AIRWARE LABS CORP.

CIK:0001500123|SEC Filings

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	3 Months Ended		9 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Income Statement [Abstract]
Revenues, net	$ 5,022,375	$ 4,931,322	$ 15,689,261	$ 17,755,519
Cost of revenues	2,203,560	3,341,367	6,530,438	11,089,560
Gross profit	2,818,815	1,589,955	9,158,823	6,665,959
Operating expenses
Professional fees and outside services	378,864	993,452	2,392,382	2,207,618
Payroll and employee related expenses	2,653,133	2,683,722	7,045,596	7,889,672
Sales and marketing	322,193	207,213	995,164	1,260,551
Depreciation and amortization	378,155	439,052	1,135,519	1,320,664
Other operating expenses	1,883,945	1,114,323	3,269,109	2,747,158
Impairment loss	168,571		168,571
Provision for (recovery of) bad debt				(5,000)
Total expenses	5,784,861	5,437,762	15,006,341	15,420,663
Loss from operations	(2,966,046)	(3,847,807)	(5,847,518)	(8,754,704)
Other income (expense)
Interest expense	(2,950,462)	(1,625,155)	(6,719,625)	(3,932,918)
Other income (expense)			3,485	318
Total other income (expense), net	(2,950,462)	(1,625,155)	(6,716,140)	(3,932,600)
Net loss, before income tax provision (benefit)	(5,916,508)	(5,472,962)	(12,563,658)	(12,687,304)
Income tax provision (benefit)	(1,435)	4,624	5,924	7,948
Net loss	(5,915,073)	(5,477,586)	(12,569,582)	(12,695,252)
Less: Net income (loss) attributable to non-controlling interest	(3,879)	(7,109)	16,017	(1,683)
Net loss attributable to Item 9 Labs Corp.	$ (5,911,194)	$ (5,470,477)	$ (12,585,599)	$ (12,693,569)
Basic net loss per common share	$ (0.06)	$ (0.06)	$ (0.13)	$ (0.13)
Basic weighted average common shares outstanding	101,840,276	96,162,616	100,565,818	95,446,846
Diluted net loss per common share	$ (0.06)	$ (0.06)	$ (0.13)	$ (0.13)
Diluted weighted average common shares outstanding	101,840,276	96,162,616	100,565,818	95,446,846

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	9 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Operating Activities:
Net loss	$ (12,569,582)	$ (12,695,252)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	246,867	217,363
Amortization of intangible assets	888,652	1,103,301
Amortization of right of use assets	182,946	89,844
Amortization of debt discounts	1,503,304	2,311,783
Loss on impairment	168,570
Common stock issued for services	296,000	498,983
Stock based compensation expense	2,372,982	2,533,535
Recovery of bad debt		(5,000)
Employee retention credits received	(952,805)
Loss on disposal of fixed assets	137,109	10,841
Changes in operating assets and liabilities:
Accounts receivable	(381,746)	856,776
Inventory	565,619	2,276,205
Prepaid expenses and other assets	137,032	(339,994)
Deposits	42,490	(86,604)
Accounts payable	801,731	2,107,137
Accrued payroll and payroll taxes	547,172	(832,080)
Income tax payable	5,924	7,948
Accrued interest	3,975,146	542,841
Accrued expenses	1,290,276	(316,760)
Deferred revenue	32,505	(214,994)
Operating lease liability	(172,111)	(82,021)
Net Cash Used in Operating Activities	(881,919)	(2,016,148)
Investing Activities:
Cash paid for acquisition		(140,726)
Purchases of property, equipment and construction in progress	(68,176)	(2,918,584)
Cash received for note receivable		5,000
Cash received from construction escrow accounts		816,227
Cash acquired in acquisition		6,143
Cash paid to acquisition escrow accounts		(406,932)
Purchase of license		(1,130,872)
Net Cash Used in Investing Activities	(68,176)	(3,769,744)
Financing Activities:
Proceeds from the sale of common stock		555,911
Costs for sale of common stock		(12,733)
Payment of debt discount	(55,000)	(50,750)
Proceeds from the issuance of debt	1,834,183	7,282,763
Payment of debt	(731,296)	(3,002,097)
Net Cash Provided by Financing Activities	1,047,887	4,773,094
Net Increase (Decrease) in Cash	97,792	(1,012,798)
Cash and cash equivalents - Beginning of Period	85,637	1,454,460
Cash and cash equivalents - End of Period	183,429	441,662
Supplemental disclosure of cash flow information:
Interest paid in cash	995,812	3,855,724
Income taxes paid in cash
Supplemental disclosure of non-cash investing and financing activities:
Stock issued for acquisitions		65,000
Stock issued for acquisition of a license	93,611	336,000
Stock and warrants issued for debt and acquisition	289,730	797,453
Non-controlling interest		15,633
Stock issuance costs paid in stock		89,645
Debt issued for acquisition of a license		200,000
Debt proceeds used to pay debt discounts	327,817	80,000
Transfer of accrued interest to debt	1,029,837	1,762
Land purchased with escrow funds and deposit	6,719,625	3,000,000
Stock issued to pay accounts payable and prepay expenses	296,000	292,500
Operating lease right of use asset and liability	283,861	934,098
Cancellation of operating lease right of use asset and liability	673,622
Issuance of debt to repay bank overdraft	185,949
Beneficial conversion feature on convertible debt	5,000	495,047
Construction in progress paid with escrow funds	2,933,156	6,426,063
Stock issued for conversion of debt	309,579
Accrued debt discount fees	30,000	75,000
Debt discount amortization capitalized to construction in progress	1,041,448	2,620,476
Accounts payable and accrued liabilities capitalized in construction in progress	2,856,917	612,158
Debt proceeds used to fund other assets	2,500,000
Accounts payable converted debt	$ 294,837

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($)	Jun. 30, 2023	Sep. 30, 2022
Current Assets:
Cash and cash equivalents	$ 183,429	$ 85,637
Accounts receivable, net	968,016	586,270
Inventory	1,898,603	2,464,222
Prepaid expenses and other current assets	297,265	417,096
Total current assets	3,347,313	3,553,225
Property and equipment, net	24,602,289	21,019,724
Right of use asset	365,980	938,687
Construction escrow deposits	4,784,752	7,717,908
Deposits	44,114	86,604
Other assets	3,138,397	655,598
Assets held for sale	6,815,000	6,815,000
Intangible assets, net	10,852,835	11,741,487
Goodwill	58,064,816	58,233,386
Total Assets	112,015,496	110,761,619
Current Liabilities:
Accounts payable	6,852,306	6,422,196
Accrued payroll and payroll taxes	1,680,418	2,086,051
Accrued interest	8,387,582	3,070,415
Accrued expenses	2,048,325	3,328,222
Deferred revenue, current portion	174,997	219,992
Notes payable, current portion, net of discounts	29,522,607	15,924,033
Income tax payable	19,145	13,221
Operating lease liability, current portion	247,586	271,573
Convertible notes payable, net of discounts	4,380,000	3,750,000
Liabilities related to assets held for sale	5,500,000	5,500,000
Total current liabilities	58,812,966	40,585,703
Deferred revenue, net of current portion	413,359	335,859
Operating lease liability, net of current portion	144,867	682,752
Notes payables, net of current portion and discounts		7,216,710
Total liabilities	59,371,192	48,821,024
Stockholders' Equity:
Common stock, par value $.0001 per share, 2,000,000,000 shares authorized; 114,662,271 and 109,950,509 shares issued and 102,362,271 and 97,650,509 shares outstanding at June 30, 2023 and September 30, 2022	11,421	10,995
Additional paid-in capital	143,689,979	140,417,114
Accumulated deficit	(77,602,297)	(65,016,698)
Treasury stock	(13,450,000)	(13,450,000)
Total Item 9 Labs Corp. Stockholders' Equity	52,649,103	61,961,411
Non-controlling interest	(4,799)	(20,816)
Total Stockholders' Equity	52,644,304	61,940,595
Total Liabilities and Stockholders' Equity	$ 112,015,496	$ 110,761,619