Cover
Cover - shares | 9 Months Ended | |
Mar. 31, 2023 | May 12, 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 | Yes | |
Document Period End Date | Mar. 31, 2023 | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2023 | |
Entity Ex Transition Period | true | |
Entity Common Stock Shares Outstanding | 18,094,748 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Interactive Data Current | Yes | |
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 $0.001 | |
Trading Symbol | UPXI | |
Security Exchange Name | NASDAQ |
CONDENSED CONSOLDIATED BALANCE
CONDENSED CONSOLDIATED BALANCE SHEETS - USD ($) | Mar. 31, 2023 | Jun. 30, 2022 |
Current assets | ||
Cash | $ 1,181,042 | $ 7,149,806 |
Accounts receivable | 5,346,853 | 1,137,637 |
Inventory | 10,140,644 | 4,725,685 |
Due from Bloomios | 1,617,216 | 0 |
Deferred tax asset, current | 0 | 462,070 |
Prepaid expenses and other receivables | 1,809,730 | 840,193 |
Assets of discontinued operations, net | 0 | 6,449,210 |
Total current assets | 20,095,485 | 20,764,601 |
Property and equipment, net | 7,618,148 | 7,343,783 |
Intangible assets, net | 17,312,833 | 10,641,382 |
Goodwill | 15,056,856 | 5,887,393 |
Deferred tax asset | 2,979,918 | 2,002,759 |
Investments - Bloomios | 9,955,450 | 0 |
Other assets | 118,040 | 100,372 |
Right-of-use asset | 678,145 | 926,570 |
Total other assets | 53,719,390 | 26,902,259 |
Total assets | 73,814,875 | 47,666,860 |
Current liabilities | ||
Accounts payable | 2,635,876 | 2,018,541 |
Accrued compensation | 889,634 | 531,259 |
Deferred revenue | 48,162 | 105,848 |
Accrued liabilities | 4,172,455 | 955,327 |
Acquisition payable | 500,000 | 0 |
Current portion of notes payable | 9,164,189 | 5,424,752 |
Current portion of operating lease payable | 272,116 | 267,029 |
Total current liabilities | 17,682,429 | 9,302,756 |
Operating lease payable, net of current portion | 449,874 | 700,411 |
Notes payable, net of current portion | 18,951,762 | 8,876,949 |
Total long-term liabilities | 19,401,636 | 9,577,360 |
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 18,094,748 and 16,713,345 shares issued and outstanding, respectively | 18,094 | 16,713 |
Additional paid in capital | 44,858,392 | 34,985,597 |
Accumulated deficit | (7,842,606) | (6,270,886) |
Total stockholders' equity attributable to Upexi, Inc. | 37,034,380 | 28,731,924 |
Non-controlling interest in subsidiary | (303,570) | 54,820 |
Total stockholers' equity | 36,730,810 | 28,786,744 |
Total liabilities and stockholders' equity | $ 73,814,875 | $ 47,666,860 |
CONDENSED CONSOLDIATED BALANC_2
CONDENSED CONSOLDIATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2023 | 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 | 18,094,748 | 16,713,345 |
Common Stock, shares outstanding | 18,094,748 | 16,713,345 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | |
Revenues | ||||
Revenue | $ 24,219,445 | $ 4,426,898 | $ 62,863,128 | $ 13,280,565 |
Cost of Revenue | 14,614,754 | 1,098,137 | 36,904,527 | 3,081,112 |
Gross profit | 9,604,691 | 3,328,761 | 25,958,601 | 10,199,453 |
Operating expenses | ||||
Sales and marketing | 3,476,918 | 1,085,823 | 9,210,303 | 3,821,081 |
Distribution costs | 2,578,180 | 605,368 | 8,641,559 | 1,538,830 |
General and administrative expenses | 2,878,255 | 1,970,276 | 8,287,779 | 6,556,627 |
Share-based compensation | 1,146,299 | 854,013 | 3,126,472 | 2,333,306 |
Amortization of acquired intangible assets | 1,691,243 | 236,001 | 3,534,216 | 540,836 |
Depreciation | 232,492 | 115,011 | 669,540 | 361,590 |
Operating Expenses | 12,003,387 | 4,866,492 | 33,469,869 | 15,152,270 |
Loss from operations | (2,398,696) | (1,537,731) | (7,511,268) | (4,952,817) |
Other income (expenses), net | ||||
Interest (expense) income, net | (154,999) | (19,705) | (2,380,972) | (61,699) |
Change in derivative liability | 0 | 0 | (1,770) | 0 |
Gain on sale of Infusionz and select assets | 0 | 0 | 7,564,363 | 0 |
Gain (loss) on sale of property and equipment | 0 | 5,500 | 0 | 5,500 |
Gain on SBA PPP loan extinguishment | 0 | 0 | 0 | 300,995 |
Other income (expense), net | (154,999) | (14,205) | 5,181,621 | 244,796 |
Net loss before income tax | (2,553,695) | (1,551,936) | (2,329,647) | (4,708,021) |
Income tax benefit | 496,880 | 1,351,686 | 449,828 | 1,116,653 |
Net loss from continuing operations | (2,056,815) | (200,250) | (1,879,819) | (3,591,368) |
Loss (income) from discontinued operations | 288,127 | 147,583 | (50,291) | 4,115,245 |
Net loss attributable to non-controlling interest | 124,804 | 0 | 358,390 | 0 |
Net (loss) income attributable to Upexi, Inc. | $ (1,643,884) | $ (52,667) | $ (1,571,720) | $ 523,877 |
Basic income (loss) per share: | ||||
Loss per share from continuing operations | $ (0.11) | $ (0.01) | $ (0.11) | $ (0.22) |
Income (loss) per share from discontinued operations | 0.02 | 0.01 | 0 | 0.26 |
Total (loss) income per shares | (0.11) | 0 | (0.11) | 0.03 |
Diluted (loss) income per share: | ||||
Loss per share from continuing operation | (0.11) | (0.01) | (0.11) | (0.20) |
Income (loss) per share from discontinued operation | 0.02 | 0.01 | 0 | 0.23 |
Total (loss) income per share | $ (0.11) | $ 0 | $ (0.11) | $ 0.03 |
Basic weighted average shares outstanding | 18,015,837 | 16,426,399 | 17,418,877 | 16,080,699 |
Fully diluted weighted average shares outstanding | 18,015,837 | 17,821,810 | 17,418,877 | 17,586,030 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT) (UNAUDITED) - USD ($) | Total | Preferred Stock | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Noncontrolling Interest |
Balance, shares at Jun. 30, 2021 | 500,000 | 15,262,394 | ||||
Balance, amount at Jun. 30, 2021 | $ 21,217,973 | $ 500 | $ 15,262 | $ 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 | 0 | $ 307 | 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 | 0 | $ 100 | 481,900 | 0 | 0 |
Issuance of common stock for acquisition costs, shares | 7,000 | |||||
Issuance of common stock for acquisition costs, amount | 33,740 | 0 | $ 7 | 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 | 0 | $ 35 | 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 | 500,000 | 15,711,339 | ||||
Balance, amount at Sep. 30, 2021 | 24,778,398 | $ 500 | $ 15,711 | 28,420,512 | (3,658,325) | 0 |
Balance, shares at Jun. 30, 2021 | 500,000 | 15,262,394 | ||||
Balance, amount at Jun. 30, 2021 | $ 21,217,973 | $ 500 | $ 15,262 | 25,372,247 | (4,170,036) | 0 |
Issuance of common stock for acquisition costs, shares | 4,000,000 | |||||
Balance, shares at Mar. 31, 2022 | 500,000 | 16,108,323 | ||||
Balance, amount at Mar. 31, 2022 | $ 28,416,494 | $ 500 | $ 16,108 | 32,046,045 | (3,646,159) | 0 |
Balance, shares at Sep. 30, 2021 | 500,000 | 15,711,339 | ||||
Balance, amount at Sep. 30, 2021 | 24,778,398 | $ 500 | $ 15,711 | 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 | $ 0 | $ 667 | 3,999,333 | 0 | 0 |
Balance, shares at Dec. 31, 2021 | 500,000 | 16,378,006 | ||||
Balance, amount at Dec. 31, 2021 | 29,520,686 | $ 500 | $ 16,378 | 33,097,300 | (3,593,492) | 0 |
Issuance of common stock for acquisition costs, amount | 0 | 0 | 36 | 36 | 0 | 0 |
Stock based compensation | 670,098 | 0 | 0 | 670,098 | 0 | 0 |
Net income for the three months ended September 30, 2021 | (52,667) | 0 | $ 0 | 0 | (52,667) | 0 |
Repurchase common stock, shares | (467,765) | |||||
Repurchase common stock, amount | (1,975,888) | 0 | $ (468) | (1,975,420) | 0 | 0 |
Issuance of common stock for exercise of options, shares | 36,582 | |||||
Issuance of common stock for stock compensation, shares | 91,500 | |||||
Issuance of common stock for stock compensation, amount | 183,915 | 0 | $ 92 | 183,823 | 0 | 0 |
Issuance of common stock for stock compensation for building remodel, shares | 70,000 | |||||
Issuance of common stock for stock compensation for building remodel, amount | 70,350 | $ 0 | $ 70 | 70,280 | 0 | 0 |
Balance, shares at Mar. 31, 2022 | 500,000 | 16,108,323 | ||||
Balance, amount at Mar. 31, 2022 | 28,416,494 | $ 500 | $ 16,108 | 32,046,045 | (3,646,159) | 0 |
Balance, shares at Jun. 30, 2022 | 500,000 | 16,713,345 | ||||
Balance, amount at Jun. 30, 2022 | 28,786,744 | $ 500 | $ 16,713 | 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 | 500,000 | 16,713,345 | ||||
Balance, amount at Sep. 30, 2022 | 27,038,900 | $ 500 | $ 16,713 | 35,983,273 | (8,868,401) | (93,185) |
Balance, shares at Jun. 30, 2022 | 500,000 | 16,713,345 | ||||
Balance, amount at Jun. 30, 2022 | 28,786,744 | $ 500 | $ 16,713 | 34,985,597 | (6,270,886) | 54,820 |
Balance, shares at Mar. 31, 2023 | 500,000 | 18,094,748 | ||||
Balance, amount at Mar. 31, 2023 | 36,730,810 | $ 500 | $ 18,094 | 44,858,392 | (7,842,605) | (303,570) |
Balance, shares at Sep. 30, 2022 | 500,000 | 16,713,345 | ||||
Balance, amount at Sep. 30, 2022 | 27,038,900 | $ 500 | $ 16,713 | 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 | $ 0 | $ 1,247 | 5,998,753 | 0 | 0 |
Balance, shares at Dec. 31, 2022 | 500,000 | 17,960,748 | ||||
Balance, amount at Dec. 31, 2022 | 36,746,195 | $ 500 | $ 17,960 | 43,105,223 | (6,198,722) | (178,766) |
Stock based compensation | 1,146,299 | 0 | $ 0 | 1,146,299 | 0 | 0 |
Issuance of common stock for services, shares | 134,000 | |||||
Issuance of common stock for services, amount | 607,004 | 0 | $ 134 | 606,870 | ||
Net income for the three months ended September 30, 2021 | (1,768,688) | $ 0 | $ 0 | 0 | (1,643,884) | (124,804) |
Balance, shares at Mar. 31, 2023 | 500,000 | 18,094,748 | ||||
Balance, amount at Mar. 31, 2023 | $ 36,730,810 | $ 500 | $ 18,094 | $ 44,858,392 | $ (7,842,605) | $ (303,570) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) | 9 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Cash flows from operating activities | ||
Net (loss) income from operations | $ (1,571,720) | $ 523,877 |
Adjustments to reconcile net income from continuing operations to net cash provided by operating activities: | ||
Depreciation and amortization | 4,203,756 | 902,426 |
Gain on sale of Infusionz and select assets | (7,564,363) | 0 |
Gain on sale of assets | 0 | (5,500) |
Inventory write-offs | 34,328 | 140,000 |
Bad debt expense | 0 | 1,000 |
Accrued interest on note receivable from Bloomios | (141,635) | 0 |
Amortization of senior security original issue discount | (455,450) | 0 |
Uncollected transition fees from Bloomios | (428,500) | 0 |
Non-controlling interest | (358,390) | 0 |
Change in deferred tax asset | (515,089) | 156,204 |
Shares issued for services | 0 | 358,915 |
Shares issued for finder fee | 1,770 | 33,740 |
Stock based compensation | 3,126,472 | 1,940,651 |
Changes in assets and liabilities, net of acquired amounts | ||
Accounts receivable | 2,490,729 | 21,735 |
Inventory | 2,293,866 | (604,325) |
Prepaid expenses and other assets | (28,090) | 533,103 |
Operating lease payable | 2,975 | (17,062) |
Accounts payable and accrued liabilities | 2,488,065 | 731,726 |
Deferred revenue | (57,686) | 85,030 |
Net cash provided by operating activities - Continuing Operations | 3,521,038 | 4,801,520 |
Net cash used in operating activities - Discontinued Operations | 0 | (2,634,975) |
Net cash provided by operating activities | 3,521,038 | 2,166,545 |
Cash flows from investing activities | ||
Acquisition of Lucky Tail | (3,012,327) | 0 |
Acquisition of VitaMedica, Inc., net of cash acquired | (500,000) | (2,574,589) |
Acquisition of New England Technology, Inc. | (2,085,390) | 0 |
Acquisition of Cygnet | (1,050,000) | 0 |
Acquisition of Interative Offers, net of cash acquired | 0 | (1,854,193) |
Proceeds from the sale of Infusionz and selected assets | 4,273,427 | 6,000 |
Acquisition of property and equipment | (278,683) | (5,649,100) |
Net cash used in investing activities - Continuing Operations | (2,652,973) | (10,071,882) |
Net cash (used in) provided by investing activities - Discontinued Operations | 0 | |
Net cash used in investing activities | (2,652,973) | (10,071,882) |
Cash flows from financing activities | ||
Repayment of notes payable | (470,168) | (150,000) |
Repayment of SBA note payable | (254,804) | 0 |
Repayment of the senior convertible notes payable | (6,307,775) | 0 |
Payment on line of credit, net | (6,826,338) | 0 |
Proceeds on note payable on building | 3,000,000 | 0 |
Stock repurchase program | 0 | (1,975,888) |
Repayment on note payable on building | (97,744) | 0 |
Proceeds from issuance of convertible debt | 2,650,000 | 0 |
Proceeds on note payable, related party | 1,470,000 | 0 |
Net cash used in financing activities - Continuing Operations | (6,836,829) | (2,125,888) |
Net cash (used in) provided by financing activities - Discontinued Operations | 0 | 0 |
Net cash used in financing activities | (6,836,829) | (2,125,888) |
Net decrease in cash - Continuing Operations | (5,968,764) | (7,396,250) |
Net decrease in cash - Discontinued Operations | 0 | (2,634,975) |
Cash, beginning of period | 7,149,806 | 14,534,211 |
Cash, end of period | 1,181,042 | 4,502,986 |
Supplemental cash flow disclosures | ||
Interest paid | 326,918 | 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 LuckyTail | 0 | 0 |
Issuance of common stock for acquisition of E-Core | 6,000,000 | 0 |
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 |
Operating assets designated as held 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 | 9 Months Ended |
Mar. 31, 2023 | |
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 April 12, 2023, the Company entered a deal to acquire the remaining 45% interest for structured cash payments equaling $1.95 million over the subsequent 12 months. The deal is expected to close the week of May 15, 2023. 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 March 31, 2023 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 nine months ended March 31, 2023, 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 nine months ended March 31, 2022 to conform to the presentation as of and for the three and nine months ended March 31, 2023. |
Acquisition
Acquisition | 9 Months Ended |
Mar. 31, 2023 | |
Acquisition | |
Acquisition | Note 2. Acquisitions VitaMedica Corporation Effective August 1, 2021, the Company purchased VitaMedica through Grove Acquisition Subsidiary, Inc., a Nevada corporation and wholly owned subsidiary of the Company from VitaMedica Corporation, a California corporation, David Rahm and Yvette La-Garde. VitaMedica Corporation is a leading online seller of supplements for surgery, recovery, skin, beauty, health and wellness. The following table summarizes the consideration transferred to acquire VitaMedica and the amount of identified assets acquired, and liabilities assumed at the acquisition date. Fair value of consideration transferred: Cash $ 2,000,000 Cash, working capital adjustment 74,589 Common stock, 100,000 shares valued at $4.82 per common share, the closing price on August 4, 2021. 482,000 Note payable 500,000 $ 3,556,589 Recognized amounts of identifiable assets acquired and liabilities assumed: Accounts receivable $ 107,446 Inventory 619,837 Prepaid expenses 117,268 Property and equipment 13,220 Trade name 463,000 Customer list 1,329,000 Non-compete 143,000 Right of use asset 112,612 Accounts payable (140,068 ) Operating lease (56,894 ) Operating lease (112,612 ) Total identifiable net assets $ 2,595,809 Goodwill $ 960,780 No contingent consideration was recorded with this acquisition. The goodwill is deductible for tax purposes and attributable to the Company’s added ability to enter the online seller’s market for surgery supplements, recovery, skin, beauty, health and wellness and provided improved gross margins through synergies recognized with the consolidation of manufacturing and distribution operations. The Company’s condensed consolidated financial statements for the three and nine months ended March 31, 2023 include the actual results for VitaMedica. For the three and nine months ended March 31, 2022, the Company’s condensed consolidated financial statements include the actual results of VitaMedica for the period August 1, 2021 to March 31, 2022. 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 nine months ended March 31, 2022. Interactive Offers, LLC Effective October 1, 2021, the Company acquired Interactive Offers, LLC, a Delaware limited liability company (“Interactive”) from 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. 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 following table summarizes the consideration transferred to acquire Interactive and the amount of identified assets acquired, and liabilities assumed at the acquisition date. Fair value of consideration transferred: Cash $ 2,100,000 Common stock, 100,000 shares valued at $4.88 per common share, the closing price on October 1, 2021. 2,733,630 $ 4,833,630 Recognized amounts of identifiable assets acquired and liabilities assumed: Cash $ 245,247 Accounts receivable 23,791 Prepaid expenses 32,543 Property and equipment 3,212 Trade name 146,000 Customer list 763,000 Software 1,590,000 Non-compete 132,000 Accounts payable (174,943 ) Accrued liabilities (313,800 ) Accrued compensation (24,193 ) Deferred revenue (478,385 ) Total identifiable net assets $ 1,944,472 Goodwill $ 2,889,158 No contingent consideration was recorded with this acquisition. The goodwill is deductible for tax purposes and attributable to the Company having 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. The Company’s condensed consolidated financial statements for the three and nine months ended March 31, 2023, include the actual results of Interactive. Cygnet Online, LLC Effective April 1, 2022, the Company acquired 55% of Cygnet Online, LLC, a Delaware limited liability company (“Cygnet”). The Company purchased 55% of the equity in the business with a purchase price of $5,515,756, as amended. The following table summarizes the consideration transferred to acquire Interactive and the amount of identified assets acquired, and liabilities assumed at the acquisition date. Fair value of consideration transferred: Cash $ 1,500,000 Convertible note payable, convertible at $6.00 per common share 1,050,000 Earnout payment - Common stock, 555,489 shares valued at $5.34 per common share, the closing price on April 1, 2022. 2,965,756 $ 5,515,756 Recognized amounts of identifiable assets acquired and liabilities assumed: Cash $ 471,237 Accounts receivable 860,882 Inventory 2,337,208 Prepaid expenses 6,900 Property and equipment 7,602 Right to use asset 410,365 Other asset 6,545 Online sales channels 1,800,000 Vendor relationships 6,000,000 Accrued liabilities (701,606 ) Notes payable (7,298,353 ) Operating lease (422,479 ) Total identifiable net assets $ 3,478,301 Goodwill $ 2,037,455 The Company’s condensed consolidated financial statements for the three and nine months ended March 31, 2022, include the actual results of 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. The Company did not exercise its right to purchase Seller’s remaining membership interests in Cygnet. 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. On April 12, 2023, the Company entered into an agreement to acquire the remaining 45% interest for structured cash payments equaling $1.95 million over the subsequent 12 months. The deal is expected to close the week of May 15, 2023. If the deal does not close, the Seller’s right to cause the Company to purchase all of the Seller’s remaining membership interest would still be available to the Seller. 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 Effective August 13, 2023, the Company acquired the business of LuckyTail from GA Solutions, LLC. The following table summarizes the consideration transferred to acquire LuckyTail and the amount of identified assets acquired, and liabilities assumed at the acquisition date. Fair value of consideration transferred: Cash $ 2,000,000 Cash payment, 90 days after close 500,000 Cash payment, 180 days after close 500,000 Contingent consideration 130,620 Cash payment, working capital adjustment 490,822 $ 3,621,442 Recognized amounts of identifiable assets acquired and liabilities assumed: Inventory $ 490,822 Trade name 360,000 Customer list 2,304,000 Total identifiable net assets $ 3,154,822 Goodwill $ 466,620 The Company’s condensed consolidated financial statements for the three and nine months ended March 31, 2023, include the actual results of LuckyTail from August 13, 2022, through March 31, 2023. The Company agreed to purchase certain inventory from the Seller upon its valuation having been determined, at close the inventory and other current assets were agreed to be $490,822, consisting of inventory and prepaid inventory. 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 March 31, 2023. The Company adjusted its estimate of $150,000 for this contingent consideration to $130,320 with the offset to goodwill. The acquisition of LuckyTail provided the Company with 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 Effective October 21, 2022, the Company acquired E-Core Technology, Inc. (“E-Core”) d/b/a New England Technology, Inc., a Florida corporation (“New England Technology”). The following table summarizes the consideration transferred to acquire E-core and the amount of identified assets acquired, and liabilities assumed at the acquisition date. Fair value of consideration transferred: Cash $ 100,000 Cash payment, 120 days 3,000,000 Note payable 5,750,000 Note payable 2 5,750,000 Convertible note payable, convertible at $4.81 per common share 3,500,000 Common stock, 1,247,402 shares valued at $4.81 per common share, the calculated closing price on October 21, 2023. 6,000,000 $ 24,100,000 Recognized amounts of identifiable assets acquired and liabilities assumed: Cash $ 1,014,610 Accounts receivable 6,699,945 Inventory 7,750,011 Prepaid expenses 75,721 Trade name 1,250,000 Customer relationships 6,000,000 Accrued liabilities (192,051 ) Line of credit (7,201,079 ) Total identifiable net assets $ 15,397,157 Goodwill $ 8,702,843 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 Company’s condensed consolidated financial statements for the three and nine months ended March 31, 2023, include the actual results of E-Core from October 21, 2022 through March 31, 2023. 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 nine months ended: March 31, 2023 2022 VitaMedica $ 5,525,651 $ 3,571,237 Interactive 1,054,935 1,543,651 Cygnet 20,806,317 LuckyTail 3,579,727 - E-Core 25,822,931 - $ 56,789,561 $ 5,114,888 Net revenue included in the three months ended: March 31, 2023 2022 VitaMedica $ 1,943,955 $ 1,164,971 Interactive 345,110 690,634 Cygnet 7,359,661 - LuckyTail 1,394,459 - E-Core 13,647,412 - $ 24,690,597 $ 1,855,605 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 nine months ended March 31, 2023 and the three and nine months ended March 31, 2022, as if the acquisitions occurred on July 1, 2021. The results of operations for VitaMedica, Interactive and Cygnet are included in the three and nine months ended March 31, 2023 and the results of operations for LuckyTail are included from August 13, 2022 to March 31, 2023. 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 Nine months ended March 31, 2023 Upexi, Inc. LuckyTail E-Core Adjustments Proforma Net sales $ 62,863,128 $ 892,270 $ 12,905,836 $ $ 76,661,234 Cost of sales $ 36,904,527 $ 137,088 $ 11,177,032 $ $ 48,218,647 Operating expenses $ 33,469,868 $ 383,476 $ 1,050,602 $ 561,721 $ 35,465,667 Net income (loss) from continuing operations $ (1,879,818 ) $ 371,706 $ 660,860 $ (561,721 ) $ (1,408,973 ) Basic income (loss) per common share $ (0.11 ) $ - $ 0.53 $ $ (0.08 ) Weighted average shares outstanding 17,418,877 - 1,247,402 (693,001 ) 17,973,278 Pro Forma, Unaudited Proforma Three months ended March 31, 2022 Upexi, Inc. Cygnet LuckyTail E-Core Adjustments Proforma Net sales $ 4,426,898 7,527,927 $ 1,389,012 $ 11,191,296 $ $ 24,535,133 Cost of sales $ 1,098,137 6,372,432 $ 274,175 $ 9,947,860 $ $ 17,692,604 Operating expenses $ 4,866,492 695,574 $ 766,952 $ 638,501 $ 1,124,499 $ 8,092,018 Net income (loss) from continuing operations $ (200,250 ) 382,657 $ 347,885 $ 604,475 $ (1,124,499 ) $ 10,268 Basic income (loss) per common share $ (0.01 ) 0.69 $ - $ - $ $ 0.00 Weighted average shares outstanding 16,426,399 555,489 - 1,247,402 18,229,290 Pro Forma, Unaudited Proforma Nine months ended March 31, 2022 Upexi, Inc. VitaMedica Interactive Cygnet LuckyTail E-core Adjustments Proforma Net sales $ 13,280,565 $ 384,391 $ 1,329,522 $ 22,583,781 $ 3,316,325 $ 33,675,631 $ $ 74,570,215 Cost of sales $ 3,081,112 $ 93,509 $ - $ 19,117,296 $ 836,530 $ 29,793,652 $ $ 52,922,099 Operating expenses $ 15,152,270 $ 255,286 $ 1,816,464 $ 2,086,722 $ 1,738,091 $ 2,718,407 $ 3,128,348 $ 26,895,588 Net income (loss) from continuing operations $ (3,591,368 ) $ 35,596 $ (376,987 ) $ 1,147,971 $ 741,703 $ 1,178,491 $ (3,128,348 ) $ (3,992,942 ) Basic income (loss) per common share $ (0.22 ) $ 0.36 $ (0.67 ) $ 2.07 $ - $ 0.94 $ $ (0.22 ) Weighted average shares outstanding 16,080,699 100,000 560,170 555,489 - 1,247,402 (462,336 ) 18,081,424 VitaMedica amortization expense of $496,356 annually and $41,363 monthly is based on the purchase price allocation report. For the nine months ended March 31, 2022, 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 nine months ended March 31, 2022, 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 nine months ended March 31, 2022, the proforma adjustment included $1,575,000, nine months of amortization expense and $525,000, three months of amortization expense for the three months ended March 31, 2022. 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 nine months ended March 31, 2023, the proforma adjustment included $27,000 of amortization expense for half a month. For the three months ended March 31, 2022, the proforma adjustment included $162,000 of amortization and for the nine months ended March 31, 2022, the proforma adjustment included $486,000 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 nine months ended March 31, 2023, the proforma adjustment included $534,721 of amortization expense for the six months, three and two third a month. For the three months ended March 31, 2022, the proforma adjustment included $437,499 of amortization and for the nine months ended March 31, 2022, the proforma adjustment included $1,312,497 of amortization expense. For the three and nine months ended March 31, 2023, the Company incurred acquisition related expenses of $15,517 and $358,300 respectively. For the three and nine months ended March 31, 2022, the Company incurred acquisition related expenses of $22,507 and $240,234 respectively. These costs are primarily external legal, accounting and consulting services directly related to completed acquisitions, due diligence, and review of possible target acquisitions. These acquisition-related costs are included in the general and administrative expenses on the Company’s condensed consolidated statements of operations. |
Inventory
Inventory | 9 Months Ended |
Mar. 31, 2023 | |
Inventory | |
Inventory | Note 3. Inventory Inventory consisted of the following: March 31, 2023 June 30, 2022 Finished goods $ 10,140,644 $ 4,725,685 The Company periodically reviews its inventory and makes adjustments to net realizable value, as appropriate. . During the three and nine months ended March 31, 2023, the Company wrote off inventory valued at $0 and $34,328, respectively. During the three and nine months ended March 31, 2022, the Company wrote off inventory valued at $0 and $140,000, respectively. |
Property and Equipment
Property and Equipment | 9 Months Ended |
Mar. 31, 2023 | |
Property and Equipment | |
Property and Equipment | Note 4. Property and Equipment Property and equipment consist of the following: March 31, 2023 June 30, 2022 Furniture and fixtures $ 172,662 $ 51,273 Computer equipment 156,875 103,615 Internal use software 521,093 - Manufacturing equipment 3,206,060 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 9,284,430 8,211,689 Less accumulated depreciation (1,666,282 ) (867,906 ) $ 7,618,148 $ 7,343,783 Depreciation expense for the three months ended March 31, 2023 and 2022 was $232,492 and $143,537, respectively. Depreciation expense for the nine months ended March 31, 2023 and 2022 was $669,540 and $390,116, respectively. During the three and nine months ended March 31, 2022, the Company sold vehicles with a carrying value of $500 for cash proceeds of $6,000, which resulted in a gain on the disposal of $5,500. |
Intangible Assets
Intangible Assets | 9 Months Ended |
Mar. 31, 2023 | |
Intangible Assets | |
Intangible Assets | Note 5. Intangible Assets Intangible assets as of March 31, 2023: Estimated Life Cost Accumulated Amortization Net Book Value Customer relationships 4 years $ 10,396,000 $ 1,797,188 $ 8,598,812 Trade name 5 years 2,219,000 339,584 1,879,416 Non-compete agreements Term of agreement 275,000 253,395 21,605 Online sales channels 2 years 1,800,000 900,000 900,000 Vender relationships 5 years 6,000,000 1,200,000 4,800,000 Software 5 years 1,590,000 477,000 1,113,000 $ 22,280,000 $ 4,967,167 $ 17,312,833 For the three months ended March 31, 2023 and 2022, the Company amortized approximately $1,691,243 and $417,549, respectively. For the nine months ended March 31, 2023 and 2022, the Company amortized approximately $3,534,216 and $1,085,481, respectively. The following intangible assets were added during the nine months ended March 31, 2023 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 $ 689,292 $ 1,402,708 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 $ 1,724,617 $ 10,641,383 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 March 31, 2023 are as follows: June 30, 2023 $ 1,381,700 June 30, 2024 5,240,905 June 30, 2025 4,560,800 June 30, 2026 4,560,800 June 30, 2027 1,568,628 Thereafter - $ 17,312,833 |
Prepaid Expense and Other Curre
Prepaid Expense and Other Current Assets | 9 Months Ended |
Mar. 31, 2023 | |
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: March 31, 2023 June 30, 2022 Insurance $ 218,046 $ 32,045 Prepayment to vendors 399,627 175,378 Deposits on services 82,024 13,762 Prepaid monthly rent 6,900 6,900 Subscriptions and services being amortized over the service period - 274,959 Prepaid sales tax 75,721 - Other deposits - 337,149 Stock issued for prepaid interest on convertible note payable 569,427 - Other prepaid expenses 86,623 - Cygnet acquisition pre-payment 150,000 Amazon undeposited funds 221,362 - Total $ 1,809,730 $ 840,193 |
Operating Leases
Operating Leases | 9 Months Ended |
Mar. 31, 2023 | |
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 March 31, 2023: 2023 $ 94,255 2024 366,370 2025 153,458 2026 120,512 2027 28,684 Total undiscounted future minimum lease payments 763,279 Less: Imputed interest (41,289 ) Present value of operating lease obligation $ 721,990 The Company’s weighted average remaining lease term and weighted average discount rate for operating leases as of March 31, 2023 are: Weighted average remaining lease term 29 Months Weighted average incremental borrowing rate 5.0 % For the three and nine months ended March 31, 2023, 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 March 31, 2023 Nine Months Ended March 31, 2023 Operating lease cost: Operating lease cost $ 99,101 $ 285,855 Amortization of ROU assets 67,088 233,409 Interest expense 4,595 25,030 Total lease cost $ 170,784 $ 544,294 |
Accrued Liabilities and Acquisi
Accrued Liabilities and Acquisition Payable | 9 Months Ended |
Mar. 31, 2023 | |
Accrued Liabilities and Acquisition Payable | |
Accrued Liabilities and Acquisition Payable | Note 8. Accrued Liabilities and Acquisition Payable Accrued liabilities consist of the following: March 31, 2023 June 30, 2022 Accrued expenses for loyalty program $ - $ 6,418 Accrued interest 504,892 147,887 Accrued vendor liabilities 153,468 29,960 Accrued expenses on credit cards 476,802 108,735 Accrued sales tax 155,990 108,425 Derivative liability - 81,909 Accrued expenses from sale of manufacturing operations 1,724,110 - Other accrued liabilities 1,157,193 471,993 $ 4,172,455 $ 955,327 Acquisition Payable consist of the following: March 31, 2023 June 30, 2022 Payments related to the acquisition of LuckyTail $ 500,000 $ - $ 500,000 $ - The payable is estimated by management and due to the sellers of the 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. This acquisition payment has been made as of May 15, 2023. |
Convertible Promissory Notes an
Convertible Promissory Notes and Notes Payable | 9 Months Ended |
Mar. 31, 2023 | |
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 March 31, 2023 are summarized below: Maturity Date March 31, 2023 Convertible Notes, 36-month term notes, 0% cash interest, collateralized with all the assets of the Company October 31, 2025 $ 3,500,000 Subordinated Promissory Notes, 24-month term notes, 4% cash interest, collateralized with all the assets of the Company October 31, 2024 5,750,000 Subordinated Promissory Notes, 12-month term notes, 4% cash interest, collateralized with all the assets of the Company October 31, 2023 5,750,000 Marshall Loan, 2-year term note, 8.5% cash interest, 3.5% PIK interest and subordinate to the Convertible Notes June 28, 2024 1,401,734 Mortgage Loan, 10-year term note, 4.8% interest, collateralized by land and warehouse building September 26, 2032 2,902,256 Promissory Note, 21- month term note, 18.11% interest payable with common stock and subordinate to the Convertible Notes November 22, 2024 2,150,000 Promissory Note, 21-month term note, 10% cash interest and subordinate to the Convertible Notes November 22, 2024 503,714 SBA note payable, 30-year term note, 6% interest rate and collateralized with all assets of the Company October 6, 2031 3,961,444 Inventory consignment note, 60 monthly payments, with first payment due June 30, 2022, 3.5% interest rate and no security interest in the assets of the business June 30, 2027 1,138,094 Line of Credit, $10,000,000 inventory and accounts receivable line of credit, interest rate of prime minus ½% payable monthly, $4,935,545 available at March 31, 2023 374,741 GF Note, 6 annual payments, with first payment due December 31, 2022, 3.5% interest rate and no security interest in the assets of the business November 7, 2026 683,968 Total notes payable 28,115,951 Less current portion of notes payable 9,164,189 Notes payable, net of current portion $ 18,951,762 Future payments on notes payable are as follows: For the year ended June 30: 2023 $ 1,383,520 2024 9,056,433 2025 10,537,645 2026 2,326,625 2027 994,333 Thereafter 3,971,947 $ 28,270,503 Convertible notes, original discount and related fees and costs (154,552 ) $ 28,115,951 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 $1,770 for the change in the derivative liability for the period ended March 31, 2023. 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. On February 22, 2023, the Company executed a promissory note with an investor, in the original principal amount of $2,150,000 together with the issuance of 134,000 restricted shares (“the PIK shares”) of the Company’s common stock at a price of $4.53 per share. The promissory note has a 21-month term and bears interest at 18.11% payable with the PIK shares. The promissory note provides for 12 monthly payments of principal beginning on December 22, 2023, and PIK interest of restricted shares on the Effective Date of the promissory note. The Company shall have the right at any time to convert all or any part of the outstanding and unpaid principal into fully paid and non-assessable shares of common stock, or any shares of capital stock or other securities, together with the PIK shares at a price per conversion share equal to $5.00. On February 22, 2023, the Company executed a promissory note with an investor, in the original principal amount of $560,000. The promissory note has a 21-month term and bears cash interest at the rate of 10% per annum. The promissory note provides for monthly payments of interest beginning on March 22, 2023 and 12 monthly payments of principal beginning on December 22, 2023. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Mar. 31, 2023 | |
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 an interest rate of 8.5% per annum with an additional PIK of 3.5% per annum. On February 22, 2023, the Company entered into a promissory note with a relative of Allan Marshall, CEO and Director of the Company. The loan was for $2,150,000 and has a 21-month term with an interest rate of 18.11% per annum payable with PIK shares of restricted common stock. |
Equity Transactions
Equity Transactions | 9 Months Ended |
Mar. 31, 2023 | |
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 nine months ended March 31, 2022, the Company issued 306,945 shares of common stock for the acquisition of Infusionz, the shares were valued at $1,764,876. During the nine months ended March 31, 2022, the Company issued 100,000 shares of common stock for the acquisition of VitaMedica, the shares were valued at $482,000. During the nine months ended March 31, 2022, the Company issued 7,000 shares of common stock as a finder’s fee, the shares were valued at $33,740. During the nine months ended March 31, 2022, 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 nine months ended March 31, 2022, 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 nine months ended March 31, 2023, 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. During the nine months ended March 31, 2023, the Company issued 134,000 shares of common stock for prepayment of interest on a note payable. |
Stock Based Compensation
Stock Based Compensation | 9 Months Ended |
Mar. 31, 2023 | |
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 nine months ended March 31, 2023: 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 (143,613 ) 1.21 - - Granted 897,000 2.52 10 - Options outstanding at March 31, 2023 5,033,275 $ 3.38 6.42 $ 4,724,980 Options exercisable at March 31, 2023 (vested) 3,894,776 $ 3.04 6.72 $ 4,550,343 Stock-based compensation expense attributable to stock options was $1,019,883 and $670,098 for the three months ended March 31, 2023 and 2022, respectively. Stock-based compensation expense attributable to stock options was $3,000,057 and $1,940,651 for the nine months ended March 31, 2023 and 2022, respectively. As of March 31, 2023 there was $3,154,841 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 nine months ended March 31, 2023: March 31, 2023 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 nine months ended March 31, 2023 and 2022. |
Income Taxes
Income Taxes | 9 Months Ended |
Mar. 31, 2023 | |
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 benefit was $496,880 and $449,828 for the three and nine months ended March 31, 2023, respectively. The Company’s income tax benefit was $1,351,686 and $1,116,653 for the three and nine months ended March 31, 2022, respectively. The income tax benefit for the three and nine months ended March 31, 2023, was primarily attributable to federal and state income taxes and nondeductible expenses for an effective tax rate of approximately 20.67%. For the three and nine months ended March 31, 2023, the difference between the U.S. statutory rate and the Company’s effective tax rate are the book to tax differences and the net operating loss allocation at the state income tax level. 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 March 31, 2023, there was approximately $3,600,000 of losses available to reduce federal taxable income in future years and can be carried forward indefinitely. |
Risks and Uncertainties
Risks and Uncertainties | 9 Months Ended |
Mar. 31, 2023 | |
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 | 9 Months Ended |
Mar. 31, 2023 | |
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 acquisitions 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 $8,500,000 and a valuation allowance of $8,500,000. 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 March 31, 2023, there was a receivable balance from the buyer of $1,617,217, net. Advance for payroll $ 50,000 Operating expense 608,517 Management fees 428,500 Excess working capital 388,565 Accrued interest 141,635 Total amounts due from Bloomios $ 1,617,217 These are recorded on the balance sheet as due from Bloomios. As of the date of this report, the Company continues to assist Bloomios under the transition agreement. Investments - Bloomios: Senior secured convertible debenture, net of unamortized original issue discount $ 4,955,450 Series D convertible preferred stock 8,500,000 Convertible Secured Subordinate Promissory Note 5,000,000 Reserve on Investments - Bloomios (8,500,000 ) Total Investments - Bloomios $ 9,955,450 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 March 31, 2023 2022 Discontinued Operations Revenue $ - $ 5,844,690 Cost of sales - 3,086,645 Sales, general and administrative expenses - 1,764,754 Depreciation and amortization (288,127 ) 200,353 Income (loss) from discontinued operations 288,127 792,918 Accounts receivable net of allowance for doubtful accounts - 941,465 Fixed assets, net of accumulated depreciation - 670,528 Total assets - 8,330,573 Total liabilities $ - $ 167,008 Nine Months Ended March 31, 2023 2022 Discontinued Operations Revenue $ 3,042,878 $ 16,107,558 Cost of sales $ 1,803,643 $ 8,127,404 Sales, general and administrative expenses $ 1,300,102 $ 2,946,810 Depreciation and amortization $ 10,576 $ 573,171 Income (loss) from discontinued operations, net of tax $ (50,291 ) $ 4,115,245 Accounts receivable net of allowance for doubtful accounts - $ 941,465 Fixed assets, net of accumulated depreciation - $ 670,528 Total assets - $ 8,330,573 Total liabilities $ - $ 167,008 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Mar. 31, 2023 | |
Subsequent Events | |
Subsequent Events | Note 16. Subsequent Events On May 12, 2023, the Company agreed to sell 2,121,213 shares of common stock for a purchase price of approximately $7,000,000. After deducting the underwriter’s commissions, discounts, and offering expenses payable by the company, the Company expects to receive net proceeds of approximately $6,060,000. In addition, the Company issued warrants to purchase approximately 169,000 shares of the Company’s common stock at a purchase price of $4.774 per common share. |
Description of the Business (Po
Description of the Business (Policies) | 9 Months Ended |
Mar. 31, 2023 | |
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 April 12, 2023, the Company entered a deal to acquire the remaining 45% interest for structured cash payments equaling $1.95 million over the subsequent 12 months. The deal is expected to close the week of May 15, 2023. 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 March 31, 2023 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 nine months ended March 31, 2023, 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 nine months ended March 31, 2022 to conform to the presentation as of and for the three and nine months ended March 31, 2023. |
Acquisition (Table)
Acquisition (Table) | 9 Months Ended |
Mar. 31, 2023 | |
Schedule of revenue from acquisitions | March 31, 2023 2022 VitaMedica $ 5,525,651 $ 3,571,237 Interactive 1,054,935 1,543,651 Cygnet 20,806,317 LuckyTail 3,579,727 - E-Core 25,822,931 - $ 56,789,561 $ 5,114,888 March 31, 2023 2022 VitaMedica $ 1,943,955 $ 1,164,971 Interactive 345,110 690,634 Cygnet 7,359,661 - LuckyTail 1,394,459 - E-Core 13,647,412 - $ 24,690,597 $ 1,855,605 |
Schedule of pro forma | Pro Forma, Unaudited Proforma Nine months ended March 31, 2023 Upexi, Inc. LuckyTail E-Core Adjustments Proforma Net sales $ 62,863,128 $ 892,270 $ 12,905,836 $ $ 76,661,234 Cost of sales $ 36,904,527 $ 137,088 $ 11,177,032 $ $ 48,218,647 Operating expenses $ 33,469,868 $ 383,476 $ 1,050,602 $ 561,721 $ 35,465,667 Net income (loss) from continuing operations $ (1,879,818 ) $ 371,706 $ 660,860 $ (561,721 ) $ (1,408,973 ) Basic income (loss) per common share $ (0.11 ) $ - $ 0.53 $ $ (0.08 ) Weighted average shares outstanding 17,418,877 - 1,247,402 (693,001 ) 17,973,278 Pro Forma, Unaudited Proforma Three months ended March 31, 2022 Upexi, Inc. Cygnet LuckyTail E-Core Adjustments Proforma Net sales $ 4,426,898 7,527,927 $ 1,389,012 $ 11,191,296 $ $ 24,535,133 Cost of sales $ 1,098,137 6,372,432 $ 274,175 $ 9,947,860 $ $ 17,692,604 Operating expenses $ 4,866,492 695,574 $ 766,952 $ 638,501 $ 1,124,499 $ 8,092,018 Net income (loss) from continuing operations $ (200,250 ) 382,657 $ 347,885 $ 604,475 $ (1,124,499 ) $ 10,268 Basic income (loss) per common share $ (0.01 ) 0.69 $ - $ - $ $ 0.00 Weighted average shares outstanding 16,426,399 555,489 - 1,247,402 18,229,290 Pro Forma, Unaudited Proforma Nine months ended March 31, 2022 Upexi, Inc. VitaMedica Interactive Cygnet LuckyTail E-core Adjustments Proforma Net sales $ 13,280,565 $ 384,391 $ 1,329,522 $ 22,583,781 $ 3,316,325 $ 33,675,631 $ $ 74,570,215 Cost of sales $ 3,081,112 $ 93,509 $ - $ 19,117,296 $ 836,530 $ 29,793,652 $ $ 52,922,099 Operating expenses $ 15,152,270 $ 255,286 $ 1,816,464 $ 2,086,722 $ 1,738,091 $ 2,718,407 $ 3,128,348 $ 26,895,588 Net income (loss) from continuing operations $ (3,591,368 ) $ 35,596 $ (376,987 ) $ 1,147,971 $ 741,703 $ 1,178,491 $ (3,128,348 ) $ (3,992,942 ) Basic income (loss) per common share $ (0.22 ) $ 0.36 $ (0.67 ) $ 2.07 $ - $ 0.94 $ $ (0.22 ) Weighted average shares outstanding 16,080,699 100,000 560,170 555,489 - 1,247,402 (462,336 ) 18,081,424 |
VitaMedica Corporation [Member] | |
Schedule Of recognized identified assets acquired, and liabilities assumed | Fair value of consideration transferred: Cash $ 2,000,000 Cash, working capital adjustment 74,589 Common stock, 100,000 shares valued at $4.82 per common share, the closing price on August 4, 2021. 482,000 Note payable 500,000 $ 3,556,589 Recognized amounts of identifiable assets acquired and liabilities assumed: Accounts receivable $ 107,446 Inventory 619,837 Prepaid expenses 117,268 Property and equipment 13,220 Trade name 463,000 Customer list 1,329,000 Non-compete 143,000 Right of use asset 112,612 Accounts payable (140,068 ) Operating lease (56,894 ) Operating lease (112,612 ) Total identifiable net assets $ 2,595,809 Goodwill $ 960,780 |
Interactive Offers, LLC [Member] | |
Schedule Of recognized identified assets acquired, and liabilities assumed | Fair value of consideration transferred: Cash $ 2,100,000 Common stock, 100,000 shares valued at $4.88 per common share, the closing price on October 1, 2021. 2,733,630 $ 4,833,630 Recognized amounts of identifiable assets acquired and liabilities assumed: Cash $ 245,247 Accounts receivable 23,791 Prepaid expenses 32,543 Property and equipment 3,212 Trade name 146,000 Customer list 763,000 Software 1,590,000 Non-compete 132,000 Accounts payable (174,943 ) Accrued liabilities (313,800 ) Accrued compensation (24,193 ) Deferred revenue (478,385 ) Total identifiable net assets $ 1,944,472 Goodwill $ 2,889,158 |
Cygnet Online, LLC | |
Schedule Of recognized identified assets acquired, and liabilities assumed | Cash $ 1,500,000 Convertible note payable, convertible at $6.00 per common share 1,050,000 Earnout payment - Common stock, 555,489 shares valued at $5.34 per common share, the closing price on April 1, 2022. 2,965,756 $ 5,515,756 Recognized amounts of identifiable assets acquired and liabilities assumed: Cash $ 471,237 Accounts receivable 860,882 Inventory 2,337,208 Prepaid expenses 6,900 Property and equipment 7,602 Right to use asset 410,365 Other asset 6,545 Online sales channels 1,800,000 Vendor relationships 6,000,000 Accrued liabilities (701,606 ) Notes payable (7,298,353 ) Operating lease (422,479 ) Total identifiable net assets $ 3,478,301 Goodwill $ 2,037,455 |
LuckyTail [Member] | |
Schedule Of recognized identified assets acquired, and liabilities assumed | Fair value of consideration transferred: Cash $ 2,000,000 Cash payment, 90 days after close 500,000 Cash payment, 180 days after close 500,000 Contingent consideration 130,620 Cash payment, working capital adjustment 490,822 $ 3,621,442 Recognized amounts of identifiable assets acquired and liabilities assumed: Inventory $ 490,822 Trade name 360,000 Customer list 2,304,000 Total identifiable net assets $ 3,154,822 Goodwill $ 466,620 |
E-Core, Inc. and its subsidiaries [Member] | |
Schedule Of recognized identified assets acquired, and liabilities assumed | Fair value of consideration transferred: Cash $ 100,000 Cash payment, 120 days 3,000,000 Note payable 5,750,000 Note payable 2 5,750,000 Convertible note payable, convertible at $4.81 per common share 3,500,000 Common stock, 1,247,402 shares valued at $4.81 per common share, the calculated closing price on October 21, 2023. 6,000,000 $ 24,100,000 Recognized amounts of identifiable assets acquired and liabilities assumed: Cash $ 1,014,610 Accounts receivable 6,699,945 Inventory 7,750,011 Prepaid expenses 75,721 Trade name 1,250,000 Customer relationships 6,000,000 Accrued liabilities (192,051 ) Line of credit (7,201,079 ) Total identifiable net assets $ 15,397,157 Goodwill $ 8,702,843 |
Inventory (Table)
Inventory (Table) | 9 Months Ended |
Mar. 31, 2023 | |
Inventory | |
Schedule Of inventory | March 31, 2023 June 30, 2022 Finished goods $ 10,140,644 $ 4,725,685 |
Property and Equipment (Table)
Property and Equipment (Table) | 9 Months Ended |
Mar. 31, 2023 | |
Property and Equipment | |
Schedule Of Property and Equipment | March 31, 2023 June 30, 2022 Furniture and fixtures $ 172,662 $ 51,273 Computer equipment 156,875 103,615 Internal use software 521,093 - Manufacturing equipment 3,206,060 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 9,284,430 8,211,689 Less accumulated depreciation (1,666,282 ) (867,906 ) $ 7,618,148 $ 7,343,783 |
Intangible Assets (Table)
Intangible Assets (Table) | 9 Months Ended |
Mar. 31, 2023 | |
Intangible Assets | |
Schedule Of Intangible Assets | Estimated Life Cost Accumulated Amortization Net Book Value Customer relationships 4 years $ 10,396,000 $ 1,797,188 $ 8,598,812 Trade name 5 years 2,219,000 339,584 1,879,416 Non-compete agreements Term of agreement 275,000 253,395 21,605 Online sales channels 2 years 1,800,000 900,000 900,000 Vender relationships 5 years 6,000,000 1,200,000 4,800,000 Software 5 years 1,590,000 477,000 1,113,000 $ 22,280,000 $ 4,967,167 $ 17,312,833 |
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 Future amortization of intangible assets | June 30, 2023 $ 1,381,700 June 30, 2024 5,240,905 June 30, 2025 4,560,800 June 30, 2026 4,560,800 June 30, 2027 1,568,628 Thereafter - $ 17,312,833 |
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 Intangible Assets one | Cost Accumulated Amortization Net Book Value Customer relationships, amortized over four years $ 2,092,000 $ 689,292 $ 1,402,708 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 $ 1,724,617 $ 10,641,383 |
Prepaid Expense and Other Cur_2
Prepaid Expense and Other Current Assets (Table) | 9 Months Ended |
Mar. 31, 2023 | |
Prepaid Expense and Other Current Assets | |
Schedule Of Prepaid Expense and Other Current Assets | March 31, 2023 June 30, 2022 Insurance $ 218,046 $ 32,045 Prepayment to vendors 399,627 175,378 Deposits on services 82,024 13,762 Prepaid monthly rent 6,900 6,900 Subscriptions and services being amortized over the service period - 274,959 Prepaid sales tax 75,721 - Other deposits - 337,149 Stock issued for prepaid interest on convertible note payable 569,427 - Other prepaid expenses 86,623 - Cygnet acquisition pre-payment 150,000 Amazon undeposited funds 221,362 - Total $ 1,809,730 $ 840,193 |
Operating Leases (Table)
Operating Leases (Table) | 9 Months Ended |
Mar. 31, 2023 | |
Operating Leases | |
Schedule Of undiscounted future minimum lease payments | 2023 $ 94,255 2024 366,370 2025 153,458 2026 120,512 2027 28,684 Total undiscounted future minimum lease payments 763,279 Less: Imputed interest (41,289 ) Present value of operating lease obligation $ 721,990 |
Schedule Of weighted average lease term and weighted average discount rate | Weighted average remaining lease term 29 Months Weighted average incremental borrowing rate 5.0 % Three Months Ended March 31, 2023 Nine Months Ended March 31, 2023 Operating lease cost: Operating lease cost $ 99,101 $ 285,855 Amortization of ROU assets 67,088 233,409 Interest expense 4,595 25,030 Total lease cost $ 170,784 $ 544,294 |
Accrued Liabilities and Acqui_2
Accrued Liabilities and Acquisition Payable (Table) | 9 Months Ended |
Mar. 31, 2023 | |
Accrued Liabilities and Acquisition Payable | |
Schedule of accrued liabilities | March 31, 2023 June 30, 2022 Accrued expenses for loyalty program $ - $ 6,418 Accrued interest 504,892 147,887 Accrued vendor liabilities 153,468 29,960 Accrued expenses on credit cards 476,802 108,735 Accrued sales tax 155,990 108,425 Derivative liability - 81,909 Accrued expenses from sale of manufacturing operations 1,724,110 - Other accrued liabilities 1,157,193 471,993 $ 4,172,455 $ 955,327 |
Schedule of Acquisition Payable | March 31, 2023 June 30, 2022 Payments related to the acquisition of LuckyTail $ 500,000 $ - $ 500,000 $ - |
Convertible Promissory Notes _2
Convertible Promissory Notes and Notes Payable (Table) | 9 Months Ended |
Mar. 31, 2023 | |
Convertible Promissory Notes and Notes Payable | |
Schedule Convertible Promissory Notes and Notes Payable | Maturity Date March 31, 2023 Convertible Notes, 36-month term notes, 0% cash interest, collateralized with all the assets of the Company October 31, 2025 $ 3,500,000 Subordinated Promissory Notes, 24-month term notes, 4% cash interest, collateralized with all the assets of the Company October 31, 2024 5,750,000 Subordinated Promissory Notes, 12-month term notes, 4% cash interest, collateralized with all the assets of the Company October 31, 2023 5,750,000 Marshall Loan, 2-year term note, 8.5% cash interest, 3.5% PIK interest and subordinate to the Convertible Notes June 28, 2024 1,401,734 Mortgage Loan, 10-year term note, 4.8% interest, collateralized by land and warehouse building September 26, 2032 2,902,256 Promissory Note, 21- month term note, 18.11% interest payable with common stock and subordinate to the Convertible Notes November 22, 2024 2,150,000 Promissory Note, 21-month term note, 10% cash interest and subordinate to the Convertible Notes November 22, 2024 503,714 SBA note payable, 30-year term note, 6% interest rate and collateralized with all assets of the Company October 6, 2031 3,961,444 Inventory consignment note, 60 monthly payments, with first payment due June 30, 2022, 3.5% interest rate and no security interest in the assets of the business June 30, 2027 1,138,094 Line of Credit, $10,000,000 inventory and accounts receivable line of credit, interest rate of prime minus ½% payable monthly, $4,935,545 available at March 31, 2023 374,741 GF Note, 6 annual payments, with first payment due December 31, 2022, 3.5% interest rate and no security interest in the assets of the business November 7, 2026 683,968 Total notes payable 28,115,951 Less current portion of notes payable 9,164,189 Notes payable, net of current portion $ 18,951,762 |
Schedule Future payments on notes payable | For the year ended June 30: 2023 $ 1,383,520 2024 9,056,433 2025 10,537,645 2026 2,326,625 2027 994,333 Thereafter 3,971,947 $ 28,270,503 Convertible notes, original discount and related fees and costs (154,552 ) $ 28,115,951 |
Stock Based Compensation (Table
Stock Based Compensation (Table) | 9 Months Ended |
Mar. 31, 2023 | |
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 (143,613 ) 1.21 - - Granted 897,000 2.52 10 - Options outstanding at March 31, 2023 5,033,275 $ 3.38 6.42 $ 4,724,980 Options exercisable at March 31, 2023 (vested) 3,894,776 $ 3.04 6.72 $ 4,550,343 |
Schedule Of value Of Each Grant | March 31, 2023 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) | 9 Months Ended |
Mar. 31, 2023 | |
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 Advance for payroll $ 50,000 Operating expense 608,517 Management fees 428,500 Excess working capital 388,565 Accrued interest 141,635 Total amounts due from Bloomios $ 1,617,217 |
Schedule Of Investments - Bloomios | Senior secured convertible debenture, net of unamortized original issue discount $ 4,955,450 Series D convertible preferred stock 8,500,000 Convertible Secured Subordinate Promissory Note 5,000,000 Reserve on Investments - Bloomios (8,500,000 ) Total Investments - Bloomios $ 9,955,450 |
Schedule Of Discontinued Operations | Three Months Ended March 31, 2023 2022 Discontinued Operations Revenue $ - $ 5,844,690 Cost of sales - 3,086,645 Sales, general and administrative expenses - 1,764,754 Depreciation and amortization (288,127 ) 200,353 Income (loss) from discontinued operations 288,127 792,918 Accounts receivable net of allowance for doubtful accounts - 941,465 Fixed assets, net of accumulated depreciation - 670,528 Total assets - 8,330,573 Total liabilities $ - $ 167,008 Nine Months Ended March 31, 2023 2022 Discontinued Operations Revenue $ 3,042,878 $ 16,107,558 Cost of sales $ 1,803,643 $ 8,127,404 Sales, general and administrative expenses $ 1,300,102 $ 2,946,810 Depreciation and amortization $ 10,576 $ 573,171 Income (loss) from discontinued operations, net of tax $ (50,291 ) $ 4,115,245 Accounts receivable net of allowance for doubtful accounts - $ 941,465 Fixed assets, net of accumulated depreciation - $ 670,528 Total assets - $ 8,330,573 Total liabilities $ - $ 167,008 |
Description of the Business (De
Description of the Business (Details Narrative) - USD ($) | 1 Months Ended | |
Apr. 01, 2022 | Mar. 13, 2023 | |
Cash payments | $ 1,950,000 | |
Reserve against the debt | $ 8,500,000 | |
Securities Purchase Agreement [Member] | ||
Agreement description | 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. |
Acquisition (Details)
Acquisition (Details) - USD ($) | Mar. 31, 2023 | Jun. 30, 2022 |
Cash | $ 1,181,042 | $ 7,149,806 |
Common stock, 100,000 shares valued at $4.82 per common share, the closing price on August 4, 2021. | 18,094 | 16,713 |
Note payable | 18,951,762 | 8,876,949 |
Recognized amounts of identifiable assets acquired and liabilities assumed: | ||
Inventory | 10,140,644 | 4,725,685 |
Property and equipment | 7,618,148 | 7,343,783 |
Non-compete | 275,000 | |
Right of use asset | 678,145 | 926,570 |
Accounts payable | (2,635,876) | (2,018,541) |
Operating lease | (721,990) | |
Operating lease non-current | (449,874) | (700,411) |
Goodwill | 15,056,856 | $ 5,887,393 |
Vita Medica Agreemnet [Member] | ||
Cash | 2,000,000 | |
Cash, working capital adjustment | 74,589 | |
Common stock, 100,000 shares valued at $4.82 per common share, the closing price on August 4, 2021. | 482,000 | |
Note payable | 500,000 | |
Total Purchase Price | 3,556,589 | |
Recognized amounts of identifiable assets acquired and liabilities assumed: | ||
Accounts receivable | 107,446 | |
Inventory | 619,837 | |
Prepaid expenses | 117,268 | |
Property and equipment | 13,220 | |
Trade name | 463,000 | |
Customer list | 1,329,000 | |
Non-compete | 143,000 | |
Right of use asset | 112,612 | |
Accounts payable | (140,068) | |
Operating lease | (56,894) | |
Operating lease non-current | (112,612) | |
Total identifiable net assets | 2,595,809 | |
Goodwill | $ 960,780 |
Acquisition (Details 1)
Acquisition (Details 1) - USD ($) | Mar. 31, 2023 | Jun. 30, 2022 |
Cash | $ 1,181,042 | $ 7,149,806 |
Common stock, 100,000 shares valued at $4.88 per common share, the closing price on October 1, 2021. | 18,094 | 16,713 |
Recognized amounts of identifiable assets acquired and liabilities assumed: | ||
Property and equipment | 7,618,148 | 7,343,783 |
Non-compete | 275,000 | |
Accounts payable | (2,635,876) | (2,018,541) |
Accrued liabilities | (4,172,455) | (955,327) |
Goodwill | 15,056,856 | $ 5,887,393 |
Interactive Offers, LLC [Member] | ||
Cash | 2,100,000 | |
Common stock, 100,000 shares valued at $4.88 per common share, the closing price on October 1, 2021. | 2,733,630 | |
Total Purchase Price | 4,833,630 | |
Recognized amounts of identifiable assets acquired and liabilities assumed: | ||
Cash balance | 245,247 | |
Accounts receivable | 23,791 | |
Prepaid expenses | 32,543 | |
Property and equipment | 3,212 | |
Trade name | 146,000 | |
Customer list | 763,000 | |
Software | 1,590,000 | |
Non-compete | 132,000 | |
Accounts payable | (174,943) | |
Accrued liabilities | (313,800) | |
Accrued compensation | 24,193 | |
Deferred revenue | (478,385) | |
Total identifiable net assets | 1,944,472 | |
Goodwill | $ 2,889,158 |
Acquisition (Details 2)
Acquisition (Details 2) - USD ($) | Mar. 31, 2023 | Jun. 30, 2022 |
Cash | $ 1,181,042 | $ 7,149,806 |
Common stock, 100,000 shares valued at $4.88 per common share, the closing price on October 1, 2021. | 18,094 | 16,713 |
Recognized amounts of identifiable assets acquired and liabilities assumed: | ||
Inventory | 10,140,644 | 4,725,685 |
Property and equipment | 7,618,148 | 7,343,783 |
Right of use asset | 678,145 | 926,570 |
Other asset | 53,719,390 | 26,902,259 |
Vendor relationships | 2,092,000 | |
Accrued liabilities | (4,172,455) | (955,327) |
Note payable | (18,951,762) | (8,876,949) |
Operating lease | (721,990) | |
Goodwill | 15,056,856 | $ 5,887,393 |
Cygnet Online, LLC | ||
Cash | 1,500,000 | |
Convertible note payable, convertible at $6.00 per common share | 1,050,000 | |
Earnout payment | 0 | |
Common stock, 100,000 shares valued at $4.88 per common share, the closing price on October 1, 2021. | 2,965,756 | |
Total Purchase Price | 5,515,756 | |
Recognized amounts of identifiable assets acquired and liabilities assumed: | ||
Cash balance | 471,237 | |
Accounts receivable | 860,882 | |
Inventory | 2,337,208 | |
Prepaid expenses | 6,900 | |
Property and equipment | 7,602 | |
Right of use asset | 410,365 | |
Other asset | 6,545 | |
Online sales channels | 1,800,000 | |
Vendor relationships | 6,000,000 | |
Accrued liabilities | (701,606) | |
Note payable | (7,298,353) | |
Operating lease | (422,479) | |
Total identifiable net assets | 3,478,301 | |
Goodwill | $ 2,037,455 |
Acquisition (Details 3)
Acquisition (Details 3) - USD ($) | Mar. 31, 2023 | Jun. 30, 2022 |
Cash | $ 1,181,042 | $ 7,149,806 |
Recognized amounts of identifiable assets acquired and liabilities assumed: | ||
Inventory | 10,140,644 | 4,725,685 |
Goodwill | 15,056,856 | $ 5,887,393 |
LuckyTail [Member] | ||
Cash | 2,000,000 | |
Cash payment, 90 days after close | 500,000 | |
Cash payment, 180 days after close | 500,000 | |
Contingent consideration | 130,620 | |
Cash payment, working capital adjustment | 490,822 | |
Total Purchase Price | 3,621,442 | |
Recognized amounts of identifiable assets acquired and liabilities assumed: | ||
Inventory | 490,822 | |
Trade name | 360,000 | |
Customer list | 2,304,000 | |
Total identifiable net assets | 3,154,822 | |
Goodwill | $ 466,620 |
Acquisition (Details 4)
Acquisition (Details 4) - USD ($) | Mar. 31, 2023 | Jun. 30, 2022 |
Cash | $ 1,181,042 | $ 7,149,806 |
Note payable | 18,951,762 | 8,876,949 |
Common stock, 100,000 shares valued at $4.88 per common share, the closing price on October 1, 2021. | 18,094 | 16,713 |
Recognized amounts of identifiable assets acquired and liabilities assumed: | ||
Inventory | 10,140,644 | 4,725,685 |
Customer relationships | 2,092,000 | |
Accrued liabilities | (4,172,455) | (955,327) |
Goodwill | 15,056,856 | $ 5,887,393 |
E-Core, Inc. and its subsidiaries [Member] | ||
Cash | 100,000 | |
Cash payment, 120 days | 3,000,000 | |
Note payable | 5,750,000 | |
Note payable 2 | 5,750,000 | |
Convertible note payable, convertible at $4.81 per common share | 3,500,000 | |
Common stock, 100,000 shares valued at $4.88 per common share, the closing price on October 1, 2021. | 6,000,000 | |
Total Purchase Price | 24,100,000 | |
Recognized amounts of identifiable assets acquired and liabilities assumed: | ||
Cash balance | 1,014,610 | |
Accounts receivable | 6,699,945 | |
Inventory | 7,750,011 | |
Prepaid expenses | 75,721 | |
Trade name | 1,250,000 | |
Customer relationships | 6,000,000 | |
Accrued liabilities | (192,051) | |
Line of credit | (7,201,079) | |
Total identifiable net assets | 15,397,157 | |
Goodwill | $ 8,702,843 |
Acquisition (Details 5)
Acquisition (Details 5) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | |
Net revenue | $ 24,690,597 | $ 1,855,605 | $ 56,789,561 | $ 5,114,888 |
LuckyTail [Member] | ||||
Net revenue | 1,394,459 | 0 | 3,579,727 | 0 |
VitaMedica [Member] | ||||
Net revenue | 1,943,955 | 1,164,971 | 5,525,651 | 3,571,237 |
Interactive [Member] | ||||
Net revenue | 345,110 | 690,634 | 1,054,935 | 1,543,651 |
Cygnet [Member] | ||||
Net revenue | 7,359,661 | 0 | 20,806,317 | |
E-core [Member] | ||||
Net revenue | $ 13,647,412 | $ 0 | $ 25,822,931 | $ 0 |
Acquisition (Details 6)
Acquisition (Details 6) - USD ($) | 3 Months Ended | 9 Months Ended | ||||||
Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Mar. 31, 2023 | Mar. 31, 2022 | |
Cost of sales | $ 14,614,754 | $ 1,098,137 | $ 36,904,527 | $ 3,081,112 | ||||
Operating expenses | 12,003,387 | 4,866,492 | $ 33,469,869 | $ 15,152,270 | ||||
Net income (loss) | $ (1,768,688) | $ 2,584,098 | $ (2,745,520) | $ (52,667) | $ 64,833 | $ 511,711 | ||
Basic income (loss) per common share | $ (0.11) | $ 0 | $ (0.11) | $ 0.03 | ||||
Proforma Adjustments [Member] | ||||||||
Operating expenses | $ 1,124,499 | $ 561,721 | $ 3,128,348 | |||||
Net income (loss) | (1,124,499) | $ (561,721) | $ (3,128,348) | |||||
Weighted average shares outstanding | (693,001) | (462,336) | ||||||
Proforma [Member] | ||||||||
Net sales | 24,535,133 | $ 76,661,234 | $ 74,570,215 | |||||
Cost of sales | 17,692,604 | 48,218,647 | 52,922,099 | |||||
Operating expenses | 8,092,018 | 35,465,667 | 26,895,588 | |||||
Net income (loss) | $ 10,268 | $ (1,408,973) | $ (3,992,942) | |||||
Basic income (loss) per common share | $ 0 | $ (0.08) | $ (0.22) | |||||
Weighted average shares outstanding | 18,229,290 | 17,973,278 | 18,081,424 | |||||
Interactive Offers, LLC [Member] | ||||||||
Net sales | $ 1,329,522 | |||||||
Cost of sales | 0 | |||||||
Operating expenses | 1,816,464 | |||||||
Net income (loss) | $ (376,987) | |||||||
Basic income (loss) per common share | $ (0.67) | |||||||
Weighted average shares outstanding | 560,170 | |||||||
LuckyTail [Member] | ||||||||
Net sales | $ 1,389,012 | $ 892,270 | $ 3,316,325 | |||||
Cost of sales | 274,175 | 137,088 | 836,530 | |||||
Operating expenses | 54,000 | |||||||
Operating expenses | 766,952 | 383,476 | 1,738,091 | |||||
Net income (loss) | $ 347,885 | $ 371,706 | $ 741,703 | |||||
Basic income (loss) per common share | $ 0 | $ 0 | $ 0 | |||||
VitaMedica [Member] | ||||||||
Net sales | $ 384,391 | |||||||
Cost of sales | 93,509 | |||||||
Operating expenses | 255,286 | |||||||
Net income (loss) | $ 35,596 | |||||||
Basic income (loss) per common share | $ 0.36 | |||||||
Weighted average shares outstanding | 100,000 | |||||||
Cygnet [Member] | ||||||||
Net sales | $ 7,527,927 | $ 22,583,781 | ||||||
Cost of sales | 6,372,432 | 19,117,296 | ||||||
Operating expenses | 695,574 | 2,086,722 | ||||||
Net income (loss) | $ 382,657 | $ 1,147,971 | ||||||
Basic income (loss) per common share | $ 0.69 | $ 2.07 | ||||||
Weighted average shares outstanding | 555,489 | 555,489 | ||||||
E-core [Member] | ||||||||
Net sales | $ 11,191,296 | $ 12,905,836 | $ 33,675,631 | |||||
Cost of sales | 9,947,860 | 11,177,032 | 29,793,652 | |||||
Operating expenses | 638,501 | 1,050,602 | 2,718,407 | |||||
Net income (loss) | $ 604,475 | $ 660,860 | $ 1,178,491 | |||||
Basic income (loss) per common share | $ 0 | $ 0.53 | $ 0.94 | |||||
Weighted average shares outstanding | 1,247,402 | 1,247,402 | 1,247,402 | |||||
Upexi, Inc. [Member] | ||||||||
Net sales | $ 4,426,898 | $ 62,863,128 | $ 13,280,565 | |||||
Cost of sales | 1,098,137 | 36,904,527 | 3,081,112 | |||||
Operating expenses | 4,866,492 | 33,469,868 | 15,152,270 | |||||
Net income (loss) | $ (200,250) | $ (1,879,818) | $ (3,591,368) | |||||
Basic income (loss) per common share | $ (0.01) | $ (0.11) | $ (0.22) | |||||
Weighted average shares outstanding | 16,426,399 | 17,418,877 | 16,080,699 |
Acquisition (Details Narrative)
Acquisition (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||||
Mar. 31, 2023 | Mar. 31, 2022 | Sep. 30, 2021 | Mar. 31, 2023 | Mar. 31, 2022 | Feb. 22, 2023 | Oct. 31, 2022 | |
Operating expenses | $ 12,003,387 | $ 4,866,492 | $ 33,469,869 | $ 15,152,270 | |||
Operating expenses | 50,329 | ||||||
Common stock issued during period for acquisition value | 0 | $ 33,740 | |||||
Acquisition related expenses | 1,050,000 | $ 0 | |||||
Conversion price | $ 5 | ||||||
Common stock issued during period for acquisition | 4,000,000 | ||||||
Proforma Adjustments [Member] | |||||||
Operating expenses | 1,124,499 | $ 561,721 | $ 3,128,348 | ||||
Interactive Offers, LLC [Member] | |||||||
Operating expenses | 1,816,464 | ||||||
Membership interests | 20% | 20% | |||||
Amortization expense annually | $ 603,948 | ||||||
Amortization expense monthly | 50,329 | ||||||
LuckyTail [Member] | |||||||
Contingent consideration | $ 130,320 | 130,320 | |||||
Operating expenses | 54,000 | ||||||
Amortization expense annually | 648,000 | ||||||
Amortization expense | 162,000 | 27,000 | 486,000 | ||||
Amortization expense monthly | 54,000 | ||||||
Revenue for the business acquired | 1,492,329 | ||||||
Tangible Assets | 490,822 | 490,822 | |||||
VitaMedica [Member] | |||||||
Operating expenses | 255,286 | ||||||
Common stock issued during period for acquisition value | 100,000 | ||||||
Amortization expense annually | 496,356 | ||||||
Amortization expense monthly | $ 41,363 | ||||||
Common stock issued during period for acquisition | 482,000 | ||||||
VitaMedica [Member] | Proforma Adjustments [Member] | |||||||
Amortization expense | 41,363 | ||||||
E-Core, Inc [Member] | |||||||
Operating expenses | $ 145,833 | ||||||
Acquisition related expenses | $ 15,517 | 22,507 | 358,300 | 240,234 | |||
Conversion price | $ 5.30 | ||||||
Options to purchase | 360,000 | ||||||
Amortization expense annually | 1,750,000 | ||||||
Amortization expense | $ 437,499 | 534,721 | 1,312,497 | ||||
Amortization expense monthly | 145,833 | ||||||
Cygnet Online, LLC | |||||||
Operating expenses | $ 175,000 | ||||||
Remaining interest acquired | 45% | 45% | |||||
Cash payment | $ 1,950,000 | ||||||
Securities purchase agreement description | 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. The Company did not exercise its right to purchase Seller’s remaining membership interests in Cygnet | ||||||
Acquisition period | 12 months | ||||||
Purchase price sale of shares | 5,515,756 | 5,515,756 | |||||
Amortization expense | $ 525,000 | 1,575,000 | |||||
Amortization expense monthly | 41,363 | ||||||
Cygnet Online, LLC | Proforma Adjustments [Member] | |||||||
Amortization expense annually | 2,100,000 | ||||||
Amortization expense | $ 150,987 | ||||||
Amortization expense monthly | 175,000 | ||||||
FinderFee [Member] | |||||||
Common stock issued during period for acquisition value | 33,740 | ||||||
Cash payment | $ 70,000 | ||||||
Common stock per share | $ 4.82 | $ 4.82 | |||||
Common stock issued during period for acquisition | 7,000 | ||||||
Finder's fee | $ 103,740 |
Inventory (Details)
Inventory (Details) - USD ($) | Mar. 31, 2023 | Jun. 30, 2022 |
Inventory | ||
Finished goods | $ 10,140,644 | $ 4,725,685 |
Inventory (Details Narrative)
Inventory (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | |
Inventory | ||||
Inventory write off | $ 0 | $ 0 | $ 34,328 | $ 140,000 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | Mar. 31, 2023 | Jun. 30, 2022 |
Property and equipment, gross | $ 9,284,430 | $ 8,211,689 |
Less accumulated depreciation | (1,666,282) | (867,906) |
Property and equipment | 7,618,148 | 7,343,783 |
Furniture and Fixtures [Member] | ||
Property and equipment | 172,662 | 51,273 |
Computer equipment [Member] | ||
Property and equipment | 156,875 | 103,615 |
Manufacturing equipment [Member] | ||
Property and equipment | 3,206,060 | 1,002,796 |
Leasehold improvements [Member] | ||
Property and equipment | 90,245 | 2,144,341 |
Building [Member] | ||
Property and equipment | 4,876,133 | 4,656,435 |
Vehicles [Member] | ||
Property and equipment | 261,362 | 253,229 |
Internal use software [Member] | ||
Property and equipment | $ 521,093 | $ 0 |
Property and Equipment (Detai_2
Property and Equipment (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | |
Depreciation expense | $ 232,492 | $ 143,537 | $ 669,540 | $ 390,116 |
Loss on sale of equipment | $ 0 | $ 5,500 | 0 | $ 5,500 |
Vehicles [Member] | ||||
Cash proceeds from sale of equipment | 6,000 | |||
Carrying value of equipment | 500 | |||
Loss on sale of equipment | $ 5,500 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) | 9 Months Ended | |
Mar. 31, 2023 | Jun. 30, 2022 | |
Customer Relationships [Member] | ||
Cost | $ 10,396,000 | $ 2,092,000 |
Estimated Life | 4 years | |
Accumulated Amortization | $ 1,797,188 | 689,292 |
Net Book Value | 8,598,812 | 1,402,708 |
Trade Name [Member] | ||
Cost | $ 2,219,000 | 609,000 |
Estimated Life | 5 years | |
Accumulated Amortization | $ 339,584 | 156,783 |
Net Book Value | 1,879,416 | 452,217 |
Total [Member] | ||
Cost | 22,280,000 | 12,366,000 |
Accumulated Amortization | 4,967,167 | 1,724,617 |
Net Book Value | 17,312,833 | 10,641,383 |
Vender relationships, amortized over five years [Member] | ||
Cost | $ 6,000,000 | 6,000,000 |
Estimated Life | 5 years | |
Accumulated Amortization | $ 1,200,000 | 300,000 |
Net Book Value | 4,800,000 | 5,700,000 |
Software, amortized over five years [Member] | ||
Cost | $ 1,590,000 | 1,590,000 |
Estimated Life | 5 years | |
Accumulated Amortization | $ 477,000 | 238,500 |
Net Book Value | 1,113,000 | 1,351,500 |
Non-compete agreements [Member] | ||
Cost | 275,000 | 275,000 |
Accumulated Amortization | 253,395 | 115,042 |
Net Book Value | 21,605 | 159,958 |
Online sales channels, amortized over two years [Member] | ||
Cost | $ 1,800,000 | 1,800,000 |
Estimated Life | 2 years | |
Accumulated Amortization | $ 900,000 | 225,000 |
Net Book Value | $ 900,000 | $ 1,575,000 |
Intangible Assets (Details 1)
Intangible Assets (Details 1) | 9 Months Ended |
Mar. 31, 2023 USD ($) | |
Customer Relationships [Member] | |
Intangible Assets from Purchase | $ 2,304,000 |
Trade Name [Member] | |
Intangible Assets from Purchase | 360,000 |
Intangible Assets from Purchase | |
Intangible Assets from Purchase | 2,664,000 |
E core [Member] | Trade Name [Member] | |
Intangible Assets from Purchase | 1,250,000 |
E core [Member] | Intangible Asset from Purchage [Member] | |
Intangible Assets from Purchase | 7,250,000 |
CustomerRelationship [Member] | E core [Member] | |
Intangible Assets from Purchase | $ 6,000,000 |
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) | Mar. 31, 2023 USD ($) |
Intangible Assets | |
June 30, 2023 | $ 1,381,700 |
June 30, 2024 | 5,240,905 |
June 30, 2025 | 4,560,800 |
June 30, 2026 | 4,560,800 |
June 30, 2027 | 1,568,628 |
Thereafter | 0 |
Finite-Lived Intangible Assets, Net | $ 17,312,833 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | |
Intangible Assets | ||||
Amortization of intangible assets | $ 1,691,243 | $ 417,549 | $ 3,534,216 | $ 1,085,481 |
Prepaid Expense and Other Cur_3
Prepaid Expense and Other Current Assets (Details) - USD ($) | Mar. 31, 2023 | Jun. 30, 2022 |
Prepaid expenses and other assets | $ 1,809,730 | $ 840,193 |
Insurance [Member] | ||
Prepaid expenses and other assets | 218,046 | 32,045 |
Prepayment to vendors [Member] | ||
Prepaid expenses and other assets | 399,627 | 175,378 |
Deposit on services [Member] | ||
Prepaid expenses and other assets | 82,024 | 13,762 |
Prepaid monthly rent [Member] | ||
Prepaid expenses and other assets | 6,900 | 6,900 |
Subscriptions and services being amortized over the service period [Member] | ||
Prepaid expenses and other assets | 0 | 274,959 |
Other deposits [Member] | ||
Prepaid expenses and other assets | 0 | 337,149 |
Prepaid sales tax [Member] | ||
Prepaid expenses and other assets | 75,721 | 0 |
Stock issued for prepaid interest on convertible note payable | ||
Prepaid expenses and other assets | 569,427 | 0 |
Other prepaid expenses [Member] | ||
Prepaid expenses and other assets | 86,623 | 0 |
Cygnet acquisition pre-payment | ||
Prepaid expenses and other assets | 150,000 | 0 |
Amazon undeposited funds [Member] | ||
Prepaid expenses and other assets | $ 221,362 | $ 0 |
Operating Leases (Details)
Operating Leases (Details) | Mar. 31, 2023 USD ($) |
Operating Leases | |
2023 | $ 94,255 |
2024 | 366,370 |
2025 | 153,458 |
2026 | 120,512 |
2027 | 28,684 |
Total undiscounted future minimum lease payments | 763,279 |
Less: Imputed interest | (41,289) |
Present value of operating lease obligation | $ 721,990 |
Operating Leases (Details 1)
Operating Leases (Details 1) | 9 Months Ended |
Mar. 31, 2023 | |
Operating Leases | |
Weighted average remaining lease term | 29 months |
Weighted average incremental borrowing rate | 5% |
Operating Leases (Details 2)
Operating Leases (Details 2) - USD ($) | 3 Months Ended | 9 Months Ended |
Mar. 31, 2023 | Mar. 31, 2023 | |
Operating Leases | ||
Operating lease cost | $ 99,101 | $ 285,855 |
Amortization of ROU assets | 67,088 | 233,409 |
Interest expense | 4,595 | 25,030 |
Total lease cost | $ 170,784 | $ 544,294 |
Operating Leases (Details Narra
Operating Leases (Details Narrative) | 9 Months Ended |
Mar. 31, 2023 | |
Operating Leases | |
Lease term | 1 year to 5 years |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) | Mar. 31, 2023 | Jun. 30, 2022 |
Accrued Liabilities (Details) | ||
Accrued expenses for loyalty program | $ 0 | $ 6,418 |
Accrued interest | 504,892 | 147,887 |
Accrued vendor liabilities | 153,468 | 29,960 |
Accrued expenses on credit cards | 476,802 | 108,735 |
Accrued sales tax | 155,990 | 108,425 |
Derivative liabilities | 0 | 81,909 |
Other accrued liabilities | 1,724,110 | 471,993 |
Accrued expenses from sale of manufacturing operations | 1,157,193 | 0 |
Total of accrued liabilities | $ 4,172,455 | $ 955,327 |
Accrued Liabilities (Details 1)
Accrued Liabilities (Details 1) - USD ($) | Mar. 31, 2023 | Jun. 30, 2022 |
Accrued Liabilities (Details) | ||
Payments related to the acquisition of LuckyTail | $ 500,000 | $ 0 |
Total | $ 500,000 | $ 0 |
Convertible Promissory Notes _3
Convertible Promissory Notes and Notes Payable (Details) - USD ($) | 9 Months Ended | |
Mar. 31, 2023 | Jun. 30, 2022 | |
Total notes payable | $ 28,115,951 | |
Less current portion of notes payable | 9,164,189 | |
Notes payable, less current portion | 18,951,762 | |
Note payable | 18,951,762 | $ 8,876,949 |
Inventory Consignment Note, 60 Monthly Payments [Member] | ||
Note payable | $ 1,138,094 | |
Maturity Date | Jun. 30, 2027 | |
GF Note, 6 annual payments [Member] | ||
Note payable | $ 683,968 | |
Maturity Date | Nov. 07, 2026 | |
Marshall Loan 2-Year Term Note [Member] | ||
Note payable | $ 1,401,734 | |
Maturity Date | Jun. 28, 2024 | |
Subordinated Promissory Notes, 12-Month Term Notes [Member] | ||
Note payable | $ 5,750,000 | |
Maturity Date | Oct. 31, 2023 | |
B. Otten Promissory Notes, 21-Month Term Note [Member] | ||
Note payable | $ 503,714 | |
Maturity Date | Nov. 22, 2024 | |
Convertible Notes, 36-Month Term Notes [Member] | ||
Note payable | $ 3,500,000 | |
Maturity Date | Oct. 31, 2025 | |
Subordinated Promissory Notes, 24-Month Term Notes [Member] | ||
Note payable | $ 5,750,000 | |
Maturity Date | Oct. 31, 2024 | |
Adam Marshall Promissory Note, 21- Month Term Note [Member] | ||
Note payable | $ 2,150,000 | |
Maturity Date | Nov. 22, 2024 | |
Mortgage Loan, 10-Year Term Note [Member] | ||
Note payable | $ 2,902,256 | |
Maturity Date | Sep. 26, 2032 | |
SBA Note Payable, 30-Year Term Note [Member] | ||
Note payable | $ 3,961,444 | |
Maturity Date | Oct. 06, 2031 |
Convertible Promissory Notes _4
Convertible Promissory Notes and Notes Payable (Details 1) - Notes Payable [Member] | Mar. 31, 2023 USD ($) |
June 30, 2023 | $ 1,383,520 |
June 30, 2024 | 9,056,433 |
June 30, 2025 | 10,537,645 |
June 30, 2026 | 2,326,625 |
June 30,2027 | 994,333 |
Thereafter | 3,971,947 |
Future payments, notes payable | 28,270,503 |
Convertible note, original discount and related fees and costs | (154,552) |
Future payments on notes payable | $ 28,115,951 |
Convertible Promissory Notes _5
Convertible Promissory Notes and Notes Payable (Details Narrative) - USD ($) | 1 Months Ended | 9 Months Ended | ||||||||
Jun. 03, 2020 | Oct. 19, 2022 | Jun. 30, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | Feb. 22, 2023 | 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 | ||||||||
Original principal amount | $ 560,000 | |||||||||
Bears interest rate percentage | 18.11% | |||||||||
Common stock price per share | $ 4.53 | |||||||||
Issuance of restricted stock shares | 134,000 | |||||||||
Original principal amount | $ 2,150,000 | |||||||||
Conversion price per share | $ 5 | |||||||||
Promissory note original principal amount interest rate | 10% | |||||||||
Interest rate | 8.50% | |||||||||
Allan Marshall [Member] | ||||||||||
Original principal amount | $ 1,500,000 | |||||||||
Interest rate | 8.50% | |||||||||
Interest rate pik | 3.50% | |||||||||
Convertible Notes, 36-Month Term 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 | $ 1,770 | |||||||||
Interest rate | 4% | |||||||||
Mortgage Loan, 10-Year Term Note [Member] | ||||||||||
Original principal amount | $ 1,050,000 | |||||||||
SBA Note Payable, 30-Year Term Note [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) - USD ($) | 1 Months Ended | 9 Months Ended | |
Jun. 30, 2022 | Mar. 31, 2023 | Feb. 22, 2023 | |
Related Party Transactions | |||
Loan amount | $ 1,500,000 | ||
Interest rate | 8.50% | ||
Additional PIK | 3.50% | ||
Bears interest rate percentage | 18.11% | ||
Original principal amount | $ 2,150,000 | ||
Maturity of restricted common stock | 21-month term |
Equity Transactions (Details Na
Equity Transactions (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2022 | Sep. 30, 2021 | Mar. 31, 2023 | Mar. 31, 2022 | |
Common stock issued during period for acquisition value | $ 35,000 | |||
Shares of common stock for consulting service, value | $ 175,000 | |||
Common stock for prepayment of interest on note payable | 134,000 | |||
Common stock issued during period for acquisition value | $ 0 | $ 33,740 | ||
Common stock issued during period for acquisition | 4,000,000 | |||
VitaMedica [Member] | ||||
Common stock issued during period for acquisition value | $ 100,000 | |||
Common stock issued during period for acquisition | 482,000 | |||
FinderFee [Member] | ||||
Common stock issued during period for acquisition value | $ 33,740 | |||
Common stock issued during period for acquisition | 7,000 | |||
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 | |||
Common stock issued during period for acquisition | 1,247,403 | |||
Shares of common stock for consulting service, shares | 666,667 | |||
Common Stocks [Member] | Infusionz [Member] | ||||
Common stock issued during period for acquisition value | $ 1,764,876 | |||
Common stock issued during period for acquisition | 306,945 | |||
Convertible Preferred Stock [Member] | ||||
Sale of preferred stock shares | 500,000 | |||
Preferred stock convertible into shares of common stock ratio | 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 |
Stock Based Compensation (Detai
Stock Based Compensation (Details) - Stock Option [Member] | 9 Months Ended |
Mar. 31, 2023 USD ($) $ / shares shares | |
Beginning balance | shares | 4,279,888 |
Canceled | shares | (143,613) |
Granted | shares | 897,000 |
Ending balance | shares | 5,033,275 |
Option exercisable | shares | 3,894,776 |
Weighted average exercise price, Beginning balance | $ / shares | $ 3.05 |
Weighted average exercise price, canceled | $ / shares | 1.21 |
Weighted average exercise price, granted | $ / shares | 2.52 |
Weighted average exercise price, Ending balance | $ / shares | 3.38 |
Weighted average exercise price, exercisable | $ / shares | $ 3.04 |
Weighted average remaining contractual life, beginning balance | 7 months 12 days |
Weighted average remaining contractual life, granted | 10 months |
Weighted average remaining contractual life, ending balance | 6 months 12 days |
Weighted average remaining contractual life, exercisable | 6 months 21 days |
Aggregate intrinsic value beginning | $ | $ 4,919,182 |
Aggregate intrinsic value granted | $ | 0 |
Aggregate intrinsic value ending | $ | 4,724,980 |
Aggregate intrinsic value Exercisable | $ | $ 4,550,343 |
Stock Based Compensation (Det_2
Stock Based Compensation (Details 1) | 9 Months Ended |
Mar. 31, 2023 $ / shares | |
Expected term | 5 months |
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_3
Stock Based Compensation (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||||
Mar. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2021 | Mar. 31, 2023 | Mar. 31, 2022 | |
Stock based compensation expense | $ 1,052,847 | $ 852,455 | $ 1,479,293 | $ 1,019,883 | $ 670,098 | ||
Estimated forfeitures rate | 0% | 0% | |||||
Stock based compensation expense | $ 1,146,299 | $ 854,013 | $ 3,126,472 | $ 2,333,306 | |||
Stock Option [Member] | |||||||
Grant date | 10 years | ||||||
Stock based compensation expense | $ 3,000,057 | $ 1,940,651 | |||||
Weighted average vesting period | 1 year 9 months | ||||||
Unrecognized compensation expense related to unvested stock options outstanding | $ 3,154,841 | $ 3,154,841 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | |
Income Taxes | ||||
Income tax benefit and expense | $ 496,880 | $ 1,351,686 | $ 449,828 | $ 1,116,653 |
Effective tax rate of federal and state income taxes | 20.67% | |||
Losses attributable to federal taxable income | $ 3,600,000 | $ 3,600,000 |
Discontinued Operation (Details
Discontinued Operation (Details) - USD ($) | 9 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Intangible assets, net of accumulated amortization | $ (4,203,756) | $ (902,426) |
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) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | |
Operating expenses | $ 12,003,387 | $ 4,866,492 | $ 33,469,869 | $ 15,152,270 |
Discontinued Operations [Member] | ||||
Advance for payroll | 50,000 | 50,000 | ||
Operating expenses | 608,517 | |||
Management fees | 428,500 | |||
Excess working capital | 388,565 | 388,565 | ||
Accrued interest | 141,635 | 141,635 | ||
Total amounts due from Bloomios | $ 1,617,217 | $ 1,617,217 |
Discontinued Operation (Detai_3
Discontinued Operation (Details 2) - Investments - Bloomios [Member] | 9 Months Ended |
Mar. 31, 2023 USD ($) | |
Senior secured convertible debenture, net of unamortized original issue discount | $ 4,955,450 |
Series D convertible preferred stock | 8,500,000 |
Convertible Secured Subordinate Promissory Note | 5,000,000 |
Reserve on Investments - Bloomios | (8,500,000) |
Total Investments - Bloomios | $ 9,955,450 |
Discontinued Operation (Detai_4
Discontinued Operation (Details 3) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | |
Revenues | $ 24,219,445 | $ 4,426,898 | $ 62,863,128 | $ 13,280,565 |
Income (loss) from discontinued operations, net of tax | 288,127 | 147,583 | (50,291) | 4,115,245 |
Total assets | 73,814,875 | 73,814,875 | ||
Discontinued Operations [Member] | ||||
Revenues | 0 | 5,844,690 | 3,042,878 | 16,107,558 |
Cost of sales | 0 | 3,086,645 | 1,803,643 | 8,127,404 |
Sales general and administrative expenses | 0 | 1,764,754 | 1,300,102 | 2,946,810 |
Deprecation and amortization | (288,127) | 200,353 | 10,576 | 573,171 |
Income (loss) from discontinued operations, net of tax | 288,127 | (792,918) | (50,291) | 4,115,245 |
Accounts receivable net of allowance for doubtful accounts | 0 | 941,465 | 0 | 941,465 |
Fixed assets, net of accumulated depreciation | 0 | 670,528 | 0 | 670,528 |
Total assets | 0 | 8,330,573 | 0 | 8,330,573 |
Total liabilities | $ 0 | $ 167,008 | $ 0 | $ 167,008 |
Discontinued Operation (Detai_5
Discontinued Operation (Details Narrative) - USD ($) | 1 Months Ended | 9 Months Ended | |
Jun. 30, 2022 | Mar. 31, 2023 | Oct. 28, 2022 | |
Interest rate | 8.50% | ||
Common stock, 100,000 shares valued at $4.88 per common share, the closing price on October 1, 2021. | $ 16,713 | $ 18,094 | |
Discontinued Operations [Member] | |||
Maturity date | October 26, 2024 | ||
Accounts receivable | $ 1,617,217 | ||
Original principal amount | $ 5,000,000 | ||
Series D Convertible Preferred Stock | 8,500,000 | ||
Series D Convertible Preferred Stocks | 85,000 | ||
Convertible secured subordinate promissory note percentage | 8.50% | ||
Convertible secured subordinate promissory note conversion price per share | $ 5 | ||
Convertible secured subordinate promissory note annual percentage | 40% | ||
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 | ||
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 | ||
Common stock, 100,000 shares valued at $4.88 per common share, the closing price on October 1, 2021. | 8,500,000 | ||
Valuation allowance | 8,500,000 | ||
Unpaid interest | 35,385 | ||
Accrued interest | $ 449,484 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - Subsequent Event [Member] | May 12, 2023 USD ($) $ / shares shares |
Common stock shares issued during period, shares | shares | 2,121,213 |
Common stock shares issued during period, value | $ | $ 7,000,000 |
Net proceeds from issuance of common stock | $ | $ 6,060,000 |
Warrants to purchase shares of common stock | shares | 169,000 |
Warrants to purchase shares of common stock, price per share | $ / shares | $ 4.774 |