Cover
Cover - shares | 3 Months Ended | |
Sep. 30, 2023 | Nov. 17, 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 | Sep. 30, 2023 | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2024 | |
Entity Ex Transition Period | true | |
Entity Common Stock Shares Outstanding | 20,306,870 | |
Entity File Number | 333-25526 | |
Entity Incorporation State Country Code | NV | |
Entity Tax Identification Number | 83-3378978 | |
Entity Address Address Line 1 | 3030 North Rocky Point Drive | |
Entity Address Address Line 2 | Suite 420 | |
Entity Address City Or Town | Tampa | |
Entity Address State Or Province | FL | |
Entity Address Postal Zip Code | 33607 | |
City Area Code | 701 | |
Local Phone Number | 353-5425 | |
Security 12b Title | Common Stock, par value $0.001 | |
Trading Symbol | UPXI | |
Security Exchange Name | NASDAQ | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Interactive Data Current | Yes |
CONDENSED CONSOLDIATED BALANCE
CONDENSED CONSOLDIATED BALANCE SHEETS (UNAUDITED) - USD ($) | Sep. 30, 2023 | Jun. 30, 2023 |
Current assets | ||
Cash | $ 417,108 | $ 4,492,291 |
Accounts receivable | 9,756,622 | 7,163,564 |
Inventory | 13,786,262 | 11,557,128 |
Due from Bloomios | 0 | 845,443 |
Prepaid expenses and other receivables | 957,584 | 1,307,299 |
Current assets of discontinued operations | 0 | 89,989 |
Total current assets | 24,917,576 | 25,455,714 |
Property and equipment, net | 7,744,874 | 7,526,463 |
Intangible assets, net | 12,385,139 | 13,571,960 |
Goodwill | 11,719,155 | 10,251,281 |
Deferred tax asset | 6,076,423 | 5,604,056 |
Other assets | 365,060 | 96,728 |
Assets held for sale | 0 | 936,054 |
Right-of-use asset | 2,037,515 | 410,811 |
Total other assets | 40,328,166 | 38,397,353 |
Total assets | 65,245,742 | 63,853,067 |
Current liabilities | ||
Accounts payable | 4,638,195 | 3,969,746 |
Accrued compensation | 513,934 | 533,842 |
Deferred revenue | 153,769 | 0 |
Accrued liabilities | 3,883,842 | 3,365,562 |
Acquisition payable | 300,000 | 0 |
Current portion of notes payable | 4,255,357 | 1,302,021 |
Current portion of convertible notes payable | 0 | 1,254,167 |
Current portion of acquisition note payable | 5,656,620 | 5,656,620 |
Current portion of related party note payable | 0 | 1,429,356 |
Line of Credit | 118,001 | 882,845 |
Current portion of operating lease payable | 517,099 | 419,443 |
Current liabilities of discontinued operations | 0 | 792,408 |
Total current liabilities | 20,036,817 | 19,606,010 |
Operating lease payable, net of current portion | 1,600,489 | 163,359 |
Related party note payable | 1,444,493 | 0 |
Convertible notes payable | 2,150,000 | 895,833 |
Acquisition notes payable, net of current | 7,968,497 | 7,605,085 |
Notes payable, net of current portion | 4,475,450 | 7,746,157 |
Total long-term liabilities | 17,638,929 | 16,410,434 |
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 20,306,870 and 16,713,345 shares issued and outstanding, respectively | 20,307 | 20,216 |
Additional paid in capital | 52,106,752 | 51,522,229 |
Accumulated deficit | (24,557,563) | (23,201,175) |
Total stockholders' equity attributable to Upexi, Inc. | 27,569,996 | 28,341,770 |
Non-controlling interest in subsidiary | (505,147) | |
Total stockholders' equity | 27,569,996 | 27,836,623 |
Total liabilities and stockholders' equity | $ 65,245,742 | $ 63,853,067 |
CONDENSED CONSOLDIATED BALANC_2
CONDENSED CONSOLDIATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2023 | Jun. 30, 2022 |
CONDENSED CONSOLDIATED BALANCE SHEETS (UNAUDITED) | ||
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 | 20,306,870 | 16,713,345 |
Common Stock, shares outstanding | 20,306,870 | 16,713,345 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
CONSOLIDATED STATEMENTS OF OPERATIONS | ||
Revenue | $ 27,347,642 | $ 11,218,799 |
Cost of Revenue | 18,639,793 | 5,401,316 |
Gross profit | 8,707,849 | 5,817,483 |
Operating expenses | ||
Sales and marketing | 2,848,667 | 1,727,469 |
Distribution costs | 2,850,616 | 2,487,834 |
General and administrative expenses | 2,255,928 | 2,127,846 |
Share-based compensation | 421,887 | 927,326 |
Amortization of acquired intangible assets | 1,186,821 | 729,909 |
Depreciation | 286,084 | 194,497 |
Operating expenses | 9,850,003 | 8,194,881 |
Loss from operations | (1,142,154) | (2,377,398) |
Change in derivative liability | 0 | (1,770) |
Interest expense, net | 874,185 | 433,478 |
Other expense (income), net | 874,185 | 431,708 |
Loss from operations before income tax | (2,016,339) | (2,809,106) |
Gain (Loss) from the sale of Interactive Offers | 380,624 | |
(Loss) income from discontinued operations | (193,040) | (644,615) |
Income tax benefit | 472,367 | 708,201 |
Net (loss) income | (1,356,388) | (2,745,520) |
Net loss attributable to noncontrolling interest | 0 | 148,005 |
Net (loss) income attributable to Upexi, Inc. | $ (1,356,388) | $ (2,597,515) |
Basic and Diluted loss per share: | ||
(Loss) income per share from continuing operations | $ (0.07) | $ (0.16) |
(Loss) income per share from discontinued operations | (0.01) | (0.04) |
Total (loss) income per share | $ (0.07) | $ (0.16) |
Basic weighted average shares outstanding | 20,244,618 | 16,713,345 |
Fully diluted weighted average shares outstanding | 20,244,618 | 16,713,345 |
CONDENSED CONSOLIDATED STATEMEN
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, 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 |
Amortization of common stock issuance for services | 70,350 | 0 | 70,350 | 0 | 0 | |
Net income for the three months ended September 30, 2022 | (2,745,520) | $ 0 | $ 0 | 0 | (2,597,515) | (148,005) |
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, 2023 | 500,000 | 20,215,961 | ||||
Balance, amount at Jun. 30, 2023 | 27,836,623 | $ 500 | $ 20,216 | 51,522,229 | (23,201,175) | (505,147) |
Stock based compensation | 421,887 | 0 | 0 | 421,887 | 0 | 0 |
Net income for the three months ended September 30, 2022 | (1,356,388) | $ 0 | $ 0 | 0 | (1,356,388) | 0 |
Issuance of stock and equity for purchase of Cygnet, shares | 90,909 | |||||
Issuance of stock and equity for purchase of Cygnet, amount | 667,874 | $ 91 | 162,636 | 505,147 | ||
Balance, shares at Sep. 30, 2023 | 500,000 | 20,306,870 | ||||
Balance, amount at Sep. 30, 2023 | $ 27,569,996 | $ 500 | $ 20,307 | $ 52,106,752 | $ (24,557,563) | $ 0 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash flows from operating activities | ||
Net loss from operations | $ (1,356,388) | $ (2,745,520) |
Depreciation and amortization | 1,472,905 | 924,406 |
Amortization of loan costs | 15,137 | 49,158 |
Amortization of consideration discount | (108,955) | 0 |
Change in deferred tax asset | 0 | (729,483) |
Change in derivative liability | 0 | 1,770 |
Stock based compensation | 421,887 | 927,326 |
Changes in assets and liabilities, net of acquiried amounts | ||
Accounts receivable | (2,435,858) | (180,525) |
Inventory | (1,138,306) | (912,492) |
Prepaid expenses and other assets | 257,797 | (681,964) |
Accounts payable and accrued liabilities | 690,004 | 969,770 |
Deferred revenue | 19,819 | 0 |
Net cash used by operating activities - Continuing Operations | (2,120,290) | (2,516,787) |
Net cash (used) provided by operating activities - Discontinued Operations | (223,957) | (4,240) |
Net cash (used) provided by operating activities | (2,344,247) | (2,521,027) |
Cash flows from investing activities | ||
Proceeds from the sale of Interactive Offers, net of liabilities paid | 147,592 | 0 |
Acquisition of Lucky Tail | 0 | (2,000,000) |
Acquisition of VitaMedica, Inc., net of cash acquired | 0 | (500,000) |
Acquisition of Cygnet, Inc., net of cash acquired | (500,000) | 0 |
Acquisition of property and equipment | (296,313) | (147,930) |
Net cash used in investing activities - Continuing Operations | (648,721) | (2,647,930) |
Net cash used in investing activities - Discontinued Operations | 0 | 0 |
Net cash used in investing activities | (648,721) | (2,647,930) |
Cash flows from financing activities | ||
Repayment of related party note payable | 0 | 1,470,000 |
Payment of note payable | (317,371) | (152,186) |
Change in line of credit, net | (764,844) | 0 |
Net cash provided (used) by financing activities - Continuing Operations | (1,082,215) | 1,317,814 |
Net cash provided by financing activities - Discontinued Operations | 0 | 0 |
Net cash provided (used) by financing activities | (1,082,215) | 1,317,814 |
Net decrease in cash - Continuing Operations | (3,851,226) | (3,846,903) |
Net (decrease) increase in cash - Discontinued Operations | (223,957) | (4,240) |
Cash, beginning of period | 4,492,291 | 7,149,806 |
Cash, end of period | 417,108 | 3,298,663 |
Supplemental cash flow disclosures | ||
Interest paid | 94,860 | 239,117 |
Income tax paid | 0 | 0 |
Issuance of common stock for acquisition of Cygnet | 162,727 | 0 |
Issuance of debt for the acquisition payable for Cygnet | $ 300,000 | 0 |
Bloomios non-cash payment of receivable, net | 845,443 | |
Stock issued for construction services for property and equipment | $ 0 | $ 70,350 |
Background Information
Background Information | 3 Months Ended |
Sep. 30, 2023 | |
Background Information | |
Background Information | Note 1. Background Information 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. Upexi, Inc. (the “Company”) is a Nevada corporation with fourteen active subsidiaries through which the Company primarily conducts its business. The Company’s fourteen active subsidiaries are as follows: ☐ 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. o Upexi Distribution Management LLC, a Delaware limited liability company ☐ Cygnet Online, LLC (“Cygnet”), a Delaware limited liability company. In addition, the Company has four wholly owned subsidiaries that had no activity during the three months ended September 30, 2023 and September 30, 2022, respectively. · Steam Distribution, LLC, a California limited liability company · One Hit Wonder, Inc., a California corporation · One Hit Wonder Holdings, LLC, a California limited liability company · Vape Estate, Inc., a Nevada Corporation Our products are distributed in the United States of America and internationally through multiple entities and managed through our locations in Florida, California, and Nevada. Upexi VitaMedica Cygnet Online Lucky Tail HAVZ, LLC, d/b/a/ Steam Wholesale Business Acquisitions On April 1, 2022, the Company entered into 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 September 1, 2023, the Company purchased the remaining 45% of Cygnet Online, LLC for $500000 cash, 90,909 shares of the Company’s common stock and a $300,000 cash payment due on September 1, 2024. On August 12, 2022, the Company entered into an asset purchase agreement with GA Solutions, LLC, a Delaware limited liability company (“LuckyTail”), pursuant to which the Company acquired substantially all of the 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, entered into 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 sells to national retail distributors. Business Divested On October 26, 2022, the Company entered into 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 of the 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. As a result, 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. On August 31, 2023, Upexi, Inc. (the “Company”) entered into an Equity Interest Purchase Agreement (“EIPA”) pursuant to which the Company sold one hundred percent (100%) of the issued and outstanding equity (the “Interests”) of its wholly owned subsidiary Interactive Offers, LLC (“Interactive”) to Amplifyir Inc. (the “Buyer”). The purchase price for the Interests was One Million Two Hundred Fifty Thousand Dollars ($1,250,000), subject to certain customary post-closing adjustments. In addition, the Buyer is obligated to pay the Company two-and one- half percent (2.5%) of certain advertising revenues of Interactive for a two-year period post-closing. Accordingly, the results of the business were classified as discontinued operations in our 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 September 30, 2023 and June 30, 2023. 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 has 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. Reclassification Certain reclassifications have been made to the condensed consolidated financial statements as of and for the three months ended September 30, 2023, and for the three month period ended September 30, 2022 to conform to the presentation as of and for the three months ended September 30, 2023. |
Acquisition
Acquisition | 3 Months Ended |
Sep. 30, 2023 | |
Acquisition | |
Acquisition | Note 2. Acquisitions Cygnet Online, LLC The Company acquired 55% of Cygnet Online, LLC, on April 1, 2022. The purchase price was $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 55% of the business was acquired through a stock purchase agreement on April 1, 2022. The purchase agreement provided for an increase in the purchase price of up to $700,000 based on the attainment of certain sales threshold in the first year. Our management believed that the attainment of those sales threshold at the time of acquisition was unlikely and valued the contingency at $0. The sales thresholds were not met, and no consideration was recorded for the contingency. The equity interest purchase agreement has standard provisions to adjust the purchase price based on the final working capital transferred to the Company. The purchase price was decreased by $950,000 and was repaid to the Company with the reduction in the loan to the seller. The 55% purchase price allocation is final and is no longer subject to change. The Company’s consolidated financial statements for the three months ended September 30, 2023 and 2022, include the actual results of Cygnet. On September 1, 2023, the Company completed the acquisition of the remaining 45% interest for structured cash payments equaling $800,000 and 90,909 shares of the Company’s common stock valued at $162,727. Fair value of consideration transferred: Cash $ 800,000 Noncontrolling interest 505,147 Common stock, 90,909 shares valued at $1.79 per common share, the closing price on September 1, 2023. 162,727 $ 1,467,874 The additional consideration was recorded as goodwill by management and will be subject to change based on the final purchase price allocation. 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 On August 13, 2022, the Company acquired the pet product brand and the rights to the products 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 484,729 Cash payment, 180 days after close 469,924 Contingent consideration 112,685 Cash payment, working capital adjustment 460,901 $ 3,528,239 Recognized amounts of identifiable assets acquired, and liabilities assumed: Inventory $ 460,901 Trade name 383,792 Customer list 1,834,692 Total identifiable net assets $ 2,679,385 Goodwill $ 848,854 The business was acquired through an asset purchase agreement, that acquired all elements of the business, including all of the tangible and intangible assets of the LuckyTail business. The purchase agreement provided for an increase in the purchase price based on the attainment of certain sales thresholds in the first six months. The Company estimated the value of this at approximately $150,000 at the time of purchase. The sales calculated to a $112,685 payout and the purchase price was adjusted. The asset purchase agreement has standard provisions to adjust the purchase price based on the final working capital transferred to the Company. The purchase price was increased by $460,901 for the excess working capital that was transferred in the business and the final purchase price allocation was completed by an independent consulting firm and is no longer subject to change. The Company’s consolidated financial statements for the three months ended September 30, 2023, include the actual results of LuckyTail. The consolidated financial statements for the three months ended September 30, 2022, include the actual results of LuckyTail from August 13, 2022 through September 30, 2022. The Company recorded interest on the consideration of $63,282 during the year ended June 30, 2023. 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, Technology Inc. and its subsidiaries On 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 5,189,718 Note payable 2 4,684,029 Convertible note payable, convertible at $4.81 per common share 2,418,860 Common stock, 1,247,402 shares valued at $4.81 per common share, the calculated closing price on October 21, 2022. 6,000,000 $ 21,039,765 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 1,727,249 Customer relationships 5,080,305 Accrued liabilities (192,051 ) Line of credit (7,201,079 ) Total identifiable net assets $ 14,635,673 Goodwill $ 6,404,092 The business was acquired through a membership interest purchase agreement on October 21, 2022. There was no contingent consideration payable under the asset purchase agreement, although a provision was used to adjust the purchase price based on the final working capital transferred to the Company. The purchase price was decreased by $33,803, net and was repaid to the Company with an adjustment to the $3,000,000 cash payment. The final purchase price allocation was completed by an independent consulting firm and is no longer subject to change. The Company’s consolidated financial statements for the three months ended September 30, 2023, include the actual results of E-Core. The Company recorded interest on the consideration of $969,098 during the year ended June 30, 2023. At June 30, 2023 there was $1,738,295 of unamortized debt discount that will be expensed over the next two years. 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 develops 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. Three months ended September 30, 2023 2022 Cygnet 4,669,367 7,247,519 LuckyTail 802,504 824,775 E-Core 17,092,372 - $ 22,564,243 $ 8,072,294 Consolidated pro-forma unaudited financial statements. The following unaudited pro forma combined financial information is based on the historical financial statements of the Company, LuckyTail and E-Core after giving effect to the Company’s acquisitions as if the acquisitions occurred on July 1, 2022. 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, 2022, 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 months ended September 30, 2022, as if the acquisitions occurred on July 1, 2022. The results of operations for VitaMedica, Interactive and Cygnet are included in the three months ended September 30, 2022 and the results of operations for LuckyTail are included from August 13, 2022 to September 30, 2022. Operating expenses for the three months ended September 30, 2022 have been increased for the amortization expense associated with the fair value adjustment of definite lived intangible assets of LuckyTail and E-Core by approximately $44,619, and $134,625, per month respectively and $363,415 of interest expense. Pro Forma, Unaudited Proforma Three months ended September 30, 2022 Upexi, Inc. LuckyTail E-Core Adjustments Proforma Net sales $ 11,218,799 $ 892,270 $ 9,420,927 $ - $ 21,531,996 Cost of sales $ 5,501,316 $ 137,088 $ 8,208,282 $ - $ 13,746,686 Operating expenses $ 8,194,881 $ 383,476 $ 635,608 $ 834,219 $ 10,048,184 Net income (loss) from continuing operations $ (2,745,520 ) $ - $ 578,037 $ (834,219 ) $ (2,629,996 ) Basic income (loss) per common share $ (0.16 ) $ - $ 0.46 $ $ (0.15 ) Weighted average shares outstanding 16,713,345 1,247,403 17,960,748 The LuckyTail annual amortization expense is $532,992 annually and $44,619 monthly, based on the allocation of the purchase price. For the one and a half months ended September 30, 2022, the proforma adjustment included $66,624, one and a half months of amortization expense. The E-Core annual amortization expense is $1,615,500 annually and $134,625 monthly, based on the allocation of the purchase price. For the three months ended September 30, 2022, the proforma adjustment included $403,875 of amortization expense. External legal, accounting and consulting services directly related to completed acquisitions, due diligence, and review of possible target acquisitions are included in the general and administrative expenses on the Company’s condensed consolidated statements of operations. |
Inventory
Inventory | 3 Months Ended |
Sep. 30, 2023 | |
Inventory | |
Inventory | Note 3. Inventory Inventory consisted of the following: September 30, 2023 June 30, 2023 Raw materials $ 1,511,123 $ - Finished goods 12,275,139 11,557,128 $ 13,786,262 $ 11,557,128 The Company periodically reviews its inventory and makes adjustments to net realizable value, as appropriate. During the three months ended September 30, 2023 and 2022, the Company wrote off inventory valued at $54,521 and no inventory write off, respectively. |
Property and Equipment
Property and Equipment | 3 Months Ended |
Sep. 30, 2023 | |
Property and Equipment | |
Property and Equipment | Note 4. Property and Equipment Property and equipment consist of the following: September 30, 2023 June 30, 2023 Furniture and fixtures $ 212,322 $ 172,663 Computer equipment 157,634 156,283 Internal use software 634,789 608,949 Manufacturing equipment 3,505,272 3,325,525 Leasehold improvements 75,010 - Building 5,072,381 4,923,462 Vehicles 295,329 261,362 Property and equipment, gross 9,952,738 9,455,848 Less accumulated depreciation (2,207,865 ) (1,921,780 ) $ 7,744,873 $ 7,526,463 Depreciation expense for the three months ended September 30, 2023 and 2022 was $286,084 and $194,497, respectively. |
Intangible Assets
Intangible Assets | 3 Months Ended |
Sep. 30, 2023 | |
Intangible Assets | |
Intangible Assets | Note 5. Intangible Assets Intangible assets as of September 30, 2023: Estimated Life Cost Accumulated Amortization Net Book Value Customer relationships 4 years $ 8,243,897 $ 2,005,602 $ 6,238,295 Trade name 5 years 2,574,041 1,077,197 1,496,844 Non-compete agreements Term of agreement 143,000 143,000 - Online sales channels 2 years 1,800,000 1,350,000 450,000 Vender relationships 5 years 6,000,000 1,800,000 4,200,000 $ 18,760,938 $ 6,375,799 $ 12,385,139 For the three months ended September 30, 2023 and 2022, the Company amortized approximately $1,186,821 and $729,909, respectively. Intangible assets as of June 30, 2023: Estimated Life Cost Accumulated Amortization Net Book Value Customer relationships 4 years $ 8,243,897 $ 1,937,595 $ 6,306,302 Trade name 5 years 2,574,041 489,341 2,084,700 Non-compete agreements Term of agreement 143,000 137,042 5,958 Online sales channels 2 years 1,800,000 1,125,000 675,000 Vender relationships 5 years 6,000,000 1,500,000 4,500,000 $ 18,760,938 $ 5,188,978 $ 13,571,960 The following intangible assets were added during the year ended June 30, 2023, from the acquisitions noted below: LuckyTail: Customer relationships $ 1,834,692 Trade name 383,792 Intangible Assets from Purchase $ 2,218,484 E-Core: Customer relationships $ 5,080,205 Trade name 1,727,249 Intangible Assets from Purchase $ 6,807,454 The following intangible assets were added during the year ended June 30, 2022, from the acquisition of VitaMedica, Interactive and Cygnet. Customer relationships $ 1,329,000 Trade name 463,000 Non-compete agreements 143,000 Online sales channels 1,800,000 Vender relationships 6,000,000 Intangible Assets from Purchase $ 9,735,000 Future amortization of intangible assets at September 30, 2023 are as follows: June 30, 2024 $ 2,736,545 June 30, 2025 3,640,782 June 30, 2026 3,472,032 June 30, 2027 1,503,654 June 30, 2028 840,000 Thereafter 210,000 $ 12,403,014 |
Prepaid Expense and Other Curre
Prepaid Expense and Other Current Assets | 3 Months Ended |
Sep. 30, 2023 | |
Prepaid Expense and Other Current Assets | |
Prepaid Expense and Other Current Assets | Note 6. Prepaid Expense and Other Current Assets Prepaid and other current assets consist of the following: September 30, 2023 June 30, 2023 Insurance $ 161,240 $ 187,949 Prepayment to vendors 93,143 263,652 Deposits on services 39,047 45,678 Prepaid monthly rent 53,189 27,813 Subscriptions and services being amortized over the service period 111,067 - Prepaid sales tax 70,021 Other deposits 70,826 70,826 Stock issued for prepaid interest on convertible note payable 350,676 465,595 Other prepaid expenses 78,396 31,000 Other receivables - 144,765 Total $ 957,584 $ 1,307,299 |
Operating Leases
Operating Leases | 3 Months Ended |
Sep. 30, 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 September 30, 2023: 2024 $ 517,099 2025 619,080 2026 644,121 2027 270,054 2028 244,013 Thereafter 21,115 Total undiscounted future minimum lease payments 2,315,483 Less: Imputed interest (197,895 ) Present value of operating lease obligation $ 2,117,588 The Company’s weighted average remaining lease term and weighted average discount rate for operating leases as of September 30, 2023 are: Weighted average remaining lease term 44 Months Weighted average incremental borrowing rate 5.0 % For the three months ended September 30, 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 September 30, 2023 Operating lease cost: Operating lease cost $ 174,212 Amortization of ROU assets 170,970 Interest expense 26,347 Total lease cost $ 371,529 |
Accrued Liabilities
Accrued Liabilities | 3 Months Ended |
Sep. 30, 2023 | |
Accrued Liabilities | |
Accrued Liabilities | Note 8. Accrued Liabilities Accrued liabilities consist of the following: September 30, 2023 June 30, 2023 Accrued interest $ 919,648 $ 655,187 Accrued vendor liabilities 1,063,841 861,664 Accrued sales tax 37,464 47,070 Accrued expenses from sale of manufacturing operations 1,350,545 1,360,000 Other accrued liabilities 512,924 441,641 $ 3,883,841 $ 3,365,562 |
Convertible Promissory Notes an
Convertible Promissory Notes and Notes Payable | 3 Months Ended |
Sep. 30, 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 September 30, 2023 and June 30, 2023 are summarized below: Maturity September 30, June 30, Date 2023 2023 Convertible Notes: Promissory Note, 21- month term note, 18.11% interest payable with common stock and subordinate to the Convertible Notes June 1, 2026 $ 2,150,000 $ 2,150,000 Less current portion of notes payable - 1,254,167 Notes payable, net of current portion $ 2,150,000 $ 895,833 Acquisition Notes: Convertible Notes, 36-month term notes, 0% cash interest, collateralized with all the assets of the Company October 31, 2025 3,500,000 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 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 5,750,000 Total $ 15,000,000 $ 15,000,000 Discount on acquisition notes payable, current (93,380 ) (93,380 ) Acquisition notes payable, current 5,750,000 5,750,000 Acquisition notes payable, current net $ 5,656,620 $ 5,656,620 Discount on acquisition notes payable, long-term (1,281,503 ) (1,644,915 ) Acquisition notes payable, long-term 9,250,000 9,250,000 Acquisition notes payable, long-term net $ 7,968,497 $ 7,605,085 Notes Payable: Mortgage Loan, 10-year term note, 4.8% interest, collateralized by land and warehouse building September 26, 2032 $ 2,781,193 $ 2,841,566 Promissory Note, 21-month term note, 10% cash interest and subordinate to the Convertible Notes November 22, 2024 560,000 560,000 SBA note payable, 30-year term note, 6% interest rate and collateralized with all assets of the Company October 6, 2021 3,728,970 3,910,767 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 1,015,819 1,099,592 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 683,968 683,968 Total notes payable 8,769,950 9,095,893 Discount on notes payable, current (15,620 ) (24,191 ) Notes payable, current 4,270,977 2,580,379 Notes payable, current net $ 4,255,357 $ 2,556,188 Discount on notes payable, long-term (23,522 ) (23,522 ) Notes payable, long-term 4,498,973 7,769,679 Notes payable, long-term, net $ 4,475,451 $ 7,746,157 Related Notes Payable: Marshall Loan, 2-year term note, 8.5% cash interest, 3.5% PIK interest and subordinate to the Convertible Notes June 28, 2024 1,500,000 1,500,000 Discount on related party note payable, long term (55,507 ) (70,644 ) Notes payable, long term 1,500,000 1,500,000 Notes payable, long term net $ 1,444,493 $ 1,429,356 Total convertible notes payable, acquisition notes payable, notes payable and related party note payable $ 25,950,418 $ 25,889,239 Future payments on notes payable are as follows: For the year ended June 30: Notes Payable Convertible Notes Acquisition Notes Payable Related Party Note Payable Total 2024 $ 4,270,977 $ $ 5,750,000 $ $ 10,020,977 2025 734,529 5,750,000 6,484,529 2026 1,306,040 2,150,000 3,500,000 1,500,000 8,456,040 2027 627,277 627,277 2028 313,045 313,045 Thereafter 1,518,082 1,518,082 $ 8,769,950 $ 2,150,000 $ 15,000,000 1,500,000 $ 27,419,950 Note original discount (39,142 ) - (1,374,883 ) (55,507 ) (1,469,532 ) $ 8,730,808 $ 2,150,000 $ 13,625,117 $ 1,444,493 $ 25,950,418 Convertible Notes Payable: 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 were exercisable for five years at an exercise price of $4.44 per share, provide 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. 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. Acquisition Notes Payable: 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. The Company repaid the note in full plus all outstanding accrued interest during April 2023. 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%. 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. Notes Payable: 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 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. Cygnet Online had certain loans outstanding prior to the acquisition, which continued to be outstanding post acquisition. · Cygnet Online, entered into a loan for $4,436,900 with the Small Business Administration. The promissory note has a scheduled payment commencing on November 6, 2021, consisting of principal and interest. The interest rate is adjustable of prime plus 2.5% and is currently at 10.25%. The balance of the principal and interest will be payable ten years from the date of the promissory note. · Cygnet Online, entered into a 60-month inventory consignment note with the first payment due June 30, 2022. The note bears interest at 3.5% per annum. · Cygnet Online, executed a promissory note in the amount of $850,000 payable in six annual installments of principal and interest, the final payment due December 1, 2027. The note bears interest at 3.5% per annum. Line of Credit: The Company through its wholly owned subsidiary, New England Technology, Inc., maintains a $10,000,000 inventory and accounts receivable line of credit, interest rate of prime minus ½% payable monthly. The outstanding balance at September 30, 2023 was $118,001 and $882,845 at June 30, 2023. The availability under the line of credit at September 30, 2023 was $6,220,013. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Sep. 30, 2023 | |
Related Party Transactions | |
Related Party Transactions | Note 10. Related Party Transactions The Company purchased Interactive Offers, LLC, a Delaware limited liability company in October 2021. The Company’s CEO and Chairman, Allan Marshall, is the controlling stockholder and the president of MFA Holdings Corp., which owned 20% of the outstanding membership interests in Interactive. 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. |
Equity Transactions
Equity Transactions | 3 Months Ended |
Sep. 30, 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 Subsequent to September 30, 2022, the Company issued 1,247,403 shares of common stock for the acquisition of E-Core Technologies Inc. a Florida corporation, valued at $6,000,000. The Company issued 134,000 shares of common stock for prepayment of interest on a note payable. The shares were valued at $607,020 or $4.52 per common share and recorded as prepaid interest as the shares were issued at that time. 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. In September of 2023, the Company issued 90,909 shares of common stock for the purchase of the remaining 45% of Cygnet Online, LLC. The shares were valued at $162,727 or $1.79 per common share. |
Stock Based Compensation
Stock Based Compensation | 3 Months Ended |
Sep. 30, 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 three months ended September 30, 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, 2023 4,839,278 $ 3.31 6.23 $ 1,342,280 Exercised - - - - Forfeited 378,000 $ 4.34 3.78 Granted - - - - Options outstanding at September 30, 2023 4,461,278 $ 3.17 6.30 372,856 Options exercisable at September 30, 2023 (vested) 4,099,778 $ 3.03 6.49 $ 372,856 Stock-based compensation expense attributable to stock options was $421,887 and $927,326 for the three months ended September 30, 2023, and 2022, respectively. As of September 30, 2023, there was $1,032,725 of unrecognized compensation expense related to unvested stock options outstanding, and the weighted average vesting period for those options was approximately 2 years. There were no stock options granted during the three months ended September 30, 2023. There were 4,648,624 shares available for issuance as of September 30, 2023, under the 2019 Plan as amended. |
Income Taxes
Income Taxes | 3 Months Ended |
Sep. 30, 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 $472,367 and $708,201 for the three months ended September 30, 2023 and September 30, 2022, respectively. The income tax expense for the three months ended September 30, 2023, was primarily attributable to federal and state income taxes and nondeductible expenses for an effective tax rate of approximately 25.83%. For the three months ended September 30, 2023, the difference between the U.S. statutory rate and the Company’s effective tax rate is due to the full valuation allowance on the Company’s deferred tax assets. Future realization of the tax benefits of existing temporary differences and net operating loss carryforwards ultimately depends on the existence of sufficient taxable income within the carryforward period. As of June 30, 2023 and 2022, the Company performed an evaluation to determine whether a valuation allowance was needed. The Company considered all available evidence, both positive and negative, which included the results of operations for the current and preceding years. 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. The Company used $2,506,514 of the federal net operating loss carryover during the year ended June 30, 2022. As of September 30, 2023, there was approximately $3,097,791 of losses available to reduce federal taxable income in future years and can be carried forward indefinitely. |
Risks and Uncertainties
Risks and Uncertainties | 3 Months Ended |
Sep. 30, 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. |
Significant Customers
Significant Customers | 3 Months Ended |
Sep. 30, 2023 | |
Significant Customers | |
Significant Customers | Note 15. Significant Customers The Company had significant customers during the three months ended September 30, 2023. A significant customer is defined as one that makes up ten percent or more of total revenues in a particular period or ten percent of outstanding accounts receivable balance as of the period. The Company had no significant customers during the three months ended September 30, 2022. Net revenues for the three months ended September 30, 2023, include revenues from significant customers in the product segment as follows: September 30, 2023 Customer A 12.56 % Accounts receivable balances as of September 30, 2023, from significant customers are as follows: September 30, 2023 Customer A 22.79 % |
Discontinued Operations - Sale
Discontinued Operations - Sale of Infusionz to Bloomios | 3 Months Ended |
Sep. 30, 2023 | |
Discontinued Operations - Sale of Infusionz to Bloomios | |
Discontinued Operations - Sale of Infusionz to Bloomios | Note 16. 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 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. At closing, the Company provided working capital, in the form of inventory, in excess of the working capital agreement and during the transition period, there are certain expenses and purchases incurred that are to be netted against funds collected on behalf of the buyer. June 30, 2023, there was a receivable balance from the buyer of 845,443, net of a reserve of $931,613. Advance for payroll $ 50,000 Operating expense 652,891 Management fees 685,600 Excess working capital 388,565 Accrued Interest 247,885 Subtotal due from Bloomios $ 2,024,941 Reserve 1,179,498 Total due from Bloomios $ 845,443 For several reasons, including but not limited to the non-payment per the terms of several agreements and the continuous delay in getting the business transitioned, the Company notified Bloomios of its termination of the transition agreement. Management accrued a reserve on the receivable balance of $1,179,498 leaving a receivable balance of $845,443 on June 30, 2023. Accrued interest and the gain from the original issue discount were reversed and the remaining balance was expensed to loss from discontinued operations. During the three months ended, September 30, 2023 the Company recorded the following non-cash amounts against the receivable balance. Inventory $ 1,090,828 Accounts receivable 157,200 Accounts payable and accrued liabilities (475,817 ) Customer deposits (133,950 ) Fixed assets 208,182 Net assets $ 845,443 Due from Bloomios $ - Note 16. Discontinued Operations – Sale of Interactive Offers On August 31, 2023, the Company sold Interactive offers to Amplifyir Inc. The purchase price is $1,250,000 with a provision to adjust the final purchase price based on the business being transferred to Amplifyer Inc. with a net zero working capital. In addition, the Buyer is obligated to pay the Company two-and one-half percent (2.5%) of certain advertising revenues of Interactive for a two-year period post-closing. Accordingly, the results of the business were classified as discontinued operations in our statements of operations and excluded from both continuing operations and segment results for all periods presented. Summary of discontinued operations: Three months ended September 30, 2023 2022 Discontinued Operations Revenue $ 158,147 $ 955,762 Cost of sales $ 11,982 $ 730,306 Sales, general and administrative expenses $ 339,205 $ 663,778 Depreciation and amortization $ - $ 9,795 Income (loss) from discontinued operations $ (193,040 ) $ (448,117 ) Accounts receivable net of allowance for doubtful accounts $ - $ 35,482 Fixed assets, net of accumulated depreciation $ - $ 5,195 Total assets $ - $ 321,425 Total liabilities $ - $ 652,911 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Sep. 30, 2023 | |
Subsequent Events | |
Subsequent Events | Note 17. Subsequent Events In June 2022, the Company executed a promissory note with Allan Marshall, the Company’s Chief Executive Officer and a Director, in the original principal amount of $1,500,000. On November 15, 2023, the Company executed an amendment to the promissory note with Mr. Marshall, providing for the payment of interest only for 18 months at an interest rate of 12% per annum and thereafter the amortization of the note over a 12 month period, starting in June of 2025. The principal currently outstanding is $1,500,000. In addition to this, the Company issued Mr. Marshall a warrant to purchase up to 375,000 shares of the Company’s common stock at a per share price of $1.10. The note has been classified as long-term in the financial statements. On February 22, 2023, the Company executed a promissory note with an investor, in the original principal amount of $560,000. On November 15, 2023, the Company executed an amendment to the promissory note with the investor, providing for the payment of interest only for 18 months at 12% per annum and thereafter the amortization of the note over a 12 month period, starting in June of 2025. The principal currently outstanding is $560,000. In addition to this, the Company issued the investor a warrant to purchase up to 125,000 shares of the Company’s common stock at a per share price of $1.10. The note has been classified as long-term in the financial statements. On February 22, 2023, the Company executed a promissory note with an investor, in the original principal amount of $2,150,000. In November of 2023, the Company executed an amendment to the promissory note with the investor, providing for the payment of interest only for 18 months at 12% per annum and thereafter the amortization of the note over a 12 month period, starting in June of 2025. The principal currently outstanding is $2,150,000. In addition to this, the Company issued the investor a warrant to purchase up to 500,000 shares of the Company’s common stock at a per share price of $1.10. The note has been classified as long-term in the financial statements. On November 2, 2023, the Company paid $2,000,000 of the first acquisition note to the sellers of the E-Core business. $3,750,000 and accrued interest of $230,000 remain unpaid on this acquisition note. Per the transaction documents, the interest rate on the remaining balance is increased to 12% per annum on the outstanding balance until the debt is paid. Management expects to pay the remaining principal and interest on the note in monthly installments of $353,618 commencing in December 2023. This loan is classified as current in the financial statements and the other loans with the sellers are unaffected with the default on the first loan. With the purchase of the remaining 45% of the Cygnet business, the Company was notified that it was in default and the Company would not qualify to refinance Cygent’s SBA loan. The SBA presented the Company with a demand notice of $3,835,975 for all principal and interest due under the SBA loan. The Company is working with the lender to resolve this default and is looking at various options. This loan is classified as current in the financial statements and the other loans to the sellers is unaffected with the default on the loan. |
Description of the Business (Po
Description of the Business (Policies) | 3 Months Ended |
Sep. 30, 2023 | |
Background Information | |
Business Acquisitions | On April 1, 2022, the Company entered into 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 September 1, 2023, the Company purchased the remaining 45% of Cygnet Online, LLC for $500000 cash, 90,909 shares of the Company’s common stock and a $300,000 cash payment due on September 1, 2024. On August 12, 2022, the Company entered into an asset purchase agreement with GA Solutions, LLC, a Delaware limited liability company (“LuckyTail”), pursuant to which the Company acquired substantially all of the 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, entered into 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 sells to national retail distributors. |
Business Divested | On October 26, 2022, the Company entered into 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 of the 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. As a result, 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. On August 31, 2023, Upexi, Inc. (the “Company”) entered into an Equity Interest Purchase Agreement (“EIPA”) pursuant to which the Company sold one hundred percent (100%) of the issued and outstanding equity (the “Interests”) of its wholly owned subsidiary Interactive Offers, LLC (“Interactive”) to Amplifyir Inc. (the “Buyer”). The purchase price for the Interests was One Million Two Hundred Fifty Thousand Dollars ($1,250,000), subject to certain customary post-closing adjustments. In addition, the Buyer is obligated to pay the Company two-and one- half percent (2.5%) of certain advertising revenues of Interactive for a two-year period post-closing. Accordingly, the results of the business were classified as discontinued operations in our 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 September 30, 2023 and June 30, 2023. 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 has 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. Certain reclassifications have been made to the condensed consolidated financial statements as of and for the three months ended September 30, 2023, and for the three month period ended September 30, 2022 to conform to the presentation as of and for the three months ended September 30, 2023. |
Acquisition (Table)
Acquisition (Table) | 3 Months Ended |
Sep. 30, 2023 | |
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 |
Schedule of revenue from acquisitions | Three months ended September 30, 2023 2022 Cygnet 4,669,367 7,247,519 LuckyTail 802,504 824,775 E-Core 17,092,372 - $ 22,564,243 $ 8,072,294 |
Schedule of pro forma | Pro Forma, Unaudited Proforma Three months ended September 30, 2022 Upexi, Inc. LuckyTail E-Core Adjustments Proforma Net sales $ 11,218,799 $ 892,270 $ 9,420,927 $ - $ 21,531,996 Cost of sales $ 5,501,316 $ 137,088 $ 8,208,282 $ - $ 13,746,686 Operating expenses $ 8,194,881 $ 383,476 $ 635,608 $ 834,219 $ 10,048,184 Net income (loss) from continuing operations $ (2,745,520 ) $ - $ 578,037 $ (834,219 ) $ (2,629,996 ) Basic income (loss) per common share $ (0.16 ) $ - $ 0.46 $ $ (0.15 ) Weighted average shares outstanding 16,713,345 1,247,403 17,960,748 |
VitaMedica Corporation [Member] | |
Schedule Of recognized identified assets acquired, and liabilities assumed | Cash $ 2,000,000 Cash payment, 90 days after close 484,729 Cash payment, 180 days after close 469,924 Contingent consideration 112,685 Cash payment, working capital adjustment 460,901 $ 3,528,239 Inventory $ 460,901 Trade name 383,792 Customer list 1,834,692 Total identifiable net assets $ 2,679,385 Goodwill $ 848,854 Fair value of consideration transferred: Cash $ 100,000 Cash payment, 120 days 3,000,000 Note payable 5,189,718 Note payable 2 4,684,029 Convertible note payable, convertible at $4.81 per common share 2,418,860 Common stock, 1,247,402 shares valued at $4.81 per common share, the calculated closing price on October 21, 2022. 6,000,000 $ 21,039,765 Cash $ 1,014,610 Accounts receivable 6,699,945 Inventory 7,750,011 Prepaid expenses 75,721 Trade name 1,727,249 Customer relationships 5,080,305 Accrued liabilities (192,051 ) Line of credit (7,201,079 ) Total identifiable net assets $ 14,635,673 Goodwill $ 6,404,092 |
Inventory (Table)
Inventory (Table) | 3 Months Ended |
Sep. 30, 2023 | |
Inventory | |
Schedule Of inventory | September 30, 2023 June 30, 2023 Raw materials $ 1,511,123 $ - Finished goods 12,275,139 11,557,128 $ 13,786,262 $ 11,557,128 |
Property and Equipment (Table)
Property and Equipment (Table) | 3 Months Ended |
Sep. 30, 2023 | |
Property and Equipment | |
Schedule Of Property and Equipment | September 30, 2023 June 30, 2023 Furniture and fixtures $ 212,322 $ 172,663 Computer equipment 157,634 156,283 Internal use software 634,789 608,949 Manufacturing equipment 3,505,272 3,325,525 Leasehold improvements 75,010 - Building 5,072,381 4,923,462 Vehicles 295,329 261,362 Property and equipment, gross 9,952,738 9,455,848 Less accumulated depreciation (2,207,865 ) (1,921,780 ) $ 7,744,873 $ 7,526,463 |
Intangible Assets (Table)
Intangible Assets (Table) | 3 Months Ended |
Sep. 30, 2023 | |
Intangible Assets | |
Schedule Of Intangible Assets | Estimated Life Cost Accumulated Amortization Net Book Value Customer relationships 4 years $ 8,243,897 $ 2,005,602 $ 6,238,295 Trade name 5 years 2,574,041 1,077,197 1,496,844 Non-compete agreements Term of agreement 143,000 143,000 - Online sales channels 2 years 1,800,000 1,350,000 450,000 Vender relationships 5 years 6,000,000 1,800,000 4,200,000 $ 18,760,938 $ 6,375,799 $ 12,385,139 Estimated Life Cost Accumulated Amortization Net Book Value Customer relationships 4 years $ 8,243,897 $ 1,937,595 $ 6,306,302 Trade name 5 years 2,574,041 489,341 2,084,700 Non-compete agreements Term of agreement 143,000 137,042 5,958 Online sales channels 2 years 1,800,000 1,125,000 675,000 Vender relationships 5 years 6,000,000 1,500,000 4,500,000 $ 18,760,938 $ 5,188,978 $ 13,571,960 |
Schedule Of Intengible Assets Added | LuckyTail: Customer relationships $ 1,834,692 Trade name 383,792 Intangible Assets from Purchase $ 2,218,484 E-Core: Customer relationships $ 5,080,205 Trade name 1,727,249 Intangible Assets from Purchase $ 6,807,454 |
Schedule Of Intangible Assets Of VitaMedica | Customer relationships $ 1,329,000 Trade name 463,000 Non-compete agreements 143,000 Online sales channels 1,800,000 Vender relationships 6,000,000 Intangible Assets from Purchase $ 9,735,000 June 30, 2024 $ 2,736,545 June 30, 2025 3,640,782 June 30, 2026 3,472,032 June 30, 2027 1,503,654 June 30, 2028 840,000 Thereafter 210,000 $ 12,403,014 |
Prepaid Expense and Other Cur_2
Prepaid Expense and Other Current Assets (Table) | 3 Months Ended |
Sep. 30, 2023 | |
Prepaid Expense and Other Current Assets | |
Schedule Of Prepaid Expense and Other Current Assets | September 30, 2023 June 30, 2023 Insurance $ 161,240 $ 187,949 Prepayment to vendors 93,143 263,652 Deposits on services 39,047 45,678 Prepaid monthly rent 53,189 27,813 Subscriptions and services being amortized over the service period 111,067 - Prepaid sales tax 70,021 Other deposits 70,826 70,826 Stock issued for prepaid interest on convertible note payable 350,676 465,595 Other prepaid expenses 78,396 31,000 Other receivables - 144,765 Total $ 957,584 $ 1,307,299 |
Operating Leases (Table)
Operating Leases (Table) | 3 Months Ended |
Sep. 30, 2023 | |
Operating Leases | |
Schedule Of undiscounted future minimum lease payments | 2024 $ 517,099 2025 619,080 2026 644,121 2027 270,054 2028 244,013 Thereafter 21,115 Total undiscounted future minimum lease payments 2,315,483 Less: Imputed interest (197,895 ) Present value of operating lease obligation $ 2,117,588 Weighted average remaining lease term 44 Months Weighted average incremental borrowing rate 5.0 % |
Schedule Of weighted average lease term and weighted average discount rate | Three Months Ended September 30, 2023 Operating lease cost: Operating lease cost $ 174,212 Amortization of ROU assets 170,970 Interest expense 26,347 Total lease cost $ 371,529 |
Accrued Liabilities and Acquisi
Accrued Liabilities and Acquisition Payable (Table) | 3 Months Ended |
Sep. 30, 2023 | |
Accrued Liabilities and Acquisition Payable (Table) | |
Schedule of accrued liabilities | September 30, 2023 June 30, 2023 Accrued interest $ 919,648 $ 655,187 Accrued vendor liabilities 1,063,841 861,664 Accrued sales tax 37,464 47,070 Accrued expenses from sale of manufacturing operations 1,350,545 1,360,000 Other accrued liabilities 512,924 441,641 $ 3,883,841 $ 3,365,562 |
Convertible Promissory Notes _2
Convertible Promissory Notes and Notes Payable (Table) | 3 Months Ended |
Sep. 30, 2023 | |
Convertible Promissory Notes and Notes Payable | |
Schedule Convertible Promissory Notes and Notes Payable | Maturity September 30, June 30, Date 2023 2023 Convertible Notes: Promissory Note, 21- month term note, 18.11% interest payable with common stock and subordinate to the Convertible Notes June 1, 2026 $ 2,150,000 $ 2,150,000 Less current portion of notes payable - 1,254,167 Notes payable, net of current portion $ 2,150,000 $ 895,833 Acquisition Notes: Convertible Notes, 36-month term notes, 0% cash interest, collateralized with all the assets of the Company October 31, 2025 3,500,000 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 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 5,750,000 Total $ 15,000,000 $ 15,000,000 Discount on acquisition notes payable, current (93,380 ) (93,380 ) Acquisition notes payable, current 5,750,000 5,750,000 Acquisition notes payable, current net $ 5,656,620 $ 5,656,620 Discount on acquisition notes payable, long-term (1,281,503 ) (1,644,915 ) Acquisition notes payable, long-term 9,250,000 9,250,000 Acquisition notes payable, long-term net $ 7,968,497 $ 7,605,085 Notes Payable: Mortgage Loan, 10-year term note, 4.8% interest, collateralized by land and warehouse building September 26, 2032 $ 2,781,193 $ 2,841,566 Promissory Note, 21-month term note, 10% cash interest and subordinate to the Convertible Notes November 22, 2024 560,000 560,000 SBA note payable, 30-year term note, 6% interest rate and collateralized with all assets of the Company October 6, 2021 3,728,970 3,910,767 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 1,015,819 1,099,592 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 683,968 683,968 Total notes payable 8,769,950 9,095,893 Discount on notes payable, current (15,620 ) (24,191 ) Notes payable, current 4,270,977 2,580,379 Notes payable, current net $ 4,255,357 $ 2,556,188 Discount on notes payable, long-term (23,522 ) (23,522 ) Notes payable, long-term 4,498,973 7,769,679 Notes payable, long-term, net $ 4,475,451 $ 7,746,157 Related Notes Payable: Marshall Loan, 2-year term note, 8.5% cash interest, 3.5% PIK interest and subordinate to the Convertible Notes June 28, 2024 1,500,000 1,500,000 Discount on related party note payable, long term (55,507 ) (70,644 ) Notes payable, long term 1,500,000 1,500,000 Notes payable, long term net $ 1,444,493 $ 1,429,356 Total convertible notes payable, acquisition notes payable, notes payable and related party note payable $ 25,950,418 $ 25,889,239 |
Schedule Future payments on notes payable | Notes Payable Convertible Notes Acquisition Notes Payable Related Party Note Payable Total 2024 $ 4,270,977 $ $ 5,750,000 $ $ 10,020,977 2025 734,529 5,750,000 6,484,529 2026 1,306,040 2,150,000 3,500,000 1,500,000 8,456,040 2027 627,277 627,277 2028 313,045 313,045 Thereafter 1,518,082 1,518,082 $ 8,769,950 $ 2,150,000 $ 15,000,000 1,500,000 $ 27,419,950 Note original discount (39,142 ) - (1,374,883 ) (55,507 ) (1,469,532 ) $ 8,730,808 $ 2,150,000 $ 13,625,117 $ 1,444,493 $ 25,950,418 |
Stock Based Compensation (Table
Stock Based Compensation (Table) | 3 Months Ended |
Sep. 30, 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, 2023 4,839,278 $ 3.31 6.23 $ 1,342,280 Exercised - - - - Forfeited 378,000 $ 4.34 3.78 Granted - - - - Options outstanding at September 30, 2023 4,461,278 $ 3.17 6.30 372,856 Options exercisable at September 30, 2023 (vested) 4,099,778 $ 3.03 6.49 $ 372,856 |
Significant Customers (Table)
Significant Customers (Table) | 3 Months Ended |
Sep. 30, 2023 | |
Preferred Stock | |
Schedule Of Significant Customers | September 30, 2023 Customer A 12.56 % September 30, 2023 Customer A 22.79 % |
Discontinued Operations Sale of
Discontinued Operations Sale of Infusionz to Bloomios (Table) | 3 Months Ended |
Sep. 30, 2023 | |
Discontinued Operations - Sale of Infusionz to Bloomios | |
Schedule Of inventory or working capital | Tangible assets, inventory / working capital* $ (1,344,000 ) Tangible assets, warehouse and manufacturing equipment, net of accumulated depreciation* (679,327 ) Goodwill (2,413,814 ) Intangible assets, net of accumulated amortization (946,996 ) Accrued and incurred expenses related to the transaction and additional working capital* (2,051,500 ) Consideration received, including cash, debt and equity, net 15,000,000 Total gain recognized $ 7,564,363 |
Schedule Of Sale of Infusionz to Bloomios | Advance for payroll $ 50,000 Operating expense 652,891 Management fees 685,600 Excess working capital 388,565 Accrued Interest 247,885 Subtotal due from Bloomios $ 2,024,941 Reserve 1,179,498 Total due from Bloomios $ 845,443 |
Schedule Of Investments - Bloomios | Inventory $ 1,090,828 Accounts receivable 157,200 Accounts payable and accrued liabilities (475,817 ) Customer deposits (133,950 ) Fixed assets 208,182 Net assets $ 845,443 Due from Bloomios $ - |
Schedule Of Discontinued Operations | Three months ended September 30, 2023 2022 Discontinued Operations Revenue $ 158,147 $ 955,762 Cost of sales $ 11,982 $ 730,306 Sales, general and administrative expenses $ 339,205 $ 663,778 Depreciation and amortization $ - $ 9,795 Income (loss) from discontinued operations $ (193,040 ) $ (448,117 ) Accounts receivable net of allowance for doubtful accounts $ - $ 35,482 Fixed assets, net of accumulated depreciation $ - $ 5,195 Total assets $ - $ 321,425 Total liabilities $ - $ 652,911 |
Acquisition (Details)
Acquisition (Details) - USD ($) | Sep. 30, 2023 | Jun. 30, 2023 | Jun. 30, 2022 |
Cash | $ 417,108 | $ 4,492,291 | |
Inventory | 13,786,262 | 11,557,128 | $ 11,557,128 |
Property and equipment | 7,744,874 | 7,526,463 | |
Other asset | 365,060 | 96,728 | |
Note payable | (517,099) | (419,443) | |
Operating lease | (2,117,588) | ||
Goodwill | 11,719,155 | $ 10,251,281 | |
Cygnet Online, LLC [Member] | |||
Cash | 1,500,000 | ||
Convertible note payable, convertible at $6.00 per common share | 1,050,000 | ||
Earnout payment | 0 | ||
Common stock, 555,489 shares valued at $5.34 per common share, the closing price on April 1, 2022. | 2,965,756 | ||
Total Purchase Price | 5,515,756 | ||
Cash. | 471,237 | ||
Accounts receivable | 860,882 | ||
Inventory | 2,337,208 | ||
Prepaid expenses | 6,900 | ||
Property and equipment | 7,602 | ||
Trade name | 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 1)
Acquisition (Details 1) - USD ($) | Sep. 30, 2023 | Jun. 30, 2023 |
Common stock, 90,909 shares valued at $1.79 per common share, the closing price on September 1, 2023. | $ 20,307 | $ 20,216 |
Cygnet Online, LLC [Member] | ||
Cash | 800,000 | |
Noncontrolling interest | 505,147 | |
Common stock, 90,909 shares valued at $1.79 per common share, the closing price on September 1, 2023. | 162,727 | |
Fair value of consideration transferred | $ 1,467,874 |
Acquisition (Details 2)
Acquisition (Details 2) - USD ($) | Sep. 30, 2023 | Jun. 30, 2023 | Jun. 30, 2022 |
Cash | $ 417,108 | $ 4,492,291 | |
Inventory | 13,786,262 | 11,557,128 | $ 11,557,128 |
Goodwill | 11,719,155 | $ 10,251,281 | |
LuckyTail [Member] | |||
Cash | 2,000,000 | ||
Cash payment, 90 days after close | 484,729 | ||
Cash payment, 180 days after close | 469,924 | ||
Contingent consideration | 112,685 | ||
Cash payment, working capital adjustment | 460,901 | ||
Total Purchase Price | 3,528,239 | ||
Inventory | 460,901 | ||
Trade name | 383,792 | ||
Customer list | 1,834,692 | ||
Total identifiable net assets | 2,679,385 | ||
Goodwill | $ 848,854 |
Acquisition (Details 3)
Acquisition (Details 3) - USD ($) | Sep. 30, 2023 | Jun. 30, 2023 | Jun. 30, 2022 |
Cash | $ 417,108 | $ 4,492,291 | |
Note payable | 517,099 | 419,443 | |
Common stock, 1,247,402 shares valued at $4.81 per common share, the calculated closing price on October 21, 2022. | 20,307 | 20,216 | |
Inventory | 13,786,262 | 11,557,128 | $ 11,557,128 |
Customer relationships | $ 1,329,000 | ||
Accrued liabilities | (3,883,842) | (3,365,562) | |
Line of credit | (118,001) | (882,845) | |
Goodwill | 11,719,155 | $ 10,251,281 | |
E-Core, Inc. and its subsidiaries [Member] | |||
Cash | 100,000 | ||
Cash payment, 120 days | 3,000,000 | ||
Note payable | 5,189,718 | ||
Note payable 2 | 4,684,029 | ||
Convertible note payable, convertible at $4.81 per common share | 2,418,860 | ||
Common stock, 1,247,402 shares valued at $4.81 per common share, the calculated closing price on October 21, 2022. | 6,000,000 | ||
Total Purchase Price | 21,039,765 | ||
Cash balance | 1,014,610 | ||
Accounts receivable | 6,699,945 | ||
Inventory | 7,750,011 | ||
Prepaid expenses | 75,721 | ||
Trade name | 1,727,249 | ||
Customer relationships | 5,080,305 | ||
Accrued liabilities | (192,051) | ||
Line of credit | (7,201,079) | ||
Total identifiable net assets | 14,635,673 | ||
Goodwill | $ 6,404,092 |
Acquisition (Details 4)
Acquisition (Details 4) - USD ($) | 3 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Net revenue | $ 22,564,243 | $ 8,072,294 |
LuckyTail [Member] | ||
Net revenue | 802,504 | 824,775 |
Cygnet [Member] | ||
Net revenue | 4,669,367 | 7,247,519 |
E-core [Member] | ||
Net revenue | $ 17,092,372 | $ 0 |
Acquisition (Details 5)
Acquisition (Details 5) - USD ($) | 3 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cost of sales | $ 18,639,793 | $ 5,401,316 |
Operating expenses | 9,850,003 | 8,194,881 |
Net income (loss) | $ (1,356,388) | $ (2,745,520) |
Basic income (loss) per common share | $ (0.07) | $ (0.16) |
Proforma [Member] | ||
Net sales | $ 21,531,996 | |
Cost of sales | 13,746,686 | |
Operating expenses | 10,048,184 | |
Net income (loss) | $ 2,629,996 | |
Basic income (loss) per common share | $ (0.15) | |
Weighted average shares outstanding | 17,960,748 | |
Proforma Adjustments [Member] | ||
Net sales | $ 0 | |
Cost of sales | 0 | |
Operating expenses | 834,219 | |
Net income (loss) | $ (834,219) | |
Weighted average shares outstanding | (693,001) | |
LuckyTail [Member] | ||
Net sales | $ 892,270 | |
Cost of sales | 137,088 | |
Operating expenses | 383,476 | |
Net income (loss) | $ 0 | |
Basic income (loss) per common share | $ 0 | |
E-core [Member] | ||
Net sales | $ 9,420,927 | |
Cost of sales | 8,208,282 | |
Operating expenses | 635,608 | |
Net income (loss) | $ 578,037 | |
Basic income (loss) per common share | $ 0.46 | |
Weighted average shares outstanding | 1,247,403 | |
Upexi, Inc. [Member] | ||
Net sales | $ 11,218,799 | |
Cost of sales | 5,501,316 | |
Operating expenses | 8,194,881 | |
Net income (loss) | $ 2,745,520 | |
Basic income (loss) per common share | $ (0.16) | |
Weighted average shares outstanding | 16,713,345 |
Acquisition (Details Narrative)
Acquisition (Details Narrative) - USD ($) | 3 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Operating expenses | $ 9,850,003 | $ 8,194,881 |
Common stock issued during period for acquisition value | $ 7,000,000 | |
Common stock issued during period for acquisition, shares | 2,121,213 | |
Cygnet Online, LLC [Member] | ||
Structured cash payments | $ 800,000 | |
Acquisition percentage rate | 45% | |
Remaining interest acquired | 55% | |
Common stock issued during period for acquisition value | $ 162,727 | |
Common stock issued during period for acquisition, shares | 90,909 | |
Purchase price sale of shares | 5,515,756 | |
LuckyTail [Member] | ||
Contingent consideration | $ 63,282 | |
Operating expenses | 44,619 | |
Operating expenses | 383,476 | |
Interest expenses | 63,282 | |
Estimated purchase value of assets | 150,000 | |
Amortization expense | 532,992 | 66,624 |
Amortization expense monthly | 44,619 | |
Revenue for the business acquired | 112,685 | |
Increased purchase price | 460,901 | |
E-Core, Inc [Member] | ||
Cash payment adjustment | 3,000,000 | |
Purchase price decreased amount | 33,803 | |
Operating expenses | 134,625 | |
Unamortized debt discount | 1,738,295 | |
Interest expenses | 969,098 | |
Amortization expense | 1,615,500 | $ 403,875 |
Amortization expense monthly | 134,625 | |
Interest expense monthly | $ 363,415 |
Inventory (Details)
Inventory (Details) - USD ($) | Sep. 30, 2023 | Jun. 30, 2023 | Jun. 30, 2022 |
Inventory | |||
Finished goods | $ 12,275,139 | $ 11,557,128 | |
Raw materials | 1,511,123 | 0 | |
Inventory | $ 13,786,262 | $ 11,557,128 | $ 11,557,128 |
Inventory (Details Narrative)
Inventory (Details Narrative) - USD ($) | 3 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Inventory | ||
Inventory write off | $ 54,521 | $ 54,521 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | Sep. 30, 2023 | Jun. 30, 2023 |
Property and equipment, gross | $ 9,952,738 | $ 9,455,848 |
Less accumulated depreciation | (2,207,865) | (1,921,780) |
Property and equipment | 7,744,874 | 7,526,463 |
Furniture and Fixtures [Member] | ||
Property and equipment | 212,322 | 172,663 |
Computer equipment [Member] | ||
Property and equipment | 157,634 | 156,875 |
Internal use software [Member] | ||
Property and equipment | 634,789 | 608,949 |
Manufacturing equipment [Member] | ||
Property and equipment | 3,505,272 | 3,325,525 |
Leasehold improvements [Member] | ||
Property and equipment | 75,010 | 0 |
Building [Member] | ||
Property and equipment | 5,072,381 | 4,923,462 |
Vehicles [Member] | ||
Property and equipment | $ 295,329 | $ 261,362 |
Property and Equipment (Detai_2
Property and Equipment (Details Narrative) - USD ($) | 3 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Property and Equipment | ||
Depreciation expense | $ 286,084 | $ 194,497 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) | 3 Months Ended | |
Sep. 30, 2023 | Jun. 30, 2023 | |
Total [Member] | ||
Cost | $ 18,760,938 | $ 18,760,938 |
Accumulated Amortization | 6,375,799 | 5,188,978 |
Net Book Value | 12,385,139 | 13,571,960 |
Non-compete agreements [Member] | ||
Cost | 143,000 | 143,000 |
Accumulated Amortization | 143,000 | 137,042 |
Net Book Value | 0 | 5,958 |
Online sales channels, amortized over two years [Member] | ||
Cost | $ 1,800,000 | 1,800,000 |
Estimated Life | 2 years | |
Accumulated Amortization | $ 1,350,000 | 1,125,000 |
Net Book Value | 450,000 | 675,000 |
Vender relationships, amortized over five years [Member] | ||
Cost | $ 6,000,000 | 6,000,000 |
Estimated Life | 5 years | |
Accumulated Amortization | $ 1,800,000 | 1,500,000 |
Net Book Value | 4,200,000 | 4,500,000 |
Trade Name [Member] | ||
Cost | $ 2,574,041 | 2,574,041 |
Estimated Life | 5 years | |
Accumulated Amortization | $ 1,077,197 | 489,341 |
Net Book Value | 1,496,844 | 2,084,700 |
Customer Relationship [Member] | ||
Cost | $ 8,243,897 | 8,243,897 |
Estimated Life | 4 years | |
Accumulated Amortization | $ 2,005,602 | 1,937,595 |
Net Book Value | $ 6,238,295 | $ 6,306,302 |
Intangible Assets (Details 1)
Intangible Assets (Details 1) | Sep. 30, 2023 USD ($) |
Trade Name [Member] | |
Intangible assets | $ 383,792 |
Trade Name [Member] | E core [Member] | |
Intangible assets | 1,727,249 |
CustomerRelationship [Member] | E core [Member] | |
Intangible assets | 5,080,205 |
Intangible Assets from Purchase | |
Intangible assets | 2,218,484 |
Intangible Asset from Purchage [Member] | E core [Member] | |
Intangible assets | 6,807,454 |
Customer Relationships [Member] | |
Intangible assets | $ 1,834,692 |
Intangible Assets (Details 2)
Intangible Assets (Details 2) | Jun. 30, 2022 USD ($) |
Intangible Assets | |
Customer relationships | $ 1,329,000 |
Trade name | 463,000 |
Non-compete agreements | 143,000 |
Online sales channels | 1,800,000 |
Vendor relationships | 6,000,000 |
Intangible Assets from Purchase | $ 9,735,000 |
Intangible Assets (Details 3)
Intangible Assets (Details 3) | Sep. 30, 2023 USD ($) |
Intangible Assets | |
June 30, 2023 | $ 2,736,545 |
June 30, 2024 | 3,640,782 |
June 30, 2025 | 3,472,032 |
June 30, 2026 | 4,560,800 |
June 30, 2027 | 1,503,654 |
June 30, 2028 | 840,000 |
Thereafter | 210,000 |
Finite-Lived Intangible Assets, Net | $ 12,403,014 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) - USD ($) | 3 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Intangible Assets | ||
Amortization of intangible assets | $ 1,186,821 | $ 729,909 |
Prepaid Expense and Other Cur_3
Prepaid Expense and Other Current Assets (Details) - USD ($) | Sep. 30, 2023 | Jun. 30, 2023 |
Prepaid expenses and other assets | $ 957,584 | $ 1,307,299 |
Insurance [Member] | ||
Prepaid expenses and other assets | 161,240 | 187,949 |
Prepayment to vendors [Member] | ||
Prepaid expenses and other assets | 93,143 | 263,652 |
Deposit on services [Member] | ||
Prepaid expenses and other assets | 39,047 | 45,678 |
Prepaid monthly rent [Member] | ||
Prepaid expenses and other assets | 53,189 | 27,813 |
Other deposits [Member] | ||
Prepaid expenses and other assets | 70,826 | 70,826 |
Subscriptions and services being amortized over the service period [Member] | ||
Prepaid expenses and other assets | 111,067 | 0 |
Prepaid sales tax [Member] | ||
Prepaid expenses and other assets | 0 | 70,021 |
Stock issued for prepaid interest on convertible note payable | ||
Prepaid expenses and other assets | 350,676 | 465,595 |
Other prepaid expenses [Member] | ||
Prepaid expenses and other assets | 78,396 | 31,000 |
Other receivable [Member] | ||
Prepaid expenses and other assets | $ 0 | $ 144,765 |
Operating Leases (Details)
Operating Leases (Details) | Sep. 30, 2023 USD ($) |
Operating Leases | |
2028 | $ 244,013 |
2024 | 517,099 |
2025 | 619,080 |
2026 | 644,121 |
2027 | 270,054 |
Thereafter | 21,115 |
Total undiscounted future minimum lease payments | 2,315,483 |
Less: Imputed interest | (197,895) |
Present value of operating lease obligation | $ 2,117,588 |
Operating Leases (Details 1)
Operating Leases (Details 1) | 3 Months Ended |
Sep. 30, 2023 | |
Operating Leases | |
Weighted average remaining lease term | 44 months |
Weighted average incremental borrowing rate | 5% |
Operating Leases (Details 2)
Operating Leases (Details 2) | 3 Months Ended |
Sep. 30, 2023 USD ($) | |
Operating Leases | |
Operating lease cost | $ 174,212 |
Amortization of ROU assets | 170,970 |
Interest expense | 26,347 |
Total lease cost | $ 371,529 |
Operating Leases (Details Narra
Operating Leases (Details Narrative) | 3 Months Ended |
Sep. 30, 2023 | |
Operating Leases | |
Lease term | 1 year to 5 years |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) | Sep. 30, 2023 | Jun. 30, 2023 |
Accrued Liabilities | ||
Accrued expenses for loyalty program | $ 0 | $ 6,418 |
Accrued interest | 919,648 | 655,187 |
Accrued vendor liabilities | 1,063,841 | 861,664 |
Accrued sales tax | 37,464 | 47,070 |
Other accrued liabilities | 512,924 | 441,641 |
Total Accrued Liabilities | 3,883,841 | 3,365,562 |
Accrued expenses from sale of manufacturing operations | $ 1,350,545 | $ 1,360,000 |
Convertible Promissory Notes _3
Convertible Promissory Notes and Notes Payable (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2023 | Jun. 30, 2023 | |
Notes payable, net of current portion | $ 4,475,450 | $ 7,746,157 |
Notes payable, current | 4,255,357 | 1,302,021 |
Note payable | 517,099 | 419,443 |
Notes Payable [Member] | ||
Discount on notes payable, current | (15,620) | (24,191) |
Notes payable, current | 4,270,977 | 2,580,379 |
Notes payable, current net | 4,255,357 | 2,556,188 |
Discount on notes payable, long-term | (23,522) | (23,522) |
Notes payable, long-term | 4,498,973 | 7,769,679 |
Notes payable, long-term, net | 4,475,451 | 7,746,157 |
Note payable | 8,769,950 | 9,095,893 |
Related Party Notes Payable [Member] | ||
Discount on related party notes payable, long-term | (55,507) | (70,644) |
Notes payable, long-term | 1,500,000 | 1,500,000 |
Notes payable, long-term, net | 1,444,493 | 1,429,356 |
SBA Note Payable, 30-Year Term Note [Member] | Notes Payable [Member] | ||
Note payable | $ 3,728,970 | 3,910,767 |
Maturity Date | Oct. 06, 2021 | |
Inventory Consignment Note, 60 Monthly Payments [Member] | Notes Payable [Member] | ||
Note payable | $ 1,015,819 | 1,099,592 |
Maturity Date | Jun. 30, 2027 | |
GF Note, 6 annual payments [Member] | Notes Payable [Member] | ||
Note payable | $ 683,968 | 683,968 |
Maturity Date | Nov. 07, 2026 | |
Mortgage Loan, 10-Year Term Note [Member] | Notes Payable [Member] | ||
Note payable | $ 2,781,193 | 2,841,566 |
Maturity Date | Sep. 26, 2032 | |
Promissory Note, 21- month term note [Member] | Notes Payable [Member] | ||
Note payable | $ 560,000 | 560,000 |
Maturity Date | Nov. 22, 2024 | |
Marshall Loan, 2- Year Term Note [Member] | Related Party Notes Payable [Member] | ||
Note payable | $ 1,500,000 | 1,500,000 |
Maturity Date | Jun. 28, 2024 | |
Acquisition Notes [Member] | ||
Total convertible notes payable, acquisition notes payable and notes payable | $ 25,950,418 | 25,889,239 |
Total acquisition notes | 15,000,000 | 15,000,000 |
Discount on acquisition notes payable, current | (93,380) | (93,380) |
Acquisition notes payable, current | 5,750,000 | 5,750,000 |
Acquisition notes payable, current net | 5,656,620 | 5,656,620 |
Discount on acquisition notes payable, long-term | (1,281,503) | (1,644,915) |
Acquisition notes payable, long-term | 9,250,000 | 9,250,000 |
Acquisition notes payable, long-term net | 7,968,497 | 7,605,085 |
Acquisition Notes [Member] | Subordinated Promissory Notes, 12-Month Term Notes [Member] | ||
Note payable | $ 5,750,000 | 5,750,000 |
Maturity Date | Oct. 31, 2023 | |
Acquisition Notes [Member] | Convertible Notes, 36-Month Term Notes [Member] | ||
Note payable | $ 3,500,000 | 3,500,000 |
Maturity Date | Oct. 31, 2025 | |
Acquisition Notes [Member] | Subordinated Promissory Notes, 24-Month Term Notes [Member] | ||
Note payable | $ 5,750,000 | 5,750,000 |
Maturity Date | Oct. 31, 2024 | |
Convertible Notes [Member] | ||
Less current portion of notes payable | $ 0 | 1,254,167 |
Notes payable, net of current portion | 2,150,000 | 895,833 |
Convertible Notes [Member] | Promissory Note, 21- month term note [Member] | ||
Note payable | $ 2,150,000 | $ 2,150,000 |
Maturity Date | Jun. 01, 2026 |
Convertible Promissory Notes _4
Convertible Promissory Notes and Notes Payable (Details 1) | Sep. 30, 2023 USD ($) |
June 30, 2024 | $ 10,020,977 |
June 30, 2026 | 8,456,040 |
June 30, 2025 | 6,484,529 |
June 30, 2027 | 627,277 |
June 30,2028 | 313,045 |
Thereafter | 1,518,082 |
Future payments, notes payable | 27,419,950 |
Note original discount | (1,469,532) |
Future payments on notes payable | 25,950,418 |
Convertible Notes [Member] | |
June 30, 2026 | 2,150,000 |
Future payments, notes payable | 2,150,000 |
Note original discount | 0 |
Future payments on notes payable | 2,150,000 |
Acquisition Notes [Member] | |
June 30, 2024 | 5,750,000 |
June 30, 2026 | 3,500,000 |
June 30, 2025 | 5,750,000 |
Future payments, notes payable | 15,000,000 |
Note original discount | (1,374,883) |
Future payments on notes payable | 13,625,117 |
Related Party Notes Payable [Member] | |
June 30, 2026 | 1,500,000 |
Future payments, notes payable | 1,500,000 |
Note original discount | (55,507) |
Future payments on notes payable | 1,444,493 |
Notes Payable [Member] | |
June 30, 2024 | 4,270,977 |
June 30, 2026 | 1,306,040 |
June 30, 2025 | 734,529 |
June 30, 2027 | 627,277 |
June 30,2028 | 313,045 |
Thereafter | 1,518,082 |
Future payments, notes payable | 8,769,950 |
Note original discount | (39,142) |
Future payments on notes payable | $ 8,730,808 |
Convertible Promissory Notes _5
Convertible Promissory Notes and Notes Payable (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||
Feb. 22, 2023 | Oct. 19, 2022 | Jun. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2023 | Apr. 15, 2022 | Aug. 01, 2021 | |
Proceeds from related party | $ 600,000 | ||||||||||
Proceeds from related party | 3,000,000 | $ 0 | $ 0 | ||||||||
Original principal amount | $ 2,150,000 | ||||||||||
Bears interest rate percentage | 18.11% | ||||||||||
Common stock price per share | $ 4.53 | ||||||||||
Issuance of restricted stock shares | 134,000 | ||||||||||
Conversion price per share | $ 5 | ||||||||||
Promissory note original principal amount interest rate | 10% | ||||||||||
Gain in the change of derivative liability | $ 0 | $ 1,770 | |||||||||
Interest rate | 8.50% | ||||||||||
Line of credit available | 118,001 | $ 118,001 | $ 882,845 | ||||||||
Cygnet Online, LLC [Member] | |||||||||||
Original principal amount | $ 850,000 | ||||||||||
Bears interest rate percentage | 3.50% | ||||||||||
Interest rate | 10.25% | ||||||||||
Interest rate adjustable of prime plus | 2.50% | ||||||||||
First debt payment due date | December 1, 2027 | ||||||||||
SBA Note payable | $ 4,436,900 | ||||||||||
Cygnet Online, LLC | Inventory consignment note | |||||||||||
Interest rate | 3.50% | ||||||||||
Note maturity term period | 60-month | ||||||||||
First debt payment due date | June 30, 2022 | ||||||||||
New England Technology, Inc. [Member] | |||||||||||
Interest rate | 0.50% | ||||||||||
Inventory and accounts receivable | $ 10,000,000 | ||||||||||
Outstanding debt | 118,001 | 118,001 | $ 882,845 | ||||||||
Line of credit available | 6,220,013 | 6,220,013 | |||||||||
Allan Marshall [Member] | |||||||||||
Original principal amount | $ 1,500,000 | 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 | $ 5,750,000 | |||||||||
Holdback amount | $ 3,000,000 | ||||||||||
Description | 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%. 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 | ||||||||||
Gain in the change of derivative liability | $ 1,770 | ||||||||||
Redeem warrants | $ 250,000 | ||||||||||
Interest rate | 4% | 4% | |||||||||
Note Agreement [Member] | |||||||||||
Original principal amount | $ 500,000 | ||||||||||
Holdback amount | $ 500,000 | ||||||||||
Common stock per share | $ 5 | ||||||||||
Total convertible common stock | $ 100,000 | ||||||||||
Mortgage Loan, 10-Year Term Note [Member] | |||||||||||
Original principal amount | $ 1,050,000 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 1 Months Ended | |
Jun. 30, 2022 | Feb. 22, 2023 | |
Related Party Transactions | ||
Loan amount | $ 1,500,000 | |
Interest rate | 8.50% | |
Additional PIK | 3.50% | |
Bears interest rate percentage | 20% |
Equity Transactions (Details Na
Equity Transactions (Details Narrative) - USD ($) | 3 Months Ended | |||
Sep. 30, 2023 | Nov. 15, 2023 | Feb. 22, 2023 | Jun. 30, 2022 | |
Warrants to purchase common stock shares | 375,000 | 125,000 | ||
Common stock issued during period for acquisition value | $ 7,000,000 | |||
Common stock issued during period for value per share | $ 0.001 | $ 0.001 | ||
Common stock issued during period for acquisition | 2,121,213 | |||
Preferred stock, shares issued | 500,000 | 500,000 | ||
Preferred stock, shares outstanding | 500,000 | 500,000 | ||
Cygnet Online, LLC [Member] | ||||
Common stock issued during period for acquisition value | $ 162,727 | |||
Common stock issued during period for value | $ 162,727 | |||
Common stock issued during period for value per share | $ 1.79 | |||
Common stock issued during period, shares | 90,909 | |||
Common stock issued during period for acquisition | 90,909 | |||
Common Stock Shares [Member] | ||||
Warrants to purchase common stock shares | 169,000 | |||
Common stock for prepayment of interest on note payable, per share amount | $ 4.52 | |||
Common stock for prepayment of interest on note payable | $ 607,020 | |||
Common stock for prepayment of interest on note payable, shares | 134,000 | |||
Net proceeds from underwriter's commissions, discounts, and offering expenses payable | $ 6,060,000 | |||
Warrants to purchase common stock per shares amount | $ 4.774 | |||
Common stock issued during period for acquisition value | $ 6,000,000 | |||
Common stock issued during period for acquisition | 1,247,403 | |||
Convertible Preferred Stock [Member] | ||||
Preferred stock, shares issued | 500,000 | |||
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 | |||
Preferred stock, shares outstanding | 500,000 |
Stock Based Compensation (Detai
Stock Based Compensation (Details) - Stock Option [Member] | 3 Months Ended |
Sep. 30, 2023 USD ($) $ / shares shares | |
Beginning balance | shares | 4,839,278 |
Forfeited/expired | shares | 378,000 |
Granted | shares | 0 |
Ending balance | shares | 4,461,278 |
Option exercisable | shares | 4,099,778 |
Weighted average exercise price, Beginning balance | $ / shares | $ 3.31 |
Weighted average exercise price, forfetied | $ / shares | 4.34 |
Weighted average exercise price, granted | $ / shares | 0 |
Weighted average exercise price, Ending balance | $ / shares | 3.17 |
Weighted average exercise price, exercisable | $ / shares | $ 3.03 |
Weighted average remaining contractual life, beginning balance | 6 years 2 months 23 days |
Weighted average remaining contractual life,forfetied | 3 years 9 months 10 days |
Weighted average remaining contractual life, ending balance | 6 years 3 months 18 days |
Weighted average remaining contractual life, exercisable | 6 years 5 months 26 days |
Aggregate intrinsic value beginning | $ | $ 1,342,280 |
Aggregate intrinsic value granted | $ | 0 |
Aggregate intrinsic value ending | $ | 372,856 |
Aggregate intrinsic value Exercisable | $ | $ 372,856 |
Stock Based Compensation (Det_2
Stock Based Compensation (Details Narrative) - USD ($) | 3 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Stock based compensation expense | $ 421,887 | $ 927,326 |
Stock Option [Member] | ||
Grant date | 10 years | |
Estimated forfeitures rate | 0% | |
Stock based compensation expense | $ 421,887 | $ 927,326 |
Weighted average vesting period | 2 years | |
Unrecognized compensation expense related to unvested stock options outstanding | $ 1,032,725 | |
Shares Issued | 4,648,624 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 3 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Income Taxes | ||
Income tax benefit and expense | $ 472,367 | $ 708,201 |
Effective tax rate of federal and state income taxes | 25.83% | |
Losses attributable to federal taxable income | $ 3,097,791 |
Significant Customers (Details)
Significant Customers (Details) | 3 Months Ended |
Sep. 30, 2023 | |
Customer A [Member] | |
Net revenues percentage | 12.56% |
Significant Customers (Details
Significant Customers (Details 1) | Sep. 30, 2023 |
Customer A [Member] | |
Accounts receivable | 22.79% |
Discontinued Operation (Details
Discontinued Operation (Details) - USD ($) | 3 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Intangible assets, net of accumulated amortization | $ 1,472,905 | $ 924,406 |
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 | |||
Sep. 30, 2023 | Sep. 30, 2022 | Jun. 30, 2023 | Mar. 13, 2023 | |
Operating expenses | $ 9,850,003 | $ 8,194,881 | ||
Reserve | $ 931,613 | $ 8,500,000 | ||
Discontinued Operations [Member] | ||||
Advance for payroll | 50,000 | |||
Operating expenses | 652,891 | |||
Management fees | $ 685,600 | |||
Excess working capital | 388,565 | |||
Accrued interest | 247,885 | |||
Subtotal due from Bloomios | 2,024,941 | |||
Reserve | 1,179,498 | |||
Total amounts due from Bloomios | $ 845,443 |
Discontinued Operation (Detai_3
Discontinued Operation (Details 2) - USD ($) | Sep. 30, 2023 | Jun. 30, 2023 |
Net assets | $ 65,245,742 | $ 63,853,067 |
Due from Bloomios | 0 | $ 845,443 |
Investments - Bloomios [Member] | ||
Inventory | 1,090,828 | |
Accounts receivable | 157,200 | |
Accounts payable and accrued liabilities | (475,817) | |
Customer deposits | (133,950) | |
Fixed assets | 208,182 | |
Net assets | 845,443 | |
Due from Bloomios | $ 0 |
Discontinued Operation (Detai_4
Discontinued Operation (Details 3) - USD ($) | 3 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Revenues | $ 27,347,642 | $ 11,218,799 |
Income (loss) from discontinued operations, net of tax | (2,016,339) | (2,809,106) |
Total assets | 65,245,742 | |
Discontinued Operations [Member] | ||
Revenues | 158,147 | 955,762 |
Cost of sales | 11,982 | 730,306 |
Sales general and administrative expenses | 339,205 | 663,778 |
Deprecation and amortization | 0 | 9,795 |
Income (loss) from discontinued operations, net of tax | (193,040) | (448,117) |
Accounts receivable net of allowance for doubtful accounts | 0 | 35,482 |
Fixed assets, net of accumulated depreciation | 0 | 5,195 |
Total assets | 0 | 321,425 |
Total liabilities | $ 0 | $ 652,911 |
Discontinued Operation (Detai_5
Discontinued Operation (Details Narrative) - USD ($) | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 13, 2023 | Oct. 28, 2022 |
Reserve | $ 931,613 | $ 8,500,000 | ||
Common stock, 1,247,402 shares valued at $4.81 per common share, the calculated closing price on October 21, 2022. | $ 20,307 | 20,216 | ||
Discontinued Operations [Member] | ||||
Accounts receivable | 845,443 | |||
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 conversion price per share | $ 5 | |||
Senior secured convertible debenture | $ 4,500,000 | 4,500,000 | ||
Reserve | 1,179,498 | |||
Original principal amount, after OID | 779,117 | |||
Common stock purchase warrant | 2,853,910 | |||
Common stock, 1,247,402 shares valued at $4.81 per common share, the calculated closing price on October 21, 2022. | 8,500,000 | |||
Valuation allowance | 8,500,000 | |||
Unpaid interest | $ 35,385 | |||
Accrued interest | $ 845,443 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | 1 Months Ended | ||||
Nov. 02, 2023 | Feb. 22, 2023 | Jun. 30, 2022 | Nov. 30, 2023 | Nov. 15, 2023 | |
Warrants to purchase shares of common stock | 125,000 | 375,000 | |||
Demand notice of principal and interest amount | $ 2,150,000 | ||||
Original principal amount | $ 560,000 | $ 1,500,000 | |||
Interest rate per annum | 12% | ||||
Principal currently outstanding | $ 2,150,000 | ||||
Transaction One [Member] | |||||
Warrants to purchase shares of common stock | 500,000 | ||||
Original principal amount | $ 2,150,000 | ||||
Interest rate per annum | 12% | ||||
Principal currently outstanding | $ 560,000 | ||||
Warrants to purchase shares of common stock, price per share | $ 1.10 | ||||
Subsequent Event [Member] | |||||
Acquisition amount | $ 3,750,000 | ||||
Payment for acquisition | 2,000,000 | ||||
Acquisition accrued interest amount | 230,000 | ||||
Remaining principal and interest monthly installment | 353,618 | ||||
Demand notice of principal and interest amount | $ 3,835,975 | ||||
Interest rate per annum | 12% | ||||
Principal currently outstanding | $ 1,500,000 | ||||
Warrants to purchase shares of common stock, price per share | $ 1.10 | ||||
Subsequent Event [Member] | Transaction One [Member] | |||||
Warrants to purchase shares of common stock | 500,000 | ||||
Interest rate per annum | 12% | ||||
Principal currently outstanding | $ 2,150,000 | ||||
Warrants to purchase shares of common stock, price per share | $ 1.10 |