Related Party Transactions

9 Months Ended

Jun. 30, 2020

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

NOTE 6 – RELATED PARTY TRANSACTIONS

Services provided by related parties

From time to time, Craig Marshak, a director of the Company, provides consulting services to the Company. Mr. Craig Marshak is a principal of Triple Eight Markets, Inc. All professional services fee payable to Craig Marshak are paid to Triple Eight Markets, Inc. As compensation for professional services provided, the Company recognized consulting expenses of $0 and $30,000 for the three months ended June 30, 2020 and 2019, respectively, which have been included in general and administrative expense – related party on the accompanying unaudited condensed consolidated statements of operations. The Company recognized consulting expenses of $0 and $123,500 for the nine months ended June 30, 2020 and 2019, respectively, which have been included in general and administrative expense – related party on the accompanying unaudited condensed consolidated statements of operations.

As of June 30, 2020 and September 30, 2019, the accrued and unpaid services charge related to Craig Marshak amounted to $0 and $10,000, respectively, which have been included in accrued liabilities – related party on the accompanying condensed consolidated balance sheets.

The Company uses affiliate employees for various services such as the use of accountants to record the books and accounts of the Company at no charge to those affiliates, which are considered immaterial.

Office space from related parties

The Company uses office space of affiliate companies, free of rent, which is considered immaterial.

Revenue from related party and cost of revenue from related party

The Company operates under a GSA with FXDD Malta providing personnel and technical support, marketing, accounting, risk monitoring, documentation processing and customer care and support. The minimum monthly amount received is $1,600,000.

The Company operates under a GSA with FXDIRECT receiving personnel and technical support, marketing, accounting, risk monitoring, documentation processing and customer care and support. The minimum monthly amount payable is $1,575,000.

Both of the above entities are affiliates through common ownership.

During the three and nine months ended June 30, 2020 and 2019, services provided to the related party, which was recorded as revenue - related party on the accompanying unaudited condensed consolidated statements of operations were as follows:

	Three Months Ended June 30, 2020		Three Months Ended June 30, 2019		Nine Months Ended June 30, 2020		Nine Months Ended June 30, 2019
Service provided to:
FXDD Malta	$	4,800,000	$	4,800,000	$	14,400,000	$	14,400,000
	$	4,800,000	$	4,800,000	$	14,400,000	$	14,400,000

During the three and nine months ended June 30, 2020 and 2019, services received from the related party, which was recorded as cost of revenue - related party on the accompanying unaudited condensed consolidated statements of operations were as follows:

	Three Months Ended June 30, 2020		Three Months Ended June 30, 2019		Nine Months Ended June 30, 2020		Nine Months Ended June 30, 2019
Service received from:
FXDIRECT	$	4,725,000	$	4,725,000	$	14,175,000	$	14,175,000
	$	4,725,000	$	4,725,000	$	14,175,000	$	14,175,000

Due from affiliates

At June 30, 2020 and September 30, 2019, due from related parties consisted of the following:

	June 30, 2020		September 30, 2019
NUKK Capital (*)	$	143,776	$	3,880
FXDD Malta		778,216		-
	$	921,992	$	3,880

(*) An entity controlled by Emil Assentato, the Company's chief executive officer, chief financial officer and chairman.

The balances of due from NUKK Capital represent investment in digital currency transferred to NUKK Capital. The balance of due from FXDD Malta represent unsettled funds due related to the General Services Agreement and monies that the Company paid on behalf of FXDD Malta.

Management believes that the related parties' receivables are fully collectable. Therefore, no allowance for doubtful account is deemed to be required on its due from related parties at June 30, 2020 and September 30, 2019. The Company historically has not experienced uncollectible receivable from the related parties.

Due to affiliates

At June 30, 2020 and September 30, 2019, due to related parties consisted of the following:

	June 30, 2020		September 30, 2019
Forexware LLC	$	570,271	$	570,271
FXDIRECT		1,320,177		67,056
CMH		42,000		42,000
FXDD Malta		-		320,129
FXDD Trading (*)		471		43,185
FXMarkets (*)		-		346
Total	$	1,932,919	$	1,042,987

(*) FXDD Trading and FXMarkets are both controlled by Emil Assentato, the Company's chief executive officer, chief financial officer and chairman.

The balances of due to related parties represent expenses paid by Forexware LLC, FXDIRECT, FXDD Malta, FXDD Trading, and FXMarkets on behalf of the Company and advances from CMH. The balances due to FXDIRECT and FXDD Malta may also include unsettled funds due related to the General Service Agreement. The balances due to FXDD Malta and FXDD Trading also include the value of transferred digital assets.

The related parties' payables are short-term in nature, non-interest bearing, unsecured and repayable on demand.