. PROPERTY AND EQUIPMENT Property and equipment as of March 31, 2024 and 2023 was comprised of the following: Estimated Useful Lives March 31, 2024 September 30, 2023 Machinery and equipment 2-3 years $ 226,027 $ 213,330 Furniture and fixtures 3 years 21,366 21,366 Less: accumulated depreciation (191,738 ) (153,371 ) $ 55,655 $ 81,325 Total depreciation expense was $38,367 and $205,094 for the three months ended March 31, 2024 and 2023, respectively. Equipment is used primarily for research and development purposes and accordingly $36,450 and $194,839 in depreciation is classified in research and development expenses during the three months ended March 31, 2024 and 2023, respectively. |
LEASES
LEASES | 6 Months Ended |
Mar. 31, 2024 | |
LEASES | |
LEASES | 5. LEASES The Company has entered into operating leases for office and development facilities which range from two to three years and include options to renew. The Company determines whether an arrangement is or contains a lease based upon the unique facts and circumstances at the inception of the lease. Operating lease liabilities and their corresponding right-of-use asses are recorded based upon the present value of the lease payments over the expected lease term. As of March 31, 2024 and September 30, 2023, total operating lease liabilities were approximately $14,500 and $154,797, respectively. Right of use assets totaled approximately $9,175 and $145,090 at March 31, 2024 and September 30, 2023, respectively. In the six months ended March 31, 2024 and 2023, the Company recognized $113,305 and $146,343, respectively in total lease costs for the leases. Because the rate implicit in each lease is not readily determinable, the Company uses its estimated incremental borrowing rate to determine the present value of the lease payments. The weighted average remaining lease term for the operating leases was three months at March 31, 2024 and the weighted average discount rate was 7%. The minimum future lease payments as of March 31, 2024 are as follows: Year Ended March 31, 2025 Total remaining payments $ 8,723 Less imputed interest 5,777 Total lease liability $ 14,500 |
CONVERTIBLE NOTES PAYABLE AND N
CONVERTIBLE NOTES PAYABLE AND NOTE PAYABLE | 6 Months Ended |
Mar. 31, 2024 | |
CONVERTIBLE NOTES PAYABLE AND NOTE PAYABLE | |
CONVERTIBLE NOTES PAYABLE AND NOTE PAYABLE | 6. CONVERTIBLE NOTES PAYABLE AND NOTE PAYABLE Convertible notes payable as of March 31, 2024 and September 30, 2023 are summarized below: March 31, 2024 September 30, 2023 Clayton A. Struve $ 1,301,005 $ 1,301,005 Ronald P. Erickson and affiliates 1,460,926 1,460,926 Lind Global Fund II LP 2,687,315 - $ 5,449,246 $ 2,761,931 Long term $ 1,629,586 $ - Short term 3,819,659 2,761,931 $ 5,449,246 $ 2,761,931 Convertible Promissory Notes with Clayton A. Struve The Company owes Clayton A. Struve, a significant stockholder, $1,301,005 under convertible promissory or OID notes. The Company recorded accrued interest of $97,822 and $94,062 as of March 31, 2024 and September 30, 2023, respectively. On September 15, 2023, the due dates on the notes was further extended to September 30, 2024. The Company expensed $230,005 as loss on debt extinguishment during the year ended September 30, 2023 related to the extension of the notes. The Company recorded in convertible note payable the incremental value related to the conversion feature and as such, we recorded the extension value as an expense with an offset to convertible note payable. The extension value will be reclassified to equity upon conversion. Convertible Redeemable Promissory Notes with J3E2A2Z The Company owes Ronald P. Erickson and J3E2A2Z, an entity affiliated controlled by Ronald P. Erickson $1,460,926 under convertible promissory notes. 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 our 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 Company recorded accrued interest of $98,953 and $218,334 as of March 31, 2024 and September 30, 2023, respectively. On September 15, 2023, the due dates on the notes were extended to September 30, 2024. The Company expensed $276,860 as interest during the year ended September 30, 2023 related to the extension of the notes. The Company recorded in convertible note payable the incremental value related to the conversion feature and as such, we recorded the extension value as an expense with an offset to convertible note payable. The extension value will be amortized to equity upon conversion. Senior Convertible Note with Lind Global Fund II, LP On February 27, 2024, the Company (a) entered into a securities purchase agreement with Lind Global Fund II, LP (“Lind”), pursuant to which the Company may issue Lind one or more senior convertible notes (the “Notes”) in the aggregate principal amount of up to Fourteen Million Four Hundred Thousand Dollars ($14,400,000) for an aggregate purchase price equal to up to Twelve Million Dollars ($12,000,000) (the “Offering”) and Common Stock purchase warrants and (b) issued to Lind an initial Note with an outstanding principal amount of Four Million Eight Hundred Thousand Dollars ($4,800,000) in exchange for a purchase price of Four Million Dollars ($4,000,000), that is convertible into shares of the Company’s common stock at an initial conversion price of $1.00 per share, subject to adjustment, and an initial Warrant to purchase up to 6,000,000 shares of the Company’s common stock at an initial exercise price of $0.80 per share, subject to adjustment. Warrant Shares issued shall be equal to the applicable funding amount multiplied by 75% and divided by the volume weighted average price of the common stock on the trading date immediately preceding the closing date. The Company issued 3,000,000 to Lind in connection with the $4,000,000 funding amounts. The Notes bearing $800,000 Original Issue Discount (the “OID”) do not carry any interest. Beginning on the date that is 120 days from the issuance date of each Note and on each one (1) month anniversary thereafter for 20 months, the Company shall pay Lind an amount equal to the greater of (x) 5% of the aggregate principal amount of such Note or (y) $240,000, until the outstanding principal amount of such Note has been paid in full prior to or on its maturity date or, if earlier, upon acceleration, conversion or redemption of such Note in accordance with the terms thereof (the “Monthly Payments”). At the Company’s discretion, the Monthly Payments shall be made in (i) cash, (ii) shares of the Company’s common stock, or (iii) a combination of cash and shares; if made in shares, the number of shares shall be determined by dividing (x) the principal amount being paid in shares by (y) 90% of the average of the 3 lowest daily VWAPs during the 20 trading days prior to the applicable payment date. The Notes set forth certain conditions that must be satisfied before the Company may make any Monthly Payments in shares of common stock. If the Company makes a Monthly Payment in cash, the Company must also pay Lind a cash premium of 5% of such Monthly Payment. Lind may elect with respect to no more than two (2) Monthly Payments to increase the amount of such monthly payment up to $750,000 which increase would be paid only in shares of the Company’s common stock upon notice to the Company. Any such increased payment shall be deducted from the amount of the last monthly payment owed under the Note. Issuance of Note Shares and Warrant Shares upon repayment or conversion of Notes and exercise of Warrants is subject to an ownership limitation equal to 4.99% of the Company’s outstanding shares of common stock; provided, that if Lind and its affiliates beneficially own in excess of 4.99% of the Company’s outstanding shares of common stock, then such limitation shall automatically increase to 9.99% so long as Lind and its affiliates own in excess of 4.99% of such common stock (and shall, for the avoidance of doubt, automatically decrease to 4.99% upon Lind and its affiliates ceasing to own in excess of 4.99% of such common stock). Upon the occurrence of any Event of Default, the Notes will become immediately due and payable and the Company must pay Lind an amount equal to 120% of the then outstanding principal amount of each Note, in addition to any other remedies under the Note or the other Transaction Documents. Events of default include, among others, failure of the Company to make any Note payment when due, a default in any indebtedness or adverse judgements in excess of $250,000, the failure of the Company to instruct its transfer agent to issue unlegended certificates, the Company’s shares of common stock no longer being public traded or listed on a national securities exchange, any stop order or trading suspension restricting the trading in the Company’s common stock, and the Company’s market capitalization is below $15 million for consecutive 10 days. The Warrant may be exercised via cashless exercise in the event there is no effective registration statement covering the shares of Common Stock underlying a Warrant exercise. Pursuant to the terms of the Securities Purchase Agreement, if at any time prior to a date that is 24 months following the closing of the Offering, the Company proposes to offer or sell any additional securities in a subsequent financing, the Company shall first offer Lind the opportunity to purchase up to 20% of such new securities. The Company’s obligations under the Notes are secured by a first-priority security interest in all of its assets pursuant to the terms of a Security Agreement in favor of Lind. In addition, in connection with the Offering, the Company’s subsidiary Particle, Inc., a Nevada corporation (“Particle”), has guaranteed all of the obligations of the Company in connection with the Offering pursuant to the terms of a Guaranty in favor of Lind. The sale of the Notes and the terms of the Offering, including the Guaranty are set forth in the Securities Purchase Agreement, the Note, the Warrant, a Security Agreement, and Guaranty are the Transaction Documents. Pursuant to the Securities Purchase Agreement, the Company registered all of the Note Shares and Warrant Shares issued to Lind in the Offering. The Company received net proceeds of $3,805,699 in exchange for the issuance of the $4,800,000 Notes and 3,000,000 Warrant Shares. The fair value of the 3,000,000 Warrant Shares was $1,563,743on the date of issuance and was classified in equity. The value of the Warrant Shares was recorded as debt discount (with an offset to APIC) and will be amortized over the two-year term of the Notes. In connection with this securities purchase agreement, the Company incurred approximately $994,000 of issuance costs of which $675,971 were allocated to the Note and $318,330 to the Warrant Shares. The amount allocated to the Notes was recorded as debt discount (with an offset to APIC) and will be amortized over the two-year term of the Notes. The Company recorded $100,029 of amortization of debt issuance costs during the three and six months ended March 31, 2024 related to this security purchase agreement. |
EQUITY
EQUITY | 6 Months Ended |
Mar. 31, 2024 | |
EQUITY | |
EQUITY | 7. EQUITY The following description summarizes important terms of the classes of our capital stock as of March 31, 2024. Authorized Capital Stock · 200,000,000 shares of common stock, par value $0.001 per share; and · 5,000,000 shares of “blank check” preferred stock, par value $0.001 per share, of which: · 30,000 shares have been designated as our Series C Convertible Preferred Stock, $0.001 par value per share; and · 20,000 shares have been designated as our Series D Convertible Preferred Stock, $0.001 par value per share. Outstanding Shares of Capital Stock · 82,512,166 shares of common stock issued and outstanding, held by holders of record; · 17,858 shares of Series C Convertible Preferred Stock issued and outstanding, held by one holder of record; and · 10,161 shares of Series D Convertible Preferred Stock issued and outstanding, held by one holder of record. Securities Subject to Price Adjustments If in the future, the Company sells its common stock at a price below $0.25 per share, the conversion price of our outstanding shares of series C convertible preferred stock and series D convertible preferred stock would adjust below $0.25 per share pursuant to the documents governing such instruments. In addition, the conversion price of the convertible promissory notes referred to above and the exercise price of certain outstanding warrants to purchase 9,020,264 shares of common stock would adjust below $0.25 per share pursuant to the documents governing such instruments. Series C and D Preferred Stock, Warrants and Dividends 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 cumulative dividend of 8% and an ownership blocker of 4.99%. Dividends are due and payable in cash when declared by the Company or when the stock is converted. Series C Preferred stock is senior to Series D Preferred stock and is entitled to receive equal dividends paid to Series D. 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 and warrant and its conversion price, were adjusted to $0.25 per share pursuant to the documents governing such instruments. As of March 31, 2024, Mr. Struve owns all of the 17,858 issued and outstanding shares of Series C Preferred Stock. Each holder of Preferred Series C is allowed to vote as a common shareholder as if the shares were converted to common stock up to the ownership blocker of 4.99%. In 2017 the Company closed a $750,000 Series D Preferred Stock and Warrant offering with Mr. Struve. As of March 31, 2024, Mr. Struve owns all of the 10,161 issued and outstanding shares of Series D Preferred Stock. Each outstanding share of series D preferred stock will accrue cumulative cash dividends at a rate equal to 8.0% per annum, subject to adjustment as provided in the series D preferred stock certificate of designations. Dividends are due and payable in cash when declared by the Company or when the stock is converted. In addition, On August 14, 2017, the price of the Series D Preferred Stock were adjusted to $0.25 per share pursuant to the documents governing such instruments. Each holder of Preferred Series D is allowed to vote as a common shareholder as if the shares were converted to common stock up to the ownership blocker of 4.99%. Based upon the modified terms and conditions of our Series C preferred stock and Series D preferred stock certificates of designations dated August 10, 2023, it was determined that Series C preferred stock and Series D preferred stock dividends need to be accreted going forward. As of March 31, 2024, cumulative unpaid Series C preferred stock and Series D preferred stock dividends totaled approximately $840,000, which on a converted-to-common-stock basis represents approximately 3,361,095 shares of common stock. The Company has recorded $3,688,892 in cumulative deemed dividends related to Series C preferred stock and D preferred stock which have not been paid, net of the approximately $351,000 of accumulated dividends with respect to the Series D preferred stock that were settled for 1,402,784 shares of common stock. Mr. Struve is subject to an ownership blocker limiting his ownership to 4.99% of our outstanding shares of common stock and thus the number of common shares he can receive for dividends. Unpaid accreted stock dividends will be issued to Mr. Struve if he converts preferred stock or if the Board declares a dividend thereon, limited to his 4.99% ownership blocker. Assuming no changes in the amount of outstanding Series C preferred stock or Series D preferred stock ownership, going forward on a quarterly basis the Company will accrete as a preferred dividend the value of approximately 160,000 shares of common stock, which are issuable if such dividends become payable as additional shares of preferred stock, and such preferred stock is then converted into common stock. Common Stock 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. Six Months Ended March 31, 2024 During the six months ended March 31, 2024, we had the following sales of unregistered sales of equity securities: The Company issued 453,492 shares of our common stock total to six directors at $0.434 per share for director services for a total value of $196,816 which was expensed during the quarter ended March 31, 2024. On October 26, 2023, the Company closed an offering of its common stock pursuant to which we sold 883,061 shares of common stock, at a purchase price of $0.25 per share. After deducting underwriting commissions and other offering expenses, the Company received net proceeds of $203,105. On March 7, 2024, the Company issued 102,302 shares of the Company’s common stock at $0.782 with a total value of $80,000 per share related to a debt offering. The $80,000 was recorded as debt issuance costs and is amortized over the two-year term of the debt. Warrants to Purchase Common Stock Six Months Ended March 31, 2024 On September 29, 2023, pursuant to the Underwriting Agreement, the Company issued common stock purchase warrants to Boustead Securities, LLC and The Benchmark Company, LLC to purchase an aggregate of 123,648 shares of Common Stock at an exercise price of $0.25 per share, subject to adjustments. The Representatives’ Warrants are immediately exercisable, and may be exercised at any time and from time to time, in whole or in part, until September 26, 2028 and may be exercised on a cashless basis. The Representatives’ Warrants also include customary anti-dilution provisions and immediate piggyback registration rights with respect to the registration of the shares underlying the Representatives’ Warrants. The warrants were valued at $20,896 and recorded in additional paid in capital as costs from common stock offering. On February 27, 2024, the Company (a) entered into a securities purchase agreement with Lind Global Fund II, LP (“Lind”), issued a Warrant to purchase up to 6,000,000 shares of the Company’s common stock at an initial exercise price of $0.80 per share, subject to adjustment. The Warrant may be exercised via cashless exercise in the event there is no effective registration statement covering the shares of Common Stock underlying a Warrant exercise. The initial 3,000,000 warrants issued were valued at $1,536,743 and recorded as debt issuance costs (with an offset to additional paid in capital) and are amortized over the two-year term of the Notes as a component of interest expense. On March 8, 2024, the Company issued 714,828 shares of the Company’s common stock in a cashless warrant exercise. Warrants to purchase 290,152 shares of common stock at $0.454 per share were forfeited. A summary of the warrants outstanding as of March 31, 2024 were as follows: Weighted Average Exercise Shares Price Outstanding October 1, 2023 20,866,313 $ 1.06 Issued 3,123,648 0.78 Exercised (714,828 ) (0.25 ) Forfeited (290,172 ) (0.45 ) Expired - - Outstanding at end of period 22,984,961 $ 1.06 Exercisable at end of period 22,984,961 The following table summarizes information about warrants outstanding and exercisable as of March 31, 2024: Weighted Weighted Weighted Average Average Average Number of Remaining Exercise Shares Exercise Warrants Life ( In Years) Price Exercisable Price 8,788,029 1.84 $ 0.25 8,788,029 $ 0.25 3,000,000 4.92 0.80 3,000,000 0.80 6,512,207 1.73 1.20-1.85 6,512,207 1.20-1.85 4,684,725 2.10 2.00-3.00 4,684,725 2.00-3.00 22,984,961 2.22 $ 1.06 22,984,961 $ 1.06 The significant weighted average assumptions relating to the valuation of the Company’s warrants for the six months ended March 31, 2024 were as follows: Dividend yield 0 % Expected life 3 years Expected volatility 105 % Risk free interest rate 4.32 % There were vested warrants of 22,984,961 with an aggregate intrinsic value of $3,339,451. |
STOCK INCENTIVE PLANS
STOCK INCENTIVE PLANS | 6 Months Ended |
Mar. 31, 2024 | |
STOCK INCENTIVE PLANS | |
STOCK INCENTIVE PLANS | 8. STOCK INCENTIVE PLANS On August 12, 2021, the Company established its 2021 Equity Incentive Plan (the “2021 Plan”), which was adopted by stockholders on October 15, 2021. The Company initially had 20,000,000 shares of its common stock authorized as the maximum number of shares of common stock that may be delivered to participants under the 2021 Plan, subject to adjustment for certain corporate changes affecting the shares, such as stock splits. This number was increased to 22,000,000 shares of common stock as of January 1, 2022 as a result of the automatic share reserve increase described below. Six Months Ended March 31, 2024 During the six months ended March 31, 2024, the Company issued stock option grants to twenty nine employees and consultants for 16,340,548 shares at an average exercise price of $0.29 per share. The stock option grants expire in five years. The stock option grants primarily vest immediately to quarterly over two to four years. During the six months ended March 31, 2024, stock option grants for 1,824,600 shares at an average exercise price of $1.55 per share were forfeited. Stock option activity for the six months ended March 31, 2024 and the years ended September 30, 2023 and 2022 was as follows: Weighted Average Options Exercise Price Outstanding as of September 30, 2023 14,506,158 $ 1.55 Granted 16,340,548 0.29 Exercised - - Forfeitures (1,824,600 ) (1.54 ) Outstanding as of March 31, 2024 29,022,106 $ 0.84 The following table summarizes information about stock options outstanding and exercisable as of March 31, 2024: Weighted Average Weighted Weighted Remaining Average Average Range of Number Life Exercise Price Number Exercise Price Exercise Prices Outstanding In Years Outstanding Exercisable Exercisable $0.25-0.51 16,340,548 4.53 $ 0.29 4,038,613 $ 0.38 $0.88-1.25 2,161,875 2.66 0.15 2,024,375 0.55 $1.28 - 1.67 8,379,683 3.19 1.49 2,150,691 1.47 $1.79-3.67 2,140,000 2.78 2.19 990,625 2.15 29,022,106 3.90 $ 0.84 9,204,304 $ 0.74 The significant weighted average assumptions relating to the valuation of the Company’s stock option grants for the three months ended March 31, 2024 were as follows: Assumptions Dividend yield 0 % Expected life 3 years Expected volatility 105 % Risk free interest rate 4.16-4.23 % There are stock option grants of 29,022,106 shares as of March 31, 2024 with an aggregate intrinsic value of $6,595,047. There are 29,022,106 (including unearned stock option grants totaling 4,179,825 shares related to performance milestones) options to purchase common stock at an average exercise price of $0.84 per share outstanding as of March 31, 2024 under the 2021 Plan. The Company recorded $1,315,563 and $1,927,187 of compensation expense, net of related tax effects, relative to stock options for the six months ended March 31, 2024 and 2023, respectively, in accordance with ASC 718. As of March 31, 2024, there is $6,662,517 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 3.9 years. |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Mar. 31, 2024 | |
INCOME TAXES | |
INCOME TAXES | 9. INCOME TAXES The Company recorded a provision for income taxes of $0 for the six months ended March 31, 2024 and 2023. The Company’s effective tax rate was 0% for the three months ended March 31, 2024 and 2023. The difference between the effective tax rate and the federal statutory tax rate primarily relates to the valuation allowance on the Company’s deferred tax assets. For interim periods, the Company estimates its annual effective income tax rate and applies the estimated rate to the year-to-date income or loss before income taxes. The Company also computes the tax provision or benefit related to items reported separately and recognizes the items net of their related tax effect in the interim periods in which they occur. The Company also recognizes the effect of changes in enacted tax laws or rates in the interim periods in which the changes occur. As of March 31, 2024 and 2023, the Company retains a full valuation allowance on its deferred tax assets. The realization of the Company’s deferred tax assets depends primarily on its ability to generate taxable income in future periods. The amount of deferred tax assets considered realizable in future periods may change as management continues to reassess the underlying factors it uses in estimating future taxable income. |
SIGNIFICANT AND OTHER TRANSACTI
SIGNIFICANT AND OTHER TRANSACTIONS WITH RELATED PARTIES | 6 Months Ended |
Mar. 31, 2024 | |
SIGNIFICANT AND OTHER TRANSACTIONS WITH RELATED PARTIES | |
OTHER SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES | 10. SIGNIFICANT AND OTHER TRANSACTIONS WITH RELATED PARTIES Transactions with Clayton Struve See Notes 6 and 7 for related party transactions with Clayton A. Struve, a significant stockholder. Related Party Transactions with Ronald P. Erickson See Notes 6, 7 and 11 for related party transactions with Ronald P. Erickson, the Company’s Chairman and Chief Executive Officer and affiliated entities. On October 10, 2023, the Company issued a stock option grant to Ronald P. Erickson for 4,640,844 shares at an exercise price of $0.25 per share. The stock option grant expires in five years. The stock option grant vests quarterly over four years. Related Party Transactions with Peter J. Conley, Chief Financial Officer and Senior Vice President, Intellectual Property On October 10, 2023, the Company issued a stock option grant to Peter J. Conley for 3,001,000 shares at an exercise price of $0.25 per share. The stock option grant expires in five years. The stock option grant vests quarterly over four years. Related Party Transactions with Directors During the six months ended March 31, 2024, the Company issued stock option grants to six directors for a total of 2,809,817 shares at an exercise price of $0.46 per share. The stock option grant expires in five years. The stock option grants vested at issuance. |
COMMITMENTS CONTINGENCIES AND L
COMMITMENTS CONTINGENCIES AND LEGAL PROCEEDINGS | 6 Months Ended |
Mar. 31, 2024 | |
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 business. The Company is currently not a party to any pending legal proceeding that is not ordinary routine litigation incidental to the Company’s business. Employment and Related Agreements Employment Agreement with Ronald P. Erickson, Chairman of the Board and Chief Executive Officer See the Employment Agreement for Ronald P. Erickson that was disclosed in Form 10-K filed with the SEC on December 19, 2023. Mr. Erickson was appointed Chief Executive Officer on January 23, 2023. Employment Agreement with Peter J. Conley, Chief Financial Officer and Senior Vice President, Intellectual Property See the Employment Agreement for Peter J. Conley that was disclosed in Form 10-K filed with the SEC on December 19, 2023. Properties and Operating Leases The Company is obligated under the following leases for its various facilities. 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 $2,908. The Company expects to vacate the office on May 31, 2024. On May 18, 2021, the Company entered into a lease for its lab facilities located at 914 E Pine Street, Suite 212, Seattle, WA 98122 and leased 2,642 square feet. The net monthly lease payment was $8,697 and the lease was terminated on February 5, 2024. On October 11, 2021, the Company entered into the First Amendment of Lease and added 2,485 square feet for $5,000 per month. On September 20, 2022, the Company entered into the Second Amendment of Lease for additional space. The expanded space was utilized for research and testing. The Amendment of Lease expired on December 31, 2023. On November 22, 2022, the Company leased an additional 1,800 square feet of lab facilities at 123 Boylston Ave, Suite C, Seattle, WA 98102 with a net monthly payment is $2,250. The Company expects to vacate the office on May 31, 2024. On March 2, 2024, the Company entered into a lease for executive and research and testing facilities at 619 Western Avenue, Suite 610, Seattle, Washington 98104. The Company leases 5,996 square feet and the current net monthly payment is $11,492 and increases at 3% annually after year one. The lease commences on May 1, 2024 and terminates on July 31, 2027. |
SEGMENT REPORTING
SEGMENT REPORTING | 6 Months Ended |
Mar. 31, 2024 | |
SEGMENT REPORTING | |
SEGMENT REPORTING | 12. SEGMENT REPORTING The Company considers the business to currently have one operating segment; the development of its radio frequency spectroscopy technology with a first focus on non-invasively ascertaining blood glucose levels. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Mar. 31, 2024 | |
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, 2024, there were no material transactions that require disclosure: |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES ADOPTION OF ACCOUNTING STANDARDS (Policies) | 6 Months Ended |
Mar. 31, 2024 | |
SIGNIFICANT ACCOUNTING POLICIES ADOPTION OF ACCOUNTING STANDARDS | |
Basis of Presentation | Basis of Presentation |
Principles of Consolidation | Principles of Consolidation |
Cash and Cash Equivalents | Cash and Cash Equivalents |
Property and Equipment | Property and Equipment |
Long-Lived Assets | Long-Lived Assets |
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. |
Research and Development Expenses | Research and Development Expenses |
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, accounts payable and accrued expenses approximate the fair value of the respective assets and liabilities as of March 31, 2024 and 2023 are based upon the short-term nature of the assets and liabilities. The fair value of the Company’s convertible notes payable are not readily available given the terms and conditions, including the conversion features, are complex. The Company has a money market account which is considered a Level 1 asset. The balance as of March 31, 2024 and September 30, 2023 was $4,782,621 and $7,836,393, respectively. No other assets or liabilities are required to be recorded at fair value on a recurring nature. |
Derivative Financial Instruments | Derivative Financial Instruments – The Company determined that the conversion features for purposes of bifurcation within its currently outstanding convertible notes payable were immaterial and there was no derivative liability to be recorded as of March 31, 2024 and 2023. |
Stock Based Compensation | Stock Based Compensation |
Convertible Securities | Convertible Securities |
Net Loss per Share | Net Loss per Share As of March 31, 2024, the Company had 82,512,166 shares of common stock issued and outstanding. As of March 31, 2024, there were options outstanding for the purchase of 29,022,016 shares of the Company’s common stock (including unearned stock option grants totaling 4,179,825 shares related to performance targets), warrants for the purchase of 22,984,961 shares of the Company’s common stock, 8,108,356 shares of the Company’s common stock issuable, collectively, upon the conversion of our Series C Convertible Preferred Stock and Series D Convertible Preferred Stock, and approximately 3,361,095 shares of the Company’s common stock, collectively, reserved to pay accrued dividends on our Series C Convertible Preferred Stock and Series D Convertible Preferred Stock. In addition, the Company currently has 9,020,264 shares of its common stock at the current price of $0.25 per share reserved and are issuable upon conversion of convertible debentures of $2,761,939 and 4,800,000 shares of its common stock at the current price of $1.00 per share reserved and are issuable upon conversion of convertible debentures of $4,800,000. Further, under the current terms of our Series C Convertible Preferred Stock and Series D Convertible Preferred Stock, and assuming no changes in the ownership thereof, going forward on a quarterly basis the Company will accrete as a preferred dividend the value of approximately 160,000 shares of common stock, which are issuable if such dividends become payable as additional shares of preferred stock, and such preferred stock is then converted into common stock. All of the foregoing shares could potentially dilute future earnings per share but are excluded from the March 31, 2024, calculation of net loss per share because the impact is antidilutive. As of March 31, 2023, the Company had 48,207,937 shares of common stock issued and outstanding. As of March 31, 2023, there were options outstanding for the purchase of 15,019,596 common shares (including unearned stock option grants totaling 3,999,825 shares related to performance targets), warrants for the purchase of 21,736,313 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 the foregoing shares could potentially dilute future earnings per share but are excluded from the March 31, 2023, calculation of net loss per share because their impact is antidilutive. |
Comprehensive Loss | Comprehensive loss |
Dividend Policy | Dividend Policy |
Use of Estimates | Use of Estimates |
Recent Accounting Pronouncements | Based on the Company’s review of accounting standard updates recently issued, those standards not yet required to be adopted and proposed standards for the future, the Company does not believe such items are expected to have a significant impact on the Company’s consolidated financial statements. |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 6 Months Ended |
Mar. 31, 2024 | |
PROPERTY AND EQUIPMENT | |
Schedule of Property and equipment | Estimated Useful Lives March 31, 2024 September 30, 2023 Machinery and equipment 2-3 years $ 226,027 $ 213,330 Furniture and fixtures 3 years 21,366 21,366 Less: accumulated depreciation (191,738 ) (153,371 ) $ 55,655 $ 81,325 |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended |
Mar. 31, 2024 | |
LEASES | |
Summary of minimum future lease payments | Year Ended March 31, 2025 Total remaining payments $ 8,723 Less imputed interest 5,777 Total lease liability $ 14,500 |
CONVERTIBLE NOTES PAYABLE AND_2
CONVERTIBLE NOTES PAYABLE AND NOTE PAYABLE (Tables) | 6 Months Ended |
Mar. 31, 2024 | |
CONVERTIBLE NOTES PAYABLE AND NOTE PAYABLE | |
Schedule of convertible notes payable | March 31, 2024 September 30, 2023 Clayton A. Struve $ 1,301,005 $ 1,301,005 Ronald P. Erickson and affiliates 1,460,926 1,460,926 Lind Global Fund II LP 2,687,315 - $ 5,449,246 $ 2,761,931 Long term $ 1,629,586 $ - Short term 3,819,659 2,761,931 $ 5,449,246 $ 2,761,931 |
EQUITY (Tables)
EQUITY (Tables) | 6 Months Ended |
Mar. 31, 2024 | |
EQUITY | |
Schedule of Warrant activity | Weighted Average Exercise Shares Price Outstanding October 1, 2023 20,866,313 $ 1.06 Issued 3,123,648 0.78 Exercised (714,828 ) (0.25 ) Forfeited (290,172 ) (0.45 ) Expired - - Outstanding at end of period 22,984,961 $ 1.06 Exercisable at end of period 22,984,961 |
Schedule of Warrants outstanding and exercisable | Weighted Weighted Weighted Average Average Average Number of Remaining Exercise Shares Exercise Warrants Life ( In Years) Price Exercisable Price 8,788,029 1.84 $ 0.25 8,788,029 $ 0.25 3,000,000 4.92 0.80 3,000,000 0.80 6,512,207 1.73 1.20-1.85 6,512,207 1.20-1.85 4,684,725 2.10 2.00-3.00 4,684,725 2.00-3.00 22,984,961 2.22 $ 1.06 22,984,961 $ 1.06 |
Schedule of weighted average assumptions | Dividend yield 0 % Expected life 3 years Expected volatility 105 % Risk free interest rate 4.32 % |
STOCK INCENTIVE PLANS (Tables)
STOCK INCENTIVE PLANS (Tables) | 6 Months Ended |
Mar. 31, 2024 | |
STOCK INCENTIVE PLANS | |
Schedule of Stock option activity | Weighted Average Options Exercise Price Outstanding as of September 30, 2023 14,506,158 $ 1.55 Granted 16,340,548 0.29 Exercised - - Forfeitures (1,824,600 ) (1.54 ) Outstanding as of March 31, 2024 29,022,106 $ 0.84 |
Schedule of Stock options outstanding and exercisable | Weighted Average Weighted Weighted Remaining Average Average Range of Number Life Exercise Price Number Exercise Price Exercise Prices Outstanding In Years Outstanding Exercisable Exercisable $0.25-0.51 16,340,548 4.53 $ 0.29 4,038,613 $ 0.38 $0.88-1.25 2,161,875 2.66 0.15 2,024,375 0.55 $1.28 - 1.67 8,379,683 3.19 1.49 2,150,691 1.47 $1.79-3.67 2,140,000 2.78 2.19 990,625 2.15 29,022,106 3.90 $ 0.84 9,204,304 $ 0.74 |
Schedule of weighted average assumptions relating to stock option grants | Assumptions Dividend yield 0 % Expected life 3 years Expected volatility 105 % Risk free interest rate 4.16-4.23 % |
ORGANIZATION (Details Narrative
ORGANIZATION (Details Narrative) - $ / shares | Mar. 31, 2024 | Sep. 30, 2023 |
ORGANIZATION | ||
Authorized shares of capital stock | 205,000,000 | |
Authorized shares of capital common stock | 200,000,000 | |
Authorized shares of capital stock par value | $ 0.001 | $ 0.001 |
Preferred stock shares authorized | 5,000,000 | 5,000,000 |
Preferred stock share par value | $ 0.001 | $ 0.001 |
LIQUIDITY AND GOING CONCERN (De
LIQUIDITY AND GOING CONCERN (Details Narrative) - USD ($) | 1 Months Ended | 6 Months Ended |
Feb. 27, 2024 | Mar. 31, 2024 | |
Cash and cash equivalents | $ 4,709,690 | |
Net proceed from warrants | 20,808,000 | |
Net working capital | 3,466,814 | |
Sell shares of common stock | 5,000,000 | |
Convertible notes payable | $ 3,819,660 | |
Stockholder [Member] | ||
Description of securities purchase agreement | the Company (a) entered into a securities purchase agreement with the selling stockholder pursuant to which we may issue to the selling stockholder one or more senior convertible notes in the aggregate principal amount of up $14,400,000 for an aggregate purchase price equal to up to $12,000,000 and common stock purchase warrants and (b) issued a $4,800,000 Note and the Warrant to the selling stockholder in exchange for a purchase price of $4,000,000 and net proceeds of $3,805,699 |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES ADOPTION OF ACCOUNTING STANDARDS (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2024 | Mar. 31, 2023 | Mar. 31, 2024 | Mar. 31, 2023 | Sep. 30, 2023 | |
FDIC insurance | $ 250,000 | $ 250,000 | |||
Preferred dividend | 160,000 | ||||
Options outstanding | 29,022,016 | 15,019,596 | 29,022,016 | 15,019,596 | |
Research and development expense | $ 2,175,245 | $ 2,563,469 | $ 3,661,633 | $ 4,306,520 | |
Advertising and marketing costs | 104,365 | $ 105,045 | |||
Money market accounts | $ 4,782,621 | $ 4,782,621 | $ 7,836,393 | ||
Common stock shares issued | 82,512,166 | 48,207,937 | 82,512,166 | 48,207,937 | 80,358,463 |
Common stock shares outstanding | 82,512,166 | 48,207,937 | 82,512,166 | 48,207,937 | |
Issuable upon conversion of Common stock | 4,800,000 | 4,800,000 | |||
Issuable upon conversion of convertible debentures | 2,761,939 | 2,255,066 | 2,761,939 | 2,255,066 | |
Issuable upon conversion of Common stocks | 4,800,000 | 4,800,000 | |||
Common shares current price per share | $ 0.29 | $ 0.29 | |||
Leasehold Improvements | |||||
Estimated useful lives of assets | 5 years | ||||
Minimum | |||||
Estimated useful lives of assets | 2 years | ||||
Maximum | |||||
Estimated useful lives of assets | 5 years | ||||
Stock Option 1 [Member] | |||||
Unearned stock option grants | 4,179,825 | 3,999,825 | |||
Warrants [Member] | |||||
Antidilutive securities | 22,984,961 | 21,736,313 | |||
Convertible Preferred Stock | |||||
Common stock shares issued | 3,361,095 | 48,207,937 | 3,361,095 | 48,207,937 | |
Common stock shares outstanding | 9,020,264 | 9,020,264 | 9,020,264 | 9,020,264 | |
Antidilutive securities | 8,108,356 | 8,108,356 | |||
Common shares current price per share | $ 0.25 | $ 0.25 | $ 0.25 | $ 0.25 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) | 6 Months Ended | |
Mar. 31, 2024 | Sep. 30, 2023 | |
Machinery and equipment | $ 226,027 | $ 213,330 |
Furniture and fixtures | 21,366 | 21,366 |
Less: accumulated depreciation | (191,738) | (153,371) |
Property and equipment, net | $ 55,655 | $ 81,325 |
Furniture and fixtures | ||
Estimated useful life | 3 years | |
Minimum | ||
Estimated useful life | 2 years | |
Maximum | ||
Estimated useful life | 3 years |
PROPERTY AND EQUIPMENT (Detai_2
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 6 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Depreciation expense | $ 38,367 | $ 205,094 |
Research And Development And Sellings General And Administrative [Mmber] | ||
Depreciation expense | $ 36,450 | $ 194,839 |
LEASES (Details)
LEASES (Details) - USD ($) | Mar. 31, 2024 | Sep. 30, 2023 |
LEASES | ||
Total Remaining Payments | $ 8,723 | |
Less imputed interest | (5,777) | |
Total lease liability | $ 14,500 | $ 154,797 |
LEASES (Details Narrative)
LEASES (Details Narrative) - USD ($) | 6 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Sep. 30, 2023 | |
LEASES | |||
Lease cost | $ 113,305 | $ 146,343 | |
Operating lease liability | 14,500 | $ 154,797 | |
Right-of-use assets | $ 9,175 | $ 145,090 | |
Weighted-average discount rate | 7% |
CONVERTIBLE NOTES PAYABLE AND_3
CONVERTIBLE NOTES PAYABLE AND NOTE PAYABLE (Details) - USD ($) | Mar. 31, 2024 | Sep. 30, 2023 |
Convertible notes, gross | $ 5,449,246 | $ 2,761,931 |
Non-current portion of convertible notes payable, net | 1,629,586 | 0 |
Short term | 3,819,659 | 2,761,931 |
Convertible notes, net | 5,449,246 | 2,761,931 |
Convertibles Note - Clayton A. Struve | ||
Convertible notes, gross | 1,301,005 | 1,301,005 |
Convertibles Note - Ronald P. Erickson and Affiliates | ||
Convertible notes, gross | 1,460,926 | 1,460,926 |
Lind Global Fund II LP | ||
Convertible notes, gross | $ 2,687,315 | $ 0 |
CONVERTIBLE NOTES PAYABLE AND_4
CONVERTIBLE NOTES PAYABLE AND NOTE PAYABLE (Details Narrative) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Sep. 30, 2023 | Mar. 16, 2018 | |
Loss on debt extinguishment | $ 230,005 | |||
Accrued interest | $ 97,822 | 94,062 | ||
Amortization of debt | 100,029 | |||
Indebtedness | 250,000 | |||
Market capitalization | $ 15,000,000 | |||
Description of Note Shares and Warrant Shares upon repayment or conversion of Notes and exercise of Warrants | Issuance of Note Shares and Warrant Shares upon repayment or conversion of Notes and exercise of Warrants is subject to an ownership limitation equal to 4.99% of the Company’s outstanding shares of common stock; provided, that if Lind and its affiliates beneficially own in excess of 4.99% of the Company’s outstanding shares of common stock, then such limitation shall automatically increase to 9.99% so long as Lind and its affiliates own in excess of 4.99% of such common stock (and shall, for the avoidance of doubt, automatically decrease to 4.99% upon Lind and its affiliates ceasing to own in excess of 4.99% of such common stock | |||
Description of securities purchase agreement | the Company incurred approximately $994,000 of issuance costs of which $675,971 were allocated to the Note and $318,330 to the Warrant Shares. The amount allocated to the Notes was recorded as debt discount (with an offset to APIC) and will be amortized over the two-year term of the Notes | |||
Proceeds from debt offering | $ 3,805,699 | $ 0 | ||
Issuable upon conversion of Common stock | 4,800,000 | |||
Warrant Shares | 3,000,000 | |||
Warrant amount | $ 1,563,743 | |||
Convertible Note - Clayton A. Struve | ||||
Loss on debt extinguishment | 276,860 | |||
Accrued interest | 98,953 | $ 218,334 | ||
Convertible promissory or OID notes | 1,301,005 | |||
Convertible Note - Ronald P. Erickson and Affiliates | ||||
Warrant to purchase common stock shares | 1,039,666 | |||
Exercise price of warrants | $ 0.50 | |||
Convertible promissory notes | $ 1,460,926 | |||
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 | |||
Lind Global Fund II LP | February 27, 2024 [Member] | ||||
Funding amounts | $ 4,000,000 | |||
Description of securities purchase agreement | pursuant to which the Company may issue Lind one or more senior convertible notes (the “Notes”) in the aggregate principal amount of up to Fourteen Million Four Hundred Thousand Dollars ($14,400,000) for an aggregate purchase price equal to up to Twelve Million Dollars ($12,000,000) (the “Offering”) and Common Stock purchase warrants and (b) issued to Lind an initial Note with an outstanding principal amount of Four Million Eight Hundred Thousand Dollars ($4,800,000) in exchange for a purchase price of Four Million Dollars ($4,000,000), that is convertible into shares of the Company’s common stock at an initial conversion price of $1.00 per share, subject to adjustment, and an initial Warrant to purchase up to 6,000,000 shares of the Company’s common stock at an initial exercise price of $0.80 per share, subject to adjustment. Warrant Shares issued shall be equal to the applicable funding amount multiplied by 75% and divided by the volume weighted average price of the common stock on the trading date immediately preceding the closing date. The Company issued 3,000,000 to Lind in connection with the $4,000,000 funding amounts | |||
Original Issue Discount | $ 800,000 | |||
Aggregate principal amount | 240,000 | |||
Monthly payment | $ 750,000 | |||
Cash premium | 5% |
EQUITY (Details)
EQUITY (Details) | 6 Months Ended |
Mar. 31, 2024 $ / shares shares | |
Shares | |
Share Outstanding at beginning of period | 20,866,313 |
Issued | 3,123,648 |
Exercised | (714,828) |
Forfeited | (290,172) |
Expired | 0 |
Outstanding at end of period | 22,984,961 |
Exercisable at end of period | 22,984,961 |
Weighted Average Exercise Price: | |
Outstanding at begin of period | $ / shares | $ 1.06 |
Weighted Average Exercise Price Issued | $ / shares | 0.78 |
Weighted Average Exercise Price Exercised | $ / shares | (0.25) |
Weighted Average Exercise Price Forfeited | $ / shares | (0.45) |
Weighted Average Exercise PriceExpired | $ / shares | 0 |
Outstanding at end of period | $ / shares | $ 1.06 |
EQUITY (Details 1)
EQUITY (Details 1) | 6 Months Ended |
Mar. 31, 2024 $ / shares shares | |
Number of warrants | shares | 29,022,106 |
Weighted average exercise price, outstanding | $ 0.74 |
Shares exercisable | shares | 9,204,304 |
Warrant Total [Member] | |
Number of warrants | shares | 22,984,961 |
Weighted average remaining life (years) | 2 years 2 months 19 days |
Weighted average exercise price, outstanding | $ 1.06 |
Shares exercisable | shares | 22,984,961 |
Weighted average exercise price, exercisable | $ 1.06 |
Warrant One [Member] | |
Number of warrants | shares | 3,000,000 |
Weighted average remaining life (years) | 4 years 11 months 1 day |
Weighted average exercise price, outstanding | $ 0.80 |
Shares exercisable | shares | 3,000,000 |
Weighted average exercise price, exercisable | $ 0.80 |
Warrant Two [Member] | |
Number of warrants | shares | 6,512,207 |
Weighted average remaining life (years) | 1 year 8 months 23 days |
Shares exercisable | shares | 6,512,207 |
Warrant Two [Member] | Minimum | |
Weighted average exercise price, outstanding | $ 1.20 |
Weighted average exercise price, exercisable | 1.20 |
Warrant Two [Member] | Maximum | |
Weighted average exercise price, outstanding | 1.85 |
Weighted average exercise price, exercisable | $ 1.85 |
Warrant Three [Member] | |
Number of warrants | shares | 4,684,725 |
Weighted average remaining life (years) | 2 years 1 month 6 days |
Shares exercisable | shares | 4,684,725 |
Warrant Three [Member] | Minimum | |
Weighted average exercise price, outstanding | $ 2 |
Weighted average exercise price, exercisable | 2 |
Warrant Three [Member] | Maximum | |
Weighted average exercise price, outstanding | 3 |
Weighted average exercise price, exercisable | $ 3 |
Warrants [Member] | |
Number of warrants | shares | 8,788,029 |
Weighted average remaining life (years) | 1 year 10 months 2 days |
Weighted average exercise price, outstanding | $ 0.25 |
Shares exercisable | shares | 8,788,029 |
Weighted average exercise price, exercisable | $ 0.25 |
EQUITY (Details 2)
EQUITY (Details 2) | 6 Months Ended |
Mar. 31, 2024 | |
EQUITY | |
Dividend yield | 0% |
Expected life | 3 years |
Expected volatility | 105% |
Risk free interest rate | 4.32% |
EQUITY (Details Narrative)
EQUITY (Details Narrative) - USD ($) | 1 Months Ended | 6 Months Ended | |||||||
Mar. 07, 2024 | Aug. 05, 2016 | Feb. 27, 2024 | Oct. 26, 2023 | Sep. 29, 2023 | Mar. 31, 2024 | Sep. 30, 2023 | Mar. 31, 2023 | Aug. 14, 2017 | |
Weighted average price of the common stock | $ 0.78 | ||||||||
Common stock shares value | $ 82,512 | $ 80,358 | |||||||
Intrinsic value | 3,339,451 | ||||||||
Automatic conversion of Convertible | the Company issued 102,302 shares of the Company’s common stock at $0.782 with a total value of $80,000 per share related to a debt offering. The $80,000 was recorded as debt issuance costs and is amortized over the two-year term of the debt | ||||||||
Money warrants | $ 22,984,961 | ||||||||
Shrare issued warrant to purchased | 9,020,264 | ||||||||
Warrant Shares | 3,000,000 | ||||||||
Cashless warrant exercise | 714,828 | ||||||||
Authorized shares of capital stock par value | $ 0.001 | $ 0.001 | |||||||
Preferred stock share par value | $ 0.001 | $ 0.001 | |||||||
Common stock share issued | 82,512,166 | 80,358,463 | 48,207,937 | ||||||
Preferred stock shares authorized | 5,000,000 | 5,000,000 | |||||||
Common stock shares authorized | 200,000,000 | 200,000,000 | |||||||
Warrants to Purchase Common Stock [Member] | |||||||||
warrants and received | $ 196,816 | ||||||||
Warrant issued to common stock | 453,492 | ||||||||
Warrants to purchase common stock | 290,152 | ||||||||
Warrants forfeited per share | $ 0.434 | ||||||||
Warrants expired per share | 0.454 | ||||||||
Warrant To Purchase Common Stock Member | Boustead Securities LLC Member | |||||||||
Warrant Shares | 3,000,000 | ||||||||
Common stock share issued | 6,000,000 | 123,648 | |||||||
Warrants valued | $ 1,536,743 | $ 20,896 | |||||||
Share issued price | $ 0.80 | $ 0.25 | |||||||
Authorized Capital Stock [Member] | |||||||||
Authorized shares of capital stock par value | 0.001 | ||||||||
Preferred stock share par value | $ 0.001 | ||||||||
Preferred stock shares authorized | 5,000,000 | ||||||||
Common stock shares authorized | 200,000,000 | ||||||||
Series C Convertible Preferred Stock designated | 30,000 | ||||||||
Series D Convertible Preferred Stock designated | 20,000 | ||||||||
Convertible Preferred Stock Series C [Member] | |||||||||
Common stock share issued | 82,512,166 | ||||||||
Preferred stock shares issued | 17,858 | ||||||||
Preferred stock shares outstanding | 17,858 | ||||||||
Share issued price | $ 0.25 | ||||||||
Convertible Preferred Stock D [Member] | |||||||||
Preferred stock shares issued | 10,161 | ||||||||
Preferred stock shares outstanding | 10,161 | ||||||||
Share issued price | $ 0.25 | ||||||||
Common Stock Offerings | |||||||||
Common stock share issued | 883,061 | ||||||||
Gross proceeds from sale | $ 203,105 | ||||||||
Share issued price | $ 0.25 | ||||||||
Mr. Struve [Member] | Series C PreferredStockMember | |||||||||
Ownership interest | 4.99% | ||||||||
Cumulative Dividend | 8% | ||||||||
Purchase preferred stock | $ 1,250,000 | ||||||||
Conversion price | $ 0.70 | ||||||||
Warrant to acquire common stock shares | 1,785,714 | ||||||||
Share price | $ 0.25 | ||||||||
Preferred stock shares issued | 17,858 | ||||||||
Mr. Struve [Member] | Series D Preferred Stock Member | |||||||||
Ownership interest | 4.99% | 4.99% | |||||||
Cumulative dividend cash | $ 351,000 | ||||||||
Cumulative Dividend | 8% | ||||||||
Purchase preferred stock | $ 750,000 | ||||||||
Adjusted conversion price | $ 0.25 | ||||||||
Preferred stock shares issued | 10,161 | ||||||||
Preferred stock shares outstanding | 10,161 | ||||||||
Mr. Struve [Member] | Series C and D Preferred Stock [Member] | |||||||||
Ownership interest | 4.99% | ||||||||
Cumulative Dividend | 4.99% | ||||||||
Number of common stock shares settled | 1,402,784 | ||||||||
Convertible common stock shares | 3,361,095 | ||||||||
Common stock shares value | $ 3,688,892 | ||||||||
Cumulative unpaid dividend | $ 840,000 | ||||||||
Preferred dividend value accrete common stock shares | 160,000 |
STOCK INCENTIVE PLANS (Details)
STOCK INCENTIVE PLANS (Details) - $ / shares | 3 Months Ended | 6 Months Ended |
Dec. 31, 2023 | Mar. 31, 2024 | |
Shares Granted | 3,123,648 | |
Exercised | (714,828) | |
Forfeited | (290,172) | |
Share Outstanding at ending of period | 29,022,016 | |
Weighted Average Exercise Price Granted | $ 0.78 | |
Weighted Average Exercise Price Exercised | $ (0.25) | |
Stock Option [Member] | ||
Share Outstanding at beginning of period | 14,506,158 | 14,506,158 |
Shares Granted | 16,340,548 | |
Forfeited | (1,824,600) | (1,824,600) |
Share Outstanding at ending of period | 29,022,106 | |
Weighted Average Exercise Price, Outstanding, beginning balance | $ 1.55 | $ 1.55 |
Weighted Average Exercise Price Granted | 0.29 | |
Weighted Average Exercise Price Exercised | 0 | |
Weighted Average Exercise Price Forfeitures | (1.54) | $ (1.55) |
Weighted Average Exercise Price, Outstanding, end of period | $ 0.84 |
STOCK INCENTIVE PLANS (Details
STOCK INCENTIVE PLANS (Details 1) | 6 Months Ended |
Mar. 31, 2024 $ / shares shares | |
Number of outstanding stock options | shares | 29,022,106 |
Weighted average remaining life (years) | 3 years 10 months 24 days |
Weighted average exercise price outstanding | $ 0.84 |
Number exercisable | shares | 9,204,304 |
Weighted average exercise price exerciseable | $ 0.74 |
Stock Options 1 [Member] | |
Number of outstanding stock options | shares | 2,161,875 |
Weighted average remaining life (years) | 2 years 7 months 28 days |
Weighted average exercise price outstanding | $ 0.15 |
Number exercisable | shares | 2,024,375 |
Weighted average exercise price exerciseable | $ 0.55 |
Stock Options 2 [Member] | |
Number of outstanding stock options | shares | 8,379,683 |
Weighted average remaining life (years) | 3 years 2 months 8 days |
Weighted average exercise price outstanding | $ 1.49 |
Number exercisable | shares | 2,150,691 |
Weighted average exercise price exerciseable | $ 1.47 |
Stock Option 3 [Member] | |
Number of outstanding stock options | shares | 2,140,000 |
Weighted average remaining life (years) | 2 years 9 months 10 days |
Weighted average exercise price outstanding | $ 2.19 |
Number exercisable | shares | 990,625 |
Weighted average exercise price exerciseable | $ 2.15 |
Minimum | Stock Option 2 [Member] | |
Range of exercise prices | 1.28 |
Minimum | Stock Option 3 [Member] | |
Range of exercise prices | 1.79 |
Minimum | Stock Option 1 [Member] | |
Range of exercise prices | 0.88 |
Maximum | Stock Option 2 [Member] | |
Range of exercise prices | 1.67 |
Maximum | Stock Option 3 [Member] | |
Range of exercise prices | 3.67 |
Maximum | Stock Option 1 [Member] | |
Range of exercise prices | $ 1.25 |
Stock Option [Member] | |
Number of outstanding stock options | shares | 16,340,548 |
Weighted average remaining life (years) | 4 years 6 months 10 days |
Weighted average exercise price outstanding | $ 0.29 |
Number exercisable | shares | 4,038,613 |
Weighted average exercise price exerciseable | $ 0.38 |
Stock Option [Member] | Maximum | |
Range of exercise prices | 0.51 |
Stock Option [Member] | Minimum | |
Range of exercise prices | $ 0.25 |
STOCK INCENTIVE PLANS (Detail_2
STOCK INCENTIVE PLANS (Details 2) | 6 Months Ended |
Mar. 31, 2024 | |
Dividend yield | 0% |
Expected life | 3 years |
Expected volatility | 105% |
Risk free interest rate | 4.32% |
Minimum | |
Risk free interest rate | 4.16% |
Maximum | |
Risk free interest rate | 4.23% |
STOCK INCENTIVE PLANS (Detail_3
STOCK INCENTIVE PLANS (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Dec. 31, 2023 | Mar. 31, 2024 | Mar. 31, 2023 | Jan. 01, 2022 | Oct. 15, 2021 | |
Intrinsic value | $ 6,595,047 | ||||
Stock option grants | 29,022,106 | ||||
Number of common stock authorized shares | 29,022,106 | ||||
Unearned stock option grants | 16,340,548 | ||||
Common shares current price per share | $ 0.29 | ||||
Stock option grants shares forfeitures | 290,172 | ||||
2021 Plan [Member] | |||||
Purchase of common stock | 4,179,825 | ||||
Average exercise price | $ 0.84 | ||||
Compensation expense | $ 1,315,563 | $ 1,927,187 | |||
Unrecognized costs related party | $ 6,662,517 | ||||
Expected costs period | 3 years 10 months 24 days | ||||
2021 Equity Incentive Plan [Member] | |||||
Number of common stock authorized shares | 20,000,000 | ||||
Number of common stock shares increase | 22,000,000 | ||||
Stock Option [Member] | |||||
Stock option grants | 29,022,106 | ||||
Weighted Average Exercise Price Forfeitures | $ 1.54 | $ 1.55 | |||
Number of common stock authorized shares | 16,340,548 | ||||
Stock option grants shares forfeitures | 1,824,600 | 1,824,600 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Mar. 31, 2024 | Mar. 31, 2023 | |
INCOME TAXES | ||||
Provision for income taxes | $ 0 | $ 0 | $ 0 | $ 0 |
Effective tax rate | 0% | 0% |
SIGNIFICANT AND OTHER TRANSAC_2
SIGNIFICANT AND OTHER TRANSACTIONS WITH RELATED PARTIES (Details Narrative) - $ / shares | 6 Months Ended | |
Oct. 10, 2023 | Mar. 31, 2024 | |
Ronald P Erickson [Member] | ||
Stock option issued | 4,640,844 | |
Share exercise price per shares | $ 0.25 | |
Peter J Conley [Member] | ||
Stock option issued | 3,001,000 | |
Share exercise price per shares | $ 0.25 | |
Six Director [Member] | ||
Stock option issued | 2,809,817 | |
Share exercise price per shares | $ 0.46 |
COMMITMENTS CONTINGENCIES AND_2
COMMITMENTS CONTINGENCIES AND LEGAL PROCEEDINGS (Details narrative) - USD ($) | 1 Months Ended | ||||
Mar. 02, 2024 | Apr. 13, 2017 | Nov. 22, 2022 | Oct. 11, 2021 | May 18, 2021 | |
COMMITMENTS CONTINGENCIES AND LEGAL PROCEEDINGS | |||||
Leases, net monthly payment | $ 11,492 | $ 2,908 | $ 2,250 | $ 5,000 | $ 8,697 |
Lease expiry date | Dec. 31, 2023 | ||||
Lease description | increases at 3% annually after year one. The lease commences on May 1, 2024 and terminates on July 31, 2027 | The Company expects to vacate the office on May 31, 2024 | The Company expects to vacate the office on May 31, 2024 | the lease was terminated on February 5, 2024 |