Cover
Cover - shares | 3 Months Ended | |
Dec. 31, 2022 | Feb. 06, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Dec. 31, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-41508 | |
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 | 213 | |
Local Phone Number | 436-2100 | |
Title of 12(g) Security | Common stock, $0.0001 | |
Trading Symbol | LPTV | |
Security Exchange Name | NYSE | |
Entity Reporting Status Current | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 56,381,209 | |
Entity Central Index Key | 0001643988 | |
Current Fiscal Year End Date | --09-30 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2022 | |
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2022 | Sep. 30, 2022 |
Current assets | ||
Cash | $ 7,753,644 | $ 14,071,914 |
Accounts receivable, net | 15,474,223 | 12,590,970 |
Prepaid expenses and other current assets | 1,232,830 | 1,496,566 |
Deferred offering costs | 68,832 | |
Content assets - current | 1,863,697 | 745,633 |
Total current assets | 26,393,226 | 28,905,083 |
Non-current assets | ||
Deposits | 63,889 | 63,889 |
Content assets - non current | 1,634,847 | 678,659 |
Property and equipment, net | 2,372,546 | 1,633,169 |
Operating lease right-of-use assets | 33,917 | 76,696 |
Intangible assets, net | 562,222 | 590,333 |
Total non-current assets | 4,667,421 | 3,042,746 |
Total assets | 31,060,647 | 31,947,829 |
Current liabilities | ||
Accounts payable | 6,372,516 | 7,453,801 |
Accrued liabilities | 3,289,498 | 5,620,873 |
Accrued royalties | 8,419,287 | 4,559,088 |
Payable on acquisition | 250,125 | |
License content liabilities - current | 1,429,109 | 1,092,819 |
Deferred Income | 143,139 | 140,764 |
Lease liability - current | 30,425 | 75,529 |
Non-revolving line of credit | 1,652,031 | |
Total current liabilities | 21,336,005 | 19,192,999 |
Non-current liabilities | ||
Non-revolving line of credit | 4,666,022 | 4,524,985 |
Non-revolving line of credit, related party | 2,873,160 | 2,575,753 |
Total non-current liabilities | 7,539,182 | 7,100,738 |
Total liabilities | 28,875,187 | 26,293,737 |
Stockholders' equity | ||
Common Stock, $0.0001 par value, 105,555,556 shares authorized, 56,381,209 and 56,381,209 shares issued and outstanding as of December 31, 2022, and September 30, 2022, respectively | 5,638 | 5,638 |
Additional paid in capital | 103,761,125 | 101,970,318 |
Accumulated deficit | (101,581,303) | (96,321,864) |
Total stockholders' equity | 2,185,460 | 5,654,092 |
Total liabilities and stockholders' equity | 31,060,647 | 31,947,829 |
Non-revolving line of credit | ||
Current liabilities | ||
Non-revolving line of credit | 1,652,031 | |
Non-current liabilities | ||
Non-revolving line of credit | 1,494,469 | |
Revolving line of credit | ||
Non-current liabilities | ||
Non-revolving line of credit | $ 4,666,022 | $ 3,030,516 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2022 | Sep. 30, 2022 |
CONSOLIDATED BALANCE SHEETS | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, authorized | 105,555,556 | 105,555,556 |
Common stock, issued | 56,381,209 | 56,381,209 |
Common stock, outstanding | 56,381,209 | 56,381,209 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
CONSOLIDATED STATEMENTS OF OPERATIONS | ||
Revenue | $ 14,825,831 | $ 2,996,034 |
Cost of revenue | 9,139,800 | 1,444,977 |
Gross profit | 5,686,031 | 1,551,057 |
Operating expenses | ||
Sales, general and administrative | 7,958,134 | 4,360,683 |
Stock-based compensation | 1,790,807 | 1,516,594 |
Depreciation and amortization | 187,716 | 32,403 |
Total operating expenses | 9,936,657 | 5,909,680 |
Loss from operations | (4,250,626) | (4,358,623) |
Other income (expense) | ||
Interest income | 200 | |
Interest expense | (1,007,583) | (504,117) |
Gain (Loss) on extinguishment of debt, net | 490,051 | |
Change in fair value of derivatives | 98,745 | |
Total other income (expense) | (1,007,583) | 84,879 |
Income tax (expense)/benefit | (1,230) | (251) |
Net loss | $ (5,259,439) | $ (4,273,995) |
Basic net loss per common share (in dollars per share) | $ (0.09) | $ (0.10) |
Weighted average number of basic common shares outstanding (in shares) | 56,381,209 | 44,490,047 |
CONSOLIDATED STATEMENT OF CHANG
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) | Common Stock | Preferred Stock Series B preferred stock | Additional Paid in Capital. | Accumulated Deficit | Total |
Balance at beginning at Sep. 30, 2021 | $ 4,449 | $ 20 | $ 69,824,754 | $ (66,842,416) | $ 2,986,807 |
Balance at beginning (in shares) at Sep. 30, 2021 | 44,490,003 | 200,000 | |||
Increase (Decrease) in Stockholders' Equity | |||||
Stock-based compensation | 1,549,406 | 1,549,406 | |||
Net loss | (4,273,995) | (4,273,995) | |||
Balance at ending (in shares) at Dec. 31, 2021 | 44,490,003 | 200,000 | |||
Balance at ending at Dec. 31, 2021 | $ 4,449 | $ 20 | 71,374,160 | (71,116,411) | 262,218 |
Balance at beginning at Sep. 30, 2022 | $ 5,638 | 101,970,318 | (96,321,864) | 5,654,092 | |
Balance at beginning (in shares) at Sep. 30, 2022 | 56,381,209 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Stock-based compensation | 1,790,807 | 1,790,807 | |||
Net loss | (5,259,439) | (5,259,439) | |||
Balance at ending (in shares) at Dec. 31, 2022 | 56,381,209 | ||||
Balance at ending at Dec. 31, 2022 | $ 5,638 | $ 103,761,125 | $ (101,581,303) | $ 2,185,460 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (5,259,439) | $ (4,273,995) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Amortization of debt discount | 661,335 | 358,248 |
Depreciation and amortization expense | 187,716 | 32,403 |
Amortization of license content assets | 682,167 | 311,055 |
Amortization of right-of-use assets | 42,779 | 38,555 |
Bad debt expense | 20,000 | |
Gain on extinguishment of debt, net | (490,051) | |
Change in fair value of derivative | (98,745) | |
Stock-based compensation | 1,790,807 | 1,549,406 |
Change in operating assets and liabilities: | ||
Accounts receivable | (2,883,253) | (1,373,259) |
Prepaid income tax | (1,842) | |
Inventory | 12,091 | 108,325 |
Prepaid expenses | 251,644 | (70,555) |
Deposit | (29,590) | |
Accounts payable | (1,375,043) | 317,686 |
Accrued liabilities | (2,331,374) | 713,534 |
Accrued royalties | 3,860,199 | 44,193 |
License content liability | (2,420,129) | (581,000) |
Operating lease liabilities | (45,104) | (39,349) |
Deferred income | 2,375 | (12,782) |
NET CASH USED IN OPERATING ACTIVITIES | (6,823,229) | (3,477,763) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchase of property and equipment | (618,032) | |
NET CASH USED IN INVESTING ACTIVITIES | (618,032) | |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from issuance of common stock | 1,250,000 | |
Proceeds from non-revolving line of credit, net of repayments | 1,429,441 | |
Deferred issuance costs | (301) | |
Deferred offering costs | (56,024) | |
Payment of acquisition related consideration | 250,125 | |
Repayment of stockholder loans | (272,687) | |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 1,122,991 | 977,313 |
Change in cash and cash equivalents | (6,318,270) | (2,500,450) |
Cash, beginning of period | 14,071,914 | 4,162,548 |
Cash, end of period | 7,753,644 | 1,662,098 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW STATEMENTS | ||
Cash paid for interest | 508,118 | 43,130 |
Cash paid for income taxes | 1,230 | $ 251 |
SUPPLEMENTAL DISCLOSURES OF NON CASH INVESTING AND FINANCING ACTIVITIES | ||
Unpaid deferred offering costs | 12,808 | |
Unpaid additions to property and equipment | 280,950 | |
Investment in licensed content and internally developed content | $ 2,756,420 |
BUSINESS
BUSINESS | 3 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BUSINESS | NOTE 1 – BUSINESS Loop Media, Inc., a Nevada corporation, (collectively, “Loop Media,” the “Company,” “we,” “us” or “our”) is 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, convenience stores 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 our OOH clients to access our service without advertisements by paying a monthly subscription fee. We offer hand-curated music video content licensed from major and independent record labels, including Universal Music Group (“Universal”), Sony Music Entertainment (“Sony”), and Warner Music Group (“Warner” and collectively with Universal and Sony, the “Music Labels”), as well as non-music video content, which is predominantly licensed or acquired from third parties, including action sports clips, drone and atmospheric footage, trivia, news headlines, lifestyle channels and kid-friendly videos, as well as movie, television and video game trailers, amongst other content. We distribute our content and advertising inventory to digital screens located in OOH locations primarily through (i) our owned and operated platform (the “O&O Platform”) of Loop Media-designed “small-box” streaming Android media players (“Loop Players”) and legacy ScreenPlay computers and (ii) through screens on digital platforms owned and operated by third parties (each a “Partner Platform” and collectively, the “Partner Platforms,” and together with the O&O Platform, the “Loop Platform”). As of December 31, 2022, we had 26,903 QAUs (described below) operating on our O&O Platform. We launched our Partner Platforms business beginning in May 2022 with one partner on approximately 17,000 of the partner’s screens, and are in the process of finalizing an additional approximately 13,500 screens in a second Partner Platform for a total of approximately 30,500 screens across our Partner Platforms in the near term. We expect to begin earning revenue on these additional screens in our second fiscal quarter ending March 31, 2023. Our legacy subscription-based business complements these newer businesses. We define an “active unit” as (i) an ad-supported Loop Player (or DOOH location using our ad- supported service through our “Loop for Business” application or using an DOOH venue-owned computer screening our content) that is online, used on our O&O Platform, playing content, and has checked into the Loop analytics system at least once in the 90-day period or (ii) a DOOH location customer using our subscription service on our O&O Platform at any time during the 90-day period. We use “QAU” to refer to the number of such active units during such period. We do not count towards our QAUs any Loop Players or screens used on our Partner Platform. Liquidity and management’s plan In accordance with Accounting Standards Update, or ASU, No. 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40) Although it is difficult to predict our liquidity requirements, as of December 31, 2022, based upon our current operating plan, we believe that we will have sufficient cash to meet our projected operating requirements for at least the next twelve months following the issuance of the first quarter consolidated financial statements based on the balance of cash and the projected cash flows from operations. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Dec. 31, 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, 2022, which has been derived from our audited financial statements, and (b) our unaudited condensed consolidated interim financial statements for the three months ended December 31, 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 three months ended December 31, 2022, are not necessarily indicative of results that may be expected for the year ending September 30, 2023. 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, 2022, included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission ("SEC") on December 20, 2022. Basis of presentation The consolidated financial statements include our accounts and our wholly-owned subsidiaries, EON Media Group Pte. Ltd. and Retail Media TV, Inc. 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 revenue recognition of performance obligations, allowance for doubtful accounts, fair value of stock-based compensation awards, income taxes and going concern. 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 loses on such accounts. On December 31, 2022, and September 30, 2022, we had no cash equivalents. As of December 31, 2022, and September 30, 2022, approximately $7,253,644 and $13,821,914 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 December 31, 2022, and September 30, 2022, we had recorded an allowance for doubtful accounts of $604,920 and $646,013, respectively. Concentration of credit risk During the three-months ended December 31, 2022, we had three customers which each individually comprised greater than 10% of net revenue. These customers represented 16%, 15% and 11% respectively. No other customer accounted for more than 10% of net revenue during the periods presented. As of December 31, 2022, three customers accounted for a total of 39% of our accounts receivable balance or 14%, 14%, and 11%, 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. Inventory Inventories are valued at the lower of cost or net realizable value. We purchase inventory from a vendor and all inventory purchased is deemed finished goods. Cost is determined using the first-in-first-out basis for finished goods. Net realizable value is determined on the basis of anticipated sales proceeds less the estimated selling expenses. Management compares the cost of inventories with the net realizable value and an allowance is made to write down inventories to net realizable value, if lower. As of December 31, 2022, and September 30, 2022, we had recorded no valuation allowance. Prepaid expenses Expenditures paid in one accounting period which will not be consumed until a future period such as insurance premiums and annual subscription fees are accounted for on the balance sheet as a prepaid expense. When the asset is eventually consumed, it is charged to expense. Content Assets We capitalize the fixed content fees and corresponding liability when the license period begins, the cost of the content is known, and the content is accepted and available for streaming. If the licensing fee is not determinable or reasonably estimable, no asset or liability is recorded, and licensing costs are expensed as incurred. We amortize licensed content assets into cost of revenue, using the straight-line method over the contractual period of availability. The liability is paid in accordance with the contractual terms of the arrangement. Internally-developed content costs are capitalized in the same manner as licensed content costs, when the cost of the content is known and the content is ready and available for streaming. We amortize internally-developed content assets into cost of revenue, using the straight-line method over the estimated period of streaming. Long-lived assets We evaluate the recoverability of long-lived assets, including intangible assets, for impairment when events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Conditions that would necessitate an impairment assessment include a significant decline in the observable market value of an asset, a significant change in the extent or manner that an asset is used, or a significant adverse change that would indicate that the carrying amount of an asset or group of assets is not recoverable. For long-lived assets to be held and used, we recognize an impairment loss only if their carrying amount is not recoverable through the undiscounted cash flows. The impairment loss is based on the difference between the carrying amount and estimated fair value as determined by discounted future cash flows. Our finite long-lived intangible assets are amortized on a straight-line basis over their estimated useful lives, which range from two nine years 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. Our capitalization policy 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. Loop players are capitalized as fixed assets and depreciated over the estimated period of use. See below for estimated useful lives: Equipment 3-5 years Software 3 years 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 twelve months, we have elected the short-term lease measurement and recognition exemption, and we 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 is 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 On September 26, 2022, our convertible debentures converted to common stock as part of our public offering, uplist to the NYSE stock exchange, and in accordance with the terms of the original debt agreements. As of September 30, 2022, the remaining balance of the derivative liability was written off as part of the conversion to equity. Thus, there is The following table summarizes changes in fair value measurements of the Derivative Liability during the three months ended December 31, 2021: Balance as of September 30, 2021 $ 1,058,633 Change in fair value (98,745) Balance as of December 31, 2021 $ 959,888 Advertising costs We expense all advertising costs as incurred. Advertising and marketing costs for the three months ended December 31, 2022, and 2021, were $2,968,140 and $1,129,527, respectively. Revenue recognition We recognize revenue in accordance with ASC 606 , Revenue from Contracts with Customers ● executed contracts with our customers that we believe 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 can be categorized into two revenue streams with the following performance obligations and recognition patterns: Advertising revenue Advertising revenue accounts for 94% of our revenue and includes revenue from direct and programmatic advertising as well as sponsorships. For all advertising revenue sources, we evaluate whether we should be considered the principal (i.e., report revenues on a gross basis) or an agent (i.e., report revenues on a net basis). We are considered the principal in our arrangements with content providers in our O&O Platform business and with our arrangements with our third-party partners in our Partner Platforms business and thus report revenues on a gross basis, wherein the amounts billed to our advertising demand partners, advertising agencies, and direct advertisers and sponsors are recorded as revenues, and amounts paid to content providers and third-party partners are recorded as expenses. We are considered the principal because we control the advertising space, are primarily responsible to our advertising demand partners and other parties filling our advertising inventory, have discretion in pricing and advertising fill rates and typically have an inventory risk. For advertising inventory provided to advertisers through the use of an advertising demand partner or agency whose fees or commission is calculated based on a stated percentage of gross advertising spending, our revenues are reported net of agency fees and commissions. For advertising revenue, we recognize revenue at the time the digital advertising impressions are filled and the advertisements are played and, for sponsorship revenue, we generally recognize revenue ratably over the term of the sponsorship arrangement as the sponsored advertisements are played. Legacy and other business revenue Legacy and other business revenue accounts for the remaining 6% of total revenue and includes streaming services, subscription content services, and hardware delivery, as described below: o Delivery of streaming services including content encoding and hosting. We recognize revenue over the term of the service based on bandwidth usage. Revenue from streaming services is insignificant. o Delivery of subscription content services in customized formats. We recognize revenue straight-line 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. Revenue from hardware sales is insignificant. 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 December 31, 2022, and September 30, 2022, represents our accounting for the timing difference between when the subscription fees are received and when the performance obligation is satisfied. For the three months ended December 31, 2022, and 2021, revenue of $191,331 and $140,764, respectively, was recognized from the deferred revenue balance at the beginning of each period. 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 December 31, 2022, and September 30, 2022, respectively, because their inclusion would have been anti-dilutive. December 31, September 30, 2022 2022 Options to purchase common stock 8,171,786 8,174,583 Warrants to purchase common stock 5,300,033 5,300,033 Restricted Stock Units (RSUs) 890,000 890,000 Series A preferred stock — — Series B preferred stock — — Convertible debentures — — Total common stock equivalents 14,361,819 14,364,616 Shipping and handling costs A shipping and handling fee is charged to customers and recorded as revenue at the time of sale. The associated cost of shipping and handling is recorded as a cost of revenue at the time of service. Income taxes We account for income taxes in accordance with ASC Topic 740, Income Taxes Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. We have no material uncertain tax positions for any of the reporting periods presented. We recognize accrued interest and penalties related to unrecognized tax benefits as part of income tax expense. We have also made a policy election to treat the income tax with respect to global intangible low-tax income as a period expense when incurred. In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes, as part of its initiative to reduce complexity in accounting standards. The amendments in the ASU are effective for fiscal years beginning after December 15, 2020, including interim periods therein. The adoption of this standard in the first quarter of 2022 had no impact on our consolidated financial statements. Stock-based compensation Stock-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 stock-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. Reclassifications Certain prior year amounts have been reclassified to conform to current year presentation. These reclassifications have no effect on the previously reported financial position, results of operations, or cash flows. Previously reported accounts payable and accrued liabilities have now been disaggregated into accounts payable, accrued liabilities, and accrued royalty. Recently adopted accounting pronouncements 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) 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. |
CONTENT ASSETS
CONTENT ASSETS | 3 Months Ended |
Dec. 31, 2022 | |
Content Assets [Abstract] | |
CONTENT ASSETS | NOTE 3 – CONTENT ASSETS Content Assets The content we stream to our users is generally acquired by securing the intellectual property rights to the content through licenses from, and paying royalties or other consideration to, rights holders or their agents. The licensing can be for a fixed fee or can be a revenue sharing arrangement. The licensing arrangements specify the period when the content is available for streaming, the territories, the platforms, the fee structure and other standard content licensing terms defining the rights and/or restrictions for how the licensed content can be used by Loop. We also develop original content internally, which is capitalized when the content is ready and available for streaming, and generally amortized over a period of two years . As of December 31, 2022, content assets were $1,863,697 recorded as Content asset, net – current and $1,634,847 recorded as Content asset, net – noncurrent, of which $313,180 was internally-developed content asset, net. We recorded amortization expense in cost of revenue, in the consolidated statements of operations, related to capitalized content assets: Three months ended December 31, 2022 2021 Licensed Content Assets $ 669,678 $ 311,055 Internally-Developed Assets 12,489 — Total $ 682,167 $ 311,055 Our content license contracts are typically two years. The amortization expense for the next two years for capitalized content assets as of December 31, 2022: Remaining in Fiscal Year 2023 Fiscal Year 2024 Fiscal Year 2025 Licensed Content Assets $ 1,401,028 $ 1,686,050 $ 98,285 Internally-Developed Assets 52,801 70,401 — Total $ 1,453,829 $ 1,756,451 $ 98,285 License Content Liabilities On December 31, 2022, we had $2,605,535 of obligations comprised of $1,429,109 in License content liability – current and $1,179,426 in accounts payable on the Consolidated Balance Sheets. Payments for content liabilities for the three months ended December 30, 2022, were $1,092,819. The expected timing of payments for these content obligations is $2,608,535 payable in fiscal year 2023. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 3 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | NOTE 5. INTANGIBLE ASSETS Our intangible assets, each definite lived assets, consisted of the following as of December 31, 2022, and September 30, 2022: December 31, September 30, Useful life 2022 2022 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 (647,778) (619,667) Total (647,778) (619,667) Total intangible assets, net $ 562,222 $ 590,333 Amortization expense charged to operations amounted to $28,111 and $32,403, respectively, for the three months ended December 31, 2022, and 2021. Annual amortization expense for the next five years and thereafter is estimated to be $84,333 (remaining in fiscal year 2023), $112,444, $112,444, $112,444, $112,444, and $28,113, respectively. The weighted average life of the intangible assets subject to amortization is 5 years on December 31, 2022. |
OPERATING LEASES
OPERATING LEASES | 3 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
OPERATING LEASES | NOTE 6 – OPERATING 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. December 31, September 30, 2022 2022 Short term portion $ 30,425 $ 75,529 Long term portion — — Total lease liability $ 30,425 $ 75,529 Maturity analysis under these lease agreements are as follows: 2023 $ 33,806 Total undiscounted cash flows 33,806 Less: 10% Present value discount (3,381) Lease liability $ 30,425 Three months ended December 31, 2022 2021 Operating lease expense $ 44,444 $ 44,444 Short-term lease expense 2,400 2,100 Total lease expense $ 46,844 $ 46,544 Operating lease expense is included in sales, general and administration expenses in the consolidated statement of operations. For the three months ended December 30, 2022, cash payments against lease liabilities totaled $40,346, and accretion on lease liability of $1,665. For the three months ended December 31, 2021, cash payments against lease liabilities totaled $35,289, accretion on lease liability of $5,889. Weighted-average remaining lease term and discount rate for operating leases are as follows: Weighted-average remaining lease term 0.41 years Weighted-average discount rate 10 % |
ACCOUNTS PAYABLE AND ACCRUED EX
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 3 Months Ended |
Dec. 31, 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 December 31, 2022, and September 30, 2021: December 31, September 30, 2022 2022 Accounts payable $ 6,372,516 $ 7,453,801 Performance bonuses 1,711,563 2,970,000 Insurance liabilities 332,360 602,970 Professional fees 95,674 505,169 Commissions 101,304 425,321 Interest payable 180,411 348,150 Marketing 384,417 344,309 Other accrued liabilities 483,769 424,954 Accrued liabilities 3,289,498 5,620,873 Accrued royalties 8,419,287 4,559,088 Total accounts payable and accrued expenses $ 18,081,301 $ 17,633,762 |
DEBT
DEBT | 3 Months Ended |
Dec. 31, 2022 | |
Debt Instruments [Abstract] | |
DEBT | NOTE 8 – DEBT Lines of Credit as of December 31, 2022: Unpaid Contractual Net Carrying Value Principal Interest Rates Contractual Warrants Related party lines of credit: Current Long Term Balance Cash Maturity Date issued $4,022,986 non-revolving line of credit, amended December 12, 2022 (1) $ — $ 2,873,160 $ 4,022,986 12% 4/25/2024 383,141 Total related party lines of credit, net $ — $ 2,873,160 $ 4,022,986 Lines of credit: $2,200,000 non-revolving line of credit, May 13, 2022 (2) $ 1,652,031 $ — $ 2,200,000 12% 11/13/2023 314,286 $6,000,000 revolving line of credit, July 29, 2022 — 4,666,022 5,973,001 Greater of 4% or Prime 7/29/2024 — Total lines of credit, net $ 1,652,031 $ 4,666,022 $ 8,173,001 Lines of Credit as of September 30, 2022: Unpaid Contractual Net Carrying Value Principal Interest Rates Contractual Warrants Related party lines of credit: Current Long Term Balance Cash Maturity Date issued $4,022,986 non-revolving line of credit, April 25, 2022 (1) $ — $ 2,575,753 $ 4,022,986 12% 10/25/2023 383,141 Total related party lines of credit, net $ — $ 2,575,753 $ 4,022,986 Lines of credit: $2,200,000 non-revolving line of credit, May 13, 2022 (2) $ — $ 1,494,469 $ 2,200,000 12% 11/13/2023 314,286 $6,000,000 revolving line of credit, July 29, 2022 — 3,030,516 4,543,560 Greater of 4% or Prime 7/29/2024 — Total lines of credit, net $ — $ 4,524,985 $ 6,743,560 The following table presents the interest expense related to the contractual interest coupon and the amortization of debt discounts on the lines of credit: Three months ended December 31, 2022 2021 Interest expense $ 340,379 $ — Amortization of debt discounts 661,335 — Total $ 1,001,714 $ — For the fiscal years ended September 30, 2023 $ — 2024 12,195,987 2025 — 2026 — 2027 — Lines of credit, related and non related party 12,195,987 Less: Debt discount on lines of credit payable (3,004,774) Total Lines of credit payable, related and non related party, net $ 9,191,213 Non-Revolving Lines of Credit On February 23, 2022, we entered into a Non-Revolving Line of Credit Loan Agreement (the “Prior Excel Loan Agreement”) with Excel Family Partnership, LLLP (“Excel”), an entity managed by Bruce Cassidy, a member of our Board of Directors, for aggregate principal amount of $1,500,000 , which was amended on April 13, 2022, to increase the aggregate principal amount to $2,000,000 (the “$2m Loan”). Effective as of April 25, 2022, we entered into a Non-Revolving Line of Credit Loan Agreement with Excel (the “Excel Non-Revolving Loan Agreement”) for an aggregate principal amount of $4,022,986 (the “Excel Non-Revolving Loan”). The Excel Non-Revolving Loan matures eighteen (18) months from the date of the Excel Non-Revolving Loan Agreement and accrues interest, payable semi-annually in arrears, at a fixed rate of interest equal to twelve (12) percent per year. On April 25, 2022, we used $2,000,000 of the proceeds of the Excel Non-Revolving Loan to prepay all of the remaining outstanding principal and interest of the $2m Loan and the Prior Excel Loan Agreement was terminated in connection with such prepayment. Under the Excel Non-Revolving 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 (which was subsequently subordinated in connection with our Revolving Loan Agreement (as defined below)). In connection with the Excel Non-Revolving Loan, on April 25, 2022, we issued a warrant for an aggregate of up to 383,141 shares of our common stock. The warrant has an exercise price of $5.25 per share, expires on April 25, 2025, and shall be exercisable at any time prior to the expiration date. Effective as of December 14, 2022, we entered into a Non-Revolving Line of Credit Agreement Amendment and a Non-Revolving line of Credit Promissory Note Amendment with Excel to extend the maturity date from eighteen (18) months to twenty-four (24) months from the date of the Excel Non-Revolving Loan. The Excel Non-Revolving Loan had a balance, including accrued interest, amounting to $4,111,492 and $4,226,181 as of December 31, 2022, and September 30, 2022, respectively. We incurred interest expense for the Excel Non-Revolving Loan in the amount of $419,438 and $0 for the three months ended December 31, 2022, and 2021. Effective as of May 13, 2022, we entered into a Non-Revolving Line of Credit Loan Agreement (the “RAT Non-Revolving Loan Agreement”) with several institutions and individuals and RAT Investment Holdings, LP, as administrator of the loan (the “Loan Administrator”) for an aggregate principal amount of $2,200,000 (the “RAT Non-Revolving Loan”). The RAT Non-Revolving Loan matures eighteen (18) months from the effective date of the RAT Non-Revolving Loan Agreement and accrues interest, payable semi-annually in arrears, at a fixed rate of interest equal to twelve (12) percent per year. Under the RAT Non-Revolving Loan Agreement, we granted to the lenders under the RAT Non-Revolving Loan Agreement 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, which security interest is pari passu with the Excel Non-Revolving Loan Agreement (which was subsequently subordinated in connection with our Revolving Loan Agreement). In connection with the RAT Non-Revolving Loan Agreement, on May 13, 2022, we issued a warrant (each a “Warrant” and collectively, the “Warrants”) to each lender under the RAT Non-Revolving Loan Agreement for an aggregate of up to 209,522 shares of our common stock (the “Warrant Shares”). Each Warrant has an exercise price of $5.25 per share, expires on May 13, 2025, and shall be exercisable at any time prior to the expiration date. The warrants were accounted for as equity awards. We allocated the debt and warrant on a relative fair value basis to the proceeds received for the non-revolving lines of credit. We further allocated the fair value of $2,975,261 of the warrants at inception as a debt discount and recorded the straight-line amortization of debt discount as interest expense. The RAT Non-Revolving Loan had a balance, including accrued interest, amounting to $2,235,441 and $2,301,260 as of December 31, 2022, and September 30, 2022, respectively. We incurred interest expense for the RAT Non-Revolving Loan in the amount of $224,105 and $0 for the three months ended December 31, 2022, and 2021. Revolving Loan Agreement Effective as of July 29, 2022, we entered into a Loan and Security Agreement (the “Revolving Loan Agreement”) with Industrial Funding Group, Inc. (the “Initial Lender”) for a revolving loan credit facility for the initial principal sum of up to $4,000,000 , and through the exercise of an accordion feature, a total sum of up to $10,000,000 , evidenced by a Revolving Loan Secured Promissory Note, also effective as of July 29, 2022 (the “Revolving Loan”). Shortly after the effective date of the Revolving Loan, the Initial Lender assigned the Revolving Loan Agreement, and the loan documents related thereto, to GemCap Solutions, LLC (the “Senior Lender”). Availability for borrowing under the Revolving Loan Agreement is dependent upon our assets in certain eligible accounts and measures of revenue, subject to reduction for reserves that the Senior Lender may require in its discretion, and the accordion feature is a provision whereby we may request that the Senior Lender increase availability under the Revolving Loan Agreement, subject to its sole discretion. Effective as of October 27, 2022, we entered into Amendment Number 1 to the Revolving Loan Agreement with the Senior Lender to increase the principal sum available from $4,000,000 to $6,000,000 . As of December 31, 2022, we had borrowed $5,973,001 under the Revolving Loan. The Revolving Loan matures on July 29, 2024, and began accruing interest on the unpaid principal balance of advances, payable monthly in arrears, on September 7, 2022, at an annual rate equal to the greater of (I) the sum of (i) the “Prime Rate” as reported in the “Money Rates” column of The Wall Street Journal, adjusted as and when such Prime Rate changes, plus (ii) zero percent ( 0.00% ), and (II) four percent ( 4.00% ). Under the Revolving 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 (the “Subordinated Lenders”) delivered subordination agreements (the “Subordination Agreements”) to the Senior Lender. We are permitted to make regularly scheduled payments, including payments upon maturity, to such subordinated lenders and potentially other payments subject to a measure of cash flow and receiving certain financing activity proceeds, in accordance with the terms of the Subordination Agreements. In connection with the delivery of the Subordination Agreements by the Subordinated Lenders, on July 29, 2022, we issued warrants to each Subordinated Lender on identical terms for an aggregate of up to 296,329 shares of our common stock. Each warrant has an exercise price of $5.25 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 191,570 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, one of the Subordinated Lenders. The Subordinated Lenders receiving warrants for the remaining 104,759 warrant shares were also entitled to 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 held by such Subordinated Lenders. This cash payment was made to such Subordinated Lenders on January 25, 2023. The warrants were accounted for as equity awards. We allocated the debt and warrant on a relative fair value basis to the proceeds received for the revolving loan agreement. We further allocated the fair value of the $1,347,719 of the warrants at inception as a debt discount and recorded the straight-line amortization of debt discount as interest expense. The Revolving Loan had a balance, including accrued interest, amounting to $6,029,465 and $4,587,255 as of December 31, 2022, and September 30, 2022, respectively. We incurred interest expense for the Revolving Loan in the amount of $358,171 and $0 for the three months ended December 31, 2022, and 2021. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 9 – 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 December 31, 2022. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 10 – 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. Revolving Loan Agreement Effective as of July 29, 2022, we entered into the Revolving Loan Agreement. In connection with the loan under the Revolving Loan Agreement, the Subordinated Lenders delivered Subordination Agreements to the Senior Lender. In connection with the delivery of the Subordination Agreements by the Subordinated Lenders, on July 29, 2022, we issued warrants to each Subordinated Lender on identical terms for an aggregate of up to 296,329 shares of our common stock. Each warrant has an exercise price of $5.25 per share, expires on July 29, 2025. One warrant for 191,570 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, one of the Subordinated Lenders. Excel Non-Revolving Loan Agreement On February 23, 2022, we entered into the Prior Excel Loan Agreement with Excel, an entity managed by Bruce Cassidy, a member of our Board of Directors, for the $2m Loan (aggregate principal amount of $1,500,000 , which was amended on April 13, 2022, to increase the aggregate principal amount to $2,000,000 . Effective as of April 25, 2022, we entered into the Excel Non-Revolving Loan Agreement for the Excel Non-Revolving Loan (aggregate principal amount of $4,022,986) . The Excel Non-Revolving Loan matures eighteen (18) months from the date of the Excel Non-Revolving Loan Agreement and accrues interest, payable semi-annually in arrears, at a fixed rate of interest equal to twelve (12) percent per year. On April 25, 2022, we used $2,000,000 of the proceeds of the Excel Non-Revolving 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. Under the Excel Non-Revolving 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 (which was subsequently subordinated in connection with the Revolving Loan Agreement). In connection with the Excel Non-Revolving Loan, on April 25, 2022, we issued a warrant for an aggregate of up to 383,141 shares of our common stock. The warrant has an exercise price of $5.25 per share, expires on April 25, 2025, and shall be exercisable at any time prior to the expiration date. Effective as of December 14, 2022, we entered into a Non-Revolving Line of Credit Agreement Amendment and a Non-Revolving line of Credit Promissory Note Amendment with Excel to extend the maturity date from eighteen (18) months to twenty-four (24) months from the date of the Excel Non-Revolving Loan. The Excel Non-Revolving Loan had a balance, including accrued interest, amounting to $4,111,492 and $4,226,181 as of December 31, 2022, and September 30, 2022, respectively. We incurred interest expense for the Excel Non-Revolving Loan in the amount of $419,438 and $0 for the three months ended December 31, 2022, and 2021. 500 Limited For the three months ended December 31, 2022, and 2021, we paid 500 Limited $116,200 and $103,200 , respectively, for programming services provided to Loop. 500 Limited is an entity controlled by Liam McCallum, our Chief Product and Technology Officer. |
STOCKHOLDERS' EQUITY (DEFICIT)
STOCKHOLDERS' EQUITY (DEFICIT) | 3 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY (DEFICIT) | NOTE 11 –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 December 31, 2022, and 2021, we had 0 and 0 shares of Series Preferred 2021 outstanding As of December 31, 2022, there were (i) no shares of Series A Preferred Stock issued outstanding issued outstanding issued outstanding Presentation in Financial Statements of “Redeemable Preferred Stocks” Change in Number of Authorized and Outstanding Shares On September 21, 2022, a 1 for 3 reverse stock split of our common stock became effective. All share and per share information in the accompanying consolidated financial statements and footnotes has been retroactively adjusted for the effects of the reverse split for all periods presented. Common stock Our authorized capital stock consists of 105,555,556 shares of common stock, $0.0001 par value per share, and 3,333,334 shares of preferred stock, $0.0001 par value per share. As of December 31, 2022, and 2021, there were 56,381,209 and 44,490,006, respectively, shares of common stock issued outstanding Three months ended December 31, 2022 See Note 12 – Stock Options and Warrants for stock compensation discussion. Three months ended December 31, 2021 See Note 12 – Stock Options and Warrants for stock compensation discussion. |
STOCK OPTIONS AND WARRANTS
STOCK OPTIONS AND WARRANTS | 3 Months Ended |
Dec. 31, 2022 | |
Share-based Payment Arrangement, Additional Disclosure [Abstract] | |
STOCK OPTIONS AND WARRANTS | NOTE 12 – 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, we account 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 three months ended December 31, 2022: Weighted Weighted Average Average Remaining Aggregate Options Exercise Price Contractual Term Intrinsic Value Outstanding at September 30, 2022 8,174,563 $ 3.78 8.05 $ 9,188,491 Grants — — — — Exercised — — — — Expired — — — — Forfeited (2,777) 3.30 — — Outstanding at December 31, 2022 8,171,786 $ 3.78 7.80 $ 24,082,385 Exercisable at December 31, 2022 6,162,812 $ 3.44 7.49 $ 19,989,899 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 $6.62 as of December 31, 2022, and $6.75 as of December 31, 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 as of December 31, 2022: Options outstanding Weighted Options average exercisable Exercise Number of remaining life number of price options in years options $ 2.58 382,790 3.66 382,790 1.98 1,472,892 5.84 1,472,891 2.67 833,333 7.46 753,333 3.30 2,621,053 7.87 1,838,504 1.71 100,000 8.17 99,999 8.52 83,333 8.33 83,333 8.25 200,000 8.34 105,556 7.05 16,667 8.56 7,870 7.20 16,667 8.57 7,870 7.50 16,667 8.59 16,666 6.90 278,727 8.76 169,357 7.05 25,000 8.82 7,292 8.25 141,667 9.31 — 7.74 45,000 9.37 — 7.05 8,333 9.53 — 7.86 6,667 9.67 — 4.95 1,922,990 9.73 1,217,351 8,171,786 6,162,812 Stock-based compensation We recognize compensation expense for all stock options granted using the fair value-based method of accounting. During the three months ended December 31, 2022, no stock options were granted. As of December 31, 2022, the total compensation cost related to nonvested awards not yet recognized is $8,851,714 and the weighted average period over which expense is expected to be recognized in months is 24.1. The stock-based compensation expense related to option grants was $1,382,000 and $1,549,406, for the three months ended December 31, 2022, and 2021, respectively. Restricted Stock Units On September 18, 2022, the Compensation Committee of our Board of Directors approved Restricted Stock Unit ( “ ” $ 3 As of December 31, 2022, the total compensation cost related to nonvested RSU awards not yet recognized was $4,079,167 and the weighted average period over which expense is expected to be recognized in months was 44.0. 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) $ 2.58 100,000 6.78 2.58 100,000 6.78 2.57 666,666 3.93 2.57 666,666 3.93 2.25 888,888 7.20 2.25 888,888 7.20 8.25 107,952 1.92 8.25 107,952 1.92 8.40 16,666 6.32 8.40 16,666 6.32 8.25 2,191,149 1.75 8.25 2,191,149 1.75 7.05 62,438 4.21 7.05 39,884 4.21 5.25 383,141 2.32 5.25 383,141 2.32 5.25 209,522 2.37 5.25 209,522 2.37 9.00 66,666 2.38 9.00 66,666 2.38 7.95 100,000 2.46 7.95 16,667 2 5.25 296,329 2.58 5.25 296,329 2.58 6.00 192,000 4.74 6.00 192,000 4.74 6.00 18,616 4.75 6.00 18,616 4.75 The following table summarizes the warrant activity for the three months ended December 31, 2022: Weighted average exercise Number of price per shares share Outstanding at September 30, 2022 5,300,033 $ 5.82 Issued — — Exercised — — Expired — — Outstanding at December 31, 2022 5,300,033 $ We record all warrants granted using the fair value-based method of accounting. During the three months ended December 31, 2022, no warrants were issued. We recorded consulting expense of $130,682 as a result of current period vesting of previously issued warrants to various companies for consulting services. |
INCOME TAX
INCOME TAX | 3 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAX | NOTE 13 – 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 three months ended December 31, 2022, we recorded an income tax provision of $1,230. For the three months ended December 31, 2021, we recorded an income tax provision of $251 related to state and local taxes. The effective rate for both the three months ended December 31, 2022, and 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 | 3 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 14 – SUBSEQUENT EVENTS Significant Agreements We have recently renewed and updated the last of our three limited, non-exclusive licenses to digitally distribute certain music videos and related materials to our OOH clients in the United States owned or controlled by the major record labels; Universal Music Group, Sony Music Entertainment, and Warner Music Group (collectively, the “Music Labels”) and have now done so with all three Music Labels. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation The consolidated financial statements include our accounts and our wholly-owned subsidiaries, EON Media Group Pte. Ltd. and Retail Media TV, Inc. 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 revenue recognition of performance obligations, allowance for doubtful accounts, fair value of stock-based compensation awards, income taxes and going concern. |
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 loses on such accounts. On December 31, 2022, and September 30, 2022, we had no cash equivalents. As of December 31, 2022, and September 30, 2022, approximately $7,253,644 and $13,821,914 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 December 31, 2022, and September 30, 2022, we had recorded an allowance for doubtful accounts of $604,920 and $646,013, respectively. |
Concentration of credit risk | Concentration of credit risk During the three-months ended December 31, 2022, we had three customers which each individually comprised greater than 10% of net revenue. These customers represented 16%, 15% and 11% respectively. No other customer accounted for more than 10% of net revenue during the periods presented. As of December 31, 2022, three customers accounted for a total of 39% of our accounts receivable balance or 14%, 14%, and 11%, 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. |
Inventory | Inventory Inventories are valued at the lower of cost or net realizable value. We purchase inventory from a vendor and all inventory purchased is deemed finished goods. Cost is determined using the first-in-first-out basis for finished goods. Net realizable value is determined on the basis of anticipated sales proceeds less the estimated selling expenses. Management compares the cost of inventories with the net realizable value and an allowance is made to write down inventories to net realizable value, if lower. As of December 31, 2022, and September 30, 2022, we had recorded no valuation allowance. |
Prepaid expenses | Prepaid expenses Expenditures paid in one accounting period which will not be consumed until a future period such as insurance premiums and annual subscription fees are accounted for on the balance sheet as a prepaid expense. When the asset is eventually consumed, it is charged to expense. |
Content Asset | Content Assets We capitalize the fixed content fees and corresponding liability when the license period begins, the cost of the content is known, and the content is accepted and available for streaming. If the licensing fee is not determinable or reasonably estimable, no asset or liability is recorded, and licensing costs are expensed as incurred. We amortize licensed content assets into cost of revenue, using the straight-line method over the contractual period of availability. The liability is paid in accordance with the contractual terms of the arrangement. Internally-developed content costs are capitalized in the same manner as licensed content costs, when the cost of the content is known and the content is ready and available for streaming. We amortize internally-developed content assets into cost of revenue, using the straight-line method over the estimated period of streaming. |
Long-lived assets | Long-lived assets We evaluate the recoverability of long-lived assets, including intangible assets, for impairment when events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Conditions that would necessitate an impairment assessment include a significant decline in the observable market value of an asset, a significant change in the extent or manner that an asset is used, or a significant adverse change that would indicate that the carrying amount of an asset or group of assets is not recoverable. For long-lived assets to be held and used, we recognize an impairment loss only if their carrying amount is not recoverable through the undiscounted cash flows. The impairment loss is based on the difference between the carrying amount and estimated fair value as determined by discounted future cash flows. Our finite long-lived intangible assets are amortized on a straight-line basis over their estimated useful lives, which range from two nine years |
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. Our capitalization policy 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. Loop players are capitalized as fixed assets and depreciated over the estimated period of use. See below for estimated useful lives: Equipment 3-5 years Software 3 years |
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 twelve months, we have elected the short-term lease measurement and recognition exemption, and we 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 is 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 On September 26, 2022, our convertible debentures converted to common stock as part of our public offering, uplist to the NYSE stock exchange, and in accordance with the terms of the original debt agreements. As of September 30, 2022, the remaining balance of the derivative liability was written off as part of the conversion to equity. Thus, there is The following table summarizes changes in fair value measurements of the Derivative Liability during the three months ended December 31, 2021: Balance as of September 30, 2021 $ 1,058,633 Change in fair value (98,745) Balance as of December 31, 2021 $ 959,888 |
Advertising costs | Advertising costs We expense all advertising costs as incurred. Advertising and marketing costs for the three months ended December 31, 2022, and 2021, were $2,968,140 and $1,129,527, respectively. |
Revenue recognition | Revenue recognition We recognize revenue in accordance with ASC 606 , Revenue from Contracts with Customers ● executed contracts with our customers that we believe 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 can be categorized into two revenue streams with the following performance obligations and recognition patterns: Advertising revenue Advertising revenue accounts for 94% of our revenue and includes revenue from direct and programmatic advertising as well as sponsorships. For all advertising revenue sources, we evaluate whether we should be considered the principal (i.e., report revenues on a gross basis) or an agent (i.e., report revenues on a net basis). We are considered the principal in our arrangements with content providers in our O&O Platform business and with our arrangements with our third-party partners in our Partner Platforms business and thus report revenues on a gross basis, wherein the amounts billed to our advertising demand partners, advertising agencies, and direct advertisers and sponsors are recorded as revenues, and amounts paid to content providers and third-party partners are recorded as expenses. We are considered the principal because we control the advertising space, are primarily responsible to our advertising demand partners and other parties filling our advertising inventory, have discretion in pricing and advertising fill rates and typically have an inventory risk. For advertising inventory provided to advertisers through the use of an advertising demand partner or agency whose fees or commission is calculated based on a stated percentage of gross advertising spending, our revenues are reported net of agency fees and commissions. For advertising revenue, we recognize revenue at the time the digital advertising impressions are filled and the advertisements are played and, for sponsorship revenue, we generally recognize revenue ratably over the term of the sponsorship arrangement as the sponsored advertisements are played. Legacy and other business revenue Legacy and other business revenue accounts for the remaining 6% of total revenue and includes streaming services, subscription content services, and hardware delivery, as described below: o Delivery of streaming services including content encoding and hosting. We recognize revenue over the term of the service based on bandwidth usage. Revenue from streaming services is insignificant. o Delivery of subscription content services in customized formats. We recognize revenue straight-line 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. Revenue from hardware sales is insignificant. 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 December 31, 2022, and September 30, 2022, represents our accounting for the timing difference between when the subscription fees are received and when the performance obligation is satisfied. For the three months ended December 31, 2022, and 2021, revenue of $191,331 and $140,764, respectively, was recognized from the deferred revenue balance at the beginning of each period. |
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 December 31, 2022, and September 30, 2022, respectively, because their inclusion would have been anti-dilutive. December 31, September 30, 2022 2022 Options to purchase common stock 8,171,786 8,174,583 Warrants to purchase common stock 5,300,033 5,300,033 Restricted Stock Units (RSUs) 890,000 890,000 Series A preferred stock — — Series B preferred stock — — Convertible debentures — — Total common stock equivalents 14,361,819 14,364,616 |
Shipping and handling costs | Shipping and handling costs A shipping and handling fee is charged to customers and recorded as revenue at the time of sale. The associated cost of shipping and handling is recorded as a cost of revenue at the time of service. |
Income taxes | Income taxes We account for income taxes in accordance with ASC Topic 740, Income Taxes Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. We have no material uncertain tax positions for any of the reporting periods presented. We recognize accrued interest and penalties related to unrecognized tax benefits as part of income tax expense. We have also made a policy election to treat the income tax with respect to global intangible low-tax income as a period expense when incurred. In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes, as part of its initiative to reduce complexity in accounting standards. The amendments in the ASU are effective for fiscal years beginning after December 15, 2020, including interim periods therein. The adoption of this standard in the first quarter of 2022 had no impact on our consolidated financial statements. |
Stock-based compensation | Stock-based compensation Stock-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 stock-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. |
Reclassifications | Reclassifications Certain prior year amounts have been reclassified to conform to current year presentation. These reclassifications have no effect on the previously reported financial position, results of operations, or cash flows. Previously reported accounts payable and accrued liabilities have now been disaggregated into accounts payable, accrued liabilities, and accrued royalty. Recently adopted accounting pronouncements 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) |
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. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Schedule of estimated useful lives | Equipment 3-5 years Software 3 years |
Schedule of changes in fair value measurement | Balance as of September 30, 2021 $ 1,058,633 Change in fair value (98,745) Balance as of December 31, 2021 $ 959,888 |
Schedule of weighted average diluted shares | December 31, September 30, 2022 2022 Options to purchase common stock 8,171,786 8,174,583 Warrants to purchase common stock 5,300,033 5,300,033 Restricted Stock Units (RSUs) 890,000 890,000 Series A preferred stock — — Series B preferred stock — — Convertible debentures — — Total common stock equivalents 14,361,819 14,364,616 |
CONTENT ASSETS (Tables)
CONTENT ASSETS (Tables) | 3 Months Ended |
Dec. 31, 2022 | |
Content Assets [Abstract] | |
Schedule of amortization expense | Three months ended December 31, 2022 2021 Licensed Content Assets $ 669,678 $ 311,055 Internally-Developed Assets 12,489 — Total $ 682,167 $ 311,055 |
Schedule of future amortization expense | Remaining in Fiscal Year 2023 Fiscal Year 2024 Fiscal Year 2025 Licensed Content Assets $ 1,401,028 $ 1,686,050 $ 98,285 Internally-Developed Assets 52,801 70,401 — Total $ 1,453,829 $ 1,756,451 $ 98,285 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 3 Months Ended |
Dec. 31, 2022 | |
Table Text Block Supplement [Abstract] | |
Schedule of equipment | December 31, September 30, 2022 2022 Equipment $ 2,820,389 $ 1,962,743 Software 445,393 404,058 3,265,782 2,366,801 Less: accumulated depreciation (893,236) (733,632) Total property and equipment, net $ 2,372,546 $ 1,633,169 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Dec. 31, 2022 | |
Table Text Block Supplement [Abstract] | |
Schedule of other intangible assets | Our intangible assets, each definite lived assets, consisted of the following as of December 31, 2022, and September 30, 2022: December 31, September 30, Useful life 2022 2022 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 (647,778) (619,667) Total (647,778) (619,667) Total intangible assets, net $ 562,222 $ 590,333 |
OPERATING LEASES (Tables)
OPERATING LEASES (Tables) | 3 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Schedule of lease liability | December 31, September 30, 2022 2022 Short term portion $ 30,425 $ 75,529 Long term portion — — Total lease liability $ 30,425 $ 75,529 |
Schedule of maturity analysis | Maturity analysis under these lease agreements are as follows: 2023 $ 33,806 Total undiscounted cash flows 33,806 Less: 10% Present value discount (3,381) Lease liability $ 30,425 Three months ended December 31, 2022 2021 Operating lease expense $ 44,444 $ 44,444 Short-term lease expense 2,400 2,100 Total lease expense $ 46,844 $ 46,544 |
Schedule of lease expense | 2023 $ 33,806 Total undiscounted cash flows 33,806 Less: 10% Present value discount (3,381) Lease liability $ 30,425 |
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 0.41 years Weighted-average discount rate 10 % |
ACCOUNTS PAYABLE AND ACCRUED _2
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | 3 Months Ended |
Dec. 31, 2022 | |
Payables and Accruals [Abstract] | |
Schedule of accounts payable and accrued expenses | Accounts payable and accrued expenses consisted of the following as of December 31, 2022, and September 30, 2021: December 31, September 30, 2022 2022 Accounts payable $ 6,372,516 $ 7,453,801 Performance bonuses 1,711,563 2,970,000 Insurance liabilities 332,360 602,970 Professional fees 95,674 505,169 Commissions 101,304 425,321 Interest payable 180,411 348,150 Marketing 384,417 344,309 Other accrued liabilities 483,769 424,954 Accrued liabilities 3,289,498 5,620,873 Accrued royalties 8,419,287 4,559,088 Total accounts payable and accrued expenses $ 18,081,301 $ 17,633,762 |
DEBT (Tables)
DEBT (Tables) | 3 Months Ended |
Dec. 31, 2022 | |
Debt Instruments [Abstract] | |
Schedule of classifications of non-revolving line of credit | Lines of Credit as of December 31, 2022: Unpaid Contractual Net Carrying Value Principal Interest Rates Contractual Warrants Related party lines of credit: Current Long Term Balance Cash Maturity Date issued $4,022,986 non-revolving line of credit, amended December 12, 2022 (1) $ — $ 2,873,160 $ 4,022,986 12% 4/25/2024 383,141 Total related party lines of credit, net $ — $ 2,873,160 $ 4,022,986 Lines of credit: $2,200,000 non-revolving line of credit, May 13, 2022 (2) $ 1,652,031 $ — $ 2,200,000 12% 11/13/2023 314,286 $6,000,000 revolving line of credit, July 29, 2022 — 4,666,022 5,973,001 Greater of 4% or Prime 7/29/2024 — Total lines of credit, net $ 1,652,031 $ 4,666,022 $ 8,173,001 Lines of Credit as of September 30, 2022: Unpaid Contractual Net Carrying Value Principal Interest Rates Contractual Warrants Related party lines of credit: Current Long Term Balance Cash Maturity Date issued $4,022,986 non-revolving line of credit, April 25, 2022 (1) $ — $ 2,575,753 $ 4,022,986 12% 10/25/2023 383,141 Total related party lines of credit, net $ — $ 2,575,753 $ 4,022,986 Lines of credit: $2,200,000 non-revolving line of credit, May 13, 2022 (2) $ — $ 1,494,469 $ 2,200,000 12% 11/13/2023 314,286 $6,000,000 revolving line of credit, July 29, 2022 — 3,030,516 4,543,560 Greater of 4% or Prime 7/29/2024 — Total lines of credit, net $ — $ 4,524,985 $ 6,743,560 |
Schedule of maturity analysis under total convertible debentures | Three months ended December 31, 2022 2021 Interest expense $ 340,379 $ — Amortization of debt discounts 661,335 — Total $ 1,001,714 $ — For the fiscal years ended September 30, 2023 $ — 2024 12,195,987 2025 — 2026 — 2027 — Lines of credit, related and non related party 12,195,987 Less: Debt discount on lines of credit payable (3,004,774) Total Lines of credit payable, related and non related party, net $ 9,191,213 |
STOCK OPTIONS AND WARRANTS (Tab
STOCK OPTIONS AND WARRANTS (Tables) | 3 Months Ended |
Dec. 31, 2022 | |
Share-based Payment Arrangement, Additional Disclosure [Abstract] | |
Schedule of stock option activity | The following table summarizes the stock option activity for the three months ended December 31, 2022: Weighted Weighted Average Average Remaining Aggregate Options Exercise Price Contractual Term Intrinsic Value Outstanding at September 30, 2022 8,174,563 $ 3.78 8.05 $ 9,188,491 Grants — — — — Exercised — — — — Expired — — — — Forfeited (2,777) 3.30 — — Outstanding at December 31, 2022 8,171,786 $ 3.78 7.80 $ 24,082,385 Exercisable at December 31, 2022 6,162,812 $ 3.44 7.49 $ 19,989,899 |
Schedule of related to stock options | The following table presents information related to stock options as of December 31, 2022: Options outstanding Weighted Options average exercisable Exercise Number of remaining life number of price options in years options $ 2.58 382,790 3.66 382,790 1.98 1,472,892 5.84 1,472,891 2.67 833,333 7.46 753,333 3.30 2,621,053 7.87 1,838,504 1.71 100,000 8.17 99,999 8.52 83,333 8.33 83,333 8.25 200,000 8.34 105,556 7.05 16,667 8.56 7,870 7.20 16,667 8.57 7,870 7.50 16,667 8.59 16,666 6.90 278,727 8.76 169,357 7.05 25,000 8.82 7,292 8.25 141,667 9.31 — 7.74 45,000 9.37 — 7.05 8,333 9.53 — 7.86 6,667 9.67 — 4.95 1,922,990 9.73 1,217,351 8,171,786 6,162,812 |
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) $ 2.58 100,000 6.78 2.58 100,000 6.78 2.57 666,666 3.93 2.57 666,666 3.93 2.25 888,888 7.20 2.25 888,888 7.20 8.25 107,952 1.92 8.25 107,952 1.92 8.40 16,666 6.32 8.40 16,666 6.32 8.25 2,191,149 1.75 8.25 2,191,149 1.75 7.05 62,438 4.21 7.05 39,884 4.21 5.25 383,141 2.32 5.25 383,141 2.32 5.25 209,522 2.37 5.25 209,522 2.37 9.00 66,666 2.38 9.00 66,666 2.38 7.95 100,000 2.46 7.95 16,667 2 5.25 296,329 2.58 5.25 296,329 2.58 6.00 192,000 4.74 6.00 192,000 4.74 6.00 18,616 4.75 6.00 18,616 4.75 |
Schedule of warrant activity | The following table summarizes the warrant activity for the three months ended December 31, 2022: Weighted average exercise Number of price per shares share Outstanding at September 30, 2022 5,300,033 $ 5.82 Issued — — Exercised — — Expired — — Outstanding at December 31, 2022 5,300,033 $ |
BUSINESS (Details)
BUSINESS (Details) | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2022 USD ($) item | Dec. 31, 2021 USD ($) | Sep. 30, 2022 USD ($) | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Quarterly active units | item | 26,903 | ||
Number of initial partner's screens launched | item | 17,000 | ||
Total screen launched | item | 30,500 | ||
Additional screen launched | item | 13,500 | ||
Reverse stock split | 3 | ||
Cash | $ | $ 7,753,644 | $ 14,071,914 | |
Net loss | $ | (5,259,439) | $ (4,273,995) | |
Net cash used in operating activities | $ | (6,823,229) | $ (3,477,763) | |
Accumulated deficit | $ | $ (101,581,303) | $ (96,321,864) |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 3 Months Ended | ||
Dec. 31, 2022 USD ($) segment customer | Dec. 31, 2021 USD ($) | Sep. 30, 2022 USD ($) | |
Number of reportable segments | segment | 1 | ||
Number of operating segments | segment | 1 | ||
Cash equivalents | $ 0 | $ 0 | |
FDIC insurance Limit | 7,253,644 | 13,821,914 | |
Allowance for doubtful accounts | 604,920 | 646,013 | |
Inventory valuation allowance | 0 | 0 | |
Intangible assets, net | 562,222 | 590,333 | |
Threshold amount for capitalization of Property and equipment | 3,000 | ||
Advertising costs | 2,968,140 | $ 1,129,527 | |
Deferred Income | $ 143,139 | $ 140,764 | $ 140,764 |
Sales Revenue | Customer Concentration Risk | |||
Number of Major Customers | customer | 3 | ||
Sales Revenue | Customer Concentration Risk | Customer One | |||
Concentration risk, percentage | 16% | ||
Sales Revenue | Customer Concentration Risk | Customer Two | |||
Concentration risk, percentage | 15% | ||
Sales Revenue | Customer Concentration Risk | Customer Three | |||
Concentration risk, percentage | 11% | ||
Sales Revenue | Revenue from Rights Concentration Risk | Direct and Programmatic Advertising including Sponsorships [Member] | |||
Concentration risk, percentage | 94% | ||
Sales Revenue | Revenue from Rights Concentration Risk | Legacy and other business revenue | |||
Concentration risk, percentage | 6% | ||
Accounts Receivable. | Customer Concentration Risk | |||
Number of Major Customers | customer | 3 | ||
Accounts Receivable. | Customer Concentration Risk | Three Customer | |||
Concentration risk, percentage | 39% | ||
Accounts Receivable. | Customer Concentration Risk | Customer One | |||
Concentration risk, percentage | 14% | ||
Accounts Receivable. | Customer Concentration Risk | Customer Two | |||
Concentration risk, percentage | 14% | ||
Accounts Receivable. | Customer Concentration Risk | Customer Three | |||
Concentration risk, percentage | 11% | ||
Minimum | |||
Finite-lived intangible asset, useful life | 2 years | ||
Minimum | Sales Revenue | Customer Concentration Risk | |||
Concentration risk, percentage | 10% | ||
Maximum | |||
Finite-lived intangible asset, useful life | 9 years | ||
Maximum | Sales Revenue | Customer Concentration Risk | |||
Number of Major Customers | customer | 0 | ||
Concentration risk, percentage | 10% | ||
Maximum | Accounts Receivable. | Customer Concentration Risk | |||
Number of Major Customers | customer | 0 | ||
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) | Dec. 31, 2022 USD ($) |
Financial Liabilities Fair Value Disclosure [Abstract] | |
Derivative liabilities | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Fair Value Measurement - Changes in Fair Value Measurements (Details) | 3 Months Ended |
Dec. 31, 2021 USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Beginning Balance | $ 1,058,633 |
Change in fair value | (98,745) |
Ending Balance | $ 959,888 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - shares | 3 Months Ended | 12 Months Ended |
Dec. 31, 2022 | Sep. 30, 2022 | |
Total common stock equivalents | 14,361,819 | 14,364,616 |
Options to purchase common stock | ||
Total common stock equivalents | 8,171,786 | 8,174,583 |
Warrants to purchase common stock | ||
Total common stock equivalents | 5,300,033 | 5,300,033 |
Restricted Stock Units (RSUs) | ||
Total common stock equivalents | 890,000 | 890,000 |
CONTENT ASSETS (Details)
CONTENT ASSETS (Details) - USD ($) | 3 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2022 | |
License content asset - current | $ 1,863,697 | $ 745,633 | |
License content asset - non current | 1,634,847 | 678,659 | |
License content liability | 2,605,535 | ||
License content liability - current | 1,429,109 | $ 1,092,819 | |
License content liability - non current | 1,179,426 | ||
Payments for license content liabilities | 1,092,819 | ||
Amortization expense | 682,167 | $ 311,055 | |
Amortization expense, 2023 | 1,453,829 | ||
Amortization expense, 2024 | 1,756,451 | ||
Amortization Expense Total | 98,285 | ||
Payable in 2023 | $ 2,608,535 | ||
Licensed Content Assets | |||
Useful life | 2 years | ||
Amortization expense | $ 669,678 | $ 311,055 | |
Amortization expense, 2023 | 1,401,028 | ||
Amortization expense, 2024 | 1,686,050 | ||
Amortization Expense Total | 98,285 | ||
Internally Developed Content Assets | |||
License content asset | 313,180 | ||
Amortization expense | 12,489 | ||
Amortization expense, 2023 | 52,801 | ||
Amortization expense, 2024 | $ 70,401 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) | Dec. 31, 2022 | Sep. 30, 2022 |
Gross equipment | $ 3,265,782 | $ 2,366,801 |
Less: accumulated depreciation | (893,236) | (733,632) |
Total, equipment net | 2,372,546 | 1,633,169 |
Equipment | ||
Gross equipment | 2,820,389 | 1,962,743 |
Software | ||
Gross equipment | $ 445,393 | $ 404,058 |
PROPERTY AND EQUIPMENT - Deprec
PROPERTY AND EQUIPMENT - Depreciation (Details) - USD ($) | 3 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
PROPERTY AND EQUIPMENT | ||
Depreciation expense | $ 159,605 | $ 4,292 |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) - USD ($) | 3 Months Ended | |
Dec. 31, 2022 | Sep. 30, 2022 | |
Total intangible assets, gross | $ 1,210,000 | $ 1,210,000 |
Less: accumulated amortization | (647,778) | (619,667) |
Total | (647,778) | (619,667) |
Total intangible assets, net | $ 562,222 | 590,333 |
Useful life | 5 years | |
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 |
INTANGIBLE ASSETS - Amortizatio
INTANGIBLE ASSETS - Amortization expense (Details) - USD ($) | 3 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Useful life | 5 years | ||
Amortization expense | $ 28,111 | $ 32,403 | |
Intangible assets, net | 562,222 | $ 590,333 | |
Finite-Lived Intangible Asset, Expected Amortization, Remainder of Fiscal Year | 84,333 | ||
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 Year Five | 112,444 | ||
Finite-Lived Intangible Assets, Amortization Expense, Rolling after Year Five | $ 28,113 |
OPERATING LEASES - Short and lo
OPERATING LEASES - Short and long term leases (Details) - USD ($) | Dec. 31, 2022 | Sep. 30, 2022 |
Leases [Abstract] | ||
Short term portion | $ 30,425 | $ 75,529 |
Total lease liability | $ 30,425 | $ 75,529 |
OPERATING LEASES - Maturity ana
OPERATING LEASES - Maturity analysis (Details) - USD ($) | Dec. 31, 2022 | Sep. 30, 2022 |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | ||
2022 | $ 33,806 | |
Total undiscounted cash flows | 33,806 | |
Less: 10% Present value discount | (3,381) | |
Lease liability | $ 30,425 | $ 75,529 |
OPERATING LEASES - Lease expens
OPERATING LEASES - Lease expense (Details) - USD ($) | 3 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Leases. | ||
Operating lease expense | $ 44,444 | $ 44,444 |
Short-term lease expense | 2,400 | 2,100 |
Total lease expense | $ 46,844 | $ 46,544 |
OPERATING LEASES - Weighted-ave
OPERATING LEASES - Weighted-average lease term (Details) | Dec. 31, 2022 |
Lease Detail 3 [Abstract] | |
Weighted-average remaining lease term | 4 months 28 days |
Weighted-average discount rate | 10% |
OPERATING LEASES (Details)
OPERATING LEASES (Details) - USD ($) | 3 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Lease Detail Narrative [Abstract] | ||
Cash payments against lease liabilities | $ 40,346 | $ 35,289 |
Accretion on lease liability | $ 1,665 | $ 5,889 |
ACCOUNTS PAYABLE AND ACCRUED _3
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($) | Dec. 31, 2022 | Sep. 30, 2022 |
Accounts Payable And Accrued Expenses. | ||
Performance Bonus | $ 1,711,563 | $ 2,970,000 |
Accounts payable | 6,372,516 | 7,453,801 |
Insurance liabilities | 332,360 | 602,970 |
Professional Fees | 95,674 | 505,169 |
Commission | 101,304 | 425,321 |
Interest payable | 180,411 | 348,150 |
Marketing | 384,417 | 344,309 |
Other accrued liabilities | 483,769 | 424,954 |
Accrued liabilities | 3,289,498 | 5,620,873 |
Accrued royalties | 8,419,287 | 4,559,088 |
Total accounts payable and accrued expenses | $ 18,081,301 | $ 17,633,762 |
DEBT - Lines of Credit (Details
DEBT - Lines of Credit (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Sep. 07, 2022 | Dec. 31, 2022 | Sep. 30, 2022 | |
Line of Credit Facility [Line Items] | |||
Related party line of credit, net, Long Term | $ 2,873,160 | $ 2,575,753 | |
Related party, Unpaid Principal Balance | 4,022,986 | 4,022,986 | |
Non-revolving line of credit | 1,652,031 | ||
Line of credit, net, Long Term | 4,666,022 | 4,524,985 | |
Line of credit, Unpaid Principal Balance | 8,173,001 | ||
Warrants issued for severance | 130,682 | ||
Prime rate | Maximum | |||
Line of Credit Facility [Line Items] | |||
Loan interest rate | 4% | ||
Non-revolving line of credit | |||
Line of Credit Facility [Line Items] | |||
Non-revolving line of credit | 1,652,031 | ||
Line of credit, net, Long Term | 1,494,469 | ||
Line of credit, Unpaid Principal Balance | 6,743,560 | ||
Non-revolving lines of credit December 12, 2022 | |||
Line of Credit Facility [Line Items] | |||
Related party line of credit, net, Long Term | 2,873,160 | ||
Related party, Unpaid Principal Balance | $ 4,022,986 | ||
Interest rate | 12% | ||
Maturity date | Apr. 25, 2024 | ||
Warrants issued for severance | $ 383,141 | ||
Secured loan amount | 4,022,986 | ||
Non-revolving lines of credit, April 25, 2022 | |||
Line of Credit Facility [Line Items] | |||
Related party line of credit, net, Long Term | 2,575,753 | ||
Related party, Unpaid Principal Balance | $ 4,022,986 | ||
Interest rate | 12% | ||
Maturity date | Oct. 25, 2023 | ||
Warrants issued for severance | $ 383,141 | ||
Secured loan amount | 4,022,986 | ||
Non-revolving lines of credit, May 13, 2022 | |||
Line of Credit Facility [Line Items] | |||
Non-revolving line of credit | 1,652,031 | ||
Line of credit, net, Long Term | 1,494,469 | ||
Line of credit, Unpaid Principal Balance | $ 2,200,000 | $ 2,200,000 | |
Interest rate | 12% | 12% | |
Maturity date | Nov. 13, 2023 | Nov. 13, 2023 | |
Warrants issued for severance | $ 314,286 | $ 314,286 | |
Secured loan amount | 2,200,000 | 2,200,000 | |
Revolving line of credit | |||
Line of Credit Facility [Line Items] | |||
Line of credit, net, Long Term | 4,666,022 | 3,030,516 | |
Revolving line of credit, July 29, 2022 | |||
Line of Credit Facility [Line Items] | |||
Line of credit, net, Long Term | 4,666,022 | 3,030,516 | |
Line of credit, Unpaid Principal Balance | $ 5,973,001 | $ 4,543,560 | |
Maturity date | Jul. 29, 2024 | Jul. 29, 2024 | |
Secured loan amount | $ 6,000,000 | $ 6,000,000 | |
Revolving line of credit, July 29, 2022 | Prime rate | |||
Line of Credit Facility [Line Items] | |||
Loan interest rate | 4% | 4% |
DEBT - Interest expenses and am
DEBT - Interest expenses and amortization of debt discount (Details) - USD ($) | 3 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Line of Credit Facility [Line Items] | ||
Interest expense | $ 340,379 | |
Amortization of debt discounts | 661,335 | $ 358,248 |
Total | $ 1,001,714 |
DEBT - Maturities (Details)
DEBT - Maturities (Details) | Dec. 31, 2022 USD ($) |
Line of Credit Facility [Abstract] | |
2024 | $ 12,195,987 |
Debt, related and non related party | 12,195,987 |
Less: Debt discount | (3,004,774) |
Total debt, related and non related party, net | $ 9,191,213 |
DEBT - Line of Credit - Narrati
DEBT - Line of Credit - Narrative (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 14, 2022 | Sep. 07, 2022 | Jul. 29, 2022 | May 13, 2022 | Apr. 25, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2022 | Dec. 01, 2022 | Oct. 27, 2022 | Apr. 13, 2022 | Feb. 23, 2022 | |
Line of Credit Facility [Line Items] | ||||||||||||
Related party, Unpaid Principal Balance | $ 4,022,986 | $ 4,022,986 | ||||||||||
Number of aggregate warrants | 191,570 | |||||||||||
Exercise price (in dollars per share) | $ 5.82 | |||||||||||
Long-term Debt | 9,191,213 | |||||||||||
Interest expense | 1,001,714 | |||||||||||
Prime rate | Maximum | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Loan interest rate | 4% | |||||||||||
Prime rate | Minimum | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Loan interest rate | 0% | |||||||||||
Non-revolving line of credit | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Allocated fair value of warrants as additional debt discount | $ 2,975,261 | |||||||||||
Non-revolving lines of credit, April 25, 2022 | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Secured loan amount | $ 4,022,986 | |||||||||||
Related party, Unpaid Principal Balance | $ 4,022,986 | |||||||||||
Interest rate | 12% | |||||||||||
Interest expense | $ 0 | |||||||||||
Non-revolving lines of credit, May 13, 2022 | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Secured loan amount | $ 2,200,000 | $ 2,200,000 | ||||||||||
Interest rate | 12% | 12% | ||||||||||
Revolving line of credit | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Maximum borrowing capacity | $ 5,973,001 | |||||||||||
Revolving line of credit, July 29, 2022 | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Secured loan amount | $ 6,000,000 | $ 6,000,000 | ||||||||||
Maximum borrowing capacity | $ 4,000,000 | $ 6,000,000 | ||||||||||
Line of credit, Accordion feature | $ 10,000,000 | |||||||||||
Number of aggregate warrants | 296,329 | |||||||||||
Exercise price (in dollars per share) | $ 5.25 | |||||||||||
Long-term Debt | 6,029,465 | $ 4,587,255 | ||||||||||
Interest expense | $ 358,171 | 0 | ||||||||||
Revolving line of credit, July 29, 2022 | Prime rate | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Loan interest rate | 4% | 4% | ||||||||||
Excel Family Partners, LLLP | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Secured loan amount | $ 4,022,986 | $ 2,000,000 | $ 1,500,000 | |||||||||
Excel Family Partners, LLLP | Non-revolving line of credit | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Secured loan amount | $ 2,000,000 | $ 1,500,000 | ||||||||||
Excel Family Partners, LLLP | Non-revolving lines of credit, April 25, 2022 | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Secured loan amount | $ 4,022,986 | |||||||||||
Loan term | 24 months | 18 months | ||||||||||
Interest rate | 12% | |||||||||||
Proceeds from loans | $ 2,000,000 | |||||||||||
Number of aggregate warrants | 383,141 | |||||||||||
Exercise price (in dollars per share) | $ 5.25 | |||||||||||
Long-term Debt | $ 4,111,492 | $ 4,226,181 | ||||||||||
Interest expense | 419,438 | 0 | ||||||||||
Excel Family Partners, LLLP | Revolving line of credit, July 29, 2022 | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Number of aggregate warrants | 104,759 | |||||||||||
Cash payments | $ 22,000 | |||||||||||
Percentage of outstanding principal amount | 1% | |||||||||||
Allocated fair value of warrants as additional debt discount | $ 1,347,719 | |||||||||||
RAT Investment Holdings, LP | Non-revolving line of credit | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Long-term Debt | 2,235,441 | $ 2,301,260 | ||||||||||
Interest expense | $ 224,105 | $ 0 | ||||||||||
RAT Investment Holdings, LP | Non-revolving lines of credit, May 13, 2022 | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Secured loan amount | $ 2,200,000 | |||||||||||
Loan term | 18 months | |||||||||||
Proceeds from loans | $ 12 | |||||||||||
Number of aggregate warrants | 209,522 | |||||||||||
Exercise price (in dollars per share) | $ 5.25 | |||||||||||
Eagle Investment Group, LLC. | Revolving line of credit, July 29, 2022 | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Number of Warrants for Each Investor | 1 | |||||||||||
Number of aggregate warrants | 191,570 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) | 3 Months Ended |
Dec. 31, 2022 USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Loss contingencies | $ 0 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) | 3 Months Ended | |||||||||
Dec. 14, 2022 | Jul. 29, 2022 | Apr. 25, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 01, 2022 | Oct. 27, 2022 | Sep. 30, 2022 | Apr. 13, 2022 | Feb. 23, 2022 | |
Aggregate remaining balances, including accrued interest | $ 9,191,213 | |||||||||
Number of aggregate warrants | 191,570 | |||||||||
Number of warrants issued | 1 | |||||||||
Exercise price (in dollars per share) | $ 5.82 | |||||||||
Long-term Debt | 9,191,213 | |||||||||
Interest expense | 1,001,714 | |||||||||
Non-revolving lines of credit, April 25, 2022 | ||||||||||
Secured loan amount | $ 4,022,986 | |||||||||
Interest rate | 12% | |||||||||
Interest expense | $ 0 | |||||||||
Revolving line of credit | ||||||||||
Maximum borrowing capacity | $ 5,973,001 | |||||||||
Revolving Lines of Credit, July 29, 2022 | ||||||||||
Maximum borrowing capacity | $ 4,000,000 | $ 6,000,000 | ||||||||
Secured loan amount | 6,000,000 | $ 6,000,000 | ||||||||
Aggregate remaining balances, including accrued interest | 6,029,465 | 4,587,255 | ||||||||
Number of aggregate warrants | 296,329 | |||||||||
Exercise price (in dollars per share) | $ 5.25 | |||||||||
Long-term Debt | 6,029,465 | 4,587,255 | ||||||||
Interest expense | 358,171 | 0 | ||||||||
Eagle Investment Group, LLC | Revolving Lines of Credit, July 29, 2022 | ||||||||||
Number of aggregate warrants | 191,570 | |||||||||
Number of warrants for each investor | 1 | |||||||||
Excel Family Partners, LLLP | ||||||||||
Secured loan amount | $ 4,022,986 | $ 2,000,000 | $ 1,500,000 | |||||||
Excel Family Partners, LLLP | Non-revolving line of credit | ||||||||||
Secured loan amount | $ 2,000,000 | $ 1,500,000 | ||||||||
Excel Family Partners, LLLP | Non-revolving lines of credit, April 25, 2022 | ||||||||||
Secured loan amount | $ 4,022,986 | |||||||||
Interest rate | 12% | |||||||||
Loan term | 24 months | 18 months | ||||||||
Aggregate remaining balances, including accrued interest | 4,111,492 | 4,226,181 | ||||||||
Proceeds from loans | $ 2,000,000 | |||||||||
Number of aggregate warrants | 383,141 | |||||||||
Exercise price (in dollars per share) | $ 5.25 | |||||||||
Long-term Debt | 4,111,492 | $ 4,226,181 | ||||||||
Interest expense | 419,438 | 0 | ||||||||
Excel Family Partners, LLLP | Revolving Lines of Credit, July 29, 2022 | ||||||||||
Number of aggregate warrants | 104,759 | |||||||||
Five Hundred Limited | ||||||||||
Amount paid for programming services | $ 116,200 | $ 103,200 |
STOCKHOLDERS' EQUITY (DEFICIT)
STOCKHOLDERS' EQUITY (DEFICIT) (Details) | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2022 USD ($) Vote $ / shares shares | Sep. 30, 2022 $ / shares shares | Jul. 29, 2022 shares | Dec. 31, 2021 shares | |
Preferred stock, shares authorized | 16,666,667 | |||
Preferred stock, shares issues | 200,000 | |||
Preferred stock, shares outstanding | 0 | |||
Preferred stock, liquidation preference (in dollars per share) | $ / shares | $ 1.50 | |||
Preferred stock, number of votes per share | Vote | 100 | |||
Preferred stock, convertible, conversion ratio | 100 | |||
Reverse stock split | 3 | |||
Common stock, shares authorized | 105,555,556 | 105,555,556 | ||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||
Common stock, shares issues | 56,381,209 | 56,381,209 | ||
Common stock, shares outstanding | 56,381,209 | 56,381,209 | ||
Offering costs | $ | $ 56,024 | |||
Exercise price of warrants | $ / shares | $ 5.82 | |||
Number of aggregate warrants | 191,570 | |||
Common Stock | ||||
Common stock, shares authorized | 105,555,556 | |||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | |||
Common stock, shares issues | 56,381,209 | 44,490,006 | ||
Common stock, shares outstanding | 56,381,209 | 44,490,006 | ||
Preferred Stock | ||||
Preferred stock, shares authorized | 3,333,334 | |||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.0001 | |||
Series A preferred stock | ||||
Preferred stock, shares authorized | 3,333,334 | |||
Preferred stock, shares issues | 0 | 30,667 | ||
Preferred stock, shares outstanding | 0 | |||
Preferred stock, liquidation preference (in dollars per share) | $ / shares | $ 1.50 | |||
Preferred stock, number of votes per share | Vote | 100 | |||
Preferred stock, convertible, conversion ratio | 100 | |||
Series B preferred stock | ||||
Preferred stock, shares authorized | 3,333,334 | |||
Preferred stock, shares issues | 0 | 200,000 | ||
Preferred stock, shares outstanding | 0 | 200,000 | ||
Series A convertible preferred stock | ||||
Preferred stock, shares issues | 0 | |||
Preferred stock, shares outstanding | 200,000 |
STOCK OPTIONS AND WARRANTS - St
STOCK OPTIONS AND WARRANTS - Stock option activity (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Dec. 31, 2022 | Sep. 30, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Outstanding at the beginning | 8,174,563 | |
Forfeited | (2,777) | |
Outstanding at the end | 8,171,786 | 8,174,563 |
Exercisable | 6,162,812 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | ||
Outstanding at the beginning | $ 3.78 | |
Forfeited | (3.30) | |
Outstanding at the end | 3.78 | $ 3.78 |
Exercisable | $ 3.44 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||
Weighted average remaining contractual term, outstanding | 7 years 9 months 18 days | 8 years 18 days |
Exercisable | 7 years 5 months 26 days | |
Outstanding at the beginning | $ 9,188,491 | |
Outstanding at the end | 24,082,385 | $ 9,188,491 |
Exercisable at the end | $ 19,989,899 |
STOCK OPTIONS AND WARRANTS - _2
STOCK OPTIONS AND WARRANTS - Stock options (Details) - $ / shares | 3 Months Ended | 12 Months Ended |
Dec. 31, 2022 | Sep. 30, 2022 | |
Exercise price | $ 3.78 | $ 3.78 |
Number of options | 8,171,786 | 8,174,563 |
Weighted average remaining life in years remaining life in years | 7 years 9 months 18 days | 8 years 18 days |
Options exercisable number of options | 6,162,812 | |
Stock Options Exercise price 2.58 | ||
Exercise price | $ 2.58 | |
Number of options | 382,790 | |
Weighted average remaining life in years remaining life in years | 3 years 7 months 28 days | |
Options exercisable number of options | 382,790 | |
Stock Options Exercise price 1.98 | ||
Exercise price | $ 1.98 | |
Number of options | 1,472,892 | |
Weighted average remaining life in years remaining life in years | 5 years 10 months 2 days | |
Options exercisable number of options | 1,472,891 | |
Stock Options Exercise price 2.67 | ||
Exercise price | $ 2.67 | |
Number of options | 833,333 | |
Weighted average remaining life in years remaining life in years | 7 years 5 months 15 days | |
Options exercisable number of options | 753,333 | |
Stock Options Exercise price 3.30 | ||
Exercise price | $ 3.30 | |
Number of options | 2,621,053 | |
Weighted average remaining life in years remaining life in years | 7 years 10 months 13 days | |
Options exercisable number of options | 1,838,504 | |
Stock Options Exercise price 1.71 | ||
Exercise price | $ 1.71 | |
Number of options | 100,000 | |
Weighted average remaining life in years remaining life in years | 8 years 2 months 1 day | |
Options exercisable number of options | 99,999 | |
Stock Options Exercise price 8.52 | ||
Exercise price | $ 8.52 | |
Number of options | 83,333 | |
Weighted average remaining life in years remaining life in years | 8 years 3 months 29 days | |
Options exercisable number of options | 83,333 | |
Stock Options Exercise price 8.25 | ||
Exercise price | $ 8.25 | |
Number of options | 200,000 | |
Weighted average remaining life in years remaining life in years | 8 years 4 months 2 days | |
Options exercisable number of options | 105,556 | |
Stock Options Exercise Price 7.05 | ||
Exercise price | $ 7.05 | |
Number of options | 16,667 | |
Weighted average remaining life in years remaining life in years | 8 years 6 months 21 days | |
Options exercisable number of options | 7,870 | |
Stock Options Exercise price 7.20 | ||
Exercise price | $ 7.20 | |
Number of options | 16,667 | |
Weighted average remaining life in years remaining life in years | 8 years 6 months 25 days | |
Options exercisable number of options | 7,870 | |
Stock Options Exercise price 7.50 | ||
Exercise price | $ 7.50 | |
Number of options | 16,667 | |
Weighted average remaining life in years remaining life in years | 8 years 7 months 2 days | |
Options exercisable number of options | 16,666 | |
Stock Options Exercise price 6.90 | ||
Exercise price | $ 6.90 | |
Number of options | 278,727 | |
Weighted average remaining life in years remaining life in years | 8 years 9 months 3 days | |
Options exercisable number of options | 169,357 | |
Stock Options Exercise price 7.05 | ||
Exercise price | $ 7.05 | |
Number of options | 25,000 | |
Weighted average remaining life in years remaining life in years | 8 years 9 months 25 days | |
Options exercisable number of options | 7,292 | |
Stock Options exercise price 8.25 | ||
Exercise price | $ 8.25 | |
Number of options | 141,667 | |
Weighted average remaining life in years remaining life in years | 9 years 3 months 21 days | |
Stock Options Exercise price 7.74 | ||
Exercise price | $ 7.74 | |
Number of options | 45,000 | |
Weighted average remaining life in years remaining life in years | 9 years 4 months 13 days | |
Stock Options exercise price 7.05 | ||
Exercise price | $ 7.05 | |
Number of options | 8,333 | |
Weighted average remaining life in years remaining life in years | 9 years 6 months 10 days | |
Stock Options Exercise price 7.86 | ||
Exercise price | $ 7.86 | |
Number of options | 6,667 | |
Weighted average remaining life in years remaining life in years | 9 years 8 months 1 day | |
Stock Options Exercise price 4.95 | ||
Exercise price | $ 4.95 | |
Number of options | 1,922,990 | |
Weighted average remaining life in years remaining life in years | 9 years 8 months 23 days | |
Options exercisable number of options | 1,217,351 |
STOCK OPTIONS AND WARRANTS - Ch
STOCK OPTIONS AND WARRANTS - Changes in warrants outstanding (Details) - USD ($) | 3 Months Ended | |
Dec. 31, 2022 | Sep. 30, 2022 | |
Exercise price (in dollars per share) | $ 5.82 | |
Number outstanding | $ 5,300,033 | $ 5,300,033 |
Warrant Exercise price 2.58 | ||
Exercise price (in dollars per share) | $ 2.58 | |
Number outstanding | $ 100,000 | |
Weighted average remaining contractual life (years) | 6 years 9 months 10 days | |
Weighted average exercise price | $ 2.58 | |
Number exercisable | 100,000 | |
Weighted average remaining contractual life (years) | 6 years 9 months 10 days | |
Warrant Exercise price 2.57 | ||
Exercise price (in dollars per share) | $ 2.57 | |
Number outstanding | $ 666,666 | |
Weighted average remaining contractual life (years) | 3 years 11 months 4 days | |
Weighted average exercise price | $ 2.57 | |
Number exercisable | 666,666 | |
Weighted average remaining contractual life (years) | 3 years 11 months 4 days | |
Warrant Exercise price 2.25 | ||
Exercise price (in dollars per share) | $ 2.25 | |
Number outstanding | $ 888,888 | |
Weighted average remaining contractual life (years) | 7 years 2 months 12 days | |
Weighted average exercise price | $ 2.25 | |
Number exercisable | 888,888 | |
Weighted average remaining contractual life (years) | 7 years 2 months 12 days | |
Warrant exercise price 8.25 | ||
Exercise price (in dollars per share) | $ 8.25 | |
Number outstanding | $ 107,952 | |
Weighted average remaining contractual life (years) | 1 year 11 months 1 day | |
Weighted average exercise price | $ 8.25 | |
Number exercisable | 107,952 | |
Weighted average remaining contractual life (years) | 1 year 11 months 1 day | |
Warrant Exercise price 8.40 | ||
Exercise price (in dollars per share) | $ 8.40 | |
Number outstanding | $ 16,666 | |
Weighted average remaining contractual life (years) | 6 years 3 months 25 days | |
Weighted average exercise price | $ 8.40 | |
Number exercisable | 16,666 | |
Weighted average remaining contractual life (years) | 6 years 3 months 25 days | |
Warrant Exercise price 8.25 | ||
Exercise price (in dollars per share) | $ 8.25 | |
Number outstanding | $ 2,191,149 | |
Weighted average remaining contractual life (years) | 1 year 9 months | |
Weighted average exercise price | $ 8.25 | |
Number exercisable | 2,191,149 | |
Weighted average remaining contractual life (years) | 1 year 9 months | |
Warrant Exercise price 7.05 | ||
Exercise price (in dollars per share) | $ 7.05 | |
Number outstanding | $ 62,438 | |
Weighted average remaining contractual life (years) | 4 years 2 months 15 days | |
Weighted average exercise price | $ 7.05 | |
Number exercisable | 39,884 | |
Weighted average remaining contractual life (years) | 4 years 2 months 15 days | |
Warrant exercise price 5.25 | ||
Exercise price (in dollars per share) | $ 5.25 | |
Number outstanding | $ 383,141 | |
Weighted average remaining contractual life (years) | 2 years 3 months 25 days | |
Weighted average exercise price | $ 5.25 | |
Number exercisable | 383,141 | |
Weighted average remaining contractual life (years) | 2 years 3 months 25 days | |
Warrant Exercise price 5.25 | ||
Exercise price (in dollars per share) | $ 5.25 | |
Number outstanding | $ 209,522 | |
Weighted average remaining contractual life (years) | 2 years 4 months 13 days | |
Weighted average exercise price | $ 5.25 | |
Number exercisable | 209,522 | |
Weighted average remaining contractual life (years) | 2 years 4 months 13 days | |
Warrant Exercise price 9.00 | ||
Exercise price (in dollars per share) | $ 9 | |
Number outstanding | $ 66,666 | |
Weighted average remaining contractual life (years) | 2 years 4 months 17 days | |
Weighted average exercise price | $ 9 | |
Number exercisable | 66,666 | |
Weighted average remaining contractual life (years) | 2 years 4 months 17 days | |
Warrant Exercise price 7.95 | ||
Exercise price (in dollars per share) | $ 7.95 | |
Number outstanding | $ 100,000 | |
Weighted average remaining contractual life (years) | 2 years 5 months 15 days | |
Weighted average exercise price | $ 7.95 | |
Number exercisable | 16,667 | |
Weighted average remaining contractual life (years) | 2 years | |
Warrant Exercise Price 5.25 | ||
Exercise price (in dollars per share) | $ 5.25 | |
Number outstanding | $ 296,329 | |
Weighted average remaining contractual life (years) | 2 years 6 months 29 days | |
Weighted average exercise price | $ 5.25 | |
Number exercisable | 296,329 | |
Weighted average remaining contractual life (years) | 2 years 6 months 29 days | |
Warrant Exercise price 6.00 | ||
Exercise price (in dollars per share) | $ 6 | |
Number outstanding | $ 192,000 | |
Weighted average remaining contractual life (years) | 4 years 8 months 26 days | |
Weighted average exercise price | $ 6 | |
Number exercisable | 192,000 | |
Weighted average remaining contractual life (years) | 4 years 8 months 26 days | |
Warrant exercise price 6.00 | ||
Exercise price (in dollars per share) | $ 6 | |
Number outstanding | $ 18,616 | |
Weighted average remaining contractual life (years) | 4 years 9 months | |
Weighted average exercise price | $ 6 | |
Number exercisable | 18,616 | |
Weighted average remaining contractual life (years) | 4 years 9 months |
STOCK OPTIONS AND WARRANTS - Wa
STOCK OPTIONS AND WARRANTS - Warrant activity (Details) | Dec. 31, 2022 USD ($) $ / shares |
Number of shares | |
Outstanding at beginning | $ | $ 5,300,033 |
Outstanding at ending | $ | $ 5,300,033 |
Weighted average exercise price per share | |
Outstanding at beginning | $ / shares | $ 5.82 |
Outstanding at ending | $ / shares |
STOCK OPTIONS AND WARRANTS (Det
STOCK OPTIONS AND WARRANTS (Details) - USD ($) | 1 Months Ended | 3 Months Ended | |||
Sep. 22, 2022 | Jul. 29, 2022 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Number of warrants issued | 1 | ||||
Amount of total compensation cost related to nonvested awards not yet recognized | $ 4,079,167 | ||||
Weighted average period over which expense is expected to be recognized | 44 months | ||||
Stock-based compensation expense | $ 1,382,000 | $ 1,549,406 | |||
Number of warrants issued | 0 | ||||
Warrants issued for severance | $ 130,682 | ||||
Number of aggregate warrants | 191,570 | ||||
Options | |||||
Shares granted | 0 | ||||
Stock price (in dollars per share) | $ 6.62 | $ 6.75 | |||
Amount of total compensation cost related to nonvested awards not yet recognized | $ 8,851,714 | ||||
Weighted average period over which expense is expected to be recognized | 24 months 3 days | ||||
Restricted Stock Units | |||||
Vesting rights, percentage | 25% | ||||
Shares granted | 890,000 | ||||
Stock price (in dollars per share) | $ 5 | ||||
Restricted Stock Units | Tranche One | |||||
Vesting period | 1 year | ||||
Restricted Stock Units | Tranche Two | |||||
Vesting period | 3 years |
INCOME TAX (Details)
INCOME TAX (Details) | 3 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
U.S. federal statutory rate | 21% | 21% |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) | Dec. 14, 2022 | Apr. 25, 2022 |
Excel Family Partners, LLLP | Non-revolving lines of credit, April 25, 2022 | ||
Loan term | 24 months | 18 months |