Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Jun. 30, 2016 | Sep. 28, 2016 | Dec. 31, 2015 | |
Document And Entity Information [Abstract] | |||
Entity Registrant Name | XFIT BRANDS, INC. | ||
Entity Central Index Key | 1,623,554 | ||
Document Type | 10-K | ||
Document Period End Date | Jun. 30, 2016 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --06-30 | ||
Entity a Well-known Seasoned Issuer | No | ||
Entity a Voluntary Filer | No | ||
Entity's Reporting Status Current | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 8,779,169 | ||
Entity Common Stock, Shares Outstanding | 21,742,807 | ||
Trading Symbol | XFTB | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,016 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Jun. 30, 2016 | Jun. 30, 2015 |
Current Assets | ||
Cash | $ 6,829 | $ 51,016 |
Accounts receivable | 179,636 | 92,823 |
Royalties receivable | 75,000 | |
Prepaid expenses | 114,060 | 333,572 |
Inventory | 288,184 | 169,292 |
Total Current Assets | 588,709 | 721,703 |
Property and equipment, net | 37,676 | 42,292 |
Other assets | ||
Deposits | 23,467 | 27,480 |
Intangible assets, net | 13,640 | 52,264 |
TOTAL ASSETS | 663,492 | 843,739 |
Current Liabilities | ||
Accounts payable | 730,026 | 446,063 |
Related party payable | 95,620 | 95,620 |
Accrued expenses | 165,486 | 214,310 |
Customer deposits | 129,201 | 158,467 |
Line of credit | 34,999 | |
Short term financing, net of discounts | 108,333 | |
Total Current Liabilities | 1,263,665 | 914,460 |
Note payable, net | 2,478,720 | 1,620,289 |
Total Liabilities | 3,742,385 | 2,534,749 |
Commitments and contingencies (Note 10) | ||
Stockholders' Deficit | ||
Preferred stock, par value $0.0001 per share, 10,000,000 shares authorized, no shares issued and outstanding as of June 30, 2016 and 2015 | ||
Common stock, $0.0001 par value; 1,250,000,000 shares authorized, 21,192,807 and 20,367,500 shares issued and outstanding as of June 30, 2016 and 2015, respectively | 2,119 | 2,037 |
Additional paid in capital | 4,712,245 | 4,317,444 |
Accumulated deficit | (7,793,257) | (6,010,491) |
Total Stockholders' Deficit | (3,078,893) | (1,691,010) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ 663,492 | $ 843,739 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2016 | Jun. 30, 2015 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 1,250,000,000 | 1,250,000,000 |
Common stock, shares issued | 21,192,807 | 20,367,500 |
Common stock, shares outstanding | 21,192,807 | 20,367,500 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Revenues | ||
Product sales | $ 2,342,347 | $ 1,833,800 |
Royalties | 15,413 | 205,439 |
Total revenues | 2,357,760 | 2,039,239 |
Cost of revenues | 1,326,036 | 1,418,495 |
Gross profit | 1,031,724 | 620,744 |
Operating expenses | ||
General and administrative | 1,891,832 | 1,524,270 |
Sales and marketing | 353,421 | 323,050 |
Total operating expenses | 2,245,253 | 1,847,320 |
(Loss) income from operations | (1,213,529) | (1,226,576) |
Other income (expense) | ||
Interest expense | (569,237) | (381,981) |
Other income | 14,762 | |
Net loss | $ (1,782,766) | $ (1,593,795) |
Loss per common share - basic and diluted | $ (0.09) | $ (0.08) |
Weighted average shares outstanding - basic and diluted | 20,558,382 | 20,032,007 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Deficit - USD ($) | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at Jun. 30, 2014 | $ 2,000 | $ 3,817,667 | $ (4,416,696) | $ (597,029) |
Balance, shares at Jun. 30, 2014 | 20,000,000 | |||
Distribution | (100,000) | (100,000) | ||
Shares issued for services | $ 1 | 244,813 | 244,814 | |
Shares issued for services, shares | 12,500 | |||
Shares issued for Asset Purchase | $ 6 | 54,994 | 55,000 | |
Shares issued for Asset Purchase, shares | 55,000 | |||
Shares issued for vendor credits | $ 30 | 299,970 | 300,000 | |
Shares issued for vendor credits, shares | 300,000 | |||
Stock options to employees | ||||
Net loss | (1,593,795) | (1,593,795) | ||
Balance at Jun. 30, 2015 | $ 2,037 | 4,317,444 | (6,010,491) | (1,691,010) |
Balance, shares at Jun. 30, 2015 | 20,367,500 | |||
Shares issued for Asset Purchase | 55,000 | |||
Shares issued to employees | $ 13 | 113,987 | 114,000 | |
Shares issued to employees,Shares | 135,000 | |||
Stock issued to vendors | $ 19 | 114,181 | 114,200 | |
Stock issued to vendors, Shares | 190,307 | |||
Sale of shares | $ 45 | 116,205 | 116,205 | |
Sale of shares, Shares | 560,000 | |||
Shares issued for financing | $ 5 | 49,995 | 50,000 | |
Shares issued for financing, Shares | 50,000 | |||
Stock options to employees | 433 | 433 | ||
Net loss | (1,782,766) | (1,782,766) | ||
Balance at Jun. 30, 2016 | $ 2,119 | $ 4,712,245 | $ (7,793,257) | $ (3,078,893) |
Balance, shares at Jun. 30, 2016 | 21,192,807 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Cash flows from operating activities: | ||
Net (loss) income | $ (1,782,766) | $ (1,593,795) |
Adjustments to reconcile net (loss) income to net cash from operations: | ||
Depreciation and amortization | 62,043 | 27,009 |
Amortization of debt issuance costs and loan discount | 203,975 | 146,038 |
Stock based compensation | 228,200 | 244,814 |
Value of stock options issued to employees | 433 | |
Bad debt write-off of royalty receivable | 64,385 | |
Interest on note payable added to principal | 127,658 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (86,813) | (71,923) |
Royalties receivable | 10,615 | (19,367) |
Prepaid expenses | 219,512 | (33,572) |
Inventory | (118,891) | 31,179 |
Deposits | 4,014 | (22,967) |
Accounts payable | 283,965 | 314,919 |
Accrued expenses | 36,304 | 5,000 |
Payroll taxes payable | 178,155 | |
Customer deposits | (29,267) | 117,218 |
Net cash from operating activities | (776,633) | (677,292) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (9,338) | (53,839) |
Acquisition of intangible asset | (9,465) | (11,896) |
Net cash from investing activities | (18,803) | (65,735) |
Cash flows from financing activities: | ||
Payoff of bank line of credit | (19,227) | |
Related party payable | (40,311) | |
Proceeds from bank line of credit | 54,226 | |
Proceeds from sale of stock | 116,250 | |
Proceeds from short term financing | 100,000 | |
Proceeds from note payable | 500,000 | 500,000 |
Debt issuance costs | (25,969) | |
Net cash from financing activities | 751,249 | 433,720 |
Net change in cash | (44,187) | (309,307) |
Cash, beginning of year | 51,016 | 360,323 |
Cash, end of year | 6,829 | 51,016 |
Supplemental cash flow information: | ||
Cash paid for interest | 237,604 | 145,345 |
Non-cash investing and financing activities: | ||
Distribution | 100,000 | |
Issuance of common shares for Asset Purchase | 55,000 | |
Issuance of common shares for vendor credits | 300,000 | |
Issuance of common shares for loan fees | $ 50,000 |
Nature of the Business and Sign
Nature of the Business and Significant Accounting Policies | 12 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Nature of the Business and Significant Accounting Policies | NOTE 1 NATURE OF THE BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES XFit Brands, Inc. (XFit or the Company) was incorporated on September 16, 2014 under the laws of the State of Nevada. The fiscal year of the Company is June 30. XFits principal business activity is the design, development, and worldwide marketing and selling of functional equipment, training gear, apparel and accessories for the impact sports market and fitness industry. Products are marketed and sold under the Throwdown® brand name to gyms, fitness facilities and directly to consumers via an internet website and through third party catalogues through a mix of independent distributors and licensees throughout the world. These financial statements represent the consolidated financial statements of XFit and its wholly owned operating subsidiaries Throwdown Industries Holdings, LLC (Holdings), Throwdown Industries, LLC (TDLLC), and Throwdown Industries, Inc. (TDINC). On September 26, 2014, XFit entered into a Contribution and Exchange Agreement with TD Legacy, LLC (TD Legacy) and Holdings under which TD Legacy contributed all of its membership interest in Holdings to XFit in exchange for the issuance by XFit of 20,000,000 shares of common stock to TD Legacy. The result of this transaction was that Holdings became a wholly owned subsidiary of XFit. The financial statements have been restated to reflect this conversion. Forward Stock Split On March 28, 2016, the Board of Directors approved a 1-for-5 forward split of its outstanding shares of common stock (and proportional increase of its authorized common stock from 250 million shares to 1.25 billion shares) with a record date of April 14, 2016 and an effective date of April 15, 2016. Prior to the split, the Company had 4,118,500 shares issued and outstanding and after the split, the Company had 20,592,500 shares issued and outstanding. All references in the consolidated financial statements and notes to consolidated financial statements, numbers of shares, and share amounts have been retroactively restated to reflect the 1-for-5 forward split, unless explicitly stated otherwise. Basis of Presentation The consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). Basis of Consolidation The consolidated financial statements include the accounts of XFit, Holdings, TDLLC and TDINC. All significant intercompany transactions and balances have been eliminated in consolidation. The Company also consolidates any variable interest entities (VIEs), of which it is the primary beneficiary, as defined within Accounting Standards Codification (ASC) 810. The Company does not have any VIEs that are required to be consolidated as of June 30, 2016 or 2015. Use of Estimates Consolidated financial statements prepared in accordance with GAAP require management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Among other things, management has estimated the collectability of its accounts receivable, the valuation of long-lived assets, and equity instruments issued for financing. Actual results could differ from those estimates. Concentration of Credit Risk Financial instruments that potentially subject the Company to a significant concentration of credit risk include cash, accounts receivable, royalties receivable, revenue, and vendor concentrations. At times, the Company maintains deposits in federally insured financial institutions in excess of federally insured limits. Management monitors the credit rating and concentration of risk with these financial institutions on a continuing basis to mitigate risk. The Company controls credit risk related to accounts receivable and royalties receivable through credit approvals, credit limits and monitoring procedures. As of June 30, 2016, our top three customers accounted for 51.9% of our total revenues being Crunch Franchising, LLC (33.7%), CA Management Co., Ltd. (9.6%) and Eye Fitness (8.7%). Two customers accounted for 90% of our accounts receivable, being Crunch Franchising, LLC ($127,512/71%), and 24 Hour Fitness USA, Inc. ($33,060/19%). As of June 30, 2015, two customers accounted for 88% of our accounts and royalties receivable, being Crunch Franchising, LLC ($72,889/43%), and Partner Business ($75,000/45%). We have written agreements with all of the 2016 customers. As of June 30, 2016, three vendors accounted for 44% of our accounts payable being American Express ($116,310/16%), Everblooming Industrial Limited ($111,094/15%), and Wells Fargo Bank ($95,462/13%). As of June 30, 2015, three vendors accounted for 68% of our accounts payable, being Indeglia & Carney ($51,465/12%), Lynam Industries ($203,394/46%), and Wells Fargo Bank ($46,683/10%). We have written agreements with a majority of the 2016 vendors. We expect our customer and vendor concentration to decrease as we expand our business. Fair Value of Financial Instruments 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. The Company determines the fair value of its financial instruments based on a three-level hierarchy for fair value measurements under which these assets and liabilities must be grouped, based on significant levels of observable or unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect managements market assumptions. This hierarchy requires the use of observable market data when available. These two types of inputs have created the following fair-value hierarchy: Level 1 Valuations based on unadjusted quoted market prices in active markets for identical securities. Level 2 Valuations based on observable inputs (other than Level 1 prices), such as quoted prices for similar assets at the measurement date; quoted prices in markets that are not active; or other inputs that are observable, either directly or indirectly. Level 3 Valuations based on unobservable inputs that are supported by little or no market activity and that are significant to the fair value measurement. At June 30, 2014, the warrants issued in connection with the loan discussed in Note 3 were measured at fair value on a non-recurring basis using unobservable inputs (Level 3). Financial Instruments The carrying amounts of cash, accounts and royalties receivable, accounts payable and accrued expenses approximate fair value as of June 30, 2016 and 2015, due to the short-term nature of the instruments. Long-Lived Assets and Intangible Assets In accordance with ASC 350-30, the Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that their net book value may not be recoverable. When such factors and circumstances exist, the Company compares the projected undiscounted future cash flows associated with the related asset or group of assets over their estimated useful lives against their respective carrying amount. Impairment, if any, is based on the excess of the carrying amount over the fair value, based on market value when available, or discounted expected cash flows, of those assets and is recorded in the period in which the determination is made. The Company had no such asset impairments at June 30, 2016 or 2015. There can be no assurance, however, that market conditions will not change or demand for the Companys products under development will continue. Either of these could result in future impairment of long-lived assets. Revenue Recognition Product sales are recognized upon shipment of inventory to customers. Royalty revenues are recognized upon the terms of the underlying royalty agreements, when amounts are reliably measurable and collectability is assured. Accounts receivable consist primarily of receivables from product sales. Management determines the allowance for doubtful accounts based on historical losses and current economic conditions. On a continuing basis, management analyzes delinquent receivables, and once these receivables are determined to be uncollectible, they are written off against an existing allowance account. As of June 30, 2016 and 2015, the Company has determined that an allowance for doubtful accounts is not necessary as all accounts are considered fully collectible. Cash and Cash Equivalents The Company considers cash on hand, cash in banks and other highly liquid instruments purchased with an original maturity date of three months or less to be cash equivalents. Inventory Inventory, which primarily represents finished goods, is valued at the lower of cost or market. Cost has been derived principally using standard costs utilizing the first-in, first-out method. Write-downs for finished goods are recorded when the net realizable value has fallen below cost and provide for slow moving or obsolete inventory. Loan Discounts and Loan Fees The Company amortizes loan discounts over the term of the loan using the effective interest method. Costs associated with obtaining financing are capitalized and amortized over the term of the related loans using the effective interest method. As of June 30, 2016 and 2015, the Company had $602,112 and $527,112 of total gross debt issuance costs, respectively. Amortization of the debt issuance costs was $203,975 and $146,038 for the years ended June 30, 2016 and 2015, respectively, which was recorded as a component of interest expense on the consolidated statements of operations. Income Taxes In accordance with ASC 740-10-25, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. 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. Under ASC 740-10-25, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company maintains a valuation allowance with respect to deferred tax assets. The Company established a valuation allowance based upon the potential likelihood of realizing the deferred tax asset in the future tax consequences. Changes in circumstances, such as the Company generating taxable income, could cause a change in judgment about the realizability of the related deferred tax asset. Any change in the valuation allowance will be included in income in the year of the change in estimate. The Company has adopted the provisions set forth in ASC Topic 740 to account for uncertainty in income taxes. In the preparation of income tax returns in federal and state jurisdictions, the Company asserts certain tax positions based on its understanding and interpretation of the income tax law. The taxing authorities may challenge such positions, and the resolution of such matters could result in recognition of income tax expense in the Companys financial statements. Management believes it has used reasonable judgments and conclusions in the preparation of its income tax returns. The Company uses the more likely than not criterion for recognizing the tax benefit of uncertain tax positions and to establish measurement criteria for income tax benefits. The Company has determined that it has no material unrecognized tax assets or liabilities related to uncertain tax positions as of June 30, 2016 and 2015. The Company does not anticipate any significant changes in such uncertainties and judgments during the next 12 months. The Companys policy is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company had no accrual for interest or penalties on its consolidated balance sheets at June 30, 2016 and 2015, respectively. Taxes Collected from Customers and Remitted to Governmental Authorities The Company reports taxes collected, which are primarily sales tax, on a net basis. Income (Loss) per Share The basic (loss) income per share is calculated by dividing the Companys net (loss) income available to common shareholders by the weighted average number of common shares during the year. The diluted net (loss) income per share is calculated by dividing the Companys net income (loss) available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted average number of shares adjusted for any potentially dilutive debt or equity. Diluted net (loss) income per share is the same as basic net (loss) income per share due to the lack of dilutive items. As of June 30, 2016 and 2015, the Company had 2,354,756 and 2,263,060 dilutive shares outstanding, respectively, that are attributable to the PIMCO warrant, which have been excluded as their effect is anti-dilutive. Property and Equipment, net Property and equipment are stated at cost, net of accumulated depreciation and amortization. The cost of property and equipment is depreciated or amortized using the straight-line method over the following estimated useful lives: Computer equipment and software 3 years Furniture 3 years Machinery 3-5 years Prepaid Expenses During the year ended June 30, 2015, the Company issued 300,000 shares of its common stock valued at $300,000 to two key vendors in consideration of future inventory purchases. As of June 30, 2015, the Company has not utilized these vendor credits and the $300,000 is included in prepaid expenses on the consolidated balance sheets. During the year ended June 30, 2016, we had consumed all of the credit with one vendor and had approximately $105,000 remaining with the other at year end. Advertising Costs The Company expenses advertising costs as incurred. Advertising expense was $38,492 and $77,175 for the years ended June 30, 2016 and 2015, respectively, and is included in sales and marketing expense on the consolidated statements of operations. Shipping and Handling Fees All amounts billed to a customer in a sales transaction related to shipping and handling represent revenues and are reported as product sales in the consolidated statements of operations. Costs incurred by the Company for shipping and handling are reported within cost of revenues in the consolidated statements of operations. Reclassifications Certain reclassifications were made to the prior period consolidated financial statements to conform to the current period presentation. There was no change to the previously reported net loss. Recently Issued Accounting Standards The Company has implemented all new accounting standards and does not believe that there are any other new accounting pronouncements that have been issued that may have a material impact on the consolidated financial statements. In April 2015, the Financial Accounting Standards Board (FASB) issued ASU 2015-03, Interest-Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs . Subsequent Events In accordance with ASC 855, Subsequent Events |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Jun. 30, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | NOTE 2 PROPERTY AND EQUIPMENT, NET Property and equipment consisted of the following at: June 30, 2016 June 30, 2015 Office furniture and equipment $ 51,794 $ 46,233 Warehouse equipment 15,254 13,254 Molds and dies 4,200 6,650 Leasehold improvements 4,227 Total, cost 75,475 66,137 Accumulated Depreciation (37,799 ) (23,845 ) Property and equipment, net $ 37,676 $ 42,292 Depreciation expense for the twelve months ended June 30, 2016 and 2015 was $13,954 and $12,377, respectively. |
Intangible Assets, Net
Intangible Assets, Net | 12 Months Ended |
Jun. 30, 2016 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Intangible Assets, Net | NOTE 3 - INTANGIBLE ASSETS, NET Intangible assets consisted of the following at: June 30, 2016 June 30, 2015 Transformations exercise fitness program $ 62,500 $ 62,500 Trademark and patent 8,277 4,396 Computer software 5,584 Total, cost 76,361 66,896 Accumulated amortization (60,052 ) (14,632 ) Intangible assets, net $ 16,309 $ 52,264 Amortization expense for the twelve months ended June 30, 2016 and 2015 was $48,089 and $14,632, respectively. |
Short Term Financing
Short Term Financing | 12 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
Short Term Financing | NOTE 4 SHORT TERM FINANCING On May 3, 2016, the Company entered into a Securities Purchase Agreement (SPA) with a single accredited investor (Investor) under which it issued and sold to Investor a promissory note in the principal amount of $125,000 (the Note). The Note has a maturity date of December 31, 2016 and an original issue discount of $20,000. In addition, the Company agreed to pay Investors expenses in connection with the SPA and issuance of the Note of $5,000. Accordingly, the Company received net proceeds from Investor of $100,000, which proceeds were used for investor relation services. So long as the Note is outstanding, upon any issuance of any security with any term more favorable to the holder of such security or with a term in favor of the holder of such security that was not similarly provided to Investor in the Note or the SPA, then the Company will notify Investor of such additional or more favorable term and such term, at Investors option, shall become a part of the Note and/or SPA. The types of terms contained in another security that may be more favorable to the holder of such security include, but are not limited to, terms interest rates, and original issue discounts. Interest shall not accrue on the unpaid principal balance of this Note unless an Event of Default occurs. Upon the occurrence of an Event of Default, the outstanding balance of this Note shall bear interest at the lesser of the rate of fifteen percent (15%) per annum or the maximum rate permitted by applicable law. The Note has a prepayment deadline of November 3, 2016. Events of Default under the Note include failure to pay any amounts when due, including on the prepayment deadline, breach of covenants or representations and warranties or upon voluntary bankruptcy or insolvency proceedings. At any time following the occurrence of an Event of Default, Investor may, by written notice to the Company, declare all unpaid principal, plus all accrued interest and other amounts due hereunder to be immediately due and payable at an amount equal to 125% of the outstanding principal amount of the Note at the time of the default (Mandatory Default Amount); provided, however, that for an Event of Default for failure to pay the Note in full on the Prepayment Deadline, Investor will not accelerate the Note unless the Company fails to pay the Mandatory Default Amount (plus all accrued interest from and after the Event of Default) on the Maturity Date. |
Note Payable
Note Payable | 12 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
Note Payable | NOTE 5 NOTE PAYABLE The note payable is comprised of the following at: June 30, 2016 2015 Note payable $ 2,712,787 $ 2,000,000 Less: unamortized loan discount (154,462 ) (277,070 ) Less: unamortized debt issuance costs (79,605 ) (102,641 ) Total Note Payable, net $ 2,478,720 $ 1,620,289 On June 10, 2014, the Company entered into a Note Purchase Agreement (Agreement) with Pacific Investment Management Company (PIMCO) that authorized the issuance of up to $2,500,000. On June 12, 2014, the Company entered into a Senior Secured Note (Note) whereby the Company drew $1,500,000. The note bears interest at 14% and an effective interest rate of 21%. This Note is collateralized by all of the assets of the Company. On February 6, 2015, the Company drew down an additional $500,000 of funds on the PIMCO Note Payable. Following the February 6, 2015 draw, the principal balance payable on the PIMCO note is $2,000,000, and the Company has an additional $500,000 available to draw on this loan facility. The full principal balance outstanding related to this note is due on July 12, 2017. Subsequently, the parties reached an agreement to treat the interest as Payment in Kind (PIK) and add the interest to the amount of the loan on a quarterly basis. This, in effect, increased the amount of the loan. The Note includes various covenants, including but not limited to, having annual audited financial statements within 90 days of the end of the fiscal year. At June 30, 2016, the Company is in compliance with all covenants. In connection with the Note, the Company granted warrants to acquire up to 10% of the Companys capital stock based on an aggregate enterprise fair market value of $15.0 million. The Company valued the warrants using the Black-Scholes option pricing model with the following variables: annual dividend yield of 0%; expected life of 10 years; risk free rate of return of 2.92%; and expected volatility of 0%. The Company estimated the value of the warrants to be $377,480, which is recorded as a loan discount and is being amortized under the effective interest method to interest expense over the term of the loan. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Jun. 30, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 6 RELATED PARTY TRANSACTIONS Related Party Receivable As of June 30, 2014, the Company had a related party receivable of $100,000 from TD Legacy, the sole member of Holdings at that time. In June 2014, Holdings paid the balance of the $500,000 note payable to Windsor Court Holdings, LLC (WCH) and an additional $100,000 transaction fee on behalf of TD Legacy, which redeemed the 25% interest in Holdings from WCH to TD Legacy. The Company issued a $100,000 distribution to its sole member, TD Legacy, which eliminated the related party receivable during the year ended June 30, 2015. In 2016 there were no additional related party transactions. Related Party Payable As of June 30, 2016 and 2015, the Company has $95,620 of salaries and bonuses payable to four of its officers and membership interest holders. These bonuses were to cover income taxes relating to equity issued during 2009. |
Licensing Agreements
Licensing Agreements | 12 Months Ended |
Jun. 30, 2016 | |
Licensing Agreements | |
Licensing Agreements | NOTE 7 LICENSING AGREEMENTS On October 2, 2013, the Company entered into a license agreement with Dethrone Royalty Holdings, Inc. (Dethrone), pursuant to which the Company granted an exclusive, non-sub licensable and non-assignable right to Dethrone to use Company trademarks and other intellectual property. In consideration for the license agreement, the Company shall receive royalties of 10% of the net revenue generated by sales and other transfers of the licensed products during the term of the license agreement (subject to minimum requirement). In addition to the royalty payments, the Company received 5,437,603 shares of Dethrones common stock, at a trading value of $114,190, which was recorded as other income on the consolidated statements of operations. As of June 30, 2014, the Company wrote down the shares to fair market value, which has been recorded as a loss on value of marketable securities on the consolidated statements of operations. The change was due to a decline in the fair value of the marketable security which, in the opinion of management, was considered to be other than temporary. This agreement was terminated on February 14, 2015. Total royalties related to this agreement were zero and $75,000 for the years ended June 30, 2016 and 2015, respectively. On April 10, 2014, the Company entered into a distribution and license agreement with Partner Business Importacao e Exportacao, LTDA, a Brazilian corporation (Partner). Pursuant to the agreement, the Company granted a two-year, non-assignable, royalty-based license and right to use the trademarks and other intellectual property in the territory defined as Brazil. In consideration for the license agreement, the Company shall receive the greater of royalties of 10% of the net sales generated by sales and other transfers of the licensed products during the term of the license agreement or the minimum royalties outlined in the agreement. Total royalties related to this agreement were zero and $75,000 for the years ended June 30, 2016 and 2015, respectively. On March 26, 2015, the Company entered into a distribution agreement with Eye Fitness Pty Ltd (Eye Fitness), an Australian Company. Pursuant to the agreement, the Company granted a two-year, non-assignable, distribution agreement for Australia and key accounts in the United Kingdom, Thailand and Singapore. In consideration for the distribution agreement, the Company shall receive minimum royalties as outlined in the agreement. There was no royalty revenue for the years ended June 30, 2016 and 2015. |
Income Taxes
Income Taxes | 12 Months Ended |
Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 8 INCOME TAXES The Companys net loss before income taxes totaled $1,785,588 for the year ended June 30, 2016. During the year ended June 30, 2015, the Company had income before taxes of $1,593,795. The total provision for income taxes, which consists of U.S. federal income and California Franchise taxes, consists of the following: June 30, 2016 2015 Current taxes $ (710,664 ) $ (609,092 ) Deferred taxes 710,664 609,092 Total $ - $ - A reconciliation of the tax on the Companys loss for the year before income taxes and total tax expense are shown below: June 30, 2016 2015 Income tax liability (benefit) at the U.S statutory income tax and California Franchise tax rates (39.8 )% (39.8 )% Loss on marketable securities - - Amortization of loan discount 2.9 % 2.6 % Other differences 0.0 % 0.1 % Change in valuation allowance 36.9 % 37.1 % Total - - Based on the weight of available evidence, the Companys management has determined that it is more likely than not that the net deferred tax assets will not be realized. Therefore, the company has recorded a full valuation allowance against the net deferred tax assets. The components of net deferred tax assets recognized are as follows: June 30, 2016 2015 Deferred noncurrent tax asset: Net operating loss carry-forward $ 1,212,842 $ 502,178 Basis differences on marketable securities - 45,448 Total, deferred noncurrent tax asset 1,212,842 547,626 Deferred noncurrent tax liabilities: Value of warrants recorded as loan discount - 110,274 Other, net - - Total deferred noncurrent tax liabilities - 110,274 Total, deferred noncurrent tax asset, net 1,212,842 437,352 Valuation allowance (1,212,842 ) (437,352 ) Total $ - $ - Due to uncertainties surrounding the Companys ability to generate future U.S. taxable income to realize these assets, a full valuation allowance has been established to offset the net U.S. deferred tax asset. The future utilization of the Companys federal net operating loss and tax credit carry forwards to offset future taxable income may be subject to an annual limitation, pursuant to Internal Revenue Code sections 382 and 383, as a result of ownership changes that may have occurred previously or that could occur in the future. At June 30, 2016, the Company had federal income tax net operating losses of approximately $3.4 million. The federal net operating losses expire at various dates beginning in 2028. The Company files income tax returns in the U.S. federal jurisdiction and California. Tax years 2008 forward remain open to examination for the U.S. federal jurisdiction as a result of net operating loss carryforwards. Tax years 2009 forward remain open to examination by the state taxing authority. |
Stockholders' Deficit
Stockholders' Deficit | 12 Months Ended |
Jun. 30, 2016 | |
Equity [Abstract] | |
Stockholders' Deficit | NOTE 9 STOCKHOLDERS DEFICIT On July 1, 2015, the Company issued 75,000 shares of its common stock valued at $75,000 to an employee as a signing bonus. On July 15, 2015, the board of directors approved the issuance of 1,587,500 stock options to employees to be utilized on a performance and retention basis. On September 30, 2015, the Company issued 50,000 shares of its common stock valued by the Companys board of directors at $50,000 to PIMCO as a loan fee in consideration of the additional $500,000 draw-down on the PIMCO Note Payable that was funded on October 20, 2015. (See Note 5-Note Payable). On November 17, 2015, the Company issued options to purchase 215,000 shares of stock to six employees for services rendered. (See Note 10-Commitments and Contingencies-Stock Incentive Plan) On February 23, 2016, the Company issued 50,000 shares of common stock to an employee and 50,000 shares of common stock to a consultant as part of their former agreements with XFit Brands. The shares were valued at $60,000. On April 18, 2016, the Company issued 10,000 shares of its common stock valued at $9,000 to an employee as a signing bonus. On May 18, 2016, the Company issued 100,000 shares of its common stock valued at $60,000 to an investor relations company for services rendered. On May 19, 2016, the Company issued 5,307 shares of its common stock valued at $3,200 to a marketing consultant for services rendered. On May 24, 2016, the Company issued 200,000 shares of its common stock valued at $60,000 to an investor pursuant to an equity purchase agreement. On May 25, 2016, the Company issued 10,000 shares of its common stock valued at $6,000 to a marketing company for services rendered. On June 1, 2016, the Company issued 25,000 shares of its common stock valued at $15,000 to an investor relations company for services rendered. On June 21, 2016, the Company issued 250,000 shares of its common stock valued at $56,250 to an investor pursuant to an equity purchase agreement. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Jun. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 10 COMMITMENTS AND CONTINGENCIES Lease Commitments On June 18, 2015, the Company entered into a lease agreement for approximately 25,788 square feet of warehouse and office space under a thirty-eight (38) month operating lease that commences on September 1, 2015 and expires on October 31, 2018. The lease has monthly payments of $16,504 with standard rent increases over the life of the lease scheduled in October of each year. On June 5, 2015, the Company entered into a sublease of a portion of the premises for the period September 1, 2015 through August 31, 2016, at a monthly rental rate of $5,000. Future minimum lease payments under the operating lease as of June 30, 2016 are as follows: For the years ending June 30: 2017 $ 202,508 2018 208,583 2019 70,038 Total $ 481,129 Rent expense for the years ended June 30, 2016 and 2015 was $182,952 and $59,747, respectively. Litigation From time-to-time, the Company is subject to various litigation and other claims in the normal course of business. The Company establishes liabilities in connection with legal actions that management deems to be probable and estimable. No amounts have been accrued in the consolidated financial statements with respect to any matters. Stock Incentive Plan On October 21, 2014, the Board of Directors and the Companys sole stockholder adopted the 2014 Stock Incentive Plan. The purpose of the 2014 Stock Incentive Plan is to advance the best interests of the Company by providing those persons who have a substantial responsibility for management and growth of the Company with additional incentive and by increasing their proprietary interest in the success of the Company, thereby encouraging them to maintain their relationships with the Company. Further, the availability and offering of stock options and common stock under the plan supports and increases the Companys ability to attract and retain individuals of exceptional talent upon whom, in large measure, the sustained progress, growth and profitability which the Company depends. The total number of shares available for the grant of either stock options or compensation stock under the plan is 3,000,000 shares of common stock, subject to adjustment. The Board of Directors administers the plan and has full power to grant stock options. As of June 30, 2016, the Company has not issued any shares under the plan and has granted 1,587,500 options to purchase shares under the plan. Equity Purchase Agreement On December 17, 2014, the Company entered into an Equity Purchase Agreement Put Shares Maximum Commitment Amount The Equity Purchase Agreement will terminate when any of the following events occur: (i) Kodiak has purchased an aggregate of $5.0 million of the Companys common stock, (ii) on December 31, 2016 or (iii) upon written notice from the Company to Kodiak. Registration Rights Agreement On December 17, 2014, the Company entered into a registration rights agreement with Kodiak Capital, LLC under which the Company is obligated to register the shares to be acquired by Kodiak pursuant to that certain Equity Purchase Agreement dated December 17, 2014, under which Kodiak agreed to purchase up to $5 million of XFit common stock, subject to certain conditions. Asset Purchase Agreement On February 26, 2015, the Company entered into an Asset Purchase Agreement to acquire the exclusive rights, title, and interest in the Transformations exercise and fitness program. The purchase price was $62,500 which comprised of a $7,500 cash payment and fifty-five thousand (55,000) shares of the Companys common stock that was valued at $55,000. The agreement also has a performance based earn out for a period of eighteen (18) months that is based on fifty percent (50%) of all programming services gross revenues derived from the Transformations program, up to a maximum earn out of $187,500. The earn out is payable in tranches and none of the tranches were met during the years ended June 30, 2016 or 2015. Vendor Credit Agreements On June 18 2015, the Company entered into a Stock Purchase Agreement with Ever Blooming Industrial Limited, whereby the Company issued 100,000 shares of its common stock at $1.00 per share. The purchase price is in the form of a manufacturing credit totaling $100,000 to use for future inventory purchases (the Vendor Credit). The Company can use all or part of the Vendor Credit until the Vendor Credit is exhausted. The Company had the total $100,000 Vendor Credit at June 30, 2015, which is included in prepaid expenses on the consolidated balance sheets. At June 30, 2016, the Company had exhausted the entire credit. On June 26 2015, the Company entered into a Stock Purchase Agreement with Yayu General Machinery Co., LTD, whereby the Company issued 200,000 shares of its common stock at $1.00 per share, or $200,000. The purchase price is in the form of a manufacturing credit of $200,000 to use for future inventory purchases (the Vendor Credit). The Company can use all or part of the Vendor Credit until the Vendor Credit is exhausted. The Company had the total $200,000 Vendor Credit at June 30, 2015, which is included in prepaid expenses in the consolidated balance sheets. At June 30, 2016, the Company still had approximately $105,000 remaining on the credit. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Jun. 30, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 11 SUBSEQUENT EVENTS On August 3, 2016 the Company entered into an Agreement with Crown Financial, LLC which advances 80% of invoices approved and assumed by Crown for collection. Depending on the length of time taken to collect the invoices, the Company will receive additional payments from Crown ranging from 18.25% if collected within 20 days to 0% if collected in 120 days. Crown has the right to require the Company to repurchase unpaid invoices outstanding for more than 120 days. On August 13, 2016 the Company entered into an Investment Agreement (the Investment Agreement) with GHS Investments, LLC (GHS). The Investment Agreement gives the Company the option to sell to GHS, up to $5,000,000 worth of its common stock (Shares), over the period following effectiveness of a registration statement covering the resale of the Shares (the Effective Date) and ending thirty-six (36) months after the Effective Date. Under the terms of the Investment Agreement, the Company has the right to deliver from time to time a Put Notice to GHS stating the dollar amount of Put Shares (up to $500,000 under any individual Put Notice)(the Put Amount) that it intends to sell to GHS with the price per share based on the following formula: the lesser of (a) the lowest sale price for the Common Stock on the date of the Put Notice (the Put Notice Date); or (b) the arithmetic average of the three (3) lowest trading prices for the Companys Common Stock during the five trading days following the Put Notice Date. The maximum number of shares that can be put to GHS is two times the average daily trading volume during the ten trading days prior to the closing of a put (the Closing Date). If the amount of the tranche of its outstanding shares exceeds the volume limitation, additional tranches will be delivered until the entire Purchase Amount is delivered. Each tranche, including the initial tranche, will trigger a new purchase price, and will be priced according to the purchase price definition. There are a number of conditions to the Company effecting a put, including the effectiveness of the registration statement. On September 2, 2016, the Company issued 550,000 shares of its common stock valued at $86,625 to an investor pursuant to an equity purchase agreement. On September 23, 2016, the Company entered into an agreement with a lender to increase the value of the note payable and to extend the due date. At this time both the new value and the revised date are still to be determined. |
Nature of the Business and Si18
Nature of the Business and Significant Accounting Policies (Policies) | 12 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Forward Stock Split | Forward Stock Split On March 28, 2016, the Board of Directors approved a 1-for-5 forward split of its outstanding shares of common stock (and proportional increase of its authorized common stock from 250 million shares to 1.25 billion shares) with a record date of April 14, 2016 and an effective date of April 15, 2016. Prior to the split, the Company had 4,118,500 shares issued and outstanding and after the split, the Company had 20,592,500 shares issued and outstanding. All references in the consolidated financial statements and notes to consolidated financial statements, numbers of shares, and share amounts have been retroactively restated to reflect the 1-for-5 forward split, unless explicitly stated otherwise. |
Basis of Presentation | Basis of Presentation The consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). |
Basis of Consolidation | Basis of Consolidation The consolidated financial statements include the accounts of XFit, Holdings, TDLLC and TDINC. All significant intercompany transactions and balances have been eliminated in consolidation. The Company also consolidates any variable interest entities (VIEs), of which it is the primary beneficiary, as defined within Accounting Standards Codification (ASC) 810. The Company does not have any VIEs that are required to be consolidated as of June 30, 2016 or 2015. |
Use of Estimates | Use of Estimates Consolidated financial statements prepared in accordance with GAAP require management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Among other things, management has estimated the collectability of its accounts receivable, the valuation of long-lived assets, and equity instruments issued for financing. Actual results could differ from those estimates. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to a significant concentration of credit risk include cash, accounts receivable, royalties receivable, revenue, and vendor concentrations. At times, the Company maintains deposits in federally insured financial institutions in excess of federally insured limits. Management monitors the credit rating and concentration of risk with these financial institutions on a continuing basis to mitigate risk. The Company controls credit risk related to accounts receivable and royalties receivable through credit approvals, credit limits and monitoring procedures. As of June 30, 2016, our top three customers accounted for 51.9% of our total revenues being Crunch Franchising, LLC (33.7%), CA Management Co., Ltd. (9.6%) and Eye Fitness (8.7%). Two customers accounted for 90% of our accounts receivable, being Crunch Franchising, LLC ($127,512/71%), and 24 Hour Fitness USA, Inc. ($33,060/19%). As of June 30, 2015, two customers accounted for 88% of our accounts and royalties receivable, being Crunch Franchising, LLC ($72,889/43%), and Partner Business ($75,000/45%). We have written agreements with all of the 2016 customers. As of June 30, 2016, three vendors accounted for 44% of our accounts payable being American Express ($116,310/16%), Everblooming Industrial Limited ($111,094/15%), and Wells Fargo Bank ($95,462/13%). As of June 30, 2015, three vendors accounted for 68% of our accounts payable, being Indeglia & Carney ($51,465/12%), Lynam Industries ($203,394/46%), and Wells Fargo Bank ($46,683/10%). We have written agreements with a majority of the 2016 vendors. We expect our customer and vendor concentration to decrease as we expand our business. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments 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. The Company determines the fair value of its financial instruments based on a three-level hierarchy for fair value measurements under which these assets and liabilities must be grouped, based on significant levels of observable or unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect managements market assumptions. This hierarchy requires the use of observable market data when available. These two types of inputs have created the following fair-value hierarchy: Level 1 Valuations based on unadjusted quoted market prices in active markets for identical securities. Level 2 Valuations based on observable inputs (other than Level 1 prices), such as quoted prices for similar assets at the measurement date; quoted prices in markets that are not active; or other inputs that are observable, either directly or indirectly. Level 3 Valuations based on unobservable inputs that are supported by little or no market activity and that are significant to the fair value measurement. At June 30, 2014, the warrants issued in connection with the loan discussed in Note 3 were measured at fair value on a non-recurring basis using unobservable inputs (Level 3). |
Financial Instruments | Financial Instruments The carrying amounts of cash, accounts and royalties receivable, accounts payable and accrued expenses approximate fair value as of June 30, 2016 and 2015, due to the short-term nature of the instruments. |
Long-Lived Assets and Intangible Assets | Long-Lived Assets and Intangible Assets In accordance with ASC 350-30, the Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that their net book value may not be recoverable. When such factors and circumstances exist, the Company compares the projected undiscounted future cash flows associated with the related asset or group of assets over their estimated useful lives against their respective carrying amount. Impairment, if any, is based on the excess of the carrying amount over the fair value, based on market value when available, or discounted expected cash flows, of those assets and is recorded in the period in which the determination is made. The Company had no such asset impairments at June 30, 2016 or 2015. There can be no assurance, however, that market conditions will not change or demand for the Companys products under development will continue. Either of these could result in future impairment of long-lived assets. |
Revenue Recognition | Revenue Recognition Product sales are recognized upon shipment of inventory to customers. Royalty revenues are recognized upon the terms of the underlying royalty agreements, when amounts are reliably measurable and collectability is assured. Accounts receivable consist primarily of receivables from product sales. Management determines the allowance for doubtful accounts based on historical losses and current economic conditions. On a continuing basis, management analyzes delinquent receivables, and once these receivables are determined to be uncollectible, they are written off against an existing allowance account. As of June 30, 2016 and 2015, the Company has determined that an allowance for doubtful accounts is not necessary as all accounts are considered fully collectible. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers cash on hand, cash in banks and other highly liquid instruments purchased with an original maturity date of three months or less to be cash equivalents. |
Inventory | Inventory Inventory, which primarily represents finished goods, is valued at the lower of cost or market. Cost has been derived principally using standard costs utilizing the first-in, first-out method. Write-downs for finished goods are recorded when the net realizable value has fallen below cost and provide for slow moving or obsolete inventory. |
Loan Discounts and Loan Fees | Loan Discounts and Loan Fees The Company amortizes loan discounts over the term of the loan using the effective interest method. Costs associated with obtaining financing are capitalized and amortized over the term of the related loans using the effective interest method. As of June 30, 2016 and 2015, the Company had $602,112 and $527,112 of total gross debt issuance costs, respectively. Amortization of the debt issuance costs was $203,975 and $146,038 for the years ended June 30, 2016 and 2015, respectively, which was recorded as a component of interest expense on the consolidated statements of operations. |
Income Taxes | Income Taxes In accordance with ASC 740-10-25, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. 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. Under ASC 740-10-25, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company maintains a valuation allowance with respect to deferred tax assets. The Company established a valuation allowance based upon the potential likelihood of realizing the deferred tax asset in the future tax consequences. Changes in circumstances, such as the Company generating taxable income, could cause a change in judgment about the realizability of the related deferred tax asset. Any change in the valuation allowance will be included in income in the year of the change in estimate. The Company has adopted the provisions set forth in ASC Topic 740 to account for uncertainty in income taxes. In the preparation of income tax returns in federal and state jurisdictions, the Company asserts certain tax positions based on its understanding and interpretation of the income tax law. The taxing authorities may challenge such positions, and the resolution of such matters could result in recognition of income tax expense in the Companys financial statements. Management believes it has used reasonable judgments and conclusions in the preparation of its income tax returns. The Company uses the more likely than not criterion for recognizing the tax benefit of uncertain tax positions and to establish measurement criteria for income tax benefits. The Company has determined that it has no material unrecognized tax assets or liabilities related to uncertain tax positions as of June 30, 2016 and 2015. The Company does not anticipate any significant changes in such uncertainties and judgments during the next 12 months. The Companys policy is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company had no accrual for interest or penalties on its consolidated balance sheets at June 30, 2016 and 2015, respectively. |
Taxes Collected from Customers and Remitted to Governmental Authorities | Taxes Collected from Customers and Remitted to Governmental Authorities The Company reports taxes collected, which are primarily sales tax, on a net basis. |
Income (Loss) Per Share | Income (Loss) per Share The basic (loss) income per share is calculated by dividing the Companys net (loss) income available to common shareholders by the weighted average number of common shares during the year. The diluted net (loss) income per share is calculated by dividing the Companys net income (loss) available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted average number of shares adjusted for any potentially dilutive debt or equity. Diluted net (loss) income per share is the same as basic net (loss) income per share due to the lack of dilutive items. As of June 30, 2016 and 2015, the Company had 2,354,756 and 2,263,060 dilutive shares outstanding, respectively, that are attributable to the PIMCO warrant, which have been excluded as their effect is anti-dilutive. |
Property and Equipment, net | Property and Equipment, net Property and equipment are stated at cost, net of accumulated depreciation and amortization. The cost of property and equipment is depreciated or amortized using the straight-line method over the following estimated useful lives: Computer equipment and software 3 years Furniture 3 years Machinery 3-5 years |
Prepaid Expenses | Prepaid Expenses During the year ended June 30, 2015, the Company issued 300,000 shares of its common stock valued at $300,000 to two key vendors in consideration of future inventory purchases. As of June 30, 2015, the Company has not utilized these vendor credits and the $300,000 is included in prepaid expenses on the consolidated balance sheets. During the year ended June 30, 2016, we had consumed all of the credit with one vendor and had approximately $105,000 remaining with the other at year end. |
Advertising Costs | Advertising Costs The Company expenses advertising costs as incurred. Advertising expense was $38,492 and $77,175 for the years ended June 30, 2016 and 2015, respectively, and is included in sales and marketing expense on the consolidated statements of operations. |
Shipping and Handling Fees | Shipping and Handling Fees All amounts billed to a customer in a sales transaction related to shipping and handling represent revenues and are reported as product sales in the consolidated statements of operations. Costs incurred by the Company for shipping and handling are reported within cost of revenues in the consolidated statements of operations. |
Reclassifications | Reclassifications Certain reclassifications were made to the prior period consolidated financial statements to conform to the current period presentation. There was no change to the previously reported net loss. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards The Company has implemented all new accounting standards and does not believe that there are any other new accounting pronouncements that have been issued that may have a material impact on the consolidated financial statements. In April 2015, the Financial Accounting Standards Board (FASB) issued ASU 2015-03, Interest-Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs . |
Subsequent Events | Subsequent Events In accordance with ASC 855, Subsequent Events |
Nature of the Business and Si19
Nature of the Business and Significant Accounting Policies (Tables) | 12 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Schedule of Estimated Useful Lives | The cost of property and equipment is depreciated or amortized using the straight-line method over the following estimated useful lives: Computer equipment and software 3 years Furniture 3 years Machinery 3-5 years |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Jun. 30, 2016 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property and Equipment | Property and equipment consisted of the following at: June 30, 2016 June 30, 2015 Office furniture and equipment $ 51,794 $ 46,233 Warehouse equipment 15,254 13,254 Molds and dies 4,200 6,650 Leasehold improvements 4,227 Total, cost 75,475 66,137 Accumulated Depreciation (37,799 ) (23,845 ) Property and equipment, net $ 37,676 $ 42,292 |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) | 12 Months Ended |
Jun. 30, 2016 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Summary of Intangible Assets | Intangible assets consisted of the following at: June 30, 2016 June 30, 2015 Transformations exercise fitness program $ 62,500 $ 62,500 Trademark and patent 8,277 4,396 Computer software 5,584 Total, cost 76,361 66,896 Accumulated amortization (60,052 ) (14,632 ) Intangible assets, net $ 16,309 $ 52,264 |
Note Payable (Tables)
Note Payable (Tables) | 12 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Note Payable | The note payable is comprised of the following at: June 30, 2016 2015 Note payable $ 2,712,787 $ 2,000,000 Less: unamortized loan discount (154,462 ) (277,070 ) Less: unamortized debt issuance costs (79,605 ) (102,641 ) Total Note Payable, net $ 2,478,720 $ 1,620,289 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of Provision for Income Taxes | The total provision for income taxes, which consists of U.S. federal income and California Franchise taxes, consists of the following: June 30, 2016 2015 Current taxes $ (710,664 ) $ (609,092 ) Deferred taxes 710,664 609,092 Total $ - $ - |
Schedule of Effective Income Tax Rate Reconciliation | A reconciliation of the tax on the Companys loss for the year before income taxes and total tax expense are shown below: June 30, 2016 2015 Income tax liability (benefit) at the U.S statutory income tax and California Franchise tax rates (39.8 )% (39.8 )% Loss on marketable securities - - Amortization of loan discount 2.9 % 2.6 % Other differences 0.0 % 0.1 % Change in valuation allowance 36.9 % 37.1 % Total - - |
Schedule of Net Deferred Tax Assets | The components of net deferred tax assets recognized are as follows: June 30, 2016 2015 Deferred noncurrent tax asset: Net operating loss carry-forward $ 1,212,842 $ 502,178 Basis differences on marketable securities - 45,448 Total, deferred noncurrent tax asset 1,212,842 547,626 Deferred noncurrent tax liabilities: Value of warrants recorded as loan discount - 110,274 Other, net - - Total deferred noncurrent tax liabilities - 110,274 Total, deferred noncurrent tax asset, net 1,212,842 437,352 Valuation allowance (1,212,842 ) (437,352 ) Total $ - $ - |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Jun. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Lease Payments Under Operating Lease | Future minimum lease payments under the operating lease as of June 30, 2016 are as follows: For the years ending June 30: 2017 $ 202,508 2018 208,583 2019 70,038 Total $ 481,129 |
Nature of the Business and Si25
Nature of the Business and Significant Accounting Policies (Details Narrative) - USD ($) | Mar. 28, 2016 | Sep. 26, 2014 | Jun. 30, 2016 | Jun. 30, 2015 |
Financing Receivable, Impaired [Line Items] | ||||
Forward split stock description | 1-for-5 forward split | |||
Excess stock shares authorized | 250,000,000 | |||
Common stock, shares authorized | 1,250,000,000 | 1,250,000,000 | ||
Common stock, shares issued | 21,192,807 | 20,367,500 | ||
Common stock, shares outstanding | 21,192,807 | 20,367,500 | ||
Revenue, net | $ 2,342,347 | $ 1,833,800 | ||
Antidilutive securities excluded from computation of earnings per share, amount | 2,354,756 | 2,263,060 | ||
Gross debt issuance costs | $ 602,112 | $ 527,112 | ||
Amortization of debt issuance costs | 203,975 | 146,038 | ||
Adverting expense | $ 38,492 | $ 77,175 | ||
Top Three Customers [Member] | Sales Revenue, Net [Member] | ||||
Financing Receivable, Impaired [Line Items] | ||||
Percentage of concentration of credit risk | 51.90% | |||
Top Three Customers [Member] | Sales Revenue, Net [Member] | Crunch Franchising, LLC [Member] | ||||
Financing Receivable, Impaired [Line Items] | ||||
Percentage of concentration of credit risk | 33.70% | |||
Top Three Customers [Member] | Sales Revenue, Net [Member] | CA Management Co Ltd [Member] | ||||
Financing Receivable, Impaired [Line Items] | ||||
Percentage of concentration of credit risk | 9.60% | |||
Top Three Customers [Member] | Sales Revenue, Net [Member] | Eye Fitness [Member] | ||||
Financing Receivable, Impaired [Line Items] | ||||
Percentage of concentration of credit risk | 8.70% | |||
Two Customers [Member] | Accounts Receivable [Member] | ||||
Financing Receivable, Impaired [Line Items] | ||||
Percentage of concentration of credit risk | 90.00% | 88.00% | ||
Two Customers [Member] | Accounts Receivable [Member] | Crunch Franchising, LLC [Member] | ||||
Financing Receivable, Impaired [Line Items] | ||||
Revenue, net | $ 127,512 | $ 72,889 | ||
Percentage of concentration of credit risk | 71.00% | 43.00% | ||
Two Customers [Member] | Accounts Receivable [Member] | 24 Hour Fitness USA, Inc [Member] | ||||
Financing Receivable, Impaired [Line Items] | ||||
Revenue, net | $ 33,060 | |||
Percentage of concentration of credit risk | 19.00% | |||
Two Customers [Member] | Accounts Receivable [Member] | Partner Business [Member] | ||||
Financing Receivable, Impaired [Line Items] | ||||
Revenue, net | $ 75,000 | |||
Percentage of concentration of credit risk | 45.00% | |||
Three Vendors [Mermber] | Accounts Payable [Member] | ||||
Financing Receivable, Impaired [Line Items] | ||||
Percentage of concentration of credit risk | 44.00% | 68.00% | ||
Three Vendors [Mermber] | Accounts Payable [Member] | American Express [Mermber] | ||||
Financing Receivable, Impaired [Line Items] | ||||
Revenue, net | $ 116,310 | |||
Percentage of concentration of credit risk | 16.00% | |||
Three Vendors [Mermber] | Accounts Payable [Member] | Ever Blooming Industrial Limited [Member] | ||||
Financing Receivable, Impaired [Line Items] | ||||
Revenue, net | $ 111,094 | |||
Percentage of concentration of credit risk | 15.00% | |||
Three Vendors [Mermber] | Accounts Payable [Member] | Wells Fargo Bank [Member] | ||||
Financing Receivable, Impaired [Line Items] | ||||
Revenue, net | $ 95,462 | $ 46,683 | ||
Percentage of concentration of credit risk | 13.00% | 10.00% | ||
Three Vendors [Mermber] | Accounts Payable [Member] | Indeglia & Carney [Member] | ||||
Financing Receivable, Impaired [Line Items] | ||||
Revenue, net | $ 51,465 | |||
Percentage of concentration of credit risk | 12.00% | |||
Three Vendors [Mermber] | Accounts Payable [Member] | Lynam Industries [Member] | ||||
Financing Receivable, Impaired [Line Items] | ||||
Revenue, net | $ 203,394 | |||
Percentage of concentration of credit risk | 46.00% | |||
Two Vendors [Mermber] | ||||
Financing Receivable, Impaired [Line Items] | ||||
Number of common stoick shares issued for consideration of future inventory purchases | 300,000 | |||
Number of common stoick value issued for consideration of future inventory purchases | $ 300,000 | |||
Vendor [Mermber] | ||||
Financing Receivable, Impaired [Line Items] | ||||
Prepaid expenses | $ 300,000 | |||
One Vendor [Mermber] | ||||
Financing Receivable, Impaired [Line Items] | ||||
Credit with remaining the other at year end | $ 105,000 | |||
April 15, 2016 [Member] | ||||
Financing Receivable, Impaired [Line Items] | ||||
Common stock, shares issued | 4,118,500 | |||
Common stock, shares outstanding | 4,118,500 | |||
April 15, 2016 [Member] | Forward Stock Split [Member] | ||||
Financing Receivable, Impaired [Line Items] | ||||
Common stock, shares issued | 20,592,500 | |||
Common stock, shares outstanding | 20,592,500 | |||
TD Legacy [Member] | ||||
Financing Receivable, Impaired [Line Items] | ||||
Stock issued during period, shares | 20,000,000 |
Nature of the Business and Si26
Nature of the Business and Significant Accounting Policies - Schedule of Estimated Useful Lives (Details) | 12 Months Ended |
Jun. 30, 2016 | |
Computer Equipment and Software [Member] | |
Property and equipment estimated useful lives | 3 years |
Furniture [Member] | |
Property and equipment estimated useful lives | 3 years |
Machinery [Member] | Minimum [Member] | |
Property and equipment estimated useful lives | 3 years |
Machinery [Member] | Maximum [Member] | |
Property and equipment estimated useful lives | 5 years |
Property and Equipment, Net (De
Property and Equipment, Net (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 13,954 | $ 12,377 |
Property and Equipment, Net - S
Property and Equipment, Net - Summary of Property and Equipment (Details) - USD ($) | Jun. 30, 2016 | Jun. 30, 2015 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 75,475 | $ 66,137 |
Less: Accumulated depreciation | (37,799) | (23,845) |
Total Property and equipment, net | 37,676 | 42,292 |
Office Furniture and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 51,794 | 46,233 |
Warehouse Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 15,254 | 13,254 |
Molds and Dies [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 4,200 | 6,650 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 4,227 |
Intangible Assets, Net (Details
Intangible Assets, Net (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Amortization expense | $ 48,089 | $ 14,632 |
Intangible Assets, Net - Summar
Intangible Assets, Net - Summary of Intangible Assets (Details) - USD ($) | Jun. 30, 2016 | Jun. 30, 2015 |
Total, cost | $ 76,361 | $ 66,896 |
Accumulated Amortization | (60,052) | (14,632) |
Intangible assets, net | 16,309 | 52,264 |
Transformations Exercise Fitness Program [Member] | ||
Total, cost | 62,500 | 62,500 |
Trademark and Patent [Member] | ||
Total, cost | 8,277 | 4,396 |
Computer Software [Member] | ||
Total, cost | $ 5,584 |
Short Term Financing (Details N
Short Term Financing (Details Narrative) - USD ($) | May 03, 2016 | Jun. 30, 2016 | Jun. 30, 2015 |
Original issue discount amount | $ 154,462 | $ 277,070 | |
Securities Purchase Agreement [Member] | Single Accredited Investor [Member] | |||
Debt principal amount | $ 125,000 | ||
Debt maturity date | Dec. 31, 2016 | ||
Original issue discount amount | $ 20,000 | ||
Debt issued to pay related party debt expenses | 5,000 | ||
Proceeds from related party debt | $ 100,000 | ||
Debt bear interest rate | 15.00% | ||
Debt default rate | 125.00% |
Note Payable (Details Narrative
Note Payable (Details Narrative) - USD ($) | Oct. 20, 2015 | Feb. 06, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Jun. 12, 2014 | Jun. 10, 2014 |
Debt Instrument [Line Items] | ||||||
Note payable | $ 2,712,787 | $ 2,000,000 | ||||
Warrant [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Percentage of granted warrants acquire | 10.00% | |||||
Note payable fair market value | $ 15,000,000 | |||||
Dividend yield | 0.00% | |||||
Expected life | 10 years | |||||
Risk free rate of return | 2.92% | |||||
Expected volatility | 0.00% | |||||
Estimated value of warrants | $ 377,480 | |||||
PIMCO Note Payable [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Company drew an additional funds | $ 500,000 | |||||
Note due date | Jul. 12, 2017 | |||||
PIMCO Note Payable [Member] | Delayed Draw Note Facility [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Company drew an additional funds | $ 500,000 | |||||
Note payable to the PIMCO Funds ("PIMCO") | $ 2,000,000 | |||||
PIMCO [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Company drew an additional funds | $ 500,000 | |||||
Note Purchase Agreement [Member] | PIMCO [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Note payable issuance | $ 2,500,000 | |||||
Note Purchase Agreement [Member] | PIMCO [Member] | Senior Secured Note [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Note payable | $ 1,500,000 | |||||
Note bears interest rate | 14.00% | |||||
Note effective interest rate | 21.00% |
Note Payable - Schedule of Note
Note Payable - Schedule of Note Payable (Details) - USD ($) | Jun. 30, 2016 | Jun. 30, 2015 |
Debt Disclosure [Abstract] | ||
Note payable | $ 2,712,787 | $ 2,000,000 |
Less: unamortized loan discount | (154,462) | (277,070) |
Less: unamortized debt issuance costs | (79,605) | (102,641) |
Total Note Payable, net | $ 2,478,720 | $ 1,620,289 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) | 1 Months Ended | 12 Months Ended | |
Jun. 30, 2014USD ($) | Jun. 30, 2016USD ($)Officers | Jun. 30, 2015USD ($) | |
Related Party Transaction [Line Items] | |||
Salaries and bonuses payable | $ 95,620 | $ 95,620 | |
Number of officers and membership holders | Officers | 4 | ||
TD Legacy [Member] | |||
Related Party Transaction [Line Items] | |||
Due from related parties, current | $ 100,000 | ||
Transaction fee | 100,000 | ||
Related party receivable | $ 100,000 | ||
Windsor Court Holdings, LLC [Member] | |||
Related Party Transaction [Line Items] | |||
Related party note payable | $ 500,000 | ||
Ownership percent | 25.00% |
Licensing Agreements (Details N
Licensing Agreements (Details Narrative) - USD ($) | Apr. 10, 2014 | Oct. 02, 2013 | Jun. 30, 2016 | Jun. 30, 2015 |
Total royalty revenue | $ 15,413 | $ 205,439 | ||
Dethrone Royalty Holdings, Inc [Member] | ||||
Percentage of royalties revenue | 10.00% | |||
Number of common stock shares received to royalty payments | 5,437,603 | |||
Common stock trading value | $ 114,190 | |||
Total royalty revenue | 0 | 75,000 | ||
Partner Business Importacao e Exportacao, LTDA [Member] | ||||
Percentage of royalties revenue | 10.00% | |||
Total royalty revenue | 0 | 75,000 | ||
Eye Fitness Pty Ltd [Member] | ||||
Total royalty revenue | $ 0 | $ 0 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Net loss before income taxes | $ 1,785,588 | $ 1,593,795 |
Federal [Member] | ||
Income tax net operating losses | $ 3,400,000 | |
Net operating losses expire date | expire at various dates beginning in 2028 |
Income Taxes - Schedule of Prov
Income Taxes - Schedule of Provision for Income Taxes (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Income Taxes - Schedule Of Provision For Income Taxes Details | ||
Current taxes | $ (710,664) | $ (609,092) |
Deferred taxes | 710,664 | 609,092 |
Total |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Income Taxes - Schedule Of Effective Income Tax Rate Reconciliation Details | ||
Income tax liability (benefit) at the U.S statutory income tax and California Franchise tax rates | (39.80%) | (39.80%) |
Loss on marketable securities | ||
Amortization of loan discount | 2.90% | 2.60% |
Other differences | 0.00% | 0.10% |
Change in valuation allowance | 36.90% | 37.10% |
Total |
Income Taxes - Schedule of Net
Income Taxes - Schedule of Net Deferred Tax Assets (Details) - USD ($) | Jun. 30, 2016 | Jun. 30, 2015 |
Income Taxes - Schedule Of Net Deferred Tax Assets Details | ||
Net operating loss carry-forward | $ 1,212,842 | $ 502,178 |
Basis differences on marketable securities | 45,448 | |
Total, deferred noncurrent tax asset | 1,212,842 | 547,626 |
Value of warrants recorded as loan discount | 110,274 | |
Other, net | ||
Total deferred noncurrent tax liabilities | 110,274 | |
Total, deferred noncurrent tax asset, net | 1,212,842 | 437,352 |
Valuation allowance | (1,212,842) | (437,352) |
Total |
Stockholders' Deficit (Details
Stockholders' Deficit (Details Narrative) - USD ($) | Jun. 21, 2016 | Jun. 02, 2016 | May 25, 2016 | May 24, 2016 | May 19, 2016 | May 18, 2016 | Apr. 18, 2016 | Feb. 23, 2016 | Nov. 17, 2015 | Oct. 20, 2015 | Sep. 30, 2015 | Jul. 15, 2015 | Jul. 02, 2015 | Jun. 30, 2016 | Jun. 30, 2015 |
Class of Stock [Line Items] | |||||||||||||||
Number of common stock shares issued for employee as performance bonus | 1,587,500 | ||||||||||||||
Fair value of common stock on note payable as loan fee in consideration | $ 50,000 | ||||||||||||||
Number of common stock value issued for services | $ 244,814 | ||||||||||||||
Six Employees [Member] | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Number of stock options issued | 215,000 | ||||||||||||||
Employees [Member] | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Number of common stock shares issued | 50,000 | ||||||||||||||
Number of common stock value issued | $ 60,000 | ||||||||||||||
Consultant [Member] | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Number of common stock shares issued for services | 50,000 | ||||||||||||||
Investor [Member] | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Number of common stock shares issued for services | 25,000 | 100,000 | |||||||||||||
Number of common stock value issued for services | $ 15,000 | $ 60,000 | |||||||||||||
Investor [Member] | Equity Purchase Agreement [Member] | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Number of common stock shares issued | 250,000 | 200,000 | |||||||||||||
Number of common stock value issued | $ 56,250 | $ 60,000 | |||||||||||||
Marketing Consultant [Member] | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Number of common stock shares issued for services | 5,307 | ||||||||||||||
Number of common stock value issued for services | $ 3,200 | ||||||||||||||
Marketing [Member] | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Number of common stock shares issued for services | 10,000 | ||||||||||||||
Number of common stock value issued for services | $ 6,000 | ||||||||||||||
PIMCO [Member] | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Common stock shares issued as loan fee in consideration | 50,000 | ||||||||||||||
Fair value of common stock on note payable as loan fee in consideration | $ 50,000 | ||||||||||||||
Company drew an additional funds | $ 500,000 | ||||||||||||||
Signing Bonus [Member] | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Number of common stock shares issued | 10,000 | 75,000 | |||||||||||||
Number of common stock value issued | $ 9,000 | $ 75,000 |
Commitments and Contingencies41
Commitments and Contingencies (Details Narrative) | Jun. 26, 2015USD ($)$ / sharesshares | Jun. 18, 2015USD ($)ft²$ / sharesshares | Jun. 05, 2015USD ($) | Feb. 26, 2015USD ($)shares | Dec. 17, 2014USD ($) | Jun. 30, 2016USD ($)shares | Jun. 30, 2015USD ($) |
Other Commitments [Line Items] | |||||||
Lease expiration date | Aug. 31, 2016 | ||||||
Sublease rent expense | $ 5,000 | ||||||
Rent expense | $ 182,952 | $ 59,747 | |||||
Cash payment of purchase price | 9,465 | 11,896 | |||||
Number of common stock value issued for purchases of assets | 55,000 | 55,000 | |||||
Equity Purchase Agreement [Member] | Kodiak Capital LLC [Member] | |||||||
Other Commitments [Line Items] | |||||||
Long-term purchase commitment, amount | $ 5,000,000 | $ 5,000,000 | |||||
Noncontrolling interest, ownership percentage by noncontrolling owners | 9.99% | ||||||
Purcahse agreement termination closing date | Dec. 31, 2016 | Dec. 31, 2016 | |||||
Registration Rights Agreement [Member] | Kodiak Capital LLC [Member] | |||||||
Other Commitments [Line Items] | |||||||
Registration payment arrangement, maximum potential consideration | $ 5,000,000 | ||||||
Asset Purchase Agreement [Member] | |||||||
Other Commitments [Line Items] | |||||||
Total purchase price | $ 62,500 | ||||||
Cash payment of purchase price | $ 7,500 | ||||||
Number of common stock shares issued for purchases of assets | shares | 55,000 | ||||||
Number of common stock value issued for purchases of assets | $ 55,000 | ||||||
Performance based earn out period | 18 months | ||||||
Performance percentage | 50.00% | ||||||
Maximum earn out amount | $ 187,500 | ||||||
Stock Purchase Agreement [Member] | Ever Blooming Industrial Limited [Member] | |||||||
Other Commitments [Line Items] | |||||||
Number of common stock shares issued for consideration of future inventory purchases | shares | 100,000 | ||||||
Common stock price per share | $ / shares | $ 1 | ||||||
Number of common stock value issued for consideration of future inventory purchases | $ 100,000 | ||||||
Stock Purchase Agreement [Member] | Yayu General Machinery Co., LTD[Member] | |||||||
Other Commitments [Line Items] | |||||||
Number of common stock shares issued for consideration of future inventory purchases | shares | 200,000 | ||||||
Common stock price per share | $ / shares | $ 1 | ||||||
Number of common stock value issued for consideration of future inventory purchases | $ 200,000 | ||||||
Vendor Credit Agreements [Member] | |||||||
Other Commitments [Line Items] | |||||||
Prepaid expenses | $ 105,000 | ||||||
Vendor Credit Agreements [Member] | Ever Blooming Industrial Limited [Member] | |||||||
Other Commitments [Line Items] | |||||||
Prepaid expenses | $ 100,000 | ||||||
Vendor Credit Agreements [Member] | Yayu General Machinery Co., LTD[Member] | |||||||
Other Commitments [Line Items] | |||||||
Prepaid expenses | $ 200,000 | ||||||
2014 Stock Incentive Plan [Member] | |||||||
Other Commitments [Line Items] | |||||||
Share-based compensation arrangement by share-based payment award, number of shares available for grant | shares | 3,000,000 | ||||||
Number of stock options issued | shares | 1,587,500 | ||||||
Lease Agreement [Member] | |||||||
Other Commitments [Line Items] | |||||||
Operating lease period | 38 months | ||||||
Lease expiration date | Oct. 31, 2018 | ||||||
Operating leases rent expense | $ 16,504 | ||||||
Area of square feet | ft² | 25,788 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Future Minimum Lease Payments Under Operating Lease (Details) | Jun. 30, 2016USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,017 | $ 202,508 |
2,018 | 208,583 |
2,019 | 70,038 |
Total | $ 481,129 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - Subsequent Event [Member] - USD ($) | Sep. 02, 2016 | Aug. 03, 2016 | Aug. 13, 2016 |
Equity Purchase Agreement [Member] | Investor [Member] | |||
Number of common stock shares issued | 550,000 | ||
Number of common stock value issued | $ 86,625 | ||
Crown Financial, LLC [Member] | |||
Invoices advanced percentage | 80.00% | ||
Collection description | Depending on the length of time taken to collect the invoices, the Company will receive additional payments from Crown ranging from 18.25% if collected within 20 days to 0% if collected in 120 days. Crown has the right to require the Company to repurchase unpaid invoices outstanding for more than 120 days. | ||
Crown Financial, LLC [Member] | Investment Agreement [Member] | |||
Maximum value of common stock authorized to sale | $ 5,000,000 | ||
Value of put option | $ 500,000 |