Cover
Cover - USD ($) | 12 Months Ended | ||
Jun. 30, 2023 | Oct. 19, 2023 | Dec. 31, 2022 | |
Cover [Abstract] | |||
Entity Registrant Name | THE HEALING COMPANY INC. | ||
Entity Central Index Key | 0001441082 | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Entity Voluntary Filers | Yes | ||
Current Fiscal Year End Date | --06-30 | ||
Entity Well Known Seasoned Issuer | No | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Entity Emerging Growth Company | false | ||
Entity Current Reporting Status | Yes | ||
Document Period End Date | Jun. 30, 2023 | ||
Entity Filer Category | Non-accelerated Filer | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2023 | ||
Entity Common Stock Shares Outstanding | 57,474,920 | ||
Entity Public Float | $ 142,518,000 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity File Number | 333-152805 | ||
Entity Incorporation State Country Code | NV | ||
Entity Tax Identification Number | 26-2862618 | ||
Entity Address Address Line 1 | 135 W 50th Street | ||
Entity Address Address Line 2 | 2nd Floor | ||
Entity Address City Or Town | New York | ||
Entity Address State Or Province | NY | ||
Entity Address Postal Zip Code | 10020 | ||
City Area Code | 866 | ||
Local Phone Number | 241-0670 | ||
Entity Interactive Data Current | Yes | ||
Auditor Name | RBSM LLP | ||
Auditor Location | New York, NY | ||
Auditor Firm Id | 587 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2023 | Jun. 30, 2022 |
Current Assets | ||
Cash and cash equivalents | $ 1,503 | $ 6,492 |
Accounts receivable, net | 161 | 0 |
Prepaid expenses | 1,309 | 85 |
Inventory, net | 2,681 | 0 |
Advances to vendors | 12 | 0 |
Other current assets | 1,951 | 0 |
Total Current Assets | 7,617 | 6,577 |
Property and equipment | 37 | 0 |
Intangible assets, net | 0 | 11 |
Goodwill | 5,036 | 0 |
Security deposits | 2 | 0 |
Deferred income tax | 79 | 0 |
Total Assets | 12,771 | 6,588 |
Current Liabilities | ||
Accounts payable and accrued expenses | 5,845 | 256 |
Accounts payable - related party | 243 | 38 |
Contract liabilities | 2,343 | 0 |
Loan | 5,014 | 0 |
Loan payable - related party | 172 | 165 |
Advances payable - related party | 3 | 3 |
Other current liability | 893 | 8 |
Sales tax payable | 178 | 0 |
Income tax payable | 42 | 0 |
Total Current Liabilities | 14,733 | 470 |
Total Liabilities | 14,733 | 470 |
Preferred Shares - 10,000,000 authorized, $0.001 par value Seed Preferred Shares, 7,800,000 designated, $0.001 par value, of which 2,620,000 and 4,660,000 are issued and outstanding as of June 30, 2023 and 2022, respectively | 3 | 5 |
Common Shares - 290,000,000 authorized, $0.001 par value, 55,199,920 and 44,004,920 shares issued and outstanding as of June 30, 2023 and 2022, respectively | 55 | 44 |
Additional Paid-in Capital | 27,823 | 14,653 |
Accumulated Deficit | (29,900) | (8,591) |
Other Comprehensive Income (loss) | 57 | 7 |
Total Stockholders' Equity (Deficit) | (1,962) | 6,118 |
Total Liabilities and Stockholders' Equity | $ 12,771 | $ 6,588 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2023 | Jun. 30, 2022 |
Consolidated Balance Sheets | ||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred Stock designated Shares | 7,800,000 | 7,800,000 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares issued | 2,620,000 | 4,660,000 |
Preferred stock, shares outstanding | 2,620,000 | 4,660,000 |
Common stock, shares authorized | 290,000,000 | 290,000,000 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares issued | 55,199,920 | 44,004,920 |
Common stock, shares outstanding | 55,199,920 | 44,004,920 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Consolidated Statements of Operations and Comprehensive Loss | ||
Revenue | $ 8,895 | $ 0 |
Cost of revenue | 6,905 | 0 |
Gross profit | 1,990 | 0 |
Operating expenses | ||
Advertising and marketing | 2,021 | 0 |
General and administrative | 10,568 | 7,014 |
Professional and consulting fees | 8,204 | 525 |
Impairment of intangible assets | 0 | 138 |
Impairment of goodwill | 3,869 | 0 |
Management fees | 1,567 | 585 |
Total operating expenses | 26,228 | 8,262 |
Loss from operations | (24,238) | (8,262) |
Other income (expense) | 3,240 | 0 |
Interest expense | (669) | (2) |
Foreign currency gain (loss) | 358 | 0 |
Total Other expense | 2,930 | (2) |
Provisions for income taxes | 0 | 0 |
Net loss | (21,309) | (8,264) |
Other comprehensive income (loss) | 30 | 7 |
Foreign currency translation adjustment | 27 | 0 |
Comprehensive loss | $ (21,252) | $ (8,258) |
Basic and Diluted Loss per Common Share | $ (0.42) | $ (0.19) |
Weighted average number of common shares used in per share calculations | 50,768,533 | 44,001,550 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders Equity (Deficit) - USD ($) $ in Thousands | Total | Common Stock [Member] | Seed Preferred Stock [Member] | Additional Paid-In Capital [Member] | Deferred Compensation [Member] | Other Comprehensive Income [Member] | Retained Earnings (Accumulated Deficit) |
Balance, shares at Jun. 30, 2021 | 44,000,000 | ||||||
Balance, amount at Jun. 30, 2021 | $ (283) | $ 44 | $ 0 | $ 0 | $ 0 | $ 0 | $ (327) |
Issuance of Seed Preferred Stock for cash, shares | 4,660,000 | ||||||
Issuance of Seed Preferred Stock for cash, amount | 9,320 | $ 0 | $ 5 | 9,315 | 0 | 0 | 0 |
Issuance of common stock for cash, shares | 4,920 | ||||||
Issuance of common stock for cash, amount | 10 | 0 | 10 | 0 | 0 | 0 | |
Stock based compensation - stock award | 1,885 | $ 0 | 0 | 1,885 | 0 | 0 | 0 |
Stock based compensation - stock option | 3,443 | 0 | 0 | 3,443 | 0 | 0 | 0 |
Loss for the period | (8,264) | 0 | 0 | 0 | 0 | 0 | (8,264) |
Other comprehensive income | 7 | $ 0 | $ 0 | 0 | 0 | 7 | 0 |
Balance, shares at Jun. 30, 2022 | 44,004,920 | 4,660,000 | |||||
Balance, amount at Jun. 30, 2022 | 6,118 | $ 44 | $ 5 | 14,653 | 0 | 7 | (8,591) |
Issuance of Seed Preferred Stock for cash, shares | 225,000 | ||||||
Issuance of Seed Preferred Stock for cash, amount | $ 450 | $ 0 | $ 0 | 450 | 0 | 0 | 0 |
Shares issued under stock awards, shares | 300,000 | 4,900,000 | |||||
Shares issued under stock awards, amount | $ 0 | $ 5 | 0 | 16,485 | 16,490 | 0 | 0 |
Loss for the period | (21,309) | $ 0 | 0 | 0 | 0 | 0 | (21,309) |
Shares issued under acquisition, shares | 4,600,000 | ||||||
Shares issued under acquisition, amount | 689 | $ 5 | 0 | 684 | 0 | 0 | 0 |
Shares issued under private placement, shares | 875,000 | ||||||
Shares issued under private placement, amount | 1,750 | $ 1 | 0 | 1,749 | 0 | 0 | 0 |
Shares issued under exercise options, shares | 300,000 | ||||||
Shares issued under exercise options, amount | 0 | $ 0 | 0 | 0 | 0 | 0 | 0 |
Cancelations, shares | (1,745,000) | ||||||
Cancelations, amount | (821) | $ (2) | $ 0 | (6,541) | 5,722 | 0 | 0 |
Conversion of Seed Preferred to Common stock, shares | 2,265,000 | (2,265,000) | |||||
Conversion of Seed Preferred to Common stock, amount | 0 | $ 2 | $ (2) | 0 | |||
Warrants issued as financing cost | 4,052 | 0 | 0 | 4,052 | 0 | 0 | 0 |
Warrants issued under acquisition | 34 | 0 | 0 | 34 | 0 | 0 | 0 |
Vesting warrant under debt settlement | 95 | 0 | 0 | 95 | 0 | 0 | 0 |
Stock based compensation on stock award | 3,803 | 0 | 0 | 0 | 3,803 | 0 | 0 |
Stock based compensation on stock option | 3,127 | 0 | 0 | 3,127 | 0 | 0 | 0 |
Foreign currency translation | 50 | $ 0 | $ 0 | 0 | 0 | 50 | 0 |
Balance, shares at Jun. 30, 2023 | 55,199,920 | 2,620,000 | |||||
Balance, amount at Jun. 30, 2023 | $ (1,962) | $ 55 | $ 3 | $ 34,788 | $ (6,965) | $ 57 | $ (29,900) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (21,309) | $ (8,264) |
Depreciation and amortization | 342 | 0 |
Stock based compensation | 6,930 | 5,328 |
Forfeited stock awards | (821) | 0 |
Warrants issued as financing cost and under acquisition | 4,181 | 0 |
Impairment of goodwill | 3,869 | 0 |
Gain on settlement of debt | (1,060) | 0 |
Foreign currency gain | (42) | 0 |
Change in deferred income taxes | (79) | 0 |
Impairment of intangible assets | 0 | 138 |
Inventory write down | 0 | 8 |
Changes in operating assets and liabilities: | ||
Vendor cash advances | (12) | 0 |
Prepaid expenses | (11) | (19) |
Accounts receivable | 812 | 0 |
Other current assets | (1,903) | 8 |
Sales tax payable | 178 | 0 |
Inventories | (2,063) | 0 |
Accounts payable and accrued expenses | 3,742 | 205 |
Accounts payable related party | 205 | (29) |
Contract liabilities | (987) | 0 |
Net Cash used in operating activities | (7,944) | (2,624) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Cash acquired under acquisition | 595 | 0 |
Cash payment for acquisition | (4,500) | (20) |
Intangible assets | 0 | (11) |
Refund on trademark registration | 2 | 0 |
Purchases of property and equipment | (368) | 0 |
Net Cash used in financing activities | (4,275) | (31) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from sale of Seed Preferred and Common stock | 2,200 | 9,330 |
Proceeds from loan payable | 5,014 | 0 |
Proceeds from loan payable - related parties | 8 | 20 |
Proceeds from advances payable - related parties | 0 | 3 |
Payment to advances payable - related parties | 0 | (204) |
Net Cash provided by financing activities | 7,222 | 9,148 |
Foreign Exchange Effect on Cash | 8 | (2) |
INCREASE (DECREASE) IN CASH | (4,989) | 6,492 |
CASH AT BEGINNING OF YEAR | 6,492 | 0 |
CASH AT END OF YEAR | 1,503 | 6,492 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||
Interest Paid | 573 | 0 |
Taxes Paid | 0 | $ 0 |
SUPPLEMENTAL NON-CASH INVESTING AND FINANCING INFORMATION | ||
Net assets acquired from acquisition (excluding cash) | (4,441) | |
Goodwill | 5,036 | |
Debt settled with common stock warrant | $ 472 |
DESCRIPTION OF BUSINESS, GOING
DESCRIPTION OF BUSINESS, GOING CONCERN AND HISTORY | 12 Months Ended |
Jun. 30, 2023 | |
DESCRIPTION OF BUSINESS, GOING CONCERN AND HISTORY | |
DESCRIPTION OF BUSINESS, GOING CONCERN AND HISTORY | NOTE 1. DESCRIPTION OF BUSINESS, GOING CONCERN AND HISTORY DESCRIPTION OF BUSINESS AND HISTORY Historical Information The Healing Company Inc. (formerly “Lake Forest Minerals) a Nevada corporation, (the “Company”) was incorporated in the State of Nevada on June 23, 2008. The Company was originally formed to engage in the acquisition, exploration and development of natural resource properties of merit. Currently, the Company is an emerging health and wellness company that has identified the need for a change to healthcare, where conventional medicine and alternative healing can both be drawn on to provide a world of integrated healing encompassing conventional medicine and alternative medicine. With the acquisition of NOEO GmbH (“NOEO”) on March 10, 2022, and the onboarding of a new management team, the Company commenced operations in the health and wellness sector. Current Information On September 9, 2022, the Company entered into a loan purchase and sale agreement (the “Agreement”) with CircleUp Credit Advisors LLC (the “Seller”) pursuant to which it agreed to purchase from the Seller all loans and loan accommodations (the “Loan”) made by the Seller to Your Superfoods, Inc. and Your Super, Inc. (together, “Your Super Company”). Pursuant to the terms of the Agreement, as consideration for purchase of the Loan, the Company made a cash payment of $2,000,000 to the Seller and issued the Seller a warrant to purchase 1,500,000 restricted shares of the Company’s common stock. This warrant will begin to vest on the one-year anniversary of the closing of the purchase of the Loan with 12.5% of the Warrant amount (187,500 shares) vesting on that date and the remaining portion of the Warrant vesting in seven quarterly installments of 187,500 shares each over the next seven quarters. Vesting of the Warrant will be accelerated upon the occurrence of a sale or merger of the Company. The Warrant will terminate on the seventh anniversary of the closing date and will be subject to customary adjustments of the warrant price and number of shares for splits, stock dividends, recapitalizations and the like. On March 3, 2023, the Company and Chopra HLCO LLC, a Delaware limited liability company and indirect wholly owned subsidiary of the Company (“Chopra HLCO”) (collectively the “Buyer”) simultaneously (i) entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Chopra Global, LLC, a Delaware limited liability company (the “Seller”), and solely with respect to certain specified indemnification provisions of the Purchase Agreement, Deepak Chopra, the majority member of the Seller, to acquire (the “Acquisition”) certain assets of the Seller (the “Purchased Assets”) and certain liabilities related to the Seller’s business activities involving Chopra Global Digital, Chopra Global Licensing and Chopra Global Products assets (these business activities are referred to herein as the “Chopra Business”) and (ii) closed the Acquisition (the “Closing”). Following the Closing, the Purchased Assets are being held by, and the Chopra Business is being operated through, Chopra HLCO. The consideration paid and payable by the Buyer for the Purchased Assets is an aggregate purchase price (the “Purchase Price”) of up to Five Million Dollars ($5,000,000) in cash plus newly issued shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”). One Million Dollars ($1,000,000) of the cash portion of the Purchase Price was paid to the Seller on March 3, 2023, along with the issuance to the Seller of One Million Four Hundred Thousand (1,400,000) shares of Common Stock (the “Closing Shares”). A deferred cash payment of Two Million Five Hundred Thousand Dollars ($2,500,000) was paid to the Seller prior to March 31, 2023. In addition, the Seller may receive certain Earnout payments of up to Three Million Dollars ($3,000,000) by way of cash and shares upon certain terms and conditions. Basis of Presentation The accompanying consolidated financial statements and related notes have been prepared by the Company in accordance with accounting principles generally accepted in the United States (“GAAP”), and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). The information furnished reflects all adjustments, consisting only of normal recurring items which are, in the opinion of management, necessary in order to make the financial statements not misleading. Going Concern The Company had a working capital deficit of $7.116 million on June 30, 2023. During the year ended June 30, 2022, the Company entered into private placement subscription agreements to raise a total of $10 million by the sale of seed preferred stock at $2.00 per share, of which the Company has collected $9.66 million, with $0.34 million remaining to be collected. During the year ended June 30, 2023, the Company sold an additional 50,000 shares of seed preferred stock at $2.00 per share for proceeds of $0.1 million and 875,000 shares of common stock at $2.00 per share for proceeds of $1.75 million, all of which has been collected to date. The Company commenced operations in the wellness sector initially through the acquisition of NOEO and more recently with the acquisition of the Your Super and Chopra Business assets. During the year ended June 30, 2023, the Company entered into a credit agreement with certain lenders (the “Lenders”) who agreed to extend a credit facility to the Company consisting of up to $150 million in accordance with the terms of the agreement in aggregate principal amount of term loan commitments (the “Term Loans”)), the proceeds of which may be used to acquire assets that are deemed eligible by meeting certain criteria. To date, the Company has been funded $4.87 million under the terms of this agreement to facilitate the purchase of operating assets. The continuation of the Company as a going concern is dependent upon the ability to attain profitable operations from the Company’s existing and planned future business operations and sufficient financing to carry out those plans. If the Company is unable to obtain adequate capital as needed, or conduct revenue generating operations, the Company may be required to reduce the scope, delay, or eliminate some or all of its existing and planned operations. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. COVID-19 Pandemic and other factors While the World Health Organization has recently declared that the COVID-19 pandemic is no longer a public health emergency of international concern and the global economy is focused on recovery, the impact of COVID-19 could continue to have an adverse impact on the Company going forward. COVID-19 caused significant disruptions to the global financial markets, which may continue to impact the Company’s ability to raise additional capital and to pursue certain acquisitions. Additional factors which may impact the Company’s ongoing operations include, but are not limited to, inflation, potential supply chain issues as a result of the aforementioned recovery from the COVID-19 pandemic, the recent war in the Ukraine and climate change. These events may have serious adverse impact on domestic and foreign economies which may impact the Company’s operations as a result of a variety of factors including the potential for reduced consumer spending. The Company is unable to predict the ongoing impact of these factors on the Company’s consolidated financial operations. There are no assurances that the Company will be able to meet its obligations, raise funds or conclude the acquisition of identified businesses. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Jun. 30, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principals of Consolidation The consolidated financial statements include the accounts of The Healing Company and its 100% controlled subsidiaries, NOEO GmbH, NOEO, Inc., HLCO Borrower LLC, Your Super HLCO, LLC, Chopra HLCO LLC and the Your Super HLCO, LLC subsidiaries. All significant intercompany balances and transactions have been eliminated. “The Healing Company”, the “Company”, “we”, “our” or “us” is intended to mean The Healing Company, including the subsidiaries indicated above, unless otherwise indicated. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. The Company bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgements about the carrying values of its assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates, and the Company includes any revisions to its estimates in its results for the period in which the actual amounts become known. Significant estimates in the period include the preliminary purchase price allocation with respect to the acquisition of the assets and liabilities of Your Super Inc. and Chopra HLCO, the allowance for doubtful accounts on accounts and other receivables, inventory allowance and impairment, valuation and useful lives of fixed assets, valuation of common stock and stock warrants, stock option valuations, imputed interest on due to related parties, and deferred tax valuation allowance. Income and Other Taxes Income taxes are accounted for using the asset and liability method in accordance with ASC 740, Income Taxes The Company records net deferred tax assets to the extent they believe these assets will more-likely-than-not be realized. In making such determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations. In the event the Company was to determine that it would be able to realize its deferred income tax assets in the future in excess of its net recorded amount, the Company would make an adjustment to the valuation allowance which would reduce the provision for income taxes. Net Loss per Common Share The Company computes net income (loss) per share in accordance with ASC 260, Earnings per Share The table below reflects the potentially dilutive securities at the end of each reporting period. June 30, 2023 June 30, 2022 Seed Preferred stock (Convertible to Common stock 1:1) 2,620,000 4,660,000 Seed Preferred warrants (Convertible to Common stock 1:1) 1,560,148 - Common stock warrants 1,650,000 - Stock options 3,091,250 3,166,250 Total 8,921,398 7,826,250 Stock-based compensation The Company accounts for stock option awards granted to employees, non-employees, and directors using the accounting guidance in ASC 718 “Stock Compensation” (“ASC 718”). In accordance with ASC 718, we estimate the fair value of service-based options and performance-based options on the date of grant, using the Black-Scholes pricing model. We recognize compensation expense for stock option awards over the requisite or implied service period of the grant. Compensation expense is recognized on a straight-line method over the requisite service period. Forfeitures are accounted for as they occur. Cash and cash equivalents The Company defines cash and cash equivalents as highly liquid investments with original maturities of 90 days or less at the time of purchase. The Company also considers amounts in transit from payment processors for customer credit card and debit card transactions to be cash and cash equivalents. At June 30, 2023 and June 30, 2022, the Company’s cash and cash equivalents consisted primarily of cash held in checking accounts, and payment in transit from payment processors for customer credit card and debit card transactions. As of June 30, 2023 and June 30, 2022, cash and cash equivalents was $1.5 million and $6.5 million, respectively. Concentration of Risk Financial instruments that subject the Company to significant concentrations of credit risk primarily consist of cash and cash equivalents. The Company maintains substantially all of its cash and cash equivalents with three financial institutions, which, at times, may exceed federally insured limits. The Company has not incurred any losses associated with this concentration of deposits. The Company currently has bank deposits with financial institutions in the U.S. which exceed FDIC insurance limits. FDIC insurance provides protection for bank deposits up to $250,000, so there were cumulative uninsured balances of $1.25 million and $6.25 million in the parent and its US based subsidiaries as of June 30, 2023 and June 30, 2022, respectively. There were no uninsured bank deposits with a financial institution outside the U.S. All uninsured bank deposits are held at high quality credit institutions. Foreign currency translation and transactions The Company uses the U.S. Dollar as the reporting currency for its financial statements. Functional currency is the currency of the primary economic environment in which an entity operates. The functional currency of the Company’s Germany and Netherlands subsidiaries are the local currencies. The assets and liabilities of the Company’s foreign subsidiaries are translated into US Dollars using exchange rates in effect at the consolidated balance sheet date. Revenues and expenses are translated using the average exchange rates prevailing during the period. Exchange-rate differences resulting from translation adjustments are accounted for as a component of accumulated other comprehensive loss. Borrowings in foreign currencies are recorded at the rate of exchange at the time of the transaction and are adjusted for any exchange rate gains or losses as of the balance sheet date. Translation of amounts from Euro into US$ have been made at the following exchange rates for the periods ended June 30, 2023 and June 30, 2022: 2023 2022 Period-end Euro: US$ exchange rate $ 1.0915 $ 1.0476 Period-average Euro: US$ exchange rate $ 1.0459 $ 1.0725 Translation gains and losses that arise from exchange rate fluctuations from transactions denominated in a currency other than the functional currency are translated, as the case may be, at the rate on the date of the transaction and included in the results of operations as incurred. ASC Topic 220, “ Comprehensive Income Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are stated net of an allowance for doubtful accounts. When management becomes aware of circumstances that may decrease the likelihood of collection to a point where a receivable is no longer probable of being collected, it records an allowance against amounts due, which reduces the receivable to the amount that management reasonably believes will be collected. For all other customers, management determines the adequacy of the allowance based on historical loss patterns, the number of days that billings are past due, and an evaluation of the potential risk of loss associated with specific accounts. The Company does not have any off-balance-sheet credit exposure related to its customers. As of June 30, 2023 and June 30, 2022, the allowance for doubtful accounts amounted to $109,620 and $0, respectively. Inventories Inventories consist primarily of raw materials, work-in-process (blended superfood powder) and finished goods. Finished goods and work-in-process include direct materials, finished product kits, finished products, third-party blender and other overhead costs involved in manufacturing for e-commerce sales. The Company values inventory using the standard costing method whereunder product costs are allocated based on standard rates for materials, labor, and overhead. The Company analyses actual costs at regular intervals and accounts for any variance in costs of goods sold. Inventories are stated at the lower of cost or net realizable value, with cost determined using the first-in first-out method. Inventories have been reduced by an allowance for excess, obsolete and unsaleable inventories. The allowance is an estimate based on our management’s review of inventories on hand compared to estimated future usage and sales. The Company performs cycle counts of inventories at its warehouse and distribution center throughout the year. An allowance for inventory shrinkage is established for estimated inventory shrinkage since the last physical inventory date through the reporting date. Property and Equipment Property and equipment are stated at cost, net of accumulated depreciation and amortization, and depreciated over their estimated lives using the straight-line method. The useful lives of leasehold improvements are determined by the economic useful lives of the assets or the term of the leases, whichever is shorter. Depreciation and amortization is provided for by the straight-line method over the estimated useful lives as follows: Property and Equipment Estimated Useful Life Computer and other equipment 3-7 years Office furniture and fixtures 5-7 years Leasehold improvements Shorter of lease or useful life Expenditures for repairs and maintenance are expensed as incurred. When assets have been retired or sold, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized in the results of operations. Goodwill and Intangible Assets Goodwill represents the excess of the purchase price over the fair market value of the net assets (including intangibles) acquired on October 13, 2022 and March 3, 2023, respectively. The Company has implemented the Business Combinations Topic of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 350, Intangibles Goodwill and Other. The Company reviews intangible assets (with a definite life), excluding goodwill and tradenames, for impairment when events or changes in circumstances indicate the carrying amount may not be recoverable. We measure the recoverability of these assets by comparing the carrying amounts to the future undiscounted cash flows that the assets are expected to generate. If the carrying value of the assets are not recoverable, the impairment recognized is measured as the amount by which the carrying value of the asset exceeds its fair value. For the fiscal year ended June 30, 2023, the Company recorded impairment of goodwill of $3,868,721. For the fiscal year ended June 30, 2022, the Company recorded impairment of intangible assets of $138,366. The Company tests goodwill, accreditation and trade names for impairment at least annually, or more frequently if events or changes in circumstances indicate that the asset may be impaired. There were no goodwill, accreditation or trade names impairments for the periods presented. Amortization of customer relationships and non-compete agreements on a straight-line basis totaled $189,581 for the fiscal year ended June 30, 2023. Business Combinations The Company accounts for business combinations using the purchase method of accounting. The purchase method requires the Company to determine the fair value of all acquired assets, including identifiable intangible assets and all assumed liabilities. The total cost of acquisitions is allocated to the underlying identifiable net assets, based on their respective estimated fair values. Determining the fair value of assets acquired and liabilities assumed requires management’s judgment and the utilization of independent valuation experts, and often involves the use of significant estimates and assumptions, including assumptions with respect to future cash inflows and outflows, discount rates and asset lives, among other items. Long-Lived Assets The Company evaluates the recoverability of its long-lived assets for impairment, other than goodwill, whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to undiscounted future net cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Fair value estimates are based on assumptions concerning the amount and timing of estimated future cash flows. The Company had no long-lived asset impairments as of June 30, 2023 and June 30, 2022, respectively. Contract Assets In accordance with ASC 606-10-45-3, a contract asset is the Company’s right to payment for goods and services already transferred to a customer if that right to payment is conditional on something other than the passage of time. The Company will recognize a contract asset when it has fulfilled a contract obligation but must perform other obligations before being entitled to payment. There were no contract assets at June 30, 2023 and June 30, 2022. Contract Liabilities Deferred revenue, a contract liability, primarily consists of arrangement consideration collected in advance of order fulfillment and unsatisfied obligations related to outstanding loyalty points. The Company expects that the majority the revenue deferrals recorded at the balance sheet date will be recognized as revenue in the next 12 months as performance obligations are satisfied. Sales taxes collected from customers and remitted to government authorities are excluded from revenue and deferred revenue. Ownership passes to customers upon shipment. Deferred revenue represents amounts collected from, or invoiced to, customers in excess of revenues recognized, primarily from the billing of annual subscription agreements. Also included in contract liabilities is the value of loyalty points with respect to the Company’s loyalty program described below. The value of these contract liabilities will increase or decrease based on the timing of invoices and recognition of revenue as customers use their rewards points. The Company offers a loyalty program to its customers which incorporates a points system for activities on the Company’s website, such as reviews, referrals, and purchases. Customers accumulate points based on their level of spending and type of participation. The points can be redeemed for purchases of goods offered at the Company’s websites. The Company defers the stand-alone selling price of earned reward points, net of rewards not expected to be redeemed (known as “breakage”), as liability for outstanding loyalty points. To estimate the stand-alone selling price for the points, the Company considers the stated redemption value per point dictated by the terms of the loyalty programs and then estimates the future breakage of reward points based on historical member activity. Upon redemption of points by customer, the Company recognizes revenue and reduces corresponding deferred revenue. The Company records breakage revenue of unredeemed points based on expected customer redemptions. The Company’s total contract liability balance was $2.34 million and $0 at June 30, 2023 and June 30, 2022, respectively, of which $211,927 relates to the liability for outstanding loyalty points for Your Super and $1.34 million relates to customer subscription deposits with respect to membership fees from the Chopra wellness app which are collected in advance and amortized over the one (1) year term of the membership, advances on retreat packages and prepaid licensing fees. Fair Value Measurements The Company's financial instruments primarily consist of cash and cash equivalents, accounts receivable, contracts receivable, accounts payable and accrued liabilities, contracts receivable recourse, deferred revenue, debt and a capital lease obligation. The carrying values of the Company's financial instruments approximate fair value. FASB ASC 820, Fair Value Measurements and Disclosure ASC 820 requires that assets and liabilities measured at fair value are classified and disclosed in one of the following three categories: Level 1 - Quoted market prices for identical assets or liabilities in active markets or observable inputs; Level 2 - Significant other observable inputs that can be corroborated by observable market data; and Level 3 - Significant unobservable inputs that cannot be corroborated by observable market data. The Company believes that the carrying amounts of cash and cash equivalents, accounts payable, and short-term borrowings approximate fair value based on either their short-term nature or on terms currently available to the Company in financial markets. Revenue Recognition Revenue is recognized when a customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. The Company accounts for revenue contracts with customers by applying the requirements of ASC 606, Revenue from Contracts with Customers i. Identification of the contract with a customer. ii. Identification of the performance obligations in the contract. iii. Determination of the transaction price. iv. Allocation of the transaction price to the performance obligations in the contract. v. Recognition of revenue as the entity satisfies a performance obligation. When a customer purchases product from the Company, ownership of the product transfers to them at the point of shipment and the Company has an enforceable right to payment for product sold at that time. Accordingly, the customer has control of the product purchased from the Company starting at the point of shipment. The risk of loss or damage during shipment resides exclusively with the shipping carrier and the Company assumes no obligation for loss or damage of product while in transit to the customer. As a result of this change in terms of sale, the Company recognizes revenue, including shipping revenue, when performance obligations are satisfied through the transfer of control of promised goods to the Company’s customers, which is at the point of shipment. Sales are recorded net of returns, discounts, and any taxes collected from customers and remitted to government authorities. The Company generates revenues from a diversified mix of e-commerce activities with the majority of revenue earned through e-commerce direct sales to consumer. The Company’s e-commerce activities include the sale of organic nutritional superfood powder mixes online, through the Company’s website YourSuper.com, and sales of the Chopra wellbeing line available at Chopra.com. During the fiscal year ended June 30, 2023, the Company’s direct to consumer sales of products accounted for 67% of total revenue. In addition, the Company records revenue from the sale of memberships to the Chopra Wellbeing and Meditation App. Revenues from the membership are collected in advance and recognized over the term of the membership. Finally, the Company records net revenue in the form of commissions with respect to sales of attendance at its wellness retreats at various US based locations. Revenue for wellness retreats is deferred upon purchase and recognized at the time of the event with the transfer of services to the customer. The Company records revenues from the sales on a “gross” basis pursuant to ASC 606-10 Revenue Recognition – Revenue from Contracts with Customers, when the Company controls the specified good before it is transferred to the end customer and have the risks and rewards as principal in the transaction, such as responsibility for fulfillment, retaining the risk for collection, and establishing the price of the products. If these indicators have not been met, or if indicators of net revenue reporting specified in ASC 606-10 are present in the arrangement, revenue is recognized net of related direct costs. Cost of Revenue Cost of revenue primarily consists of costs associated with the purchase of superfood products and materials and packaging for its Chopra wellness kits from third-party manufacturers. These costs include ingredients, packaging, third party manufacturing costs and freight-in shipping. Product Warranties The Company’s provision for estimated future warranty costs is based upon the historical relationship of warranty claims to sales. Based upon historical sales trends and warranties, it has been concluded that no warranty liability is required as of June 30, 2023 and June 30, 2022. To date, product allowance and returns have been minimal and, based on experience, the Company believes that product returns will continue to be minimal. Shipping and Logistics Expenses Shipping and logistics expenses consist primarily of costs incurred to ship products to the customer. If shipping and handling activities are performed after the customer obtains control of the good, then an entity may elect to account for shipping and handling as fulfillment activities and not promised services that require further evaluation under ASC 606. If the entity elects this accounting policy, the costs related to the shipping and handling activities should be accrued when the entity recognizes revenue for the related promised goods. In addition, if this accounting policy is elected, the entity must apply it consistently to similar transactions and provide the accounting policy disclosures required by ASC 235. The Company has elected to record shipping and handling activities performed after the customer obtains control of the product as fulfillment costs. These expenses are presented as operating expenses in the accompanying consolidated statements of operations and comprehensive loss. Business Segments The Company uses the “management approach” to identify its reportable segments. The management approach designates the internal organization used by management for making operating decisions and assessing performance as the basis for identifying the Company’s reportable segments. Using the management approach, the Company determined that it has three operating segments: Ecommerce sales of wellness products, sales of memberships to its wellness app and operation of its wellness focused retreats. Commitments and Contingencies The Company accounts for contingencies in accordance with ASC 450-20, Contingencies. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon information available at this time that these matters will have a material adverse effect on the Company’s financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows. Recent Accounting Pronouncements The Company has implemented all new accounting pronouncements that are in effect and that may impact its consolidated financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations. |
ACQUISITIONS
ACQUISITIONS | 12 Months Ended |
Jun. 30, 2023 | |
ACQUISITIONS | |
ACQUISITIONS | NOTE 3. ACQUISITIONS Acquisition – Assets of Chopra Global, LLC On March 3, 2023, the Company and Chopra HLCO LLC, simultaneously (i) entered into the Purchase Agreement with the Seller, and solely with respect to certain specified indemnification provisions of the Purchase Agreement, Deepak Chopra, to acquire the Purchased Assets and certain liabilities related to the Seller’s business activities involving the Chopra Business and (ii) closed the Acquisition. Following the Closing, the Purchased Assets are being held by, and the Chopra Business is being operated through, Chopra HLCO. The consideration paid and payable by the Buyer for the Purchased Assets is the Purchase Price of up to Five Million Dollars ($5,000,000) in cash plus newly issued shares of the Company’s Common Stock. In total, the initial cash purchase amount consists of $3.5 million in cash, of which the Company has paid $2.5 million as of March 31, 2023, with the final $1 million paid in April 2023, and 1,400,000 shares of the Company’s unregistered, restricted common stock issued on Closing. Additionally, up to three (3) earnout payments of One Million Dollars ($1,000,000) in value each (the “Earnout Payments”) may be paid to the Seller, subject to and payable in accordance with earnout thresholds specified in the Purchase Agreement. Each of these Earnout Payments will be comprised of fifty percent (50%) in cash and fifty percent (50%) in shares of the Common Stock (the “Earnout Shares”). The Earnout Payments will be earned (i) for the period starting March 1, 2023 and ending December 31, 2023 if net revenue of the Chopra Business (then operated by the Buyer) exceeds Five Million Nine Hundred Thousand Dollars $5,900,000; (ii) for the calendar year ending December 31, 2024 if such net revenue exceeds $11,000,000; and (iii) for the calendar year ending December 31, 2025 if such net revenue exceeds $15,000,000. The Earnout Shares will be valued at the market price at the time of issuance based on the five-day volume weighted average price of the Common Stock prior to the last day of the applicable measurement year. If the Company is taken private or undergoes a Change of Control (as defined in the Asset Purchase Agreement), any subsequent Earnout Payment will be paid 100% in cash. The Closing Shares are restricted securities and do not carry any registration rights that require or permit the filing of any registration statement in connection with their issuance. In accordance with the terms of a lock up/leak out agreement between the Company and Chopra Global effective as of the Closing (the “Lock Up/Leak Out Agreement”), the Closing Shares are subject to a three-year lock-up (unless released earlier as described below) from the date of the Closing (the “Lock Up”) and thereafter may be released in four equal quarterly installments beginning on the first day of the fiscal quarter beginning after the third anniversary of the Closing and on the first day of each of the next three fiscal quarters (the “Leak Out”) subject to a restricted volume of no more than three percent (3%) of the volume-weighted average trading of the Common Stock over the previous five trading days. The Closing Shares will be released from the Lock Up, but not from the Leak Out, upon (a) the closing of an underwritten, firm commitment public offering of at least $30,000,000 of the Common Stock, (b) a Change of Control or (c) the Company’s termination of reporting under the Securities Exchange Act of 1934, as amended. The Company’s acquisition of the operating assets of Chopra Global is being accounted for as a business combination. In order to perform the purchase price allocation, the tangible and intangible assets were valued as of March 1, 2023. The following is a summary of the estimated fair values of acquisition costs at the date of March 1, 2023: ( Dollars in thousands Consideration Paid – Fair Value Acquisition costs – Cash $ 3,500 Stock issued: Number of Shares issued: 1,400,000 Value per share $ 0.15 Total stock fair value 210 Total consideration $ 3,710 On March 31, 2023, a total of $2.5 million in cash consideration was paid with the remaining $1 million reflected as accounts payable, which was settled in April 2023. The following is a summary of the estimated fair values of the assets acquired and liabilities assumed and additional information regarding the intangible assets acquired: ( Dollars in thousands Tangible assets acquired: Cash $ 300 Inventory 216 Accounts receivable - Prepaid expenses and other assets 345 Total assets acquired 861 Assumed liabilities Contract liabilities (2,187 ) Total liabilities assumed (2,187 ) Net tangible assets/(liabilities) (1,326 ) Total liabilities acquired (1,326 ) Goodwill 5,036 Total Net asset acquired $ 3,710 As of June 30, 2023, no impairment of the Company’s goodwill was required. The purchase accounting for the acquisition remains incomplete as management continues to gather and evaluate information about circumstances that existed as of the acquisition date. Under the purchase method of accounting, the total estimated purchase price as shown in the table above is net tangible and intangible assets and liabilities based on their estimated fair values as of the date of the acquisition. The pro forma adjustments included herein have been derived from the preliminary allocation of the total estimated purchase price and may be revised as additional information becomes available and as additional analyses are performed. The final allocation of the purchase price will be determined after completion of a final analysis to determine the fair values of the tangible assets, identifiable intangible assets, and liabilities as of the acquisition. Accordingly, the final purchase accounting adjustments may be materially different from the pro forma adjustments presented in this document. Increases or decreases in the fair value of the net assets may change the amount of the purchase price allocated to goodwill and other assets and liabilities. Measurement period adjustments will be recognized prospectively. The measurement period is not to exceed 12 months from the respective dates of acquisition. Acquisition - Assets of Your Super, Inc. On September 9, 2022, the Company (the “Buyer”) acquired from CircleUp Credit Advisers LLC (“CircleUp”), for a cash consideration of $2 million plus 1,500,000 common stock purchase warrants for exercise at $2 per share for a term of seven years, all of CircleUp’s rights and interests of all loans and loan accommodations made to Your Superfoods, Inc. and Your Super, Inc. On September 30, 2022, the Company entered into an asset purchase agreement (the “YS Asset Purchase Agreement”) with Your Super, Inc. (“YS”), to acquire all of the rights, title and interests in and to substantially all of the assets owned by YS used in connection with the business of Your Super, Inc. The Closing took place on October 13, 2022. The aggregate purchase price for the ownership interests of YS as stated in the YS Asset Purchase Agreement is as follows: · In consideration for the sale, assignment and delivery of the YS purchased assets, the Buyer (i) waived, canceled, and forgave payment by YS of the Loan Obligation and (ii) paid the aggregate purchase price for the YS purchased assets of $8 million (the “YS Purchase Price”), payable in accordance with Section 1.4(b) of the YS Asset Purchase Agreement. · The YS Purchase Price for the YS purchased assets was comprised of and payable as follows: At the Closing, the Buyer issued to YS 3,200,000 shares of Company Common Stock valued at $2.50 per share for an aggregate value of $8 million (the “Buyer Shares”), subject to lockup provisions. The Buyer Shares were issued according to applicable regulatory and compliance requirements, as restricted securities (as defined in Rule 144) and do not carry any registration rights. The Company’s acquisition of the operating assets of Your Super Inc. is being accounted for as a business combination and the Company treated as one acquisition transaction. In order to perform the purchase price allocation, the tangible and intangible assets were valued as of September 30, 2022. The following is a summary of the estimated fair values of acquisition costs at the date of September 30, 2022: ( Dollars in thousands Consideration Paid – Fair Value Debt acquisition costs – Cash $ 2,000 Debt acquisition cost -1,500,000 common stock purchase warrants 34 Stock issued: Number of Shares: 3,200,000 Value per share $ 0.15 Total stock fair value 480 Total consideration $ 2,513 The following is a summary of the estimated fair values of the assets acquired and liabilities assumed and additional information regarding the intangible assets acquired at the date of September 30, 2022: ( Dollars in thousands Tangible assets acquired: Cash $ 363 Inventory 4,953 Accounts receivable 422 Prepaid expenses and other assets 836 Property and equipment 78 Security deposits 63 Deferred income taxes 45 Total assets acquired 6,760 Assumed liabilities Accounts payable and accrued liabilities (7,815 ) Contract liabilities (259 ) Income tax payable (41 ) Total liabilities assumed (8,115 ) Net tangible assets/liabilities (1,355 ) Intangible assets acquired: Goodwill $ 3,868 Total Net asset acquired $ 2,513 The purchase accounting for the acquisition of Your Super was concluded as of June 30, 2023. Measurement period adjustments were recognized during the three months ended June 30, 2023 as management completed their evaluation of the acquisition. As of June 30, 2023, the Company determined that goodwill was fully impaired and recorded impairment charges $3,868,721. Following are the supplemental consolidated financial results of the Company, Your Superfoods, Inc., Your Superfoods BV and Your Superfoods GmbH and the assets of Chopra Global on an unaudited pro forma basis, as if the acquisitions had been consummated as of the beginning of the fiscal year 2022 (i.e., July 1, 2021): Year ended June 30, 2023 2022 Revenue $ 12,540 $ 32,462 Net income (loss) $ (523 ) $ (15,705 ) Weighted average number of common shares used in per share calculations 50,768,533 44,001,550 Basic and Diluted Loss Per Common Share $ (0.01 ) $ (0.36 ) Acquisition NOEO GmbH On March 10, 2022, the Company closed a Share Purchase Agreement pursuant to which we acquired 100% of the issued and outstanding capital stock of NOEO GmbH, a German corporation, controlled by a member of our board of directors, for total consideration of $28,290 (EUR 25,000), paid on closing. NOEO has established a series of wellness products, sold direct-to-consumer focusing on adaptogenic herbs and the marketing of three key products which include joint, memory and digestive complexes taken orally derived from functional mushrooms. The acquisition is in line with the Company’s current mandate of acquiring operating wellness-focused businesses. On closing, the shares of NOEO were transferred to the Company and NOEO became a wholly owned subsidiary of the Company. The following table sets forth the net assets as of the acquisition date: (Dollars in thousands) March 10, 2022 Cash and cash equivalent $ 8 Inventory 8 Prepaid expenses 69 Recoverable value added tax 21 Intangible assets 68 Accounts payable and accrued liabilities (33 ) Advances and accounts payable, related party (8 ) Loan payable, related party (158 ) Net assets (25 ) Consideration: Cash purchase 28 Additions to intangible assets $ 53 The purchase accounting for the acquisition of NOEO was concluded as of June 30, 2022. On June 30, 2022, the impairment tests carried out by management indicated that certain intangible assets including |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Jun. 30, 2023 | |
PROPERTY AND EQUIPMENT | |
PROPERTY AND EQUIPMENT | NOTE 4. PROPERTY AND EQUIPMENT Property and equipment consist of the following: ( Dollars in thousands June 30, 2023 June 30, 2022 Computer equipment $ 232 $ - Furniture and fixtures 25 - 257 - Less: accumulated depreciation (220 ) - Property and equipment, net $ 37 $ - Depreciation expense for the fiscal year ended June 30, 2023 was $42,722 and is included within general and administrative expense on the consolidated statements of operations and comprehensive loss. There are no assets held under capital leases. |
REVENUE
REVENUE | 12 Months Ended |
Jun. 30, 2023 | |
REVENUE | |
REVENUE | NOTE 5. REVENUE Disaggregation of Revenue The following table presents the Company’s revenue, from acquisition dates to the period ended June 30, 2023, from contracts with customers, disaggregated by Company location and sales channel: Revenue by Geographical location ( Dollars in thousands Acquisition Dates To June 30, 2023 US $ 6,548 Europe 2,347 Total $ 8,895 Revenue by product sales channel ( Dollars in thousands Acquisition Dates To June 30, 2023 Direct to Consumer $ 5,951 Amazon 1,018 Wholesale 658 Retreat/licensing 275 Digital 993 Total $ 8,895 From the acquisition dates to June 30, 2023, the Company had no customers who accounted for greater than 10% of total revenue. The Company primarily views its disaggregated revenue on a geographic basis. Contract Liabilities The deferred revenue balances were as follows: ( Dollars in thousands Acquisition Dates To June 30, 2023 Deferred revenue, as of the acquisition dates, including reward liabilities of $965 (a) (b) $ 3,227 Decrease in reward liabilities over the period, net (693 ) Decrease in deferred revenue over the period, net (b)(c) (192 ) Deferred revenue, end of the period, including rewards liabilities of $984 2,343 (a) The Company records a liability for outstanding loyalty points earned by customers. As of June 30, 2023, and October 13, 2022 (acquisition date of Your Super, Inc. assets), the liability for outstanding loyalty points amounted approximately $271 and $965, respectively, and is included in contract liabilities in the accompanying consolidated balance sheets. (b) The Company records a liability for fees collected from customers with respect to its subscription-based wellness app, retreat package sales and licensing fees which amounts are recognized when earned. As of June 30, 2023, and March 3, 2023 (acquisition date of Chopra Global assets), the liabilities for unearned revenue totaled $2,085 and $2,257, respectively, and is included in contract liabilities in the accompanying consolidated balance sheets. (c) As of June 30, 2023, and October 13, 2022 (acquisition date of Your Super, Inc. assets), liabilities for unearned product sales totaled $7 and $5, respectively. Sales Returns Reserve The Company offers a 30-day satisfaction guarantee and sales return refunds to its customers on their first order or first subscription order. The Company records a liability for estimated sales return refunds, which is based on historical returns and is included within accrued expenses on the consolidated balance sheet. The reserve was approximately $27,769 as of June 30, 2023 and is included in other current liabilities in the accompanying consolidated balance sheets. The Company’s sales returns reserve was comprised of the following: ( Dollars in thousands Acquisition Date To June 30, 2023 Balance, October 13, 2022 (acquisition date) $ 28 Charges to Costs and Expenses 143 Deductions (143 ) Balance as of June 30, 2023 28 |
ACCOUNTS RECEIVABLE NET
ACCOUNTS RECEIVABLE NET | 12 Months Ended |
Jun. 30, 2023 | |
ACCOUNTS RECEIVABLE NET | |
ACCOUNTS RECEIVABLE, NET | NOTE 6. ACCOUNTS RECEIVABLE, NET Account receivable consisted of the following: Dollars in thousands June 30, 2023 June 30, 2022 Accounts receivable $ 270 $ - Less: allowance for doubtful accounts (109 ) - Total $ 161 $ - Allowance for Doubtful Accounts The Company’s allowance for doubtful accounts, based on historical bad debts, was approximately $109,620 and $0 as of June 30, 2023 and June 30, 2022, respectively. The Company’s allowance for doubtful accounts was comprised of the following: ( Dollars in thousands Balance, October 13, 2022 (acquisition date) $ 33 Charges to Costs and Expenses 76 Deductions - Balance as of June 30, 2023 $ 109 |
INVENTORY
INVENTORY | 12 Months Ended |
Jun. 30, 2023 | |
INVENTORY | |
INVENTORY | NOTE 7. INVENTORY The following table presents the detail of inventory: ( Dollars in thousands June 30, 2023 June 30, 2022 Raw material $ 3,043 $ - Work-in-process 201 - Finished goods 745 - Inventory reserve (1,308 ) - Total $ 2,681 $ - |
ACCOUNTS PAYABLE AND ACCRUED LI
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | 12 Months Ended |
Jun. 30, 2023 | |
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | |
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | NOTE 8. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES Accounts payable and accrued liabilities consist of the following: ( Dollars in thousands June 30, 2023 June 30, 2022 Accounts payable $ 4,387 $ 175 Accrued payroll and related liabilities 97 27 Accrued costs for inventory - - Accrual of estimated tax related expense 437 - Accrued expenses including accruals for professional fees, marketing costs, advertising, shipping and logistics 814 54 Accrued interest expenses 100 - Other accrued liabilities including sales tax and returns 10 - Total accounts payable and accrued liabilities $ 5,845 $ 256 |
LOAN PAYABLE
LOAN PAYABLE | 12 Months Ended |
Jun. 30, 2023 | |
LOAN PAYABLE | |
LOAN PAYABLE | NOTE 9. LOAN PAYABLE On August 4, 2022, the Company and its controlled subsidiary HLCO Borrower LLC entered into a credit facility agreement (the “Credit Agreement”) with the Lenders who agreed to extend a credit facility to the Company consisting of up to $150,000,000 in accordance with the terms of the Credit Agreement in aggregate principal amount of Term Loans, the proceeds of which may be used to acquire assets that are deemed eligible by meeting certain criteria established by an administrative agent (the “Administrative Agent”) under the Credit Agreement. Term Loans anticipated to be funded under the Credit Agreement will be in a minimum principal amount of at least $400,000, bear an annual interest rate of 12% and will mature the earlier of 12 months following the final draw down under a Term Loan and a date on which an event of default, as defined in the Credit Agreement, occurs. Term Loans will be repayable in full on their maturity dates and may be voluntarily prepaid in full (but not in part) at the option of the Company and prepaid on a mandatory basis on the sale of the assets underlying a particular Term Loan. Interest on any outstanding Term Loans will be paid monthly. The Company paid an upfront fee of $562,500 recorded as finance costs to the Administrative Agent for the benefit of the Lenders and will pay the Administrative Agent, for its own account, a quarterly fee of $12,500. Further, the Company is paying a daily rate to the Lenders in respect of undrawn funds to meet a minimum funding threshold until such time as funds drawn total $50,000,000. The Company and each of the subsidiaries of HLCO Borrower LLC have agreed to secure all of their future anticipated obligations under the Credit Agreement by granting the Lenders a first priority lien on substantially all of their assets and the Company has agreed to secure all future obligations to be incurred under the Credit Agreement by granting to a collateral agent, for the benefit of the lenders, a first priority lien on all of the capital stock of the subsidiaries held by the Company. In connection with the transactions contemplated by the Credit Agreement, the Company issued to the Administrative Agent a seven-year warrant to purchase, for its own account, up to 1,560,148 shares of the Company’s Seed Preferred Stock at an exercise price of $2.00 per share. The warrant was fully vested on issue date and was immediately expensed as financing costs (See Note 14 - Warrants). On October 27, 2022, the Company was funded $3,000,000 under the Term Loan. During the twelve months ended June 30, 2023, the Company drew down an additional $1,873,000 under the Term Loan facility. During the year ended June 30, 2023 the Company paid $50,000 in administrative fees, an upfront fee of $562,500 and $647,038 as interest in respect to the outstanding loan balance and daily interest on undrawn funds. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Jun. 30, 2023 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | NOTE 10. RELATED PARTY TRANSACTIONS WAOW Group of Companies In November 2021, as amended May 22, 2022 WAOW Entrepreneurship GmbH (“WAOW”) entered into a subscription agreement with the Company whereunder they agreed to purchase 2,140,000 unregistered shares of Seed Preferred stock at $2.00 per share for total proceeds of $4.28 million. During the year ended June 30, 2022 and through June 30, 2023, the Company received cumulative cash proceeds of $3.95 million in respect to the aforementioned subscription and issued 1,975,000 shares of seed preferred stock. A total of $0.33 million remains receivable with respect to the remaining 165,000 shares subscribed as of June 30, 2023. On March 10, 2022, the Company acquired NOEO (See Note 3). At the date of the acquisition, WAOW had outstanding loans with NOEO with a remaining principal balance of EUR139,793. During the year ended June 30, 2022, WAOW advanced an additional EUR18,000 to NOEO. At June 30, 2023, the loan had a balance outstanding of $172,230 (EUR157,793) which is unsecured and accrues interest at 5% per annum, and matured on December 31, 2022. As of June 30, 2023, the loan remained in default and the Company and WAOW are currently negotiating terms of settlement. Accrued and unpaid interest at June 30, 2023 totaled $14,263 (EUR13,068), which is reflected in accounts payable – related party on the balance sheet. Steven Bartlett, Former Director (Flight Story Limited) On January 10, 2022, as amended September 1, 2022, the Company entered into a services agreement with Flight Story Limited (“FSL”), a company controlled by Mr. Bartlett, a former Director of the Company, whereby FSL is providing various services to the Company. Under the terms of the agreement, as amended, FSL is paid $30,000 per month. Further, FSL has been granted non-statutory stock options to purchase a total of 1,000,000 shares of the Company’s Common Stock of which options to purchase 300,000 shares vested on January 10, 2023, and options to purchase an additional 700,000 shares vest in accordance with certain performance-based terms. During the year ended June 30, 2023, FSL exercised fully vested stock options for the acquisition of a total of 300,000 shares of the Company’s Common Stock for cash consideration of $300, or $0.001 per share. During the year ended June 30, 2023, the Company recorded stock-based compensation of $594,863 in respect to the aforementioned option grant. During the year ended June 30, 2023, under the terms of the amended contract, FSL was paid $215,675, with an additional $81,344 accrued and unpaid at June 30, 2023 for services rendered. In addition, R Agency, a marketing company also controlled by Mr. Bartlett, was paid $120,621 during the year ended June 30, 2023, with a total of $63,000 accrued and unpaid as of June 30, 2023 for services rendered. Director fees of $18,750 due to Mr. Bartlett as of June 30, 2023 are included in accounts payable – related party on the balance sheet. Mr. Barlett resigned from the Board effective October 2, 2023. Anabel Oelmann, Director (Trinity Holdings GmbH) On March 10, 2022, the Company entered into and closed a share purchase agreement with Anabel Oelmann pursuant to which the Company acquired 100% of the issued and outstanding capital stock of NOEO GmbH, a German company (“NOEO”), involved in direct-to-consumer brand focusing on adaptogenic herbs and currently focused on three key products which include joint, memory and digestive complexes derived from mushrooms, in exchange for cash consideration of EUR25,000 ($29,800). Ms. Oelmann is a director of the Company and was the sole shareholder of NOEO. See Note 4. At June 30, 2023, Ms. Oelmann, through her controlled corporate entity, Trinity Holdings GmbH, was owed advances totaling $3,275 (EUR3,000) by the Company’s wholly owned subsidiary, NOEO. In addition, at June 30, 2023, a total of $1,070 (EUR980) is included in accounts payable - related party, in respect to expense reimbursements owing to Ms. Oelmann. Kay Koplovitz, Director At June 30, 2023 director fees of $37,500 due to Ms. Koplovitz are included in accounts payable – related party. Justin Figgins (Digital Global Ventures Limited), CFO At June 30, 2023 consulting fees of $27,865 due to Mr. Figgins are included in accounts payable – related party. Michael Kuech and Kristel De Groot On October 14, 2022, Your Super HLCO LLC entered into a consulting agreement with Kristel De Groot, spouse of Michael Kuech, President of Your Super HLCO LLC, pursuant to which Ms. De Groot was appointed as Chief Brand Officer of the Company’s Your Super business on an independent contractor basis. Under this agreement, Ms. De Groot’s annual salary paid to her controlled corporation, Ganesh Ventures Ltd., will be $225,000, and upon mutually agreeable terms, Ms. De Groot will be granted options to purchase 300,000 shares of restricted common stock of the Company subject to certain vesting conditions. Ms. De Groot’s engagement may be terminated by either party with or without cause by delivering 30 days’ advance written notice. Ms. De Groot and Mr. Kuech resigned from their respective positions as Chief Brand Officer and President, respectively, as of May 31, 2023. On June 1, 2023, Your Super HLCO LLC entered into a likeness rights agreement with Michael Kuech and Kristel de Groot, pursuant to which Mr. Kuech and Ms. De Groot granted the Company the non-exclusive right to utilize their likeness to advertise, market and promote the Company’s products. Under this agreement, Mr. Kuech and Ms. De Groot will be paid a monthly consulting fee of $20,000 and 1% of the Company’s monthly net revenue for a term of six months. The agreement may be terminated prior to the expiration date by either party with or without cause by delivering 30 days’ advance written notice. |
STOCKHOLDERS EQUITY (DEFICIT)
STOCKHOLDERS EQUITY (DEFICIT) | 12 Months Ended |
Jun. 30, 2023 | |
STOCKHOLDERS EQUITY (DEFICIT) | |
STOCKHOLDERS' EQUITY (DEFICIT) | NOTE 11. STOCKHOLDERS’ EQUITY (DEFICIT) One April 29, 2021, the Company’s board of directors approved a forward stock split of authorized and issued and, outstanding shares of common stock on four (4) new shares for one (1) share held. Upon effectiveness of the forward split, the authorized shares increased to 300,000,000 shares of common stock and the issued and outstanding shares of common stock increased to 44,000,000 shares of common stock, all with a par value of $0.001. On October 7, 2021, the Company amended its authorized capital to 290,000,000 shares of Common Stock and 10,000,000 shares of preferred stock, $0.001 par value per share, of which 5,000,000 are designated as Seed Preferred Shares, each with a par value of $0.001 per share. On July 8, 2022, the Company’s board of directors and shareholders holding a majority of the Company’s Common Stock approved an amendment to the Company’s Amended and Restated Articles of Incorporation to increase the Seed Preferred Shares from 5,000,000 authorized shares to 7,800,000 shares. In case of any voluntary or involuntary liquidation, dissolution or winding up of the Company, the holders of Seed Preferred Shares then outstanding will be entitled to be paid out of the assets of the Company available for distribution to its stockholders before any payment will be made to the holders of Common Stock by reason of their ownership thereof, an amount per share equal to 1.5 times the Seed Preferred Shares original issue price, plus any dividends declared but unpaid thereon (collectively, the “Seed Liquidation Amount”). If upon any such liquidation, dissolution or winding up of the Company the assets of the Company available for distribution to its stockholders is insufficient to pay the holders of Seed Preferred Shares the full amount to which they shall are entitled, the holders of shares of Seed Preferred Shares will share ratably in any distribution of the assets available for distribution in proportion to the respective amounts which would otherwise be payable in respect of the shares held by them upon such distribution if all amounts payable on or with respect to such shares were paid in full. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, after the payment in full of all Seed Liquidation Amount required to be paid to the holders of Seed Preferred Shares, the remaining assets of the Company available for distribution to its stockholders will be distributed among the holders of Seed Preferred Shares and Common Stock, pro rata based on the number of shares held by each such holder, treating for this purpose all such securities as if they had been converted to Common Stock pursuant to the terms of the Amended and Restated Articles of Incorporation immediately prior to such liquidation, dissolution or winding up of the Company. At such date and time as is specified by our board of directors in connection with, but prior to, the closing of the sale of shares of our Common Stock to the public in a firm-commitment underwritten public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended,, and in connection with such offering the Common Stock is listed for trading on the Nasdaq Stock Market’s National Market, (i) all outstanding Seed Preferred Shares will automatically be converted into shares of Common Stock on a 1:1 (i.e., one share of Seed Preferred Shares for one share of common stock) basis, and (ii) such shares may not be reissued by the Company. The holders of the Seed Preferred Stock also have the right to convert shares of Seed Preferred Stock to Common Stock on a 1:1 basis at any time, upon written notice of conversion to the Company. To the fullest extent permitted under the Nevada Revised Statutes and other applicable law, the holders of Seed Preferred Shares will not be entitled to vote on any matter submitted to the stockholders of the Company for a vote. Any of the rights, powers, preferences and other terms of our Seed Preferred Shares may be waived on behalf of all holders of Seed Preferred Shares by the affirmative written consent or vote of the holders of at least 51% of the Seed Preferred Shares then outstanding. Common Stock During the year ended June 30, 2023 the Company issued a total of 3,200,000 shares of Common Stock to Your Super Inc., in respect to the acquisition of certain assets (See Note 3). During the year ended June 30, 2023 the Company issued a total of 1,400,000 shares of Common Stock to Chopra Global, LLC, in respect to the acquisition of certain assets (See Note 3). During the year ended June 30, 2023 the Company received $1,750,000 in cash proceeds from investors for the accumulated purchase of 875,000 shares of Common Stock at $2.00 per share. During the year ended June 30, 2023, 300,000 stock options were exercised at $0.001 per share. During the year ended June 30, 2023, the Company issued 2,265,000 shares of Common Stock upon conversion of 2,265,000 shares of Seed Preferred Stock. As of June 30, 2023 and June 30, 2022, the Company has a total of 55,199,920 and 44,004,920 shares of Common Stock issued and outstanding, respectively. Seed Preferred Stock During the fiscal year ended June 30, 2022, the Company entered into definitive agreements with non-U.S. persons to issue a total of 5,000,000 shares of Seed Preferred stock in private transactions (the “Transactions”). Under the terms of the Transactions, the Company agreed to sell an aggregate of 5,000,000 Seed Preferred Shares at $2.00 per share for proceeds of $10,000,000. As of June 30, 2023, the Company had received total proceeds of $9,670,000 and is awaiting shortfall payments from one subscriber totaling $330,000. During the year ended June 30, 2023, the Company entered into stock purchase agreements with two subscribers for a total of 225,000 Seed Preferred shares issued at $2.00 per share for total proceeds of $450,000. During the year ended June 30, 2023, 2,265,000 shares of Seed Preferred Stock were converted into 2,265,000 Common Shares. At June 30, 2023 and 2022, the Company had a total of 2,620,000 and 4,660,000 shares of Seed Preferred Stock issued and outstanding, respectively. |
STOCK BASED COMPENSATION
STOCK BASED COMPENSATION | 12 Months Ended |
Jun. 30, 2023 | |
STOCK BASED COMPENSATION | |
STOCK BASED COMPENSATION | NOTE 12. STOCK BASED COMPENSATION On June 10, 2022, the Company’s board of directors approved (i) The Healing Company Inc. 2022 Omnibus Equity Incentive Plan (the “2022 Plan”) and (ii) the granting, in general terms, of awards and options which were previously contractually agreed to be granted upon formal approval of the 2022 Plan (the “Awards”). Stock Options and Stock Awards: During fiscal years 2023 and 2022, the Company granted the following Stock options and Stock awards under its 2022 Plan: Type Role Number of shares Exercise Price /FMV Vesting start Date Vesting Schedule * Term Stock Award Management 200,000 $ 3.75 04/04/2022 A N/A Stock Award Executive Support 150,000 $ 3.75 11/27/2021 A N/A Stock Award Executive 1,000,000 $ 3.75 09/01/2021 A N/A Stock Award Executive 250,000 $ 3.75 09/01/2021 F N/A Stock Award Advisor 250,000 $ 3.75 04/01/2022 G N/A Stock Award Executive 75,000 $ 3.75 06/06/2022 D N/A Stock Award Executive 30,000 $ 3.75 02/16/2023 D N/A Stock Award Executive 600,000 $ 3.75 09/01/2022 L N/A Stock Award Management 125,000 $ 3.75 05/31/2023 G N/A Stock Award Management 175,000 $ 3.75 05/31/2023 M N/A Stock Award Management 200,000 $ 3.75 02/06/2023 M N/A Stock Award Executive 700,000 $ 3.75 01/23/2023 M N/A Total 3,755,000 Stock Option Management 1,000,000 $ 0.001 01/01/2022 A 10 years Stock Option Advisor 300,000 $ 0.001 09/01/2021 D 10 years Stock Option Recruitment Agency 16,250 $ 0.001 06/05/2022 B 10 years Stock Option Marketing Agency 275,000 $ 0.001 04/13/2022 C 10 years Stock Option Board Director 125,000 $ 0.001 12/28/2021 H 10 years Stock Option Board Director 125,000 $ 0.001 01/01/2022 H 10 years Stock Option Brand Strategy Advisor 125,000 $ 0.001 09/07/2021 I 10 years Stock Option IR/PR Agency 700,000 $ 0.001 01/10/2022 J 5 years Stock Option Chief Scientific Advisor 200,000 $ 0.001 12/28/2021 K 10 years Stock Option Marketing Agency 100,000 $ 0.001 08/01/2022 E 10 years Stock Option Financial Advisor 125,000 $ 0.001 09/01/2022 H 10 years Total 3,091,250 * Vesting Schedule: A. The Restricted Stock shall vest over a four (4) year period following the Vesting Start Date with 25% of the Restricted Stock vesting on the one (1) year anniversary of the Vesting Start Date and thereafter will begin vesting on each monthly anniversary of the Vesting Start Date at a rate of 1/36 per month. B. The Option Shares shall be fully vested upon the Vesting Start Date; however, the Participant will be unable to exercise the Option Shares for one (1) year from the Vesting Start Date. C. The Option Shares shall vest with respect to 100,000 shares upon issuance of the option, with an additional 25,000 shares vesting upon achieving $0.5 million D2C revenue, an additional 50,000 shares vesting upon achieving $2 million D2C revenue and an additional 100,000 shares vesting upon achieving $10 million D2C revenue. D. The Restricted Stock shall be fully vested upon the Vesting Start Date. E. The Option Shares shall vest over a one (1) year period following the Vesting Start Date with 25% of the Option Shares vesting on each three (3) month anniversary of the Vesting Start Date. F. The Restricted Stock shall vest over a one (1) year period following the Vesting Start Date with 25% of the Restricted Stock vesting on each three (3) month anniversary of the Vesting Start Date. G. The Restricted Stock shall vest over a two (2) year period following the Vesting Start Date with 12.5% of the Restricted Stock vesting on each three (3) month anniversary of the Vesting Start Date. H. The Option Shares shall vest over a two (2) year period following the Vesting Start Date with 12.5% of the Option Shares vesting on each three (3) month anniversary of the Vesting Start Date. I. The Option Shares shall be fully vested upon the Vesting Start Date and the Participant shall have two (2) years to exercise the Option Shares post termination of Continuous Service. J. The Option Shares shall vest with respect to 300,000 shares after one year from the date of the January 10, 2022 start date of the Services Agreement; 100,000 shares of common stock on getting to 100,000 cross-platform followers; 200,000 shares of common stock on sustained market capitalization of $200 million for a month assuming average daily trading volume (ADTV) of 100,000 shares; 200,000 shares of common stock on sustained market capitalization of $400 million for a month assuming ADTV of 100,000 shares; 200,000 shares of common stock on Nasdaq uplisting. The Optionee exercised a total of 300,000 stock options during the quarter ended June 30, 2023. K. The Option Shares shall vest over a two (2) year period following the Vesting Start Date with 2% of the Option Shares vesting on each six (6) month anniversary of the Vesting Start Date. L. The Restricted Stock shall vest over a two (2) year period following the Vesting Start Date at 1/24 per month. M. The Restricted Stock shall vest over a four (4) year period following the Vesting Start Date with 25% of the Restricted Stock vesting on the one (1) year anniversary of the Vesting Start Date and thereafter will begin vesting on each monthly anniversary of the Vesting Start Date at a rate of 1/48 per month. The following table summarizes the Company’s stock award activities: Number of shares Weighted Average Grant Date Fair Value Per Share Weighted Average Remaining Recognition Period (Years) Nonvested at June 30, 2021 - $ - - Granted 3,100,000 $ 3.75 1.95 Vested (218,750 ) $ 3.75 - Forfeited - $ - - Nonvested at June 30, 2022 2,881,250 $ 3.75 1.66 Granted 1,905,000 $ 3.75 4.00 Vested (673,542 ) $ 3.75 - Forfeited (1,745,000 )* $ 3.75 - Nonvested at June 30, 2023 2,367,708 $ 3.75 1.31 (*) During the year ended June 30, 2023 certain employees entered into separation agreements with the Company whereunder concurrent with the effective date of the termination of their employment with the Company a cumulative 1,745,000 restricted Common Stock awards were forfeited, returned to the Company, and canceled. As a result of the forfeiture, the Company recorded $0.8 against previously expensed stock-based compensation in respect to earned and forfeit stock awards and eliminated $5.7 million of previously deferred compensation expense. The Company recorded $2.98 million and $1.88 million as stock-based compensation expense related to stock awards during the fiscal years ended June 30, 2023 and 2022, respectively. Deferred compensation expense associated with unvested stock awards is $8.67 million as of June 30, 2023. The weighted average period over which these costs are expected to be recognized is approximately 1.31 years. The following table summarizes the Company's stock option activities: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Term in Years Aggregate Intrinsic Value Outstanding at June 30, 2021 - $ - - $ - Granted 3,166,250 $ 0.001 10.00 - Exercised - - - - Cancelled - - - - Outstanding at June 30, 2022 3,166,250 $ 0.001 7.60 $ - Granted 225,000 0.001 10.00 Exercised (300,000 ) - Cancelled - - Outstanding at June 30, 2023 3,091,250 $ 0.001 7.73 $ - Options exercisable at June 30, 2023 1,375,250 $ 0.001 8.89 $ - The stock options were valued using Black-Scholes pricing model. The Black-Scholes pricing model applied the following assumptions: risk-free interest rate of 3.26%, expected term of 5 to 10 years, expected volatility of 62.49% and dividend yield of 0%. The Company recorded $3.13 million and $3.44 million, respectively as stock based compensation expense related to its stock options for the fiscal years ended June 30, 2023 and 2022, respectively. Unamortized compensation expense associated with unvested stock options is $6.15 million as of June 30, 2023. The weighted average period over which these costs are expected to be recognized is approximately 1.09 years. |
WARRANTS
WARRANTS | 12 Months Ended |
Jun. 30, 2023 | |
WARRANTS | |
WARRANTS | NOTE 13. WARRANTS Warrant to Purchase Seed Preferred Stock On August 4, 2022, in accordance with a credit facility (See Note 10) the Company initially issued to the Administrative Agent a seven-year warrant to purchase up to 1,300,123 shares of the Company’s Seed Preferred Stock at an exercise price of $2.00 per share. As an inducement for the $3.0 million loan and for a waiver of certain terms of the credit facility with respect to this loan, we issued to the Administrative Agent an amended and restated warrant increasing the number of warrant shares from 1,300,123 shares of our Seed Preferred Stock to 1,560,148 shares of this stock. The stock warrants vested immediately and were valued using the Black-Scholes pricing model. The Black-Scholes pricing model applied the following assumptions: risk-free interest rate of 2.73%, expected term of 7 years, expected volatility of 62.56% and dividend yield of 0%. The Company recorded $4.1 million as financing costs, included in professional and consulting fees, during the year ended June 30, 2023. Warrants to purchase Seed Preferred Stock transactions are summarized as follows: Number of shares Weighted Average Exercise Price ($) Weighted Average Remaining Recognition Period (Years) Balance, June 30, 2022 - $ - - Warrants issued 1,560,148 $ 2.00 7.00 Warrants expired - $ - - Balance, June 30, 2023 1,560,148 $ 2.00 6.10 Number of Warrants Exercise Price ($) Expiry Date 1,560,148 2.00 August 04, 2029 Warrant to Purchase Common Stock On September 9, 2022, in conjunction with a Loan Purchase and Sale Agreement, (See Note 3) the Company issued CircleUp a warrant to purchase 1,500,000 restricted shares of the Company’s common stock at an exercise price of $2.00 per share. This warrant will begin to vest on the one-year anniversary of the closing of the purchase of the Loan with 12.5% of the Warrant amount (187,500 shares) vesting on that date and the remaining portion of the Warrant vesting in seven quarterly installments of 187,500 shares each over the next seven quarters. Vesting of the Warrant will be accelerated upon the occurrence of a sale or merger of the Company. The Warrant will terminate on the seventh anniversary of the closing date and will be subject to customary adjustments of the warrant price and number of shares for splits, stock dividends, recapitalizations and the like. The stock warrants were valued using Black-Scholes pricing model. The Black-Scholes pricing model applied the following assumptions: risk-free interest rate of 4.25%, expected term of 3 years, expected volatility of 60% and dividend yield of 0%. The Company has valued the warrants as of the transaction date with a total value of $687,000, as part of purchase consideration. The first tranche of warrants do not initially vest until the one year anniversary of the agreement date, and therefore there is no financial impact as a result of the warrant during the year ended June 30, 2023. On November 10, 2022, the Company issued one vendor a warrant to purchase 150,000 restricted shares of the Company’s common stock at an exercise price of $2.00 per share under certain Tri-Party Assignment and Settlement Agreement where under the outstanding balance payable of $1,077,929 was agreed to be settled by the issuance of common stock purchase warrants (the “Warrant”). This Warrant shall vest over a period of three years, pro rata on monthly basis, beginning on November 10, 2022. The Warrant will terminate on the seventh anniversary of the closing date and will be subject to customary adjustments of the warrant price and number of shares for splits, stock dividends, recapitalizations and the like. The stock warrants were valued using Black-Scholes pricing model. The Black-Scholes pricing model applied the following assumptions: risk-free interest rate of 3.89%, expected term of 7 years, expected volatility of 63.52% and dividend yield of 0%. The Company has valued the warrants as of the transaction date with a total value of $427,000 which amount was recorded as a noncash payment, and the gain on debt settlement of $650,429 recorded as other income. The Company recorded $95,000 against other current liabilities during the year ended June 30, 2023 in respect to the amortization of the vesting period of the warrant. The unamortized amount associated with unvested warrants is $333,000 as of June 30, 2023. The weighted average period over which the outstanding balance is expected to be recognized is approximately 6.37 years. Transactions involving Warrants to purchase Common Stock are summarized as follows: Number of shares Weighted Average Exercise Price ($) Weighted Average Remaining Recognition Period (Years) Nonvested at June 30, 2022 - $ - - Granted 1,650,000 $ 2.00 7.00 Vested (33,334 ) - 6.62 Forfeited - - - Nonvested at June 30, 2023 1,616,666 $ 2.00 6.37 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Jun. 30, 2023 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | NOTE 14. COMMITMENTS AND CONTINGENCIES From time to time, the Company may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm business. Management is currently not aware of any such legal proceedings or claims that could have, individually or in the aggregate, a material adverse effect on our business, financial condition, or operating results. Commitments The following is a summary of the Company’s significant commitments. (a) Effective December 28, 2021, the Company entered into a two-year Board Advisory Agreement with Deepak Chopra LLC for services to the Advisory Board of the Company. As consideration, Deepak Chopra LLC will receive $12,500 for each fiscal quarter. Additionally, the Advisor has been granted 200,000 Non Statutory Stock options with a term of 10 years which vest as to 25% each 6 months over two years for exercise at $0.001 per share. Further under the agreement, the Company is to make an annual donation to The Chopra Foundation for $50,000, with the first annual donation to be paid within thirty days of the date of execution of the agreement. The Company remitted the required donation in April 2022. During the year ended June 30, 2023, the Company recorded $375,000 as stock-based compensation in respect to the granted options. (b) On January 1, 2022, the Company entered into an independent contractor agreement with KET Consulting LLC (“KET”) to provide various marketing services, brand and go-to-market strategy and other operational services at the direction of the Board and the CEO. The contract has an initial term of 18 months and is renewable by mutual consent for a further term. Compensation is $240,000 per annum commencing January 1, 2022, payable monthly in arrears. Additionally, the Advisor has been granted 1,000,000 Non-Statutory Stock options with a term of 10 years which vest as to 25% on the one-year anniversary of January 1, 2022 and 1/36 each month thereafter, at an exercise at $0.001 per share. During the year ended June 30, 2023 the Company recorded stock based compensation of $1,175,728. On June 30, 2023, the independent contractor agreement with KET Consulting was extended for an additional 60 days under the same terms. (c) On March 23, 2022, the Company entered into an agreement with Mint Performance Marketing (“Mint”) for certain marketing services including development of an e-commerce strategy, paid social media, influencer marketing, affiliate marketing and other creative services with a term of one year and fees payable within 15 days of invoice in the approximate amount of $35,000 for the identified scope of work. In addition, under the terms of the agreement Mint is entitled to a 5% share of any future Shopify s-store revenue associated with developed content, net of returns and promotions. During the year ended June 30, 2022, the founder of Mint was granted a total of 275,000 non statutory stock options, 100,000 of which vested on grant date, with a further 175,000 vesting upon the occurrence of reaching certain income targets with respect to certain direct to consumer marketing programs. During the year ended June 30, 2023, none of the conditions had been met for the additional options to vest. (d) On August 1, 2022, the Company entered into a Consulting Agreement with RayRos Holdings LLC for an initial term of three months, automatically renewable for three successive three-month terms, at a rate of $5,000 per month for marketing strategy and assessment and partnership development services focused on the wellness and healing sector. In addition, the Company granted a non-statutory stock option to purchase 100,000 shares of common stock, exercisable at $0.001 per share to the founder, Mr. John Hoekman, which options vest quarterly as to 25% each quarter from grant date, August 1, 2022. During the year ended June 30, 2023, the Company recorded stock-based compensation of $281,250. (e) On September 1, 2022, the Company entered into a consulting agreement with Lee Forster for an initial term of 24 months, with automatic successive renewals unless otherwise terminated 30 days prior to the end of the current term, whereunder Mr. Forster shall act as an advisor to the Company on financing and fundraising efforts, growth opportunities, endorsements and other corporate strategy at a rate of $3,125 per month. In addition, the Company granted a non-statutory stock option to purchase 125,000 shares of common stock, exercisable at $0.001 per share to Mr. Forster, which options vest over a two year period following the Vesting Start Date with 12.5% of the Option Shares vesting on each three month anniversary of the Vesting Start Date. During the year ended June 30, 2023 the Company recorded $192,188 as stock based compensation in respect to the aforementioned agreement. (f) On February 14, 2023, the Company entered into a services agreement with Peter Kash. Under the terms of the agreement, Mr. Kash will be employed as an independent contractor in order identify growth opportunities, among other services. The agreement has a term of two (2) years, unless earlier terminated, and provides for compensation in the form of stock options, which options shall be granted upon mutual agreement of the exercise price. Under the terms of the option agreement Mr. Kash will be granted a total of 75,000 incentive stock options, vesting as to 1/8 each quarter from grant date. In addition, Mr. Kash shall be entitled to certain additional compensation up to an additional 225,000 stock options for each qualifying entity acquired by the Company. At June 30, 2023, the Company and Mr. Kash have not yet determined an agreeable exercise price for the aforementioned options. (g) On February 14, 2023, the Company entered into a services agreement with Dr. Linda Friedland. Under the terms of the agreement, Dr. Friedland will be employed as an independent contractor in order identify growth opportunities, among other services. The agreement has a term of two (2) years, unless earlier terminated, and provides for compensation in the form of stock options, which options shall be granted upon mutual agreement of the exercise price. Under the terms of the option agreement Dr. Friedland will be granted a total of 75,000 incentive stock options, vesting as to 1/8 each quarter from grant date. In addition, Mr. Kash shall be entitled to certain additional compensation up to an additional 225,000 stock options for each qualifying entity acquired by the Company. At June 30, 2023, the Company and Dr. Friedland have not yet determined an agreeable exercise price for the aforementioned options. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Jun. 30, 2023 | |
INCOME TAXES | |
INCOME TAXES | NOTE 15. INCOME TAXES The tax effect of the significant permanent differences are as follows: ( Dollars in thousands June 30, June 30, 2023 2022 Statutory income tax rate 21 % 21 % Income tax recovery at statutory rate $ (4,475 ) $ (1,735 ) Tax effect of: Charitable contributions - 11 Change in valuation allowance (4,475 ) (1,724 ) Income tax provision $ - $ - The significant components of deferred income tax assets and liabilities are as follows: ( Dollars in thousands June 30, June 30, 2023 2022 Deferred income tax assets Net operating losses carried forward $ 2,003 $ 674 Impairment of goodwill 812 - Stock based compensation 2,574 1,119 Warrants issued as financing costs 878 - Gross deferred income tax asset 6,267 1,793 Valuation allowance (6,267 ) (1,793 ) Net deferred income tax asset $ - $ - As of June 30, 2023, the Company had approximately $9.4 million of net operating loss carryforwards (“NOLs”) available to reduce future taxable income at various times through 2040, except for the net operating losses for the years ended June 30, 2023 and 2022 which will carryforward indefinitely, limited to 80% of each year’s taxable income. The Company’s income tax filings are subject to audit by various taxing authorities. The Company’s open audit periods are 2020-2023. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based on the assessment, management has established a full valuation allowance against all the deferred tax assets for every period because it is more likely than not that all of the deferred tax assets will be realized. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Jun. 30, 2023 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE 16. SUBSEQUENT EVENTS On June 30, 2023, the Company agreed to sell to Althea DRF Lifesciences Limited 1,250,000 units of common membership interest in its indirectly wholly owned subsidiary, Chopra HLCO LLC for an aggregate cash purchase price of $2,500,000, or $2.00 per unit. The transaction closed on July 20, 2023. Also on June 30, 2023, the Company entered into an agreement to sell to DRF Althea (UK) Limited (i) 600,000 units of Membership Interest in Chopra HLCO LLC, valued at $1,200,000, or $2.00 per unit, in exchange for the intellectual property for two existing products developed by Althea UK and the future delivery of an additional three products currently in development by Althea UK and (ii) an additional 525,000 units of Membership Interest in the Company valued at $1,050,000, $2.00 per share, split into seven tranches of 75,000 units of the Membership Interest in the Company, with such tranches being issued in exchange for the future delivery to the Company by Althea UK of up to an additional seven to-be-developed IP products and with each single tranche corresponding to one IP product to be delivered to the Company, all subject to the conditions specified in the related subscription agreements. The closing of the sale of the Unrestricted Development Units and the Restricted Development Units took place on June 30, 2023. The restricted Development Units are subject to a claw back under certain circumstances. On July 5, 2023, 1,975,000 shares of Seed Preferred stock at an issue price of $2.00 per share were converted into 1,975,000 shares of Common stock at a conversion price of $2.00 per share. On July 6, 2023, the Company entered into a services agreement with Stray Digital for digital marketing and search engine optimization services for a term of twelve months commencing on July 15, 2023. Stray Digital will receive a monthly fee of $20,000 in each of the first three months of the engagement and $26,000 each month thereafter. In addition, Stray Digital will receive a share of all online Shopify net revenue from sales in the Unites States and Europe, and an equity grant of an option to purchase 50,000 shares of the Company’s stock. On July 7, 2023, the Company issued 175,000 unregistered, restricted shares of Common Stock to an individual subscriber under the terms of a private placement at $2.00 per share for total proceeds of $350,000. On July 25, 2023, the Board of Directors increased the size of the Board to seven directors and appointed Steven Barr to serve as a member of the Board. On August 24, 2023, the Company announced a restructuring plan to reduce overhead costs by approximately 30% and eliminate workforce redundancies that resulted from the acquisitions of Your Super and Chopra earlier in the year. As of August 30, 2023, the Washington State Department of Revenue has a tax warrant for the collection of unpaid sales taxes related to Your Superfoods, Inc. in the amount of $6,785.38. The Company has engaged a sales tax expert to file all tax returns and rectify the issue. As of the filing date, no letter has been issued to the Company stating that the lien has been lifted. On September 7, 2023, the Company announced the appointment of biotech entrepreneurs and investors, Dr. Linda Friedland and Dr. Peter Kash, to the Company’s advisory board. On October 2, 2023, Steven Bartlett resigned from the Company’s Board of Directors, effective as of the date of resignation. Litigation On or about April 12, 2023, the Company received a letter from litigation counsel to Google LLC (“Google”) that alleged that the Company’s indirectly wholly-owned subsidiary, Your Super, Inc. (“Your Super”), owed $236,423.15, plus continuing interest and fees, for advertising services rendered by Google to Your Super. After investigating Google’s allegations, Your Super negotiated and entered into a settlement agreement with Google dated July 25, 2023. Pursuant to that settlement agreement, Your Super agreed to pay Google an aggregate of $203,373 in monthly installments of $16,977.63 beginning July 31, 2023, and Your Super and Google mutually released claims against the other. In 2019, Your Super entered into an agreement with WGST, Inc., which produces “Food Quest” with Mario and Courtney Lopez, and WGST Productions, Inc. In or around the end of July 2023, after the original agreement had terminated, representatives of Mario Lopez contacted Your Super and alleged that Your Super was displaying the content produced for it by WGST in violation of the rights granted to Your Super under the agreement. The representatives of Mr. Lopez threatened to bring legal action against Your Super unless it made additional payment or agreed to buy new footage. A new production agreement was entered into on October 12, 2023, between the Company and WGST Productions, Inc., the successor to WGST, Inc., providing, among other things, for a full release of claims by WGST Productions, Inc., WGST, Inc., Mario and Courtney Lopez arising under the original agreement or for use of the content created under the original agreement. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Jun. 30, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Principles of Consolidation | The consolidated financial statements include the accounts of The Healing Company and its 100% controlled subsidiaries, NOEO GmbH, NOEO, Inc., HLCO Borrower LLC, Your Super HLCO, LLC, Chopra HLCO LLC and the Your Super HLCO, LLC subsidiaries. All significant intercompany balances and transactions have been eliminated. “The Healing Company”, the “Company”, “we”, “our” or “us” is intended to mean The Healing Company, including the subsidiaries indicated above, unless otherwise indicated. |
Use of Estimates | The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. The Company bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgements about the carrying values of its assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates, and the Company includes any revisions to its estimates in its results for the period in which the actual amounts become known. Significant estimates in the period include the preliminary purchase price allocation with respect to the acquisition of the assets and liabilities of Your Super Inc. and Chopra HLCO, the allowance for doubtful accounts on accounts and other receivables, inventory allowance and impairment, valuation and useful lives of fixed assets, valuation of common stock and stock warrants, stock option valuations, imputed interest on due to related parties, and deferred tax valuation allowance. |
Income and Other Taxes | Income taxes are accounted for using the asset and liability method in accordance with ASC 740, Income Taxes The Company records net deferred tax assets to the extent they believe these assets will more-likely-than-not be realized. In making such determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations. In the event the Company was to determine that it would be able to realize its deferred income tax assets in the future in excess of its net recorded amount, the Company would make an adjustment to the valuation allowance which would reduce the provision for income taxes. |
Net Loss per Common Share | The Company computes net income (loss) per share in accordance with ASC 260, Earnings per Share The table below reflects the potentially dilutive securities at the end of each reporting period. June 30, 2023 June 30, 2022 Seed Preferred stock (Convertible to Common stock 1:1) 2,620,000 4,660,000 Seed Preferred warrants (Convertible to Common stock 1:1) 1,560,148 - Common stock warrants 1,650,000 - Stock options 3,091,250 3,166,250 Total 8,921,398 7,826,250 |
Stock-Based Compensation | The Company accounts for stock option awards granted to employees, non-employees, and directors using the accounting guidance in ASC 718 “Stock Compensation” (“ASC 718”). In accordance with ASC 718, we estimate the fair value of service-based options and performance-based options on the date of grant, using the Black-Scholes pricing model. We recognize compensation expense for stock option awards over the requisite or implied service period of the grant. Compensation expense is recognized on a straight-line method over the requisite service period. Forfeitures are accounted for as they occur. |
Cash and Cash Equivalents | The Company defines cash and cash equivalents as highly liquid investments with original maturities of 90 days or less at the time of purchase. The Company also considers amounts in transit from payment processors for customer credit card and debit card transactions to be cash and cash equivalents. At June 30, 2023 and June 30, 2022, the Company’s cash and cash equivalents consisted primarily of cash held in checking accounts, and payment in transit from payment processors for customer credit card and debit card transactions. As of June 30, 2023 and June 30, 2022, cash and cash equivalents was $1.5 million and $6.5 million, respectively. |
Concentration of Risk | Financial instruments that subject the Company to significant concentrations of credit risk primarily consist of cash and cash equivalents. The Company maintains substantially all of its cash and cash equivalents with three financial institutions, which, at times, may exceed federally insured limits. The Company has not incurred any losses associated with this concentration of deposits. The Company currently has bank deposits with financial institutions in the U.S. which exceed FDIC insurance limits. FDIC insurance provides protection for bank deposits up to $250,000, so there were cumulative uninsured balances of $1.25 million and $6.25 million in the parent and its US based subsidiaries as of June 30, 2023 and June 30, 2022, respectively. There were no uninsured bank deposits with a financial institution outside the U.S. All uninsured bank deposits are held at high quality credit institutions. |
Foreign Currency Translation and Transactions | The Company uses the U.S. Dollar as the reporting currency for its financial statements. Functional currency is the currency of the primary economic environment in which an entity operates. The functional currency of the Company’s Germany and Netherlands subsidiaries are the local currencies. The assets and liabilities of the Company’s foreign subsidiaries are translated into US Dollars using exchange rates in effect at the consolidated balance sheet date. Revenues and expenses are translated using the average exchange rates prevailing during the period. Exchange-rate differences resulting from translation adjustments are accounted for as a component of accumulated other comprehensive loss. Borrowings in foreign currencies are recorded at the rate of exchange at the time of the transaction and are adjusted for any exchange rate gains or losses as of the balance sheet date. Translation of amounts from Euro into US$ have been made at the following exchange rates for the periods ended June 30, 2023 and June 30, 2022: 2023 2022 Period-end Euro: US$ exchange rate $ 1.0915 $ 1.0476 Period-average Euro: US$ exchange rate $ 1.0459 $ 1.0725 Translation gains and losses that arise from exchange rate fluctuations from transactions denominated in a currency other than the functional currency are translated, as the case may be, at the rate on the date of the transaction and included in the results of operations as incurred. ASC Topic 220, “ Comprehensive Income |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts receivable are stated net of an allowance for doubtful accounts. When management becomes aware of circumstances that may decrease the likelihood of collection to a point where a receivable is no longer probable of being collected, it records an allowance against amounts due, which reduces the receivable to the amount that management reasonably believes will be collected. For all other customers, management determines the adequacy of the allowance based on historical loss patterns, the number of days that billings are past due, and an evaluation of the potential risk of loss associated with specific accounts. The Company does not have any off-balance-sheet credit exposure related to its customers. As of June 30, 2023 and June 30, 2022, the allowance for doubtful accounts amounted to $109,620 and $0, respectively. |
Inventories | Inventories consist primarily of raw materials, work-in-process (blended superfood powder) and finished goods. Finished goods and work-in-process include direct materials, finished product kits, finished products, third-party blender and other overhead costs involved in manufacturing for e-commerce sales. The Company values inventory using the standard costing method whereunder product costs are allocated based on standard rates for materials, labor, and overhead. The Company analyses actual costs at regular intervals and accounts for any variance in costs of goods sold. Inventories are stated at the lower of cost or net realizable value, with cost determined using the first-in first-out method. Inventories have been reduced by an allowance for excess, obsolete and unsaleable inventories. The allowance is an estimate based on our management’s review of inventories on hand compared to estimated future usage and sales. The Company performs cycle counts of inventories at its warehouse and distribution center throughout the year. An allowance for inventory shrinkage is established for estimated inventory shrinkage since the last physical inventory date through the reporting date. |
Property and Equipment | Property and equipment are stated at cost, net of accumulated depreciation and amortization, and depreciated over their estimated lives using the straight-line method. The useful lives of leasehold improvements are determined by the economic useful lives of the assets or the term of the leases, whichever is shorter. Depreciation and amortization is provided for by the straight-line method over the estimated useful lives as follows: Property and Equipment Estimated Useful Life Computer and other equipment 3-7 years Office furniture and fixtures 5-7 years Leasehold improvements Shorter of lease or useful life Expenditures for repairs and maintenance are expensed as incurred. When assets have been retired or sold, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized in the results of operations. |
Goodwill and Intangible Assets | Goodwill represents the excess of the purchase price over the fair market value of the net assets (including intangibles) acquired on October 13, 2022 and March 3, 2023, respectively. The Company has implemented the Business Combinations Topic of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 350, Intangibles Goodwill and Other. The Company reviews intangible assets (with a definite life), excluding goodwill and tradenames, for impairment when events or changes in circumstances indicate the carrying amount may not be recoverable. We measure the recoverability of these assets by comparing the carrying amounts to the future undiscounted cash flows that the assets are expected to generate. If the carrying value of the assets are not recoverable, the impairment recognized is measured as the amount by which the carrying value of the asset exceeds its fair value. For the fiscal year ended June 30, 2023, the Company recorded impairment of goodwill of $3,868,721. For the fiscal year ended June 30, 2022, the Company recorded impairment of intangible assets of $138,366. The Company tests goodwill, accreditation and trade names for impairment at least annually, or more frequently if events or changes in circumstances indicate that the asset may be impaired. There were no goodwill, accreditation or trade names impairments for the periods presented. Amortization of customer relationships and non-compete agreements on a straight-line basis totaled $189,581 for the fiscal year ended June 30, 2023. |
Business Combinations | The Company accounts for business combinations using the purchase method of accounting. The purchase method requires the Company to determine the fair value of all acquired assets, including identifiable intangible assets and all assumed liabilities. The total cost of acquisitions is allocated to the underlying identifiable net assets, based on their respective estimated fair values. Determining the fair value of assets acquired and liabilities assumed requires management’s judgment and the utilization of independent valuation experts, and often involves the use of significant estimates and assumptions, including assumptions with respect to future cash inflows and outflows, discount rates and asset lives, among other items. |
Long-Lived Assets | The Company evaluates the recoverability of its long-lived assets for impairment, other than goodwill, whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to undiscounted future net cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Fair value estimates are based on assumptions concerning the amount and timing of estimated future cash flows. The Company had no long-lived asset impairments as of June 30, 2023 and June 30, 2022, respectively. |
Contract assets | In accordance with ASC 606-10-45-3, a contract asset is the Company’s right to payment for goods and services already transferred to a customer if that right to payment is conditional on something other than the passage of time. The Company will recognize a contract asset when it has fulfilled a contract obligation but must perform other obligations before being entitled to payment. There were no contract assets at June 30, 2023 and June 30, 2022. |
Contract liabilities | Deferred revenue, a contract liability, primarily consists of arrangement consideration collected in advance of order fulfillment and unsatisfied obligations related to outstanding loyalty points. The Company expects that the majority the revenue deferrals recorded at the balance sheet date will be recognized as revenue in the next 12 months as performance obligations are satisfied. Sales taxes collected from customers and remitted to government authorities are excluded from revenue and deferred revenue. Ownership passes to customers upon shipment. Deferred revenue represents amounts collected from, or invoiced to, customers in excess of revenues recognized, primarily from the billing of annual subscription agreements. Also included in contract liabilities is the value of loyalty points with respect to the Company’s loyalty program described below. The value of these contract liabilities will increase or decrease based on the timing of invoices and recognition of revenue as customers use their rewards points. The Company offers a loyalty program to its customers which incorporates a points system for activities on the Company’s website, such as reviews, referrals, and purchases. Customers accumulate points based on their level of spending and type of participation. The points can be redeemed for purchases of goods offered at the Company’s websites. The Company defers the stand-alone selling price of earned reward points, net of rewards not expected to be redeemed (known as “breakage”), as liability for outstanding loyalty points. To estimate the stand-alone selling price for the points, the Company considers the stated redemption value per point dictated by the terms of the loyalty programs and then estimates the future breakage of reward points based on historical member activity. Upon redemption of points by customer, the Company recognizes revenue and reduces corresponding deferred revenue. The Company records breakage revenue of unredeemed points based on expected customer redemptions. The Company’s total contract liability balance was $2.34 million and $0 at June 30, 2023 and June 30, 2022, respectively, of which $211,927 relates to the liability for outstanding loyalty points for Your Super and $1.34 million relates to customer subscription deposits with respect to membership fees from the Chopra wellness app which are collected in advance and amortized over the one (1) year term of the membership, advances on retreat packages and prepaid licensing fees. |
Fair Value Measurements | The Company's financial instruments primarily consist of cash and cash equivalents, accounts receivable, contracts receivable, accounts payable and accrued liabilities, contracts receivable recourse, deferred revenue, debt and a capital lease obligation. The carrying values of the Company's financial instruments approximate fair value. FASB ASC 820, Fair Value Measurements and Disclosure ASC 820 requires that assets and liabilities measured at fair value are classified and disclosed in one of the following three categories: Level 1 - Quoted market prices for identical assets or liabilities in active markets or observable inputs; Level 2 - Significant other observable inputs that can be corroborated by observable market data; and Level 3 - Significant unobservable inputs that cannot be corroborated by observable market data. The Company believes that the carrying amounts of cash and cash equivalents, accounts payable, and short-term borrowings approximate fair value based on either their short-term nature or on terms currently available to the Company in financial markets. |
Revenue Recognition | Revenue is recognized when a customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. The Company accounts for revenue contracts with customers by applying the requirements of ASC 606, Revenue from Contracts with Customers i. Identification of the contract with a customer. ii. Identification of the performance obligations in the contract. iii. Determination of the transaction price. iv. Allocation of the transaction price to the performance obligations in the contract. v. Recognition of revenue as the entity satisfies a performance obligation. When a customer purchases product from the Company, ownership of the product transfers to them at the point of shipment and the Company has an enforceable right to payment for product sold at that time. Accordingly, the customer has control of the product purchased from the Company starting at the point of shipment. The risk of loss or damage during shipment resides exclusively with the shipping carrier and the Company assumes no obligation for loss or damage of product while in transit to the customer. As a result of this change in terms of sale, the Company recognizes revenue, including shipping revenue, when performance obligations are satisfied through the transfer of control of promised goods to the Company’s customers, which is at the point of shipment. Sales are recorded net of returns, discounts, and any taxes collected from customers and remitted to government authorities. The Company generates revenues from a diversified mix of e-commerce activities with the majority of revenue earned through e-commerce direct sales to consumer. The Company’s e-commerce activities include the sale of organic nutritional superfood powder mixes online, through the Company’s website YourSuper.com, and sales of the Chopra wellbeing line available at Chopra.com. During the fiscal year ended June 30, 2023, the Company’s direct to consumer sales of products accounted for 67% of total revenue. In addition, the Company records revenue from the sale of memberships to the Chopra Wellbeing and Meditation App. Revenues from the membership are collected in advance and recognized over the term of the membership. Finally, the Company records net revenue in the form of commissions with respect to sales of attendance at its wellness retreats at various US based locations. Revenue for wellness retreats is deferred upon purchase and recognized at the time of the event with the transfer of services to the customer. The Company records revenues from the sales on a “gross” basis pursuant to ASC 606-10 Revenue Recognition – Revenue from Contracts with Customers, when the Company controls the specified good before it is transferred to the end customer and have the risks and rewards as principal in the transaction, such as responsibility for fulfillment, retaining the risk for collection, and establishing the price of the products. If these indicators have not been met, or if indicators of net revenue reporting specified in ASC 606-10 are present in the arrangement, revenue is recognized net of related direct costs. |
Cost of Revenue | Cost of revenue primarily consists of costs associated with the purchase of superfood products and materials and packaging for its Chopra wellness kits from third-party manufacturers. These costs include ingredients, packaging, third party manufacturing costs and freight-in shipping. |
Product Warranties | The Company’s provision for estimated future warranty costs is based upon the historical relationship of warranty claims to sales. Based upon historical sales trends and warranties, it has been concluded that no warranty liability is required as of June 30, 2023 and June 30, 2022. To date, product allowance and returns have been minimal and, based on experience, the Company believes that product returns will continue to be minimal. |
Shipping and Logistics Expenses | Shipping and logistics expenses consist primarily of costs incurred to ship products to the customer. If shipping and handling activities are performed after the customer obtains control of the good, then an entity may elect to account for shipping and handling as fulfillment activities and not promised services that require further evaluation under ASC 606. If the entity elects this accounting policy, the costs related to the shipping and handling activities should be accrued when the entity recognizes revenue for the related promised goods. In addition, if this accounting policy is elected, the entity must apply it consistently to similar transactions and provide the accounting policy disclosures required by ASC 235. The Company has elected to record shipping and handling activities performed after the customer obtains control of the product as fulfillment costs. These expenses are presented as operating expenses in the accompanying consolidated statements of operations and comprehensive loss. |
Business Segments | The Company uses the “management approach” to identify its reportable segments. The management approach designates the internal organization used by management for making operating decisions and assessing performance as the basis for identifying the Company’s reportable segments. Using the management approach, the Company determined that it has three operating segments: Ecommerce sales of wellness products, sales of memberships to its wellness app and operation of its wellness focused retreats. |
Commitments and Contingencies | The Company accounts for contingencies in accordance with ASC 450-20, Contingencies. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon information available at this time that these matters will have a material adverse effect on the Company’s financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows. |
Recent Accounting Pronouncements | The Company has implemented all new accounting pronouncements that are in effect and that may impact its consolidated financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Jun. 30, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schdule of potentially dilutive securities | June 30, 2023 June 30, 2022 Seed Preferred stock (Convertible to Common stock 1:1) 2,620,000 4,660,000 Seed Preferred warrants (Convertible to Common stock 1:1) 1,560,148 - Common stock warrants 1,650,000 - Stock options 3,091,250 3,166,250 Total 8,921,398 7,826,250 |
Schdule of Foreign Currency Translation and Transactions | 2023 2022 Period-end Euro: US$ exchange rate $ 1.0915 $ 1.0476 Period-average Euro: US$ exchange rate $ 1.0459 $ 1.0725 |
Schdule of estimated useful lives | Property and Equipment Estimated Useful Life Computer and other equipment 3-7 years Office furniture and fixtures 5-7 years Leasehold improvements Shorter of lease or useful life |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 12 Months Ended |
Jun. 30, 2023 | |
ACQUISITIONS | |
summary of the estimated fair values of acquisition costs | Consideration Paid – Fair Value Acquisition costs – Cash $ 3,500 Stock issued: Number of Shares issued: 1,400,000 Value per share $ 0.15 Total stock fair value 210 Total consideration $ 3,710 Consideration Paid – Fair Value Debt acquisition costs – Cash $ 2,000 Debt acquisition cost -1,500,000 common stock purchase warrants 34 Stock issued: Number of Shares: 3,200,000 Value per share $ 0.15 Total stock fair value 480 Total consideration $ 2,513 |
summary of the estimated fair values of the assets acquired and liabilities | Tangible assets acquired: Cash $ 300 Inventory 216 Accounts receivable - Prepaid expenses and other assets 345 Total assets acquired 861 Assumed liabilities Contract liabilities (2,187 ) Total liabilities assumed (2,187 ) Net tangible assets/(liabilities) (1,326 ) Total liabilities acquired (1,326 ) Goodwill 5,036 Total Net asset acquired $ 3,710 Tangible assets acquired: Cash $ 363 Inventory 4,953 Accounts receivable 422 Prepaid expenses and other assets 836 Property and equipment 78 Security deposits 63 Deferred income taxes 45 Total assets acquired 6,760 Assumed liabilities Accounts payable and accrued liabilities (7,815 ) Contract liabilities (259 ) Income tax payable (41 ) Total liabilities assumed (8,115 ) Net tangible assets/liabilities (1,355 ) Intangible assets acquired: Goodwill $ 3,868 Total Net asset acquired $ 2,513 |
Schedule Of supplemental consolidated financial results of the Company | Year ended June 30, 2023 2022 Revenue $ 12,540 $ 32,462 Net income (loss) $ (523 ) $ (15,705 ) Weighted average number of common shares used in per share calculations 50,768,533 44,001,550 Basic and Diluted Loss Per Common Share $ (0.01 ) $ (0.36 ) |
Schedule Of net assets on acquisition | (Dollars in thousands) March 10, 2022 Cash and cash equivalent $ 8 Inventory 8 Prepaid expenses 69 Recoverable value added tax 21 Intangible assets 68 Accounts payable and accrued liabilities (33 ) Advances and accounts payable, related party (8 ) Loan payable, related party (158 ) Net assets (25 ) Consideration: Cash purchase 28 Additions to intangible assets $ 53 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Jun. 30, 2023 | |
PROPERTY AND EQUIPMENT | |
Schedule of property and equipment | ( Dollars in thousands June 30, 2023 June 30, 2022 Computer equipment $ 232 $ - Furniture and fixtures 25 - 257 - Less: accumulated depreciation (220 ) - Property and equipment, net $ 37 $ - |
REVENUE (Tables)
REVENUE (Tables) | 12 Months Ended |
Jun. 30, 2023 | |
REVENUE | |
Schedule of Revenue by Geographical location | ( Dollars in thousands Acquisition Dates To June 30, 2023 US $ 6,548 Europe 2,347 Total $ 8,895 |
Schedule of Revenue by product sales channel | ( Dollars in thousands Acquisition Dates To June 30, 2023 Direct to Consumer $ 5,951 Amazon 1,018 Wholesale 658 Retreat/licensing 275 Digital 993 Total $ 8,895 |
Schedule of deferred revenue balances | ( Dollars in thousands Acquisition Dates To June 30, 2023 Deferred revenue, as of the acquisition dates, including reward liabilities of $965 (a) (b) $ 3,227 Decrease in reward liabilities over the period, net (693 ) Decrease in deferred revenue over the period, net (b)(c) (192 ) Deferred revenue, end of the period, including rewards liabilities of $984 2,343 |
Schedule of Company's sales returns reserve | ( Dollars in thousands Acquisition Date To June 30, 2023 Balance, October 13, 2022 (acquisition date) $ 28 Charges to Costs and Expenses 143 Deductions (143 ) Balance as of June 30, 2023 28 |
ACCOUNTS RECEIVABLE NET (Tables
ACCOUNTS RECEIVABLE NET (Tables) | 12 Months Ended |
Jun. 30, 2023 | |
ACCOUNTS RECEIVABLE NET | |
Schedule of Account receivable | Dollars in thousands June 30, 2023 June 30, 2022 Accounts receivable $ 270 $ - Less: allowance for doubtful accounts (109 ) - Total $ 161 $ - |
Schedule of Company's allowance for doubtful accounts | ( Dollars in thousands Balance, October 13, 2022 (acquisition date) $ 33 Charges to Costs and Expenses 76 Deductions - Balance as of June 30, 2023 $ 109 |
INVENTORY (Tables)
INVENTORY (Tables) | 12 Months Ended |
Jun. 30, 2023 | |
INVENTORY | |
Schedule of inventory | ( Dollars in thousands June 30, 2023 June 30, 2022 Raw material $ 3,043 $ - Work-in-process 201 - Finished goods 745 - Inventory reserve (1,308 ) - Total $ 2,681 $ - |
ACCOUNTS PAYABLE AND ACCRUED _2
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (Tables) | 12 Months Ended |
Jun. 30, 2023 | |
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | |
Schedule of Accounts payable and accrued liabilities | ( Dollars in thousands June 30, 2023 June 30, 2022 Accounts payable $ 4,387 $ 175 Accrued payroll and related liabilities 97 27 Accrued costs for inventory - - Accrual of estimated tax related expense 437 - Accrued expenses including accruals for professional fees, marketing costs, advertising, shipping and logistics 814 54 Accrued interest expenses 100 - Other accrued liabilities including sales tax and returns 10 - Total accounts payable and accrued liabilities $ 5,845 $ 256 |
STOCK BASED COMPENSATION (Table
STOCK BASED COMPENSATION (Tables) | 12 Months Ended |
Jun. 30, 2023 | |
STOCK BASED COMPENSATION | |
Schdule of granted Stock options and Stock awards | Type Role Number of shares Exercise Price /FMV Vesting start Date Vesting Schedule * Term Stock Award Management 200,000 $ 3.75 04/04/2022 A N/A Stock Award Executive Support 150,000 $ 3.75 11/27/2021 A N/A Stock Award Executive 1,000,000 $ 3.75 09/01/2021 A N/A Stock Award Executive 250,000 $ 3.75 09/01/2021 F N/A Stock Award Advisor 250,000 $ 3.75 04/01/2022 G N/A Stock Award Executive 75,000 $ 3.75 06/06/2022 D N/A Stock Award Executive 30,000 $ 3.75 02/16/2023 D N/A Stock Award Executive 600,000 $ 3.75 09/01/2022 L N/A Stock Award Management 125,000 $ 3.75 05/31/2023 G N/A Stock Award Management 175,000 $ 3.75 05/31/2023 M N/A Stock Award Management 200,000 $ 3.75 02/06/2023 M N/A Stock Award Executive 700,000 $ 3.75 01/23/2023 M N/A Total 3,755,000 Stock Option Management 1,000,000 $ 0.001 01/01/2022 A 10 years Stock Option Advisor 300,000 $ 0.001 09/01/2021 D 10 years Stock Option Recruitment Agency 16,250 $ 0.001 06/05/2022 B 10 years Stock Option Marketing Agency 275,000 $ 0.001 04/13/2022 C 10 years Stock Option Board Director 125,000 $ 0.001 12/28/2021 H 10 years Stock Option Board Director 125,000 $ 0.001 01/01/2022 H 10 years Stock Option Brand Strategy Advisor 125,000 $ 0.001 09/07/2021 I 10 years Stock Option IR/PR Agency 700,000 $ 0.001 01/10/2022 J 5 years Stock Option Chief Scientific Advisor 200,000 $ 0.001 12/28/2021 K 10 years Stock Option Marketing Agency 100,000 $ 0.001 08/01/2022 E 10 years Stock Option Financial Advisor 125,000 $ 0.001 09/01/2022 H 10 years Total 3,091,250 |
Schedule of stock award activites | Number of shares Weighted Average Grant Date Fair Value Per Share Weighted Average Remaining Recognition Period (Years) Nonvested at June 30, 2021 - $ - - Granted 3,100,000 $ 3.75 1.95 Vested (218,750 ) $ 3.75 - Forfeited - $ - - Nonvested at June 30, 2022 2,881,250 $ 3.75 1.66 Granted 1,905,000 $ 3.75 4.00 Vested (673,542 ) $ 3.75 - Forfeited (1,745,000 )* $ 3.75 - Nonvested at June 30, 2023 2,367,708 $ 3.75 1.31 |
Schedule of stock option activities | Number of Shares Weighted Average Exercise Price Weighted Average Remaining Term in Years Aggregate Intrinsic Value Outstanding at June 30, 2021 - $ - - $ - Granted 3,166,250 $ 0.001 10.00 - Exercised - - - - Cancelled - - - - Outstanding at June 30, 2022 3,166,250 $ 0.001 7.60 $ - Granted 225,000 0.001 10.00 Exercised (300,000 ) - Cancelled - - Outstanding at June 30, 2023 3,091,250 $ 0.001 7.73 $ - Options exercisable at June 30, 2023 1,375,250 $ 0.001 8.89 $ - |
WARRANTS (Tables)
WARRANTS (Tables) | 12 Months Ended |
Jun. 30, 2023 | |
WARRANTS | |
Schedule of Warrant to purchase Seed Preferred Stock transactions | Number of shares Weighted Average Exercise Price ($) Weighted Average Remaining Recognition Period (Years) Balance, June 30, 2022 - $ - - Warrants issued 1,560,148 $ 2.00 7.00 Warrants expired - $ - - Balance, June 30, 2023 1,560,148 $ 2.00 6.10 Number of Warrants Exercise Price ($) Expiry Date 1,560,148 2.00 August 04, 2029 |
Schdule of Warrants to purchase Common Stock | Number of shares Weighted Average Exercise Price ($) Weighted Average Remaining Recognition Period (Years) Nonvested at June 30, 2022 - $ - - Granted 1,650,000 $ 2.00 7.00 Vested (33,334 ) - 6.62 Forfeited - - - Nonvested at June 30, 2023 1,616,666 $ 2.00 6.37 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Jun. 30, 2023 | |
INCOME TAXES | |
Schedule of deferred income tax assets and liabilities | ( Dollars in thousands June 30, June 30, 2023 2022 Statutory income tax rate 21 % 21 % Income tax recovery at statutory rate $ (4,475 ) $ (1,735 ) Tax effect of: Charitable contributions - 11 Change in valuation allowance (4,475 ) (1,724 ) Income tax provision $ - $ - ( Dollars in thousands June 30, June 30, 2023 2022 Deferred income tax assets Net operating losses carried forward $ 2,003 $ 674 Impairment of goodwill 812 - Stock based compensation 2,574 1,119 Warrants issued as financing costs 878 - Gross deferred income tax asset 6,267 1,793 Valuation allowance (6,267 ) (1,793 ) Net deferred income tax asset $ - $ - |
DESCRIPTION OF BUSINESS, GOIN_2
DESCRIPTION OF BUSINESS, GOING CONCERN AND HISTORY (Details Narrative) - USD ($) | 12 Months Ended | |||
Mar. 03, 2023 | Sep. 09, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Sale of seed preferred stocks per share | $ 2 | |||
Working capital deficit | $ 7,116 | |||
Subscription agreements amount | 10,000,000 | |||
Subscription agreement received | $ 9,660,000 | |||
Additional Sale of seed common stock | 50,000 | |||
Additional sale of common stock | 875,000 | |||
Proceeds from preferred stock | $ 100,000 | |||
Proceeds from common stock | 1,750,000 | |||
Subscription agreement remaining amount | $ 340,000 | |||
Sale of seed preferred stock per share | $ 2 | |||
Sale of seed common stock per share | $ 2 | |||
Aggregate principal amount of term loan commitments | $ 150,000,000 | |||
Common stock par value | $ 0.001 | $ 0.001 | ||
Chopra HLCO [Member] | ||||
Common stock par value | $ 0.001 | |||
Cash Consideration | $ 5,000,000 | |||
Cash paid | $ 1,000,000 | |||
Common stock, issued | 1,400,000 | |||
Deferred cash payment | $ 2,500,000 | |||
Earnout payments received | $ 3,000,000 | |||
CircleUp Credit Advisors LLC [Member] | Loan purchase and sale agreement [Member] | ||||
Cash payment | $ 2,000,000 | |||
Warrant to purchase restricted shares | 1,500,000 | |||
Warrant issued | 187,500 | |||
Warrant vesting quarterly installment | 187,500 | |||
Intrest rate | 12.50% |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - shares | Jun. 30, 2023 | Jun. 30, 2022 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Seed Preferred stock (Convertible to Common stock 1:1) | 2,620,000 | 4,660,000 |
Seed Preferred warrants (Convertible to Common stock 1:1) | 1,560,148 | |
Common stock warrants | 1,650,000 | |
Stock options | 3,091,250 | 3,166,250 |
Total | 8,921,398 | 7,826,250 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) | 12 Months Ended |
Jun. 30, 2023 | |
Leasehold Improvements [Member] | |
Property and Equipment useful life | Shorter of lease or useful life |
Minimum [Member] | Computer and other equipment [Member] | |
Property and Equipment useful lives | 3 years |
Minimum [Member] | Office furniture and fixtures [Member] | |
Property and Equipment useful lives | 5 years |
Maximum [Member] | Computer and other equipment [Member] | |
Property and Equipment useful lives | 7 years |
Maximum [Member] | Office furniture and fixtures [Member] | |
Property and Equipment useful lives | 7 years |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Period-end Euro [Member] | ||
Translation of amounts from Euro into US | 1.0915 | 1.0476 |
Period average Euro [Member] | ||
Translation of amounts from Euro into US | 1.0459 | 1.0725 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Federal Deposit Insurance Corporation ("FDIC") | $ 250,000 | |
Cash and cash equivalent | 1,500,000 | $ 65,000 |
Uninsured amount | 1,250,000 | 6,250,000 |
Allowance for doubtful accounts | (109,620,000) | 0 |
Impairment of intangible assets | 3,868,721 | 138,366 |
Amortization of intangible assets | 189,581 | |
Contract liability | 2,340,000 | $ 0 |
Outstanding loyalty liability | $ 21,192,700,000 |
ACQUISITION (Details)
ACQUISITION (Details) - Your Super, Inc. [Member] - USD ($) $ / shares in Units, $ in Thousands | Mar. 31, 2023 | Sep. 30, 2022 |
Acquisition costs - Cash | $ 3,500 | $ 2,000 |
Number of Shares issued | 1,400,000 | 3,200,000 |
Stock issued value per share | $ 0.15 | $ 0.15 |
Total stock fair value | $ 210 | $ 480 |
Total consideration | $ 3,710 | $ 2,513 |
ACQUISITION (Details 1)
ACQUISITION (Details 1) - USD ($) $ in Thousands | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 |
Goodwill | $ 5,036 | $ 0 | ||
Your Super, Inc. [Member] | ||||
Cash | $ 300 | $ 363 | ||
Inventory | 216 | 4,953 | ||
Accounts receivable | 0 | 422 | ||
Prepaid expenses and other assets | 345 | 836 | ||
Total assets acquired | 861 | 6,760 | ||
Contract liabilities | (2,187) | (259) | ||
Total liabilities assumed | (2,187) | (8,115) | ||
Net tangible assets/liabilities | (1,326) | (1,355) | ||
Total liabilities acquired | (1,326) | |||
Goodwill | 5,036 | 3,868 | ||
Total Net asset acquired | $ 3,710 | $ 2,513 |
ACQUISITION (Details 2)
ACQUISITION (Details 2) - Your Super, Inc. [Member] - USD ($) $ / shares in Units, $ in Thousands | Mar. 31, 2023 | Sep. 30, 2022 |
Debt acquisition costs - Cash | $ 3,500 | $ 2,000 |
Debt acquisition cost -1,500,000 common stock purchase warrants | $ 34 | |
Number of Shares issued | 1,400,000 | 3,200,000 |
Stock issued value per share | $ 0.15 | $ 0.15 |
Total stock fair value | $ 210 | $ 480 |
Total consideration | $ 3,710 | $ 2,513 |
ACQUISITION (Details 3)
ACQUISITION (Details 3) - USD ($) $ in Thousands | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 |
Accounts payable and accrued liabilities | $ (5,845) | $ (256) | ||
Goodwill | $ 5,036 | $ 0 | ||
Your Super, Inc. [Member] | ||||
Cash | $ 300 | $ 363 | ||
Inventory | 216 | 4,953 | ||
Accounts receivable | 0 | 422 | ||
Prepaid expenses and other assets | 345 | 836 | ||
Property and equipment | 78 | |||
Security deposits | 63 | |||
Deferred income taxes | 45 | |||
Total assets acquired | 861 | 6,760 | ||
Accounts payable and accrued liabilities | (7,815) | |||
Contract liabilities | (2,187) | (259) | ||
Income tax payable | (41) | |||
Total liabilities assumed | (2,187) | (8,115) | ||
Net tangible assets/liabilities | (1,326) | (1,355) | ||
Goodwill | 5,036 | 3,868 | ||
Total Net asset acquired | $ 3,710 | $ 2,513 |
ACQUISITION (Details 4)
ACQUISITION (Details 4) - Your Super, Inc. [Member] - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Revenue | $ 12,540 | $ 32,462 |
Net loss from operations | $ 523 | $ 15,705 |
Weighted average number of common shares used in per share calculations | 50,768,533 | 44,001,550 |
Basic and Diluted Loss Per Common Share | $ (0.01) | $ (0.36) |
ACQUISITION (Details 5)
ACQUISITION (Details 5) - USD ($) $ in Thousands | Jun. 30, 2023 | Jun. 30, 2022 | Mar. 10, 2022 |
Accounts payable and accrued liabilities | $ (5,845) | $ (256) | |
NOEO GmbH [Member] | |||
Cash and cash equivalent | $ 8 | ||
Inventory | 8 | ||
Prepaid expenses | 69 | ||
Recoverable value added tax | 21 | ||
Intangible assets | 68 | ||
Accounts payable and accrued liabilities | (33) | ||
Advances and accounts payable, related party | (8) | ||
Loan payable, related party | (158) | ||
Net assets | (25) | ||
Consideration: Cash purchase | 28 | ||
Additions to intangible assets | $ 53 |
ACQUISITION (Details Narrative)
ACQUISITION (Details Narrative) - USD ($) | 12 Months Ended | ||||
Sep. 09, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Mar. 31, 2023 | Mar. 10, 2022 | |
Impairment of intangible assets | $ 3,868,721 | $ 138,366 | |||
NOEO GmbH [Member] | |||||
Ownership percentage acquisred | 100% | ||||
Cash Consideration | $ 28,290,000,000 | ||||
NOEO GmbH [Member] | Anabel Olemann, Director [Member] | |||||
Ownership percentage acquisred | 100% | ||||
Chopra Global, LLC [Member] | |||||
Description of purchase agreement | The consideration paid and payable by the Buyer for the Purchased Assets is the Purchase Price of up to Five Million Dollars ($5,000,000) in cash plus newly issued shares of the Company’s Common Stock. In total, the initial cash purchase amount consists of $3.5 million in cash, of which the Company has paid $2.5 million as of March 31, 2023, with the final $1 million paid in April 2023, and 1,400,000 shares of the Company’s unregistered, restricted common stock issued on Closing. Additionally, up to three (3) earnout payments of One Million Dollars ($1,000,000) in value each (the “Earnout Payments”) may be paid to the Seller, subject to and payable in accordance with earnout thresholds specified in the Purchase Agreement. Each of these Earnout Payments will be comprised of fifty percent (50%) in cash and fifty percent (50%) in shares of the Common Stock (the “Earnout Shares”). The Earnout Payments will be earned (i) for the period starting March 1, 2023 and ending December 31, 2023 if net revenue of the Chopra Business (then operated by the Buyer) exceeds Five Million Nine Hundred Thousand Dollars $5,900,000; (ii) for the calendar year ending December 31, 2024 if such net revenue exceeds $11,000,000; and (iii) for the calendar year ending December 31, 2025 if such net revenue exceeds $15,000,000. The Earnout Shares will be valued at the market price at the time of issuance based on the five-day volume weighted average price of the Common Stock prior to the last day of the applicable measurement year. If the Company is taken private or undergoes a Change of Control (as defined in the Asset Purchase Agreement), any subsequent Earnout Payment will be paid 100% in cash | ||||
Public offering first commitment | $ 30,000,000 | ||||
Cash Consideration | $ 2,500,000 | ||||
Accounts payable | $ 1,000,000 | ||||
Measurement period | 12 months | ||||
Super, Inc. [Member] | |||||
Cash Consideration | $ 2,000,000 | ||||
Warrants exercise price | $ 2 | ||||
Common stock purchase warrants | 1,500,000 | ||||
Impairment of intangible assets | $ 3,868,721 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Jun. 30, 2022 |
Property and equipment | $ 257 | |
Less: accumulated depreciation | (220) | $ 0 |
Property and equipment, net | 37 | 0 |
Computer and other equipment [Member] | ||
Property and equipment | 232 | 0 |
Office furniture and fixtures [Member] | ||
Property and equipment | $ 25 | $ 0 |
PROPERTY AND EQUIPMENT (Detai_2
PROPERTY AND EQUIPMENT (Details Narrative) $ in Thousands | 12 Months Ended |
Jun. 30, 2023 USD ($) | |
PROPERTY AND EQUIPMENT | |
Depreciation expenses | $ 42,722 |
REVENUE (Details)
REVENUE (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Revenue | $ 8,895 | $ 0 |
Revenue | 8,895 | |
US | ||
Revenue | 6,548 | |
Europe | ||
Revenue | $ 2,347 |
REVENUE (Details 1)
REVENUE (Details 1) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Revenue | $ 8,895 | |
Revenue | 8,895 | $ 0 |
Direct to Consumer | ||
Revenue | 5,951 | |
Amazon | ||
Revenue | 1,018 | |
Wholesale | ||
Revenue | 658 | |
Retreat/licensing | ||
Revenue | 275 | |
Digital | ||
Revenue | $ 993 |
REVENUE (Details 2)
REVENUE (Details 2) $ in Thousands | 12 Months Ended |
Jun. 30, 2023 USD ($) | |
REVENUE | |
Deferred revenue, as of the acquisition dates, including reward liabilities of $965 and prepaid membership, licensing and retreat fees of $2,257 | $ 3,227 |
Decrease in reward liabilities over the period, net | (693) |
Decrease in deferred revenue over the period, net | (192) |
Deferred revenue, end of the period, including rewards liabilities of $984 | $ 2,343 |
REVENUE (Details 3)
REVENUE (Details 3) $ in Thousands | 12 Months Ended |
Jun. 30, 2023 USD ($) | |
REVENUE | |
Balance, acquisition date | $ 28 |
Charges to Costs and Expenses | 143 |
Deductions | (143) |
Balance as of June 30, 2023 | $ 28 |
REVENUE (Details Narrative)
REVENUE (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2023 | Mar. 03, 2023 | Oct. 13, 2022 | |
REVENUE | |||
Rewards liabilities | $ 271 | $ 965 | |
Unearned revenue | 2,085 | $ 2,257 | |
Liabilities for unearned product sales | $ 7 | $ 5 | |
Percentage of total revenue | 10% | ||
Other current liabilities | $ 27,769 |
ACCOUNTS RECEIVABLE NET (Detail
ACCOUNTS RECEIVABLE NET (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Jun. 30, 2022 |
ACCOUNTS RECEIVABLE NET | ||
Accounts receivable | $ 270 | $ 0 |
Less: allowance for doubtful accounts | (109) | 0 |
Total | $ 161 | $ 0 |
ACCOUNTS RECEIVABLE NET (Deta_2
ACCOUNTS RECEIVABLE NET (Details 1) $ in Thousands | 12 Months Ended |
Jun. 30, 2023 USD ($) | |
ACCOUNTS RECEIVABLE NET | |
Balance the acquisition date | $ 33 |
Charges to Costs and Expenses | 76 |
Deductions | 0 |
Balance as of March 31, 2023 | $ 109 |
ACCOUNTS RECEIVABLE NET (Deta_3
ACCOUNTS RECEIVABLE NET (Details Narrative) - USD ($) $ in Thousands | Jun. 30, 2023 | Jun. 30, 2022 |
ACCOUNTS RECEIVABLE NET | ||
Allowance for Doubtful Accounts | $ 109,620 | $ 0 |
INVENTORY (Details)
INVENTORY (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Jun. 30, 2022 |
INVENTORY | ||
Raw material | $ 3,043 | $ 0 |
Work-in-process | 201 | 0 |
Finished goods | 745 | 0 |
Inventory reserve | (1,308) | |
Total | $ 2,681 | $ 0 |
ACCOUNTS PAYABLE AND ACCRUED _3
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Jun. 30, 2022 |
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | ||
Accounts payable | $ 4,387 | $ 175 |
Accrued payroll and related liabilities | 97 | 27 |
Accrued costs for inventory | 0 | 0 |
Accrual of estimated tax related expense | 437 | 0 |
Accrued expenses including accruals for professional fees, marketing costs, advertising, shipping and logistics | 814 | 54 |
Accrued interest expenses | 100 | 0 |
Other accrued liabilities including sales tax and returns | 10 | 0 |
Total accounts payable and accrued liabilities | $ 5,845 | $ 256 |
LOAN PAYABLE (Details narrative
LOAN PAYABLE (Details narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |
Aug. 04, 2022 | Oct. 27, 2022 | Jun. 30, 2023 | |
Principal amount | $ 400,000 | ||
Interest rate | 12% | ||
Maturity term | 12 months | ||
Finance costs | $ 562,500 | ||
Quarterly fee | 12,500 | ||
Total funds drawanable | $ 50,000,000 | ||
Warrants issued | 1,560,148 | ||
Exercise price | $ 2 | ||
Term loan fund | $ 3,000,000 | ||
Additional term loan fund | $ 1,873,000 | ||
Upfront fee | $ 562,500 | ||
Administrative fees | 50,000 | ||
Interest on outstanding loan | $ 647,038 | ||
Maximum [Member] | |||
Loan payable | $ 150,000,000 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||||
Oct. 14, 2022 | Mar. 10, 2022 | Jan. 10, 2022 | May 22, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
W A O W Advisory Group Gmbh [Member] | ||||||
Accrued and unpaid interest | $ 14,263 | |||||
Proceeds from subscription receivable | $ 4,280,000 | $ 330,000 | ||||
Cash proceeds from aforementioned subscription | $ 3,950,000 | |||||
Shares issued of seed preferred stock | 19,750,000,000 | |||||
Remaining subscribed seed preferred stock shares | 165,000 | |||||
Purchase aggreement of unregistered shares of Seed Preferred stock | 2,140,000 | |||||
Unregistered shares of Seed Preferred stock par value | $ 2 | |||||
Michael Kuech and Kristel De Groot [Member] | ||||||
consulting fee | $ 225,000 | |||||
Option to purchase share common shares | 300,000 | |||||
Monthly consulting fee | $ 20,000 | |||||
Monthly net revenue | 1% | |||||
Kay Koplovitz, Chairperson of the Board [Member] | ||||||
Director fees | $ 37,500 | |||||
Justin Figgins, CFO [Member] | ||||||
consulting fee | 27,865 | |||||
Steven Bartlett, Director [Member] | ||||||
Stock-based compensation expense | 594,863 | |||||
Additional unpaid amount | 81,344 | |||||
Accrued amount | 63,000 | |||||
Vested stock options | 300,000 | |||||
Non statutory stock options | 1,000,000 | |||||
Further Vested stock options | 700,000 | |||||
FSL paid for service rendered | $ 30,000 | 215,675 | ||||
Director fees | 18,750 | |||||
Marketing service rendered | 120,621 | |||||
NOEO GmbH [Member] | ||||||
Ownership interest acquired | 100% | |||||
NOEO GmbH [Member] | Anabel Olemann, Director [Member] | ||||||
Ownership interest acquired | 100% | |||||
Advances | 3,275 | |||||
Accounts payable - related party | 1,070 | |||||
Cash consideration | $ 298,000,000 | |||||
NOEO [Member] | Maturity One [Member] | ||||||
Balance outstanding | $ 172,230 |
STOCKHOLDERS EQUITY (DEFICIT) (
STOCKHOLDERS EQUITY (DEFICIT) (Details Narrative) - USD ($) | 12 Months Ended | ||||
Jun. 30, 2023 | Jun. 30, 2022 | Jul. 08, 2022 | Oct. 07, 2021 | Apr. 29, 2021 | |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | |||
Preferred stock, shares authorized increase | 7,800,000 | ||||
Common stock, shares issued | 55,199,920 | 44,004,920 | |||
Common stock, shares outstanding | 55,199,920 | 44,004,920 | |||
Preferred Stock designated Shares | 7,800,000 | 7,800,000 | |||
Share issued of conversion | 2,265,000 | ||||
Preferred stock, par value | $ 0.001 | $ 0.001 | |||
Preferred stock, shares issued | 2,620,000 | 4,660,000 | |||
Preferred stock, shares outstanding | 2,620,000 | 4,660,000 | |||
Proceeds from sale of preferred stock | $ 100,000 | ||||
Common stock, par value | $ 0.001 | $ 0.001 | |||
Issued shares stock options exercised | 300,000 | ||||
Exercised per share | $ 0.001 | ||||
Common stock, shares authorized | 290,000,000 | 290,000,000 | |||
Investors [Member] | |||||
Common stock, par value | $ 2 | ||||
Received in cash proceeds from investors | $ 1,750,000,000 | ||||
Purchase accumulated shares of Common Stock | 875,000 | ||||
Seed Preferred Stock 1 [Member] | |||||
Preferred Stock designated Shares | 5,000,000 | ||||
Share issued of conversion | 2,265,000 | ||||
Preferred stock, par value | $ 2 | ||||
Description of share holders rights and powers | Any of the rights, powers, preferences and other terms of our Seed Preferred Shares may be waived on behalf of all holders of Seed Preferred Shares by the affirmative written consent or vote of the holders of at least 51% of the Seed Preferred Shares then outstanding | ||||
Preferred stock, shares issued | 2,620,000 | 4,660,000 | |||
Preferred stock, shares outstanding | 2,620,000 | 4,660,000 | |||
Sale of stock | 5,000,000 | ||||
Proceeds from sale of preferred stock | $ 10,000,000 | ||||
Preferred stock subscription received | $ 9,670,000,000 | ||||
Seed preferred stock issued | 330,000 | ||||
Seed Preferred Stock with two subscriber [Member] | |||||
Preferred stock, par value | $ 2 | ||||
Preferred shares issued | 225,000 | ||||
Preferred shares issued, value | $ 450,000 | ||||
Chopra Global, LLC [Member] | |||||
Issued shares of common Stock to acquisition of certain assets | 1,400,000 | ||||
Super, Inc. [Member] | |||||
Issued shares of common Stock to acquisition of certain assets | 3,200,000 | ||||
Financial Industry Regulatory Authority [Member] | |||||
Preferred stock, shares authorized | 10,000,000 | ||||
Common stock, shares issued | 44,000,000 | ||||
Common stock, shares outstanding | 44,000,000 | ||||
Preferred Stock designated Shares | 5,000,000 | ||||
Preferred stock, par value | $ 0.001 | ||||
Common stock, par value | $ 0.001 | ||||
Common stock, shares authorized | 290,000,000 | 300,000,000 |
WARRANTS (Details)
WARRANTS (Details) | 12 Months Ended |
Jun. 30, 2023 $ / shares shares | |
Weighted Average Exercise Price, Beginning Balance | $ 0.001 |
Weighted Average Exercise Price, Ending Balance | $ 0.001 |
Weighted Average Remaining Term in Years. Outstanding | 7 years 7 months 6 days |
Warrants [Member] | |
Number of share warrants issued | shares | 1,560,148 |
Number of shares ending balance | shares | 1,560,148 |
Weighted Average Exercise Price, Beginning Balance | $ 0 |
Weighted Average Exercise Price, Warrants issued | 2 |
Weighted Average Exercise Price, Warrants expired | 0 |
Weighted Average Exercise Price, Ending Balance | $ 2 |
Weighted Average Remaining Term in Years, Warrants issued | 7 months |
Weighted Average Remaining Term in Years. Outstanding | 6 months 3 days |
WARRANTS (Details 1)
WARRANTS (Details 1) - Warrants [Member] | 12 Months Ended |
Jun. 30, 2023 $ / shares shares | |
Number | shares | 1,560,148 |
Exercise price | $ / shares | $ 2 |
Expiry Date | August 04, 2029 |
WARRANTS (Details 2)
WARRANTS (Details 2) - $ / shares | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Weighted Average Exercise Price, Beginning Balance | $ 0.001 | $ 0 |
Weighted Average Exercise Price, Granted | 0.001 | 0.001 |
Weighted Average Exercise Price, Ending Balance | $ 0.001 | 0.001 |
Weighted Average Remaining Term in Years. Outstanding | 7 years 7 months 6 days | |
Warrants to purchase Common Stock | ||
Granted | 1,650,000 | |
Vested | (33,334) | |
Number of shares nonvested ending balance | 1,616,666 | |
Weighted Average Exercise Price, Beginning Balance | $ 0 | |
Weighted Average Exercise Price, Forfeited | 0 | |
Weighted Average Exercise Price, vested | 0 | |
Weighted Average Exercise Price, Granted | 2 | |
Weighted Average Exercise Price, Ending Balance | $ 2 | $ 0 |
Weighted Average Remaining Term in Years. Outstanding | 6 months 11 days | |
Weighted Average Remaining Term in Years. Granted | 7 months | |
Weighted Average Remaining Term in Years. Vested | 6 months 18 days |
WARRANTS (Details Narrative)
WARRANTS (Details Narrative) - USD ($) | 12 Months Ended | |||
Nov. 10, 2022 | Sep. 09, 2022 | Aug. 04, 2022 | Jun. 30, 2023 | |
Dividend yield | 0% | |||
Financing costs | $ 562,500 | |||
Warrants to purchase Common Stock | ||||
Warrants description | warrant increasing the number of warrant shares from 1,300,123 shares of our Seed Preferred Stock to 1,560,148 shares of this stock | |||
Expected term | 7 months | |||
Volatility | 62.56% | |||
Warrants issued | 1,300,123 | |||
Exercise price | $ 2 | |||
Risk-free interest rate | 2.73% | |||
Dividend yield | 0% | |||
Financing costs | $ 4,100,000 | |||
Inducement loan | $ 3,000,000 | |||
Warrants to purchase Common Stock 1 | ||||
Total warrants value | $ 427,000 | $ 687,000 | ||
Warrants description | Tri-Party Assignment and Settlement Agreement where under the outstanding balance payable of $1,077,929 was agreed to be settled by the issuance of common stock purchase warrants (the “Warrant”) | This warrant will begin to vest on the one-year anniversary of the closing of the purchase of the Loan with 12.5% of the Warrant amount (187,500 shares) vesting on that date and the remaining portion of the Warrant vesting in seven quarterly installments of 187,500 shares each over the next seven quarters | ||
Restricted shares | 150,000 | 1,500,000 | ||
Expected term | 7 months | 3 months | ||
Dividend yield | 0% | 0% | ||
Exercise price | $ 2 | $ 2 | ||
Risk-free interest rate | 3.89% | 4.25% | ||
Volatility | 63.52% | 60% | ||
Gain on debt settlement | $ 650,429 | |||
Other current liabilities | $ 95,000 | |||
Unamortized amount unvested warrants | $ 333,000 | |||
Weighted average period | 6 months 11 days |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |||||||
Sep. 01, 2022 | Aug. 03, 2022 | Feb. 14, 2023 | Mar. 23, 2022 | Dec. 28, 2021 | Jun. 30, 2023 | Mar. 23, 2023 | Aug. 01, 2022 | Jan. 01, 2022 | |
Ray Ros Holding LLC [Member] | |||||||||
Marketing strategy and assessment rate per month | $ 5,000,000 | ||||||||
Excercise price per share | $ 0.001 | ||||||||
Options vested quarter | 25% | ||||||||
Non statutory stock options issued | 100,000 | ||||||||
Stock based compensation expense | $ 281,250,000 | ||||||||
Lee Forester [Member] | |||||||||
Excercise price per share | $ 0.001 | ||||||||
Non statutory stock options issued | 125,000 | ||||||||
Stock based compensation expense | $ 192,188,000 | ||||||||
Advisory rate per month | $ 3,125,000 | ||||||||
Mint Performance Marketing [Member] | |||||||||
Non statutory stock options issued | 275,000 | ||||||||
Description of agreement | In addition, under the terms of the agreement Mint is entitled to a 5% share of any future Shopify s-store revenue associated with developed content, net of returns and promotions | ||||||||
Annual fee paid | $ 35,000,000 | ||||||||
Options vested | 100,000 | ||||||||
KET Consulting LLC [Member] | |||||||||
Annual compensation | $ 240,000 | ||||||||
KET Consulting LLC [Member] | Equity Incentive Plan [Member] | |||||||||
Non statutory stock options issued | 1,000,000 | ||||||||
Stock based compensation expense | $ 1,175,728 | ||||||||
Exercisable price, per share | $ 0.001 | ||||||||
Vesting term | 18 months | ||||||||
Vesting percentage | 25% | ||||||||
Deepak Chopra LLC [Member] | |||||||||
Stock based compensation expense | $ 375,000,000 | ||||||||
Donation paid | $ 50,000,000 | ||||||||
Stock options granted | 200,000 | ||||||||
Cash Consideration | $ 12,500,000 | ||||||||
Options term, in years | 10 months | ||||||||
Options fully vested | 25% | ||||||||
Exercise price | $ 0.001 | ||||||||
Peter Kash | |||||||||
Incentive stock options | $ 75,000,000 | ||||||||
additional stock options | 225,000 | ||||||||
Dr. Linda Friedland | |||||||||
Incentive stock options | $ 75,000,000 | ||||||||
additional stock options | 225,000 |
INCOME TAX (Details)
INCOME TAX (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Effective Tax Rate Reconciliation: | ||
Statutory Income tax rate | 21% | 21% |
Income tax recovery at statutory rate | $ (4,475) | $ (1,735) |
Tax effect of: | ||
Charitable contributions | 0 | 11 |
Change in valuation allowance | (4,475) | (1,724) |
Income Tax Provision | $ 0 | $ 0 |
INCOME TAX (Details 1)
INCOME TAX (Details 1) - USD ($) $ in Thousands | Jun. 30, 2023 | Jun. 30, 2022 |
INCOME TAXES | ||
Non-capital losses carried forward | $ 2,003 | $ 674 |
Impairment of goodwill | 812 | 0 |
Stock based compensation | 2,574 | 1,119 |
Warrants issued as financing costs | 878 | 0 |
Gross deferred income tax asset | 6,267 | 1,793 |
Valuation allowance | (6,267) | (1,793) |
Net deferred income tax asset | $ 0 | $ 0 |
INCOME TAX (Details Narrative)
INCOME TAX (Details Narrative) $ in Millions | 12 Months Ended |
Jun. 30, 2023 USD ($) | |
INCOME TAXES | |
Description of taxable income | the net operating losses for the years ended June 30, 2023 and 2022 which will carryforward indefinitely, limited to 80% of each year’s taxable income |
Net operating carry forward loss | $ 9.4 |
STOCK BASED COMPENSATION (Detai
STOCK BASED COMPENSATION (Details) - $ / shares | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2021 | |
Exercise Price | $ 0.001 | $ 0.001 | $ 0 |
Term | 7 years 7 months 6 days | ||
Number of shares | 3,091,250 | 3,166,250 | 0 |
Stock Award #1 [Member] | |||
Role | Management | ||
Exercise Price | $ 3.75 | ||
Vesting start date | 04/04/2022 | ||
Number of shares | 200,000 | ||
Stock Award #2 [Member] | |||
Role | Executive Support | ||
Exercise Price | $ 3.75 | ||
Vesting start date | 11/27/2021 | ||
Number of shares | 150,000 | ||
Stock Award 8 [Member] | |||
Role | Executive | ||
Exercise Price | $ 3.75 | ||
Vesting start date | 09/01/2022 | ||
Number of shares | 600,000 | ||
Stock Award 9 [Member] | |||
Role | Management | ||
Exercise Price | $ 3.75 | ||
Vesting start date | 05/31/2023 | ||
Number of shares | 125,000 | ||
Stock Award #3 [Member] | |||
Role | Executive | ||
Exercise Price | $ 3.75 | ||
Vesting start date | 09/01/2021 | ||
Number of shares | 1,000,000 | ||
Stock Award #4 [Member] | |||
Role | Executive | ||
Exercise Price | $ 3.75 | ||
Vesting start date | 09/01/2021 | ||
Number of shares | 250,000 | ||
Stock Award #5 [Member] | |||
Role | Advisor | ||
Exercise Price | $ 3.75 | ||
Vesting start date | 04/01/2022 | ||
Number of shares | 250,000 | ||
Stock Award #6 [Member] | |||
Role | Executive | ||
Exercise Price | $ 3.75 | ||
Vesting start date | 06/06/2022 | ||
Number of shares | 75,000 | ||
Stock Award #7 [Member] | |||
Role | Executive | ||
Exercise Price | $ 3.75 | ||
Vesting start date | 02/16/2023 | ||
Number of shares | 30,000 | ||
Stock Award 10 [Member] | |||
Role | Management | ||
Exercise Price | $ 3.75 | ||
Vesting start date | 05/31/2023 | ||
Number of shares | 175,000 | ||
Stock Award 11 [Member] | |||
Role | Management | ||
Exercise Price | $ 3.75 | ||
Vesting start date | 02/06/2023 | ||
Number of shares | 200,000 | ||
Stock Award 12 [Member] | |||
Role | Executive | ||
Exercise Price | $ 3.75 | ||
Vesting start date | 01/23/2023 | ||
Number of shares | 700,000 | ||
Stock Option 1 [Member] | |||
Number of shares | 1,000,000 | ||
Role | Management | ||
Exercise Price | $ 0.001 | ||
Vesting start date | 01/01/2022 | ||
Term | 10 years | ||
Stock Option 2 [Member] | |||
Number of shares | 300,000 | ||
Role | Advisor | ||
Exercise Price | $ 0.001 | ||
Vesting start date | 09/01/2021 | ||
Term | 10 years | ||
Stock Option 3 [Member] | |||
Number of shares | 16,250 | ||
Role | Recruitment Agency | ||
Exercise Price | $ 0.001 | ||
Vesting start date | 06/05/2022 | ||
Term | 10 years | ||
Stock Option 4 [Member] | |||
Number of shares | 275,000 | ||
Role | Marketing Agency | ||
Exercise Price | $ 0.001 | ||
Vesting start date | 04/13/2022 | ||
Term | 10 years | ||
Stock Option 5 [Member] | |||
Number of shares | 125,000 | ||
Role | Board Director | ||
Exercise Price | $ 0.001 | ||
Vesting start date | 12/28/2021 | ||
Term | 10 years | ||
Stock Option 6 [Member] | |||
Number of shares | 125,000 | ||
Role | Board Director | ||
Exercise Price | $ 0.001 | ||
Vesting start date | 01/01/2022 | ||
Term | 10 years | ||
Stock Option 10 [Member] | |||
Role | Marketing Agency | ||
Exercise Price | $ 0.001 | ||
Vesting start date | 08/01/2022 | ||
Term | 10 years | ||
Number of shares | 100,000 | ||
Stock Option 11 [Member] | |||
Role | Financial Advisor | ||
Exercise Price | $ 0.001 | ||
Vesting start date | 09/01/2022 | ||
Term | 10 years | ||
Number of shares | 125,000 | ||
Total [Member] | |||
Number of Stock Award | 3,755,000 | ||
Number of shares | 3,091,250 | ||
Stock Option 8 [Member] | |||
Number of shares | 700,000 | ||
Role | IR/PR Agency | ||
Exercise Price | $ 0.001 | ||
Vesting start date | 01/10/2022 | ||
Term | 5 years | ||
Stock Option 9 [Member] | |||
Role | Chief Scientific Advisor | ||
Exercise Price | $ 0.001 | ||
Vesting start date | 12/28/2021 | ||
Term | 10 years | ||
Number of shares | 200,000 | ||
Stock Option 7 [Member] | |||
Number of shares | 125,000 | ||
Role | Brand Strategy Advisor | ||
Exercise Price | $ 0.001 | ||
Vesting start date | 09/07/2021 | ||
Term | 10 years |
STOCK BASED COMPENSATION (Det_2
STOCK BASED COMPENSATION (Details 1) - $ / shares | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
STOCK BASED COMPENSATION | ||
Nonvested, Beginning Balance | 2,881,250 | 0 |
Nonvested, Granted | 1,905,000 | 3,100,000 |
Nonvested, Vested | (673,542) | (218,750) |
Nonvested, Forfeited | (1,745,000) | 0 |
Nonvested, Ending Balance | 2,367,708 | 2,881,250 |
Nonvested, Weighted Average Grant Date Fair Value Per Share, Beginning Balance | $ 3.75 | $ 0 |
Nonvested, Weighted Average Grant Date Fair Value Per Share, Granted | 3.75 | 3.75 |
Nonvested, Weighted Average Grant Date Fair Value Per Share, Vested | 3.75 | 3.75 |
Nonvested, Weighted Average Grant Date Fair Value Per Share, Forfeited | 3.75 | 0 |
Nonvested, Weighted Average Grant Date Fair Value Per Share, Ending Balance | $ 3.75 | $ 0 |
Nonvested, Weighted Average Remaining Recgnition Period (Years). Granted | 4 years | 1 year 11 months 12 days |
Nonvested, Weighted Average Remaining Recgnition Period (Years) | 1 year 3 months 21 days | 1 year 7 months 28 days |
STOCK BASED COMPENSATION (Det_3
STOCK BASED COMPENSATION (Details 2) - USD ($) | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
STOCK BASED COMPENSATION | ||
Outstanding, Beginning Balance | 3,166,250 | 0 |
Granted | 225,000 | 3,166,250 |
Exercised | 300,000 | |
Cancelled | 0 | |
Outstanding, Ending Balance | 3,091,250 | 3,166,250 |
Options exercisable | 1,375,250 | |
Weighted Average Exercise Price, Beginning Balance | $ 0.001 | $ 0 |
Weighted Average Exercise Price, Granted | 0.001 | 0.001 |
Weighted Average Exercise Price, Exercised | 0 | 0 |
Weighted Average Exercise Price, Cancelled | 0 | 0 |
Weighted Average Exercise Price, Ending Balance | 0.001 | $ 0.001 |
Weighted Average Exercise Price, Exercisable | $ 0.001 | |
Weighted Average Remaining Term in Years. Granted | 10 years | 10 years |
Term | 7 years 7 months 6 days | |
Weighted Average Remaining Term in Years. Outstanding Ending | 7 years 8 months 23 days | 7 years 7 months 6 days |
Weighted Average Remaining Term in Years. Exercisable | 8 years 10 months 20 days | |
Aggregate Intrinsic Value, Outstanding | $ 0 | $ 0 |
Aggregate Intrinsic Value, Exercisable | $ 0 | $ 0 |
STOCK BASED COMPENSATION (Det_4
STOCK BASED COMPENSATION (Details Narrative) - USD ($) | 12 Months Ended | ||
Jan. 10, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Stock options exercised | 300,000 | ||
Option shares | 300,000 | ||
Services Agreement shares | 100,000 | ||
common stock on sustained market capitalization | 200,000 | ||
Vesting Percentage | 2% | ||
Vesting Restricted Stock percentage | 25% | ||
Assuming average daily trading volume | 100,000 | ||
Sustained market capitalization | $ 400,000,000 | ||
Sustained market capitalization shares | 200,000 | ||
Stock-based compensation expenses | 2,980,000 | $ 1,880,000 | |
Deferred compensation expense | $ 8,670,000 | ||
Risk-free interest rate | 3.26% | ||
Expected term Minimum | 5 years | ||
Expected term Maximum | 10 years | ||
Expected volatility | 62.49% | ||
Weighted average period | 1 year 3 months 21 days | ||
Dividend yield | 0% | ||
First Three Months Anniversary [Member] | |||
Vesting Percentage | 25% | ||
Second Three Months Anniversary [Member] | |||
Vesting Percentage | 25% | ||
Three Months Anniversary [Member] | |||
Vesting Percentage | 12.50% | ||
Four Three Months Anniversary [Member] | |||
Vesting Percentage | 12.50% | ||
Restricted Stock [Member] | |||
Vesting Percentage | 25% | ||
Vesting Period | 4 years | ||
Shares vested upon issuance of option | 100,000 | ||
Restricted Stock [Member] | Upon Achieving First Target [Member] | |||
Additional shares vested upon achieving certain revenue | 25,000 | ||
Achieved revenue | $ 500,000 | ||
Additional Shares | 50,000 | ||
vesting upon achieving | $ 2,000,000 | ||
Revenue and an additional Shares | 100,000 | ||
vesting upon achieving revenue | $ 10,000,000 | ||
Certaion Employees [Member] | |||
Stock-based compensation expenses | 800 | ||
Deferred compensation expense | $ 5,700,000 | ||
Restricted share issued | 1,745,000 | ||
Vested Award [Member] | |||
Stock-based compensation expenses | $ 313 | $ 344 | |
Weighted average period | 1 year 1 month 2 days | ||
Unamortized compensation expenses | $ 615,000 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |||||||
Jul. 07, 2023 | Jul. 06, 2023 | Jul. 05, 2023 | Aug. 24, 2023 | Jul. 25, 2023 | Jun. 30, 2023 | Jun. 30, 2023 | Aug. 30, 2023 | Jun. 30, 2022 | |
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | ||||||
Common stock shares issued | 2,265,000 | ||||||||
SubsequentEvent [Member] | |||||||||
Price per share | $ 2 | ||||||||
Restricted common stock | 175,000 | ||||||||
Description of services agreement with Stray Digital | the Company entered into a services agreement with Stray Digital for digital marketing and search engine optimization services for a term of twelve months commencing on July 15, 2023. Stray Digital will receive a monthly fee of $20,000 in each of the first three months of the engagement and $26,000 each month thereafter. In addition, Stray Digital will receive a share of all online Shopify net revenue from sales in the Unites States and Europe, and an equity grant of an option to purchase 50,000 shares of the Company’s stock | ||||||||
Overhead costs reduced | 30% | ||||||||
Proceeds from sale | $ 350,000,000 | ||||||||
SubsequentEvent [Member] | Superfoods, Inc [Member] | |||||||||
Unpaid sales tax | $ 6,785 | ||||||||
SubsequentEvent [Member] | Litigation [Member] | |||||||||
Due to Google LLC | $ 236,423 | ||||||||
Aggregate payble amount to Google LLC | 203,373 | ||||||||
Monthly installments | $ 16,977 | ||||||||
Common Stocks [Member] | SubsequentEvent [Member] | |||||||||
Price per share | $ 2 | ||||||||
Conversion price | $ 2 | ||||||||
Seed Preferred stock shares converted | 1,975,000 | ||||||||
Common stock shares issued | 1,975,000 | ||||||||
DRF Althea | |||||||||
Common membership interest shares | 1,250,000,000 | 1,250,000,000 | |||||||
Description of agreement with DRF Althea | (i) 600,000 units of Membership Interest in Chopra HLCO LLC, valued at $1,200,000, or $2.00 per unit, in exchange for the intellectual property for two existing products developed by Althea UK and the future delivery of an additional three products currently in development by Althea UK and (ii) an additional 525,000 units of Membership Interest in the Company valued at $1,050,000, $2.00 per share, split into seven tranches of 75,000 units of the Membership Interest in the Company | ||||||||
Common stock, par value | $ 2 | $ 2 | |||||||
Purchase price | $ 2,500,000 | $ 2,500,000 |