Cover
Cover - shares | 9 Months Ended | |
Mar. 31, 2020 | Jun. 15, 2020 | |
Cover [Abstract] | ||
Entity Registrant Name | RedHawk Holdings Corp. | |
Entity Central Index Key | 0001353406 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --06-30 | |
Entity Incorporation, State or Country Code | NV | |
Entity File Number | 000-54323 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 963,651,157 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2020 |
Consolidated Balance Sheets (un
Consolidated Balance Sheets (unaudited) - USD ($) | Mar. 31, 2020 | Jun. 30, 2019 |
Current Assets: | ||
Cash | $ 99,246 | $ 1,648 |
Certificate of deposit | 100,374 | |
Receivables | 196,192 | |
Inventory, at cost | 181,604 | 181,227 |
Prepaid expenses | 257,189 | 122,436 |
Total Current Assets | 734,231 | 405,685 |
Property, Equipment and Improvements: | ||
Land | 110,000 | 110,000 |
Tooling and equipment | 5,600 | |
Building and improvements | 670,000 | 670,000 |
Property and Improvements Before Depreciation | 785,600 | 780,000 |
Less, accumulated depreciation | (135,980) | (112,479) |
Total Property and Improvement | 649,620 | 667,521 |
Other Assets: | ||
Operating lease right-of-use asset | 67,254 | |
Investment in real estate limited partnership | 257,173 | 257,173 |
Intangible asset, net of amortization of $444,820 and $404,946, respectively | 816,713 | 848,992 |
Other assets | 130,060 | 129,962 |
Total Other Assets | 1,271,200 | 1,236,127 |
Total Assets | 2,655,051 | 2,309,333 |
Current Liabilities: | ||
Accounts payable and accrued liabilities | 1,061,460 | 899,685 |
Deferred revenue | 267,145 | |
Current maturities of long-term debt | 190,439 | 184,585 |
Current portion of operating lease right-of-use liabilities | 20,386 | |
Lines of credit | 173,661 | 253,219 |
Insurance notes payable | 12,537 | 136,859 |
Total Current Liabilities | 1,725,628 | 1,474,348 |
Non-current Liabilities | ||
Due to related parties | 242,000 | 230,250 |
Other non-current liabilities | 503,750 | 703,750 |
Real estate note payable, net of current maturities | 216,459 | 224,097 |
Operating lease right-of-use liabilities, net of current portion | 46,868 | |
Convertible notes payable, net of $94,865 and $49,241 in deferred loan costs | 1,633,909 | 342,304 |
Total Long-Term Debt | 2,642,986 | 1,500,401 |
Total Liabilities | 4,368,614 | 2,974,749 |
Commitments and Contingencies | ||
Stockholders' Equity (Deficit): | ||
Common Stock, par value of $0.001 per share, 2,000,000,000 authorized shares and 1,171,208,112 and 1,034,340,037 issued, respectively | 1,171,208 | 1,034,340 |
Additional paid-in capital | 445,940 | 51,811 |
Accumulated other comprehensive gain (loss) | (13,392) | 2,735 |
Accumulated deficit | (7,052,616) | (5,674,436) |
Total Stockholders' Equity (Deficit) Before Treasury Stock | (1,133,205) | (85,058) |
Less, Treasury stock 201,548,643 shares, at cost | (580,358) | (580,358) |
Total Stockholders' Equity (Deficit) | (1,713,563) | (665,416) |
Total Liabilities and Stockholders' Equity (Deficit) | 2,655,051 | 2,309,333 |
5% Series A Preferred Stock [Member] | ||
Stockholders' Equity (Deficit): | ||
Preferred stock, value | 3,087,691 | 3,021,453 |
5% Series B Preferred Stock [Member] | ||
Stockholders' Equity (Deficit): | ||
Preferred stock, value | $ 1,227,964 | $ 1,479,039 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (unaudited) (Parenthetical) - USD ($) | Mar. 31, 2020 | Jun. 30, 2019 |
Amortization of intangible assets | $ 444,820 | $ 404,946 |
Deferred loan costs, noncurrent | $ 94,865 | $ 49,241 |
Preferred stock, authorized | 5,000 | 5,000 |
Preferred stock, issued | 3,750 | 4,000 |
Preferred stock, outstanding | 3,750 | 4,000 |
Common Stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common Stock, authorized | 2,000,000,000 | 2,000,000,000 |
Common Stock, issued | 1,171,208,112 | 1,034,340,037 |
Treasury stock | 201,548,643 | 201,548,643 |
5% Series A Preferred Stock [Member] | ||
Preferred stock, value (in dollars per share) | $ 1,123 | $ 1,099 |
Preferred stock, designated | 2,750 | 2,750 |
Preferred stock, issued | 2,750 | 2,750 |
Preferred stock, outstanding | 2,750 | 2,750 |
5% Series B Preferred Stock [Member] | ||
Preferred stock, value (in dollars per share) | $ 1,228 | $ 1,183 |
Preferred stock, designated | 1,250 | 1,250 |
Preferred stock, issued | 1,000 | 1,250 |
Preferred stock, outstanding | 1,000 | 1,250 |
Consolidated Statements of Oper
Consolidated Statements of Operations (unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Income Statement [Abstract] | ||||
Revenues | $ 148,674 | $ 73,556 | $ 217,989 | $ 169,076 |
Operating Expenses: | ||||
Costs of goods sold | 38,467 | 17,986 | 55,388 | 49,016 |
Sales and marketing expenses | 90,830 | 1,746 | 208,701 | 5,772 |
Professional fees | 62,525 | 43,462 | 229,885 | 210,229 |
Research and development costs | 25,420 | 83,901 | ||
Operating expenses | 76,796 | 97,384 | 212,893 | 106,795 |
Depreciation and amortization | 21,458 | 19,208 | 63,375 | 80,359 |
General and administrative | 47,624 | 27,973 | 182,157 | 171,936 |
Total Operating Expenses | 363,120 | 207,759 | 1,036,300 | 624,107 |
Net Loss from Operations | (214,446) | (134,203) | (818,311) | (455,031) |
Other Income (Expense): | ||||
Loss on extinguishment of debt, net | (129,338) | (84,811) | ||
Settlement gain (loss), net | (27,752) | 10,000 | (27,752) | (386,500) |
Interest (expense) income, net | (67,723) | 25,504 | (279,238) | (155,714) |
Total Other Income (Expense) | (224,813) | 35,504 | (391,801) | (542,214) |
Net Loss | (439,259) | (98,699) | (1,210,112) | (997,245) |
Other comprehensive income (loss): | ||||
Gain (loss) on foreign currency translation | (11,898) | (52) | (16,127) | 2,735 |
Total Other comprehensive income | (11,898) | (52) | (16,127) | 2,735 |
Comprehensive Loss | (451,157) | (98,751) | (1,226,239) | (994,510) |
Preferred Stock Dividends | (53,477) | (39,305) | (168,068) | (116,466) |
Comprehensive Loss Available for Common Stockholders | $ (504,634) | $ (138,056) | $ (1,394,307) | $ (1,110,976) |
Net Loss Per Share: | ||||
Basic (in dollars per share) | ||||
Diluted (in dollars per share) | ||||
Weighted Average Shares Outstanding: | ||||
Basic (in shares) | 969,280,348 | 557,460,616 | 924,946,538 | 487,312,611 |
Diluted (in shares) | 969,280,348 | 557,460,616 | 924,946,538 | 487,312,611 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (unaudited) - USD ($) | 9 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (1,210,112) | $ (997,245) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Amortization of intangibles | 39,874 | 56,859 |
Amortization of discount on convertible debentures | 16,350 | |
Amortization of deferred loan costs | 115,928 | 50,083 |
Depreciation | 23,501 | 23,500 |
Non-cash expenses | 246,279 | 95,242 |
Non-cash settlement loss | 224,976 | |
Loss on extinguishment of debt | 84,811 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (196,192) | (32,327) |
Inventory | (3,594) | 30,547 |
Prepaid expense and other assets | (326,184) | (2,903) |
Accounts payable and accrued liabilities | (181,044) | 14,626 |
Deferred Revenue | 267,145 | |
Net Cash Used in Operating Activities | (1,205,950) | (520,292) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Proceeds from sale of investments | 100,374 | |
Purchase of equipment | (5,600) | |
Proceeds from distribution from limited liability partnership | 367,827 | |
Purchase of license | (46,250) | |
Net Cash Provided by Investing Activities | 94,774 | 321,577 |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from related parties, net | 11,750 | 64,326 |
Proceeds from issuance of convertible debt | 1,910,862 | 181,000 |
Payments on convertible debt | (458,375) | (132,726) |
Purchase of treasury stock | (78,566) | |
Costs related to debt for equity conversions | (10,300) | |
Deferred loan costs | (159,566) | (33,110) |
Proceeds from long-term debt | 180,000 | |
Proceeds from short-term debt | 110,914 | 71,314 |
Payments on short-term debt | (190,472) | |
Net proceeds from (payments on) insurance notes payable | 21,561 | (2,071) |
Principal payments on long-term debt | (7,202) | (6,818) |
Net Cash Provided by Financing Activities | 1,239,472 | 233,049 |
Effect of exchange rate on cash | (30,698) | (22,491) |
Net change in cash | 97,598 | 11,843 |
Cash, Beginning of Period | 1,648 | 19,034 |
Cash, End of Period | 99,246 | 30,877 |
Non-Cash Investing and Financing Activities: | ||
Preferred stock dividends paid-in-kind | 114,859 | 116,466 |
Conversion of debt to common stock | 117,318 | 184,635 |
Common stock issued in lieu of cash for services and assets | 97,810 | 17,500 |
Conversion of preferred stock to common stock | 299,696 | |
Increase in liabilities related to license agreement acquisition | 403,750 | |
Operating lease assets obtained for operating lease liabilities | 67,254 | |
Supplemental Disclosures: | ||
Interest paid | 229,867 | $ 12,526 |
Income taxes paid |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Deficit) (unaudited) - USD ($) | SERIES A PREFERRED STOCK [Member] | SERIES B PREFERRED STOCK [Member] | COMMON STOCK [Member] | ADDITIONAL PAID-IN CAPITAL [Member] | ACCUMULATED OTHER COMPREHENSIVE GAIN (LOSS) [Member] | ACCUMULATED DEFICIT [Member] | TREASURY STOCK [Member] | Total |
Balance at beginning at Jun. 30, 2018 | $ 1,659,889 | $ 1,407,342 | $ 398,411 | $ 1,311,076 | $ (4,302,291) | $ (365,352) | $ 109,075 | |
Balance at beginning (in shares) at Jun. 30, 2018 | 1,473 | 1,250 | 398,410,762 | 35,471,535 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
PIK dividends | (116,465) | (116,465) | ||||||
Preferred stock dividends declared | $ 63,028 | $ 53,438 | 116,466 | |||||
Conversions | $ 293,454 | (22,339) | 271,115 | |||||
Conversions (in shares) | 293,453,979 | |||||||
Stock grants | $ 48,400 | 40,808 | 89,208 | |||||
Stock grants (in shares) | 484,000,004 | |||||||
Shares acquired | $ (78,566) | (78,566) | ||||||
Shares acquired (in shares) | 52,377,108 | |||||||
Net loss | 2,735 | (997,245) | (994,510) | |||||
Balance at ending at Mar. 31, 2019 | $ 1,722,917 | $ 1,460,708 | $ 740,265 | 1,329,545 | 2,735 | (5,416,001) | $ (443,918) | (603,677) |
Balance at ending (in shares) at Mar. 31, 2019 | 1,473 | 1,250 | 740,264,741 | 87,848,643 | ||||
Balance at beginning at Dec. 31, 2018 | $ 1,701,646 | $ 1,442,745 | $ 514,066 | 1,341,961 | 2,787 | (5,277,997) | $ (365,352) | (593,744) |
Balance at beginning (in shares) at Dec. 31, 2018 | 1,473 | 1,250 | 560,465,402 | 35,471,535 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Preferred stock dividends declared | $ 21,271 | $ 18,034 | (39,305) | |||||
Conversions | $ 160,799 | (21,916) | 138,883 | |||||
Conversions (in shares) | 160,799,339 | |||||||
Stock grants | $ 29,400 | 9,500 | 28,500 | |||||
Stock grants (in shares) | 19,400,000 | |||||||
Shares acquired | $ (78,566) | (78,566) | ||||||
Shares acquired (in shares) | 52,377,108 | |||||||
Net loss | (52) | (98,699) | (98,751) | |||||
Balance at ending at Mar. 31, 2019 | $ 1,722,917 | $ 1,460,708 | $ 740,265 | 1,329,545 | 2,735 | (5,416,001) | $ (443,918) | (603,677) |
Balance at ending (in shares) at Mar. 31, 2019 | 1,473 | 1,250 | 740,264,741 | 87,848,643 | ||||
Balance at beginning at Jun. 30, 2019 | $ 3,021,453 | $ 1,479,039 | $ 1,034,340 | 51,811 | 2,735 | (5,674,436) | $ (580,358) | (665,416) |
Balance at beginning (in shares) at Jun. 30, 2019 | 2,750 | 1,250 | 1,034,340,037 | 201,548,643 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Preferred stock dividends declared | $ 66,238 | $ 48,621 | (168,068) | (53,209) | ||||
Conversions | $ (299,696) | $ 86,933 | 288,754 | 72,791 | ||||
Conversions (in shares) | (250) | 86,933,293 | ||||||
Stock grants | $ 49,936 | 105,375 | 158,511 | |||||
Stock grants (in shares) | 49,934,782 | |||||||
Net loss | (16,127) | (1,210,112) | (1,226,239) | |||||
Balance at ending at Mar. 31, 2020 | $ 3,087,691 | $ 1,227,964 | $ 1,171,208 | 445,940 | (13,392) | (7,052,616) | $ (580,358) | (1,713,563) |
Balance at ending (in shares) at Mar. 31, 2020 | 2,750 | 1,000 | 1,171,208,112 | 201,548,643 | ||||
Balance at beginning at Dec. 31, 2019 | $ 3,065,337 | $ 1,212,803 | $ 1,170,708 | 443,240 | (1,494) | (6,559,880) | $ (580,358) | (1,249,644) |
Balance at beginning (in shares) at Dec. 31, 2019 | 2,750 | 1,000 | 1,170,708,112 | 201,548,643 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Preferred stock dividends declared | $ 22,354 | $ 15,161 | (53,477) | (15,964) | ||||
Stock grants | $ 500 | 2,700 | 3,200 | |||||
Stock grants (in shares) | 500,000 | |||||||
Net loss | (11,898) | (439,259) | (451,157) | |||||
Balance at ending at Mar. 31, 2020 | $ 3,087,691 | $ 1,227,964 | $ 1,171,208 | $ 445,940 | $ (13,392) | $ (7,052,616) | $ (580,358) | $ (1,713,563) |
Balance at ending (in shares) at Mar. 31, 2020 | 2,750 | 1,000 | 1,171,208,112 | 201,548,643 |
NATURE OF OPERATIONS AND CONTIN
NATURE OF OPERATIONS AND CONTINUANCE OF BUSINESS | 9 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF OPERATIONS AND CONTINUANCE OF BUSINESS | 1. NATURE OF OPERATIONS AND CONTINUANCE OF BUSINESS RedHawk Holdings Corp. was incorporated in the State of Nevada on November 30, 2005 under the name “Oliver Creek Resources Inc.” Effective August 12, 2008, we changed our name from “Oliver Creek Resources Inc.” to “Independence Energy Corp.” Effective October 13, 2015, by vote of a majority of the Company’s stockholders, the Company’s name was changed from “Independence Energy Corp.” to “RedHawk Holdings Corp.” Currently, the Company is a diversified holding company which, through our subsidiaries, is engaged in sales and distribution of medical devices, sales of branded generic pharmaceutical drugs, commercial real estate investment and leasing, sales of point of entry full-body security systems, and specialized financial services. Through its medical products business unit, the Company sells the SANDD™ Insulin Needle Destruction Unit (formerly known as the Disintegrator™), non-contact thermometers, face masks, surgical masks, UV lights, WoundClot Surgical - Advanced Bleeding Control, the Carotid Artery Digital Non-Contact Thermometer and Zonis ® Going Concern These financial statements have been prepared on a going concern basis, which implies that the Company will be able to continue as a going concern without further financing. The Company must continue to realize its assets to discharge its liabilities in the normal course of business. The Company has generated limited revenues to date and has never paid any dividends on its common stock and is unlikely to pay any common stock dividends or generate significant earnings in the immediate or foreseeable future. For the three month period ended March 31, 2020, the Company had revenues of $148,674, a consolidated net loss of $439,259. For the nine month period ended March 31, 2020, the Company had revenues of $217,989, a consolidated net loss of $1,210,112 and cash of $1,205,950 used in operating activities. As of March 31, 2020, the Company had cash of $99,246, a working capital deficit of $991,397 and an accumulated deficit of $7,052,616. The continuation of the Company as a going concern is still dependent upon the continued financial support from its stockholders, the ability to raise equity or debt financing, cash proceeds from the sale of assets and the attainment of profitable operations from the Company’s businesses in order to discharge its obligations. We cannot predict, with certainty, the outcome of our efforts to generate liquidity and profitability, or whether such actions would generate the expected proceeds to the Company. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The unaudited interim condensed financial statements of the Company as of March 31, 2020 and for the three and nine month periods ended March 31, 2020 and 2019 included herein have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). The year-end condensed balance sheet dated as of June 30, 2019 is audited and is presented here as a basis for comparison. Although the financial statements and related information included herein have been prepared without audit, and certain information and disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, the Company believes that the note disclosures are adequate to make the information presented not misleading. These unaudited condensed financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K as of and for the year ended June 30, 2019. In the opinion of our management, the unaudited interim financial statements included herein reflect all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of the Company’s financial position, results of operations, and cash flows for the periods presented. The results of operations for interim periods are not necessarily indicative of the results expected for the full year or any future period. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its subsidiaries in which we have a greater than 50% ownership. All material intercompany accounts have been eliminated upon consolidation. Equity investments, which we have an ownership greater than 20% but less than 50% through which we exercise significant influence over but do not control the investee and we are not the primary beneficiary of the investee’s activities, are accounted for using the equity method of accounting. Equity investments, which we have an ownership less than 20%, are recorded at cost. Use of Estimates The financial statements and related notes are prepared in conformity with GAAP which requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to valuation and impairment of investments, intangible assets, and long-lived assets, and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. Revenue Recognition In May 2014, the Financial Accounting Standards Board (which we refer to as the “FASB”) issued ASU 2014-19, Revenue from Contracts with Customers (ASU 2014-19). ASU 2014-19 established a single revenue recognition model for all contracts with customers, eliminates industry specific requirements and expands disclosure requirements. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this core principle, an entity should apply the following five steps: (1) identify contracts with customers, (2) identify the performance obligations in the contracts, (3) determine the transaction price, (4) allocate the transaction price to the performance obligation in the contract, and (5) recognize revenue as the entity satisfies performance obligations. Effective July 1, 2018, we adopted ASU 2014-19 using the modified retrospective method. The adoption of ASU 2014-19 did not have an impact on our consolidated financial statements but required enhanced footnote disclosures. See Note 3, Revenue Recognition, for additional information. We derive revenue from several types of activities – medical device sales, branded generic pharmaceutical sales, commercial real estate leasing and financial services. Our medical device sales include the marketing and distribution of certain professional and consumer grade digital non-contact thermometers, needle destruction unit and advanced bleeding control, non-compression hemostasis. Through our United Kingdom based subsidiary, we manufacture, and market, branded generic pharmaceuticals, and certain other generic pharmaceuticals known as “specials”. Our real estate leasing revenues are from certain commercial properties under lease. The financial service revenue is from brokerage services. The Company offers customer discounts in certain cases. Such discounts are estimated at time of product sale and revenues are reduced for such discounts at the time of the sale. Shipping and handling costs are included in revenue and costs of goods sold. Cash and Cash Equivalents We consider highly liquid investments with an original maturity of 90 days or less to be cash equivalents. The Company did not have any cash equivalents as of March 31, 2020 or June 30, 2019. Accounts Receivable Accounts receivables are amounts due from customers of our pharmaceutical, medical device and financial services divisions. We do not require collateral from our customers. The amount is reported at the billed amount, net of any expected allowance for bad debts. There was no allowance for doubtful accounts as of March 31, 2020 or June 30, 2019. Inventory Inventory consist of purchased thermometers, an advanced bleeding control, non-compression hemostasis, a patented antimicrobial ionic silver calcium catheter dressing, needle destruction devices and certain branded generic pharmaceuticals held for resale. All inventories are stated at the lower of cost or net realizable value utilizing the first-in, first-out method. Property and Improvements Property and improvements are stated at cost. We provide for depreciation expense on a straight-line basis over each asset’s useful life depreciated to their estimated salvage value. Buildings are depreciated over a useful life of 20 to 30 years. Building improvements are depreciated over a useful life of 5 to 10 years. Tooling and equipment are depreciated over a useful life of ten years. Our Louisiana real estate holdings include our former corporate headquarters on Chemin Metairie Road in Youngsville, Louisiana and a property on Jefferson Street in Lafayette, Louisiana. As of March 31, 2020, we are leasing both properties to third parties. The Company is also currently using a portion of the Chemin Metairie Road property for equipment storage for our real estate management unit. Effective August 1, 2017, the tenant that leases the Jefferson Street property renewed that lease through December 31, 2022 at a rent of $3,250 per month. Beginning December 1, 2019, the Chemin Metairie is leased through December 31, 2020 at a rental rate of $1,700 per month. Income Taxes Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. The Company follows Accounting Standard Codification (which we refer to as “ASC”) 740, Income Taxes, Basic and Diluted Net Loss Per Share The Company computes net loss per share in accordance with ASC 260, Earnings Per Share, At March 31, 2020, including accrued but unpaid interest, there was one remaining 2016 Fixed Rate Convertible Note outstanding which totaling $61,037 and is convertible into 4,069,118 shares of common stock upon conversion of the remaining 2016 Fixed Rate Convertible Note. During the nine months ended March 31, 2020, we issued in private offerings exempt from registration debt securities in the form of new 2019 Variable Rate Convertible Notes (See Note 7) in the amount of $1,078,862. The proceeds were used for working capital. The 2019 Variable Rate Convertible Notes are convertible into shares of common stock at a variable conversion rate. During the nine months ended March 31, 2020, we issued in private offerings exempt from registration debt securities in the form of new 2019 Fixed Rate Convertible Notes (See Note 7) in the amount of $832,000. With the proceeds we paid off certain variable rate convertible notes outstanding in the amount of approximately $458,000, plus accrued interest. The 2019 Fixed Rate Convertible Notes mature on the fifth anniversary of the date of issuance and are convertible into shares of our common stock at a price of $0.015 per share and include 25% warrant coverage at $0.01 per share (which we refer to as the “2019 Warrants”). At March 31, 2020, including accrued but unpaid dividends, there were potentially 205,846,071 shares of common stock issuable upon the conversion of our outstanding Series A Preferred Stock and, including accrued but unpaid dividends, there were potentially 122,796,364 shares of common stock issuable upon the conversion of our outstanding Series B Preferred Stock. The shares of common stock to be issued upon conversion of the warrants and the shares issuable from the conversion of the notes and the Series A and Series B Preferred stock have been excluded from earnings per share calculations because these shares are anti-dilutive. Comprehensive Income (Loss) ASC 220, Comprehensive Income Financial Instruments Pursuant to ASC 820, Fair Value Measurements and Disclosures Level 1. Level 2. Level 3. The Company’s financial instruments consist principally of cash, accounts receivable, accounts payable and accrued liabilities, debt, and amounts due to related parties. We believe that the recorded values of all of our other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations. Leases In February 2016, the FASB issued ASU 2016-02, Leases Reclassification Certain amounts in prior periods have been reclassified to conform to the current period presentation. |
REVENUE FROM CONTRACTS WITH CUS
REVENUE FROM CONTRACTS WITH CUSTOMERS | 9 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE FROM CONTRACTS WITH CUSTOMERS | 3. REVENUE FROM CONTRACTS WITH CUSTOMERS Revenue Recognition Sales of pharmaceuticals and medical devices are recognized generally at the point in time when delivery occurs and title transfers to the buyer. Sales of pharmaceuticals and medical devices are usually collected within 90 days of the date of sale. In certain cases, the customers make advance payments on orders of medical devices. Such advance payments are recorded as deferred revenue in the accompanying consolidated balance sheets. As of March 31, 2020 and June 30, 2019, we had $267,145 and $0, respectively, of deferred revenue recorded. We have distributorship and sales representative agreements in place with third parties who do not take ownership of products. Any costs incurred related to these agreements are considered to be sales and marketing expenses. In the quarter ended March 31, 2020, we entered into a one-year distribution agreement with Dolphin Medical LLC (the “distributor”), which requires the distributor to order and purchase a minimum number of medical devices in each quarter of the agreement. The Company has invoiced and recorded revenue of approximately $87,500 and the related cost of goods sold in the quarter ended March 31, 2020 for the required minimum purchase. We also earn rental income from operating leases which is recognized over the rental period as the tenant occupies the space and pays the rental amount. Rentals are paid at the beginning of the month covered by the lease. Disaggregation of Revenue For the three and nine month periods ended March 31, 2020 and 2019, a summary of our revenue on a disaggregated basis is as follows: Three Months Ended Nine Months Ended March 31, March 31, 2020 2019 2020 2019 Sales of pharmaceuticals $ — $ 1,457 $ — $ 71,792 Sales of medical devices 133,824 61,849 176,537 62,525 Rental revenue from operating lease payments 14,850 10,250 41,452 34,759 $ 148,674 $ 73,556 $ 217,989 $ 169,076 Transaction Prices In some cases, we may offer introductory discounts to customers. In such cases, we reduce the recorded revenue for such discounts. For the nine month periods ended March 31, 2020 and 2019, our revenues were reduced by $95,508 and $39,995, respectively, for such discounts. For the three month periods March 31, 2020 and 2019, our revenues were reduced by $52,859 and $39,995, respectively, for such discounts. Shipping and handling costs included in revenue was $805 and $1,305 for the three and nine month periods ended March 31, 2020, respectively. |
OTHER ASSETS
OTHER ASSETS | 9 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
OTHER ASSETS | 4. OTHER ASSETS The investment in Tower Hotel Fund 2013, LLC is recorded at cost and the Company is not aware of any indicator of impairment as of March 31, 2020. It is not practicable for the Company to estimate fair value of this investment. We are pursuing the sale of our remaining investment in the real estate limited partnership investment. During the year ended June 30, 2019, based on stability of operations of the underlying real estate property and recent valuations, the partnership refinanced the property. We received a distribution of approximately $370,000 from the real estate limited partnership following this refinancing. This distribution was recorded as a reduction of our investment in the limited partnership, which is recorded at cost. We are currently in negotiations to sell our interest in the partnership, but we are uncertain if such a transaction will close during the next twelve months. Thus, our investment is shown as a non-current asset as of March 31, 2020 in the accompanying consolidated balance sheet. As of March 31, 2020, we have approximately $387,111 ($304,471 net of accumulated amortization) in intangible assets related to licenses held by EcoGen. Such intangible assets are being amortized over an estimated useful life of 20 years. In September 2018, the Company acquired the exclusive license rights to certain medical device technology for $450,000, plus a broker’s fee of $17,500. Under the terms of the license agreement, the Company has paid $25,000 plus the first of a total twenty quarterly payments of $21,250. Any remaining payments become immediately payable upon the receipt of final approval by the FDA of devices related to the technology. Additionally, the Company agreed to pay a consulting fee of $1,000 per month for sixty months. The broker’s fee was paid through the issuance of 14 million shares of the Company’s common stock. The quarterly payments and the consulting fee have been suspended at the present time as the Company and the seller negotiate certain disputes related to representations made by the seller at the time the Company acquired the rights. The ultimate date and resolution of this negotiation cannot be estimated at this time. As a result, the Company has included all of the future payments under the original agreement as noncurrent in the accompanying March 31, 2020 and June 30, 2019 consolidated balance sheets. In the nine months ended March 31, 2020, we issued 20,000,000 shares of Common Stock under the terms of a 2015 consulting agreement as a result of reaching certain milestones related to the development of our needle destruction devices. Under the terms of this consulting agreement, an additional 40,000,000 shares of Common Stock may be issued if other milestones are met. |
INSURANCE NOTE PAYABLE
INSURANCE NOTE PAYABLE | 9 Months Ended |
Mar. 31, 2020 | |
Loans Payable [Abstract] | |
INSURANCE NOTE PAYABLE | 5. INSURANCE NOTE PAYABLE We finance a portion of our insurance premiums. At March 31, 2020, there was a $12,537 outstanding balance due on our premium finance agreements. The agreements have effective interest rates of 6.2% to 10.9%. The policies related to these premiums expire between July and October 2020. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | 6. RELATED PARTY TRANSACTIONS Effective December 1, 2016, the Company entered into a $250,000 Commercial Note Line of Credit (which we refer to as the “Line of Credit”) with a stockholder and officer of the Company to evidence prior indebtedness and provide for future borrowings. The advances are used to fund our operations. The Line of Credit accrues interest at 5% per annum and matures on March 31, 2021. At maturity, or in connection with a pre-payment, subject to the conditions set forth in the Line of Credit, the stockholder has the right to convert the amount outstanding (or the amount of the prepayment) into the Company’s Series A Preferred Stock at the par value of $1,000 per share. At March 31, 2020, the outstanding principal balance totaled $0. During the fiscal year ended June 30, 2019, certain members of the board of directors and stockholders of the Company made $242,000 in interest free advances to the Company. The advances are convertible into shares of the Company’s common stock at rates ranging from $0.0024 to $0.0050 or 75,916,667 shares of common stock. During the quarter ended December 31, 2019, the Company received notice from the holders of $142,000 of these related parties of their intent to exercise their right to convert their advances into 55,916,667 shares of common stock. The conversion should be completed subsequent to the year ending June 30, 2020. Beginning in the quarter ended March 31, 2017, certain members of management agreed to forgo management fees in consideration of the operating cash flow needs of the Company. There is not a set timeline to reinstitute such management fees. As of March 31, 2020 and June 30, 2019, $50,000 in such fees remain unpaid and are recorded in accounts payable and accrued liabilities in the accompanying consolidated balance sheets. We entered into an office space lease in January 2020 with a company owned by a member of our Board of Directors. The lease is for a three-year term beginning April 1, 2020. The base annual rent is $25,830. In addition to the base rent, the Company will also pay a proportionate share of common area operating expenses. The Company has recorded operating right-of-use (ROU) assets and liabilities in the amount of $67,254 as of March 31, 2020 related to the lease. The ROU asset represents our right to use the asset for the lease term and the ROU liability represents our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized based on the present value of lease payments utilizing an interest rate based on a collateralized loan with the same term as the related lease. |
LONG-TERM DEBT, DEBENTURES AND
LONG-TERM DEBT, DEBENTURES AND LINES OF CREDIT | 9 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT, DEBENTURES AND LINES OF CREDIT | 7. LONG-TERM DEBT, DEBENTURES AND LINES OF CREDIT On November 12, 2015, we acquired certain commercial real estate from a related party that is an entity controlled by a stockholder and officer of the Company for $480,000 consisting of $75,000 of land costs and $405,000 of buildings and improvements. The purchase price was paid through the assumption by the Company of $265,000 of long-term bank indebtedness (which we refer to below as “Note”) plus the issuance of 215 shares of the Company’s newly designated Series A Preferred Stock. The purchase price also included the cost of specific security improvements requested by the lessee. The Note is dated November 13, 2015 and has a principal amount of $265,000. Monthly payments under the Note are $1,962 including interest accruing at a rate of 5.95% per annum. The Note matures in June 2021 and is secured by the commercial real estate, guarantees by the Company and its real estate subsidiary and the personal guarantee of a stockholder who is also an officer of the Company. In March 2016, we authorized the issuance of up to $1 million in principal amount of convertible promissory notes (which we refer to as the “Fixed Rate Convertible Notes”). The Fixed Rate Convertible Notes are secured by certain Company real estate holdings. The 2016 Fixed Rate Convertible Notes mature on March 15, 2021, the fifth anniversary of the date of issuance and are convertible into shares of our common stock at a price of $0.015 per share. Interest accrues at a rate of 5% per annum and is payable semi-annually. The Company has the option to issue a notice of its intent to redeem, for cash, an amount equal to the sum of (a) 120% of the then outstanding principal balance, (b) accrued but unpaid interest and (c) all liquidated damages and other amounts due in respect of the Fixed Rate Convertible Notes. The Company may only issue the notice of its intent to redeem the Fixed Rate Convertible Notes if the trading average of the Company’s common stock equals or exceeds 300% of the conversion price during each of the five business days immediately preceding the date of the notice of intent to redeem. Holders of Fixed Rate Convertible Notes have the right to convert all or any portion of the Fixed Rate Convertible Notes at the conversion price at any time prior to redemption. During the year ended June 30, 2019, concurrent with the execution of the Exchange Agreement more fully described in Note 9, holders of $515,247 aggregate principal amount of the Company’s 5% convertible promissory notes (“Notes”), including accrued interest, converted their Notes into 103,132,226 shares of Common Stock. During the nine month period ended March 31, 2020, $17,480 of Notes were converted by the holders into 1,165,314 shares of Common Stock. At March 31, 2020, there was one remaining 2016 Fixed Rate Convertible Note outstanding with principal and accrued interest of $61,037. This one remaining 2016 Fixed Rate Convertible Note (plus accrued interest) is convertible into our common stock at a conversion rate of $0.015 per share or 4,069,118 shares. During the nine month period ended March 31, 2020 and 2019, we paid-in-kind approximately $2,000 and $23,000, respectively, of interest on these convertible notes. In August 2019, we authorized the issuance of up to $1.25 million in principal amount of new convertible promissory notes (which we refer to as the “2019 Fixed Rate Convertible Notes”). The 2019 Fixed Rate Convertible Notes are secured by certain Company real estate holdings. As of March 31, 2020, $832,000 of 2019 Fixed Rate Convertible Notes were outstanding. The 2019 Fixed Rate Convertible Notes mature on the fifth anniversary of the date of issuance and are convertible into shares of our common stock at a price of $0.015 per share and include 25% warrant coverage at $0.01 per share (which we refer to as the “2019 Warrants”). Interest accrues at a rate of 7% per annum and is payable semi-annually. The Company has the option to issue a notice of its intent to redeem, for cash, an amount equal to the sum of (a) 120% of the then outstanding principal balance, (b) accrued but unpaid interest and (c) all liquidated damages and other amounts due in respect of the 2019 Fixed Rate Convertible Notes. The Company may only issue the notice of its intent to redeem the 2019 Fixed Rate Convertible Notes if the trading average of the Company’s common stock equals or exceeds 300% of the conversion price during each of the five business days immediately preceding the date of the notice of intent to redeem. The holder of the 2019 Fixed Rate Convertible Notes has the right to convert all or any portion of the 2019 Fixed Rate Convertible Notes at the conversion price at any time prior to redemption. As of June 30, 2019, we had $256,500 of previously issued variable rate convertible notes outstanding (“Variable Rate Convertible Notes”). During the nine months ended March 31, 2020, we also issued $1,078,862 of convertible notes to third parties with variable conversion rates (“2019 Variable Rate Convertible Notes”). The 2019 Variable Rate Convertible Notes mature at various dates between September 2020 and June 2021. We received approximately, net of financing costs incurred, $960,000 in cash from the issuance of these notes. These 2019 Variable Rate Convertible Notes have interest accruing at rates ranging between 10% - 12%. These notes issued to third parties have a variable conversion rate based on the price of the Company’s common stock. None of the 2019 Variable Rate Convertible Notes have been converted into shares of common stock. During the nine months ended March 31, 2020, we repaid $458,375 of Variable Rate Convertible Notes and 2019 Variable Rate Convertible Notes. Upon the retirement of these notes, the Company may also have to pay a prepayment amount in excess of the outstanding balance of principal and accrued interest. Such prepayment amounts totaled $129,338 for the nine months ended March 31, 2020 and have been recorded as a loss on extinguishment of debt in the accompanying consolidated statements of operations. $56,775 of these payments occurred during the six months ended December 31, 2019 and was previously recorded as interest expense; such amounts were reclassified to loss on extinguishment of debt in the quarter ended March 31, 2020. In the quarter ended September 30, 2019, we recognized a gain of $44,527 on the extinguishment of certain fixed rate convertible notes. At March 31, 2020, $835,737 of the 2019 Variable Rate Convertible Notes were convertible into common stock beginning in the quarter ending June 30, 2020. Subsequent to March 31, 2020, we repaid outstanding principal amount of $335,000, plus accrued interest and prepayment penalties, under these 2019 Variable Rate Convertible Notes. Certain of the 2019 Variable Rate Convertible Notes have maturity dates prior to March 31, 2021 and could be classified as a current liability. However, it is the Company’s expectation that we will either re-finance these convertible notes to longer terms, pay off such amounts with the proceeds of long-term financing, or permit a limited amount of conversions. Therefore, we have classified these notes as noncurrent. If we do not re-finance these convertible notes to longer terms, however, the holders of the convertible notes have the option to convert these notes into equity or hold the convertible notes to maturity. During the year ended June 30, 2019, we issued $29,250 of convertible notes to our majority stockholder in exchange for 7,450,000 shares of our common stock. In February 2018, we obtained a $100,000 line of credit from a bank. The line of credit was collateralized by a $100,000 certificate of deposit at the bank. The interest rate on the line of credit was 7.0% per annum. During the quarter ended March 31, 2020, proceeds from the certificate of deposit were used to repay the outstanding balance under the line of credit plus accrued interest. On March 12, 2019, we obtained a $180,000 real estate loan from a financial institution. The note matured on April 1, 2020 and was extended to August 1, 2020. This real estate note is secured by certain real estate property and the personal guarantee of an officer and director of the Company. Interest only is payable monthly and accrues at an interest rate of 12%. Beginning in the quarter ended June 30, 2019, we entered into a series of credit financing arrangements from financing institutions by pledging future accounts receivable. The proceeds from these credit agreements were used to pay the initial amount due under the Schreiber settlement agreement. As of June 30, 2019, we had drawn approximately $153,000 under these agreements. During the nine month period ended March 31, 2020, additional draws of approximately $116,000 occurred and payments of approximately $76,000 were made. As of March 31, 2020, approximately $174,000 remained outstanding on these loans. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 8. COMMITMENTS AND CONTINGENCIES Schreiber Litigation On January 31, 2017, the Company and Beechwood Properties, LLC (“Beechwood”) filed suit against Daniel J. Schreiber (“Mr. Schreiber”) and the Daniel J. Schreiber Living Trust – Dtd 2/08/95 (“Schreiber Trust”) in the United States District Court for the Eastern District of Louisiana (the “Louisiana Court”) under Civil Action No. 2:2017cv819-B(3) (the “Louisiana Lawsuit”). Mr. Schreiber and the Schreiber Trust answered the Louisiana Lawsuit and counter-claimed against the Company and Beechwood and made additional claims against Mr. G. Darcy Klug (“Mr. Klug”) in the Louisiana Lawsuit. Mr. Klug is an officer and director of RedHawk and is sole owner of Beechwood. Mr. Klug also holds voting control of RedHawk. On April 24, 2017, Mr. Schreiber and the Schreiber Trust also filed suit against the Company, Mr. Klug and six (6) other defendants in the United States District Court for the Southern District of California under Civil Action No. 3:17-cv-00824-WQH-BLM which case was dismissed without prejudice on September 26, 2017 (the “California Lawsuit” and along with the Louisiana Lawsuit, the “Litigations”). On March 22, 2019, the parties to the Litigations have entered into a Settlement Agreement and General Release (“Settlement Agreement”) to resolve all issues arising out of the subject matter of the Litigation. In consideration of the mutual promises, covenants and conditions contained in the Settlement Agreement, the parties to the Litigation agreed that (i) Mr. Schreiber and the Schreiber Trust shall transfer all Company stock they presently own (52,377,108 common shares) to the Company and (ii) the Company shall (a) make to Mr. Schreiber and the Schreiber Trust a cash payment of Two Hundred Fifty Thousand and 00/100 Dollars (US$250,000.00) and (b) issue two Promissory Notes, each in the principal amount of Two Hundred Thousand and 00/100 Dollars (US$200,000.00), one of which shall be due and payable on or before September 6, 2020 and the other shall be due and payable on or before September 5, 2021. As a result of this Settlement Agreement, we have recorded a loss of $471,880 in the year ended June 30, 2019. Each Promissory Note shall be non-interest bearing, however each (i) shall bear a $15,000 late penalty if the principal amount is not repaid by the due date and (ii) shall bear interest at a rate of 18% per annum, from the issue date, if the principal is not repaid by the 30th date after the due date. Pursuant to a Security Agreement between the parties, Mr. Klug and Beechwood secured the Company’s obligations to the Schreiber Trust under the Settlement Agreement by granting first-priority security interests in (i) 1,000 shares of Mr. Klug’s Series B Preferred Company Stock; and 1,473 shares of Mr. Klug’s Series A Preferred Company Stock, and (ii) Beechwood’s interest in the Tower Hotels Fund 2014, LLC. On October 11, 2019, Mr. Schreiber and the Schreiber Trust filed a Motion to Enforce Settlement Agreement (the “Motion”) with the Louisiana Court alleging that the Company has failed to comply with its obligations under the Settlement Agreement by selling stock for cash subsequent to the parties entering into the Settlement Agreement. The Motion seeks to accelerate the amounts owed to Mr. Schreiber and the Schreiber Trust under the Settlement Agreement as well as attorneys’ fees. The Company believes the Motion is without merit and intends to vigorously defend against the Motion. Consultant Agreement On July 19, 2019 (the “Effective Date”), RedHawk Holdings Corp. (the “Company”) and its wholly-owned subsidiary, RedHawk Medical Products & Services, along with other affiliated entities, entered into a Consultant Agreement (“Agreement”) with Drew Pinsky, Inc (“DPI”) f/s/o Dr. Drew Pinsky (“Consultant”), for Consultant to be the exclusive spokesperson for the Company’s Sharps Needle and Destruction Device (“ SAN SAN Under the Agreement, the Company will pay DPI a royalty equal to 3% of the “Net Sales”, as defined in the Agreement, of the Products but in no event will the royalty be less than $3.50 per SAN SAN Pursuant to the Agreement, the Company agreed to issue to the Consultant 68,700,000 shares of the Company’s common stock, which is equal to approximately 5% of the Company’s outstanding common stock on a fully diluted basis as of the Effective Date. Further, the Company has agreed to issue to the Consultant, one year after the Effective Date, an additional 68,700,000 shares of the Company’s common stock, unless DPI has provided the Company with written notice of its intention not to extend the Initial Period. As of the date of this Quarterly Report on Form 10-Q, the Company has not yet issued any of the shares pursuant to the Agreement. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 9 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | 9. STOCKHOLDERS’ EQUITY On August 20, 2018, by a vote of the majority of our stockholders, we increased the number of our authorized common shares from 1,000,000,000 to 2,000,000,000. Preferred Stock Pursuant to a certificate of designation filed with the Secretary of State of the State of Nevada, effective November 12, 2015, 2,750 shares of our authorized Preferred Stock have been designated as Series A 5% Convertible Preferred Stock, originally with a $1,000 stated value (which we refer to as “Series A Preferred Stock”). The holders of the Series A Preferred Stock are entitled to receive cumulative dividends at a rate of 5% per annum, payable quarterly in cash, or at the Company’s option, such dividends shall be accreted to, and increase, the stated value of the issued Series A Preferred Stock (which we refer to as “PIK”). Holders of the Series A Preferred Stock are entitled to votes on all matters submitted to stockholders at a rate of ten votes for each share of common stock into which the Series A Preferred Stock may be converted. After six months from issuance, each share of Series A Preferred Stock is convertible, at the option of the holder, into the number of shares of common stock equal to the quotient of the stated value, as adjusted for PIK dividends, by $0.015, as adjusted for stock splits and dividends. Pursuant to a certificate of designation filed with the Secretary of State of the State of Nevada, effective February 16, 2016, 1,250 shares of our authorized Preferred Stock have been designated as Series B 5% Convertible Preferred Stock, originally with a $1,000 stated value (which we refer to as “Series B Preferred Stock”). The holders of the Series B Preferred Stock are entitled to receive cumulative dividends at a rate of 5% per annum, payable quarterly in cash, or at the Company’s option, such dividends shall be accreted to, and increase, the stated value of the issued Series B Preferred Stock (which we refer to as “PIK”). Holders of the Series B Preferred Stock are entitled to votes on all matters submitted to stockholders at a rate of ten votes for each share of common stock into which the Series B Preferred Stock may be converted. After six months from issuance, each share of Series B Preferred Stock is convertible, at the option of the holder, into the number of shares of common stock equal to the quotient of the stated value, as adjusted for PIK dividends, by $0.01, as adjusted for stock splits and dividends. During the nine months ended March 31, 2020 and 2019, we paid-in-kind $114,859 and $116,466, respectively, of related preferred stock dividends. Exchange Agreement On June 20, 2019, RedHawk Holdings Corp. entered into a Stock Exchange Agreement (“Exchange Agreement”) with Beechwood. G. Darcy Klug, the Company’s Chairman of the Board, Interim Chief Executive Officer and Chief Financial Officer, is the sole member and manager of Beechwood. Under the Exchange Agreement, the Company purchased from Beechwood 113,700,000 shares of the Company’s common stock, $0.001 par value per share (“Common Stock”), in exchange for 1,277 shares of the Company’s 5% Series A Preferred Stock and a Stock Purchase Warrant (“Warrant”) to acquire 113,508,450 shares of Common Stock at an exercise price of $0.005 per share (collectively, the “Transactions”). The Warrant expires June 20, 2029. Concurrent with the execution of the Exchange Agreement, holders of $580,108 aggregate principal amount of the Company’s 5% convertible promissory notes (“Notes”), including accrued interest, were offered and converted their Notes into 116,021,700 shares of Common Stock at a conversion price of $0.005 per share. The extinguishment of the notes and the related accrued interest for the shares of common stock resulted in a gain on extinguishment of approximately $419,000 based on the closing price of the common stock as of the exchange date. Holders of the Series A Preferred Stock are entitled to receive cumulative dividends at a rate of 5% per annum, payable quarterly in cash, or at the Company’s option, such dividends shall be accreted to, and increase, the stated value of the issued Series A Preferred Stock (“PIK dividends”). Holders of the Series A Preferred Stock are entitled to votes on all matters submitted to stockholders at a rate of ten votes for each share of common stock into which the Series A Preferred Stock may be converted. After six months from issuance, each share of Series A Preferred Stock is convertible, at the option of the holder, into the number of shares of Common Stock equal to the quotient of the stated value, as adjusted for PIK dividends, by $0.015, as adjusted for stock splits and dividends. Warrants In conjunction with the Exchange Agreement, Beechwood was issued 113,508,450 warrants to purchase the Company’s common stock at a price of $0.005 per share. The warrants expire in June 2029 and are assignable. In conjunction with the 2019 Fixed Rate Convertible Notes, the holders of the 2019 Fixed Rate Convertible Notes were issued 20,800,000 warrants to purchase the Company’s common stock at a price of $0.01 per share. The warrants expire ten years from the date of issuance. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 10. INCOME TAXES The Company has not filed its tax returns for the years ended June 30, 2019 and 2018. As of June 30, 2019, the Company had approximately $5 million of U.S. net operating losses (NOLs) carried forward to offset taxable income in future years. Approximately $4 million of this NOL will expire commencing in fiscal 2026 and run through 2038. The NOLs of approximately $1 million from the year ended June 30, 2019 has an indefinite carryforward period. As a result of the numerous common stock transactions that have occurred, the amount of these NOLs which is actually available to offset future income may be severely limited due to change-in-control tax provisions. The Company has not estimated the effect of such change-in-control limitation. The related deferred income tax asset of these NOLs, without consideration of any change-of-control limitation, was estimated to be approximately $750,000 as of June 30, 2019. As a result of the enactment of the Tax Cuts and Jobs Act (The Act) in December 31, 2017, the estimated deferred income tax asset related to U.S. NOL carry forwards is based on the reduced 21% corporate income tax rate. Due to our history of operating losses and the uncertainty surrounding the realization of the deferred tax assets in future years, our management has determined that it is more likely than not that the deferred tax assets will not be realized in future periods. Accordingly, the Company has recorded a 100% valuation allowance against its net deferred tax assets. Thus, there is no net tax asset recorded as of March 31, 2020 or June 30, 2019. Similarly, there is no income tax benefit recorded on the net loss of the Company for the periods ended March 31, 2020 and 2019. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 9 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | 11. SEGMENT INFORMATION SFAS No. 131, “Disclosures About Segments of an Enterprise and Related Information,” MEDICAL Nine months ended LAND & DEVICE & OTHER March 31, 2020 HOSPITALITY PHARMA SERVICES CORPORATE TOTAL Operating revenues $ 41,452 $ 176,537 $ — $ — $ 217,989 Operating loss $ (15,145 ) $ (248,760 ) $ (160 ) $ (554,246 ) $ (818,311 ) Interest expense $ 35,452 $ 627 $ — $ 243,159 $ 279,238 Depreciation and amortization $ 23,500 $ 39,875 $ — $ — $ 63,375 Identifiable assets $ 903,403 $ 607,928 $ 77,814 $ 1,090,906 $ 2,680,051 MEDICAL Nine months ended LAND & DEVICE & OTHER March 31, 2019 HOSPITALITY PHARMA SERVICES CORPORATE TOTAL Operating revenues $ 34,759 $ 134,317 $ — $ — $ 169,076 Operating income (loss) $ (11,097 ) $ (100,660 ) $ (201 ) $ (343,073 ) $ (455,031 ) Interest expense $ 12,526 $ 10 $ — $ 143,178 $ 155,714 Depreciation and amortization $ 23,500 $ 56,859 $ — $ — $ 80,359 Identifiable assets $ 937,294 $ 693,185 $ — $ 630,977 $ 2,261,456 MEDICAL Three months ended LAND & DEVICE & OTHER March 31, 2020 HOSPITALITY PHARMA SERVICES CORPORATE TOTAL Operating revenues $ 14,849 $ 133,825 $ — $ — $ 148,674 Operating income (loss) $ 831 $ (51,151 ) $ (85 ) $ (164,041 ) $ (214,446 ) Interest expense $ 8,883 $ 310 $ — $ 58,530 $ 67,723 Depreciation and amortization $ 7,833 $ 13,625 $ — $ — $ 21,458 MEDICAL Three months ended LAND & DEVICE & OTHER March 31, 2019 HOSPITALITY PHARMA SERVICES CORPORATE TOTAL Operating revenues $ 10,250 $ 63,306 $ — $ — $ 73,556 Operating income (loss) $ (8,894) $ (15,899 ) $ — $ (109,410 ) $ (134,203 ) Interest expense (income) $ 4,789 $ 10 $ — $ (20,705 ) $ (25,504 ) Depreciation and amortization $ 7,833 $ 11,375 $ — $ — $ 19,208 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 12. SUBSEQUENT EVENTS The Company evaluated events occurring after March 31, 2020, and through the date the consolidated financial statements were issued, June 29, 2020 and concluded there were no events or transactions that would require recognition or disclosure in these financial statements, except for the following: ● In December 2019, a novel strain of coronavirus was reported to have surfaced in Wuhan, China, which has and is continuing to spread throughout the world, including the United States. On March 11, 2020 the World Health Organization characterized the spread of the coronavirus disease (“COVID-19”) as a “pandemic”. The significant reach of COVID-19 has resulted in a widespread public health issue that has and will likely continue to affect the economies worldwide, and could adversely affect our business, results of operations and financial condition, including a decrease in demand for our medical devices. Specifically, demand for our newly released SAN ● Subsequent to March 31, 2020, we repaid in full two 2019 Variable Rate Convertible Notes in the principal amount of $335,000 plus accrued interest. There was a prepayment penalty paid with the repayment in the amount of approximately $19,500. Also, as a result of the full payment, 20,434,782 shares of common stock previously issued as collateral for this note were returned to the Company. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The unaudited interim condensed financial statements of the Company as of March 31, 2020 and for the three and nine month periods ended March 31, 2020 and 2019 included herein have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). The year-end condensed balance sheet dated as of June 30, 2019 is audited and is presented here as a basis for comparison. Although the financial statements and related information included herein have been prepared without audit, and certain information and disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, the Company believes that the note disclosures are adequate to make the information presented not misleading. These unaudited condensed financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K as of and for the year ended June 30, 2019. In the opinion of our management, the unaudited interim financial statements included herein reflect all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of the Company’s financial position, results of operations, and cash flows for the periods presented. The results of operations for interim periods are not necessarily indicative of the results expected for the full year or any future period. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company and its subsidiaries in which we have a greater than 50% ownership. All material intercompany accounts have been eliminated upon consolidation. Equity investments, which we have an ownership greater than 20% but less than 50% through which we exercise significant influence over but do not control the investee and we are not the primary beneficiary of the investee’s activities, are accounted for using the equity method of accounting. Equity investments, which we have an ownership less than 20%, are recorded at cost. |
Use of Estimates | Use of Estimates The financial statements and related notes are prepared in conformity with GAAP which requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to valuation and impairment of investments, intangible assets, and long-lived assets, and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. |
Revenue Recognition | Revenue Recognition In May 2014, the Financial Accounting Standards Board (which we refer to as the “FASB”) issued ASU 2014-19, Revenue from Contracts with Customers (ASU 2014-19). ASU 2014-19 established a single revenue recognition model for all contracts with customers, eliminates industry specific requirements and expands disclosure requirements. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this core principle, an entity should apply the following five steps: (1) identify contracts with customers, (2) identify the performance obligations in the contracts, (3) determine the transaction price, (4) allocate the transaction price to the performance obligation in the contract, and (5) recognize revenue as the entity satisfies performance obligations. Effective July 1, 2018, we adopted ASU 2014-19 using the modified retrospective method. The adoption of ASU 2014-19 did not have an impact on our consolidated financial statements but required enhanced footnote disclosures. See Note 3, Revenue Recognition, for additional information. We derive revenue from several types of activities – medical device sales, branded generic pharmaceutical sales, commercial real estate leasing and financial services. Our medical device sales include the marketing and distribution of certain professional and consumer grade digital non-contact thermometers, needle destruction unit and advanced bleeding control, non-compression hemostasis. Through our United Kingdom based subsidiary, we manufacture, and market, branded generic pharmaceuticals, and certain other generic pharmaceuticals known as “specials”. Our real estate leasing revenues are from certain commercial properties under lease. The financial service revenue is from brokerage services. The Company offers customer discounts in certain cases. Such discounts are estimated at time of product sale and revenues are reduced for such discounts at the time of the sale. Shipping and handling costs are included in revenue and costs of goods sold. |
Cash and Cash Equivalents | Cash and Cash Equivalents We consider highly liquid investments with an original maturity of 90 days or less to be cash equivalents. The Company did not have any cash equivalents as of March 31, 2020 or June 30, 2019. |
Accounts Receivable | Accounts Receivable Accounts receivables are amounts due from customers of our pharmaceutical, medical device and financial services divisions. We do not require collateral from our customers. The amount is reported at the billed amount, net of any expected allowance for bad debts. There was no allowance for doubtful accounts as of March 31, 2020 or June 30, 2019. |
Inventory | Inventory Inventory consist of purchased thermometers, an advanced bleeding control, non-compression hemostasis, a patented antimicrobial ionic silver calcium catheter dressing, needle destruction devices and certain branded generic pharmaceuticals held for resale. All inventories are stated at the lower of cost or net realizable value utilizing the first-in, first-out method. |
Property and Improvements | Property and Improvements Property and improvements are stated at cost. We provide for depreciation expense on a straight-line basis over each asset’s useful life depreciated to their estimated salvage value. Buildings are depreciated over a useful life of 20 to 30 years. Building improvements are depreciated over a useful life of 5 to 10 years. Tooling and equipment are depreciated over a useful life of ten years. Our Louisiana real estate holdings include our former corporate headquarters on Chemin Metairie Road in Youngsville, Louisiana and a property on Jefferson Street in Lafayette, Louisiana. As of March 31, 2020, we are leasing both properties to third parties. The Company is also currently using a portion of the Chemin Metairie Road property for equipment storage for our real estate management unit. Effective August 1, 2017, the tenant that leases the Jefferson Street property renewed that lease through December 31, 2022 at a rent of $3,250 per month. Beginning December 1, 2019, the Chemin Metairie is leased through December 31, 2020 at a rental rate of $1,700 per month. |
Income Taxes | Income Taxes Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. The Company follows Accounting Standard Codification (which we refer to as “ASC”) 740, Income Taxes, |
Basic and Diluted Net Loss Per Share | Basic and Diluted Net Loss Per Share The Company computes net loss per share in accordance with ASC 260, Earnings Per Share, At March 31, 2020, including accrued but unpaid interest, there was one remaining 2016 Fixed Rate Convertible Note outstanding which totaling $61,037 and is convertible into 4,069,118 shares of common stock upon conversion of the remaining 2016 Fixed Rate Convertible Note. During the nine months ended March 31, 2020, we issued in private offerings exempt from registration debt securities in the form of new 2019 Variable Rate Convertible Notes (See Note 7) in the amount of $1,078,862. The proceeds were used for working capital. The 2019 Variable Rate Convertible Notes are convertible into shares of common stock at a variable conversion rate. During the nine months ended March 31, 2020, we issued in private offerings exempt from registration debt securities in the form of new 2019 Fixed Rate Convertible Notes (See Note 7) in the amount of $832,000. With the proceeds we paid off certain variable rate convertible notes outstanding in the amount of approximately $458,000, plus accrued interest. The 2019 Fixed Rate Convertible Notes mature on the fifth anniversary of the date of issuance and are convertible into shares of our common stock at a price of $0.015 per share and include 25% warrant coverage at $0.01 per share (which we refer to as the “2019 Warrants”). At March 31, 2020, including accrued but unpaid dividends, there were potentially 205,846,071 shares of common stock issuable upon the conversion of our outstanding Series A Preferred Stock and, including accrued but unpaid dividends, there were potentially 122,796,364 shares of common stock issuable upon the conversion of our outstanding Series B Preferred Stock. The shares of common stock to be issued upon conversion of the warrants and the shares issuable from the conversion of the notes and the Series A and Series B Preferred stock have been excluded from earnings per share calculations because these shares are anti-dilutive. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) ASC 220, Comprehensive Income |
Financial Instruments | Financial Instruments Pursuant to ASC 820, Fair Value Measurements and Disclosures Level 1. Level 2. Level 3. The Company’s financial instruments consist principally of cash, accounts receivable, accounts payable and accrued liabilities, debt, and amounts due to related parties. We believe that the recorded values of all of our other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations. |
Leases | Leases In February 2016, the FASB issued ASU 2016-02, Leases |
Reclassification | Reclassification Certain amounts in prior periods have been reclassified to conform to the current period presentation. |
REVENUE FROM CONTRACTS WITH C_2
REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables) | 9 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of disaggregation of revenue | For the three and nine month periods ended March 31, 2020 and 2019, a summary of our revenue on a disaggregated basis is as follows: Three Months Ended Nine Months Ended March 31, March 31, 2020 2019 2020 2019 Sales of pharmaceuticals $ — $ 1,457 $ — $ 71,792 Sales of medical devices 133,824 61,849 176,537 62,525 Rental revenue from operating lease payments 14,850 10,250 41,452 34,759 $ 148,674 $ 73,556 $ 217,989 $ 169,076 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 9 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Schedule of segment activity | The following table reflects our segments as of March 31, 2020 and 2019 and for the nine months and three months then ended. MEDICAL Nine months ended LAND & DEVICE & OTHER March 31, 2020 HOSPITALITY PHARMA SERVICES CORPORATE TOTAL Operating revenues $ 41,452 $ 176,537 $ — $ — $ 217,989 Operating loss $ (15,145 ) $ (248,760 ) $ (160 ) $ (554,246 ) $ (818,311 ) Interest expense $ 35,452 $ 627 $ — $ 243,159 $ 279,238 Depreciation and amortization $ 23,500 $ 39,875 $ — $ — $ 63,375 Identifiable assets $ 903,403 $ 607,928 $ 77,814 $ 1,090,906 $ 2,680,051 MEDICAL Nine months ended LAND & DEVICE & OTHER March 31, 2019 HOSPITALITY PHARMA SERVICES CORPORATE TOTAL Operating revenues $ 34,759 $ 134,317 $ — $ — $ 169,076 Operating income (loss) $ (11,097 ) $ (100,660 ) $ (201 ) $ (343,073 ) $ (455,031 ) Interest expense $ 12,526 $ 10 $ — $ 143,178 $ 155,714 Depreciation and amortization $ 23,500 $ 56,859 $ — $ — $ 80,359 Identifiable assets $ 937,294 $ 693,185 $ — $ 630,977 $ 2,261,456 MEDICAL Three months ended LAND & DEVICE & OTHER March 31, 2020 HOSPITALITY PHARMA SERVICES CORPORATE TOTAL Operating revenues $ 14,849 $ 133,825 $ — $ — $ 148,674 Operating income (loss) $ 831 $ (51,151 ) $ (85 ) $ (164,041 ) $ (214,446 ) Interest expense $ 8,883 $ 310 $ — $ 58,530 $ 67,723 Depreciation and amortization $ 7,833 $ 13,625 $ — $ — $ 21,458 MEDICAL Three months ended LAND & DEVICE & OTHER March 31, 2019 HOSPITALITY PHARMA SERVICES CORPORATE TOTAL Operating revenues $ 10,250 $ 63,306 $ — $ — $ 73,556 Operating income (loss) $ (8,894) $ (15,899 ) $ — $ (109,410 ) $ (134,203 ) Interest expense (income) $ 4,789 $ 10 $ — $ (20,705 ) $ (25,504 ) Depreciation and amortization $ 7,833 $ 11,375 $ — $ — $ 19,208 |
NATURE OF OPERATIONS AND CONT_2
NATURE OF OPERATIONS AND CONTINUANCE OF BUSINESS (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||
Revenues | $ 148,674 | $ 73,556 | $ 217,989 | $ 169,076 | ||
Consolidated net loss | 439,259 | 98,699 | 1,210,112 | 997,245 | ||
Net cash used in operating activities | 1,205,950 | 520,292 | ||||
Cash | 99,246 | $ 30,877 | 99,246 | $ 30,877 | $ 1,648 | $ 19,034 |
Working capital | 991,397 | 991,397 | ||||
Accumulated deficit | $ (7,052,616) | $ (7,052,616) | $ (5,674,436) |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | Jun. 30, 2019 | |
Warrant outstanding | 113,508,450 | |||
Exercise price of warrants (in dollars per share) | $ 0.005 | |||
Aggregate principal amount | $ 335,000 | |||
Converted instrument amount | $ 138,883 | $ 72,791 | $ 271,115 | |
Common Stock par value (in dollars per shares) | $ 0.001 | $ 0.001 | ||
2016 Fixed Rate Convertible Notes [Member] | ||||
Convertible notes, amount | $ 61,037 | |||
Number of conversion shares issued (in shares) | 4,069,118 | |||
Accrued but unpaid interest | $ 0 | |||
2016 Fixed Rate Convertible Notes [Member] | Warrant [Member] | ||||
Equity method ownership percentage | 25.00% | |||
Warrant outstanding | 0.01 | |||
2019 Fixed Rate Convertible Notes [Member] | ||||
Aggregate principal amount | $ 832,000 | |||
Fixed rate convertible outstanding | $ 458,000 | |||
Common Stock par value (in dollars per shares) | $ 0.015 | |||
Variable Rate Convertible Notes [Member] | ||||
Repayment of debt | $ 0 | |||
New 2019 Variable Rate Convertible Notes [Member] | ||||
Convertible notes, amount | 1,078,862 | |||
Aggregate principal amount | $ 0 | |||
Minimum [Member] | ||||
Equity method ownership percentage | 20.00% | |||
Maximum [Member] | ||||
Equity method ownership percentage | 50.00% | |||
Building [Member] | Minimum [Member] | ||||
Useful life | 20 years | |||
Building [Member] | Maximum [Member] | ||||
Useful life | 30 years | |||
Building Improvements [Member] | Minimum [Member] | ||||
Useful life | 5 years | |||
Building Improvements [Member] | Maximum [Member] | ||||
Useful life | 10 years | |||
Tooling And Equipment [Member] | ||||
Useful life | 10 years | |||
Jefferson Street Property [Member ] | ||||
Rental rate per month | $ 3,250 | |||
Renewed lease term | Dec. 31, 2022 | |||
Chemin Metairie Road [Member] | ||||
Rental rate per month | $ 1,700 | |||
Renewed lease term | Dec. 31, 2020 | |||
SERIES A PREFERRED STOCK [Member] | ||||
Incremental common shares issuable upon conversion of preferred stock | 0 | |||
SERIES B PREFERRED STOCK [Member] | ||||
Incremental common shares issuable upon conversion of preferred stock | 0 | |||
Number of conversion shares issued (in shares) | (250) | |||
Converted instrument amount | $ (299,696) | |||
5% Series A Preferred Stock [Member] | ||||
Accrued but unpaid interest | 205,846,071 | |||
5% Series B Preferred Stock [Member] | ||||
Accrued but unpaid interest | $ 122,796,364 |
REVENUE FROM CONTRACTS WITH C_3
REVENUE FROM CONTRACTS WITH CUSTOMERS (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Disaggregation of revenue | $ 148,674 | $ 73,556 | $ 217,989 | $ 169,076 |
Sales Of Pharmaceuticals [Member] | ||||
Disaggregation of revenue | 1,457 | 71,792 | ||
Sales Of Medical Devices [Member] | ||||
Disaggregation of revenue | 133,824 | 61,849 | 176,537 | 62,525 |
Rental Revenue From Operating Lease Payments [Member] | ||||
Disaggregation of revenue | $ 14,850 | $ 10,250 | $ 41,452 | $ 34,759 |
REVENUE FROM CONTRACTS WITH C_4
REVENUE FROM CONTRACTS WITH CUSTOMERS (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | Jun. 30, 2019 | |
Date of sale | 90 days | ||||
Transaction prices | $ 52,859 | $ 39,995 | $ 95,508 | $ 95,508 | |
Deferred revenue | 267,145 | 267,145 | |||
Revenues | 148,674 | 73,556 | 217,989 | 169,076 | |
Shipping and Handling [Member] | |||||
Cost of revenue | 805 | $ 1,305 | |||
Minimum Purchase [Member] | |||||
Revenues | $ 87,500 |
OTHER ASSETS (Details Narrative
OTHER ASSETS (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | Jun. 30, 2019 | |
Intangible assets related to licenses | $ 816,713 | $ 816,713 | $ 848,992 | |||
Net of accumulated amortization | 444,820 | 444,820 | $ 404,946 | |||
EcoGen [Member] | ||||||
Intangible assets related to licenses | 387,111 | 387,111 | ||||
Net of accumulated amortization | $ 304,471 | $ 304,471 | ||||
Intangible assets, useful life | 20 years | |||||
Chemin Metairie Road [Member] | ||||||
Distribution received from real estate partnership | $ 370,000 | |||||
License Agreement [Member] | ||||||
Payments to acquire license rights | $ 21,250 | |||||
Common Stock [Member] | ||||||
Number of shares issued | 500,000 | 19,400,000 | 49,934,782 | 484,000,004 | ||
Common Stock [Member] | Consulting Agreement [Member] | ||||||
Number of shares issued | 20,000,000 | |||||
Common Stock [Member] | Consulting Agreement [Member] | ||||||
Number of shares issued | 40,000,000 | |||||
September 2018 [Member] | Developed Technology Rights [Member] | ||||||
Payments to acquire license rights | 450,000 | |||||
Consulting fee | 1,000 | |||||
Broker's fee | 17,500 | |||||
September 2018 [Member] | License Agreement [Member] | ||||||
Payments to acquire license rights | $ 25,000 | |||||
Total number quarterly payments | Twenty | |||||
September 2018 [Member] | Common Stock [Member] | ||||||
Number of shares issued | 14,000,000 |
INSURANCE NOTE PAYABLE (Details
INSURANCE NOTE PAYABLE (Details Narrative) - USD ($) | 9 Months Ended | |
Mar. 31, 2020 | Jun. 30, 2019 | |
Insurance notes payable | $ 12,537 | $ 136,859 |
Description of the maturity date | July and October 2020 | |
Minimum [Member] | ||
Interest rates | 6.20% | |
Maximum [Member] | ||
Interest rates | 10.90% |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | Jan. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2020 | Jun. 30, 2019 | Dec. 01, 2016 |
Line of credit interest rate | 7.00% | ||||
Due to related party | $ 242,000 | $ 230,250 | |||
Operating right-of-use | $ 67,254 | ||||
Minimum [Member] | |||||
Conversion rate | $ 0.0024 | ||||
Maximum [Member] | |||||
Conversion rate | $ 0.0050 | ||||
Commercial Note Line of Credit [Member] | |||||
Due to related party | $ 0 | ||||
Related Party [Member] | |||||
Conversion of common stock issued | 55,916,667 | ||||
Advances from related parties | $ 142,000 | ||||
Line of Credit [Member] | Stockholder and Officer [Member] | |||||
Commercial note line of credit | $ 250,000 | ||||
Line of credit interest rate | 5.00% | ||||
Line of credit maturity date | Mar. 31, 2021 | ||||
Line of Credit [Member] | SERIES A PREFERRED STOCK [Member] | Stockholder and Officer [Member] | |||||
Preferred stock, stated value (in dollars per share) | $ 1,000 | ||||
Board Of Directors And Stockholders [Member] | |||||
Conversion of common stock issued | 75,916,667 | ||||
Office Space Lease [Member] | Board of Directors [Member] | |||||
Lease maturity terms | 3 years | ||||
Lease beginning date | Apr. 1, 2020 | ||||
Annual rent | $ 25,830 | ||||
Operating right-of-use | $ 67,254 |
LONG-TERM DEBT, DEBENTURES AN_2
LONG-TERM DEBT, DEBENTURES AND LINES OF CREDIT (Details Narrative) - USD ($) | Mar. 12, 2019 | Feb. 28, 2018 | Nov. 13, 2015 | Nov. 12, 2015 | Mar. 31, 2020 | Sep. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | Jun. 30, 2019 | Jan. 03, 2020 |
Convertible promissory note principal | $ 335,000 | $ 335,000 | ||||||||||
Description of maturity | July and October 2020 | |||||||||||
Net of financing costs | ||||||||||||
Interest paid in kind | 2,000 | $ 23,000 | ||||||||||
Line of credit outstanding | $ 100,000 | 173,661 | 173,661 | $ 253,219 | ||||||||
Line of credit, additional draws | 116,000 | |||||||||||
Line of credit, collateral value | $ 100,000 | $ 76,000 | ||||||||||
Line of credit interest rate | 7.00% | |||||||||||
Repayments of convertible debt | $ 458,375 | 132,726 | ||||||||||
Loss on extinguishment of debt | $ (129,338) | $ 44,527 | (84,811) | |||||||||
Debt prepaid amount | 129,338 | |||||||||||
Payments occurred | $ 56,775 | |||||||||||
Real Estate Loan [Member] | Financial Institution [Member] | ||||||||||||
Convertible promissory note principal | $ 180,000 | |||||||||||
Convertible promissory notes interest rate | 12.00% | |||||||||||
Debt maturity date | Apr. 1, 2020 | |||||||||||
Line of credit withdrawn | $ 153,000 | |||||||||||
Remaining outstanding amount on loans | $ 174,000 | |||||||||||
Minimum [Member] | ||||||||||||
Common stock conversion price | $ / shares | $ 0.0024 | $ 0.0024 | ||||||||||
Maximum [Member] | ||||||||||||
Common stock conversion price | $ / shares | $ 0.0050 | $ 0.0050 | ||||||||||
SERIES A PREFERRED STOCK [Member] | ||||||||||||
Number of share issued | 215 | |||||||||||
Land [Member] | ||||||||||||
Payment to acquired real estate from a related party | $ 75,000 | |||||||||||
Building and Improvements [Member] | ||||||||||||
Payment to acquired real estate from a related party | 405,000 | |||||||||||
Stockholder and Officer [Member] | ||||||||||||
Payment to acquired real estate from a related party | 480,000 | |||||||||||
Common Stock [Member] | ||||||||||||
Number of shares issued on conversion | 160,799,339 | 86,933,293 | 293,453,979 | |||||||||
Number of share issued | 500,000 | 19,400,000 | 49,934,782 | 484,000,004 | ||||||||
2019 Fixed Rate Convertible Notes [Member] | ||||||||||||
Frequency of periodic payment | Semi-annually | |||||||||||
Convertible promissory notes interest rate | 7.00% | 7.00% | ||||||||||
Common stock conversion price | $ / shares | $ 0.015 | $ 0.015 | ||||||||||
Description of call feature | The Company has the option to issue a notice of its intent to redeem, for cash, an amount equal to the sum of (a) 120% of the then outstanding principal balance, (b) accrued but unpaid interest and (c) all liquidated damages and other amounts due in respect of the Fixed Rate Convertible Notes #2. The Company may only issue the notice of its intent to redeem the Fixed Rate Convertible Notes $2 if the trading average of the Company’s common stock equals or exceeds 300% of the conversion price during each of the five business days immediately preceding the date of the notice of intent to redeem. The holder of the Fixed Rate Convertible Notes #2 has the right to convert all or any portion of the Fixed Rate Convertible Notes #2 at the conversion price at any time prior to redemption. | |||||||||||
Convertible notes outstanding | $ 832,000 | $ 832,000 | ||||||||||
Fixed Rate Convertible Notes [Member] | ||||||||||||
Convertible promissory note principal | $ 1,250,000 | $ 1,250,000 | ||||||||||
Convertible promissory notes interest rate | 5.00% | 5.00% | ||||||||||
Debt maturity date | Mar. 15, 2021 | |||||||||||
Common stock conversion price | $ / shares | $ 0.015 | $ 0.015 | ||||||||||
Description of call feature | The Company has the option to issue a notice of its intent to redeem, for cash, an amount equal to the sum of (a) 120% of the then outstanding principal balance, (b) accrued but unpaid interest and (c) all liquidated damages and other amounts due in respect of the Fixed Rate Convertible Notes. The Company may only issue the notice of its intent to redeem the Fixed Rate Convertible Notes if the trading average of the Company’s common stock equals or exceeds 300% of the conversion price during each of the five business days immediately preceding the date of the notice of intent to redeem. | |||||||||||
Convertible notes outstanding | $ 835,737 | $ 835,737 | ||||||||||
Number of converted shares | shares | ||||||||||||
Number of share issued | 4,069,118 | |||||||||||
Accrued interest | 61,037 | $ 61,037 | ||||||||||
Fixed Rate Convertible Notes [Member] | Common Stock [Member] | ||||||||||||
Convertible debt conversion value | $ 1,165,314 | |||||||||||
Number of shares issued on conversion | 17,480 | |||||||||||
Convertible Notes [Member] | ||||||||||||
Convertible promissory note principal | $ 265,000 | $ 265,000 | ||||||||||
Debt instrument, monthly payment | $ 1,962 | |||||||||||
Frequency of periodic payment | Monthly | |||||||||||
Convertible promissory notes interest rate | 5.95% | |||||||||||
Debt maturity date | Jun. 30, 2021 | |||||||||||
Description of collateral | Secured by the commercial real estate, guarantees by the Company and its real estate subsidiary and the personal guarantee of a stockholder who is also an officer of the Company. | |||||||||||
Convertible Notes [Member] | Majority Stockholder [Member] | ||||||||||||
Number of converted shares | shares | 7,450,000 | |||||||||||
Convertible debt conversion value | $ 29,250 | |||||||||||
Variable Rate Convertible Notes [Member] | ||||||||||||
Net of financing costs | $ 960,000 | $ 960,000 | ||||||||||
Variable Rate Convertible Notes [Member] | Minimum [Member] | ||||||||||||
Convertible promissory notes interest rate | 10.00% | 10.00% | ||||||||||
Variable Rate Convertible Notes [Member] | Maximum [Member] | ||||||||||||
Convertible promissory notes interest rate | 12.00% | 12.00% | ||||||||||
Variable Rate Convertible Notes [Member] | Third Parties [Member] | ||||||||||||
Description of maturity | September 2020 and June 2021 | |||||||||||
Net of financing costs | $ 1,078,862 | $ 1,078,862 | ||||||||||
Convertible Notes [Member] | ||||||||||||
Convertible promissory note principal | ||||||||||||
Description of maturity | December 31, 2020 | |||||||||||
5% Convertible Promissory Notes [Member] | ||||||||||||
Convertible promissory note principal | $ 580,108 | $ 580,108 | 515,247 | |||||||||
5% Convertible Promissory Notes [Member] | Common Stock [Member] | ||||||||||||
Number of shares issued on conversion | 116,021,700 | |||||||||||
Accrued interest | 103,132,226 | |||||||||||
Loss on extinguishment of debt | $ 419,000 | |||||||||||
Variable Rate Convertible Notes and 2019 Variable Rate Convertible Note [Member] | ||||||||||||
Repayments of convertible debt | 458,375 | |||||||||||
Loss on extinguishment of debt | ||||||||||||
Variable Rate Convertible Notes [Member] | ||||||||||||
Convertible notes outstanding | $ 256,500 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | Jul. 19, 2019 | Nov. 12, 2015 | Mar. 31, 2020 | Jun. 30, 2019 |
SERIES A PREFERRED STOCK [Member] | ||||
Number of shares issued | 215 | |||
Consultant Agreement [Member] | Drew Pinsky, Inc [Member] | ||||
Number of shares issued | 68,700,000 | |||
Percentage of royalty to net sale | 3.00% | |||
Agreement terms | The Company’s Sharps Needle and Destruction Device (“SANDD”) mini™, SANDD Pro™ and any related products and/or accessories (“Products”) for an initial period of two (2) years (“Initial Period”), under the terms and conditions described in the Agreement. At the end of the Initial Period, there shall be an automatic, immediately consecutive two (2) year extension period unless DPI, within 60 days of the expiration of the Initial Period, provides written notice of its intention not to extend the Agreement. | |||
Contractual obligation number of share issued | 68,700,000 | |||
Consultant Agreement [Member] | Drew Pinsky, Inc [Member] | SANDD mini TM [Member] | ||||
Royalty be less than unit sold | $ 3.50 | |||
Consultant Agreement [Member] | Drew Pinsky, Inc [Member] | SANDD Pro TM [Member] | ||||
Royalty be less than unit sold | $ 13.50 | |||
Settlement Agreement [Member] | ||||
Principal amount | $ 15,000 | |||
Settlement agreement terms | (i) Mr. Schreiber and the Schreiber Trust shall transfer all RedHawk stock they presently own (52,377,108 common shares) to RedHawk and (ii) Redhawk shall (a) make to Mr. Schreiber and the Schreiber Trust a cash payment of Two Hundred Fifty Thousand and 00/100 Dollars (US$250,000.00) and (b) issue two Promissory Notes, each in the principal amount of Two Hundred Thousand and 00/100 Dollars (US$200,000.00), one of which shall be due and payable on or before September 6, 2020 and the other shall be due and payable on or before September 5, 2021. | |||
Settlement amount | $ 250,000 | |||
Settlement shares | 52,377,108 | |||
Issue promissory notes | $ 200,000 | |||
Promissory note interest rate | 18.00% | |||
Settlement loss | $ 471,880 | |||
Security Agreement [Member] | SERIES A PREFERRED STOCK [Member] | ||||
Number of shares issued | 1,473 | |||
Security Agreement [Member] | SERIES B PREFERRED STOCK [Member] | ||||
Number of shares issued | 1,000 |
STOCKHOLDERS' EQUITY (Details N
STOCKHOLDERS' EQUITY (Details Narrative) - USD ($) | Feb. 16, 2016 | Nov. 12, 2015 | Jun. 20, 2019 | Mar. 31, 2020 | Sep. 30, 2019 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | Jun. 30, 2019 | Aug. 20, 2018 |
Preferred stock, authorized | 5,000 | 5,000 | 5,000 | |||||||
Common stock, authorized | 2,000,000,000 | 2,000,000,000 | 2,000,000,000 | 2,000,000,000 | ||||||
Dividends, preferred stock, paid-in-kind | $ 114,859 | $ 116,466 | ||||||||
Common Stock issued | 1,171,208,112 | 1,171,208,112 | 1,034,340,037 | |||||||
Common Stock par value (in dollars per shares) | $ 0.001 | $ 0.001 | $ 0.001 | |||||||
Warrant outstanding | 113,508,450 | 113,508,450 | ||||||||
Exercise price (in dollars per shares) | $ 0.005 | $ 0.005 | ||||||||
Convertible promissory note principal | $ 335,000 | $ 335,000 | ||||||||
Gain on extinguishment of debt | $ (129,338) | $ 44,527 | $ (84,811) | |||||||
Series B 5% Convertible Preferred Stock [Member] | ||||||||||
Preferred stock, authorized | 1,250 | |||||||||
Preferred stock, stated value (in dollars per share) | $ 1,000 | |||||||||
Preferred stock cumulative dividend rate | 5.00% | |||||||||
Description of preferred stock voting rights | Holders of the Series B Preferred Stock are entitled to votes on all matters submitted to stockholders at a rate of ten votes for each share of common stock into which the Series B Preferred Stock may be converted. | |||||||||
Preferred stock, paid-in-kind, per share | $ 0.01 | |||||||||
Series A 5% Convertible Preferred Stock [Member] | ||||||||||
Preferred stock, authorized | 2,750 | |||||||||
Preferred stock, stated value (in dollars per share) | $ 1,000 | |||||||||
Preferred stock cumulative dividend rate | 5.00% | |||||||||
Description of preferred stock voting rights | Holders of the Series A Preferred Stock are entitled to votes on all matters submitted to stockholders at a rate of ten votes for each share of common stock into which the Series A Preferred Stock may be converted. | |||||||||
Preferred stock, paid-in-kind, per share | $ 0.015 | |||||||||
Warrant [Member] | 2019 Fixed Rate Convertible Notes [Member] | ||||||||||
Common Stock par value (in dollars per shares) | $ 0.01 | $ 0.01 | ||||||||
Number of warrants issued | 20,800,000 | 20,800,000 | ||||||||
Warrant term | 10 years | 10 years | ||||||||
G. Darcy Klug [Member] | Stock Exchange Agreement [Member] | ||||||||||
Common Stock issued | 113,700,000 | |||||||||
Common Stock par value (in dollars per shares) | $ 0.001 | |||||||||
G. Darcy Klug [Member] | Warrant [Member] | Stock Exchange Agreement [Member] | ||||||||||
Warrant outstanding | 113,508,450 | |||||||||
Exercise price (in dollars per shares) | $ 0.005 | |||||||||
Warrant expire date | Jun. 20, 2029 | |||||||||
Stock Exchange Agreement [Member] | G. Darcy Klug [Member] | SERIES A PREFERRED STOCK [Member] | ||||||||||
Preferred stock cumulative dividend rate | 5.00% | 5.00% | ||||||||
Number of shares converted | 1,277 | |||||||||
Discription of stock split | 0.015 as adjusted for stock splits and dividends. | |||||||||
Stock Exchange Agreement [Member] | G. Darcy Klug [Member] | Warrant [Member] | ||||||||||
Common Stock issued | 113,508,450 | 113,508,450 | ||||||||
Common Stock par value (in dollars per shares) | $ 0.005 | $ 0.005 | ||||||||
Warrant expire date | Jun. 30, 2029 | Jun. 30, 2029 | ||||||||
Common Stock [Member] | ||||||||||
Number of shares issued on conversion | 160,799,339 | 86,933,293 | 293,453,979 | |||||||
5% Convertible Promissory Notes [Member] | ||||||||||
Convertible promissory note principal | $ 580,108 | $ 580,108 | $ 515,247 | |||||||
Conversion price (in dollars per share) | $ 0.005 | $ 0.005 | ||||||||
5% Convertible Promissory Notes [Member] | Common Stock [Member] | ||||||||||
Number of shares issued on conversion | 116,021,700 | |||||||||
Gain on extinguishment of debt | $ 419,000 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | 9 Months Ended | |
Mar. 31, 2020 | Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||
Net operating losses carryforwards | $ 5,000,000 | $ 1,000,000 |
Description income tax future year | Approximately $4 million of this NOL will expire commencing in fiscal 2026 and run through 2038. | |
Deferred tax assets operating loss carryforwards | $ 750,000 | |
Reduced percentage of federal tax rate | 21.00% | |
Percentage of deferred tax assets valuation allowance | 100.00% |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | Jun. 30, 2019 | |
Operating revenues | $ 148,674 | $ 73,556 | $ 217,989 | $ 169,076 | |
Operating income (loss) | (214,446) | (134,203) | (818,311) | (455,031) | |
Interest expense | 67,723 | (25,504) | 279,238 | 155,714 | |
Depreciation and amortization | 21,458 | 19,208 | 63,375 | 80,359 | |
Identifiable assets | 2,655,051 | 2,261,456 | 2,655,051 | 2,261,456 | $ 2,309,333 |
LAND & HOSPITALITY [Member] | |||||
Operating revenues | 14,849 | 10,250 | 41,452 | 34,759 | |
Operating income (loss) | 831 | (8,894) | (15,145) | (11,097) | |
Interest expense | 8,883 | 4,789 | 35,452 | 12,526 | |
Depreciation and amortization | 7,833 | 7,833 | 23,500 | 23,500 | |
Identifiable assets | 903,403 | 937,294 | 903,403 | 937,294 | |
MEDICAL DEVICE & PHARMA [Member] | |||||
Operating revenues | 133,825 | 63,306 | 176,537 | 134,317 | |
Operating income (loss) | (51,151) | (15,899) | (248,760) | (100,660) | |
Interest expense | 310 | 10 | 627 | 10 | |
Depreciation and amortization | 13,625 | 11,375 | 39,875 | 56,859 | |
Identifiable assets | 607,928 | 693,185 | 607,928 | 693,185 | |
OTHER SERVICES [Member] | |||||
Operating revenues | |||||
Operating income (loss) | (85) | (160) | (201) | ||
Interest expense | |||||
Depreciation and amortization | |||||
Identifiable assets | 77,814 | 77,814 | |||
CORPORATE [Member] | |||||
Operating revenues | |||||
Operating income (loss) | (164,041) | (109,410) | (554,246) | (343,073) | |
Interest expense | 58,530 | (20,750) | 243,159 | 143,178 | |
Depreciation and amortization | |||||
Identifiable assets | $ 1,090,906 | $ 630,977 | $ 1,090,906 | $ 630,977 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - 2019 Variable Rate Convertible Notes [Member] - Subsequent Event [Member] | Apr. 01, 2020USD ($)shares |
Principal amount | $ | $ 335,000 |
Repayment of common stock | 19,500 |
Number of shares surrendered | 20,434,782 |