Document And Entity Information
Document And Entity Information - shares | 6 Months Ended | |
Dec. 31, 2021 | Feb. 22, 2022 | |
Document Information Line Items | ||
Entity Registrant Name | Nightfood Holdings, Inc. | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --06-30 | |
Entity Common Stock, Shares Outstanding | 90,785,178 | |
Amendment Flag | false | |
Entity Central Index Key | 0001593001 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Document Period End Date | Dec. 31, 2021 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q2 | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 000-55406 | |
Entity Incorporation, State or Country Code | NV | |
Entity Tax Identification Number | 46-3885019 | |
Entity Address, Address Line One | 520 White Plains Road | |
Entity Address, Address Line Two | Suite 500 | |
Entity Address, City or Town | Tarrytown | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 10591 | |
Entity Interactive Data Current | Yes | |
City Area Code | 888 | |
Local Phone Number | 888-6444 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Dec. 31, 2021 | Jun. 30, 2021 |
Current assets: | ||
Cash | $ 794,502 | $ 1,041,899 |
Accounts receivable – net | 60,679 | 109,589 |
Inventories | 425,331 | 387,736 |
Other current assets | 119,093 | 33,480 |
Total current assets | 1,399,605 | 1,572,704 |
Total assets | 1,399,605 | 1,572,704 |
Current liabilities: | ||
Accounts payable | 257,802 | 459,703 |
Accrued expense-related party | 3,000 | |
Convertible notes payable – net of discount | 80,946 | |
Total current liabilities | 338,748 | 462,703 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Series A Stock, ($0.001 par value, 1,000,000 shares authorized, and 1,000 issued and outstanding as of December 31, 2021 and June 30, 2021, respectively) | 1 | 1 |
Series B Stock, ($0.001 par value, 5,000 shares authorized, and 3,835 and 4,665 issued and outstanding as of December 31, 2021 and June 30, 2021, respectively) | 4 | 5 |
Common stock, ($0.001 par value, 200,000,000 shares authorized, and 87,060,178 issued and outstanding as of December 31, 2021 and 80,707,467 issued and outstanding as of June 30, 2021, respectively) | 87,060 | 80,707 |
Additional paid in capital | 28,143,914 | 26,226,159 |
Accumulated deficit | (27,170,122) | (25,196,871) |
Total stockholders’ equity | 1,060,857 | 1,110,001 |
Total liabilities and stockholders’ equity | $ 1,399,605 | $ 1,572,704 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parentheticals) - $ / shares | Dec. 31, 2021 | Jun. 30, 2021 |
Common stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 87,060,178 | 80,707,467 |
Common stock, shares outstanding | 87,060,178 | 80,707,467 |
Series A stock | ||
Preferred stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 1,000 | 1,000 |
Preferred stock, shares outstanding | 1,000 | 1,000 |
Series B stock | ||
Preferred stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000 | 5,000 |
Preferred stock, shares issued | 3,835 | 4,665 |
Preferred stock, shares outstanding | 3,835 | 4,665 |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Statements of Operations - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Statement [Abstract] | ||||
Revenues | $ 79,374 | $ 47,210 | $ 193,827 | $ 174,193 |
Operating expenses | ||||
Cost of product sold | 88,105 | 110,465 | 212,979 | 340,161 |
Selling, general and administrative expense | 469,659 | 398,964 | 1,292,913 | 832,293 |
Total operating expenses | 557,764 | 509,429 | 1,505,892 | 1,172,454 |
Loss from operations | (478,390) | (462,219) | (1,312,065) | (998,261) |
Interest expense – bank debt | 338 | 675 | ||
Interest expense - shareholder | 4,909 | 125,575 | 4,909 | 209,530 |
Interest expense – financing cost | 270,210 | 270,210 | ||
Amortization of debt discount | 12,218 | 254,048 | 12,218 | 576,787 |
(Gain)/loss on extinguishment of debt upon notes conversion | (186,181) | 2,216 | ||
Change in derivative liability | (57,294) | (264,818) | ||
Other expense- non cash | 15,192 | 15,192 | 19,877 | |
Total other expense | 302,529 | 136,486 | 302,529 | 544,267 |
Provision for income tax | ||||
Net Loss | (780,919) | (598,705) | (1,614,594) | (1,542,528) |
Deemed dividend on Series B Stock | 68,722 | 358,657 | ||
Net loss attributable to common shareholders | $ (849,641) | $ (598,705) | $ (1,973,251) | $ (1,542,528) |
Basic and diluted net loss per common share (in Dollars per share) | $ (0.01) | $ (0.01) | $ (0.02) | $ (0.03) |
Weighted average shares of capital outstanding – basic and diluted (in Shares) | 86,407,410 | 66,744,545 | 84,400,978 | 65,093,781 |
Unaudited Condensed Consolida_2
Unaudited Condensed Consolidated Statements of Changes in Stockholders' Deficit - USD ($) | Preferred Stock APreferred Stock | Preferred Stock BPreferred Stock | Common Stock | Preferred Stock | Additional Paid in Capital | Accumulated Deficit | Total |
Balance at Jun. 30, 2020 | $ 61,797 | $ 1 | $ 13,088,177 | $ (17,631,122) | $ (4,481,147) | ||
Balance (in Shares) at Jun. 30, 2020 | 61,796,680 | 1,000 | |||||
Common stock issued for interest | $ 313 | 36,165 | 36,478 | ||||
Common stock issued for interest (in Shares) | 312,938 | ||||||
Issuance of common stock for debt conversion | $ 2,976 | 344,024 | 347,000 | ||||
Issuance of common stock for debt conversion (in Shares) | 2,975,979 | ||||||
Issuance of warrants | 65,711 | 65,711 | |||||
Loss on fair value of shares issued upon debt conversion | 397,532 | 397,532 | |||||
Net loss | (943,824) | (943,824) | |||||
Balance at Sep. 30, 2020 | $ 65,086 | $ 1 | 13,931,609 | (18,574,946) | (4,578,250) | ||
Balance (in Shares) at Sep. 30, 2020 | 65,085,597 | 1,000 | |||||
Balance at Jun. 30, 2020 | $ 61,797 | $ 1 | 13,088,177 | (17,631,122) | (4,481,147) | ||
Balance (in Shares) at Jun. 30, 2020 | 61,796,680 | 1,000 | |||||
Warrants issued as financing cost | |||||||
Net loss | (1,542,528) | ||||||
Balance at Dec. 31, 2020 | $ 68,887 | $ 1 | 14,217,423 | (19,173,651) | (4,887,339) | ||
Balance (in Shares) at Dec. 31, 2020 | 68,886,863 | 1,000 | |||||
Balance at Sep. 30, 2020 | $ 65,086 | $ 1 | 13,931,609 | (18,574,946) | (4,578,250) | ||
Balance (in Shares) at Sep. 30, 2020 | 65,085,597 | 1,000 | |||||
Common stock issued for services | $ 584 | 88,089 | 88,673 | ||||
Common stock issued for services (in Shares) | 583,914 | ||||||
Common stock issued for interest | $ 336 | 24,672 | 25,008 | ||||
Common stock issued for interest (in Shares) | 336,132 | ||||||
Issuance of common stock for debt conversion | $ 2,881 | 212,119 | 215,000 | ||||
Issuance of common stock for debt conversion (in Shares) | 2,881,220 | ||||||
Loss on fair value of shares issued upon debt conversion | (39,065) | (39,065) | |||||
Net loss | (598,705) | (598,705) | |||||
Balance at Dec. 31, 2020 | $ 68,887 | $ 1 | 14,217,423 | (19,173,651) | (4,887,339) | ||
Balance (in Shares) at Dec. 31, 2020 | 68,886,863 | 1,000 | |||||
Balance at Jun. 30, 2021 | $ 1 | $ 5 | $ 80,708 | 26,226,159 | (25,196,871) | 1,110,001 | |
Balance (in Shares) at Jun. 30, 2021 | 1,000 | 4,665 | 80,707,467 | ||||
Common stock issued for services | $ 519 | 139,481 | 140,000 | ||||
Common stock issued for services (in Shares) | 518,519 | ||||||
Common stock from conversion | $ (1) | $ 3,865 | (3,864) | ||||
Common stock from conversion (in Shares) | (773) | 3,865,000 | |||||
Preferred B issued from private placement | 335,000 | 335,000 | |||||
Preferred B issued from private placement (in Shares) | 335 | ||||||
Preferred B issued from private placement- financing cost | (26,800) | (26,800) | |||||
Deemed dividends associated with Preferred B | 289,935 | (289,935) | |||||
Net loss | (833,675) | (833,675) | |||||
Balance at Sep. 30, 2021 | $ 1 | $ 4 | $ 85,091 | 26,959,911 | (26,320,481) | 724,526 | |
Balance (in Shares) at Sep. 30, 2021 | 1,000 | 4,227 | 85,090,986 | ||||
Balance at Jun. 30, 2021 | $ 1 | $ 5 | $ 80,708 | 26,226,159 | (25,196,871) | 1,110,001 | |
Balance (in Shares) at Jun. 30, 2021 | 1,000 | 4,665 | 80,707,467 | ||||
Warrants issued as financing cost | (170,210) | ||||||
Deemed dividends associated with warrants related dilutive adjustments | 68,722 | ||||||
Net loss | (1,614,594) | ||||||
Balance at Dec. 31, 2021 | $ 1 | $ 4 | $ 87,060 | 28,143,914 | (27,170,122) | 1,060,857 | |
Balance (in Shares) at Dec. 31, 2021 | 1,000 | 3,835 | 87,060,178 | ||||
Balance at Sep. 30, 2021 | $ 1 | $ 4 | $ 85,091 | 26,959,911 | (26,320,481) | 724,526 | |
Balance (in Shares) at Sep. 30, 2021 | 1,000 | 4,227 | 85,090,986 | ||||
Common stock issued for services | $ 50 | 15,718 | 15,768 | ||||
Common stock issued for services (in Shares) | 50,500 | ||||||
Common stock from conversion | $ 1,960 | (1,960) | |||||
Common stock from conversion (in Shares) | (392) | 1,960,000 | |||||
Unissued shares previously allocated for services | $ (41) | 41 | |||||
Unissued shares previously allocated for services (in Shares) | (41,308) | ||||||
Discount on issuance of convertible notes | 931,272 | 931,272 | |||||
Warrants issued as financing cost | 170,210 | 170,210 | |||||
Deemed dividends associated with warrants related dilutive adjustments | 68,722 | (68,722) | |||||
Net loss | (780,919) | (780,919) | |||||
Balance at Dec. 31, 2021 | $ 1 | $ 4 | $ 87,060 | $ 28,143,914 | $ (27,170,122) | $ 1,060,857 | |
Balance (in Shares) at Dec. 31, 2021 | 1,000 | 3,835 | 87,060,178 |
Unaudited Condensed Consolida_3
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) | 6 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (1,614,594) | $ (1,542,528) |
Adjustments to reconcile net loss to net cash used in operations activities: | ||
Warrants issued for services | 65,711 | |
Warrants issued for financing cost | 170,210 | |
Stock issued for services | 155,768 | 88,673 |
Amortization of debt discount | 12,218 | 576,787 |
Deferred financing cost and debt issuance cost | 100,000 | 112,604 |
Change in derivative liability | (264,818) | |
Loss on extinguishment of debt upon notes conversion | 2,216 | |
Non cash expenses | 15,167 | |
Change in operating assets and liabilities | ||
Change in accounts receivable | 48,910 | 19,723 |
Change in inventory | (37,595) | 109,564 |
Change in other current assets | (85,614) | 185,859 |
Change in accounts payable | (201,901) | (145,947) |
Change in accrued expenses | (3,000) | 174,277 |
Net cash used in operating activities | (1,440,431) | (617,879) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from issuance of Series B Preferred Stock | 308,200 | |
Proceeds from the issuance of debt-net | 884,834 | 540,000 |
Borrowings on line of credit | 2,205 | |
Net cash provided by financing activities | 1,193,034 | 537,795 |
NET (DECREASE) IN CASH AND CASH EQUIVALENTS | (247,397) | (80,084) |
Cash and cash equivalents, beginning of period | 1,041,899 | 197,622 |
Cash and cash equivalents, end of period | 794,502 | 117,538 |
Supplemental Disclosure of Cash Flow Information: | ||
Interest | 675 | |
Income taxes | ||
Summary of Non-Cash Investing and Financing Information: | ||
Initial derivative liability and debt discount accounted | 373,612 | |
Derivative liability reclassed to loss on extinguishment of debt upon notes conversion | 320,746 | |
Stock issued for conversion of debt | 562,000 | |
Stock Issued for Interest | 61,486 | |
True-up adjustment in debt discount and derivative liability | 37,360 | |
Common stock issued for preferred stock conversion | 5,825 | |
Deemed dividend associated with preferred stock B and warrants dilutive adjustment | 358,657 | |
Debt and warrants discount accounted on convertible notes | $ 931,272 |
Description of Business
Description of Business | 6 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Description of Business | 1. Description of Business Nightfood Holdings, Inc. (“we”, “us” “the Company” or “Nightfood”) is a Nevada corporation organized on October 16, 2013 to acquire all of the issued and outstanding shares of Nightfood, Inc., a New York corporation from its sole shareholder, Sean Folkson. All of our operations are conducted by our Subsidiaries (Nightfood, Inc. and MJ Munchies, Inc.) Our corporate address is 520 White Plains Road – Suite 500, Tarrytown, New York 10591 and our telephone number is 888-888-6444. We maintain a web site at www.nightfood.com, along with several additional web properties. Any information that may appear on our web site should not be deemed to be a part of this report. The Company’s fiscal year end is June 30. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Management is responsible for the fair presentation of the Company’s financial statements, prepared in accordance with U.S. generally accepted accounting principles (GAAP). Interim Financial Statements These unaudited condensed consolidated financial statements for the three and six months ended December 31, 2021 and 2020, respectively, reflect all adjustments including normal recurring adjustments, which, in the opinion of management, are necessary to present fairly the financial position, results of operations and cash flows for the periods presented in accordance with the accounting principles generally accepted in the United States of America. These interim unaudited condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements and notes thereto for the fiscal years ended June 30, 2021 and 2020, respectively, which are included in the Company’s June 30, 2021 Annual Report on Form 10-K filed with the United States Securities and Exchange Commission on October 13, 2021. The Company assumes that the users of the interim financial information herein have read, or have access to, the audited consolidated financial statements for the preceding period, and that the adequacy of additional disclosure needed for a fair presentation may be determined in that context. The results of operations for the three and six months ended December 31, 2021, are not necessarily indicative of results for the entire fiscal year ending June 30, 2022. We made certain reclassifications to prior period amounts to conform with the current year’s presentation. These reclassifications did not have a material effect on our condensed consolidated statement of financial position, results of operations or cash flows. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles 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. Actual results could differ from those estimates. Estimates are used in the determination of depreciation and amortization, the valuation for non-cash issuances of common stock, and the website, income taxes and contingencies, valuing convertible notes for BCF (as defined below) and derivative liability, among others. Cash and Cash Equivalents The Company classifies as cash and cash equivalents amounts on deposit in the banks and cash temporarily in various instruments with original maturities of three months or less at the time of purchase. The Company places its cash and cash equivalents on deposit with financial institutions in the United States. The Federal Deposit Insurance Corporation (“FDIC”) covers $250,000 for substantially all depository accounts. The Company from time to time may have amounts on deposit in excess of the insured limits. Fair Value of Financial Instruments Statement of financial accounting standard FASB Topic 820, Disclosures about Fair Value of Financial Instruments, requires that the Company disclose estimated fair values of financial instruments. The carrying amounts reported in the statements of financial position for assets and liabilities qualifying as financial instruments are a reasonable estimate of fair value. Inventories Inventories consisting of packaged food items and supplies are stated at the lower of cost (FIFO) or net realizable value, including provisions for spoilage commensurate with known or estimated exposures which are recorded as a charge to cost of sales during the period spoilage is incurred. The Company has no minimum purchase commitments with its vendors. Advertising Costs Advertising costs are expensed when incurred and are included in advertising and promotional expense in the accompanying statements of operations. Although not traditionally thought of by many as “advertising costs”, the Company includes expenses related to graphic design work, package design, website design, domain names, and product samples in the category of “advertising costs”. The Company recorded advertising costs of $ 465,791 and $252,325 for the six months ended December 31, 2021 and 2020, respectively. The Company recorded advertising costs of $158,040 and $67,036 for the three months ended December 31, 2021 and 2020, respectively. Income Taxes The Company has not generated any taxable income, and, therefore, no provision for income taxes has been provided. Deferred income taxes are reported for timing differences between items of income or expense reported in the financial statements and those reported for income tax purposes in accordance with FASB Topic 740, “Accounting for Income Taxes”, which requires the use of the asset/liability method of accounting for income taxes. Deferred income taxes and tax benefits 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 for tax loss and credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The Company provides for deferred taxes for the estimated future tax effects attributable to temporary differences and carry-forwards when realization is more likely than not. A valuation allowance has been recorded to fully offset the deferred tax asset even though the Company believes it is more likely than not that the assets will be utilized. The Company’s effective tax rate differs from the statutory rates associated with taxing jurisdictions because of permanent and temporary timing differences as well as a valuation allowance. Revenue Recognition The Company generates its revenue by selling its products wholesale to retailers and wholesalers. All sources of revenue are recorded pursuant to FASB Topic 606 Revenue Recognition, to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This includes a five-step framework that requires an entity to: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when the entity satisfies a performance obligation. In addition, this revenue generation requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The Company frequently offers sales discounts and promotions to supermarket customers through various programs such as rebates, temporary price reductions, product coupons, and other trade activities. This is standard practice for consumer products in the competitive and price-sensitive supermarket space. The Company records these activities as a reduction of gross sales as part of the calculation to arrive at reported net revenue. The Company incurs costs associated with product distribution, such as freight and handling costs. The Company has elected to treat these costs as fulfillment activities and recognizes these costs at the same time that it recognizes the underlying product revenue. As this policy election is in line with the Company’s previous accounting practices, the treatment of shipping and handling activities under FASB Topic 606 did not have any impact on the Company’s results of operations, financial condition and/or financial statement disclosures. The adoption of ASC 606 did not result in a change to the accounting for any of the Company’s revenue streams that are within the scope of the amendments. The Company’s services that fall within the scope of ASC 606 are recognized as revenue as the Company satisfies its obligation to the customer. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which updates revenue recognition guidance relating to contracts with customers. This standard states that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This standard is effective for annual reporting periods, and interim periods therein, beginning after July 1, 2018. The Company adopted ASU 2014-09 and its related amendments (collectively known as “ASC 606”) during the first quarter of fiscal 2019 using the full retrospective method. Management reviewed ASC 606-10-32-25 which states “Consideration payable to a customer includes cash amounts that an entity pays, or expects to pay, to the customer (or to other parties that purchase the entity’s goods or services from the customer). Consideration payable to a customer also includes credit or other items (for example, a coupon or voucher) that can be applied against amounts owed to the entity (or to other parties that purchase the entity’s goods or services from the customer). An entity shall account for consideration payable to a customer as a reduction of the transaction price and, therefore, of revenue unless the payment to the customer is in exchange for a distinct good or service (as described in paragraphs 606-10-25-18 through 25-22) that the customer transfers to the entity. If the consideration payable to a customer includes a variable amount, an entity shall estimate the transaction price (including assessing whether the estimate of variable consideration is constrained) in accordance with paragraphs 606-10-32-5 through 32-13.” If the consideration payable to a customer is a payment for a distinct good service, then in accordance with ASC 606-10-32-26, the entity should account for it the same way that it accounts for other purchases from suppliers (expense). Further, “if the amount of consideration payable to the customer exceeds the fair value of the distinct good or service that the entity receives from the customer, then the entity shall account for such an excess as a reduction of the transaction price. If the entity cannot reasonably estimate the fair value of the good or service received from the customer, it shall account for all of the consideration payable to the customer as a reduction of the transaction price.” Under ASC 606-10-32-27, if the consideration payable to a customer is accounted for as a reduction of the transaction price, “an entity shall recognize the reduction of revenue when (or as) the later of either of the following events occurs: a) The entity recognizes revenue for the transfer of the related goods or services to the customer. b) The entity pays or promises to pay the consideration (even if the payment is conditional on a future event). That promise might be implied by the entity’s customary business practices.” Management reviewed each arrangement to determine if each fee paid is for a distinct good or service and should be expensed as incurred or if the Company should recognize the payment as a reduction of revenue. The Company recognizes revenue upon shipment based on meeting the transfer of control criteria. The Company has made a policy election to treat shipping and handling as costs to fulfill the contract, and as a result, any fees received from customers are included in the transaction price allocated to the performance obligation of providing goods with a corresponding amount accrued within cost of sales for amounts paid to applicable carriers. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash deposits at financial institutions. At various times during the year, the Company may exceed the federally insured limits. To mitigate this risk, the Company places its cash deposits only with high credit quality institutions. Management believes the risk of loss is minimal. At December 31, 2021 and June 30, 2021, the Company did not have any uninsured cash deposits. Beneficial Conversion Feature For conventional convertible debt where the rate of conversion is below market value, the Company records any “beneficial conversion feature” (“BCF”) intrinsic value as additional paid in capital and related debt discount. When the Company records a BCF, the relative fair value of the BCF is recorded as a debt discount against the face amount of the respective debt instrument. The discount is amortized over the life of the debt. If a conversion of the underlying debt occurs, a proportionate share of the unamortized amounts is immediately expensed. Debt Issue Costs The Company may pay debt issue costs in connection with raising funds through the issuance of debt whether convertible or not or with other consideration. These costs are recorded as debt discounts and are amortized over the life of the debt to the statement of operations as amortization of debt discount. The debt issuance costs paid to the third party consultant was directly expensed as incurred. Original Issue If debt is issued with an original issue discount, the original issue discount is recorded to debt discount, reducing the face amount of the note and is amortized over the life of the debt to the statement of operations as amortization of debt discount. If a conversion of the underlying debt occurs, a proportionate share of the unamortized amounts is immediately expensed. Valuation of Derivative Instruments ASC 815 “Derivatives and Hedging” requires that embedded derivative instruments be bifurcated and assessed, along with free-standing derivative instruments such as warrants, on their issuance date and measured at their fair value for accounting purposes. In determining the appropriate fair value, the Company uses the Trinomial Tree option pricing formula. Upon conversion of a note where the embedded conversion option has been bifurcated and accounted for as a derivative liability, the Company records the shares at fair value, relieves all related notes, derivatives and debt discounts and recognizes a net gain or loss on derivative liability under the line item “change in derivative liability”. Derivative Financial Instruments The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks. The Company evaluates all of its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and then is revalued at each reporting date, with changes in fair value reported in the consolidated statement of operations. For stock based derivative financial instruments, Fair value accounting requires bifurcation of embedded derivative instruments such as conversion features in convertible debt or equity instruments, and measurement of their fair value for accounting purposes. In determining the appropriate fair value, the Company uses the Trinomial Tree option-pricing model. In assessing the convertible debt instruments, management determines if the convertible debt host instrument is conventional convertible debt and further if there is a beneficial conversion feature requiring measurement. If the instrument is not considered conventional convertible debt, the Company will continue its evaluation process of these instruments as derivative financial instruments. Once determined, derivative liabilities are adjusted to reflect fair value at the end of each reporting period. Any increase or decrease in the fair value from inception is made quarterly and appears in results of operations as a change in fair market value of derivative liabilities. The Company has adopted ASU 2017-11, Earnings per share (Topic 260), provided that when determining whether certain financial instruments should be classified as liability or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. If a down round feature on the conversion option embedded in the note is triggered, the Company will evaluate whether a beneficial conversion feature exists, the Company will record the amount as a debt discount and will amortize it over the remaining term of the debt. If the down round feature in the warrants that are classified as equity is triggered, the Company will recognize the effect of the down round as a deemed dividend. While the Company currently has no plans to attempt to pay dividends for the foreseeable future to any stockholders, such a deemed dividend would reduce the income available to common stockholders in the hypothetical scenario where a dividend were to be contemplated. Stock-Based Compensation The Company accounts for share-based awards issued to employees in accordance with FASB ASC 718. Accordingly, employee share-based payment compensation is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the requisite service period. Additionally, share-based awards to non-employees are expensed over the period in which the related services are rendered at their fair value. The Company applies ASC 718, “Equity Based Payments to Non-Employees”, with respect to options and warrants issued to non-employees. Customer Concentration During the six months ended December 31, 2021, the Company had one customer account for 26% of the gross sales. One other customer accounted for 18% of the gross sales and two other customers each account for more than 10% of the gross sales. During the six months ended December 31, 2020, the Company had one customer account for approximately 33% of the gross sales, one customer accounted for approximately 19% of gross sales, and one customer accounted for over 10% of gross sales. During the three months ended December 31, 2021, the Company had one customer account for 36% of the gross sales. One other customer accounted for 22% of the gross sales. During the three months ended December 31, 2020, the Company had one customer account for approximately 25% of the gross sales. One other customer accounted for approximately 20% of gross sales, and two other customers accounted for over 10% of gross sales. Vendor Concentration During the three and six-month periods ended December 31, 2021, no vendors accounted for more than 10% of the Company’s operating expenses During the three-month period ended December 31, 2020, no vendors accounted for more than 10% of the Company’s operating expenses. During the six-month period ended December 31, 2020, one vendor accounted for more than 10% of the Company’s operating expenses. Receivables Concentration As of December 31, 2021, the Company had receivables due from eight customers, of which one customer accounted for 42% of the total balance, one customer accounted for 27% of the total balance, one customer accounted for 14% of the total balance and two customers each accounted for 10% of the total balance. As of June 30, 2021, the Company had receivables due from five customers, of which one customer accounted for over 73% of the total balance (this customer operates 42 distribution centers), and one of the remaining four accounted for 11.5% of the total balance. Income/Loss Per Share Net income/loss per share data for both the three and six-month periods ending December 31, 2021 and 2020, are based on net income/loss available to common shareholders divided by the weighted average of the number of common shares outstanding. The Company does not present a diluted Earnings per share as the convertible debt and interest that is convertible into shares of the Company’s common stock would not be included in this computation, as the Company is generating a loss and therefore these shares would be antidilutive. Impairment of Long-lived Assets The Company accounts for long-lived assets in accordance with the provisions of FASB Topic 360, Accounting for the Impairment of Long-Lived Assets. This statement requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset. 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. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. Fair values are determined based on quoted market value, discounted cash flows or internal and external appraisals, as applicable. During the three and six month periods ended December 31, 2021 and 2020, there were no impairments on intangible assets. Reclassification The Company may make certain reclassifications to prior period amounts to conform with the current year’s presentation. These reclassifications did not have a material effect on its consolidated statement of financial position, results of operations or cash flows. Recent Accounting Pronouncements In January 2016, the FASB issued ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10) – Recognition and Measurement of Financial Assets and Financial Liabilities, which requires all investments in equity securities with readily determinable fair value to be measured at fair value with changes in the fair value recognized through net income (other than those accounted for under the equity method of accounting or those that result in consolidation of the investee). ASU 2016-01 is intended to enhance the reporting model for financial instruments to provide users of financial statements with more decision-useful information and removes the requirement to disclose the methods and significant assumptions used to estimate the fair value for financial instruments measured at amortized cost on the balance sheet. For public companies, the new standard is effective for annual periods beginning after December 15, 2017, including interim periods within the fiscal year. For all other entities, including emerging growth companies, ASU 2016-01 is effective for annual periods beginning after December 15, 2018, and interim periods within annual periods beginning after December 15, 2019. The Company evaluated the impact on the financial statements and implemented the provisions of ASU 2016-01 for the annual financial statements for the year ended June 30, 2020. This new standard did not have a material impact on our financial statements or related disclosures. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) and subsequently amended the guidance relating largely to transition considerations under the standard in January 2017, to increase transparency and comparability among organizations by requiring the recognition of right-of-use (“ROU”) assets and lease liabilities on the balance sheet. Most prominent among the changes in the standard is the recognition of ROU assets and lease liabilities by lessees for those leases classified as operating leases under current U.S. GAAP. Under the standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. We will be required to recognize and measure leases existing at, or entered into after, the beginning of the earliest comparative period presented using a modified retrospective approach, with certain practical expedients available. The standard became effective for us beginning July 1, 2019. We have reviewed this and have determined that there is no material impact on our financial statements. In July 2017, the FASB issued ASU No. 2017-11, Earnings Per Share, Distinguishing Liabilities from Equity and Derivatives and Hedging, which changes the accounting and earnings per share for certain instruments with down round features. The amendments in this ASU should be applied using a cumulative-effect adjustment as of the beginning of the fiscal year or retrospective adjustment to each period presented and is effective for annual periods beginning after December 15, 2018, and interim periods within those periods. We adopted this guidance effective July 1, 2019. The adoption of this guidance did not materially impact our financial statements and related disclosures. In February 2018, the Financial Accounting Standards Board (“FASB”) issued ASC Update No 2018-02 (Topic 220) Income Statement – Reporting Comprehensive Income: Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. This ASC update allows for a reclassification into retained earnings of the stranded tax effects in accumulated other comprehensive income resulting from the enactment of the Tax Cuts and Jobs Act. The updated guidance is effective for interim and annual periods beginning after December 15, 2018. We adopted this guidance effective July 1, 2019. The adoption of this guidance did not materially impact our financial statements and related disclosures. In June 2018, the FASB issued ASU 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, to expand the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees and supersedes the guidance in Subtopic 505-50, Equity - Equity-Based Payments to Non-Employees. Under ASU 2018-07, equity-classified nonemployee share-based payment awards are measured at the grant date fair value on the grant date The probability of satisfying performance conditions must be considered for equity-classified nonemployee share-based payment awards with such conditions. ASU 2018-07 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. We adopted this guidance effective July 1, 2019. The adoption of this guidance did not materially impact our financial statements and related disclosures. In July 2018, the FASB issued ASU 2018-09 to provide clarification and correction of errors to the Codification. The amendments in this update cover multiple Accounting Standards Updates. Some topics in the update may require transition guidance with effective dates for annual periods beginning after December 15, 2018. We adopted this guidance effective July 1, 2019. The adoption of this guidance did not materially impact our financial statements and related disclosures. In August 2020, the FASB issued ASU 2020-06 to simplify the current guidance for convertible instruments and the derivatives scope exception for contracts in an entity’s own equity. Additionally, the amendments affect the diluted EPS calculation for instruments that may be settled in cash or shares and for convertible instruments. The update also provides for expanded disclosure requirements to increase transparency. For SEC filers, excluding smaller reporting companies, this update is effective for fiscal years beginning after December 15, 2021 including interim periods within those fiscal years. For all other entities, this update is effective for fiscal years beginning after December 15, 2023, including interim periods therein. The Company believes the adoption of this guidance will not materially impact its financial statements and related disclosures. The Company will continue to monitor these and other emerging issues to assess any potential future impact on its financial statements. |
Going Concern
Going Concern | 6 Months Ended |
Dec. 31, 2021 | |
Going Concern [Abstract] | |
Going Concern | 3. Going Concern The Company’s financial statements are prepared using generally accepted accounting principles, which contemplate the realization of assets and liquidation of liabilities in the normal course of business. Because the business remains unproven and may not ever attain profitability, no certainty of continuation can be stated. The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. For the six months ended December 31, 2021, the Company had a net loss of $1,614,594, negative cash flow from operations of $1,440,431 and accumulated deficit of $27,170,122. The Company believes it has sufficient cash on hand to operate into the second half of calendar 2022 at which time it will require additional funds for operating and growth capital. Although internal projections include several realistic scenarios in which the Company could attain profitability in calendar 2022, we must account for the likelihood that our cash on hand will not be adequate to satisfy our long-term working capital needs. We believe that our current capitalization structure, combined with anticipated increases in distribution, revenues, and market capitalization, will enable us to successfully secure required financing to continue our growth. Because the business has limited operating history and sales, no certainty of continuation can be stated. Management has devoted a significant amount of time in the raising of capital from additional debt and equity financing. However, the Company’s ability to continue as a going concern will again be dependent upon raising additional funds through debt and equity financing and generating revenue. There are no assurances the Company will receive the necessary funding or generate revenue necessary to fund operations long-term. The Company cannot give any assurance that it will, in the future, be able to achieve a level of profitability from the sale of its products to sustain its operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern for one year from the date the financials are issued. The accompanying financial statements do not include any adjustments to reflect the possible future effects on recoverability and reclassification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty. There is still potential uncertainty resulting from the outbreak of the novel coronavirus (COVID-19) (the “Pandemic”), including those potentially related to measures to reduce its spread, and the impact on the economy. Rates of unemployment, recession, inflation, and other possible unforeseen factors could also have an impact. From both public statements, and conversations between Nightfood management and current and former executives from certain global food and beverage conglomerates, management believes that there is increased strategic interest in the nighttime nutrition space as a potential high-growth opportunity, partially due to ongoing declines in consumer sleep quality and increases in at-home nighttime snacking, both trends believed to be accelerated by COVID. The Company has experienced no material issues with supply chain or logistics. Order processing function has been consistent with historical norms, and the Company’s major suppliers and manufacturers have represented that their operations are continuing in the ordinary course. It is possible that the fallout from the Pandemic could make it more difficult in the future for the Company to access required growth capital, possibly rendering the Company unable to meet certain debts and expenses. More directly, the Pandemic has impaired the Company’s ability to execute certain in-store and out-of-store marketing initiatives within the normal course of supermarket business. For example, since the inception of the Pandemic, the Company was unable to conduct in-store demonstrations and unable to participate in local pregnancy, baby expos, and health expos that were originally intended to be part of our marketing mix. Furthermore, we have experienced some Pandemic-related delays to our national hotel rollout. Additionally, with more consumers shopping online, both for delivery or at-store pickup, the opportunity for shoppers to learn about new brands at the supermarket shelf has been somewhat diminished. Management is working to identify opportunities to build awareness and drive supermarket trial and growth under these new circumstances, while simultaneously executing a strategic pivot to focus on hotel distribution for immediate growth. It is impossible to know what the future holds with regard to the Pandemic, both for the Company and in the broader sense. There are many uncertainties regarding the Pandemic, and the Company is closely monitoring the impact of the Pandemic on all aspects of its business, including how it will impact its customers, vendors, and business partners. It is impossible to know what the future holds with regard to the Pandemic, both for the Company and in the broader sense. Emergence of recent variants such as Delta and Omicron have shown us that there remain many uncertainties regarding the Pandemic, and the Company is closely monitoring the impact of the Pandemic on all aspects of its business, including how it will impact its customers, vendors, and business partners. It is difficult to know if the Pandemic has materially impacted the results of operations of the Company, and it is unable to predict the impact that the Pandemic will have on its financial position and operating results due to numerous uncertainties. The Company expects to continue to assess the evolving impact of the Pandemic and intends to make adjustments accordingly, if necessary. |
Accounts receivable
Accounts receivable | 6 Months Ended |
Dec. 31, 2021 | |
Receivables [Abstract] | |
Accounts receivable | 4. Accounts receivable The Company’s accounts receivable arise primarily from the sale of the Company’s snack products. On a periodic basis, the Company evaluates each customer account and based on the days outstanding of the receivable, history of past write-offs, collections, and current credit conditions, writes off accounts it considers uncollectible. With most of our retail and distribution partners, invoices will typically be due in 30 days. The Company does not accrue interest on past due accounts and the Company does not require collateral. Accounts become past due on an account-by-account basis. Determination that an account is uncollectible is made after all reasonable collection efforts have been exhausted. The Company has not provided any accounts receivable allowances for December 31, 2021 and June 30, 2021, respectively. |
Inventories
Inventories | 6 Months Ended |
Dec. 31, 2021 | |
Inventory Disclosure [Abstract] | |
Inventories | 5. Inventories Inventory consists of the following at December 31, 2021 and June 30, 2021, December 31, June 30, Finished goods – ice cream $ 345,792 $ 338,369 Raw material – ingredients 42,792 14,760 Packaging 61,149 59,010 Allowance for unsaleable (24,403 ) (24,403 ) TOTAL $ 425,331 $ 387,736 Inventories are stated at the lower of cost or net realizable value. The Company periodically reviews the value of items in inventory and provides write-downs or write-offs of inventory based on its assessment of market conditions and the products relative shelf life. Write-downs and write-offs are charged to loss on inventory write down. |
Other current assets
Other current assets | 6 Months Ended |
Dec. 31, 2021 | |
Assets, Current [Abstract] | |
Other current assets | 6. Other current assets Other current assets consist of the following vendor deposits at December 31, 2021 and June 30, 2021. The majority of this amount relates to deposits to third party vendors for inventory and services. December 31, June 30, Vendor deposits – Other $ 119,093 $ 33,480 TOTAL $ 119,093 $ 33,480 |
Other Current Liabilities
Other Current Liabilities | 6 Months Ended |
Dec. 31, 2021 | |
Disclosure Text Block Supplement [Abstract] | |
Other Current Liabilities | 7. Other Current Liabilities ● Other current liabilities consist of the following at December 31, 2021 and June 30, 2021, December 31, June 30, Accrued consulting fees – related party $ - 3,000 TOTAL $ - 3,000 |
Convertible Notes Payable
Convertible Notes Payable | 6 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Convertible Notes Payable | 8. Convertible Notes Payable ● Convertible Notes Payable consist of the following at December 31, 2021, On April 30, 2018, the Company entered into a convertible promissory note and a security purchase agreement dated April 30, 2018, in the amount of $225,000. The lender was Eagle Equities, LLC. The notes have a maturity of April 30, 2019 and interest rate of 8% per annum and are convertible at a price of 60% of the lowest closing bid price on the primary trading market on which the Company’s Common Stock is then listed for the fifteen (15) trading days immediately prior to conversion. The note may be prepaid, but carries a penalty in association with the remittance amount, as there is an accretion component to satisfy the note with cash. The convertible note qualifies for derivative accounting and bifurcation under ASC 815, “Derivatives and Hedging.” The fair value of the $225,000 Notes was calculated using the Black-Scholes pricing model at $287,174, with the following assumptions: risk-free interest rate of 2.24%, expected life of 1 year, volatility of 202%, and expected dividend yield of zero. Because the fair value of the note exceeded the net proceeds from the $225k Notes, a charge was recorded to “Financing cost” for the excess of the fair value of the note, for a net charge of $62,174. This note has been successfully retired via conversions into shares as of June 30, 2021. On February 14, 2019, the Company entered into a convertible promissory note and a security purchase agreement dated February 14, 2019, in the amount of $104,000. The lender was Eagle Equities, LLC. The notes have a maturity of February 14, 2020 and interest rate of 8% per annum and are convertible at a price of 70% of the lowest trading price on the primary trading market on which the Company’s Common Stock is then listed for the fifteen (15) trading days immediately prior to conversion. The note may be prepaid, but carries a penalty in association with the remittance amount, as there is an accretion component to satisfy the note with cash. The convertible note qualifies for derivative accounting and bifurcation under ASC 815, “Derivatives and Hedging.” The fair value of the $104,000 Notes was calculated using the Black-Scholes pricing model at $90,567, with the following assumptions: risk-free interest rate of 2.53%, expected life of 1 year, volatility of 136%, and expected dividend yield of zero. Because the fair value of the note did not exceed the net proceeds from the $104k Notes, no charge was recorded to “Financing cost” for the excess of the fair value of the note. As of September 30, 2020, and June 30, 2020, the debt discount was $0 and $0, respectively. $50,000 of the note has been successfully retired via conversion into shares during the year ended June 30, 2020 and $54,000 of the note has been successfully retired via conversion into shares during the three months ended September 30, 2020.The Company fair valued the notes as of conversion date and accounted for a loss on conversion of $4,098 included under line item “Loss on debt extinguishment upon note conversion, net” during 2020 fiscal year and accounted for a loss on conversion of $36,242. On April 29, 2019, the Company entered into a convertible promissory note and a security purchase agreement dated April 29, 2019, in the amount of $208,000. The lender was Eagle Equities, LLC. The notes have a maturity of April 29, 2020 and interest rate of 8% per annum and are convertible at a price of 70% of the lowest trading price on the primary trading market on which the Company’s Common Stock is then listed for the fifteen (15) trading days immediately prior to conversion. The note may be prepaid, but carries a penalty in association with the remittance amount, as there is an accretion component to satisfy the note with cash. The convertible note qualifies for derivative accounting and bifurcation under ASC 815, “Derivatives and Hedging.” The fair value of the $208,000 Notes was calculated using the Black-Scholes pricing model at $170,098, with the following assumptions: risk-free interest rate of 2.42%, expected life of 1 year, volatility of 118%, and expected dividend yield of zero. Because the fair value of the note did not exceed the net proceeds from the $208k Notes, no charge was recorded to “Financing cost” for the excess of the fair value of the note. As of September 30, 2020, and June 30, 2020, the debt discount was $0 and $0, respectively. $208,000 of the note has been successfully retired via conversion into shares during the three months ended September 30, 2020. The Company fair valued the notes as of conversion date and accounted for a loss on conversion of $109,561 included under line item “Loss on debt extinguishment upon note conversion, net”. On June 11, 2019, the Company entered into a convertible promissory note and a security purchase agreement dated June 11, 2019, in the amount of $300,000. The lender was Eagle Equities, LLC. The notes have a maturity of June 11, 2020 and interest rate of 8% per annum and are convertible at a price of 70% of the lowest trading price on the primary trading market on which the Company’s Common Stock is then listed for the fifteen (15) trading days immediately prior to conversion. The note may be prepaid, but carries a penalty in association with the remittance amount, as there is an accretion component to satisfy the note with cash. The convertible note qualifies for derivative accounting and bifurcation under ASC 815, “Derivatives and Hedging.” The fair value of the $300,000 Notes was calculated using the Black-Scholes pricing model at $240,217, with the following assumptions: risk-free interest rate of 2.05%, expected life of 1 year, volatility of 16%, and expected dividend yield of zero. Because the fair value of the note did not exceed the net proceeds from the $300,000 Notes, no charge was recorded to “Financing cost” for the excess of the fair value of the note. As of September 30, 2020 and June 30, 2020, the debt discount was $0 and $46,726, respectively. The Company fair valued the notes as of conversion date and accounted for a loss on conversion of $42,595 included under line item “Loss on debt extinguishment upon note conversion, net”. On July 5, 2019, the Company entered into a convertible promissory note and a security purchase agreement dated July 5, 2019, in the amount of $300,000. The lender was Eagle Equities, LLC. The notes have a maturity of July 5, 2020 and interest rate of 8% per annum and are convertible at a price of 70% of the lowest trading price on the primary trading market on which the Company’s Common Stock is then listed for the fifteen (15) trading days immediately prior to conversion. The note may be prepaid, but carries a penalty in association with the remittance amount, as there is an accretion component to satisfy the note with cash. The convertible note qualifies for derivative accounting and bifurcation under ASC 815, “Derivatives and Hedging.” The fair value of the $300,000 Notes was calculated using the Black-Scholes pricing model at $239,759, with the following assumptions: risk-free interest rate of 1.98%, expected life of 1 year, volatility of 118%, and expected dividend yield of zero. Because the fair value of the note did not exceed the net proceeds from the 300k Notes, no charge was recorded to “Financing cost” for the excess of the fair value of the note. As of June 30, 2021 and June 30, 2020, the debt discount was $0 and $2,627, respectively. This note has been successfully retired via conversions into shares as of June 30, 2021. On August 8, 2019, the Company entered into a convertible promissory note and a security purchase agreement dated August 8, 2019, in the amount of $300,000. The lender was Eagle Equities, LLC. The notes have a maturity of August 8, 2020 and interest rate of 8% per annum and are convertible at a price of 70% of the lowest trading price on the primary trading market on which the Company’s Common Stock is then listed for the fifteen (15) trading days immediately prior to conversion. The note may be prepaid, but carries a penalty in association with the remittance amount, as there is an accretion component to satisfy the note with cash. The convertible note qualifies for derivative accounting and bifurcation under ASC 815, “Derivatives and Hedging.” The fair value of the $300,000 Notes was calculated using the Black-Scholes pricing model at $254,082, with the following assumptions: risk-free interest rate of 1.79%, expected life of 1 year, volatility of 113%, and expected dividend yield of zero. Because the fair value of the note did not exceed the net proceeds from the $300k Notes, no charge was recorded to “Financing cost” for the excess of the fair value of the note. As of June 30, 2021, and June 30, 2020 the debt discount was $0 and $26,452, respectively. This note has been successfully retired via conversions into shares as of June 30, 2021. On August 29, 2019, the Company entered into a convertible promissory note and a security purchase agreement dated August 29, 2019, in the amount of $300,000. The lender was Eagle Equities, LLC. The notes have a maturity of August 29, 2020 and interest rate of 8% per annum and are convertible at a price of 70% of the lowest trading price on the primary trading market on which the Company’s Common Stock is then listed for the fifteen (15) trading days immediately prior to conversion. The note may be prepaid, but carries a penalty in association with the remittance amount, as there is an accretion component to satisfy the note with cash. The convertible note qualifies for derivative accounting and bifurcation under ASC 815, “Derivatives and Hedging.” The fair value of the $300,000 Notes was calculated using the Black-Scholes pricing model at $234,052, with the following assumptions: risk-free interest rate of 1.75%, expected life of 1 year, volatility of 113%, and expected dividend yield of zero. Because the fair value of the note did not exceed the net proceeds from the $300,000 Notes, no charge was recorded to “Financing cost” for the excess of the fair value of the note. As of June 30, 2021, and June 30, 2020 the debt discount was $0 and $37,833, respectively. This note has been successfully retired via conversions into shares as of June 30, 2021. On September 24, 2019, the Company entered into a convertible promissory note and a security purchase agreement dated September 24, 2019, in the amount of $150,000. The lender was Eagle Equities, LLC. The notes have a maturity of September 24, 2020 and interest rate of 8% per annum and are convertible at a price of 70% of the lowest trading price on the primary trading market on which the Company’s Common Stock is then listed for the fifteen (15) trading days immediately prior to conversion. The note may be prepaid, but carries a penalty in association with the remittance amount, as there is an accretion component to satisfy the note with cash. The convertible note qualifies for derivative accounting and bifurcation under ASC 815, “Derivatives and Hedging.” The fair value of the $150,000 Notes was calculated using the Black-Scholes pricing model at $118,009, with the following assumptions: risk-free interest rate of 1.78%, expected life of 1 year, volatility of 113%, and expected dividend yield of zero. Because the fair value of the note did not exceed the net proceeds from the $150k Notes, no charge was recorded to “Financing cost” for the excess of the fair value of the note. As of June 30, 2021 and June 30, 2020, the debt discount was $0 and $27,482, respectively. This note has been successfully retired via conversions into shares as of June 30, 2021. On November 7, 2019, the Company entered into a convertible promissory note and a security purchase agreement dated November 7, 2019, in the amount of $150,000. The lender was Eagle Equities, LLC. The notes have a maturity of November 7, 2020 and interest rate of 8% per annum and are convertible at a price of 70% of the lowest trading price on the primary trading market on which the Company’s Common Stock is then listed for the fifteen (15) trading days immediately prior to conversion. The note may be prepaid, but carries a penalty in association with the remittance amount, as there is an accretion component to satisfy the note with cash. The convertible note qualifies for derivative accounting and bifurcation under ASC 815, “Derivatives and Hedging.” The fair value of the $150,000 Notes was calculated using the Black-Scholes pricing model at $121,875, with the following assumptions: risk-free interest rate of 1.58%, expected life of 1 year, volatility of 122%, and expected dividend yield of zero. Because the fair value of the note did not exceed the net proceeds from the $150k Notes, no charge was recorded to “Financing cost” for the excess of the fair value of the note. As of June 30, 2021 and June 30, 2020, the debt discount was $0 and $43,074, respectively. This note has been successfully retired via conversions into shares as of June 30, 2021. On December 31, 2019, the Company entered into a convertible promissory note and a security purchase agreement dated December 31, 2019, in the amount of $150,000. The lender was Eagle Equities, LLC. The notes have a maturity of December 31, 2020 and interest rate of 8% per annum and are convertible at a price of 70% of the lowest trading price on the primary trading market on which the Company’s Common Stock is then listed for the fifteen (15) trading days immediately prior to conversion. The note may be prepaid, but carries a penalty in association with the remittance amount, as there is an accretion component to satisfy the note with cash. The convertible note qualifies for derivative accounting and bifurcation under ASC 815, “Derivatives and Hedging.” The fair value of the $150,000 Notes was calculated using the Black-Scholes pricing model at $189,172, with the following assumptions: risk-free interest rate of 1.59%, expected life of 1 year, volatility of 115%, and expected dividend yield of zero. Because the fair value of the note exceed the net proceeds from the $150k Notes, $39,172 was recorded to “Financing cost” for the excess of the fair value of the note. As of June 30, 2021 and June 30, 2020, the debt discount was $0 and $75,205, respectively. This note has been successfully retired via conversions into shares as of June 30, 2021. On February 6, 2020, the Company entered into a convertible promissory note and a security purchase agreement dated February 6, 2020, in the amount of $200,000. The lender was Eagle Equities, LLC. The notes have a maturity of February 6, 2021 and interest rate of 8% per annum and are convertible at a price of 70% of the lowest trading price on the primary trading market on which the Company’s Common Stock is then listed for the fifteen (15) trading days immediately prior to conversion. The note may be prepaid, but carries a penalty in association with the remittance amount, as there is an accretion component to satisfy the note with cash. The convertible note qualifies for derivative accounting and bifurcation under ASC 815, “Derivatives and Hedging.” The fair value of the $200,000 Notes was calculated using the Black-Scholes pricing model at $156,061, with the following assumptions: risk-free interest rate of 1.51%, expected life of 1 year, volatility of 113%, and expected dividend yield of zero. As of September 30, 2020 and June 30, 2020, the debt discount was $54,728 and $94,064, respectively. On February 26, 2020, the Company entered into a convertible promissory note and a security purchase agreement dated February 26, 2020, in the amount of $187,000. The lender was Eagle Equities, LLC. The notes have a maturity of February 6, 2021 and interest rate of 8% per annum and are convertible at a price of 70% of the lowest trading price on the primary trading market on which the Company’s Common Stock is then listed for the fifteen (15) trading days immediately prior to conversion. The note may be prepaid, but carries a penalty in association with the remittance amount, as there is an accretion component to satisfy the note with cash. The convertible note qualifies for derivative accounting and bifurcation under ASC “Derivatives and Hedging.” The fair value of the $200,000 Notes was calculated using the Black-Scholes pricing model at $156,061, with the following assumptions: risk-free interest rate of 1.51%, expected life of 1 year, volatility of 113%, and expected dividend yield of zero. As of June 30, 2021 and June 30, 2020, the debt discount was $0 and $94,064, respectively. . This note has been successfully retired via conversions into shares as of June 30, 2021. On April 30, 2020, the Company entered into a convertible promissory note and a security purchase agreement dated April 30, 2020, in the amount of $205,700. This note carried an Original Discount of 10% or $18,700 which was included in interest expense at the time of valuation. The lender was Eagle Equities, LLC. The notes have a maturity of April 30, 2021 and interest rate of 8% per annum and are convertible at a price of 78% of the lowest closing bid price on the primary trading market on which the Company’s Common Stock is then listed for the twenty (20) trading days immediately prior to conversion. The note may be prepaid, but carries a penalty in association with the remittance amount, as there is an accretion component to satisfy the note with cash. The convertible note qualifies for derivative accounting and bifurcation under ASC 815, “Derivatives and Hedging.” The fair value of the $205,700 Notes was calculated using the Black-Scholes pricing model at $128,369, with the following assumptions: risk-free interest rate of 0.16%, expected life of 1 year, volatility of 106%, and expected dividend yield of zero. This note was settled as part of a debt settlement with Eagle Equities, LLC in conjunction with the Nightfood Holdings, Inc. financing/refinancing in April 2021. On June 23, 2020, the Company entered into a convertible promissory note and a security purchase agreement dated June 23, 2020, in the amount of $205,700. This note carried an Original Discount of 10% or $18,700 which was included in interest expense at the time of valuation. The lender was Eagle Equities, LLC. The notes have a maturity of June 23, 2021 and interest rate of 8% per annum and are convertible at a price of 78% of the lowest closing bid price on the primary trading market on which the Company’s Common Stock is then listed for the twenty (20) trading days immediately prior to conversion. The note may be prepaid, but carries a penalty in association with the remittance amount, as there is an accretion component to satisfy the note with cash. The convertible note qualifies for derivative accounting and bifurcation under ASC 815, “Derivatives and Hedging.” The fair value of the $205,700 Notes was calculated using the Black-Scholes pricing model at $132,236, with the following assumptions: risk-free interest rate of 0.18%, expected life of 1 year, volatility of 108%, and expected dividend yield of zero. The Company accounted for a loss on refinancing of $25,722 for unamortized of discount included under line item “Loss on debt extinguishment upon note conversion, net”. This note was settled as part of a debt settlement with Eagle Equities, LLC in conjunction with the Nightfood Holdings, Inc. financing/refinancing in April 2021. On August 12, 2020, the Company entered into a convertible promissory note and a security purchase agreement dated August 12, 2020, in the amount of $205,700. This note carried an Original Discount of 10% or $18,700 which was included in interest expense at the time of valuation. The lender was Eagle Equities, LLC. The notes have a maturity of August 12, 2021 and interest rate of 8% per annum and are convertible at a price of 78% of the lowest closing bid price on the primary trading market on which the Company’s Common Stock is then listed for the twenty (20) trading days immediately prior to conversion. The note may be prepaid, but carries a penalty in association with the remittance amount, as there is an accretion component to satisfy the note with cash. The convertible note qualifies for derivative accounting and bifurcation under ASC 815, “Derivatives and Hedging.” The fair value of the $205,700 Notes was calculated using the Black-Scholes pricing model at $126,029, with the following assumptions: risk-free interest rate of 0.13%, expected life of 1 year, volatility of 101%, and expected dividend yield of zero. This note was settled as part of a debt settlement with Eagle Equities, LLC in conjunction with the Nightfood Holdings, Inc. financing/refinancing in April 2021. On December 10, 2021, the Company entered into a definitive securities purchase agreement (the “Securities Purchase Agreement or Transaction”) with certain accredited and institutional investors (the “Purchasers”) for the purchase and sale of an aggregate of: (i)$1,086,956.52 in principal amount of Original Issue Discount Senior Secured Convertible Notes (the “Notes”) for $1,000,000 (representing a 8% original issue discount) (“Purchase Price”) and (ii) warrants to purchase up to 4,000,000 shares of the Company’s common stock (the “Warrants”) in a private placement (the “Offering”). Each note featured an 8% original issue discount, resulting in net proceeds to the Company of $500,000 for each of the two notes. The Notes have a maturity of December 10, 2022, an interest rate of 8% per annum, and are convertible at a fixed price of $.25 per share of Company common stock, with provisions for conversions at a fixed price of $.20 per share of Company common stock should the closing trading price of our common stock be below $.20 per share after June 10, 2022, subject to adjustment in the event of (i) stock splits and dividends, (ii) subsequent rights offerings, (iii) pro-rata distributions, and (iv) certain fundamental transactions, including but not limited to the sale of the Company, business combinations, and reorganizations. The Debentures do not have any price protection or price reset provisions with respect to future issuances of securities. These notes are secured by Company assets as well as by a personal stock pledge from CEO Sean Folkson. The Notes have provisions allowing for repayment at any time at 115% of the outstanding principal and interest within the first three months, and 120% of the outstanding principal and interest at any time thereafter. The Warrants are initially exercisable at 0.25 per share and, are subject to cashless exercise after six months if the shares underlying the Warrants are not subject to an effective resale registration statement. The Warrants are also subject to adjustment in the event of (i) stock splits and dividends, (ii) subsequent rights offerings, (iii) pro-rata distributions, and (iv) certain fundamental transactions, including but not limited to the sale of the Company, business combinations, and reorganizations. The Warrants do not have any price protection or price reset provisions with respect to future issuances of securities. In connection with Securities Purchase Agreement, the Company will issue to the Placement Agent (as defined below), an aggregate of 878,260 Common Stock purchase warrants (“PA Warrants”). The PA Warrants are substantially similar to the Warrants. The fair value of the PA Warrants at issuance was estimated to be $170,210 based on a risk-free interest rate of 1.25%, an expected term of 5 years, an expected volatility of 142.53% and a 0% dividend yield. Spencer Clarke Holdings LLC (“Placement Agent”) acted as the placement agent, in connection with the sale of the securities pursuant to the Securities Purchase Agreement. Pursuant to an engagement agreement entered into by and between the Company and the Placement Agent, the Company agreed to pay the Placement Agent a cash commission of $100,000. Pursuant to the discussion above, the Company also issued an aggregate of 878,260 PA Warrants to the Placement Agent. The gross proceeds received from the Offering were approximately $1,000,000. The cash Placement Agent fees of $100,000 was paid in separately. Also, the Company reimbursed the lead Purchaser $15,192 for legal fees, which was deducted from the required subscription amount to be paid. The Company evaluated all of the associated financial instruments in accordance with ASC 815 Derivatives and Hedging. Based on this evaluation, the Company has determined that no provisions required derivative accounting. In accordance with ASC 470- Debt, the Company first allocated the cash proceeds to the loan and the warrants on a relative fair value basis, secondly, the proceeds were allocated to the beneficial conversion feature. ● Below is a reconciliation of the convertible notes payable as presented on the Company’s balance sheet as of December 31, 2021: Principal $ Debt Discount $ Net Value $ Balance at June 30, 2020 $ 2,935,400 $ (605,211 ) $ 2,330,189 Convertible notes payable issued during FISCAL YEAR ENDED June 30, 2021 822,800 822,800 Notes converted into shares of common stock (1,433,000 ) (1,433,000 ) Debt discount associated with new convertible notes (512,993 ) (512,993 ) Amortization of debt discount 814,769 814,769 True-up adjustment in debt discount and derivative liability (37,360 ) (37,360 ) Notes retired due to refinancing (2,325,200 ) 340,795 (1,984,405 ) Balance at June 30, 2021 - - - Convertible notes payable issued during six months ended December 31, 2021 1,086,957 1,086,957 Debt discount associated with new convertible notes 1,018,229 1,018,229 Amortization of debt discount (12,218 ) (12,218 ) Balance at December 31, 2021 $ 1,086,957 $ 1,006,011 $ 80,946 Amortization related to debt discount expense for the six months ended December 31, 2021 and 2020, totaled $12,218 and $576,787, respectively and amortization expense for the three months ended December 31, 2021 and 2020, totaled $12,218 and $254,048 respectively. As of December 31, 2021 and June 30, 2021, the unamortized portion of debt discount was $1,006,011 and $0, respectively. Interest expense for the six months ended December 31, 2021 and 2020, totaled $4,909 and $195,530, respectively, and interest expense for the three months ended December 31, 2021 and 2020, totaled $4,909 and $111,575, respectively. As of December 31, 2021 and June 30, 2021, the accrued interest related to convertible notes was $4,909 and $0, respectively. |
Derivative Liability
Derivative Liability | 6 Months Ended |
Dec. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Liability | 9. Derivative Liability Due to the variable conversion price associated with some of these convertible promissory notes disclosed in Note 8 above, the Company has determined that the conversion feature is considered a derivative liability for instruments which are convertible and have not yet been settled. The accounting treatment of derivative financial instruments requires that the Company record the fair value of the derivatives on the date they are deemed to be derivative liabilities. Below is a reconciliation of the derivative liability as presented on the Company’s balance sheet as of June 30, 2021 and December 31, 2021: Derivative liability as of June 30, 2020 $ 1,590,638 Initial derivative liability accounted for convertible notes payable issued during the period ended June 30, 2021 512,993 True-up adjustment in debt discount and derivative liability 37,360 Change in derivative liability during the period (853,329 ) Notes retired due to refinancing (1,287,662 ) Derivative liability as of June 30, 2021 $ - Change - Balance at December 31, 2021 $ - Change in derivative liability for the six months ended December 31, 2021 and 2020, totaled $0 and $264,818, respectively and change in derivative liability for the three months ended December 31, 2021 and 2020, totaled $0 and $57,294, respectively. As of December 31, 2021, and June 30, 2021, the derivative liability related to convertible notes was $0 and $0, respectively. |
Capital Stock Activity
Capital Stock Activity | 6 Months Ended |
Dec. 31, 2021 | |
Stockholders' Equity Note [Abstract] | |
Capital Stock Activity | 10. Capital Stock Activity On October 16, 2013, the Nightfood, Inc. became a wholly-owned subsidiary of Nightfood Holdings, Inc. Accordingly, the stockholders’ equity has been revised to reflect the share exchange on a retroactive basis. Common Stock The Company is authorized to issue Two Hundred Million (200,000,000) shares of $0.001 par value per share Common Stock. Holders of Common Stock are each entitled to cast one vote for each Share held of record on all matters presented to shareholders. Cumulative voting is not allowed; hence, the holders of a majority of the outstanding Common Stock can elect all directors. Holders of Common Stock are entitled to receive such dividends as may be declared by the Board of Directors out of funds legally available therefore and, in the event of liquidation, to share pro-rata in any distribution of the Company’s assets after payment of liabilities. The Board of Directors is not obligated to declare a dividend and it is not anticipated that dividends will be paid unless and until the Company is profitable. Holders of Common Stock do not have pre-emptive rights to subscribe to additional shares if issued by the Company. There are no conversion, redemption, sinking fund or similar provisions regarding the Common Stock. All of the outstanding Shares of Common Stock are fully paid and non-assessable and all of the Shares of Common Stock offered thereby will be, upon issuance, fully paid and non-assessable. Holders of Shares of Common Stock will have full rights to vote on all matters brought before shareholders for their approval, subject to preferential rights of holders of any series of Preferred Stock. Holders of the Common Stock will be entitled to receive dividends, if and as declared by the Board of Directors, out of funds legally available, and share pro-rata in any distributions to holders of Common Stock upon liquidation. The holders of Common Stock will have no conversion, pre-emptive or other subscription rights. Upon any liquidation, dissolution or winding-up of the Company, assets, after the payment of debts and liabilities and any liquidation preferences of, and unpaid dividends on, any class of preferred stock then outstanding, will be distributed pro-rata to the holders of the common stock. The holders of the common stock have no right to require the Company to redeem or purchase their shares. Holders of shares of common stock do not have cumulative voting rights, which means that the holders of more than 50% of the outstanding shares, voting for the election of directors, can elect all of the directors to be elected, if they so choose, and, in that event, the holders of the remaining shares will not be able to elect any of our directors. ● The Company had 87,060,178 and 80,707,467 shares of its $0.001 par value common stock issued and outstanding as of December 31, 2021, and June 30, 2021, respectively. ● During the three months ended December 31, 2021 and 2020, the Company issued 50,500 shares and 583,914 shares of common stock for services valued at $15,768 and $88,673, respectively. ● During the three months ended December 31, 2021, the Company reversed an entry relating to 41,308 shares that had previously been allocated for services but remained unissued. In 2020, there were no such related transactions. ● During the three months ended December 31, 2020 the Company issued 2,881,220 shares in regards to debt being converted into stock valued at $215,000, and issued 336,132 shares of common stock valued at $25,008 as part of a loan agreement and payment of interest as part of the debt conversion. In 2021, there were no such related transactions. ● During the three months ended September 30, 2021, the Company issued an aggregate of 518,519 shares of its $0.001 par value common stock for services valued at $140,000. During the three months ended September 30, 2020, the Company issued an aggregate of 0 shares of its $.001 par value common stock for services valued at $0. ● During the three months ended September 30, 2021, holders of the Company’s Series B Preferred Stock converted 773 shares of Series B Preferred Stock into 3,865,000 shares of its common stock ● During the three months ended September 30, 2020 the Company issued 2,975,979 shares in regards to debt being converted into stock valued at $347,000, and issued 312,938 shares of common stock valued at $36,478 as part of a loan agreement and payment of interest as part of the debt conversion. Preferred Stock Series A Stock On July 9 2018, the Company was authorized to issue 1,000,000 shares of $0.001 par value per share Preferred Stock. Of the 1,000,000 shares. 10,000 shares were designated as Series A Preferred Stock (“Series A Stock”). Holders of Series A Stock are each entitled to cast 100,000 votes for each Share held of record on all matters presented to shareholders. In addition to his ownership of the common stock, Mr. Folkson owns 1,000 shares of the Series A Stock which votes with the common stock and has an aggregate of 100,000,000 votes. The Company had 1,000 and 1,000 shares of its $0.001 par value preferred Series A stock issued and outstanding as of December 31, 2021, and June 30, 2021, respectively. Series B Stock In April 2021, the Company designated 5,000 shares of its Preferred Stock as Series B Preferred Stock (“B Stock”), each Series B share of which is convertible into 5,000 shares of common stock and 5,000 non-detachable warrants with a strike price of $.30 The Company had 3,835 and 4,665 shares of its $0.001 par value Series B Preferred Stock issued and outstanding as of December 31, 2021, and June 30, 2021 respectively. During the three months ended December 31, 2021, holders of the Company’s Series B Preferred Stock converted 392 shares of Series B Preferred Stock into 1,960,000 shares of its common stock. In 2020, there were no such related transaction. During the three months ended December 31, 2021 and 2020, no shares of B Stock were issued to investors. During the three months ended September 30, 2021, holders of the Company’s Series B Preferred Stock converted 773 shares of Series B Preferred Stock into 3,865,000 shares of its common stock. In 2020, there were no such related transaction. During the three months ended September 30, 2021, the Company sold 335 shares of its $0.001 par value Series B Preferred Stock for gross cash proceeds of $335,000. These proceeds were used for operating capital. The Series B stock meets the criteria for equity classification and is accounted for as equity transactions. Specifically, among other factors, this qualifies as equity because redemption is not invoked at the option of the holder and the Series B stock does not have to be redeemed on a specified date. In 2020, there were no such related transaction. Dividends The Company has never declared dividends, however as set out below, during the six months ended December 31, 2021, upon issuance of a total of 335 shares of Series B Preferred stock the Company recorded a deemed dividend as a result of beneficial conversion feature associated with the transaction. There were no sales of Series B Preferred stock in the three months ended December 31, 2021. In connection with certain conversion terms provided for in the designation of the Series B Preferred Stock, pursuant to which each share of Series B Preferred Stock is convertible into 5,000 shares of common stock and 5,000 warrants, the Company recognized a beneficial conversion feature upon the conclusion of the transaction in the amount of $4,375,860. The beneficial conversion feature was treated as a deemed dividend, and fully amortized on the transaction date due to the fact that the issuance of the Series B preferred stock was classified as equity. |
Warrants
Warrants | 6 Months Ended |
Dec. 31, 2021 | |
Warrants [Abstract] | |
Warrants | 11. Warrants The following is a summary of the Company’s outstanding common stock purchase warrants. During the three months ended September 30, 2021, holders of the Company’s Series B Preferred Stock converted 773 shares of Series B Preferred Stock into 3,865,000 shares of its common stock, along with 3,865,000 warrants issued to those holders During the three months ended December 31, 2021, (i) holders of the Company’s Series B Preferred Stock converted 392 shares of Series B Preferred Stock into 1,960,000 shares of its common stock, along with 1,960,000 warrants issued to those holders with an initial exercise price of $.30 per share, (ii) 4,000,000 warrants were issued to the holder of the convertible notes in conjunction with the notes with an initial exercise price of $.25 per share, and (iii) 878,260 warrants issued to the placement agent with an initial exercise price of $.25 per share. The Company valued these warrants using the Black Scholes model utilizing a 143.39% volatility and a risk-free rate of 1.25% During the six months ended December 31, 2020 the Company entered into a warrant agreement with one of the Company’s vendors issuing 500,000 warrants at a strike price of $0.50 having a term of five years. The Company valued these warrants using the Black Scholes model utilizing a 107.93% volatility and a risk-free rate of 0.29% The aggregate intrinsic value of the warrants as of December 31, 2021 is $297,500. Exercise Price June 30, 2021 Issued in FY 2022 Expired December 31, 2021 $ 0.01 1,600,000 - 1,600,000 $ 0.15 500,000 - 500,000 $ 0.20 2,250,000 2,250,000 $ 0.25 4,878,260 4,878,260 $ 0.30 2,650,000 5,825,000 - 8,475,000 $ 0.40 150,000 - 150,000 $ 0.50 500,000 - 500,000 $ 0.75 300,000 300,000 - $ 1.00 100,000 100,000 - 8,050,000 10,703,260 400,000 18,353,260 Certain warrants in the above table include dilution protection for the warrant holders, which could cause the exercise price to be reduced as a result of a financing event at a valuation below the exercise price in effect at the time. For example, as a result of the convertible note financing, we completed in December 2021 which would allow the new noteholders to convert their debt to shares of common stock at an exercise price of $.25/share, some of the $.30 warrants outstanding in the table above had their exercise price reduced from $.30 to $.2952. This reduction of less than half a penny in the exercise price of the 25,000,000 warrants associated with our Class B Preferred stock would result in proceeds to the Company of $7,380,000 rather than $7,500,000 should all those warrants be exercised. The result of the warrant exercise price downward adjustment on modification date was treated as a deemed dividend and fully amortized on the transaction date, and the Company recorded $68,722 to additional paid in capital and retained earnings for a null effect on the Company’s balance sheets. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 6 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | 12. Fair Value of Financial Instruments Cash and Equivalents, Receivables, Other Current Assets, Short-Term Debt, Accounts Payable, Accrued and Other Current Liabilities. The carrying amounts of these items approximated fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, Financial Accounting Standards Board (“FASB”) ASC Topic 820-10-35 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurements). Level 1 Level 2 Level 3 The Company’s financial instruments, including cash and cash equivalents, accounts payable and accrued liabilities, are carried at historical cost. At December 31, 2021, and June 30, 2021, the carrying amounts of these instruments approximated their fair values because of the short-term nature of these instruments. Derivative instruments are carried at fair value, generally estimated using the Trinomial Tree option pricing formula. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 13. Commitments and Contingencies: The Company has entered into certain consulting agreements which carry commitments to pay advisors and consultants should certain events occur. An agreement is in place with one Company advisor that called for total compensation over the four-year Advisor Agreement of 500,000 warrants with an exercise price of $.15 per share, of which all have vested. CEO Sean Folkson has a twelve-month consulting agreement which went into effect on January 1, 2022, which effectively served as an extension to, and reset of, his previous twelve-month consulting agreement with minor modifications to the available bonuses. Both contracts had provisions which would reward him with bonuses earned of 1,000,000 warrants at a strike price of $.50 should the Company record its first quarter with revenues over $1,000,000, an additional 3,000,000 warrants with a $.50 strike price when the Company records its first quarter with revenues over $3,000,000, and an additional 5,000,000 warrants with a $1 strike price when the Company records its first quarter with revenues over $5,000,000. Mr. Folkson will also be awarded 500,000 warrants with a strike price of $.50 should the Company enter into a product development or distribution partnership with a multi-national food & beverage conglomerate during the twelve-month term of the Agreement, and 1,000,000 Warrants with a $.50 strike price should the Company and its subsidiaries on a consolidated basis generate $1,000,000 or more in Net Revenue through sales of product through “non-traditional” retail channels, such as hotels and college campuses, during the twelve-month term of this agreement. As of December 31, 2021, those conditions were not met and therefore nothing was accrued related to this arrangement. Under Mr. Folkson’s consulting agreement, in January of 2023, an analysis will be done of the Company’s consolidated Calendar Year 2022 Gross Sales. Should the Company have achieved consolidated Gross Sales in excess of $3,000,000 in the Calendar Year 2022, Consultant’s monthly consulting rate of $6,000 per month as stated in this agreement shall be adjusted to $12,000 per month, retroactive to January 1, 2022. Litigation: From time to time, the Company may become involved in various lawsuits and legal proceedings, which arise, in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. The Company is not aware of any such legal proceedings that it believes will have, individually or in the aggregate, a material adverse effect on its business, financial condition or operating results. Coronavirus (COVID-19): On March 11, 2020, the World Health Organization declared the COVID-19 outbreak to be a global pandemic which continues to spread throughout the U.S. and the globe. In addition to the devastating effects on human life, the Pandemic has had a negative ripple effect on the global economy, leading to disruptions and volatility in the global financial markets. There are no comparable events that provide guidance as to the effect the COVID-19 pandemic may have, and, as a result, the ultimate effect of the pandemic remains highly uncertain and subject to change. It is impossible to know what the future holds with regard to the Pandemic, both for the Company and in the broader sense. Emergence of recent variants such as Delta and Omicron have shown us that there remain many uncertainties regarding the Pandemic, and the Company is closely monitoring the impact of the Pandemic on all aspects of its business, including how it will impact its customers, vendors, and business partners. While it seems many aspects of life are currently moving towards a return to what life was like prior to the initial COVID outbreak, the extent of the ultimate impact of the pandemic on the Company’s operational and financial performance remains uncertain. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 14. Related Party Transactions During the third quarter of Fiscal Year 2015, Mr. Folkson began accruing a consulting fee of $6,000 per month which the aggregate of $18,000 is reflected in professional fees for the three-month period ended December 31, 2021, and $36,000 for the six-month period ended December 31, 2021, reflected in accrued expenses – related party with a balance of $0 and $9,974 at December 31, 2021 and December 31, 2020, respectively. On December 8, 2017, Mr. Folkson purchased Warrants, at a cost of $.15 per Warrant, to acquire up to 80,000 additional shares of Company stock at a strike price of $.20, and with a term of three (3) years from the date of said agreement. This purchase resulted in a reduction in the accrued consulting fees due him by $12,000. Those warrants were not exercised during that timeframe and have expired. During the second quarter 2019 Mr. Folkson purchased 400,000 shares of stock at a price of $0.30 per share, valued at $120,000 which was charged to his accrual. In addition, the Company made bonuses available to Mr. Folkson upon the Company hitting certain revenue milestones of $1,000,000 in a quarter, $3,000,000 in a quarter, and $5,000,000 in a quarter. Achieving those milestones would earn Mr. Folkson warrants with a $.50 and $1.00 strike price which would need to be exercised within 90 days of the respective quarterly or annual filing. As of December 31, 2021, those conditions were not met and therefore nothing was accrued related to this arrangement. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | 15. Subsequent Events ● Subsequent to December 31, 2021, holders of Company Series B Preferred Stock converted an aggregate of 425 Class B Shares into 2,125,000 shares of Company common stock. ● On January 28, 2022, Spencer Clarke Management LLC exercised 1,600,000 warrants for Company common stock at an exercise price of $.01 per share. 360,000 of these warrants were earned by the recipient in February 2021 and the balance of 1,240,000 in April of 2021 as a result of Spencer Clarke assisting the Company in successfully closing the Company’s Class B Preferred financing round that month. The recipient accepted these warrants in lieu of a cash retainer for services rendered. ● On January 20, 2022, the Company entered into an Agreement For Shareholder Lock-Up And Acquisition of Warrants (the “Lock-Up Agreement”), with its Chairman, CEO and largest shareholder, Sean Folkson. For purposes of the Lock-Up Agreement, Mr. Folkson is the direct or indirect owner of 16,776,644 share of the Company’s common stock (the “Shares”), and Mr. Folkson has agreed to not transfer, sell, or otherwise dispose of any Shares through February 4, 2023. The Lock-Up Agreement is substantially similar to, and serves as an extension of, the lock-up agreement currently in place between the Company and Mr. Folkson, which expired in accordance with its terms on February 4, 2022. The Lock-Up Agreement further provides, in exchange for the agreement to lock up the Shares, that Mr. Folkson shall receive warrants to acquire 400,000 shares of Company common stock at an exercise price of $.30 per share, which warrants carry a twelve month term and a cashless provision, and will expire if not exercised within the twelve month term. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 6 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Interim Financial Statements | Interim Financial Statements These unaudited condensed consolidated financial statements for the three and six months ended December 31, 2021 and 2020, respectively, reflect all adjustments including normal recurring adjustments, which, in the opinion of management, are necessary to present fairly the financial position, results of operations and cash flows for the periods presented in accordance with the accounting principles generally accepted in the United States of America. These interim unaudited condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements and notes thereto for the fiscal years ended June 30, 2021 and 2020, respectively, which are included in the Company’s June 30, 2021 Annual Report on Form 10-K filed with the United States Securities and Exchange Commission on October 13, 2021. The Company assumes that the users of the interim financial information herein have read, or have access to, the audited consolidated financial statements for the preceding period, and that the adequacy of additional disclosure needed for a fair presentation may be determined in that context. The results of operations for the three and six months ended December 31, 2021, are not necessarily indicative of results for the entire fiscal year ending June 30, 2022. We made certain reclassifications to prior period amounts to conform with the current year’s presentation. These reclassifications did not have a material effect on our condensed consolidated statement of financial position, results of operations or cash flows. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles 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. Actual results could differ from those estimates. Estimates are used in the determination of depreciation and amortization, the valuation for non-cash issuances of common stock, and the website, income taxes and contingencies, valuing convertible notes for BCF (as defined below) and derivative liability, among others. |
Cash and Cash Equivalents | Cash and Cash Equivalents |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Statement of financial accounting standard FASB Topic 820, Disclosures about Fair Value of Financial Instruments, requires that the Company disclose estimated fair values of financial instruments. The carrying amounts reported in the statements of financial position for assets and liabilities qualifying as financial instruments are a reasonable estimate of fair value. |
Inventories | Inventories Inventories consisting of packaged food items and supplies are stated at the lower of cost (FIFO) or net realizable value, including provisions for spoilage commensurate with known or estimated exposures which are recorded as a charge to cost of sales during the period spoilage is incurred. The Company has no minimum purchase commitments with its vendors. |
Advertising Costs | Advertising Costs |
Income Taxes | Income Taxes The Company has not generated any taxable income, and, therefore, no provision for income taxes has been provided. Deferred income taxes are reported for timing differences between items of income or expense reported in the financial statements and those reported for income tax purposes in accordance with FASB Topic 740, “Accounting for Income Taxes”, which requires the use of the asset/liability method of accounting for income taxes. Deferred income taxes and tax benefits 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 for tax loss and credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The Company provides for deferred taxes for the estimated future tax effects attributable to temporary differences and carry-forwards when realization is more likely than not. A valuation allowance has been recorded to fully offset the deferred tax asset even though the Company believes it is more likely than not that the assets will be utilized. The Company’s effective tax rate differs from the statutory rates associated with taxing jurisdictions because of permanent and temporary timing differences as well as a valuation allowance. |
Revenue Recognition | Revenue Recognition The Company generates its revenue by selling its products wholesale to retailers and wholesalers. All sources of revenue are recorded pursuant to FASB Topic 606 Revenue Recognition, to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This includes a five-step framework that requires an entity to: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when the entity satisfies a performance obligation. In addition, this revenue generation requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The Company frequently offers sales discounts and promotions to supermarket customers through various programs such as rebates, temporary price reductions, product coupons, and other trade activities. This is standard practice for consumer products in the competitive and price-sensitive supermarket space. The Company records these activities as a reduction of gross sales as part of the calculation to arrive at reported net revenue. The Company incurs costs associated with product distribution, such as freight and handling costs. The Company has elected to treat these costs as fulfillment activities and recognizes these costs at the same time that it recognizes the underlying product revenue. As this policy election is in line with the Company’s previous accounting practices, the treatment of shipping and handling activities under FASB Topic 606 did not have any impact on the Company’s results of operations, financial condition and/or financial statement disclosures. The adoption of ASC 606 did not result in a change to the accounting for any of the Company’s revenue streams that are within the scope of the amendments. The Company’s services that fall within the scope of ASC 606 are recognized as revenue as the Company satisfies its obligation to the customer. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which updates revenue recognition guidance relating to contracts with customers. This standard states that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This standard is effective for annual reporting periods, and interim periods therein, beginning after July 1, 2018. The Company adopted ASU 2014-09 and its related amendments (collectively known as “ASC 606”) during the first quarter of fiscal 2019 using the full retrospective method. Management reviewed ASC 606-10-32-25 which states “Consideration payable to a customer includes cash amounts that an entity pays, or expects to pay, to the customer (or to other parties that purchase the entity’s goods or services from the customer). Consideration payable to a customer also includes credit or other items (for example, a coupon or voucher) that can be applied against amounts owed to the entity (or to other parties that purchase the entity’s goods or services from the customer). An entity shall account for consideration payable to a customer as a reduction of the transaction price and, therefore, of revenue unless the payment to the customer is in exchange for a distinct good or service (as described in paragraphs 606-10-25-18 through 25-22) that the customer transfers to the entity. If the consideration payable to a customer includes a variable amount, an entity shall estimate the transaction price (including assessing whether the estimate of variable consideration is constrained) in accordance with paragraphs 606-10-32-5 through 32-13.” If the consideration payable to a customer is a payment for a distinct good service, then in accordance with ASC 606-10-32-26, the entity should account for it the same way that it accounts for other purchases from suppliers (expense). Further, “if the amount of consideration payable to the customer exceeds the fair value of the distinct good or service that the entity receives from the customer, then the entity shall account for such an excess as a reduction of the transaction price. If the entity cannot reasonably estimate the fair value of the good or service received from the customer, it shall account for all of the consideration payable to the customer as a reduction of the transaction price.” Under ASC 606-10-32-27, if the consideration payable to a customer is accounted for as a reduction of the transaction price, “an entity shall recognize the reduction of revenue when (or as) the later of either of the following events occurs: a) The entity recognizes revenue for the transfer of the related goods or services to the customer. b) The entity pays or promises to pay the consideration (even if the payment is conditional on a future event). That promise might be implied by the entity’s customary business practices.” Management reviewed each arrangement to determine if each fee paid is for a distinct good or service and should be expensed as incurred or if the Company should recognize the payment as a reduction of revenue. The Company recognizes revenue upon shipment based on meeting the transfer of control criteria. The Company has made a policy election to treat shipping and handling as costs to fulfill the contract, and as a result, any fees received from customers are included in the transaction price allocated to the performance obligation of providing goods with a corresponding amount accrued within cost of sales for amounts paid to applicable carriers. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash deposits at financial institutions. At various times during the year, the Company may exceed the federally insured limits. To mitigate this risk, the Company places its cash deposits only with high credit quality institutions. Management believes the risk of loss is minimal. At December 31, 2021 and June 30, 2021, the Company did not have any uninsured cash deposits. |
Beneficial Conversion Feature | Beneficial Conversion Feature For conventional convertible debt where the rate of conversion is below market value, the Company records any “beneficial conversion feature” (“BCF”) intrinsic value as additional paid in capital and related debt discount. When the Company records a BCF, the relative fair value of the BCF is recorded as a debt discount against the face amount of the respective debt instrument. The discount is amortized over the life of the debt. If a conversion of the underlying debt occurs, a proportionate share of the unamortized amounts is immediately expensed. |
Debt Issue Costs | Debt Issue Costs The Company may pay debt issue costs in connection with raising funds through the issuance of debt whether convertible or not or with other consideration. These costs are recorded as debt discounts and are amortized over the life of the debt to the statement of operations as amortization of debt discount. The debt issuance costs paid to the third party consultant was directly expensed as incurred. |
Original Issue Discount | Original Issue If debt is issued with an original issue discount, the original issue discount is recorded to debt discount, reducing the face amount of the note and is amortized over the life of the debt to the statement of operations as amortization of debt discount. If a conversion of the underlying debt occurs, a proportionate share of the unamortized amounts is immediately expensed. |
Valuation of Derivative Instruments | Valuation of Derivative Instruments ASC 815 “Derivatives and Hedging” requires that embedded derivative instruments be bifurcated and assessed, along with free-standing derivative instruments such as warrants, on their issuance date and measured at their fair value for accounting purposes. In determining the appropriate fair value, the Company uses the Trinomial Tree option pricing formula. Upon conversion of a note where the embedded conversion option has been bifurcated and accounted for as a derivative liability, the Company records the shares at fair value, relieves all related notes, derivatives and debt discounts and recognizes a net gain or loss on derivative liability under the line item “change in derivative liability”. |
Derivative Financial Instruments | Derivative Financial Instruments The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks. The Company evaluates all of its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and then is revalued at each reporting date, with changes in fair value reported in the consolidated statement of operations. For stock based derivative financial instruments, Fair value accounting requires bifurcation of embedded derivative instruments such as conversion features in convertible debt or equity instruments, and measurement of their fair value for accounting purposes. In determining the appropriate fair value, the Company uses the Trinomial Tree option-pricing model. In assessing the convertible debt instruments, management determines if the convertible debt host instrument is conventional convertible debt and further if there is a beneficial conversion feature requiring measurement. If the instrument is not considered conventional convertible debt, the Company will continue its evaluation process of these instruments as derivative financial instruments. Once determined, derivative liabilities are adjusted to reflect fair value at the end of each reporting period. Any increase or decrease in the fair value from inception is made quarterly and appears in results of operations as a change in fair market value of derivative liabilities. The Company has adopted ASU 2017-11, Earnings per share (Topic 260), provided that when determining whether certain financial instruments should be classified as liability or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. If a down round feature on the conversion option embedded in the note is triggered, the Company will evaluate whether a beneficial conversion feature exists, the Company will record the amount as a debt discount and will amortize it over the remaining term of the debt. If the down round feature in the warrants that are classified as equity is triggered, the Company will recognize the effect of the down round as a deemed dividend. While the Company currently has no plans to attempt to pay dividends for the foreseeable future to any stockholders, such a deemed dividend would reduce the income available to common stockholders in the hypothetical scenario where a dividend were to be contemplated. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for share-based awards issued to employees in accordance with FASB ASC 718. Accordingly, employee share-based payment compensation is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the requisite service period. Additionally, share-based awards to non-employees are expensed over the period in which the related services are rendered at their fair value. The Company applies ASC 718, “Equity Based Payments to Non-Employees”, with respect to options and warrants issued to non-employees. |
Customer Concentration | Customer Concentration During the six months ended December 31, 2021, the Company had one customer account for 26% of the gross sales. One other customer accounted for 18% of the gross sales and two other customers each account for more than 10% of the gross sales. During the six months ended December 31, 2020, the Company had one customer account for approximately 33% of the gross sales, one customer accounted for approximately 19% of gross sales, and one customer accounted for over 10% of gross sales. |
Vendor Concentration | Vendor Concentration During the three and six-month periods ended December 31, 2021, no vendors accounted for more than 10% of the Company’s operating expenses During the three-month period ended December 31, 2020, no vendors accounted for more than 10% of the Company’s operating expenses. During the six-month period ended December 31, 2020, one vendor accounted for more than 10% of the Company’s operating expenses. |
Receivables Concentration | Receivables Concentration |
Income/Loss Per Share | Income/Loss Per Share Net income/loss per share data for both the three and six-month periods ending December 31, 2021 and 2020, are based on net income/loss available to common shareholders divided by the weighted average of the number of common shares outstanding. The Company does not present a diluted Earnings per share as the convertible debt and interest that is convertible into shares of the Company’s common stock would not be included in this computation, as the Company is generating a loss and therefore these shares would be antidilutive. |
Impairment of Long-lived Assets | Impairment of Long-lived Assets The Company accounts for long-lived assets in accordance with the provisions of FASB Topic 360, Accounting for the Impairment of Long-Lived Assets. This statement requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset. 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. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. Fair values are determined based on quoted market value, discounted cash flows or internal and external appraisals, as applicable. During the three and six month periods ended December 31, 2021 and 2020, there were no impairments on intangible assets. |
Reclassification | Reclassification The Company may make certain reclassifications to prior period amounts to conform with the current year’s presentation. These reclassifications did not have a material effect on its consolidated statement of financial position, results of operations or cash flows. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In January 2016, the FASB issued ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10) – Recognition and Measurement of Financial Assets and Financial Liabilities, which requires all investments in equity securities with readily determinable fair value to be measured at fair value with changes in the fair value recognized through net income (other than those accounted for under the equity method of accounting or those that result in consolidation of the investee). ASU 2016-01 is intended to enhance the reporting model for financial instruments to provide users of financial statements with more decision-useful information and removes the requirement to disclose the methods and significant assumptions used to estimate the fair value for financial instruments measured at amortized cost on the balance sheet. For public companies, the new standard is effective for annual periods beginning after December 15, 2017, including interim periods within the fiscal year. For all other entities, including emerging growth companies, ASU 2016-01 is effective for annual periods beginning after December 15, 2018, and interim periods within annual periods beginning after December 15, 2019. The Company evaluated the impact on the financial statements and implemented the provisions of ASU 2016-01 for the annual financial statements for the year ended June 30, 2020. This new standard did not have a material impact on our financial statements or related disclosures. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) and subsequently amended the guidance relating largely to transition considerations under the standard in January 2017, to increase transparency and comparability among organizations by requiring the recognition of right-of-use (“ROU”) assets and lease liabilities on the balance sheet. Most prominent among the changes in the standard is the recognition of ROU assets and lease liabilities by lessees for those leases classified as operating leases under current U.S. GAAP. Under the standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. We will be required to recognize and measure leases existing at, or entered into after, the beginning of the earliest comparative period presented using a modified retrospective approach, with certain practical expedients available. The standard became effective for us beginning July 1, 2019. We have reviewed this and have determined that there is no material impact on our financial statements. In July 2017, the FASB issued ASU No. 2017-11, Earnings Per Share, Distinguishing Liabilities from Equity and Derivatives and Hedging, which changes the accounting and earnings per share for certain instruments with down round features. The amendments in this ASU should be applied using a cumulative-effect adjustment as of the beginning of the fiscal year or retrospective adjustment to each period presented and is effective for annual periods beginning after December 15, 2018, and interim periods within those periods. We adopted this guidance effective July 1, 2019. The adoption of this guidance did not materially impact our financial statements and related disclosures. In February 2018, the Financial Accounting Standards Board (“FASB”) issued ASC Update No 2018-02 (Topic 220) Income Statement – Reporting Comprehensive Income: Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. This ASC update allows for a reclassification into retained earnings of the stranded tax effects in accumulated other comprehensive income resulting from the enactment of the Tax Cuts and Jobs Act. The updated guidance is effective for interim and annual periods beginning after December 15, 2018. We adopted this guidance effective July 1, 2019. The adoption of this guidance did not materially impact our financial statements and related disclosures. In June 2018, the FASB issued ASU 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, to expand the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees and supersedes the guidance in Subtopic 505-50, Equity - Equity-Based Payments to Non-Employees. Under ASU 2018-07, equity-classified nonemployee share-based payment awards are measured at the grant date fair value on the grant date The probability of satisfying performance conditions must be considered for equity-classified nonemployee share-based payment awards with such conditions. ASU 2018-07 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. We adopted this guidance effective July 1, 2019. The adoption of this guidance did not materially impact our financial statements and related disclosures. In July 2018, the FASB issued ASU 2018-09 to provide clarification and correction of errors to the Codification. The amendments in this update cover multiple Accounting Standards Updates. Some topics in the update may require transition guidance with effective dates for annual periods beginning after December 15, 2018. We adopted this guidance effective July 1, 2019. The adoption of this guidance did not materially impact our financial statements and related disclosures. In August 2020, the FASB issued ASU 2020-06 to simplify the current guidance for convertible instruments and the derivatives scope exception for contracts in an entity’s own equity. Additionally, the amendments affect the diluted EPS calculation for instruments that may be settled in cash or shares and for convertible instruments. The update also provides for expanded disclosure requirements to increase transparency. For SEC filers, excluding smaller reporting companies, this update is effective for fiscal years beginning after December 15, 2021 including interim periods within those fiscal years. For all other entities, this update is effective for fiscal years beginning after December 15, 2023, including interim periods therein. The Company believes the adoption of this guidance will not materially impact its financial statements and related disclosures. The Company will continue to monitor these and other emerging issues to assess any potential future impact on its financial statements. |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Dec. 31, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory | December 31, June 30, Finished goods – ice cream $ 345,792 $ 338,369 Raw material – ingredients 42,792 14,760 Packaging 61,149 59,010 Allowance for unsaleable (24,403 ) (24,403 ) TOTAL $ 425,331 $ 387,736 |
Other current assets (Tables)
Other current assets (Tables) | 6 Months Ended |
Dec. 31, 2021 | |
Assets, Current [Abstract] | |
Schedule of other current assets | December 31, June 30, Vendor deposits – Other $ 119,093 $ 33,480 TOTAL $ 119,093 $ 33,480 |
Other Current Liabilities (Tabl
Other Current Liabilities (Tables) | 6 Months Ended |
Dec. 31, 2021 | |
Disclosure Text Block Supplement [Abstract] | |
Schedule of other current liabilities | December 31, June 30, Accrued consulting fees – related party $ - 3,000 TOTAL $ - 3,000 |
Convertible Notes Payable (Tabl
Convertible Notes Payable (Tables) | 6 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of convertible notes payable | Principal $ Debt Discount $ Net Value $ Balance at June 30, 2020 $ 2,935,400 $ (605,211 ) $ 2,330,189 Convertible notes payable issued during FISCAL YEAR ENDED June 30, 2021 822,800 822,800 Notes converted into shares of common stock (1,433,000 ) (1,433,000 ) Debt discount associated with new convertible notes (512,993 ) (512,993 ) Amortization of debt discount 814,769 814,769 True-up adjustment in debt discount and derivative liability (37,360 ) (37,360 ) Notes retired due to refinancing (2,325,200 ) 340,795 (1,984,405 ) Balance at June 30, 2021 - - - Convertible notes payable issued during six months ended December 31, 2021 1,086,957 1,086,957 Debt discount associated with new convertible notes 1,018,229 1,018,229 Amortization of debt discount (12,218 ) (12,218 ) Balance at December 31, 2021 $ 1,086,957 $ 1,006,011 $ 80,946 |
Derivative Liability (Tables)
Derivative Liability (Tables) | 6 Months Ended |
Dec. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of reconciliation of derivative liability | Derivative liability as of June 30, 2020 $ 1,590,638 Initial derivative liability accounted for convertible notes payable issued during the period ended June 30, 2021 512,993 True-up adjustment in debt discount and derivative liability 37,360 Change in derivative liability during the period (853,329 ) Notes retired due to refinancing (1,287,662 ) Derivative liability as of June 30, 2021 $ - Change - Balance at December 31, 2021 $ - |
Warrants (Tables)
Warrants (Tables) | 6 Months Ended |
Dec. 31, 2021 | |
Warrants [Abstract] | |
Schedule of outstanding common stock purchase warrants | Exercise Price June 30, 2021 Issued in FY 2022 Expired December 31, 2021 $ 0.01 1,600,000 - 1,600,000 $ 0.15 500,000 - 500,000 $ 0.20 2,250,000 2,250,000 $ 0.25 4,878,260 4,878,260 $ 0.30 2,650,000 5,825,000 - 8,475,000 $ 0.40 150,000 - 150,000 $ 0.50 500,000 - 500,000 $ 0.75 300,000 300,000 - $ 1.00 100,000 100,000 - 8,050,000 10,703,260 400,000 18,353,260 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
Jul. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Summary of Significant Accounting Policies (Details) [Line Items] | |||||
Federal deposit insurance corporation (in Dollars) | $ 250,000 | $ 250,000 | |||
Advertising costs (in Dollars) | $ 158,040 | $ 67,036 | $ 465,791 | $ 252,325 | |
Customer risk percentage | 10.00% | ||||
Operating expense in percentage | 22.00% | 20.00% | 10.00% | ||
One Customer [Member] | |||||
Summary of Significant Accounting Policies (Details) [Line Items] | |||||
Customer risk percentage | 36.00% | 25.00% | 26.00% | 33.00% | |
Operating expense in percentage | 19.00% | ||||
Two Customer [Member] | |||||
Summary of Significant Accounting Policies (Details) [Line Items] | |||||
Customer risk percentage | 18.00% | ||||
Operating expense in percentage | 10.00% | ||||
Vendor Concentration [Member] | |||||
Summary of Significant Accounting Policies (Details) [Line Items] | |||||
Operating expense in percentage | 10.00% | 10.00% | 10.00% | ||
Receivables Concentration [Member] | |||||
Summary of Significant Accounting Policies (Details) [Line Items] | |||||
Customer risk percentage | 11.50% | 42.00% | |||
Operating expense in percentage | 73.00% | 10.00% | |||
Customer concentration percentage | 27.00% | ||||
Customer two percentage | 14.00% |
Going Concern (Details)
Going Concern (Details) | 6 Months Ended |
Dec. 31, 2021USD ($)$ / shares | |
Going Concern [Abstract] | |
Net loss (in Dollars per share) | $ / shares | $ 1,614,594 |
Cash flow from operations | $ 1,440,431 |
Accumulated deficit | $ 27,170,122 |
Inventories (Details) - Schedul
Inventories (Details) - Schedule of inventory - USD ($) | Dec. 31, 2021 | Jun. 30, 2021 |
Schedule of inventory [Abstract] | ||
Finished goods – ice cream | $ 345,792 | $ 338,369 |
Raw material – ingredients | 42,792 | 14,760 |
Packaging | 61,149 | 59,010 |
Allowance for unsaleable | (24,403) | (24,403) |
TOTAL | $ 425,331 | $ 387,736 |
Other current assets (Details)
Other current assets (Details) - Schedule of other current assets - USD ($) | Sep. 30, 2021 | Jun. 30, 2021 |
Schedule of other current assets [Abstract] | ||
Vendor deposits – Other | $ 119,093 | $ 33,480 |
TOTAL | $ 119,093 | $ 33,480 |
Other Current Liabilities (Deta
Other Current Liabilities (Details) - Schedule of other current liabilities - USD ($) | Dec. 31, 2021 | Jun. 30, 2021 |
Schedule of other current liabilities [Abstract] | ||
Accrued consulting fees – related party | $ 3,000 | |
TOTAL | $ 3,000 |
Convertible Notes Payable (Deta
Convertible Notes Payable (Details) - USD ($) | Jun. 10, 2022 | Dec. 10, 2021 | Aug. 12, 2020 | Feb. 06, 2020 | Nov. 07, 2019 | Sep. 24, 2019 | Aug. 29, 2019 | Aug. 08, 2019 | Jul. 05, 2019 | Jun. 11, 2019 | Apr. 30, 2019 | Feb. 14, 2019 | Jun. 23, 2020 | Apr. 30, 2020 | Feb. 26, 2020 | Dec. 31, 2019 | Apr. 29, 2019 | Dec. 31, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Jun. 30, 2021 | Sep. 30, 2020 | Jun. 30, 2020 | Apr. 30, 2018 |
Convertible Notes Payable (Details) [Line Items] | |||||||||||||||||||||||||||
Convertible amount | $ 225,000 | ||||||||||||||||||||||||||
Convertible price for interest payment percentage | 60.00% | ||||||||||||||||||||||||||
Volatility | 143.39% | 107.93% | |||||||||||||||||||||||||
Risk free interest rate | 1.25% | 0.29% | |||||||||||||||||||||||||
Conversion loss | $ 4,098 | ||||||||||||||||||||||||||
Debt discount expense | $ 12,218 | $ 254,048 | $ 12,218 | $ 576,787 | |||||||||||||||||||||||
Debt discount unamortized portion | 1,006,011 | 1,006,011 | $ 0 | ||||||||||||||||||||||||
Interest expense | 4,909 | $ 111,575 | 4,909 | $ 195,530 | |||||||||||||||||||||||
Accrued interest | 4,909 | 0 | |||||||||||||||||||||||||
Convertible Notes Payable [Member] | |||||||||||||||||||||||||||
Convertible Notes Payable (Details) [Line Items] | |||||||||||||||||||||||||||
Notes payable interest rate | 8.00% | ||||||||||||||||||||||||||
Retired via conversion into shares | |||||||||||||||||||||||||||
Convertible Notes Payable [Member] | Security purchase agreement [Member] | |||||||||||||||||||||||||||
Convertible Notes Payable (Details) [Line Items] | |||||||||||||||||||||||||||
Notes payable interest rate | 8.00% | ||||||||||||||||||||||||||
Convertible price for interest payment percentage | 70.00% | ||||||||||||||||||||||||||
Fair value of notes | $ 104,000 | ||||||||||||||||||||||||||
Convertible Notes Payable [Member] | Derivatives and Hedging [Member] | |||||||||||||||||||||||||||
Convertible Notes Payable (Details) [Line Items] | |||||||||||||||||||||||||||
Fair value of notes | $ 150,000 | $ 300,000 | $ 300,000 | $ 300,000 | 104,000 | $ 208,000 | 225,000 | 225,000 | |||||||||||||||||||
Fair value of notes payable black-scholes pricing model | $ 118,009 | $ 234,052 | $ 254,082 | $ 239,759 | $ 240,217 | $ 90,567 | $ 170,098 | 287,174 | $ 287,174 | ||||||||||||||||||
Risk-free interest rate | 2.24% | ||||||||||||||||||||||||||
Expected life | 1 year | 1 year | 1 year | 1 year | 1 year | 1 year | 1 year | 1 year | |||||||||||||||||||
Volatility | 113.00% | 113.00% | 113.00% | 118.00% | 16.00% | 136.00% | 118.00% | 202.00% | |||||||||||||||||||
Dividend yield percent | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | |||||||||||||||||||
Convertible notes payable | $ 150,000 | $ 300,000 | $ 300,000 | $ 62,174 | $ 62,174 | ||||||||||||||||||||||
Risk free interest rate | 1.78% | 1.75% | 1.79% | 1.98% | 2.05% | 2.53% | 2.42% | ||||||||||||||||||||
Convertible Notes Payable [Member] | Security purchase agreement [Member] | |||||||||||||||||||||||||||
Convertible Notes Payable (Details) [Line Items] | |||||||||||||||||||||||||||
Convertible amount | $ 205,700 | $ 200,000 | $ 150,000 | $ 150,000 | $ 300,000 | $ 300,000 | $ 300,000 | $ 300,000 | $ 205,700 | $ 205,700 | $ 187,000 | $ 150,000 | $ 208,000 | ||||||||||||||
Notes payable interest rate | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | |||||||||||||
Convertible price for interest payment percentage | 78.00% | 70.00% | 70.00% | 70.00% | 70.00% | 70.00% | 70.00% | 70.00% | 78.00% | 78.00% | 70.00% | 70.00% | 70.00% | ||||||||||||||
Fair value of notes | $ 300,000 | ||||||||||||||||||||||||||
Risk-free interest rate | 1.25% | ||||||||||||||||||||||||||
Net proceeds amount | $ 500,000 | $ 225,000 | |||||||||||||||||||||||||
Convertible notes payable | $ 300,000 | 300,000 | $ 104 | $ 208,000 | |||||||||||||||||||||||
Note retired | 208,000 | $ 50,000 | |||||||||||||||||||||||||
Retired via conversion into shares | $ 54,000 | ||||||||||||||||||||||||||
Conversion loss | $ 42,595 | $ 109,561 | |||||||||||||||||||||||||
Maturity date | Dec. 10, 2022 | Nov. 7, 2020 | |||||||||||||||||||||||||
Original discount, percentage | 8.00% | 10.00% | 10.00% | 10.00% | |||||||||||||||||||||||
Interest expense | $ 18,700 | $ 18,700 | $ 18,700 | ||||||||||||||||||||||||
Principal amount of discount | $ 1,086,956.52 | ||||||||||||||||||||||||||
Original issue discount | $ 1,000,000 | ||||||||||||||||||||||||||
Purchase of warrant (in Shares) | 4,000,000 | ||||||||||||||||||||||||||
Interest rate per annum | 8.00% | ||||||||||||||||||||||||||
Convertible fixed price per share (in Dollars per share) | $ 25 | ||||||||||||||||||||||||||
Provisions for convertible fixed price per share (in Dollars per share) | $ 20 | $ 20 | |||||||||||||||||||||||||
Aggregate of common stock warrants (in Shares) | 878,260 | ||||||||||||||||||||||||||
Net amount | $ 1,000,000 | ||||||||||||||||||||||||||
Convertible Notes Payable [Member] | Cost of Sales [Member] | Security purchase agreement [Member] | |||||||||||||||||||||||||||
Convertible Notes Payable (Details) [Line Items] | |||||||||||||||||||||||||||
Debt discount | $ 0 | 0 | |||||||||||||||||||||||||
Convertible Notes Payable [Member] | Cost of Sales [Member] | Security Purchase Agreement One [Member] | |||||||||||||||||||||||||||
Convertible Notes Payable (Details) [Line Items] | |||||||||||||||||||||||||||
Debt discount | 0 | 0 | |||||||||||||||||||||||||
Convertible Notes Payable [Member] | Cost of Sales [Member] | Security purchase agreement Two [Member] | |||||||||||||||||||||||||||
Convertible Notes Payable (Details) [Line Items] | |||||||||||||||||||||||||||
Debt discount | $ 0 | 46,726 | |||||||||||||||||||||||||
Convertible Notes Payable [Member] | Cost of Sales [Member] | Security Purchase Agreement Three [Member] | |||||||||||||||||||||||||||
Convertible Notes Payable (Details) [Line Items] | |||||||||||||||||||||||||||
Debt discount | 0 | 2,627 | |||||||||||||||||||||||||
Spencer Clarke LLC [Member] | Convertible Notes Payable [Member] | Security purchase agreement [Member] | |||||||||||||||||||||||||||
Convertible Notes Payable (Details) [Line Items] | |||||||||||||||||||||||||||
Convertible notes payable | $ 100,000 | ||||||||||||||||||||||||||
December 31, 2020 [Member] | Convertible Notes Payable [Member] | Security purchase agreement [Member] | |||||||||||||||||||||||||||
Convertible Notes Payable (Details) [Line Items] | |||||||||||||||||||||||||||
Conversion loss | $ 36,242 | ||||||||||||||||||||||||||
Minimum [Member] | Convertible Notes Payable [Member] | Security purchase agreement [Member] | |||||||||||||||||||||||||||
Convertible Notes Payable (Details) [Line Items] | |||||||||||||||||||||||||||
Notes payable interest rate | 115.00% | ||||||||||||||||||||||||||
Maximum [Member] | Convertible Notes Payable [Member] | Security purchase agreement [Member] | |||||||||||||||||||||||||||
Convertible Notes Payable (Details) [Line Items] | |||||||||||||||||||||||||||
Notes payable interest rate | 120.00% | ||||||||||||||||||||||||||
Notes Payable, Other Payables [Member] | Derivatives and Hedging [Member] | |||||||||||||||||||||||||||
Convertible Notes Payable (Details) [Line Items] | |||||||||||||||||||||||||||
Fair value of notes | 205,700 | $ 200,000 | $ 150,000 | 205,700 | 205,700 | $ 200,000 | $ 150,000 | ||||||||||||||||||||
Fair value of notes payable black-scholes pricing model | $ 126,029 | $ 156,061 | $ 121,875 | $ 132,236 | $ 128,369 | $ 156,061 | $ 189,172 | ||||||||||||||||||||
Expected life | 1 year | 1 year | 1 year | 1 year | 1 year | 1 year | 1 year | ||||||||||||||||||||
Volatility | 101.00% | 113.00% | 122.00% | 108.00% | 106.00% | 113.00% | 115.00% | ||||||||||||||||||||
Dividend yield percent | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | ||||||||||||||||||||
Convertible notes payable | $ 150,000 | $ 150,000 | |||||||||||||||||||||||||
Risk free interest rate | 0.13% | 1.51% | 1.58% | 0.18% | 0.16% | 1.51% | 1.59% | ||||||||||||||||||||
Debt discount | 43,074 | ||||||||||||||||||||||||||
Financing costs | $ 39,172 | ||||||||||||||||||||||||||
Debt discount expense | $ 25,722 | ||||||||||||||||||||||||||
Notes Payable, Other Payables [Member] | Security purchase agreement [Member] | |||||||||||||||||||||||||||
Convertible Notes Payable (Details) [Line Items] | |||||||||||||||||||||||||||
Expected life | 5 years | ||||||||||||||||||||||||||
Volatility | 142.53% | ||||||||||||||||||||||||||
Dividend yield percent | 0.00% | ||||||||||||||||||||||||||
Cash commission | $ 100,000 | ||||||||||||||||||||||||||
Notes Payable, Other Payables [Member] | Convertible Notes Payable [Member] | |||||||||||||||||||||||||||
Convertible Notes Payable (Details) [Line Items] | |||||||||||||||||||||||||||
Debt discount | 0 | 27,482 | |||||||||||||||||||||||||
Notes Payable, Other Payables [Member] | Debt Discount [Member] | Convertible Notes Payable [Member] | Security purchase agreement [Member] | |||||||||||||||||||||||||||
Convertible Notes Payable (Details) [Line Items] | |||||||||||||||||||||||||||
Debt discount | 26,452 | ||||||||||||||||||||||||||
Debt Discount [Member] | |||||||||||||||||||||||||||
Convertible Notes Payable (Details) [Line Items] | |||||||||||||||||||||||||||
Debt discount | 75,205 | ||||||||||||||||||||||||||
Debt Discount [Member] | Security purchase agreement [Member] | |||||||||||||||||||||||||||
Convertible Notes Payable (Details) [Line Items] | |||||||||||||||||||||||||||
Debt discount | 0 | 94,064 | |||||||||||||||||||||||||
Debt Discount [Member] | Convertible Notes Payable [Member] | Security purchase agreement [Member] | |||||||||||||||||||||||||||
Convertible Notes Payable (Details) [Line Items] | |||||||||||||||||||||||||||
Debt discount | 0 | 37,833 | |||||||||||||||||||||||||
Debt Discount [Member] | Notes Payable, Other Payables [Member] | |||||||||||||||||||||||||||
Convertible Notes Payable (Details) [Line Items] | |||||||||||||||||||||||||||
Debt discount | $ 0 | ||||||||||||||||||||||||||
Debt Discount [Member] | Notes Payable, Other Payables [Member] | Derivatives and Hedging [Member] | |||||||||||||||||||||||||||
Convertible Notes Payable (Details) [Line Items] | |||||||||||||||||||||||||||
Debt discount | 0 | ||||||||||||||||||||||||||
Debt Discount [Member] | Notes Payable, Other Payables [Member] | Security purchase agreement [Member] | |||||||||||||||||||||||||||
Convertible Notes Payable (Details) [Line Items] | |||||||||||||||||||||||||||
Debt discount | 54,728 | $ 94,064 | |||||||||||||||||||||||||
Debt Discount [Member] | Notes Payable, Other Payables [Member] | Convertible Notes Payable [Member] | Security purchase agreement [Member] | |||||||||||||||||||||||||||
Convertible Notes Payable (Details) [Line Items] | |||||||||||||||||||||||||||
Debt discount | $ 0 | ||||||||||||||||||||||||||
Common Stock [Member] | Convertible Notes Payable [Member] | Security purchase agreement [Member] | |||||||||||||||||||||||||||
Convertible Notes Payable (Details) [Line Items] | |||||||||||||||||||||||||||
Purchase of warrant (in Shares) | 878,260 | ||||||||||||||||||||||||||
Warrant exercisable price (in Dollars per share) | $ 0.25 | ||||||||||||||||||||||||||
Warrant [Member] | Convertible Notes Payable [Member] | Security purchase agreement [Member] | |||||||||||||||||||||||||||
Convertible Notes Payable (Details) [Line Items] | |||||||||||||||||||||||||||
Issuance of warrant | $ 170,210 |
Convertible Notes Payable (De_2
Convertible Notes Payable (Details) - Schedule of convertible notes payable - USD ($) | 6 Months Ended | 12 Months Ended |
Dec. 31, 2021 | Jun. 30, 2021 | |
Principal [Member] | ||
Convertible Notes Payable (Details) - Schedule of convertible notes payable [Line Items] | ||
Balance at beginning | $ 2,935,400 | |
Balance at ending | 1,086,957 | |
Convertible notes payable issued | 1,086,957 | 822,800 |
Notes converted into shares of common stock | (1,433,000) | |
Debt discount associated with new convertible notes | ||
Amortization of debt discount | ||
True-up adjustment in debt discount and derivative liability | ||
Notes retired due to refinancing (in Shares) | (2,325,200) | |
Debt Discount [Member] | ||
Convertible Notes Payable (Details) - Schedule of convertible notes payable [Line Items] | ||
Balance at beginning | $ (605,211) | |
Balance at ending | 1,006,011 | |
Convertible notes payable issued | ||
Notes converted into shares of common stock | ||
Debt discount associated with new convertible notes | 1,018,229 | (512,993) |
Amortization of debt discount | (12,218) | 814,769 |
True-up adjustment in debt discount and derivative liability | $ (37,360) | |
Notes retired due to refinancing (in Shares) | 340,795 | |
Net Value [Member] | ||
Convertible Notes Payable (Details) - Schedule of convertible notes payable [Line Items] | ||
Balance at beginning | $ 2,330,189 | |
Balance at ending | 80,946 | |
Convertible notes payable issued | 1,086,957 | 822,800 |
Notes converted into shares of common stock | (1,433,000) | |
Debt discount associated with new convertible notes | 1,018,229 | (512,993) |
Amortization of debt discount | $ (12,218) | 814,769 |
True-up adjustment in debt discount and derivative liability | $ (37,360) | |
Notes retired due to refinancing (in Shares) | (1,984,405) |
Derivative Liability (Details)
Derivative Liability (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Jun. 30, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||
Change in derivative liability during the period | $ 0 | $ 57,294 | $ 0 | $ 264,818 | |
Derivative liability related to convertible notes | $ 0 | $ 0 |
Derivative Liability (Details)
Derivative Liability (Details) - Schedule of reconciliation of derivative liability - USD ($) | 6 Months Ended | 12 Months Ended |
Dec. 31, 2021 | Jun. 30, 2021 | |
Schedule of reconciliation of derivative liability [Abstract] | ||
Derivative liability beginning | $ 1,590,638 | |
Derivative liability ending | ||
Initial derivative liability accounted for convertible notes payable issued during the period ended June 30, 2021 | 512,993 | |
True-up adjustment in debt discount and derivative liability | 37,360 | |
Change in derivative liability during the period | (853,329) | |
Notes retired due to refinancing | $ (1,287,662) | |
Change |
Capital Stock Activity (Details
Capital Stock Activity (Details) - USD ($) | Jul. 09, 2018 | Apr. 30, 2021 | Dec. 31, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Dec. 31, 2021 | Jun. 30, 2021 |
Capital Stock Activity (Details) [Line Items] | ||||||||
Common stock, shares authorized | 200,000,000 | 200,000,000 | ||||||
Stock price (in Dollars per share) | $ 0.001 | $ 0.001 | ||||||
Outstanding shares, percentage | 50.00% | |||||||
Common stock, share issued | 87,060,178 | 87,060,178 | ||||||
Common stock, share outstanding | 80,707,467 | 80,707,467 | ||||||
Number of issued shares | 50,500 | 583,914 | ||||||
Common stock service value (in Dollars) | $ 15,768 | $ 140,000 | $ 88,673 | |||||
Reversed share | 41,308 | |||||||
Conversion description | ● During the three months ended December 31, 2021, the Company reversed an entry relating to 41,308 shares that had previously been allocated for services but remained unissued. In 2020, there were no such related transactions. ● During the three months ended December 31, 2020 the Company issued 2,881,220 shares in regards to debt being converted into stock valued at $215,000, and issued 336,132 shares of common stock valued at $25,008 as part of a loan agreement and payment of interest as part of the debt conversion. In 2021, there were no such related transactions. ●During the three months ended September 30, 2021, the Company issued an aggregate of 518,519 shares of its $0.001 par value common stock for services valued at $140,000. During the three months ended September 30, 2020, the Company issued an aggregate of 0 shares of its $.001 par value common stock for services valued at $0. ●During the three months ended September 30, 2021, holders of the Company’s Series B Preferred Stock converted 773 shares of Series B Preferred Stock into 3,865,000 shares of its common stock ●During the three months ended September 30, 2020 the Company issued 2,975,979 shares in regards to debt being converted into stock valued at $347,000, and issued 312,938 shares of common stock valued at $36,478 as part of a loan agreement and payment of interest as part of the debt conversion. Preferred Stock Series A Stock On July 9 2018, the Company was authorized to issue 1,000,000 shares of $0.001 par value per share Preferred Stock. Of the 1,000,000 shares. 10,000 shares were designated as Series A Preferred Stock (“Series A Stock”). Holders of Series A Stock are each entitled to cast 100,000 votes for each Share held of record on all matters presented to shareholders. In addition to his ownership of the common stock, Mr. Folkson owns 1,000 shares of the Series A Stock which votes with the common stock and has an aggregate of 100,000,000 votes. The Company had 1,000 and 1,000 shares of its $0.001 par value preferred Series A stock issued and outstanding as of December 31, 2021, and June 30, 2021, respectively. Series B Stock In April 2021, the Company designated 5,000 shares of its Preferred Stock as Series B Preferred Stock (“B Stock”), each Series B share of which is convertible into 5,000 shares of common stock and 5,000 non-detachable warrants with a strike price of $.30 The Company had 3,835 and 4,665 shares of its $0.001 par value Series B Preferred Stock issued and outstanding as of December 31, 2021, and June 30, 2021 respectively. During the three months ended December 31, 2021, holders of the Company’s Series B Preferred Stock converted 392 shares of Series B Preferred Stock into 1,960,000 shares of its common stock. In 2020, there were no such related transaction. During the three months ended December 31, 2021 and 2020, no shares of B Stock were issued to investors. During the three months ended September 30, 2021, holders of the Company’s Series B Preferred Stock converted 773 shares of Series B Preferred Stock into 3,865,000 shares of its common stock. | |||||||
Convertable shares | 2,881,220 | |||||||
Convertable shares value (in Dollars) | $ 215,000 | |||||||
Common stock share issued | 336,132 | |||||||
Loan agreement payment (in Dollars) | $ 25,008 | |||||||
Shares issued | 518,519 | 0 | ||||||
Common stock, par value (in Dollars per share) | $ 0.001 | |||||||
Conversion of amount | 140,000 | 0 | ||||||
Stock split, description | In connection with certain conversion terms provided for in the designation of the Series B Preferred Stock, pursuant to which each share of Series B Preferred Stock is convertible into 5,000 shares of common stock and 5,000 warrants, the Company recognized a beneficial conversion feature upon the conclusion of the transaction in the amount of $4,375,860. | |||||||
Common Stock [Member] | ||||||||
Capital Stock Activity (Details) [Line Items] | ||||||||
Stock price (in Dollars per share) | $ 0.001 | $ 0.001 | ||||||
Common stock service value (in Dollars) | $ 50 | $ 519 | $ 584 | |||||
Series B Preferred Stock [Member] | ||||||||
Capital Stock Activity (Details) [Line Items] | ||||||||
Shares issued | 335 | |||||||
Preferred stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 | ||||||
Stock split, description | the Company designated 5,000 shares of its Preferred Stock as Series B Preferred Stock (“B Stock”), each Series B share of which is convertible into 5,000 shares of common stock and 5,000 non-detachable warrants with a strike price of $. | |||||||
Preferred stock, shares issued | 3,835 | 3,835 | 4,665 | |||||
Preferred stock, shares outstanding | 3,835 | 3,835 | 4,665 | |||||
Invested capital price value (in Dollars) | $ 0.001 | |||||||
Gross cash proceeds (in Dollars) | $ 335,000 | |||||||
Shares issued for deemed dividend | 335 | |||||||
Series B Preferred Stock [Member] | Common Stock [Member] | ||||||||
Capital Stock Activity (Details) [Line Items] | ||||||||
Convertable shares | 773 | |||||||
Conversion of amount | 392 | |||||||
Converted common stock | 3,865,000 | |||||||
Conversion of preferred share | 1,960,000 | |||||||
Series B Preferred Stock [Member] | Preferred Stock [Member] | ||||||||
Capital Stock Activity (Details) [Line Items] | ||||||||
Convertable shares | 773 | |||||||
Converted common stock | 3,865,000 | |||||||
Stock description | The Company had 1,000 and 1,000 shares of its $0.001 par value preferred Series A stock issued and outstanding as of December 31, 2021, and June 30, 2021, respectively. | |||||||
Series A Preferred Stock [Member] | ||||||||
Capital Stock Activity (Details) [Line Items] | ||||||||
Preferred stock, shares authorized | 1,000,000 | |||||||
Designated shares | 10,000 | |||||||
Voting shares | 100,000 | |||||||
Preferred stock, shares issued | 1,000 | 1,000 | 1,000 | |||||
Preferred stock, shares outstanding | 1,000 | 1,000 | 1,000 | |||||
Series A Preferred Stock [Member] | Preferred Stock [Member] | ||||||||
Capital Stock Activity (Details) [Line Items] | ||||||||
Preferred stock, shares authorized | 1,000,000 | |||||||
Preferred stock, par value (in Dollars per share) | $ 0.001 | |||||||
Series A Preferred Stock [Member] | Mr. Folkson [Member] | ||||||||
Capital Stock Activity (Details) [Line Items] | ||||||||
Voting shares | 1,000 | |||||||
Aggregate voting shares | 100,000,000 |
Warrants (Details)
Warrants (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |
Dec. 31, 2021 | Sep. 30, 2021 | Dec. 31, 2021 | |
Warrants (Details) [Line Items] | |||
Warrants issued | 878,260 | 500,000 | |
Volatility | 143.39% | 107.93% | |
Risk-free rate | 1.25% | 0.29% | |
Warrants initial exercise price (in Dollars per share) | $ 0.5 | $ 0.5 | |
Warrants and Rights Outstanding, Term | 5 years | 5 years | |
Aggregate intrinsic value of the warrants (in Dollars) | $ 297,500 | $ 297,500 | |
Additional paid in capital (in Dollars) | 68,722 | ||
Retained earnings (in Dollars) | $ 68,722 | $ 68,722 | |
Convertible Notes [Member] | |||
Warrants (Details) [Line Items] | |||
Warrants issued | 4,000,000 | ||
Warrant [Member] | |||
Warrants (Details) [Line Items] | |||
Warrants, description | as a result of the convertible note financing, we completed in December 2021 which would allow the new noteholders to convert their debt to shares of common stock at an exercise price of $.25/share, some of the $.30 warrants outstanding in the table above had their exercise price reduced from $.30 to $.2952. This reduction of less than half a penny in the exercise price of the 25,000,000 warrants associated with our Class B Preferred stock would result in proceeds to the Company of $7,380,000 rather than $7,500,000 should all those warrants be exercised. | ||
Series B Preferred Stock [Member] | |||
Warrants (Details) [Line Items] | |||
Converted shares | 392 | 773 | |
Common stock, shares | 1,960,000 | 3,865,000 | |
Warrants issued | 1,960,000 | 3,865,000 |
Warrants (Details) - Schedule o
Warrants (Details) - Schedule of outstanding common stock purchase warrants | 6 Months Ended |
Dec. 31, 2021$ / sharesshares | |
Class of Warrant or Right [Line Items] | |
Outstanding at Beginning Balance | 8,050,000 |
Issued in FY 2022 | 10,703,260 |
Expired | 400,000 |
Outstanding at Ending Balance | 18,353,260 |
0.01 [Member] | Warrant [Member] | |
Class of Warrant or Right [Line Items] | |
Exercise Price (in Dollars per share) | $ / shares | $ 0.01 |
Outstanding at Beginning Balance | 1,600,000 |
Expired | |
Outstanding at Ending Balance | 1,600,000 |
0.15 [Member] | Warrant [Member] | |
Class of Warrant or Right [Line Items] | |
Exercise Price (in Dollars per share) | $ / shares | $ 0.15 |
Outstanding at Beginning Balance | 500,000 |
Expired | |
Outstanding at Ending Balance | 500,000 |
0.20 [Member] | Warrant [Member] | |
Class of Warrant or Right [Line Items] | |
Exercise Price (in Dollars per share) | $ / shares | $ 0.2 |
Outstanding at Beginning Balance | 2,250,000 |
Expired | |
Outstanding at Ending Balance | 2,250,000 |
0.25 [Member] | Warrant [Member] | |
Class of Warrant or Right [Line Items] | |
Exercise Price (in Dollars per share) | $ / shares | $ 0.25 |
Issued in FY 2022 | 4,878,260 |
Outstanding at Ending Balance | 4,878,260 |
0.30 [Member] | Warrant [Member] | |
Class of Warrant or Right [Line Items] | |
Exercise Price (in Dollars per share) | $ / shares | $ 0.3 |
Outstanding at Beginning Balance | 2,650,000 |
Issued in FY 2022 | 5,825,000 |
Expired | |
Outstanding at Ending Balance | 8,475,000 |
0.40 [Member] | Warrant [Member] | |
Class of Warrant or Right [Line Items] | |
Exercise Price (in Dollars per share) | $ / shares | $ 0.4 |
Outstanding at Beginning Balance | 150,000 |
Expired | |
Outstanding at Ending Balance | 150,000 |
0.50 [Member] | Warrant [Member] | |
Class of Warrant or Right [Line Items] | |
Exercise Price (in Dollars per share) | $ / shares | $ 0.5 |
Outstanding at Beginning Balance | 500,000 |
Expired | |
Outstanding at Ending Balance | 500,000 |
0.75 [Member] | Warrant [Member] | |
Class of Warrant or Right [Line Items] | |
Exercise Price (in Dollars per share) | $ / shares | $ 0.75 |
Outstanding at Beginning Balance | 300,000 |
Expired | 300,000 |
Outstanding at Ending Balance | |
1.00 [Member] | Warrant [Member] | |
Class of Warrant or Right [Line Items] | |
Exercise Price (in Dollars per share) | $ / shares | $ 1 |
Outstanding at Beginning Balance | 100,000 |
Expired | 100,000 |
Outstanding at Ending Balance |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | Jan. 01, 2022 | Dec. 31, 2021 |
Commitments and Contingencies (Details) [Line Items] | ||
Warrants issued (in Shares) | 500,000 | |
Mr. Folkson [Member] | ||
Commitments and Contingencies (Details) [Line Items] | ||
Gross sales | $ 3,000,000 | |
Consulting rate | 6,000 | |
Adjusted consulting rate | $ 12,000 | |
CEO Sean Folkson [Member] | Subsequent Event [Member] | ||
Commitments and Contingencies (Details) [Line Items] | ||
Purchase warrants of common stock (in Shares) | 1,000,000 | |
Descriptions of debt incentive agreement | Company record its first quarter with revenues over $1,000,000, an additional 3,000,000 warrants with a $.50 strike price when the Company records its first quarter with revenues over $3,000,000, and an additional 5,000,000 warrants with a $1 strike price when the Company records its first quarter with revenues over $5,000,000. Mr. Folkson will also be awarded 500,000 warrants with a strike price of $.50 should the Company enter into a product development or distribution partnership with a multi-national food & beverage conglomerate during the twelve-month term of the Agreement, and 1,000,000 Warrants with a $.50 strike price should the Company and its subsidiaries on a consolidated basis generate $1,000,000 or more in Net Revenue through sales of product through “non-traditional” retail channels, such as hotels and college campuses, during the twelve-month term of this agreement. As of December 31, 2021, those conditions were not met and therefore nothing was accrued related to this arrangement. |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | Dec. 08, 2017 | Dec. 31, 2021 | Dec. 31, 2021 | Mar. 31, 2015 | Dec. 31, 2021 |
Related Party Transactions (Details) [Line Items] | |||||
Accrued expenses related party | $ 0 | $ 9,974 | |||
Related party transaction, description | the Company made bonuses available to Mr. Folkson upon the Company hitting certain revenue milestones of $1,000,000 in a quarter, $3,000,000 in a quarter, and $5,000,000 in a quarter. Achieving those milestones would earn Mr. Folkson warrants with a $.50 and $1.00 strike price which would need to be exercised within 90 days of the respective quarterly or annual filing. | ||||
Mr. Folkson [Member] | |||||
Related Party Transactions (Details) [Line Items] | |||||
Consulting fee | $ 12,000 | $ 6,000 | |||
Professional fees | $ 18,000 | $ 36,000 | |||
Warrants to acquire of shares (in Shares) | 80,000 | ||||
Sale of stock, description | During the second quarter 2019 Mr. Folkson purchased 400,000 shares of stock at a price of $0.30 per share, valued at $120,000 which was charged to his accrual. |
Subsequent Events (Details)
Subsequent Events (Details) | 1 Months Ended | 6 Months Ended | |
Jan. 28, 2022 | Jan. 20, 2022 | Dec. 31, 2021 | |
Subsequent Events (Details) [Line Items] | |||
Subsequent event, description | Subsequent to December 31, 2021, holders of Company Series B Preferred Stock converted an aggregate of 425 Class B Shares into 2,125,000 shares of Company common stock. | ||
Spencer Clarke Management LLC [Member] | Subsequent Event [Member] | |||
Subsequent Events (Details) [Line Items] | |||
Subsequent event, description | Spencer Clarke Management LLC exercised 1,600,000 warrants for Company common stock at an exercise price of $.01 per share. 360,000 of these warrants were earned by the recipient in February 2021 and the balance of 1,240,000 in April of 2021 as a result of Spencer Clarke assisting the Company in successfully closing the Company’s Class B Preferred financing round that month. | ||
Mr. Folkson [Member] | Subsequent Event [Member] | |||
Subsequent Events (Details) [Line Items] | |||
Subsequent event, description | the Company entered into an Agreement For Shareholder Lock-Up And Acquisition of Warrants (the “Lock-Up Agreement”), with its Chairman, CEO and largest shareholder, Sean Folkson. For purposes of the Lock-Up Agreement, Mr. Folkson is the direct or indirect owner of 16,776,644 share of the Company’s common stock (the “Shares”), and Mr. Folkson has agreed to not transfer, sell, or otherwise dispose of any Shares through February 4, 2023. | ||
Lock-Up Agreement [Member] | Subsequent Event [Member] | |||
Subsequent Events (Details) [Line Items] | |||
Subsequent event, description | warrants to acquire 400,000 shares of Company common stock at an exercise price of $.30 per share, which warrants carry a twelve month term and a cashless provision, and will expire if not exercised within the twelve month term. |