Cover
Cover - shares | 3 Months Ended | |
Dec. 31, 2021 | Feb. 14, 2022 | |
Cover [Abstract] | ||
Entity Registrant Name | KNOW LABS, INC. | |
Entity Central Index Key | 0001074828 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Current Fiscal Year End Date | --09-30 | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Current Reporting Status | Yes | |
Document Period End Date | Dec. 31, 2021 | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2022 | |
Entity Common Stock Shares Outstanding | 36,060,912 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 000-30262 | |
Entity Incorporation State Country Code | NV | |
Entity Tax Identification Number | 90-0273142 | |
Entity Address Address Line 1 | 500 Union Street | |
Entity Address Address Line 2 | Suite 810 | |
Entity Address City Or Town | Seattle | |
Entity Address State Or Province | WA | |
Entity Address Postal Zip Code | 98101 | |
City Area Code | 206 | |
Local Phone Number | -903-1351 | |
Entity Interactive Data Current | Yes |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2021 | Sep. 30, 2021 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 10,733,743 | $ 12,258,218 |
Accounts receivable- related party | 3,124,581 | 0 |
Total current assets | 13,858,324 | 12,258,218 |
PROPERTY AND EQUIPMENT, NET | 672,320 | 328,504 |
OTHER ASSETS | ||
Other assets | 13,767 | 13,767 |
Operating lease right of use asset | 340,448 | 289,002 |
TOTAL ASSETS | 14,884,859 | 12,889,491 |
CURRENT LIABILITIES: | ||
Accounts payable - trade | 408,508 | 419,093 |
Accrued expenses | 1,508,301 | 893,137 |
Accrued expenses - related parties | 1,961,685 | 421,599 |
Convertible notes payable, net | 13,375,812 | 9,191,155 |
Current portion of operating lease right of use liability | 168,624 | 112,371 |
Total current liabilities | 17,422,930 | 11,037,355 |
NON-CURRENT LIABILITIES: | ||
Notes payable PPP loans | 431,803 | 431,803 |
Operating lease right of use liability, net of current portion | 171,582 | 178,170 |
Total noncurrent liabilities | 603,385 | 609,973 |
STOCKHOLDERS' (DEFICIT) EQUITY | ||
Preferred stock - 0.001 par value, 5,000,000 shares authorized, 0 shares issued and outstanding at 12/31/2021 and 9/30/2021, respectively | 0 | 0 |
Common stock - $0.001 par value, 200,000,000 shares authorized, 35,969,912 and 35,166,551 shares issued and outstanding at 12/31/2021 and 9/30/2021, respectively | 35,971 | 35,168 |
Additional paid in capital | 83,502,881 | 82,530,684 |
Accumulated deficit | (86,683,113) | (81,326,494) |
Total stockholders' (deficit) equity | (3,141,456) | 1,242,163 |
TOTAL LIABILITIES AND STOCKHOLDERS (DEFICIT) EQUITY | 14,884,859 | 12,889,491 |
Convertible Preferred Stock Series C [Member] | ||
STOCKHOLDERS' (DEFICIT) EQUITY | ||
Preferred stock - 0.001 par value, 5,000,000 shares authorized, 0 shares issued and outstanding at 12/31/2021 and 9/30/2021, respectively | 1,790 | 1,790 |
Convertible Preferred Stock D [Member] | ||
STOCKHOLDERS' (DEFICIT) EQUITY | ||
Preferred stock - 0.001 par value, 5,000,000 shares authorized, 0 shares issued and outstanding at 12/31/2021 and 9/30/2021, respectively | $ 1,015 | $ 1,015 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2021 | Sep. 30, 2021 |
STOCKHOLDERS' DEFICIT | ||
Preferred stock par value | $ 0.001 | $ 0.001 |
Preferred stock shares authorized | 5,000,000 | 5,000,000 |
Preferred stock shares issued | 0 | 0 |
Preferred stock shares outstanding | 0 | 0 |
Common stock par value | $ 0.001 | $ 0.001 |
Common stock shares authorized | 200,000,000 | 100,000,000 |
Common stock shares issued | 35,969,912 | 35,166,551 |
Common stock shares outstanding | 35,969,912 | 35,166,551 |
Convertible Preferred Stock Series C [Member] | ||
STOCKHOLDERS' DEFICIT | ||
Preferred stock par value | $ 0.001 | $ 0.001 |
Preferred stock shares authorized | 1,785,715 | 1,785,714 |
Preferred stock shares issued | 1,785,715 | 1,785,715 |
Preferred stock shares outstanding | 1,785,715 | 1,785,715 |
Convertible Preferred Stock D [Member] | ||
STOCKHOLDERS' DEFICIT | ||
Preferred stock par value | $ 0.001 | $ 0.001 |
Preferred stock shares authorized | 1,016,014 | 1,016,014 |
Preferred stock shares issued | 1,016,004 | 1,016,004 |
Preferred stock shares outstanding | 1,016,004 | 1,016,004 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
CONSOLIDATED STATEMENTS OF OPERATIONS | ||
REVENUE- DIGITAL ASSET SALES | $ 4,351,400 | $ 0 |
RESEARCH AND DEVELOPMENT AND OPERATING EXPENSES- | ||
RESEARCH AND DEVELOPMENT EXPENSES | 885,752 | 966,861 |
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 1,216,947 | 2,598,732 |
SELLING AND TRANSACTIONAL COSTS FOR DIGITAL ASSETS | 3,118,360 | 0 |
Total research and development and operating expenses | 5,221,059 | 3,565,593 |
OPERATING LOSS | (869,659) | (3,565,593) |
OTHER INCOME (EXPENSE): | ||
Interest expense | (4,486,960) | (1,733,738) |
Total other (expense) net | (4,486,960) | (1,733,738) |
LOSS BEFORE INCOME TAXES | (5,356,619) | (5,299,331) |
Income tax expense | 0 | 0 |
NET LOSS | $ (5,356,619) | $ (5,299,331) |
Basic and diluted loss per share | $ (0.15) | $ (0.21) |
Weighted average shares of common stock outstanding- basic and diluted | 35,479,073 | 25,208,726 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' (DEFICIT) EQUITY - USD ($) | Total | Series D Convertible Preferred Stock [Member] | Common Stock | Additional Paid-In Capital | Retained Earnings (Accumulated Deficit) | Convertible Preferred Stock Series C [Member] |
Balance, shares at Oct. 01, 2020 | 1,016,004 | 24,804,874 | 1,785,715 | |||
Balance, amount at Oct. 01, 2020 | $ (1,914,911) | $ 1,015 | $ 24,807 | $ 54,023,758 | $ (55,966,281) | $ 1,790 |
Stock compensation expense - employee options | 175,442 | 0 | $ 0 | 175,442 | 0 | 0 |
Conversion of debt offering and accrued interest (Note 7), shares | 561,600 | |||||
Conversion of debt offering and accrued interest (Note 7), amount | 561,600 | 0 | $ 562 | 561,038 | 0 | 0 |
Issuance of warrant for services to related party | 1,811,691 | 0 | $ 0 | 1,811,691 | 0 | 0 |
Issuance of common stock for exercise of warrants, shares | 3,750 | |||||
Issuance of common stock for exercise of warrants, amount | 4,688 | 0 | $ 4 | 4,684 | 0 | 0 |
Net loss | (5,299,331) | $ 0 | $ 0 | 0 | (5,299,331) | $ 0 |
Balance, shares at Dec. 31, 2020 | 1,016,004 | 25,370,224 | 1,785,715 | |||
Balance, amount at Dec. 31, 2020 | (4,660,822) | $ 1,015 | $ 25,372 | 56,576,613 | (61,265,612) | $ 1,790 |
Balance, amount at Sep. 30, 2021 | 1,242,163 | |||||
Net loss | $ (5,356,619) | |||||
Balance, shares at Dec. 31, 2021 | 801,486 | 1,016,004 | 35,969,912 | 1,785,715 | ||
Balance, amount at Dec. 31, 2021 | $ (3,141,456) | $ 1,015 | $ 35,971 | 83,502,881 | (86,683,113) | $ 1,790 |
Balance, shares at Oct. 01, 2021 | 1,016,004 | 35,166,551 | 1,785,715 | |||
Balance, amount at Oct. 01, 2021 | 1,242,163 | $ 1,015 | $ 35,168 | 82,530,684 | (81,326,494) | $ 1,790 |
Stock compensation expense - employee options | 204,170 | 0 | 204,170 | 0 | 0 | |
Issuance of common stock for exercise of warrants, shares | 801,486 | |||||
Issuance of common stock for exercise of warrants, amount | 766,486 | 0 | $ 801 | 765,685 | 0 | 0 |
Net loss | (5,356,619) | 0 | $ 0 | 0 | (5,356,619) | 0 |
Issuance of common stock for stock option exercises, shares | 1,875 | |||||
Issuance of common stock for stock option exercises, amount | $ 2,344 | $ 0 | $ 2 | 2,342 | 0 | $ 0 |
Balance, shares at Dec. 31, 2021 | 801,486 | 1,016,004 | 35,969,912 | 1,785,715 | ||
Balance, amount at Dec. 31, 2021 | $ (3,141,456) | $ 1,015 | $ 35,971 | $ 83,502,881 | $ (86,683,113) | $ 1,790 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (5,356,619) | $ (5,299,331) |
Adjustments to reconcile net loss to net cash (used in) operating activities | ||
Depreciation and amortization | 41,672 | 64,633 |
Stock based compensation- warrants | 0 | 1,811,691 |
Stock based compensation- stock option grants | 204,170 | 175,442 |
Amortization of debt discount to interest expense | 4,184,657 | 1,596,980 |
Right of use, net | (1,781) | (565) |
Changes in operating assets and liabilities: | ||
Accounts receivable related party | (3,124,581) | 0 |
Accounts payable - trade and accrued expenses | 2,144,665 | 230,150 |
NET CASH (USED IN) OPERATING ACTIVITIES | (1,907,817) | (1,421,000) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of research and development equipment | (385,488) | (9,633) |
NET CASH (USED IN) INVESTING ACTIVITIES: | (385,488) | (9,633) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from Simple Agreements for Future Equity | 0 | 55,000 |
Proceeds from issuance of common stock for stock options exercise | 2,344 | 0 |
Proceeds from issuance of common stock for warrant exercise | 766,486 | 4,688 |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 768,830 | 59,688 |
NET DECREASE IN CASH AND CASH EQUIVALENTS | (1,524,475) | (1,370,945) |
CASH AND CASH EQUIVALENTS, beginning of period | 12,258,218 | 4,298,179 |
CASH AND CASH EQUIVALENTS, end of period | 10,733,743 | 2,927,234 |
Supplemental disclosures of cash flow information: | ||
Interest paid | 0 | 0 |
Taxes paid | 0 | 0 |
Non-cash investing and financing activities: | ||
Conversion of debt offering | 0 | 520,000 |
Conversion of accrued interest | $ 0 | $ 41,599 |
ORGANIZATION
ORGANIZATION | 3 Months Ended |
Dec. 31, 2021 | |
ORGANIZATION | |
1. ORGANIZATION | 1. ORIGANISATION Know Labs, Inc. was incorporated under the laws of the State of Nevada in 1998. The Company has authorized 205,000,000 shares of capital stock, of which 200,000,000 are shares of voting common stock, par value $0.001 per share, and 5,000,000 are shares preferred stock, par value $0.001 per share. At the annual shareholder meeting held on October 15, 2021, our authorized shares of common stock was increased to 200,000,000 shares of voting common stock, par value $0.001 per share. The Company is focused on the development and commercialization of proprietary biosensor technologies which, when paired with our AI deep learning platform, are capable of uniquely identifying and measuring almost any material or analyte using electromagnetic energy to detect, record, identify and measure the unique “signature” of said materials or analytes. The Company calls these our “Bio-RFID™” technology platform when pertaining to radio and microwave spectroscopy; and “ChromaID” technology platform when pertaining to optical spectroscopy. The data obtained with the Company’s biosensor technology is analyzed with our trade secret algorithms which are driven by our AI Deep Learning platform. ChromaID is the first technology developed and patented by the Company. For the past several years, the Company has focused upon extensions and new patentable inventions that are derived from and extend beyond our ChromaID technology and intellectual property. The Company calls this technology platform Bio-RFID. The rapid advances made with our Bio-RFID technology in our laboratory have caused us to move quickly into the commercialization phase of our Company as we work to create revenue generating products for the marketplace. Today, the primary focus of the Company is on its Bio-RFID technology, its commercialization and development of related patent assets. Through its wholly owned subsidiary corporations the Company works to exploit additional opportunities and markets that its broad intellectual property and trade secret portfolio addresses. On April 30, 2020, the Company approved and ratified the incorporation of Particle, Inc. Particle is focused on the development and commercialization of our extensive intellectual property relating to electromagnetic energy outside of the medical diagnostic arena which remains the parent company’s singular focus. Since incorporation, Particle has engaged in research and development activities on threaded light bulbs that have a warm white light and can inactivate germs, including bacteria and viruses. It is now looking for partners to take the product to market. On September 17, 2021, the Company approved and ratified the incorporation of AI Mind, Inc. AI Mind is focused on monetizing the AI Deep Learning Platform. Since incorporation it initially focused on creating graphical images which were sold as Non Fungible Tokens (“NFTs”). The Company is continuing to look for opportunities for new applications on its AI Deep Learning Platform to generate revenues to support the continued development of its non-invasive diagnostic technology. |
LIQUIDITY
LIQUIDITY | 3 Months Ended |
Dec. 31, 2021 | |
LIQUIDITY | |
2. LIQUIDITY | 2. LIQUIDITY The Company has cash of approximately $10,733,743 and net working capital of approximately $9,979,830 (exclusive of convertible notes payable and right of use asset and liabilities) as of December 31, 2021. The Company anticipates that it will record losses from operations for the foreseeable future. The Company believes that it has enough available cash to operate until December 2023. As of December 31, 2021, the Company’s accumulated deficit was $86,683,113. The Company has had limited capital resources and intends to seek additional cash via equity and debt offerings. On March 15, 2021, the Company closed private placement for gross proceeds of $14,209,000 in exchange for issuing 8% Subordinated Convertible Notes and 3,552,250 Warrants in a private placement to accredited investors, pursuant to a series of substantially identical Securities Purchase Agreements, Common Stock Warrants, and related documents. The Convertible Notes and accrued interest will be automatically converted to Common Stock at $2.00 per share on the one year anniversary starting on March 15, 2022. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES ADOPTION OF ACCOUNTING STANDARDS | 3 Months Ended |
Dec. 31, 2021 | |
SIGNIFICANT ACCOUNTING POLICIES ADOPTION OF ACCOUNTING STANDARDS | |
3. SIGNIFICANT ACCOUNTING POLICIES: ADOPTION OF ACCOUNTING STANDARDS | 3. SIGNIFICANT ACCOUNTING POLICIES: ADOPTION OF ACCOUNTING STANDARDS Basis of Presentation Principles of Consolidation Cash and Cash Equivalents Equipment Long-Lived Assets Intangible Assets Revenue Recognition · identification of the contract, or contracts, with the 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; and · recognition of the revenue when, or as, the Company satisfies a performance obligation. Revenue is recognized when control of the promised goods or services is transferred to the customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.. During the three months ended December 31, 2021, the Company’s artificial intelligence (AI) Deep Learning Platform began generating revenue from digital asset sales of NFT’s. The Company engineering team, using its research date, AI and proprietary algorithms, produced NFT’s in the form of digital art. The NFT’s produced had no recorded cost basis. Digital Asset Sales - After the sale of the NFT, the Ethereum is converted to US dollars as soon as practically possible. The Company records the total value of the gross NFT sale in revenue. Costs incurred in connection with the NFT transaction are recorded in the statement of operations as Selling and Transactional Cost of Digital Assets and include costs to outside consultants, employee and CEO special bonus compensation, and estimated sales and use tax. 8 Table of Contents Research and Development Expenses The Company’s current research and development efforts are primarily focused on improving our Bio-RFID technology, extending its capacity and developing new and unique applications for this technology. As part of this effort, the Company conducts on-going laboratory testing to ensure that application methods are compatible with the end-user and regulatory requirements, and that they can be implemented in a cost-effective manner. The Company also is actively involved in identifying new applications. The Company’s current internal team along with outside consultants has considerable experience working with the application of the Company’s technologies and their applications. The Company engages third party experts as required to supplement our internal team. The Company believes that continued development of new and enhanced technologies is essential to our future success. The Company incurred expenses of $885,752, $3,969,972 and $2,033,726 for the three months ended December 31, 2021 and the years ended September 30, 2021 and 2020, respectively, on development activities. Advertising Fair Value Measurements and Financial Instruments Fair Value Measurement and Disclosures Level 1 - Quoted prices in active markets for identical assets and liabilities; Level 2 - Inputs other than level one inputs that are either directly or indirectly observable; and. Level 3 - Inputs to the valuation methodology are unobservable and significant to the fair value measurement. The recorded value of other financial assets and liabilities, which consist primarily of cash and cash equivalents, accounts receivable, other current assets, and accounts payable and accrued expenses approximate the fair value of the respective assets and liabilities as of December 31, 2021 and September 30, 2021 are based upon the short-term nature of the assets and liabilities. The Company has a money market account which is considered a level 1 asset. The balance as of December 31, 2021 and September 30, 2021 was $10,483,743 and $12,217,714, respectively. Derivative Financial Instruments - The Company determined that the conversion features for purposes of bifurcation within its currently outstanding convertible notes payable were immaterial and there was no derivative liability to be recorded as of December 31, 2021 and September 30, 2021. Stock Based Compensation Convertible Securities 9 Table of Contents Net Loss per Share As of December 31, 2020, the Company had 25,370,224 shares of common stock issued and outstanding. As of December 31, 2020, there were options outstanding for the purchase of 12,936,955 common shares (including unearned stock option grants totaling 10,625,745 shares related to performance targets), warrants for the purchase of 22,016,367 common shares, and 8,108,356 shares of the Company’s common stock issuable upon the conversion of Series C and Series D Convertible Preferred Stock. In addition, the Company currently has 14,189,764 common shares (9,020,264 common shares at the current price of $0.25 per share and 5,169,500 common shares at the current price of $1.20 per share) reserved and are issuable upon conversion of convertible debentures of $7,424,566. All of which could potentially dilute future earnings per share but are excluded from the December 31, 2020 calculation of net loss per share because their impact is antidilutive. Comprehensive loss Dividend Policy Use of Estimates Recent Accounting Pronouncements Debt -- debt with Conversion and Other Options (Subtopic470-20) and Derivatives and Hedging --Contracts in Entity’ Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’ Own Equity Based on the Company’s review of accounting standard updates issued since the filing of the December 31, 2021 Form 10-Q, there have been no other newly issued or newly applicable accounting pronouncements that have had, or are expected to have, a significant impact on the Company’s consolidated financial statements. Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company’s consolidated financial statements upon adoption. |
Artificial Intelligence (AI) De
Artificial Intelligence (AI) Deep Learning Platform | 3 Months Ended |
Dec. 31, 2021 | |
Artificial Intelligence (AI) Deep Learning Platform | |
4. Artificial Intelligence (AI) Deep Learning Platformb1c1aa | 4. Artificial Intelligence (AI) Deep Learning Platform AI Revenue During the three months ended December 31, 2021, |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 3 Months Ended |
Dec. 31, 2021 | |
PROPERTY AND EQUIPMENT | |
5. PROPERTY AND EQUIPMENT | 5. PROPERTY AND EQUIPMENT Property and equipment as of December 31, 2021 and September 30, 2021 was comprised of the following: Estimated Useful Lives December 31, 2021 September 30, 2021 Machinery and equipment 2-3 years $ 1,040,285 $ 654,798 Leasehold improvements 5 years 3,612 3,612 Furniture and fixtures 5 years 26,855 26,855 Less: accumulated depreciation (398,432 ) (356,761 ) $ 672,320 $ 328,504 Total depreciation expense was $41,672 and $21,300 for the three months ended December 31, 2021 and 2020, respectively. All equipment is used for general and administrative purposes and accordingly all depreciation is classified in general and administrative expenses. |
LEASES
LEASES | 3 Months Ended |
Dec. 31, 2021 | |
LEASES | |
6. LEASES | 6. LEASES The Company has entered into operating leases for office and development facilities. These leases have terms which range from two to three years and include options to renew. These operating leases are listed as separate line items on the Company's December 31, 2021 and September 30, 2021 Consolidated Balance Sheets and represent the Company’s right to use the underlying asset for the lease term. The Company’s obligation to make lease payments are also listed as separate line items on the Company's December 31, 2021 and September 30, 2021 Consolidated Balance Sheets. Based on the present value of the lease payments for the remaining lease term of the Company's existing leases, the Company recognized right-of-use assets and lease liabilities for operating leases of approximately $340,448 as of December 31, 2021. Operating lease right-of-use assets and liabilities commencing after October 1, 2018 are recognized at commencement date based on the present value of lease payments over the lease term. During years ended December 31, 2021 and September 30, 2021, the Company amended two leases and recognized the rent payments as an expense in the current period. As of December 31, 2021 and September 30, 2021, total operating lease liabilities for remaining long term lease was approximately $340,206 and $290,000, respectively. In the three months ended December 31, 2021 and 2020, the Company recognized approximately $40,629 and $37,612, respectively in total lease costs for the leases. Because the rate implicit in each lease is not readily determinable, the Company uses its incremental borrowing rate to determine the present value of the lease payments. Information related to the Company's operating right-of-use assets and related lease liabilities as of and for the year ended December 31, 2021 was as follows: Cash paid for ROU operating lease liability $50,051 Weighted-average remaining lease term 28 months Weighted-average discount rate 7% The minimum future lease payments as of December 31, 2021 are as follows: Years Ended December 31, $ 2022 $ 150,811 2023 134,537 2024 82,232 Total rem aining payments 367,581 Less Imputed Interest (27,375 ) Total lease liability $ 340,206 |
CONVERTIBLE NOTES PAYABLE AND N
CONVERTIBLE NOTES PAYABLE AND NOTE PAYABLE | 3 Months Ended |
Dec. 31, 2021 | |
CONVERTIBLE NOTES PAYABLE AND NOTE PAYABLE | |
7. CONVERTIBLE NOTES PAYABLE AND NOTE PAYABLE | 7. CONVERTIBLE NOTES PAYABLE AND NOTE PAYABLE Convertible notes payable as of December 31, 2021 and September 30, 2021 consisted of the following: Convertible Promissory Notes with Clayton A. Struve The Company owes Clayton A. Struve $1,071,000 under convertible promissory or OID notes. The Company recorded accrued interest of $80,952 and $79,062 as of December 31, 2021 and September 30, 2021, respectively. On December 23, 2020, the Company signed Amendments to the convertible promissory or OID notes, extending the due dates to March 31, 2021. On November 8, 2021, the Company signed Amendments to the convertible promissory or OID notes, extending the due dates to March 31, 2022. Convertible Redeemable Promissory Notes with Ronald P. Erickson and J3E2A2Z On March 16, 2018, the Company entered into a Note and Account Payable Conversion Agreement pursuant to which (a) all $664,233 currently owing under the J3E2A2Z Notes was converted to a Convertible Redeemable Promissory Note in the principal amount of $664,233, and (b) all $519,833 of the J3E2A2Z Account Payable was converted into a Convertible Redeemable Promissory Note in the principal amount of $519,833 together with a warrant to purchase up to 1,039,666 shares of common stock of the Company for a period of five years. The initial exercise price of the warrants described above is $0.50 per share, also subject to certain adjustments. The warrants were valued at $110,545. Because the note is immediately convertible, the warrants and beneficial conversion were expensed as interest. The Company recorded accrued interest of $234,153 and $216,246 as of December 31, 2021 and September 30, 2021, respectively. On September 30, 2021, the Company approved Amendments to the convertible redeemable promissory notes with Ronald P. Erickson and J3E2A2Z, extending the due dates to March 31, 2022. Convertible Debt Offering Beginning in 2019, the Company entered into series of debt offerings with similar and consistent terms. The Company issued Subordinated Convertible Notes and Warrants in a private placement to accredited investors, pursuant to a series of substantially identical Securities Purchase Agreements, Common Stock Warrants, and related documents. The notes are convertible into one share of common stock for each dollar invested in a Convertible Note Payable and automatically convert to common stock after one year. The convertible notes contain terms and conditions which are deemed to be a Beneficial Conversion Feature (BCF). Warrants are issued to purchase common stock with exercise prices of $1.20 and $2.40 per share and the number of warrants are equal to 50% of the convertible note balance. The Company compensates the placement agent with a cash fee and warrants. Through December 31, 2021, the Company has raised approximately $24 million through these offerings, of which $14,209,000 and $5,639,500 were raised in the years ended September 30, 2021 and 2020, respectively. During the year ended September 30, 2021, the Company issued 6,091,960 shares of common stock related to the automatic conversion of Convertible Notes and interest from a private placement to accredited investors in 2020. The Convertible Notes and interested were automatically converted to Common Stock at $1.00 per share on the one year anniversary starting on October 17, 2020. The Convertible Notes issued during the year ended September 30, 2021 are initially convertible into 7,104,500 shares of Common Stock, subject to certain adjustments, and the Warrants are initially exercisable for 3,552,250 shares of Common Stock. The fair value of the Warrants issued to debt holders during the year ended September 30, 2021 was $4,439,317 on the date of issuance and will be amortized over the one-year term of the Convertible Notes. The fair value of the warrants was recorded as debt discount (with an offset to APIC) and will be amortized over the one-year term of the Convertible Notes. In connection with the debt offering during the year ended September 30, 2021, the placement agent for the Convertible Notes and the Warrants received a cash fee of $727,117 and warrants to purchase 492,090 shares of the Company’s common stock, all based on 2-8% of gross proceeds to the Company. The warrants issued for these services had a fair value of $1,667,281 at the date of issuance. The fair value of the warrants was recorded as debt discount (with an offset to APIC) and will be amortized over the one-year term of the Convertible Notes. The $727,117 cash fee was recorded as issuance costs and will be amortized over the one-year term of the related Convertible Notes. During the year ended September 30, 2021, the Company recorded a debt discount of $9,769,683 associated with a beneficial conversion feature on the debt, which is being accreted using the effective interest method over the one-year term of the Convertible Notes. During the quarters ended December 31, 2021 and 2020, amortization related to the debt offerings of $4,184,657 and $1,596,980 of the beneficial conversion feature, warrants issued to debt holders and placement agent was recognized as interest expense in the consolidated statements of operations. Convertible notes payable as of December 31, 2021 and September 30, 2021 are summarized below: December 31, 2021 September 30, 2021 Convertible note- Clayton A. Struve $ 1,071,000 $ 1,071,000 Convertible note- Ronald P. Erickson and affiliates 1,184,066 1,184,066 2020 Convertible notes - 5,639,500 Q2 2021 Convertible notes 14,209,000 14,209,000 Boustead fee refund (originally booked as contra debt) 50,000 50,000 Less conversions of notes - (5,639,500 ) Less debt discount - BCF (1,845,841 ) (4,308,337 ) Less debt discount - warrants (838,640 ) (1,957,590 ) Less debt discount - warrants issued for services (453,773 ) (1,056,984 ) $ 13,375,812 $ 9,191,155 Note Payable-PPP Loans On April 30, 2020, the Company received $226,170 under the Paycheck Protection Program of the U.S. Small Business Administration’s 7(a) Loan Program pursuant to the Coronavirus, Aid, Relief and Economic Security Act (CARES Act), Pub. Law 116-136, 134 Stat. 281 (2020). As of December 31, 2021 and September 30, 2021, the Company recorded interest expense of $3,792 and $3,222, respectively. The Company utilized the funds in accordance with the legal requirements and expects this loan to be forgiven. Until the loan is legally forgiven, the loan balance will be outstanding. The Company filed the application for the loan forgiveness during the three months ended December 31, 2021 and the Company is expecting approval by the SBA. On February 1, 2021, the Company received $205,633 under the Paycheck Protection Program of the U.S. Small Business Administration’s 7(a) Loan Program pursuant to the Coronavirus, Aid, Relief and Economic Security Act (CARES Act), Pub. Law 116-136, 134 Stat. 281 (2020). As of December 31, 2021 and September 30, 2021, the Company recorded interest expense of $1,786 and $1,268, respectively. The Company utilized the funds in accordance with the legal requirements and expects this loan to be forgiven. Until the loan is legally forgiven, the loan balance will be outstanding. The Company filed the application for the loan forgiveness during the three months ended December 31, 2021 and the Company is expecting approval by the SBA. |
EQUITY
EQUITY | 3 Months Ended |
Dec. 31, 2021 | |
EQUITY | |
8. EQUITY | 8. EQUITY Authorized Capital Stock The Company was incorporated under the laws of the State of Nevada in 1998. The Company has authorized 205,000,000 shares of capital stock, of which 200,000,000 are shares of voting common stock, par value $0.001 per share, and 5,000,000 are shares preferred stock, par value $0.001 per share. At the annual shareholder meeting held on October 15, 2021, our authorized shares of common stock was increased to 200,000,000 shares of voting common stock, par value $0.001 per share. As of December 31, 2021, the Company had 35,969,912 shares of common stock issued and outstanding. As of December 31, 2021, there were options outstanding for the purchase of 18,423,245 common shares (including unearned stock option grants totaling 11,775,745 shares related to performance targets), warrants for the purchase of 21,654,013 common shares, and 8,108,356 shares of the Company’s common stock issuable upon the conversion of Series C and Series D Convertible Preferred Stock. In addition, the Company currently has 16,124,764 common shares (9,020,264 common shares at the current price of $0.25 per share and 7,104,500 common shares at the current price of $2.00 per share) reserved and are issuable upon conversion of convertible debentures of $16,464,066. All of which could potentially dilute future earnings per share but are excluded from the December 31, 2021, calculation of net loss per share because their impact is antidilutive. Annual Shareholder Meeting On October 15, 2021, the Company held its annual shareholder meeting. The Company’s shareholders approved and adopted various motions as detailed in the Company’s Form 8-K that was filed with the SEC on October 19, 2021. Second Amended and Restated Bylaws On October 15, 2021, the shareholders of the Company approving the Second Amended and Restated Bylaws effective October 15, 2021. Certificate of Amendment to Articles of Incorporation On December 6, 2021, the Company received approval from the State of Nevada for a Certificate of Amendment to the Articles of Incorporation related to the increase in the number of authorized common shares. Series C and D Preferred Stock and Warrants On August 5, 2016, the Company closed a Series C Preferred Stock and Warrant Purchase Agreement with Clayton A. Struve, an accredited investor for the purchase of $1,250,000 of preferred stock with a conversion price of $0.70 per share. The preferred stock has a yield of 8% and an ownership blocker of 4.99%. In addition, Mr. Struve received a five-year warrant to acquire 1,785,714 shares of common stock at $0.70 per share. On August 14, 2017, the price of the Series C Stock were adjusted to $0.25 per share pursuant to the documents governing such instruments. On December 31, 2021 and September 30, 2021 there are 1,785,715 Series C Preferred shares outstanding. On January 5, 2021, the Company extended the warrant expiration date to August 4, 2023. As of December 31, 2021 and September 30, 2021, the Company has $750,000 of Series D Preferred Stock outstanding with Clayton A. Struve, an accredited investor. On August 14, 2017, the price of the Series D Stock were adjusted to $0.25 per share pursuant to the documents governing such instruments. The Series D Preferred Stock is convertible into shares of common stock at a price of $0.25 per share or by multiplying the number of Series D Preferred Stock shares by the stated value and dividing by the conversion price then in effect, subject to certain diluted events, and has the right to vote the number of shares of common stock the Series D Preferred Stock would be issuable on conversion, subject to a 4.99% blocker. The Preferred Series D has an annual yield of 8% The Series D Preferred Stock is convertible into shares of common stock at a price of $0.25 per share or by multiplying the number of Series D Preferred Stock shares by the stated value and dividing by the conversion price then in effect, subject to certain diluted events, and has the right to vote the number of shares of common stock the Series D Preferred Stock would be issuable on conversion, subject to a 4.99% blocker. The Preferred Series D has an annual yield of 8% if and when dividends are declared. Series F Preferred Stock On August 1, 2018, the Company filed with the State of Nevada a Certificate of Designation establishing the Designations, Preferences, Limitations and Relative Rights of Series F Preferred Stock. The Designation authorized 500 shares of Series F Preferred Stock. The Series F Preferred Stock shall only be issued to the current Board of Directors on the date of the Designation’s filing and is not convertible into common stock. As set forth in the Designation, the Series F Preferred Stock has no rights to dividends or liquidation preference and carries rights to vote 100,000 shares of common stock per share of Series F upon a Trigger Event, as defined in the Designation. A Trigger Event includes certain unsolicited bids, tender offers, proxy contests, and significant share purchases, all as described in the Designation. Unless and until a Trigger Event, the Series F shall have no right to vote. The Series F Preferred Stock shall remain issued and outstanding until the date which is 731 days after the issuance of Series F Preferred Stock (“Explosion Date”), unless a Trigger Event occurs, in which case the Explosion Date shall be extended by 183 days. As of December 31, 2021 and September 30, 2021, there are no Series F shares outstanding. Securities Subject to Price Adjustments In the future, if the Company sells its common stock at a price below $0.25 per share, the exercise price of 8,108,356 outstanding shares of Series C and D Preferred Stock that adjust below $0.25 per share pursuant to the documents governing such instruments. In addition, the conversion price of Convertible Notes Payable of $16,464,066 or 16,124,764 common shares (9,020,264 common shares at $0.25 per share and 7,104,500 at $2.00) and the exercise price of additional outstanding warrants to purchase 10,334,381 shares of common stock would adjust below $0.25 per share pursuant to the documents governing such instruments. Warrants totaling 4,487,207 would adjust below $1.20 per share pursuant to the documents governing such instruments. Warrants totaling 3,954,625 would adjust below $2.40 per share pursuant to the documents governing such instruments. Common Stock All of the offerings and sales described below were deemed to be exempt under Rule 506 of Regulation D and/or Section 4(a)(2) of the Securities Act. No advertising or general solicitation was employed in offering the securities, the offerings and sales were made to a limited number of persons, all of whom were accredited investors and transfer was restricted by the company in accordance with the requirements of Regulation D and the Securities Act. All issuances to accredited and non-accredited investors were structured to comply with the requirements of the safe harbor afforded by Rule 506 of Regulation D, including limiting the number of non-accredited investors to no more than 35 investors who have sufficient knowledge and experience in financial and business matters to make them capable of evaluating the merits and risks of an investment in our securities. Three Months Ended December 31, 2021 The Company issued 801,486 shares of common stock related to warrant exercises and received $766,486. The Company issued 1,875 shares related to the exercise of stock option grants and received $2,344. Warrants to Purchase Common Stock Three Months Ended December 31, 2021 The Company issued 801,486 shares of common stock related to warrant exercises and received $766,486. Warrants to purchase 108,756 shares of common stock at $1.00 per share expired. December 31, 2021 Shares Weighted Average Exercise Price Outstanding at beginning of period 22,564,255 $ 0.998 Issued - - Exercised (801,486 ) (0.956 ) Forfeited - - Expired (108,756 ) (1.000 ) Outstanding at end of period 21,654,013 $ 0.999 Exerciseable at end of period 21,654,013 The following table summarizes information about warrants outstanding and exercisable as of December 31, 2021: December 31, 2021 Number of Warrants Weighted Average Remaining Life ( In Years) Weighted Average Exercise Price Shares Exerciseable Weighted Average Exercise Price 10,779,381 0.99 $ 0.250 10,779,381 $ 0.250 6,499,707 3.07 1.20-1.85 6,499,707 1.20-1.85 4,364,925 4.25 2.00-2.40 4,364,925 2.00-2.40 10,000 1.50 4.080 10,000 4.080 21,654,013 3.38 $ 0.999 21,654,013 $ 0.999 There were vested warrants of 21,654,013 with an aggregate intrinsic value of $15,800,709. |
STOCK INCENTIVE PLAN
STOCK INCENTIVE PLAN | 3 Months Ended |
Dec. 31, 2021 | |
STOCK INCENTIVE PLAN | |
9. STOCK INCENTIVE PLAN | 9. STOCK INCENTIVE PLANS Know Labs, Inc. Stock Incentive Plan On October 15, 2021, at the annual shareholder meeting held on October 15, 2021, the 2021 Equity Incentive Plan was adopted and approved, increasing size of the stock available under the Stock Option Plan to 20,000,000 shares. On December 10, 2021, the Company filed a registration statement on Form S-8 that registered 34,650,120 shares issued under the 2011 Stock Incentive Plan and 2021 Equity Incentive Plan. Three Months Ended December 31, 2021 The Compensation committee issued stock option grants to seven employees and consultants for 810,000 shares at an exercise price of $2.09 per share. The stock option grants expire in five years. The stock option grant vests quarterly over four years. On October 13, 2021, a consultant exercised stock option grants for 1,875 shares at $2,344. On December 16, 2021, the Company issued a stock option grant to Ronald P. Erickson for 1,000,000 shares at an exercise price of $2.09 per share. The stock option grant expires in five years. The stock option grant vests quarterly over four years. On December 16, 2021, the Company issued a stock option grant to Phillip A. Bosua for 1,300,000 shares at an exercise price of $2.09 per share. The stock option grant expires in five years. The stock option grant vests quarterly over four years. There are currently 18,423,245 (including unearned stock option grants totaling 11,775,745 shares related to performance milestones) options to purchase common stock at an average exercise price of $1.653 per share outstanding as of December 31, 2021 under the 2021 Stock Incentive Plan. The Company recorded $204,170 and $119,483 of compensation expense, net of related tax effects, relative to stock options for the three months ended December 31, 2021 and 2020 and in accordance with ASC 718. As of December 31, 2021, there is approximately $5,717,669, net of forfeitures, of total unrecognized costs related to employee granted stock options that are not vested. These costs are expected to be recognized over a period of approximately 3.98 years. Stock option activity for the three months ended December 31, 2021 and the years ended September 30, 2021 and 2020 was as follows: Options Weighted Average Exercise Price $ Outstanding as of October 1, 2019 4,532,668 $ 2.025 $ 9,180,369 Granted 3,085,000 1.142 3,522,400 Exercised (73,191 ) (0.250 ) (18,298 ) Forfeitures (2,739,477 ) (2.593 ) (7,103,921 ) Outstanding as of September 30, 2020 4,805,000 1.161 5,580,550 Granted 10,650,745 1.766 18,807,990 Exercised (20,625 ) (1.359 ) (28,031 ) Forfeitures (120,000 ) (3.300 ) (396,000 ) Outstanding as of September 30, 2021 15,315,120 1.565 23,964,509 Granted 3,110,000 2.090 6,499,900 Exercised (1,875 ) (1.250 ) (2,344 ) Forfeitures Outstanding as of December 31, 2021 18,423,245 $ 1.653 $ 30,462,065 The following table summarizes information about stock options outstanding and exercisable as of December 31, 2021: Range of Exercise Prices Number Outstanding Weighted Average Remaining Life In Years Weighted Average Exercise Price Outstanding Number Exerciseable Weighted Average Exercise Price Exerciseable $ 0.25 230,000 1.45 $ 0.250 172,500 $ 0.250 1.10-1.25 3,072,500 2.89 1.108 497,083 1.181 1.28-1.53 9,480,745 3.58 1.499 1,077,396 1.308 1.79-3.67 5,640,000 4.71 0.957 188,438 1.843 18,423,245 3.98 $ 1.653 1,935,417 $ 1.234 There are stock option grants of 18,423,245 shares as of December 31, 2021 with an aggregate intrinsic value of $8,253,950. As of September 30, 2021, the 2020 Particle Stock Incentive Plan, was terminated and all stock option grants were cancelled by the participants. The Company recorded $197,553 and $833,771 of compensation expense, net of related tax effects, relative to stock options for the years ended September 30, 2021 and 2020 and in accordance with ASC 718. |
OTHER SIGNIFICANT TRANSACTIONS
OTHER SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES | 3 Months Ended |
Dec. 31, 2021 | |
OTHER SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES | |
10. OTHER SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES | 10. OTHER SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES Transactions with Clayton Struve See Notes 7 and 8 for related party transactions with Clayton A. Struve. The Company owes Clayton A. Struve $1,071,000 under convertible promissory or OID notes. The Company recorded accrued interest of $80,952 and $79,062 as of December 31, 2021 and September 30, 2021, respectively. On December 23, 2020, the Company signed Amendments to the convertible promissory or OID notes, extending the due dates to March 31, 2021. On November 8, 2021, the Company signed Amendments to the convertible promissory or OID notes, extending the due dates to March 31, 2022. Related Party Transactions with Ronald P. Erickson See Notes 7, 9 and 11 for related party transactions with Ronald P. Erickson. On December 16, 2021, the Company issued a stock option grant to Ronald P. Erickson for 1,000,000 shares at an exercise price of $2.09 per share. The stock option grant expires in five years. The stock option grant vests quarterly over four years. Mr. Erickson and/or entities with which he is affiliated also have accrued compensation, travel and interest of approximately $401,864 and $421,599 as of December 31, 2021 and September 30, 2021, respectively. During the three months ended December 31, 2021, the Company paid $45,000 of salaries to Mr. Erickson that were previously accrued and reported but were deferred. Related Party Transaction with Phillip A. Bosua See Notes 9 and 11 for related party transactions with Phillip A. Bosua. On December 16, 2021, the Company issued a stock option grant to Phillip A. Bosua for 1,300,000 shares at an exercise price of $2.09 per share. The stock option grant expires in five years. The stock option grant vests quarterly over four years. As of December 31, 2021 the Company has recorded an accounts receivable-related party of $3,124,581 for the cash it expects to receive from the CEO’s personal digital account. Included in accrued expenses-related party at December 31, 2021 is approximately $1.56 million of special bonus compensation the Company expects to pay employees and its CEO for the NFT sales once the cash is received. As of December 31, 2021, accrued expenses include approximately $326,000 of expenses, primarily sales and use tax, that the Company expects to pay for the NFT sales. During 2021, approximately $1.3 million of the selling and transactional costs for the digital assets was paid through the CEO”s personal digital asset account including approximately $1.075 million which was paid to a consultant via the transfer of Ethereum. |
COMMITMENTS CONTINGENCIES AND L
COMMITMENTS CONTINGENCIES AND LEGAL PROCEEDINGS | 3 Months Ended |
Dec. 31, 2021 | |
COMMITMENTS CONTINGENCIES AND LEGAL PROCEEDINGS | |
11. COMMITMENTS, CONTINGENCIES AND LEGAL PROCEEDINGS | 11. COMMITMENTS, CONTINGENCIES AND LEGAL PROCEEDINGS Legal Proceedings The Company may from time to time become a party to various legal proceedings arising in the ordinary course of our business. The Company is currently not a party to any pending legal proceeding that is not ordinary routine litigation incidental to our business. Employment Agreement with Phillip A. Bosua, Chief Executive Officer See the Employment Agreement for Phillip A. Bosua that was disclosed in Form 10-K filed with the SEC on December 21, 2021. Phillip A. Bosua. Employment Agreement with Ronald P. Erickson, Chairman of the Board and Interim Chief Financial Officer See the Employment Agreement for Ronald P. Erickson that was disclosed in Form 10-K filed with the SEC on December 21, 2021. Properties and Operating Leases The Company is obligated under the following leases for its various facilities. Corporate Offices On April 13, 2017, the Company leased its executive office located at 500 Union Street, Suite 810, Seattle, Washington, USA, 98101. The Company leases 943 square feet and the current net monthly payment is $3,334. The monthly payment increases approximately 3% each year and the lease expires on May 31, 2022. On October 31, 2021, the Company extended the lease from June 1, 2022 to May 31, 2023 at $2,986 per month. Lab Facilities and Executive Offices On February 1, 2019, the Company leased its lab facilities and executive offices located at 915 E Pine Street, Suite 212, Seattle, WA 98122. The Company leases 2,642 square feet and the net monthly payment at September 30, 2021 is $8,697. The monthly payment increases approximately 3% annually each year on July 1. The lease expires on June 30, 2024. On October 11, 2021, the Company entered into First Amendment of Lease and added 1,030 square feet for year for $1,000 for $5,000 per month. The space will be utilized for clinical trials. |
SEGMENT REPORTING
SEGMENT REPORTING | 3 Months Ended |
Dec. 31, 2021 | |
SEGMENT REPORTING | |
12. SEGMENT REPORTING | 12. SEGMENT REPORTING The management of the Company considers the business to currently have three operating segments (i) the development of the Bio-RFID™” and “ChromaID™” technologies; (ii) Particle, Inc. technology; and (iii) AI sales of NFT products. Particle commenced operations in the three months ended June 30, 2020 and operations ceased during the three months ended September 30, 2021. AI commenced operations during the three months ended December 31, 2021. The reporting for the three months ended December 31, 2021 and 2020 was as follows (in thousands): Segment Revenue Segment Operating Profit (Loss) Segment Assets Three Months Ended December 31, 2021 Development of the Bio-RFID™” and “ChromaID™” technologies $ - $ (2,087 ) $ 11,755 Particle, Inc. technology - (15 ) 5 Digital asset sales 4,351 1,233 3,125 Total segments $ 4,351 $ (869 ) $ 14,885 Three Months Ended December 31, 2020 Development of the Bio-RFID™” and “ChromaID™” technologies $ - $ (3,190 ) $ 3,158 Particle, Inc. technology - (375 ) 66 Total segments $ - $ (3,565 ) $ 3,224 During the three months ended December 31, 2021 and 2020, the Company incurred non-cash expenses related to operations of $4,428,718 and $3,648,181. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Dec. 31, 2021 | |
SUBSEQUENT EVENTS | |
15. SUBSEQUENT EVENTS | 13. SUBSEQUENT EVENTS The Company evaluated subsequent events, for the purpose of adjustment or disclosure, up through the date the financial statements were issued. Subsequent to December 31, 2021, there were the following material transactions that require disclosure: Equity Issuances On January 5, 2022, the Company issued 20,000 warrants to purchase common stock each to three directors shares at $1.70 per share. The warrants expire on January 5, 2027. On January 15, 2022, the Company approved 30,000 shares each to three directors shares at $1.70 per share. Patent Issuances On January 11, 2022, the Company was issued US Patent No. 11,223,383, entitled “NON-INVASIVE ANALYTE SENSOR AND SYSTEM WITH DECOUPLED AND INEFFICIENT TRANSMIT AND RECEIVE ANTENNAS”. This patent expires in approximately December 2040. This patent pertains to the construction of the Know Labs Bio-RFID sensor technology. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES ADOPTION OF ACCOUNTING STANDARDS (Policies) | 3 Months Ended |
Dec. 31, 2021 | |
SIGNIFICANT ACCOUNTING POLICIES ADOPTION OF ACCOUNTING STANDARDS | |
Basis of Presentation | Basis of Presentation |
Principles of Consolidation | Principles of Consolidation |
Cash and Cash Equivalents | Cash and Cash Equivalents |
Equipment | Equipment |
Long-Lived Assets | Long-Lived Assets |
Intangible Assets | Intangible Assets |
Revenue Recognition | Revenue Recognition · identification of the contract, or contracts, with the 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; and · recognition of the revenue when, or as, the Company satisfies a performance obligation. Revenue is recognized when control of the promised goods or services is transferred to the customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.. During the three months ended December 31, 2021, the Company’s artificial intelligence (AI) Deep Learning Platform began generating revenue from digital asset sales of NFT’s. The Company engineering team, using its research date, AI and proprietary algorithms, produced NFT’s in the form of digital art. The NFT’s produced had no recorded cost basis. |
Digital Asset Sales | Digital Asset Sales - After the sale of the NFT, the Ethereum is converted to US dollars as soon as practically possible. The Company records the total value of the gross NFT sale in revenue. Costs incurred in connection with the NFT transaction are recorded in the statement of operations as Selling and Transactional Cost of Digital Assets and include costs to outside consultants, employee and CEO special bonus compensation, and estimated sales and use tax. |
Research and Development Expenses | Research and Development Expenses The Company’s current research and development efforts are primarily focused on improving our Bio-RFID technology, extending its capacity and developing new and unique applications for this technology. As part of this effort, the Company conducts on-going laboratory testing to ensure that application methods are compatible with the end-user and regulatory requirements, and that they can be implemented in a cost-effective manner. The Company also is actively involved in identifying new applications. The Company’s current internal team along with outside consultants has considerable experience working with the application of the Company’s technologies and their applications. The Company engages third party experts as required to supplement our internal team. The Company believes that continued development of new and enhanced technologies is essential to our future success. The Company incurred expenses of $885,752, $3,969,972 and $2,033,726 for the three months ended December 31, 2021 and the years ended September 30, 2021 and 2020, respectively, on development activities. |
Advertising | Advertising |
Fair Value Measurements and Financial Instruments | Fair Value Measurements and Financial Instruments Fair Value Measurement and Disclosures Level 1 - Quoted prices in active markets for identical assets and liabilities; Level 2 - Inputs other than level one inputs that are either directly or indirectly observable; and. Level 3 - Inputs to the valuation methodology are unobservable and significant to the fair value measurement. The recorded value of other financial assets and liabilities, which consist primarily of cash and cash equivalents, accounts receivable, other current assets, and accounts payable and accrued expenses approximate the fair value of the respective assets and liabilities as of December 31, 2021 and September 30, 2021 are based upon the short-term nature of the assets and liabilities. The Company has a money market account which is considered a level 1 asset. The balance as of December 31, 2021 and September 30, 2021 was $10,483,743 and $12,217,714, respectively. |
Derivative Financial Instruments | Derivative Financial Instruments - The Company determined that the conversion features for purposes of bifurcation within its currently outstanding convertible notes payable were immaterial and there was no derivative liability to be recorded as of December 31, 2021 and September 30, 2021. |
Stock Based Compensation | Stock Based Compensation |
Convertible Securities | Convertible Securities |
Net Loss per Share | Net Loss per Share As of December 31, 2020, the Company had 25,370,224 shares of common stock issued and outstanding. As of December 31, 2020, there were options outstanding for the purchase of 12,936,955 common shares (including unearned stock option grants totaling 10,625,745 shares related to performance targets), warrants for the purchase of 22,016,367 common shares, and 8,108,356 shares of the Company’s common stock issuable upon the conversion of Series C and Series D Convertible Preferred Stock. In addition, the Company currently has 14,189,764 common shares (9,020,264 common shares at the current price of $0.25 per share and 5,169,500 common shares at the current price of $1.20 per share) reserved and are issuable upon conversion of convertible debentures of $7,424,566. All of which could potentially dilute future earnings per share but are excluded from the December 31, 2020 calculation of net loss per share because their impact is antidilutive. |
Comprehensive Loss | Comprehensive loss |
Dividend Policy | Dividend Policy |
Use of Estimates | Use of Estimates |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Debt -- debt with Conversion and Other Options (Subtopic470-20) and Derivatives and Hedging --Contracts in Entity’ Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’ Own Equity Based on the Company’s review of accounting standard updates issued since the filing of the December 31, 2021 Form 10-Q, there have been no other newly issued or newly applicable accounting pronouncements that have had, or are expected to have, a significant impact on the Company’s consolidated financial statements. Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company’s consolidated financial statements upon adoption. |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 3 Months Ended |
Dec. 31, 2021 | |
PROPERTY AND EQUIPMENT | |
Schedule of Property and equipment | Estimated Useful Lives December 31, 2021 September 30, 2021 Machinery and equipment 2-3 years $ 1,040,285 $ 654,798 Leasehold improvements 5 years 3,612 3,612 Furniture and fixtures 5 years 26,855 26,855 Less: accumulated depreciation (398,432 ) (356,761 ) $ 672,320 $ 328,504 |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Dec. 31, 2021 | |
LEASES | |
Summary of minimum future lease payments | Years Ended December 31, $ 2022 $ 150,811 2023 134,537 2024 82,232 Total rem aining payments 367,581 Less Imputed Interest (27,375 ) Total lease liability $ 340,206 |
CONVERTIBLE NOTES PAYABLE AND_2
CONVERTIBLE NOTES PAYABLE AND NOTE PAYABLE (Tables) | 3 Months Ended |
Dec. 31, 2021 | |
CONVERTIBLE NOTES PAYABLE AND NOTE PAYABLE | |
Schedule of convertible notes | December 31, 2021 September 30, 2021 Convertible note- Clayton A. Struve $ 1,071,000 $ 1,071,000 Convertible note- Ronald P. Erickson and affiliates 1,184,066 1,184,066 2020 Convertible notes - 5,639,500 Q2 2021 Convertible notes 14,209,000 14,209,000 Boustead fee refund (originally booked as contra debt) 50,000 50,000 Less conversions of notes - (5,639,500 ) Less debt discount - BCF (1,845,841 ) (4,308,337 ) Less debt discount - warrants (838,640 ) (1,957,590 ) Less debt discount - warrants issued for services (453,773 ) (1,056,984 ) $ 13,375,812 $ 9,191,155 |
EQUITY (Tables)
EQUITY (Tables) | 3 Months Ended |
Dec. 31, 2021 | |
EQUITY | |
Warrant activity | December 31, 2021 Shares Weighted Average Exercise Price Outstanding at beginning of period 22,564,255 $ 0.998 Issued - - Exercised (801,486 ) (0.956 ) Forfeited - - Expired (108,756 ) (1.000 ) Outstanding at end of period 21,654,013 $ 0.999 Exerciseable at end of period 21,654,013 December 31, 2021 Number of Warrants Weighted Average Remaining Life ( In Years) Weighted Average Exercise Price Shares Exerciseable Weighted Average Exercise Price 10,779,381 0.99 $ 0.250 10,779,381 $ 0.250 6,499,707 3.07 1.20-1.85 6,499,707 1.20-1.85 4,364,925 4.25 2.00-2.40 4,364,925 2.00-2.40 10,000 1.50 4.080 10,000 4.080 21,654,013 3.38 $ 0.999 21,654,013 $ 0.999 |
Warrants outstanding and exercisable |
STOCK INCENTIVE PLANS (Tables)
STOCK INCENTIVE PLANS (Tables) | 3 Months Ended |
Dec. 31, 2021 | |
STOCK INCENTIVE PLAN | |
Stock option activity | Options Weighted Average Exercise Price $ Outstanding as of October 1, 2019 4,532,668 $ 2.025 $ 9,180,369 Granted 3,085,000 1.142 3,522,400 Exercised (73,191 ) (0.250 ) (18,298 ) Forfeitures (2,739,477 ) (2.593 ) (7,103,921 ) Outstanding as of September 30, 2020 4,805,000 1.161 5,580,550 Granted 10,650,745 1.766 18,807,990 Exercised (20,625 ) (1.359 ) (28,031 ) Forfeitures (120,000 ) (3.300 ) (396,000 ) Outstanding as of September 30, 2021 15,315,120 1.565 23,964,509 Granted 3,110,000 2.090 6,499,900 Exercised (1,875 ) (1.250 ) (2,344 ) Forfeitures Outstanding as of December 31, 2021 18,423,245 $ 1.653 $ 30,462,065 |
Stock options outstanding and exercisable | Range of Exercise Prices Number Outstanding Weighted Average Remaining Life In Years Weighted Average Exercise Price Outstanding Number Exerciseable Weighted Average Exercise Price Exerciseable $ 0.25 230,000 1.45 $ 0.250 172,500 $ 0.250 1.10-1.25 3,072,500 2.89 1.108 497,083 1.181 1.28-1.53 9,480,745 3.58 1.499 1,077,396 1.308 1.79-3.67 5,640,000 4.71 0.957 188,438 1.843 18,423,245 3.98 $ 1.653 1,935,417 $ 1.234 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 3 Months Ended |
Dec. 31, 2021 | |
SEGMENT REPORTING | |
Segment reporting | Segment Revenue Segment Operating Profit (Loss) Segment Assets Three Months Ended December 31, 2021 Development of the Bio-RFID™” and “ChromaID™” technologies $ - $ (2,087 ) $ 11,755 Particle, Inc. technology - (15 ) 5 Digital asset sales 4,351 1,233 3,125 Total segments $ 4,351 $ (869 ) $ 14,885 Three Months Ended December 31, 2020 Development of the Bio-RFID™” and “ChromaID™” technologies $ - $ (3,190 ) $ 3,158 Particle, Inc. technology - (375 ) 66 Total segments $ - $ (3,565 ) $ 3,224 |
ORGANIZATION (Details Narrative
ORGANIZATION (Details Narrative) - $ / shares | Dec. 31, 2021 | Oct. 15, 2021 | Sep. 30, 2021 |
ORGANIZATION | |||
Authorized shares of capital common stock | 205,000,000 | 200,000,000 | |
Authorized shares of capital stock par value | $ 0.001 | $ 0.001 | $ 0.001 |
Preferred stock shares authorized | 5,000,000 | 5,000,000 | |
Preferred stock share par value | $ 0.001 | $ 0.001 | |
Authorized common stock increased | 200,000,000 |
LIQUIDITY (Details Narrative)
LIQUIDITY (Details Narrative) - USD ($) | Mar. 15, 2021 | Dec. 31, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 |
LIQUIDITY | |||||
Gross proceeds from private placement | $ 14,209,000 | ||||
Cash and cash equivalents | $ 10,733,743 | $ 12,258,218 | $ 2,927,234 | $ 4,298,179 | |
Warrants in private placement to accredited investors | 3,552,250 | ||||
Working capital | 9,979,830 | ||||
Convertible notes converted into common stock per share | $ 2 | ||||
Bear annual interest rate | 8.00% | ||||
Accumulated deficit | $ (86,683,113) | $ (81,326,494) |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES ADOPTION OF ACCOUNTING STANDARDS (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
FDIC insurance | $ 250,000 | |||
Uninsured deposits | 10,483,743 | $ 12,008,228 | ||
Research and development expense | 885,752 | $ 966,861 | 3,969,972 | $ 2,033,726 |
Advertising and marketing costs | 294,391 | $ 118,750 | $ 230,844 | |
Money market accounts | $ 10,483,743 | $ 12,217,714 | ||
Common stock shares issued | 35,969,912 | 25,370,224 | 35,166,551 | |
Common stock shares outstanding | 35,969,912 | 25,370,224 | 35,166,551 | |
Issuable upon conversion of convertible debentures | 16,124,764 | 14,189,764 | ||
Unearned stock option grants | 16,464,066 | 7,424,566 | ||
Convertible Preferred Stock | ||||
Antidilutive securities | 8,108,356 | 8,108,356 | 8,108,356 | |
Warrants | ||||
Antidilutive securities | 21,654,013 | 22,016,367 | 20,016,367 | |
Stock Option 1 | ||||
Unearned stock option grants | 11,775,745 | 10,625,745 | ||
Antidilutive securities | 18,423,245 | 12,936,955 | ||
Leasehold Improvements | ||||
Estimated useful lives of assets | 5 years | |||
Minimum | ||||
Estimated useful lives of assets | 2 years | |||
Maximum | ||||
Estimated useful lives of assets | 5 years | |||
Transaction 1 | ||||
Common stock shares | 9,020,264 | 9,020,264 | ||
Common shares current price per share | $ 0.25 | $ 0.25 | ||
Transaction 2 | ||||
Common stock shares | 7,104,500 | 5,169,500 | ||
Common shares current price per share | $ 2 | $ 1.20 |
Artificial Intelligence (AI) _2
Artificial Intelligence (AI) Deep Learning Platform (Details Narrative) - USD ($) | 3 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2021 | |
REVENUE- DIGITAL ASSET SALES | $ 4,351,400 | $ 0 | |
Accounts receivable related party | (3,124,581) | $ 0 | |
Special bonus compensation | 1,560,000 | ||
Accrued expenses | 1,508,301 | $ 893,137 | |
Selling and transactional costs | 1,300,000 | ||
Artificial Intelligence [Member] | |||
REVENUE- DIGITAL ASSET SALES | 4,351,400 | ||
Accounts receivable related party | (3,124,581) | ||
Special bonus compensation | 1,560,000 | ||
Accrued expenses | 326,000 | ||
Payment to consultant | 1,075,000 | ||
Selling and transactional costs | $ 1,300,000 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) | Dec. 31, 2021 | Sep. 30, 2021 |
PROPERTY AND EQUIPMENT | ||
Machinery and equipment (2-3 years) | $ 1,040,285 | $ 654,798 |
Leasehold improvements (5 years) | 3,612 | 3,612 |
Furniture and fixtures (5 years) | 26,855 | 26,855 |
Less: accumulated depreciation | (398,432) | (356,761) |
Property and equipment, net | $ 672,320 | $ 328,504 |
PROPERTY AND EQUIPMENT (Detai_2
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
PROPERTY AND EQUIPMENT | ||
Depreciation expense | $ 41,672 | $ 21,300 |
LEASES (Details)
LEASES (Details) - USD ($) | Dec. 31, 2021 | Sep. 30, 2021 |
LEASES | ||
2022 | $ 150,811 | |
2023 | 134,537 | |
2024 | 82,232 | |
Total Remaining Payments | 367,581 | |
Imputed interest | (27,375) | |
Total lease liability | $ 340,206 | $ 290,000 |
LEASES (Details Narrative)
LEASES (Details Narrative) - USD ($) | 3 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2021 | |
LEASES | |||
Lease cost | $ 40,629 | $ 37,612 | |
Right-of-use assets | 340,448 | $ 289,002 | |
Total lease liability | 340,206 | $ 290,000 | |
Cash paid for ROU operating lease liability | $ 50,051 | ||
Weighted-average remaining lease term | 28 years | ||
Weighted-average discount rate | 7.00% |
CONVERTIBLE NOTES PAYABLE AND_3
CONVERTIBLE NOTES PAYABLE AND NOTE PAYABLE (Details) - USD ($) | Dec. 31, 2021 | Sep. 30, 2021 |
less conversions of notes | $ 0 | $ (5,639,500) |
less debt discount - BCF | (1,845,841) | (4,308,337) |
less debt discount - warrants | (838,640) | (1,957,590) |
less debt discount - warrants issued for services | (453,773) | (1,056,984) |
Convertible notes, net | 13,375,812 | 9,191,155 |
Convertible Note - Clayton A. Struve | ||
Convertible notes, gross | 1,071,000 | 1,071,000 |
Convertible Note - Ronald P. Erickson and Affiliates | ||
Convertible notes, gross | 1,184,066 | 1,184,066 |
2020 Convertible Notes | ||
Convertible notes, gross | 0 | 5,639,500 |
Q2 2021 Convertible Notes | ||
Convertible notes, gross | 14,209,000 | 14,209,000 |
Bousted Fee Refund (Originally Booked as Contra Debt) | ||
Convertible notes, gross | $ 50,000 | $ 50,000 |
CONVERTIBLE NOTES PAYABLE AND_4
CONVERTIBLE NOTES PAYABLE AND NOTE PAYABLE (Details Narrative) - USD ($) | Feb. 02, 2021 | Dec. 31, 2020 | Apr. 30, 2020 | Mar. 16, 2018 | Dec. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2021 | Sep. 30, 2020 |
Issuance costs of debt | $ 727,117 | |||||||
Common stock issued related to conversion of convertible notes and interest | 14,189,764 | 16,124,764 | 14,189,764 | |||||
Interest expense | $ 4,486,960 | $ 1,733,738 | ||||||
Convertible Note - Clayton A. Struve | ||||||||
Accrued interest | 80,952 | 79,062 | ||||||
Convertible promissory or OID notes | 1,071,000 | |||||||
Convertible Note - Ronald P. Erickson and Affiliates | ||||||||
Accrued interest | 234,153 | 216,246 | ||||||
Warrant to purchase common stock shares | 1,039,666 | |||||||
Exercise price of warrants | $ 0.50 | |||||||
Fair value of warrants | $ 110,545 | |||||||
Convertible Debt Offering | ||||||||
Issuance costs of debt | $ 727,117 | |||||||
Warrant to purchase common stock shares | 492,090 | |||||||
Fair value of warrants | $ 4,439,317 | |||||||
Warrants to purchase common stock equal to percentage rate | 50.00% | 50.00% | ||||||
Fund raised by convertible debt offerings | $ 24,000,000 | $ 14,209,000 | $ 5,639,500 | |||||
Common stock convertible subject to certain adjustments | 7,104,500 | |||||||
Warrants exercisable for shares of common stock | 3,552,250 | |||||||
Proceeds from convertible notes and warrants | $ 727,117 | |||||||
Warrants issued for services fair value | 1,667,281 | |||||||
Debt discount beneficial conversion feature | $ 9,769,683 | |||||||
Common stock issued related to conversion of convertible notes and interest | 6,091,960 | |||||||
Common stock conversion price per share | $ 1 | |||||||
Amortization related to debt offerings | $ 4,184,657 | 1,596,980 | ||||||
Convertible Debt Offering | Minimum | ||||||||
Exercise price of warrants | $ 1.20 | |||||||
Gross proceeds percentage by warrant to purchase common stock | 2.00% | |||||||
Convertible Debt Offering | Maximum | ||||||||
Exercise price of warrants | $ 2.40 | |||||||
Gross proceeds percentage by warrant to purchase common stock | 8.00% | |||||||
Convertible Note - J3E2A2Z Notes | ||||||||
Convertible redeemable promissory note amount | 664,233 | |||||||
Convertible redeemable promissory note principal amount | 664,233 | |||||||
Convertible Note - J3E2A2Z Account Payable | ||||||||
Convertible redeemable promissory note amount | 519,833 | |||||||
Convertible redeemable promissory note principal amount | $ 519,833 | |||||||
Note Payable | ||||||||
Proceeds from paycheck protection program loan | $ 205,633 | $ 226,170 | ||||||
Note Payable | On April 30, 2020 [Member] | ||||||||
Interest expense | $ 3,792 | 3,222 | ||||||
Note Payable | On February 1, 2021 [Member] | ||||||||
Interest expense | $ 1,786 | $ 1,268 |
EQUITY (Details)
EQUITY (Details) - $ / shares | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | |
Shares | |||
Share Outstanding at begin of period | 22,564,255 | ||
Issued | 0 | ||
Exercised | (801,486) | ||
Forfeited | 0 | ||
Expired | (108,756) | ||
Share Outstanding at end of period | 21,654,013 | 22,564,255 | |
Exercisable at end of period | 21,654,013 | ||
Weighted Average Exercise Price: | |||
Outstanding at begin of period | $ 0.998 | $ 1.161 | $ 2.025 |
Weighted Average Exercise Price Issued | 2.090 | 1.766 | 1.142 |
Weighted Average Exercise Price Exercised | (0.956) | (1.359) | (0.250) |
Weighted Average Exercise Price Forfeited | 0 | 3.300 | 2.593 |
Weighted Average Exercise PriceExpired | (1) | ||
Outstanding at end of period | $ 0.999 | $ 0.998 | $ 1.161 |
EQUITY (Details 1)
EQUITY (Details 1) - $ / shares | 3 Months Ended | |
Dec. 31, 2021 | Oct. 15, 2021 | |
Number of warrants | 18,423,245 | 32,629,376 |
Warrant One [Member] | ||
Number of warrants | 10,779,381 | |
Weighted average remaining life (years) | 11 months 26 days | |
Weighted average exercise price, outstanding | $ 0.250 | |
Shares exercisable | 10,779,381 | |
Weighted average exercise price, exercisable | $ 0.250 | |
Warrant Two [Member] | ||
Number of warrants | 6,499,707 | |
Weighted average remaining life (years) | 3 years 25 days | |
Shares exercisable | 6,499,707 | |
Warrant Two [Member] | Minimum | ||
Weighted average exercise price, outstanding | $ 1.20 | |
Weighted average exercise price, exercisable | 1.85 | |
Warrant Two [Member] | Maximum | ||
Weighted average exercise price, outstanding | 1.20 | |
Weighted average exercise price, exercisable | $ 1.85 | |
Warrant Three [Member] | ||
Number of warrants | 4,364,925 | |
Weighted average remaining life (years) | 4 years 3 months | |
Shares exercisable | 4,364,925 | |
Warrant Three [Member] | Minimum | ||
Weighted average exercise price, outstanding | $ 2 | |
Weighted average exercise price, exercisable | 2.40 | |
Warrant Three [Member] | Maximum | ||
Weighted average exercise price, outstanding | 2 | |
Weighted average exercise price, exercisable | $ 2.40 | |
Warrant Four [Member] | ||
Number of warrants | 10,000 | |
Weighted average remaining life (years) | 1 year 6 months | |
Weighted average exercise price, outstanding | $ 4.080 | |
Shares exercisable | 10,000 | |
Weighted average exercise price, exercisable | $ 4.080 | |
Warrent Five [Member] | ||
Number of warrants | 21,654,013 | |
Weighted average remaining life (years) | 3 years 4 months 17 days | |
Weighted average exercise price, outstanding | $ 0.999 | |
Shares exercisable | 21,654,013 | |
Weighted average exercise price, exercisable | $ 0.999 |
EQUITY (Details Narrative)
EQUITY (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |||||
Dec. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2021 | Oct. 15, 2021 | Oct. 01, 2021 | Oct. 01, 2020 | Sep. 30, 2020 | |
Unearned stock option grants | 11,775,745 | ||||||
Convertible Notes Payable | $ 16,464,066 | ||||||
Proceeds from issuance of common stock | $ 2,344 | $ 0 | |||||
Common Stock Shares issued | 801,486 | ||||||
Intrinsic value | $ 15,800,709 | ||||||
Money warrants | $ 21,654,013 | ||||||
Preferred stock par value | $ 0.001 | $ 0.001 | |||||
Shareholders paid | $ 125,000 | ||||||
Common stock shares issued | 35,969,912 | 25,370,224 | 35,166,551 | ||||
Common stock shares outstanding | 35,969,912 | 25,370,224 | 35,166,551 | ||||
Options to purchase common stock share | 18,423,245 | ||||||
Warrant issued to common stock | 21,654,013 | ||||||
Common shares | 16,124,764 | ||||||
Common stock par value | $ 0.001 | $ 0.001 | $ 0.001 | ||||
Preferred stock shares authorized | 5,000,000 | 5,000,000 | |||||
Authorized common stock increased | 200,000,000 | ||||||
Common stock shares authorized | 200,000,000 | 100,000,000 | |||||
Warrants to Purchase Common Stock [Member] | |||||||
Proceeds from issuance of common stock | $ 108,756 | ||||||
Common stock par value | $ 1 | ||||||
Warrant [Member] | |||||||
Proceeds from issuance of common stock | $ 766,486 | ||||||
Common Stock Shares issued | 801,486 | ||||||
Stock at 0.25 | |||||||
Common shares | 9,020,264 | ||||||
Warrants totaling | $ 4,487,207 | ||||||
Price of warrants | $ 0.25 | ||||||
Adjusting amount of shares, percentage | 1.20% | ||||||
Stock at 2.00 | |||||||
Common shares | 7,104,500 | ||||||
Warrants totaling | $ 3,954,625 | ||||||
Price of warrants | $ 2 | ||||||
Adjusting amount of shares, percentage | 2.40% | ||||||
Authorized Capital Stock [Member] | |||||||
Preferred stock par value | $ 0.001 | ||||||
Common stock shares issued | 200,000,000 | ||||||
Common shares | 16,124,764 | ||||||
Common stock par value | $ 0.001 | ||||||
Preferred stock shares authorized | 5,000,000 | ||||||
Conversion of convertible debentures | $ 16,464,066 | ||||||
Authorized common stock increased | 200,000,000 | ||||||
Common stock shares authorized | 205,000,000 | ||||||
Convertible Preferred Stock Series C [Member] | |||||||
Common Stock Shares issued | 1,785,715 | 1,785,715 | 1,785,715 | 1,785,715 | |||
Price of warrants | $ 0.25 | $ 0.25 | |||||
Preferred stock shares authorized | 1,785,715 | 1,785,714 | |||||
Preferred stock purchase | $ 1,250,000 | ||||||
Preferred stock yield | 8.00% | ||||||
Ownership percentage | 4.99% | ||||||
Conversion of stock | 8,108,356 | ||||||
Warrant expiry | Aug. 4, 2023 | ||||||
Series F Preferred Stock [Member] | |||||||
Common shares | 100,000 | ||||||
Description of explosion date of shares | issued and outstanding until the date which is 731 days after the issuance of Series F Preferred Stock (“Explosion Date”), unless a Trigger Event occurs, in which case the Explosion Date shall be extended by 183 days. | ||||||
Convertible Preferred Stock D [Member] | |||||||
Preferred stock purchase | $ 750,000 | $ 750,000 | |||||
Preferred stock yield | 8.00% | 8.00% | |||||
Ownership percentage | 4.99% | 4.99% | |||||
Conversion price | $ 0.25 | $ 0.25 | $ 0.70 | ||||
Annual yield | 8.00% | 8.00% | |||||
Common Preferred Stock [Member] | |||||||
Proceeds from issuance of common stock | $ 2,344 | ||||||
Exercise of stock option | 1,875 |
STOCK INCENTIVE PLANS (Details)
STOCK INCENTIVE PLANS (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | |
Outstanding at begin of period | $ 0.998 | $ 1.161 | $ 2.025 |
Weighted Average Exercise Price Granted | 2.090 | 1.766 | 1.142 |
Weighted Average Exercise Price Exercised | (0.956) | (1.359) | (0.250) |
Weighted Average Exercise Price Forfeitures | 0 | (3.300) | (2.593) |
Outstanding at end of period | $ 0.999 | $ 0.998 | $ 1.161 |
Aggregate Intrinsic Value | |||
Aggregate Outstanding at beginning of period | $ 23,964,509 | $ 5,580,550 | $ 9,180,369 |
Granted | 6,499,900 | 18,807,990 | 3,522,400 |
Exercised | (2,344) | (28,031) | (18,298) |
Forfeitures | 0 | (396,000) | (7,103,921) |
Aggregate Outstanding at end of period | $ 30,462,065 | $ 23,964,509 | $ 5,580,550 |
Share Outstanding at begin of period | 22,564,255 | ||
Shares Granted | 0 | ||
Exercised | (801,486) | ||
Shares Forfeitures | 0 | ||
Share Outstanding at end of period | 21,654,013 | 22,564,255 | |
Stock Option | |||
Aggregate Intrinsic Value | |||
Share Outstanding at begin of period | 4,805,000 | 4,532,668 | |
Shares Granted | 3,110,000 | 10,650,745 | 3,085,000 |
Exercised | (1,875) | (20,625) | (73,191) |
Shares Forfeitures | 0 | (120,000) | (2,739,477) |
Share Outstanding at end of period | 18,423,245 | 4,805,000 | 4,532,668 |
STOCK INCENTIVE PLANS (Details
STOCK INCENTIVE PLANS (Details 1) - $ / shares | 3 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2021 | Oct. 15, 2021 | |
Number of outstanding stock options | 18,423,245 | 32,629,376 | |
Employee Stock Options One [Member] | |||
Number of outstanding stock options | 18,423,245 | ||
Weighted average remaining life (years) | 3 years 11 months 23 days | ||
Weighted average exercise price outstanding | $ 1.653 | ||
Weighted average exercise price exerciseable | $ 1.234 | ||
Number exercisable | 1,935,417 | ||
Stock Options 1 | |||
Range of exercise prices | $ 0.25 | ||
Number of outstanding stock options | 230,000 | ||
Weighted average remaining life (years) | 1 year 5 months 12 days | ||
Weighted average exercise price outstanding | $ 0.250 | ||
Weighted average exercise price exerciseable | $ 0.250 | ||
Number exercisable | 172,500 | ||
Stock Options 2 | |||
Number of outstanding stock options | 3,072,500 | ||
Weighted average remaining life (years) | 2 years 10 months 20 days | ||
Weighted average exercise price outstanding | $ 1.108 | ||
Weighted average exercise price exerciseable | $ 1.181 | ||
Number exercisable | 497,083 | ||
Stock Option 2 | Minimum | |||
Range of exercise prices | $ 1.10 | ||
Stock Option 2 | Maximum | |||
Range of exercise prices | $ 1.25 | ||
Stock Option 4 | |||
Number of outstanding stock options | 5,640,000 | ||
Weighted average remaining life (years) | 4 years 8 months 15 days | ||
Weighted average exercise price outstanding | $ 0.957 | ||
Weighted average exercise price exerciseable | $ 1.843 | ||
Number exercisable | 188,438 | ||
Stock Option 4 | Minimum | |||
Range of exercise prices | $ 1.79 | ||
Stock Option 4 | Maximum | |||
Range of exercise prices | $ 3.67 | ||
Stock Option 3 | |||
Number of outstanding stock options | 9,480,745 | ||
Weighted average remaining life (years) | 3 years 6 months 29 days | ||
Weighted average exercise price outstanding | $ 1.499 | ||
Weighted average exercise price exerciseable | $ 1.308 | ||
Number exercisable | 1,077,396 | ||
Stock Option 3 | Minimum | |||
Range of exercise prices | $ 1.28 | ||
Stock Option 3 | Maximum | |||
Range of exercise prices | $ 1.53 |
STOCK INCENTIVE PLANS (Detail_2
STOCK INCENTIVE PLANS (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | ||||
Dec. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 10, 2021 | Oct. 15, 2021 | |
Compensation expense | $ 204,170 | $ 119,483 | ||||
Unrecognized compensation costs | $ 5,717,669 | |||||
Period for recognition | 3 years 11 months 23 days | |||||
Options to purchase common stock | 18,423,245 | 32,629,376 | ||||
Stock options granted | 16,464,066 | 7,424,566 | ||||
Intrinsic value | $ 15,800,709 | |||||
Warrant issued to common stock | 21,654,013 | |||||
Unearned stock option grants | 11,775,745 | |||||
Particle, Inc. | ||||||
Compensation expense | $ 197,553 | $ 833,771 | ||||
2011 Stock Incentive Plan | ||||||
Options to purchase common stock | 18,423,245 | |||||
Average exercise price | $ 1.653 | |||||
Unearned stock option grants | 11,775,745 | |||||
2021 Equity Incentive Plan | ||||||
Options to purchase common stock | 20,000,000 | |||||
2011 And 2021 Stock Incentive Plan [Member] | ||||||
Registered shares issued | 34,650,120 | |||||
Ronald P. Erickson [Member] | ||||||
Period for recognition | 5 years | |||||
Warrant issued to common stock | 1,000,000 | |||||
Exercise price | $ 2.09 | |||||
Phillip A. Bosua [Member] | ||||||
Period for recognition | 5 years | |||||
Warrant issued to common stock | 1,300,000 | |||||
Exercise price | $ 2.09 | |||||
Stock Option | Seven Employees And Consultants [Member] | ||||||
Period for recognition | 5 years | |||||
Average exercise price | $ 2.09 | |||||
Stock options granted | 810,000 | |||||
Stock option grants, total | 18,423,245 | |||||
Intrinsic value | $ 8,253,950 | |||||
Stock Option | Two Consultants | ||||||
Average exercise price | $ 2,344 | |||||
Stock options granted | 1,875 |
OTHER SIGNIFICANT TRANSACTION_2
OTHER SIGNIFICANT TRANSACTIONS AND TRANSACTIONS WITH RELATED PARTIES (Details narrative) - USD ($) | 3 Months Ended | ||
Dec. 31, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | |
Special bonus compensation | $ 1,560,000 | ||
Account receivable-related parties | 3,124,581 | $ 0 | |
Sales and use tax | 326,000 | ||
Selling and transactional costs | 1,300,000 | ||
Amount paid to consultant | $ 1,075,000 | ||
Warrant issued to common stock | 21,654,013 | ||
Period for recognition | 3 years 11 months 23 days | ||
Ronald P. Erickson [Member] | |||
Warrant issued to common stock | 1,000,000 | ||
Exercise price | $ 2.09 | ||
Period for recognition | 5 years | ||
Accrued Compensation | 401,864 | 421,599 | |
Annual Salary | $ 45,000 | ||
Phillip A. Bosua [Member] | |||
Warrant issued to common stock | 1,300,000 | ||
Exercise price | $ 2.09 | ||
Period for recognition | 5 years | ||
Clayton Struve Warrant [Member] | |||
Accrued Interest | $ 80,952 | $ 79,062 | $ 79,062 |
Convertible promissory notes | $ 1,071,000 |
COMMITMENTS CONTINGENCIES AND_2
COMMITMENTS CONTINGENCIES AND LEGAL PROCEEDINGS (Details narrative) - USD ($) | Feb. 01, 2019 | Apr. 13, 2017 | Oct. 31, 2021 | Oct. 11, 2021 |
OTHER SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES | ||||
Leases, net monthly payment | $ 8,697 | $ 3,334 | ||
Lease description | The lease expires on June 30, 2024 | lease expires on May 31, 2022 | the Company extended the lease from June 1, 2022 to May 31, 2023 at $2,986 per month. | the Company entered into First Amendment of Lease and added 1,030 square feet for year for $1,000 for $5,000 per month. |
SEGMENT REPORTING (Details)
SEGMENT REPORTING (Details) - USD ($) | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Revenue | $ 4,351,000 | $ 0 |
Segment Operating Profit (Loss) | (869,000) | (3,565,000) |
Segment assets | 14,885,000 | 3,224,000 |
Development of the Bio-RFID and ChromaID Technologies | ||
Revenue | 0 | 0 |
Segment Operating Profit (Loss) | (2,087,000) | (3,190,000) |
Segment assets | 11,755,000 | 3,158,000 |
Particle, Inc. Technology | ||
Revenue | 0 | 0 |
Segment Operating Profit (Loss) | (15,000) | (375,000) |
Segment assets | 5,000 | $ 66,000 |
Digital asset sales [Member] | ||
Revenue | 4,351,000 | |
Segment Operating Profit (Loss) | 1,233,000 | |
Segment assets | $ 3,125,000 |
SEGMENT REPORTING (Details Narr
SEGMENT REPORTING (Details Narrative) - USD ($) | 3 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
SEGMENT REPORTING | ||
Non-cash expenses | $ 4,428,718 | $ 3,648,181 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - Three Directors [Member] - $ / shares | Jan. 15, 2022 | Jan. 05, 2022 |
Warrants expired, Description | warrants expire on January 5, 2027 | |
Number of warrants issued | 30,000 | 20,000 |
Exercise price | $ 1.70 | $ 1.70 |