Cover
Cover - shares | 9 Months Ended | |
Jun. 30, 2021 | Aug. 21, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jun. 30, 2021 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2021 | |
Current Fiscal Year End Date | --09-30 | |
Entity File Number | 000-56037 | |
Entity Registrant Name | Carrier EQ, LLC | |
Entity Central Index Key | 0001766352 | |
Entity Tax Identification Number | 37-1981503 | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Address Line One | 186 Lincoln Street | |
Entity Address, Address Line Two | Third Floor | |
Entity Address, City or Town | Boston | |
Entity Address, State or Province | MA | |
Entity Address, Postal Zip Code | 02111 | |
City Area Code | (617) | |
Local Phone Number | 841-7207 | |
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 | 0 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Jun. 30, 2021 | Sep. 30, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 378,411 | $ 1,658,028 |
Accounts receivable | 1,118 | |
Prepaid expenses and other current assets | 771,520 | 1,083,527 |
Current assets of discontinued operations | 2,788,888 | |
Total current assets | 1,151,049 | 5,530,443 |
Non-current assets: | ||
Intangibles, net | 3,355,461 | 4,292,046 |
Security deposits | 280,616 | 320,108 |
Lease right of use assets | 1,636,515 | 1,979,658 |
Investment in related affiliate | 252,000 | |
Due from related party | 1,400,000 | |
Due from affiliates | (4,589,610) | |
Non-current assets of discontinued operations | 4,775,401 | |
Total non-current assets | 5,524,592 | 8,177,603 |
Total assets | 6,675,641 | 13,708,046 |
Current liabilities: | ||
Accounts payable | 151,237 | 301,003 |
Accrued liabilities | 555,891 | 1,149,514 |
AirToken refund liability | 115,044 | 163,561 |
Lease liability, current portion | 212,450 | 393,468 |
Due to related party | 5,514,493 | |
Current liabilities of discontinued operations | 4,741,902 | |
Total current liabilities | 6,549,115 | 6,749,448 |
Long-term liabilities: | ||
Deferred gain on issuance of AirTokens for Services | 396,790 | |
Lease liability, net of current portion | 1,601,564 | 1,758,196 |
Deferred revenue - AirToken Project | 12,529,824 | |
Long-term liabilities of discontinued operations | 11,602,345 | |
Total liabilities | 8,150,679 | 33,036,603 |
Carrier EQ, LLC member's deficit: | ||
Member's deficit; 1,277,635 limited liability company units outstanding as of June 30, 2021 and September 30, 2020 | (1,475,038) | (20,899,904) |
Accumulated other comprehensive income of discontinued operations | 1,572,382 | |
Total member's deficit attributable to Carrier EQ, LLC member | (1,475,038) | (19,327,522) |
Non-controlling interest in subsidiary | (1,035) | |
Total member's deficit | (1,475,038) | (19,328,557) |
Total liabilities and member's deficit | $ 6,675,641 | $ 13,708,046 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - shares | Jun. 30, 2021 | Sep. 30, 2020 |
Statement of Financial Position [Abstract] | ||
Units outstanding | 1,277,635 | 1,277,635 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Income Statement [Abstract] | ||||
Revenue | ||||
Operating expenses: | ||||
Cost of revenue | ||||
Selling, general and administrative | 2,046,330 | 5,105,903 | 7,714,303 | 12,283,660 |
Total operating expenses | 2,046,330 | 5,105,903 | 7,714,303 | 12,283,660 |
Loss from operations | (2,046,330) | (5,105,903) | (7,714,303) | (12,283,660) |
Other (expense) income: | ||||
Realized loss on sale of digital assets | (1,392) | |||
Foreign currency transaction loss | (507,761) | (418,604) | ||
Other miscellaneous income | 12,978,884 | 12,978,884 | ||
Interest income (expense), net | (17,252) | 82,828 | 92,251 | 2,896 |
Other (expense) income, net | 12,453,871 | 82,828 | 12,652,531 | 1,504 |
Income (loss) from continuing operations before income taxes | 10,407,541 | (5,023,075) | 4,938,228 | (12,282,156) |
Income tax benefit | 47,620 | 178,662 | 129,661 | |
Net income (loss) from continuing operations | 10,407,541 | (4,975,455) | 5,116,890 | (12,152,495) |
Net loss from discontinued operations | (4,264,548) | (1,147,124) | (10,851,961) | (4,614,960) |
Net loss (income) attributable to non-controlling interest | (1,693) | (44) | (1,035) | (461) |
Net income (loss) attributable to Carrier EQ, LLC. | 6,141,300 | (6,122,623) | (5,736,106) | (16,766,994) |
Other comprehensive income | ||||
Foreign currency translation adjustment - discontinued operations | (527,484) | 120,645 | (875,085) | 1,118,914 |
Total comprehensive income (loss) | $ 5,613,816 | $ (6,001,978) | $ (6,611,191) | $ (15,648,080) |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENT OF MEMBER'S DEFICIT AND STOCKHOLDERS' DEFICIT (Unaudited) - USD ($) | Preferred Stock Series One [Member] | Preferred Stock Series Onea [Member] | Common Stock [Member] | Treasury Stock [Member] | Additional Paid-in Capital [Member] | AOCI Attributable to Parent [Member] | Noncontrolling Interest [Member] | Retained Earnings [Member] | Carrier E Q L L C Accumulated Other Comprehensive Income [Member] | Carrier E Q L L C Membership Interests [Member] | Carrier E Q L L C Members Deficit [Member] | Carrier E Q L L C Noncontrolling Interest [Member] | Total |
Beginning balance, value at Sep. 30, 2019 | $ 27 | $ 11 | $ 78 | $ (240,005) | $ 2,014,658 | $ 110,363 | $ (252) | $ (21,025,864) | $ (19,140,984) | ||||
Beginning Balance SHARES at Sep. 30, 2019 | 2,652,072 | 1,046,147 | 6,813,928 | 914,893 | |||||||||
Noncontrolling interest | (248) | (248) | |||||||||||
Net loss | (5,191,690) | (5,191,690) | |||||||||||
Foreign currency translation | (101,576) | (101,576) | |||||||||||
Ending balance, value at Dec. 31, 2019 | $ 27 | $ 11 | $ 79 | $ (240,005) | 2,091,168 | 8,787 | (500) | (26,217,554) | (24,357,987) | ||||
Ending Balance SHARES at Dec. 31, 2019 | 2,652,072 | 1,046,147 | 6,936,438 | 914,893 | |||||||||
Stock based compensation | 42,588 | 42,588 | |||||||||||
Options exercised | $ 1 | 33,922 | 33,923 | ||||||||||
Options exercised shares | 122,510 | ||||||||||||
Beginning balance, value at Sep. 30, 2019 | $ 27 | $ 11 | $ 78 | $ (240,005) | 2,014,658 | 110,363 | (252) | (21,025,864) | (19,140,984) | ||||
Beginning Balance SHARES at Sep. 30, 2019 | 2,652,072 | 1,046,147 | 6,813,928 | 914,893 | |||||||||
Conversion of Preferred One and Preferred One A shares to common stock | 38 | ||||||||||||
Retirement of treasury stock | 240,005 | ||||||||||||
Issuance of common stock to Option Stockholders | 80 | ||||||||||||
Payment to Option Holders due to cancellation of stock options | 3,331,255 | ||||||||||||
Purchase of membership units - Carrier EQ, LLC | (263) | ||||||||||||
Ending balance, value at Jun. 30, 2020 | 1,229,277 | 1,277,635 | (20,250,668) | (713) | (19,022,124) | ||||||||
Ending Balance SHARES at Jun. 30, 2020 | |||||||||||||
Beginning balance, value at Dec. 31, 2019 | $ 27 | $ 11 | $ 79 | $ (240,005) | 2,091,168 | 8,787 | (500) | (26,217,554) | (24,357,987) | ||||
Beginning Balance SHARES at Dec. 31, 2019 | 2,652,072 | 1,046,147 | 6,936,438 | 914,893 | |||||||||
Noncontrolling interest | (257) | (257) | |||||||||||
Net loss | (5,452,681) | (5,452,681) | |||||||||||
Foreign currency translation | 1,099,845 | 1,099,845 | |||||||||||
Ending balance, value at Mar. 31, 2020 | $ 27 | $ 11 | $ 87 | $ (240,005) | 2,413,632 | 1,108,632 | (757) | (31,670,235) | (28,388,608) | ||||
Ending Balance SHARES at Mar. 31, 2020 | 2,652,072 | 1,046,147 | 7,753,069 | 914,893 | |||||||||
Stock based compensation | 168,015 | 168,015 | |||||||||||
Options exercised | $ 8 | 154,449 | 154,457 | ||||||||||
Options exercised shares | 816,631 | ||||||||||||
Convertible notes converted into common stock | $ 133 | 9,999,867 | 10,000,000 | ||||||||||
Convertible notes converted into common stock shares | 13,339,510 | ||||||||||||
Conversion of Preferred One and Preferred One A shares to common stock | $ (27) | $ (11) | $ 38 | ||||||||||
Conversion of Preferred One and Preferred One A shares to common stock shares | (2,652,072) | (1,046,147) | 3,698,219 | ||||||||||
Cancellation of common stock previously outstanding | $ (80) | 80 | |||||||||||
Cancellation of common stock previously outstanding shares | (8,003,706) | ||||||||||||
Simple Agreements for Future Equity converted into common stock | $ 5 | 239,894 | 239,899 | ||||||||||
Simple Agreements for Future Equity converted into common stock shares | 474,996 | ||||||||||||
Stock compensation related to accelerated vesting of options | 114,979 | 114,979 | |||||||||||
Capital contribution - Via Varejo | 1,921,004 | 1,921,004 | |||||||||||
Noncontrolling interest | 44 | 44 | |||||||||||
Retirement of treasury stock | $ 240,005 | (240,005) | |||||||||||
Retirement of treasury stock shares | (914,893) | ||||||||||||
Net loss | (6,122,623) | (6,122,623) | |||||||||||
Foreign currency translation | 120,645 | 120,645 | |||||||||||
Issuance of common stock to Option Stockholders | $ 80 | (80) | |||||||||||
Issuance of common stock to Option Stockholders shares | 8,003,706 | ||||||||||||
Capital contribution from Via Varejo for payment to Option Holders due to cancellation of stock options | 3,331,255 | 3,331,255 | |||||||||||
Payment to Option Holders due to cancellation of stock options | (238,719) | (238,719) | |||||||||||
Purchase of membership units - Carrier EQ, LLC | $ (263) | (12,289,648) | (1,108,632) | 713 | 31,670,235 | 1,108,632 | 1,277,635 | (19,380,324) | (713) | ||||
Purchase of membership units - Carrier EQ, LLC shares | (25,265,794) | ||||||||||||
Ending balance, value at Jun. 30, 2020 | 1,229,277 | 1,277,635 | (20,250,668) | (713) | (19,022,124) | ||||||||
Ending Balance SHARES at Jun. 30, 2020 | |||||||||||||
Beginning balance, value at Sep. 30, 2020 | 1,572,382 | 1,277,635 | (20,899,904) | (1,035) | (19,328,557) | ||||||||
Beginning Balance SHARES at Sep. 30, 2020 | |||||||||||||
Noncontrolling interest | (443) | (443) | |||||||||||
Net loss | (6,899,387) | (6,899,387) | |||||||||||
Foreign currency translation | (561,512) | (561,512) | |||||||||||
Ending balance, value at Dec. 31, 2020 | 1,010,870 | 1,277,635 | (27,799,291) | (1,478) | (26,789,899) | ||||||||
Ending Balance SHARES at Dec. 31, 2020 | |||||||||||||
Beginning balance, value at Sep. 30, 2020 | 1,572,382 | 1,277,635 | (20,899,904) | (1,035) | (19,328,557) | ||||||||
Beginning Balance SHARES at Sep. 30, 2020 | |||||||||||||
Conversion of Preferred One and Preferred One A shares to common stock | |||||||||||||
Retirement of treasury stock | |||||||||||||
Issuance of common stock to Option Stockholders | |||||||||||||
Payment to Option Holders due to cancellation of stock options | |||||||||||||
Purchase of membership units - Carrier EQ, LLC | |||||||||||||
Ending balance, value at Jun. 30, 2021 | 1,277,635 | (1,475,038) | (1,475,038) | ||||||||||
Ending Balance SHARES at Jun. 30, 2021 | |||||||||||||
Beginning balance, value at Dec. 31, 2020 | 1,010,870 | 1,277,635 | (27,799,291) | (1,478) | (26,789,899) | ||||||||
Beginning Balance SHARES at Dec. 31, 2020 | |||||||||||||
Noncontrolling interest | (215) | (215) | |||||||||||
Net loss | (4,978,019) | (4,978,019) | |||||||||||
Foreign currency translation | 213,911 | 213,911 | |||||||||||
Additional paid-in-capital | 2,806,672 | 2,806,672 | |||||||||||
Ending balance, value at Mar. 31, 2021 | 1,224,781 | 1,277,635 | (29,970,638) | (1,693) | (28,747,550) | ||||||||
Ending Balance SHARES at Mar. 31, 2021 | |||||||||||||
Noncontrolling interest | 1,693 | 1,693 | |||||||||||
Net loss | 6,141,300 | 6,141,300 | |||||||||||
Foreign currency translation | (527,484) | (527,484) | |||||||||||
Additional paid-in-capital | 1,150,000 | 1,150,000 | |||||||||||
Gain from Deconsolidation of subsidiary | (697,297) | 21,204,301 | 20,507,004 | ||||||||||
Ending balance, value at Jun. 30, 2021 | $ 1,277,635 | $ (1,475,038) | $ (1,475,038) | ||||||||||
Ending Balance SHARES at Jun. 30, 2021 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($) | 9 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income (loss) from continuing operations | $ 5,116,890 | $ (12,152,495) |
Net (loss) from discontinued operations | (10,851,961) | (4,614,960) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||
Amortization and Depreciation | 1,213,738 | 569,951 |
Impairment write-off | 736,594 | |
Stock based compensation | 325,582 | |
Additional stock based compensation due to cancellation of stock options | 3,092,536 | |
Reversal of accrued interest related to conversion of convertible notes | (104,856) | |
Realized loss on sale of digital assets | 1,392 | |
Gain on issuance of AirTokens for services | (396,790) | |
Gain from reversal of deferred revenue due to discontinuance of Airtoken project | (12,529,824) | 11,962,899 |
Inflation adjustment to deferred revenue Master card Program | 1,560,768 | |
(Increase) decrease in assets, net of effect of deconsolidation | ||
Transfer out of cash and restricted cash as part of deconsolidation | (6,320,023) | |
Accounts receivable | (422,386) | (93,164) |
Prepaid expenses and other current and long-term assets | 307,632 | 1,058,235 |
Investment in other companies | ||
Due from related party | 1,400,000 | (8,090) |
Other assets | 130,664 | |
Increase ( decrease) in liabilities, net of effect of deconsolidation | ||
Accounts payable | (149,766) | (676,693) |
Operating lease right of use assets and liabilities | 5,493 | 120,717 |
Accrued liabilities and other current liabilities | 5,084,085 | 2,200,572 |
Other deferred revenue | (18,858) | (188,695) |
AirToken refund liability | (48,517) | (3,227,499) |
Due to related party | 11,187,398 | 48,122 |
Net cash used in operating activities | (3,994,863) | (1,686,446) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Acquisition of property and equipment | (155,016) | (2,249) |
Acquisition of intangible assets | (1,825,960) | (2,682,518) |
Net cash used in investing activities | (1,980,976) | (2,684,767) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from exercise of options | 188,380 | |
Capital contributions - Via Varejo | 3,956,672 | 1,921,004 |
Proceeds from Paycheck Protection Program SBA loan | 537,732 | |
Payment of principal from Paycheck Protection Program SBA loan | (537,732) | |
Proceeds from Via Varejo for payment to Option Holders due to cancellation of stock options | 3,331,255 | |
Payment to Option Holders due to cancellation of stock options | (3,331,255) | |
Net cash provided by financing activities | 3,956,672 | 2,109,384 |
Effect of exchange rate changes on cash and cash equivalents | (875,086) | (443,510) |
Net decrease in cash and cash equivalents | (2,894,253) | (2,705,339) |
Cash and cash equivalents, beginning of period | 3,272,664 | 5,451,348 |
Cash and cash equivalents, end of period | 378,411 | 2,746,009 |
Supplemental disclosure of non-cash transactions: | ||
Investment in related affiliate no longer eliminated in consolidation | 252,000 | |
Due to related party resulting from the deconsolidation of subsidiary | 5,431,853 | |
Convertible debt instrument settled through issuance of common stock | (10,000,000) | |
Simple agreement for future equity settled through issuance of common stock | (239,899) | |
Cancellation of common stock | (80) | |
Conversion to common stock - Series One | (27) | |
Conversion to common stock - Series One A | (11) | |
Par value of common stock from issuance to Lake Niassa | ||
Conversion of Preferred One and Preferred One A shares to common stock | 38 | |
Operating lease right of use assets and liabilities | 2,465,218 | |
Retirement of treasury stock | 240,005 | |
Issuance of common stock to Option Stockholders | 80 | |
Purchase of membership units - Carrier EQ, LLC | $ (263) |
Organization and Nature of Oper
Organization and Nature of Operations | 9 Months Ended |
Jun. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Nature of Operations | Note 1 - Organization and Nature of Operations Carrier EQ, LLC, doing business as Airfox (the “Company”), was incorporated in Delaware on May 21, 2020 with a principal place of business in Boston, Massachusetts. Airfox was previously formed as a corporation, CarrierEQ, Inc. and was incorporated in Delaware on January 19, 2016. Airfox had at that time a 100 On May 21, 2020, Airfox filed a certificate of conversion (the “Certificate of Conversion”) to convert the Corporation to a Limited Liability Company and to change the Airfox’s name from “CarrierEQ, Inc.” to “Carrier EQ, LLC” The conversion and name change became effective on May 21, 2020. Airfox (the Company) filed a certificate of formation of Carrier EQ, LLC (the “Certificate of Formation”) on May 21, 2020. On May 21, 2020, the Company was fully acquired by Via Varejo S.A, a corporation organized under the laws of the Federative Republic of Brazil (“Via Varejo”) through Lake Niassa Empreendimentos e Participações Ltda. ("Lake Niassa"), a limited liability company duly organized under the laws of the Federative Republic of Brazil and wholly-owned by Via Varejo (the "Transaction"). On June 14, 2021, the Company, Lake Niassa and banQi Instituição de Pagamento Ltda (formerly known as AirFox Servicos E Intermediacoes Ltda (“banQi”), a limited liability company organized under the laws of the Federative Republic of Brazil entered into the 7th Amendment and Consolidation of the Articles of Association of banQi (the “7th Amendment”). Pursuant to the terms of the 7th Amendment, the banQi and Lake Niassa (i) increased banQi 's share capital from BRL 1,000,000.00 (one million reais) to BRL 69,870,000.00 (sixty-nine million, eight hundred and seventy thousand reais), which represents an increase of BRL 68,870,000.00 (sixty-eight million, eight hundred and seventy thousand reais); and (ii) issued 68,870,000 (sixty-eight million, eight hundred and seventy thousand) new quotas, with par value of BRL 1.00 (one real) each, fully subscribed and paid up, in Brazilian currency, through the capitalization of Advances for Future Capital Increase ("AFAC") made by Lake Niassa. Prior to entering into the 7th Amendment, the Company had a 99.99 th As a result of this change in control, on June 14, 2021, the Company determined that it did not have a controlling interest over banQi, and banQi was deconsolidated from the Company's condensed consolidated financial statements and presented as discontinued operations in the Company’s condensed consolidated financial information presented within this quarterly report. The presentation of the operations and results of banQi is further explained in Note 3. Beginning in February 2017, the Company began exploring consumer applications of its legacy prepaid mobile applications. The Company initiated a business plan to introduce a mobile application that would allow users to earn digital tokens, exchange them for free or discounted mobile data and, ultimately, other goods and services in South America as part of a new international business and ecosystem (the “AirToken Project”). The AirToken Project included the issuance of digital tokens (“AirToken(s)”). The AirToken is an ERC-20 token issued on the Ethereum blockchain. The Company obtained Ether and Bitcoin (collectively referred therein as the “Digital Assets”), in August 2017 through early October 2017 from those interested in obtaining AirTokens. The Company raised approximately $ 15.4 On June 30, 2021, Lake Niassa the sole member of Carrier EQ, LLC determined to discontinue the development of AirTokens and end the AirToken project related to the Company’s business. At this time, the Company does not have the ability to further develop AirTokens as part of its business plan in the absence of new laws or a definitive regulatory regime (in both the U.S. and Brazil) regarding the use and transferability of AirTokens (and other similar tokens issued on the Ethereum block chain that are classified as securities). Current laws and regulatory regimes do not provide for the Company to utilize the AirTokens as envisioned by the Company since AirTokens are no longer freely transferable and the previous market for AirTokens no longer exists. AirTokens were never fully developed and never gained full functionality. As previously stated, AirTokens are not currently freely transferable, and no market exists for AirTokens. Since the Company is no longer continuing with the AirToken project, the Company should not recognize any revenue related to the research and development of the AirToken project, and the deferred revenue is no longer appropriate to be recorded on the balance sheet. The liability - AirToken Project, of approximately $ 12.5 Currently, the Company's main functions and activities comprise of supporting banQi’s operation in Brazil, including assisting banQi with the management of the digital wallet application and the financial services provided to those without bank accounts or credit cards. Primarily due to the cancellation of the AirToken project and since the main features of the Company’s software and technology platform have been developed and funded to be applied in the Brazilian market (as per the Services Agreement and the Call Option Agreement), the Company's main functions and activities relating to the development and management of a software technology platform consisting of a digital wallet application and an alternative credit scoring and lending application have substantially migrated to the banQi entity in Brazil. In connection with the above strategy, the Company is gradually transferring contracts with some suppliers to Brazil and reducing its activities in the US. |
Financial Condition and Managem
Financial Condition and Management’s Plans | 9 Months Ended |
Jun. 30, 2021 | |
Financial Condition And Managements Plans | |
Financial Condition and Management’s Plans | Note 2 - Financial Condition and Management’s Plans The Company has experienced recurring losses and negative cash flows from operations. At June 30, 2021, the Company had cash and cash equivalents of $ 378.4 5.4 1.5 The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the ordinary course of business. The successful outcome of future activities cannot be determined at this time and there is no assurance that, if achieved, the Company will have sufficient funds to execute its intended business plan or generate positive operating results. The condensed financial statements do not include any adjustments related to this uncertainty and as to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result should the Company be unable to continue as a going concern. In the event the Company is unable to raise additional debt or equity financing, it may: 1. Have to cease operations, in which case the Company may file a petition for bankruptcy in U.S. Bankruptcy Court under Chapter 7, whereby a trustee will be appointed to sell off the Company’s assets, and the money will be used to pay off the Company’s debts in order of their priority. Or 2. File a petition for bankruptcy in U.S. Bankruptcy Court under Chapter 11 to restructure the Company’s debt. COVID-19 Risks, Impacts and Uncertainties On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because of a new strain of coronavirus originating in Wuhan, China (the “COVID-19 Outbreak”) and the risks to the international community as the virus spreads globally beyond its point of origin. In March 2020, the WHO classified the COVID-19 Outbreak as a pandemic, based on the rapid increase in exposure globally. The Commonwealth’s “Reopening Massachusetts” process is underway. The Company is subject to the risks arising from the COVID-19 Outbreak’s social and economic impacts. The Company’s management believes that the social and economic impacts, which include but are not limited to the following, could have a significant impact on future financial condition, liquidity, and results of operations: (i) the duration and scope of the pandemic; (ii) governmental, business and individual actions that have been and continue to be taken in response to the pandemic, including travel restrictions, quarantines, social distancing, work-from-home and shelter-in-place orders and shut-downs; (iii) the impact on U.S. and global economies and the timing and rate of economic recovery; (iv) potential adverse effects on the financial markets and access to capital; (v) potential goodwill or other impairment charges; (vi) increased cybersecurity risks as a result of pervasive remote working conditions; and (vii) the Company’s ability to effectively carry out its operations due to any adverse impacts on the health and safety of the Company’s employees and their families. In response to the COVID-19 Outbreak, the Company’s employees have been required to work from home. The significant increase in remote working, particularly for an extended period of time, has been exacerbating certain risks to the Company’s business, including an increased risk of cybersecurity events and improper dissemination of personal or confidential information. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Jun. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Significant Accounting Policies | Note 3 - Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated interim financial statements (“interim statements”) of Airfox have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) as determined by Financial Accounting Standards Board (the “FASB”) within its Accounting Standards Codification (“ASC”) and under the rules and regulations of the United States Securities and Exchange Commission (“SEC”). Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments and disclosures necessary for a fair presentation of these interim statements have been included. The results reported in these interim statements are not necessarily indicative of the results that may be reported for the entire year. These interim statements should be read in conjunction with the Company’s consolidated financial statements as of and for the year ended September 30, 2020. The Company has elected not to apply pushdown accounting to the accompanying standalone condensed consolidated financial statements in accordance with ASC 805 Business Combinations The Company is an emerging growth company as the term is used in The Jumpstart Our Business Startups Act, enacted on April 5, 2012 and has elected to comply with certain reduced public company reporting requirements, however, the Company may adopt accounting standards based on the effective dates for public entities. As of June 14, 2021, the operations of banQi were deconsolidated from the Company, as the Company no longer had a controlling interest in banQi. The Company accounted for the loss in controlling interest as discontinued operations in banQi in accordance with Accounting Standards Codification, ASC 205, Discontinued Operations and Accounting Standards Update, ASU, No. 2014-08, Reporting of Discontinued Operations and Disclosures of Disposals of Components of an Entity. ASC 205 requires that a component of an entity that has been disposed of or is classified as held for sale and has operations and cash flows that can be clearly distinguished from the rest of the entity be reported as assets held for sale and discontinued operations. In the period a component of an entity has been disposed of or classified as held for sale, the results of operations for the periods presented are reclassified into separate line items, net of tax, in the unaudited condensed consolidated statements of comprehensive loss. Assets and liabilities are also reclassified into separate line items on the related condensed consolidated balance sheets for the periods presented. The statements of cash flows for the periods presented are also reclassified to reflect the results of discontinued operations as separate line items. ASU 2014-08 requires that only a disposal of a component of an entity, or a group of components of an entity, that represents a strategic shift that has, or will have, a major effect on the reporting entity’s operations and financial results be reported in the financial statements as discontinued operations. ASU 2014-08 also provides guidance on the financial statement presentations and disclosures of discontinued operations. Due to the deconsolidation of banQi during the third quarter of fiscal 2021, in accordance with ASC 205, Discontinued Operations, the Company has classified the results of banQi as discontinued operations in our unaudited condensed consolidated statements of operations and cash flows for all periods presented. All assets and liabilities associated with banQi were therefore classified as assets and liabilities of discontinued operations in our condensed consolidated balance sheets for the periods presented. All amounts included in the notes to the unaudited condensed consolidated financial statements relate to continuing operations unless otherwise noted. For additional information, see Note 4, Discontinued Operations. Principles of Consolidation Prior to June 14, 2021 the Company had a controlling interest in banQi and, prior to April 6, 2020, had a 100 On June 14, 2021, the Company’s ownership of banQi was reduced from 99.99% to 1.43 The change in ownership represents a transfer of net assets between entities under common control, because all entities are owned by the same common parent entity, Lake Niassa, and thus the gain on deconsolidation of banQi was recorded against accumulated deficit The Company will also record a cost method investment in banQi for their respective investment in the entity, and any previously recorded non-controlling interest will be removed from the balance sheet. All intercompany transactions have been eliminated in consolidation. The Company is not involved with variable interest entities. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the balance sheet and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ significantly from those estimates. The most significant accounting estimates inherent in the preparation of the Company's financial statements includes, but not limited to, estimated lives of intangible assets, intangible asset impairment, revenue recognition and deferred tax valuation allowance. Foreign Currency The Company had operations in Brazil until June 14, 2021, where the local currency is used to prepare the financial statements which are translated into the Company’s reporting currency, U.S. dollars. The local currency is the functional currency for the operations outside the United States. Changes in the exchange rates between this currency and the Company’s reporting currency, are partially responsible for some of the periodic changes in the condensed consolidated financial statements prior to June 14, 2021. Assets and liabilities of the Company’s foreign operations until June 14, 2021 are translated into U.S. dollars at the spot rate in effect at the applicable reporting date. Revenues and expenses of the Company’s foreign operations are translated at the average exchange rate during the applicable period. The resulting unrealized cumulative translation adjustment is recorded as a component of accumulated other comprehensive income (loss) in stockholders’ equity. Realized and unrealized transaction gains and losses generated by transactions denominated in a currency different from the functional currency of the applicable entity are recorded in other income (loss) in the period in which they occur. Revenue Recognition The Company recognizes revenue under ASC 606, Revenue from Contracts with Customers ASC 606 prescribes a 5-step process to achieve its core principle: Step 1: Identify the contract with the customer Step 2: Identify the performance obligations in the contract Step 3: Determine the transaction price Step 4: Allocate the transaction price to the performance obligations in the contract Step 5: Recognize revenue when the Company satisfies a performance obligation AirToken Project Development Services (Non ASC 606 Revenue) The Company determined that its token issuances represented obligations to perform software development services and accounts for the proceeds received in the token issuances in accordance with ASC 730-20, Research and Development – Research and Development Arrangements The Company, beginning in August 2017 through early October 2017, obtained Ether and Bitcoin totaling approximately $ 15.3 0.1 Pursuant to the Settlement Agreement (as defined and described further in Note 13), the Company was obligated to refund amounts raised for the purpose of developing the AirToken Project if valid claims were submitted. On or before December 28, 2019, the Company paid all approved claims to approved claimants who returned their AirTokens to the Company (approximately 93.5% of the total dollar amount of all approved claim refunds). All amounts were refunded in cash and paid through the Company’s existing cash and cash equivalent reserves. The total claim amounts including interest, totaled $ 3.3 0.2 Effective October 1, 2019, the Company was not able to estimate a date to conclude the development of the AirToken Project due to regulatory matters that affect the continuity of the development process. Due to this reason, the AirToken Project was on hold and no revenue has been recognized from the AirToken Project. On June 30, 2021, Lake Niassa determined to discontinue the development of AirTokens and end the AirToken project related to the Company’s business. At this time, the Company does not have the ability to further develop AirTokens as part of its business plan in the absence of new laws or a definitive regulatory regime (in both the U.S. and Brazil) regarding the use and transferability of AirTokens (and other similar tokens issued on the Ethereum block chain that are classified as securities). Current laws and regulatory regimes do not provide for the Company to utilize the AirTokens as envisioned by the Company since AirTokens are no longer freely transferable and the previous market for AirTokens no longer exists. AirTokens were never fully developed and never gained full functionality. As previously stated, AirTokens are not currently freely transferable and no market exists for AirTokens. As a result of the discontinuation of the development of AirTokens, AirTokens will lose their functionality in full, and it is likely that no market for AirTokens will ever be re-created and that AirTokens will not again ever be freely transferable. Since the Company is no longer continuing with the AirToken project, the Company has not recognized any revenue related to the research and development of the AirToken project, and the deferred revenue is no longer appropriate to be recorded on the balance sheet. The liability, Deferred revenue - AirToken Project, of approximately $12.5 million 12,529,824 Mastercard Revenue and Sale Incentives (ASC 606 Revenue) On December 16, 2019, banQi, received R$ 65 16 Pursuant to the Program Agreement, banQi, as a licensee of MasterCard International, Inc. and a business partner of Mastercard Brasil, entered into the Incentive Program (as defined in the Program Agreement) in order to issue, expand and boost the prepaid card (“Airfox Card”) base of banQi, as well as the number of transactions and turnover (sales revenue) generated by MasterCard Cards. As a Mastercard prepaid card issuer, banQi is entitled to receive Sales Revenue Incentives pursuant to the Program Agreement. As a result, the Sales Revenue Incentives is used to amortize the Sales Revenue Incentive Prepayment received on December 11, 2019. Upon complete amortization of Incentive Prepayment, Mastercard makes quarterly payments of the Sales Revenue Incentive, calculated according to the value of transactions completed with the prepaid cards issued by the banQi. banQi have no minimum commitment of transaction volumes to be completed with the prepaid cards. The revenue from the Program Agreement was recognized until June 14, 2021, the date on which the Company no longer had a controlling interest over banQi, thus no additional revenue was recognized from that date through June 30, 2021. 343 10 3,085 6,802 In connection to the Program Agreement, the Company also entered into an agreement with Mastercard, an Interchange Manual (“Interchange Fee Agreement”) from Mastercard dated June 18, 2019, which details the fees paid by a merchant’s bank to banQi to compensate for the value and benefits that merchant receives when it accepts electronic payments. The fee is a specified percentage of the total dollar amount of a card transaction, and a fixed percentage based on the type of card transaction (i.e. merchant type, national vs. international, etc.), based on the schedule of fees outlined in the Interchange Fee Agreement (“Interchange Fee Revenue”). On a monthly basis, the Company earns revenue from the Interchange Fee received. The Company has identified one performance obligation that meets the series provision and recognizes revenue over time. Interchange Fee Revenue totaling $ 94 3,085 66 6,802 Via Varejo Services Agreement Revenue (ASC 606 Revenue) The Company entered into a Services Agreement (the “Services Agreement”) as of September 11, 2018 (“the Agreement Effective Date”) with Via Varejo (the “Client”). The Company was engaged to design and develop a mobile software module and application programming interface that provides the Client’s customers with access to certain mobile payment functionality, and that integrates banQi (“VV Wallet Services”). The Company provided certain services, including hosting, maintenance and operation of banQi, The VV Wallet Services were structured into four phases. The Phases are - Phase 1: Specifications and Customization; Phase 2: Features; Phase 3: License and Maintenance Services and Phase 4: Rollout. The development of the VV Wallet Services was considered a bundled performance obligation that included the development of the API and software as a service which is hosted on the Company’s servers. In addition to the software as a service performance obligation, the Company provided support services for the software as a service. The Client was considered to simultaneously receive and consume the benefits provided by the Company’s performance as the Company performed the services. Accordingly, the revenue from Service Charges was recognized over time based on the number of transactions made by Client customers with banQi. During Phase 1, there was a payment of $0.3 million (“Upfront Payment”) from the Client to be recognized as revenue commencing when the product was ready for its intended use and ratably over the remaining term of the Services Agreement through the duration of the Services Agreement. The total revenue recognized for the three months ended June 30, 2021 and 2020 totaled $ 159 12.1 202 24.9 Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents consist of cash on deposit with banks and money market instruments. Accounts Receivable and Allowance for Doubtful Accounts As of June 30, 2021, there was a minimal amount of accounts receivable as the Company no longer consolidates the operations of banQi. Concentrations of Credit Risk and Off-Balance Sheet Risk The Company is subject to concentration of credit risk with respect to their cash and cash equivalents, which the Company attempts to minimize by maintaining cash and cash equivalents with institutions of sound financial quality. At times, cash balances may exceed limits federally insured by the Federal Deposit Insurance Corporation. The Company had cash and cash equivalents, including amounts held in financial institutions in the USA that totaled $ 378 thousand. The Company believes it is not exposed to significant credit risk due to the financial strength of the depository institutions in which the funds are held. The Company has no financial instruments with off-balance sheet risk of loss. Long-Lived Assets, Including Definite Intangible Assets Long-lived assets and other indefinite-lived intangibles are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable through the estimated undiscounted future cash flows derived from such assets. The Company’s definite-lived intangible assets primarily consist of various domain names and websites. For long-lived assets used in operations, impairment losses are only recorded if the asset’s carrying amount is not recoverable through its undiscounted, probability-weighted future cash flows. The Company measures the impairment loss based on the difference between the carrying amount and the estimated fair value. When an impairment exists, the related assets are written down to fair value. Security Deposits Security deposits primarily include monies being held subject to a security agreement (“Security Agreement”) with Mastercard, Inc. executed on June 7, 2019. The Security Agreement is related to the Services Agreement to ensure a minimum amount of users for the cards. On April 22, 2020 Mastercard returned $ 1.2 0.3 Included in the security deposits balance as of June 30, 2021 are $ 281 Investment in related affiliate After the deconsolidation of banQi, the Company's remaining investment in banQi of $ 252 1.43 Due to Related Party Amounts due to banQi as of June 30, 2021 are $ 5.5 92 47 Software Development Costs The Company capitalizes costs related to software developed or obtained for internal use in accordance with the ASC 350-40, Internal-Use Software · ● Preliminary project stage: (a) conceptual formulation of alternatives; (b) evaluation of alternatives; (c) determination of existence of needed technology; and (d) final selection of alternatives. Internal and external costs incurred during the preliminary project stage ● Application development stage: (a) design of chosen path, including software configuration and software interfaces; (b) coding; (c) installation to hardware; and (d) testing, including parallel processing phase. Internal and external costs incurred to develop internal-use computer software during the application development stage are capitalized. ● Post-implementation-operation stage: (a) training; and (b) application maintenance. Internal and external costs incurred during the post-implementation-operation stage are expensed as incurred. Certain costs incurred are considered enhancements, modifications to existing internal-use software that result in additional functionality. Enhancements normally require new software specifications and may also require a change to all or part of the existing software specifications. When this additional functionality is determinable, the related costs are capitalized. Otherwise, costs are expensed as incurred. Capitalization of internal-use software costs ceases when a computer software project is substantially complete and ready for its intended use. The Company begins amortization when the product is available for general release or use. The Company has capitalized software costs relating to the Via Varejo Services Agreement and began amortization on January 1, 2020 as the product was ready for its intended use and has been amortized through the contract term until September 2023. The amortization expense related to the Via Varejo Services Agreement capitalized software for the three and nine months ended June 30, 2021 totaled $ 0.4 1.4 The Company capitalizes costs related to the development and maintenance of its website in accordance with ASC 350-50, Website Development Costs Included in the net intangibles balance as of June 30, 2021 are $ 3,295,256 has entered into discussions with Via Varejo and Lake Niassa to transfer these assets to banQi. The companies are still working out the final details, which should close prior to Airfox's September 30, 2021 year-end. Capitalizing Software Costs in Connection with Hosting Arrangements and Software as a Service Arrangements For the operation in Brazil at banQi, the Company developed certain software that are considered to be part of cloud computing arrangement (or hosting arrangement), whereby, a user or a customer of software does not take possession of the Company’s software; rather, the software is accessed on an as-needed basis over the Internet. Therefore, when the software is used to produce a product or in a process to provide a service to a customer, and the customer is not given the right to obtain or use the software, the related costs are accounted for in accordance with ASC 350-40. When a hosting arrangement includes multiple modules or components, capitalized costs are amortized on a module-by-module basis. When a module or component is substantially ready for its intended use, amortization begins, regardless of whether the overall hosting arrangement is being placed in service in planned stages. If the module’s functionality is entirely dependent on the completion of one or more other modules, then amortization does not begin until that group of interdependent modules is substantially ready for use. Impairment of Long-term Assets The Company evaluates the recoverability of tangible and intangible assets periodically by taking into account events or circumstances that may warrant revised estimates of useful lives or that indicate the asset may be impaired. Leases The Company categorizes leases at their inception as either operating or finance leases based on the criteria in ASC 842, Leases (“ASC 842”) Advertising Advertising costs are expensed as incurred and included in selling, general and administrative expenses and amounted to a reversal of $ 0.7 29 179 75 Income Taxes Income taxes are recorded in accordance with ASC 740, Income Taxes The Company accounts for uncertain tax positions in accordance with the provisions of ASC 740. When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that the benefit would more likely than not be realized assuming examination by the taxing authority. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances. The Company recognizes any interest and penalties accrued related to unrecognized tax benefits as income tax expense. Gain on issuance of AirTokens for services AirTokens issued to vendors for services in connection with raising monies for the purpose of developing the AirToken Project were accounted for in accordance with ASC 845-30-1, Nonmonetary Transactions, which requires that the AirTokens to be recognized at fair value and resulted in recognizing a deferred gain of approximately $ 1.7 0.02 On June 30, 2021, Lake Niassa determined to discontinue the development of AirTokens and end the AirToken project related to the Company’s business. At this time, the Company does not have the ability to further develop AirTokens as part of its business plan in the absence of new laws or a definitive regulatory regime (in both the U.S. and Brazil) regarding the use and transferability of AirTokens (and other similar tokens issued on the Ethereum block chain that are classified as securities). Current laws and regulatory regimes do not provide for the Company to utilize the AirTokens as envisioned by the Company since AirTokens are no longer freely transferable and the previous market for AirTokens no longer exists. AirTokens were never fully developed and never gained full functionality. As previously stated, AirTokens are not currently freely transferable, and no market exists for AirTokens. As a result of the Company discontinuing the development of AirTokens, AirTokens will lose their functionality in full, and it is likely that no market for AirTokens will ever be re-created and that AirTokens will not again ever be freely transferable. Since the Company is no longer continuing with the AirToken project, the Company should not recognize any revenue related to the research and development of the AirToken project, and the deferred revenue is no longer appropriate to be recorded on the balance sheet. The liability, Deferred revenue - AirToken Project, of approximately $13 million, as of June 30, 2021, was extinguished and charged to Other Income in the Condensed Consolidated Statements of Comprehensive Loss. Distinguishing Liabilities from Equity The Company relies on the guidance provided by ASC 480, Distinguishing Liabilities from Equity Once the Company determines that a financial instrument should not be classified as a liability, the Company determines whether the financial instrument should be presented between the liability section and the equity section of the balance sheet. The Company will determine temporary equity classification if the redemption of the financial instrument is outside the control of the Company (i.e., at the option of the holder). Otherwise, the Company accounts for the financial instrument as permanent equity. The Company records its financial instruments classified as liability, temporary equity or permanent equity at issuance at the fair value, or cash received. The Company records its financial instruments classified as liabilities at their fair value at each subsequent measurement date. The changes in fair value of these financial instruments are recorded as other expense/income. Hedging The Company does not use derivative instruments to hedge exposures to cash flows, market or foreign currency risks. The Company evaluates its financial instruments, including equity-linked financial instruments, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. Stock-based Compensation The Company accounts for stock-based compensation to employees and non-employees in conformity with the provisions of ASC 718, Compensation - Stock Based Compensation Common shares issued to third parties for services provided are valued based on the estimated fair value of the Company’s common shares. All stock-based compensation costs are recorded in selling, general and administrative expenses in the consolidated statements of operations. All stock-based compensation awards were cancelled pursuant to the Transactions which occurred on May 21, 2020. In August 2020, the Company established the Share Based Payment Program with Cash Settlement - Phantom Shares of Via Varejo S.A. (the "Plan"). Pursuant to the Plan, the Company's Board of Directors may grant cash-settled shares, referred to as "Phantom Shares," to the Company's employees as part of the employees' remuneration package. Each Phantom Share will represent the employee's right to receive the full amount corresponding to the average quotation of 3 (three) common shares of Via Varejo S.A. in the 20 (twenty) trading sessions at B3 - Brazil, Bolsa, Balcão immediately prior to vesting, as established in the Plan. The Phantom Shares vest over a service period of five years . As of June 14, 2021, there is no liability reported related to the Phantom Shares due the deconsolidation of banQi. No Phantom Shares have vested as of June 30, 2021. Fair Value Measurement The Company’s financial instruments include cash and cash equivalents, accounts receivable, accounts payable and short and long-term debt. The fair values of cash and cash equivalents, accounts receivable, and accounts payable approximate their stated amounts because of the short maturity of these financial instruments. The valuation hierarchy is composed of three levels. The classification within the valuation hierarchy is based on the lowest level of input that is significant to the fair value measurement. The levels within the valuation hierarchy under ASC 820 are described below: Level 1 — Assets and liabilities with unadjusted, quoted prices listed on active market exchanges. Inputs to the fair value measurement are observable inputs, such as quoted prices in active markets for identical assets or liabilities. Level 2 — Inputs to the fair value measurement are determined using prices for recently traded assets and liabilities with similar underlying terms, as well as direct or indirect observable inputs, such as interest rates and yield curves that are observable at commonly quoted intervals. Level 3 — Inputs to the fair value measurement are unobservable inputs, such as estimates, assumptions, and valuation techniques when little or no market data exists for the assets or liabilities. Adoption of Recent Accounting Pronouncements In February 2016, the FASB established Topic 842, Leases Land Easement Practical Expedient for Transition to Topic 842; Codification Improvements to Topic 842, Leases Targeted Improvements Narrow-Scope Improvements for Lessors The Company adopted ASU 2016-02 effective October 1, 2019 using the modified retrospective approach whereby the Company will continue to present prior period financial statements and disclosures under ASC 840. In addition, the Company elected the transition package of three practical expedients permitted within the standard, which eliminates the requirements to reassess prior conclusions about lease identification, lease classification and initial direct costs. Further, the Company adopted a short-term lease exception policy, permitting the Company to not apply the recognition requirements of this standard to short-term leases (i.e. leases with terms of 12 months or less) and an accounting policy to account for lease and non-lease components as a single component for certain classes of assets. Adoption of the new standard resulted in the recording of right-of-use assets and lease liabilities related to the Company’s operating leases, totaling $ 2.3 2.4 In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement In August 2018, the FASB issued ASU 2018-15, Intangibles, Goodwill and Other (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract Recent Accounting Pronouncements The Company continually assesses any new accounting pronouncements to determine their applicability. When it is determined that a new accounting pronouncement affects the Company's financial reporting, the Company undertakes a study to determine the consequences of the change to its condensed consolidated financial statements and assures that there are proper controls in place to ascertain that the Company's condensed consolidated financial statements properly reflect the change. In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes In August 2020, the FASB issued ASU No. 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity Reclassifications Certain reclassifications have been made to the 2020 consolidated financial statements in order to conform to the 2021 financial statement presentation. |
Discontinued Operations
Discontinued Operations | 9 Months Ended |
Jun. 30, 2021 | |
Discontinued Operations | |
Discontinued Operations | Note 4 – Discontinued Operations The Company has determined the loss of a controlling interest and deconsolidation of the operations of banQi as of June 14, 2021 represents a strategic shift that will have a major effect on the business and therefore meets the criteria for classification as discontinued operations at June 30, 2021 and prior periods presented in the condensed consolidated financial information. Accordingly, the assets and liabilities associated with the operations of banQi have been classified as discontinued operations in the accompanying condensed consolidated balance sheets, condensed consolidated statements of comprehensive loss, and condensed consolidated cash flows for all periods presented. The assets and liabilities that were included in the June 14, 2021 deconsolidation of banQi consist of the following: Schedule of discontinued operations BALANCE SHEET As of Cash and cash equivalents 6,110,979 Restricted cash 209,044 Accounts receivable, net 1,279,169 Prepaid expenses and other current assets 369,445 Intangibles, net 855,156 Property and equipment, net 148,922 Security deposits 9,051 Due from affiliates 5,431,853 Accrued liabilities 8,789,203 Other deferred revenue, current portion 51,877 Due to related party 12,676,882 Deferred revenue - Mastercard Program Agreement 13,081,493 Other deferred revenue, net of current portion 69,168 Foreign capital 252,000 Gain from deconsolidation of banQi (20,507,004 ) The results from the discontinued operations have been reflected in the Consolidated Statement of Comprehensive Loss for the three- and nine-month periods ended June 30, 2021 consist of the following: Schedule of discontinued operations Three Months Ended Nine Months Ended June 30, 2021 June 30, 2021 Revenue $ 567,626 $ 1,065,450 Operating expenses: Selling, general and administrative 4,816,514 12,017,284 Total operating expenses 4,816,514 12,017,284 Loss from operations (4,248,888 ) (10,951,835 ) Other (expense) income: Foreign currency transaction loss (39,032 ) — Interest income (expense), net 23,372 99,874 Other (expense) income, net (15,660 ) 99,874 Loss before income taxes (4,264,548 ) (10,851,961 ) Net income (loss) (4,264,548 ) (10,851,961 ) Net loss attributable to non-controlling interest — — Net loss attributable to CarrierEQ, Inc, (4,264,548 ) (10,851,961 ) Other comprehensive loss Foreign currency translation adjustment (527,484 ) (875,085 ) Total comprehensive loss (4,792,032 ) (11,727,046 ) As a result of the discontinued operations, the previously presented 2020 financial statements have been revised to present the consolidated financial statements of the continuing operations separate from the discontinued operations. The effects on the Consolidated Balance Sheet as of September 30, 2020 were as follows: Schedule of discontinued operations, previously presented September 30, 2020 As previously Reported Adjustment As Revised ASSETS Current assets: Cash and cash equivalents $ 3,272,664 $ 1,614,636 $ 1,658,028 Accounts receivable 857,901 857,901 — Prepaid expenses and other current assets 1,399,878 316,351 1,083,527 Current assets of discontinued operations — (2,788,888 ) 2,788,888 Total current assets 5,530,443 — 5,530,443 Non-current assets: Intangibles, net 4,325,105 33,059 4,292,046 Property and equipment. Net 3,790 3,790 — Security deposits 338,386 18,278 320,108 Lease right of use assets 1,979,658 — 1,979,658 Investment in related affiliate — — — Due from related party 1,400,000 — 1,400,000 Due from affiliates — 4,589,610 (4,589,610 ) Other assets 130,664 130,664 — Non-current assets of discontinued operations — (4,775,401 ) 4,775,401 Total non-current assets 8,177,603 — 8,177,603 Total assets $ 13,708,046 $ — $ 13,708,046 LIABILITIES AND MEMBER'S DEFICIT Current liabilities: Accounts payable 301,003 — 301,003 Accrued liabilities 4,261,009 3,111,495 1,149,514 Other deferred revenue. current portion 58,283 58,283 — AirToken refund liability 163,561 — 163,561 Lease liability, current portion 393,468 — 393,468 Due to related party 1,572,124 1,572,124 — Current liabilities of discontinued operations — (4,741,902 ) 4,741,902 Total current liabilities 6,749,448 — 6,749,448 Long-term liabilities: Deferred revenue - Mastercard Program Agreement 11,520,725 11,520,725 — Deferred gain on issuance of AirTokens for Services 396,790 — 396,790 Lease liability, net of current portion 1,758,196 — 1,758,196 Deferred revenue - AirToken Project 12,529,824 — 12,529,824 Other deferred revenue, net of current portion 81,620 81,620 — Long-term liabilities of discontinued operations — (11,602,345 ) 11,602,345 Total liabilities $ 33,036,603 $ — $ 33,036,603 Carrier EQ, LLC member's deficit: Member's deficit; 1,277,635 limited liability company units outstanding as of June 30, 2021 and September 30, 2020 (20,899,904 ) (10,352,340 ) (10,547,564 ) Accumulated other comprehensive income (loss) — 1,572,382 (1,572,382 ) Accumulated other comprehensive income of discontinued operations 1,572,382 8,779,958 (7,207,576 ) Total member's deficit attributable to Carrier EQ, LLC member (19,327,522 ) — (19,327,522 ) Non-controlling interest in subsidiary (1,035 ) — (1,035 ) Total member's deficit (19,328,557 ) — (19,328,557 ) Total liabilities and member's deficit $ 13,708,046 $ — $ 13,708,046 The effects on the Consolidated Statement of Comprehensive Loss for the three- and nine-month periods ended June 30, 2020 were as follows: Three Months Ended June 30, 2020 Nine Months Ended June 30, 2020 As Previously Reported Adjusted As Revised As Previously Reported Adjusted As Revised Revenue $ 34,576 $ 34,576 — $ 58,407 $ 58,407 — Operating expenses: Cost of revenue 114,839 (114,839 ) — 114,839 (114,839 ) — Selling, general and administrative 6,212,797 1,336,572 5,105,903 16,989,307 4,935,325 12,283,660 Impairment of digital assets — — — — — — Total operating expenses 6,327,636 1,221,733 5,105,903 17,104,146 4,820,486 12,283,660 Loss from operations 6,293,060 1,187,157 5,105,903 17,045,739 4,762,079 12,283,660 Other (expense) income: Realized loss on sale of digital assets — — — (1,392 ) — (1,392 ) Interest income (expense), net 122,861 40,033 82,828 150,015 147,120 2,895 Other (expense) income, net 122,861 40,033 82,828 148,623 147,120 1,503 Loss before income taxes (6,170,199 ) (1,147,124 ) (5,023,075 ) (16,897,116 ) (4,614,959 ) (12,282,157 ) Income tax benefit 47,620 — 47,620 129,661 — 129,661 Loss from Continuing Operations (6,122,579 ) (1,147,124 ) (4,975,455 ) (16,767,455 ) (4,614,959 ) (12,152,496 ) Net income (loss) from discontinued operations — (1,147,124 ) (1,147,124 ) — (4,614,960 ) (4,614,960 ) Net loss (6,122,579 ) (1,147,124 ) (6,122,579 ) (16,767,455 ) (4,614,960 ) (16,767,456 ) Net loss attributable to non-controlling interest (44 ) — (44 ) 461 — 461 Net loss attributable to Carrier EQ, LLC (6,122,623 ) (1,147,124 ) (6,122,623 ) (16,766,994 ) (4,614,960 ) (16,766,995 ) Other comprehensive income Foreign currency translation adjustment 120,645 — 120,645 1,118,914 — 1,118,914 Total comprehensive loss (6,001,978 ) (1,147,124 ) (6,001,978 ) (15,648,080 ) (4,614,960 ) (15,648,081 ) The depreciation, amortization and significant operating noncash items of the discontinued operations were as follows: Three Months Ended Nine Months Ended Depreciation and amortization $ 7,719 $ 29,472 |
Mastercard Program Agreement
Mastercard Program Agreement | 9 Months Ended |
Jun. 30, 2021 | |
Mastercard Program Agreement | |
Mastercard Program Agreement | Note 5 – Mastercard Program Agreement On December 16, 2019, banQi, received R$ 65 16 Pursuant to the Program Agreement, banQi, as a licensee of MasterCard International, Inc. and a business partner of Mastercard Brasil, entered into the Incentive Program (as defined in the Program Agreement) in order to issue, expand and boost the prepaid card (“Airfox Card”) base of banQi as well as the number of transactions and turnover (sales revenue) generated by MasterCard Cards. The Program Incentives monies (as defined in the Program Agreement) cannot be used for the benefit of any product of any Mastercard competitor and/or any card brand other than the Mastercard Network. As an incentive to support the launching of Airfox Card, on December 16, 2019 Mastercard Brasil made to BanQi the incentive prepayment per sales revenue ("Sales Revenue Incentive Prepayment") totaling R$65 million. As a Mastercard prepaid card issuer, banQi will be entitled to receive Sales Revenue Incentive pursuant to the Program Agreement. As a result, the Sales Revenue Incentive will be used to amortize the Sales Revenue Incentive Prepayment received on December 11, 2019. Upon complete amortization of Incentive Prepayment, Mastercard will make quarterly payments of the Sales Revenue Incentive, calculated according to the value of transactions completed with the prepaid cards issued by the banQi. banQi will have no minimum commitment of transaction volumes to be completed with the prepaid cards. The Sales Revenue Incentive Prepayment constitutes the creation of a direct financial obligation on banQi since it constitutes prepaid sales revenue from Mastercard Brasil to banQi. Via Varejo has agreed to act as a guarantor of banQi’s Sales Revenue Incentive Prepayment obligations to Mastercard Brasil pursuant to the Program Agreement and a Guaranty Letter. The Program Agreement has a term of ten years, unless earlier terminated by either party in accordance with specific provisions of the Program Agreement. The Program Agreement also establishes that the remaining balance of the prepaid incentive amount shall be updated every twelve months at 72% of the Brazilian federal funds rate, the "SELIC" rate (or 'over Selic') as of the payment date of the incentive, which turns the incentive agreement into a financial debt instrument. If the Agreement was ever terminated, even as of the ending of the effective term of ten years or before, the Company shall make the full payment of the remaining sales incentive prepaid balance at the actual termination date. The Company will recognize the revenue as earned on a monthly basis, based on a fixed percentage of the total dollar value of card transactions completed during the month in accordance with the terms in the agreement. Also, the company will recognize finance expenses related to the SELIC adjustment on a yearly basis, as stated by the agreement. The Company has identified one performance obligation that meets the series provision and recognizes revenue over time. The Company Sales incentives totaling $ 343 429 10 6 |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 9 Months Ended |
Jun. 30, 2021 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepaid Expenses and Other Current Assets | Note 6 - Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consisted of the following: Prepaid expenses and other current assets June 30, 2021 September 30, 2020 Service contract $ — $ 349,000 Research and Development tax credit 675,627 496,965 Prepaid expense 95,893 237,562 Total Prepaid expenses and other current assets $ 771,520 $ 1,083,527 |
Intangible Assets, Net
Intangible Assets, Net | 9 Months Ended |
Jun. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets, Net | Note 7 - Intangible Assets, Net The following table summarizes the Company’s definite-lived intangible assets: Intangible Assets, Net June 30, 2021 Estimated Gross Additions Impairment / Accumulated Net Domain names 3 $ 140,012 $ — — $ (123,674 ) $ 16,338 Capitalized software costs towards VV Wallet 3 4,855,125 1,012,937 (736,604 ) (1,836,202 ) 3,295,256 Website 3 282,645 — — (220,893 ) 43,867 Software 3 42,123 — (42,123) — — $ 5,319,905 $ 1,012,937 (778,727 ) $ (2,198,654 ) $ 3,355,461 September 30, 2020 Estimated Gross Additions Accumulated Net Domain names 3 $ 140,012 $ — $ (98,137 ) $ 41,875 Capitalized software costs towards VV Wallet 3 1,500,058 3,355,067 (702,477 ) 4,152,648 Website 3 272,083 10,562 (185,122 ) 97,523 $ 1,912,153 $ 3,365,629 $ (994,800 ) $ 4,292,046 The Company uses the straight-line method to determine the amortization expense for its definite-lived intangible assets. The amortization expense related to the definite-lived intangible assets was $ 0.4 1.2 0.3 0.6 0.7 42.1 |
Accrued liabilities
Accrued liabilities | 9 Months Ended |
Jun. 30, 2021 | |
Payables and Accruals [Abstract] | |
Accrued liabilities | Note 8 - Accrued liabilities Accrued liabilities consisted of the following: Accrued liabilities June 30, September 30, Customer deposits $ — $ — Accrued compensation 378,463 779,114 Other accrued liabilities 183 183 Operating third parties' liabilities — — Accrued accounts payable 160,629 196,609 Tax and licenses — — Credit card payable 16,616 23,261 Legal and professional — 130,347 Total accrued liabilities $ 555,891 $ 1,149,514 |
Preferred Stock
Preferred Stock | 9 Months Ended |
Jun. 30, 2021 | |
Equity [Abstract] | |
Preferred Stock | Note 9 - Preferred Stock Series One and One-A Preferred Stock Purchase Agreement On July 15, 2016, the Company sold to accredited investors an aggregate of 2,652,072 1,046,147 The Preferred Stock was convertible into the Company’s Common Stock on a 1 for 1 basis at the holders’ option. The Preferred Stock did not contain any redemption provisions. The Preferred Stock did not pay dividends and vote together with the common stock of the Company as a single class on all actions to be taken by the stockholders of the Company. On May 21, 2020, in connection with the February 7, 2020 written Call Exercise Notice from Via Varejo (“Call Exercise Notice”), the aggregate of 2,652,072 1,046,146 The Company amended its Certificate of Incorporation and filed the Second Restated Certificate of Incorporation (the “Restated Certificate of Incorporation”) with the Delaware Secretary of State on May 21, 2020, to provide for (i) a single class of common stock (and automatic conversion of any and all outstanding shares of preferred stock into common stock) and (ii) no preferential rights in favor of any shareholder. |
Common Stock
Common Stock | 9 Months Ended |
Jun. 30, 2021 | |
Common Stock | |
Common Stock | Note 10 - Common Stock On January 25, 2016, the Company issued 497,873 20 The contingent issuance of shares of common stock to the Investor was evaluated to determine whether the embedded feature would be required to be recorded as a derivative liability. It was determined the embedded feature qualifies for equity classification. On February 28, 2018 the Company repurchased 414,893 0.2 On May 21, 2020, in connection with the Call Exercise Notice, all of the Company’s previously outstanding common stock was purchased by the Buyer, which is included in the total aggregate of 25,265,794 |
Stock Based Compensation
Stock Based Compensation | 9 Months Ended |
Jun. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Stock Based Compensation | Note 11 - Stock Based Compensation The Company established a 2016 Equity Incentive Plan (the “Plan”) during 2016 and issued stock-based awards to certain employees and non-employees under this plan. The Plan provided for the issuance of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock units and other stock awards. On February 3, 2020, the Company’s Board of Directors approved an amendment to the Plan to decrease the aggregate number of shares of the Company’s common stock that may be issued pursuant to Stock Awards (as defined in the Plan) from 2,834,837 2,676,126 Additionally, on February 3, 2020, the Company’s Board of Directors approved the acceleration of vesting of 751,849 On February 6, 2020, the Board approved the acceleration of vesting of 149,564 On February 26, 2020, the Board approved the acceleration of vesting of 277,564 On May 21, 2020, concurrently with the consummation of the Transaction and as a condition precedent under the September 11, 2018 convertible note purchase and call option agreement (the “Call Option Agreement”), the Company’s Board of Directors cancelled all outstanding options to purchase the Company’s Common Stock granted under the Plan. All of the holders of the outstanding options issued under the Plan were immediately cancelled and, in consideration for such cancellation were entitled to a lump sum cash payment from the Company. The Company lacks company-specific historical and implied volatility information. Therefore, it estimates its expected stock volatility based on the historical volatility of a set of publicly traded peer companies. Due to the lack of historical exercise history, the expected term of the Company’s stock options for employees has been determined utilizing the “simplified” method for awards. The risk-free interest rate was determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. The expected dividend yield was zero based on the fact that the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future. The fair value of the Company’s common stock was estimated to be $ 0.29 The Company used the Black-Scholes option-pricing model to estimate the fair value of options issued using the following assumptions: Stock option valuation assumptions Nine Months Ended June 30, Nine Months Ended Price of Common Stock $ — $ 0.25 0.29 Volatility — % 60 72 Expected term (in years) — 0 – 6.90 Risk free rate — % 1.39 1.74 On May 21, 2020, as a result of the Transaction, there was a change in control when the Company was fully acquired by Via Varejo, and as a condition precedent under the Call Option Agreement, the Company’s Board of Directors cancelled all outstanding options. As noted in the 2016 Equity Incentive Plan Amendment, for instances where a change in control occurs, vesting will be accelerated for all outstanding stock award and a cash payment will be paid to all Option Stockholders by Via Varejo. The total unrecognized compensation cost based on the fair value of the options was recognized as stock-based compensation expense on May 21, 2020 totaling $ 0.1 3.3 0.2 3.1 no 0 3.2 0 3.4 0 0 0 0 |
Concentrations
Concentrations | 9 Months Ended |
Jun. 30, 2021 | |
Risks and Uncertainties [Abstract] | |
Concentrations | Note 12 – Concentrations Accounts Payable As of June 30, 2021, and September 30, 2020, the Company had approximately 99 85 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Jun. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 13 - Commitments and Contingencies Operating Leases The Company has operating leases primarily consisting of office space with remaining lease terms of 1 to 8 years, subject to certain renewal options as applicable. Leases with an initial term of twelve months or less are not recorded on the balance sheet, and the Company does not separate lease and non-lease components of contracts. There are no material residual guarantees associated with any of the Company’s leases, and there are no significant restrictions or covenants included in the Company’s lease agreements. Certain leases include variable payments related to common area maintenance and property taxes, which are billed by the landlord, as is customary with these types of charges for office space. The Company determined that the exercise of the renewal option became reasonably certain for its office space in Boston and Brazil; therefore, the payments associated with the renewal are now included in the measurement of the lease liability and ROU asset for those locations. The useful life of the Boston and Brazil office spaces will extend through February 2028 and September 2021, respectively. In February 2021, the Company modified the terms of Brazilian Lease agreement with the landlord, and the Company decided to reduce the length of the contract to April 30, 2021, as the remote work has been practiced by mostly employees and the office facilities are not being fully used. Considering the new terms, this agreement specifically is not applicable to the Operating Lease approach and its ROU was fully amortized in the current quarter. The Company is evaluating options of other locations. The remaining amounts of this agreement of lease liabilities and ROU were fully amortized. The Company’s lease agreements generally do not provide an implicit borrowing rate. Therefore, the Company used a benchmark approach to derive an appropriate imputed discount rate. The Company benchmarked itself against other companies of similar credit ratings and comparable quality and derived imputed rates, which were used to discount its real estate lease liabilities. The Company used estimated incremental borrowing rates of 7.52 5.73 9.68 The Company entered into a sublease agreement with a subtenant on March 1, 2020, the rent commencement date was April 1, 2020, and the lease terminated on December 31, 2020. There was approximately $ 0 0 Lease Costs The table below prese nts certain information related to the lease costs for the Company’s operating leases: Lease cost Three Months Ended June 30, 2021 Nine Months Ended June, 2021 Three Months Ended June 30, 2020 Nine Months Ended June, 2020 Components of total lease cost: Operating lease expense $ 214,604 $ 294,133 $ 168,115 $ 504,345 Total lease cost $ 214,604 $ 294,133 $ 168,115 $ 504,345 Lease Position as of June 30, 2021 Right of use lease assets and lease liabilities for our operating leases were recorded in the condensed consolidated balance sheet as follows: Leases Recorded Balance Sheet As of June 30, 2021 Assets Operating lease right of use assets $ 1,636,515 Total lease assets 1,636,515 Liabilities Current liabilities: Operating lease liability, current portion $ 212,450 Noncurrent liabilities: Operating lease liability, net of current portion 1,601,564 Total lease liability $ 1,814,014 Lease Terms and Discount Rate The table below presents certain information related to the weighted average remaining lease term and the weighted average discount rate for the Company’s operating leases as of June 30, 2021: Weighted average remaining lease term and weighted average discount rate Weighted average remaining lease term (in years) – operating leases 6.61 % Weighted average discount rate – operating leases 7.50 % Undiscounted Cash Flows Future lease payments included in the measurement of lease liabilities on the condensed consolidated balance sheet as of June 30, 2021, for the following five fiscal years and thereafter were as follows: Future lease payments Year ending September 30, Operating Leases Remaining 2021 $ 803,668 2022 326,453 2023 333,104 2024 339,755 2025 346,406 2026 353,055 2027 359,714 2028 152,420 Total Minimum Lease Payments $ 2,291,273 Less effects of discounting (477,259 ) Present value of future minimum lease payments $ 1,814,014 Legal Proceedings The Company may be involved in various lawsuits, claims and proceedings incidental to the ordinary course of business. The Company accounts for such contingencies when a loss is considered probable and can be reasonably estimated. Between August and October 2017, the Company offered and sold AirTokens pursuant to the 2017 ICO and raised approximately $ 15 0.3 On March 15, 2019, the Company filed an initial registration statement on Form 10 with the SEC under the Exchange Act on a voluntary basis in connection with the Settlement Agreement and to provide current information to Potential AirToken Claimants pursuant to Section 12(a) of the Securities Act. The Form 10 registration statement became effective on May 14, 2019, and on October 18, 2019 we were notified that the SEC had completed its review of the Form 10 registration statement. In conjunction with the Settlement Agreement, Potential AirToken Claimants were entitled to return their AirTokens to the Company and receive a refund in the amount of consideration paid, plus interest, less the amount of any income received thereon. Pursuant to the Settlement Agreement, as modified in May 2019, our Company timely distributed the claim forms on June 28, 2019. The claims period closed on September 28, 2019. All forms were processed in accordance with the terms and provisions set forth by the Settlement Agreement. The Company received claim forms from 174 Potential AirToken Claimants during the claims period and the Company determined to approve payment on 163 out of the 174 claims, which is approximately 93% of the claim forms received during the claims period. On December 11, 2019, the Company commenced the process of notifying, via email only, all 174 Potential AirToken Claimants of the Company’s resolution of their claim. On or before December 28, 2019 the Company paid all approved claims to approved claimants who returned their AirTokens to us (approximately 93.5% of the total dollar amount of all approved claim refunds). All amounts were refunded in cash and paid through the Company's existing cash and cash equivalent reserves. The total claim amounts including interest, totaled $3.3 million on December 28, 2019. Certain approved claimants did not return their AirTokens to the Company. The Company did not pay approved claims to approved claimants who did not return their AirTokens to the Company. As of June 30, 2021, the amount that was not paid was approximately $ 0.2 Additionally, the Settlement Agreement requires our Company to: ● Maintain timely filings of all reports required by Section 13(a) of the Exchange Act for at least one year from the date the Form 10 becomes effective (the “ Effective Date ● Provide monthly reports to the SEC which include the amount of the claims paid, and any claims not paid as well as the reasons for non-payment. ● Submit to the SEC a final report of its handling of all claims received within seven months from the Effective Date of the Form 10 filing. Also, on November 16, 2018, The Company entered into a settlement with the Massachusetts Securities Division related to the issuance of AirTokens in the 2017 ICO whereby the Company agreed to pay a penalty of $ 0.1 As a result of the Company’s inability to timely resolve these accounting issues, the Company did not timely file with the SEC the Company’s Quarterly Reports on Form 10-Q for the quarters ended June 30, 2019 and June 30, 2019, and the Company’s annual report on Form 10-K for the year ended September 30, 2019, which puts the Company in violation of Section 13(a) of the Exchange Act and the Settlement Agreement. In addition, the Company did not timely file certain Current Reports on Form 8-K. As a result of the Company’s failure to timely file these various reports, the SEC may through civil or administrative actions seek monetary and non-monetary relief from the Company, including fines, penalties, undertakings and conduct-based injunctions, and officer and director bars and suspensions. On December 30, 2019 a claimant who purchased AirTokens in the 2017 ICO whose claim was denied for failure to comply with the deadlines and the claim process filed a civil lawsuit against the Company in the Supreme Court of the State of New York, County of New York. The lawsuit alleges a claim of sale of unregistered securities to the plaintiff under Section 12(a) of the Securities Act of 1933 in connection with the plaintiff’s purchase of AirTokens in the 2017 ICO. The plaintiff demands a full refund in the amount of consideration paid, plus interest and other costs. On February 25, 2020 the Company settled this claim with the plaintiff and the lawsuit was dismissed. The claims period officially came to a close on September 28, 2019. All claims were processed in accordance with the terms and provisions set forth in the SEC Order. Other than with respect to the matters described above, the Company is not aware of any pending or threatened claims that we violated any federal or state securities laws. However, the Company cannot assure that any such claim will not be asserted in the future or that the claimant in any such action will not prevail. The possibility that such claims may be asserted in the future will continue until the expiration of the applicable federal and state statutes of limitations. If the payment of additional rescission claims or fines is significant, it could have a material adverse effect on the Company cash flow, financial condition or prospects and the value of the AirTokens. |
Income Taxes
Income Taxes | 9 Months Ended |
Jun. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 14 - Income Taxes A nominal provision for taxes has been recorded as the Company has incurred net operating losses since inception. Significant components of the Company’s net deferred income tax assets as of December 31, 2020 and September 30, 2020 consist of income tax loss carryforwards. These amounts are available for carryforward indefinitely for use in offsetting taxable income. Realization of the future tax benefits is dependent on the Company’s ability to generate sufficient taxable income within the carry-forward period. Prior to May 21, 2020 the Company was organized as a C Corporation for tax purposes. As of May 21, 2020, the Company was converted from a C Corporation to a limited liability company ("LLC"). As a result of this transaction the Company believes it has lost the right to utilize its net operating loss carryovers, non-refundable tax credits and charitable contribution carryover assets associated with the original corporation with which the Company was organized within. Generally, only a Company that has generated a net operating loss should be able to then utilize that net operating loss to reduce its own future profits. In late December 2020, the Company filed Form 8832 with the Internal Revenue Service in order to elect C corporation tax classification for the LLC. The Company filed this request within the 90-day time period allowed for automatic approval of the Company’s tax classification request. On May 21, 2020, the Company was fully acquired by Via Varejo S.A, a corporation organized under the laws of the Federative Republic of Brazil (“Via Varejo”) through Lake Niassa Empreendimentos e Participações Ltda., a limited liability company duly organized under the laws of the Federative Republic of Brazil and wholly-owned by Via Varejo (“Transaction”). As a result of the Transaction, the utilization of some of the net operating loss carryforwards generated in both prior and the current fiscal years may be subject to a substantial annual limitation due to the ownership change limitations provided by the Internal Revenue Code of 1986, as amended, and similar state provisions. As of the date of these financial statements, the Company has not undertaken an effort to convince the IRS that the Company’s net operating losses prior to and through May 21, 2020 should be maintained and available for the Company’s future benefit. The Company may or may not do this in the future. The Company may also have lost the use of the net operating loss assets as a result of IRC 382. The Company may undertake an Internal Revenue Code (“IRC”) 382 study to estimate the amount of the net operating losses that may be utilized in the future. However, whatever the outcome of the IRC 382 study is, the IRS would still have to approve the Company’s right to utilize such carryovers in the future. However, throughout the Company’s history the Company has generated substantial net operating losses. These deferred tax assets arising from the future tax benefits are currently considered not likely to be realized and are thus reduced to zero by an offsetting valuation allowance. As a result, there is no provision for income taxes other than those amounts required to properly accrued for the various state minimum income taxes owed by the Company to the jurisdictions in which it operates. The income tax benefit for the three and nine months ended June 30, 2021 and 2020 is the result of research and development tax credits. Brazil Income Taxation The Company operates a subsidiary in Brazil. All Brazilian resident companies are taxed on their world-wide income. Corporate income tax (IRPJ) is generally assessed at a fixed rate of 15% on annual taxable income, using either the 'actual profits' method (APM) or the 'presumed profits' method (PPM). All legal entities are further subject to Social Contribution on Net Income (CSLL) at the rate of 9% (except for financial institutions, private insurance, as well as certain other prescribed entities, who are taxed at a 15% rate). This amount is not deductible for IRPJ purposes. The tax base is therefore the profit before income tax, after some adjustments, depending on the calculation method (i.e. APM or PPM). Corporate taxpayers may also be subject to a surcharge of 10% on annual taxable income in excess of 240,000 Brazilian reais (BRL). |
Related Party Transaction
Related Party Transaction | 9 Months Ended |
Jun. 30, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transaction | Note 15 – Related Party Transaction The related party transactions between the Company and Via Varejo were revenue totaling $ 32.3 361.9 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Jun. 30, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 16 – Subsequent Events On July 8, 2021, Lake Niassa made a capital contribution to Airfox in the amount of $ 480 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Jun. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated interim financial statements (“interim statements”) of Airfox have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) as determined by Financial Accounting Standards Board (the “FASB”) within its Accounting Standards Codification (“ASC”) and under the rules and regulations of the United States Securities and Exchange Commission (“SEC”). Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments and disclosures necessary for a fair presentation of these interim statements have been included. The results reported in these interim statements are not necessarily indicative of the results that may be reported for the entire year. These interim statements should be read in conjunction with the Company’s consolidated financial statements as of and for the year ended September 30, 2020. The Company has elected not to apply pushdown accounting to the accompanying standalone condensed consolidated financial statements in accordance with ASC 805 Business Combinations The Company is an emerging growth company as the term is used in The Jumpstart Our Business Startups Act, enacted on April 5, 2012 and has elected to comply with certain reduced public company reporting requirements, however, the Company may adopt accounting standards based on the effective dates for public entities. As of June 14, 2021, the operations of banQi were deconsolidated from the Company, as the Company no longer had a controlling interest in banQi. The Company accounted for the loss in controlling interest as discontinued operations in banQi in accordance with Accounting Standards Codification, ASC 205, Discontinued Operations and Accounting Standards Update, ASU, No. 2014-08, Reporting of Discontinued Operations and Disclosures of Disposals of Components of an Entity. ASC 205 requires that a component of an entity that has been disposed of or is classified as held for sale and has operations and cash flows that can be clearly distinguished from the rest of the entity be reported as assets held for sale and discontinued operations. In the period a component of an entity has been disposed of or classified as held for sale, the results of operations for the periods presented are reclassified into separate line items, net of tax, in the unaudited condensed consolidated statements of comprehensive loss. Assets and liabilities are also reclassified into separate line items on the related condensed consolidated balance sheets for the periods presented. The statements of cash flows for the periods presented are also reclassified to reflect the results of discontinued operations as separate line items. ASU 2014-08 requires that only a disposal of a component of an entity, or a group of components of an entity, that represents a strategic shift that has, or will have, a major effect on the reporting entity’s operations and financial results be reported in the financial statements as discontinued operations. ASU 2014-08 also provides guidance on the financial statement presentations and disclosures of discontinued operations. Due to the deconsolidation of banQi during the third quarter of fiscal 2021, in accordance with ASC 205, Discontinued Operations, the Company has classified the results of banQi as discontinued operations in our unaudited condensed consolidated statements of operations and cash flows for all periods presented. All assets and liabilities associated with banQi were therefore classified as assets and liabilities of discontinued operations in our condensed consolidated balance sheets for the periods presented. All amounts included in the notes to the unaudited condensed consolidated financial statements relate to continuing operations unless otherwise noted. For additional information, see Note 4, Discontinued Operations. |
Principles of Consolidation | Principles of Consolidation Prior to June 14, 2021 the Company had a controlling interest in banQi and, prior to April 6, 2020, had a 100 On June 14, 2021, the Company’s ownership of banQi was reduced from 99.99% to 1.43 The change in ownership represents a transfer of net assets between entities under common control, because all entities are owned by the same common parent entity, Lake Niassa, and thus the gain on deconsolidation of banQi was recorded against accumulated deficit The Company will also record a cost method investment in banQi for their respective investment in the entity, and any previously recorded non-controlling interest will be removed from the balance sheet. All intercompany transactions have been eliminated in consolidation. The Company is not involved with variable interest entities. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the balance sheet and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ significantly from those estimates. The most significant accounting estimates inherent in the preparation of the Company's financial statements includes, but not limited to, estimated lives of intangible assets, intangible asset impairment, revenue recognition and deferred tax valuation allowance. |
Foreign Currency | Foreign Currency The Company had operations in Brazil until June 14, 2021, where the local currency is used to prepare the financial statements which are translated into the Company’s reporting currency, U.S. dollars. The local currency is the functional currency for the operations outside the United States. Changes in the exchange rates between this currency and the Company’s reporting currency, are partially responsible for some of the periodic changes in the condensed consolidated financial statements prior to June 14, 2021. Assets and liabilities of the Company’s foreign operations until June 14, 2021 are translated into U.S. dollars at the spot rate in effect at the applicable reporting date. Revenues and expenses of the Company’s foreign operations are translated at the average exchange rate during the applicable period. The resulting unrealized cumulative translation adjustment is recorded as a component of accumulated other comprehensive income (loss) in stockholders’ equity. Realized and unrealized transaction gains and losses generated by transactions denominated in a currency different from the functional currency of the applicable entity are recorded in other income (loss) in the period in which they occur. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue under ASC 606, Revenue from Contracts with Customers ASC 606 prescribes a 5-step process to achieve its core principle: Step 1: Identify the contract with the customer Step 2: Identify the performance obligations in the contract Step 3: Determine the transaction price Step 4: Allocate the transaction price to the performance obligations in the contract Step 5: Recognize revenue when the Company satisfies a performance obligation AirToken Project Development Services (Non ASC 606 Revenue) The Company determined that its token issuances represented obligations to perform software development services and accounts for the proceeds received in the token issuances in accordance with ASC 730-20, Research and Development – Research and Development Arrangements The Company, beginning in August 2017 through early October 2017, obtained Ether and Bitcoin totaling approximately $ 15.3 0.1 Pursuant to the Settlement Agreement (as defined and described further in Note 13), the Company was obligated to refund amounts raised for the purpose of developing the AirToken Project if valid claims were submitted. On or before December 28, 2019, the Company paid all approved claims to approved claimants who returned their AirTokens to the Company (approximately 93.5% of the total dollar amount of all approved claim refunds). All amounts were refunded in cash and paid through the Company’s existing cash and cash equivalent reserves. The total claim amounts including interest, totaled $ 3.3 0.2 Effective October 1, 2019, the Company was not able to estimate a date to conclude the development of the AirToken Project due to regulatory matters that affect the continuity of the development process. Due to this reason, the AirToken Project was on hold and no revenue has been recognized from the AirToken Project. On June 30, 2021, Lake Niassa determined to discontinue the development of AirTokens and end the AirToken project related to the Company’s business. At this time, the Company does not have the ability to further develop AirTokens as part of its business plan in the absence of new laws or a definitive regulatory regime (in both the U.S. and Brazil) regarding the use and transferability of AirTokens (and other similar tokens issued on the Ethereum block chain that are classified as securities). Current laws and regulatory regimes do not provide for the Company to utilize the AirTokens as envisioned by the Company since AirTokens are no longer freely transferable and the previous market for AirTokens no longer exists. AirTokens were never fully developed and never gained full functionality. As previously stated, AirTokens are not currently freely transferable and no market exists for AirTokens. As a result of the discontinuation of the development of AirTokens, AirTokens will lose their functionality in full, and it is likely that no market for AirTokens will ever be re-created and that AirTokens will not again ever be freely transferable. Since the Company is no longer continuing with the AirToken project, the Company has not recognized any revenue related to the research and development of the AirToken project, and the deferred revenue is no longer appropriate to be recorded on the balance sheet. The liability, Deferred revenue - AirToken Project, of approximately $12.5 million 12,529,824 Mastercard Revenue and Sale Incentives (ASC 606 Revenue) On December 16, 2019, banQi, received R$ 65 16 Pursuant to the Program Agreement, banQi, as a licensee of MasterCard International, Inc. and a business partner of Mastercard Brasil, entered into the Incentive Program (as defined in the Program Agreement) in order to issue, expand and boost the prepaid card (“Airfox Card”) base of banQi, as well as the number of transactions and turnover (sales revenue) generated by MasterCard Cards. As a Mastercard prepaid card issuer, banQi is entitled to receive Sales Revenue Incentives pursuant to the Program Agreement. As a result, the Sales Revenue Incentives is used to amortize the Sales Revenue Incentive Prepayment received on December 11, 2019. Upon complete amortization of Incentive Prepayment, Mastercard makes quarterly payments of the Sales Revenue Incentive, calculated according to the value of transactions completed with the prepaid cards issued by the banQi. banQi have no minimum commitment of transaction volumes to be completed with the prepaid cards. The revenue from the Program Agreement was recognized until June 14, 2021, the date on which the Company no longer had a controlling interest over banQi, thus no additional revenue was recognized from that date through June 30, 2021. 343 10 3,085 6,802 In connection to the Program Agreement, the Company also entered into an agreement with Mastercard, an Interchange Manual (“Interchange Fee Agreement”) from Mastercard dated June 18, 2019, which details the fees paid by a merchant’s bank to banQi to compensate for the value and benefits that merchant receives when it accepts electronic payments. The fee is a specified percentage of the total dollar amount of a card transaction, and a fixed percentage based on the type of card transaction (i.e. merchant type, national vs. international, etc.), based on the schedule of fees outlined in the Interchange Fee Agreement (“Interchange Fee Revenue”). On a monthly basis, the Company earns revenue from the Interchange Fee received. The Company has identified one performance obligation that meets the series provision and recognizes revenue over time. Interchange Fee Revenue totaling $ 94 3,085 66 6,802 Via Varejo Services Agreement Revenue (ASC 606 Revenue) The Company entered into a Services Agreement (the “Services Agreement”) as of September 11, 2018 (“the Agreement Effective Date”) with Via Varejo (the “Client”). The Company was engaged to design and develop a mobile software module and application programming interface that provides the Client’s customers with access to certain mobile payment functionality, and that integrates banQi (“VV Wallet Services”). The Company provided certain services, including hosting, maintenance and operation of banQi, The VV Wallet Services were structured into four phases. The Phases are - Phase 1: Specifications and Customization; Phase 2: Features; Phase 3: License and Maintenance Services and Phase 4: Rollout. The development of the VV Wallet Services was considered a bundled performance obligation that included the development of the API and software as a service which is hosted on the Company’s servers. In addition to the software as a service performance obligation, the Company provided support services for the software as a service. The Client was considered to simultaneously receive and consume the benefits provided by the Company’s performance as the Company performed the services. Accordingly, the revenue from Service Charges was recognized over time based on the number of transactions made by Client customers with banQi. During Phase 1, there was a payment of $0.3 million (“Upfront Payment”) from the Client to be recognized as revenue commencing when the product was ready for its intended use and ratably over the remaining term of the Services Agreement through the duration of the Services Agreement. The total revenue recognized for the three months ended June 30, 2021 and 2020 totaled $ 159 12.1 202 24.9 |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents consist of cash on deposit with banks and money market instruments. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts As of June 30, 2021, there was a minimal amount of accounts receivable as the Company no longer consolidates the operations of banQi. |
Concentrations of Credit Risk and Off-Balance Sheet Risk | Concentrations of Credit Risk and Off-Balance Sheet Risk The Company is subject to concentration of credit risk with respect to their cash and cash equivalents, which the Company attempts to minimize by maintaining cash and cash equivalents with institutions of sound financial quality. At times, cash balances may exceed limits federally insured by the Federal Deposit Insurance Corporation. The Company had cash and cash equivalents, including amounts held in financial institutions in the USA that totaled $ 378 thousand. The Company believes it is not exposed to significant credit risk due to the financial strength of the depository institutions in which the funds are held. The Company has no financial instruments with off-balance sheet risk of loss. |
Long-Lived Assets, Including Definite Intangible Assets | Long-Lived Assets, Including Definite Intangible Assets Long-lived assets and other indefinite-lived intangibles are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable through the estimated undiscounted future cash flows derived from such assets. The Company’s definite-lived intangible assets primarily consist of various domain names and websites. For long-lived assets used in operations, impairment losses are only recorded if the asset’s carrying amount is not recoverable through its undiscounted, probability-weighted future cash flows. The Company measures the impairment loss based on the difference between the carrying amount and the estimated fair value. When an impairment exists, the related assets are written down to fair value. |
Security Deposits | Security Deposits Security deposits primarily include monies being held subject to a security agreement (“Security Agreement”) with Mastercard, Inc. executed on June 7, 2019. The Security Agreement is related to the Services Agreement to ensure a minimum amount of users for the cards. On April 22, 2020 Mastercard returned $ 1.2 0.3 Included in the security deposits balance as of June 30, 2021 are $ 281 |
Investment in related affiliate | Investment in related affiliate After the deconsolidation of banQi, the Company's remaining investment in banQi of $ 252 1.43 |
Due to Related Party | Due to Related Party Amounts due to banQi as of June 30, 2021 are $ 5.5 92 47 |
Software Development Costs | Software Development Costs The Company capitalizes costs related to software developed or obtained for internal use in accordance with the ASC 350-40, Internal-Use Software · ● Preliminary project stage: (a) conceptual formulation of alternatives; (b) evaluation of alternatives; (c) determination of existence of needed technology; and (d) final selection of alternatives. Internal and external costs incurred during the preliminary project stage ● Application development stage: (a) design of chosen path, including software configuration and software interfaces; (b) coding; (c) installation to hardware; and (d) testing, including parallel processing phase. Internal and external costs incurred to develop internal-use computer software during the application development stage are capitalized. ● Post-implementation-operation stage: (a) training; and (b) application maintenance. Internal and external costs incurred during the post-implementation-operation stage are expensed as incurred. Certain costs incurred are considered enhancements, modifications to existing internal-use software that result in additional functionality. Enhancements normally require new software specifications and may also require a change to all or part of the existing software specifications. When this additional functionality is determinable, the related costs are capitalized. Otherwise, costs are expensed as incurred. Capitalization of internal-use software costs ceases when a computer software project is substantially complete and ready for its intended use. The Company begins amortization when the product is available for general release or use. The Company has capitalized software costs relating to the Via Varejo Services Agreement and began amortization on January 1, 2020 as the product was ready for its intended use and has been amortized through the contract term until September 2023. The amortization expense related to the Via Varejo Services Agreement capitalized software for the three and nine months ended June 30, 2021 totaled $ 0.4 1.4 The Company capitalizes costs related to the development and maintenance of its website in accordance with ASC 350-50, Website Development Costs Included in the net intangibles balance as of June 30, 2021 are $ 3,295,256 has entered into discussions with Via Varejo and Lake Niassa to transfer these assets to banQi. The companies are still working out the final details, which should close prior to Airfox's September 30, 2021 year-end. |
Capitalizing Software Costs in Connection with Hosting Arrangements and Software as a Service Arrangements | Capitalizing Software Costs in Connection with Hosting Arrangements and Software as a Service Arrangements For the operation in Brazil at banQi, the Company developed certain software that are considered to be part of cloud computing arrangement (or hosting arrangement), whereby, a user or a customer of software does not take possession of the Company’s software; rather, the software is accessed on an as-needed basis over the Internet. Therefore, when the software is used to produce a product or in a process to provide a service to a customer, and the customer is not given the right to obtain or use the software, the related costs are accounted for in accordance with ASC 350-40. When a hosting arrangement includes multiple modules or components, capitalized costs are amortized on a module-by-module basis. When a module or component is substantially ready for its intended use, amortization begins, regardless of whether the overall hosting arrangement is being placed in service in planned stages. If the module’s functionality is entirely dependent on the completion of one or more other modules, then amortization does not begin until that group of interdependent modules is substantially ready for use. |
Impairment of Long-term Assets | Impairment of Long-term Assets The Company evaluates the recoverability of tangible and intangible assets periodically by taking into account events or circumstances that may warrant revised estimates of useful lives or that indicate the asset may be impaired. |
Leases | Leases The Company categorizes leases at their inception as either operating or finance leases based on the criteria in ASC 842, Leases (“ASC 842”) |
Advertising | Advertising Advertising costs are expensed as incurred and included in selling, general and administrative expenses and amounted to a reversal of $ 0.7 29 179 75 |
Income Taxes | Income Taxes Income taxes are recorded in accordance with ASC 740, Income Taxes The Company accounts for uncertain tax positions in accordance with the provisions of ASC 740. When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that the benefit would more likely than not be realized assuming examination by the taxing authority. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances. The Company recognizes any interest and penalties accrued related to unrecognized tax benefits as income tax expense. |
Gain on issuance of AirTokens for services | Gain on issuance of AirTokens for services AirTokens issued to vendors for services in connection with raising monies for the purpose of developing the AirToken Project were accounted for in accordance with ASC 845-30-1, Nonmonetary Transactions, which requires that the AirTokens to be recognized at fair value and resulted in recognizing a deferred gain of approximately $ 1.7 0.02 On June 30, 2021, Lake Niassa determined to discontinue the development of AirTokens and end the AirToken project related to the Company’s business. At this time, the Company does not have the ability to further develop AirTokens as part of its business plan in the absence of new laws or a definitive regulatory regime (in both the U.S. and Brazil) regarding the use and transferability of AirTokens (and other similar tokens issued on the Ethereum block chain that are classified as securities). Current laws and regulatory regimes do not provide for the Company to utilize the AirTokens as envisioned by the Company since AirTokens are no longer freely transferable and the previous market for AirTokens no longer exists. AirTokens were never fully developed and never gained full functionality. As previously stated, AirTokens are not currently freely transferable, and no market exists for AirTokens. As a result of the Company discontinuing the development of AirTokens, AirTokens will lose their functionality in full, and it is likely that no market for AirTokens will ever be re-created and that AirTokens will not again ever be freely transferable. Since the Company is no longer continuing with the AirToken project, the Company should not recognize any revenue related to the research and development of the AirToken project, and the deferred revenue is no longer appropriate to be recorded on the balance sheet. The liability, Deferred revenue - AirToken Project, of approximately $13 million, as of June 30, 2021, was extinguished and charged to Other Income in the Condensed Consolidated Statements of Comprehensive Loss. |
Distinguishing Liabilities from Equity | Distinguishing Liabilities from Equity The Company relies on the guidance provided by ASC 480, Distinguishing Liabilities from Equity Once the Company determines that a financial instrument should not be classified as a liability, the Company determines whether the financial instrument should be presented between the liability section and the equity section of the balance sheet. The Company will determine temporary equity classification if the redemption of the financial instrument is outside the control of the Company (i.e., at the option of the holder). Otherwise, the Company accounts for the financial instrument as permanent equity. The Company records its financial instruments classified as liability, temporary equity or permanent equity at issuance at the fair value, or cash received. The Company records its financial instruments classified as liabilities at their fair value at each subsequent measurement date. The changes in fair value of these financial instruments are recorded as other expense/income. |
Hedging | Hedging The Company does not use derivative instruments to hedge exposures to cash flows, market or foreign currency risks. The Company evaluates its financial instruments, including equity-linked financial instruments, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. |
Stock-based Compensation | Stock-based Compensation The Company accounts for stock-based compensation to employees and non-employees in conformity with the provisions of ASC 718, Compensation - Stock Based Compensation Common shares issued to third parties for services provided are valued based on the estimated fair value of the Company’s common shares. All stock-based compensation costs are recorded in selling, general and administrative expenses in the consolidated statements of operations. All stock-based compensation awards were cancelled pursuant to the Transactions which occurred on May 21, 2020. In August 2020, the Company established the Share Based Payment Program with Cash Settlement - Phantom Shares of Via Varejo S.A. (the "Plan"). Pursuant to the Plan, the Company's Board of Directors may grant cash-settled shares, referred to as "Phantom Shares," to the Company's employees as part of the employees' remuneration package. Each Phantom Share will represent the employee's right to receive the full amount corresponding to the average quotation of 3 (three) common shares of Via Varejo S.A. in the 20 (twenty) trading sessions at B3 - Brazil, Bolsa, Balcão immediately prior to vesting, as established in the Plan. The Phantom Shares vest over a service period of five years . As of June 14, 2021, there is no liability reported related to the Phantom Shares due the deconsolidation of banQi. No Phantom Shares have vested as of June 30, 2021. |
Fair Value Measurement | Fair Value Measurement The Company’s financial instruments include cash and cash equivalents, accounts receivable, accounts payable and short and long-term debt. The fair values of cash and cash equivalents, accounts receivable, and accounts payable approximate their stated amounts because of the short maturity of these financial instruments. The valuation hierarchy is composed of three levels. The classification within the valuation hierarchy is based on the lowest level of input that is significant to the fair value measurement. The levels within the valuation hierarchy under ASC 820 are described below: Level 1 — Assets and liabilities with unadjusted, quoted prices listed on active market exchanges. Inputs to the fair value measurement are observable inputs, such as quoted prices in active markets for identical assets or liabilities. Level 2 — Inputs to the fair value measurement are determined using prices for recently traded assets and liabilities with similar underlying terms, as well as direct or indirect observable inputs, such as interest rates and yield curves that are observable at commonly quoted intervals. Level 3 — Inputs to the fair value measurement are unobservable inputs, such as estimates, assumptions, and valuation techniques when little or no market data exists for the assets or liabilities. |
Adoption of Recent Accounting Pronouncements | Adoption of Recent Accounting Pronouncements In February 2016, the FASB established Topic 842, Leases Land Easement Practical Expedient for Transition to Topic 842; Codification Improvements to Topic 842, Leases Targeted Improvements Narrow-Scope Improvements for Lessors The Company adopted ASU 2016-02 effective October 1, 2019 using the modified retrospective approach whereby the Company will continue to present prior period financial statements and disclosures under ASC 840. In addition, the Company elected the transition package of three practical expedients permitted within the standard, which eliminates the requirements to reassess prior conclusions about lease identification, lease classification and initial direct costs. Further, the Company adopted a short-term lease exception policy, permitting the Company to not apply the recognition requirements of this standard to short-term leases (i.e. leases with terms of 12 months or less) and an accounting policy to account for lease and non-lease components as a single component for certain classes of assets. Adoption of the new standard resulted in the recording of right-of-use assets and lease liabilities related to the Company’s operating leases, totaling $ 2.3 2.4 In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement In August 2018, the FASB issued ASU 2018-15, Intangibles, Goodwill and Other (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract |
Recent Accounting Pronouncements | Recent Accounting Pronouncements The Company continually assesses any new accounting pronouncements to determine their applicability. When it is determined that a new accounting pronouncement affects the Company's financial reporting, the Company undertakes a study to determine the consequences of the change to its condensed consolidated financial statements and assures that there are proper controls in place to ascertain that the Company's condensed consolidated financial statements properly reflect the change. In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes In August 2020, the FASB issued ASU No. 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity |
Reclassifications | Reclassifications Certain reclassifications have been made to the 2020 consolidated financial statements in order to conform to the 2021 financial statement presentation. |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 9 Months Ended |
Jun. 30, 2021 | |
Discontinued Operations | |
Schedule of discontinued operations | Schedule of discontinued operations BALANCE SHEET As of Cash and cash equivalents 6,110,979 Restricted cash 209,044 Accounts receivable, net 1,279,169 Prepaid expenses and other current assets 369,445 Intangibles, net 855,156 Property and equipment, net 148,922 Security deposits 9,051 Due from affiliates 5,431,853 Accrued liabilities 8,789,203 Other deferred revenue, current portion 51,877 Due to related party 12,676,882 Deferred revenue - Mastercard Program Agreement 13,081,493 Other deferred revenue, net of current portion 69,168 Foreign capital 252,000 Gain from deconsolidation of banQi (20,507,004 ) |
Disposal Groups, Including Discontinued Operations [Table Text Block] | Schedule of discontinued operations Three Months Ended Nine Months Ended June 30, 2021 June 30, 2021 Revenue $ 567,626 $ 1,065,450 Operating expenses: Selling, general and administrative 4,816,514 12,017,284 Total operating expenses 4,816,514 12,017,284 Loss from operations (4,248,888 ) (10,951,835 ) Other (expense) income: Foreign currency transaction loss (39,032 ) — Interest income (expense), net 23,372 99,874 Other (expense) income, net (15,660 ) 99,874 Loss before income taxes (4,264,548 ) (10,851,961 ) Net income (loss) (4,264,548 ) (10,851,961 ) Net loss attributable to non-controlling interest — — Net loss attributable to CarrierEQ, Inc, (4,264,548 ) (10,851,961 ) Other comprehensive loss Foreign currency translation adjustment (527,484 ) (875,085 ) Total comprehensive loss (4,792,032 ) (11,727,046 ) |
Schedule of discontinued operations, previously presented | Schedule of discontinued operations, previously presented September 30, 2020 As previously Reported Adjustment As Revised ASSETS Current assets: Cash and cash equivalents $ 3,272,664 $ 1,614,636 $ 1,658,028 Accounts receivable 857,901 857,901 — Prepaid expenses and other current assets 1,399,878 316,351 1,083,527 Current assets of discontinued operations — (2,788,888 ) 2,788,888 Total current assets 5,530,443 — 5,530,443 Non-current assets: Intangibles, net 4,325,105 33,059 4,292,046 Property and equipment. Net 3,790 3,790 — Security deposits 338,386 18,278 320,108 Lease right of use assets 1,979,658 — 1,979,658 Investment in related affiliate — — — Due from related party 1,400,000 — 1,400,000 Due from affiliates — 4,589,610 (4,589,610 ) Other assets 130,664 130,664 — Non-current assets of discontinued operations — (4,775,401 ) 4,775,401 Total non-current assets 8,177,603 — 8,177,603 Total assets $ 13,708,046 $ — $ 13,708,046 LIABILITIES AND MEMBER'S DEFICIT Current liabilities: Accounts payable 301,003 — 301,003 Accrued liabilities 4,261,009 3,111,495 1,149,514 Other deferred revenue. current portion 58,283 58,283 — AirToken refund liability 163,561 — 163,561 Lease liability, current portion 393,468 — 393,468 Due to related party 1,572,124 1,572,124 — Current liabilities of discontinued operations — (4,741,902 ) 4,741,902 Total current liabilities 6,749,448 — 6,749,448 Long-term liabilities: Deferred revenue - Mastercard Program Agreement 11,520,725 11,520,725 — Deferred gain on issuance of AirTokens for Services 396,790 — 396,790 Lease liability, net of current portion 1,758,196 — 1,758,196 Deferred revenue - AirToken Project 12,529,824 — 12,529,824 Other deferred revenue, net of current portion 81,620 81,620 — Long-term liabilities of discontinued operations — (11,602,345 ) 11,602,345 Total liabilities $ 33,036,603 $ — $ 33,036,603 Carrier EQ, LLC member's deficit: Member's deficit; 1,277,635 limited liability company units outstanding as of June 30, 2021 and September 30, 2020 (20,899,904 ) (10,352,340 ) (10,547,564 ) Accumulated other comprehensive income (loss) — 1,572,382 (1,572,382 ) Accumulated other comprehensive income of discontinued operations 1,572,382 8,779,958 (7,207,576 ) Total member's deficit attributable to Carrier EQ, LLC member (19,327,522 ) — (19,327,522 ) Non-controlling interest in subsidiary (1,035 ) — (1,035 ) Total member's deficit (19,328,557 ) — (19,328,557 ) Total liabilities and member's deficit $ 13,708,046 $ — $ 13,708,046 The effects on the Consolidated Statement of Comprehensive Loss for the three- and nine-month periods ended June 30, 2020 were as follows: Three Months Ended June 30, 2020 Nine Months Ended June 30, 2020 As Previously Reported Adjusted As Revised As Previously Reported Adjusted As Revised Revenue $ 34,576 $ 34,576 — $ 58,407 $ 58,407 — Operating expenses: Cost of revenue 114,839 (114,839 ) — 114,839 (114,839 ) — Selling, general and administrative 6,212,797 1,336,572 5,105,903 16,989,307 4,935,325 12,283,660 Impairment of digital assets — — — — — — Total operating expenses 6,327,636 1,221,733 5,105,903 17,104,146 4,820,486 12,283,660 Loss from operations 6,293,060 1,187,157 5,105,903 17,045,739 4,762,079 12,283,660 Other (expense) income: Realized loss on sale of digital assets — — — (1,392 ) — (1,392 ) Interest income (expense), net 122,861 40,033 82,828 150,015 147,120 2,895 Other (expense) income, net 122,861 40,033 82,828 148,623 147,120 1,503 Loss before income taxes (6,170,199 ) (1,147,124 ) (5,023,075 ) (16,897,116 ) (4,614,959 ) (12,282,157 ) Income tax benefit 47,620 — 47,620 129,661 — 129,661 Loss from Continuing Operations (6,122,579 ) (1,147,124 ) (4,975,455 ) (16,767,455 ) (4,614,959 ) (12,152,496 ) Net income (loss) from discontinued operations — (1,147,124 ) (1,147,124 ) — (4,614,960 ) (4,614,960 ) Net loss (6,122,579 ) (1,147,124 ) (6,122,579 ) (16,767,455 ) (4,614,960 ) (16,767,456 ) Net loss attributable to non-controlling interest (44 ) — (44 ) 461 — 461 Net loss attributable to Carrier EQ, LLC (6,122,623 ) (1,147,124 ) (6,122,623 ) (16,766,994 ) (4,614,960 ) (16,766,995 ) Other comprehensive income Foreign currency translation adjustment 120,645 — 120,645 1,118,914 — 1,118,914 Total comprehensive loss (6,001,978 ) (1,147,124 ) (6,001,978 ) (15,648,080 ) (4,614,960 ) (15,648,081 ) The depreciation, amortization and significant operating noncash items of the discontinued operations were as follows: Three Months Ended Nine Months Ended Depreciation and amortization $ 7,719 $ 29,472 |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets (Tables) | 9 Months Ended |
Jun. 30, 2021 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepaid expenses and other current assets | Prepaid expenses and other current assets June 30, 2021 September 30, 2020 Service contract $ — $ 349,000 Research and Development tax credit 675,627 496,965 Prepaid expense 95,893 237,562 Total Prepaid expenses and other current assets $ 771,520 $ 1,083,527 |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) | 9 Months Ended |
Jun. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets, Net | Intangible Assets, Net June 30, 2021 Estimated Gross Additions Impairment / Accumulated Net Domain names 3 $ 140,012 $ — — $ (123,674 ) $ 16,338 Capitalized software costs towards VV Wallet 3 4,855,125 1,012,937 (736,604 ) (1,836,202 ) 3,295,256 Website 3 282,645 — — (220,893 ) 43,867 Software 3 42,123 — (42,123) — — $ 5,319,905 $ 1,012,937 (778,727 ) $ (2,198,654 ) $ 3,355,461 September 30, 2020 Estimated Gross Additions Accumulated Net Domain names 3 $ 140,012 $ — $ (98,137 ) $ 41,875 Capitalized software costs towards VV Wallet 3 1,500,058 3,355,067 (702,477 ) 4,152,648 Website 3 272,083 10,562 (185,122 ) 97,523 $ 1,912,153 $ 3,365,629 $ (994,800 ) $ 4,292,046 |
Accrued liabilities (Tables)
Accrued liabilities (Tables) | 9 Months Ended |
Jun. 30, 2021 | |
Payables and Accruals [Abstract] | |
Accrued liabilities | Accrued liabilities June 30, September 30, Customer deposits $ — $ — Accrued compensation 378,463 779,114 Other accrued liabilities 183 183 Operating third parties' liabilities — — Accrued accounts payable 160,629 196,609 Tax and licenses — — Credit card payable 16,616 23,261 Legal and professional — 130,347 Total accrued liabilities $ 555,891 $ 1,149,514 |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 9 Months Ended |
Jun. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Stock option valuation assumptions | Stock option valuation assumptions Nine Months Ended June 30, Nine Months Ended Price of Common Stock $ — $ 0.25 0.29 Volatility — % 60 72 Expected term (in years) — 0 – 6.90 Risk free rate — % 1.39 1.74 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Jun. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Lease cost | Lease cost Three Months Ended June 30, 2021 Nine Months Ended June, 2021 Three Months Ended June 30, 2020 Nine Months Ended June, 2020 Components of total lease cost: Operating lease expense $ 214,604 $ 294,133 $ 168,115 $ 504,345 Total lease cost $ 214,604 $ 294,133 $ 168,115 $ 504,345 |
Leases Recorded Balance Sheet | Leases Recorded Balance Sheet As of June 30, 2021 Assets Operating lease right of use assets $ 1,636,515 Total lease assets 1,636,515 Liabilities Current liabilities: Operating lease liability, current portion $ 212,450 Noncurrent liabilities: Operating lease liability, net of current portion 1,601,564 Total lease liability $ 1,814,014 |
Weighted average remaining lease term and weighted average discount rate | Weighted average remaining lease term and weighted average discount rate Weighted average remaining lease term (in years) – operating leases 6.61 % Weighted average discount rate – operating leases 7.50 % |
Future lease payments | Future lease payments Year ending September 30, Operating Leases Remaining 2021 $ 803,668 2022 326,453 2023 333,104 2024 339,755 2025 346,406 2026 353,055 2027 359,714 2028 152,420 Total Minimum Lease Payments $ 2,291,273 Less effects of discounting (477,259 ) Present value of future minimum lease payments $ 1,814,014 |
Organization and Nature of Op_2
Organization and Nature of Operations (Details Narrative) - USD ($) | 6 Months Ended | 9 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2021 | Sep. 30, 2018 | |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||
Organization and nature of operations, description | Pursuant to the terms of the 7th Amendment, the banQi and Lake Niassa (i) increased banQi 's share capital from BRL 1,000,000.00 (one million reais) to BRL 69,870,000.00 (sixty-nine million, eight hundred and seventy thousand reais), which represents an increase of BRL 68,870,000.00 (sixty-eight million, eight hundred and seventy thousand reais); and (ii) issued 68,870,000 (sixty-eight million, eight hundred and seventy thousand) new quotas, with par value of BRL 1.00 (one real) each, fully subscribed and paid up, in Brazilian currency, through the capitalization of Advances for Future Capital Increase ("AFAC") made by Lake Niassa. | ||
AirToken obligation | $ 15,400,000 | ||
Extinguished charged | $ 12,500,000 | ||
Air Token Gmbh [Member] | |||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||
Ownership percentage | 100.00% | ||
Air Fox Brazil [Member] | |||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||
Ownership percentage | 99.99% |
Financial Condition and Manag_2
Financial Condition and Management’s Plans (Details Narrative) - USD ($) | Jun. 30, 2021 | Sep. 30, 2020 | Jun. 30, 2020 | Sep. 30, 2019 |
Financial Condition And Managements Plans | ||||
Cash and Cash Equivalents, at Carrying Value | $ 378,411 | $ 3,272,664 | $ 2,746,009 | $ 5,451,348 |
Working Capital Deficit | 5,400,000 | |||
Members' Equity | $ 1,475,038 | $ 19,327,522 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details Narrative) | Apr. 22, 2020USD ($) | Dec. 28, 2019USD ($) | Dec. 16, 2019USD ($) | Dec. 16, 2019BRL (R$) | Jun. 30, 2021USD ($) | Jun. 30, 2020USD ($) | Oct. 31, 2017USD ($)$ / shares | Jun. 30, 2021USD ($) | Jun. 30, 2020USD ($) | Jul. 31, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||||||||||||
Payments for Ether and Bitcoin | $ 15,300,000 | |||||||||||
Cash obtained for Ether and Bitcoin | 100,000 | |||||||||||
Approved claims paid | $ 33 | |||||||||||
Unpaid amount | $ 200,000 | |||||||||||
Deferred revenue - AirToken Project | $ 12,529,824 | |||||||||||
Prepayment Incentive Agreement | $ 16,000,000 | |||||||||||
Sales incentives earned | 343,000 | $ 3,085 | 10,000 | $ 6,802 | ||||||||
Interchange fee revenue | 94,000 | 3,085 | 66,000 | 6,802 | ||||||||
Upfront payment revenue | 159,000 | 12,100 | 202 | 24,900 | ||||||||
Security deposit returned | $ 1,200,000 | |||||||||||
Upfront payment Phase I | 300,000 | |||||||||||
Investment | $ 252,000 | $ 252,000 | ||||||||||
Ownership percentage | 1.43% | 1.43% | ||||||||||
Due to related party | $ 5,500,000 | $ 5,500,000 | ||||||||||
Effect of Exchange Variance | 92,000 | 47,000 | ||||||||||
Amortization expense | 1,213,738 | 569,951 | ||||||||||
Capitalized software costs | 3,295,256 | |||||||||||
Advertising costs | 700,000 | $ 29,000 | 179,000 | $ 75,000 | ||||||||
Deferred gain on fair value of AirTokens | $ 1,700,000 | |||||||||||
Last price paid by investors | $ / shares | $ 0.02 | |||||||||||
Right of use asset | 1,636,515 | 1,636,515 | $ 1,979,658 | $ 2,300,000 | ||||||||
Operating lease liability | 1,814,014 | 1,814,014 | $ 2,400,000 | |||||||||
Via Varejo Services Agreement [Member] | ||||||||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||||||||||||
Amortization expense | 400,000 | 1,400,000 | ||||||||||
V V Wallet [Member] | ||||||||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||||||||||||
Security deposits | $ 281,000 | $ 281,000 | ||||||||||
Brazil, Brazil Real | ||||||||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||||||||||||
Prepayment Incentive Agreement | R$ | R$ 65000000 | |||||||||||
Air Token Gmbh [Member] | ||||||||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||||||||||||
Ownership percentage | 100.00% | |||||||||||
Ban Qi [Member] | ||||||||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||||||||||||
Ownership percentage | 1.43% |
Discontinued Operations (Detail
Discontinued Operations (Details) - USD ($) | Jun. 30, 2021 | Jun. 14, 2021 | Sep. 30, 2020 | Jun. 30, 2020 | Sep. 30, 2019 |
Entity Listings [Line Items] | |||||
Cash and cash equivalents | $ 378,411 | $ 3,272,664 | $ 2,746,009 | $ 5,451,348 | |
Accounts receivable, net | 1,118 | ||||
Prepaid expenses and other current assets | 771,520 | 1,083,527 | |||
Intangibles, net | 3,355,461 | 4,292,046 | |||
Accrued liabilities | 555,891 | 1,149,514 | |||
Due to related party | $ 5,514,493 | ||||
Ban Qi [Member] | |||||
Entity Listings [Line Items] | |||||
Cash and cash equivalents | $ 6,110,979 | ||||
Restricted cash | 209,044 | ||||
Accounts receivable, net | 1,279,169 | ||||
Prepaid expenses and other current assets | 369,445 | ||||
Intangibles, net | 855,156 | ||||
Property and equipment, net | 148,922 | ||||
Security deposits | 9,051 | ||||
Due from affiliates | 5,431,853 | ||||
Accrued liabilities | 8,789,203 | ||||
Other deferred revenue, current portion | 51,877 | ||||
Due to related party | 12,676,882 | ||||
Deferred revenue - Mastercard Program Agreement | 13,081,493 | ||||
Other deferred revenue, net of current portion | 69,168 | ||||
Foreign capital | 252,000 | ||||
Gain from deconsolidation of banQi | $ (20,507,004) |
Discontinued Operations (Deta_2
Discontinued Operations (Details 1) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Revenue | ||||
Operating expenses: | ||||
Selling, general and administrative | 2,046,330 | 5,105,903 | 7,714,303 | 12,283,660 |
Total operating expenses | 2,046,330 | 5,105,903 | 7,714,303 | 12,283,660 |
Loss from operations | (2,046,330) | (5,105,903) | (7,714,303) | (12,283,660) |
Other (expense) income: | ||||
Foreign currency transaction loss | (507,761) | (418,604) | ||
Interest income (expense), net | (17,252) | 82,828 | 92,251 | 2,896 |
Other (expense) income, net | 12,453,871 | 82,828 | 12,652,531 | 1,504 |
Loss before income taxes | 10,407,541 | (5,023,075) | 4,938,228 | (12,282,156) |
Net income (loss) | (4,264,548) | (1,147,124) | (10,851,961) | (4,614,960) |
Net loss attributable to non-controlling interest | (1,693) | (44) | (1,035) | (461) |
Net loss attributable to CarrierEQ, Inc, | 6,141,300 | (6,122,623) | (5,736,106) | (16,766,994) |
Other comprehensive loss | ||||
Foreign currency translation adjustment | (527,484) | 120,645 | (875,085) | 1,118,914 |
Total comprehensive loss | 5,613,816 | $ (6,001,978) | (6,611,191) | $ (15,648,080) |
Discontinued Operations [Member] | ||||
Revenue | 567,626 | 1,065,450 | ||
Operating expenses: | ||||
Selling, general and administrative | 4,816,514 | 12,017,284 | ||
Total operating expenses | 4,816,514 | 12,017,284 | ||
Loss from operations | (4,248,888) | (10,951,835) | ||
Other (expense) income: | ||||
Foreign currency transaction loss | (39,032) | 0 | ||
Interest income (expense), net | 23,372 | 99,874 | ||
Other (expense) income, net | (15,660) | 99,874 | ||
Loss before income taxes | (4,264,548) | (10,851,961) | ||
Net income (loss) | (4,264,548) | (10,851,961) | ||
Net loss attributable to non-controlling interest | ||||
Net loss attributable to CarrierEQ, Inc, | (4,264,548) | (10,851,961) | ||
Other comprehensive loss | ||||
Foreign currency translation adjustment | (527,484) | (875,085) | ||
Total comprehensive loss | $ (4,792,032) | $ (11,727,046) |
Discontinued Operations (Deta_3
Discontinued Operations (Details 2) - USD ($) | 3 Months Ended | 9 Months Ended | ||||||||
Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Jun. 30, 2021 | Jun. 30, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | |
Current assets: | ||||||||||
Cash and cash equivalents | $ 378,411 | $ 2,746,009 | $ 378,411 | $ 2,746,009 | $ 3,272,664 | $ 5,451,348 | ||||
Accounts receivable | 1,118 | 1,118 | ||||||||
Prepaid expenses and other current assets | 771,520 | 771,520 | 1,083,527 | |||||||
Current assets of discontinued operations | 2,788,888 | |||||||||
Total current assets | 1,151,049 | 1,151,049 | 5,530,443 | |||||||
Non-current assets: | ||||||||||
Intangibles, net | 3,355,461 | 3,355,461 | 4,292,046 | |||||||
Security deposits | 280,616 | 280,616 | 320,108 | |||||||
Lease right of use assets | 1,636,515 | 1,636,515 | 1,979,658 | $ 2,300,000 | ||||||
Investment in related affiliate | 252,000 | 252,000 | ||||||||
Due from related party | 1,400,000 | |||||||||
Due from affiliates | (4,589,610) | |||||||||
Non-current assets of discontinued operations | 4,775,401 | |||||||||
Total non-current assets | 5,524,592 | 5,524,592 | 8,177,603 | |||||||
Total assets | 6,675,641 | 6,675,641 | 13,708,046 | |||||||
Current liabilities: | ||||||||||
Accounts payable | 151,237 | 151,237 | 301,003 | |||||||
Accrued liabilities | 555,891 | 555,891 | 1,149,514 | |||||||
AirToken refund liability | 115,044 | 115,044 | 163,561 | |||||||
Lease liability, current portion | 212,450 | 212,450 | 393,468 | |||||||
Due to related party | 5,514,493 | 5,514,493 | ||||||||
Current liabilities of discontinued operations | 4,741,902 | |||||||||
Total current liabilities | 6,549,115 | 6,549,115 | 6,749,448 | |||||||
Long-term liabilities: | ||||||||||
Deferred gain on issuance of AirTokens for Services | 396,790 | |||||||||
Lease liability, net of current portion | 1,601,564 | 1,601,564 | 1,758,196 | |||||||
Deferred revenue - AirToken Project | 12,529,824 | |||||||||
Long-term liabilities of discontinued operations | 11,602,345 | |||||||||
Total liabilities | 8,150,679 | 8,150,679 | 33,036,603 | |||||||
Carrier EQ, LLC member's deficit: | ||||||||||
Member's deficit; 1,277,635 limited liability company units outstanding as of June 30, 2021 and September 30, 2020 | (1,475,038) | (1,475,038) | (20,899,904) | |||||||
Accumulated other comprehensive income of discontinued operations | 1,572,382 | |||||||||
Total member's deficit attributable to Carrier EQ, LLC member | (1,475,038) | (1,475,038) | (19,327,522) | |||||||
Non-controlling interest in subsidiary | (1,035) | |||||||||
Total member's deficit | (1,475,038) | (1,475,038) | (19,328,557) | |||||||
Total liabilities and member's deficit | 6,675,641 | 6,675,641 | 13,708,046 | |||||||
Revenue | ||||||||||
Operating expenses: | ||||||||||
Cost of revenue | ||||||||||
Selling, general and administrative | 2,046,330 | 5,105,903 | 7,714,303 | 12,283,660 | ||||||
Total operating expenses | 2,046,330 | 5,105,903 | 7,714,303 | 12,283,660 | ||||||
Loss from operations | (2,046,330) | (5,105,903) | (7,714,303) | (12,283,660) | ||||||
Other (expense) income: | ||||||||||
Realized loss on sale of digital assets | (1,392) | |||||||||
Interest income (expense), net | (17,252) | 82,828 | 92,251 | 2,896 | ||||||
Other (expense) income, net | 12,453,871 | 82,828 | 12,652,531 | 1,504 | ||||||
Loss before income taxes | 10,407,541 | (5,023,075) | 4,938,228 | (12,282,156) | ||||||
Income tax benefit | 47,620 | 178,662 | 129,661 | |||||||
Loss from Continuing Operations | 10,407,541 | (4,975,455) | 5,116,890 | (12,152,495) | ||||||
Net loss from discontinued operations | (4,264,548) | (1,147,124) | (10,851,961) | (4,614,960) | ||||||
Net loss | 6,141,300 | $ (4,978,019) | $ (6,899,387) | (6,122,623) | $ (5,452,681) | $ (5,191,690) | ||||
Net loss attributable to non-controlling interest | (1,693) | (44) | (1,035) | (461) | ||||||
Net loss attributable to Carrier EQ, LLC | 6,141,300 | (6,122,623) | (5,736,106) | (16,766,994) | ||||||
Other comprehensive income | ||||||||||
Foreign currency translation adjustment | (527,484) | 120,645 | (875,085) | 1,118,914 | ||||||
Total comprehensive loss | 5,613,816 | (6,001,978) | (6,611,191) | (15,648,080) | ||||||
Previously Reported [Member] | ||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | 3,272,664 | |||||||||
Accounts receivable | 857,901 | |||||||||
Prepaid expenses and other current assets | 1,399,878 | |||||||||
Current assets of discontinued operations | ||||||||||
Total current assets | 5,530,443 | |||||||||
Non-current assets: | ||||||||||
Intangibles, net | 4,325,105 | |||||||||
Property and equipment. Net | 3,790 | |||||||||
Security deposits | 338,386 | |||||||||
Lease right of use assets | 1,979,658 | |||||||||
Investment in related affiliate | ||||||||||
Due from related party | 1,400,000 | |||||||||
Due from affiliates | ||||||||||
Other assets | 130,664 | |||||||||
Non-current assets of discontinued operations | ||||||||||
Total non-current assets | 8,177,603 | |||||||||
Total assets | 13,708,046 | |||||||||
Current liabilities: | ||||||||||
Accounts payable | 301,003 | |||||||||
Accrued liabilities | 4,261,009 | |||||||||
Other deferred revenue. current portion | 58,283 | |||||||||
AirToken refund liability | 163,561 | |||||||||
Lease liability, current portion | 393,468 | |||||||||
Due to related party | 1,572,124 | |||||||||
Current liabilities of discontinued operations | ||||||||||
Total current liabilities | 6,749,448 | |||||||||
Long-term liabilities: | ||||||||||
Deferred revenue - Mastercard Program Agreement | 11,520,725 | |||||||||
Deferred gain on issuance of AirTokens for Services | 396,790 | |||||||||
Lease liability, net of current portion | 1,758,196 | |||||||||
Deferred revenue - AirToken Project | 12,529,824 | |||||||||
Other deferred revenue, net of current portion | 81,620 | |||||||||
Long-term liabilities of discontinued operations | ||||||||||
Total liabilities | 33,036,603 | |||||||||
Carrier EQ, LLC member's deficit: | ||||||||||
Member's deficit; 1,277,635 limited liability company units outstanding as of June 30, 2021 and September 30, 2020 | (20,899,904) | |||||||||
Accumulated other comprehensive income (loss) | ||||||||||
Accumulated other comprehensive income of discontinued operations | 1,572,382 | |||||||||
Total member's deficit attributable to Carrier EQ, LLC member | (19,327,522) | |||||||||
Non-controlling interest in subsidiary | (1,035) | |||||||||
Total member's deficit | (19,328,557) | |||||||||
Total liabilities and member's deficit | 13,708,046 | |||||||||
Revenue | 34,576 | 58,407 | ||||||||
Operating expenses: | ||||||||||
Cost of revenue | 114,839 | 114,839 | ||||||||
Selling, general and administrative | 6,212,797 | 16,989,307 | ||||||||
Impairment of digital assets | ||||||||||
Total operating expenses | 6,327,636 | 17,104,146 | ||||||||
Loss from operations | 6,293,060 | 17,045,739 | ||||||||
Other (expense) income: | ||||||||||
Realized loss on sale of digital assets | (1,392) | |||||||||
Interest income (expense), net | 122,861 | 150,015 | ||||||||
Other (expense) income, net | 122,861 | 148,623 | ||||||||
Loss before income taxes | (6,170,199) | (16,897,116) | ||||||||
Income tax benefit | (47,620) | (129,661) | ||||||||
Loss from Continuing Operations | (6,122,579) | (16,767,455) | ||||||||
Net loss from discontinued operations | ||||||||||
Net loss | (6,122,579) | (16,767,455) | ||||||||
Net loss attributable to non-controlling interest | (44) | 461 | ||||||||
Net loss attributable to Carrier EQ, LLC | (6,122,623) | (16,766,994) | ||||||||
Other comprehensive income | ||||||||||
Foreign currency translation adjustment | 120,645 | 1,118,914 | ||||||||
Total comprehensive loss | (6,001,978) | (15,648,080) | ||||||||
Depreciation and amortization | $ 7,719 | $ 29,472 | ||||||||
Revision of Prior Period, Adjustment [Member] | ||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | 1,614,636 | |||||||||
Accounts receivable | 857,901 | |||||||||
Prepaid expenses and other current assets | 316,351 | |||||||||
Current assets of discontinued operations | (2,788,888) | |||||||||
Total current assets | ||||||||||
Non-current assets: | ||||||||||
Intangibles, net | 33,059 | |||||||||
Property and equipment. Net | 3,790 | |||||||||
Security deposits | 18,278 | |||||||||
Lease right of use assets | ||||||||||
Investment in related affiliate | ||||||||||
Due from related party | ||||||||||
Due from affiliates | 4,589,610 | |||||||||
Other assets | 130,664 | |||||||||
Non-current assets of discontinued operations | (4,775,401) | |||||||||
Total non-current assets | ||||||||||
Total assets | ||||||||||
Current liabilities: | ||||||||||
Accounts payable | ||||||||||
Accrued liabilities | 3,111,495 | |||||||||
Other deferred revenue. current portion | 58,283 | |||||||||
AirToken refund liability | ||||||||||
Lease liability, current portion | ||||||||||
Due to related party | 1,572,124 | |||||||||
Current liabilities of discontinued operations | (4,741,902) | |||||||||
Total current liabilities | ||||||||||
Long-term liabilities: | ||||||||||
Deferred revenue - Mastercard Program Agreement | 11,520,725 | |||||||||
Deferred gain on issuance of AirTokens for Services | ||||||||||
Lease liability, net of current portion | ||||||||||
Deferred revenue - AirToken Project | ||||||||||
Other deferred revenue, net of current portion | 81,620 | |||||||||
Long-term liabilities of discontinued operations | (11,602,345) | |||||||||
Total liabilities | ||||||||||
Carrier EQ, LLC member's deficit: | ||||||||||
Member's deficit; 1,277,635 limited liability company units outstanding as of June 30, 2021 and September 30, 2020 | (10,352,340) | |||||||||
Accumulated other comprehensive income (loss) | 1,572,382 | |||||||||
Accumulated other comprehensive income of discontinued operations | 8,779,958 | |||||||||
Total member's deficit attributable to Carrier EQ, LLC member | ||||||||||
Non-controlling interest in subsidiary | ||||||||||
Total member's deficit | ||||||||||
Total liabilities and member's deficit | ||||||||||
Revenue | 34,576 | 58,407 | ||||||||
Operating expenses: | ||||||||||
Cost of revenue | (114,839) | (114,839) | ||||||||
Selling, general and administrative | 1,336,572 | 4,935,325 | ||||||||
Impairment of digital assets | ||||||||||
Total operating expenses | 1,221,733 | 4,820,486 | ||||||||
Loss from operations | 1,187,157 | 4,762,079 | ||||||||
Other (expense) income: | ||||||||||
Realized loss on sale of digital assets | ||||||||||
Interest income (expense), net | 40,033 | 147,120 | ||||||||
Other (expense) income, net | 40,033 | 147,120 | ||||||||
Loss before income taxes | (1,147,124) | (4,614,959) | ||||||||
Income tax benefit | ||||||||||
Loss from Continuing Operations | (1,147,124) | (4,614,959) | ||||||||
Net loss from discontinued operations | (1,147,124) | (4,614,960) | ||||||||
Net loss | (1,147,124) | (4,614,960) | ||||||||
Net loss attributable to non-controlling interest | ||||||||||
Net loss attributable to Carrier EQ, LLC | (1,147,124) | (4,614,960) | ||||||||
Other comprehensive income | ||||||||||
Foreign currency translation adjustment | ||||||||||
Total comprehensive loss | (1,147,124) | (4,614,960) | ||||||||
As Revised [Member] | ||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | 1,658,028 | |||||||||
Accounts receivable | ||||||||||
Prepaid expenses and other current assets | 1,083,527 | |||||||||
Current assets of discontinued operations | 2,788,888 | |||||||||
Total current assets | 5,530,443 | |||||||||
Non-current assets: | ||||||||||
Intangibles, net | 4,292,046 | |||||||||
Property and equipment. Net | ||||||||||
Security deposits | 320,108 | |||||||||
Lease right of use assets | 1,979,658 | |||||||||
Investment in related affiliate | ||||||||||
Due from related party | 1,400,000 | |||||||||
Due from affiliates | (4,589,610) | |||||||||
Other assets | ||||||||||
Non-current assets of discontinued operations | 4,775,401 | |||||||||
Total non-current assets | 8,177,603 | |||||||||
Total assets | 13,708,046 | |||||||||
Current liabilities: | ||||||||||
Accounts payable | 301,003 | |||||||||
Accrued liabilities | 1,149,514 | |||||||||
Other deferred revenue. current portion | ||||||||||
AirToken refund liability | 163,561 | |||||||||
Lease liability, current portion | 393,468 | |||||||||
Due to related party | ||||||||||
Current liabilities of discontinued operations | 4,741,902 | |||||||||
Total current liabilities | 6,749,448 | |||||||||
Long-term liabilities: | ||||||||||
Deferred revenue - Mastercard Program Agreement | ||||||||||
Deferred gain on issuance of AirTokens for Services | 396,790 | |||||||||
Lease liability, net of current portion | 1,758,196 | |||||||||
Deferred revenue - AirToken Project | 12,529,824 | |||||||||
Other deferred revenue, net of current portion | ||||||||||
Long-term liabilities of discontinued operations | 11,602,345 | |||||||||
Total liabilities | 33,036,603 | |||||||||
Carrier EQ, LLC member's deficit: | ||||||||||
Member's deficit; 1,277,635 limited liability company units outstanding as of June 30, 2021 and September 30, 2020 | (10,547,564) | |||||||||
Accumulated other comprehensive income (loss) | (1,572,382) | |||||||||
Accumulated other comprehensive income of discontinued operations | (7,207,576) | |||||||||
Total member's deficit attributable to Carrier EQ, LLC member | (19,327,522) | |||||||||
Non-controlling interest in subsidiary | (1,035) | |||||||||
Total member's deficit | (19,328,557) | |||||||||
Total liabilities and member's deficit | $ 13,708,046 | |||||||||
Revenue | ||||||||||
Operating expenses: | ||||||||||
Cost of revenue | ||||||||||
Selling, general and administrative | 5,105,903 | 12,283,660 | ||||||||
Impairment of digital assets | ||||||||||
Total operating expenses | 5,105,903 | 12,283,660 | ||||||||
Loss from operations | 5,105,903 | 12,283,660 | ||||||||
Other (expense) income: | ||||||||||
Realized loss on sale of digital assets | (1,392) | |||||||||
Interest income (expense), net | 82,828 | 2,895 | ||||||||
Other (expense) income, net | 82,828 | 1,503 | ||||||||
Loss before income taxes | (5,023,075) | (12,282,157) | ||||||||
Income tax benefit | (47,620) | (129,661) | ||||||||
Loss from Continuing Operations | (4,975,455) | (12,152,496) | ||||||||
Net loss from discontinued operations | (1,147,124) | (4,614,960) | ||||||||
Net loss | (6,122,579) | (16,767,456) | ||||||||
Net loss attributable to non-controlling interest | (44) | 461 | ||||||||
Net loss attributable to Carrier EQ, LLC | (6,122,623) | (16,766,995) | ||||||||
Other comprehensive income | ||||||||||
Foreign currency translation adjustment | 120,645 | 1,118,914 | ||||||||
Total comprehensive loss | $ (6,001,978) | $ (15,648,081) |
Mastercard Program Agreement (D
Mastercard Program Agreement (Details Narrative) | Dec. 16, 2019USD ($) | Dec. 16, 2019BRL (R$) | Jun. 30, 2021USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2021USD ($) | Jun. 30, 2020USD ($) |
Prepayment Incentive Agreement | $ 16,000,000 | |||||
Sales incentives | $ 343,000 | $ 429 | $ 10,000 | $ 6,000 | ||
Brazil, Brazil Real | ||||||
Prepayment Incentive Agreement | R$ | R$ 65000000 |
Prepaid Expenses and Other Cu_3
Prepaid Expenses and Other Current Assets (Details) - USD ($) | Jun. 30, 2021 | Sep. 30, 2020 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Service contract | $ 349,000 | |
Research and Development tax credit | 675,627 | 496,965 |
Prepaid expense | 95,893 | 237,562 |
Total Prepaid expenses and other current assets | $ 771,520 | $ 1,083,527 |
Intangible Assets, Net (Details
Intangible Assets, Net (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Sep. 30, 2020 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross | $ 5,319,905 | $ 1,912,153 |
Additions | 1,012,937 | 3,365,629 |
Impairment | (778,727) | |
Accumulated amortization | (2,198,654) | (994,800) |
Net Carrying Value | $ 3,355,461 | $ 4,292,046 |
Internet Domain Names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful life | 3 years | 3 years |
Gross | $ 140,012 | $ 140,012 |
Additions | ||
Impairment | ||
Accumulated amortization | (123,674) | (98,137) |
Net Carrying Value | $ 16,338 | $ 41,875 |
In Process Research and Development [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful life | 3 years | 3 years |
Gross | $ 4,855,125 | $ 1,500,058 |
Additions | 1,012,937 | 3,355,067 |
Impairment | (736,604) | |
Accumulated amortization | (1,836,202) | (702,477) |
Net Carrying Value | $ 3,295,256 | $ 4,152,648 |
Website [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful life | 3 years | 3 years |
Gross | $ 282,645 | $ 272,083 |
Additions | 10,562 | |
Impairment | ||
Accumulated amortization | (220,893) | (185,122) |
Net Carrying Value | $ 43,867 | $ 97,523 |
Computer Software, Intangible Asset [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful life | 3 years | |
Gross | $ 42,123 | |
Additions | ||
Impairment | (42,123) | |
Accumulated amortization | ||
Net Carrying Value |
Intangible Assets, Net (Detai_2
Intangible Assets, Net (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense | $ 400,000 | $ 300,000 | $ 1,200,000 | $ 600,000 |
Impairment | $ 700,000 | |||
Effect of deconsolidation | $ 42,100 |
Accrued liabilities (Details)
Accrued liabilities (Details) - USD ($) | Jun. 30, 2021 | Sep. 30, 2020 |
Payables and Accruals [Abstract] | ||
Customer deposits | ||
Accrued compensation | 378,463 | 779,114 |
Other accrued liabilities | 183 | 183 |
Operating third parties' liabilities | ||
Accrued accounts payable | 160,629 | 196,609 |
Tax and licenses | ||
Credit card payable | 16,616 | 23,261 |
Legal and professional | 130,347 | |
Total accrued liabilities | $ 555,891 | $ 1,149,514 |
Preferred Stock (Details Narrat
Preferred Stock (Details Narrative) - shares | May 21, 2020 | Jul. 15, 2016 | Jan. 25, 2016 |
Class of Stock [Line Items] | |||
Stock sold | 497,873 | ||
Convertible Preferred Stock Series One [Member] | |||
Class of Stock [Line Items] | |||
Stock sold | 2,652,072 | ||
Stock cancelled | 2,652,072 | ||
Convertible Preferred Stock Series Onea [Member] | |||
Class of Stock [Line Items] | |||
Stock sold | 1,046,147 | ||
Stock cancelled | 1,046,146 |
Common Stock (Details Narrative
Common Stock (Details Narrative) - USD ($) | May 21, 2020 | Feb. 28, 2018 | Jan. 25, 2016 |
Common Stock | |||
Stock shares sold | 497,873 | ||
Stock sold | $ 20,000 | ||
Purchase of treasury stock shares | 414,893 | ||
Purchase of treasury stock | $ 200,000 | ||
Common stock cancelled | 25,265,794 |
Stock Based Compensation (Detai
Stock Based Compensation (Details) - $ / shares | 9 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Price of Common Stock | ||
Volatility | ||
Risk free interest rate | ||
Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Price of Common Stock | $ 0.25 | |
Volatility | 60.00% | |
Risk free interest rate | 1.39% | |
Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Price of Common Stock | $ 0.29 | |
Volatility | 72.00% | |
Expected term (in years) | 6 years 10 months 24 days | |
Risk free interest rate | 1.74% |
Stock Based Compensation (Det_2
Stock Based Compensation (Details Narrative) - USD ($) | May 21, 2020 | Feb. 26, 2020 | Feb. 06, 2020 | Feb. 03, 2020 | May 21, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Sep. 30, 2019 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Common stock authorized under plan | 2,676,126 | 2,834,837 | ||||||||
Accelerated vested shares | 277,564 | 149,564 | 751,849 | |||||||
Fair value of stock | $ 0.29 | |||||||||
Unrecognized compensation | $ 100,000 | $ 100,000 | ||||||||
Lump sum cash payment | 3,300,000 | |||||||||
Original fair value of the stock options | $ 200,000 | |||||||||
Additional stock based compensation | $ 3,100,000 | |||||||||
Outstanding | 0 | 0 | ||||||||
Issued | 0 | |||||||||
Compensation expense | $ 325,582 | |||||||||
Equity Option [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Compensation expense | $ 0 | $ 3,200,000 | 0 | 3,400,000 | ||||||
Phantom Share Units (PSUs) [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Compensation expense | $ 0 | $ 0 | $ 0 | $ 0 |
Concentrations (Details Narrati
Concentrations (Details Narrative) | 9 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Sep. 30, 2020 | |
Liabilities, Total [Member] | ||
Concentration Risk [Line Items] | ||
Percentage | 99.00% | 85.00% |
Commitments and Contingencies_2
Commitments and Contingencies (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | ||||
Operating lease expense | $ 214,604 | $ 168,115 | $ 294,133 | $ 504,345 |
Total lease cost | $ 214,604 | $ 168,115 | $ 294,133 | $ 504,345 |
Commitments and Contingencies_3
Commitments and Contingencies (Details 1) - USD ($) | Jun. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 |
Commitments and Contingencies Disclosure [Abstract] | |||
Operating lease right of use assets | $ 1,636,515 | $ 1,979,658 | $ 2,300,000 |
Lease liability, current portion | 212,450 | 393,468 | |
Lease liability, net of current portion | 1,601,564 | $ 1,758,196 | |
Total lease liability | $ 1,814,014 | $ 2,400,000 |
Commitments and Contingencies_4
Commitments and Contingencies (Details 2) | Jun. 30, 2021 |
Commitments and Contingencies Disclosure [Abstract] | |
Weighted average remaining lease term (in years) - operating leases | 6 years 7 months 9 days |
Weighted average discount rate - operating leases | 7.50% |
Commitments and Contingencies_5
Commitments and Contingencies (Details 3) - USD ($) | Jun. 30, 2021 | Sep. 30, 2019 |
Commitments and Contingencies Disclosure [Abstract] | ||
Remaining 2021 | $ 803,668 | |
2022 | 326,453 | |
2023 | 333,104 | |
2024 | 339,755 | |
2025 | 346,406 | |
2026 | 353,055 | |
2027 | 359,714 | |
2028 | 152,420 | |
Total Minimum Lease Payments | 2,291,273 | |
Less effects of discounting | (477,259) | |
Present value of future minimum lease payments | $ 1,814,014 | $ 2,400,000 |
Commitments and Contingencies_6
Commitments and Contingencies (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2021 | Oct. 31, 2017 | Jun. 30, 2021 | Sep. 30, 2020 | Nov. 16, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |||||
Incremental borrowing rate lease one | 7.52% | ||||
Incremental borrowing rate lease two | 5.73% | ||||
Incremental borrowing rate lease three | 9.68% | ||||
Sublease income | $ 0 | $ 0 | |||
Capital raised sale of AirTokens | $ 15,000,000 | ||||
Penalties to the SEC | $ 300,000 | ||||
AirToken refunds not paid | $ 200,000 | ||||
Penalties Commonwealth of Massachusetts | $ 100,000 |
Related Party Transaction (Deta
Related Party Transaction (Details Narrative) | 9 Months Ended |
Jun. 30, 2021USD ($) | |
Related Party Transactions [Abstract] | |
Upfront payment for software development services | $ 32,300 |
Transactional fees | $ 361,900 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) | Jul. 08, 2021USD ($) |
Subsequent Event [Member] | |
Subsequent Event [Line Items] | |
Proceeds from Contributed Capital | $ 480,000 |