Cover
Cover - shares | 6 Months Ended | |
Dec. 31, 2023 | Apr. 25, 2024 | |
Entity Addresses [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Dec. 31, 2023 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2024 | |
Current Fiscal Year End Date | --06-30 | |
Entity File Number | 000-56290 | |
Entity Registrant Name | KeyStar Corp. | |
Entity Central Index Key | 0001832161 | |
Entity Tax Identification Number | 85-0738656 | |
Entity Incorporation, State or Country Code | NV | |
Entity Address, Address Line One | 1645 Pine Tree Ln | |
Entity Address, Address Line Two | Suite 2 | |
Entity Address, City or Town | Sarasota | |
Entity Address, State or Province | FL | |
Entity Address, Postal Zip Code | 34236 | |
City Area Code | (866) | |
Local Phone Number | 783-9435 | |
Title of 12(g) Security | Common Stock, par value of $0.0001 | |
Entity Current Reporting Status | No | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Elected Not To Use the Extended Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 67,821,632 | |
Former Address [Member] | ||
Entity Addresses [Line Items] | ||
Entity Address, Address Line One | 78 SW 7th Street | |
Entity Address, Address Line Two | Suite 500 | |
Entity Address, City or Town | Miami | |
Entity Address, State or Province | FL | |
Entity Address, Postal Zip Code | 33130 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Dec. 31, 2023 | Jun. 30, 2023 | |
Current assets: | |||
Cash | $ 29,399 | $ 333,974 | |
Cash reserved for users | 245,406 | 21,422 | |
Prepaid expenses and other current assets | 622,640 | 1,194,288 | |
Total current assets | 897,445 | 1,549,684 | |
Other assets: | |||
Equipment, net | 2,983 | 3,813 | |
Intangible assets, net | 7,422,829 | 8,067,198 | |
Debt issuance costs, net | 2,933,429 | 5,672,151 | |
Security deposit | 9,683 | 9,683 | |
Total other assets | 10,368,924 | 13,752,845 | |
Total assets | 11,266,369 | 15,302,529 | |
Current liabilities: | |||
Accounts payable and accrued expenses | 1,740,962 | 1,219,018 | |
Accrued expenses - related party | 15,518 | 323,904 | |
Players balances | 1,371,421 | 134,946 | |
Convertible notes – current | 85,407 | ||
Line of credit - related party | 1,135,000 | 3,851,877 | |
Derivative liability | [1] | 2,132,827 | 6,859,452 |
Total current liabilities | 7,474,382 | 14,885,546 | |
Long-term liabilities: | |||
Notes payable - long-term | 850,000 | 850,000 | |
Total long-term liabilities | 850,000 | 850,000 | |
Total liabilities | 8,324,382 | 15,735,546 | |
Commitments and contingencies | |||
Stockholders’ equity (deficit): | |||
Common stock, $0.0001 par value, 475,000,000 shares authorized, 67,821,632 and 41,905,000 shares issued and outstanding as of December 31, 2023, and June 30, 2023, respectively | 6,782 | 4,191 | |
Additional paid-in capital | 29,888,878 | 12,669,930 | |
Accumulated deficit | (26,965,616) | (13,119,081) | |
Total stockholders’ equity (deficit) | 2,941,987 | (433,017) | |
Total liabilities and stockholders’ equity (deficit) | 11,266,369 | 15,302,529 | |
Series A Preferred Stock [Member] | |||
Stockholders’ equity (deficit): | |||
Preferred stock, value | |||
Series B Preferred Stock [Member] | |||
Stockholders’ equity (deficit): | |||
Preferred stock, value | 11,693 | 11,693 | |
Series C Preferred Stock [Member] | |||
Stockholders’ equity (deficit): | |||
Preferred stock, value | 250 | 250 | |
Nonrelated Party [Member] | |||
Current liabilities: | |||
Notes payable | 963,247 | 1,189,694 | |
Related Party [Member] | |||
Current liabilities: | |||
Notes payable | $ 30,000 | $ 1,306,655 | |
[1]The Company has estimated the fair value of these derivatives using the Monte-Carlo model. |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2023 | Jun. 30, 2023 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares designated | 25,000,000 | 25,000,000 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 475,000,000 | 475,000,000 |
Common stock, shares issued | 67,821,632 | 41,905,000 |
Common stock, shares outstanding | 67,821,632 | 41,905,000 |
Series A Preferred Stock [Member] | ||
Preferred stock, shares designated | 2,000,000 | 2,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Series B Preferred Stock [Member] | ||
Preferred stock, shares designated | 12,000 | 12,000 |
Preferred stock, shares issued | 11,693 | 11,693 |
Preferred stock, shares outstanding | 11,693 | 11,693 |
Series C Preferred Stock [Member] | ||
Preferred stock, shares designated | 6,700,000 | 6,700,000 |
Preferred stock, shares issued | 2,499,998 | 2,499,998 |
Preferred stock, shares outstanding | 2,499,998 | 2,499,998 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Gaming loss, net | $ (610,199) | $ (828,822) | ||
Costs of gaming revenue, net | 504,749 | 909,993 | ||
Net gaming loss | (1,114,948) | (1,738,815) | ||
Operating expenses: | ||||
Salaries and wages | 1,740,189 | 1,218,856 | 2,555,530 | 3,082,499 |
Depreciation and amortization | 438,593 | 1,640 | 871,020 | 1,640 |
Sales and marketing | 1,911,180 | 52,566 | 3,127,249 | 131,132 |
General and administrative | 663,553 | 333,156 | 1,371,554 | 730,827 |
Total operating expenses | 4,753,515 | 1,606,218 | 7,925,353 | 3,946,098 |
Other income (expense): | ||||
Other income | 5,011 | |||
Loss on change in fair value of derivative | (721,819) | (392,584) | ||
Loss on extinguishment of debt | (798,873) | (798,873) | ||
Total other income (expense) | (2,919,770) | (20,354) | (4,182,367) | (22,759) |
Net loss from continuing operations, net of income taxes | (8,788,233) | (1,626,572) | (13,846,535) | (3,968,857) |
Net income (loss) from discontinued operations, net of income taxes | (9,380) | |||
Net loss | $ (8,788,233) | $ (1,626,572) | $ (13,846,535) | $ (3,978,237) |
Net loss per common share - basic | $ (0.21) | $ (0.04) | $ (0.33) | $ (0.11) |
Net loss per common share - diluted | $ (0.21) | $ (0.04) | $ (0.33) | $ (0.11) |
Weighted average number of common shares outstanding - basic | 42,750,108 | 39,230,000 | 42,327,554 | 36,075,054 |
Weighted average number of common shares outstanding - diluted | 42,750,108 | 39,230,000 | 42,327,554 | 36,075,054 |
Nonrelated Party [Member] | ||||
Other income (expense): | ||||
Interest expense | $ (56,091) | $ (95,342) | ||
Related Party [Member] | ||||
Other income (expense): | ||||
Interest expense | $ (1,342,987) | $ (20,354) | $ (2,895,568) | $ (27,770) |
Condensed Consolidated Statem_2
Condensed Consolidated Statement of Stockholders' Deficit (Unaudited) - USD ($) | Preferred Stock [Member] Series A Preferred Stock [Member] | Preferred Stock [Member] Series B Preferred Stock [Member] | Preferred Stock [Member] Series C Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Stock Subscriptions Receivable [Member] | Retained Earnings [Member] | Total |
Balance at Jun. 30, 2022 | $ 200 | $ 11,693 | $ 67 | $ 2,980 | $ 327,435 | $ (102,760) | $ (775,205) | $ (535,590) |
Balance, shares at Jun. 30, 2022 | 2,000,000 | 11,693 | 666,666 | 29,800,000 | ||||
Net loss for the period | (2,351,666) | (2,351,666) | ||||||
Receipt of cash from issuance of preferred stock | 102,760 | 102,760 | ||||||
Purchase and redemption of Preferred stock for cash | $ (200) | (21,800) | (22,000) | |||||
Purchase and redemption of preferred stock for cash, shares | (2,000,000) | |||||||
Issuance of Common stock for cash | $ 143 | 1,429,857 | 1,430,000 | |||||
Issuance of common stock for cash, shares | 1,430,000 | |||||||
Issuance of Common stock for acquisition of certain assets of ZenSports | $ 650 | 6,499,350 | 6,500,000 | |||||
Issuance of Common stock for acquisition of certain assets of ZenSports, shares | 6,500,000 | |||||||
Issuance of Common stock for acquisition of certain assets of Ultimate Gamer | $ 150 | 56,286 | 56,436 | |||||
Issuance of Common stock for acquisition of certain assets of Ultimate Gamer, shares | 1,500,000 | |||||||
Issuance of preferred stock for cash | $ 217 | 649,783 | 650,000 | |||||
Issuance of preferred stock for cash, shares | 2,166,665 | |||||||
Issuance of preferred stock as Compensation | $ 298 | 36,442 | 36,740 | |||||
Issuance of preferred stock as compensation, shares | 2,980,000 | |||||||
Balance at Sep. 30, 2022 | $ 11,693 | $ 582 | $ 3,923 | 8,977,353 | (3,126,871) | 5,866,680 | ||
Balance, shares at Sep. 30, 2022 | 11,693 | 5,813,331 | 39,230,000 | |||||
Balance at Jun. 30, 2022 | $ 200 | $ 11,693 | $ 67 | $ 2,980 | 327,435 | (102,760) | (775,205) | (535,590) |
Balance, shares at Jun. 30, 2022 | 2,000,000 | 11,693 | 666,666 | 29,800,000 | ||||
Fair value of vested incentive stock options | ||||||||
Balance at Dec. 31, 2022 | $ 11,693 | $ 582 | $ 3,923 | 9,051,853 | (4,753,443) | 4,314,608 | ||
Balance, shares at Dec. 31, 2022 | 11,693 | 5,813,331 | 39,230,000 | |||||
Balance at Sep. 30, 2022 | $ 11,693 | $ 582 | $ 3,923 | 8,977,353 | (3,126,871) | 5,866,680 | ||
Balance, shares at Sep. 30, 2022 | 11,693 | 5,813,331 | 39,230,000 | |||||
Net loss for the period | (1,626,572) | (1,626,572) | ||||||
Amortization of preferred stock as compensation | 74,500 | 74,500 | ||||||
Balance at Dec. 31, 2022 | $ 11,693 | $ 582 | $ 3,923 | 9,051,853 | (4,753,443) | 4,314,608 | ||
Balance, shares at Dec. 31, 2022 | 11,693 | 5,813,331 | 39,230,000 | |||||
Balance at Jun. 30, 2023 | $ 11,693 | $ 250 | $ 4,191 | 12,669,930 | (13,119,081) | (433,017) | ||
Balance, shares at Jun. 30, 2023 | 11,693 | 2,499,998 | 41,905,000 | |||||
Fair value of vested incentive stock options | 112,720 | 112,720 | ||||||
Fair value of warrant granted for as part of amended related party demand line of credit | 1,753,037 | 1,753,037 | ||||||
Net loss for the period | (5,058,302) | (5,058,302) | ||||||
Balance at Sep. 30, 2023 | $ 11,693 | $ 250 | $ 4,191 | 14,535,687 | (18,177,383) | (3,625,562) | ||
Balance, shares at Sep. 30, 2023 | 11,693 | 2,499,998 | 41,905,000 | |||||
Balance at Jun. 30, 2023 | $ 11,693 | $ 250 | $ 4,191 | 12,669,930 | (13,119,081) | (433,017) | ||
Balance, shares at Jun. 30, 2023 | 11,693 | 2,499,998 | 41,905,000 | |||||
Fair value of vested incentive stock options | 191,094 | |||||||
Balance at Dec. 31, 2023 | $ 11,693 | $ 250 | $ 6,782 | 29,888,878 | (26,965,616) | 2,941,987 | ||
Balance, shares at Dec. 31, 2023 | 11,693 | 2,499,998 | 67,821,632 | |||||
Balance at Sep. 30, 2023 | $ 11,693 | $ 250 | $ 4,191 | 14,535,687 | (18,177,383) | (3,625,562) | ||
Balance, shares at Sep. 30, 2023 | 11,693 | 2,499,998 | 41,905,000 | |||||
Fair value of vested incentive stock options | 78,374 | 78,374 | ||||||
Fair value of warrant granted for as part of amended related party demand line of credit | 1,555,085 | 1,555,085 | ||||||
Net loss for the period | (8,788,233) | (8,788,233) | ||||||
Issuance of common stock upon conversion of debt | 2,591 | 12,955,725 | $ 12,958,316 | |||||
Issuance of common stock upon conversion of debt, shares | 25,916,632 | |||||||
Warrant granted for consulting services | 764,007 | $ 764,007 | ||||||
Balance at Dec. 31, 2023 | $ 11,693 | $ 250 | $ 6,782 | $ 29,888,878 | $ (26,965,616) | $ 2,941,987 | ||
Balance, shares at Dec. 31, 2023 | 11,693 | 2,499,998 | 67,821,632 |
Condensed Consolidated Statem_3
Condensed Consolidated Statement of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (13,846,535) | $ (3,978,237) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Loss on assignment of assets | (4,698) | |
Depreciation and amortization | 871,020 | 1,640 |
Impairment of intangible assets | 48,533 | |
Fair value of vested incentive stock options | 191,094 | |
Discount on related party note payable | 323,345 | |
Loss on extinguishment of debt | 798,873 | |
Loss on change in fair value of derivative | 392,584 | |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other current assets | 571,646 | (45,789) |
Accounts payable and accrued expenses | 521,946 | 858,705 |
Accounts payable and accrued expenses - related party | 239,466 | 14,987 |
Players balances | 1,236,475 | 57,918 |
Net cash used in operating activities | (5,980,248) | (2,935,701) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchase of equipment | (4,980) | |
Cash paid for capitalized software | (225,821) | (261,865) |
Cash paid for acquisition of assets of ZenSports | (750,000) | |
Net cash used in investing activities | (225,821) | (1,016,845) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Repayments of note payable, related party | (35,000) | |
Proceeds from issuance of common stock | 1,430,000 | |
Proceeds from issuance of Series C convertible preferred stock | 650,000 | |
Proceeds from line of credit, related party | 5,501,925 | 1,832,584 |
Proceeds from convertible notes | 850,000 | |
Repayments of note payable, current | (226,447) | |
Cash received in satisfaction of stock subscriptions receivable | 102,760 | |
Net cash provided by financing activities | 6,125,478 | 3,958,344 |
NET CHANGE IN CASH | (80,591) | 5,798 |
CASH AT BEGINNING OF PERIOD | 355,396 | 66,241 |
CASH AT END OF PERIOD | 274,805 | 72,039 |
DISCLOSURE OF CASH AND CASH RESERVED FOR USERS: | ||
CASH | 29,399 | 72,039 |
CASH RESERVED FOR USERS | 245,406 | |
SUPPLEMENTAL INFORMATION: | ||
Interest paid | 34,000 | |
NON-CASH FINANCING AND INVESTING ACTIVITIES: | ||
Common stock issued upon conversion of debt | 10,366,653 | |
Derivative and warrants issued for deferred financing costs | 1,404,771 | |
Payoff of related party note payable with related party line of credit | 1,760,000 | |
ZensportsInc [Member] | ||
NON-CASH FINANCING AND INVESTING ACTIVITIES: | ||
Common stock issued for acquisition of assets of Ultimate Gamer, LLC | 6,500,000 | |
Ultimate Gamer LLC [Member] | ||
NON-CASH FINANCING AND INVESTING ACTIVITIES: | ||
Common stock issued for acquisition of assets of Ultimate Gamer, LLC | 56,436 | |
Series A Preferred Stock [Member] | ||
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Cash paid for repurchase of preferred stock | (22,000) | |
Related Party [Member] | ||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Amortization of debt issuance costs – related party | 1,955,831 | |
Non-cash compensation | 111,240 | |
Nonrelated Party [Member] | ||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Non-cash compensation | $ 764,007 |
OVERVIEW AND ORGANIZATION & SUM
OVERVIEW AND ORGANIZATION & SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
OVERVIEW AND ORGANIZATION & SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 – OVERVIEW AND ORGANIZATION & SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Overview and Organization KeyStar Corp. (the “Company,” “we,” “us” and “our”) was incorporated on April 16, 2020, under the laws of the State of Nevada, as KeyStar Corp. The Company has two wholly owned subsidiaries, one was formed on December 21, 2021, under the State of Nevada, as UG Acquisition Sub, Inc., the second KeyStar TN LLC was formed on December 9, 2022. Currently the singular focus is on business-to-consumer (B2C) sports betting in one targeted jurisdiction, Tennessee. In May 2023, the Company received approval on its Tennessee Sports Gaming Operator license. The Company officially launched its Sports Betting operation in Tennessee in June 2023. Prior to September 15, 2022, our business consisted of the retail sale of masks and similar products, and convention services (together, the prior business). Through our e-commerce sales channel, we sold KN-95 facemasks, disposable facemasks, and disinfectant wipes through an online store in the United States of America. On August 26, 2022, the Company entered into an Asset Purchase Agreement to purchase certain technological assets from ZenSports, Inc. The assets were purchased to allow us to offer gambling and entertainment opportunities through technology, principally the online gaming technology and use of the name ZenSports. We did not acquire all the assets of the Company, the assets we didn’t purchase include, among other assets, ZenSport’s legal entity name “ZenSports, Inc.” and those assets related to ZenSports’ physical casino called the Big Wheel Casino, located in Lovelock, Nevada. See Note 3. On September 12, 2022, we entered into an Asset Purchase Agreement with Excel Members, LLC, a company controlled by Bruce Cassidy, the chairman of our board of directors, to acquire certain assets of Excel Members, LLC. Excel Members, LLC acquired certain assets of a company, Ultimate Gamer, LLC, which was formerly an Esports tournament company, through the assignment for the benefit of the creditor’s court process. See Notes 3 and 12. On September 15, 2022, we executed an assignment and assumption agreement whereby we assigned our e-commerce sales channel and the convention services operating assets to TopSight Corporation (“TopSight”), a company owned by our former Chief Financial Officer Zixiao Chen, effectively discontinuing our historical operations. After the foregoing transactions, we have effectively ceased our prior business operations and assembled a comprehensive platform capability that enables both business-to-business and direct-to-consumer offerings within the online sports betting, eSports, and fintech/digital currency markets. Basis of Presentation The foregoing unaudited interim financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions for Form 10-Q and Regulation S-X as promulgated by the Securities and Exchange Commission (“SEC”). Accordingly, these financial statements do not include all of the disclosures required by generally accepted accounting principles in the United States of America for complete financial statements. These unaudited interim financial statements should be read in conjunction with the audited financial statements and the notes thereto included on Form 10-K for the year ended June 30, 2023, filed on March 8, 2024. In the opinion of management, the unaudited interim financial statements furnished herein include all adjustments, all of which are of a normal recurring nature, necessary for a fair statement of the results for the interim period presented. Operating results for the three and six month periods ended December 31, 2023, are not necessarily indicative of the results that may be expected for the year ending June 30, 2024. The condensed balance sheet at June 30, 2023, has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles in the U.S. for complete financial statements. Restatement of Previously Issued Financials During fiscal 2023, the Company completed its final valuation of the assets purchased from ZenSports on August 26, 2022. Management determined that the value of the assets purchased were understated during the three months ended December 31, 2022 for asset acquisition costs initially expensed, and overstated during the six months ended December 31, 2022 for expenses that were initially included as part of the asset purchase. The value of the assets reflected in the June 30, 2023 audited financial statements was recorded based on this final valuation. See below for adjustments needed for the interim three month and six month periods ended December 31, 2022. In evaluating whether the previously issued Consolidated Financial Statements were materially misstated for the interim period ending December 31, 2022, the Company applied the guidance of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 250, Accounting Changes and Error Corrections, SEC Staff Accounting Bulletin (“SAB”) Topic 1.M, Assessing Materiality, and SAB Topic 1.N, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements and concluded that the effect of the errors on prior period interim financial statements was material; and therefore as noted in SAB Topic 1.N. the Company has restated the December 31, 2022 consolidated financial statements in accordance with FASB ASC 250-10-45-23. SCHEDULE OF CONSOLIDATED FINANCIAL STATEMENT For the three months ended December 31, 2022 For the three months ended December 31, 2022 For the six months ended December 31, 2022 For the six months ended December 31, 2022 As Previously Reported Adjustments As Revised As Previously Reported Adjustments As Revised Salaries and wages $ 1,218,858 $ (2 ) $ 1,218,856 $ 2,051,908 $ 1,030,591 $ 3,082,499 General and administrative $ 414,563 $ (81,407 ) $ 333,156 $ 903,063 $ (172,236 ) $ 730,827 Total net loss $ (1,707,972 ) $ 81,401 $ (1,626,571 ) $ (3,119,027 ) $ (859,210 ) $ (3,978,237 ) Net loss per common share – basic and diluted $ (0.04 ) $ (0.00 ) $ (0.04 ) $ (0.09 ) $ (0.02 ) $ (0.11 ) Principals of Consolidation The consolidated financial statements represent the results of KeyStar Corp. and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated upon consolidation of these entities. Segment Reporting The Company operates as one reportable segment under Accounting Standards Codification “ASC” 280, Segment Reporting. Use of Estimates The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. Significant estimates and assumptions reflected in the financial statements relate to and include, but are not limited to, the valuation of debt and equity instruments, the valuation and expensing of equity awards, accounting for contingencies and uncertainties, purchase price allocations, including fair value estimates of intangible assets, the estimated useful lives of fixed assets and intangible assets, internally developed software costs and accrued expenses. Going Concern The Company’s condensed consolidated financial statements are prepared using the accrual method of accounting in accordance with accounting principles generally accepted in the United States of America and have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities in the normal course of business. As of December 31, 2023, the Company had a working capital deficit of $ 6,576,937 26,965,616 13,846,535 5,980,248 The Company is dependent upon, among other things, achieving a level of profitable operations and receiving additional cash infusions including securing additional lines of credit and raising additional capital through placement of preferred and/or common stock in order to implement its business plan. There can be no assurance that the Company will be successful in order to continue as a going concern. The Company is funding its initial operations by securing a related party line of credit, issuing preferred stock, and issuing common stock through private placements. We cannot be certain that capital will be provided when it is required or in amounts sufficient to meet our operating requirements. Management believes the existing shareholders, the prospective new investors, and future sales will provide the additional cash needed to meet the Company’s obligations as they become due and will allow the development of its core business operations. No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, it may contain restrictions on our operations, in the case of debt financing, or cause substantial dilution for our stockholders, in the case of equity financing. Cash and Equivalents The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Cash includes amounts deposited in financial institutions in excess of insurable Federal Deposit Insurance Company (FDIC) limits. At times throughout the year, the Company may maintain cash balances in certain bank accounts in excess of FDIC limits. At December 31, 2023, the Company’s cash balance did not exceed the FDIC limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk in these accounts. Cash Reserved for Users The Company maintains separate bank accounts to segregate users’ funds from operational funds. User funds are held by KeyStar TN, LLC, a Tennessee limited liability company and wholly owned subsidiary of the Company, which was organized for the purpose of protecting users’ funds in the event of creditor claims. As of December 31, 2023 and June 30, 2023, approximately $ 245,000 135,000 Equipment Equipment is stated at cost, less accumulated depreciation and amortization. Depreciation is calculated using the straight-line method over the asset’s estimated useful life. Expenditures for maintenance and repairs are expensed as incurred. When retired or otherwise disposed of, the related carrying value and accumulated depreciation are removed from the respective accounts, and the net difference less any amount realized from the disposition is reflected in earnings. Estimated useful lives are as follows: SUMMARY OF PLANT AND EQUIPMENT ESTIMATED USEFUL LIVES Equipment 3 5 Intangible assets include developed technology, internally developed software and website development costs, gaming license, and trademarks Internally developed capitalized software and website development and the KeyStar trade name is stated at cost, less accumulated amortization on the balance sheet. Amortization is calculated using the straight-line method over the asset’s estimated useful life. The capitalization policy for the Company is to capitalize intangible assets greater than $ 5,000 Estimated useful lives are as follows: SUMMARY OF ESTIMATED LIVES OF INTANGIBLE ASSETS Developed technology 5 Capitalized software and website development 3 Trade marks 3 5 Developed Technology Developed technology primarily relates to the design and development of sports betting software for online sportsbook. Internally Developed Software Gaming licenses Certain costs, generally legal and professional fees, are required to attain jurisdictional gaming licenses in order to legally operate our core sports betting business. Gaming licenses, with indefinite useful lives, are tested at least on an annual basis as to the assets that have been impaired. Intangible assets determined to have an indefinite useful life are not amortized. Gaming licenses are assets that are determined to have an indefinite useful life are not amortized and are included in intangible assets in the balance sheet. Annual gaming license fees and legal and professional fees required to maintain the licenses are recorded as period costs in the statement of operations. Trademarks Trademarks are carried at cost and are mainly related to branding and promotion, with indefinite useful lives. The Company tests at least on an annual basis whether trademarks with indefinite useful lives are impaired. Intangible assets determined to have an indefinite useful life are not amortized and are included in intangible assets in the balance sheet. The Company conducts its annual impairment tests at June 30 of each year or whenever events and changes in circumstances suggest that the carrying amount may not be recoverable. At June 30, 2023, management determined that the acquired Ultimate Gamer trademarks were fully impaired pursuant to the annual impairment test and, as such has written off the carrying value of trademarks. Impairment of Long-Lived Assets Intangible assets include the cost of developed technology, trademarks and trade names and gaming licenses. Intangible assets are amortized utilizing the straight-line method over their remaining economic useful lives. The Company reviews long-lived assets and intangible assets for potential impairment annually and when events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. In the event the expected undiscounted future cash flows resulting from the use of the asset is less than the carrying amount of the asset, an impairment loss is recorded equal to the excess of the asset’s carrying value over its fair value. If an asset is determined to be impaired, the loss is measured based on quoted market prices in active markets, if available. If quoted market prices are not available, the estimate of fair value is based on various valuation techniques, including a discounted value of estimated future cash flows. In the event that management decides to no longer allocate resources to an asset, an impairment loss equal to the remaining carrying value of the asset is recorded. The Company performed a qualitative test as of June 30, 2023, and determined that the common control developed technology and trademarks acquired would no longer be invested in and would not be generating cash flows for the foreseeable future. Impairment charges of $ 48,533 Lease Commitments The Company has no long-term lease commitments. On October 1, 2023, the Company entered into a lease for office space in Miami, Florida. The lease expires on October 31, 2024 6,500 23,036 44,688 ASC Topic 842 provides for certain practical expedients when adopting the guidance. The Company elected to apply the short-term lease exception; therefore, the Company will not record an ROU asset or corresponding lease liability for leases with an initial term of twelve months or less that are not reasonably certain of being renewed and instead will recognize a single lease cost allocated over the lease term, generally on a straight-line basis. Fair Value of Financial Instruments The Company recognized the fair value of financial instruments in accordance with FASB ASC 820, Fair Value Measurements and Disclosures, “Fair Value Measurements”, which provides a framework for measuring fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The standard also expands disclosures about instruments measured at fair value and establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value: Level 1 - Quoted prices for identical assets and liabilities in active markets; Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, such as quoted market prices for similar assets and liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability. Level 3 - Unobservable inputs that are supported by little to no market activity. The Company’s derivative liabilities are carried at fair value and are classified as Level 3 liabilities. The Company’s financial instruments consist principally of cash, prepaid expenses, accounts payable, accrued expenses, related party notes payable, related party line of credit, and notes payable approximate the fair value because of their short maturities. The Company’s Derivative liabilities are determined based on “Level” 3 inputs, which are significant and unobservable and have the lowest priority. There were no transfers into our out of “Level 3” during the six months ended December 31, 2023, or 2022. SCHEDULE OF DERIVATIVE LIABILITIES Description Total fair value at Quoted prices in Active Significant other observable inputs (level 2) Significant unobservable inputs (level 3) Derivative liability (1) $ 2,132,827 $ - $ - $ 2,132,827 Description Total fair value at Quoted prices in Active Quoted prices in Active Quoted prices in Active Derivative liability (1) $ 6,859,452 $ - $ - $ 6,859,452 (1) The Company has estimated the fair value of these derivatives using the Monte-Carlo model. Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial statement. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could transfer a liability in an orderly transaction between willing and able maker participants. In general, the Company’s policy in estimating fair values is to first look at observable market prices for the identical assets and liabilities in active markets, where available. When these are not available other inputs used to model fair value such as prices of similar instruments, yield curves, volatilities., prepayment speeds, default rates credit spreads, rely first on observable data from active markets. Depending on the availability of observable inputs and prices, different valuation models could produce materially different fair value estimates. The values presented may not represent future fair value as discussed above. Derivative Liabilities The Company accounts for derivative instruments in accordance with ASC 815, “ Derivatives and Hedging 2,132,827 6,859,452 Players Balances Players balances were comprised of sports betting deposits assumed and recorded at the fair market value acquired from ZenSports, Inc. on August 26, 2022, as part of an asset purchase agreement. The balances as of December 31, 2023 and June 30, 2023, are comprised of players betting deposits and contestant prize winnings for eSports and other promotional events. During May 2023, the Company was approved by the state of Tennessee for its Sports Betting license and commenced Sports Betting operations on June 8, 2023, as such, the Company began accepting new sports betting deposits in addition to recording only payouts on the acquired players liability balances. Revenue Recognition The Company records revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). ASC 606 requires companies to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, the standard requires more detailed disclosures to enable readers of the financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The Company determines revenue recognition through the following steps: ● Identify the contract, or contracts, with the customer; ● Identify the performance obligations in the contract; ● Determine the transaction price; ● Allocate the transaction price to performance obligations in the contract; and Recognize revenue when, or as, the Company satisfies performance obligations by transferring the promised good or services. The Company provides online sportsbook betting services with its technical infrastructure to its direct customers. Sportsbook or sports betting involves a user wagering money on an outcome or series of outcomes occurring. When a user’s wager wins, the Company pays the user a pre-determined amount known as fixed odds. Sportsbook revenue is generated by setting odds such that there is a built-in theoretical margin in each sports wagering opportunity offered to users. Sportsbook revenue is generated from users’ wagers net of payouts made on users’ winning wagers and incentives awarded to users. Each wager placed by a user creates a single performance obligation for the Company. The performance obligation is satisfied once the event wagered on has been completed. Any unsettled wagers are recorded as a players balance liability. Net gaming revenue is the aggregate of gaming wins and losses based on results of each event that customers wager bets on. Cost of Revenue Cost of revenue consists primarily of variable costs, principally recurring online platform costs directly associated with revenue-generating activities including payment processing and supporting technology costs, web hosting, regulatory compliance software and Sports Betting privilege taxes. Revenue Recognition from our former business The Company recognizes revenue in accordance with generally accepted accounting principles as outlined in the Financial Accounting Standard Board’s (“FASB”) Accounting Standards Codification (“ASC”) 606, Revenue From Contracts with Customers, which consists of five steps to evaluating contracts with customers for revenue recognition: (a) identify the contract with the customer; (ii) identity the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price; and (v) recognize revenue when or as the entity satisfied a performance obligation. Revenue recognition for our prior business occurred at the time we satisfy a service performance obligation to our customers or when control of product transfers to customers upon shipment, provided there are no material remaining performance obligations required of the Company or any matters of customer acceptance. We only recorded revenue when collectability was probable. All payments are received upon order of services and prior to delivery of the product, so we have no accounts receivable. The Company’s prior business was providing quality merchandise through its former online store in the United States of America. Due to the COVID-19 pandemic, the Company was focusing on providing disposable face masks and KN-95 face masks at affordable prices. Customers ordered and paid for the products through the online store, when the Company confirmed the order and payment, the Company delivered the product through common carriers, at which point the Company recognized revenue, as this is when our performance obligation is satisfied. The Company recorded actual sales returns when the customers returned the products. The transaction price has not been affected by returns as the Company did have significant returns. All prior business operations, including sales and revenues, are included in the net income (loss) from discontinued operations, net of income taxes in the statement of operations. For the six months ended December 31, 2023, and 2022, the Company recognized sales of products $ 0 536 Cost of Revenues from our former business Costs of revenues from our prior business primarily consisted of outsourced vendors for both types of revenues. The Company includes product costs (i.e., material, direct labor, and overhead costs) and shipping and handling expenses in cost of revenues. All prior business operations, including cost of revenues, are included in the net income (loss) from discontinued operations, net of income taxes in the statement of operations. Stock -based Compensation The Company records stock-based compensation in accordance with ASC 718 “Compensation- Stock Compensation”, using the fair value method. All transactions in which services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. The Company accounts for Stock-based compensation awards issued to non-employees for services as prescribed by ASC 718, at either the fair value of the services rendered or the instruments issued in exchange for such services, whichever is more readily determinable, using the measurement date guidelines enumerated in Accounting Standards Updated (“ASU”) 2018-07. The Company uses the Black Scholes pricing model to calculate the fair value of stock-based awards. This model is affected the Company’s stock price as well as assumptions regarding a number of subjective variables. These subjective variables include, but are not limited to, the Company’s expected stock price volatility over the term of the awards, and actual projected employee stock option exercise behaviors. The value of the portion of the award that is ultimately expected to vest is recognized as an expense in the consolidated statement of operations over the requisite service period. Sales and Marketing Sales and marketing expenses consist primarily of expenses associated with advertising and costs related to free to play contests. Advertising costs are expensed as incurred and are included in sales and marketing expense in our condensed consolidated unaudited statements of operations. Advertising costs include those costs associated with communicating with potential customers and generally use some form of media, such as internet, radio, print, television, or billboards. Advertising costs also include costs associated with strategic league and team partnerships. During the three months ended December 31, 2023 and 2022, advertising costs calculated in accordance with U.S. GAAP were $ 1,878,156 27,858 3,068,166 44,313 General and Administrative General and administrative expenses consist of costs not related to sales and marketing, product and technology or revenue. General and administrative costs include professional services (including legal, regulatory, audit and accounting), rent and facilities maintenance, contingencies and insurance. Income Taxes The Company accounts for income taxes under an asset and liability approach. This process involves calculating the temporary and permanent differences between the carrying amounts of the assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The temporary differences result in deferred tax assets and liabilities, which would be recorded on the Company’s balance sheet in accordance with ASC 740, which established financial accounting and reporting standards for the effect of income taxes. The Company must assess the likelihood that its deferred tax assets will be recovered from future taxable income, and, to the extent the Company believes that recovery is not likely, the Company must establish a valuation allowance. Changes in the Company’s valuation allowance in a period are recorded through the income tax provision on the statements of operations. ASC 740-10 clarifies the accounting for uncertainty in income taxes recognized in an entity’s financial statements and prescribes a recognition threshold and measurement attributes for financial statement disclosure of tax positions taken or expected to be taken on a tax return. Under ASC 740-10, the impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is more likely than not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained Earnings (loss) per Share Basic net (loss) earnings per common share is computed by dividing net (loss) income by the weighted average number of vested common shares outstanding during the period. Diluted net income per common share is computed by dividing net income by the weighted average number vested of common shares, plus the net impact of common shares (computed using the treasury stock method), if dilutive, resulting from the exercise of dilutive securities. In periods when losses are reported, the weighted-average number of common shares outstanding excludes common stock equivalents because their inclusion would be anti-dilutive. As of December 31, 2023 and June 30, 2023 the Company excluded the common stock equivalents summarized below, which entitle the holders thereof to ultimately acquire shares of common stock, from its calculation of earnings per share, as their effect would have been anti-dilutive. SCHEDULE OF EARNINGS (LOSS) PER SHARE ANTI-DILUTIVE For the six months ended For the year ended Stock Options 6,250,000 6,500,000 Series A Preferred Shares - - Series B Preferred Shares 1,169,300 1,169,300 Series C Preferred Shares 8,333,327 8,333,327 Warrants 11,043,479 5,600,000 Shares issuable upon conversion of convertible notes 2,125,000 - Shares issuable upon conversion of line of credit 2,851,812 17,130,907 Total potentially dilutive shares 31,772,918 38,733,534 Recent Accounting Pronouncements All recently issued ASUs by the FASB have no material impact on the Company’s consolidated results of operations or financial position. |
EQUIPMENT
EQUIPMENT | 6 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
EQUIPMENT | NOTE 2 - EQUIPMENT Equipment and Website development costs of $ 7,903 26,637 The Company’s equipment consisted of the following as of: SCHEDULE OF EQUIPMENT, CAPITALIZED SOFTWARE AND WEBSITE December 31, 2023 June 30, 2023 Equipment $ 4,980 $ 4,980 Total 4,980 4,980 Less: accumulated depreciation 1,997 1,167 Equipment, net $ 2,983 $ 3,813 Depreciation expense of equipment during the three months ended December 31, 2023, and 2022 was $ 415 515 830 515 |
LONG LIVED INTANGIBLE ASSETS
LONG LIVED INTANGIBLE ASSETS | 6 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
LONG LIVED INTANGIBLE ASSETS | NOTE 3 - LONG LIVED INTANGIBLE ASSETS The Zensports, Inc. assumed developed technology and trademark were recorded and allocated using relative fair value, based on a third-party valuation in accordance with the provisions of ASC 350 of the acquired costs from ZenSports, Inc. on August 26, 2022, as part of an asset purchase agreement. There was no impairment recorded for these assets during the three and six months ended December 31, 2023, or the year that ended June 30, 2023. See Note 1. The Ultimate Gamer developed technology and trademarks were acquired on September 12, 2022, as part of the acquisition of the assets of Ultimate Gamer, LLC in a common control transaction. The developed technology and trademarks acquired were recorded at the net book value of Ultimate Gamer, LLC on the date of close, which included the depreciation for September 2022. As of June 30, 2023, as part of the repositioning of the Company’s operations, management determined that acquired developed technology and trademarks of Ultimate Gamer, LLC would no longer be invested in and would not be generating cash flows for the foreseeable future and as such fully expensed the assets as part of the Company’s annual impairment analysis. The remaining value of the developed technology (website) of $ 26,637 21,896 Gaming license costs are primarily comprised of legal and professional fees associated with our application for a gaming license in Tennessee. There was no impairment recorded during the three and six months ended December 31, 2023, and 2022, respectively. See Note 1. Long-lived and other intangible assets held, net of impairment are comprised of the following at: SCHEDULE OF LONG-LIVED AND OTHER INTANGIBLE ASSETS December 31, 2023 June 30, 2023 Developed technology $ 7,747,459 $ 7,521,638 Tradenames and trademarks 560,999 560,999 Gaming licenses 135,837 135,837 Impairment charges (48,533 ) (48,533 ) Total 8,395,762 8,169,941 Less: accumulated amortization (972,933 ) (102,743 ) Net carrying value $ 7,422,829 $ 8,067,198 Amortization expense of business intellectual property for three months ended December 31, 2023, and 2022, was $ 411,224 0 26,955 0 816,280 0 53,910 0 |
PLAYERS BALANCES
PLAYERS BALANCES | 6 Months Ended |
Dec. 31, 2023 | |
PLAYERS BALANCES | NOTE 4 - PLAYERS BALANCES Players balances were comprised of sports betting deposits assumed and recorded at the fair market value acquired from ZenSports, Inc. on August 26, 2022, as part of an asset purchase agreement. During May 2023, the Company was approved by the state of Tennessee for its Sports Betting license and commenced Sports Betting operations on June 8, 2023, as such, the Company began accepting new sports betting deposits in addition to recording only payouts on the acquired players liability balances. Players balances were $ 1,371,421 134,946 |
CONVERTIBLE DEBT
CONVERTIBLE DEBT | 6 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
CONVERTIBLE DEBT | NOTE 5 - CONVERTIBLE DEBT On August 23, 2023, the Company entered into a Convertible Note Purchase Agreement and a Convertible Promissory Note with an unrelated party in the principal amount of $ 200,000 500,000 150,000 2,000,000 12 .0001 80 1.00 The conversion option was valued by the Company using the Monte-Carlo model. The following are the significant assumptions used in the Monte-Carlo model. See Note 8. SCHEDULE OF SIGNIFICANT ASSUMPTIONS CONVERTIBLE DEBT Expected volatility Risk-free interest rate Expected dividend yield Expected life (in years) At September 1, 2023 68.2 % 4.87 % 0 % 2.00 |
NOTES PAYABLE AND NOTES PAYABLE
NOTES PAYABLE AND NOTES PAYABLE - RELATED PARTY | 6 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE AND NOTES PAYABLE - RELATED PARTY | NOTE 6 – NOTES PAYABLE AND NOTES PAYABLE - RELATED PARTY On April 27, 2020, the Company executed a promissory note with Zixiao Chen, our former Chief Financial Officer for $ 35,000 10 7,853 On December 30, 2020, the Company executed a promissory note with TopSight, a company owned by Zixiao Chen, our former Chief Financial Officer for cash proceeds of $ 30,000 10 As of December 31, 2023, and June 30, 2023, the principal balance is $ 30,000 30,000 8,996 7,496 750 750 1,500 1,500 On February 27, 2023, the Company entered into Stock Redemption and Purchase Agreement with John Linss, our former Chief Executive Officer and former member of the board of directors, and his wholly owned Corespeed, LLC for the purchase of Series C Convertible Preferred Stock owned by Linss’ Corespeed, LLC. The Company paid $ 300,000 1,700,000 5 850,000.00 1,700,000 850,000 72,176 43,665 0 21,969 0 On May 5, 2023, the Company entered into a Promissory Note with Excel Family Partners, LLLP, a company controlled by Bruce Cassidy (our former Chief Executive Officer through June 14, 2022) the Chairman of our Board of Directors in the principal amount of $ 1,600,000 November 4, 2023 160,000 1,600,000 0.25 The note payable the warrants were issued in a single transaction and as such were allocated among the among the freestanding instruments identified. The warrants were valued by the Company using the Black-Scholes option pricing model with the allocated fair value of $ 485,017 On September 14, 2023, the principal balance of $ 1,600,000 160,000 On May 24, 2023, the Company entered into a short term note payable with a premium finance company to fund their technology services and cyber liability insurance. The total premiums, taxes and fees financed was $ 434,250 8.88 72,994 37,744 113,247 |
LINE OF CREDIT - RELATED PARTY
LINE OF CREDIT - RELATED PARTY | 6 Months Ended |
Dec. 31, 2023 | |
Line Of Credit - Related Party | |
LINE OF CREDIT - RELATED PARTY | NOTE 7- LINE OF CREDIT - RELATED PARTY On February 22, 2022, the Company executed a non-revolving line of credit demand note for $ 250,000 5 On August 16, 2022, the non-revolving line of credit demand note was increased to $ 2,000,000 On February 24, 2023, the Company entered into a second amended and restated discretionary non-revolving line of credit demand note with Excel in the principal amount of not more than $ 4,000,000 All loans made under the Note accrue interest at a fixed rate per annum equal to 15.0 The amended note includes a conversion option that Excel may, at its sole option, convert all or any portion of the debt into fully paid and non-assessable shares of common stock of the Company’s common stock.at a conversion price in an amount equal to the product of the lowest recent price multiplied by 80%. The lowest price is defined, as of each applicable conversion rate, the lowest price per share that Company has sold one or more Shares to an investor or lender within the 24-month period prior to the applicable conversion date; provided, however, that if no shares were sold within such 24-month period, the lowest recent price will be $ 0.50 The following are the significant assumptions used in the Monte-Carlo model. SCHEDULE OF FAIR VALUE OF DERIVATIVES Expected volatility Risk-free interest rate Expected dividend yield Expected life (in years) At February 24, 2023 108.5 % 4.84 % 0 % 1.77 The note includes a common stock warrant exercisable up to 4,000,000 0.25 February 1, 2028 The following are the significant assumptions used in the Black-Scholes model: SCHEDULE OF FAIR VALUE OF DERIVATIVES Expected volatility Risk-free interest rate Expected dividend yield Expected life (in years) At February 24, 2023 111.60 % 4.20 % 0 % 2 The amended non-revolving line of credit was exchanged and modified on substantially different terms from the non-revolving line of credit demand note it replaced and as such is treated as a debt modification. The Company incurred debt issuance costs of $ 7,624,859 On July 18, 2023, the Company entered into a Third Amended and Restated Discretionary Non-Revolving Line Of Credit Demand Note with Excel Family Partners, LLLP, (“Excel”) in the principal amount of not more than $ 5,000,000 4,000,000 15.0 1,000,000 0.25 0.50 The following are the significant assumptions used in the Black-Scholes model for the warrants: SCHEDULE OF SIGNIFICANT ASSUMPTIONS Expected volatility Risk-free Expected Expected life At July 18, 2023 83.4 % 4.62 % 0 % 4.8 At the date of the third amendment, the remaining unamortized debt issuance costs were $ 5,393,193 5,785,727 On September 14, 2023, the Company entered into a Fourth Amended and Restated Discretionary Non-Revolving Line Of Credit Demand Note with Excel Family Partners, LLLP, a Florida limited liability limited partnership (“Excel”) in the principal amount of not more than $ 10,000,000 5,000,000 3,400,000 0.25 0.50 The following are the significant assumptions used in the Black-Scholes model for the warrants: Expected volatility Risk-free Expected Expected life At September 13, 2023 86.5 % 4.60 % 0 % 4.95 At the date of the fourth amendment, the remaining unamortized debt issuance costs were $ 5,308,162 6,668,666 As of the date of the Fourth Amended and Restated Discretionary Non-Revolving Line of Credit Demand Note, the aggregate outstanding principal balance of all loans was $ 6,888,801 4,251,877 500,000 376,924 1,760,000 1,600,000 250,000 On December 27, 2023, a total of $ 1,540,000 10,366,653 0.40 0.50 80 25,916,632 8,826,653 22,066,632 1,540,000 3,850,000 The offer, sale and issuance of the Conversion Shares were deemed to be exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), in reliance on Section 4(a)(2) of the Securities Act and/or Rule 506(b) of Regulation D promulgated thereunder, as transactions by an issuer not involving a public offering. The converting debt holders acquired the Conversion Shares for investment only and not with a view to or for sale in connection with any distribution thereof and appropriate legends were affixed to the Conversion Shares upon issuance thereof. On December 29, 2023, the Company entered into a Fifth Amended and Restated Discretionary Non-Revolving Line Of Credit Demand Note with Excel Family Partners, LLLP, a Florida limited liability limited partnership (“Excel”) in the principal amount of not more than $ 2,000,000 10,000,000 2,460,000 0.25 0.50 A total of $ 10,366,653 0.40 0.50 80 1,135,000 The following are the significant assumptions used in the Black-Scholes model for the warrants: Expected volatility Risk-free Expected Expected life At December 27, 2023 153.5 % 3.83 % 0 % 4.71 At December 31 2023, the remaining unamortized debt issuance costs were $ 2,933,427 1,020,584 1,955,831 |
DERIVATIVE LIABILITIES
DERIVATIVE LIABILITIES | 6 Months Ended |
Dec. 31, 2023 | |
Derivative Liabilities | |
DERIVATIVE LIABILITIES | NOTE 8 – DERIVATIVE LIABILITIES On February 24, 2023, July 18, 2023 and September 14, 2023,the Company entered into the second, third and fourth amended and restated discretionary non-revolving line of credit demand notes (“LOC”) with a common control owner (See Note 7). On August 23, 2023, August 28, 2023 and September 1, 2023, the Company entered into a Convertible Note Purchase Agreement and a Convertible Promissory Note with three unrelated parties (See Note 5). The LOC and Convertible Promissory Notes contain conversion options that qualify for embedded derivative classification. The fair value of the liability is re-measured at the end of every reporting period and the change in fair value is reported in the statement of operations as a gain or loss on change in fair value of derivatives. The table below sets forth a summary of the changes in the fair value of the Company’s Level 3 financial liabilities for the six months ended December 31, 2023: SCHEDULE OF FAIR VALUE OF FINANCIAL LIABILITIES Balance at June 30, 2023 $ 6,859,452 Embedded conversion option of convertible debt 2,169,365 Derivative liability extinguished upon conversion of debt (Note 7) (7,288,574 ) Change in the fair value of the embedded conversion option 392,584 Balance at December 31, 2023 $ 2,132,827 The Company uses Level 3 inputs for its valuation methodology for the embedded conversion option liabilities as their fair values were determined by using Monte-Carlo model based on various assumptions. Significant changes in any of these inputs in isolation would result in a significant change in the fair value measurement. As required, these are classified based on the lowest level of input that is significant to the fair value measurement. The following table shows the assumptions used in the calculations: SCHEDULE OF FAIR VALUE MEASUREMENT Expected volatility Risk-free interest rate Expected dividend yield Expected life (in years) At June 30, 2023 108 114 % 4.20 5.18 % 0 % .5 2 At December 31, 2023 64.20 68.90 % 4.42 4.60 % 0 % 1.34 1.67 On December 28, 2023, upon the conversion of the line of credit of $ 10,366,653 7,288,574 5,495,785 798,874 |
STOCKHOLDERS_ DEFICIT
STOCKHOLDERS’ DEFICIT | 6 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
STOCKHOLDERS’ DEFICIT | NOTE 9 - STOCKHOLDERS’ DEFICIT The Company is authorized to issue 475,000,000 $0.0001 25,000,000 $0.0001 2,000,000 12,000 6,700,000 The Series A Convertible Preferred Stock has a liquidation preference of $0.10 100 100 Common Stock at a conversion rate of one hundred ( 100 The Series B Convertible Preferred Stock has a liquidation preference of $1.00 100 $6,000,000 The Series C Convertible Preferred Stock has a liquidation preference of $0.30 6 $6,000,000 Series A Convertible Preferred Stock On August 30, 2022, the Series A shares owned by TopSight, a company owned by Ms. Chen, the Company’s former Chief Financial Officer, were redeemed and the Company retired all of the Series A shares. During the six months ended December 31, 2023, there were no no Series B Convertible Preferred Stock During the six months ended December 31, 2023 and 2022, there were no 11,693 11,693 Series C Convertible Preferred Stock On July 11, 2022, the Company sold 2,166,666 $0.30 $650,000 1,000,000 833,332 333,333 On August 16, 2022, John Linss our former Chief Executive Officer and former member of our board of directors was issued 2,980,000 $0.30 Common Stock On August 26, 2022, we issued 6,500,000 1,500,000 On August 26, 2022, we closed on a private offering of our common stock where we sold an aggregate of 750,000 $1.00 $750,000 From August 26 to September 26, 2022, we had multiple closings on our private offering whereby we issued a total of 680,000 $1.00 $250,000 $80,000 $100,000 $250,000 $680,000 On December 28, 2023, a total of 25,916,632 $10,366,653 12,958,316 .50 2,591,663 |
STOCK OPTIONS
STOCK OPTIONS | 6 Months Ended |
Dec. 31, 2023 | |
Retirement Benefits [Abstract] | |
STOCK OPTIONS | NOTE 10 - STOCK OPTIONS On December 28, 2021, the board of directors (the “Board”) approved the 2021 stock option plan (“2021 Plan”). The 2021 Plan was subject to the approval of our stockholders within 12 months of the Board’s approval. We did not seek approval of the 2021 Plan from our stockholders on or before December 28, 2022, and no awards of any type were granted under the 2021 Plan. On April 10, 2023, the Board terminated the 2021 Plan and approved a new stock option plan for our director’s officers, employees, advisors, and contractors containing the same terms and conditions as the 2021 Plan (the “2023 Plan”). The 2023 Plan is also subject to approval of our stockholders within 12 months from the date of the Board’s approval. In connection with the approval of the 2023 Plan, the Board granted Incentive Stock Options (“ISOs”) and Non statutory Stock Options (“NSOs”) under the 2023 Plan to employees and advisors of the Company to purchase a total of 3,250,000 $0.50 The 2023 Plan provides eligible participants with benefits consisting of one or more of the following: ISOs, NSOs, and bonuses in the form of our common stock (“Stock Bonuses”). The Board or a committee of directors will administer the 2023 Plan and determine what employees or officers will receive an award under the 2023 Plan. ISOs, which are intended to be compliant with Section 422 of the Internal Revenue Code, may be awarded only to our employees. NSOs and Stock Bonuses are not subject to Section 422 of the Internal Revenue Code and can be awarded to employees and non-employees. As with the 2021 Plan, the aggregate number of shares of our authorized but unissued common stock that can be awarded under the 2023 Plan is 5,960,000 10 Below is a table summarizing the changes in stock options outstanding for the six months ended December 31, 2023: SCHEDULE OF OUTSTANDING AND EXERCISABLE OPTIONS Number of Options Weighted Average Exercise Price ($) Outstanding at June 30, 2023 3,250,000 $ 0.50 Granted - - Exercised - - Expired - - Forfeited 125,000 0.50 Outstanding at December 31, 2023 3,125,000 $ 0.50 Exercisable at December 31, 2023 1,231,944 $ 0.50 A total of 125,000 As of December 31, 2023, all outstanding stock options were issued according to the Company’s 2023 Plan. There are 2,835,000 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 11 - COMMITMENTS AND CONTINGENCIES Commitments and Contingencies are as follows: On January 10, 2023, the Board appointed Mark Thomas (“Thomas”) as the new Chief Executive Officer appointment, Thomas has served as the Company’s Chief Marketing Officer and Chief Product Officer since June 2022. In lieu of an employment agreement, Thomas received a written offer letter (the “Offer”) that states he will receive an annual salary of $380,000 On February 6, 2023, the Company entered into a supplement to the Offer agreement with Mr. Thomas that sets forth the following terms and conditions relating to the Incentive Compensation. Within 60 calendar days after the Company has $1,000,000 1. In the event that the Company receives a sports betting license (or equivalent) in the State of Tennessee, within 30 days after the issue date, Mr. Thomas will receive a cash bonus of $50,000 2. For the next 24 months, in each event that the Company receives a sports betting license (or equivalent) in a new jurisdiction (other than the State of Tennessee), within 30 days after the issue date, Mr. Thomas will receive a cash bonus in an amount equal to the lesser of (a) $ 100,000 0.01 3. If the net loss of the Company for its 2022-2023 fiscal year, as determined by the Company’s Chief Financial Officer, is less than $6,197,719 8 Mr. Thomas’ employment with the Company will continue to be “at will.”. If said employment with Company is terminated without “Cause,” he will be entitled to severance through continued payments of his current annual base salary of $380,000 During May 2023, Mr. Thomas was paid a $50,000 Effective October 31, 2023, Mark Thomas resigned as the Company’s Chief Executive Officer, Principal Executive Officer, President, Chief Technology Officer, interim Chief Financial Officer and interim Treasurer. The Company entered into a Consulting Agreement with Thomas, effective November 1, 2023 for professional services. As part of the Consulting Agreement, Thomas will receive bi-monthly compensation at a rate of $200 On November 2, 2023, the Board appointed Walter Tabaschek as the new Chief Financial Officer, Principal Financial and Accounting Officer and Treasurer of the Company. Tabaschek’s employment began on November 17, 2023. The Company did not enter into an Employment Agreement with Tabaschek. He received a simple offer letter stating that he will receive an annual salary of $275,000 350,000 During August 2022, the Company entered into a 60-month contract extension with a vendor for hosting services in Nevada with the intention of using said service in multiple domestic and international jurisdictions pursuant to the Company’s expansion plans at that time. During May 2023, the Company was informed by the Tennessee Sports Wagering and Advisory Council that the vendor was not approved for hosting Sports Betting technology in Tennessee. Since the services cannot be used in Tennessee and the Company is no longer actively engaged in seeking gaming licensing in other domestic or international jurisdictions, we have entered into negotiations to settle the remaining contract. We have not come to a settlement agreement with the vendor and as such we recorded a $262,834 During May 2023, the Company was issued $500,000 $12,500 Legal matter contingencies The Company believes, based on current knowledge and after consultation with counsel, that it is not currently party to any material pending proceedings, individually or in the aggregate, the resolution of which would have a material effect on the Company. Provisions for losses are established in accordance with ASC 450, “Contingencies” when warranted. Once established, such provisions are adjusted when there is more information available about an event that occurs requiring a change. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Dec. 31, 2023 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 12 - RELATED PARTY TRANSACTIONS Transactions with our former and current Chief Executive Officers: On June 14, 2022, the Company entered into an employment agreement with John Linss, as the Company’s former Chief Executive Officer. The agreement was amended on August 16, 2022. The agreement and amended agreement work in tandem and provide for a 3 500,000 112,000 On July 11, 2022, the Company sold 333,333 0.30 100,000 Effective January 10, 2023, John Linss, our former Chief Executive Officer and former member of our board of directors resigned. As part of the separation agreement and release as of that date, the Parties agreed that Mr. Linss through his ownership of CoreSpeed, LLC has rights set forth in the Award Agreement concerning the restricted preferred series C convertible stock that the Parties will consider Linss’ resignation a Vesting Acceleration Event of the restricted series C convertible stock. Linss and CoreSpeed, LLC, as part of the above-noted separation and release agreement, have agreed to sell and KeyStar has agreed to purchase all of the Subject Shares for a total of $ 2,000,000 On January 10, 2023, the Board appointed Mark Thomas (“Thomas”) as the new Chief Executive Officer. In lieu of an employment agreement, Thomas received a written offer letter (the “Offer”) that states he will receive an annual salary of $ 380,000 Transactions with our former Chief Financial Officer: In July, 2022, the Company’s former Chief Financial Officer, Zixiao Chen was paid $ 20,000 On April 27, 2020, the Company executed a promissory note with our former Chief Financial Officer for $35,000 10 On July 26, 2022, the Company made 3 payments to the Company’s former Chief Financial Officer totaling $ 77,000 2,000,000 - On July 26, 2022, the Company paid off $ 17,837 20,000 2,163 - On July 26, 2022, the Company paid off the promissory note held by the Company’s former Chief Financial Officer for $ 35,000 - On July 26, 2022, the Company redeemed and retired the 2,000,000 22,000 Transactions with our former Chief Executive Officer and current Chairman of our Board of Directors: On July 11, 2022, the Company sold 1,000,000 0.30 300,000 On August 16, 2022, the non-revolving line of credit demand note with Excel Family Partners, LLLP (“Excel”) a company controlled by Bruce Cassidy (our former Chief Executive Officer through June 14, 2022) the Chairman of our board of directors, which can exert significant influence over the Company, was increased to $ 2,000,000 On February 24, 2023, the Company entered into a second amended and restated discretionary non-revolving line of credit demand note with Excel in the principal amount of not more than $ 4,000,000 4,000,000 On May 5, 2023, the Company entered into a Promissory Note with Excel Family Partners, LLLP, a company controlled by Bruce Cassidy (our former Chief Executive Officer through June 14, 2022) the Chairman of our Board of Directors in the principal amount of $ 1,600,000 November 4, 2023 160,000 1,600,000 0.25 On July 18, 2023, the Company entered into a Third Amended and Restated Discretionary Non-Revolving Line Of Credit Demand Note with Excel Family Partners, LLLP, (“Excel”) in the principal amount of not more than $ 5,000,000 1,000,000 On September 14, 2023, the Company entered into a Fourth Amended and Restated Discretionary Non-Revolving Line Of Credit Demand Note with Excel Family Partners, LLLP, a Florida limited liability limited partnership (“Excel”) in the principal amount of not more than $ 10,000,000 3,400,000 A total of $ 10,366,653 0.40 0.50 80% On December 29, 2023, the Company entered into a Fifth Amended and Restated Discretionary Non-Revolving Line Of Credit Demand Note with Excel Family Partners, LLLP, a Florida limited liability limited partnership (“Excel”) in the principal amount of not more than $ 2,000,000 2,460,000 On September 12, 2022, we entered into an asset purchase agreement with Excel Members, LLC, a company controlled by Bruce Cassidy, (our former Chief Executive Officer through June 14, 2022) the Chairman of our Board of Directors, to acquire certain assets of a company acquired previously by Excel through an assignment for the benefit of creditors. Ultimate Gamer, LLC (“UG”), which was formerly in the business of organizing and operating in-person and online video game competitions tournaments, originally owned these assets. The purchased assets included the brand name Ultimate Gamer. We purchased a portion of UG assets, consisting primarily of intellectual property, including trademarks, domain name registrations, and UG’s databases of users and gamers for 1,500,000 Other related party transactions: On July 11, 2022, the Company sold 833,332 0.30 250,000 25 Effective January 1, 2023, the Company assumed the office lease of a related party, ZenSports, Inc. The lease expired on September 30, 2023, and had a monthly lease payment of $ 6,500 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Dec. 31, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 13 - SUBSEQUENT EVENTS In accordance with ASC 855-10, the Company has analyzed its operations subsequent to December 31, 2023, to the date, these financial statements were issued, and as of April 24, 2024, there were no other material subsequent events to disclose in these financial statements. On February 4, 2024, the entered into a lease for office space in Sarasota, Florida. The lease expires on February 1, 2025, and has a monthly lease payment of $ 1,600 On January 8, 2024 the Company sold 400,000 300,000 On February 19, 2024, the Company entered into a first amendment to the $1,700,000 $425,000 $59,665 twenty-four months On February 23, 2024, a Complaint and Demand for Arbitration was filed against us with the American Arbitration Association, Las Vegas Regional Office. The complaint alleges that the Company made misrepresentations of material facts and engaged in deceptive trade practices in connection with the purchase of certain assets pursuant to an asset purchase agreement dated August 26, 2022. The Claimant is requesting an award of recission damages in the amount of $6,500,000 On March 1, 2024, the board of directors of the Company appointed James Mackey as the Company’s new Chief Financial Officer, Principal Financial and Accounting Officer and Treasurer, effective immediately. He received an offer letter stating that he will receive an annual salary of $ 275,000 On April 24, 2024, the Company borrowed an additional $ 475,000 2,000,000 5,685,000 |
OVERVIEW AND ORGANIZATION & S_2
OVERVIEW AND ORGANIZATION & SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The foregoing unaudited interim financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions for Form 10-Q and Regulation S-X as promulgated by the Securities and Exchange Commission (“SEC”). Accordingly, these financial statements do not include all of the disclosures required by generally accepted accounting principles in the United States of America for complete financial statements. These unaudited interim financial statements should be read in conjunction with the audited financial statements and the notes thereto included on Form 10-K for the year ended June 30, 2023, filed on March 8, 2024. In the opinion of management, the unaudited interim financial statements furnished herein include all adjustments, all of which are of a normal recurring nature, necessary for a fair statement of the results for the interim period presented. Operating results for the three and six month periods ended December 31, 2023, are not necessarily indicative of the results that may be expected for the year ending June 30, 2024. The condensed balance sheet at June 30, 2023, has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles in the U.S. for complete financial statements. |
Restatement of Previously Issued Financials | Restatement of Previously Issued Financials During fiscal 2023, the Company completed its final valuation of the assets purchased from ZenSports on August 26, 2022. Management determined that the value of the assets purchased were understated during the three months ended December 31, 2022 for asset acquisition costs initially expensed, and overstated during the six months ended December 31, 2022 for expenses that were initially included as part of the asset purchase. The value of the assets reflected in the June 30, 2023 audited financial statements was recorded based on this final valuation. See below for adjustments needed for the interim three month and six month periods ended December 31, 2022. In evaluating whether the previously issued Consolidated Financial Statements were materially misstated for the interim period ending December 31, 2022, the Company applied the guidance of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 250, Accounting Changes and Error Corrections, SEC Staff Accounting Bulletin (“SAB”) Topic 1.M, Assessing Materiality, and SAB Topic 1.N, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements and concluded that the effect of the errors on prior period interim financial statements was material; and therefore as noted in SAB Topic 1.N. the Company has restated the December 31, 2022 consolidated financial statements in accordance with FASB ASC 250-10-45-23. SCHEDULE OF CONSOLIDATED FINANCIAL STATEMENT For the three months ended December 31, 2022 For the three months ended December 31, 2022 For the six months ended December 31, 2022 For the six months ended December 31, 2022 As Previously Reported Adjustments As Revised As Previously Reported Adjustments As Revised Salaries and wages $ 1,218,858 $ (2 ) $ 1,218,856 $ 2,051,908 $ 1,030,591 $ 3,082,499 General and administrative $ 414,563 $ (81,407 ) $ 333,156 $ 903,063 $ (172,236 ) $ 730,827 Total net loss $ (1,707,972 ) $ 81,401 $ (1,626,571 ) $ (3,119,027 ) $ (859,210 ) $ (3,978,237 ) Net loss per common share – basic and diluted $ (0.04 ) $ (0.00 ) $ (0.04 ) $ (0.09 ) $ (0.02 ) $ (0.11 ) Principals of Consolidation The consolidated financial statements represent the results of KeyStar Corp. and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated upon consolidation of these entities. |
Segment Reporting | Segment Reporting The Company operates as one reportable segment under Accounting Standards Codification “ASC” 280, Segment Reporting. |
Use of Estimates | Use of Estimates The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. Significant estimates and assumptions reflected in the financial statements relate to and include, but are not limited to, the valuation of debt and equity instruments, the valuation and expensing of equity awards, accounting for contingencies and uncertainties, purchase price allocations, including fair value estimates of intangible assets, the estimated useful lives of fixed assets and intangible assets, internally developed software costs and accrued expenses. |
Going Concern | Going Concern The Company’s condensed consolidated financial statements are prepared using the accrual method of accounting in accordance with accounting principles generally accepted in the United States of America and have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities in the normal course of business. As of December 31, 2023, the Company had a working capital deficit of $ 6,576,937 26,965,616 13,846,535 5,980,248 The Company is dependent upon, among other things, achieving a level of profitable operations and receiving additional cash infusions including securing additional lines of credit and raising additional capital through placement of preferred and/or common stock in order to implement its business plan. There can be no assurance that the Company will be successful in order to continue as a going concern. The Company is funding its initial operations by securing a related party line of credit, issuing preferred stock, and issuing common stock through private placements. We cannot be certain that capital will be provided when it is required or in amounts sufficient to meet our operating requirements. Management believes the existing shareholders, the prospective new investors, and future sales will provide the additional cash needed to meet the Company’s obligations as they become due and will allow the development of its core business operations. No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, it may contain restrictions on our operations, in the case of debt financing, or cause substantial dilution for our stockholders, in the case of equity financing. |
Cash and Equivalents | Cash and Equivalents The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Cash includes amounts deposited in financial institutions in excess of insurable Federal Deposit Insurance Company (FDIC) limits. At times throughout the year, the Company may maintain cash balances in certain bank accounts in excess of FDIC limits. At December 31, 2023, the Company’s cash balance did not exceed the FDIC limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk in these accounts. |
Cash Reserved for Users | Cash Reserved for Users The Company maintains separate bank accounts to segregate users’ funds from operational funds. User funds are held by KeyStar TN, LLC, a Tennessee limited liability company and wholly owned subsidiary of the Company, which was organized for the purpose of protecting users’ funds in the event of creditor claims. As of December 31, 2023 and June 30, 2023, approximately $ 245,000 135,000 |
Equipment | Equipment Equipment is stated at cost, less accumulated depreciation and amortization. Depreciation is calculated using the straight-line method over the asset’s estimated useful life. Expenditures for maintenance and repairs are expensed as incurred. When retired or otherwise disposed of, the related carrying value and accumulated depreciation are removed from the respective accounts, and the net difference less any amount realized from the disposition is reflected in earnings. Estimated useful lives are as follows: SUMMARY OF PLANT AND EQUIPMENT ESTIMATED USEFUL LIVES Equipment 3 5 |
Intangible assets include developed technology, internally developed software and website development costs, gaming license, and trademarks | Intangible assets include developed technology, internally developed software and website development costs, gaming license, and trademarks Internally developed capitalized software and website development and the KeyStar trade name is stated at cost, less accumulated amortization on the balance sheet. Amortization is calculated using the straight-line method over the asset’s estimated useful life. The capitalization policy for the Company is to capitalize intangible assets greater than $ 5,000 Estimated useful lives are as follows: SUMMARY OF ESTIMATED LIVES OF INTANGIBLE ASSETS Developed technology 5 Capitalized software and website development 3 Trade marks 3 5 |
Developed Technology | Developed Technology Developed technology primarily relates to the design and development of sports betting software for online sportsbook. |
Internally Developed Software | Internally Developed Software |
Gaming licenses | Gaming licenses Certain costs, generally legal and professional fees, are required to attain jurisdictional gaming licenses in order to legally operate our core sports betting business. Gaming licenses, with indefinite useful lives, are tested at least on an annual basis as to the assets that have been impaired. Intangible assets determined to have an indefinite useful life are not amortized. Gaming licenses are assets that are determined to have an indefinite useful life are not amortized and are included in intangible assets in the balance sheet. Annual gaming license fees and legal and professional fees required to maintain the licenses are recorded as period costs in the statement of operations. |
Trademarks | Trademarks Trademarks are carried at cost and are mainly related to branding and promotion, with indefinite useful lives. The Company tests at least on an annual basis whether trademarks with indefinite useful lives are impaired. Intangible assets determined to have an indefinite useful life are not amortized and are included in intangible assets in the balance sheet. The Company conducts its annual impairment tests at June 30 of each year or whenever events and changes in circumstances suggest that the carrying amount may not be recoverable. At June 30, 2023, management determined that the acquired Ultimate Gamer trademarks were fully impaired pursuant to the annual impairment test and, as such has written off the carrying value of trademarks. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Intangible assets include the cost of developed technology, trademarks and trade names and gaming licenses. Intangible assets are amortized utilizing the straight-line method over their remaining economic useful lives. The Company reviews long-lived assets and intangible assets for potential impairment annually and when events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. In the event the expected undiscounted future cash flows resulting from the use of the asset is less than the carrying amount of the asset, an impairment loss is recorded equal to the excess of the asset’s carrying value over its fair value. If an asset is determined to be impaired, the loss is measured based on quoted market prices in active markets, if available. If quoted market prices are not available, the estimate of fair value is based on various valuation techniques, including a discounted value of estimated future cash flows. In the event that management decides to no longer allocate resources to an asset, an impairment loss equal to the remaining carrying value of the asset is recorded. The Company performed a qualitative test as of June 30, 2023, and determined that the common control developed technology and trademarks acquired would no longer be invested in and would not be generating cash flows for the foreseeable future. Impairment charges of $ 48,533 |
Lease Commitments | Lease Commitments The Company has no long-term lease commitments. On October 1, 2023, the Company entered into a lease for office space in Miami, Florida. The lease expires on October 31, 2024 6,500 23,036 44,688 ASC Topic 842 provides for certain practical expedients when adopting the guidance. The Company elected to apply the short-term lease exception; therefore, the Company will not record an ROU asset or corresponding lease liability for leases with an initial term of twelve months or less that are not reasonably certain of being renewed and instead will recognize a single lease cost allocated over the lease term, generally on a straight-line basis. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company recognized the fair value of financial instruments in accordance with FASB ASC 820, Fair Value Measurements and Disclosures, “Fair Value Measurements”, which provides a framework for measuring fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The standard also expands disclosures about instruments measured at fair value and establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value: Level 1 - Quoted prices for identical assets and liabilities in active markets; Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, such as quoted market prices for similar assets and liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability. Level 3 - Unobservable inputs that are supported by little to no market activity. The Company’s derivative liabilities are carried at fair value and are classified as Level 3 liabilities. The Company’s financial instruments consist principally of cash, prepaid expenses, accounts payable, accrued expenses, related party notes payable, related party line of credit, and notes payable approximate the fair value because of their short maturities. The Company’s Derivative liabilities are determined based on “Level” 3 inputs, which are significant and unobservable and have the lowest priority. There were no transfers into our out of “Level 3” during the six months ended December 31, 2023, or 2022. SCHEDULE OF DERIVATIVE LIABILITIES Description Total fair value at Quoted prices in Active Significant other observable inputs (level 2) Significant unobservable inputs (level 3) Derivative liability (1) $ 2,132,827 $ - $ - $ 2,132,827 Description Total fair value at Quoted prices in Active Quoted prices in Active Quoted prices in Active Derivative liability (1) $ 6,859,452 $ - $ - $ 6,859,452 (1) The Company has estimated the fair value of these derivatives using the Monte-Carlo model. Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial statement. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could transfer a liability in an orderly transaction between willing and able maker participants. In general, the Company’s policy in estimating fair values is to first look at observable market prices for the identical assets and liabilities in active markets, where available. When these are not available other inputs used to model fair value such as prices of similar instruments, yield curves, volatilities., prepayment speeds, default rates credit spreads, rely first on observable data from active markets. Depending on the availability of observable inputs and prices, different valuation models could produce materially different fair value estimates. The values presented may not represent future fair value as discussed above. |
Derivative Liabilities | Derivative Liabilities The Company accounts for derivative instruments in accordance with ASC 815, “ Derivatives and Hedging 2,132,827 6,859,452 |
Players Balances | Players Balances Players balances were comprised of sports betting deposits assumed and recorded at the fair market value acquired from ZenSports, Inc. on August 26, 2022, as part of an asset purchase agreement. The balances as of December 31, 2023 and June 30, 2023, are comprised of players betting deposits and contestant prize winnings for eSports and other promotional events. During May 2023, the Company was approved by the state of Tennessee for its Sports Betting license and commenced Sports Betting operations on June 8, 2023, as such, the Company began accepting new sports betting deposits in addition to recording only payouts on the acquired players liability balances. |
Revenue Recognition | Revenue Recognition The Company records revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). ASC 606 requires companies to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, the standard requires more detailed disclosures to enable readers of the financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The Company determines revenue recognition through the following steps: ● Identify the contract, or contracts, with the customer; ● Identify the performance obligations in the contract; ● Determine the transaction price; ● Allocate the transaction price to performance obligations in the contract; and Recognize revenue when, or as, the Company satisfies performance obligations by transferring the promised good or services. The Company provides online sportsbook betting services with its technical infrastructure to its direct customers. Sportsbook or sports betting involves a user wagering money on an outcome or series of outcomes occurring. When a user’s wager wins, the Company pays the user a pre-determined amount known as fixed odds. Sportsbook revenue is generated by setting odds such that there is a built-in theoretical margin in each sports wagering opportunity offered to users. Sportsbook revenue is generated from users’ wagers net of payouts made on users’ winning wagers and incentives awarded to users. Each wager placed by a user creates a single performance obligation for the Company. The performance obligation is satisfied once the event wagered on has been completed. Any unsettled wagers are recorded as a players balance liability. Net gaming revenue is the aggregate of gaming wins and losses based on results of each event that customers wager bets on. |
Cost of Revenue | Cost of Revenue Cost of revenue consists primarily of variable costs, principally recurring online platform costs directly associated with revenue-generating activities including payment processing and supporting technology costs, web hosting, regulatory compliance software and Sports Betting privilege taxes. |
Revenue Recognition from our former business | Revenue Recognition from our former business The Company recognizes revenue in accordance with generally accepted accounting principles as outlined in the Financial Accounting Standard Board’s (“FASB”) Accounting Standards Codification (“ASC”) 606, Revenue From Contracts with Customers, which consists of five steps to evaluating contracts with customers for revenue recognition: (a) identify the contract with the customer; (ii) identity the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price; and (v) recognize revenue when or as the entity satisfied a performance obligation. Revenue recognition for our prior business occurred at the time we satisfy a service performance obligation to our customers or when control of product transfers to customers upon shipment, provided there are no material remaining performance obligations required of the Company or any matters of customer acceptance. We only recorded revenue when collectability was probable. All payments are received upon order of services and prior to delivery of the product, so we have no accounts receivable. The Company’s prior business was providing quality merchandise through its former online store in the United States of America. Due to the COVID-19 pandemic, the Company was focusing on providing disposable face masks and KN-95 face masks at affordable prices. Customers ordered and paid for the products through the online store, when the Company confirmed the order and payment, the Company delivered the product through common carriers, at which point the Company recognized revenue, as this is when our performance obligation is satisfied. The Company recorded actual sales returns when the customers returned the products. The transaction price has not been affected by returns as the Company did have significant returns. All prior business operations, including sales and revenues, are included in the net income (loss) from discontinued operations, net of income taxes in the statement of operations. For the six months ended December 31, 2023, and 2022, the Company recognized sales of products $ 0 536 |
Cost of Revenues from our former business | Cost of Revenues from our former business Costs of revenues from our prior business primarily consisted of outsourced vendors for both types of revenues. The Company includes product costs (i.e., material, direct labor, and overhead costs) and shipping and handling expenses in cost of revenues. All prior business operations, including cost of revenues, are included in the net income (loss) from discontinued operations, net of income taxes in the statement of operations. |
Stock -based Compensation | Stock -based Compensation The Company records stock-based compensation in accordance with ASC 718 “Compensation- Stock Compensation”, using the fair value method. All transactions in which services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. The Company accounts for Stock-based compensation awards issued to non-employees for services as prescribed by ASC 718, at either the fair value of the services rendered or the instruments issued in exchange for such services, whichever is more readily determinable, using the measurement date guidelines enumerated in Accounting Standards Updated (“ASU”) 2018-07. The Company uses the Black Scholes pricing model to calculate the fair value of stock-based awards. This model is affected the Company’s stock price as well as assumptions regarding a number of subjective variables. These subjective variables include, but are not limited to, the Company’s expected stock price volatility over the term of the awards, and actual projected employee stock option exercise behaviors. The value of the portion of the award that is ultimately expected to vest is recognized as an expense in the consolidated statement of operations over the requisite service period. |
Sales and Marketing | Sales and Marketing Sales and marketing expenses consist primarily of expenses associated with advertising and costs related to free to play contests. Advertising costs are expensed as incurred and are included in sales and marketing expense in our condensed consolidated unaudited statements of operations. Advertising costs include those costs associated with communicating with potential customers and generally use some form of media, such as internet, radio, print, television, or billboards. Advertising costs also include costs associated with strategic league and team partnerships. During the three months ended December 31, 2023 and 2022, advertising costs calculated in accordance with U.S. GAAP were $ 1,878,156 27,858 3,068,166 44,313 |
General and Administrative | General and Administrative General and administrative expenses consist of costs not related to sales and marketing, product and technology or revenue. General and administrative costs include professional services (including legal, regulatory, audit and accounting), rent and facilities maintenance, contingencies and insurance. |
Income Taxes | Income Taxes The Company accounts for income taxes under an asset and liability approach. This process involves calculating the temporary and permanent differences between the carrying amounts of the assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The temporary differences result in deferred tax assets and liabilities, which would be recorded on the Company’s balance sheet in accordance with ASC 740, which established financial accounting and reporting standards for the effect of income taxes. The Company must assess the likelihood that its deferred tax assets will be recovered from future taxable income, and, to the extent the Company believes that recovery is not likely, the Company must establish a valuation allowance. Changes in the Company’s valuation allowance in a period are recorded through the income tax provision on the statements of operations. ASC 740-10 clarifies the accounting for uncertainty in income taxes recognized in an entity’s financial statements and prescribes a recognition threshold and measurement attributes for financial statement disclosure of tax positions taken or expected to be taken on a tax return. Under ASC 740-10, the impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is more likely than not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained |
Earnings (loss) per Share | Earnings (loss) per Share Basic net (loss) earnings per common share is computed by dividing net (loss) income by the weighted average number of vested common shares outstanding during the period. Diluted net income per common share is computed by dividing net income by the weighted average number vested of common shares, plus the net impact of common shares (computed using the treasury stock method), if dilutive, resulting from the exercise of dilutive securities. In periods when losses are reported, the weighted-average number of common shares outstanding excludes common stock equivalents because their inclusion would be anti-dilutive. As of December 31, 2023 and June 30, 2023 the Company excluded the common stock equivalents summarized below, which entitle the holders thereof to ultimately acquire shares of common stock, from its calculation of earnings per share, as their effect would have been anti-dilutive. SCHEDULE OF EARNINGS (LOSS) PER SHARE ANTI-DILUTIVE For the six months ended For the year ended Stock Options 6,250,000 6,500,000 Series A Preferred Shares - - Series B Preferred Shares 1,169,300 1,169,300 Series C Preferred Shares 8,333,327 8,333,327 Warrants 11,043,479 5,600,000 Shares issuable upon conversion of convertible notes 2,125,000 - Shares issuable upon conversion of line of credit 2,851,812 17,130,907 Total potentially dilutive shares 31,772,918 38,733,534 |
Recent Accounting Pronouncements | Recent Accounting Pronouncements All recently issued ASUs by the FASB have no material impact on the Company’s consolidated results of operations or financial position. |
OVERVIEW AND ORGANIZATION & S_3
OVERVIEW AND ORGANIZATION & SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
SCHEDULE OF CONSOLIDATED FINANCIAL STATEMENT | SCHEDULE OF CONSOLIDATED FINANCIAL STATEMENT For the three months ended December 31, 2022 For the three months ended December 31, 2022 For the six months ended December 31, 2022 For the six months ended December 31, 2022 As Previously Reported Adjustments As Revised As Previously Reported Adjustments As Revised Salaries and wages $ 1,218,858 $ (2 ) $ 1,218,856 $ 2,051,908 $ 1,030,591 $ 3,082,499 General and administrative $ 414,563 $ (81,407 ) $ 333,156 $ 903,063 $ (172,236 ) $ 730,827 Total net loss $ (1,707,972 ) $ 81,401 $ (1,626,571 ) $ (3,119,027 ) $ (859,210 ) $ (3,978,237 ) Net loss per common share – basic and diluted $ (0.04 ) $ (0.00 ) $ (0.04 ) $ (0.09 ) $ (0.02 ) $ (0.11 ) |
SUMMARY OF PLANT AND EQUIPMENT ESTIMATED USEFUL LIVES | SUMMARY OF PLANT AND EQUIPMENT ESTIMATED USEFUL LIVES Equipment 3 5 |
SUMMARY OF ESTIMATED LIVES OF INTANGIBLE ASSETS | Estimated useful lives are as follows: SUMMARY OF ESTIMATED LIVES OF INTANGIBLE ASSETS Developed technology 5 Capitalized software and website development 3 Trade marks 3 5 |
SCHEDULE OF DERIVATIVE LIABILITIES | SCHEDULE OF DERIVATIVE LIABILITIES Description Total fair value at Quoted prices in Active Significant other observable inputs (level 2) Significant unobservable inputs (level 3) Derivative liability (1) $ 2,132,827 $ - $ - $ 2,132,827 Description Total fair value at Quoted prices in Active Quoted prices in Active Quoted prices in Active Derivative liability (1) $ 6,859,452 $ - $ - $ 6,859,452 (1) The Company has estimated the fair value of these derivatives using the Monte-Carlo model. |
SCHEDULE OF EARNINGS (LOSS) PER SHARE ANTI-DILUTIVE | SCHEDULE OF EARNINGS (LOSS) PER SHARE ANTI-DILUTIVE For the six months ended For the year ended Stock Options 6,250,000 6,500,000 Series A Preferred Shares - - Series B Preferred Shares 1,169,300 1,169,300 Series C Preferred Shares 8,333,327 8,333,327 Warrants 11,043,479 5,600,000 Shares issuable upon conversion of convertible notes 2,125,000 - Shares issuable upon conversion of line of credit 2,851,812 17,130,907 Total potentially dilutive shares 31,772,918 38,733,534 |
EQUIPMENT (Tables)
EQUIPMENT (Tables) | 6 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
SCHEDULE OF EQUIPMENT, CAPITALIZED SOFTWARE AND WEBSITE | The Company’s equipment consisted of the following as of: SCHEDULE OF EQUIPMENT, CAPITALIZED SOFTWARE AND WEBSITE December 31, 2023 June 30, 2023 Equipment $ 4,980 $ 4,980 Total 4,980 4,980 Less: accumulated depreciation 1,997 1,167 Equipment, net $ 2,983 $ 3,813 |
LONG LIVED INTANGIBLE ASSETS (T
LONG LIVED INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
SCHEDULE OF LONG-LIVED AND OTHER INTANGIBLE ASSETS | Long-lived and other intangible assets held, net of impairment are comprised of the following at: SCHEDULE OF LONG-LIVED AND OTHER INTANGIBLE ASSETS December 31, 2023 June 30, 2023 Developed technology $ 7,747,459 $ 7,521,638 Tradenames and trademarks 560,999 560,999 Gaming licenses 135,837 135,837 Impairment charges (48,533 ) (48,533 ) Total 8,395,762 8,169,941 Less: accumulated amortization (972,933 ) (102,743 ) Net carrying value $ 7,422,829 $ 8,067,198 |
CONVERTIBLE DEBT (Tables)
CONVERTIBLE DEBT (Tables) | 6 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
SCHEDULE OF SIGNIFICANT ASSUMPTIONS CONVERTIBLE DEBT | The following are the significant assumptions used in the Monte-Carlo model. See Note 8. SCHEDULE OF SIGNIFICANT ASSUMPTIONS CONVERTIBLE DEBT Expected volatility Risk-free interest rate Expected dividend yield Expected life (in years) At September 1, 2023 68.2 % 4.87 % 0 % 2.00 |
LINE OF CREDIT - RELATED PARTY
LINE OF CREDIT - RELATED PARTY (Tables) | 6 Months Ended |
Dec. 31, 2023 | |
Monte Carlo Model [Member] | |
Credit Derivatives [Line Items] | |
SCHEDULE OF SIGNIFICANT ASSUMPTIONS | The following are the significant assumptions used in the Monte-Carlo model. SCHEDULE OF FAIR VALUE OF DERIVATIVES Expected volatility Risk-free interest rate Expected dividend yield Expected life (in years) At February 24, 2023 108.5 % 4.84 % 0 % 1.77 |
Black Scholes Model [Member] | |
Credit Derivatives [Line Items] | |
SCHEDULE OF SIGNIFICANT ASSUMPTIONS | The following are the significant assumptions used in the Black-Scholes model: SCHEDULE OF FAIR VALUE OF DERIVATIVES Expected volatility Risk-free interest rate Expected dividend yield Expected life (in years) At February 24, 2023 111.60 % 4.20 % 0 % 2 |
Black Scholes Model Warrants [Member] | |
Credit Derivatives [Line Items] | |
SCHEDULE OF SIGNIFICANT ASSUMPTIONS | The following are the significant assumptions used in the Black-Scholes model for the warrants: SCHEDULE OF SIGNIFICANT ASSUMPTIONS Expected volatility Risk-free Expected Expected life At July 18, 2023 83.4 % 4.62 % 0 % 4.8 Expected volatility Risk-free Expected Expected life At September 13, 2023 86.5 % 4.60 % 0 % 4.95 Expected volatility Risk-free Expected Expected life At December 27, 2023 153.5 % 3.83 % 0 % 4.71 |
DERIVATIVE LIABILITIES (Tables)
DERIVATIVE LIABILITIES (Tables) | 6 Months Ended |
Dec. 31, 2023 | |
Derivative Liabilities | |
SCHEDULE OF FAIR VALUE OF FINANCIAL LIABILITIES | The table below sets forth a summary of the changes in the fair value of the Company’s Level 3 financial liabilities for the six months ended December 31, 2023: SCHEDULE OF FAIR VALUE OF FINANCIAL LIABILITIES Balance at June 30, 2023 $ 6,859,452 Embedded conversion option of convertible debt 2,169,365 Derivative liability extinguished upon conversion of debt (Note 7) (7,288,574 ) Change in the fair value of the embedded conversion option 392,584 Balance at December 31, 2023 $ 2,132,827 |
SCHEDULE OF FAIR VALUE MEASUREMENT | SCHEDULE OF FAIR VALUE MEASUREMENT Expected volatility Risk-free interest rate Expected dividend yield Expected life (in years) At June 30, 2023 108 114 % 4.20 5.18 % 0 % .5 2 At December 31, 2023 64.20 68.90 % 4.42 4.60 % 0 % 1.34 1.67 |
STOCK OPTIONS (Tables)
STOCK OPTIONS (Tables) | 6 Months Ended |
Dec. 31, 2023 | |
Retirement Benefits [Abstract] | |
SCHEDULE OF OUTSTANDING AND EXERCISABLE OPTIONS | Below is a table summarizing the changes in stock options outstanding for the six months ended December 31, 2023: SCHEDULE OF OUTSTANDING AND EXERCISABLE OPTIONS Number of Options Weighted Average Exercise Price ($) Outstanding at June 30, 2023 3,250,000 $ 0.50 Granted - - Exercised - - Expired - - Forfeited 125,000 0.50 Outstanding at December 31, 2023 3,125,000 $ 0.50 Exercisable at December 31, 2023 1,231,944 $ 0.50 |
SCHEDULE OF CONSOLIDATED FINANC
SCHEDULE OF CONSOLIDATED FINANCIAL STATEMENT (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Mar. 01, 2024 | Nov. 02, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Salaries and wages | $ 275,000 | $ 275,000 | $ 1,740,189 | $ 1,218,856 | $ 2,555,530 | $ 3,082,499 |
General and administrative | $ 663,553 | 333,156 | $ 1,371,554 | 730,827 | ||
Total net loss | $ (1,626,571) | $ (3,978,237) | ||||
Net loss per common share - basic | $ (0.21) | $ (0.04) | $ (0.33) | $ (0.11) | ||
Net loss per common share - diluted | $ (0.21) | $ (0.04) | $ (0.33) | $ (0.11) | ||
Previously Reported [Member] | ||||||
Salaries and wages | $ 1,218,858 | $ 2,051,908 | ||||
General and administrative | 414,563 | 903,063 | ||||
Total net loss | $ (1,707,972) | $ (3,119,027) | ||||
Net loss per common share - basic | $ (0.04) | $ (0.09) | ||||
Net loss per common share - diluted | $ (0.04) | $ (0.09) | ||||
Revision of Prior Period, Reclassification, Adjustment [Member] | ||||||
Salaries and wages | $ (2) | $ 1,030,591 | ||||
General and administrative | (81,407) | (172,236) | ||||
Total net loss | $ 81,401 | $ (859,210) | ||||
Revision of Prior Period, Adjustment [Member] | ||||||
Net loss per common share - basic | $ 0 | $ (0.02) | ||||
Net loss per common share - diluted | $ 0 | $ (0.02) |
SUMMARY OF PLANT AND EQUIPMENT
SUMMARY OF PLANT AND EQUIPMENT ESTIMATED USEFUL LIVES (Details) - Equipment [Member] | Dec. 31, 2023 |
Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property plant and equipment useful life | 3 years |
Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property plant and equipment useful life | 5 years |
SUMMARY OF ESTIMATED LIVES OF I
SUMMARY OF ESTIMATED LIVES OF INTANGIBLE ASSETS (Details) | Dec. 31, 2023 |
Developed Technology Rights [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful lives | 5 years |
Computer Software, Intangible Asset [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful lives | 3 years |
Trademarks [Member] | Minimum [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful lives | 3 years |
Trademarks [Member] | Maximum [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful lives | 5 years |
SCHEDULE OF DERIVATIVE LIABILIT
SCHEDULE OF DERIVATIVE LIABILITIES (Details) - USD ($) | Dec. 31, 2023 | Jun. 30, 2023 | |
Platform Operator, Crypto-Asset [Line Items] | |||
Derivative liability | [1] | $ 2,132,827 | $ 6,859,452 |
Fair Value, Inputs, Level 1 [Member] | |||
Platform Operator, Crypto-Asset [Line Items] | |||
Derivative liability | [1] | ||
Fair Value, Inputs, Level 2 [Member] | |||
Platform Operator, Crypto-Asset [Line Items] | |||
Derivative liability | [1] | ||
Fair Value, Inputs, Level 3 [Member] | |||
Platform Operator, Crypto-Asset [Line Items] | |||
Derivative liability | [1] | $ 2,132,827 | $ 6,859,452 |
[1]The Company has estimated the fair value of these derivatives using the Monte-Carlo model. |
SCHEDULE OF EARNINGS (LOSS) PER
SCHEDULE OF EARNINGS (LOSS) PER SHARE ANTI-DILUTIVE (Details) - shares | 6 Months Ended | 12 Months Ended |
Dec. 31, 2023 | Jun. 30, 2023 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total potentially dilutive shares | 31,772,918 | 38,733,534 |
Share-Based Payment Arrangement, Option [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total potentially dilutive shares | 6,250,000 | 6,500,000 |
Series A Preferred Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total potentially dilutive shares | ||
Series B Preferred Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total potentially dilutive shares | 1,169,300 | 1,169,300 |
Series C Preferred Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total potentially dilutive shares | 8,333,327 | 8,333,327 |
Warrant [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total potentially dilutive shares | 11,043,479 | 5,600,000 |
Conversion Of Convertible Notes [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total potentially dilutive shares | 2,125,000 | |
Conversion Of Line Of Credit [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total potentially dilutive shares | 2,851,812 | 17,130,907 |
OVERVIEW AND ORGANIZATION & S_4
OVERVIEW AND ORGANIZATION & SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||||||
Feb. 04, 2024 | Sep. 30, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Jun. 30, 2023 | ||
Working capital deficit | $ 6,576,937 | $ 6,576,937 | ||||||
Accumulated deficit | 26,965,616 | 26,965,616 | $ 13,119,081 | |||||
Net loss from continuing operations | 8,788,233 | $ 1,626,572 | 13,846,535 | $ 3,968,857 | ||||
Cash flows from continuing operations | (5,980,248) | |||||||
Cash reserved | 245,000 | 245,000 | 135,000 | |||||
Capitalize intangible assets | 5,000 | 5,000 | ||||||
Impairment charges | 48,533 | $ 48,533 | 48,533 | |||||
Lease expiration date | Oct. 31, 2024 | |||||||
Monthly lease payment | $ 1,600 | $ 6,500 | ||||||
Rental expense | 23,036 | $ 44,688 | ||||||
Derivative liability | [1] | 2,132,827 | 2,132,827 | $ 6,859,452 | ||||
Advertising costs | $ 1,878,156 | $ 27,858 | $ 3,068,166 | 44,313 | ||||
Income tax examination likelihood of unfavorable settlement | less than a 50% likelihood of being sustained | |||||||
E Commerce Sales [Member] | ||||||||
Revenues from sales | $ 0 | $ 536 | ||||||
Minimum [Member] | ||||||||
Monthly lease payment | $ 6,500 | |||||||
[1]The Company has estimated the fair value of these derivatives using the Monte-Carlo model. |
SCHEDULE OF EQUIPMENT, CAPITALI
SCHEDULE OF EQUIPMENT, CAPITALIZED SOFTWARE AND WEBSITE (Details) - USD ($) | Dec. 31, 2023 | Jun. 30, 2023 |
Property, Plant and Equipment [Line Items] | ||
Equipment, net | $ 2,983 | $ 3,813 |
Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | 4,980 | 4,980 |
Less: accumulated depreciation | 1,997 | 1,167 |
Equipment, net | $ 2,983 | $ 3,813 |
EQUIPMENT (Details Narrative)
EQUIPMENT (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Sep. 12, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Property, Plant and Equipment [Line Items] | |||||
Depreciation expense | $ 415 | $ 515 | $ 830 | $ 515 | |
Assets Of Ultimate Gamer LLC [Member] | Equipment [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Equipment costs | $ 7,903 | ||||
Assets Of Ultimate Gamer LLC [Member] | Software Development [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Equipment costs | $ 26,637 |
SCHEDULE OF LONG-LIVED AND OTHE
SCHEDULE OF LONG-LIVED AND OTHER INTANGIBLE ASSETS (Details) - USD ($) | Dec. 31, 2023 | Jun. 30, 2023 |
Finite-Lived Intangible Assets [Line Items] | ||
Total | $ 8,395,762 | $ 8,169,941 |
Impairment charges | (48,533) | (48,533) |
Less: accumulated amortization | (972,933) | (102,743) |
Net carrying value | 7,422,829 | 8,067,198 |
Developed Technology Rights [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total | 7,747,459 | 7,521,638 |
Trademarks and Trade Names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total | 560,999 | 560,999 |
License [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total | $ 135,837 | $ 135,837 |
LONG LIVED INTANGIBLE ASSETS (D
LONG LIVED INTANGIBLE ASSETS (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Intangible assets fully impaired | $ 48,533 | |||
Developed Technology Rights [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Intangible assets fully impaired | $ 26,637 | |||
Trade Names [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Intangible assets fully impaired | 21,896 | |||
Amortization expense | 26,955 | $ 0 | 53,910 | 0 |
Intellectual Property [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization expense | $ 411,224 | $ 0 | $ 816,280 | $ 0 |
PLAYERS BALANCES (Details Narra
PLAYERS BALANCES (Details Narrative) - USD ($) | Dec. 31, 2023 | Jun. 30, 2023 |
Players balances | $ 1,371,421 | $ 134,946 |
SCHEDULE OF SIGNIFICANT ASSUMPT
SCHEDULE OF SIGNIFICANT ASSUMPTIONS CONVERTIBLE DEBT (Details) - Monte Carlo Model [Member] | Sep. 01, 2023 | Feb. 24, 2023 |
Measurement Input, Price Volatility [Member] | ||
Short-Term Debt [Line Items] | ||
Debt measurement input | 108.5 | |
Measurement Input, Risk Free Interest Rate [Member] | ||
Short-Term Debt [Line Items] | ||
Debt measurement input | 4.84 | |
Measurement Input, Expected Dividend Rate [Member] | ||
Short-Term Debt [Line Items] | ||
Debt measurement input | 0 | |
Measurement Input, Expected Term [Member] | ||
Short-Term Debt [Line Items] | ||
Debt measurement input | 1.77 | |
Convertible Debt [Member] | Measurement Input, Price Volatility [Member] | ||
Short-Term Debt [Line Items] | ||
Debt measurement input | 68.2 | |
Convertible Debt [Member] | Measurement Input, Risk Free Interest Rate [Member] | ||
Short-Term Debt [Line Items] | ||
Debt measurement input | 4.87 | |
Convertible Debt [Member] | Measurement Input, Expected Dividend Rate [Member] | ||
Short-Term Debt [Line Items] | ||
Debt measurement input | 0 | |
Convertible Debt [Member] | Measurement Input, Expected Term [Member] | ||
Short-Term Debt [Line Items] | ||
Debt measurement input | 2 |
CONVERTIBLE DEBT (Details Narra
CONVERTIBLE DEBT (Details Narrative) | Sep. 01, 2023 USD ($) $ / shares | Dec. 31, 2023 $ / shares | Aug. 28, 2023 USD ($) | Aug. 23, 2023 USD ($) | Jun. 30, 2023 $ / shares | May 05, 2023 USD ($) |
Short-Term Debt [Line Items] | ||||||
Principal amount | $ | $ 1,600,000 | |||||
Common stock, par value | $ 0.0001 | $ 0.0001 | ||||
Conversion price | $ 0.50 | |||||
Convertible Note Purchase Agreement [Member] | ||||||
Short-Term Debt [Line Items] | ||||||
Principal amount | $ | $ 150,000 | $ 500,000 | $ 200,000 | |||
Convertible debt offering | $ | $ 2,000,000 | |||||
Interest rate percentage | 12% | |||||
Common stock, par value | $ 0.0001 | |||||
Conversion ratio percentage | 0.80 | |||||
Conversion price | $ 1 |
NOTES PAYABLE AND NOTES PAYAB_2
NOTES PAYABLE AND NOTES PAYABLE - RELATED PARTY (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||||||||||
May 24, 2023 | May 05, 2023 | Feb. 27, 2023 | Jul. 26, 2022 | Dec. 30, 2020 | Apr. 27, 2020 | Jul. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Sep. 14, 2023 | Jun. 30, 2023 | Jul. 25, 2022 | |
Short-Term Debt [Line Items] | ||||||||||||||
Principal amount | $ 1,600,000 | |||||||||||||
Payment of debt | $ 35,000 | |||||||||||||
Interest expense | $ 21,969 | $ 0 | $ 43,665 | 0 | ||||||||||
Maturity date | Nov. 04, 2023 | |||||||||||||
Funding fee | $ 160,000 | |||||||||||||
Purchase of warrants | 1,600,000 | 4,000,000 | 4,000,000 | |||||||||||
Warrant exercise price | $ 0.25 | $ 0.25 | $ 0.25 | |||||||||||
Fair value adjustment of warrants | $ 485,017 | |||||||||||||
Short Term Note Payable [Member] | ||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||
Total premiums, taxes and fees financed | $ 434,250 | |||||||||||||
Interest rate, stated percentage | 8.88% | |||||||||||||
Debt instrument, initial payment | $ 72,994 | |||||||||||||
Debt instrument, periodic payment | $ 37,744 | |||||||||||||
Notes payable current | $ 113,247 | 113,247 | ||||||||||||
Related Party [Member] | ||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||
Notes payable - related party | 30,000 | 30,000 | $ 1,306,655 | |||||||||||
Chief Financial Officer [Member] | ||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||
Payment of debt | $ 17,837 | $ 20,000 | ||||||||||||
Promissory Note [Member] | ||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||
Interest rate per annum | 5% | 10% | ||||||||||||
Accrued interest payable | 8,996 | 8,996 | 7,496 | |||||||||||
Proceeds from notes payable, related party | $ 35,000 | |||||||||||||
Interest expense | 750 | $ 750 | 1,500 | $ 1,500 | ||||||||||
Purchase price value | $ 300,000 | |||||||||||||
Promissory Note [Member] | Maximum [Member] | ||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||
Notes payable - related party | 850,000 | 850,000 | ||||||||||||
Payment of debt | 850,000 | |||||||||||||
Promissory Note [Member] | Related Party [Member] | ||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||
Notes payable - related party | 30,000 | 30,000 | $ 30,000 | |||||||||||
Promissory Note [Member] | Chief Financial Officer [Member] | ||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||
Principal amount | $ 35,000 | |||||||||||||
Interest rate per annum | 10% | 10% | ||||||||||||
Accrued interest payable | 72,176 | 72,176 | $ 7,853 | |||||||||||
Proceeds from notes payable, related party | $ 30,000 | |||||||||||||
Payment of debt | $ 35,000 | |||||||||||||
Promissory Note [Member] | Chief Executive Officer [Member] | ||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||
Principal amount | $ 1,700,000 | |||||||||||||
Short term debt outstanding | $ 1,700,000 | $ 1,700,000 | ||||||||||||
Fourth Amendment [Member] | Related Party [Member] | ||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||
Notes payable - related party | $ 1,600,000 | |||||||||||||
Funding fee | $ 160,000 |
SCHEDULE OF FAIR VALUE OF DERIV
SCHEDULE OF FAIR VALUE OF DERIVATIVES (Details) | Feb. 24, 2023 |
Monte Carlo Model [Member] | Measurement Input, Price Volatility [Member] | |
Credit Derivatives [Line Items] | |
Debt measurement input | 108.5 |
Monte Carlo Model [Member] | Measurement Input, Risk Free Interest Rate [Member] | |
Credit Derivatives [Line Items] | |
Debt measurement input | 4.84 |
Monte Carlo Model [Member] | Measurement Input, Expected Dividend Rate [Member] | |
Credit Derivatives [Line Items] | |
Debt measurement input | 0 |
Monte Carlo Model [Member] | Measurement Input, Expected Term [Member] | |
Credit Derivatives [Line Items] | |
Debt measurement input | 1.77 |
Black Scholes Model [Member] | Measurement Input, Price Volatility [Member] | |
Credit Derivatives [Line Items] | |
Debt measurement input | 111.60 |
Black Scholes Model [Member] | Measurement Input, Risk Free Interest Rate [Member] | |
Credit Derivatives [Line Items] | |
Debt measurement input | 4.20 |
Black Scholes Model [Member] | Measurement Input, Expected Dividend Rate [Member] | |
Credit Derivatives [Line Items] | |
Debt measurement input | 0 |
Black Scholes Model [Member] | Measurement Input, Expected Term [Member] | |
Credit Derivatives [Line Items] | |
Debt measurement input | 2 |
SCHEDULE OF SIGNIFICANT ASSUM_2
SCHEDULE OF SIGNIFICANT ASSUMPTIONS (Details) - Black Scholes Model [Member] | Sep. 13, 2023 | Jul. 18, 2023 |
Measurement Input, Price Volatility [Member] | ||
Credit Derivatives [Line Items] | ||
Warrant measurement input | 86.5 | 83.4 |
Measurement Input, Risk Free Interest Rate [Member] | ||
Credit Derivatives [Line Items] | ||
Warrant measurement input | 4.60 | 4.62 |
Measurement Input, Expected Dividend Rate [Member] | ||
Credit Derivatives [Line Items] | ||
Warrant measurement input | 0 | 0 |
Measurement Input, Expected Term [Member] | ||
Credit Derivatives [Line Items] | ||
Warrant expected life | 4 years 11 months 12 days | 4 years 9 months 18 days |
LINE OF CREDIT - RELATED PART_2
LINE OF CREDIT - RELATED PARTY (Details Narrative) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||||||
Dec. 29, 2023 USD ($) $ / shares shares | Dec. 28, 2023 USD ($) $ / shares shares | Dec. 27, 2023 USD ($) $ / shares shares | Sep. 14, 2023 USD ($) $ / shares shares | Sep. 13, 2023 USD ($) | Jul. 18, 2023 USD ($) $ / shares shares | May 05, 2023 USD ($) $ / shares shares | Feb. 24, 2023 USD ($) | Dec. 31, 2023 USD ($) $ / shares shares | Dec. 31, 2023 USD ($) $ / shares shares | Jun. 30, 2023 | Sep. 15, 2023 USD ($) | Aug. 17, 2023 USD ($) | Jul. 24, 2023 USD ($) | Aug. 16, 2022 USD ($) | Feb. 22, 2022 USD ($) | |
Maximum borrowing capacity | $ 4,000,000 | $ 2,000,000 | $ 250,000 | |||||||||||||
Interest rate during period | 15% | 15% | 5% | |||||||||||||
Conversion price | $ / shares | $ 0.50 | $ 0.50 | ||||||||||||||
Warrants exercisable | shares | 1,600,000 | 4,000,000 | 4,000,000 | |||||||||||||
Exercise price | $ / shares | $ 0.25 | $ 0.25 | $ 0.25 | |||||||||||||
Warrant maturity date | Feb. 01, 2028 | Feb. 01, 2028 | ||||||||||||||
Debt issuance costs | $ 7,624,859 | $ 7,624,859 | ||||||||||||||
Principal amount | $ 1,600,000 | |||||||||||||||
Shares converted, shares | shares | 25,916,632 | |||||||||||||||
Convertible amount | $ 10,366,653 | |||||||||||||||
Expected dividend yield | 0% | 0% | ||||||||||||||
Debt Assignee [Member] | ||||||||||||||||
Convertible amount | $ 1,540,000 | |||||||||||||||
Convertible shares | shares | 3,850,000 | |||||||||||||||
Fourth Amended [Member] | ||||||||||||||||
Outstanding principal balance | $ 6,888,801 | $ 250,000 | ||||||||||||||
Outstanding amount | $ 4,251,877 | |||||||||||||||
Current borrowing capacity | $ 1,760,000 | $ 500,000 | ||||||||||||||
Unpaid interest | $ 376,924 | |||||||||||||||
Principal payment | $ 1,600,000 | |||||||||||||||
Black Scholes Model [Member] | Measurement Input, Price Volatility [Member] | ||||||||||||||||
Warrant measurement input | 86.5 | 83.4 | ||||||||||||||
Black Scholes Model [Member] | Measurement Input, Risk Free Interest Rate [Member] | ||||||||||||||||
Warrant measurement input | 4.60 | 4.62 | ||||||||||||||
Black Scholes Model [Member] | Measurement Input, Expected Dividend Rate [Member] | ||||||||||||||||
Warrant measurement input | 0 | 0 | ||||||||||||||
Black Scholes Model [Member] | Measurement Input, Expected Term [Member] | ||||||||||||||||
Warrant expected life | 4 years 11 months 12 days | 4 years 9 months 18 days | ||||||||||||||
Black Scholes Model Warrants [Member] | ||||||||||||||||
Expected volatility | 153.50% | |||||||||||||||
Risk free interest rate | 3.83% | |||||||||||||||
Expected dividend yield | 0% | |||||||||||||||
Expected life | 4 years 8 months 15 days | |||||||||||||||
Warrant [Member] | ||||||||||||||||
Exercise price | $ / shares | $ 0.25 | $ 0.25 | $ 0.25 | |||||||||||||
Issuance of stock | shares | 2,460,000 | 3,400,000 | 1,000,000 | |||||||||||||
Third Amendment [Member] | ||||||||||||||||
Maximum borrowing capacity | $ 5,000,000 | |||||||||||||||
Debt issuance costs | $ 5,785,727 | |||||||||||||||
Share price | $ / shares | $ 0.50 | $ 0.50 | ||||||||||||||
Unamortized debt | $ 5,393,193 | |||||||||||||||
Former Note [Member] | ||||||||||||||||
Maximum borrowing capacity | $ 10,000,000 | $ 5,000,000 | $ 4,000,000 | |||||||||||||
Conversion price | $ / shares | $ 0.40 | $ 0.40 | ||||||||||||||
Share price | $ / shares | $ 0.50 | $ 0.50 | ||||||||||||||
Principal amount | $ 1,540,000 | |||||||||||||||
Extinguishment of debt | $ 1,135,000 | $ 10,366,653 | $ 10,366,653 | |||||||||||||
Conversion percentage | 80% | 80% | ||||||||||||||
Shares converted, shares | shares | 25,916,632 | |||||||||||||||
Former Note [Member] | Excel Family Partners LLLP [Member] | ||||||||||||||||
Shares converted, shares | shares | 22,066,632 | |||||||||||||||
Convertible amount | $ 8,826,653 | |||||||||||||||
Fourth Amendment [Member] | ||||||||||||||||
Maximum borrowing capacity | 10,000,000 | |||||||||||||||
Debt issuance costs | 6,668,666 | |||||||||||||||
Unamortized debt | $ 5,308,162 | |||||||||||||||
Interest expense | 1,020,584 | $ 1,955,831 | ||||||||||||||
Fifth Amendment [Member] | ||||||||||||||||
Maximum borrowing capacity | $ 2,000,000 | |||||||||||||||
Warrants exercisable | shares | 2,460,000 | |||||||||||||||
Unamortized debt | $ 2,933,427 | $ 2,933,427 | ||||||||||||||
Warrant [Member] | ||||||||||||||||
Share price | $ / shares | $ 0.50 |
SCHEDULE OF FAIR VALUE OF FINAN
SCHEDULE OF FAIR VALUE OF FINANCIAL LIABILITIES (Details) - USD ($) | 6 Months Ended | ||
Dec. 28, 2023 | Dec. 31, 2023 | ||
Platform Operator, Crypto-Asset [Line Items] | |||
Beginning balance | [1] | $ 6,859,452 | |
Derivative liability extinguished upon conversion of debt | $ (7,288,574) | ||
Ending balance | [1] | 2,132,827 | |
Fair Value, Inputs, Level 3 [Member] | |||
Platform Operator, Crypto-Asset [Line Items] | |||
Beginning balance | [1] | 6,859,452 | |
Initial valuation of embedded conversion option | 2,169,365 | ||
Derivative liability extinguished upon conversion of debt | (7,288,574) | ||
Change in the fair value of the embedded conversion option | 392,584 | ||
Ending balance | [1] | $ 2,132,827 | |
[1]The Company has estimated the fair value of these derivatives using the Monte-Carlo model. |
SCHEDULE OF FAIR VALUE MEASUREM
SCHEDULE OF FAIR VALUE MEASUREMENT (Details) | 6 Months Ended | 12 Months Ended |
Dec. 31, 2023 | Jun. 30, 2023 | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Expected volatility minimum | 64.20% | 108% |
Expected volatility maximum | 68.90% | 114% |
Expected dividend yield | 0% | 0% |
Minimum [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Expected life | 1 year 4 months 2 days | 6 months |
Maximum [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Expected life | 1 year 8 months 1 day | 2 years |
Measurement Input, Risk Free Interest Rate [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Risk free interest rate minimum | 4.42% | 4.20% |
Risk free interest rate maximum | 4.60% | 5.18% |
DERIVATIVE LIABILITIES (Details
DERIVATIVE LIABILITIES (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Dec. 28, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Short-Term Debt [Line Items] | |||||
Number of conversion shares, amount | $ 10,366,653 | ||||
Derivative liabilities | 7,288,574 | ||||
Line of credit | $ 5,495,785 | ||||
Loss on extinguishment | $ 798,873 | $ 798,873 | |||
Line of Credit [Member] | |||||
Short-Term Debt [Line Items] | |||||
Loss on extinguishment | $ 798,874 | $ 798,874 |
STOCKHOLDERS_ DEFICIT (Details
STOCKHOLDERS’ DEFICIT (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||||
Dec. 28, 2023 | Aug. 26, 2022 | Aug. 16, 2022 | Jul. 11, 2022 | Sep. 26, 2022 | Sep. 30, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Jun. 30, 2023 | |
Class of Stock [Line Items] | |||||||||
Common stock, shares authorized | 475,000,000 | 475,000,000 | |||||||
Common stock, par value | $ 0.0001 | $ 0.0001 | |||||||
Preferred stock, shares authorized | 25,000,000 | 25,000,000 | |||||||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | |||||||
Share price | $ 0.50 | ||||||||
Stock issued for cash, value | $ 1,430,000 | ||||||||
Number of conversion shares issued | 25,916,632 | ||||||||
Number of conversion shares, amount | $ 10,366,653 | ||||||||
Number of shares issued | 12,958,316 | ||||||||
Loss on conversion of debt | $ 2,591,663 | ||||||||
Private Placement [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Stock issued for cash, shares | 680,000 | ||||||||
Share price | $ 1 | ||||||||
Prooceds from private placement | $ 250,000 | ||||||||
Stock issued for cash, value | 680,000 | ||||||||
Private Placement One [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Prooceds from private placement | 80,000 | ||||||||
Private Placement Two [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Prooceds from private placement | 100,000 | ||||||||
Private Placement Three [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Prooceds from private placement | $ 250,000 | ||||||||
Zensports LLC [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Stock issued for acquisitions, shares | 6,500,000 | ||||||||
Ultimate Gamer LLC [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Stock issued for acquisitions, shares | 1,500,000 | ||||||||
Excel Family Partners LLLP [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Stock issued for cash, shares | 1,000,000 | ||||||||
Zen SRQ LLC [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Number of shares sold to investors | 833,332 | ||||||||
Price per share | $ 0.30 | ||||||||
Stock issued for cash, shares | 833,332 | ||||||||
Core Speed LLC [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Stock issued for cash, shares | 333,333 | ||||||||
Eleven Third Party Investors [Member] | Private Placement [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Proceeds from sale of equity | $ 750,000 | ||||||||
Number of shares sold to investors | 750,000 | ||||||||
Price per share | $ 1 | ||||||||
Series A Convertible Preferred Stock [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Preferred stock, shares authorized | 2,000,000 | ||||||||
Conversion of stock, shares issued | 0 | ||||||||
Preferred stock shares outstanding | 0 | 0 | |||||||
Series B Convertible Preferred Stock [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Preferred stock, shares authorized | 12,000 | ||||||||
Conversion of stock, shares issued | 0 | 0 | |||||||
Preferred stock shares outstanding | 11,693 | 11,693 | |||||||
Series C Convertible Preferred Stock [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Preferred stock, shares authorized | 6,700,000 | ||||||||
Series C Convertible Preferred Stock [Member] | Excel Family Partners LLLP [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Number of shares sold to investors | 1,000,000 | ||||||||
Price per share | $ 0.30 | ||||||||
Sale of stock, value | $ 300,000 | ||||||||
Series C Convertible Preferred Stock [Member] | Core Speed LLC [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Number of shares sold to investors | 333,333 | ||||||||
Price per share | $ 0.30 | ||||||||
Sale of stock, value | $ 100,000 | ||||||||
Series A Preferred Stock [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Preferred stock, shares authorized | 2,000,000 | 2,000,000 | |||||||
Preferred stock liquidation preference | $ 0.10 | ||||||||
Preferred stock voting rights | 100 | ||||||||
Conversion of shares | 100 | ||||||||
Conversion of common stock | Common Stock at a conversion rate of one hundred (100) shares of Common Stock for every one (I) share of Series A Convertible Preferred Stock | ||||||||
Preferred stock shares outstanding | 0 | 0 | |||||||
Series B Preferred Stock [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Preferred stock, shares authorized | 12,000 | 12,000 | |||||||
Preferred stock liquidation preference | $ 1 | ||||||||
Conversion of shares | 100 | ||||||||
Proceeds from sale of equity | $ 6,000,000 | ||||||||
Preferred stock shares outstanding | 11,693 | 11,693 | |||||||
Series C Preferred Stock [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Preferred stock, shares authorized | 6,700,000 | 6,700,000 | |||||||
Preferred stock liquidation preference | $ 0.30 | ||||||||
Proceeds from sale of equity | $ 6,000,000 | ||||||||
Liquidation percenatge | 6% | ||||||||
Preferred stock shares outstanding | 2,499,998 | 2,499,998 | |||||||
Stock issued for compensation, shares | 2,980,000 | ||||||||
Share price | $ 0.30 | ||||||||
Series C Preferred Stock [Member] | Related Party [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Number of shares sold to investors | 2,166,666 | ||||||||
Price per share | $ 0.30 | ||||||||
Sale of stock, value | $ 650,000 |
SCHEDULE OF OUTSTANDING AND EXE
SCHEDULE OF OUTSTANDING AND EXERCISABLE OPTIONS (Details) - $ / shares | 6 Months Ended | |
Sep. 15, 2023 | Dec. 31, 2023 | |
Retirement Benefits [Abstract] | ||
Number of options outstanding, beginning balance | 3,250,000 | |
Weighted average exercise price ouutstanding, beginning balance | $ 0.50 | |
Number of options, graned | ||
Weighted average exercise price, graned | ||
Number of options, exercised | ||
Weighted average exercise price, exercised | ||
Number of options, expired | ||
Weighted average exercise price, expired | ||
Number of options, forfeited | 125,000 | 125,000 |
Weighted average exercise price, forfeited | $ 0.50 | |
Number of options outstanding, ending balance | 3,125,000 | |
Weighted average exercise price ouutstanding, ending balance | $ 0.50 | |
Number of options, exercisable | 1,231,944 | |
Weighted average exercise price, exercisable | $ 0.50 |
STOCK OPTIONS (Details Narrativ
STOCK OPTIONS (Details Narrative) - $ / shares | 6 Months Ended | ||||
Sep. 15, 2023 | Apr. 10, 2023 | Apr. 10, 2023 | Dec. 31, 2023 | Dec. 28, 2023 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Exercise price | $ 0.50 | ||||
Number of options, forfeited | 125,000 | 125,000 | |||
2021 Stock Option Plan [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Issuance of common stock for cash, shares | 3,250,000 | ||||
Exercise price | $ 0.50 | $ 0.50 | |||
Number of shares authorized but unissued | 5,960,000 | 5,960,000 | |||
Awards vest percentage | 10% | ||||
2023 Plan [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Shares available for future issuance | 2,835,000 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||||||||
Mar. 01, 2024 | Nov. 02, 2023 | Oct. 31, 2023 | Feb. 06, 2023 | Jan. 10, 2023 | Aug. 10, 2022 | May 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Jun. 30, 2023 | |
Product Liability Contingency [Line Items] | ||||||||||||
Annual salary | $ 275,000 | $ 275,000 | $ 1,740,189 | $ 1,218,856 | $ 2,555,530 | $ 3,082,499 | ||||||
Contingent consideration | ||||||||||||
Net loss | $ 8,788,233 | $ 1,626,572 | $ 13,846,535 | $ 3,978,237 | ||||||||
Bi-monthly compensation per hour | $ 200 | |||||||||||
Common stock shares | 350,000 | |||||||||||
Accrual for remaining balance of contract | $ 262,834 | |||||||||||
Issuance of surety bond | $ 500,000 | |||||||||||
Annual premium cost | 12,500 | |||||||||||
Mark Thomas [Member] | License and Service [Member] | TUNISIA | ||||||||||||
Product Liability Contingency [Line Items] | ||||||||||||
Cash bonus | $ 50,000 | |||||||||||
Contingent consideration | $ 50,000 | |||||||||||
Mark Thomas [Member] | License and Service [Member] | Other than State of Tennessee [Member] | ||||||||||||
Product Liability Contingency [Line Items] | ||||||||||||
Contingent consideration | $ 100,000 | |||||||||||
Expected percenage of commitments and contingencies | 0.01% | |||||||||||
Employment Agreement [Member] | Mark Thomas [Member] | ||||||||||||
Product Liability Contingency [Line Items] | ||||||||||||
Annual salary | $ 380,000 | |||||||||||
Supplement To Offer Agreement [Member] | Mark Thomas [Member] | Employee Severance [Member] | ||||||||||||
Product Liability Contingency [Line Items] | ||||||||||||
Annual salary | $ 380,000 | |||||||||||
Supplement To Offer Agreement [Member] | Mark Thomas [Member] | License and Service [Member] | ||||||||||||
Product Liability Contingency [Line Items] | ||||||||||||
Gross gaming revenue | $ 1,000,000 | |||||||||||
Cash bonus eligible percentage | 8% | |||||||||||
Supplement To Offer Agreement [Member] | Mark Thomas [Member] | License and Service [Member] | Maximum [Member] | ||||||||||||
Product Liability Contingency [Line Items] | ||||||||||||
Net loss | $ 6,197,719 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||||||||||||||||||
Feb. 04, 2024 | Dec. 29, 2023 | Dec. 28, 2023 | Dec. 27, 2023 | Sep. 30, 2023 | May 05, 2023 | Jan. 10, 2023 | Sep. 12, 2022 | Aug. 16, 2022 | Jul. 26, 2022 | Jul. 11, 2022 | Jun. 14, 2022 | Dec. 30, 2020 | Apr. 27, 2020 | Jul. 31, 2022 | Sep. 30, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Sep. 14, 2023 | Jul. 18, 2023 | Feb. 27, 2023 | Feb. 24, 2023 | Feb. 22, 2022 | |
Related Party Transaction [Line Items] | |||||||||||||||||||||||
Payment of related party debt | $ 35,000 | ||||||||||||||||||||||
Purchase and redemption of stock, value | $ 22,000 | ||||||||||||||||||||||
Principal amount | $ 1,600,000 | ||||||||||||||||||||||
Warrants exercisable | 1,600,000 | 4,000,000 | |||||||||||||||||||||
Maturity date | Nov. 04, 2023 | ||||||||||||||||||||||
Funding fee | $ 160,000 | ||||||||||||||||||||||
Warrant exercise price | $ 0.25 | $ 0.25 | |||||||||||||||||||||
Conversion price | $ 0.50 | ||||||||||||||||||||||
Maximum borrowing capacity | $ 2,000,000 | $ 4,000,000 | $ 250,000 | ||||||||||||||||||||
Monthly lease payment | $ 1,600 | $ 6,500 | |||||||||||||||||||||
Former Note [Member] | |||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||
Principal amount | $ 1,540,000 | ||||||||||||||||||||||
Extinguishment of debt | $ 1,135,000 | $ 10,366,653 | $ 10,366,653 | ||||||||||||||||||||
Conversion price | $ 0.40 | $ 0.40 | |||||||||||||||||||||
Share price | $ 0.50 | $ 0.50 | |||||||||||||||||||||
Conversion percentage | 80% | 80% | |||||||||||||||||||||
Maximum borrowing capacity | $ 10,000,000 | $ 5,000,000 | 4,000,000 | ||||||||||||||||||||
Fifth Amendment [Member] | |||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||
Warrants exercisable | 2,460,000 | ||||||||||||||||||||||
Maximum borrowing capacity | $ 2,000,000 | ||||||||||||||||||||||
Promissory Note [Member] | |||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||
Proceeds from notes payable, related party | $ 35,000 | ||||||||||||||||||||||
Interest rate per annum | 10% | 5% | |||||||||||||||||||||
Core Speed LLC [Member] | |||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||
Payments to acquire equity securities | $ 2,000,000 | ||||||||||||||||||||||
Core Speed LLC [Member] | Series C Convertible Preferred Stock [Member] | |||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||
Sale of stock | 333,333 | ||||||||||||||||||||||
Sale of price per share | $ 0.30 | ||||||||||||||||||||||
Sale of stock, value | $ 100,000 | ||||||||||||||||||||||
Excel Family Partners LLLP [Member] | |||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||
Increase in non-revolving line of credit | $ 2,000,000 | ||||||||||||||||||||||
Principal amount | $ 10,000,000 | $ 5,000,000 | $ 4,000,000 | ||||||||||||||||||||
Warrants exercisable | 3,400,000 | 1,000,000 | 4,000,000 | ||||||||||||||||||||
Excel Family Partners LLLP [Member] | Series C Convertible Preferred Stock [Member] | |||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||
Sale of stock | 1,000,000 | ||||||||||||||||||||||
Sale of price per share | $ 0.30 | ||||||||||||||||||||||
Sale of stock, value | $ 300,000 | ||||||||||||||||||||||
Ultimate Gamer LLC [Member] | |||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||
Number of shares issued | 1,500,000 | ||||||||||||||||||||||
Zen SRQ LLC [Member] | |||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||
Sale of stock | 833,332 | ||||||||||||||||||||||
Sale of price per share | $ 0.30 | ||||||||||||||||||||||
Proceeds from issuance of preferred stock | $ 250,000 | ||||||||||||||||||||||
Zen SRQ LLC [Member] | Former Member Of Board Of Directors [Member] | |||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||
Ownership percentage by noncontrolling interest | 25% | ||||||||||||||||||||||
Chief Executive Officer [Member] | |||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||
Annual base salary | $ 380,000 | ||||||||||||||||||||||
Chief Executive Officer [Member] | Promissory Note [Member] | |||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||
Principal amount | $ 1,700,000 | ||||||||||||||||||||||
Chief Financial Officer [Member] | |||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||
Payment of related party debt | $ 17,837 | $ 20,000 | |||||||||||||||||||||
Settlement liabilities | $ 77,000 | ||||||||||||||||||||||
Purchase and redemption of stock, shares | 2,000,000 | ||||||||||||||||||||||
Accrued expenses | $ 20,000 | ||||||||||||||||||||||
Gain on assignment of assets | 2,163 | ||||||||||||||||||||||
Purchase and redemption of stock, value | 22,000 | ||||||||||||||||||||||
Chief Financial Officer [Member] | Promissory Note [Member] | |||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||
Payment of related party debt | $ 35,000 | ||||||||||||||||||||||
Proceeds from notes payable, related party | $ 30,000 | ||||||||||||||||||||||
Interest rate per annum | 10% | 10% | |||||||||||||||||||||
Principal amount | $ 35,000 | ||||||||||||||||||||||
Employment Agreement [Member] | Chief Executive Officer [Member] | |||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||
Terms of award | 3 years | ||||||||||||||||||||||
Annual base salary | $ 500,000 | ||||||||||||||||||||||
Employment Agreement [Member] | Chief Executive Officer [Member] | John Lins - CEO | |||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||
Accrued bonuses | $ 112,000 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||||||||||||||||
Mar. 01, 2024 | Feb. 27, 2024 | Feb. 23, 2024 | Feb. 19, 2024 | Feb. 04, 2024 | Jan. 08, 2024 | Nov. 02, 2023 | Sep. 30, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Apr. 24, 2024 | Dec. 29, 2023 | Jun. 30, 2023 | May 05, 2023 | Feb. 24, 2023 | Aug. 16, 2022 | Feb. 22, 2022 | |
Subsequent Event [Line Items] | |||||||||||||||||||
Operating lease, payments | $ 1,600 | $ 6,500 | |||||||||||||||||
Common stock, shares, issued | 400,000 | 67,821,632 | 67,821,632 | 41,905,000 | |||||||||||||||
Proceeds from issuance of common stock | $ 300,000 | $ 1,430,000 | |||||||||||||||||
Principal balance of loans | $ 1,600,000 | ||||||||||||||||||
Damages amount | $ 6,500,000 | ||||||||||||||||||
Annual salary | $ 275,000 | $ 275,000 | $ 1,740,189 | $ 1,218,856 | $ 2,555,530 | $ 3,082,499 | |||||||||||||
Maximum borrowing capacity | $ 4,000,000 | $ 2,000,000 | $ 250,000 | ||||||||||||||||
Fifth Amended [Member] | Subsequent Event [Member] | |||||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||||
Principal balance of loans | $ 5,685,000 | ||||||||||||||||||
Current borrowing capacity | $ 475,000 | ||||||||||||||||||
First Amendment [Member] | |||||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||||
Notes payments | $ 59,665 | ||||||||||||||||||
Notes payment term | 24 months | ||||||||||||||||||
First Amendment [Member] | Chief Executive Officer [Member] | |||||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||||
Principal balance of loans | $ 1,700,000 | ||||||||||||||||||
Repayment of promissory note | $ 425,000 | ||||||||||||||||||
Fifth Amendment [Member] | |||||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||||
Maximum borrowing capacity | $ 2,000,000 |