Cover
Cover - shares | 6 Months Ended | |
Mar. 31, 2021 | May 17, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2021 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2021 | |
Current Fiscal Year End Date | --09-30 | |
Entity File Number | 001-40334 | |
Entity Registrant Name | eSports Technologies, Inc. | |
Entity Central Index Key | 0001829966 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Elected Not To Use the Extended Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 13,048,768 | |
Entity Incorporation State | NV |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) | Mar. 31, 2021 | Sep. 30, 2020 |
Current assets: | ||
Cash | $ 2,269,615 | $ 0 |
Accounts receivable, net | 0 | 33,839 |
Deferred financing costs | 125,900 | 50,000 |
Other current assets | 37,294 | 0 |
Prepaid expenses | 53,926 | 0 |
Total current assets | 2,486,735 | 83,839 |
Long term assets: | ||
Software and equipment, net | 135,805 | 0 |
Intangible assets - cryptocurrency | 8,781 | 44,562 |
Intangible assets - domain names, net | 2,239,606 | 2,239,606 |
Other long-term assets | 133,770 | 0 |
Total assets | 5,004,697 | 2,368,007 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 468,832 | 55,760 |
Accounts payable, related party | 155,228 | 152,888 |
Liabilities to users | 41,850 | 8,809 |
Total current liabilities | 665,910 | 217,457 |
Convertible notes payable, net of discount | 776,489 | 116,667 |
Other long term liabilities, net of discount | 442,680 | 422,409 |
Total liabilities | 1,885,079 | 756,533 |
COMMITMENTS AND CONTINGENCIES | ||
Stockholders' equity: | ||
Preferred Stock, $0.001 par value, 10,000,000 shares authorized, 0 issued and outstanding | 0 | 0 |
Common stock; $0.001 par value, 100,000,000 shares authorized, 10,648,769 and 7,340,421 shares issued and outstanding as of March 31, 2021 and September 30, 2020, respectively | 10,649 | 7,340 |
Additional paid-in capital | 9,684,886 | 3,053,660 |
Accumulated deficit | (6,575,917) | (1,449,526) |
Total stockholders' equity | 3,119,618 | 1,611,474 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 5,004,697 | $ 2,368,007 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2021 | Sep. 30, 2020 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 10,648,769 | 7,340,421 |
Common stock, shares outstanding | 10,648,769 | 7,340,421 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | |
Income Statement [Abstract] | ||||
Revenue | $ 33,834 | $ 40,750 | $ 44,628 | $ 77,878 |
Cost of revenue | (12,465) | (27,002) | (24,724) | (52,167) |
Gross profit (loss) | 21,369 | 13,748 | 19,904 | 25,711 |
Operating expenses: | ||||
Sales and marketing expenses | 234,691 | 0 | 273,944 | 0 |
Product and technology expenses | 603,445 | 0 | 1,109,380 | 15,635 |
General and administrative expenses | 1,189,410 | 8,675 | 2,783,121 | 28,431 |
Total operating expenses | 2,027,546 | 8,675 | 4,166,445 | 44,066 |
Income (loss) from operations | (2,006,177) | 5,073 | (4,146,541) | (18,355) |
Other expenses: | ||||
Interest expense | (367,214) | 0 | (967,620) | 0 |
Foreign currency loss | (2,269) | 0 | (12,230) | 0 |
Total other expense | (369,483) | 0 | (979,850) | 0 |
Income (loss) before provision for income taxes | (2,375,660) | 5,073 | (5,126,391) | (18,355) |
Provision for income taxes | 0 | 0 | 0 | 0 |
Net income (loss) | $ (2,375,660) | $ 5,073 | $ (5,126,391) | $ (18,355) |
Net income (loss) per common share - basic and diluted | $ (0.22) | $ 0 | $ (0.52) | $ 0 |
Weighted average common shares outstanding - basic and diluted | 10,587,654 | 7,340,421 | 9,878,185 | 7,340,421 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity (Unaudited) - USD ($) | Common Stock | Additional Paid-In Capital | Retained Earnings / Accumulated Deficit | Total |
Beginning balance, shares at Sep. 30, 2019 | 7,340,421 | |||
Beginning balance, value at Sep. 30, 2019 | $ 7,340 | $ 953,660 | $ (876,271) | $ 84,729 |
Net income (loss) | (23,429) | (23,429) | ||
Ending balance, shares at Dec. 31, 2019 | 7,340,421 | |||
Ending balance, value at Dec. 31, 2019 | $ 7,340 | 953,660 | (899,700) | 61,300 |
Beginning balance, shares at Sep. 30, 2019 | 7,340,421 | |||
Beginning balance, value at Sep. 30, 2019 | $ 7,340 | 953,660 | (876,271) | 84,729 |
Net income (loss) | (18,355) | |||
Ending balance, shares at Mar. 31, 2020 | 7,340,421 | |||
Ending balance, value at Mar. 31, 2020 | $ 7,340 | 953,660 | (894,627) | 66,373 |
Beginning balance, shares at Dec. 31, 2019 | 7,340,421 | |||
Beginning balance, value at Dec. 31, 2019 | $ 7,340 | 953,660 | (899,700) | 61,300 |
Net income (loss) | 5,073 | 5,073 | ||
Ending balance, shares at Mar. 31, 2020 | 7,340,421 | |||
Ending balance, value at Mar. 31, 2020 | $ 7,340 | 953,660 | (894,627) | 66,373 |
Beginning balance, shares at Sep. 30, 2020 | 7,340,421 | |||
Beginning balance, value at Sep. 30, 2020 | $ 7,340 | 3,053,660 | (1,449,526) | 1,611,474 |
Shares issued for cash, shares | 2,000,000 | |||
Shares issued for cash, value | $ 2,000 | 3,646,071 | 3,648,071 | |
Stock-based compensation, shares | 683,334 | |||
Stock-based compensation, value | $ 683 | 1,321,343 | 1,322,026 | |
Shares issued due to conversion of notes payable, shares | 375,000 | |||
Shares issued due to conversion of notes payable, value | $ 375 | 187,125 | 187,500 | |
Stock warrants issued for asset acquisition | 57,252 | 57,252 | ||
Net income (loss) | (2,750,731) | (2,750,731) | ||
Ending balance, shares at Dec. 31, 2020 | 10,398,755 | |||
Ending balance, value at Dec. 31, 2020 | $ 10,398 | 8,265,451 | (4,200,257) | 4,075,592 |
Beginning balance, shares at Sep. 30, 2020 | 7,340,421 | |||
Beginning balance, value at Sep. 30, 2020 | $ 7,340 | 3,053,660 | (1,449,526) | 1,611,474 |
Net income (loss) | (5,126,391) | |||
Ending balance, shares at Mar. 31, 2021 | 10,648,769 | |||
Ending balance, value at Mar. 31, 2021 | $ 10,649 | 9,684,886 | (6,575,917) | 3,119,618 |
Beginning balance, shares at Dec. 31, 2020 | 10,398,755 | |||
Beginning balance, value at Dec. 31, 2020 | $ 10,398 | 8,265,451 | (4,200,257) | 4,075,592 |
Shares issued for cash, shares | 250,014 | |||
Shares issued for cash, value | $ 251 | 719,435 | 719,686 | |
Stock-based compensation, value | 700,000 | 700,000 | ||
Net income (loss) | (2,375,660) | (2,375,660) | ||
Ending balance, shares at Mar. 31, 2021 | 10,648,769 | |||
Ending balance, value at Mar. 31, 2021 | $ 10,649 | $ 9,684,886 | $ (6,575,917) | $ 3,119,618 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Cash flow from operating activities: | ||
Net loss | $ (5,126,391) | $ (18,355) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Amortization of debt discount | 867,593 | 0 |
Depreciation expense | 12,346 | 0 |
Stock-based compensation | 2,022,026 | 0 |
Bad debt expense | 50,932 | 0 |
Gain on cryptocurrency settlement | (35,140) | (2,428) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (35,251) | (76,755) |
Prepaid expenses | (53,926) | 0 |
Accounts payable and accrued liabilities | 502,268 | 73,192 |
Accounts payable - related parties | 2,340 | 0 |
Other assets | (37,294) | 0 |
Deferred revenue | (75,900) | 0 |
Liabilities to users | 32,924 | 2,783 |
Net cash used in operating activities | (1,873,473) | (21,563) |
Cash flow from investing activities: | ||
Purchase of software and equipment | (90,899) | 0 |
Purchase of other long term assets | (133,770) | 0 |
Net cash used by investing activities | (224,669) | 0 |
Cash flow from financing activities: | ||
Proceeds from equity issuance, net of costs of capital | 4,367,757 | 0 |
Net cash provided by financing activities | 4,367,757 | 0 |
NET CHANGE IN CASH | 2,269,615 | (21,563) |
CASH AT BEGINNING OF PERIOD | 0 | 67,717 |
CASH AT END OF PERIOD | 2,269,615 | 46,154 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 0 | 0 |
Cash paid for income taxes | 0 | 0 |
Non-cash transactions | ||
Stock warrant issued for asset acquisition | 19,179 | 0 |
Stock issued for conversion of notes payable | $ 187,500 | $ 0 |
1. Organization, Nature of Oper
1. Organization, Nature of Operations and Going Concern | 6 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization, Nature of Operations and Going Concern | NOTE 1 – ORGANIZATION, NATURE OF OPERATIONS AND GOING CONCERN Organization Esports Technologies, Inc. (“Esports Tech”) was formed on September 24, 2020 as a Nevada corporation. Esports Tech is a technology company creating and operating platforms focused on esports and competitive gaming. The Company operates under a Curacao gaming sublicense and can provide online betting services to various countries around the world. The majority of the Company’s customers are based in the Philippines. The Company’s consolidated financial statements include its accounts and the accounts of its 100% owned subsidiaries, namely Global E-Sports Entertainment Group, LLC (“Global E-Sports”), ESEG Limited (“ESEG”) and Gogawi Entertainment Group (“Gogawi”) (collectively referred to as the “Company,” “we,” “our,” or “us”). Global E-Sports, a Nevada limited liability company, was incorporated in Nevada on June 28, 2016. ESEG, a Belize company was incorporated on October 31, 2016. Gogawi, a Cypress company was incorporated on December 8, 2018 and has always been a wholly owned subsidiary of ESEG. On December 8, 2020, the Company incorporated Esportsbook Technologies Limited (“Esportsbook”) in Ireland as a wholly-owned subsidiary of Esports Tech. All amounts included in this Form 10-Q are expressed in U.S. Dollars, unless otherwise noted. Going Concern The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company has recurring losses and generated negative cash flows from operations since inception. In April 2021, the Company completed its Initial Public Offering (“IPO”) and issued 2,400,000 shares of common stock for gross cash proceeds of $14,400,000. See note 9 for further information. Impact of COVID-19 The outbreak of the 2019 novel coronavirus disease (“COVID-19”), which was declared a global pandemic by the World Health Organization on March 11, 2020, and the related responses by public health and governmental authorities to contain and combat its outbreak and spread, has severely impacted the U.S. and world economies. Economic recessions, including those brought on by the COVID-19 outbreak may have a negative effect on the demand for the Company’s products and the Company’s operating results. The range of possible impacts on the Company’s business from the coronavirus pandemic could include: (i) changing demand for the Company’s online betting products; and (ii) increasing contraction in the capital markets. |
2. Summary of Significant Accou
2. Summary of Significant Accounting Policies | 6 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The significant accounting policies followed in the preparation of the consolidated financial statements are as follows: Basis of Presentation The accompanying unaudited financial statements of the Company, include the accounts of the Company and its wholly-owned subsidiaries, and have been prepared in accordance with generally accepted accounting principles accepted in the United States (“U.S. GAAP”) for interim unaudited financial information. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The unaudited financial statements include all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary in order to make the condensed financial statements not misleading. Operating results for the three and six months ended March 31, 2021 are not necessarily indicative of the final results that may be expected for the year ended September 30, 2021. For more complete financial information, these unaudited financial statements should be read in conjunction with the audited consolidated financial statements for the year ended September 30, 2020 included in our Form S-1 filed with the SEC. Notes to the consolidated financial statements which would substantially duplicate the disclosures contained in the audited consolidated financial statements for the most recent fiscal period, as reported in the Form S-1, have been omitted. All intercompany accounts, transactions and balances have been eliminated in consolidation. Certain reclassifications have been made to prior period amounts to conform to the current year presentation. Intangible Assets Cryptocurrencies There is currently no specific guidance under GAAP or alternative accounting framework for the accounting for cryptocurrencies recognized as revenue or held, and management has exercised significant judgment in determining the appropriate accounting treatment. In the event authoritative guidance is enacted by the FASB, the Company may be required to change its policies, which could have an effect on the Company’s consolidated financial position and results from operations. Cryptocurrencies held are accounted for as an indefinite-lived intangible asset under ASC 350, Intangible – Goodwill and Other The Company uses its cryptocurrencies to pay vendors and users. The Company also receives payments on its receivables and player deposits in cryptocurrency. Gains and losses realized upon settlement of cryptocurrencies are also recorded in general and administrative expense in our consolidated statements of operations. Other Intangible Assets The Company’s other intangible asset consist of internet domain names, which are an indefinite-lived intangible. An intangible asset with an indefinite useful life is not amortized but assessed for impairment annually, or more frequently, when events or changes in circumstances occur indicating that it is more likely than not that the indefinite-lived asset is impaired. Impairment exists when the carrying amount exceeds its fair value. In testing for impairment, the Company has the option to first perform a qualitative assessment to determine whether it is more likely than not that an impairment exists. If it is determined that it is more likely than not that an impairment exists, a quantitative impairment test is not necessary. If the Company concludes otherwise, it is required to perform a quantitative impairment test. To the extent an impairment loss is recognized, the loss establishes the new cost basis of the asset. Subsequent reversal of impairment losses is not permitted. Liabilities to Users The Company records liabilities for user account balances at a given reporting period based on deposits made by players either to the Company or the sales affiliate, less any losses on wagers and payout made to players. Liabilities to users amounts are not required to be backed by cash reserves of the Company. Revenue Recognition The Company recognizes revenue in accordance with ASC Topic 606, Revenue From Contracts With Customers • Identification of the contract with a customer • Identification of the performance obligations in the contract • Determination of the transaction price • Allocation of the transaction price to the performance obligations in the contract • Recognition of revenue when, or as, the Company satisfies a performance obligation No single customer exceeded more than 10% of revenue during the three and six months ended March 31, 2021 and 2020. In addition, no disaggregation of revenue is required because all current revenue is generated from gaming revenue. Performance Obligations The Company operates an online betting platform allowing users to place wagers on a variety of live sporting events and esports events. Each wager placed by users create a single performance obligation for the Company to administer each event wagered. Gross gaming revenue is the aggregate of gaming wins and losses based on results of each event that customers wager bets on. Variable commission fees are paid to sales affiliates based on a percentage of revenue generated from the affiliate. The commissions rebated to affiliates are recorded as a reduction to gross gaming revenue. Cost of Revenue Cost of revenue consists of third-party costs associated with the betting software platform and amortization of capitalized software costs. Recently Issued Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standard Board (“FASB”) or other standard setting bodies that the Company adopts as of the specified effective date. The Company does not believe that the impact of recently issued standards that are not yet effective will have a material impact on the Company’s financial position or results of operations upon adoption. |
3. Long-Lived Assets
3. Long-Lived Assets | 6 Months Ended |
Mar. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Long-Lived Assets | NOTE 3 – LONG-LIVED ASSETS Software and equipment The Company’s software and equipment consisted of the following as of March 31, 2021 and September 30, 2020: March 31, 2021 September 30, 2020 Software $ 148,151 $ – Total software and equipment 148,151 – Accumulated depreciation (12,346 ) – Software and equipment, net $ 135,805 $ – On November 5, 2020, the Company entered into an asset purchase agreement with a third party to acquire certain proprietary technology data. The Company made a cash payment of $61,425 and granted warrants to purchase 32,000 shares of common stock at an exercise price of $0.25 per share for a period of five years. The fair value of the warrants was estimated to be $57,252 as of the grant date. The total consideration paid of $118,677 is included as part of software costs within property and equipment on the Company’s consolidated balance sheet. The Company also entered into an employment agreement with the seller, effective November 1, 2020. The employee will be compensated at a rate of $110,000 per year and will receive a common stock award of 100,000 shares, which vest annually over four years. The software costs above relate to acquired components of the Company’s new platform which is being depreciated over an expected useful life of two years. Intangible Assets On September 1, 2020, the Company’s wholly-owned subsidiary, ESEG, entered into domain purchase agreements to acquire the rights to certain domain names from third parties. The cost to acquire the domain names was $2,239,606, based on the estimated fair value of the consideration transferred to the sellers. ESEG issued notes payable with a combined principal amount of $2,100,000, which were to mature on March 1, 2022, bearing interest at 10%. These notes were exchanged for notes of the Company in September 2020. The Company also agreed to pay a total of $675,000 on September 1, 2025, with no interest. The Company estimated discount of these liabilities totaling $535,394 at the date of the transaction, to be amortized over the maturity period of the liabilities. The domain names were recorded as an intangible asset with an indefinite useful life. The Company’s management evaluated the domain names at September 30, 2020 and determined no impairment was necessary. The following table presents the activities of the Company’s cryptocurrency holdings for the three and six months ended March 31, 2021: Cryptocurrency at September 30, 2020 $ 44,562 Additions of cryptocurrency 18,276 Payments of cryptocurrency (89,197 ) Gain on cryptocurrency 35,140 Cryptocurrency at March 31, 2021 $ 8,781 Additions of cryptocurrency during the six months ended March 31, 2021 represent settlement of outstanding accounts receivable of $18,158 and net deposits from players of $118. Payments of cryptocurrency during the six months ended March 31, 2021 included payments of accounts payable and accrued expenses of $89,197. Use of cryptocurrency to settle receivables and payables during the period are reflected as a component of changes in operating assets and liabilities in the consolidated statement of cash flows. Other Long-Term Assets On October 1, 2020, the Company entered into an option agreement which gives the Company the right to acquire a license for proprietary technology related to online betting. The Company paid $133,770 upon execution of the option agreement, and in the event the option is exercised and the license agreement is executed, the Company will pay an additional £200,000 (or approximately $270,000 as of March 31, 2021) in cash and issue 65,000 shares of common stock. The option was to initially expire on May 1, 2021, and was extended until May 6, 2021. The option was exercised on or about May 3, 2021. The Company recorded an other long-term asset of $133,770 related to the initial payment. |
4. Convertible Notes Payable an
4. Convertible Notes Payable and Other Long-Term Liabilities | 6 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Convertible Notes Payable and Other Long-Term Liabilities | NOTE 4 – CONVERTIBLE NOTES PAYABLE AND OTHER LONG-TERM LIABILITIES On September 1, 2020, ESEG entered into three promissory notes, with a combined principal amount of $2,100,000. The notes bore interest at the rate of 10% per annum and matured on March 1, 2022. The Company also agreed to pay two of the lenders a total of $675,000 on September 1, 2025, bearing no interest. The Company estimated total debt discount of these liabilities to be $535,394 at the date of the transaction, of which $279,516 related to the promissory notes payable, and $255,878 related to the other long-term liabilities. The discounts will be amortized over the maturity period of each liability. As of March 31, 2021 and September 30, 2020, the carrying amount of the other long-term liabilities was $442,680 and $422,409, respectively, which is net of the remaining discount totaling $232,320 and $252,591, respectively. The carrying amount of the convertible notes payable and associated discount is further discussed below. On September 26, 2020, the Company assumed the notes payable with principal of $2,100,000 from ESEG. In connection with this assumption, Esports Tech issued each of the lenders a conversion option at a fixed price of $0.50 per share and issued 2,015,000 warrants to purchase shares of the Company’s common stock at an exercise price of $0.30 per share, each with a term of five years. The convertible notes bear interest at 10% per annum and mature on March 1, 2022. The holder may convert the note into shares of common stock at any time throughout the maturity date, to the extent and provided that no holder of the notes was or will be permitted to convert such notes so long as it or any of its affiliates would beneficially own in excess of 4.99% of the Company’s common stock after such conversion. The Company determined that the assignment of the notes payable by the subsidiary to the parent company was an extinguishment of the original notes payable due to the addition of a substantive conversion feature, and the Company recognized a loss on extinguishment of $265,779 during the year ended September 30, 2020. The Company evaluated the conversion option and concluded a beneficial conversion feature was present at issuance. The Company recognized the beneficial conversion feature and relative fair value of the warrants as a debt discount and additional paid in capital. The fair value of the warrants at the grant date was estimated using a Black-Scholes model and the following assumptions: 1) volatility of approximately 85% based on a peer group of companies; 2) dividend yield of 0%; 3) risk-free rate of 0.26%; and 4) an expected term of five years. The $2,100,000 debt discount will be amortized through the maturity date of the convertible notes payable. During the three months ended December 31, 2020, a total of $187,500 of principal was converted into 375,000 shares of common stock. As of March 31, 2021, the balance due under these notes, net of unamortized discount of $1,136,012, is $776,488, with accrued interest of $116,774. During the six months ended March 21, 2021, the Company recorded a charge of $867,593 in the accompanying consolidated statement of operations from the amortization of its debt discount. |
5. Stockholders' Equity
5. Stockholders' Equity | 6 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Stockholders' Equity | NOTE 5 – STOCKHOLDERS’ EQUITY The Company is currently authorized to issue up to 100,000,000 shares of common stock with a par value of $0.001. In addition, the Company is authorized to issue 10,000,000 shares of preferred stock with a par value of $0.001. The specific rights of the preferred stock, when so designated, shall be determined by the board of directors. During the three months ended December 31, 2020, the Company received gross cash proceeds of $4,000,000 in exchange for 2,000,000 shares of common stock. In conjunction with this fundraising, broker commission and expenses of $351,929 were paid and 173,625 common stock warrants with an exercise price of $2.00 and a five-year term were issued. The fair value of the warrants issued in connection with the financing was estimated to be $228,500 as discussed below. In January 2021, the Company sold 250,014 shares of common stock to investors for $3 per share, receiving gross proceeds of $750,042. The company paid $30,314 of broker fees and commissions related to this fundraising and issued 8,750 warrants to purchase common stock with an exercise price of $3 per share and a term of 5 years. The fair value of the warrants issued in connection with the financing was estimated to be $228,500 as discussed below. In February 2021, the Company entered into an agreement with a consultant where the Company agreed to issue warrants to purchase 4,166 shares of stock with a term of 5 years at an exercise price of $3 per share, and pay $37,500 of cash for services rendered. The consultant will also receive $50,000 of consideration per year for an additional two years in a combination of cash and common stock warrants. In April 2021, the Company completed its IPO and issued 2,400,000 shares of common stock for gross cash proceeds of $14,400,000. See note 9 for further information. 2020 Stock Plan In December 2020, the Company adopted the Esports Technologies, Inc. 2020 Stock Plan, or the 2020 Plan. The 2020 Plan is a stock-based compensation plan that provides for discretionary grants of stock options, stock awards, stock unit awards and stock appreciation rights to key employees, non-employee directors and consultants. Under the 2020 Plan, the aggregate value of all compensation granted or paid to any individual for service as a non-employee director with respect to any calendar year, including awards granted under the 2020 Plan and cash fees paid to such non-employee director, will not exceed $300,000 in total value. For purposes of this limitation, the value of awards is calculated based on the grant date fair value of such awards for financial reporting purposes. The number of shares of the common stock that may be issued under the 2020 Plan is 4,000,000. As of March 31, 2021, the Company had awarded a total 3,526,598 shares under the 2020 Plan, with 473,402 remaining under the 2020 Plan. Common Stock Awards During the six months ended March 31, 2021, the Company agreed to award a total of 1,110,250 restricted stock units that convert into common stock to various employees and officers under the 2020 Plan. Of the restricted stock unit awards, 610,250 will vest annually over a period of two to four years, 300,000 will vest upon the completion of various performance goals related to the operations of the Company, and 200,000 shares of common stock underlying awards made to the Company’s CEO will vest equally upon reaching trailing twelve months revenue of $10 million and $20 million. The Company estimated the fair value of the awards at $2 per share based on recent sales of common stock for cash as described above. In November 2020, the Company entered into four consulting agreements under which the Company issued a total of 683,334 shares of common stock, which vest equally over terms ranging from three to twelve months. During the three and six months ended March 31, 2021, the Company recognized a total of $353,313 and $1,438,532 of stock-based compensation expense related to common stock awards and expects to recognize additional compensation cost of $2,148,636 upon vesting of all awards. Warrants As discussed above, the Company has issued common stock warrants in connection with its fundraising activities to brokers, an asset purchase agreement and convertible notes issued during the year ended September 30, 2020. The following table summarizes warrant activity during the three and six months ended March 31, 2021: Common Stock Warrants Shares Weighted Weighted Outstanding at September 30, 2020 2,015,000 $ 0.30 4.99 Granted 218,541 1.80 5.00 Cancelled – – – Expired – – – Exercised – – – Outstanding at March 31, 2021 2,233,541 $ 0.45 4.50 Exercisable at March 31, 2021 2,233,541 $ 0.45 4.50 The outstanding and exercisable common stock warrants had an estimated intrinsic value of $5,702,125. The Company estimated the fair value of the warrants using a Black-Scholes option pricing model and the following assumptions: 1) stock price of $2 to $3 per share; 2) dividend yield of 0%; 3) risk-free rate of between 0.18% and 0.52%; 4) expected term of between 2.5 and 5 years; 5) an exercise price of $0.25, $2 or $3 and 6) expected volatility of between 84.1% and 99.0% based on a peer group of public companies. The warrants granted to brokers in connection with sales of common stock during the six months ended March 31, 2021 had an estimated fair value of $247,108 which was reflected as a cost of capital, warrants granted to consultants for services had a fair value of $8,819, and the warrants granted in connection with the asset purchase agreement had an estimated fair value of $57,252. Options During the three months ended March 31, 2021, the Company entered into various agreements with employees, consultants and directors whereby the Company agreed to award a total of 402,000 common stock options, including 150,000 to two members of the Board of Directors under the 2020 Plan. These awards vest over a period of six months to four years, with 20,000 options issued to a consultant vesting immediately. During the three months ended December 31, 2020, the Company entered into various agreements with employees and consultants whereby the Company agreed to award a total of 2,014,348 common stock options, including 90,000 to consultants and 100,000 to a member of the Board of Directors under the 2020 Plan. Of the total, 1,390,000 vest equally over periods of between one and four years, 70,313 vested upon completion of the Company’s IPO, 200,000 to the Company’s Chief Operating Officer would have vested in the event that the Company’s IPO raised gross proceeds of at least $18 million (as the IPO proceeds were less than $18 million, these shares did not vest), 16,785 vest upon the earlier of 1 year or the completion of the Company’s IPO, and 57,250 to the Company’s prior interim CFO vested upon the hiring of the Company’s full time CFO. The following table summarizes option activity during the six months ended March 31, 2021: Common Stock Options Shares Weighted Weighted Outstanding at September 30, 2020 – $ – – Granted 2,416,348 0.99 9.23 Cancelled – – – Expired – – – Exercised – – – Outstanding at March 31, 2021 2,416,348 $ 0.99 8.87 Exercisable at March 31, 2021 77,250 $ 0.96 8.71 During the three and six months ended March 31, 2021, the Company recognized stock-based compensation expense of $337,869 and $574,676 related to common stock options awarded. The exercisable common stock options had an intrinsic value as of March 31, 2021 of $157,438. The Company expects to recognize an additional $3,739,510 of compensation cost related to stock options expected to vest. The Company estimated the fair value of the stock options awarded using a Black-Scholes option pricing model and the following assumptions: 1) stock price of $2 to $3 per share; 2) dividend yield of 0%; 3) risk-free rate of between 0.22% and 0.90%; 4) expected term of between 3.5 and 6.25 years; 5) an exercise price of $0.25, $2 or $3 and 6) expected volatility of between 82.3% and 95.33% based on a peer group of public companies. |
6. Commitments and Contingencie
6. Commitments and Contingencies | 6 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 6 – COMMITMENTS AND CONTINGENCIES On September 2, 2020, the Company entered into a financial advisor agreement with Boustead Securities LLC, the representative of the underwriters in the Company’s initial public offering, to provide services related to fundraising on the Company’s planned public listing. The Company agreed to pay the financial advisor a success fee of 4% of any gross proceeds from any debt financing, and a 7% success fee related to any equity or convertible debt financing, subject to customary approval by the regulatory authorities. In April 2021, the Company completed its IPO and issued 2,400,000 shares of common stock for gross cash proceeds of $14,400,000. The Company paid underwriting fees of $820,800 and issued 168,000 warrants to purchase shares of common stock at a price of $7.20 per share for a period of five years. On September 26, 2020, the Company entered into a consulting agreement with a registered foreign broker dealer for fundraising services and paid 10% of any gross proceeds through capital raises from non-US investors introduced by the consultant, up to a maximum payment to the consultant of $200,000 and the consultant also received warrants to purchase shares of the Company’s common stock at an exercise price of $2.00 per share. These warrants were exercised in April 2021 and were converted into 62,386 shares of the Company stock. |
7. Loss Per Common Share
7. Loss Per Common Share | 6 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Loss Per Common Share | NOTE 7 –LOSS PER COMMON SHARE The basic net loss per common share is calculated by dividing the Company's net loss available to common shareholders by the weighted average number of common shares during the year. The diluted net loss per common share is calculated by dividing the Company's net loss available to common shareholders by the diluted weighted average number of common shares outstanding during the year. The diluted weighted average number of common shares outstanding is the basic weighted number of common shares adjusted for any potentially dilutive debt or equity. Common shares issuable under convertible debt, stock options and common stock warrants were excluded from the calculation of diluted net loss per share due to their antidilutive effect. Three Months Ended Six Months Ended March 31, 2021 March 31, 2020 March 31, 2021 March 31, 2020 Numerator Net income (loss) $ (2,375,660 ) $ 5,073 $ (5,126,391 ) $ (18,355 ) Denominator Basic and Diluted weighted average common shares 10,587,654 7,340,421 9,878,185 7,340,421 Basic and diluted net income (loss) per common share $ (0.22 ) $ 0.00 $ (0.52 ) $ (0.00 ) |
8. Transaction with Related Par
8. Transaction with Related Parties | 6 Months Ended |
Mar. 31, 2021 | |
Related Party Transactions [Abstract] | |
Transaction with Related Parties | NOTE 8 – TRANSACTION WITH RELATED PARTIES As of March 31, 2021, the Company owed $155,228 to Gogawi Inc. (a company controlled by certain initial shareholders of the Company) (see note 1). At September 30, 2020 the amounts owed to these related parties was $152,888. The advances are due on demand and are non-interest bearing. In May 2021, the Company repaid the advances in full. On November 10, 2020, the Company entered into an employment agreement with Michal Barden, a family member of the Company’s Chief Operating Officer, to serve as the Company’s marketing director. The employment agreement provides for an annual salary of $132,000, a technology allowance of $5,000, and an award of 30,000 shares of common stock in the Company, vesting in four equal annual installments. |
9. Subsequent Events
9. Subsequent Events | 6 Months Ended |
Mar. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 9– SUBSEQUENT EVENTS In April 2021, the Company completed its IPO and issued 2,400,000 shares of common stock for gross cash proceeds of $14,400,000. The Company paid underwriting fees of $820,800 and issued 168,000 warrants to purchase shares of common stock at a price of $7.20 per share for a period of five years. |
2. Summary of Significant Acc_2
2. Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited financial statements of the Company, include the accounts of the Company and its wholly-owned subsidiaries, and have been prepared in accordance with generally accepted accounting principles accepted in the United States (“U.S. GAAP”) for interim unaudited financial information. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The unaudited financial statements include all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary in order to make the condensed financial statements not misleading. Operating results for the three and six months ended March 31, 2021 are not necessarily indicative of the final results that may be expected for the year ended September 30, 2021. For more complete financial information, these unaudited financial statements should be read in conjunction with the audited consolidated financial statements for the year ended September 30, 2020 included in our Form S-1 filed with the SEC. Notes to the consolidated financial statements which would substantially duplicate the disclosures contained in the audited consolidated financial statements for the most recent fiscal period, as reported in the Form S-1, have been omitted. All intercompany accounts, transactions and balances have been eliminated in consolidation. Certain reclassifications have been made to prior period amounts to conform to the current year presentation. |
Intangible Assets | Intangible Assets Cryptocurrencies There is currently no specific guidance under GAAP or alternative accounting framework for the accounting for cryptocurrencies recognized as revenue or held, and management has exercised significant judgment in determining the appropriate accounting treatment. In the event authoritative guidance is enacted by the FASB, the Company may be required to change its policies, which could have an effect on the Company’s consolidated financial position and results from operations. Cryptocurrencies held are accounted for as an indefinite-lived intangible asset under ASC 350, Intangible – Goodwill and Other The Company uses its cryptocurrencies to pay vendors and users. The Company also receives payments on its receivables and player deposits in cryptocurrency. Gains and losses realized upon settlement of cryptocurrencies are also recorded in general and administrative expense in our consolidated statements of operations. Other Intangible Assets The Company’s other intangible asset consist of internet domain names, which are an indefinite-lived intangible. An intangible asset with an indefinite useful life is not amortized but assessed for impairment annually, or more frequently, when events or changes in circumstances occur indicating that it is more likely than not that the indefinite-lived asset is impaired. Impairment exists when the carrying amount exceeds its fair value. In testing for impairment, the Company has the option to first perform a qualitative assessment to determine whether it is more likely than not that an impairment exists. If it is determined that it is more likely than not that an impairment exists, a quantitative impairment test is not necessary. If the Company concludes otherwise, it is required to perform a quantitative impairment test. To the extent an impairment loss is recognized, the loss establishes the new cost basis of the asset. Subsequent reversal of impairment losses is not permitted. |
Liabilities to Users | Liabilities to Users The Company records liabilities for user account balances at a given reporting period based on deposits made by players either to the Company or the sales affiliate, less any losses on wagers and payout made to players. Liabilities to users amounts are not required to be backed by cash reserves of the Company. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue in accordance with ASC Topic 606, Revenue From Contracts With Customers • Identification of the contract with a customer • Identification of the performance obligations in the contract • Determination of the transaction price • Allocation of the transaction price to the performance obligations in the contract • Recognition of revenue when, or as, the Company satisfies a performance obligation No single customer exceeded more than 10% of revenue during the three and six months ended March 31, 2021 and 2020. In addition, no disaggregation of revenue is required because all current revenue is generated from gaming revenue. Performance Obligations The Company operates an online betting platform allowing users to place wagers on a variety of live sporting events and esports events. Each wager placed by users create a single performance obligation for the Company to administer each event wagered. Gross gaming revenue is the aggregate of gaming wins and losses based on results of each event that customers wager bets on. Variable commission fees are paid to sales affiliates based on a percentage of revenue generated from the affiliate. The commissions rebated to affiliates are recorded as a reduction to gross gaming revenue. |
Cost of Revenue | Cost of Revenue Cost of revenue consists of third-party costs associated with the betting software platform and amortization of capitalized software costs. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standard Board (“FASB”) or other standard setting bodies that the Company adopts as of the specified effective date. The Company does not believe that the impact of recently issued standards that are not yet effective will have a material impact on the Company’s financial position or results of operations upon adoption. |
3. Long-Lived Assets (Tables)
3. Long-Lived Assets (Tables) | 6 Months Ended |
Mar. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of software and equipment | March 31, 2021 September 30, 2020 Software $ 148,151 $ – Total software and equipment 148,151 – Accumulated depreciation (12,346 ) – Software and equipment, net $ 135,805 $ – |
Cryptocurrency activity table | Cryptocurrency at September 30, 2020 $ 44,562 Additions of cryptocurrency 18,276 Payments of cryptocurrency (89,197 ) Gain on cryptocurrency 35,140 Cryptocurrency at March 31, 2021 $ 8,781 |
5. Stockholders' Equity (Tables
5. Stockholders' Equity (Tables) | 6 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Schedule of warrant activity | Common Stock Warrants Shares Weighted Weighted Outstanding at September 30, 2020 2,015,000 $ 0.30 4.99 Granted 218,541 1.80 5.00 Cancelled – – – Expired – – – Exercised – – – Outstanding at March 31, 2021 2,233,541 $ 0.45 4.50 Exercisable at March 31, 2021 2,233,541 $ 0.45 4.50 |
Schedule of option activity | Common Stock Options Shares Weighted Weighted Outstanding at September 30, 2020 – $ – – Granted 2,416,348 0.99 9.23 Cancelled – – – Expired – – – Exercised – – – Outstanding at March 31, 2021 2,416,348 $ 0.99 8.87 Exercisable at March 31, 2021 77,250 $ 0.96 8.71 |
7. Loss Per Common Share (Table
7. Loss Per Common Share (Tables) | 6 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Calculation of earnings per share | Three Months Ended Six Months Ended March 31, 2021 March 31, 2020 March 31, 2021 March 31, 2020 Numerator Net income (loss) $ (2,375,660 ) $ 5,073 $ (5,126,391 ) $ (18,355 ) Denominator Basic and Diluted weighted average common shares 10,587,654 7,340,421 9,878,185 7,340,421 Basic and diluted net income (loss) per common share $ (0.22 ) $ 0.00 $ (0.52 ) $ (0.00 ) |
1. Organization, Nature of Op_2
1. Organization, Nature of Operations and Going Concern (Details Narrative) - Subsequent Event [Member] - I P O [Member] | 7 Months Ended |
Apr. 30, 2021USD ($)shares | |
Stock issued new, shares | shares | 2,400,000 |
Proceeds from issuance of stock | $ | $ 14,400,000 |
3. Long-Lived Assets (Details -
3. Long-Lived Assets (Details - Software) - USD ($) | Mar. 31, 2021 | Sep. 30, 2020 |
Software | $ 148,151 | $ 0 |
Accumulated depreciation | (12,346) | 0 |
Software and equipment, net | 135,805 | 0 |
Software and Equipment [Member] | ||
Software | $ 148,151 | $ 0 |
3. Long-Lived Assets (Details_2
3. Long-Lived Assets (Details - Crytocurrency) | 6 Months Ended |
Mar. 31, 2021USD ($) | |
Property, Plant and Equipment [Abstract] | |
Cryptocurrency, beginning balance | $ 44,562 |
Additions of cryptocurrency | 18,276 |
Payments of cryptocurrency | (89,197) |
Gain on cryptocurrency | 35,140 |
Cryptocurrency, ending balance | $ 8,781 |
3. Long-Lived Assets (Details N
3. Long-Lived Assets (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |
Nov. 05, 2020 | Mar. 31, 2021 | Mar. 31, 2021 | Mar. 31, 2020 | Sep. 30, 2020 | |
Payment for technology data | $ 90,899 | $ 0 | |||
Unamortized discount | $ 1,136,012 | 1,136,012 | |||
Payment for option | 133,770 | $ 0 | |||
Other long-term assets | 133,770 | 133,770 | $ 0 | ||
Additions of cryptocurrency | 18,276 | ||||
Payments of cryptocurrency | 89,197 | ||||
Accounts Receivable [Member] | |||||
Additions of cryptocurrency | 18,158 | ||||
Net Deposits [Member] | |||||
Additions of cryptocurrency | 118 | ||||
Accounts Payable and Accrued Expenses [Member] | |||||
Payments of cryptocurrency | 89,197 | ||||
Online Betting Technology [Member] | |||||
Payment for option | 133,770 | ||||
Other long-term assets | $ 133,770 | $ 133,770 | |||
Internet Domain Names [Member] | |||||
Debt interest rate | 10.00% | ||||
Debt maturity date | Mar. 1, 2022 | ||||
Debt balloon payment | $ 675,000 | ||||
Debt balloon payment date | Sep. 1, 2025 | ||||
Unamortized discount | $ 535,394 | ||||
Warrants [Member] | |||||
Warrants issued | 218,541 | ||||
Warrant exercise price | $ 0.45 | $ 0.45 | $ 0.30 | ||
Technology Data [Member] | |||||
Payment for technology data | $ 61,425 | ||||
Total consideration paid | $ 118,677 | ||||
Stock issued for asset acquisition | 100,000 | ||||
Technology Data [Member] | Warrants [Member] | |||||
Warrants issued | 32,000 | ||||
Warrant exercise price | $ 0.25 | ||||
Fair value of warrants granted | $ 57,252 |
4. Convertible Notes Payable _2
4. Convertible Notes Payable and Other Long-Term Liabilities (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 11 Months Ended | 12 Months Ended | ||
Dec. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | Sep. 01, 2020 | Sep. 30, 2020 | Sep. 26, 2020 | |
Notes payable | $ 776,488 | |||||
Debt discount | 1,136,012 | |||||
Debt converted, amount converted | $ 187,500 | |||||
Debt converted, shares issued | 375,000 | |||||
Accrued interest | 116,774 | |||||
Amortization of debt discount | $ 867,593 | $ 0 | ||||
Warrants [Member] | ||||||
Warrant exercise price | $ 0.45 | $ 0.30 | ||||
ESEG Promissory Notes [Member] | ||||||
Notes payable | $ 2,100,000 | |||||
Debt interest rate | 10.00% | |||||
Debt maturity date | Mar. 1, 2022 | |||||
Debt discount | $ 535,394 | |||||
Loss on extinguishment of debt | $ (265,779) | |||||
ESEG Promissory Notes [Member] | Warrants [Member] | ||||||
Warrants issued | 2,015,000 | |||||
Warrant exercise price | $ 0.30 | |||||
Warrant term | 5 years | |||||
ESEG Promissory Notes [Member] | Promissory Notes Payable [Member] | ||||||
Debt discount | 279,516 | |||||
ESEG Promissory Notes [Member] | Other Long-Term Liabilities [Member] | ||||||
Notes payable | $ 442,680 | 42,240,009 | ||||
Debt discount | $ 232,320 | $ 255,878 | $ 252,591 |
5. Stockholders' Equity (Detail
5. Stockholders' Equity (Details - Warrant activity) - Warrants [Member] | 6 Months Ended |
Mar. 31, 2021$ / sharesshares | |
Number of Warrants | |
Number of Warrants Outstanding, Beginning | shares | 2,015,000 |
Number of Warrants Granted | shares | 218,541 |
Number of Warrants Outstanding, Ending | shares | 2,233,541 |
Number of Warrants Exercisable, Ending | shares | 2,233,541 |
Weighted Average Exercise Price | |
Weighted Average Exercise Price Outstanding, Beginning | $ / shares | $ 0.30 |
Weighted Average Exercise Price Granted | $ / shares | 1.80 |
Weighted Average Exercise Price Outstanding, Ending | $ / shares | 0.45 |
Weighted Average Exercise Price Exercisable | $ / shares | $ 0.45 |
Weighted Average Remaining Life | |
Weighted Average Remaining Life, beginning | 4 years 11 months 26 days |
Weighted Average Remaining Life, granted | 5 years |
Weighted Average Remaining Life, ending | 4 years 6 months |
Weighted Average Remaining Life, exercisable | 4 years 6 months |
5. Stockholders' Equity (Deta_2
5. Stockholders' Equity (Details - Option Activity) - Stock Options [Member] | 6 Months Ended |
Mar. 31, 2021$ / sharesshares | |
Number of Options | |
Number of Options Outstanding, Beginning | 0 |
Number of Options Granted | 2,416,348 |
Number of Options Outstanding, Ending | 2,416,348 |
Number of Options Exercisable, Ending | 77,250 |
Weighted Average Exercise Price | |
Weighted Average Exercise Price Granted | $ / shares | $ 0.99 |
Weighted Average Exercise Price Outstanding, Ending | $ / shares | 0.99 |
Weighted Average Exercise Price Exercisable, Ending | $ / shares | $ 0.96 |
Weighted Average Remaining Contractual Term | |
Weighted Average Remaining Contractual Term Outstanding | 8 years 10 months 14 days |
Weighted Average Remaining Contractual Term Granted | 9 years 2 months 23 days |
Weighted Average Remaining Contractual Term Exercisable | 8 years 8 months 16 days |
5. Stockholders' Equity (Deta_3
5. Stockholders' Equity (Details Narrative) - USD ($) | 2 Months Ended | 3 Months Ended | 4 Months Ended | 5 Months Ended | 6 Months Ended | 7 Months Ended | ||
Nov. 30, 2020 | Mar. 31, 2021 | Dec. 31, 2020 | Jan. 31, 2021 | Feb. 28, 2021 | Mar. 31, 2021 | Mar. 31, 2020 | Apr. 30, 2021 | |
Share-based compensation | $ 2,022,026 | $ 0 | ||||||
Asset Purchase Agreement [Member] | ||||||||
Fair value of warrants granted | $ 57,252 | |||||||
Restricted Stock [Member] | ||||||||
Stock awards granted | 1,110,250 | |||||||
Restricted Stock [Member] | Completion of Goals [Member] | ||||||||
Stock awards granted | 300,000 | |||||||
Restricted Stock [Member] | CEO Goals [Member] | ||||||||
Stock awards granted | 200,000 | |||||||
Common Stock Awards [Member] | ||||||||
Share-based compensation | $ 353,313 | $ 1,438,532 | ||||||
Share based compensation to be recognized | 2,148,636 | 2,148,636 | ||||||
Intrinsic value outstanding | 5,702,125 | $ 5,702,125 | ||||||
Stock Options [Member] | ||||||||
Stock granted under plan | 2,416,348 | |||||||
Share-based compensation | $ 337,869 | $ 574,676 | ||||||
Options granted | 402,000 | 2,014,348 | ||||||
Intrinsic value of options exercisable | $ 157,438 | 157,438 | ||||||
Share based compensation not yet recognized | $ 3,739,510 | $ 3,739,510 | ||||||
Stock Options [Member] | One to Four Years [Member] | ||||||||
Options to be vested | 1,390,000 | |||||||
Stock Options [Member] | Completion of IPO [Member] | ||||||||
Options to be vested | 70,313 | |||||||
Stock Options [Member] | COO Goals [Member] | ||||||||
Options to be vested | 200,000 | |||||||
Stock Options [Member] | Earlier of One Year [Member] | ||||||||
Options to be vested | 16,785 | |||||||
Stock Options [Member] | Hiring of CFO [Member] | ||||||||
Options to be vested | 57,250 | |||||||
2020 Stock Plan [Member] | ||||||||
Stock authorized under plan | 4,000,000 | 4,000,000 | ||||||
Stock granted under plan | 3,526,598 | |||||||
Shares remaining under plan | 473,402 | 473,402 | ||||||
Subsequent Event [Member] | I P O [Member] | ||||||||
Stock issued new, shares | 2,400,000 | |||||||
Proceeds from IPO | $ 14,400,000 | |||||||
Consultant [Member] | Stock Options [Member] | ||||||||
Options granted | 20,000 | |||||||
Consultant [Member] | Stock Options [Member] | Immediate [Member] | ||||||||
Options to be vested | 20,000 | 20,000 | ||||||
Brokers [Member] | ||||||||
Fair value of warrants granted | $ 247,108 | |||||||
Consultants [Member] | ||||||||
Fair value of warrants granted | $ 8,819 | |||||||
Consultants [Member] | Stock Options [Member] | ||||||||
Options granted | 90,000 | |||||||
Board Member [Member] | Stock Options [Member] | ||||||||
Options granted | 100,000 | |||||||
Two Board Members [Member] | Stock Options [Member] | ||||||||
Options granted | 150,000 | |||||||
Two Board Members [Member] | Stock Options [Member] | Six Months to Four Years [Member] | ||||||||
Options to be vested | 150,000 | 150,000 | ||||||
Common Stock | ||||||||
Proceeds from sale of stock | $ 4,000,000 | $ 750,042 | ||||||
Stock issued new, shares | 2,000,000 | 250,014 | ||||||
Payment of stock issuance costs | $ 351,929 | $ 30,314 | ||||||
Common Stock | Four Consulting Agreements [Member] | ||||||||
Stock awards granted | 683,334 | |||||||
Warrants [Member] | ||||||||
Warrants issued | 173,625 | 8,750 | ||||||
Warrant exercise price | $ 2 | $ 3 | ||||||
Warrant term | 5 years | 5 years | ||||||
Fair value of warrants granted | $ 228,500 | $ 228,500 | ||||||
Warrants [Member] | Consultant [Member] | ||||||||
Warrants issued | 4,166 | |||||||
Warrant exercise price | $ 3 | |||||||
Warrant term | 5 years | |||||||
Consulting expense | $ 37,500 |
6. Commitments and Contingenc_2
6. Commitments and Contingencies (Details Narrative) - Subsequent Event [Member] | 7 Months Ended |
Apr. 30, 2021USD ($)$ / sharesshares | |
Consulting Agreement | |
Warrants converted, shares issued | 62,386 |
I P O [Member] | Underwriters [Member] | |
Payment of stock issuance costs | $ | $ 820,800 |
Warrants issued | 168,000 |
Warrant term | 5 years |
Warrant exercise price | $ / shares | $ 7.20 |
7. Loss Per Common Share (Detai
7. Loss Per Common Share (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2021 | Mar. 31, 2020 | |
Numerator | ||||||
Net income (loss) | $ (2,375,660) | $ (2,750,731) | $ 5,073 | $ (23,429) | $ (5,126,391) | $ (18,355) |
Denominator | ||||||
Basic and Diluted weighted average common shares | 10,587,654 | 7,340,421 | 9,878,185 | 7,340,421 | ||
Basic and diluted net income (loss) per common share | $ (0.22) | $ 0 | $ (0.52) | $ 0 |
8. Transaction with Related P_2
8. Transaction with Related Parties (Details Narrative) - USD ($) | Mar. 31, 2021 | Sep. 30, 2020 |
Gogawi [Member] | ||
Due to related parties | $ 155,228 | $ 152,888 |