Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2021 | Dec. 27, 2021 | Mar. 31, 2021 | |
Document and Entity Information [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Sep. 30, 2021 | ||
Entity File Number | 001-34887 | ||
Entity Registrant Name | MULLEN AUTOMOTIVE INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 86-3289406 | ||
Entity Address State Or Province | CA | ||
Entity Address, Address Line One | 1405 Pioneer Street | ||
Entity Address, City or Town | Brea | ||
Entity Address, Postal Zip Code | 92821 | ||
City Area Code | 714 | ||
Local Phone Number | 613-1900 | ||
Title of 12(b) Security | Common Stock, par value $0.001 | ||
Trading Symbol | MULN | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 47.1 | ||
Entity Common Stock, Shares Outstanding | 23,383,202 | ||
Entity Central Index Key | 0001499961 | ||
Current Fiscal Year End Date | --09-30 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2021 | Sep. 30, 2020 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 42,174 | $ 33,368 |
Materials and supplies | 55,753 | 43,083 |
Deferred advertising | 261,550 | 15,054,000 |
Prepaid Expenses | 6,201,247 | |
Other current assets | 250,331 | 201,067 |
TOTAL CURRENT ASSETS | 6,811,055 | 15,331,518 |
Property, equipment and leasehold improvements, net | 1,181,477 | 1,541,996 |
Intangibles assets, net | 2,495,259 | 2,622,796 |
Right-of-use assets | 2,350,929 | 1,729,112 |
Other assets | 4,333,774 | 762,010 |
TOTAL ASSETS | 17,172,494 | 21,987,432 |
CURRENT LIABILITIES | ||
Accounts payable | 5,206,310 | 2,688,176 |
Accrued expenses and other current liabilities | 19,126,765 | 22,151,589 |
Liability to issue shares | 7,027,500 | |
Lease liabilities, current portion | 599,898 | 336,765 |
Notes payable, current portion | 39,200,970 | 33,048,471 |
TOTAL CURRENT LIABILITIES | 71,161,443 | 58,225,001 |
Notes payable, net of current portion | 247,612 | 283,881 |
Lease liabilities, net of current portion | 1,857,894 | 1,482,569 |
Other liabilities | 5,617,192 | 4,500,000 |
TOTAL LIABILITIES | 78,884,141 | 64,491,451 |
Commitments and Contingencies (Note 16) | ||
DEFICIENCY IN STOCKHOLDERS' EQUITY | ||
Preferred Stock; $0.001 par value; 58,000,000 shares authorized; 5,667,683 and 5,684,108 shares issued and outstanding at September 30, 2021 and 2020 respectively. | 5,668 | 5,684 |
Common Stock; $0.001 par value; 500,000,000 shares authorized; 7,048,386 and 5,086,225 issued and outstanding at September 30, 2021 and 2020 respectively. | 7,048 | 5,086 |
Additional Paid-in Capital | 88,650,286 | 63,619,280 |
Accumulated Deficit | (150,374,649) | (106,134,069) |
TOTAL DEFICIENCY IN STOCKHOLDERS' EQUITY | (61,711,647) | (42,504,019) |
TOTAL LIABILITIES AND DEFICIENCY IN STOCKHOLDERS' EQUITY | $ 17,172,494 | $ 21,987,432 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2021 | Sep. 30, 2020 |
CONSOLIDATED BALANCE SHEETS | ||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Authorized | 58,000,000 | 58,000,000 |
Preferred Stock, Shares Issued | 5,667,683 | 5,684,108 |
Preferred Stock, Shares Outstanding | 5,667,683 | 5,684,108 |
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 500,000,000 | 500,000,000 |
Common Stock, Shares, Issued | 7,048,386 | 5,086,225 |
Common Stock, Shares, Outstanding | 7,048,386 | 5,086,225 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
OPERATING EXPENSES | ||
General and administrative | $ 19,393,941 | $ 10,427,141 |
Research and development | 3,009,027 | 1,667,077 |
Total Operating Expense | 22,402,968 | 12,094,218 |
Loss from Operations | (22,402,968) | (12,094,218) |
Interest expense | (21,168,232) | (18,094,234) |
Other financing costs | (1,559,961) | |
Gain on extinguishment of indebtedness, net | 890,581 | |
Other income (expense), net | 10,490 | |
Net Loss | $ (44,240,580) | $ (30,177,962) |
Net Loss per Share, Basic | $ (8.56) | $ (5.23) |
Net Loss per Share, Diluted | $ (8.56) | $ (5.23) |
Weighted average shares outstanding, basic | 5,171,144 | 5,765,148 |
Weighted average shares outstanding, diluted | 5,171,144 | 5,765,148 |
STATEMENT OF DEFICIENCY IN STOC
STATEMENT OF DEFICIENCY IN STOCKHOLDERS' EQUITY - USD ($) | Preferred StockSeries A Preferred Stock | Preferred StockSeries B Preferred Stock | Common Stock | Paid-in Capital | Accumulated Deficit | Total |
Balance, beginning at Sep. 30, 2019 | $ 116 | $ 6,444 | $ 42,073,841 | $ (75,956,107) | $ (33,875,706) | |
Balance, beginning (in shares) at Sep. 30, 2019 | 116,789 | 6,444,072 | ||||
Shares issued for cash | $ 31 | 1,628,335 | 1,628,366 | |||
Shares issued for cash (in shares) | 30,897 | |||||
Warrant issuances | 2,092,600 | 2,092,600 | ||||
Shares issued for conversion of debt | $ 3,493 | $ 523 | 12,797,024 | 12,801,040 | ||
Shares issued for conversion of debt (in shares) | 3,492,707 | 523,129 | ||||
Stock-based compensation | $ 163 | 3,966,121 | 3,966,284 | |||
Stock-based compensation, Shares | 162,739 | |||||
Issuance of preferred stock for conversion of common stock | $ 2,075 | $ (2,075) | ||||
Issuance of preferred stock for conversion of common stock (in shares) | 2,074,612 | (2,074,612) | ||||
Beneficial conversion feature of convertible debt | 1,061,359 | 1,061,359 | ||||
Net loss | (30,177,962) | (30,177,962) | ||||
Balance, ending at Sep. 30, 2020 | $ 116 | $ 5,568 | $ 5,086 | 63,619,280 | (106,134,069) | (42,504,019) |
Balance, ending (in shares) at Sep. 30, 2020 | 116,789 | 5,567,319 | 5,086,225 | |||
Shares issued for cash | $ 126 | 4,799,948 | 4,800,074 | |||
Shares issued for cash (in shares) | 126,119 | |||||
Shares issued for legal settlement | $ 39 | 1,259,961 | 1,260,000 | |||
Shares issued for legal settlement (in shares) | 39,235 | |||||
Warrant issuances | 14,007,258 | 14,007,258 | ||||
Shares issued for conversion of debt | $ (16) | $ 1,643 | (1,627) | |||
Shares issued for conversion of debt (in shares) | (16,426) | 1,642,563 | ||||
Stock-based compensation | $ 154 | 4,965,466 | 4,965,620 | |||
Stock-based compensation, Shares | 154,245 | |||||
Net loss | (44,240,580) | (44,240,580) | ||||
Balance, ending at Sep. 30, 2021 | $ 100 | $ 5,568 | $ 7,048 | $ 88,650,286 | $ (150,374,649) | $ (61,711,647) |
Balance, ending (in shares) at Sep. 30, 2021 | 100,363 | 5,567,319 | 7,048,387 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Cash Flows from Operating Activities | ||
Net loss | $ (44,240,580) | $ (30,177,962) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 720,805 | 725,796 |
Impairment charge - materials | 74,495 | 93,244 |
Employee stock compensation | 2,505,091 | 1,037,105 |
Issuance of shares for services | 2,460,530 | 2,929,179 |
Issuance of stock for legal settlement | 1,260,000 | |
Non-cash interest and other operating activities | 12,956,583 | 2,019,642 |
Non-cash lease expense | 507,189 | 270,854 |
Amortization of debt discount | 8,211,648 | 16,008,454 |
Gain on extinguishment of debt | (890,581) | |
Changes in operating assets and liabilities: | ||
Material and supplies | (87,165) | (11,545) |
Other current assets | (49,265) | (9,701) |
Other assets | (3,571,768) | 215,336 |
Accounts payable | 5,666,261 | 741,215 |
Accrued expenses and other liabilities | (2,554,813) | (4,378,816) |
Lease liabilities | (490,545) | (244,257) |
Net cash used in operating activities | (17,522,115) | (10,781,456) |
Cash Flows from Investing Activities | ||
Purchase of equipment | (43,893) | (270,501) |
Purchase of intangible assets | (117,890) | (296,511) |
Net cash used in investing activities | (161,783) | (567,012) |
Cash Flows from Financing Activities | ||
Proceeds from shares issued for cash | 4,800,074 | 1,628,366 |
Proceeds from issuance of notes payable | 12,768,500 | 12,118,309 |
Proceeds from liability to issue preferred C shares | 705,000 | |
Payment of notes payable | (580,870) | (4,586,663) |
Net cash provided by financing activities | 17,692,704 | 9,160,012 |
Increase (decrease) in cash | 8,806 | (2,188,456) |
Cash, beginning of year | 33,368 | 2,221,824 |
Cash, ending of year | 42,174 | 33,368 |
Supplemental disclosure of Cash Flow information: | ||
Cash paid for interest | 15,136 | 800,423 |
Supplemental disclosure for non-cash activities: | ||
Refinance of existing debt | 43,923,042 | |
Issuance of shares to settle debt | 12,801,040 | |
Liability to issue shares in exchange for prepaid expenses | 6,322,500 | |
Initial recognition of right-of-use assets and lease liabilities | 1,383,447 | |
Right-of-use assets obtained in exchange of operating lease liabilities | 1,129,003 | 680,144 |
Indebtedness settled via issuance of stock | $ 1,300,000 | $ 38,912,640 |
DESCRIPTION OF BUSINESS AND BAS
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION | 12 Months Ended |
Sep. 30, 2021 | |
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION | |
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION | NOTE 1 –DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION Description of Business Mullen Automotive, Inc. (“MAI”, “Mullen”, “we” or the “Company”) is a development-stage electronic vehicle (EV) manufacturer. The Company operated as the EV division of Mullen Technologies, Inc. (“MTI”) until November 5, 2021, at which time the Company underwent a capitalization and corporate reorganization by way of a spin-off by MTI to its shareholders, followed by a reverse merger with and into Net Element, Inc. (“NETE”). Basis of Presentation and Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Mullen Investment Properties, LLC. Intercompany accounts and transactions have been eliminated, if any. As of September 30, 2021, Mullen Investment Properties, LLC is only a shell entity. The financial statements reflect the financial position and results of operations of Mullen, which have been prepared in accordance with Generally Accepted Accounting Principles in the United States (“U.S. GAAP”). As MTI has not historically prepared financial statements for Mullen, and Mullen did not exist as a legal entity prior to November 5, 2021, these financial statements have been prepared from the financial records of MTI on a carve-out basis. The consolidated balance sheets include all of the MAI Assets. The consolidated Statements of operations for each of the years ended September 30, 2021 and 2020, reflect all expenses and activities directly attributable to MAI, and an allocation of MTI’s general and administrative expenses incurred in each of those years, as these expenditures were shared by MAI. In some instances, certain expenses were not allocated as they would have related directly to MAI. All inter-entity balances and transactions have been eliminated. The equity capital presented in the financial statements reflect the retrospective application of the November 5, 2021 capitalization and corporate reorganization arising from the merger transaction with NETE. These financial statements have been prepared based upon the historical cost amounts recorded by MTI. These financial statements may not be indicative of MAI financial performance and do not necessarily reflect what its financial position, results of operations, and cash flows would have been had Mullen operated as an independent entity during the years presented. |
LIQUIDITY, CAPITAL RESOURCES, A
LIQUIDITY, CAPITAL RESOURCES, AND GOING CONCERN | 12 Months Ended |
Sep. 30, 2021 | |
LIQUIDITY, CAPITAL RESOURCES, AND GOING CONCERN | |
LIQUIDITY, CAPITAL RESOURCES, AND GOING CONCERN | NOTE 2 – LIQUIDITY, CAPITAL RESOURCES, AND GOING CONCERN The accompanying financial statements have been prepared on the basis that the Company will continue as a going concern. Our principal sources of liquidity at September 30, 2021, consists of existing cash of approximately $42,000 The Coronavirus (“COVID-19”) continues to impact countries, communities, supply chains and markets, global financial markets, and various industries. To date, COVID-19 has had a material and disruptive impact on our strategy in EV product development and the ability to obtain external financing to fund its development activities. Company management is unable to predict whether the global pandemic will continue to have a material impact on our future financial condition and results of operations. Going Concern As an early-stage development company, our ability to access capital is critical. Our management plans to raise additional capital through a combination of equity and debt financings, strategic alliances and licensing arrangements. Company management has evaluated whether there are any conditions and events, considered in aggregate, which raise substantial doubt about its ability to continue as a going concern over the next twelve months from the date of filing this report. Since inception, we have incurred significant accumulated losses of approximately $150.1 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Sep. 30, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Significant accounting policies are defined as those that are reflective of significant judgments and uncertainties, and potentially result in materially different results under different assumptions and conditions. Push-Down Accounting The carve-out financial statements reflect costs and expenses incurred by MTI on behalf of MAI, including interest costs. As a result, share-based compensation and other equity transactions (such as issuances of warrants and stock conversion rights embedded in issuances of indebtedness) are reflected in these carve-out financial statements. Accordingly, the classification of debt and equity issuances by MTI have been pushed down and reflected with similar classification in these carve-out financial statements. In addition, certain right-of-use assets and related lease liabilities of MTI have been pushed down to MAI. Reverse Merger and Recapitalization The November 2021 Business Combination with Net Element was accounted for as a reverse merger and recapitalization, with Net Element treated as the “acquired” company for accounting purposes. The Business Combination was accounted as the equivalent of Mullen Automotive, Inc. issuing stock for the net assets of Net Element, accompanied by a recapitalization. Accordingly, these financial statements reflect the share capital and weighted average shares outstanding via a retrospective recapitalization as shares representing the exchange ratio established in the Business Combination. Use of Estimates The preparation of carve-out financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the dates of the carve-out financial statements and the reported amounts of total expenses in the reporting periods. Estimates are used for, but not limited to, fair value of long-lived assets, fair value of financial instruments, depreciable lives of property and equipment, income taxes, contingencies, and inputs used to value stock-based compensation, valuation of common and preferred stock issued by MTI. Additionally, the rates of interest on several debt agreements have been imputed where there was no stated interest rate within the original agreement. The imputed interest results in adjustments to the debt amounts reported in our condensed carve-out financial statements prepared under U.S. GAAP. Loan valuations issues can arise when trying to determine the debt attributes, such as discount rate, credit loss factors, liquidity discounts, and pricing. Management bases its estimates on historical experience and on various other assumptions believed to be reasonable, the results of which form the basis for adjustments about the carrying values of assets and liabilities and the recording of costs and expenses that are not readily apparent from other sources. The actual results may differ materially from these estimates. Risks and Uncertainties We operate within an industry that is subject to rapid technological change, intense competition, and serves an industry that has significant government regulations. It is subject to significant risks and uncertainties, including competitive, financial, developmental, operational, technological, required knowledge of industry governmental regulations, and other risks associated with an emerging business. Any one or combination of these or other risks could have a substantial influence on our future operations and prospects for commercial success. Cash and Cash Equivalents Company management considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. We did not have any cash equivalents at September 30, 2021 or September 30, 2020. Deferred Advertising At September 30, 2021, deferred advertising consists of upfront costs paid related to auto shows occur during November 2021 and January 2022. At September 30, 2020, deferred advertising represented a marketing campaign, financed by a third party that was carried as a deferred charge on the consolidated balance sheet until the launch of the marketing campaign. These deferred advertising charges of $15 million were associated with the AirSign advertising contract and the RedRock Outdoor Advertising Display advertising contract. The marketing campaigns were not launched, and we received a release of liability from both AirSign, Inc. and RedRock Outdoor Advertising, Inc. Both liabilities, along with the associated deferred advertising were derecognized in January 2021. Prepaid Expenses and Other Current Assets Prepaid expenses consist of various advance payments made for goods or services to be received in the future. These prepaid expenses include insurance and other contracted services requiring up-front payments. Property, Equipment and Leasehold Improvements, Net Property, equipment and leasehold improvements are stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated economic useful lives of the assets. Repairs and maintenance expenditures that do not extend the useful lives of related assets are expensed as incurred. Estimated Useful Lives Description Life Buildings 30 Years Furniture and Equipment 5 Years Computer and Software 1 - 3 years Machinery and Equipment 5 Years Leasehold Improvements Shorter of the estimated useful life or the underlying lease term Vehicles 5 Years Expenditures for major improvements are capitalized, while minor replacements, maintenance and repairs, which do not extend the asset lives, are charged to operations as incurred. Upon sale or disposition, the cost and related accumulated depreciation are removed from the accounts and any gain or loss is included in operations. Company management continually monitors events and changes in circumstances that could indicate that the carrying balances of its property, equipment and leasehold improvements may not be recoverable in accordance with the provisions of ASC 360, “Property, Plant, and Equipment.” Income Taxes Prior to Mullen’s capitalization and corporate reorganization, our operations were included in the tax filings of MTI. The cash and deferred tax positions between us and MTI and are formalized in a tax sharing agreement. Income taxes are recorded in accordance with ASC 740, Income Taxes (“ASC 740”), which provides for deferred taxes using an asset and liability approach. We recognize deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns. Deferred tax assets and liabilities are determined based on the difference between the consolidated financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are provided, if based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. There are transactions that occur during the ordinary course of business for which the ultimate tax determination may be uncertain. At September 30, 2021 and 2020, there were no material changes to either the nature or the amounts of the uncertain tax positions. The Company’s income tax provision consists of an estimate for U.S. federal and state income taxes based on enacted rates, as adjusted for allowable credits, deductions, uncertain tax positions, changes in deferred tax assets and liabilities, and changes in the tax law. We maintain a full valuation allowance against the value of our U.S. and state net deferred tax assets because management does not believe the recoverability of the tax assets meets the “more likely than not” likelihood at September 30, 2021 and 2020. Intangible Assets Intangible assets consist of acquired and developed intellectual property and website development costs. In accordance with ASC 350, “Intangibles—Goodwill and Others,” Other Assets Other assets are comprised primarily of Coda electric vehicles, related parts and security deposits related to the Company’s property leases related to the EV business only. Extinguishment of Liabilities The Company derecognizes financial liabilities when the Company’s obligations are discharged, cancelled, or expired. Leases In February 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-02, “Leases” (ASU 2016-02). The core principle of ASU 2016-02 is that lessees should recognize on its balance sheet, assets and liabilities arising from a lease. In accordance with that principle, ASU 2016-02 requires that a lessee recognize a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying leased asset for the lease term. Lessees shall classify all leases as finance or operating leases. The Company adopted ASU 2016-02, on October 1, 2019, which resulted in the recognition of the right-of-use assets and related obligations on its carve-out financial statements. Accrued Expenses Accrued expenses are expenses that have been incurred but not yet paid and are classified within current liabilities on the consolidated balance sheets. General and Administrative Expenses General and administrative (“G&A”) expenses include all non-production related expenses incurred by us in any given period. This includes expenses such as professional fees, salaries, rent, repairs and maintenance, utilities and office expense, employee benefits, depreciation and amortization, advertising and marketing, settlements and penalties, taxes, and licenses. Advertising costs are expensed as incurred and are included in G&A expenses. Other than trade show expenses which are deferred until occurrence of the future event, we expense advertising costs as incurred in accordance with ASC 720-35, “Other Expenses – Advertising Cost.” Research and Development Costs Research and development costs are expensed as incurred and includes impairment charges in the amounts of $74,495 and $93,244 for the years ended September 30, 2021 and 2020, respectively. Research and development expenses primarily consist of costs associated with the development of our Mullen Five show car. Share-Based Compensation We account for share-based awards issued by MTI in accordance with ASC Subtopic 718-10, “Compensation – Share Compensation”, Other Financing Costs Pursuant to the terms of the First Amendment to the Company’s Agreement and Plan of Merger with Net Element, we incurred a daily $13,333 penalty for delays in the consummation of the merger transaction. We recorded a charge of approximately $1,560,000 associated with these delays, which is included in the consolidated statement of operations for the fiscal year ended September 30, 2021 and included in accounts payable in the consolidated balance sheet at September 30, 2021. Related Party Transactions We have related party transactions with certain of our directors, officers, and principal shareholders. These transactions, which are primarily long-term in nature, include operational loans, convertible debt, and warrants for financial support associated with the borrowing of funds and are entered into in the ordinary course of business. Fair Value of Financial Instruments We apply fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value on a recurring basis. Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities that are required to be recorded at fair value, Company management considers the principal or most advantageous market in which we would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as risks inherent in valuation techniques, transfer restrictions and credit risk. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: Level 1 – Quoted prices in active markets for identical assets or liabilities. Level 2 – Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 – Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability. Concentrations of Business and Credit Risk We maintains cash balances in several financial institutions that are insured by either the Federal Deposit Insurance Corporation or the National Credit Union Association up to certain federal limitations, generally $250,000. At times, our cash balance may exceed these federal limitations and maintains significant cash on hand at certain of its locations. However, we have not experienced any losses in such accounts and management believes we are not exposed to any significant credit risk on these accounts. There were no amounts in excess of insured limitations at September 30, 2021 and 2020. Recently Issued and Adopted Accounting Standards In January 2017, the FASB issued Accounting Standards Update No. 2017-04 (ASU 2017-04) (Topic 350), “Intangibles - Goodwill and Others.” ASU 2017-04 simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. ASU 2017-04 is effective for annual periods beginning after December 15, 2019 including interim periods within those periods. We adopted ASU 2017-04, on October 1, 2020, which did not have a material impact on our consolidated balance sheets. In September 2018, the FASB issued Accounting Standards Update No. 2018-07 (ASU 2018-07) ASU No. 2018-07 (Topic 718), “Compensation—Stock Compensation: Improvements to Nonemployee Share-Based Payment Accounting.” ASU 2018-07 expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. The amendments also clarify that Topic 718 does not apply to share-based payments used to effectively provide (1) financing to the issuer or (2) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under Topic 606. We adopted ASU 2018-07, on October 1, 2020, which did not have a material impact on our consolidated statements of operations. In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. This ASU amends the guidance on convertible instruments and the derivatives scope exception for contracts in an entity’s own equity, and also improves and amends the related earnings per share guidance for both Subtopics. The ASU will be effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years and early adoption is permitted. Company management is evaluating the future impact this guidance on our consolidated financial statements. In May 2021, the FASB issued ASU No. 2021-04, Earnings Per Share (Topic 260), Debt – Modifications and Extinguishments (Subtopic 470-50), Compensation – Stock Compensation (Topic 718) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40). The ASU will be effective for fiscal years beginning after December 15, 2021, (December 15, 2023 for smaller reporting companies). We have issued debt and equity instruments, the accounting for which could be impacted by this update. Company management is evaluating the impact this guidance on our financial condition and results of operations. In July 2021, the FASB issued ASU No. 2021-05, Lessors – Certain Leases with Variable Lease Payments (Topic 842). The amendments in this update affect lessors with lease contracts that have (1) have variable lease payments that do not depend on a reference index or a rate, and (2) would have resulted in the recognition of a selling loss at lease commencement if classified a sales-type or direct financing. The ASU will be effective for fiscal years beginning after December 15, 2021. Company management is evaluating the impact this guidance will have on our consolidated financial statements. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 12 Months Ended |
Sep. 30, 2021 | |
INTANGIBLE ASSETS | |
INTANGIBLE ASSETS | NOTE 4 – INTANGIBLE ASSETS For the years ended September 30, 2021 and 2020, we incurred website development and trademark costs of $117,890 and $296,511, respectively. These costs historically have been capitalized, as the website is in the development stage, resulting in improved functionality. Amortization of the website commenced when the website was placed in service for its intended use during the fourth quarter of 2021. Legal fees incurred for registration of trademarks account for all of the costs of trademark at September 30, 2021. Amortization of these costs will commence when the trademark application and registration process has been completed. The weighted average useful life of the intellectual property is 3.0 years. Identifiable intangible assets with definite lives are amortized over the period of estimated benefit using the straight-line method and the estimated useful lives of three years. The straight-line method of amortization represents management’s best estimate of the distribution of the economic value of the identifiable intangible assets. September 30, 2021 September 30, 2020 Gross Net Gross Net Carrying Accumulated Carrying Carrying Accumulated Carrying Finite-Lived Intangible Assets Amount Amortization Amount Amount Amortization Amount Website design and development $ 2,660,391 $ (221,699) $ 2,438,692 $ 2,597,091 $ — $ 2,597,091 Intellectual property 71,182 (69,205) 1,977 71,182 (45,477) 25,705 Trademark 54,590 — 54,590 — — — Total Finite-Lived Intangible Assets $ 2,786,163 $ (290,904) $ 2,495,259 $ 2,668,273 $ (45,477) $ 2,622,796 Total future amortization expense for finite-lived intellectual property is as follows: Years Ended September 30, 2021 Future Amortization 2022 $ 888,774 2023 886,797 2024 719,688 Total Future Amortization Expense $ 2,495,259 For the years ended September 30, 2021 and 2020, amortization expense for the intangible assets was $245,427 and $23,728 respectively. |
DEBT
DEBT | 12 Months Ended |
Sep. 30, 2021 | |
DEBT | |
DEBT | NOTE 5 – DEBT Short-term debt comprises a significant component of the Company’s funding needs. Short-term debt is generally defined as debt with principal maturities of one-year or less. Long-term debt is defined as principal maturities of one year or more. Short and Long-Term Debt The following is a summary of our indebtedness at September 30, 2021: Net Carrying Value Unpaid Principal Contractual Contractual Type of Debt Balance Current Long-Term Interest Rate Maturity Matured Notes $ 5,838,591 $ 5,838,591 $ — 0.00% - 15.00 % 2016 - 2021 Promissory Notes 23,831,912 23,831,912 — 28.00 % 2021 – 2022 Demand Note 500,000 500,000 — 27.00 % 2020 Convertible Unsecured Notes 15,932,500 15,932,500 — 15.00%-20.00 % 2021 - 2022 Real Estate Note 283,881 36,269 247,612 5.00 % 2023 Loan Advances 1,122,253 1,122,253 — 0.00% - 10.00 % 2019 – 2020 Less: Debt Discount (8,060,555) (8,060,555) — NA NA Total Debt $ 39,448,582 $ 39,200,970 $ 247,612 NA NA Scheduled Debt Maturities The following scheduled debt maturities at September 30, 2021: Years Ended September 30, 2021 2022 2023 Total Total Debt $ 39,200,970 $ — $ 247,612 $ 39,448,582 The following is a summary of our indebtedness at September 30, 2020: Net Carrying Value Unpaid Principal Contractual Contractual Type of Debt Balance Current Long-Term Interest Rate Maturity Matured Notes $ 4,828,450 $ 4,828,450 $ — 0.00% - 15.00 % 2016 - 2019 Promissory Notes 25,288,063 25,288,063 — 0.00% - 28.00 % 2021 – 2022 Demand Note 500,000 500,000 — 27.00 % 2020 Convertible Unsecured Notes 1,867,500 1,867,500 — 20.00 % 2021 Real Estate Note 318,384 34,503 283,881 5.00 % 2023 Loan Advances 1,931,017 1,931,017 — 0.00% - 10.00 % 2019 – 2020 Less: Unamortized Debt Discount (1,401,062) (1,401,062) — NA NA Total Debt $ 33,332,352 $ 33,048,471 $ 283,881 NA NA Notes and Advances We enter into promissory notes with third parties and company officers to support our operations. Promissory notes typically are for less than three years maturity and carry interest rates from 0% to 28.0%. For many of the notes listed above, the scheduled maturity date has passed, and we currently are in default of the matured loan. Company management is working with the creditors to remediate the $5,960,574 in promissory notes and loan advances that are in default. Promissory notes and loan advances that are in default still accrue interest after their scheduled maturity date. There are no financial covenants associated with the promissory notes and loan advances, and there are no compliance waivers that have been received from creditors. We record imputed interest on promissory notes and advances which are deemed to be below the market interest rate. For the years ended September 30, 2021 and 2020, we recorded interest expense of $21,168,232 and $18,094,234, respectively. In some instances, MTI issues shares of common stock or warrants along with the issuance of promissory notes, resulting in the recognition of a debt discount which is amortized to interest expense over the term of the promissory note. Debt discount amortization for the fiscal year ended September 30, 2021, and 2020, was $8,211,648 and $16,008,454, respectively. During 2021, MTI issued shares of stock to certain creditors in satisfaction of debt payments or in settlement of indebtedness. These agreements essentially exchanged a predetermined amount of stock to settle debt. For the fiscal year ended September 30, 2021 and 2020, the carrying amount of indebtedness that was settled via issuance of MTI shares was $1,300,000 and $38,912,640, respectively. Convertible Debt Issuances and Warrants TDR Relationship On May 16, 2021, we received debt financing through MTI entering into an unsecured $4.4 million convertible note agreement with TDR Capital. The convertible note is issued with OID of 10% ($0.4 million); carries an interest rate of 15% and has a maturity date of one year. The convertible note is unsecured and includes detached warrants to acquire up to 17,446,000 shares of MTI common stock (1,358,112 MAI warrants). The MTI warrant exercise price is $0.6877 (MAI exercise price is $8.84) per common share and expires five years from the date of issuance. The value ascribed to the warrants was $24,358,875, resulting in an additional debt discount of $3,726,816 and a beneficial conversion discount of $673,184. These discounts are being amortized over the 12-month term of the debt. The number of shares issuable upon conversion are determined according to the formula: Conversion Amount/Conversion Price, subject to certain adjustments. However, , ownership in our TDR Capital (together with their affiliates) upon conversion is limited to a 9.9% ownership cap in shares of MTI’s common stock then outstanding after giving effect to the issuance of common stock issuable upon exercise of the warrants. Convertible Debt Issuances and Warrants, continued On July 26, 2021, we received debt financing through MTI entering into an unsecured $1.1 million convertible note agreement with TDR Capital. The convertible note is issued with OID of 10% or $0.1 million; carries an interest rate of 15% and has a maturity date of one year. The convertible note is unsecured and includes detached warrants to acquire up to 4,361,500 shares of MTI common stock (339,528 MAI warrants). The MTI warrant exercise price is $0.6877 (MAI exercise price is $8.84 ) On September 3, 2021, we received debt financing through MTI entering into an unsecured $6.6 million convertible note agreement with TDR Capital. The initial sale and purchase is $550,000 principal and detached warrants to acquire up to 2,180,750 shares of MTI stock (169,764 MAI warrants). The second sale and purchase is $6,050,000 principal and detached warrants to acquire up to 23,988,500 shares of MTI stock (1,867,423 MAI warrants). The combined convertible notes are issued with OID of 10% ($0.66 million); carries an interest rate of 15% and has a maturity date of one year. The MTI warrant exercise price is $0.6877 (MAI exercise price is $8.84 ) Digital Power Lending, LLC On July 22, 2021, the Company received debt financing through MTI entering into an unsecured $2.42 million convertible note agreement with Digital Power Lending, LLC. The convertible note is issued with OID of 10% or $0.242 million; carries an interest rate of 15% and has a maturity date of one year. The convertible note is unsecured and includes detached warrants to acquire up to 9,595,300 shares of MTI common stock (746,961 MAI warrants). The MTI warrant exercise price is $0.6877 (MAI exercise price is $8.84 ) formula: Conversion Amount/Conversion Price, subject to certain adjustments. However, upon conversion, Digital Power Lending, LLC (together with their affiliates) is limited to a 9.9% ownership cap in shares of MTI’s common stock then outstanding after giving effect to the issuance of common stock issuable upon exercise of the warrants. On August 19, 2021, the Company received debt financing through MTI entering into an unsecured $1.1 million convertible note agreement with Digital Power Lending, LLC. The convertible note is issued with OID of 10% or $0.1 million; carries an interest rate of 15% and has a maturity date of one year. The convertible note is unsecured and includes detached warrants to acquire up to 4,361,500 shares of MTI common stock (339,528 MAI warrants). The MTI warrant exercise price is $0.6877 (MAI exercise price is $8.84 ) Convertible Debt to Equity Conversion (Exchange Agreements) On May 7, 2021, and amended on May 20, 2021, MTI executed an exchange agreement with its existing convertible debt investors who hold $10,762,500 in MTI convertible debt. Upon consummation of the then proposed merger with Net Element, we and the investors agreed to exchange the convertible debt for shares of MAI’s Series C Preferred Stock, par value $0.001 per share. The right to additional purchases of preferred stock expires 12 months from the merger close date between Net Element and MAI. MTI originally issued 42,759,290 ( 3,717,898 MAI warrants) in detached warrants to purchase shares of MTI common stock as part of the convertible debt agreements with investors. Refer to Note 18, Subsequent Events for Amendment No. 6 and Joinder to the Exchange Agreement. On July 22, 2021, the Exchange Agreement was amended to include the $2,420,000 debt financing and associated warrants with Digital Power Lending, LLC. The agreement represents Amendment No. 2 and Joinder to the Exchange Agreement that was signed on May 7, 2021 and amended on May 20, 2021. Upon consummation of the then proposed merger with Net Element, we and the investors agreed to exchange the convertible debt for shares of MAI’s Series C Preferred Stock, par value $0.001 per share. On July 26, 2021, the Exchange Agreement was amended to include the $1,100,000 debt financing and associated warrants with TDR Capital. The agreement represents Amendment No. 3 and Joinder to the Exchange Agreement that was signed on May 7, 2021 and amended on May 20, 2021. Upon consummation of the then proposed merger with Net Element, we and the investors agreed to exchange the convertible debt for shares of MAI’s Series C Preferred Stock, par value $0.001 per share. On August 19, 2021, the Exchange Agreement was amended to include the $1,100,000 debt financing and associated warrants with Digital Power Lending, LLC. The agreement represents Amendment No. 4 and Joinder to the Exchange Agreement that was signed on May 7, 2021 and amended on May 20, 2021. Upon consummation of the then proposed merger with Net Element, we and the investors agreed to exchange the convertible debt for shares of MAI’s Series C Preferred Stock, par value $0.001 per share. Convertible Debt to Equity Conversion (Exchange Agreements), continued On September 3, 2021, the Exchange Agreement was amended to include the $6,600,000 debt financing and associated warrants with TDR Capital. The agreement represents Amendment No. 5 and Joinder to the Exchange Agreement that was signed on May 7, 2021 and amended on May 20, 2021. Upon consummation of the then proposed merger with Net Element, we and the investors agreed to exchange the convertible debt for shares of MAI’s Series C Preferred Stock, par value $0.001 per share. Drawbridge Relationship During July 2020, Drawbridge-DBI and MTI entered into a settlement agreement (the “Agreement”) to restructure the aggregate obligations owed to Drawbridge-DBI and the other DBI-affiliated entities. In connection with the Agreement, (a) the Sale-Leaseback obligation in the amount of $49,500,000 was replaced by a new note with a face value of $23,831,554, (b) the other indebtedness and advances from DBI-affiliated entities with a net book value of $9,935,086 were extinguished, and (c) MTI issued 71,516,534 MAI – 5,567,319) Series B Preferred Shares to Drawbridge-DBI. The amounts owed to Drawbridge-DBI is $33,296,648 and $25,092,994 as of September 30, 2021, and September 30, 2020 respectively, and are in default (See Note 18 – Subsequent Events). The amounts owed to other DBI-affiliated entities is $982,500 and $1,082,500, as of September 30, 2021, and September 30, 2020, respectively. The 2020 Drawbridge loan is currently recognized within the current portion of debt on the consolidated balance sheet. SBA Loans On April 14, 2020, MTI entered a promissory note (the “Note”) evidencing an unsecured loan (the “Loan”) in the amount of $885,426 made under the Paycheck Protection Program (the “PPP”). The Note matures on April 14, 2022 and bears interest at a rate of 1% per annum. Pursuant to the terms of the Coronavirus, Aid, Relief and Economic Security Act (“CARES Act”) and the PPP, the Company applied to the Lender for forgiveness for the amount due on the Loan. The amount eligible for forgiveness is based on the amount of Loan proceeds used (during the eight-week period after the Lender makes the first disbursement of Loan proceeds) for the payment of certain covered costs, including payroll costs (including benefits), interest on mortgage obligations, rent and utilities, subject to certain limitations and reductions in accordance with the CARES Act and the PPP. During November 2020, the SBA approved the loan forgiveness amount of $875,426 in principal and $5,155 in interest on November 20, 2020. The loan forgiveness is accounted for as a gain on debt extinguishment of $890,581 in the Consolidated Statement of Operations. In September 2020, MTI entered a promissory note (the "Note") in the amount of $10,000 by the SBA under the EIDL program. Monthly installment payments on the Note will begin twelve months from the date of the Note, with the balance of any accrued principal and interest at 3.75% annually, payable thirty years from the date of the Note. An application was submitted to the Lender for loan forgiveness, which was approved for the full amount on February 18, 2021. Convertible Notes As of September 30, 2021, MTI issued unsecured convertible notes totaling $10,762,500, of which $6,418,500 were issued between January 2021 and September 2021. The new issuances bear interest at 15% and mature in one year and included with warrants to acquire shares of common stock based on a specified formula. Interest is accrued in arrears until the last business day of each calendar year quarter. The default rate on the note increases to 20% when quarterly interest payments are not timely made by MTI. Convertible Notes Convertible Interest Default Maturity Warrants Exercise Exercise Date of Issuance Note ($) Rate Interest Rate Date (#) Date Price ($) 8/26/2020 $ 1,000,000 15 % 20 % 8/26/2021 226,397 8/26/2025 $ 8.84 8/26/2020 200,000 15 % 20 % 8/26/2021 45,279 8/26/2025 $ 8.84 8/26/2020 200,000 15 % 20 % 8/26/2021 45,279 8/26/2025 $ 8.84 8/26/2020 100,000 15 % 20 % 8/26/2021 22,640 8/26/2025 $ 8.84 9/25/2020 105,000 15 % 20 % 9/25/2021 29,715 9/25/2025 $ 8.84 9/25/2020 157,500 15 % 20 % 9/25/2021 44,572 9/25/2025 $ 8.84 9/25/2020 105,000 15 % 20 % 9/25/2021 29,715 9/25/2025 $ 8.84 10/12/2020 660,000 15 % 20 % 10/12/2021 203,757 10/12/2025 $ 8.84 10/12/2020 33,000 15 % 20 % 10/12/2021 10,188 10/12/2025 $ 8.84 10/12/2020 27,500 15 % 20 % 10/12/2021 8,490 10/12/2025 $ 8.84 11/9/2020 660,000 15 % 20 % 11/9/2021 203,757 11/9/2025 $ 8.84 11/9/2020 33,000 15 % 20 % 11/9/2021 10,188 11/9/2025 $ 8.84 11/9/2020 27,500 15 % 20 % 11/9/2021 8,490 11/9/2025 $ 8.84 12/7/2020 660,000 15 % 20 % 12/7/2021 203,756 12/7/2025 $ 8.84 12/7/2020 33,000 15 % 20 % 12/7/2021 10,188 12/7/2025 $ 8.84 12/7/2020 27,500 15 % 20 % 12/7/2021 8,490 12/7/2025 $ 8.84 12/15/2020 157,500 15 % 20 % 12/15/2021 44,572 12/15/2025 $ 8.84 12/15/2020 157,500 15 % 20 % 12/15/2021 44,572 12/15/2025 $ 8.84 1/7/2021 660,000 15 % — 1/7/2022 203,757 1/7/2026 $ 8.84 1/7/2021 33,000 15 % — 1/7/2022 10,188 1/7/2026 $ 8.84 1/7/2021 27,500 15 % — 1/7/2022 8,490 1/7/2026 $ 8.84 1/7/2021 — — — — 2,038* 1/7/2026 $ 8.84 1/7/2021 192,500 15 % — 1/7/2022 59,429 1/7/2026 $ 8.84 1/7/2021 82,500 15 % — 1/7/2022 25,470 1/7/2026 $ 8.84 1/7/2021 192,500 15 % — 1/7/2022 59,429 1/7/2026 $ 8.84 1/7/2021 110,000 15 % — 1/7/2022 33,960 1/7/2026 $ 8.84 3/10/2021 660,000 15 % — 3/10/2022 203,757 3/10/2026 $ 8.84 3/10/2021 33,000 15 % — 3/10/2022 10,188 3/10/2026 $ 8.84 3/10/2021 27,500 15 % — 3/10/2022 8,490 3/10/2026 $ 8.84 5/7/2021 — — — — 82,326** 5/7/2026 $ 8.84 5/7/2021 — — — — 33,316** 5/7/2026 $ 8.84 5/7/2021 — — — — 10,504** 5/7/2026 $ 8.84 5/7/2021 — — — — 19,167** 5/7/2026 $ 8.84 5/16/2021 4,400,000 15 % 20 % 5/16/2022 1,358,112 5/16/2026 $ 8.84 7/22/2021 2,420,000 15 % 20 % 7/22/22 746,961 7/22/2026 $ 8.84 7/26/2021 1,100,000 15 % 20 % 7/26/22 339,528 7/26/2026 $ 8.84 8/19/2021 1,100,000 15 % 20 % 8/19/22 339,528 8/19/2026 $ 8.84 9/3/2021 550,000 15 % 20 % 9/3/22 169,764 9/3/2026 $ 8.84 Total $ 15,932,500 — — — 4,924,447 — — * As part of placement agent, Cambria received five-year warrants to purchase 6% of the MTI common shares issuable under convertible notes sold in the Regulation D offering to investors introduced by the firm. ** On May 7, 2021, additional warrants of 1,866,665 were added to the Exchange Agreement for no additional consideration to acquire additional common shares of common stock to four convertible debt holders given changes in the exchange share calculation, which will be consistent with the exchange share calculation of other convertible debt holders. The Exchange Agreement supersedes the original agreements that were issued by MTI and allows the convertible debt holder to exchange their debt for the newly created Series C Preferred Stock, par value of $0.001. The new series of preferred stock will be created upon the merger effectiveness date between Net Element and MAI. Convertible Notes Because the market price for MTI common stock on the date of the notes exceeded the notes’ conversion price of $0.6877 per share, a beneficial conversion feature in the amount of $10,613,630 was recorded as a discount on the notes. The discount is being amortized as additional interest over the life of the notes. At September 30, 2021, the balance of the unamortized discount is $8,060,555. Company management evaluated the conversion features embedded in the convertible notes for classification and accounting under the provisions of ASC 815-40 and determined the conversion features met treatment as equity. |
FAIR VALUE MEASUREMENTS AND FAI
FAIR VALUE MEASUREMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS | 12 Months Ended |
Sep. 30, 2021 | |
FAIR VALUE MEASUREMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS | |
FAIR VALUE MEASUREMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS | NOTE 6 – FAIR VALUE MEASUREMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS Non-Financial Assets Measured at Fair Value on a Non-Recurring Basis Non-financial assets, such as property, equipment and leasehold improvements is required to be measured at fair value only when acquired or when an impairment loss is recognized. See “ ” . Financial instruments for which carrying value approximates fair value Certain financial instruments that are not carried at fair value on the consolidated balance sheets are carried at amounts that approximate fair value, due to their short-term nature and credit risk. These instruments include cash and cash equivalents, accounts payable, accrued liabilities, and debt. We believe that the carrying value of term debt approximates fair value due to the variable rates associated with these obligations. Accounts payable are short-term in nature and generally terms are due upon receipt or within 30 to 90 days. |
DEFICIENCY IN STOCKHOLDERS' EQU
DEFICIENCY IN STOCKHOLDERS' EQUITY | 12 Months Ended |
Sep. 30, 2021 | |
DEFICIENCY IN STOCKHOLDERS' EQUITY | |
DEFICIENCY IN STOCKHOLDERS' EQUITY | NOTE 7 – DEFICIENCY IN STOCKHOLDERS’ EQUITY The accompanying financial statements include a retrospective recapitalization to reflect the composition of stockholder’s equity, as if they had existed for the periods presented. Preferred Stock On November 5, 2021, we filed an Amended and Restated Articles of Incorporation which included the rights and privileges of Preferred Stock Series A and Series B. Under the terms of our Articles of Incorporation, the Board of Directors may determine the rights, preferences and terms of our authorized but unissued shares of preferred stock. Dividends The holders of Preferred Stock are entitled to non-cumulative dividends if declared by the Board of Directors. The holders of the Preferred Stock Series A and Series B shall participate on a pro rata basis (on an “as converted” basis to common stock) in any cash dividend paid on common stock. No dividends have been declared or paid during the years ended September 30, 2021 and 2020. Liquidation Holders of Preferred Stock are entitled to receive a liquidation preference prior to any distribution to holders of Common Stock. Upon occurrence of a liquidation transaction, the Preferred Stock would be redeemed by the issuer for the applicable original issue price. However, if the holders of Preferred Stock would receive a greater amount of consideration had the Preferred Stock been converted immediately prior to such transaction, the Preferred Stock shall be deemed to have been converted for the purposes of the redemption amount. Conversion Preferred Stock Series A is convertible at any time at the option of the holder into Common Stock at a conversion rate of one Additionally, all outstanding shares of the Preferred Stock shall automatically convert into shares of the underlying Common Stock upon the Company’s sale of its Common Stock in a firm commitment underwritten public offering pursuant to a registration statement under the Securities Act, the public offering price of which results in aggregate cash proceeds to the Company of not less than $50 million, net of underwriting discounts and commissions (a “Qualified IPO”). Voting Rights Holders of Preferred Stock are entitled to the same voting rights as the holders of common stock and to notice of shareholders’ meetings. The holders of Common Stock and Preferred Stock shall vote together as a single class (on an as-converted basis) on all matters. Each holder of Preferred Stock is entitled to the number of votes equal to the number of shares of Common Stock into which such shares of Preferred Stock could be converted. Common Stock We have 500,000,000 shares of common stock authorized with $0.001 par value per share. There were 7,048,386 and 5,086,225 shares of common stock issued outstanding The holders of Common Stock are entitled to one vote for each share of Common Stock held at all meetings of shareholders. In the event of a liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, the common shareholders are entitled to receive the remaining assets following distribution of liquidation preferences, if any, to the holders of our preferred stock. The holders of common stock are not entitled to receive dividends unless declared by our Board of Directors. To date, no dividends were declared or paid to the holders of common stock. Warrants The following table summarizes warrant activity for the years ended September 30, 2021 and 2020: Weighted Average MAI shares Exercise Price Warrants outstanding at September 30, 2019 97,308 $ 8.84 Warrants exercised — $ — Warrants granted 420,242 $ 8.84 Warrants expired — $ — Warrants outstanding at September 30, 2020 540,905 $ 8.84 Weighted Average MAI shares Exercise Price Warrants outstanding at September 30, 2020 540,905 $ 8.84 Warrants exercised — $ — Warrants granted 4,480,855 $ 8.84 Warrants expired (97,308) $ 8.84 Warrants outstanding at September 30, 2021 4,924,447 $ 8.84 2020-2021 Warrants The warrants are exercisable for a five September 30, 2021 Expected term (in years) 5.0 Volatility 63.9 % Dividend yield 0.00 % Risk-free interest rate 0.34%-0.82 % Common stock price $ 5.43 The allocation of the fair value of these warrants was included as a debt discount on the consolidated balance sheet and amortized to interest expense over the scheduled maturity dates of the various promissory notes. |
LOSS PER SHARE
LOSS PER SHARE | 12 Months Ended |
Sep. 30, 2021 | |
LOSS PER SHARE | |
LOSS PER SHARE | NOTE 8 – LOSS PER SHARE Earnings per common share (“EPS”) is computed by dividing net income allocated to common shareholders by the weighted-average common shares outstanding, excluding unvested common shares subject to repurchase or cancellation. Diluted EPS is computed by dividing income allocated to common shareholders plus dividends on dilutive convertible preferred stock and preferred stock that can be tendered to exercise warrants, by the weighted-average common shares outstanding plus amounts representing the dilutive effect of outstanding warrants and the dilution resulting from the conversion of convertible preferred stock, if applicable. For 2021 and 2020, the Series A Preferred Stock were excluded from the diluted share count because the result would have been antidilutive under the “if-converted method.” The warrants to purchases common shares of stock also were excluded from the computation because the result would have been antidilutive. |
MTI SHARE- BASED COMPENSATION
MTI SHARE- BASED COMPENSATION | 12 Months Ended |
Sep. 30, 2021 | |
MTI SHARE- BASED COMPENSATION | |
MTI SHARE- BASED COMPENSATION | NOTE 9 – MTI SHARE- BASED COMPENSATION MTI has a share incentive plan as part of its annual discretionary share-based compensation programs. The plan includes consultants and employees, including directors and officers. For employees, they are notified of company share incentives during the onboarding process. The employee’s offer letter briefly describes the plan. Subject to the approval of MTI’s Board of Directors or its Compensation Committee and following the adoption of an equity incentive plan, employees are issued a specified number of shares of the MTI Common Shares. Employees are vested in 100% of the MTI shares after 12 months of continuous service. Additional MTI shares may be issued to employees over the next two years at anniversary date. Any disruption or separation of service results in the forfeiture of common shares. The total expense recognized for share awards represents the grant date fair value of such awards, which is generally recognized as a charge to income ratably over the vesting period . Consulting agreements or MTI shares for services are determined by the number of MTI shares granted within the individual contracts, as well as the services provided by the consultant. The MTI shares specified within the individual agreements are negotiated and approved by our Chief Executive Officer. The consultant earns the MTI shares over the service period. The MTI shares are accounted for as professional fees within G&A expenses. Employee share issuances are part of Salaries expense. The expense recognized for share awards represents the grant date fair value of such awards, which is generally recognized as a charge to income ratably over the vesting period. For the fiscal year ended September 30, Composition of Stock-Based Compensation Expense 2021 2020 Employee MTI share issuance $ 2,505,091 $ 1,037,102 MTI shares for services 2,460,529 2,929,179 MTI Share-Based compensation expense $ 4,965,620 $ 3,966,281 |
ACCRUED EXPENSES AND OTHER CURR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 12 Months Ended |
Sep. 30, 2021 | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | NOTE 10 – ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES September 30, 2021 September 30, 2020 Accrued Expenses and Other Liabilities Accrued expense - other $ 2,051,696 $ 16,021,442 Accrued payroll 4,586,057 3,771,874 Accrued interest 12,489,012 2,358,273 Total $ 19,126,765 $ 22,151,589 Accrued expenses – other Accrued payroll Accrued interest |
LIABILITY TO ISSUE STOCK
LIABILITY TO ISSUE STOCK | 12 Months Ended |
Sep. 30, 2021 | |
LIABILITY TO ISSUE STOCK | |
LIABILITY TO ISSUE STOCK | NOTE 11 - LIABILITY TO ISSUE STOCK Liability represents stock payable that is accrued for and issuable at a future date for Preferred Management Partners and Cambria Investment Banking Services. Refer to Note 17. |
PROPERTY, EQUIPMENT AND LEASEHO
PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET | 12 Months Ended |
Sep. 30, 2021 | |
PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET | |
PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET | NOTE 12 – PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET Property, equipment, and leasehold improvements, net consists of the following: September 30, September 30, 2021 2020 Building $ 804,654 $ 807,154 Furniture and Equipment 111,102 114,879 Vehicles 45,887 45,887 Computer Hardware and Software 139,742 129,967 Machinery and Equipment 2,597,654 2,615,311 Leasehold Improvements 66,379 76,675 Subtotal 3,765,418 3,789,873 Less: Accumulated Depreciation (2,583,941) (2,247,877) Property, Equipment and Leasehold Improvements, Net $ 1,181,477 $ 1,541,996 Depreciation expense related to property, equipment and leasehold improvements for the years ended September 30, 2021, and 2020 was $354,125 and $702,068, respectively. |
OTHER ASSETS
OTHER ASSETS | 12 Months Ended |
Sep. 30, 2021 | |
OTHER ASSETS | |
OTHER ASSETS | NOTE 13 – OTHER ASSETS Other assets consist of the following: September 30, 2021 September 30, 2020 Other Assets Coda Materials $ 76,587 $ 207,000 Advance Payments on long-lived assets — 51,806 Notes Receivable 90,552 79,939 Show Room Cars 2,739,995 210,483 Security Deposits 186,640 212,782 Deposit on Property (See Note 15) 1,240,000 — Total Other Assets $ 4,333,774 $ 762,010 |
OPERATING EXPENSES
OPERATING EXPENSES | 12 Months Ended |
Sep. 30, 2021 | |
OPERATING EXPENSES | |
OPERATING EXPENSES | NOTE 14 – OPERATING EXPENSES General and Administrative Expenses consists of the following: Year ended September 30, 2021 2020 Professional fees $ 6,991,246 $ 5,260,142 Salaries 6,091,520 2,437,934 Depreciation and amortization 720,805 725,796 Lease 1,776,198 905,231 Settlements and penalties 1,532,378 219,655 Employee benefits 368,563 216,349 Utilities and office expense 345,766 213,361 Advertising and promotions 413,771 156,241 Taxes and licenses 73,527 67,607 Repairs and maintenance 244,868 55,050 Other 835,299 169,775 Total $ 19,393,941 $ 10,427,141 Within professional fees is MTI shares for services, which is the issuance of MTI shares for services rendered to consultants and professional service firms. The expense is recorded at fair value of MTI shares issued (see Note 13, Other Assets). For the fiscal year ended September 30, 2021 and 2020, the Company recorded $2,460,529 and $2,929,179, respectively, for shares for services. Research and development consist of the following: For the fiscal year ended September 30, 2021 2020 Research & Development Professional fees $ 3,009,027 $ 1,667,077 Total $ 3,009,027 $ 1,667,077 Research and development costs are expensed as incurred. Research and development expenses primarily consist of Mullen Five EV show car development and are primarily comprised of personnel-related costs for employees and consultants. In December 2020, the Company entered into an agreement with Thurner, Inc. to design and develop two show electric vehicles. The planned finalization is expected to occur in 2021. The total cost for Phase 1 is $483,254 . In December 2020, MTI entered into a Statement of Work with Phiaro, Inc. for its show car development for approximately $1.6 million. The show car project program started in December 2020 and is anticipated to be finished November 2021. The program is for the initial show car development of the Mullen Five, which is a mid-size electric SUV. The program start began in January 2021. The initial show cars in development consist of two mid-size electric SUVs. |
LEASES
LEASES | 12 Months Ended |
Sep. 30, 2021 | |
LEASES | |
LEASES | NOTE 15 – LEASES MTI has entered into various operating lease agreements for certain of its offices, manufacturing and warehouse facilities, and corporate jet. We have implemented the provisions of ASC 842, on October 1, 2019. Operating leases are included in right-of-use assets, and current and noncurrent portion of lease liabilities, as appropriate. These right-of-use assets also includes any lease payments made and initial direct costs incurred at lease commencement and excludes lease incentives. The lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. We have lease agreements which require payments for both lease and non-lease components and has elected to account for these as a single lease component. Certain leases provide for annual increases to lease payment based on an index or rate. We calculate the present value of future lease payments based on the index or at the lease commencement date for new leases. The table below presents information regarding our lease assets and liabilities. September 30, 2021 September 30, 2020 Assets: Operating lease right-of-use assets $ 2,350,927 $ 1,729,112 Liabilities: Operating lease liabilities, current (599,898) (336,765) Operating lease liabilities, non-current (1,857,894) (1,482,569) Total lease liabilities $ (2,457,792) $ (1,819,334) Weighted average remaining lease terms: Operating leases 3.34 years 4.51 years Weighted average discount rate: Operating leases 28 % 28 % Cash paid for amounts included in the measurement of lease liabilities for the fiscal year ended September 30, 2021, and 2020 $ 1,057,438 $ 1,096,054 Operating lease costs: For the fiscal year ended September 30, 2021 2020 Fixed lease cost $ 1,185,576 $ 430,886 Variable lease cost 448,983 454,422 Short-term lease cost 401,526 101,916 Sublease income (84,473) (81,993) Total operating lease costs $ 1,951,612 $ 905,231 Operating Lease Commitments Our leases primarily consist of land, land and building, or equipment leases. Our lease obligations are based upon contractual minimum rates. Most leases provide that we pay taxes, maintenance, insurance and operating expenses applicable to the premises. The initial term for most real property leases is typically 1 to 3 years, with renewal options of 1 to 5 years, and may include rent escalation clauses. For financing obligations, a portion of the periodic lease payments is recognized as interest expense and the remainder reduces the obligations. For operating leases, rent is recognized on a straight-line basis over the lease term, including scheduled rent increases and rent holidays. On April 27, 2021, MTI entered into a 4-month lease agreement to lease a 127,400 square-foot manufacturing plant on 100 acres located at One Greentech Drive, Robinsonville (Tunica County), MS from May 1, 2021 through July 31, 2021 for $50,000 per month. MTI also has an option to purchase the property for $12.0 million. The lease agreement will terminate on the earlier of the (a) closing of the purchase of the property or (b) MTI’s termination of the lease. On March 12, 2021, MTI paid $240,000 into escrow for the asset purchase. Consummation of the purchase is contingent upon completion of satisfactory inspection, review of environmental report, etc. Furniture, fixtures, equipment and other assets are included as part of the purchase. On July 23, 2021, the parties entered into a first amendment to the agreement, whereby the lease is extended for an additional six months. On July 26, 2021, MTI paid $1,000,000 (“extension payment”) pursuant to the first amendment to the lease agreement (payments will remain at $50,000 per month through January 31, 2022). The source of the funds to make the extension payment came from proceeds received from the issuance of a convertible note with TDR Capital Pty Limited. The extension payment deposited into escrow will be credited to the purchase price upon closing. As of 11/12/2021, the property was purchased from Saleen Motors International, LLC for $12,000,000. The lease was cancelled on the purchase date of the aforesaid property. Refer to Note 19, Subsequent Events. The following table reflects maturities of operating lease liabilities at September 30, 2021: Years ending September 30, 2022 $ 1,213,728 2023 1,157,693 2024 824,287 2025 436,155 2026 222,787 Thereafter — Total lease payments $ 3,854,650 Less: Imputed interest (1,396,858) Present value of lease liabilities $ 2,457,792 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Sep. 30, 2021 | |
INCOME TAXES. | |
INCOME TAXES | NOTE 16 – INCOME TAXES On December 2, 2019, we entered into a tax sharing agreement with Mullen Technologies Inc. Although our results are included in the Mullen Technologies consolidated tax return for U.S. federal income tax purposes, our tax provision is calculated primarily as though MAI was a separate taxpayer. However, under certain circumstances, transactions between us and Mullen Technology are assessed using consolidated tax return rules. Tax sharing agreement governs the payment of tax liabilities and entitlement to refunds thereof, allocate responsibility for, and cooperation in, the filing of tax returns, and provide for certain other matters relating to taxes For the years ended September 30, 2021 and 2020, we had income tax NOL carryforwards of approximately $193 million for Federal and $192 million for California, which will expire as follows: NOL Carryforward 2021 Federal 2034-2037 $ 29,838,716 Indefinite $ 162,818,819 Total Federal $ 192,657,535 California 2034-2040 $ 191,722,566 Total California $ 191,722,566 2021 - $ 2021 - % Income tax benefit at statutory rate $ (9,247,200) 21.00 % State income taxes 800 0.00 % Permanent Differences 158,166 (0.36) % Valuation Allowance 9,091,163 (20.65) % Other (2,129) 0.00 % Total (benefit) provision for income taxes $ 800 0.00 % We record deferred income taxes using enacted tax laws and rates for the years in which the taxes are expected to be paid. Deferred income tax assets and liabilities are recorded based on the differences between the financial reporting and income tax bases of assets and liabilities. Significant components of the Company’s net deferred tax assets as of September 30, 2021, are as follows: 2021 2020 Deferred tax assets: Net Operating loss carryforwards 38,676,405 31,413,378 Charitable Contributions 894 1,176 Accrued Expenses 315,555 104,164 Impairment Other — 83,845 Other Assets 364,419 261,842 163(j) Limitation 14,491,332 4,178,291 Total gross deferred tax assets 53,848,604 36,042,696 Less valuation allowance (53,416,875) (35,747,087) Total net deferred tax assets 431,729 295,609 Deferred tax liabilities: Intangibles (146,639) (157,641) Fixed Assets (284,922) (137,632) Other (168) (336) Total deferred tax liabilities (431,729) (295,609) Net deferred tax assets $ 0 $ — For the years ended September 30, 2021 and 2020, we recorded a full valuation allowance against the deferred tax assets because we do not believe that the deferred tax assets recorded in 2021 and 2020 are more likely than not to be realizable. We follow the guidance for accounting for uncertainty in income taxes in accordance with FASB ASC 740, which clarifies uncertainty in income taxes recognized in an enterprise’s financial statements. The standard also prescribes a recognition threshold and measurement standard for the financial statement recognition and measurement of an income tax position taken, or expected to be taken, in an income tax return. Only tax positions that meet the more likely than not recognition threshold may be recognized. In addition, the standard provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, and disclosure. As of September 30, 2021, the Company has recorded $15.2M related to unrecognized tax benefits. Tax years for 2014 through 2021 are subject to examination by the tax authorities. Tax Reform. |
CONTINGENCIES AND CLAIMS
CONTINGENCIES AND CLAIMS | 12 Months Ended |
Sep. 30, 2021 | |
CONTINGENCIES AND CLAIMS | |
CONTINGENCIES AND CLAIMS | NOTE 17 – CONTINGENCIES AND CLAIMS ASC 450 governs the disclosure and recognition of loss contingencies, including potential losses from litigation, regulatory, tax and other matters. The accounting standard defines a “loss contingency” as “an existing condition, situation, or set of circumstances involving uncertainty as to possible loss to an entity that will ultimately be resolved when one or more future events occur or fail to occur.” ASC 450 requires accrual for a loss contingency when it is “probable that one or more future events will occur confirming the fact of loss” and “the amount of the loss can be reasonably estimated.” From time to time, we are subject to asserted and actual claims and lawsuits arising in the ordinary course of business. Company management reviews any such legal proceedings and claims on an ongoing basis and follows appropriate accounting guidance when making accrual and disclosure decisions. We establish accruals for those contingencies where the incurrence of a loss is probable and can be reasonably estimated, and it discloses the amount accrued and the amount of a reasonably possible loss in excess of the amount accrued, if such disclosure is necessary for our consolidated financial statements to not be misleading. To estimate whether a loss contingency should be accrued by a charge to income, management evaluates, among other factors, the degree of probability of an unfavorable outcome and the ability to make a reasonable estimate of the amount of the loss. We do not record liabilities when the likelihood is probable, but the amount cannot be reasonably estimated. Preferred Management Partners, Inc. – Consulting Agreement On September 23, 2021, MAI entered into a consulting arrangement with Preferred Management Partners, Inc. The Company hereby engages Preferred Management, Inc. to resume negotiations between MAI and Qiantu Motor Cars to enable the Company to procure the intellectual property ownership rights related to the K-50 automobile. As compensation for entering into this agreement and providing services to MAI, the consultant will receive 750,000 unrestricted publicly traded shares of the Company’s common stock registered on Form S-8 registration statement. If the consultant is successful, the Company will pay the consultant an additional 750,000 unrestricted shares of common stock registered on Form S-8 registration statement. As of this date, the Form S-8 registration statement has not been filed; however, the transaction is properly accounted for within the prepaid account and the liability for to issue future shares on the balance sheet. Debt Financing On September 3, 2021, the Company received debt financing through MTI entering into an unsecured $6.6 million convertible note agreement with TDR Capital. The initial sale and purchase was comprised of a $550,000 convertible note and detached warrants to acquire up to 2,180,750 shares in MTI stock (169,764 MAI warrants). The second sale and purchase was comprised of a $6,050,000 convertible note and detached warrants to acquire up to 23,988,500 shares in MTI stock (1,867,423 MAI warrants). The series of funding began October 5, 2021 and ended on 11/5/2021, the aggregate funds received was $5.44 million, net of OID of 10% or $0.61 million. Refer to Note 5, Debt and Note 19, Subsequent Events. Equity Financing On May 7, 2021, MTI executed a $20,000,000 equity purchase agreement with the Acuitas Group Holdings, who committed to purchase shares of the MAI Series C Preferred Stock at a price of $8.84 per share. Upon NASDAQ uplifting and trading volume of stock, this equity will commence funding. On November 4, 2021, Acuitas Group Holdings wired $20,000,000 to MTI before the merger effective date with Net Element that occurred on November 5, 2021. As part of the transaction, Acuitas Group Holdings received 5,915,639 warrants with an adjusted exercise price of $8.83 and matures in five years. Cambria – Investment Banking Services Agreement On July 16, 2021 and September 8, 2021, MTI agreed to a proposal with Cambria a placement agent services for investment offerings up to $3,000,000. As a result of the agreement, MTI is obligated to pay a financing fee of 6.0% of aggregate gross proceeds and warrants equal to 6.0% of the offering. To date, Cambria has raised $750,000 in equity financing. The equity purchases of Series C Preferred Stock have detached warrants with strike price of $8.84. The warrants have a five Table below represents the post-merger shares for equity capitalization. As of September 30, 2021, there was no issuances of Series C preferred Stock and associated warrants. Date Series C Preferred Stock Warrants Additional Warrants Maturity Date Exercise Price 7/23/2021 $ 75,000 1,983 — 7/23/2026 $ 8.84 7/23/2021 50,000 1,322 — 7/23/2026 $ 8.84 7/23/2021 100,000 2,644 — 7/23/2026 $ 8.84 7/23/2021 75,000 1,983 — 7/23/2026 $ 8.84 7/23/2021 — 1,528 * 3,056 * 7/23/2026 $ 8.84 9/8/2021 175,000 4,626 — 9/8/2026 $ 8.84 9/8/2021 175,000 4,626 — 9/8/2026 $ 8.84 9/8/2021 100,000 2,644 — 9/8/2026 $ 8.84 Total $ 750,000 21,356 3,056 — — ● Represents placement agent fees to Cambria. Drawbridge Acknowledgement, Waiver and Consent On July 16, 2021, MTI and Drawbridge entered into an agreement whereby Drawbridge acknowledged, waived, and consented to the contribution and spin-off of Mullen’s EV assets into a new entity. As indicated in Note 1 to the financial statements, the spin-off occurred occur immediately prior to the merger with Net Element. As part of the agreement, Drawbridge was paid $10,000,000 that was applied towards the outstanding principal balance and includes a waiver of default. The principal reduction to the indebtedness to Drawbridge occurred on November 15, 2021. International Business Machines (“IBM”) We previously recorded a $4.5 million liability associated with a lawsuit with IBM, in which IBM contended that we had not fulfilled our obligations pursuant to a contract entered into during 2017. On April 28, 2020, the Supreme Court of the State of New York granted summary judgment in favor of IBM’s claim for breach of contract. The Court, however, found that a trial (inquest) was required to determine the damages to which IBM is entitled. We proposed an offer in settlement to resolve the matter, with the parties proceeding under the Joint Development and Technology License Agreement and all rights restored to us under the Trademark License Agreement. On December 1, 2021, the Supreme Court of the State of New York entered a judgment of $5.6 million to IBM. On December 2, 2021, we filed a Notice of Appeal. As a result, we recorded an additional charge, increasing the liability to the adjudicated amount. Federal and State Tax Liabilities We have recorded a $3.8 million liability at September 30, 2021 associated with past due amounts owed to the Internal Revenue Service (“IRS”) and the Employment Development Department of California (“EDD”) for failing to remit payroll taxes associated with MTI and the Company’s employees. The IRS has filed a lien on substantially all of our assets. On April 28, 2021, MTI entered into an installment agreement with the EDD to pay $10,000 per month related to unpaid state payroll tax liabilities of $388,352 plus accrued interest. Monthly payments of $10,000 are being made and will continue until paid in full. Raymond James and Associates (“RJA”) – Investment Banking Services Agreement On May 5, 2020, MTI entered into an agreement with Raymond James & Associates for public offering and placement agent services. The agreement called for payment of a cash retainer of $50,000, which remains unpaid. Upon the closing of any public offering, regardless of whether RJA procured the agreement regarding the offering, we are obligated to pay a financing fee of equal to the greater of a) 6.0% of aggregate gross proceeds and b) $3,000,000. Linghang Boao Group, LTD In November 2019, we entered into a three-year Strategic Cooperation Agreement (“SCA”) with Linghang Boao Group LTD to co-develop a Solid- State Battery Management system with a 480 - 720-mile Driving Range. The Company’s total financial commitment under the SCA is $2,196,000. On December 3, 2019, we paid the first installment of $390,000. The remaining installments are payable upon the earlier of certain dates or the achievement of defined milestones. The contractual target dates and milestones have been severely disrupted due to the occurrence COVID-19. As a result, our management believes the COVID-19 pandemic represents a Force Majeure event (that is, the pandemic has impacted our and Linghang Boao Group LTD’s ability to meet their respective contractual obligations due to restriction in movement, stoppage of production, increase in costs due to scarcity of raw materials components, labor shortages, shortage of funds, disruption in the supply chains, U.S. governmental closures of ports/borders and travel restrictions). Based on the foregoing, we believe there is no breach of contract due to our failure of performance. Unfortunately, we have sustained a loss of $390,000 at September 30, 2020 due to contract nonperformance and force majeure. There are no accrued liabilities recorded for any remaining milestone payments at September 30, 2021. Our management has notified Linghang Boao Group of the decision to invoke the force majeure provision of the Strategic Cooperation Agreement due to the inability of the parties to perform caused by the global Pandemic. ASC GEM Equity Line Financing On January 4, 2021, MTI entered into a $350,000,000 equity line financing agreement with GEM Global Yield LLC (“Purchaser”) and GEM Yield Bahamas Limited (“GEM”). MAI plans to issue and sell common shares to GEM up to the number of common shares having an aggregate value of $350,000,000. The Purchaser will buy MAI shares based on the operational needs and/or drawdowns of the Company. If the aggregate limit has been reached, the Purchaser will increase the aggregate limit in an amount up to $150,000,000. The commitment fee, equal to 2% of the Aggregate Limit, will be charged for each draw-down. The fee may be paid in cash or freely tradeable common shares of the Company. The commitment begins when we effect the public listing of MAI common stock for trading on a U.S. national securities exchange. The agreement matures in 36 months after the public listing of MAI common shares. Pursuant to the GEM Agreement, the commitment began on the “Public Listing Date”, defined as the date that we effected (i) a “Reverse Merger Transaction” (defined in the GEM Agreement as a reverse merger of a similar transaction between MAI and a special purpose acquisition company whose securities are publicly traded) or (ii) the direct listing of the Company’s common stock on a public market. Further to the GEM Agreement, we are obligated to issue warrants providing GEM the right to purchase up to 6.6% of our common shares outstanding on the Public Listing Date. As the Company is not effecting a Reverse Merger Transaction (that is, Net Element is not a special purpose acquisition company) nor is the Company effecting a direct listing of its common shares, the Company does not believe it is obligated under the GEM Agreement to pay fees nor issue warrants to GEM. In addition, the Company has agreed with a lender of its convertible promissory notes that the Company would not initiate utilization of the GEM Agreement. [HELP ME UNDERSTAND THIS – THE REVERSE MERGER INTO NET ELEMENT DID OCCUR. SO, IS THIS AGREEMENT STILL VALID? NEED TO DISCLOSE THE PROPER RIGHTS AND OBLIGATIONS] Litigation On May 28, 2021, a Net Element shareholder filed a complaint against Net Element and Mullen Acquisition, Inc. and certain named individuals regarding the proposed merger transaction. The complaint alleges, among other things, a potential dilution of the value of Net Elements stock and a failure to act in with a fiduciary duty to its stakeholders. On September 3, 2021, a Net Element shareholder filed a lawsuit against Net Element, Mullen Technologies, Inc. and Mullen Acquisition, Inc. and certain individuals regarding the proposed merger agreement. The lawsuit alleges material omissions regarding the merger transaction and seeks to prevent the consummation of the merger agreement, as well as certain other equitable relief. Based upon information presently known to management, the Company believes that the potential liability from the May 2021 complaint and September 2021 lawsuit, if any, will not have a material adverse effect on its financial condition, cash flows or results of operations. Therefore, no liability has been reflected on the financial statements. Odyssey Group Settlement On August 13, 2021, MTI and Odyssey Group reached a settlement concerning disputes and differences that arose from collections on invoices and liens pending pursuant to Odyssey’s Client Account and the Odyssey Group Consulting Agreement. Odyssey alleged that the MTI owed $503,637 at March 31, 2021. The parties agreed that Odyssey would receive $50,000 and 500,000 shares of MTI common stock (pre-merger). Additionally, Odyssey will receive an equivalent of $10,000 in cash or common stock from Mullen. The obligation to pay Odyssey may be terminated by either party upon 30-days’ notice by either party. A release of liability for the amounts owed on the Consulting arrangement was signed and executed on the settlement date. The Company has issued Odyssey the 500,000 common shares worth $1.25 million and paid $50,000 in cash and common stock. The $10,000 in cash or common stock provision has not been terminated by either party. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Sep. 30, 2021 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | NOTE 18 – RELATED PARTY TRANSACTIONS At September 30, 2021 and September 30, 2020, respectively, the Drawbridge Investments, LLC relationship comprised various loans and advances, common shares, and preferred shares. The Drawbridge loans are currently in default. The Common and Preferred Shares presented are shares in MTI that have been issued by MTI. Drawbridge Related Transactions (Cumulative) September 30, 2021 September 30, 2020 Description Loan Principal # of Shares FV of Shares Loan Principal # of Shares FV of Shares Various Notes $ 23,831,554 — $ — $ 23,831,554 — $ — Common Shares — 1,378,274 14,730,560 — 1,378,274 14,730,560 Preferred Shares - Series A — 2,335 2,496,000 — 2,335 2,496,000 Preferred Shares - Series B — 5,567,319 59,501,756 — 5,567,319 59,501,756 Total Related Party Transactions $ 23,831,554 6,947,929 $ 76,728,316 $ 23,831,554 6,947,929 $ 76,728,316 *Shares are MTI common and preferred shares. The default interest rate on the Drawbridge loans is 28% per annum, and accrued interest is $9,465,094 at September 30, 2021. Chief Executive Officer Loans to MTI From time to time, the Company’s CEO provides loans to the Company. The outstanding balances for these loans at September 30, 2021, and September 30, 2020, are $479,914 and $236,565, respectively. Subsequent to September 30, 2021, the Company repaid their outstanding loan balance. William Miltner William Miltner is a litigation attorney who provides legal services to Mullen Technologies and its subsidiaries. Mr. Miltner also is an elected Director for MAI, beginning his term in August 2021. For the fiscal year ending September 30, 2021, Mr. Miltner received $901,398 for services rendered to us. Net billings were $890,484. Mr. Miltner has been providing legal services to us since 2020. Equity Warrants (EXCHANGE AGREEMENT and EQUITY WARRANTS) During 2020 and 2021, as part of the planned merger with Net Element, we entered into an Exchange Agreement and subsequent amendments with certain holders of convertible debt as an incentive to convert their convertible debt into shares of our series C preferred stock. In connection with this agreement, the Company issued warrants to these investors, which represents a share-based equity incentive (“Series Preferred C Investors”). Series C Preferred Investors also purchased Series Preferred C Stock with detached warrants. The warrants have a fixed and determinable price of $8.84 per common share. The fair value of the MAI warrants is $13.7 million as of September 30, 2021. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Sep. 30, 2021 | |
SUBSEQUENT EVENTS | |
Subsequent Events [Text Block] | NOTE 19 – SUBSEQUENT EVENTS Company management has evaluated subsequent events through December [XX], 2021, which is the date these financial statements were available to be issued. Except as discussed below, management has determined that there were no subsequent events which required recognition, adjustment to or disclosure in the carve-out financial statements: Business Combination and Recapitalization On November 5, 2021, the Company consummated the merger with Net Element. At the effective time of the Merger, the common and preferred equity interests held by our then investors were cancelled, and the investors received their respective shares of Common Stock, Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock in Net Element, Inc. (which was renamed Mullen Automotive, Inc.) Prior to the Merger, Net Element, Inc. transferred its assets and liabilities to RBL Capital Group LLC (“RBL”) in full satisfaction of the outstanding loan balance owed to RBL by Net Element and its subsidiary or affiliated entities pursuant to a Divestiture Agreement, dated July 20, 2021, which was filed with the Registration Statement. Pursuant to ASC 805, for financial accounting and reporting purposes, Mullen Automotive, Inc. was deemed the accounting acquirer and Net Element was treated as the accounting acquiree, and the Business Combination was accounted for as a reverse merger transaction. Debt and Equity Financing Exchange Agreement (Convertible Debt to Equity Conversion) On October 25, 2021, MTI amended the exchange agreement to include the $1,100,000 debt financing and detached warrants with JADR Consulting Group PTY Limited. The agreement represents Amendment No. 6 and Joinder to the Exchange Agreement that was originally signed on May 7, 2021 and amended on May 20, 2021. Upon consummation of the proposed merger with Net Element, the investors agreed to exchange the convertible debt for shares of MAI’s Series C Preferred Stock, par value $0.001 per share. The right to additional purchases of preferred stock expires 12 months from the merger close date between Net Element and MAI. Assignment and Assumption of Rights On October 25, 2021, JADR Consulting Group PTY Limited and TDR Capital entered into agreement of Assignment and Assumption of Rights. On September 3, 2021, the Assignor (“TDR Capital”) agreed to purchase $6,600,000 in convertible debt and warrants to acquire 2,037,164 shares of MAI common stock. The Assignor has agreed with the Assignee (“JADR Consulting Group PTY Limited”) to assign al rights, title and interest in the aggregate original amount of $3,300,000 and warrants to acquire 1,201,521 shares of MTI common stock for the aggregate purchase price of $3,000,000. The funding would occur between October 27, 2021 and November 4, 2021. On October 27, 2021, Amendment No. 6 and Joinder to the Exchange Agreement was modified to reflect the changes of the Assignment and Assumption of Rights document. Convertible Debt Issuances and Warrants On November 4, 2021, we received debt financing through MTI entering into an unsecured $1.1 million convertible note agreement with JADR Consulting Group PTY Limited. The convertible note is issued at OID of 10% ($0.1 million); carries an interest rate of 15% and has a maturity date of one year. The convertible note is unsecured and includes detached warrants to acquire up to 417,375 shares of MAI common stock. The warrant exercise price is $8.84 per common share and expires five years from the date of issuance. The number of shares issuable upon conversion of the conversion amount is determined according to the formula: Conversion Amount/Conversion Price, subject to certain adjustments. However, upon conversion, JADR Consulting Group PTY Limited (together with its affiliates) is limited to a 9.9% ownership cap in shares of MTI’s common stock then outstanding, after giving effect to the issuance of common stock issuable upon exercise of the warrants. On November 4, 2021, the Company received debt financing through MTI entering into an unsecured $110K convertible note agreement with Michael Friedlander. The convertible note is issued with OID of 10% or $10K; carries an interest rate of 15% and has a maturity date of one year. The convertible note is unsecured and includes detached warrants to acquire up to 30,872 shares of MAI common stock. The warrant exercise price is $8.84 per common share and expires five years from the date of issuance. The number of conversions shares issuable upon conversion of the conversion amount shall be determined according to the formula: Conversion Amount/Conversion Price , subject to certain adjustments. However, upon conversion, Michael Friedlander (together with his affiliates) is limited to a 9.9% ownership cap in shares of MTI’s common stock then outstanding after giving effect to the issuance of common stock issuable upon exercise of the warrants. Default Date of Convertible Interest Interest Maturity Warrants Additional Exercise Exercise Issuance Note ($) Rate Rate Date (#) Warrants Date Price ($) 10/27/2021 $ 550,000 * 15 % 20 % 10/27/2022 208,687 27,246 10/27/2026 $ 8.84 10/27/2021 — — — — — 116,770 10/27/2026 $ 8.84 10/27/2021 1,100,000 15 % 20 % 10/27/2022 417,375 — 10/27/2026 $ 8.84 11/4/2021 2,750,000 * 15 % 20 % 11/4/2022 848,818 — 11/4/2021 $ 8.84 11/4/2021 110,000 15 % 20 % 11/4/2022 30,872 — 11/4/2026 $ 8.84 Total $ 4,510,000 — — — 1,478,752 144,016 — — *Assumption and assignment of $3,300,000 in convertible debt and warrants, which included 144,016 in additional warrants. $ 30M common stock purchase On September 1, 2021, MAI (through MTI) and Esousa Holdings, LLC entered into a Securities Purchase Agreement, whereby the Esousa Holdings, LLC committed to purchase up to an aggregate of $30,000,000 common shares over a twelve-month period. The number of shares purchased is based on a set of conditions. The number of common shares is calculated by multiplying 125% by $2,500,000 and then dividing by the closing sale price for the trading day immediately after the last closing trade price for MAI securities reported on the principal securities exchange or trading market is listed or trading. The initial closing date is based on the close of the reverse merger transaction with Net Element, which occurred on November 5, 2021. The Company must file a SEC registration statement covering the sale of the Registrable securities by MAI and be declared effective before the purchases of common stock commences. Lastly, the agreement contains a provisions that the purchase of common stock can vary based on an adjustment of upward or downward based on closing price calculation that must be calculated each month. $15M Note Receivable Transaction Securities Purchase Agreement On October 8, 2021, MAI (through MTI) and CEOcast, Inc. entered into an agreement, whereby CEOCast, Inc. irrevocably committed to purchase, and MAI irrevocably committed to sell $15 million in warrants to acquire shares of common stock. The aggregate purchase price will be paid to MTI at closing by means of a full recourse promissory note. MAI will issue warrants that are registered in the name of CEOcast, Inc. Promissory Note On October 8, 2021, CEOcast, Inc. committed to pay to MAI (through MTI) in the principal amount of $15 million. The note receivable bears no interest, and the payment of principal will be made in 6 equal monthly installments beginning on the first business day of the calendar month after warrants. Pre-Funded Common Stock Warrants (Penny Warrants) On October 8, 2021, CEOcast, Inc. is entitled to receive warrants (this “ Warrant Equity Swap Agreement On October 8, 2021, the agreement was entered into between CEOcast, Inc. and MAI (through MTI) for the purposes of adjusting the number of warrant shares initially issued to CEOcast, Inc. The readjustment of shares will coincide with the schedule outlined within the Equity Swap Agreement. The schedule is to perform the warrant share calculation on the first business day of each month for the next six months beginning after the effective date of the reverse merger and the registration of common shares. Drawbridge Acknowledgement, Waiver and Consent On July 16, 2021, the Company and Drawbridge entered into an agreement whereby Drawbridge acknowledged, waived, and consented to the contribution and spin-off of Mullen’s EV assets into a new entity. As indicated in Note 1 to the financial statements, the spin-off occurred immediately prior to the consummation of the merger with Net Element. As part of the agreement, Drawbridge was paid $10,000,000, to be applied towards the outstanding principal balance and includes a waiver of default. The principal pay down to Drawbridge occurred on November 15, 2021. Release of Liability, Debt Paydowns and Payoffs On December 27, 2021, the Par Funding/CBSG debt of $78,904 has been satisfied and is longer a viable debt and should be removed from the books as a liability. The determination was made by Daniel Stermer, authorized agent for the United States Trustee. On November 29, 2021, MAI (through MTI) repaid the $140,000 loan from the NY Group, which had matured on January 24, 2021. On November 29, 2021, MAI (through MTI) repaid the $25,000 loan from MABM Holdings loan, which matured on January 13, 2021. On November 11, 2021, the Company executed a release of liability for the EXIM relationship. MAI (through MTI) paid $1,750,000 to EXIM USA to dismiss or release any and all claims, causes of action, lawsuits or other demands upon MTI. The loan matured on October 31, 2019, and the then current balance on the loan was $700,000 plus interest. On November 9, 2021, the Company executed a release of liability for the Elegant Funding relationship. The lending relationship covered two transactions: 1. $458,000 loan dated May 23, 2018, which had matured on November 23, 2018. The current principal balance was $438,000 , and the payoff amount was $604,770 . 2. $185,000 dated September 29, 2018, which had matured on March 29, 2019. The current principal balance is $185,000 , and the payoff amount is $222,426 . On November 9, 2021, MAI (through MTI) repaid a loan from John Gordon, which had matured on May 7, 2019. In consideration for the payoff, MAI (through MTI) received the title to one (1) Qiantu Dragonfly K50 EV car. Tunica, MS Production Facility – Purchase On November 12, 2021, Mullen completed the $12,000,000 purchase of the Tunica County, MS property (“Advanced Manufacturing and Engineering Center” or “AMEC”). The property is approximately 127,400sf EV manufacturing facility and a small shed for storage. The property is located at 1 Greentech Drive, in the City of Robinsonville, MS. AMEC will be used to class 1 and class 2 EV cargo vans and the Mullen FIVE Crossover. The facility currently occupies 124,000 square feet of manufacturing space. The total available land on the property is over 100 acres. On the expanded site, Mullen plans to build a body shop, fully automated paint shop and a general assembly shop. Show Car Development On November 17, 2021, MAI debuted the Mullen FIVE Crossover at the LA Auto Show and was awarded Top SUV Zero Emission Vehicle. Mullen had two variants of the FIVE model on display while also showcasing powertrain, battery and charging technology. The cost of the two cars was approximately $4.1 million. Employment Agreements On November 5, 2021, MAI assumed liabilities, including employment agreements, from MTI as part of the reverse merger transaction with Net Element. On November 15, 2021, MTI entered into an employment agreement with Shawn Hughes as the President of OEM Franchising of MAI. According to the employment agreement, he will receive an annual salary of $240,000 and 100,000 shares per year. On October 25, 2021, MTI entered into an employment agreement with Kerri Sadler as the Chief Financial Officer of MAI. According to the employment agreement, she will receive an annual salary of $350,000 and 300,000 shares per year. On September 14, 2021, MTI entered into an employment agreement with Jillian Green as the Vice President of Business and Legal Affairs of MAI. According to the employment agreement, she will receive an annual salary of $300,000 and 30,000 shares per year. On July 1, 2021, MTI entered into an employment agreement with Jerry Alban as the Chief Operating Officer of MAI. According to the employment agreement, he will receive an annual salary of $350,000 and 300,000 shares per year. Consulting Agreements On October 26, 2021, MAI entered into a consulting agreement with Mary Winters, Corporate Secretary and Director, to compensate for Corporate Secretary Services and director responsibilities for the period of October 1, 2021, for one fiscal year ending September 30, 2022, in the amount of $60,000 annually or $5,000 per month. On January 1, 2021, MAI entered into a consulting agreement with Connection Management to perform services in the following areas: creation and implementation of a marketing plan to the independent auto dealer community, consult in the areas of auto finance, and aftermarket product development, target marketing promotions within the auto reseller community. The agreement was signed by the Company and Shawn Hughes, who is the principal for Connection Management. The consulting contract was terminated on November 15, 2021, when Mr. Hughes became an employee of MAI. Director Fees Our board of directors adopted a non-employee director compensation policy, which we expect will became effective in August 2021. Under the non-employee director compensation policy, our non-employee directors are expected to be eligible to receive compensation for service on our board of directors and committees of our board of directors as follows: ● Each non-employee director is entitled to receive $25,000 annually as a cash retainer for their board service, with additional annual cash retainers of (i) $2,000 for each member of our compensation committee or nominating and governance committee; (ii) $5,000 for the chairman of our compensation committee or nominating and governance committee; (iii) $8,000 for each member of our audit committee; and (iv) $45,000 for the chairman of our audit committee. All cash retainers are paid quarterly in arrears. ● Additionally, each non-employee director shall receive an annual stock option award under the 2021 Plan to purchase such number of shares of our Class A common stock that will equal $75,000 divided by the closing trading price of our Class A common stock on the date of each such grant, which will vest one year from the date of grant. Upon the occurrence of certain corporate events, including a change of control of the Company, all such stock option awards will immediately vest. The initial annual stock option award will be awarded to each of our non-employee directors in connection with the S-8 registration statement which will be filed in December 2021. Our non-employee directors are entitled to reimbursement of ordinary, necessary and reasonable out-of-pocket travel expenses incurred in connection with attending in-person meetings of our board of directors or committees thereof. In the event our non-employee directors are required to attend greater than four in-person meetings or 12 telephonic meetings during any fiscal year, such non-employee directors shall be entitled to additional compensation in the amount of $500 for each additional telephonic meeting beyond the 12 telephonic meeting thresholds, and $1,000 for each additional in-person meeting beyond the four in-person meeting threshold. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Sep. 30, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Push-Down Accounting | Push-Down Accounting The carve-out financial statements reflect costs and expenses incurred by MTI on behalf of MAI, including interest costs. As a result, share-based compensation and other equity transactions (such as issuances of warrants and stock conversion rights embedded in issuances of indebtedness) are reflected in these carve-out financial statements. Accordingly, the classification of debt and equity issuances by MTI have been pushed down and reflected with similar classification in these carve-out financial statements. In addition, certain right-of-use assets and related lease liabilities of MTI have been pushed down to MAI. |
Reverse Merger and Recapitalization | Reverse Merger and Recapitalization The November 2021 Business Combination with Net Element was accounted for as a reverse merger and recapitalization, with Net Element treated as the “acquired” company for accounting purposes. The Business Combination was accounted as the equivalent of Mullen Automotive, Inc. issuing stock for the net assets of Net Element, accompanied by a recapitalization. Accordingly, these financial statements reflect the share capital and weighted average shares outstanding via a retrospective recapitalization as shares representing the exchange ratio established in the Business Combination. |
Use of Estimates | Use of Estimates The preparation of carve-out financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the dates of the carve-out financial statements and the reported amounts of total expenses in the reporting periods. Estimates are used for, but not limited to, fair value of long-lived assets, fair value of financial instruments, depreciable lives of property and equipment, income taxes, contingencies, and inputs used to value stock-based compensation, valuation of common and preferred stock issued by MTI. Additionally, the rates of interest on several debt agreements have been imputed where there was no stated interest rate within the original agreement. The imputed interest results in adjustments to the debt amounts reported in our condensed carve-out financial statements prepared under U.S. GAAP. Loan valuations issues can arise when trying to determine the debt attributes, such as discount rate, credit loss factors, liquidity discounts, and pricing. Management bases its estimates on historical experience and on various other assumptions believed to be reasonable, the results of which form the basis for adjustments about the carrying values of assets and liabilities and the recording of costs and expenses that are not readily apparent from other sources. The actual results may differ materially from these estimates. |
Risks and Uncertainties | Risks and Uncertainties We operate within an industry that is subject to rapid technological change, intense competition, and serves an industry that has significant government regulations. It is subject to significant risks and uncertainties, including competitive, financial, developmental, operational, technological, required knowledge of industry governmental regulations, and other risks associated with an emerging business. Any one or combination of these or other risks could have a substantial influence on our future operations and prospects for commercial success. |
Cash and Cash Equivalents | Cash and Cash Equivalents Company management considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. We did not have any cash equivalents at September 30, 2021 or September 30, 2020. |
Deferred Advertising | Deferred Advertising At September 30, 2021, deferred advertising consists of upfront costs paid related to auto shows occur during November 2021 and January 2022. At September 30, 2020, deferred advertising represented a marketing campaign, financed by a third party that was carried as a deferred charge on the consolidated balance sheet until the launch of the marketing campaign. These deferred advertising charges of $15 million were associated with the AirSign advertising contract and the RedRock Outdoor Advertising Display advertising contract. The marketing campaigns were not launched, and we received a release of liability from both AirSign, Inc. and RedRock Outdoor Advertising, Inc. Both liabilities, along with the associated deferred advertising were derecognized in January 2021. |
Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets Prepaid expenses consist of various advance payments made for goods or services to be received in the future. These prepaid expenses include insurance and other contracted services requiring up-front payments. |
Property, Equipment and Leasehold Improvements, Net | Property, Equipment and Leasehold Improvements, Net Property, equipment and leasehold improvements are stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated economic useful lives of the assets. Repairs and maintenance expenditures that do not extend the useful lives of related assets are expensed as incurred. Estimated Useful Lives Description Life Buildings 30 Years Furniture and Equipment 5 Years Computer and Software 1 - 3 years Machinery and Equipment 5 Years Leasehold Improvements Shorter of the estimated useful life or the underlying lease term Vehicles 5 Years Expenditures for major improvements are capitalized, while minor replacements, maintenance and repairs, which do not extend the asset lives, are charged to operations as incurred. Upon sale or disposition, the cost and related accumulated depreciation are removed from the accounts and any gain or loss is included in operations. Company management continually monitors events and changes in circumstances that could indicate that the carrying balances of its property, equipment and leasehold improvements may not be recoverable in accordance with the provisions of ASC 360, “Property, Plant, and Equipment.” |
Income Taxes | Income Taxes Prior to Mullen’s capitalization and corporate reorganization, our operations were included in the tax filings of MTI. The cash and deferred tax positions between us and MTI and are formalized in a tax sharing agreement. Income taxes are recorded in accordance with ASC 740, Income Taxes (“ASC 740”), which provides for deferred taxes using an asset and liability approach. We recognize deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns. Deferred tax assets and liabilities are determined based on the difference between the consolidated financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are provided, if based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. There are transactions that occur during the ordinary course of business for which the ultimate tax determination may be uncertain. At September 30, 2021 and 2020, there were no material changes to either the nature or the amounts of the uncertain tax positions. The Company’s income tax provision consists of an estimate for U.S. federal and state income taxes based on enacted rates, as adjusted for allowable credits, deductions, uncertain tax positions, changes in deferred tax assets and liabilities, and changes in the tax law. We maintain a full valuation allowance against the value of our U.S. and state net deferred tax assets because management does not believe the recoverability of the tax assets meets the “more likely than not” likelihood at September 30, 2021 and 2020. |
Intangible Assets | Intangible Assets Intangible assets consist of acquired and developed intellectual property and website development costs. In accordance with ASC 350, “Intangibles—Goodwill and Others,” |
Other Assets | Other Assets Other assets are comprised primarily of Coda electric vehicles, related parts and security deposits related to the Company’s property leases related to the EV business only. |
Extinguishment of Liabilities | Extinguishment of Liabilities The Company derecognizes financial liabilities when the Company’s obligations are discharged, cancelled, or expired. |
Leases | Leases In February 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-02, “Leases” (ASU 2016-02). The core principle of ASU 2016-02 is that lessees should recognize on its balance sheet, assets and liabilities arising from a lease. In accordance with that principle, ASU 2016-02 requires that a lessee recognize a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying leased asset for the lease term. Lessees shall classify all leases as finance or operating leases. The Company adopted ASU 2016-02, on October 1, 2019, which resulted in the recognition of the right-of-use assets and related obligations on its carve-out financial statements. |
Accrued Expenses | Accrued Expenses Accrued expenses are expenses that have been incurred but not yet paid and are classified within current liabilities on the consolidated balance sheets. |
General and Administrative Expenses | General and Administrative Expenses General and administrative (“G&A”) expenses include all non-production related expenses incurred by us in any given period. This includes expenses such as professional fees, salaries, rent, repairs and maintenance, utilities and office expense, employee benefits, depreciation and amortization, advertising and marketing, settlements and penalties, taxes, and licenses. Advertising costs are expensed as incurred and are included in G&A expenses. Other than trade show expenses which are deferred until occurrence of the future event, we expense advertising costs as incurred in accordance with ASC 720-35, “Other Expenses – Advertising Cost.” |
Research and Development Costs | Research and Development Costs Research and development costs are expensed as incurred and includes impairment charges in the amounts of $74,495 and $93,244 for the years ended September 30, 2021 and 2020, respectively. Research and development expenses primarily consist of costs associated with the development of our Mullen Five show car. |
Share-Based Compensation | Share-Based Compensation We account for share-based awards issued by MTI in accordance with ASC Subtopic 718-10, “Compensation – Share Compensation”, |
Other Financing Costs | Other Financing Costs Pursuant to the terms of the First Amendment to the Company’s Agreement and Plan of Merger with Net Element, we incurred a daily $13,333 penalty for delays in the consummation of the merger transaction. We recorded a charge of approximately $1,560,000 associated with these delays, which is included in the consolidated statement of operations for the fiscal year ended September 30, 2021 and included in accounts payable in the consolidated balance sheet at September 30, 2021. |
Related Party Transactions | Related Party Transactions We have related party transactions with certain of our directors, officers, and principal shareholders. These transactions, which are primarily long-term in nature, include operational loans, convertible debt, and warrants for financial support associated with the borrowing of funds and are entered into in the ordinary course of business. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments We apply fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value on a recurring basis. Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities that are required to be recorded at fair value, Company management considers the principal or most advantageous market in which we would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as risks inherent in valuation techniques, transfer restrictions and credit risk. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: Level 1 – Quoted prices in active markets for identical assets or liabilities. Level 2 – Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 – Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability. |
Concentrations of Business and Credit Risk | Concentrations of Business and Credit Risk We maintains cash balances in several financial institutions that are insured by either the Federal Deposit Insurance Corporation or the National Credit Union Association up to certain federal limitations, generally $250,000. At times, our cash balance may exceed these federal limitations and maintains significant cash on hand at certain of its locations. However, we have not experienced any losses in such accounts and management believes we are not exposed to any significant credit risk on these accounts. There were no amounts in excess of insured limitations at September 30, 2021 and 2020. |
Recently Issued and Adopted Accounting Standards | Recently Issued and Adopted Accounting Standards In January 2017, the FASB issued Accounting Standards Update No. 2017-04 (ASU 2017-04) (Topic 350), “Intangibles - Goodwill and Others.” ASU 2017-04 simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. ASU 2017-04 is effective for annual periods beginning after December 15, 2019 including interim periods within those periods. We adopted ASU 2017-04, on October 1, 2020, which did not have a material impact on our consolidated balance sheets. In September 2018, the FASB issued Accounting Standards Update No. 2018-07 (ASU 2018-07) ASU No. 2018-07 (Topic 718), “Compensation—Stock Compensation: Improvements to Nonemployee Share-Based Payment Accounting.” ASU 2018-07 expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. The amendments also clarify that Topic 718 does not apply to share-based payments used to effectively provide (1) financing to the issuer or (2) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under Topic 606. We adopted ASU 2018-07, on October 1, 2020, which did not have a material impact on our consolidated statements of operations. In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. This ASU amends the guidance on convertible instruments and the derivatives scope exception for contracts in an entity’s own equity, and also improves and amends the related earnings per share guidance for both Subtopics. The ASU will be effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years and early adoption is permitted. Company management is evaluating the future impact this guidance on our consolidated financial statements. In May 2021, the FASB issued ASU No. 2021-04, Earnings Per Share (Topic 260), Debt – Modifications and Extinguishments (Subtopic 470-50), Compensation – Stock Compensation (Topic 718) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40). The ASU will be effective for fiscal years beginning after December 15, 2021, (December 15, 2023 for smaller reporting companies). We have issued debt and equity instruments, the accounting for which could be impacted by this update. Company management is evaluating the impact this guidance on our financial condition and results of operations. In July 2021, the FASB issued ASU No. 2021-05, Lessors – Certain Leases with Variable Lease Payments (Topic 842). The amendments in this update affect lessors with lease contracts that have (1) have variable lease payments that do not depend on a reference index or a rate, and (2) would have resulted in the recognition of a selling loss at lease commencement if classified a sales-type or direct financing. The ASU will be effective for fiscal years beginning after December 15, 2021. Company management is evaluating the impact this guidance will have on our consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of Property, Equipment and Leasehold Improvements, Net Useful Lives | Description Life Buildings 30 Years Furniture and Equipment 5 Years Computer and Software 1 - 3 years Machinery and Equipment 5 Years Leasehold Improvements Shorter of the estimated useful life or the underlying lease term Vehicles 5 Years |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
INTANGIBLE ASSETS | |
Schedule of finite lived intangible assets | September 30, 2021 September 30, 2020 Gross Net Gross Net Carrying Accumulated Carrying Carrying Accumulated Carrying Finite-Lived Intangible Assets Amount Amortization Amount Amount Amortization Amount Website design and development $ 2,660,391 $ (221,699) $ 2,438,692 $ 2,597,091 $ — $ 2,597,091 Intellectual property 71,182 (69,205) 1,977 71,182 (45,477) 25,705 Trademark 54,590 — 54,590 — — — Total Finite-Lived Intangible Assets $ 2,786,163 $ (290,904) $ 2,495,259 $ 2,668,273 $ (45,477) $ 2,622,796 |
Schedule of future amortization expense for finite-lived intellectual property | Years Ended September 30, 2021 Future Amortization 2022 $ 888,774 2023 886,797 2024 719,688 Total Future Amortization Expense $ 2,495,259 |
DEBT (Tables)
DEBT (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
DEBT | |
Schedule of indebtedness of short term and long term debt | Net Carrying Value Unpaid Principal Contractual Contractual Type of Debt Balance Current Long-Term Interest Rate Maturity Matured Notes $ 5,838,591 $ 5,838,591 $ — 0.00% - 15.00 % 2016 - 2021 Promissory Notes 23,831,912 23,831,912 — 28.00 % 2021 – 2022 Demand Note 500,000 500,000 — 27.00 % 2020 Convertible Unsecured Notes 15,932,500 15,932,500 — 15.00%-20.00 % 2021 - 2022 Real Estate Note 283,881 36,269 247,612 5.00 % 2023 Loan Advances 1,122,253 1,122,253 — 0.00% - 10.00 % 2019 – 2020 Less: Debt Discount (8,060,555) (8,060,555) — NA NA Total Debt $ 39,448,582 $ 39,200,970 $ 247,612 NA NA |
Scheduled Debt Maturities | Years Ended September 30, 2021 2022 2023 Total Total Debt $ 39,200,970 $ — $ 247,612 $ 39,448,582 Net Carrying Value Unpaid Principal Contractual Contractual Type of Debt Balance Current Long-Term Interest Rate Maturity Matured Notes $ 4,828,450 $ 4,828,450 $ — 0.00% - 15.00 % 2016 - 2019 Promissory Notes 25,288,063 25,288,063 — 0.00% - 28.00 % 2021 – 2022 Demand Note 500,000 500,000 — 27.00 % 2020 Convertible Unsecured Notes 1,867,500 1,867,500 — 20.00 % 2021 Real Estate Note 318,384 34,503 283,881 5.00 % 2023 Loan Advances 1,931,017 1,931,017 — 0.00% - 10.00 % 2019 – 2020 Less: Unamortized Debt Discount (1,401,062) (1,401,062) — NA NA Total Debt $ 33,332,352 $ 33,048,471 $ 283,881 NA NA |
Schedule of Convertible Notes | Convertible Interest Default Maturity Warrants Exercise Exercise Date of Issuance Note ($) Rate Interest Rate Date (#) Date Price ($) 8/26/2020 $ 1,000,000 15 % 20 % 8/26/2021 226,397 8/26/2025 $ 8.84 8/26/2020 200,000 15 % 20 % 8/26/2021 45,279 8/26/2025 $ 8.84 8/26/2020 200,000 15 % 20 % 8/26/2021 45,279 8/26/2025 $ 8.84 8/26/2020 100,000 15 % 20 % 8/26/2021 22,640 8/26/2025 $ 8.84 9/25/2020 105,000 15 % 20 % 9/25/2021 29,715 9/25/2025 $ 8.84 9/25/2020 157,500 15 % 20 % 9/25/2021 44,572 9/25/2025 $ 8.84 9/25/2020 105,000 15 % 20 % 9/25/2021 29,715 9/25/2025 $ 8.84 10/12/2020 660,000 15 % 20 % 10/12/2021 203,757 10/12/2025 $ 8.84 10/12/2020 33,000 15 % 20 % 10/12/2021 10,188 10/12/2025 $ 8.84 10/12/2020 27,500 15 % 20 % 10/12/2021 8,490 10/12/2025 $ 8.84 11/9/2020 660,000 15 % 20 % 11/9/2021 203,757 11/9/2025 $ 8.84 11/9/2020 33,000 15 % 20 % 11/9/2021 10,188 11/9/2025 $ 8.84 11/9/2020 27,500 15 % 20 % 11/9/2021 8,490 11/9/2025 $ 8.84 12/7/2020 660,000 15 % 20 % 12/7/2021 203,756 12/7/2025 $ 8.84 12/7/2020 33,000 15 % 20 % 12/7/2021 10,188 12/7/2025 $ 8.84 12/7/2020 27,500 15 % 20 % 12/7/2021 8,490 12/7/2025 $ 8.84 12/15/2020 157,500 15 % 20 % 12/15/2021 44,572 12/15/2025 $ 8.84 12/15/2020 157,500 15 % 20 % 12/15/2021 44,572 12/15/2025 $ 8.84 1/7/2021 660,000 15 % — 1/7/2022 203,757 1/7/2026 $ 8.84 1/7/2021 33,000 15 % — 1/7/2022 10,188 1/7/2026 $ 8.84 1/7/2021 27,500 15 % — 1/7/2022 8,490 1/7/2026 $ 8.84 1/7/2021 — — — — 2,038* 1/7/2026 $ 8.84 1/7/2021 192,500 15 % — 1/7/2022 59,429 1/7/2026 $ 8.84 1/7/2021 82,500 15 % — 1/7/2022 25,470 1/7/2026 $ 8.84 1/7/2021 192,500 15 % — 1/7/2022 59,429 1/7/2026 $ 8.84 1/7/2021 110,000 15 % — 1/7/2022 33,960 1/7/2026 $ 8.84 3/10/2021 660,000 15 % — 3/10/2022 203,757 3/10/2026 $ 8.84 3/10/2021 33,000 15 % — 3/10/2022 10,188 3/10/2026 $ 8.84 3/10/2021 27,500 15 % — 3/10/2022 8,490 3/10/2026 $ 8.84 5/7/2021 — — — — 82,326** 5/7/2026 $ 8.84 5/7/2021 — — — — 33,316** 5/7/2026 $ 8.84 5/7/2021 — — — — 10,504** 5/7/2026 $ 8.84 5/7/2021 — — — — 19,167** 5/7/2026 $ 8.84 5/16/2021 4,400,000 15 % 20 % 5/16/2022 1,358,112 5/16/2026 $ 8.84 7/22/2021 2,420,000 15 % 20 % 7/22/22 746,961 7/22/2026 $ 8.84 7/26/2021 1,100,000 15 % 20 % 7/26/22 339,528 7/26/2026 $ 8.84 8/19/2021 1,100,000 15 % 20 % 8/19/22 339,528 8/19/2026 $ 8.84 9/3/2021 550,000 15 % 20 % 9/3/22 169,764 9/3/2026 $ 8.84 Total $ 15,932,500 — — — 4,924,447 — — |
DEFICIENCY IN STOCKHOLDERS' E_2
DEFICIENCY IN STOCKHOLDERS' EQUITY (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
DEFICIENCY IN STOCKHOLDERS' EQUITY | |
Summary of warrant activity | The following table summarizes warrant activity for the years ended September 30, 2021 and 2020: Weighted Average MAI shares Exercise Price Warrants outstanding at September 30, 2019 97,308 $ 8.84 Warrants exercised — $ — Warrants granted 420,242 $ 8.84 Warrants expired — $ — Warrants outstanding at September 30, 2020 540,905 $ 8.84 Weighted Average MAI shares Exercise Price Warrants outstanding at September 30, 2020 540,905 $ 8.84 Warrants exercised — $ — Warrants granted 4,480,855 $ 8.84 Warrants expired (97,308) $ 8.84 Warrants outstanding at September 30, 2021 4,924,447 $ 8.84 |
Schedule of assumptions used for warrants issued and outstanding | September 30, 2021 Expected term (in years) 5.0 Volatility 63.9 % Dividend yield 0.00 % Risk-free interest rate 0.34%-0.82 % Common stock price $ 5.43 |
MTI SHARE- BASED COMPENSATION (
MTI SHARE- BASED COMPENSATION (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
MTI SHARE- BASED COMPENSATION | |
Schedule of composition of stock-based compensation expense | For the fiscal year ended September 30, Composition of Stock-Based Compensation Expense 2021 2020 Employee MTI share issuance $ 2,505,091 $ 1,037,102 MTI shares for services 2,460,529 2,929,179 MTI Share-Based compensation expense $ 4,965,620 $ 3,966,281 |
ACCRUED EXPENSES AND OTHER CU_2
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |
Schedule of accrued liabilities and other current liabilities | September 30, 2021 September 30, 2020 Accrued Expenses and Other Liabilities Accrued expense - other $ 2,051,696 $ 16,021,442 Accrued payroll 4,586,057 3,771,874 Accrued interest 12,489,012 2,358,273 Total $ 19,126,765 $ 22,151,589 |
PROPERTY, EQUIPMENT AND LEASE_2
PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET | |
Schedule of property and equipment, net | September 30, September 30, 2021 2020 Building $ 804,654 $ 807,154 Furniture and Equipment 111,102 114,879 Vehicles 45,887 45,887 Computer Hardware and Software 139,742 129,967 Machinery and Equipment 2,597,654 2,615,311 Leasehold Improvements 66,379 76,675 Subtotal 3,765,418 3,789,873 Less: Accumulated Depreciation (2,583,941) (2,247,877) Property, Equipment and Leasehold Improvements, Net $ 1,181,477 $ 1,541,996 |
OTHER ASSETS (Tables)
OTHER ASSETS (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
OTHER ASSETS | |
Schedule of other assets | September 30, 2021 September 30, 2020 Other Assets Coda Materials $ 76,587 $ 207,000 Advance Payments on long-lived assets — 51,806 Notes Receivable 90,552 79,939 Show Room Cars 2,739,995 210,483 Security Deposits 186,640 212,782 Deposit on Property (See Note 15) 1,240,000 — Total Other Assets $ 4,333,774 $ 762,010 |
OPERATING EXPENSES (Tables)
OPERATING EXPENSES (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
OPERATING EXPENSES | |
Schedule of Operating Expenses | General and Administrative Expenses consists of the following: Year ended September 30, 2021 2020 Professional fees $ 6,991,246 $ 5,260,142 Salaries 6,091,520 2,437,934 Depreciation and amortization 720,805 725,796 Lease 1,776,198 905,231 Settlements and penalties 1,532,378 219,655 Employee benefits 368,563 216,349 Utilities and office expense 345,766 213,361 Advertising and promotions 413,771 156,241 Taxes and licenses 73,527 67,607 Repairs and maintenance 244,868 55,050 Other 835,299 169,775 Total $ 19,393,941 $ 10,427,141 Within professional fees is MTI shares for services, which is the issuance of MTI shares for services rendered to consultants and professional service firms. The expense is recorded at fair value of MTI shares issued (see Note 13, Other Assets). For the fiscal year ended September 30, 2021 and 2020, the Company recorded $2,460,529 and $2,929,179, respectively, for shares for services. Research and development consist of the following: For the fiscal year ended September 30, 2021 2020 Research & Development Professional fees $ 3,009,027 $ 1,667,077 Total $ 3,009,027 $ 1,667,077 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
LEASES | |
Summary of components of lease expense | September 30, 2021 September 30, 2020 Assets: Operating lease right-of-use assets $ 2,350,927 $ 1,729,112 Liabilities: Operating lease liabilities, current (599,898) (336,765) Operating lease liabilities, non-current (1,857,894) (1,482,569) Total lease liabilities $ (2,457,792) $ (1,819,334) Weighted average remaining lease terms: Operating leases 3.34 years 4.51 years Weighted average discount rate: Operating leases 28 % 28 % Cash paid for amounts included in the measurement of lease liabilities for the fiscal year ended September 30, 2021, and 2020 $ 1,057,438 $ 1,096,054 |
Summary of maturities of operating lease liabilities | Operating lease costs: For the fiscal year ended September 30, 2021 2020 Fixed lease cost $ 1,185,576 $ 430,886 Variable lease cost 448,983 454,422 Short-term lease cost 401,526 101,916 Sublease income (84,473) (81,993) Total operating lease costs $ 1,951,612 $ 905,231 |
Summary of maturities of finance lease liabilities | Years ending September 30, 2022 $ 1,213,728 2023 1,157,693 2024 824,287 2025 436,155 2026 222,787 Thereafter — Total lease payments $ 3,854,650 Less: Imputed interest (1,396,858) Present value of lease liabilities $ 2,457,792 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
INCOME TAXES. | |
Summary of income tax NOL carryforwards | NOL Carryforward 2021 Federal 2034-2037 $ 29,838,716 Indefinite $ 162,818,819 Total Federal $ 192,657,535 California 2034-2040 $ 191,722,566 Total California $ 191,722,566 |
Summary of reconciliation of our effective tax rate to statutory federal tax rate | 2021 - $ 2021 - % Income tax benefit at statutory rate $ (9,247,200) 21.00 % State income taxes 800 0.00 % Permanent Differences 158,166 (0.36) % Valuation Allowance 9,091,163 (20.65) % Other (2,129) 0.00 % Total (benefit) provision for income taxes $ 800 0.00 % |
Summary of significant component of net deferred tax assets | 2021 2020 Deferred tax assets: Net Operating loss carryforwards 38,676,405 31,413,378 Charitable Contributions 894 1,176 Accrued Expenses 315,555 104,164 Impairment Other — 83,845 Other Assets 364,419 261,842 163(j) Limitation 14,491,332 4,178,291 Total gross deferred tax assets 53,848,604 36,042,696 Less valuation allowance (53,416,875) (35,747,087) Total net deferred tax assets 431,729 295,609 Deferred tax liabilities: Intangibles (146,639) (157,641) Fixed Assets (284,922) (137,632) Other (168) (336) Total deferred tax liabilities (431,729) (295,609) Net deferred tax assets $ 0 $ — |
CONTINGENCIES AND CLAIMS (Table
CONTINGENCIES AND CLAIMS (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
CONTINGENCIES AND CLAIMS | |
Schedule of post-merger shares for equity capitalization | Date Series C Preferred Stock Warrants Additional Warrants Maturity Date Exercise Price 7/23/2021 $ 75,000 1,983 — 7/23/2026 $ 8.84 7/23/2021 50,000 1,322 — 7/23/2026 $ 8.84 7/23/2021 100,000 2,644 — 7/23/2026 $ 8.84 7/23/2021 75,000 1,983 — 7/23/2026 $ 8.84 7/23/2021 — 1,528 * 3,056 * 7/23/2026 $ 8.84 9/8/2021 175,000 4,626 — 9/8/2026 $ 8.84 9/8/2021 175,000 4,626 — 9/8/2026 $ 8.84 9/8/2021 100,000 2,644 — 9/8/2026 $ 8.84 Total $ 750,000 21,356 3,056 — — ● Represents placement agent fees to Cambria. |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
RELATED PARTY TRANSACTIONS | |
Summary of Drawbridge Related Transactions | Drawbridge Related Transactions (Cumulative) September 30, 2021 September 30, 2020 Description Loan Principal # of Shares FV of Shares Loan Principal # of Shares FV of Shares Various Notes $ 23,831,554 — $ — $ 23,831,554 — $ — Common Shares — 1,378,274 14,730,560 — 1,378,274 14,730,560 Preferred Shares - Series A — 2,335 2,496,000 — 2,335 2,496,000 Preferred Shares - Series B — 5,567,319 59,501,756 — 5,567,319 59,501,756 Total Related Party Transactions $ 23,831,554 6,947,929 $ 76,728,316 $ 23,831,554 6,947,929 $ 76,728,316 |
LIQUIDITY, CAPITAL RESOURCES,_2
LIQUIDITY, CAPITAL RESOURCES, AND GOING CONCERN (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
LIQUIDITY, CAPITAL RESOURCES, AND GOING CONCERN | ||
Cash and cash equivalents | $ 42,174 | $ 33,368 |
Cash used in operating activities | 19,400,000 | |
Working capital deficit | 14,700,000 | |
Proceeds from unsecured convertible notes | 79,600,000 | |
Accumulated Deficit | $ (150,374,649) | $ (106,134,069) |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property, Equipment and Leasehold Improvements, Net (Details) | 12 Months Ended |
Sep. 30, 2021 | |
Building | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 30 years |
Furniture and Equipment | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
Computer Hardware and Software | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 3 years |
Computer Hardware and Software | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 1 year |
Machinery and Equipment | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
Vehicles | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Deferred Advertising Charges | $ 15,000,000 | |
Impairment charges | 74,495 | $ 93,244 |
Penalty For Delays In Consummation of Merger Transaction | 13,333 | |
Other Financing Costs Delay Charges | $ 1,560,000 | |
Maximum | ||
Amortization period | 36 months |
INTANGIBLE ASSETS - Schedule of
INTANGIBLE ASSETS - Schedule of distribution of the economic value of the identifiable intangible assets (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 2,786,163 | $ 2,668,273 |
Accumulated Amortization | (290,904) | (45,477) |
Net Carrying Amount | $ 2,495,259 | 2,622,796 |
Weighted average Useful life | 3 years | |
Estimated useful lives | 3 years | |
Website design and development | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 2,660,391 | 2,597,091 |
Accumulated Amortization | (221,699) | |
Net Carrying Amount | 2,438,692 | 2,597,091 |
Intangible asset cost | 117,890 | 296,511 |
Intellectual property | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 71,182 | 71,182 |
Accumulated Amortization | (69,205) | (45,477) |
Net Carrying Amount | 1,977 | $ 25,705 |
Trademark | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 54,590 | |
Net Carrying Amount | $ 54,590 |
INTANGIBLE ASSETS - Schedule _2
INTANGIBLE ASSETS - Schedule of total future amortization expense for finite-lived intellectual property (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Future Amortization Expense | ||
2022 | $ 888,774 | |
2023 | 886,797 | |
2024 | 719,688 | |
Total Future Amortization Expense | 2,495,259 | $ 2,622,796 |
Amortization expense | $ 245,427 | $ 23,728 |
DEBT - Summary of our indebtedn
DEBT - Summary of our indebtedness (Details) - USD ($) | Sep. 30, 2021 | Sep. 03, 2021 | May 26, 2021 | Sep. 30, 2020 |
Debt Instrument [Line Items] | ||||
Unpaid Principal Balance | $ 39,448,582 | $ 33,332,352 | ||
Net Carrying Value Current | 39,200,970 | 33,048,471 | ||
Long-term | 247,612 | 283,881 | ||
Convertible note, interest rate | 15.00% | |||
Less: Debt Discount | (8,060,555) | $ (660,000) | $ (3,726,816) | (1,401,062) |
Matured Notes | ||||
Debt Instrument [Line Items] | ||||
Unpaid Principal Balance | 5,838,591 | 4,828,450 | ||
Net Carrying Value Current | $ 5,838,591 | $ 4,828,450 | ||
Matured Notes | Maximum | ||||
Debt Instrument [Line Items] | ||||
Convertible note, interest rate | 15.00% | 15.00% | ||
Matured Notes | Minimum | ||||
Debt Instrument [Line Items] | ||||
Convertible note, interest rate | 0.00% | 0.00% | ||
Promissory Notes | ||||
Debt Instrument [Line Items] | ||||
Unpaid Principal Balance | $ 23,831,912 | $ 25,288,063 | ||
Net Carrying Value Current | $ 23,831,912 | $ 25,288,063 | ||
Convertible note, interest rate | 28.00% | |||
Promissory Notes | Maximum | ||||
Debt Instrument [Line Items] | ||||
Convertible note, interest rate | 28.00% | 28.00% | ||
Promissory Notes | Minimum | ||||
Debt Instrument [Line Items] | ||||
Convertible note, interest rate | 0.00% | 0.00% | ||
Demand Note | ||||
Debt Instrument [Line Items] | ||||
Unpaid Principal Balance | $ 500,000 | $ 500,000 | ||
Net Carrying Value Current | $ 500,000 | $ 500,000 | ||
Convertible note, interest rate | 27.00% | 27.00% | ||
Convertible Unsecured Notes | ||||
Debt Instrument [Line Items] | ||||
Unpaid Principal Balance | $ 15,932,500 | $ 1,867,500 | ||
Net Carrying Value Current | $ 15,932,500 | $ 1,867,500 | ||
Convertible note, interest rate | 20.00% | |||
Convertible Unsecured Notes | Maximum | ||||
Debt Instrument [Line Items] | ||||
Convertible note, interest rate | 20.00% | |||
Convertible Unsecured Notes | Minimum | ||||
Debt Instrument [Line Items] | ||||
Convertible note, interest rate | 15.00% | |||
Real Estate Note | ||||
Debt Instrument [Line Items] | ||||
Unpaid Principal Balance | $ 283,881 | $ 318,384 | ||
Net Carrying Value Current | 36,269 | 34,503 | ||
Long-term | $ 247,612 | $ 283,881 | ||
Convertible note, interest rate | 5.00% | 5.00% | ||
Loan Advances | ||||
Debt Instrument [Line Items] | ||||
Unpaid Principal Balance | $ 1,122,253 | $ 1,931,017 | ||
Net Carrying Value Current | $ 1,122,253 | $ 1,931,017 | ||
Loan Advances | Maximum | ||||
Debt Instrument [Line Items] | ||||
Convertible note, interest rate | 10.00% | 10.00% | ||
Loan Advances | Minimum | ||||
Debt Instrument [Line Items] | ||||
Convertible note, interest rate | 0.00% | 0.00% |
DEBT - Scheduled debt maturitie
DEBT - Scheduled debt maturities (Details) - USD ($) | Sep. 30, 2021 | Sep. 30, 2020 |
Debt Maturities | ||
2021 | $ 39,200,970 | |
2023 | 247,612 | |
Total | $ 39,448,582 | $ 33,332,352 |
DEBT - Notes and Advances (Deta
DEBT - Notes and Advances (Details) - USD ($) | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 03, 2021 | |
Debt Instrument [Line Items] | |||
Interest rate (as a percent) | 15.00% | ||
Amortization of debt discount | $ 8,211,648 | $ 16,008,454 | |
Carrying amount of indebtedness of debt | $ 15,932,500 | ||
Promissory Notes | |||
Debt Instrument [Line Items] | |||
Maturity term | 3 years | ||
Interest rate (as a percent) | 28.00% | ||
Remediation of default of debt amount | $ 5,960,574 | ||
Debt instrument interest expense | 21,168,232 | 18,094,234 | |
Amortization of debt discount | 8,211,648 | 16,008,454 | |
Carrying amount of indebtedness of debt | $ 1,300,000 | $ 38,912,640 | |
Promissory Notes | Maximum | |||
Debt Instrument [Line Items] | |||
Interest rate (as a percent) | 28.00% | 28.00% | |
Promissory Notes | Minimum | |||
Debt Instrument [Line Items] | |||
Interest rate (as a percent) | 0.00% | 0.00% |
DEBT - Convertible Debt Issuanc
DEBT - Convertible Debt Issuances and Warrants (Details) - USD ($) | Sep. 03, 2021 | Aug. 19, 2021 | Jul. 26, 2021 | Jul. 22, 2021 | May 26, 2021 | May 16, 2021 | Sep. 30, 2021 | Sep. 30, 2020 |
Debt Instrument [Line Items] | ||||||||
Unsecured convertible note agreement with TDR Capital | $ 6,600,000 | $ 1,100,000 | $ 2,420,000 | $ 4,400,000 | ||||
Debt interest rate | 15.00% | |||||||
Amortization of debt discount | $ 8,211,648 | $ 16,008,454 | ||||||
Original issue discount of convertible debt | $ 100,000 | $ 100,000 | $ 242,000 | |||||
Shares acquire | 2,180,750 | |||||||
Warrants exercise price | $ 0.6877 | $ 0.6877 | $ 0.6877 | $ 0.6877 | $ 0.6877 | $ 0.6877 | ||
Warrant expiration term | 5 years | 5 years | 5 years | 5 years | 5 years | |||
Fair value of the MAI warrants | $ 24,358,875 | $ 13,700,000 | ||||||
Original issue discount | $ 660,000 | 3,726,816 | $ 8,060,555 | $ 1,401,062 | ||||
Beneficial conversion discount | $ 673,184 | |||||||
Amortization period | 12 months | |||||||
Ownership percentage | 9.90% | 9.90% | 9.90% | 9.90% | ||||
Convertible debt | $ 6,050,000 | |||||||
Received from TDR Capital convertible debt issuance | $ 550,000 | |||||||
MTI common stock | ||||||||
Debt Instrument [Line Items] | ||||||||
Shares acquire | 4,361,500 | 4,361,500 | 9,595,300 | 17,446,000 | ||||
MAI warrants | ||||||||
Debt Instrument [Line Items] | ||||||||
Shares acquire | 169,764 | 339,528 | 339,528 | 746,961 | 1,358,112 | |||
Warrants exercise price | $ 8.84 | $ 8.84 | $ 8.84 | $ 8.84 | $ 8.84 | |||
MAI warrants | MTI common stock | ||||||||
Debt Instrument [Line Items] | ||||||||
Shares acquire | 1,867,423 | |||||||
MTI warrants | MTI common stock | ||||||||
Debt Instrument [Line Items] | ||||||||
Shares acquire | 23,988,500 | |||||||
TDR Capital | ||||||||
Debt Instrument [Line Items] | ||||||||
Unsecured convertible note agreement with TDR Capital | $ 1,100,000 | |||||||
Convertible note debt discount rate | 10.00% | 10.00% | 10.00% | 10.00% | ||||
Debt interest rate | 10.00% | 15.00% | 15.00% | 15.00% | 15.00% | |||
Maturity term | 1 year | 1 year | 1 year | 1 year | 1 year | |||
Original issue discount of convertible debt | $ 400,000 | |||||||
Ownership percentage | 9.90% | |||||||
Received from TDR Capital convertible debt issuance | $ 550,000 | |||||||
Convertible Unsecured Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt interest rate | 20.00% | |||||||
Convertible Unsecured Notes | Minimum | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt interest rate | 15.00% | |||||||
Convertible Unsecured Notes | Maximum | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt interest rate | 20.00% |
DEBT - Convertible Debt to Equi
DEBT - Convertible Debt to Equity Conversion (Exchange Agreements) (Details) - USD ($) | May 07, 2021 | Nov. 04, 2021 | Sep. 30, 2021 | Sep. 03, 2021 | Aug. 19, 2021 | Jul. 26, 2021 | Jul. 22, 2021 | Sep. 30, 2020 |
Debt Instrument [Line Items] | ||||||||
Preferred Stock Par value | $ 0.001 | $ 0.001 | $ 0.001 | |||||
Warrants to acquire shares of common stock | 1,478,752 | |||||||
Threshold expiry period for right to purchase additional preferred stock from merger closing date | 12 months | |||||||
TDR Capital | ||||||||
Debt Instrument [Line Items] | ||||||||
Convertible debt | $ 6,600,000 | $ 1,100,000 | ||||||
Digital Power Lending, LLC | ||||||||
Debt Instrument [Line Items] | ||||||||
Convertible debt | $ 1,100,000 | |||||||
Debt financing | $ 2,420,000 | |||||||
MAI warrants | ||||||||
Debt Instrument [Line Items] | ||||||||
Preferred Stock Par value | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | |||
Warrants to acquire shares of common stock | 3,717,898 | |||||||
MTI warrants | ||||||||
Debt Instrument [Line Items] | ||||||||
Convertible debt | $ 10,762,500 | |||||||
Warrants to acquire shares of common stock | 42,759,290 |
DEBT - Drawbridge Relationship
DEBT - Drawbridge Relationship (Details) - USD ($) | 1 Months Ended | ||
Jul. 31, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
DBI and MTI | |||
Debt Instrument [Line Items] | |||
Sale-Leaseback obligation amount | $ 49,500,000 | ||
Sale-Leaseback obligation in face value | 23,831,554 | ||
Extinguishment of debt amount | $ 9,935,086 | ||
Amounts owed to affiliated | $ 33,296,648 | $ 25,092,994 | |
DBI and MTI | MAI warrants | |||
Debt Instrument [Line Items] | |||
Shares issued for cash (in shares) | 5,567,319 | ||
DBI and MTI | MTI warrants | |||
Debt Instrument [Line Items] | |||
Shares issued for cash (in shares) | 71,516,534 | ||
Other DBI | |||
Debt Instrument [Line Items] | |||
Amounts owed to affiliated | $ 982,500 | $ 1,082,500 |
DEBT - SBA Loans (Details)
DEBT - SBA Loans (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |||
Nov. 30, 2020 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 03, 2021 | Apr. 14, 2020 | |
Debt Instrument [Line Items] | |||||
Interest rate (as a percent) | 15.00% | ||||
Gain on extinguishment of indebtedness, net | $ 890,581 | ||||
Other DBI | |||||
Debt Instrument [Line Items] | |||||
Forgiveness amount | $ 875,426 | ||||
Interest amount | 5,155 | ||||
Gain on extinguishment of indebtedness, net | $ 890,581 | ||||
Accrued principal and interest | 3.75% | ||||
Other DBI | MTI warrants | |||||
Debt Instrument [Line Items] | |||||
Promissory note amount | $ 10,000 | ||||
SBA loan | |||||
Debt Instrument [Line Items] | |||||
Unsecured loan | $ 885,426 | ||||
Interest rate (as a percent) | 1.00% |
DEBT - Convertible Notes (Detai
DEBT - Convertible Notes (Details) | May 26, 2021USD ($)$ / shares | May 07, 2021item$ / sharesshares | Sep. 30, 2021USD ($)$ / shares | Nov. 04, 2021shares | Sep. 03, 2021USD ($)$ / shares | Aug. 19, 2021$ / shares | Jul. 26, 2021$ / shares | Jul. 22, 2021$ / shares | Sep. 30, 2020USD ($)$ / shares |
Debt Instrument [Line Items] | |||||||||
Interest rate (as a percent) | 15.00% | ||||||||
beneficial conversion feature | $ 673,184 | ||||||||
unamortized discount | $ 3,726,816 | $ 8,060,555 | $ 660,000 | $ 1,401,062 | |||||
Additional warrants | shares | 1,478,752 | ||||||||
Preferred Stock Par value | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | ||||||
Number of convertible debt | item | 4 | ||||||||
Warrants Term | 5 years | ||||||||
Percentage of MTI common shares | 6.00% | ||||||||
Warrants exercise price | $ / shares | $ 0.6877 | $ 0.6877 | $ 0.6877 | $ 0.6877 | $ 0.6877 | $ 0.6877 | |||
Convertible Debt | |||||||||
Debt Instrument [Line Items] | |||||||||
Unsecured convertible notes | $ 10,762,500 | ||||||||
Interest rate (as a percent) | 15.00% | ||||||||
Percentage of quarterly interest payments | 20.00% | ||||||||
Debt instrument term | 1 year | ||||||||
beneficial conversion feature | $ 10,613,630 | ||||||||
unamortized discount | 8,060,555 | ||||||||
Additional warrants | shares | 1,866,665 | ||||||||
Convertible Debt | MTI common stock | |||||||||
Debt Instrument [Line Items] | |||||||||
Unsecured convertible notes | $ 6,418,500 |
DEBT - Schedule of Convertible
DEBT - Schedule of Convertible Notes (Details) | Sep. 08, 2021shares | May 07, 2021item$ / shares | Sep. 30, 2021USD ($)$ / sharesshares | Nov. 04, 2021shares | Sep. 03, 2021$ / shares | Aug. 19, 2021$ / shares | Jul. 26, 2021$ / shares | Jul. 22, 2021$ / shares | May 26, 2021$ / shares | Sep. 30, 2020$ / shares |
Debt Instrument [Line Items] | ||||||||||
Convertible Note | $ | $ 15,932,500 | |||||||||
Default Interest Rate | 15.00% | |||||||||
Warrants | shares | 21,356 | 4,924,447 | ||||||||
Exercise Date | Sep. 30, 2021 | |||||||||
Exercise Price | $ / shares | $ 0.6877 | $ 0.6877 | $ 0.6877 | $ 0.6877 | $ 0.6877 | $ 0.6877 | ||||
Additional warrants | shares | 1,478,752 | |||||||||
Preferred Stock Par value | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | |||||||
Number of convertible debt | item | 4 | |||||||||
Warrants Term | 5 years | |||||||||
Percentage of MTI common shares | 6.00% | |||||||||
Debt Instrument 1 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Convertible Note | $ | $ 1,000,000 | |||||||||
Interest Rate | 15.00% | |||||||||
Default Interest Rate | 20.00% | |||||||||
Maturity Date | Aug. 26, 2021 | |||||||||
Warrants | shares | 226,397 | |||||||||
Exercise Date | Aug. 26, 2025 | |||||||||
Exercise Price | $ / shares | $ 8.84 | |||||||||
Debt Instrument 2 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Convertible Note | $ | $ 200,000 | |||||||||
Interest Rate | 15.00% | |||||||||
Default Interest Rate | 20.00% | |||||||||
Maturity Date | Aug. 26, 2021 | |||||||||
Warrants | shares | 45,279 | |||||||||
Exercise Date | Aug. 26, 2025 | |||||||||
Exercise Price | $ / shares | $ 8.84 | |||||||||
Debt Instrument 3 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Convertible Note | $ | $ 200,000 | |||||||||
Interest Rate | 15.00% | |||||||||
Default Interest Rate | 20.00% | |||||||||
Maturity Date | Aug. 26, 2021 | |||||||||
Warrants | shares | 45,279 | |||||||||
Exercise Date | Aug. 26, 2025 | |||||||||
Exercise Price | $ / shares | $ 8.84 | |||||||||
Debt Instrument 4 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Convertible Note | $ | $ 100,000 | |||||||||
Interest Rate | 15.00% | |||||||||
Default Interest Rate | 20.00% | |||||||||
Maturity Date | Aug. 26, 2021 | |||||||||
Warrants | shares | 22,640 | |||||||||
Exercise Date | Aug. 26, 2025 | |||||||||
Exercise Price | $ / shares | $ 8.84 | |||||||||
Debt Instrument 5 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Convertible Note | $ | $ 105,000 | |||||||||
Interest Rate | 15.00% | |||||||||
Default Interest Rate | 20.00% | |||||||||
Maturity Date | Sep. 25, 2021 | |||||||||
Warrants | shares | 29,715 | |||||||||
Exercise Date | Sep. 25, 2025 | |||||||||
Exercise Price | $ / shares | $ 8.84 | |||||||||
Debt Instrument 6 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Convertible Note | $ | $ 157,500 | |||||||||
Interest Rate | 15.00% | |||||||||
Default Interest Rate | 20.00% | |||||||||
Maturity Date | Sep. 25, 2021 | |||||||||
Warrants | shares | 44,572 | |||||||||
Exercise Date | Sep. 25, 2025 | |||||||||
Exercise Price | $ / shares | $ 8.84 | |||||||||
Debt Instrument 7 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Convertible Note | $ | $ 105,000 | |||||||||
Interest Rate | 15.00% | |||||||||
Default Interest Rate | 20.00% | |||||||||
Maturity Date | Sep. 21, 2021 | |||||||||
Warrants | shares | 29,715 | |||||||||
Exercise Date | Sep. 25, 2025 | |||||||||
Exercise Price | $ / shares | $ 8.84 | |||||||||
Debt Instrument 8 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Convertible Note | $ | $ 660,000 | |||||||||
Interest Rate | 15.00% | |||||||||
Default Interest Rate | 20.00% | |||||||||
Maturity Date | Oct. 12, 2021 | |||||||||
Warrants | shares | 203,757 | |||||||||
Exercise Date | Oct. 12, 2025 | |||||||||
Exercise Price | $ / shares | $ 8.84 | |||||||||
Debt Instrument 9 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Convertible Note | $ | $ 33,000 | |||||||||
Interest Rate | 15.00% | |||||||||
Default Interest Rate | 20.00% | |||||||||
Maturity Date | Oct. 12, 2021 | |||||||||
Warrants | shares | 10,188 | |||||||||
Exercise Date | Oct. 12, 2025 | |||||||||
Exercise Price | $ / shares | $ 8.84 | |||||||||
Debt Instrument 10 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Convertible Note | $ | $ 27,500 | |||||||||
Interest Rate | 15.00% | |||||||||
Default Interest Rate | 20.00% | |||||||||
Maturity Date | Oct. 12, 2021 | |||||||||
Warrants | shares | 8,490 | |||||||||
Exercise Date | Oct. 12, 2025 | |||||||||
Exercise Price | $ / shares | $ 8.84 | |||||||||
Debt Instrument 11 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Convertible Note | $ | $ 660,000 | |||||||||
Interest Rate | 15.00% | |||||||||
Default Interest Rate | 20.00% | |||||||||
Maturity Date | Nov. 9, 2021 | |||||||||
Warrants | shares | 203,757 | |||||||||
Exercise Date | Nov. 9, 2025 | |||||||||
Exercise Price | $ / shares | $ 8.84 | |||||||||
Debt Instrument 12 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Convertible Note | $ | $ 33,000 | |||||||||
Interest Rate | 15.00% | |||||||||
Default Interest Rate | 20.00% | |||||||||
Maturity Date | Nov. 9, 2021 | |||||||||
Warrants | shares | 10,188 | |||||||||
Exercise Date | Nov. 9, 2025 | |||||||||
Exercise Price | $ / shares | $ 8.84 | |||||||||
Debt Instrument 13 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Convertible Note | $ | $ 27,500 | |||||||||
Interest Rate | 15.00% | |||||||||
Default Interest Rate | 20.00% | |||||||||
Maturity Date | Nov. 9, 2021 | |||||||||
Warrants | shares | 8,490 | |||||||||
Exercise Date | Nov. 9, 2025 | |||||||||
Exercise Price | $ / shares | $ 8.84 | |||||||||
Debt Instrument 14 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Convertible Note | $ | $ 660,000 | |||||||||
Interest Rate | 15.00% | |||||||||
Default Interest Rate | 20.00% | |||||||||
Maturity Date | Dec. 7, 2021 | |||||||||
Warrants | shares | 203,756 | |||||||||
Exercise Date | Dec. 7, 2025 | |||||||||
Exercise Price | $ / shares | $ 8.84 | |||||||||
Debt Instrument 15 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Convertible Note | $ | $ 33,000 | |||||||||
Interest Rate | 15.00% | |||||||||
Default Interest Rate | 20.00% | |||||||||
Maturity Date | Dec. 7, 2021 | |||||||||
Warrants | shares | 10,188 | |||||||||
Exercise Date | Dec. 7, 2025 | |||||||||
Exercise Price | $ / shares | $ 8.84 | |||||||||
Debt Instrument 16 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Convertible Note | $ | $ 27,500 | |||||||||
Interest Rate | 15.00% | |||||||||
Default Interest Rate | 20.00% | |||||||||
Maturity Date | Dec. 7, 2021 | |||||||||
Warrants | shares | 8,490 | |||||||||
Exercise Date | Dec. 7, 2025 | |||||||||
Exercise Price | $ / shares | $ 8.84 | |||||||||
Debt Instrument 17 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Convertible Note | $ | $ 157,500 | |||||||||
Interest Rate | 15.00% | |||||||||
Default Interest Rate | 20.00% | |||||||||
Maturity Date | Dec. 15, 2021 | |||||||||
Warrants | shares | 44,572 | |||||||||
Exercise Date | Dec. 15, 2025 | |||||||||
Exercise Price | $ / shares | $ 8.84 | |||||||||
Debt Instrument 18 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Convertible Note | $ | $ 157,500 | |||||||||
Interest Rate | 15.00% | |||||||||
Default Interest Rate | 20.00% | |||||||||
Maturity Date | Dec. 15, 2021 | |||||||||
Warrants | shares | 44,572 | |||||||||
Exercise Date | Dec. 15, 2025 | |||||||||
Exercise Price | $ / shares | $ 8.84 | |||||||||
Debt Instrument 19 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Convertible Note | $ | $ 660,000 | |||||||||
Interest Rate | 15.00% | |||||||||
Maturity Date | Jan. 7, 2022 | |||||||||
Warrants | shares | 203,757 | |||||||||
Exercise Date | Jan. 7, 2026 | |||||||||
Exercise Price | $ / shares | $ 8.84 | |||||||||
Debt Instrument 20 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Convertible Note | $ | $ 33,000 | |||||||||
Interest Rate | 15.00% | |||||||||
Maturity Date | Jan. 7, 2022 | |||||||||
Warrants | shares | 10,188 | |||||||||
Exercise Date | Jan. 7, 2026 | |||||||||
Exercise Price | $ / shares | $ 8.84 | |||||||||
Debt Instrument 21 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Convertible Note | $ | $ 27,500 | |||||||||
Interest Rate | 15.00% | |||||||||
Maturity Date | Jan. 7, 2022 | |||||||||
Warrants | shares | 8,490 | |||||||||
Exercise Date | Jan. 7, 2026 | |||||||||
Exercise Price | $ / shares | $ 8.84 | |||||||||
Debt Instrument 22 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Warrants | shares | 2,038 | |||||||||
Exercise Date | Jan. 7, 2026 | |||||||||
Exercise Price | $ / shares | $ 8.84 | |||||||||
Debt Instrument 23 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Convertible Note | $ | $ 192,500 | |||||||||
Interest Rate | 15.00% | |||||||||
Maturity Date | Jan. 7, 2022 | |||||||||
Warrants | shares | 59,429 | |||||||||
Exercise Date | Jan. 7, 2026 | |||||||||
Exercise Price | $ / shares | $ 8.84 | |||||||||
Debt Instrument 24 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Convertible Note | $ | $ 82,500 | |||||||||
Interest Rate | 15.00% | |||||||||
Maturity Date | Jan. 7, 2022 | |||||||||
Warrants | shares | 25,470 | |||||||||
Exercise Date | Jan. 7, 2026 | |||||||||
Exercise Price | $ / shares | $ 8.84 | |||||||||
Debt Instrument 25 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Convertible Note | $ | $ 192,500 | |||||||||
Interest Rate | 15.00% | |||||||||
Maturity Date | Jan. 7, 2022 | |||||||||
Warrants | shares | 59,429 | |||||||||
Exercise Date | Jan. 7, 2026 | |||||||||
Exercise Price | $ / shares | $ 8.84 | |||||||||
Debt Instrument 26 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Convertible Note | $ | $ 110,000 | |||||||||
Interest Rate | 15.00% | |||||||||
Maturity Date | Jan. 7, 2022 | |||||||||
Warrants | shares | 33,960 | |||||||||
Exercise Date | Jan. 7, 2026 | |||||||||
Exercise Price | $ / shares | $ 8.84 | |||||||||
Debt Instrument 27 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Convertible Note | $ | $ 660,000 | |||||||||
Interest Rate | 15.00% | |||||||||
Maturity Date | Mar. 10, 2022 | |||||||||
Warrants | shares | 203,757 | |||||||||
Exercise Date | Mar. 10, 2026 | |||||||||
Exercise Price | $ / shares | $ 8.84 | |||||||||
Debt Instrument 28 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Convertible Note | $ | $ 33,000 | |||||||||
Interest Rate | 15.00% | |||||||||
Maturity Date | Mar. 10, 2022 | |||||||||
Warrants | shares | 10,188 | |||||||||
Exercise Date | Mar. 10, 2026 | |||||||||
Exercise Price | $ / shares | $ 8.84 | |||||||||
Debt Instrument 29 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Convertible Note | $ | $ 27,500 | |||||||||
Interest Rate | 15.00% | |||||||||
Maturity Date | Mar. 10, 2022 | |||||||||
Warrants | shares | 8,490 | |||||||||
Exercise Date | Mar. 10, 2026 | |||||||||
Exercise Price | $ / shares | $ 8.84 | |||||||||
Debt Instrument 30 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Warrants | shares | 82,326 | |||||||||
Exercise Date | May 7, 2026 | |||||||||
Exercise Price | $ / shares | $ 8.84 | |||||||||
Debt Instrument 31 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Warrants | shares | 33,316 | |||||||||
Exercise Date | May 7, 2026 | |||||||||
Exercise Price | $ / shares | $ 8.84 | |||||||||
Debt Instrument 32 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Warrants | shares | 10,504 | |||||||||
Exercise Date | May 7, 2026 | |||||||||
Exercise Price | $ / shares | $ 8.84 | |||||||||
Debt Instrument 33 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Warrants | shares | 19,167 | |||||||||
Exercise Date | May 7, 2026 | |||||||||
Exercise Price | $ / shares | $ 8.84 | |||||||||
Debt Instrument 34 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Convertible Note | $ | $ 4,400,000 | |||||||||
Interest Rate | 15.00% | |||||||||
Default Interest Rate | 20.00% | |||||||||
Maturity Date | May 16, 2022 | |||||||||
Warrants | shares | 1,358,112 | |||||||||
Exercise Date | May 16, 2026 | |||||||||
Exercise Price | $ / shares | $ 8.84 | |||||||||
Debt Instrument 35 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Convertible Note | $ | $ 2,420,000 | |||||||||
Interest Rate | 15.00% | |||||||||
Default Interest Rate | 20.00% | |||||||||
Maturity Date | Jul. 22, 2022 | |||||||||
Warrants | shares | 746,961 | |||||||||
Exercise Date | Jul. 26, 2022 | |||||||||
Exercise Price | $ / shares | $ 8.84 | |||||||||
Debt Instrument 36 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Convertible Note | $ | $ 1,100,000 | |||||||||
Interest Rate | 15.00% | |||||||||
Default Interest Rate | 20.00% | |||||||||
Maturity Date | Jul. 26, 2022 | |||||||||
Warrants | shares | 339,528 | |||||||||
Exercise Date | Jul. 26, 2026 | |||||||||
Exercise Price | $ / shares | $ 8.84 | |||||||||
Debt Instrument 37 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Convertible Note | $ | $ 1,100,000 | |||||||||
Interest Rate | 15.00% | |||||||||
Default Interest Rate | 20.00% | |||||||||
Maturity Date | Aug. 19, 2022 | |||||||||
Warrants | shares | 339,528 | |||||||||
Exercise Date | Aug. 19, 2026 | |||||||||
Exercise Price | $ / shares | $ 8.84 | |||||||||
Debt Instrument 38 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Convertible Note | $ | $ 550,000 | |||||||||
Interest Rate | 15.00% | |||||||||
Default Interest Rate | 20.00% | |||||||||
Maturity Date | Sep. 3, 2022 | |||||||||
Warrants | shares | 169,764 | |||||||||
Exercise Date | Sep. 3, 2026 | |||||||||
Exercise Price | $ / shares | $ 8.84 |
DEFICIENCY IN STOCKHOLDERS' E_3
DEFICIENCY IN STOCKHOLDERS' EQUITY - Additional Information (Details) | 12 Months Ended | |
Sep. 30, 2021USD ($)Vote$ / sharesshares | Sep. 30, 2020USD ($)$ / sharesshares | |
Class of Stock [Line Items] | ||
Threshold proceeds to be received | $ 50,000,000 | |
Common Stock, shares authorized | shares | 500,000,000 | 500,000,000 |
Common Stock, par value | $ / shares | $ 0.001 | $ 0.001 |
Common Stock, shares issued | shares | 7,048,386 | 5,086,225 |
Common Stock, shares outstanding | shares | 7,048,386 | 5,086,225 |
Number of votes per common share | Vote | 1 | |
Common stock dividends declared or paid | $ 0 | |
Exercisable term of warrants | 5 years | |
Fair value of warrants | $ 8,166,441 | |
Series A Preferred Stock | ||
Class of Stock [Line Items] | ||
Preferred stock dividends declared or paid | $ 0 | $ 0 |
Conversion ratio | 0.01 | |
Series B Preferred Stock | ||
Class of Stock [Line Items] | ||
Preferred stock dividends declared or paid | $ 0 | $ 0 |
Conversion ratio | 1 |
DEFICIENCY IN STOCKHOLDERS' E_4
DEFICIENCY IN STOCKHOLDERS' EQUITY - Summary of Warrant Activity (Details) - $ / shares | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
MAI shares | ||
Warrants outstanding at ending | 4,924,447 | |
Weighted Average Exercise Price | ||
Warrants outstanding at ending | $ 0.6877 | |
Warrants | ||
MAI shares | ||
Warrants outstanding at beginning | 540,905 | 97,308 |
Warrants granted | 4,480,855 | 420,242 |
Warrants expired | (97,308) | |
Warrants outstanding at ending | 4,924,447 | 540,905 |
Weighted Average Exercise Price | ||
Warrants outstanding at beginning | $ 8.84 | $ 8.84 |
Warrants granted | 8.84 | 8.84 |
Warrants expired | 8.84 | |
Warrants outstanding at ending | $ 8.84 | $ 8.84 |
DEFICIENCY IN STOCKHOLDERS' E_5
DEFICIENCY IN STOCKHOLDERS' EQUITY - Schedule of Assumptions Used For Warrants Issued and 0utstanding (Details) - Warrants | Sep. 30, 2021 |
Expected term (in years) | |
Class of Warrant or Right [Line Items] | |
Measurement input | 5 |
Volatility | |
Class of Warrant or Right [Line Items] | |
Measurement input | 63.9 |
Dividend yield | |
Class of Warrant or Right [Line Items] | |
Measurement input | 0 |
Risk-free interest rate | Minimum | |
Class of Warrant or Right [Line Items] | |
Measurement input | 0.34 |
Risk-free interest rate | Maximum | |
Class of Warrant or Right [Line Items] | |
Measurement input | 0.82 |
Common stock price | |
Class of Warrant or Right [Line Items] | |
Measurement input | 5.43 |
MTI SHARE- BASED COMPENSATION_2
MTI SHARE- BASED COMPENSATION (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
MTI SHARE- BASED COMPENSATION | ||
Vesting percentage | 100.00% | |
Requisite service period | 12 months | |
Period over which additional shares may be issued | 2 years | |
Composition of Stock-Based Compensation Expense | ||
Employee MTI share issuance | $ 2,505,091 | $ 1,037,102 |
MTI shares for services | 2,460,529 | 2,929,179 |
MTI Share-Based compensation expense | $ 4,965,620 | $ 3,966,281 |
ACCRUED EXPENSES AND OTHER CU_3
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - USD ($) | Sep. 30, 2021 | Sep. 30, 2020 |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | ||
Accrued expense - other | $ 2,051,696 | $ 16,021,442 |
Accrued payroll | 4,586,057 | 3,771,874 |
Accrued interest | 12,489,012 | 2,358,273 |
Total | 19,126,765 | 22,151,589 |
Delinquent IRS and state tax liabilities | $ 3,904,720 | 3,987,596 |
AirSign advertising contract | ||
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | ||
Advertising obligations | 13,600,000 | |
RedRock Outdoor Advertising, Inc. contract | ||
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | ||
Advertising obligations | $ 1,400,000 |
PROPERTY, EQUIPMENT AND LEASE_3
PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Property, Plant and Equipment [Line Items] | ||
Subtotal | $ 3,765,418 | $ 3,789,873 |
Less: Accumulated Depreciation | (2,583,941) | (2,247,877) |
Property, Equipment and Leasehold Improvements, Net | 1,181,477 | 1,541,996 |
Depreciation | 354,125 | 702,068 |
Building | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | 804,654 | 807,154 |
Furniture and Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | 111,102 | 114,879 |
Vehicles | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | 45,887 | 45,887 |
Computer Hardware and Software | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | 139,742 | 129,967 |
Machinery and Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | 2,597,654 | 2,615,311 |
Leasehold Improvements | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | $ 66,379 | $ 76,675 |
OTHER ASSETS (Details)
OTHER ASSETS (Details) - USD ($) | Sep. 30, 2021 | Sep. 30, 2020 |
OTHER ASSETS | ||
Coda Materials | $ 76,587 | $ 207,000 |
Advance Payments on long-lived assets | 51,806 | |
Notes Receivable | 90,552 | 79,939 |
Show Room Cars | 2,739,995 | 210,483 |
Security Deposits | 186,640 | 212,782 |
Deposit on Property | 1,240,000 | |
Total Other Assets | $ 4,333,774 | $ 762,010 |
OPERATING EXPENSES (Details)
OPERATING EXPENSES (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
OPERATING EXPENSES | ||
Professional Fees | $ 6,991,246 | $ 5,260,142 |
Salaries | 6,091,520 | 2,437,934 |
Depreciation and amortization | 720,805 | 725,796 |
Lease | 1,776,198 | 905,231 |
Settlements and penalties | 1,532,378 | 219,655 |
Employee benefits | 368,563 | 216,349 |
Utilities and office expense | 345,766 | 213,361 |
Advertising and promotions | 413,771 | 156,241 |
Taxes and licenses | 73,527 | 67,607 |
Repairs and maintenance | 244,868 | 55,050 |
Other | 835,299 | 169,775 |
Total General and Administrative Expenses | 19,393,941 | 10,427,141 |
Shares for services | $ 2,460,529 | $ 2,929,179 |
OPERATING EXPENSES - Research a
OPERATING EXPENSES - Research and development (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |
Dec. 31, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Research & Development | |||
Professional fees | $ 3,009,027 | $ 1,667,077 | |
Total | $ 3,009,027 | $ 1,667,077 | |
Thurner, Inc | |||
Research & Development | |||
Total | $ 483,254 | ||
Phiaro, Inc | |||
Research & Development | |||
Total | $ 1,600,000 |
LEASES - Lease assets and liabi
LEASES - Lease assets and liabilities (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Assets: | ||
Operating lease right-of-use assets | $ 2,350,929 | $ 1,729,112 |
Liabilities: | ||
Operating lease liabilities, current | (599,898) | (336,765) |
Operating lease liabilities, non-current | (1,857,894) | (1,482,569) |
Total lease liabilities | $ (2,457,792) | $ (1,819,334) |
Operating leases | 3 years 4 months 2 days | 4 years 6 months 3 days |
Operating leases | 28.00% | 28.00% |
Cash paid for amounts included in the measurement of lease liabilities for the fiscal year ended September 30, 2021, and 2020 | $ 1,057,438 | $ 1,096,054 |
LEASES - Operating lease costs
LEASES - Operating lease costs (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Operating lease costs: | ||
Fixed lease cost | $ 1,185,576 | $ 430,886 |
Variable lease cost | 448,983 | 454,422 |
Short-term lease cost | 401,526 | 101,916 |
Sublease income | (84,473) | (81,993) |
Total operating lease costs | $ 1,951,612 | $ 905,231 |
LEASES - Maturities of operatin
LEASES - Maturities of operating lease liabilities (Details) - USD ($) | Sep. 30, 2021 | Sep. 30, 2020 |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | ||
2022 | $ 1,213,728 | |
2023 | 1,157,693 | |
2024 | 824,287 | |
2025 | 436,155 | |
2026 | 222,787 | |
Total lease payments | 3,854,650 | |
Less: Imputed interest | (1,396,858) | |
Total lease liabilities | $ 2,457,792 | $ 1,819,334 |
LEASES - Additional Information
LEASES - Additional Information (Details) | Jan. 31, 2022USD ($) | Nov. 12, 2021USD ($) | Jul. 26, 2021USD ($) | Jul. 23, 2021 | Apr. 27, 2021aft² | Jul. 31, 2021USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | May 12, 2021USD ($) |
Lessee, Lease, Description [Line Items] | |||||||||
Option to extend | true | ||||||||
Option to terminate | true | ||||||||
Manufacturing plant area | ft² | 127,400 | ||||||||
Area of land | a | 100 | ||||||||
Monthly rent | $ 50,000 | ||||||||
Option to purchase the property | $ 12,000,000 | ||||||||
Escrow deposit | $ 240,000 | ||||||||
Additional lease term | 6 months | ||||||||
Payments for extension of lease term | $ 50,000 | $ 1,000,000 | |||||||
Payments for purchase of plant | $ 12,000,000 | $ 43,893 | $ 270,501 | ||||||
Minimum | |||||||||
Lessee, Lease, Description [Line Items] | |||||||||
Operating lease term | 1 year | ||||||||
Renewal term | 1 year | ||||||||
Maximum | |||||||||
Lessee, Lease, Description [Line Items] | |||||||||
Operating lease term | 3 years | ||||||||
Renewal term | 5 years |
INCOME TAXES - Additional Infor
INCOME TAXES - Additional Information (Details) - USD ($) | Dec. 22, 2017 | Dec. 21, 2017 | Sep. 30, 2021 | Sep. 30, 2020 |
Operating Loss Carryforwards [Line Items] | ||||
Income tax NOL carryforwards | $ 38,676,405 | $ 31,413,378 | ||
Federal statutory tax rate | 21.00% | 35.00% | 21.00% | |
Measurement period of tax reform | 1 year | |||
Unrecognized tax benefits | $ 15,200,000 | |||
Federal | ||||
Operating Loss Carryforwards [Line Items] | ||||
Income tax NOL carryforwards | 192,657,535 | 193,000,000 | ||
California | ||||
Operating Loss Carryforwards [Line Items] | ||||
Income tax NOL carryforwards | $ 191,722,566 | $ 192,000,000 |
INCOME TAXES - Summary of Incom
INCOME TAXES - Summary of Income Tax NOL carryforwards (Details) - USD ($) | Sep. 30, 2021 | Sep. 30, 2020 |
Operating Loss Carryforwards [Line Items] | ||
Net Operating loss carryforwards | $ 38,676,405 | $ 31,413,378 |
Federal | ||
Operating Loss Carryforwards [Line Items] | ||
Net Operating loss carryforwards | 192,657,535 | 193,000,000 |
Federal | 2034-2037 | ||
Operating Loss Carryforwards [Line Items] | ||
Net Operating loss carryforwards | 29,838,716 | |
Federal | Indefinite | ||
Operating Loss Carryforwards [Line Items] | ||
Net Operating loss carryforwards | 162,818,819 | |
California | ||
Operating Loss Carryforwards [Line Items] | ||
Net Operating loss carryforwards | 191,722,566 | $ 192,000,000 |
California | 2034-2040 | ||
Operating Loss Carryforwards [Line Items] | ||
Net Operating loss carryforwards | $ 191,722,566 |
INCOME TAXES - Summary of Recon
INCOME TAXES - Summary of Reconciliation of Our Effective Tax Rate To Statutory Federal Tax Rate (Details) - USD ($) | Dec. 22, 2017 | Dec. 21, 2017 | Sep. 30, 2021 |
Effective Income Tax Rate Reconciliation, Amount | |||
Income tax benefit at statutory rate | $ (9,247,200) | ||
State income taxes | 800 | ||
Permanent Differences | 158,166 | ||
Valuation Allowance | 9,091,163 | ||
Other | (2,129) | ||
Total (benefit) provision for income taxes | $ 800 | ||
Effective Income Tax Rate Reconciliation, Percent | |||
Income tax benefit at statutory rate | 21.00% | 35.00% | 21.00% |
State income taxes | 0.00% | ||
Permanent Differences | (0.36%) | ||
Valuation Allowance | (20.65%) | ||
Other | 0.00% | ||
Total (benefit) provision for income taxes | 0.00% |
INCOME TAXES - Summary of Signi
INCOME TAXES - Summary of Significant Component of Net Deferred Tax Assets (Details) - USD ($) | Sep. 30, 2021 | Sep. 30, 2020 |
Deferred tax assets: | ||
Net Operating loss carryforwards | $ 38,676,405 | $ 31,413,378 |
Charitable Contributions | 894 | 1,176 |
Accrued Expenses | 315,555 | 104,164 |
Impairment Other | 83,845 | |
Other Assets | 364,419 | 261,842 |
163(j) Limitation | 14,491,332 | 4,178,291 |
Total gross deferred tax assets | 53,848,604 | 36,042,696 |
Less valuation allowance | (53,416,875) | (35,747,087) |
Total net deferred tax assets | 431,729 | 295,609 |
Deferred tax liabilities: | ||
Intangibles | (146,639) | (157,641) |
Fixed Assets | (284,922) | (137,632) |
Other | (168) | (336) |
Total deferred tax liabilities | (431,729) | $ (295,609) |
Net deferred tax assets | $ 0 |
CONTINGENCIES AND CLAIMS - Cons
CONTINGENCIES AND CLAIMS - Consulting Agreement (Details) - Preferred Management Partners, Inc. | Sep. 23, 2021shares |
CONTINGENCIES AND CLAIMS | |
Consulting agreement compensation | 750,000 |
Consulting agreement success fee | 750,000 |
CONTINGENCIES AND CLAIMS - Debt
CONTINGENCIES AND CLAIMS - Debt Financing (Details) - USD ($) | Nov. 05, 2021 | Oct. 05, 2021 | Nov. 30, 2021 | Nov. 04, 2021 | Sep. 03, 2021 |
Line of Credit Facility [Line Items] | |||||
Face amount of debt | $ 4,510,000 | ||||
Convertible Debt | |||||
Line of Credit Facility [Line Items] | |||||
Maximum financing amount | $ 6,600,000 | ||||
Face amount of debt | $ 6,050,000 | $ 550,000 | |||
Warrants issued (in shares) | 1,867,423 | 169,764 | |||
Proceeds from financing | $ 5,440,000 | ||||
OID (as a percent) | 10.00% | ||||
OID amount | $ 610,000 | ||||
Convertible Debt | Mullen Technologies, Inc | |||||
Line of Credit Facility [Line Items] | |||||
Warrants issued (in shares) | 23,988,500 | 2,180,750 |
CONTINGENCIES AND CLAIMS - Equi
CONTINGENCIES AND CLAIMS - Equity Financing (Details) - USD ($) | Nov. 04, 2021 | May 07, 2021 | Sep. 30, 2021 | Sep. 03, 2021 | Aug. 19, 2021 | Jul. 26, 2021 | Jul. 22, 2021 | May 26, 2021 |
Class of Stock [Line Items] | ||||||||
Warrants exercise price | $ 0.6877 | $ 0.6877 | $ 0.6877 | $ 0.6877 | $ 0.6877 | $ 0.6877 | ||
Exercisable term of warrants | 5 years | |||||||
Acuitas Group Holdings | ||||||||
Class of Stock [Line Items] | ||||||||
Purchase agreement amount | $ 20,000,000 | |||||||
Price per share in purchase agreement (USD per share) | $ 8.84 | |||||||
Proceeds from issuance of shares | $ 20,000,000 | |||||||
Warrants issued (in shares) | 5,915,639 | |||||||
Warrants exercise price | $ 8.83 | |||||||
Exercisable term of warrants | 5 years |
CONTINGENCIES AND CLAIMS - Inve
CONTINGENCIES AND CLAIMS - Investment Banking Services Agreement (Details) - USD ($) | 3 Months Ended | |||||
Sep. 30, 2021 | Sep. 03, 2021 | Aug. 19, 2021 | Jul. 26, 2021 | Jul. 22, 2021 | May 26, 2021 | |
Subsidiary, Sale of Stock [Line Items] | ||||||
Warrants exercise price | $ 0.6877 | $ 0.6877 | $ 0.6877 | $ 0.6877 | $ 0.6877 | $ 0.6877 |
Exercisable term of warrants | 5 years | |||||
Investment Banking Services Agreement | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Maximum offerings | $ 3,000,000 | |||||
Financing fee (as percent) | 6.00% | |||||
Proceeds from issuance of shares | $ 750,000 | |||||
Warrants exercise price | $ 8.84 | |||||
Exercisable term of warrants | 5 years |
CONTINGENCIES AND CLAIMS - Post
CONTINGENCIES AND CLAIMS - Post-merger shares for equity capitalization (Details) - USD ($) | Sep. 08, 2021 | Jul. 23, 2021 | Sep. 30, 2021 | Sep. 03, 2021 | Aug. 19, 2021 | Jul. 26, 2021 | Jul. 22, 2021 | May 26, 2021 |
Schedule of Capitalization, Equity [Line Items] | ||||||||
Series C Preferred Stock | $ 750,000 | |||||||
Warrants | 21,356 | 4,924,447 | ||||||
Additional Warrant Issued | 3,056 | |||||||
Maturity Date | Sep. 30, 2021 | |||||||
Exercise Price | $ 0.6877 | $ 0.6877 | $ 0.6877 | $ 0.6877 | $ 0.6877 | $ 0.6877 | ||
Stock 75000 And Warrant 1983 | ||||||||
Schedule of Capitalization, Equity [Line Items] | ||||||||
Series C Preferred Stock | $ 75,000 | |||||||
Warrants | 1,983 | |||||||
Maturity Date | Jul. 23, 2026 | |||||||
Exercise Price | $ 8.84 | |||||||
Stock 50000 And Warrant 1322 | ||||||||
Schedule of Capitalization, Equity [Line Items] | ||||||||
Series C Preferred Stock | $ 50,000 | |||||||
Warrants | 1,322 | |||||||
Maturity Date | Jul. 23, 2026 | |||||||
Exercise Price | $ 8.84 | |||||||
Warrant 1528 | ||||||||
Schedule of Capitalization, Equity [Line Items] | ||||||||
Warrants | 1,528 | |||||||
Additional Warrant Issued | 3,056 | |||||||
Maturity Date | Jul. 23, 2026 | |||||||
Exercise Price | $ 8.84 | |||||||
Stock 175000 And Warrant 4626 | ||||||||
Schedule of Capitalization, Equity [Line Items] | ||||||||
Series C Preferred Stock | $ 175,000 | |||||||
Warrants | 4,626 | |||||||
Maturity Date | Sep. 8, 2026 | |||||||
Exercise Price | $ 8.84 | |||||||
Stock 100000 And Warrant 2644 | ||||||||
Schedule of Capitalization, Equity [Line Items] | ||||||||
Series C Preferred Stock | $ 100,000 | $ 100,000 | ||||||
Warrants | 2,644 | 2,644 | ||||||
Maturity Date | Sep. 8, 2026 | Jul. 23, 2026 | ||||||
Exercise Price | $ 8.84 | $ 8.84 |
CONTINGENCIES AND CLAIMS - Draw
CONTINGENCIES AND CLAIMS - Drawbridge Acknowledgement (Details) | Nov. 15, 2021USD ($) |
Drawbridge | |
CONTINGENCIES AND CLAIMS | |
Payments applied to outstanding principal balance | $ 10,000,000 |
CONTINGENCIES AND CLAIMS - Inte
CONTINGENCIES AND CLAIMS - International Business Machines (Details) - Lawsuit with IBM - USD ($) $ in Millions | Dec. 02, 2021 | Sep. 30, 2017 |
CONTINGENCIES AND CLAIMS | ||
Provision for legal liability | $ 4.5 | |
Amount of judgment | $ 5.6 |
CONTINGENCIES AND CLAIMS - Fede
CONTINGENCIES AND CLAIMS - Federal and State Tax Liabilities (Details) - USD ($) | Apr. 28, 2021 | Sep. 30, 2021 |
Payroll Tax Liability | ||
CONTINGENCIES AND CLAIMS | ||
Liability associated with past due amounts | $ 3,800,000 | |
EDD | ||
CONTINGENCIES AND CLAIMS | ||
Amount of monthly payments | $ 10,000 | |
Aggregate liability, settlement amount | $ 388,352 |
CONTINGENCIES AND CLAIMS - In_2
CONTINGENCIES AND CLAIMS - Investment Banking Services Agreement (Details) - Investment Banking Services Agreement. | May 05, 2021USD ($) |
CONTINGENCIES AND CLAIMS | |
Amount of retainer for services | $ 50,000 |
Threshold percentage of gross proceeds of the public offering | 6.00% |
Threshold amount of gross proceeds from public offering | $ 3,000,000 |
CONTINGENCIES AND CLAIMS - Ling
CONTINGENCIES AND CLAIMS - Linghang Boao Group, LTD (Details) - Strategic Cooperation Agreement | Dec. 03, 2019USD ($) | Nov. 30, 2019USD ($)Milestone | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($) |
CONTINGENCIES AND CLAIMS | ||||
Term of Agreement | 3 years | |||
Total commitment amount | $ 2,196,000 | |||
Payment of installment amount | $ 390,000 | |||
Loss on contract | $ 390,000 | |||
Accrual for remaining milestone payments | $ 0 | |||
Minimum | ||||
CONTINGENCIES AND CLAIMS | ||||
Driving range distance (in miles) | Milestone | 480 | |||
Maximum | ||||
CONTINGENCIES AND CLAIMS | ||||
Driving range distance (in miles) | Milestone | 720 |
CONTINGENCIES AND CLAIMS - ASC
CONTINGENCIES AND CLAIMS - ASC GEM Equity Line Financing (Details) - Equity Line Financing Agreement | Jan. 04, 2021USD ($) |
CONTINGENCIES AND CLAIMS | |
Aggregate value of common stock to be sold under the agreement | $ 350,000,000 |
Additional value of common stock which may be sold under the agreement | $ 150,000,000 |
Commitment fee, percentage of aggregate limit | 2.00% |
Agreement maturity period | 36 months |
Warrant obligation, as percentage of common shares outstanding | 6.60% |
CONTINGENCIES AND CLAIMS (Detai
CONTINGENCIES AND CLAIMS (Details) - USD ($) | Apr. 13, 2021 | Mar. 31, 2021 | Sep. 30, 2021 | Sep. 30, 2020 |
CONTINGENCIES AND CLAIMS | ||||
Litigation Liability | $ 0 | |||
Common Stock; $0.001 par value; 500,000,000 shares authorized; 7,048,386 and 5,086,225 issued and outstanding at September 30, 2021 and 2020 respectively. | $ 7,048 | $ 5,086 | ||
Odyssey Group Settlement | ||||
CONTINGENCIES AND CLAIMS | ||||
Litigation owed | $ 503,637 | |||
Litigation settlement payable | $ 50,000 | |||
Litigation settlement payable in common stock | 500,000 | |||
Litigation settlement payable in cash or common stock | $ 10,000 | |||
Litigation settlement duration term | 30 days | |||
Common stock issued for litigation settlement | 500,000 | |||
Common Stock; $0.001 par value; 500,000,000 shares authorized; 7,048,386 and 5,086,225 issued and outstanding at September 30, 2021 and 2020 respectively. | $ 1,250,000 | |||
Litigation settlement paid in cash | $ 50,000 |
RELATED PARTY TRANSACTIONS - Dr
RELATED PARTY TRANSACTIONS - Drawbridge Related Transactions (Details) - Drawbridge - USD ($) | Sep. 30, 2021 | Sep. 30, 2020 |
Related Party Transaction [Line Items] | ||
Loan Principal | $ 23,831,554 | $ 23,831,554 |
Number of Shares | 6,947,929 | 6,947,929 |
Fair value of Shares | $ 76,728,316 | $ 76,728,316 |
Default interest rate | 28.00% | |
Accrued interest | $ 9,465,094 | |
Various Notes | ||
Related Party Transaction [Line Items] | ||
Loan Principal | $ 23,831,554 | $ 23,831,554 |
Common and preferred shares | Common Stock | ||
Related Party Transaction [Line Items] | ||
Number of Shares | 1,378,274 | 1,378,274 |
Fair value of Shares | $ 14,730,560 | $ 14,730,560 |
Common and preferred shares | Series A Preferred Stock | ||
Related Party Transaction [Line Items] | ||
Number of Shares | 2,335 | 2,335 |
Fair value of Shares | $ 2,496,000 | $ 2,496,000 |
Common and preferred shares | Series B Preferred Stock | ||
Related Party Transaction [Line Items] | ||
Number of Shares | 5,567,319 | 5,567,319 |
Fair value of Shares | $ 59,501,756 | $ 59,501,756 |
RELATED PARTY TRANSACTIONS - Ch
RELATED PARTY TRANSACTIONS - Chief Executive Officer Loans to MTI (Details) - USD ($) | Sep. 30, 2021 | Sep. 30, 2020 |
Chief Executive Officer [Member] | ||
Related Party Transaction [Line Items] | ||
Outstanding balances for loans to related parties | $ 479,914 | $ 236,565 |
RELATED PARTY TRANSACTIONS - Wi
RELATED PARTY TRANSACTIONS - William Miltner (Details) | 12 Months Ended |
Sep. 30, 2021USD ($) | |
RELATED PARTY TRANSACTIONS | |
Amount paid for legal services | $ 901,398 |
Net billings | $ 890,484 |
RELATED PARTY TRANSACTIONS - Eq
RELATED PARTY TRANSACTIONS - Equity Warrants (EXCHANGE AGREEMENT and EQUITY WARRANTS) - (Details) - USD ($) | Sep. 30, 2021 | May 26, 2021 |
RELATED PARTY TRANSACTIONS | ||
Warrants, fixed and determinable price per common share | $ 8.84 | |
Fair value of the MAI warrants | $ 13,700,000 | $ 24,358,875 |
SUBSEQUENT EVENTS - Exchange Ag
SUBSEQUENT EVENTS - Exchange Agreement (Convertible Debt to Equity Conversion) - (Details) - USD ($) | Oct. 25, 2021 | May 07, 2021 | Sep. 30, 2021 | Sep. 30, 2020 |
Subsequent Event [Line Items] | ||||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | $ 0.001 | |
Threshold expiry period for right to purchase additional preferred stock from merger closing date | 12 months | |||
Subsequent event | Mullen Technologies, Inc | Series C Preferred Stock | ||||
Subsequent Event [Line Items] | ||||
Debt Securities | $ 1,100,000 | |||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | |||
Threshold expiry period for right to purchase additional preferred stock from merger closing date | 12 months |
SUBSEQUENT EVENTS - Assignment
SUBSEQUENT EVENTS - Assignment and Assumption of Rights (Details) - USD ($) | Oct. 25, 2021 | Nov. 04, 2021 |
Subsequent Event [Line Items] | ||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 1,478,752 | |
Subsequent event | TDR Capital | Agreement of Assignment and Assumption of Rights | ||
Subsequent Event [Line Items] | ||
Convertible Debt to be Issued | $ 6,600,000 | |
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 2,037,164 | |
Aggregate Original Amount Of Debt Assigned | $ 3,300,000 | |
Class of Warrant or Right, Number of Securities Called by Warrants or Rights Assigned | 1,201,521 | |
Aggregate purchase price | $ 3,000,000 |
SUBSEQUENT EVENTS - Convertible
SUBSEQUENT EVENTS - Convertible Debt Issuances and Warrants (Details) - USD ($) | Nov. 04, 2021 | Sep. 30, 2021 | Sep. 03, 2021 | Aug. 19, 2021 | Jul. 26, 2021 | Jul. 22, 2021 | May 26, 2021 | May 07, 2021 | Sep. 30, 2020 |
Subsequent Event [Line Items] | |||||||||
Face amount of debt | $ 4,510,000 | ||||||||
Original issue discount | $ 8,060,555 | $ 660,000 | $ 3,726,816 | $ 1,401,062 | |||||
Interest rate (as a percent) | 15.00% | ||||||||
Warrants to acquire shares of common stock | 1,478,752 | ||||||||
Warrants exercise price | $ 0.6877 | $ 0.6877 | $ 0.6877 | $ 0.6877 | $ 0.6877 | $ 0.6877 | |||
Exercisable term of warrants | 5 years | ||||||||
Convertible Debt | |||||||||
Subsequent Event [Line Items] | |||||||||
Original issue discount | $ 8,060,555 | ||||||||
Interest rate (as a percent) | 15.00% | ||||||||
Maturity term | 1 year | ||||||||
Warrants to acquire shares of common stock | 1,866,665 | ||||||||
Subsequent event | Convertible Debt | JADR Consulting Group PTY Limited [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Face amount of debt | $ 1,100,000 | ||||||||
Original issue discount (as a percent) | 10.00% | ||||||||
Original issue discount | $ 100,000 | ||||||||
Interest rate (as a percent) | 15.00% | ||||||||
Maturity term | 1 year | ||||||||
Warrants to acquire shares of common stock | 417,375 | ||||||||
Warrants exercise price | $ 8.84 | ||||||||
Exercisable term of warrants | 5 years | ||||||||
Ownership cap in shares of common stock outstanding, after giving effect to the issuance of common stock issuable upon exercise of the warrants | 9.90% | ||||||||
Subsequent event | Convertible Debt | Michael Friedlander | |||||||||
Subsequent Event [Line Items] | |||||||||
Face amount of debt | $ 110,000 | ||||||||
Original issue discount (as a percent) | 10.00% | ||||||||
Original issue discount | $ 10,000 | ||||||||
Interest rate (as a percent) | 15.00% | ||||||||
Maturity term | 1 year | ||||||||
Warrants to acquire shares of common stock | 30,872 | ||||||||
Warrants exercise price | $ 8.84 | ||||||||
Exercisable term of warrants | 5 years | ||||||||
Ownership cap in shares of common stock outstanding, after giving effect to the issuance of common stock issuable upon exercise of the warrants | 9.90% |
SUBSEQUENT EVENTS - Effect to t
SUBSEQUENT EVENTS - Effect to the Issuance of common stock issuable upon exercise of the warrants (Details) - USD ($) | Nov. 04, 2021 | Sep. 30, 2021 | Sep. 03, 2021 | Aug. 19, 2021 | Jul. 26, 2021 | Jul. 22, 2021 | May 26, 2021 |
Subsequent Event [Line Items] | |||||||
Convertible note principal amount | $ 4,510,000 | ||||||
Convertible note, interest rate | 15.00% | ||||||
Warrants to acquire shares of common stock | 1,478,752 | ||||||
Warrants exercise price | $ 0.6877 | $ 0.6877 | $ 0.6877 | $ 0.6877 | $ 0.6877 | $ 0.6877 | |
Additional warrants one | |||||||
Subsequent Event [Line Items] | |||||||
Warrants to acquire shares of common stock | 144,016 | ||||||
Convertible note one | Warrants one | |||||||
Subsequent Event [Line Items] | |||||||
Convertible note principal amount | $ 550,000 | ||||||
Convertible note, interest rate | 15.00% | ||||||
Convertible note, default interest rate | 20.00% | ||||||
Warrants to acquire shares of common stock | 208,687 | ||||||
Warrants exercise price | $ 8.84 | ||||||
Convertible note one | Additional warrants one | |||||||
Subsequent Event [Line Items] | |||||||
Warrants to acquire shares of common stock | 27,246 | ||||||
Convertible note one | Additional warrants two | |||||||
Subsequent Event [Line Items] | |||||||
Warrants to acquire shares of common stock | 116,770 | ||||||
Warrants exercise price | $ 8.84 | ||||||
Convertible note two | Warrants two | |||||||
Subsequent Event [Line Items] | |||||||
Convertible note principal amount | $ 1,100,000 | ||||||
Convertible note, interest rate | 15.00% | ||||||
Convertible note, default interest rate | 20.00% | ||||||
Warrants to acquire shares of common stock | 417,375 | ||||||
Warrants exercise price | $ 8.84 | ||||||
Convertible note three | Warrants three | |||||||
Subsequent Event [Line Items] | |||||||
Convertible note principal amount | $ 2,750,000 | ||||||
Convertible note, interest rate | 15.00% | ||||||
Convertible note, default interest rate | 20.00% | ||||||
Warrants to acquire shares of common stock | 848,818 | ||||||
Warrants exercise price | $ 8.84 | ||||||
Convertible note four | Warrants four | |||||||
Subsequent Event [Line Items] | |||||||
Convertible note principal amount | $ 110,000 | ||||||
Convertible note, interest rate | 15.00% | ||||||
Convertible note, default interest rate | 20.00% | ||||||
Warrants to acquire shares of common stock | 30,872 | ||||||
Warrants exercise price | $ 8.84 |
SUBSEQUENT EVENTS - Common stoc
SUBSEQUENT EVENTS - Common stock purchase (Details) - Esousa Holdings, LLC | Sep. 01, 2021USD ($) |
Subsequent Event [Line Items] | |
Aggregate commitment amount to purchase common shares | $ 30,000,000 |
Percentage Of 2,500,000 Used To Calculate Number Of Shares | 125.00% |
Value By Which 125% Is Multiplied To Calculate Number Of Shares | $ 2,500,000 |
SUBSEQUENT EVENTS - Note Receiv
SUBSEQUENT EVENTS - Note Receivable Transaction (Details) | Oct. 08, 2021USD ($)item$ / shares | Sep. 30, 2021USD ($)$ / shares | Sep. 03, 2021$ / shares | Aug. 19, 2021$ / shares | Jul. 26, 2021$ / shares | Jul. 22, 2021$ / shares | May 26, 2021$ / shares | Sep. 30, 2020USD ($) |
Subsequent Event [Line Items] | ||||||||
Notes Receivable | $ 90,552 | $ 79,939 | ||||||
Warrants exercise price | $ / shares | $ 0.6877 | $ 0.6877 | $ 0.6877 | $ 0.6877 | $ 0.6877 | $ 0.6877 | ||
Subsequent event | CEO cast | ||||||||
Subsequent Event [Line Items] | ||||||||
Value of Warrants to Acquire Shares of Common Stock | $ 15,000,000 | |||||||
Notes Receivable | 15,000,000 | |||||||
Interest amount | $ 0 | |||||||
Number of equal monthly installments | item | 6 | |||||||
Warrants exercise price | $ / shares | $ 0.001 | |||||||
Percentage Of 2,500,000 Used To Calculate Number Of Shares | 125.00% | |||||||
Value By Which 125% Is Multiplied To Calculate Number Of Shares | $ 2,500,000 |
SUBSEQUENT EVENTS - Drawbridge
SUBSEQUENT EVENTS - Drawbridge Acknowledgement, Waiver and Consent (Details) | Oct. 08, 2021USD ($) |
Subsequent event | Drawbridge | |
Subsequent Event [Line Items] | |
Repayments of Debt | $ 10,000,000 |
SUBSEQUENT EVENTS - Release of
SUBSEQUENT EVENTS - Release of Liability, Debt Paydowns and Payoffs (Details) | Dec. 27, 2021USD ($) | Nov. 11, 2021USD ($) | Mar. 29, 2019USD ($) | Nov. 23, 2018USD ($) | Nov. 29, 2021USD ($) | Nov. 09, 2021item | Nov. 04, 2021USD ($) |
Subsequent Event [Line Items] | |||||||
Face amount of debt | $ 4,510,000 | ||||||
Loan form elegant funding, loan dated May 23, 2018 | |||||||
Subsequent Event [Line Items] | |||||||
Repayments of Debt | $ 458,000 | ||||||
Face amount of debt | 438,000 | ||||||
Current principal balance | $ 604,770 | ||||||
Loan form elegant funding, loan dated September 29, 2018 | |||||||
Subsequent Event [Line Items] | |||||||
Repayments of Debt | $ 185,000 | ||||||
Face amount of debt | 185,000 | ||||||
Current principal balance | $ 222,426 | ||||||
Subsequent event | |||||||
Subsequent Event [Line Items] | |||||||
Number of Qiantu Dragonfly K50 EV Car Received | item | 1 | ||||||
Subsequent event | CBSG debt | |||||||
Subsequent Event [Line Items] | |||||||
Repayments of Debt | $ 78,904 | ||||||
Subsequent event | Loan from the NY Group | |||||||
Subsequent Event [Line Items] | |||||||
Face amount of debt | $ 140,000 | ||||||
Subsequent event | Loan from MABM Holdings | |||||||
Subsequent Event [Line Items] | |||||||
Current principal balance | $ 25,000 | ||||||
Subsequent event | Loan from EXIM USA | |||||||
Subsequent Event [Line Items] | |||||||
Repayments of Debt | $ 1,750,000 | ||||||
Subsequent event | Loan form Elegant Funding | |||||||
Subsequent Event [Line Items] | |||||||
Current principal balance | $ 700,000 |
SUBSEQUENT EVENTS - Tunica, MS
SUBSEQUENT EVENTS - Tunica, MS Production Facility - Purchase (Details) | Nov. 12, 2021USD ($)a | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Apr. 27, 2021a |
Subsequent Event [Line Items] | ||||
Payments for purchase of plant | $ 12,000,000 | $ 43,893 | $ 270,501 | |
Square Feet of EV Manufacturing Facility | 127,400 | |||
Area of Land | a | 100 | |||
Subsequent event | ||||
Subsequent Event [Line Items] | ||||
Payments for purchase of plant | $ 12,000,000 | |||
Square Feet Of Manufacturing Space | 124,000 | |||
Area of Land | a | 100 |
SUBSEQUENT EVENTS - Show Car De
SUBSEQUENT EVENTS - Show Car Development (Details) - Subsequent event $ in Millions | Nov. 17, 2021USD ($)item |
Subsequent Event [Line Items] | |
Number of variants of the FIVE model on display | item | 2 |
Cost of the two cars | $ | $ 4.1 |
SUBSEQUENT EVENTS - Employment
SUBSEQUENT EVENTS - Employment agreements (Details) - Employment agreement - USD ($) | Nov. 15, 2021 | Oct. 25, 2021 | Sep. 14, 2021 | Jul. 01, 2021 |
Jillian Green, the Vice President of Business and Legal Affairs | ||||
Subsequent Event [Line Items] | ||||
Annual salary under agreement | $ 300,000 | |||
Number of shares per year given under agreement | 30,000 | |||
Jerry Alban, the Chief Operating Officer | ||||
Subsequent Event [Line Items] | ||||
Annual salary under agreement | $ 350,000 | |||
Number of shares per year given under agreement | 300,000 | |||
Subsequent event | Shawn Hughes, the President of OEM Franchising | ||||
Subsequent Event [Line Items] | ||||
Annual salary under agreement | $ 240,000 | |||
Number of shares per year given under agreement | 100,000 | |||
Subsequent event | Kerri Sadler, the Chief Financial Officer | ||||
Subsequent Event [Line Items] | ||||
Annual salary under agreement | $ 350,000 | |||
Number of shares per year given under agreement | 300,000 |
SUBSEQUENT EVENTS - Consulting
SUBSEQUENT EVENTS - Consulting agreements (Details) - Subsequent event - Consulting agreements - Mary Winters, Corporate Secretary and Director | Oct. 26, 2021USD ($) |
Subsequent Event [Line Items] | |
Annual salary under agreement | $ 60,000 |
Monthly salary under agreement | $ 5,000 |
SUBSEQUENT EVENTS - Director Fe
SUBSEQUENT EVENTS - Director Fees (Details) - Non-employee director - 2021 Plan | 1 Months Ended |
Aug. 31, 2021USD ($) | |
Subsequent Event [Line Items] | |
Fees as cash retainer for board service | $ 25,000 |
Additional annual cash retainers for each member of compensation committee or nominating and governance committee | 2,000 |
Additional annual cash retainers for the chairman of compensation committee or nominating and governance committee | 5,000 |
Additional annual cash retainers for each member of audit committee | 8,000 |
Additional annual cash retainers for the chairman of audit committee | 45,000 |
Value of stock option to purchase shares of common stock | $ 75,000 |
Vesting period | 1 year |
Threshold number of in-person meetings to be entitled to additional compensation | 4 |
Threshold number of telephonic meetings to be entitled to additional compensation | 12 |
Additional compensation in the event directors are required to attend additional telephonic meeting beyond the 12 telephonic meeting thresholds | $ 500 |
Additional compensation in the event directors are required to attend additional in-person meeting beyond the four in-person meeting threshold | $ 1,000 |