Cover
Cover - shares | 9 Months Ended | |
Mar. 31, 2024 | May 14, 2024 | |
Cover [Abstract] | ||
Entity Registrant Name | Luvu Brands, Inc. | |
Entity Central Index Key | 0001374567 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Current Fiscal Year End Date | --06-30 | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Current Reporting Status | Yes | |
Document Period End Date | Mar. 31, 2024 | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2024 | |
Entity Common Stock Shares Outstanding | 76,547,672 | |
Entity File Number | 000-53314 | |
Entity Incorporation State Country Code | FL | |
Entity Tax Identification Number | 59-3581576 | |
Entity Address Address Line 1 | 2745 Bankers Industrial Drive | |
Entity Address City Or Town | Atlanta | |
Entity Address State Or Province | GA | |
Entity Address Postal Zip Code | 30360 | |
City Area Code | 770 | |
Local Phone Number | 246-6400 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Interactive Data Current | Yes |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2024 | Jun. 30, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 1,073 | $ 1,041 |
Accounts receivable, net | 1,298 | 1,051 |
Inventories, net | 3,468 | 4,202 |
Prepaid expenses | 101 | 84 |
Total current assets | 5,940 | 6,378 |
Equipment and leasehold improvements, net | 1,942 | 2,186 |
Finance lease assets | 13 | 24 |
Operating lease assets | 1,622 | 1,913 |
Deferred tax asset, net | 10 | 10 |
Other assets | 97 | 100 |
Total assets | 9,624 | 10,611 |
Current liabilities: | ||
Accounts payable | 1,639 | 2,114 |
Current debt | 1,496 | 1,659 |
Other accrued liabilities | 634 | 416 |
Operating lease liability | 471 | 396 |
Total current liabilities | 4,240 | 4,585 |
Noncurrent liabilities: | ||
Long-term debt | 1,062 | 1,148 |
Long-term operating lease liability | 1,292 | 1,667 |
Total noncurrent liabilities | 2,354 | 2,815 |
Total liabilities | 6,594 | 7,400 |
Stockholders' equity: | ||
Preferred stock, Value | 0 | 0 |
Common stock, $0.01 par value, 175,000,000 shares authorized, 76,547,672 and 76,547,672 shares issued and outstanding at March 31, 2024 and June 30, 2023, respectively | 765 | 765 |
Additional paid-in capital | 6,247 | 6,236 |
Accumulated deficit | (3,982) | (3,790) |
Total stockholders' equity | 3,030 | 3,211 |
Total liabilities and stockholders' equity | 9,624 | 10,611 |
Series A Preferred Shares [Member] | ||
Stockholders' equity: | ||
Preferred stock, Value | $ 0 | $ 0 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Mar. 31, 2024 | Jun. 30, 2023 |
Preferred stock - par value | $ 0.0001 | $ 0.0001 |
Preferred stock - shares authorized | 5,700,000 | 5,700,000 |
Preferred stock - shares issued | 0 | 0 |
Preferred stock - shares outstanding | 0 | 0 |
Common stock- par value | $ 0.01 | $ 0.01 |
Common stock- shares authorized | 175,000,000 | 175,000,000 |
Common stock- shares issued | 76,547,672 | 76,547,672 |
Common stock- shares outstanding | 76,547,672 | 76,547,672 |
Series A Preferred Shares [Member] | ||
Preferred stock - par value | $ 0.0001 | $ 0.0001 |
Preferred stock - shares authorized | 4,300,000 | 4,300,000 |
Preferred stock - shares issued | 4,300,000 | 4,300,000 |
Preferred stock - shares outstanding | 4,300,000 | 4,300,000 |
Preferred stock - liquidation preference | $ 1,000 | $ 1,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Mar. 31, 2024 | Mar. 31, 2023 | |
Consolidated Statements of Operations (Unaudited) | ||||
Net Sales | $ 5,923 | $ 6,903 | $ 18,835 | $ 23,098 |
Cost of goods sold | 4,284 | 5,134 | 13,795 | 17,097 |
Gross profit | 1,639 | 1,769 | 5,040 | 6,001 |
Operating expenses | ||||
Advertising and promotion | 242 | 171 | 785 | 557 |
Other selling and marketing | 463 | 342 | 1,329 | 1,050 |
General and administrative | 790 | 784 | 2,457 | 2,388 |
Depreciation and amortization | 103 | 89 | 307 | 264 |
Total operating expenses | 1,598 | 1,386 | 4,878 | 4,259 |
Income from operations | 41 | 383 | 162 | 1,742 |
Other Income (Expense): | ||||
Interest expense and financing costs | (135) | (90) | (322) | (262) |
Total Other Income (Expense) | (135) | (90) | (322) | (262) |
Income before income taxes | (94) | 293 | (160) | 1,480 |
Provision for income taxes | 0 | 0 | (31) | 0 |
Net income (loss) | $ (94) | $ 293 | $ (191) | $ 1,480 |
Net income per share | ||||
Basic | $ 0 | $ 0 | $ 0 | $ 0.02 |
Diluted | $ 0 | $ 0 | $ 0 | $ 0.02 |
Shares used in computing net income per share: | ||||
Basic | 76,547,672 | 76,514,264 | 76,547,672 | 76,262,350 |
Diluted | 76,547,672 | 76,740,653 | 76,547,672 | 76,471,988 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders Equity (Unaudited) - USD ($) $ in Thousands | Total | Series A Preferred Stocks [Member] | Common Stock | Additional Paid-In Capital | Accumulated Deficit |
Balance, shares at Jun. 30, 2022 | 4,300,000 | 76,046,249 | |||
Balance, amount at Jun. 30, 2022 | $ 1,954 | $ 0 | $ 760 | $ 6,183 | $ (4,988) |
Stock-based compensation expense | 34 | 0 | $ 0 | 34 | 0 |
Stock option exercises, shares | 501,423 | ||||
Stock option exercises, amount | 11 | 0 | $ 5 | 6 | 0 |
Net income (loss) | 1,480 | $ 0 | $ 0 | 0 | 1,480 |
Balance, shares at Mar. 31, 2023 | 4,300,000 | 76,547,672 | |||
Balance, amount at Mar. 31, 2023 | 3,480 | $ 0 | $ 765 | 6,223 | (3,508) |
Balance, shares at Dec. 31, 2022 | 4,300,000 | 76,511,005 | |||
Balance, amount at Dec. 31, 2022 | 3,175 | $ 0 | $ 765 | 6,211 | (3,801) |
Stock-based compensation expense | 12 | 0 | $ 0 | 12 | 0 |
Stock option exercises, shares | 36,667 | ||||
Stock option exercises, amount | 0 | 0 | $ 0 | 0 | 0 |
Net income (loss) | 293 | $ 0 | $ 0 | 0 | 293 |
Balance, shares at Mar. 31, 2023 | 4,300,000 | 76,547,672 | |||
Balance, amount at Mar. 31, 2023 | 3,480 | $ 0 | $ 765 | 6,223 | (3,508) |
Balance, shares at Jun. 30, 2023 | 4,300,000 | 76,547,672 | |||
Balance, amount at Jun. 30, 2023 | 3,211 | $ 0 | $ 765 | 6,236 | (3,791) |
Stock-based compensation expense | 11 | 0 | 0 | 11 | 0 |
Net income (loss) | (191) | $ 0 | $ 0 | 0 | (191) |
Balance, shares at Mar. 31, 2024 | 4,300,000 | 76,547,672 | |||
Balance, amount at Mar. 31, 2024 | 3,030 | $ 0 | $ 765 | 6,247 | (3,982) |
Balance, shares at Dec. 31, 2023 | 4,300,000 | 76,547,672 | |||
Balance, amount at Dec. 31, 2023 | 3,118 | $ 0 | $ 765 | 6,241 | (3,888) |
Stock-based compensation expense | 6 | ||||
Net income (loss) | (94) | 0 | 0 | 0 | (94) |
Stock option exercises | 0 | 0 | 0 | 0 | 0 |
Stock-based compensation expense | 6 | $ 0 | $ 0 | 6 | 0 |
Balance, shares at Mar. 31, 2024 | 4,300,000 | 76,547,672 | |||
Balance, amount at Mar. 31, 2024 | $ 3,030 | $ 0 | $ 765 | $ 6,247 | $ (3,982) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Consolidated Statements of Cash Flows (Unaudited) | ||
Net income (loss) | $ (191) | $ 1,480 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 307 | 264 |
Stock based compensation expense | 11 | 34 |
Provision for bad debt | 0 | 1 |
Amortization of operating lease asset | 290 | 252 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (247) | (262) |
Inventories, net | 733 | (624) |
Prepaid expenses and other assets | (14) | 57 |
Accounts payable | (474) | (344) |
Accrued compensation | 171 | 133 |
Accrued expenses and interest | 46 | 160 |
Operating lease liability | (299) | (245) |
Net cash provided by operating activities | 333 | 906 |
INVESTING ACTIVITIES: | ||
Investment in purchase of equipment and leasehold improvements | (52) | (113) |
Net cash used in investing activities | (52) | (113) |
FINANCING ACTIVITIES: | ||
Proceeds from unsecured notes payable | 200 | 200 |
Repayment of unsecured notes payable | (200) | (200) |
Net cash provided by (repaid to) line of credit | 64 | (71) |
Repayment of unsecured line of credit | (10) | (9) |
Proceeds from exercise of stock options | 0 | 2 |
Payments on equipment notes | (292) | (210) |
Principal payments on leases payable | (11) | (11) |
Net cash provided by financing activities | (249) | (299) |
Net increase in cash and cash equivalents | 32 | 494 |
Cash and cash equivalents at beginning of period | 1,041 | 859 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 1,073 | 1,353 |
Non cash item: | ||
Purchases of equipment with equipment notes | 0 | 373 |
Cash paid during the period for: | 0 | 0 |
Interest | 275 | 261 |
Income taxes | $ 0 | $ 0 |
ORGANIZATION AND NATURE OF BUSI
ORGANIZATION AND NATURE OF BUSINESS | 9 Months Ended |
Mar. 31, 2024 | |
ORGANIZATION AND NATURE OF BUSINESS | |
ORGANIZATION AND NATURE OF BUSINESS | NOTE 1. ORGANIZATION AND Luvu Brands, Inc. (the “Company” or “Luvu”) was incorporated in the State of Florida on February 25, 1999. References to the Company in these notes include the Company and its wholly owned subsidiaries, OneUp Innovations, Inc. (“OneUp”), and Foam Labs, Inc. (“Foam Labs”). All operations of the Company are currently conducted by OneUp. The Company is an Atlanta, Georgia based designer, manufacturer and marketer of a portfolio of consumer lifestyle brands including: · JAXX-a diverse range of convertible daybeds, headboard panels, outdoor soft seating and bean bags made from repurposed polyurethane foam trim. · AVANA-products for yoga exercise, sleep comfort and inclined bed therapy. · LIBERATOR-transformable chaises and specially designed pillow and props for enhancing sexual performance. · FOAMLABS-private label Jaxx products and contract manufacturing for hospitality, school, furniture mass market and beyond. These products are sold through the Company’s websites, online mass merchants and retail stores worldwide. Many of our products are offered flat-packed and either roll or vacuum compressed to save on shipping and reduce our carbon footprint. Sales are generated through internet and print advertisements and social marketing. We have a diversified customer base with only one customer accounting for 30% or more of consolidated net sales in the current and prior fiscal year and no particular concentration of credit risk in one customer type. The accompanying unaudited consolidated financial statements of the Company and all of its wholly-owned subsidiaries included herein have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"). Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with generally accepted accounting principles of the United States of America ("GAAP") have been omitted pursuant to applicable rules and regulations. In the opinion of management, all normal recurring adjustments considered necessary for fair presentation have been included. The year-end balance sheet data were derived from audited consolidated financial statements but do not include all disclosures required by GAAP. The results of operations for the three and nine months ended March 31, 2024 are not necessarily indicative of the results to be expected for the entire fiscal year. These consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Annual Report on Form 10-K for the fiscal year ended June 30, 2023 as filed with the Securities and Exchange Commission (the “SEC”) on October 16, 2023 (the “2023 10-K”). |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Mar. 31, 2024 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation These consolidated financial statements include the accounts and operations of our wholly owned operating subsidiaries, OneUp and Foam Labs. Intercompany accounts and transactions have been eliminated in consolidation. Certain prior period amounts have been reclassified to conform to the current year presentation. The accompanying consolidated financial statements have been prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. These consolidated financial statements and notes should be read in conjunction with the Company’s consolidated financial statements contained in the Company’s 2023 10-K. Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions in determining the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Significant estimates in these consolidated financial statements include estimates of: income taxes; tax valuation reserves; allowances for doubtful accounts; inventory valuation and allowances; share-based compensation; and useful lives for depreciation and amortization. Actual results could differ materially from these estimates. Revenue Recognition We record revenue based on the five-step model which includes: (1) identifying the contract with the customer; (2) identifying the performance obligations in the contract; (3) determining the transaction price; (4) allocating the transaction price to the performance obligations; and (5) recognizing revenue when the performance obligations are satisfied. Substantially all of our revenue is generated by fulfilling orders for the purchase of manufactured products and product purchased for resale to retailers, wholesalers, or direct to consumers via online channels, with each order considered to be a distinct performance obligation. These orders may be formal purchase orders, verbal phone orders, e-mail orders or orders received online. Shipping and handling activities for which we are responsible under the terms and conditions of the order are not accounted for as performance obligations but as fulfillment costs. These activities are required to fulfill our promise to transfer the goods and are expensed when revenue is recognized. The impact of this policy election is insignificant as it aligns with our current practice. Revenue is measured as the net amount of consideration expected to be received in exchange for fulfilling a performance obligation. We have elected to exclude sales, use and similar taxes from the measurement of the transaction price. The impact of this policy election is insignificant, as it aligns with our current practice. The amount of consideration expected to be received and revenue recognized includes estimates of variable consideration, which includes costs for trade promotion programs, coupons, returns and early payment discounts. Such estimates are calculated using historical averages adjusted for any expected changes due to current business conditions and experience. We review and update these estimates at the end of each reporting period and the impact of any adjustments are recognized in the period the adjustments are identified. In assessing whether collection of consideration from a customer is probable, we consider the customer's ability and intent to pay that amount of consideration when it is due. Payment of invoices is due as specified in the underlying customer agreement, typically 30 days from the invoice date, which occurs on the date of transfer of control of the products to the customer. Revenue is recognized at the point in time that control of the ordered products is transferred to the customer. Generally, this occurs when the product is delivered, or in some cases, picked up from one of our distribution centers by the customer. Deferred revenues Deferred revenues are recorded when the Company has received consideration (i.e. advance payment) before satisfying its performance obligations. Deferred revenues primarily relate to gift cards purchased, but not used, prior to the end of the fiscal period. Our total deferred revenue as of March 31, 2024 was $19,254 and was included in “Other accrued liabilities” on our consolidated balance sheets. The deferred revenue balance as of March 31, 2023 was $18,272. Cost of Goods Sold Cost of goods sold includes raw materials, labor, manufacturing overhead, and royalty expense. Cash and Cash Equivalents For purposes of reporting cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. Allowance for Doubtful Accounts We maintain an allowance for doubtful accounts to reflect our estimate of current and past due receivable balances that may not be collected. The allowance for doubtful accounts is based upon our assessment of the collectability of specific customer accounts, the aging of accounts receivable and our history of bad debts. We believe that the allowance for doubtful accounts is adequate to cover anticipated losses in the receivable balance under current conditions. However, significant deterioration in the financial condition of our customers, resulting in an impairment of their ability to make payments, could materially change these expectations and an additional allowance may be required. The following is a summary of Accounts Receivable as of March 31, 2024 and June 30, 2023. March 31, 2024 June 30, 2023 (unaudited) (in thousands) Accounts receivable $ 1,299 $ 1,107 Allowance for doubtful accounts (1 ) (1 ) Allowance for discounts and returns — (55 ) Total accounts receivable, net $ 1,298 $ 1,051 Inventories and Inventory Allowances Inventories are stated at the lower of cost or net realizable value. Cost is determined using the first-in, first-out (FIFO) method. Net realizable value is defined as sales price less cost to dispose and a normal profit margin. Inventory costs include materials, labor, depreciation and overhead. The Company establishes allowances for excess and obsolete inventory, based on prevailing circumstances and judgment for consideration of current events, such as economic conditions, that may affect inventory. The allowances required to record inventory at lower of cost or net realizable value may be adjusted in response to changing conditions. Concentration of Credit Risk The Company maintains its cash accounts with banks located in Georgia. The total cash balances are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 per bank. The Company had bank balances on deposit at March 31, 2024 that exceeded the balance insured by the FDIC by $822,772. Accounts receivable is typically unsecured and is derived from revenue earned from customers primarily located in North America and Europe. During the three and nine months ended March, 31 2024, we purchased 24.6% of total inventory purchases from one vendor. During the fiscal year ended June 30, 2023, we purchased 35% of total inventory purchases from one vendor. As of March 31, 2024, one of the Company’s customers represent 44% of the total accounts receivables. As of June 30, 2023, two of the Company’s customers represent 35% and 12% of the total accounts receivables, respectively. For the nine months ended March 31, 2024, sales to and through Amazon accounted for 39% of our net sales. Fair Value of Financial Instruments At March 31, 2024 and June 30, 2023, our financial instruments included cash and cash equivalents, accounts receivable, accounts payable, short-term debt, and other long-term debt. The fair values of these financial instruments approximated their carrying values based on either their short maturity or current terms for similar instruments. The Company measures the fair value of its assets and liabilities under the guidance of Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures ASC 820 clarifies that fair value is an exit price, representing the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants based on the highest and best use of the asset or liability. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. ASC 820 requires the Company to use valuation techniques to measure fair value that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized as follows: Level 1 Level 2 Level 3 The valuation techniques that may be used to measure fair value are as follows: A. Market approach B. Income approach C. Cost approach Advertising Costs Advertising costs are expensed in the period when the advertisements are first aired or distributed to the public. Prepaid Advertising (included in prepaid expenses) was $336 at March 31, 2024 and $525 at March 31, 2023. Advertising expense for the nine months ended March 31, 2024 and 2023 was $785,081 and $557,114, respectively. Research and Development Research and development expenses for new products are expensed as they are incurred. Expenses for new product development totaled $115,467 and $100,326 for the nine months ended March 31, 2024 and 2023, respectively. Research and development costs are included in general and administrative expense. Property and Equipment Property and equipment are stated at cost. Depreciation and amortization are computed using the straight-line method over estimated service lives for financial reporting purposes of 2-10 years. Expenditures for major renewals and betterments that extend the useful lives of property and equipment are capitalized. Expenditures for maintenance and repairs are charged to expense as incurred. When properties are disposed of, the related costs and accumulated depreciation are removed from the respective accounts, and any gain or loss is recognized currently. Impairment or Disposal of Long Lived Assets Long-lived assets to be held are reviewed for events or changes in circumstances which indicate that their carrying value may not be recoverable. They are tested for recoverability using undiscounted cash flows to determine whether or not impairment to such value has occurred as required by Financial Accounting Standards Board (“ FASB”) ASC Topic No. 360, Property, Plant, and Equipment Operating Leases On November 2, 2020, the Company entered into an agreement with its landlord on a new lease for the current facilities for six years and two months, beginning January 1, 2021. The new lease includes two months of rent abatement totaling $103,230. Under the new lease, the monthly rent on the facility is $51,615 with annual escalations of 3% with the final two months of rent at $61,605. In addition, the Company will pay the landlord a 2% property management fee. The rent expense for the nine months ended March 31, 2024 and 2023 was $497,502 and $483,183, respectively. Under ASC 842, which was adopted July 1, 2019, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present. Most leases with a term greater than one year are recognized on the balance sheet as right-of-use assets, lease liabilities and, if applicable, long-term lease liabilities. The Company elected not to recognize leases with a term less than one year on its balance sheet. Operating lease right-of-use (ROU) assets and their corresponding lease liabilities are recorded based on the present value of lease payments over the expected remaining lease term. The interest rate implicit in lease contracts is typically not readily determinable. As a result, the Company utilizes its incremental borrowing rates, which are the rates incurred to borrow on a collateralized basis over a similar term, an amount equal to the lease payments in a similar economic environment. In accordance with the guidance in ASU 2016-02, components of a lease should be split into three categories: lease components (e.g. land, building, etc.), non-lease components (e.g. common area maintenance, consumables, etc.), and non-components (e.g. property taxes, insurance, etc.) Then the fixed and in-substance fixed contract consideration (including any related to non-components) must be allocated based on fair values to the lease components and non-lease components. Although separation of lease and non-lease components is required, the Company elected the practical expedient to not separate lease and non-lease components. The lease component results in an operating right-of-use asset being recorded on the balance sheet and amortized on a straight-line basis as lease expense. See Note 12 for details. Under prior guidance ASC 840, rent expense and lease incentives from operating leases were recognized on a straight-line basis over the lease term. The difference between rent expense recognized and rental payments was recorded as deferred rent in the accompanying consolidated balance sheets. Segment Information We have identified three reportable sales channels: Direct, Wholesale Other Direct Wholesale Wholesale Other Direct The following is a summary of sales results for the Direct, Wholesale Other Three Months Ended March 31, 2024 Three Months Ended March 31, 2023 % Change (in thousands) Net Sales by Channel: Direct $ 1,632 $ 1,913 (15 )% Wholesale $ 4,155 $ 4,819 (14 )% Other $ 136 $ 171 (21 ) % Total Net Sales $ 5,923 $ 6,903 (14 )% Three Months Ended Margin Three Months Ended Margin $ % March 31, 2024 % March 31, 2023 % Change (in thousands) (in thousands) Gross Profit by Channel: Direct $ 757 46 % $ 923 48 % (18 )% Wholesale $ 1,040 25 % $ 1,216 25 % (14 )% Other $ (158 ) — % $ (370 ) — % 57 % Total Gross Profit $ 1,639 28 % $ 1,769 26 % (7 )% Nine Months Ended March 31, 2024 Nine Months Ended March 31, 2023 % Change (in thousands) Net Sales by Channel: Direct $ 4,992 $ 6,824 (27 )% Wholesale $ 13,406 $ 15,705 (15 )% Other $ 437 $ 569 (23 )% Total Net Sales $ 18,835 $ 23,098 (19 )% Nine Months Ended March 31, 2024 Margin % Nine Months Ended Nine 31, 2023 Margin % % Change (in thousands) (in thousands) Gross Profit by Channel: Direct $ 2,247 45 % $ 3,178 47 % (29 )% Wholesale $ 3,441 26 % $ 4,074 26 % (16 )% Other $ (648 ) — % $ (1,251 ) — % — % Total Gross Profit $ 5,040 27 % $ 6,001 26 % (16 )% Recent accounting pronouncements From time to time, new accounting pronouncements are issued by FASB or other standard setting bodies that are adopted by the Company as of the specified effective date. All other newly issued accounting pronouncements, but not yet effective, have been deemed either immaterial or not applicable. Net Income Per Share In accordance with ASC 260, “Earnings Per Share”, basic net income per share is computed by dividing the net income available to common stockholders for the period by the weighted average number of common shares outstanding during the period. Diluted net income per share is computed by dividing net income available to common stockholders by the weighted average number of common and common equivalent shares outstanding during the period plus the effect of stock options using the treasury stock method. As of March 31, 2024 and 2023, the common stock equivalents did not have any effect on net income per share. March 31, 2024 2023 Common stock options – 2015 Plan 1,150,000 1,400,000 Convertible preferred stock 4,300,000 4,300,000 Total 5,450,000 5,700,000 Income Taxes We utilize the asset and liability method of accounting for income taxes. We recognize deferred tax liabilities or assets for the expected future tax consequences of temporary differences between the book and tax basis of assets and liabilities. We regularly assess the likelihood that our deferred tax assets will be recovered from future taxable income. We consider projected future taxable income and ongoing tax planning strategies in assessing the amount of the valuation allowance necessary to offset our deferred tax assets that will not be recoverable. We have recorded and continue to carry a full valuation allowance against our gross deferred tax assets that will not reverse against deferred tax liabilities within the scheduled reversal period. If we determine in the future that it is more likely than not that we will realize all or a portion of our deferred tax assets, we will adjust our valuation allowance in the period we make the determination. We expect to provide a full valuation allowance on our future tax benefits until we can sustain a level of profitability that demonstrates our ability to realize these assets. On November 27, 2023 the Company received a notice from the Internal Revenue Service of Taxes and Penalties due of approximately $125,000. The Company believes once Net Operating Losses and tax credits are applied the penalties and interest will be reduced to approximately $38,000 therefore the Company has accrued $38,000 for estimated penalties and interest as of March 31, 2024. On January 22, 2024, the Company received a notice from the Georgia Department of Revenue for Tax and Penalties due of approximately $104,000. The Company believes once Net Operating Losses and tax credit are applied the liability will be reduced to penalties and interest of approximately $6,000. Therefore, the Company has accrued $6,000 for estimated penalties and interest as of March 31, 2024. Stock Based Compensation We account for stock-based compensation to employees in accordance with FASB ASC 718, Compensation – Stock Compensation. |
IMPAIRMENT OF LONGLIVED ASSETS
IMPAIRMENT OF LONGLIVED ASSETS | 9 Months Ended |
Mar. 31, 2024 | |
IMPAIRMENT OF LONGLIVED ASSETS | |
IMPAIRMENT OF LONGLIVED ASSETS | NOTE 3. IMPAIRMENT OF LONG-LIVED ASSETS We follow FASB ASC 360, Property, Plant, and Equipment An impairment loss is recognized only if the carrying value of a long-lived asset is not recoverable and is measured as the excess of its carrying value over its fair value. The carrying amount of a long-lived asset is considered not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use of a long-lived asset. Assets to be disposed of and related liabilities would be separately presented in the consolidated balance sheet. Assets to be disposed of would be reported at the lower of the carrying value or fair value less costs to sell and would not be depreciated. There was no impairment as of March 31, 2024 or June 30, 2023. |
INVENTORIES NET
INVENTORIES NET | 9 Months Ended |
Mar. 31, 2024 | |
INVENTORIES NET | |
INVENTORIES NET | NOTE 4. INVENTORIES, NET Inventories are stated at the lower of cost (which approximates first-in, first-out) or net realizable value. Net realizable value is defined as sales price less cost to dispose and a normal profit margin. Inventories consisted of the following: March 31, 2024 June 30, 2023 (unaudited) (in thousands) Raw materials $ 1,625 $ 1,926 Work in process 406 507 Finished goods 1,689 2,021 Total inventories 3,720 4,454 Allowance for excess and obsolete inventory (252 ) (252 ) Total inventories, net of allowance $ 3,468 $ 4,202 |
EQUIPMENT AND LEASEHOLD IMPROVE
EQUIPMENT AND LEASEHOLD IMPROVEMENTS | 9 Months Ended |
Mar. 31, 2024 | |
EQUIPMENT AND LEASEHOLD IMPROVEMENTS | |
EQUIPMENT AND LEASEHOLD IMPROVEMENTS | NOTE 5. EQUIPMENT AND LEASEHOLD IMPROVEMENTS Equipment and leasehold improvements are stated at cost. Depreciation and amortization are provided using the straight-line method over the estimated useful lives for equipment and furniture and fixtures, or the shorter of the remaining lease term or estimated useful lives for leasehold improvements. Equipment and leasehold improvements consisted of the following: March 31, 2024 June 30, 2023 Estimated Useful Life (unaudited) (in thousands) Factory equipment $ 4,737 $ 4,356 2-10 years Computer equipment and software 1,173 1,171 5-7 years Office equipment and furniture 205 205 5-7 years Leasehold improvements 480 480 6 years Project in process — 320 Subtotal 6,595 6,532 Accumulated depreciation (4,653 ) (4,346 ) Equipment and leasehold improvements, net $ 1,942 $ 2,186 Depreciation expense was $103,874 and $88,902 for the three months ended March 31, 2024 and 2023, respectively. For the nine months ended March 31, 2024 and 2023, depreciation and amortization expense was $306,840 and $263,755, respectively. Management reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. Recoverability of these assets is measured by a comparison of the carrying amount to forecasted undiscounted future cash flows expected to be generated by the asset. If the carrying amount exceeds its estimated future cash flows, then an impairment charge is recognized to the extent that the carrying amount exceeds the asset’s fair value. Management has determined no asset impairment occurred during the nine months ended March 31, 2024. |
OTHER ACCRUED LIABILITIES
OTHER ACCRUED LIABILITIES | 9 Months Ended |
Mar. 31, 2024 | |
OTHER ACCRUED LIABILITIES | |
OTHER ACCRUED LIABILITIES | NOTE 6. OTHER ACCRUED LIABILITIES Other accrued liabilities at March 31, 2024 and June 30, 2023: March 31, 2024 June 30, 2023 (unaudited) (in thousands) Accrued compensation $ 473 $ 302 Accrued expenses and interest 161 114 Other accrued liabilities $ 634 $ 416 |
CURRENT AND LONGTERM DEBT SUMMA
CURRENT AND LONGTERM DEBT SUMMARY | 9 Months Ended |
Mar. 31, 2024 | |
CURRENT AND LONGTERM DEBT SUMMARY | |
CURRENT AND LONGTERM DEBT SUMMARY | NOTE 7. CURRENT AND LONG-TERM DEBT SUMMARY March 31, 2024 June 30, 2023 (unaudited) Current debt: (in thousands) Unsecured lines of credit (Note 11) $ 3 $ 13 Line of credit (Note 10) 1,103 1,039 Short-term unsecured notes payable (Note 8) — 200 Current portion of equipment notes payable (Note 12) 379 392 Current portion of finance leases payable (Note 12) 11 15 Total current debt 1,496 1,659 Long-term debt: Unsecured notes payable (Note 8) 400 200 Finance leases payable (Note 12) 2 9 Equipment notes payable (Note 12) 544 824 Notes payable – related party (Note 9) 116 116 Total long-term debt $ 1,062 $ 1,148 |
UNSECURED NOTES PAYABLE
UNSECURED NOTES PAYABLE | 9 Months Ended |
Mar. 31, 2024 | |
UNSECURED NOTES PAYABLE | |
UNSECURED NOTES PAYABLE | NOTE 8. UNSECURED NOTES PAYABLE Unsecured notes payable at March 31, 2024 and June 30, 2023 consisted of the following: March 31, 2024 June 30, 2023 (unaudited) Current unsecured notes payable: (in thousands) 13.5% Unsecured note, interest only, due July 31, 2023 (3) - 100 13.5% Unsecured note, interest only, due October 31, 2023 (1) - 100 Total current unsecured notes payable - 200 Long-term unsecured notes payable: 13.5% Unsecured note, interest only, due May 1, 2025 (2) 200 200 13.5% Unsecured note, interest only, due July 31, 2025 (3) 100 - 13.5% Unsecured note, interest only, due October 31, 2025 (1) 100 - Total long-term unsecured notes payable 400 200 Total unsecured notes payable $ 400 $ 400 (1) Unsecured note payable for $100,000 to an individual with interest payable monthly at 20%, principal originally due in full on October 31, 2014, extended to October 31, 2019, then extended to October 31, 2021. This note was repaid in full on October 1, 2021 and replaced with a new note from an entity controlled by the same lender with interest payable monthly at 13.5%, principal due in full on October 31, 2023. This note was extended in full on September 30, 2023 with the same lender with interest payable monthly at 13.5%, principal due in full on October 31, 2025. Personally guaranteed by Louis Friedman, the Company’s SEC and principal stockholder. (2) Unsecured note payable for $200,000 to an individual with interest payable monthly at 20%, principal originally due in full on May 1, 2013, extended to May 1, 2019, then extended to May 1, 2021. This note was repaid in full on April 30, 2021 and replaced with a new note from an entity controlled by the same lender with interest payable monthly at 13.5%, principal due in full on May 1, 2023. This note was extended in full on April 30, 2023 with the same lender with interest payable monthly at 13.5%, principal due in full on May 1, 2025. Personally guaranteed by the Company’s CEO and principal stockholder. (3) Unsecured note payable for $100,000 to an individual with interest payable monthly at 20%, principal originally due in full on July 31, 2013, extended to July 31, 2019, then extended to July 31, 2021. This note was repaid in full on July 30, 2021 and replaced with a new note from an entity controlled by the same lender with interest payable monthly at 13.5%, principal due in full on July 31, 2023. This note was extended in full on July 30, 2023 with the same lender with interest payable monthly at 13.5%, principal due in full on July 31, 2025. Personally guaranteed by the Company’s CEO and principal stockholder. |
NOTES PAYABLE RELATED PARTY
NOTES PAYABLE RELATED PARTY | 9 Months Ended |
Mar. 31, 2024 | |
NOTES PAYABLE RELATED PARTY | |
NOTES PAYABLE RELATED PARTY | NOTE 9. NOTES PAYABLE - RELATED PARTY Related party notes payable at March 31, 2024 and June 30, 2023 consisted of the following: March 31, 2024 June 30, 2023 (unaudited) (in thousands) Unsecured note payable to an officer, with interest at 8.50%, due on July 1, 2025 $ 40 $ 40 Unsecured note payable to an officer, with interest at 8.50%, due on July 1, 2025 76 76 Total unsecured notes payable 116 116 Less: current portion - - Long-term unsecured notes payable $ 116 $ 116 |
LINE OF CREDIT
LINE OF CREDIT | 9 Months Ended |
Mar. 31, 2024 | |
LINE OF CREDIT | |
LINE OF CREDIT | NOTE 10. LINE OF CREDIT The Company’s wholly owned subsidiary, OneUp and OneUp’s wholly owned subsidiary, Foam Labs has entered into a credit facility with a finance company, Advance Financial Corporation dated May 24, 2011, as amended, to provide it with an asset based line of credit of up to $1,200,000 against 85% of eligible accounts receivable (as defined in the agreement) for the purpose of improving working capital and includes an Inventory Advance (as defined in the agreement) of up to the lesser of $500,000 or 125% of the eligible accounts receivable loan. The term of the agreement was one year, renewable for additional one-year terms unless either party provides written notice of non-renewal at least 90 days prior to the end of the current financing period. The credit facility is secured by our accounts receivable and other rights to payment, general intangibles, inventory and equipment, and are subject to eligibility requirements for current accounts receivable. Advances under the agreement are currently charged interest at a rate of prime rate plus 2% over the lenders Index Rate. In addition, there is a Monthly Service Fee (as defined in the agreement) of currently 0.05 % per month. The Company’s President, Chief Executive Officer (CEO), and principal shareholder, Louis Friedman, has personally guaranteed the repayment of the facility. In addition, the Company has provided its corporate guarantee of the credit facility (see Note 13). On March 31, 2024, the balance owed under this line of credit was $1,103,049. As of March 31, 2024, we were current and in compliance with all terms and conditions of this line of credit. Management believes cash flows generated from operations, along with current cash and investments as well as borrowing capacity under the line of credit should be sufficient to finance capital requirements required by operations. If new business opportunities do arise, additional outside funding may be required. |
UNSECURED LINE OF CREDIT
UNSECURED LINE OF CREDIT | 9 Months Ended |
Mar. 31, 2024 | |
UNSECURED LINE OF CREDIT | |
UNSECURED LINE OF CREDIT | NOTE 11. UNSECURED LINE OF CREDIT The Company has drawn a cash advance on one unsecured line of credit that is in the name of the Company and Louis Friedman. The terms of this unsecured line of credit calls for monthly payments of principal and interest, with interest at 13.2%. The credit line is for $55,000. The aggregate amount owed on the unsecured line of credit was $3,097 at March 31, 2024 and $12,806 at June 30, 2023. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Mar. 31, 2024 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | NOTE 12. COMMITMENTS AND CONTINGENCIES Operating Leases The Company leases its facilities under a non-cancelable operating lease which now expires February 28, 2027. Right-of-use assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Right-of-use assets and liabilities for the lease renewal were recognized at the inception date which is November 2, 2020 based on the present value of lease payments over the lease term, using the Company’s incremental borrowing rate based on the information available. At March 31, 2024, the weighted average remaining lease term for the lease renewal is 4 years and the weighted average discount rate is 14.49%. Supplemental balance sheet information related to leases at March 31, 2024 is as follows: Operating leases Balance Sheet Classification (in thousands) Right-of-use assets Operating lease right-of-use assets, net $ 1,622 Current lease liabilities Operating lease liabilities $ - Non-current lease liabilities Long-term operating lease liabilities 1,764 Total lease liabilities $ 1,764 Maturities of lease liabilities at March 31, 2024 are as follows: Payments (in thousands) Remainder of 2024 $ 143 2025 721 2026 762 2027 and thereafter 528 Total undiscounted lease payments 2,154 Less: Present value discount (390 ) Total lease liability balance $ 1,764 Equipment Notes Payable The Company has acquired equipment under the provisions of long-term equipment notes. For financial reporting purposes, minimum note payments relating to the equipment have been capitalized. The equipment acquired with these equipment notes has a total cost of $2,290,061. These assets are included in the fixed assets listed in Note 5 - Equipment and Leasehold Improvements The following is an analysis of the minimum future equipment note payable payments subsequent to March 31, 2024: Years ending June 30, (in thousands) Remainder of 2024 113 2025 427 2026 309 2027 130 2028 39 Future Minimum Note Payable Payments 1,018 Less Amount Representing Interest (95 ) Present Value of Minimum Note Payable Payments 923 Less Current Portion (379 ) Long-Term Obligations under Equipment Notes Payable $ 544 Finance Leases Payable The Company has a lease obligations for equipment under the provisions of long-term finance leases. For financial reporting purposes, minimum lease payments relating to the equipment have been capitalized. The equipment acquired with these leases has a total cost of approximately $58,152. These assets are included in the finance lease and include production equipment. On June 22, 2020 the Company entered into a finance lease agreement with Wells Fargo in the amount of $34,761 with monthly payment of $850 with 48-month term at an imputed interest rate of 8.09%. On February 1, 2022 the Company entered into a finance lease agreement with Raymond in the amount of $22,862 with monthly payment of $514 with 48-month term at an imputed interest rate of 3.75%. The following is an analysis of the minimum finance lease payable payments subsequent to March 31,2024: Year ending June 30, (in thousands) Remainder of 2024 4 2025 6 2026 3 Future Minimum Finance Lease Payable Payments $ 13 Less Amount Representing Interest 0 Present Value of Minimum Finance Lease Payable Payments 13 Less Current Portion (11 ) Long-Term Obligations under Finance Lease Payable $ 2 Employment Agreements The Company has entered into an employment agreement with Louis Friedman, President and CEO. The agreement provides for an annual base salary of $155,000 and eligibility to receive a bonus. In certain termination situations, the Company is liable to pay severance compensation to Mr. Friedman for up to nine months at his current salary. Legal Proceedings As of the date of this Quarterly Report, there are no material pending legal or governmental proceedings relating to our Company or properties to which we are a party, and to our knowledge there are no material proceedings to which any of our directors, executive officers or affiliates are a party adverse to us or which have a material interest adverse to us. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Mar. 31, 2024 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | NOTE 13. RELATED PARTY TRANSACTIONS The Company has a subordinated note payable to an officer of the Company who is also the wife of the Company’s CEO (Louis Friedman) and principal shareholder in the amount of $76,000 (see Note 9). Interest on the note during the nine months ended March 31, 2024 was accrued by the Company at the prevailing prime rate (which is currently 8.50%) and totaled $4,406. The accrued interest on the note as of March 31, 2024 was $39,449. This note is subordinate to all other credit facilities currently in place. On October 30, 2010, Mr. Friedman, loaned the Company $40,000 (see Note 9). Interest on the note during the nine months ended March 31, 2024 was accrued by the Company at the prevailing prime rate (which is currently 8.50%) and totaled $2,319. The accrued interest on the note as of March 31, 2024 was $6,652. This note is subordinate to all other credit facilities currently in place. The Company’s CEO, Louis Friedman, has personally guaranteed the repayment of the loan obligation to Advance Financial Corporation (see Note 10 – Line of Credit). In addition, Luvu has provided its corporate guarantees of the credit facility. On March 31, 2024, the balance owed under this line of credit was $1,103,049. On July 20, 2011, the Company issued an unsecured promissory note to an individual for $100,000. Terms of the promissory note call for monthly interest payments of $1,667 (equal to interest at 20% per annum), with the principal amount due in full on July 31, 2012; extended by the holder to July 31, 2021 under the same terms (see Note 8). This note was repaid in full on July 30, 2021 and replaced with a new note from an entity controlled by the same lender with interest payable monthly at 13.5%, principal due in full on July 31, 2023. This note was extended on July 30, 2023 with the same lender with interest payable monthly at 13.5%, principal due in full on July 31, 2025. Repayment of this promissory note is personally guaranteed by the Company’s CEO, Louis S. Friedman. On October 31, 2013, the Company issued an unsecured promissory note to an individual for $100,000. Terms of the promissory note call for monthly interest payments of $1,667 (equal to interest at 20% per annum) beginning on November 30, 2013, with the principal amount due in full on or before October 31, 2014, extended by the holder to October 31, 2021. (see Note 8) This note was repaid in full on October 31, 2021 and replaced with a new note from an entity controlled by the same lender with interest payable monthly at 13.5%, principal due in full on October 31, 2023. This note was extended in full on September 30, 2023 with the same lender with interest payable monthly at 13.5%, principal due in full on October 31, 2025. Repayment of the promissory note is personally guaranteed by the Company’s CEO, Louis Friedman. On May 1, 2012, an individual loaned the Company $200,000 with an interest rate of 20%. Interest on the loan is being paid monthly, with the principal due in full on May 1, 2013; then extended to May 1, 2021 (see Note 8). This note was repaid in full on April 30, 2021 and extended with the same lender with interest payable monthly at 13.5%, principal due in full on May 1, 2023. This note was repaid in full on April 30, 2023 and replaced with a new note from an entity controlled by the same lender with interest payable monthly at 13.5%, principal due in full on May 1, 2025. Mr. Friedman has personally guaranteed the repayment of the loan obligation. The Company has drawn a cash advance on one unsecured lines of credit that is in the name of the Company and Louis S. Friedman. The terms of this unsecured line of credit calls for monthly payments of principal and interest, with interest at 13.2%. The aggregate amount owed on the unsecured line of credit was $3,097 at March 31, 2024 (see Note 11). The loan is personally guaranteed by the Company’s CEO, Louis S. Friedman. |
STOCKHOLDERS EQUITY
STOCKHOLDERS EQUITY | 9 Months Ended |
Mar. 31, 2024 | |
STOCKHOLDERS EQUITY | |
STOCKHOLDERS EQUITY | NOTE 14. STOCKHOLDERS’ EQUITY Options At March 31, 2024, the Company had the 2015 Stock Option Plan (the “2015 Plan”), which is shareholder-approved and under which 1,650,000 shares are reserved for issuance under the 2015 Plan until such Plan terminates on August 31, 2025. Under the 2015 Plan, eligible employees and certain independent consultants may be granted options to purchase shares of the Company’s common stock. The shares issuable under the 2015 Plan will either be shares of the Company’s authorized but previously unissued common stock or shares reacquired by the Company, including shares purchased on the open market. As of March 31, 2024, the number of shares available for issuance under the 2015 Plan was 450,000. The following table summarizes the Company’s stock option activities during the nine months ended March 31, 2024: Number of Shares Underlying Outstanding Options Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Intrinsic Value Options outstanding as of June 30, 2023 1,400,000 3.0 $ 0.14 $ 29,000 Granted 200,000 $ - 3,760 Exercised - $ - - Forfeited or expired (450,000 ) $ - - Options outstanding as of March 31, 2024 1,150,000 2.1 $ 0.12 $ 21,000 Options exercisable as of March 31, 2024 575,000 1.4 $ 0.09 $ 18,500 The aggregate intrinsic value in the table above is before applicable income taxes and represents the excess amount over the exercise price optionees would have received if all options had been exercised on the last business day of the period indicated, based on the Company’s closing stock price of $0.08 for such day. There were no stock options exercised during the nine months ended March 31, 2024. During the nine months ended March 31, 2023, 525,000 stock options were exercised. The following table summarizes the weighted average characteristics of outstanding stock options as of March 31, 2024: Outstanding Options Exercisable Options Exercise Prices Number of Shares Remaining Life (Years) Weighted Average Price Number of Shares Weighted Average Price $ .02 to $.03 400,000 0.5 $ 0.03 350,000 $ 0.03 $ .05 to $.10 - - $ - - $ - $ .15 to $.20 700,000 2.9 $ 0.16 200,000 $ 0.16 $ .30 50,000 2.4 $ 0.30 25,000 0.30 Total stock options 1,150,000 2.1 $ 0.12 575,000 $ 0.09 Stock-based compensation We account for stock-based compensation to employees in accordance with FASB ASC 718, Compensation – Stock Compensation Stock option-based compensation expense recognized in the consolidated statements of operations for the nine months ended March 31, 2024 and 2023 are based on awards ultimately expected to vest, and is reduced for estimated forfeitures. The following table summarizes stock option-based compensation expense by line item in the Consolidated Statements of Operations, all relating to the Plans: Three Months Ended March 31, Nine Months Ended March 31, 2024 2023 2024 2023 ($ in thousands) Cost of Goods Sold $ 2 $ 1 $ 4 $ 3 Other Selling and Marketing 8 4 13 11 General and Administrative (4 ) 7 (6 ) 20 Total Stock-based Compensation Expense $ 6 $ 12 $ 11 $ 34 As of March 31, 2024, the Company’s total unrecognized compensation cost was $58,115 which will be recognized over the weighted average vesting period of approximately twenty-three months. Warrants As of March 31, 2024 and 2023, there were no warrants outstanding. Common Stock The Company’s authorized common stock was 175,000,000 shares at March 31, 2024 and June 30, 2023. Common shareholders are entitled to dividends if and when declared by the Company’s Board of Directors, subject to preferred stockholder dividend rights. At March 31, 2024, the Company had reserved the following shares of common stock for issuance: March 31, 2024 Shares of common stock reserved for issuance under the 2015 Plan 1,150,000 Shares of common stock issuable upon conversion of the Preferred Stock 4,300,000 Total shares of common stock equivalents 5,450,000 Preferred Stock On February 18, 2011, the Company filed an amendment to its Articles of Incorporation, effective February 9, 2011, authorizing the issuance of preferred stock and the Company now has 10,000,000 authorized shares of preferred stock, par value $.0001 per share, of which 4,300,000 shares have been designated and issued as Series A Convertible Preferred Stock. Each share of Series A Convertible Preferred Stock is convertible into one share of common stock and has a liquidation preference of $.2325 ($1,000,000 in the aggregate). Liquidation payments to the preferred holders have priority and are made in preference to any payments to the holders of common stock. In addition, each share of Series A Convertible Preferred Stock is entitled to the number of votes equal to the result of: (i) the number of shares of common stock of the Company issued and outstanding at the time of such vote multiplied by 1.01; divided by (ii) the total number of Series A Convertible Preferred Shares issued and outstanding at the time of such vote. At each meeting of shareholders of the Company with respect to any and all matters presented to the shareholders of the Company for their action or consideration, including the election of directors, holders of Series A Convertible Preferred Shares shall vote together with the holders of common shares as a single class. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Mar. 31, 2024 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE 15. SUBSEQUENT EVENTS On April 1, 2024, the Company issued Christopher Knauf, the Chief Financial Officer and Controller of the Company, 200,000 stock options and an additional 200,000 will be granted on July 1,2024. The initial 200,000 stock options are exercisable at $0.08 per share. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Mar. 31, 2024 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation | These consolidated financial statements include the accounts and operations of our wholly owned operating subsidiaries, OneUp and Foam Labs. Intercompany accounts and transactions have been eliminated in consolidation. Certain prior period amounts have been reclassified to conform to the current year presentation. The accompanying consolidated financial statements have been prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. These consolidated financial statements and notes should be read in conjunction with the Company’s consolidated financial statements contained in the Company’s 2023 10-K. |
Use of Estimates | The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions in determining the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Significant estimates in these consolidated financial statements include estimates of: income taxes; tax valuation reserves; allowances for doubtful accounts; inventory valuation and allowances; share-based compensation; and useful lives for depreciation and amortization. Actual results could differ materially from these estimates. |
Revenue Recognition | We record revenue based on the five-step model which includes: (1) identifying the contract with the customer; (2) identifying the performance obligations in the contract; (3) determining the transaction price; (4) allocating the transaction price to the performance obligations; and (5) recognizing revenue when the performance obligations are satisfied. Substantially all of our revenue is generated by fulfilling orders for the purchase of manufactured products and product purchased for resale to retailers, wholesalers, or direct to consumers via online channels, with each order considered to be a distinct performance obligation. These orders may be formal purchase orders, verbal phone orders, e-mail orders or orders received online. Shipping and handling activities for which we are responsible under the terms and conditions of the order are not accounted for as performance obligations but as fulfillment costs. These activities are required to fulfill our promise to transfer the goods and are expensed when revenue is recognized. The impact of this policy election is insignificant as it aligns with our current practice. Revenue is measured as the net amount of consideration expected to be received in exchange for fulfilling a performance obligation. We have elected to exclude sales, use and similar taxes from the measurement of the transaction price. The impact of this policy election is insignificant, as it aligns with our current practice. The amount of consideration expected to be received and revenue recognized includes estimates of variable consideration, which includes costs for trade promotion programs, coupons, returns and early payment discounts. Such estimates are calculated using historical averages adjusted for any expected changes due to current business conditions and experience. We review and update these estimates at the end of each reporting period and the impact of any adjustments are recognized in the period the adjustments are identified. In assessing whether collection of consideration from a customer is probable, we consider the customer's ability and intent to pay that amount of consideration when it is due. Payment of invoices is due as specified in the underlying customer agreement, typically 30 days from the invoice date, which occurs on the date of transfer of control of the products to the customer. Revenue is recognized at the point in time that control of the ordered products is transferred to the customer. Generally, this occurs when the product is delivered, or in some cases, picked up from one of our distribution centers by the customer. |
Deferred revenues | Deferred revenues are recorded when the Company has received consideration (i.e. advance payment) before satisfying its performance obligations. Deferred revenues primarily relate to gift cards purchased, but not used, prior to the end of the fiscal period. Our total deferred revenue as of March 31, 2024 was $19,254 and was included in “Other accrued liabilities” on our consolidated balance sheets. The deferred revenue balance as of March 31, 2023 was $18,272. |
Cost of Goods Sold | Cost of goods sold includes raw materials, labor, manufacturing overhead, and royalty expense. |
Cash and Cash Equivalents | For purposes of reporting cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. |
Allowance for Doubtful Accounts | We maintain an allowance for doubtful accounts to reflect our estimate of current and past due receivable balances that may not be collected. The allowance for doubtful accounts is based upon our assessment of the collectability of specific customer accounts, the aging of accounts receivable and our history of bad debts. We believe that the allowance for doubtful accounts is adequate to cover anticipated losses in the receivable balance under current conditions. However, significant deterioration in the financial condition of our customers, resulting in an impairment of their ability to make payments, could materially change these expectations and an additional allowance may be required. The following is a summary of Accounts Receivable as of March 31, 2024 and June 30, 2023. March 31, 2024 June 30, 2023 (unaudited) (in thousands) Accounts receivable $ 1,299 $ 1,107 Allowance for doubtful accounts (1 ) (1 ) Allowance for discounts and returns — (55 ) Total accounts receivable, net $ 1,298 $ 1,051 |
Inventories and Inventory Allowances | Inventories are stated at the lower of cost or net realizable value. Cost is determined using the first-in, first-out (FIFO) method. Net realizable value is defined as sales price less cost to dispose and a normal profit margin. Inventory costs include materials, labor, depreciation and overhead. The Company establishes allowances for excess and obsolete inventory, based on prevailing circumstances and judgment for consideration of current events, such as economic conditions, that may affect inventory. The allowances required to record inventory at lower of cost or net realizable value may be adjusted in response to changing conditions. |
Concentration of Credit Risk | The Company maintains its cash accounts with banks located in Georgia. The total cash balances are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 per bank. The Company had bank balances on deposit at March 31, 2024 that exceeded the balance insured by the FDIC by $822,772. Accounts receivable is typically unsecured and is derived from revenue earned from customers primarily located in North America and Europe. During the three and nine months ended March, 31 2024, we purchased 24.6% of total inventory purchases from one vendor. During the fiscal year ended June 30, 2023, we purchased 35% of total inventory purchases from one vendor. As of March 31, 2024, one of the Company’s customers represent 44% of the total accounts receivables. As of June 30, 2023, two of the Company’s customers represent 35% and 12% of the total accounts receivables, respectively. For the nine months ended March 31, 2024, sales to and through Amazon accounted for 39% of our net sales. |
Fair Value of Financial Instruments | At March 31, 2024 and June 30, 2023, our financial instruments included cash and cash equivalents, accounts receivable, accounts payable, short-term debt, and other long-term debt. The fair values of these financial instruments approximated their carrying values based on either their short maturity or current terms for similar instruments. The Company measures the fair value of its assets and liabilities under the guidance of Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures ASC 820 clarifies that fair value is an exit price, representing the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants based on the highest and best use of the asset or liability. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. ASC 820 requires the Company to use valuation techniques to measure fair value that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized as follows: Level 1 Level 2 Level 3 The valuation techniques that may be used to measure fair value are as follows: A. Market approach B. Income approach C. Cost approach |
Advertising Costs | Advertising costs are expensed in the period when the advertisements are first aired or distributed to the public. Prepaid Advertising (included in prepaid expenses) was $336 at March 31, 2024 and $525 at March 31, 2023. Advertising expense for the nine months ended March 31, 2024 and 2023 was $785,081 and $557,114, respectively. |
Research and Development | Research and development expenses for new products are expensed as they are incurred. Expenses for new product development totaled $115,467 and $100,326 for the nine months ended March 31, 2024 and 2023, respectively. Research and development costs are included in general and administrative expense. |
Property and Equipment | Property and equipment are stated at cost. Depreciation and amortization are computed using the straight-line method over estimated service lives for financial reporting purposes of 2-10 years. Expenditures for major renewals and betterments that extend the useful lives of property and equipment are capitalized. Expenditures for maintenance and repairs are charged to expense as incurred. When properties are disposed of, the related costs and accumulated depreciation are removed from the respective accounts, and any gain or loss is recognized currently. |
Impairment or Disposal of Long Lived Assets | Long-lived assets to be held are reviewed for events or changes in circumstances which indicate that their carrying value may not be recoverable. They are tested for recoverability using undiscounted cash flows to determine whether or not impairment to such value has occurred as required by Financial Accounting Standards Board (“ FASB”) ASC Topic No. 360, Property, Plant, and Equipment |
Operating Leases | On November 2, 2020, the Company entered into an agreement with its landlord on a new lease for the current facilities for six years and two months, beginning January 1, 2021. The new lease includes two months of rent abatement totaling $103,230. Under the new lease, the monthly rent on the facility is $51,615 with annual escalations of 3% with the final two months of rent at $61,605. In addition, the Company will pay the landlord a 2% property management fee. The rent expense for the nine months ended March 31, 2024 and 2023 was $497,502 and $483,183, respectively. Under ASC 842, which was adopted July 1, 2019, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present. Most leases with a term greater than one year are recognized on the balance sheet as right-of-use assets, lease liabilities and, if applicable, long-term lease liabilities. The Company elected not to recognize leases with a term less than one year on its balance sheet. Operating lease right-of-use (ROU) assets and their corresponding lease liabilities are recorded based on the present value of lease payments over the expected remaining lease term. The interest rate implicit in lease contracts is typically not readily determinable. As a result, the Company utilizes its incremental borrowing rates, which are the rates incurred to borrow on a collateralized basis over a similar term, an amount equal to the lease payments in a similar economic environment. In accordance with the guidance in ASU 2016-02, components of a lease should be split into three categories: lease components (e.g. land, building, etc.), non-lease components (e.g. common area maintenance, consumables, etc.), and non-components (e.g. property taxes, insurance, etc.) Then the fixed and in-substance fixed contract consideration (including any related to non-components) must be allocated based on fair values to the lease components and non-lease components. Although separation of lease and non-lease components is required, the Company elected the practical expedient to not separate lease and non-lease components. The lease component results in an operating right-of-use asset being recorded on the balance sheet and amortized on a straight-line basis as lease expense. See Note 12 for details. Under prior guidance ASC 840, rent expense and lease incentives from operating leases were recognized on a straight-line basis over the lease term. The difference between rent expense recognized and rental payments was recorded as deferred rent in the accompanying consolidated balance sheets. |
Segment Information | We have identified three reportable sales channels: Direct, Wholesale Other Direct Wholesale Wholesale Other Direct The following is a summary of sales results for the Direct, Wholesale Other Three Months Ended March 31, 2024 Three Months Ended March 31, 2023 % Change (in thousands) Net Sales by Channel: Direct $ 1,632 $ 1,913 (15 )% Wholesale $ 4,155 $ 4,819 (14 )% Other $ 136 $ 171 (21 ) % Total Net Sales $ 5,923 $ 6,903 (14 )% Three Months Ended Margin Three Months Ended Margin $ % March 31, 2024 % March 31, 2023 % Change (in thousands) (in thousands) Gross Profit by Channel: Direct $ 757 46 % $ 923 48 % (18 )% Wholesale $ 1,040 25 % $ 1,216 25 % (14 )% Other $ (158 ) — % $ (370 ) — % 57 % Total Gross Profit $ 1,639 28 % $ 1,769 26 % (7 )% Nine Months Ended March 31, 2024 Nine Months Ended March 31, 2023 % Change (in thousands) Net Sales by Channel: Direct $ 4,992 $ 6,824 (27 )% Wholesale $ 13,406 $ 15,705 (15 )% Other $ 437 $ 569 (23 )% Total Net Sales $ 18,835 $ 23,098 (19 )% Nine Months Ended March 31, 2024 Margin % Nine Months Ended Nine 31, 2023 Margin % % Change (in thousands) (in thousands) Gross Profit by Channel: Direct $ 2,247 45 % $ 3,178 47 % (29 )% Wholesale $ 3,441 26 % $ 4,074 26 % (16 )% Other $ (648 ) — % $ (1,251 ) — % — % Total Gross Profit $ 5,040 27 % $ 6,001 26 % (16 )% |
Recent accounting pronouncements | From time to time, new accounting pronouncements are issued by FASB or other standard setting bodies that are adopted by the Company as of the specified effective date. All other newly issued accounting pronouncements, but not yet effective, have been deemed either immaterial or not applicable. |
Net Income / (Loss) Per Share | In accordance with ASC 260, “Earnings Per Share”, basic net income per share is computed by dividing the net income available to common stockholders for the period by the weighted average number of common shares outstanding during the period. Diluted net income per share is computed by dividing net income available to common stockholders by the weighted average number of common and common equivalent shares outstanding during the period plus the effect of stock options using the treasury stock method. As of March 31, 2024 and 2023, the common stock equivalents did not have any effect on net income per share. March 31, 2024 2023 Common stock options – 2015 Plan 1,150,000 1,400,000 Convertible preferred stock 4,300,000 4,300,000 Total 5,450,000 5,700,000 |
Income Taxes | We utilize the asset and liability method of accounting for income taxes. We recognize deferred tax liabilities or assets for the expected future tax consequences of temporary differences between the book and tax basis of assets and liabilities. We regularly assess the likelihood that our deferred tax assets will be recovered from future taxable income. We consider projected future taxable income and ongoing tax planning strategies in assessing the amount of the valuation allowance necessary to offset our deferred tax assets that will not be recoverable. We have recorded and continue to carry a full valuation allowance against our gross deferred tax assets that will not reverse against deferred tax liabilities within the scheduled reversal period. If we determine in the future that it is more likely than not that we will realize all or a portion of our deferred tax assets, we will adjust our valuation allowance in the period we make the determination. We expect to provide a full valuation allowance on our future tax benefits until we can sustain a level of profitability that demonstrates our ability to realize these assets. On November 27, 2023 the Company received a notice from the Internal Revenue Service of Taxes and Penalties due of approximately $125,000. The Company believes once Net Operating Losses and tax credits are applied the penalties and interest will be reduced to approximately $38,000 therefore the Company has accrued $38,000 for estimated penalties and interest as of March 31, 2024. On January 22, 2024, the Company received a notice from the Georgia Department of Revenue for Tax and Penalties due of approximately $104,000. The Company believes once Net Operating Losses and tax credit are applied the liability will be reduced to penalties and interest of approximately $6,000. Therefore, the Company has accrued $6,000 for estimated penalties and interest as of March 31, 2024. |
Stock Based Compensation | We account for stock-based compensation to employees in accordance with FASB ASC 718, Compensation – Stock Compensation. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Mar. 31, 2024 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of accounts receivable | March 31, 2024 June 30, 2023 (unaudited) (in thousands) Accounts receivable $ 1,299 $ 1,107 Allowance for doubtful accounts (1 ) (1 ) Allowance for discounts and returns — (55 ) Total accounts receivable, net $ 1,298 $ 1,051 |
Schedule of segment Information | Three Months Ended March 31, 2024 Three Months Ended March 31, 2023 % Change (in thousands) Net Sales by Channel: Direct $ 1,632 $ 1,913 (15 )% Wholesale $ 4,155 $ 4,819 (14 )% Other $ 136 $ 171 (21 ) % Total Net Sales $ 5,923 $ 6,903 (14 )% Three Months Ended Margin Three Months Ended Margin $ % March 31, 2024 % March 31, 2023 % Change (in thousands) (in thousands) Gross Profit by Channel: Direct $ 757 46 % $ 923 48 % (18 )% Wholesale $ 1,040 25 % $ 1,216 25 % (14 )% Other $ (158 ) — % $ (370 ) — % 57 % Total Gross Profit $ 1,639 28 % $ 1,769 26 % (7 )% Nine Months Ended March 31, 2024 Nine Months Ended March 31, 2023 % Change (in thousands) Net Sales by Channel: Direct $ 4,992 $ 6,824 (27 )% Wholesale $ 13,406 $ 15,705 (15 )% Other $ 437 $ 569 (23 )% Total Net Sales $ 18,835 $ 23,098 (19 )% Nine Months Ended March 31, 2024 Margin % Nine Months Ended Nine 31, 2023 Margin % % Change (in thousands) (in thousands) Gross Profit by Channel: Direct $ 2,247 45 % $ 3,178 47 % (29 )% Wholesale $ 3,441 26 % $ 4,074 26 % (16 )% Other $ (648 ) — % $ (1,251 ) — % — % Total Gross Profit $ 5,040 27 % $ 6,001 26 % (16 )% |
Schedule of Potential dilutive securities | March 31, 2024 2023 Common stock options – 2015 Plan 1,150,000 1,400,000 Convertible preferred stock 4,300,000 4,300,000 Total 5,450,000 5,700,000 |
INVENTORIES NET (Tables)
INVENTORIES NET (Tables) | 9 Months Ended |
Mar. 31, 2024 | |
INVENTORIES NET | |
Schedule of inventories | March 31, 2024 June 30, 2023 (unaudited) (in thousands) Raw materials $ 1,625 $ 1,926 Work in process 406 507 Finished goods 1,689 2,021 Total inventories 3,720 4,454 Allowance for excess and obsolete inventory (252 ) (252 ) Total inventories, net of allowance $ 3,468 $ 4,202 |
EQUIPMENT AND LEASEHOLD IMPRO_2
EQUIPMENT AND LEASEHOLD IMPROVEMENTS (Tables) | 9 Months Ended |
Mar. 31, 2024 | |
EQUIPMENT AND LEASEHOLD IMPROVEMENTS | |
Equipment and Leasehold Improvements | March 31, 2024 June 30, 2023 Estimated Useful Life (unaudited) (in thousands) Factory equipment $ 4,737 $ 4,356 2-10 years Computer equipment and software 1,173 1,171 5-7 years Office equipment and furniture 205 205 5-7 years Leasehold improvements 480 480 6 years Project in process — 320 Subtotal 6,595 6,532 Accumulated depreciation (4,653 ) (4,346 ) Equipment and leasehold improvements, net $ 1,942 $ 2,186 |
OTHER ACCRUED LIABILITIES (Tabl
OTHER ACCRUED LIABILITIES (Tables) | 9 Months Ended |
Mar. 31, 2024 | |
OTHER ACCRUED LIABILITIES | |
Schedule of Accrued Liabilities | March 31, 2024 June 30, 2023 (unaudited) (in thousands) Accrued compensation $ 473 $ 302 Accrued expenses and interest 161 114 Other accrued liabilities $ 634 $ 416 |
CURRENT AND LONGTERM DEBT SUM_2
CURRENT AND LONGTERM DEBT SUMMARY (Tables) | 9 Months Ended |
Mar. 31, 2024 | |
CURRENT AND LONGTERM DEBT SUMMARY | |
Schedule Of Current and Long-term Debt | March 31, 2024 June 30, 2023 (unaudited) Current debt: (in thousands) Unsecured lines of credit (Note 11) $ 3 $ 13 Line of credit (Note 10) 1,103 1,039 Short-term unsecured notes payable (Note 8) — 200 Current portion of equipment notes payable (Note 12) 379 392 Current portion of finance leases payable (Note 12) 11 15 Total current debt 1,496 1,659 Long-term debt: Unsecured notes payable (Note 8) 400 200 Finance leases payable (Note 12) 2 9 Equipment notes payable (Note 12) 544 824 Notes payable – related party (Note 9) 116 116 Total long-term debt $ 1,062 $ 1,148 |
UNSECURED NOTES PAYABLE (Tables
UNSECURED NOTES PAYABLE (Tables) | 9 Months Ended |
Mar. 31, 2024 | |
UNSECURED NOTES PAYABLE | |
Schedule Of Unsecured Notes Payable | March 31, 2024 June 30, 2023 (unaudited) Current unsecured notes payable: (in thousands) 13.5% Unsecured note, interest only, due July 31, 2023 (3) - 100 13.5% Unsecured note, interest only, due October 31, 2023 (1) - 100 Total current unsecured notes payable - 200 Long-term unsecured notes payable: 13.5% Unsecured note, interest only, due May 1, 2025 (2) 200 200 13.5% Unsecured note, interest only, due July 31, 2025 (3) 100 - 13.5% Unsecured note, interest only, due October 31, 2025 (1) 100 - Total long-term unsecured notes payable 400 200 Total unsecured notes payable $ 400 $ 400 |
NOTES PAYABLE RELATED PARTY (Ta
NOTES PAYABLE RELATED PARTY (Tables) | 9 Months Ended |
Mar. 31, 2024 | |
NOTES PAYABLE RELATED PARTY | |
Schedule Of Related Party Transactions | March 31, 2024 June 30, 2023 (unaudited) (in thousands) Unsecured note payable to an officer, with interest at 8.50%, due on July 1, 2025 $ 40 $ 40 Unsecured note payable to an officer, with interest at 8.50%, due on July 1, 2025 76 76 Total unsecured notes payable 116 116 Less: current portion - - Long-term unsecured notes payable $ 116 $ 116 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended |
Mar. 31, 2024 | |
COMMITMENTS AND CONTINGENCIES | |
Schedule of Operating Leases | Operating leases Balance Sheet Classification (in thousands) Right-of-use assets Operating lease right-of-use assets, net $ 1,622 Current lease liabilities Operating lease liabilities $ - Non-current lease liabilities Long-term operating lease liabilities 1,764 Total lease liabilities $ 1,764 |
Schedule of maturities of lease liabilities | Payments (in thousands) Remainder of 2024 $ 143 2025 721 2026 762 2027 and thereafter 528 Total undiscounted lease payments 2,154 Less: Present value discount (390 ) Total lease liability balance $ 1,764 |
Schedule of Minimum Future Equipment Notes Payable | Years ending June 30, (in thousands) Remainder of 2024 113 2025 427 2026 309 2027 130 2028 39 Future Minimum Note Payable Payments 1,018 Less Amount Representing Interest (95 ) Present Value of Minimum Note Payable Payments 923 Less Current Portion (379 ) Long-Term Obligations under Equipment Notes Payable $ 544 |
Schedule of Finance Leases Payable | Year ending June 30, (in thousands) Remainder of 2024 4 2025 6 2026 3 Future Minimum Finance Lease Payable Payments $ 13 Less Amount Representing Interest 0 Present Value of Minimum Finance Lease Payable Payments 13 Less Current Portion (11 ) Long-Term Obligations under Finance Lease Payable $ 2 |
STOCKHOLDERS EQUITY (Tables)
STOCKHOLDERS EQUITY (Tables) | 9 Months Ended |
Mar. 31, 2024 | |
STOCKHOLDERS EQUITY | |
Schedule of Stock Option Activites | Number of Shares Underlying Outstanding Options Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Intrinsic Value Options outstanding as of June 30, 2023 1,400,000 3.0 $ 0.14 $ 29,000 Granted 200,000 $ - 3,760 Exercised - $ - - Forfeited or expired (450,000 ) $ - - Options outstanding as of March 31, 2024 1,150,000 2.1 $ 0.12 $ 21,000 Options exercisable as of March 31, 2024 575,000 1.4 $ 0.09 $ 18,500 |
Schedule of Weighted average stock options | Outstanding Options Exercisable Options Exercise Prices Number of Shares Remaining Life (Years) Weighted Average Price Number of Shares Weighted Average Price $ .02 to $.03 400,000 0.5 $ 0.03 350,000 $ 0.03 $ .05 to $.10 - - $ - - $ - $ .15 to $.20 700,000 2.9 $ 0.16 200,000 $ 0.16 $ .30 50,000 2.4 $ 0.30 25,000 0.30 Total stock options 1,150,000 2.1 $ 0.12 575,000 $ 0.09 |
Schedule of Stock Options Compensation Expense | Three Months Ended March 31, Nine Months Ended March 31, 2024 2023 2024 2023 ($ in thousands) Cost of Goods Sold $ 2 $ 1 $ 4 $ 3 Other Selling and Marketing 8 4 13 11 General and Administrative (4 ) 7 (6 ) 20 Total Stock-based Compensation Expense $ 6 $ 12 $ 11 $ 34 |
Schedule of Common Stock Equivalents | March 31, 2024 Shares of common stock reserved for issuance under the 2015 Plan 1,150,000 Shares of common stock issuable upon conversion of the Preferred Stock 4,300,000 Total shares of common stock equivalents 5,450,000 |
ORGANIZATION AND NATURE OF BU_2
ORGANIZATION AND NATURE OF BUSINESS (Details Narrative) | Mar. 31, 2024 |
ORGANIZATION AND NATURE OF BUSINESS | |
Consolidated sales percentage | 30% |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Jun. 30, 2023 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Accounts receivable | $ 1,299 | $ 1,107 |
Allowance for doubtful accounts | (1) | (1) |
Allowance for discounts and returns | 0 | 55 |
Total accounts receivable, net | $ 1,298 | $ 1,051 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Mar. 31, 2024 | Mar. 31, 2023 | |
Net Sales | $ 5,923 | $ 6,903 | $ 18,835 | $ 23,098 |
Gross profit | 1,639 | 1,769 | 5,040 | 6,001 |
Direct [member] | ||||
Net Sales | 1,632 | 1,913 | 4,992 | 6,824 |
Gross profit | $ 757 | $ 923 | $ 2,247 | $ 3,178 |
% Change in Sales | (15.00%) | (27.00%) | ||
Gross Profit Margin | 46% | 48% | 45% | 47% |
% Change in Gross Profit | 0% | (18.00%) | (29.00%) | |
Wholesale [Member] | ||||
Net Sales | $ 4,155 | $ 4,819 | $ 13,406 | $ 15,705 |
Gross profit | $ 1,040 | $ 1,216 | $ 3,441 | $ 4,074 |
% Change in Sales | (14.00%) | (15.00%) | ||
Gross Profit Margin | 25% | 25% | 26% | 26% |
% Change in Gross Profit | (14.00%) | (16.00%) | ||
Other [Member] | ||||
Net Sales | $ 136 | $ 171 | $ 437 | $ 569 |
Gross profit | $ (158) | $ (370) | $ (648) | $ (1,251) |
% Change in Sales | (21.00%) | (23.00%) | ||
Gross Profit Margin | 0% | 0% | 0% | 0% |
% Change in Gross Profit | 57% | 0% | ||
Total [member] | ||||
Net Sales | $ 5,923 | $ 6,903 | $ 18,835 | $ 23,098 |
Gross profit | $ 1,639 | $ 1,769 | $ 5,040 | $ 6,001 |
% Change in Sales | (14.00%) | (19.00%) | ||
Gross Profit Margin | 28% | 26% | 27% | 26% |
% Change in Gross Profit | (7.00%) | (16.00%) |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) - shares | 6 Months Ended | 9 Months Ended |
Dec. 31, 2022 | Mar. 31, 2024 | |
Anti-dilutive Securities | 5,700,000 | 5,450,000 |
Stock options - 2015 Plan [Member] | ||
Anti-dilutive Securities | 1,400,000 | 1,150,000 |
Convertible Preferred Stock [Member] | ||
Anti-dilutive Securities | 4,300,000 | 4,300,000 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Mar. 31, 2024 | Mar. 31, 2023 | Mar. 31, 2024 | Mar. 31, 2023 | Jun. 30, 2023 | Nov. 02, 2020 | |
Deferred Revenue | $ 19,254 | $ 18,272 | $ 19,254 | $ 18,272 | ||
Bad debt expense | 135,000 | $ 90,000 | 322,000 | 262,000 | ||
Total cash at banks | 250,000 | 250,000 | ||||
FDIC balance limit excess | $ 822,772 | 822,772 | ||||
Advertising Expense | 785,081 | 557,114 | ||||
Prepaid Advertising | 336 | 525 | ||||
New product development | 115,467 | 100,326 | ||||
Net Operating Losses and tax credit | 0 | |||||
Rent Expense | $ 497,502 | $ 483,183 | ||||
Rental abatement | $ 103,230 | |||||
Final two months rent | 61,605 | |||||
New monthly rent | $ 51,615 | |||||
Annual escalations in rent | 3% | |||||
Property management fee | 2% | |||||
Sales | Amazon | ||||||
Concetration percentage | 39% | |||||
One Vendor | Inventory Purchases | ||||||
Concetration percentage | 24.60% | 24.60% | 35% | |||
Customer 1 | Accounts Receivable | ||||||
Concetration percentage | 44% | 35% | ||||
Customer 2 | Accounts Receivable | ||||||
Concetration percentage | 44% | 12% | ||||
Minimum | ||||||
Estimated useful life | 2 years | |||||
Maximum | ||||||
Estimated useful life | 10 years | |||||
Internal Revenue Service Taxes | ||||||
Taxes and Penalties due | $ 125,000 | |||||
Net Operating Losses and tax credit | $ 38,000 | 38,000 | ||||
Accrued for estimated penalties and interests | 38,000 | 38,000 | ||||
Georgia Department of Revenue of Taxes | ||||||
Taxes and Penalties due | 104,000 | |||||
Net Operating Losses and tax credit | 6,000 | 6,000 | ||||
Accrued for estimated penalties and interests | $ 6,000 | $ 6,000 |
INVENTORIES NET (Details)
INVENTORIES NET (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Jun. 30, 2023 |
INVENTORIES NET | ||
Raw materials | $ 1,625 | $ 1,926 |
Work in Process | 406 | 507 |
Finished Goods | 1,689 | 2,021 |
Total inventories | 3,720 | 4,454 |
Allowance for excess and obsolete inventory | (252) | (252) |
Total inventories, net of allowance | $ 3,468 | $ 4,202 |
EQUIPMENT AND LEASEHOLD IMPRO_3
EQUIPMENT AND LEASEHOLD IMPROVEMENTS (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Mar. 31, 2024 | Jun. 30, 2023 | |
Property and Equipment, gross | $ 6,595 | $ 6,532 |
Accumulated depreciation and amortization | (4,653) | (4,346) |
Property and Equipment, net | 1,942 | 2,186 |
Factory Equipment | ||
Property and Equipment, gross | $ 4,737 | 4,356 |
Factory Equipment | Minimum | ||
Estimated Useful Life Depreciation life | 2 years | |
Factory Equipment | Maximum | ||
Estimated Useful Life Depreciation life | 10 years | |
Computer equipment and software | ||
Property and Equipment, gross | $ 1,173 | 1,171 |
Computer equipment and software | Minimum | ||
Estimated Useful Life Depreciation life | 5 years | |
Computer equipment and software | Maximum | ||
Estimated Useful Life Depreciation life | 7 years | |
Office equipment and furniture | ||
Property and Equipment, gross | $ 205 | 205 |
Office equipment and furniture | Minimum | ||
Estimated Useful Life Depreciation life | 5 years | |
Office equipment and furniture | Maximum | ||
Estimated Useful Life Depreciation life | 7 years | |
Leasehold Improvements | ||
Property and Equipment, gross | $ 480 | 480 |
Estimated Useful Life Depreciation life | 6 years | |
Projects in process | ||
Property and Equipment, gross | $ 0 | $ 320 |
EQUIPMENT AND LEASEHOLD IMPRO_4
EQUIPMENT AND LEASEHOLD IMPROVEMENTS (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Mar. 31, 2024 | Mar. 31, 2023 | |
EQUIPMENT AND LEASEHOLD IMPROVEMENTS | ||||
Depreciation and amortization expense | $ 103,874 | $ 88,902 | $ 306,840 | $ 263,755 |
OTHER ACCRUED LIABILITIES (Deta
OTHER ACCRUED LIABILITIES (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Jun. 30, 2023 |
OTHER ACCRUED LIABILITIES | ||
Accrued compensation | $ 473 | $ 302 |
Accrued expenses and interest | 161 | 114 |
Other accrued liabilities | $ 634 | $ 416 |
CURRENT AND LONGTERM DEBT SUM_3
CURRENT AND LONGTERM DEBT SUMMARY (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Jun. 30, 2023 |
Current debt: | ||
Unsecured lines of credit (Note 11) | $ 3 | $ 13 |
Lines of credit (Note 10) | 1,103 | 1,039 |
Short-term unsecured notes payable (Note 8) | 0 | 200 |
Current portion of equipment notes payable (Note 12) | 379 | 392 |
Current portion of finance leases payable (Note 12) | 11 | 15 |
Total current debt | 1,496 | 1,659 |
Long-term debt: | ||
Unsecured notes payable (Note 8) | 400 | 200 |
Equipment notes payable (Note 12) | 2 | 9 |
Finance leases payable (Note 12) | 544 | 824 |
Notes payable - related party | 116 | 116 |
Total long-term debt | $ 1,062 | $ 1,148 |
UNSECURED NOTES PAYABLE (Detail
UNSECURED NOTES PAYABLE (Details) - USD ($) | Mar. 31, 2024 | Jun. 30, 2023 |
Current unsecured notes payable | $ 0 | $ 200 |
Long-term unsecured notes payable | 400,000 | 200,000 |
Unsecured notes payable | 400,000 | 400,000 |
13.5% Unsecured Notes Payable [Member} | ||
Current unsecured notes payable | 0 | 100,000 |
Long-term unsecured notes payable | 200,000 | 200,000 |
13.5% Unsecured Notes Payable #1 [Member] | ||
Current unsecured notes payable | 0 | 100,000 |
Long-term unsecured notes payable | 100,000 | 0 |
13.5% Unsecured Notes Payable #2 [Member] | ||
Long-term unsecured notes payable | $ 100,000 | $ 0 |
UNSECURED NOTES PAYABLE (Deta_2
UNSECURED NOTES PAYABLE (Details Narrative) - USD ($) | 1 Months Ended | 9 Months Ended | |||
May 02, 2012 | Oct. 31, 2013 | Jul. 31, 2013 | Mar. 31, 2024 | Mar. 31, 2023 | |
Interest Rate | 2% | ||||
Note 2 | |||||
Note Face Amount | $ 200,000 | ||||
Interest Rate | 20% | ||||
Date of Maturity | May 01, 2023 | ||||
Interest payable monthly | 13.50% | 13.50% | |||
Note 1 | |||||
Note Face Amount | $ 100,000 | ||||
Interest Rate | 20% | ||||
Date of Maturity | Oct. 31, 2023 | ||||
Interest payable monthly | 13.50% | 13.50% | |||
Note 3 | |||||
Note Face Amount | $ 100,000 | ||||
Interest Rate | 20% | ||||
Date of Maturity | Jul. 31, 2023 | ||||
Interest payable monthly | 13.50% | 13.50% |
NOTES PAYABLE RELATED PARTY (De
NOTES PAYABLE RELATED PARTY (Details) - USD ($) | Mar. 31, 2024 | Jun. 30, 2023 |
Total unsecured notes payable | $ 116,000 | $ 116,000 |
Less: current portion | 0 | 0 |
Long-term unsecured notes payable | $ 116,000 | 116,000 |
Interest Rate | 2% | |
Related Party Note Payable 1 | ||
Unsecured notes payable | $ 40,000 | 40,000 |
Interest Rate | 8.50% | |
Related Party Note Payable 2 | ||
Unsecured notes payable | $ 76,000 | $ 76,000 |
Interest Rate | 8.50% |
LINE OF CREDIT (Details Narrati
LINE OF CREDIT (Details Narrative) - USD ($) | 9 Months Ended | |
Mar. 31, 2024 | May 24, 2011 | |
Collateral | 85% of eligible accounts receivable (as defined in the agreement) for the purpose of improving working capital | |
Monthly Service Fee | 125% | |
Interest Rate | 2% | |
Line of credit | $ 55,000 | |
Invetory Advance | ||
Line of credit | $ 1,103,049 | $ 1,200,000 |
Loan receviable | $ 500,000 |
UNSECURED LINES OF CREDIT (Deta
UNSECURED LINES OF CREDIT (Details Narrative) - USD ($) | Mar. 31, 2024 | Jun. 30, 2023 |
UNSECURED LINES OF CREDIT (Details Narrative) | ||
Amount owed | $ 3,097 | $ 12,806 |
Interest rate | 13.20% | |
Credit line | $ 55,000 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Jun. 30, 2023 |
Operating Leases | ||
Operating lease right-of-use assets, net | $ 1,622 | $ 1,913 |
Current lease liabilities | 471 | $ 396 |
Non-current lease liabilities | 1,764 | |
Total lease liabilities | $ 1,764 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES (Details 1) $ in Thousands | Mar. 31, 2024 USD ($) |
COMMITMENTS AND CONTINGENCIES | |
Remainder of 2024 | $ 143 |
2025 | 721 |
2026 | 762 |
2027 and thereafter | 528 |
Total undiscounted lease payments | 2,154 |
Less:Present value discount | (390) |
Total lease liability balance | $ 1,764 |
COMMITMENTS AND CONTINGENCIES_4
COMMITMENTS AND CONTINGENCIES (Details 2) $ in Thousands | Mar. 31, 2024 USD ($) |
COMMITMENTS AND CONTINGENCIES | |
Remainder of 2024 | $ 113 |
2025 | 427 |
2026 | 309 |
2027 | 130 |
2028 | 39 |
Future Minimum Note Payable Payments | 1,018 |
Less Amount Representing Interest | (95) |
Present Value of Minimum Note Payable Payments | 923 |
Less Current Portion | (379) |
Long-Term Obligations under Equipment Notes Payable | $ 544 |
COMMITMENTS AND CONTINGENCIES_5
COMMITMENTS AND CONTINGENCIES (Details 3) $ in Thousands | Mar. 31, 2024 USD ($) |
COMMITMENTS AND CONTINGENCIES | |
Remainder of 2024 | $ 4 |
2025 | 6 |
2026 | 3 |
Future Minimum Finance Lease Payable Payments | 13 |
Less Amount Representing Interest | 0 |
Present Value of Minimum Finance Lease Payable Payments | 13 |
Less Current Portion | (11) |
Long-Term Obligations under Finance Lease Payable | $ 2 |
COMMITMENTS AND CONTINGENCIES_6
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | 1 Months Ended | 9 Months Ended | ||
Feb. 02, 2022 | Jun. 22, 2020 | Mar. 31, 2024 | Feb. 01, 2022 | |
Annual base salary | $ 155,000 | |||
Weighted average remaining lease term | 4 years | |||
Weighted average discount rate | 14.49% | |||
Equipment notes payable | $ 2,290,061 | |||
Finance Leases Payable [Member] | ||||
Imputed interest rates | 3.75% | 8.09% | ||
Finance lease agreement | $ 34,761 | $ 22,862 | ||
Finance lease agreement term | 48 months | 48 months | ||
Total cost of approximately | $ 58,152 | |||
monthly payment | $ 850 | $ 514 | ||
Minimum | ||||
Imputed interest rates | 7.29% | |||
Maximum | ||||
Imputed interest rates | 11.30% |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 1 Months Ended | 9 Months Ended | ||
May 02, 2012 | Oct. 31, 2013 | Jul. 20, 2011 | Mar. 31, 2024 | |
Interest Rate | 2% | |||
Line of credit | $ 55,000 | |||
Note Payable to Wife of CEO | ||||
Interest Rate | 8.50% | |||
Note Face Amount | $ 76,000 | |||
Prevailing prime rate | 4,406 | |||
Acrrued Interest | $ 39,449 | |||
October 30, 2010 Note | ||||
Interest Rate | 8.50% | |||
Note Face Amount | $ 40,000 | |||
Prevailing prime rate | 2,319 | |||
Acrrued Interest | 6,652 | |||
Line of credit | $ 1,103,049 | |||
July 20, 2011 Note | ||||
Interest Rate | 20% | |||
Note Face Amount | $ 100,000 | |||
Interest payable monthly | 13.50% | 13.50% | ||
Interest Payment | $ 1,667 | |||
Date of Maturity | Jul. 30, 2023 | |||
Extended Date of Maturity | Jul. 31, 2025 | Jul. 31, 2021 | ||
October 31, 2013 | ||||
Interest Rate | 20% | |||
Note Face Amount | $ 100,000 | |||
Interest payable monthly | 13.50% | 13.50% | ||
Interest Payment | $ 1,667 | |||
Date of Maturity | Oct. 31, 2025 | Sep. 30, 2023 | ||
Extended Date of Maturity | Oct. 31, 2021 | |||
May 1, 2012 Note | ||||
Interest Rate | 20% | |||
Note Face Amount | $ 200,000 | |||
Interest payable monthly | 13.50% | 13.50% | ||
Date of Maturity | May 01, 2025 | |||
Extended Date of Maturity | May 01, 2021 | |||
Cash Advance from Company and CEO | ||||
Interest Rate | 13.20% | |||
Line of credit | $ 3,097 |
STOCKHOLDERS EQUITY (Details)
STOCKHOLDERS EQUITY (Details) | 9 Months Ended |
Mar. 31, 2024 USD ($) $ / shares shares | |
STOCKHOLDERS EQUITY | |
Options outstanding | 1,400,000 |
Options, Granted | 200,000 |
Options, Forfeited or expired | (450,000) |
Options Outstanding, Ending Balance | 1,150,000 |
Options Outstanding, Exercisable | 575,000 |
Weighted Average Remaining Contractual Life (Years) | |
Weighted Average Remaining Contractual Life, Outstanding, Beginning Balance | 3 years |
Weighted Average Remaining Contractual Life, Ending Balance | 2 years 1 month 6 days |
Weighted Average Remining Contractual Life, Exercisable | 1 year 4 months 24 days |
Weighted Average Exercise Price | |
Weighted Average Exercise Price, Outstanding, Begining Balance | $ / shares | $ 0.14 |
Weighted Average Exercise Price, Outstanding, Ending Balance | $ / shares | 0.12 |
Weighted Average Exercise Price, Outstanding, Exercisable | $ / shares | $ 0.09 |
Aggregate Intrinsic Value | |
Aggregate Intrinsic Vale, Options Outstanding, Beginning Balance | $ | $ 29,000 |
Intrinsic value granted | $ / shares | $ 3,760 |
Aggregate Intrinsic Vale, Options Outstanding, Ending Balance | $ | $ 21,000 |
Aggregate Intrinsic Vale, Options Exercisable | $ | $ 18,500 |
STOCKHOLDERS EQUITY (Details 1)
STOCKHOLDERS EQUITY (Details 1) - $ / shares | 9 Months Ended | ||
Mar. 31, 2024 | Dec. 31, 2023 | Sep. 30, 2023 | |
Number of Options | 1,150,000 | ||
Remaining Life (Years) | 2 years 1 month 6 days | ||
Number of Shares | 575,000 | ||
Weighted Average Price | $ 0.09 | $ 0.12 | $ 9 |
0.02 to 0.03 | |||
Number of Options | 400,000 | ||
Remaining Life (Years) | 6 months | ||
Weighted Average Price | $ 0.03 | ||
Number of Shares | 350,000 | ||
0.05 to 0.10 | |||
Weighted Average Price | $ 0 | ||
0.15 to 0.20 | |||
Number of Options | 700,000 | ||
Remaining Life (Years) | 2 years 10 months 24 days | ||
Weighted Average Price | $ 0.16 | ||
Number of Shares | 200,000 | ||
0.30 | |||
Number of Options | 50,000 | ||
Remaining Life (Years) | 2 years 4 months 24 days | ||
Weighted Average Price | $ 0.30 | ||
Number of Shares | 25,000 |
STOCKHOLDERS EQUITY (Details 2)
STOCKHOLDERS EQUITY (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Mar. 31, 2024 | Mar. 31, 2023 | |
Stock-based compensation expense | $ 6 | $ 12 | $ 11 | $ 34 |
Cost of goods sold [Member] | ||||
Stock-based compensation expense | 2 | 1 | 4 | 3 |
Other Selling and Marketing [Member] | ||||
Stock-based compensation expense | 8 | 4 | 13 | 11 |
General and Administrative [Member] | ||||
Stock-based compensation expense | $ (4) | $ 7 | $ (6) | $ 20 |
STOCKHOLDERS EQUITY (Details 3)
STOCKHOLDERS EQUITY (Details 3) | Mar. 31, 2024 shares |
STOCKHOLDERS EQUITY | |
Shares of common stock reserved for issuance under the 2015 Plan | 1,150,000 |
Shares of common stock issuable upon conversion of the Preferred Stock | 4,300,000 |
Total shares of common stock equivalents | 5,450,000 |
STOCKHOLDERS EQUITY (Details Na
STOCKHOLDERS EQUITY (Details Narrative) - USD ($) | 1 Months Ended | 9 Months Ended | |
Feb. 18, 2011 | Mar. 31, 2024 | Jun. 30, 2023 | |
Unrecognized stock expense | $ 58,115 | ||
Shares of common stock reserved for issuance under the 2015 Plan | 1,650,000 | ||
Stock options granted | 200,000 | ||
Closing stock price | $ 0.08 | ||
Common stock- shares authorized | 175,000,000 | 175,000,000 | |
Preferred stock - par value | $ 1 | $ 0.0001 | $ 0.0001 |
Stock options exercised | 525,000 | ||
Preferred stock - shares issued | 0 | 0 | |
Series A Preferred Stock Shares | |||
Preferred stock - par value | $ 0.0001 | $ 0.0001 | |
Preferred stock - shares issued | 4,300,000 | 4,300,000 | 4,300,000 |
Preferred stock - shares authorized | 10,000,000 | ||
Voting description | the number of shares of common stock of the Company issued and outstanding at the time of such vote multiplied by 1.01; divided by (ii) the total number of Series A Convertible Preferred Shares issued and outstanding at the time of such vote | ||
Aggregate of liquidation preference | $ 1,000,000 | ||
Preferred stock - liquidation preference | $ 0.2325 | ||
2015 Plan [Member] | |||
Number of share available for issue | 450,000 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - $ / shares | 9 Months Ended | ||
Jul. 01, 2024 | Apr. 01, 2024 | Mar. 31, 2024 | |
Stock option granted | 200,000 | ||
Mr. Knauf Chief Financial Officer and Controller [Member] | Subsequent Event [Member] | |||
Initial options exercisable | 200,000 | ||
Stock options exercisable price | $ 0.08 | ||
Stock option granted | 200,000 | ||
Additional stock option granted | 200,000 |