Cover
Cover - USD ($) | 12 Months Ended | ||
Sep. 30, 2023 | Jan. 11, 2024 | Mar. 31, 2023 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Sep. 30, 2023 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2023 | ||
Current Fiscal Year End Date | --09-30 | ||
Entity File Number | 001-40334 | ||
Entity Registrant Name | EBET, Inc. | ||
Entity Central Index Key | 0001829966 | ||
Entity Tax Identification Number | 85-3201309 | ||
Entity Incorporation, State or Country Code | NV | ||
Entity Address, Address Line One | 3960 Howard Hughes Parkway, Suite 500 | ||
Entity Address, City or Town | Las Vegas | ||
Entity Address, State or Province | NV | ||
Entity Address, Postal Zip Code | 89169 | ||
City Area Code | (888) | ||
Local Phone Number | 411-2726 | ||
Title of 12(g) Security | Common Stock, par value $0.001 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Elected Not To Use the Extended Transition Period | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 5,189,593 | ||
Entity Common Stock, Shares Outstanding | 14,979,642 | ||
ICFR Auditor Attestation Flag | false | ||
Document Financial Statement Error Correction [Flag] | false | ||
Auditor Name | BF Borgers CPA PC | ||
Auditor Firm ID | 5041 | ||
Auditor Location | Lakewood, CO |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2023 | Sep. 30, 2022 |
Current assets: | ||
Cash | $ 304,709 | $ 5,486,210 |
Accounts receivable, net | 643,254 | 1,647,345 |
Prepaid expenses and other current assets | 1,331,201 | 1,772,332 |
Derivative asset | 0 | 1,116,153 |
Right of use asset, operating lease, current portion | 0 | 129,975 |
Total current assets | 2,279,164 | 10,152,015 |
Long term assets: | ||
Fixed assets, net | 161,213 | 546,408 |
Intangible assets, net | 3,701,609 | 27,545,329 |
Goodwill | 8,962,652 | 30,657,460 |
Total assets | 15,104,638 | 68,901,212 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 22,775,031 | 14,273,249 |
Current lease liabilities | 0 | 129,974 |
Borrowings, current portion | 39,252,130 | 21,202,585 |
Liabilities to users | 937,948 | 1,272,308 |
Total current liabilities | 62,965,109 | 36,878,116 |
Long-Term Liabilities: | ||
Borrowings, net of current portion | 559,597 | 10,257,520 |
Total liabilities | 63,524,706 | 47,135,636 |
COMMITMENTS AND CONTINGENCIES | ||
Stockholders' equity (deficit): | ||
Preferred Stock, $0.001 par value, 10,000,000 shares authorized, 0 and 37,700 issued and outstanding as of September 30, 2023 and 2022, respectively | 0 | 38 |
Common Stock; $0.001 par value, 500,000,000 shares authorized 14,979,642 and 555,153 shares issued and outstanding as of September 30, 2023 and 2022, respectively | 14,980 | 555 |
Additional paid-in capital | 103,255,793 | 91,957,856 |
Accumulated other comprehensive (deficit) income | (532,401) | (7,365,129) |
Accumulated deficit | (151,158,440) | (62,827,744) |
Total stockholders’ equity (deficit) | (48,420,068) | 21,765,576 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) | $ 15,104,638 | $ 68,901,212 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2023 | Sep. 30, 2022 |
Statement of Financial Position [Abstract] | ||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | |
Preferred Stock, Shares Authorized | 10,000,000 | |
Preferred Stock, Shares Outstanding | 0 | 37,700 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 14,979,642 | 555,153 |
Common stock, shares outstanding | 14,979,642 | 555,153 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Income Statement [Abstract] | ||
Revenue | $ 39,177,504 | $ 58,596,620 |
Cost of revenue | (21,974,147) | (36,014,055) |
Gross profit | 17,203,357 | 22,582,565 |
Operating expenses: | ||
Sales and marketing expenses | 10,743,972 | 27,500,618 |
General and administrative expenses | 26,100,283 | 17,640,728 |
Product and technology expenses | 1,149,717 | 3,993,846 |
Impairment loss | 44,917,891 | 3,851,503 |
Acquisition costs | 0 | 2,240,147 |
Total operating expenses | 82,911,863 | 55,226,842 |
Loss from operations | (65,708,506) | (32,644,277) |
Other income (expenses): | ||
Interest expense | (17,113,413) | (9,894,531) |
Gain (loss) on derivative instruments | (142,187) | 1,239,510 |
Fair value of warrant liability | 1,114,925 | 0 |
Foreign currency loss | (2,394,696) | (128,311) |
Total other expense | (18,535,371) | (8,783,332) |
Loss before provision for income taxes | (84,243,877) | (41,427,609) |
Provision for income taxes | 0 | 0 |
Net loss | (84,243,877) | (41,427,609) |
Preferred stock dividends | (4,086,819) | (4,750,585) |
Net loss attributable to common shareholders | (88,330,696) | (46,178,194) |
Other comprehensive income: | ||
Foreign currency translation income (loss) | 6,832,727 | (7,419,040) |
Total other comprehensive income | 6,832,727 | (7,419,040) |
Comprehensive loss | $ (81,497,969) | $ (53,597,234) |
CONSOLIDATED STATEMENTS OF OP_2
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Parenthetical) - $ / shares | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Income Statement [Abstract] | ||
Net loss per common share - basic | $ (32.23) | $ (93.35) |
Net loss per common share - diluted | $ (32.23) | $ (93.35) |
Weighted average common shares outstanding - basic | 2,740,990 | 494,655 |
Weighted average common shares outstanding - diluted | 2,740,990 | 494,655 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT) - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | AOCI Attributable to Parent [Member] | Retained Earnings [Member] | Total |
Beginning balance, value at Sep. 30, 2021 | $ 0 | $ 444 | $ 26,847,225 | $ 53,911 | $ (16,649,550) | $ 10,252,030 |
Beginning balance, shares at Sep. 30, 2021 | 0 | 443,848 | ||||
Shares and warrants issued for cash, net | $ 32 | 3,492,418 | 3,492,450 | |||
Shares and warrants issued for cash, net, shares | 32,587 | |||||
Preferred shares issued for cash, net | $ 38 | 33,515,962 | 33,516,000 | |||
Preferred shares issued for cash, net, shares | 37,700 | |||||
Shares issued to for acquisition of Aspire B2C business | $ 6 | 5,665,364 | 5,665,370 | |||
Shares issued to for acquisition of Aspire B2C business, shares | 6,228 | |||||
Cashless exercise of warrants | $ 29 | (29) | ||||
Cashless exercise of warrants, shares | 28,643 | |||||
Shares issued for conversion of borrowings | $ 28 | 412,472 | 412,500 | |||
Shares issued for conversion of borrowings, shares | 27,500 | |||||
Exercise of stock options for cash | $ 2 | 20,194 | 20,196 | |||
Exercise of stock options for cash, shares | 1,960 | |||||
Stock-based compensation | $ 14 | 5,447,358 | 5,447,372 | |||
Stock-based compensation, shares | 14,387 | |||||
Preferred share dividends | 4,750,585 | (4,750,585) | ||||
Stock warrants issued in connections with Senior Notes | 11,806,307 | 11,806,307 | ||||
Net loss | (41,427,609) | (41,427,609) | ||||
Comprehensive income | (7,419,040) | (7,419,040) | ||||
Ending balance, value at Sep. 30, 2022 | $ 38 | $ 555 | 91,957,856 | (7,365,129) | (62,827,744) | 21,765,576 |
Ending balance, shares at Sep. 30, 2022 | 37,700 | 555,153 | ||||
Shares issued for conversion of borrowings | $ 75 | 1,127,582 | 1,127,657 | |||
Shares issued for conversion of borrowings, shares | 75,179 | |||||
Common stock issued for cash | $ 212 | 5,921,770 | 5,921,982 | |||
Stock-based compensation | $ 5 | 1,290,786 | 1,290,791 | |||
Stock-based compensation, shares | 4,076 | |||||
Preferred share dividends | 4,086,819 | (4,086,819) | ||||
Net loss | (84,243,877) | (84,243,877) | ||||
Comprehensive income | 6,832,728 | 6,832,728 | ||||
Common stock issued for cash, shares | 212,418 | |||||
Reclassification of warrants as liabilities | (1,114,925) | (1,114,925) | ||||
Conversion of preferred stock | $ (38) | $ 14,133 | (14,095) | |||
Conversion of preferred stock, shares converted | (37,700) | |||||
Conversion of preferred stock, shares issued | 14,132,816 | |||||
Ending balance, value at Sep. 30, 2023 | $ 0 | $ 14,980 | $ 103,255,793 | $ (532,401) | $ (151,158,440) | $ (48,420,068) |
Ending balance, shares at Sep. 30, 2023 | 0 | 14,979,642 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash flow from operating activities: | ||
Net loss | $ (84,243,877) | $ (41,427,609) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Amortization of debt discount | 11,012,829 | 4,778,405 |
(Gain) loss on derivative instruments | 142,187 | (1,116,153) |
Change in fair value of warrant liabilities | (1,114,925) | 0 |
Depreciation and amortization | 6,971,311 | 6,377,301 |
Amortization of right of use assets | 142,444 | 175,497 |
Stock-based compensation | 1,290,791 | 5,447,372 |
Impairment loss | 44,917,891 | 3,851,503 |
Foreign exchange loss | 2,394,696 | 128,092 |
Gain on cryptocurrency settlement | 0 | (428) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 1,155,206 | (1,793,198) |
Prepaid expenses | 569,573 | (1,128,372) |
Accounts payable and accrued liabilities | 7,351,432 | 11,988,008 |
Right of use lease liabilities | (142,443) | (14,969) |
Liabilities to users | (453,365) | 1,339,717 |
Net cash used in operating activities | (10,006,250) | (11,394,834) |
Cash flow from investing activities: | ||
Purchase of software and equipment | (11,390) | (1,200,882) |
Acquisition of Aspire B2C business | 0 | (56,235,526) |
Proceeds from sale of fixed assets | 23,770 | 0 |
Net cash used by investing activities | 12,380 | (57,436,408) |
Cash flow from financing activities: | ||
Proceeds from settlement of derivative instruments | 973,965 | 0 |
Repayment of notes payable | (5,000,000) | 0 |
Proceeds from debt issuance, net of issuance costs | 0 | 26,627,111 |
Proceeds from revolving line of credit | 1,650,000 | 0 |
Proceeds from equity issuances, net of costs of capital | 5,921,982 | 37,028,646 |
Net cash provided by financing activities | 3,545,947 | 63,655,757 |
Effect of foreign exchange rates on cash | 1,266,422 | 1,596,836 |
NET CHANGE IN CASH | (5,181,501) | (3,578,649) |
CASH AT BEGINNING OF PERIOD | 5,486,210 | 9,064,859 |
CASH AT END OF PERIOD | 304,709 | 5,486,210 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 4,011,085 | 3,575,349 |
Cash paid for income taxes | 0 | 0 |
Non-cash transactions | ||
Preferred shares issued for dividends | 4,086,819 | 4,750,585 |
Stock warrants issued in connection with Senior Notes | 0 | 7,661,382 |
Common stock issued for acquisition of Aspire B2C business | 0 | 5,665,370 |
Promissory note issued for acquisition of Aspire B2C business | 0 | 11,330,740 |
Stock issued for conversion of borrowings | 1,127,657 | 412,500 |
Capitalized interest and waiver fees on Senior Notes and Revolving Loan | 832,184 | |
Stock issuable for intangible assets | 0 | 1,513,902 |
Stock issued for conversion of preferred stock | 422,837 | 0 |
Reclassification of warrant as liabilities | $ 1,294,638 | $ 0 |
ORGANIZATION, NATURE OF OPERATI
ORGANIZATION, NATURE OF OPERATIONS AND GOING CONCERN | 12 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION, NATURE OF OPERATIONS AND GOING CONCERN | NOTE 1 – ORGANIZATION, NATURE OF OPERATIONS AND GOING CONCERN Organization EBET, Inc. (“EBET” or “the Company”) was formed on September 24, 2020 as a Nevada corporation. EBET is a technology company operating platforms focused on i-gaming including casino and sportsbook. The Company operates under a Curacao gaming sublicense pursuant to a set of agreements with Aspire Global plc (“Aspire”) as a platform provider allowing EBET to provide online betting services to various countries around the world. At the Company’s Pursuant to such authority granted by the Company’s stockholders, the Company’s board of directors approved a one-for-thirty (1:30) reverse stock split Acquisition of the B2C business of Aspire Global plc On October 1, 2021, the Company, and its wholly owned subsidiary, Esports Product Technologies Malta Ltd. (“Esports Malta”), entered into a Share Purchase Agreement (the “Acquisition Agreement”) with Aspire and various Aspire group companies to acquire all of the issued and outstanding shares of Karamba Limited, a subsidiary of Aspire. The total acquisition price was € 65,000,000 50,000,000 10,000,000 5,000,000 Going Concern The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The continuation of the Company as a going concern is dependent upon the ability of the Company to obtain equity or debt financings to continue operations. The Company has a history of and expects to continue to report negative cash flows from operations and a net loss. The Company's forecasts for 2024 and beyond indicate that it will need additional funding in order to have sufficient financial resources to continue to settle its debts as they fall due. The Company has taken significant measures in an attempt to increase the profitability of its business in the short term. These actions include optimizing the efficiency of marketing campaigns, reducing the total number of employees and contractors, terminating software and other immaterial contracts as well as generally reducing the operating costs of the business. These efforts have also resulted in an increased focus on the Company’s i-gaming business and a significant reduction in the investment of the Company’s esports products and technologies, which resulted in the recognition of an impairment loss on certain intangible assets and fixed assets. As a result of the Company’s actions as referenced above, it does not expect to launch its esports products in the foreseeable future. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company may seek additional funding through a combination of equity offerings, debt financings, government or other third-party funding, commercialization, marketing and distribution arrangements, other collaborations, strategic alliances and licensing arrangements and delay planned cash outlays or a combination thereof. Management cannot be certain that such events or a combination thereof can be achieved. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The significant accounting policies followed in the preparation of the consolidated financial statements are as follows: Basis of Presentation and Consolidation The basis of accounting applied is United States generally accepted accounting principles (“US GAAP”). All amounts included in these financial statements and footnotes are expressed in U.S. Dollars, unless otherwise noted. The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts, transactions and balances have been eliminated in consolidation. Certain reclassifications have been made to prior period amounts to conform to the current year presentation. Business combinations The Company accounts for business combinations under the acquisition method of accounting, in accordance with ASC 805, which requires assets acquired and liabilities assumed to be recognized at their fair values as of the acquisition date. Any fair value of purchase consideration in excess of the fair value of the assets acquired less liabilities assumed is recorded as goodwill. The fair values of the assets acquired, and liabilities assumed are determined based upon the valuation of the acquired business and involve management making significant estimates and assumptions. Use of Estimates The preparation of the financial statements in conformity with generally accepted accounting principles in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of expenses during the reporting periods. Making estimates requires management to exercise judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate could change in the near term due to one or more future confirming events. Accordingly, actual results could differ significantly from those estimates. Cash and Cash Equivalents Cash and cash equivalents include short-term investments with original maturities of 90 days or less at the date of purchase. The recorded value of our cash and cash equivalents approximates their fair value. Accounts Receivable Accounts receivables are recorded at amortized cost, less any allowance for doubtful accounts. Accounts receivable consists primarily of amounts due from our platform provider. The receivable balance owed to the Company represents the net amount owed to the Company by Aspire related to the strategic agreement for the Company’s i-gaming platform and is stated at historical cost less any allowance for doubtful accounts. The allowance for doubtful accounts was $ 0 Fixed Assets, net Software and equipment are carried at cost, net of accumulated depreciation. Depreciation is computed utilizing the straight-line method over the estimated useful life of the asset. Additions and improvements are capitalized, while repairs and maintenance are expensed as incurred. Intangible Assets The Company’s intangible assets consist primarily of customer relationships, trademarks and internet domain names. Certain intangible assets have a defined useful life and others are classified as indefinite-lived intangible assets. Other intangible assets with a defined useful life are amortized over their estimated useful economic lives on a straight-line basis. An intangible asset with an indefinite useful life is not amortized but assessed for impairment annually, or more frequently, when events or changes in circumstances occur indicating that it is more likely than not that the indefinite-lived asset is impaired. Impairment exists when the carrying amount exceeds its fair value. In testing for impairment, the Company has the option to first perform a qualitative assessment to determine whether it is more likely than not that an impairment exists. If it is determined that it is more likely than not that an impairment exists, a quantitative impairment test is not necessary. If the Company concludes otherwise, it is required to perform a quantitative impairment test. To the extent an impairment loss is recognized, the loss establishes the new cost basis of the asset. Subsequent reversal of impairment losses is not permitted. Impairment of Long-Lived Assets Long-lived assets consist of software and equipment, finite-lived acquired intangible assets, such as license agreements, and indefinite-lived assets such as internet domain names. Long-lived assets are tested for recoverability whenever events or changes in business circumstances indicate that the carrying amount of the asset may not be fully recoverable. Impairment expense is recognized to the extent an asset’s expected undiscounted future cash flows are less than the asset’s carrying amount. As of September 30, 2023, the Company determined that it’s intangible assets and goodwill were impaired and recognized an impairment loss of $ 44,917,891 24,790,233 20,127,658 3,851,503 3,282,243 569,260 Leases The Company accounts for leases under ASC 842. The Company assesses whether a contract contains a lease on its execution date. If the contract contains a lease, lease classification is assessed upon its commencement date under ASC 842. For leases that are determined to qualify for treatment as operating leases, rent expense is recognized on a straight-line basis over the lease term. Leases that are determined to qualify for treatment as finance leases recognize interest expense as determined using the effective interest method with corresponding amortization of the right-of-use assets. For leases with terms of 12 months and greater, an asset and liability are initially recorded at an amount equal to the present value of the unpaid lease payments over the lease term. In determining the lease term for each lease, the Company includes options to extend the lease when it is reasonably certain that the option will be exercised. The Company uses the interest rate implicit in the lease, when known, or its estimated incremental borrowing rate, which is derived from information available at the lease commencement date including prevailing financial market conditions, in determining the present value of the unpaid lease payments. The Company’s only significant lease was for office space in Malta, which had a two-year lease term beginning August 1, 2021, and is classified as an operating lease. The lease has an option to extend the term for an additional two years with a 10% increase in annual rent. The Company recognized a right of use asset and lease liability of $ 381,346 The following table summarizes the lease-related assets and liabilities recorded in the consolidated balance sheets at September 30, 2023 and 2022: Schedule of lease-related assets and liabilities September 30, 2023 September 30, 2022 Operating Leases: Operating lease right-of-use assets $ – $ 129,975 Right of use liability operating lease current portion $ – $ 129,974 Right of use liability operating lease long term – – Total operating lease liabilities $ – $ 129,974 Operating lease expense was $ 142,375 201,978 Liabilities to Users The Company records liabilities for user account balances at a given reporting period based on deposits made by players either to the Company or the sales affiliate, less any losses on wagers and payout made to players. Liabilities to users amounts are not required to be backed by cash reserves of the Company. The user balances are maintained by the Company’s third-party platform provider, and the Company has an asset of an equivalent amount included within Prepaid expense and other current assets Revenue Recognition The Company recognizes revenue in accordance with ASC Topic 606, Revenue From Contracts With Customers · Identification of the contract with a customer · Identification of the performance obligations in the contract · Determination of the transaction price · Allocation of the transaction price to the performance obligations in the contract · Recognition of revenue when, or as, the Company satisfies a performance obligation No single customer accounted for more than 10% of revenue for the years ended September 30, 2023 and 2022. In addition, no disaggregation of revenue is required because all current revenue is generated from gaming revenue. i-gaming, or online casino, typically includes digital versions of wagering games available in land-based casinos, such as blackjack, roulette and slot machines. For these offerings, the Company functions similarly to land-based casinos, generating revenue through casino hold, as users play against the house. i-gaming revenue is generated from user wagers net of payouts made on users’ winning wagers and incentives awarded to users. Sportsbook or sports betting involves a user wagering money on an outcome or series of outcomes occurring. When a user’s wager wins, the Company pays the user a pre-determined amount known as fixed odds. Sportsbook revenue is generated by setting odds such that there is a built-in theoretical margin in each sports wagering opportunity offered to users. Sportsbook revenue is generated from users’ wagers net of payouts made on users’ winning wagers and incentives awarded to users. Performance Obligations The Company operates an online betting platform allowing users to place wagers on a variety of live sporting events, i-gaming and esports events. Each wager placed by users create a single performance obligation for the Company to administer each event wagered. The performance obligation is satisfied once the event wagered on has been completed. Gross gaming revenue is the aggregate of gaming wins and losses based on results of each event that customers wager bets on. Transaction Price Considerations Variability in the transaction price arises primarily due to market-based pricing, cash discounts, revenue sharing and usage-based fees. The Company offers loyalty programs, free plays, deposit bonuses, discounts, rebates and other rewards and incentives to its customers. Revenue for Sportsbook and i-gaming is collected prior to the contest or event and is fixed once the outcome is known. Prizes paid and payouts made to users are recognized when awarded to the player. Cost of Revenue Cost of revenue consists of third-party costs associated with the betting software platform and gaming taxes. Sales and Marketing Expenses Sales and marketing expenses consist primarily of expenses associated with amounts paid to affiliates, advertising and related software, strategic league and team partnerships and costs related to free to play contests, and the compensation of sales and marketing personnel, including stock-based compensation expenses. Variable commission fees are paid to sales affiliates based on a percentage of revenue generated from the affiliate. The commissions rebated to affiliates are recorded as a component of marketing expense. Advertising costs are expensed as incurred. Product and Technology Expenses Product and technology expenses consist primarily of expenses which are not subject to capitalization or otherwise classified within Cost of Revenue. Product and Technology expenses include software licenses, depreciation of hardware and software and costs related to the compensation of product and technology personnel, including stock-based compensation. General and Administrative Expenses General and administrative expenses include costs related to the compensation of the Company’s administrative functions, insurance costs, professional fees and consulting expense. Income Taxes Deferred taxes are determined utilizing the "asset and liability" method, whereby deferred tax asset and liability account balances are determined based on differences between financial reporting and the tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance, when it's more likely than not that deferred tax assets will not be realized in the foreseeable future. Deferred tax liabilities and assets are classified as current or non-current based on the underlying asset or liability or if not directly related to and asset or liability based on the expected reversal dates of the specific temporary differences. Fair value of financial instruments The Company discloses fair value measurements for financial and non-financial assets and liabilities measured at fair value. Fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The accounting standard establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described below: Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. Level 2: Observable prices that are based on inputs not quoted on active markets but are corroborated by market data. Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. The following tables set forth the fair value of the Company’s financial assets and liabilities measured at fair value as of September 30, 2023 and 2022 based on the three-tier fair value hierarchy: Schedule of fair value of financial assets and liabilities Fair Value Measurements at September 30, 2023 Level 1 Level 2 Level 3 Assets Cash $ 304,709 $ – $ – Total assets 304,709 – – Liabilities Senior Notes, net of discount – 26,350,630 – Revolving line of credit – 1,690,000 – Note due to Aspire – 10,594,000 – Convertible notes payable, net of discount – 617,500 – Other notes payable, net of discount – 559,597 – Total liabilities $ – $ 39,811,727 $ – Fair Value Measurements at September 30, 2022 Level 1 Level 2 Level 3 Assets Cash $ 5,486,210 $ – $ – Derivative asset – 1,116,153 – Total assets 5,486,210 1,116,153 – Liabilities Senior Notes, net of discount – 19,595,694 – Note due to Aspire – 9,748,000 – Convertible notes payable, net of discount – 1,606,891 – Other notes payable, net of discount – 509,520 – Total liabilities $ – $ 31,460,105 $ – Derivative Instruments The Company accounts for its derivative financial instruments in accordance with ASC Topic 815, Derivatives and Hedging Fair Value Measurements and Disclosures . The Company's derivative instruments do not subject its earnings or cash flows to material risk, as gains and losses on these derivatives are intended to offset losses and gains on the item being hedged. The Company does not enter into derivative transactions for speculative purposes and it does not have any non-derivative instruments that are designated as hedging instruments pursuant to ASC 815. The Company manages the credit risk of its counterparties by dealing only with institutions that it considers financially sound and considers the risk of non-performance to be remote. The Company entered into foreign exchange forward contracts to mitigate the change in fair value of specific liabilities and cash flows on the Consolidated Balance Sheets that were denominated in Euros related to the acquisition of the Aspire B2C business in November 2021. These undesignated hedging instruments are recorded at fair value as a derivative asset or liability on the Consolidated Balance Sheets with their corresponding change in fair value recognized in Other income (expense), net. The cash flows related to the gains and losses are classified in the consolidated statements of cash flows as part of cash flows from operating activities. The total notional amount of outstanding undesignated derivative instruments was $ 16,050,000 142,187 1,239,510 Foreign Currency The Company’s reporting currency is the U.S. Dollar. Certain subsidiaries of the Company have a functional currency other than the U.S. Dollar and are translated to the Company’s reporting currency at each reporting date. Non-monetary items are translated at historical rates. Monetary assets and liabilities are translated from British Pounds Sterling and Euro into U.S. Dollars, at the period-end exchange rate, while foreign currency expenses are translated at the exchange rate in effect on the date of the transaction. The net effect of translation is reflected as other comprehensive income. The gains or losses on transactions denominated in currencies other than an entity’s functional currency are included in the consolidated statement of operations. Earnings per share The Company computes earnings per share in accordance with Accounting Standards Codification Topic 260 – Earnings per Share (Topic 260). Topic 260 requires presentation of both basic and diluted earnings per shares (EPS) on the face of the income statement. The basic net loss per common share is calculated by dividing the Company’s net loss available to common shareholders by the weighted average number of common shares during the year. The diluted net loss per common share is calculated by dividing the Company’s net loss available to common shareholders by the diluted weighted average number of common shares outstanding during the year. The diluted weighted average number of common shares outstanding is the basic weighted number of common shares adjusted for any potentially dilutive debt or equity. Embedded Conversion Features The Company evaluates embedded conversion features within convertible debt under ASC 815 “Derivatives and Hedging” to determine whether the embedded conversion feature(s) should be bifurcated from the host instrument and accounted for as a derivative at fair value with changes in fair value recorded in earnings. If the conversion feature does not require derivative treatment under ASC 815, the instrument is evaluated under ASC 470-20 “Debt with Conversion and Other Options.” Under the ASC 470-20, an entity must separately account for the liability and equity components of the convertible debt instruments that may be settled entirely or partially in cash upon conversion in a manner that reflects the issuer’s economic interest cost. The effect of ASC 470-20 on the accounting for our convertible debt instruments is that the equity component is required to be included in the additional paid-in capital section of stockholders’ equity on the consolidated balance sheets and the value of the equity component is treated as original issue discount for purposes of accounting for the debt component of the notes. As a result, the Company is required to record non-cash interest expense as a result of the amortization of the discounted carrying value of the convertible debt to their face amount over the term of the convertible debt. We report higher interest expense in our financial results because ASC 470-20 requires interest to include both the current period’s amortization of the debt discount and the instrument’s coupon interest. Recently Issued Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standard Board (“FASB”) or other standard setting bodies that the Company adopts as of the specified effective date. The Company does not believe that the impact of recently issued standards that are not yet effective will have a material impact on the Company’s financial position or results of operations upon adoption. |
BUSINESS COMBINATION
BUSINESS COMBINATION | 12 Months Ended |
Sep. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
BUSINESS COMBINATION | NOTE 3 – BUSINESS COMBINATION Acquisition of the B2C business of Aspire Global plc On October 1, 2021, the Company and Esports Malta entered into the “Acquisition Agreement” with Aspire, Aspire Global International Limited, AG Communications Limited, Aspire Global 7 Limited (collectively the “Aspire Related Companies”), and Karamba Limited (“Karamba”) whereby Esports Malta acquired all of the issued and outstanding shares of Karamba from the Aspire Related Companies. The total acquisition price, paid at the closing of the acquisition of the Karamba shares, was € 65,000,000 50,000,000 10,000,000 5,000,000 The acquired assets were recorded at their estimated fair values. The purchase price of this acquisition was allocated follows: Schedule of allocation of purchase price Fair Value Trademarks $ 21,836,528 Customer relationships 16,162,202 Goodwill 35,620,270 Total $ 73,619,000 Useful life is the period over which an asset is expected to add to the future cash flows of an entity. Useful life for identifiable assets is generally estimated using a modified straight-line method or a usage period. The Company has determined that the useful life of the trademarks vary from 5 years to an indefinite life and determined that the useful life of the Customer Relationships was three years. Goodwill represents the excess of the gross considerations transferred over the fair value of the underlying net assets acquired and liabilities assumed. Goodwill recognized is not deductible for local tax purposes. Upon completing the acquisition of Aspire, the company incurred the following costs: Schedule of acquisition costs Debt issuance costs $ 3,372,889 Equity issuance costs $ 4,184,000 Transaction expenses $ 2,240,147 Debt issuance costs relate to costs associated with acquiring the loan from the CP BF Lending LLC. These have been recorded as reduction of the face value of the debt and are amortized over the life of the loan. Equity issuance costs relate to the costs associated with the private placement. These have been recorded as reduction of the equity proceeds. Transactions costs relate to all direct and indirect costs associated with the acquisition and expensed as incurred. Unaudited proforma information The following schedule contains pro-forma consolidated results of operations for the year ended September 30, 2023 and 2022 as if the Aspire B2C acquisition occurred on October 1, 2021. The pro forma results of operations are presented for informational purposes only and are not indicative of the results of operations that would have been achieved if the acquisition had taken place on October 1, 2021, or of results that may occur in the future. Schedule of business combination proforma results Fiscal Year Ended September 30, 2023 September 30, 2022 Revenue $ 39,177,504 $ 68,628,158 Operating loss (65,708,506 ) (32,488,215 ) Net loss (84,243,877 ) (42,698,109 ) Net loss attributable to common shareholders (88,330,696 ) (48,398,814 ) Loss per common share - basic and diluted $ (32.23 ) $ (97.84 ) The most significant proforma adjustments relate to annual interest on the Senior Notes and Note to Aspire issued in connection with the acquisition, amortization expense of the estimated intangible assets recognized as part of the purchase price allocation, and the preferred dividends incurred in connection with the financing of the acquisition. |
BORROWINGS
BORROWINGS | 12 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
BORROWINGS | NOTE 4 – BORROWINGS The following is a summary of borrowings outstanding as at September 30, 2023 and 2022: Schedule of borrowings outstanding September 30, 2023 Contractual Interest Principal outstanding balance Principal outstanding balance Unamortized Issuance costs Issuance costs Accrued Interest rate Cur Local USD USD USD USD USD Senior Note 15.0 USD 26,350,630 26,350,630 – – 26,350,630 – Revolving Note 15.0 USD 1,690,000 1,690,000 – – 1,690,000 – Note due to Aspire 10 EUR 10,000,000 10,594,000 – – 10,594,000 2,049,029 Convertible notes 10 USD 617,500 617,500 – – 617,500 62,681 Other 0 USD 675,000 675,000 (115,403 ) – 559,597 – Total borrowings 39,927,130 (115,403 ) – 39,811,727 2,111,710 Current 39,252,130 2,111,710 Long-term 559,597 – Total borrowings 39,811,727 2,111,710 September 30, 2022 Contractual Interest Principal outstanding balance Principal outstanding balance Unamortized debt discount Issuance costs Carrying Amount Accrued Interest rate Cur Local USD USD USD USD USD Senior notes 15 USD 30,558,446 30,558,446 (8,526,776 ) (2,435,976 ) 19,595,694 – Note due to Aspire 10 EUR 10,000,000 9,748,000 – – 9,748,000 888,343 Convertible notes 10 USD 1,606,891 1,606,891 – – 1,606,891 200,947 Other 0 USD 675,000 675,000 (165,480 ) – 509,520 – Total borrowings 42,588,337 (8,692,256 ) (2,435,976 ) 31,460,105 1,089,290 Current 21,202,585 1,089,290 Long-term 10,257,520 – Total borrowings 31,460,105 1,089,290 Senior Notes On November 29, 2021, the Company entered into a credit agreement (the “Credit Agreement”) with CP BF Lending, LLC (“Lender”), pursuant to which the Lender agreed to make a single loan to the Company of $ 30,000,000 750,000 The Senior Note matures in 36 months, provided that the Company may receive two 12-month extensions of the maturity date by paying to the Lender (1) an extension fee equal to 1.0% of the unpaid principal balance of the Loan as of the date of such extension, and (2) all reasonable and documented out-of-pocket fees and expenses paid or incurred by Lender, in each case in connection with the extension request, including but not limited to fees and expenses for appraisals, collateral exams and audits, and legal counsel. The foregoing extension right is subject to, among other items, (i) the Loan not being in default, (ii) the representations and warranties contained in Credit Agreement being true and correct; and (iii) the Lender granting its written approval thereof in its sole discretion. The Senior Note may be prepaid by the Company at any time. In addition, the Credit Agreement provides that in the event there shall be excess cash flow from the Aspire Business (as such concept is defined in the Credit Agreement) for any calendar month, commencing with the month ended December 31, 2022, the Company shall apply a portion of such excess cash flow amount to prepay the outstanding principal balance of the Loan; provided that no such prepayment shall be required once the unpaid principal balance of the Loan has been reduced to $15,000,000. The Credit Agreement requires the Company to meet certain financial covenants. The Loan is secured by all of the assets of the Company and its subsidiaries. The Loan may be accelerated by the Lender upon an event of default, which in addition to customary events of default include: (i) if (1) any of the Company or its subsidiaries shall fail to maintain in full force and effect any gaming approval (as defined in the Credit Agreement) required for the operation of its business or (2) any gaming regulator shall impose any condition or limitation on any of the foregoing entities that could be reasonably expected to have a material adverse effect; or (ii) the suspension from trading or failure of the Company’s common stock to be trading or listed on the Nasdaq exchange for a period of three consecutive trading days. As of March 31, 2022, the Company had not maintained compliance with the covenants of the Senior Notes and obtained a waiver from its lender which waiver was contingent on the completion of an equity raise of $3.5 million, which was completed in June 2022. In consideration for obtaining a waiver from the compliance with certain covenants, the Company agreed to amend the Senior Notes such that $5 million of principal loan balance becomes convertible at $107.40 per share commencing after the Company raises the $5,000,000 of common equity (including the foregoing $3.5 million). On February 2, 2023, the conversion option became exercisable upon closing of the offering that generated $ 6,500,000 In connection with the Loan, the Company issued the Lender a warrant (the “Lender Warrant”) to purchase 52,262 shares of Company common stock at an initial exercise price of $750 per share expiring on the earlier to occur of (i) five years following the issue date or (ii) the second anniversary of the satisfaction of all obligations of the Company under the Credit Agreement. The exercise price is subject to appropriate adjustment in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting the Company’s common stock. In addition, the exercise price of the Lender Warrant is subject to “weighted-average” anti-dilution protection for issuances by the Company below the exercise price (other than certain defined exempt issuances), and, upon shareholder approval, which was received on February 9, 2022, the number of shares underlying the Lender Warrant shall also be adjusted for issuances to which the “weighted-average” anti-dilution protection applies. Pursuant to the foregoing anti-dilution provision, in connection with the $3.5 million offering completed in June 2022, the number of shares underlying the warrant increased to 55,152 and the exercise price was reduced to $710.70. Pursuant to the foregoing anti-dilution provision, in connection with the $6.5 million offering completed in February 2023, the number of shares underlying the warrant increased to 77,082 508.50 77,082 Between September 2, 2022 and June 20, 2023, the Lender provided the Company with multiple limited waivers of the Senior Note covenants in exchange for aggregate payments of $ 609,558 3,000,000 On June 30, 2023, the Company, the subsidiaries of the Company and the Lender entered into a forbearance agreement (the “Forbearance Agreement”). Pursuant to the Forbearance Agreement, the Company acknowledged, among other items, that, as June 30, 2023, it was in default under the Credit Agreement, the Lender had the right to accelerate the Loan, and the Lender had the right to impose the default rate of interest under the Credit Agreement. Pursuant to the Forbearance Agreement, the Lender agreed to forbear from exercising its rights and remedies against the Company and the Guarantors under the Credit Documents until the earlier of September 15, 2023 or a termination event. A termination event under the Forbearance Agreement consists of the filing of a bankruptcy proceeding by the Company or any Guarantor, the occurrence of a new event of default under the Credit Agreement, or the failure by the Company or any Guarantor to perform any material requirement, covenant, or obligation under the Forbearance Agreement. During the forbearance period, the Lender agreed, among other items, not to accelerate the Loan, initiate any bankruptcy filings, or apply any default rates of interest. As partial consideration for the Lender agreeing to enter into the Forbearance Agreement, the Company paid a forbearance fee equal to 50 basis points of the outstanding principal amount of the Loan (or $130,425), which amount was added to the principal balance of the loan. In addition, on June 30, 2023, the Company made a prepayment of the Loan in the amount of $ 2 On October 1, 2023, the Company, the subsidiaries of the Company and the Lender entered into an amendment number 2 to the Forbearance Agreement (the “Forbearance Amendment No. 2”). The Forbearance Amendment No. 2 extended the Forbearance Date from October 31, 2023 until June 30, 2025, and provides that instead of interest being payable monthly in cash, such interest shall accrue in arrears and can be added to the outstanding principal balance of the Loan and Revolving Note. The interest rate on the Loan and the Revolving Note was increased to 16.5% per annum. The Forbearance Amendment No. 2 further adds that the Company’s suspension from trading or failure to be listed on the Nasdaq Capital Market for more than 30 calendar days will constitute a Termination Event under the Forbearance Agreement as amended. On November 11, 2023, Lender provided the Company with an extension of the Nasdaq Capital Market delisting/suspension Termination Event for an additional 40 calendar days up to December 23, 2023, and on December 19, 2023, the Lender provided the Company with an additional extension of 40 days. Pursuant to Forbearance Amendment No. 2, the Company agreed that to the extent it receives net proceeds from or in connection with a judgment, settlement or other in or out of court resolution of a commercial tort claim, the Company will: (i) make a prepayment on the Loan or the Revolving Note (discussed below) of 100% of such net proceeds; and (ii) make an additional payment to the Lender equal to 5% of any such net proceeds (prior to the payments set forth in subsection (i)) in excess of $50.0 million. In connection with the Forbearance Agreement, the Lender agreed to provide the Company with a revolving line of credit in the amount of $2.0 million (the “Revolving Note”), with any advances under the Revolving Note to be made in the sole discretion of the Lender. On September 29, 2023, the Lender agreed to increase the maximum available amount of the Revolving Loan to $ 4 40,000 November 29, 2024 15.0 1,690,000 Effective October 1, 2023, the Company entered into an amended and restated note conversion option agreement (the “Option Agreement”) with the Lender. Pursuant to the Option, the Company agreed that Lender have the right to convert any amounts due pursuant to the Loan and the Revolving Note into shares of Company common stock at a conversion price of $1.25 per share with respect to the initial $5.0 million and at a conversion price of $2.50 per share with respect to the remaining amounts. In addition, the Company agreed to file a registration statement registering the resale of the shares of Company common stock underlying the Loan within 45 days of the date of the Option and to use its commercially reasonable efforts to cause such registration statement to become effective within 120 days of the date of the Option. The Option Agreement provides that the Lender (together with its affiliates) may not convert any portion of the Loan or Revolving Loan during an initial 45-day lockup or to the extent that the Lender would own more than 9.99% of the Company’s outstanding common stock immediately after exercise, except that upon prior notice from the Lender to the Company, the Lender may increase or decrease the amount of ownership of outstanding stock after conversion of the Loan, provided that any modification will not be effective until 61 days following notice to the Company. On January 9, 2024, the Company, the subsidiaries of the Company and the Lender entered into a Third Amendment to Credit Agreement (the “Amendment No. 3”). The Amendment No. 3 increased the maximum available amount of the Revolving Loan from $4.0 million to $6.5 million and provided such additional loan availability under a use of proceeds that including working capital as well as funding for our litigation matters, materially including our litigation against Aspire. In connection with entering into Amendment No. 3, the Company and the Lender entered in a second amended and restated note conversion option agreement (the “Conversion Agreement”), pursuant to which the Company agreed that the Lender shall have the right to convert the principal balance and accrued interest under the Loan and Revolving Note into shares of Company common stock at a conversion price of $0.116 per share (subject to adjustment for stock splits, stock dividends and other similar events). The foregoing conversion price is subject to future adjustment to the lowest price per share referenced in any equity related instrument the Company issues to any other person until the Lender has exercised its conversion rights. Pursuant to the Conversion Agreement, the Lender is prohibited from converting its debt to the extent that such conversion would result in the number of shares of common stock beneficially owned by Lender and its affiliates exceeding 9.99% of the total number of shares of common stock outstanding immediately after giving effect to the conversion, which percentage may be increased or decreased at the holder’s election provided any adjustment would not become effective for 61 days. The Company agreed to file a resale registration statement providing for the resale by the Lender of the shares of common stock that may be received upon the foregoing conversion within 30 calendar days of the Lender’s request, and to use commercially reasonable efforts to cause such registration statement to become effective within 90 days of such request. To the extent that the Company does not have sufficient authorized shares of common stock to allow for the full conversion permitted by the Conversion Agreement, upon the Lender’s request, the Company will be required to use its reasonable best efforts to obtain approval of an increase in the Company's authorized shares from its shareholders. During any period of time that the Company does not have sufficient authorized shares to allow for the full conversion permitted by the Conversion Agreement, the Company will be prohibited from issuing any shares of common stock or common stock equivalents. As a result of Amendment No. 3, the exercise price of the warrants issued to the holders of Preferred Stock was reset to $0.116 per share. As a result of the event of default on the Senior Note, the Company amortized all remaining debt discount and debt issuance costs associated with the Senior Note. During the year ended September 30, 2023 and 2022, the Company recognized interest expense of $ 10,962,752 4,216,442 no Note due to Aspire The Note provides for an interest rate of 10% per annum. The maturity date of the Note will be the earlier of that date which is four years from the issuance date or a liquidity event. The Note will require repayment of the principal amount plus any accrued interest in three equal installments, payable annually starting on the second anniversary after issuance. No interest payment shall be due until that date which is the last day of the end of the second-year anniversary of issuance should the Note remain unpaid at such time. Should the Note remain unpaid at the second-year anniversary, the total accrued interest due at that time shall be paid at the second-year anniversary for accrued interest for the period from the issuance date through the second-year anniversary date. Thereafter, and on each annual anniversary date thereafter, the interest due for the prior annual period shall be paid. Notwithstanding the foregoing, if the Company owes greater than $15,000,000 under the Credit Agreement, then the parties agree that the Company shall repay any principal amount plus any accrued interest due through the issuance of Company common stock in lieu of any cash payment and the amount of said common stock shares to be issued by the Company shall be determined by using the Conversion Price as defined below. Should an event of default occur on the Note, then at the election of Aspire, either (i) the Operator Services Agreement will be amended such that the fees payable shall increase by 5% during the continuation of the event of default, or (ii) Aspire may elect to convert the entire outstanding principal amount plus any accrued interest into shares of common stock of the Company at a price per share based on the weighted-average per-share price for the ten trading days prior to the date of the occurrence of the event of default (“Conversion Price”). In no event shall the Conversion Price be lower than $540.00 per share (as adjusted for stock splits, stock dividends, or similar events occurring after the date hereof) and the total maximum number of shares of common stock that may be issued to Aspire upon any such conversion in the aggregate shall be 21,667 shares (as adjusted for stock splits, stock dividends, or similar events occurring after the date hereof). As a result of the default on the Senior Note and the Forbearance Agreement described above, a potential event of default exists pursuant to the terms of the Note, and as such as classified all principal and interest as a current liability. Convertible Notes and other On September 1, 2020, ESEG Limited, a wholly owned subsidiary of the Company, entered into three promissory notes, with a combined principal amount of $ 2,100,000 10 March 1, 2022 675,000 67,167 The Company evaluated the conversion option and concluded a beneficial conversion feature was present at issuance. The Company recognized the beneficial conversion feature and relative fair value of the warrants as a debt discount and additional paid in capital. The fair value of the warrants at the grant date was estimated using a Black-Scholes model and the following assumptions: 1) volatility of approximately 85% based on a peer group of companies; 2) dividend yield of 0%; 3) risk-free rate of 0.26%; and 4) an expected term of five years. The $ 2,100,000 187,500 12,500 305,609 106,891 27,500 989,391 138,266 75,179 617,500 62,681 During the year ended September 30, 2023 and 2022, the Company recorded a charge of $ 50,077 561,963 |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 12 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY | NOTE 5 – STOCKHOLDERS’ EQUITY On July 26, 2023, the Company increased its authorized common shares to 500,000,000 0.001 10,000,000 0.001 At the Company’s Pursuant to such authority granted by the Company’s stockholders, the Company’s board of directors approved a one-for-thirty (1:30) reverse stock split June 2022 Private Placement On June 16, 2022, the Company issued, in a private placement priced at-the-market under Nasdaq rules: (i) 32,587 32,587 3.5 million February 2023 Private Placement On February 2, 2023 the Company entered into Securities Purchase Agreements (the “Purchase Agreements”) with several institutional and accredited investors to issue, in an offering (the “February Offering”): (i) 212,418 212,418 Subject to certain ownership limitations, the Warrants are exercisable commencing six months after issuance. Each Warrant is exercisable into one share of Common Stock at a price per share of $30.60 (as adjusted from time to time in accordance with the terms thereof) and will expire five and one-half years from the issuance date. The closing of the sales of these securities under the Purchase Agreements was on February 6, 2023. On February 2, 2023, the Company entered into a Placement Agent Agreement (the “Placement Agent Agreement”) with WestPark Capital, Inc. (the “WestPark”), pursuant to which the Company has agreed to pay WestPark an aggregate fee equal to 7.0% of the gross proceeds received by the Company from the sale of the securities in the transaction. In addition, the Company agreed to pay to WestPark on the Closing Date a cash fee equal to 1.0% of gross proceeds received by the Company from the sale of the securities in the transaction for non-accountable expenses. The Company also agreed to pay WestPark up to $ 50,000 The Company received gross proceeds of $ 6,500,000 577,018 Acquisition of the B2C segment of Aspire Global plc On October 1, 2021, in connection with the acquisition of the Aspire B2C business in November 2021, the Company entered into subscription agreements (the “Subscription Agreements”) with certain investors (the “Investors”). Pursuant to the Subscription Agreements, the Investors agreed to subscribe for and purchase, and the Company agreed to issue and sell to such Investors, simultaneous with the closing of the Acquisition Agreement, an aggregate of 37,700 1,000.00 37,700,000 Pursuant to the Subscription Agreement, the Company has obtained shareholder approval of the conversion of the Preferred Stock and Warrants into Company common stock in compliance with the rules and regulations of the Nasdaq Stock Market (“Shareholder Approval”). The Preferred Stockholders are entitled to receive dividends, at a rate of 14.0% per annum, which shall be payable quarterly in arrears on January 1, April 1, July 1 and October 1, beginning on the first such date after the issuance date. With limited exceptions, the Preferred Stockholders have no voting rights. The dividends can be paid in either cash or in the issuance of additional preferred shares. Upon any liquidation, dissolution or winding-up of the Company, the holders of the Preferred Stock shall be entitled to receive out of the assets, whether capital or surplus, of the Company available to shareholders, an amount equal to the greater of: (i) the purchase price for each share of Preferred Stock then held, or (ii) the amount the holders would have received had the holders fully converted the Preferred Stock to Company common stock, in each case, before any distribution or payment shall be made to the holders of the Company’s common stock. The Preferred Stock is convertible into Company common stock at an initial conversion price of $840.00 per share (“Conversion Price”); provided that the Conversion Price is subject to anti-dilution protection upon any subsequent transaction at a price lower than the Conversion Price then in effect. In addition, on December 31, 2022 and April 15, 2023 (each an “Adjustment Date”), the Conversion Price shall be adjusted to the lesser of: (i) the Conversion Price in effect on the Adjustment Date, or (ii) 85% of the average closing price of the Company’s common stock for the fifteen trading days prior to the Adjustment Date. On December 30, 2022, the holders of a majority of the Preferred Stock approved an amendment to the terms of the Preferred Stock to: (i) extend the initial Adjustment Date from December 31, 2022 to January 31, 2023; and (ii) to modify the definition of “Exempt Issuance” to permit the issuance of shares of Company common stock to consultants. On December 30, 2022, the Amended and Restated Certificate of Designation of Preferences, Rights and Limitations of the Series A Convertible Preferred Stock was filed in the State of Nevada. The Warrants are exercisable and expire on the fifth anniversary thereafter. The Warrants were initially to be exercisable at an exercise price of $900.00 per share, provided that the exercise price is subject to anti-dilution protection upon any subsequent transaction at a price lower than the exercise price then in effect. Notwithstanding the foregoing anti-dilution provision, in connection with the $3.5 million offering completed in June 2022, the exercise price was reduced to $45.00. In February 2023, the warrants exercise price was reset to $30.60 in connection with the February 2023 equity financing. The Warrants can be exercised on a cashless basis if there is no effective registration statement registering, or no current prospectus available for, the resale of the ordinary shares underlying the Warrants. The holders of the Preferred Stock and Warrants will not have the right to convert or exercise any portion of the Preferred Stock and Warrants to the extent that, after giving effect to such conversion, such holder (together with certain related parties) would beneficially own in excess of 4.99% of the Company’s common stock outstanding immediately after giving effect to such conversion or exercise. During the year ended September 30, 2023, the Company issued 14,132,816 37,700 no 2020 Stock Plan In December 2020, the Company adopted the EBET, Inc. 2020 Stock Plan, or the 2020 Plan. The 2020 Plan is a stock-based compensation plan that provides for discretionary grants of stock options, stock awards, stock unit awards and stock appreciation rights to key employees, non-employee directors and consultants. Under the 2020 Plan, the aggregate value of all compensation granted or paid to any individual for service as a non-employee director with respect to any calendar year, including awards granted under the 2020 Plan and cash fees paid to such non-employee director, will not exceed $300,000 in total value. For purposes of this limitation, the value of awards is calculated based on the grant date fair value of such awards for financial reporting purposes. On July 26, 2023, the Company amended the 2020 Plan to increase the number of shares of common stock that may be issued under the 2020 Plan to 250,000 46,192 203,808 Common Stock Awards The Company has awarded restricted stock units and shares of common stock to various employees, consultants and officers under the 2020 Plan. The majority of these awards will vest equally over terms of up to four years. At September 30, 2023, the Company had 7,046 restricted stock units in issuance. During the year ended September 30, 2023, 4,080 During the years ended September 30, 2023 and 2022, the Company recognized a total of $ 939,915 4,000,578 1,541,232 Warrants As discussed above, the Company has issued common stock warrants in connection with its fundraising activities to brokers, an asset purchase agreement and convertible notes issued during the years ended September 30, 2023 and 2022. The following table summarizes warrant activity during the years ended September 30, 2023 and 2022: Schedule of warrant activity Common Stock Warrants Shares Weighted Weighted Outstanding at September 30, 2021 73,321 $ 27.76 4.04 Granted 158,730 344.92 5.00 Cancelled – – – Expired – – – Exercised (30,914 ) 53.30 – Outstanding at September 30, 2022 201,137 $ 274.05 4.01 Granted 234,354 75.32 5.00 Cancelled – – – Expired – – – Exercised – – – Outstanding at September 30, 2023 435,491 $ 122.04 3.91 Exercisable at September 30, 2023 435,491 $ 122.04 3.91 The outstanding and exercisable common stock warrants as of September 30, 2023 had no intrinsic value. As a result of the reset of the conversion price of the Company’s preferred stock to $21.30 on April 28, 2023 as disclosed above, as of June 30, 2023 the Company had insufficient shares to settle its equity-linked instruments until it increased its authorized shares of Company common stock in July 2023. The Company applied a sequencing approach to determine which instruments may not be settled in shares based on the Company’s current authorized shares of common stock and should be accounted for as derivatives under ASC 815. The Company ordered its equity-linked instruments in order of issuance date, excluding employee awards that are not within the scope of ASC 815. Based on this analysis, the Company determined the 212,418 common stock warrants issued in connection with the sale of common stock on February 6, 2023 should be accounted for as liabilities at fair value. The Company estimated the fair value at April 28, 2023 using a Black Scholes option pricing model and the following inputs: 1) exercise price of $30.60; 2) volatility based on a peer group of companies of 89%; 3) risk-free rate of 3.51%; 4) dividend yield of 0% and 5) expected term of 5.3 years. The Company reclassified $ 1,294,638 179,713 During the year ended September 30, 2023, the Company estimated the fair value of the warrants using a Black-Scholes option pricing model and the following assumptions: 1) stock price of $60 to $868.50 per share; 2) dividend yield of 0%; 3) risk-free rate of between 1.18% and 3.35%; 4) expected term of between 5 years; 5) an exercise price of $74.70 or $868.50 and 6) expected volatility of 42.14% based on a peer group of public companies. The warrants issued in connection with the Senior Notes had a fair value of $ 19,467,688 11,806,307 24,171,423 504,952 Options During the years ended September 30, 2023 and 2022, the Company entered into various agreements with employees, members of the Board of Directors and consultants whereby the Company awarded common stock options under the 2020 Plan. Of the 2,457 667 The following table summarizes option activity during the years ended September 30, 2023 and 2022: Schedule of option activity Common Stock Options Shares Weighted Weighted Outstanding at September 30, 2021 82,489 $ 84.27 7.95 Granted 1,837 841.90 10.00 Cancelled/Forfeited (16,525 ) 244.50 – Exercised (1,894 ) 7.50 – Outstanding at September 30, 2022 65,907 $ 67.41 7.33 Granted – – – Cancelled/Forfeited (45,620 ) 46.90 – Exercised – – – Outstanding at September 30, 2023 20,287 $ 113.55 5.37 Exercisable at September 30, 2023 17,830 $ 94.83 5.07 During the years ended September 30, 2023 and 2022, the Company recognized stock-based compensation expense of $ 1,288,432 1,446,794 1,332,132 The Company estimated the fair value of the stock options awarded during the year ended September 30, 2022 using a Black-Scholes option pricing model and the following assumptions: 1) stock price of $90 to $939.90 per share; 2) dividend yield of 0%; 3) risk-free rate of between 0.85% and 1.20%; 4) expected term of between 3.5 and 6.25 years; 5) an exercise price between $7.50 and $939.90 and 6) expected volatility of 42.14% based on a peer group of public companies. |
LONG-LIVED ASSETS
LONG-LIVED ASSETS | 12 Months Ended |
Sep. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
LONG-LIVED ASSETS | NOTE 6 – LONG-LIVED ASSETS Fixed Assets The Company’s fixed assets consisted of the following as of September 30, 2023 and 2022: Schedule of fixed assets September 30, 2023 September 30, 2022 Software $ 264,850 $ 391,851 Furniture and fixtures 388,226 368,432 Total fixed assets 653,076 760,283 Accumulated depreciation (491,863 ) (213,875 ) Fixed assets, net $ 161,213 $ 546,408 The software costs above relate to acquired components of the Company’s existing platform and other future products which were being depreciated over the expected useful life of 3 569,260 Impairment loss Depreciation expense was $ 432,164 146,797 Intangible Assets – Aspire b2C Acquisition As disclosed in Note 3, the Company acquired intangible assets as part of the Aspire B2C Business acquisition. The acquired intangibles consisted of the following as of September 30, 2023 and 2022: Schedule of intangible assets acquired September 30, 2023 September 30, 2022 Trademarks and tradenames, indefinite lives $ 2,210,000 $ 14,232,080 Trademarks and tradenames, three year lives 4,533,030 4,562,064 Customer relationships – 13,910,396 Other 12,693 10,493 Total acquired intangibles 6,755,723 32,715,033 Accumulated amortization (3,054,114 ) (5,169,704 ) Acquired intangible assets, net $ 3,701,609 $ 27,545,329 As of September 30, 2023, the Company determined that its intangible assets and goodwill were impaired as a result of the loss of revenue generated by the gaming websites owned by the Company that operate in Germany after being shut down in May 2023, and the overall decline in the Company’s results of operations during fiscal year ended September 30, 2023. The Company recognized a total impairment loss of $ 44,917,891 24,790,233 20,127,658 three 6,539,147 5,949,143 The Karamba trademarks and tradenames have an indefinite useful life. The remaining trademarks and tradenames are amortized over an estimated useful life of three 1,267,642 211,274 Intangible Assets – Domain Names On September 1, 2020, the Company’s wholly owned subsidiary, ESEG, entered into domain purchase agreements to acquire the rights to certain domain names from third parties. The cost to acquire the domain names was $ 2,239,606 2,100,000 March 1, 2022 10 675,000 September 1, 2025 535,394 2,239,606 Impairment loss Intangible Assets - License Agreement On October 1, 2020, the Company entered into an option agreement which gave the Company rights to acquire a license for proprietary technology related to online betting. The Company paid $ 133,770 286,328 2,167 1,456,650 1,876,748 573,451 1,042,637 Impairment loss |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 7 – COMMITMENTS AND CONTINGENCIES Financial Advisor’s Claims The Company’s previous financial advisor, Boustead Securities LLC (“Advisor”) has alleged a breach by the Company over the termination of their engagement and the timing of the payment and amount of the fees owed to the Advisor (collectively the “Claims”). On June 2, 2022, the Advisor named EBET in an arbitration proceeding with Financial Industry Regulatory Authority (“FINRA”) in connection with the Claims. The Statement of Claim alleged damages of $5.7 million and sought a declaration that the Company be required to utilize the Advisor for a certain follow-on offering pursuant to an alleged right of first refusal between the parties. On August 4, 2022, EBET, Inc. counterclaimed against Boustead Securities, LLC for tortious interference with prospective economic advantage and demanded damages and attorneys’ fees in an amount to be determined. Boustead Securities, LLC’s current Second Amended Statement of Claim, filed on May 24, 2023, alleges $12 million in damages and no longer seeks declaratory relief. In response to Boustead Securities, LLC’s Second Amended Statement of Claim, Company maintains its counterclaim and all affirmative defenses previously asserted. The arbitration occurred on November 6, 2023, ended on November 8, 2023. On January 5, 2024, the arbitration panel awarded the Advisor $15.2 million in damages and attorneys’ fees. The Company has accrued the awarded amounts in the accompanying consolidated balance sheet, included in Accounts Payable and Accrued Liabilities. The Company recognized expense of $ 11,597,240 Other Contingencies On June 26, 2023, a former vendor of the Company, Litebox USA, LLC filed a Complaint against EBET, Inc. alleging causes of action including Breach of Contract; Breach of the Implied Covenant of Good Faith and Fair Dealing; Unjust Enrichment; Quantum Meruit; Promissory Estoppel; Open Book Account/Account Stated; and other causes of action. The action stems from an alleged nonpayment pursuant to a Master Service Agreement and three separate Statements of Work for the alleged development of software thereunder. EBET, Inc. filed a demurrer to this Complaint and the hearing on same is set for June 2024. EBET intends to vigorously defend this matter. On September 28, 2023, EBET, INC. filed a lawsuit in the State of Nevada against Aspire Global PLC, AG Communications and affiliated entities asserting damages in an amount of no less than 65,000,000 Euro plus punitive and other damages proven at trial (“Aspire Litigation”) and including causes of action against Aspire and the other defendants for fraud and material breach of the share purchase agreement whereon the Company had acquired the i-gaming B2C assets including the Karamba, Hopa, Griffon Casino, BetTarget, Dansk777, and GenerationVIP domains, sites, player database and other related assets and also related to the operator service agreements and Promissory Note entered concurrent with the closing of the share purchase agreement. On November 7, 2023, Aspire and the other defendants removed the subject matter to the United States District Court for the District of Nevada. The Aspire Litigation is material to the Company and the result of such litigation is highly likely to have a material impact on the Company going forward. Other Commitments During June 2023, the Compensation Committee of the Company’s Board of Directors, the recently formed Strategic Alternatives Committee of the Board, and the Board reviewed and considered, and discussed with the Company’s executive officers, a plan to retain the Company’s executives through the conclusion of the Company’s strategic process by providing these officers with appropriate financial incentives to do so. In that regard, the Board and the Committees considered advice provided by the Company’s compensation consultant, Frederick W. Cook & Co., Inc. (“FW Cook”) and used FW Cook’s recommendations as part of their decision-making process in arriving at what the Board and the Committees regard as appropriate to achieve the Company’s retention goals. On June 30, 2023, the Compensation Committee and the Strategic Alternatives Committee reviewed and approved an executive retention plan, the Strategic Alternatives Committee recommended that the full Board approve it, and the Board did so. On June 30, 2023, the Compensation Committee and the Strategic Alternatives Committee reviewed and approved the payment of compensation to members of the Strategic Alternatives Committee in addition to the Company’s standard compensation arrangements for non-employee directors, the Strategic Alternatives Committee recommended that the full Board approve it, and the Board did so. The directors who are members of the Strategic Alternatives Committee are Christopher Downs (the Chairman), Dennis Neilander and Michael Nicklas. Under this plan, the Chairman of the committee will receive a monthly retainer of $ 15,000 12,000 Following the approval of the executive retention plan by the Committees and the Board and in accordance with the executive retention plan, on June 30, 2023, the Company agreed to enter into amendments to the employment agreements (each, a “Retention Letter”), with each of Aaron Speach, the Company’s Chief Executive Officer, and Matthew Lourie, the Company’s Chief Financial Officer. Pursuant to the Retention Letters, (a) Mr. Speach will be entitled to receive a cash retention bonus of $175,000 payable 20% upon execution of the Retention Letter, 40% after three months, and the remainder after six months, and (b) Mr. Lourie will be entitled to an increase in his base salary to $320,000 and to receive a cash retention bonus of $240,000 payable 20% upon execution of the Retention Letter, 30% after three months, 30% after six months, and the remainder after nine months. Any unpaid retention bonus will be paid earlier if the Company completes a strategic transaction (a “Transaction”), or if the executive is terminated without “cause”. In addition, pursuant to the Retention Letters, each of Mr. Speach and Mr. Lourie will be eligible to receive a cash transaction bonus equal to 0.95% of the gross proceeds of any Transaction, provided that the net proceeds from the Transaction are at least $26.0 million; and further provided that the executive may receive an additional 0.25% of the gross proceeds if the net proceeds from the Transaction are not less than the amount that would result in (a) the Company repaying its outstanding debt and all trade creditors, and (b) the Series A preferred holders and common shareholders receiving consideration of not less than the value of their equity holdings as of June 30, 2023 (the “Deal Threshold”). If Mr. Speach and Mr. Lourie are terminated without “cause” prior to June 30, 2024, the Company agreed to pay a cash severance payment of: (a) with respect to Mr. Speach, the greater of 1.0 times Mr. Speach’s base salary or the severance payable pursuant to Mr. Speach’s current employment agreement; and (b) with respect to Mr. Lourie, 0.5 times Mr. Lourie’s base salary. In addition to the amounts payable to Messrs. Speach and Lourie set forth above, the Company also agreed on June 30, 2023 to pay additional retention bonuses under the executive retention plan to two consultants and advisors of up to $ 310,000 26 |
TRANSACTION WITH RELATED PARTIE
TRANSACTION WITH RELATED PARTIES | 12 Months Ended |
Sep. 30, 2023 | |
Related Party Transactions [Abstract] | |
TRANSACTION WITH RELATED PARTIES | NOTE 8 – TRANSACTION WITH RELATED PARTIES On November 10, 2020, the Company entered into an employment agreement with Michael Barden, a family member of the Company’s former Chief Operating Officer, to serve as the Company’s marketing director. The employment agreement provides for an annual salary of $132,000, a technology allowance of $5,000, and an award of 1,000 shares of common stock in the Company, vesting in four equal annual installments. On August 2, 2022, Mr. Barden’s employment was terminated. The Company engaged a firm owned by Matthew Lourie, the Company’s Chief Financial Officer to provide financial reporting services. For the years ended September 30, 2023 and 2022, the Company incurred consulting fees of $ 72,658 18,273 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 9 – INCOME TAXES Deferred taxes are determined by applying the provisions of enacted tax laws and rates for the jurisdictions in which the Company operates to the estimated future tax effects of the differences between the tax basis of assets and liabilities and their reported amounts in the Company's consolidated financial statements. A valuation allowance is established to reduce deferred tax assets if it is more likely than not that the related tax benefits will not be realized. The reconciliation of the provision for income taxes at the United States federal statutory rate compared to the Company’s income tax expense as reported is as follows: Schedule of reconciliation of provision for income taxes Year Ended Year Ended Income tax benefit computed at the statutory rate $ 17,691,000 $ 8,700,000 Non-deductible expenses (12,221,000 ) (2,696,000 ) Return to provision adjustment (175,000 ) – Change in valuation allowance (5,295,000 ) (6,004,000 ) Provision for income taxes $ – $ – Significant components of the Company’s deferred tax assets after applying enacted corporate income tax rates are as follows: Schedule of deferred tax assets As of As of Deferred income tax assets: Net operating losses $ 13,295,000 $ 8,000,000 Valuation allowance (13,295,000 ) (8,000,000 ) Net deferred income tax assets $ – $ – The Company has an operating loss carry forward of approximately $ 52,595,000 The Company has recorded no liability for income taxes associated with unrecognized tax benefits at the date of adoption and has not recorded any liability associated with unrecognized tax benefits during 2023 and 2022. Accordingly, the Company has not recorded any interest or penalty in regard to any unrecognized benefit. |
LOSS PER COMMON SHARE
LOSS PER COMMON SHARE | 12 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
LOSS PER COMMON SHARE | NOTE 10 – LOSS PER COMMON SHARE The basic net loss per common share is calculated by dividing the Company's net loss available to common shareholders by the weighted average number of common shares during the year. The diluted net loss per common share is calculated by dividing the Company's net loss available to common shareholders by the diluted weighted average number of common shares outstanding during the year. The diluted weighted average number of common shares outstanding is the basic weighted number of common shares adjusted for any potentially dilutive debt or equity. For the years ended September 30, 2022 and 2023, common shares issuable under preferred stock ( 0 50,361 113,567 171,733 20,287 65,907 435,491 201,137 Schedule of loss per common share Year Ended September 30, 2023 September 30, 2022 Numerator: Net income (loss) $ (84,243,877 ) $ (41,427,609 ) Preferred stock dividends (4,086,819 ) (4,750,585 ) Net income (loss) attributable to common stockholders $ (88,330,696 ) $ (46,178,194 ) Denominator: Basic and diluted weighted average common shares 2,740,990 494,655 Basic and diluted net income (loss) per common share $ (32.23 ) $ (93.35 ) |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Sep. 30, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 11 – SUBSEQUENT EVENTS On October 12, 2023, the Company received written notice (the “Notice”) from the Nasdaq Stock Market, LLC (“Nasdaq”) that it would delist the Company’s shares of common stock from the Nasdaq Capital Market upon the opening of trading on October 13, 2023. The Company’s common stock was traded on the OTC Pink Sheets until December 6, 2023, when the Company was uplisted to the OTCQB exchange. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation The basis of accounting applied is United States generally accepted accounting principles (“US GAAP”). All amounts included in these financial statements and footnotes are expressed in U.S. Dollars, unless otherwise noted. The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts, transactions and balances have been eliminated in consolidation. Certain reclassifications have been made to prior period amounts to conform to the current year presentation. |
Business combinations | Business combinations The Company accounts for business combinations under the acquisition method of accounting, in accordance with ASC 805, which requires assets acquired and liabilities assumed to be recognized at their fair values as of the acquisition date. Any fair value of purchase consideration in excess of the fair value of the assets acquired less liabilities assumed is recorded as goodwill. The fair values of the assets acquired, and liabilities assumed are determined based upon the valuation of the acquired business and involve management making significant estimates and assumptions. |
Use of Estimates | Use of Estimates The preparation of the financial statements in conformity with generally accepted accounting principles in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of expenses during the reporting periods. Making estimates requires management to exercise judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate could change in the near term due to one or more future confirming events. Accordingly, actual results could differ significantly from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include short-term investments with original maturities of 90 days or less at the date of purchase. The recorded value of our cash and cash equivalents approximates their fair value. |
Accounts Receivable | Accounts Receivable Accounts receivables are recorded at amortized cost, less any allowance for doubtful accounts. Accounts receivable consists primarily of amounts due from our platform provider. The receivable balance owed to the Company represents the net amount owed to the Company by Aspire related to the strategic agreement for the Company’s i-gaming platform and is stated at historical cost less any allowance for doubtful accounts. The allowance for doubtful accounts was $ 0 |
Fixed Assets, net | Fixed Assets, net Software and equipment are carried at cost, net of accumulated depreciation. Depreciation is computed utilizing the straight-line method over the estimated useful life of the asset. Additions and improvements are capitalized, while repairs and maintenance are expensed as incurred. |
Intangible Assets | Intangible Assets The Company’s intangible assets consist primarily of customer relationships, trademarks and internet domain names. Certain intangible assets have a defined useful life and others are classified as indefinite-lived intangible assets. Other intangible assets with a defined useful life are amortized over their estimated useful economic lives on a straight-line basis. An intangible asset with an indefinite useful life is not amortized but assessed for impairment annually, or more frequently, when events or changes in circumstances occur indicating that it is more likely than not that the indefinite-lived asset is impaired. Impairment exists when the carrying amount exceeds its fair value. In testing for impairment, the Company has the option to first perform a qualitative assessment to determine whether it is more likely than not that an impairment exists. If it is determined that it is more likely than not that an impairment exists, a quantitative impairment test is not necessary. If the Company concludes otherwise, it is required to perform a quantitative impairment test. To the extent an impairment loss is recognized, the loss establishes the new cost basis of the asset. Subsequent reversal of impairment losses is not permitted. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Long-lived assets consist of software and equipment, finite-lived acquired intangible assets, such as license agreements, and indefinite-lived assets such as internet domain names. Long-lived assets are tested for recoverability whenever events or changes in business circumstances indicate that the carrying amount of the asset may not be fully recoverable. Impairment expense is recognized to the extent an asset’s expected undiscounted future cash flows are less than the asset’s carrying amount. As of September 30, 2023, the Company determined that it’s intangible assets and goodwill were impaired and recognized an impairment loss of $ 44,917,891 24,790,233 20,127,658 3,851,503 3,282,243 569,260 |
Leases | Leases The Company accounts for leases under ASC 842. The Company assesses whether a contract contains a lease on its execution date. If the contract contains a lease, lease classification is assessed upon its commencement date under ASC 842. For leases that are determined to qualify for treatment as operating leases, rent expense is recognized on a straight-line basis over the lease term. Leases that are determined to qualify for treatment as finance leases recognize interest expense as determined using the effective interest method with corresponding amortization of the right-of-use assets. For leases with terms of 12 months and greater, an asset and liability are initially recorded at an amount equal to the present value of the unpaid lease payments over the lease term. In determining the lease term for each lease, the Company includes options to extend the lease when it is reasonably certain that the option will be exercised. The Company uses the interest rate implicit in the lease, when known, or its estimated incremental borrowing rate, which is derived from information available at the lease commencement date including prevailing financial market conditions, in determining the present value of the unpaid lease payments. The Company’s only significant lease was for office space in Malta, which had a two-year lease term beginning August 1, 2021, and is classified as an operating lease. The lease has an option to extend the term for an additional two years with a 10% increase in annual rent. The Company recognized a right of use asset and lease liability of $ 381,346 The following table summarizes the lease-related assets and liabilities recorded in the consolidated balance sheets at September 30, 2023 and 2022: Schedule of lease-related assets and liabilities September 30, 2023 September 30, 2022 Operating Leases: Operating lease right-of-use assets $ – $ 129,975 Right of use liability operating lease current portion $ – $ 129,974 Right of use liability operating lease long term – – Total operating lease liabilities $ – $ 129,974 Operating lease expense was $ 142,375 201,978 |
Liabilities to Users | Liabilities to Users The Company records liabilities for user account balances at a given reporting period based on deposits made by players either to the Company or the sales affiliate, less any losses on wagers and payout made to players. Liabilities to users amounts are not required to be backed by cash reserves of the Company. The user balances are maintained by the Company’s third-party platform provider, and the Company has an asset of an equivalent amount included within Prepaid expense and other current assets |
Revenue Recognition | Revenue Recognition The Company recognizes revenue in accordance with ASC Topic 606, Revenue From Contracts With Customers · Identification of the contract with a customer · Identification of the performance obligations in the contract · Determination of the transaction price · Allocation of the transaction price to the performance obligations in the contract · Recognition of revenue when, or as, the Company satisfies a performance obligation No single customer accounted for more than 10% of revenue for the years ended September 30, 2023 and 2022. In addition, no disaggregation of revenue is required because all current revenue is generated from gaming revenue. i-gaming, or online casino, typically includes digital versions of wagering games available in land-based casinos, such as blackjack, roulette and slot machines. For these offerings, the Company functions similarly to land-based casinos, generating revenue through casino hold, as users play against the house. i-gaming revenue is generated from user wagers net of payouts made on users’ winning wagers and incentives awarded to users. Sportsbook or sports betting involves a user wagering money on an outcome or series of outcomes occurring. When a user’s wager wins, the Company pays the user a pre-determined amount known as fixed odds. Sportsbook revenue is generated by setting odds such that there is a built-in theoretical margin in each sports wagering opportunity offered to users. Sportsbook revenue is generated from users’ wagers net of payouts made on users’ winning wagers and incentives awarded to users. Performance Obligations The Company operates an online betting platform allowing users to place wagers on a variety of live sporting events, i-gaming and esports events. Each wager placed by users create a single performance obligation for the Company to administer each event wagered. The performance obligation is satisfied once the event wagered on has been completed. Gross gaming revenue is the aggregate of gaming wins and losses based on results of each event that customers wager bets on. Transaction Price Considerations Variability in the transaction price arises primarily due to market-based pricing, cash discounts, revenue sharing and usage-based fees. The Company offers loyalty programs, free plays, deposit bonuses, discounts, rebates and other rewards and incentives to its customers. Revenue for Sportsbook and i-gaming is collected prior to the contest or event and is fixed once the outcome is known. Prizes paid and payouts made to users are recognized when awarded to the player. |
Cost of Revenue | Cost of Revenue Cost of revenue consists of third-party costs associated with the betting software platform and gaming taxes. |
Sales and Marketing Expenses | Sales and Marketing Expenses Sales and marketing expenses consist primarily of expenses associated with amounts paid to affiliates, advertising and related software, strategic league and team partnerships and costs related to free to play contests, and the compensation of sales and marketing personnel, including stock-based compensation expenses. Variable commission fees are paid to sales affiliates based on a percentage of revenue generated from the affiliate. The commissions rebated to affiliates are recorded as a component of marketing expense. Advertising costs are expensed as incurred. |
Product and Technology Expenses | Product and Technology Expenses Product and technology expenses consist primarily of expenses which are not subject to capitalization or otherwise classified within Cost of Revenue. Product and Technology expenses include software licenses, depreciation of hardware and software and costs related to the compensation of product and technology personnel, including stock-based compensation. |
General and Administrative Expenses | General and Administrative Expenses General and administrative expenses include costs related to the compensation of the Company’s administrative functions, insurance costs, professional fees and consulting expense. |
Income Taxes | Income Taxes Deferred taxes are determined utilizing the "asset and liability" method, whereby deferred tax asset and liability account balances are determined based on differences between financial reporting and the tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance, when it's more likely than not that deferred tax assets will not be realized in the foreseeable future. Deferred tax liabilities and assets are classified as current or non-current based on the underlying asset or liability or if not directly related to and asset or liability based on the expected reversal dates of the specific temporary differences. |
Fair value of financial instruments | Fair value of financial instruments The Company discloses fair value measurements for financial and non-financial assets and liabilities measured at fair value. Fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The accounting standard establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described below: Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. Level 2: Observable prices that are based on inputs not quoted on active markets but are corroborated by market data. Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. The following tables set forth the fair value of the Company’s financial assets and liabilities measured at fair value as of September 30, 2023 and 2022 based on the three-tier fair value hierarchy: Schedule of fair value of financial assets and liabilities Fair Value Measurements at September 30, 2023 Level 1 Level 2 Level 3 Assets Cash $ 304,709 $ – $ – Total assets 304,709 – – Liabilities Senior Notes, net of discount – 26,350,630 – Revolving line of credit – 1,690,000 – Note due to Aspire – 10,594,000 – Convertible notes payable, net of discount – 617,500 – Other notes payable, net of discount – 559,597 – Total liabilities $ – $ 39,811,727 $ – Fair Value Measurements at September 30, 2022 Level 1 Level 2 Level 3 Assets Cash $ 5,486,210 $ – $ – Derivative asset – 1,116,153 – Total assets 5,486,210 1,116,153 – Liabilities Senior Notes, net of discount – 19,595,694 – Note due to Aspire – 9,748,000 – Convertible notes payable, net of discount – 1,606,891 – Other notes payable, net of discount – 509,520 – Total liabilities $ – $ 31,460,105 $ – |
Derivative Instruments | Derivative Instruments The Company accounts for its derivative financial instruments in accordance with ASC Topic 815, Derivatives and Hedging Fair Value Measurements and Disclosures . The Company's derivative instruments do not subject its earnings or cash flows to material risk, as gains and losses on these derivatives are intended to offset losses and gains on the item being hedged. The Company does not enter into derivative transactions for speculative purposes and it does not have any non-derivative instruments that are designated as hedging instruments pursuant to ASC 815. The Company manages the credit risk of its counterparties by dealing only with institutions that it considers financially sound and considers the risk of non-performance to be remote. The Company entered into foreign exchange forward contracts to mitigate the change in fair value of specific liabilities and cash flows on the Consolidated Balance Sheets that were denominated in Euros related to the acquisition of the Aspire B2C business in November 2021. These undesignated hedging instruments are recorded at fair value as a derivative asset or liability on the Consolidated Balance Sheets with their corresponding change in fair value recognized in Other income (expense), net. The cash flows related to the gains and losses are classified in the consolidated statements of cash flows as part of cash flows from operating activities. The total notional amount of outstanding undesignated derivative instruments was $ 16,050,000 142,187 1,239,510 |
Foreign Currency | Foreign Currency The Company’s reporting currency is the U.S. Dollar. Certain subsidiaries of the Company have a functional currency other than the U.S. Dollar and are translated to the Company’s reporting currency at each reporting date. Non-monetary items are translated at historical rates. Monetary assets and liabilities are translated from British Pounds Sterling and Euro into U.S. Dollars, at the period-end exchange rate, while foreign currency expenses are translated at the exchange rate in effect on the date of the transaction. The net effect of translation is reflected as other comprehensive income. The gains or losses on transactions denominated in currencies other than an entity’s functional currency are included in the consolidated statement of operations. |
Earnings per share | Earnings per share The Company computes earnings per share in accordance with Accounting Standards Codification Topic 260 – Earnings per Share (Topic 260). Topic 260 requires presentation of both basic and diluted earnings per shares (EPS) on the face of the income statement. The basic net loss per common share is calculated by dividing the Company’s net loss available to common shareholders by the weighted average number of common shares during the year. The diluted net loss per common share is calculated by dividing the Company’s net loss available to common shareholders by the diluted weighted average number of common shares outstanding during the year. The diluted weighted average number of common shares outstanding is the basic weighted number of common shares adjusted for any potentially dilutive debt or equity. |
Embedded Conversion Features | Embedded Conversion Features The Company evaluates embedded conversion features within convertible debt under ASC 815 “Derivatives and Hedging” to determine whether the embedded conversion feature(s) should be bifurcated from the host instrument and accounted for as a derivative at fair value with changes in fair value recorded in earnings. If the conversion feature does not require derivative treatment under ASC 815, the instrument is evaluated under ASC 470-20 “Debt with Conversion and Other Options.” Under the ASC 470-20, an entity must separately account for the liability and equity components of the convertible debt instruments that may be settled entirely or partially in cash upon conversion in a manner that reflects the issuer’s economic interest cost. The effect of ASC 470-20 on the accounting for our convertible debt instruments is that the equity component is required to be included in the additional paid-in capital section of stockholders’ equity on the consolidated balance sheets and the value of the equity component is treated as original issue discount for purposes of accounting for the debt component of the notes. As a result, the Company is required to record non-cash interest expense as a result of the amortization of the discounted carrying value of the convertible debt to their face amount over the term of the convertible debt. We report higher interest expense in our financial results because ASC 470-20 requires interest to include both the current period’s amortization of the debt discount and the instrument’s coupon interest. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standard Board (“FASB”) or other standard setting bodies that the Company adopts as of the specified effective date. The Company does not believe that the impact of recently issued standards that are not yet effective will have a material impact on the Company’s financial position or results of operations upon adoption. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Schedule of lease-related assets and liabilities | Schedule of lease-related assets and liabilities September 30, 2023 September 30, 2022 Operating Leases: Operating lease right-of-use assets $ – $ 129,975 Right of use liability operating lease current portion $ – $ 129,974 Right of use liability operating lease long term – – Total operating lease liabilities $ – $ 129,974 |
Schedule of fair value of financial assets and liabilities | Schedule of fair value of financial assets and liabilities Fair Value Measurements at September 30, 2023 Level 1 Level 2 Level 3 Assets Cash $ 304,709 $ – $ – Total assets 304,709 – – Liabilities Senior Notes, net of discount – 26,350,630 – Revolving line of credit – 1,690,000 – Note due to Aspire – 10,594,000 – Convertible notes payable, net of discount – 617,500 – Other notes payable, net of discount – 559,597 – Total liabilities $ – $ 39,811,727 $ – Fair Value Measurements at September 30, 2022 Level 1 Level 2 Level 3 Assets Cash $ 5,486,210 $ – $ – Derivative asset – 1,116,153 – Total assets 5,486,210 1,116,153 – Liabilities Senior Notes, net of discount – 19,595,694 – Note due to Aspire – 9,748,000 – Convertible notes payable, net of discount – 1,606,891 – Other notes payable, net of discount – 509,520 – Total liabilities $ – $ 31,460,105 $ – |
BUSINESS COMBINATION (Tables)
BUSINESS COMBINATION (Tables) - Aspire Related Companies [Member] | 12 Months Ended |
Sep. 30, 2023 | |
Business Acquisition [Line Items] | |
Schedule of allocation of purchase price | Schedule of allocation of purchase price Fair Value Trademarks $ 21,836,528 Customer relationships 16,162,202 Goodwill 35,620,270 Total $ 73,619,000 |
Schedule of acquisition costs | Schedule of acquisition costs Debt issuance costs $ 3,372,889 Equity issuance costs $ 4,184,000 Transaction expenses $ 2,240,147 |
Schedule of business combination proforma results | Schedule of business combination proforma results Fiscal Year Ended September 30, 2023 September 30, 2022 Revenue $ 39,177,504 $ 68,628,158 Operating loss (65,708,506 ) (32,488,215 ) Net loss (84,243,877 ) (42,698,109 ) Net loss attributable to common shareholders (88,330,696 ) (48,398,814 ) Loss per common share - basic and diluted $ (32.23 ) $ (97.84 ) |
BORROWINGS (Tables)
BORROWINGS (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of borrowings outstanding | Schedule of borrowings outstanding September 30, 2023 Contractual Interest Principal outstanding balance Principal outstanding balance Unamortized Issuance costs Issuance costs Accrued Interest rate Cur Local USD USD USD USD USD Senior Note 15.0 USD 26,350,630 26,350,630 – – 26,350,630 – Revolving Note 15.0 USD 1,690,000 1,690,000 – – 1,690,000 – Note due to Aspire 10 EUR 10,000,000 10,594,000 – – 10,594,000 2,049,029 Convertible notes 10 USD 617,500 617,500 – – 617,500 62,681 Other 0 USD 675,000 675,000 (115,403 ) – 559,597 – Total borrowings 39,927,130 (115,403 ) – 39,811,727 2,111,710 Current 39,252,130 2,111,710 Long-term 559,597 – Total borrowings 39,811,727 2,111,710 September 30, 2022 Contractual Interest Principal outstanding balance Principal outstanding balance Unamortized debt discount Issuance costs Carrying Amount Accrued Interest rate Cur Local USD USD USD USD USD Senior notes 15 USD 30,558,446 30,558,446 (8,526,776 ) (2,435,976 ) 19,595,694 – Note due to Aspire 10 EUR 10,000,000 9,748,000 – – 9,748,000 888,343 Convertible notes 10 USD 1,606,891 1,606,891 – – 1,606,891 200,947 Other 0 USD 675,000 675,000 (165,480 ) – 509,520 – Total borrowings 42,588,337 (8,692,256 ) (2,435,976 ) 31,460,105 1,089,290 Current 21,202,585 1,089,290 Long-term 10,257,520 – Total borrowings 31,460,105 1,089,290 |
STOCKHOLDERS_ EQUITY (Tables)
STOCKHOLDERS’ EQUITY (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
Schedule of warrant activity | Schedule of warrant activity Common Stock Warrants Shares Weighted Weighted Outstanding at September 30, 2021 73,321 $ 27.76 4.04 Granted 158,730 344.92 5.00 Cancelled – – – Expired – – – Exercised (30,914 ) 53.30 – Outstanding at September 30, 2022 201,137 $ 274.05 4.01 Granted 234,354 75.32 5.00 Cancelled – – – Expired – – – Exercised – – – Outstanding at September 30, 2023 435,491 $ 122.04 3.91 Exercisable at September 30, 2023 435,491 $ 122.04 3.91 |
Schedule of option activity | Schedule of option activity Common Stock Options Shares Weighted Weighted Outstanding at September 30, 2021 82,489 $ 84.27 7.95 Granted 1,837 841.90 10.00 Cancelled/Forfeited (16,525 ) 244.50 – Exercised (1,894 ) 7.50 – Outstanding at September 30, 2022 65,907 $ 67.41 7.33 Granted – – – Cancelled/Forfeited (45,620 ) 46.90 – Exercised – – – Outstanding at September 30, 2023 20,287 $ 113.55 5.37 Exercisable at September 30, 2023 17,830 $ 94.83 5.07 |
LONG-LIVED ASSETS (Tables)
LONG-LIVED ASSETS (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of fixed assets | Schedule of fixed assets September 30, 2023 September 30, 2022 Software $ 264,850 $ 391,851 Furniture and fixtures 388,226 368,432 Total fixed assets 653,076 760,283 Accumulated depreciation (491,863 ) (213,875 ) Fixed assets, net $ 161,213 $ 546,408 |
Schedule of intangible assets acquired | Schedule of intangible assets acquired September 30, 2023 September 30, 2022 Trademarks and tradenames, indefinite lives $ 2,210,000 $ 14,232,080 Trademarks and tradenames, three year lives 4,533,030 4,562,064 Customer relationships – 13,910,396 Other 12,693 10,493 Total acquired intangibles 6,755,723 32,715,033 Accumulated amortization (3,054,114 ) (5,169,704 ) Acquired intangible assets, net $ 3,701,609 $ 27,545,329 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of reconciliation of provision for income taxes | Schedule of reconciliation of provision for income taxes Year Ended Year Ended Income tax benefit computed at the statutory rate $ 17,691,000 $ 8,700,000 Non-deductible expenses (12,221,000 ) (2,696,000 ) Return to provision adjustment (175,000 ) – Change in valuation allowance (5,295,000 ) (6,004,000 ) Provision for income taxes $ – $ – |
Schedule of deferred tax assets | Schedule of deferred tax assets As of As of Deferred income tax assets: Net operating losses $ 13,295,000 $ 8,000,000 Valuation allowance (13,295,000 ) (8,000,000 ) Net deferred income tax assets $ – $ – |
LOSS PER COMMON SHARE (Tables)
LOSS PER COMMON SHARE (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of loss per common share | Schedule of loss per common share Year Ended September 30, 2023 September 30, 2022 Numerator: Net income (loss) $ (84,243,877 ) $ (41,427,609 ) Preferred stock dividends (4,086,819 ) (4,750,585 ) Net income (loss) attributable to common stockholders $ (88,330,696 ) $ (46,178,194 ) Denominator: Basic and diluted weighted average common shares 2,740,990 494,655 Basic and diluted net income (loss) per common share $ (32.23 ) $ (93.35 ) |
ORGANIZATION, NATURE OF OPERA_2
ORGANIZATION, NATURE OF OPERATIONS AND GOING CONCERN (Details Narrative) | 12 Months Ended | |||
Sep. 29, 2023 | Oct. 02, 2021 GBP (£) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | |
Restructuring Cost and Reserve [Line Items] | ||||
Stockholders' Equity, Reverse Stock Split | one-for-thirty (1:30) reverse stock split | |||
Payments to Acquire Businesses, Gross | $ | $ 0 | $ 56,235,526 | ||
Aspire Related Companies [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Business Combination, Consideration Transferred | £ 65,000,000 | |||
Payments to Acquire Businesses, Gross | 50,000,000 | |||
Notes Issued | 10,000,000 | |||
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable | £ 5,000,000 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details - Lease-related assets and liabilities) - USD ($) | Sep. 30, 2023 | Sep. 30, 2022 |
Operating Leases: | ||
Operating lease right-of-use assets | $ 0 | $ 129,975 |
Right of use liability operating lease current portion | 0 | 129,974 |
Right of use liability operating lease long term | 0 | 0 |
Total operating lease liabilities | $ 0 | $ 129,974 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details - Fair Value of assets and liabilities) - USD ($) | Sep. 30, 2023 | Sep. 30, 2022 |
Fair Value, Inputs, Level 1 [Member] | ||
Assets | ||
Cash | $ 304,709 | $ 5,486,210 |
Derivative asset | 0 | |
Total assets | 304,709 | 5,486,210 |
Liabilities | ||
Senior Notes, net of discount | 0 | 0 |
Revolving line of credit | 0 | |
Note due to Aspire | 0 | 0 |
Convertible notes payable, net of discount | 0 | 0 |
Other notes payable, net of discount | 0 | 0 |
Total liabilities | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | ||
Assets | ||
Cash | 0 | 0 |
Derivative asset | 1,116,153 | |
Total assets | 0 | 1,116,153 |
Liabilities | ||
Senior Notes, net of discount | 26,350,630 | 19,595,694 |
Revolving line of credit | 1,690,000 | |
Note due to Aspire | 10,594,000 | 9,748,000 |
Convertible notes payable, net of discount | 617,500 | 1,606,891 |
Other notes payable, net of discount | 559,597 | 509,520 |
Total liabilities | 39,811,727 | 31,460,105 |
Fair Value, Inputs, Level 3 [Member] | ||
Assets | ||
Cash | 0 | 0 |
Derivative asset | 0 | |
Total assets | 0 | 0 |
Liabilities | ||
Senior Notes, net of discount | 0 | 0 |
Revolving line of credit | 0 | |
Note due to Aspire | 0 | 0 |
Convertible notes payable, net of discount | 0 | 0 |
Other notes payable, net of discount | 0 | 0 |
Total liabilities | $ 0 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 12 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Aug. 01, 2021 | |
Impairment Effects on Earnings Per Share [Line Items] | |||
Allowance for doubtful accounts | $ 0 | $ 0 | |
Impairment loss | 44,917,891 | 3,851,503 | |
Operating lease liability | 0 | 129,974 | |
Operating lease expense | 142,375 | 201,978 | |
Derivative instruments notional amount | 16,050,000 | ||
Derivative loss on derivative | 142,187 | ||
Derivative gain on derivative | 1,239,510 | ||
Malta Office Space [Member] | |||
Impairment Effects on Earnings Per Share [Line Items] | |||
Operating lease liability | $ 381,346 | ||
Property And Equipment [Member] | |||
Impairment Effects on Earnings Per Share [Line Items] | |||
Impairment loss | 20,127,658 | 569,260 | |
Intangible Assets [Member] | |||
Impairment Effects on Earnings Per Share [Line Items] | |||
Impairment loss | $ 3,282,243 | ||
Goodwill [Member] | |||
Impairment Effects on Earnings Per Share [Line Items] | |||
Impairment loss | $ 24,790,233 |
BUSINESS COMBINATIONS - (Detai
BUSINESS COMBINATIONS - (Details) - USD ($) | Sep. 30, 2023 | Sep. 30, 2022 | Oct. 02, 2021 |
Business Acquisition [Line Items] | |||
Goodwill | $ 8,962,652 | $ 30,657,460 | |
Total | $ 6,755,723 | $ 32,715,033 | |
Aspire Related Companies [Member] | |||
Business Acquisition [Line Items] | |||
Trademarks | $ 21,836,528 | ||
Customer relationships | 16,162,202 | ||
Goodwill | 35,620,270 | ||
Total | $ 73,619,000 |
BUSINESS COMBINATIONS - (Detail
BUSINESS COMBINATIONS - (Details 1) | Oct. 02, 2021 USD ($) |
Business Combination and Asset Acquisition [Abstract] | |
Debt issuance costs | $ 3,372,889 |
Equity issuance costs | 4,184,000 |
Transaction expenses | $ 2,240,147 |
BUSINESS COMBINATIONS - (Deta_2
BUSINESS COMBINATIONS - (Details 2) - USD ($) | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | ||
Revenue | $ 39,177,504 | $ 68,628,158 |
Operating loss | (65,708,506) | (32,488,215) |
Net loss | (84,243,877) | (42,698,109) |
Net loss attributable to common shareholders | $ (88,330,696) | $ (48,398,814) |
Loss per common share - basic and diluted | $ (32.23) | $ (97.84) |
BUSINESS COMBINATION (Details N
BUSINESS COMBINATION (Details Narrative) | 12 Months Ended | ||
Oct. 02, 2021 GBP (£) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | |
Business Acquisition [Line Items] | |||
Payments to Acquire Businesses, Gross | $ | $ 0 | $ 56,235,526 | |
Aspire Related Companies [Member] | |||
Business Acquisition [Line Items] | |||
Business Combination, Consideration Transferred | £ 65,000,000 | ||
Payments to Acquire Businesses, Gross | 50,000,000 | ||
Notes Issued | 10,000,000 | ||
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable | £ 5,000,000 |
BORROWINGS (Details)
BORROWINGS (Details) | Sep. 30, 2023 USD ($) | Sep. 30, 2023 EUR (€) | Sep. 30, 2022 USD ($) | Sep. 30, 2022 EUR (€) |
Debt Instrument [Line Items] | ||||
Current | $ 39,252,130 | $ 21,202,585 | ||
Long-term | 559,597 | 10,257,520 | ||
Total borrowings | 39,811,727 | 31,460,105 | ||
Accrued Liabilities [Member] | ||||
Debt Instrument [Line Items] | ||||
Current | 2,111,710 | 1,089,290 | ||
Long-term | 0 | 0 | ||
Total borrowings | $ 2,111,710 | $ 1,089,290 | ||
Senior Notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Contractual interest rate | 15% | 15% | 15% | 15% |
Principal outstanding balance | $ 26,350,630 | $ 30,558,446 | ||
Unamortized debt discount | 0 | (8,526,776) | ||
Issuance costs | 0 | (2,435,976) | ||
Carrying amount | 26,350,630 | 19,595,694 | ||
Accrued Interest | $ 0 | $ 0 | ||
Revolving Note [Member] | ||||
Debt Instrument [Line Items] | ||||
Contractual interest rate | 15% | 15% | ||
Principal outstanding balance | $ 1,690,000 | |||
Unamortized debt discount | 0 | |||
Issuance costs | 0 | |||
Carrying amount | 1,690,000 | |||
Accrued Interest | $ 0 | |||
Note Due To Aspire [Member] | ||||
Debt Instrument [Line Items] | ||||
Contractual interest rate | 10% | 10% | 10% | 10% |
Principal outstanding balance | $ 10,594,000 | € 10,000,000 | $ 9,748,000 | € 10,000,000 |
Unamortized debt discount | 0 | 0 | ||
Issuance costs | 0 | 0 | ||
Carrying amount | 10,594,000 | 9,748,000 | ||
Accrued Interest | $ 2,049,029 | $ 888,343 | ||
Convertible Notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Contractual interest rate | 10% | 10% | 10% | 10% |
Principal outstanding balance | $ 617,500 | $ 1,606,891 | ||
Unamortized debt discount | 0 | 0 | ||
Issuance costs | 0 | 0 | ||
Carrying amount | 617,500 | 1,606,891 | ||
Accrued Interest | $ 62,681 | $ 200,947 | ||
Other Borrowings [Member] | ||||
Debt Instrument [Line Items] | ||||
Contractual interest rate | 0% | 0% | 0% | 0% |
Principal outstanding balance | $ 675,000 | $ 675,000 | ||
Unamortized debt discount | (115,403) | (165,480) | ||
Issuance costs | 0 | 0 | ||
Carrying amount | 559,597 | 509,520 | ||
Accrued Interest | 0 | 0 | ||
Total Borrowings [Member] | ||||
Debt Instrument [Line Items] | ||||
Principal outstanding balance | 39,927,130 | 42,588,337 | ||
Unamortized debt discount | (115,403) | (8,692,256) | ||
Issuance costs | 0 | (2,435,976) | ||
Carrying amount | 39,811,727 | 31,460,105 | ||
Accrued Interest | $ 2,111,710 | $ 1,089,290 |
BORROWINGS (Details Narrative)
BORROWINGS (Details Narrative) - USD ($) | 10 Months Ended | 12 Months Ended | ||||||||||
Dec. 29, 2023 | Sep. 29, 2023 | Feb. 02, 2023 | Nov. 29, 2021 | Sep. 02, 2020 | Jun. 30, 2023 | Sep. 30, 2023 | Sep. 29, 2023 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 01, 2025 | Feb. 28, 2023 | |
Debt Instrument [Line Items] | ||||||||||||
Proceeds from Issuance or Sale of Equity | $ 6,500,000 | $ 6,500,000 | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Forfeited in Period | 77,082 | |||||||||||
Repayment of notes payable | 5,000,000 | $ 0 | ||||||||||
Lender fee | $ 40,000 | $ 40,000 | ||||||||||
Outstanding principal amount | 617,500 | |||||||||||
Accrued interest | 62,681 | |||||||||||
Amortization of debt discount | 11,012,829 | 4,778,405 | ||||||||||
Forbearance Agreement [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Repayment of credit line | 2,000,000 | |||||||||||
Revolving Note [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Line of credit amount maximum borrowing availability | $ 4,000,000 | $ 4,000,000 | ||||||||||
Line of credit maturity date | Nov. 29, 2024 | |||||||||||
Line of credit interest rate | 15% | |||||||||||
Line of credit, amount outstanding | 1,690,000 | |||||||||||
Senior Notes [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument face amount | $ 30,000,000 | |||||||||||
Payments of Debt Issuance Costs | $ 750,000 | |||||||||||
Debt Instrument, Unamortized Discount | 0 | 8,526,776 | ||||||||||
Debt issuance costs | $ 0 | $ 2,435,976 | ||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 15% | 15% | ||||||||||
Senior Notes [Member] | Warrant [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Warrants outstanding | 77,082 | |||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 508.50 | |||||||||||
Senior Note [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Proceeds from notes payable | $ 609,558 | |||||||||||
Repayment of notes payable | $ 3,000,000 | |||||||||||
Interest Expense, Debt | $ 10,962,752 | $ 4,216,442 | ||||||||||
Debt Instrument, Unamortized Discount | 0 | |||||||||||
Debt issuance costs | 0 | |||||||||||
E S E G Promissory Notes [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt Instrument, Unamortized Discount | $ 2,100,000 | |||||||||||
Convertible principal amount | $ 2,100,000 | |||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 10% | |||||||||||
Debt Instrument, Maturity Date | Mar. 01, 2022 | |||||||||||
Principal amount converted | $ 305,609 | $ 187,500 | ||||||||||
Principal amount converted into shares | 27,500 | 12,500 | ||||||||||
Accrued interest | $ 106,891 | |||||||||||
Amortization of debt discount | 50,077 | $ 561,963 | ||||||||||
E S E G Promissory Notes [Member] | Common Stock [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Principal amount converted | $ 989,391 | |||||||||||
Principal amount converted into shares | 75,179 | |||||||||||
Accrued interest | $ 138,266 | |||||||||||
E S E G Promissory Notes [Member] | Two Lenders [Member] | Forecast [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Payments from lenders | $ 675,000 | |||||||||||
E S E G Promissory Notes [Member] | Warrants [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Warrants issued shares | 67,167 |
STOCKHOLDERS' EQUITY (Details -
STOCKHOLDERS' EQUITY (Details - Warrant activity) - Warrants [Member] - $ / shares | 12 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Warrants outstanding | 201,137 | 73,321 | |
Warrants outstanding, weighted average exercise price | $ 274.05 | $ 27.76 | |
Warrants outstanding, weighted averare remaining life | 3 years 10 months 28 days | 4 years 3 days | 4 years 14 days |
Warrants granted | 234,354 | 158,730 | |
Warrants granted, weighted average exercise price | $ 75.32 | $ 344.92 | |
Warrants granted, weighted averare remaining life | 5 years | 5 years | |
Warrants cancelled | 0 | 0 | |
Warrants exercised, weighted average exercise price | $ 0 | $ 0 | |
Warrants expired | 0 | 0 | |
Warrants expired, weighted average exercise price | $ 0 | ||
Warrants exercised | 0 | (30,914) | |
Warrants exercised, weighted average exercise price | $ 53.30 | ||
Warrants outstanding | 435,491 | 201,137 | 73,321 |
Warrants outstanding, weighted average exercise price | $ 122.04 | $ 274.05 | $ 27.76 |
Warrants exercisable | 435,491 | ||
Warrants exercisable, weighted average exercise price | $ 122.04 | ||
Warrants exercisable, weighted averare remaining life | 3 years 10 months 28 days |
STOCKHOLDERS' EQUITY (Details_2
STOCKHOLDERS' EQUITY (Details - Option Activity) - Stock Options [Member] - $ / shares | 12 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Options outstanding | 65,907 | 82,489 | |
Options outstanding, weighted average exercise price | $ 67.41 | $ 84.27 | |
Options outstanding, weighted average remaining life | 5 years 4 months 13 days | 7 years 3 months 29 days | 7 years 11 months 12 days |
Options granted | 0 | 1,837 | |
Options granted, weighted average exercise price | $ 0 | $ 841.90 | |
Options granted, weighted average remaining life | 10 years | ||
Options cancelled/forfeited | (45,620) | (16,525) | |
Options cancelled/forfeited, weighted average exercise price | $ 46.90 | $ 244.50 | |
Options exercised | 0 | (1,894) | |
Options exercised, weighted average exercise price | $ 0 | $ 7.50 | |
Options exercised | 0 | 1,894 | |
Options outstanding | 20,287 | 65,907 | 82,489 |
Options outstanding, weighted average exercise price | $ 113.55 | $ 67.41 | $ 84.27 |
Options exercisable | 17,830 | ||
Options exercisable, weighted average exercise price | $ 94.83 | ||
Options exercisable, weighted average remaining life | 5 years 25 days |
STOCKHOLDERS_ EQUITY (Details N
STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($) | 12 Months Ended | ||||||
Sep. 29, 2023 | Jul. 26, 2023 | Feb. 02, 2023 | Jun. 16, 2022 | Oct. 02, 2021 | Sep. 30, 2023 | Sep. 30, 2022 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Common stock, shares authorized | 500,000,000 | 500,000,000 | |||||
Common stock, par value | $ 0.001 | $ 0.001 | |||||
Preferred stock, shares authorized | 10,000,000 | ||||||
Preferred stock, no par value | $ 0.001 | ||||||
Stockholders' Equity, Reverse Stock Split | one-for-thirty (1:30) reverse stock split | ||||||
Fees and other expenses | $ 577,018 | ||||||
Proceeds from sale of equity | $ 6,500,000 | $ 6,500,000 | |||||
Preferred stock shares outstanding | 0 | 37,700 | |||||
Stock-based compensation expense | $ 1,290,791 | $ 5,447,372 | |||||
Reclassification from APIC to warrant liability | $ 1,294,638 | ||||||
Fair value warrants issued | $ 179,713 | $ (1,114,925) | 0 | ||||
Unvested options outstanding | 2,457 | ||||||
Options expected to vest | 667 | ||||||
Senior Notes [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Debt discount | $ 0 | 8,526,776 | |||||
Common Stock Awards [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Stock-based compensation expense | 939,915 | 4,000,578 | |||||
Additional compensation cost not yet recognized | 1,541,232 | ||||||
Warrants [Member] | Senior Notes [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Fair value warrants issued | 19,467,688 | ||||||
Debt discount | 11,806,307 | ||||||
Common Stock Options [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Stock-based compensation expense | 1,288,432 | $ 1,446,794 | |||||
Additional compensation cost not yet recognized | $ 1,332,132 | ||||||
Plan 2020 [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Stock authorized under plan | 250,000 | ||||||
Stock awarded under the plan | 46,192 | ||||||
Shares remaining under the plan | 203,808 | ||||||
Placement Agent [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Fees and other expenses | $ 50,000 | ||||||
Preferred Stockholders [Member] | Warrants [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Fair value warrants issued | $ 24,171,423 | ||||||
Private Placement [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Proceeds from issuance of private placement | $ 3,500,000 | ||||||
Securities Purchase Agreements [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Stock issued new, shares issued | 212,418 | ||||||
Warrants issued new, shares | 212,418 | ||||||
June 2022 Private Placement [Member] | Preferred Stockholders [Member] | Warrants [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Fair value warrants issued | $ 504,952 | ||||||
Common Stock [Member] | Conversion Of Preferred Stock [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Stock converted, shares issued | 14,132,816 | ||||||
Common Stock [Member] | Private Placement [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Stock issued new, shares issued | 32,587 | ||||||
Warrants [Member] | Private Placement [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Warrants issued new, shares | 32,587 | ||||||
Series A Convertible Preferred Stock [Member] | Aspire Global [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Proceeds from issuance of private placement | $ 37,700,000 | ||||||
Stock issued for acquisition, shares | 37,700 | ||||||
Stock price | $ 1,000 | ||||||
Series A Preferred Stock [Member] | Conversion Of Preferred Stock [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Stock converted, shares converted | 37,700 | ||||||
Restricted Stock [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Stock converted, shares converted | 4,080 | ||||||
Common Stock [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Common stock, shares authorized | 500,000,000 | ||||||
Common stock, par value | $ 0.001 | ||||||
Stock issued new, shares issued | 212,418 | ||||||
Stock issued for acquisition, shares | 6,228 | ||||||
Stock converted, shares issued | 14,132,816 | ||||||
Preferred Stock [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Preferred stock, shares authorized | 10,000,000 | ||||||
Preferred stock, no par value | $ 0.001 | ||||||
Stock converted, shares converted | 37,700 | ||||||
Preferred stock shares outstanding | 0 |
LONG-LIVED ASSETS (Details - Fi
LONG-LIVED ASSETS (Details - Fixed Assets) - USD ($) | Sep. 30, 2023 | Sep. 30, 2022 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 653,076 | $ 760,283 |
Accumulated depreciation | (491,863) | (213,875) |
Property and equipment, net | 161,213 | 546,408 |
Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 264,850 | 391,851 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 388,226 | $ 368,432 |
LONG-LIVED ASSETS (Details - In
LONG-LIVED ASSETS (Details - Intangible assets) - USD ($) | Sep. 30, 2023 | Sep. 30, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Total acquired intangibles | $ 6,755,723 | $ 32,715,033 |
Accumulated amortization | (3,054,114) | (5,169,704) |
Acquired intangible assets, net | 3,701,609 | 27,545,329 |
Trademarks And Tradenames Indefinite Lives [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total acquired intangibles | 2,210,000 | 14,232,080 |
Trademarks And Tradenames Three Year Lives [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total acquired intangibles | 4,533,030 | 4,562,064 |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total acquired intangibles | 0 | 13,910,396 |
Other Intangible Assets [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total acquired intangibles | $ 12,693 | $ 10,493 |
LONG-LIVED ASSETS (Details Narr
LONG-LIVED ASSETS (Details Narrative) - USD ($) | 12 Months Ended | ||||
May 03, 2021 | Oct. 02, 2020 | Sep. 02, 2020 | Sep. 30, 2023 | Sep. 30, 2022 | |
Offsetting Assets [Line Items] | |||||
Useful life | 3 years | ||||
Impairment loss | $ 44,917,891 | $ 3,851,503 | |||
Depreciation expense | 432,164 | 146,797 | |||
Finite-Lived Intangible Asset, Expected Amortization, Year Two | 1,267,642 | ||||
Finite-Lived Intangible Asset, Expected Amortization, Year Three | $ 211,274 | ||||
Trademarks Tradenames And Customer Relationships [Member] | |||||
Offsetting Assets [Line Items] | |||||
Intangible useful life | 3 years | ||||
Aspire Assets [Member] | |||||
Offsetting Assets [Line Items] | |||||
Amortization of intangible assets | $ 6,539,147 | 5,949,143 | |||
Karamba Trademarks And Tradenames [Member] | |||||
Offsetting Assets [Line Items] | |||||
Intangible useful life | 3 years | ||||
Online Betting Technology [Member] | |||||
Offsetting Assets [Line Items] | |||||
Impairment loss | 1,042,637 | ||||
Amortization of intangible assets | 573,451 | ||||
Stock issued during period shares purchase of assets | 2,167 | ||||
Stock issued during period value purchase of assets | $ 1,456,650 | ||||
Intangible assets license agreements | $ 1,876,748 | ||||
Goodwill [Member] | |||||
Offsetting Assets [Line Items] | |||||
Impairment loss | $ 24,790,233 | ||||
Other Intangible Assets [Member] | |||||
Offsetting Assets [Line Items] | |||||
Impairment loss | $ 20,127,658 | ||||
Internet Domain Names [Member] | |||||
Offsetting Assets [Line Items] | |||||
Impairment loss | 2,239,606 | ||||
Debt instrument face amount | $ 2,100,000 | ||||
Debt maturity date | Mar. 01, 2022 | ||||
Debt interest rate | 10% | ||||
Debt balloon payment | $ 675,000 | ||||
Debt balloon payment date | Sep. 01, 2025 | ||||
Unamortized discount | 535,394 | ||||
Internet Domain Names [Member] | E S E G Limited [Member] | |||||
Offsetting Assets [Line Items] | |||||
Investment owned at cost | $ 2,239,606 | ||||
Property And Equipment [Member] | |||||
Offsetting Assets [Line Items] | |||||
Impairment loss | $ 20,127,658 | $ 569,260 | |||
Upon Execution Of Agreement [Member] | Online Betting Technology [Member] | |||||
Offsetting Assets [Line Items] | |||||
Payment for option | $ 133,770 | ||||
Upon Exercise Of Option [Member] | Online Betting Technology [Member] | |||||
Offsetting Assets [Line Items] | |||||
Payment for option | $ 286,328 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
General and Administrative Expense | $ 26,100,283 | $ 17,640,728 |
Two Committee Members [Member] | ||
Monthly retainer | 12,000 | |
Mr Lourie [Member] | ||
Additional retention bonuses | 310,000 | |
Net proceeds from transaction | 26,000,000 | |
Chairman [Member] | ||
Monthly retainer | 15,000 | |
Boustead Securities [Member] | ||
General and Administrative Expense | $ 11,597,240 |
TRANSACTION WITH RELATED PART_2
TRANSACTION WITH RELATED PARTIES (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Related Party Transactions [Abstract] | ||
Consulting fees | $ 72,658 | $ 18,273 |
INCOME TAXES (Details - Income
INCOME TAXES (Details - Income tax expense) - USD ($) | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||
Income tax benefit computed at the statutory rate | $ 17,691,000 | $ 8,700,000 |
Non-deductible expenses | (12,221,000) | (2,696,000) |
Return to provision adjustment | (175,000) | 0 |
Change in valuation allowance | (5,295,000) | (6,004,000) |
Provision for income taxes | $ 0 | $ 0 |
INCOME TAXES (Details - Deferre
INCOME TAXES (Details - Deferred tax assets) - USD ($) | Sep. 30, 2023 | Sep. 30, 2022 |
Deferred income tax assets: | ||
Net operating losses | $ 13,295,000 | $ 8,000,000 |
Valuation allowance | (13,295,000) | (8,000,000) |
Net deferred income tax assets | $ 0 | $ 0 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) | Sep. 30, 2023 USD ($) |
Income Tax Disclosure [Abstract] | |
Operating loss carry forward | $ 52,595,000 |
LOSS PER COMMON SHARE (Details)
LOSS PER COMMON SHARE (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Numerator: | ||
Net income (loss) | $ (84,243,877) | $ (41,427,609) |
Preferred stock dividends | (4,086,819) | (4,750,585) |
Net income (loss) attributable to common stockholders | $ (88,330,696) | $ (46,178,194) |
Denominator: | ||
Basic weighted average common shares | 2,740,990 | 494,655 |
Diluted weighted average common shares | 2,740,990 | 494,655 |
Basic net income (loss) per common share | $ (32.23) | $ (93.35) |
Diluted net income (loss) per common share | $ (32.23) | $ (93.35) |
LOSS PER COMMON SHARE (Details
LOSS PER COMMON SHARE (Details Narrative) - shares | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Preferred Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive shares | 0 | 50,361 |
Convertible Debt [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive shares | 113,567 | 171,733 |
Stock Options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive shares | 20,287 | 65,907 |
Common Stock Warrants [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive shares | 435,491 | 201,137 |