0001683168-21-003582.txt : 20210813 0001683168-21-003582.hdr.sgml : 20210813 20210813163110 ACCESSION NUMBER: 0001683168-21-003582 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 46 CONFORMED PERIOD OF REPORT: 20210630 FILED AS OF DATE: 20210813 DATE AS OF CHANGE: 20210813 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Esports Technologies, Inc. CENTRAL INDEX KEY: 0001829966 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-AMUSEMENT & RECREATION SERVICES [7900] IRS NUMBER: 853201309 STATE OF INCORPORATION: NV FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-40334 FILM NUMBER: 211172644 BUSINESS ADDRESS: STREET 1: 720 SOUTH 7TH STREET 3RD FLOOR CITY: LAS VEGAS STATE: NV ZIP: 89101 BUSINESS PHONE: 7024811779 MAIL ADDRESS: STREET 1: 720 SOUTH 7TH STREET 3RD FLOOR CITY: LAS VEGAS STATE: NV ZIP: 89101 FORMER COMPANY: FORMER CONFORMED NAME: eSports Technologies, Inc. DATE OF NAME CHANGE: 20201026 10-Q 1 esports_i10q-063021.htm FORM 10Q FOR JUNE 30, 2021
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Table of Contents

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the Quarterly Period Ended June 30, 2021

 

OR

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the Transition Period From                  to

 

Commission File Number: 001-40334

 

 

Esports Technologies, Inc.

(Exact Name of Registrant as Specified in Its Charter)

 

Nevada   85-3201309

(State or Other Jurisdiction of

Incorporation or Organization)

 

(I.R.S. Employer

Identification No.)

 

197 California Ave. Ste. 302, Las Vegas, NV   89104
(Address of Principal Executive Offices)   (Zip Code)

 

(702) 481-1779

(Registrant's Telephone Number, Including Area Code) 

 

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

 

Securities registered pursuant to Section 12(b) of the Exchange Act:

 

Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock EBET The NASDAQ Stock Market LLC

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒ No  ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large Accelerated Filer ☐ Accelerated Filer ☐
Non-Accelerated Filer Smaller Reporting Company
  Emerging Growth Company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

 

The registrant had 13,231,333 shares of common stock outstanding on August 9, 2021.

 

 

 

   

 

 

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that involve substantial risks and uncertainties. All statements, other than statements of historical fact, contained in this Quarterly Report on Form 10-Q, including statements regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans and objectives of management, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “would,” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.

 

The forward-looking statements in this Quarterly Report on Form 10-Q include, but are not limited to those described under the “Risk Factors” section and include, among other things:

 

  · our ability to introduce new enhancements to our website on the timeline we have indicated;

 

  · our ability to obtain additional funding to develop additional services and offerings;

 

  · compliance with obligations under intellectual property licenses with third parties;

 

  · market acceptance of our new offerings;

 

  · competition from existing online offerings or new offerings that may emerge;

 

  · our ability to establish or maintain collaborations, licensing or other arrangements;

 

  · our ability and third parties’ abilities to protect intellectual property rights;

 

  · our ability to adequately support future growth; and

 

  · our ability to attract and retain key personnel to manage our business effectively.

 

We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information.

 

We have included important factors in the cautionary statements included in this Quarterly Report on Form 10-Q, particularly in the “Risk Factors” section, that we believe could cause actual results or events to differ materially from the forward-looking statements that we make. New risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, collaborations, joint ventures or investments we may make or enter into.

 

 

 

 

 2 

 

 

Esports Technologies, Inc.

 

FORM 10-Q

For the Quarter Ended June 30, 2021

 

INDEX

 

    Page
PART I. FINANCIAL INFORMATION  
       
  Item 1. Financial Statements  
         
    a) Consolidated Balance Sheets as of June 30, 2021 and September 30, 2020 4
    b) Consolidated Statements of Operations for the Three and Nine Months Ended June 30 and 2020 5
    c) Consolidated Statements of Changes in Shareholders’ Equity for the Three and Nine Months Ended June 30, 2021 and 2020 6
    e) Consolidated Statements Cash Flows for the Nine Months Ended June 30, 2021 and 2020 7
    f) Notes to Consolidated Financial Statements 8
         
  Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 16
         
  Item 3. Quantitative and Qualitative Disclosures About Market Risk 19
         
  Item 4. Controls and Procedures 20
         
PART II.  OTHER INFORMATION  
         
  Item 1. Legal Proceedings 21
         
  Item 1A. Risk Factors 21
         
  Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 22
       
  Item 3. Defaults Upon Senior Securities 22
       
  Item 4. Mine Safety Disclosure 22
         
  Item 5. Other Information 22
         
  Item 6. Exhibits 22
         
SIGNATURE 23

 

 

 

 

 3 

 

 

PART I - FINANCIAL INFORMATION

 

Item 1 - Financial Statements.

 

ESPORTS TECHNOLOGIES, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

         
   June 30,   September 30, 
   2021   2020 
         
ASSETS          
Current assets:          
Cash  $12,459,191   $ 
Accounts receivable, net       33,839 
Deferred financing costs       50,000 
Prepaid expenses   708,148     
Other current assets   26,387     
           
Total current assets   13,193,726    83,839 
           
Long term assets:          
Software and equipment, net   86,436     
Intangible assets - cryptocurrency   955    44,562 
Intangible assets - domain names, net   2,239,606    2,239,606 
Intangible assets - license agreements, net   1,772,484     
           
Total assets  $17,293,207   $2,368,007 
           
LIABILITIES AND STOCKHOLDERS' EQUITY          
Current liabilities:          
Accounts payable and accrued liabilities  $767,066   $55,760 
Accounts payable, related party       152,888 
Convertible notes payable, net of discount   1,086,311     
Liabilities to users   18,824    8,809 
Total current liabilities   1,872,201    217,457 
           
Convertible notes payable, net of discount       116,667 
Other long-term liabilities, net of discount   453,178    422,409 
           
Total liabilities   2,325,379    756,533 
           
COMMITMENTS AND CONTINGENCIES          
           
Stockholders' equity:          
Preferred Stock, $0.001 par value, 10,000,000 shares authorized, 0 issued and outstanding        
Common stock; $0.001 par value, 100,000,000 shares authorized, 13,111,155 and 7,340,421 shares issued and outstanding as of June 30, 2021, and September 30, 2020, respectively   13,111    7,340 
Additional paid-in capital   25,488,245    3,053,660 
Accumulated deficit   (10,533,528)   (1,449,526)
Total stockholders’ equity   14,967,828    1,611,474 
           
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY  $17,293,207   $2,368,007 

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

 

 

 4 

 

 

ESPORTS TECHNOLOGIES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

                 
   Three Months Ended   Nine Months Ended 
   June 30,   June 30, 
   2021   2020   2021   2020 
                 
Revenue  $41,356   $63,740   $85,984   $141,618 
Cost of revenue       (27,971)   (24,724)   (80,138)
                     
Gross profit   41,356    35,769    61,260    61,480 
                     
Operating expenses:                    
Sales and marketing expenses   964,836        1,238,780     
Product and technology expenses   1,176,848        2,286,228    15,635 
Acquisition costs   139,235        139,235     
General and administrative expenses   1,340,042    64,685    4,123,163    93,116 
Total operating expenses   3,620,961    64,685    7,787,406    108,751 
                     
Income (loss) from operations   (3,579,605)   (28,916)   (7,726,146)   (47,271)
                     
Other expenses:                    
Interest expense   (368,001)       (1,335,621)    
Foreign currency loss   (10,005)   1,262    (22,235)   1,262 
Total other expense   (378,006)   1,262    (1,357,856)   1,262 
                     
Income (loss) before provision for income taxes   (3,957,611)   (27,654)   (9,084,002)   (46,009)
Provision for income taxes                
                     
Net income (loss)  $(3,957,611)  $(27,654)  $(9,084,002)  $(46,009)
                     
Net income (loss) per common share – basic and diluted  $(0.38)  $(0.00)  $(0.85)  $(0.01)
                     
Weighted average common shares outstanding – basic and diluted   10,549,765    7,340,421    10,650,966    7,340,421 

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

 

 

 5 

 

ESPORTS TECHNOLOGIES, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

FOR THE THREE AND NINE MONTHS ENDED JUNE 30, 2021 AND 2020

(Unaudited)

  

                     
   Common stock   Additional         
   Number of       paid-in   Accumulated     
   Shares   Amount   capital   deficit   Total 
                     
Balance at September 30, 2019   7,340,421   $7,340   $953,660   $(876,271)  $84,729 
                          
Net loss               (23,428)   (23,428)
                          
Balance at December 31, 2019   7,340,421    7,340    953,660    (899,699)   61,301 
                          
Net income               5,073    5,073 
                          
Balance at March 31, 2020   7,340,421    7,340    953,660    (894,626)   66,374 
                          
Net loss               (27,654)   (27,654)
                          
Balance at June 30, 2020   7,340,421   $7,340   $953,660   $(922,280)  $38,720 
                          
Balance at September 30, 2020   7,340,421   $7,340   $3,053,660   $(1,449,526)  $1,611,474 
                          
Shares issued for cash, net   2,000,000    2,000    3,646,071        3,648,071 
                          
Stock-based compensation   683,334    683    1,321,343        1,322,026 
                          
Shares issued due to conversion of notes payable   375,000    375    187,125        187,500 
                          
Stock warrants issued for asset acquisition           57,252        57,252 
                          
Net loss               (2,750,731)   (2,750,731)
                          
Balance at December 31, 2020   10,398,755    10,398    8,265,451    (4,200,257)   4,075,592 
                          
Shares and warrants issued for cash, net   250,014    251    719,435        719,686 
                          
Stock-based compensation           700,000        700,000 
                          
Net loss               (2,375,660)   (2,375,660)
                          
Balance at March 31, 2021   10,648,769    10,649   $9,684,886   $(6,575,917)  $3,119,618 
                          
Shares and warrants issued for cash, net   2,400,000    2,400    13,511,800        13,514,200 
                          
Shares issued for intangible assets           1,456,650        1,456,650 
                          
Cashless exercise of warrants   62,386    62    (62)        
                          
Stock-based compensation           834,971        834,971 
                          
Net loss               (3,957,611)   (3,957,611)
                          
Balance at June 30, 2021   13,111,155   $13,111   $25,488,245   $(10,533,528)  $14,967,828 

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

 6 

 

 

ESPORTS TECHNOLOGIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED JUNE 30, 2021 and 2020

(Unaudited)

 

           
  

For the Nine Months Ended

June 30,

 
   2021   2020 
Cash flow from operating activities:          
Net loss  $(9,084,002)  $(46,009)
Adjustments to reconcile net loss to net cash used in operating activities:          
Amortization of debt discount   1,187,913     
Depreciation and amortization expense   178,339     
Stock-based compensation   2,856,997     
Bad debt expense   50,932     
Gain on cryptocurrency settlement   (45,267)   (1,369)
Changes in operating assets and liabilities:          
Accounts receivable   (35,252)   (125,553)
Prepaid expenses and other   (623,026)    
Accounts payable and accrued liabilities   775,277     
Accounts payable - related parties   (152,888)   105,118 
Liabilities to users   (8,432)   96 
Net cash used in operating activities   (4,899,409)   (67,717)
           
Cash flow from investing activities:          
Purchase of software and equipment   (103,259)    
Purchase of other long-term assets   (420,098)    
Net cash used by investing activities   (523,357)    
           
Cash flow from financing activities:          
Proceeds from equity issuance, net of costs of capital   17,881,957     
Net cash provided by financing activities   17,881,957     
           
NET CHANGE IN CASH   12,459,191    (67,717)
CASH AT BEGINNING OF PERIOD       67,717 
CASH AT END OF PERIOD  $12,459,191   $ 
           
Supplemental disclosure of cash flow information:          
Cash paid for interest  $   $ 
Cash paid for income taxes  $   $ 
           
Non-cash transactions          
Stock warrant issued for asset acquisition  $57,282   $ 
Stock issued for conversion of notes payable  $187,500   $ 
Stock issuable for intangible asset  $1,456,650   $ 

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

 

 

 7 

 

 

ESPORTS TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

 

NOTE 1 – ORGANIZATION, NATURE OF OPERATIONS AND GOING CONCERN

 

Organization

 

Esports Technologies, Inc. (“Esports Tech”) was formed on September 24, 2020 as a Nevada corporation. Esports Tech is a technology company creating and operating platforms focused on esports and competitive gaming. The Company operates under a Curacao gaming sublicense and can provide online betting services to various countries around the world. The majority of the Company’s customers are based in the Philippines. The Company’s consolidated financial statements include its accounts and the accounts of its 100% owned subsidiaries, namely Global E-Sports Entertainment Group, LLC (“Global E-Sports”), ESEG Limited (“ESEG”) and Gogawi Entertainment Group (“Gogawi”) (collectively referred to as the “Company,” “we,” “our,” or “us”). Global E-Sports, a Nevada limited liability company, was incorporated in Nevada on June 28, 2016. ESEG, a Belize company was incorporated on October 31, 2016. Gogawi, a Cypress company was incorporated on December 8, 2018 and has always been a wholly owned subsidiary of ESEG. On December 8, 2020, the Company incorporated Esportsbook Technologies Limited (“Esportsbook”) in Ireland as a wholly-owned subsidiary of Esports Tech. All amounts included in this Form 10-Q are expressed in U.S. Dollars, unless otherwise noted.

 

Going Concern

 

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company has recurring losses and generated negative cash flows from operations since inception. In April 2021, the Company completed its Initial Public Offering (“IPO”) and issued 2,400,000 shares of common stock for gross cash proceeds of $14,400,000, receiving net proceeds of $13,514,200.

 

Impact of COVID-19

 

The outbreak of the 2019 novel coronavirus disease (“COVID-19”), which was declared a global pandemic by the World Health Organization on March 11, 2020, and the related responses by public health and governmental authorities to contain and combat its outbreak and spread, has severely impacted the U.S. and world economies. Economic recessions, including those brought on by the COVID-19 outbreak may have a negative effect on the demand for the Company’s products and the Company’s operating results. The range of possible impacts on the Company’s business from the coronavirus pandemic could include: (i) changing demand for the Company’s online betting products; and (ii) increasing contraction in the capital markets.

 

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

 

The accompanying unaudited financial statements of the Company, include the accounts of the Company and its wholly-owned subsidiaries, and have been prepared in accordance with generally accepted accounting principles accepted in the United States (“U.S. GAAP”) for interim unaudited financial information. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The unaudited financial statements include all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary in order to make the condensed financial statements not misleading. Operating results for the three and nine months ended June 30, 2021, are not necessarily indicative of the final results that may be expected for the year ended September 30, 2021. For more complete financial information, these unaudited financial statements should be read in conjunction with the audited consolidated financial statements for the year ended September 30, 2020 included in our Form S-1 filed with the SEC. Notes to the consolidated financial statements which would substantially duplicate the disclosures contained in the audited consolidated financial statements for the most recent fiscal period, as reported in the Form S-1, have been omitted. 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.

 

 

 

 8 

 

 

Intangible Assets

 

Cryptocurrencies

 

There is currently no specific guidance under GAAP or alternative accounting framework for the accounting for cryptocurrencies recognized as revenue or held, and management has exercised significant judgment in determining the appropriate accounting treatment. In the event authoritative guidance is enacted by the FASB, the Company may be required to change its policies, which could have an effect on the Company’s consolidated financial position and results from operations.

 

Cryptocurrencies held are accounted for as an indefinite-lived intangible asset under ASC 350, Intangible – Goodwill and Other. 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, which is measured using the quoted price of the cryptocurrency at the time its fair value is being measured. 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 not 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.

 

The Company uses its cryptocurrencies to pay vendors and users. The Company also receives payments on its receivables and player deposits in cryptocurrency. Gains and losses realized upon settlement of cryptocurrencies are also recorded in general and administrative expense in our consolidated statements of operations.

 

Other Intangible Assets

 

The Company’s other intangible asset consist of internet domain names, which are an indefinite-lived intangible. 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.

 

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.

 

Revenue Recognition

 

The Company recognizes revenue in accordance with ASC Topic 606, Revenue From Contracts With Customers, which was adopted on October 1, 2018 using the modified retrospective method. ASC Topic 606 requires companies to recognize revenue in a manner that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, the standard requires disclosures of the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The adoption of ASC Topic 606 had no impact to the Company’s comparative consolidated financial statements. Revenue is recognized based on the following five step model:

 

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 

 

 

 

 9 

 

 

No single customer exceeded more than 10% of revenue during the three and nine months ended June 30, 2021 and 2020. In addition, no disaggregation of revenue is required because all current revenue is generated from gaming revenue.

 

Performance Obligations

 

The Company operates an online betting platform allowing users to place wagers on a variety of live sporting events and esports events. Each wager placed by users create a single performance obligation for the Company to administer each event wagered. Gross gaming revenue is the aggregate of gaming wins and losses based on results of each event that customers wager bets on. 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 reduction to gross gaming revenue.

 

Cost of Revenue

 

Cost of revenue consists of third-party costs associated with the betting software platform and amortization of capitalized software costs.

 

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.

 

NOTE 3 – LONG-LIVED ASSETS

 

Software and equipment

 

The Company’s software and equipment consisted of the following as of June 30, 2021 and September 30, 2020: 

          
  

June 30,

2021

  

September 30,

2020

 
Software  $160,511   $ 
Total software and equipment   160,511     
Accumulated depreciation   (74,075)    
Software and equipment, net  $86,436   $ 

 

On November 5, 2020, the Company entered into an asset purchase agreement with a third party to acquire certain proprietary technology data. The Company made a cash payment of $61,425 and granted warrants to purchase 32,000 shares of common stock at an exercise price of $0.25 per share for a period of five years. The fair value of the warrants was estimated to be $57,252 as of the grant date. The total consideration paid of $118,677 is included as part of software costs within property and equipment on the Company’s consolidated balance sheet. The Company also entered into an employment agreement with the seller, effective November 1, 2020. The employee will be compensated at a rate of $110,000 per year and will receive a common stock award of 100,000 shares, which vest annually over four years.

 

The software costs above relate to acquired components of the Company’s new platform which is being depreciated over an expected useful life.

 

 

 

 10 

 

 

Intangible Assets

 

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, based on the estimated fair value of the consideration transferred to the sellers. ESEG issued notes payable with a combined principal amount of $2,100,000, which were to mature on March 1, 2022, bearing interest at 10%. These notes were exchanged for notes of the Company in September 2020. The Company also agreed to pay a total of $675,000 on September 1, 2025, with no interest. The Company estimated discount of these liabilities totaling $535,394 at the date of the transaction, to be amortized over the maturity period of the liabilities. The domain names were recorded as an intangible asset with an indefinite useful life. The Company’s management evaluated the domain names at September 30, 2020 and determined no impairment was necessary.

 

The following table presents the activities of the Company’s cryptocurrency holdings for the three and nine months ended June 30, 2021: 

     
Cryptocurrency at September 30, 2020  $44,562 
Additions of cryptocurrency   36,605 
Payments of cryptocurrency   (125,480)
Gain on cryptocurrency   45,268 
Cryptocurrency at June 30, 2021  $955 

 

Additions of cryptocurrency during the nine months ended June 30, 2021 represent settlement of outstanding accounts receivable of $18,158 and net deposits from players of $18,447. Payments of cryptocurrency during the nine months ended June 30, 2021 included payments of accounts payable and accrued expenses of $63,971 and prepaid expenses of $61,509. Use of cryptocurrency to settle receivables and payables during the period are reflected as a component of changes in operating assets and liabilities in the consolidated statement of cash flows.

 

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 upon execution of the option agreement and paid an additional $286,328 in cash and agreed to issue 65,000 shares of common stock upon exercise of the option on or about May 3, 2021. The shares were issued in July 2021 and had a fair value of $1,456,650 at the date of exercise of the option and execution of the license agreement resulting in total value for the license agreement of $1,876,748. During the three and nine months ended June 30, 2021, the Company recognized amortization expense of $104,264 included in product and technology expenses.

 

NOTE 4 – CONVERTIBLE NOTES PAYABLE AND OTHER LONG-TERM LIABILITIES

 

On September 1, 2020, ESEG entered into three promissory notes, with a combined principal amount of $2,100,000. The notes bore interest at the rate of 10% per annum and matured on March 1, 2022. The Company also agreed to pay two of the lenders a total of $675,000 on September 1, 2025, bearing no interest. The Company estimated total debt discount of these liabilities to be $535,394 at the date of the transaction, of which $279,516 related to the promissory notes payable, and $255,878 related to the other long-term liabilities. The discounts will be amortized over the maturity period of each liability. As of June 30, 2021 and September 30, 2020, the carrying amount of the other long-term liabilities was $453,178 and $422,409, respectively, which is net of the remaining discount totaling $221,822 and $252,591, respectively. The carrying amount of the convertible notes payable and associated discount is further discussed below.

 

On September 26, 2020, the Company assumed the notes payable with principal of $2,100,000 from ESEG. In connection with this assumption, Esports Tech issued each of the lenders a conversion option at a fixed price of $0.50 per share and issued 2,015,000 warrants to purchase shares of the Company’s common stock at an exercise price of $0.30 per share, each with a term of five years. The convertible notes bear interest at 10% per annum and mature on March 1, 2022. The holder may convert the note into shares of common stock at any time throughout the maturity date, to the extent and provided that no holder of the notes was or will be permitted to convert such notes so long as it or any of its affiliates would beneficially own in excess of 4.99% of the Company’s common stock after such conversion. The Company determined that the assignment of the notes payable by the subsidiary to the parent company was an extinguishment of the original notes payable due to the addition of a substantive conversion feature, and the Company recognized a loss on extinguishment of $265,779 during the year ended September 30, 2020.

 

 

 

 11 

 

 

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 debt discount will be amortized through the maturity date of the convertible notes payable.

 

During the three months ended December 31, 2020, a total of $187,500 of principal was converted into 375,000 shares of common stock. As of June 30, 2021, the balance due under these notes, net of unamortized discount of $826,189, is $1,086,311, with accrued interest of $116,774. During the nine months ended June 30, 2021, the Company recorded a charge of $1,187,913 in the accompanying consolidated statement of operations from the amortization of its debt discount related to the convertible notes payable and other liabilities described above.

 

NOTE 5 – STOCKHOLDERS’ EQUITY

 

The Company is currently authorized to issue up to 100,000,000 shares of common stock with a par value of $0.001. In addition, the Company is authorized to issue 10,000,000 shares of preferred stock with a par value of $0.001. The specific rights of the preferred stock, when so designated, shall be determined by the board of directors.

 

During the three months ended December 31, 2020, the Company received gross cash proceeds of $4,000,000 in exchange for 2,000,000 shares of common stock. In conjunction with this fundraising, broker commission and expenses of $351,929 were paid and 173,625 common stock warrants with an exercise price of $2.00 and a five-year term were issued. The fair value of the warrants issued in connection with the financing was estimated to be $228,500 as discussed below.

 

In January 2021, the Company sold 250,014 shares of common stock to investors for $3 per share, receiving gross proceeds of $750,042. The company paid $30,314 of broker fees and commissions related to this fundraising and issued 8,750 warrants to purchase common stock with an exercise price of $3 per share and a term of 5 years. The fair value of the warrants issued in connection with the financing was estimated to be $228,500 as discussed below.

 

In February 2021, the Company entered into an agreement with a consultant where the Company agreed to issue warrants to purchase 4,166 shares of stock with a term of 5 years at an exercise price of $3 per share, and paid $37,500 of cash for services rendered. The consultant will also receive $50,000 of consideration per year for an additional two years in a combination of cash and common stock warrants.

 

In April 2021, the Company completed its IPO and issued 2,400,000 shares of common stock for gross cash proceeds of $14,400,000 and received net proceeds of $13,514,200 after costs of $885,800 which were recorded in shareholders’ equity. The Company also issued 168,000 common stock warrants with a five-year term and exercise price of $7.20 to the underwriter. These warrants have an estimated fair value of $5,474,076.

 

2020 Stock Plan

 

In December 2020, the Company adopted the Esports Technologies, 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.

 

The number of shares of the common stock that may be issued under the 2020 Plan is 4,000,000. As of June 30, 2021, the Company had awarded a total 3,462,598 shares under the 2020 Plan, with 537,402 remaining under the 2020 Plan.

 

 

 

 12 

 

 

Common Stock Awards

 

During the nine months ended June 30, 2021, the Company agreed to award a total of restricted stock units that convert into common stock to various employees, consultants and officers under the 2020 Plan. Of the restricted stock unit awarded, 755,250 will vest annually over a period of one to four years, 300,000 will vest upon the completion of various performance goals related to the operations of the Company, and 200,000 shares of common stock underlying awards made to the Company’s CEO will vest equally upon reaching trailing twelve months revenue of $10 million and $20 million. The Company estimated the fair value of the awards granted prior to the IPO, at $2 per share based on recent sales of common stock. Awards granted after the IPO, the closing price of the Company’s stock on the grant date is used to determine the fair value.

 

In November 2020, the Company entered into four consulting agreements under which the Company issued a total of 683,334 shares of common stock, which vest equally over terms ranging from three to twelve months.

 

During the three and nine months ended June 30, 2021, the Company recognized a total of $501,716 and $1,940,249 of stock-based compensation expense related to common stock awards and expects to recognize additional compensation cost of $5,258,844 upon vesting of all awards.

 

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 year ended September 30, 2020. The following table summarizes warrant activity during the three and nine months ended June 30, 2021: 

Schedule of warrant activity               
    Common Stock Warrants 
    Shares    Weighted
Average
Exercise
Price
    Weighted
average
Remaining
Life in years
 
Outstanding at September 30, 2020   2,015,000   $0.30    4.24 
Granted   386,541    3.63    4.58 
Cancelled            
Expired            
Exercised   (66,000)   (2.00)   4.33 
Outstanding at June 30, 2021   2,335,541   $0.89    4.29 
Exercisable at June 30, 2021   2,335,541   $0.89    4.29 

 

The outstanding and exercisable common stock warrants had an estimated intrinsic value of $47,110,395. The Company estimated the fair value of the warrants using a Black-Scholes option pricing model and the following assumptions: 1) stock price of $2 to $3 per share; 2) dividend yield of 0%; 3) risk-free rate of between 0.18% and 0.81%; 4) expected term of between 2.5 and 5 years; 5) an exercise price of $0.25, $2 $3 or $7.20 and 6) expected volatility of between 84.1% and 99.0% based on a peer group of public companies. The warrants granted to brokers in connection with sales of common stock during the nine months ended June 30, 2021, had an estimated fair value of $5,474,076 which was reflected as a cost of capital, warrants granted to consultants for services had a fair value of $8,819, and the warrants granted in connection with the asset purchase agreement had an estimated fair value of $57,252.

 

 

 

 13 

 

 

Options

 

During the three months ended June 30, 2021, the Company entered into various agreements with employees and consultants whereby the Company agreed to award a total of 96,000 common stock options under the 2020 Plan. These awards generally vest over 4 years.

 

During the three months ended March 31, 2021, the Company entered into various agreements with employees, consultants and directors whereby the Company agreed to award a total of 402,000 common stock options, including 150,000 to two members of the Board of Directors under the 2020 Plan. These awards vest over a period of six months to four years, with 20,000 options issued to a consultant vesting immediately.

 

During the three months ended December 31, 2020, the Company entered into various agreements with employees and consultants whereby the Company agreed to award a total of 2,014,348 common stock options, including 90,000 to consultants and 100,000 to a member of the Board of Directors under the 2020 Plan. Of the total, 1,390,000 vest equally over periods of between one and four years, 70,313 vested upon completion of the Company’s IPO, 200,000 to the Company’s Chief Operating Officer would have vested in the event that the Company’s IPO raised gross proceeds of at least $18 million (as the IPO proceeds were less than $18 million, these shares did not vest), and 57,250 to the Company’s prior interim CFO vested upon the hiring of the Company’s full time CFO.

 

The following table summarizes option activity during the nine months ended June 30, 2021:

 

               
    Common Stock Options 
    Shares    Weighted
Average
Exercise
Price
    Weighted
average
Remaining
Life in years
 
Outstanding at September 30, 2020      $     
Granted   2,512,348    1.63    9.09 
Cancelled   (220,000)   0.50    9.81 
Expired            
Exercised            
Outstanding at June 30, 2021   2,292,348   $1.73    8.61 
Exercisable at June 30, 2021   144,348   $0.96    8.71 

 

During the three and nine months ended June 30, 2021, the Company recognized stock-based compensation expense of $834,971 and $2,856,998 related to common stock options awarded. The exercisable common stock options had an intrinsic value as of June 30, 2021, of $1,552,573. The Company expects to recognize an additional $4,701,717 of compensation cost related to stock options expected to vest.

 

The Company estimated the fair value of the stock options awarded using a Black-Scholes option pricing model and the following assumptions: 1) stock price of $2 to $3 per share; 2) dividend yield of 0%; 3) risk-free rate of between 0.22% and 0.90%; 4) expected term of between 3.5 and 6.25 years; 5) an exercise price between $0.25 and $22.89 and 6) expected volatility of between 82.3% and 95.33% based on a peer group of public companies.

 

 

 

 14 

 

 

NOTE 6 – COMMITMENTS AND CONTINGENCIES

 

On September 2, 2020, the Company entered into a financial advisor agreement with Boustead Securities LLC, the representative of the underwriters in the Company’s initial public offering, to provide services related to fundraising on the Company’s planned public listing. The Company agreed to pay the financial advisor a success fee of 4% of any gross proceeds from any debt financing, and a 7% success fee related to any equity or convertible debt financing, subject to customary approval by the regulatory authorities. In April 2021, the Company completed its IPO and issued 2,400,000 shares of common stock for gross cash proceeds of $14,400,000. The Company paid underwriting fees of $885,800 and issued 168,000 warrants to purchase shares of common stock at a price of $7.20 per share for a period of five 5 years.

 

On September 26, 2020, the Company entered into a consulting agreement with a registered foreign broker dealer for fundraising services and paid 10% of any gross proceeds through capital raises from non-US investors introduced by the consultant, up to a maximum payment to the consultant of $200,000 and the consultant also received warrants to purchase shares of the Company’s common stock at an exercise price of $2.00 per share. These warrants were exercised in April 2021 and were converted into 62,386 shares of the Company stock.

 

NOTE 7 –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. Common shares issuable under convertible debt, stock options and common stock warrants were excluded from the calculation of diluted net loss per share due to their antidilutive effect.

 

                    
   Three Months Ended   Nine Months Ended 
   June 30, 2021   June 30, 2020   June 30, 2021   June 30, 2020 
                 
Numerator                    
Net income (loss)  $(3,957,611)  $(27,654  $(9,084,002  $(46,009
Denominator                    
Basic and Diluted weighted average common shares   10,549,765    7,340,421    10,650,966    7,340,421
Basic and diluted net income (loss) per common share  $(0.38)  $(0.00  $(0.85  $(0.01)

 

NOTE 8 – TRANSACTION WITH RELATED PARTIES

 

The Company owed $155,228 to Gogawi Inc. (a company controlled by certain initial shareholders of the Company) (see note 1). At September 30, 2020 the amounts owed to these related parties was $152,888. The advances are due on demand and are non-interest bearing. In May 2021, the Company repaid the advances in full.

 

On November 10, 2020, the Company entered into an employment agreement with Michal Barden, a family member of the Company’s 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 30,000 shares of common stock in the Company, vesting in four equal annual installments. 

 

 

 

 

 15 

 

 

item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

This section of this report includes forward-looking statements that reflect our current views with respect to future events and financial performance. Forward looking statements are often identified by words like, believe, expect, estimate, anticipate, intend, project and similar expressions or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements, which apply only as of the date of this report. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or our predictions.

 

Overview

 

We are a technology company creating and operating platforms focused on esports and competitive gaming. Founded in late 2016, our focus has been operating our primary platform, gogawi.com, which is an online esports/sportsbook focused on gamers located in Asia and Latin America. Although we are focused on esports wagering, we also offer iGaming, which is online casino and table games such as blackjack, virtual sport computer simulated games and slot machines, as well as traditional sports betting in jurisdictions in which we are licensed to do so. We currently hold a gaming sublicense from the Curacao Gaming Authority. Under our existing sublicense, we can accept wagers from residents of more than 149 jurisdictions. Historically, virtually all of our wagers have been sourced in the Philippines.

 

Results of Operations

 

Results of operations in dollars and as a percentage of net revenue were as follows:

 

   Three Months Ended June 30,   Nine Months Ended June 30, 
   2021   2020   2021   2020 
    $    %    $    %    $    %    $    % 
                                         
Revenue  $41,356    100%   $63,740    100%   $85,984    100%   $141,618    100% 
Cost of revenue       0%    (27,971)   (44)%   (24,724)   (29)%   (80,138)   (57)%
                                         
Gross profit   41,356    100%    35,769    56%    61,260    71%    61,480    43% 
                                         
Operating expenses:                                        
Sales and marketing expenses   964,836    2,333%        0%    1,238,780    1,441%        0% 
Product and technology expenses   1,176,848    2,846%        0%    2,286,228    2,659%    15,635    11% 
Acquisition costs   139,235    337%        0%    139,235    162%        0% 
General and administrative expenses   1,340,042    3,240%    64,685    101%    4,123,163    4,795%    93,116    66% 
Total operating expenses   3,620,961    8,756%    64,685    101%    7,787,406    9,057%    108,751    77% 
                                         
Income (loss) from operations   (3,579,605)   (8,656)%   (28,916)   (45)%   (7,726,146)   (8,986)%   (47,271)   (33)%
                                         
Other expenses:                                        
Interest expense   (368,001)   (890)%       0%    (1,335,621)   (1,553)%       0% 
Foreign currency loss   (10,005)   (24)%   1,262    2%    (22,235)   (26)%   1,262    1% 
Total other expense   (378,006)   (914)%   1,262    2%    (1,357,856)   (1,579)%   1,262    1% 
                                         
Income (loss) before provision for income taxes   (3,957,611)   (9,570)%   (27,654)   (43)%   (9,084,002)   (10,565)%   (46,009)   (32)%
Provision for income taxes       0%        0%        0%        0% 
                                         
Net income (loss)  $(3,957,611)   (9,570)%  $(27,654)   (43)%  $(9,084,002)   (10,565)%  $(46,009)   (32)%

 

 

 

 

 

 16 

 

 

Three Months Ended June 30, 2021 compared to June 30, 2020

 

Revenue and Gross Profit

 

During the three months ended June 30, 2021, we generated $41,356 in revenue and in gross profit. For the three months ended June 30, 2020, we generated $63,740 in revenue and $35,769 in gross profit. The decrease in revenue and gross profit was primarily driven by the disruption to our business stemming from our launching our improved wagering platform and expanding our payment solutions, which delayed launching our marketing campaigns, which reduced our outreach to new and existing customers, thus causing a decrease in revenue for the three months ended June 30, 2021, as compared to the three months ended June 30, 2020.

 

Sales and Marketing Expense

 

Sales and marketing expense was $964,836 for the three months ended June 30, 2021, an increase from zero in the same period in the prior year. This increase, including approximately $311,000 of stock-based compensation was a result of adding marketing staff to prepare for our outreach campaign related to our new wagering products and services and the initial roll out of our marketing campaigns. We expect sales and marketing expenses to increase in future periods as our marketing campaigns increase in both number and volume.

 

Product and Technology Expense

 

Product and technology expense was $1,176,848 for the three months ended June 30, 2021, as compared to zero for the three months ended June 30, 2020, as a result of increased hiring of both employees and consultants focused on expanding our product offerings. The three months ended June 30, 2021, included payroll-related costs of $487,000, stock-based compensation of $156,000 and development costs of $534,000 consisting primarily of contractors.

 

General and Administrative Expense

 

General and administrative expense was $1,340,042 for the three months ended June 30, 2021, as compared to $64,685 for the three months ended June 30, 2020. The increase in general and administrative expense was mainly attributable to an increase in employee costs from adding new employees, $368,000 of stock-based compensation cost (of which $164,000 was to outside consultants), and professional fees of approximately $563,000 and amortization of intangible assets.

 

Interest and Other Expenses

 

During the three months ended June 30, 2021, we recognized interest expense of $368,001, which included amortization of debt discount of $320,320 related to the convertible debt issued to acquire certain intangible assets consisting of acquired domain names. We also incurred a foreign currency loss of $10,005.

 

Net Income/Loss

 

Net loss for the three months ended June 30, 2021, was $3,957,611 compared to a net loss of $27,654 for the three months ended June 30, 2020. The increase in net loss was primarily due to the significant in increase in general and administrative expenses of $1,275,357 described above, an increase in product and technology expenses of $1,176,848 as a result of our efforts to develop our new products and services, and interest on convertible notes.

 

 

 

 17 

 

 

Nine Months Ended June 30, 2021 compared to June 30, 2020

 

Revenue and Gross Profit

 

During the nine-month period ended June 30, 2021, we generated $85,984 in revenue and $61,260 in gross profit. For the nine-month period ended June 30, 2020, we generated $141,618 in revenue and $61,480 in gross profit. The decrease in revenue and gross profit was primarily driven by the disruption to our business stemming from our launching our improved wagering platform and expanding our payment solutions, which delayed launching our marketing campaigns, which reduced our outreach to new and existing customers.

 

Sales and Marketing Expense

 

Sales and marketing expense was $1,238,780 for the nine months ended June 30, 2021, an increase from zero in the same period in the prior year. This increase, including approximately $319,000 of stock-based compensation, was a result of adding marketing staff to prepare for our outreach campaign related to our new wagering products and services and the initial roll out of our marketing campaigns. We expect sales and marketing expenses to increase in future periods as our marketing campaigns increase in both number and volume.

 

Product and Technology Expense

 

Product and technology expense was $2,286,228 for the nine months ended June 30, 2021, as compared to $15,635 for the nine months ended June 30, 2020. The increase in product and technology expense was a result of increasing development activities of our products and services. The increase in product and technology expense was partially attributable to an increase in stock-based compensation of $400,000 and investments in new employees and contractors.

 

General and Administrative Expense

 

General and administrative expense $4,123,163 for the nine-month period ended June 30, 2021 as compared to $93,116 for the nine month period ended June 30, 2020, representing an increase of $4,030,047. The increase in general and administrative expense was mainly attributable to an increase in employee costs from adding new employees, stock-based compensation cost and professional fees as we prepared for our initial public offering.

 

Interest and Other Expenses

 

During the nine-month period ended June 30, 2021, we recognized interest expense of $1,335,621, including amortization of debt discount of $1,187,913 related to the convertible debt issued to acquire certain intangible assets consisting of acquired domain names.

 

Net Income/Loss

 

Net loss for the nine-month period ended June 30, 2021 was $9,084,002 compared to a net loss of $46,009 for the nine month period ended June 30, 2020. The increase in net loss was primarily due to interest on convertible notes and the loss on extinguishment of convertible notes described above, which totaled $1,187,913, stock-based compensation of $2,856,997 and an increase in payroll related expenses as we add new employees to support our growth, as described above.

 

 

 

 18 

 

 

Liquidity and Capital Resources

 

On June 30, 2021, we had cash of $12,459,191, and had working capital of $11,321,525. We have historically funded our operations from proceeds from debt and equity sales, and funds received from customers.

 

During October and November 2020, we completed a private placement of 2,000,000 shares of our common stock for gross proceeds of $4.0 million.

 

During January and February 2021, we completed a private placement of 250,014 shares of our common stock at $3.00 per share for gross proceeds of $0.75 million.

 

In April 2021, the Company completed its IPO and issued 2,400,000 shares of common stock for gross cash proceeds of $14,400,000. The Company paid underwriting fees and other expenses of $885,800 and issued 168,000 warrants to purchase shares of common stock at a price of $7.20 per share for a period of five years.

 

As of June 30, 2021, we have incurred an accumulated deficit of $10,533,528 since inception and have not yet generated any meaningful income from operations.

 

Cash used in operating activities

 

Net cash used in operating activities was $4,899,409 for the nine months ended June 30, 2021, as compared to cash used in operating activities of $67,717 for the nine months ended June 30, 2020. Net cash used in operating activities during the nine months ended June 30, 2021, mainly included payments made for employee costs, professional fees to our consultants, attorneys and accountants for services related to completion of our audit, development of our new wagering platform and preparation of our public offering filings.

 

Cash used in investing activities

 

Net cash used in investing activities was $523,357 for the nine months ended June 30, 2021, and was related to the purchase of software assets to support the new wagering platform, and the purchase of long term assets related to intellectual property rights.

 

Cash used provided by financing activities

 

Net cash provided by financing activities was $17,881,957 for the nine months ended June 30, 2020, and was related to the sale of 2,000,000 shares of common stock at $2.00 per share in a private placement, partially offset by costs of capital to brokers of $351,929 as well as private placements of our common stock completed in January and February 2021, at $3.00 per share for gross proceeds of $750,000. In April 2021, the Company completed its IPO and issued 2,400,000 shares of common stock for gross cash proceeds of $14,400,000. The Company paid underwriting fees and other expenses of $885,800 and issued 168,000 warrants to purchase shares of common stock at a price of $7.20 per share for a period of five years.

 

Off Balance Sheet Arrangements

 

None.

 

Item 3. Quantitative and Qualitative Disclosures about Market Risk

 

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

 

 

 

 19 

 

 

Item 4. Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures

 

Our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)) are designed to ensure that information required to be disclosed by us in reports we file or submit under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the appropriate time periods, and that such information is accumulated and communicated to the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely discussions regarding required disclosure. We, under the supervisions of and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, have evaluated the effectiveness of our disclosure controls and procedures. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that the design and operation of our disclosure controls and procedures were effective as of June 30, 2021.

 

There were no changes to our internal control over financial reporting during the three months ended June 30, 2021, that have materially affected, or are reasonable likely to materially effect, our internal controls over financial reporting.

 

Due to a transition period established by SEC rules applicable to newly public companies, our management is not required to evaluate the effectiveness of our internal control over financial reporting until after the filing of our Annual Report on Form 10-K for the year ended December 31, 2021. As a result, this Quarterly Report on Form 10-Q does not address whether there have been any changes in our internal control over financial reporting.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 20 

 

 

PART II - OTHER INFORMATION

 

Item 1. Legal Proceedings

 

None.

 

Item 1A. Risk Factors

 

For a discussion of potential risks or uncertainties, see “Risk Factors” in the Company’s registration statement on Form S-1, as amended (File No. 333-254068), on file with the SEC, and in Item 1A of the Form 10-Q for the quarter ended March 31, 2021. Except as set forth below, there have been no material changes to the risk factors disclosed in such registration statement and Form 10-Q for the quarter ended March 31, 2021.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

On April 19, 2021, we closed our initial public offering of 2,400,000 shares of common at a price to the public of $6.00 per share. The gross proceeds from our initial public offering, before deducting underwriting discounts and commissions, was $14.4 million. The offer and sale of all of the shares in the offering were registered under the Securities Act pursuant to a registration statement on Form S-1 (File No. 333-254068), which was declared effective by the SEC on April 14, 2021. Boustead Securities, LLC acted as underwriter for the offering.

 

There has been no material change in the planned use of proceeds from our IPO as described in our final prospectus filed with the SEC on April 16, 2021 pursuant to Rule 424(b). No direct or indirect payments were made by us to any of our directors or officers or their associates, to persons owning ten percent or more of our common stock or to their associates, or to our affiliates, other than payments in the ordinary course of business to officers for salaries. Pending the uses described, we intend to invest the net proceeds in short-term, interest-bearing obligations, investment-grade instruments, certificates of deposit or direct or guaranteed obligations of the U.S. government.

 

Item 3. Defaults Upon Senior Securities

 

None.

 

Item 4. Mine Safety Disclosure

 

Not Applicable.

 

Item 5. Other Information

 

There is no other information required to be disclosed under this item which was not previously disclosed.

 

 

 21 
 

 


Item 6. Exhibits.

 

Exhibit

Number

  Description
     
31.1*   Certification of the Principal Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934
31.2*   Certification of the Principal Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934
32.1*(1)   Certification of the Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2*(1)   Certification of the Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS   Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)
101.SCH   Inline XBRL Taxonomy Extension Schema Document
101.CAL   Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF   Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB   Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE   Inline XBRL Taxonomy Extension Presentation Linkbase Document
104   Cover Page Interactive Data File (formatted in IXBRL, and included in exhibit 101).

 

* Filed herewith.

 

(1) The certifications on Exhibit 32 hereto are deemed not “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that Section. Such certifications will not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act.

 

 

 

 

 22 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, there unto duly authorized.

 

  ESPORTS TECHNOLOGIES, INC.
     
Date: August 13, 2021 By: /s/ Aaron Speach
   

Aaron Speach

Chief Executive Officer, President and Director

(Principal Executive Officer)

     
     
Date: August 13, 2021 By: /s/ James Purcell
   

James Purcell

Chief Financial Officer

(Principal Financial Officer and Principal Accounting Officer)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 23 

EX-31.1 2 esports_ex3101.htm CERTIFICATION

EXHIBIT 31.1 

CERTIFICATION PURSUANT TO

18 USC, SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES OXLEY ACT OF 2002

 

I, Aaron Speach, certify that:

 

  1. I have reviewed this quarterly report on Form 10-Q of Esports Technologies, Inc.;
     
  2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
     
  3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
     
  4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

 

  a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedure to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
     
  b. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based upon such evaluation; and
     
  c. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

  5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

  a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
     
  b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Dated: August 13, 2021 /s/ Aaron Speach
 

Aaron Speach

Chief Executive Officer, President and Director

(Principal Executive Officer)

   

 

 

EX-31.2 3 esports_ex3102.htm CERTIFICATION

EXHIBIT 31.2 

CERTIFICATION PURSUANT TO

18 USC, SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES OXLEY ACT OF 2002

 

I, James Purcell, certify that:

 

  1. I have reviewed this quarterly report on Form 10-Q of Esports Technologies, Inc.;
     
  2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
     
  3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
     
  4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

 

  a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedure to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
     
  b. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based upon such evaluation; and
     
  c. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

  5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

  a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
     
  b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Dated: August 13, 2021 /s/ James Purcell
 

James Purcell

Chief Financial Officer

(Principal Financial Officer and Principal Accounting Officer)

   

 

 

EX-32.1 4 esports_ex3201.htm CERTIFICATION

Exhibit 32.1

 

CERTIFICATION PURSUANT TO

18 USC, SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

 

In connection with the Quarterly Report of Esports Technologies, Inc. (the “Company”) on Form 10-Q for the period ending June 30, 2021 (the “Report”), I, Aaron Speach, Chief Executive Officer, President and Director of the Company, certify, pursuant to 18 USC Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge and belief:

 

  1. The Report fully complies with the requirements of Rule 13(a) or 15(d) of the Securities Exchange Act of 1934; and
     
  2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Dated: August 13, 2021 /s/ Aaron Speach
 

Aaron Speach

Chief Executive Officer, President and Director

(Principal Executive Officer)

 

 

 

 

 

EX-32.2 5 esports_ex3202.htm CERTIFICATION

Exhibit 32.2

 

CERTIFICATION PURSUANT TO

18 USC, SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

 

In connection with the Quarterly Report of Esports Technologies, Inc. (the “Company”) on Form 10-Q for the period ending June 30, 2021 (the “Report”), I, James Purcell, Chief Financial Officer of the Company, certify, pursuant to 18 USC Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge and belief:

 

  1. The Report fully complies with the requirements of Rule 13(a) or 15(d) of the Securities Exchange Act of 1934; and
     
  2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Dated: August 13, 2021 /s/ James Purcell
 

James Purcell

Chief Financial Officer

(Principal Financial Officer and Principal Accounting Officer)

 

 

 

 

 

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(“Esports Tech”) was formed on September 24, 2020 as a Nevada corporation. Esports Tech is a technology company creating and operating platforms focused on esports and competitive gaming. The Company operates under a Curacao gaming sublicense and can provide online betting services to various countries around the world. The majority of the Company’s customers are based in the Philippines. The Company’s consolidated financial statements include its accounts and the accounts of its 100% owned subsidiaries, namely Global E-Sports Entertainment Group, LLC (“Global E-Sports”), ESEG Limited (“ESEG”) and Gogawi Entertainment Group (“Gogawi”) (collectively referred to as the “Company,” “we,” “our,” or “us”). Global E-Sports, a Nevada limited liability company, was incorporated in Nevada on June 28, 2016. ESEG, a Belize company was incorporated on October 31, 2016. Gogawi, a Cypress company was incorporated on December 8, 2018 and has always been a wholly owned subsidiary of ESEG. On December 8, 2020, the Company incorporated Esportsbook Technologies Limited (“Esportsbook”) in Ireland as a wholly-owned subsidiary of Esports Tech. All amounts included in this Form 10-Q are expressed in U.S. Dollars, unless otherwise noted.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Going Concern</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company has recurring losses and generated negative cash flows from operations since inception. In April 2021, the Company completed its Initial Public Offering (“IPO”) and issued <span id="xdx_90C_eus-gaap--StockIssuedDuringPeriodSharesNewIssues_c20201001__20210430__us-gaap--SubsidiarySaleOfStockAxis__us-gaap--IPOMember_zvF9xlLzBhNb" title="Stock issued new, shares">2,400,000</span> shares of common stock for gross cash proceeds of <span id="xdx_90C_eus-gaap--ProceedsFromIssuanceInitialPublicOffering_pp0p0_c20201001__20210430__us-gaap--SubsidiarySaleOfStockAxis__us-gaap--IPOMember_zYNj6hGwjaI6" title="Proceeds from issuance of stock">$14,400,000</span>, receiving net proceeds of $<span id="xdx_905_eus-gaap--ProceedsFromIssuanceOfCommonStock_c20201001__20210430__us-gaap--SubsidiarySaleOfStockAxis__us-gaap--IPOMember_zY9YQjkFto8h">13,514,200</span>.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Impact of COVID-19</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The outbreak of the 2019 novel coronavirus disease (“COVID-19”), which was declared a global pandemic by the World Health Organization on March 11, 2020, and the related responses by public health and governmental authorities to contain and combat its outbreak and spread, has severely impacted the U.S. and world economies. Economic recessions, including those brought on by the COVID-19 outbreak may have a negative effect on the demand for the Company’s products and the Company’s operating results. The range of possible impacts on the Company’s business from the coronavirus pandemic could include: (i) changing demand for the Company’s online betting products; and (ii) increasing contraction in the capital markets.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> 2400000 14400000 13514200 <p id="xdx_80C_eus-gaap--SignificantAccountingPoliciesTextBlock_zfDPLitedUA2" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>NOTE 2 – <span id="xdx_822_zlhTwDU4NMXc">SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The significant accounting policies followed in the preparation of the consolidated financial statements are as follows:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p id="xdx_84F_eus-gaap--BasisOfAccountingPolicyPolicyTextBlock_z3y6fB5zkPGe" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><span id="xdx_86E_zZNhejyo3034">Basis of Presentation</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The accompanying unaudited financial statements of the Company, include the accounts of the Company and its wholly-owned subsidiaries, and have been prepared in accordance with generally accepted accounting principles accepted in the United States (“U.S. GAAP”) for interim unaudited financial information. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The unaudited financial statements include all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary in order to make the condensed financial statements not misleading. Operating results for the three and nine months ended June 30, 2021, are not necessarily indicative of the final results that may be expected for the year ended September 30, 2021. For more complete financial information, these unaudited financial statements should be read in conjunction with the audited consolidated financial statements for the year ended September 30, 2020 included in our Form S-1 filed with the SEC. Notes to the consolidated financial statements which would substantially duplicate the disclosures contained in the audited consolidated financial statements for the most recent fiscal period, as reported in the Form S-1, have been omitted. All intercompany accounts, transactions and balances have been eliminated in consolidation.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Certain reclassifications have been made to prior period amounts to conform to the current year presentation.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <p id="xdx_848_eus-gaap--GoodwillAndIntangibleAssetsIntangibleAssetsPolicy_zn3Jgrg8iygf" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><span id="xdx_86C_zvB768bB4PK5">Intangible Assets</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Cryptocurrencies</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">There is currently no specific guidance under GAAP or alternative accounting framework for the accounting for cryptocurrencies recognized as revenue or held, and management has exercised significant judgment in determining the appropriate accounting treatment. In the event authoritative guidance is enacted by the FASB, the Company may be required to change its policies, which could have an effect on the Company’s consolidated financial position and results from operations.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Cryptocurrencies held are accounted for as an indefinite-lived intangible asset under ASC 350, <i>Intangible – Goodwill and Other</i>. 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, which is measured using the quoted price of the cryptocurrency at the time its fair value is being measured. 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 not 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.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company uses its cryptocurrencies to pay vendors and users. The Company also receives payments on its receivables and player deposits in cryptocurrency. Gains and losses realized upon settlement of cryptocurrencies are also recorded in general and administrative expense in our consolidated statements of operations.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Other Intangible Assets</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company’s other intangible asset consist of internet domain names, which are an indefinite-lived intangible. 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.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p id="xdx_844_ecustom--LiabilitiesToUsersPolicyTextBlock_zS14jOhIvGfh" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><span id="xdx_86C_zj9tYfetybMa">Liabilities to Users</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">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.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p id="xdx_843_eus-gaap--RevenueRecognitionPolicyTextBlock_zJLIVdGivbZj" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><span id="xdx_86B_zpV157LtuYV3">Revenue Recognition</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company recognizes revenue in accordance with ASC Topic 606, <i>Revenue From Contracts With Customers</i>, which was adopted on October 1, 2018 using the modified retrospective method. ASC Topic 606 requires companies to recognize revenue in a manner that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, the standard requires disclosures of the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The adoption of ASC Topic 606 had no impact to the Company’s comparative consolidated financial statements. Revenue is recognized based on the following five step model:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="text-align: justify; width: 48px"><span style="font: 10pt Times New Roman, Times, Serif">•</span></td> <td style="text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif">Identification of the contract with a customer</span></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="text-align: justify; width: 48px"><span style="font: 10pt Times New Roman, Times, Serif">•</span></td> <td style="text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif">Identification of the performance obligations in the contract</span></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="text-align: justify; width: 48px"><span style="font: 10pt Times New Roman, Times, Serif">•</span></td> <td style="text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif">Determination of the transaction price</span></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="text-align: justify; width: 48px"><span style="font: 10pt Times New Roman, Times, Serif">•</span></td> <td style="text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif">Allocation of the transaction price to the performance obligations in the contract</span></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="text-align: justify; width: 48px"><span style="font: 10pt Times New Roman, Times, Serif">•</span></td> <td style="text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif">Recognition of revenue when, or as, the Company satisfies a performance obligation </span></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">No single customer exceeded more than 10% of revenue during the three and nine months ended June 30, 2021 and 2020. In addition, no disaggregation of revenue is required because all current revenue is generated from gaming revenue.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Performance Obligations</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company operates an online betting platform allowing users to place wagers on a variety of live sporting events and esports events. Each wager placed by users create a single performance obligation for the Company to administer each event wagered. Gross gaming revenue is the aggregate of gaming wins and losses based on results of each event that customers wager bets on. 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 reduction to gross gaming revenue.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p id="xdx_84B_ecustom--CostOfRevenuePolicyTextBlock_zAjbMjjAIX9l" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><span id="xdx_867_zJAW7y5IKWsa">Cost of Revenue</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Cost of revenue consists of third-party costs associated with the betting software platform and amortization of capitalized software costs.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p id="xdx_849_eus-gaap--NewAccountingPronouncementsPolicyPolicyTextBlock_z9ot7jfybEsk" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><span id="xdx_861_zsRc8AFPG09l">Recently Issued Accounting Pronouncements</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">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.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <p id="xdx_84F_eus-gaap--BasisOfAccountingPolicyPolicyTextBlock_z3y6fB5zkPGe" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><span id="xdx_86E_zZNhejyo3034">Basis of Presentation</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The accompanying unaudited financial statements of the Company, include the accounts of the Company and its wholly-owned subsidiaries, and have been prepared in accordance with generally accepted accounting principles accepted in the United States (“U.S. GAAP”) for interim unaudited financial information. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The unaudited financial statements include all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary in order to make the condensed financial statements not misleading. Operating results for the three and nine months ended June 30, 2021, are not necessarily indicative of the final results that may be expected for the year ended September 30, 2021. For more complete financial information, these unaudited financial statements should be read in conjunction with the audited consolidated financial statements for the year ended September 30, 2020 included in our Form S-1 filed with the SEC. Notes to the consolidated financial statements which would substantially duplicate the disclosures contained in the audited consolidated financial statements for the most recent fiscal period, as reported in the Form S-1, have been omitted. All intercompany accounts, transactions and balances have been eliminated in consolidation.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Certain reclassifications have been made to prior period amounts to conform to the current year presentation.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <p id="xdx_848_eus-gaap--GoodwillAndIntangibleAssetsIntangibleAssetsPolicy_zn3Jgrg8iygf" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><span id="xdx_86C_zvB768bB4PK5">Intangible Assets</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Cryptocurrencies</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">There is currently no specific guidance under GAAP or alternative accounting framework for the accounting for cryptocurrencies recognized as revenue or held, and management has exercised significant judgment in determining the appropriate accounting treatment. In the event authoritative guidance is enacted by the FASB, the Company may be required to change its policies, which could have an effect on the Company’s consolidated financial position and results from operations.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Cryptocurrencies held are accounted for as an indefinite-lived intangible asset under ASC 350, <i>Intangible – Goodwill and Other</i>. 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, which is measured using the quoted price of the cryptocurrency at the time its fair value is being measured. 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 not 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.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company uses its cryptocurrencies to pay vendors and users. The Company also receives payments on its receivables and player deposits in cryptocurrency. Gains and losses realized upon settlement of cryptocurrencies are also recorded in general and administrative expense in our consolidated statements of operations.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Other Intangible Assets</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company’s other intangible asset consist of internet domain names, which are an indefinite-lived intangible. 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.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p id="xdx_844_ecustom--LiabilitiesToUsersPolicyTextBlock_zS14jOhIvGfh" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><span id="xdx_86C_zj9tYfetybMa">Liabilities to Users</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">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.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p id="xdx_843_eus-gaap--RevenueRecognitionPolicyTextBlock_zJLIVdGivbZj" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><span id="xdx_86B_zpV157LtuYV3">Revenue Recognition</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company recognizes revenue in accordance with ASC Topic 606, <i>Revenue From Contracts With Customers</i>, which was adopted on October 1, 2018 using the modified retrospective method. ASC Topic 606 requires companies to recognize revenue in a manner that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, the standard requires disclosures of the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The adoption of ASC Topic 606 had no impact to the Company’s comparative consolidated financial statements. Revenue is recognized based on the following five step model:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="text-align: justify; width: 48px"><span style="font: 10pt Times New Roman, Times, Serif">•</span></td> <td style="text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif">Identification of the contract with a customer</span></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="text-align: justify; width: 48px"><span style="font: 10pt Times New Roman, Times, Serif">•</span></td> <td style="text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif">Identification of the performance obligations in the contract</span></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="text-align: justify; width: 48px"><span style="font: 10pt Times New Roman, Times, Serif">•</span></td> <td style="text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif">Determination of the transaction price</span></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="text-align: justify; width: 48px"><span style="font: 10pt Times New Roman, Times, Serif">•</span></td> <td style="text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif">Allocation of the transaction price to the performance obligations in the contract</span></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="text-align: justify; width: 48px"><span style="font: 10pt Times New Roman, Times, Serif">•</span></td> <td style="text-align: justify"><span style="font: 10pt Times New Roman, Times, Serif">Recognition of revenue when, or as, the Company satisfies a performance obligation </span></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">No single customer exceeded more than 10% of revenue during the three and nine months ended June 30, 2021 and 2020. In addition, no disaggregation of revenue is required because all current revenue is generated from gaming revenue.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Performance Obligations</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company operates an online betting platform allowing users to place wagers on a variety of live sporting events and esports events. Each wager placed by users create a single performance obligation for the Company to administer each event wagered. Gross gaming revenue is the aggregate of gaming wins and losses based on results of each event that customers wager bets on. 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 reduction to gross gaming revenue.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p id="xdx_84B_ecustom--CostOfRevenuePolicyTextBlock_zAjbMjjAIX9l" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><span id="xdx_867_zJAW7y5IKWsa">Cost of Revenue</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Cost of revenue consists of third-party costs associated with the betting software platform and amortization of capitalized software costs.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p id="xdx_849_eus-gaap--NewAccountingPronouncementsPolicyPolicyTextBlock_z9ot7jfybEsk" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><span id="xdx_861_zsRc8AFPG09l">Recently Issued Accounting Pronouncements</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">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.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <p id="xdx_80F_eus-gaap--PropertyPlantAndEquipmentDisclosureTextBlock_zIm1w06222T2" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>NOTE 3 – <span id="xdx_823_znqNzRhvibHj">LONG-LIVED ASSETS</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Software and equipment</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company’s software and equipment consisted of the following as of June 30, 2021 and September 30, 2020: </p> <table cellpadding="0" cellspacing="0" id="xdx_89B_eus-gaap--ScheduleOfFiniteLivedIntangibleAssetsTableTextBlock_zsW2cRf49mHh" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - LONG-LIVED ASSETS (Details - Software)"> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"><span id="xdx_8BD_zKjveE3EelYd" style="display: none">Schedule of software and equipment</span></td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><p style="margin-top: 0; margin-bottom: 0">June 30,</p> <p style="margin-top: 0; margin-bottom: 0">2021</p></td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><p style="margin-top: 0; margin-bottom: 0">September 30,</p> <p style="margin-top: 0; margin-bottom: 0">2020</p></td><td style="padding-bottom: 1pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="width: 66%; padding-bottom: 1pt">Software</td><td style="width: 2%; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; width: 1%; text-align: left">$</td><td id="xdx_987_eus-gaap--PropertyPlantAndEquipmentGross_c20210630__us-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--SoftwareAndEquipmentMember_pp0p0" style="border-bottom: Black 1pt solid; width: 13%; text-align: right" title="Software">160,511</td><td style="width: 1%; padding-bottom: 1pt; text-align: left"> </td><td style="width: 2%; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; width: 1%; text-align: left">$</td><td id="xdx_982_eus-gaap--PropertyPlantAndEquipmentGross_iI_pp0p0_d0_c20200930__us-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--SoftwareAndEquipmentMember_zIrgcJ4AcrA9" style="border-bottom: Black 1pt solid; width: 13%; text-align: right" title="Software">–</td><td style="width: 1%; padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Total software and equipment</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98C_eus-gaap--PropertyPlantAndEquipmentGross_c20210630_pp0p0" style="text-align: right" title="Software">160,511</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_988_eus-gaap--PropertyPlantAndEquipmentGross_iI_pp0p0_d0_c20200930_zLBTNEdi0cOf" style="text-align: right" title="Software">–</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left; padding-bottom: 1pt">Accumulated depreciation</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_98D_eus-gaap--AccumulatedDepreciationDepletionAndAmortizationPropertyPlantAndEquipment_iNI_pp0p0_di_c20210630_zz0MOnrT1Wgb" style="border-bottom: Black 1pt solid; text-align: right" title="Accumulated depreciation">(74,075</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_980_eus-gaap--AccumulatedDepreciationDepletionAndAmortizationPropertyPlantAndEquipment_iI_pp0p0_d0_c20200930_zZci6nZ4n2X7" style="border-bottom: Black 1pt solid; text-align: right" title="Accumulated depreciation">–</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 2.5pt">Software and equipment, net</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_986_eus-gaap--PropertyPlantAndEquipmentNet_c20210630_pp0p0" style="border-bottom: Black 2.5pt double; text-align: right" title="Software and equipment, net">86,436</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_988_eus-gaap--PropertyPlantAndEquipmentNet_iI_pp0p0_d0_c20200930_zyKP1ozbdTfe" style="border-bottom: Black 2.5pt double; text-align: right" title="Software and equipment, net">–</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> <p id="xdx_8AF_z8JpEulXK3Fb" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On November 5, 2020, the Company entered into an asset purchase agreement with a third party to acquire certain proprietary technology data. The Company made a cash payment of $<span id="xdx_903_eus-gaap--PaymentsToAcquireSoftware_c20201001__20201105__us-gaap--AssetAcquisitionAxis__custom--TechnologyDataMember_pp0p0" title="Payment for technology data">61,425</span> and granted warrants to purchase <span id="xdx_90B_eus-gaap--ClassOfWarrantOrRightNumberOfSecuritiesCalledByWarrantsOrRights_iI_c20201105__us-gaap--AssetAcquisitionAxis__custom--TechnologyDataMember__us-gaap--AwardTypeAxis__custom--WarrantsMember_zDAmKJQPcY35" title="Warrants issued">32,000</span> shares of common stock at an exercise price of $<span id="xdx_905_eus-gaap--ClassOfWarrantOrRightExercisePriceOfWarrantsOrRights1_c20201105__us-gaap--AssetAcquisitionAxis__custom--TechnologyDataMember__us-gaap--AwardTypeAxis__custom--WarrantsMember_pdd" title="Warrant exercise price">0.25</span> per share for a period of five years. The fair value of the warrants was estimated to be $<span id="xdx_909_ecustom--FairValueOfWarrantsGranted_c20201001__20201105__us-gaap--AssetAcquisitionAxis__custom--TechnologyDataMember__us-gaap--AwardTypeAxis__custom--WarrantsMember_pp0p0" title="Fair value of warrants granted">57,252</span> as of the grant date. The total consideration paid of $<span id="xdx_90C_eus-gaap--BusinessCombinationConsiderationTransferred1_c20201001__20201105__us-gaap--AssetAcquisitionAxis__custom--TechnologyDataMember_pp0p0" title="Total consideration paid">118,677</span> is included as part of software costs within property and equipment on the Company’s consolidated balance sheet. The Company also entered into an employment agreement with the seller, effective November 1, 2020. The employee will be compensated at a rate of $<span id="xdx_90E_eus-gaap--ContractualObligation_iI_pp0p0_c20201105__us-gaap--AssetAcquisitionAxis__custom--TechnologyDataMember__us-gaap--TransactionTypeAxis__custom--AnnualSalaryMember_zAdAUpN00KZk" title="Payment to acquire intangible assets">110,000</span> per year and will receive a common stock award of <span id="xdx_902_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsGrantsInPeriod_c20201001__20201105__us-gaap--AssetAcquisitionAxis__custom--TechnologyDataMember_z8rOIfm8tYdf" title="Stock issued for asset acquisition">100,000</span> shares, which vest annually over four years.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The software costs above relate to acquired components of the Company’s new platform which is being depreciated over an expected useful life.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Intangible Assets</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">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 $<span id="xdx_906_eus-gaap--InvestmentOwnedAtCost_iI_c20200901__us-gaap--IndefiniteLivedIntangibleAssetsByMajorClassAxis__us-gaap--InternetDomainNamesMember__dei--LegalEntityAxis__custom--EsegLimitedMember_zQeQE8AGxUv1">2,239,606</span>, based on the estimated fair value of the consideration transferred to the sellers. ESEG issued notes payable with a combined principal amount of $<span id="xdx_901_eus-gaap--DebtInstrumentFaceAmount_iI_c20200930__us-gaap--IndefiniteLivedIntangibleAssetsByMajorClassAxis__us-gaap--InternetDomainNamesMember_zSMPkNnNTlE4" title="Debt Instrument, Face Amount">2,100,000</span>, which were to mature on <span id="xdx_909_eus-gaap--DebtInstrumentMaturityDate_dd_c20191001__20200930__us-gaap--IndefiniteLivedIntangibleAssetsByMajorClassAxis__us-gaap--InternetDomainNamesMember_zHsAAHO9Cw5d" title="Debt maturity date">March 1, 2022</span>, bearing interest at <span id="xdx_90A_eus-gaap--DebtInstrumentInterestRateStatedPercentage_iI_dp_c20200930__us-gaap--IndefiniteLivedIntangibleAssetsByMajorClassAxis__us-gaap--InternetDomainNamesMember_zo8WqHSEck64" title="Debt interest rate">10</span>%. These notes were exchanged for notes of the Company in September 2020. The Company also agreed to pay a total of $<span id="xdx_90D_eus-gaap--DebtInstrumentPeriodicPaymentTermsBalloonPaymentToBePaid_c20200930__us-gaap--IndefiniteLivedIntangibleAssetsByMajorClassAxis__us-gaap--InternetDomainNamesMember_pp0p0" title="Debt balloon payment">675,000</span> on <span id="xdx_906_ecustom--DebtBalloonPaymentDate_dd_c20191001__20200930__us-gaap--IndefiniteLivedIntangibleAssetsByMajorClassAxis__us-gaap--InternetDomainNamesMember_z1kH9lT1ZVhg" title="Debt balloon payment date">September 1, 2025</span>, with no interest. The Company estimated discount of these liabilities totaling $<span id="xdx_90D_eus-gaap--DebtInstrumentUnamortizedDiscount_c20200930__us-gaap--IndefiniteLivedIntangibleAssetsByMajorClassAxis__us-gaap--InternetDomainNamesMember_pp0p0" title="Unamortized discount">535,394</span> at the date of the transaction, to be amortized over the maturity period of the liabilities. The domain names were recorded as an intangible asset with an indefinite useful life. The Company’s management evaluated the domain names at September 30, 2020 and determined no impairment was necessary.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following table presents the activities of the Company’s cryptocurrency holdings for the three and nine months ended June 30, 2021: </p> <table cellpadding="0" cellspacing="0" id="xdx_89C_ecustom--CryptocurrencyActivityTableTextBlock_zs673Fhj905g" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - LONG-LIVED ASSETS (Details - Crytocurrency)"> <tr style="vertical-align: bottom; background-color: White"> <td style="width: 83%"><span id="xdx_8BB_zL5XnCzteTs1" style="display: none">Cryptocurrency activity table</span></td><td style="width: 2%"> </td> <td style="text-align: left; width: 1%"> </td><td style="text-align: right; width: 13%"> </td><td style="text-align: left; width: 1%"> </td></tr> </table> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="width: 83%; font-weight: bold">Cryptocurrency at September 30, 2020</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_98C_ecustom--Cryptocurrency_iS_pp0p0_c20201001__20210630_zkMuKGBxyecl" style="width: 13%; text-align: right">44,562</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td>Additions of cryptocurrency</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98B_ecustom--AdditionsOfCryptocurrency_c20201001__20210630_pp0p0" style="text-align: right" title="Additions of cryptocurrency">36,605</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td>Payments of cryptocurrency</td><td> </td> <td style="text-align: left"> </td><td id="xdx_988_ecustom--PaymentsOfCryptocurrency_c20201001__20210630_pp0p0" style="text-align: right" title="Payments of cryptocurrency">(125,480</td><td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Gain on cryptocurrency</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_980_ecustom--GainOnCryptocurrency_c20201001__20210630_pp0p0" style="border-bottom: Black 1pt solid; text-align: right" title="Gain on cryptocurrency">45,268</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="font-weight: bold; padding-bottom: 2.5pt">Cryptocurrency at June 30, 2021</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_98B_ecustom--Cryptocurrency_iE_pp0p0_c20201001__20210630_zuropvoYDUpj" style="border-bottom: Black 2.5pt double; text-align: right" title="Cryptocurrency">955</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Additions of cryptocurrency during the nine months ended June 30, 2021 represent settlement of outstanding accounts receivable of $<span><span id="xdx_904_ecustom--AdditionsOfCryptocurrency_c20210401__20210630__us-gaap--BalanceSheetLocationAxis__us-gaap--AccountsReceivableMember_pp0p0" title="Additions of cryptocurrency">18,158</span></span> and net deposits from players of <span>$<span id="xdx_908_ecustom--AdditionsOfCryptocurrency_c20210401__20210630__us-gaap--BalanceSheetLocationAxis__custom--NetDepositsMember_pp0p0" title="Additions of cryptocurrency">18,447</span></span>. Payments of cryptocurrency during the nine months ended June 30, 2021 included payments of accounts payable and accrued expenses of $<span><span id="xdx_90A_ecustom--PaymentsOfCryptocurrency_c20210401__20210630__us-gaap--BalanceSheetLocationAxis__custom--AccountsPayableAndAccruedExpensesMember_pp0p0" title="Payments of cryptocurrency">63,971 and prepaid expenses of $<span id="xdx_90B_ecustom--PaymentsOfCryptocurrency_pp0p0_c20210401__20210630__us-gaap--BalanceSheetLocationAxis__us-gaap--PrepaidExpensesAndOtherCurrentAssetsMember_zZcg9Lw93OFb">61,509</span></span></span>. Use of cryptocurrency to settle receivables and payables during the period are reflected as a component of changes in operating assets and liabilities in the consolidated statement of cash flows.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>License Agreement</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">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 <span id="xdx_907_eus-gaap--PaymentsToAcquireOtherProductiveAssets_pp0p0_c20201001__20210630__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__custom--OnlineBettingTechnologyMember__us-gaap--TransactionTypeAxis__custom--UponExecutionOfAgreementMember_z06QHLe3HLk3" title="Payment for option">$133,770</span> upon execution of the option agreement and paid an additional <span id="xdx_909_eus-gaap--PaymentsToAcquireOtherProductiveAssets_pp0p0_c20201001__20210503__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__custom--OnlineBettingTechnologyMember__us-gaap--TransactionTypeAxis__custom--UponExerciseOfOptionMember_zRQMnlWxoPWb">$286,328</span> in cash and agreed to issue <span id="xdx_90D_eus-gaap--StockIssuedDuringPeriodSharesPurchaseOfAssets_c20201001__20210731__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__custom--OnlineBettingTechnologyMember_z93hwLMl7mfa">65,000</span> shares of common stock upon exercise of the option on or about May 3, 2021. The shares were issued in July 2021 and had a fair value of <span id="xdx_902_eus-gaap--StockIssuedDuringPeriodValuePurchaseOfAssets_c20201001__20210731__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__custom--OnlineBettingTechnologyMember_zgKEpUfxBnb5">$1,456,650</span> at the date of exercise of the option and execution of the license agreement resulting in total value for the license agreement of <span id="xdx_901_ecustom--IntangibleAssetsLicenseAgreements_iI_c20201001__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__custom--OnlineBettingTechnologyMember_z8f434Ugvc73"><span style="-sec-ix-hidden: xdx2ixbrl0604">$1,876,748.</span></span> During the three and nine months ended June 30, 2021, the Company recognized amortization expense of <span id="xdx_907_eus-gaap--AmortizationOfIntangibleAssets_c20201001__20210630__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__custom--OnlineBettingTechnologyMember_z1vTvqU1fDlk">$104,264</span> included in product and technology expenses.</p> <p id="xdx_8A3_zxQWA1FodSAd" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <table cellpadding="0" cellspacing="0" id="xdx_89B_eus-gaap--ScheduleOfFiniteLivedIntangibleAssetsTableTextBlock_zsW2cRf49mHh" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - LONG-LIVED ASSETS (Details - Software)"> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"><span id="xdx_8BD_zKjveE3EelYd" style="display: none">Schedule of software and equipment</span></td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><p style="margin-top: 0; margin-bottom: 0">June 30,</p> <p style="margin-top: 0; margin-bottom: 0">2021</p></td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><p style="margin-top: 0; margin-bottom: 0">September 30,</p> <p style="margin-top: 0; margin-bottom: 0">2020</p></td><td style="padding-bottom: 1pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="width: 66%; padding-bottom: 1pt">Software</td><td style="width: 2%; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; width: 1%; text-align: left">$</td><td id="xdx_987_eus-gaap--PropertyPlantAndEquipmentGross_c20210630__us-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--SoftwareAndEquipmentMember_pp0p0" style="border-bottom: Black 1pt solid; width: 13%; text-align: right" title="Software">160,511</td><td style="width: 1%; padding-bottom: 1pt; text-align: left"> </td><td style="width: 2%; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; width: 1%; text-align: left">$</td><td id="xdx_982_eus-gaap--PropertyPlantAndEquipmentGross_iI_pp0p0_d0_c20200930__us-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--SoftwareAndEquipmentMember_zIrgcJ4AcrA9" style="border-bottom: Black 1pt solid; width: 13%; text-align: right" title="Software">–</td><td style="width: 1%; padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Total software and equipment</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98C_eus-gaap--PropertyPlantAndEquipmentGross_c20210630_pp0p0" style="text-align: right" title="Software">160,511</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_988_eus-gaap--PropertyPlantAndEquipmentGross_iI_pp0p0_d0_c20200930_zLBTNEdi0cOf" style="text-align: right" title="Software">–</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left; padding-bottom: 1pt">Accumulated depreciation</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_98D_eus-gaap--AccumulatedDepreciationDepletionAndAmortizationPropertyPlantAndEquipment_iNI_pp0p0_di_c20210630_zz0MOnrT1Wgb" style="border-bottom: Black 1pt solid; text-align: right" title="Accumulated depreciation">(74,075</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_980_eus-gaap--AccumulatedDepreciationDepletionAndAmortizationPropertyPlantAndEquipment_iI_pp0p0_d0_c20200930_zZci6nZ4n2X7" style="border-bottom: Black 1pt solid; text-align: right" title="Accumulated depreciation">–</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 2.5pt">Software and equipment, net</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_986_eus-gaap--PropertyPlantAndEquipmentNet_c20210630_pp0p0" style="border-bottom: Black 2.5pt double; text-align: right" title="Software and equipment, net">86,436</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_988_eus-gaap--PropertyPlantAndEquipmentNet_iI_pp0p0_d0_c20200930_zyKP1ozbdTfe" style="border-bottom: Black 2.5pt double; text-align: right" title="Software and equipment, net">–</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> 160511 0 160511 0 74075 0 86436 0 61425 32000 0.25 57252 118677 110000 100000 2239606 2100000 2022-03-01 0.10 675000 2025-09-01 535394 <table cellpadding="0" cellspacing="0" id="xdx_89C_ecustom--CryptocurrencyActivityTableTextBlock_zs673Fhj905g" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - LONG-LIVED ASSETS (Details - Crytocurrency)"> <tr style="vertical-align: bottom; background-color: White"> <td style="width: 83%"><span id="xdx_8BB_zL5XnCzteTs1" style="display: none">Cryptocurrency activity table</span></td><td style="width: 2%"> </td> <td style="text-align: left; width: 1%"> </td><td style="text-align: right; width: 13%"> </td><td style="text-align: left; width: 1%"> </td></tr> </table> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="width: 83%; font-weight: bold">Cryptocurrency at September 30, 2020</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_98C_ecustom--Cryptocurrency_iS_pp0p0_c20201001__20210630_zkMuKGBxyecl" style="width: 13%; text-align: right">44,562</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td>Additions of cryptocurrency</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98B_ecustom--AdditionsOfCryptocurrency_c20201001__20210630_pp0p0" style="text-align: right" title="Additions of cryptocurrency">36,605</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td>Payments of cryptocurrency</td><td> </td> <td style="text-align: left"> </td><td id="xdx_988_ecustom--PaymentsOfCryptocurrency_c20201001__20210630_pp0p0" style="text-align: right" title="Payments of cryptocurrency">(125,480</td><td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Gain on cryptocurrency</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_980_ecustom--GainOnCryptocurrency_c20201001__20210630_pp0p0" style="border-bottom: Black 1pt solid; text-align: right" title="Gain on cryptocurrency">45,268</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="font-weight: bold; padding-bottom: 2.5pt">Cryptocurrency at June 30, 2021</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_98B_ecustom--Cryptocurrency_iE_pp0p0_c20201001__20210630_zuropvoYDUpj" style="border-bottom: Black 2.5pt double; text-align: right" title="Cryptocurrency">955</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Additions of cryptocurrency during the nine months ended June 30, 2021 represent settlement of outstanding accounts receivable of $<span><span id="xdx_904_ecustom--AdditionsOfCryptocurrency_c20210401__20210630__us-gaap--BalanceSheetLocationAxis__us-gaap--AccountsReceivableMember_pp0p0" title="Additions of cryptocurrency">18,158</span></span> and net deposits from players of <span>$<span id="xdx_908_ecustom--AdditionsOfCryptocurrency_c20210401__20210630__us-gaap--BalanceSheetLocationAxis__custom--NetDepositsMember_pp0p0" title="Additions of cryptocurrency">18,447</span></span>. Payments of cryptocurrency during the nine months ended June 30, 2021 included payments of accounts payable and accrued expenses of $<span><span id="xdx_90A_ecustom--PaymentsOfCryptocurrency_c20210401__20210630__us-gaap--BalanceSheetLocationAxis__custom--AccountsPayableAndAccruedExpensesMember_pp0p0" title="Payments of cryptocurrency">63,971 and prepaid expenses of $<span id="xdx_90B_ecustom--PaymentsOfCryptocurrency_pp0p0_c20210401__20210630__us-gaap--BalanceSheetLocationAxis__us-gaap--PrepaidExpensesAndOtherCurrentAssetsMember_zZcg9Lw93OFb">61,509</span></span></span>. Use of cryptocurrency to settle receivables and payables during the period are reflected as a component of changes in operating assets and liabilities in the consolidated statement of cash flows.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>License Agreement</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">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 <span id="xdx_907_eus-gaap--PaymentsToAcquireOtherProductiveAssets_pp0p0_c20201001__20210630__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__custom--OnlineBettingTechnologyMember__us-gaap--TransactionTypeAxis__custom--UponExecutionOfAgreementMember_z06QHLe3HLk3" title="Payment for option">$133,770</span> upon execution of the option agreement and paid an additional <span id="xdx_909_eus-gaap--PaymentsToAcquireOtherProductiveAssets_pp0p0_c20201001__20210503__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__custom--OnlineBettingTechnologyMember__us-gaap--TransactionTypeAxis__custom--UponExerciseOfOptionMember_zRQMnlWxoPWb">$286,328</span> in cash and agreed to issue <span id="xdx_90D_eus-gaap--StockIssuedDuringPeriodSharesPurchaseOfAssets_c20201001__20210731__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__custom--OnlineBettingTechnologyMember_z93hwLMl7mfa">65,000</span> shares of common stock upon exercise of the option on or about May 3, 2021. The shares were issued in July 2021 and had a fair value of <span id="xdx_902_eus-gaap--StockIssuedDuringPeriodValuePurchaseOfAssets_c20201001__20210731__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__custom--OnlineBettingTechnologyMember_zgKEpUfxBnb5">$1,456,650</span> at the date of exercise of the option and execution of the license agreement resulting in total value for the license agreement of <span id="xdx_901_ecustom--IntangibleAssetsLicenseAgreements_iI_c20201001__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__custom--OnlineBettingTechnologyMember_z8f434Ugvc73"><span style="-sec-ix-hidden: xdx2ixbrl0604">$1,876,748.</span></span> During the three and nine months ended June 30, 2021, the Company recognized amortization expense of <span id="xdx_907_eus-gaap--AmortizationOfIntangibleAssets_c20201001__20210630__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__custom--OnlineBettingTechnologyMember_z1vTvqU1fDlk">$104,264</span> included in product and technology expenses.</p> 44562 36605 -125480 45268 955 18158 18447 63971 61509 133770 286328 65000 1456650 104264 <p id="xdx_80C_eus-gaap--DebtDisclosureTextBlock_zUNxNOxpg5ha" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><b>NOTE 4 – <span id="xdx_823_zoHvP0Xd1ai">CONVERTIBLE NOTES PAYABLE AND OTHER LONG-TERM LIABILITIES</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On September 1, 2020, ESEG entered into three promissory notes, with a combined principal amount of $<span id="xdx_909_eus-gaap--NotesPayable_c20200901__us-gaap--LongtermDebtTypeAxis__custom--ESEGPromissoryNotesMember_pp0p0" title="Notes payable">2,100,000</span>. The notes bore interest at the rate of <span id="xdx_90E_eus-gaap--DebtInstrumentInterestRateStatedPercentage_iI_dp_c20200901__us-gaap--LongtermDebtTypeAxis__custom--ESEGPromissoryNotesMember_zKaLj3Jzsnnc" title="Debt interest rate">10</span>% per annum and matured on <span id="xdx_902_eus-gaap--DebtInstrumentMaturityDate_dd_c20191001__20200901__us-gaap--LongtermDebtTypeAxis__custom--ESEGPromissoryNotesMember_zUmN2nFg3vzd" title="Debt maturity date">March 1, 2022</span>. The Company also agreed to pay two of the lenders a total of $<span id="xdx_90B_eus-gaap--DebtInstrumentPeriodicPaymentTermsBalloonPaymentToBePaid_iI_c20250901__us-gaap--LongtermDebtTypeAxis__custom--ESEGPromissoryNotesMember_zxGQ0KWDul9f">675,000</span> on September 1, 2025, bearing no interest. The Company estimated total debt discount of these liabilities to be $<span id="xdx_900_eus-gaap--DebtInstrumentUnamortizedDiscount_c20200901__us-gaap--LongtermDebtTypeAxis__custom--ESEGPromissoryNotesMember_pp0p0" title="Debt discount">535,394</span> at the date of the transaction, of which $<span id="xdx_908_eus-gaap--DebtInstrumentUnamortizedDiscount_c20200901__us-gaap--LongtermDebtTypeAxis__custom--ESEGPromissoryNotesMember__us-gaap--DebtInstrumentAxis__custom--PromissoryNotesPayable1Member_pp0p0" title="Debt discount">279,516</span> related to the promissory notes payable, and $<span id="xdx_902_eus-gaap--DebtInstrumentUnamortizedDiscount_c20200901__us-gaap--LongtermDebtTypeAxis__custom--ESEGPromissoryNotesMember__us-gaap--DebtInstrumentAxis__custom--OtherLongTermLiabilitiesMember_pp0p0" title="Debt discount">255,878</span> related to the other long-term liabilities. The discounts will be amortized over the maturity period of each liability. As of June 30, 2021 and September 30, 2020, the carrying amount of the other long-term liabilities was $<span id="xdx_90D_eus-gaap--NotesPayable_c20210630__us-gaap--LongtermDebtTypeAxis__custom--ESEGPromissoryNotesMember__us-gaap--DebtInstrumentAxis__custom--OtherLongTermLiabilitiesMember_pp0p0" title="Notes payable">453,178</span> and $<span id="xdx_90B_eus-gaap--NotesPayable_c20200930__us-gaap--LongtermDebtTypeAxis__custom--ESEGPromissoryNotesMember__us-gaap--DebtInstrumentAxis__custom--OtherLongTermLiabilitiesMember_pp0p0" title="Notes payable">422,409</span>, respectively, which is net of the remaining discount totaling $<span id="xdx_902_eus-gaap--DebtInstrumentUnamortizedDiscount_c20210630__us-gaap--LongtermDebtTypeAxis__custom--ESEGPromissoryNotesMember__us-gaap--DebtInstrumentAxis__custom--OtherLongTermLiabilitiesMember_pp0p0" title="Debt discount">221,822</span> and $<span id="xdx_90D_eus-gaap--DebtInstrumentUnamortizedDiscount_c20200930__us-gaap--LongtermDebtTypeAxis__custom--ESEGPromissoryNotesMember__us-gaap--DebtInstrumentAxis__custom--OtherLongTermLiabilitiesMember_pp0p0" title="Debt discount">252,591</span>, respectively. The carrying amount of the convertible notes payable and associated discount is further discussed below.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On September 26, 2020, the Company assumed the notes payable with principal of $2,100,000 from ESEG. In connection with this assumption, Esports Tech issued each of the lenders a conversion option at a fixed price of $0.50 per share and issued <span id="xdx_903_ecustom--WarrantsIssuedShares_c20200926__us-gaap--LongtermDebtTypeAxis__custom--ESEGPromissoryNotesMember__us-gaap--AwardTypeAxis__custom--WarrantsMember_pdd" title="Warrants issued">2,015,000</span> warrants to purchase shares of the Company’s common stock at an exercise price of $<span id="xdx_90B_eus-gaap--ClassOfWarrantOrRightExercisePriceOfWarrantsOrRights1_c20200926__us-gaap--LongtermDebtTypeAxis__custom--ESEGPromissoryNotesMember__us-gaap--AwardTypeAxis__custom--WarrantsMember_pdd" title="Warrant exercise price">0.30</span> per share, each with a term of five <span id="xdx_907_eus-gaap--WarrantsAndRightsOutstandingTerm_iI_dtY_c20200926__us-gaap--LongtermDebtTypeAxis__custom--ESEGPromissoryNotesMember__us-gaap--AwardTypeAxis__custom--WarrantsMember_zBLrQ01UXlI6" style="display: none" title="Warrant term">5</span> years. The convertible notes bear interest at 10% per annum and mature on March 1, 2022. The holder may convert the note into shares of common stock at any time throughout the maturity date, to the extent and provided that no holder of the notes was or will be permitted to convert such notes so long as it or any of its affiliates would beneficially own in excess of 4.99% of the Company’s common stock after such conversion. The Company determined that the assignment of the notes payable by the subsidiary to the parent company was an extinguishment of the original notes payable due to the addition of a substantive conversion feature, and the Company recognized a loss on extinguishment of $<span id="xdx_906_eus-gaap--GainsLossesOnExtinguishmentOfDebt_c20191001__20200930__us-gaap--LongtermDebtTypeAxis__custom--ESEGPromissoryNotesMember_pp0p0" title="Loss on extinguishment of debt">265,779</span> during the year ended September 30, 2020.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">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 debt discount will be amortized through the maturity date of the convertible notes payable.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">During the three months ended December 31, 2020, a total of $<span id="xdx_90C_eus-gaap--DebtConversionConvertedInstrumentAmount1_c20201001__20201231_pp0p0" title="Debt converted, amount converted">187,500</span> of principal was converted into <span id="xdx_905_eus-gaap--DebtConversionConvertedInstrumentSharesIssued1_c20201001__20201231_pdd" title="Debt converted, shares issued">375,000</span> shares of common stock. As of June 30, 2021, the balance due under these notes, net of unamortized discount of $<span id="xdx_904_eus-gaap--DebtInstrumentUnamortizedDiscount_c20210630_pp0p0" title="Debt discount">826,189</span>, is $<span id="xdx_90B_eus-gaap--NotesPayable_c20210630_pp0p0" title="Notes payable">1,086,311</span>, with accrued interest of $<span id="xdx_903_eus-gaap--InterestPayableCurrentAndNoncurrent_c20210630_pp0p0" title="Accrued interest">116,774</span>. During the nine months ended June 30, 2021, the Company recorded a charge of $<span id="xdx_90B_eus-gaap--AmortizationOfDebtDiscountPremium_c20201001__20210630_pp0p0" title="Amortization of debt discount">1,187,913</span> in the accompanying consolidated statement of operations from the amortization of its debt discount related to the convertible notes payable and other liabilities described above.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> 2100000 0.10 2022-03-01 675000 535394 279516 255878 453178 422409 221822 252591 2015000 0.30 P5Y 265779 187500 375000 826189 1086311 116774 1187913 <p id="xdx_80C_eus-gaap--StockholdersEquityNoteDisclosureTextBlock_zWu1T2R1lKV8" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>NOTE 5 – <span id="xdx_824_zqY9jfKCtBvd">STOCKHOLDERS’ EQUITY</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company is currently authorized to issue up to 100,000,000 shares of common stock with a par value of $0.001. In addition, the Company is authorized to issue 10,000,000 shares of preferred stock with a par value of $0.001. The specific rights of the preferred stock, when so designated, shall be determined by the board of directors.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i> </i></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">During the three months ended December 31, 2020, the Company received gross cash proceeds of $<span id="xdx_908_eus-gaap--ProceedsFromIssuanceOfCommonStock_pp0p0_c20201001__20201231__us-gaap--StatementClassOfStockAxis__us-gaap--CommonStockMember__us-gaap--SubsidiarySaleOfStockAxis__custom--December2020Member_zWderWxfJVW4" title="Proceeds from sale of stock">4,000,000</span> in exchange for <span id="xdx_905_eus-gaap--StockIssuedDuringPeriodSharesNewIssues_c20201001__20201231__us-gaap--StatementClassOfStockAxis__us-gaap--CommonStockMember__us-gaap--SubsidiarySaleOfStockAxis__custom--December2020Member_z0pg3dPtdnTg" title="Stock issued new, shares">2,000,000</span> shares of common stock. In conjunction with this fundraising, broker commission and expenses of $<span id="xdx_90C_eus-gaap--PaymentsOfStockIssuanceCosts_pp0p0_c20201001__20201231__us-gaap--StatementClassOfStockAxis__us-gaap--CommonStockMember__us-gaap--SubsidiarySaleOfStockAxis__custom--December2020Member_zrWUPTVzTwge" title="Payment of stock issuance costs">351,929</span> were paid and <span id="xdx_901_ecustom--WarrantsIssued_c20201001__20201231__us-gaap--StatementClassOfStockAxis__custom--WarrantsMember__us-gaap--SubsidiarySaleOfStockAxis__custom--December2020Member_zg8qyTny0uNg" title="Warrants issued">173,625</span> common stock warrants with an exercise price of $<span id="xdx_902_eus-gaap--ClassOfWarrantOrRightExercisePriceOfWarrantsOrRights1_iI_c20201231__us-gaap--StatementClassOfStockAxis__custom--WarrantsMember__us-gaap--SubsidiarySaleOfStockAxis__custom--December2020Member_zQHHodjv3Qs9" title="Warrant exercise price">2.00</span> and a five-year <span id="xdx_903_eus-gaap--WarrantsAndRightsOutstandingTerm_iI_dtY_c20201231__us-gaap--StatementClassOfStockAxis__custom--WarrantsMember__us-gaap--SubsidiarySaleOfStockAxis__custom--December2020Member_z260Oow8xK88" style="display: none" title="Warrant term">5</span> term were issued. The fair value of the warrants issued in connection with the financing was estimated to be $<span id="xdx_90D_ecustom--FairValueOfWarrantsGranted_pp0p0_c20201001__20201231__us-gaap--StatementClassOfStockAxis__custom--WarrantsMember__us-gaap--SubsidiarySaleOfStockAxis__custom--December2020Member_z3QYmLEUytvk" title="Fair value of warrants granted">228,500</span> as discussed below.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In January 2021, the Company sold <span id="xdx_907_eus-gaap--StockIssuedDuringPeriodSharesNewIssues_c20201001__20210131__us-gaap--StatementClassOfStockAxis__us-gaap--CommonStockMember__us-gaap--SubsidiarySaleOfStockAxis__custom--January2021Member_zKMPOxwf69Qj" title="Stock issued new, shares">250,014</span> shares of common stock to investors for $3 per share, receiving gross proceeds of $<span id="xdx_90C_eus-gaap--ProceedsFromIssuanceOfCommonStock_pp0p0_c20201001__20210131__us-gaap--StatementClassOfStockAxis__us-gaap--CommonStockMember__us-gaap--SubsidiarySaleOfStockAxis__custom--January2021Member_zyUgIgZATEyj" title="Proceeds from sale of stock">750,042</span>. The company paid $<span id="xdx_902_eus-gaap--PaymentsOfStockIssuanceCosts_pp0p0_c20201001__20210131__us-gaap--StatementClassOfStockAxis__us-gaap--CommonStockMember__us-gaap--SubsidiarySaleOfStockAxis__custom--January2021Member_z92oJ55Au3Nj" title="Payment of stock issuance costs">30,314</span> of broker fees and commissions related to this fundraising and issued <span id="xdx_90F_ecustom--WarrantsIssued_c20201001__20210131__us-gaap--StatementClassOfStockAxis__custom--WarrantsMember__us-gaap--SubsidiarySaleOfStockAxis__custom--January2021Member_z5cWirBj612f" title="Warrants issued">8,750</span> warrants to purchase common stock with an exercise price of $<span id="xdx_901_eus-gaap--ClassOfWarrantOrRightExercisePriceOfWarrantsOrRights1_iI_c20210131__us-gaap--StatementClassOfStockAxis__custom--WarrantsMember__us-gaap--SubsidiarySaleOfStockAxis__custom--January2021Member_zUuq4kOSLvnb" title="Warrant exercise price">3</span> per share and a term of <span id="xdx_906_eus-gaap--WarrantsAndRightsOutstandingTerm_iI_dtY_c20210131__us-gaap--StatementClassOfStockAxis__custom--WarrantsMember__us-gaap--SubsidiarySaleOfStockAxis__custom--January2021Member_zXeO4XNA4Sn3" title="Warrant term">5</span> years. The fair value of the warrants issued in connection with the financing was estimated to be $<span id="xdx_909_ecustom--FairValueOfWarrantsGranted_pp0p0_c20201001__20210131__us-gaap--StatementClassOfStockAxis__custom--WarrantsMember__us-gaap--SubsidiarySaleOfStockAxis__custom--January2021Member_zEoofnuKOAB5" title="Fair value of warrants granted">228,500</span> as discussed below.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In February 2021, the Company entered into an agreement with a consultant where the Company agreed to issue warrants to purchase <span id="xdx_906_ecustom--WarrantsIssued_c20201001__20210228__srt--CounterpartyNameAxis__custom--ConsultantMember__us-gaap--StatementClassOfStockAxis__custom--WarrantsMember_pdd" title="Warrants issued">4,166</span> shares of stock with a term of <span id="xdx_90D_eus-gaap--WarrantsAndRightsOutstandingTerm_iI_dtY_c20210228__srt--CounterpartyNameAxis__custom--ConsultantMember__us-gaap--StatementClassOfStockAxis__custom--WarrantsMember_zdaidIGNAHqk" title="Warrant term">5</span> years at an exercise price of $<span id="xdx_909_eus-gaap--ClassOfWarrantOrRightExercisePriceOfWarrantsOrRights1_c20210228__srt--CounterpartyNameAxis__custom--ConsultantMember__us-gaap--StatementClassOfStockAxis__custom--WarrantsMember_pdd" title="Warrant exercise price">3</span> per share, and paid $<span id="xdx_90E_eus-gaap--ProfessionalAndContractServicesExpense_c20201001__20210228__srt--CounterpartyNameAxis__custom--ConsultantMember__us-gaap--StatementClassOfStockAxis__custom--WarrantsMember_pp0p0" title="Consulting expense">37,500</span> of cash for services rendered. The consultant will also receive $50,000 of consideration per year for an additional two years in a combination of cash and common stock warrants.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In April 2021, the Company completed its IPO and issued <span id="xdx_901_eus-gaap--StockIssuedDuringPeriodSharesNewIssues_c20201001__20210430__us-gaap--SubsidiarySaleOfStockAxis__us-gaap--IPOMember_z70yDSJ2oPA4">2,400,000 </span>shares of common stock for gross cash proceeds of $<span id="xdx_901_eus-gaap--ProceedsFromIssuanceInitialPublicOffering_c20201001__20210430__us-gaap--SubsidiarySaleOfStockAxis__us-gaap--IPOMember_pp0p0" title="Proceeds from issuance of stock">14,400,000</span> and received net proceeds of $<span id="xdx_909_eus-gaap--ProceedsFromIssuanceOfCommonStock_c20201001__20210430__us-gaap--SubsidiarySaleOfStockAxis__us-gaap--IPOMember_pp0p0" title="Proceeds from Issuance of Common Stock">13,514,200</span> after costs of $<span id="xdx_902_eus-gaap--PaymentsOfStockIssuanceCosts_pp0p0_c20201001__20210430__us-gaap--SubsidiarySaleOfStockAxis__us-gaap--IPOMember_zB0LzV7qpRqc">885,800</span> which were recorded in shareholders’ equity. The Company also issued <span id="xdx_90B_ecustom--WarrantsIssued_c20201001__20210430__us-gaap--SubsidiarySaleOfStockAxis__us-gaap--IPOMember__srt--CounterpartyNameAxis__custom--UnderwriterMember_zFXsoeOKZlQ5">168,000</span> common stock warrants with a <span id="xdx_905_eus-gaap--WarrantsAndRightsOutstandingTerm_iI_dtY_c20210430__us-gaap--SubsidiarySaleOfStockAxis__us-gaap--IPOMember__srt--CounterpartyNameAxis__custom--UnderwriterMember_zD2qIVJTBzT4" style="display: none">5</span> five-year term and exercise price of $<span id="xdx_905_eus-gaap--ClassOfWarrantOrRightExercisePriceOfWarrantsOrRights1_iI_c20210430__us-gaap--SubsidiarySaleOfStockAxis__us-gaap--IPOMember__srt--CounterpartyNameAxis__custom--UnderwriterMember_zOn9Vi4NdG7b">7.20</span> to the underwriter. These warrants have an estimated fair value of $<span id="xdx_907_ecustom--WarrantFairValue_iI_c20210430__us-gaap--SubsidiarySaleOfStockAxis__us-gaap--IPOMember__srt--CounterpartyNameAxis__custom--UnderwriterMember_z6WirKL2cIV7">5,474,076</span>.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>2020 Stock Plan</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In December 2020, the Company adopted the Esports Technologies, 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.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">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.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The number of shares of the common stock that may be issued under the 2020 Plan is <span id="xdx_90C_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardNumberOfSharesAuthorized_iI_c20210630__us-gaap--PlanNameAxis__custom--Plan2020Member_zEVa9qN0lFVb" title="Stock authorized under plan">4,000,000</span>. As of June 30, 2021, the Company had awarded a total <span id="xdx_905_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriodGross_c20201001__20210630__us-gaap--PlanNameAxis__custom--Plan2020Member_zja8Nnm4QcFe" title="Stock granted under plan">3,462,598</span> shares under the 2020 Plan, with <span id="xdx_904_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardNumberOfSharesAvailableForGrant_c20210630__us-gaap--PlanNameAxis__custom--Plan2020Member_pdd" title="Shares remaining under plan">537,402</span> remaining under the 2020 Plan.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Common Stock Awards</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">During the nine months ended June 30, 2021, the Company agreed to award a total of restricted stock units that convert into common stock to various employees, consultants and officers under the 2020 Plan. Of the restricted stock unit awarded, 755,250 will vest annually over a period of one to four years, 300,000 will vest upon the completion of various performance goals related to the operations of the Company, and 200,000 shares of common stock underlying awards made to the Company’s CEO will vest equally upon reaching trailing twelve months revenue of $10 million and $20 million. The Company estimated the fair value of the awards granted prior to the IPO, at $2 per share based on recent sales of common stock. Awards granted after the IPO, the closing price of the Company’s stock on the grant date is used to determine the fair value.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In November 2020, the Company entered into four consulting agreements under which the Company issued a total of <span id="xdx_90B_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsGrantsInPeriod_c20201001__20201130__srt--CounterpartyNameAxis__custom--FourConsultingAgreementsMember__us-gaap--StatementClassOfStockAxis__us-gaap--CommonStockMember_pdd" title="Stock awards granted">683,334</span> shares of common stock, which vest equally over terms ranging from three to twelve months.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">During the three and nine months ended June 30, 2021, the Company recognized a total of $<span id="xdx_907_eus-gaap--ShareBasedCompensation_c20210401__20210630__us-gaap--AwardTypeAxis__custom--CommonStockAwardsMember_zOtHPPxWV0x4">501,716</span> and $<span id="xdx_904_eus-gaap--ShareBasedCompensation_c20201001__20210630__us-gaap--AwardTypeAxis__custom--CommonStockAwardsMember_zaciOL9fF02l">1,940,249</span> of stock-based compensation expense related to common stock awards and expects to recognize additional compensation cost of $<span id="xdx_90F_eus-gaap--EmployeeServiceShareBasedCompensationNonvestedAwardsTotalCompensationCostNotYetRecognizedStockOptions_iI_c20210630__us-gaap--AwardTypeAxis__custom--CommonStockAwardsMember_zzuE6DRc71f2">5,258,844</span> upon vesting of all awards.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Warrants</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">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 year ended September 30, 2020. The following table summarizes warrant activity during the three and nine months ended June 30, 2021: </p> <table cellpadding="0" cellspacing="0" id="xdx_895_eus-gaap--ScheduleOfStockholdersEquityNoteWarrantsOrRightsTextBlock_z1wgPlxLYyRg" style="font: 10pt Times New Roman, Times, Serif; background-color: White; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - STOCKHOLDERS' EQUITY (Details - Warrant activity)"> <tr style="vertical-align: bottom; background-color: White"> <td style="display: none; text-align: left"><span id="xdx_8BE_zpYswQbBHeMj">Schedule of warrant activity</span></td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1pt; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: left"> </td><td colspan="9" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><span style="font: 10pt Times New Roman, Times, Serif"><b>Common Stock Warrants</b></span></td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1pt; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"> </td><td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><span style="font: 10pt Times New Roman, Times, Serif"><b>Shares</b></span></td><td style="padding-bottom: 1pt; font-weight: bold; text-align: center"> </td><td style="text-align: center; font-weight: bold; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"> </td><td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><span style="font: 10pt Times New Roman, Times, Serif"><b>Weighted<br/> Average<br/> Exercise<br/> Price</b></span></td><td style="padding-bottom: 1pt; font-weight: bold; text-align: center"> </td><td style="text-align: center; font-weight: bold; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"> </td><td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><span style="font: 10pt Times New Roman, Times, Serif"><b>Weighted<br/> average<br/> Remaining<br/> Life in years</b></span></td><td style="padding-bottom: 1pt; font-weight: bold; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="width: 55%; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Outstanding at September 30, 2020</span></td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td id="xdx_980_eus-gaap--ClassOfWarrantOrRightOutstanding_iS_c20201001__20210630__us-gaap--AwardTypeAxis__custom--WarrantsMember_zf5B3Nmv7QQb" style="width: 11%; text-align: right" title="Number of Warrants Outstanding, Beginning">2,015,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_987_eus-gaap--ClassOfWarrantOrRightExercisePriceOfWarrantsOrRights1_iS_c20201001__20210630__us-gaap--AwardTypeAxis__custom--WarrantsMember_zq4ujt1p4W3j" style="width: 11%; text-align: right" title="Weighted Average Exercise Price Outstanding, Beginning">0.30</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 11%; text-align: right"><span id="xdx_90C_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsOutstandingWeightedAverageRemainingContractualTerms1_dtY_c20210101__20210630__us-gaap--AwardTypeAxis__custom--WarrantsMember_zBVcm7hHiNCe" title="Weighted Average Remaining Life, beginning">4.24</span></td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Granted</span></td><td> </td> <td style="text-align: left"> </td><td id="xdx_987_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsGrantsInPeriod_c20201001__20210630__us-gaap--AwardTypeAxis__custom--WarrantsMember_pdd" style="text-align: right" title="Number of Warrants Granted">386,541</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_98E_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsGrantsInPeriodWeightedAverageGrantDateFairValue_c20201001__20210630__us-gaap--AwardTypeAxis__custom--WarrantsMember_pdd" style="text-align: right" title="Weighted Average Exercise Price Granted">3.63</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><span id="xdx_907_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsOutstandingWeightedAverageRemainingContractualTermsGranted_dtY_c20201001__20210630__us-gaap--AwardTypeAxis__custom--WarrantsMember_z7AlFQJpXTUf" title="Weighted Average Remaining Life, granted">4.58</span></td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Cancelled</span></td><td> </td> <td style="text-align: left"> </td><td id="xdx_98D_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardNonOptionEquityInstrumentsForfeitures_d0_c20201001__20210630__us-gaap--AwardTypeAxis__custom--WarrantsMember_zH9XkwDW1xDb" style="text-align: right" title="Number of Warrants Cancelled">–</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_988_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsForfeituresWeightedAverageGrantDateFairValue_c20201001__20210630__us-gaap--AwardTypeAxis__custom--WarrantsMember_zFDVqQFq34pb" style="text-align: right" title="Weighted Average Exercise Price Cancelled"><span style="-sec-ix-hidden: xdx2ixbrl0733">–</span></td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Expired</span></td><td> </td> <td style="text-align: left"> </td><td id="xdx_988_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardNonOptionEquityInstrumentsExpirations_d0_c20201001__20210630__us-gaap--AwardTypeAxis__custom--WarrantsMember_zzUOWOsHo5u3" style="text-align: right" title="Number of Warrants Expired">–</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_988_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsExpiredWeightedAverageGrantDateFairValue_c20201001__20210630__us-gaap--AwardTypeAxis__custom--WarrantsMember_zqycv0psdEW8" style="text-align: right" title="Weighted Average Exercise Price Expired"><span style="-sec-ix-hidden: xdx2ixbrl0737">–</span></td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-bottom: 1pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Exercised</span></td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_98B_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardNonOptionEquityInstrumentsExercised_iN_di_c20201001__20210630__us-gaap--AwardTypeAxis__custom--WarrantsMember_zh43QiaXdLLe" style="border-bottom: Black 1pt solid; text-align: right" title="Number of Warrants Exercised">(66,000</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_986_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsExercisedWeightedAverageGrantDateFairValue_c20201001__20210630__us-gaap--AwardTypeAxis__custom--WarrantsMember_zshcgrN7kMsk" style="border-bottom: Black 1pt solid; text-align: right" title="Weighted Average Exercise Price Exercised">(2.00</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right"><span id="xdx_902_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsOutstandingWeightedAverageRemainingContractualTermsExercised_dtY_c20201001__20210630__us-gaap--AwardTypeAxis__custom--WarrantsMember_zetf1ETpTcW1" title="Weighted Average Remaining Life Exercised">4.33</span></td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.5pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Outstanding at June 30, 2021</span></td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td id="xdx_98E_eus-gaap--ClassOfWarrantOrRightOutstanding_iE_c20201001__20210630__us-gaap--AwardTypeAxis__custom--WarrantsMember_zbQEMmnvgkT6" style="border-bottom: Black 2.5pt double; text-align: right" title="Number of Warrants Outstanding, Ending">2,335,541</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_98D_eus-gaap--ClassOfWarrantOrRightExercisePriceOfWarrantsOrRights1_iE_c20201001__20210630__us-gaap--AwardTypeAxis__custom--WarrantsMember_zukIBqU4XN34" style="border-bottom: Black 2.5pt double; text-align: right" title="Weighted Average Exercise Price Outstanding, Ending">0.89</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right"><span id="xdx_901_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsOutstandingWeightedAverageRemainingContractualTerms_dtY_c20201001__20210630__us-gaap--AwardTypeAxis__custom--WarrantsMember_znsZ1gHicf2l" title="Weighted Average Remaining Life, ending">4.29</span></td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-bottom: 2.5pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Exercisable at June 30, 2021</span></td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td id="xdx_986_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardOtherThanOptionsExercisableNumber_c20210630__us-gaap--AwardTypeAxis__custom--WarrantsMember_pdd" style="border-bottom: Black 2.5pt double; text-align: right" title="Number of Warrants Exercisable, Ending">2,335,541</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_983_ecustom--WeightedAverageExercisePriceExercisableWarrants_c20210630__us-gaap--AwardTypeAxis__custom--WarrantsMember_pdd" style="border-bottom: Black 2.5pt double; text-align: right" title="Weighted Average Exercise Price Exercisable">0.89</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right"><span id="xdx_90C_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsOutstandingWeightedAverageRemainingContractualTermsExercisable_dtY_c20201001__20210630__us-gaap--AwardTypeAxis__custom--WarrantsMember_z9gYSWUzV2ej" title="Weighted Average Remaining Life, exercisable">4.29</span></td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> <p id="xdx_8A7_zfkDE7tXmsK9" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">The outstanding and exercisable common stock warrants had an estimated intrinsic value of $<span id="xdx_902_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardEquityInstrumentsOtherThanOptionsAggregateIntrinsicValueOutstanding_iI_c20210630__us-gaap--AwardTypeAxis__custom--CommonStockWarrantsMember_zFx9iTFATz22">47,110,395</span>. The Company estimated the fair value of the warrants using a Black-Scholes option pricing model and the following assumptions: 1) stock price of $2 to $3 per share; 2) dividend yield of 0%; 3) risk-free rate of between 0.18% and 0.81%; 4) expected term of between 2.5 and 5 years; 5) an exercise price of $0.25, $2 $3 or $7.20 and 6) expected volatility of between 84.1% and 99.0% based on a peer group of public companies. The warrants granted to brokers in connection with sales of common stock during the nine months ended June 30, 2021, had an estimated fair value of $<span id="xdx_901_ecustom--WarrantFairValue_iI_c20210630__us-gaap--AwardTypeAxis__custom--CommonStockWarrantsMember__srt--CounterpartyNameAxis__custom--BrokersMember_zkgsVP9F8rO9">5,474,076</span> which was reflected as a cost of capital, warrants granted to consultants for services had a fair value of $<span id="xdx_90D_ecustom--WarrantFairValue_iI_c20210630__us-gaap--AwardTypeAxis__custom--CommonStockWarrantsMember__srt--CounterpartyNameAxis__custom--ConsultantsMember_zUUaq8lPzzG9">8,819</span>, and the warrants granted in connection with the asset purchase agreement had an estimated fair value of $<span id="xdx_90C_ecustom--WarrantFairValue_iI_c20210630__us-gaap--AwardTypeAxis__custom--CommonStockWarrantsMember__us-gaap--TransactionTypeAxis__custom--AssetPurchaseAgreementMember_zPFtVO0yWtgf">57,252</span>.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Options</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">During the three months ended June 30, 2021, the Company entered into various agreements with employees and consultants whereby the Company agreed to award a total of <span id="xdx_90C_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriod_c20210401__20210630__us-gaap--AwardTypeAxis__custom--StockOptionsMember__us-gaap--PlanNameAxis__custom--Plan2020Member_zpSw0moK6cj6" title="Options granted">96,000</span> common stock options under the 2020 Plan. These awards generally vest over <span id="xdx_90A_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardAwardVestingPeriod1_dtY_c20210401__20210630_zOnZ3kS9bFH2" title="Options vesting Period">4 </span>years.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">During the three months ended March 31, 2021, the Company entered into various agreements with employees, consultants and directors whereby the Company agreed to award a total of <span id="xdx_909_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriod_c20210101__20210331__us-gaap--AwardTypeAxis__custom--StockOptionsMember_zhAyZL7LMesh" title="Options granted">402,000</span> common stock options, including <span id="xdx_903_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriod_c20210101__20210331__us-gaap--AwardTypeAxis__custom--StockOptionsMember__srt--CounterpartyNameAxis__custom--TwoBoardMembersMember_zpdU6rT2lWof" title="Options granted">150,000</span> to two members of the Board of Directors under the 2020 Plan. These awards vest over a period of six months to four years, with <span id="xdx_90E_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriod_c20210101__20210331__us-gaap--AwardTypeAxis__custom--StockOptionsMember__srt--CounterpartyNameAxis__custom--ConsultantMember_zwbvE8YMFZ8j" title="Options granted">20,000</span> options issued to a consultant vesting immediately.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">During the three months ended December 31, 2020, the Company entered into various agreements with employees and consultants whereby the Company agreed to award a total of <span id="xdx_901_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriod_c20201001__20201231__us-gaap--AwardTypeAxis__custom--StockOptionsMember_pdd">2,014,348 </span>common stock options, including <span id="xdx_900_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriod_c20201001__20201231__us-gaap--AwardTypeAxis__custom--StockOptionsMember__srt--CounterpartyNameAxis__custom--ConsultantsMember_pdd">90,000 </span>to consultants and <span id="xdx_908_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriod_c20201001__20201231__us-gaap--AwardTypeAxis__custom--StockOptionsMember__srt--CounterpartyNameAxis__custom--BoardMemberMember_pdd">100,000 </span>to a member of the Board of Directors under the 2020 Plan. Of the total, <span id="xdx_90D_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsVestedAndExpectedToVestExercisableNumber_iI_c20201231__us-gaap--AwardTypeAxis__custom--StockOptionsMember__us-gaap--VestingAxis__custom--OneToFourYearsMember_zccNA7lnjvPg">1,390,000 </span>vest equally over periods of between one and four years, <span id="xdx_901_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsVestedAndExpectedToVestExercisableNumber_iI_c20201231__us-gaap--AwardTypeAxis__custom--StockOptionsMember__us-gaap--VestingAxis__custom--CompletionOfIpoMember_zNAr19qz4vo6">70,313 </span>vested upon completion of the Company’s IPO, <span id="xdx_909_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsVestedAndExpectedToVestExercisableNumber_iI_c20201231__us-gaap--AwardTypeAxis__custom--StockOptionsMember__us-gaap--VestingAxis__custom--CooGoalsMember_zqcNaO8qSO67">200,000 </span>to the Company’s Chief Operating Officer would have vested in the event that the Company’s IPO raised gross proceeds of at least $18 million (as the IPO proceeds were less than $18 million, these shares did not vest), and <span id="xdx_901_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsVestedAndExpectedToVestExercisableNumber_iI_c20201231__us-gaap--AwardTypeAxis__custom--StockOptionsMember__us-gaap--VestingAxis__custom--HiringOfCfoMember_zosmgbMEhKA1">57,250 </span>to the Company’s prior interim CFO vested upon the hiring of the Company’s full time CFO.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The following table summarizes option activity during the nine months ended June 30, 2021:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <table cellpadding="0" cellspacing="0" id="xdx_89A_eus-gaap--ScheduleOfShareBasedCompensationStockOptionsActivityTableTextBlock_zoUubvikQJ1e" style="font: 10pt Times New Roman, Times, Serif; background-color: White; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - STOCKHOLDERS' EQUITY (Details - Option Activity)"> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"><span id="xdx_8BF_zhwKex5r4O0g" style="display: none">Schedule of option activity</span></td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1pt; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: left"> </td><td colspan="9" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><span style="font: 10pt Times New Roman, Times, Serif"><b>Common Stock Options</b></span></td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1pt; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"> </td><td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><span style="font: 10pt Times New Roman, Times, Serif"><b>Shares</b></span></td><td style="padding-bottom: 1pt; font-weight: bold; text-align: center"> </td><td style="text-align: center; font-weight: bold; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"> </td><td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><span style="font: 10pt Times New Roman, Times, Serif"><b>Weighted<br/> Average<br/> Exercise<br/> Price</b></span></td><td style="padding-bottom: 1pt; font-weight: bold; text-align: center"> </td><td style="text-align: center; font-weight: bold; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"> </td><td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><span style="font: 10pt Times New Roman, Times, Serif"><b>Weighted<br/> average<br/> Remaining<br/> Life in years</b></span></td><td style="padding-bottom: 1pt; font-weight: bold; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Outstanding at September 30, 2020</span></td><td> </td> <td style="text-align: left"> </td><td id="xdx_98A_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber_iS_d0_c20201001__20210630__us-gaap--AwardTypeAxis__custom--StockOptionsMember_zN3SAcQx5PYc" style="text-align: right" title="Number of Options Outstanding, Beginning">–</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td id="xdx_988_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingWeightedAverageExercisePrice_iS_c20201001__20210630__us-gaap--AwardTypeAxis__custom--StockOptionsMember_zLFrCUhLizgh" style="text-align: right" title="Weighted Average Exercise Price Outstanding, Beginning"><span style="-sec-ix-hidden: xdx2ixbrl0786">–</span></td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="width: 55%; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Granted</span></td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td id="xdx_98F_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriodGross_c20201001__20210630__us-gaap--AwardTypeAxis__custom--StockOptionsMember_pdd" style="width: 11%; text-align: right" title="Number of Options Granted">2,512,348</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td id="xdx_980_eus-gaap--ShareBasedCompensationArrangementsByShareBasedPaymentAwardOptionsGrantsInPeriodWeightedAverageExercisePrice_c20201001__20210630__us-gaap--AwardTypeAxis__custom--StockOptionsMember_pdd" style="width: 11%; text-align: right" title="Weighted Average Exercise Price Granted">1.63</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 11%; text-align: right"><span id="xdx_905_ecustom--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsGrantedWeightedAverageRemainingContractualTerm_dtY_c20201001__20210630__us-gaap--AwardTypeAxis__custom--StockOptionsMember_zmK6KmhWt25k" title="Weighted Average Remaining Contractual Term Granted">9.09</span></td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Cancelled</span></td><td> </td> <td style="text-align: left"> </td><td id="xdx_98F_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsForfeituresInPeriod_iN_di_c20201001__20210630__us-gaap--AwardTypeAxis__custom--StockOptionsMember_zOfjkKl3sH1j" style="text-align: right" title="Number of Options Forfeited">(220,000</td><td style="text-align: left">)</td><td> </td> <td style="text-align: left"> </td><td id="xdx_985_eus-gaap--ShareBasedCompensationArrangementsByShareBasedPaymentAwardOptionsForfeituresInPeriodWeightedAverageExercisePrice_c20201001__20210630__us-gaap--AwardTypeAxis__custom--StockOptionsMember_pdd" style="text-align: right" title="Weighted Average Exercise Price Forfeited">0.50</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><span id="xdx_90B_ecustom--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsForfeitedWeightedAverageRemainingContractualTerm_dtY_c20201001__20210630__us-gaap--AwardTypeAxis__custom--StockOptionsMember_ziqm3CMl0l4c" title="Weighted Average Remaining Contractual Term Cancellations and Forfeitures">9.81</span></td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Expired</span></td><td> </td> <td style="text-align: left"> </td><td id="xdx_987_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsExpirationsInPeriod_d0_c20201001__20210630__us-gaap--AwardTypeAxis__custom--StockOptionsMember_zUAQsqwYGLak" style="text-align: right" title="Number of Options Expired">–</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_98C_eus-gaap--ShareBasedCompensationArrangementsByShareBasedPaymentAwardOptionsExpirationsInPeriodWeightedAverageExercisePrice_c20201001__20210630__us-gaap--AwardTypeAxis__custom--StockOptionsMember_pdd" style="text-align: right" title="Weighted Average Exercise Price Expired"><span style="-sec-ix-hidden: xdx2ixbrl0802">–</span></td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-bottom: 1pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Exercised</span></td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_98E_eus-gaap--StockIssuedDuringPeriodSharesStockOptionsExercised_d0_c20201001__20210630__us-gaap--AwardTypeAxis__custom--StockOptionsMember_zuwmyBwummD5" style="border-bottom: Black 1pt solid; text-align: right" title="Number of Options Exercised">–</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_987_eus-gaap--ShareBasedCompensationArrangementsByShareBasedPaymentAwardOptionsExercisesInPeriodWeightedAverageExercisePrice_c20201001__20210630__us-gaap--AwardTypeAxis__custom--StockOptionsMember_pdd" style="border-bottom: Black 1pt solid; text-align: right" title="Weighted Average Exercise Price Exercised"><span style="-sec-ix-hidden: xdx2ixbrl0806">–</span></td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">–</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.5pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Outstanding at June 30, 2021</span></td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td id="xdx_98F_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber_iE_c20201001__20210630__us-gaap--AwardTypeAxis__custom--StockOptionsMember_zVOMhkQrEEmi" style="border-bottom: Black 2.5pt double; text-align: right" title="Number of Options Outstanding, Ending">2,292,348</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_983_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingWeightedAverageExercisePrice_iE_c20201001__20210630__us-gaap--AwardTypeAxis__custom--StockOptionsMember_zmaYhp27igu8" style="border-bottom: Black 2.5pt double; text-align: right" title="Weighted Average Exercise Price Outstanding, Ending">1.73</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right"><span id="xdx_900_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsOutstandingWeightedAverageRemainingContractualTerm2_dtY_c20201001__20210630__us-gaap--AwardTypeAxis__custom--StockOptionsMember_z0NLj6zeaaEa" title="Weighted Average Remaining Contractual Term Outstanding">8.61</span></td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-bottom: 2.5pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Exercisable at June 30, 2021</span></td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td id="xdx_98D_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsExercisableNumber_c20210630__us-gaap--AwardTypeAxis__custom--StockOptionsMember_pdd" style="border-bottom: Black 2.5pt double; text-align: right" title="Number of Options Exercisable, Ending">144,348</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_986_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsExercisableWeightedAverageExercisePrice_c20210630__us-gaap--AwardTypeAxis__custom--StockOptionsMember_pdd" style="border-bottom: Black 2.5pt double; text-align: right" title="Weighted Average Exercise Price Exercisable, Ending">0.96</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right"><span id="xdx_907_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsExercisableWeightedAverageRemainingContractualTerm1_dtY_c20201001__20210630__us-gaap--AwardTypeAxis__custom--StockOptionsMember_z26582RezMCb" title="Weighted Average Remaining Contractual Term Exercisable">8.71</span></td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> <p id="xdx_8AD_zQzNuArN3Fab" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">During the three and nine months ended June 30, 2021, the Company recognized stock-based compensation expense of $<span id="xdx_906_eus-gaap--ShareBasedCompensation_c20210401__20210630__us-gaap--AwardTypeAxis__custom--StockOptionsMember_pp0p0" title="Share-based compensation">834,971</span> and $<span id="xdx_902_eus-gaap--ShareBasedCompensation_c20201001__20210630__us-gaap--AwardTypeAxis__custom--StockOptionsMember_pp0p0" title="Share-based compensation">2,856,998</span> related to common stock options awarded. The exercisable common stock options had an intrinsic value as of June 30, <span>2021, of $<span id="xdx_902_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsExercisableIntrinsicValue1_iI_c20210630__us-gaap--AwardTypeAxis__custom--StockOptionsMember_zv8VgZsVJtz7">1,552,573</span>. The</span> Company expects to recognize an additional $<span id="xdx_909_eus-gaap--EmployeeServiceShareBasedCompensationNonvestedAwardsTotalCompensationCostNotYetRecognizedStockOptions_iI_c20210630__us-gaap--AwardTypeAxis__custom--StockOptionsMember_zLCxolP47Bh7">4,701,717</span> of compensation cost related to stock options expected to vest.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company estimated the fair value of the stock options awarded using a Black-Scholes option pricing model and the following assumptions: 1) stock price of $2 to $3 per share; 2) dividend yield of 0%; 3) risk-free rate of between 0.22% and 0.90%; 4) expected term of between 3.5 and 6.25 years; 5) an exercise price between $0.25 and $22.89 and 6) expected volatility of between 82.3% and 95.33% based on a peer group of public companies.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> 4000000 2000000 351929 173625 2.00 P5Y 228500 250014 750042 30314 8750 3 P5Y 228500 4166 P5Y 3 37500 2400000 14400000 13514200 885800 168000 P5Y 7.20 5474076 4000000 3462598 537402 683334 501716 1940249 5258844 <table cellpadding="0" cellspacing="0" id="xdx_895_eus-gaap--ScheduleOfStockholdersEquityNoteWarrantsOrRightsTextBlock_z1wgPlxLYyRg" style="font: 10pt Times New Roman, Times, Serif; background-color: White; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - STOCKHOLDERS' EQUITY (Details - Warrant activity)"> <tr style="vertical-align: bottom; background-color: White"> <td style="display: none; text-align: left"><span id="xdx_8BE_zpYswQbBHeMj">Schedule of warrant activity</span></td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1pt; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: left"> </td><td colspan="9" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><span style="font: 10pt Times New Roman, Times, Serif"><b>Common Stock Warrants</b></span></td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1pt; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"> </td><td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><span style="font: 10pt Times New Roman, Times, Serif"><b>Shares</b></span></td><td style="padding-bottom: 1pt; font-weight: bold; text-align: center"> </td><td style="text-align: center; font-weight: bold; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"> </td><td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><span style="font: 10pt Times New Roman, Times, Serif"><b>Weighted<br/> Average<br/> Exercise<br/> Price</b></span></td><td style="padding-bottom: 1pt; font-weight: bold; text-align: center"> </td><td style="text-align: center; font-weight: bold; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"> </td><td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><span style="font: 10pt Times New Roman, Times, Serif"><b>Weighted<br/> average<br/> Remaining<br/> Life in years</b></span></td><td style="padding-bottom: 1pt; font-weight: bold; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="width: 55%; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Outstanding at September 30, 2020</span></td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td id="xdx_980_eus-gaap--ClassOfWarrantOrRightOutstanding_iS_c20201001__20210630__us-gaap--AwardTypeAxis__custom--WarrantsMember_zf5B3Nmv7QQb" style="width: 11%; text-align: right" title="Number of Warrants Outstanding, Beginning">2,015,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_987_eus-gaap--ClassOfWarrantOrRightExercisePriceOfWarrantsOrRights1_iS_c20201001__20210630__us-gaap--AwardTypeAxis__custom--WarrantsMember_zq4ujt1p4W3j" style="width: 11%; text-align: right" title="Weighted Average Exercise Price Outstanding, Beginning">0.30</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 11%; text-align: right"><span id="xdx_90C_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsOutstandingWeightedAverageRemainingContractualTerms1_dtY_c20210101__20210630__us-gaap--AwardTypeAxis__custom--WarrantsMember_zBVcm7hHiNCe" title="Weighted Average Remaining Life, beginning">4.24</span></td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Granted</span></td><td> </td> <td style="text-align: left"> </td><td id="xdx_987_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsGrantsInPeriod_c20201001__20210630__us-gaap--AwardTypeAxis__custom--WarrantsMember_pdd" style="text-align: right" title="Number of Warrants Granted">386,541</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_98E_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsGrantsInPeriodWeightedAverageGrantDateFairValue_c20201001__20210630__us-gaap--AwardTypeAxis__custom--WarrantsMember_pdd" style="text-align: right" title="Weighted Average Exercise Price Granted">3.63</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><span id="xdx_907_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsOutstandingWeightedAverageRemainingContractualTermsGranted_dtY_c20201001__20210630__us-gaap--AwardTypeAxis__custom--WarrantsMember_z7AlFQJpXTUf" title="Weighted Average Remaining Life, granted">4.58</span></td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Cancelled</span></td><td> </td> <td style="text-align: left"> </td><td id="xdx_98D_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardNonOptionEquityInstrumentsForfeitures_d0_c20201001__20210630__us-gaap--AwardTypeAxis__custom--WarrantsMember_zH9XkwDW1xDb" style="text-align: right" title="Number of Warrants Cancelled">–</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_988_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsForfeituresWeightedAverageGrantDateFairValue_c20201001__20210630__us-gaap--AwardTypeAxis__custom--WarrantsMember_zFDVqQFq34pb" style="text-align: right" title="Weighted Average Exercise Price Cancelled"><span style="-sec-ix-hidden: xdx2ixbrl0733">–</span></td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Expired</span></td><td> </td> <td style="text-align: left"> </td><td id="xdx_988_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardNonOptionEquityInstrumentsExpirations_d0_c20201001__20210630__us-gaap--AwardTypeAxis__custom--WarrantsMember_zzUOWOsHo5u3" style="text-align: right" title="Number of Warrants Expired">–</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_988_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsExpiredWeightedAverageGrantDateFairValue_c20201001__20210630__us-gaap--AwardTypeAxis__custom--WarrantsMember_zqycv0psdEW8" style="text-align: right" title="Weighted Average Exercise Price Expired"><span style="-sec-ix-hidden: xdx2ixbrl0737">–</span></td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-bottom: 1pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Exercised</span></td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_98B_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardNonOptionEquityInstrumentsExercised_iN_di_c20201001__20210630__us-gaap--AwardTypeAxis__custom--WarrantsMember_zh43QiaXdLLe" style="border-bottom: Black 1pt solid; text-align: right" title="Number of Warrants Exercised">(66,000</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_986_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsExercisedWeightedAverageGrantDateFairValue_c20201001__20210630__us-gaap--AwardTypeAxis__custom--WarrantsMember_zshcgrN7kMsk" style="border-bottom: Black 1pt solid; text-align: right" title="Weighted Average Exercise Price Exercised">(2.00</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right"><span id="xdx_902_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsOutstandingWeightedAverageRemainingContractualTermsExercised_dtY_c20201001__20210630__us-gaap--AwardTypeAxis__custom--WarrantsMember_zetf1ETpTcW1" title="Weighted Average Remaining Life Exercised">4.33</span></td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.5pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Outstanding at June 30, 2021</span></td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td id="xdx_98E_eus-gaap--ClassOfWarrantOrRightOutstanding_iE_c20201001__20210630__us-gaap--AwardTypeAxis__custom--WarrantsMember_zbQEMmnvgkT6" style="border-bottom: Black 2.5pt double; text-align: right" title="Number of Warrants Outstanding, Ending">2,335,541</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_98D_eus-gaap--ClassOfWarrantOrRightExercisePriceOfWarrantsOrRights1_iE_c20201001__20210630__us-gaap--AwardTypeAxis__custom--WarrantsMember_zukIBqU4XN34" style="border-bottom: Black 2.5pt double; text-align: right" title="Weighted Average Exercise Price Outstanding, Ending">0.89</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right"><span id="xdx_901_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsOutstandingWeightedAverageRemainingContractualTerms_dtY_c20201001__20210630__us-gaap--AwardTypeAxis__custom--WarrantsMember_znsZ1gHicf2l" title="Weighted Average Remaining Life, ending">4.29</span></td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-bottom: 2.5pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Exercisable at June 30, 2021</span></td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td id="xdx_986_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardOtherThanOptionsExercisableNumber_c20210630__us-gaap--AwardTypeAxis__custom--WarrantsMember_pdd" style="border-bottom: Black 2.5pt double; text-align: right" title="Number of Warrants Exercisable, Ending">2,335,541</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_983_ecustom--WeightedAverageExercisePriceExercisableWarrants_c20210630__us-gaap--AwardTypeAxis__custom--WarrantsMember_pdd" style="border-bottom: Black 2.5pt double; text-align: right" title="Weighted Average Exercise Price Exercisable">0.89</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right"><span id="xdx_90C_ecustom--ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsOutstandingWeightedAverageRemainingContractualTermsExercisable_dtY_c20201001__20210630__us-gaap--AwardTypeAxis__custom--WarrantsMember_z9gYSWUzV2ej" title="Weighted Average Remaining Life, exercisable">4.29</span></td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> 2015000 0.30 P4Y2M26D 386541 3.63 P4Y6M29D 0 0 66000 -2.00 P4Y3M29D 2335541 0.89 P4Y3M14D 2335541 0.89 P4Y3M14D 47110395 5474076 8819 57252 96000 P4Y 402000 150000 20000 2014348 90000 100000 1390000 70313 200000 57250 <table cellpadding="0" cellspacing="0" id="xdx_89A_eus-gaap--ScheduleOfShareBasedCompensationStockOptionsActivityTableTextBlock_zoUubvikQJ1e" style="font: 10pt Times New Roman, Times, Serif; background-color: White; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - STOCKHOLDERS' EQUITY (Details - Option Activity)"> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"><span id="xdx_8BF_zhwKex5r4O0g" style="display: none">Schedule of option activity</span></td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1pt; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: left"> </td><td colspan="9" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><span style="font: 10pt Times New Roman, Times, Serif"><b>Common Stock Options</b></span></td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1pt; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"> </td><td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><span style="font: 10pt Times New Roman, Times, Serif"><b>Shares</b></span></td><td style="padding-bottom: 1pt; font-weight: bold; text-align: center"> </td><td style="text-align: center; font-weight: bold; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"> </td><td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><span style="font: 10pt Times New Roman, Times, Serif"><b>Weighted<br/> Average<br/> Exercise<br/> Price</b></span></td><td style="padding-bottom: 1pt; font-weight: bold; text-align: center"> </td><td style="text-align: center; font-weight: bold; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"> </td><td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><span style="font: 10pt Times New Roman, Times, Serif"><b>Weighted<br/> average<br/> Remaining<br/> Life in years</b></span></td><td style="padding-bottom: 1pt; font-weight: bold; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Outstanding at September 30, 2020</span></td><td> </td> <td style="text-align: left"> </td><td id="xdx_98A_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber_iS_d0_c20201001__20210630__us-gaap--AwardTypeAxis__custom--StockOptionsMember_zN3SAcQx5PYc" style="text-align: right" title="Number of Options Outstanding, Beginning">–</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td id="xdx_988_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingWeightedAverageExercisePrice_iS_c20201001__20210630__us-gaap--AwardTypeAxis__custom--StockOptionsMember_zLFrCUhLizgh" style="text-align: right" title="Weighted Average Exercise Price Outstanding, Beginning"><span style="-sec-ix-hidden: xdx2ixbrl0786">–</span></td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="width: 55%; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Granted</span></td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td id="xdx_98F_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriodGross_c20201001__20210630__us-gaap--AwardTypeAxis__custom--StockOptionsMember_pdd" style="width: 11%; text-align: right" title="Number of Options Granted">2,512,348</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td id="xdx_980_eus-gaap--ShareBasedCompensationArrangementsByShareBasedPaymentAwardOptionsGrantsInPeriodWeightedAverageExercisePrice_c20201001__20210630__us-gaap--AwardTypeAxis__custom--StockOptionsMember_pdd" style="width: 11%; text-align: right" title="Weighted Average Exercise Price Granted">1.63</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 11%; text-align: right"><span id="xdx_905_ecustom--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsGrantedWeightedAverageRemainingContractualTerm_dtY_c20201001__20210630__us-gaap--AwardTypeAxis__custom--StockOptionsMember_zmK6KmhWt25k" title="Weighted Average Remaining Contractual Term Granted">9.09</span></td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Cancelled</span></td><td> </td> <td style="text-align: left"> </td><td id="xdx_98F_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsForfeituresInPeriod_iN_di_c20201001__20210630__us-gaap--AwardTypeAxis__custom--StockOptionsMember_zOfjkKl3sH1j" style="text-align: right" title="Number of Options Forfeited">(220,000</td><td style="text-align: left">)</td><td> </td> <td style="text-align: left"> </td><td id="xdx_985_eus-gaap--ShareBasedCompensationArrangementsByShareBasedPaymentAwardOptionsForfeituresInPeriodWeightedAverageExercisePrice_c20201001__20210630__us-gaap--AwardTypeAxis__custom--StockOptionsMember_pdd" style="text-align: right" title="Weighted Average Exercise Price Forfeited">0.50</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><span id="xdx_90B_ecustom--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsForfeitedWeightedAverageRemainingContractualTerm_dtY_c20201001__20210630__us-gaap--AwardTypeAxis__custom--StockOptionsMember_ziqm3CMl0l4c" title="Weighted Average Remaining Contractual Term Cancellations and Forfeitures">9.81</span></td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Expired</span></td><td> </td> <td style="text-align: left"> </td><td id="xdx_987_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsExpirationsInPeriod_d0_c20201001__20210630__us-gaap--AwardTypeAxis__custom--StockOptionsMember_zUAQsqwYGLak" style="text-align: right" title="Number of Options Expired">–</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_98C_eus-gaap--ShareBasedCompensationArrangementsByShareBasedPaymentAwardOptionsExpirationsInPeriodWeightedAverageExercisePrice_c20201001__20210630__us-gaap--AwardTypeAxis__custom--StockOptionsMember_pdd" style="text-align: right" title="Weighted Average Exercise Price Expired"><span style="-sec-ix-hidden: xdx2ixbrl0802">–</span></td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-bottom: 1pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Exercised</span></td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_98E_eus-gaap--StockIssuedDuringPeriodSharesStockOptionsExercised_d0_c20201001__20210630__us-gaap--AwardTypeAxis__custom--StockOptionsMember_zuwmyBwummD5" style="border-bottom: Black 1pt solid; text-align: right" title="Number of Options Exercised">–</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_987_eus-gaap--ShareBasedCompensationArrangementsByShareBasedPaymentAwardOptionsExercisesInPeriodWeightedAverageExercisePrice_c20201001__20210630__us-gaap--AwardTypeAxis__custom--StockOptionsMember_pdd" style="border-bottom: Black 1pt solid; text-align: right" title="Weighted Average Exercise Price Exercised"><span style="-sec-ix-hidden: xdx2ixbrl0806">–</span></td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">–</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.5pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Outstanding at June 30, 2021</span></td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td id="xdx_98F_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber_iE_c20201001__20210630__us-gaap--AwardTypeAxis__custom--StockOptionsMember_zVOMhkQrEEmi" style="border-bottom: Black 2.5pt double; text-align: right" title="Number of Options Outstanding, Ending">2,292,348</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_983_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingWeightedAverageExercisePrice_iE_c20201001__20210630__us-gaap--AwardTypeAxis__custom--StockOptionsMember_zmaYhp27igu8" style="border-bottom: Black 2.5pt double; text-align: right" title="Weighted Average Exercise Price Outstanding, Ending">1.73</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right"><span id="xdx_900_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsOutstandingWeightedAverageRemainingContractualTerm2_dtY_c20201001__20210630__us-gaap--AwardTypeAxis__custom--StockOptionsMember_z0NLj6zeaaEa" title="Weighted Average Remaining Contractual Term Outstanding">8.61</span></td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-bottom: 2.5pt; text-align: left"><span style="font: 10pt Times New Roman, Times, Serif">Exercisable at June 30, 2021</span></td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td id="xdx_98D_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsExercisableNumber_c20210630__us-gaap--AwardTypeAxis__custom--StockOptionsMember_pdd" style="border-bottom: Black 2.5pt double; text-align: right" title="Number of Options Exercisable, Ending">144,348</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_986_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsExercisableWeightedAverageExercisePrice_c20210630__us-gaap--AwardTypeAxis__custom--StockOptionsMember_pdd" style="border-bottom: Black 2.5pt double; text-align: right" title="Weighted Average Exercise Price Exercisable, Ending">0.96</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right"><span id="xdx_907_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsExercisableWeightedAverageRemainingContractualTerm1_dtY_c20201001__20210630__us-gaap--AwardTypeAxis__custom--StockOptionsMember_z26582RezMCb" title="Weighted Average Remaining Contractual Term Exercisable">8.71</span></td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> 0 2512348 1.63 P9Y1M2D 220000 0.50 P9Y9M21D 0 0 2292348 1.73 P8Y7M9D 144348 0.96 P8Y8M15D 834971 2856998 1552573 4701717 <p id="xdx_80E_eus-gaap--CommitmentsAndContingenciesDisclosureTextBlock_zuTDYyQtCdT2" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>NOTE 6 – <span id="xdx_828_zc0iZdQNhMcf">COMMITMENTS AND CONTINGENCIES</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On September 2, 2020, the Company entered into a financial advisor agreement with Boustead Securities LLC, the representative of the underwriters in the Company’s initial public offering, to provide services related to fundraising on the Company’s planned public listing. The Company agreed to pay the financial advisor a success fee of 4% of any gross proceeds from any debt financing, and a 7% success fee related to any equity or convertible debt financing, subject to customary approval by the regulatory authorities. In April 2021, the Company completed its IPO and issued 2,400,000 shares of common stock for gross cash proceeds of $14,400,000. The Company paid underwriting fees of $<span id="xdx_90D_eus-gaap--PaymentsOfStockIssuanceCosts_pp0p0_c20201001__20210430__us-gaap--SubsidiarySaleOfStockAxis__us-gaap--IPOMember__srt--CounterpartyNameAxis__custom--UnderwritersMember_zuVSC4rgsJal" title="Payment of stock issuance costs">885,800</span> and issued <span id="xdx_900_ecustom--WarrantsIssued_c20201001__20210430__us-gaap--SubsidiarySaleOfStockAxis__us-gaap--IPOMember__srt--CounterpartyNameAxis__custom--UnderwritersMember_z23gSTmdrq1c" title="Warrants issued">168,000</span> warrants to purchase shares of common stock at a price of $<span id="xdx_90C_eus-gaap--ClassOfWarrantOrRightExercisePriceOfWarrantsOrRights1_iI_c20210430__us-gaap--SubsidiarySaleOfStockAxis__us-gaap--IPOMember__srt--CounterpartyNameAxis__custom--UnderwritersMember_zhoCtHD4Ypni" title="Warrant exercise price">7.20</span> per share for a period of five <span id="xdx_90E_eus-gaap--WarrantsAndRightsOutstandingTerm_iI_dtY_c20210430__us-gaap--SubsidiarySaleOfStockAxis__us-gaap--IPOMember__srt--CounterpartyNameAxis__custom--UnderwritersMember_zCWuBEcJn6g4" title="Warrant term">5</span> years.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On September 26, 2020, the Company entered into a consulting agreement with a registered foreign broker dealer for fundraising services and paid 10% of any gross proceeds through capital raises from non-US investors introduced by the consultant, up to a maximum payment to the consultant of $200,000 and the consultant also received warrants to purchase shares of the Company’s common stock at an exercise price of $2.00 per share. These warrants were exercised in April 2021 and were converted into <span id="xdx_901_eus-gaap--StockIssuedDuringPeriodSharesConversionOfConvertibleSecurities_c20201001__20210430__us-gaap--TransactionTypeAxis__custom--ConsultingAgreementMember_zXechNV7ki7a" title="Warrants converted, shares issued">62,386</span> shares of the Company stock.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> 885800 168000 7.20 P5Y 62386 <p id="xdx_809_eus-gaap--EarningsPerShareTextBlock_zz1W6VZDQgV" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>NOTE 7 –<span id="xdx_82E_zgWMU2JP7bd8">LOSS PER COMMON SHARE</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">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. Common shares issuable under convertible debt, stock options and common stock warrants were excluded from the calculation of diluted net loss per share due to their antidilutive effect.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <table cellpadding="0" cellspacing="0" id="xdx_885_eus-gaap--ScheduleOfEarningsPerShareBasicAndDilutedTableTextBlock_zot3eRgEivs1" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - LOSS PER COMMON SHARE (Details)"> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt; text-align: left; padding-bottom: 1pt"><span id="xdx_8BC_z28KTVTrdYCb" style="display: none">Calculation of earnings per share</span></td><td style="padding-bottom: 1pt"> </td> <td style="text-align: left"> </td><td id="xdx_49E_20210401__20210630_zGNg3VuKWVA5" style="text-align: right"> </td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="text-align: left"> </td><td id="xdx_498_20200401__20200630_zETyYGaIkm1e" style="text-align: right"> </td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="text-align: left"> </td><td id="xdx_496_20201001__20210630_zFCfv0US5AZg" style="text-align: right"> </td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="text-align: left"> </td><td id="xdx_490_20191001__20200630_zeEgMOIzvOSj" style="text-align: right"> </td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold"> </td> <td colspan="6" style="font-weight: bold; text-align: center">Three Months Ended</td><td style="font-weight: bold"> </td><td style="font-weight: bold"> </td> <td colspan="6" style="font-weight: bold; text-align: center">Nine Months Ended</td><td style="font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">June 30, 2021</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">June 30, 2020</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">June 30, 2021</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">June 30, 2020</td><td style="padding-bottom: 1pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td><td> </td> <td colspan="2"> </td><td> </td><td> </td> <td colspan="2"> </td><td> </td><td> </td> <td colspan="2"> </td><td> </td></tr> <tr id="xdx_403_ecustom--NumeratorAbstract_iB" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td>Numerator</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_409_eus-gaap--NetIncomeLoss_i01_pp0p0" style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt; width: 40%; text-align: left; padding-bottom: 1pt">Net income (loss)</td><td style="width: 2%; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; width: 1%; text-align: left">$</td><td style="border-bottom: Black 1pt solid; width: 11%; text-align: right">(3,957,611</td><td style="width: 1%; padding-bottom: 1pt; text-align: left">)</td><td style="width: 2%; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; width: 1%; text-align: left">$</td><td style="border-bottom: Black 1pt solid; width: 11%; text-align: right">(27,654</td><td style="width: 1%; padding-bottom: 1pt; text-align: left">) </td><td style="width: 2%; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; width: 1%; text-align: left">$</td><td style="border-bottom: Black 1pt solid; width: 11%; text-align: right">(9,084,002</td><td style="width: 1%; padding-bottom: 1pt; text-align: left">) </td><td style="width: 2%; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; width: 1%; text-align: left">$</td><td style="border-bottom: Black 1pt solid; width: 11%; text-align: right">(46,009</td><td style="width: 1%; padding-bottom: 1pt; text-align: left">) </td></tr> <tr id="xdx_404_ecustom--DenominatorAbstract_i01B" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td>Denominator</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_406_eus-gaap--WeightedAverageNumberOfShareOutstandingBasicAndDiluted_i02_pdd" style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt; padding-bottom: 1pt">Basic and Diluted weighted average common shares</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">10,549,765</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">7,340,421</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">10,650,966</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">7,340,421</td><td style="padding-bottom: 1pt; text-align: left">) </td></tr> <tr id="xdx_404_eus-gaap--EarningsPerShareBasicAndDiluted_i02_pdd" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left; padding-bottom: 2.5pt">Basic and diluted net income (loss) per common share</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(0.38</td><td style="padding-bottom: 2.5pt; text-align: left">)</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(0.00</td><td style="padding-bottom: 2.5pt; text-align: left">) </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(0.85</td><td style="padding-bottom: 2.5pt; text-align: left">) </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(0.01</td><td style="padding-bottom: 2.5pt; text-align: left">)</td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"/> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <table cellpadding="0" cellspacing="0" id="xdx_885_eus-gaap--ScheduleOfEarningsPerShareBasicAndDilutedTableTextBlock_zot3eRgEivs1" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - LOSS PER COMMON SHARE (Details)"> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt; text-align: left; padding-bottom: 1pt"><span id="xdx_8BC_z28KTVTrdYCb" style="display: none">Calculation of earnings per share</span></td><td style="padding-bottom: 1pt"> </td> <td style="text-align: left"> </td><td id="xdx_49E_20210401__20210630_zGNg3VuKWVA5" style="text-align: right"> </td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="text-align: left"> </td><td id="xdx_498_20200401__20200630_zETyYGaIkm1e" style="text-align: right"> </td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="text-align: left"> </td><td id="xdx_496_20201001__20210630_zFCfv0US5AZg" style="text-align: right"> </td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="text-align: left"> </td><td id="xdx_490_20191001__20200630_zeEgMOIzvOSj" style="text-align: right"> </td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold"> </td> <td colspan="6" style="font-weight: bold; text-align: center">Three Months Ended</td><td style="font-weight: bold"> </td><td style="font-weight: bold"> </td> <td colspan="6" style="font-weight: bold; text-align: center">Nine Months Ended</td><td style="font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">June 30, 2021</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">June 30, 2020</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">June 30, 2021</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">June 30, 2020</td><td style="padding-bottom: 1pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td><td> </td> <td colspan="2"> </td><td> </td><td> </td> <td colspan="2"> </td><td> </td><td> </td> <td colspan="2"> </td><td> </td></tr> <tr id="xdx_403_ecustom--NumeratorAbstract_iB" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td>Numerator</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_409_eus-gaap--NetIncomeLoss_i01_pp0p0" style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt; width: 40%; text-align: left; padding-bottom: 1pt">Net income (loss)</td><td style="width: 2%; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; width: 1%; text-align: left">$</td><td style="border-bottom: Black 1pt solid; width: 11%; text-align: right">(3,957,611</td><td style="width: 1%; padding-bottom: 1pt; text-align: left">)</td><td style="width: 2%; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; width: 1%; text-align: left">$</td><td style="border-bottom: Black 1pt solid; width: 11%; text-align: right">(27,654</td><td style="width: 1%; padding-bottom: 1pt; text-align: left">) </td><td style="width: 2%; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; width: 1%; text-align: left">$</td><td style="border-bottom: Black 1pt solid; width: 11%; text-align: right">(9,084,002</td><td style="width: 1%; padding-bottom: 1pt; text-align: left">) </td><td style="width: 2%; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; width: 1%; text-align: left">$</td><td style="border-bottom: Black 1pt solid; width: 11%; text-align: right">(46,009</td><td style="width: 1%; padding-bottom: 1pt; text-align: left">) </td></tr> <tr id="xdx_404_ecustom--DenominatorAbstract_i01B" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td>Denominator</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_406_eus-gaap--WeightedAverageNumberOfShareOutstandingBasicAndDiluted_i02_pdd" style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt; padding-bottom: 1pt">Basic and Diluted weighted average common shares</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">10,549,765</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">7,340,421</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">10,650,966</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">7,340,421</td><td style="padding-bottom: 1pt; text-align: left">) </td></tr> <tr id="xdx_404_eus-gaap--EarningsPerShareBasicAndDiluted_i02_pdd" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left; padding-bottom: 2.5pt">Basic and diluted net income (loss) per common share</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(0.38</td><td style="padding-bottom: 2.5pt; text-align: left">)</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(0.00</td><td style="padding-bottom: 2.5pt; text-align: left">) </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(0.85</td><td style="padding-bottom: 2.5pt; text-align: left">) </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(0.01</td><td style="padding-bottom: 2.5pt; text-align: left">)</td></tr> </table> -3957611 -27654 -9084002 -46009 10549765 7340421 10650966 7340421 -0.38 -0.00 -0.85 -0.01 <p id="xdx_805_eus-gaap--RelatedPartyTransactionsDisclosureTextBlock_zeHJSizPfZ65" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>NOTE 8 – <span id="xdx_824_zb1cKTJypbAh">TRANSACTION WITH RELATED PARTIES</span></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company owed $<span id="xdx_90E_eus-gaap--DueToRelatedPartiesCurrentAndNoncurrent_c20210630__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--GogawiMember_pp0p0" title="Due to related parties">155,228</span> to Gogawi Inc. (a company controlled by certain initial shareholders of the Company) (see note 1). At September 30, 2020 the amounts owed to these related parties was $<span id="xdx_90C_eus-gaap--DueToRelatedPartiesCurrentAndNoncurrent_c20200930__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--GogawiMember_pp0p0" title="Due to related parties">152,888</span>. The advances are due on demand and are non-interest bearing. In May 2021, the Company repaid the advances in full.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On November 10, 2020, the Company entered into an employment agreement with Michal Barden, a family member of the Company’s 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 $5,000, and an award of 30,000 shares of common stock in the Company, vesting in four equal annual installments. </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> 155228 152888 XML 12 R1.htm IDEA: XBRL DOCUMENT v3.21.2
Cover - shares
9 Months Ended
Jun. 30, 2021
Aug. 09, 2021
Cover [Abstract]    
Document Type 10-Q  
Amendment Flag false  
Document Quarterly Report true  
Document Transition Report false  
Document Period End Date Jun. 30, 2021  
Document Fiscal Period Focus Q3  
Document Fiscal Year Focus 2021  
Current Fiscal Year End Date --09-30  
Entity File Number 001-40334  
Entity Registrant Name Esports Technologies, Inc.  
Entity Central Index Key 0001829966  
Entity Tax Identification Number 85-3201309  
Entity Incorporation, State or Country Code NV  
Entity Address, Address Line One 197 California Ave. Ste. 302  
Entity Address, City or Town Las Vegas  
Entity Address, State or Province NV  
Entity Address, Postal Zip Code 89104  
City Area Code (702)  
Local Phone Number 481-1779  
Title of 12(b) Security Common Stock  
Trading Symbol EBET  
Security Exchange Name NASDAQ  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Non-accelerated Filer  
Entity Small Business true  
Entity Emerging Growth Company true  
Elected Not To Use the Extended Transition Period false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   13,231,333
XML 13 R2.htm IDEA: XBRL DOCUMENT v3.21.2
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($)
Jun. 30, 2021
Sep. 30, 2020
Current assets:    
Cash $ 12,459,191 $ 0
Accounts receivable, net 0 33,839
Deferred financing costs 0 50,000
Prepaid expenses 708,148 0
Other current assets 26,387 0
Total current assets 13,193,726 83,839
Long term assets:    
Software and equipment, net 86,436 0
Intangible assets - cryptocurrency 955 44,562
Intangible assets - domain names, net 2,239,606 2,239,606
Intangible assets - license agreements, net 1,772,484 0
Total assets 17,293,207 2,368,007
Current liabilities:    
Accounts payable and accrued liabilities 767,066 55,760
Accounts payable, related party 0 152,888
Convertible notes payable, net of discount 1,086,311 0
Liabilities to users 18,824 8,809
Total current liabilities 1,872,201 217,457
Convertible notes payable, net of discount 0 116,667
Other long-term liabilities, net of discount 453,178 422,409
Total liabilities 2,325,379 756,533
Stockholders' equity:    
Preferred Stock, $0.001 par value, 10,000,000 shares authorized, 0 issued and outstanding 0 0
Common stock; $0.001 par value, 100,000,000 shares authorized, 13,111,155 and 7,340,421 shares issued and outstanding as of June 30, 2021, and September 30, 2020, respectively 13,111 7,340
Additional paid-in capital 25,488,245 3,053,660
Accumulated deficit (10,533,528) (1,449,526)
Total stockholders’ equity 14,967,828 1,611,474
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 17,293,207 $ 2,368,007
XML 14 R3.htm IDEA: XBRL DOCUMENT v3.21.2
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares
Jun. 30, 2021
Sep. 30, 2020
Statement of Financial Position [Abstract]    
Preferred stock, par value $ 0.001 $ 0.001
Preferred stock, shares authorized 10,000,000 10,000,000
Preferred stock, shares issued 0 0
Preferred stock, shares outstanding 0 0
Common stock, par value $ 0.001 $ 0.001
Common stock, shares authorized 100,000,000 100,000,000
Common stock, shares issued 13,111,155 7,340,421
Common stock, shares outstanding 13,111,155 7,340,421
XML 15 R4.htm IDEA: XBRL DOCUMENT v3.21.2
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)
3 Months Ended 9 Months Ended
Jun. 30, 2021
Jun. 30, 2020
Jun. 30, 2021
Jun. 30, 2020
Income Statement [Abstract]        
Revenue $ 41,356 $ 63,740 $ 85,984 $ 141,618
Cost of revenue 0 (27,971) (24,724) (80,138)
Gross profit 41,356 35,769 61,260 61,480
Operating expenses:        
Sales and marketing expenses 964,836 0 1,238,780 0
Product and technology expenses 1,176,848 0 2,286,228 15,635
Acquisition costs 139,235 0 139,235 0
General and administrative expenses 1,340,042 64,685 4,123,163 93,116
Total operating expenses 3,620,961 64,685 7,787,406 108,751
Income (loss) from operations (3,579,605) (28,916) (7,726,146) (47,271)
Other expenses:        
Interest expense (368,001) 0 (1,335,621) 0
Foreign currency loss (10,005) 1,262 (22,235) 1,262
Total other expense (378,006) 1,262 (1,357,856) 1,262
Income (loss) before provision for income taxes (3,957,611) (27,654) (9,084,002) (46,009)
Provision for income taxes 0 0 0 0
Net income (loss) $ (3,957,611) $ (27,654) $ (9,084,002) $ (46,009)
Net income (loss) per common share – basic and diluted $ (0.38) $ (0.00) $ (0.85) $ (0.01)
Weighted average common shares outstanding – basic and diluted 10,549,765 7,340,421 10,650,966 7,340,421
XML 16 R5.htm IDEA: XBRL DOCUMENT v3.21.2
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited) - USD ($)
Common Stock [Member]
Additional Paid-in Capital [Member]
Retained Earnings [Member]
Total
Beginning balance, value at Sep. 30, 2019 $ 7,340 $ 953,660 $ (876,271) $ 84,729
Beginning balance, shares at Sep. 30, 2019 7,340,421      
Net loss (23,428) (23,428)
Ending balance, value at Dec. 31, 2019 $ 7,340 953,660 (899,699) 61,301
Ending balance, shares at Dec. 31, 2019 7,340,421      
Beginning balance, value at Sep. 30, 2019 $ 7,340 953,660 (876,271) 84,729
Beginning balance, shares at Sep. 30, 2019 7,340,421      
Net loss       (46,009)
Ending balance, value at Jun. 30, 2020 $ 7,340 953,660 (922,280) 38,720
Ending balance, shares at Jun. 30, 2020 7,340,421      
Beginning balance, value at Dec. 31, 2019 $ 7,340 953,660 (899,699) 61,301
Beginning balance, shares at Dec. 31, 2019 7,340,421      
Net loss 5,073 5,073
Ending balance, value at Mar. 31, 2020 $ 7,340 953,660 (894,626) 66,374
Ending balance, shares at Mar. 31, 2020 7,340,421      
Net loss (27,654) (27,654)
Ending balance, value at Jun. 30, 2020 $ 7,340 953,660 (922,280) 38,720
Ending balance, shares at Jun. 30, 2020 7,340,421      
Beginning balance, value at Sep. 30, 2020 $ 7,340 3,053,660 (1,449,526) 1,611,474
Beginning balance, shares at Sep. 30, 2020 7,340,421      
Shares and warrants issued for cash, net $ 2,000 3,646,071 3,648,071
Shares and warrants issued for cash, net, shares 2,000,000      
Stock-based compensation $ 683 1,321,343 1,322,026
Stock-based compensation, shares 683,334      
Shares issued due to conversion of notes payable $ 375 187,125 187,500
Shares issued due to conversion of notes payable, shares 375,000      
Stock warrants issued for asset acquisition 57,252 57,252
Net loss (2,750,731) (2,750,731)
Ending balance, value at Dec. 31, 2020 $ 10,398 8,265,451 (4,200,257) 4,075,592
Ending balance, shares at Dec. 31, 2020 10,398,755      
Beginning balance, value at Sep. 30, 2020 $ 7,340 3,053,660 (1,449,526) 1,611,474
Beginning balance, shares at Sep. 30, 2020 7,340,421      
Net loss       (9,084,002)
Ending balance, value at Jun. 30, 2021 $ 13,111 25,488,245 (10,533,528) 14,967,828
Ending balance, shares at Jun. 30, 2021 13,111,155      
Beginning balance, value at Dec. 31, 2020 $ 10,398 8,265,451 (4,200,257) 4,075,592
Beginning balance, shares at Dec. 31, 2020 10,398,755      
Shares and warrants issued for cash, net $ 251 719,435 719,686
Shares and warrants issued for cash, net, shares 250,014      
Stock-based compensation 700,000 700,000
Net loss (2,375,660) (2,375,660)
Ending balance, value at Mar. 31, 2021 $ 10,649 9,684,886 (6,575,917) 3,119,618
Ending balance, shares at Mar. 31, 2021 10,648,769      
Shares and warrants issued for cash, net $ 2,400 13,511,800 13,514,200
Shares and warrants issued for cash, net, shares 2,400,000      
Shares issued for intangible assets 1,456,650 1,456,650
Cashless exercise of warrants $ 62 (62)
Cashless exercise of warrants, shares 62,386      
Stock-based compensation 834,971 834,971
Net loss (3,957,611) (3,957,611)
Ending balance, value at Jun. 30, 2021 $ 13,111 $ 25,488,245 $ (10,533,528) $ 14,967,828
Ending balance, shares at Jun. 30, 2021 13,111,155      
XML 17 R6.htm IDEA: XBRL DOCUMENT v3.21.2
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)
9 Months Ended
Jun. 30, 2021
Jun. 30, 2020
Cash flow from operating activities:    
Net loss $ (9,084,002) $ (46,009)
Adjustments to reconcile net loss to net cash used in operating activities:    
Amortization of debt discount 1,187,913 0
Depreciation and amortization expense 178,339 0
Stock-based compensation 2,856,997 0
Bad debt expense 50,932 0
Gain on cryptocurrency settlement (45,267) (1,369)
Changes in operating assets and liabilities:    
Accounts receivable (35,252) (125,553)
Prepaid expenses and other (623,026) 0
Accounts payable and accrued liabilities 775,277 0
Accounts payable - related parties (152,888) 105,118
Liabilities to users (8,432) 96
Net cash used in operating activities (4,899,409) (67,717)
Cash flow from investing activities:    
Purchase of software and equipment (103,259) 0
Purchase of other long-term assets (420,098) 0
Net cash used by investing activities (523,357) 0
Cash flow from financing activities:    
Proceeds from equity issuance, net of costs of capital 17,881,957 0
Net cash provided by financing activities 17,881,957 0
NET CHANGE IN CASH 12,459,191 (67,717)
CASH AT BEGINNING OF PERIOD 0 67,717
CASH AT END OF PERIOD 12,459,191 0
Supplemental disclosure of cash flow information:    
Cash paid for interest 0 0
Cash paid for income taxes 0 0
Non-cash transactions    
Stock warrant issued for asset acquisition 57,282 0
Stock issued for conversion of notes payable 187,500 0
Stock issuable for intangible asset $ 1,456,650 $ 0
XML 18 R7.htm IDEA: XBRL DOCUMENT v3.21.2
ORGANIZATION, NATURE OF OPERATIONS AND GOING CONCERN
9 Months Ended
Jun. 30, 2021
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

 

Esports Technologies, Inc. (“Esports Tech”) was formed on September 24, 2020 as a Nevada corporation. Esports Tech is a technology company creating and operating platforms focused on esports and competitive gaming. The Company operates under a Curacao gaming sublicense and can provide online betting services to various countries around the world. The majority of the Company’s customers are based in the Philippines. The Company’s consolidated financial statements include its accounts and the accounts of its 100% owned subsidiaries, namely Global E-Sports Entertainment Group, LLC (“Global E-Sports”), ESEG Limited (“ESEG”) and Gogawi Entertainment Group (“Gogawi”) (collectively referred to as the “Company,” “we,” “our,” or “us”). Global E-Sports, a Nevada limited liability company, was incorporated in Nevada on June 28, 2016. ESEG, a Belize company was incorporated on October 31, 2016. Gogawi, a Cypress company was incorporated on December 8, 2018 and has always been a wholly owned subsidiary of ESEG. On December 8, 2020, the Company incorporated Esportsbook Technologies Limited (“Esportsbook”) in Ireland as a wholly-owned subsidiary of Esports Tech. All amounts included in this Form 10-Q are expressed in U.S. Dollars, unless otherwise noted.

 

Going Concern

 

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company has recurring losses and generated negative cash flows from operations since inception. In April 2021, the Company completed its Initial Public Offering (“IPO”) and issued 2,400,000 shares of common stock for gross cash proceeds of $14,400,000, receiving net proceeds of $13,514,200.

 

Impact of COVID-19

 

The outbreak of the 2019 novel coronavirus disease (“COVID-19”), which was declared a global pandemic by the World Health Organization on March 11, 2020, and the related responses by public health and governmental authorities to contain and combat its outbreak and spread, has severely impacted the U.S. and world economies. Economic recessions, including those brought on by the COVID-19 outbreak may have a negative effect on the demand for the Company’s products and the Company’s operating results. The range of possible impacts on the Company’s business from the coronavirus pandemic could include: (i) changing demand for the Company’s online betting products; and (ii) increasing contraction in the capital markets.

 

XML 19 R8.htm IDEA: XBRL DOCUMENT v3.21.2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
9 Months Ended
Jun. 30, 2021
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

 

The accompanying unaudited financial statements of the Company, include the accounts of the Company and its wholly-owned subsidiaries, and have been prepared in accordance with generally accepted accounting principles accepted in the United States (“U.S. GAAP”) for interim unaudited financial information. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The unaudited financial statements include all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary in order to make the condensed financial statements not misleading. Operating results for the three and nine months ended June 30, 2021, are not necessarily indicative of the final results that may be expected for the year ended September 30, 2021. For more complete financial information, these unaudited financial statements should be read in conjunction with the audited consolidated financial statements for the year ended September 30, 2020 included in our Form S-1 filed with the SEC. Notes to the consolidated financial statements which would substantially duplicate the disclosures contained in the audited consolidated financial statements for the most recent fiscal period, as reported in the Form S-1, have been omitted. 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.

 

Intangible Assets

 

Cryptocurrencies

 

There is currently no specific guidance under GAAP or alternative accounting framework for the accounting for cryptocurrencies recognized as revenue or held, and management has exercised significant judgment in determining the appropriate accounting treatment. In the event authoritative guidance is enacted by the FASB, the Company may be required to change its policies, which could have an effect on the Company’s consolidated financial position and results from operations.

 

Cryptocurrencies held are accounted for as an indefinite-lived intangible asset under ASC 350, Intangible – Goodwill and Other. 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, which is measured using the quoted price of the cryptocurrency at the time its fair value is being measured. 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 not 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.

 

The Company uses its cryptocurrencies to pay vendors and users. The Company also receives payments on its receivables and player deposits in cryptocurrency. Gains and losses realized upon settlement of cryptocurrencies are also recorded in general and administrative expense in our consolidated statements of operations.

 

Other Intangible Assets

 

The Company’s other intangible asset consist of internet domain names, which are an indefinite-lived intangible. 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.

 

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.

 

Revenue Recognition

 

The Company recognizes revenue in accordance with ASC Topic 606, Revenue From Contracts With Customers, which was adopted on October 1, 2018 using the modified retrospective method. ASC Topic 606 requires companies to recognize revenue in a manner that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, the standard requires disclosures of the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The adoption of ASC Topic 606 had no impact to the Company’s comparative consolidated financial statements. Revenue is recognized based on the following five step model:

 

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 exceeded more than 10% of revenue during the three and nine months ended June 30, 2021 and 2020. In addition, no disaggregation of revenue is required because all current revenue is generated from gaming revenue.

 

Performance Obligations

 

The Company operates an online betting platform allowing users to place wagers on a variety of live sporting events and esports events. Each wager placed by users create a single performance obligation for the Company to administer each event wagered. Gross gaming revenue is the aggregate of gaming wins and losses based on results of each event that customers wager bets on. 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 reduction to gross gaming revenue.

 

Cost of Revenue

 

Cost of revenue consists of third-party costs associated with the betting software platform and amortization of capitalized software costs.

 

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.

 

XML 20 R9.htm IDEA: XBRL DOCUMENT v3.21.2
LONG-LIVED ASSETS
9 Months Ended
Jun. 30, 2021
Property, Plant and Equipment [Abstract]  
LONG-LIVED ASSETS

NOTE 3 – LONG-LIVED ASSETS

 

Software and equipment

 

The Company’s software and equipment consisted of the following as of June 30, 2021 and September 30, 2020: 

          
  

June 30,

2021

  

September 30,

2020

 
Software  $160,511   $ 
Total software and equipment   160,511     
Accumulated depreciation   (74,075)    
Software and equipment, net  $86,436   $ 

 

On November 5, 2020, the Company entered into an asset purchase agreement with a third party to acquire certain proprietary technology data. The Company made a cash payment of $61,425 and granted warrants to purchase 32,000 shares of common stock at an exercise price of $0.25 per share for a period of five years. The fair value of the warrants was estimated to be $57,252 as of the grant date. The total consideration paid of $118,677 is included as part of software costs within property and equipment on the Company’s consolidated balance sheet. The Company also entered into an employment agreement with the seller, effective November 1, 2020. The employee will be compensated at a rate of $110,000 per year and will receive a common stock award of 100,000 shares, which vest annually over four years.

 

The software costs above relate to acquired components of the Company’s new platform which is being depreciated over an expected useful life.

 

Intangible Assets

 

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, based on the estimated fair value of the consideration transferred to the sellers. ESEG issued notes payable with a combined principal amount of $2,100,000, which were to mature on March 1, 2022, bearing interest at 10%. These notes were exchanged for notes of the Company in September 2020. The Company also agreed to pay a total of $675,000 on September 1, 2025, with no interest. The Company estimated discount of these liabilities totaling $535,394 at the date of the transaction, to be amortized over the maturity period of the liabilities. The domain names were recorded as an intangible asset with an indefinite useful life. The Company’s management evaluated the domain names at September 30, 2020 and determined no impairment was necessary.

 

The following table presents the activities of the Company’s cryptocurrency holdings for the three and nine months ended June 30, 2021: 

     
Cryptocurrency at September 30, 2020  $44,562 
Additions of cryptocurrency   36,605 
Payments of cryptocurrency   (125,480)
Gain on cryptocurrency   45,268 
Cryptocurrency at June 30, 2021  $955 

 

Additions of cryptocurrency during the nine months ended June 30, 2021 represent settlement of outstanding accounts receivable of $18,158 and net deposits from players of $18,447. Payments of cryptocurrency during the nine months ended June 30, 2021 included payments of accounts payable and accrued expenses of $63,971 and prepaid expenses of $61,509. Use of cryptocurrency to settle receivables and payables during the period are reflected as a component of changes in operating assets and liabilities in the consolidated statement of cash flows.

 

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 upon execution of the option agreement and paid an additional $286,328 in cash and agreed to issue 65,000 shares of common stock upon exercise of the option on or about May 3, 2021. The shares were issued in July 2021 and had a fair value of $1,456,650 at the date of exercise of the option and execution of the license agreement resulting in total value for the license agreement of $1,876,748. During the three and nine months ended June 30, 2021, the Company recognized amortization expense of $104,264 included in product and technology expenses.

 

XML 21 R10.htm IDEA: XBRL DOCUMENT v3.21.2
CONVERTIBLE NOTES PAYABLE AND OTHER LONG-TERM LIABILITIES
9 Months Ended
Jun. 30, 2021
Debt Disclosure [Abstract]  
CONVERTIBLE NOTES PAYABLE AND OTHER LONG-TERM LIABILITIES

NOTE 4 – CONVERTIBLE NOTES PAYABLE AND OTHER LONG-TERM LIABILITIES

 

On September 1, 2020, ESEG entered into three promissory notes, with a combined principal amount of $2,100,000. The notes bore interest at the rate of 10% per annum and matured on March 1, 2022. The Company also agreed to pay two of the lenders a total of $675,000 on September 1, 2025, bearing no interest. The Company estimated total debt discount of these liabilities to be $535,394 at the date of the transaction, of which $279,516 related to the promissory notes payable, and $255,878 related to the other long-term liabilities. The discounts will be amortized over the maturity period of each liability. As of June 30, 2021 and September 30, 2020, the carrying amount of the other long-term liabilities was $453,178 and $422,409, respectively, which is net of the remaining discount totaling $221,822 and $252,591, respectively. The carrying amount of the convertible notes payable and associated discount is further discussed below.

 

On September 26, 2020, the Company assumed the notes payable with principal of $2,100,000 from ESEG. In connection with this assumption, Esports Tech issued each of the lenders a conversion option at a fixed price of $0.50 per share and issued 2,015,000 warrants to purchase shares of the Company’s common stock at an exercise price of $0.30 per share, each with a term of five years. The convertible notes bear interest at 10% per annum and mature on March 1, 2022. The holder may convert the note into shares of common stock at any time throughout the maturity date, to the extent and provided that no holder of the notes was or will be permitted to convert such notes so long as it or any of its affiliates would beneficially own in excess of 4.99% of the Company’s common stock after such conversion. The Company determined that the assignment of the notes payable by the subsidiary to the parent company was an extinguishment of the original notes payable due to the addition of a substantive conversion feature, and the Company recognized a loss on extinguishment of $265,779 during the year ended September 30, 2020.

 

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 debt discount will be amortized through the maturity date of the convertible notes payable.

 

During the three months ended December 31, 2020, a total of $187,500 of principal was converted into 375,000 shares of common stock. As of June 30, 2021, the balance due under these notes, net of unamortized discount of $826,189, is $1,086,311, with accrued interest of $116,774. During the nine months ended June 30, 2021, the Company recorded a charge of $1,187,913 in the accompanying consolidated statement of operations from the amortization of its debt discount related to the convertible notes payable and other liabilities described above.

 

XML 22 R11.htm IDEA: XBRL DOCUMENT v3.21.2
STOCKHOLDERS’ EQUITY
9 Months Ended
Jun. 30, 2021
Equity [Abstract]  
STOCKHOLDERS’ EQUITY

NOTE 5 – STOCKHOLDERS’ EQUITY

 

The Company is currently authorized to issue up to 100,000,000 shares of common stock with a par value of $0.001. In addition, the Company is authorized to issue 10,000,000 shares of preferred stock with a par value of $0.001. The specific rights of the preferred stock, when so designated, shall be determined by the board of directors.

 

During the three months ended December 31, 2020, the Company received gross cash proceeds of $4,000,000 in exchange for 2,000,000 shares of common stock. In conjunction with this fundraising, broker commission and expenses of $351,929 were paid and 173,625 common stock warrants with an exercise price of $2.00 and a five-year term were issued. The fair value of the warrants issued in connection with the financing was estimated to be $228,500 as discussed below.

 

In January 2021, the Company sold 250,014 shares of common stock to investors for $3 per share, receiving gross proceeds of $750,042. The company paid $30,314 of broker fees and commissions related to this fundraising and issued 8,750 warrants to purchase common stock with an exercise price of $3 per share and a term of 5 years. The fair value of the warrants issued in connection with the financing was estimated to be $228,500 as discussed below.

 

In February 2021, the Company entered into an agreement with a consultant where the Company agreed to issue warrants to purchase 4,166 shares of stock with a term of 5 years at an exercise price of $3 per share, and paid $37,500 of cash for services rendered. The consultant will also receive $50,000 of consideration per year for an additional two years in a combination of cash and common stock warrants.

 

In April 2021, the Company completed its IPO and issued 2,400,000 shares of common stock for gross cash proceeds of $14,400,000 and received net proceeds of $13,514,200 after costs of $885,800 which were recorded in shareholders’ equity. The Company also issued 168,000 common stock warrants with a five-year term and exercise price of $7.20 to the underwriter. These warrants have an estimated fair value of $5,474,076.

 

2020 Stock Plan

 

In December 2020, the Company adopted the Esports Technologies, 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.

 

The number of shares of the common stock that may be issued under the 2020 Plan is 4,000,000. As of June 30, 2021, the Company had awarded a total 3,462,598 shares under the 2020 Plan, with 537,402 remaining under the 2020 Plan.

 

Common Stock Awards

 

During the nine months ended June 30, 2021, the Company agreed to award a total of restricted stock units that convert into common stock to various employees, consultants and officers under the 2020 Plan. Of the restricted stock unit awarded, 755,250 will vest annually over a period of one to four years, 300,000 will vest upon the completion of various performance goals related to the operations of the Company, and 200,000 shares of common stock underlying awards made to the Company’s CEO will vest equally upon reaching trailing twelve months revenue of $10 million and $20 million. The Company estimated the fair value of the awards granted prior to the IPO, at $2 per share based on recent sales of common stock. Awards granted after the IPO, the closing price of the Company’s stock on the grant date is used to determine the fair value.

 

In November 2020, the Company entered into four consulting agreements under which the Company issued a total of 683,334 shares of common stock, which vest equally over terms ranging from three to twelve months.

 

During the three and nine months ended June 30, 2021, the Company recognized a total of $501,716 and $1,940,249 of stock-based compensation expense related to common stock awards and expects to recognize additional compensation cost of $5,258,844 upon vesting of all awards.

 

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 year ended September 30, 2020. The following table summarizes warrant activity during the three and nine months ended June 30, 2021: 

Schedule of warrant activity               
    Common Stock Warrants 
    Shares    Weighted
Average
Exercise
Price
    Weighted
average
Remaining
Life in years
 
Outstanding at September 30, 2020   2,015,000   $0.30    4.24 
Granted   386,541    3.63    4.58 
Cancelled            
Expired            
Exercised   (66,000)   (2.00)   4.33 
Outstanding at June 30, 2021   2,335,541   $0.89    4.29 
Exercisable at June 30, 2021   2,335,541   $0.89    4.29 

 

The outstanding and exercisable common stock warrants had an estimated intrinsic value of $47,110,395. The Company estimated the fair value of the warrants using a Black-Scholes option pricing model and the following assumptions: 1) stock price of $2 to $3 per share; 2) dividend yield of 0%; 3) risk-free rate of between 0.18% and 0.81%; 4) expected term of between 2.5 and 5 years; 5) an exercise price of $0.25, $2 $3 or $7.20 and 6) expected volatility of between 84.1% and 99.0% based on a peer group of public companies. The warrants granted to brokers in connection with sales of common stock during the nine months ended June 30, 2021, had an estimated fair value of $5,474,076 which was reflected as a cost of capital, warrants granted to consultants for services had a fair value of $8,819, and the warrants granted in connection with the asset purchase agreement had an estimated fair value of $57,252.

 

Options

 

During the three months ended June 30, 2021, the Company entered into various agreements with employees and consultants whereby the Company agreed to award a total of 96,000 common stock options under the 2020 Plan. These awards generally vest over 4 years.

 

During the three months ended March 31, 2021, the Company entered into various agreements with employees, consultants and directors whereby the Company agreed to award a total of 402,000 common stock options, including 150,000 to two members of the Board of Directors under the 2020 Plan. These awards vest over a period of six months to four years, with 20,000 options issued to a consultant vesting immediately.

 

During the three months ended December 31, 2020, the Company entered into various agreements with employees and consultants whereby the Company agreed to award a total of 2,014,348 common stock options, including 90,000 to consultants and 100,000 to a member of the Board of Directors under the 2020 Plan. Of the total, 1,390,000 vest equally over periods of between one and four years, 70,313 vested upon completion of the Company’s IPO, 200,000 to the Company’s Chief Operating Officer would have vested in the event that the Company’s IPO raised gross proceeds of at least $18 million (as the IPO proceeds were less than $18 million, these shares did not vest), and 57,250 to the Company’s prior interim CFO vested upon the hiring of the Company’s full time CFO.

 

The following table summarizes option activity during the nine months ended June 30, 2021:

 

               
    Common Stock Options 
    Shares    Weighted
Average
Exercise
Price
    Weighted
average
Remaining
Life in years
 
Outstanding at September 30, 2020      $     
Granted   2,512,348    1.63    9.09 
Cancelled   (220,000)   0.50    9.81 
Expired            
Exercised            
Outstanding at June 30, 2021   2,292,348   $1.73    8.61 
Exercisable at June 30, 2021   144,348   $0.96    8.71 

 

During the three and nine months ended June 30, 2021, the Company recognized stock-based compensation expense of $834,971 and $2,856,998 related to common stock options awarded. The exercisable common stock options had an intrinsic value as of June 30, 2021, of $1,552,573. The Company expects to recognize an additional $4,701,717 of compensation cost related to stock options expected to vest.

 

The Company estimated the fair value of the stock options awarded using a Black-Scholes option pricing model and the following assumptions: 1) stock price of $2 to $3 per share; 2) dividend yield of 0%; 3) risk-free rate of between 0.22% and 0.90%; 4) expected term of between 3.5 and 6.25 years; 5) an exercise price between $0.25 and $22.89 and 6) expected volatility of between 82.3% and 95.33% based on a peer group of public companies.

 

XML 23 R12.htm IDEA: XBRL DOCUMENT v3.21.2
COMMITMENTS AND CONTINGENCIES
9 Months Ended
Jun. 30, 2021
Commitments and Contingencies Disclosure [Abstract]  
COMMITMENTS AND CONTINGENCIES

NOTE 6 – COMMITMENTS AND CONTINGENCIES

 

On September 2, 2020, the Company entered into a financial advisor agreement with Boustead Securities LLC, the representative of the underwriters in the Company’s initial public offering, to provide services related to fundraising on the Company’s planned public listing. The Company agreed to pay the financial advisor a success fee of 4% of any gross proceeds from any debt financing, and a 7% success fee related to any equity or convertible debt financing, subject to customary approval by the regulatory authorities. In April 2021, the Company completed its IPO and issued 2,400,000 shares of common stock for gross cash proceeds of $14,400,000. The Company paid underwriting fees of $885,800 and issued 168,000 warrants to purchase shares of common stock at a price of $7.20 per share for a period of five 5 years.

 

On September 26, 2020, the Company entered into a consulting agreement with a registered foreign broker dealer for fundraising services and paid 10% of any gross proceeds through capital raises from non-US investors introduced by the consultant, up to a maximum payment to the consultant of $200,000 and the consultant also received warrants to purchase shares of the Company’s common stock at an exercise price of $2.00 per share. These warrants were exercised in April 2021 and were converted into 62,386 shares of the Company stock.

 

XML 24 R13.htm IDEA: XBRL DOCUMENT v3.21.2
LOSS PER COMMON SHARE
9 Months Ended
Jun. 30, 2021
Earnings Per Share [Abstract]  
LOSS PER COMMON SHARE

NOTE 7 –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. Common shares issuable under convertible debt, stock options and common stock warrants were excluded from the calculation of diluted net loss per share due to their antidilutive effect.

 

                    
   Three Months Ended   Nine Months Ended 
   June 30, 2021   June 30, 2020   June 30, 2021   June 30, 2020 
                 
Numerator                    
Net income (loss)  $(3,957,611)  $(27,654  $(9,084,002  $(46,009
Denominator                    
Basic and Diluted weighted average common shares   10,549,765    7,340,421    10,650,966    7,340,421
Basic and diluted net income (loss) per common share  $(0.38)  $(0.00  $(0.85  $(0.01)

 

XML 25 R14.htm IDEA: XBRL DOCUMENT v3.21.2
TRANSACTION WITH RELATED PARTIES
9 Months Ended
Jun. 30, 2021
Related Party Transactions [Abstract]  
TRANSACTION WITH RELATED PARTIES

NOTE 8 – TRANSACTION WITH RELATED PARTIES

 

The Company owed $155,228 to Gogawi Inc. (a company controlled by certain initial shareholders of the Company) (see note 1). At September 30, 2020 the amounts owed to these related parties was $152,888. The advances are due on demand and are non-interest bearing. In May 2021, the Company repaid the advances in full.

 

On November 10, 2020, the Company entered into an employment agreement with Michal Barden, a family member of the Company’s 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 30,000 shares of common stock in the Company, vesting in four equal annual installments. 

 

XML 26 R15.htm IDEA: XBRL DOCUMENT v3.21.2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)
9 Months Ended
Jun. 30, 2021
Accounting Policies [Abstract]  
Basis of Presentation

Basis of Presentation

 

The accompanying unaudited financial statements of the Company, include the accounts of the Company and its wholly-owned subsidiaries, and have been prepared in accordance with generally accepted accounting principles accepted in the United States (“U.S. GAAP”) for interim unaudited financial information. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The unaudited financial statements include all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary in order to make the condensed financial statements not misleading. Operating results for the three and nine months ended June 30, 2021, are not necessarily indicative of the final results that may be expected for the year ended September 30, 2021. For more complete financial information, these unaudited financial statements should be read in conjunction with the audited consolidated financial statements for the year ended September 30, 2020 included in our Form S-1 filed with the SEC. Notes to the consolidated financial statements which would substantially duplicate the disclosures contained in the audited consolidated financial statements for the most recent fiscal period, as reported in the Form S-1, have been omitted. 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.

 

Intangible Assets

Intangible Assets

 

Cryptocurrencies

 

There is currently no specific guidance under GAAP or alternative accounting framework for the accounting for cryptocurrencies recognized as revenue or held, and management has exercised significant judgment in determining the appropriate accounting treatment. In the event authoritative guidance is enacted by the FASB, the Company may be required to change its policies, which could have an effect on the Company’s consolidated financial position and results from operations.

 

Cryptocurrencies held are accounted for as an indefinite-lived intangible asset under ASC 350, Intangible – Goodwill and Other. 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, which is measured using the quoted price of the cryptocurrency at the time its fair value is being measured. 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 not 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.

 

The Company uses its cryptocurrencies to pay vendors and users. The Company also receives payments on its receivables and player deposits in cryptocurrency. Gains and losses realized upon settlement of cryptocurrencies are also recorded in general and administrative expense in our consolidated statements of operations.

 

Other Intangible Assets

 

The Company’s other intangible asset consist of internet domain names, which are an indefinite-lived intangible. 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.

 

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.

 

Revenue Recognition

Revenue Recognition

 

The Company recognizes revenue in accordance with ASC Topic 606, Revenue From Contracts With Customers, which was adopted on October 1, 2018 using the modified retrospective method. ASC Topic 606 requires companies to recognize revenue in a manner that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, the standard requires disclosures of the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The adoption of ASC Topic 606 had no impact to the Company’s comparative consolidated financial statements. Revenue is recognized based on the following five step model:

 

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 exceeded more than 10% of revenue during the three and nine months ended June 30, 2021 and 2020. In addition, no disaggregation of revenue is required because all current revenue is generated from gaming revenue.

 

Performance Obligations

 

The Company operates an online betting platform allowing users to place wagers on a variety of live sporting events and esports events. Each wager placed by users create a single performance obligation for the Company to administer each event wagered. Gross gaming revenue is the aggregate of gaming wins and losses based on results of each event that customers wager bets on. 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 reduction to gross gaming revenue.

 

Cost of Revenue

Cost of Revenue

 

Cost of revenue consists of third-party costs associated with the betting software platform and amortization of capitalized software costs.

 

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.

 

XML 27 R16.htm IDEA: XBRL DOCUMENT v3.21.2
LONG-LIVED ASSETS (Tables)
9 Months Ended
Jun. 30, 2021
Property, Plant and Equipment [Abstract]  
Schedule of software and equipment
          
  

June 30,

2021

  

September 30,

2020

 
Software  $160,511   $ 
Total software and equipment   160,511     
Accumulated depreciation   (74,075)    
Software and equipment, net  $86,436   $ 
Cryptocurrency activity table
     
Cryptocurrency at September 30, 2020  $44,562 
Additions of cryptocurrency   36,605 
Payments of cryptocurrency   (125,480)
Gain on cryptocurrency   45,268 
Cryptocurrency at June 30, 2021  $955 

 

Additions of cryptocurrency during the nine months ended June 30, 2021 represent settlement of outstanding accounts receivable of $18,158 and net deposits from players of $18,447. Payments of cryptocurrency during the nine months ended June 30, 2021 included payments of accounts payable and accrued expenses of $63,971 and prepaid expenses of $61,509. Use of cryptocurrency to settle receivables and payables during the period are reflected as a component of changes in operating assets and liabilities in the consolidated statement of cash flows.

 

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 upon execution of the option agreement and paid an additional $286,328 in cash and agreed to issue 65,000 shares of common stock upon exercise of the option on or about May 3, 2021. The shares were issued in July 2021 and had a fair value of $1,456,650 at the date of exercise of the option and execution of the license agreement resulting in total value for the license agreement of $1,876,748. During the three and nine months ended June 30, 2021, the Company recognized amortization expense of $104,264 included in product and technology expenses.

XML 28 R17.htm IDEA: XBRL DOCUMENT v3.21.2
STOCKHOLDERS’ EQUITY (Tables)
9 Months Ended
Jun. 30, 2021
Equity [Abstract]  
Schedule of warrant activity
Schedule of warrant activity               
    Common Stock Warrants 
    Shares    Weighted
Average
Exercise
Price
    Weighted
average
Remaining
Life in years
 
Outstanding at September 30, 2020   2,015,000   $0.30    4.24 
Granted   386,541    3.63    4.58 
Cancelled            
Expired            
Exercised   (66,000)   (2.00)   4.33 
Outstanding at June 30, 2021   2,335,541   $0.89    4.29 
Exercisable at June 30, 2021   2,335,541   $0.89    4.29 
Schedule of option activity
               
    Common Stock Options 
    Shares    Weighted
Average
Exercise
Price
    Weighted
average
Remaining
Life in years
 
Outstanding at September 30, 2020      $     
Granted   2,512,348    1.63    9.09 
Cancelled   (220,000)   0.50    9.81 
Expired            
Exercised            
Outstanding at June 30, 2021   2,292,348   $1.73    8.61 
Exercisable at June 30, 2021   144,348   $0.96    8.71 
XML 29 R18.htm IDEA: XBRL DOCUMENT v3.21.2
LOSS PER COMMON SHARE (Tables)
9 Months Ended
Jun. 30, 2021
Earnings Per Share [Abstract]  
Calculation of earnings per share
                    
   Three Months Ended   Nine Months Ended 
   June 30, 2021   June 30, 2020   June 30, 2021   June 30, 2020 
                 
Numerator                    
Net income (loss)  $(3,957,611)  $(27,654  $(9,084,002  $(46,009
Denominator                    
Basic and Diluted weighted average common shares   10,549,765    7,340,421    10,650,966    7,340,421
Basic and diluted net income (loss) per common share  $(0.38)  $(0.00  $(0.85  $(0.01)
XML 30 R19.htm IDEA: XBRL DOCUMENT v3.21.2
ORGANIZATION, NATURE OF OPERATIONS AND GOING CONCERN (Details Narrative) - IPO [Member]
7 Months Ended
Apr. 30, 2021
USD ($)
shares
SaleOfStockLineItems [Line Items]  
Stock issued new, shares | shares 2,400,000
Proceeds from issuance of stock $ 14,400,000
Proceeds from Issuance of Common Stock $ 13,514,200
XML 31 R20.htm IDEA: XBRL DOCUMENT v3.21.2
LONG-LIVED ASSETS (Details - Software) - USD ($)
Jun. 30, 2021
Sep. 30, 2020
Finite-Lived Intangible Assets [Line Items]    
Software $ 160,511 $ 0
Accumulated depreciation (74,075) 0
Accumulated depreciation 74,075 0
Software and equipment, net 86,436 0
Software And Equipment [Member]    
Finite-Lived Intangible Assets [Line Items]    
Software $ 160,511 $ 0
XML 32 R21.htm IDEA: XBRL DOCUMENT v3.21.2
LONG-LIVED ASSETS (Details - Crytocurrency)
9 Months Ended
Jun. 30, 2021
USD ($)
Property, Plant and Equipment [Abstract]  
Cryptocurrency $ 44,562
Additions of cryptocurrency 36,605
Payments of cryptocurrency (125,480)
Gain on cryptocurrency 45,268
Cryptocurrency $ 955
XML 33 R22.htm IDEA: XBRL DOCUMENT v3.21.2
LONG-LIVED ASSETS (Details Narrative) - USD ($)
1 Months Ended 3 Months Ended 7 Months Ended 9 Months Ended 10 Months Ended 12 Months Ended
Nov. 05, 2020
Jun. 30, 2021
May 03, 2021
Jun. 30, 2021
Jun. 30, 2020
Jul. 31, 2021
Sep. 30, 2020
Oct. 01, 2020
Sep. 01, 2020
Asset Acquisition [Line Items]                  
Payment for technology data       $ 103,259 $ (0)        
Unamortized discount   $ 826,189   826,189          
Additions of cryptocurrency       36,605          
Payments of cryptocurrency       (125,480)          
Payment for option       420,098 $ (0)        
Stock Issued During Period, Value, Purchase of Assets   1,456,650              
Online Betting Technology [Member]                  
Asset Acquisition [Line Items]                  
Stock Issued During Period, Shares, Purchase of Assets           65,000      
Stock Issued During Period, Value, Purchase of Assets           $ 1,456,650      
[custom:IntangibleAssetsLicenseAgreements-0]               $ 1,876,748  
Amortization of Intangible Assets       104,264          
Accounts Receivable [Member]                  
Asset Acquisition [Line Items]                  
Additions of cryptocurrency   18,158              
Net Deposits [Member]                  
Asset Acquisition [Line Items]                  
Additions of cryptocurrency   18,447              
Accounts Payable And Accrued Expenses [Member]                  
Asset Acquisition [Line Items]                  
Payments of cryptocurrency   63,971              
Prepaid Expenses and Other Current Assets [Member]                  
Asset Acquisition [Line Items]                  
Payments of cryptocurrency   $ 61,509              
Internet Domain Names [Member]                  
Asset Acquisition [Line Items]                  
Debt Instrument, Face Amount             $ 2,100,000    
Debt maturity date             Mar. 01, 2022    
Debt interest rate             10.00%    
Debt balloon payment             $ 675,000    
Debt balloon payment date             Sep. 01, 2025    
Unamortized discount             $ 535,394    
Internet Domain Names [Member] | ESEG Limited [Member]                  
Asset Acquisition [Line Items]                  
Investment Owned, at Cost                 $ 2,239,606
Upon Execution Of Agreement [Member] | Online Betting Technology [Member]                  
Asset Acquisition [Line Items]                  
Payment for option       $ 133,770          
Upon Exercise Of Option [Member] | Online Betting Technology [Member]                  
Asset Acquisition [Line Items]                  
Payment for option     $ 286,328            
Warrants [Member]                  
Asset Acquisition [Line Items]                  
Warrant exercise price   $ 0.89   $ 0.89     $ 0.30    
Stock issued for asset acquisition       386,541          
Technology Data [Member]                  
Asset Acquisition [Line Items]                  
Payment for technology data $ 61,425                
Total consideration paid $ 118,677                
Stock issued for asset acquisition 100,000                
Technology Data [Member] | Annual Salary [Member]                  
Asset Acquisition [Line Items]                  
Payment to acquire intangible assets $ 110,000                
Technology Data [Member] | Warrants [Member]                  
Asset Acquisition [Line Items]                  
Warrants issued 32,000                
Warrant exercise price $ 0.25                
Fair value of warrants granted $ 57,252                
XML 34 R23.htm IDEA: XBRL DOCUMENT v3.21.2
CONVERTIBLE NOTES PAYABLE AND OTHER LONG-TERM LIABILITIES (Details Narrative) - USD ($)
3 Months Ended 9 Months Ended 11 Months Ended 12 Months Ended
Dec. 31, 2020
Jun. 30, 2021
Jun. 30, 2020
Sep. 01, 2020
Sep. 30, 2020
Sep. 01, 2025
Sep. 26, 2020
Debt Instrument [Line Items]              
Notes payable   $ 1,086,311          
Debt discount   826,189          
Debt converted, amount converted $ 187,500            
Debt converted, shares issued 375,000            
Accrued interest   116,774          
Amortization of debt discount   $ 1,187,913 $ 0        
Warrants [Member]              
Debt Instrument [Line Items]              
Warrant exercise price   $ 0.89     $ 0.30    
ESEG Promissory Notes [Member]              
Debt Instrument [Line Items]              
Notes payable       $ 2,100,000      
Debt interest rate       10.00%      
Debt maturity date       Mar. 01, 2022      
Debt Instrument, Periodic Payment Terms, Balloon Payment to be Paid           $ 675,000  
Debt discount       $ 535,394      
Loss on extinguishment of debt         $ 265,779    
ESEG Promissory Notes [Member] | Warrants [Member]              
Debt Instrument [Line Items]              
Warrants issued             2,015,000
Warrant exercise price             $ 0.30
Warrant term             5 years
ESEG Promissory Notes [Member] | Promissory Notes Payable 1 [Member]              
Debt Instrument [Line Items]              
Debt discount       279,516      
ESEG Promissory Notes [Member] | Other Long Term Liabilities [Member]              
Debt Instrument [Line Items]              
Notes payable   $ 453,178     422,409    
Debt discount   $ 221,822   $ 255,878 $ 252,591    
XML 35 R24.htm IDEA: XBRL DOCUMENT v3.21.2
STOCKHOLDERS' EQUITY (Details - Warrant activity) - Warrants [Member]
6 Months Ended 9 Months Ended
Jun. 30, 2021
$ / shares
shares
Jun. 30, 2021
$ / shares
shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Number of Warrants Outstanding, Beginning | shares   2,015,000
Weighted Average Exercise Price Outstanding, Beginning | $ / shares   $ 0.30
Weighted Average Remaining Life, beginning 4 years 2 months 26 days  
Number of Warrants Granted | shares   386,541
Weighted Average Exercise Price Granted | $ / shares   $ 3.63
Weighted Average Remaining Life, granted   4 years 6 months 29 days
Number of Warrants Cancelled | shares   0
Weighted Average Exercise Price Cancelled | $ / shares  
Number of Warrants Expired | shares   0
Weighted Average Exercise Price Expired | $ / shares  
Number of Warrants Exercised | shares   (66,000)
Weighted Average Exercise Price Exercised | $ / shares   $ (2.00)
Weighted Average Remaining Life Exercised   4 years 3 months 29 days
Number of Warrants Outstanding, Ending | shares 2,335,541 2,335,541
Weighted Average Exercise Price Outstanding, Ending | $ / shares $ 0.89 $ 0.89
Weighted Average Remaining Life, ending   4 years 3 months 14 days
Number of Warrants Exercisable, Ending | shares 2,335,541 2,335,541
Weighted Average Exercise Price Exercisable | $ / shares $ 0.89 $ 0.89
Weighted Average Remaining Life, exercisable   4 years 3 months 14 days
XML 36 R25.htm IDEA: XBRL DOCUMENT v3.21.2
STOCKHOLDERS' EQUITY (Details - Option Activity) - Stock Options [Member]
9 Months Ended
Jun. 30, 2021
$ / shares
shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Number of Options Outstanding, Beginning | shares 0
Weighted Average Exercise Price Outstanding, Beginning | $ / shares
Number of Options Granted | shares 2,512,348
Weighted Average Exercise Price Granted | $ / shares $ 1.63
Weighted Average Remaining Contractual Term Granted 9 years 1 month 2 days
Number of Options Forfeited | shares (220,000)
Weighted Average Exercise Price Forfeited | $ / shares $ 0.50
Weighted Average Remaining Contractual Term Cancellations and Forfeitures 9 years 9 months 21 days
Number of Options Expired | shares 0
Weighted Average Exercise Price Expired | $ / shares
Number of Options Exercised | shares 0
Weighted Average Exercise Price Exercised | $ / shares
Number of Options Outstanding, Ending | shares 2,292,348
Weighted Average Exercise Price Outstanding, Ending | $ / shares $ 1.73
Weighted Average Remaining Contractual Term Outstanding 8 years 7 months 9 days
Number of Options Exercisable, Ending | shares 144,348
Weighted Average Exercise Price Exercisable, Ending | $ / shares $ 0.96
Weighted Average Remaining Contractual Term Exercisable 8 years 8 months 15 days
XML 37 R26.htm IDEA: XBRL DOCUMENT v3.21.2
STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($)
2 Months Ended 3 Months Ended 4 Months Ended 5 Months Ended 7 Months Ended 9 Months Ended
Nov. 30, 2020
Jun. 30, 2021
Mar. 31, 2021
Dec. 31, 2020
Jan. 31, 2021
Feb. 28, 2021
Apr. 30, 2021
Jun. 30, 2021
Jun. 30, 2020
Class of Stock [Line Items]                  
Share-based compensation               $ 2,856,997 $ 0
Options vesting Period   4 years              
Common Stock Awards [Member]                  
Class of Stock [Line Items]                  
Share-based compensation   $ 501,716           1,940,249  
Share-based Payment Arrangement, Nonvested Award, Option, Cost Not yet Recognized, Amount   5,258,844           5,258,844  
Common Stock Warrants [Member]                  
Class of Stock [Line Items]                  
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Aggregate Intrinsic Value, Outstanding   47,110,395           47,110,395  
Common Stock Warrants [Member] | Asset Purchase Agreement [Member]                  
Class of Stock [Line Items]                  
[custom:WarrantFairValue-0]   57,252           $ 57,252  
Stock Options [Member]                  
Class of Stock [Line Items]                  
Stock granted under plan               2,512,348  
Share-based compensation   834,971           $ 2,856,998  
Share-based Payment Arrangement, Nonvested Award, Option, Cost Not yet Recognized, Amount   4,701,717           4,701,717  
Options granted     402,000 2,014,348          
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Intrinsic Value   $ 1,552,573           $ 1,552,573  
Stock Options [Member] | One To Four Years [Member]                  
Class of Stock [Line Items]                  
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Exercisable, Number       1,390,000          
Stock Options [Member] | Completion Of Ipo [Member]                  
Class of Stock [Line Items]                  
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Exercisable, Number       70,313          
Stock Options [Member] | Coo Goals [Member]                  
Class of Stock [Line Items]                  
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Exercisable, Number       200,000          
Stock Options [Member] | Hiring Of Cfo [Member]                  
Class of Stock [Line Items]                  
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Exercisable, Number       57,250          
Plan 2020 [Member]                  
Class of Stock [Line Items]                  
Stock authorized under plan   4,000,000           4,000,000  
Stock granted under plan               3,462,598  
Shares remaining under plan   537,402           537,402  
Plan 2020 [Member] | Stock Options [Member]                  
Class of Stock [Line Items]                  
Options granted   96,000              
Consultant [Member] | Stock Options [Member]                  
Class of Stock [Line Items]                  
Options granted     20,000            
Brokers [Member] | Common Stock Warrants [Member]                  
Class of Stock [Line Items]                  
[custom:WarrantFairValue-0]   $ 5,474,076           $ 5,474,076  
Consultants [Member] | Common Stock Warrants [Member]                  
Class of Stock [Line Items]                  
[custom:WarrantFairValue-0]   $ 8,819           $ 8,819  
Consultants [Member] | Stock Options [Member]                  
Class of Stock [Line Items]                  
Options granted       90,000          
Two Board Members [Member] | Stock Options [Member]                  
Class of Stock [Line Items]                  
Options granted     150,000            
Board Member [Member] | Stock Options [Member]                  
Class of Stock [Line Items]                  
Options granted       100,000          
IPO [Member]                  
Class of Stock [Line Items]                  
Proceeds from Issuance of Common Stock             $ 13,514,200    
Stock issued new, shares             2,400,000    
Payment of stock issuance costs             $ 885,800    
Proceeds from issuance of stock             $ 14,400,000    
IPO [Member] | Underwriter [Member]                  
Class of Stock [Line Items]                  
Warrants issued             168,000    
Warrant exercise price             $ 7.20    
Warrant term             5 years    
[custom:WarrantFairValue-0]             $ 5,474,076    
Common Stock [Member] | Four Consulting Agreements [Member]                  
Class of Stock [Line Items]                  
Stock awards granted 683,334                
Common Stock [Member] | December 2020 [Member]                  
Class of Stock [Line Items]                  
Proceeds from Issuance of Common Stock       $ 4,000,000          
Stock issued new, shares       2,000,000          
Payment of stock issuance costs       $ 351,929          
Common Stock [Member] | January 2021 [Member]                  
Class of Stock [Line Items]                  
Proceeds from Issuance of Common Stock         $ 750,042        
Stock issued new, shares         250,014        
Payment of stock issuance costs         $ 30,314        
Warrants [Member] | Consultant [Member]                  
Class of Stock [Line Items]                  
Warrants issued           4,166      
Warrant exercise price           $ 3      
Warrant term           5 years      
Consulting expense           $ 37,500      
Warrants [Member] | December 2020 [Member]                  
Class of Stock [Line Items]                  
Warrants issued       173,625          
Warrant exercise price       $ 2.00          
Warrant term       5 years          
Fair value of warrants granted       $ 228,500          
Warrants [Member] | January 2021 [Member]                  
Class of Stock [Line Items]                  
Warrants issued         8,750        
Warrant exercise price         $ 3        
Warrant term         5 years        
Fair value of warrants granted         $ 228,500        
XML 38 R27.htm IDEA: XBRL DOCUMENT v3.21.2
COMMITMENTS AND CONTINGENCIES (Details Narrative)
7 Months Ended
Apr. 30, 2021
USD ($)
$ / shares
shares
Consulting Agreement [Member]  
SaleOfStockLineItems [Line Items]  
Warrants converted, shares issued | shares 62,386
IPO [Member]  
SaleOfStockLineItems [Line Items]  
Payment of stock issuance costs | $ $ 885,800
IPO [Member] | Underwriters [Member]  
SaleOfStockLineItems [Line Items]  
Payment of stock issuance costs | $ $ 885,800
Warrants issued | shares 168,000
Warrant exercise price | $ / shares $ 7.20
Warrant term 5 years
XML 39 R28.htm IDEA: XBRL DOCUMENT v3.21.2
LOSS PER COMMON SHARE (Details) - USD ($)
3 Months Ended 9 Months Ended
Jun. 30, 2021
Mar. 31, 2021
Dec. 31, 2020
Jun. 30, 2020
Mar. 31, 2020
Dec. 31, 2019
Jun. 30, 2021
Jun. 30, 2020
Numerator                
Net income (loss) $ (3,957,611) $ (2,375,660) $ (2,750,731) $ (27,654) $ 5,073 $ (23,428) $ (9,084,002) $ (46,009)
Denominator                
Basic and Diluted weighted average common shares 10,549,765     7,340,421     10,650,966 7,340,421
Basic and diluted net income (loss) per common share $ (0.38)     $ (0.00)     $ (0.85) $ (0.01)
XML 40 R29.htm IDEA: XBRL DOCUMENT v3.21.2
TRANSACTION WITH RELATED PARTIES (Details Narrative) - USD ($)
Jun. 30, 2021
Sep. 30, 2020
Gogawi [Member]    
Related Party Transaction [Line Items]    
Due to related parties $ 155,228 $ 152,888
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