2. MARKETABLE SECURITIES AND INVESTMENT OTHER SECURITIES

3 Months Ended

Dec. 31, 2020

Marketable Securities [Abstract]

MARKETABLE SECURITIES AND INVESTMENT OTHER SECURITIES

The Company has, from time to time, entered into contracts where a portion of the consideration provided by the customer in exchange for the Company's services was common stock, options or warrants (an equity position).  In these situations, upon invoicing the customer for the stock or other instruments, the Company recorded the receivable as accounts receivable other, and used the value of the stock or other instrument upon invoicing to determine the value. If there is insufficient data to support the valuation of the security directly, the Company will value it, and the underlying revenue, on the estimated fair value of the services provided. Where an accounts receivable other is settled with the receipt of the common stock or other instrument, the common stock or other instrument was classified as an asset on the consolidated balance sheet as either an investment marketable security (when the customer is a public entity) or as an investment other security (when the customer is a privately held entity). 

For the first quarter of fiscal 2021 and the first quarter of fiscal 2020 we recorded $542,710 and $(62,010), respectively of realized and unrealized gain (loss) on marketable and other securities. The realized gain was driven by the sale of our investment in Formula Four Beverages, Inc. that was previously written to zero based on prior information related to the company’s performance and COVID-19 impacts.

On December 30, 2017 the Company entered into an Agreement with Isodiol International Inc. which was a developer of pharmaceutical grade phytochemical compounds and a manufacturer and developer of phytoceutical consumer products. As payment for these services, the Company has received 1,226,435 shares of Isodiol’s common stock between December 31, 2017 and January 2019. The Company also received 38,095 shares of Isodiol’s common stock upon Isodiol’s acquisition of Kure Corp., giving the Company a total of 1,264,530 shares. At December 31, 2020, the Company had 1,042,193 shares valued at $29,181.

In September 2020, the Company purchased a membership interest in Adara Sponsor LLC for $250,000, which along with proceeds from other investors was utilized as an investment in Adara Acquisition Corporation (“Adara”), a newly organized blank check company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination. The Company has the right to purchase an additional $750,000 of membership interest in Adara Sponsor LLC and as disclosed in the subsequent events, the Company exercised its right during January 2021. The investment in Adara is part of a planned initial public offering and Adara intends to list on the NYSE American once completed. The focus of targets to pursue for the business combination are expected to be in the consumer products industry including business in the health and wellness, ecommerce, discretionary spending, information technology sectors and related channels of distribution. The Company has classified this investment as Level 3 for fair value measurement purposes as there are no observable inputs. In valuing the investment, the Company used the value paid, which was the price offered to all third-party investors. The Company assessed the common stock and determined there was not an impairment for the period ended December 31, 2020.

The table below summarizes the assets valued at fair value as of December 31, 2020:

	In Active Markets for Identical Assets and Liabilities (Level 1)		Significant Other Observable Inputs  (Level 2)		Significant Unobservable Inputs  (Level 3)		Total Fair Value at December 31, 2020
Marketable securities	$	29,181		-	$	-	$	29,181
Investment other securities		-		-	$	250,000	$	250,000

	Level 1		Level 2		Level 3		Total
Balance at September 30, 2020	$	26,472	$	-	$	250,000	$	276,472
Change in value of equities	$	2,710	$	-	$	-	$	2,710
Balance at December 31, 2020	$	29,181	$	-	$	250,000	$	279,181