Document And Entity Information
Document And Entity Information - shares | 6 Months Ended | |
Dec. 31, 2022 | Mar. 17, 2023 | |
Document Information Line Items | ||
Entity Registrant Name | Lucy Scientific Discovery Inc. | |
Trading Symbol | LSDI | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --06-30 | |
Entity Common Stock, Shares Outstanding | 16,341,411 | |
Amendment Flag | false | |
Entity Central Index Key | 0001865127 | |
Entity Current Reporting Status | No | |
Entity Filer Category | Non-accelerated Filer | |
Document Period End Date | Dec. 31, 2022 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Shell Company | false | |
Entity Ex Transition Period | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 001-41616 | |
Entity Incorporation, State or Country Code | Z4 | |
Entity Tax Identification Number | 00-0000000 | |
Entity Address, Address Line One | 301-1321 Blanshard Street | |
Entity Address, Address Line Two | Victoria | |
Entity Address, State or Province | BC | |
Entity Address, City or Town | British Columbia | |
Entity Address, Country | CA | |
Entity Address, Postal Zip Code | V8W 0B6 | |
City Area Code | (778) | |
Local Phone Number | 410-5195 | |
Title of 12(b) Security | Common Shares, no par value | |
Security Exchange Name | NASDAQ | |
Entity Interactive Data Current | Yes |
Condensed Consolidated Interim
Condensed Consolidated Interim Balance Sheets - USD ($) | Dec. 31, 2022 | Jun. 30, 2022 |
Current assets | ||
Cash | $ 26,059 | $ 53,379 |
Prepaid expenses | 124,833 | 185,723 |
Other assets – GST receivable | 37,007 | 13,232 |
Digital assets | 34,106 | |
Deferred financing costs, current | 1,278,252 | 1,612,228 |
Total current assets | 1,466,151 | 1,898,668 |
Non-current assets | ||
Deferred financing costs, noncurrent | 1,391,362 | 1,869,969 |
Property, plant, and equipment | 843,500 | 843,500 |
Right of use asset | 1,057,183 | |
Long-term deposits | 18,458 | 19,401 |
TOTAL ASSETS | 4,776,654 | 4,631,538 |
Current liabilities | ||
Accounts payable and accrued liabilities | 3,185,853 | 2,814,532 |
Convertible notes, current | 2,924,092 | 825,707 |
Due to related parties | 2,039,257 | 1,775,372 |
Notes payable – related parties | 296,054 | 305,082 |
Lease liability, current | 321,424 | 89,396 |
Total current liabilities | 8,766,680 | 5,810,089 |
Non-current liabilities | ||
Convertible notes, noncurrent | 1,346,084 | 2,972,161 |
Lease liability, noncurrent | 1,388,658 | 571,062 |
Notes payable, noncurrent | 59,067 | 56,176 |
TOTAL LIABILITIES | 11,560,489 | 9,409,488 |
STOCKHOLDERS’ EQUITY (DEFICIT) | ||
Common shares, no par value; unlimited shares authorized; 10,443,560 shares issued and outstanding as of December 31, 2022 and June 30, 2022, respectively. | 30,790,410 | 30,790,410 |
Accumulated deficit | (37,732,890) | (35,427,342) |
Accumulated other comprehensive gain (loss) | 158,645 | (141,018) |
TOTAL STOCKHOLDERS’ EQUITY (DEFICIT) | (6,783,835) | (4,777,950) |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | $ 4,776,654 | $ 4,631,538 |
Condensed Consolidated Interi_2
Condensed Consolidated Interim Balance Sheets (Parentheticals) - $ / shares | 6 Months Ended | 12 Months Ended |
Dec. 31, 2022 | Jun. 30, 2022 | |
Statement of Financial Position [Abstract] | ||
Common shares, no par value (in Dollars per share) | ||
Common shares, shares authorized | Unlimited | Unlimited |
Common shares, shares issued | 10,443,560 | 10,443,560 |
Common shares, shares outstanding | 10,443,560 | 10,443,560 |
Condensed Consolidated Interi_3
Condensed Consolidated Interim Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Statement [Abstract] | ||||
Selling, general and administrative expense | $ 448,534 | $ 763,523 | $ 1,277,093 | $ 1,478,007 |
Total expenses | 448,534 | 763,523 | 1,277,093 | 1,478,007 |
Other expense (income) | ||||
Interest expense | 485,278 | 598,339 | 1,028,499 | 1,072,609 |
Change in fair value of warrant liability | 170,923 | 322,226 | ||
Other income | (5) | (44) | ||
Total other expense (income) | 485,273 | 769,262 | 1,028,455 | 1,394,835 |
Income tax expense | ||||
Net loss | (933,807) | (1,532,785) | (2,305,548) | (2,872,842) |
Foreign exchange translation adjustment, net of tax of $nil | (101,117) | 11,243 | 299,663 | 146,021 |
Comprehensive loss | $ (1,034,924) | $ (1,521,542) | $ (2,005,885) | $ (2,726,821) |
Net loss per common share | ||||
Basic net loss per common share (in Dollars per share) | $ (0.09) | $ (0.15) | $ (0.22) | $ (0.42) |
Weighted average number of common shares outstanding | ||||
Basic weighted average number of common shares outstanding (in Shares) | 10,443,560 | 10,139,810 | 10,443,560 | 6,914,511 |
Condensed Consolidated Interi_4
Condensed Consolidated Interim Statements of Operations and Comprehensive Loss (Unaudited) (Parentheticals) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Statement [Abstract] | ||||
Diluted net loss per common share | $ (0.09) | $ (0.15) | $ (0.22) | $ (0.28) |
Diluted weighted average number of common shares outstanding | 10,443,560 | 10,139,810 | 10,443,560 | 10,139,810 |
Condensed Consolidated Interi_5
Condensed Consolidated Interim Statements of Stockholders Deficit (Unaudited) - USD ($) | Class A voting Common shares | Class B non-voting Common shares | Common shares | Accumulated deficit | Accumulated other comprehensive income (loss) | Total |
Balance at Jun. 30, 2021 | $ 23,568,439 | $ (29,571,226) | $ (353,302) | $ (6,356,089) | ||
Balance (in Shares) at Jun. 30, 2021 | 1 | 6,476,753 | ||||
Translation adjustment | 134,778 | 134,778 | ||||
Net loss | (1,340,057) | (1,340,057) | ||||
Balance at Sep. 30, 2021 | $ 23,568,439 | (30,911,283) | (218,524) | (7,546,725) | ||
Balance (in Shares) at Sep. 30, 2021 | 1 | 6,476,753 | ||||
Balance at Jun. 30, 2021 | $ 23,568,439 | (29,571,226) | (353,302) | (6,356,089) | ||
Balance (in Shares) at Jun. 30, 2021 | 1 | 6,476,753 | ||||
Translation adjustment | 146,021 | |||||
Net loss | (2,872,842) | |||||
Balance at Dec. 31, 2021 | $ 30,344,719 | (32,444,068) | (207,281) | $ (2,306,630) | ||
Balance (in Shares) at Dec. 31, 2021 | 10,139,810 | |||||
Shares issued for exercise of warrants (in Shares) | (3,477,919) | |||||
Balance at Sep. 30, 2021 | $ 23,568,439 | (30,911,283) | (218,524) | $ (7,546,725) | ||
Balance (in Shares) at Sep. 30, 2021 | 1 | 6,476,753 | ||||
Translation adjustment | 11,243 | 11,243 | ||||
Net loss | (1,532,785) | (1,532,785) | ||||
Balance at Dec. 31, 2021 | $ 30,344,719 | (32,444,068) | (207,281) | (2,306,630) | ||
Balance (in Shares) at Dec. 31, 2021 | 10,139,810 | |||||
Share reorganization | $ (23,568,439) | $ 23,568,439 | ||||
Share reorganization (in Shares) | (1) | (6,476,753) | 6,476,753 | |||
Reclassification of warrants | $ 6,392,476 | 6,392,476 | ||||
Shares issued for exercise of warrants | $ 48,866 | 48,866 | ||||
Shares issued for exercise of warrants (in Shares) | 3,477,919 | |||||
Shares issued for conversion of convertible notes | $ 314,016 | 314,016 | ||||
Shares issued for conversion of convertible notes (in Shares) | 185,138 | |||||
Share purchase options | $ 20,922 | 20,922 | ||||
Balance at Jun. 30, 2022 | $ 30,790,410 | (35,427,342) | (141,018) | (4,777,950) | ||
Balance (in Shares) at Jun. 30, 2022 | 10,443,560 | |||||
Translation adjustment | 400,780 | 400,780 | ||||
Net loss | (1,371,741) | (1,371,741) | ||||
Balance at Sep. 30, 2022 | $ 30,790,410 | (36,799,083) | 259,762 | (5,748,911) | ||
Balance (in Shares) at Sep. 30, 2022 | 10,443,560 | |||||
Balance at Jun. 30, 2022 | $ 30,790,410 | (35,427,342) | (141,018) | (4,777,950) | ||
Balance (in Shares) at Jun. 30, 2022 | 10,443,560 | |||||
Translation adjustment | 299,663 | |||||
Net loss | (2,305,548) | |||||
Balance at Dec. 31, 2022 | $ 30,790,410 | (37,732,890) | 158,645 | (6,783,835) | ||
Balance (in Shares) at Dec. 31, 2022 | 10,443,560 | |||||
Balance at Sep. 30, 2022 | $ 30,790,410 | (36,799,083) | 259,762 | (5,748,911) | ||
Balance (in Shares) at Sep. 30, 2022 | 10,443,560 | |||||
Translation adjustment | (101,117) | (101,117) | ||||
Net loss | (933,807) | (933,807) | ||||
Balance at Dec. 31, 2022 | $ 30,790,410 | $ (37,732,890) | $ 158,645 | $ (6,783,835) | ||
Balance (in Shares) at Dec. 31, 2022 | 10,443,560 |
Condensed Consolidated Interi_6
Condensed Consolidated Interim Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Operating activities | ||
Net loss | $ (2,305,548) | $ (2,872,842) |
Items not involving cash: | ||
Amortization expense | 46,755 | |
Interest expense | 1,028,499 | 824,268 |
Amortization of debt discount | 5,715 | 2,415 |
Shares issued for services | 51,838 | |
Share-based payments | 20,922 | |
Change in fair value of warrant liability | 322,226 | |
Unrealized foreign exchange translation adjustment | 197,273 | |
Changes in non-cash working capital: | ||
Prepaid expenses and long-term deposits | 920 | (11,668) |
Other assets – GST receivable | (24,839) | (12,062) |
Accounts payable and accrued liabilities | 420,264 | 185,478 |
Lease liability | (148,004) | (56,663) |
Due to related parties | 356,160 | (30,911) |
Net cash flows used in operating activities | (370,967) | (1,628,837) |
Investing activities | ||
Sale of digital assets | 34,106 | |
Purchase of digital assets | (33,365) | |
Net cash provided by (used in) investing activities | 34,106 | (33,365) |
Financing activities | ||
Net proceeds from Convertible Notes | 340,000 | 2,179,500 |
Net proceeds from exercise of Warrants | 48,866 | |
Deferred share issuance costs | (29,131) | (448,125) |
Net cash flows provided by financing activities | 310,869 | 1,780,241 |
Effect of foreign exchange on cash | (1,328) | 9,937 |
(Decrease) increase in cash | (27,320) | 127,976 |
Cash, beginning of period | 53,379 | 246,030 |
Cash, end of period | 26,059 | 374,006 |
Supplemental disclosures of cash flow information: | ||
Interest paid in cash | ||
Income taxes paid in cash | ||
Non-Cash activities for investing and financing activities: | ||
Deferred offering costs accrued but unpaid | 59,386 | 477,526 |
Reclassification of warrants to share capital | 6,392,476 | |
Renewal of lease | $ 1,144,349 | |
Shares issued for conversion of convertible notes | $ 314,016 |
Nature of the Organization and
Nature of the Organization and Business | 6 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF THE ORGANIZATION AND BUSINESS | NOTE 1 — NATURE OF THE ORGANIZATION AND BUSINESS Lucy Scientific Discovery Inc. (“we,” “our,” “us,” or the “Company”) was incorporated under the Business Corporations Act (British Columbia) on February 17, 2017. The Company previously specialized in developing supply chain products, services, and distribution channels for the cannabis industry in the areas of cannabis production, cannabis extracts, edibles and other pharmaceutical grade products. The Company changed its name from Hollyweed North Cannabis Inc. to Lucy Scientific Discovery Inc. and, under a new business model, is engaged in the research, manufacturing and commercialization of psychedelic products. The Company’s registered office is Suite 301 — 1321 Blanshard Street, Victoria, British Columbia, Canada. Subsidiaries that are active and wholly-owned by the Company and that have each been incorporated under the Business Corporations Act of British Columbia to facilitate its business activities include: ● TerraCube International Inc. — On October 4, 2017, the Company acquired control of TerraCube International Inc. (“TerraCube”), formerly Crop2Scale International Inc. TerraCube innovates, develops and produces highly controlled agricultural grow environments for plant manufacturing and replication. ● LSDI Manufacturing Inc. — On June 29, 2017, the Company incorporated LSDI Manufacturing Inc. (“LMI”), under the Business Corporations Act (British Columbia) for the purposes of cannabis extraction and manufacturing of adult-use and pharmaceutical products. LMI held a Health Canada Processor’s License under the Cannabis Act but has never engaged in plant-touching activities up to the date the Board of Directors approved these financial statements. On August 10, 2021, the Health Canada Standard Processor’s License was voluntarily withdrawn by LMI with the revocation effective September 3, 2021. In August 2021, Health Canada’s Office of Controlled Substances granted us a Controlled Drugs and Substances Dealer’s Licence under Part J of the Food and Drug Regulations promulgated under the Food and Drugs Act (Canada), or a Dealer’s Licence. The Dealer’s Licence, which we hold through one of our wholly owned subsidiaries, authorizes us to develop and produce (through cultivation, extraction or synthesis) certain restricted substances. The Company intends to develop and produce these restricted substances as pharmaceutical-grade active pharmaceutical ingredients and their raw material. Impact of COVID-19 In March 2020, the World Health Organization declared COVID-19 a global pandemic. This contagious disease outbreak, which has continued to spread, and any related adverse public health developments, has adversely affected workforces, economies, and financial markets globally, and led to an economic downturn. To date, COVID-19 has not had any material impact on the Company’s operations; however, it is possible that estimates in these consolidated financial statements may change in the near term as a result of COVID-19 variants. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Company’s significant accounting policies are disclosed in the audited consolidated financial statements for the years ended June 30, 2022 and 2021, which are contained in the Company’s final prospectus for its IPO, dated February 8, 2023, and filed with the Securities and Exchange Commission (“SEC”) pursuant to Rule 424(b)(4) under the Securities Act of 1933, as amended. Since the date of those audited consolidated financial statements, there have been no changes to its significant accounting policies. Basis of Presentation and Principles of Consolidation The accompanying condensed consolidated interim balance sheet as of June 30, 2022, which has been derived from audited financial statements, and the unaudited condensed consolidated interim financial statements as of and for the three and six months ended December 31, 2022 and 2021, have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) regarding interim financial reporting and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and footnote disclosures in these unaudited condensed consolidated interim financial statements, normally included in financial statements prepared in accordance with U.S. GAAP, have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, the unaudited condensed consolidated interim financial statements reflect all adjustments necessary for a fair statement of the Company’s financial position at December 31, 2022, the Company’s operating results for the three and six months ended December 31, 2022 and 2021, and the Company’s cash flows for the six months ended December 31, 2022 and 2021. The unaudited condensed consolidated interim financial statements and notes should be read in conjunction with the Company’s audited financial statements and notes thereto for the year ended June 30, 2022. The condensed consolidated interim financial statements include the accounts of the Company and our subsidiaries in which we have controlling financial interest. All inter-company balances and transactions among the companies have been eliminated upon consolidation. Use of Estimates The preparation of the condensed consolidated interim financial statements requires management to make estimates and assumptions that affect the reported amounts of certain assets, liabilities, revenue, and expenses as well as the related disclosures. The Company must often make estimates about effects of matters that are inherently uncertain and will likely change in subsequent periods. Actual results could differ materially from those estimates. Functional and Presentation Currency The Company’s reporting currency is the United States Dollar (“USD”). The Company’s functional currency is the local currency, Canadian Dollar (“CAD”). Assets and liabilities of these operations are translated into USD at the end-of-period exchange rates; income and expenses are translated using the average exchange rates for the reporting period. Resulting cumulative translation adjustments are recorded as a component of stockholder’s equity (deficit) in the consolidated balance sheet in accumulated other comprehensive loss. Significant Accounting Policies The accounting policies applied in the preparation of these interim financial statements are consistent with those applied and disclosed in note 2 to the annual financial statements except as noted below: Recently Issued Accounting Pronouncements From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that the Company adopts as of the specified effective date. The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it is (i) no longer an emerging growth company or (ii) has affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, these financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates. In August 2020, the FASB issued ASU 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40). The ASU simplifies the accounting for certain financial instruments with characteristics of liabilities and equity. The FASB reduced the number of accounting models for convertible debt and convertible preferred stock instruments and made certain disclosure amendments to improve the information provided to users. In addition, the FASB amended the derivative guidance for the own stock scope exception and certain aspects of the earnings-per-share guidance. The amendments are effective for interim and annual periods beginning after December 15, 2021, with early adoption permitted for after December 15, 2020. The adoption of ASU 2020-06 had no impact on the Company’s condensed consolidated interim financial statements. |
Digital assets
Digital assets | 6 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
DIGITAL ASSETS | NOTE 3 — DIGITAL ASSETS During the six months ended December 31, 2022, the Company sold approximately 34,106 Tether for $34,106 in cash. |
Property, Plant and Equipment
Property, Plant and Equipment | 6 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT | NOTE 4 — PROPERTY, PLANT AND EQUIPMENT On February 25, 2021, the Company entered an agreement whereby the Company acquired certain equipment for consideration of 990,741 Class B common non-voting shares with a fair value of $1,687,032 (CAD$2,140,000). At the time of acquisition, the equipment had a fair value of $843,500. The excess of fair value of the Class B common non-voting shares above the fair value of the equipment of $843,532 was recorded as compensation expense within selling, general and administrative expenses The equipment is not in use and therefore no depreciation has been taken for the six months ended December 31, 2022 and 2021. |
Accounts Payable and Accrued Li
Accounts Payable and Accrued Liabilities | 6 Months Ended |
Dec. 31, 2022 | |
Payables and Accruals [Abstract] | |
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | NOTE 5 — ACCOUNTS PAYABLE AND ACCRUED LIABILITIES Accounts payable and accrued liabilities consist of the following: December 31, June 30, $ $ Trade payables 3,011,033 2,419,118 Vacation accrual 13,153 23,225 Accrued liabilities 161,667 372,189 3,185,853 2,814,532 The Company entered into debt settlement and subscription agreements with various vendors under which liabilities with a face value of $1,427,755 (CAD$1,933,713) as at December 31, 2022 will be settled upon initial public offering through the issuance of common shares at a 40% discount to the price of an initial public offering. |
Right of Use Asset and Lease Li
Right of Use Asset and Lease Liability | 6 Months Ended |
Dec. 31, 2022 | |
Right of Use Asset and Lease Liability [Abstract] | |
RIGHT OF USE ASSET AND LEASE LIABILITY | NOTE 6 — RIGHT OF USE ASSET AND LEASE LIABILITY The lease liability relates to a Warehouse Lease. The lease commenced on August 1, 2017 with an initial term of 5 years expiring on July 31, 2022. On August 1, 2022, the Company exercised its option to renew for 5 years. The new term starts on August 1, 2022 and ends on July 31, 2027, with an option to extend the lease for an additional five nil nil Leases with an initial term of less than 12 months are not recorded on the balance sheet. We recognize lease expense for these leases on a straight-line basis over the lease term. The long-term deposit of $18,458 (CAD$25,000) relates to a security deposit on the Warehouse Lease which is expected to be returned to the Company at the completion of the lease, including renewal periods. The maturity of the lease liability is as follows: For the years ended June 30, Amount $ 2023 156,633 2024 331,214 2025 368,741 2026 407,899 2027 429,110 Thereafter 1,602,227 Total lease payments 3,374,141 Less: Unamortized interest (1,585,742 ) Total lease liability 1,710,082 |
Notes Payable and Notes Payable
Notes Payable and Notes Payable – Related Parties | 6 Months Ended |
Dec. 31, 2022 | |
Notes Payable [Abstract] | |
NOTES PAYABLE AND NOTES PAYABLE – RELATED PARTIES | The following table summarizes the future principal repayments required on the Company’s notes payable and notes payable – related parties: For the years ended June 30, Amount $ 2023 296,054 2024 59,067 Total notes payable 355,121 |
Convertible Notes
Convertible Notes | 6 Months Ended |
Dec. 31, 2022 | |
Convertible Notes [Abstract] | |
CONVERTIBLE NOTES | NOTE 8 — CONVERTIBLE NOTES During the six months ended December 31, 2022, the Company issued unsecured convertible notes with a face value of $340,000 which bear an interest rate of 8% per annum. The convertible notes are convertible into common shares at a 40% discount to the price of an initial public offering and mature between August 24, 2024 and December 28, 2024. During the three and six months ended December 31, 2022, the Company incurred interest expense of $52,187 and $130,701, respectively (three and six months ended December 31, 2021 — $65,411 and $72,655, respectively) with respect to the convertible notes. |
Line of Credit
Line of Credit | 12 Months Ended |
Jun. 30, 2022 | |
Line of Credit [Abstract] | |
LINE OF CREDIT | NOTE 9 — LINE OF CREDIT On November 5, 2020, the Company established a line of credit of $4,928,382 (CAD$6,675,000). The line of credit is secured by the Company’s assets, bears an interest rate of 8% per annum and matures on November 5, 2023. The Company may draw up to $369,167 (CAD$500,000) per quarter under the line of credit beginning January 15, 2021. Pursuant to entering the line of credit, the Company issued the lender warrants to purchase 3,906,209 common shares of the Company at an exercise price of $1.60 (CAD$2.16) per common share until November 5, 2025. On January 22, 2021, the Company amended the warrants whereby in the event that the Company effects a closing or closings of convertible notes is the minimum aggregate of (i) $1,000,000, the exercise price of 1,111,112 warrants shall be adjusted to $0.015 (CAD$0.018), (ii) $2,000,000, the exercise price of 2,222,223 warrants shall be adjusted to $0.015 (CAD$0.018), and (iii) $3,000,000, the exercise price of 3,333,334 warrants shall be adjusted to $0.015 (CAD$0.018). The warrants were valued at $4,775,535 and recorded as deferred financing costs to be recognized over the term of the line of credit. During the three and six months ended December 31, 2022 the Company recorded interest expense of $386,125 and $765,040, respectively (three and six months ended December 31, 2021 — $412,088 and $824,222, respectively) related to the warrants. On January 22, 2021, pursuant to the warrant amendment, the Company reclassified 3,906,209 warrants valued at $4,775,535 to warrant liability as the exercise price became variable based on the amount of convertible notes payable raised. The incremental fair value resulting from the warrant amendment of $1,079,468 was recorded as interest expense on the condensed consolidated interim statement of operations and comprehensive loss. On December 8, 2021, the Company reclassified 3,906,209 warrants valued at $6,392,476 to share capital as the exercise price became fixed for the remaining warrants outstanding since the Company had successfully raised $3,000,000 in convertible notes, resolving the contingency affecting the exercise price. Following is a summary of the Company’s warrant liability for the six months ended December 31: December 31, December 31, $ $ Balance, beginning of period — 6,192,883 Warrants reclassified to share capital — (6,392,476 ) Change in fair value of warrant liability — 322,226 Unrealized foreign exchange gain — (122,633 ) Balance, end of period — — Any outstanding principal and accrued interest is subject to mandatory conversion into common shares of the Company at a conversion price of $1.59 (CAD$2.16) per common share upon consummation of an initial public offering and listing of the Company’s common shares. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Dec. 31, 2022 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS’ EQUITY | NOTE 10 — STOCKHOLDERS’ EQUITY Share Capital Stock Split On December 1, 2021, the Company authorized an 18:1 reverse stock split of its issued and outstanding Class B common stock. Also on December 1, 2021, the Company amended its articles to create a single class of non-voting common shares and cancel the Class A voting common shares and Class B non-voting common shares. Pursuant to the amendment, the Class A voting common shares and Class B non-voting common shares were converted on a one-for-one basis into common shares of the Company. Common Stock Issuances and Transfers Upon closing of the initial public offering, the Company will issue to its Chief Executive Officer an award with respect to the number of the Company’s common shares equal to the quotient obtained by dividing (x) $750,000 by (y) the closing price of the Company’s common shares on the closing date of the initial public offering, which award shall be fully vested at the time of issuance. During the six months ended December 31, 2022, the Company had no During the six months December 31, 2021, the Company had the following common stock transactions: On December 8, 2021, the Company issued 3,477,919 common non-voting shares pursuant to the exercise of 3,477,919 warrants with an exercise price of $0.015 (CAD$0.018) per warrant. On December 28, 2021, the Company issued 185,138 common non-voting shares pursuant to the conversion of $300,000 of convertible notes plus $14,016 accrued interest at a conversion price of $1.69 (CAD$2.16) per common non-voting share. Stock Options The following is a summary of the changes in the 2019 Plan during the six months ended December 31, 2021 and 2022: Number of Weighted average exercise price Weighted average remaining life (years) Aggregate intrinsic Balance at June 30, 2021 464,293 2.01 (CAD2.59 ) 2.63 276,294 Balance at December 31, 2021 464,293 2.01 (CAD2.59 ) 2.13 276,294 Balance at June 30, 2022 621,697 2.34 (CAD3.01 ) 1.91 — Expired (54,266 ) (1) 2.35 (CAD3.22 ) — — Balance at December 31, 2022 567,431 2.18 (CAD2.99 ) 1.57 — (1) On September 17, 2022, 54,266 share purchase options expired, unexercised. During the three and six months ended December 31, 2022, the Company recognized share-based payment expense of $ nil nil nil The Company has computed the fair value of options granted using the Black-Scholes option pricing model. The expected term is the estimated period of time that options granted are expected to be outstanding. The Company utilizes the “simplified” method to develop an estimate of the expected term of “plain vanilla” employee option grants. The Company is utilizing an expected volatility figure based on a review of the historical volatilities, over a period of time, equivalent to the expected life of the instrument being valued, of similarly positioned public companies within its industry. The risk-free interest rate was determined from the implied yields from U.S. Treasury zero-coupon bonds with a remaining term consistent with the expected term of the instrument being valued. In addition to the options discussed above, the Company plans to issue 2,114,751 share purchase options to various officers, executive chairman, and directors effective upon closing of the initial public offering. The exercise price of these stock options will be the closing price of the Company’s common shares on the closing date of an initial public offering. These stock options will vest as to 25% of the underlying common shares on the grant date, and the balance of these stock options will vest and become exercisable with respect to 44,057 common shares in 36 equal monthly instalments commencing on the 13 th th Warrants The Company has computed the fair value of warrants issued using the Black-Scholes option pricing model. The expected term used for warrants issued is the contractual term. The Company is utilizing an expected volatility figure based on a review of the historical volatilities, over a period of time, equivalent to the expected life of the instrument being valued, of similarly positioned public companies within its industry. The risk-free interest rate was determined from the implied yields from U.S. Treasury zero-coupon bonds with a remaining term consistent with the expected term of the instrument being valued. Pursuant to entering the line of credit, on January 15, 2021, the Company issued 3,906,209 warrants to purchase 3,906,209 common shares of the Company at an exercise price of $1.60 (CAD$2.16) per common share until November 5, 2025. On January 22, 2021, the Company amended the warrants whereby in the event that the Company effects a closing or closings of convertible notes is the minimum aggregate of (i) $1,000,000, the exercise price of 1,111,112 warrants shall be adjusted to $0.015 (CAD$0.018), (ii) $2,000,000, the exercise price of 2,222,223 warrants shall be adjusted to $0.015 (CAD$0.018), and (iii) $3,000,000, the exercise price of 3,333,334 warrants shall be adjusted to $0.015 (CAD$0.018). The following is a summary of the warrants for the six months ended December 31, 2022 and 2021: Number of warrants Weighted average exercise price Weighted average remaining life Aggregate intrinsic value Balance at June 30, 2021 3,906,209 0.61 (CAD0.76 ) 4.35 4,321,401 Exercised (3,477,919 ) 0.015 (CAD0.018 ) — (4,321,401 ) Balance at December 31, 2021 428,290 1.70 (CAD2.16 ) 3.85 — Balance at June 30, 2022 428,290 1.58 (CAD2.16 ) 3.35 — Balance at December 31, 2022 428,290 1.59 (CAD2.16 ) 2.85 — On December 8, 2021 the Company reclassified 3,906,209 warrants valued at $6,392,476 to share capital as the exercise price became fixed for the remaining warrants outstanding since the Company had successfully raised $3,000,000 in convertible notes, resolving the contingency affecting the exercise price. The Company applied the following assumptions in the Black-Scholes option pricing model: December 8, June 30, Expected life warrants (years) — 4.10 Expected volatility — % 100 % Expected dividend yield — % 0 % Risk-free interest rate — % 0.34 % Black-Scholes value of each warrant $ — $ 0.80 (CAD$1.08 ) |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 11 — RELATED PARTY TRANSACTIONS Included under due to related parties on our consolidated balance sheet as of December 31, 2022 is $2,039,257 (June 30, 2022 — $1,775,372) that relates to wages, short-term benefits and contracted services for key management personnel. The amounts are unsecured and non-interest bearing. As of December 31, 2022, the Company had entered into debt settlement and subscription agreements with various related parties under which liabilities with face value of $701,105 (CAD$946,491) would be settled upon an initial public offering through the issuance of common shares at a 40% discount to the price of an initial public offering. On December 31, 2018, the Company issued a note payable of $144,666 (CAD$200,000) to a director and stockholder of the Company. The note bears interest of 21% per annum, is unsecured and is repayable 90 days subsequent to the successful completion of an initial public offering or a reverse takeover transaction. During the six months ended December 31, 2022, the Company incurred interest expense of $3,944 (CAD$5,250) (December 31, 2021 — $4,166 (CAD$5,250)) with respect to the note payable. During the three six months ended December 31, 2022, the Company made payments of $ nil nil nil nil During the year ended June 30, 2019, the Company issued a series of notes payable totalling $245,768 (CAD $330,000) to a director and stockholder of the Company. The note bears interest of 2% per annum, is unsecured and repayable 90 days subsequent to the successful completion of an initial public offering or a reverse takeover transaction. During the six months ended December 31, 2022, the Company incurred an interest expense of $1,950 (CAD$2,596) (December 31, 2021 — $2,060 (CAD$2,596)). During the three six months ended December 31, 2022, the Company made payments of $ nil nil nil nil On February 25, 2021, the Company entered an agreement whereby the Company acquired certain equipment from the current CEO for consideration of 990,741 Class B common shares with a fair value of $1,687,032 (CAD$2,140,000) (note 4). On February 25, 2021, the Company issued a $500,000 convertible note at 8% interest rate to the CEO of the Company. The convertible note matured on August 25, 2021. The note was modified subsequent to June 30, 2021 whereby the maturity was extended to February 25, 2022. The note is convertible at the option of the holder into common shares at a conversion price of $1.59 (CAD$2.16) per share. During the three and six months ended December 31, 2022, the Company incurred an interest expense of $6,449 and $17,738, respectively (three and six months ended December 31, 2021 — $10,635 and $21,060, respectively) with respect to this note. Following closing of the initial public offering, the Company will issue to its Chief Executive Officer an award with respect to the number of the Company’s common shares equal to the quotient obtained by dividing (x) $750,000 by (y) the closing price of the Company’s common shares on the closing date of the initial public offering, which award shall be fully vested at the time of issuance. The Company plans to issue 2,114,751 share purchase options to various officers and the executive chairman effective following the closing an initial public offering. The exercise price of these stock options will be the closing price of the Company’s common shares on the closing date of an initial public offering. These stock options will vest as to 25% of the underlying common shares on the grant date, and the balance of these stock options will vest and become exercisable with respect to 43,319 common shares in 36 equal monthly instalments commencing on the 13 th th |
Financial Instruments
Financial Instruments | 6 Months Ended |
Dec. 31, 2022 | |
Disclosure Text Block Supplement [Abstract] | |
FINANCIAL INSTRUMENTS | NOTE 12 — FINANCIAL INSTRUMENTS The Company has established a fair value hierarchy that reflects the significance of inputs of valuation techniques used in making fair value measurements as follows: Level 1 — quoted prices in active markets for identical assets or liabilities; Level 2 — inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. from derived prices); and Level 3 — inputs for the asset or liability that are not based on observable market data. The Company’s financial assets and financial liabilities are measured at amortized cost. As at December 31, 2022 and June 30, 2022 the carrying value of the cash, other assets — GST receivable, accounts payable and accrued liabilities and amounts due to related parties approximates the fair value due to the short-term nature of these instruments. The digital assets are categorized as Level 1. If the carrying value of Tether exceeds that lowest price, as quoted on Coinbase, an impairment loss has occurred with respect to that Tether in the amount equal to the difference between its carrying value and such lowest price. It is management’s opinion that the Company is not exposed to significant interest or credit risks arising from this financial instrument. The convertible notes, notes payable, and notes payable — related parties are categorized as Level 2 and have been recorded at amortized cost. The carrying value approximates its fair value due to its relatively short-term nature. It is management’s opinion that the Company is not exposed to significant interest or credit risks arising from these financial instruments. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 13 — SUBSEQUENT EVENTS In connection with the preparation of the condensed consolidated interim financial statements, the Company evaluated subsequent events through March 17, 2023, which was the date the condensed consolidated interim financial statements were issued, and determined that the following subsequent events occurred as of that date: Equity transactions On January 16, 2023, we entered into a strategic investment agreement, or the Strategic Investment Agreement, with Hightimes Holding Corp., (“HHC”), 1252240 BC LTD, a wholly owned subsidiary of HHC, and Trans-High Corporation, a wholly owned subsidiary of HHC, pursuant to which HHC granted to us $833,333 of annual advertising and marketing credits, or Advertising Credits, for three consecutive years, in exchange for 625,000 of our common shares. On February 13, 2023, the Company closed its initial public offering, (“IPO”) of 1,875,000 of the Company’s common shares at a public offering price of $4.00 per share. The gross proceeds from the IPO was $5.8 million, after deducting underwriting discounts and commissions and other offering related expenses payable by the Company. Upon completion of the IPO, the convertible notes in the aggregate principal amount of $4,307,115 were automatically converted into 1,932,006 common shares. Upon completion of the IPO, the related party notes payable in the aggregate amount of $88,707 were automatically converted into 36,962 common shares pursuant to a settlement and subscription agreement. Upon completion of the IPO, accounts payable and due to certain related parties in the aggregate amount of $2,579,299 were automatically converted into 1,074,716 common shares pursuant to settlement and subscription agreements. Upon completion of the IPO, the Company issued 250,000 common shares pursuant to a two-year marketing agreement. Upon completion of the IPO, the Company issued 104,167 common shares pursuant to a donation to the Austin Community Foundation. Stock Plans: The 2021 Equity Incentive Plan, |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 6 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The accompanying condensed consolidated interim balance sheet as of June 30, 2022, which has been derived from audited financial statements, and the unaudited condensed consolidated interim financial statements as of and for the three and six months ended December 31, 2022 and 2021, have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) regarding interim financial reporting and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and footnote disclosures in these unaudited condensed consolidated interim financial statements, normally included in financial statements prepared in accordance with U.S. GAAP, have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, the unaudited condensed consolidated interim financial statements reflect all adjustments necessary for a fair statement of the Company’s financial position at December 31, 2022, the Company’s operating results for the three and six months ended December 31, 2022 and 2021, and the Company’s cash flows for the six months ended December 31, 2022 and 2021. The unaudited condensed consolidated interim financial statements and notes should be read in conjunction with the Company’s audited financial statements and notes thereto for the year ended June 30, 2022. The condensed consolidated interim financial statements include the accounts of the Company and our subsidiaries in which we have controlling financial interest. All inter-company balances and transactions among the companies have been eliminated upon consolidation. |
Use of Estimates | Use of Estimates The preparation of the condensed consolidated interim financial statements requires management to make estimates and assumptions that affect the reported amounts of certain assets, liabilities, revenue, and expenses as well as the related disclosures. The Company must often make estimates about effects of matters that are inherently uncertain and will likely change in subsequent periods. Actual results could differ materially from those estimates. |
Functional and Presentation Currency | Functional and Presentation Currency The Company’s reporting currency is the United States Dollar (“USD”). The Company’s functional currency is the local currency, Canadian Dollar (“CAD”). Assets and liabilities of these operations are translated into USD at the end-of-period exchange rates; income and expenses are translated using the average exchange rates for the reporting period. Resulting cumulative translation adjustments are recorded as a component of stockholder’s equity (deficit) in the consolidated balance sheet in accumulated other comprehensive loss. |
Significant Accounting Policies | Significant Accounting Policies The accounting policies applied in the preparation of these interim financial statements are consistent with those applied and disclosed in note 2 to the annual financial statements except as noted below: |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that the Company adopts as of the specified effective date. The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it is (i) no longer an emerging growth company or (ii) has affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, these financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates. In August 2020, the FASB issued ASU 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40). The ASU simplifies the accounting for certain financial instruments with characteristics of liabilities and equity. The FASB reduced the number of accounting models for convertible debt and convertible preferred stock instruments and made certain disclosure amendments to improve the information provided to users. In addition, the FASB amended the derivative guidance for the own stock scope exception and certain aspects of the earnings-per-share guidance. The amendments are effective for interim and annual periods beginning after December 15, 2021, with early adoption permitted for after December 15, 2020. The adoption of ASU 2020-06 had no impact on the Company’s condensed consolidated interim financial statements. |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Liabilities (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Payables and Accruals [Abstract] | |
Schedule of accounts payable and accrued liabilities | December 31, June 30, $ $ Trade payables 3,011,033 2,419,118 Vacation accrual 13,153 23,225 Accrued liabilities 161,667 372,189 3,185,853 2,814,532 |
Right of Use Asset and Lease _2
Right of Use Asset and Lease Liability (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Right of Use Asset and Lease Liability [Abstract] | |
Schedule of maturity of the lease liability | For the years ended June 30, Amount $ 2023 156,633 2024 331,214 2025 368,741 2026 407,899 2027 429,110 Thereafter 1,602,227 Total lease payments 3,374,141 Less: Unamortized interest (1,585,742 ) Total lease liability 1,710,082 |
Notes Payable and Notes Payab_2
Notes Payable and Notes Payable – Related Parties (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Notes Payable [Abstract] | |
Schedule of future principal repayments | For the years ended June 30, Amount $ 2023 296,054 2024 59,067 Total notes payable 355,121 |
Line of Credit (Tables)
Line of Credit (Tables) | 12 Months Ended |
Jun. 30, 2022 | |
Line of Credit [Abstract] | |
Schedule of warrant liability | December 31, December 31, $ $ Balance, beginning of period — 6,192,883 Warrants reclassified to share capital — (6,392,476 ) Change in fair value of warrant liability — 322,226 Unrealized foreign exchange gain — (122,633 ) Balance, end of period — — |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Stockholders' Equity Note [Abstract] | |
Schedule of summary warrants | Number of Weighted average exercise price Weighted average remaining life (years) Aggregate intrinsic Balance at June 30, 2021 464,293 2.01 (CAD2.59 ) 2.63 276,294 Balance at December 31, 2021 464,293 2.01 (CAD2.59 ) 2.13 276,294 Balance at June 30, 2022 621,697 2.34 (CAD3.01 ) 1.91 — Expired (54,266 ) (1) 2.35 (CAD3.22 ) — — Balance at December 31, 2022 567,431 2.18 (CAD2.99 ) 1.57 — (1) On September 17, 2022, 54,266 share purchase options expired, unexercised. |
Schedule of summary warrants | Number of warrants Weighted average exercise price Weighted average remaining life Aggregate intrinsic value Balance at June 30, 2021 3,906,209 0.61 (CAD0.76 ) 4.35 4,321,401 Exercised (3,477,919 ) 0.015 (CAD0.018 ) — (4,321,401 ) Balance at December 31, 2021 428,290 1.70 (CAD2.16 ) 3.85 — Balance at June 30, 2022 428,290 1.58 (CAD2.16 ) 3.35 — Balance at December 31, 2022 428,290 1.59 (CAD2.16 ) 2.85 — |
Schedule of assumptions in the Black-Scholes option pricing model | December 8, June 30, Expected life warrants (years) — 4.10 Expected volatility — % 100 % Expected dividend yield — % 0 % Risk-free interest rate — % 0.34 % Black-Scholes value of each warrant $ — $ 0.80 (CAD$1.08 ) |
Digital assets (Details)
Digital assets (Details) | 6 Months Ended |
Dec. 31, 2022 USD ($) shares | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Sold shares | shares | 34,106 |
Cash | $ | $ 34,106 |
Property, Plant and Equipment (
Property, Plant and Equipment (Details) - 1 months ended Feb. 25, 2021 | USD ($) shares | CAD ($) |
Property, Plant and Equipment (Details) [Line Items] | ||
Equipment of fair value | $ 843,500 | |
Class B Common Non-Voting Shares [Member] | ||
Property, Plant and Equipment (Details) [Line Items] | ||
Equipment for consideration (in Shares) | shares | 990,741 | |
Fair value | $ 1,687,032 | $ 2,140,000 |
Selling, general and administrative expenses | $ 843,532 |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Liabilities (Details) - 6 months ended Dec. 31, 2022 | USD ($) | CAD ($) |
Payables and Accruals [Abstract] | ||
Face value amount | $ 1,427,755 | $ 1,933,713 |
Common shares issuance percentage | 40% |
Accounts Payable and Accrued _4
Accounts Payable and Accrued Liabilities (Details) - Schedule of accounts payable and accrued liabilities - USD ($) | Dec. 31, 2022 | Jun. 30, 2022 |
Schedule Of Accounts Payable And Accrued Liabilities [Abstract] | ||
Trade payables | $ 3,011,033 | $ 2,419,118 |
Vacation accrual | 13,153 | 23,225 |
Accrued liabilities | 161,667 | 372,189 |
Total | $ 3,185,853 | $ 2,814,532 |
Right of Use Asset and Lease _3
Right of Use Asset and Lease Liability (Details) | 3 Months Ended | 6 Months Ended | |||||
Aug. 01, 2022 | Aug. 01, 2017 | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2022 CAD ($) | |
Right of Use Asset and Lease Liability [Abstract] | |||||||
Initial term | 5 years | ||||||
Option to renew | 5 years | ||||||
Option to extend | 5 years | ||||||
Lease liability in years | 10 years | ||||||
Discount rate | 16% | 16% | 16% | ||||
Increased its right-of-use asset | $ 1,144,349 | $ 1,144,349 | |||||
Lease liability | 1,144,349 | 1,144,349 | |||||
Amortization expense | 27,510 | 46,755 | |||||
Right of use asset | |||||||
long-term deposit | $ 18,458 | $ 18,458 | $ 25,000 |
Right of Use Asset and Lease _4
Right of Use Asset and Lease Liability (Details) - Schedule of maturity of the lease liability | Jun. 30, 2022 USD ($) |
Schedule of Maturity of the Lease Liability [Abstract] | |
2023 | $ 156,633 |
2024 | 331,214 |
2025 | 368,741 |
2026 | 407,899 |
2027 | 429,110 |
Thereafter | 1,602,227 |
Total lease payments | 3,374,141 |
Less: Unamortized interest | (1,585,742) |
Total lease liability | $ 1,710,082 |
Notes Payable and Notes Payab_3
Notes Payable and Notes Payable – Related Parties (Details) - Schedule of future principal repayments | Jun. 30, 2022 USD ($) |
Schedule of Future Principal Repayments [Abstract] | |
2023 | $ 296,054 |
2024 | 59,067 |
Total notes payable | $ 355,121 |
Convertible Notes (Details)
Convertible Notes (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Convertible Notes [Abstract] | ||||
Unsecured convertible notes | $ 340,000 | |||
Interest rate | 8% | |||
Convertible note description | The convertible notes are convertible into common shares at a 40% discount to the price of an initial public offering and mature between August 24, 2024 and December 28, 2024. | |||
Interest expense | $ 52,187 | $ 65,411 | $ 130,701 | $ 72,655 |
Line of Credit (Details)
Line of Credit (Details) | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||||||||
Dec. 08, 2021 USD ($) shares | Jan. 15, 2021 USD ($) | Jan. 15, 2021 CAD ($) | Nov. 05, 2020 USD ($) $ / shares shares | Nov. 05, 2020 CAD ($) $ / shares shares | Jan. 22, 2022 USD ($) shares | Dec. 31, 2022 USD ($) $ / shares | Dec. 31, 2021 USD ($) | Dec. 31, 2022 USD ($) $ / shares | Dec. 31, 2021 USD ($) | Dec. 31, 2022 $ / shares | Jun. 30, 2022 USD ($) | |
Line of Credit [Abstract] | ||||||||||||
Line of credit | $ 4,928,382 | $ 6,675,000 | ||||||||||
Bears an interest rate | 8% | 8% | ||||||||||
Maturity date | Nov. 05, 2023 | Nov. 05, 2023 | ||||||||||
Line of credit withdrawn | $ 369,167 | $ 500,000 | ||||||||||
Warrant to purchase of common shares (in Shares) | shares | 3,906,209 | 3,906,209 | ||||||||||
Exercise price | (per share) | $ 1.6 | $ 2.16 | ||||||||||
Warrants, description | the Company amended the warrants whereby in the event that the Company effects a closing or closings of convertible notes is the minimum aggregate of (i) $1,000,000, the exercise price of 1,111,112 warrants shall be adjusted to $0.015 (CAD$0.018), (ii) $2,000,000, the exercise price of 2,222,223 warrants shall be adjusted to $0.015 (CAD$0.018), and (iii) $3,000,000, the exercise price of 3,333,334 warrants shall be adjusted to $0.015 (CAD$0.018). | |||||||||||
Deferred financing costs | $ 4,775,535 | |||||||||||
Interest expense | $ 386,125 | $ 412,088 | $ 765,040 | $ 824,222 | ||||||||
Warrants shares (in Shares) | shares | 3,906,209 | 3,906,209 | ||||||||||
Warrant liability | $ 4,775,535 | |||||||||||
Warrants interest expense | $ 1,079,468 | 1,028,499 | $ 824,268 | |||||||||
Share capital | $ 6,392,476 | |||||||||||
Convertible notes | $ 3,000,000 | $ 2,924,092 | $ 2,924,092 | $ 825,707 | ||||||||
Conversion price | (per share) | $ 1.59 | $ 1.59 | $ 2.16 |
Line of Credit (Details) - Sche
Line of Credit (Details) - Schedule of warrant liability - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule Of Warrant Liability [Abstract] | ||||
Balance, beginning of period | $ 6,192,883 | |||
Warrants reclassified to share capital | (6,392,476) | |||
Change in fair value of warrant liability | $ 170,923 | 322,226 | ||
Unrealized foreign exchange gain | (122,633) | |||
Balance, end of period |
Stockholders' Equity (Details)
Stockholders' Equity (Details) | 3 Months Ended | 6 Months Ended | |||||||||||||||||
Sep. 17, 2022 $ / shares | Dec. 28, 2021 USD ($) $ / shares shares | Dec. 28, 2021 USD ($) $ / shares shares | Dec. 08, 2021 USD ($) $ / shares shares | Dec. 01, 2021 | Jan. 22, 2021 | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) shares | Dec. 31, 2021 CAD ($) shares | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) shares | Dec. 31, 2021 CAD ($) shares | Dec. 30, 2022 shares | Jun. 30, 2022 $ / shares shares | Dec. 28, 2021 $ / shares shares | Dec. 08, 2021 $ / shares | Jun. 30, 2021 shares | Jan. 15, 2021 $ / shares shares | Jan. 15, 2021 $ / shares shares | |
Stockholders' Equity (Details) [Line Items] | |||||||||||||||||||
Reverse stock split | 18:1 | ||||||||||||||||||
Common stock value | $ | $ 750,000 | $ 750,000 | |||||||||||||||||
Common stock, no par value (in Dollars per share) | $ / shares | |||||||||||||||||||
Common non-voting issued (in Shares) | 185,138 | 185,138 | 3,477,919 | 185,138 | |||||||||||||||
Exercise warrants (in Shares) | 3,477,919 | ||||||||||||||||||
Exercise price per share | (per share) | $ 1.69 | $ 1.69 | $ 0.015 | $ 2.16 | $ 0.018 | $ 1.6 | $ 2.16 | ||||||||||||
Conversion amount | $ | $ 300,000 | ||||||||||||||||||
Accrued interest | $ | $ 14,016 | ||||||||||||||||||
Share purchase options expired (in Dollars per share) | $ / shares | $ 54,266 | ||||||||||||||||||
Share-based payment expense | $ 6,279 | $ 7,913 | $ 20,922 | $ 26,367 | |||||||||||||||
Unrecognized share-based payment expense | $ | |||||||||||||||||||
Share purchase (in Shares) | 2,114,751 | ||||||||||||||||||
Underlying percent | 25% | ||||||||||||||||||
Common shares (in Shares) | 44,057 | 44,057 | |||||||||||||||||
Warrants issued (in Shares) | 428,290 | 428,290 | 428,290 | 428,290 | 428,290 | 428,290 | 3,906,209 | 3,906,209 | 3,906,209 | ||||||||||
Common shares (in Shares) | 3,906,209 | 3,906,209 | |||||||||||||||||
Warrants description | (i) $1,000,000, the exercise price of 1,111,112 warrants shall be adjusted to $0.015 (CAD$0.018), (ii) $2,000,000, the exercise price of 2,222,223 warrants shall be adjusted to $0.015 (CAD$0.018), and (iii) $3,000,000, the exercise price of 3,333,334 warrants shall be adjusted to $0.015 (CAD$0.018). | ||||||||||||||||||
Reclassified shares (in Shares) | 3,906,209 | ||||||||||||||||||
Share capital | $ | $ 6,392,476 | ||||||||||||||||||
Convertible notes | $ | $ 3,000,000 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - Schedule of stock option changes | 6 Months Ended | ||||||||
Jun. 30, 2022 USD ($) $ / shares shares | Jun. 30, 2022 $ / shares | Dec. 31, 2021 USD ($) $ / shares shares | Dec. 31, 2021 $ / shares | Jun. 30, 2021 USD ($) $ / shares shares | Jun. 30, 2021 $ / shares | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2022 $ / shares | ||
Schedule of Stock Option Changes [Abstract] | |||||||||
Number of options, beginning balance | shares | 621,697 | 464,293 | |||||||
Weighted average exercise price, beginning balance | (per share) | $ 2.34 | $ 3.01 | $ 2.01 | $ 2.59 | |||||
Weighted average remaining life (years), beginning balance | 1 year 10 months 28 days | 2 years 7 months 17 days | |||||||
Aggregate intrinsic value, beginning balance | $ | $ 276,294 | ||||||||
Number of options, Expired | shares | [1] | (54,266) | |||||||
Weighted average exercise price, Expired | (per share) | $ 2.35 | $ 3.22 | |||||||
Weighted average remaining life (years), Expired | |||||||||
Aggregate intrinsic value, Expired | $ | |||||||||
Number of options, ending balance | shares | 464,293 | 567,431 | |||||||
Weighted average exercise price, ending balance | (per share) | $ 2.01 | $ 2.59 | $ 2.18 | $ 2.99 | |||||
Weighted average remaining life (years), ending balance | 2 years 1 month 17 days | 1 year 6 months 25 days | |||||||
Aggregate intrinsic value, ending balance | $ | $ 276,294 | ||||||||
[1]On September 17, 2022, 54,266 share purchase options expired, unexercised. |
Stockholders' Equity (Details_2
Stockholders' Equity (Details) - Schedule of summary of the warrants | 6 Months Ended | |||
Dec. 30, 2022 USD ($) $ / shares shares | Dec. 30, 2022 $ / shares | Dec. 31, 2021 USD ($) $ / shares shares | Dec. 31, 2021 $ / shares | |
Schedule of summary warrants [Abstract] | ||||
Number of warrants, beginning balance | shares | 428,290 | 3,906,209 | ||
Weighted average exercise price, beginning balance | (per share) | $ 1.58 | $ 2.16 | $ 0.61 | $ 0.76 |
Weighted average remaining life (years), beginning balance | 3 years 4 months 6 days | 3 years 4 months 6 days | 4 years 4 months 6 days | 4 years 4 months 6 days |
Aggregate intrinsic value, beginning balance | $ | $ 4,321,401 | |||
Number of warrants, Exercised | shares | (3,477,919) | |||
Weighted average exercise price, Exercised | (per share) | $ 0.015 | $ 0.018 | ||
Weighted average remaining life (years), Exercised | ||||
Aggregate intrinsic value, Exercised | $ | $ (4,321,401) | |||
Number of warrants, ending balance | shares | 428,290 | 428,290 | ||
Weighted average exercise price, ending balance | (per share) | $ 1.59 | $ 2.16 | $ 1.7 | $ 2.16 |
Weighted average remaining life (years), ending balance | 2 years 10 months 6 days | 3 years 10 months 6 days | ||
Aggregate intrinsic value, ending balance | $ |
Stockholders' Equity (Details_3
Stockholders' Equity (Details) - Schedule of assumptions in the Black-Scholes option pricing model | Dec. 08, 2021 $ / shares | Jun. 30, 2021 $ / shares | Jun. 30, 2021 $ / shares |
Schedule of Assumptions Black Scholes Option Pricing Model [Abstract] | |||
Expected life warrants (years) | 4 years 1 month 6 days | 4 years 1 month 6 days | |
Expected volatility | 100% | 100% | |
Expected dividend yield | 0% | 0% | |
Risk-free interest rate | 0.34% | 0.34% | |
Black-Scholes value of each warrant (in Dollars per share and Dollars per share) | (per share) | $ 0.8 | $ 1.08 |
Related Party Transactions (Det
Related Party Transactions (Details) | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||||||||||
Feb. 25, 2021 USD ($) shares | Feb. 25, 2021 CAD ($) shares | Dec. 31, 2022 USD ($) shares | Dec. 31, 2021 USD ($) | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2022 CAD ($) $ / shares | Dec. 31, 2021 USD ($) | Dec. 31, 2021 CAD ($) | Dec. 31, 2022 CAD ($) shares | Jun. 30, 2022 USD ($) | Jun. 30, 2019 USD ($) | Jun. 30, 2019 CAD ($) | Dec. 31, 2018 USD ($) | Dec. 31, 2018 CAD ($) | |
Related Party Transactions (Details) [Line Items] | ||||||||||||||
Due to related parties | $ 2,039,257 | $ 2,039,257 | $ 1,775,372 | |||||||||||
Face value | 701,105 | $ 701,105 | $ 946,491 | |||||||||||
Issuance of common shares percentage | 40% | 40% | ||||||||||||
Notes payable | $ 245,768 | $ 330,000 | $ 144,666 | $ 200,000 | ||||||||||
Bears interest | 2% | 2% | 21% | 21% | ||||||||||
Interest expense | 6,449 | $ 10,635 | $ 17,738 | $ 21,060 | ||||||||||
Payments | ||||||||||||||
Convertible amount | $ 500,000 | |||||||||||||
Interest rate | 8% | |||||||||||||
Conversion price | (per share) | $ 1.59 | $ 2.16 | ||||||||||||
Common shares equal to the quotient | $ 750,000 | $ 750,000 | ||||||||||||
Purchase options (in Shares) | shares | 2,114,751 | 2,114,751 | 2,114,751 | |||||||||||
Stock options vest percentage | 25% | 25% | ||||||||||||
Common shares (in Shares) | shares | 43,319 | 43,319 | 43,319 | |||||||||||
Notes Payable [Member] | ||||||||||||||
Related Party Transactions (Details) [Line Items] | ||||||||||||||
Interest expense | $ 1,950 | $ 2,596 | 2,060 | $ 2,596 | ||||||||||
Initial Public Offering [Member] | ||||||||||||||
Related Party Transactions (Details) [Line Items] | ||||||||||||||
Interest expense | 3,944 | $ 5,250 | 4,166 | $ 5,250 | ||||||||||
Payments | ||||||||||||||
Class B Common Shares [Member] | ||||||||||||||
Related Party Transactions (Details) [Line Items] | ||||||||||||||
Consideration (in Shares) | shares | 990,741 | 990,741 | ||||||||||||
Fair value | $ 1,687,032 | $ 2,140,000 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | 1 Months Ended | 6 Months Ended | |
Feb. 13, 2023 | Jan. 16, 2023 | Dec. 31, 2022 | |
Subsequent Events (Details) [Line Items] | |||
Underwriting discounts and commissions | $ 5,800,000 | ||
Convertible notes | $ 4,307,115 | ||
Aggregate shares (in Shares) | 1,932,006 | ||
Notes payable | $ 88,707 | ||
Aggregate shares (in Shares) | 1,074,716 | ||
Accounts payable | $ 2,579,299 | ||
Subsequent events, description | the Company issued 250,000 common shares pursuant to a two-year marketing agreement.Upon completion of the IPO, the Company issued 104,167 common shares pursuant to a donation to the Austin Community Foundation. | ||
Subsequent Event [Member] | |||
Subsequent Events (Details) [Line Items] | |||
Advertising and marketing expencess | $ 833,333 | ||
Common stock | $ 625,000 | ||
Public offering price (in Dollars per share) | $ 4 | ||
IPO [Member] | |||
Subsequent Events (Details) [Line Items] | |||
Aggregate shares (in Shares) | 36,962 | ||
IPO [Member] | Subsequent Event [Member] | |||
Subsequent Events (Details) [Line Items] | |||
Company stock (in Shares) | 1,875,000 |