| Summary of Significant Accounting Policies | NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Consolidation The consolidated financial statements include the
Company’s wholly owned subsidiaries and the accounts of its subsidiaries for which it was determined that Company has operational
and management control. The Company’s consolidated subsidiaries and/or controlled entities are as follows:
Name of consolidated subsidiary or entity State or other jurisdiction of incorporation or organization Date of incorporation or formation (date of acquisition/disposition, if applicable) Attributable interest at September 30, 2019 Attributable interest at September 30, 2020
Psoria-Shield Inc. (“PSI”) The State of Florida
June 2009 (August 2012) 100 % 51 %(1)
StealthCo, Inc. (“StealthCo”) The State of Illinois March 2014 100 % 100 %
Psoria Development Company LLC. (“PDC”) The State of Illinois
January 2015/ November 2018 0 % 0 %
NEO Phototherapy LLC (“NEO”) The State of Illinois December 2018 51 %(1) 0 %
Protec Scientific, Inc (“Protec”) The State of New York April 2020 0 % 38 % (1) - Effective April 30, 2020, the Company’s 51% interest in NEO
was converted into a 51% interest in PSI. Use of Estimates The preparation of the consolidated financial statements
in conformity with accounting principles generally accepted in the U.S requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the financial statement date, and reported
amounts of revenue and expenses during the reporting period. Significant estimates are used in the valuation of accounts receivable and
allowance for uncollectible amounts, inventory and obsolescence reserves, accruals for potential liabilities, valuations of stock-based
compensation, and realization of deferred tax assets, among others. Actual results could differ from these estimates. Income (Loss) Per Share Basic loss per share is computed by dividing net loss
applicable to common stockholders by the weighted average number of outstanding common shares during the period. Diluted loss per share
is computed by dividing the net loss applicable to common stockholders by the weighted average number of common shares outstanding plus
the number of additional common shares that would have been outstanding if all dilutive potential common shares had been issued. For the
three months ended December 31, 2020 and 2019, the basic and diluted shares outstanding were the same, as potentially dilutive shares
were considered anti-dilutive. At December 31, 2020 and 2019, the dilutive impact of outstanding stock options of 12,665,238 and 15,037,738
shares, respectively, and outstanding warrants for 67,634,049 and 66,484,049 shares, respectively, have been excluded because their impact
on the loss per share is anti-dilutive. Revenue Recognition The company records revenue under the guidance of
Accounting Standards Codification (“ASC“) 606, Revenue from Contracts with Customers (Topic 606) For trade sales, the Company generates its revenue
from sales contracts with customers with revenues being generated upon the shipment of merchandise, or for c We sell our products through two main sales channels:
1) directly to customers who use our products (the “Direct Channel”) and 2) to distribution partners who resell our products
(the “Indirect Channel”). Under the Direct Channel, we sell our products to
and we receive payment directly from customers who purchase our products. Under our Indirect Channel, we have entered into distribution
agreements that allow the distributors to sell our products and fulfill performance obligations under the agreements. We determine revenue recognition through the following
steps:
● Identification of the contract, or contracts, with a customer
● Identification of the performance obligations in the contract
● Determination of the transaction price
● Allocation of the transaction price to the performance obligations in the contract
● Recognition of revenue when, or as, we satisfy a performance obligation. Revenue is generally recognized upon shipment or when
a service has been completed, unless we have significant performance obligations for services still to be completed. We recognize revenue
when a material reversal is no longer probable. Payments received before the relevant criteria for revenue recognition are satisfied are
recorded as deferred revenue. There was no deferred revenue at December 31, 2020 and 2019. Non-controlling Interests In December 2018, PSI entered into a Joint Venture
Agreement with GEN2 for further development, marketing, licensing and/or sale of PSI technology and products. Pursuant to the Joint Venture
Agreement, the venture will be conducted through NEO Phototherapy, Inc. (“NEO”). PSI and GEN2 will be the members of NEO,
owning 50.5% and 36.0%, respectively, of the Units issued in connection with the organization of NEO. An additional 13.5% of such Units
will be reserved for issuance as incentives for key employees and consultants. As of September 30, 2019, GEN2 had received $975,000 of
investments to contribute to NEO. As of April 30, 2020, the Company controlled 51% of the joint venture, GEN2 controlled 39% and another
individual controlled the remaining 10%. Effective April 30, 2020, the joint venture with GEN2
was reorganized. GEN2 shareholders exchanged their common shares in GEN2, and the individual exchanged his membership interests in NEO,
for common shares representing 49% ownership in PSI. The Company retained its common shares in PSI, which provides the Company a 51% economic
interest in the PSI technology and products developed by the joint venture. During three months ended December 31, 2020, PSI recorded
a loss of $151,433 relating to its operations, of which $74,202 was allocated to the non-controlling interest. Repayment of the $975,000 investment will begin through
and upon the date which PSI has realized and retained cumulative net income/distributable cash in the amount of $300,000. The minority
interest of PSI ownership consists of accredited investors, and investment participation of $750,000 from several WCUI officers and directors,
including Calvin R. O’Harrow and Roy M. Harsch. In May 2020, the Company’s subsidiary, PSI,
agreed to become a majority shareholder in Protec Scientific, Inc. (“Protec”), a company formed in April 2020 by John Yorke
for the purpose of designing, developing and marketing products that use spectral photonic emissions across a variety of applications.
As of September 30, 2020, PSI had advanced $191,000 to Protec in furtherance of its agreement to acquire approximately 62% of Protec,
with the Company’s share being approximately 32%, based on its PSI ownership. The remaining 30% share is to be attributed to PSI’s
minority shareholders, based on their PSI ownership. During the year ended September 30, 2020, Protec received an additional $120,000
from non-affiliated investors, of which $74,400 was recorded to additional paid-in capital and $45,600 to the non-controlling interests.
The additional investments gave the non-controlling interests a 38% ownership interest in Protec. During the three months ended December
31, 2020, Protec recorded a loss of $101,492, of which $69,400 was allocated to the non-controlling interests. Inventories Inventories are stated at the lower of cost or net
realizable value. Cost is computed on a first-in, first-out basis. At December 31, 2020, primarily all of the inventories consisted of
raw materials or work-in-progress. The Company provides inventory reserves based on excess and obsolete inventories determined primarily
by future demand forecasts. The write down amount, if any, is measured as the difference between the cost of the inventory and net
realizable value based upon assumptions about future demand and charged to the provision for inventory, which is a component of cost
of sales. At the point of the loss recognition, a new, lower cost basis for that inventory is established, and subsequent changes in facts
and circumstances do not result in the restoration or increase in that newly established cost basis. At December 31, 2020, the
Company recorded a reserve of $50,000 for excess and slow moving inventories. At September 30, 2020, no reserve was recorded
for excess, slow moving or obsolete inventory. Stock-Based Compensation The Company periodically issues stock-based compensation
to officers, directors, and consultants for services rendered, and as part of financing transactions. Such issuances vest and expire according
to terms established at the issuance date. Stock-based payments to officers, directors, employees, and for acquiring goods and services
from non-employees, which include grants of employee stock options, are recognized in the financial statements based on their fair values
in accordance with Topic 718. Stock option grants, which are generally time vested, will be measured at the grant date fair value and
charged to operations on a straight-line basis over the vesting period. The fair value of the Company’s common stock
option and warrant grants are estimated using a Black-Scholes Merton option pricing model, which uses certain assumptions related to risk-free
interest rates, expected volatility, expected life of the common stock options, estimated forfeitures and future dividends. Compensation
expense is recorded based upon the value derived from the Black-Scholes option pricing model, and based on actual experience. The assumptions
used in the Black-Scholes Merton option pricing model could materially affect compensation expense recorded in future periods. Recently Issued Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, Credit
Losses - Measurement of Credit Losses on Financial Instruments (“ASC 326”). The standard significantly changes how entities
will measure credit losses for most financial assets, including accounts and notes receivables. The standard will replace today’s
“incurred loss” approach with an “expected loss” model, under which companies will recognize allowances based
on expected rather than incurred losses. Entities will apply the standard’s provisions as a cumulative-effect adjustment to retained
earnings as of the beginning of the first reporting period in which the guidance is effective. The standard is effective for interim and
annual reporting periods beginning after December 15, 2019. The adoption of ASU 2016-13 is not expected to have a material impact on the
Company’s financial position, results of operations, and cash flows. Other recent accounting pronouncements issued by
the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange
Commission did not or are not believed by management to have a material impact on the Company’s present or future consolidated
financial statements. |
