Cover
Cover - USD ($) | 12 Months Ended | ||
Sep. 30, 2021 | Dec. 16, 2021 | Mar. 31, 2021 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Sep. 30, 2021 | ||
Document Fiscal Period Focus | FY | ||
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 Tax Identification Number | 85-3201309 | ||
Entity Incorporation, State or Country Code | NV | ||
Entity Address, Address Line One | 197 California Ave. Ste. 302 | ||
Entity Address, City or Town | Las Vegas | ||
Entity Address, State or Province | NV | ||
Entity Address, Postal Zip Code | 89104 | ||
City Area Code | (888) | ||
Local Phone Number | 411-2726 | ||
Title of 12(b) Security | Common Stock | ||
Trading Symbol | EBET | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
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 Public Float | $ 0 | ||
Entity Common Stock, Shares Outstanding | 14,171,739 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2021 | Sep. 30, 2020 |
Current assets: | ||
Cash | $ 9,064,859 | $ 0 |
Accounts receivable, net | 21,636 | 33,839 |
Prepaid expenses | 664,250 | 50,000 |
Right of use asset, operating lease, current portion | 170,512 | 0 |
Other current assets | 26,387 | 0 |
Total current assets | 9,947,644 | 83,839 |
Long term assets: | ||
Software and equipment, net | 85,334 | 0 |
Right of use asset, operating lease | 172,915 | 0 |
Intangible assets - cryptocurrency | 904 | 44,562 |
Intangible assets - license agreement, net | 1,616,088 | 0 |
Intangible assets - domain names | 2,239,606 | 2,239,606 |
Total assets | 14,062,491 | 2,368,007 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 1,721,103 | 55,760 |
Accounts payable, related party | 0 | 152,888 |
Current lease liabilities | 170,511 | 0 |
Liabilities to users | 58,789 | 8,809 |
Total current liabilities | 1,950,403 | 217,457 |
Convertible notes payable, net of discount | 1,396,133 | 116,667 |
Other long term liabilities, net of discount | 463,925 | 422,409 |
Total liabilities | 3,810,461 | 756,533 |
COMMITMENTS AND CONTINGENCIES | ||
Stockholders' equity: | ||
Preferred Stock $0.001 per value, 10,000,000 shares authorized, 0 issued and outstanding | 0 | 0 |
Common stock $0.001 par value, 100,000,000 shares authorized, 13,315,414 and 7,340,421 shares issued and outstanding, respectively | 13,315 | 7,340 |
Additional paid-in capital | 26,834,354 | 3,053,660 |
Accumulated other comprehensive income | 53,911 | |
Accumulated deficit | (16,649,550) | (1,449,526) |
Total stockholders’ equity | 10,252,030 | 1,611,474 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 14,062,491 | $ 2,368,007 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 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 | 13,315,414 | 7,340,421 |
Common stock, shares outstanding | 13,315,414 | 7,340,421 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Income Statement [Abstract] | ||
Revenue | $ 164,807 | $ 195,778 |
Cost of revenue | (37,744) | (114,564) |
Gross profit | 127,063 | 81,214 |
Operating expenses: | ||
Sales and marketing expenses | 3,221,218 | 0 |
Product and technology expenses | 3,103,611 | 0 |
Acquisition costs | 147,616 | 0 |
General and administrative expenses | 7,103,943 | 192,160 |
Total operating expenses | 13,576,388 | 192,160 |
Loss from operations | (13,449,325) | (110,946) |
Interest expense, net | (1,704,395) | (150,376) |
Other expense | 0 | (46,154) |
Foreign currency gain (loss) | (46,304) | 0 |
Loss on debt extinguishment | 0 | (265,779) |
Total other expense | (1,750,699) | (462,309) |
Loss before provision for income taxes | (15,200,024) | (573,255) |
Provision for income taxes | 0 | 0 |
Net loss | (15,200,024) | (573,255) |
Other comprehensive income : | ||
Foreign currency translation | 53,911 | 0 |
Total other comprehensive income | 53,911 | 0 |
Comprehensive loss | $ (15,146,113) | $ (573,255) |
Net loss per common share – basic and diluted | $ (1.33) | $ (0.08) |
Weighted average common shares outstanding – basic and diluted | 11,397,739 | 7,340,421 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | AOCI Attributable to Parent [Member] | Retained Earnings [Member] | Total |
Beginning balance, value at Sep. 30, 2019 | $ 7,340 | $ 953,660 | $ (876,271) | $ 84,729 | |
Beginning balance, shares at Sep. 30, 2019 | 7,340,421 | ||||
Beneficial conversion feature | 2,100,000 | 2,100,000 | |||
Net loss | (573,255) | (573,255) | |||
Ending balance, value at Sep. 30, 2020 | $ 7,340 | 3,053,660 | (1,449,526) | 1,611,474 | |
Ending balance, shares at Sep. 30, 2020 | 7,340,421 | ||||
Shares issued for cash, net | $ 4,651 | 17,877,306 | 17,881,957 | ||
Shares issued for cash net, shares | 4,650,014 | ||||
Shares issued for conversion of debt | $ 375 | 187,125 | 187,500 | ||
Net loss | (15,200,024) | (15,200,024) | |||
Debt Conversion, Converted Instrument, Amount | 228,300 | ||||
Stock-based compensation, shares | 683,334 | ||||
Shares and stock options issued for assets | $ 65 | 1,513,837 | 1,513,902 | ||
Shares and stock options issued for assets, shares | 65,000 | ||||
Cashless exercise of warrants | $ 196 | (196) | |||
Cashless exercise of warrants, shares | 196,645 | ||||
Exercise of common stock options for cash | $ 5 | 14,995 | $ 15,000 | ||
Exercise of common stock options for cash, shares | 5,000 | ||||
Shares issued for conversion of debt, shares | 375,000 | ||||
Debt Conversion, Converted Instrument, Shares Issued | 511,000 | ||||
Comprehensive income | 53,911 | $ 53,911 | |||
Stock-based compensation | 683 | 4,187,627 | 4,188,310 | ||
Ending balance, value at Sep. 30, 2021 | $ 13,315 | $ 26,834,354 | $ 53,911 | $ (16,649,550) | $ 10,252,030 |
Ending balance, shares at Sep. 30, 2021 | 13,315,414 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Cash flow from operating activities: | ||
Net loss | $ (15,200,024) | $ (573,255) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Amortization of debt discount | 1,508,482 | 133,691 |
Loss on extinguishment of debt | 0 | 265,779 |
Depreciation and amortization | 390,291 | 0 |
Bad debt expense | 50,932 | 0 |
Amortization of right of use assets | 37,919 | 0 |
Stock-based compensation | 4,188,310 | 0 |
Gain on cryptocurrency settlement | (45,267) | (3,227) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (56,888) | (169,630) |
Prepaid expenses | (614,250) | (50,000) |
Other current assets | 35,122 | 0 |
Accounts payable and accrued liabilities | 1,729,365 | 178,736 |
Accounts payable - related parties | (152,888) | 152,888 |
Right of use lease liabilities | (210,835) | 0 |
Liabilities to users | 31,533 | (2,699) |
Net cash used in operating activities | (8,308,198) | (67,717) |
Cash flow from investing activities: | ||
Purchase of software and equipment | (157,714) | 0 |
Purchase of other long-term assets | (420,097) | 0 |
Net cash used by investing activities | (577,811) | 0 |
Cash flow from financing activities: | ||
Proceeds from exercise of stock options | 15,000 | 0 |
Proceeds from equity issuance, net of costs of capital | 17,881,957 | 0 |
Net cash provided by financing activities | 17,896,957 | 0 |
Effect of foreign exchange rates on cash | 53,911 | 0 |
NET CHANGE IN CASH | 9,064,859 | (67,717) |
CASH AT BEGINNING OF PERIOD | 0 | 67,717 |
CASH AT END OF PERIOD | 9,064,859 | 0 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 0 | 0 |
Cash paid for income taxes | 0 | 0 |
Non-cash transactions | ||
Beneficial conversion feature on convertible debt | 0 | 2,100,000 |
Acquisition of domain name for convertible notes payable | 0 | 2,239,606 |
Acquisition of assets for common shares and options | $ 1,513,902 | $ 0 |
ORGANIZATION, NATURE OF OPERATI
ORGANIZATION, NATURE OF OPERATIONS AND GOING CONCERN | 12 Months Ended |
Sep. 30, 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” or “the Company”) 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. On September 24, 2020, ESEG Limited (“ESEG”) was acquired by Global E-Sports Entertainment Group, LLC (“Global E-Sports”) in exchange for 50% of the membership interest in Global E-Sports held by the former owners of ESEG. The remaining 50% interest of Global E-Sports is held by Esports Tech. Prior to this transaction both ESEG and Global E-Sports shared common ownership. This transaction was accounted for as a combination of entities under common control and as such both operations have been combined from their inception. In addition, on September 24, 2020, Esports Tech executed a Share Exchange Agreement (“Share Exchange”) resulting in the acquisition of 100% of the membership interest of Global E-Sports in exchange for the issuance of 7,340,421 Pursuant to the Share Exchange, the merger between Global E-Sports and the Company was accounted for as a reverse merger. Under this method of accounting, Esports Tech was treated as the “acquired” company for financial reporting purposes. The net assets of Global E-Sports are stated at historical cost, with no goodwill or other intangible assets recorded. 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 14,400,000 13,514,200 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. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Sep. 30, 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 and Consolidation The basis of accounting applied is United States generally accepted accounting principles (“US GAAP”). All amounts included in this Form 10-K are expressed in U.S. Dollars, unless otherwise noted. The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries listed below: Schedule of Wholly Owned Subsidiary Entity Incorporation Date Location of Incorporation Esportsbook Technologies Limited December 8, 2020 Ireland Esports Product Trading Malta Limited August 11, 2021 Malta Esports Product Technologies Malta Ltd July 16, 2021 Malta ESEG Limited October 31, 2016 Belize Gogawi Entertainment Group Limited December 8, 2018 Cyprus Global E-Sports Entertainment Group LLC June 28, 2016 Nevada, USA Gogawi has always been a wholly-owned subsidiary of ESEG Limited. All intercompany accounts, transactions and balances have been eliminated in consolidation. Use of Estimates The preparation of the financial statements in conformity with generally accepted accounting principles in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of expenses during the reporting periods. Making estimates requires management to exercise judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate could change in the near term due to one or more future confirming events. Accordingly, actual results could differ significantly from those estimates. Cash and Cash Equivalents Cash and cash equivalents include short-term investments with original maturities of 90 days or less at the date of purchase. The recorded value of our cash and cash equivalents approximates their fair value. Accounts Receivable Through early fiscal 2021, the Company had an affiliate program, which consisted of a strategic partnership with a third-party operator in the Philippines. The Company charges the affiliate a fee calculated as a percentage of gross revenue. The affiliate partner controls cash received from the players on behalf of the Company and pays out winnings to the players for wagers placed. The receivable balance owed to the Company represents the net amount owed to the Company and is stated at historical cost less any allowance for doubtful accounts. As of September 30, 2020, all accounts receivable was due from the third-party operator. The allowance for doubtful accounts were $ 50,932 0 Software and Equipment Software and equipment are carried at cost, net of accumulated depreciation. Depreciation is computed utilizing the straight-line method over the estimated useful life of the asset. Additions and improvements are capitalized, while repairs and maintenance are expensed as incurred. Software costs are depreciated over periods of one to three years. 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. License agreements The Company has acquired the rights under license agreements to use certain technology from third parties. The Company capitalizes the value of the license agreement based on the consideration paid for the license. Intangible assets related to license agreements are amortized over the length of the license agreement. Domain names 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. Impairment of Long-Lived Assets Long-lived assets consist of software and equipment, finite-lived acquired intangible assets, such as license agreements, and indefinite-lived assets such as internet domain names. Long-lived assets are tested for recoverability whenever events or changes in business circumstances indicate that the carrying amount of the asset may not be fully recoverable. Impairment expense is recognized to the extent an asset’s expected undiscounted future cash flows are less than the asset’s carrying amount. As of September 30, 2021 and 2020, the Company determined that long-lived assets were not impaired. Leases The Company accounts for leases under ASC 842. The Company assesses whether a contract contains a lease on its execution date. If the contract contains a lease, lease classification is assessed upon its commencement date under ASC 842. For leases that are determined to qualify for treatment as operating leases, rent expense is recognized on a straight-line basis over the lease term. Leases that are determined to qualify for treatment as finance leases recognize interest expense as determined using the effective interest method with corresponding amortization of the right-of-use assets. For leases with terms of 12 months and greater, an asset and liability are initially recorded at an amount equal to the present value of the unpaid lease payments over the lease term. In determining the lease term for each lease, the Company includes options to extend the lease when it is reasonably certain that the option will be exercised. The Company uses the interest rate implicit in the lease, when known, or its estimated incremental borrowing rate, which is derived from information available at the lease commencement date including prevailing financial market conditions, in determining the present value of the unpaid lease payments. The Company’s only significant lease is for office space in Malta, which has a two-year lease term beginning August 1, 2021, and is classified as an operating lease. The lease has an option to extend the years for an additional two years with a 10% increase in annual rent. The Company paid €176,001 at commencement and owes an additional €160,001 in August 2022. The Company recognized a right of use asset and lease liability of $ 381,346 10 31,877 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 For the year ended September 30, 2021, a single customer accounted for approximately 77% of the Company’s revenue and 100% of the Company’s outstanding accounts receivable. No single customer exceeded more than 10% of revenue during the year ended September 30, 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 depreciation of capitalized software costs. Sales and Marketing Expenses Sales and marketing expenses consist primarily of expenses associated with advertising and related software, strategic league and team partnerships and costs related to free to play contests, and the compensation of sales and marketing personnel, including stock-based compensation expenses. Advertising costs are expensed as incurred. Advertising costs incurred was $ 452,473 0 . Product and Technology Expenses Product and technology expenses consist primarily of expenses which are not subject to capitalization or otherwise classified within Cost of Revenue. Product and Technology expenses include software licenses, depreciation of hardware and software and costs related to the compensation of product and technology personnel, including stock-based compensation. General and Administrative Expenses General and administrative expenses includes costs related to the compensation of the Company’s administrative functions, insurance costs, professional fees and consulting expense. Income Taxes Deferred taxes are determined utilizing the "asset and liability" method, whereby deferred tax asset and liability account balances are determined based on differences between financial reporting and the tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance, when it's more likely than not that deferred tax assets will not be realized in the foreseeable future. Deferred tax liabilities and assets are classified as current or non-current based on the underlying asset or liability or if not directly related to and asset or liability based on the expected reversal dates of the specific temporary differences. Fair value of financial instruments The Company discloses fair value measurements for financial and non-financial assets and liabilities measured at fair value. Fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The accounting standard establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described below: Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. Level 2: Observable prices that are based on inputs not quoted on active markets but are corroborated by market data. Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. Foreign Currency The Company’s reporting currency is the U.S. Dollar. Certain subsidiaries of the Company have a functional currency other than the U.S. Dollar, and are translated to the Company’s reporting currency at each reporting date. Non-monetary items are translated at historical rates. Monetary assets and liabilities are translated from British pounds and Euro into U.S. Dollars, at the period-end exchange rate, while foreign currency expenses are translated at the exchange rate in effect on the date of the transaction. The net effect of translation is reflected as other comprehensive income. The gains or losses on transactions denominated in currencies other than an entity’s functional currency are included in the consolidated statement of operations. Related Parties The Company follows ASC 850, , Earnings per share The Company computes earnings per share in accordance with Accounting Standards Codification Topic 260 – Earnings per Share (Topic 260). Topic 260 requires presentation of both basic and diluted earnings per shares (EPS) on the face of the income statement. 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 ( 3,825,000 2,344,348 2,199,541 Embedded Conversion Features The Company evaluates embedded conversion features within convertible debt under ASC 815 “Derivatives and Hedging” to determine whether the embedded conversion feature(s) should be bifurcated from the host instrument and accounted for as a derivative at fair value with changes in fair value recorded in earnings. If the conversion feature does not require derivative treatment under ASC 815, the instrument is evaluated under ASC 470-20 “Debt with Conversion and Other Options.” Under the ASC 470-20, an entity must separately account for the liability and equity components of the convertible debt instruments that may be settled entirely or partially in cash upon conversion in a manner that reflects the issuer’s economic interest cost. The effect of ASC 470-20 on the accounting for our convertible debt instruments is that the equity component is required to be included in the additional paid-in capital section of stockholders’ equity on the consolidated balance sheets and the value of the equity component is treated as original issue discount for purposes of accounting for the debt component of the notes. As a result, the Company is required to record non-cash interest expense as a result of the amortization of the discounted carrying value of the convertible debt to their face amount over the term of the convertible debt. We report higher interest expense in our financial results because ASC 470-20 requires interest to include both the current period’s amortization of the debt discount and the instrument’s coupon interest. For conventional convertible debt where the rate of conversion is below market value, the Company records a “beneficial conversion feature” (“BCF”) and related debt discount. When the Company records a BCF, the relative fair value of the BCF is recorded as a debt discount against the face amount of the respective debt instrument (offset to additional paid in capital) and amortized to interest expense over the life of the debt. 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. |
LONG-LIVED ASSETS
LONG-LIVED ASSETS | 12 Months Ended |
Sep. 30, 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 September 30, 2021 and 2020: Schedule of software and equipment September 30, 2021 September 30, 2020 Software and equipment $ 214,966 $ – Total software and equipment 214,996 – Accumulated depreciation (129,662 ) – Software and equipment, net $ 85,334 $ – 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 32,000 0.25 57,252 118,677 110,000 100,000 The software costs above relate to acquired components of the Company’s existing platform and other future products which are being depreciated over the expected useful life of 3 years. The useful life of certain software costs substantially related to the existing platform was accelerated to coincide with the expected migration to the Aspire platform resulting in an increased depreciation charge of approximately $100,000. Intangible Assets – Domain Names 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 2,100,000 March 1, 2022 10 675,000 September 1, 2025 535,394 Intangible Assets - Cryptocurrencies The following table presents the activities of the Company’s cryptocurrency holdings for the year ended September 30, 2021: Cryptocurrency activity table Cryptocurrency at September 30, 2019 $ 16,241 Additions of cryptocurrency 162,863 Payments of cryptocurrency (137,769 ) Gain on cryptocurrency 3,227 Cryptocurrency at September 30, 2020 44,562 Additions of cryptocurrency 36,605 Payments of cryptocurrency (125,530 ) Gain on cryptocurrency 45,267 Cryptocurrency at September 30, 2021 $ 904 Additions of cryptocurrency during the year ended September 30, 2021 represent settlement of outstanding accounts receivable of $ 18,158 18,447 64,023 61,509 Intangible Assets - License Agreement On October 1, 2020, the Company entered into an option agreement which gave the Company rights to acquire a license for proprietary technology related to online betting. The Company paid $ 133,770 286,328 65,000 1,456,650 1,876,748 260,659 |
CONVERTIBLE NOTES PAYABLE AND O
CONVERTIBLE NOTES PAYABLE AND OTHER LONG-TERM LIABILITIES | 12 Months Ended |
Sep. 30, 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 10 March 1, 2022 675,000 September 1, 2025 535,394 279,516 255,878 463,925 422,409 211,075 252,591 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 0.30 five 265,779 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 twelve months ended September 30, 2021, a total of $ 228,300 511,000 516,367 1,396,133 212,661 1,466,966 |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 12 Months Ended |
Sep. 30, 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 2,000,000 351,929 173,625 2.00 5 228,500 In January 2021, the Company sold 250,014 750,042 30,314 8,750 3 5 228,500 In February 2021, the Company entered into an agreement with a consultant where the Company agreed to issue warrants to purchase 4,166 5 3 37,500 In April 2021, the Company completed its IPO and issued 2,400,000 14,400,000 13,514,200 885,800 168,000 5 7.20 5,474,076 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 3,560,098 439,902 Common Stock Awards During the year ended September 30, 2021, the Company agreed to award a total of 1,210,750 restricted stock units that convert into common stock to various employees, consultants and officers under the 2020 Plan. Of the restricted stock unit awarded, 810,750 will vest annually over a period of one to four years, 200,000 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 granted prior to the IPO, at $2 per share based on recent sales of common stock. For awards granted after the IPO, the closing price of the Company’s stock on the grant date is used to determine the fair value. In November 2020, the Company entered into four consulting agreements under which the Company issued a total of 683,334 During the year ended September 30, 2021, the Company recognized a total of $ 2,766,480 5,656,423 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 years ended September 30, 2021 and 2020. The following table summarizes warrant activity during the year ended September 30, 2021: Schedule of warrant activity Common Stock Warrants Shares Weighted Weighted Outstanding at September 30, 2019 – $ – – Granted 2,015,000 0.30 4.99 Cancelled – – – Expired – – – Exercised – – – Outstanding at September 30, 2020 2,015,000 0.30 4.24 Granted 386,541 4.15 5.00 Cancelled – – – Expired – – – Exercised (202,000 ) 0.86 – Outstanding at September 30, 2021 2,199,541 $ 0.93 4.04 Exercisable at September 30, 2021 2,199,541 $ 0.93 4.04 The outstanding and exercisable common stock warrants as of September 30, 2021 had an estimated intrinsic value of $ 71,803,293 5,474,076 8,819 57,252 Options During the year ended September 30, 2021, the Company entered into various agreements with employees and consultants whereby the Company agreed to award a total of 2,584,348 311,000 250,000 2,196,785 20,000 The following table summarizes option activity during the year ended September 30, 2021: Schedule of option activity Common Stock Options Shares Weighted Weighted Outstanding at September 30, 2020 – $ – – Granted 2,584,348 2.40 9.28 Cancelled/Forfeited (235,000 ) 0.66 – Exercised (5,000 ) 3.00 – Outstanding at September 30, 2021 2,344,348 $ 2.57 8.39 Exercisable at September 30, 2021 147,563 $ 0.62 9.32 During the year ended September 30, 2021, the Company recognized stock-based compensation expense of $ 1,413,011 4,861,799 5,627,807 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 0.98%; 4) expected term of between 3.5 and 6.25 years; 5) an exercise price between $0.25 and $34.34 and 6) expected volatility of between 80.3% and 96.1% based on a peer group of public companies. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Sep. 30, 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 $ 885,800 168,000 7.20 5 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 |
TRANSACTION WITH RELATED PARTIE
TRANSACTION WITH RELATED PARTIES | 12 Months Ended |
Sep. 30, 2021 | |
Related Party Transactions [Abstract] | |
TRANSACTION WITH RELATED PARTIES | NOTE 7 – TRANSACTION WITH RELATED PARTIES The Company owed $ 155,228 152,888 On November 10, 2020, the Company entered into an employment agreement with Michael 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. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 8 – INCOME TAXES Prior to the Share Exchange as discussed in Note 1, Global E-Sports was organized as a limited liability company and was taxed as a partnership for U.S. income tax purposes. As such, with the exception of a limited number of state and local jurisdictions, Global E-Sports is not subject to U.S. income taxes. After the Share Exchange, the Company became subject to U.S federal income tax. Deferred taxes are determined by applying the provisions of enacted tax laws and rates for the jurisdictions in which the Company operates to the estimated future tax effects of the differences between the tax basis of assets and liabilities and their reported amounts in the Company's consolidated financial statements. A valuation allowance is established to reduce deferred tax assets if it is more likely than not that the related tax benefits will not be realized. The reconciliation of the provision for income taxes at the United States federal statutory rate compared to the Company’s income tax expense as reported is as follows: Schedule of reconciliation of provision for income taxes Year Ended Year Ended Income tax benefit computed at the statutory rate $ 3,192,000 120,000 Non-deductible expenses (1,251,000 ) (65,000 ) Change in valuation allowance (1,941,000 ) (55,000 ) Provision for income taxes $ – – Significant components of the Company’s deferred tax assets after applying enacted corporate income tax rates are as follows: Schedule of Deferred Tax asset As of As of Deferred income tax assets Net operating losses $ 1,996,000 $ 55,000 Valuation allowance (1,996,000 ) (55,000 ) Net deferred income tax assets $ – $ – The Company has an operating loss carry forward of approximately $ 9,500,000 The Company has recorded no liability for income taxes associated with unrecognized tax benefits at the date of adoption and has not recorded any liability associated with unrecognized tax benefits during 2021 and 2020. Accordingly, the Company has not recorded any interest or penalty in regard to any unrecognized benefit. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Sep. 30, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 9 – SUBSEQUENT EVENTS Share Purchase Agreement On October 1, 2021, the Company, and Esports Product Technologies Malta Ltd. (“Esports Malta”) entered into a Share Purchase Agreement (the “Acquisition Agreement”) with Aspire Global plc, (“Aspire”), Aspire Global International Limited, AG Communications Limited, Aspire Global 7 Limited (collectively the “Aspire Related Companies”), and Karamba Limited (“Karamba”) whereby Esports Malta will acquire all of the issued and outstanding shares of Karamba. The total acquisition price, payable at the closing of the acquisition of the Karamba shares, will be €65,000,000 payable as follows: (i) a cash amount of €50,000,000; (ii) €10,000,000, payable in accordance with the terms of an unsecured subordinated promissory note (the “Note”); and (iii) shares of Company common stock, which are valued at €5,000,000 (based on the weighted-average per-share price of the ten days prior to the execution date of the Acquisition Agreement (the “Exchange Shares”). The Company has agreed, within 45 days as of the closing, to file with the Securities and Exchange Commission (“SEC”) a registration statement to register the resale of the Exchange Shares. Esports Malta agreed that its sole ability to terminate the Acquisition Agreement would be limited to circumstances pursuant to which Aspire and/or Karamba is rendered incapable of performing at any time or has failed to perform at closing its delivery of: (a) certain key contracts to be mutually identified by the parties, or (b) a material portion of the Assets, taken as a whole. Aspire agreed that its ability to terminate the Acquisition Agreement would be limited to circumstance pursuant to which Esports Malta or the Company is rendered incapable of performing at any time or has failed to perform at closing its delivery: (a) of the purchase price, or (b) of any of the required deliverables. On November 29, 2021, the transaction closed (the “ Closing The Note will provide for an interest rate of 10% per annum. The maturity date of the Note will be the earlier of that date which is four years from the issuance date or a liquidity event. The Note will require repayment of the principal amount plus any accrued interest in three equal installments, payable annually starting on the second anniversary after issuance. No interest payment shall be due until that date which is the last day of the end of the second anniversary of issuance should the Note remain unpaid at such time. Should the Note remain unpaid at the second anniversary, the total accrued interest due at that time shall be paid at the second-year anniversary for accrued interest for the period from the issuance date through the second year anniversary date. Thereafter, and on each anniversary date thereafter, the interest due for the prior annual period shall be paid. Notwithstanding the foregoing, if the Company owes greater than $15.0 million under a credit agreement to be entered into in connection with the acquisition, then then the parties agree that the Company shall repay any principal amount plus any accrued interest due through the issuance of Company common stock in lieu of any cash payment and the amount of said common stock shares to be issued by the Company shall be determined by using the Conversion Price as defined below. Should an event of default occur on the Note, then at the election of Aspire, either (i) the Operator Services Agreement will be amended such that the fees payable shall increase by 5% during the continuation of the event of default, or (ii) Aspire may elect to convert the entire outstanding principal amount plus any accrued interest into fully-paid and non-assessable shares of common stock of the Company at a price per share based on the weighted-average per-share price for the ten days prior to the date of the occurrence of the event of default (“Conversion Price”). In no event shall the Conversion Price be lower than $18.00 per share (as adjusted for stock splits, stock dividends, or similar events occurring after the date hereof) and the total maximum number of common stock shares that may be issued to Aspire upon any such conversion in the aggregate shall be 650,000 shares (as adjusted for stock splits, stock dividends, or similar events occurring after the date hereof). The Acquisition Agreement provides for, among other things, the following transactions and deliverables to have occurred at the closing: (i) Aspire and the Aspire Related Companies will transfer to Karamba all the business to consumer (“B2C”) assets, certain liabilities, and operations as set forth in the Acquisition Agreement (the “Assets”); (ii) Aspire (and its related entities) will assign or transfer to Karamba all key and material contracts for services that are necessary for the operation of the Assets; (iii) Esports Malta will acquire all of the shares in Karamba; (iv) Esports Malta entered into an agreement with Aspire whereby Aspire will provide continuation of services related to the Assets, which are required in order to operate the Assets (the “Transitional Services Agreement”) during a transition period subsequent to the closing of the Acquisition Agreement and up to 90 days thereafter; (v) Esports Malta and/or Karamba (as then fully owned by Esports Malta) entered into a four-year business to consumer white label operator services agreement, based upon a migration plan in accordance with applicable laws (the “Operator Services Agreement” and the “Migration Plan”, respectively). Ancillary Agreements On the closing date, the parties entered into the Transitional Services Agreement pursuant to which Aspire agreed to provide continuation of services related to the Assets for all enterprise agreements, including content and data provider agreements, between Aspire and any third-party business serviced by the Aspire. On the closing date, Aspire and Karamba entered into an Operator Services Agreement and the Migration Plan as approved by the Malta Gaming Authority (“ MGA Private Placement On October 1, 2021, the Company entered into subscription agreements (the “Subscription Agreements”) with certain investors (the “Investors”). Pursuant to the Subscription Agreements, the Investors agreed to subscribe for and purchase, and the Company agreed to issue and sell to such Investors, simultaneous with the closing of the Acquisition Agreement, an aggregate of 37,700 shares of Series A Convertible Preferred Stock (the “Preferred Stock”) for a purchase price of $1,000.00 per share, for aggregate gross proceeds of $37,700,000 (the “Private Placement”). For each share of Preferred Stock issued, the Company issued the Investor a warrant to purchase 150% of the shares of Company common stock underlying the Preferred Stock (the “Warrants”). Pursuant to the Subscription Agreement, the Company is required to hold a special meeting of shareholders of the Company (the “Shareholder Meeting”), no later than 120 days after the issuance date soliciting the affirmative vote at the Shareholder Meeting for approval of resolutions providing for the approval of the conversion of the Preferred Stock and Warrants into Company common stock in compliance with the rules and regulations of the Nasdaq Stock Market (the “Shareholder Approval”). Until Shareholder Approval is received, without the approval of the holders of 60% of the Preferred Stock, other than certain exempt issuances, the Company is not permitted to (i) issue, enter into any agreement to issue or announce the issuance or proposed issuance of any common stock or common stock equivalents or (ii) file any registration statement or any amendment or supplement thereto. The Preferred Stockholders are entitled to receive dividends, at a rate of 14.0% per annum, which shall be payable quarterly in arrears on January 1, April 1, July 1 and October 1, beginning on the first such date after the issuance date. With limited exceptions, the Preferred Stockholders will have no voting rights. Upon any liquidation, dissolution or winding-up of the Company, the holders of the Preferred Stock shall be entitled to receive out of the assets, whether capital or surplus, of the Company available to shareholders, an amount equal to the greater of: (i) the purchase price for each share of Preferred Stock then held, or (ii) the amount the holders would have received had the holders fully converted the Preferred Stock to Company common stock, in each case, before any distribution or payment shall be made to the holders of the Company’s common stock. If, and only, if the Company receives Shareholder Approval, the Preferred Stock will be convertible into Company common stock at an initial conversion price of $28.00 per share (“Conversion Price”); provided that the Conversion Price is subject to anti-dilution protection upon any subsequent transaction at a price lower than the Conversion Price then in effect. In addition, nine months from the issuance date (the “Adjustment Date”), the Conversion Price shall be adjusted to the lesser of: (i) the Conversion Price in effect on the Adjustment Date, or (ii) 85% of the average closing price of the Company’s common stock for the fifteen trading days prior to the Adjustment Date. If the Company’s EBITDA is equal to or greater than $2.0 million for the quarter ending March 31, 2022, then no adjustment pursuant to the foregoing sentence will cause the Conversion Price to be less than $20.00. Upon receipt of Shareholder Approval, the Warrants will become exercisable and will expire on the fifth anniversary thereafter. The Warrants will initially be exercisable at an exercise price of $30.00 per share, provided that the exercise price is subject to anti-dilution protection upon any subsequent transaction at a price lower than the exercise price then in effect. The Warrants can be exercised on a cashless basis if there is no effective registration statement registering, or no current prospectus available for, the resale of the ordinary shares underlying the Warrants. The holders of the Preferred Stock and Warrants will not have the right to convert or exercise any portion of the Preferred Stock and Warrants to the extent that, after giving effect to such conversion, such holder (together with certain related parties) would beneficially own in excess of 4.99% of the Company’s common stock outstanding immediately after giving effect to such conversion or exercise. The Company agreed to use commercially reasonable efforts to file as soon as reasonably practicable, but in any event no later than 45 calendar days after the issuance date and use commercially reasonable efforts to cause to be declared effective as soon as reasonably practicable thereafter, a registration statement filed with the SEC registering the resale of all of the Company common stock underlying the Preferred Stock and Warrants issued to the Investors. Credit Agreement On November 29, 2021, the Company entered a credit agreement (the “Credit Agreement”) with CP BF Lending, LLC (“Lender”), pursuant to which the Lender agreed to make a single loan to the Company of $30,000,000 (the “Loan”). The Loan bears interest on the unpaid principal amount at a rate per annum equal to 15.0% as follows: (1) cash interest on the unpaid principal amount of the Loan at a rate equal to 14.0% per annum, plus (2) payable-in-kind interest (“PIK Interest”) on the unpaid principal amount of the Loan at a rate equal to 1.0% per annum. The Company paid to Lender on the closing date a non-refundable origination fee in an amount equal to $750,000. The Loan matures in 36 months, provided that the Company may receive two 12-month extensions of the maturity date by paying to the Lender (1) an extension fee equal to 1.0% of the unpaid principal balance of the Loan as of the date of such extension, and (2) all reasonable and documented out-of-pocket fees and expenses paid or incurred by Lender, in each case in connection with the extension request, including but not limited to fees and expenses for appraisals, collateral exams and audits, and legal counsel. The foregoing extension right is subject to, among other items, (i) the Loan not being in default, (ii) the representations and warranties contained in Credit Agreement being true and correct; and (iii) the Lender granting its written approval thereof in its sole discretion. The Loan may be prepaid by the Company at any time. In addition, the Credit Agreement provides that in the event there shall be excess cash flow from the Aspire Business (as such concept is defined in the Credit Agreement) for any calendar month, commencing with the month ended December 31, 2022, the Company shall apply such excess cash flow amount to prepay the outstanding principal balance of the Loan; provided that no such prepayment shall be required once the unpaid principal balance of the Loan has been reduced to $15,000,000. The Credit Agreement requires the Company to meet certain financial covenants commencing March 31, 2022. The Loan is secured by all of the assets of the Company and its subsidiaries. The Loan may be accelerated by the Lender upon an event of default, which in addition to customary events of default include: (i) if (1) any of the Company or its subsidiaries shall fail to maintain in full force and effect any gaming approval (as defined in the Credit Agreement) required for the operation of its business or (2) any gaming regulator shall impose any condition or limitation on any of the foregoing entities that could be reasonably expected to have a material adverse effect; or (ii) the suspension from trading or failure of the Company’s common stock to be trading or listed on the Nasdaq exchange for a period of three consecutive trading days. In connection with the Loan, the Company issued the Lender a warrant (the “Lender Warrant”) to purchase 1,567,840 shares of Company common stock at an exercise price of $25.00 per share expiring on the earlier to occur of (i) five years following the issue date or (ii) the second anniversary of the satisfaction of all obligations of the Company under the Credit Agreement. The exercise price is subject to appropriate adjustment in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting the Company’s common stock. In addition, the exercise price of the Lender Warrant is subject to “weighted-average” anti-dilution protection for issuances by the Company below the exercise price (other than certain defined exempt issuances), and, upon shareholder approval, the number of shares underlying the Lender Warrant shall also be adjusted for issuances to which the “weighted-average” anti-dilution protection applies. The Lender will not have the right to exercise any portion of the Lender Warrant if the Lender (together with its affiliates) would beneficially own in excess of 4.99% of the number of shares of Company common stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the Lender Warrant, which beneficial ownership amount, at the election of the Lender may be increased to any other percentage not in excess of 19.99% as specified by the Lender. If a fundamental transaction occurs, then the successor entity will succeed to, and be substituted for the Company, and will assume all of the Company’s obligations under the Lender Warrant with the same effect as if such successor entity had been named in the Lender Warrant itself. Employment Agreements On November 5, 2021, the Company entered into an amended and restated employment agreement, effective October 1, 2021, with Aaron Speach pursuant to which Mr. Speach agreed to continue to serve as the Company’s Chief Executive Officer for an initial term of three years. The agreement provides for an initial annual base salary of $315,000, which may be increased to $350,000 retroactively as of the effective date provided the closing and consummation of the share purchase transaction by and between Company and Aspire Global plc occurs. Pursuant to the agreement, Mr. Speach is eligible for an annual bonus of up to 75% of his base salary, as determined solely at the discretion of the Compensation Committee. Pursuant to the agreement, if Mr. Speach is required to be located outside of the United States for a period of 30 consecutive days or more, the Company shall pay him a pro-rated monthly travel stipend of $3,500 for each month that he is so required to live outside of the United States. Pursuant to the agreement, Mr. Speach is eligible to receive the following potential performance stock grants: (i) 100,000 shares of Company common stock at such date as the Company reaches total gross revenues of $10,000,000 in any trailing 12 month period during the term of the employment agreement; and (ii) 100,000 shares of Company common stock at such date as the Company reaches total gross revenues of $20,000,000 in any trailing 12 month period during the term of the employment agreement. Contemporaneous with the execution of the agreement, Mr. Speach received a restricted stock unit award (the “RSU Grant”) for 100,000 shares of Company common stock. The RSU Grant shall vest in four equal annual installments, provided Mr. Speach is employed on each such vesting date. If Mr. Speach’s employment is terminated at our election without “cause” (as defined in the agreement), Mr. Speach shall be entitled to receive severance payments equal to 150% of the balance due of Mr. Speach’s base salary for the remainder of the initial term of three years. On November 5, 2021, the Company entered into an amended and restated employment agreement, effective October 1, 2021, with Bart Barden pursuant to which Mr. Barden will continue to serve as the Company’s Chief Operating Officer. The initial term of the employment agreement will continue for a period of 12 months. The employment agreement provides for an initial annual base salary of €213,400, which may be increased to €237,000 retroactively as of the effective date provided the closing and consummation of the share purchase transaction by and between Company and Aspire Global plc occurs. Pursuant to the agreement, Mr. Barden is eligible for an annual bonus of up to 50% of his base salary, as determined solely at the discretion of the Compensation Committee. Contemporaneous with the execution of the agreement, Mr. Barden received a restricted stock unit award (the “RSU Grant”) for 25,000 shares of Company common stock. The RSU Grant shall vest in four equal annual installments, provided Mr. Barden is employed on each such vesting date. On November 5, 2021, the Company’s Board of Directors, upon recommendation of the Compensation Committee, approved the following policy for compensating non-employee members of the Board. Each independent director shall receive annual cash compensation of $40,000. In addition, the chairperson of the Audit Committee, Compensation Committee and Nominating and Governance Committee shall receive an annual compensation of $15,000, $10,000 and $5,000, respectively; the other members of such committees shall receive an annual compensation of $7,500, $5,000 and $2,500, respectively. In addition, the Company agreed to pay a one-time make-whole payment to the independent directors for services rendered since the Company’s initial public offering of $27,000. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation The basis of accounting applied is United States generally accepted accounting principles (“US GAAP”). All amounts included in this Form 10-K are expressed in U.S. Dollars, unless otherwise noted. The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries listed below: Schedule of Wholly Owned Subsidiary Entity Incorporation Date Location of Incorporation Esportsbook Technologies Limited December 8, 2020 Ireland Esports Product Trading Malta Limited August 11, 2021 Malta Esports Product Technologies Malta Ltd July 16, 2021 Malta ESEG Limited October 31, 2016 Belize Gogawi Entertainment Group Limited December 8, 2018 Cyprus Global E-Sports Entertainment Group LLC June 28, 2016 Nevada, USA Gogawi has always been a wholly-owned subsidiary of ESEG Limited. All intercompany accounts, transactions and balances have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of the financial statements in conformity with generally accepted accounting principles in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of expenses during the reporting periods. Making estimates requires management to exercise judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate could change in the near term due to one or more future confirming events. Accordingly, actual results could differ significantly from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include short-term investments with original maturities of 90 days or less at the date of purchase. The recorded value of our cash and cash equivalents approximates their fair value. |
Accounts Receivable | Accounts Receivable Through early fiscal 2021, the Company had an affiliate program, which consisted of a strategic partnership with a third-party operator in the Philippines. The Company charges the affiliate a fee calculated as a percentage of gross revenue. The affiliate partner controls cash received from the players on behalf of the Company and pays out winnings to the players for wagers placed. The receivable balance owed to the Company represents the net amount owed to the Company and is stated at historical cost less any allowance for doubtful accounts. As of September 30, 2020, all accounts receivable was due from the third-party operator. The allowance for doubtful accounts were $ 50,932 0 |
Software and Equipment | Software and Equipment Software and equipment are carried at cost, net of accumulated depreciation. Depreciation is computed utilizing the straight-line method over the estimated useful life of the asset. Additions and improvements are capitalized, while repairs and maintenance are expensed as incurred. Software costs are depreciated over periods of one to three years. |
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. License agreements The Company has acquired the rights under license agreements to use certain technology from third parties. The Company capitalizes the value of the license agreement based on the consideration paid for the license. Intangible assets related to license agreements are amortized over the length of the license agreement. Domain names 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. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Long-lived assets consist of software and equipment, finite-lived acquired intangible assets, such as license agreements, and indefinite-lived assets such as internet domain names. Long-lived assets are tested for recoverability whenever events or changes in business circumstances indicate that the carrying amount of the asset may not be fully recoverable. Impairment expense is recognized to the extent an asset’s expected undiscounted future cash flows are less than the asset’s carrying amount. As of September 30, 2021 and 2020, the Company determined that long-lived assets were not impaired. |
Leases | Leases The Company accounts for leases under ASC 842. The Company assesses whether a contract contains a lease on its execution date. If the contract contains a lease, lease classification is assessed upon its commencement date under ASC 842. For leases that are determined to qualify for treatment as operating leases, rent expense is recognized on a straight-line basis over the lease term. Leases that are determined to qualify for treatment as finance leases recognize interest expense as determined using the effective interest method with corresponding amortization of the right-of-use assets. For leases with terms of 12 months and greater, an asset and liability are initially recorded at an amount equal to the present value of the unpaid lease payments over the lease term. In determining the lease term for each lease, the Company includes options to extend the lease when it is reasonably certain that the option will be exercised. The Company uses the interest rate implicit in the lease, when known, or its estimated incremental borrowing rate, which is derived from information available at the lease commencement date including prevailing financial market conditions, in determining the present value of the unpaid lease payments. The Company’s only significant lease is for office space in Malta, which has a two-year lease term beginning August 1, 2021, and is classified as an operating lease. The lease has an option to extend the years for an additional two years with a 10% increase in annual rent. The Company paid €176,001 at commencement and owes an additional €160,001 in August 2022. The Company recognized a right of use asset and lease liability of $ 381,346 10 31,877 |
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 For the year ended September 30, 2021, a single customer accounted for approximately 77% of the Company’s revenue and 100% of the Company’s outstanding accounts receivable. No single customer exceeded more than 10% of revenue during the year ended September 30, 2020. In addition, no disaggregation of revenue is required because all current revenue is generated from gaming revenue. |
Performance Obligations | 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 depreciation of capitalized software costs. |
Sales and Marketing Expenses | Sales and Marketing Expenses Sales and marketing expenses consist primarily of expenses associated with advertising and related software, strategic league and team partnerships and costs related to free to play contests, and the compensation of sales and marketing personnel, including stock-based compensation expenses. Advertising costs are expensed as incurred. Advertising costs incurred was $ 452,473 0 . |
Product and Technology Expenses | Product and Technology Expenses Product and technology expenses consist primarily of expenses which are not subject to capitalization or otherwise classified within Cost of Revenue. Product and Technology expenses include software licenses, depreciation of hardware and software and costs related to the compensation of product and technology personnel, including stock-based compensation. |
General and Administrative Expenses | General and Administrative Expenses General and administrative expenses includes costs related to the compensation of the Company’s administrative functions, insurance costs, professional fees and consulting expense. |
Income Taxes | Income Taxes Deferred taxes are determined utilizing the "asset and liability" method, whereby deferred tax asset and liability account balances are determined based on differences between financial reporting and the tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance, when it's more likely than not that deferred tax assets will not be realized in the foreseeable future. Deferred tax liabilities and assets are classified as current or non-current based on the underlying asset or liability or if not directly related to and asset or liability based on the expected reversal dates of the specific temporary differences. |
Fair value of financial instruments | Fair value of financial instruments The Company discloses fair value measurements for financial and non-financial assets and liabilities measured at fair value. Fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The accounting standard establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described below: Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. Level 2: Observable prices that are based on inputs not quoted on active markets but are corroborated by market data. Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. |
Foreign Currency | Foreign Currency The Company’s reporting currency is the U.S. Dollar. Certain subsidiaries of the Company have a functional currency other than the U.S. Dollar, and are translated to the Company’s reporting currency at each reporting date. Non-monetary items are translated at historical rates. Monetary assets and liabilities are translated from British pounds and Euro into U.S. Dollars, at the period-end exchange rate, while foreign currency expenses are translated at the exchange rate in effect on the date of the transaction. The net effect of translation is reflected as other comprehensive income. The gains or losses on transactions denominated in currencies other than an entity’s functional currency are included in the consolidated statement of operations. |
Related Parties | Related Parties The Company follows ASC 850, , |
Earnings per share | Earnings per share The Company computes earnings per share in accordance with Accounting Standards Codification Topic 260 – Earnings per Share (Topic 260). Topic 260 requires presentation of both basic and diluted earnings per shares (EPS) on the face of the income statement. 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 ( 3,825,000 2,344,348 2,199,541 |
Embedded Conversion Features | Embedded Conversion Features The Company evaluates embedded conversion features within convertible debt under ASC 815 “Derivatives and Hedging” to determine whether the embedded conversion feature(s) should be bifurcated from the host instrument and accounted for as a derivative at fair value with changes in fair value recorded in earnings. If the conversion feature does not require derivative treatment under ASC 815, the instrument is evaluated under ASC 470-20 “Debt with Conversion and Other Options.” Under the ASC 470-20, an entity must separately account for the liability and equity components of the convertible debt instruments that may be settled entirely or partially in cash upon conversion in a manner that reflects the issuer’s economic interest cost. The effect of ASC 470-20 on the accounting for our convertible debt instruments is that the equity component is required to be included in the additional paid-in capital section of stockholders’ equity on the consolidated balance sheets and the value of the equity component is treated as original issue discount for purposes of accounting for the debt component of the notes. As a result, the Company is required to record non-cash interest expense as a result of the amortization of the discounted carrying value of the convertible debt to their face amount over the term of the convertible debt. We report higher interest expense in our financial results because ASC 470-20 requires interest to include both the current period’s amortization of the debt discount and the instrument’s coupon interest. For conventional convertible debt where the rate of conversion is below market value, the Company records a “beneficial conversion feature” (“BCF”) and related debt discount. When the Company records a BCF, the relative fair value of the BCF is recorded as a debt discount against the face amount of the respective debt instrument (offset to additional paid in capital) and amortized to interest expense over the life of the debt. |
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. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Schedule of Wholly Owned Subsidiary | Schedule of Wholly Owned Subsidiary Entity Incorporation Date Location of Incorporation Esportsbook Technologies Limited December 8, 2020 Ireland Esports Product Trading Malta Limited August 11, 2021 Malta Esports Product Technologies Malta Ltd July 16, 2021 Malta ESEG Limited October 31, 2016 Belize Gogawi Entertainment Group Limited December 8, 2018 Cyprus Global E-Sports Entertainment Group LLC June 28, 2016 Nevada, USA |
LONG-LIVED ASSETS (Tables)
LONG-LIVED ASSETS (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Finite-Lived Intangible Assets [Table Text Block] | Schedule of software and equipment September 30, 2021 September 30, 2020 Software and equipment $ 214,966 $ – Total software and equipment 214,996 – Accumulated depreciation (129,662 ) – Software and equipment, net $ 85,334 $ – |
Cryptocurrency activity table | Cryptocurrency activity table Cryptocurrency at September 30, 2019 $ 16,241 Additions of cryptocurrency 162,863 Payments of cryptocurrency (137,769 ) Gain on cryptocurrency 3,227 Cryptocurrency at September 30, 2020 44,562 Additions of cryptocurrency 36,605 Payments of cryptocurrency (125,530 ) Gain on cryptocurrency 45,267 Cryptocurrency at September 30, 2021 $ 904 |
STOCKHOLDERS_ EQUITY (Tables)
STOCKHOLDERS’ EQUITY (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
Schedule of warrant activity | Schedule of warrant activity Common Stock Warrants Shares Weighted Weighted Outstanding at September 30, 2019 – $ – – Granted 2,015,000 0.30 4.99 Cancelled – – – Expired – – – Exercised – – – Outstanding at September 30, 2020 2,015,000 0.30 4.24 Granted 386,541 4.15 5.00 Cancelled – – – Expired – – – Exercised (202,000 ) 0.86 – Outstanding at September 30, 2021 2,199,541 $ 0.93 4.04 Exercisable at September 30, 2021 2,199,541 $ 0.93 4.04 |
Schedule of option activity | Schedule of option activity Common Stock Options Shares Weighted Weighted Outstanding at September 30, 2020 – $ – – Granted 2,584,348 2.40 9.28 Cancelled/Forfeited (235,000 ) 0.66 – Exercised (5,000 ) 3.00 – Outstanding at September 30, 2021 2,344,348 $ 2.57 8.39 Exercisable at September 30, 2021 147,563 $ 0.62 9.32 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of reconciliation of provision for income taxes | Schedule of reconciliation of provision for income taxes Year Ended Year Ended Income tax benefit computed at the statutory rate $ 3,192,000 120,000 Non-deductible expenses (1,251,000 ) (65,000 ) Change in valuation allowance (1,941,000 ) (55,000 ) Provision for income taxes $ – – |
Schedule of Deferred Tax asset | Schedule of Deferred Tax asset As of As of Deferred income tax assets Net operating losses $ 1,996,000 $ 55,000 Valuation allowance (1,996,000 ) (55,000 ) Net deferred income tax assets $ – $ – |
ORGANIZATION, NATURE OF OPERA_2
ORGANIZATION, NATURE OF OPERATIONS AND GOING CONCERN (Details Narrative) - USD ($) | 7 Months Ended | 12 Months Ended |
Apr. 30, 2021 | Sep. 24, 2021 | |
IPO [Member] | ||
Class of Stock [Line Items] | ||
Stock issued new, shares | 2,400,000 | |
Proceeds from issuance of stock | $ 14,400,000 | |
Proceeds from Issuance of Common Stock | $ 13,514,200 | |
Global E Sports Entertainment [Member] | ||
Class of Stock [Line Items] | ||
Stock issued new, shares | 7,340,421 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 12 Months Ended |
Sep. 30, 2021 | |
Esportsbook Technologies Limited [Member] | |
Name Of Subsidiary | Esportsbook Technologies Limited |
Incorporation Date | Dec. 8, 2020 |
Place Of Incorporation | Ireland |
Esports Product Trading Malta Limited [Member] | |
Name Of Subsidiary | Esports Product Trading Malta Limited |
Incorporation Date | Aug. 11, 2021 |
Place Of Incorporation | Malta |
Esports Product Technologies Malta Ltd [Member] | |
Name Of Subsidiary | Esports Product Technologies Malta Ltd |
Incorporation Date | Jul. 16, 2021 |
Place Of Incorporation | Malta |
ESEG Limited [Member] | |
Name Of Subsidiary | ESEG Limited |
Incorporation Date | Oct. 31, 2016 |
Place Of Incorporation | Belize |
Gogawi Entertainment Group Limited [Member] | |
Name Of Subsidiary | Gogawi Entertainment Group Limited |
Incorporation Date | Dec. 8, 2018 |
Place Of Incorporation | Cyprus |
Global E Sports Entertainment Group L L C [Member] | |
Name Of Subsidiary | Global E-Sports Entertainment Group LLC |
Incorporation Date | Jun. 28, 2016 |
Place Of Incorporation | Nevada, USA |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Aug. 01, 2021 | |
Allowance for doubtful accounts | $ 50,932 | $ 0 | |
Right of use asset | $ 172,915 | 0 | $ 381,346 |
Incremental borrowing rate | 10.00% | ||
Operating lease expense | $ 31,877 | ||
Advertising costs | $ 452,473 | $ 0 | |
Equity Option [Member] | |||
Antidilutive shares | 2,344,348 | ||
Warrant [Member] | |||
Antidilutive shares | 2,199,541 | ||
Convertible Debt [Member] | |||
Antidilutive shares | 3,825,000 | ||
Operating Lease [Member] | |||
Operating lease liability | $ 381,346 |
LONG-LIVED ASSETS (Details - So
LONG-LIVED ASSETS (Details - Software) - USD ($) | Sep. 30, 2021 | Sep. 30, 2020 |
Property, Plant and Equipment [Line Items] | ||
Software | $ 214,996 | $ 0 |
Accumulated depreciation | (129,662) | 0 |
Software and equipment, net | 85,334 | 0 |
Software And Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Software | $ 214,966 | $ 0 |
LONG-LIVED ASSETS (Details - Cr
LONG-LIVED ASSETS (Details - Crytocurrency) - USD ($) | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | ||
Cryptocurrency at beginning | $ 44,562 | $ 16,241 |
Additions of cryptocurrency | 36,605 | 162,863 |
Payments of cryptocurrency | (125,530) | (137,769) |
Gain on cryptocurrency | 45,267 | 3,227 |
Cryptocurrency at ending | $ 904 | $ 44,562 |
LONG-LIVED ASSETS (Details Narr
LONG-LIVED ASSETS (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 7 Months Ended | 10 Months Ended | 12 Months Ended | |||
Nov. 05, 2020 | Jun. 30, 2021 | May 03, 2021 | Jul. 31, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 01, 2020 | Sep. 30, 2019 | |
Payment for technology data | $ 157,714 | $ 0 | ||||||
Unamortized discount | 516,367 | |||||||
Additions of cryptocurrency | 36,605 | 162,863 | ||||||
Payments of cryptocurrency | (125,530) | (137,769) | ||||||
Payment for option | 420,097 | 0 | ||||||
Stock Issued During Period, Value, Purchase of Assets | 1,513,902 | |||||||
Online Betting Technology [Member] | ||||||||
Stock Issued During Period, Shares, Purchase of Assets | 65,000 | |||||||
Stock Issued During Period, Value, Purchase of Assets | $ 1,456,650 | |||||||
Intangible assets license agreements | 1,876,748 | |||||||
Amortization of Intangible Assets | 260,659 | |||||||
Accounts Receivable [Member] | ||||||||
Additions of cryptocurrency | $ 18,158 | |||||||
Net Deposits [Member] | ||||||||
Additions of cryptocurrency | 18,447 | |||||||
Accounts Payable And Accrued Expenses [Member] | ||||||||
Payments of cryptocurrency | 64,023 | |||||||
Prepaid Expenses and Other Current Assets [Member] | ||||||||
Payments of cryptocurrency | $ 61,509 | |||||||
Internet Domain Names [Member] | ||||||||
Debt Instrument, Face Amount | $ 2,100,000 | |||||||
Debt maturity date | Mar. 1, 2022 | |||||||
Debt interest rate | 10.00% | |||||||
Debt balloon payment | $ 675,000 | |||||||
Debt balloon payment date | Sep. 1, 2025 | |||||||
Unamortized discount | $ 535,394 | |||||||
Internet Domain Names [Member] | ESEG Limited [Member] | ||||||||
Investment Owned, at Cost | $ 2,239,606 | |||||||
Upon Execution Of Agreement [Member] | Online Betting Technology [Member] | ||||||||
Payment for option | $ 133,770 | |||||||
Upon Exercise Of Option [Member] | Online Betting Technology [Member] | ||||||||
Payment for option | $ 286,328 | |||||||
Warrants [Member] | ||||||||
Warrant exercise price | $ 0.93 | $ 0.30 | ||||||
Stock issued for asset acquisition | 386,541 | 2,015,000 | ||||||
Technology Data [Member] | ||||||||
Payment for technology data | $ 61,425 | |||||||
Total consideration paid | $ 118,677 | |||||||
Stock issued for asset acquisition | 100,000 | |||||||
Technology Data [Member] | Annual Salary [Member] | ||||||||
Payment to acquire intangible assets | $ 110,000 | |||||||
Technology Data [Member] | Warrants [Member] | ||||||||
Warrants issued | 32,000 | |||||||
Warrant exercise price | $ 0.25 | |||||||
Fair value of warrants granted | $ 57,252 |
CONVERTIBLE NOTES PAYABLE AND_2
CONVERTIBLE NOTES PAYABLE AND OTHER LONG-TERM LIABILITIES (Details Narrative) - USD ($) | 11 Months Ended | 12 Months Ended | ||||
Sep. 01, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 01, 2025 | Sep. 26, 2020 | Sep. 30, 2019 | |
Debt Instrument [Line Items] | ||||||
Notes payable | $ 1,396,133 | |||||
Debt discount | 516,367 | |||||
Notes payable | 463,925 | $ 422,409 | ||||
Gain (Loss) on Extinguishment of Debt | 0 | (265,779) | ||||
Debt converted, amount converted | $ 228,300 | |||||
Debt converted, shares issued | 511,000 | |||||
Accrued interest | $ 212,661 | |||||
Amortization of debt discount | $ 1,508,482 | $ 133,691 | ||||
Warrants [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.93 | $ 0.30 | ||||
ESEG Promissory Notes [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Notes payable | $ 2,100,000 | |||||
Debt interest rate | 10.00% | |||||
Debt maturity date | Mar. 1, 2022 | |||||
Balloon Payment to be Paid | $ 675,000 | |||||
[custom:DebtInstrumentPeriodicPaymentTermsBalloonPaymentToBePaidDate-0] | Sep. 1, 2025 | |||||
Debt discount | $ 535,394 | |||||
Gain (Loss) on Extinguishment of Debt | $ 265,779 | |||||
ESEG Promissory Notes [Member] | Warrants [Member] | ||||||
Debt Instrument [Line Items] | ||||||
[custom:WarrantsIssuedShares-0] | 2,015,000 | |||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.30 | |||||
Warrants and Rights Outstanding, Term | 5 years | |||||
ESEG Promissory Notes [Member] | Promissory Notes Payable 1 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt discount | 279,516 | |||||
ESEG Promissory Notes [Member] | Other Long Term Liabilities [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt discount | $ 255,878 | $ 211,075 | 252,591 | |||
Notes payable | 463,925 | $ 422,409 | ||||
Convertable Notes Payable [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Amortization of debt discount | $ 1,466,966 |
STOCKHOLDERS' EQUITY (Details -
STOCKHOLDERS' EQUITY (Details - Warrant activity) - Warrants [Member] - $ / shares | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Warrants Outstanding, Beginning | 2,015,000 | 0 |
Weighted Average Exercise Price Outstanding, Beginning | $ 0.30 | |
Number of Warrants Granted | 386,541 | 2,015,000 |
Weighted Average Exercise Price Granted | $ 4.15 | $ 0.30 |
Weighted Average Remaining Life, granted | 5 years | 4 years 11 months 26 days |
Number of Warrants Cancelled | 0 | 0 |
Weighted Average Exercise Price Cancelled | ||
Number of Warrants Expired | 0 | 0 |
Weighted Average Exercise Price Expired | ||
Number of Warrants Exercised | (202,000) | 0 |
Weighted Average Exercise Price Exercised | $ 0.86 | |
Weighted Average Remaining Life, Ending | 4 years 14 days | 4 years 2 months 26 days |
Number of Warrants Outstanding, Ending | 2,199,541 | 2,015,000 |
Weighted Average Exercise Price Outstanding, Ending | $ 0.93 | $ 0.30 |
Number of Warrants Exercisable, Ending | 2,199,541 | |
Weighted Average Exercise Price Exercisable | $ 0.93 | |
Weighted Average Remaining Life, exercisable | 4 years 14 days |
STOCKHOLDERS' EQUITY (Details_2
STOCKHOLDERS' EQUITY (Details - Option Activity) - Stock Options [Member] | 12 Months Ended |
Sep. 30, 2021$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Options Outstanding, Beginning | shares | 0 |
Weighted Average Exercise Price Outstanding, Beginning | $ / shares | |
Number of Options Granted | shares | 2,584,348 |
Weighted Average Exercise Price Granted | $ / shares | $ 2.40 |
Weighted Average Remaining Contractual Term Granted | 9 years 3 months 10 days |
Number of Options Forfeited | shares | (235,000) |
Weighted Average Exercise Price Forfeited | $ / shares | $ 0.66 |
Number of Options Exercised | shares | (5,000) |
Weighted Average Exercise Price Exercised | $ / shares | $ 3 |
Number of Options Outstanding, Ending | shares | 2,344,348 |
Weighted Average Exercise Price Outstanding, Ending | $ / shares | $ 2.57 |
Weighted Average Remaining Contractual Term Outstanding | 8 years 4 months 20 days |
Number of Options Exercisable, Ending | shares | 147,563 |
Weighted Average Exercise Price Exercisable, Ending | $ / shares | $ 0.62 |
Weighted Average Remaining Contractual Term Exercisable | 9 years 3 months 25 days |
STOCKHOLDERS_ EQUITY (Details N
STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($) | 2 Months Ended | 3 Months Ended | 4 Months Ended | 5 Months Ended | 7 Months Ended | 12 Months Ended | |||
Nov. 30, 2020 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Jan. 31, 2021 | Feb. 28, 2021 | Apr. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | |
Class of Stock [Line Items] | |||||||||
Share-based compensation | $ 4,188,310 | $ 0 | |||||||
Common Stock Awards [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Share-based compensation | $ 2,766,480 | ||||||||
Unrecognized stock based compensation | 5,656,423 | ||||||||
Common Stock Warrants [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Intrinsic value of option outstanding | 71,803,293 | ||||||||
Common Stock Warrants [Member] | Asset Purchase Agreement [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Warrant fair value | $ 57,252 | ||||||||
Stock Options [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Stock granted under plan | 2,584,348 | ||||||||
Share-based compensation | $ 1,413,011 | ||||||||
Unrecognized stock based compensation | $ 5,627,807 | ||||||||
Options exercisable, intrinsic value | $ 4,861,799 | ||||||||
Plan 2020 [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Stock authorized under plan | 4,000,000 | ||||||||
Stock granted under plan | 3,560,098 | ||||||||
Shares remaining under plan | 439,902 | ||||||||
Plan 2020 [Member] | Stock Options [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Options granted | 2,584,348 | ||||||||
Options unvested | 2,196,785 | ||||||||
Option vested | 20,000 | ||||||||
Brokers [Member] | Common Stock Warrants [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Warrant fair value | $ 5,474,076 | ||||||||
Consultants [Member] | Common Stock Warrants [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Warrant fair value | $ 8,819 | ||||||||
Consultants [Member] | Stock Options [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Options granted | 311,000 | ||||||||
Board Of Directors Members [Member] | Stock Options [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Options granted | 250,000 | ||||||||
IPO [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Proceeds from Issuance of Common Stock | $ 13,514,200 | ||||||||
Stock issued new, shares | 2,400,000 | ||||||||
Payment of stock issuance costs | $ 885,800 | ||||||||
Proceeds from issuance of stock | $ 14,400,000 | ||||||||
IPO [Member] | Underwriter [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Warrants issued | 168,000 | ||||||||
Warrant exercise price | $ 7.20 | ||||||||
Warrant term | 5 years | ||||||||
Warrant fair value | $ 5,474,076 | ||||||||
Common Stock [Member] | Four Consulting Agreements [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Stock awards granted | 683,334 | ||||||||
Common Stock [Member] | December 2020 [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Proceeds from Issuance of Common Stock | $ 4,000,000 | ||||||||
Stock issued new, shares | 2,000,000 | ||||||||
Payment of stock issuance costs | $ 351,929 | ||||||||
Common Stock [Member] | January 2021 [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Proceeds from Issuance of Common Stock | $ 750,042 | ||||||||
Stock issued new, shares | 250,014 | ||||||||
Payment of stock issuance costs | $ 30,314 | ||||||||
Warrants [Member] | Consultant [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Warrants issued | 4,166 | ||||||||
Warrant exercise price | $ 3 | ||||||||
Warrant term | 5 years | ||||||||
Consulting expense | $ 37,500 | ||||||||
Warrants [Member] | December 2020 [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Warrants issued | 173,625 | ||||||||
Warrant exercise price | $ 2 | ||||||||
Warrant term | 5 years | ||||||||
Fair value of warrants granted | $ 228,500 | ||||||||
Warrants [Member] | January 2021 [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Warrants issued | 8,750 | ||||||||
Warrant exercise price | $ 3 | ||||||||
Warrant term | 5 years | ||||||||
Fair value of warrants granted | $ 228,500 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) | 7 Months Ended |
Apr. 30, 2021USD ($)$ / sharesshares | |
Consulting Agreement [Member] | |
Class of Stock [Line Items] | |
Warrants converted, shares issued | shares | 62,386 |
IPO [Member] | |
Class of Stock [Line Items] | |
Payment of stock issuance costs | $ | $ 885,800 |
IPO [Member] | Underwriters [Member] | |
Class of Stock [Line Items] | |
Payment of stock issuance costs | $ | $ 885,800 |
Warrants issued | shares | 168,000 |
Warrant exercise price | $ / shares | $ 7.20 |
Warrant term | 5 years |
TRANSACTION WITH RELATED PART_2
TRANSACTION WITH RELATED PARTIES (Details Narrative) - USD ($) | Sep. 30, 2021 | Sep. 30, 2020 |
Gogawi [Member] | ||
Related Party Transaction [Line Items] | ||
Due to related parties | $ 155,228 | $ 152,888 |
INCOME TAXES (Details - Income
INCOME TAXES (Details - Income tax expense) - USD ($) | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | ||
Income tax benefit computed at the statutory rate | $ 3,192,000 | $ 120,000 |
Non-deductible expenses | (1,251,000) | (65,000) |
Change in valuation allowance | (1,941,000) | (55,000) |
Provision for income taxes | $ 0 | $ 0 |
INCOME TAXES (Details - Deferre
INCOME TAXES (Details - Deferred tax assets) - USD ($) | Sep. 30, 2021 | Sep. 30, 2020 |
Deferred income tax assets | ||
Net operating losses | $ 1,996,000 | $ 55,000 |
Valuation allowance | (1,996,000) | (55,000) |
Net deferred income tax assets | $ 0 | $ 0 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) | Sep. 30, 2021USD ($) |
Income Tax Disclosure [Abstract] | |
Operating loss carry forward | $ 9,500,000 |