10-Q

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, 2023

Commission File Number: 000-26533

MASTERMIND, INC.

(Exact name of registrant as specified in its charter)

Nevada	82-3807447
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
2221 Peachtree Rd. NE, Suite D-134, Atlanta, GA	30309
(Address of principal executive offices)	(Zip Code)

(678) 420-4000 

(Registrant’s telephone number, including area code) 

Securities registered pursuant to Section 12(b) of the Act: None

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, 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 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 ☒

As of August 14, 2023, there were 34,505,520 shares of the registrant’s Common Stock outstanding.

Mastermind, Inc.

Table of Contents

Form 10-Q

		Page
Part I	Financial Information
Item 1	Consolidated Financial Statements (unaudited)
	Consolidated Balance Sheets at June 30, 2023 and September 30, 2022 (Unaudited)	3
	Consolidated Statements of Operations for the three and nine months ended June 30, 2023 and 2022 (Unaudited)	4
	Consolidated Statements of Stockholders’ Equity for the three and nine months ended June 30, 2023 and 2022 (Unaudited)	5
	Consolidated Statements of Cash Flows for the nine months ended June 30, 2023 and 2022 (Unaudited)	6
	Notes to Consolidated Financial Statements (Unaudited)	7
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	12
Item 3	Quantitative and Qualitative Disclosures About Market Risk	17
Item 4	Controls and Procedures	17
Part II	Other Information
Item 1	Legal Proceedings	18
Item 1A	Risk Factors	18
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	18
Item 3	Defaults Upon Senior Securities	18
Item 4	Mine Safety Disclosures	18
Item 5	Other Information	18
Item 6	Exhibits	19
Signatures		20

2

Mastermind, Inc.

Consolidated Balance Sheets

(Unaudited)

	June 30,		September 30,
	2023		2022
ASSETS
Current assets:
Cash and cash equivalents	$	1,189,583	$	1,735,140
Accounts receivable		864,311		349,233
Unbilled receivables		1,420,071		1,137,078
Prepaid expenses and other current assets		43,374		27,451
Income tax receivable		77,477		77,477
Total Current Assets		3,594,816		3,326,379
Right-of-use asset, net		-		153,816
Property and equipment, net		38,491		52,004
TOTAL ASSETS	$	3,633,307	$	3,532,199
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	110,379	$	109,263
Unearned revenues		271,271		328,081
Lease obligation, current		-		114,389
Total Current Liabilities		381,650		551,733
Lease obligation, net of current portion		-		39,427
Deferred tax liabilities		297,619		246,705
Total Liabilities		679,269		837,865
Stockholders' Equity
Preferred stock: 1,000,000 shares authorized; $0.001 par value; no shares issued and outstanding		-		-
Common stock: 125,000,000 shares authorized; $0.001 par value;
34,505,520 shares issued and outstanding		34,506		34,506
Additional paid in capital		62,865		62,865
Retained earnings		2,856,667		2,596,963
Total Stockholders' Equity		2,954,038		2,694,334
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	3,633,307	$	3,532,199

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

3

Mastermind, Inc.

Consolidated Statements of Operations

(Unaudited)

	Three Months Ended				Nine Months Ended
	June 30,				June 30,
	2023		2022		2023			2022
Revenues	$	1,319,337	$	1,456,013	$	3,498,142		$	3,391,045
Cost of revenues		533,278		392,618		1,379,011			1,117,313
Gross profit		786,059		1,063,395		2,119,131			2,273,732
Operating Expenses:
Management consulting		210,725		220,725		632,075			514,675
Wages and benefits		204,585		150,927		581,438			523,473
General and administrative		164,643		243,947		497,044			669,442
Total Operating Expenses		579,953		615,599		1,710,557			1,707,590
Income from operations		206,106		447,796		408,574			566,142
Other Income (Expense)
Interest income		6,559		930		11,837			2,239
Loss on disposal of property and equipment		-		-		(8,938	)		-
Total other income		6,559		930		2,899			2,239
Income before provision for income taxes		212,665		448,726		411,473			568,381
Provision for income taxes		57,421		114,839		151,769			118,814
Net income	$	155,244	$	333,887	$	259,704		$	449,567
Basic and diluted income per common share
Basic and diluted	$	0.00	$	0.01	$	0.01		$	0.01
Weighted average number of common shares outstanding
Basic and diluted		34,505,520		34,505,520		34,505,520			34,505,520

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

4

Mastermind, Inc.

Consolidated Statements of Stockholders’ Equity

Three and Nine Months Ended June 30, 2023 and 2022

(Unaudited)

	Common Stock				Common Stock to be issued				Additional Paid in		Retained			Total
	Shares		Amount		Shares		Amount		Capital		Earnings			Equity
Balance - September 30, 2022		34,505,520	$	34,506		-	$	-	$	62,865	$	2,596,963		$	2,694,334
Net loss		-		-		-		-		-		(13,658	)		(13,658	)
Balance - December 31, 2022		34,505,520		34,506		-		-		62,865		2,583,305			2,680,676
Net income		-		-		-		-		-		118,118			118,118
Balance - March 31, 2023		34,505,520		34,506		-		-		62,865		2,701,423			2,798,794
Net income		-		-		-		-		-		155,244			155,244
Balance - June 30, 2023		34,505,520	$	34,506		-	$	-	$	62,865	$	2,856,667		$	2,954,038

	Common Stock				Common Stock to be issued						Additional Paid in			Retained		Total
	Shares		Amount		Shares			Amount			Capital			Earnings		Equity
Balance - September 30, 2021		34,505,520	$	34,506		135,000		$	135		$	76,230		$	1,908,244	$	2,019,115
Common stock to be issued for services		-		-		45,000			45			4,455			-		4,500
Net income		-		-		-			-			-			46,435		46,435
Balance - December 31, 2021		34,505,520		34,506		180,000			180			80,685			1,954,679		2,070,050
Common stock to be issued for services		-		-		45,000			45			4,455			-		4,500
Net income		-		-		-			-			-			69,245		69,245
Balance - March 31, 2022		34,505,520		34,506		225,000			225			85,140			2,023,924		2,143,795
Reversal of common stock to be issued for services		-		-		(225,000	)		(225	)		(22,275	)		-		(22,500	)
Net income		-		-		-			-			-			333,887		333,887
Balance - June 30, 2022		34,505,520	$	34,506		-		$	-		$	62,865		$	2,357,811	$	2,455,182

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

5

Mastermind, Inc.

Consolidated Statements of Cash Flows

(Unaudited)

	Nine Months Ended
	June 30,
	2023			2022
Cash flows from operating activities:
Net income	$	259,704		$	449,567
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
(Reversal of) Stock based compensation		-			(13,500	)
Depreciation		13,623			16,643
Loss on disposal of property and equipment		8,938			-
Deferred tax		50,914			146,074
Changes in operating assets and liabilities:
Accounts receivable		(515,078	)		797,145
Unbilled receivables		(282,993	)		(456,447	)
Prepaid expenses and other current assets		(15,923	)		(34,387	)
Accounts payable and accrued expenses		1,116			(97,193	)
Accounts payable and accrued expenses, related party		-			20,000
Unearned revenues		(56,810	)		78,934
Net cash provided by (used in) operating activities		(536,509	)		906,836
Cash flows from investing activities:
Proceeds from sale of equipment		1,200			-
Purchase of property and equipment		(10,248	)		(8,520	)
Net cash used in investing activities		(9,048	)		(8,520	)
Net change in cash		(545,557	)		898,316
Cash, beginning of period		1,735,140			1,075,188
Cash, end of period	$	1,189,583		$	1,973,504
Supplemental Cash Flow Information
Income taxes paid (refunded)	$	102,272		$	(18,228	)
Interest paid	$	-		$	-

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

6

Mastermind, Inc.

Notes to Consolidated Financial Statements

(Unaudited)

1. Business

Mastermind, Inc. (the “Company”, “we”, “us”, or the “organization”) is an involvement marketing service agency that designs, creates and develops branding and marketing campaigns, primarily for large corporate clients with well-known brands. We specialize in customer conversion initiatives that we believe facilitate the involvement of more of the “right customers” with the brands of our clients. We focus on converting prospects to customers. Our programs can take on various forms, including creating and managing content marketing, influencer marketing, social marketing/community management, digital issues management communications, promotions, Augmented Reality Marketing, and UX Analytics & Digital Intelligence.

2. Interim Financial Statements and Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information pursuant to Rule 8-03 of Regulation S-X. Accordingly, these unaudited consolidated financial statements do not include all of the information and disclosures required by U.S. GAAP for complete financial statements. In the opinion of management, the accompanying unaudited consolidated financial statements include all adjustments (consisting only of normal recurring adjustments), which we consider necessary, for a fair presentation of those financial statements. The results of operations for the three and nine months ended June 30, 2023 and cash flows for the nine months ended June 30, 2023, may not necessarily be indicative of results that may be expected for any succeeding period or for the entire fiscal year. These consolidated financial statements should be read in conjunction with our audited financial statements included in our Annual Report on Form 10-K as of and for the fiscal year ended September 30, 2022 as filed with the Securities and Exchange Commission.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and judgments, which are evaluated on an ongoing basis, and that affect the amounts reported in our unaudited financial statements and accompanying notes. Management bases its estimates on historical experience and on various other assumptions that it believes are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the amounts of revenues and expenses that are not readily apparent from other sources. Actual results could differ from those estimates and judgments. In particular, significant estimates and judgments include those related to revenue recognition, allowance for doubtful accounts, useful lives and valuation of property and equipment.

There have been no material changes in the Company’s significant accounting policies during the three and nine months ended June 30, 2023, as compared to the significant accounting policies described in the Company’s Annual Report on Form 10-K for the year ended September 30, 2022.

Cash and Cash Equivalents

Cash includes cash on hand. Cash equivalents include short-term, highly liquid investments, with a remaining maturity at the date of purchase of three months or less for which the risk of changes in value is considered to be insignificant. We have taken the initiative to protect funds by investing into a money market fund that holds highly liquid short-term investments managed by the bank.  As of June 30, 2023 and September 30, 2022, cash and cash equivalents consisted of the following:

	June 30,		September 30,
	2023		2022
Cash	$	384,143	$	1,030,707
Money Market Funds		805,440		704,433
	$	1,189,583	$	1,735,140

Periodically, the Company may carry cash balances at financial institutions more than the federally insured limit of $250,000 per institution. The amount in excess of the FDIC insurance as of June 30, 2023, was approximately $121,000. The Company has not experienced losses on these accounts and management believes, based upon the quality of the financial institutions, that the credit risk with regard to these deposits is not significant.

Reclassifications

Certain prior period amounts have been reclassified to conform with the current period presentation.

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3. Related Party Transactions

On January 3, 2012, we entered into a perpetual license agreement (the “Perpetual License”) with Mastermind Marketing, Inc. (the “Licensor”), which provides for licenses of trademarks, internet domains, and certain intellectual property as defined in the Perpetual License. The Licensor is one of our members and its chief executive officer is also our chief executive officer. The Perpetual License, which may be terminated at any time by either party, is effective January 3, 2012 and provides for aggregate cash payments of $2,100,000 over the calendar years from 2019 through 2039 with no further payments required after December 31, 2039. The Company has recorded amortized expenses related to the license of $27,000 and $69,000 for the three and nine months ended June 30, 2023 and $15,000 and $45,000 for the three and nine months ended June 30, 2022 (Note 5).

On January 3, 2014, we entered into a commercial lease agreement (the “Lease”) with 1450 West Peachtree, LLC, a Georgia limited liability company (the “Landlord”), for the lease of our corporate facility in Atlanta, Georgia. The manager of the Landlord is also our chief executive officer. The term of the original lease was for 10 years from the date of the agreement. During the period ended December 31, 2022 the Company gave notice to our landlord for our leased office space to terminate the agreement as of December 31, 2022 with no payments due thereafter. The landlord agreed to the termination of the lease with no penalties and no additional payments required. Through the period of COVID restrictions, we enhanced our remote work tools, technologies, and practices, working with our team to continue to serve our customers and complete projects.  These remote tools and technologies have broadened our available talent pool and removed travel times for our team. The Company has adopted a fully remote work environment and no replacement office space is planned for.  During the three and nine months ended June 30, 2023 we made lease payments of $0 and $41,422, respectively, and for the three and nine months ended June 30, 2022 $41,423 and $112,845 in satisfaction of our obligation pursuant to the Lease (Note 6).

During the three and nine months ended June 30, 2023, and 2022, we made payments to our three members pursuant to the terms of our operating agreement, as amended, for services rendered to us. The Company recorded expenses to our three members during the three and nine months ended June 30, 2023, aggregating $275,934 and $827,493 and for the three and nine months ended June 30, 2022, aggregating $285,759 and $709,708, respectively. As of June 30, 2023 and September 30, 2022, we owed $0 to our three majority stockholders for consulting services.

4. Property and Equipment

Property and equipment consist of the following:

	June 30,			September 30,
	2023			2022
Furniture, fixtures and office equipment	$	86,485		$	161,640
Leasehold improvements		-			73,795
Property and equipment, gross		86,485			235,435
Less: accumulated depreciation		(47,994	)		(183,431	)
Property and equipment, net	$	38,491		$	52,004

Depreciation expense for the three and nine months ended June 30, 2023 were $3,778 and $13,623, respectively and for the three and nine months ended June 30, 2022 were $5,606 and $16,643, respectively.

As of December 31, 2022, the lease pertaining to the leasehold improvements was terminated (Note 6) and the $73,795 cost of leasehold improvements were written off resulting in a loss on disposal of $8,609 included in other income (expense).

During the nine months ended June 30, 2023, the Company disposed of equipment with a total cost of $85,403 consisting of $83,639 of fully amortized equipment and $1,764 of equipment for $1,200 in cash due to an insurance payout, for a loss on disposal of $329 included in other income (expense).   

8

5. Licensing Agreements

On January 3, 2012, we entered into a perpetual license agreement (the “Perpetual License”) with Mastermind Marketing, Inc. (the “Licensor”), which provides for licenses of trademarks, internet domains, and certain intellectual property as defined in the Perpetual License. The Licensor is one of our members and its chief executive officer is also our chief executive officer. The Perpetual License, which may be terminated at any time by either party, is effective January 3, 2012 and provides for aggregate cash payments of $2,100,000 over the calendar years from 2019 through 2039 with no further payments required after December 31, 2039. The Company has recorded amortized expenses related to the license of $27,000 and $69,000 for the three and nine months ended June 30, 2023, and $15,000 and $45,000 for the three and nine months ended June 30, 2022, respectively.

In consideration for the Perpetual License, we agreed to pay the following fees through fiscal year 2040 (calendar year 2039):

Fiscal Years Ending September 30,	Amount
2023	$	60,000
2024		60,000
2025		60,000
2026		120,000
2027		120,000
Thereafter		1,440,000
	$	1,860,000

6. Operating Lease Right-of-Use Assets and Operating Lease Liabilities

Operating lease right-of-use assets and liabilities are recognized at the present value of the future lease payments at the lease commencement date. The interest rate used to determine the present value is our incremental borrowing rate, estimated to be 5.5%, as the interest rate implicit in our lease is not readily determinable. Operating lease expense is recognized pursuant to ASC Topic 842 Leases (Topic 842) over the lease term. During the three and nine months ended June 30, 2023, the Company recorded rent expense of $0 and $41,422, respectively and for the three and nine months ended June 30, 2022, the Company recorded rent expense of $41,423 and $112,845, respectively.

In adopting Topic 842, the Company has elected the ‘package of practical expedients’, which permit it not to reassess under the new standard its prior conclusions about lease identification, lease classification and initial direct costs. The Company did not elect the use-of-hindsight or the practical expedient pertaining to land easements; the latter is not applicable to the Company. In addition, the Company elected not to apply ASC Topic 842 to arrangements with lease terms of 12 month or less. During the year ended September 30, 2020, upon adoption of ASC Topic 842 for the 10-year commercial lease with 1450 West Peachtree, LLC for our leased office space, the Company recorded right-of-use assets and lease liabilities of $461,740.

During the period ended December 31, 2022 the Company gave notice to our landlord for our leased office space to terminate the agreement as of December 31, 2022 with no payments due thereafter. The landlord agreed to the termination of the lease with no penalties and no additional payments required. Through the period of COVID restrictions, we enhanced our remote work tools, technologies, and practices, working with our team to continue to serve our customers and complete projects.  These remote tools and technologies have broadened our available talent pool and removed travel times for our team. The Company has adopted a fully remote work environment and no replacement office space is planned for.

The Right-of-use assets are summarized below:

	June 30,		September 30,
	2023		2022
Office Lease	$	-	$	461,740
Less accumulated amortization		-		(307,924	)
Right-of-use, net	$	-	$	153,816

Amortization on the right-of-use asset is included in general and administrative expense on the statements of operations.

Operating lease liabilities are summarized below:

	June 30,		September 30,
	2023		2022
Lease liability	$	-	$	153,816
Less: current portion		-		(114,389	)
Long term portion	$	-	$	39,427

9

7. Commitments and Contingencies

              Litigation

On February 11, 2022, a Complaint and Demand for Jury Trial (the “Complaint”) was filed by a plaintiff (the “Plaintiff”) in the United States District Court for the Eastern District of Pennsylvania. The Complaint named Mastermind, Inc. (“the Company”) and Daniel Dodson, the Company’s Chief Executive Officer, (the “CEO”). The Company and the CEO are collectively referred to herein as “Defendants”. The Complaint includes alleged breach of contract and alleged breach of implied contract by the Defendants related to the Plaintiff’s allegations that he was entitled to 3,000,000 shares of common stock of the Company from the reverse merger transaction completed on February 14, 2018. The Defendants successfully had the Complaint transferred to the United States District Court for the Northern District of Georgia.  The Defendants will contest the complaint and believe they will prevail.

Other than the above we are not a party to any other legal proceedings, other than ordinary routine litigation incidental to our business, which we believe will not have a material effect on our financial position or results of operations.

 8. Income Taxes

Prior to February 14, 2018, the effective date of the Business Combination, no provision for income taxes was made since we were treated as a partnership for income tax purposes and the income or loss was passed through to our members.

We are required to file federal and state income tax returns in the United States. The preparation of these tax returns requires us to interpret the applicable tax laws and regulations in effect in such jurisdictions, which could affect the amount of tax paid by us. In consultation with our tax advisors, we base our tax returns on interpretations that are believed to be reasonable under the circumstances. The tax returns, however, are subject to routine reviews by the various federal and state taxing authorities in the jurisdictions in which we file tax returns. As part of these reviews, a taxing authority may disagree with respect to the income tax positions taken by us (“uncertain tax positions”) and, therefore, may require us to pay additional taxes. As required under applicable accounting rules, we accrue an amount for our estimate of additional income tax liability, including interest and penalties, which we could incur as a result of the ultimate or effective resolution of the uncertain tax positions. We account for income taxes using the asset and liability method. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributed to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences and carry-forwards are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is established when necessary to reduce deferred tax assets to amounts expected to be realized.

There were no unrecognized material tax benefits at June 30, 2023, and September 30, 2022. Our policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. There were no accrued interest or penalties associated with any unrecognized tax benefits, nor was any interest expense recognized during the periods presented. We have determined we have no uncertain tax positions.

Tax returns are subject to examination by the federal and state taxing authorities for generally three years after filed. There are no income tax examinations currently in process.

The Company files its income tax returns on the cash basis of accounting utilizing a December 31 tax year end. Deferred tax assets relating to current liabilities result from accounts payable and accrued expenses and unearned revenues which are not currently deductible for tax purposes. Deferred tax liabilities relating to current assets result from accounts receivables, unbilled receivables and prepaid expenses which are not currently recognized as income for tax reporting purposes.

As of June 30, 2023, the Company has no net operating loss carryforwards that are available to offset future taxable income. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment.

On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (the “Tax Act”) was signed into law making significant changes to the Internal Revenue Code. Changes include, but are not limited to, a federal corporate tax rate decrease from 35% to 21% for tax years beginning after December 31, 2017, the transition of U.S. international taxation from a worldwide tax system to a territorial system, and a one-time transition tax on the mandatory deemed repatriation of foreign earnings.

10

9. Stockholders’ Equity

Preferred Stock

As of June 30, 2023, and September 30, 2022, we were authorized to issue a total 1,000,000 shares of preferred stock. There were no shares of Preferred Stock issued or outstanding as of June 30, 2023, and September 30, 2022.

Common Stock

As of June 30, 2023, and September 30, 2022, we were authorized to issue a total of 125,000,000 shares of common stock. As of June 30, 2023, and September 30, 2022, there were 34,505,520 shares of common stock issued and outstanding, respectively.

Dividends

During the three and nine months ended June 30, 2023 and 2022, there were no dividends declared or paid.

Common Stock Options

A 2018 Equity Incentive Plan consisting of four million (4,000,000) shares of Common Stock was adopted by written consent of holders of 85% of the voting securities. No options or shares have been issued under this plan as of June 30, 2023 and September 30, 2022.

10. Concentration of Credit Risk and Major Customers

For the three months ended June 30, 2023, three customers represented approximately 43%, 42% and 14%, respectively, of our total revenues. For the nine months ended June 30, 2023, three customers represented approximately 36%, 34% and 27%, respectively, of our total revenues. As of June 30, 2023, three customers represented approximately 44%, 37% and 19%, respectively of our outstanding accounts receivable and unbilled receivables. As of September 30, 2022, three customers represented approximately 44%, 34% and 17%, respectively of our outstanding accounts receivable and unbilled receivables.

For the three months ended June 30, 2022, three customers represented approximately 31%, 30% and 28%, respectively, of our total revenues. For the nine months ended June 30, 2022, three customers represented approximately 40%, 32% and 22%, respectively, of our total revenues.  

11. Subsequent Events

The Company has evaluated subsequent events through the date the financial statements were issued. The Company has determined that there are no such events that warrant disclosure or recognition in the consolidated financial statements presented herein.

11

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

Forward-Looking Statements

This quarterly report on Form 10-Q contains certain statements that are “forward-looking” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Litigation Reform Act”). These forward-looking statements and other information are based on our beliefs as well as assumptions made by us using information currently available.

The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “will,” “should” and similar expressions, as they relate to us, are intended to identify forward-looking statements. Such statements reflect our current views with respect to future events and are subject to certain risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated, expected, intended or using other similar expressions.

In accordance with the provisions of the Litigation Reform Act, we are making investors aware that such forward-looking statements, because they relate to future events, are by their very nature subject to many important factors that could cause actual results to differ materially from those contemplated by the forward-looking statements contained in this quarterly report on Form 10-Q. For example, we may encounter competitive, technological, financial and business challenges making it more difficult than expected to continue to develop and market our products; the market may not accept our existing and future products; we may not be able to retain our customers; we may be unable to retain existing key management personnel; and there may be other material adverse changes in our operations or business. Certain important factors affecting the forward-looking statements made herein also include, but are not limited to (i) continued downward pricing pressures in our targeted markets, (ii) the continued acquisition of our customers by certain of our competitors, and (iii) continued periods of net losses, which could require us to find additional sources of financing to fund operations, implement our financial and business strategies, meet anticipated capital expenditures and fund research and development costs. In addition, assumptions relating to budgeting, marketing, product development and other management decisions are subjective in many respects and thus susceptible to interpretations and periodic revisions based on actual experience and business developments, the impact of which may cause us to alter our marketing, capital expenditure or other budgets, which may in turn affect our financial position and results of operations. For all of these reasons, the reader is cautioned not to place undue reliance on forward-looking statements contained herein, which speak only as of the date hereof. We assume no responsibility to update any forward-looking statements as a result of new information, future events, or otherwise except as required by law. For further information, you are encouraged to review our filings with the Securities and Exchange Commission (“SEC”), including our Current Report on Form 8-K, as filed with the SEC on February 22, 2018, as amended on April 20, 2018, and risk factors as discussed therein under Item 2.01.

Overview

Mastermind, Inc. is a digital marketing agency that plans, executes and analyzes digital marketing initiatives for clients in numerous industries including Fashion, Automotive, Spirits & Beer, Business-to-business, Consumer Electronics, Banking & Financial Services, Consumer Packaged Goods, Food & Beverage, Healthcare, Home Improvement, Restaurants, Retail, Technology, and Communications. Mastermind offers a unique approach to digital and social marketing called Involvement Marketing (IM). IM is aimed at involving more people with each clients’ brand in ways that inspire them to take an action (e.g.- becoming aware of the brand, trying it, purchasing more of it, and/or even becoming an advocate for the brand through social media). Mastermind’s Involvement Marketing initiatives encompass anyone, or combination of tactics including Content Marketing, Digital/Mobile Marketing, Influencer Marketing, Social Marketing & Community Management, Promotion Marketing, Digital/Social Issues Management, UX Analytics & Digital Intelligence, and Augmented Reality Marketing.

Mastermind has assembled a team of highly experienced, cross-functional marketing experts to develop and execute Involvement Marketing initiatives (see key executive bios). These experts have extensive backgrounds in digital/social marketing & media, content development, influencer marketing, promotion, digital contingency communications & PR, research, strategy, creative message development, and analytics. Mastermind has also developed a disciplined approach to Involvement Marketing that ensures the right tactic(s) is employed to best achieve the objective and that it is executed flawlessly. The team is led by our senior executives described in our 10-K as of and for the fiscal year ended September 30, 2022.

Mastermind has worked with some of the most widely recognized brands in in dozens of industries. While the agency does not have a client in every industry currently, its experience provides the confidence of potential major clients to consider hiring Mastermind. Mastermind works with clients on both a project-basis and ongoing services basis. Mastermind is developing innovative marketing technology initiatives with the potential to drive more interest from potential clients in the next few years.

12

Critical Accounting Policies

Our significant accounting policies are described in Note 2 to the financial statements which are included in our Annual Report on Form 10-K as of and for the fiscal year ended September 30, 2022. Our discussion and analysis of our financial condition and results of operations are based upon these financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We evaluate our estimates on an on an on-going basis. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. In the past, actual results have not been materially different from our estimates. However, results may differ from these estimates under different assumptions or conditions.

Results of Operations

Three Months Ended June 30, 2023 vs. June 30, 2022

	Three Months Ended
	June 30,
	2023		2022		Change			%
Revenues	$	1,319,337	$	1,456,013	$	(136,676	)	(9.4)		%
Cost of revenues		533,278		392,618		140,660			35.8	%
Gross Profit		786,059		1,063,395		(277,336	)	(26.1)		%
Operating expenses
Management consulting		210,725		220,725		(10,000	)	(4.5)		%
Wages and benefits		204,585		150,927		53,658			35.6	%
General and administrative		164,643		243,947		(79,304	)	(32.5)		%
Total operating expenses		579,953		615,599		(35,646	)	(5.8)		%
Income from operations		206,106		447,796		(241,690	)	(54.0)		%
Other income
Interest income		6,559		930		5,629			605.3	%
Total other income		6,559		930		5,629			605.3	%
Income before provision for income taxes	$	212,665	$	448,726	$	(236,061	)	(52.6)		%

Revenues

Revenues for the three months ended June 30, 2023 were $1,319,337 as compared with $1,456,013 for the comparable prior year period, a decrease of $136,676 or 9.4%. The decrease is attributable to the timing of project work being completed, and also the revenue being recognized for direct expenses (media, influencer fees, etc.) attributable to jobs. These fluctuations in work accomplished and revenue being recognized for direct expenses are normal occurrences in our business.

Gross Profit

Gross profit for the three months ended June 30, 2023 was $786,059 or 59.6% of revenues, compared with $1,063,395 or 73% of revenues, for the comparable prior year period. The decrease in gross profit dollars was due to lower revenues and customer projects in the current period. The decrease in gross margin percentage is primarily a result of the Company having more projects with higher direct expenses in the three months ended June 30, 2023, compared to same period of last year. Direct cost includes expenses for media, sponsorship fees, etc. Gross profit will fluctuate from year to year based on the types of work assigned to the Company by its clients.

Operating Expenses

Total operating expenses for the three months ended June 30, 2023 were $579,953 as compared with $615,599 for the comparable prior year period, a decrease of $35,646 or 5.8%. The decrease was primarily a result of a decrease in general and administrative expenses of $79,304 and management consulting of $10,000 for distribution to three members, offset by increase in wages and benefits of $53,658. The distribution is usually decided based on a combination of the Company’s operation results and performance of the Company’s management group and their respective member companies. The decrease in general and administrative expenses primarily consisted of $41,422 in lower rent, repairs and maintenance decrease of $601 and utilities of $4,157 as a result of lease termination on December 31, 2022, decrease in new business development cost of $13,000, offset by increase in mergers and acquisition expense (not including legal fees related to acquisition) of $18,601. In addition, professional fees (including public company expenses, and legal fees related to acquisition), as part of general and administrative costs, decreased by $32,626.

13

Income from Operations

Income from Operations for the three months ended June 30, 2023 decreased by $241,690 as compared to the same period in the prior year. The decrease was primarily related to decreased gross profit of $277,336 offset by a reduction in operating expenses of $35,646. 

Other Income and Expense

Other income and expense, net for the three months ended June 30, 2023 was an income of $6,559 as compared to income of $930 for the comparable prior year period.  The income was primarily due to interest income. 

Income Before Provision for Income Taxes

Income before provision for income taxes for the three months ended June 30, 2023 was $212,665 as compared to $448,726 for the comparable prior year period. 

Provision for Income Taxes

Provision for income taxes for the three months ended June 30, 2023 was $57,421 as compared to $114,839 for the comparable prior year period.  The decrease in income taxes is primarily due to changes in unbilled receivables, unearned revenues and decreased revenues. Provision for income taxes is estimated quarterly applying both federal and state tax rates.

Nine Months Ended June 30, 2023 vs. June 30, 2022

	Nine Months Ended
	June 30,
	2023			2022		Change			%
Revenues	$	3,498,142		$	3,391,045	$	107,097			3.2	%
Cost of revenues		1,379,011			1,117,313		261,698			23.4	%
Gross Profit		2,119,131			2,273,732		(154,601	)	(6.8)		%
Operating expenses
Management consulting		632,075			514,675		117,400			22.8	%
Wages and benefits		581,438			523,473		57,965			11.1	%
General and administrative		497,044			669,442		(172,398	)	(25.8)		%
Total operating expenses		1,710,557			1,707,590		2,967			0.2	%
Income from operations		408,574			566,142		(157,568	)	(27.8)		%
Other income (expense)
Interest income		11,837			2,239		9,598			428.7	%
Loss on disposal of property and equipment		(8,938	)		-		(8,938	)		(100.0)	%
Total other income		2,899			2,239		660			29.5	%
Income before provision for income taxes	$	411,473		$	568,381	$	(156,908	)	(27.6)		%

Revenues

Revenues for the nine months ended June 30, 2023, were $3,498,142 as compared with $3,391,045 for the comparable prior year period, an increase of $107,097 or 3.2%. The increase is attributable to the timing of project work being completed, and also the revenue being recognized for direct expenses (media, influencer fees, etc.) attributable to jobs. These fluctuations in work accomplished and revenue being recognized for direct expenses are normal occurrences in our business.

Gross Profit

Gross profit for the nine months ended June 30, 2023, was $2,119,131 or 60.6% of revenues, compared with $2,273,732 or 67% of revenues, for the comparable prior year period. The decrease in gross profit dollars was a result of lower gross margin in the current period. The decrease in gross margin percentage is primarily a result of the Company having more projects with higher direct expenses in the nine months ended June 30, 2023, compared to same period of last year. Direct cost includes expenses for media, sponsorship fees, etc.  Gross profit will fluctuate from year to year based on the types of work assigned to the Company by its clients.

14

Operating Expenses

Total operating expenses for the nine months ended June 30, 2023 were $1,710,557 as compared with $1,707,590 for the comparable prior year period, an increase of $2,967 or 0.2%. The increase was primarily a result of an increase in management consulting of $117,400 and wages and benefits of $57,965, offset by a reduction of general and administrative of $172,398. The increase in management consulting of $117,400 is due to distribution to three members of $632,075 in current period as compared to $514,675 distribution for the comparable prior year period. The distribution is usually decided based on a combination of the Company’s operation results and performance of the Company’s management group and their respective member companies. The decrease in general and administrative expenses primarily consisting of $71,422 in lower rent expense, repairs and maintenance of $26,278, and utilities of $30,479 as result of lease termination on December 31, 2022, decrease in new business development cost of $16,746, offset by increase in mergers and acquisition expense (not including legal fees related to acquisition) of $49,817. In addition, professional fees (including public company expenses, and legal fees related to acquisition), as part of general and administrative costs, decreased by $53,294.

Income from Operations

Income from Operations for the nine months ended June 30, 2023 decreased by $157,568 as compared to the same period in the prior year. The decrease was primarily related to decreased gross profit of $154,601 and an increase in operating expenses of $2,967.

Other Income and Expense 

Other income and expense, net for the nine months ended June 30, 2023 was an income of $2,899 as compared to income of $2,239 for the comparable prior year period.  The income of the current period was primarily due to interest income offset by loss on disposal of property and equipment. 

Income Before Provision for Income Taxes

Income before provision for income taxes for the nine months ended June 30, 2023 was $411,473 as compared to $568,381 for the comparable prior year period. 

Provision for Income Taxes

Provision for income taxes for the nine months ended June 30, 2023 was $151,769 as compared to $118,814 for the comparable prior year period.  The increase in income taxes is primarily due to changes in unbilled receivables, unearned revenues and increased revenues. Provision for income taxes is estimated quarterly applying both federal and state tax rates.

Liquidity and Capital Resources

	June 30,		September 30,
	2023		2022		Change			%
Cash and cash equivalents	$	1,189,583	$	1,735,140	$	(545,557	)	(31.4)		%
Current assets	$	3,594,816	$	3,326,379	$	268,437			8.1	%
Current liabilities	$	381,650	$	551,733	$	(170,083	)	(30.8)		%
Working capital	$	3,213,166	$	2,774,646	$	438,520			15.8	%

As of June 30, 2023, we had cash of $1,189,583, a decrease of $545,557, or 31.4% when compared with a balance of $1,735,140 as of September 30, 2022.

	Nine Months Ended
	June 30,
	2023			2022			Change			%
Cash provided by (used in) operating activities	$	(536,509	)	$	906,836		$	(1,443,345	)	(159.2)		%
Cash used in investing activities	$	(9,048	)	$	(8,520	)	$	(528	)		6.2	%
Net Change in Cash During Period	$	(545,557	)	$	898,316		$	(1,443,873	)	(160.7)		%

15

During the nine months ended June 30, 2023, $536,509 was used in operating activities as compared with net cash provided by operating activities of $906,836 for the comparable prior year period. Our uses of cash for operating activities have primarily consisted of salaries and wages for our employees; costs incurred in connection with performance on client projects; facility and facility-related costs, material, management consulting and professional fees. The sources of our cash flows from operating activities have consisted primarily of payments received from clients in connection with the performance on contractually agreed-upon projects. Net cash flows from operating activities for the current period were a result of the net income, loss on disposition of property and equipment, depreciation expense, change of deferred tax and changes in current assets and liabilities of $869,688.

During the nine months ended June 30, 2022, $906,836 was provided by operating activities, which was a result of the net income, reversal of stock compensation expense, depreciation expense, change of deferred tax and changes in current assets and liabilities of $308,052.

During the nine months ended June 30, 2023 we purchased $10,248 in computer equipment and received $1,200 in insurance payout on equipment, and during the nine months ended June 30, 2022, we purchased $8,520 in computer equipment.

During the nine months ended June 30, 2023, and 2022, the Company did not have any cash flow activity from financing activities.

The ability to attract additional capital investments for more rapid expansion in the future will depend on many factors, including the availability of credit, rate of revenue growth, ability to acquire new client opportunities, the timing of new service product introductions and enhancements to existing services/products, and the opportunities to acquire complimentary businesses that may be made available to us from time-to-time. We believe that as of June 30, 2023, our cash position and cash flows from our operations will be sufficient to fund our working capital and planned strategic activities, excluding acquisitions, if any, for at least the next twelve months.

Any potential future sale of equity or debt securities may result in dilution to our stockholders, and we cannot be certain that additional public or private financing will be available in amounts or on terms acceptable to us, or at all. If we are required to raise additional financing, but are unable to obtain such financing, we may be required to delay, reduce the scope of, or eliminate one or more aspects of our operations or business development activities.

This quarterly report on Form 10-Q contains certain statements that are “forward-looking” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Litigation Reform Act”). These forward-looking statements and other information are based on our beliefs as well as assumptions made by us using information currently available.

Off-Balance Sheet Arrangements

As of June 30, 2023, we did not have any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future material effect on our financial condition, results of operations, liquidity, capital expenditures or capital resources.

16

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Not applicable.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Based on an evaluation under the supervision and with the participation of our management, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act were not effective as of June 30, 2023, to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms and (ii) accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. Based on this evaluation, our management concluded that, as of June 30, 2023, our internal control over financial reporting was not effective due to (i) insufficient segregation of duties in the finance and accounting functions due to limited personnel; and (ii) inadequate corporate governance policies. In the future, subject to working capital limitations, we intend to take appropriate and reasonable steps to make improvements to remediate these deficiencies.

Changes in Internal Control Over Financial Reporting

There have not been any changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) under the Exchange Act) during the fiscal period to which this report relates that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

17

Part II. Other Information

Item1. Legal Proceedings

On February 11, 2022, a Complaint and Demand for Jury Trial (the “Complaint”) was filed by a plaintiff (the “Plaintiff”) in the United States District Court for the Eastern District of Pennsylvania. The Complaint named Mastermind, Inc. (“the Company”) and Daniel Dodson, the Company’s Chief Executive Officer, (the “CEO”). The Company and the CEO are collectively referred to herein as “Defendants”. The Complaint includes alleged breach of contract and alleged breach of implied contract by the Defendants related to the Plaintiff’s allegations that he was entitled to 3,000,000 shares of common stock of the Company from the reverse merger transaction completed on February 14, 2018. The Defendants successfully got the Complaint transferred to the United States District Court for the Northern District of Georgia. The Defendants will contest the complaint and strongly believe they will prevail.

Other than the above, we are not a party to any legal proceedings, other than ordinary routine litigation incidental to our business, which we believe will not have a material effect on our financial position or results of operations.

Item 1A. Risk Factors

Not applicable for smaller reporting companies.

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

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not Applicable.

Item 5. Other Information

None.

18

Item 6. Exhibits

The following exhibits are filed or furnished with this report:

Exhibit No.	Description
31.1*	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*	Certification of Principal Financial and Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*	Certification of Principal Executive, Financial and Accounting 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
101.SCH**	Inline XBRL Taxonomy Extension Schema
101.CAL**	Inline XBRL Taxonomy Extension Calculation
101.DEF**	Inline XBRL Taxonomy Extension Definitions
101.LAB**	Inline XBRL Taxonomy Extension Label
101.PRE**	Inline XBRL Taxonomy Extension Presentation
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

___________ 

* Included herewith

** XBRL information is furnished and not filed or a part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

19

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 thereunto duly authorized.

	Mastermind, Inc.
Date: August 14, 2023	By:	/s/ Daniel A. Dodson
		Daniel A. Dodson Chief Executive Officer (Principal Executive, Financial and Accounting Officer)

20

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Daniel A. Dodson, hereby certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of Mastermind, Inc. (the “Company”);
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 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 Company as of, and for, the periods presented in this report;
4.	The Company’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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:

a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.	Evaluated the effectiveness of the Company’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 on such evaluation; and
d.	Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the Company’s fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and

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

a.	All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the Company’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 Company’s internal control over financial reporting.

Date: August 14, 2023	/s/ Daniel A. Dodson
	Daniel A. Dodson
	Chief Executive Officer
	(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Daniel A. Dodson, hereby certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of Mastermind, Inc. (the “Company”);
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 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 Company as of, and for, the periods presented in this report;
4.	The Company’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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:

a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.	Evaluated the effectiveness of the Company’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 on such evaluation; and
d.	Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the Company’s fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and

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

a.	All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the Company’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 Company’s internal control over financial reporting.

Date: August 14, 2023	/s/ Daniel A. Dodson
	Daniel A. Dodson
	Chief Executive Officer
	(Principal Financial and Accounting Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned officer(s) of Mastermind, Inc., a Nevada corporation (the “Company”), hereby certifies to his or her knowledge that the Company’s report on Form 10-Q for the period ended June 30, 2023, (the “Report”), as filed with the Securities and Exchange Commission on the date hereof, fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended, and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 14, 2023	/s/ Daniel A. Dodson
	Daniel A. Dodson
	Chief Executive Officer and President

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Cover - shares	9 Months Ended
	Jun. 30, 2023	Aug. 14, 2023
Cover [Abstract]
Entity Registrant Name	MASTERMIND, INC.
Entity Central Index Key	0001088638
Document Type	10-Q
Amendment Flag	false
Current Fiscal Year End Date	--09-30
Entity Small Business	true
Entity Shell Company	false
Entity Emerging Growth Company	false
Entity Current Reporting Status	Yes
Document Period End Date	Jun. 30, 2023
Entity Filer Category	Non-accelerated Filer
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2023
Entity Common Stock Shares Outstanding		34,505,520
Document Quarterly Report	true
Document Transition Report	false
Entity File Number	000-26533
Entity Incorporation State Country Code	NV
Entity Tax Identification Number	82-3807447
Entity Address Address Line 1	2221 Peachtree Rd. NE
Entity Address Address Line 2	Suite D-134
Entity Address City Or Town	Atlanta
Entity Address State Or Province	GA
Entity Address Postal Zip Code	30309
City Area Code	678
Local Phone Number	420-4000
Entity Interactive Data Current	Yes

XML

Consolidated Balance Sheets - USD ($)	Jun. 30, 2023	Sep. 30, 2022
Current assets:
Cash and cash equivalents	$ 1,189,583	$ 1,735,140
Accounts receivable	864,311	349,233
Unbilled receivables	1,420,071	1,137,078
Prepaid expenses and other current assets	43,374	27,451
Income tax receivable	77,477	77,477
Total Current Assets	3,594,816	3,326,379
Right-of-use asset, net	0	153,816
Property and equipment, net	38,491	52,004
TOTAL ASSETS	3,633,307	3,532,199
Current liabilities:
Accounts payable and accrued expenses	110,379	109,263
Unearned revenues	271,271	328,081
Lease obligation, current	0	114,389
Total Current Liabilities	381,650	551,733
Lease obligation, net of current portion	0	39,427
Deferred tax liabilities	297,619	246,705
Total Liabilities	679,269	837,865
Stockholders' Equity
Preferred stock: 1,000,000 shares authorized; $0.001 par value; no shares issued and outstanding	0	0
Common stock: 125,000,000 shares authorized; $0.001 par value; 34,505,520 shares issued and outstanding	34,506	34,506
Additional paid in capital	62,865	62,865
Retained earnings	2,856,667	2,596,963
Total Stockholders' Equity	2,954,038	2,694,334
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 3,633,307	$ 3,532,199

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Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2023	Sep. 30, 2022
Consolidated Balance Sheets
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	1,000,000	1,000,000
Preferred stock issued	0	0
Preferred stock outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	125,000,000	125,000,000
Common stock, shares issued (in shares)	34,505,520	34,505,520
Common stock, shares outstanding (in shares)	34,505,520	34,505,520

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Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Consolidated Balance Sheets
Revenues	$ 1,319,337	$ 1,456,013	$ 3,498,142	$ 3,391,045
Cost of revenues	533,278	392,618	1,379,011	1,117,313
Gross profit	786,059	1,063,395	2,119,131	2,273,732
Operating Expenses:
Management consulting	210,725	220,725	632,075	514,675
Wages and benefits	204,585	150,927	581,438	523,473
General and administrative	164,643	243,947	497,044	669,442
Total Operating Expenses	579,953	615,599	1,710,557	1,707,590
Income from operations	206,106	447,796	408,574	566,142
Other Income (Expense)
Interest income	6,559	930	11,837	2,239
Loss on disposal of property and equipment	0	0	(8,938)	0
Total other income	6,559	930	2,899	2,239
Income before provision for income taxes	212,665	448,726	411,473	568,381
Provision for income taxes	57,421	114,839	151,769	118,814
Net income	$ 155,244	$ 333,887	$ 259,704	$ 449,567
Basic and diluted income per common share
Basic and diluted	$ 0.00	$ 0.01	$ 0.01	$ 0.01
Weighted average number of common shares outstanding
Basic and diluted	34,505,520	34,505,520	34,505,520	34,505,520

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Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($)	Total	Common Stock To Be Issued	Common Stock	Additional Paid-In Capital	Retained Earnings
Balance, shares at Sep. 30, 2021		135,000	34,505,520
Balance, amount at Sep. 30, 2021	$ 2,019,115	$ 135	$ 34,506	$ 76,230	$ 1,908,244
Common stock to be issued for services, shares		45,000
Common stock to be issued for services, amount	4,500	$ 45	0	4,455	0
Net income	46,435	$ 0	$ 0	0	46,435
Balance, shares at Dec. 31, 2021		180,000	34,505,520
Balance, amount at Dec. 31, 2021	2,070,050	$ 180	$ 34,506	80,685	1,954,679
Balance, shares at Sep. 30, 2021		135,000	34,505,520
Balance, amount at Sep. 30, 2021	2,019,115	$ 135	$ 34,506	76,230	1,908,244
Net income	449,567
Balance, shares at Jun. 30, 2022			34,505,520
Balance, amount at Jun. 30, 2022	2,455,182	$ 0	$ 34,506	62,865	2,357,811
Balance, shares at Dec. 31, 2021		180,000	34,505,520
Balance, amount at Dec. 31, 2021	2,070,050	$ 180	$ 34,506	80,685	1,954,679
Common stock to be issued for services, shares		45,000
Common stock to be issued for services, amount	4,500	$ 45	0	4,455	0
Net income	69,245	$ 0	$ 0	0	69,245
Balance, shares at Mar. 31, 2022		225,000	34,505,520
Balance, amount at Mar. 31, 2022	2,143,795	$ 225	$ 34,506	85,140	2,023,924
Net income	333,887	$ 0	0	0	333,887
Reversal of common stock to be issued for services, shares		225,000
Reversal of common stock to be issued for services, amount	22,500	$ 225	$ 0	22,275	0
Balance, shares at Jun. 30, 2022			34,505,520
Balance, amount at Jun. 30, 2022	2,455,182	0	$ 34,506	62,865	2,357,811
Balance, shares at Sep. 30, 2022			34,505,520
Balance, amount at Sep. 30, 2022	2,694,334	0	$ 34,506	62,865	2,596,963
Net income	(13,658)	0	$ 0	0	(13,658)
Balance, shares at Dec. 31, 2022			34,505,520
Balance, amount at Dec. 31, 2022	2,680,676	0	$ 34,506	62,865	2,583,305
Balance, shares at Sep. 30, 2022			34,505,520
Balance, amount at Sep. 30, 2022	2,694,334	0	$ 34,506	62,865	2,596,963
Net income	259,704
Balance, shares at Jun. 30, 2023			34,505,520
Balance, amount at Jun. 30, 2023	2,954,038	0	$ 34,506	62,865	2,856,667
Balance, shares at Dec. 31, 2022			34,505,520
Balance, amount at Dec. 31, 2022	2,680,676	0	$ 34,506	62,865	2,583,305
Net income	118,118	0	$ 0	0	118,118
Balance, shares at Mar. 31, 2023			34,505,520
Balance, amount at Mar. 31, 2023	2,798,794	0	$ 34,506	62,865	2,701,423
Net income	155,244	0	$ 0	0	155,244
Balance, shares at Jun. 30, 2023			34,505,520
Balance, amount at Jun. 30, 2023	$ 2,954,038	$ 0	$ 34,506	$ 62,865	$ 2,856,667

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Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Cash flows from operating activities:
Net income	$ 259,704	$ 449,567
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
(Reversal of) Stock based compensation	0	(13,500)
Depreciation	13,623	16,643
Loss on disposal of property and equipment	8,938	0
Deferred tax	50,914	146,074
Changes in operating assets and liabilities:
Accounts receivable	(515,078)	797,145
Unbilled receivables	(282,993)	(456,447)
Prepaid expenses and other current assets	(15,923)	(34,387)
Accounts payable and accrued expenses	1,116	(97,193)
Accounts payable and accrued expenses, related party	0	20,000
Unearned revenues	(56,810)	78,934
Net cash provided by (used in) operating activities	(536,509)	906,836
Cash flows from investing activities:
Proceeds from sale of equipment	1,200	0
Purchase of property and equipment	(10,248)	(8,520)
Net cash used in investing activities	(9,048)	(8,520)
Net change in cash	(545,557)	898,316
Cash, beginning of period	1,735,140	1,075,188
Cash, end of period	1,189,583	1,973,504
Supplemental Cash Flow Information
Income taxes paid (refunded)	102,272	(18,228)
Interest paid	$ 0	$ 0

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Business

9 Months Ended

Jun. 30, 2023

Business

Business

1. Business

Mastermind, Inc. (the “Company”, “we”, “us”, or the “organization”) is an involvement marketing service agency that designs, creates and develops branding and marketing campaigns, primarily for large corporate clients with well-known brands. We specialize in customer conversion initiatives that we believe facilitate the involvement of more of the “right customers” with the brands of our clients. We focus on converting prospects to customers. Our programs can take on various forms, including creating and managing content marketing, influencer marketing, social marketing/community management, digital issues management communications, promotions, Augmented Reality Marketing, and UX Analytics & Digital Intelligence.

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Interim Financial Statements and Basis of Presentation

9 Months Ended

Jun. 30, 2023

Interim Financial Statements and Basis of Presentation

Interim Financial Statements and Basis of Presentation

2. Interim Financial Statements and Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information pursuant to Rule 8-03 of Regulation S-X. Accordingly, these unaudited consolidated financial statements do not include all of the information and disclosures required by U.S. GAAP for complete financial statements. In the opinion of management, the accompanying unaudited consolidated financial statements include all adjustments (consisting only of normal recurring adjustments), which we consider necessary, for a fair presentation of those financial statements. The results of operations for the three and nine months ended June 30, 2023 and cash flows for the nine months ended June 30, 2023, may not necessarily be indicative of results that may be expected for any succeeding period or for the entire fiscal year. These consolidated financial statements should be read in conjunction with our audited financial statements included in our Annual Report on Form 10-K as of and for the fiscal year ended September 30, 2022 as filed with the Securities and Exchange Commission.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and judgments, which are evaluated on an ongoing basis, and that affect the amounts reported in our unaudited financial statements and accompanying notes. Management bases its estimates on historical experience and on various other assumptions that it believes are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the amounts of revenues and expenses that are not readily apparent from other sources. Actual results could differ from those estimates and judgments. In particular, significant estimates and judgments include those related to revenue recognition, allowance for doubtful accounts, useful lives and valuation of property and equipment.

There have been no material changes in the Company’s significant accounting policies during the three and nine months ended June 30, 2023, as compared to the significant accounting policies described in the Company’s Annual Report on Form 10-K for the year ended September 30, 2022.

Cash and Cash Equivalents

Cash includes cash on hand. Cash equivalents include short-term, highly liquid investments, with a remaining maturity at the date of purchase of three months or less for which the risk of changes in value is considered to be insignificant. We have taken the initiative to protect funds by investing into a money market fund that holds highly liquid short-term investments managed by the bank.  As of June 30, 2023 and September 30, 2022, cash and cash equivalents consisted of the following:

	June 30,		September 30,
	2023		2022
Cash	$	384,143	$	1,030,707
Money Market Funds		805,440		704,433
	$	1,189,583	$	1,735,140

Periodically, the Company may carry cash balances at financial institutions more than the federally insured limit of $250,000 per institution. The amount in excess of the FDIC insurance as of June 30, 2023, was approximately $121,000. The Company has not experienced losses on these accounts and management believes, based upon the quality of the financial institutions, that the credit risk with regard to these deposits is not significant.

Reclassifications

Certain prior period amounts have been reclassified to conform with the current period presentation.

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Related Party Transactions

9 Months Ended

Jun. 30, 2023

Related Party Transactions

Related Party Transactions

3. Related Party Transactions

On January 3, 2012, we entered into a perpetual license agreement (the “Perpetual License”) with Mastermind Marketing, Inc. (the “Licensor”), which provides for licenses of trademarks, internet domains, and certain intellectual property as defined in the Perpetual License. The Licensor is one of our members and its chief executive officer is also our chief executive officer. The Perpetual License, which may be terminated at any time by either party, is effective January 3, 2012 and provides for aggregate cash payments of $2,100,000 over the calendar years from 2019 through 2039 with no further payments required after December 31, 2039. The Company has recorded amortized expenses related to the license of $27,000 and $69,000 for the three and nine months ended June 30, 2023 and $15,000 and $45,000 for the three and nine months ended June 30, 2022 (Note 5).

On January 3, 2014, we entered into a commercial lease agreement (the “Lease”) with 1450 West Peachtree, LLC, a Georgia limited liability company (the “Landlord”), for the lease of our corporate facility in Atlanta, Georgia. The manager of the Landlord is also our chief executive officer. The term of the original lease was for 10 years from the date of the agreement. During the period ended December 31, 2022 the Company gave notice to our landlord for our leased office space to terminate the agreement as of December 31, 2022 with no payments due thereafter. The landlord agreed to the termination of the lease with no penalties and no additional payments required. Through the period of COVID restrictions, we enhanced our remote work tools, technologies, and practices, working with our team to continue to serve our customers and complete projects.  These remote tools and technologies have broadened our available talent pool and removed travel times for our team. The Company has adopted a fully remote work environment and no replacement office space is planned for.  During the three and nine months ended June 30, 2023 we made lease payments of $0 and $41,422, respectively, and for the three and nine months ended June 30, 2022 $41,423 and $112,845 in satisfaction of our obligation pursuant to the Lease (Note 6).

During the three and nine months ended June 30, 2023, and 2022, we made payments to our three members pursuant to the terms of our operating agreement, as amended, for services rendered to us. The Company recorded expenses to our three members during the three and nine months ended June 30, 2023, aggregating $275,934 and $827,493 and for the three and nine months ended June 30, 2022, aggregating $285,759 and $709,708, respectively. As of June 30, 2023 and September 30, 2022, we owed $0 to our three majority stockholders for consulting services.

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Property and Equipment

9 Months Ended

Jun. 30, 2023

Property and Equipment

Property and Equipment

4. Property and Equipment

Property and equipment consist of the following:

	June 30,			September 30,
	2023			2022
Furniture, fixtures and office equipment	$	86,485		$	161,640
Leasehold improvements		-			73,795
Property and equipment, gross		86,485			235,435
Less: accumulated depreciation		(47,994	)		(183,431	)
Property and equipment, net	$	38,491		$	52,004

Depreciation expense for the three and nine months ended June 30, 2023 were $3,778 and $13,623, respectively and for the three and nine months ended June 30, 2022 were $5,606 and $16,643, respectively.

As of December 31, 2022, the lease pertaining to the leasehold improvements was terminated (Note 6) and the $73,795 cost of leasehold improvements were written off resulting in a loss on disposal of $8,609 included in other income (expense).

During the nine months ended June 30, 2023, the Company disposed of equipment with a total cost of $85,403 consisting of $83,639 of fully amortized equipment and $1,764 of equipment for $1,200 in cash due to an insurance payout, for a loss on disposal of $329 included in other income (expense).   

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Licensing Agreements

9 Months Ended

Jun. 30, 2023

Licensing Agreements

Licensing Agreements

5. Licensing Agreements

On January 3, 2012, we entered into a perpetual license agreement (the “Perpetual License”) with Mastermind Marketing, Inc. (the “Licensor”), which provides for licenses of trademarks, internet domains, and certain intellectual property as defined in the Perpetual License. The Licensor is one of our members and its chief executive officer is also our chief executive officer. The Perpetual License, which may be terminated at any time by either party, is effective January 3, 2012 and provides for aggregate cash payments of $2,100,000 over the calendar years from 2019 through 2039 with no further payments required after December 31, 2039. The Company has recorded amortized expenses related to the license of $27,000 and $69,000 for the three and nine months ended June 30, 2023, and $15,000 and $45,000 for the three and nine months ended June 30, 2022, respectively.

In consideration for the Perpetual License, we agreed to pay the following fees through fiscal year 2040 (calendar year 2039):

Fiscal Years Ending September 30,	Amount
2023	$	60,000
2024		60,000
2025		60,000
2026		120,000
2027		120,000
Thereafter		1,440,000
	$	1,860,000

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Operating Lease Right of Use Assets and Operating Lease Liabilities

9 Months Ended

Jun. 30, 2023

Operating Lease Right of Use Assets and Operating Lease Liabilities

Operating Lease Right of Use Assets and Operating Lease Liabilities

6. Operating Lease Right-of-Use Assets and Operating Lease Liabilities

Operating lease right-of-use assets and liabilities are recognized at the present value of the future lease payments at the lease commencement date. The interest rate used to determine the present value is our incremental borrowing rate, estimated to be 5.5%, as the interest rate implicit in our lease is not readily determinable. Operating lease expense is recognized pursuant to ASC Topic 842 Leases (Topic 842) over the lease term. During the three and nine months ended June 30, 2023, the Company recorded rent expense of $0 and $41,422, respectively and for the three and nine months ended June 30, 2022, the Company recorded rent expense of $41,423 and $112,845, respectively.

In adopting Topic 842, the Company has elected the ‘package of practical expedients’, which permit it not to reassess under the new standard its prior conclusions about lease identification, lease classification and initial direct costs. The Company did not elect the use-of-hindsight or the practical expedient pertaining to land easements; the latter is not applicable to the Company. In addition, the Company elected not to apply ASC Topic 842 to arrangements with lease terms of 12 month or less. During the year ended September 30, 2020, upon adoption of ASC Topic 842 for the 10-year commercial lease with 1450 West Peachtree, LLC for our leased office space, the Company recorded right-of-use assets and lease liabilities of $461,740.

During the period ended December 31, 2022 the Company gave notice to our landlord for our leased office space to terminate the agreement as of December 31, 2022 with no payments due thereafter. The landlord agreed to the termination of the lease with no penalties and no additional payments required. Through the period of COVID restrictions, we enhanced our remote work tools, technologies, and practices, working with our team to continue to serve our customers and complete projects.  These remote tools and technologies have broadened our available talent pool and removed travel times for our team. The Company has adopted a fully remote work environment and no replacement office space is planned for.

The Right-of-use assets are summarized below:

	June 30,		September 30,
	2023		2022
Office Lease	$	-	$	461,740
Less accumulated amortization		-		(307,924	)
Right-of-use, net	$	-	$	153,816

Amortization on the right-of-use asset is included in general and administrative expense on the statements of operations.

Operating lease liabilities are summarized below:

	June 30,		September 30,
	2023		2022
Lease liability	$	-	$	153,816
Less: current portion		-		(114,389	)
Long term portion	$	-	$	39,427

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Commitments and Contingencies

9 Months Ended

Jun. 30, 2023

Commitments and Contingencies

Commitments and Contingencies

7. Commitments and Contingencies

              Litigation

On February 11, 2022, a Complaint and Demand for Jury Trial (the “Complaint”) was filed by a plaintiff (the “Plaintiff”) in the United States District Court for the Eastern District of Pennsylvania. The Complaint named Mastermind, Inc. (“the Company”) and Daniel Dodson, the Company’s Chief Executive Officer, (the “CEO”). The Company and the CEO are collectively referred to herein as “Defendants”. The Complaint includes alleged breach of contract and alleged breach of implied contract by the Defendants related to the Plaintiff’s allegations that he was entitled to 3,000,000 shares of common stock of the Company from the reverse merger transaction completed on February 14, 2018. The Defendants successfully had the Complaint transferred to the United States District Court for the Northern District of Georgia.  The Defendants will contest the complaint and believe they will prevail.

Other than the above we are not a party to any other legal proceedings, other than ordinary routine litigation incidental to our business, which we believe will not have a material effect on our financial position or results of operations.

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Income Taxes

9 Months Ended

Jun. 30, 2023

Income Taxes

Income Taxes

 8. Income Taxes

Prior to February 14, 2018, the effective date of the Business Combination, no provision for income taxes was made since we were treated as a partnership for income tax purposes and the income or loss was passed through to our members.

We are required to file federal and state income tax returns in the United States. The preparation of these tax returns requires us to interpret the applicable tax laws and regulations in effect in such jurisdictions, which could affect the amount of tax paid by us. In consultation with our tax advisors, we base our tax returns on interpretations that are believed to be reasonable under the circumstances. The tax returns, however, are subject to routine reviews by the various federal and state taxing authorities in the jurisdictions in which we file tax returns. As part of these reviews, a taxing authority may disagree with respect to the income tax positions taken by us (“uncertain tax positions”) and, therefore, may require us to pay additional taxes. As required under applicable accounting rules, we accrue an amount for our estimate of additional income tax liability, including interest and penalties, which we could incur as a result of the ultimate or effective resolution of the uncertain tax positions. We account for income taxes using the asset and liability method. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributed to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences and carry-forwards are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is established when necessary to reduce deferred tax assets to amounts expected to be realized.

There were no unrecognized material tax benefits at June 30, 2023, and September 30, 2022. Our policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. There were no accrued interest or penalties associated with any unrecognized tax benefits, nor was any interest expense recognized during the periods presented. We have determined we have no uncertain tax positions.

Tax returns are subject to examination by the federal and state taxing authorities for generally three years after filed. There are no income tax examinations currently in process.

The Company files its income tax returns on the cash basis of accounting utilizing a December 31 tax year end. Deferred tax assets relating to current liabilities result from accounts payable and accrued expenses and unearned revenues which are not currently deductible for tax purposes. Deferred tax liabilities relating to current assets result from accounts receivables, unbilled receivables and prepaid expenses which are not currently recognized as income for tax reporting purposes.

As of June 30, 2023, the Company has no net operating loss carryforwards that are available to offset future taxable income. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment.

On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (the “Tax Act”) was signed into law making significant changes to the Internal Revenue Code. Changes include, but are not limited to, a federal corporate tax rate decrease from 35% to 21% for tax years beginning after December 31, 2017, the transition of U.S. international taxation from a worldwide tax system to a territorial system, and a one-time transition tax on the mandatory deemed repatriation of foreign earnings.

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Stockholders Equity

9 Months Ended

Jun. 30, 2023

Stockholders Equity

Stockholders' Equity

9. Stockholders’ Equity

Preferred Stock

As of June 30, 2023, and September 30, 2022, we were authorized to issue a total 1,000,000 shares of preferred stock. There were no shares of Preferred Stock issued or outstanding as of June 30, 2023, and September 30, 2022.

Common Stock

As of June 30, 2023, and September 30, 2022, we were authorized to issue a total of 125,000,000 shares of common stock. As of June 30, 2023, and September 30, 2022, there were 34,505,520 shares of common stock issued and outstanding, respectively.

Dividends

During the three and nine months ended June 30, 2023 and 2022, there were no dividends declared or paid.

Common Stock Options

A 2018 Equity Incentive Plan consisting of four million (4,000,000) shares of Common Stock was adopted by written consent of holders of 85% of the voting securities. No options or shares have been issued under this plan as of June 30, 2023 and September 30, 2022.

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Concentration of Credit Risk and Major Customers

9 Months Ended

Jun. 30, 2023

Concentration of Credit Risk and Major Customers

Concentration of Credit Risk and Major Customers

10. Concentration of Credit Risk and Major Customers

For the three months ended June 30, 2023, three customers represented approximately 43%, 42% and 14%, respectively, of our total revenues. For the nine months ended June 30, 2023, three customers represented approximately 36%, 34% and 27%, respectively, of our total revenues. As of June 30, 2023, three customers represented approximately 44%, 37% and 19%, respectively of our outstanding accounts receivable and unbilled receivables. As of September 30, 2022, three customers represented approximately 44%, 34% and 17%, respectively of our outstanding accounts receivable and unbilled receivables.

For the three months ended June 30, 2022, three customers represented approximately 31%, 30% and 28%, respectively, of our total revenues. For the nine months ended June 30, 2022, three customers represented approximately 40%, 32% and 22%, respectively, of our total revenues.  

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Subsequent Events

9 Months Ended

Jun. 30, 2023

Subsequent Events

Subsequent Events

11. Subsequent Events

The Company has evaluated subsequent events through the date the financial statements were issued. The Company has determined that there are no such events that warrant disclosure or recognition in the consolidated financial statements presented herein.

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Interim Financial Statements and Basis of Presentation (Tables)

9 Months Ended

Jun. 30, 2023

Interim Financial Statements and Basis of Presentation

Schedule of cash and cash equivalents

	June 30,		September 30,
	2023		2022
Cash	$	384,143	$	1,030,707
Money Market Funds		805,440		704,433
	$	1,189,583	$	1,735,140

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Property and Equipment (Tables)

9 Months Ended

Jun. 30, 2023

Property and Equipment

Schedule of Property and Equipment

	June 30,			September 30,
	2023			2022
Furniture, fixtures and office equipment	$	86,485		$	161,640
Leasehold improvements		-			73,795
Property and equipment, gross		86,485			235,435
Less: accumulated depreciation		(47,994	)		(183,431	)
Property and equipment, net	$	38,491		$	52,004

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Licensing Agreements (Tables)

9 Months Ended

Jun. 30, 2023

Licensing Agreements

Schedule of consideration for the Perpetual License

Fiscal Years Ending September 30,	Amount
2023	$	60,000
2024		60,000
2025		60,000
2026		120,000
2027		120,000
Thereafter		1,440,000
	$	1,860,000

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Operating Lease Right-of-Use Assets and Operating Lease Liabilities (Tables)

9 Months Ended

Jun. 30, 2023

Interim Financial Statements and Basis of Presentation

Schedule of Right-of-use assets

	June 30,		September 30,
	2023		2022
Office Lease	$	-	$	461,740
Less accumulated amortization		-		(307,924	)
Right-of-use, net	$	-	$	153,816

Schedule of Operating lease liabilities

	June 30,		September 30,
	2023		2022
Lease liability	$	-	$	153,816
Less: current portion		-		(114,389	)
Long term portion	$	-	$	39,427

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Interim Financial Statements and Basis of Presentation (Details ) - USD ($)	Jun. 30, 2023	Sep. 30, 2022
Interim Financial Statements and Basis of Presentation
Cash	$ 384,143	$ 1,030,707
Money Market Funds	805,440	704,433
Cash and cash equivalents net	$ 1,189,583	$ 1,735,140

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Interim Financial Statements and Basis of Presentation (Details Narrative )	Jun. 30, 2023 USD ($)
Interim Financial Statements and Basis of Presentation
Federally insured limit	$ 250,000
Amount in excess of the FDIC insurance	$ 121,000

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Related Party Transactions (Details Narrative) - USD ($)		3 Months Ended		9 Months Ended
	Jan. 03, 2014	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Sep. 30, 2022	Jan. 03, 2012
Related Party Transaction, Expenses from Transactions with Related Party		$ 275,934	$ 285,759	$ 827,493	$ 709,708
Finite-Lived License Agreements, Gross		2,100,000		2,100,000
Amortized Expense		27,000	15,000	69,000	45,000
Licensor [Member]
Finite-Lived License Agreements, Gross							$ 2,100,000
Amortized Expense		27,000	15,000	69,000	45,000
Licensor [Member] | License Agreement [Member]
Due to Related Parties		0		0		$ 0
Landlord [Member]
Operating Lease, Expense		$ 0	$ 41,423	$ 41,422	$ 112,845
Commercial lease, term of contract	10 years

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Property and Equipment (Details) - USD ($)	Jun. 30, 2023	Sep. 30, 2022
Property and Equipment
Furniture, fixtures and office equipment	$ 86,485	$ 161,640
Leasehold improvements	0	73,795
Property and equipment, gross	86,485	235,435
Less: accumulated depreciation	(47,994)	(183,431)
Property and equipment, net	$ 38,491	$ 52,004

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Property and Equipment (Details Narrative) - USD ($)	3 Months Ended			9 Months Ended
	Jun. 30, 2023	Dec. 31, 2022	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Depreciation Expences	$ 3,778		$ 5,606	$ 13,623	$ 16,643
Loss on disposition	$ 0		$ 0	(8,938)	$ 0
Disposal of equipment				85,403
Equipment
Loss on disposition				(329)
Fully amortization of equipment				83,639
Amortization of equipment				1,764
Insurance payout				$ 1,200
Leasehold improvements
Loss on disposition		$ (8,609)
Writeoff Leasehold improvements		$ 73,795

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Licensing Agreements (Details) - License Agreement [Member] - Licensor [Member]	Jun. 30, 2023 USD ($)
2023	$ 60,000
2024	60,000
2025	60,000
2026	120,000
2027	120,000
Thereafter	1,440,000
Total	$ 1,860,000

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Licensing Agreements (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Licensing Agreements
Finite-Lived License Agreements, Gross	$ 2,100,000		$ 2,100,000
Amortized Expense	$ 27,000	$ 15,000	$ 69,000	$ 45,000

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Operating Lease RightofUse Assets and Operating Lease Liabilities (Details) - USD ($)	Jun. 30, 2023	Sep. 30, 2022
Operating Lease Right of Use Assets and Operating Lease Liabilities
Office lease	$ 0	$ 461,740
Less accumulated amortization	0	(307,924)
Right-of-us assets, net	$ 0	$ 153,816

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Operating Lease RightofUse Assets and Operating Lease Liabilities (Details 1) - USD ($)	Jun. 30, 2023	Sep. 30, 2022
Operating Lease Right of Use Assets and Operating Lease Liabilities
Lease liability	$ 0	$ 153,816
Less current portion	0	(114,389)
Long term portion	$ 0	$ 39,427

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Operating Lease RightofUse Assets and Operating Lease Liabilities (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Sep. 30, 2021
Right-of-use assets and lease liabilities					$ 461,740
Interest rate			5.50%
Landlord [Member]
Operating Lease, Expense	$ 0	$ 41,423	$ 41,422	$ 112,845

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Commitments and Contingencies (Details Narrative)	Feb. 11, 2022 shares
Commitments and Contingencies
Loss contingency, damages sought, shares of common stock	3,000,000

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Income Taxes (Details Narrative)	1 Months Ended
	Dec. 22, 2017
Income Taxes
Description of federal corporate tax rate	decrease from 35% to 21%

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Stockholders Equity (Details Narrative) - shares	Jun. 30, 2023	Sep. 30, 2022
Common Stock, Shares Authorized (in shares)	125,000,000	125,000,000
Common Stock, Shares, Issued, Total (in shares)	34,505,520	34,505,520
Common Stock, Shares, Outstanding, Ending Balance (in shares)	34,505,520	34,505,520
Preferred Stock, Shares Authorized (in shares)	1,000,000	1,000,000
The 2018 Equity Incentive Plan [Member]
Common Stock, Capital Shares Reserved For Future (in shares) Issuance	4,000,000
Percentage of voting securities	85.00%

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Concentration of Credit Risk and Major Customers (Details Narrative)	3 Months Ended		9 Months Ended		12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Sep. 30, 2022
Customer 1 [Member] | Revenue from Contract with Customer Benchmark [Member] | Customer Concentration Risk [Member]
Concentration Risk, Percentage	43.00%	31.00%	36.00%	40.00%
Customer 1 [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member]
Concentration Risk, Percentage	44.00%				44.00%
Customer 2 [Member] | Revenue from Contract with Customer Benchmark [Member] | Customer Concentration Risk [Member]
Concentration Risk, Percentage	42.00%	30.00%	34.00%	32.00%
Customer 2 [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member]
Concentration Risk, Percentage	37.00%				34.00%
Customer 3 [Member] | Revenue from Contract with Customer Benchmark [Member] | Customer Concentration Risk [Member]
Concentration Risk, Percentage	14.00%	28.00%	27.00%	22.00%
Contracts3 [Member] | Account Receivable [Member] | Costemer Concentration Risk [Member]
Concentration Risk, Percentage	19.00%				17.00%