Cover
Cover - USD ($) | 12 Months Ended | ||
Jun. 30, 2022 | Sep. 19, 2022 | Dec. 31, 2021 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Jun. 30, 2022 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2022 | ||
Current Fiscal Year End Date | --06-30 | ||
Entity File Number | 333-198524 | ||
Entity Registrant Name | FRONTERA GROUP INC. | ||
Entity Central Index Key | 0001602813 | ||
Entity Tax Identification Number | 46-4429598 | ||
Entity Incorporation, State or Country Code | NV | ||
Entity Address, Address Line One | 701 S Carson Street | ||
Entity Address, Address Line Two | Suite 200 | ||
Entity Address, City or Town | Carson City | ||
Entity Address, State or Province | NV | ||
Entity Address, Postal Zip Code | 89701 | ||
City Area Code | 909 | ||
Local Phone Number | 374-5750 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 21,084,422 | ||
Entity Common Stock, Shares Outstanding | 77,396,815 | ||
Auditor Name | Victor Mokuolu, CPA PLLC | ||
Auditor Firm ID | 6771 | ||
Auditor Location | Houston, Texas |
BALANCE SHEETS
BALANCE SHEETS - USD ($) | Jun. 30, 2022 | Jun. 30, 2021 |
Current Assets: | ||
Cash | $ 1,648 | |
Accounts receivable | 372,690 | |
Total current assets | 374,338 | |
Non-Current Assets: | ||
Patents, net | 4,937,500 | |
Total Assets | 5,311,838 | 0 |
Current Liabilities: | ||
Accounts payable | 439,363 | 18,357 |
Accrued liabilities | 4,886,612 | |
Accrued interest | 3,667 | |
Convertible notes payable | 300,000 | |
Discount on convertible notes | (264,630) | |
Total current liabilities | 5,365,012 | 18,357 |
Non-Current Liabilities: | ||
Derivative liabilities | 1,087,784 | |
Total Liabilities | 6,452,796 | 18,357 |
Shareholders’ (Deficit) | ||
Preferred stock, par value $0.00001 per share: 5,000,000 shares authorized; Series A Preferred stock, par value $0.00001 per share: none authorized and outstanding at June 30, 2022 and 2021 | ||
Common stock, par value $0.00001 per share: 990,000,000 shares authorized; 47,563,483 shares issued and outstanding at June 30, 2022; 307,280,150 shares issued and outstanding at June 30, 2021 | 476 | 3,073 |
Additional paid-in-capital | 314,893 | 125,300 |
Deficit | (1,456,327) | (146,730) |
Total shareholders’ (deficit) | (1,140,958) | (18,357) |
Total Liabilities and Shareholders’ (Deficit) | $ 5,311,838 | $ 0 |
BALANCE SHEETS (Parenthetical)
BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2022 | Jun. 30, 2021 |
Preferred Stock, Par Value | $ 0.00001 | $ 0.00001 |
Preferred Stock, Shares Authorized | 5,000,000 | 5,000,000 |
Common Stock, Par Value | $ 0.00001 | $ 0.00001 |
Common Stock, Shares Authorized | 990,000,000 | 990,000,000 |
Common Stock, Shares, Issued | 47,563,483 | 307,280,150 |
Common Stock, Shares, Outstanding | 47,563,483 | 307,280,150 |
Series A Preferred Stock [Member] | ||
Preferred Stock, Par Value | $ 0.00001 | $ 0.00001 |
Preferred Stock, Shares Authorized | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
STATEMENTS OF OPERATIONS
STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Income Statement [Abstract] | ||
Revenue | $ 372,690 | |
Cost of revenue | 419,350 | |
Gross profit | (46,660) | |
Operating expenses: | ||
General and administrative expenses | 411,487 | |
Other (income) expenses: | ||
Interest expense | 885,229 | |
(Gain) loss on fair value of derivatives | (22,825) | |
Miscellaneous income | (1) | |
Total other (income) expense | 862,403 | |
Loss before income tax benefit | (1,320,550) | |
Income tax benefit | ||
Net loss | $ (1,320,550) | |
Net loss per common share: | ||
Basic and Diluted | $ (0.01) | |
Weighted-average common shares outstanding: | ||
Basic and Diluted | 103,579,487 | 307,280,150 |
STATEMENTS OF CASH FLOWS
STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Operating Activities: | ||
Net (loss) | $ (1,320,550) | |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Change in value of derivative liability | 1,704,716 | |
Depreciation and amortization | 62,500 | |
Non-cash interest | (881,562) | |
Other | 10,954 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (372,690) | |
Accounts payable | 421,005 | |
Accrued liabilities | (109,721) | |
Net Cash (Used In) Operating Activities | (485,348) | |
Financing Activities: | ||
Proceeds from convertible notes | 300,000 | |
Issuance of common shares | 186,996 | |
Net Cash (Used In) Financing Activities | 486,996 | |
Net Change in Cash | 1,648 | |
Cash – Beginning of Period | ||
Cash – End of Period | $ 1,648 |
STATEMENTS OF SHAREHOLDERS' EQU
STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Beginning balance, value at Jun. 30, 2020 | $ 3,073 | $ 125,300 | $ (146,730) | $ (18,357) |
Beginning Balance, Shares at Jun. 30, 2020 | 307,280,150 | |||
Net Income | ||||
Ending balance, value at Jun. 30, 2021 | $ 3,073 | 125,300 | (146,730) | (18,357) |
Ending Balance, Shares at Jun. 30, 2021 | 307,280,150 | |||
Net Income | (1,320,550) | (1,320,550) | ||
Cancellation of shares | $ (3,000) | 3,000 | ||
Cancellation of Shares, Shares | (300,000,000) | |||
Adj to Retained Earnings | 10,953 | 10,953 | ||
Issuance of new shares | $ 385 | 186,611 | 186,996 | |
Issuance of New Shares, Shares | 38,533,333 | |||
Issuance of new shares – loan inducement | $ 18 | (18) | ||
Issuance of new shares - loan inducement, Shares | 1,750,000 | |||
Ending balance, value at Jun. 30, 2022 | $ 476 | $ 314,893 | $ (1,456,327) | $ (1,140,958) |
Ending Balance, Shares at Jun. 30, 2022 | 47,563,483 |
Organization and Operations
Organization and Operations | 12 Months Ended |
Jun. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Operations | Note 1 – Organization and Operations Frontera Group Inc. (the Company, Frontera, we, our, us) was incorporated under the laws of the State of Nevada on November 21, 2013. Frontera Group Inc. strategically acquires revenue generating companies and intellectual property in low-multiple, mature industries within the technology and human capital spaces. With an aggressive four-tier acquisition and implementation strategy, Fronters overarching goal is to bring substantial increases in profitability to mature industries with traditionally low and stagnant EBITA multiples. Frontera creates revenue streams through subscriptions, licensing agreements and data analytics, while growing EBITA by leveraging synergistic acquisitions that maximize scalability. On May 11, 2022, Immersient IP, LLC (Immersient) was formed and registered in the State of Nevada. Immersient is a wholly-owned subsidiary of Frontera Group, Inc. Immersient was formed to hold all intellectual property acquired by Frontera. All operations are derived from Immersient. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2 – Summary of Significant Accounting Policies Basis of Presentation and Principles of Consolidation The accompanying financial statements have been prepared using the accrual basis in accordance with accounting principles generally accepted in the United States of America (GAAP) as determined by the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) and pursuant to the regulations of the U.S. Securities and Exchange Commission (SEC). The consolidated financial statements include the accounts of the Company and its controlled subsidiaries. All intercompany transactions and balances have been eliminated. Use of Estimates and Assumptions The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that impact the amounts reported in the consolidated financial statements and accompanying notes. Significant estimates include, but are not limited to, the recognition of revenues and expenses, the valuation of intangible assets, including amortization, the valuation of derivatives, and the valuation of the warrant issued. We base these estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgements about the carrying amounts of assets and liabilities. Actual results could differ from those estimates. Cash and Cash Equivalents We consider all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. Accounts Receivable and Expected Credit Losses Our receivables primarily arise from the billing of royalties for the use of our intellectual property (IP). We currently have one royalty agreement in place. We estimate expected credit losses based on factors such as the composition of accounts receivable, the age of the accounts, historical bad debt experience, and our evaluation of the financial condition and past collection history of each customer. Management believes that the historical loss information it has compiled is a reasonable base on which to determine expected credit losses for trade receivables held at June 30, 2022, because the composition of the trade receivables at that date is consistent with that used in developing the historical credit-loss percentages (i.e., the similar risk characteristics of its customers and its credit practices have not changed significantly over time). Intangible Assets Intangible assets deemed to have finite lives are generally amortized on a straight-line basis over their estimated useful lives, where the useful life is the period over which the asset is expected to contribute directly, or indirectly, to our future cash flows. Fair Value of Financial Instruments We measure the fair value of financial assets and liabilities based on the guidance of ASC 820 Fair Value Measurements and Disclosures which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. ASC 820 defines fair value as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value as follows: ● Level 1 – quoted prices in active markets for identical assets or liabilities ● Level 2 – inputs other than quoted prices in level 1 that are observable either directly or indirectly. ● Level 3 – inputs based on prices or valuation techniques that are both unobservable and significant to the fair value markets. The conversion option on the Note and the Warrant are required to be presented at fair value on a recurring basis. Carrying values of non-derivative financial instruments, including cash, accounts receivable, accounts payable, and short-term debt approximated their fair value due to the short maturity of these financial instruments. There were no changes in methods or assumptions during the periods presented. Derivative Instruments Convertible Note and Common Stock Warrant Liability On March 11, 2022, we issued a convertible note (the Note) with warrant (Warrant) with default and fundamental transaction adjustment; variable rate default provision; and full reset features. The Note is a 10% $300,000 promissory note which is convertible upon an event of default. The Warrant gives the holder the right to purchase 1,000,000 shares of our Common Stock at an exercise price of $0.50. We shall not affect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, to the extent that after giving effect to issuance of Warrant Shares upon exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holders Affiliates, and any other persons acting as a group together with the Holder or any of the Holders Affiliates), would beneficially own in excess of 4.99% of the number of shares of Common Stock outstanding immediately after the giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Warrant will expire on March 11, 2027 and may be assigned by the holder to a third party, in whole or in part, without the need to obtain our consent thereto. This Warrant remained outstanding as of June 30, 2022. We evaluated the conversion option of the Note and the Warrant under ASC 815, Derivatives and Hedging—Contracts in Entitys Own Equity Derivatives and Hedging—Contracts in Entitys Own Equity Determining Whether an Instrument (or Embedded Feature) is Indexed to an Entitys Own Stock Revenue Recognition Our primary source of revenues is from the development and licensing of our IP to our customers. Revenues are presented net of any taxes that are collected from our customers and remitted to governmental authorities. We are the principal in all our relationships with our customers. At contract inception, we assess the goods and services promised in our contracts with customers and identify a performance obligation for each promise to transfer to the customer a good or service (or bundle of goods or services) that is distinct. The performance obligation in all of our contracts with customers is to provide them a license to use our IP. Because our customers are granted a right to access the IP, including new patents, we recognize revenues ratably over the term of the agreement. As of June 30, 2022, we have one customer to whom we license our IP. Advertising and Marketing Advertising and marketing costs for promoting our corporate image as incurred and included in general and administrative expenses. Income Taxes We account accounts for income taxes under ASC 740, Income Taxes. Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. 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 effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations. Tax benefits related to uncertain tax positions are recognized when it is more likely than not that a tax position will be sustained during an audit. Interest and penalties, if any, related to unrecognized tax benefits are included within the provision for income tax. Earnings (loss) per Share Earnings (loss) Per Share (EPS) is the amount of earnings (loss) attributable to each share of Common Stock. EPS is computed pursuant to section 260-10-45 of the Financial Accounting Standards Board (FASB) Accounting Standards Codification. Pursuant to Accounting Standards Codification (ASC) Paragraphs 260-10-45-10 through 260-10-45-16, basic EPS is computed by dividing net income (loss) available to common shareholders (the numerator) by the weighted-average number of common shares outstanding (the denominator) during the period. The computation of diluted EPS is similar to the computation of basic EPS except that the denominator is increased to include the number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued during the period to reflect the potential dilution that could occur from common shares issuable through contingent shares issuance arrangements, stock options or warrants. When we have a loss, dilutive shares are not included as they would be antidilutive. The following table shows the computation of basic and diluted earnings (loss) per share for the years ended June 30, 2022 and 2021: Schedule of Basic and Diluted Earnings (Loss) Per Share Years Ended June 30, 2022 2021 Numerator: Net income (loss) $ (1,320,550 ) $ — Denominator: Weighted-average basic shares outstanding 103,579,487 307,280,150 Basic and Diluted earnings per share $ (0.01 ) $ — We apply the treasury stock method to determine the dilutive effect of potentially dilute securities. Potentially dilutive securities representing 382,716 Recently Issued Accounting Pronouncements Convertible Instruments Debt—Debt With Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entitys Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entitys Own Equity |
Going Concern
Going Concern | 12 Months Ended |
Jun. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern | Note 3 – Going Concern As reflected in the accompanying financial statements, we have a deficit of $ 1,456,327 1,320,550 485,348 We are attempting to commence operations and generate sufficient revenue; however, our cash position is not sufficient to support our daily operations. Management intends to raise additional funds by way of a private or public offering. While we believe in the viability of its strategy to commence operations and generate sufficient revenue and in its ability to raise additional funds, there can be no assurances to that effect. Our ability to continue as a going concern is dependent upon our ability to further implement its business plan and generate sufficient revenue and its ability to raise additional funds by way of a public or private offering. The accompanying financial statements have been prepared assuming that we will continue as a going concern. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of asset or the amounts and classification of liabilities that might be necessary if we are unable to continue as a going concern. |
Intangible Assets
Intangible Assets | 12 Months Ended |
Jun. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Note 4 – Intangible Assets In March 2022, we purchased intellectual property (IP) consisting of patents, trademarks, copyrights and domain names for $ 5,000,000 Intellimedia India, an India entity (not related to Intellimedia Networks, Inc.) had licensed the use of this IP to third parties and we receive the benefit of these arrangements through the acquisition of the IP. We will continue to use Intellimedia India for the further development and maintenance of this IP in the future and currently, they are our only vendor for costs of revenue. We began amortizing these patents over their useful life of twenty years during the three months ended June 30, 2022. We will recognize $250,000 of amortization expense in each of the next five years. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Jun. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 5 – Fair Value Measurements Our financial assets and liabilities subject to fair value measurements on a recurring basis and the level of inputs used for such measurements were as follows: Schedule of Fair Value Measurement on Recurring Basis June 30, 2022 Level 1 Level 2 Level 3 Liabilities Warrant $ — $ — $ 890,603 Total Liabilities $ — $ — $ 890,603 Fair values of cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses approximate the recorded value due to the short period of time to maturity. The Companys Warrant is classified within Level 3 of the fair value hierarchy because its fair value is based on significant inputs that are unobservable in the market. The valuation of the Warrant uses assumptions and estimates we believe would be made by a market participant in making the same valuations. We assess these assumptions and estimates on an on-going basis as additional data impacting the assumptions and estimates are obtained. We determined the fair value of the Warrant using Monte Carlo option-pricing models and the quoted price of our Common Stock. The Monte Carlo technique applied generates many possible (but random) price paths for the underlying (or underlyings) via simulation, and then calculates the associated payment value of the derivative features. The price of the underlying Common Stock is modeled such that it follows a geometric Brownian motion with constant drift, and constant volatility. The stock price is determined by a random sampling from a normal distribution. Since the underlying random process is the same, for enough price paths, the value of derivative is derived from path dependent scenarios and outcomes. The features in the notes that were analyzed and incorporated into the model included the only the default provisions. The features in the warrants that were analyzed and incorporated into the model included the exercise features (including a call option) and the full ratchet reset provisions. ● Based on the instruments features, there are six primary events that could occur: payments are made in cash; payments are made with stock; the Holder converts the note; the Issuer redeems the note; a reset or default event occurs; or we default on the Note. ● There are four primary events that can occur in the Warrants; the Holder exercises the option at maturity; a reset or default event occurs adjusting the exercise price and the number of options; or the warrant expires. The model simulates the underlying economic factors that influenced which of these events would occur, when they were likely to occur, and the specific terms that would be in effect at the time (i.e., stock price, conversion price, etc.). Probabilities were assigned to each variable such as the timing and pricing of events (future financings – potential resets, fundamental transaction, exercise, redemption, and default) over the remaining term of the instruments based on management projections. The following table present significant assumptions utilized in the valuation of the Warrant at the issuance date of March 11, 2022 and June 30, 2022. Schedule of Significant Assumptions Utilized in the Valuation As of March 11, 2022 As of June 30, 2022 Risk-free rate 1.11 % 2.39 % Volatility 137.8 % 136.9 % Contractual term (in years) 1.0 0.7 Exercise price $ 0.050 $ 0.050 For the year ended June 30, 2022, the change in the fair value of the Warrant resulted from the change in price of our Common Stock. The changes in fair value are included in the consolidated statements of operations as a component of change in fair value of warrant liabilities and in the consolidated balance sheets as other liabilities. |
Accrued Liabilities
Accrued Liabilities | 12 Months Ended |
Jun. 30, 2022 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | Note 6 – Accrued Liabilities Accrued liabilities at June 30, 2022 primarily consisted of accrued interest of $ 3,667 |
Convertible Notes Payable and W
Convertible Notes Payable and Warrants | 12 Months Ended |
Jun. 30, 2022 | |
Convertible Notes Payable And Warrants | |
Convertible Notes Payable and Warrants | Note 7 – Convertible Notes Payable and Warrants On March 11, 2022, we entered into a Securities Purchase Agreement (collectively, the Purchase Agreement) with AJB Capital Investments LLC (the Investor), for the sale of a convertible promissory note with a principal amount of $ 300,000 We entered into an agreement for a convertible note and warrants with AJB Capital Fund for $300,000 with a 6-month maturity due and maturing on September 11, 2022 and 1,000,000 options at $0.50 with the following terms: 1. Interest rate of 10% increasing to 12% after 6 months; and 18% default rate; 2. Conversion prices subject to adjustment as the result of a dilutive issuance (a Full Reset provision); and convertible upon default at variable rates. 3. The Company received $270,000 in cash proceeds, recording an original issue discount of $30,000. 4. Six months after the issue date, the principal and interest are convertible into our Common Stock at a. 100% of the 20-day trading low at a 6-month default (the initial default) and b. 40% of trading low from issuance at 9 months (the toxic default). 5. Included is a warrant issued to acquire 1,000,000 common shares at an exercise price of $0.50 per share, (subject to adjustment as the result of a fundamental transaction), and a 5-year maturity. |
Common Stock Warrant Liability
Common Stock Warrant Liability | 12 Months Ended |
Jun. 30, 2022 | |
Common Stock Warrant Liability | |
Common Stock Warrant Liability | Note 8 – Common Stock Warrant Liability The Warrant was recorded at fair value as other long-term liabilities in the consolidated balance sheets. The fair value of the Warrant was remeasured as of June 30, 2022, resulting in a $22,285 non-cash change in fair value gain in the consolidated statements of operations for the three months ended June 30, 2022. |
Shareholders_ Deficit
Shareholders’ Deficit | 12 Months Ended |
Jun. 30, 2022 | |
Equity [Abstract] | |
Shareholders’ Deficit | Note 9– Shareholders Deficit Shares authorized Upon formation, the total number of shares of all classes of stock which the Company was authorized to issue seventy-five million ( 75,000,000 0.001 1,000,000,000 0.00001 Common Shares Holders of Common Stock have no preemptive rights to purchase additional shares of Common Stock or other subscription rights. The Common Stock carries no conversion rights and is not subject to redemption or to any sinking fund provisions. All shares of Common Stock are entitled to share equally in dividends from sources legally available; therefore, when, as and if declared by the Board of Directors, and upon liquidation or dissolution of Frontera, whether voluntary or involuntary, to share equally in the assets of Frontera available for distribution to shareholders. The Board of Directors is authorized to issue additional shares of Common Stock not to exceed the amount authorized by Fronteras Articles of Incorporation, on such terms and conditions and for such consideration as the Board may deem appropriate without further shareholder action. Voting Rights of Common Shares Each holder of Common Stock is entitled to one vote per share on all matters on which such shareholders are entitled to vote. Since the shares of Common Stock do not have cumulative voting rights, the holders of more than 50% of the shares voting for the election of Directors can elect all the Directors if they choose to do so and, in such event, the holders of the remaining shares will not be able to elect any person to the Board of Directors. Dividend Policy for Common Shares Holders of our Common Stock are entitled to dividends if declared by the Board of Directors out of funds legally available. We do not anticipate the declaration or payment of any dividends in the foreseeable future. We intend to retain earnings, if any, to finance the development and expansion of our business. Future dividend policy will be subject to the discretion of the Board of Directors and will be contingent upon future earnings, if any, financial condition, capital requirements, general business conditions, and other factors. Therefore, there can be no assurance that any dividends of any kind will ever be paid. Preferred Shares Shares of Preferred Stock may be issued in one or more series. The number of shares included in any series of Preferred Stock and the full or limited voting rights, if any, the cumulative or non-cumulative dividend rights, if any, the conversion, redemption or sinking fund rights, if any and the priorities, preferences and relative, participating, optional and other special rights, if any, in respect of the Preferred Stock, any series of Preferred Stock or any rights pertaining thereto, and the qualification, limitations or restrictions on the Preferred Stock, any series of Preferred Stock or any rights pertaining thereto, shall be those set forth in the resolution or resolutions providing for the issuance of the Preferred Stock or such series of Preferred Stock adopted at any time and from time to time by the board of directors of the Corporation (the Board) and filed with the Secretary of State of the State of Nevada. The holders of Series A Preferred Stock shall have the right to transfer each share of the Series A Preferred Stock to any third party at any time in such holders sole and absolute discretion, subject to compliance with applicable securities laws. Preferred Stock is not convertible. Series A Preferred Stock Voting Rights of Series A Preferred Stock The holders of Series A Preferred Stock shall be entitle to two hundred (200) votes per share of Series A Preferred Stock. Dividend Policy for Series A Preferred Stock The holders of Series A Preferred Stock is not entitled to any dividend. |
Income Tax Provision
Income Tax Provision | 12 Months Ended |
Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Tax Provision | Note 10 – Income Tax Provision Deferred Tax Assets We operate in the United States; accordingly, federal and state income taxes have been provided based upon the tax laws and rates of the United States deferred taxes are determined based on the temporary differences between the financial statement and income tax bases of assets and liabilities as measured by the enacted tax rates, which will be in effect when these differences reverse. We are subject to United States income taxes at a rate of 21%. The reconciliation of the provision for income taxes at the United States statutory rate compared to our income tax expense as reported is as follows: Schedule of Income Tax Reconciliation For the Period Income tax benefit at statutory tax rate (305,829 ) Change in valuation allowance 305,829 Income tax expense (benefit) $ — The following tables set forth the components of deferred income taxes as of June 30, 2022: Schedule of Deferred Income Taxes Deferred tax assets: Net operating loss carryforwards 305,829 Less: valuation allowance (305,829 ) Total deferred tax asset $ — As of June 30, 2022, we had federal, state, and local net operating loss carryforwards of $305,829 that are available to offset future liabilities for income taxes. We have generally established a valuation allowance against these carryforwards based on an assessment that it is more likely than not that these benefits will not be realized in future years. We are currently not subject to examination in federal, state, and local jurisdictions in which we conduct our operations and files tax returns. We have made an assessment of the level of tax authority for each tax position (including the potential application of interest and penalties) based on the technical merits and determined that no unrecognized tax benefits associated with the tax positions exist |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Jun. 30, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 11 – Related Party Transactions In March 2022, we purchased intellectual property (IP) consisting of patents, trademarks, copyrights and domain names for $5,000,000 from Intellimedia Networks, Inc. (IMNI), a U.S. corporation. Mr. Gessesse and Mr. Sedani were employed by IMNI at the time of this purchase. They became employees of Frontera on July 22, 2022 (see Note 12 – Subsequent Events Mr. De Luna and Mr. Toussaint are co-owners of Bayou Moon Capital (Bayou Moon). Bayou Moon sent Frontera $5,000 on June 30, 2022 for working capital purposes. This balance due to Bayou Moon is included in accrued liabilities on our Consolidated Balance Sheet as of June 30, 2022. Mr. Toussaint sent Frontera $3,500 on June 30, 2022 for working capital purposes. This balance due to Mr. Toussaint is included in accrued liabilities on our Consolidated Balance Sheet as of June 30, 2022. The following table sets forth certain information regarding beneficial ownership of our Common and Series A Preferred Stock as of June 30, 2022 by each person or entity known by us to beneficially own more than five percent (5%) of any class of our outstanding shares. There are 18,750,000 shares of our Common Stock held by our Chairman of the Board. There are 5,000,000 shares of our Series A Preferred Stock held by a company under direct control of our officers or directors. As of June 30, 2022, there were 47,563,483 shares of our Common Stock outstanding and 5,000,000 shares of our Series A Preferred Stock outstanding: Title of Class Name of Beneficial Amount and Nature Percentage of Common (1) Mann Yam 18,750,000 24.2% Bin Zhou 18,750,000 24.2% Total 37,500,000 48.4% (1) Applicable percentage of ownership is based on 77,396,815 shares of Common Stock outstanding on September 19, 2022. Percentage ownership is determined based on shares owned together with securities exercisable or convertible into shares of Common Stock within 60 days of September 19, 2022, for each shareholder. Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Shares of Common Stock subject to securities exercisable or convertible into shares of Common Stock that are currently exercisable or exercisable within 60 days of September 19, 2022, are deemed to be beneficially owned by the person holding such securities for the purpose of computing the percentage of ownership of such person but are not treated as outstanding for the purpose of computing the percentage ownership of any other person. Common Stockholders are entitled to 1 voting right per share. We have evaluated all events that occurred after the balance sheet date through the date when the financial statements were issued to determine if they must be reported. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Jun. 30, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 12 – Subsequent Events We have evaluated all events that occurred after the balance sheet date through the date when the financial statements were issued to determine if they must be reported. In connection with the Purchase Agreement, the Company entered into employment agreements with Mr. Gessesse and Mr. Sedani dated July 22, 2022 (the Employment Agreements) for an initial term of three (3) years (the Initial Term), commencing on the date of execution of the agreement which will automatically renew thereafter for successive terms of one (1) year each (each, a Renewal Term), unless one of the parties gives written notice of termination to the other party at least sixty (60) days prior to the last day of the Initial Term or the then-current Renewal Term, as applicable. Both Mr. Gessesses and Mr. Sedanis initial annual base salary will be $150,000. Each of Mr. Gessesse and Mr. Sedani will be eligible to receive a quarterly bonus as determined by, and within the sole discretion of, the Companys board of directors (the Board) and Mr. Gessesse and Mr. Sedani were granted 23,500,000 and 31,500,000 shares, respectively, of the Companys common stock valued at $0.25 per share. With respect to 2022 and subsequent calendar years, both Mr. Gessesse and Mr. Sedani will be eligible to receive additional equity incentive award grants of the types, in the amounts and on a basis commensurate with the equity incentive awards granted to similarly-situated executive officers of the Company, as determined from time to time by the Companys Board. Mr. Gessesse and Mr. Sedani will both be eligible to participate in the employee benefits plans generally available to other senior executive officers of the Company. If Mr. Gessesses or Mr. Sedanis employment ceases due to a termination by the Company other than for cause or his resignation with good reason (as such terms are defined in the Employment Agreements), then, subject to his timely execution and non-revocation of a release of claims, he will receive: (i) payment of any otherwise earned but unpaid compensation and benefits through the date of termination; (ii) a lump sum cash payment equal to 12 months of his annual base salary, plus all annual bonuses for the period from the date of termination through the end of the initial term or the then-current renewal term, as applicable; (iii) COBRA premiums until the earliest to occur of the expiration of twelve (12) months following the date of termination, the date he becomes eligible for participation in health and dental plans of another employer, or the date he ceases to be eligible for participation under the Companys health and dental plans under COBRA; and (iv) accelerated vesting of all the outstanding and otherwise unvested equity awards. No family relationship exists between Mr. Gessesse or Mr. Sedani and any of the Companys directors or executive officers. There are no arrangements or understandings between Mr. Gessesse or Mr. Sedani and any other person pursuant to which Mr. Gessesse or Mr. Sedani was selected as an officer of the Company, nor are there any transactions to which the Company is or was a participant and in which Mr. Gessesse or Mr. Sedani had or will have a direct or indirect material interest subject to disclosure under Item 404(a) of Regulation S-K. The foregoing description of the Employment Agreements do not purport to be complete and are subject to, and qualified in their entirety by, the full text of each of the employment agreements, a copy of which is filed as Exhibit 10.2 and 10.3 hereto and is incorporated by reference herein. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The accompanying financial statements have been prepared using the accrual basis in accordance with accounting principles generally accepted in the United States of America (GAAP) as determined by the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) and pursuant to the regulations of the U.S. Securities and Exchange Commission (SEC). The consolidated financial statements include the accounts of the Company and its controlled subsidiaries. All intercompany transactions and balances have been eliminated. |
Use of Estimates and Assumptions | Use of Estimates and Assumptions The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that impact the amounts reported in the consolidated financial statements and accompanying notes. Significant estimates include, but are not limited to, the recognition of revenues and expenses, the valuation of intangible assets, including amortization, the valuation of derivatives, and the valuation of the warrant issued. We base these estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgements about the carrying amounts of assets and liabilities. Actual results could differ from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents We consider all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. |
Accounts Receivable and Expected Credit Losses | Accounts Receivable and Expected Credit Losses Our receivables primarily arise from the billing of royalties for the use of our intellectual property (IP). We currently have one royalty agreement in place. We estimate expected credit losses based on factors such as the composition of accounts receivable, the age of the accounts, historical bad debt experience, and our evaluation of the financial condition and past collection history of each customer. Management believes that the historical loss information it has compiled is a reasonable base on which to determine expected credit losses for trade receivables held at June 30, 2022, because the composition of the trade receivables at that date is consistent with that used in developing the historical credit-loss percentages (i.e., the similar risk characteristics of its customers and its credit practices have not changed significantly over time). |
Intangible Assets | Intangible Assets Intangible assets deemed to have finite lives are generally amortized on a straight-line basis over their estimated useful lives, where the useful life is the period over which the asset is expected to contribute directly, or indirectly, to our future cash flows. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments We measure the fair value of financial assets and liabilities based on the guidance of ASC 820 Fair Value Measurements and Disclosures which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. ASC 820 defines fair value as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value as follows: ● Level 1 – quoted prices in active markets for identical assets or liabilities ● Level 2 – inputs other than quoted prices in level 1 that are observable either directly or indirectly. ● Level 3 – inputs based on prices or valuation techniques that are both unobservable and significant to the fair value markets. The conversion option on the Note and the Warrant are required to be presented at fair value on a recurring basis. Carrying values of non-derivative financial instruments, including cash, accounts receivable, accounts payable, and short-term debt approximated their fair value due to the short maturity of these financial instruments. There were no changes in methods or assumptions during the periods presented. |
Derivative Instruments | Derivative Instruments Convertible Note and Common Stock Warrant Liability On March 11, 2022, we issued a convertible note (the Note) with warrant (Warrant) with default and fundamental transaction adjustment; variable rate default provision; and full reset features. The Note is a 10% $300,000 promissory note which is convertible upon an event of default. The Warrant gives the holder the right to purchase 1,000,000 shares of our Common Stock at an exercise price of $0.50. We shall not affect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, to the extent that after giving effect to issuance of Warrant Shares upon exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holders Affiliates, and any other persons acting as a group together with the Holder or any of the Holders Affiliates), would beneficially own in excess of 4.99% of the number of shares of Common Stock outstanding immediately after the giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The Warrant will expire on March 11, 2027 and may be assigned by the holder to a third party, in whole or in part, without the need to obtain our consent thereto. This Warrant remained outstanding as of June 30, 2022. We evaluated the conversion option of the Note and the Warrant under ASC 815, Derivatives and Hedging—Contracts in Entitys Own Equity Derivatives and Hedging—Contracts in Entitys Own Equity Determining Whether an Instrument (or Embedded Feature) is Indexed to an Entitys Own Stock |
Revenue Recognition | Revenue Recognition Our primary source of revenues is from the development and licensing of our IP to our customers. Revenues are presented net of any taxes that are collected from our customers and remitted to governmental authorities. We are the principal in all our relationships with our customers. At contract inception, we assess the goods and services promised in our contracts with customers and identify a performance obligation for each promise to transfer to the customer a good or service (or bundle of goods or services) that is distinct. The performance obligation in all of our contracts with customers is to provide them a license to use our IP. Because our customers are granted a right to access the IP, including new patents, we recognize revenues ratably over the term of the agreement. As of June 30, 2022, we have one customer to whom we license our IP. |
Advertising and Marketing | Advertising and Marketing Advertising and marketing costs for promoting our corporate image as incurred and included in general and administrative expenses. |
Income Taxes | Income Taxes We account accounts for income taxes under ASC 740, Income Taxes. Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. 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 effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations. Tax benefits related to uncertain tax positions are recognized when it is more likely than not that a tax position will be sustained during an audit. Interest and penalties, if any, related to unrecognized tax benefits are included within the provision for income tax. |
Earnings (loss) per Share | Earnings (loss) per Share Earnings (loss) Per Share (EPS) is the amount of earnings (loss) attributable to each share of Common Stock. EPS is computed pursuant to section 260-10-45 of the Financial Accounting Standards Board (FASB) Accounting Standards Codification. Pursuant to Accounting Standards Codification (ASC) Paragraphs 260-10-45-10 through 260-10-45-16, basic EPS is computed by dividing net income (loss) available to common shareholders (the numerator) by the weighted-average number of common shares outstanding (the denominator) during the period. The computation of diluted EPS is similar to the computation of basic EPS except that the denominator is increased to include the number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued during the period to reflect the potential dilution that could occur from common shares issuable through contingent shares issuance arrangements, stock options or warrants. When we have a loss, dilutive shares are not included as they would be antidilutive. The following table shows the computation of basic and diluted earnings (loss) per share for the years ended June 30, 2022 and 2021: Schedule of Basic and Diluted Earnings (Loss) Per Share Years Ended June 30, 2022 2021 Numerator: Net income (loss) $ (1,320,550 ) $ — Denominator: Weighted-average basic shares outstanding 103,579,487 307,280,150 Basic and Diluted earnings per share $ (0.01 ) $ — We apply the treasury stock method to determine the dilutive effect of potentially dilute securities. Potentially dilutive securities representing 382,716 |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements Convertible Instruments Debt—Debt With Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entitys Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entitys Own Equity |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Schedule of Basic and Diluted Earnings (Loss) Per Share | The following table shows the computation of basic and diluted earnings (loss) per share for the years ended June 30, 2022 and 2021: Schedule of Basic and Diluted Earnings (Loss) Per Share |
Summary of Significant Accounting Policies | Years Ended June 30, 2022 2021 Numerator: Net income (loss) $ (1,320,550 ) $ — Denominator: Weighted-average basic shares outstanding 103,579,487 307,280,150 Basic and Diluted earnings per share $ (0.01 ) $ — |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Jun. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value Measurement on Recurring Basis | Our financial assets and liabilities subject to fair value measurements on a recurring basis and the level of inputs used for such measurements were as follows: Schedule of Fair Value Measurement on Recurring Basis |
Fair Value Measurements | June 30, 2022 Level 1 Level 2 Level 3 Liabilities Warrant $ — $ — $ 890,603 Total Liabilities $ — $ — $ 890,603 |
Schedule of Significant Assumptions Utilized in the Valuation | The following table present significant assumptions utilized in the valuation of the Warrant at the issuance date of March 11, 2022 and June 30, 2022. Schedule of Significant Assumptions Utilized in the Valuation |
Fair Value Measurements (Details 2) | As of March 11, 2022 As of June 30, 2022 Risk-free rate 1.11 % 2.39 % Volatility 137.8 % 136.9 % Contractual term (in years) 1.0 0.7 Exercise price $ 0.050 $ 0.050 |
Income Tax Provision (Tables)
Income Tax Provision (Tables) | 12 Months Ended |
Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Tax Reconciliation | We are subject to United States income taxes at a rate of 21%. The reconciliation of the provision for income taxes at the United States statutory rate compared to our income tax expense as reported is as follows: Schedule of Income Tax Reconciliation |
Income Taxes | For the Period Income tax benefit at statutory tax rate (305,829 ) Change in valuation allowance 305,829 Income tax expense (benefit) $ — |
Schedule of Deferred Income Taxes | The following tables set forth the components of deferred income taxes as of June 30, 2022: Schedule of Deferred Income Taxes |
Income Taxes (Details 2) | Deferred tax assets: Net operating loss carryforwards 305,829 Less: valuation allowance (305,829 ) Total deferred tax asset $ — |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Accounting Policies [Abstract] | ||
Net income (loss) | $ (1,320,550) | |
Weighted-average basic shares outstanding | 103,579,487 | 307,280,150 |
Basic and Diluted earnings per share | $ (0.01) |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details Narrative) | 12 Months Ended |
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Earnings Per Share, Potentially Dilutive Securities | 382,716 |
Going Concern (Details Narrativ
Going Concern (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Retained Earnings (Accumulated Deficit) | $ 1,456,327 | $ 146,730 |
Net Income (Loss) Attributable to Parent | 1,320,550 | |
Net Cash Provided by (Used in) Operating Activities | $ 485,348 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) | 1 Months Ended |
Mar. 31, 2022 USD ($) | |
Intellimedia Networks Inc [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Business Combination, Consideration Transferred | $ 5,000,000 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Fair Value, Recurring [Member] | Jun. 30, 2022 USD ($) |
Fair Value, Inputs, Level 1 [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Total Liabilities | |
Fair Value, Inputs, Level 1 [Member] | Warrant [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Total Liabilities | |
Fair Value, Inputs, Level 2 [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Total Liabilities | |
Fair Value, Inputs, Level 2 [Member] | Warrant [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Total Liabilities | |
Fair Value, Inputs, Level 3 [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Total Liabilities | 890,603 |
Fair Value, Inputs, Level 3 [Member] | Warrant [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Total Liabilities | $ 890,603 |
Accrued Liabilities (Details Na
Accrued Liabilities (Details Narrative) - USD ($) | Jun. 30, 2022 | Jun. 30, 2021 |
Payables and Accruals [Abstract] | ||
[custom:AccruedInterest-0] | $ 3,667 |
Convertible Notes Payable and_2
Convertible Notes Payable and Warrants (Details Narrative) - USD ($) | Jun. 30, 2022 | Mar. 11, 2022 | Jun. 30, 2021 |
Short-Term Debt [Line Items] | |||
Convertible Notes Payable, Current | $ 300,000 | ||
Convertible Notes Payable [Member] | |||
Short-Term Debt [Line Items] | |||
Convertible Notes Payable, Current | $ 300,000 |
Shareholders_ Deficit (Details
Shareholders’ Deficit (Details Narrative) - $ / shares | Jun. 30, 2022 | Jun. 30, 2021 | Feb. 23, 2016 | Nov. 21, 2013 |
Equity [Abstract] | ||||
Common Stock, Shares Authorized | 990,000,000 | 990,000,000 | 1,000,000,000 | 75,000,000 |
Common Stock, Par or Stated Value Per Share | $ 0.00001 | $ 0.00001 | $ 0.00001 | $ 0.001 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Income Tax Disclosure [Abstract] | ||
Income tax benefit at statutory tax rate | $ (305,829) | |
Change in valuation allowance | 305,829 | |
Income tax expense (benefit) |
Income Taxes (Details 2)
Income Taxes (Details 2) | Jun. 30, 2022 USD ($) |
Deferred tax assets: | |
Net operating loss carryforwards | $ 305,829 |
Less: valuation allowance | (305,829) |
Total deferred tax asset |