SHAREHOLDERS’ EQUITY

12 Months Ended

Sep. 30, 2025

Equity [Abstract]

SHAREHOLDERS’ EQUITY

NOTE 8        SHAREHOLDERS’ EQUITY

Reverse Stock Split

The Company’s shareholders authorized, and the Board of Directors approved a 1-for-10 reverse stock split, which became effective on June 18, 2024. Any fractional shares that would have otherwise resulted from the reverse stock split were rounded up to the nearest whole share. Accordingly, all references made to shares, per share, or common share amounts in the accompanying consolidated financial statements and applicable disclosures have been retroactively adjusted to reflect the reverse stock split. The reverse stock split did not change the par value of the common stock nor the authorized number of shares of common stock or any series of preferred stock.

Securities Purchase Agreement

In September 2025, we entered into a securities purchase agreement (the “Securities Purchase Agreement”) with certain accredited investors (the “Purchasers”) pursuant to which we sold and issued to the Purchasers in a private placement (the “Private Placement”) an aggregate of (i) 77,144,562 shares (the “Shares”) of common stock of the Company, par value $0.01 per share (the “Common Stock”), at an offering price of $18.50 and (ii) pre-funded warrants (the “Pre-Funded Warrants” and together with the Shares, the “Securities”) to purchase 12,031,364 shares of Common Stock (the “Pre-Funded Warrant Shares”) with $18.49999 of the exercise price per Pre-Funded Warrant that was pre-funded at closing (the “Per Share Purchase Price”). In the Private Placement, the Purchasers tendered U.S. dollars, USD Coin (USDC) or Tether (USDT) to the Company as consideration for the Securities. We received aggregate proceeds of approximately $1.65 billion, before deducting placement agent fees and other expenses.

In connection with the Private Placement, we entered into a registration rights agreement (the “Registration Rights Agreement”) with the Purchasers, providing for the registration for resale of the Shares, the Advisor Shares (as defined below), the Lead Investor Shares (as defined below), the Pre-Funded Warrant Shares and the shares of Common Stock underlying each of the Advisor Warrants and Lead Investor Warrants on an effective registration statement, pursuant to a registration statement which was filed on November 3, 2025 and amended on November 10, 2025 and November 14, 2025.

On October 10, 2025, we entered into a Waiver and Consent (the “Waiver and Consent”) with certain holders of the Company’s securities (who collectively beneficially own at least 50.1% of the then outstanding Registrable Securities, as defined in the Registration Rights Agreement). The Waiver and Consent waived the compliance of the Filing Date (as defined in the Registration Rights Agreement) and extended the deadline for the Company to file the initial resale registration statement with the Securities and Exchange Commission to November 10, 2025. Such registration statement was filed and automatically effective on November 3, 2025.

Galaxy Strategic Advisor Agreement

In September 2025, we entered into a Strategic Advisor and Lead Investor Agreement (the “Strategic Advisor Agreement”) with Galaxy Digital LP (“Galaxy”) pursuant to which we engaged Galaxy to serve as our strategic advisor with respect to the Private Placement. In consideration of Galaxy’s services, we issued to Galaxy, in addition to the Securities acquired by Galaxy pursuant to the Securities Purchase Agreement, 1,783,519 of Pre-Funded Warrants and 4,458,796 warrants (the “Advisor Warrants”) to purchase an amount of shares of our Common Stock (the “Advisor Shares”).

Lead Investor Agreement

In September 2025, we entered into a Lead Investor Agreement (the “Lead Investor Agreement”) with J Digital 6 Cayman Ltd. (“Jump Crypto”) and Multicoin Capital Master Fund, LP (“Multicoin,” and together with Galaxy and Jump Crypto, the “Sponsors”) to secure the commitment of Jump Crypto and Multicoin in the Private Placement. In consideration of Jump Crypto and Multicoin’s participation, we issued to each of Jump Crypto and Multicoin, in addition to the Securities acquired by Jump Crypto and Multicoin pursuant to the Securities Purchase Agreement, 1,783,519 shares of our Common Stock (the “Lead Investor Shares”) and 4,458,796 warrants to purchase an amount of shares of the Common Stock (the “Lead Investor Warrants”). Pursuant to the Lead Investor Agreement, for so long as Multicoin continues to beneficially own at least 5% of the Company’s issued and outstanding shares of Common Stock, Multicoin has the right to nominate one individual for election to the Board of Directors, who shall also be chairperson of the Board of Directors (such nominee, the “Investor Designee”), and the Company agreed to use its reasonable best efforts to cause the Investor Designee to be elected to the Board of Directors (including recommending that the Company’s shareholders vote in favor of the election of the Investor Designee).

Registered Direct Offering

On August 11, 2025, the Company entered into subscription agreements with six investors pursuant to which it agreed to issue and sell, in a registered direct offering (the “Offering”), an aggregate of approximately 263,000 shares of its common stock at a price of $8.50 per share. The Offering closed on August 11, 2025 and the aggregate gross proceeds from the Offering were approximately $2,238,000.

Preferred Stock

Series A-1 Convertible Preferred Stock

In connection with the Accounts Payable Conversion Agreements with Forward China (see Note 14), the Company filed three Certificates of Amendment to the Certificate of Incorporation (the “COD”) designating 6,700 shares of Series A-1 Convertible Preferred Stock (the “Series A-1”), with a stated value of $1,000 per share (the “Stated Value”).

The holders of the Series A-1 have no voting rights and rank senior to all classes or series of the Company’s common stock with respect to the distribution of assets upon liquidation, dissolution, or winding up. Subject to a 19.9% Share Cap (as defined in the COD) the Series A-1 shall be convertible into a number of shares of the Company’s common stock as determined by (i) multiplying the number of shares to be converted by the Stated Value, (ii) adding the result of all accrued and accumulated and unpaid dividends on such shares to be converted, and then (iii) dividing the result by the conversion price of $7.50, subject to adjustment as defined in the COD. The Series A-1 is not redeemable.

In August and September 2025, all 4,925 outstanding shares of the Series A-1 were converted into 656,666 shares of the Company’s common stock. Following this conversion, no shares of the Series A-1 remain outstanding.

Series B Convertible Preferred Stock

On May 21, 2025, the Company filed a Certificate of Amendment to the Certificate of Incorporation (the “COD”) designating 1,000,000 shares of Series B Convertible Preferred Stock (the “Series B”), with a par value of $0.01 per share and a stated value of $1.00 per share. The Series B shares: (i) accrued dividends at 10% per annum, payable quarterly in arrears in cash, provided that the Company may elect to pay dividends in common stock or by increasing the stated value if specified equity conditions are met (as defined in the COD), (ii) were convertible into common stock at $4.50 per share, subject to customary anti-dilution and other adjustments as set forth in the COD, (iii) were mandatorily convertible if certain conditions are met, (iv) had liquidation rights equal to the greater of 125% of the conversion amount and the amount the holder would have received if the holder converted the shares into common stock immediately prior to liquidation, (v) were not redeemable, (vi) had such voting rights as required by New York law, including class voting rights on matters affecting the Series B rights and preferences and (vii) had senior rights to all classes of common stock with respect to dividends, distributions, and liquidation preferences. The Series B shares contained certain beneficial ownership limitations and until August 8, 2025, were subject to a maximum number of shares of common stock that could be issued without triggering shareholder approval requirements under the Nasdaq Stock Market rules. On August 8, 2025, the Company received shareholder approval to issue shares of the Series B in excess of these limitations. Dividends through September 30, 2025, were capitalized by increasing the stated value of each share of the Series B.

On May 23, 2025, the Company entered into a Preferred Stock Purchase Agreement (the “PS Agreement”) and related Registration Rights Agreement (the “Series B Registration Rights Agreement”) with two accredited investors (the “Series B Investors”) whereby the Company granted the investors an aggregate of 1,000,000 shares of the Series B and warrants to purchase an additional 111,111 shares of common stock (the “Series B Warrants”) in exchange for $1,000,000. The PS Agreement contained restrictions on the Company’s ability to incur debt, issue additional preferred shares, enter into a change of control transaction or make restricted payments without prior written consent of the investors. These restrictions were terminated pursuant to the Waiver and Leak-out Agreement described below. The Company paid third-party fees of $66,500 associated with this agreement, of which $29,000 related to the preferred stock portion of the agreement and has been deducted from the proceeds and recorded as a reduction of additional paid-in capital, and $37,500 related to the warrants and has been recorded as a component of general and administrative expenses on the consolidated financial statements at September 30, 2025.

In September 2025, in connection with the Securities Purchase Agreement, the Company entered into a waiver and leak-out agreement (the “Waiver and Leak-out Agreement”) with the Series B Investors, pursuant to which the Series B Investors agreed to (i) the termination, waiver or amendment of all covenants and provisions to forgo all of their rights under the Series B Warrants, the PS Agreement and the Series B Registration Rights Agreement, including a general release from any liability for prior non-performance, and (ii) provide conversion notices and such other documentation reasonably requested by the Company in order to complete the conversion of all of the Series B into shares of common stock. On September 10, 2025, all outstanding shares of the Series B were converted into 228,765 shares of the Company’s common stock. Following the conversion, no shares of Series B remain outstanding.

In connection with the Waiver and Leak-out Agreement, the Company granted the Series B Investors the right to purchase up to $33,000,000 worth of shares of Common Stock at a purchase price of $18.50 per share; and has included for registration on the resale registration statement filed November 3, 2025, on behalf of the Series B Investors as a selling shareholder, all shares of Common Stock previously underlying the Series B Stock and Series B Warrants held by them. In September 2025, the Series B Investors purchased 1,783,783 shares of the Company’s common stock in connection with this agreement.

Warrants

Series B Warrants

In connection with the PS Agreement, the Company issued warrants to purchase 111,111 shares of its common stock with an exercise price of $6.50 per share and an expiration date of May 23, 2030 (the “Series B Warrants”). At the time of grant, and through August 8, 2025, the warrants had been classified as a liability because the nature of certain settlement provisions prevented them from meeting the fixed-for-fixed equity classification criteria in ASC 815, “Derivatives and Hedging.” On August 8, 2025, upon receiving shareholder approval to issue shares of the Company’s common stock in excess of the Nasdaq 19.9% (exchange cap) limitations upon exercise of the Series B Warrants, these warrants met the requirements to be classified as equity. The fair value of the warrants was measured on the grant date and was remeasured every reporting period through August 8, 2025, with the resulting gain or loss from the change in fair value recorded as a component of other income/expense on the consolidated financial statements. Upon receiving the aforementioned shareholder approval, the Series B Warrants were reclassified to equity and are no longer subject to fair value measurement. A final Black-Scholes valuation was performed prior to reclassifying the Series B Warrants to equity. The fair value of the warrants was estimated using a Black-Scholes valuation methodology using the assumptions in the following table, which are categorized within Level 3 of the fair value hierarchy. The expected term represents the remaining contractual term of the warrants. The expected volatility is based on the historical price of the Company’s common stock over the most recent periods commensurate with the expected term of the warrants. The risk-free interest rate is based on the implied yield of U.S. Treasury zero-coupon issues with a remaining term equivalent to the warrants’ expected term. The Company historically has not paid any dividends on its common stock and has no intention to do so in the foreseeable future. 

	May 23, 2025		August 8, 2025
Expected term (years)		5.0		4.8
Expected volatility		76.75%		77.40%
Risk free interest rate		4.08%		3.84%
Expected dividends		0%		0%

A rollforward of the warrant liability is follows:

Warrant liability at May 23, 2025	563,111
Change in fair value of warrant liability	658,332
Reclassification of warrant liability to equity	(1,221,443	)
Warrant liability at September 30, 2025	–

Pre-Funded Warrants

The unfunded exercise price of each Pre-Funded Warrant equals $0.00001 per underlying Pre-Funded Warrant Share. The exercise price and the number of shares of Common Stock issuable upon exercise of each Pre-Funded Warrant is subject to appropriate adjustment in the event of certain stock dividends, stock splits, stock combinations, or similar events affecting our Common Stock. The Pre-Funded Warrants are exercisable in cash or by means of a cashless exercise and will not expire until the date such Pre-Funded Warrants are fully exercised. The Pre-Funded Warrants may not be exercised if the aggregate number of shares of Common Stock beneficially owned by the holder thereof (together with its affiliates) immediately following such exercise would exceed a specified beneficial ownership limitation; provided, however, that a holder may increase or decrease the beneficial ownership limitation by giving notice to the Company (61 days’ notice for increases), but not to any percentage in excess of 9.99%. In September 2025, 950,282 of the Pre-Funded Warrants were exercised via the cashless exercise provisions of the related agreement and the Company issued 950,281 shares of its common stock in connection with such exercise.

Advisor Warrants

The exercise price per share of the Advisor Warrants shall equal $0.01 per share and shall be exercisable as follows: (1) one-third (1/3) on and after the first date on which the closing trading price of the Company’s Common Stock on its principal stock exchange is equal to or greater than 150% of the cash Per Share Purchase Price for 20 out of 30 trading days following November 3, 2025 (the effective date of the resale registration statement); (2) one-third (1/3) on and after the first date on which the closing trading price of the Company’s Common Stock on its principal stock exchange is equal to or greater than 200% of the cash Per Share Purchase Price for 20 out of 30 trading days following November 3, 2025; and (3) one-third (1/3) on and after the first date on which the closing trading price of the Company’s Common Stock on its principal stock exchange is equal to or greater than 250% of the cash Per Share Purchase Price for 20 out of 30 trading days following November 3, 2025. The Advisor Warrants will not expire until the date such warrants are fully exercised.

Lead Investor Warrants

The exercise price per share of the Lead Investor Warrants shall equal $0.01 per share and shall be exercisable as follows: (1) one-third (1/3) on and after the first date on which the closing trading price of the Company’s Common Stock on its principal stock exchange is equal to or greater than 150% of the cash Per Share Purchase Price for 20 out of 30 trading days following November 3, 2025; (2) one-third (1/3) on and after the first date on which the closing trading price of the Company’s Common Stock on its principal stock exchange is equal to or greater than 200% of the cash Per Share Purchase Price for 20 out of 30 trading days following November 3, 2025; and (3) one-third (1/3) on and after the first date on which the closing trading price of the Company’s Common Stock on its principal stock exchange is equal to or greater than 250% of the cash Per Share Purchase Price for 20 out of 30 trading days following November 3, 2025. The Lead Investor Warrants will not expire until the date such warrants are fully exercised.

Below is a rollforward of warrant activity for Fiscal 2025: 

	Number of Warrants			Weighted Average Exercise Price
Warrants outstanding at September 30, 2024		7,500		$	7.50
Warrants granted		27,302,382		$	0.03
Warrants exercised		(950,282	)	$	0.00
Warrants outstanding at September 30, 2025		26,359,600		$	0.03

Equity Line of Credit

On May 16, 2025, the Company entered into a Securities Purchase Agreement (the “ELOC”) and related Registration Rights Agreement with one of the Series B Investors pursuant to which the Company had the right, in its sole discretion, to sell, and the Series B Investor agreed to purchase, shares of the Company’s common stock having an aggregate value of up to $35 million, subject to certain limitations and conditions set forth in the underlying agreement. The Company had control over the timing and amount of any sales of common stock under this agreement. In connection with the execution of the ELOC, the Company issued 26,000 commitment shares to the Series B Investor and paid third-party fees of $71,000, which have been recorded to shareholders equity as a reduction of the related proceeds on the consolidated financial statements as of September 30, 2025. Pursuant to the terms of the ELOC, the Company could issue and sell shares to the Series B Investor at prices discounted below the then-current market price of the Company’s common stock.

On June 10, 2025, the Company filed a registration statement to register shares of common stock issuable under the ELOC. The registration statement was declared effective by the SEC on June 20, 2025. In Fiscal 2025, the Company received gross proceeds of $2,432,000 from the sale of 248,000 shares of Common Stock under the ELOC. In September 2025, the Company and the Series B Investor mutually agreed to terminate the ELOC.

At-the Market Offering

On September 16, 2025, the Company entered into a Controlled Equity Offering Sales Agreement (the “ATM”) with Cantor Fitzgerald & Company (“Cantor”), as principal and/or agent, pursuant to which it may offer and sell, from time to time, through Cantor, shares of its common stock, having an aggregate offering price of up to $4 billion. Shares will be issued and sold pursuant to the Company’s effective registration statement on Form S-3 as previously filed with, and declared effective by, the SEC. The Company filed a prospectus supplement, dated September 16, 2025, with the SEC in connection with the offer and sale of shares under the ATM. We will pay Cantor a commission of up to 3% of the gross proceeds from each sale of shares under the ATM. In Fiscal 2025, we sold 124,000 shares of common stock under the ATM for gross proceeds of $4,064,000 and incurred fees related to the ATM of $839,000, of which $102,000 have been recorded as a reduction to additional paid-in capital and $737,000 have been recorded as deferred financing costs and presented as a component of other assets on the consolidated financial statements.

Nasdaq

In July 2023, the Company was notified by Nasdaq that it was not in compliance with Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Price Rule”). Thereafter, in February 2024, the Company was notified that it was not in compliance with Nasdaq Listing Rule 5550(b)(1) (the “Shareholders’ Equity Rule”) (collectively, with the Minimum Bid Price Rule, the “Minimum Requirements”). In April 2024, the Company presented a plan of action to the Nasdaq Hearings Panel to meet compliance with the Minimum Requirements. As a result of the reverse stock split effected in June 2024 and the entrance into the first Accounts Payable Conversion Agreement (described in Note 14), the Company regained compliance with the Minimum Requirements in July 2024 and was formally notified by Nasdaq that the Minimum Requirements were met. Until July 24, 2025, the Company was subject to a Nasdaq “Panel Monitor” which provided that in the event the Company fails to satisfy the Shareholders’ Equity Rule (not the Minimum Bid Price Rule) during the monitoring period, the Company would be required to request a hearing before the Panel in order to maintain its listing rather than taking the interim step of submitting a compliance plan for the Listing Qualifications Staff’s review or receiving any otherwise applicable grace period.

On February 21, 2025, the Company was notified by Nasdaq that due to its reported Shareholders’ Equity of $2,279,297 at December 31, 2024, it was not in compliance with the Shareholders’ Equity Rule. Due to the Panel Monitor, the Company was not eligible for any grace period and Nasdaq determined the Company’s common stock would be scheduled for delisting from Nasdaq. On February 27, 2025, the Company requested a hearing on this matter with the Panel, which stayed any trading suspension or delisting of the Company’s common stock until the completion of the hearings process.

As a result of the fourth conversion agreement with Forward China (see Note 14), the Company regained compliance with the Shareholders’ Equity Rule in March 2025 and was formally notified by Nasdaq in April that it was in compliance with all applicable continued listing standards and that the scheduled hearing had been canceled.

Shares Reserved for Future Issuance

At September 30, 2025, the Company had a total of 128,681,429 shares reserved for future issuance as follows: (i) 102,440,439 shares related to the ATM, (ii) 11,081,083 related to the Pre-Funded Warrants, (iii) 6,242,315 related to the Advisor Warrants and (iv) 8,917,592 related to the Lead Investor Warrants.

Tokenization of Common Stock

In September 2025, the Company entered into a digital transfer agent agreement with Superstate Services LLC (“Superstate”) as its co-transfer agent, to give shareholders the ability to tokenize their holdings of the Company’s common stock on the Solana blockchain. Any tokenized shares are recorded and maintained by Superstate and represent the same ownership interests as the corresponding shares of the Company’s common stock. At September 30, 2025, no shares of the Company’s common stock had been tokenized.