Cover
Cover - shares | 6 Months Ended | |
Dec. 31, 2022 | Feb. 13, 2023 | |
Cover [Abstract] | ||
Entity Registrant Name | UPEXI, INC. | |
Entity Central Index Key | 0001775194 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Current Fiscal Year End Date | --06-30 | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | true | |
Entity Current Reporting Status | No | |
Document Period End Date | Dec. 31, 2022 | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2023 | |
Entity Ex Transition Period | true | |
Entity Common Stock Shares Outstanding | 17,960,748 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 333-255266 | |
Entity Incorporation State Country Code | NV | |
Entity Tax Identification Number | 83-3378978 | |
Entity Address Address Line 1 | 17129 US Hwy 19 N | |
Entity Address City Or Town | Clearwater | |
Entity Address State Or Province | FL | |
Entity Address Postal Zip Code | 33760 | |
City Area Code | 701 | |
Local Phone Number | 353-5425 | |
Security 12b Title | Common Stock, par value $0.001 | |
Trading Symbol | UPXI | |
Security Exchange Name | NASDAQ | |
Entity Interactive Data Current | Yes |
CONDENSED CONSOLDIATED BALANCE
CONDENSED CONSOLDIATED BALANCE SHEETS - USD ($) | Dec. 31, 2022 | Jun. 30, 2022 |
Current assets | ||
Cash | $ 4,508,161 | $ 7,149,806 |
Accounts receivable | 8,869,297 | 1,137,637 |
Inventory | 6,779,997 | 4,725,685 |
Deferred tax asset, current | 0 | 462,070 |
Prepaid expenses and other receivables | 1,967,088 | 840,193 |
Assets of discontinued operations, net | 0 | 6,449,210 |
Total current assets | 22,124,543 | 20,764,601 |
Property and equipment, net | 7,231,404 | 7,343,783 |
Intangible assets, net | 18,712,409 | 10,641,382 |
Goodwill | 15,342,089 | 5,887,393 |
Deferred tax asset | 2,479,918 | 2,002,759 |
Investments - Bloomios | 10,081,255 | 0 |
Other assets | 56,703 | 100,372 |
Right-of-use asset | 608,488 | 926,570 |
Total other assets | 54,512,266 | 26,902,259 |
Total assets | 76,636,809 | 47,666,860 |
Current liabilities | ||
Accounts payable | 4,162,121 | 2,018,541 |
Accrued compensation | 718,764 | 531,259 |
Deferred revenue | 31,724 | 105,848 |
Accrued liabilities | 3,898,318 | 955,327 |
Acquisition payable | 3,978,523 | 0 |
Current portion of notes payable | 2,117,683 | 5,424,752 |
Current portion of operating lease payable | 187,777 | 267,029 |
Total current liabilities | 15,094,910 | 9,302,756 |
Operating lease payable, net of current portion | 375,552 | 700,411 |
Notes payable, net of current portion | 24,420,152 | 8,876,949 |
Total long-term liabilities | 24,795,704 | 9,577,360 |
Commitments and contingencies | 0 | 0 |
Stockholders' equity | ||
Preferred stock, $0.001 par value, 100,000,000 shares authorized, and 500,000 and 500,000 shares issued and outstanding, respectively | 500 | 500 |
Common stock, $0.001 par value, 100,000,000 shares authorized, and 17,960,748 and 16,713,345 shares issued and outstanding, respectively | 17,960 | 16,713 |
Additional paid in capital | 43,105,223 | 34,985,597 |
Accumulated deficit | (6,198,722) | (6,270,886) |
Total stockholders' equity attributable to Upexi, Inc. | 36,924,961 | 28,731,924 |
Non-controlling interest in subsidiary | (178,766) | 54,820 |
Total stockholders' equity | 36,746,195 | 28,786,744 |
Total liabilities and stockholders' equity | $ 76,636,809 | $ 47,666,860 |
CONDENSED CONSOLDIATED BALANC_2
CONDENSED CONSOLDIATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2022 | Jun. 30, 2022 |
CONDENSED CONSOLDIATED BALANCE SHEETS | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 100,000,000 | 100,000,000 |
Preferred stock, shares issued | 500,000 | 500,000 |
Preferred stock, shares outstanding | 500,000 | 500,000 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common Stock, shares authorized | 100,000,000 | 100,000,000 |
Common Stock, shares issued | 17,960,748 | 16,713,345 |
Common Stock, shares outstanding | 17,960,748 | 16,713,345 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Revenues | ||||
Revenue | $ 27,086,672 | $ 4,983,557 | $ 38,643,683 | $ 8,853,667 |
Cost of Revenue | 16,773,493 | 711,246 | 22,289,773 | 1,982,975 |
Gross profit | 10,313,179 | 4,272,311 | 16,353,910 | 6,870,692 |
Operating expenses | ||||
Sales and marketing | 3,707,925 | 1,735,194 | 5,733,385 | 2,735,258 |
Distribution costs | 3,575,545 | 821,630 | 6,063,379 | 933,463 |
General and administrative expenses | 2,910,655 | 3,003,919 | 5,409,524 | 4,586,351 |
Share-based compensation | 1,052,847 | 852,455 | 1,980,173 | 1,479,293 |
Amortization of acquired intangible assets | 962,077 | 236,001 | 1,842,973 | 304,835 |
Depreciation | 242,551 | 159,073 | 437,048 | 246,579 |
Total operating expenses | 12,451,600 | 6,808,272 | 21,466,482 | 10,285,779 |
Loss from operations | (2,138,421) | (2,535,960) | (5,112,572) | (3,415,086) |
Other income (expense), net | ||||
Interest (expense) income, net | (1,790,144) | (48,541) | (2,225,973) | (41,994) |
Change in derivative liability | (3,540) | 0 | (1,770) | 0 |
Gain on sale of Infusionz and select assets | 7,564,363 | 0 | 7,564,363 | 0 |
Gain on SBA PPP loan extinguishment | 0 | 0 | 0 | 300,995 |
Other income (expense), net | 5,770,679 | (48,541) | 5,336,620 | 259,001 |
Income (loss) on operations before income tax | 3,632,258 | (2,584,501) | 224,048 | (3,156,085) |
Income tax expense | (755,253) | 493,936 | 47,052 | 235,033 |
Net income (loss) from continuing operations | 2,877,005 | (3,078,437) | 176,996 | (3,391,118) |
(Loss) income from discontinued operations | (292,907) | 2,820,190 | (338,418) | 3,967,662 |
Net loss attributable to non-controlling interest | (85,581) | 0 | (233,586) | 0 |
Net income (loss) attributable to Upexi, Inc. | $ 2,669,679 | $ (258,247) | $ 72,164 | $ 576,544 |
Basic income (loss) per share: | ||||
Income (loss) per share from continuing operations | $ 0.16 | $ (0.32) | $ 0.01 | $ (0.22) |
(Loss) income per share from discontinued operations | (0.02) | 0.29 | (0.02) | 0.26 |
Total income (loss) per share | 0.16 | (0.32) | 0.01 | (0.22) |
Diluted income (loss) per share: | ||||
Income (loss) per share from continuing operations | 0.15 | (0.32) | 0.01 | (0.20) |
(Loss) income per share from discontinued operations | (0.02) | 0.29 | (0.02) | 0.23 |
Total income (loss) per share | $ 0.15 | $ (0.32) | $ 0.01 | $ (0.20) |
Basic weighted average shares outstanding | 17,540,427 | 9,755,663 | 17,126,886 | 15,452,453 |
Fully diluted weighted average shares outstanding | 19,030,705 | 9,755,663 | 18,617,164 | 17,220,564 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT) (UNAUDITED) - USD ($) | Total | Common Stock | Preferred Stock | Additional Paid-In Capital | Accumulated Deficit | Noncontrolling Interest |
Balance, shares at Jun. 30, 2021 | 15,262,394 | 500,000 | ||||
Balance, amount at Jun. 30, 2021 | $ 21,217,973 | $ 15,262 | $ 500 | $ 25,372,247 | $ (4,170,036) | $ 0 |
Issuance of common stock for acquisition of Infusionz, shares | 306,945 | |||||
Issuance of common stock for acquisition of Infusionz, amount | 1,764,876 | $ 307 | 0 | 1,764,569 | 0 | 0 |
Issuance of common stock for acquisition of VitaMedica, shares | 100,000 | |||||
Issuance of common stock for acquisition of VitaMedica, amount | 482,000 | $ 100 | 0 | 481,900 | 0 | 0 |
Issuance of common stock for acquisition costs, shares | 7,000 | |||||
Issuance of common stock for acquisition costs, amount | 33,740 | $ 7 | 0 | 33,733 | 0 | 0 |
Stock based compensation | 593,098 | $ 0 | 0 | 593,098 | 0 | 0 |
Issuance of common stock for services, shares | 35,000 | |||||
Issuance of common stock for services, amount | 175,000 | $ 35 | 0 | 174,965 | 0 | 0 |
Net income for the three months ended September 30, 2021 | 511,711 | $ 0 | $ 0 | 0 | 511,711 | 0 |
Balance, shares at Sep. 30, 2021 | 15,711,339 | 500,000 | ||||
Balance, amount at Sep. 30, 2021 | 24,778,398 | $ 15,711 | $ 500 | 28,420,512 | (3,658,325) | 0 |
Balance, shares at Jun. 30, 2021 | 15,262,394 | 500,000 | ||||
Balance, amount at Jun. 30, 2021 | $ 21,217,973 | $ 15,262 | $ 500 | 25,372,247 | (4,170,036) | 0 |
Issuance of common stock for acquisition costs, shares | 4,000,000 | |||||
Issuance of common stock for acquisition costs, amount | $ 33,740 | |||||
Stock based compensation | 1,270,553 | |||||
Balance, shares at Dec. 31, 2021 | 16,378,006 | 500,000 | ||||
Balance, amount at Dec. 31, 2021 | 29,520,686 | $ 16,378 | $ 500 | 33,097,300 | (3,593,492) | 0 |
Balance, shares at Sep. 30, 2021 | 15,711,339 | 500,000 | ||||
Balance, amount at Sep. 30, 2021 | 24,778,398 | $ 15,711 | $ 500 | 28,420,512 | (3,658,325) | 0 |
Stock based compensation | 677,455 | 0 | 0 | 677,455 | 0 | 0 |
Net income for the three months ended September 30, 2021 | 64,833 | $ 0 | 0 | 0 | 64,833 | 0 |
Issuance of common stock for acquisition of Interactive Offers, shares | 666,667 | |||||
Issuance of common stock for acquisition of Interactive Offers, amount | 4,000,000 | $ 667 | $ 0 | 3,999,333 | 0 | 0 |
Balance, shares at Dec. 31, 2021 | 16,378,006 | 500,000 | ||||
Balance, amount at Dec. 31, 2021 | 29,520,686 | $ 16,378 | $ 500 | 33,097,300 | (3,593,492) | 0 |
Balance, shares at Jun. 30, 2022 | 16,713,345 | 500,000 | ||||
Balance, amount at Jun. 30, 2022 | 28,731,924 | |||||
Balance, amount at Jun. 30, 2022 | 28,786,744 | $ 16,713 | $ 500 | 34,985,597 | (6,270,886) | 54,820 |
Stock based compensation | 927,326 | 0 | 0 | 927,326 | 0 | 0 |
Net income for the three months ended September 30, 2021 | (2,745,520) | 0 | 0 | 0 | (2,597,515) | (148,005) |
Amortization of common stock issuance for services | 70,350 | $ 0 | $ 0 | 70,350 | 0 | 0 |
Balance, shares at Sep. 30, 2022 | 16,713,345 | 500,000 | ||||
Balance, amount at Sep. 30, 2022 | 27,038,900 | $ 16,713 | $ 500 | 35,983,273 | (8,868,401) | (93,185) |
Balance, shares at Jun. 30, 2022 | 16,713,345 | 500,000 | ||||
Balance, amount at Jun. 30, 2022 | 28,731,924 | |||||
Balance, amount at Jun. 30, 2022 | 28,786,744 | $ 16,713 | $ 500 | 34,985,597 | (6,270,886) | 54,820 |
Stock based compensation | 1,980,173 | |||||
Balance, shares at Dec. 31, 2022 | 17,960,748 | 500,000 | ||||
Balance, amount at Dec. 31, 2022 | 36,924,961 | |||||
Balance, amount at Dec. 31, 2022 | 36,746,195 | $ 17,960 | $ 500 | 43,105,223 | (6,198,722) | (178,766) |
Balance, shares at Sep. 30, 2022 | 16,713,345 | 500,000 | ||||
Balance, amount at Sep. 30, 2022 | 27,038,900 | $ 16,713 | $ 500 | 35,983,273 | (8,868,401) | (93,185) |
Stock based compensation | 1,052,847 | 0 | 0 | 1,052,847 | 0 | 0 |
Net income for the three months ended September 30, 2021 | 2,584,098 | 0 | 0 | 0 | 2,669,679 | (85,581) |
Amortization of common stock issuance for services | 70,350 | $ 0 | 0 | 70,350 | 0 | 0 |
Issuance of common stock for acquisition of E-Core, shares | 1,247,403 | |||||
Issuance of common stock for acquisition of E-Core, amount | 6,000,000 | $ 1,247 | $ 0 | 5,998,753 | 0 | 0 |
Balance, shares at Dec. 31, 2022 | 17,960,748 | 500,000 | ||||
Balance, amount at Dec. 31, 2022 | 36,924,961 | |||||
Balance, amount at Dec. 31, 2022 | $ 36,746,195 | $ 17,960 | $ 500 | $ 43,105,223 | $ (6,198,722) | $ (178,766) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) | 6 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Cash flows from operating activities | ||
Net income (loss) attributable to Upexi, Inc. | $ 72,164 | $ 576,544 |
Adjustments to reconcile net income from continuing operations to net cash provided by operating activities: | ||
Depreciation and amortization | 2,280,021 | 304,835 |
Non-cash consideration for sale of Infusionz and select assets, net | (7,094,296) | 0 |
Inventory write-offs | 34,328 | 140,000 |
Bad debt expense | 0 | 1,000 |
Amortization of senior security original issue discount | (192,690) | 0 |
Noncontrolling interest | (233,586) | 0 |
Change in deferred tax asset | (15,089) | 177,674 |
Shares issued for services | 0 | 175,000 |
Shares issued for finder fee | 1,770 | 33,740 |
Stock based compensation | 1,980,173 | 1,270,553 |
Changes in assets and liabilities, net of acquired amounts | ||
Accounts receivable | (1,031,715) | 113,826 |
Inventory | 6,043,078 | (779,808) |
Prepaid expenses and other assets | (1,007,505) | (258,054) |
Operating lease payable | (86,029) | (49,468) |
Accounts payable and accrued liabilities | 2,916,158 | (699,488) |
Deferred revenue | (74,124) | 209,833 |
Net cash provided by operating activities - Continuing Operations | 3,592,658 | 1,216,187 |
Net cash used in operating activities - Discontinued Operations | 0 | (826,188) |
Net cash provided by operating activities | 3,592,658 | 389,999 |
Cash flows from investing activities | ||
Acquisition of Lucky Tail | (2,500,000) | 0 |
Acquisition of VitaMedica, Inc., net of cash acquired | (500,000) | (2,074,589) |
Acquisition of New England Technology, Inc. | 914,611 | 0 |
Acquisition of Interative Offers, net of cash acquired | 0 | (1,854,193) |
Proceeds from the sale of Infusionz and selected assets | 5,500,000 | 0 |
Acquisition of property and equipment | (183,969) | (4,282,430) |
Net cash provided by (used in) investing activities - Continuing Operations | 3,230,642 | (8,211,212) |
Net cash (used in) provided by investing activities - Discontinued Operations | 0 | 0 |
Net cash provided by (used in) investing activities | 3,230,642 | (8,211,212) |
Cash flows from financing activities | ||
Repayment of notes payable | (311,938) | 0 |
Repayment of the senior convertible notes payable | (6,382,989) | (151,004) |
Payment on line of credit | (7,201,079) | 0 |
Proceeds from note payable | 0 | 33,967 |
Proceeds on note payable on building | 3,000,000 | 0 |
Repayment on note payable on building | (38,939) | 0 |
Proceeds on note payable, related party | 1,470,000 | 0 |
Net cash used in financing activities - Continuing Operations | (9,464,945) | (117,037) |
Net cash (used in) provided by financing activities - Discontinued Operations | 0 | 0 |
Net cash used in financing activities | (9,464,945) | (117,037) |
Net decrease in cash - Continuing Operations | (2,641,645) | (7,112,062) |
Net decrease in cash - Discontinued Operations | 0 | (826,188) |
Cash, beginning of period | 7,149,806 | 14,534,211 |
Cash, end of period | 4,508,161 | 6,595,961 |
Supplemental cash flow disclosures | ||
Interest paid | 0 | 0 |
Income tax paid | 0 | 0 |
Non-cash financing activities | ||
Issuance of common stock for acquisition of Infusionz | 0 | 1,764,876 |
Issuance of common stock for acquisition of VitaMedica | 0 | 482,000 |
Issuance of debt for acquisition of VitaMedica | 0 | 1,000,000 |
Liabilities assumed from acquisition of E-Core | (7,712,168) | 0 |
Non-cash consideration received from Bloomios for the sale of Infusionz | 18,000,000 | 0 |
Assets available for sale | 6,446,210 | 6,786,289 |
Liabilities assumed from acquisition of VitaMedica | 0 | $ (309,574) |
Issuance of stock for acquisition of Interactive | 4,000,000 | |
Liabilities assumed from acquisition of Interactive | $ 0 | $ (1,099,993) |
Description of the Business
Description of the Business | 6 Months Ended |
Dec. 31, 2022 | |
Description of the Business | |
Description of the Business | Note 1. Description of the Business Upexi is a multi-faceted brand owner with established brands in health, wellness, pet, beauty and other growing markets. We operate in emerging industries with high growth trends and look to drive organic growth of our current brands. We focus on direct to consumer and Amazon brands that are scalable and have anticipated, high industry growth trends. Our goal is to continue to accumulate consumer data and build out a significant customer database across all industries we sell into. The growth of our current customer database has been key to the year-over-year gains in sales and profits. To drive additional growth, we have and will continue to acquire profitable Amazon and eCommerce businesses that can scale quickly and reduce costs through corporate synergies. We utilize our in-house SaaS programmatic ad technology to help achieve a lower cost per acquisition and accumulate consumer data for increased cross-selling between our growing portfolio of brands. The Company primarily conducts its business operations through the following subsidiaries: ☐ HAVZ, LLC, d/b/a/ Steam Wholesale, a California limited liability company o SWCH, LLC, a Delaware limited liability company o Cresco Management, LLC, a California limited liability company ☐ Trunano Labs, Inc., a Nevada corporation ☐ MW Products, Inc., a Nevada corporation ☐ Upexi Holding, LLC, a Delaware limited liability company o Upexi Pet Products, LLC, a Delaware limited liability company ☐ VitaMedica, Inc, a Nevada corporation ☐ Upexi Enterprise, LLC, a Delaware limited liability company o Upexi Property & Assets, LLC, a Delaware limited liability company ■ Upexi 17129 Florida, LLC, a Delaware limited liability company o E-Core Technology, Inc. ☐ Interactive Offers, LLC (“Interactive”), a Delaware limited liability company ☐ Cygnet Online, LLC (“Cygnet”), a Delaware limited liability company, 55% owned We operate throughout our locations in the USA with operations in Florida, California, Nevada, and Colorado through our various Brands and entities. Upexi VitaMedica Interactive Offers Cygnet Online LuckyTail E-Core Technology, Inc. HAVZ, LLC, d/b/a/ Steam Wholesale Business Acquisitions On August 1, 2021, the Company completed an asset purchase agreement with Grove Acquisition Subsidiary, Inc., a Nevada corporation and wholly owned subsidiary of the Company and the members of VitaMedica Corporation, a California corporation to purchase all the assets and assume certain liabilities of VitaMedica. VitaMedica is a leading online seller of supplements for surgery, recovery, skin, beauty, health, and wellness. On October 1, 2021, the Company completed an equity interest purchase agreement with Gyprock Holdings LLC, a Delaware limited liability company, MFA Holdings Corp., a Florida corporation and Sherwood Ventures, LLC, a Texas limited liability company to acquire all of the outstanding membership interest of Interactive Offers, LLC, a Delaware limited liability corporation. On April 1, 2022, the Company completed a securities purchase agreement with a single investor to acquire 55% of the equity interest in Cygnet Online, LLC, a Delaware limited liability corporation. The agreement also enables the Company to purchase the remaining 45% over the following two years. On August 12, 2022, the Company completed an asset purchase agreement with GA Solutions, LLC, a Delaware limited liability company (“LuckyTail”), pursuant to which the Company acquired substantially all assets of LuckyTail. LuckyTail sells pet nail grinders and other pet products through various sales channels including some international sales channels. On October 31, 2022, the Company and its wholly owned subsidiary Upexi Enterprise, LLC, completed a securities purchase agreement to purchase the outstanding stock of E-Core Technology, Inc. d/b/a New England Technology, Inc. (“E-Core”), a Florida corporation. E-Core distributes non-owned branded products to national retail distributors and has branded products in the toy industry that E-Core sells direct to consumers through online sales channels and to national retail distributors. Business Divested On October 26, 2022, the Company executed a membership interest purchase agreement to sell 100% of the membership interests of Infusionz LLC, a Colorado limited liability company (“Infusionz”), included in the sale was all rights to Infusionz brands and the manufacturing of certain private label business. Infusionz was originally purchased by the Company in July of 2020. The divestiture of Infusionz and related private label manufacturing represents a strategic shift in our operations and will allow us to become a predominantly product distribution focused company for both our Company owned brands and non-owned brands. Accordingly, the results of the business were classified as discontinued operations in our condensed statements of operations and excluded from both continuing operations and segment results for all periods presented. Basis of Presentation and Principles of Consolidation The Company’s condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The condensed consolidated financial statements include the accounts of all subsidiaries in which the Company holds a controlling financial interest as of December 31, 2022, and June 30, 2022. In the opinion of management, the unaudited interim condensed consolidated financial statements reflect all adjustments of a normal recurring nature that are necessary for a fair presentation of the results for the interim periods presented. All significant intercompany transactions and balances are eliminated in consolidation. However, the results of operations included in such financial statements may not necessarily be indicative of annual results. Discontinued Operations A discontinued operation is a component of an entity that has either been disposed of or that is classified as held for sale, which represents a separate major line of business or geographic area of options and is part of a single coordinated plan to dispose of a separate line of business or geographical area of operations. In accordance with the rules regarding the presentation of discontinued operations, the assets, liabilities, and activity of Infusionz and certain manufacturing business have been reclassified as discontinued operations for all periods presented. Fair Value of Financial Instruments ASC Topic 820, Fair Value Measurement ASC 820 identified fair value as the exchange price, or exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As a basis for considering market participant assumptions in fair value measurements, ASC 820 established a three-tier fair value hierarchy that distinguishes between the following: Level 1—Quoted market prices (unadjusted) in active markets for identical assets or liabilities. Level 2—Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable, such as quoted market prices, interest rates and yield curves. Level 3—Unobservable inputs developed using estimates or assumptions developed by the Company, which reflect those that a market participant would use. To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized as Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The carrying amounts reflected in the balance sheets for cash and cash equivalents, prepaid expenses, other current assets, accounts payable and accrued expenses approximate their fair values, due to their short-term nature. For the three and six months ended December 31, 2022, management believed it necessary to record a reserve against the debt and equity instruments obtained in the sale of Infusionz of $8,500,000. Reclassification Certain reclassifications have been made to the condensed consolidated financial statements as of and for the year ended June 30, 2022, and for the three and six months ended December 31, 2021 to conform to the presentation as of and for the three and six months ended December 31, 2022. |
Acquisition
Acquisition | 6 Months Ended |
Dec. 31, 2022 | |
Acquisition | |
Acquisition | Note 2. Acquisitions VitaMedica Corporation Effective August 1, 2021, the Company entered into and closed an asset purchase agreement (the “VitaMedica Agreement”) with Grove Acquisition Subsidiary, Inc., a Nevada corporation and wholly owned subsidiary of the Company and VitaMedica Corporation, a California corporation, David Rahm and Yvette La-Garde (“Seller”). VitaMedica Corporation is a leading online seller of supplements for surgery, recovery, skin, beauty, health and wellness. The Company agreed to purchase substantially all of the assets of the Seller as of August 1, 2021. The transaction was valued at an estimated fair value of $3,556,589. The purchase price consisted of 100,000 shares of the Company’s common stock valued at $482,000, $4.82 per common share, the closing price on August 4, 2021 (close date of the transaction), a non-negotiable promissory note from the Company in favor of the Seller in the original principal amount of $500,000, a non-negotiable convertible promissory note from the Company in favor of the Seller in the original principal amount of $500,000, convertible at $5.00 per share for a total of 100,000 shares of the Company’s Common Stock and a cash payment of $2,000,000 which was paid on August 5, 2021. In addition, a $74,589 cash payment was made on October 29, 2021, for excess working capital acquired. A finder’s fee of $103,740 was paid by the Company, $70,000 in cash and 7,000 shares of common stock, valued at $33,740, $4.82 per common share, the closing market price on August 4, 2021 (close date of the transaction). These fees were expensed during the three and six months ended December 31, 2021. The assets and liabilities of VitaMedica are recorded at their respective fair values and the following table summarizes these values based on the balance sheet on August 1, 2021, the effective closing date. Tangible Assets $ 860,738 Intangible Assets 1,935,000 Goodwill 960,780 Liabilities Acquired (199,929 ) Total Purchase Price $ 3,556,589 The Company’s condensed consolidated financial statements for the three and six months ended December 31, 2022 include the actual results for VitaMedica. For the three and six months ended December 31, 2021, the Company’s condensed consolidated financial statements include the actual results of VitaMedica for the period August 1, 2021 to December 31, 2021. The acquisition of VitaMedica provided the Company with entrance into the online seller’s market for supplements for surgery, recovery, skin, beauty, health and wellness and provided improved gross margins through synergies recognized with the consolidation of manufacturing and distribution operations. These are the factors of goodwill recognized in the acquisition. Interactive Offers, LLC Effective October 1, 2021, the Company entered into an equity interest purchase agreement (the “I/O Agreement”) with Gyprock Holdings LLC, a Delaware limited liability company, MFA Holdings Corp., a Florida corporation and Sherwood Ventures, LLC, a Texas limited liability company (each an “I/O Seller” and collectively the “I/O Sellers”). The I/O Sellers owned all the membership interests in Interactive Offers, LLC, a Delaware limited liability company (“Interactive”). The Company’s CEO and Chairman, Allan Marshall, was the controlling stockholder and the president of MFA Holdings Corp, which owned 20% of the outstanding membership interests in Interactive. Interactive provides programmatic advertising with its SaaS platform which allows for programmatic advertisement placement automatically on any partners’ sites from a simple dashboard. The Company purchased all the outstanding membership interests of Interactive as of October 1, 2021. The purchase price for the sale was $4,833,630, as amended, which consisted of 560,170 shares of common stock of the Company valued at $2,733,630, $4.88 per share, the stock price on October 1, 2022, and a cash payment of $2,100,000. The assets and liabilities of Interactive are recorded at their respective fair values and the following table summarizes these values based on the balance sheet on October 1, 2021, the effective closing date. Tangible Assets $ 413,465 Intangible Assets 2,631,000 Goodwill 2,889,158 Liabilities Acquired (1,099,993 ) Total Purchase Price $ 4,833,630 The Company’s condensed consolidated financial statements for the three and six months ended December 31, 2022 include the actual results of Interactive. The acquisition of Interactive provided the Company with a solid entry into the programmatic ad space and added a unique in-house advertising platform to leverage and scale its current and future brands. Access by sellers to Interactive’s ad platform provides further product sales growth and advertising efficiencies. These are the factors of goodwill recognized in the acquisition. Cygnet Online, LLC The Company entered into a securities purchase agreement to purchase Cygnet Online, LLC, a Delaware limited liability company effective as of April 1, 2022. The Company purchased 55% of the equity in the business with a purchase price of $5,100,000, as amended. The consideration consisted of $1,500,000 in cash, $2,550,000 or 555,489 shares of restricted common stock and a non-negotiable convertible promissory note in the original principal amount of $1,050,000, which can be converted into common stock of the Company at a price of $6.00 per share and is payable in full, to the extent not previously converted, on April 15, 2023. The purchase price is subject to a two-way adjustment based on the amount of Closing Working Capital, as defined in the agreement. Additionally, Seller will be paid up to $700,000 in the form of an earn-out payment based on 7% of Cygnet’s net revenue during the earn-out period, in accordance with and subject to the terms and conditions of the agreement. The earn-out payment, if any, will be paid 50% in immediately available funds and 50% in Company restricted common stock. The Agreement contains customary confidentiality, non-competition, and non-solicitation provisions for the Seller and Seller’s affiliates. In addition, the Company has the right to purchase Seller’s remaining membership interests in Cygnet. Commencing on October 10, 2022 and continuing for 180 days thereafter, the Company has the right, but not the obligation, to cause the Seller to sell 15% of the membership interests in Cygnet for $1,650,000 in immediately available funds. Commencing on the date that the Company completes its financial statements for the year ended December 31, 2023, and continuing for 120 days thereafter, the Company has the right, but not the obligation, to cause the Seller to sell the remaining 30% of the membership interests in Cygnet for 30% of the amount equal to four times Cygnet’s Adjusted EBITDA (as defined in the Call Agreement) for calendar year 2023, payable by wire transfer of immediately available funds equal to at least 50% of said purchase price with the balance payable through the issuance to Seller of shares of restricted common stock of the Company. The Seller has the right, but not the obligation, at any time commencing on the date that is 120 days after the date the Company completes Cygnet’s financial statements for the year ended December 31, 2023, and continuing for 90 days thereafter, to cause the Company to purchase all of the Seller’s remaining membership interests in Cygnet for a purchase price equal to the product of (i) four times Cygnet’s Adjusted EBITDA (as defined in the Put Agreement) for calendar year 2023, and (ii) the percentage of Cygnet membership interests being sold, payable in shares of restricted common stock of the Company. The assets and liabilities of Cygnet are recorded at their preliminary respective fair values as of the closing date of the Cygnet Agreement, and the following table summarizes these values based on the balance sheet on April 1, 2022, the effective closing date. Tangible Assets $ 3,683,829 Intangible Assets 7,800,000 Goodwill 2,037,455 Liabilities Acquired (8,421,284 ) Total Purchase Price $ 5,100,000 The Company’s condensed consolidated financial statements for the three and six months ended December 31, 2022, include the actual results of Cygnet. The acquisition of Cygnet provided the Company with the opportunity to expand its operations as an Amazon and eCommerce seller. The resulting combination increased Cygnet’s product offerings through the Company’s distributors and partnerships as it continues to focus on over-the -counter supplements and beauty products. Cygnet will be the anchor company for Upexi’s Amazon strategy. These are the factors of goodwill recognized in the acquisition. LuckyTail The Company entered into an asset purchase agreement with GA Solutions, LLC to acquire substantially all assets of the business. The base consideration totals $3,000,000 plus the amount of working capital transferred to the Company. The consideration for the purchase consisted of $2,000,000, paid into escrow and released when certain assets were transferred to the Company, (ii) $500,000 payable on the latter of the release from escrow and 90 days post-closing, and (iii) $500,000 payable on the latter of the release from escrow and 180 days post-closing. In addition, the Company has agreed to purchase certain inventory from the Seller upon its valuation having been determined, at close the inventory and other current assets were estimated at $490,822. The asset purchase agreement also provides for a two-way post-closing adjustment based on a target adjusted revenue for the business acquired of $1,492,329 for the period of August 1, 2022 through December 31, 2022. The Agreement contains customary confidentiality, non-competition, and non-solicitation provisions for the Seller and Seller’s affiliates. The assets and liabilities of LuckyTail are recorded at their preliminary respective fair values as of the closing date of the asset purchase agreement, and the following table summarizes these values based on the balance sheet on August 12, 2022, the effective closing date. Tangible Assets $ 490,822 Intangible Assets 2,664,000 Goodwill 336,000 Liabilities Acquired - Total Purchase Price $ 3,490,822 The Company’s condensed consolidated financial statements for the three and six months ended December 31, 2022, include the actual results of LuckyTail from August 13, 2022, through December 31, 2022. The acquisition of LuckyTail provided the Company a foothold in the pet care industry and a strong presence on Amazon and its eCommerce store, offering nutritional and grooming products domestically and internationally. The acquisition provided both top line growth and improved EBITDA for the Company. These are the factors of goodwill recognized in the acquisition. E-Core, Inc. and its subsidiaries On October 31, 2022, Upexi, Inc. (the “Company”), and its wholly owned subsidiary Upexi Enterprises, LLC entered into a securities purchase agreement, effective October 21, 2022, to purchase 100% of E-Core Technology, Inc. (“E-Core”) d/b/a New England Technology, Inc., a Florida corporation (“New England Technology”), for $24,100,000, subject to adjustments. The consideration consisted of $3,100,000 in cash, 1,247,402 shares of the Company’s restricted common stock with a value equal to $6,000,000, two promissory notes in the original principal amount of $5,750,000 each, payable upon maturity and a convertible promissory note in the original principal amount of $3,500,000, convertible in full on the two-year anniversary of the issuance of the note at a conversion price of $4.81 per share. If the conversion right is not exercised, the principal balance will be paid in twelve monthly installments beginning on the two-year anniversary of the executed promissory note. The principal amount of the convertible promissory note is subject to a two-way adjustment based on the Company’s Adjusted EBITDA for the three-year period commencing on the closing date. In addition, on October 31, 2022, the Company issued options to purchase up to 360,000 shares of the Company’s common stock at an exercise price of $5.30 per share. The agreement contains customary confidentiality, non-competition, and non-solicitation provisions for E-Core and its affiliates. Within 90 days after the closing date, Buyer shall prepare and deliver to E-Core a statement, setting forth Buyer’s calculation of closing working capital and the purchase price resulting therefrom. The two-way post-closing adjustment based on target working capital shall be an amount equal to the closing working capital minus the target closing working capital. The assets and liabilities of E-Core are recorded at their preliminary respective fair values as of the closing date of the asset purchase agreement, and the following table summarizes these values based on the balance sheet on October 21, 2022, the effective closing date. Tangible Assets $ 15,540,288 Intangible Assets 7,250,000 Goodwill 8,988,076 Liabilities Acquired (7,712,168 ) Total Purchase Price $ 24,066,196 The Company’s condensed consolidated financial statements for the three and six months ended December 31, 2022, include the actual results of E-Core from October 21, 2022, through December 31, 2022. The acquisition of E-Core provided the Company with an entrance into the children’s toy sector as well as national retail distribution for owned and non-owned branded products. The acquisition expands the Company’s ability to leverage direct-to-consumer distribution and further develop the broad distribution capabilities of E-Core. These are the factors of goodwill recognized in the acquisition. Revenue from acquisitions included in the financial statements. Net revenue included in the six months ended: December 31, 2022 2021 VitaMedica $ 3,561,264 $ 2,406,266 Interactive 683,322 853,017 Cygnet 14,607,180 - LuckyTail 2,219,234 - E-core 13,647,412 - $ 34,718,412 $ 3,259,283 Net revenue included in the three months ended: December 31, 2022 2021 VitaMedica $ 1,943,955 $ 1,417,483 Interactive 345,110 - Cygnet 7,359,661 - LuckyTail 1,394,459 - E-core 13,647,412 - $ 24,690,597 $ 1,417,483 Consolidated pro-forma unaudited financial statements. The following unaudited pro forma combined financial information is based on the historical financial statements of the Company, VitaMedica, Interactive, Cygnet, LuckyTail and E-Core after giving effect to the Company’s acquisitions as if the acquisitions occurred on July 1, 2021. The following unaudited pro forma information does not purport to present what the Company’s actual results would have been had the acquisitions occurred on July 1, 2021, nor is the financial information indicative of the results of future operations. The following table represents the unaudited consolidated pro forma results of operations for the three and six months ended December 31, 2022 and the three and six months ended December 31, 2021, as if the acquisitions occurred on July 1, 2021. The results of operations for VitaMedica, Interactive and Cygnet are included in the three and six months ended December 31, 2022 and the results of operations for LuckyTail are included from August 13, 2022 to December 31, 2022. Operating expenses have been increased for the amortization expense associated with the fair value adjustment of definite lived intangible assets of VitaMedica, Interactive, Cygnet, LuckyTail and E-Core by approximately $41,363, $50,329, $175,000, $54,000, and $145,833 per month, respectively. Pro Forma, Unaudited Proforma Three months ended December 31, 2022 Grove, Inc. E-Core Adjustments Proforma Net sales $ 27,086,672 $ 3,483,909 $ $ 30,570,581 Cost of sales $ 16,773,493 $ 2,968,750 $ $ 19,742,243 Operating expenses $ 12,451,600 $ 414,994 $ 97,222 $ 12,963,816 Net income (loss) from continuing operations $ 2,877,005 $ 82,823 $ (97,222 ) $ 2,862,606 Basic income (loss) per common share $ 0.16 $ 0.27 $ $ 0.16 Weighted average shares outstanding 17,540,427 311,851 17,852,278 Pro Forma, Unaudited Six months ended December 31, 2022 Grove, Inc. LuckyTail E-Core Adjustments Proforma Net sales $ 38,643,683 $ 892,270 $ 12,905,836 $ $ 52,441,789 Cost of sales $ 22,289,773 $ 137,088 $ 11,177,032 $ $ 33,603,893 Operating expenses $ 21,466,482 $ 383,476 $ 1,050,602 $ 561,721 $ 23,462,281 Net income (loss) from continuing operations $ 176,996 $ 371,706 $ 660,860 $ (561,721 ) $ 647,841 Basic income (loss) per common share $ 0.01 $ - $ - $ $ 0.04 Weighted average shares outstanding 17,126,886 - 779,626 17,126,886 Pro Forma, Unaudited Proforma Three months ended December 31, 2021 Grove, Inc. Cygnet LuckyTail E-core Adjustments Proforma Net sales $ 4,983,557 7,527,927 $ 936,289 $ 13,062,408 $ $ 18,045,965 Cost of sales $ 711,246 6,372,432 $ 265,506 $ 11,637,510 $ $ 12,348,756 Operating expenses $ 6,808,272 695,574 $ 475,502 $ 1,424,898 $ 1,124,499 $ 9,357,669 Net income (loss) from continuing operations $ (3,078,437 ) 382,657 $ 195,281 $ (4,021 ) $ (1,124,499 ) $ (4,206,957 ) Basic income (loss) per common share $ (0.32 ) 0.69 $ - $ - $ $ (0.38 ) Weighted average shares outstanding 9,755,663 555,489 - 1,247,402 11,003,065 Pro Forma, Unaudited Proforma Six months ended December 31, 2021 Grove, Inc. VitaMedica Interactive Cygnet LuckyTail E-core Adjustments Proforma Net sales $ 8,853,667 $ 384,391 $ 1,329,522 $ 15,055,854 $ 1,927,313 $ 22,484,335 $ $ 50,035,082 Cost of sales $ 1,982,975 $ 93,509 $ - $ 12,744,864 $ 562,355 $ 19,845,792 $ $ 35,229,495 Operating expenses $ 10,285,779 $ 255,286 $ 1,816,464 $ 1,391,148 $ 971,139 $ 2,079,906 $ 2,441,348 $ 19,241,070 Net income (loss) from continuing operations $ (3,391,118 ) $ 35,596 $ (376,987 ) $ 765,314 $ 393,818 $ 574,016 $ (2,441,348 ) $ (4,440,709 ) Basic income (loss) per common share $ (0.22 ) $ 0.36 $ (0.57 ) $ 1.38 $ - $ 0.46 $ $ (0.26 ) Weighted average shares outstanding 15,452,453 100,000 666,667 555,489 - 1,247,402 17,255,344 VitaMedica amortization expense of $496,356 annually and $41,363 monthly is based on the purchase price allocation report. For the six months ended December 31, 2021, the proforma adjustment included $41,363, one month of amortization expense. Interactive amortization expense at $603,948 annually and $50,329 monthly is based on the purchase price allocation report. For the six months ended December 31, 2021, the proforma adjustment included $150,987, three months of amortization expense. The Company estimated the annual Cygnet amortization expense at $2,100,000 annually and $175,000 monthly, based on management’s preliminary allocation of the purchase price. For the three months ended December 31, 2021, the proforma adjustment included $525,000, three months of amortization expense. The Company estimated the annual LuckyTail amortization expense at $648,000 annually and $54,000 monthly, based on management’s preliminary allocation of the purchase price. For the six months ended December 31, 2022, the proforma adjustment included $27,000 of amortization expense for half a month. For the three months ended December 31, 2021, the proforma adjustment included $162,000 of amortization of three months and for the six months ended December 31, 2021, the proforma adjustment included $324,000, six months of amortization expense. The Company estimated the annual E-Core amortization expense at $1,750,000 annually and $145,833 monthly, based on management’s preliminary allocation of the purchase price. For the six months ended December 31, 2022, the proforma adjustment included $437,499 of amortization expense of three months. For the three months ended December 31, 2021, the proforma adjustment included $437,499 of amortization of three months and for the six months ended December 31, 2021, the proforma adjustment included $874,998 of amortization expense for six months. |
Inventory
Inventory | 6 Months Ended |
Dec. 31, 2022 | |
Inventory | |
Inventory | Note 3. Inventory Inventory consisted of the following: December 31, 2022 June 30, 2022 Raw materials $ - $ - Finished goods 6,779,997 4,725,685 $ 6,779,997 $ 4,725,685 The Company writes off the value of inventory deemed excessive or obsolete. During the three and six months ended December 31, 2021, the Company wrote off inventory valued at $34,328 and $140,000, respectively. |
Property and Equipment
Property and Equipment | 6 Months Ended |
Dec. 31, 2022 | |
Property and Equipment | |
Property and Equipment | Note 4. Property and Equipment Property and equipment consist of the following: December 31, 2022 June 30, 2022 Furniture and fixtures $ 170,661 $ 51,273 Computer equipment 130,507 103,615 Manufacturing equipment 3,136,286 1,002,796 Leasehold improvements 90,245 2,144,341 Building 4,876,133 4,656,435 Vehicles 261,362 253,229 Property and equipment, gross 8,665,194 8,211,689 Less accumulated depreciation (1,433,790 ) (867,906 ) $ 7,231,404 $ 7,343,783 Depreciation expense for the three months ended December 31, 2022, and 2021 was $242,551 and $159,073, respectively. Depreciation expense for the six months ended December 31, 2022, and 2021 was $437,048 and $246,579, respectively. |
Intangible Assets
Intangible Assets | 6 Months Ended |
Dec. 31, 2022 | |
Intangible Assets | |
Intangible Assets | Note 5. Intangible Assets Intangible assets as of December 31, 2022: Estimated Life Cost Accumulated Amortization Net Book Value Customer relationships, amortized over four years 4 years $ 10,396,000 $ 1,091,242 $ 9,304,758 Trade name, amortized over five years 5 years 2,219,000 278,349 1,940,651 Non-compete agreements Term of agreement 275,000 225,500 49,500 Online sales channels 2 years 1,800,000 675,000 1,125,000 Vender relationships 5 years 6,000,000 900,000 5,100,000 Software 5 years 1,590,000 397,500 1,192,500 $ 22,280,000 $ 3,567,591 $ 18,712,409 For the three months ended December 31, 2022 and 2021, the Company amortized approximately $962,077 and $417,549, respectively. For the six months ended December 31, 2022 and 2021, the Company amortized approximately $1,842,973 and $667,932, respectively. The following intangible assets were added during the six months ended December 31, 2022 from the acquisition of LuckyTail: Customer relationships $ 2,304,000 Trade name 360,000 Intangible Assets from Purchase $ 2,664,000 E-Core: Customer relationships $ 6,000,000 Trade name 1,250,000 Intangible Assets from Purchase $ 7,250,000 Intangible assets as of June 30, 2022: Cost Accumulated Amortization Net Book Value Customer relationships, amortized over four years $ 2,092,000 $ 689,293 $ 1,402,707 Trade name, amortized over five years 609,000 156,783 452,217 Non-compete agreements, amortized over the term of the agreement 275,000 115,042 159,958 Online sales channels, amortized over two years 1,800,000 225,000 1,575,000 Vender relationships, amortized over five years 6,000,000 300,000 5,700,000 Software, amortized over five years 1,590,000 238,500 1,351,500 $ 12,366,000 $ 1,724,618 $ 10,641,382 The following intangible assets were added during the year ended June 30, 2022, from the acquisition of VitaMedica, Interactive and Cygnet. Customer relationships $ 2,092,000 Trade name 609,000 Non-compete agreements 275,000 Online sales channels 1,800,000 Vender relationships 6,000,000 Software 1,590,000 Intangible Assets from Purchase $ 12,366,000 Future amortization of intangible assets at December 31, 2022 are as follows: June 30, 2023 $ 2,762,694 June 30, 2024 5,410,338 June 30, 2025 5,387,879 June 30, 2026 3,823,146 June 30, 2027 1,194,352 Thereafter 134,000 $ 18,712,409 |
Prepaid Expense and Other Curre
Prepaid Expense and Other Current Assets | 6 Months Ended |
Dec. 31, 2022 | |
Prepaid Expense and Other Current Assets | |
Prepaid Expense and Other Current Assets | Note 6. Prepaid Expense and Other Current Assets Prepaid and other receivables consist of the following: December 31, 2022 June 30, 2022 Insurance $ 348,006 $ 32,045 Prepayment to vendors 821,690 175,378 Deposits on services 33,187 13,762 Prepaid monthly rent 73,266 6,900 Subscriptions and services being amortized over the service period 94,820 274,959 Receivables for transition services from sale of Infusionz and select manufacturing 449,484 - Other deposits 84,269 337,149 Accrued interest receivable from Bloomios on note receivable 35,385 - Other receivables 26,981 - Total $ 1,967,088 $ 840,193 |
Operating Leases
Operating Leases | 6 Months Ended |
Dec. 31, 2022 | |
Operating Leases | |
Operating Leases | Note 7. Operating Leases The Company has operating leases for corporate offices, warehouses and office equipment that have remaining lease terms of 1 year to 5 years. The table below reconciles the undiscounted future minimum lease payments (displayed by year and in the aggregate) under noncancelable operating leases with terms of more than one year to the total operating lease liabilities recognized in the condensed consolidated balance sheet as of December 31, 2022: 2023 $ 187,777 2024 147,623 2025 135,632 2026 113,633 2027 28,684 Total undiscounted future minimum lease payments 613,349 Less: Imputed interest (50,020 ) Present value of operating lease obligation $ 563,329 The Company’s weighted average remaining lease term and weighted average discount rate for operating leases as of December 31, 2022 are: Weighted average remaining lease term 33 Months Weighted average incremental borrowing rate 5.0 % For the three and six months ended December 31, 2022, the components of lease expense, included in general and administrative expenses and interest expense in the condensed consolidated statement of operations, are as follows: Three Months Ended December 31, 2022 Six Months Ended December 31, 2022 Operating lease cost: Operating lease cost $ 93,377 $ 186,754 Amortization of ROU assets 83,644 166,321 Interest expense 9,735 20,435 Total lease cost $ 186,756 $ 373,510 |
Accrued Liabilities and Acquisi
Accrued Liabilities and Acquisition Payable | 6 Months Ended |
Dec. 31, 2022 | |
Accrued Liabilities and Acquisition Payable | |
Accrued Liabilities and Acquisition Payable | Note 8. Accrued Liabilities and Acquisition Payable Accrued liabilities consist of the following: December 31, 2022 June 30, 2022 Accrued expenses for loyalty program $ 8,618 $ 6,418 Accrued interest 209,698 147,887 Accrued vendor liabilities 438,291 29,960 Accrued expenses on credit cards 585,285 108,735 Accrued sales tax 35,056 108,425 Derivative liability - 81,909 Accrued expenses from sale of manufacturing operations 1,786,655 - Other accrued liabilities 834,715 471,993 $ 3,898,318 $ 955,327 Acquisition Payable consist of the following: December 31, 2022 June 30, 2022 Payments related to the acquisition of E-core $ 2,966,196 $ - Payments related to the acquisition of LuckyTail 1,012,327 - $ 3,978,523 $ - These payables are amounts estimated by management that are due to the sellers of and acquisition and include the original purchase price installment payments not represented with a debt, equity or other instrument, estimates of excess or deficiencies in working capital and estimates of future earnout payments. |
Convertible Promissory Notes an
Convertible Promissory Notes and Notes Payable | 6 Months Ended |
Dec. 31, 2022 | |
Convertible Promissory Notes and Notes Payable | |
Convertible Promissory Notes and Notes Payable | Note 9. Convertible Promissory Notes and Notes Payable Convertible promissory notes and notes payable outstanding as of December 31, 2022 are summarized below: Maturity Date December 31, 2022 Convertible Notes October 31, 2025 $ 3,500,000 Subordinated Promissory Notes October 31, 2024 5,750,000 Subordinated Promissory Notes October 31, 2023 5,750,000 Marshall Loan June 28, 2024 1,394,234 Mortgage Loan September 26, 2032 2,961,061 Capital lease November 7, 2026 25,961 Cygnet Loan April 15, 2023 1,050,000 SBA note payable October 6, 2031 4,045,405 Inventory consignment note June 30, 2027 1,211,174 GF Note November 7, 2026 850,000 Total notes payable 26,537,835 Less current portion of notes payable 2,117,683 Notes payable, net of current portion $ 24,420,152 Future payments on notes payable are as follows: For the year ended June 30: 2023 $ 2,117,683 2024 7,718,839 2025 9,197,443 2026 2,328,946 2027 1,069,333 Thereafter 4,211,357 $ 26,643,601 Convertible notes, original discount and related fees and costs (105,766 ) $ 26,537,835 On June 3, 2020, the Company entered into a loan for $150,000 with the Small Business Administration. The promissory note has a fixed payment schedule commencing on June 3, 2021, consisting of principal and interest payments of $731 monthly. The balance of the principal and interest will be payable thirty years from the date of the promissory note. The note bears interest at a rate of 3.75% per annum. The Company repaid this note in August of 2022 and the UCC has been terminated. On August 1, 2021, the Company entered into a non-negotiable convertible promissory note related to the purchase of VitaMedica in the original principal amount of $500,000 (“VitaMedica Note”), convertible at $5.00 per share for a total of 100,000 shares of Company Common Stock. The Company repaid the note in full during August of 2022. On April 15, 2022, the Company entered into a non-negotiable convertible promissory note in the original principal amount of $1,050,000, as adjusted, (“Cygnet Note”) which can be converted into common stock of the Company at a price of $6.00 per share and is payable in full, to the extent not previously converted, on April 15, 2023. In June 2022, the Company entered into a securities purchase agreement with two accredited investors pursuant to which the Company could receive up to $15,000,000 during the following twelve months of the agreement. The Company received $6,678,506 for Convertible Notes in the original principal amount of $7,500,000 (the “Convertible Notes”), representing the original purchase amount, less fees, costs and a $500,000 holdback by the investors. In addition to the Convertible Notes, the investors received Common Stock Purchase Warrants (the “Warrants”) to acquire an aggregate of 56,250 shares of common stock. The Warrants are exercisable for five years at an exercise price of $4.44 per share, provide for customary anti-dilution protection, and an investor put right to require the Company to redeem the Warrants for a total of $250,000. There was a loss of $3,540 for the change in the derivative liability for the period ended December 31, 2022. On October 31, 2022, the Company entered into a letter agreement with the accredited investors in which all amounts owed were paid in full and the related convertible notes and all security interests were cancelled. Additionally, the Company terminated the related Form S-3 registration statement. In June 2022, the Company executed a promissory note with Allan Marshall, the Company’s Chief Executive Officer, in the original principal amount of $1,500,000 (“Marshall Loan”). The promissory note has a 2-year term and bears cash interest at the rate of 8.5% per annum with an additional PIK of 3.5% per annum. The promissory note provides for monthly payments of principal, on an even line 36-month basis, plus cash interest, with a balloon payment of all outstanding principal, cash interest, and PIK interest at maturity. The Company received and deposited the principal amount on July 31, 2022. On October 19, 2022, Upexi, Inc. (the “Company”) and its indirect wholly owned subsidiary, Upexi 17129 Florida, LLC entered into a loan agreement, promissory note and related agreements with Professional Bank, a Florida state-chartered bank, providing for a mortgage on the Company’s principal office in N. Clearwater, Florida. The Company received $3,000,000 in connection with the transaction. The principal is to be repaid to Professional Bank over a term of ten years. The proceeds of the loan were utilized by the Company to pay down its loan facility with Acorn Capital, LLC in the amount of $2,780,200. On October 31, 2022, the Company and its wholly owned subsidiary, Upexi Enterprises, LLC entered into a securities purchase agreement with E-Core Technology, Inc. d/b/a New England Technology, Inc., a Florida corporation, and its three principals. The Company entered into a series of promissory notes with the principal parties: (a) promissory notes in the total original principal amount of $5,750,000 payable upon maturity with a term of 12 months at an interest rate of 4%, $600,000 of which shall be satisfied through the cancellation of an equal amount owed by one of the principals to the Company; (b) promissory notes in the total original principal amount of $5,750,000 payable upon maturity with a term of 24 months at an interest rate of 4%; and (c) promissory notes in the original principal amounts of $3,500,000 with a term of 36 months at an interest rate of 0.0%. The principals may convert the notes into shares of the Company’s restricted common stock at a conversion price equal to $4.81. If the principals do not exercise their conversion rights, the principal balance of the notes will be paid in 12 equal monthly payments commencing on the two year anniversary of the issuance of the notes, subject to adjustments based on the Company’s EBITDA over the term of the notes. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions | |
Related Party Transactions | Note 10. Related Party Transactions During the year ended June 30, 2022, the Company entered into a promissory note with a member of management. The loan was for $1,500,000 and has a two-year term with interest rate of 8.5% per annum with an additional PIK of 3.5% per annum. |
Equity Transactions
Equity Transactions | 6 Months Ended |
Dec. 31, 2022 | |
Equity Transactions | |
Equity Transactions | Note 11. Equity Transactions Convertible Preferred Stock The Company has 500,000 shares of Preferred Stock issued and outstanding to Allan Marshall, CEO. The preferred stock is convertible into the Company’s common stock at a ratio of 1.8 shares of preferred stock for a single share of the Company’s common stock at the holder’s option, has preferential liquidation rights and the preferred stock shall vote together with the common stock as a single class on all matters to which shareholders of the Company are entitled to vote at the rate of ten votes per share of preferred stock. Common Stock During the six months ended December 31, 2021, the Company issued 306,945 shares of common stock for the acquisition of Infusionz, the shares were valued at $1,764,876. During the six months ended December 31, 2021, the Company issued 100,000 shares of common stock for the acquisition of VitaMedica, the shares were valued at $482,000. During the six months ended December 31, 2021, the Company issued 7,000 shares of common stock as a finder’s fee, the shares were valued at $33,740. During the six months ended December 31, 2021, the Company issued 35,000 shares of common stock for consulting services to be provided over 6 months. The shares were valued at $175,000. During the six months ended December 31, 2021, the Company issued 666,667 shares of common stock for the acquisition of Interactive Offers, LLC, the shares were valued at $4,000,000. During the six months ended December 31, 2022, the Company issued 1,247,403 shares of common stock for the acquisition of E-Core Technologies Inc. a Florida corporation, valued at $6,000,000. |
Stock Based Compensation
Stock Based Compensation | 6 Months Ended |
Dec. 31, 2022 | |
Stock Based Compensation | |
Stock Based Compensation | Note 12. Stock Based Compensation The Board of Directors of the Company may from time to time, in its discretion grant to directors, officers, consultants and employees of the Company, non-transferable options to purchase common shares. The options are exercisable for a period of up to 10 years from the date of the grant. The following table reflects the continuity of stock options for the six months ended December 31, 2022: A summary of stock option activity is as follows: Weighted Average Average Remaining Aggregated Options Exercise Contractual Intrinsic Outstanding Price Life (Years) Value Outstanding at June 30, 2022 4,279,888 $ 3.05 7.42 $ 4,919,182 Canceled (55,556 ) 1.53 - - Granted 873,000 4.78 10 - Options outstanding at December 31, 2022 5,097,332 $ 3.36 6.62 $ 2,825,830 Options exercisable at December 31, 2022 (vested) 3,578,937 $ 2.85 6.96 2,723,849 Stock-based compensation expense attributable to stock options was $1,052,848 and $677,455 for the three months ended December 31, 2022, and 2021, respectively. Stock-based compensation expense attributable to stock options was $1,980,174 and $1,270,553 for the six months ended December 31, 2022, and 2021, respectively. As of December 31, 2022, there was $3,688,533 of unrecognized compensation expense related to unvested stock options outstanding, and the weighted average vesting period for those options was approximately 1.75 years. The value of each grant is estimated at the grant date using the Black-Scholes option model with the following assumptions for options granted during the six months ended December 31, 2022: December 31, 2022 Dividend rate - Risk free interest rate 2.07- 4.06 % Expected term 5 Expected volatility 70-77 % Grant date stock price $ 3.87 - $5.30 The basis for the above assumptions are as follows: the dividend rate is based upon the Company’s history of dividends; the risk-free interest rate for periods within the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of grant; the expected term was calculated based on the Company’s historical pattern of options granted and the period of time they are expected to be outstanding; and expected volatility was calculated based upon historical trends in the Company’s stock prices. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Based on historical experience of forfeitures, the Company estimated forfeitures at 0% for each of the six months ended December 31, 2022, and 2021. |
Income Taxes
Income Taxes | 6 Months Ended |
Dec. 31, 2022 | |
Income Taxes | |
Income Taxes | Note 13. Income Taxes The Company computed the year-to-date income tax provision by applying the estimated annual effective tax rate to the year-to-date pre-tax income and adjusted for discrete tax items in the period. The Company’s income tax expense was $755,253 and $47,052 for the three and six months ended December 31, 2022, respectively and $26,162 and $235,033 for the three and six months ended December 31, 2021, respectively. The income tax expense for the three and six months ended December 31, 2022, was primarily attributable to federal and state income taxes and nondeductible expenses for an effective tax rate of approximately 29%. For the three and six months ended December 31, 2022, the difference between the U.S. statutory rate and the Company’s effective tax rate is due to the full valuation allowance on the Company’s deferred tax assets. Future realization of the tax benefits of existing temporary differences and net operating loss carryforwards ultimately depends on the existence of sufficient taxable income within the carryforward period. The Company periodically evaluates the realizability of its net deferred tax assets based on all available evidence, both positive and negative. The Company also considered whether there was any currently available information about future years. The Company determined that it is more likely than not that the Company will have future taxable income to fully realize the Company’s deferred tax asset. As of December 31, 2022, there was approximately $1,400,000 of losses available to reduce federal taxable income in future years and can be carried forward indefinitely. |
Risks and Uncertainties
Risks and Uncertainties | 6 Months Ended |
Dec. 31, 2022 | |
Risks and Uncertainties | |
Risks and Uncertainties | Note 14. Risks and Uncertainties There is substantial uncertainty and different interpretations among federal, state and local regulatory agencies, legislators, academics and businesses as to the scope of operation of Farm Bill-compliant hemp programs relative to the emerging regulation of cannabinoids. These different opinions include, but are not limited to, the regulation of cannabinoids by the U.S. Drug Enforcement Administration, or DEA, and/or the FDA and the extent to which manufacturers of products containing Farm Bill-compliant cultivators and processors may engage in interstate commerce. The uncertainties cannot be resolved without further federal, and perhaps even state-level, legislation, regulation or a definitive judicial interpretation of existing legislation and rules. If these uncertainties continue, they may have an adverse effect upon the introduction of our products in different markets. In December 2019, a novel strain of coronavirus (COVID-19) surfaced. The spread of COVID-19 around the world has caused significant volatility in U.S. and international markets. There is significant uncertainty around the breadth and duration of business disruptions related to COVID-19, as well as its impact on the U.S. and international economies and, as such, the Company has transition to a combination of work from home and social distancing operations and there has been minimal impact to our internal operations from the transition. The Company is unable to determine if there will be a material future impact to its customers’ operations and ultimately an impact to the Company’s overall revenues. |
Discontinued Operations - Sale
Discontinued Operations - Sale of Infusionz to Bloomios | 6 Months Ended |
Dec. 31, 2022 | |
Discontinued Operations - Sale of Infusionz to Bloomios | |
Discontinued Operations - Sale of Infusionz to Bloomios | Note 15. Discontinued Operations – Sale of Infusionz to Bloomios On October 28, 2022, the Company determined that the best course of action related to Infusionz, LLC and certain manufacturing business was to accept an offer to sell those operations. The business will continue to operate during the transition period and management intends to continue to employ some of the workforce in the consolidation of other acquisition and the overall operations of the business. The Company is reimbursed by Bloomios for purchases of raw materials and other expenses outlined in the agreement, which are offset against any customer invoices collected on behalf of Bloomios. The Company received from Bloomios, Inc.(OTCQB:BLMS), the purchaser (i) $5,500,000 paid at closing; (ii) a convertible secured subordinated promissory note in the original principal amount of $5,000,000; (iii) 85,000 shares of Series D convertible preferred stock, with a total stated value of $8,500,000; (iv) a senior secured convertible debenture with a subscription amount of $4,500,000, after original issue discount of $779,117; and (v) a common stock purchase warrant to purchase up to 2,853,910 shares of Bloomios’s common stock. The Company recorded the consideration received at the estimated value at the time of the transaction and as part of that estimate valued the additional warrants to purchase Bloomios shares of common stock at $0 and a valuation allowance of $8,500,000 was recorded a $8,5000. The assets transferred were recorded at their respective book values, the accrued and incurred expenses estimated by management were recorded and the consideration received was recorded at managements estimated fair value based on the balance sheet on October 26, 2022, the effective closing date. Tangible assets, inventory / working capital* $ (1,344,000 ) Tangible assets, warehouse and manufacturing equipment, net of accumulated depreciation* (679,327 ) Goodwill (2,413,814 ) Intangible assets, net of accumulated amortization (946,996 ) Accrued and incurred expenses related to the transaction and additional working capital* (2,051,500 ) Consideration received, including cash, debt and equity, net 15,000,000 Total gain recognized $ 7,564,363 *During the continuing transition period, all of the inventory or working capital has not been transferred to the buyer. During the transition period there are certain expenses and purchases incurred that are to be netted against funds collected on behalf of the buyer. On December 31, 2022, there was a receivable balance from the buyer of $449,484 net, and approximately $35,385 of accrued and unpaid interest. These are recorded on the balance sheet as other receivables. As of the date of this report, the Company continues to assist Bloomios under the transition agreement. Investments - Bloomios: Senior secured convertible debenture $ 4,500,000 Series D convertible preferred stock 8,500,000 Convertible Secured Subordinate Promissory Note 5,000,000 Excess working capital 388,556 Senior secured convertible debenture - OID 192,690 Reserve on Investments - Bloomios (8,500,000 ) Total Investments - Bloomios $ 10,081,246 Senior Secured convertible debenture: The Company received a senior secured convertible debenture of $4,500,000, net of the original issue discount. The Debentures have a maturity date of October 26, 2024, an interest rate of 10% and are convertible into shares of Bloomios common stock. The debenture contains customary representations, warranties and indemnification provisions. The Debentures are secured by a senior security interest in all assets of the Company and its subsidiaries. In addition, the Company received a warrant to purchase shares of Bloomios common stock. The Company did not place any value on this warrant. Bloomios has agreed to use commercially reasonable efforts to complete a Qualified Offering within six months of October 26, 2022, to file a registration statement covering the resale of the warrant shares and the underlying shares convertible with the debenture. Series D convertible preferred stock 85,000 shares of Series D preferred stock. The preferred shares have a stated value per share of $100 and we are to receive dividends equal to 8.5% per year on a monthly basis, 30 days in arrears, for each month during which the Series D Preferred shares remain outstanding. The preferred stock shall not receive the declared dividends until the senior secured debentures are all repaid in full for all investors, including the debentures held by the Company. Convertible Secured Subordinate Promissory Note The note has an interest rate of eight and one-half percent (8.5%) per annum and requires Bloomios to make a prepayment to the note in the amount equal to 40% of the net proceeds received by Bloomios in connection with any offering of securities conducted in connection with an up listing. Interest is due on a monthly basis and the note is convertible, at the Company’s option, into shares of Bloomios common stock at a conversion price of $5.00 per share subject to adjustments. The full principal and interest is due on or before October 26, 2024. The note is secured by a subordinated security interest in all assets of Infusionz pursuant to a certain pledge and security agreement, dated as of October 26, 2022, which security interest shall rank junior to all liens and security interests granted by Bloomios to the senior secured convertible note, which the Company is a holder of a portion of this security. Summary of discontinued operations: Three Months Ended December 31, 2022 2021 Discontinued Operations Revenue $ 419,252 $ 9,565,802 Cost of sales 244,829 5,836,328 Sales, general and administrative expenses 397,942 751,028 Depreciation and amortization 69,388 158,255 Income (loss) from discontinued operations (292,907 ) 2,280,190 Accounts receivable net of allowance for doubtful accounts - 791,085 Fixed assets, net of accumulated depreciation - 674,389 Total assets - 8,108,542 Total liabilities $ - $ 1,322,253 Six Months Ended December 31, 2022 2021 Discontinued Operations Revenue $ 3,042,878 $ 14,145,466 Cost of sales 1,803,643 7,524,668 Sales, general and administrative expenses 1,300,102 2,280,659 Depreciation and amortization 277,551 372,456 Income (loss) from discontinued operations (338,418 ) 3,967,622 Accounts receivable net of allowance for doubtful accounts - 791,085 Fixed assets, net of accumulated depreciation - 674,389 Total assets - 8,108,542 Total liabilities $ - $ 1,322,253 |
Description of the Business (Po
Description of the Business (Policies) | 6 Months Ended |
Dec. 31, 2022 | |
Description of the Business | |
Business Acquisitions | On August 1, 2021, the Company completed an asset purchase agreement with Grove Acquisition Subsidiary, Inc., a Nevada corporation and wholly owned subsidiary of the Company and the members of VitaMedica Corporation, a California corporation to purchase all the assets and assume certain liabilities of VitaMedica. VitaMedica is a leading online seller of supplements for surgery, recovery, skin, beauty, health, and wellness. On October 1, 2021, the Company completed an equity interest purchase agreement with Gyprock Holdings LLC, a Delaware limited liability company, MFA Holdings Corp., a Florida corporation and Sherwood Ventures, LLC, a Texas limited liability company to acquire all of the outstanding membership interest of Interactive Offers, LLC, a Delaware limited liability corporation. On April 1, 2022, the Company completed a securities purchase agreement with a single investor to acquire 55% of the equity interest in Cygnet Online, LLC, a Delaware limited liability corporation. The agreement also enables the Company to purchase the remaining 45% over the following two years. On August 12, 2022, the Company completed an asset purchase agreement with GA Solutions, LLC, a Delaware limited liability company (“LuckyTail”), pursuant to which the Company acquired substantially all assets of LuckyTail. LuckyTail sells pet nail grinders and other pet products through various sales channels including some international sales channels. On October 31, 2022, the Company and its wholly owned subsidiary Upexi Enterprise, LLC, completed a securities purchase agreement to purchase the outstanding stock of E-Core Technology, Inc. d/b/a New England Technology, Inc. (“E-Core”), a Florida corporation. E-Core distributes non-owned branded products to national retail distributors and has branded products in the toy industry that E-Core sells direct to consumers through online sales channels and to national retail distributors. |
Business Divested | On October 26, 2022, the Company executed a membership interest purchase agreement to sell 100% of the membership interests of Infusionz LLC, a Colorado limited liability company (“Infusionz”), included in the sale was all rights to Infusionz brands and the manufacturing of certain private label business. Infusionz was originally purchased by the Company in July of 2020. The divestiture of Infusionz and related private label manufacturing represents a strategic shift in our operations and will allow us to become a predominantly product distribution focused company for both our Company owned brands and non-owned brands. Accordingly, the results of the business were classified as discontinued operations in our condensed statements of operations and excluded from both continuing operations and segment results for all periods presented. |
Basis of Presentation and Principles of Consolidation | The Company’s condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The condensed consolidated financial statements include the accounts of all subsidiaries in which the Company holds a controlling financial interest as of December 31, 2022, and June 30, 2022. In the opinion of management, the unaudited interim condensed consolidated financial statements reflect all adjustments of a normal recurring nature that are necessary for a fair presentation of the results for the interim periods presented. All significant intercompany transactions and balances are eliminated in consolidation. However, the results of operations included in such financial statements may not necessarily be indicative of annual results. |
Discontinued Operations | A discontinued operation is a component of an entity that has either been disposed of or that is classified as held for sale, which represents a separate major line of business or geographic area of options and is part of a single coordinated plan to dispose of a separate line of business or geographical area of operations. In accordance with the rules regarding the presentation of discontinued operations, the assets, liabilities, and activity of Infusionz and certain manufacturing business have been reclassified as discontinued operations for all periods presented. |
Fair Value of Financial Instruments | ASC Topic 820, Fair Value Measurement ASC 820 identified fair value as the exchange price, or exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As a basis for considering market participant assumptions in fair value measurements, ASC 820 established a three-tier fair value hierarchy that distinguishes between the following: Level 1—Quoted market prices (unadjusted) in active markets for identical assets or liabilities. Level 2—Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable, such as quoted market prices, interest rates and yield curves. Level 3—Unobservable inputs developed using estimates or assumptions developed by the Company, which reflect those that a market participant would use. To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized as Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The carrying amounts reflected in the balance sheets for cash and cash equivalents, prepaid expenses, other current assets, accounts payable and accrued expenses approximate their fair values, due to their short-term nature. For the three and six months ended December 31, 2022, management believed it necessary to record a reserve against the debt and equity instruments obtained in the sale of Infusionz of $8,500,000. |
Reclassification | Certain reclassifications have been made to the condensed consolidated financial statements as of and for the year ended June 30, 2022, and for the three and six months ended December 31, 2021 to conform to the presentation as of and for the three and six months ended December 31, 2022. |
Acquisition (Table)
Acquisition (Table) | 6 Months Ended |
Dec. 31, 2022 | |
Acquisition | |
Schedule Of assets and liabilities of VitaMedica | Tangible Assets $ 860,738 Intangible Assets 1,935,000 Goodwill 960,780 Liabilities Acquired (199,929 ) Total Purchase Price $ 3,556,589 |
Schedule Of assets and liabilities of Interactive | Tangible Assets $ 413,465 Intangible Assets 2,631,000 Goodwill 2,889,158 Liabilities Acquired (1,099,993 ) Total Purchase Price $ 4,833,630 |
Schedule Of assets and liabilities of Cygnet | Tangible Assets $ 3,683,829 Intangible Assets 7,800,000 Goodwill 2,037,455 Liabilities Acquired (8,421,284 ) Total Purchase Price $ 5,100,000 |
Schedule Of assets and liabilities of Lucky Tail | Tangible Assets $ 490,822 Intangible Assets 2,664,000 Goodwill 336,000 Liabilities Acquired - Total Purchase Price $ 3,490,822 |
Schedule Of assets and liabilities of E-Core | Tangible Assets $ 15,540,288 Intangible Assets 7,250,000 Goodwill 8,988,076 Liabilities Acquired (7,712,168 ) Total Purchase Price $ 24,066,196 |
Schedule of revenue from acquisitions | December 31, 2022 2021 VitaMedica $ 3,561,264 $ 2,406,266 Interactive 683,322 853,017 Cygnet 14,607,180 - LuckyTail 2,219,234 - E-core 13,647,412 - $ 34,718,412 $ 3,259,283 December 31, 2022 2021 VitaMedica $ 1,943,955 $ 1,417,483 Interactive 345,110 - Cygnet 7,359,661 - LuckyTail 1,394,459 - E-core 13,647,412 - $ 24,690,597 $ 1,417,483 |
Schedule of pro forma | Pro Forma, Unaudited Proforma Three months ended December 31, 2022 Grove, Inc. E-Core Adjustments Proforma Net sales $ 27,086,672 $ 3,483,909 $ $ 30,570,581 Cost of sales $ 16,773,493 $ 2,968,750 $ $ 19,742,243 Operating expenses $ 12,451,600 $ 414,994 $ 97,222 $ 12,963,816 Net income (loss) from continuing operations $ 2,877,005 $ 82,823 $ (97,222 ) $ 2,862,606 Basic income (loss) per common share $ 0.16 $ 0.27 $ $ 0.16 Weighted average shares outstanding 17,540,427 311,851 17,852,278 Pro Forma, Unaudited Six months ended December 31, 2022 Grove, Inc. LuckyTail E-Core Adjustments Proforma Net sales $ 38,643,683 $ 892,270 $ 12,905,836 $ $ 52,441,789 Cost of sales $ 22,289,773 $ 137,088 $ 11,177,032 $ $ 33,603,893 Operating expenses $ 21,466,482 $ 383,476 $ 1,050,602 $ 561,721 $ 23,462,281 Net income (loss) from continuing operations $ 176,996 $ 371,706 $ 660,860 $ (561,721 ) $ 647,841 Basic income (loss) per common share $ 0.01 $ - $ - $ $ 0.04 Weighted average shares outstanding 17,126,886 - 779,626 17,126,886 Pro Forma, Unaudited Proforma Three months ended December 31, 2021 Grove, Inc. Cygnet LuckyTail E-core Adjustments Proforma Net sales $ 4,983,557 7,527,927 $ 936,289 $ 13,062,408 $ $ 18,045,965 Cost of sales $ 711,246 6,372,432 $ 265,506 $ 11,637,510 $ $ 12,348,756 Operating expenses $ 6,808,272 695,574 $ 475,502 $ 1,424,898 $ 1,124,499 $ 9,357,669 Net income (loss) from continuing operations $ (3,078,437 ) 382,657 $ 195,281 $ (4,021 ) $ (1,124,499 ) $ (4,206,957 ) Basic income (loss) per common share $ (0.32 ) 0.69 $ - $ - $ $ (0.38 ) Weighted average shares outstanding 9,755,663 555,489 - 1,247,402 11,003,065 Pro Forma, Unaudited Proforma Six months ended December 31, 2021 Grove, Inc. VitaMedica Interactive Cygnet LuckyTail E-core Adjustments Proforma Net sales $ 8,853,667 $ 384,391 $ 1,329,522 $ 15,055,854 $ 1,927,313 $ 22,484,335 $ $ 50,035,082 Cost of sales $ 1,982,975 $ 93,509 $ - $ 12,744,864 $ 562,355 $ 19,845,792 $ $ 35,229,495 Operating expenses $ 10,285,779 $ 255,286 $ 1,816,464 $ 1,391,148 $ 971,139 $ 2,079,906 $ 2,441,348 $ 19,241,070 Net income (loss) from continuing operations $ (3,391,118 ) $ 35,596 $ (376,987 ) $ 765,314 $ 393,818 $ 574,016 $ (2,441,348 ) $ (4,440,709 ) Basic income (loss) per common share $ (0.22 ) $ 0.36 $ (0.57 ) $ 1.38 $ - $ 0.46 $ $ (0.26 ) Weighted average shares outstanding 15,452,453 100,000 666,667 555,489 - 1,247,402 17,255,344 |
Inventory (Table)
Inventory (Table) | 6 Months Ended |
Dec. 31, 2022 | |
Inventory | |
Schedule Of inventory | December 31, 2022 June 30, 2022 Raw materials $ - $ - Finished goods 6,779,997 4,725,685 $ 6,779,997 $ 4,725,685 |
Property and Equipment (Table)
Property and Equipment (Table) | 6 Months Ended |
Dec. 31, 2022 | |
Property and Equipment | |
Schedule Of Property and Equipment | December 31, 2022 June 30, 2022 Furniture and fixtures $ 170,661 $ 51,273 Computer equipment 130,507 103,615 Manufacturing equipment 3,136,286 1,002,796 Leasehold improvements 90,245 2,144,341 Building 4,876,133 4,656,435 Vehicles 261,362 253,229 Property and equipment, gross 8,665,194 8,211,689 Less accumulated depreciation (1,433,790 ) (867,906 ) $ 7,231,404 $ 7,343,783 |
Intangible Assets (Table)
Intangible Assets (Table) | 6 Months Ended |
Dec. 31, 2022 | |
Intangible Assets | |
Schedule Of Intangible Assets | Estimated Life Cost Accumulated Amortization Net Book Value Customer relationships, amortized over four years 4 years $ 10,396,000 $ 1,091,242 $ 9,304,758 Trade name, amortized over five years 5 years 2,219,000 278,349 1,940,651 Non-compete agreements Term of agreement 275,000 225,500 49,500 Online sales channels 2 years 1,800,000 675,000 1,125,000 Vender relationships 5 years 6,000,000 900,000 5,100,000 Software 5 years 1,590,000 397,500 1,192,500 $ 22,280,000 $ 3,567,591 $ 18,712,409 Cost Accumulated Amortization Net Book Value Customer relationships, amortized over four years $ 2,092,000 $ 689,293 $ 1,402,707 Trade name, amortized over five years 609,000 156,783 452,217 Non-compete agreements, amortized over the term of the agreement 275,000 115,042 159,958 Online sales channels, amortized over two years 1,800,000 225,000 1,575,000 Vender relationships, amortized over five years 6,000,000 300,000 5,700,000 Software, amortized over five years 1,590,000 238,500 1,351,500 $ 12,366,000 $ 1,724,618 $ 10,641,382 |
Schedule Of Intengible Assets Added | Customer relationships $ 2,304,000 Trade name 360,000 Intangible Assets from Purchase $ 2,664,000 Customer relationships $ 6,000,000 Trade name 1,250,000 Intangible Assets from Purchase $ 7,250,000 |
Schedule Of Intangible Assets Of VitaMedica | Customer relationships $ 2,092,000 Trade name 609,000 Non-compete agreements 275,000 Online sales channels 1,800,000 Vender relationships 6,000,000 Software 1,590,000 Intangible Assets from Purchase $ 12,366,000 |
Schedule Of Future amortization of intangible assets | June 30, 2023 $ 2,762,694 June 30, 2024 5,410,338 June 30, 2025 5,387,879 June 30, 2026 3,823,146 June 30, 2027 1,194,352 Thereafter 134,000 $ 18,712,409 |
Prepaid Expense and Other Cur_2
Prepaid Expense and Other Current Assets (Table) | 6 Months Ended |
Dec. 31, 2022 | |
Prepaid Expense and Other Current Assets | |
Schedule Of Prepaid Expense and Other Current Assets | December 31, 2022 June 30, 2022 Insurance $ 348,006 $ 32,045 Prepayment to vendors 821,690 175,378 Deposits on services 33,187 13,762 Prepaid monthly rent 73,266 6,900 Subscriptions and services being amortized over the service period 94,820 274,959 Receivables for transition services from sale of Infusionz and select manufacturing 449,484 - Other deposits 84,269 337,149 Accrued interest receivable from Bloomios on note receivable 35,385 - Other receivables 26,981 - Total $ 1,967,088 $ 840,193 |
Operating Leases (Table)
Operating Leases (Table) | 6 Months Ended |
Dec. 31, 2022 | |
Operating Leases | |
Schedule Of undiscounted future minimum lease payments | 2023 $ 187,777 2024 147,623 2025 135,632 2026 113,633 2027 28,684 Total undiscounted future minimum lease payments 613,349 Less: Imputed interest (50,020 ) Present value of operating lease obligation $ 563,329 |
Schedule Of weighted average lease term and weighted average discount rate | Weighted average remaining lease term 33 Months Weighted average incremental borrowing rate 5.0 % |
Schedule Of Operating lease cost | Three Months Ended December 31, 2022 Six Months Ended December 31, 2022 Operating lease cost: Operating lease cost $ 93,377 $ 186,754 Amortization of ROU assets 83,644 166,321 Interest expense 9,735 20,435 Total lease cost $ 186,756 $ 373,510 |
Accrued Liabilities and Acqui_2
Accrued Liabilities and Acquisition Payable (Table) | 6 Months Ended |
Dec. 31, 2022 | |
Accrued Liabilities and Acquisition Payable | |
Schedule of accrued liabilities | December 31, 2022 June 30, 2022 Accrued expenses for loyalty program $ 8,618 $ 6,418 Accrued interest 209,698 147,887 Accrued vendor liabilities 438,291 29,960 Accrued expenses on credit cards 585,285 108,735 Accrued sales tax 35,056 108,425 Derivative liability - 81,909 Accrued expenses from sale of manufacturing operations 1,786,655 - Other accrued liabilities 834,715 471,993 $ 3,898,318 $ 955,327 |
Schedule of Acquisition Payable | December 31, 2022 June 30, 2022 Payments related to the acquisition of E-core $ 2,966,196 $ - Payments related to the acquisition of LuckyTail 1,012,327 - $ 3,978,523 $ - |
Convertible Promissory Notes _2
Convertible Promissory Notes and Notes Payable (Table) | 6 Months Ended |
Dec. 31, 2022 | |
Convertible Promissory Notes and Notes Payable | |
Schedule Convertible Promissory Notes and Notes Payable | Maturity Date December 31, 2022 Convertible Notes October 31, 2025 $ 3,500,000 Subordinated Promissory Notes October 31, 2024 5,750,000 Subordinated Promissory Notes October 31, 2023 5,750,000 Marshall Loan June 28, 2024 1,394,234 Mortgage Loan September 26, 2032 2,961,061 Capital lease November 7, 2026 25,961 Cygnet Loan April 15, 2023 1,050,000 SBA note payable October 6, 2031 4,045,405 Inventory consignment note June 30, 2027 1,211,174 GF Note November 7, 2026 850,000 Total notes payable 26,537,835 Less current portion of notes payable 2,117,683 Notes payable, net of current portion $ 24,420,152 |
Schedule Future payments on notes payable | For the year ended June 30: 2023 $ 2,117,683 2024 7,718,839 2025 9,197,443 2026 2,328,946 2027 1,069,333 Thereafter 4,211,357 $ 26,643,601 Convertible notes, original discount and related fees and costs (105,766 ) $ 26,537,835 |
Stock Based Compensation (Table
Stock Based Compensation (Table) | 6 Months Ended |
Dec. 31, 2022 | |
Stock Based Compensation | |
Schedule of stock option activity | Weighted Average Average Remaining Aggregated Options Exercise Contractual Intrinsic Outstanding Price Life (Years) Value Outstanding at June 30, 2022 4,279,888 $ 3.05 7.42 $ 4,919,182 Canceled (55,556 ) 1.53 - - Granted 873,000 4.78 10 - Options outstanding at December 31, 2022 5,097,332 $ 3.36 6.62 $ 2,825,830 Options exercisable at December 31, 2022 (vested) 3,578,937 $ 2.85 6.96 2,723,849 |
Schedule Of value Of Each Grant | December 31, 2022 Dividend rate - Risk free interest rate 2.07- 4.06 % Expected term 5 Expected volatility 70-77 % Grant date stock price $ 3.87 - $5.30 |
Discontinued Operations - Sal_2
Discontinued Operations - Sale of Infusionz to Bloomios (Table) | 6 Months Ended |
Dec. 31, 2022 | |
Discontinued Operations - Sale of Infusionz to Bloomios | |
Schedule Of Sale of Infusionz to Bloomios | Tangible assets, inventory / working capital* $ (1,344,000 ) Tangible assets, warehouse and manufacturing equipment, net of accumulated depreciation* (679,327 ) Goodwill (2,413,814 ) Intangible assets, net of accumulated amortization (946,996 ) Accrued and incurred expenses related to the transaction and additional working capital* (2,051,500 ) Consideration received, including cash, debt and equity, net 15,000,000 Total gain recognized $ 7,564,363 |
Schedule Of Discontinued Operations | Three Months Ended December 31, 2022 2021 Discontinued Operations Revenue $ 419,252 $ 9,565,802 Cost of sales 244,829 5,836,328 Sales, general and administrative expenses 397,942 751,028 Depreciation and amortization 69,388 158,255 Income (loss) from discontinued operations (292,907 ) 2,280,190 Accounts receivable net of allowance for doubtful accounts - 791,085 Fixed assets, net of accumulated depreciation - 674,389 Total assets - 8,108,542 Total liabilities $ - $ 1,322,253 Six Months Ended December 31, 2022 2021 Discontinued Operations Revenue $ 3,042,878 $ 14,145,466 Cost of sales 1,803,643 7,524,668 Sales, general and administrative expenses 1,300,102 2,280,659 Depreciation and amortization 277,551 372,456 Income (loss) from discontinued operations (338,418 ) 3,967,622 Accounts receivable net of allowance for doubtful accounts - 791,085 Fixed assets, net of accumulated depreciation - 674,389 Total assets - 8,108,542 Total liabilities $ - $ 1,322,253 |
Schedule Of Investments - Bloomios | Senior secured convertible debenture $ 4,500,000 Series D convertible preferred stock 8,500,000 Convertible Secured Subordinate Promissory Note 5,000,000 Excess working capital 388,556 Senior secured convertible debenture - OID 192,690 Reserve on Investments - Bloomios (8,500,000 ) Total Investments - Bloomios $ 10,081,246 |
Description of the Business (De
Description of the Business (Details Narrative) | 1 Months Ended | |
Apr. 01, 2022 | Oct. 26, 2022 | |
Securities Purchase Agreement [Member] | ||
Agreement description | April 1, 2022, the Company completed a securities purchase agreement with a single investor to acquire 55% of the equity interest in Cygnet Online, LLC, a Delaware limited liability corporation. The agreement also enables the Company to purchase the remaining 45% over the following two years. | |
Membership interests [Member] | ||
Membership interest | 100% |
Acquisition (Details)
Acquisition (Details) - USD ($) | Dec. 31, 2022 | Jun. 30, 2022 | Aug. 01, 2021 |
Goodwill | $ 15,342,089 | $ 5,887,393 | |
Vita Medica Agreemnet [Member] | |||
Tangible Assets | $ 860,738 | ||
Intangible Assets | 1,935,000 | ||
Goodwill | 960,780 | ||
Liabilities Acquired | (199,929) | ||
Total Purchase Price | $ 3,556,589 |
Acquisition (Details 1)
Acquisition (Details 1) - USD ($) | Dec. 31, 2022 | Jun. 30, 2022 | Apr. 01, 2022 | Oct. 01, 2021 |
Goodwill | $ 15,342,089 | $ 5,887,393 | ||
Interactive Offers, LLC [Member] | ||||
Tangible Assets | $ 3,683,829 | $ 413,465 | ||
Intangible Assets | 7,800,000 | 2,631,000 | ||
Goodwill | 2,037,455 | 2,889,158 | ||
Liabilities Acquired | (8,421,284) | (1,099,993) | ||
Total Purchase Price | $ 5,100,000 | $ 4,833,630 |
Acquisition (Details 2)
Acquisition (Details 2) - USD ($) | Dec. 31, 2022 | Oct. 21, 2022 | Jun. 30, 2022 |
Goodwill | $ 15,342,089 | $ 5,887,393 | |
E-Core, Inc. and its subsidiaries [Member] | |||
Tangible Assets | $ 15,540,288 | ||
Intangible Assets | 7,250,000 | ||
Goodwill | 8,988,076 | ||
Liabilities Acquired | (7,712,168) | ||
Total Purchase Price | $ 24,066,196 |
Acquisition (Details 3)
Acquisition (Details 3) - USD ($) | Dec. 31, 2022 | Aug. 12, 2022 | Jun. 30, 2022 |
Goodwill | $ 15,342,089 | $ 5,887,393 | |
LuckyTail [Member] | |||
Tangible Assets | $ 490,822 | ||
Intangible Assets | 2,664,000 | ||
Goodwill | 336,000 | ||
Liabilities Acquired | 0 | ||
Total Purchase Price | $ 3,490,822 |
Acquisition (Details 4)
Acquisition (Details 4) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Net revenue | $ 24,690,597 | $ 1,417,483 | $ 34,718,412 | $ 3,259,283 |
Net revenue | 27,086,672 | 4,983,557 | 38,643,683 | 8,853,667 |
VitaMedica [Member] | ||||
Net revenue | 1,943,955 | 1,417,483 | 3,561,264 | 2,406,266 |
Interactive [Member] | ||||
Net revenue | 345,110 | 0 | 683,322 | 853,017 |
Cygnet [Member] | ||||
Net revenue | 7,359,661 | 0 | 14,607,180 | 0 |
LuckyTail [Member] | ||||
Net revenue | 1,394,459 | 0 | 2,219,234 | 0 |
E-core [Member] | ||||
Net revenue | $ 13,647,412 | $ 0 | $ 13,647,412 | $ 0 |
Acquisition (Details 5)
Acquisition (Details 5) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Dec. 31, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Cost of sales | $ 16,773,493 | $ 711,246 | $ 22,289,773 | $ 1,982,975 | ||
Operating expenses | 12,451,600 | 6,808,272 | $ 21,466,482 | $ 10,285,779 | ||
Net income (loss) | $ 2,584,098 | $ (2,745,520) | $ 64,833 | $ 511,711 | ||
Basic income (loss) per common share | $ 0.16 | $ (0.32) | $ 0.01 | $ (0.22) | ||
Proforma Adjustments [Member] | ||||||
Operating expenses | $ 97,222 | $ 1,124,499 | $ 561,721 | $ 2,441,348 | ||
Net income (loss) | (97,222) | (1,124,499) | (561,721) | (2,441,348) | ||
Grove Inc [Member] | ||||||
Net sales | 27,086,672 | 4,983,557 | 38,643,683 | 8,853,667 | ||
Cost of sales | 16,773,493 | 711,246 | 22,289,773 | 1,982,975 | ||
Operating expenses | 12,451,600 | 6,808,272 | 21,466,482 | 10,285,779 | ||
Net income (loss) | $ 2,877,005 | $ (3,078,437) | $ 176,996 | $ (3,391,118) | ||
Basic income (loss) per common share | $ 0.16 | $ (0.32) | $ 0.01 | $ (0.22) | ||
Weighted average shares outstanding | 17,540,427 | 9,755,663 | 17,126,886 | 15,452,453 | ||
Proforma [Member] | ||||||
Net sales | $ 30,570,581 | $ 18,045,965 | $ 52,441,789 | $ 50,035,082 | ||
Cost of sales | 19,742,243 | 12,348,756 | 33,603,893 | 35,229,495 | ||
Operating expenses | 12,963,816 | 9,357,669 | 23,462,281 | 19,241,070 | ||
Net income (loss) | $ 2,862,606 | $ (4,206,957) | $ 647,841 | $ (4,440,709) | ||
Basic income (loss) per common share | $ 0.16 | $ (0.38) | $ 0.04 | $ (0.26) | ||
Weighted average shares outstanding | 17,852,278 | 11,003,065 | 17,126,886 | 17,255,344 | ||
LuckyTail [Member] | ||||||
Net sales | $ 936,289 | $ 892,270 | $ 1,927,313 | |||
Cost of sales | 265,506 | 137,088 | 562,355 | |||
Operating expenses | 475,502 | 383,476 | 971,139 | |||
Net income (loss) | $ 195,281 | $ 371,706 | $ 393,818 | |||
Basic income (loss) per common share | $ 0 | $ 0 | $ 0 | |||
VitaMedica [Member] | ||||||
Net sales | $ 384,391 | |||||
Cost of sales | 93,509 | |||||
Operating expenses | $ 41,363 | 255,286 | ||||
Net income (loss) | $ 35,596 | |||||
Basic income (loss) per common share | $ 0.36 | |||||
Weighted average shares outstanding | 100,000 | |||||
E-core [Member] | ||||||
Net sales | $ 3,483,909 | $ 13,062,408 | 12,905,836 | $ 22,484,335 | ||
Cost of sales | 2,968,750 | 11,637,510 | 11,177,032 | 19,845,792 | ||
Operating expenses | 414,994 | 1,424,898 | 1,050,602 | 2,079,906 | ||
Net income (loss) | $ 82,823 | $ (4,021) | $ 660,860 | $ 574,016 | ||
Basic income (loss) per common share | $ 0.27 | $ 0 | $ 0 | $ 0.46 | ||
Weighted average shares outstanding | 311,851 | 1,247,402 | 779,626 | 1,247,402 | ||
Cygnet [Member] | ||||||
Net sales | $ 7,527,927 | $ 15,055,854 | ||||
Cost of sales | 6,372,432 | 12,744,864 | ||||
Operating expenses | 695,574 | 1,391,148 | ||||
Net income (loss) | $ 382,657 | $ 765,314 | ||||
Basic income (loss) per common share | $ 0.69 | $ 1.38 | ||||
Weighted average shares outstanding | 555,489 | 555,489 | ||||
Interactive Offers, LLC [Member] | ||||||
Net sales | $ 1,329,522 | |||||
Cost of sales | 0 | |||||
Operating expenses | $ 50,329 | 1,816,464 | ||||
Net income (loss) | $ (376,987) | |||||
Basic income (loss) per common share | $ (0.57) | |||||
Weighted average shares outstanding | 666,667 |
Acquisition (Details Narrative)
Acquisition (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||||
Dec. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Oct. 31, 2022 | Jun. 30, 2022 | |
Acquisition payable | $ 3,978,523 | $ 3,978,523 | $ 0 | ||||
Operating expenses | 12,451,600 | $ 6,808,272 | 21,466,482 | $ 10,285,779 | |||
Revenues | $ 27,086,672 | 4,983,557 | 38,643,683 | 8,853,667 | |||
Common stock issued during period for acquisition value | $ 33,740 | $ 33,740 | |||||
Common stock issued during period for acquisition | 4,000,000 | ||||||
FinderFee [Member] | |||||||
Common stock issued during period for acquisition value | 33,740 | $ 33,740 | |||||
Cash payment | $ 70,000 | ||||||
Common stock per share | $ 4.82 | $ 4.82 | |||||
Common stock issued during period for acquisition | 7,000 | 7,000 | |||||
Finder's fee | $ 103,740 | ||||||
E-Core, Inc [Member] | |||||||
Acquisition payable | $ 24,100,000 | 24,100,000 | |||||
Cash payment | 3,100,000 | ||||||
Proceeds from issuance of common stock | $ 6,000,000 | ||||||
Conversion price | $ 4.81 | $ 4.81 | $ 5.30 | ||||
Original principal amount | $ 5,750,000 | $ 5,750,000 | |||||
Restricted common stock | 1,247,402 | 1,247,402 | |||||
Options to purchase | 360,000 | ||||||
Amortization expense annually | $ 1,750,000 | ||||||
Amortization expense monthly | 145,833 | ||||||
Amortization expense | $ 437,499 | 437,499 | $ 874,998 | ||||
Proforma Adjustments [Member] | |||||||
Operating expenses | 97,222 | 1,124,499 | 561,721 | 2,441,348 | |||
Operating expenses | 324,000 | ||||||
LuckyTail [Member] | |||||||
Operating expenses | 475,502 | 383,476 | 971,139 | ||||
Revenues | 1,394,459 | 0 | 2,219,234 | 0 | |||
Amortization expense annually | 648,000 | ||||||
Amortization expense monthly | 54,000 | ||||||
Amortization expense | 27,000 | 162,000 | |||||
Revenue for the business acquired | $ 1,492,329 | ||||||
Description of public offering | The base consideration totals $3,000,000 plus the amount of working capital transferred to the Company. The consideration for the purchase consisted of $2,000,000, paid into escrow and released when certain assets were transferred to the Company, (ii) $500,000 payable on the latter of the release from escrow and 90 days post-closing, and (iii) $500,000 payable on the latter of the release from escrow and 180 days | ||||||
Tangible Assets | 490,822 | $ 490,822 | |||||
VitaMedica [Member] | |||||||
Operating expenses | 41,363 | 255,286 | |||||
Revenues | $ 1,943,955 | $ 1,417,483 | 3,561,264 | 2,406,266 | |||
Common stock issued during period for acquisition value | $ 100,000 | ||||||
Amortization expense annually | 496,356 | ||||||
Amortization expense monthly | $ 41,363 | ||||||
Common stock per share | $ 4.82 | $ 4.82 | |||||
Common stock issued during period for acquisition | 482,000 | ||||||
Shares of Common stock | 100,000 | ||||||
Amortization expense | $ 41,363 | ||||||
Purchase method of accounting [Member] | |||||||
Acquisition payable | $ 74,589 | $ 74,589 | |||||
Total estimated fair value | 3,556,589 | ||||||
Cash payment | $ 2,000,000 | ||||||
Purchase price sale of shares | 100,000 | 100,000 | |||||
Proceeds from issuance of common stock | $ 482,000 | ||||||
Conversion price | $ 5 | $ 5 | |||||
Proceeds from repayment of loans to purchase common stock | $ 500,000 | ||||||
Original principal amount | $ 500,000 | 500,000 | |||||
Cygnet Online, LLC | |||||||
Operating expenses | 175,000 | ||||||
Revenues | 700,000 | ||||||
Cash payment | $ 1,500,000 | ||||||
Purchase price sale of shares | 5,100,000 | 5,100,000 | |||||
Proceeds from issuance of common stock | $ 2,550,000 | ||||||
Amortization expense monthly | $ 175,000 | ||||||
Shares of Common stock | 555,489 | ||||||
Description of earn out payment | Additionally, Seller will be paid up to $700,000 in the form of an earn-out payment based on 7% of Cygnet’s net revenue during the earn-out period, in accordance with and subject to the terms and conditions of the agreement. The earn-out payment, if any, will be paid 50% in immediately available funds and 50% in Company restricted common stock. | ||||||
Original principal amount | $ 1,050,000 | $ 1,050,000 | |||||
Securities purchase agreement description | In addition, the Company has the right to purchase Seller’s remaining membership interests in Cygnet. Commencing on October 10, 2022 and continuing for 180 days thereafter, the Company has the right, but not the obligation, to cause the Seller to sell 15% of the membership interests in Cygnet for $1,650,000 in immediately available funds. Commencing on the date that the Company completes its financial statements for the year ended December 31, 2023, and continuing for 120 days thereafter, the Company has the right, but not the obligation, to cause the Seller to sell the remaining 30% of the membership interests in Cygnet for 30% of the amount equal to four times Cygnet’s Adjusted EBITDA (as defined in the Call Agreement) for calendar year 2023, payable by wire transfer of immediately available funds equal to at least 50% of said purchase price with the balance payable through the issuance to Seller of shares of restricted common stock | ||||||
Cygnet Online, LLC | Proforma Adjustments [Member] | |||||||
Amortization expense annually | $ 2,100,000 | ||||||
Amortization expense monthly | 175,000 | ||||||
Amortization expense | 525,000 | ||||||
Interactive Offers, LLC [Member] | |||||||
Operating expenses | 50,329 | 1,816,464 | |||||
Cash payment | 2,100,000 | ||||||
Proceeds from issuance of common stock | 2,733,630 | ||||||
Amortization expense annually | 603,948 | ||||||
Amortization expense monthly | $ 50,329 | ||||||
Common stock per share | $ 4.88 | $ 4.88 | |||||
Purchase price for the sale | $ 4,833,630 | ||||||
Shares of Common stock | 560,170 | ||||||
Interactive Offers, LLC [Member] | Proforma Adjustments [Member] | |||||||
Amortization expense | $ 150,987 |
Inventory (Details)
Inventory (Details) - USD ($) | Dec. 31, 2022 | Jun. 30, 2022 |
Inventory | ||
Raw materials | $ 0 | $ 0 |
Finished goods | 6,779,997 | 4,725,685 |
Total | $ 6,779,997 | $ 4,725,685 |
Inventory (Details Narrative)
Inventory (Details Narrative) - USD ($) | Dec. 31, 2022 | Jun. 30, 2022 |
Inventory | ||
Inventory | $ 34,328 | $ 140,000 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | Dec. 31, 2022 | Jun. 30, 2022 |
Property and equipment, gross | $ 8,665,194 | $ 8,211,689 |
Less accumulated depreciation | (1,433,790) | (867,906) |
Property and equipment, net | 7,231,404 | 7,343,783 |
Furniture and Fixtures [Member] | ||
Property and equipment, net | 170,661 | 51,273 |
Computer equipment [Member] | ||
Property and equipment, net | 130,507 | 103,615 |
Manufacturing equipment [Member] | ||
Property and equipment, net | 3,136,286 | 1,002,796 |
Leasehold improvements [Member] | ||
Property and equipment, net | 90,245 | 2,144,341 |
Building [Member] | ||
Property and equipment, net | 4,876,133 | 4,656,435 |
Vehicles [Member] | ||
Property and equipment, net | $ 261,362 | $ 253,229 |
Property and Equipment (Detai_2
Property and Equipment (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Property and Equipment | ||||
Depreciation expense | $ 242,551 | $ 159,073 | $ 437,048 | $ 246,579 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) | Dec. 31, 2022 | Jun. 30, 2022 |
Total [Member] | ||
Cost | $ 22,280,000 | $ 12,366,000 |
Accumulated Amortization | 3,567,591 | 1,724,618 |
Net Book Value | 18,712,409 | 10,641,382 |
Non-compete agreements [Member] | ||
Cost | 275,000 | 275,000 |
Accumulated Amortization | 225,500 | 115,042 |
Net Book Value | 49,500 | 159,958 |
Online sales channels, amortized over two years [Member] | ||
Cost | 1,800,000 | 1,800,000 |
Accumulated Amortization | 675,000 | 225,000 |
Net Book Value | 1,125,000 | 1,575,000 |
Vender relationships, amortized over five years [Member] | ||
Cost | 6,000,000 | 6,000,000 |
Accumulated Amortization | 900,000 | 300,000 |
Net Book Value | 5,100,000 | 5,700,000 |
Software, amortized over five years [Member] | ||
Cost | 1,590,000 | 1,590,000 |
Accumulated Amortization | 397,500 | 238,500 |
Net Book Value | 1,192,500 | 1,351,500 |
Customer Relationships [Member] | ||
Cost | 10,396,000 | 2,092,000 |
Accumulated Amortization | 1,091,242 | 689,293 |
Net Book Value | 9,304,758 | 1,402,707 |
Trade Name [Member] | ||
Cost | 2,219,000 | 609,000 |
Accumulated Amortization | 278,349 | 156,783 |
Net Book Value | $ 1,940,651 | $ 452,217 |
Intangible Assets (Details 1)
Intangible Assets (Details 1) | 6 Months Ended |
Dec. 31, 2022 USD ($) | |
CustomerRelationship [Member] | E core [Member] | |
Intangible Assets from Purchase | $ 6,000,000 |
Customer Relationships [Member] | |
Intangible Assets from Purchase | 2,304,000 |
Trade Name [Member] | |
Intangible Assets from Purchase | 360,000 |
Trade Name [Member] | E core [Member] | |
Intangible Assets from Purchase | 7,250,000 |
Intangible Assets from Purchase | |
Intangible Assets from Purchase | 2,664,000 |
Intangible Asset from Purchage [Member] | E core [Member] | |
Intangible Assets from Purchase | $ 1,250,000 |
Intangible Assets (Details 2)
Intangible Assets (Details 2) | Jun. 30, 2022 USD ($) |
Intangible Assets | |
Customer relationships | $ 2,092,000 |
Trade name | 609,000 |
Non-compete agreements | 275,000 |
Online sales channels | 1,800,000 |
Vendor relationships | 6,000,000 |
Software | 1,590,000 |
Intangible Assets from Purchase | $ 12,366,000 |
Intangible Assets (Details 3)
Intangible Assets (Details 3) | Dec. 31, 2022 USD ($) |
Intangible Assets | |
June 30, 2023 | $ 2,762,694 |
June 30, 2024 | 5,410,338 |
June 30, 2025 | 5,387,879 |
June 30, 2026 | 3,823,146 |
June 30, 2027 | 1,194,352 |
Thereafter | 134,000 |
Finite-Lived Intangible Assets, Net | $ 18,712,409 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Intangible Assets | ||||
Amortization of intangible assets | $ 962,077 | $ 417,549 | $ 1,842,973 | $ 667,932 |
Prepaid Expense and Other Cur_3
Prepaid Expense and Other Current Assets (Details) - USD ($) | Dec. 31, 2022 | Jun. 30, 2022 |
Prepaid expenses and other assets | $ 1,967,088 | $ 840,193 |
Insurance [Member] | ||
Prepaid expenses and other assets | 348,006 | 32,045 |
Prepayment to vendors [Member] | ||
Prepaid expenses and other assets | 821,690 | 175,378 |
Deposit on services [Member] | ||
Prepaid expenses and other assets | 33,187 | 13,762 |
Prepaid monthly rent [Member] | ||
Prepaid expenses and other assets | 73,266 | 6,900 |
Subscriptions and services being amortized over the service period [Member] | ||
Prepaid expenses and other assets | 94,820 | 274,959 |
Other deposits [Member] | ||
Prepaid expenses and other assets | 84,269 | 337,149 |
Receivables for transition services from sale of Infusionz and select manufacturing | ||
Prepaid expenses and other assets | 449,484 | 0 |
Accrued interest receivable from Bloomios on note receivable | ||
Prepaid expenses and other assets | 35,385 | 0 |
Other receivables | ||
Prepaid expenses and other assets | $ 26,981 | $ 0 |
Operating Leases (Details)
Operating Leases (Details) | Dec. 01, 2022 USD ($) |
Operating Leases | |
2023 | $ 187,777 |
2024 | 147,623 |
2025 | 135,632 |
2026 | 113,633 |
2027 | 28,684 |
Total undiscounted future minimum lease payments | 613,349 |
Less: Imputed interest | (50,020) |
Present value of operating lease obligation | $ 563,329 |
Operating Leases (Details 1)
Operating Leases (Details 1) | 6 Months Ended |
Dec. 31, 2022 | |
Operating Leases | |
Weighted average remaining lease term | 33 years |
Weighted average incremental borrowing rate | 5% |
Operating Leases (Details 2)
Operating Leases (Details 2) - USD ($) | 3 Months Ended | 6 Months Ended |
Dec. 31, 2022 | Dec. 31, 2022 | |
Operating Leases | ||
Operating lease cost | $ 93,377 | $ 186,754 |
Amortization of ROU assets | 83,644 | 166,321 |
Interest expense | 9,735 | 20,435 |
Total lease cost | $ 186,756 | $ 373,510 |
Operating Leases (Details Narra
Operating Leases (Details Narrative) | 6 Months Ended |
Dec. 31, 2022 | |
Operating Leases | |
Lease term | lease terms of 1 year to 5 years |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) | Dec. 31, 2022 | Jun. 30, 2022 |
Accrued Liabilities (Details) | ||
Accrued expenses for loyalty program | $ 8,618 | $ 6,418 |
Accrued interest | 209,698 | 147,887 |
Accrued vendor liabilities | 438,291 | 29,960 |
Accrued expenses on credit cards | 585,285 | 108,735 |
Accrued sales tax | 35,056 | 108,425 |
Derivative liabilities | 0 | 81,909 |
Other accrued liabilities | 834,715 | 471,993 |
Accrued expenses from sale of manufacturing operations | 1,786,655 | 0 |
Total of accrued liabilities | $ 3,898,318 | $ 955,327 |
Accrued Liabilities (Details 1)
Accrued Liabilities (Details 1) - USD ($) | Dec. 31, 2022 | Jun. 30, 2022 |
Accrued Liabilities (Details) | ||
Payments related to the acquisition of E-core | $ 2,966,196 | $ 0 |
Payments related to the acquisition of LuckyTail | 1,012,327 | 0 |
Total | $ 3,978,523 | $ 0 |
Convertible Promissory Notes _3
Convertible Promissory Notes and Notes Payable (Details) - USD ($) | 6 Months Ended | |
Dec. 31, 2022 | Jun. 30, 2022 | |
Total notes payable | $ 26,537,835 | |
Less current portion of notes payable | 2,117,683 | $ 5,424,752 |
Notes payable, less current portion | 24,420,152 | |
Total notes payable | 24,420,152 | $ 8,876,949 |
Convertible Notes [Member] | ||
Total notes payable | $ 3,500,000 | |
Maturity Date | Oct. 31, 2025 | |
Marshall Loan [Member] | ||
Maturity Date | Jun. 28, 2024 | |
Capital Leases [Member] | ||
Total notes payable | $ 25,961 | |
Maturity Date | Nov. 07, 2026 | |
Cygnet Loan [Member] | ||
Total notes payable | $ 1,050,000 | |
Maturity Date | Apr. 15, 2023 | |
SBA note payable [Member] | ||
Total notes payable | $ 4,045,405 | |
Maturity Date | Oct. 06, 2031 | |
Inventory consignment note [Member] | ||
Total notes payable | $ 1,211,174 | |
Maturity Date | Jun. 30, 2027 | |
GF Note, 6 annual payments [Member] | ||
Total notes payable | $ 850,000 | |
Maturity Date | Nov. 07, 2026 | |
Subordinated Promissory Notes | ||
Total notes payable | $ 5,750,000 | |
Maturity Date | Oct. 31, 2023 |
Convertible Promissory Notes _4
Convertible Promissory Notes and Notes Payable (Details 1) - Notes Payable [Member] | Dec. 31, 2022 USD ($) |
June 30, 2023 | $ 2,117,683 |
June 30, 2024 | 7,718,839 |
June 30, 2025 | 9,197,443 |
June 30, 2026 | 2,328,946 |
June 30,2027 | 1,069,333 |
Thereafter | 4,211,357 |
Future payments, notes payable | 26,643,601 |
Convertible note, original discount and related fees and costs | (105,766) |
Total | $ 26,537,835 |
Convertible Promissory Notes _5
Convertible Promissory Notes and Notes Payable (Details Narrative) - USD ($) | 1 Months Ended | 6 Months Ended | |||||||
Jun. 03, 2020 | Oct. 19, 2022 | Jun. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Oct. 31, 2022 | Apr. 15, 2022 | Aug. 01, 2021 | Jun. 03, 2021 | |
Proceeds from related party | $ 600,000 | ||||||||
Proceeds from related party | $ 1,470,000 | $ 0 | |||||||
Interest rate | 8.50% | ||||||||
Allan Marshall [Member] | |||||||||
Original principal amount | $ 1,500,000 | ||||||||
Interest rate | 8.50% | ||||||||
Interest rate pik | 3.50% | ||||||||
Convertible Notes [Member] | |||||||||
Proceeds from related party | $ 7,500,000 | ||||||||
Fund received from accredited investors | 15,000,000 | ||||||||
Proceeds from notes | $ 2,780,200 | 6,678,506 | |||||||
Original principal amount | $ 5,750,000 | ||||||||
Holdback amount | $ 3,000,000 | ||||||||
Description | principal amount of $5,750,000 payable upon maturity with a term of 24 months at an interest rate of 4%; and (c) promissory notes in the original principal amounts of $3,500,000 with a term of 36 months at an interest rate of 0.0%. The principals may convert the notes into shares of the Company’s restricted common stock at a conversion price equal to $4.81 | ||||||||
Warrants acquire | $ 56,250 | ||||||||
Exercise price | $ 4.44 | ||||||||
Redeem warrants | $ 250,000 | ||||||||
Gain in the change of derivative liability | 3,540 | ||||||||
Interest rate | 4% | ||||||||
Cygnet Loan [Member] | |||||||||
Original principal amount | 1,050,000 | ||||||||
Common stock per share amount | $ 6,000,000 | ||||||||
SBA note payable [Member] | |||||||||
Interest rate | 3.75% | ||||||||
SBA Note payable | $ 150,000 | ||||||||
Monthly payment | $ 731 | ||||||||
Note Agreement [Member] | |||||||||
Original principal amount | $ 500,000 | ||||||||
Holdback amount | $ 500,000 | ||||||||
Common stock per share | $ 5 | ||||||||
Total convertible common stock | $ 100,000 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) | 1 Months Ended |
Jun. 30, 2022 USD ($) | |
Related Party Transactions | |
Loan amount | $ 1,500,000 |
Interest rate | 8.50% |
Additional PIK | 3.50% |
Equity Transactions (Details Na
Equity Transactions (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Feb. 02, 2021 | Sep. 30, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2022 | Jun. 30, 2022 | |
Common stock issued during period for acquisition value | $ 35,000 | |||||
Shares of common stock for consulting service, value | 175,000 | |||||
Common shares value | $ 17,960 | $ 16,713 | $ 16,713 | |||
Common stock issued during period for acquisition value | $ 33,740 | $ 33,740 | ||||
Common stock issued during period for acquisition | 4,000,000 | |||||
Common Stock Shares [Member] | ||||||
Shares of common stock for consulting service, value | $ 4,000,000 | |||||
Common stock issued during period for acquisition value | $ 6,000,000 | $ 6,000,000 | ||||
Common stock issued during period for acquisition | 1,247,403 | 1,247,403 | ||||
Shares of common stock for consulting service, shares | 666,667 | |||||
Convertible Preferred Stock [Member] | ||||||
Sale of preferred stock shares | 500,000 | |||||
Preferred stock convertible into shares of common stock ratio | preferred stock is convertible into the Company’s common stock at a ratio of 1.8 shares of preferred stock for a single share | |||||
FinderFee [Member] | ||||||
Common shares value | $ 33,740 | |||||
Common stock issued during period for acquisition value | $ 33,740 | $ 33,740 | ||||
Common stock issued during period for acquisition | 7,000 | 7,000 | ||||
VitaMedica [Member] | ||||||
Common stock issued during period for acquisition value | $ 100,000 | |||||
Common stock issued during period for acquisition | 482,000 | |||||
Infusionz [Member] | Common Stocks [Member] | ||||||
Common stock issued during period for acquisition value | $ 1,764,876 | |||||
Common stock issued during period for acquisition | 306,945 |
Stock Based Compensation (Detai
Stock Based Compensation (Details 1) | 6 Months Ended |
Dec. 31, 2022 USD ($) $ / shares | |
Expected term | $ | $ 5 |
Minimum [Member] | |
Rrisk-free interest rate | 2.07% |
Expected volatility | 70% |
Grant date stock price | $ 3.87 |
Maximum [Member] | |
Rrisk-free interest rate | 4.06% |
Expected volatility | 77% |
Grant date stock price | $ 5.30 |
Stock Based Compensation (Det_2
Stock Based Compensation (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Stock based compensation expense | $ 1,052,847 | $ 852,455 | $ 1,980,173 | $ 1,479,293 |
Stock Option [Member] | ||||
Grant date | 10 years | |||
Stock based compensation expense | $ 1,052,848 | $ 677,455 | $ 1,980,174 | $ 1,270,553 |
Weighted average vesting period | 1 year 9 months |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Taxes | ||||
Income tax benefit and expense | $ 755,253 | $ 26,162 | $ 47,052 | $ 235,033 |
Effective tax rate of federal and state income taxes | 29% | |||
Losses attributable to federal taxable income | $ 1,400,000 | $ 1,400,000 |
Stock Based Compensation (Det_3
Stock Based Compensation (Details) - Stock Option [Member] | 6 Months Ended |
Dec. 31, 2022 USD ($) $ / shares shares | |
Beginning balance | shares | 4,279,888 |
Canceled | shares | (55,556) |
Granted | shares | 873,000 |
Option exercisable | shares | 3,578,937 |
Ending balance | shares | 5,097,332 |
Weighted average exercise price, Beginning balance | $ / shares | $ 3.05 |
Weighted average exercise price, canceled | $ / shares | 1.53 |
Weighted average exercise price, granted | $ / shares | 4.78 |
Weighted average exercise price, Ending balance | $ / shares | 3.36 |
Weighted average exercise price, exercisable | $ / shares | $ 2.85 |
Weighted average remaining contractual life, beginning balance | 7 years 5 months 1 day |
Weighted average remaining contractual life, granted | 10 years |
Weighted average remaining contractual life, ending balance | 6 years 7 months 13 days |
Weighted average remaining contractual life, exercisable | 6 years 11 months 15 days |
Aggregate intrinsic value beginning | $ | $ 4,919,182 |
Aggregate intrinsic value granted | $ | 0 |
Aggregate intrinsic value ending | $ | 2,825,830 |
Aggregate intrinsic value Exercisable | $ | $ 2,723,849 |
Discontinued Operation (Details
Discontinued Operation (Details) - USD ($) | 6 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Intangible assets, net of accumulated amortization | $ (2,280,021) | $ (304,835) |
Discontinued Operations [Member] | ||
Tangible assets, inventory / working capital | (1,344,000) | |
Tangible assets, warehouse and manufacturing equipment, net of accumulated depreciation | (679,327) | |
Goodwill | (2,413,814) | |
Intangible assets, net of accumulated amortization | (946,996) | |
Accrued and incurred expenses related to the transaction and additional working capital | (2,051,500) | |
Consideration received, including cash, debt and equity, net | 15,000,000 | |
Total gain recognized | $ 7,564,363 |
Discontinued Operation (Detai_2
Discontinued Operation (Details 1) - Investments - Bloomios [Member] | 6 Months Ended |
Dec. 31, 2022 USD ($) | |
Senior secured convertible debenture | $ 4,500,000 |
Series D convertible preferred stock | 8,500,000 |
Convertible Secured Subordinate Promissory Note | 5,000,000 |
Excess working capital | 388,556 |
Senior secured convertible debenture - OID | 192,690 |
Reserve on Investments - Bloomios | (8,500,000) |
Total Investments - Bloomios | $ 10,081,246 |
Discontinued Operation (Detai_3
Discontinued Operation (Details 2) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Revenues | $ 27,086,672 | $ 4,983,557 | $ 38,643,683 | $ 8,853,667 |
Income loss from discontinued operation | (292,907) | 2,820,190 | (338,418) | 3,967,662 |
Total assets | 76,636,809 | 76,636,809 | ||
Discontinued Operations [Member] | ||||
Revenues | 419,252 | 9,565,802 | 3,042,878 | 14,145,466 |
Cost of sales | 244,829 | 5,836,328 | 1,803,643 | 7,524,668 |
Sales general and administrative expenses | 397,942 | 751,028 | 1,300,102 | 2,280,659 |
Deprecation and amortization | 69,388 | 158,255 | 277,551 | 372,456 |
Total liabilities | 0 | 1,322,253 | 0 | 1,322,253 |
Income loss from discontinued operation | (292,907) | 2,280,190 | (338,418) | 3,967,622 |
Accounts receivable net of allowance for doubtful accounts | 0 | 791,085 | 0 | 791,085 |
Fixed assets net of accumulated depreciation | 0 | 674,389 | 0 | 674,389 |
Total assets | $ 0 | $ 8,108,542 | $ 0 | $ 8,108,542 |
Discontinued Operation (Detai_4
Discontinued Operation (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | ||
Jun. 30, 2022 | Dec. 31, 2022 | Oct. 28, 2022 | Sep. 30, 2022 | |
Interest rate | 8.50% | |||
Common stock | $ 16,713 | $ 17,960 | $ 16,713 | |
Discontinued Operations [Member] | ||||
Maturity date | October 26, 2024 | |||
Original principal amount | $ 5,000,000 | |||
Series D Convertible Preferred Stock | 8,500,000 | |||
Series D Convertible Preferred Stocks | 85,000 | |||
Senior secured convertible debenture | $ 4,500,000 | 4,500,000 | ||
Interest rate | 10% | |||
Original principal amount, after OID | 779,117 | |||
Common stock purchase warrant | 2,853,910 | |||
Common stock | 0 | |||
Valuation allowance | 8,500,000 | |||
Unpaid interest | 35,385 | |||
Accrued interest | $ 449,484 | |||
Convertible preferred stock description | stated value per share of $100 and we are to receive dividends equal to 8.5% per year on a monthly basis, 30 days in arrears |