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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 ~~March~~June 3130, 2021

☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from _____________ to ____________

Commission File Number: 000-56037

Carrier EQ, LLC

(Exact name of registrant as specified in its charter)

Delaware		37-1981503
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

186 Lincoln Street, Third Floor, Boston, MA		02111
(Address of principal executive offices)		(Zip Code)

(617) 841-7207

(Registrant’s telephone number, including area code)

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered

~~Securities~~Indicate by check mark whether ~~registered~~the ~~pursuant~~registrant (1) has filed all reports required to ~~section~~be 12filed by Section 13 or 15(gd) 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 ☐

~~AirTokens~~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 (~~Title~~§232.405 of ~~class~~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 (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 for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

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

CARRIER EQ, LLC. d/b/a AIRFOX AND SUBSIDIARIES

PART I — FINANCIAL INFORMATION
Item 1	Financial Statements	1
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Comprehensive Loss	2
	Condensed Consolidated Statements of Changes in Member’s Deficit and Stockholders’ Deficit	3
	Condensed Consolidated Statements of Cash Flows	56
	Notes to Condensed Consolidated Financial Statements	67
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2531
Item 3	Quantitative and Qualitative Disclosures About Market Risk	3036
Item 4	Controls and Procedures	3136
PART II — OTHER INFORMATION
Item 1	Legal Proceedings	3338
Item 1A	Risk Factors	3338
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	3338
Item 3	Defaults upon Senior Securities	3338
Item 4	Mine Safety Disclosures	3338
Item 5	Other Information	3338
Item 6	Exhibits	3339
Signatures		3540

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CARRIER EQ, LLC. d/b/a AIRFOX AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

	March 31, 2021 (unaudited)			September 30, 2020 (audited)
	June 30, 2021 (unaudited)			September 30, 2020 (audited)
ASSETS
Current assets:
Cash and cash equivalents	$	4378,~~896,916~~411		$	31,~~272~~658,~~664~~028
Accounts receivable, net of allowance for doubtful accounts of $67,160 and $0 at March 31, 2021 and September 30, 2020, respectively		451,753			857,901
Accounts receivable		1,118			—
Prepaid expenses and other current assets		1771,~~185,947~~520			1,~~399~~083,~~878~~527
Total current assets		6,534,616			5,530,443
Current assets of discontinued operations		—			2,788,888
Total current assets		1,151,049			5,530,443
Non-current assets:
Intangibles, net		43,~~327~~355,~~843~~461			4,~~325~~292,~~105~~046
Property and equipment, net		55,223			3,790
Security deposits		280,616			320,108
Security deposits		288,671			338,386
Lease right of use assets		1,636,515			1,979,658
Lease right of use assets		1,686,532			1,979,658
Investment in related affiliate		252,000			—
Due from related party		—			1,400,000
Other assets		—			130,664
Due from affiliates		—			(4,589,610)
Total non-current assets		6,358,269			8,177,603
Non-current assets of discontinued operations		—			4,775,401
Total assets	$	12,892,885		$	13,708,046
Total non-current assets		5,524,592			8,177,603
Total assets	$	6,675,641		$	13,708,046
LIABILITIES AND MEMBER'S DEFICIT
Current liabilities:
Accounts payable	$	~~138~~151,~~452~~237		$	301,003
Accrued liabilities		6555,~~811,032~~891			41,~~261~~149,~~009~~514
Other deferred revenue, current portion		46,171			58,283
AirToken refund liability		115,044			163,561
AirToken refund liability		163,561			163,561
Lease liability, current portion		212,450			393,468
Lease liability, current portion		208,241			393,468
Due to related party		5,514,493			—
Due to related party		7,971,454			1,572,124
Current liabilities of discontinued operations		—			4,741,902
Total current liabilities		156,~~338~~549,~~911~~115			6,749,448
Long-term liabilities:
Deferred revenue - Mastercard Program Agreement		11,654,401			11,520,725
Deferred gain on issuance of AirTokens for Services		—			396,790
Deferred gain on issuance of AirTokens for Services		396,790			396,790
Lease liability, net of current portion		1,601,564			1,758,196
Lease liability, net of current portion		1,651,253			1,758,196
Deferred revenue - AirToken Project		—			12,529,824
Deferred revenue - AirToken Project		12,529,824			12,529,824
Long-term liabilities of discontinued operations		—			11,602,345
Other deferred revenue, net of current portion		69,256			81,620
Total liabilities	$	8,150,679		$	33,036,603
Total liabilities		41,640,435			33,036,603
Commitments and contingencies (Note 13)
Commitments and contingencies (Note 12)
Carrier EQ, LLC member's deficit:
Member's deficit; 1,277,635 limited liability company units outstanding as of March 31, 2021 and September 30, 2020		(29,970,638	)		(20,899,904	)
Member's deficit; 1,277,635 limited liability company units outstanding as of June 30, 2021 and September 30, 2020		(1,475,038	)		(20,899,904	)
Accumulated other comprehensive income		1,224,781			1,572,382
Accumulated other comprehensive income of discontinued operations		—			1,572,382
Total member's deficit attributable to Carrier EQ, LLC member		(281,~~745~~475,~~857~~038	)		(19,327,522	)
Non-controlling interest in subsidiary		~~(1,693~~—	)		(1,035	)
Total member's deficit		(281,~~747~~475,~~550~~038	)		(19,328,557	)
Total liabilities and member's deficit	$	126,~~892~~675,~~885~~641		$	13,708,046

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

CARRIER EQ, LLC. d/b/a AIRFOX AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(unaudited)

	Three Months Ended March 31,						Six Months Ended March 31,
	Three Months Ended June 30,						Nine Months Ended June 30,
	2021			2020			2021			2020
Revenue	$	~~130,423~~—		$	~~22,069~~—		$	~~497,824~~—		$	~~23,831~~—
Operating expenses:
Selling, general and administrative		4,993,489			5,570,471			12,132,140			10,776,510
Cost of revenue		—			—			—			—
Impairment of capitalized software		736,604			—			736,604			—
Selling, general and administrative		2,046,330			5,105,903			7,714,303			12,283,660
Total operating expenses		52,~~730~~046,~~093~~330			5,~~570~~105,~~471~~903			127,~~868~~714,~~744~~303			1012,~~776~~283,~~510~~660
Loss from operations		(52,~~599~~046,~~670~~330	)		(5,~~548~~105,~~402~~903	)		(127,~~370~~714,~~920~~303	)		(1012,~~752~~283,~~679~~660	)
Other (expense) income:
Realized loss on sale of digital assets		—			—			—			(1,392	)
Foreign currency transaction gain		516,572			—			128,189			—
Foreign currency transaction loss		(507,761	)		—			(418,604	)		—
Interest income (expense), net		40,235			60,054			186,005			27,154
Other miscellaneous income		12,978,884			—			12,978,884			—
Other (expense) income, net		556,807			60,054			314,194			25,762
Interest income (expense), net		(17,252	)		82,828			92,251			2,896
Loss before income taxes		(5,042,863	)		(5,488,348	)		(12,056,726	)		(10,726,917	)
Other (expense) income, net		12,453,871			82,828			12,652,531			1,504
Income tax benefit		64,629			35,410			178,662			82,041
Income (loss) from continuing operations before income taxes		10,407,541			(5,023,075	)		4,938,228			(12,282,156	)
Net loss		(4,978,234	)		(5,452,938	)		(11,878,064	)		(10,644,876	)
Income tax benefit		—			47,620			178,662			129,661
Net loss attributable to non-controlling interest		215			257			658			505
Net income (loss) from continuing operations		10,407,541			(4,975,455	)		5,116,890			(12,152,495	)
Net loss attributable to Carrier EQ, LLC and Carrier EQ, Inc.		(4,978,019	)		(5,452,681	)		(11,877,406	)		(10,644,371	)
Net loss from discontinued operations		(4,264,548	)		(1,147,124	)		(10,851,961	)		(4,614,960	)
Net income (loss)		6,142,993			(6,122,579)			(5,735,071)			(16,767,455)
Net loss (income) attributable to non-controlling interest		(1,693	)		(44	)		(1,035	)		(461	)
Net income (loss) attributable to Carrier EQ, LLC.		6,141,300			(6,122,623	)		(5,736,106	)		(16,766,994	)
Other comprehensive income
Foreign currency translation adjustment		213,911			1,099,845			(347,601	)		998,269
Foreign currency translation adjustment - discontinued operations		(527,484	)		120,645			(875,085	)		1,118,914	)
Total comprehensive loss	$	(4,764,108	)	$	(4,352,836	)	$	(12,225,007	)	$	(9,646,102	)
Total comprehensive income (loss)	$	5,613,816		$	(6,001,978	)	$	(6,611,191	)	$	(15,648,080	)

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

CARRIER EQ, LLC. d/b/a AIRFOX AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF MEMBER’S DEFICIT AND STOCKHOLDERS’ DEFICIT

	CARRIER EQ, LLC
		CARRIEREQ INC.																					CARRIER EQ, LLC
	Accumulated Other Comprehensive Income			Membership Interests		Member's Deficit			Noncontrolling Interest			Total Deficit
		Preferred Stock (Series One)					Preferred Stock (Series One - A)						Common Stock			Treasury Stock		Additional Paid-in	Accumulated Other Comprehensive	Noncontrolling	Accumulated		Accumulated Other Comprehensive		Membership		Member's			Noncontrolling			Total
Balance at September 30, 2020 (audited)		1,572,382			1,277,635		(20,899,904	)		(1,035	)	$	(19,328,557	)
		Shares			Amount		Shares			Amount			Shares		Amount	Shares	Amount	Capital	Income/(Loss)	Interest	Deficit		Income		Interests		Deficit			Interest			Deficit
Noncontrolling interest		—			—		—			(443	)		(443	)
Balance at September 30, 2020 (audited)		—								—					—		—	—	—	—	—		1,572,382		1,277,635		(20,899,904	)		(1,035	)	$	(19,328,557	)
Net loss		—			—		(6,899,387	)		—			(6,899,387	)
Noncontrolling interest																							—		—		—			(443	)		(443	)
Foreign currency translation		(561,512	)		—		—			—			(561,512	)
Net loss		—																					—		—		(6,899,387	)		—			(6,899,387	)
Balance at December 31, 2020 (unaudited)	$	1,010,870			1,277,635	$	(27,799,291	)	$	(1,478	)	$	(26,789,899	)
Foreign currency translation					—					—					—	—	—	—	—	—	—		(561,512	)	—		—			—			(561,512	)
Noncontrolling interest		—			—		—			(215	)		(215	)
Balance at December 31, 2020 (unaudited)		—								—					—		—	—	—	—	—	$	1,010,870		1,277,635	$	(27,799,291	)	$	(1,478	)	$	(26,789,899	)
Additional paid-in-capital		—			—		2,806,672			—			2,806,672
Noncontrolling interest																							—		—		—			(215	)		(215	)
Net loss		—			—		(4,978,019	)		—			(4,978,019	)
Additional paid-in-capital																							—		—		2,806,672			—			2,806,672
Foreign currency translation		213,911			—		—			—			213,911
Net loss																							—		—		(4,978,019	)		—			(4,978,019	)
Balance at March 31, 2021 (unaudited)	$	1,224,781			1,277,635	$	(29,970,638	)	$	(1,693	)	$	(28,747,550	)
Foreign currency translation		—			—					—					—		—	—	—	—	—		213,911		—		—			—			213,911
Balance at March 31, 2021 (unaudited)		—								—					—		—	—	—	—	—	$	1,224,781		1,277,635	$	(29,970,638	)	$	(1,693	)	$	(28,747,550	)
Noncontrolling interest																							—		—		—			1,693			1,693
Additional paid-in-capital																							—		—		1,150,000			—			1,150,000
Gain from Deconsolidation of subsidiary																							(697,297	)	—		21,204,301			—			20,507,004
Net income																							—		—		6,141,300			—			6,141,300
Foreign currency translation					—					—					—	—	—	—	—	—	—		(527,484	)	—		—			—			(527,484	)
Balance at June 30, 2021 (unaudited)		—								—					—		—	—	—	—	—	$	—		1,277,635	$	(1,475,038	)	$	—		$	(1,475,038	)

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

	CARRIEREQ, INC.
	Preferred Stock (Series One)				Preferred Stock (Series One - A)				Common Stock				Treasury Stock					Additional Paid-In		Accumulated Other Comprehensive			Noncontrolling			Accumulated
	Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount			Capital		Income (Loss)			Interest			Deficit			Total Deficit
Balance at September 30, 2019 (audited)		2,652,072	$	27		1,046,147	$	11		6,813,928	$	78		914,893	$	(240,005	)	$	2,014,658	$	110,363			(252	)	$	(21,025,864	)	$	(19,140,984	)
Stock based compensation		—		—		—		—		—		—		—		—			42,588		—			—			—			42,588
Options exercised		—		—		—		—		122,510		1		—		—			33,922		—			—			—			33,923
Noncontrolling interest		—		—		—		—		—		—		—		—			—		—			(248	)		—			(248	)
Net loss		—		—		—		—		—		—		—		—			—		—			—			(5,191,690	)		(5,191,690	)
Foreign currency translation		—		—		—		—		—		—		—		—			—		(101,576	)		—			—			(101,576	)
Balance at December 31, 2019 (unaudited)		2,652,072	$	27		1,046,147	$	11		6,936,438	$	79		914,893	$	(240,005	)	$	2,091,168	$	8,787		$	(500	)	$	(26,217,554	)	$	(24,357,987	)
Stock based compensation		—		—		—		—		—		—		—		—			168,015		—			—			—		$	168,015
Options exercised		—		—		—		—		816,631		8		—		—			154,449		—			—			—		$	154,457
Noncontrolling interest		—		—		—		—		—		—		—		—			—		—			(257	)		—		$	(257	)
Net loss		—		—		—		—		—		—		—		—			—		—			—			(5,452,681	)	$	(5,452,681	)
Foreign currency translation		—		—		—		—		—		—		—		—			—		1,099,845			—			—		$	1,099,845
Balance at March 31, 2020 (unaudited)		2,652,072	$	27		1,046,147	$	11		7,753,069	$	87		914,893	$	(240,005	)	$	2,413,632	$	1,108,632		$	(757	)	$	(31,670,235	)	$	(28,388,608	)

CARRIER EQ, LLC. d/b/a AIRFOX AND SUBSIDIARIES

~~The accompanying~~CONDENSED ~~notes~~CONSOLIDATED ~~are~~STATEMENT anOF ~~integral~~MEMBER’S DEFICIT ~~part~~AND ofSTOCKHOLDERS’ ~~these condensed consolidated financial statements~~DEFICIT

	CARRIEREQ INC.																										CARRIER EQ LLC
	Preferred Stock (Series One)			Preferred Stock (Series One - A)			Common Stock			Treasury Stock						Additional Paid-In		Accumulated Other Comprehensive			Noncontrolling			Accumulated			Accumulated Other Comprehensive	Membership		Member’s		Noncontrolling		Total
	Shares		Amount	Shares		Amount	Shares		Amount		Shares		Amount			Capital		Income/(Loss)			Interest			Deficit			Income	Interests		Deficit		Interest		Deficit
Balance at September 30, 2019	2,652,072	$	27	1,046,147	$	11	6,813,928	$	78	$	914,893	$	(240,005	)	$	2,014,658	$	110,363		$	(252	)	$	(21,025,864	)	$	—	—	$	—	$	—	$	(19,140,984	)
Stock based compensation	—		—	—		—	—		—		—		—			42,588		—			—			—			—	—		—		—	$	42,588
Options exercised	—		—	—		—	122,510		1		—		—			33,922		—			—			—			—	—		—		—	$	33,923
Noncontrolling interest	—		—	—		—	—		—		—		—			—		—			(248	)		—			—	—		—		—	$	(248	)
Net loss	—		—	—		—	—		—		—		—			—		—			—			(5,191,690	)		—	—		—		—	$	(5,191,690	)
Foreign currency translation	—		—	—		—	—		—		—		—			—		(101,576	)		—			—			—	—		—		—	$	(101,576	)
Balance at December 31, 2019 (unaudited) (as restated)	2,652,072	$	27	1,046,147	$	11	6,936,438	$	79		914,893	$	(240,005	)	$	2,091,168	$	8,787		$	(500	)	$	(26,217,554	)	$	—	—	$	—	$	—	$	(24,357,987	)
Stock based compensation	—		—	—		—	—		—		—		—			168,015		—			—			—			—	—		—		—	$	168,015
Options exercised	—		—	—		—	816,631		8		—		—			154,449		—			—			—			—	—		—		—	$	154,457
Noncontrolling interest	—		—	—		—	—		—		—		—			—		—			(257	)		—			—	—		—		—	$	(257	)
Net loss	—		—	—		—	—		—		—		—			—		—			—			(5,452,681	)		—	—		—		—	$	(5,452,681	)
Foreign currency translation	—		—	—		—	—		—		—		—			—		1,099,845			—			—			—	—		—		—	$	1,099,845
Balance at March 31, 2020 (unaudited) (as restated)	2,652,072	$	27	1,046,147	$	11	7,753,069	$	87		914,893	$	(240,005	)	$	2,413,632	$	1,108,632		$	(757	)	$	(31,670,235	)	$	—	—	$	—	$	—	$	(28,388,608	)

~~CARRIER~~The accompanying notes are an integral part ~~EQ,~~of ~~LLC.~~these ~~d/b/a~~condensed ~~AIRFOX~~consolidated ~~AND~~financial ~~SUBSIDIARIES~~statements

~~CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS~~4

~~(unaudited)~~CARRIER EQ, LLC. d/b/a AIRFOX AND SUBSIDIARIES

	Six Months Ended March 31,
	2021			2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(11,878,064	)	$	(10,644,876	)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Impairment of capitalized software		736,604			—
Amortization and depreciation of (in)tangible assets		833,454			303,622
Bad debt expense		67,160			—
Stock based compensation		6,885			210,603
Realized loss on sale of digital assets		—			1,392
Changes in Assets and Liabilities:
Accounts receivable		338,988			(3,437	)
Prepaid expenses and other current and long-term assets		394,310			(139,497	)
Accounts payable		(162,551	)		(421,934	)
Accrued liabilities and other current liabilities		2,238,828			3,635,467
Operating lease right of use assets and liabilities		956			80,574
Deferred revenue - AirToken Project		—			—
Deferred revenue - Mastercard Program Agreement		133,676			12,646,868
Other deferred revenue		(24,476	)		(143,356	)
Due from related party		1,400,000			—
AirToken refund liability		—			(3,107,179	)
Net cash (used in) provided by operating activities		(5,914,230	)		2,418,247
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property and equipment		(54,636	)		(2,533	)
Acquisition of intangible assets		(1,569,593	)		(2,037,778	)
Net cash used in investing activities		(1,624,229	)		(2,040,311	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Capital contributions - Via Varejo		2,806,672			—
Proceeds from related party		6,399,330
Proceeds from exercise of options		—			188,380
Net cash provided by financing activities		9,206,002			188,380
Effect of exchange rate changes on cash and cash equivalents		(43,291	)		(1,144,033	)
Net decrease in cash and cash equivalents		1,624,252			(577,717	)
Cash and cash equivalents, beginning of period		3,272,664			5,451,348
Cash and cash equivalents, end of period	$	4,896,916		$	4,873,631

CONDENSED CONSOLIDATED STATEMENT OF MEMBER’S DEFICIT AND STOCKHOLDERS’ DEFICIT

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

	CARRIEREQ INC.																																		CARRIER EQ LLC
	Preferred Stock (Series One)					Preferred Stock (Series One - A)					Common Stock					Treasury Stock							Additional Paid-In			Accumulated Other Comprehensive			Noncontrolling			Accumulated			Accumulated Other Comprehensive	Membership		Member’s			Noncontrolling			Total
	Shares			Amount		Shares			Amount		Shares			Amount			Shares			Amount			Capital			Income/(Loss)			Interest			Deficit			Income	Interests		Deficit			Interest			Deficit
Balance at March 31, 2020	2,652,072		$	27		1,046,147		$	11		7,753,069		$	87			914,893		$	(240,005	)	$	2,413,632		$	1,108,632		$	(757	)	$	(31,670,235	)	$	—	—	$	—		$	—		$	(28,388,608	)
Convertible notes converted into common stock	—			—		—			—		13,339,510			133			—			—			9,999,867			—			—			—			—	—		—			—		$	10,000,000
Conversion of Preferred One and Preferred One A shares to common stock	(2,652,072	)		(27	)	(1,046,147	)		(11	)	3,698,219			38			—			—			—			—			—			—			—	—		—			—		$	—
Cancellation of common stock previously outstanding	—			—		—			—		(8,003,706	)		(80	)		—			—			80			—			—			—			—	—		—			—		$	—
Simple Agreements for Future Equity converted into common stock	—			—		—			—		474,996			5			—			—			239,894			—			—			—			—	—		—			—		$	239,899
Stock compensation related to accelerated vesting of options	—			—		—			—		—			—			—			—			114,979			—			—			—			—	—		—			—		$	114,979
Capital contribution - Via Varejo	—			—		—			—		—			—			—			—			—			—			—			—			—	—		1,921,004			—		$	1,921,004
Noncontrolling interest	—			—		—			—		—			—			—			—			—			—			44			—			—	—		—			—		$	44
Retirement of treasury stock	—			—		—			—		—			—			(914,893	)		240,005			(240,005	)		—			—			—			—	—		—			—		$	—
Net loss	—			—		—			—		—			—			—			—			—			—			—			—			—	—		(6,122,623	)		—		$	(6,122,623	)
Foreign currency translation	—			—		—			—		—			—			—			—			—			—			—			—			120,645	—		—			—		$	120,645
Issuance of common stock to Option Stockholders	—			—		—			—		8,003,706			80			—			—			(80	)		—			—			—			—	—		—			—		$	—
Capital contribution from Via Varejo for payment to Option Holders due to cancellation of stock options	—			—		—			—		—			—			—			—			—			—			—			—			—	—		3,331,255			—		$	3,331,255
Payment to Option Holders due to cancellation of stock options	—			—		—			—		—			—			—			—			(238,719	)		—			—			—			—	—		—			—		$	(238,719	)
Purchase of membership units - Carrier EQ, LLC	—			—		—			—		(25,265,794	)		(263	)		—			—			(12,289,648	)		(1,108,632	)		713			31,670,235			1,108,632	1,277,635		(19,380,324	)		(713	)	$	—
Balance at June 30, 2020	—		$	—		—		$	—		—		$	—			—		$	—		$	—		$	—		$	—		$	—		$	1,229,277	1,277,635	$	(20,250,668	)	$	(713	)	$	(19,022,124	)

5The accompanying notes are an integral part of these condensed consolidated financial statements

~~CARRIER EQ, LLC d/b/a AIRFOX AND SUBSIDIARIES~~5

~~NOTES TO~~CARRIER ~~CONDENSED~~EQ, ~~CONSOLIDATED~~LLC. ~~FINANCIAL~~d/b/a ~~STATEMENTS~~AIRFOX AND SUBSIDIARIES

~~UNAUDITED~~CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

~~Note 1 - Organization and Nature of Operations~~(unaudited)

Carrier EQ, LLC, doing business as Airfox (the “Company”), was incorporated in Delaware on May 21, 2020 with a principal place of business in Boston, Massachusetts. The Company was previously formed as a corporation, CarrierEQ, Inc. and was incorporated in Delaware on January 19, 2016.


	Nine Months Ended June,
	2021		2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) from continuing operations	$	5,116,890	$	(12,152,495)
Net (loss) from discontinued operations		(10,851,961)		(4,614,960)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Amortization and Depreciation		1,213,738		569,951
Impairment write-off		736,594		—
Stock based compensation		—		325,582
Additional stock based compensation due to cancellation of stock options		—		3,092,536
Reversal of accrued interest related to conversion of convertible notes		—		(104,856)
Realized loss on sale of digital assets		—		1,392
Gain on issuance of AirTokens for services		(396,790)		—
Gain from reversal of deferred revenue due to discontinuance of Airtoken project		(12,529,824)		11,962,899
Inflation adjustment to deferred revenue Master card Program		1,560,768		—
(Increase) decrease in assets, net of effect of deconsolidation
Transfer out of cash and restricted cash as part of deconsolidation		(6,320,023)		—
Accounts receivable		(422,386)		(93,164)
Prepaid expenses and other current and long-term assets		307,632		1,058,235
Investment in other companies		—		—
Due from related party		1,400,000		(8,090)
Other assets		130,664		—
Increase ( decrease) in liabilities, net of effect of deconsolidation
Accounts payable		(149,766)		(676,693)
Operating lease right of use assets and liabilities		5,493		120,717
Accrued liabilities and other current liabilities		5,084,085		2,200,572
Other deferred revenue		(18,858)		(188,695)
AirToken refund liability		(48,517)		(3,227,499)
Due to related party		11,187,398		48,122
Net cash used in operating activities		(3,994,863)		(1,686,446)

CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property and equipment		(155,016)		(2,249)
Acquisition of intangible assets		(1,825,960)		(2,682,518)
Net cash used in investing activities		(1,980,976)		(2,684,767)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of options		—		188,380
Capital contributions - Via Varejo		3,956,672		1,921,004
Proceeds from Paycheck Protection Program SBA loan		—		537,732
Payment of principal from Paycheck Protection Program SBA loan		—		(537,732)
Proceeds from Via Varejo for payment to Option Holders due to cancellation of stock options		—		3,331,255
Payment to Option Holders due to cancellation of stock options		—		(3,331,255)
Net cash provided by financing activities		3,956,672		2,109,384

Effect of exchange rate changes on cash and cash equivalents		(875,086)		(443,510)

Net decrease in cash and cash equivalents		(2,894,253)		(2,705,339)

Cash and cash equivalents, beginning of period		3,272,664		5,451,348

Cash and cash equivalents, end of period	$	378,411	$	2,746,009

Supplemental disclosure of non-cash transactions:
Investment in related affiliate no longer eliminated in consolidation		252,000		—
Due to related party resulting from the deconsolidation of subsidiary		5,431,853		—
Convertible debt instrument settled through issuance of common stock		—		(10,000,000)
Simple agreement for future equity settled through issuance of common stock		—		(239,899)
Cancellation of common stock		—		(80)
Conversion to common stock - Series One		—		(27)
Conversion to common stock - Series One A		—		(11)
Par value of common stock from issuance to Lake Niassa		—		—
Conversion of Preferred One and Preferred One A shares to common stock		—		38
Operating lease right of use assets and liabilities		—		2,465,218
Retirement of treasury stock		—		240,005
Issuance of common stock to Option Stockholders		—		80
Purchase of membership units - Carrier EQ, LLC		—		(263)

On May 21, 2020, the Company filed a certificate of conversion (the “Certificate of Conversion”) to convert the Corporation to a Limited Liability Company and to change the Company’s name from “CarrierEQ, Inc.” to “Carrier EQ, LLC” The ~~conversion~~accompanying ~~and~~notes ~~name~~are ~~change~~an ~~became~~integral ~~effective~~part ~~on May 21, 2020. The Company filed a certificate~~ of ~~formation of Carrier EQ, LLC (the~~ ~~“Certificate~~these ofcondensed ~~Formation”)~~consolidated onfinancial ~~May 21, 2020.~~statements

On May 21, 2020, the Company was fully acquired by Via Varejo S.A, a corporation organized under the laws of the Federative Republic of Brazil (“Via Varejo”) through Lake Niassa Empreendimentos e Participações Ltda., a limited liability company duly organized under the laws of the Federative Republic of Brazil and wholly-owned by Via Varejo (the "Transaction").6

~~The Company~~CARRIER ~~has a 99.99% ownership interest in banQi Instituição de Pagamento Ltda (formerly known as AirFox Servicos E Intermediacoes Ltda (“Airfox Brazil”)~~EQ, aLLC ~~limited liability company organized under the laws of the Federative Republic of Brazil and~~ d/b/a ~~100% ownership~~AIRFOX ~~interest~~AND ~~in AirToken GmbH, a Swiss GmbH. Airfox USA, Airfox Brazil and Airtoken GmbH are collectively referred to herein, as the “Company.” On April 6, 2020, Airtoken GmbH was dissolved.~~SUBSIDIARIES

~~Beginning in~~NOTES ~~February~~TO ~~2017,~~CONDENSED ~~the~~CONSOLIDATED ~~Company~~FINANCIAL ~~began exploring consumer applications of its legacy prepaid mobile applications. The Company initiated~~STATEMENTS a business plan to introduce a mobile application that would allow users to earn digital tokens, exchange them for free or discounted mobile data and, ultimately, other goods and services in South America as part of a new international business and ecosystem (the “AirToken Project”). The AirToken Project included the issuance of digital tokens (“AirToken(s)”). The AirToken is an ERC-20 token issued on the Ethereum blockchain.

The Company obtained Ether and Bitcoin (collectively referred therein as the “Digital Assets”), in August 2017 through early October 2017 from those interested in obtaining AirTokens. The Company raised approximately $15.4 million for the purpose of developing the AirToken Project.UNAUDITED

~~The Company’s~~Note ~~business~~1 is- ~~evolving~~Organization ~~to focus on providing unbanked~~ and ~~financially~~Nature ~~underserved individuals in emerging markets mobile access to financial services. The Company is developing a software technology platform initially consisting~~ of ~~two~~Operations applications, a digital wallet application and an alternative credit scoring and lending application. The Company’s software technology platform is designed and built as a Software as Service (or SaaS) offering. The Company expects to generate revenue from these applications from fixed recurring fees, transaction fees, third party fees and interest income. The Company’s initial markets are the cash and unbanked markets in Brazil.

~~The Company’s~~Carrier ~~digital~~EQ, ~~wallet application~~LLC, ~~branded~~doing business as ~~banQi~~Airfox (~~"banQi"~~the “Company”), iswas aincorporated ~~digital~~in ~~banking~~Delaware ~~application~~on ~~capable~~May ~~of leveraging machine learning capabilities to build alternative~~21, ~~smartphone-based~~2020 ~~credit~~with ~~risk~~a ~~models.~~principal ~~This~~place ~~application,~~of ~~currently~~business ~~available~~in ~~on Android and iOS~~Boston, ~~aims to eliminate the need for traditional financial institutions allowing the underbanked without bank accounts or credit cards~~Massachusetts. toAirfox was ~~more~~previously ~~easily~~formed ~~and~~as ~~quickly~~a ~~make~~corporation, ~~many~~CarrierEQ, ~~everyday transactions using a smartphone~~Inc. Itand ~~will~~was ~~also~~incorporated ~~enable the Company to create an alternative credit scoring system for its users for use~~ in ~~connection~~Delaware ~~with~~on ~~its~~January ~~alternative~~19, ~~credit scoring and lending application~~2016.

~~The alternative~~Airfox had ~~credit~~at ~~scoring~~that ~~and~~time ~~lending application is~~ a ~~blockchain-based,~~100% ~~peer-to-peer~~ownership ~~lending application that will enable anyone from~~interest ~~around~~in ~~the~~AirToken ~~world~~GmbH, ~~to provide capital for~~ a ~~microloan~~Swiss ~~to a diversified cohort of borrowers~~GmbH. ~~The~~Airfox and ~~technology~~Airtoken isGmbH ~~expected~~are tocollectively ~~harness~~referred ~~the decentralized power of the Ethereum blockchain~~ to ~~create~~herein, aas ~~digital ledger of~~ the ~~user’s~~“Company.” ~~behavioral~~On ~~and transactional data to fund a new financial~~April ~~asset~~6, ~~class~~2020, ~~from~~Airtoken aGmbH ~~global~~was ~~pool of lenders seeking to make socially impactful microloans~~dissolved.

6On May 21, 2020, Airfox filed a certificate of conversion (the “Certificate of Conversion”) to convert the Corporation to a Limited Liability Company and to change the Airfox’s name from “CarrierEQ, Inc.” to “Carrier EQ, LLC” The conversion and name change became effective on May 21, 2020. Airfox (the Company) filed a certificate of formation of Carrier EQ, LLC (the “Certificate of Formation”) on May 21, 2020.

~~CARRIER~~On May 21, 2020, the Company was fully acquired EQby Via Varejo S.A, ~~LLC~~a ~~d/b/~~corporation organized under the laws of the Federative Republic of Brazil (“Via Varejo”) through Lake Niassa Empreendimentos e Participações Ltda. ("Lake Niassa"), a ~~AIRFOX~~limited ~~AND~~liability ~~SUBSIDIARIES~~company duly organized under the laws of the Federative Republic of Brazil and wholly-owned by Via Varejo (the "Transaction").

~~NOTES~~On June 14, 2021, the Company, Lake Niassa and TObanQi ~~CONDENSED~~Instituição ~~CONSOLIDATED~~de ~~FINANCIAL~~Pagamento ~~STATEMENTS~~Ltda (formerly known as AirFox Servicos E Intermediacoes Ltda (“banQi”), a limited liability company organized under the laws of the Federative Republic of Brazil entered into the 7th Amendment and Consolidation of the Articles of Association of banQi (the “7th Amendment”). Pursuant to the terms of the 7th Amendment, the banQi and Lake Niassa (i) increased banQi 's share capital from BRL 1,000,000.00 (one million reais) to BRL 69,870,000.00 (sixty-nine million, eight hundred and seventy thousand reais), which represents an increase of BRL 68,870,000.00 (sixty-eight million, eight hundred and seventy thousand reais); and (ii) issued 68,870,000 (sixty-eight million, eight hundred and seventy thousand) new quotas, with par value of BRL 1.00 (one real) each, fully subscribed and paid up, in Brazilian currency, through the capitalization of Advances for Future Capital Increase ("AFAC") made by Lake Niassa.

~~UNAUDITED~~Prior to entering into the 7th Amendment, the Company had a 99.99% ownership interest in banQi and Lake Niassa had a 0.01% ownership interest in banQi. Pursuant to the 7th Amendment, and the transfer of banQi’s share capital to Lake Niassa, the Company’s ownership interest in banQi decreased to 1.43% of the share capital of banQi, and Lake Niassa’s ownership interest in banQi increased to 98.57% of the share capital of banQi, which makes Lake Niassa the controlling owner of banQi.

~~Note~~As a result of this change in control, on June 214, -2021, ~~Financial~~the ~~Condition~~Company determined that it did not have a controlling interest over banQi, and ~~Management~~banQi was deconsolidated from the Company's condensed consolidated financial statements and presented as discontinued operations in the Company’s ~~Plans~~condensed consolidated financial information presented within this quarterly report. The presentation of the operations and results of banQi is further explained in Note 3.

~~The Company~~Beginning ~~has~~in ~~experienced~~February ~~recurring~~2017, ~~losses~~the ~~and~~Company ~~negative~~began exploring ~~cash~~consumer ~~flows~~applications ~~from~~of ~~operations.~~its Atlegacy ~~March 31,~~prepaid ~~2021,~~mobile ~~the~~applications. The Company ~~had~~initiated ~~cash~~a ~~and~~business ~~cash equivalents~~plan ofto ~~$4.9~~introduce ~~million,~~ a ~~working~~mobile application ~~capital~~that ~~deficit~~would ofallow ~~$8.8~~users ~~million~~to earn digital tokens, ~~and~~exchange ~~total~~them ~~member's~~for ~~deficit~~free ofor ~~$28.7~~discounted ~~million.~~mobile ~~The~~data ~~Company~~and, isultimately, ~~obligated~~other goods toand ~~refund~~services ~~the~~in ~~remaining~~South ~~amounts~~America ofas ~~claims~~part ~~related~~of toa ~~the~~new ~~AirToken~~international ~~Project~~business ~~when~~and ~~valid~~ecosystem ~~claims~~(the ~~are~~“AirToken ~~finalized~~Project”). AsThe ofAirToken Project ~~March 31,~~included ~~2021,~~ the ~~amount~~issuance ~~that~~of ~~was~~digital ~~not~~tokens ~~paid was approximately $0~~(“AirToken(s)”).2 ~~million.~~The ~~Additionally,~~AirToken ~~the~~is ~~Company~~an ~~may~~ERC-20 betoken ~~subject~~issued toon ~~other~~the ~~legal~~Ethereum ~~liabilities (see Note 12)~~blockchain.

The ~~accompanying~~ ~~condensed~~Company ~~consolidated~~obtained ~~financial~~Ether ~~statements~~and ~~have~~Bitcoin ~~been~~(collectively referred ~~prepared~~therein ~~assuming~~as ~~that~~ the ~~Company~~“Digital ~~will continue as a going concern~~Assets”), ~~which~~ ~~contemplates,~~in ~~among~~August ~~other~~2017 ~~things,~~through ~~the~~early ~~realization~~October of2017 ~~assets~~from ~~and~~those ~~satisfaction~~interested ~~of liabilities~~ in ~~the~~obtaining ~~ordinary course of business~~AirTokens. The Company ~~believes~~raised ~~that~~approximately ~~its~~$15.4 ~~ability~~million tofor ~~continue~~the ~~operations~~purpose ~~depends~~of ondeveloping ~~its~~the ~~ability~~AirToken to generate revenues and obtain funding that will be sufficient to sustain its operations until it rolls out its core product offerings and achieve profitability and positive cash flows from operating activitiesProject.

The successful outcome of future activities cannot be determined at this time and there is no assurance that, if achieved, the Company will have sufficient funds to execute its intended business plan or generate positive operating results. The condensed consolidated financial statements do not include any adjustments related to this uncertainty and as to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result should the Company be unable to continue as a going concern.7

~~The Company’s~~CARRIER ~~management~~EQ, ~~has~~LLC ~~taken~~d/b/a ~~several~~AIRFOX ~~actions~~AND ~~in an effort to secure funding and generate revenue streams including:~~SUBSIDIARIES

1.NOTES ~~After~~TO ~~being~~CONDENSED ~~acquired~~CONSOLIDATED byFINANCIAL Via Varejo, the sole shareholder of the Company, Via Varejo has been making recurring capital contributions to both Airfox and Airfox Brazil in order to decrease the Member’s deficit and guarantee its funding. For three months ended March 31, 2021 and 2020, the Company received $3.5 million and $0, respectively. For the six months ended March 31, 2021 and 2020, the Company received $6.3 million and $0, respectively.STATEMENTS

2. Scale up the quantity of active users through marketing campaigns in social media, Via Varejo website, and at physical Casas Bahia stores (Via Varejo marketplaces). These campaigns incentivize the users to perform more transactions in the BanQi application, such as payments, online and prepaid card transactions, increasing the total payment volume.UNAUDITED

3.On ~~Offering~~June ~~different~~30, ~~products~~2021, Lake Niassa the sole member of Carrier EQ, LLC determined to discontinue the ~~users~~development inof AirTokens and end the ~~banQi~~AirToken ~~application~~project related to the Company’s business. At this time, ~~such~~the Company does not have the ability to further develop AirTokens as apart of its business plan in the absence of new ~~banking~~laws ~~wire~~or ~~method~~a definitive regulatory regime (~~"PIX"~~in both the U.S. and Brazil), ~~QR-Code~~regarding ~~payments~~the use and transferability of AirTokens (and other similar tokens issued on the Ethereum block chain that are classified as securities). Current laws and regulatory regimes do not provide for the Company to utilize the AirTokens as envisioned by the Company since AirTokens are no longer freely transferable and the previous market for AirTokens no longer exists. AirTokens were never fully developed and never gained full functionality. As previously stated, AirTokens ~~direct~~are ~~purchasing~~not ~~from~~currently ~~partner’s~~freely ~~marketplace~~transferable, and ~~personal~~no ~~loan~~market ~~credit~~exists for AirTokens.

4.As ~~Pursuing~~a ~~opportunities~~result toof ~~enter~~the Company ~~into~~discontinuing ~~service~~the ~~agreements~~development ~~with~~of ~~insurance companies~~AirTokens, ~~travel~~AirTokens ~~companies~~will lose their functionality in full, and ~~other~~it ~~service~~is ~~companies,~~likely tothat ~~use~~no ~~the~~market ~~Company~~for AirTokens ~~platform~~will asever abe ~~source~~re-created ofand ~~distribution~~that ofAirTokens ~~their~~will ~~products~~not again ever be freely transferable.

~~In addition~~Since tothe Company is no longer continuing with the ~~actions~~AirToken ~~above~~project, the Company isshould ~~evaluating~~not ~~diversifying~~recognize ~~its~~any revenue ~~streams,~~related ~~raising~~to ~~additional~~the ~~capital,~~research and ~~considering other~~development ~~actions~~of ~~that~~the ~~may~~AirToken ~~yield~~project, ~~additional~~and the ~~funding.~~deferred ~~Further,~~revenue ~~the~~is ~~Company’s~~no ~~management~~longer ~~can~~appropriate ~~implement~~to ~~expense~~be ~~reductions,~~recorded ason ~~necessary~~the balance sheet. ~~However,~~ ~~there~~The isliability no- ~~assurance~~AirToken ~~that~~Project, ~~the~~of ~~Company~~approximately $12.5 ~~will~~million bewas ~~successful~~extinguished inand ~~obtaining~~charged ~~funding~~to orOther ~~generating~~Income ~~revenues~~in ~~sufficient~~the toCondensed ~~fund~~Consolidated ~~operations~~Statements of Comprehensive Loss.

InCurrently, the Company's main functions and activities comprise of supporting banQi’s operation in Brazil, including assisting banQi with the ~~event~~management of the ~~Company~~digital iswallet ~~unable~~application and the financial services provided to ~~raise~~those ~~additional~~without ~~debt~~bank accounts or ~~equity~~credit ~~financing~~cards. Primarily due to the cancellation of the AirToken project and since the main features of the Company’s software and technology platform have been developed and funded to be applied in the Brazilian market (as per the Services Agreement and the Call Option Agreement), itthe ~~may:~~Company's main functions and activities relating to the development and management of a software technology platform consisting of a digital wallet application and an alternative credit scoring and lending application have substantially migrated to the banQi entity in Brazil.

1.In ~~Have~~connection towith ~~cease operations, in which case~~ the ~~Company~~above ~~may file a petition for bankruptcy in U.S. Bankruptcy Court under Chapter 7~~strategy, ~~whereby a trustee will be appointed to sell off~~ the Company’s is ~~assets,~~gradually ~~and~~transferring ~~the~~contracts ~~money~~with ~~will~~some besuppliers ~~used~~ to ~~pay~~Brazil ~~off~~and ~~the~~reducing ~~Company’s~~its ~~debts~~activities in ~~order of their priority. The priority of an AirToken holder seeking a refund claim should be equal to all of~~ the ~~Company’s other unsecured creditors; or~~US.

Note 2. ~~File~~- aFinancial ~~petition~~Condition ~~for~~and ~~bankruptcy in U.S. Bankruptcy Court under Chapter 11 to restructure the Company~~Management’s debt, including the Company’s debt to AirToken holders seeking refund claims. The priority of an AirToken holder seeking a refund claim, should be equal to all of the Company’s other unsecured creditors. The Chapter 11 reorganization plan will spell out rights of AirToken holders seeking refund claims and what such investors can expect to receive, if anything, from the Company. Plans

7The Company has experienced recurring losses and negative cash flows from operations. At June 30, 2021, the Company had cash and cash equivalents of $378.4 thousands, a working capital deficit of $5.4 million, and total member's deficit of $1.5 million. Additionally, the Company may be subject to other legal liabilities (see Note 13).

~~CARRIER~~The accompanying condensed consolidated financial ~~EQ,~~statements ~~LLC~~have ~~d/b/~~been prepared assuming that the Company will continue as a ~~AIRFOX~~going ~~AND~~concern, ~~SUBSIDIARIES~~which contemplates, among other things, the realization of assets and satisfaction of liabilities in the ordinary course of business.

~~NOTES~~The successful outcome of future activities cannot TObe ~~CONDENSED~~determined ~~CONSOLIDATED~~at ~~FINANCIAL~~this ~~STATEMENTS~~time and there is no assurance that, if achieved, the Company will have sufficient funds to execute its intended business plan or generate positive operating results. The condensed financial statements do not include any adjustments related to this uncertainty and as to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result should the Company be unable to continue as a going concern.

~~UNAUDITED~~In the event the Company is unable to raise additional debt or equity financing, it may:

~~COVID-19 Risks~~1. Have to cease operations, ~~Impacts~~in which case the Company may file a petition for bankruptcy in U.S. Bankruptcy Court under Chapter 7, whereby a trustee will be appointed to sell off the Company’s assets, and ~~Uncertainties~~the money will be used to pay off the Company’s debts in order of their priority. Or

On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because of a new strain of coronavirus originating in Wuhan, China (the “COVID-19 Outbreak”) and the risks to the international community as the virus spreads globally beyond its point of origin2. InFile ~~March 2020, the WHO classified the COVID-19 Outbreak as~~ a ~~pandemic,~~petition ~~based~~for onbankruptcy ~~the rapid increase~~ in ~~exposure globally~~U. ~~In Brazil, on March 20, 2020, the Governor of Sao Paulo declared a State of Public Calamity~~S. OnBankruptcy ~~March~~Court ~~21,~~under ~~the~~Chapter ~~Governor~~11 ~~of Brazil’s financial hub also issued an order requiring that all no-essential business, including Via Varejo’s stores, close their physical workplaces and facilities~~ to ~~workers,~~restructure ~~customers and~~ the public. On March 10, 2020 the Governor of Massachusetts declared a State of Emergency, and on March 23, 2020 the Governor issued an order requiring that all businesses and organizations that do not provide “COVID-19 Essential Services” close their physical workplaces and facilities to workers, customers and the public. The Governor’s order was extended to May 15, 2020. The Commonwealth’s “Reopening Massachusetts” process is underway, and as of July 6, 2020, the Commonwealth of Massachusetts entered into Phase IV, Step 2 and the Company’s ~~offices in Boston were opened on a limited basis subject to certain state mandated safety standards~~debt. While the Company expects the COVID-19 Outbreak to negatively impact its results of operations, cash flow and financial position, the related financial impact cannot be reasonably estimated at this time.

~~The Company is subject to the risks arising from the~~ COVID-19 ~~Outbreak’s social and economic impacts. The Company’s management believes that the social and economic impacts~~Risks, ~~which~~Impacts ~~include but are not limited to the following, could have a significant impact on future financial condition, liquidity,~~ and results of operations: (i) the duration and scope of the pandemic; (ii) governmental, business and individual actions that have been and continue to be taken in response to the pandemic, including travel restrictions, quarantines, social distancing, work-from-home and shelter-in-place orders and shut-downs; (iii) the impact on U.S. and global economies and the timing and rate of economic recovery; (iv) potential adverse effects on the financial markets and access to capital; (v) potential goodwill or other impairment charges; (vi) increased cybersecurity risks as a result of pervasive remote working conditions; and (vii) the Company’s ability to effectively carry out its operations due to any adverse impacts on the health and safety of the Company’s employees and their families.Uncertainties

~~In response~~On toJanuary ~~the~~30, ~~COVID-19 Outbreak~~2020, the ~~Company’s~~World ~~employees~~Health ~~have~~Organization (“WHO”) ~~been~~announced ~~required~~a toglobal ~~work~~health ~~from~~emergency ~~home.~~because ~~The~~of ~~significant~~a ~~increase~~new instrain ~~remote working,~~of ~~particularly~~coronavirus ~~for~~originating anin ~~extended~~Wuhan, ~~period~~China of(the ~~time,~~“COVID-19 Outbreak”) ~~could~~and ~~exacerbate~~the ~~certain~~ risks to the ~~Company’s~~international ~~business,~~community ~~including~~as anthe ~~increased risk~~virus ofspreads ~~cybersecurity~~globally ~~events~~beyond ~~and~~its ~~improper~~point ~~dissemination~~ of ~~personal~~origin. orIn ~~confidential~~March ~~information.~~2020, the ~~The~~WHO ~~Company~~classified ~~does~~the ~~not~~COVID-19 ~~believe~~Outbreak ~~these~~as ~~circumstances have~~a pandemic, orbased ~~will,~~on ~~materially~~the ~~adversely~~rapid ~~impact~~increase ~~the~~in ~~Company~~exposure globally. The Commonwealth’s ~~internal~~“Reopening Massachusetts” ~~controls~~process oris ~~financial~~underway. ~~reporting~~The ~~systems~~Company is subject to the risks arising from the COVID-19 Outbreak’s social and economic impacts.

~~Note 3 - Summary of Significant Accounting Policies~~8

~~Basis of~~CARRIER ~~Presentation~~EQ, LLC d/b/a AIRFOX AND SUBSIDIARIES

~~The accompanying~~NOTES ~~unaudited~~TO ~~condensed~~CONDENSED ~~consolidated~~CONSOLIDATED ~~interim~~FINANCIAL ~~financial statements (“interim statements”) of Airfox have been prepared~~STATEMENTS in accordance with accounting principles generally accepted in the United States of America (“GAAP”) as determined by Financial Accounting Standards Board (the “FASB”) within its Accounting Standards Codification (“ASC”) and under the rules and regulations of the United States Securities and Exchange Commission (“SEC”). Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments and disclosures necessary for a fair presentation of these interim statements have been included. The results reported in these interim statements are not necessarily indicative of the results that may be reported for the entire year. These interim statements should be read in conjunction with the Company’s consolidated financial statements as of and for the year ended September 30, 2020.

~~The Company has elected not to apply pushdown accounting to the accompanying standalone condensed consolidated financial statements in accordance with ASC 805 Business Combinations ("ASC 805").~~UNAUDITED

The Company’s ismanagement anbelieves ~~emerging~~that ~~growth~~the social ~~company~~and aseconomic impacts, which include but are not limited to the ~~term~~following, iscould ~~used~~have ina ~~The~~significant ~~Jumpstart~~impact ~~Our~~on ~~Business~~future ~~Startups~~financial ~~Act~~condition, liquidity, ~~enacted~~and onresults ~~April~~of 5operations: (i) the duration and scope of the pandemic; (ii) governmental, ~~2012~~business and ~~has~~individual actions that ~~elected~~have been and continue to ~~comply~~be ~~with~~taken ~~certain~~in ~~reduced~~response ~~public~~to ~~company~~the ~~reporting~~pandemic, ~~requirements~~including travel restrictions, ~~however~~quarantines, social distancing, work-from-home and shelter-in-place orders and shut-downs; (iii) the ~~Company~~impact ~~may~~on ~~adopt~~U.S. ~~accounting~~and ~~standards~~global ~~based~~economies and the timing and rate of economic recovery; (iv) potential adverse effects on the ~~effective~~financial ~~dates~~markets ~~for~~and ~~public~~access ~~entities~~to capital; (v) potential goodwill or other impairment charges; (vi) increased cybersecurity risks as a result of pervasive remote working conditions; and (vii) the Company’s ability to effectively carry out its operations due to any adverse impacts on the health and safety of the Company’s employees and their families.

8In response to the COVID-19 Outbreak, the Company’s employees have been required to work from home. The significant increase in remote working, particularly for an extended period of time, has been exacerbating certain risks to the Company’s business, including an increased risk of cybersecurity events and improper dissemination of personal or confidential information.

~~CARRIER EQ,~~Note ~~LLC~~3 ~~d/b/a~~- ~~AIRFOX~~Summary ~~AND~~of ~~SUBSIDIARIES~~Significant Accounting Policies

~~NOTES TO~~Basis ~~CONDENSED~~of ~~CONSOLIDATED FINANCIAL STATEMENTS~~ Presentation

~~UNAUDITED~~The accompanying unaudited condensed consolidated interim financial statements (“interim statements”) of Airfox have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) as determined by Financial Accounting Standards Board (the “FASB”) within its Accounting Standards Codification (“ASC”) and under the rules and regulations of the United States Securities and Exchange Commission (“SEC”). Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments and disclosures necessary for a fair presentation of these interim statements have been included. The results reported in these interim statements are not necessarily indicative of the results that may be reported for the entire year. These interim statements should be read in conjunction with the Company’s consolidated financial statements as of and for the year ended September 30, 2020.

~~Principles~~The Company has elected not to apply pushdown ofaccounting ~~Consolidation~~to the accompanying standalone condensed consolidated financial statements in accordance with ASC 805 Business Combinations ("ASC 805").

The ~~accompanying~~ ~~condensed~~Company ~~consolidated~~is ~~financial~~an ~~statements~~emerging ~~includes~~growth company as the term ~~accounts~~is ofused ~~the~~in ~~Company~~The Jumpstart Our Business Startups Act, enacted on April 5, 2012 and ~~its~~has ~~majority-owned~~elected ~~subsidiaries.~~to ~~All intercompany~~comply ~~transactions~~with ~~have~~certain ~~been~~reduced ~~eliminated~~public company inreporting ~~consolidation.~~requirements, ~~The~~however, the Company ismay ~~not~~adopt ~~involved~~accounting ~~with~~standards ~~variable~~based ~~interest~~on the effective dates for public entities.

~~The~~As of June 14, 2021, the operations of banQi were deconsolidated from the Company, ~~has~~as the Company no longer had a 99controlling interest in banQi.~~99%~~ ~~controlling~~The Company accounted for the loss in controlling interest as discontinued operations in banQi ~~Instituição~~in deaccordance ~~Pagamento~~with ~~Ltda~~Accounting ~~(formerly~~Standards ~~known~~Codification, ASC 205, Discontinued Operations and Accounting Standards Update, ASU, No. 2014-08, Reporting of Discontinued Operations and Disclosures of Disposals of Components of an Entity. ASC 205 requires that a component of an entity that has been disposed of or is classified as ~~Airfox~~held ~~Servicos~~for Esale ~~Intermediacoes~~and has operations and cash ~~LTDA)~~flows that can be clearly distinguished from the rest of the entity be reported as assets held for sale and discontinued operations. In the period a ~~100%~~component ~~interest~~of inan ~~AirToken~~entity ~~GmbH;~~has ~~accordingly~~been disposed of or classified as held for sale, the ~~Company~~results ~~consolidates~~of ~~these~~operations ~~entities~~for the periods presented are reclassified into separate line items, net of tax, in the unaudited condensed consolidated statements of comprehensive loss. Assets and ~~records~~liabilities ~~non-controlling~~are ~~interests~~also reclassified into separate line items on the related condensed consolidated balance sheets for the periods presented. The statements of cash flows for the periods presented are also reclassified to reflect the ~~economic~~results ~~interest~~ of ~~the~~discontinued ~~non-controlling~~operations ~~equity~~as ~~holders~~separate line items. OnASU ~~April~~2014-08 6requires that only a disposal of a component of an entity, ~~2020~~or a group of components of an entity, ~~Airtoked~~that ~~GmbH~~represents a ~~was~~strategic ~~dissolved~~shift that has, or will have, a major effect on the reporting entity’s operations and financial results be reported in the financial statements as discontinued operations. ASU 2014-08 also provides guidance on the financial statement presentations and disclosures of discontinued operations.

~~Use~~Due to the deconsolidation of banQi during the third quarter of ~~Estimates~~fiscal 2021, in accordance with ASC 205, Discontinued Operations, the Company has classified the results of banQi as discontinued operations in our unaudited condensed consolidated statements of operations and cash flows for all periods presented. All assets and liabilities associated with banQi were therefore classified as assets and liabilities of discontinued operations in our condensed consolidated balance sheets for the periods presented. All amounts included in the notes to the unaudited condensed consolidated financial statements relate to continuing operations unless otherwise noted. For additional information, see Note 4, Discontinued Operations.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the balance sheet and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ significantly from those estimates. The most significant accounting estimates inherent in the preparation of the Company's financial statements includes the fair values of AirTokens, issued for services and Digital Assets, estimated lives of intangible assets, intangible asset impairment, revenue recognition (including the estimated development period for completing the AirToken Project), stock-based compensation and deferred tax valuation allowance.9

~~Foreign Currency~~CARRIER EQ, LLC d/b/a AIRFOX AND SUBSIDIARIES

~~The Company~~NOTES ~~has~~TO ~~operations~~CONDENSED inCONSOLIDATED ~~Brazil~~FINANCIAL ~~where the local currency is used to prepare the financial statements which are translated into the Company’s~~STATEMENTS reporting currency, U.S. dollars. The local currency is the functional currency for the operations outside the United States. Changes in the exchange rates between this currency and the Company’s reporting currency, are partially responsible for some of the periodic changes in the condensed consolidated financial statements. Assets and liabilities of the Company’s foreign operations are translated into U.S. dollars at the spot rate in effect at the applicable reporting date. Revenues and expenses of the Company’s foreign operations are translated at the average exchange rate during the applicable period. The resulting unrealized cumulative translation adjustment is recorded as a component of accumulated other comprehensive income (loss) in stockholders’ equity. Realized and unrealized transaction gains and losses generated by transactions denominated in a currency different from the functional currency of the applicable entity are recorded in other income (loss) in the period in which they occur.

~~Revenue Recognition~~UNAUDITED

~~The Company~~Principles ~~recognizes revenue under ASC 606, Revenue from Contracts with Customers (“ASC 606”). The core principle~~ of this standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services.Consolidation

~~ASC~~Prior to June 14, 2021 the Company had a controlling ~~606~~interest ~~prescribes~~in banQi and, prior to April 6, 2020, had a 5100% interest in AirToken GmbH; accordingly, the Company consolidated these entities and records non-~~step~~controlling ~~process~~interests to ~~achieve~~reflect ~~its~~the ~~core~~economic ~~principle:~~interest of the non-controlling equity holders. On April 6, 2020, Airtoken GmbH was dissolved.

	Step 1:	Identify the contract with the customer
	Step 2:	Identify the performance obligations in the contract
	Step 3:	Determine the transaction price
	Step 4:	Allocate the transaction price to the performance obligations in the contract
	Step 5:	Recognize revenue when the Company satisfies a performance obligation

On June 14, 2021, the Company’s ownership of banQi was reduced from 99.99% to 1.43% and thus the Company effectively lost a controlling interest over banQi. The net assets of banQi were deconsolidated from the condensed consolidated financial statements on that date, and the Company's current 1.43% interest in banQi is recorded as an investment under the cost method on the Company’s condensed consolidated balance sheets.

9The change in ownership represents a transfer of net assets between entities under common control, because all entities are owned by the same common parent entity, Lake Niassa, and thus the gain on deconsolidation of banQi was recorded against accumulated deficit The Company will also record a cost method investment in banQi for their respective investment in the entity, and any previously recorded non-controlling interest will be removed from the balance sheet.

~~CARRIER~~All intercompany transactions have been eliminated ~~EQ,~~in ~~LLC~~consolidation. ~~d/b/a~~The ~~AIRFOX~~Company ~~AND~~is ~~SUBSIDIARIES~~not involved with variable interest entities.

~~NOTES TO~~Use ~~CONDENSED~~of ~~CONSOLIDATED FINANCIAL STATEMENTS~~ Estimates

~~UNAUDITED~~The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the balance sheet and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ significantly from those estimates. The most significant accounting estimates inherent in the preparation of the Company's financial statements includes, but not limited to, estimated lives of intangible assets, intangible asset impairment, revenue recognition and deferred tax valuation allowance.

~~AirToken Project~~Foreign ~~Development Services (Non ASC 606 Revenue)~~Currency

The Company ~~determined~~had ~~that~~operations ~~its~~in ~~token~~Brazil ~~issuances~~until ~~represent~~June 14, ~~obligations~~2021, where the local currency is used to ~~perform~~prepare ~~software~~the ~~development~~financial ~~services~~statements ~~and~~which ~~accounts~~are ~~for~~translated into the ~~proceeds~~Company’s reporting ~~received~~currency, inU.S. ~~the~~dollars. ~~token~~The ~~issuances~~local incurrency ~~accordance~~is ~~with~~the ~~ASC~~functional ~~730-20,~~currency ~~Research~~for ~~and~~the ~~Development~~operations –outside ~~Research~~the ~~and~~United ~~Development~~States. ~~Arrangements~~Changes in the exchange ~~(“ASC~~rates ~~730-20”).~~between Atthis currency and the ~~time~~Company’s ofreporting currency, ~~and~~are inpartially ~~conjunction~~responsible ~~with~~for some of the ~~token~~periodic ~~issuances~~changes in the condensed consolidated financial statements prior to June 14, 2021. Assets and liabilities of the Company’s ~~obligation~~foreign ~~was to develop~~operations auntil ~~live,~~June ~~operational~~14, ~~de-centralized~~2021 ~~network~~are ~~with~~translated ~~token~~into ~~functionality~~U.S. ~~including,~~dollars at athe ~~minimum,~~spot ~~features~~rate ~~including~~in aeffect ~~digital~~at ~~wallet,~~the ~~credit scoring~~applicable reporting date. Revenues and ~~peer-to-peer~~expenses of ~~networking~~the ~~(collectively,~~Company’s foreign operations are translated at the ~~“AirToken~~average ~~Project”).~~exchange ~~Due~~rate toduring the ~~significant~~applicable ~~hurdles~~period. The resulting unrealized cumulative translation adjustment is recorded as a component of accumulated other comprehensive income (loss) in ~~developing~~stockholders’ equity. ~~the~~Realized ~~AirToken~~and ~~Project,~~unrealized ~~technological~~transaction ~~feasibility~~gains ~~had~~and ~~not~~losses ~~been~~generated ~~established~~by attransactions denominated in a currency different from the ~~time~~functional currency of the ~~token~~applicable ~~issuances~~entity ~~and,~~are ~~therefore,~~recorded ~~all~~in ofother income (loss) in the ~~Company’s~~ ~~development~~period ~~costs~~in ~~were~~which ~~expensed~~they occur.

~~The Company,~~Revenue beginning in August 2017 through early October 2017, obtained Ether and Bitcoin totaling approximately $15.3 million (and cash of $0.1 million) towards the development of the AirToken Project. Pursuant to the terms of the AirTokens, there is no form of partnership, joint venture, agency or any similar relationship between a holder of an AirToken and the Company and/or other individuals or entities involved with the AirToken Project. AirTokens are non-refundable and do not pay interest and have no maturity date. AirTokens confer only the right to services in the AirToken Project and confer no other rights of any form with respect to the Company, including, but not limited to, any voting, distribution, redemption, liquidation, proprietary (including all forms of intellectual property), or other financial or legal rights. Subsequent to the distribution of AirTokens to those parties who contributed towards the funding of the AirToken Project, no AirTokens were sold by the Company.Recognition

~~Pursuant to~~The ~~the~~Company ~~Settlement~~recognizes ~~Agreement~~revenue ~~(as~~under ~~defined~~ASC ~~and~~606, Revenue from ~~described~~Contracts ~~further~~with inCustomers ~~Note~~(“ASC 12606”),. ~~the~~The ~~Company~~core principle of this standard is ~~obligated~~that toa ~~refund~~company ~~amounts~~should ~~raised~~recognize ~~for~~revenue to depict the ~~purpose~~ transfer of ~~developing~~promised goods or services to customers in an amount that reflects the ~~AirToken~~consideration ~~Project~~to ifwhich ~~valid~~the ~~claims~~company ~~are~~expects to ~~submitted~~be ~~and~~entitled ~~may~~in ~~incur~~exchange ~~other~~for ~~fines~~those ~~and~~goods ~~penalties~~or services.

~~On or~~ASC ~~before~~606 ~~December~~prescribes ~~28,~~a ~~2019, the Company paid all approved claims to approved claimants who returned their AirTokens to the Company (approximately 93.~~5%-step ofprocess the total dollar amount of all approved claim refunds). All amounts were refunded in cash and paid through the Company’s existing cash and cash equivalent reserves. The total claim amounts including interest, totaled $3.3 million on December 28, 2019. Certain approved claimants did not return their AirTokens to ~~the Company. The Company did not pay approved claims to approved claimants who did~~achieve ~~not~~its ~~return~~core their AirTokens to the Company. As of March 31, 2021, the amount that was not paid was approximately $0.2 million. All unpaid approved claims are expected to be paid during the 2021 fiscal year upon return to the Company of approved claimants’ AirTokens.principle:

The Company will recognize the remaining proceeds of $12.5 million over the remaining estimated development period of the AirToken Project until its completion. Currently, the Company is not able to estimate a date to conclude the development of the AirToken Project due to regulatory matters that affect the continuity of the development process. Due to this reason, the AirToken Project is currently on hold and no revenue has been recognized from the AirToken Project.

	Step 1:	Identify the contract with the customer
	Step 2:	Identify the performance obligations in the contract
	Step 3:	Determine the transaction price
	Step 4:	Allocate the transaction price to the performance obligations in the contract
	Step 5:	Recognize revenue when the Company satisfies a performance obligation

~~Mastercard Revenue and Sale Incentives (ASC 606 Revenue)~~10

~~On December~~CARRIER 16EQ, ~~2019,~~LLC ~~Airfox Brazil, received R$65 million (approximately U.S. $16 million in December 2019) from Mastercard Brasil Soluções de Pagamento Digital Ltda. (“Mastercard Brasil) pursuant to~~ d/b/a ~~Strategic~~AIRFOX ~~Alliance~~AND ~~and Incentive Program Agreement (the “Program Agreement”) entered into between Airfox Brazil, Mastercard Brasil and Via Varejo S.A. (“Via Varejo”) on June 12, 2019 (See Note 4).~~SUBSIDIARIES

~~Pursuant to~~NOTES ~~the~~TO ~~Program~~CONDENSED ~~Agreement,~~CONSOLIDATED ~~Airfox~~FINANCIAL ~~Brazil, as a licensee of MasterCard International, Inc. and a business partner of Mastercard Brasil,~~STATEMENTS entered into the Incentive Program (as defined in the Program Agreement) in order to issue, expand and boost the prepaid card (“Airfox Card”) base of Airfox Brazil as well as the number of transactions and turnover (sales revenue) generated by MasterCard Cards.

As a Mastercard prepaid card issuer, Airfox Brazil will be entitled to receive Sales Revenue Incentives pursuant to the Program Agreement. As a result, the Sales Revenue Incentives will be used to amortize the Sales Revenue Incentive Prepayment received on December 11, 2019. Upon complete amortization of Incentive Prepayment, Mastercard will make quarterly payments of the Sales Revenue Incentive, calculated according to the value of transactions completed with the prepaid cards issued by the Airfox Brazil. Airfox Brazil will have no minimum commitment of transaction volumes to be completed with the prepaid cards.UNAUDITED

10AirToken Project Development Services (Non ASC 606 Revenue)

~~CARRIER~~The Company determined that its token issuances EQrepresented obligations to perform software development services and accounts for the proceeds received in the token issuances in accordance with ASC 730-20, ~~LLC~~Research ~~d/b/~~and Development – Research and Development Arrangements (“ASC 730-20”). At the time of, and in conjunction with the token issuances, the Company’s obligation was to develop a ~~AIRFOX~~live, ~~AND~~operational, ~~SUBSIDIARIES~~de-centralized network with token functionality including, at a minimum, features including a digital wallet, credit scoring and peer-to-peer networking (collectively, the “AirToken Project”). Due to the significant hurdles in developing the AirToken Project, technological feasibility had not been established at the time of the token issuances and, therefore, all of the Company’s development costs were expensed.

~~NOTES~~The Company, beginning in August 2017 through TOearly ~~CONDENSED~~October ~~CONSOLIDATED~~2017, ~~FINANCIAL~~obtained ~~STATEMENTS~~Ether and Bitcoin totaling approximately $15.3 million (and cash of $0.1 million) towards the development of the AirToken Project. Pursuant to the terms of the AirTokens, there is no form of partnership, joint venture, agency or any similar relationship between a holder of an AirToken and the Company and/or other individuals or entities involved with the AirToken Project. AirTokens are non-refundable and do not pay interest and have no maturity date. AirTokens confer only the right to services in the AirToken Project and confer no other rights of any form with respect to the Company, including, but not limited to, any voting, distribution, redemption, liquidation, proprietary (including all forms of intellectual property), or other financial or legal rights. Subsequent to the distribution of AirTokens to those parties who contributed towards the funding of the AirToken Project, no AirTokens were sold by the Company.

~~UNAUDITED~~Pursuant to the Settlement Agreement (as defined and described further in Note 13), the Company was obligated to refund amounts raised for the purpose of developing the AirToken Project if valid claims were submitted.

~~The Company~~On ~~will~~or ~~recognize~~before December 28, 2019, the ~~revenue~~Company aspaid all ~~earned~~approved onclaims ato ~~monthly~~approved ~~basis,~~claimants ~~based~~who onreturned atheir ~~fixed~~AirTokens ~~percentage~~to the Company (approximately 93.5% of the total dollar ~~value~~ amount of ~~card~~all ~~transactions completed~~approved ~~during~~claim ~~the~~refunds). ~~month~~All inamounts ~~accordance~~were ~~with~~refunded ~~the~~in ~~terms~~cash inand ~~the~~paid ~~agreement.~~through ~~The~~the Company’s ~~has~~existing ~~identified~~cash ~~one~~and ~~performance~~cash ~~obligation that~~equivalent ~~meets~~reserves. ~~the~~The ~~series~~total ~~provision~~claim ~~and~~amounts ~~recognizes~~including ~~revenue~~interest, ~~over~~totaled ~~time~~$3.3 ~~The~~million ~~Company~~on ~~Sales~~December ~~incentives~~28, ~~totaling $6~~2019.7 ~~thousand~~Certain ~~and~~approved ~~$365,~~claimants ~~for~~did ~~the~~not ~~three~~return ~~months~~their ~~ended~~AirTokens ~~March~~to ~~31,~~the ~~2021~~Company. ~~and~~The ~~2020~~Company ~~respectively,~~did ~~and~~not ~~meets~~pay ~~the~~approved ~~guidance~~claims to beapproved ~~classified~~claimants aswho adid ~~series.~~not ~~The~~return ~~Company~~their ~~Sales~~AirTokens ~~incentives totaling~~to ~~$10~~the Company.1 ~~thousand~~As ~~and~~of ~~$365,~~June ~~for the six months ended March 31~~30, 2021 ~~and 2020 respectively~~, ~~and~~the ~~meets~~amount ~~the~~that ~~guidance~~was tonot bepaid ~~classified as~~was aapproximately ~~series~~$0.2 million.

~~In connection~~Effective toOctober ~~the~~1, ~~Program Agreement~~2019, the Company ~~also~~was ~~entered~~not able ~~into~~to anestimate ~~agreement~~a ~~with~~date ~~Mastercard,~~to anconclude ~~Interchange~~the ~~Manual~~development ~~(“Interchange Fee~~of ~~Agreement”)~~the ~~from~~AirToken ~~Mastercard~~Project ~~dated~~due ~~June~~to ~~18,~~regulatory ~~2019,~~matters ~~which~~that ~~details~~affect the ~~fees~~continuity ~~paid~~of bythe development aprocess. ~~merchant’s~~Due ~~bank~~ to ~~Airfox~~this ~~Brazil~~reason, ~~to compensate~~the ~~for~~AirToken ~~the~~Project ~~value~~was on hold and ~~benefits~~no ~~that~~revenue ~~merchant~~has ~~receives~~been ~~when~~recognized itfrom ~~accepts~~the ~~electronic~~AirToken ~~payments~~Project.

~~The fee~~On isJune a30, ~~specified~~2021, ~~percentage~~Lake Niassa determined to discontinue the development of AirTokens and end the ~~total~~AirToken ~~dollar~~project ~~amount~~related ofto athe ~~card~~Company’s ~~transaction~~business. At this time, ~~and~~the Company adoes ~~fixed~~not ~~percentage~~have ~~based~~the onability to further develop AirTokens as part of its business plan in the ~~type~~absence of ~~card~~new ~~transaction~~laws or a definitive regulatory regime (iin both the U.eS. ~~merchant~~and ~~type,~~Brazil) ~~national~~regarding vsthe use and transferability of AirTokens (and other similar tokens issued on the Ethereum block chain that are classified as securities). ~~international,~~Current ~~etc~~laws and regulatory regimes do not provide for the Company to utilize the AirTokens as envisioned by the Company since AirTokens are no longer freely transferable and the previous market for AirTokens no longer exists.) AirTokens were never fully developed and never gained full functionality. As previously stated, ~~based~~AirTokens onare not currently freely transferable and no market exists for AirTokens. As a result of the ~~schedule~~discontinuation of the ~~fees~~development ~~outlined~~of AirTokens, AirTokens will lose their functionality in ~~the~~full, ~~Interchange~~and ~~Fee~~it ~~Agreement~~is ~~(“Interchange~~likely that no market for AirTokens will ~~Fee~~ever ~~Revenue”)~~be re-created and that AirTokens will not again ever be freely transferable.

~~On a~~Since ~~monthly basis,~~ the Company ~~earns~~is ~~revenue~~no ~~from~~longer continuing with the ~~Interchange~~AirToken ~~Fee~~project, ~~received.~~the ~~The~~ Company has ~~identified~~not ~~one~~recognized ~~performance~~any ~~obligation that meets the series provision and recognizes~~ revenue ~~over~~related ~~time.~~to ~~Interchange~~the ~~Fee~~research ~~Revenue totaling $54.3 thousand~~ and ~~$3,717~~development ~~has~~of ~~been~~the ~~earned~~AirToken ~~for~~project, and the ~~three~~deferred ~~months~~revenue ~~ended~~is ~~March~~no ~~31,~~longer ~~2021~~appropriate ~~and~~to ~~2020,~~be ~~respectively,~~recorded ~~and~~on ~~meets~~ the ~~guidance~~balance tosheet. beThe ~~classified~~liability, asDeferred arevenue ~~series.~~- AirToken ~~Interchange~~Project, ~~Fee Revenue~~of ~~totaling~~approximately $8412.5 million ~~thousand and $3~~12,~~717~~529,824 ~~has~~are ~~been~~extinguished ~~earned~~and ~~for~~charged ~~the~~to ~~six~~Other ~~months~~Income ~~ended~~in ~~March 31, 2021 and 2020, respectively, and meets~~ the ~~guidance~~Condensed toConsolidated beStatements ~~classified~~of ~~as a series~~Comprehensive Loss.

~~Via Varejo~~Mastercard ~~Services~~Revenue ~~Agreement~~and ~~Revenue~~Sale Incentives (ASC 606 Revenue)

~~The~~On December 16, 2019, banQi, received ~~Company~~R$65 ~~entered~~million ~~into~~(approximately U.S. $16 million in December 2019) from Mastercard Brasil Soluções de Pagamento Digital Ltda. (“Mastercard Brasil”) pursuant to a ~~Services~~Strategic Alliance and Incentive Program Agreement (the “~~Services~~Program Agreement”) entered asinto ofbetween ~~September 11~~banQi, ~~2018~~Mastercard Brasil and Via Varejo S.A. (“~~the~~Via ~~Agreement Effective Date~~Varejo”) ~~with~~on ~~Via~~June ~~Varejo~~12, 2019 (~~the~~See ~~“Client”~~Note 5).

The Company has been engaged to design and develop a mobile software module and application programming interface that will provide the Client’s customers with access to certain mobile payment functionality, and that integrates banQi (“VV Wallet Services”). The Company will provide certain services, including hosting, maintenance and operation of banQi. The VV Wallet Services are structured into four phases. The Phases are - Phase 1: Specifications and Customization; Phase 2: Features; Phase 3: License and Maintenance Services and Phase 4: Rollout.11

~~The development~~CARRIER of the VV Wallet Services is considered a bundled performance obligation that includes the development of the API and software as a service which is hosted on the Company’s servers. In addition to the software as a service performance obligationEQ, ~~the~~LLC ~~Company will provide support services for the software as~~ d/b/a ~~service.~~AIRFOX ~~The~~AND Client is considered to simultaneously receive and consume the benefits provided by the Company’s performance as the Company performs the services. Accordingly, the revenue from Service Charges will be recognized over time based on the number of transactions made by Client customers with banQi. As of the date of the financial statements no revenue has been received or recognized. Revenue will not be recognized until banQi is utilized by the Client customers.SUBSIDIARIES

~~During Phase~~NOTES 1,TO ~~there~~CONDENSED ~~was~~CONSOLIDATED aFINANCIAL ~~payment of $0.3 million (“Upfront Payment”) from the Client to be recognized as revenue commencing when~~STATEMENTS the product was ready for its intended use and ratably over the remaining term of the Services Agreement through the duration of the Services Agreement. The total revenue recognized for the three months ended March 31, 2021 and 2020 totaled $12.6 thousand and $12.8 thousand, respectively. The total revenue recognized for the six months ended March 31, 2021 and 2020 totaled $24.2 thousand and $12.8 thousand, respectively.

~~Cash and Cash Equivalents~~UNAUDITED

~~The~~Pursuant to the Program Agreement, banQi, ~~Company~~as ~~considers~~a ~~all~~licensee ~~highly~~of ~~liquid~~MasterCard ~~investments~~International, ~~with~~Inc. anand ~~original~~a ~~maturity~~business partner of ~~three~~Mastercard ~~months~~Brasil, orentered ~~less~~into tothe beIncentive ~~cash~~Program ~~equivalents.~~(as ~~Cash~~defined in the Program Agreement) in order to issue, expand and ~~cash equivalents~~boost ~~consist~~the prepaid card (“Airfox Card”) base of ~~cash~~banQi, onas ~~deposit~~well as ~~with~~the ~~banks~~number of transactions and ~~money~~turnover ~~market~~(sales ~~instruments~~revenue) generated by MasterCard Cards.

As a Mastercard prepaid card issuer, banQi is entitled to receive Sales Revenue Incentives pursuant to the Program Agreement. As a result, the Sales Revenue Incentives is used to amortize the Sales Revenue Incentive Prepayment received on December 11, 2019. Upon complete amortization of Incentive Prepayment, Mastercard makes quarterly payments of the Sales Revenue Incentive, calculated according to the value of transactions completed with the prepaid cards issued by the banQi. banQi have no minimum commitment of transaction volumes to be completed with the prepaid cards.

~~CARRIER~~The revenue from the Program Agreement was recognized EQuntil June 14, ~~LLC~~2021, ~~d/b/~~the date on which the Company no longer had a ~~AIRFOX~~controlling ~~AND~~interest ~~SUBSIDIARIES~~over banQi, thus no additional revenue was recognized from that date through June 30, 2021.

~~NOTES~~The Company recognizes TOthe ~~CONDENSED~~revenue ~~CONSOLIDATED~~as ~~FINANCIAL~~earned ~~STATEMENTS~~on a monthly basis, based on a fixed percentage of the total dollar value of card transactions completed during the month in accordance with the terms in the agreement. The Company has identified one performance obligation that meets the series provision and recognizes revenue over time. The Company Sales incentives totaling $343 thousand and $10 thousand have been earned for the three and nine months ended June 30, 2021, respectively, and $3,085 and $6,802 has been earned for the three and nine months ended June 30, 2020, respectively, and meets the guidance to be classified as a series.

~~UNAUDITED~~In connection to the Program Agreement, the Company also entered into an agreement with Mastercard, an Interchange Manual (“Interchange Fee Agreement”) from Mastercard dated June 18, 2019, which details the fees paid by a merchant’s bank to banQi to compensate for the value and benefits that merchant receives when it accepts electronic payments.

~~Accounts~~The fee is a specified percentage of the total ~~Receivable~~dollar amount of a card transaction, and ~~Allowance~~a ~~for~~fixed ~~Doubtful~~percentage ~~Accounts~~based on the type of card transaction (i.e. merchant type, national vs. international, etc.), based on the schedule of fees outlined in the Interchange Fee Agreement (“Interchange Fee Revenue”).

~~Accounts receivable~~On ~~are~~a ~~recorded~~monthly atbasis, the ~~invoiced~~Company ~~amount,~~earns ~~net~~revenue from ofthe anInterchange ~~allowance~~Fee ~~for doubtful accounts~~received. The Company ~~performs~~has ~~ongoing~~identified ~~credit~~one ~~evaluations~~performance obligation that meets the series provision and recognizes ofrevenue ~~its~~over ~~customers~~time. Interchange Fee Revenue totaling $94 thousand and ~~adjusts~~$3,085 ~~credit~~has ~~limits~~been ~~based~~earned ~~upon~~for ~~payment~~the ~~history~~three months ended June 30, 2021 and 2020, respectively, and meets the ~~customer’s~~guidance ~~current~~to ~~credit~~be ~~worthiness;~~classified as a series. Interchange Fee Revenue totaling $66 thousand and ~~determines~~$6,802 has ~~the~~been ~~allowance~~earned for ~~doubtful~~the ~~accounts~~nine ~~based~~months onended ~~historical~~June ~~write-off~~30, ~~experience~~2021, ~~customer~~and ~~specific~~2020, ~~facts~~respectively, and ~~economic~~meets ~~conditions~~the guidance to be classified as a series. The revenue from the Interchange Fee Revenue was recognized until June 14, 2021, the date on which the Company no longer had a controlling interest over banQi, thus no additional revenue was recognized from that date through June 30, 2021.

~~Concentrations of~~Via ~~Credit~~Varejo ~~Risk~~Services ~~and~~Agreement ~~Off-Balance~~Revenue ~~Sheet~~(ASC 606 ~~Risk~~Revenue)

The Company isentered ~~subject~~into toa ~~concentration~~Services ~~of credit risk with respect to their cash and cash equivalents, which~~ Agreement (the ~~Company~~“Services ~~attempts~~Agreement”) toas ~~minimize by maintaining cash and cash equivalents with institutions~~ of ~~sound~~September ~~financial quality. At times~~11, ~~cash~~2018 ~~balances may exceed limits federally insured by~~ (“the ~~Federal~~Agreement ~~Deposit~~Effective ~~Insurance~~Date”) ~~Corporation.~~with AtVia ~~March~~Varejo 31, 2021, Airfox Brazil held cash, and cash equivalents totaling $4.2 million in Brazilian financial institutions. The Company had cash and cash equivalents, including amounts held in financial institutions in (the ~~USA~~ ~~and Brazil that totaled $4~~“Client”).~~9 million.~~

The Company ~~believes~~was itengaged isto ~~not~~design ~~exposed~~and todevelop a ~~significant~~mobile ~~credit~~software ~~risk~~module ~~due~~and toapplication ~~the~~programming ~~financial~~interface ~~strength~~that ofprovides the ~~depository~~Client’s ~~institutions~~customers inwith ~~which~~access ~~the~~to certain mobile ~~funds~~payment ~~are~~functionality, ~~held~~and that integrates banQi (“VV Wallet Services”). The Company ~~has~~provided nocertain ~~financial~~services, ~~instruments~~including hosting, ~~with~~maintenance ~~off~~and operation of banQi, The VV Wallet Services were structured into four phases. The Phases are -~~balance~~ ~~sheet~~Phase ~~risk~~1: ofSpecifications and ~~loss~~Customization; Phase 2: Features; Phase 3: License and Maintenance Services and Phase 4: Rollout.

~~Long-Lived~~The development of the VV Wallet Services was ~~Assets~~considered a bundled performance obligation that included the development of the API and software as a service which is hosted on the Company’s servers. In addition to the software as a service performance obligation, ~~Including~~the ~~Definite~~Company ~~Intangible~~provided ~~Assets~~support services for the software as a service. The Client was considered to simultaneously receive and consume the benefits provided by the Company’s performance as the Company performed the services. Accordingly, the revenue from Service Charges was recognized over time based on the number of transactions made by Client customers with banQi.

Long-lived assets and other indefinite-lived intangibles, are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable through the estimated undiscounted future cash flows derived from such assets. The Company’s definite-lived intangible assets primarily consist of various domain names and websites. For long-lived assets used in operations, impairment losses are only recorded if the asset’s carrying amount is not recoverable through its undiscounted, probability-weighted future cash flows. The Company measures the impairment loss based on the difference between the carrying amount and the estimated fair value. When an impairment exists, the related assets are written down to fair value.12

~~Security Deposits~~CARRIER EQ, LLC d/b/a AIRFOX AND SUBSIDIARIES

~~As of~~NOTES ~~March 31,~~TO ~~2021,~~CONDENSED ~~security~~CONSOLIDATED ~~deposits~~FINANCIAL ~~primarily include monies being held subject to a security agreement (“Security Agreement”)~~STATEMENTS with Mastercard, Inc. executed on June 7, 2019. The Security Agreement is related to the Services Agreement to ensure a minimum amount of users for the cards, as this is a major phase in the Company’s development process. On April 22, 2020 Mastercard returned $1.2 million plus interest in cash deposit to the Company. Upon Mastercard issuing the minimum number of cards to users, the $0.3 million will be paid back to the Company in full. The Company has classified this amount as non-current assets as these funds are not highly liquid and cannot be easily converted into cash.

~~Due to Related Party~~UNAUDITED

~~Amounts~~During Phase 1, there was a payment of $0.3 million ~~due~~(“Upfront Payment”) from the Client to ~~Via~~be ~~Varejo~~recognized as revenue commencing when the product was ready for its intended use and ratably over the remaining term of ~~March 31~~the Services Agreement through the duration of the Services Agreement. The total revenue recognized for the three months ended June 30, 2021 ~~are~~and 2020 totaled $8159 thousand and $12.~~0 million~~1 thousand, respectively. ~~Amounts~~The ~~are~~total ~~noninterest~~revenue ~~bearing~~recognized for the nine months ended June 30, 2021 and ~~terms~~2020 ~~with~~totaled ~~Via~~$202 ~~Varejo~~thousand ~~are~~and ~~not~~$24.9 thousand, respectively. The revenue from the Upfront ~~finalized~~Payment was recognized through June 14, 2021, the date on which the Company no longer had a controlling interest over banQi, thus no additional revenue was recognized from that date through June 30, 2021.

~~Software Development~~Cash ~~Costs~~and Cash Equivalents

The Company ~~capitalizes~~considers ~~costs~~all ~~related~~highly toliquid ~~software~~investments with ~~developed~~an ororiginal ~~obtained~~maturity ~~for~~of ~~internal~~three ~~use~~months inor ~~accordance~~less ~~with~~to ~~the~~be ~~ASC~~cash ~~350-40, Internal-Use Software (“ASC 350-40”)~~equivalents. ~~The~~Cash ~~following~~and ~~illustrates~~cash ~~the~~equivalents ~~various~~consist ~~stages~~of ~~and~~cash ~~related~~on ~~processes~~deposit ofwith ~~computer software development~~banks inand ~~accordance~~money ~~with~~market ~~ASC 350-40:~~instruments.

·Accounts Receivable and Allowance for Doubtful Accounts

●As ~~Preliminary project stage: (a) conceptual formulation~~ of ~~alternatives;~~June ~~(b)~~30, ~~evaluation~~2021, ofthere ~~alternatives;~~was ~~(c)~~a ~~determination~~minimal ofamount ~~existence~~ of ~~needed~~accounts ~~technology;~~receivable ~~and~~as ~~(d)~~the ~~final~~Company ~~selection~~no oflonger ~~alternatives.~~consolidates ~~Internal and external costs incurred during~~ the ~~preliminary~~operations ~~project~~of ~~stage are expensed as incurred~~banQi.

●Concentrations ~~Application development stage: (a) design~~ of ~~chosen~~Credit ~~path,~~Risk ~~including software configuration~~ and ~~software interfaces; (b) coding; (c) installation to hardware; and (d) testing, including parallel processing phase. Internal and external costs incurred to develop internal~~Off-~~use~~Balance Sheet ~~computer software during the application development stage are capitalized.~~Risk

●The ~~Post-implementation-operation~~Company ~~stage:~~is ~~(a)~~subject ~~training;~~to concentration of credit risk with respect to their cash and ~~(b)~~cash ~~application~~equivalents, ~~maintenance.~~which ~~Internal~~the Company attempts to minimize by maintaining cash and ~~external~~cash ~~costs~~equivalents with ~~incurred~~institutions ~~during~~of sound financial quality. At times, cash balances may exceed limits federally insured by the ~~post-implementation-operation~~Federal ~~stage~~Deposit ~~are~~Insurance Corporation. ~~expensed~~The asCompany ~~incurred~~had cash and cash equivalents, including amounts held in financial institutions in the USA that totaled $ 378 thousand.

12The Company believes it is not exposed to significant credit risk due to the financial strength of the depository institutions in which the funds are held. The Company has no financial instruments with off-balance sheet risk of loss.

~~CARRIER EQ~~Long-Lived Assets, ~~LLC~~Including ~~d/b/a~~Definite ~~AIRFOX AND SUBSIDIARIES~~Intangible Assets

~~NOTES~~Long-lived assets and other indefinite-lived intangibles TOare ~~CONDENSED~~evaluated ~~CONSOLIDATED~~for ~~FINANCIAL~~impairment ~~STATEMENTS~~whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable through the estimated undiscounted future cash flows derived from such assets. The Company’s definite-lived intangible assets primarily consist of various domain names and websites. For long-lived assets used in operations, impairment losses are only recorded if the asset’s carrying amount is not recoverable through its undiscounted, probability-weighted future cash flows. The Company measures the impairment loss based on the difference between the carrying amount and the estimated fair value. When an impairment exists, the related assets are written down to fair value.

~~UNAUDITED~~Security Deposits

~~Certain costs~~Security ~~incurred~~deposits ~~are~~primarily ~~considered~~include ~~enhancements,~~monies ~~modifications~~being held subject to ~~existing~~a ~~internal-use~~security ~~software~~agreement ~~that~~(“Security ~~result~~Agreement”) inwith ~~additional~~Mastercard, ~~functionality~~Inc. ~~Enhancements~~ ~~normally~~executed ~~require~~on ~~new~~June ~~software~~7, ~~specifications~~2019. ~~and~~The ~~may~~Security ~~also~~Agreement is ~~require~~related ato ~~change~~the Services Agreement to ~~all~~ensure ora ~~part~~minimum amount of ~~the~~users ~~existing~~for ~~software~~the ~~specifications~~cards. ~~When~~ ~~this~~On ~~additional~~April ~~functionality~~22, is2020 ~~determinable,~~Mastercard ~~the~~returned ~~related~~$1.2 ~~costs~~million ~~are~~plus ~~capitalized.~~interest ~~Otherwise,~~in ~~costs~~cash ~~are~~deposit ~~expensed~~to asthe ~~incurred~~Company. ~~Capitalization~~Upon Mastercard ofissuing ~~internal-use~~the ~~software~~minimum ~~costs~~number ~~ceases~~of ~~when~~cards ato ~~computer~~users, ~~software~~the ~~project~~$0.3 ismillion ~~substantially~~will ~~complete~~be ~~and~~paid ~~ready~~back ~~for~~to ~~its~~the ~~intended~~Company ~~use~~in full. The Company ~~begins~~has ~~amortization~~classified ~~when~~this amount ~~the~~as ~~product~~non-current isassets ~~available~~as ~~for~~these ~~general~~funds ~~release~~are ornot ~~use~~highly liquid and cannot be easily converted into cash.

~~The Company~~Included ~~has~~in ~~capitalized~~the ~~software~~security ~~costs~~deposits ~~relating~~balance toas ~~the~~of ~~Via~~June 30, ~~Varejo~~2021 ~~Services~~are ~~Agreement~~$281 ~~and~~thousand ~~began~~associated ~~amortization~~with onthe ~~January~~VV 1Wallet, ~~2020~~which ~~as the product~~ is ~~now~~being ~~ready~~operated ~~for~~by ~~its~~banQi ~~intended~~in ~~use~~Brazil. ~~and~~Airfox ~~will~~has beentered ~~amortized~~into ~~through~~discussions with ~~the~~Mastercard ~~contract~~and ~~term~~banQi ~~until~~to ~~September~~transfer ~~2023.~~this ~~The~~asset ~~amortization expense related~~ to ~~the~~banQi. ~~Via~~The ~~Varejo~~companies ~~Services~~are ~~Agreement~~still ~~capitalized~~working ~~software~~out ~~for~~ the ~~three~~final ~~months ended March 31~~details, ~~2021~~which ~~totaled~~should ~~$0.4 million,~~close prior ~~and~~to ~~for~~ the ~~six~~Airfox's ~~months~~September ~~ended March 31~~30, 2021 ~~totaled $0~~year-end.~~8 million. For both three months and six months ended March 31, 2020 the amortization expense related to the Via Varejo Service Agreement capitalized software was $0.2 million.~~

~~The Company~~Investment ~~capitalizes~~in ~~costs~~ related to the development and maintenance of its website in accordance with ASC 350-50, Website Development Costs. Accordingly, costs expensed as incurred include planning the website, developing the applications and infrastructure until technological feasibility is established, developing graphics such as borders, background and text colors, fonts, frames and buttons, and operating the site such as training administration and maintenance.affiliate

~~Capitalizing~~After the deconsolidation of banQi, the Company's ~~Software~~remaining ~~Costs~~investment in ~~Connection~~banQi ~~with~~of ~~Hosting~~$252 ~~Arrangements~~thousand is recorded on the cost method, since the Company no longer has control of banQi and ~~Software~~has an ownership percentage of 1.43% as aof ~~Service~~June ~~Arrangements~~30, 2021.

~~The Company~~Due ~~develops certain software that are considered~~ to beRelated part of cloud computing arrangement (or hosting arrangement), whereby, a user or a customer of software does not take possession of the Company’s software; rather, the software is accessed on an as-needed basis over the Internet.Party

~~Therefore, when~~Amounts ~~the~~due ~~software is used~~ to ~~produce~~banQi aas ~~product~~of orJune 30, in2021 aare ~~process~~$5.5 million ~~to provide a service to a customer,~~ and have ~~the~~been ~~customer~~calculated isbased ~~not~~on ~~given~~ the ~~right~~ toloan ~~obtain~~agreements orbetween ~~use~~ the ~~software,~~companies. ~~the~~The ~~related~~loan ~~costs~~must ~~are~~be ~~accounted~~refunded for inits ~~accordance~~amount ~~with~~in ~~ASC~~Brazilian ~~350-40. When a hosting arrangement includes~~currency ~~multiple~~(Real) ~~modules~~until orApril, ~~components~~2025, ~~capitalized costs are amortized on a module-~~by~~-module~~ ~~basis. When~~ a ~~module~~single orpayment ~~component~~(principal isplus ~~substantially ready~~accrued ~~for~~interest) ~~its~~or ~~intended~~by ~~use,~~advance ~~amortization~~payments. ~~begins,~~The ~~regardless~~current ofinterest ~~whether~~rate determined in the ~~overall~~agreements ~~hosting arrangement~~ is ~~being~~1.0% ~~placed~~per inyear ~~service~~and, ~~in planned~~as ~~stages. If~~ the ~~module’s~~debt ~~functionality~~amount is ~~entirely~~in ~~dependent~~Brazilian oncurrency, the ~~completion~~effect of ~~one~~exchange orvariation ~~more~~is ~~other~~also ~~modules~~considered, totaling ~~then~~$92 ~~amortization does~~thousand ~~not~~and ~~begin~~$47 ~~until~~thousand, ~~that~~for ~~group~~the ofthree ~~interdependent~~and ~~modules~~nine ismonths ~~substantially~~ended ~~ready~~June ~~for~~30, ~~use~~2020, respectively.

~~Impairment of Long-term Assets~~13

~~The Company~~CARRIER ~~evaluates~~EQ, ~~the~~LLC ~~recoverability~~d/b/a ofAIRFOX ~~tangible~~AND ~~and intangible assets periodically by taking into account events or circumstances that may warrant revised estimates of useful lives or that indicate the asset may be impaired.~~SUBSIDIARIES

~~Leases~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The Company categorizes leases at their inception as either operating or finance leases based on the criteria in ASC 842, Leases (“ASC 842”). The Company adopted ASC 842 on October 1, 2019, using the modified retrospective approach, and has established a Right-of-Use (“ROU”) Asset and a current and non-current Lease Liability for each lease arrangement identified. The lease liability is recorded at the present value of future lease payments discounted using the discount rate that approximates the Company’s incremental borrowing rate for the lease established at the commencement date, and the ROU asset is measured as the lease liability plus any initial direct costs, less any lease incentives received before commencement. The Company recognizes a single lease cost, so that the remaining cost of the lease is allocated over the remaining lease term on a straight-line basis.UNAUDITED

~~Advertising~~Software Development Costs

~~Advertising costs~~The ~~are~~Company ~~expensed~~capitalizes ascosts ~~incurred~~related ~~and~~to ~~included~~software developed inor ~~selling,~~obtained ~~general~~for ~~and~~internal ~~administrative~~use ~~expenses~~in ~~and~~accordance ~~amounted~~with ~~to $0.4 million and $0.2 million for~~ the ~~three~~ASC ~~months~~350-40, ~~ended~~Internal-Use ~~March~~Software ~~31,~~(“ASC ~~2021~~350-40”). ~~and~~The following ~~2020,~~illustrates ~~respectively~~the ~~and~~various ~~$0.7~~stages ~~million~~ and ~~$0.4~~related ~~million~~processes ~~for~~of ~~the~~computer ~~six~~software ~~months~~development ~~ended~~in ~~March 31,~~accordance ~~2021~~with ~~and~~ASC ~~2020, respectively.~~350-40:

13·

~~CARRIER EQ,~~● ~~LLC~~Preliminary ~~d/b/~~project stage: (a) ~~AIRFOX~~conceptual ~~AND~~formulation ~~SUBSIDIARIES~~of alternatives; (b) evaluation of alternatives; (c) determination of existence of needed technology; and (d) final selection of alternatives. Internal and external costs incurred during the preliminary project stage are expensed as incurred.

~~NOTES TO~~● ~~CONDENSED~~Application ~~CONSOLIDATED~~development ~~FINANCIAL~~stage: ~~STATEMENTS~~(a) design of chosen path, including software configuration and software interfaces; (b) coding; (c) installation to hardware; and (d) testing, including parallel processing phase. Internal and external costs incurred to develop internal-use computer software during the application development stage are capitalized.

~~UNAUDITED~~● Post-implementation-operation stage: (a) training; and (b) application maintenance. Internal and external costs incurred during the post-implementation-operation stage are expensed as incurred.

~~Income~~Certain costs incurred are considered enhancements, ~~Taxes~~modifications to existing internal-use software that result in additional functionality. Enhancements normally require new software specifications and may also require a change to all or part of the existing software specifications. When this additional functionality is determinable, the related costs are capitalized. Otherwise, costs are expensed as incurred. Capitalization of internal-use software costs ceases when a computer software project is substantially complete and ready for its intended use. The Company begins amortization when the product is available for general release or use.

~~Income taxes are recorded in accordance with ASC 740, Income Taxes (“ASC 740”), which provides for deferred taxes using an asset and liability approach.~~ The Company ~~recognizes~~has ~~deferred~~capitalized ~~tax~~software ~~assets~~costs ~~and~~relating ~~liabilities~~to ~~for~~ the ~~expected~~Via ~~future~~Varejo ~~tax consequences~~Services ofAgreement ~~events that have been included in the financial statements or tax returns. Deferred tax assets~~ and ~~liabilities~~began ~~are~~amortization ~~determined based~~ on ~~the~~January ~~difference~~1, ~~between~~2020 as the ~~financial~~product ~~statement~~was ~~and~~ready ~~tax~~for ~~basis~~its ofintended ~~assets~~use and ~~liabilities~~has ~~using~~been ~~enacted~~amortized ~~tax~~through ~~rates in effect for~~ the ~~year~~contract interm ~~which~~until ~~the~~September ~~differences are expected to reverse~~2023. ~~Valuation~~The ~~allowances~~amortization ~~are~~expense ~~provided,~~related ifto ~~based upon~~ the ~~weight~~Via ofVarejo ~~available~~Services ~~evidence, it~~Agreement iscapitalized ~~more~~software ~~likely~~for ~~than~~the ~~not~~three ~~that~~and nine ~~some~~months orended ~~all~~June of30, ~~the~~2021 ~~deferred~~totaled ~~tax~~$0.4 million ~~assets~~and ~~will~~$1.4 ~~not~~million, ~~be realized~~respectively.

The Company ~~accounts~~capitalizes ~~for~~costs ~~uncertain~~related ~~tax~~to ~~positions in accordance with~~ the ~~provisions of ASC 740. When uncertain tax positions exist, the Company~~ ~~recognizes~~development ~~the~~and ~~tax~~maintenance ~~benefit~~ of ~~tax~~its ~~positions~~website toin ~~the~~accordance ~~extent~~with ~~that~~ASC ~~the~~350-50, ~~benefit~~Website ~~would~~Development ~~more~~Costs. ~~likely~~Accordingly, ~~than~~costs expensed ~~not~~as beincurred ~~realized~~include ~~assuming~~planning ~~examination by~~ the ~~taxing~~website, ~~authority.~~developing ~~The determination as to whether~~ the ~~tax~~applications ~~benefit~~and ~~will~~infrastructure ~~more~~until ~~likely~~technological ~~than~~feasibility ~~not be realized~~ is established ~~based~~and ~~upon~~operating the ~~technical merits~~site ofsuch ~~the tax position~~ as ~~well~~training asadministration ~~consideration of the available facts~~ and ~~circumstances~~maintenance. ~~The Company recognizes any interest and penalties accrued related to unrecognized tax benefits as income tax expense.~~

~~Deferred~~Included in the net intangibles balance as of ~~gain~~June on30, ~~issuance~~2021 are $3,295,256 of ~~AirTokens~~capitalized ~~for~~software ~~services~~costs (Note 7) associated with the VV Wallet, which is being operated by banQi in Brazil. Thus, Airfox has entered into discussions with Via Varejo and Lake Niassa to transfer these assets to banQi. The companies are still working out the final details, which should close prior to Airfox's September 30, 2021 year-end. In addition, effective June 14, 2021, Airfox ceased recognizing amortization expense on these capitalized software costs..

~~AirTokens issued~~Capitalizing toSoftware ~~vendors~~Costs ~~for services~~ in ~~connection with raising monies for the purpose of developing the AirToken Project are accounted for~~Connection ~~in accordance~~ with ~~ASC~~Hosting ~~845-30-1,~~Arrangements ~~Nonmonetary Transactions, which requires that the AirTokens to be recognized at fair value,~~ and ~~resulted in~~Software recognizing a deferred gain of approximately $1.7 million in October 2017. The fair value of the AirTokens issued was based on the last price paid ($0.02) by initial investors in acquiring AirTokens towards the development of the AirToken Project (representing a Level 3 non-recurring measurement). The deferred gain will be recognized on a straight-line basis over the estimated development period of the AirToken Project as this represents the best depiction of the measure of progress towards the development of the AirToken Project. The Company will recognize the gain in Other Income beginning October 2017 through the estimated development period of the AirToken Project. Currently, the Company is not able to estimate a ~~date~~Service to conclude the development of the AirToken Project due to regulatory matters that affect the continuity of the development process. Due to this reason, the AirToken Project is currently on hold and recognition of deferred gains ceased on September 30, 2019.Arrangements

~~Distinguishing~~For the operation in Brazil at banQi, the Company ~~Liabilities~~developed ~~from~~certain ~~Equity~~software that are considered to be part of cloud computing arrangement (or hosting arrangement), whereby, a user or a customer of software does not take possession of the Company’s software; rather, the software is accessed on an as-needed basis over the Internet.

~~The~~Therefore, when the software is used to produce ~~Company~~a ~~relies~~product onor ~~the~~in ~~guidance~~a ~~provided~~process byto ~~ASC~~provide ~~480, Distinguishing~~a ~~Liabilities~~service ~~from~~to ~~Equity~~a customer, and the customer is not given the right to ~~classify~~obtain ~~certain~~or ~~redeemable~~use the software, ~~and/or~~the ~~convertible~~related ~~instruments.~~costs ~~The~~are ~~Company~~accounted ~~first~~for ~~determines~~in ~~whether~~accordance with ASC 350-40. When a ~~financial~~hosting ~~instrument~~arrangement ~~should~~includes bemultiple ~~classified~~modules asor components, capitalized costs are amortized on a ~~liability~~module-by-module basis. ~~The Company~~When ~~will~~a ~~determine~~module ~~the~~or ~~liability~~component ~~classification~~is ifsubstantially ~~the~~ready ~~financial~~for ~~instrument~~its isintended ~~mandatorily~~use, amortization ~~redeemable~~begins, orregardless ifof whether the ~~financial~~overall ~~instrument, other~~hosting ~~than~~arrangement ~~outstanding~~is ~~shares,~~being ~~embodies~~placed ain ~~conditional~~service ~~obligation~~in ~~that~~planned stages. If the ~~Company~~module’s functionality ~~must~~is entirely dependent on the completion of one or ~~may~~more ~~settle~~other bymodules, ~~issuing~~then aamortization ~~variable~~does ~~number~~not ofbegin until that group ~~its~~of ~~equity~~interdependent ~~shares~~modules is substantially ready for use.

~~Once the~~Impairment Company determines that a financial instrument should not be classified as a liability, the Company determines whether the financial instrument should be presented between the liability section and the equity section of ~~the~~Long-term balance sheet. The Company will determine temporary equity classification if the redemption of the financial instrument is outside the control of the Company (i.e., at the option of the holder). Otherwise, the Company accounts for the financial instrument as permanent equity.Assets

The Company ~~records~~evaluates ~~its~~the ~~financial~~recoverability ~~instruments~~of ~~classified~~tangible and asintangible ~~liability,~~assets ~~temporary~~periodically ~~equity~~by taking into account events or ~~permanent~~circumstances ~~equity~~that atmay ~~issuance~~warrant atrevised ~~the~~estimates ~~fair~~of ~~value,~~ useful lives or that ~~cash~~indicate ~~received~~the asset may be impaired.

The Company records its financial instruments classified as liabilities at their fair value at each subsequent measurement date. The changes in fair value of these financial instruments are recorded as other expense/income.14

~~Hedging~~CARRIER EQ, LLC d/b/a AIRFOX AND SUBSIDIARIES

~~The Company~~NOTES ~~does~~TO ~~not~~CONDENSED ~~use~~CONSOLIDATED ~~derivative~~FINANCIAL ~~instruments to hedge exposures to cash flows, market or foreign currency risks. The Company evaluates~~STATEMENTS ~~its financial instruments, including equity-linked financial instruments, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives.~~

14UNAUDITED

~~CARRIER EQ, LLC d/b/a AIRFOX AND SUBSIDIARIES~~Leases

~~NOTES~~The Company categorizes leases at their inception TOas ~~CONDENSED~~either ~~CONSOLIDATED~~operating ~~FINANCIAL~~or ~~STATEMENTS~~finance leases based on the criteria in ASC 842, Leases (“ASC 842”). The Company adopted ASC 842 on October 1, 2019, using the modified retrospective approach, and has established a Right-of-Use (“ROU”) Asset and a current and non-current Lease Liability for each lease arrangement identified. The lease liability is recorded at the present value of future lease payments discounted using the discount rate that approximates the Company’s incremental borrowing rate for the lease established at the commencement date, and the ROU asset is measured as the lease liability plus any initial direct costs, less any lease incentives received before commencement. The Company recognizes a single lease cost, so that the remaining cost of the lease is allocated over the remaining lease term on a straight-line basis.

~~UNAUDITED~~Advertising

~~Stock-based~~Advertising costs are expensed as incurred and included in selling, general ~~Compensation~~and administrative expenses and amounted to a reversal of $0.7 million and expenses of $ 29 thousand for the three months ended June 30, 2021 and 2020, respectively and expenses of $179 thousand and $75 thousand for the nine months ended June 30, 2021 and 2020, respectively.

~~The Company~~Income accounts for stock-based compensation to employees and non-employees in conformity with the provisions of ASC 718, Compensation - Stock Based Compensation. The Company expenses stock-based compensation to employees and non-employees over the requisite service period based on the estimated grant-date fair value of the awards. The Company accounts for forfeitures as they occur. Stock-based awards are recognized on a straight-line basis over the requisite service period. For stock-based employee compensation cost recognized at any date will be at least equal to the amount attributable to share-based compensation that is vested at that date. The Company estimates the fair value of stock option grants using the Black-Scholes option-pricing model and the assumptions used in calculating the fair value of stock-based awards represent management’s best estimates and involve inherent uncertainties and the application of management’s judgment.Taxes

~~Common~~Income taxes are recorded in accordance with ASC ~~shares~~740, Income ~~issued~~Taxes (“ASC to740”), ~~third~~which ~~parties~~provides for ~~services~~deferred ~~provided~~taxes using an asset and liability approach. The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Deferred tax assets and liabilities are ~~valued~~determined based on the ~~estimated~~difference ~~fair~~between ~~value~~the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the ~~Company’s~~year ~~common~~in ~~shares~~which the differences are expected to reverse. Valuation allowances are provided, if based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

~~All stock-based~~The ~~compensation~~Company ~~costs~~accounts ~~are~~for ~~recorded~~uncertain tax positions in ~~selling,~~accordance ~~general~~with ~~and~~the ~~administrative~~provisions ~~expenses~~of inASC 740. When uncertain tax positions exist, the ~~consolidated~~Company ~~statements~~recognizes the tax benefit of ~~operations~~tax positions to the extent that the benefit would more likely than not be realized assuming examination by the taxing authority. The determination ~~All~~as ~~stock-~~to whether the tax benefit will more likely than not be realized is based ~~compensation~~upon ~~awards~~the ~~were~~technical ~~cancelled~~merits ~~pursuant~~of tothe tax position as well as consideration of the ~~Transactions~~available ~~which~~facts ~~occurred~~and oncircumstances. ~~May~~The ~~21,~~Company ~~2020~~recognizes any interest and penalties accrued related to unrecognized tax benefits as income tax expense.

~~In August~~Gain ~~2020,~~on ~~the~~issuance ~~Company established the Share Based Payment Program with Cash Settlement - Phantom Shares~~ of ~~Via~~AirTokens ~~Varejo~~for S.A. (the "Plan"). Pursuant to the Plan, the Company's Board of Directors may grant cash-settled shares, referred to as "Phantom Shares," to the Company's employees as part of the employees' remuneration package. Each Phantom Share will represent the employee's right to receive the full amount corresponding to the average quotation of 3 (three) common shares of Via Varejo S.A. in the 20 (twenty) trading sessions at B3 - Brazil, Bolsa, Balcão immediately prior to vesting, as established in the Plan. The Phantom Shares vest over a service period of five years. services

~~The Phantom~~AirTokens ~~Shares~~issued ~~are~~to ~~accounted~~vendors for asservices ~~liability~~in ~~awards~~connection with ~~and~~raising ~~are~~monies ~~re-measured~~for atthe ~~fair~~purpose ~~value~~of ~~each~~developing ~~reporting~~the ~~period~~AirToken Project were accounted for in accordance with ~~the~~ASC ~~corresponding~~845-30-1, ~~compensation~~Nonmonetary ~~expense~~Transactions, ~~being~~which ~~recognized~~requires ~~over~~that the ~~requisite~~AirTokens ~~service~~to ~~period.~~be Asrecognized ofat ~~March 31,~~fair ~~2021,~~value ~~the~~and ~~aggregate~~resulted ~~estimated~~in ~~fair~~recognizing ~~value~~a ofdeferred ~~the~~gain ~~Phantom~~of approximately ~~Shares~~$1.7 ~~was~~million ~~$39~~in October 2017.6 ~~thousands,~~The ~~and~~fair ~~the~~value ~~Company~~of ~~has~~the ~~recognized~~AirTokens ~~$6.8~~issued ~~thousands~~was ofbased ~~compensation~~on ~~expense.~~the Nolast ~~Phantom~~price ~~Shares~~paid ~~have~~($0.02) ~~vested~~by asinitial ~~of March 31,~~investors ~~2021~~in acquiring.

~~Fair~~On June 30, 2021, Lake Niassa determined to discontinue ~~Value~~the ~~Measurement~~development of AirTokens and end the AirToken project related to the Company’s business. At this time, the Company does not have the ability to further develop AirTokens as part of its business plan in the absence of new laws or a definitive regulatory regime (in both the U.S. and Brazil) regarding the use and transferability of AirTokens (and other similar tokens issued on the Ethereum block chain that are classified as securities). Current laws and regulatory regimes do not provide for the Company to utilize the AirTokens as envisioned by the Company since AirTokens are no longer freely transferable and the previous market for AirTokens no longer exists. AirTokens were never fully developed and never gained full functionality. As previously stated, AirTokens are not currently freely transferable, and no market exists for AirTokens. As a result of the Company discontinuing the development of AirTokens, AirTokens will lose their functionality in full, and it is likely that no market for AirTokens will ever be re-created and that AirTokens will not again ever be freely transferable.

~~The~~ Since the Company’s ~~financial~~is ~~instruments~~no ~~include~~longer ~~cash~~continuing ~~and~~with the ~~cash~~AirToken ~~equivalents~~project, ~~accounts~~the ~~receivable,~~Company ~~accounts~~should ~~payable~~not ~~and~~recognize ~~short~~any revenue related to the research and ~~long-term~~development of the AirToken project, and ~~debt~~the deferred revenue is no longer appropriate to be recorded on the balance sheet. The ~~fair~~liability, ~~values~~Deferred ofrevenue ~~cash~~- ~~and~~AirToken ~~cash~~Project, of ~~equivalents~~approximately $13 million, ~~accounts~~as ~~receivable~~of June 30, ~~and~~2021, ~~accounts~~was ~~payable~~extinguished ~~approximate~~and ~~their~~charged ~~stated~~to ~~amounts~~Other ~~because of~~Income in the ~~short~~Condensed ~~maturity~~Consolidated Statements of ~~these~~Comprehensive ~~financial instruments~~Loss.

The valuation hierarchy is composed of three levels. The classification within the valuation hierarchy is based on the lowest level of input that is significant to the fair value measurement. The levels within the valuation hierarchy under ASC 820 are described below:15

	Level 1 —	Assets and liabilities with unadjusted, quoted prices listed on active market exchanges. Inputs to the fair value measurement are observable inputs, such as quoted prices in active markets for identical assets or liabilities.
	Level 2 —	Inputs to the fair value measurement are determined using prices for recently traded assets and liabilities with similar underlying terms, as well as direct or indirect observable inputs, such as interest rates and yield curves that are observable at commonly quoted intervals.
	Level 3 —	Inputs to the fair value measurement are unobservable inputs, such as estimates, assumptions, and valuation techniques when little or no market data exists for the assets or liabilities.

CARRIER EQ, LLC d/b/a AIRFOX AND SUBSIDIARIES

~~Adoption of~~NOTES ~~Recent~~TO ~~Accounting~~CONDENSED ~~Pronouncements~~CONSOLIDATED FINANCIAL STATEMENTS

In February 2016, the FASB established Topic 842, Leases, by issuing ASU No. 2016-02 (“ASU 2016-02”), which requires lessees to recognize leases on the balance sheet and disclose key information about leasing arrangements. Topic 842 was subsequently amended by ASU No. 2018-01, Land Easement Practical Expedient for Transition to Topic 842; ASU No. 2018-10, Codification Improvements to Topic 842, Leases; ASU No. 2018-11, Targeted Improvements; and ASU No. 2018-20, Narrow-Scope Improvements for Lessors. The new standard establishes a right-of-use model (“ROU”) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement.UNAUDITED

15Distinguishing Liabilities from Equity

~~CARRIER~~The Company relies on the guidance provided by EQASC 480, Distinguishing ~~LLC~~Liabilities dfrom Equity, to classify certain redeemable and/b/or convertible instruments. The Company first determines whether a ~~AIRFOX~~financial ~~AND~~instrument ~~SUBSIDIARIES~~should be classified as a liability. The Company will determine the liability classification if the financial instrument is mandatorily redeemable, or if the financial instrument, other than outstanding shares, embodies a conditional obligation that the Company must or may settle by issuing a variable number of its equity shares.

~~NOTES~~Once the Company determines that a financial instrument TOshould ~~CONDENSED~~not ~~CONSOLIDATED~~be ~~FINANCIAL~~classified ~~STATEMENTS~~as a liability, the Company determines whether the financial instrument should be presented between the liability section and the equity section of the balance sheet. The Company will determine temporary equity classification if the redemption of the financial instrument is outside the control of the Company (i.e., at the option of the holder). Otherwise, the Company accounts for the financial instrument as permanent equity.

~~UNAUDITED~~The Company records its financial instruments classified as liability, temporary equity or permanent equity at issuance at the fair value, or cash received.

The ~~Company~~ ~~adopted ASU 2016-02 effective October 1, 2019 using the modified retrospective approach whereby the~~ Company ~~will~~records ~~continue~~its ~~to present prior period~~ financial ~~statements and disclosures under ASC 840. In addition, the Company elected the transition package of three~~instruments ~~practical~~classified ~~expedients~~as ~~permitted~~liabilities ~~within~~at ~~the~~their ~~standard,~~fair ~~which~~value ~~eliminates~~at ~~the~~each ~~requirements~~subsequent tomeasurement ~~reassess prior conclusions about lease identification, lease classification and initial direct costs~~date. ~~Further,~~The ~~the~~changes ~~Company~~in ~~adopted~~fair avalue ~~short-term lease exception policy, permitting the Company to not apply the recognition requirements~~ of ~~this~~these ~~standard~~financial ~~to short-term leases (i.e. leases with terms of 12 months or less) and an~~instruments ~~accounting~~are ~~policy~~recorded ~~to account for lease and non-lease components~~ as aother ~~single component for certain classes of assets~~expense/income.

Adoption of the new standard resulted in the recording of right-of-use assets and lease liabilities related to the Company’s operating leases, totaling $2.3 and $2.4 million, respectively, recorded on the Company’s consolidated balance sheet as of October 1, 2019. The standard did not materially affect the Company's consolidated net earnings or cash flows.Hedging

~~In August~~The ~~2018,~~Company ~~the~~does ~~FASB~~not ~~issued~~use ~~ASU~~derivative ~~2018-13,~~instruments to ~~Fair~~hedge ~~Value~~exposures ~~Measurement (Topic 820): Disclosure Framework – Changes~~ to ~~the~~cash ~~Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”)~~flows, ~~which~~market ~~amends~~or ~~disclosure~~foreign ~~requirements~~currency ~~on fair value measurements in Topic 820~~risks. ~~This~~The ~~amendment~~Company ~~modifies~~evaluates ~~the~~its ~~valuation~~financial ~~process of fair value measurements by removing the disclosure requirements for the valuation processes for Level 3 fair value measurements~~instruments, ~~clarifying the timing of the measurement uncertainty disclosure, and~~ including ~~the~~ ~~changes in unrealized gains and losses for recurring Level 3 fair value measurements in other comprehensive income if held at the~~equity-linked ~~end~~financial ofinstruments, ~~the reporting period. It also allows the disclosure of other quantitative information in lieu of the weighted average of significant unobservable inputs used~~ to ~~develop~~determine ~~Level~~if 3such ~~fair~~instruments ~~value measurements. The amendments in this ASU~~ are ~~effective~~derivatives ~~for~~or ~~fiscal~~contain ~~years~~features ~~beginning after~~that ~~December~~qualify ~~15,~~as ~~2019~~embedded ~~and should be applied prospectively for the most recent period presented in the initial fiscal year of adoption~~derivatives. ~~The Company adopted ASU 2018-13 effective October 1, 2020 and there was no material impact on the Company's results of operations, financial position and cash flows.~~

~~In August 2018, the FASB issued ASU 2018~~Stock-~~15, Intangibles, Goodwill and Other (Subtopic 350-40): Customer’s Accounting for Implementation~~based Costs Incurred in a Cloud Computing Arrangement that is a Service Contract (“ASU 2018-15”), which requires implementation costs incurred by customers in cloud computing arrangements to be deferred and recognized over the term of the arrangement, if those costs would be capitalized by the customer in a software licensing arrangement under the internal-use software guidance in ASC 350-40. The new standard is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The Company adopted ASU 2018-15 effective October 1, 2020 and there was no material impact on the Company's results of operations, financial position and cash flows.Compensation

~~Recent~~The Company accounts for stock-based compensation ~~Accounting~~to ~~Pronouncements~~employees and non-employees in conformity with the provisions of ASC 718, Compensation - Stock Based Compensation. The Company expenses stock-based compensation to employees and non-employees over the requisite service period based on the estimated grant-date fair value of the awards. The Company accounts for forfeitures as they occur. Stock-based awards are recognized on a straight-line basis over the requisite service period. For stock-based employee compensation cost recognized at any date will be at least equal to the amount attributable to share-based compensation that is vested at that date. The Company estimates the fair value of stock option grants using the Black-Scholes option-pricing model and the assumptions used in calculating the fair value of stock-based awards represent management’s best estimates and involve inherent uncertainties and the application of management’s judgment.

~~The Company~~Common ~~continually~~shares ~~assesses~~issued ~~any new accounting pronouncements~~ to ~~determine~~third ~~their~~parties ~~applicability.~~for ~~When it is determined that a new accounting~~services ~~pronouncement~~provided ~~affects~~are ~~the~~valued ~~Company's~~based ~~financial~~on ~~reporting,~~ the ~~Company~~estimated ~~undertakes~~fair avalue ~~study to determine the consequences~~ of the ~~change to its condensed consolidated financial statements and assures that there are proper controls in place to ascertain that the~~ Company'’s ~~condensed consolidated~~common ~~financial statements properly reflect the change~~shares.

~~In June~~All ~~2016, the FASB issued ASU 2016~~stock-~~13,~~based ~~Financial~~compensation ~~Instruments~~costs —are ~~Credit Losses (Topic 326): Measurement of Credit Losses on Financial~~recorded ~~Instruments,~~in ~~that changes the impairment model for most financial assets and certain other instruments. For receivables~~selling, ~~loans~~general and ~~other~~ ~~instruments,~~administrative ~~entities~~expenses ~~will be required to use a new forward-looking “expected loss” model that generally will result~~ in the ~~earlier~~consolidated ~~recognition~~statements of ~~allowance for losses~~operations. InAll ~~addition,~~stock-based ancompensation ~~entity~~awards ~~will~~were cancelled ~~have~~pursuant to ~~disclose significantly more information about allowances and credit quality indicators. The new standard is effective for~~ the ~~Company~~Transactions ~~for~~which ~~fiscal~~occurred ~~years beginning after December 15, 2022. The Company is currently evaluating the impact of the pending adoption of the new standard~~ on ~~its~~May ~~condensed consolidated financial statements and intends to adopt the standard on October 1~~21, ~~2023~~2020.

In ~~December~~ ~~2019~~August 2020, the ~~FASB~~Company ~~issued~~established ~~ASU~~the ~~2019-12,~~Share Based ~~Income~~Payment ~~Taxes~~Program ~~(Topic~~with ~~740):~~Cash ~~Simplifying~~Settlement ~~the~~- ~~Accounting~~Phantom ~~for~~Shares ~~Income~~of ~~Taxes~~Via Varejo S.A. (~~"ASU~~the ~~2019-12~~"Plan"). Pursuant to the Plan, ~~which~~ ~~modifies~~the ~~ASC~~Company's Board ~~740~~of toDirectors ~~reduce~~may ~~complexity~~grant ~~while~~cash-settled ~~maintaining~~shares, orreferred ~~improving~~to ~~the~~as ~~usefulness~~"Phantom ofShares," to the ~~information~~Company's ~~provided~~employees toas ~~users~~part of ~~financial~~the ~~statements~~employees' remuneration package. ~~ASU~~Each ~~2019-12~~Phantom isShare ~~effective~~will ~~for~~represent the ~~Company~~employee's ~~for~~right ~~interim~~to ~~and~~receive ~~annual~~the ~~reporting~~full ~~periods~~amount ~~beginning~~corresponding ~~after~~to ~~December~~the average ~~15,~~quotation ~~2021.~~of ~~The Company~~3 is(three) ~~currently~~common ~~assessing~~shares of Via Varejo S.A. in the ~~impact~~20 of(twenty) ~~ASU~~trading ~~2019~~sessions at B3 -12 Brazil, ~~but~~Bolsa, itBalcão immediately isprior ~~not~~to ~~expected~~vesting, toas ~~have~~established ain ~~material~~the ~~impact~~Plan. onThe ~~the~~Phantom ~~Company’s~~Shares ~~condensed consolidated~~vest ~~financial~~over ~~statement~~a service period of five years.

16As of June 14, 2021, there is no liability reported related to the Phantom Shares due the deconsolidation of banQi. No Phantom Shares have vested as of June 30, 2021.

~~CARRIER EQ, LLC d/b/a AIRFOX AND SUBSIDIARIES~~16

~~NOTES TO~~CARRIER ~~CONDENSED~~EQ, ~~CONSOLIDATED~~LLC ~~FINANCIAL~~d/b/a ~~STATEMENTS~~AIRFOX AND SUBSIDIARIES

~~UNAUDITED~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

In August 2020, the FASB issued ASU No. 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplifies an issuer’s accounting for convertible instruments by reducing the number of accounting models that require separate accounting for embedded conversion features. ASU 2020-06 also simplifies the settlement assessment that entities are required to perform to determine whether a contract qualifies for equity classification and makes targeted improvements to the disclosures for convertible instruments and earnings-per-share (EPS) guidance. This update will be effective for the Company’s fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. Entities can elect to adopt the new guidance through either a modified retrospective method of transition or a fully retrospective method of transition. The Company is currently evaluating the impact of the pending adoption of the new standard on its financial statements and intends to adopt the standard as of October 1, 2024.UNAUDITED

~~Note 4~~Fair –Value ~~Mastercard Program Agreement~~Measurement

OnThe Company’s financial instruments include ~~December~~cash ~~16,~~and ~~2019~~cash equivalents, ~~Airfox~~accounts ~~Brazil~~receivable, ~~received~~accounts ~~R$65~~payable ~~million~~and ~~(approximately~~short ~~$16~~and ~~million~~long-term indebt. ~~December~~The ~~2019)~~fair ~~from~~values ~~Mastercard~~of ~~Brasil~~cash ~~pursuant to~~and ~~the~~cash ~~“Program~~equivalents, accounts ~~Agreement”~~receivable, ~~entered~~and ~~into~~accounts ~~between~~payable ~~Airfox~~approximate ~~Brazil,~~their ~~Mastercard~~stated ~~Brasil~~amounts ~~and~~because ~~Via~~of ~~Varejo~~the ~~Via~~short ~~Varejo~~maturity onof ~~June~~these ~~12,~~financial ~~2019~~instruments.

~~Pursuant to~~The ~~the~~valuation ~~Program~~hierarchy ~~Agreement,~~is ~~Airfox~~composed ~~Brazil, as a licensee~~ of ~~MasterCard~~three ~~International, Inc~~levels. ~~and a business partner of Mastercard Brasil,~~ ~~entered~~The ~~into~~classification ~~the~~within ~~Incentive Program (as defined in~~ the ~~Program~~valuation ~~Agreement)~~hierarchy inis ~~order~~based toon ~~issue, expand and boost~~ the ~~prepaid~~lowest ~~card~~level ~~(“Airfox Card”) base~~ of ~~Airfox~~input ~~Brazil~~that asis ~~well~~significant asto the ~~number~~fair ofvalue ~~transactions and turnover (sales revenue) generated by MasterCard Cards~~measurement. The ~~Program~~levels ~~Incentives~~within ~~monies (as defined in~~ the ~~Program~~valuation ~~Agreement)~~hierarchy ~~cannot~~under beASC ~~used~~820 ~~for~~are ~~the~~described benefit of any product of any Mastercard competitor and/or any card brand other than the Mastercard Network. As an incentive to support the launching of Airfox Card, on December 16, 2019 Mastercard Brasil made to Airfox Brazil the incentive prepayment per sales revenue ("Sales Revenue Incentive Prepayment") totaling R$65 million.below:

As a Mastercard prepaid card issuer, Airfox Brazil will be entitled to receive Sales Revenue Incentive pursuant to the Program Agreement. As a result, the Sales Revenue Incentive will be used to amortize the Sales Revenue Incentive Prepayment received on December 11, 2019. Upon complete amortization of Incentive Prepayment, Mastercard will make quarterly payments of the Sales Revenue Incentive, calculated according to the value of transactions completed with the prepaid cards issued by the Airfox Brazil. Airfox Brazil will have no minimum commitment of transaction volumes to be completed with the prepaid cards.

	Level 1 —	Assets and liabilities with unadjusted, quoted prices listed on active market exchanges. Inputs to the fair value measurement are observable inputs, such as quoted prices in active markets for identical assets or liabilities.
	Level 2 —	Inputs to the fair value measurement are determined using prices for recently traded assets and liabilities with similar underlying terms, as well as direct or indirect observable inputs, such as interest rates and yield curves that are observable at commonly quoted intervals.
	Level 3 —	Inputs to the fair value measurement are unobservable inputs, such as estimates, assumptions, and valuation techniques when little or no market data exists for the assets or liabilities.

~~The Sales~~Adoption ~~Revenue Incentive Prepayment constitutes the creation~~ of aRecent ~~direct~~Accounting financial obligation on Airfox Brazil since it constitutes prepaid sales revenue from Mastercard Brasil to Airfox Brazil. Via Varejo has agreed to act as a guarantor of Airfox Brazil’s Sales Revenue Incentive Prepayment obligations to Mastercard Brasil pursuant to the Program Agreement and a Guaranty Letter.Pronouncements

~~The Program~~In ~~Agreement~~February ~~has~~2016, athe ~~term~~FASB ofestablished ~~ten~~Topic 842, ~~years~~Leases, ~~unless~~by ~~earlier~~issuing ~~terminated~~ASU byNo. ~~either~~2016-02 ~~party~~(“ASU in2016-02”), ~~accordance~~which ~~with~~requires ~~specific~~lessees ~~provisions~~to ofrecognize leases on the ~~Program~~balance ~~Agreement.~~sheet ~~The~~and ~~Program~~disclose ~~Agreement~~key ~~also~~information ~~establishes~~about ~~that~~leasing ~~the~~arrangements. ~~remaining~~Topic ~~balance~~842 ofwas ~~the~~subsequently ~~prepaid~~amended ~~incentive~~by ~~amount~~ASU ~~shall~~No. be2018-01, ~~updated~~Land ~~every twelve~~Easement ~~months~~Practical atExpedient ~~72%~~for ofTransition ~~the~~to ~~Brazilian~~Topic ~~federal~~842; ~~funds~~ASU ~~rate~~No. 2018-10, ~~the~~Codification ~~"SELIC"~~Improvements ~~rate~~to ~~(or~~Topic ~~'over~~842, ~~Selic')~~Leases; asASU ofNo. 2018-11, ~~the~~Targeted ~~payment~~Improvements; ~~date~~and ofASU ~~the~~No. ~~incentive~~2018-20, ~~which~~ ~~turns~~Narrow-Scope ~~the~~Improvements ~~incentive~~for ~~agreement~~Lessors. ~~into~~The new standard establishes a ~~financial~~right-of-use ~~debt~~model ~~instrument.~~(“ROU”) Ifthat ~~the~~requires ~~Agreement~~a ~~was~~lessee ~~ever~~to ~~terminated,~~recognize ~~even~~a asROU ofasset and lease liability on the ~~ending~~balance ofsheet for ~~the~~all ~~effective~~leases with a term oflonger ~~ten~~than ~~years~~12 ormonths. ~~before,~~Leases ~~the~~will ~~Company~~be ~~shall~~classified ~~make~~as ~~the~~finance ~~full~~or ~~payment~~operating, ofwith classification affecting the ~~remaining~~pattern and ~~sales~~classification ~~incentive~~of ~~prepaid~~expense ~~balance~~recognition at in the ~~actual~~income ~~termination date~~statement.

The Company ~~will~~adopted ~~recognize~~ASU ~~the~~2016-02 ~~revenue~~effective ~~as earned on a monthly basis~~October 1, ~~based~~2019 onusing ~~a fixed percentage of~~ the ~~total~~modified ~~dollar~~retrospective ~~value~~approach ofwhereby ~~card transactions completed during~~ the ~~month~~Company inwill ~~accordance~~continue ~~with~~to ~~the~~present ~~terms~~prior inperiod ~~the~~financial ~~agreement.~~statements ~~Also,~~and ~~the company will recognize finance expenses related to~~disclosures ~~the~~under ~~SELIC~~ASC ~~adjustment~~840. onIn ~~a yearly basis~~addition, asthe ~~stated~~Company byelected the ~~agreement.~~transition ~~The~~package ~~Company~~of ~~has~~three ~~identified~~practical ~~one~~expedients ~~performance~~permitted ~~obligation~~within ~~that meets~~ the ~~series~~standard, ~~provision~~which eliminates ~~and~~the ~~recognizes~~requirements ~~revenue~~to ~~over~~reassess ~~time.~~prior ~~The~~conclusions ~~Company~~about ~~Sales~~lease ~~incentives~~identification, ~~totaling~~lease ~~$6.7~~classification ~~thousand~~ and ~~$365,~~initial ~~have~~direct ~~been~~costs. ~~earned~~Further, ~~for~~ the ~~three~~Company ~~months~~adopted ~~ended~~a ~~March~~short-term ~~31,~~lease ~~2021~~exception ~~and 2020 respectively~~policy, ~~and~~permitting ~~meets~~ the ~~guidance~~Company to benot ~~classified~~apply asthe arecognition ~~series.~~requirements ~~The~~of ~~Company~~this ~~Sales~~standard ~~incentives~~to ~~totaling~~short-term ~~$10~~leases (i.1e. ~~thousand~~leases ~~and~~with ~~$365,~~terms ~~have~~of ~~been~~12 ~~earned for the six~~ months ~~ended~~or ~~March~~less) ~~31, 2021~~ and ~~2020~~an ~~respectively,~~accounting ~~and~~policy ~~meets the guidance~~ to beaccount ~~classified as a series. The Company's SELIC finance expense~~ for ~~the~~lease ~~three months ended March 31, 2021~~ and ~~2020~~non-lease ~~was~~components $0as ~~for~~a ~~both~~single ~~periods,~~component ~~and~~ for ~~the~~certain ~~period~~classes of ~~the six months ended March 31, 2021 and 2020 was $0~~assets.~~3 million and $0, respectively.~~

17Adoption of the new standard resulted in the recording of right-of-use assets and lease liabilities related to the Company’s operating leases, totaling $2.3 and $2.4 million, respectively, recorded on the Company’s consolidated balance sheet as of October 1, 2019. The standard did not materially affect the Company's consolidated net earnings or cash flows.

~~CARRIER~~In August 2018, the FASB issued ASU 2018-13, Fair EQValue Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”), ~~LLC~~which ~~d/b/a~~amends ~~AIRFOX~~disclosure ~~AND~~requirements ~~SUBSIDIARIES~~on fair value measurements in Topic 820. This amendment modifies the valuation process of fair value measurements by removing the disclosure requirements for the valuation processes for Level 3 fair value measurements, clarifying the timing of the measurement uncertainty disclosure, and including the changes in unrealized gains and losses for recurring Level 3 fair value measurements in other comprehensive income if held at the end of the reporting period. It also allows the disclosure of other quantitative information in lieu of the weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. The amendments in this ASU are effective for fiscal years beginning after December 15, 2019 and should be applied prospectively for the most recent period presented in the initial fiscal year of adoption. The Company adopted ASU 2018-13 effective October 1, 2020 and there was no material impact on the Company's results of operations, financial position and cash flows.

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~ 17

~~UNAUDITED~~CARRIER EQ, LLC d/b/a AIRFOX AND SUBSIDIARIES

~~Note 5~~NOTES -TO ~~Prepaid~~CONDENSED ~~Expenses~~CONSOLIDATED ~~and~~FINANCIAL ~~Other Current Assets~~STATEMENTS

~~Prepaid expenses and other current assets consisted of the following:~~UNAUDITED

	March 31, 2021		September 30, 2020
Service contract	$	—	$	349,000
Research and Development tax credit		675,627		496,965
Prepaid expense		510,320		553,913
Total Prepaid expenses and other current assets	$	1,185,947	$	1,399,878

In August 2018, the FASB issued ASU 2018-15, Intangibles, Goodwill and Other (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract (“ASU 2018-15”), which requires implementation costs incurred by customers in cloud computing arrangements to be deferred and recognized over the term of the arrangement, if those costs would be capitalized by the customer in a software licensing arrangement under the internal-use software guidance in ASC 350-40. The new standard is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The Company adopted ASU 2018-15 effective October 1, 2020 and there was no material impact on the Company's results of operations, financial position and cash flows.

~~Note 6~~Recent -Accounting ~~Intangible Assets, Net~~Pronouncements

The Company continually assesses any new accounting ~~following~~pronouncements ~~table~~to ~~summarizes~~determine their applicability. When it is determined that a new accounting pronouncement affects the Company’'s ~~definite-lived~~financial reporting, ~~intangible~~the ~~assets:~~Company undertakes a study to determine the consequences of the change to its condensed consolidated financial statements and assures that there are proper controls in place to ascertain that the Company's condensed consolidated financial statements properly reflect the change.

	March 31, 2021
	Estimated Useful Life (Years)		Gross Carrying Amount		Additions		Impairment			Accumulated Amortization			Net Carrying Value
Domain names		3	$	140,012	$	—		—		$	(118,349	)	$	21,663
Capitalized software costs towards VV Wallet		3		4,855,125		832,989		(736,604	)		(1,472,549	)		4,215,565
Website		3		282,645		—		—			(220,893	)		61,752
Software		3		42,123		—		—			(13,260	)		28,863
			$	5,319,905	$	832,989		(736,604	)	$	(1,825,051	)	$	4,327,843

In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, that changes the impairment model for most financial assets and certain other instruments. For receivables, loans and other instruments, entities will be required to use a new forward-looking “expected loss” model that generally will result in the earlier recognition of allowance for losses. In addition, an entity will have to disclose significantly more information about allowances and credit quality indicators. The new standard is effective for the Company for fiscal years beginning after December 15, 2022. The Company is currently evaluating the impact of the pending adoption of the new standard on its condensed consolidated financial statements and intends to adopt the standard on October 1, 2023.

	September 30, 2020
	Estimated Useful Life (Years)		Gross Carrying Amount		Additions		Accumulated Amortization			Net Carrying Value
Domain names		3	$	140,012	$	—	$	(98,137	)	$	41,875
Capitalized software costs towards VV Wallet		3		1,500,058		3,355,067		(702,477	)		4,152,648
Website		3		272,083		10,562		(185,122	)		97,523
Software		3		17,486		24,637		(9,064	)		33,059
			$	1,929,639	$	3,390,266	$	(994,800	)	$	4,325,105

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes ("ASU 2019-12"), which modifies ASC 740 to reduce complexity while maintaining or improving the usefulness of the information provided to users of financial statements. ASU 2019-12 is effective for the Company for interim and annual reporting periods beginning after December 15, 2021. The Company is currently assessing the impact of ASU 2019-12, but it is not expected to have a material impact on the Company’s condensed consolidated financial statement.

~~The Company~~In ~~uses~~August 2020, the ~~straight~~FASB issued ASU No. 2020-~~line~~06, Accounting ~~method~~for toConvertible ~~determine~~Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplifies an issuer’s accounting for convertible instruments by reducing the ~~amortization~~number ~~expense~~of accounting models that require separate accounting for ~~its~~embedded ~~definite~~conversion features. ASU 2020-~~lived~~06 ~~intangible~~also ~~assets.~~simplifies ~~The~~the settlement assessment that entities are required to perform to determine ~~amortization~~whether ~~expense~~a ~~related~~contract qualifies for equity classification and makes targeted improvements to the ~~definite-lived~~disclosures ~~intangible~~for ~~assets~~convertible ~~was~~instruments and ~~$0.4 million~~earnings-per-share ~~and~~(EPS) $0guidance.8 ~~million~~This update will be effective for the ~~three~~Company’s ~~and~~fiscal ~~six months~~years ~~ended~~beginning ~~March~~after ~~31,~~December ~~2021~~15, 2023, and $0interim periods within those fiscal years.3 ~~million~~Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, and $0interim periods within those fiscal years.3 ~~million~~Entities ~~for~~can elect to adopt the ~~three~~new ~~and~~guidance ~~six~~through ~~months~~either ~~ended~~a ~~March~~modified ~~31,~~retrospective method ~~2020~~of transition or a fully retrospective method of transition. The Company ~~also recorded~~is ancurrently ~~impairment~~evaluating the impact of ~~$0.7~~the ~~million~~pending ~~for~~adoption of the ~~three~~new ~~months~~standard ~~ended~~on ~~March~~its 31financial statements and intends to adopt the standard as of October 1, ~~2021~~2024.

~~Note 7 - Accrued liabilities~~Reclassifications

~~Accrued~~Certain reclassifications have been made to the 2020 consolidated financial ~~liabilities~~statements ~~consisted~~in oforder to conform to the ~~following:~~ 2021 financial statement presentation.

	March 31, 2021 (unaudited)		September 30, 2020 (audited)
Customer deposits	$	3,436,176	$	1,727,097
Accrued compensation		1,306,805		1,380,419
Other accrued liabilities		800,956		560,460
Operating third parties' liabilities		648,904		—
Accrued accounts payable		589,221		428,760
Tax and licenses		26,620		10,665
Credit card payable		2,350		23,261
Legal and professional		—		130,347
Total accrued liabilities	$	6,811,032	$	4,261,009

18CARRIER EQ, LLC d/b/a AIRFOX AND SUBSIDIARIES

~~CARRIER EQ,~~NOTES ~~LLC~~TO ~~d/b/a~~CONDENSED ~~AIRFOX~~CONSOLIDATED ~~AND~~FINANCIAL ~~SUBSIDIARIES~~STATEMENTS

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~ UNAUDITED

~~UNAUDITED~~Note 4 – Discontinued Operations

~~Note~~The Company has determined the loss of a controlling 8interest -and ~~Preferred~~deconsolidation ~~Stock~~of the operations of banQi as of June 14, 2021 represents a strategic shift that will have a major effect on the business and therefore meets the criteria for classification as discontinued operations at June 30, 2021 and prior periods presented in the condensed consolidated financial information. Accordingly, the assets and liabilities associated with the operations of banQi have been classified as discontinued operations in the accompanying condensed consolidated balance sheets, condensed consolidated statements of comprehensive loss, and condensed consolidated cash flows for all periods presented.

~~Series One~~The assets and ~~One-A~~liabilities ~~Preferred~~that ~~Stock~~were ~~Purchase~~included ~~Agreement~~in the June 14, 2021 deconsolidation of banQi consist of the following:

On July 15, 2016, the Company sold to accredited investors an aggregate of 2,652,072 shares of Series One and 1,046,147 of Series One-A Preferred Shares (collectively, “Preferred Stock”).

Schedule of discontinued operations
BALANCE SHEET	As of June 14, 2021
Cash and cash equivalents		6,110,979
Restricted cash		209,044
Accounts receivable, net		1,279,169
Prepaid expenses and other current assets		369,445
Intangibles, net		855,156
Property and equipment, net		148,922
Security deposits		9,051
Due from affiliates		5,431,853
Accrued liabilities		8,789,203
Other deferred revenue, current portion		51,877
Due to related party		12,676,882
Deferred revenue - Mastercard Program Agreement		13,081,493
Other deferred revenue, net of current portion		69,168
Foreign capital		252,000
Gain from deconsolidation of banQi		(20,507,004	)

The ~~Preferred~~ ~~Stock~~results isfrom ~~convertible into~~ the ~~Company’s~~discontinued ~~Common~~operations ~~Stock~~have onbeen areflected 1in ~~for 1 basis at~~ the ~~holders’ option. The Preferred Stock~~ ~~does~~Consolidated ~~not~~Statement ~~contain~~of ~~any~~Comprehensive ~~redemption~~Loss ~~provisions.~~for ~~The~~the ~~Preferred~~three- ~~Stock does not pay dividends~~ and ~~vote~~nine-month ~~together~~periods ~~with~~ended ~~the~~June ~~common~~30, ~~stock~~2021 ofconsist ~~the Company as a single class on all actions to be taken by the stockholders~~ of the ~~Company.~~following:

On May 21, 2020, in connection with the February 7, 2020 written Call Exercise Notice from Via Varejo (“Call Exercise Notice”), the aggregate of 2,652,072 shares of Series One and 1,046,146 of Series One-A Preferred Shares were converted into the Company’s Common Stock during the Transaction which were subsequently cancelled.

Schedule of discontinued operations
	Three Months Ended			Nine Months Ended
	June 30, 2021			June 30, 2021

Revenue	$	567,626		$	1,065,450

Operating expenses:
Selling, general and administrative		4,816,514			12,017,284
Total operating expenses		4,816,514			12,017,284

Loss from operations		(4,248,888	)		(10,951,835	)

Other (expense) income:
Foreign currency transaction loss		(39,032	)		—
Interest income (expense), net		23,372			99,874
Other (expense) income, net		(15,660	)		99,874

Loss before income taxes		(4,264,548	)		(10,851,961	)
Net income (loss)		(4,264,548	)		(10,851,961	)
Net loss attributable to non-controlling interest		—			—
Net loss attributable to CarrierEQ, Inc,		(4,264,548	)		(10,851,961	)
Other comprehensive loss
Foreign currency translation adjustment		(527,484	)		(875,085	)
Total comprehensive loss		(4,792,032	)		(11,727,046	)

The Company amended its Certificate of Incorporation and filed the Second Restated Certificate of Incorporation (the “Restated Certificate of Incorporation”) with the Delaware Secretary of State on May 21, 2020, to provide for (i) a single class of common stock (and automatic conversion of any and all outstanding shares of preferred stock into common stock) and (ii) no preferential rights in favor of any shareholder.19

~~Note 9~~CARRIER -EQ, ~~Common~~LLC ~~Stock~~d/b/a AIRFOX AND SUBSIDIARIES

~~On January~~NOTES ~~25,~~TO ~~2016,~~CONDENSED ~~the~~CONSOLIDATED ~~Company~~FINANCIAL ~~issued 497,873 shares of common stock to an investor (the “Investor”) for a purchase price~~STATEMENTS of $20 thousand, which at the time represented 6% of the capital stock of the Company. As part of this transaction, the Company agreed to issue additional shares of common stock (for no additional consideration) to maintain the investor’s ownership interest at 6% of the total capital stock upon a subsequent equity financing greater than $250 thousand. This 6% ownership is calculated on a fully diluted basis, including all outstanding shares of common and preferred stock, all outstanding options and warrants, phantom stock, stock appreciation rights, and any shares reserved for issuance under the Company’s equity incentive plans. However, the capital stock does exclude shares issuable, but contingent on conversion of any current or future convertible debt and equity instruments (which would include the SAFE’s). Therefore, as part of any issuance of capital stock to any future investors, the Company must issue additional stock to the Investor, as well, to ensure that they remain at 6% of the Company’s capital stock. There were 133,893 additional shares issued on July 15, 2016 to the Investor in order to maintain their 6% equity interest.

The contingent issuance of shares of common stock to the Investor was evaluated to determine whether the embedded feature would be required to be recorded as a derivative liability. It was determined the embedded feature qualifies for equity classification.UNAUDITED

~~On February~~As ~~28,~~a ~~2018~~result of the ~~Company~~discontinued ~~repurchased 414~~operations,~~893~~ ~~shares~~the ofpreviously presented ~~common~~2020 ~~stock~~financial ~~which~~statements ithave ~~had~~been ~~previously~~revised ~~granted~~ to anpresent ~~independent~~the ~~entity~~consolidated infinancial statements of the continuing operations separate ~~exchange~~from ~~for~~the ~~$0.2~~discontinued ~~million~~operations. The ~~Company~~effects ~~recorded~~on ~~these~~the ~~repurchased~~Consolidated ~~shares~~Balance Sheet as ~~Treasury~~of ~~shares~~September in30, ~~its~~2020 ~~consolidated~~were ~~balance~~as ~~sheet.~~follows:

On May 21, 2020, in connection with the Call Exercise Notice, all of the Company’s previously outstanding common stock was purchased by the Buyer, which is included in the total aggregate of 25,265,794 of the Company’s Common Stock that was purchased by the Buyer during the Transaction. All shares of common stock were immediately then cancelled, including the shares held in treasury.


	September 30, 2020
	As previously
	Reported			Adjustment			As Revised
ASSETS
Current assets:
Cash and cash equivalents	$	3,272,664		$	1,614,636		$	1,658,028
Accounts receivable		857,901			857,901			—
Prepaid expenses and other current assets		1,399,878			316,351			1,083,527
Current assets of discontinued operations		—			(2,788,888	)		2,788,888
Total current assets		5,530,443			—			5,530,443

Non-current assets:
Intangibles, net		4,325,105			33,059			4,292,046
Property and equipment. Net		3,790			3,790			—
Security deposits		338,386			18,278			320,108
Lease right of use assets		1,979,658			—			1,979,658
Investment in related affiliate		—			—			—
Due from related party		1,400,000			—			1,400,000
Due from affiliates		—			4,589,610			(4,589,610	)
Other assets		130,664			130,664			—
Non-current assets of discontinued operations		—			(4,775,401	)		4,775,401
Total non-current assets		8,177,603			—			8,177,603
Total assets	$	13,708,046		$	—		$	13,708,046

LIABILITIES AND MEMBER'S DEFICIT
Current liabilities:
Accounts payable		301,003			—			301,003
Accrued liabilities		4,261,009			3,111,495			1,149,514
Other deferred revenue. current portion		58,283			58,283			—
AirToken refund liability		163,561			—			163,561
Lease liability, current portion		393,468			—			393,468
Due to related party		1,572,124			1,572,124			—
Current liabilities of discontinued operations		—			(4,741,902	)		4,741,902
Total current liabilities		6,749,448			—			6,749,448

Long-term liabilities:
Deferred revenue - Mastercard Program Agreement		11,520,725			11,520,725			—
Deferred gain on issuance of AirTokens for Services		396,790			—			396,790
Lease liability, net of current portion		1,758,196			—			1,758,196
Deferred revenue - AirToken Project		12,529,824			—			12,529,824
Other deferred revenue, net of current portion		81,620			81,620			—
Long-term liabilities of discontinued operations		—			(11,602,345	)		11,602,345
Total liabilities	$	33,036,603		$	—		$	33,036,603

Carrier EQ, LLC member's deficit:
Member's deficit; 1,277,635 limited liability company units outstanding as of June 30, 2021 and September 30, 2020		(20,899,904	)		(10,352,340	)		(10,547,564	)
Accumulated other comprehensive income (loss)		—			1,572,382			(1,572,382	)
Accumulated other comprehensive income of discontinued operations		1,572,382			8,779,958			(7,207,576	)
Total member's deficit attributable to Carrier EQ, LLC member		(19,327,522	)		—			(19,327,522	)
Non-controlling interest in subsidiary		(1,035	)		—			(1,035	)
Total member's deficit		(19,328,557	)		—			(19,328,557	)
Total liabilities and member's deficit	$	13,708,046		$	—		$	13,708,046

~~Note 10 - Stock Based Compensation~~20

~~The Company~~CARRIER established a 2016 Equity Incentive Plan (the “Plan”) during 2016 and issued stock-based awards to certain employees and non-employees under this plan. The Plan provided for the issuance of incentive stock optionsEQ, ~~non-statutory~~LLC ~~stock~~d/b/a ~~options,~~AIRFOX ~~stock appreciation~~AND ~~rights, restricted stock units and other stock awards.~~SUBSIDIARIES

19NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~CARRIER EQ, LLC d/b/a AIRFOX AND SUBSIDIARIES~~UNAUDITED

~~NOTES~~The effects on the Consolidated Statement of Comprehensive TOLoss ~~CONDENSED~~for ~~CONSOLIDATED~~the ~~FINANCIAL~~three- ~~STATEMENTS~~and nine-month periods ended June 30, 2020 were as follows:

UNAUDITED


	Three Months Ended June 30, 2020									Nine Months Ended June 30, 2020
	As Previously Reported			Adjusted			As Revised			As Previously Reported			Adjusted			As Revised

Revenue	$	34,576		$	34,576			—		$	58,407		$	58,407			—

Operating expenses:
Cost of revenue		114,839			(114,839	)		—			114,839			(114,839	)		—
Selling, general and administrative		6,212,797			1,336,572			5,105,903			16,989,307			4,935,325			12,283,660
Impairment of digital assets		—			—			—			—			—			—
Total operating expenses		6,327,636			1,221,733			5,105,903			17,104,146			4,820,486			12,283,660

Loss from operations		6,293,060			1,187,157			5,105,903			17,045,739			4,762,079			12,283,660

Other (expense) income:
Realized loss on sale of digital assets		—			—			—			(1,392	)		—			(1,392	)
Interest income (expense), net		122,861			40,033			82,828			150,015			147,120			2,895
Other (expense) income, net		122,861			40,033			82,828			148,623			147,120			1,503

Loss before income taxes		(6,170,199	)		(1,147,124	)		(5,023,075	)		(16,897,116	)		(4,614,959	)		(12,282,157	)

Income tax benefit		47,620			—			47,620			129,661			—			129,661

Loss from Continuing Operations		(6,122,579	)		(1,147,124	)		(4,975,455	)		(16,767,455	)		(4,614,959	)		(12,152,496	)
Net income (loss) from discontinued operations		—			(1,147,124	)		(1,147,124	)		—			(4,614,960	)		(4,614,960	)
Net loss		(6,122,579	)		(1,147,124	)		(6,122,579	)		(16,767,455	)		(4,614,960	)		(16,767,456	)
Net loss attributable to non-controlling interest		(44	)		—			(44	)		461			—			461
Net loss attributable to Carrier EQ, LLC		(6,122,623	)		(1,147,124	)		(6,122,623	)		(16,766,994	)		(4,614,960	)		(16,766,995	)
Other comprehensive income
Foreign currency translation adjustment		120,645			—			120,645			1,118,914			—			1,118,914
Total comprehensive loss		(6,001,978	)		(1,147,124	)		(6,001,978	)		(15,648,080	)		(4,614,960	)		(15,648,081	)

~~On February~~The 3depreciation, ~~2020,~~amortization ~~the~~and ~~Company’s~~significant ~~Board~~operating ofnoncash ~~Directors approved an amendment to the Plan to decrease the aggregate number of shares~~items of the ~~Company’s~~discontinued ~~common~~operations ~~stock~~were ~~that may be issued pursuant to Stock Awards (~~as defined in the Plan) from 2,834,837 to 2,676,126; and waived the restrictions on transfer and right of first refusal in favor of the Company, as set forth in the Company’s Amended and Restated Bylaws, for certain stockholders.follows:

Additionally, on February 3, 2020, the Company’s Board of Directors approved the acceleration of vesting of 751,849 outstanding stock option awards awarded to employees and a third-party.


	Three Months Ended June 30, 2021		Nine Months Ended June 30, 2021
Depreciation and amortization	$	7,719	$	29,472

~~On February 6, 2020, the Board approved the acceleration of vesting of 149,564 outstanding stock options awarded to a third-party.~~21

~~On February~~CARRIER 26EQ, ~~2020,~~LLC ~~the~~d/b/a ~~Board~~AIRFOX ~~approved~~AND ~~the acceleration of vesting of 277,564 outstanding stock options awarded to employees and other third-parties.~~SUBSIDIARIES

~~On May~~NOTES ~~21,~~TO ~~2020,~~CONDENSED ~~concurrently~~CONSOLIDATED ~~with~~FINANCIAL ~~the consummation of the Transaction and as a condition precedent under the September 11, 2018 convertible~~STATEMENTS note purchase and call option agreement (the “Call Option Agreement”), the Company’s Board of Directors cancelled all outstanding options to purchase the Company’s Common Stock granted under the Plan. All of the holders of the outstanding options issued under the Plan were immediately cancelled and, in consideration for such cancellation were entitled to a lump sum cash payment from the Company.

The Company lacks company-specific historical and implied volatility information. Therefore, it estimates its expected stock volatility based on the historical volatility of a set of publicly traded peer companies. Due to the lack of historical exercise history, the expected term of the Company’s stock options for employees has been determined utilizing the “simplified” method for awards. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. The expected dividend yield is zero based on the fact that the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future.UNAUDITED

~~The fair~~Note ~~value~~5 of– ~~the~~Mastercard ~~Company’s~~Program common stock was estimated to be $0.29 at September 30, 2019. There was no common stock outstanding at September 30, 2020 and March 31, 2021. In order to determine the fair value, the Company considered, among other things, the Company’s business, financial condition and results of operations; the lack of marketability of the Company’s common stock; the market performance of comparable publicly traded companies; and U.S. and global economic and capital market conditions.Agreement

~~The~~On December 16, 2019, banQi, received ~~Company~~R$65 ~~used~~million ~~the~~(approximately ~~Black-Scholes~~$16 ~~option-pricing~~million ~~model~~in toDecember ~~estimate~~2019) from Mastercard Brasil pursuant to the ~~fair~~“Program ~~value~~Agreement” ofentered into ~~options~~between ~~issued~~banQi, ~~using~~Mastercard ~~the~~Brasil ~~following~~and ~~assumptions:~~Via Varejo Via Varejo on June 12, 2019.

		Six Months Ended March 31, 2021			Six Months Ended March 31, 2020
Price of Common Stock	$	—		$	0.25 - 0.29
Volatility		—	%		60% - 72%
Expected term (in years)		—			6.08 – 6.90
Risk free rate		—	%		1.39% - 1.74%

Pursuant to the Program Agreement, banQi, as a licensee of MasterCard International, Inc. and a business partner of Mastercard Brasil, entered into the Incentive Program (as defined in the Program Agreement) in order to issue, expand and boost the prepaid card (“Airfox Card”) base of banQi as well as the number of transactions and turnover (sales revenue) generated by MasterCard Cards. The Program Incentives monies (as defined in the Program Agreement) cannot be used for the benefit of any product of any Mastercard competitor and/or any card brand other than the Mastercard Network. As an incentive to support the launching of Airfox Card, on December 16, 2019 Mastercard Brasil made to BanQi the incentive prepayment per sales revenue ("Sales Revenue Incentive Prepayment") totaling R$65 million.

20As a Mastercard prepaid card issuer, banQi will be entitled to receive Sales Revenue Incentive pursuant to the Program Agreement. As a result, the Sales Revenue Incentive will be used to amortize the Sales Revenue Incentive Prepayment received on December 11, 2019. Upon complete amortization of Incentive Prepayment, Mastercard will make quarterly payments of the Sales Revenue Incentive, calculated according to the value of transactions completed with the prepaid cards issued by the banQi. banQi will have no minimum commitment of transaction volumes to be completed with the prepaid cards.

~~CARRIER~~The Sales Revenue Incentive Prepayment constitutes ~~EQ,~~the ~~LLC~~creation ~~d/b/~~of a ~~AIRFOX~~direct ~~AND~~financial ~~SUBSIDIARIES~~obligation on banQi since it constitutes prepaid sales revenue from Mastercard Brasil to banQi. Via Varejo has agreed to act as a guarantor of banQi’s Sales Revenue Incentive Prepayment obligations to Mastercard Brasil pursuant to the Program Agreement and a Guaranty Letter.

~~NOTES~~The Program Agreement has a term of ten years, TOunless ~~CONDENSED~~earlier ~~CONSOLIDATED~~terminated ~~FINANCIAL~~by ~~STATEMENTS~~either party in accordance with specific provisions of the Program Agreement. The Program Agreement also establishes that the remaining balance of the prepaid incentive amount shall be updated every twelve months at 72% of the Brazilian federal funds rate, the "SELIC" rate (or 'over Selic') as of the payment date of the incentive, which turns the incentive agreement into a financial debt instrument. If the Agreement was ever terminated, even as of the ending of the effective term of ten years or before, the Company shall make the full payment of the remaining sales incentive prepaid balance at the actual termination date.

~~UNAUDITED~~The Company will recognize the revenue as earned on a monthly basis, based on a fixed percentage of the total dollar value of card transactions completed during the month in accordance with the terms in the agreement. Also, the company will recognize finance expenses related to the SELIC adjustment on a yearly basis, as stated by the agreement. The Company has identified one performance obligation that meets the series provision and recognizes revenue over time. The Company Sales incentives totaling $343 thousand and $429, for the three months ended June 30, 2021 and 2020 respectively, and meets the guidance to be classified as a series. The Interchange Fee received totaling $10 thousand and $6 thousand, for the nine months ended June 30, 2021 and 2020 respectively, and meets the guidance to be classified as a series.

~~On May~~ Note 21, 2020, as a result of the Transaction, there was a change in control when the Company was fully acquired by Via Varejo, and as a condition precedent under the Call Option Agreement, the Company’s Board of Directors cancelled all outstanding options. As noted in the 2016 Equity Incentive Plan Amendment, for instances where a change in control occurs, vesting will be accelerated for all outstanding stock award and a cash payment will be paid to all Option Stockholders by Via Varejo. The total unrecognized compensation cost based on the fair value of the options was recognized as stock-based compensation expense at May 21, 2020 totaling $0.1 million. Additionally, all of the holders of the outstanding options issued under the Plan (“Option Holders”) were immediately cancelled and, in consideration for such cancellation, were entitled to a lump sum cash payment totaling $3.3 million, contributed by Via Varejo to the Company and paid from the Company to the Option Holders. The conversion price per option was determined pursuant to the terms of the Call Exercise Notice. Any additional payment over the original fair value of the stock options ($0.2 million) was recognized by the Company as additional stock-based compensation expense due to the cancellation of stock options, which totaled $3.1 million at May 21, 2020. There were no options issued or outstanding for the three and six months ended March 31, 2021. The expense for stock-based compensation awards was $0 and $168 thousand for the three months ended March 31, 2021 and 2020 respectively. The expense for stock-based compensation awards was $0 and $210 thousand for the six months ended March 31, 2021 and 2020, respectively. The expense for stock-based compensation related to the Phantom Shares was $1.6 ~~thousand and $0 for the three months ended March 31, 2021 and 2020, respectively. The expense for stock~~-~~based~~ ~~compensation~~Prepaid ~~related~~Expenses ~~to the Phantom Shares was $6.8 thousand~~ and $0Other ~~for~~Current ~~the six months ended March 31, 2021 and 2020, respectively.~~Assets

~~Note~~Prepaid expenses and other current assets consisted ~~11 –~~of ~~Concentrations~~the following:

Accounts Payable


	June 30, 2021		September 30, 2020
Service contract	$	—	$	349,000
Research and Development tax credit		675,627		496,965
Prepaid expense		95,893		237,562
Total Prepaid expenses and other current assets	$	771,520	$	1,083,527

As of March 31, 2021, and September 30, 2020, the Company had approximately 83% and 83%, respectively, of its accounts payable balances held by its top five vendors. During each of the same aforementioned periods, the Company had one and three of its vendors accounting for more than 10% each of the Company’s accounts payables balances, respectively.22

~~Note 12~~CARRIER -EQ, ~~Commitments~~LLC ~~and~~d/b/a ~~Contingencies~~AIRFOX AND SUBSIDIARIES

~~Operating~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ~~Leases~~

~~The Company has operating leases primarily consisting of office space with remaining lease terms of 1 to 8 years, subject to certain renewal options as applicable.~~UNAUDITED

~~Leases with~~Note an7 ~~initial term of twelve months or less are not recorded on the balance sheet, and the Company does not separate lease and non~~-~~lease components~~ ofIntangible ~~contracts. There are no material residual guarantees associated with any of the Company’s leases~~Assets, and there are no significant restrictions or covenants included in the Company’s lease agreements. Certain leases include variable payments related to common area maintenance and property taxes, which are billed by the landlord, as is customary with these types of charges for office space.Net

The ~~Company~~ ~~determined~~following ~~that~~table ~~the~~summarizes ~~exercise of~~ the renewal option became reasonably certain for its office space in Boston and Brazil; therefore, the payments associated with the renewal are now included in the measurement of the lease liability and ROU asset for those locations. The useful life of the Boston and Brazil office spaces will extend through February 2028 and September 2021, respectively. In February 2021, the Company ~~modified the terms of Brazilian Lease agreement with the landlord, and the Company decided to reduce the length of~~’s ~~the~~definite-lived ~~contract~~intangible to April 30, 2021, as the remote work has been practiced by mostly employees and the office facilities are not being fully used. Considering the new terms, this agreement specifically is not applicable to the Operating Lease approach and its ROU was fully amortized in the current quarter. The Company is evaluating options of other locations. The remaining amounts of this agreement of lease liabilities and ROU were fully amortized.assets:

The Company’s lease agreements generally do not provide an implicit borrowing rate. Therefore, the Company used a benchmark approach to derive an appropriate imputed discount rate. The Company benchmarked itself against other companies of similar credit ratings and comparable quality and derived imputed rates, which were used to discount its real estate lease liabilities. The Company used estimated incremental borrowing rates of 7.52%, 5.73%, and 9.68% on October 1, 2019 for all leases that commenced prior to that date, for two office spaces in Boston, Massachusetts, and one office space in Brazil, respectively.

Intangible Assets, Net
	June 30, 2021
	Estimated Useful Life (Years)		Gross Carrying Amount		Additions		Impairment / banQi deconsolidation			Accumulated Amortization			Net Carrying Value
Domain names		3	$	140,012	$	—		—		$	(123,674	)	$	16,338
Capitalized software costs towards VV Wallet		3		4,855,125		1,012,937		(736,604	)		(1,836,202	)		3,295,256
Website		3		282,645		—		—			(220,893	)		43,867
Software		3		42,123		—		(42,123)			—			—
			$	5,319,905	$	1,012,937		(778,727	)	$	(2,198,654	)	$	3,355,461

	September 30, 2020
	Estimated Useful Life (Years)		Gross Carrying Amount		Additions		Accumulated Amortization			Net Carrying Value
Domain names		3	$	140,012	$	—	$	(98,137	)	$	41,875
Capitalized software costs towards VV Wallet		3		1,500,058		3,355,067		(702,477	)		4,152,648
Website		3		272,083		10,562		(185,122	)		97,523
			$	1,912,153	$	3,365,629	$	(994,800	)	$	4,292,046

~~CARRIER~~The Company uses the straight-line method to determine EQthe amortization expense for its definite-lived intangible assets. The amortization expense related to the definite-lived intangible assets was $0.4 million and $1.2 million for the three and nine months ended June 30, ~~LLC~~2021, ~~d/b/a~~and ~~AIRFOX~~$0.3 ~~AND~~million ~~SUBSIDIARIES~~and $0.6 million for the three and nine months ended June 30, 2020. The Company also recorded an impairment of $0.7 million and an effect of the banQi’s deconsolidation of $42.1 thousands for the nine months ended June 30, 2021.

~~NOTES TO~~Note ~~CONDENSED~~8 ~~CONSOLIDATED~~- ~~FINANCIAL~~Accrued ~~STATEMENTS~~ liabilities

~~UNAUDITED~~Accrued liabilities consisted of the following:

The Company entered into a sublease agreement with a subtenant on March 1, 2020, the rent commencement date was April 1, 2020, and the lease terminated on December 31, 2020. There was approximately $0 and $14 thousand of sublease income recognized related to this agreement for the three and six months ended March 31, 2021 respectively, which was recorded as a reduction to rent expense on the Consolidated Statements of Comprehensive Loss. No related party transactions for lease arrangements have occurred.

Accrued liabilities
	June 30, 2021 (unaudited)		September 30, 2020 (audited)
Customer deposits	$	—	$	—
Accrued compensation		378,463		779,114
Other accrued liabilities		183		183
Operating third parties' liabilities		—		—
Accrued accounts payable		160,629		196,609
Tax and licenses		—		—
Credit card payable		16,616		23,261
Legal and professional		—		130,347
Total accrued liabilities	$	555,891	$	1,149,514

~~Lease Costs~~Note 9 - Preferred Stock

~~The table~~Series ~~below~~One ~~presents certain information related to the lease costs for the Company’s operating leases for the three~~ and ~~six~~One-A ~~months~~Preferred ~~ended~~Stock ~~March 31,2021:~~Purchase Agreement

	Three Months Ended March 31, 2021		Six Months Ended March 31, 2021
Components of total lease cost:
Operating lease expense	$	214,604	$	362,615
Total lease cost	$	214,604	$	362,615

On July 15, 2016, the Company sold to accredited investors an aggregate of 2,652,072 shares of Series One and 1,046,147 of Series One-A Preferred Shares (collectively, “Preferred Stock”).

~~Lease~~The Preferred Stock was convertible into the Company’s ~~Position~~Common Stock on a 1 for 1 basis at the holders’ option. The Preferred Stock did not contain any redemption provisions. The Preferred Stock did not pay dividends and vote together with the common stock of the Company as a single class on all actions to be taken by the stockholders of ~~March 31,~~the ~~2021~~Company.

~~Right of use lease assets and lease liabilities for our operating leases were recorded in the condensed consolidated balance sheet as follows:~~23

	As of March 31, 2021
Assets
Operating lease right of use assets	$	1,686,532
Total lease assets		1,686,532
Liabilities
Current liabilities:
Operating lease liability, current portion	$	208,241
Noncurrent liabilities:
Operating lease liability, net of current portion		1,651,253
Total lease liability	$	1,859,494

CARRIER EQ, LLC d/b/a AIRFOX AND SUBSIDIARIES

~~Lease Terms~~NOTES ~~and~~TO ~~Discount~~CONDENSED ~~Rate~~CONSOLIDATED FINANCIAL STATEMENTS

~~The table below presents certain information related to the weighted average remaining lease term and the weighted average discount rate for the Company’s operating leases as of March 31, 2021:~~UNAUDITED

Weighted average remaining lease term (in years) – operating leases			7.10
Weighted average discount rate – operating leases			7.5	%

22The Company amended its Certificate of Incorporation and filed the Second Restated Certificate of Incorporation (the “Restated Certificate of Incorporation”) with the Delaware Secretary of State on May 21, 2020, to provide for (i) a single class of common stock (and automatic conversion of any and all outstanding shares of preferred stock into common stock) and (ii) no preferential rights in favor of any shareholder.

~~CARRIER EQ,~~Note ~~LLC~~10 ~~d/b/a~~- ~~AIRFOX~~Common ~~AND SUBSIDIARIES~~Stock

~~NOTES~~On January 25, 2016, the Company issued 497,873 TOshares ~~CONDENSED~~of ~~CONSOLIDATED~~common ~~FINANCIAL~~stock ~~STATEMENTS~~to an investor (the “Investor”) for a purchase price of $20 thousand, which at the time represented 6% of the capital stock of the Company. As part of this transaction, the Company agreed to issue additional shares of common stock (for no additional consideration) to maintain the investor’s ownership interest at 6% of the total capital stock upon a subsequent equity financing greater than $250 thousand. This 6% ownership is calculated on a fully diluted basis, including all outstanding shares of common and preferred stock, all outstanding options and warrants, phantom stock, stock appreciation rights, and any shares reserved for issuance under the Company’s equity incentive plans. However, the capital stock excluded shares issuable, but contingent on conversion of any current or future convertible debt and equity instruments (which would include the SAFE’s).

~~UNAUDITED~~The contingent issuance of shares of common stock to the Investor was evaluated to determine whether the embedded feature would be required to be recorded as a derivative liability. It was determined the embedded feature qualifies for equity classification.

~~Undiscounted~~On February 28, 2018 the Company repurchased 414,893 ~~Cash~~shares ~~Flows~~of common stock which it had previously granted to an independent entity in exchange for $0.2 million. The Company recorded these repurchased shares as Treasury shares in its consolidated balance sheet.

~~Future lease~~On ~~payments~~May ~~included~~21, 2020, in connection with the ~~measurement~~Call Exercise Notice, all of ~~lease~~the ~~liabilities~~Company’s onpreviously outstanding common stock was purchased by the ~~condensed~~Buyer, ~~consolidated~~which ~~balance~~is ~~sheet~~included asin the total aggregate of ~~March 31~~25, ~~2021~~265, ~~for~~794 of the ~~following~~Company’s ~~five~~Common ~~fiscal~~Stock ~~years~~that ~~and~~was ~~thereafter~~purchased by the Buyer during the Transaction. All shares of common stock were immediately asthen ~~follows:~~cancelled, including the shares held in treasury.

Year ending September 30,	Operating Leases
Remaining 2021	$	160,178
2022		326,453
2023		333,104
2024		339,755
2025		346,406
2026		353,055
2027		359,714
2028		152,420
Total Minimum Lease Payments	$	2,371,085
Less effects of discounting		(511,591	)
Present value of future minimum lease payments	$	1,859,494

Note 11 - Stock Based Compensation

~~Legal~~The Company established a 2016 Equity Incentive ~~Proceedings~~Plan (the “Plan”) during 2016 and issued stock-based awards to certain employees and non-employees under this plan. The Plan provided for the issuance of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock units and other stock awards.

~~The~~ On February 3, 2020, the Company’s Board of Directors approved an amendment to the Plan to decrease the aggregate number of shares of the Company’s common stock that may be ~~involved~~issued pursuant to Stock Awards (as defined in ~~various~~the ~~lawsuits~~Plan) from 2,834,837 ~~claims~~to 2,676,126; and ~~proceedings~~waived ~~incidental~~the torestrictions ~~the~~on ~~ordinary~~transfer ~~course~~and right of ~~business.~~first ~~The~~refusal ~~Company~~in ~~accounts for~~favor ~~such~~of ~~contingencies~~the ~~when~~Company, aas ~~loss~~set isforth ~~considered~~in ~~probable~~the Company’s Amended and ~~can~~Restated beBylaws, ~~reasonably~~for ~~estimated~~certain stockholders.

~~Between August~~Additionally, ~~and~~on ~~October~~February ~~2017~~3, ~~the~~2020, ~~Company offered and sold AirTokens pursuant to~~ the ~~2017 ICO and raised approximately $15 million in capital.~~Company’s ~~The~~Board ~~SEC~~of ~~determined~~Directors ~~that~~approved the ~~AirToken~~acceleration ~~offering was an offer and sale~~ of ~~“securities”~~vesting ~~as defined by Section 2(a)(1)~~ of ~~the Securities Act. On November 16~~751,849 ~~2018~~outstanding ~~the~~stock ~~Company~~option ~~settled~~awards ~~the~~awarded ~~2017 ICO matter with the SEC pursuant~~ to ~~the~~employees ~~Settlement Agreement. As part of the Settlement Agreement, Airfox agreed to offer rescission rights to the Potential AirToken Claimants~~ and ~~paid~~ a ~~penalty of $0~~third-party.~~3 million to the SEC.~~

On ~~March~~ 15February 6, ~~2019~~2020, the ~~Company~~Board ~~filed~~approved ~~an initial registration statement on Form 10 with~~ the ~~SEC under the Exchange Act on a voluntary~~acceleration ~~basis~~of investing ~~connection~~of ~~with~~149,564 ~~the~~outstanding ~~Settlement~~stock ~~Agreement~~options ~~and~~awarded to ~~provide current information to Potential AirToken Claimants pursuant to Section 12(~~a) ~~of the Securities Act~~third-party. ~~The Form 10 registration statement became effective on May 14, 2019, and on October 18, 2019 we were notified that the SEC had completed its review of the Form 10 registration statement.~~

~~In conjunction~~On ~~with~~February ~~the Settlement Agreement~~26, ~~Potential AirToken Claimants were entitled to return their AirTokens to the Company and receive a refund in the amount of consideration paid~~2020, ~~plus interest, less~~ the ~~amount~~Board ofapproved ~~any income received thereon. Pursuant to~~ the ~~Settlement~~acceleration Agreement, as modified in May 2019, our Company timely distributed the claim forms on June 28, 2019. The claims period closed on September 28, 2019. All forms were processed in accordance with the terms and provisions set forth by the Settlement Agreement. The Company received claim forms from 174 Potential AirToken Claimants during the claims period and the Company determined to approve payment on 163 out of ~~the~~ ~~174~~vesting ~~claims, which is approximately 93%~~ of ~~the claim forms received during the claims period. On December 11~~277,564 ~~2019,~~outstanding ~~the~~stock ~~Company~~options ~~commenced the~~awarded ~~process~~to ofemployees ~~notifying,~~and ~~via~~other ~~email only, all 174 Potential AirToken Claimants of the Company’s resolution of their claim~~third-parties.

On or ~~before~~May ~~December~~21, 282020, ~~2019~~concurrently with the ~~Company paid all approved claims to approved claimants who returned their AirTokens to us (approximately~~consummation ~~93.5%~~ of the ~~total~~Transaction ~~dollar~~and ~~amount~~as ofa ~~all~~condition ~~approved~~precedent ~~claim~~under ~~refunds).~~the ~~All~~September ~~amounts~~11, ~~were~~2018 ~~refunded~~convertible innote ~~cash~~purchase and ~~paid~~call ~~through~~option ~~the~~agreement ~~Company's existing~~(the ~~cash~~“Call ~~and~~Option ~~cash equivalent reserves. The total claim amounts including interest~~Agreement”), ~~totaled $3.3 million on December 28, 2019. Certain approved claimants did not return their AirTokens to~~ the Company.’s ~~The~~Board ~~Company~~of ~~did~~Directors ~~not~~cancelled ~~pay~~all ~~approved~~outstanding ~~claims~~options to ~~approved~~purchase ~~claimants~~the ~~who did not return~~Company’s ~~their~~Common ~~AirTokens~~Stock togranted under the ~~Company~~Plan. AsAll of ~~March~~the ~~31,~~holders ~~2021,~~of the ~~amount~~outstanding ~~that~~options ~~was~~issued ~~not~~under ~~paid~~the ~~was~~Plan ~~approximately~~were ~~$0.2~~immediately ~~million.~~cancelled ~~All unpaid approved~~and, ~~claims~~in ~~are~~consideration ~~expected~~for tosuch becancellation ~~paid~~were ~~during~~entitled ~~the~~to ~~2021~~a ~~fiscal~~lump ~~year~~sum ~~upon~~cash ~~return~~payment tofrom the Company ~~of approved claimants’ AirTokens~~.

~~Additionally, the Settlement Agreement requires our Company to:~~24

●CARRIER ~~Maintain~~EQ, ~~timely~~LLC ~~filings of all reports required by Section 13(~~d/b/a) ofAIRFOX ~~the~~AND Exchange Act for at least one year from the date the Form 10 becomes effective (the “Effective Date”) and continue these filings until the Company is eligible to terminate its registration pursuant to Rule 12g-4 under the Securities Exchange Act of 1934.SUBSIDIARIES

●NOTES ~~Provide~~TO ~~monthly~~CONDENSED ~~reports~~CONSOLIDATED toFINANCIAL ~~the SEC which include the amount of the claims paid, and any claims not paid as well as the reasons for non-payment.~~STATEMENTS

~~● Submit to the SEC a final report of its handling of all claims received within seven months from the Effective Date of the Form 10 filing.~~UNAUDITED

~~Also,~~The Company lacks company-specific historical onand ~~November~~implied ~~16,~~volatility ~~2018~~information. Therefore, ~~The~~it ~~Company~~estimates ~~entered~~its ~~into~~expected astock ~~settlement~~volatility ~~with~~based on the ~~Massachusetts~~historical ~~Securities~~volatility ~~Division~~of ~~related~~a set of publicly traded peer companies. Due to the ~~issuance~~lack of ~~AirTokens in~~historical exercise history, the ~~2017~~expected ~~ICO~~term ~~whereby~~of the Company’s ~~agreed~~stock options for employees has been determined utilizing the “simplified” method for awards. The risk-free interest rate was determined by reference to ~~pay~~the aU.S. ~~penalty~~Treasury yield curve in effect at the time of ~~$0.1~~grant ~~million~~of the award for time periods approximately equal to the expected ~~Commonwealth~~term of ~~Massachusetts~~the award. The expected dividend yield was zero based on the fact that the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future.

23The fair value of the Company’s common stock was estimated to be $0.29 at September 30, 2019. There was no common stock outstanding at September 30, 2020 and June 30, 2021. In order to determine the fair value, the Company considered, among other things, the Company’s business, financial condition and results of operations; the lack of marketability of the Company’s common stock; the market performance of comparable publicly traded companies; and U.S. and global economic and capital market conditions.

~~CARRIER~~The Company used the Black-Scholes option-pricing ~~EQ,~~model ~~LLC~~to ~~d/b/a~~estimate ~~AIRFOX~~the ~~AND~~fair ~~SUBSIDIARIES~~value of options issued using the following assumptions:

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Stock option valuation assumptions
		Nine Months Ended June 30, 2021			Nine Months Ended June 30, 2020
Price of Common Stock	$	—		$	0.25 - 0.29
Volatility		—	%		60% - 72%
Expected term (in years)		—			0 – 6.90
Risk free rate		—	%		1.39% - 1.74%

~~UNAUDITED~~On May 21, 2020, as a result of the Transaction, there was a change in control when the Company was fully acquired by Via Varejo, and as a condition precedent under the Call Option Agreement, the Company’s Board of Directors cancelled all outstanding options. As noted in the 2016 Equity Incentive Plan Amendment, for instances where a change in control occurs, vesting will be accelerated for all outstanding stock award and a cash payment will be paid to all Option Stockholders by Via Varejo. The total unrecognized compensation cost based on the fair value of the options was recognized as stock-based compensation expense on May 21, 2020 totaling $0.1 million. Additionally, all of the holders of the outstanding options issued under the Plan (“Option Holders”) were immediately cancelled and, in consideration for such cancellation, were entitled to a lump sum cash payment totaling $3.3 million, contributed by Via Varejo to the Company and paid from the Company to the Option Holders. The conversion price per option was determined pursuant to the terms of the Call Exercise Notice. Any additional payment over the original fair value of the stock options ($0.2 million) was recognized by the Company as additional stock-based compensation expense due to the cancellation of stock options, which totaled $3.1 million at May 21, 2020. There were no options issued or outstanding for the three and nine months ended June 30, 2021. The expense for stock-based compensation awards was $0 and $3.2 million for the three months ended June 30, 2021 and 2020 respectively. The expense for stock-based compensation awards was $0 and $3.4 million for the nine months ended June 30, 2021 and 2020, respectively. The expense for stock-based compensation related to the Phantom Shares was $0 thousand and $0 for the three months ended June 30, 2021 and 2020, respectively. The expense for stock-based compensation related to the Phantom Shares was $0 thousand and $0 for the nine months ended June 30, 2021 and 2020, respectively.

~~As a~~Note ~~result~~12 – of the Company’s inability to timely resolve these accounting issues, the Company did not timely file with the SEC the Company’s Quarterly Reports on Form 10-Q for the quarters ended March 31, 2019 and June 30, 2019, and the Company’s annual report on Form 10-K for the year ended September 30, 2019, which puts the Company in violation of Section 13(a) of the Exchange Act and the Settlement Agreement. In addition, the Company did not timely file certain Current Reports on Form 8-K. As a result of the Company’s failure to timely file these various reports, the SEC may through civil or administrative actions seek monetary and non-monetary relief from the Company, including fines, penalties, undertakings and conduct-based injunctions, and officer and director bars and suspensions.Concentrations

~~On December~~Accounts 30, 2019 a claimant who purchased AirTokens in the 2017 ICO whose claim was denied for failure to comply with the deadlines and the claim process filed a civil lawsuit against the Company in the Supreme Court of the State of New York, County of New York. The lawsuit alleges a claim of sale of unregistered securities to the plaintiff under Section 12(a) of the Securities Act of 1933 in connection with the plaintiff’s purchase of AirTokens in the 2017 ICO. The plaintiff demands a full refund in the amount of consideration paid, plus interest and other costs. On February 25, 2020 the Company settled this claim with the plaintiff and the lawsuit was dismissed.Payable

~~The claims~~As ~~period~~of ~~officially~~June ~~came~~30, to2021, aand ~~close~~September on30, ~~September~~2020, 28the Company had approximately 99% and 85%, ~~2019.~~respectively, ~~All~~of ~~claims~~its ~~were~~accounts ~~processed~~payable inbalances ~~accordance~~held ~~with~~by its top five vendors. During each of the same ~~terms~~aforementioned periods, the Company had three and ~~provisions set~~one ~~forth~~of inits vendors accounting for more than 10% each of the ~~SEC~~Company’s ~~Order~~accounts payables balances, respectively.

Other than with respect to the matters described above, the Company is not aware of any pending or threatened claims that we violated any federal or state securities laws. However, the Company cannot assure that any such claim will not be asserted in the future or that the claimant in any such action will not prevail. The possibility that such claims may be asserted in the future will continue until the expiration of the applicable federal and state statutes of limitations. If the payment of additional rescission claims or fines is significant, it could have a material adverse effect on the Company cash flow, financial condition or prospects and the value of the AirTokens.25

~~On January~~CARRIER 29EQ, ~~2020~~LLC ~~Gad Red Propaganda Ltda. (“GAD”) filed~~ d/b/a ~~civil~~AIRFOX ~~lawsuit~~AND against the Company’s operating subsidiary banQi Instituição de Pagamento Ltda (dba “banQi”) in 41o Civil Court of Justice of the Estate of Sao Paulo. The lawsuit alleges that banQi failed to fully compensate GAD for certain marketing and other services GAD performed on behalf of banQi pursuant to an alleged strategic partnership GAD entered into with banQi. GAD demands payments of up to approximately U.S. $691 thousand for services performed. banQi filed an answer to the claim on May 15, 2020. The Company accounts for contingencies when a loss is considered probable or possible (more likely than not) and can be reasonably estimated. banQi filed an answer to the claim on May 15, 2020 denying any liability for any payments GAD is seeking.SUBSIDIARIES

24NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~CARRIER EQ, LLC d/b/a AIRFOX AND SUBSIDIARIES~~UNAUDITED

~~NOTES TO~~Note ~~CONDENSED~~13 ~~CONSOLIDATED~~- ~~FINANCIAL~~Commitments ~~STATEMENTS~~and Contingencies

~~UNAUDITED~~Operating Leases

~~Note~~The Company has operating leases primarily consisting of office space ~~13 -~~with ~~Income~~remaining ~~Taxes~~lease terms of 1 to 8 years, subject to certain renewal options as applicable.

~~A nominal~~Leases ~~provision~~with ~~for~~an ~~taxes~~initial ~~has~~term ~~been recorded as the Company has incurred net operating losses since inception. Significant components~~ of ~~the~~twelve ~~Company’s~~months ~~net deferred income tax assets as of December 31, 2020 and September 30, 2020 consist of income tax loss carryforwards.~~or ~~These~~less ~~amounts~~ are ~~available~~not ~~for~~recorded ~~carryforward indefinitely for use in offsetting taxable income. Realization of the future tax benefits is dependent~~ on the ~~Company’s~~balance ~~ability to generate sufficient taxable income within the carry-forward period. Prior to May 21~~sheet, ~~2020 the~~and ~~Company was organized as a C Corporation for tax purposes. As of May 21, 2020,~~ the Company ~~was~~does ~~converted~~not ~~from~~separate alease Cand ~~Corporation to a limited liability company ("LLC"). As a result of this transaction the Company believes it has lost the right to utilize its net operating loss carryovers,~~ non-~~refundable~~lease ~~tax~~components ~~credits~~of ~~and charitable contribution carryover assets associated with the original corporation with which the Company was organized within~~contracts. ~~Generally,~~There ~~only~~are ~~a Company that has generated a net operating loss should be~~no ~~able~~material toresidual ~~then~~guarantees ~~utilize~~associated ~~that net operating loss to reduce its own future profits. In late December 2020, the Company filed Form 8832~~ with ~~the~~ ~~Internal~~any ~~Revenue Service in order to elect C corporation tax classification for the LLC. The Company filed this request within the 90-day time period allowed for automatic approval~~ of the Company’s ~~tax classification request. On May 21~~leases, 2020, the Company was fully acquired by Via Varejo S.A, a corporation organized under the laws of the Federative Republic of Brazil (“Via Varejo”) through Lake Niassa Empreendimentos e Participações Ltda., a limited liability company duly organized under the laws of the Federative Republic of Brazil and ~~wholly-owned~~there byare ~~Via~~no ~~Varejo~~significant ~~(“Transaction”).~~restrictions Asor ~~a result of the Transaction, the utilization~~covenants ofincluded ~~some of the net operating loss carryforwards generated~~ in ~~both prior and~~ the current fiscal years may be subject to a substantial annual limitation due to the ownership change limitations provided by the Internal Revenue Code of 1986, as amended, and similar state provisions. As of the date of these financial statements, the Company ~~has not undertaken an effort to convince the IRS that the Company~~’s ~~net~~ ~~operating~~lease ~~losses prior to and through May 21, 2020 should be maintained and available for the Company’s future benefit~~agreements. ~~The Company~~Certain ~~may~~leases orinclude ~~may~~variable ~~not~~payments dorelated ~~this in the future. The Company may also have lost the use of the net operating loss assets as a result of IRC 382. The Company may undertake an Internal Revenue Code (“IRC”) 382 study~~ to ~~estimate~~common ~~the~~area ~~amount~~maintenance ofand ~~the net operating~~property ~~losses that may be utilized in the future. However~~taxes, ~~whatever~~which the outcome of the IRC 382 study is, the IRS would still have to approve the Company’s right to utilize such carryovers in the future. However, throughout the Company’s history the Company has generated substantial net operating losses. These deferred tax assets arising from the future tax benefits are ~~currently~~billed ~~considered not likely to be realized and are thus reduced to zero~~ by anthe ~~offsetting valuation allowance. As a result~~landlord, ~~there~~as is nocustomary ~~provision~~with ~~for~~these ~~income~~types ~~taxes other~~of ~~than~~charges ~~those amounts required to properly accrued~~ for ~~the~~office ~~various state minimum income taxes owed by the Company to the jurisdictions in which it operates~~space. ~~The income tax benefit for the three and six months ended March 31, 2021 and 2020 is the result of research and development tax credits.~~

The Company determined that the exercise of the renewal option became reasonably certain for its office space in Boston and Brazil; therefore, the payments associated with the renewal ~~Income~~are ~~Taxation~~now included in the measurement of the lease liability and ROU asset for those locations. The useful life of the Boston and Brazil office spaces will extend through February 2028 and September 2021, respectively. In February 2021, the Company modified the terms of Brazilian Lease agreement with the landlord, and the Company decided to reduce the length of the contract to April 30, 2021, as the remote work has been practiced by mostly employees and the office facilities are not being fully used. Considering the new terms, this agreement specifically is not applicable to the Operating Lease approach and its ROU was fully amortized in the current quarter. The Company is evaluating options of other locations. The remaining amounts of this agreement of lease liabilities and ROU were fully amortized.

The Company’s ~~operates~~lease aagreements ~~subsidiary~~generally do innot ~~Brazil.~~provide ~~All~~an ~~Brazilian~~implicit ~~resident~~borrowing ~~companies~~rate. ~~are~~Therefore, ~~taxed~~the onCompany ~~their~~used ~~world-wide~~a ~~income.~~benchmark ~~Corporate~~approach ~~income~~to ~~tax (IRPJ)~~derive isan ~~generally~~appropriate ~~assessed~~imputed atdiscount rate. aThe ~~fixed~~Company ~~rate~~benchmarked ofitself ~~15%~~against onother ~~annual~~companies ~~taxable~~of ~~income,~~similar ~~using~~credit ~~either~~ratings ~~the~~and ~~'actual~~comparable ~~profits'~~quality ~~method~~and ~~(APM)~~derived orimputed ~~the 'presumed~~rates, ~~profits'~~which ~~method~~were ~~(PPM).~~used ~~All~~to ~~legal~~discount ~~entities~~its ~~are~~real ~~further~~estate ~~subject~~lease toliabilities. ~~Social~~The ~~Contribution~~Company onused ~~Net~~estimated ~~Income~~incremental ~~(CSLL)~~borrowing atrates ~~the rate~~ of 97.52% ~~(except for financial institutions~~, ~~private insurance~~5.73%, and as9.68% ~~well~~on asOctober ~~certain other prescribed entities~~1, ~~who~~2019 ~~are~~for ~~taxed~~all atleases athat ~~15%~~commenced ~~rate).~~prior ~~This~~to ~~amount~~that ~~is not~~date, ~~deductible~~ for ~~IRPJ~~two ~~purposes.~~office ~~The~~spaces ~~tax~~in ~~base is therefore the profit before income tax~~Boston, ~~after some adjustments~~Massachusetts, ~~depending~~and ~~on the calculation~~one ~~method~~office ~~(i.e.~~space ~~APM~~in orBrazil, ~~PPM)~~respectively.

~~Corporate taxpayers~~The ~~may~~Company ~~also~~entered beinto ~~subject~~a tosublease agreement with a ~~surcharge~~subtenant ofon ~~10%~~March 1, 2020, the rent commencement date was April 1, 2020, and the lease terminated on ~~annual~~December ~~taxable~~31, ~~income~~2020. inThere ~~excess~~was approximately $0 and $0 thousand of ~~240~~sublease income recognized related to this agreement for the three and nine months ended June 30,~~000~~ ~~Brazilian~~2021 ~~reais~~respectively, ~~(BRL)~~which was recorded as a reduction to rent expense on the Consolidated Statements of Comprehensive Loss. No related party transactions for lease arrangements have occurred.

~~Note 14 –~~Lease ~~Related Party Transaction~~Costs

The ~~related~~ ~~party~~table ~~transactions~~below ~~between the Company and Via Varejo were revenue totaling $18.3 thousand recognized from the upfront payment~~presents ~~for~~certain ~~software~~information ~~development services and $384.2 thousand from transactional fees~~ related to the ~~Via~~lease ~~Varejo~~costs ~~service~~for ~~agreement~~the asCompany’s ofoperating ~~March 31, 2021.~~leases:

Note 15 – Subsequent Events

Lease cost
	Three Months Ended June 30, 2021		Nine Months Ended June, 2021		Three Months Ended June 30, 2020		Nine Months Ended June, 2020
Components of total lease cost:
Operating lease expense	$	214,604	$	294,133	$	168,115	$	504,345
Total lease cost	$	214,604	$	294,133	$	168,115	$	504,345

~~On April 9, 2021, Lake Niassa made a capital contribution to Airfox in the amount of $450,000, with no additional membership interests issued or ownership rights granted.~~26

25CARRIER EQ, LLC d/b/a AIRFOX AND SUBSIDIARIES

~~ITEM 2.~~NOTES ~~MANAGEMENT’S~~TO ~~DISCUSSION~~CONDENSED ~~AND~~CONSOLIDATED ~~ANALYSIS OF~~ FINANCIAL ~~CONDITION AND RESULTS OF OPERATIONS~~STATEMENTS

~~SPECIAL NOTE ABOUT FORWARD-LOOKING STATEMENTS~~UNAUDITED

~~This~~Lease ~~Quarterly~~Position Report on Form 10-Q contains, and our officers and representatives may from time to time make, "forward-looking statements" within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations, estimates, and projections about the Company’s industry, management’s beliefs, and certain assumptions made by management. Forward-looking statements include our expectations regarding product, services, and maintenance revenue, and short- and long-term cash needs. In some cases, words such as ~~“anticipates,” “expects,” “intends,” “plans,” “believes,” “estimates,” variations~~ of ~~these~~June words, and similar expressions are intended to identify forward-looking statements. The statements are not guarantees of future performance and are subject to certain risks, uncertainties, and assumptions that are difficult to predict; therefore, actual results may differ materially from those expressed or forecasted in any forward-looking statements. Risks and uncertainties of our business include those set forth under “Risk Factors” in our Annual Report on Form 10-K (“Form 10-K”) as of and for the year ended September 30, ~~2020, as filed with the United States Securities and Exchange Commission (“SEC”) on January 8,~~ 2021, as amended on May 24, 2021. Unless required by law, we undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise. However, readers should carefully review the risk factors set forth in other reports or documents we file from time to time with the Securities and Exchange Commission, particularly any future Annual Reports on Form 10-K, any Quarterly Reports on Form 10-Q and any Current Reports on Form 8-K.

~~COVID-19~~Right of use lease assets and lease liabilities for our operating leases were recorded in the condensed consolidated balance sheet as follows:

During this uncertain time, our critical priorities are the health and safety of our employees and contractors, all of whom began working from home and reduced travel to essential business needs. We currently have a Company-wide work-from-home program. We will continue to actively monitor the situation and may take further actions that alter our business operations as may be required by federal, state, local authorities, or that we determine are in the best interests of our employees.

Leases Recorded Balance Sheet
	As of June 30, 2021
Assets
Operating lease right of use assets	$	1,636,515
Total lease assets		1,636,515

Liabilities
Current liabilities:
Operating lease liability, current portion	$	212,450
Noncurrent liabilities:
Operating lease liability, net of current portion		1,601,564
Total lease liability	$	1,814,014

~~The COVID-19~~Lease ~~pandemic~~Terms ~~has had~~ and ~~continues~~Discount to have a significant impact on local, state, national and global economies. The actions taken by governments, as well as businesses and individuals, to limit the spread of the disease has significantly disrupted the Company’s normal activities. Numerous businesses, including our contractors, collaborative partners and suppliers have either shut down or are operating on a limited basis, employees have been furloughed or laid off and social distancing has been mandated through stay-in-place orders. The Company expects these actions to have a significant impact on the Company’s results of operations, particularly with respect to research and development, and financial position. The full extent of the impact to the Company due to the impact of the COVID-19 pandemic cannot be reasonably estimated at this time. The extent to which the COVID-19 pandemic will impact the Company will depend on future developments, which are highly uncertain and cannot be reasonably predicted, including the duration of the outbreak, the increase or reduction in governmental restrictions to businesses and individuals, the potential for a resurgence of the virus and other factors.Rate

~~OVERVIEW~~The table below presents certain information related to the weighted average remaining lease term and the weighted average discount rate for the Company’s operating leases as of June 30, 2021:


Weighted average remaining lease term (in years) – operating leases	6.61	%
Weighted average discount rate – operating leases	7.50	%

~~On May~~Undiscounted ~~21,~~Cash 2020, the Company filed a certificate of conversion (the “Certificate of Conversion”) to convert the Corporation to a Limited Liability Company and to change the Company’s name from “CarrierEQ, Inc.” to “Carrier EQ, LLC” The conversion and name change became effective on May 21, 2020. The Company filed a certificate of formation of Carrier EQ, LLC (the “Certificate of Formation”) on May 21, 2020.Flows

~~On May~~Future ~~21,~~lease ~~2020,~~payments ~~the~~included ~~Company~~in ~~was~~the ~~fully~~measurement of ~~acquired~~lease byliabilities ~~Via~~on ~~Varejo S.A, a corporation organized under~~ the ~~laws~~condensed ofconsolidated ~~the~~balance ~~Federative~~sheet ~~Republic~~as of ~~Brazil~~ ~~(“Via~~June ~~Varejo”)~~30, ~~through Lake Niassa Empreendimentos e Participações Ltda.~~2021, afor ~~limited liability company duly organized under~~ the ~~laws~~following offive ~~the~~fiscal ~~Federative~~years ~~Republic of Brazil~~ and ~~wholly-owned~~thereafter were byas ~~Via Varejo ("Transaction").~~follows:

The Company has a 99.99% ownership interest in banQi Instituição de Pagamento Ltda (formerly known as AirFox Servicos E Intermediacoes Ltda (“Airfox Brazil”), a limited liability company organized under the laws of the Federative Republic of Brazil and a 100% ownership interest in AirToken GmbH, a Swiss GmbH. Airfox USA, Airfox Brazil and Airtoken GmbH are collectively referred to herein, as the “Company.” On April 6, 2020, Airtoken GmbH was dissolved.

Future lease payments
Year ending September 30,	Operating Leases
Remaining 2021	$	803,668
2022		326,453
2023		333,104
2024		339,755
2025		346,406
2026		353,055
2027		359,714
2028		152,420
Total Minimum Lease Payments	$	2,291,273
Less effects of discounting		(477,259	)
Present value of future minimum lease payments	$	1,814,014

26Legal Proceedings

~~Beginning in February 2017, the Company began exploring consumer applications of its legacy prepaid mobile applications.~~ The Company ~~initiated a~~may ~~business~~be ~~plan~~involved toin ~~introduce~~various ~~a mobile application that would allow users to earn digital tokens~~lawsuits, ~~exchange them for free or discounted~~ ~~mobile~~claims ~~data~~ and, ~~ultimately,~~proceedings ~~other~~incidental ~~goods~~to ~~and~~the ~~services~~ordinary incourse ~~South America as part~~ of ~~a new international~~ business ~~and ecosystem, the AirToken Project~~. The ~~AirToken~~Company ~~Project~~accounts ~~included~~for ~~the~~such ~~issuance~~contingencies ofwhen ~~AirTokens.~~a ~~The~~loss ~~AirToken~~ is anconsidered probable ~~ERC-20~~and ~~token~~can ~~issued~~be onreasonably ~~the Ethereum blockchain~~estimated.

~~The Company~~Between ~~obtained~~August ~~Digital~~and ~~Assets~~October in2017, ~~August~~the ~~2017~~Company ~~through~~offered and ~~early~~sold ~~October~~AirTokens pursuant to the 2017 ~~from~~ICO ~~those~~and ~~interested~~raised inapproximately ~~obtaining~~$15 ~~AirTokens~~million in capital. The ~~Company~~SEC ~~raised~~determined that the AirToken offering ~~approximately~~was ~~$15~~an offer and sale of “securities” as defined by Section 2(a)(1) of the Securities Act.4 ~~million~~On ~~for~~November 16, 2018 the ~~purpose~~Company settled the 2017 ICO matter with the SEC pursuant to the Settlement Agreement. As part of ~~developing~~the Settlement Agreement, Airfox agreed to offer rescission rights to the Potential AirToken ~~Project~~Claimants and paid a penalty of $0.3 million to the SEC.

The Company’s business is evolving to focus on providing unbanked and financially underserved individuals in emerging markets mobile access to financial services. The Company is developing a software technology platform initially consisting of two applications, a digital wallet application and an alternative credit scoring and lending application. The Company’s software technology platform is designed and built as a Software as Service (or SaaS) offering. The Company expects to generate revenue from these applications from fixed recurring fees, transaction fees, third party fees and interest income. The Company’s initial markets are the cash and unbanked markets in Brazil.27

~~The Company’s~~CARRIER ~~digital wallet application~~EQ, ~~branded~~LLC ~~as banQi, is~~ d/b/a ~~digital~~AIRFOX ~~banking~~AND application capable of leveraging machine learning capabilities to build alternative, smartphone-based credit risk models. This application, currently available on Android and iOS, aims to eliminate the need for traditional financial institutions allowing the underbanked without bank accounts or credit cards to more easily and quickly make many everyday transactions using a smartphone. It will also enable the Company to create an alternative credit scoring system for its users for use in connection with its alternative credit scoring and lending application.SUBSIDIARIES

~~The alternative~~NOTES ~~credit~~TO ~~scoring~~CONDENSED ~~and~~CONSOLIDATED ~~lending~~FINANCIAL ~~application is a blockchain-based, peer-to-peer lending application that will enable anyone from~~STATEMENTS around the world to provide capital for a microloan to a diversified cohort of borrowers. The technology is expected to harness the decentralized power of the Ethereum blockchain to create a digital ledger of the user’s behavioral and transactional data to fund a new financial asset class from a global pool of lenders seeking to make socially impactful microloans.

~~RESULTS OF OPERATIONS~~UNAUDITED

~~The following~~On ~~comparative~~March ~~analysis~~15, of2019, ~~results~~the ofCompany ~~operations~~filed ~~for~~an ~~the~~initial registration ~~three~~statement ~~and~~on ~~six~~Form 10 ~~months~~with ~~ended~~the ~~March~~SEC ~~31,~~under ~~2021~~the ~~and~~Exchange ~~2020~~Act ~~are~~on ~~based~~a onvoluntary basis in connection with the ~~comparative~~Settlement Agreement ~~unaudited~~and ~~condensed~~to ~~consolidated~~provide ~~financial~~current ~~statements,~~information ~~footnotes,~~to ~~and~~Potential ~~related~~AirToken ~~information~~Claimants ~~for~~pursuant to Section 12(a) of the ~~periods~~Securities ~~identified~~Act. ~~This~~The ~~analysis~~Form ~~should~~10 registration bestatement ~~read~~became ineffective ~~conjunction~~on ~~with~~May ~~the~~14, 2019, ~~unaudited~~and ~~condensed~~on ~~consolidated~~October ~~financial~~18, ~~statements~~2019 ~~and~~we were notified that the ~~notes~~SEC tohad ~~those~~completed ~~statements~~its ~~that~~review ~~are~~of ~~included~~the ~~elsewhere~~Form in10 ~~this~~registration ~~filing~~statement.

~~The~~In conjunction with the Settlement Agreement, ~~following~~Potential ~~table~~AirToken ~~shows~~Claimants ~~our~~were ~~results~~entitled to return their AirTokens to the Company and receive a refund in the amount of ~~operations~~consideration paid, ~~for~~plus interest, less the ~~periods~~amount ~~indicated~~of any income received thereon. Pursuant to the Settlement Agreement, as modified in May 2019, our Company timely distributed the claim forms on June 28, 2019. The ~~historical~~claims ~~results~~period ~~presented~~closed ~~below~~on ~~are~~September ~~not~~28, ~~necessarily~~2019. All forms were processed ~~indicative~~in accordance with the terms and provisions set forth by the Settlement Agreement. The Company received claim forms from 174 Potential AirToken Claimants during the claims period and the Company determined to approve payment on 163 out of the ~~results~~174 ~~that~~claims, ~~may~~which beis ~~expected~~approximately 93% ~~for~~of ~~any~~the ~~future~~claim forms received during the claims period. On December 11, 2019, the Company commenced the process of notifying, via email only, all 174 Potential AirToken Claimants of the Company’s resolution of their claim.

	For the Three Months Ended March 31,						Change
	2021			2020			Dollars			Percentage
Revenue	$	130,423		$	22,069		$	108,354			491	%
Selling, general and administrative		4,993,489			5,570,471			(576,982	)		(10	)%
Impairment of capitalized software		736,604			—			736,604			100	%
Operating expenses		5,730,093			5,570,471			159,622			3	%
Loss from operations		(5,599,670	)		(5,548,402	)		(51,268	)		1	%
Other income (expense), net		556,807			60,054			496,753			827	%
Income tax benefit		64,629			35,410			29,219			83	%
Net loss	$	(4,978,234	)	$	(5,452,938	)	$	474,704			(9	)%

On or before December 28, 2019 the Company paid all approved claims to approved claimants who returned their AirTokens to us (approximately 93.5% of the total dollar amount of all approved claim refunds). All amounts were refunded in cash and paid through the Company's existing cash and cash equivalent reserves. The total claim amounts including interest, totaled $3.3 million on December 28, 2019. Certain approved claimants did not return their AirTokens to the Company. The Company did not pay approved claims to approved claimants who did not return their AirTokens to the Company. As of June 30, 2021, the amount that was not paid was approximately $0.2 million.

27Additionally, the Settlement Agreement requires our Company to:

~~Revenue~~● Maintain timely filings of all reports required by Section 13(a) of the Exchange Act for at least one year from the date the Form 10 becomes effective (the “Effective Date”) and continue these filings until the Company is eligible to terminate its registration pursuant to Rule 12g-4 under the Securities Exchange Act of 1934.

~~Revenue for~~● ~~the~~Provide ~~three~~monthly ~~months~~reports ~~ended~~to ~~March~~the ~~31,~~SEC ~~2021~~which ~~was~~include ~~$130~~the ~~thousand,~~amount ~~representing an increase~~ of ~~$108~~the ~~thousand~~claims ~~or a 491% increase~~paid, asand ~~compared to~~any ~~$22~~claims ~~thousand~~not ~~for~~paid ~~the~~as ~~three~~well ~~months~~as ~~ended March 31, 2020 primarily from~~ the ~~growth~~reasons offor ~~Company's operation in Brazil~~non-payment.

~~Operating expenses~~● Submit to the SEC a final report of its handling of all claims received within seven months from the Effective Date of the Form 10 filing.

~~Selling~~Also, ~~General~~ on November 16, ~~and~~2018, ~~Administrative~~The ~~Expenses~~Company entered into a settlement with the Massachusetts Securities Division related to the issuance of AirTokens in the 2017 ICO whereby the Company agreed to pay a penalty of $0.1 million to the Commonwealth of Massachusetts.

~~Selling, general,~~As ~~and~~a ~~administrative~~result ~~expenses~~of ~~for~~ the ~~three~~Company’s ~~months~~inability to ~~ended~~timely ~~March~~resolve ~~31,~~these ~~2021~~accounting ~~was~~issues, ~~$5.0 million~~the ~~representing~~Company adid ~~decrease~~not oftimely ~~$0.6 million~~file orwith athe ~~10%~~SEC ~~decrease,~~the asCompany’s ~~compared~~Quarterly toReports ~~$5.6 million~~on Form 10-Q for the ~~three~~quarters ~~months~~ ended ~~March~~June 3130, ~~2020.~~2019 ~~The~~and ~~primary~~June ~~components~~30, of2019, ~~the net decrease include: general~~ and ~~administrative~~the ~~expenses~~Company’s ~~had~~annual areport ~~net~~on ~~increase~~Form of10-K ~~$1.2 million~~for ~~due to~~ the ~~overall~~year ~~increase~~ended ~~of our~~September ~~operating~~30, ~~activities~~2019, ~~depreciation~~which &puts ~~amortization~~the ~~increased~~Company byin ~~$0.1 million~~violation ~~due~~of toSection ~~the~~13(a) ~~current quarter's amortization~~ of ~~Via Varejo~~the ~~capital~~Exchange ~~software,~~Act and ~~advertising~~the ~~expenses~~Settlement ~~increased~~Agreement. byIn ~~$0.2 million~~addition, ~~due~~the toCompany did ~~increased~~not ~~activity~~timely infile ~~Brazil,~~certain ~~and~~Current ~~the~~Reports ~~spend~~on ~~related to~~Form ~~marketing~~8-K. ~~efforts,~~As ~~legal~~a &result ~~professional~~of ~~fees~~the ~~decreased~~Company’s byfailure ~~$1.7~~to ~~million~~timely ~~due~~file tothese various reports, the ~~reduction~~SEC ofmay ~~consultancy~~through ~~and~~civil ~~regulatory~~or ~~services needs~~administrative inactions ~~the~~seek USmonetary ~~for~~and ~~SEC~~non-monetary ~~purposes~~relief infrom the ~~current~~Company, ~~quarter~~including fines, ~~salaries~~penalties, undertakings and ~~wages~~conduct-based ~~decreased by $0.3 million~~injunctions, and ~~sales~~officer and ~~marketing~~director ~~decreased by~~bars ~~$0.1~~and ~~million~~suspensions.

~~Other~~On December 30, 2019 a claimant who purchased AirTokens in the 2017 ICO whose claim was denied for failure to comply with the deadlines and the claim process filed a civil lawsuit against the Company in the Supreme Court of the State of New York, County of New York. The lawsuit alleges a claim of sale of unregistered securities to the plaintiff under Section 12(~~expense~~a) ~~income~~of the Securities Act of 1933 in connection with the plaintiff’s purchase of AirTokens in the 2017 ICO. The plaintiff demands a full refund in the amount of consideration paid, ~~net~~plus interest and other costs. On February 25, 2020 the Company settled this claim with the plaintiff and the lawsuit was dismissed.

~~Other (expense)~~The ~~income,~~claims ~~net~~period ~~for~~officially ~~the~~came ~~three~~to ~~months~~a ~~ended~~close ~~March~~on ~~31,~~September ~~2021 and 2020 was $0.6 million and $60.1 thousand~~28, ~~respectively~~2019. ~~The~~All ~~increase~~claims inwere ~~other~~processed ~~(expense) income, net was primarily attributable to an increase~~ in ~~foreign~~accordance ~~currency~~with ~~transaction~~the ~~income~~terms ofand ~~$0.5 million. Interest~~provisions ~~income~~set ~~decreased~~forth ~~by $19.8 thousand primarily due to interest earned from funds~~ in ~~interest~~the ~~bearing~~SEC ~~accounts~~Order.

~~Income Tax Benefit~~28

~~Income tax~~CARRIER ~~benefit for the three months ended March 31~~EQ, ~~2021~~LLC ~~and~~d/b/a ~~2020~~AIRFOX ~~was~~AND ~~$64.6 thousand and $35.4 thousand, respectively.~~SUBSIDIARIES

~~The following~~NOTES ~~table~~TO ~~shows~~CONDENSED ~~our~~CONSOLIDATED ~~results~~FINANCIAL ~~of operations for the periods indicated. The historical results presented below are not necessarily~~STATEMENTS ~~indicative of the results that may be expected for any future period.~~

	For the Six Months Ended March 31,						Change
	2021			2020			Dollars			Percentage
Revenue	$	497,824		$	23,831		$	473,993			1,989	%
Selling, general and administrative		12,132,140			10,776,510			1,355,630			13	%
Impairment of capitalized software		736,604			—			736,604			100	%
Operating expenses		12,868,744			10,776,510			2,092,234			19	%
Loss from operations		(12,370,920	)		(10,752,679	)		(1,618,241	)		15	%
Other (expense) income, net		314,194			25,762			288,432			1,120	%
Income tax benefit		178,662			82,041			96,621			118	%
Net loss	$	(11,878,064	)	$	(10,644,876	)	$	(1,233,188	)		12	%

UNAUDITED

~~Revenue~~Other than with respect to the matters described above, the Company is not aware of any pending or threatened claims that we violated any federal or state securities laws. However, the Company cannot assure that any such claim will not be asserted in the future or that the claimant in any such action will not prevail. The possibility that such claims may be asserted in the future will continue until the expiration of the applicable federal and state statutes of limitations. If the payment of additional rescission claims or fines is significant, it could have a material adverse effect on the Company cash flow, financial condition or prospects and the value of the AirTokens.

~~Revenue for~~Note ~~the six months ended March 31, 2021 was $498 thousand, representing an increase of $474 thousand or a 1,989% increase, as compared to $24 thousand for the six months ended March~~14 ~~31,~~- ~~2020~~Income primarily from the growth of the Company's operation in Brazil. Additionally, revenue totaling $428.6 thousand was recognized from the payment services fees related to the regular business in Brazil, revenue totaling $18.3 thousand was recognized from the upfront Payment of $256.0 thousand related to the Via Varejo Services Agreement, and revenue totaling $51.1 thousand from the Program Agreement with Mastercard.Taxes

28A nominal provision for taxes has been recorded as the Company has incurred net operating losses since inception. Significant components of the Company’s net deferred income tax assets as of December 31, 2020 and September 30, 2020 consist of income tax loss carryforwards. These amounts are available for carryforward indefinitely for use in offsetting taxable income. Realization of the future tax benefits is dependent on the Company’s ability to generate sufficient taxable income within the carry-forward period. Prior to May 21, 2020 the Company was organized as a C Corporation for tax purposes. As of May 21, 2020, the Company was converted from a C Corporation to a limited liability company ("LLC"). As a result of this transaction the Company believes it has lost the right to utilize its net operating loss carryovers, non-refundable tax credits and charitable contribution carryover assets associated with the original corporation with which the Company was organized within. Generally, only a Company that has generated a net operating loss should be able to then utilize that net operating loss to reduce its own future profits. In late December 2020, the Company filed Form 8832 with the Internal Revenue Service in order to elect C corporation tax classification for the LLC. The Company filed this request within the 90-day time period allowed for automatic approval of the Company’s tax classification request. On May 21, 2020, the Company was fully acquired by Via Varejo S.A, a corporation organized under the laws of the Federative Republic of Brazil (“Via Varejo”) through Lake Niassa Empreendimentos e Participações Ltda., a limited liability company duly organized under the laws of the Federative Republic of Brazil and wholly-owned by Via Varejo (“Transaction”). As a result of the Transaction, the utilization of some of the net operating loss carryforwards generated in both prior and the current fiscal years may be subject to a substantial annual limitation due to the ownership change limitations provided by the Internal Revenue Code of 1986, as amended, and similar state provisions. As of the date of these financial statements, the Company has not undertaken an effort to convince the IRS that the Company’s net operating losses prior to and through May 21, 2020 should be maintained and available for the Company’s future benefit. The Company may or may not do this in the future. The Company may also have lost the use of the net operating loss assets as a result of IRC 382. The Company may undertake an Internal Revenue Code (“IRC”) 382 study to estimate the amount of the net operating losses that may be utilized in the future. However, whatever the outcome of the IRC 382 study is, the IRS would still have to approve the Company’s right to utilize such carryovers in the future. However, throughout the Company’s history the Company has generated substantial net operating losses. These deferred tax assets arising from the future tax benefits are currently considered not likely to be realized and are thus reduced to zero by an offsetting valuation allowance. As a result, there is no provision for income taxes other than those amounts required to properly accrued for the various state minimum income taxes owed by the Company to the jurisdictions in which it operates. The income tax benefit for the three and nine months ended June 30, 2021 and 2020 is the result of research and development tax credits.

~~Operating expenses~~Brazil Income Taxation

~~Selling~~The Company operates a subsidiary in Brazil. All Brazilian resident companies are taxed on their world-wide income. Corporate income tax (IRPJ) is generally assessed at a fixed rate of 15% on annual taxable income, using either the 'actual profits' method (APM) or the 'presumed profits' method (PPM). All legal entities ~~General~~are further subject to Social Contribution on Net Income (CSLL) at the rate of 9% (except for financial institutions, ~~and~~private ~~Administrative~~insurance, as ~~Expenses~~well as certain other prescribed entities, who are taxed at a 15% rate). This amount is not deductible for IRPJ purposes. The tax base is therefore the profit before income tax, after some adjustments, depending on the calculation method (i.e. APM or PPM).

~~Selling,~~Corporate ~~general,~~taxpayers ~~and~~may ~~administrative~~also ~~expenses~~be ~~for~~subject ~~the six months ended March 31, 2021 was $12.1 million representing an increase of $1.4 million or a 13% increase, as compared~~ to ~~$10.8 million for the six months ended March 31, 2020. The primary components of the net decrease include: general and administrative expenses had~~ a ~~net~~ ~~increase of $2.5 million due to the overall increase of our operating activities, salaries and wages increased by $0.7 million,~~surcharge ~~depreciation & amortization increased by $0.5 million due to the current quarter's amortization~~ of ~~Via~~10% ~~Varejo~~on ~~capital~~annual ~~software, and~~taxable ~~advertising~~income ~~expenses increased by $0.4 million due to increased activity~~ in ~~Brazil~~excess ~~and the spend related to marketing efforts, legal & professional fees decreased by $2.1 million due to the reduction~~ of ~~consultancy and regulatory services needs in the US for SEC purposes in the current quarter~~240,000 ~~software~~Brazilian ~~contractors~~reais ~~and consulting services decreased by $0~~(BRL).~~5 million, and sales and marketing decreased by $0.2 million.~~

~~Other (expense) income, net~~29

~~Other (expense)~~CARRIER ~~income~~EQ, ~~net~~LLC ~~for~~d/b/a ~~the~~AIRFOX ~~six~~AND months ended March 31, 2021 and 2020 was $314.2 thousand and $25.7 thousand, respectively. The increase in other (expense) income, net was primarily attributable to an increase in foreign currency transaction income of $89.1 thousand. Interest income increase by $158.9 thousand primarily due to interest earned from funds in interest bearing accounts.SUBSIDIARIES

~~Income Tax~~NOTES ~~Benefit~~TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~Income tax benefit for the six months ended March 31, 2021 and 2020 was $0.2 million and $82.0 thousand, respectively.~~UNAUDITED

~~LIQUIDITY AND~~Note ~~CAPITAL~~15 – ~~RESOURCES~~Related Party Transaction

~~Our working~~The ~~capital~~related ~~deficit~~party ~~increased~~transactions ~~$7.6 million~~between orthe ~~622%,~~Company and toVia ~~$8.8 million~~Varejo aswere ofrevenue ~~March 31,~~totaling ~~2021 from~~ $132.~~2 million~~3 ~~as of~~thousand ~~September~~recognized ~~30,~~from ~~2020.~~the ~~The~~upfront ~~increase~~payment infor ~~working~~software ~~capital~~development ~~deficit~~services isand ~~mainly~~$361.9 ~~attributable~~thousand from transactional fees related to the ~~increase~~Via inVarejo ~~accrued~~service ~~liabilities~~agreement ~~and~~as ~~due to~~of ~~related~~June ~~party~~30, 2021.

~~We have~~Note ~~historically~~16 ~~experienced~~– ~~recurring~~Subsequent losses and negative cash flows from operations. At March 31, 2021, we had a working capital deficit of $8.8 million which included cash and cash equivalents of $4.9 million. The following table summarizes total current assets, liabilities and working capital deficit for the periods indicated:Events

	March 31, 2021			September 30, 2020			Change Dollars			Change Percentage
Current assets	$	6,534,616		$	5,530,443		$	1,004,173			18	%
Current liabilities		15,338,911			6,749,448			8,589,463			127	%
Working capital deficit	$	(8,804,295	)	$	(1,219,005	)	$	(7,585,290	)		(622	)%

On July 8, 2021, Lake Niassa made a capital contribution to Airfox in the amount of $480 thousand, with no additional membership interests issued or ownership rights granted.

~~Cash Flows~~30

~~We have~~ITEM ~~historically financed operations through cash flows from investing and financing activities~~2. AtMANAGEMENT’S ~~March 31,~~DISCUSSION ~~2021,~~AND ~~our~~ANALYSIS ~~principal source~~OF ofFINANCIAL ~~liquidity~~CONDITION ~~was~~AND ~~$4.9 million~~RESULTS inOF ~~cash and cash equivalents. Other uses of cash may include capital expenditures and products technology expansion.~~OPERATIONS

	For the Six Months Ended March 31,
	2021			2020
Net cash (used in) provided by operating activities	$	(5,914,230	)	$	2,418,247
Net cash used in investing activities	$	(1,624,229	)	$	(2,040,311	)
Net cash provided by financing activities	$	9,206,002		$	188,380

SPECIAL NOTE ABOUT FORWARD-LOOKING STATEMENTS

29This Quarterly Report on Form 10-Q contains, and our officers and representatives may from time to time make, "forward-looking statements" within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations, estimates, and projections about the Company’s industry, management’s beliefs, and certain assumptions made by management. Forward-looking statements include our expectations regarding product, services, and maintenance revenue, and short- and long-term cash needs. In some cases, words such as “anticipates,” “expects,” “intends,” “plans,” “believes,” “estimates,” variations of these words, and similar expressions are intended to identify forward-looking statements. The statements are not guarantees of future performance and are subject to certain risks, uncertainties, and assumptions that are difficult to predict; therefore, actual results may differ materially from those expressed or forecasted in any forward-looking statements. Risks and uncertainties of our business include those set forth under “Risk Factors” in our Annual Report on Form 10-K (“Form 10-K”) as of and for the year ended September 30, 2020, as filed with the United States Securities and Exchange Commission (“SEC”) on January 8, 2021. Unless required by law, we undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise. However, readers should carefully review the risk factors set forth in other reports or documents we file from time to time with the Securities and Exchange Commission, particularly any future Annual Reports on Form 10-K, any Quarterly Reports on Form 10-Q and any Current Reports on Form 8-K.

~~Operating Activities~~COVID-19

~~Net~~During ~~cash~~this uncertain ~~used~~time, inour ~~operating~~critical ~~activities~~priorities ~~for~~are the ~~six~~health ~~months~~and ~~ended~~safety ~~March~~of ~~31, 2021~~our ~~was~~employees ~~$5.9~~and ~~million.~~contractors, ~~Cash~~all ~~was~~of ~~consumed~~whom began working from ~~operations~~home and byreduced ~~the~~travel ~~loss~~to ofessential ~~$11~~business needs.~~9 million,~~ ~~non-cash~~We ~~items~~currently ~~consisting~~have ~~primarily~~a ofCompany-wide ~~amortization totaling~~work-from-home $0program.~~8 million,~~ ~~impairment~~We ofwill ~~capitalized~~continue ~~software~~to ~~totaling~~actively monitor ~~$0.7~~the ~~million.~~situation ~~Changes~~and inmay ~~other~~take ~~working~~further ~~capital~~actions ~~accounts~~that ~~had~~alter ~~a positive~~our ~~impact~~business ofoperations ~~$4.3~~as ~~million~~may onbe ~~cash~~required by federal, ~~including~~state, ~~Accrued~~local ~~Liabilities~~authorities, or ofthat ~~$2.2~~we ~~million,~~determine ~~and~~are ~~Due~~in ~~from~~the ~~Related~~best ~~Party~~interests of ~~$1.4~~our ~~million~~employees.

~~Net cash~~The ~~provided~~COVID-19 bypandemic ~~operating~~has ~~activities~~had ~~for~~and ~~the~~continues ~~six~~to have ~~months~~a ~~ended~~significant ~~March~~impact 31on local, ~~2020~~state, ~~was~~national ~~$2.4~~and ~~million~~global economies. ~~Cash~~The ~~was~~actions ~~consumed~~taken ~~from~~by ~~continuing~~governments, ~~operations~~as well as businesses and byindividuals, to limit the ~~loss~~spread of ~~$10~~the disease has significantly disrupted the Company’s normal activities.6 ~~million~~Numerous businesses, including ~~non-cash~~our ~~items~~contractors, ~~consisting~~collaborative ~~primarily~~partners ofand ~~amortization~~suppliers ~~totaling~~have ~~$0.3~~either ~~million~~shut down or are operating on a limited basis, ~~stock~~employees have been furloughed or laid off and social distancing has been mandated through stay-~~based~~in-place ~~compensation~~orders. ~~totaling~~The Company expects these actions to ~~$0.2~~have ~~million~~a significant impact on the Company’s results of operations, particularly with respect to research and development, and financial position. ~~Changes~~The infull ~~other~~extent ~~working~~of ~~capital~~the ~~accounts~~impact ~~had~~to athe ~~positive~~Company due to the impact of ~~$12~~the COVID-19 pandemic cannot be reasonably estimated at this time.5 ~~million~~The extent to which the COVID-19 pandemic will impact the Company will depend on ~~cash~~future developments, ~~including~~which ~~deferred~~are ~~revenue~~highly –uncertain ~~Mastercard~~and ~~Program~~cannot ~~Agreement~~be reasonably predicted, including the duration of ~~$12.6~~the ~~million~~outbreak, ~~offset~~the byincrease ~~$3.1~~or ~~million~~reduction in ~~AirToken~~governmental ~~refund~~restrictions ~~liability~~to businesses and individuals, the potential for a resurgence of the virus and other factors.

~~Investing Activities~~OVERVIEW

~~Net cash~~Carrier ~~used~~EQ, inLLC, ~~investing~~doing ~~activities~~business ~~during~~as Airfox (the “Company”), ~~six~~was ~~months~~incorporated ~~ended~~in ~~March 31~~Delaware on May 21, ~~2021~~2020 ~~was~~with ~~$1.6 million~~a ~~which~~principal ~~substantially~~place ~~consisted~~ of ~~the~~business ~~acquisition~~in ofBoston, ~~capitalized~~Massachusetts. ~~software~~The Company ~~costs~~was ~~relating~~previously toformed ~~the~~as ~~Via~~a ~~Varejo~~corporation, ~~Services~~CarrierEQ, ~~Agreement~~Inc. and was incorporated in Delaware on January 19, 2016.

~~Net~~On May 21, 2020, the Company filed a certificate ~~cash~~of ~~used~~conversion in(the ~~investing~~“Certificate ~~activities~~of ~~during~~Conversion”) to convert the ~~six~~Corporation ~~months~~to ~~ended~~a ~~March~~Limited ~~31,~~Liability ~~2020~~Company ~~was~~and $2to change the Company’s name from “CarrierEQ, Inc.0” ~~million~~to ~~which~~“Carrier ~~substantially~~EQ, ~~consisted~~LLC” ofThe ~~the~~conversion ~~acquisition~~and name change became effective on May 21, 2020. The Company filed a certificate of ~~capitalized~~formation ~~software~~of ~~costs~~Carrier ~~relating~~EQ, toLLC (the ~~Via~~“Certificate ~~Varejo~~of ~~Services~~Formation”) ~~Agreement~~on May 21, 2020.

~~We expect~~On toMay ~~make~~21, ~~investments~~2020, inthe ~~our~~Company ~~personnel,~~was ~~systems,~~fully ~~corporate~~acquired by ~~facilities~~Via Varejo S.A, ~~and~~a ~~information~~corporation ~~technology~~organized ~~infrastructure~~under inthe ~~Fiscal~~laws ~~2021~~of the Federative Republic of Brazil (“Via Varejo”) through Lake ~~and~~Niassa ~~thereafter~~Empreendimentos e Participações Ltda. ~~However~~, ~~the~~a ~~amount~~limited ofliability ~~our~~company ~~capital~~duly ~~expenditures~~organized ~~has~~under ~~fluctuated~~the ~~materially~~laws ~~and~~of ~~may~~the ~~continue~~Federative Republic toof ~~fluctuate~~Brazil onand anwholly-owned ~~annual basis~~by Via Varejo ("Transaction").

~~Financing~~On June 30, 2021, Lake Niassa determined to discontinue ~~Activities~~the development of AirTokens and end the AirToken project related to the Company’s business. At this time, the Company does not have the ability to further develop AirTokens as part of its business plan in the absence of new laws or a definitive regulatory regime (in both the U.S. and Brazil) regarding the use and transferability of AirTokens (and other similar tokens issued on the Ethereum block chain that are classified as securities). Current laws and regulatory regimes do not provide for the Company to utilize the AirTokens as envisioned by the Company since AirTokens are no longer freely transferable and the previous market for AirTokens no longer exists. AirTokens were never fully developed and never gained full functionality. As previously stated, AirTokens are not currently freely transferable and no market exists for AirTokens. As a result of the discontinuation of the development of AirTokens, AirTokens will lose their functionality in full, and it is likely that no market for AirTokens will ever be re-created and that AirTokens will not again ever be freely transferable.

Net cash provided by financing activities related primarily to $6.4 million in proceeds from a related party and $2.8 million in capital contributions relating to the Via Varejo Services Agreement for the six months ended March 31~~, 2021.~~

~~Net~~On June 14, 2021, the Company, Lake Niassa and ~~cash~~banQi ~~provided~~Instituição byde ~~financing~~Pagamento ~~activities~~Ltda ~~related~~(formerly known as AirFox Servicos E Intermediacoes Ltda (“banQi”), a limited liability company organized under the laws of the Federative Republic of Brazil entered into the 7th Amendment and Consolidation of the Articles of Association of banQi (the “7th Amendment”). Pursuant to $0the terms of the 7th Amendment, the banQi and Lake Niassa (i) increased banQi 's share capital from BRL 1,000,000.200 (one million reais) to BRL 69,870,000.00 (sixty-nine million, eight hundred and seventy thousand reais), which represents an increase of BRL 68,870,000.00 (sixty-eight million, eight hundred and seventy thousand reais); and (ii) issued 68,870,000 (sixty-eight million, eight hundred and seventy thousand) new quotas, with par value of BRL 1.00 (one real) each, fully subscribed and paid up, in ~~proceeds~~Brazilian ~~from~~currency, through the ~~exercise~~capitalization of ~~options~~Advances for ~~the~~Future ~~six~~Capital ~~months~~Increase ("AFAC") ~~ended~~made ~~March 31,~~by ~~2020~~Lake Niassa.

~~SIGNIFICANT~~Prior to entering into the 7th Amendment, the ~~ACCOUNTING~~Company ~~POLICIES~~had a 99.99% ownership interest in banQi and Lake Niassa had a 0.01% ownership interest in banQi. Pursuant to the 7th Amendment, and the transfer of banQi’s share capital to Lake Niassa, the Company’s ownership interest in banQi decreased to 1.43% of the share capital of banQi, and Lake Niassa’s ownership interest in banQi increased to 98.57% of the share capital of banQi, which makes Lake Niassa the controlling owner of banQi.

~~Our significant~~As ~~accounting~~a ~~policies,~~result of ~~including~~this ~~the~~change ~~assumptions~~in ~~and~~control, ~~judgements~~on ~~underlying~~June ~~them~~14, ~~are~~2021, ~~disclosed in~~ the ~~Notes~~Company todetermined ~~the~~that ~~Condensed Consolidated~~it ~~Financial~~did ~~Statements.~~not We have ~~consistently~~a ~~applied~~controlling ~~these~~interest ~~policies~~over inbanQi, ~~all~~and ~~material respects. We do not believe that our operations~~banQi towas ~~date~~deconsolidated ~~have~~from ~~involved~~the ~~uncertainty~~Company's ofcondensed ~~accounting~~consolidated ~~treatment,~~financial ~~subjective judgement, or estimates, to any significant degree~~statements.

~~OFF-BALANCE~~As of June ~~SHEET~~30, ~~ARRANGEMENTS~~2021, banQi met all the conditions to be classified as discontinued operations, and because we consider the loss of the controlling interest of banQi to be a strategic shift that will have a major effect on our operations and financial results, represented a discontinued operation. All assets and liabilities associated with banQi were therefore classified as assets and liabilities of discontinued operations in our condensed consolidated balance sheets for the periods presented. Further, all historical operating results for our Legacy Business are reflected within discontinued operations in the condensed consolidated statements of comprehensive loss for all periods presented.

WebanQi met dothe ~~not~~criteria ~~have~~within ~~any~~Accounting ~~outstanding~~Standards ~~derivative~~Codification ~~financial~~(“ASC”) ~~instruments~~205-20, ~~off-balance~~Presentation ~~sheet~~of ~~guarantees,~~Financial ~~interest~~Statements ~~rate~~to ~~swap~~be ~~transactions~~reported as ordiscontinued ~~foreign currency~~operations ~~forward~~because ~~contracts~~the transaction was a strategic shift in business that had a major effect on our operations and financial results. ~~Furthermore~~Therefore, we dohave ~~not~~reported ~~have~~the ~~any~~historical ~~retained~~results orof ~~contingent~~banQi ~~interest~~including inthe ~~assets~~results ~~transferred~~of tooperations anand ~~unconsolidated~~cash flows as discontinued ~~entity~~operations, ~~that~~and ~~serves~~related assets and liabilities were retrospectively reclassified as ~~credit,~~assets ~~liquidity~~and orliabilities ~~market~~of ~~risk~~discontinued ~~support~~operations for toall ~~such~~periods ~~entity~~presented herein. WeUnless dootherwise ~~not~~noted, applicable amounts in the prior year have ~~any~~been ~~variable~~recast ~~interest~~to inconform anto ~~unconsolidated~~this discontinued ~~entity~~operations ~~that~~presentation. ~~provides~~Refer ~~financing~~to Note 3, ~~liquidity~~“Summary of Significant Accounting Policies” of our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for additional information. Unless otherwise indicated, ~~market~~the ~~risk~~following orinformation relates ~~credit~~to ~~support~~our continuing operations following the deconsolidation of banQi. A description of our business prior to usthe orconsummation ~~that~~of the ~~engages~~transaction is included in ~~leasing~~Item 1. “Business”, ~~hedging~~in orPart ~~research~~I ~~and~~of ~~development~~the Annual Report on Form 10-K for the year ended September ~~services~~30, 2020 that was previously filed with usthe Securities and Exchange Commission (“SEC”) on January 8, 2021.

~~ITEM 3.~~RESULTS ~~QUANTITATIVE~~OF ~~AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK~~OPERATIONS

~~Not~~The following comparative analysis of results ~~Applicable~~of operations for the three and nine months ended June 30, 2021 and 2020 are based on the comparative unaudited condensed consolidated financial statements, footnotes, and related information for the periods identified. This analysis should be read in conjunction with the unaudited condensed consolidated financial statements and the notes to those statements that are included elsewhere in this filing.

30The following table shows our results of operations of the Company for the periods indicated.

~~ITEM 4. CONTROLS AND PROCEDURES~~32

~~Evaluation~~The historical results presented below are not necessarily indicative of ~~Disclosure~~the ~~Controls~~results ~~and~~that ~~Procedures~~may be expected for any future period.

Our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2021. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Securities Exchange Act of 1934 is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of March 31, 2021, our principal executive officer and principal financial officer concluded that, as of such date, our disclosure controls and procedures were not effective at the reasonable assurance level.

	Three Months Ended June 30,						Change
	2021			2020			Dollars			Percentage

Revenue	$	—		$	—			—			—
Cost of revenue		—			—			—			—
Selling, general and administrative		2,046,330			5,105,903			(3,059,573	)		(60	%)
Operating expenses		2,046,330			5,105,903			(3,059,573	)		(60	%)
Other (expense) income, net		12,453,871			82,828			12,371,043			14936	%
Income (loss) from continuing operations before income taxes		10,407,541			(5,023,075	)		15,430,616			(307	%)
Income tax benefit		—			47,620			(47,620	)		(100	%)
Net income (loss) from continuing operations		10,407,541			(4,975,455	)		15,382,996			(309	%)
Net income (loss) from discontinued operations		(4,264,548	)		(1,147,124	)		(3,117,424	)		272	%
Net loss	$	6,142,993		$	(6,122,579	)		12,265,572			(200	%)

~~The matters~~Operating ~~involving internal controls and procedures that our management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board include the following:~~expenses

~~For the year ended September 30~~Selling, ~~2020~~General, we did not effectively apply the Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, or the COSO framework, due primarily to an insufficient complement of personnel possessing the appropriate accounting and ~~financial~~Administrative reporting knowledge and experience to determine the appropriate accounting for non-recurring transactions and transactions requiring more complex accounting judgment. The Company has not established an audit committee which led to ineffective oversight in the establishment and monitoring of required internal controls and procedures.Expenses

~~We did~~Selling, ~~not~~general, ~~maintain~~and anadministrative ~~appropriate~~expenses ~~level~~for the ofthree ~~evidence~~months ofended ~~the~~June ~~effectiveness~~30, of2021 ~~controls~~was ~~over~~$2 ~~the~~million ~~preparation~~representing ~~and~~a ~~review~~decrease of ~~certain~~$3.1 ~~reconciliations utilized~~million inor ~~the~~a ~~financial~~60% ~~close~~decrease, ~~processes~~as compared to ~~ensure~~$5.1 ~~that~~million for the ~~information~~three ~~recorded~~months inended ~~the~~June ~~general ledger was complete and accurate~~30, ~~including the stock-based compensation process~~2020. InThe ~~addition,~~primary wecomponent ~~did~~of ~~not~~the ~~maintain~~net ~~effective~~decrease ~~controls~~is ~~over~~due to the ~~preparation~~overall ~~and~~decrease ~~review~~ of ~~the~~our ~~condensed~~operating activities ~~consolidated~~as ~~financial~~depreciation ~~statements~~& toamortization, ~~ensure~~Legal ~~that~~& weProfessional ~~identified~~Fees and ~~accumulated~~Salaries ~~all~~and ~~required~~wages. ~~supporting~~This ~~information~~decrease toof ~~ensure~~our ~~the~~operating ~~completeness~~activities is ~~and~~attributed ~~accuracy~~to of the ~~information~~migration ~~contained~~of inactivities ~~the~~to ~~condensed consolidated financial statements~~Brazil.

~~In addition,~~Other as(expense) ~~a result of the foregoing errors~~income, the Company has determined that there was a material weakness in internal control over financial reporting related to its ICO and Airtoken Gains revenue recognition procedures. Our management has re-evaluated its assessment of our disclosure controls and procedures and internal control over financial reporting as of March 31, 2021 and concluded that each was ineffective as of that date due to the existence of the foregoing material weakness.net

~~Lastly~~Other (expense) income, we ~~did~~net ~~not~~for ~~implement~~the ~~appropriate~~three ~~general~~months ~~information~~ended June ~~technology~~30, ~~controls~~2021 asand ~~the~~2020 ~~Company~~was ~~did~~$12 million ~~not~~and ~~maintain~~$82 thousand, ~~effective~~respectively. ~~logical~~The ~~access~~increase ~~and program~~in ~~change~~other ~~controls~~(expense) ~~over~~income, ~~our~~net ~~third-party~~was ~~systems,~~primarily attributable ~~including~~to ~~the~~write ~~general~~off ~~ledger~~Airtoken ~~system~~Project (discontinued).

~~Management’s Remediation Initiatives:~~33

~~In an~~Income ~~effort~~Tax ~~to remediate the identified material weakness and enhance our internal controls, we have initiated the following measures:~~Benefit

●Income Astax webenefit ~~secure~~for ~~additional~~the ~~working~~three ~~capital,~~months weended ~~intend~~June 30, to2021 ~~create~~and ~~additional~~2020 ~~full-time~~was ~~accounting~~$0 ~~staff~~thousand ~~positions in order to increase our personnel resources~~ and ~~technical~~$47 ~~accounting expertise within the accounting function~~thousand, ~~to oversee the accounting function and assist with implementing and enhancing our internal controls over financial reporting~~respectively.

●The Wefollowing ~~will~~table ~~continue~~shows toour ~~utilize~~results anof ~~accounting~~operations of ~~and~~The ~~financial~~Company ~~reporting~~for ~~advisory~~the ~~firm~~periods ~~with~~indicated. ~~significant~~The ~~experience~~historical ~~with~~results ~~publicly~~presented ~~held~~below ~~companies~~are tonot ~~assist~~necessarily ~~our~~indicative ~~management~~of inthe ~~evaluating~~results ~~significant~~that ~~transactions~~may be ~~and~~expected ~~conclusions reached regarding technical accounting matters and financial reporting disclosures~~ for ~~the~~any ~~foreseeable~~ future ~~until our internal team is fully staff~~period.

	Nine Months Ended June 30,						Change
	2021			2020			Dollars			Percentage

Revenue	$	—		$	—			—			—
Cost of revenue		—			—			—			—
Selling, general and administrative		7,714,303			12,283,660			(4,569,357	)		(37	%)
Operating expenses		7,714,303			12,283,660			(4,569,357	)		(37	%)
Other (expense) income, net		12,652,531			1,504			12,651,027			841159	%
Income (loss) from continuing operations before income taxes		4,938,228			(12,282,156	)		17,220,384			(140	%)
Income tax benefit		178,662			129,661			49,001			38	%
Net income (loss) from continuing operations		5,116,890			(12,152,495	)		17,269,385			(142	%)
Net income (loss) from discontinued operations		(10,851,961	)		(4,614,960	)		(6,237,001	)		135	%
Net loss	$	(5,735,071	)	$	(16,767,455	)		11,032,384			(66	%)

●Operating We will reevaluate the AirToken Project in order analyze its future, as its continuity is deeply dependent of the milestones that are completely out of the Company’s control. Once, the regulatory and business obstacles can be overcome, then the Company will be able to decide to resume further development of the Airtoken project, since overcoming these hurdles is a prerequisite before spending time on the actual blockchain components and launching a “decentralized lending market-place”.expenses

~~Changes in~~Selling, ~~Internal~~General, ~~Control~~and ~~Over~~Administrative ~~Financial Reporting~~Expenses

~~Except~~Selling, general, and administrative expenses for asthe ~~set~~nine ~~forth~~months ~~above~~ended June 30, ~~there~~2021 ~~were~~was no$7.7 ~~changes~~million torepresenting ~~our~~a ~~internal~~decrease ~~control~~of ~~over~~$4.5 ~~financial~~million ~~reporting~~or ~~during~~a 37% decrease, as compared to $12.3 million for the ~~quarter~~nine months ended ~~March 31~~June 30, ~~2021 that~~2020. ~~have~~The ~~materially~~primary ~~affected,~~component orof ~~are~~the ~~reasonably~~net ~~likely~~decrease is due to ~~materially~~the ~~affect~~overall decrease of our operating activities, Legal & Professional Fees and Salaries and wages. This decrease of our ~~internal~~operating ~~control~~activities ~~over~~is ~~financial~~attributed ~~reporting~~to the migration of activities to Brazil.

32Other (expense) income, net

~~PART~~Other (expense) income, net for the nine months ended IIJune —30, ~~OTHER~~2021 ~~INFORMATION~~and 2020 was $12.6 million and $1 thousand, respectively. The increase in other (expense) income, net was primarily attributable to write off AirToken Project (discontinued).

~~ITEM 1.~~Income ~~LEGAL~~Tax ~~PROCEEDINGS~~Benefit

~~On January~~Income ~~29,~~tax ~~2020~~benefit ~~Gad~~for ~~Red Propaganda Ltda. (“GAD”) filed a civil lawsuit against our Company’s operating subsidiary banQi Instituição de Pagamento Ltda (dba “banQi”) in 41o Civil Court of Justice of~~ the ~~Estate~~nine ofmonths ~~Sao~~ended ~~Paulo.~~June ~~The~~30, ~~lawsuit~~2021 ~~alleges~~and ~~that~~2020 ~~banQi~~was ~~failed~~$178 tothousand ~~fully compensate GAD for certain marketing~~ and ~~other services GAD performed on behalf of banQi pursuant to an alleged strategic partnership GAD entered into with banQi. GAD demands payments of up to approximately U.S.~~$~~690,820~~129 ~~for services performed. banQi filed an answer to the claim on May 15~~thousand, ~~2020 denying any liability for any payments GAD is seeking~~respectively. ~~This proceeding remains pending.~~

~~We are~~Discontinued not aware of any pending or threatened claims that we violated any federal or state securities laws. However, we cannot assure you that any such claim will not be asserted in the future or that the claimant in any such action will not prevail. The possibility that such claims may be asserted in the future will continue until the expiration of the applicable federal and state statutes of limitations. If the payment of additional rescission claims or fines is significant, it could have a material adverse effect on our cash flow, financial condition or prospects and the value of the AirTokens. For additional information, see Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources, and also see Note 12 - Commitments and Contingencies - Legal Proceedings in the notes to the condensed consolidated financial statements appearing elsewhere in this Report.

~~ITEM~~Primarily due to the cancellation of the AirToken ~~1A.~~project, ~~RISK~~among ~~FACTORS~~other reasons, the Company's main functions and activities relating to the development and management of a software technology platform consisting of a digital wallet application and an alternative credit scoring and lending application are migrating to the banQi entity in Brazil.

~~Not~~In connection with the above strategy, the Company ~~Applicable~~is gradually transferring contracts with some suppliers to Brazil.

~~ITEM~~So, certain new features and enhancements for the VV digital wallet and 2.for ~~UNREGISTERED~~the ~~SALES~~personal OFloan ~~EQUITY~~product ~~SECURITIES~~have ~~AND~~been ~~USE~~developed OFin ~~PROCEEDS~~Brazil.

~~Not~~In Brazil, the operation has been growing consistently, with an increase ~~Applicable~~in VV digital wallet customers. All these factors explain the growth in revenue and in costs and expenses of the operation in Brazil (banQi), as can be seen in the results presented in Note 4.

~~ITEM 3. DEFAULTS UPON SENIOR SECURITIES~~34

~~Not Applicable~~LIQUIDITY AND CAPITAL RESOURCES

~~ITEM~~Our working capital deficit increased $4.1 million or 343%, to $5.4 million as of June 30, 2021 from $1.2 million ~~MINE~~as ~~SAFETY~~of ~~DISCLOSURES~~September 30, 2020. The increase in working capital deficit is mainly attributable to the increase in accrued liabilities and due to related party.

~~Not~~We have historically experienced recurring losses ~~Applicable~~and negative cash flows from operations. At June 30, 2021, we had a working capital deficit of $5.4 million which included cash and cash equivalents of $378 thousand. The following table summarizes total current assets, liabilities and working capital deficit for the periods indicated:

ITEM 5. OTHER INFORMATION

	June 30, 2021 (unaudited)			September 30, 2020 (audited)			Change Dollars			Change Percentage
Current assets	$	1,151,049		$	5,530,443		$	(4,379,394	)		-79	%
Current liabilities	$	6,549,115		$	6,749,448		$	(200,333	)		-3	%
Working capital deficit	$	(5,398,066	)	$	(1,219,005	)	$	(4,179,061	)		343	%

~~Not Applicable~~Cash Flows

~~ITEM~~We have historically financed operations through 6cash flows from investing and financing activities. ~~EXHIBITS~~At June 30, 2021, our principal source of liquidity was $1 million in cash and cash equivalents. Other uses of cash may include capital expenditures and products technology expansion.

INDEX TO EXHIBITS

	Nine Months Ended June 30, (unaudited)						Change
	2021			2020			Dollars
Net cash (used in) provided by operating activities	$	(3,994,863	)	$	(1,686,446	)		(2,308,417	)
Net cash used in investing activities	$	(1,980,976	)	$	(2,684,767	)		703,791
Net cash provided by financing activities	$	3,956,672		$	2,109,384			1,847,288

Incorporated by Reference

Filed or Furnished

Exhibit #

Exhibit Description

Form

Date Filed

Number

Herewith

2.1

Certificate of Ownership and Merger

8-K

5/28/20

2.1

3.1.

Restated Certificate of Incorporation

8-K

5/28/20

3.1

3.2

Certificate of Conversion

8-K

5/28/20

3.2

3.3

Certificate of Formation

8-K

5/28/20

3.3

4.1

Limited Liability Company Agreement

8-K

5/28/20

4.1

4.4

Amended and Restated AirToken Terms & Conditions

10/A

9/25/19

4.4

31.1

Certification pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, executed by the Principal Executive Officer of the Company

Filed

31.2

Certification pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, executed by the Principal Financial Officer of the Company

Filed

Operating Activities

33Net cash used in operating activities for the nine months ended June 30, 2021 was $3.9 million. Cash was consumed by accrued liabilities $5.8 million, Due from related party $1.4 million and Due to related party $11 million.

32.1

Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, executed by the Principal Executive Officer of the Company

Filed

32.2

Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, executed by the Principal Financial Officer of the Company

Filed

101

XBRL data files of Financial Statements and Notes contained in this Quarterly Report on Form 10-Q

Filed

Investing Activities

34Net cash used in investing activities during the nine months ended June 30, 2021 was $1 million which substantially consisted of the acquisition of capitalized software costs relating to the Via Varejo Services Agreement.

~~SIGNATURES~~Financing Activities

~~Pursuant to~~Net ~~the~~cash ~~requirements~~provided ofby ~~the~~financing ~~Securities~~activities ~~Exchange~~related primarily ~~Act~~to of$3.9 ~~1934,~~million ~~the~~in ~~registrant~~capital ~~has~~contributions ~~duly~~relating ~~caused~~to ~~this~~the ~~report~~Via toVarejo beServices ~~signed~~Agreement onfor ~~its~~the ~~behalf~~nine ~~by the~~months ~~undersigned~~ended ~~thereunto~~June ~~duly~~30, ~~authorized~~2021.

	Carrier EQ, LLC.
Date: May 24, 2021	By:	/s/ Douglas de Carvalho Lopes
		Douglas de Carvalho Lopes
		Chief Financial Operating Officer (Principal Financial Officer)

SIGNIFICANT ACCOUNTING POLICIES

35Our significant accounting policies, including the assumptions and judgements underlying them, are disclosed in the Notes to the Condensed Consolidated Financial Statements. We have consistently applied these policies in all material respects. We do not believe that our operations to date have involved uncertainty of accounting treatment, subjective judgement, or estimates, to any significant degree.

OFF-BALANCE SHEET ARRANGEMENTS

We do not have any outstanding derivative financial instruments, off-balance sheet guarantees, interest rate swap transactions or foreign currency forward contracts. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. We do not have any variable interest in an unconsolidated entity that provides financing, liquidity, market risk or credit support to us or that engages in leasing, hedging or research and development services with us.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not Applicable

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2021. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Securities Exchange Act of 1934 is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of June 30, 2021, our principal executive officer and principal financial officer concluded that, as of such date, our disclosure controls and procedures were not effective at the reasonable assurance level.

The matters involving internal controls and procedures that our management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board include the following:

For the year ended September 30, 2020, we did not effectively apply the Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, or the COSO framework, due primarily to an insufficient complement of personnel possessing the appropriate accounting and financial reporting knowledge and experience to determine the appropriate accounting for non-recurring transactions and transactions requiring more complex accounting judgment. The Company has not established an audit committee which led to ineffective oversight in the establishment and monitoring of required internal controls and procedures.

We did not maintain an appropriate level of evidence of the effectiveness of controls over the preparation and review of certain reconciliations utilized in the financial close processes to ensure that the information recorded in the general ledger was complete and accurate, including the stock-based compensation process. In addition, we did not maintain effective controls over the preparation and review of the condensed consolidated financial statements to ensure that we identified and accumulated all required supporting information to ensure the completeness and accuracy of the information contained in the condensed consolidated financial statements.

Lastly, we did not implement appropriate general information technology controls as the Company did not maintain effective logical access and program change controls over our third-party systems, including the general ledger system.

Management’s Remediation Initiatives:

In an effort to remediate the identified material weakness and enhance our internal controls, we

●

will continue to utilize an accounting and financial reporting advisory firm with significant experience with publicly held companies to assist our management in evaluating significant transactions and conclusions reached regarding technical accounting matters and financial reporting disclosures for the foreseeable future until our internal team is fully staff.

Changes in Internal Control Over Financial Reporting

Except as set forth above, there were no changes to our internal control over financial reporting during the quarter ended June 30, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time our Company may become involved in legal proceedings or be subject to claims arising in the ordinary course of its business. For information regarding existing and potential claims against our Company, see Note 13 - Commitments and Contingencies - Legal Proceedings in the notes to the condensed consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q.

ITEM 1A. RISK FACTORS

Not Applicable

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Not Applicable

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not Applicable

ITEM 4. MINE SAFETY DISCLOSURES

Not Applicable

ITEM 5. OTHER INFORMATION

Not Applicable

ITEM 6. EXHIBITS

INDEX TO EXHIBITS

Incorporated by Reference

Filed or Furnished

Exhibit #

Exhibit Description

Form

Date Filed

Number

Herewith

2.1

Certificate of Ownership and Merger

8-K

5/28/20

2.1

3.1.

Restated Certificate of Incorporation

8-K

5/28/20

3.1

3.2

Certificate of Conversion

8-K

5/28/20

3.2

3.3

Certificate of Formation

8-K

5/28/20

3.3

4.1

Limited Liability Company Agreement

8-K

5/28/20

4.1

4.4

Amended and Restated AirToken Terms & Conditions

10/A

9/25/19

4.4

10.1

Employee Agreement - Lisbeth Reimer

8-K

5/27/21

10.1

10.2

7th Amendment and Consolidation of the Articles of Association of banQi Instituição de Pagamento Ltda

8-K

6/17/21

10.1

31.1

Certification pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, executed by the Principal Executive Officer of the Company

Filed

31.2

Certification pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, executed by the Principal Financial Officer of the Company

Filed

32.1

Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, executed by the Principal Executive Officer of the Company

Furnished

32.2

Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, executed by the Principal Financial Officer of the Company

Furnished

101.INS

Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)

Filed

101.SCH

Inline XBRL Taxonomy Extension Schema Document

Filed

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document

Filed

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document

Filed

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document

Filed

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document

Filed

104

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

Filed

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.

	Carrier EQ, LLC.

Date: September 24, 2021	By:	/s/ Lisbeth Reimer
		Lisbeth Reimer
		PEO/ PFO (Principal Executive and Financial Officer)

Filing Compare · Carrier EQ, LLC