Cover
Cover - shares | 6 Months Ended | |
Mar. 31, 2024 | May 16, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 31, 2024 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2024 | |
Current Fiscal Year End Date | --09-30 | |
Entity File Number | 001-40334 | |
Entity Registrant Name | EBET, Inc. | |
Entity Central Index Key | 0001829966 | |
Entity Tax Identification Number | 85-3201309 | |
Entity Incorporation, State or Country Code | NV | |
Entity Address, Address Line One | 3960 Howard Hughes Parkway, Suite 500 | |
Entity Address, City or Town | Las Vegas | |
Entity Address, State or Province | NV | |
Entity Address, Postal Zip Code | 89169 | |
City Area Code | 888 | |
Local Phone Number | 411-2726 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Elected Not To Use the Extended Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 14,979,642 |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Mar. 31, 2024 | Sep. 30, 2023 |
Current assets: | ||
Cash | $ 632,975 | $ 304,709 |
Accounts receivable, net | 552,358 | 643,254 |
Prepaid expenses and other current assets | 990,331 | 1,331,201 |
Total current assets | 2,175,664 | 2,279,164 |
Long term assets: | ||
Fixed assets, net | 94,009 | 161,213 |
Intangible assets, net | 3,129,951 | 3,701,609 |
Goodwill | 9,146,237 | 8,962,652 |
Total assets | 14,545,861 | 15,104,638 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 23,220,066 | 22,775,031 |
Borrowings, current portion | 46,097,207 | 39,252,130 |
Liabilities to users | 821,298 | 937,948 |
Total current liabilities | 70,138,571 | 62,965,109 |
Long-Term Liabilities: | ||
Borrowings, net of current portion | 586,472 | 559,597 |
Total liabilities | 70,725,043 | 63,524,706 |
COMMITMENTS AND CONTINGENCIES (Note 6) | ||
Stockholders' deficit: | ||
Preferred Stock, $0.001 par value, 10,000,000 shares authorized, 0 issued and outstanding | 0 | 0 |
Common Stock; $0.001 par value, 500,000,000 shares authorized ,14,979,642 shares issued and outstanding | 14,980 | 14,980 |
Additional paid-in capital | 103,711,246 | 103,255,793 |
Accumulated other comprehensive income (loss) | 118,037 | (532,401) |
Accumulated deficit | (160,023,445) | (151,158,440) |
Total stockholders’ deficit | (56,179,182) | (48,420,068) |
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT | $ 14,545,861 | $ 15,104,638 |
CONSOLIDATED BALANCE SHEETS (_2
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2024 | Sep. 30, 2023 |
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 | 500,000,000 | 500,000,000 |
Common stock, shares issued | 14,979,642 | 14,979,642 |
Common stock, shares outstanding | 14,979,642 | 14,979,642 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Mar. 31, 2024 | Mar. 31, 2023 | |
Income Statement [Abstract] | ||||
Revenue | $ 3,522,458 | $ 11,580,490 | $ 7,806,513 | $ 25,988,454 |
Cost of revenue | (1,869,231) | (6,592,199) | (4,110,696) | (15,110,821) |
Gross profit | 1,653,227 | 4,988,291 | 3,695,817 | 10,877,633 |
Operating expenses: | ||||
Sales and marketing expenses | 1,287,516 | 2,313,235 | 3,072,695 | 6,680,630 |
Product and technology expenses | 164,662 | 242,035 | 297,625 | 536,108 |
General and administrative expenses | 2,125,952 | 3,397,469 | 4,785,129 | 6,780,262 |
Total operating expenses | 3,578,130 | 5,952,739 | 8,155,449 | 13,997,000 |
Loss from operations | (1,924,903) | (964,448) | (4,459,632) | (3,119,367) |
Other expenses: | ||||
Interest expense | (1,704,788) | (2,688,077) | (3,291,176) | (5,719,425) |
Loss on derivative | 0 | 0 | 0 | (142,187) |
Foreign currency gain (loss) | (1,415,937) | (359,150) | (1,114,197) | (2,588,461) |
Total other expense | (3,120,725) | (3,047,227) | (4,405,373) | (8,450,073) |
Loss before provision for income taxes | (5,045,628) | (4,011,675) | (8,865,005) | (11,569,440) |
Provision for income taxes | 0 | 0 | 0 | 0 |
Net loss | (5,045,628) | (4,011,675) | (8,865,005) | (11,569,440) |
Preferred stock dividends | 0 | (1,557,576) | 0 | (3,094,545) |
Net loss attributable to common shareholders | (5,045,628) | (5,569,251) | (8,865,005) | (14,663,985) |
Other comprehensive income | ||||
Foreign currency translation income | 1,139,216 | 1,329,046 | 650,438 | 7,685,156 |
Total other comprehensive income | 1,139,216 | 1,329,046 | 650,438 | 7,685,156 |
Comprehensive loss | $ (3,906,412) | $ (4,240,205) | $ (8,214,567) | $ (6,978,829) |
Net loss per common share - basic | $ (0.34) | $ (7.60) | $ (0.59) | $ (22.54) |
Net loss per common share - diluted | $ (0.34) | $ (7.60) | $ (0.59) | $ (22.54) |
Weighted average common shares outstanding - basic | 14,979,642 | 732,923 | 14,979,642 | 650,709 |
Weighted average common shares outstanding - diluted | 14,979,642 | 732,923 | 14,979,642 | 650,709 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) (Unaudited) - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | AOCI Attributable to Parent [Member] | Retained Earnings [Member] | Total |
Beginning balance, value at Sep. 30, 2022 | $ 38 | $ 555 | $ 91,957,856 | $ (7,365,129) | $ (62,827,744) | $ 21,765,576 |
Beginning balance, shares at Sep. 30, 2022 | 37,700 | 555,153 | ||||
Stock-based compensation | $ 1 | 503,104 | 503,105 | |||
Stock-based compensation, shares | 692 | |||||
Shares issued for conversion of debt | $ 20 | 299,980 | 300,000 | |||
Shares issued for conversion of debt, shares | 20,000 | |||||
Preferred share dividends | 1,536,969 | (1,536,969) | ||||
Net loss | (7,557,765) | (7,557,765) | ||||
Comprehensive income | 6,356,110 | 6,356,110 | ||||
Ending balance, value at Dec. 31, 2022 | $ 38 | $ 576 | 94,297,909 | (1,009,019) | (71,922,478) | 21,367,026 |
Ending balance, shares at Dec. 31, 2022 | 37,700 | 575,845 | ||||
Beginning balance, value at Sep. 30, 2022 | $ 38 | $ 555 | 91,957,856 | (7,365,129) | (62,827,744) | 21,765,576 |
Beginning balance, shares at Sep. 30, 2022 | 37,700 | 555,153 | ||||
Net loss | (11,569,440) | |||||
Ending balance, value at Mar. 31, 2023 | $ 38 | $ 838 | 102,887,561 | 320,027 | (77,491,729) | 25,716,735 |
Ending balance, shares at Mar. 31, 2023 | 37,700 | 838,158 | ||||
Beginning balance, value at Dec. 31, 2022 | $ 38 | $ 576 | 94,297,909 | (1,009,019) | (71,922,478) | 21,367,026 |
Beginning balance, shares at Dec. 31, 2022 | 37,700 | 575,845 | ||||
Common stock issued for cash | $ 212 | 5,921,770 | 5,921,982 | |||
Common stock issued for cash, shares | 212,418 | |||||
Stock-based compensation | $ 1 | 377,694 | 377,695 | |||
Stock-based compensation, shares | 1,050 | |||||
Shares issued for conversion of debt | $ 49 | 732,612 | 732,661 | |||
Shares issued for conversion of debt, shares | 48,845 | |||||
Preferred share dividends | 1,557,576 | (1,557,576) | ||||
Net loss | (4,011,675) | (4,011,675) | ||||
Comprehensive income | 1,329,046 | 1,329,046 | ||||
Ending balance, value at Mar. 31, 2023 | $ 38 | $ 838 | 102,887,561 | 320,027 | (77,491,729) | 25,716,735 |
Ending balance, shares at Mar. 31, 2023 | 37,700 | 838,158 | ||||
Beginning balance, value at Sep. 30, 2023 | $ 14,980 | 103,255,793 | (532,401) | (151,158,440) | (48,420,068) | |
Beginning balance, shares at Sep. 30, 2023 | 14,979,642 | |||||
Stock-based compensation | 240,828 | 240,828 | ||||
Net loss | (3,819,377) | (3,819,377) | ||||
Comprehensive income | (488,778) | (488,778) | ||||
Ending balance, value at Dec. 31, 2023 | $ 14,980 | 103,496,621 | (1,021,179) | (154,977,817) | (52,487,395) | |
Ending balance, shares at Dec. 31, 2023 | 14,979,642 | |||||
Beginning balance, value at Sep. 30, 2023 | $ 14,980 | 103,255,793 | (532,401) | (151,158,440) | (48,420,068) | |
Beginning balance, shares at Sep. 30, 2023 | 14,979,642 | |||||
Net loss | (8,865,005) | |||||
Ending balance, value at Mar. 31, 2024 | $ 14,980 | 103,711,246 | 118,037 | (160,023,445) | (56,179,182) | |
Ending balance, shares at Mar. 31, 2024 | 14,979,642 | |||||
Beginning balance, value at Dec. 31, 2023 | $ 14,980 | 103,496,621 | (1,021,179) | (154,977,817) | (52,487,395) | |
Beginning balance, shares at Dec. 31, 2023 | 14,979,642 | |||||
Stock-based compensation | 214,625 | 214,625 | ||||
Net loss | (5,045,628) | (5,045,628) | ||||
Comprehensive income | 1,139,216 | 1,139,216 | ||||
Ending balance, value at Mar. 31, 2024 | $ 14,980 | $ 103,711,246 | $ 118,037 | $ (160,023,445) | $ (56,179,182) | |
Ending balance, shares at Mar. 31, 2024 | 14,979,642 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 6 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Cash flow from operating activities: | ||
Net loss | $ (8,865,005) | $ (11,569,440) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Amortization of debt discount, issuance costs | 26,875 | 2,554,317 |
Amortization of right of use assets | 0 | 77,300 |
Depreciation and amortization expense | 709,437 | 3,416,330 |
Stock-based compensation | 455,453 | 880,800 |
Derivative loss | 0 | 142,187 |
Foreign exchange gain (loss) | 1,114,197 | 2,588,458 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 103,985 | 34,400 |
Prepaid expenses and other current assets | 360,424 | 784,200 |
Accounts payable and accrued liabilities | 2,128,857 | (5,695,950) |
Current lease liabilities | 0 | (63,251) |
Liabilities to users | (136,278) | (396,672) |
Net cash used in operating activities | (4,102,055) | (7,247,321) |
Cash flow from investing activities: | ||
Purchase of fixed assets | 0 | (11,208) |
Net cash used in investing activities | 0 | (11,208) |
Cash flow from financing activities: | ||
Proceeds from settlement of derivative instruments | 0 | 973,965 |
Repayment of senior note | 0 | (3,000,000) |
Proceeds from revolving line of credit | 4,000,000 | 5,921,982 |
Net cash provided by financing activities | 4,000,000 | 3,895,947 |
Effect of foreign exchange rates on cash | 430,321 | 1,345,448 |
NET CHANGE IN CASH | 328,266 | (2,017,134) |
CASH AT BEGINNING OF PERIOD | 304,709 | 5,486,210 |
CASH AT END OF PERIOD | 632,975 | 3,469,076 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 0 | 2,017,134 |
Cash paid for income taxes | $ 0 | $ 0 |
Non-cash transactions | ||
Stock issued for conversion of notes payable | 0 | 1,032,661 |
Preferred share dividends | $ 0 | $ 3,094,545 |
Increase in borrowings from interest expense | $ 2,628,078 | $ 0 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Mar. 31, 2024 | Dec. 31, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2024 | Mar. 31, 2023 | |
Pay vs Performance Disclosure [Table] | ||||||
Net Income (Loss) | $ (5,045,628) | $ (3,819,377) | $ (4,011,675) | $ (7,557,765) | $ (8,865,005) | $ (11,569,440) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Mar. 31, 2024 | |
Insider Trading Arrangements [Line Items] | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
ORGANIZATION, NATURE OF OPERATI
ORGANIZATION, NATURE OF OPERATIONS AND GOING CONCERN | 6 Months Ended |
Mar. 31, 2024 | |
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 EBET, Inc. (“EBET” or “the Company”) was formed on September 24, 2020 as a Nevada corporation. EBET is a technology company operating platforms focused on igaming including casino, sportsbook and esports events. The Company operates under an operating services agreement with Aspire Global plc (“Aspire”) allowing EBET to provide online betting services to various countries around the world. Acquisition of the B2C business of Aspire Global plc 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 and various Aspire group companies to acquire all of the issued and outstanding shares of Karamba Limited. The Acquisition Agreement closed on November 29, 2021. The total acquisition price was € 65,000,000 50,000,000 10,000,000 5,000,000 Going Concern The accompanying unaudited consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The continuation of the Company as a going concern is dependent upon the ability of the Company to obtain equity or debt financings to continue operations. The Company has a history of and expects to continue to report negative cash flows from operations and a net loss. The Company's forecasts for 2024 and beyond indicate that it will need additional funding in order to have sufficient financial resources to continue to settle its debts as they fall due. The Company has taken significant measures in an attempt to increase the profitability of its business in the short term. These actions include optimizing the efficiency of marketing campaigns, reducing the total number of employees and contractors, terminating software and other immaterial contracts as well as generally reducing the operating costs of the business. These efforts have also resulted in an increased focus on the Company’s i-gaming business and a significant reduction in the investment of the Company’s esports products and technologies, which resulted in the recognition of an impairment losses on certain goodwill, intangible assets and fixed assets in prior periods. As a result of the Company’s actions as referenced above, it does not expect to launch its esports products in the foreseeable future. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These unaudited consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company could seek but is unlikely to seek additional funding through a combination of equity offerings, debt financings, government or other third-party funding, commercialization, marketing and distribution arrangements, other collaborations, strategic alliances and licensing arrangements and delay planned cash outlays or a combination thereof. Management cannot be certain that such events or a combination thereof can be achieved. The Company has entered into a Fourth Amendment to Credit Agreement (“Amendment No 4.”) pursuant to which, among other items, the maximum available amount of the Revolving Loan was increased to $ 11.0 millio |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Mar. 31, 2024 | |
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 unaudited consolidated financial statements are as follows: Basis of Presentation and Consolidation The accompanying unaudited consolidated financial statements of the Company, include the accounts of the Company and its wholly-owned subsidiaries, and have been prepared in accordance with generally accepted accounting principles accepted in the United States (“U.S. GAAP”) for interim unaudited financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited consolidated financial statements include all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary in order to make the condensed financial statements not misleading. Operating results for the three and six months ended March 31, 2024, are not necessarily indicative of the final results that may be expected for the year ended September 30, 2024. For more complete financial information, these unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended September 30, 2023 included in our Form 10-K filed with the SEC. Notes to the unaudited consolidated financial statements which would substantially duplicate the disclosures contained in the audited consolidated financial statements for the most recent fiscal period, as reported in the Form 10-K, have been omitted. All intercompany accounts, transactions and balances have been eliminated in consolidation. Certain reclassifications have been made to prior period amounts to conform to the current year presentation. 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. Periodically, the Company may carry cash balances at financial institutions in excess of the federally insured limit of $ 250,000 311,337 Accounts Receivable and Allowance for Credit Losses Accounts receivables are recorded at amortized cost, less any allowance for credit losses. Accounts receivable consists primarily of amounts due from our platform provider. The receivable balance owed to the Company represents the net amount owed to the Company by Aspire related to the strategic agreement for the Company’s i-gaming platform and is stated at historical cost less any allowance for doubtful accounts. The Company recognizes an allowance for losses on accounts receivable in an amount equal to the estimated probable losses net of recoveries. The allowance is based on an analysis of historical bad debt experience, current receivables aging, and expected future bad debts, as well as an assessment of specific identifiable customer accounts considered at risk or uncollectible. The allowance for credit losses was $ 0 Intangible Assets The Company’s intangible assets consist primarily of customer relationships, trademarks and internet domain names. Certain intangible assets have a defined useful life and others are classified as indefinite-lived intangible assets. Intangible assets with a defined useful life are amortized over their estimated useful economic lives on a straight-line basis. 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. The Company did no Goodwill Goodwill represents the excess of the purchase price over the fair value of assets acquired and liabilities assumed. Goodwill is reviewed for impairment at least annually or whenever events or changes in circumstances indicate that the carrying amount may be impaired. When assessing goodwill for impairment, the Company uses qualitative and if necessary, quantitative methods in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 350, Goodwill Circumstances that could indicate impairment and require the Company to perform a quantitative impairment test include a significant decline in the Company’s financial results, a significant decline in the Company’s enterprise value relative to its book value, an unanticipated change in competition of the Company’s market share and a significant change in the Company’s strategic plans. The Company did no 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. 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. The user balances are maintained by the Company’s third-party platform provider, and the Company has an asset of an equivalent amount included within Prepaid expenses and other current assets Revenue Recognition The Company recognizes revenue in accordance with ASC Topic 606, Revenue From Contracts With Customers · Identification of the contract with a customer · Identification of the performance obligations in the contract · Determination of the transaction price · Allocation of the transaction price to the performance obligations in the contract · Recognition of revenue when, or as, the Company satisfies a performance obligation No single customer accounted for more than 10% of revenue for the three and six months ended March 31, 2024 or 2023. In addition, no disaggregation of revenue is required because all current revenue is generated from gaming revenue. i-gaming, or online casino, typically includes digital versions of wagering games available in land-based casinos, such as blackjack, roulette and slot machines. For these offerings, the Company functions similarly to land-based casinos, generating revenue through casino hold, as users play against the house. i-gaming revenue is generated from user wagers net of payouts made on users’ winning wagers and incentives awarded to users. Sportsbook or sports betting involves a user wagering money on an outcome or series of outcomes occurring. When a user’s wager wins, the Company pays the user a pre-determined amount known as fixed odds. Sportsbook revenue is generated by setting odds such that there is a built-in theoretical margin in each sports wagering opportunity offered to users. Sportsbook revenue is generated from users’ wagers net of payouts made on users’ winning wagers and incentives awarded to users. Performance Obligations The Company owns an online betting platform allowing users to bet on a variety of i-gaming or casino-style games online. Each wager placed by users create a single performance obligation for the Company to administer each event wagered. The performance obligation is satisfied once the event wagered on has been completed. Gross gaming revenue is the aggregate of gaming wins and losses based on results of each event that customers wager bets on. Transaction Price Considerations Variability in the transaction price arises primarily due to market-based pricing, cash discounts, revenue sharing and usage-based fees. The Company offers loyalty programs, free plays, deposit bonuses, discounts, rebates and other rewards and incentives to its customers. Revenue for Sportsbook and i-gaming is collected prior to the contest or event and is fixed once the outcome is known. Prizes paid and payouts made to users are recognized when awarded to the player. Cost of Revenue Cost of revenue consists of third-party costs associated with the betting software platform and gaming taxes. Sales and Marketing Expenses Sales and marketing expenses consist primarily of expenses associated with amounts paid to affiliates, 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. 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 component of marketing expense. Advertising costs are expensed as incurred. 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 include costs related to the compensation of the Company’s administrative functions, insurance costs, professional fees and consulting expense. 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. The Company does not have any assets or liabilities that are required to be measured and recorded at fair value on a recurring basis. The carrying value of the Company’s cash, accounts receivable, accounts payable and borrowings under its credit facilities and other notes payable approximate their fair value due to the short-term nature of the instruments. 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 (loss). The gains or losses on transactions denominated in currencies other than an entity’s functional currency are included in the unaudited consolidated statements of operations. Embedded Conversion Features The Company evaluates embedded conversion features within convertible debt under ASC 815 “ Derivatives and Hedging Debt with Conversion and Other Options Recently Issued Accounting Pronouncements From time to time, new accounting pronouncements are issued by the 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. |
BORROWINGS
BORROWINGS | 6 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
BORROWINGS | NOTE 3 – BORROWINGS The following is a summary of borrowings outstanding as at March 31, 2024 and September 30, 2023: Schedule of borrowings outstanding March 31, 2024 Contractual Interest Principal outstanding balance Principal outstanding balance Unamortized Total Accrued Interest rate Cur Local USD USD USD USD Senior Note 16.5 USD $ 28,663,302 $ 28,663,302 $ – $ 28,663,302 $ – Revolving Note 16.5 USD 6,005,405 6,005,405 – 6,005,405 – Note due to Aspire 10 EUR 10,000,000 10,811,000 – 10,811,000 2,685,373 Convertible notes 10 USD 617,500 617,500 – 617,500 62,681 Other 0 USD 675,000 675,000 (88,528 ) 586,472 – Total borrowings $ 46,772,207 $ (88,528 ) $ 46,683,679 $ 2,748,054 Current $ 46,097,207 $ 2,748,054 Long-term 586,472 – Total borrowings $ 46,683,679 $ 2,748,054 September 30, 2023 Contractual Interest Principal outstanding balance Principal outstanding balance Unamortized Total Accrued Interest rate Cur Local USD USD USD USD Senior Note 15.0 USD $ 26,350,630 $ 26,350,630 $ – $ 26,350,630 $ – Revolving Note 15.0 USD 1,690,000 1,690,000 – 1,690,000 – Note due to Aspire 10 EUR 10,000,000 10,594,000 – 10,594,000 2,049,029 Convertible notes 10 USD 617,500 617,500 – 617,500 62,681 Other 0 USD 675,000 675,000 (115,403 ) 559,597 – Total borrowings $ 39,927,130 $ (115,403 ) $ 39,811,727 $ 2,111,710 Current $ 39,252,130 $ 2,111,710 Long-term 559,597 – Total borrowings $ 39,811,727 $ 2,111,710 Senior Notes On November 29, 2021, the Company entered into 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 $ 30,000,000 750,000 The Senior Note 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 the Credit Agreement being true and correct; and (iii) the Lender granting its written approval thereof in its sole discretion. The Senior Note 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 a portion of 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. 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. As of March 31, 2022, the Company had not maintained compliance with the covenants of the Senior Notes and obtained a waiver from its lender which waiver was contingent on the completion of an equity raise of $3.5 million, which was completed in June 2022. In consideration for obtaining a waiver from the compliance with certain covenants, the Company agreed to amend the Senior Notes such that $5,000,000 of the principal loan balance becomes convertible at $107.40 per share commencing after the Company raises the $5,000,000 of common equity (including the foregoing $3.5 million). On February 2, 2023, the conversion option became exercisable upon closing of the offering that generated $6,500,000 of gross proceeds. In connection with the Loan, the Company issued the Lender a warrant (the “Lender Warrant”) to purchase 52,262 shares of Company common stock at an initial exercise price of $750 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, which was received on February 9, 2022, the number of shares underlying the Lender Warrant shall also be adjusted for issuances to which the “weighted-average” anti-dilution protection applies. Pursuant to the foregoing anti-dilution provision, in connection with the $3.5 million offering completed in June 2022, the number of shares underlying the warrant increased to 55,152 and the exercise price was reduced to $710.70. Pursuant to the foregoing anti-dilution provision, in connection with the $6.5 million offering completed in February 2023, the number of shares underlying the warrant increased to 77,082 508.50 77,082 Between September 2, 2022 and June 20, 2023, the Lender provided the Company with multiple limited waivers of the Senior Note covenants in exchange for aggregate payments of $ 609,558 3,000,000 On June 30, 2023, the Company, the subsidiaries of the Company and the Lender entered into a forbearance agreement (the “Forbearance Agreement”). Pursuant to the Forbearance Agreement, the Company acknowledged, among other items, that, as June 30, 2023, it was in default under the Credit Agreement, the Lender had the right to accelerate the Loan, and the Lender had the right to impose the default rate of interest under the Credit Agreement. Pursuant to the Forbearance Agreement, the Lender agreed to forbear from exercising its rights and remedies against the Company and the Guarantors under the Credit Documents until the earlier of September 15, 2023 or a Termination Event. A Termination Event under the Forbearance Agreement consists of the filing of a bankruptcy proceeding by the Company or any Guarantor, the occurrence of a new event of default under the Credit Agreement, or the failure by the Company or any Guarantor to perform any material requirement, covenant, or obligation under the Forbearance Agreement. During the forbearance period, the Lender agreed, among other items, not to accelerate the Loan, initiate any bankruptcy filings, or apply any default rates of interest. As partial consideration for the Lender agreeing to enter into the Forbearance Agreement, the Company paid a forbearance fee equal to 50 basis points of the outstanding principal amount of the Loan (or $ 130,425 2 On October 1, 2023, the Company, the subsidiaries of the Company and the Lender entered into an amendment number 2 to the Forbearance Agreement (the “Forbearance Amendment No. 2”). The Forbearance Amendment No. 2 extended the Forbearance Date from October 31, 2023 until June 30, 2025 16.5 In connection with the Forbearance Agreement, the Lender agreed to provide the Company with a revolving line of credit in the amount of $2.0 million (the “Revolving Note”), with any advances under the Revolving Note to be made in the sole discretion of the Lender. On September 29, 2023, the Lender agreed to increase the maximum available amount of the Revolving Loan to $ 4 40,000 November 29, 2024 15.0 Effective October 1, 2023, the Company entered into an amended and restated note conversion option agreement (the “Option Agreement”) with the Lender. Pursuant to the Option, the Company agreed that Lender have the right to convert any amounts due pursuant to the Loan and the Revolving Note into shares of Company common stock at a conversion price of $1.25 per share with respect to the initial $5.0 million and at a conversion price of $2.50 per share with respect to the remaining amounts. In addition, the Company agreed to file a registration statement registering the resale of the shares of Company common stock underlying the Loan within 45 days of the date of the Option and to use its commercially reasonable efforts to cause such registration statement to become effective within 120 days of the date of the Option. The Option Agreement provides that the Lender (together with its affiliates) may not convert any portion of the Loan or Revolving Loan during an initial 45-day lockup or to the extent that the Lender would own more than 9.99% of the Company’s outstanding common stock immediately after exercise, except that upon prior notice from the Lender to the Company, the Lender may increase or decrease the amount of ownership of outstanding stock after conversion of the Loan, provided that any modification will not be effective until 61 days following notice to the Company. On January 9, 2024, the Company, the subsidiaries of the Company and the Lender entered into a Third Amendment to Credit Agreement (the “Amendment No. 3”). The Amendment No. 3 increased the maximum available amount of the Revolving Loan from $4.0 million to $ 6.5 As a result of the event of default on the Senior Note during the fiscal year ended September 30, 2023, the Company amortized all remaining debt discount and debt issuance costs associated with the Senior Note. On April 12, 2024, the parties entered into a Fourth Amendment to Credit Agreement (“Amendment No 4.”) pursuant to which, among other items, the maximum available amount of the Revolving Loan was increased to $ 11.0 million On May 2, 2024, the Company, the subsidiaries of the Company and the Lender entered into Forbearance Agreement Amendment No. 3 (the “Forbearance Amendment No. 3”). The Forbearance Amendment No. 3 acknowledges the Company’s suspension from trading or failure to be listed on the Nasdaq Capital Market for more than 30 calendar days, the issuance of an arbitration award against the Company on or about January 5, 2024 and certain failures to maintain good standing of certain subsidiary entities each being a Termination Event under the Forbearance Agreement, as amended. The Forbearance Amendment No. 3 postpones the effectiveness of the Termination Event to the earlier to occur of June 17, 2024 or the occurrence of another event of default. During the three months ended March 31, 2024 and 2023, the Company recognized interest expense of $ 0 1,264,933 0 2,529,866 no Note due to Aspire In connection with the acquisition of aspire in October 2021, the Company entered into a € 10,000,000 10 Convertible Notes and Other On September 1, 2020, ESEG Limited, a wholly owned subsidiary of the Company, entered into three promissory notes, with a combined principal amount of $ 2,100,000 10 March 1, 2022 675,000 67,167 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 $ 2,100,000 187,500 12,500 305,609 106,891 27,500 989,391 138,266 75,179 617,500 62,681 During the three months ended March 31, 2024, the Company recorded a charge of $ 26,875 24,451 26,875 24,451 |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 6 Months Ended |
Mar. 31, 2024 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY | NOTE 4 – STOCKHOLDERS’ EQUITY On July 26, 2023, the Company increased its authorized common shares to 500,000,000 0.001 10,000,000 0.001 Pursuant to such authority granted by the Company’s stockholders, the Company’s board of directors approved a one-for-thirty (1:30) reverse stock split Preferred Stock On October 1, 2021, in connection with the acquisition of the B2C segment of Aspire Global plc, 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 , an aggregate of 37,700 1,000 37,700,000 During the year ended September 30, 2023, the Preferred Stock was fully converted by the holders. There were no The Warrants are exercisable and expire on the fifth anniversary thereafter. The Warrants were initially to be exercisable at an exercise price of $900 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. Notwithstanding the foregoing anti-dilution provision, in connection with the $3.5 million offering completed in June 2022, the exercise price was reduced to $45.00. In February 2023, the warrants exercise price was reset to $ 30.60 The holders of the Warrants will not have the right to exercise any portion of the 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. Warrants As discussed above, the Company has issued common stock warrants in connection with its fundraising activities to preferred shareholders, its lender and convertible notes issued during previous years. The following table summarizes warrant activity during the six months ended March 31, 2024: Schedule of warrant activity Common Stock Warrants Shares Weighted Weighted Outstanding at September 30, 2023 435,491 $ 122.04 3.91 Granted – – – Cancelled (77,082 ) 508.50 2.91 Expired – – – Exercised – – – Outstanding at March 31, 2024 358,409 $ 32.88 3.57 Exercisable at March 31, 2024 358,409 $ 32.88 3.57 At March 31, 2024, the outstanding and exercisable common stock warrants had an aggregate intrinsic value of $ 3,549 2020 Stock Plan In December 2020, the Company adopted the 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 5,000,000 45,841 204,159 Common Stock Awards The Company has awarded restricted stock units and shares of common stock to various employees, consultants and officers under the 2020 Plan. The majority of these awards will vest equally over terms of up to four years. At March 31, 2024, the Company had 6,974 During the three months ended March 31, 2024 and 2023, the Company recognized a total of $ 170,549 310,135 341,097 682,925 1,354,434 Options The following table summarizes option activity during the six months ended March 31, 2024: Schedule of option activity Common Stock Options Shares Weighted Weighted Outstanding at September 30, 2023 20,287 $ 113.55 5.37 Granted – – – Cancelled (275 ) 671.10 7.69 Expired – – – Exercised – – – Outstanding at March 31, 2024 20,012 $ 105.88 4.83 Exercisable at March 31, 2024 19,328 $ 86.52 4.75 During the three months ended March 31, 2024 and 2023, the Company recognized stock-based compensation expense of $ 45,953 67,560 114,357 197,875 217,775 |
LONG-LIVED ASSETS
LONG-LIVED ASSETS | 6 Months Ended |
Mar. 31, 2024 | |
Property, Plant and Equipment [Abstract] | |
LONG-LIVED ASSETS | NOTE 5 – LONG-LIVED ASSETS Fixed Assets The Company’s fixed assets consisted of the following as of March 31, 2024 and September 30, 2023: Schedule of fixed assets March 31, 2024 September 30, 2023 Software $ 270,275 $ 264,850 Furniture and fixtures 396,178 388,226 Total fixed assets 666,453 653,076 Accumulated depreciation (572,444 ) (491,863 ) Fixed assets, net $ 94,009 $ 161,213 Depreciation expense was $ 35,705 61,283 71,085 85,922 Intangible Assets – Aspire b2C Acquisition The Company acquired intangible assets as part of the Aspire B2C Business Acquisition in November 2021. The acquired intangibles consisted of the following as of March 31, 2024 and September 30, 2023: Schedule of intangible assets acquired March 31, 2024 September 30, 2023 Trademarks and tradenames, indefinite lives $ 2,255,269 $ 2,210,000 Trademarks and tradenames, three year lives 4,625,881 4,533,030 Other 12,278 12,693 Total acquired intangibles 6,893,428 6,755,723 Accumulated amortization (3,763,477 ) (3,054,114 ) Acquired intangible assets, net $ 3,129,951 $ 3,701,609 The Karamba trademarks and tradenames represent approximately 75% of the total of the acquired intangibles and have an indefinite useful life. The remaining trademarks and tradenames and customer relationships are amortized over an estimated useful life of three years. Amortization expense on the Aspire intangible assets was $ 324,768 1,706,960 638,352 3,330,408 Amortization for the years ended September 30, 2024 and 2025 is expected to be approximately $ 1,340,598 220,366 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 6 – COMMITMENTS AND CONTINGENCIES Financial Advisor’s Claims and Award The Company’s previous financial advisor, Boustead Securities LLC (“Advisor”) has alleged a breach by the Company over the termination of their engagement and the timing of the payment and amount of the fees owed to the Advisor (collectively the “Claims”). On June 2, 2022, the Advisor named EBET in an arbitration proceeding with Financial Industry Regulatory Authority (“FINRA”) in connection with the Claims. The Statement of Claim alleged damages of $5.7 million and sought a declaration that the Company be required to utilize the Advisor for a certain follow-on offering pursuant to an alleged right of first refusal between the parties. On August 4, 2022, EBET, Inc. counterclaimed against Boustead Securities, LLC for tortious interference with prospective economic advantage and demanded damages and attorneys’ fees in an amount to be determined. Boustead Securities, LLC’s current Second Amended Statement of Claim, filed on May 24, 2023, alleges $12 million in damages and no longer seeks declaratory relief. In response to Boustead Securities, LLC’s Second Amended Statement of Claim, the Company maintains its counterclaim and all affirmative defenses previously asserted. The arbitration occurred on November 6, 2023 and ended on November 8, 2023. On January 5, 2024, the arbitration panel awarded the Advisor $ 15.2 million Other Contingencies On June 26, 2023, a former vendor of the Company, Litebox USA, LLC filed a Complaint against EBET, Inc. alleging causes of action including Breach of Contract; Breach of the Implied Covenant of Good Faith and Fair Dealing; Unjust Enrichment; Quantum Meruit; Promissory Estoppel; Open Book Account/Account Stated; and other causes of action. The action stems from an alleged nonpayment pursuant to a Master Service Agreement and three separate Statements of Work for the alleged development of software thereunder. EBET, Inc. filed a demurrer to this complaint and the hearing on same is set for June 2024. EBET intends to vigorously defend this matter. On September 28, 2023, EBET, Inc. filed a lawsuit in the State of Nevada against Aspire Global PLC, AG Communications and affiliated entities asserting damages in an amount of no less than 65,000,000 Euro plus punitive and other damages proven at trial (“Aspire Litigation”) and including causes of action against Aspire and the other defendants for fraud and material breach of the Share Purchase Agreement whereon the Company had acquired the i-gaming B2C assets including the Karamba, Hopa, Griffon Casino, BetTarget, Dansk777, and GenerationVIP domains, sites, player database and other related assets and also related to the operator service agreements and Promissory Note entered concurrent with the closing of the Share Purchase Agreement. On November 7, 2023, Aspire and the other defendants removed the subject matter to the United States District Court for the District of Nevada. On December 12, 2024, Aspire filed a Motion to Dismiss our Complaint in the matter and on January 9, 2024 we filed an Opposition to Aspire’s Motion to Dismiss. On February 23, 2024, EBET, Inc. filed a Motion for Leave to File a First Amended Complaint, which included a proposed First Amended Complaint that added Neogames S.A. and NeoGames Connect S.a.r.l. as defendants. On May 8, 2024, the United States District Court for the District of Nevada granted EBET, Inc.’s Motion for Leave to File its First Amended Complaint. EBET, Inc. subsequently filed its First Amended Complaint on May 13, 2024.The Aspire Litigation is material to the Company and the result of such litigation is highly likely to have a material impact on the Company going forward. Other Commitments On June 30, 2023, the Company agreed to enter into amendments to the employment agreements (each, a “Retention Letter”), with each of Aaron Speach, the Company’s Chief Executive Officer, and Matthew Lourie, the Company’s Chief Financial Officer. Pursuant to the Retention Letters, (a) Mr. Speach was entitled to receive a cash retention bonus of $ 175,000 (b) Mr. Lourie was entitled to an increase in his base salary to $ 320,000 In addition, pursuant to the Retention Letters, each of Mr. Speach and Mr. Lourie will be eligible to receive a cash transaction bonus equal to 0.95% of the gross proceeds of any strategic transaction (a “Transaction”), provided that the net proceeds from the Transaction are at least $ 26 If Mr. Speach and Mr. Lourie are terminated without “cause” prior to June 30, 2024, the Company agreed to pay a cash severance payment of: (a) with respect to Mr. Speach, the greater of 1.0 times Mr. Speach’s base salary or the severance payable pursuant to Mr. Speach’s current employment agreement; and (b) with respect to Mr. Lourie, 0.5 times Mr. Lourie’s base salary. In addition to the amounts payable to Messrs. Speach and Lourie set forth above, the Company also agreed on June 30, 2023 to pay additional retention bonuses under the executive retention plan to two consultants and advisors of up to $ 310,000 26 |
LOSS PER COMMON SHARE
LOSS PER COMMON SHARE | 6 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
LOSS PER COMMON SHARE | NOTE 7 – LOSS PER COMMON SHARE The basic net loss per common share is calculated by dividing the Company's net loss available to common shareholders by the weighted average number of common shares during the year. The diluted net loss per common share is calculated by dividing the Company's net loss available to common shareholders by the diluted weighted average number of common shares outstanding during the year. The diluted weighted average number of common shares outstanding is the basic weighted number of common shares adjusted for any potentially dilutive debt or equity. The following common shares issuable under various instruments were excluded from the calculation of diluted net loss per share due to their antidilutive effect: Schedule of antidilutive shares Three Months Ended Six Months Ended March 31, 2024 March 31, 2023 March 31, 2024 March 31, 2023 Preferred Stock – 53,947 – 53,947 Stock Options 20,012 39,858 20,012 39,858 Warrants 358,408 435,460 358,408 435,460 Convertible Debt 45,346 51,678 45,346 51,678 Total 423,766 580,943 423,766 580,943 Schedule of loss per common share Three Months Ended Six Months Ended March 31, 2024 March 31, 2023 March 31, 2024 March 31, 2023 Numerator: Net loss $ (5,045,628 ) $ (4,011,675 ) $ (8,865,005 ) $ (11,569,440 ) Preferred stock dividends – (1,557,576 ) – (3,094,545 ) Net loss attributable to common stockholders $ (5,045,628 ) $ (5,569,251 ) $ (8,865,005 ) $ (14,663,985 ) Denominator: Basic and diluted weighted average common shares 14,979,642 732,923 14,979,642 650,709 Basic and diluted net loss per common share $ (0.34 ) $ (7.60 ) $ (0.59 ) $ (22.54 ) |
TRANSACTION WITH RELATED PARTIE
TRANSACTION WITH RELATED PARTIES | 6 Months Ended |
Mar. 31, 2024 | |
Related Party Transactions [Abstract] | |
TRANSACTION WITH RELATED PARTIES | NOTE 8 – TRANSACTION WITH RELATED PARTIES The Company engaged a firm owned by Matthew Lourie, the Company’s Chief Financial Officer to provide financial reporting services. For the three months ended March 31, 2024 and 2023, the Company incurred consulting fees of $ 16,381 18,988 36,110 41,051 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation The accompanying unaudited consolidated financial statements of the Company, include the accounts of the Company and its wholly-owned subsidiaries, and have been prepared in accordance with generally accepted accounting principles accepted in the United States (“U.S. GAAP”) for interim unaudited financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited consolidated financial statements include all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary in order to make the condensed financial statements not misleading. Operating results for the three and six months ended March 31, 2024, are not necessarily indicative of the final results that may be expected for the year ended September 30, 2024. For more complete financial information, these unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended September 30, 2023 included in our Form 10-K filed with the SEC. Notes to the unaudited consolidated financial statements which would substantially duplicate the disclosures contained in the audited consolidated financial statements for the most recent fiscal period, as reported in the Form 10-K, have been omitted. All intercompany accounts, transactions and balances have been eliminated in consolidation. Certain reclassifications have been made to prior period amounts to conform to the current year presentation. |
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. Periodically, the Company may carry cash balances at financial institutions in excess of the federally insured limit of $ 250,000 311,337 |
Accounts Receivable and Allowance for Credit Losses | Accounts Receivable and Allowance for Credit Losses Accounts receivables are recorded at amortized cost, less any allowance for credit losses. Accounts receivable consists primarily of amounts due from our platform provider. The receivable balance owed to the Company represents the net amount owed to the Company by Aspire related to the strategic agreement for the Company’s i-gaming platform and is stated at historical cost less any allowance for doubtful accounts. The Company recognizes an allowance for losses on accounts receivable in an amount equal to the estimated probable losses net of recoveries. The allowance is based on an analysis of historical bad debt experience, current receivables aging, and expected future bad debts, as well as an assessment of specific identifiable customer accounts considered at risk or uncollectible. The allowance for credit losses was $ 0 |
Intangible Assets | Intangible Assets The Company’s intangible assets consist primarily of customer relationships, trademarks and internet domain names. Certain intangible assets have a defined useful life and others are classified as indefinite-lived intangible assets. Intangible assets with a defined useful life are amortized over their estimated useful economic lives on a straight-line basis. 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. The Company did no |
Goodwill | Goodwill Goodwill represents the excess of the purchase price over the fair value of assets acquired and liabilities assumed. Goodwill is reviewed for impairment at least annually or whenever events or changes in circumstances indicate that the carrying amount may be impaired. When assessing goodwill for impairment, the Company uses qualitative and if necessary, quantitative methods in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 350, Goodwill Circumstances that could indicate impairment and require the Company to perform a quantitative impairment test include a significant decline in the Company’s financial results, a significant decline in the Company’s enterprise value relative to its book value, an unanticipated change in competition of the Company’s market share and a significant change in the Company’s strategic plans. The Company did no |
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. |
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. The user balances are maintained by the Company’s third-party platform provider, and the Company has an asset of an equivalent amount included within Prepaid expenses and other current assets |
Revenue Recognition | Revenue Recognition The Company recognizes revenue in accordance with ASC Topic 606, Revenue From Contracts With Customers · Identification of the contract with a customer · Identification of the performance obligations in the contract · Determination of the transaction price · Allocation of the transaction price to the performance obligations in the contract · Recognition of revenue when, or as, the Company satisfies a performance obligation No single customer accounted for more than 10% of revenue for the three and six months ended March 31, 2024 or 2023. In addition, no disaggregation of revenue is required because all current revenue is generated from gaming revenue. i-gaming, or online casino, typically includes digital versions of wagering games available in land-based casinos, such as blackjack, roulette and slot machines. For these offerings, the Company functions similarly to land-based casinos, generating revenue through casino hold, as users play against the house. i-gaming revenue is generated from user wagers net of payouts made on users’ winning wagers and incentives awarded to users. Sportsbook or sports betting involves a user wagering money on an outcome or series of outcomes occurring. When a user’s wager wins, the Company pays the user a pre-determined amount known as fixed odds. Sportsbook revenue is generated by setting odds such that there is a built-in theoretical margin in each sports wagering opportunity offered to users. Sportsbook revenue is generated from users’ wagers net of payouts made on users’ winning wagers and incentives awarded to users. Performance Obligations The Company owns an online betting platform allowing users to bet on a variety of i-gaming or casino-style games online. Each wager placed by users create a single performance obligation for the Company to administer each event wagered. The performance obligation is satisfied once the event wagered on has been completed. Gross gaming revenue is the aggregate of gaming wins and losses based on results of each event that customers wager bets on. Transaction Price Considerations Variability in the transaction price arises primarily due to market-based pricing, cash discounts, revenue sharing and usage-based fees. The Company offers loyalty programs, free plays, deposit bonuses, discounts, rebates and other rewards and incentives to its customers. Revenue for Sportsbook and i-gaming is collected prior to the contest or event and is fixed once the outcome is known. Prizes paid and payouts made to users are recognized when awarded to the player. |
Cost of Revenue | Cost of Revenue Cost of revenue consists of third-party costs associated with the betting software platform and gaming taxes. |
Sales and Marketing Expenses | Sales and Marketing Expenses Sales and marketing expenses consist primarily of expenses associated with amounts paid to affiliates, 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. 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 component of marketing expense. Advertising costs are expensed as incurred. |
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 include costs related to the compensation of the Company’s administrative functions, insurance costs, professional fees and consulting expense. |
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. The Company does not have any assets or liabilities that are required to be measured and recorded at fair value on a recurring basis. The carrying value of the Company’s cash, accounts receivable, accounts payable and borrowings under its credit facilities and other notes payable approximate their fair value due to the short-term nature of the instruments. |
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 (loss). The gains or losses on transactions denominated in currencies other than an entity’s functional currency are included in the unaudited consolidated statements of operations. |
Embedded Conversion Features | Embedded Conversion Features The Company evaluates embedded conversion features within convertible debt under ASC 815 “ Derivatives and Hedging Debt with Conversion and Other Options |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements From time to time, new accounting pronouncements are issued by the 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. |
BORROWINGS (Tables)
BORROWINGS (Tables) | 6 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Schedule of borrowings outstanding | Schedule of borrowings outstanding March 31, 2024 Contractual Interest Principal outstanding balance Principal outstanding balance Unamortized Total Accrued Interest rate Cur Local USD USD USD USD Senior Note 16.5 USD $ 28,663,302 $ 28,663,302 $ – $ 28,663,302 $ – Revolving Note 16.5 USD 6,005,405 6,005,405 – 6,005,405 – Note due to Aspire 10 EUR 10,000,000 10,811,000 – 10,811,000 2,685,373 Convertible notes 10 USD 617,500 617,500 – 617,500 62,681 Other 0 USD 675,000 675,000 (88,528 ) 586,472 – Total borrowings $ 46,772,207 $ (88,528 ) $ 46,683,679 $ 2,748,054 Current $ 46,097,207 $ 2,748,054 Long-term 586,472 – Total borrowings $ 46,683,679 $ 2,748,054 September 30, 2023 Contractual Interest Principal outstanding balance Principal outstanding balance Unamortized Total Accrued Interest rate Cur Local USD USD USD USD Senior Note 15.0 USD $ 26,350,630 $ 26,350,630 $ – $ 26,350,630 $ – Revolving Note 15.0 USD 1,690,000 1,690,000 – 1,690,000 – Note due to Aspire 10 EUR 10,000,000 10,594,000 – 10,594,000 2,049,029 Convertible notes 10 USD 617,500 617,500 – 617,500 62,681 Other 0 USD 675,000 675,000 (115,403 ) 559,597 – Total borrowings $ 39,927,130 $ (115,403 ) $ 39,811,727 $ 2,111,710 Current $ 39,252,130 $ 2,111,710 Long-term 559,597 – Total borrowings $ 39,811,727 $ 2,111,710 |
STOCKHOLDERS_ EQUITY (Tables)
STOCKHOLDERS’ EQUITY (Tables) | 6 Months Ended |
Mar. 31, 2024 | |
Equity [Abstract] | |
Schedule of warrant activity | Schedule of warrant activity Common Stock Warrants Shares Weighted Weighted Outstanding at September 30, 2023 435,491 $ 122.04 3.91 Granted – – – Cancelled (77,082 ) 508.50 2.91 Expired – – – Exercised – – – Outstanding at March 31, 2024 358,409 $ 32.88 3.57 Exercisable at March 31, 2024 358,409 $ 32.88 3.57 |
Schedule of option activity | Schedule of option activity Common Stock Options Shares Weighted Weighted Outstanding at September 30, 2023 20,287 $ 113.55 5.37 Granted – – – Cancelled (275 ) 671.10 7.69 Expired – – – Exercised – – – Outstanding at March 31, 2024 20,012 $ 105.88 4.83 Exercisable at March 31, 2024 19,328 $ 86.52 4.75 |
LONG-LIVED ASSETS (Tables)
LONG-LIVED ASSETS (Tables) | 6 Months Ended |
Mar. 31, 2024 | |
Property, Plant and Equipment [Abstract] | |
Schedule of fixed assets | Schedule of fixed assets March 31, 2024 September 30, 2023 Software $ 270,275 $ 264,850 Furniture and fixtures 396,178 388,226 Total fixed assets 666,453 653,076 Accumulated depreciation (572,444 ) (491,863 ) Fixed assets, net $ 94,009 $ 161,213 |
Schedule of intangible assets acquired | Schedule of intangible assets acquired March 31, 2024 September 30, 2023 Trademarks and tradenames, indefinite lives $ 2,255,269 $ 2,210,000 Trademarks and tradenames, three year lives 4,625,881 4,533,030 Other 12,278 12,693 Total acquired intangibles 6,893,428 6,755,723 Accumulated amortization (3,763,477 ) (3,054,114 ) Acquired intangible assets, net $ 3,129,951 $ 3,701,609 |
LOSS PER COMMON SHARE (Tables)
LOSS PER COMMON SHARE (Tables) | 6 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
Schedule of antidilutive shares | Schedule of antidilutive shares Three Months Ended Six Months Ended March 31, 2024 March 31, 2023 March 31, 2024 March 31, 2023 Preferred Stock – 53,947 – 53,947 Stock Options 20,012 39,858 20,012 39,858 Warrants 358,408 435,460 358,408 435,460 Convertible Debt 45,346 51,678 45,346 51,678 Total 423,766 580,943 423,766 580,943 |
Schedule of loss per common share | Schedule of loss per common share Three Months Ended Six Months Ended March 31, 2024 March 31, 2023 March 31, 2024 March 31, 2023 Numerator: Net loss $ (5,045,628 ) $ (4,011,675 ) $ (8,865,005 ) $ (11,569,440 ) Preferred stock dividends – (1,557,576 ) – (3,094,545 ) Net loss attributable to common stockholders $ (5,045,628 ) $ (5,569,251 ) $ (8,865,005 ) $ (14,663,985 ) Denominator: Basic and diluted weighted average common shares 14,979,642 732,923 14,979,642 650,709 Basic and diluted net loss per common share $ (0.34 ) $ (7.60 ) $ (0.59 ) $ (22.54 ) |
ORGANIZATION, NATURE OF OPERA_2
ORGANIZATION, NATURE OF OPERATIONS AND GOING CONCERN (Details Narrative) | Oct. 02, 2021 GBP (£) | Mar. 31, 2024 USD ($) |
Restructuring Cost and Reserve [Line Items] | ||
Line of credit maximum borrowing capacity | $ | $ 11 | |
Aspire Related Companies [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Total acquisition price | £ 65,000,000 | |
Cash amount | 50,000,000 | |
Notes payables | 10,000,000 | |
Common stock shares value | £ 5,000,000 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 6 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Sep. 30, 2023 | |
Accounting Policies [Abstract] | |||
Federally insured limit | $ 250,000 | ||
Excess of FDIC insurance amount | 311,337 | ||
Allowance for credit losses | 0 | $ 0 | |
Impairment losses of intangible assets | 0 | $ 0 | |
Impairment losses on goodwill | $ 0 | $ 0 |
BORROWINGS (Details)
BORROWINGS (Details) | Mar. 31, 2024 USD ($) | Mar. 31, 2024 EUR (€) | Sep. 30, 2023 USD ($) | Sep. 30, 2023 EUR (€) |
Debt Instrument [Line Items] | ||||
Current | $ 46,097,207 | $ 39,252,130 | ||
Long-term | 586,472 | 559,597 | ||
Total borrowings | 46,683,679 | 39,811,727 | ||
Accrued Liabilities [Member] | ||||
Debt Instrument [Line Items] | ||||
Current | 2,748,054 | 2,111,710 | ||
Long-term | 0 | 0 | ||
Total borrowings | $ 2,748,054 | $ 2,111,710 | ||
Senior Notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Contractual interest rate | 16.50% | 16.50% | 15% | 15% |
Principal outstanding balance | $ 28,663,302 | $ 26,350,630 | ||
Unamortized debt discount | 0 | 0 | ||
Carrying amount | 28,663,302 | 26,350,630 | ||
Accrued Interest | $ 0 | $ 0 | ||
Revolving Note [Member] | ||||
Debt Instrument [Line Items] | ||||
Contractual interest rate | 16.50% | 16.50% | 15% | 15% |
Principal outstanding balance | $ 6,005,405 | $ 1,690,000 | ||
Unamortized debt discount | 0 | 0 | ||
Carrying amount | 6,005,405 | 1,690,000 | ||
Accrued Interest | $ 0 | $ 0 | ||
Note Due To Aspire [Member] | ||||
Debt Instrument [Line Items] | ||||
Contractual interest rate | 10% | 10% | 10% | 10% |
Principal outstanding balance | $ 10,811,000 | € 10,000,000 | $ 10,594,000 | € 10,000,000 |
Unamortized debt discount | 0 | 0 | ||
Carrying amount | 10,811,000 | 10,594,000 | ||
Accrued Interest | $ 2,685,373 | $ 2,049,029 | ||
Convertible Notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Contractual interest rate | 10% | 10% | 10% | 10% |
Principal outstanding balance | $ 617,500 | $ 617,500 | ||
Unamortized debt discount | 0 | 0 | ||
Carrying amount | 617,500 | 617,500 | ||
Accrued Interest | $ 62,681 | $ 62,681 | ||
Other Borrowings [Member] | ||||
Debt Instrument [Line Items] | ||||
Contractual interest rate | 0% | 0% | 0% | 0% |
Principal outstanding balance | $ 675,000 | $ 675,000 | ||
Unamortized debt discount | (88,528) | (115,403) | ||
Carrying amount | 586,472 | 559,597 | ||
Accrued Interest | 0 | 0 | ||
Total Borrowings [Member] | ||||
Debt Instrument [Line Items] | ||||
Principal outstanding balance | 46,772,207 | 39,927,130 | ||
Unamortized debt discount | (88,528) | (115,403) | ||
Carrying amount | 46,683,679 | 39,811,727 | ||
Accrued Interest | $ 2,748,054 | $ 2,111,710 |
BORROWINGS (Details Narrative)
BORROWINGS (Details Narrative) | 3 Months Ended | 6 Months Ended | 10 Months Ended | 12 Months Ended | |||||||||||||||
Oct. 02, 2023 | Sep. 29, 2023 USD ($) | Jun. 30, 2023 USD ($) | Nov. 29, 2021 USD ($) | Sep. 01, 2020 USD ($) shares | Mar. 31, 2024 USD ($) | Mar. 31, 2023 USD ($) | Mar. 31, 2024 USD ($) | Mar. 31, 2023 USD ($) | Jun. 20, 2023 USD ($) | Sep. 30, 2023 USD ($) shares | Sep. 30, 2022 USD ($) shares | Sep. 30, 2021 USD ($) shares | Sep. 01, 2025 USD ($) | Apr. 12, 2024 USD ($) | Jan. 09, 2024 USD ($) | Dec. 29, 2023 shares | Feb. 28, 2023 $ / shares shares | Oct. 31, 2021 EUR (€) | |
Debt Instrument [Line Items] | |||||||||||||||||||
Line of credit maximum borrowing capacity | $ 11 | $ 11 | |||||||||||||||||
Outstanding principal amount | 617,500 | 617,500 | $ 617,500 | ||||||||||||||||
Accrued interest | $ 62,681 | 62,681 | $ 62,681 | ||||||||||||||||
Amortization of debt discount | $ 26,875 | $ 2,554,317 | |||||||||||||||||
Revolving Note [Member] | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Line of credit maximum borrowing capacity | $ 4,000,000 | ||||||||||||||||||
Lender fee paid | $ 40,000 | ||||||||||||||||||
Maturity date | Nov. 29, 2024 | ||||||||||||||||||
Interest rate | 15% | ||||||||||||||||||
Revolving Note [Member] | Amendment No 3 [Member] | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Line of credit maximum borrowing capacity | $ 6,500,000 | ||||||||||||||||||
Revolving Note [Member] | Amendment No 4 [Member] | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Line of credit maximum borrowing capacity | $ 11,000,000 | ||||||||||||||||||
Forbearance Agreement [Member] | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Payments to non refundable origination fee | $ 130,425 | ||||||||||||||||||
Repayments of notes payable | $ 2,000,000 | ||||||||||||||||||
Warrants [Member] | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Warrants issued price per share | $ / shares | $ 30.60 | ||||||||||||||||||
Senior Notes [Member] | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Unsecured subordinated promissory note | $ 30,000,000 | ||||||||||||||||||
Payments to non refundable origination fee | $ 750,000 | ||||||||||||||||||
Proceeds from notes payable | $ 609,558 | ||||||||||||||||||
Repayments of notes payable | $ 3,000,000 | ||||||||||||||||||
Debt instrument, interest rate | 16.50% | 16.50% | 15% | ||||||||||||||||
Interest expense | $ 0 | $ 1,264,933 | $ 0 | 2,529,866 | |||||||||||||||
Unamortized debt discount | 0 | 0 | $ 0 | ||||||||||||||||
Senior Notes [Member] | Forbearance Agreement [Member] | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Debt instrument, maturity date | Jun. 30, 2025 | ||||||||||||||||||
Debt instrument, interest rate | 16.50% | ||||||||||||||||||
Senior Notes [Member] | Warrant [Member] | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Issuance of warrants | shares | 77,082 | ||||||||||||||||||
Warrants issued price per share | $ / shares | $ 508.50 | ||||||||||||||||||
Warrants cancelled, shares | shares | 77,082 | ||||||||||||||||||
Aspire [Member] | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Unsecured subordinated promissory note | € | € 10,000,000 | ||||||||||||||||||
Debt instrument, interest rate | 10% | ||||||||||||||||||
ESEG Promissory Notes [Member] | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Debt instrument, maturity date | Mar. 01, 2022 | ||||||||||||||||||
Debt instrument, interest rate | 10% | ||||||||||||||||||
Unamortized debt discount | $ 2,100,000 | ||||||||||||||||||
Convertible principal amount | $ 2,100,000 | ||||||||||||||||||
Principal amount converted | $ 989,391 | $ 305,609 | $ 187,500 | ||||||||||||||||
Principal amount converted into shares | shares | 75,179 | 27,500 | 12,500 | ||||||||||||||||
Accrued interest | $ 138,266 | $ 106,891 | |||||||||||||||||
Amortization of debt discount | $ 26,875 | $ 24,451 | $ 26,875 | $ 24,451 | |||||||||||||||
ESEG Promissory Notes [Member] | Two Lenders [Member] | Forecast [Member] | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Payments from lenders | $ 675,000 | ||||||||||||||||||
ESEG Promissory Notes [Member] | Warrants [Member] | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Issuance of warrants | shares | 67,167 |
STOCKHOLDERS' EQUITY (Details -
STOCKHOLDERS' EQUITY (Details - Warrant activity) - Warrants [Member] - $ / shares | 6 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Sep. 30, 2023 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Warrants outstanding, Beginning balance | 435,491 | |
Weighted average exercise price outstanding, Beginning balance | $ 122.04 | |
Weighted average remaining life in years outstanding | 3 years 6 months 25 days | 3 years 10 months 28 days |
Warrants granted | 0 | |
Weighted average exercise price, Granted | $ 0 | |
Warrants cancelled | (77,082) | |
Weighted average exercise price, Cancelled | $ 508.50 | |
Weighted average remaining life in years, Cancelled | 2 years 10 months 28 days | |
Warrants expired | 0 | |
Weighted average exercise price, Expired | $ 0 | |
Warrants exercised | 0 | |
Weighted average exercise price, Exercised | $ 0 | |
Warrants outstanding, Ending balance | 358,409 | 435,491 |
Weighted average exercise price outstanding, Ending balance | $ 32.88 | $ 122.04 |
Warrants exercisable | 358,409 | |
Weighted average exercise price, Exercisable | $ 32.88 | |
Weighted average remaining life in years, Exercisable | 3 years 6 months 25 days |
STOCKHOLDERS' EQUITY (Details_2
STOCKHOLDERS' EQUITY (Details - Option activity) - Stock Options [Member] - $ / shares | 6 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Sep. 30, 2023 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Options outstanding, Beginning balance | 20,287 | |
Weighted average exercise price outstanding, Beginning balance | $ 113.55 | |
Weighted average remaining life in years outstanding | 4 years 9 months 29 days | 5 years 4 months 13 days |
Options, Granted | 0 | |
weighted average exercise price, Granted | $ 0 | |
Options, Cancelled | (275) | |
weighted average exercise price, Cancelled | $ 671.10 | |
Weighted average remaining life in years, Cancelled | 7 years 8 months 8 days | |
Options, Expired | 0 | |
weighted average exercise price, Expired | $ 0 | |
Options, Exercised | 0 | |
weighted average exercise price, Exercised | $ 0 | |
Options outstanding, Ending balance | 20,012 | 20,287 |
Weighted average exercise price outstanding, Ending balance | $ 105.88 | $ 113.55 |
Options, Exercisable | 19,328 | |
weighted average exercise price, Exercisable | $ 86.52 | |
Weighted average remaining life in years, Exercisable | 4 years 9 months |
STOCKHOLDERS_ EQUITY (Details N
STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||||||
Oct. 02, 2021 | Mar. 31, 2024 | Mar. 31, 2023 | Mar. 31, 2024 | Mar. 31, 2023 | Sep. 30, 2023 | Jul. 26, 2023 | Feb. 28, 2023 | |
Class of Stock [Line Items] | ||||||||
Common stock, shares authorized | 500,000,000 | 500,000,000 | 500,000,000 | 500,000,000 | ||||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | 10,000,000 | 10,000,000 | ||||
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||||
Stockholders equity, reverse stock split | one-for-thirty (1:30) reverse stock split | |||||||
Preferred stock, shares outstanding | 0 | 0 | 0 | |||||
Aggregate intrinsic value, warrants | $ 3,549 | $ 3,549 | ||||||
Stock-based compensation expense | 455,453 | $ 880,800 | ||||||
Common Stock Options [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Stock-based compensation expense | 45,953 | $ 67,560 | 114,357 | 197,875 | ||||
Share-based compensation not yet recognized | $ 217,775 | $ 217,775 | ||||||
Plan 2020 [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Stock authorized under plan | 5,000,000 | 5,000,000 | ||||||
Shares remaining to be awarded under plan | 204,159 | 204,159 | ||||||
Plan 2020 [Member] | Restricted Stock Units (RSUs) [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Restricted stock units outstanding | 6,974 | 6,974 | ||||||
Plan 2020 [Member] | Common Stock Awards [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Stock-based compensation expense | $ 170,549 | $ 310,135 | $ 341,097 | $ 682,925 | ||||
Share-based compensation not yet recognized | $ 1,354,434 | $ 1,354,434 | ||||||
Plan 2020 [Member] | All Awards [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Restricted stock units outstanding | 45,841 | 45,841 | ||||||
Series A Convertible Preferred Stock [Member] | Aspire Global [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Aggregate shares of series A convertible preferred stock | 37,700 | |||||||
Stock price | $ 1,000 | |||||||
Proceeds from issuance of private placement | $ 37,700,000 | |||||||
Warrants [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Warrants issued price per share | $ 30.60 |
LONG-LIVED ASSETS (Details - Fi
LONG-LIVED ASSETS (Details - Fixed assets) - USD ($) | Mar. 31, 2024 | Sep. 30, 2023 |
Property, Plant and Equipment [Line Items] | ||
Total fixed assets | $ 666,453 | $ 653,076 |
Accumulated depreciation | (572,444) | (491,863) |
Fixed assets, net | 94,009 | 161,213 |
Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total fixed assets | 270,275 | 264,850 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total fixed assets | $ 396,178 | $ 388,226 |
LONG-LIVED ASSETS (Details - In
LONG-LIVED ASSETS (Details - Intangible assets) - USD ($) | Mar. 31, 2024 | Sep. 30, 2023 |
Finite-Lived Intangible Assets [Line Items] | ||
Total acquired intangibles | $ 6,893,428 | $ 6,755,723 |
Accumulated amortization | (3,763,477) | (3,054,114) |
Acquired intangible assets, net | 3,129,951 | 3,701,609 |
Trademarks And Tradenames Indefinite Lives [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total acquired intangibles | 2,255,269 | 2,210,000 |
Trademarks And Tradenames Three Year Lives [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total acquired intangibles | 4,625,881 | 4,533,030 |
Other Intangible Assets [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total acquired intangibles | $ 12,278 | $ 12,693 |
LONG-LIVED ASSETS (Details Narr
LONG-LIVED ASSETS (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Mar. 31, 2024 | Mar. 31, 2023 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 35,705 | $ 61,283 | $ 71,085 | $ 85,922 |
Amortization of intangible assets | 324,768 | $ 1,706,960 | 638,352 | $ 3,330,408 |
Amortization for the year end 2024 | 1,340,598 | 1,340,598 | ||
Amortization for the year end 2025 | $ 220,366 | $ 220,366 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) | 6 Months Ended |
Mar. 31, 2024 USD ($) | |
Mr Speach [Member] | |
Loss Contingencies [Line Items] | |
Cash retention bonus | $ 175,000 |
Mr Lourie [Member] | |
Loss Contingencies [Line Items] | |
Base salary | 320,000 |
Net proceeds from transaction | 26,000,000 |
Additional retention bonuses | 310,000 |
Boustead Securities [Member] | |
Loss Contingencies [Line Items] | |
Litigation reserve | $ 15,200,000 |
LOSS PER COMMON SHARE (Details)
LOSS PER COMMON SHARE (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Mar. 31, 2024 | Mar. 31, 2023 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total | 423,766 | 580,943 | 423,766 | 580,943 |
Preferred Stock [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total | 0 | 53,947 | 0 | 53,947 |
Equity Option [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total | 20,012 | 39,858 | 20,012 | 39,858 |
Warrant [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total | 358,408 | 435,460 | 358,408 | 435,460 |
Convertible Debt [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total | 45,346 | 51,678 | 45,346 | 51,678 |
LOSS PER COMMON SHARE (Details
LOSS PER COMMON SHARE (Details - Diluted net loss per share) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Mar. 31, 2024 | Mar. 31, 2023 | |
Numerator: | ||||
Net loss | $ (5,045,628) | $ (4,011,675) | $ (8,865,005) | $ (11,569,440) |
Preferred stock dividends | 0 | (1,557,576) | 0 | (3,094,545) |
Net loss attributable to common stockholders | $ (5,045,628) | $ (5,569,251) | $ (8,865,005) | $ (14,663,985) |
Denominator: | ||||
Basic weighted average common shares | 14,979,642 | 732,923 | 14,979,642 | 650,709 |
Diluted weighted average common shares | 14,979,642 | 732,923 | 14,979,642 | 650,709 |
Basic net loss per common share | $ (0.34) | $ (7.60) | $ (0.59) | $ (22.54) |
Diluted net loss per common share | $ (0.34) | $ (7.60) | $ (0.59) | $ (22.54) |
TRANSACTION WITH RELATED PART_2
TRANSACTION WITH RELATED PARTIES (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Mar. 31, 2024 | Mar. 31, 2023 | |
Related Party Transactions [Abstract] | ||||
Professional and Contract Services Expense | $ 16,381 | $ 18,988 | $ 36,110 | $ 41,051 |