Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Dec. 31, 2021 | Feb. 11, 2022 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Dec. 31, 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 $0.001 per share | |
Trading Symbol | MULN | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 34,942,304 | |
Entity Central Index Key | 0001499961 | |
Current Fiscal Year End Date | --09-30 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2021 | Sep. 30, 2021 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 360 | $ 42,174 |
Restricted Cash | 61,100 | |
Materials and supplies | 55,753 | 55,753 |
Deferred advertising | 261,550 | |
Prepaid Expenses | 6,526,737 | 6,201,247 |
Other current assets | 1,738,256 | 250,331 |
Notes Receivable | 15,090,552 | 90,552 |
TOTAL CURRENT ASSETS | 23,472,760 | 6,901,607 |
Property, equipment and leasehold improvements, net | 13,103,704 | 1,181,477 |
Intangibles assets, net | 2,276,943 | 2,495,259 |
Right-of-use assets | 2,213,991 | 2,350,929 |
Other assets | 4,345,893 | 4,243,222 |
TOTAL ASSETS | 45,413,291 | 17,172,494 |
CURRENT LIABILITIES | ||
Accounts payable | 4,228,527 | 5,206,310 |
Accrued expenses and other current liabilities | 18,272,697 | 19,126,765 |
Liability to issue shares | 6,322,500 | 7,027,500 |
Lease liabilities, current portion | 623,343 | 599,898 |
Notes payable, current portion | 18,905,021 | 39,200,970 |
TOTAL CURRENT LIABILITIES | 48,352,088 | 71,161,443 |
Notes payable, net of current portion | 238,259 | 247,612 |
Lease liabilities, net of current portion | 1,697,222 | 1,857,894 |
Other liabilities | 5,617,192 | 5,617,192 |
TOTAL LIABILITIES | 55,904,761 | 78,884,141 |
Commitments and Contingencies (Note 19) | ||
DEFICIENCY IN STOCKHOLDERS' EQUITY | ||
Preferred Stock; $0.001 par value; 58,000,000 shares authorized; 10,760,585 and 5,667,683 shares issued and outstanding at December 31, 2021 and September 30, 2021 respectively. | 10,760 | 5,668 |
Common Stock; $0.001 par value; 500,000,000 shares authorized; 23,936,162 and 7,048,386 issued and outstanding at December 31, 2021 and September 30, 2021 respectively. | 23,935 | 7,048 |
Additional Paid-in Capital | 176,312,422 | 88,650,286 |
Accumulated Deficit | (186,838,587) | (150,374,649) |
TOTAL DEFICIENCY IN STOCKHOLDERS' EQUITY | (10,491,470) | (61,711,647) |
TOTAL LIABILITIES AND DEFICIENCY IN STOCKHOLDERS' EQUITY | $ 45,413,291 | $ 17,172,494 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2021 | Sep. 30, 2021 |
CONDENSED 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 | 10,760,585 | 5,667,682 |
Preferred Stock, Shares Outstanding | 10,760,585 | 5,667,682 |
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 | 23,936,162 | 7,048,387 |
Common Stock, Shares, Outstanding | 23,936,162 | 7,048,387 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
OPERATING EXPENSES | ||
General and administrative | $ 12,901,084 | $ 2,952,678 |
Research and development | 1,157,323 | 518,023 |
Total Operating Expense | 14,058,407 | 3,470,701 |
Loss from Operations | (14,058,407) | (3,470,701) |
Interest expense | (22,438,945) | (2,406,330) |
Loss on debt settlement | (41,096) | |
Gain on extinguishment of indebtedness, net | 74,509 | 880,581 |
Net Loss | $ (36,463,938) | $ (4,996,450) |
Net Loss per Share, Basic | $ (2.09) | $ (0.98) |
Net Loss per Share, Diluted | $ (2.09) | $ (0.98) |
Weighted average shares outstanding, basic | 17,471,173 | 5,099,218 |
Weighted average shares outstanding, diluted | 17,471,173 | 5,099,218 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF DEFICENCY IN STOCKHOLDERS EQUITY - USD ($) | Preferred StockSeries A Preferred Stock | Preferred StockSeries B Preferred Stock | Preferred StockSeries C Preferred Stock | Common Stock | Paid-in Capital | Accumulated Deficit | Total |
Balance, beginning at Sep. 30, 2020 | $ 116 | $ 5,568 | $ 5,086 | $ 63,619,280 | $ (106,134,069) | $ (42,504,019) | |
Balance, beginning (in shares) at Sep. 30, 2020 | 116,789 | 5,567,319 | 5,086,225 | ||||
Warrant issuances | 2,092,337 | 2,092,337 | |||||
Beneficial conversion feature of convertible debt | 172,663 | 172,663 | |||||
Stock-based compensation | $ 39 | 1,241,366 | 1,241,405 | ||||
Stock-based compensation (in shares) | 38,561 | ||||||
Net loss | (4,996,450) | (4,996,450) | |||||
Balance, ending at Dec. 31, 2020 | $ 116 | $ 5,568 | $ 5,125 | 67,125,646 | (111,130,518) | (43,994,064) | |
Balance, ending (in shares) at Dec. 31, 2020 | 116,789 | 5,567,319 | 5,124,786 | ||||
Balance, beginning at Sep. 30, 2021 | $ 100 | $ 5,568 | $ 7,048 | 88,650,286 | (150,374,649) | (61,711,647) | |
Balance, beginning (in shares) at Sep. 30, 2021 | 100,363 | 5,567,319 | 7,048,387 | ||||
Common shares issued for cash | $ 7,704 | 10,886,955 | 10,894,659 | ||||
Common shares issued for cash (in shares) | 7,704,082 | ||||||
Common shares issued for asset | $ 109 | 140,891 | 141,000 | ||||
Common shares issued for asset (in shares) | 109,412 | ||||||
Preferred shares issued for cash | $ 2,264 | 19,997,736 | 20,000,000 | ||||
Preferred shares issued for cash (in shares) | 2,263,970 | ||||||
Preferred shares issued to settle liability to issue | $ 85 | 704,915 | 705,000 | ||||
Preferred shares issued to settle liability to issue (in shares) | 84,900 | ||||||
Warrant issuances | 10,491,621 | 10,491,621 | |||||
Preferred shares issued in exchange for conversion of debt | $ 2,829 | 24,988,926 | 24,991,755 | ||||
Preferred shares issued in exchange for conversion of debt (in shares) | 2,829,029 | ||||||
Stock-based compensation | $ 443 | 4,424,825 | 4,425,268 | ||||
Stock-based compensation (in shares) | 443,124 | ||||||
Common shares issued to settle liability to issue | $ 131 | 1,034,681 | 1,034,812 | ||||
Common shares issued to settle liability to issue (in shares) | 131,477 | ||||||
Prefunded warrant issuance | 15,000,000 | 15,000,000 | |||||
Issuance of common stock for conversion of preferred stock | $ (85) | $ 8,500 | (8,415) | ||||
Issuance of common stock for conversion of preferred stock (in shares) | (84,996) | 8,499,680 | |||||
Net loss | (36,463,938) | (36,463,938) | |||||
Balance, ending at Dec. 31, 2021 | $ 15 | $ 5,568 | $ 5,178 | $ 23,935 | $ 176,312,421 | $ (186,838,587) | $ (10,491,470) |
Balance, ending (in shares) at Dec. 31, 2021 | 15,367 | 5,567,319 | 5,177,899 | 23,936,162 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Cash Flows from Operating Activities | ||
Net Loss | $ (36,463,938) | $ (4,996,450) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 307,699 | 108,427 |
Employee stock compensation | 1,604,293 | 566,179 |
Issuance of shares for services | 2,495,487 | 26,162 |
Non-cash interest and other operating activities | 3,062,048 | 1,918,453 |
Non-cash lease expense | 136,938 | 77,644 |
Amortization of debt discount | 19,212,176 | 487,876 |
Loss on asset disposal | 1,298 | |
(Gain) on extinguishment of debt | (74,509) | (880,581) |
Loss on debt settlement | 41,096 | |
Changes in operating assets and liabilities: | ||
Other current assets | (1,226,376) | 161,959 |
Other assets | (1,225,252) | 40,629 |
Accounts payable | (977,783) | (31,563) |
Accrued expenses and other liabilities | (1,468,751) | 2,679,880 |
Lease liabilities | (137,228) | (73,303) |
Net cash used (provided by) operating activities | (14,712,802) | 85,312 |
Cash Flows from Investing Activities | ||
Purchase of equipment | (10,462,219) | (31,335) |
Purchase of intangible assets | (41,250) | |
Net cash used in investing activities | (10,462,219) | (72,585) |
Cash Flows from Financing Activities | ||
Changes in net parent investment | (1,997,844) | |
Proceeds from issuance of notes payable | 7,300,000 | 2,265,000 |
Proceeds from issuance of common stock | 10,894,659 | |
Proceeds from liability to issue preferred C shares | 20,000,000 | |
Payment of notes payable | (13,000,351) | (88,964) |
Net cash provided by financing activities | 25,194,308 | 178,192 |
Increase (decrease) in cash | 19,286 | 190,919 |
Cash, beginning of year | 42,174 | 33,368 |
Cash, ending of year | 61,460 | 224,287 |
Supplemental disclosure of Cash Flow information: | ||
Cash paid for interest | 1,424,345 | 3,945 |
Supplemental disclosure for non-cash activities: | ||
Refinance of existing debt | $ 1,560,235 | |
Preferred shares issued in exchange for convertible debt | $ 24,991,755 |
DESCRIPTION OF BUSINESS AND BAS
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION | 3 Months Ended |
Dec. 31, 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 Company MTI NETE Basis of Presentation and Principles of Consolidation The accompanying condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the " Commission GAAP . The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, Mullen Investment Properties, LLC, which was established in August 2021 to hold our real estate. Intercompany accounts and transactions have been eliminated, if any. As of December 31, 2021, Mullen Investment Properties, LLC holds the Advanced Manufacturing and Engineering Center or “AMEC” in Tunica County, MS. 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 condensed consolidated balance sheets include all of the MAI Assets. The condensed consolidated Statements of operations for each of the three months ended December 31, 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 | 3 Months Ended |
Dec. 31, 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 source of liquidity consists of existing cash and restricted cash of approximately $61,000 at December 31, 2021. During the three months ended December 31, 2021, the Company used $14.7 million of cash for operating activities and had a working capital deficiency of approximately $24.9 million at December 31, 2021. During the three months ended December 31, 2021, the Company obtained additional financing in the amount of $7.26 million in unsecured convertible notes; $10 million in equity from Net Element merger; and $20 million in equity commitments (See Note 5, Debt). The Coronavirus (“ COVID-19 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 $186.8 million, and management expects to continue to incur operating losses over the near future. Proceeds from the business combination with Net Element, the exercise of warrants, and a qualified public offering, should they materialize, are expected to provide Mullen with sufficient liquidity and capital resources to fund its operating expenses and capital requirements for at least the next 12 months. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Dec. 31, 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. NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued 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 consolidated 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. There were no cash equivalents at December 31, 2021 or September 30, 2021. Restricted Cash Funds that are not available for immediate use and must use for a specific purpose. These funds are refundable deposits for individuals and businesses who have made $100 reservations for the Mullen FIVE SUV, which debuted at the Los Angeles Auto Show in November 2021. At December 31, 2021, the restricted cash balance was $61,000. Customer deposits are accounted for within other liabilities Deferred Advertising At December 31, 2021 and September 30, 2021, deferred advertising was zero and $261,550, respectively. The cost were primarily upfront costs paid related to the Los Angeles auto show during November 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. NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued 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 There are transactions that occur during the ordinary course of business for which the ultimate tax determination may be uncertain. At December 31, 2021 and September 30, 2021, 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 December 31, 2021 and September 30, 2021. NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued 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. 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 “Other Expenses – Advertising Cost.” Research and Development Costs Research and development costs are expensed as incurred and includes impairment charges in the amounts of $1,157,323 and $518,023 for the three months ended December 31, 2021 and 2020, respectively. Research and development expenses primarily consist of costs associated with the development of our Mullen Five show car. NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued Share-Based Compensation We account for share-based awards issued by MAI 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 charges of zero for the three months ended December 31, 2021 associated with these delays, which charges are included in the condensed consolidated statement of operations and are included in accounts payable in the consolidated balance sheet at December 31, 2021 and 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 – Level 3 – NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued Concentrations of Business and Credit Risk We maintain 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 December 31, 2021 and September 30, 2021. 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. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 3 Months Ended |
Dec. 31, 2021 | |
INTANGIBLE ASSETS | |
INTANGIBLE ASSETS | NOTE 4 – INTANGIBLE ASSETS For the three months ended December 31, 2021 and 2020, we incurred website development and trademark costs of $5,361 and $0, 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 December 31, 2021. Amortization of these costs will commence when the trademark application and registration process has been completed. NOTE 4 – INTANGIBLE ASSETS – Continued The weighted average useful life of the intellectual property is 3.0 December 31, 2021 September 30, 2021 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 $ (443,399) $ 2,216,992 $ 2,660,391 $ (221,699) $ 2,438,692 Intellectual property 71,182 (71,182) — 71,182 (69,205) 1,977 Trademark 59,951 — 59,951 54,590 — 54,590 Total Finite-Lived Intangible Assets $ 2,791,524 $ (514,581) $ 2,276,943 $ 2,786,163 $ (290,904) $ 2,495,259 Total future amortization expense for finite-lived intellectual property is as follows: Years Ended December 31, Future Amortization 2022 (nine months) $ 670,458 2023 886,797 2024 719,688 Total Future Amortization Expense $ 2,276,943 For the three months ended December 31, 2021 and 2020, amortization expense for the intangible assets was $223,676 and $5,932 respectively. |
DEBT
DEBT | 3 Months Ended |
Dec. 31, 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 December 31, 2021: Net Carrying Value Unpaid Principal Contractual Contractual Type of Debt Balance Current Long-Term Interest Rate Maturity Matured Notes $ 3,718,585 $ 3,718,585 $ — 0.00% - 15.00 % 2016 - 2021 Promissory Notes 14,531,554 14,531,554 — 28.00 % 2021 – 2022 Real Estate Note 274,983 36,724 238,259 5.00 % 2023 Loan Advances 618,158 618,158 — 0.00% - 10.00 % 2019 – 2020 Less: Debt Discount — — — NA NA Total Debt $ 19,143,280 $ 18,905,021 $ 238,259 NA NA NOTE 5 – DEBT – Continued 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 December 31, 2021: Years Ended December 31, 2022 (9 months) 2023 2024 Total Total Debt $ 18,905,021 $ 238,259 $ — $ 19,143,280 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%. Company management is working with the creditors to remediate the $3,718,585 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 three months ended December 31, 2021 and 2020, we recorded interest expense of $22,438,945 and $2,406,330, respectively. In some instances, MTI issued 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 three months ended December 31, 2021 and 2020, was $19,212,176 and $486,876, 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 three months ended December 31, 2021 and 2020, the carrying amount of indebtedness that was settled via issuance of MTI shares was $23,192,500 and $0, respectively. NOTE 5 – DEBT – Continued 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 was 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. On November 4, 2021, the merger effective date, TDR Capital (together with their affiliates) is limited to a 9.9% ownership cap common stock then outstanding after giving effect to the issuance of common stock issuable upon exercise of the warrants. 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) per common share and expires five years from the date of issuance. The number of conversion shares issuable upon conversion is determined according to the formula: Conversion Amount/Conversion Price of $0.6877, subject to certain adjustments. On November 4, 2021, the merger effective date, TDR Capital (together with their affiliates) is limited to a 9.9% ownership cap common stock then outstanding after giving effect to the issuance of common stock issuable upon exercise of the warrants. 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 ) NOTE 5 – DEBT – Continued 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 ) 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. On November 5, 2021, the merger effective date, the investors exchanged 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. On November 5, 2021, the Company received debt financing through MTI entering into an unsecured $110,000 convertible note agreement with Michael Friedlander. The convertible note is issued with OID of 10% or $10 thousand; carries an interest rate of 15% and has a maturity date of one year. On November 5, 2021, the merger effective date, the investors exchanged 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 JADR Consulting Group PTY Limited 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 to Equity Conversion (Exchange Agreements) The Notes described above were issued pursuant to Prior SPAs with the various Noteholders in 2020 and 2021 generally to finance Mullen Technologies’ electric vehicle business. The Prior SPAs provided for the issuance of the Notes and a specified number of warrants allowing the Noteholders to purchase common stock at an exercise price of $0.6877 per share, at any time prior to an expiration date that is generally 5 years after the date of issuance. At the effective time of the Merger, each of the warrants to purchase Mullen Technologies common stock were canceled and converted automatically into a Warrant. NOTE 5 – DEBT - Continued Mullen Technologies and the holders (“Noteholders”) of $10,762,500 in aggregate principal amount of 15% unsecured convertible notes (the “Notes”) previously issued pursuant to certain Securities Purchase Agreements between Mullen Technologies and the Noteholders (“Prior SPAs”) entered into an Exchange Agreement (the “Exchange Agreement”) dated as of May 7, 2021, as amended, pursuant to which the Noteholders exchanged their Notes for Series C Preferred Stock of Mullen Technologies (the “Exchange Shares”). A condition to the Noteholders’ obligation to exchange the Notes included that the Company had received conditional approval for listing our Common Stock on the Nasdaq Capital Market and all conditions for closing the Merger had been met. In connection with the initial issuance of the Notes and further to the Exchange Agreement, the Noteholders also received a total of 42,759,290 additional warrants to purchase Mullen Technologies common stock at a purchase price of $0.6877 per share. The Exchange Agreement requires Mullen Technologies to file a registration statement with the SEC under the Securities Act to register the sale of shares of common stock issuable upon conversion of the Exchange Shares by the Noteholders (the “Registration Statement”). On February 1, 2022, the S-3 Registration Statement was filed with the SEC and became effective on February 3, 2022. At the effective time of the Merger, (i) each of the Exchange Shares were canceled and converted automatically into the right to receive 0.078 shares of the Series C Preferred Stock, (ii) each of the warrants to purchase Mullen Technologies common stock were canceled and converted automatically into a Warrant and (iii) the obligations under the Exchange Agreement were assumed by the Company. Drawbridge Relationship During July 2020, Drawbridge-DBI and MTI entered into a settlement agreement (the “ Agreement The amounts owed to Drawbridge-DBI is $25,367,925 and $33,296,648 as of December 31, 2021 and September 30, 2021, respectively, and are in default. The amounts owed to other DBI-affiliated entities is $524,911 and $982,500 and $1,082,500, as of December 31, 2021 and September 30, 2021, respectively. The 2020 Drawbridge loan is currently recognized within the current portion of debt on the consolidated balance sheet. 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. NOTE 5 – DEBT - Continued SBA Loans On April 14, 2020, MTI entered a promissory note (the “ Note Loan PPP CARES Act In September 2020, MTI entered a promissory note (the " Note Loss on Debt Settlement The Company incurred a $41,904 loss on debt settlement for the $540K CarMoxy Loan. Release of Liability, Debt Paydowns and Payoffs On December 27, 2021, the Par Funding/CBSG debt of $74,509 has been deemed satisfied by the authorized agent for the trustee of the creditor. As result of the trustee’s actions, the Company recorded an extinguishment of $74,509 . 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 settlement, MAI (through MTI) received the title to one (1) Qiantu Dragonfly K50 EV car. NOTE 5 – DEBT - Continued Convertible Notes Between August 2020 and December 2021, MTI issued unsecured convertible notes totaling $23,192,500, of which $7,260,000 were issued during the three months ended December 31, 2021. The unsecured convertible notes issued during the three months ended December 31, 2021 bear interest at 15%, mature in one year, and included warrants to acquire shares of common stock based on a specified formula. Interest is accrued in arrears until the last business day of each calendar year quarter. The default rate on the note increases to 20% when quarterly interest payments are not timely made by MTI. Convertible Notes Convertible Interest Default Maturity Warrants Exercise Exercise Date of Issuance Note ($) 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 % 7/22/2022 746,961 7/22/2026 $ 8.84 7/26/2021 1,100,000 15 % 20 % 7/26/2022 339,528 7/26/2026 $ 8.84 8/19/2021 1,100,000 15 % 20 % 8/19/2022 339,528 8/19/2026 $ 8.84 9/3/2021 550,000 15 % 20 % 9/3/2022 169,764 9/3/2026 $ 8.84 10/5/2021 1,100,000 15 % 20 % 10/5/2022 395,712 10/5/2026 $ 8.84 10/18/2021 385,000 15 % 20 % 10/18/2022 138,500 10/18/2026 $ 8.84 10/19/2021 1,265,000 15 % 20 % 10/19/2022 455,068 10/19/2026 $ 8.84 10/27/2021 550,000 15 % 20 % 10/27/2022 197,857 10/27/2026 $ 8.84 10/27/2021 1,100,000 15 % 20 % 10/27/2022 395,712 10/27/2026 $ 8.84 11/4/2021 2,750,000 15 % 20 % 11/4/2022 989,277 11/4/2026 $ 8.84 11/5/2021 110,000 15 % 20 % 11/5/2022 37,356 11/5/2026 $ 8.84 11/5/2021*** — — — — 490,030 11/5/2026 $ 8.84 Total $ 23,192,500 — — — 7,876,068 — — * 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. NOTE 5 – DEBT - Continued ** On May 7, 2021, MTI issued additional warrants of 1,866,665 (MAI - 145,313) that 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 was created upon the merger effectiveness date between Net Element and MAI. *** Additional warrants granted to investors granted to 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. 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 December 31, 2021, the discount was fully amortized. 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 | 3 Months Ended |
Dec. 31, 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 condensed 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 | 3 Months Ended |
Dec. 31, 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, Series B, and Series C. 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 three months ended December 31, 2021 and 2020. The Series C Preferred Stock bears a cumulative 15.0% per annum fixed dividend payable no later than the 5 th The Company may elect to pay dividends for any month with a paid-in-kind election (“ PIK In addition to the above, the shares are also redeemable by the Company in accordance with the following schedule provided the issuance of shares of Common Stock underlying the shares has been registered and the registration statement remains effective: Year 1: No Redemption Year 2: Redemption at 120% of the Series C Redemption Price Year 3: Redemption at 115% of the Series C Redemption Price Year 4: Redemption at 110% of the Series C Redemption Price Year 5: Redemption at 105% of the Series C Redemption Price Year 6 and thereafter: Redemption at 100% of the Series C Redemption Price NOTE 7 – DEFICIENCY IN STOCKHOLDERS’ EQUITY – Continued Liquidation Based on a reverse ratio of one share of the Company for 12.8485 shares of Mullen Technologies (the “ Reverse Ratio ”):, (i) the liquidation preference for the Series A Preferred to $1.29 per share from $0.10 per share as set forth in Section 2(c) of Article III(B) of the Certificate, and (ii) the “Series B Original Issue Price” of the Series B Preferred and the “Series C Original Issue Price” of the Series C Preferred to $8.84 per share from $0.6877 per share as set forth in Section 2(a) and Section 2(b), respectively, of Article III(B) of the Certificate Subject to applicable law, in the event of any Liquidation Event, the holders of the Series B Preferred will be entitled to receive, prior and in preference to any distribution of the proceeds to the holders of the other series of Preferred Stock or the Common Stock by reason of their ownership thereof, an amount per share equal to the Series B Original Issue Price plus declared but unpaid dividends. The holders of the Series C Preferred will then be entitled to receive, prior and in preference to any distribution of the proceeds to the holders of the Series A Preferred or the Common Stock by reason of their ownership thereof, an amount per share equal to the Series C Original Issue Price plus declared but unpaid dividends. Thereafter, any remaining proceeds will be distributed to holders of the Series A Preferred and Common Stock ratably in proportion to the number of shares of the Series A Preferred and Common Stock held by them, on a fully converted basis. 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 of fully paid and non-accessible shares of Common Stock. Preferred Stock Series B and Preferred Stock Series C are convertible at any time at the option of the holder into Common Stock at a conversion rate of one for one basis with common shares at any time after the date of issuance of such shares into such number of fully paid and non-accessible shares of Common Stock. 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 The holders of shares of Common Stock and Preferred Stock shall at all times vote together as a single class on all matters (including the election of directors) submitted to a vote of the stockholders; provided, however Common Stock We have 500,000,000 shares of common stock authorized with $0.001 par value per share. There were 23,936,162 and 7,048,387 shares of common stock issued outstanding NOTE 7 – DEFICIENCY IN STOCKHOLDERS’ EQUITY – Continued 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 Warrants were issued at an initial exercise price of $0.6877 per share, were immediately exercisable upon issuance and have a term of five years from the date of issuance. The exercise price was adjusted as provided in the warrants and further in accordance with the Merger Agreement such that the exercise price is now $8.84 per share. The Warrants were exercisable for an aggregate of 15,075,707 shares of Common Stock as of December 31, 2021. The Warrants provide that if the Company issues or sells, enters into a definitive, binding agreement pursuant to which he Company is required to issue or sell or is deemed, pursuant to the provisions of the Warrants, to have issued or sold, any shares of Common Stock for a price per share lower than the exercise price then in effect (a “Dilutive Issuance”), subject to certain limited exceptions, then the exercise price of the Warrants shall be reduced to such lower price per share. In addition, the exercise price and the number of shares of Common Stock issuable upon exercise of the Warrants are subject to adjustment in connection with stock splits, dividends or distributions or other similar transactions. The following table summarizes warrant activity for the three months ended December 31, 2021 and 2020: Weighted Average MAI shares Exercise Price Warrants outstanding at September 30, 2021 4,924,447 $ 8.84 Warrants exercised — $ — Warrants granted 10,151,260 $ 8.84 Warrants expired — $ — Warrants outstanding at December 31, 2021 15,075,707 $ 8.84 Weighted Average MAI shares Exercise Price Warrants outstanding at September 30, 2020 540,905 $ 8.84 Warrants exercised — $ — Warrants granted 756,448 $ 8.84 Warrants expired (97,308) $ 8.84 Warrants outstanding at December 31, 2020 1,200,045 $ 8.84 NOTE 7 – DEFICIENCY IN STOCKHOLDERS’ EQUITY – Continued 2020-2021 Warrants The warrants are exercisable for a five-year period commencing upon issuance . The estimated fair value of the MAI warrants issued and outstanding as of December 31, 2021 is $133,269,241 using the Black-Scholes option valuation model. The assumptions used that represent management’s best estimates of the fair value of the Company’s warrants issued and outstanding were as follows: December 31, 2021 Expected term (in years) 5.0 Volatility 135 % Dividend yield 0.00 % Risk-free interest rate 0.98%-1.17 % Common stock price $ 4.16 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. All unamortized debt discount was charged to interest at the time of merger on November 5, 2021. Registration Rights At the effective time of the Merger, various agreements that Mullen Technologies entered into were assumed by the Company, including the Exchange Agreement, the $20 Million SPA and the Registration Rights Agreement. These agreements caused the Company to be obligated to file one or more registration statements to register the resale of our Common Stock. Equity Transactions Acuitas $20 Million Equity Purchase 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 commenced 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 merger transaction, Acuitas Group Holdings received 6,793,051 warrants with an adjusted exercise price of $8.84 and matures in five years. The investor also received 2,767,745 shares of Series C Preferred Stock. The preferred shares and warrants have been registered for sale via the S-3 Registration Statement that became effective on February 3, 2022. 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-year maturity. On November 5, 2021, the merger effective date, investors received e Series C Preferred Stock. NOTE 7 – DEFICIENCY IN STOCKHOLDERS’ EQUITY – Continued The table below represents the post-merger shares for equity capitalization. As of December 31, 2021, MAI issued Series C Preferred Stock and associated warrants to the investors within the Cambria relationship Date Series C Preferred Stock Warrants Additional Warrants Maturity Date Exercise Price 7/23/2021 8,490 25,470 — 7/23/2026 $ 8.84 7/23/2021 5,660 16,980 — 7/23/2026 $ 8.84 7/23/2021 11,320 33,960 — 7/23/2026 $ 8.84 7/23/2021 8,490 25,470 — 7/23/2026 $ 8.84 7/23/2021 — — 9,016 * 7/23/2026 $ 8.84 9/8/2021 19,810 59,429 — 9/8/2026 $ 8.84 9/8/2021 19,810 59,429 — 9/8/2026 $ 8.84 9/8/2021 11,320 33,960 — 9/8/2026 $ 8.84 Total 84,900 254,698 9,016 — — ● Represents placement agent fees to Cambria. |
LOSS PER SHARE
LOSS PER SHARE | 3 Months Ended |
Dec. 31, 2021 | |
LOSS PER SHARE | |
LOSS PER SHARE | NOTE 8 – LOSS PER SHARE Earnings per common share (“ EPS For the three months ended December 31, 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 | 3 Months Ended |
Dec. 31, 2021 | |
MTI SHARE- BASED COMPENSATION | |
MTI SHARE- BASED COMPENSATION | NOTE 9 – MAI SHARE- BASED COMPENSATION MAI 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 MAI’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 MAI Common Shares. Employees are vested in 100% of the MAI 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. Since we are public company, the employee shares are valued each month, using the MULN closing stock price on the NASDAQ CM. NOTE 9 – MAI SHARE- BASED COMPENSATION – Continued Consulting agreements or MAI shares for services are determined by the number of MAI shares granted within the individual contracts, as well as the services provided by the consultant. The MAI shares specified within the individual agreements are negotiated and approved by our Chief Executive Officer. The consultant earns the MAI shares over the service period. The MAI 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 three months ended December 31, Composition of Stock-Based Compensation Expense 2021 2020 Employee MAI share issuance $ 1,604,293 $ 566,179 MAI shares for services 2,495,487 26,162 MAI Share-Based compensation expense $ 4,099,780 $ 592,341 |
ACCRUED EXPENSES AND OTHER CURR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 3 Months Ended |
Dec. 31, 2021 | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | NOTE 10 – ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES December 31, 2021 September 30, 2021 Accrued Expenses and Other Liabilities Accrued expense - other $ 1,229,929 $ 2,051,696 Accrued payroll 4,596,272 4,586,057 Accrued interest 12,446,496 12,489,012 Total $ 18,272,697 $ 19,126,765 Accrued payroll represents salaries and benefits that are owed to employees, including payroll tax liabilities. Delinquent IRS and state tax liabilities as of December 31, 2021 and September 30, 2021 are $4,277,297 and $3,904,720, respectively. These tax liabilities have priority liens over MTI assets due to nonpayment of tax debt. The lien protects the government’s interest in all MTI property, including real estate, personal property and financial assets. See Note 18, Contingencies and Claims. Accrued interest |
NOTE RECEIVABLE
NOTE RECEIVABLE | 3 Months Ended |
Dec. 31, 2021 | |
NOTE RECEIVABLE | |
NOTE RECEIVABLE | NOTE 11 – NOTE RECEIVABLE 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 pre-funded warrants that are registered in the name of CEOcast, Inc. The investor is 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 . Before payments begin to the Company, the shares underlying the warrants must be registered via an effective registration statement filed with the U.S. Securities and Exchange Commission. |
LIABILITY TO ISSUE STOCK
LIABILITY TO ISSUE STOCK | 3 Months Ended |
Dec. 31, 2021 | |
LIABILITY TO ISSUE STOCK | |
LIABILITY TO ISSUE STOCK | NOTE 12 – 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. See Note 18, Commitments and Contingencies, and Note 20, Subsequent Events. |
PROPERTY, EQUIPMENT AND LEASEHO
PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET | 3 Months Ended |
Dec. 31, 2021 | |
PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET | |
PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET | NOTE 13 – PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET Property, equipment, and leasehold improvements, net consists of the following: December 31, September 30, 2021 2021 Building $ 8,078,757 $ 804,654 Furniture and Equipment 485,534 111,102 Vehicles 45,887 45,887 Computer Hardware and Software 172,505 139,742 Machinery and Equipment 6,946,019 2,597,654 Leasehold Improvements 40,367 66,379 Subtotal 15,769,069 3,765,418 Less: Accumulated Depreciation (2,665,364) (2,583,941) Property, Equipment and Leasehold Improvements, Net $ 13,103,705 $ 1,181,477 Depreciation expense related to property, equipment and leasehold improvements for the three months ended December 31, 2021, and 2020 was $84,022 and $102,495, respectively. On November 12, 2021, Mullen Investment Properties, LLC, MAI real estate wholly owned subsidiary, 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. |
OTHER ASSETS
OTHER ASSETS | 3 Months Ended |
Dec. 31, 2021 | |
OTHER ASSETS | |
OTHER ASSETS | NOTE 14 – OTHER ASSETS Other assets consist of the following: December 31, 2021 September 30, 2021 Other Assets Coda Materials $ 76,588 $ 76,587 Show Room Cars 4,082,665 2,739,995 Security Deposits 186,640 186,640 Deposit on Property (See Note 16) — 1,240,000 Total Other Assets $ 4,345,893 $ 4,243,222 |
OPERATING EXPENSES
OPERATING EXPENSES | 3 Months Ended |
Dec. 31, 2021 | |
OPERATING EXPENSES | |
OPERATING EXPENSES | NOTE 15 – OPERATING EXPENSES General and Administrative Expenses consists of the following: Three months ended December 31, 2021 2020 Professional fees $ 5,139,332 $ 941,728 Salaries 3,161,920 1,151,668 Depreciation and amortization 307,699 108,427 Lease 459,535 356,168 Settlements and penalties 294,812 54,588 Employee benefits 368,052 83,293 Utilities and office expense 179,028 67,457 Advertising and promotions 2,452,790 29,541 Taxes and licenses 72,279 5,130 Repairs and maintenance 19,220 41,880 Other 446,416 112,798 Total $ 12,901,084 $ 2,952,678 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 15, Other Assets). For the three months ended December 31, 2021 and 2020, the Company recorded $916,295 and $26,162, respectively, for shares for services. Research and development consist of the following: Three months ended December 31 2021 2020 Research & Development Professional fees $ 1,157,323 $ 518,023 Total $ 1,157,323 $ 518,023 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 car design was completed during Q3 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 completed 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 | 3 Months Ended |
Dec. 31, 2021 | |
LEASES | |
LEASES | NOTE 16 – LEASES MTI (now assumed by MAI due to the merger) 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. December 31, 2021 September 30, 2021 Assets: Operating lease right-of-use assets $ 2,213,991 $ 2,350,929 Liabilities: Operating lease liabilities, current (623,343) (599,898) Operating lease liabilities, non-current (1,697,222) (1,857,894) Total lease liabilities $ (2,320,565) $ (2,457,792) Weighted average remaining lease terms: Operating leases 3.14 years 3.34 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 $ 293,387 $ 1,057,438 Operating lease costs: For the three months ended December 31, 2021 2020 Fixed lease cost $ 286,482 $ 150,235 Variable lease cost 129,605 199,367 Short-term lease cost 96,592 27,795 Sublease income (53,144) (21,229) Total operating lease costs $ 459,535 $ 356,168 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. NOTE 16 – LEASES – Continued The following table reflects maturities of operating lease liabilities at December 31, 2021: Years ending December 31, 2022 (9 months) $ 908,149 2023 1,157,693 2024 824,287 2025 436,155 2026 222,787 Thereafter — Total lease payments $ 3,549,071 Less: Imputed interest (1,228,506) Present value of lease liabilities $ 2,320,565 |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Dec. 31, 2021 | |
INCOME TAXES. | |
INCOME TAXES | NOTE 17 – 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 quarter ended December 31, 2021 and 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 December 31, September 30, 2021 2021 Federal 2034-2037 $ 36,566,294 $ 29,838,716 Indefinite $ 199,385,113 $ 162,818,819 Total Federal $ 235,951,407 $ 192,657,535 California 2034-2040 $ 194,955,026 $ 191,722,566 Total California $ 194,955,026 $ 191,722,566 December 31, December 31, September 30, September 30, 2021 2021 - % 2021 2021 - % Income tax benefit at statutory rate $ (7,657,427) 21.00 % $ (9,247,200) 21.00 % State income taxes — — % 800 — % Permanent Differences 430,252 (0.35) % 158,166 (0.36) % Valuation Allowance 7,229,304 (20.65) % 9,091,163 (20.65) % Other (2,129) — % (2,129) — % Total (benefit) provision for income taxes $ — — % $ 800 — % 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. NOTE 17 – INCOME TAXES – Continued Significant components of the Company’s net deferred tax assets as of December 31, 2021 and September 30, 2021 and 2020 are as follows: December 31, September 30, September 30, 2021 2021 2020 Deferred tax assets: Net Operating loss carryforwards 66,000,217 38,676,405 31,413,378 Charitable Contributions — 894 1,176 Accrued Expenses 226,308 315,555 104,164 Impairment Other — — 83,845 Other Assets — 364,419 261,842 163(j) Limitation 19,203,511 14,491,332 4,178,291 Total gross deferred tax assets 85,430,036 53,848,604 36,042,696 Less valuation allowance (85,430,036) (53,416,875) (35,747,087) Total net deferred tax assets 332,578 431,729 295,609 Deferred tax liabilities: Intangibles (223,676) (146,639) (157,641) Fixed Assets (108,902) (284,922) (137,632) Other — (168) (336) Total deferred tax liabilities (332,578) (431,729) (295,609) Net deferred tax assets $ — $ — $ — For the quarter ended December 31, 2021 and 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. |
CONTINGENCIES AND CLAIMS
CONTINGENCIES AND CLAIMS | 3 Months Ended |
Dec. 31, 2021 | |
CONTINGENCIES AND CLAIMS | |
CONTINGENCIES AND CLAIMS | NOTE 18 – 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. NOTE 18 – CONTINGENCIES AND CLAIMS – Continued 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 been filed but not declared effective until January 11, 2022. The Company has recognized an obligation to issue these shares and a related deferred charge for these consulting services on the condensed consolidated balance sheet. Equity Financing Transactions $30 M common stock purchase On September 1, 2021, Mullen Technologies and Esousa Holdings LLC (“Esousa”) entered into a Securities Purchase Agreement (the “Equity Line of Credit”) whereby the Esousa Holdings, LLC committed to purchase up to an aggregate of up to $30,000,000, or $2.5 million per month, in Common Stock over a twelve-month period. At the effective time of the Merger, the obligations under the Equity Line of Credit were assumed by the Company. The number of shares of Common Stock issued by the Company at each draw down date is calculated by multiplying 125% by the amount of each draw down (up to $2,500,000) and then dividing by the closing sale price of the Common Stock on the principal securities exchange or trading market on which the Common Stock is listed or trading on the trading day immediately prior to the draw down. The number of Common Shares issued is then subject to adjustment and will be issued at a purchase price per share equal to 95% of the dollar volume-weighted average price per share of Common Stock during the ten trading days following the draw down date. As a condition to the obligation of the investor to fund the Equity Line of Credit, the Company must file an SEC registration statement covering the sale of the Common Stock issued under the Equity Line of Credit and such registration statement must be declared effective. The Company shall not issue any Common Stock under the Equity Line of Credit if that would result in Esousa’s beneficial ownership equaling more than 9.9% of the Company’s outstanding Common Stock. 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 $4.2 million liability at December 31, 2021 associated with past due amounts owed to the Internal Revenue Service (“ IRS EDD NOTE 18 – CONTINGENCIES AND CLAIMS – Continued 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 $370,067 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 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 December 31, 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 GEM 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. NOTE 18 – CONTINGENCIES AND CLAIMS – Continued As the Company did not effect a Reverse Merger Transaction as defined in the GEM agreement (that is, Net Element was not a special purpose acquisition company) nor did the Company effect a direct listing of its common shares, the Company does not believe it is obligated to pay fees nor issue warrants to GEM under the GEM Agreement. 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. Based upon information presently known to management, the Company believes that the potential liability 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 condensed consolidated 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 MAI. 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. 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. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Dec. 31, 2021 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | NOTE 19 – RELATED PARTY TRANSACTIONS At December 31, 2021 and September 30, 2021, 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 MAI, since issued MTI shares were exchanged due to the merger. Drawbridge Related Transactions (Cumulative) December 31, 2021 September 30, 2021 Description Loan Principal # of Shares FV of Shares Loan Principal # of Shares FV of Shares Various Notes $ 13,831,554 — $ — $ 23,831,554 — $ — Common Shares — 8,130,384 42,524,523 — 8,130,384 66,994,364 Preferred Shares - Series A — 2,335 3,012 — 2,335 3,012 Preferred Shares - Series B — 5,567,319 49,215,100 — 5,567,319 49,215,100 Total Related Party Transactions $ 13,831,554 13,700,038 $ 91,742,635 $ 23,831,554 13,700,038 $ 116,212,476 * Shares are MTI common and preferred shares. NOTE 19 – RELATED PARTY TRANSACTIONS – Continued The default interest rate on the Drawbridge loans is 28% per annum, and accrued interest is $11,536,371 at December 31, 2021. Chief Executive Officer Loans to MAI From time to time, the Company’s CEO provides loans to the Company. The outstanding balances for these loans was zero and $479,914 at September 30, 2021. During the three months ended December 31, 2021, the Company repaid the outstanding loan balance in full. 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 three months ended December 31, 2021, Mr. Miltner received $231,483 for services rendered to us. Mr. Miltner has been providing legal services to the Company since 2020. Consulting Agreement 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. Equity Warrants (EXCHANGE AGREEMENT and EQUITY WARRANTS) During 2020 and 2021, as part of the 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 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Dec. 31, 2021 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE 20 – SUBSEQUENT EVENTS Company management has evaluated subsequent events through February 14, 2022, 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: Short-Term Financing On January 14, 2022, MAI executed a Letter of Intent (“LOI”) with Mark Betor, MAI Director, for a $1,000,000 loan. The loan terms are as follows: ● $250,000 loan advance upon the execution of LOI ● $750,000 remaining balance is paid to Mullen Automotive upon execution of transaction documents Loan will be evidenced by a Promissory Note with a maturity date for full repayment of loan no later than 90 days from January 11, 2022. Total agreed repayment amount is $1,150,000. Collateral is a first lien position 1 Greentech Drive, Tunica, MS. MAI Board of Directors approved transaction on January 18, 2022. Mr. Betor abstained from voting. NOTE 20 – SUBSEQUENT EVENTS – Continued S-3 Registration Statement The SEC registration statement that became effective February 3, 2022, the Conversion Shares and Warrant Shares were included as required by that certain Registration Rights Agreement, entered into among Mullen Technologies, Inc (“Mullen Technologies”) and certain of the Selling Stockholders (the “Registration Rights Agreement”) and that certain Exchange Agreement, entered into among Mullen Technologies and certain of the Selling Stockholders (the “Exchange Agreement”). The securities that were registered for resale, in aggregate totaled 228,568,886 shares of common stock. ● 11,392,058 shares of our Common Stock issued to David Michery, our Chief Executive Officer and other stockholders, ● 148,139,757 shares of our Common Stock issuable upon exercise of the Warrants, ● 2,454,240 shares of our Common Stock issuable upon conversion of the Note Shares, ● 5,567,319 shares of our Common Stock issuable upon conversion of our Series B Preferred Stock, ● 30,087,677 shares of our Common Stock issuable upon conversion of our Series C Preferred Stock and, up to 30,927,835 shares of Common Stock issuable pursuant to the Equity Line of Credit. No proceeds are expected from the sale or disposition of the shares of common stock. However, proceeds may be received on the from the exercise of warrants and note shares. Warrant Exercises The table below reflects the number of warrant exercises and common shares granted since the warrant shares were registered under the SEC registration statement became effective on February 3, 2022. # of Warrants # of Common Stock Date Registered Investor Name Exercised Requested 2/1/2022 Acuitas Capital LLC 259,033 709,217 2/1/2022 Esousa Holdings LLC 129,516 354,608 2/4/2022 JADR Consulting Limited PTY 50,000 126,558 2/4/2022 TDR Capital 50,000 126,558 2/4/2022 Friedlander, Michael 16,000 40,905 2/9/2022 Mogul, Jess 100,000 347,747 2/9/2022 Fallon, Jim 100,000 347,747 2/10/2022 TDR Capital 400,000 1,449,766 2/10/2022 JADR Consulting Limited PTY 400,000 1,449,766 2/10/2022 Acuitas Capital LLC 137,235 500,000 2/11/2022 Mogul, Jess 62,674 505,109 2/11/2022 Fallon, Jim 31,610 254,781 Total 1,736,068 6,212,762 $30 Million Esousa Equity Line of Credit – Drawdown On September 1, 2021, Mullen Technologies and Esousa Holdings LLC (“Esousa”) entered into a Securities Purchase Agreement (the “Equity Line of Credit”) whereby the Esousa Holdings, LLC committed to purchase up to an aggregate of up to $30,000,000, or $2.5 million per month, in Common Stock over a twelve-month period. At the effective time of the Merger, the obligations under the Equity Line of Credit were assumed by the Company. NOTE 20 – SUBSEQUENT EVENTS – Continued As a condition to the obligation of the investor to fund the Equity Line of Credit, the Company must file an SEC registration statement covering the sale of the Common Stock issued under the Equity Line of Credit and such registration statement must be declared effective. The Company shall not issue any Common Stock under the Equity Line of Credit if that would result in Esousa’s beneficial ownership equaling more than 9.9% of the Company’s outstanding Common Stock. The SEC Registration Statement was filed on February 1, 2022 and became effective on February 3, 2022. On February 4, 2022, MAI received $1,125,000 from the equity line of credit. As part of the transaction, Esousa Holdings, LLC received 1,144,688 common shares. The formula is based on $2.5 million divide by the daily closing price of the MAI, which was $2.73) multiplied by 125%. MAI expects to drawdown the remaining balance of the $2.5 million in mid to late February 2022. S-8 Registration Statement This Registration Statement on Form S-8 (the “ Registration Statement Shares Common Stock Company 2013 Plan Preferred Management Partners, Inc. – Consulting Agreement In September 2021, Preferred Management Partners entered into a consulting agreement to provide services to MAI. The compensation arrangement is as follows: ● Consultant will receive 750,000 unrestricted publicly traded shares of the Company’s common stock registered on Form S-8 Registration statement. For FYE 2021, the common shares were accounted for within Liability to Issue Stock since the S-8 Registration Statement had not been filed. On January 11, 2022, the Company filed with the SEC and Preferred Management Partners received their 750,000 common shares. The share issuance will now be accounted for within equity. Sales of Unregistered Securities On January 18, 2022, MAI approved the issuance of an aggregate of 1,908,000 shares of its common stock to certain employees of the Company, including the executive officers listed below: Name Shares David Michery 1,000,000 Kerri Sadler 300,000 Jerry Alban 300,000 Calin Popa 50,000 Such securities were issued in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended (the “ Securities Act NOTE 20 – SUBSEQUENT EVENTS – Continued Amendment to Convertible Preferred Security and Warrant Agreements On February 10, 2022, MAI and Esousa Holdings, LLC agreed to amend to provisions within the Securities Purchase Agreements: ● The Holders irrevocably and forever waive their rights under section 2 (c) and 2 (d) of the Warrant, and under section 4 (c) of the Series C Convertible Preferred. ● For purposes of section 1 (b), Exercise Price, in the Warrant, the exercise price shall be modified from 0.6877 to $8.834 . ● Under Section 16 (b) of the Warrant, the definition of Black Scholes Value shall be modified so that the Black Scholes Value shall be increased by $3.00 per Warrant. For example, if the calculations under Section 16 resulted in a value of $7.72, as a result of this Amendment the Black Scholes Value would be increased to $10.72. ● Under 4(c) of the Convertible Note, the Company will not be subjected to a new issuance price due to subsequent financing less than a price equal to the Conversion Price in effect immediately prior to such issue or sale or deemed issuance or sale. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Dec. 31, 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 consolidated 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. There were no cash equivalents at December 31, 2021 or September 30, 2021. |
Restricted Cash | Restricted Cash Funds that are not available for immediate use and must use for a specific purpose. These funds are refundable deposits for individuals and businesses who have made $100 reservations for the Mullen FIVE SUV, which debuted at the Los Angeles Auto Show in November 2021. At December 31, 2021, the restricted cash balance was $61,000. Customer deposits are accounted for within other liabilities |
Deferred Advertising | Deferred Advertising At December 31, 2021 and September 30, 2021, deferred advertising was zero and $261,550, respectively. The cost were primarily upfront costs paid related to the Los Angeles auto show during November 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 There are transactions that occur during the ordinary course of business for which the ultimate tax determination may be uncertain. At December 31, 2021 and September 30, 2021, 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 December 31, 2021 and September 30, 2021. |
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. |
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 “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 $1,157,323 and $518,023 for the three months ended December 31, 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 MAI 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 charges of zero for the three months ended December 31, 2021 associated with these delays, which charges are included in the condensed consolidated statement of operations and are included in accounts payable in the consolidated balance sheet at December 31, 2021 and 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 – Level 3 – |
Concentrations of Business and Credit Risk | Concentrations of Business and Credit Risk We maintain 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 December 31, 2021 and September 30, 2021. |
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. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Dec. 31, 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) | 3 Months Ended |
Dec. 31, 2021 | |
INTANGIBLE ASSETS | |
Schedule of finite lived intangible assets | December 31, 2021 September 30, 2021 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 $ (443,399) $ 2,216,992 $ 2,660,391 $ (221,699) $ 2,438,692 Intellectual property 71,182 (71,182) — 71,182 (69,205) 1,977 Trademark 59,951 — 59,951 54,590 — 54,590 Total Finite-Lived Intangible Assets $ 2,791,524 $ (514,581) $ 2,276,943 $ 2,786,163 $ (290,904) $ 2,495,259 |
Schedule of future amortization expense for finite-lived intellectual property | Years Ended December 31, Future Amortization 2022 (nine months) $ 670,458 2023 886,797 2024 719,688 Total Future Amortization Expense $ 2,276,943 |
DEBT (Tables)
DEBT (Tables) | 3 Months Ended |
Dec. 31, 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 $ 3,718,585 $ 3,718,585 $ — 0.00% - 15.00 % 2016 - 2021 Promissory Notes 14,531,554 14,531,554 — 28.00 % 2021 – 2022 Real Estate Note 274,983 36,724 238,259 5.00 % 2023 Loan Advances 618,158 618,158 — 0.00% - 10.00 % 2019 – 2020 Less: Debt Discount — — — NA NA Total Debt $ 19,143,280 $ 18,905,021 $ 238,259 NA NA NOTE 5 – DEBT – Continued 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 | Years Ended December 31, 2022 (9 months) 2023 2024 Total Total Debt $ 18,905,021 $ 238,259 $ — $ 19,143,280 |
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 % 7/22/2022 746,961 7/22/2026 $ 8.84 7/26/2021 1,100,000 15 % 20 % 7/26/2022 339,528 7/26/2026 $ 8.84 8/19/2021 1,100,000 15 % 20 % 8/19/2022 339,528 8/19/2026 $ 8.84 9/3/2021 550,000 15 % 20 % 9/3/2022 169,764 9/3/2026 $ 8.84 10/5/2021 1,100,000 15 % 20 % 10/5/2022 395,712 10/5/2026 $ 8.84 10/18/2021 385,000 15 % 20 % 10/18/2022 138,500 10/18/2026 $ 8.84 10/19/2021 1,265,000 15 % 20 % 10/19/2022 455,068 10/19/2026 $ 8.84 10/27/2021 550,000 15 % 20 % 10/27/2022 197,857 10/27/2026 $ 8.84 10/27/2021 1,100,000 15 % 20 % 10/27/2022 395,712 10/27/2026 $ 8.84 11/4/2021 2,750,000 15 % 20 % 11/4/2022 989,277 11/4/2026 $ 8.84 11/5/2021 110,000 15 % 20 % 11/5/2022 37,356 11/5/2026 $ 8.84 11/5/2021*** — — — — 490,030 11/5/2026 $ 8.84 Total $ 23,192,500 — — — 7,876,068 — — |
DEFICIENCY IN STOCKHOLDERS' E_2
DEFICIENCY IN STOCKHOLDERS' EQUITY (Tables) | 3 Months Ended |
Dec. 31, 2021 | |
DEFICIENCY IN STOCKHOLDERS' EQUITY | |
Summary of warrant activity | Weighted Average MAI shares Exercise Price Warrants outstanding at September 30, 2021 4,924,447 $ 8.84 Warrants exercised — $ — Warrants granted 10,151,260 $ 8.84 Warrants expired — $ — Warrants outstanding at December 31, 2021 15,075,707 $ 8.84 Weighted Average MAI shares Exercise Price Warrants outstanding at September 30, 2020 540,905 $ 8.84 Warrants exercised — $ — Warrants granted 756,448 $ 8.84 Warrants expired (97,308) $ 8.84 Warrants outstanding at December 31, 2020 1,200,045 $ 8.84 |
Schedule of assumptions used for warrants issued and outstanding | December 31, 2021 Expected term (in years) 5.0 Volatility 135 % Dividend yield 0.00 % Risk-free interest rate 0.98%-1.17 % Common stock price $ 4.16 |
Schedule of post-merger shares for equity capitalization | Date Series C Preferred Stock Warrants Additional Warrants Maturity Date Exercise Price 7/23/2021 8,490 25,470 — 7/23/2026 $ 8.84 7/23/2021 5,660 16,980 — 7/23/2026 $ 8.84 7/23/2021 11,320 33,960 — 7/23/2026 $ 8.84 7/23/2021 8,490 25,470 — 7/23/2026 $ 8.84 7/23/2021 — — 9,016 * 7/23/2026 $ 8.84 9/8/2021 19,810 59,429 — 9/8/2026 $ 8.84 9/8/2021 19,810 59,429 — 9/8/2026 $ 8.84 9/8/2021 11,320 33,960 — 9/8/2026 $ 8.84 Total 84,900 254,698 9,016 — — ● Represents placement agent fees to Cambria. |
MTI SHARE- BASED COMPENSATION (
MTI SHARE- BASED COMPENSATION (Tables) | 3 Months Ended |
Dec. 31, 2021 | |
MTI SHARE- BASED COMPENSATION | |
Schedule of composition of stock-based compensation expense | For the three months ended December 31, Composition of Stock-Based Compensation Expense 2021 2020 Employee MAI share issuance $ 1,604,293 $ 566,179 MAI shares for services 2,495,487 26,162 MAI Share-Based compensation expense $ 4,099,780 $ 592,341 |
ACCRUED EXPENSES AND OTHER CU_2
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 3 Months Ended |
Dec. 31, 2021 | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |
Schedule of accrued expenses and other current liabilities | December 31, 2021 September 30, 2021 Accrued Expenses and Other Liabilities Accrued expense - other $ 1,229,929 $ 2,051,696 Accrued payroll 4,596,272 4,586,057 Accrued interest 12,446,496 12,489,012 Total $ 18,272,697 $ 19,126,765 |
PROPERTY, EQUIPMENT AND LEASE_2
PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET (Tables) | 3 Months Ended |
Dec. 31, 2021 | |
PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET | |
Schedule of property and equipment, net | December 31, September 30, 2021 2021 Building $ 8,078,757 $ 804,654 Furniture and Equipment 485,534 111,102 Vehicles 45,887 45,887 Computer Hardware and Software 172,505 139,742 Machinery and Equipment 6,946,019 2,597,654 Leasehold Improvements 40,367 66,379 Subtotal 15,769,069 3,765,418 Less: Accumulated Depreciation (2,665,364) (2,583,941) Property, Equipment and Leasehold Improvements, Net $ 13,103,705 $ 1,181,477 |
OTHER ASSETS (Tables)
OTHER ASSETS (Tables) | 3 Months Ended |
Dec. 31, 2021 | |
OTHER ASSETS | |
Schedule of other assets | December 31, 2021 September 30, 2021 Other Assets Coda Materials $ 76,588 $ 76,587 Show Room Cars 4,082,665 2,739,995 Security Deposits 186,640 186,640 Deposit on Property (See Note 16) — 1,240,000 Total Other Assets $ 4,345,893 $ 4,243,222 |
OPERATING EXPENSES (Tables)
OPERATING EXPENSES (Tables) | 3 Months Ended |
Dec. 31, 2021 | |
OPERATING EXPENSES | |
Schedule of Operating Expenses | General and Administrative Expenses consists of the following: Three months ended December 31, 2021 2020 Professional fees $ 5,139,332 $ 941,728 Salaries 3,161,920 1,151,668 Depreciation and amortization 307,699 108,427 Lease 459,535 356,168 Settlements and penalties 294,812 54,588 Employee benefits 368,052 83,293 Utilities and office expense 179,028 67,457 Advertising and promotions 2,452,790 29,541 Taxes and licenses 72,279 5,130 Repairs and maintenance 19,220 41,880 Other 446,416 112,798 Total $ 12,901,084 $ 2,952,678 Research and development consist of the following: Three months ended December 31 2021 2020 Research & Development Professional fees $ 1,157,323 $ 518,023 Total $ 1,157,323 $ 518,023 |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Dec. 31, 2021 | |
LEASES | |
Summary of components of lease expense | December 31, 2021 September 30, 2021 Assets: Operating lease right-of-use assets $ 2,213,991 $ 2,350,929 Liabilities: Operating lease liabilities, current (623,343) (599,898) Operating lease liabilities, non-current (1,697,222) (1,857,894) Total lease liabilities $ (2,320,565) $ (2,457,792) Weighted average remaining lease terms: Operating leases 3.14 years 3.34 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 $ 293,387 $ 1,057,438 |
Summary of maturities of operating lease liabilities | Operating lease costs: For the three months ended December 31, 2021 2020 Fixed lease cost $ 286,482 $ 150,235 Variable lease cost 129,605 199,367 Short-term lease cost 96,592 27,795 Sublease income (53,144) (21,229) Total operating lease costs $ 459,535 $ 356,168 |
Summary of maturities of finance lease liabilities | Years ending December 31, 2022 (9 months) $ 908,149 2023 1,157,693 2024 824,287 2025 436,155 2026 222,787 Thereafter — Total lease payments $ 3,549,071 Less: Imputed interest (1,228,506) Present value of lease liabilities $ 2,320,565 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 3 Months Ended |
Dec. 31, 2021 | |
INCOME TAXES. | |
Summary of income tax NOL carryforwards | NOL Carryforward December 31, September 30, 2021 2021 Federal 2034-2037 $ 36,566,294 $ 29,838,716 Indefinite $ 199,385,113 $ 162,818,819 Total Federal $ 235,951,407 $ 192,657,535 California 2034-2040 $ 194,955,026 $ 191,722,566 Total California $ 194,955,026 $ 191,722,566 |
Summary of reconciliation of our effective tax rate to statutory federal tax rate | December 31, December 31, September 30, September 30, 2021 2021 - % 2021 2021 - % Income tax benefit at statutory rate $ (7,657,427) 21.00 % $ (9,247,200) 21.00 % State income taxes — — % 800 — % Permanent Differences 430,252 (0.35) % 158,166 (0.36) % Valuation Allowance 7,229,304 (20.65) % 9,091,163 (20.65) % Other (2,129) — % (2,129) — % Total (benefit) provision for income taxes $ — — % $ 800 — % |
Summary of significant component of net deferred tax assets | December 31, September 30, September 30, 2021 2021 2020 Deferred tax assets: Net Operating loss carryforwards 66,000,217 38,676,405 31,413,378 Charitable Contributions — 894 1,176 Accrued Expenses 226,308 315,555 104,164 Impairment Other — — 83,845 Other Assets — 364,419 261,842 163(j) Limitation 19,203,511 14,491,332 4,178,291 Total gross deferred tax assets 85,430,036 53,848,604 36,042,696 Less valuation allowance (85,430,036) (53,416,875) (35,747,087) Total net deferred tax assets 332,578 431,729 295,609 Deferred tax liabilities: Intangibles (223,676) (146,639) (157,641) Fixed Assets (108,902) (284,922) (137,632) Other — (168) (336) Total deferred tax liabilities (332,578) (431,729) (295,609) Net deferred tax assets $ — $ — $ — |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 3 Months Ended |
Dec. 31, 2021 | |
RELATED PARTY TRANSACTIONS | |
Summary of Drawbridge Related Transactions | Drawbridge Related Transactions (Cumulative) December 31, 2021 September 30, 2021 Description Loan Principal # of Shares FV of Shares Loan Principal # of Shares FV of Shares Various Notes $ 13,831,554 — $ — $ 23,831,554 — $ — Common Shares — 8,130,384 42,524,523 — 8,130,384 66,994,364 Preferred Shares - Series A — 2,335 3,012 — 2,335 3,012 Preferred Shares - Series B — 5,567,319 49,215,100 — 5,567,319 49,215,100 Total Related Party Transactions $ 13,831,554 13,700,038 $ 91,742,635 $ 23,831,554 13,700,038 $ 116,212,476 * Shares are MTI common and preferred shares. |
SUBSEQUENT EVENTS - (Tables)
SUBSEQUENT EVENTS - (Tables) | 3 Months Ended |
Dec. 31, 2021 | |
SUBSEQUENT EVENTS | |
Schedule of number of warrant exercises and common shares granted | # of Warrants # of Common Stock Date Registered Investor Name Exercised Requested 2/1/2022 Acuitas Capital LLC 259,033 709,217 2/1/2022 Esousa Holdings LLC 129,516 354,608 2/4/2022 JADR Consulting Limited PTY 50,000 126,558 2/4/2022 TDR Capital 50,000 126,558 2/4/2022 Friedlander, Michael 16,000 40,905 2/9/2022 Mogul, Jess 100,000 347,747 2/9/2022 Fallon, Jim 100,000 347,747 2/10/2022 TDR Capital 400,000 1,449,766 2/10/2022 JADR Consulting Limited PTY 400,000 1,449,766 2/10/2022 Acuitas Capital LLC 137,235 500,000 2/11/2022 Mogul, Jess 62,674 505,109 2/11/2022 Fallon, Jim 31,610 254,781 Total 1,736,068 6,212,762 |
Schedule of issuance of commons stock to employees | Name Shares David Michery 1,000,000 Kerri Sadler 300,000 Jerry Alban 300,000 Calin Popa 50,000 |
LIQUIDITY, CAPITAL RESOURCES,_2
LIQUIDITY, CAPITAL RESOURCES, AND GOING CONCERN (Details) - USD ($) | 3 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
LIQUIDITY, CAPITAL RESOURCES, AND GOING CONCERN | ||||
Cash equivalents | $ 0 | $ 0 | ||
Cash and restricted cash | 61,460 | $ 224,287 | 42,174 | $ 33,368 |
Cash used in operating activities | (14,712,802) | $ 85,312 | ||
Working capital deficit | 24,900,000 | |||
Proceeds from unsecured convertible notes | 7,260,000 | |||
Accumulated Deficit | (186,838,587) | $ (150,374,649) | ||
Proceeds from equity commitments | $ 20,000,000 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property, Equipment and Leasehold Improvements, Net (Details) | 3 Months Ended |
Dec. 31, 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 ($) | 3 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2021 | |
Cash and cash equivalents | $ 360 | $ 42,174 | |
Refundable deposits for individuals and businesses | 100 | ||
Restricted Cash and Cash Equivalents, Current | 61,000 | ||
Deferred Advertising Charges | 0 | $ 261,550 | |
Impairment charges | 1,157,323 | $ 518,023 | |
Penalty For Delays In Consummation of Merger Transaction | 13,333 | ||
Other Financing Costs Delay Charges | $ 0 | ||
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 ($) | 3 Months Ended | ||
Dec. 31, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | |
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | $ 2,791,524 | $ 2,786,163 | |
Accumulated Amortization | (514,581) | (290,904) | |
Net Carrying Amount | $ 2,276,943 | 2,495,259 | |
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 | 2,660,391 | |
Accumulated Amortization | (443,399) | (221,699) | |
Net Carrying Amount | 2,216,992 | 2,438,692 | |
Intangible asset cost | 5,361 | $ 0 | |
Intellectual property | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 71,182 | 71,182 | |
Accumulated Amortization | (71,182) | (69,205) | |
Net Carrying Amount | 1,977 | ||
Trademark | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 59,951 | 54,590 | |
Net Carrying Amount | $ 59,951 | $ 54,590 |
INTANGIBLE ASSETS - Schedule _2
INTANGIBLE ASSETS - Schedule of total future amortization expense for finite-lived intellectual property (Details) - USD ($) | 3 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2021 | |
Future Amortization Expense | |||
2022 (nine months) | $ 670,458 | ||
2023 | 886,797 | ||
2024 | 719,688 | ||
Total Future Amortization Expense | 2,276,943 | $ 2,495,259 | |
Amortization expense | $ 223,676 | $ 5,932 |
DEBT - Summary of our indebtedn
DEBT - Summary of our indebtedness (Details) - USD ($) | Dec. 31, 2021 | Nov. 05, 2021 | Sep. 30, 2021 | Sep. 03, 2021 | May 16, 2021 | May 07, 2021 |
Debt Instrument [Line Items] | ||||||
Unpaid Principal Balance | $ 19,143,280 | $ 39,448,582 | ||||
Net Carrying Value Current | 18,905,021 | 39,200,970 | ||||
Long-term | 238,259 | 247,612 | ||||
Convertible note, interest rate | 15.00% | 15.00% | 15.00% | |||
Less: Debt Discount | (8,060,555) | $ (660,000) | $ (3,726,816) | |||
Matured Notes | ||||||
Debt Instrument [Line Items] | ||||||
Unpaid Principal Balance | 3,718,585 | 5,838,591 | ||||
Net Carrying Value Current | $ 3,718,585 | $ 5,838,591 | ||||
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 | $ 14,531,554 | $ 23,831,912 | ||||
Net Carrying Value Current | $ 14,531,554 | $ 23,831,912 | ||||
Convertible note, interest rate | 28.00% | 28.00% | ||||
Promissory Notes | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Convertible note, interest rate | 28.00% | |||||
Promissory Notes | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Convertible note, interest rate | 0.00% | 28.00% | ||||
Demand Note | ||||||
Debt Instrument [Line Items] | ||||||
Unpaid Principal Balance | $ 500,000 | |||||
Net Carrying Value Current | $ 500,000 | |||||
Convertible note, interest rate | 27.00% | |||||
Convertible Unsecured Notes | ||||||
Debt Instrument [Line Items] | ||||||
Unpaid Principal Balance | $ 15,932,500 | |||||
Net Carrying Value Current | $ 15,932,500 | |||||
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 | $ 274,983 | $ 283,881 | ||||
Net Carrying Value Current | 36,724 | 36,269 | ||||
Long-term | $ 238,259 | $ 247,612 | ||||
Convertible note, interest rate | 5.00% | 5.00% | ||||
Loan Advances | ||||||
Debt Instrument [Line Items] | ||||||
Unpaid Principal Balance | $ 618,158 | $ 1,122,253 | ||||
Net Carrying Value Current | $ 618,158 | $ 1,122,253 | ||||
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 ($) | Dec. 31, 2021 | Sep. 30, 2021 |
Debt Maturities | ||
2022 (9 months) | $ 18,905,021 | |
2023 | 238,259 | |
Total | $ 19,143,280 | $ 39,448,582 |
DEBT - Notes and Advances (Deta
DEBT - Notes and Advances (Details) - USD ($) | Nov. 05, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2021 | Sep. 03, 2021 | May 07, 2021 |
Debt Instrument [Line Items] | ||||||
Maturity term | 1 year | |||||
Interest rate (as a percent) | 15.00% | 15.00% | 15.00% | |||
Amortization of debt discount | $ 19,212,176 | $ 487,876 | ||||
Carrying amount of indebtedness of debt | $ 23,192,500 | |||||
Promissory Notes | ||||||
Debt Instrument [Line Items] | ||||||
Maturity term | 3 years | |||||
Interest rate (as a percent) | 28.00% | 28.00% | ||||
Remediation of default of debt amount | $ 3,718,585 | |||||
Debt instrument interest expense | 22,438,945 | 2,406,330 | ||||
Amortization of debt discount | 19,212,176 | 486,876 | ||||
Carrying amount of indebtedness of debt | $ 23,192,500 | $ 0 | ||||
Promissory Notes | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate (as a percent) | 28.00% | |||||
Promissory Notes | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate (as a percent) | 0.00% | 28.00% |
DEBT - Convertible Debt Issuanc
DEBT - Convertible Debt Issuances and Warrants (Details) - USD ($) | Nov. 05, 2021 | Sep. 03, 2021 | Aug. 19, 2021 | Jul. 26, 2021 | Jul. 22, 2021 | May 16, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Oct. 25, 2021 | Sep. 30, 2021 | May 07, 2021 |
Debt Instrument [Line Items] | |||||||||||
Unsecured convertible note agreement with TDR Capital | $ 110,000 | $ 6,600,000 | $ 1,100,000 | $ 2,420,000 | |||||||
Convertible note debt discount rate | 10.00% | ||||||||||
Face amount of debt | $ 10,762,500 | ||||||||||
Debt interest rate | 15.00% | 15.00% | 15.00% | ||||||||
Maturity term | 1 year | ||||||||||
Amortization of debt discount | $ 19,212,176 | $ 487,876 | |||||||||
Original issue discount of convertible debt | $ 10,000 | $ 100,000 | $ 242,000 | ||||||||
Warrants exercise price | $ 0.6877 | $ 0.6877 | $ 0.6877 | $ 0.6877 | $ 0.6877 | $ 8.84 | $ 0.6877 | ||||
Warrants Term | 5 years | 5 years | |||||||||
Warrant expiration term | 5 years | 5 years | 5 years | 5 years | 5 years | ||||||
Fair value of the MAI warrants | $ 24,358,875 | $ 133,269,241,000,000 | |||||||||
Original issue discount | $ 660,000 | 3,726,816 | $ 8,060,555 | ||||||||
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 | ||||||||||
Preferred Stock Par value | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||
MTI common stock | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Shares acquire | 2,180,750 | 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 | ||||||
Preferred Stock Par value | $ 0.001 | $ 0.001 | |||||||||
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 | $ 4,400,000 | |||||||||
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 | $ 100,000 | $ 400,000 | |||||||||
Ownership percentage | 9.90% | ||||||||||
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 ($) | Oct. 25, 2021 | May 07, 2021 | Dec. 31, 2021 | Nov. 05, 2021 | Sep. 30, 2021 | Sep. 03, 2021 | Aug. 19, 2021 | Jul. 26, 2021 | Jul. 22, 2021 | May 16, 2021 |
Debt Instrument [Line Items] | ||||||||||
Convertible debt | $ 1,100,000 | |||||||||
Preferred Stock Par value | $ 0.001 | $ 0.001 | $ 0.001 | |||||||
Warrants to acquire shares of common stock | 42,759,290 | 15,075,707 | ||||||||
Warrants exercise price | $ 0.6877 | $ 8.84 | $ 0.6877 | $ 0.6877 | $ 0.6877 | $ 0.6877 | $ 0.6877 | |||
Warrants Term | 5 years | 5 years | ||||||||
Face amount of debt | $ 10,762,500 | |||||||||
Convertible note, interest rate | 15.00% | 15.00% | 15.00% | |||||||
Series C Preferred Stock | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Conversion of Stock, Shares Issued | 0.078 | |||||||||
MAI warrants | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Preferred Stock Par value | $ 0.001 | $ 0.001 | ||||||||
Warrants exercise price | $ 8.84 | $ 8.84 | $ 8.84 | $ 8.84 | $ 8.84 | |||||
TDR Capital | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Convertible note, interest rate | 10.00% | 15.00% | 15.00% | 15.00% | 15.00% | |||||
JADR Consulting Group PTY Limited | Assignment and Assumption of Rights | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Convertible debt | $ 3,300,000 | $ 6,600,000 | ||||||||
Warrants to acquire shares of common stock | 1,201,521 | 2,037,164 | ||||||||
Conversion of Stock, Amount Converted | $ 3,000,000 |
DEBT - Drawbridge Relationship
DEBT - Drawbridge Relationship (Details) - USD ($) | Jul. 16, 2021 | Jul. 31, 2020 | Dec. 31, 2021 | 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 | $ 25,367,925 | $ 33,296,648 | |||
Outstanding principal paid | $ 10,000,000 | ||||
DBI and MTI | MAI warrants | |||||
Debt Instrument [Line Items] | |||||
Common shares issued for cash (in shares) | 5,567,319 | ||||
DBI and MTI | MTI warrants | |||||
Debt Instrument [Line Items] | |||||
Common shares issued for cash (in shares) | 71,516,534 | ||||
Other DBI | |||||
Debt Instrument [Line Items] | |||||
Amounts owed to affiliated | $ 524,911 | $ 982,500 | $ 1,082,500 |
DEBT - SBA Loans (Details)
DEBT - SBA Loans (Details) - USD ($) | Dec. 27, 2021 | Nov. 29, 2021 | Nov. 11, 2021 | Mar. 29, 2019 | Nov. 23, 2018 | Nov. 30, 2020 | Sep. 30, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Nov. 05, 2021 | Sep. 30, 2021 | Sep. 03, 2021 | May 07, 2021 | Apr. 14, 2020 | Oct. 31, 2019 | Sep. 29, 2018 | May 23, 2018 |
Debt Instrument [Line Items] | |||||||||||||||||
Interest rate (as a percent) | 15.00% | 15.00% | 15.00% | ||||||||||||||
Loss on debt settlement | $ (41,096) | ||||||||||||||||
Gain on extinguishment of indebtedness, net | 74,509 | $ 880,581 | |||||||||||||||
Long-term Debt | 19,143,280 | $ 39,448,582 | |||||||||||||||
CarMoxy | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Loss on debt settlement | $ (41,904) | ||||||||||||||||
CBSG | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Loss on debt settlement | $ 74,509 | ||||||||||||||||
Repayments of Long-term Debt | $ 74,509 | ||||||||||||||||
NY Group | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Repayments of Long-term Debt | $ 140,000 | ||||||||||||||||
MABM Holding | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Repayments of Long-term Debt | $ 25,000 | ||||||||||||||||
EXIM | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Repayments of Long-term Debt | $ 1,750,000 | ||||||||||||||||
Debt, Current | $ 700,000 | ||||||||||||||||
Elegant Funding | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Repayments of Long-term Debt | $ 222,426 | $ 604,770 | |||||||||||||||
Long-term Debt | $ 185,000 | $ 458,000 | |||||||||||||||
Debt, Current | $ 185,000 | $ 438,000 | |||||||||||||||
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) | Nov. 05, 2021 | May 16, 2021USD ($)$ / shares | May 07, 2021item$ / sharesshares | Dec. 31, 2021USD ($)$ / sharesshares | Sep. 30, 2021USD ($)$ / shares | Sep. 03, 2021USD ($)$ / shares | Aug. 19, 2021$ / shares | Jul. 26, 2021$ / shares | Jul. 22, 2021$ / shares |
Debt Instrument [Line Items] | |||||||||
Interest rate (as a percent) | 15.00% | 15.00% | 15.00% | ||||||
Debt instrument term | 1 year | ||||||||
beneficial conversion feature | $ 673,184 | ||||||||
unamortized discount | $ 3,726,816 | $ 8,060,555 | $ 660,000 | ||||||
Additional warrants | shares | 42,759,290 | 15,075,707 | |||||||
Preferred Stock Par value | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | ||||||
Number of convertible debt | item | 4 | ||||||||
Warrants Term | 5 years | 5 years | |||||||
Percentage of MTI common shares | 6.00% | ||||||||
Warrants exercise price | $ / shares | $ 0.6877 | $ 0.6877 | $ 8.84 | $ 0.6877 | $ 0.6877 | $ 0.6877 | $ 0.6877 | ||
Convertible Debt | |||||||||
Debt Instrument [Line Items] | |||||||||
Unsecured convertible notes | $ 23,192,500 | ||||||||
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 | ||||||||
Convertible Debt | MTI common stock | |||||||||
Debt Instrument [Line Items] | |||||||||
Unsecured convertible notes | $ 7,260,000 |
DEBT - Schedule of Convertible
DEBT - Schedule of Convertible Notes (Details) | May 07, 2021item$ / sharesshares | Dec. 31, 2021USD ($)$ / sharesshares | Nov. 05, 2021$ / shares | Oct. 25, 2021$ / shares | Sep. 30, 2021$ / shares | Sep. 03, 2021$ / shares | Aug. 19, 2021$ / shares | Jul. 26, 2021$ / shares | Jul. 22, 2021$ / shares | May 16, 2021$ / shares |
Debt Instrument [Line Items] | ||||||||||
Convertible Note | $ | $ 23,192,500 | |||||||||
Default Interest Rate | 15.00% | 15.00% | 15.00% | |||||||
Warrants | shares | 7,876,068 | |||||||||
Exercise Price | $ / shares | $ 0.6877 | $ 8.84 | $ 0.6877 | $ 0.6877 | $ 0.6877 | $ 0.6877 | $ 0.6877 | |||
Additional warrants | shares | 42,759,290 | 15,075,707 | ||||||||
Preferred Stock Par value | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | |||||||
Number of convertible debt | item | 4 | |||||||||
Warrants Term | 5 years | 5 years | ||||||||
Percentage of MTI common shares | 6.00% | |||||||||
MAI warrants | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Warrants | shares | 254,698 | |||||||||
Exercise Price | $ / shares | $ 8.84 | $ 8.84 | $ 8.84 | $ 8.84 | $ 8.84 | |||||
Preferred Stock Par value | $ / shares | $ 0.001 | $ 0.001 | ||||||||
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. 25, 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. 22, 2026 | |||||||||
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 | |||||||||
Debt Instrument 39 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Convertible Note | $ | $ 1,100,000 | |||||||||
Interest Rate | 15.00% | |||||||||
Default Interest Rate | 20.00% | |||||||||
Maturity Date | Oct. 5, 2022 | |||||||||
Warrants | shares | 395,712 | |||||||||
Exercise Date | Oct. 5, 2026 | |||||||||
Exercise Price | $ / shares | $ 8.84 | |||||||||
Debt Instrument 40 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Convertible Note | $ | $ 385,000 | |||||||||
Interest Rate | 15.00% | |||||||||
Default Interest Rate | 20.00% | |||||||||
Maturity Date | Oct. 18, 2022 | |||||||||
Warrants | shares | 138,500 | |||||||||
Exercise Date | Oct. 18, 2026 | |||||||||
Exercise Price | $ / shares | $ 8.84 | |||||||||
Debt Instrument 41 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Convertible Note | $ | $ 1,265,000 | |||||||||
Interest Rate | 15.00% | |||||||||
Default Interest Rate | 20.00% | |||||||||
Maturity Date | Oct. 19, 2022 | |||||||||
Warrants | shares | 455,068 | |||||||||
Exercise Date | Oct. 19, 2026 | |||||||||
Exercise Price | $ / shares | $ 8.84 | |||||||||
Debt Instrument 42 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Convertible Note | $ | $ 550,000 | |||||||||
Interest Rate | 15.00% | |||||||||
Default Interest Rate | 20.00% | |||||||||
Maturity Date | Oct. 27, 2022 | |||||||||
Warrants | shares | 197,857 | |||||||||
Exercise Date | Oct. 27, 2026 | |||||||||
Exercise Price | $ / shares | $ 8.84 | |||||||||
Debt Instrument 43 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Convertible Note | $ | $ 1,100,000 | |||||||||
Interest Rate | 15.00% | |||||||||
Default Interest Rate | 20.00% | |||||||||
Maturity Date | Oct. 27, 2022 | |||||||||
Warrants | shares | 395,712 | |||||||||
Exercise Date | Oct. 27, 2026 | |||||||||
Exercise Price | $ / shares | $ 8.84 | |||||||||
Debt Instrument 44 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Convertible Note | $ | $ 2,750,000 | |||||||||
Interest Rate | 15.00% | |||||||||
Default Interest Rate | 20.00% | |||||||||
Maturity Date | Nov. 4, 2022 | |||||||||
Warrants | shares | 989,277 | |||||||||
Exercise Date | Nov. 4, 2026 | |||||||||
Exercise Price | $ / shares | $ 8.84 | |||||||||
Debt Instrument 45 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Convertible Note | $ | $ 110,000 | |||||||||
Interest Rate | 15.00% | |||||||||
Default Interest Rate | 20.00% | |||||||||
Maturity Date | Nov. 5, 2022 | |||||||||
Warrants | shares | 37,356 | |||||||||
Exercise Date | Nov. 5, 2026 | |||||||||
Exercise Price | $ / shares | $ 8.84 | |||||||||
Debt Instrument 46 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Warrants | shares | 490,030 | |||||||||
Exercise Date | Nov. 5, 2026 | |||||||||
Exercise Price | $ / shares | $ 8.84 | |||||||||
Convertible Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Exercise Price | $ / shares | $ 0.6877 | |||||||||
Additional warrants | shares | 1,866,665 | |||||||||
Convertible Notes | MAI warrants | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Additional warrants | shares | 145,313 |
FAIR VALUE MEASUREMENTS AND F_2
FAIR VALUE MEASUREMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - USD ($) | Dec. 31, 2021 | May 16, 2021 |
FAIR VALUE MEASUREMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS | ||
Warrants | $ 133,269,241,000,000 | $ 24,358,875 |
DEFICIENCY IN STOCKHOLDERS' E_3
DEFICIENCY IN STOCKHOLDERS' EQUITY - Additional Information (Details) | 3 Months Ended | 12 Months Ended | ||||||
Dec. 31, 2021USD ($)Vote$ / sharesshares | Sep. 30, 2021USD ($)$ / sharesshares | Sep. 03, 2021$ / shares | Aug. 19, 2021$ / shares | Jul. 26, 2021$ / shares | Jul. 22, 2021$ / shares | May 16, 2021$ / shares | May 07, 2021$ / sharesshares | |
Class of Stock [Line Items] | ||||||||
Reverse stock ratio | 12.8485 | |||||||
Number of votes per share | Vote | 1,000 | |||||||
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 | 23,936,162 | 7,048,387 | ||||||
Common Stock, shares outstanding | shares | 23,936,162 | 7,048,387 | ||||||
Number of votes per common share | Vote | 1 | |||||||
Common stock dividends declared or paid | $ | $ 0 | |||||||
Warrants exercise price | $ / shares | $ 8.84 | $ 0.6877 | $ 0.6877 | $ 0.6877 | $ 0.6877 | $ 0.6877 | $ 0.6877 | |
Warrants to acquire shares of common stock | shares | 15,075,707 | 42,759,290 | ||||||
Exercisable term of warrants | 5 years | 5 years | ||||||
Fair value of warrants | $ | $ 133,269,241 | |||||||
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] | ||||||||
Conversion ratio | 1 | |||||||
Series C Preferred Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Preferred stock dividends rate, percentage | 15.00% | |||||||
Percentage of redemption price in first year | 0.00% | |||||||
Percentage of redemption price in second year | 120.00% | |||||||
Percentage of redemption price in third year | 115.00% | |||||||
Percentage of redemption price in fourth year | 110.00% | |||||||
Percentage of redemption price in fifth year | 105.00% | |||||||
Percentage of redemption price in sixth year and thereafter | 100.00% |
DEFICIENCY IN STOCKHOLDERS' E_4
DEFICIENCY IN STOCKHOLDERS' EQUITY - Summary of Warrant Activity (Details) - $ / shares | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
MAI shares | ||
Warrants outstanding at ending | 7,876,068 | |
Weighted Average Exercise Price | ||
Warrants outstanding at ending | $ 8.84 | |
Warrants | ||
MAI shares | ||
Warrants outstanding at beginning | 4,924,447 | 540,905 |
Warrants granted | 10,151,260 | 756,448 |
Warrants expired | (97,308) | |
Warrants outstanding at ending | 15,075,707 | 1,200,045 |
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 | Dec. 31, 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 | 135 |
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 | 0.98 |
Risk-free interest rate | Maximum | |
Class of Warrant or Right [Line Items] | |
Measurement input | 1.17 |
Common stock price | |
Class of Warrant or Right [Line Items] | |
Measurement input | 4.16 |
DEFICIENCY IN STOCKHOLDERS' E_6
DEFICIENCY IN STOCKHOLDERS' EQUITY - Equity Transactions (Details) - USD ($) | Nov. 04, 2021 | Jul. 16, 2021 | May 07, 2021 | Dec. 31, 2021 | Nov. 05, 2021 | Sep. 03, 2021 | Aug. 19, 2021 | Jul. 26, 2021 | Jul. 22, 2021 | May 16, 2021 |
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Amount of SPA and registration rights agreement | $ 20,000,000 | |||||||||
Warrants exercise price | $ 0.6877 | $ 8.84 | $ 0.6877 | $ 0.6877 | $ 0.6877 | $ 0.6877 | $ 0.6877 | |||
Exercisable term of warrants | 5 years | 5 years | ||||||||
Acuitas Group Holdings | ||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Proceeds from issuance of shares | $ 20,000,000 | |||||||||
Warrants exercise price | $ 8.84 | |||||||||
Exercisable term of warrants | 5 years | |||||||||
Purchase agreement amount | $ 20,000,000 | |||||||||
Price per share in purchase agreement (USD per share) | $ 8.84 | |||||||||
Warrants Issued | 6,793,051 | |||||||||
Acuitas Group Holdings | Series C Preferred Stock | ||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Stock Issued During Period, Shares, New Issues | 2,767,745 | |||||||||
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 |
DEFICIENCY IN STOCKHOLDERS' E_7
DEFICIENCY IN STOCKHOLDERS' EQUITY - Post-merger shares for equity capitalization (Details) - USD ($) | 3 Months Ended | ||||||
Dec. 31, 2021 | Sep. 03, 2021 | Aug. 19, 2021 | Jul. 26, 2021 | Jul. 22, 2021 | May 16, 2021 | May 07, 2021 | |
Schedule of Capitalization, Equity [Line Items] | |||||||
Series C Preferred Stock | $ 84,900 | ||||||
Warrants | 7,876,068 | ||||||
Additional Warrant Issued | 9,016 | ||||||
Exercise Price | $ 8.84 | $ 0.6877 | $ 0.6877 | $ 0.6877 | $ 0.6877 | $ 0.6877 | $ 0.6877 |
Stock 8,490 and warrant 25,470 | |||||||
Schedule of Capitalization, Equity [Line Items] | |||||||
Series C Preferred Stock | $ 8,490 | ||||||
Maturity Date | Jul. 23, 2026 | ||||||
Exercise Price | $ 8.84 | ||||||
Stock 5,660 and warrant 16,980 | |||||||
Schedule of Capitalization, Equity [Line Items] | |||||||
Series C Preferred Stock | $ 5,660 | ||||||
Maturity Date | Jul. 23, 2026 | ||||||
Exercise Price | $ 8.84 | ||||||
Stock 11,320 and warrant 33,960 | |||||||
Schedule of Capitalization, Equity [Line Items] | |||||||
Series C Preferred Stock | $ 11,320 | ||||||
Maturity Date | Jul. 23, 2026 | ||||||
Exercise Price | $ 8.84 | ||||||
Stock 8,490 and warrant 25,470. | |||||||
Schedule of Capitalization, Equity [Line Items] | |||||||
Series C Preferred Stock | $ 8,490 | ||||||
Maturity Date | Jul. 23, 2026 | ||||||
Exercise Price | $ 8.84 | ||||||
Warrant 1,528 | |||||||
Schedule of Capitalization, Equity [Line Items] | |||||||
Additional Warrant Issued | 9,016 | ||||||
Maturity Date | Jul. 23, 2026 | ||||||
Exercise Price | $ 8.84 | ||||||
Stock 19,810 and warrant 59,429 | |||||||
Schedule of Capitalization, Equity [Line Items] | |||||||
Series C Preferred Stock | $ 19,810 | ||||||
Maturity Date | Sep. 8, 2026 | ||||||
Exercise Price | $ 8.84 | ||||||
Stock 19,810 and warrant 59,429. | |||||||
Schedule of Capitalization, Equity [Line Items] | |||||||
Series C Preferred Stock | $ 19,810 | ||||||
Maturity Date | Sep. 8, 2026 | ||||||
Exercise Price | $ 8.84 | ||||||
Stock 11,320 and warrant 33,960. | |||||||
Schedule of Capitalization, Equity [Line Items] | |||||||
Series C Preferred Stock | $ 11,320 | ||||||
Maturity Date | Sep. 8, 2026 | ||||||
Exercise Price | $ 8.84 | ||||||
MAI warrants | |||||||
Schedule of Capitalization, Equity [Line Items] | |||||||
Warrants | 254,698 | ||||||
Exercise Price | $ 8.84 | $ 8.84 | $ 8.84 | $ 8.84 | $ 8.84 | ||
MAI warrants | Stock 8,490 and warrant 25,470 | |||||||
Schedule of Capitalization, Equity [Line Items] | |||||||
Warrants | 25,470 | ||||||
MAI warrants | Stock 5,660 and warrant 16,980 | |||||||
Schedule of Capitalization, Equity [Line Items] | |||||||
Warrants | 16,980 | ||||||
MAI warrants | Stock 11,320 and warrant 33,960 | |||||||
Schedule of Capitalization, Equity [Line Items] | |||||||
Warrants | 33,960 | ||||||
MAI warrants | Stock 8,490 and warrant 25,470. | |||||||
Schedule of Capitalization, Equity [Line Items] | |||||||
Warrants | 25,470 | ||||||
MAI warrants | Stock 19,810 and warrant 59,429 | |||||||
Schedule of Capitalization, Equity [Line Items] | |||||||
Warrants | 59,429 | ||||||
MAI warrants | Stock 19,810 and warrant 59,429. | |||||||
Schedule of Capitalization, Equity [Line Items] | |||||||
Warrants | 59,429 | ||||||
MAI warrants | Stock 11,320 and warrant 33,960. | |||||||
Schedule of Capitalization, Equity [Line Items] | |||||||
Warrants | 33,960 |
MTI SHARE- BASED COMPENSATION_2
MTI SHARE- BASED COMPENSATION (Details) - USD ($) | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 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 | $ 1,604,293 | $ 566,179 |
MTI shares for services | 2,495,487 | 26,162 |
MTI Share-Based compensation expense | $ 4,099,780 | $ 592,341 |
ACCRUED EXPENSES AND OTHER CU_3
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - USD ($) | Dec. 31, 2021 | Sep. 30, 2021 |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | ||
Accrued expense - other | $ 1,229,929 | $ 2,051,696 |
Accrued payroll | 4,596,272 | 4,586,057 |
Accrued interest | 12,446,496 | 12,489,012 |
Total | 18,272,697 | 19,126,765 |
Delinquent IRS and state tax liabilities | $ 4,277,297 | $ 3,904,720 |
NOTE RECEIVABLE (Details)
NOTE RECEIVABLE (Details) - USD ($) | Dec. 31, 2021 | Oct. 08, 2021 | Sep. 30, 2021 | May 07, 2021 |
Class of Warrant or Right [Line Items] | ||||
Warrants to acquire shares of common stock | 15,075,707 | 42,759,290 | ||
Principal amount | $ 15,090,552 | $ 15,000,000 | $ 90,552 | |
Securities Purchase Agreement | ||||
Class of Warrant or Right [Line Items] | ||||
Warrants to acquire shares of common stock | 15,000,000 |
PROPERTY, EQUIPMENT AND LEASE_3
PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET (Details) - USD ($) | 3 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2021 | |
Property, Plant and Equipment [Line Items] | |||
Subtotal | $ 15,769,069 | $ 3,765,418 | |
Less: Accumulated Depreciation | (2,665,364) | (2,583,941) | |
Property, Equipment and Leasehold Improvements, Net | 13,103,704 | 1,181,477 | |
Depreciation | 84,022 | $ 102,495 | |
Building | |||
Property, Plant and Equipment [Line Items] | |||
Subtotal | 8,078,757 | 804,654 | |
Furniture and Equipment | |||
Property, Plant and Equipment [Line Items] | |||
Subtotal | 485,534 | 111,102 | |
Vehicles | |||
Property, Plant and Equipment [Line Items] | |||
Subtotal | 45,887 | 45,887 | |
Computer Hardware and Software | |||
Property, Plant and Equipment [Line Items] | |||
Subtotal | 172,505 | 139,742 | |
Machinery and Equipment | |||
Property, Plant and Equipment [Line Items] | |||
Subtotal | 6,946,019 | 2,597,654 | |
Leasehold Improvements | |||
Property, Plant and Equipment [Line Items] | |||
Subtotal | $ 40,367 | $ 66,379 |
PROPERTY, EQUIPMENT AND LEASE_4
PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET - Mullen Investment Properties (Details) | Nov. 12, 2021USD ($)a |
PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET | |
Payments to acquire property | $ 12,000,000 |
Square Feet of EV Manufacturing Facility | 127,400 |
Square Feet Of Manufacturing Space | 124,000 |
Area of Land | a | 100 |
OTHER ASSETS (Details)
OTHER ASSETS (Details) - USD ($) | Dec. 31, 2021 | Sep. 30, 2021 |
OTHER ASSETS | ||
Coda Materials | $ 76,588 | $ 76,587 |
Show Room Cars | 4,082,665 | 2,739,995 |
Security Deposits | 186,640 | 186,640 |
Deposit on Property | 1,240,000 | |
Total Other Assets | $ 4,345,893 | $ 4,243,222 |
OPERATING EXPENSES (Details)
OPERATING EXPENSES (Details) - USD ($) | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
OPERATING EXPENSES | ||
Professional Fees | $ 5,139,332 | $ 941,728 |
Salaries | 3,161,920 | 1,151,668 |
Depreciation and amortization | 307,699 | 108,427 |
Lease | 459,535 | 356,168 |
Settlements and penalties | 294,812 | 54,588 |
Employee benefits | 368,052 | 83,293 |
Utilities and office expense | 179,028 | 67,457 |
Advertising and promotions | 2,452,790 | 29,541 |
Taxes and licenses | 72,279 | 5,130 |
Repairs and maintenance | 19,220 | 41,880 |
Other | 446,416 | 112,798 |
Total General and Administrative Expenses | 12,901,084 | 2,952,678 |
Shares for services | $ 916,295 | $ 26,162 |
OPERATING EXPENSES - Research a
OPERATING EXPENSES - Research and development (Details) - USD ($) | 1 Months Ended | 3 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Research & Development | |||
Professional fees | $ 1,157,323 | $ 518,023 | |
Total | $ 1,157,323 | $ 518,023 | |
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 ($) | 3 Months Ended | 12 Months Ended |
Dec. 31, 2021 | Sep. 30, 2021 | |
Assets: | ||
Operating lease right-of-use assets | $ 2,213,991 | $ 2,350,929 |
Liabilities: | ||
Operating lease liabilities, current | (623,343) | (599,898) |
Operating lease liabilities, non-current | (1,697,222) | (1,857,894) |
Total lease liabilities | $ (2,320,565) | $ (2,457,792) |
Operating leases | 3 years 1 month 20 days | 3 years 4 months 2 days |
Operating leases | 28.00% | 28.00% |
Cash paid for amounts included in the measurement of lease liabilities for the periods ended December 31, 2021, and September 30, 2021 | $ 293,387 | $ 1,057,438 |
LEASES - Operating lease costs
LEASES - Operating lease costs (Details) - USD ($) | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Operating lease costs: | ||
Fixed lease cost | $ 286,482 | $ 150,235 |
Variable lease cost | 129,605 | 199,367 |
Short-term lease cost | 96,592 | 27,795 |
Sublease income | (53,144) | (21,229) |
Total operating lease costs | $ 459,535 | $ 356,168 |
LEASES - Maturities of operatin
LEASES - Maturities of operating lease liabilities (Details) - USD ($) | Dec. 31, 2021 | Sep. 30, 2021 |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | ||
2022 (Remaining 9 months) | $ 908,149 | |
2023 | 1,157,693 | |
2024 | 824,287 | |
2025 | 436,155 | |
2026 | 222,787 | |
Total lease payments | 3,549,071 | |
Less: Imputed interest | (1,228,506) | |
Total lease liabilities | $ 2,320,565 | $ 2,457,792 |
LEASES - Additional Information
LEASES - Additional Information (Details) | 3 Months Ended | ||
Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Nov. 12, 2021a | |
Lessee, Lease, Description [Line Items] | |||
Option to extend | true | ||
Option to terminate | true | ||
Area of land | a | 100 | ||
Payments for purchase of plant | $ | $ 10,462,219 | $ 31,335 | |
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. 31, 2021 | Sep. 30, 2021 | Sep. 30, 2020 |
Operating Loss Carryforwards [Line Items] | |||
Income tax NOL carryforwards | $ 66,000,217 | $ 38,676,405 | $ 31,413,378 |
Federal | |||
Operating Loss Carryforwards [Line Items] | |||
Income tax NOL carryforwards | 235,951,407 | 192,657,535 | |
California | |||
Operating Loss Carryforwards [Line Items] | |||
Income tax NOL carryforwards | $ 194,955,026 | $ 191,722,566 |
INCOME TAXES - Summary of Incom
INCOME TAXES - Summary of Income Tax NOL carryforwards (Details) - USD ($) | Dec. 31, 2021 | Sep. 30, 2021 | Sep. 30, 2020 |
Operating Loss Carryforwards [Line Items] | |||
Net Operating loss carryforwards | $ 66,000,217 | $ 38,676,405 | $ 31,413,378 |
Federal | |||
Operating Loss Carryforwards [Line Items] | |||
Net Operating loss carryforwards | 235,951,407 | 192,657,535 | |
Federal | 2034-2037 | |||
Operating Loss Carryforwards [Line Items] | |||
Net Operating loss carryforwards | 36,566,294 | 29,838,716 | |
Federal | Indefinite | |||
Operating Loss Carryforwards [Line Items] | |||
Net Operating loss carryforwards | 199,385,113 | 162,818,819 | |
California | |||
Operating Loss Carryforwards [Line Items] | |||
Net Operating loss carryforwards | 194,955,026 | 191,722,566 | |
California | 2034-2040 | |||
Operating Loss Carryforwards [Line Items] | |||
Net Operating loss carryforwards | $ 194,955,026 | $ 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 ($) | 3 Months Ended | 12 Months Ended |
Dec. 31, 2021 | Sep. 30, 2021 | |
Effective Income Tax Rate Reconciliation, Amount | ||
Income tax benefit at statutory rate | $ (7,657,427) | $ (9,247,200) |
State income taxes | 800 | |
Permanent Differences | 430,252 | 158,166 |
Valuation Allowance | 7,229,304 | 9,091,163 |
Other | $ (2,129) | (2,129) |
Total (benefit) provision for income taxes | $ 800 | |
Effective Income Tax Rate Reconciliation, Percent | ||
Income tax benefit at statutory rate | 21.00% | 21.00% |
Permanent Differences | (0.35%) | (0.36%) |
Valuation Allowance | (20.65%) | (20.65%) |
INCOME TAXES - Summary of Signi
INCOME TAXES - Summary of Significant Component of Net Deferred Tax Assets (Details) - USD ($) | Dec. 31, 2021 | Sep. 30, 2021 | Sep. 30, 2020 |
Deferred tax assets: | |||
Net Operating loss carryforwards | $ 66,000,217 | $ 38,676,405 | $ 31,413,378 |
Charitable Contributions | 894 | 1,176 | |
Accrued Expenses | 226,308 | 315,555 | 104,164 |
Impairment Other | 83,845 | ||
Other Assets | 364,419 | 261,842 | |
163(j) Limitation | 19,203,511 | 14,491,332 | 4,178,291 |
Total gross deferred tax assets | 85,430,036 | 53,848,604 | 36,042,696 |
Less valuation allowance | (85,430,036) | (53,416,875) | (35,747,087) |
Total net deferred tax assets | 332,578 | 431,729 | 295,609 |
Deferred tax liabilities: | |||
Intangibles | (223,676) | (146,639) | (157,641) |
Fixed Assets | (108,902) | (284,922) | (137,632) |
Other | (168) | (336) | |
Total deferred tax liabilities | $ (332,578) | $ (431,729) | $ (295,609) |
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 - Equi
CONTINGENCIES AND CLAIMS - Equity Financing (Details) | Sep. 01, 2021USD ($)D | May 07, 2021USD ($) |
Acuitas Group Holdings | ||
Class of Stock [Line Items] | ||
Purchase agreement amount | $ 20,000,000 | |
Esousa Holdings, LLC | ||
Class of Stock [Line Items] | ||
Purchase agreement amount | $ 30,000,000 | |
Purchase agreement amount per month | $ 2,500,000 | |
Purchase agreement amount payment term | 12 months | |
Percentage of outstanding common stock | 9.90% | |
Percentage of volume weighted average share price of the common stock | 95.00% | |
Threshold number of trading days | D | 10 | |
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 |
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 | Dec. 31, 2021 |
Payroll Tax Liability | ||
CONTINGENCIES AND CLAIMS | ||
Liability associated with past due amounts | $ 4,200,000 | |
EDD | ||
CONTINGENCIES AND CLAIMS | ||
Amount of monthly payments | $ 10,000 | |
Aggregate liability, settlement amount | $ 370,067 |
CONTINGENCIES AND CLAIMS - Inve
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 ($) | Dec. 31, 2021USD ($) |
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 ($) | Aug. 13, 2021 | Mar. 31, 2021 | Dec. 31, 2021 | Sep. 30, 2021 |
CONTINGENCIES AND CLAIMS | ||||
Litigation Liability | $ 0 | |||
Common Stock; $0.001 par value; 500,000,000 shares authorized; 23,936,162 and 7,048,386 issued and outstanding at December 31, 2021 and September 30, 2021 respectively. | $ 23,935 | $ 7,048 | ||
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 years | |||
Common stock issued for litigation settlement | 500,000 | |||
Common Stock; $0.001 par value; 500,000,000 shares authorized; 23,936,162 and 7,048,386 issued and outstanding at December 31, 2021 and September 30, 2021 respectively. | $ 1,250,000 | |||
Litigation settlement paid in cash | $ 50,000 |
RELATED PARTY TRANSACTIONS - Dr
RELATED PARTY TRANSACTIONS - Drawbridge Related Transactions (Details) - Drawbridge - USD ($) | Dec. 31, 2021 | Sep. 30, 2021 |
Related Party Transaction [Line Items] | ||
Loan Principal | $ 13,831,554 | $ 23,831,554 |
Number of Shares | 13,700,038 | 13,700,038 |
Fair value of Shares | $ 91,742,635 | $ 116,212,476 |
Default interest rate | 28.00% | |
Accrued interest | $ 11,536,371 | |
Various Notes | ||
Related Party Transaction [Line Items] | ||
Loan Principal | $ 13,831,554 | $ 23,831,554 |
Common and preferred shares | Common Stock | ||
Related Party Transaction [Line Items] | ||
Number of Shares | 8,130,384 | 8,130,384 |
Fair value of Shares | $ 42,524,523 | $ 66,994,364 |
Common and preferred shares | Series A Preferred Stock | ||
Related Party Transaction [Line Items] | ||
Number of Shares | 2,335 | 2,335 |
Fair value of Shares | $ 3,012 | $ 3,012 |
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 | $ 49,215,100 | $ 49,215,100 |
RELATED PARTY TRANSACTIONS - Ch
RELATED PARTY TRANSACTIONS - Chief Executive Officer Loans to MTI (Details) - USD ($) | Oct. 26, 2021 | Dec. 31, 2021 | Sep. 30, 2021 |
Consulting agreements | Mary Winters, Corporate Secretary and Director | |||
Related Party Transaction [Line Items] | |||
Annual salary under agreement | $ 60,000 | ||
Monthly salary under agreement | $ 5,000 | ||
Chief Executive Officer [Member] | |||
Related Party Transaction [Line Items] | |||
Outstanding balances for loans to related parties | $ 0 | $ 479,914 |
RELATED PARTY TRANSACTIONS - Wi
RELATED PARTY TRANSACTIONS - William Miltner (Details) | 3 Months Ended |
Dec. 31, 2021USD ($) | |
RELATED PARTY TRANSACTIONS | |
Amount paid for legal services | $ 231,483 |
RELATED PARTY TRANSACTIONS - Eq
RELATED PARTY TRANSACTIONS - Equity Warrants (EXCHANGE AGREEMENT and EQUITY WARRANTS) - (Details) - USD ($) | Dec. 31, 2021 | May 16, 2021 |
RELATED PARTY TRANSACTIONS | ||
Warrants, fixed and determinable price per common share | $ 8.84 | |
Fair value of the MAI warrants | $ 133,269,241,000,000 | $ 24,358,875 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Subsequent event | Jan. 14, 2022USD ($) |
Subsequent Event [Line Items] | |
Letter of amount maximum borrowing capacity | $ 1,000,000 |
Total agreed repayment amount | 1,150,000 |
Letter of Intent | |
Subsequent Event [Line Items] | |
Term loan amount | 250,000 |
Mullen Automotive | Letter of Intent | |
Subsequent Event [Line Items] | |
Term loan amount | $ 750,000 |
SUBSEQUENT EVENTS - S-3 Registr
SUBSEQUENT EVENTS - S-3 Registration (Details) - Subsequent Event - Registration Rights Agreement | Feb. 03, 2022USD ($)shares |
SUBSEQUENT EVENTS | |
Common shares issued for cash (in shares) | 228,568,886 |
Common stock shares issuable upon exercise of warrants | 148,139,757 |
Common stock shares issuable upon conversion of note shares | 2,454,240 |
Common stock shares issuable pursuant to equity line of credit | 30,927,835 |
Proceeds from sale or disposition of shares | $ | $ 0 |
Series B | |
SUBSEQUENT EVENTS | |
Common stock issuable upon conversion of preferred stock | 5,567,319 |
Series C | |
SUBSEQUENT EVENTS | |
Common stock issuable upon conversion of preferred stock | 30,087,677 |
David Michery | |
SUBSEQUENT EVENTS | |
Common shares issued for cash (in shares) | 11,392,058 |
SUBSEQUENT EVENTS - Warrant Exe
SUBSEQUENT EVENTS - Warrant Exercises (Details) - USD ($) | Feb. 11, 2022 | Feb. 10, 2022 | Feb. 09, 2022 | Feb. 04, 2022 | Feb. 01, 2022 | Dec. 31, 2021 | May 07, 2021 |
Subsequent Event [Line Items] | |||||||
Warrants to acquire shares of common stock | 15,075,707 | 42,759,290 | |||||
Subsequent event | |||||||
Subsequent Event [Line Items] | |||||||
Warrants Exercised | $ 1,736,068 | ||||||
Warrants to acquire shares of common stock | 6,212,762 | ||||||
Subsequent event | Acuitas Group LLC | |||||||
Subsequent Event [Line Items] | |||||||
Warrants Exercised | $ 137,235 | $ 259,033 | |||||
Warrants to acquire shares of common stock | 500,000 | 709,217 | |||||
Subsequent event | Esousa Holdings, LLC | |||||||
Subsequent Event [Line Items] | |||||||
Warrants Exercised | $ 129,516 | ||||||
Warrants to acquire shares of common stock | 354,608 | ||||||
Subsequent event | JADR Consulting Limited PTY | |||||||
Subsequent Event [Line Items] | |||||||
Warrants Exercised | $ 400,000 | $ 50,000 | |||||
Warrants to acquire shares of common stock | 1,449,766 | 126,558 | |||||
Subsequent event | TDR Capital | |||||||
Subsequent Event [Line Items] | |||||||
Warrants Exercised | $ 400,000 | $ 50,000 | |||||
Warrants to acquire shares of common stock | 1,449,766 | 126,558 | |||||
Subsequent event | Friedlander, Michael | |||||||
Subsequent Event [Line Items] | |||||||
Warrants Exercised | $ 16,000 | ||||||
Warrants to acquire shares of common stock | 40,905 | ||||||
Subsequent event | Mogul, Jess | |||||||
Subsequent Event [Line Items] | |||||||
Warrants Exercised | $ 62,674 | $ 100,000 | |||||
Warrants to acquire shares of common stock | 505,109 | 347,747 | |||||
Subsequent event | Fallon, Jim | |||||||
Subsequent Event [Line Items] | |||||||
Warrants Exercised | $ 31,610 | $ 100,000 | |||||
Warrants to acquire shares of common stock | 254,781 | 347,747 |
SUBSEQUENT EVENTS - 30 million
SUBSEQUENT EVENTS - 30 million Esousa Equity Line of Credit - Drawdown (Details) - USD ($) | Feb. 04, 2022 | Feb. 03, 2022 | Sep. 01, 2021 | Dec. 31, 2021 | Sep. 30, 2021 |
Subsequent Event [Line Items] | |||||
Common Stock, par value | $ 0.001 | $ 0.001 | |||
Esousa Holdings, LLC | |||||
Subsequent Event [Line Items] | |||||
Purchase agreement amount | $ 30,000,000 | ||||
Purchase agreement amount per month | $ 2,500,000 | ||||
Purchase agreement amount payment term | 12 months | ||||
Percentage of outstanding common stock | 9.90% | ||||
Esousa Holdings, LLC | Minimum | |||||
Subsequent Event [Line Items] | |||||
Percentage of outstanding common stock | 9.90% | ||||
Subsequent event | |||||
Subsequent Event [Line Items] | |||||
Additional shares registered | 5,979,500 | ||||
Common Stock, par value | $ 0.001 | ||||
Subsequent event | Esousa Holdings, LLC | |||||
Subsequent Event [Line Items] | |||||
Proceeds from line of credit | $ 1,125,000 | ||||
Common shares issued for cash (in shares) | 1,144,688 | ||||
Numerator for arriving line of credit | $ 2,500,000 | ||||
Remaining borrowing capacity | $ 2,500,000 | ||||
Daily closing share price | $ 2.73 | ||||
Multiplying factor as a percentage for arriving equity line of credit | 125.00% |
SUBSEQUENT EVENTS - Preferred M
SUBSEQUENT EVENTS - Preferred Management Partners, Inc. - Consulting Agreement (Details) - shares | Jan. 18, 2022 | Jan. 11, 2022 | Sep. 30, 2021 |
Preferred Management Partners, Inc. | |||
SUBSEQUENT EVENTS | |||
Common shares issued for cash (in shares) | 750,000 | ||
Subsequent Event | Employee | |||
SUBSEQUENT EVENTS | |||
Common shares issued for cash (in shares) | 1,908,000 | ||
Subsequent Event | David Michery | Employee | |||
SUBSEQUENT EVENTS | |||
Common shares issued for cash (in shares) | 1,000,000 | ||
Subsequent Event | Kerri Sadler | Employee | |||
SUBSEQUENT EVENTS | |||
Common shares issued for cash (in shares) | 300,000 | ||
Subsequent Event | Jerry Alban | Employee | |||
SUBSEQUENT EVENTS | |||
Common shares issued for cash (in shares) | 300,000 | ||
Subsequent Event | Calin Popa | Employee | |||
SUBSEQUENT EVENTS | |||
Common shares issued for cash (in shares) | 50,000 | ||
Subsequent Event | Preferred Management Partners, Inc. | |||
SUBSEQUENT EVENTS | |||
Common shares issued for cash (in shares) | 750,000 |
SUBSEQUENT EVENTS - Amendment t
SUBSEQUENT EVENTS - Amendment to Convertible Preferred Security and Warrant Agreements (Details) - $ / shares | Feb. 10, 2022 | Feb. 09, 2022 | Dec. 31, 2021 | Sep. 03, 2021 | Aug. 19, 2021 | Jul. 26, 2021 | Jul. 22, 2021 | May 16, 2021 | May 07, 2021 |
Subsequent Event [Line Items] | |||||||||
Warrants exercise price | $ 8.84 | $ 0.6877 | $ 0.6877 | $ 0.6877 | $ 0.6877 | $ 0.6877 | $ 0.6877 | ||
Subsequent Event | |||||||||
Subsequent Event [Line Items] | |||||||||
Warrants exercise price | $ 8.834 | $ 0.6877 | |||||||
Increase in exercise price | $ 3 |