Cover
Cover - shares | 3 Months Ended | |
Dec. 31, 2021 | Feb. 11, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Dec. 31, 2021 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2022 | |
Current Fiscal Year End Date | --09-30 | |
Entity File Number | 000-28745 | |
Entity Registrant Name | Cipherloc Corporation | |
Entity Central Index Key | 0001022505 | |
Entity Tax Identification Number | 86-0837077 | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Address Line One | 6836 Bee Cave Rd | |
Entity Address, Address Line Two | Bldg. 1 | |
Entity Address, Address Line Three | S#279 | |
Entity Address, City or Town | Austin | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 78746 | |
City Area Code | (512) | |
Local Phone Number | 337-3728 | |
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 | 83,449,535 |
Condensed Balance Sheets (Unaud
Condensed Balance Sheets (Unaudited) - USD ($) | Dec. 31, 2021 | Sep. 30, 2021 |
Current assets | ||
Cash | $ 5,071,588 | $ 5,783,994 |
Deferred costs | 180,000 | 180,000 |
Prepaid expenses | 208,830 | 279,832 |
Total current assets | 5,460,418 | 6,243,826 |
Other assets | ||
Operating lease ROU asset | ||
Deferred costs | 465,000 | 510,000 |
Total assets | 5,925,418 | 6,753,826 |
Current liabilities | ||
Accounts payable and accrued liabilities | 1,288,811 | 1,462,732 |
Accrued compensation | 25,000 | |
Total current liabilities | 1,288,811 | 1,487,732 |
Total liabilities | 1,288,811 | 1,487,732 |
Commitments and contingencies | ||
Stockholders’ equity | ||
Common stock, $0.001 par value, 681,000,000 shares authorized; 82,927,311 and 82,927,311 shares outstanding; and 96,342,125 and 96,342,125 issued as of December 31, 2021, and September 30, 2021, respectively | 963,421 | 963,421 |
Treasury stock, at cost, 13,414,814 and 13,414,814 shares as of December 31, 2021, and September 30, 2021, respectively | (590,000) | (590,000) |
Additional paid-in capital | 76,446,125 | 76,423,564 |
Accumulated deficit | (72,182,939) | (71,530,891) |
Total stockholders’ equity | 4,636,607 | 5,266,094 |
Total liabilities and stockholders’ equity | $ 5,925,418 | $ 6,753,826 |
Condensed Balance Sheets (Una_2
Condensed Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Dec. 31, 2021 | Sep. 30, 2021 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 681,000,000 | 681,000,000 |
Common stock, shares outstanding | 82,927,311 | 82,927,311 |
Common stock, shares issued | 96,342,125 | 96,342,125 |
Treasury stock, shares | 13,414,814 | 13,414,814 |
Condensed Statements of Operati
Condensed Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Statement [Abstract] | ||
Revenues | $ 8,750 | |
Cost of revenues | ||
Gross profit | 8,750 | |
Operating expenses | ||
General and administrative | 469,016 | 661,692 |
Sales and marketing | 53,393 | 25,000 |
Research and development | 129,639 | 121,793 |
Total operating expenses | 652,048 | 808,485 |
Operating loss | (652,048) | (799,735) |
Other income (expenses) | ||
Interest income (expense), net | ||
Net loss | $ (652,048) | $ (799,735) |
Net loss per common share – basic and diluted | $ (0.01) | $ (0.03) |
Weighted average common shares outstanding – basic and diluted | 83,159,679 | 27,377,696 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (652,048) | $ (799,735) |
Adjustments to reconcile net loss to net cash flows used in operating activities: | ||
Amortization | 45,000 | |
Stock-based compensation | 22,561 | 41,025 |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other assets | 71,002 | 136,392 |
Accounts payable and accrued liabilities | (198,921) | 11,105 |
Accrued compensation | (10,000) | |
Deferred revenue | (8,750) | |
Net cash used in operating activities | (712,406) | (629,963) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of fixed assets | ||
Net cash used in investing activities | ||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Purchase of preferred stock | (10,000) | |
Purchase of treasury stock | (40,000) | |
Net cash used in financing activities | (50,000) | |
DECREASE IN CASH | (712,406) | (679,963) |
CASH, BEGINNING OF PERIOD | 5,783,994 | 1,079,839 |
CASH, END OF PERIOD | $ 5,071,588 | $ 399,876 |
Statements of Stockholders' Equ
Statements of Stockholders' Equity (Deficit) (Unaudited) - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Treasury Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Beginning balance, value at Sep. 30, 2020 | $ 10,000 | $ 407,925 | $ (550,000) | $ 68,420,721 | $ (68,426,608) | $ (137,962) |
Beginning balance, shares at Sep. 30, 2020 | 1,000,000 | 40,792,510 | ||||
Preferred and treasury shares acquired | $ (10,000) | (40,000) | (50,000) | |||
Preferred and treasury shares acquired, shares | (1,000,000) | |||||
Stock option expense issued to directors & employees | 41,025 | 41,025 | ||||
Net loss | (799,735) | (799,735) | ||||
Ending balance, value at Dec. 31, 2020 | $ 407,925 | (590,000) | 68,461,746 | (69,226,343) | (946,672) | |
Ending balance, shares at Dec. 31, 2020 | 40,792,510 | |||||
Beginning balance, value at Sep. 30, 2021 | $ 963,421 | (590,000) | 76,423,564 | (71,530,891) | 5,266,094 | |
Beginning balance, shares at Sep. 30, 2021 | 82,927,311 | |||||
Stock option expense issued to directors & employees | 22,561 | 22,561 | ||||
Net loss | (652,048) | (652,048) | ||||
Ending balance, value at Dec. 31, 2021 | $ 963,421 | $ (590,000) | $ 76,446,125 | $ (72,182,939) | $ 4,636,607 | |
Ending balance, shares at Dec. 31, 2021 | 82,927,311 |
DESCRIPTION OF BUSINESS
DESCRIPTION OF BUSINESS | 3 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
DESCRIPTION OF BUSINESS | NOTE 1 - DESCRIPTION OF BUSINESS Cipherloc Corporation (the “Company” or “Cipherloc”) was incorporated in the State of Texas on June 22, 1953, under the name “American Mortgage Company . The Company’s headquarters is located at 6836 Bee Cave Road, Building 1, Suite279, Austin, Texas 78746. Its website is www.cipherloc.net |
BASIS OF PRESENTATION OF INTERI
BASIS OF PRESENTATION OF INTERIM FINANCIAL STATEMENTS | 3 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION OF INTERIM FINANCIAL STATEMENTS | NOTE 2 - BASIS OF PRESENTATION OF INTERIM FINANCIAL STATEMENTS The Company prepares its financial statements in accordance with accounting principles generally accepted in the United States of America. The accompanying interim unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X. In the Company’s opinion, it has included all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation. Operating results for the three months ended December 31, 2021 are not necessarily indicative of the results that may be expected for the year ending September 30, 2022. The Company has omitted notes to the unaudited interim financial statements that would substantially duplicate the disclosures contained in the audited financial statements for the fiscal year ended September 30, 2021 ; this report should be read in conjunction with the audited financial statements and the footnotes thereto for the fiscal year ended September 30, 2021 included within the Company’s Annual Report on Form 10-K, as filed with the Securities and Exchange Commission. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Company prepares its financial statements in accordance with accounting principles generally accepted in the United States of America. Significant accounting policies are as follows: Cash and Cash Equivalents The Company considers all highly liquid investments with a maturity at the time of purchase of three months or less to be cash equivalents. At December 31, 2021, the Company’s cash includes cash on hand and cash in the bank. The balance of such accounts, at times, may exceed federally insured limits, as guaranteed by the Federal Deposit Insurance Corporation (“FDIC”). The FDIC insures these deposits up to $ 250,000 5,071,588 Basic and Diluted Net Loss per Common Share The Company’s basic loss per share is computed by dividing the net loss available to common stockholders by the weighted average number of common shares outstanding during the reporting period. The weighted average number of shares is calculated by taking the number of shares outstanding and weighting that number by the amount of time that the applicable shares were outstanding. Diluted earnings per share reflects the potential dilution that could occur if vested stock options, warrants, and other commitments of the Company to issue common stock were exercised, resulting in the issuance of common stock that would share in the earnings of the Company. As of December 31, 2021, the Company had no shares of preferred stock outstanding. The Company’s diluted loss per share was the same as basic loss per share during the periods in which net losses were incurred since the inclusion of potential common stock equivalents would be anti-dilutive due to the net loss. During the three months ended December 31, 2021, the Company excluded warrants to purchase 79,461,481 24,216,866 1,000,000 Research and Development and Software Development Costs The Company expenses all research and development costs, including patent and software development costs. The research and development costs incurred for the three months ended December 31, 2021 and 2020 were $ 129,639 121,793 Revenue Recognition The Company recognizes revenues in accordance with the provisions of Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers , Central to the revenue recognition guidance is a five-step revenue recognition model that requires reporting entities to: 1. Identify the contract, 2. Identify the performance obligations of the contract, 3. Determine the transaction price of the contract, 4. Allocate the transaction price to the performance obligations, and 5. Recognize revenue. The Company accounts for a promise to provide a customer with a right to access the Company’s intellectual property as a performance obligation satisfied over time because the customer will simultaneously receive and consume the benefit from the Company’s providing access to its intellectual property as the performance occurs. Software License Agreements During the fiscal year ended September 30, 2019, the Company entered into a one-year agreement with SoundFi LLC (“SoundFi”) that automatically renews for subsequent one-year periods unless otherwise terminated by either party. The Company received $ 25,000 The Company executed a software licensing agreement with Castle Shield Holdings, LLC (“Castle Shield”) during the fiscal year ended September 30, 2020, which agreement includes auto-renewing terms. The Company received a $ 10,000 During the three months ended December 31, 2020, the Company recognized a total of $ 8,750 no Recent Accounting Pronouncements The FASB issues ASUs to amend the authoritative literature in the Accounting Standards Codification (“ASC”). There have been several ASUs to date that amend the original text of the ASC. Other than those discussed below, the Company believes the ASUs issued to date either (i) provide supplemental guidance, (ii) are technical corrections, (iii) are not applicable to the Company, or (iv) are not expected to have a significant impact on the Company. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurements (Topic 820) – Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement The Company adopted ASU 2018-13 on October 1, 2020, which adoption did not have a material impact on the Company’s financial position, results of operations and cash flows. In July 2017, the FASB issued ASU 2017-11—Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), and Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features and II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception. ASU 2017-11 eliminates the requirement that a down round feature precludes equity classification when assessing whether an instrument is indexed to an entity’s own stock. As a result, a freestanding equity-linked financial instrument would no longer be accounted for as a derivative liability at fair value because of the existence of a down round feature. The Company has adopted ASU 2017-11 and implemented the pronouncement retrospectively. The adoption of this guidance did not have an impact on the Company’s financial statements. As a result, a freestanding equity-linked financial instrument is no longer accounted for as a derivative liability at fair value because of the existence of a down round feature. For freestanding equity classified financial instruments, the amendments require entities that present earnings per share (EPS) in accordance with Topic 260 to recognize the effect of the down round feature when it is triggered. That effect is treated as a dividend and as a reduction of income available to common stockholders in basic EPS. During March and April 2021, the Company issued warrants to purchase 63,882,054 shares of its common stock at an average exercise price of $ 0.33 per share, which warrants have anti-dilution rights that provide for adjustments in the exercise price and number of shares exercisable upon exercise if there is an issuance of common stock or common stock equivalents at a lower price than the exercise price of the warrants (down round feature). In October 2021, the FASB amended guidance to recognize and measure contract assets and contract liabilities from contracts with customers acquired in a business combination. Generally, this new guidance will result in the Company recognizing contract assets and contract liabilities consistent with those reported by the acquiree immediately before the acquisition date. The Company retroactively adopted the guidance in the fourth quarter of fiscal 2021 for all business combinations completed since the beginning of fiscal 2021. There was no material impact on the Company’s Financial Statements. In January 2021, the FASB issued guidance to clarify that all derivative instruments affected by changes to the interest rates used for discounting, margining or contract price alignment can apply certain optional expedients and exceptions mentioned in its reference rate reform guidance even though they do not reference to LIBOR or a rate being discontinued. This guidance was effective upon issuance. The Company adopted the guidance in the first quarter of fiscal 2021. There was no impact on the Company’s Financial Statements upon such adoption. In June 2016, the FASB issued ASU 2016 13, . 2019 10, 326 . In January 2020, the FASB issued guidance to clarify certain interactions between the guidance to account for equity securities, the guidance to account for investments under the equity method of accounting, and the guidance to account for derivatives and hedging. The new guidance clarifies the application of measurement alternatives and the accounting for certain forward contracts and purchased options to acquire investments. The Company is required to adopt the guidance in the first quarter of fiscal 2022. Early adoption is permitted. In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40). The new ASU addresses an issuer’s accounting for certain modifications or exchanges of freestanding equity-classified written call options. This amendment is effective for all entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted. In November 2021, the FASB issued guidance to increase the transparency of government assistance received by an entity by requiring disclosures relating to accounting policy, nature of the assistance, and the effect of the assistance on the financial statements. The Company is required to adopt the guidance in the first quarter of its fiscal 2023. Early adoption is permitted. The Company is currently evaluating the impact of this guidance on its Financial Statements. In August 2020, the FASB issued ASU 2020-06— Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and edging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”) Debt with Conversion and Other Options Additionally, for convertible debt instruments with substantial premiums accounted for as paid-in capital, amendments in ASU 2020-06 added disclosures about (1) the fair value amount and the level of fair value hierarchy of the entire instrument for public business entities and (2) the premium amount recorded as paid-in capital. The amendments in ASU 2020-06 are effective for public business entities, excluding entities eligible to be smaller reporting companies, as defined by the SEC, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Entities should adopt the guidance as of the beginning of its annual fiscal year and are allowed to adopt the guidance through either a modified retrospective method of transition or a fully retrospective method of transition. In applying the modified retrospective method, entities should apply the guidance to transactions outstanding as of the beginning of the fiscal year in which the amendments are adopted. Transactions that were settled (or expired) during prior reporting periods are unaffected. The cumulative effect of the change should be recognized as an adjustment to the opening balance of retained earnings at the date of adoption. If an entity elects the fully retrospective method of transition, the cumulative effect of the change should be recognized as an adjustment to the opening balance of retained earnings in the first comparative period presented. The Company is evaluating the impact of the revised guidance and believes that it will not have a significant impact on its financial statements. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 4– COMMITMENTS AND CONTINGENCIES Litigation The Company is currently not involved in any litigation that it believes could have a material adverse effect on its financial condition or results of operations. In December 2017, Robert LeBlanc, a disgruntled former consultant of the Company, filed a petition against the Company and Michael De La Garza, the Company’s former Chief Executive Officer and President, in the 20th Judicial District for Hays County, Texas (Cause No. 18-0005). The petition (which has been amended) alleges causes of action against us for alleged violation of the Texas Securities Act (based on the allegation that the defendants sold securities by means of untrue statements of material facts), common law fraud against Mr. De La Garza (for alleged misrepresentations alleged made by Mr. De La Garza); breach of fiduciary duty against Mr. De La Garza; breach of contract; as well as declaratory relief. Damages sought exceed $ 1,000,000 10,000,000 In April 2020, Eric Marquez, the former Secretary/Treasurer and Chief Financial Officer of the Company, and certain other plaintiffs, filed a lawsuit against the Company and Michael De La Garza, the Company’s former Chief Executive Officer and President, in the 20 th 1,000,000 Leases All of the Company’s leases that were in place during the fiscal year ended September 30, 2020 have been terminated. As of December 31, 2021, the Company has no financial obligations for facility lease agreements, except as set forth below. Tom Wilkinson, the Company’s Chairman of the Board of Directors, provides the Company the use of office space which he rents, at 6836 Bee Caves Road, Building 1, Suite 279, Austin, TX 78746, for its corporate headquarters. There is a sublease agreement with Mr. Wilkinson and Mr. Wilkinson charges the Company $ 500 This lease agreement does not contain any material residual value guarantees or material restrictive covenant. Cash Flows The Company recognized an initial right-of-use asset of $ 233,751 80,402 The Company’s rent expense totaled $ 500 38,279 |
DEBT
DEBT | 3 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
DEBT | NOTE 5 – DEBT On April 6, 2020, the Company submitted its application for a $ 365,430 1 As of September 30, 2020, the SBA Loan balance was $ 365,430 192,052 The Company placed the full principal balance of the SBA Loan, plus $ 1,000 0 |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 3 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY | NOTE 6 - STOCKHOLDERS’ EQUITY The Company is authorized to issue 681,000,000 10,000,000 0.001 Common Stock During the three months ended December 31, 2020, and the three months ended December 31, 2021, the Company did not issue any shares of its common stock or preferred stock, except as set forth below. Beginning with the last quarter during the Company’s fiscal year ending September 30, 2021, its Board of Directors elected to begin receiving one-half of their quarterly Board compensation in shares of common stock instead of cash. At its April, 2021 meeting, the Company’s Board of Directors also approved a one time award of 100,000 522,224 411,112 Restricted Common Stock Units On October 22, 2021, the Company entered into restricted stock unit award agreements with five separate individuals. The Company granted a total of 2,000,001 shares vest in equal tranches on the next three anniversary dates of the award. 260,000 0.13 22,561 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 7 – SUBSEQUENT EVENTS On February 14, 2022 the Company announced the launch of Cipherloc Enclave, a new micro-segmentation product, through a press release and a Form 8-K. Cipherloc Enclave is further discussed in Item 2 of this Form 10-Q. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with a maturity at the time of purchase of three months or less to be cash equivalents. At December 31, 2021, the Company’s cash includes cash on hand and cash in the bank. The balance of such accounts, at times, may exceed federally insured limits, as guaranteed by the Federal Deposit Insurance Corporation (“FDIC”). The FDIC insures these deposits up to $ 250,000 5,071,588 |
Basic and Diluted Net Loss per Common Share | Basic and Diluted Net Loss per Common Share The Company’s basic loss per share is computed by dividing the net loss available to common stockholders by the weighted average number of common shares outstanding during the reporting period. The weighted average number of shares is calculated by taking the number of shares outstanding and weighting that number by the amount of time that the applicable shares were outstanding. Diluted earnings per share reflects the potential dilution that could occur if vested stock options, warrants, and other commitments of the Company to issue common stock were exercised, resulting in the issuance of common stock that would share in the earnings of the Company. As of December 31, 2021, the Company had no shares of preferred stock outstanding. The Company’s diluted loss per share was the same as basic loss per share during the periods in which net losses were incurred since the inclusion of potential common stock equivalents would be anti-dilutive due to the net loss. During the three months ended December 31, 2021, the Company excluded warrants to purchase 79,461,481 24,216,866 1,000,000 |
Research and Development and Software Development Costs | Research and Development and Software Development Costs The Company expenses all research and development costs, including patent and software development costs. The research and development costs incurred for the three months ended December 31, 2021 and 2020 were $ 129,639 121,793 |
Revenue Recognition | Revenue Recognition The Company recognizes revenues in accordance with the provisions of Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers , Central to the revenue recognition guidance is a five-step revenue recognition model that requires reporting entities to: 1. Identify the contract, 2. Identify the performance obligations of the contract, 3. Determine the transaction price of the contract, 4. Allocate the transaction price to the performance obligations, and 5. Recognize revenue. The Company accounts for a promise to provide a customer with a right to access the Company’s intellectual property as a performance obligation satisfied over time because the customer will simultaneously receive and consume the benefit from the Company’s providing access to its intellectual property as the performance occurs. Software License Agreements During the fiscal year ended September 30, 2019, the Company entered into a one-year agreement with SoundFi LLC (“SoundFi”) that automatically renews for subsequent one-year periods unless otherwise terminated by either party. The Company received $ 25,000 The Company executed a software licensing agreement with Castle Shield Holdings, LLC (“Castle Shield”) during the fiscal year ended September 30, 2020, which agreement includes auto-renewing terms. The Company received a $ 10,000 During the three months ended December 31, 2020, the Company recognized a total of $ 8,750 no |
Recent Accounting Pronouncements | Recent Accounting Pronouncements The FASB issues ASUs to amend the authoritative literature in the Accounting Standards Codification (“ASC”). There have been several ASUs to date that amend the original text of the ASC. Other than those discussed below, the Company believes the ASUs issued to date either (i) provide supplemental guidance, (ii) are technical corrections, (iii) are not applicable to the Company, or (iv) are not expected to have a significant impact on the Company. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurements (Topic 820) – Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement The Company adopted ASU 2018-13 on October 1, 2020, which adoption did not have a material impact on the Company’s financial position, results of operations and cash flows. In July 2017, the FASB issued ASU 2017-11—Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), and Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features and II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception. ASU 2017-11 eliminates the requirement that a down round feature precludes equity classification when assessing whether an instrument is indexed to an entity’s own stock. As a result, a freestanding equity-linked financial instrument would no longer be accounted for as a derivative liability at fair value because of the existence of a down round feature. The Company has adopted ASU 2017-11 and implemented the pronouncement retrospectively. The adoption of this guidance did not have an impact on the Company’s financial statements. As a result, a freestanding equity-linked financial instrument is no longer accounted for as a derivative liability at fair value because of the existence of a down round feature. For freestanding equity classified financial instruments, the amendments require entities that present earnings per share (EPS) in accordance with Topic 260 to recognize the effect of the down round feature when it is triggered. That effect is treated as a dividend and as a reduction of income available to common stockholders in basic EPS. During March and April 2021, the Company issued warrants to purchase 63,882,054 shares of its common stock at an average exercise price of $ 0.33 per share, which warrants have anti-dilution rights that provide for adjustments in the exercise price and number of shares exercisable upon exercise if there is an issuance of common stock or common stock equivalents at a lower price than the exercise price of the warrants (down round feature). In October 2021, the FASB amended guidance to recognize and measure contract assets and contract liabilities from contracts with customers acquired in a business combination. Generally, this new guidance will result in the Company recognizing contract assets and contract liabilities consistent with those reported by the acquiree immediately before the acquisition date. The Company retroactively adopted the guidance in the fourth quarter of fiscal 2021 for all business combinations completed since the beginning of fiscal 2021. There was no material impact on the Company’s Financial Statements. In January 2021, the FASB issued guidance to clarify that all derivative instruments affected by changes to the interest rates used for discounting, margining or contract price alignment can apply certain optional expedients and exceptions mentioned in its reference rate reform guidance even though they do not reference to LIBOR or a rate being discontinued. This guidance was effective upon issuance. The Company adopted the guidance in the first quarter of fiscal 2021. There was no impact on the Company’s Financial Statements upon such adoption. In June 2016, the FASB issued ASU 2016 13, . 2019 10, 326 . In January 2020, the FASB issued guidance to clarify certain interactions between the guidance to account for equity securities, the guidance to account for investments under the equity method of accounting, and the guidance to account for derivatives and hedging. The new guidance clarifies the application of measurement alternatives and the accounting for certain forward contracts and purchased options to acquire investments. The Company is required to adopt the guidance in the first quarter of fiscal 2022. Early adoption is permitted. In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40). The new ASU addresses an issuer’s accounting for certain modifications or exchanges of freestanding equity-classified written call options. This amendment is effective for all entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted. In November 2021, the FASB issued guidance to increase the transparency of government assistance received by an entity by requiring disclosures relating to accounting policy, nature of the assistance, and the effect of the assistance on the financial statements. The Company is required to adopt the guidance in the first quarter of its fiscal 2023. Early adoption is permitted. The Company is currently evaluating the impact of this guidance on its Financial Statements. In August 2020, the FASB issued ASU 2020-06— Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and edging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”) Debt with Conversion and Other Options Additionally, for convertible debt instruments with substantial premiums accounted for as paid-in capital, amendments in ASU 2020-06 added disclosures about (1) the fair value amount and the level of fair value hierarchy of the entire instrument for public business entities and (2) the premium amount recorded as paid-in capital. The amendments in ASU 2020-06 are effective for public business entities, excluding entities eligible to be smaller reporting companies, as defined by the SEC, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Entities should adopt the guidance as of the beginning of its annual fiscal year and are allowed to adopt the guidance through either a modified retrospective method of transition or a fully retrospective method of transition. In applying the modified retrospective method, entities should apply the guidance to transactions outstanding as of the beginning of the fiscal year in which the amendments are adopted. Transactions that were settled (or expired) during prior reporting periods are unaffected. The cumulative effect of the change should be recognized as an adjustment to the opening balance of retained earnings at the date of adoption. If an entity elects the fully retrospective method of transition, the cumulative effect of the change should be recognized as an adjustment to the opening balance of retained earnings in the first comparative period presented. The Company is evaluating the impact of the revised guidance and believes that it will not have a significant impact on its financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Apr. 30, 2021 | Mar. 31, 2021 | |
Product Information [Line Items] | |||||
FDIC insured cash | $ 250,000 | ||||
Cash balance uninsured | 5,071,588 | ||||
Research and development expense | 129,639 | $ 121,793 | |||
Revenues | 8,750 | ||||
Number of securities called by warrants or rights | 63,882,054 | 63,882,054 | |||
Exercise price of warrants or rights | $ 0.33 | $ 0.33 | |||
License [Member] | |||||
Product Information [Line Items] | |||||
Revenues | $ 0 | $ 8,750 | |||
SoundFi [Member] | License [Member] | |||||
Product Information [Line Items] | |||||
Proceeds from license fees | $ 25,000 | ||||
Castle Shield [Member] | License [Member] | |||||
Product Information [Line Items] | |||||
Proceeds from license fees | $ 10,000 | ||||
Warrant [Member] | |||||
Product Information [Line Items] | |||||
Anti-dilutive common stock and equivalents | 79,461,481 | 24,216,866 | |||
Convertible Preferred Stock [Member] | |||||
Product Information [Line Items] | |||||
Anti-dilutive common stock and equivalents | 1,000,000 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | |||
Apr. 30, 2020 | Dec. 31, 2017 | Dec. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2021 | |
Loss Contingencies [Line Items] | |||||
Rent expenses | $ 500 | $ 38,279 | |||
Right-of-use asset | |||||
Operating lease liability | 80,402 | ||||
New Lease Accounting Standard [Member] | |||||
Loss Contingencies [Line Items] | |||||
Right-of-use asset | $ 233,751 | ||||
Eric Marquez [Member] | |||||
Loss Contingencies [Line Items] | |||||
Damages sought value | $ 1,000,000 | ||||
Minimum [Member] | Robert LeBlanc [Member] | |||||
Loss Contingencies [Line Items] | |||||
Damages sought value | $ 1,000,000 | ||||
Maximum [Member] | Robert LeBlanc [Member] | |||||
Loss Contingencies [Line Items] | |||||
Damages sought value | $ 10,000,000 |
DEBT (Details Narrative)
DEBT (Details Narrative) - SBA Loan [Member] - PPP [Member] - USD ($) | Jun. 11, 2021 | Apr. 15, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Apr. 06, 2020 |
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
Amount of debt | $ 0 | $ 365,430 | $ 365,430 | ||
Debt instrument, interest rate | 1.00% | ||||
Loan forgiveness | $ 192,052 | ||||
Principal balance with interest amount | $ 1,000 |
STOCKHOLDERS_ EQUITY (Details N
STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($) | Jan. 31, 2022 | Jan. 13, 2022 | Oct. 22, 2021 | Apr. 30, 2021 | Dec. 31, 2021 | Sep. 30, 2021 |
Class of Stock [Line Items] | ||||||
Common stock, shares authorized | 681,000,000 | 681,000,000 | ||||
Common stock, par value | $ 0.001 | $ 0.001 | ||||
Stock compensation expense | $ 22,561 | |||||
Restricted Stock Units (RSUs) [Member] | ||||||
Class of Stock [Line Items] | ||||||
Restricted stocks awards, granted | 2,000,001 | |||||
Restricted stocks, terms | shares vest in equal tranches on the next three anniversary dates of the award. | |||||
Restricted stock, granted | $ 260,000 | |||||
Common stock per share | $ 0.13 | |||||
Director [Member] | One-time grant award [Member] | ||||||
Class of Stock [Line Items] | ||||||
Shares received by directors | 100,000 | |||||
Director [Member] | One-time grant award [Member] | Subsequent Event [Member] | ||||||
Class of Stock [Line Items] | ||||||
Shares received by directors | 522,224 | 411,112 | ||||
Series A Convertible Preferred Stock [Member] | ||||||
Class of Stock [Line Items] | ||||||
Preferred stock, shares authorized | 10,000,000 | |||||
Preferred stock, par value | $ 0.001 |