Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Mar. 31, 2019 | May 14, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | Nukkleus Inc. | |
Entity Central Index Key | 0001592782 | |
Document Type | 10-Q | |
Trading Symbol | NUKK | |
Document Period End Date | Mar. 31, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --09-30 | |
Entity Reporting Status Current | Yes | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 230,485,100 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2019 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Mar. 31, 2019 | Sep. 30, 2018 |
CURRENT ASSETS: | ||
Cash | $ 74,017 | $ 257,637 |
Prepaid expense | 3,333 | 7,333 |
Deposit on software development | 40,000 | |
Due from affiliates | 4,680 | 800 |
Investment - digital currency | 58,003 | |
TOTAL CURRENT ASSETS | 140,033 | 305,770 |
TOTAL ASSETS | 140,033 | 305,770 |
CURRENT LIABILITIES: | ||
Due to affiliates | 669,729 | 482,970 |
Accrued liabilities | 129,619 | 142,457 |
Accrued liabilities - related party | 10,000 | |
TOTAL CURRENT LIABILITIES | 809,348 | 625,427 |
OTHER LIABILITIES: | ||
Series A redeemable preferred stock liability at $10 stated value; 25,000 and 25,000 shares issued and outstanding ($250,000 and $250,000 less discount of $4,980 and $6,125, respectively) at March 31, 2019 and September 30, 2018, respectively | 245,020 | 243,875 |
TOTAL LIABILITIES | 1,054,368 | 869,302 |
STOCKHOLDERS' DEFICIT: | ||
Preferred stock ($0.0001 par value; 15,000,000 shares authorized; 0 share issued and outstanding at March 31, 2019 and September 30, 2018) | ||
Common stock ($0.0001 par value; 900,000,000 shares authorized; 230,485,100 shares issued and outstanding at March 31, 2019 and September 30, 2018) | 23,049 | 23,049 |
Additional paid-in capital | 141,057 | 141,057 |
Accumulated deficit | (1,078,441) | (727,638) |
TOTAL STOCKHOLDERS' DEFICIT | (914,335) | (563,532) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ 140,033 | $ 305,770 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) | Mar. 31, 2019 | Sep. 30, 2018 |
Statement of Financial Position [Abstract] | ||
Series A redeemable preferred stock, stated value (in dollars per share) | $ 10 | $ 10 |
Series A redeemable preferred stock, issued | 25,000 | 25,000 |
Series A redeemable preferred stock, outstanding | 25,000 | 25,000 |
Series A redeemable preferred stock, gross | $ 250,000 | $ 250,000 |
Series A redeemable preferred stock, discount | $ 4,980 | $ 6,125 |
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, authorized | 15,000,000 | 15,000,000 |
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, authorized | 900,000,000 | 900,000,000 |
Common stock, issued | 230,485,100 | 230,485,100 |
Common stock, outstanding | 230,485,100 | 230,485,100 |
UNAUDITED CONDENSED CONSOLIDATE
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
REVENUE | ||||
Total revenue | $ 4,800,000 | $ 4,800,000 | $ 9,600,000 | $ 9,600,000 |
COST OF REVENUE | ||||
Total cost of revenue | 4,725,000 | 4,725,000 | 9,450,000 | 9,450,000 |
GROSS PROFIT | 75,000 | 75,000 | 150,000 | 150,000 |
OPERATING EXPENSES: | ||||
Compensation and related benefits | 78,019 | 15,000 | 126,353 | 40,000 |
Bad debt expense | 40,000 | 40,000 | ||
Other general and administrative | 113,207 | 60,844 | 205,862 | 268,792 |
Other general and administrative - related party | 78,500 | 93,500 | 6,000 | |
Total operating expenses | 309,726 | 75,844 | 465,715 | 314,792 |
LOSS FROM OPERATIONS | (234,726) | (844) | (315,715) | (164,792) |
OTHER EXPENSE: | ||||
Interest expense on redeemable preferred stock | (937) | (2,229) | (1,875) | (5,979) |
Amortization of debt discount | (573) | (24,098) | (1,145) | (26,388) |
Unrealized gain (loss) on digital currency | (32,068) | |||
Total other income (expense) | 3,825 | (26,327) | (35,088) | (32,367) |
LOSS BEFORE INCOME TAXES | (230,901) | (27,171) | (350,803) | (197,159) |
INCOME TAXES | ||||
NET LOSS | $ (230,901) | $ (27,171) | $ (350,803) | $ (197,159) |
NET LOSS PER COMMON SHARE: | ||||
Basic and diluted (in dollars per share) | $ 0 | $ 0 | $ 0 | $ 0 |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | ||||
Basic and diluted (in shares) | 230,485,100 | 230,485,100 | 230,485,100 | 236,855,913 |
Revenue [Member] | ||||
REVENUE | ||||
Total revenue | ||||
Revenue - Related Party [Member] | ||||
REVENUE | ||||
Total revenue | 4,800,000 | 4,800,000 | 9,600,000 | 9,600,000 |
Cost Of Revenue [Member] | ||||
COST OF REVENUE | ||||
Total cost of revenue | ||||
Cost Of Revenue - Related Party [Member] | ||||
COST OF REVENUE | ||||
Total cost of revenue | $ 4,725,000 | $ 4,725,000 | $ 9,450,000 | $ 9,450,000 |
UNAUDITED CONDENSED CONSOLIDA_2
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at beginning at Sep. 30, 2017 | $ 23,049 | $ 141,057 | $ (515,451) | $ (351,345) | |
Balance at beginning (in shares) at Sep. 30, 2017 | 230,485,100 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (169,988) | (169,988) | |||
Balance at end at Dec. 31, 2017 | $ 23,049 | 141,057 | (685,439) | (521,333) | |
Balance at end (in shares) at Dec. 31, 2017 | 230,485,100 | ||||
Balance at beginning at Sep. 30, 2017 | $ 23,049 | 141,057 | (515,451) | (351,345) | |
Balance at beginning (in shares) at Sep. 30, 2017 | 230,485,100 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (197,159) | ||||
Balance at end at Mar. 31, 2018 | $ 23,049 | 141,057 | (712,610) | (548,504) | |
Balance at end (in shares) at Mar. 31, 2018 | 230,485,100 | ||||
Balance at beginning at Dec. 31, 2017 | $ 23,049 | 141,057 | (685,439) | (521,333) | |
Balance at beginning (in shares) at Dec. 31, 2017 | 230,485,100 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (27,171) | (27,171) | |||
Balance at end at Mar. 31, 2018 | $ 23,049 | 141,057 | (712,610) | (548,504) | |
Balance at end (in shares) at Mar. 31, 2018 | 230,485,100 | ||||
Balance at beginning at Sep. 30, 2018 | $ 23,049 | 141,057 | (727,638) | (563,532) | |
Balance at beginning (in shares) at Sep. 30, 2018 | 230,485,100 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (119,902) | (119,902) | |||
Balance at end at Dec. 31, 2018 | $ 23,049 | 141,057 | (847,540) | (683,434) | |
Balance at end (in shares) at Dec. 31, 2018 | 230,485,100 | ||||
Balance at beginning at Sep. 30, 2018 | $ 23,049 | 141,057 | (727,638) | (563,532) | |
Balance at beginning (in shares) at Sep. 30, 2018 | 230,485,100 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (350,803) | ||||
Balance at end at Mar. 31, 2019 | $ 23,049 | 141,057 | (1,078,441) | (914,335) | |
Balance at end (in shares) at Mar. 31, 2019 | 230,485,100 | ||||
Balance at beginning at Dec. 31, 2018 | $ 23,049 | 141,057 | (847,540) | (683,434) | |
Balance at beginning (in shares) at Dec. 31, 2018 | 230,485,100 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (230,901) | (230,901) | |||
Balance at end at Mar. 31, 2019 | $ 23,049 | $ 141,057 | $ (1,078,441) | $ (914,335) | |
Balance at end (in shares) at Mar. 31, 2019 | 230,485,100 |
UNAUDITED CONDENSED CONSOLIDA_3
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 6 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (350,803) | $ (197,159) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Amortization of debt discount | 1,145 | 26,388 |
Unrealized loss on digital currency | 32,068 | |
Bad debt expense | 40,000 | |
Changes in operating assets and liabilities: | ||
Prepaid expense | 4,000 | 750 |
Due to affiliates | 186,759 | 76,115 |
Accrued liabilities | (12,838) | 53,729 |
Accrued liabilities - related party | 10,000 | (8,000) |
Net cash used in operating activities | (89,669) | (48,177) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of digital currency | (93,951) | |
Proceeds received from termination of potential acquisition | 1,000,000 | |
Deposit made for software development | (50,000) | |
Net cash (used in) provided by investing activities | (93,951) | 950,000 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Redemption of preferred stock | (750,000) | |
Net cash used in financing activities | (750,000) | |
NET (DECREASE) INCREASE IN CASH | (183,620) | 151,823 |
Cash - beginning of period | 257,637 | 48,642 |
Cash - end of period | 74,017 | 200,465 |
Cash paid for: | ||
Interest | ||
Income taxes | ||
NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Cancellation of contingent common stock | 55,559 | |
Exchange investment - digital currency for due from affiliate | $ 3,880 |
THE COMPANY HISTORY AND NATURE
THE COMPANY HISTORY AND NATURE OF THE BUSINESS | 6 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
THE COMPANY HISTORY AND NATURE OF THE BUSINESS | NOTE 1 – THE COMPANY HISTORY AND NATURE OF THE BUSINESS Nukkleus Inc. (f/k/a Compliance & Risk Management Solutions Inc.) (“Nukkleus” or the “Company”) was formed on July 29, 2013 in the State of Delaware as a for-profit Company and established a fiscal year end of September 30. On February 5, 2016, Charms Investments, Ltd (“Charms”), the former majority shareholder of the Company, sold 146,535,140 shares of common stock to Currency Mountain Holdings Bermuda, Limited (“CMH”), the parent of the Company. CMH is wholly-owned by an entity that is owned by Emil Assentato, the Company’s Chief Executive Officer (“CEO”), Chief Financial Officer (“CFO”) and Chairman. In addition, on the same date, CMH acquired 3,937,000 shares of common stock from another non-affiliated company. The aggregate purchase price paid by CMH was $347,500. On May 24, 2016, Nukkleus, its wholly-owned subsidiary, Nukkleus Limited, a Bermuda limited company (“Nukkleus Limited”), Charms, the former majority shareholder, and CMH entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”), pursuant to which the Company purchased from CMH certain intellectual property, hardware, software and other assets (collectively, the “Assets”) in consideration of 48,400,000 shares of common stock of the Company. The Asset Purchase Agreement closed on May 24, 2016. As a result of such acquisition, the Company’s operations are now focused on the operation of a foreign exchange trading business utilizing the assets acquired from CMH. On May 24, 2016, Nukkleus Limited entered into a General Service Agreement to provide its software, technology, customer sales and marketing and risk management technology hardware and software solutions package to FML Malta Ltd. In December 2017, Nukkleus Limited, FML Malta Ltd. and FXDD Malta Limited (“FXDD Malta”) entered into a letter agreement providing that there was an error in drafting the General Service Agreement and acknowledging that the correct counter-party to Nukkleus Limited in the General Service Agreement is FXDD Malta. Accordingly, all references to FML Malta Ltd. have been replaced with FXDD Malta. FXDD Malta is a private limited liability company formed under the laws of Malta. The General Service Agreement entered with FXDD Malta provides that FXDD Malta will pay Nukkleus Limited at minimum $2,000,000 per month. On October 17, 2017, Nukkleus Limited entered into an amendment of the General Service Agreement with FXDD Malta. In accordance with the amendment, which was effective as of October 1, 2017, the minimum amount payable by FXDD Malta to Nukkleus Limited for services was reduced from $2,000,000 per month to $1,600,000 per month. Emil Assentato is also the majority member of Max Q Investments LLC (“Max Q”), which is managed by Derivative Marketing Associates Inc. (“DMA”). Mr. Assentato is the sole owner and manager of DMA. Max Q owns 79% of Currency Mountain Malta LLC, which in turn is the sole shareholder of FXDD Malta . In addition, on May 24, 2016, in order to appropriately service FXDD Malta, Nukkleus Limited entered into a General Service Agreement with FXDirectDealer LLC (“FXDIRECT”), which provides that Nukkleus Limited will pay FXDIRECT a minimum of $1,975,000 per month in consideration of providing personnel engaged in operational and technical support, marketing, sales support, accounting, risk monitoring, documentation processing and customer care and support. FXDIRECT may terminate this agreement upon providing 90 days’ written notice. On October 17, 2017, Nukkleus Limited entered into an amendment of the General Service Agreement with FXDIRECT. Pursuant to the amendment, which was effective as of October 1, 2017, the minimum amount payable by Nukkleus Limited to FXDIRECT for services was reduced from $1,975,000 per month to $1,575,000 per month. Currency Mountain Holdings LLC is the sole shareholder of FXDIRECT. Max Q is the majority shareholder of Currency Mountain Holdings LLC. On May 27, 2016, the Company entered into a Stock Purchase Agreement (“SPA”) to acquire, from IBIH Limited, a BVI corporation (“IBIH”) 2,200 issued and outstanding common stock for $1,000,000, representing 9.9% of IBIH. In addition, the Company acquired 100% of the issued and outstanding shares of GVS Limited (“Iron BVI”), which is the parent corporation of GVS (AU) Pty Ltd. (“Iron Australia”) for 24,156,000 shares of common stock of the Company. On November 17, 2017, the Company, IBIH, Terra (FX) Offshore Limited, Ludico Investments Limited, Currency Mountain Holdings LLC and the IBIH Shareholders entered into a Settlement Agreement and Mutual Release (the “Iron Settlement Agreement”) pursuant to which the SPA was terminated, all differences between the parties were resolved and settled and the parties fully released the other parties from any liability. Pursuant to the Iron Settlement Agreement, the Company agreed to (i) have the registered office of Iron Australia changed, (ii) have its director designees resign as directors of Iron Australia, (iii) appoint Markos Kashiouris, Petros Economides and Yun Ma as directors of Iron Australia; (iv) and make all required changes with the Australian Securities and Investments Commission. With respect to Iron BVI, pursuant to the Iron Settlement Agreement, the Company agreed to (i) have the registered office of Iron BVI changed, (ii) have its director designee resign as a director of Iron BVI, (iii) appoint Cymora Limited as director of Iron BVI; (iv) and make all required changes with the BVI Registrar of Companies. Further, the Company agreed to return the 2,200 shares of capital stock of IBIH to the IBIH Shareholders and return 100% of its interest in Iron BVI to IBIH. IBIH agreed to return the 24,156,000 shares of common stock of the Company to the Company for cancellation and to pay the Company $1,000,000. Further, Markos Kashiouris, Petros Economides and Efstathios Christophi resigned as directors of the Company and waived any directorship fees payable to them under their letter of appointment dated August 1, 2016. The $1,000,000 has been paid to the Company, net of approximately $70,000 of legal expenses, in the first fiscal quarter of 2018 and IBIH has returned the certificate representing the 24,156,000 shares of common stock of the Company and the shares have been cancelled by the Company. On June 3, 2016, the Company agreed to sell to Currency Mountain Holdings Bermuda, Limited (“CMH”) 30,900,000 shares of common stock and 200,000 shares of Series A preferred stock for $2,000,000 in two equal installments. The first closing occurred on June 7, 2016. The second closing was to occur with the closing of the Company’s acquisition of IBIH. As the IBIH transaction has been terminated, the second transaction with CMH will not proceed In July 2018, the Company incorporated Nukkleus Malta Holding Ltd., a wholly-owned subsidiary. In July 2018, Nukkleus Malta Holding Ltd. incorporated Nukkleus Exchange Malta Ltd. and is in the processes of incorporating Nukkleus Payments Malta Ltd. For Nukkleus Payments Malta Ltd., management is currently exploring obtaining an Electronic Money Institution license to facilitate customer payment transactions. For Nukkleus Exchange Malta Ltd., the Company seeks to create an electronic exchange whereby it facilitates the buying and selling of various digital assets as well as traditional currency pairs used in FX trading. Currently, Nukkleus Exchange Malta Ltd., is in the process of finalizing the exchange and such costs have been paid for by related parties. Projected costs of this exchange are approximately $900,000. As of March 31, 2019, approximately $811,000 has been incurred by our affiliates and ownership of the exchange will be transferred to the Company upon completion. Both entities would be regulated by the Malta Financial Services Authority. The financial statements have been prepared using accounting principles generally accepted in the United States of America applicable for a going concern, which assumes that the Company will realize its assets and discharge its liabilities in the ordinary course of business. The Company incurred net loss for the six months ended March 31, 2019 of $350,803 and had a working capital deficit of $669,315 at March 31, 2019. Our ability to continue as a going concern is dependent upon the management of expenses and ability of the Company to obtain the necessary financing to meet its obligations and pay its liabilities arising from normal business operations when they come due, and upon profitable operations. We need to either borrow funds or raise additional capital through equity or debt financings. However, we cannot be certain that such capital (from our shareholders or third parties) will be available to us or whether such capital will be available on terms that are acceptable to us. Any such financing likely would be dilutive to existing stockholders and could result in significant financial operating covenants that would negatively impact our business. If we are unable to raise sufficient additional capital on acceptable terms, we will have insufficient funds to operate our business or pursue our planned growth. |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 6 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | NOTE 2 – BASIS OF PRESENTATION These interim condensed consolidated financial statements of the Company and its subsidiaries are unaudited. In the opinion of management, all adjustments (consisting of normal recurring accruals) and disclosures necessary for a fair presentation of these interim condensed consolidated financial statements have been included. The results reported in the unaudited condensed consolidated financial statements for any interim periods are not necessarily indicative of the results that may be reported for the entire year. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission and do not include all information and footnotes necessary for a complete presentation of financial statements in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”). The Company’s unaudited condensed consolidated financial statements include the accounts of the Company and its consolidated subsidiaries. These accounts were prepared under the accrual basis of accounting. All significant intercompany accounts and transactions have been eliminated in consolidation. Certain information and footnote disclosures normally included in the annual consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended September 30, 2018 filed with the Securities and Exchange Commission on December 20, 2018. The consolidated balance sheet as of September 30, 2018 contained herein has been derived from the audited consolidated financial statements as of September 30, 2018, but does not include all disclosures required by U.S. GAAP. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of estimates The preparation of the unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Significant estimates during the three and six months ended March 31, 2019 and 2018 include the fair value of the investment in digital currency, bad debt expense, valuation of deferred tax assets and the associated valuation allowances. Fair value of financial instruments and fair value measurements The Company adopted the guidance of Accounting Standards Codification (“ASC”) 820 for fair value measurements which clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value. Fair value is the price that would be received to sell an asset and paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company utilizes valuation techniques to maximize the use of observable inputs and minimize the use of unobservable inputs. Assets and liabilities are recorded at fair value are categorized based upon the level of judgment associated with the inputs used to measure their value. Inputs are broadly defined as assumptions market participants would use in pricing an asset or liability. The three levels of the fair value hierarchy are as follows : · Level 1-Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date. · Level 2-Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data. · Level 3-Inputs are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information. The carrying amounts reported in the condensed consolidated balance sheets for cash, prepaid expense, due from affiliates, due to affiliates, accrued liabilities, and accrued liabilities – related party approximate their fair market value based on the short-term nature of these assets and liabilities. The fair value of the investment in digital currency is determined using the equivalency rate of the digital currency to USD. Digital currency consists of cryptocurrency denominated assets and are included in current assets. The Company revalues such assets at every reporting period and recognizes gain or loss as unrealized loss on digital currency, net, on the consolidated statements of operations that are attributable to the change in the fair value of the digital currency. The following table provides the financial assets measured on a recurring basis and reported at fair value on the balance sheet as of March 31, 2019: Fair value measurement using Carrying value Level 1 Level 2 Level 3 Total Investment - digital currency $ 58,003 $ 58,003 $ - $ - $ 58,003 The investment in digital currency has a cost of $90,071 net of fee, unrealized loss of $32,068 for the six months ended March 31, 2019, and a fair value of $58,003 at March 31, 2019. There is an unrealized gain of $5,335 for the three months ended March 31, 2019. The Company did not have any financial asset measured at fair value on a recurring basis on the balance sheet as of September 30, 2018 Concentration of credit risk The Company maintains its cash in bank and financial institution deposits that at times may exceed federally insured limits. At March 31, 2019 and September 30, 2018, the Company’s cash balances accounts had approximately $0 and $8,000 in excess of the federally-insured limits, respectively. The Company has not experienced any losses in such accounts through and as of the date of this report. The following table summarizes customer revenue concentrations: Three Months Three Months Six Months Six Months FXDD Malta - related party 100 % 100 % 100 % 100 % The following table summarizes vendor expense concentrations: Three Months Three Months Six Months Six Months FXDIRECT - related party 100 % 100 % 100 % 100 % Deposit on software development In the first quarter of fiscal 2018, the Company signed an agreement with a third-party for the customization and development of a trading platform to be used by it. In accordance with the signed agreement, the Company made a deposit on software development of $50,000. The project was cancelled in the third quarter of fiscal 2018 and the Company received a subsequent reimbursement of $10,000 of the deposit. During the three months ended March 31, 2019, the Company evaluated the collectability. In evaluating the collectability, the Company considers many factors, including the age of the balance, payment history and the third party’s current credit-worthiness. The balance of $40,000 was written off after exhaustive efforts at collection. Revenue recognition Effective October 1, 2018, the Company adopted ASU No. 2014-09, Revenue from Contracts with Customers ("ASU 2014-09") and other associated standards. Under the new standard, the Company recognizes revenue when a customer obtains control of promised services or goods in an amount that reflects the consideration to which the entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer contracts. The Company evaluated the new guidance and its adoption did not have a significant impact on the Company’s financial statements and a cumulative effect adjustment under the modified retrospective method of adoption was not necessary. There is no change to the Company’s accounting policies. Prior to the adoption of ASU 2014-09, the Company recognized revenue when persuasive evidence of an arrangement existed, delivery occurred, the fee was fixed or determinable, and collectability was reasonably assured. In general, the Company applies the following steps when recognizing revenue from contracts with customers: (i) identify the contract, (ii) identify the performance obligations, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations and (v) recognize revenue when a performance obligation is satisfied. The nature of the Company's contracts with customers relates to the Company's services performed for a related party under a General Service Agreement ("GSA"). There are multiple services provided under the GSA and these performance obligations are combined into a single unit of accounting. Fees are recognized as revenue when the services are completed under the terms of the GSA. Revenue is recorded at gross as the Company is deemed to be a principal in the transactions. Income taxes The Company recorded no income tax expense for the three and six months ended March 31, 2019 and 2018 because the estimated annual effective tax rate was zero. As of March 31, 2019, the Company continues to provide a valuation allowance against its net deferred tax assets since the Company believes it is more likely than not that its deferred tax assets will not be realized Reclassifications The Company has reclassified certain prior period amounts in the accompanying unaudited condensed consolidated statements of operations in order to be consistent with the current period presentation. These reclassifications had no effect on the previously reported results of operations. Per share data ASC Topic 260 “Earnings per Share,” requires presentation of both basic and diluted earnings per share (“EPS”) with a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. Basic EPS excludes dilution. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity Basic net earnings per share are computed by dividing net earnings available to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted net earnings per share is computed by dividing net earnings applicable to common stockholders by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during each period. Diluted earnings per share reflects the potential dilution that could occur if securities were exercised or converted into common stock or other contracts to issue common stock resulting in the issuance of common stock that would then share in the Company’s earnings subject to anti-dilution limitations. In a period in which the Company has a net loss, all potentially dilutive securities are excluded from the computation of diluted shares outstanding as they would have an anti-dilutive impact. For the three and six months ended March 31, 2019 and 2018, potentially dilutive common shares consist of common stock issuable upon the conversion of Series A preferred stock (using the if-converted method). The following table presents a reconciliation of basic and diluted net loss per share Three Months Three Months Six Months Six Months Net loss available to common stockholders for basic and diluted net loss per share of common stock $ (230,901 ) $ (27,171 ) $ (350,803 ) $ (197,159 ) Weighted average common stock outstanding - basic 230,485,100 230,485,100 230,485,100 236,855,913 Effect of dilutive securities: Series A preferred stock - - - - Weighted average common stock outstanding - diluted 230,485,100 230,485,100 230,485,100 236,855,913 Net loss per common share – basic and diluted $ (0.00 ) $ (0.00 ) $ (0.00 ) $ (0.00 ) For the three months ended March 31, 2019 and 2018, a total of 1,250,000 shares of common stock from the assumed redemption of the Series A convertible redeemable preferred stock at the contractual floor of $0.20 per share have been excluded from the computation of diluted weighted average number of shares of common stock outstanding as they would have had an anti-dilutive impact For the six months ended March 31, 2019 and 2018, a total of 1,250,000 and 5,000,000 shares of common stock from the assumed redemption of the Series A convertible redeemable preferred stock at the contractual floor of $0.20 per share, respectively, have been excluded from the computation of diluted weighted average number of shares of common stock outstanding as they would have had an anti-dilutive impact Recently issued accounting pronouncements Effective October 1, 2018, the Company adopted ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. This ASU addresses the classification of certain specific cash flow issues including debt prepayment or extinguishment costs, settlement of certain debt instruments, contingent consideration payments made after a business combination, proceeds from the settlement of certain insurance claims and distributions received from equity method investees. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements Effective October 1, 2018, the Company adopted ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. The ASU clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for acquisitions (or disposals) of assets or business. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements. Effective October 1, 2018, the Company adopted ASU No. 2017-09, Compensation – Stock Compensation: Scope of Modification Accounting. The guidance clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. Entities will apply the modification accounting guidance if the value, vesting conditions or classification of the award changes. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements . In June 2018, the FASB issued ASU No. 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. ASU No. 2018-07 expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. The guidance also specifies that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. This guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years (quarter ending September 30, 2019 for the Company). Early adoption is permitted, but no earlier than an entity’s adoption date of Topic 606. The Company will evaluate the effects of adopting ASU 2018-07 if and when it is deemed to be applicable. Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its consolidated financial condition, results of operations, cash flows or disclosures. |
ACCRUED LIABILITIES
ACCRUED LIABILITIES | 6 Months Ended |
Mar. 31, 2019 | |
Accrued Liabilities, Current [Abstract] | |
ACCRUED LIABILITIES | NOTE 4 – ACCRUED LIABILITIES At March 31, 2019 and September 30, 2018, accrued liabilities consisted of the following: March 31, 2019 September 30, 2018 Professional fees $ 27,478 $ 44,728 Directors’ compensation 70,537 70,000 Interest payable 29,604 27,729 Other 2,000 - $ 129,619 $ 142,457 |
SHARE CAPITAL
SHARE CAPITAL | 6 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
SHARE CAPITAL | NOTE 5 – SHARE CAPITAL Authorized shares The Company is authorized to issue 900,000,000 shares of common stock at par value of $0.0001 and 15,000,000 shares of Series A preferred stock at par value of $0.0001 Common stock and Series A preferred stock sold for cash The Series A preferred stock has the following key terms: 1) A stated value of $10 per share; 2) The holder is entitled to receive cumulative dividends at the annual rate of 1.5% of stated value payable semi-annually on June 30 and December 31; 3) The preferred stock must be redeemed at the stated value plus any unpaid dividends in 5 years. On June 7, 2016, the Company sold to CMH 15,450,000 shares of common stock and 100,000 shares of Series A preferred stock for $1,000,000. The common stock was recorded as equity and the Series A preferred stock was recorded as a long-term liability. The $1,000,000 of proceeds received was allocated to the common stock and Series A preferred stock according to their relative fair values determined at the time of issuance, and as a result, the Company recorded a total discount of $45,793 on the Series A preferred stock, which is being amortized to interest expense to the date of redemption. For the three months ended March 31, 2019 and 2018, amortization of debt discount amounted to $573 and $24,098, respectively. For the six months ended March 31, 2019 and 2018, amortization of debt discount amounted to $1,145 and $26,388, respectively. The terms of the Series A preferred stock issued represent mandatory redeemable shares, with a fixed redemption date (in 5 years) and the Company has a choice of redeeming the instrument either in cash or a variable number of shares of common stock based on a formula in the certificate of designation. The conversion price has a floor of $0.20 per share. As such, all dividends accrued and/or paid and any accretions are classified as part of interest expense. For the three months ended March 31, 2019 and 2018, dividends on redeemable preferred stock amounted to $937 and $2,229, respectively For the six months ended March 31, 2019 and 2018, dividends on redeemable preferred stock amounted to $1,875 and $5,979, respectively As a result of the termination of the IBIH transaction, the Company and CMH have agreed to enter into that certain Stock Redemption Agreement dated February 13, 2018 providing that 75,000 CMH Preferred Shares were redeemed and cancelled in consideration of $750,000 which occurred on February 13, 2018 At March 31, 2019 and September 30, 2018, Series A redeemable preferred stock consisted of the following: March 31, 2019 September 30, 2018 Redeemable preferred stock (stated value) $ 250,000 $ 250,000 Less: unamortized debt discount (4,980 ) (6,125 ) Redeemable preferred stock, net $ 245,020 $ 243,875 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Mar. 31, 2019 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 6 – RELATED PARTY TRANSACTIONS Services provided by related parties From time to time, Craig Marshak, a director of the Company, provides consulting services to the Company. Mr. Craig Marshak is a principal of Triple Eight Markets. All professional services fee payable to Craig Marshak are paid to Triple Eight Markets. As compensation for professional services provided, the Company recognized consulting expenses of $78,500 and $0 for the three months ended March 31, 2019 and 2018, respectively, which have been included in general and administrative expense – related party on the accompanying consolidated statements of operations. The Company recognized consulting expenses of $93,500 and $6,000 for the six months ended March 31, 2019 and 2018, respectively, which have been included in general and administrative expense – related party on the accompanying consolidated statements of operations. As of March 31, 2019 and September 30, 2018, the accrued and unpaid services charge related to Craig Marshak amounted to $10,000 and $0, respectively, which have been included in accrued liabilities – related party on the accompanying consolidated balance sheets. The Company uses affiliate employees for various services such as the use of accountants to record the books and accounts of the Company at no charge to those affiliates, which are considered immaterial. Office space from related parties The Company uses office space of affiliate companies, free of rent, which is considered immaterial Revenue from related party and cost of revenue from related party On May 24, 2016, the Company entered into a General Service Agreement with FXDD Malta, a related party. The Company is to invoice FXDD Malta a minimum of $2,000,000 per month in consideration for providing personnel and technical support, marketing, accounting, risk monitoring, documentation processing and customer care and support. On October 17, 2017, the Company entered into an amendment of the General Service Agreement with FXDD Malta. In accordance with the amendment, which was effective as of October 1, 2017, the minimum amount payable by FXDD Malta to the Company for services was reduced from $2,000,000 per month to $1,600,000 per month. Emil Assentato is also the majority member of Max Q Investments LLC (“Max Q”), which is managed by Derivative Marketing Associates Inc. (“DMA”). Mr. Assentato is the sole owner and manager of DMA. Max Q owns 79% of Currency Mountain Malta LLC, which in turn is the sole shareholder of FXDD Malta. In addition, on May 24, 2016, the Company entered into a General Service Agreement with FXDIRECT to pay a minimum of $1,975,000 per month for receiving personnel and technical support, marketing, accounting, risk monitoring, documentation processing and customer care and support. On October 17, 2017, the Company entered into an amendment of the General Service Agreement with FXDIRECT. Pursuant to the amendment, which was effective as of October 1, 2017, the minimum amount payable by the Company to FXDIRECT for services was reduced from $1,975,000 per month to $1,575,000 per month. Currency Mountain Holdings LLC is the sole shareholder of FXDIRECT. Max Q is the majority shareholder of Currency Mountain Holdings LLC. Both of the above entities are affiliates through common ownership. During the three and six months ended March 31, 2019 and 2018, service provided to related party which was recorded as revenue - related party on the accompanying consolidated statements of operations was as follows : Three Months Three Months Six Months Six Months Service provided to: FXDD Malta $ 4,800,000 $ 4,800,000 $ 9,600,000 $ 9,600,000 $ 4,800,000 $ 4,800,000 $ 9,600,000 $ 9,600,000 During the three and six months ended March 31, 2019 and 2018, service received from related party which was recorded as cost of revenue - related party on the accompanying consolidated statements of operations was as follows: Three Months Three Months Six Months Six Months Service received from: FXDIRECT $ 4,725,000 $ 4,725,000 $ 9,450,000 $ 9,450,000 $ 4,725,000 $ 4,725,000 $ 9,450,000 $ 9,450,000 Due from affiliates At March 31, 2019 and September 30, 2018, due from related parties consisted of the following: March 31, 2019 September 30, 2018 FXDD Malta $ 800 $ 800 NUKK Capital (1) 3,880 - $ 4,680 $ 800 (1) An entity controlled by Emil Assentato, the Company’s chief executive officer and chief financial officer. The balance of due from related parties at March 31, 2019 amounted to $4,680 and represents investment – digital currency transferred to NUKK Capital and monies that the Company paid on behalf of FXDD Malta. The balance of due from related parties at September 30, 2018 amounted to $800 and represents monies that the Company paid on behalf of FXDD Malta. Management believes that the related parties’ receivables are fully collectable. Therefore, no allowance for doubtful accounts is deemed to be required on its due from related parties at March 31, 2019 and September 30, 2018. The Company historically has not experienced uncollectible receivables from related parties. Due to affiliates At March 31, 2019 and September 30, 2018, due to related parties consisted of the following: March 31, 2019 September 30, 2018 Forexware LLC $ 448,593 $ 300,700 FXDIRECT 174,136 182,270 CMH 47,000 - $ 669,729 $ 482,970 The balances of due to related parties represent expenses paid by Forexware LLC and FXDIRECT on behalf of the Company and advances from CMH. The balances due to FXDIRECT may also include unsettled funds due related to the General Service Agreement. The related parties’ payables are short-term in nature, non-interest bearing, unsecured and repayable on demand. Costs for creation an electronic exchange paid by related parties The Company is creating an electronic exchange whereby it facilitates the buying and selling of various digital assets as well as traditional currency pairs used in FX trading. Currently, the Company is in the process of finalizing the exchange and such costs have been paid for by Forexware LLC and FXDIRECT. Projected costs of this exchange are approximately $900,000. As of March 31, 2019, approximately $811,000 has been incurred by our related parties and ownership of the exchange will be transferred to the Company upon completion. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Mar. 31, 2019 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 7 – SUBSEQUENT EVENTS Management has evaluated subsequent events through the date of the filing. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Use of estimates | Use of estimates The preparation of the unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Significant estimates during the three and six months ended March 31, 2019 and 2018 include the fair value of the investment in digital currency, bad debt expense, valuation of deferred tax assets and the associated valuation allowances. |
Fair value of financial instruments and fair value measurements | Fair value of financial instruments and fair value measurements The Company adopted the guidance of Accounting Standards Codification (“ASC”) 820 for fair value measurements which clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value. Fair value is the price that would be received to sell an asset and paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company utilizes valuation techniques to maximize the use of observable inputs and minimize the use of unobservable inputs. Assets and liabilities are recorded at fair value are categorized based upon the level of judgment associated with the inputs used to measure their value. Inputs are broadly defined as assumptions market participants would use in pricing an asset or liability. The three levels of the fair value hierarchy are as follows : · Level 1-Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date. · Level 2-Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data. · Level 3-Inputs are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information. The carrying amounts reported in the condensed consolidated balance sheets for cash, prepaid expense, due from affiliates, due to affiliates, accrued liabilities, and accrued liabilities – related party approximate their fair market value based on the short-term nature of these assets and liabilities. The fair value of the investment in digital currency is determined using the equivalency rate of the digital currency to USD. Digital currency consists of cryptocurrency denominated assets and are included in current assets. The Company revalues such assets at every reporting period and recognizes gain or loss as unrealized loss on digital currency, net, on the consolidated statements of operations that are attributable to the change in the fair value of the digital currency. The following table provides the financial assets measured on a recurring basis and reported at fair value on the balance sheet as of March 31, 2019: Fair value measurement using Carrying value Level 1 Level 2 Level 3 Total Investment - digital currency $ 58,003 $ 58,003 $ - $ - $ 58,003 The investment in digital currency has a cost of $90,071 net of fee, unrealized loss of $32,068 for the six months ended March 31, 2019, and a fair value of $58,003 at March 31, 2019. There is an unrealized gain of $5,335 for the three months ended March 31, 2019. The Company did not have any financial asset measured at fair value on a recurring basis on the balance sheet as of September 30, 2018 |
Concentration of credit risk | Concentration of credit risk The Company maintains its cash in bank and financial institution deposits that at times may exceed federally insured limits. At March 31, 2019 and September 30, 2018, the Company’s cash balances accounts had approximately $0 and $8,000 in excess of the federally-insured limits, respectively. The Company has not experienced any losses in such accounts through and as of the date of this report. The following table summarizes customer revenue concentrations: Three Months Three Months Six Months Six Months FXDD Malta - related party 100 % 100 % 100 % 100 % The following table summarizes vendor expense concentrations: Three Months Three Months Six Months Six Months FXDIRECT - related party 100 % 100 % 100 % 100 % |
Deposit on software development | Deposit on software development In the first quarter of fiscal 2018, the Company signed an agreement with a third-party for the customization and development of a trading platform to be used by it. In accordance with the signed agreement, the Company made a deposit on software development of $50,000. The project was cancelled in the third quarter of fiscal 2018 and the Company received a subsequent reimbursement of $10,000 of the deposit. During the three months ended March 31, 2019, the Company evaluated the collectability. In evaluating the collectability, the Company considers many factors, including the age of the balance, payment history and the third party’s current credit-worthiness. The balance of $40,000 was written off after exhaustive efforts at collection. |
Revenue recognition | Revenue recognition Effective October 1, 2018, the Company adopted ASU No. 2014-09, Revenue from Contracts with Customers ("ASU 2014-09") and other associated standards. Under the new standard, the Company recognizes revenue when a customer obtains control of promised services or goods in an amount that reflects the consideration to which the entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer contracts. The Company evaluated the new guidance and its adoption did not have a significant impact on the Company’s financial statements and a cumulative effect adjustment under the modified retrospective method of adoption was not necessary. There is no change to the Company’s accounting policies. Prior to the adoption of ASU 2014-09, the Company recognized revenue when persuasive evidence of an arrangement existed, delivery occurred, the fee was fixed or determinable, and collectability was reasonably assured. In general, the Company applies the following steps when recognizing revenue from contracts with customers: (i) identify the contract, (ii) identify the performance obligations, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations and (v) recognize revenue when a performance obligation is satisfied. The nature of the Company's contracts with customers relates to the Company's services performed for a related party under a General Service Agreement ("GSA"). There are multiple services provided under the GSA and these performance obligations are combined into a single unit of accounting. Fees are recognized as revenue when the services are completed under the terms of the GSA. Revenue is recorded at gross as the Company is deemed to be a principal in the transactions. |
Income taxes | Income taxes The Company recorded no income tax expense for the three and six months ended March 31, 2019 and 2018 because the estimated annual effective tax rate was zero. As of March 31, 2019, the Company continues to provide a valuation allowance against its net deferred tax assets since the Company believes it is more likely than not that its deferred tax assets will not be realized |
Reclassifications | Reclassifications The Company has reclassified certain prior period amounts in the accompanying unaudited condensed consolidated statements of operations in order to be consistent with the current period presentation. These reclassifications had no effect on the previously reported results of operations. |
Per share data | Per share data ASC Topic 260 “Earnings per Share,” requires presentation of both basic and diluted earnings per share (“EPS”) with a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. Basic EPS excludes dilution. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity Basic net earnings per share are computed by dividing net earnings available to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted net earnings per share is computed by dividing net earnings applicable to common stockholders by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during each period. Diluted earnings per share reflects the potential dilution that could occur if securities were exercised or converted into common stock or other contracts to issue common stock resulting in the issuance of common stock that would then share in the Company’s earnings subject to anti-dilution limitations. In a period in which the Company has a net loss, all potentially dilutive securities are excluded from the computation of diluted shares outstanding as they would have an anti-dilutive impact. For the three and six months ended March 31, 2019 and 2018, potentially dilutive common shares consist of common stock issuable upon the conversion of Series A preferred stock (using the if-converted method). The following table presents a reconciliation of basic and diluted net loss per share Three Months Three Months Six Months Six Months Net loss available to common stockholders for basic and diluted net loss per share of common stock $ (230,901 ) $ (27,171 ) $ (350,803 ) $ (197,159 ) Weighted average common stock outstanding - basic 230,485,100 230,485,100 230,485,100 236,855,913 Effect of dilutive securities: Series A preferred stock - - - - Weighted average common stock outstanding - diluted 230,485,100 230,485,100 230,485,100 236,855,913 Net loss per common share – basic and diluted $ (0.00 ) $ (0.00 ) $ (0.00 ) $ (0.00 ) For the three months ended March 31, 2019 and 2018, a total of 1,250,000 shares of common stock from the assumed redemption of the Series A convertible redeemable preferred stock at the contractual floor of $0.20 per share have been excluded from the computation of diluted weighted average number of shares of common stock outstanding as they would have had an anti-dilutive impact For the six months ended March 31, 2019 and 2018, a total of 1,250,000 and 5,000,000 shares of common stock from the assumed redemption of the Series A convertible redeemable preferred stock at the contractual floor of $0.20 per share, respectively, have been excluded from the computation of diluted weighted average number of shares of common stock outstanding as they would have had an anti-dilutive impact |
Recently issued accounting pronouncements | Recently issued accounting pronouncements Effective October 1, 2018, the Company adopted ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. This ASU addresses the classification of certain specific cash flow issues including debt prepayment or extinguishment costs, settlement of certain debt instruments, contingent consideration payments made after a business combination, proceeds from the settlement of certain insurance claims and distributions received from equity method investees. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements Effective October 1, 2018, the Company adopted ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. The ASU clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for acquisitions (or disposals) of assets or business. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements. Effective October 1, 2018, the Company adopted ASU No. 2017-09, Compensation – Stock Compensation: Scope of Modification Accounting. The guidance clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. Entities will apply the modification accounting guidance if the value, vesting conditions or classification of the award changes. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements . In June 2018, the FASB issued ASU No. 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. ASU No. 2018-07 expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. The guidance also specifies that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. This guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years (quarter ending September 30, 2019 for the Company). Early adoption is permitted, but no earlier than an entity’s adoption date of Topic 606. The Company will evaluate the effects of adopting ASU 2018-07 if and when it is deemed to be applicable. Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its consolidated financial condition, results of operations, cash flows or disclosures. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Schedule of financial assets measured on a recurring basis and reported at fair value on the balance sheet | The following table provides the financial assets measured on a recurring basis and reported at fair value on the balance sheet as of March 31, 2019: Fair value measurement using Carrying value Level 1 Level 2 Level 3 Total Investment - digital currency $ 58,003 $ 58,003 $ - $ - $ 58,003 |
Schedule of concentration of credit risk | The following table summarizes customer revenue concentrations: Three Months Three Months Six Months Six Months FXDD Malta - related party 100 % 100 % 100 % 100 % The following table summarizes vendor expense concentrations: Three Months Three Months Six Months Six Months FXDIRECT - related party 100 % 100 % 100 % 100 % |
Schedule of reconciliation of basic and diluted net loss per share | The following table presents a reconciliation of basic and diluted net loss per share Three Months Three Months Six Months Six Months Net loss available to common stockholders for basic and diluted net loss per share of common stock $ (230,901 ) $ (27,171 ) $ (350,803 ) $ (197,159 ) Weighted average common stock outstanding - basic 230,485,100 230,485,100 230,485,100 236,855,913 Effect of dilutive securities: Series A preferred stock - - - - Weighted average common stock outstanding - diluted 230,485,100 230,485,100 230,485,100 236,855,913 Net loss per common share – basic and diluted $ (0.00 ) $ (0.00 ) $ (0.00 ) $ (0.00 ) |
ACCRUED LIABILITIES (Tables)
ACCRUED LIABILITIES (Tables) | 6 Months Ended |
Mar. 31, 2019 | |
Accrued Liabilities, Current [Abstract] | |
Schedule of accrued liabilities | At March 31, 2019 and September 30, 2018, accrued liabilities consisted of the following: March 31, 2019 September 30, 2018 Professional fees $ 27,478 $ 44,728 Directors’ compensation 70,537 70,000 Interest payable 29,604 27,729 Other 2,000 - $ 129,619 $ 142,457 |
SHARE CAPITAL (Tables)
SHARE CAPITAL (Tables) | 6 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
Schedule of redeemable preferred stock | At March 31, 2019 and September 30, 2018, Series A redeemable preferred stock consisted of the following: March 31, 2019 September 30, 2018 Redeemable preferred stock (stated value) $ 250,000 $ 250,000 Less: unamortized debt discount (4,980 ) (6,125 ) Redeemable preferred stock, net $ 245,020 $ 243,875 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 6 Months Ended |
Mar. 31, 2019 | |
Related Party Transactions [Abstract] | |
Schedule of related party transaction | During the three and six months ended March 31, 2019 and 2018, service provided to related party which was recorded as revenue - related party on the accompanying consolidated statements of operations was as follows : Three Months Three Months Six Months Six Months Service provided to: FXDD Malta $ 4,800,000 $ 4,800,000 $ 9,600,000 $ 9,600,000 $ 4,800,000 $ 4,800,000 $ 9,600,000 $ 9,600,000 During the three and six months ended March 31, 2019 and 2018, service received from related party which was recorded as cost of revenue - related party on the accompanying consolidated statements of operations was as follows: Three Months Three Months Six Months Six Months Service received from: FXDIRECT $ 4,725,000 $ 4,725,000 $ 9,450,000 $ 9,450,000 $ 4,725,000 $ 4,725,000 $ 9,450,000 $ 9,450,000 |
Schedule of due from affiliates | At March 31, 2019 and September 30, 2018, due from related parties consisted of the following: March 31, 2019 September 30, 2018 FXDD Malta $ 800 $ 800 NUKK Capital (1) 3,880 - $ 4,680 $ 800 (1) An entity controlled by Emil Assentato, the Company’s chief executive officer and chief financial officer. |
Schedule of due to affiliates | At March 31, 2019 and September 30, 2018, due to related parties consisted of the following: March 31, 2019 September 30, 2018 Forexware LLC $ 448,593 $ 300,700 FXDIRECT 174,136 182,270 CMH 47,000 - $ 669,729 $ 482,970 |
THE COMPANY HISTORY AND NATUR_2
THE COMPANY HISTORY AND NATURE OF THE BUSINESS (Details Narrative) - USD ($) | Nov. 17, 2017 | Oct. 02, 2017 | Jun. 07, 2016 | Jun. 03, 2016 | May 27, 2016 | May 24, 2016 | Feb. 05, 2016 | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2019 | Mar. 31, 2018 |
Related party transaction expense | $ 811,000 | ||||||||||||
Projected costs | $ 900,000 | 900,000 | |||||||||||
Net loss | $ (230,901) | $ (119,902) | $ (27,171) | $ (169,988) | (350,803) | $ (197,159) | |||||||
Working capital deficit | $ 669,315 | ||||||||||||
Common Stock [Member] | |||||||||||||
Assets purchased in consideration of common stock | 48,400,000 | ||||||||||||
Currency Mountain Holdings Bermuda [Member] | |||||||||||||
Number of shares acquired | 146,535,140 | ||||||||||||
Additional number of shares acquired | 3,937,000 | ||||||||||||
Value of shares acquired | $ 347,500 | ||||||||||||
Number of shares issued (in shares) | 15,450,000 | 30,900,000 | |||||||||||
Number of shares issued, value | $ 2,000,000 | ||||||||||||
Description of shares issued payment terms | Two equal installments. The first closing occurred on June 7, 2016. The second closing was to occur with the closing of the Company’s acquisition of IBIH. As the IBIH transaction has been terminated, the second transaction with CMH will not proceed. | ||||||||||||
Currency Mountain Holdings Bermuda [Member] | Series A Preferred Stock [Member] | |||||||||||||
Number of shares issued (in shares) | 100,000 | 200,000 | |||||||||||
Currency Mountain Malta LLC [Member] | Max Q Investments LLC [Member] | |||||||||||||
Percentage of shares owned | 79.00% | ||||||||||||
Stock Purchase Agreement [Member] | GVS Limited [Member] | |||||||||||||
Ownership percentage | 100.00% | ||||||||||||
Stock Purchase Agreement [Member] | IBIH Limited [Member] | |||||||||||||
Number of shares acquired | 2,200 | ||||||||||||
Value of shares acquired | $ 1,000,000 | ||||||||||||
Ownership percentage | 9.90% | ||||||||||||
Contingent common stock | 24,156,000 | ||||||||||||
Number of shares return acquired | 2,200 | ||||||||||||
Value of shares cancellation | 1,000,000 | $ 1,000,000 | |||||||||||
Return of contingent common stock | 24,156,000 | ||||||||||||
Legal expenses | $ 70,000 | ||||||||||||
Global Services Agreement [Member] | FXDD Malta [Member] | |||||||||||||
Generated revenue per month | $ 2,000,000 | ||||||||||||
Global Services Agreement [Member] | FXDirectDealer [Member] | |||||||||||||
Termination of agreement, in days | 90 days | ||||||||||||
Related party transaction expense | $ 1,975,000 | ||||||||||||
Global Services Agreement Amendment [Member] | FXDD Malta [Member] | |||||||||||||
Generated revenue per month | $ 1,600,000 | ||||||||||||
Global Services Agreement Amendment [Member] | FXDirectDealer [Member] | |||||||||||||
Related party transaction expense | $ 1,575,000 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | Mar. 31, 2019 | Sep. 30, 2018 |
Investment - digital currency | $ 58,003 | |
Fair Value Measurements Recurring [Member] | ||
Investment - digital currency | 58,003 | |
Fair Value Measurements Recurring [Member] | Fair Value Inputs Level 1 [Member] | ||
Investment - digital currency | 58,003 | |
Fair Value Measurements Recurring [Member] | Fair Value Inputs Level 2 [Member] | ||
Investment - digital currency | ||
Fair Value Measurements Recurring [Member] | Fair Value Inputs Level 3 [Member] | ||
Investment - digital currency | ||
Carrying Value [Member] | ||
Investment - digital currency | $ 58,003 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
FXDIRECT Trading Limited [Member] | Vendor Expense Concentrations [Member] | ||||
Customer revenue concentrations | 100.00% | 100.00% | 100.00% | 100.00% |
FXDD Trading Limited [Member] | Customer revenue concentrations [Member] | ||||
Customer revenue concentrations | 100.00% | 100.00% | 100.00% | 100.00% |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Accounting Policies [Abstract] | ||||
Net loss available to common stockholders for basic and diluted net loss per share of common stock | $ (230,901) | $ (27,171) | $ (350,803) | $ (197,159) |
Weighted average common stock outstanding - basic (in shares) | 230,485,100 | 230,485,100 | 230,485,100 | 236,855,913 |
Effect of dilutive securities: | ||||
Series A preferred stock (in shares) | ||||
Weighted average common stock outstanding - diluted (in shares) | 230,485,100 | 230,485,100 | 230,485,100 | 236,855,913 |
Net loss per common share - basic and diluted (in dollars per share) | $ 0 | $ 0 | $ 0 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Mar. 31, 2019 | Sep. 30, 2018 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2017 | |
Amount of federally-insured limits | $ 0 | $ 8,000 | $ 0 | |||
Software development costs | 40,000 | $ 50,000 | ||||
Reimbursement amount | 10,000 | |||||
Investment - digital currency | 58,003 | 58,003 | ||||
Unrealized loss on digital currency | 32,068 | |||||
Purchase of digital currency | (93,951) | |||||
Unrealized gain on digital currency | $ 5,335 | |||||
Credit-worthiness written off | $ 40,000 | |||||
Annual effective tax | 0.00% | 0.00% | ||||
Series A Convertible Redeemable Preferred Stock [Member] | ||||||
Preferred stock conversion rate | $ 0.20 | $ 0.20 | $ 0.20 | $ 0.20 | ||
Number of shares antidilutive excluded from computation (in shares) | 1,250,000 | 1,250,000 | 1,250,000 | 5,000,000 |
ACCRUED LIABILITIES (Details)
ACCRUED LIABILITIES (Details) - USD ($) | Mar. 31, 2019 | Sep. 30, 2018 |
Accrued Liabilities, Current [Abstract] | ||
Professional fees | $ 27,478 | $ 44,728 |
Directors' compensation | 70,537 | 70,000 |
Interest payable | 29,604 | 27,729 |
Other | 2,000 | |
Total | $ 129,619 | $ 142,457 |
SHARE CAPITAL (Details)
SHARE CAPITAL (Details) - USD ($) | Mar. 31, 2019 | Sep. 30, 2018 |
Equity [Abstract] | ||
Redeemable preferred stock (stated value) | $ 250,000 | $ 250,000 |
Less: unamortized debt discount | (4,980) | (6,125) |
Redeemable preferred stock, net | $ 245,020 | $ 243,875 |
SHARE CAPITAL (Details Narrativ
SHARE CAPITAL (Details Narrative) - USD ($) | Feb. 13, 2018 | Jun. 07, 2016 | Jun. 03, 2016 | Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | Sep. 30, 2018 |
Common stock authorized | 900,000,000 | 900,000,000 | 900,000,000 | |||||
Preferred stock authorized | 15,000,000 | 15,000,000 | 15,000,000 | |||||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | 0.0001 | |||||
Amortization of debt discount | $ 573 | $ 24,098 | $ 1,145 | $ 26,388 | ||||
Interest expense on preferred stock | $ 937 | $ 2,229 | $ 1,875 | $ 5,979 | ||||
Preferred stock, stated value (in dollars per share) | $ 10 | $ 10 | $ 10 | |||||
Stock Redemption Agreement [Member] | IBIH Limited [Member] | ||||||||
Number of shares cancelled | 75,000 | |||||||
Amount of shares cancelled | $ 750,000 | |||||||
Currency Mountain Holdings Bermuda [Member] | ||||||||
Number of shares issued | 15,450,000 | 30,900,000 | ||||||
Series A Preferred Stock [Member] | ||||||||
Preferred stock authorized | 15,000,000 | 15,000,000 | 15,000,000 | |||||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||
Dividend payment terms | Payable semi-annually on June 30 and December 31. | |||||||
Description of preferred stock redemption | The preferred stock must be redeemed at the stated value plus any unpaid dividends in 5 years. | |||||||
Preferred stock conversion rate | $ 0.20 | |||||||
Amortization of debt discount | $ 45,793 | |||||||
Dividend percentage | 1.50% | |||||||
Preferred stock, stated value (in dollars per share) | $ 10 | $ 10 | ||||||
Series A Preferred Stock [Member] | Currency Mountain Holdings Bermuda [Member] | ||||||||
Number of shares issued | 100,000 | 200,000 | ||||||
Proceed from share isssued | $ 1,000,000 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | Sep. 30, 2018 | |||
Related party accounts receivable: | |||||||
Total related party receivable: | $ 4,680 | $ 4,680 | $ 800 | ||||
Total related party accounts payable: | 669,729 | 669,729 | 482,970 | ||||
Related party service revenue: | |||||||
Total related-party services revenue | 4,800,000 | $ 4,800,000 | 9,600,000 | $ 9,600,000 | |||
Related party service costs: | |||||||
Total related-party service costs: | 4,725,000 | 4,725,000 | 9,450,000 | 9,450,000 | |||
FXDirectDealer [Member] | |||||||
Related party accounts receivable: | |||||||
Total related party receivable: | |||||||
Total related party accounts payable: | 174,136 | 174,136 | 182,270 | ||||
Related party service costs: | |||||||
Total related-party service costs: | 4,725,000 | 4,725,000 | 9,450,000 | 9,450,000 | |||
FXDD Malta [Member] | |||||||
Related party accounts receivable: | |||||||
Total related party receivable: | 800 | 800 | 800 | ||||
Related party service revenue: | |||||||
Total related-party services revenue | 4,800,000 | $ 4,800,000 | 9,600,000 | $ 9,600,000 | |||
NUKK Capital [Member] | |||||||
Related party accounts receivable: | |||||||
Total related party receivable: | 3,880 | 3,880 | |||||
Forexware LLC [Member] | |||||||
Related party accounts receivable: | |||||||
Total related party accounts payable: | 448,593 | 448,593 | 300,700 | ||||
CMH [Member] | |||||||
Related party accounts receivable: | |||||||
Total related party accounts payable: | $ 47,000 | [1] | $ 47,000 | [1] | |||
[1] | An entity controlled by Emil Assentato, the Company's chief executive officer and chief financial officer. |
RELATED PARTY TRANSACTIONS (D_2
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | Oct. 02, 2017 | May 24, 2016 | Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | Sep. 30, 2018 |
Consulting fee | $ 93,500 | $ 6,000 | |||||
Related party transaction expense | 811,000 | ||||||
General and administrative - related parties | $ 78,500 | $ 0 | |||||
Projected costs | 900,000 | 900,000 | |||||
FXDD Malta [Member] | |||||||
Amount due - related party | $ 800 | ||||||
Max Q Investments LLC [Member] | Currency Mountain Malta LLC [Member] | |||||||
Percentage of shares owned | 79.00% | ||||||
NUKK Capital [Member] | |||||||
Amount due - related party | 4,680 | 4,680 | |||||
NUKK Capital [Member] | Mr. Craig Marshak [Member] | |||||||
Accrued liabilities - related party | $ 10,000 | $ 10,000 | |||||
Global Services Agreement [Member] | FXDD Malta [Member] | |||||||
Maximum generated revenue per month | $ 2,000,000 | ||||||
Global Services Agreement [Member] | FXDirectDealer [Member] | |||||||
Related party transaction expense | $ 1,975,000 | ||||||
Termination of agreement, in days | 90 days | ||||||
Global Services Agreement Amendment [Member] | FXDD Malta [Member] | |||||||
Maximum generated revenue per month | $ 1,600,000 | ||||||
Global Services Agreement Amendment [Member] | FXDirectDealer [Member] | |||||||
Related party transaction expense | $ 1,575,000 |