Cover
Cover - shares | 9 Months Ended | |
Jun. 30, 2022 | Aug. 10, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 000-55591 | |
Entity Registrant Name | LOOP MEDIA, INC. | |
Entity Incorporation, State Code | NV | |
Entity Tax Identification Number | 47-3975872 | |
Entity Address, Address Line One | 700 N. Central Ave. | |
Entity Address, Address Line Two | Suite 430 | |
Entity Address, City or Town | Glendale | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 91203 | |
City Area Code | 818 | |
Local Phone Number | 823-4801 | |
Entity Reporting Status Current | 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 | 153,539,596 | |
Entity Central Index Key | 0001643988 | |
Current Fiscal Year End Date | --09-30 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2022 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Jun. 30, 2022 | Sep. 30, 2021 |
Current assets | ||
Cash | $ 709,725 | $ 4,162,548 |
Accounts receivable, net | 11,601,025 | 1,571,226 |
Inventory | 12,554 | 223,048 |
Prepaid expenses and other current assets | 1,136,401 | 1,645,037 |
Prepaid income tax | 19,648 | 17,806 |
License content assets - current | 420,789 | 850,263 |
Deferred offering costs | 540,108 | |
Total current assets | 14,440,250 | 8,469,928 |
Non-current assets | ||
Deposits | 63,879 | 34,289 |
License content assets - non current | 36,797 | 365,360 |
Equipment, net | 884,492 | 38,936 |
Operating lease right-of-use assets | 118,375 | 237,094 |
Intangible assets, net | 618,444 | 702,778 |
Goodwill | 1,970,321 | 1,970,321 |
Total non-current assets | 3,692,308 | 3,348,778 |
Total assets | 18,132,558 | 11,818,706 |
Current liabilities | ||
Accounts payable | 3,739,527 | 1,147,585 |
Accrued liabilities | 5,707,627 | 434,858 |
Accrued royalties | 3,316,708 | 633,463 |
Payable on acquisition | 250,125 | 250,125 |
License content liabilities - current | 50,250 | 985,000 |
Note payable - current | 25,714 | |
Deferred Income | 144,079 | 191,331 |
Convertible debt related party - current, net | 2,075,692 | 530,226 |
Convertible debt - current, net | 602,581 | |
Lease liability - current | 119,178 | 167,101 |
Total current liabilities | 16,005,767 | 4,365,403 |
Non-current liabilities | ||
Convertible debt - related party, less current portion, net | 2,458,194 | |
Convertible debt, less current portion, net | 142,714 | 404,319 |
Note payable - non-current | 460,924 | |
Derivative liability | 893,925 | 1,058,633 |
Non-revolving line of credit, related party | 2,203,064 | |
Non-revolving line of credit | 1,316,246 | |
Lease liability | 75,530 | |
Total non-current liabilities | 4,555,949 | 4,457,600 |
Total liabilities | 20,561,716 | 8,823,003 |
Stockholders' equity (deficit) | ||
Series B Convertible Preferred stock, $0.0001 par value, 3,333,334 shares authorized, 0 and 200,000 shares issued and outstanding as of June 30, 2022 and September 30, 2021, respectively. Liquidation preference of $1.50 per share before any payment to Series A Preferred or Common stock | 20 | |
Common Stock, $0.0001 par value, 316,666,667 shares authorized,153,539,596 and 127,316,716 shares issued and outstanding as of June 30, 2022 and September 30, 2021, respectively | 15,352 | 13,345 |
Additional paid in capital | 79,319,016 | 69,824,754 |
Accumulated deficit | (81,763,526) | (66,842,416) |
Total stockholders' equity (deficit) | (2,429,158) | 2,995,703 |
Total liabilities and stockholders' equity (deficit) | $ 18,132,558 | $ 11,818,706 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2022 | Sep. 30, 2021 | Jun. 30, 2021 |
Preferred stock, shares authorized | 16,666,667 | ||
Preferred stock, par value (in dollars per share) | $ 0.0001 | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | |
Common stock, authorized | 316,666,667 | 316,666,667 | |
Common stock, issued | 153,539,596 | 127,316,716 | 127,316,746 |
Common stock, outstanding | 153,539,596 | 127,316,716 | 127,316,746 |
Preferred Stock Class B | |||
Preferred stock, shares authorized | 3,333,334 | 3,333,334 | |
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | |
Preferred stock, liquidation preference (in dollars per share) | $ 1.50 | $ 1.50 | |
Preferred stock, issued | 0 | 200,000 | 200,000 |
Preferred stock, outstanding | 0 | 200,000 | 200,000 |
Liquidation preference | $ 1.50 | $ 1.50 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
Revenue | $ 10,804,083 | $ 1,160,793 | $ 18,679,956 | $ 2,660,004 |
Cost of revenue | 7,018,283 | 763,359 | 11,978,477 | 1,949,979 |
Gross profit | 3,785,800 | 397,434 | 6,701,479 | 710,025 |
Operating expenses | ||||
Selling, general and administrative | 7,553,431 | 4,269,169 | 19,354,942 | 15,211,751 |
Impairment of goodwill and intangibles | 2,390,799 | |||
Total operating expenses | 7,553,431 | 4,269,169 | 19,354,942 | 17,602,550 |
Loss from operations | (3,767,631) | (3,871,735) | (12,653,463) | (16,892,525) |
Other income (expense) | ||||
Interest income | 200 | 8,653 | ||
Interest expense | (978,435) | (632,094) | (1,976,941) | (1,443,917) |
Income from equity investment | 1,551 | |||
Loss on extinguishment of debt | (944,614) | (944,614) | (15,000) | |
Gain on extinguishment of debt, net | 579,486 | 490,051 | 593,386 | |
Change in fair value of derivatives | 18,395 | 164,708 | ||
Total other income (expense) | (1,904,654) | (52,608) | (2,266,596) | (855,327) |
Loss before income taxes | (5,672,285) | (3,924,343) | (14,920,059) | (17,747,852) |
Income tax (expense)/benefit | 0 | 0 | (1,051) | (99,830) |
Net loss | $ (5,672,285) | $ (3,924,343) | $ (14,921,110) | $ (17,847,682) |
Basic net loss per common share (in dollars per share) | $ (0.04) | $ (0.03) | $ (0.11) | $ (0.15) |
Diluted net loss per common share (in dollars per share) | $ (0.04) | $ (0.03) | $ (0.11) | $ (0.15) |
Weighted average number of basic common shares outstanding (in shares) | 153,517,932 | 124,965,541 | 141,183,276 | 120,474,850 |
Weighted average number of diluted common shares outstanding (in shares) | 153,517,932 | 124,965,541 | 141,183,276 | 120,474,850 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) | Common Stock | Preferred Stock Preferred Stock Class A | Preferred Stock Preferred Stock Class B | Common stock subscriptions | Additional Paid in Capital. | Accumulated Deficit | Total |
Balance at beginning at Sep. 30, 2020 | $ 11,432 | $ 3 | $ 20 | $ 135,144 | $ 36,669,899 | $ (35,867,920) | $ 948,578 |
Balance at beginning (in shares) at Sep. 30, 2020 | 114,320,911 | 30,667 | 200,000 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Shares issued for cash | $ 75 | 899,925 | 900,000 | ||||
Shares issued for cash (in shares) | 757,333 | ||||||
Cash received for common stock subscribed | 330,000 | 330,000 | |||||
Issuance of common stock subscribed | $ (5) | 20,000 | (19,995) | ||||
Issuance of common stock subscribed (in shares) | (53,333) | ||||||
Shares issued in connection with reverse merger | (1) | (1) | |||||
Shares issued for asset purchase | $ 137 | 2,671,096 | 2,671,233 | ||||
Shares issued for asset purchase (in shares) | 1,369,863 | ||||||
Beneficial conversion feature of convertible debenture | 750,000 | 750,000 | |||||
Stock-based compensation | 134,253 | 134,253 | |||||
Warrants issued to consultants | 492,000 | 492,000 | |||||
Shares issued for debt settlement | $ 10 | 194,793 | 194,803 | ||||
Shares issued for debt settlement (in shares) | 97,891 | ||||||
Shares issued for license content asset | $ 118 | 2,065,878 | 2,065,996 | ||||
Shares issued for license content asset (in shares) | 1,180,880 | ||||||
Shares issued for equity investment in unconsolidated entity | $ 46 | 863,434 | 863,480 | ||||
Shares issued for equity investment in unconsolidated entity (in shares) | 454,463 | ||||||
Net loss | (5,676,224) | (5,676,224) | |||||
Balance at ending at Dec. 31, 2020 | $ 11,813 | $ 3 | $ 20 | 485,144 | 44,721,282 | (41,544,144) | 3,674,118 |
Balance at ending (in shares) at Dec. 31, 2020 | 118,128,008 | 30,667 | 200,000 | ||||
Balance at beginning at Sep. 30, 2020 | $ 11,432 | $ 3 | $ 20 | 135,144 | 36,669,899 | (35,867,920) | $ 948,578 |
Balance at beginning (in shares) at Sep. 30, 2020 | 114,320,911 | 30,667 | 200,000 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Shares issued for cash (in shares) | 3,228,000 | ||||||
Shares issued for debt settlement | $ 194,803 | ||||||
Shares issued for debt settlement (in shares) | 97,891 | ||||||
Net loss | $ (17,847,682) | ||||||
Balance at ending at Jun. 30, 2021 | $ 12,732 | $ 20 | 63,853,146 | (53,715,602) | 10,150,296 | ||
Balance at ending (in shares) at Jun. 30, 2021 | 127,316,716 | 200,000 | |||||
Balance at beginning at Dec. 31, 2020 | $ 11,813 | $ 3 | $ 20 | 485,144 | 44,721,282 | (41,544,144) | 3,674,118 |
Balance at beginning (in shares) at Dec. 31, 2020 | 118,128,008 | 30,667 | 200,000 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of common stock subscribed | $ 49 | $ (485,144) | 485,095 | ||||
Issuance of common stock subscribed (in shares) | 497,429 | ||||||
Beneficial conversion feature of convertible debenture | 306,346 | 306,346 | |||||
Stock-based compensation | 5,419,800 | 5,419,800 | |||||
Conversion of convertible debenture | $ 100 | 376,256 | 376,356 | ||||
Conversion of convertible debenture (in shares) | 1,003,618 | ||||||
Warrants issued in conjunction with debenture | 43,654 | 43,654 | |||||
Shares issued for cash | $ 156 | 1,954,844 | 1,955,000 | ||||
Shares issued for cash (in shares) | 1,564,000 | ||||||
Net loss | (8,247,115) | (8,247,115) | |||||
Balance at ending at Mar. 31, 2021 | $ 12,118 | $ 3 | $ 20 | 53,307,277 | (49,791,259) | 3,528,159 | |
Balance at ending (in shares) at Mar. 31, 2021 | 121,193,055 | 30,667 | 200,000 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Beneficial conversion feature of convertible debenture | 1,705,709 | 1,705,709 | |||||
Stock-based compensation | 1,482,746 | 1,482,746 | |||||
Warrants issued in conjunction with debenture | 144,291 | 144,291 | |||||
Shares issued for acquisition | $ 200 | 5,689,555 | 5,689,755 | ||||
Shares issued for acquisition (in shares) | 2,003,435 | ||||||
Warrants issued for severance | 82,000 | 82,000 | |||||
Shares issued for cash | $ 96 | 1,199,904 | 1,200,000 | ||||
Shares issued for cash (in shares) | 960,000 | ||||||
Payment in kind interest stock issuance | $ 3 | 41,976 | 41,979 | ||||
Payment in kind interest stock issuance (in shares) | 14,475 | ||||||
Shares issued for consulting fees | $ 8 | 199,992 | 200,000 | ||||
Shares issued for consulting fees (in shares) | 79,051 | ||||||
Conversion of series convertible stock to common stock | $ 307 | $ (3) | (304) | ||||
Conversion of series convertible stock to common stock (in shares) | 3,066,700 | (30,667) | |||||
Net loss | (3,924,343) | (3,924,343) | |||||
Balance at ending at Jun. 30, 2021 | $ 12,732 | $ 20 | 63,853,146 | (53,715,602) | 10,150,296 | ||
Balance at ending (in shares) at Jun. 30, 2021 | 127,316,716 | 200,000 | |||||
Balance at beginning at Sep. 30, 2021 | $ 13,345 | $ 20 | 69,824,754 | (66,842,416) | 2,995,703 | ||
Balance at beginning (in shares) at Sep. 30, 2021 | 133,470,018 | 200,000 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Stock-based compensation | 1,549,406 | 1,549,406 | |||||
Net loss | (4,273,995) | (4,273,995) | |||||
Balance at ending at Dec. 31, 2021 | $ 13,345 | $ 20 | 71,374,160 | (71,116,411) | 271,114 | ||
Balance at ending (in shares) at Dec. 31, 2021 | 133,470,018 | 200,000 | |||||
Balance at beginning at Sep. 30, 2021 | $ 13,345 | $ 20 | 69,824,754 | (66,842,416) | 2,995,703 | ||
Balance at beginning (in shares) at Sep. 30, 2021 | 133,470,018 | 200,000 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Payment in kind interest stock issuance | $ 177,000 | (177,000) | |||||
Payment in kind interest stock issuance (in shares) | 69,455 | ||||||
Net loss | (14,921,110) | ||||||
Balance at ending at Jun. 30, 2022 | $ 15,352 | 79,319,016 | (81,763,526) | (2,429,158) | |||
Balance at ending (in shares) at Jun. 30, 2022 | 153,539,473 | ||||||
Balance at beginning at Dec. 31, 2021 | $ 13,345 | $ 20 | 71,374,160 | (71,116,411) | 271,114 | ||
Balance at beginning (in shares) at Dec. 31, 2021 | 133,470,018 | 200,000 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Stock-based compensation | 1,116,318 | 1,116,318 | |||||
Warrants issued to consultants | 56,788 | 56,788 | |||||
Payment in kind interest stock issuance | $ 4 | 88,496 | 88,500 | ||||
Payment in kind interest stock issuance (in shares) | 37,136 | ||||||
Conversion of series convertible stock to common stock | $ 2,000 | $ (20) | (1,980) | ||||
Conversion of series convertible stock to common stock (in shares) | 20,000,000 | (200,000) | |||||
Net loss | (4,974,830) | (4,974,830) | |||||
Balance at ending at Mar. 31, 2022 | $ 15,349 | 72,633,782 | (76,091,241) | (3,442,110) | |||
Balance at ending (in shares) at Mar. 31, 2022 | 153,507,154 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Stock-based compensation | 1,282,548 | 1,282,548 | |||||
Warrants issued to consultants | 197,226 | 197,226 | |||||
Warrants issued in conjunction with debenture | 3,036,970 | 3,036,970 | |||||
Early extinguishment of convertible debt | $ 2,079,993 | $ 2,079,993 | |||||
Payment in kind interest stock issuance | $ 3 | ||||||
Payment in kind interest stock issuance (in shares) | 32,319 | 88,497 | 88,500 | ||||
Net loss | (5,672,285) | $ (5,672,285) | |||||
Balance at ending at Jun. 30, 2022 | $ 15,352 | $ 79,319,016 | $ (81,763,526) | $ (2,429,158) | |||
Balance at ending (in shares) at Jun. 30, 2022 | 153,539,473 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | 9 Months Ended | |
Jun. 30, 2022 USD ($) | Jun. 30, 2021 USD ($) | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (14,921,110) | $ (17,847,682) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Amortization of debt discount | 1,532,792 | 954,080 |
Depreciation and amortization expense | 195,666 | 1,452,799 |
Amortization of license content assets | 933,036 | 402,676 |
Amortization of right-of-use assets | 118,719 | 107,248 |
Bad debt expense | 20,000 | 208,791 |
Gain on extinguishment of debt | (490,051) | (579,486) |
Loss on early extinguishment of convertible debt | 944,614 | |
Change in fair value of derivative | (164,708) | |
Warrants issued for consulting services | 254,014 | |
Warrants issued for severance | 82,000 | |
Stock-based compensation | 3,948,272 | 7,528,800 |
Payment in kind for interest stock issuance | 177,000 | |
Gain on settlement of obligations | (13,900) | |
Loss on settlement of obligations | 15,000 | |
Equity method investment income | (1,551) | |
Impairment of intangible assets | 2,390,799 | |
Change in operating assets and liabilities: | ||
Accounts receivable | (10,049,799) | (131,732) |
Prepaid income tax | (1,842) | 99,905 |
Inventory | 210,494 | 11,979 |
Prepaid expenses | (741,364) | (231,450) |
Deposit | (29,590) | 227,000 |
Accounts payable | 2,558,353 | (175,305) |
Accrued expenses | 5,269,758 | |
Accrued royalties | 2,683,245 | |
License contract liability | (1,109,750) | (1,451,000) |
Operating lease liabilities | (123,453) | (107,558) |
Deferred income | (47,252) | 18,552 |
NET CASH USED IN OPERATING ACTIVITIES | (8,832,956) | (7,040,035) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Cash paid for acquisition of EON Media Group, net of cash acquired | (750,000) | |
Cash paid for acquisition of EON Media Group, net of cash acquired | (749,937) | |
Purchase of property and equipment | (956,889) | 2,752 |
Collection of note receivable | 1,477 | |
NET CASH USED IN INVESTING ACTIVITIES | (956,889) | (1,495,708) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from issuance of common stock | 1,250,000 | 4,385,000 |
Proceeds from PPP loan | 486,637 | |
Proceeds from issuance of preferred stock | 1,000,000 | |
Proceeds from issuance of convertible debt | 2,079,993 | 2,950,000 |
Proceeds from non-revolving line of credit | 6,222,986 | |
Repayment of convertible debt | (2,715,865) | (36,078) |
Repayment of stockholder loans | (292,336) | |
Shares issued for cash | (1,000,000) | |
Share issuance costs | (80,134) | |
Reverse merger costs | 80,134 | |
Deferred offering costs | (500,092) | |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 6,337,022 | 7,493,223 |
Change in cash and cash equivalents | (3,452,823) | (1,042,520) |
Cash, beginning of period | 4,162,548 | 1,971,923 |
Cash, end of period | 709,725 | 929,403 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW STATEMENTS | ||
Cash paid for interest | 153,009 | 105,627 |
Cash paid for income taxes | 1,051 | |
SUPPLEMENTAL DISCLOSURES OF NON CASH INVESTING AND FINANCING ACTIVITIES | ||
Common Stock issued to acquire intangible assets | 2,671,233 | |
Conversion of convertible debenture to common stock | 376,356 | |
Common Stock issued for equity investment in unconsolidated entity | 863,480 | |
Common Stock issued for acquisition | 5,689,755 | |
Early extinguishment of convertible debt | 944,614 | |
Payment in kind common stock payment | 177,000 | 41,979 |
Warrants issued in conjunction with debt | 3,036,970 | |
Warrants issued as debt discount on convertible debenture | 187,945 | |
Beneficial conversion feature recorded as discounted debt | 2,079,993 | 2,762,055 |
Prepaid common stock paid to consultant | 200,000 | |
Unpaid deferred offering costs | $ 40,017 | |
Shares issued for common stock subscribed | 485,144 | |
Accrued interest rolled into convertible note | 81,824 | |
Common Stock issued for content license assets | 2,260,799 | |
Preferred shares issued for debt settlement | 1,006,584 | |
Preferred Stock Class A | ||
SUPPLEMENTAL DISCLOSURES OF NON CASH INVESTING AND FINANCING ACTIVITIES | ||
Conversion of Preferred stock to common stock | $ 307 |
BUSINESS
BUSINESS | 9 Months Ended |
Jun. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BUSINESS | NOTE 1 – BUSINESS Loop Media Inc. is a Nevada corporation. We were incorporated under the laws of the State of Nevada on May 11, 2015. We are a multichannel digital video platform media company that uses marketing technology, or “MarTech,” to generate our revenue and offer our services. Our technology and vast library of videos and licensed content enable us to curate and distribute short-form videos to out-of-home (“OOH”) dining, hospitality, retail and other locations and venues to enable them to inform, entertain and engage their customers. Our technology provides third-party advertisers with a targeted marketing and promotional tool for their products and services and, in certain instances, allows us to measure the number of potential viewers of such advertising and promotional materials. We also allow OOH customers to access our service without advertisements by paying a monthly subscription fee. In addition to providing services to OOH venue operators, we currently provide our services direct to consumers (“D2C”) in their homes on connected TVs (“CTVs”) and on their mobile devices. We offer self-curated music video content licensed from major and independent record labels, as well as movie, television and video game trailers, kid-friendly videos, viral videos, drone footage, news headlines, and lifestyle and atmospheric channels. We distribute our content and advertising inventory to OOH locations primarily through (i) our owned and operated platform (“O&O Network”) of Loop Media-designed “small-box” streaming Android media players (“Loop Players”) and legacy ScreenPlay computers and (ii) through screens on digital networks owned and operated by third parties (“Partner Network”, and together with the O&O Network, the “Loop Network”). We moved to an advertising-based model and ramped up distribution of Loop Players for our O&O Network starting in early 2021. As of June 30, 2022, we had 12,584 quarterly active units (“QAUs”). We launched our Partner Network business beginning in early May 2022 with one partner on approximately 5,000 of the partner’s screens, and we rolled out to the remaining 12,000 screens in that network as of mid-May 2022, remaining at approximately that level as of early-August 2022. Our legacy businesses, including our content subscription-based business and our CTV business, complement these newer businesses. Going concern and management’s plans As of June 30, 2022, we had cash of $709,725 and an accumulated deficit of ($81,763,526). During the nine months ended June 30, 2022, we used net cash in operating activities of $(8,832,956). We have incurred net losses since inception. These conditions raise substantial doubt about our ability to continue as a going concern within one year from the issuance date of these consolidated financial statements. Our primary source of operating funds since inception has been cash proceeds from debt and equity financing transactions. Our ability to continue as a going concern is dependent upon our ability to generate sufficient revenue and our ability to raise additional funds by way of our debt and equity financing efforts. The accompanying unaudited consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. These unaudited consolidated financial statements do not include any adjustments relating to the recovery of the recorded assets or classification of the liabilities that might be necessary if we are unable to continue as a going concern. Our ability to continue as a going concern is dependent on management’s further implementation of our ongoing and strategic plans, which include continuing to raise funds through equity and/or debt raises. If we are unable to raise adequate funds, certain aspects of the ongoing and strategic plans may require modification. Management is in the process of identifying sources of capital via strategic partnerships, debt refinancing and equity investments through one or more private placements. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Interim Financial Statements The following (a) condensed consolidated balance sheet as of September 30, 2021, which has been derived from our audited financial statements, and (b) our unaudited condensed consolidated interim financial statements for the nine months ended June 30, 2022, have been prepared in accordance with accounting principles generally accepted in the United States ("US GAAP") for interim financial information and the instructions to Form 10-Q and Rule 8-03 of Regulation S-X of the Securities Act of 1933. Accordingly, they do not include all of the information and footnotes required by US GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the nine months ended June 30, 2022, are not necessarily indicative of results that may be expected for the year ending September 30, 2022. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended September 30, 2021, included in our Annual Report on Form 10-KT filed with the Securities and Exchange Commission ("SEC") on January 21, 2022. Basis of presentation The unaudited Use of estimates The preparation of the unaudited condensed consolidated financial statements in conformity with US 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 revenue and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include assumptions used in the fair value of stock-based compensation, the fair value of other equity and debt instruments, fair value of intangible assets and recoverability of license content assets. Business combinations We account for business acquisitions under Accounting Standards Codification (“ASC”) 805, Business Combinations. Segment reporting We report as one reportable segment because we do not have more than one operating segment. Our business activities, revenues and expenses are evaluated by management as one reportable segment. Cash Cash and cash equivalents include all highly liquid monetary instruments with original maturities of three months or less when purchased. These investments are carried at cost, which approximates fair value. Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash deposits. We maintain our cash in institutions insured by the Federal Deposit Insurance Corporation (“FDIC”). At times, our cash and cash equivalent balances may be uninsured or in amounts that exceed the FDIC insurance limits. We have not experienced any losses on such accounts. On June 30, 2022, and September 30, 2021, we had no cash equivalents. As of June 30, 2022, and September 30, 2021, approximately $459,725 and $3,655,716 of cash exceeded the FDIC insurance limits, respectively. Accounts receivable Accounts receivable represent amounts due from customers. We assess the collectability of receivables on an ongoing basis. A provision for the impairment of receivables involves significant management judgment and includes the review of individual receivables based on individual customers, current economic trends and analysis of historical bad debts. As of June 30, 2022, and September 30, 2021, we recorded an allowance for doubtful accounts of $445,946 and $426,813, respectively. Concentration of credit risk During the nine-months ended June 30, 2022, we had three customers which each individually comprised greater than 10% of net revenue. These customers represented 25%, 20%, and 11% respectively. No other customer accounted for more than 10% of net revenue during the periods presented. As of June 30, 2022, three customers accounted for a total of 52% of our accounts receivable balance or 24%, 18%, and 10%, respectively. No other customer accounted for more than 10% of total accounts receivable. We grant credit in the normal course of business to our customers. Periodically, we review past due accounts and make decisions about future credit on a customer-by-customer basis. Credit risk is the risk that one party to a financial instrument will cause a loss for the other party by failing to discharge an obligation. Our concentration of credit risk was not significant as of June 30, 2022, and September 30, 2021. License Content Asset On January 1, 2020, we adopted the guidance in ASU 2019-02, Entertainment—Films—Other Assets—Film Costs (Subtopic 926-20) and Entertainment—Broadcasters—Intangibles—Goodwill and Other (Subtopic 920-350): Improvements to Accounting for Costs of Films and License Agreements for Program Materials Property and equipment, net Property and equipment are stated at cost, less accumulated depreciation. Depreciation is calculated using the straight-line method over the asset’s estimated useful life. The capitalization policy for the company is to capitalize property and equipment purchases greater than $3,000, as well as internally-developed software enhancements. Expenditures for maintenance and repairs are expensed as incurred. When retired or otherwise disposed, the related carrying value and accumulated depreciation are removed from the respective accounts and the net difference less any amount realized from disposition is reflected in earnings. See below for estimated useful lives: Equipment 3-5 years Software 3 years Goodwill and other intangible assets Goodwill represents the excess of the purchase consideration over the fair value of the net tangible and identifiable intangible assets acquired in a business combination. Goodwill and other intangible assets determined to have an indefinite useful life are not amortized but are subject to impairment tests. We conduct our annual impairment tests or whenever events and changes in circumstances suggest that the carrying amount may not be recoverable. We conducted the annual impairment test on September 30, 2021. When evaluating goodwill and indefinite-lived intangible assets for impairment, we may first perform an assessment of qualitative factors to determine if the fair value of the reporting unit or the intangible asset is more-likely-than-not greater than the carrying amount. Significant factors considered in this assessment include, but are not limited to, macro-economic conditions, market and industry conditions, cost considerations, the competitive environment, overall financial performance, and results of past impairment tests. If, based on a review of the qualitative factors, we determine it is more-likely-than-not that the fair value is greater than the carrying value, we may bypass a quantitative test for impairment. In performing the quantitative test for impairment of goodwill, we compare the fair value of each reporting unit with it carrying amount, including goodwill, in order to identify a potential impairment. Measurement of the fair value of a reporting unit is based on a fair value measure using the sum of the discounted estimated future cash flows. Estimates of forecasted cash flows involve measurement uncertainty, and it is therefore possible that reductions in the carrying value of goodwill may be required in the future because of changes in management’s future cash flow estimates. When the fair value of a reporting unit is less than its carrying amount, goodwill of the reporting unit is considered to be impaired. Effective January 1, 2020, we adopted the guidance in Accounting Standards Update (“ASU”) 2017-04, Simplifying the Test for Goodwill Impairment Operating leases We determine if an arrangement is a lease at inception. Operating lease right-of-use assets (“ROU assets”) and short-term and long-term lease liabilities are included on the face of the consolidated balance sheet. ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use an incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Our 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 with lease and non-lease components, which are accounted for as a single lease component. For lease agreements with terms less than 12 months, we have elected the short-term lease measurement and recognition exemption and recognize such lease payments on a straight-line basis over the lease term. Fair value measurement We determine the fair value of our assets and liabilities using a hierarchy established by the accounting guidance that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to valuations based upon unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to valuations based upon unobservable inputs that are significant to the valuation (Level 3 measurements). The three levels of valuation hierarchy are defined as follows: ● Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets. ● Level 2 inputs to the valuation methodology included quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets in inactive markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. ● Level 3 inputs to the valuation methodology are one or more unobservable inputs which are significant to the fair value measurement. The carrying amount of our financial instruments, including cash, accounts receivable, deposits, short-term portion of notes receivable and notes payable, and current liabilities approximate fair value due to their short-term nature. We do not have financial assets or liabilities that are required under US GAAP to be measured at fair value on a recurring basis. We have not elected to use fair value measurement option for any assets or liabilities for which fair value measurement is not presently required. We record assets and liabilities at fair value on a nonrecurring basis as required by US GAAP. Assets recognized or disclosed at fair value in the condensed The following table summarizes fair value measurements of the Derivative Liability as of June 30, 2022: Quoted Prices in Significant Active Markets Significant Other Unobservable For Identical Items Observable Inputs Inputs (Level 1) (Level 2) (Level 3) Total Derivative liabilities — — 893,925 893,925 Total $ — $ — $ 893,925 $ 893,925 The following table summarizes fair value measurements of the Derivative Liability as of September 30, 2021: Quoted Prices in Significant Active Markets Significant Other Unobservable For Identical Items Observable Inputs Inputs (Level 1) (Level 2) (Level 3) Total Derivative liabilities — — 1,058,633 1,058,633 Total $ — $ — $ 1,058,633 $ 1,058,633 The following table summarizes changes in fair value measurements of the Derivative Liability during the nine months ended June 30, 2022: Balance as of September 30, 2021 $ 1,058,633 Derivative liability issued with convertible debentures — Change in fair value (164,708) Balance as of June 30, 2022 $ 893,925 The following table summarizes changes in fair value measurements of the Derivative Liability during the three months ended June 30, 2022: Balance as of March 31, 2022 $ 912,320 Change in fair value (18,395) Balance as of June 30, 2022 $ 893,925 The following table summarizes the unobservable inputs used in the valuation of the derivatives during the nine months ended June 30, 2022: Expected term 0.42 - 2 years Discount rate 7.12% - 15.00% Volatility 75% - 110.0% Convertible debt and derivative treatment When we issue debt with a conversion feature, we must first assess whether the conversion feature meets the requirements to be treated as a derivative, as follows: a) one or more underlyings, typically the price of our common stock; b) one or more notional amounts or payment provisions or both, generally the number of shares upon conversion; c) no initial net investment, which typically excludes the amount borrowed; and d) net settlement provisions, which in the case of convertible debt generally means the stock received upon conversion can be readily sold for cash. An embedded equity-linked component that meets the definition of a derivative does not have to be separated from the host instrument if the component qualifies for the scope exception for certain contracts involving an issuer’s own equity. The scope exception applies if the contract is both a) indexed to its own stock, and b) classified in shareholders’ equity in its statement of financial position. If the conversion feature within convertible debt meets the requirements to be treated as a derivative, we estimate the fair value of the convertible debt derivative using the Monte Carlo Method upon the date of issuance. If the fair value of the convertible debt derivative is higher than the face value of the convertible debt, the excess is immediately recognized as interest expense. Otherwise, the fair value of the convertible debt derivative is recorded as a liability with an offsetting amount recorded as a debt discount, which offsets the carrying amount of the debt. The convertible debt derivative is revalued at the end of each reporting period and any change in fair value is recorded as a gain or loss in the statement of operations. The debt discount is amortized through interest expense over the life of the debt. Convertible debt and beneficial conversion features If the conversion feature is not treated as a derivative, we assess whether it is a beneficial conversion feature (“BCF”). A BCF exists if the conversion price of the convertible debt instrument is less than the stock price on the commitment date. This typically occurs when the conversion price is less than the fair value of the stock on the date the instrument was issued. The value of a BCF is equal to the intrinsic value of the feature, the difference between the conversion price and the common stock into which it is convertible and is recorded as additional paid in capital and as a debt discount in the consolidated balance sheets. We amortize the balance over the life of the underlying debt as amortization of debt discount expense in the consolidated statements of operations. If the debt is retired early, the associated debt discount is then recognized immediately as amortization of debt discount expense in the consolidated statements of operations. If the conversion feature does not qualify for either the derivative treatment or as a BCF, the convertible debt is treated as traditional debt. Advertising costs We expense all advertising costs as incurred. Advertising and marketing costs for the nine months ended June 30, 2022, and 2021 were $4,232,734 and $776,086, respectively. Revenue recognition We recognize revenue in accordance with ASC 606 , Revenue from Contracts with Customers specified by the customer, revenue is deferred until all acceptance criteria have been met. Revenues are recognized under Topic 606 in a manner that reasonably reflects the delivery of our products and services to customers in return for expected consideration and includes the following elements: ● executed contracts with our customers that it believes are legally enforceable; ● identification of performance obligations in the respective contract; ● determination of the transaction price for each performance obligation in the respective contract; ● allocation of the transaction price to each performance obligation; and ● recognition of revenue only when we satisfy each performance obligation. Performance obligations and significant judgments Our revenue streams can be categorized into the following performance obligations and recognition patterns: o Delivery of streaming services including content encoding and hosting. We recognize revenue over the term of the service based on bandwidth usage. o Delivery of subscription content services in customized formats. We recognize revenue over the term of the service. o Delivery of hardware for ongoing subscription content delivery through software. We recognize revenue at the point of hardware delivery. o Revenue share arrangements, where platform providers distribute our licensed content and providers pay us a portion of the usage-based advertising revenues. Transaction prices for performance obligations are explicitly outlined in relevant agreements; therefore, we do not believe that significant judgments are required with respect to the determination of the transaction price, including any variable consideration identified. Customer acquisition costs We record commission expense associated with subscription revenue. Commissions are included in operating expenses. We have elected the practical expedient that allows us to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that we otherwise would have recognized is one year or less. Cost of revenue Cost of revenue represents the amortized cost of ongoing licensing and hosting fees, which is recognized over time based on usage patterns. The depreciation expense associated with the Loop players is not included in cost of sales. Deferred income We bill subscription services in advance of when the service period is performed. The deferred income recorded at June 30, 2022, and September 30, 2021 represents our accounting for the timing difference between when the subscription fees are received and when the performance obligation is satisfied. Net loss per share We account for net loss per share in accordance with ASC subtopic 260-10, Earnings Per Share Basic net loss per share is computed by dividing net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding during each period. It excludes the dilutive effects of any potentially issuable common shares. Diluted net loss per share is calculated by including any potentially dilutive share issuances in the denominator. The following securities are excluded from the calculation of weighted average diluted shares at June 30, 2022, and September 30, 2021, respectively, because their inclusion would have been anti-dilutive. June 30, September 30, 2022 2021 Options to purchase common stock 18,966,306 17,833,356 Warrants to purchase common stock 17,930,025 15,464,700 Series A preferred stock — — Series B preferred stock — 20,000,000 Convertible debentures 4,942,491 5,815,323 Total common stock equivalents 41,838,822 59,113,379 Share-based compensation Share-based compensation issued to employees is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the requisite service period. We measure the fair value of the share-based compensation issued to non-employees using the stock price observed in the trading market (for stock transactions) or the fair value of the award (for non-stock transactions), which were more reliably determinable measures of fair value than the value of the services being rendered. The measurement date is the earlier of (1) the date at which commitment for performance by the counterparty to earn the equity instruments is reached, or (2) the date at which the counterparty’s performance is complete. Recent accounting pronouncements In September 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. In August 2020, the FASB issued ASU 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) |
INVENTORY
INVENTORY | 9 Months Ended |
Jun. 30, 2022 | |
Inventory Disclosure [Abstract] | |
INVENTORY. | NOTE 3 – INVENTORY Our finished goods inventory consisted of the following on June 30, 2022, and September 30, 2021: June 30, September 30, 2022 2021 Computers $ 7,830 $ 6,881 Hasp keys 4,724 3,581 Loop player — 212,586 Total inventory $ 12,554 $ 223,048 |
LICENSE CONTENT ASSETS
LICENSE CONTENT ASSETS | 9 Months Ended |
Jun. 30, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
LICENSE CONTENT ASSETS | NOTE 4 – LICENSE CONTENT ASSETS License Content Assets To stream video content to the users, we generally secure intellectual property rights to such content by obtaining licenses from, and paying royalties or other consideration to, rights holders or their agents. The licensing arrangements can be for a fixed fee, variable fee, or combination of both. The licensing arrangements specify the period when the content is available for streaming. The license content assets are two years in duration and include prepayments to distributors for customer subscription revenues, per play usage fees, and ad supported fees. As of June 30, 2022, license content assets were $420,789 recorded as License content asset, net – current and $36,797 recorded as License content asset, net – noncurrent. We recorded amortization expense of $933,036 and $783,567 for the nine months ended June 30, 2022, and 2021, respectively, in cost of revenue, in the consolidated statements of operations, related to capitalized license content assets. The amortization expense for the next two years for capitalized license content assets as of June 30, is $436,346 in 2022, and $21,240 in 2023. License Content Liabilities On June 30, 2022, we had $50,250 of obligations comprised of $50,250 in License content liability – current and $0 in License content liability – noncurrent on the Consolidated Balance Sheets. Payments for content liabilities for the nine months ended June 30, 2022, were $853,500. The expected timing of payments for these content obligations is $19,000 payable in fiscal year 2022, and $31,250 payable in fiscal year 2023. Certain contracts provide for recoupment of payments on minimum obligations during the term of the contracts. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 9 Months Ended |
Jun. 30, 2022 | |
Disclosure Text Block [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | NOTE 5. GOODWILL AND OTHER INTANGIBLE ASSETS As of June 30, 2022, and September 30, 2021, the balance of goodwill was $1,970,321 and $1,970,321, respectively. Our other intangible assets, each definite lived assets, consisted of the following as of June 30, 2022, and September 30, 2021: June 30, September 30, Useful life 2022 2021 Customer relationships nine years $ 1,012,000 $ 1,012,000 Content library two years 198,000 198,000 Total intangible assets, gross 1,210,000 1,210,000 Less: accumulated amortization (591,556) (507,222) Total (591,556) (507,222) Total intangible assets, net $ 618,444 $ 702,778 Amortization expense charged to operations amounted to $84,333 and $727,715, respectively, for the nine months ended June 30, 2022, and the nine months ended June 30, 2021. Annual amortization expense for the next five years and thereafter is estimated to be $56,222 (remaining in 2022), $112,444, $112,444, $112,444, $112,444, and $112,444, respectively. The weighted average life of the intangible assets subject to amortization is 5.5 years on June 30, 2022. |
LEASES
LEASES | 9 Months Ended |
Jun. 30, 2022 | |
Leases [Abstract] | |
LEASES | NOTE 6 – LEASES Operating leases We have operating leases for office space and office equipment. Many leases include one or more options to renew, some of which include options to extend the leases for a long-term period, and some leases include options to terminate the leases within 30 days. In certain of our lease agreements, the rental payments are adjusted periodically to reflect actual charges incurred for capital area maintenance, utilities, inflation and/or changes in other indexes. June 30, September 30, 2022 2021 Short term portion $ 119,178 $ 167,101 Long term portion — 75,530 Total lease liability $ 119,178 $ 242,631 Maturity analysis under these lease agreements are as follows: 2022 (remaining months) $ 46,414 2023 84,175 Total undiscounted cash flows 130,589 Less: 10% Present value discount (11,411) Lease liability $ 119,178 Nine months ended June 30, 2022 2021 Operating lease expense $ 133,332 $ 137,530 Short-term lease expense 6,600 7,000 Total lease expense $ 139,932 $ 144,530 Operating lease expense is included in selling, general and administration expenses in the consolidated statement of operations. For the nine months ended June 30, 2022, cash payments against lease liabilities totaled $138,066, accretion on lease liability of $14,613. For the nine months ended June 30, 2021, cash payments against lease liabilities totaled $134,207, accretion on lease liability of $26,084. Weighted-average remaining lease term and discount rate for operating leases are as follows: Weighted-average remaining lease term 0.73 years Weighted-average discount rate 10 % |
ACCOUNTS PAYABLE AND ACCRUED EX
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 9 Months Ended |
Jun. 30, 2022 | |
Payables and Accruals [Abstract] | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | NOTE 7 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses consisted of the following as of June 30, 2022, and September 30, 2021: June 30, September 30, 2022 2021 Accounts payable $ 3,739,527 $ 1,147,585 Interest payable 190,515 106,631 Payroll liabilities 20,250 20,250 Other accrued liabilities 5,496,862 307,977 Accrued liabilities 5,707,627 434,858 Accrued royalties 3,316,708 633,463 Total accounts payable and accrued expenses $ 12,763,862 $ 2,215,906 |
CONVERTIBLE DEBENTURES PAYABLE
CONVERTIBLE DEBENTURES PAYABLE | 9 Months Ended |
Jun. 30, 2022 | |
Debt Instruments [Abstract] | |
CONVERTIBLE DEBENTURES PAYABLE | NOTE 8 – CONVERTIBLE DEBENTURES PAYABLE Convertible debentures as of June 30, 2022: Unpaid Contractual Net Carrying Value Principal Interest Rates Contractual Warrants Related party convertible debentures: Current Long Term Balance Cash PIK Maturity Date issued $3,000,000 convertible debenture amended October 23, 2020 (1) $ — $ — $ — — — — — $750,000 convertible debenture, December 1, 2020 (2) 673,753 — 750,000 4% 6% 12/1/2022 68,182 $800,000 convertible debenture, April 1, 2021 (2) 705,041 — 800,000 4% 6% 12/1/2022 72,727 $400,000 convertible debenture, May 1, 2021 (2) 349,730 — 400,000 4% 6% 12/1/2022 36,364 $400,000 convertible debenture, June 2, 2021 (2) 347,168 — 400,000 4% 6% 12/1/2022 36,364 Total related party convertible debentures, net $ 2,075,692 $ — $ 2,350,000 Convertible debentures: $350,000 convertible debenture, January 12, 2021 (2) $ 311,993 $ — $ 350,000 4% 6% 12/1/2022 87,500 $250,000 convertible debenture, May 21, 2021 (2) 218,122 — 250,000 4% 6% 12/1/2022 22,727 $2,079,993 convertible debenture, May 9, 2022 (5) 72,466 142,714 2,079,993 10% — 12/1/2023 — Total convertible debentures, net $ 602,581 $ 142,714 $ 2,679,993 Convertible debentures as of September 30, 2021: Unpaid Contractual Net Carrying Value Principal Interest Rates Contractual Warrants Related party convertible debentures: Current Long Term Balance Cash PIK Maturity Date issued $3,000,000 convertible debenture amended October 23, 2020 (1) $ 530,226 $ 876,256 $ 2,715,582 10% — 12/1/2023 3,550,709 $750,000 convertible debenture, December 1, 2020 (2) — 536,508 750,000 4% 6% 12/1/2022 68,182 $800,000 convertible debenture, April 1, 2021 (2) — 534,114 800,000 4% 6% 12/1/2022 72,727 $400,000 convertible debenture, May 1, 2021 (2) — 259,246 400,000 4% 6% 12/1/2022 36,364 $400,000 convertible debenture, June 2, 2021 (2) — 252,070 400,000 4% 6% 12/1/2022 36,364 Total related party convertible debentures, net $ 530,226 $ 2,458,194 $ 5,065,582 Convertible debentures: $350,000 convertible debenture, January 12, 2021 (3) $ — $ 243,578 $ 350,000 4% 6% 12/1/2022 87,500 $250,000 convertible debenture, May 21, 2021 (4) — 160,741 250,000 4% 6% 12/1/2022 22,727 Total convertible debentures, net $ — $ 404,319 $ 600,000 1) Unsecured convertible debentures (at $0.60 per common share) issued to related parties, amended October 23, 2020, interest at 10% per annum beginning November 1, 2020, monthly payments of unpaid interest accrued at 12.5% per annum will be paid in arrears through March 31, 2021, beginning April 1, 2021, we began paying equal monthly installments of principal and interest at 10% per annum through December 1, 2023. The debentures are convertible at any time prior to the maturity in whole or in parts into our common shares at a price of $0.60 per common share. We issued 3,550,709 common share purchase warrants, with each warrant exercisable at $0.86 for a period of 10 years. The beneficial conversion feature totaled $612,313 and was recorded as a debt discount. We also recorded the allocated fair value of the warrants, $2,387,687 as additional debt discount. On May 9, 2022, we completed a transfer of these convertible debentures in the aggregate principal amount of $2,068,399 by prepaying the principal and interest owed on such debentures in full under the terms of the debentures and issuing new substantially identical unsecured convertible debentures in the aggregate principal amount of $2,079,993 to a related party. (2) On December 1, 2020, we offered, in a private placement, the aggregate offering amount of up to $3,000,000 of Senior Secured Promissory Debentures, with a minimum subscription amount of $250,000 and common stock warrants with an aggregate exercise price of $750,000 and aggregate exercisable warrant shares of 272,727 shares. We treated the conversion feature as a derivative instrument. At the option of the Senior Secured Promissory Note holders, the notes are convertible at the earlier of a change of control event, a Qualified IPO, both of which are defined in the Promissory Note Agreement or the maturity date of December 1, 2022. If the conversion takes place at the maturity date, the note will be converted in whole or in parts (which cannot be less than 50% of the amount due under the note) into an amount of shares equal to the amount due divided by the average of the VWAP of common stock during each trading day during the thirty trading day period ending one trading day prior to the maturity date. If the conversion takes place at the change of control date, the note will be converted into an amount of shares equal to the amount due divided by the average of the VWAP of common stock during each trading day during the ten trading day period ending one trading day prior to the change of control effective date. In the event of a Qualified IPO, but subject to the closing of such Qualified IPO, the amount due shall convert in full on the closing date of such Qualified IPO into a number of shares equal to the amount due on such closing date divided by the applicable IPO conversion price, as defined in the Promissory Note Agreement. The Senior Secured Promissory Debentures under the offering accrue cash interest at 4% per annum and payment in kind (PIK) interest at 6% payable in our common stock, determined on a 360-day basis. Cash interest is payable in advance for the period from the issue date to November 30, 2021, and then is payable six months in arrears on June 1, 2022, then six months in arrears on December 1, 2022. The accrued PIK interest is payable in shares of common stock in an amount equal to the amount of PIK Interest accrued as of such date, divided by the volume weighted average price (VWAP) of common stock during each trading day during the ten-trading day period ending one trading day prior to the PIK Interest Payment due dates of June 1, 2021, December 1, 2021, June 1, 2022, and December 1, 2022. The proceeds received upon issuing the Senior Secured Promissory Debentures were first allocated to the fair value of the embedded features with the remainder to the debt host instrument. ● $750,000 December 1, 2020 debenture the fair value of the conversion feature of $339,216 and the allocated fair value of the warrants of $26,770 were recorded as debenture discount. ● $350,000 January 12, 2021 debenture the fair value of the conversion feature of $139,751 and the allocated fair value of the warrants of $31,282 were recorded as debenture discount. ● $800,000 April 1, 2021 debenture the fair value of the conversion feature of $319,431 and the allocated fair value of the warrants of $60,406 were recorded as debenture discount. ● $400,000 May 1, 2021 debenture the fair value of the conversion feature of $159,715 and the allocated fair value of the warrants of $31,309 were recorded as debenture discount. ● $250,000 May 21, 2021 debenture the fair value of the conversion feature of $99,822 and the allocated fair value of the warrants of $14,940 were recorded as debenture discount. ● $400,000 June 2, 2021 debenture the fair value of the conversion feature of $159,715 and the allocated fair value of the warrants of $30,481 were recorded as debenture discount. (3) Convertible debentures (at $0.60 per common share) issued to a former officer, interest at 10% per annum, amended as of October 22, 2020, provides those monthly payments of $7,939 including principal and interest are to be made beginning December 1, 2020 through its maturity date of December 1, 2023; secured by 5,000,000 shares of our common stock which are owned by the Chief Executive Officer. The debenture is convertible at any time prior to December 1, 2023, in whole or in parts into our common stock at a price of $0.60 per common share. As the effective conversion rate based on the principal $287,000 was $0.60 per share which was less than our stock price on the date of issuance, a beneficial conversion feature was present at the issuance date. The beneficial conversion feature totaled $30,996 and was recorded as a debt discount. For the nine months ended September 30, 2021, principal payments totaled $29,939. On July 2, 2021, $216,105 total debenture and $1,800 of unpaid accrued interest was converted into 363,176 shares of common stock and we recognized a gain on debt extinguishment of $15,006 on debenture discount. (4) Secured convertible debenture (primary interest in all of our assets), interest at 11% per annum, accrued monthly and the outstanding principal and unpaid accrued interest was due January 8, 2021. $326,143 total debenture and $50,213 of unpaid accrued interest was converted into 1,003,618 shares of common stock on January 8, 2021. The lender received 1,003,618 shares of common stock from this conversion and we recognized no gain or loss. (5) The following table presents the interest expense related to the contractual interest coupon and the amortization of debt discounts on the convertible debentures: Nine months ended June 30, 2022 2021 Interest expense $ 385,086 $ 488,248 Amortization of debt discounts 1,199,498 954,081 Total $ 1,584,584 $ 1,442,329 For the three months remaining 2022 $ — 2023 4,795,763 2024 234,230 Convertible debentures payable, related and non-related party 5,029,993 Less: Debt discount on convertible debentures payable (2,209,006) Total convertible debentures payable, related and non-related party, net $ 2,820,987 |
DEBT
DEBT | 9 Months Ended |
Jun. 30, 2022 | |
Line of Credit Facility [Abstract] | |
DEBT | NOTE 9 – DEBT Non-Revolving Lines of Credit as of June 30, 2022: Unpaid Contractual Net Carrying Value Principal Interest Rates Contractual Warrants Related party non-revolving line of credit: Current Long Term Balance Cash Maturity Date issued $4,022,986 non-revolving line of credit, April 25, 2022 (1) $ — $ 2,203,064 $ 4,022,986 12% 10/25/2023 1,149,425 Total related party non-revolving line of credit, net $ — $ 2,203,064 $ 4,022,986 Non-revolving line of credit: $2,200,000 non-revolving line of credit, May 13, 2022 (2) $ — 1,316,246 2,200,000 12% 11/13/2023 628,575 Total non-revolving line of credit, net $ — $ 1,316,246 $ 2,200,000 Non-Revolving Lines of Credit as of September 30, 2021: Unpaid Contractual Net Carrying Value Principal Interest Rates Contractual Warrants Related party non-revolving line of credit: Current Long Term Balance Cash Maturity Date issued $4,022,986 non-revolving line of credit, April 25, 2022 (1) $ — $ — $ — — — — Total related party non-revolving line of credit, net $ — $ — $ — Non-revolving line of credit: $2,200,000 non-revolving line of credit, May 13, 2022 (2) $ — — — — — — Total non-revolving line of credit, net $ — $ — $ — (1) On February 23, 2022, we entered into a Non-Revolving Line of Credit Loan Agreement (the “Prior Loan Agreement”), with Excel Family Partners, LLLP (“Excel”), an entity managed by Bruce Cassidy, a member of the Company’s board of directors, for aggregate loans of up to $1.5 million, which was amended on April 13, 2022, to increase the aggregate amount to $2.0 million (the “$2m Loan”). On April 25, 2022, we entered into a Non-Revolving Line of Credit Loan Agreement (the “Loan Agreement”) with Excel for an aggregate principal amount of $4,022,986 (the “Loan”). The Loan matures eighteen On April 25, 2022, we used $2.022 million of the proceeds of the Loan to prepay all of the remaining outstanding principal and interest of the $2m Loan and the Prior Loan Agreement was terminated in connection with such prepayment. In connection with the Loan, on April 25, 2022, we issued a warrant for an aggregate of up to 1,149,425 shares of our common stock. The warrant has an exercise price of $1.75 per share, expires on April 25, 2025 and shall be exercisable at any time prior to the expiration date. Under the Loan Agreement, we granted to the lender a security interest in all of our present and future assets and properties, real or personal, tangible or intangible, wherever located, including products and proceeds thereof. (2) On May 13, 2022, we entered into a Non-Revolving Line of Credit Loan Agreement (the “RAT Loan Agreement”) with several institutions and individuals and RAT Investment Holdings, LP, as administrator of the loan (the “Loan Administrator”) for aggregate principal amount of $2.2 million (the “RAT Loan”). The RAT Loan matures eighteen In connection with the RAT Loan Agreement, on May 13, 2022, we issued a warrant (each a “Warrant” and collectively, the “Warrants”) to each lender under the RAT Loan Agreement for an aggregate of up to 628,575 shares of our common stock (the “Warrant Shares”). Each Warrant has an exercise price of $1.75 per share, expires on May 13, 2025, and shall be exercisable at any time prior to the expiration date The following table presents the interest expense related to the contractual interest coupon and the amortization of debt discounts on the non-revolving lines of credit: Nine months ended June 30, 2022 2021 Interest expense $ 117,224 $ — Amortization of debt discounts 333,294 — Total $ 450,518 $ — For the three months remaining 2022 $ — 2023 — 2024 6,222,986 Non-revolving lines of credit payable, related and non-related party 6,222,986 Less: Debt discount on non-revolving lines of credit payable (2,703,676) Total non-revolving lines of credit payable, related and non-related party, net $ 3,519,310 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Jun. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 10 – COMMITMENTS AND CONTINGENCIES We may be involved in legal proceedings, claims and assessments arising in the ordinary course of business. Such matters are subject to many uncertainties, and outcomes are not predictable with assurance. There are no such loss contingencies that are included in the financial statements as of June 30, 2022. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Jun. 30, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 11 – RELATED PARTY TRANSACTIONS Related parties are natural persons or other entities that have the ability, directly or indirectly, to control another party or exercise significant influence over the party making financial and operating decisions. Related parties include other parties that are subject to common control or that are subject to common significant influences. We borrowed funds for business operations from a certain stockholder and board member through convertible debenture agreements and have remaining balances, including accrued interest amounting to $2,480,350 and $2,448,871 as of June 30, 2022, and September 30, 2021, respectively. We incurred interest expense, including amortization of debt discount for these convertible debentures in the amounts of $666,515 and $267,416 for the nine months ended June 30, 2022, and 2021, respectively. See Note 8 for Convertible Debentures discussion. We borrowed funds for business operations from a certain stockholder and board member through non-revolving lines of credit agreements and have remaining balances, including accrued interest amounting to $4,105,492 and $0 as of June 30, 2022, and September 30, 2021, respectively. We incurred interest expense, including amortization of debt discount for these non-revolving lines of credit in the amounts of $331,548 and $0 for the nine months ended June 30, 2022, and 2021, respectively. See Note 9 Debt discussion. On February 23, 2022, we entered into a Non-Revolving Line of Credit Loan Agreement (the “Prior Loan Agreement”), with Excel Family Partners, LLLP (“Excel”), an entity managed by Bruce Cassidy, a member of our board of directors, for aggregate loans of up to $1.5 million, which was amended on April 13, 2022, to increase the aggregate amount to $2.0 million (the “$2m Loan”). Effective as of April 25, 2022, we entered into a Non-Revolving Line of Credit Loan Agreement with Excel for principal amount of up to $4,022,986, evidenced by a Non-Revolving Line of Credit Promissory Note, also effective as of April 25, 2022. The Loan matures eighteen On May 9, 2022 we completed a transfer of certain of our outstanding unsecured convertible debentures in the aggregate principal amount of $2,068,399 (the “Old Debentures”) by prepaying the principal and interest owed on such debentures in full under the terms of the debentures and issuing new substantially identical unsecured convertible debentures in the aggregate principal amount of $2,079,993(the “New Debentures”) to a related party (the “Transfer”). The New Debentures, like the Old Debentures, mature on December 1, 2023, require monthly installments of principal and interest at 10% per annum and are convertible at any time prior to the maturity in whole or in part into our common shares at a price of $0.60 per common share. We had previously sought, but did not receive, certain concessions from the holders of the Old Debentures related to ongoing monthly principal and interest payments and the conversion of the Old Debentures into shares of our common stock in connection with any significant public equity capital raise by us. In connection with the issuance of the New Debentures, the holder thereof (the “Transferee”) has agreed to a cessation of principal and interest payments on the New Debentures until December 1, 2022, at which time accrued interest would be paid in a lump sum in cash and monthly principal and interest payments would resume. The Transferee has further agreed to convert the New Debentures into shares of our common stock upon any significant public equity capital raise by us. |
STOCKHOLDERS' EQUITY (DEFICIT)
STOCKHOLDERS' EQUITY (DEFICIT) | 9 Months Ended |
Jun. 30, 2022 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY (DEFICIT) | NOTE 12 –STOCKHOLDERS’ EQUITY (DEFICIT) Convertible Preferred Stock Of the 16,666,667 shares of preferred stock authorized, we had designated (i) 3,333,334 shares of preferred stock as Series A Convertible Preferred Stock (the “Series A Preferred Stock”) and (ii) 3,333,334 shares of preferred stock as Series B Convertible Preferred Stock (the “Series B Preferred Stock.” As of June 30, 2022, and 2021, we had 0 and 30,667 shares of Series Preferred 2021 outstanding Each share of Series B Preferred Stock has a liquidation preference of $1.50 per share, is entitled to 100 votes per share and is convertible at any time at the discretion of the holder thereof into 100 shares of common stock. We evaluated the features of the Convertible Preferred Stock under ASC 480 and classified them as permanent equity because the Convertible Preferred stock is not mandatorily or contingently redeemable at the stockholder’s option and the liquidation preference that exists does not fall within the guidance of SEC Accounting Series Release No. 268 – Presentation in Financial Statements of “Redeemable Preferred Stocks” Common stock Our authorized capital stock consists of 316,666,667 shares of common stock, $0.0001 par value per share, and 16,666,667 shares of preferred stock, $0.0001 par value per share. As of June 30, 2022 and 2021, there were 153,539,596 and 127,316,746, respectively, shares of common stock issued outstanding Nine months ended June 30, 2022 During the nine months ended June 30, 2022, we issued 69,455 shares of common stock with a value of $177,000 as payment in kind for accrued interest due on certain convertible notes. Of this amount, 55,329 shares of common stock at a value of $141,000 was issued to a board member. During the nine months ended June 30, 2022, we issued 20,000,000 shares of common stock to a board member upon conversion of 200,000 shares of Series B Preferred Stock. Nine months ended June 30, 2021 During the nine months ended June 30, 2021, we issued 1,369,863 shares of our common stock with a value of $2,671,233 for the purchase of certain intangible assets. During the nine months ended June 30, 2021, we issued 97,891 shares of our common stock with a value of $194,803 as a debt settlement. During the nine months ended June 30, 2021, we issued 1,180,880 shares of our common stock, valued at $2,065,996 capitalized as license content assets. During the nine months ended June 30, 2021, we issued 2,457,898 shares of our common stock with a value of $6,553,235 for the purchase of 100% ownership in EON. During the nine months ended June 30, 2021, we issued an aggregate of 3,228,000 shares of our common stock for gross cash proceeds of $4,034,935. We recorded no offering costs. During the nine months ended June 30, 2021, we issued 497,429 shares of our common stock in satisfaction of a common stock subscription of $485,144. During the nine months ended June 30, 2021, we converted a convertible note plus accrued interest in the amount of $376,356 into 1,003,618 shares of our common stock. During the nine months ended June 30, 2021, we issued 3,066,700 shares of our common stock in connection with the conversion of series A convertible preferred stock. During the nine months ended June 30, 2021, we issued 79,051 shares of our common stock for consulting services valued at $200,000. See Note 13 – Stock Options and Warrants for stock compensation discussion. |
STOCK OPTIONS AND WARRANTS
STOCK OPTIONS AND WARRANTS | 9 Months Ended |
Jun. 30, 2022 | |
Share-based Payment Arrangement, Additional Disclosure [Abstract] | |
STOCK OPTIONS AND WARRANTS | NOTE 13 – STOCK OPTIONS AND WARRANTS Options Option valuation models require the input of highly subjective assumptions. The fair value of stock-based payment awards was estimated using the Black-Scholes option model with a volatility figure derived from using our historical stock prices. We account for the expected life of options based on the contractual life of options for non-employees. For employees, our accounts for the expected life of options in accordance with the “simplified” method, which is used for “plain-vanilla” options, as defined in the accounting standards codification. The risk-free interest rate was determined from the implied yields of U.S. Treasury zero-coupon bonds with a remaining life consistent with the expected term of the options. The following table summarizes the stock option activity for the nine months ended June 30, 2022: Weighted Weighted Average Average Remaining Aggregate Options Exercise Price Contractual Term Intrinsic Value Outstanding at September 30, 2021 17,833,356 $ 1.04 8.30 $ 25,478,339 Grants 1,471,200 2.46 9.49 4,527,654 Exercised — — — — Expired — — — — Forfeited (338,251) (2.13) — — Outstanding at June 30, 2022 18,966,305 $ 1.13 7.68 $ 30,005,993 Exercisable at June 30, 2022 13,652,168 $ 0.99 7.32 $ 23,582,392 The aggregate intrinsic value in the preceding tables represents the total pretax intrinsic value, based on options with an exercise price less than our stock price of $2.71 as of June 30, 2022, and $2.60 as of June 30, 2021, which would have been received by the option holders had those option holders exercised their options as of that date. The following table presents information related to stock options on June 30, 2022: Options outstanding Weighted Options average exercisable Exercise Number of remaining life number of price options in years options $ 0.86 1,148,371 4.17 1,148,371 0.66 4,663,935 6.34 4,663,935 0.89 2,500,000 7.96 2,008,000 1.10 7,882,799 8.37 4,607,142 0.57 300,000 8.67 300,000 2.84 250,000 8.83 250,000 2.75 600,000 8.85 216,667 2.35 125,000 9.22 15,278 2.40 50,000 9.08 — 2.50 50,000 9.09 50,000 2.30 836,200 9.27 392,775 2.75 425,000 9.82 — 2.58 135,000 9.88 — 18,966,305 13,652,168 Stock-based compensation We recognize compensation expense for all stock options granted using the fair value-based method of accounting. During the nine months ended June 30, 2022, we issued 1,471,200 options valued at $2.46 per option. As of June 30, 2022, the total compensation cost related to nonvested awards not yet recognized is $9,525,576 and the weighted average period over which expense is expected to be recognized in months is 24.5. We calculated the fair value of options issued using the Black-Scholes option pricing model, with the following assumptions: June 30, 2022 Weighted average fair value of options granted $ 1.13 Expected life 5.00 -10.00 years Risk-free interest rate 0.01 - 2.93 % Expected volatility 55.80 - 73.00 % Expected dividends yield — % Forfeiture rate — % The stock-based compensation expense related to option grants was $3,948,272 and $7,036,800, for the nine months ended June 30, 2022, and 2021, respectively. Warrants The following table summarizes the changes in warrants outstanding and the related prices for the shares of our common stock: Warrants outstanding Warrants exercisable Weighted Weighted average average remaining Weighted remaining contractual average contractual Number life exercise Number life Exercise prices outstanding (years) price exercisable (years) $ 0.86 3,850,709 4.87 0.86 3,850,709 4.87 0.38 2,000,000 4.44 0.38 2,000,000 4.44 0.75 2,666,667 7.70 0.75 2,666,667 7.70 2.75 323,864 0.42 2.75 323,864 0.42 2.80 50,000 8.82 2.80 50,000 8.82 2.75 6,573,460 2.25 2.75 6,573,460 2.25 2.35 187,324 4.71 2.35 62,733 4.71 1.75 1,149,425 2.82 1.75 1,149,425 2.82 1.75 628,575 2.87 1.75 628,575 2.87 3.00 200,000 2.88 3.00 110,000 2.88 2.65 300,000 2.96 2.65 — 2.96 The following table summarizes the warrant activity for the nine months ended June 30, 2022: Weighted average exercise Number of price per shares share Outstanding at September 30, 2021 15,464,700 $ 1.63 Issued 2,465,324 2.01 Exercised — — Expired — — Outstanding at June 30, 2022 17,930,024 $ 1.68 We record all warrants granted using the fair value-based method of accounting. During the nine months ended June 30, 2022, we issued 687,324 warrants to various companies for consulting services and recorded consulting expense of $254,013. During the nine months ended June 30, 2022, we issued 1,778,000 warrants in conjunction with non-revolving lines of credit. During the nine months ended June 30, 2021, we issued 213,637 warrants in conjunction with the issue of senior secured convertible debentures, of which 213,637 warrants were issued to a related party, in the total amount of $2,350,000 and recorded the allocated fair values of the warrants of $175,859 as additional debt discounts. We calculated the fair value of warrants issued using the Black-Scholes option pricing model, with the following assumptions: June 30, 2022 Weighted average fair value of warrants granted $ 0.74 Expected life 1.75 - 10 years Risk-free interest rate 0.15 - 3.35 % Expected volatility 57.30 - 73.00 % Expected dividends yield — % Forfeiture rate — % |
INCOME TAX
INCOME TAX | 9 Months Ended |
Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAX | NOTE 14 – INCOME TAXES We calculate our interim income tax provision in accordance with ASC Topic 270, Interim Reporting and ASC Topic 740, Accounting for Income Taxes. At the end of each interim period, we estimate the annual effective tax rate and apply that rate to our ordinary year to date earnings. In addition, the tax effects of unusual or infrequently occurring items including changes in judgment about valuation allowances and effects of changes in enacted tax laws are recognized discretely in the interim period in which the change occurs. The computation of the annual estimated effective tax rate at each interim period requires certain estimates and significant judgment including the expected operating (loss) income for the year, permanent and temporary differences as a result of differences between amounts measured and recognized in accordance with tax laws and financial accounting standards, and the likelihood of recovering deferred tax assets generated in the current fiscal year. The accounting estimates used to compute income tax expense may change as new events occur or additional information is obtained. For the nine months ended June 30, 2022, we recorded an income tax provision of $1,051 related to state and local taxes. For the nine months ended June 30, 2021, we recorded an income tax provision of $99,830 primarily related to a true-up of prepaid taxes from 2019. The effective rate for both the nine months ended June 30, 2022, and June 30, 2021, differ from the U.S. federal statutory rate of 21% as no income tax benefit was recorded for current year operating losses as we maintain a full valuation allowance on our deferred tax assets. For the three months ended June 30, 2022, we recorded an income tax provision of $0 related to state and local taxes. For the three months ended June 30, 2021, we recorded an income tax provision of $0 related to state and local taxes. The effective rate for both the three months ended June 30, 2022, and June 30, 2021, differ from the U.S. federal statutory rate of 21% as no income tax benefit was recorded for current year operating losses as we maintain a full valuation allowance on our deferred tax assets. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Jun. 30, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 15 – SUBSEQUENT EVENTS Loan Agreement Effective as of July 29, 2022, we entered into a Loan and Security Agreement (the “Loan Agreement”) with Industrial Funding Group, Inc. (the “Initial Lender”) for a revolving loan credit facility for the principal sum of up to four million dollars ($4.0 million), and through the exercise of an accordion feature, a total sum of up to ten million dollars ($10 million) (the “Loan”), evidenced by a Revolving Loan Secured Promissory Note (the “Note”), also effective as of July 29, 2022. As of August 2, 2022, we borrowed approximately two million dollars ($2.0 million) under the Loan, and the Initial Lender assigned the Loan Agreement, and the loan documents related thereto, to GemCap Solutions, LLC (the “Senior Lender”). The Loan matures twenty-four The Wall Street Journal In addition, the Loan Agreement has restrictive covenants, including covenants preventing us from effecting a change of control, disposing of our assets outside of the ordinary course of business, incurring additional debt (subject to certain exceptions), changing our business as currently conducted, paying dividends or settling claims involving the collateral under the Loan Agreement. Under the Loan Agreement, we have granted to the Senior Lender a first-priority security interest in all of our present and future property and assets, including products and proceeds thereof. In connection with the Loan, our existing secured lenders delivered subordination agreements (the “Subordination Agreements”) to the Senior Lender (each lender, a “Subordinated Lender” and together, the “Subordinated Lenders”). In connection with the delivery of the Subordination Agreements by the Subordinated Lenders, on July 29, 2022, we issued warrants (each a “Warrant” and collectively, the “Warrants”) to each Subordinated Lender on identical terms for an aggregate of up to 888,997 shares of our common stock (the “Warrant Shares”). Each Warrant has an exercise price of $1.75 per share, expires on July 29, 2025 (the “Expiration Date”), and shall be exercisable at any time prior to the Expiration Date. One Warrant for 574,712 Warrant Shares was issued to Eagle Investment Group, LLC, an entity managed by Bruce Cassidy, a member of our board of directors, as directed by its affiliate, Excel Family Partners, LLLP (“Excel”), one of the Subordinated Lenders. The Subordinated Lenders receiving Warrants for the remaining 314,285 Warrant Shares also will receive a cash payment of $22,000 six months from the date of the Subordination Agreements, representing one percent (1.00%) of the outstanding principal amount of the loan. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation The unaudited |
Use of estimates | Use of estimates The preparation of the unaudited condensed consolidated financial statements in conformity with US 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 revenue and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include assumptions used in the fair value of stock-based compensation, the fair value of other equity and debt instruments, fair value of intangible assets and recoverability of license content assets. |
Business combinations | Business combinations We account for business acquisitions under Accounting Standards Codification (“ASC”) 805, Business Combinations. |
Segment reporting | Segment reporting We report as one reportable segment because we do not have more than one operating segment. Our business activities, revenues and expenses are evaluated by management as one reportable segment. |
Cash | Cash Cash and cash equivalents include all highly liquid monetary instruments with original maturities of three months or less when purchased. These investments are carried at cost, which approximates fair value. Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash deposits. We maintain our cash in institutions insured by the Federal Deposit Insurance Corporation (“FDIC”). At times, our cash and cash equivalent balances may be uninsured or in amounts that exceed the FDIC insurance limits. We have not experienced any losses on such accounts. On June 30, 2022, and September 30, 2021, we had no cash equivalents. As of June 30, 2022, and September 30, 2021, approximately $459,725 and $3,655,716 of cash exceeded the FDIC insurance limits, respectively. |
Accounts receivable | Accounts receivable Accounts receivable represent amounts due from customers. We assess the collectability of receivables on an ongoing basis. A provision for the impairment of receivables involves significant management judgment and includes the review of individual receivables based on individual customers, current economic trends and analysis of historical bad debts. As of June 30, 2022, and September 30, 2021, we recorded an allowance for doubtful accounts of $445,946 and $426,813, respectively. |
Concentration of credit risk | Concentration of credit risk During the nine-months ended June 30, 2022, we had three customers which each individually comprised greater than 10% of net revenue. These customers represented 25%, 20%, and 11% respectively. No other customer accounted for more than 10% of net revenue during the periods presented. As of June 30, 2022, three customers accounted for a total of 52% of our accounts receivable balance or 24%, 18%, and 10%, respectively. No other customer accounted for more than 10% of total accounts receivable. We grant credit in the normal course of business to our customers. Periodically, we review past due accounts and make decisions about future credit on a customer-by-customer basis. Credit risk is the risk that one party to a financial instrument will cause a loss for the other party by failing to discharge an obligation. Our concentration of credit risk was not significant as of June 30, 2022, and September 30, 2021. |
License Content Asset | License Content Asset On January 1, 2020, we adopted the guidance in ASU 2019-02, Entertainment—Films—Other Assets—Film Costs (Subtopic 926-20) and Entertainment—Broadcasters—Intangibles—Goodwill and Other (Subtopic 920-350): Improvements to Accounting for Costs of Films and License Agreements for Program Materials |
Property and equipment, net | Property and equipment, net Property and equipment are stated at cost, less accumulated depreciation. Depreciation is calculated using the straight-line method over the asset’s estimated useful life. The capitalization policy for the company is to capitalize property and equipment purchases greater than $3,000, as well as internally-developed software enhancements. Expenditures for maintenance and repairs are expensed as incurred. When retired or otherwise disposed, the related carrying value and accumulated depreciation are removed from the respective accounts and the net difference less any amount realized from disposition is reflected in earnings. See below for estimated useful lives: Equipment 3-5 years Software 3 years |
Goodwill and other intangible assets | Goodwill and other intangible assets Goodwill represents the excess of the purchase consideration over the fair value of the net tangible and identifiable intangible assets acquired in a business combination. Goodwill and other intangible assets determined to have an indefinite useful life are not amortized but are subject to impairment tests. We conduct our annual impairment tests or whenever events and changes in circumstances suggest that the carrying amount may not be recoverable. We conducted the annual impairment test on September 30, 2021. When evaluating goodwill and indefinite-lived intangible assets for impairment, we may first perform an assessment of qualitative factors to determine if the fair value of the reporting unit or the intangible asset is more-likely-than-not greater than the carrying amount. Significant factors considered in this assessment include, but are not limited to, macro-economic conditions, market and industry conditions, cost considerations, the competitive environment, overall financial performance, and results of past impairment tests. If, based on a review of the qualitative factors, we determine it is more-likely-than-not that the fair value is greater than the carrying value, we may bypass a quantitative test for impairment. In performing the quantitative test for impairment of goodwill, we compare the fair value of each reporting unit with it carrying amount, including goodwill, in order to identify a potential impairment. Measurement of the fair value of a reporting unit is based on a fair value measure using the sum of the discounted estimated future cash flows. Estimates of forecasted cash flows involve measurement uncertainty, and it is therefore possible that reductions in the carrying value of goodwill may be required in the future because of changes in management’s future cash flow estimates. When the fair value of a reporting unit is less than its carrying amount, goodwill of the reporting unit is considered to be impaired. Effective January 1, 2020, we adopted the guidance in Accounting Standards Update (“ASU”) 2017-04, Simplifying the Test for Goodwill Impairment |
Operating leases | Operating leases We determine if an arrangement is a lease at inception. Operating lease right-of-use assets (“ROU assets”) and short-term and long-term lease liabilities are included on the face of the consolidated balance sheet. ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use an incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Our 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 with lease and non-lease components, which are accounted for as a single lease component. For lease agreements with terms less than 12 months, we have elected the short-term lease measurement and recognition exemption and recognize such lease payments on a straight-line basis over the lease term. |
Fair value measurement | Fair value measurement We determine the fair value of our assets and liabilities using a hierarchy established by the accounting guidance that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to valuations based upon unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to valuations based upon unobservable inputs that are significant to the valuation (Level 3 measurements). The three levels of valuation hierarchy are defined as follows: ● Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets. ● Level 2 inputs to the valuation methodology included quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets in inactive markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. ● Level 3 inputs to the valuation methodology are one or more unobservable inputs which are significant to the fair value measurement. The carrying amount of our financial instruments, including cash, accounts receivable, deposits, short-term portion of notes receivable and notes payable, and current liabilities approximate fair value due to their short-term nature. We do not have financial assets or liabilities that are required under US GAAP to be measured at fair value on a recurring basis. We have not elected to use fair value measurement option for any assets or liabilities for which fair value measurement is not presently required. We record assets and liabilities at fair value on a nonrecurring basis as required by US GAAP. Assets recognized or disclosed at fair value in the condensed The following table summarizes fair value measurements of the Derivative Liability as of June 30, 2022: Quoted Prices in Significant Active Markets Significant Other Unobservable For Identical Items Observable Inputs Inputs (Level 1) (Level 2) (Level 3) Total Derivative liabilities — — 893,925 893,925 Total $ — $ — $ 893,925 $ 893,925 The following table summarizes fair value measurements of the Derivative Liability as of September 30, 2021: Quoted Prices in Significant Active Markets Significant Other Unobservable For Identical Items Observable Inputs Inputs (Level 1) (Level 2) (Level 3) Total Derivative liabilities — — 1,058,633 1,058,633 Total $ — $ — $ 1,058,633 $ 1,058,633 The following table summarizes changes in fair value measurements of the Derivative Liability during the nine months ended June 30, 2022: Balance as of September 30, 2021 $ 1,058,633 Derivative liability issued with convertible debentures — Change in fair value (164,708) Balance as of June 30, 2022 $ 893,925 The following table summarizes changes in fair value measurements of the Derivative Liability during the three months ended June 30, 2022: Balance as of March 31, 2022 $ 912,320 Change in fair value (18,395) Balance as of June 30, 2022 $ 893,925 The following table summarizes the unobservable inputs used in the valuation of the derivatives during the nine months ended June 30, 2022: Expected term 0.42 - 2 years Discount rate 7.12% - 15.00% Volatility 75% - 110.0% |
Convertible debt and derivative treatment | Convertible debt and derivative treatment When we issue debt with a conversion feature, we must first assess whether the conversion feature meets the requirements to be treated as a derivative, as follows: a) one or more underlyings, typically the price of our common stock; b) one or more notional amounts or payment provisions or both, generally the number of shares upon conversion; c) no initial net investment, which typically excludes the amount borrowed; and d) net settlement provisions, which in the case of convertible debt generally means the stock received upon conversion can be readily sold for cash. An embedded equity-linked component that meets the definition of a derivative does not have to be separated from the host instrument if the component qualifies for the scope exception for certain contracts involving an issuer’s own equity. The scope exception applies if the contract is both a) indexed to its own stock, and b) classified in shareholders’ equity in its statement of financial position. If the conversion feature within convertible debt meets the requirements to be treated as a derivative, we estimate the fair value of the convertible debt derivative using the Monte Carlo Method upon the date of issuance. If the fair value of the convertible debt derivative is higher than the face value of the convertible debt, the excess is immediately recognized as interest expense. Otherwise, the fair value of the convertible debt derivative is recorded as a liability with an offsetting amount recorded as a debt discount, which offsets the carrying amount of the debt. The convertible debt derivative is revalued at the end of each reporting period and any change in fair value is recorded as a gain or loss in the statement of operations. The debt discount is amortized through interest expense over the life of the debt. |
Convertible debt and beneficial conversion features | Convertible debt and beneficial conversion features If the conversion feature is not treated as a derivative, we assess whether it is a beneficial conversion feature (“BCF”). A BCF exists if the conversion price of the convertible debt instrument is less than the stock price on the commitment date. This typically occurs when the conversion price is less than the fair value of the stock on the date the instrument was issued. The value of a BCF is equal to the intrinsic value of the feature, the difference between the conversion price and the common stock into which it is convertible and is recorded as additional paid in capital and as a debt discount in the consolidated balance sheets. We amortize the balance over the life of the underlying debt as amortization of debt discount expense in the consolidated statements of operations. If the debt is retired early, the associated debt discount is then recognized immediately as amortization of debt discount expense in the consolidated statements of operations. If the conversion feature does not qualify for either the derivative treatment or as a BCF, the convertible debt is treated as traditional debt. |
Advertising costs | Advertising costs We expense all advertising costs as incurred. Advertising and marketing costs for the nine months ended June 30, 2022, and 2021 were $4,232,734 and $776,086, respectively. |
Revenue recognition | Revenue recognition We recognize revenue in accordance with ASC 606 , Revenue from Contracts with Customers specified by the customer, revenue is deferred until all acceptance criteria have been met. Revenues are recognized under Topic 606 in a manner that reasonably reflects the delivery of our products and services to customers in return for expected consideration and includes the following elements: ● executed contracts with our customers that it believes are legally enforceable; ● identification of performance obligations in the respective contract; ● determination of the transaction price for each performance obligation in the respective contract; ● allocation of the transaction price to each performance obligation; and ● recognition of revenue only when we satisfy each performance obligation. Performance obligations and significant judgments Our revenue streams can be categorized into the following performance obligations and recognition patterns: o Delivery of streaming services including content encoding and hosting. We recognize revenue over the term of the service based on bandwidth usage. o Delivery of subscription content services in customized formats. We recognize revenue over the term of the service. o Delivery of hardware for ongoing subscription content delivery through software. We recognize revenue at the point of hardware delivery. o Revenue share arrangements, where platform providers distribute our licensed content and providers pay us a portion of the usage-based advertising revenues. Transaction prices for performance obligations are explicitly outlined in relevant agreements; therefore, we do not believe that significant judgments are required with respect to the determination of the transaction price, including any variable consideration identified. |
Customer acquisition costs | Customer acquisition costs We record commission expense associated with subscription revenue. Commissions are included in operating expenses. We have elected the practical expedient that allows us to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that we otherwise would have recognized is one year or less. |
Cost of revenue | Cost of revenue Cost of revenue represents the amortized cost of ongoing licensing and hosting fees, which is recognized over time based on usage patterns. The depreciation expense associated with the Loop players is not included in cost of sales. |
Deferred income | Deferred income We bill subscription services in advance of when the service period is performed. The deferred income recorded at June 30, 2022, and September 30, 2021 represents our accounting for the timing difference between when the subscription fees are received and when the performance obligation is satisfied. |
Net loss per share | Net loss per share We account for net loss per share in accordance with ASC subtopic 260-10, Earnings Per Share Basic net loss per share is computed by dividing net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding during each period. It excludes the dilutive effects of any potentially issuable common shares. Diluted net loss per share is calculated by including any potentially dilutive share issuances in the denominator. The following securities are excluded from the calculation of weighted average diluted shares at June 30, 2022, and September 30, 2021, respectively, because their inclusion would have been anti-dilutive. June 30, September 30, 2022 2021 Options to purchase common stock 18,966,306 17,833,356 Warrants to purchase common stock 17,930,025 15,464,700 Series A preferred stock — — Series B preferred stock — 20,000,000 Convertible debentures 4,942,491 5,815,323 Total common stock equivalents 41,838,822 59,113,379 |
Stock-based compensation | Share-based compensation Share-based compensation issued to employees is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the requisite service period. We measure the fair value of the share-based compensation issued to non-employees using the stock price observed in the trading market (for stock transactions) or the fair value of the award (for non-stock transactions), which were more reliably determinable measures of fair value than the value of the services being rendered. The measurement date is the earlier of (1) the date at which commitment for performance by the counterparty to earn the equity instruments is reached, or (2) the date at which the counterparty’s performance is complete. |
Recently adopted accounting pronouncements | Recent accounting pronouncements In September 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. In August 2020, the FASB issued ASU 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) |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Schedule of fair value measurements | The following table summarizes fair value measurements of the Derivative Liability as of June 30, 2022: Quoted Prices in Significant Active Markets Significant Other Unobservable For Identical Items Observable Inputs Inputs (Level 1) (Level 2) (Level 3) Total Derivative liabilities — — 893,925 893,925 Total $ — $ — $ 893,925 $ 893,925 The following table summarizes fair value measurements of the Derivative Liability as of September 30, 2021: Quoted Prices in Significant Active Markets Significant Other Unobservable For Identical Items Observable Inputs Inputs (Level 1) (Level 2) (Level 3) Total Derivative liabilities — — 1,058,633 1,058,633 Total $ — $ — $ 1,058,633 $ 1,058,633 |
Schedule of fair value measurements | The following table summarizes changes in fair value measurements of the Derivative Liability during the nine months ended June 30, 2022: Balance as of September 30, 2021 $ 1,058,633 Derivative liability issued with convertible debentures — Change in fair value (164,708) Balance as of June 30, 2022 $ 893,925 The following table summarizes changes in fair value measurements of the Derivative Liability during the three months ended June 30, 2022: Balance as of March 31, 2022 $ 912,320 Change in fair value (18,395) Balance as of June 30, 2022 $ 893,925 The following table summarizes the unobservable inputs used in the valuation of the derivatives during the nine months ended June 30, 2022: Expected term 0.42 - 2 years Discount rate 7.12% - 15.00% Volatility 75% - 110.0% |
Schedule of weighted average diluted shares | The following securities are excluded from the calculation of weighted average diluted shares at June 30, 2022, and September 30, 2021, respectively, because their inclusion would have been anti-dilutive. June 30, September 30, 2022 2021 Options to purchase common stock 18,966,306 17,833,356 Warrants to purchase common stock 17,930,025 15,464,700 Series A preferred stock — — Series B preferred stock — 20,000,000 Convertible debentures 4,942,491 5,815,323 Total common stock equivalents 41,838,822 59,113,379 |
INVENTORY (Tables)
INVENTORY (Tables) | 9 Months Ended |
Jun. 30, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory | Our finished goods inventory consisted of the following on June 30, 2022, and September 30, 2021: June 30, September 30, 2022 2021 Computers $ 7,830 $ 6,881 Hasp keys 4,724 3,581 Loop player — 212,586 Total inventory $ 12,554 $ 223,048 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Jun. 30, 2022 | |
Table Text Block Supplement [Abstract] | |
Schedule of other intangible assets | Our other intangible assets, each definite lived assets, consisted of the following as of June 30, 2022, and September 30, 2021: June 30, September 30, Useful life 2022 2021 Customer relationships nine years $ 1,012,000 $ 1,012,000 Content library two years 198,000 198,000 Total intangible assets, gross 1,210,000 1,210,000 Less: accumulated amortization (591,556) (507,222) Total (591,556) (507,222) Total intangible assets, net $ 618,444 $ 702,778 |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Jun. 30, 2022 | |
Leases [Abstract] | |
Schedule of lease liability | June 30, September 30, 2022 2021 Short term portion $ 119,178 $ 167,101 Long term portion — 75,530 Total lease liability $ 119,178 $ 242,631 |
Schedule of maturity analysis | Maturity analysis under these lease agreements are as follows: 2022 (remaining months) $ 46,414 2023 84,175 Total undiscounted cash flows 130,589 Less: 10% Present value discount (11,411) Lease liability $ 119,178 |
Schedule of lease expense | Nine months ended June 30, 2022 2021 Operating lease expense $ 133,332 $ 137,530 Short-term lease expense 6,600 7,000 Total lease expense $ 139,932 $ 144,530 |
Schedule of weighted-average remaining lease term and discount rate | Weighted-average remaining lease term and discount rate for operating leases are as follows: Weighted-average remaining lease term 0.73 years Weighted-average discount rate 10 % |
ACCOUNTS PAYABLE AND ACCRUED _2
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | 9 Months Ended |
Jun. 30, 2022 | |
Payables and Accruals [Abstract] | |
Schedule of accounts payable and accrued expenses | Accounts payable and accrued expenses consisted of the following as of June 30, 2022, and September 30, 2021: June 30, September 30, 2022 2021 Accounts payable $ 3,739,527 $ 1,147,585 Interest payable 190,515 106,631 Payroll liabilities 20,250 20,250 Other accrued liabilities 5,496,862 307,977 Accrued liabilities 5,707,627 434,858 Accrued royalties 3,316,708 633,463 Total accounts payable and accrued expenses $ 12,763,862 $ 2,215,906 |
CONVERTIBLE DEBENTURES PAYABLE
CONVERTIBLE DEBENTURES PAYABLE (Tables) | 9 Months Ended |
Jun. 30, 2022 | |
Debt Instrument [Line Items] | |
Schedule of convertible debentures to related parties | Convertible debentures as of June 30, 2022: Unpaid Contractual Net Carrying Value Principal Interest Rates Contractual Warrants Related party convertible debentures: Current Long Term Balance Cash PIK Maturity Date issued $3,000,000 convertible debenture amended October 23, 2020 (1) $ — $ — $ — — — — — $750,000 convertible debenture, December 1, 2020 (2) 673,753 — 750,000 4% 6% 12/1/2022 68,182 $800,000 convertible debenture, April 1, 2021 (2) 705,041 — 800,000 4% 6% 12/1/2022 72,727 $400,000 convertible debenture, May 1, 2021 (2) 349,730 — 400,000 4% 6% 12/1/2022 36,364 $400,000 convertible debenture, June 2, 2021 (2) 347,168 — 400,000 4% 6% 12/1/2022 36,364 Total related party convertible debentures, net $ 2,075,692 $ — $ 2,350,000 Convertible debentures: $350,000 convertible debenture, January 12, 2021 (2) $ 311,993 $ — $ 350,000 4% 6% 12/1/2022 87,500 $250,000 convertible debenture, May 21, 2021 (2) 218,122 — 250,000 4% 6% 12/1/2022 22,727 $2,079,993 convertible debenture, May 9, 2022 (5) 72,466 142,714 2,079,993 10% — 12/1/2023 — Total convertible debentures, net $ 602,581 $ 142,714 $ 2,679,993 Convertible debentures as of September 30, 2021: Unpaid Contractual Net Carrying Value Principal Interest Rates Contractual Warrants Related party convertible debentures: Current Long Term Balance Cash PIK Maturity Date issued $3,000,000 convertible debenture amended October 23, 2020 (1) $ 530,226 $ 876,256 $ 2,715,582 10% — 12/1/2023 3,550,709 $750,000 convertible debenture, December 1, 2020 (2) — 536,508 750,000 4% 6% 12/1/2022 68,182 $800,000 convertible debenture, April 1, 2021 (2) — 534,114 800,000 4% 6% 12/1/2022 72,727 $400,000 convertible debenture, May 1, 2021 (2) — 259,246 400,000 4% 6% 12/1/2022 36,364 $400,000 convertible debenture, June 2, 2021 (2) — 252,070 400,000 4% 6% 12/1/2022 36,364 Total related party convertible debentures, net $ 530,226 $ 2,458,194 $ 5,065,582 Convertible debentures: $350,000 convertible debenture, January 12, 2021 (3) $ — $ 243,578 $ 350,000 4% 6% 12/1/2022 87,500 $250,000 convertible debenture, May 21, 2021 (4) — 160,741 250,000 4% 6% 12/1/2022 22,727 Total convertible debentures, net $ — $ 404,319 $ 600,000 |
Schedule of interest expense related to the contractual interest coupon and the amortization of debt discounts on the convertible debentures | Nine months ended June 30, 2022 2021 Interest expense $ 385,086 $ 488,248 Amortization of debt discounts 1,199,498 954,081 Total $ 1,584,584 $ 1,442,329 |
Convertible debentures. | |
Debt Instrument [Line Items] | |
Schedule of maturity analysis under total convertible debentures | For the three months remaining 2022 $ — 2023 4,795,763 2024 234,230 Convertible debentures payable, related and non-related party 5,029,993 Less: Debt discount on convertible debentures payable (2,209,006) Total convertible debentures payable, related and non-related party, net $ 2,820,987 |
DEBT (Tables)
DEBT (Tables) - Non-revolving line of credit | 9 Months Ended |
Jun. 30, 2022 | |
Line of Credit Facility [Line Items] | |
Schedule of classifications of non-revolving line of credit | Non-Revolving Lines of Credit as of June 30, 2022: Unpaid Contractual Net Carrying Value Principal Interest Rates Contractual Warrants Related party non-revolving line of credit: Current Long Term Balance Cash Maturity Date issued $4,022,986 non-revolving line of credit, April 25, 2022 (1) $ — $ 2,203,064 $ 4,022,986 12% 10/25/2023 1,149,425 Total related party non-revolving line of credit, net $ — $ 2,203,064 $ 4,022,986 Non-revolving line of credit: $2,200,000 non-revolving line of credit, May 13, 2022 (2) $ — 1,316,246 2,200,000 12% 11/13/2023 628,575 Total non-revolving line of credit, net $ — $ 1,316,246 $ 2,200,000 Non-Revolving Lines of Credit as of September 30, 2021: Unpaid Contractual Net Carrying Value Principal Interest Rates Contractual Warrants Related party non-revolving line of credit: Current Long Term Balance Cash Maturity Date issued $4,022,986 non-revolving line of credit, April 25, 2022 (1) $ — $ — $ — — — — Total related party non-revolving line of credit, net $ — $ — $ — Non-revolving line of credit: $2,200,000 non-revolving line of credit, May 13, 2022 (2) $ — — — — — — Total non-revolving line of credit, net $ — $ — $ — (1) On February 23, 2022, we entered into a Non-Revolving Line of Credit Loan Agreement (the “Prior Loan Agreement”), with Excel Family Partners, LLLP (“Excel”), an entity managed by Bruce Cassidy, a member of the Company’s board of directors, for aggregate loans of up to $1.5 million, which was amended on April 13, 2022, to increase the aggregate amount to $2.0 million (the “$2m Loan”). On April 25, 2022, we entered into a Non-Revolving Line of Credit Loan Agreement (the “Loan Agreement”) with Excel for an aggregate principal amount of $4,022,986 (the “Loan”). The Loan matures eighteen On April 25, 2022, we used $2.022 million of the proceeds of the Loan to prepay all of the remaining outstanding principal and interest of the $2m Loan and the Prior Loan Agreement was terminated in connection with such prepayment. In connection with the Loan, on April 25, 2022, we issued a warrant for an aggregate of up to 1,149,425 shares of our common stock. The warrant has an exercise price of $1.75 per share, expires on April 25, 2025 and shall be exercisable at any time prior to the expiration date. Under the Loan Agreement, we granted to the lender a security interest in all of our present and future assets and properties, real or personal, tangible or intangible, wherever located, including products and proceeds thereof. (2) On May 13, 2022, we entered into a Non-Revolving Line of Credit Loan Agreement (the “RAT Loan Agreement”) with several institutions and individuals and RAT Investment Holdings, LP, as administrator of the loan (the “Loan Administrator”) for aggregate principal amount of $2.2 million (the “RAT Loan”). The RAT Loan matures eighteen In connection with the RAT Loan Agreement, on May 13, 2022, we issued a warrant (each a “Warrant” and collectively, the “Warrants”) to each lender under the RAT Loan Agreement for an aggregate of up to 628,575 shares of our common stock (the “Warrant Shares”). Each Warrant has an exercise price of $1.75 per share, expires on May 13, 2025, and shall be exercisable at any time prior to the expiration date |
Schedule of interest expenses of debt | Nine months ended June 30, 2022 2021 Interest expense $ 117,224 $ — Amortization of debt discounts 333,294 — Total $ 450,518 $ — |
Schedule of maturities of debt | For the three months remaining 2022 $ — 2023 — 2024 6,222,986 Non-revolving lines of credit payable, related and non-related party 6,222,986 Less: Debt discount on non-revolving lines of credit payable (2,703,676) Total non-revolving lines of credit payable, related and non-related party, net $ 3,519,310 |
STOCK OPTIONS AND WARRANTS (Tab
STOCK OPTIONS AND WARRANTS (Tables) | 9 Months Ended |
Jun. 30, 2022 | |
Share-based Payment Arrangement, Additional Disclosure [Abstract] | |
Schedule of stock option activity | The following table summarizes the stock option activity for the nine months ended June 30, 2022: Weighted Weighted Average Average Remaining Aggregate Options Exercise Price Contractual Term Intrinsic Value Outstanding at September 30, 2021 17,833,356 $ 1.04 8.30 $ 25,478,339 Grants 1,471,200 2.46 9.49 4,527,654 Exercised — — — — Expired — — — — Forfeited (338,251) (2.13) — — Outstanding at June 30, 2022 18,966,305 $ 1.13 7.68 $ 30,005,993 Exercisable at June 30, 2022 13,652,168 $ 0.99 7.32 $ 23,582,392 |
Schedule of related to stock options | The following table presents information related to stock options on June 30, 2022: Options outstanding Weighted Options average exercisable Exercise Number of remaining life number of price options in years options $ 0.86 1,148,371 4.17 1,148,371 0.66 4,663,935 6.34 4,663,935 0.89 2,500,000 7.96 2,008,000 1.10 7,882,799 8.37 4,607,142 0.57 300,000 8.67 300,000 2.84 250,000 8.83 250,000 2.75 600,000 8.85 216,667 2.35 125,000 9.22 15,278 2.40 50,000 9.08 — 2.50 50,000 9.09 50,000 2.30 836,200 9.27 392,775 2.75 425,000 9.82 — 2.58 135,000 9.88 — 18,966,305 13,652,168 |
Schedule of fair value of options | We calculated the fair value of options issued using the Black-Scholes option pricing model, with the following assumptions: June 30, 2022 Weighted average fair value of options granted $ 1.13 Expected life 5.00 -10.00 years Risk-free interest rate 0.01 - 2.93 % Expected volatility 55.80 - 73.00 % Expected dividends yield — % Forfeiture rate — % |
Schedule of warrants outstanding and related prices | The following table summarizes the changes in warrants outstanding and the related prices for the shares of our common stock: Warrants outstanding Warrants exercisable Weighted Weighted average average remaining Weighted remaining contractual average contractual Number life exercise Number life Exercise prices outstanding (years) price exercisable (years) $ 0.86 3,850,709 4.87 0.86 3,850,709 4.87 0.38 2,000,000 4.44 0.38 2,000,000 4.44 0.75 2,666,667 7.70 0.75 2,666,667 7.70 2.75 323,864 0.42 2.75 323,864 0.42 2.80 50,000 8.82 2.80 50,000 8.82 2.75 6,573,460 2.25 2.75 6,573,460 2.25 2.35 187,324 4.71 2.35 62,733 4.71 1.75 1,149,425 2.82 1.75 1,149,425 2.82 1.75 628,575 2.87 1.75 628,575 2.87 3.00 200,000 2.88 3.00 110,000 2.88 2.65 300,000 2.96 2.65 — 2.96 |
Schedule of warrant activity | The following table summarizes the warrant activity for the nine months ended June 30, 2022: Weighted average exercise Number of price per shares share Outstanding at September 30, 2021 15,464,700 $ 1.63 Issued 2,465,324 2.01 Exercised — — Expired — — Outstanding at June 30, 2022 17,930,024 $ 1.68 |
Schedule of fair value of warrants issued | June 30, 2022 Weighted average fair value of warrants granted $ 0.74 Expected life 1.75 - 10 years Risk-free interest rate 0.15 - 3.35 % Expected volatility 57.30 - 73.00 % Expected dividends yield — % Forfeiture rate — % |
BUSINESS (Details Narrative)
BUSINESS (Details Narrative) | 9 Months Ended | ||
Jun. 30, 2022 USD ($) item | Jun. 30, 2021 USD ($) | Sep. 30, 2021 USD ($) | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Quarterly active units | item | 12,584 | ||
Number of initial partner's screens launched | item | 5,000 | ||
Remaining number of screens rolled-out | item | 12,000 | ||
Cash | $ | $ 709,725 | $ 4,162,548 | |
Accumulated deficit | $ | (81,763,526) | $ (66,842,416) | |
Net cash used in operating activities | $ | $ (8,832,956) | $ (7,040,035) |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) | 9 Months Ended | ||
Jun. 30, 2022 USD ($) customer | Jun. 30, 2021 USD ($) | Sep. 30, 2021 USD ($) | |
Number of reportable segments | 1 | ||
Number of operating segments | 1 | ||
Cash Equivalents, at Carrying Value | $ 0 | $ 0 | |
FDIC insurance Limit | 459,725 | 3,655,716 | |
Allowance for doubtful accounts | 445,946 | $ 426,813 | |
Threshold amount for capitalization of Property and equipment | 3,000,000 | ||
Payments to Acquire Businesses, Net of Cash Acquired | $ 750,000 | ||
Advertising costs | 4,232,734 | 776,086 | |
Amortization of Intangible Assets | $ 933,036 | $ 783,567 | |
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | |||
Number of Major Customers | customer | 3 | ||
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Customer One [Member] | |||
Concentration risk, percentage | 25% | ||
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Customer Two [Member] | |||
Concentration risk, percentage | 20% | ||
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Customer Three [Member] | |||
Concentration risk, percentage | 11% | ||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer One [Member] | |||
Concentration risk, percentage | 52% | ||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer Two [Member] | |||
Concentration risk, percentage | 24% | ||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer Three [Member] | |||
Concentration risk, percentage | 18% | ||
Maximum | Revenue Benchmark [Member] | Customer Concentration Risk [Member] | |||
Concentration risk, percentage | 10% | ||
Maximum | Accounts Receivable [Member] | Customer Concentration Risk [Member] | |||
Number of Major Customers | 3 | ||
Concentration risk, percentage | 10% | ||
Equipment | Minimum | |||
Property and equipment, estimated useful lives | 3 years | ||
Equipment | Maximum | |||
Property and equipment, estimated useful lives | 5 years | ||
Software | |||
Property and equipment, estimated useful lives | 3 years |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Fair Value Measurement - Fair Value Measurements (Details) - Recurring - USD ($) | Jun. 30, 2022 | Sep. 30, 2021 |
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Derivative liabilities | $ 893,925 | $ 1,058,633 |
Financial Liabilities Fair Value Disclosure, Total | 893,925 | 1,058,633 |
Significant Unobservable Inputs (Level 3) | ||
Financial Liabilities Fair Value Disclosure [Abstract] | ||
Derivative liabilities | 893,925 | 1,058,633 |
Financial Liabilities Fair Value Disclosure, Total | $ 893,925 | $ 1,058,633 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Fair Value Measurement - Changes in Fair Value Measurements (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Jun. 30, 2022 USD ($) | Jun. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability Value, Beginning Balance | $ 912,320 | $ 1,058,633 | |
Change in fair value | (18,395) | $ (164,708) | |
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability Value, Ending Balance | $ 893,925 | $ 893,925 | $ 1,058,633 |
Minimum | Derivative | Expected term | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Derivative Liability, Expected Term | 5 months 1 day | ||
Minimum | Derivative | Discount rate | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Derivative Liability, Measurement Input | 7.12 | 7.12 | |
Minimum | Derivative | Volatility | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Derivative Liability, Measurement Input | 75 | 75 | |
Maximum | Derivative | Expected term | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Derivative Liability, Expected Term | 2 years | ||
Maximum | Derivative | Discount rate | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Derivative Liability, Measurement Input | 15 | 15 | |
Maximum | Derivative | Volatility | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Derivative Liability, Measurement Input | 110 | 110 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) - shares | 9 Months Ended | 12 Months Ended |
Jun. 30, 2022 | Sep. 30, 2021 | |
Total common stock equivalents | 41,838,822 | 59,113,379 |
Options to purchase common stock | ||
Total common stock equivalents | 18,966,306 | 17,833,356 |
Warrants to purchase common stock | ||
Total common stock equivalents | 17,930,025 | 15,464,700 |
Convertible debentures | ||
Total common stock equivalents | 4,942,491 | 5,815,323 |
Preferred Stock Class B | ||
Total common stock equivalents | 20,000,000 |
INVENTORY (Details)
INVENTORY (Details) - USD ($) | Jun. 30, 2022 | Sep. 30, 2021 |
Total inventory | $ 12,554 | $ 223,048 |
Computers | ||
Total inventory | 7,830 | 6,881 |
Hasp keys | ||
Total inventory | $ 4,724 | 3,581 |
Loop player | ||
Total inventory | $ 212,586 |
LICENSE CONTENT ASSETS (Details
LICENSE CONTENT ASSETS (Details Narrative) - USD ($) | 9 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Sep. 30, 2021 | |
Term of license content asset | 2 years | ||
License content asset - current | $ 420,789 | $ 850,263 | |
License content asset - non current | 36,797 | 365,360 | |
License content liability | 50,250 | ||
License content liability - current | 50,250 | $ 985,000 | |
License content liability - non current | 0 | ||
Payments for license content liabilities | 853,500 | ||
Amortization expense | 933,036 | $ 783,567 | |
Finite-Lived Intangible Asset, Expected Amortization, Remainder of Fiscal Year | 56,222 | ||
Payable in 2022 | 19,000 | ||
Payable in 2023 | $ 31,250 | ||
License content asset | |||
Useful life | 2 years | ||
Amortization expense, 2022 | $ 436,346 | ||
Amortization expense, 2023 | $ 21,240 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS (Details) - USD ($) | 9 Months Ended | |
Jun. 30, 2022 | Sep. 30, 2021 | |
Total intangible assets, gross | $ 1,210,000 | $ 1,210,000 |
Less: accumulated amortization | (591,556) | (507,222) |
Total intangible accumulated amortization | (591,556) | (507,222) |
Total intangible assets, net | $ 618,444 | 702,778 |
Useful life | 5 years 6 months | |
Customer relationships | ||
Total intangible assets, gross | $ 1,012,000 | 1,012,000 |
Useful life | 9 years | |
Content library | ||
Total intangible assets, gross | $ 198,000 | $ 198,000 |
Useful life | 2 years |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS (Details narrative) - USD ($) | 9 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Goodwill balance | $ 1,970,321 | $ 1,970,321 | |
Useful life | 5 years 6 months | ||
Amortization expense | $ 84,333 | $ 727,715 | |
Finite-Lived Intangible Asset, Expected Amortization, Remainder of Fiscal Year | 56,222 | ||
Finite-Lived Intangible Assets, Amortization Expense, Next Rolling Twelve Months | 112,444 | ||
Finite-Lived Intangible Assets, Amortization Expense, Rolling Year Two | 112,444 | ||
Finite-Lived Intangible Assets, Amortization Expense, Rolling Year Three | 112,444 | ||
Finite-Lived Intangible Assets, Amortization Expense, Rolling Year Four | 112,444 | ||
Finite-Lived Intangible Assets, Amortization Expense, Rolling after Year Four | $ 112,444 |
LEASES (Details)
LEASES (Details) - USD ($) | Jun. 30, 2022 | Sep. 30, 2021 |
Leases [Abstract] | ||
Short term portion | $ 119,178 | $ 167,101 |
Long term portion | 75,530 | |
Total lease liability | $ 119,178 | $ 242,631 |
LEASES (Details 1)
LEASES (Details 1) - USD ($) | Jun. 30, 2022 | Sep. 30, 2021 |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | ||
2022 | $ 46,414 | |
2023 | 84,175 | |
Total undiscounted cash flows | 130,589 | |
Less: 10% Present value discount | (11,411) | |
Lease liability | $ 119,178 | $ 242,631 |
LEASES (Details 2)
LEASES (Details 2) - USD ($) | 9 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Leases. | ||
Operating lease expense | $ 133,332 | $ 137,530 |
Short-term lease expense | 6,600 | 7,000 |
Total lease expense | $ 139,932 | $ 144,530 |
LEASES (Details 3)
LEASES (Details 3) | Jun. 30, 2022 |
Lease Detail 3 [Abstract] | |
Weighted-average remaining lease term | 8 months 23 days |
Weighted-average discount rate | 10% |
LEASES (Details Narrative)
LEASES (Details Narrative) - USD ($) | 9 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Lease Detail Narrative [Abstract] | ||
Cash payments against lease liabilities | $ 138,066 | $ 134,207 |
Accretion on lease liability | $ 14,613 | $ 26,084 |
ACCOUNTS PAYABLE AND ACCRUED _3
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($) | Jun. 30, 2022 | Sep. 30, 2021 |
Accounts Payable And Accrued Expenses. | ||
Accounts payable | $ 3,739,527 | $ 1,147,585 |
Interest payable | 190,515 | 106,631 |
Payroll liabilities | 20,250 | 20,250 |
Other accrued liabilities | 5,496,862 | 307,977 |
Accrued liabilities | 5,707,627 | 434,858 |
Accrued royalties | 3,316,708 | 633,463 |
Total accounts payable and accrued expenses | $ 12,763,862 | $ 2,215,906 |
CONVERTIBLE DEBENTURES PAYABL_2
CONVERTIBLE DEBENTURES PAYABLE (Details 1) - USD ($) | 9 Months Ended | 12 Months Ended | ||
Jun. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 01, 2020 | |
Current - related parties | $ 2,075,692 | $ 530,226 | ||
Net Carrying Value Long Term - related party | 2,458,194 | |||
Unpaid Principal Balance - related parties | 2,350,000 | 5,065,582 | ||
Current - nonrelated parties | 602,581 | |||
Net Carrying Value Long Term - nonrelated party | 142,714 | 404,319 | ||
Convertible debt, less current portion, net | 142,714 | 404,319 | ||
Unpaid Principal Balance - nonrelated parties | 2,679,993 | 600,000 | ||
Warrants issued | 254,013 | |||
$3,000,000 Convertible Debenture Amended October 23, 2020 | ||||
Convertible debenture | $ 3,000,000 | 3,000,000 | ||
Current - related parties | 530,226 | |||
Net Carrying Value Long Term - related party | 876,256 | |||
Unpaid Principal Balance - related parties | $ 2,715,582 | |||
Percentage of cash interest | 10% | |||
Interest rate | 10% | |||
Maturity date | Dec. 01, 2023 | |||
Warrants issued | $ 3,550,709 | |||
$750,000 convertible debenture, December 1, 2020 | ||||
Convertible debenture | $ 750,000 | 750,000 | ||
Current - related parties | 673,753 | |||
Net Carrying Value Long Term - related party | 536,508 | |||
Unpaid Principal Balance - related parties | $ 750,000 | $ 750,000 | ||
Percentage of cash interest | 4% | 4% | ||
Interest rate | 6% | 6% | ||
Maturity date | Dec. 01, 2022 | Dec. 01, 2022 | ||
Warrants issued | $ 68,182 | $ 68,182 | ||
$800,000 convertible debenture, April 1, 2021 | ||||
Convertible debenture | 800,000 | 800,000 | ||
Current - related parties | 705,041 | |||
Net Carrying Value Long Term - related party | 534,114 | |||
Unpaid Principal Balance - related parties | $ 800,000 | $ 800,000 | ||
Percentage of cash interest | 4% | 4% | ||
Interest rate | 6% | 6% | ||
Maturity date | Dec. 01, 2022 | Dec. 01, 2022 | ||
Warrants issued | $ 72,727 | $ 72,727 | ||
$400,000 convertible debenture, May 1, 2021 | ||||
Convertible debenture | 400,000 | 400,000 | ||
Current - related parties | 349,730 | |||
Net Carrying Value Long Term - related party | 259,246 | |||
Unpaid Principal Balance - related parties | $ 400,000 | $ 400,000 | ||
Percentage of cash interest | 4% | 4% | ||
Interest rate | 6% | 6% | ||
Maturity date | Dec. 01, 2022 | Dec. 01, 2022 | ||
Warrants issued | $ 36,364 | $ 36,364 | ||
$400,000 convertible debenture, June 2, 2021 | ||||
Convertible debenture | 400,000 | 400,000 | ||
Current - related parties | 347,168 | |||
Net Carrying Value Long Term - related party | 252,070 | |||
Unpaid Principal Balance - related parties | $ 400,000 | $ 400,000 | ||
Percentage of cash interest | 4% | 4% | ||
Interest rate | 6% | 6% | ||
Maturity date | Dec. 01, 2022 | Dec. 01, 2022 | ||
Warrants issued | $ 36,364 | $ 36,364 | ||
$350,000 convertible debenture, January 12, 2021 | ||||
Convertible debenture | 350,000 | 350,000 | ||
Current - nonrelated parties | 311,993 | |||
Net Carrying Value Long Term - nonrelated party | 243,578 | |||
Unpaid Principal Balance - nonrelated parties | $ 350,000 | $ 350,000 | ||
Percentage of cash interest | 4% | 4% | ||
Interest rate | 6% | 6% | ||
Maturity date | Dec. 01, 2022 | Dec. 01, 2022 | ||
Warrants issued | $ 87,500 | $ 87,500 | ||
$250,000 convertible debenture, May 21, 2021 | ||||
Convertible debenture | 250,000 | 250,000 | ||
Current - nonrelated parties | 218,122 | |||
Net Carrying Value Long Term - nonrelated party | 160,741 | |||
Unpaid Principal Balance - nonrelated parties | $ 250,000 | $ 250,000 | ||
Percentage of cash interest | 4% | 4% | ||
Interest rate | 6% | 6% | ||
Maturity date | Dec. 01, 2022 | Dec. 01, 2022 | ||
Warrants issued | $ 22,727 | $ 22,727 | ||
$2,079,993 convertible debenture, May 9, 2022 | ||||
Convertible debenture | 2,079,993 | |||
Current - related parties | 72,466 | |||
Net Carrying Value Long Term - related party | 142,714 | |||
Unpaid Principal Balance - related parties | $ 2,079,993 | |||
Percentage of cash interest | 10% | |||
Maturity date | Dec. 01, 2023 | |||
Convertible debentures due on due December 1, 2022 | ||||
Percentage of cash interest | 4% | |||
Secured convertible debenture | ||||
Interest rate | 11% | |||
Debentures subject to mandatory redemption | $750,000 convertible debenture, December 1, 2020 | ||||
Convertible debenture | $ 750,000 | |||
Debentures subject to mandatory redemption | $800,000 convertible debenture, April 1, 2021 | ||||
Convertible debenture | 800,000 | |||
Debentures subject to mandatory redemption | $400,000 convertible debenture, May 1, 2021 | ||||
Convertible debenture | 400,000 | |||
Debentures subject to mandatory redemption | $287,000 convertible debenture amended October 22, 2020 | ||||
Convertible debenture | 287,000 | |||
Debentures subject to mandatory redemption | $350,000 convertible debenture, January 12, 2021 | ||||
Convertible debenture | 350,000 | |||
Debentures subject to mandatory redemption | $250,000 convertible debenture, May 21, 2021 | ||||
Convertible debenture | $ 250,000 |
CONVERTIBLE DEBENTURES PAYABL_3
CONVERTIBLE DEBENTURES PAYABLE (Details 2) - USD ($) | 9 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Debt Instrument [Line Items] | ||
Amortization of debt discounts | $ 1,532,792 | $ 954,080 |
Convertible debentures. | ||
Debt Instrument [Line Items] | ||
Interest expense | 385,086 | 488,248 |
Amortization of debt discounts | 1,199,498 | 954,081 |
Total | $ 1,584,584 | $ 1,442,329 |
CONVERTIBLE DEBENTURES PAYABL_4
CONVERTIBLE DEBENTURES PAYABLE (Details 3) | Jun. 30, 2022 USD ($) |
Debt Disclosure [Abstract] | |
2023 | $ 4,795,763 |
2024 | 234,230 |
Convertible debentures payable, related and non related party | 5,029,993 |
Less: Debt discount on convertible debentures payable | (2,209,006) |
Total convertible debentures payable, related and non related party, net | $ 2,820,987 |
CONVERTIBLE DEBENTURES PAYABL_5
CONVERTIBLE DEBENTURES PAYABLE (Details Narrative) - USD ($) | 9 Months Ended | |||||||
Jul. 02, 2021 | Jan. 08, 2021 | Dec. 01, 2020 | Jun. 30, 2022 | Jun. 30, 2021 | May 09, 2022 | Sep. 30, 2021 | Dec. 31, 2020 | |
Number of warrants issued | 687,324 | |||||||
Exercise price of warrants | $ 1.68 | $ 1.63 | ||||||
Debentures balance | $ 2,679,993 | $ 600,000 | ||||||
Number of shares issued | 3,228,000 | |||||||
Gain on extinguishment of debt, net | $ 490,051 | $ 579,486 | ||||||
Non-revolving line of credit | ||||||||
Number of warrants issued | 1,778,000 | |||||||
Secured loan amount | $ 4,105,492 | 0 | ||||||
$3,000,000 Convertible Debenture Amended October 23, 2020 | ||||||||
Convertible debenture | $ 3,000,000 | $ 3,000,000 | ||||||
Debt Instrument, Convertible, Conversion Price | $ 0.60 | |||||||
Interest rate | 10% | |||||||
Description of monthly installments | monthly payments of unpaid interest accrued at 12.5% per annum will be paid in arrears through March 31, 2021, beginning April 1, 2021, we began paying equal monthly installments of principal and interest at 10% per annum through December 1, 2023 | |||||||
Number of warrants issued | 3,550,709 | |||||||
Exercise price of warrants | $ 0.86 | |||||||
Expected life in years | 10 years | |||||||
Beneficial conversion feature recorded as debt discount | $ 612,313 | |||||||
Allocated fair value of warrants as additional debt discount | 2,387,687 | |||||||
Percentage of cash interest | 10% | |||||||
$750,000 convertible debenture, December 1, 2020 | ||||||||
Convertible debenture | $ 750,000 | $ 750,000 | ||||||
Interest rate | 6% | 6% | ||||||
Beneficial conversion feature recorded as debt discount | $ 339,216 | |||||||
Allocated fair value of warrants as additional debt discount | $ 26,770 | |||||||
Percentage of cash interest | 4% | 4% | ||||||
$750,000 convertible debenture, December 1, 2020 | Private placement | ||||||||
Convertible debenture and warranty purchase agreement amount | $ 3,000,000 | |||||||
$800,000 convertible debenture, April 1, 2021 | ||||||||
Convertible debenture | $ 800,000 | $ 800,000 | ||||||
Interest rate | 6% | 6% | ||||||
Beneficial conversion feature recorded as debt discount | $ 319,431 | |||||||
Allocated fair value of warrants as additional debt discount | $ 60,406 | |||||||
Percentage of cash interest | 4% | 4% | ||||||
$400,000 convertible debenture, May 1, 2021 | ||||||||
Convertible debenture | $ 400,000 | $ 400,000 | ||||||
Interest rate | 6% | 6% | ||||||
Beneficial conversion feature recorded as debt discount | $ 159,715 | |||||||
Allocated fair value of warrants as additional debt discount | $ 31,309 | |||||||
Percentage of cash interest | 4% | 4% | ||||||
$400,000 convertible debenture, June 2, 2021 | ||||||||
Convertible debenture | $ 400,000 | $ 400,000 | ||||||
Interest rate | 6% | 6% | ||||||
Percentage of cash interest | 4% | 4% | ||||||
$400,000 convertible debenture, June 2, 2020 | ||||||||
Beneficial conversion feature recorded as debt discount | $ 159,715 | |||||||
Allocated fair value of warrants as additional debt discount | $ 30,481 | |||||||
$287,000 convertible debenture amended October 22, 2020 | ||||||||
Debt Instrument, Convertible, Conversion Price | $ 0.60 | |||||||
Exercise price of warrants | $ 0.60 | |||||||
Principal payments | $ 29,939 | |||||||
Beneficial conversion feature recorded as debt discount | $ 30,996 | |||||||
Number of shares issued | 5,000,000 | |||||||
Amount of monthly payments | $ 7,939 | |||||||
Gain on extinguishment of debt, net | $ 15,006 | |||||||
$287,000 convertible debenture amended October 22, 2020 | Common class B | Redemption Agreement [Member] | Former Officers [Member] | ||||||||
Interest rate | 10% | |||||||
$287,000 convertible debenture converted July 1, 2021 | ||||||||
Debentures balance | 216,105 | |||||||
Accrued interest | $ 1,800 | |||||||
Number of shares issued | 363,176 | |||||||
$350,000 convertible debenture, January 12, 2021 | ||||||||
Convertible debenture | $ 350,000 | $ 350,000 | ||||||
Interest rate | 6% | 6% | ||||||
Beneficial conversion feature recorded as debt discount | $ 139,751 | |||||||
Allocated fair value of warrants as additional debt discount | $ 31,282 | |||||||
Percentage of cash interest | 4% | 4% | ||||||
Debentures balance | $ 350,000 | $ 350,000 | ||||||
$250,000 convertible debenture, May 21, 2021 | ||||||||
Convertible debenture | $ 250,000 | $ 250,000 | ||||||
Interest rate | 6% | 6% | ||||||
Beneficial conversion feature recorded as debt discount | $ 99,822 | |||||||
Allocated fair value of warrants as additional debt discount | $ 14,940 | |||||||
Percentage of cash interest | 4% | 4% | ||||||
Debentures balance | $ 250,000 | $ 250,000 | ||||||
Old unsecured convertible debentures | ||||||||
Secured loan amount | $ 2,068,399 | |||||||
New unsecured convertible debentures due on December 1 2023 | ||||||||
Debt Instrument, Convertible, Conversion Price | $ 0.60 | |||||||
Secured loan amount | $ 2,079,993 | |||||||
Interest rate | 10% | |||||||
Convertible debentures due on due December 1, 2022 | ||||||||
Percentage of cash interest | 4% | |||||||
Percentage of payment in kind interest | 6% | |||||||
Secured convertible debenture | ||||||||
Interest rate | 11% | |||||||
Accrued interest | $ 50,213 | $ 326,143 | ||||||
Number of shares issued | 1,003,618 | |||||||
Senior secured promissory debentures | ||||||||
Number of warrants issued | 213,637 | |||||||
Senior secured promissory debentures | Private placement | ||||||||
Minimum subscription amount | $ 250,000 | |||||||
Aggregate exercise price | $ 750,000 | |||||||
Warrants Exercisable Shares | 272,727 | |||||||
Debentures subject to mandatory redemption | $750,000 convertible debenture, December 1, 2020 | ||||||||
Convertible debenture | $ 750,000 | |||||||
Debentures subject to mandatory redemption | $800,000 convertible debenture, April 1, 2021 | ||||||||
Convertible debenture | 800,000 | |||||||
Debentures subject to mandatory redemption | $400,000 convertible debenture, May 1, 2021 | ||||||||
Convertible debenture | 400,000 | |||||||
Debentures subject to mandatory redemption | $400,000 convertible debenture, June 2, 2020 | ||||||||
Convertible debenture | 400,000 | |||||||
Debentures subject to mandatory redemption | $287,000 convertible debenture amended October 22, 2020 | ||||||||
Convertible debenture | 287,000 | |||||||
Debentures subject to mandatory redemption | $350,000 convertible debenture, January 12, 2021 | ||||||||
Convertible debenture | 350,000 | |||||||
Debentures subject to mandatory redemption | $250,000 convertible debenture, May 21, 2021 | ||||||||
Convertible debenture | $ 250,000 |
DEBT - Classification (Details)
DEBT - Classification (Details) - USD ($) | 9 Months Ended | |||||
May 13, 2022 | Apr. 25, 2022 | Jun. 30, 2022 | Apr. 13, 2022 | Feb. 23, 2022 | Sep. 30, 2021 | |
Line of Credit Facility [Line Items] | ||||||
Related party non-revolving line of credit, net, long-term | $ 2,203,064 | |||||
Non-revolving line of credit | 1,316,246 | |||||
Unpaid principal balance | 4,022,986 | |||||
Warrants issued for severance | $ 254,013 | |||||
Exercise price of warrants | $ 1.68 | $ 1.63 | ||||
Non-revolving line of credit | ||||||
Line of Credit Facility [Line Items] | ||||||
Unpaid principal balance | $ 2,200,000 | |||||
Secured loan amount | 4,105,492 | $ 0 | ||||
Non-revolving line of credit | Excel Family Partners, LLLP | ||||||
Line of Credit Facility [Line Items] | ||||||
Interest rate | 12% | |||||
Secured loan amount | $ 4,022,986 | $ 2,000,000 | $ 1,500,000 | |||
Loan term | 18 months | |||||
Proceeds from loans | $ 2,022,000 | |||||
Number of aggregate warrants | 1,149,425 | |||||
Exercise price of warrants | $ 1.75 | |||||
Non-revolving lines of credit, amended on April 25, 2022 | ||||||
Line of Credit Facility [Line Items] | ||||||
Related party non-revolving line of credit, net, long-term | 2,203,064 | |||||
Unpaid principal balance | $ 4,022,986 | |||||
Interest rate | 12% | 12% | ||||
Maturity date | Oct. 25, 2023 | |||||
Warrants issued for severance | $ 1,149,425 | |||||
Secured loan amount | 4,022,986 | 4,022,986 | ||||
Non-revolving lines of credit, amended on April 25, 2022 | Excel Family Partners, LLLP | ||||||
Line of Credit Facility [Line Items] | ||||||
Secured loan amount | $ 4,022,986 | |||||
Loan term | 18 months | |||||
Number of aggregate warrants | 1,149,425 | |||||
Exercise price of warrants | $ 1.75 | |||||
Non-revolving lines of credit, May 13, 2022 | ||||||
Line of Credit Facility [Line Items] | ||||||
Non-revolving line of credit | 1,316,246 | |||||
Unpaid principal balance | $ 2,200,000 | |||||
Interest rate | 12% | |||||
Maturity date | Nov. 13, 2023 | |||||
Warrants issued for severance | $ 628,575 | |||||
Secured loan amount | $ 2,200,000 | $ 2,200,000 | ||||
Non-revolving lines of credit, May 13, 2022 | RAT Investment Holdings, LP | ||||||
Line of Credit Facility [Line Items] | ||||||
Interest rate | 12% | |||||
Secured loan amount | $ 2,200,000 | |||||
Loan term | 18 months | |||||
Number of aggregate warrants | 628,575 | |||||
Exercise price of warrants | $ 1.75 |
DEBT - Interest expenses and am
DEBT - Interest expenses and amortization of debt discount (Details) - USD ($) | 9 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Line of Credit Facility [Line Items] | ||
Amortization of debt discounts | $ 1,532,792 | $ 954,080 |
Non-revolving line of credit | ||
Line of Credit Facility [Line Items] | ||
Interest expense | 117,224 | |
Amortization of debt discounts | 333,294 | |
Total | $ 450,518 |
DEBT - Maturities (Details)
DEBT - Maturities (Details) - Non-revolving line of credit | Jun. 30, 2022 USD ($) |
Line of Credit Facility [Line Items] | |
2024 | $ 6,222,986 |
Debt, related and non related party | 6,222,986 |
Less: Debt discount | (2,703,676) |
Total debt, related and non related party, net | $ 3,519,310 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) | 9 Months Ended |
Jun. 30, 2022 USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Loss contingencies | $ 0 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 9 Months Ended | 12 Months Ended | |||||
Apr. 25, 2022 | Jun. 30, 2022 | Jun. 30, 2021 | Sep. 30, 2021 | May 09, 2022 | Apr. 13, 2022 | Feb. 23, 2022 | |
Exercise price (in dollars per share) | $ 1.68 | $ 1.63 | |||||
Old unsecured convertible debentures | |||||||
Secured loan amount | $ 2,068,399 | ||||||
New unsecured convertible debentures due on December 1 2023 | |||||||
Secured loan amount | $ 2,079,993 | ||||||
Interest rate | 10% | ||||||
Debt Instrument, Convertible, Conversion Price | $ 0.60 | ||||||
Non-revolving line of credit | |||||||
Related party interest expense | $ 331,548 | $ 0 | |||||
Secured loan amount | 4,105,492 | $ 0 | |||||
Excel Family Partners, LLLP | Non-revolving line of credit | |||||||
Secured loan amount | $ 4,022,986 | $ 2,000,000 | $ 1,500,000 | ||||
Interest rate | 12% | ||||||
Loan term | 18 months | ||||||
Proceeds from loans | $ 2,022,000 | ||||||
Number of aggregate warrants | 1,149,425 | ||||||
Exercise price (in dollars per share) | $ 1.75 | ||||||
Convertible debentures. | |||||||
Related party amounts of transaction | 2,480,350 | $ 2,448,871 | |||||
Related party interest expense | $ 666,515 | $ 267,416 |
STOCKHOLDERS' EQUITY (DEFICIT)
STOCKHOLDERS' EQUITY (DEFICIT) (Details Narrative) | 3 Months Ended | 9 Months Ended | |||||
Jun. 30, 2022 USD ($) $ / shares shares | Mar. 31, 2022 USD ($) shares | Jun. 30, 2021 USD ($) shares | Dec. 31, 2020 USD ($) shares | Jun. 30, 2022 USD ($) $ / shares shares | Jun. 30, 2021 USD ($) shares | Sep. 30, 2021 $ / shares shares | |
Preferred stock, shares authorized | 16,666,667 | 16,666,667 | |||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | |||||
Common stock, shares authorized | 316,666,667 | 316,666,667 | 316,666,667 | ||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||
Common stock, shares issues | 153,539,596 | 127,316,746 | 153,539,596 | 127,316,746 | 127,316,716 | ||
Common stock, shares outstanding | 153,539,596 | 127,316,746 | 153,539,596 | 127,316,746 | 127,316,716 | ||
Number of shares issued | 3,228,000 | ||||||
Number of shares issued, value | $ | $ 900,000 | ||||||
Payment in kind interest stock issuance (in shares) | 88,500 | ||||||
Payment in kind interest stock issuance | $ | $ 88,500 | $ 41,979 | $ (177,000) | ||||
Number of shares issued in satisfaction | 497,429 | ||||||
Number of shares issued in satisfaction , value | $ | $ 485,144 | ||||||
Offering costs | $ | $ 80,134 | ||||||
Number of shares issued for the purchase of certain intangible assets | 1,369,863 | ||||||
Number of shares issued for the purchase of certain intangible assets, value | $ | $ 2,671,233 | ||||||
Shares issued for debt settlement (in shares) | 97,891 | ||||||
Shares issued for debt settlement | $ | 194,803 | $ 194,803 | |||||
Warrants issued for consultant services | $ | $ 254,014 | ||||||
Exercise price of warrants | $ / shares | $ 1.68 | $ 1.68 | $ 1.63 | ||||
Shares issued for license content asset | $ | $ 2,065,996 | ||||||
Number of shares issued for services | 79,051 | ||||||
Number of shares issued for services, value | $ | $ 200,000 | ||||||
Number of shares issued, value | $ | 4,034,935 | ||||||
Common Stock | |||||||
Conversion of series convertible stock to common stock (in shares) | 20,000,000 | 3,066,700 | |||||
Number of shares issued | 757,333 | ||||||
Number of shares issued, value | $ | $ 75 | ||||||
Payment in kind interest stock issuance (in shares) | 32,319 | 37,136 | 14,475 | 69,455 | |||
Payment in kind interest stock issuance | $ | $ 3 | $ 4 | $ 3 | $ 177,000 | |||
Shares issued for debt settlement (in shares) | 97,891 | ||||||
Shares issued for debt settlement | $ | $ 10 | ||||||
Shares issued for license content asset (in shares) | 1,180,880 | ||||||
Shares issued for license content asset | $ | $ 118 | ||||||
Value of loan conversion | $ | $ 376,356 | ||||||
Shares to be issued for loan conversion | 1,003,618 | ||||||
Conversion of shares | 20,000,000 | ||||||
License content asset | |||||||
Shares issued for license content asset (in shares) | 1,180,880 | ||||||
Shares issued for license content asset | $ | $ 2,065,996 | ||||||
EON Media Group | |||||||
Number of shares issued | 2,457,898 | ||||||
Number of shares issued, value | $ | $ 6,553,235 | ||||||
Ownership percentage | 100% | 100% | |||||
Board member | |||||||
Number of shares issued | 55,329 | ||||||
Number of shares issued, value | $ | $ 141,000 | ||||||
Preferred Stock Class A | |||||||
Preferred stock, shares authorized | 3,333,334 | 3,333,334 | |||||
Preferred stock, shares issues | 0 | 30,667 | 0 | 30,667 | |||
Preferred stock, shares outstanding | 0 | 30,667 | 0 | 30,667 | |||
Conversion of shares | 3,066,700 | ||||||
Preferred Stock Class B | |||||||
Preferred stock, shares authorized | 3,333,334 | 3,333,334 | 3,333,334 | ||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||
Preferred stock, shares issues | 0 | 200,000 | 0 | 200,000 | 200,000 | ||
Preferred stock, shares outstanding | 0 | 200,000 | 0 | 200,000 | 200,000 | ||
Preferred stock, liquidation preference (in dollars per share) | $ / shares | $ 1.50 | $ 1.50 | $ 1.50 | ||||
Preferred stock, number of votes per share | $ | 100 | 100 | |||||
Preferred stock, convertible, conversion ratio | 100 | 100 | |||||
Conversion of shares | 200,000 |
STOCK OPTIONS AND WARRANTS (Det
STOCK OPTIONS AND WARRANTS (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Jun. 30, 2022 | Sep. 30, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Outstanding at the beginning | 17,833,356 | |
Grants | 1,471,200 | |
Forfeited | (338,251) | |
Outstanding at the end | 18,966,305 | 17,833,356 |
Exercisable | 13,652,168 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | ||
Outstanding at the beginning | $ 1.04 | |
Grants | 2.46 | |
Forfeited | (2.13) | |
Outstanding at the end | 1.13 | $ 1.04 |
Exercisable | $ 0.99 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||
Weighted average remaining contractual term, outstanding | 7 years 8 months 4 days | 8 years 3 months 18 days |
Weighted average remaining contractual term, grants | 9 years 5 months 26 days | |
Exercisable | 7 years 3 months 25 days | |
Outstanding at the beginning | $ 25,478,339 | |
Grants | 4,527,654 | |
Outstanding at the end | 30,005,993 | $ 25,478,339 |
Exercisable at the end | $ 23,582,392 |
STOCK OPTIONS AND WARRANTS (D_2
STOCK OPTIONS AND WARRANTS (Details 1) - $ / shares | 9 Months Ended | 12 Months Ended |
Jun. 30, 2022 | Sep. 30, 2021 | |
Exercise price | $ 1.13 | $ 1.04 |
Number of options | 18,966,305 | 17,833,356 |
Weighted average remaining life in years remaining life in years | 7 years 8 months 4 days | 8 years 3 months 18 days |
Options exercisable number of options | 13,652,168 | |
Stock Options Exercise price 0.86 | ||
Exercise price | $ 0.86 | |
Number of options | 1,148,371 | |
Weighted average remaining life in years remaining life in years | 4 years 2 months 1 day | |
Options exercisable number of options | 1,148,371 | |
Stock Options Exercise price 0.66 | ||
Exercise price | $ 0.66 | |
Number of options | 4,663,935 | |
Weighted average remaining life in years remaining life in years | 6 years 4 months 2 days | |
Options exercisable number of options | 4,663,935 | |
Stock Options Exercise price 0.89 | ||
Exercise price | $ 0.89 | |
Number of options | 2,500,000 | |
Weighted average remaining life in years remaining life in years | 7 years 11 months 15 days | |
Options exercisable number of options | 2,008,000 | |
Stock Options Exercise price 1.10 | ||
Exercise price | $ 1.10 | |
Number of options | 7,882,799 | |
Weighted average remaining life in years remaining life in years | 8 years 4 months 13 days | |
Options exercisable number of options | 4,607,142 | |
Stock Options Exercise price 0.57 | ||
Exercise price | $ 0.57 | |
Number of options | 300,000 | |
Weighted average remaining life in years remaining life in years | 8 years 8 months 1 day | |
Options exercisable number of options | 300,000 | |
Stock Options Exercise price 2.84 | ||
Exercise price | $ 2.84 | |
Number of options | 250,000 | |
Weighted average remaining life in years remaining life in years | 8 years 9 months 29 days | |
Options exercisable number of options | 250,000 | |
Stock Options Exercise price 2.75 | ||
Exercise price | $ 2.75 | |
Number of options | 600,000 | |
Weighted average remaining life in years remaining life in years | 8 years 10 months 6 days | |
Options exercisable number of options | 216,667 | |
Stock Options Exercise price 2.35 | ||
Exercise price | $ 2.35 | |
Number of options | 125,000 | |
Weighted average remaining life in years remaining life in years | 9 years 2 months 19 days | |
Options exercisable number of options | 15,278 | |
Stock Options Exercise price 2.40 | ||
Exercise price | $ 2.40 | |
Number of options | 50,000 | |
Weighted average remaining life in years remaining life in years | 9 years 29 days | |
Stock Options Exercise price 2.50 | ||
Exercise price | $ 2.50 | |
Number of options | 50,000 | |
Weighted average remaining life in years remaining life in years | 9 years 1 month 2 days | |
Options exercisable number of options | 50,000 | |
Stock Options Exercise price 2.30 | ||
Exercise price | $ 2.30 | |
Number of options | 836,200 | |
Weighted average remaining life in years remaining life in years | 9 years 3 months 7 days | |
Options exercisable number of options | 392,775 | |
Stock Options Exercise price 2.75 | ||
Exercise price | $ 2.75 | |
Number of options | 425,000 | |
Weighted average remaining life in years remaining life in years | 9 years 9 months 25 days | |
Stock Options Exercise price 2.58 | ||
Exercise price | $ 2.58 | |
Number of options | 135,000 | |
Weighted average remaining life in years remaining life in years | 9 years 10 months 17 days |
STOCK OPTIONS AND WARRANTS (D_3
STOCK OPTIONS AND WARRANTS (Details 2) | 9 Months Ended |
Jun. 30, 2022 $ / shares | |
Weighted average fair value of options granted | $ 1.13 |
Expected dividends yield | 0% |
Forfeiture rate | 0% |
Maximum | |
Expected life | 10 years |
Risk-free interest rate | 2.93% |
Expected volatility | 73% |
Minimum | |
Expected life | 5 years |
Risk-free interest rate | 0.01% |
Expected volatility | 55.80% |
STOCK OPTIONS AND WARRANTS (D_4
STOCK OPTIONS AND WARRANTS (Details 3) - USD ($) | 9 Months Ended | |
Jun. 30, 2022 | Sep. 30, 2021 | |
Exercise price (in dollars per share) | $ 1.68 | $ 1.63 |
Number outstanding | $ 17,930,024 | $ 15,464,700 |
Warrant Exercise price 0.86 | ||
Exercise price (in dollars per share) | $ 0.86 | |
Number outstanding | $ 3,850,709 | |
Weighted average remaining contractual life (years) | 4 years 10 months 13 days | |
Weighted average exercise price | $ 0.86 | |
Number exercisable | 3,850,709 | |
Weighted average remaining contractual life (years) | 4 years 10 months 13 days | |
Warrant Exercise price 0.38 | ||
Exercise price (in dollars per share) | $ 0.38 | |
Number outstanding | $ 2,000,000 | |
Weighted average remaining contractual life (years) | 4 years 5 months 8 days | |
Weighted average exercise price | $ 0.38 | |
Number exercisable | 2,000,000 | |
Weighted average remaining contractual life (years) | 4 years 5 months 8 days | |
Warrant Exercise price 0.75 | ||
Exercise price (in dollars per share) | $ 0.75 | |
Number outstanding | $ 2,666,667 | |
Weighted average remaining contractual life (years) | 7 years 8 months 12 days | |
Weighted average exercise price | $ 0.75 | |
Number exercisable | 2,666,667 | |
Weighted average remaining contractual life (years) | 7 years 8 months 12 days | |
Warrant Exercise price 2.75 | ||
Exercise price (in dollars per share) | $ 2.75 | |
Number outstanding | $ 323,864 | |
Weighted average remaining contractual life (years) | 5 months 1 day | |
Weighted average exercise price | $ 2.75 | |
Number exercisable | 323,864 | |
Weighted average remaining contractual life (years) | 5 months 1 day | |
Warrant Exercise price 2.80 | ||
Exercise price (in dollars per share) | $ 2.80 | |
Number outstanding | $ 50,000 | |
Weighted average remaining contractual life (years) | 8 years 9 months 25 days | |
Weighted average exercise price | $ 2.80 | |
Number exercisable | 50,000 | |
Weighted average remaining contractual life (years) | 8 years 9 months 25 days | |
Warrant Exercise price 2.75 | ||
Exercise price (in dollars per share) | $ 2.75 | |
Number outstanding | $ 6,573,460 | |
Weighted average remaining contractual life (years) | 2 years 3 months | |
Weighted average exercise price | $ 2.75 | |
Number exercisable | 6,573,460 | |
Weighted average remaining contractual life (years) | 2 years 3 months | |
Warrant Exercise price 2.35 | ||
Exercise price (in dollars per share) | $ 2.35 | |
Number outstanding | $ 187,324 | |
Weighted average remaining contractual life (years) | 4 years 8 months 15 days | |
Weighted average exercise price | $ 2.35 | |
Number exercisable | 62,733 | |
Weighted average remaining contractual life (years) | 4 years 8 months 15 days | |
Warrant Exercise price 1.75 | ||
Exercise price (in dollars per share) | $ 1.75 | |
Number outstanding | $ 1,149,425 | |
Weighted average remaining contractual life (years) | 2 years 9 months 25 days | |
Weighted average exercise price | $ 1.75 | |
Number exercisable | 1,149,425 | |
Weighted average remaining contractual life (years) | 2 years 9 months 25 days | |
Warrant Exercise price 1.75 | ||
Exercise price (in dollars per share) | $ 1.75 | |
Number outstanding | $ 628,575 | |
Weighted average remaining contractual life (years) | 2 years 10 months 13 days | |
Weighted average exercise price | $ 1.75 | |
Number exercisable | 628,575 | |
Weighted average remaining contractual life (years) | 2 years 10 months 13 days | |
Warrant Exercise price 3.00 | ||
Exercise price (in dollars per share) | $ 3 | |
Number outstanding | $ 200,000 | |
Weighted average remaining contractual life (years) | 2 years 10 months 17 days | |
Weighted average exercise price | $ 3 | |
Number exercisable | 110,000 | |
Weighted average remaining contractual life (years) | 2 years 10 months 17 days | |
Warrant Exercise price 2.65 | ||
Exercise price (in dollars per share) | $ 2.65 | |
Number outstanding | $ 300,000 | |
Weighted average remaining contractual life (years) | 2 years 11 months 15 days | |
Weighted average exercise price | $ 2.65 | |
Weighted average remaining contractual life (years) | 2 years 11 months 15 days |
STOCK OPTIONS AND WARRANTS (D_5
STOCK OPTIONS AND WARRANTS (Details 4) | 9 Months Ended |
Jun. 30, 2022 USD ($) $ / shares shares | |
Number of shares | |
Outstanding at beginning | $ | $ 15,464,700 |
Issued | shares | 2,465,324 |
Outstanding at ending | $ | $ 17,930,024 |
Weighted average exercise price per share | |
Outstanding at beginning | $ 1.63 |
Issued | 2.01 |
Outstanding at ending | $ 1.68 |
STOCK OPTIONS AND WARRANTS (D_6
STOCK OPTIONS AND WARRANTS (Details 5) | Jun. 30, 2022 $ / shares |
Weighted average fair value of warrants granted | $ 0.74 |
Minimum | |
Warrant term | 1 year 9 months |
Minimum | Risk-free interest rate | |
Warrants outstanding, measurement input | 0.15 |
Minimum | Expected volatility | |
Warrants outstanding, measurement input | 57.30 |
Maximum | |
Warrant term | 10 years |
Maximum | Risk-free interest rate | |
Warrants outstanding, measurement input | 3.35 |
Maximum | Expected volatility | |
Warrants outstanding, measurement input | 73 |
STOCK OPTIONS AND WARRANTS (D_7
STOCK OPTIONS AND WARRANTS (Details Narrative) - USD ($) | 9 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Stock-based compensation expense | $ 3,948,272 | $ 7,036,800 |
Number of warrants issued | 687,324 | |
Warrants issued for severance | $ 254,013 | |
Senior secured promissory debentures | ||
Number of warrants issued | 213,637 | |
Number of warrants issued to related party | 213,637 | |
Value of warrants issued | $ 2,350,000 | |
Additional debt discount | $ 175,859 | |
Options | ||
Number of options issued | 1,471,200 | |
Stock price (in dollars per share) | $ 2.71 | $ 2.60 |
Price per option (in dollars per share) | $ 2.46 | |
Amount of total compensation cost related to nonvested awards not yet recognized | $ 9,525,576 | |
Weighted average period over which expense is expected to be recognized | 24 months 15 days |
INCOME TAX (Details Narrative)
INCOME TAX (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Income Tax Disclosure [Abstract] | ||||
Income tax (expense)/benefit | $ 0 | $ 0 | $ (1,051) | $ (99,830) |
U.S. federal statutory rate | 21% | 21% | 21% | 21% |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | 9 Months Ended | |||||
Jul. 29, 2022 | Apr. 25, 2022 | Jun. 30, 2022 | Jun. 30, 2021 | Aug. 02, 2022 | Sep. 30, 2021 | |
Exercise price of warrants | $ 1.68 | $ 1.63 | ||||
Non-revolving line of credit | ||||||
Related party interest expense | $ 331,548 | $ 0 | ||||
Excel Family Partners, LLLP | Non-revolving line of credit | ||||||
Interest rate | 12% | |||||
Loan term | 18 months | |||||
Proceeds from loans | $ 2,022,000 | |||||
Number of aggregate exercisable warrant shares | 1,149,425 | |||||
Exercise price of warrants | $ 1.75 | |||||
Subsequent event | Industrial Funding Group, Inc. | ||||||
Maximum borrowing capacity | $ 4,000,000 | |||||
Line of credit, Accordion feature | $ 10,000,000 | |||||
Line of credit | $ 2,000,000 | |||||
Loan term | 24 months | |||||
Number of aggregate exercisable warrant shares | 888,997 | |||||
Exercise price of warrants | $ 1.75 | |||||
Subsequent event | Industrial Funding Group, Inc. | Prime rate | Maximum | ||||||
Loan interest rate | 4% | |||||
Subsequent event | Industrial Funding Group, Inc. | Prime rate | Minimum | ||||||
Loan interest rate | 0% | |||||
Subsequent event | Industrial Funding Group, Inc. | Excel Family Partners, LLLP | ||||||
Number of aggregate exercisable warrant shares | 314,285 | |||||
Cash payments | $ 22,000 | |||||
Period for making cash payments | 6 months | |||||
Percentage of outstanding principal amount | 1% | |||||
Subsequent event | Industrial Funding Group, Inc. | Eagle Investment Group, LLC. | ||||||
Number of aggregate exercisable warrant shares | 574,712 |