| Note 2 - Summary of Significant Accounting Policies | Note 2 – Summary of Significant
Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated
and combined financial statements have been prepared in accordance with accounting principles generally accepted in the United
States of America (“GAAP”). The unaudited condensed financial statements included herein are unaudited. Such financial
statements, in the opinion of management, contain all adjustments necessary to present fairly the financial position and results
of operations as of and for the periods indicated. All such adjustments are of a normal recurring nature outside of the combination
of Appreciation Financial. These interim results are not necessarily indicative of the results to be expected for the year ending
June 30, 2021 or for any other period. Certain information and footnote disclosures normally included in the financial statements
prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange
Commission, and because of this, for further information, readers should refer to the financial statements and footnotes included
in its Form 10-K for the fiscal year ended June 30, 2020 filed on October 13, 2020. The Company believes that the disclosures are
adequate to make the interim information presented not misleading. Consolidation and Combination The Company’s policy is to consolidate
all entities that it controls by ownership of a majority of the outstanding voting stock. In addition, upon the acquisition of
PERA LLC, the Company combined entities that met the criteria of having common control with Grow Capital and its controlled subsidiaries.
Upon the acquisition of PERA LLC (see below), the Company identified certain common control entities, the operations of which are
included in our consolidated and combined financial statements. The accompanying
unaudited condensed consolidated and combined financial statements include the accounts of Grow Capital Inc. and its wholly-owned
subsidiaries, Bombshell Technologies Inc., The Resort at Lake Selmac and PERA LLC, as well as PERA Administrators LLC, the operations
of which are for the sole benefit of PERA LLC. In addition, the Company has combined the results of Appreciation Financial LLC
and Appreciation Rewards LLC. At the time of the acquisition of PERA LLC, the Company determined that Appreciation Financial
was the primary beneficiary of PERA LLC. In addition, the Company determined that it has common ownership with Appreciation
Financial and the Company has had discussions with the members of Appreciation Financial about potential combinations, which as
of the date of these financial statements are not yet probable. However, because of the nature of the relationship, the Company
determined that while Appreciation Financial is not a variable interest entity to the Company, the nature of the common control
relationship coupled with the inter-relationship with PERA LLC meant that in order for the results of operations and financial
position to not be misleading, the Company had to combine its results with those of Appreciation Financial upon the acquisition
of PERA, LLC. 7 Reported operations in the three months ended
September 30, 2020 include operations of our wholly owned subsidiaries Bombshell and The Resort at Lake Selmac, as as well as the
results of operations by PERA LLC and its common control entities for the period from acquisition (August 19, 2020 through September
30, 2020). In addition, September 30, 2020 operating results also include the combined results of both Appreciation Financial
LLC Appreciations Rewards LLC for the period from August 19, 2020 to September 30, 2020. Results for the comparative three month
period ended September 30, 2019 include Grow Capital, Bombshell and the Resort at Lake Selmac. All material intercompany accounts, transactions,
and profits have been eliminated in consolidation and with and between the combined entities. Use of Estimates The preparation of financial statements in
conformity with accounting principles generally accepted in the United States of America 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 financial statements and the reported amounts of revenues and expenses during the reporting period. Significant
items subject to estimates and assumptions include timing of recognition of commission revenue on insurance policy renewals and
expenses related thereto, along with costs associated with policy acquisition and our allowance for doubtful accounts and useful
lives of our fixed assets related to Lake Selmac. Actual results could differ from those estimates. Cash and Cash Equivalents For financial accounting purposes, cash and
cash equivalents are considered to be all highly liquid investments with a maturity of three (3) months or less at the time of
purchase. Concentrations Concentration of Credit Risk Financial instruments that potentially subject
the Company to concentration of credit risk consist principally of cash deposits. Accounts at each institution are insured by the
Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. At September 30, 2020 and 2019, the Company had $272,767
and $0 in excess of the FDIC insured limit, respectively. Concentration Risk - Revenues For the three months ended September 30, 2020,
one customer accounted for 53% of combined and consolidated gross revenue, 57% of combined and consolidated revenue from non-related
parties and 70% of revenue recorded by Appreciation Financial LLC. The contribution of revenue to the three month operating
period ended September 30, 2020 was derived from operations of Appreciation Financial LLC for the period between August 19, 2020
and September 30, 2020. Concentration of Financing Risk Appreciation Financial is dependent upon on
its largest customer for financing of its operations. That customer has provided commission advances of approximately $3.3
million and loans of approximately $4.8 million as of September 30, 2020. Accounts Receivable and Allowance for Doubtful
Accounts The Company determines the allowance for doubtful
accounts by considering a number of factors, including the length of time the accounts receivable are beyond the contractual payment
terms, previous loss history, and the customer’s current ability to pay its obligation. When the Company becomes aware of
a specific customer’s inability to meet its financial obligations to the Company, the Company records a charge to the allowance
to reduce the customer’s related accounts. At September 30, 2020, the allowance for doubtful accounts totaled approximately
$41,400. Lease Receivables and deferred rent Lease receivables are recognized when rents
are due, and for the straight-line adjustment to rents over the term of the lease less an allowance for expected uncollectible
amounts. Inherent in the assessment of the allowance for doubtful accounts are certain judgments and estimates including, among
others, the customer's willingness or ability to pay, the Company's compliance with lease terms, the effect of general economic
conditions and the ongoing relationship with the customer. Accounts with outstanding balances longer than the payment terms are
considered past due. We do not charge interest on past due balances. The Company writes off lease receivables when it
determines that they have become uncollectible after all reasonable collection efforts have been made. If we record
bad debt expense, the amount is reflected as a component of operating expenses in the statements of operations. Leases In February 2016, the Financial Accounting
Standards Board (“FASB”) issued ASU No. 2016-02 – Topic 842 Leases. The Company has elected to apply the short-term
scope exception for leases with terms of 12 months or less at the inception of the lease and will continue to recognize rent expense
on a straight-line basis. As a result of the adoption, on July 1, 2019, the Company recognized a lease liability of approximately
$291,753, which represented the present value of the remaining minimum lease payments using an estimated incremental borrowing
rate of 6.75%. As of July 1, 2019, the Company recognized a right-to-use asset of approximately $289,089. Lease expense did not
change materially as a result of the adoption of ASU 2016-02. As a result of the acquisition of PERA LLC and combined entity Appreciation
Financial LLC, as of August 19, 2020 the Company recognized a right to use asset of $157,795 and a lease liability of $153,413
with respect to PERA LLC and a right to use asset of $1,575,145 and a lease liability of $1,598,068 with respect to combined
entity Appreciation Financial LLC. Intangible Assets The Company’s intangible assets consist
of intellectual property with minimal value. Investment In and Valuation of Real Estate
Assets Real estate assets are stated at cost, less
accumulated depreciation and amortization. Amounts capitalized to real estate assets consist of the cost of acquisition (excluding
acquisition related expenses), construction costs, and mortgage interest during the period the facilities are under construction
and prior to readiness for occupancy, and any tenant improvements, major improvements and betterments that extend the useful life
of the real estate assets and leasing costs. All repairs and maintenance are expensed as incurred. The Company is required to make subjective
assessments as to the useful lives of its depreciable assets. The Company considers the period of future benefit of each respective
asset to determine the appropriate useful life of the assets. Real estate assets, other than land, are depreciated on a straight-line
basis over the estimated useful life of the asset. The estimated useful lives of the Company's
real estate assets by class are generally as follows:
Land Indefinite
Buildings 40 years
Tenant improvements Lesser of useful life or lease term
Intangible lease assets Lease term Impairment of long-lived assets The Company monitors its long-lived assets
and finite-lived intangibles for indicators of impairment. If such indicators are present, the Company assesses the recoverability
of affected assets by determining whether the carrying value of such assets is less than the sum of the undiscounted future cash
flows of the assets. If such assets are found not to be recoverable, the Company measures the amount of such impairment by comparing
the carrying value of the assets to the fair value of the assets, with the fair value generally determined based on the present
value of the expected future cash flows associated with the assets (See Note 6). Share-based compensation The Company measures the cost of employee services
received in exchange for an award of equity instruments based on the grant date fair value of the award. Unregistered stock awards
are measured based on the fair market values of the underlying stock on the dates of grant. For service type awards, share-based
compensation expense is recognized on a straight-line basis over the period during which the employee is required to provide service
in exchange for the entire award. For awards that vest or begin vesting upon achievement of a performance condition, the Company
estimates the likelihood of satisfaction of the performance condition and recognizes compensation expense when achievement of the
performance condition is deemed probable using an accelerated attribution model. Revenue Recognition under ASC 606 ASC 606 “Revenue from Contracts with Customers” Revenues from contracts with customers are
recognized when control of promised goods and services is transferred to customers in an amount that reflects the consideration
the Company expects to be entitled to in exchange for those goods or services. The Company recognizes revenue using the five-step
model as prescribed by ASC 606:
1) Identification of the contract,
or contracts, with a customer;
2) Identification of the performance
obligations in the contract;
3) Determination of the transaction
price;
4) Allocation of the transaction
price to the performance obligations in the contract; and
5) Recognition of revenue
when or as, the Company satisfies a performance obligation. When a contract with a customer or an agent
is signed, the Company assesses whether collection of the fees under the arrangement is probable. The Company estimates the amount
to reserve for uncollectible amounts at the end of each reporting period based on the aging of the contract balance, current and
historical customer trends, and communications with its customers. These reserves are recorded against the related accounts receivable. The transaction price is the consideration
that the Company expects to receive from its customers and agents in exchange for its products or services. In determining the
allocation of the transaction price, the Company identifies performance obligations in contracts with customers, which may include
subscriptions to software and services, support, professional services and customization. In the case of the Company’s
software contracts and support services prices are predetermined based on the specific terms of the contract either in flat fee
customization/license fee charges or as hourly support and/or software customization charges. Charges relative to license fees
are amortized over the term of the license. Charges relative to customization of the software are charged over the term of the
scope of work on a percentage of completion basis. Charges relative to support and ongoing services and professional fees are charged
when incurred and control has been transferred or the work has been completed. Income earned through the sale of appointments to
agents by PERA LLC are recognized on the date of the service appointment. License fees and customization of software License and implementation fees are charged
as flat fees which are amortized over the term of the contract. For contracts with elements related to customized software
solutions and certain build-outs or software systems that require significant modification or customization, the Company will recognize
revenue using the percentage-of-completion method. In using the percentage-of-completion method, revenues are generally recorded
based on completion of milestones under a scope of work or based on total estimated cost of work and percentage completion as at
the balance sheet date. Software Revenue The Company generates software revenue monthly
on a single fee per subscribed user basis. The Company recognizes software revenue monthly on a per user for each user that
is able to deploy software and provided all revenue recognition criteria have been met. If the revenue recognition criteria has
not been met, the revenue is deferred or not recognized. Customization, support and maintenance Revenue from the Company’s customization
of software to meet a particular client’s needs is recognized on a percentage of completion basis over the term of the customization
work and until control of the goods or services is transferred to the customer or such date the customer agrees the scope of work
has been completed and the intended functionality of the software is complete and able to perform the desired service. Support
and maintenance revenue is generated from recurring monthly support and is invoiced monthly based on hourly fees at predetermined
rates based on each customer contract. The Customer is credited a certain number of
services hours monthly based on the numbers of users actively subscribed to the software which amounts offset any monthly user
fees. Support and maintenance services include e-mail
and telephone support, unspecified rights to software fixes and product updates and upgrades and enhancements available on a when-and-if
available basis. Professional services and other Professional services and other revenue is
generated through services including onsite training, product implementation and other similar services. Professional services
are generally flat fee services based on a number of hours or scope of work for each specific service. Depending on the services
to be provided, revenue from professional services and other is generally recognized at the time of delivery when the services
have been completed and control has been transferred. Income from agent appointments Income generated by booking appointments for
insurance agents is earned on the date on which the appointment takes place. Appointment fees which are collected in advance
of appointments are recorded as unearned revenue. Unearned Revenue Unearned revenue represents billings or payments
received in advance of revenue recognition and is recognized upon transfer of control. Balances consist primarily of appointment
fees collected from member agents where the client appointment has not yet occurred, license fees being amortized over the term
of the customer contract and customization services which have not yet been concluded and are being deferred using the percentage-of-completion
method. Campground space rentals and concession
sales Revenues from our campsite operations from
the sales of concession items, equipment rentals or campsite locations are recoded on the cash basis due to the nature of collection
of campsite fees and concession items, which occur daily as the site is rented and sundry items are purchased. Commissions earned on insurance coverage
(Appreciation Financial LLC) Appreciation Financial LLC earns commissions
paid by insurance carriers for the binding of insurance coverage. Commissions are earned at a point in time upon the effective
date of bound insurance coverage, as no performance obligation exists after coverage is bound. If there are other services within
the contract, Appreciation estimates the stand-alone selling price for each separate performance obligation, and the corresponding
apportioned revenue is recognized over a period of time as the performance obligations are fulfilled. Incentive commissions represent
a form of variable consideration which includes additional commissions over base commissions received from insurance carriers based
on predetermined production levels mutually agreed upon by both parties. Incentive commissions are estimated with a constraint
applied and accrued relative to the recognition of the corresponding core commissions based on the amount of consideration that
will be received in the coming year such that a significant reversal of revenue is not probable. Advance Commissions are
paid by insurance carriers under agreed terms of certain individual customer policies. Advance Commissions are recorded as
deferred revenue and amortized over the term of the contract. Appreciation Management determines the policy
cancellation reserve based upon historical cancellation experience adjusted for any known circumstance. Commission revenues – Prior to the adoption
of Topic 606, commission revenues, including those billed on an installment basis, were recognized on the latter of the policy
effective date or the date that the premium was billed to the customer. As a result of the adoption of Topic 606, commission revenues
associated with the issuance of policies are now recognized upon the effective date of the associated policy. The overall impact
of these changes is expected to be significant.. These commission revenues, including those billed on an installment basis, will
now be recognized earlier than they had been previously. Revenue is accrued based upon the completion of the performance obligation,
thereby creating a current asset for the unbilled revenue, until such time as an invoice is generated. Incentive and contingent commissions –
Prior to the adoption of Topic 606, revenue that was not fixed and determinable because a contingency existed was not recognized
until the contingency was resolved. Under Topic 606, Appreciation must estimate the amount of consideration that will be
received in the coming year such that a significant reversal of revenue is not probable. Incentive and contingent commissions
represent a form of variable consideration associated with the placement of coverage, for which we earn commissions and fees.
In connection with Topic 606, these commissions are estimated with a constraint applied and accrued relative to the recognition
of the corresponding core commissions. The resulting effect on the timing of recognizing of these contingent commissions
will now more closely follow a similar pattern as our commissions and fees with any true-ups recognized when payments are received
or as additional information that affects the estimate becomes available. Fee Revenues: Appreciation earns fee revenue
related to the onboarding of its agents which is recorded at the time of the transaction. Additionally, Appreciation is required to evaluate
the impact of ASC Topic 340 – Other Assets and Deferred Cost (“ASC 340”) which requires companies to defer certain
incremental cost to obtain customer contracts, and certain costs to fulfill customer contracts. Incremental cost to obtain – The adoption
of ASC 340 is expected to result in Appreciation deferring certain costs to obtain customer contracts primarily as they relate
to commission-based compensation for which the Company pays an incremental amount of compensation on new business. These incremental
costs are expected to be deferred and amortized based on the term of customer polices and expected renewals. Cost to fulfill – The adoption of ASC
340 may result in Appreciation deferring certain costs to fulfill contracts and recognizing costs as the associated performance
obligations are fulfilled. In order for contract fulfillment costs to be deferred under ASC 340, the costs must (1) relate directly
to a specific contract or anticipated contract, (2) generate or enhance resources that Appreciation will use in satisfying its
obligations under the contract, and (3) be expected to be recovered through sufficient net cash flows from the contract. As of the filing date, Appreciation Financial
is unable to estimate with certainty its historical renewal rates for the insurance policies previously sold and therefore has
not included commission revenue to be earned upon renewal based on this estimate. This also means that Appreciation is unable
to estimate the costs to be deferred under ASC 340, or the costs to be expensed upon recognition of renewal revenue under ASC 606.
Appreciation Financial prior to the combination of its financial statements herein did not previously report the results of its
operations and financial position under US GAAP and is currently in the process of developing the systems and processes in which
to estimate these amounts. The Company currently expects that the processes and systems will be in place for the reporting
for the Company’s year ended June 30, 2021 financial statements. Fair Value of Financial Instruments The Company follows the fair value measurement
rules, which provides guidance on the use of fair value in accounting and disclosure for assets and liabilities when such accounting
and disclosure is called for by other accounting literature. These rules establish a fair value hierarchy for inputs to be used
to measure fair value of financial assets and liabilities. This hierarchy prioritizes the inputs to valuation techniques used to
measure fair value into three levels: Level 1 (highest priority), Level 2, and Level 3 (lowest priority). Level 1—Unadjusted quoted prices
in active markets for identical assets or liabilities that the Company has the ability to access at the balance sheet date. Level 2—Inputs other than quoted
prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2
inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets
or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (i.e., interest
rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation
or other means (market corroborated inputs). Level 3—Inputs are unobservable
and reflect the Company’s assumptions as to what market participants would use in pricing the asset or liability. The Company
develops these inputs based on the best information available. The carrying amount of receivables and accounts
payable and accrued expenses approximates fair value due to the short-term nature of those instruments. The estimated fair values for financial instruments
are determined at discrete points in time based on relevant market information. These estimates involve uncertainties
and cannot be determined with precision. The carrying amounts of lease receivables, accounts payable, and accrued liabilities
approximate fair value given their short-term nature or effective interest rates, which constitutes level three inputs. Income taxes Deferred tax assets and liabilities are recognized
for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets
and liabilities and their respective tax bases and net operating loss and credit carryforwards. Deferred tax assets and liabilities
are measured at rates expected to apply to taxable income in the years in which those temporary differences and carryforwards are
expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in
the statement of operations in the period that includes the enactment date. A valuation allowance is recorded when it is not more
likely than not that all or a portion of the net deferred tax assets will be realized. In the quarters ended September 30, 2020 and
2019, the Company issued a significant number of new shares in its acquisition of PERA LLC and Bombshell Technologies, Inc. (see
Note 4) and the cancellation of then outstanding shares upon the sale of WCS Enterprises, LLC (see Note 5). The effect of
these issuances and cancellations is that most likely, the Company experienced the requisite change of control as promulgated under
the US Internal Revenue Code section 382. The effect of this will be that going forward, the ability of the Company to utilize
the US Federal net operating loss carryforwards of Grow Capital, Inc. from prior to these transactions will be limited in its usage.
In order to determine the specific effect, the Company must perform the computations required under the Internal Revenue
Code, which have not yet been performed. The Company expects it will perform the required computations once its evident that
profits are likely. Net (loss) income per share Basic earnings per share is computed by dividing
income available to common shareholders by the weighted average number of shares of Common Stock outstanding for the period and
contains no dilutive securities. Diluted earnings per share reflect the potential dilution of securities that could share in the
earnings of an entity. For the three months ended September 30, 2020 and 2019, all potentially dilutive securities are
anti-dilutive due to the Company's losses from operations. All dilutive common stock equivalents are reflected
in our earnings (loss) per share calculations. Anti-dilutive common stock equivalents are not included in our earnings (loss) per
share calculations. There were no potential shares outstanding
as of September 30, 2020 and 2019. Reclassification Certain prior period balances have been reclassified
to conform to the current period presentation in the Company’s consolidated financial statements and the accompanying notes.
These reclassifications had no effect on net income for the prior periods. In addition, we previously included the results
of operations and financial position of the Resort on Lake Selmac for the period ended September 30, 2019 in discontinued operations
and assets and liabilities held for sale, respectively. Subsequent to the original Form 10-Q filing for the period ended
September 30, 2019, we no longer had a plan of sale and therefore the results of Lake Selmac and its financial position are now
included in our results from continuing operations and cash flows for the period ended September 30, 2019. Recent Accounting Pronouncements Fair Value Measurements (“ASU 2018-03”). The amendments on changes in unrealized gains
and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements,
and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual
period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods
presented upon their effective date. Early adoption is permitted upon issuance of ASU 2018-13. An entity is permitted to early
adopt any removed or modified disclosures upon issuance of ASU 2018-13 and delay adoption of the additional disclosures until their
effective date. The Company is currently assessing the impact that ASU 2018-13 will have on its financial statements. Financial Instruments – Credit
Losses (“ASU 2016-13”). The standard was originally effective for interim
and annual reporting periods beginning after December 15, 2019 and early adoption is permitted for interim and annual reporting
periods beginning after December 15, 2018. However, in November 2019, the Financial Accounting Standard Board (FASB) issued ASU
2019-10, Financial Instruments—Credit Losses, (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic
842) — Effective Dates ASU 2019-10 |
