Cover
Cover - USD ($) | 12 Months Ended | ||
Jun. 30, 2020 | Aug. 14, 2020 | Dec. 31, 2019 | |
Cover [Abstract] | |||
Entity Registrant Name | UPD HOLDING CORP. | ||
Entity Central Index Key | 0000836937 | ||
Document Type | 10-K | ||
Document Period End Date | Jun. 30, 2020 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --06-30 | ||
Entity File Number | 001-13621 | ||
Entity Incorporation State Country Code | NV | ||
Entity Interactive Data Current | No | ||
Entity a Well-known Seasoned Issuer | No | ||
Entity a Voluntary Filer | Yes | ||
Entity Reporting Status Current | No | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 402,000 | ||
Entity Common Stock, Shares Outstanding | 172,450,907 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2020 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 20,718 | $ 7,215 |
Other current assets | 755 | |
Total current assets | 21,473 | 7,215 |
Property and equipment, net | 74,617 | |
Total assets | 21,473 | 81,832 |
Current liabilities: | ||
Accounts payable | 171,547 | 179,671 |
Accrued interest | 77,134 | 75,698 |
Convertible notes payable | 180,129 | 155,000 |
Due to shareholders | 72,225 | 71,074 |
Notes payable | 104,560 | 485,560 |
Total current liabilities | 605,595 | 967,003 |
Commitments and Contingencies | ||
Stockholders' deficit | ||
Preferred stock, $0.01 par value; 10,000,000 authorized and none issued and outstanding | ||
Common stock, $0.005 par value; 200,000,000 shares authorized and 172,450,907 and 171,008,684 issued and outstanding at June 30, 2020 and 2019, respectively | 862,255 | 855,044 |
Additional paid-in-capital | 1,872,632 | 1,709,731 |
Accumulated deficit | (3,319,009) | (3,449,946) |
Total stockholders' deficit | (584,122) | (885,171) |
Total liabilities and stockholders' deficit | $ 21,473 | $ 81,832 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2020 | Jun. 30, 2019 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, authorized | 10,000,000 | 10,000,000 |
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.005 | $ 0.005 |
Common stock, authorized | 200,000,000 | 200,000,000 |
Common stock, issued | 172,450,907 | 171,008,684 |
Common stock, outstanding | 172,450,907 | 171,008,684 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Revenues: | ||
Product sales | $ 14,274 | |
Operating costs and expenses: | ||
Cost of revenue | 85,863 | |
Professional fees | 140,394 | 47,169 |
Impairment of goodwill | 2,170,124 | |
General and administrative | 8,865 | 69,604 |
Total operating costs and expenses | 149,259 | 2,372,760 |
Operating loss | (149,259) | (2,358,486) |
Interest expense, net | (44,625) | (159,209) |
Gain on debt settlement | 324,821 | |
Other income, net | 17,771 | |
Total other income (expense) | 280,196 | (141,438) |
Income (loss) from continuing operations, before income taxes | 130,937 | (2,499,924) |
Provision for income taxes | ||
Net income (loss) | $ 130,937 | $ (2,499,924) |
Basic and diluted earnings (loss) per share from: (in dollars per share) | $ 0 | $ (0.02) |
Weighted average shares outstanding Basic and diluted (in shares) | 171,513,505 | 162,636,158 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at beginning at Jun. 30, 2018 | $ 812,834 | $ 949,552 | $ (950,022) | $ 812,364 | |
Balance at beginning (in shares) at Jun. 30, 2018 | 162,566,772 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock for conversion of debt and interest | $ 42,210 | 751,637 | 793,847 | ||
Issuance of common stock for conversion of debt and interest (in shares) | 8,441,912 | ||||
Stock based compensation | 8,542 | 8,542 | |||
Net loss | (2,499,924) | (2,499,924) | |||
Balance at end at Jun. 30, 2019 | $ 855,044 | 1,709,731 | (3,449,946) | (885,171) | |
Balance at end (in shares) at Jun. 30, 2019 | 171,008,684 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock for conversion of debt and interest | $ 7,211 | 136,981 | 144,192 | ||
Issuance of common stock for conversion of debt and interest (in shares) | 1,442,223 | ||||
Related party debt and interest forgiveness | 25,920 | 25,920 | |||
Net loss | 130,937 | 130,937 | |||
Balance at end at Jun. 30, 2020 | $ 862,255 | $ 1,872,632 | $ (3,319,009) | $ (584,122) | |
Balance at end (in shares) at Jun. 30, 2020 | 172,450,907 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 130,937 | $ (2,499,924) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Gain on settlement of debt | (324,821) | |
Stock-based compensation | 8,542 | |
Impairment of goodwill | 2,170,124 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | 2,783 | |
Inventory | 76,475 | |
Other current assets | (755) | |
Accrued interest | 46,548 | 108,440 |
Accounts payable | (6,974) | (14,841) |
Net cash used in operating activities | (155,065) | (148,401) |
Cash flows from financing activities: | ||
Proceeds from issuance of convertible notes payable | 165,129 | 101,000 |
Proceeds from issuance of related party notes payable | 10,000 | 74,560 |
Principal payments on notes payable | (6,561) | (33,750) |
Net cash provided by financing activities | 168,568 | 141,810 |
Net increase (decrease) in cash and cash equivalents | 13,503 | (6,591) |
Cash and cash equivalents at beginning of period | 7,215 | 13,806 |
Cash and cash equivalents at end of period | 20,718 | 7,215 |
Cash paid for income taxes | ||
Cash paid for interest | 4,000 | 44,000 |
Non-Cash Supplemental Disclosures | ||
Related party debt forgiveness | 21,000 | |
Common stock issued for debt settlement | $ 130,000 | $ 652,500 |
BUSINESS AND ORGANIZATION
BUSINESS AND ORGANIZATION | 12 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BUSINESS AND ORGANIZATION | NOTE 1 – BUSINESS AND ORGANIZATION UPD Holding Corp. (“UPD”, “Company”), incorporated in the State of Nevada, is a holding Company seeking to acquire assets and businesses to provide a competitive advantage through cost-sharing and other synergies. The Company currently operates in the food and beverage industry through Record Street Brewing (“RSB”) and weight and health management with its distribution and marketing agreement with iMetabolic (“IMET”). The Company is pursuing business development opportunities in the food and beverage industry and other product licensing agreements. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The Company consolidates the assets, liabilities, and operating results of its wholly owned and majority-owned subsidiaries; Net Edge Devices, LLC, an Arizona Limited Liability Company, iMetabolic Corp, (“IMET”) a Nevada corporation, and Record Street Brewing Co. a Nevada corporation. All intercompany accounts and transactions have been eliminated in consolidation. Cash and Cash Equivalents Cash and cash equivalents consist of cash and highly liquid investments with original maturities of 90 days of less at the date of purchase. The Company is exposed to credit risk in the event of default by the financial institutions or the issuers of these investments to the extent the amounts on deposit or invested are in excess of amounts that are insured. As of June 30, 2020 and 2019 the Company did not have any cash equivalents or cash deposits in excess of the federally insured limits. Use of Estimates The preparation of the Company’s consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made; however, actual results could differ materially from these estimates. Fair Value of Financial Instruments The fair value of a financial instrument is the amount that could be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial assets are marked to bid prices and financial liabilities are marked to offer prices. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity. In addition, the fair value of liabilities should include consideration of non-performance risk, including the party’s own credit risk. Fair value measurements do not include transaction costs. A fair value hierarchy is used to prioritize the quality and reliability of the information used to determine fair values. Categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is defined into the following three categories: Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3: Unobservable inputs that are not corroborated by market data. The Company's financial instruments consist primarily of cash and cash equivalents, restricted cash, accounts payable, and convertible and other notes payable. The carrying amounts of such financial instruments approximate their respective estimated fair value due to the short-term maturities and approximate market interest rates of these instruments. Net Income (Loss) Per Share The Company presents both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net loss by the weighted average number of shares outstanding during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period under the treasury stock method using the if-converted method. Due to the incurrence of net losses, the Company did not include outstanding instruments convertible into common stock that would be anti-dilutive. Revenue Recognition The Company sells beer and beverage products to its customers. The product sales represent revenue earned under contracts in which the Company bills and collects charges for delivery of products. The Company determines the measurement of revenue and the timing of revenue recognition utilizing the following core principles: 1. Identifying the contract with a customer; 2. Identifying the performance obligations in the contract; 3. Determining the transaction price; 4. Allocate the transaction price to the performance obligations in the contract; and 5. Recognize revenue when (or as) the Company satisfies its performance obligations. Revenues from product sales are recognized when the Company’s performance obligations are satisfied upon delivery. The Company primarily invoices its customers when orders are received and does not provide any refunds, rights of return, or warranties to its customers. The Company has not recognized any revenue since the quarter ended September 30, 2018. Inventory Inventory, consisting of beer products produced and packaged by a third-party vendor, are stated at the lower of cost or net realizable value, with cost determined on a first-in, first-out basis. The Company’s products, if pasteurized are expected to have a “shelf-life” of between six months and one year from the date of production based on the methodology used by the producer. The Company reduces the carrying value of inventories for items that are potentially excess, slow-moving, or subject to spoilage. The Company bases its provisions for excess, expired and spoiled inventory primarily on our estimates of forecasted net sales. A significant change in the timing or level of demand for our products as compared with forecasted amounts may result in recording additional provisions for excess, expired and spoiled inventory in the future. As the Company’s products are all produced by third parties, all inventories are categorized as finished goods. As of June 30, 2019, all of the Company’s inventory was written off due to spoilage. Income Taxes The Company recognizes deferred tax liabilities and assets using the liability method. Under this method, deferred tax liabilities and assets are determined based on the temporary differences between the financial statements carrying values and tax bases of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. In determining the future tax consequences of events that have been recognized in the financial statements or tax returns, judgment and interpretation of statutes is required. Judgments and interpretation of statutes are inherent in this process. Future income tax assets are recorded in the financial statements if realization is considered more likely than not. For previously taken tax positions considered to be uncertain, the Company prescribes a recognition threshold and measurement attribute. In the event certain tax positions do not meet the appropriate recognition threshold, de-recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, and accounting for interest and penalties associated with tax positions is required. The Company files income tax returns in the U.S. federal jurisdiction. Recently Adopted Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02 – Leases (Accounting Standards Codification (“ASC” )Topic 842). Under the new guidance a lessee will be required to recognize assets and liabilities for leases with lease terms more than 12 months, whether that lease be classified as a capital or operating lease. This update is effective in annual reporting periods beginning after December 15, 2018 and the interim periods within that year. On the Company’s adoption date, July 1, 2019, there were no non-cancelable leases. As a result, the adoption of ASC 842 did not have a material impact on the Company’s financial statements. Going Concern The Company’s financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenue sufficient to cover its operating costs and allow it to continue as a going concern, has reoccurring net losses and net capital deficiency. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plans to obtain such resources for the Company include (i) obtaining capital from management and significant stockholders sufficient to meet its minimal operating expenses; (ii) obtaining funding from outside sources through the sale of its debt and/or equity securities; and (iii) completing a merger with or acquisition of an existing operating company. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Jun. 30, 2020 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 3 – RELATED PARTY TRANSACTIONS From time to time the Company has received working capital advances from shareholders. These advances are used to settle the Company’s on-going operating expenses. The shareholders have agreed to not accrue interest on the advances, and they are due on demand. Through June 30, 2020 the shareholders have informally agreed to defer payment until the Company’s operations are generating sufficient cash flows, however, they are under no obligation to do so in the future. In June 2020, a significant shareholder forgave previously outstanding notes payable with total principal and interest totaling $25,920. Due to the transaction involving a related party, the forgiveness was treated as a capital contribution and was recognized as an increase in additional paid in capital in the accompanying consolidated balance sheets and statement of changes in stockholders’ deficit. In February 2020, the Company issued its CEO a note payable carrying a 6% interest rate and maturing in October 2020 for cash proceeds totaling $10,000. |
NOTES AND CONVERTIBLE NOTES PAY
NOTES AND CONVERTIBLE NOTES PAYABLE | 12 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
NOTES AND CONVERTIBLE NOTES PAYABLE | NOTE 4 – NOTES AND CONVERTIBLE NOTES PAYABLE The Company’s notes payable consist of the following: Note Description June 30, June 30, Notes Payable: Notes Payable matured in December 2018 a nominal interest rate $ 20,000 $ 281,000 Notes Payable matured in December 2018 a nominal interest rate — 100,000 Related Party Note Payable due October 2020 a nominal interest 84,560 74,560 Note payable issued with a maturity date of December 2019 and a — 30,000 Total Notes payable $ 104,560 $ 485,560 Accrued interest 8,900 3,000 Total convertible and other notes payable, net $ 113,460 $ 488,560 Throughout the year ended June 30, 2020 the Company did not have the financial resources to make current payments on these notes payable. The Company is in negotiations with the note holders and has not incurred significant penalties associated with the current default. In January 2020, the Company settled a total of $250,000 previously outstanding notes payable with a nominal interest rate of 12% and $100,000 previously outstanding notes payable with a nominal interest rate of 18% in exchange for property and equipment and other assets with a net book value totaling $74,617. As a result of the settlement the Company recognized a gain of $301,383 during the year ended June 30, 2020. In August 2019, the Company settled a previously outstanding note payable totaling $30,000 with a cash payment of $6,561 and recognized a gain on settlement of $23,439. The Company’s convertible notes payable consist of the following: Convertible Note Description June 30, 2020 June 30, 2019 Notes payable convertible into common stock at $0.10 per share; nominal interest rate of 12%; and matured in April 2018 (related party) $ 65,000 $ 65,000 Notes payable convertible into common stock at $0.10 per share; nominal interest rate of 12%; and matured in the fourth quarter of fiscal 2019 — 40,000 Notes payable convertible into common stock at $0.10 per share; nominal interest rate of 12%; and matured in the first quarter of fiscal 2020 — 10,000 Notes payable convertible into common stock at $0.10 per share; nominal interest rate of 15%; and matured in the third quarter of fiscal 2020 — 5,000 Notes payable convertible into common stock at $0.10 per share; nominal interest rate of 12%; and matures in the fourth quarter of fiscal 2020 — 30,000 Notes payable convertible into common stock at $0.10 per share; nominal interest rate of 12%; and matures in the second quarter of fiscal 2020 — 5,000 Notes payable convertible into common stock at $0.10 per share; nominal interest rate of 12%; and matures in the third quarter of fiscal 2021 65,129 — Notes payable convertible into common stock at $0.10 per share; nominal interest rate of 12%; and matures in the fourth quarter of fiscal 2021 50,000 — Total Convertible notes payable $ 180,129 $ 155,000 Accrued interest 68,234 72,698 Total convertible and other notes payable, net $ 248,363 $ 227,698 Most of the Company’s outstanding convertible notes automatically convert to shares of common stock and $0.10 per share upon maturity if not paid in full prior to maturity. The Company does not make monthly and interest payments on its outstanding convertible notes payable. During the year ended June 30, 2020, the Company settled previously outstanding convertible note principal and interest totaling approximately $144,000 via the issuance of 1,442,223 shares of restricted and unregistered common stock. During the year ended June 30, 2019, the Company settled previously outstanding convertible note principal and interest totaling approximately $794,000 via the issuance of 7,941,912 shares of restricted and unregistered common stock. During the years ended June 30, 2020 and 2019 the Company recognized interest expense on all outstanding notes and convertible notes payable totaling approximately $45,000 and $159,000, respectively. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | NOTE 5 – STOCKHOLDERS’ EQUITY At June 30, 2020, the Company’s authorized capital stock consists of 200,000,000 shares of common stock, par value of $.005, and 10,000,000 shares of preferred stock, par value $.01. At June 30, 2020 there were 172,450,907 shares of common stock issued and outstanding, and no shares of preferred stock issued and outstanding. The following provides a description of the shares issued during the fiscal years ended June 30, 2020 and 2019: In April 2020, the Company issued 991,351 shares of common stock for the settlement of convertible notes and accrued interest totaling approximately $101,000. In November 2019, the Company issued 337,039 shares of common stock for the settlement of convertible notes and accrued interest totaling approximately $34,000. In July 2019, the Company issued 113,833 shares of common stock for the settlement of convertible notes and accrued interest totaling approximately $11,000. In June 2019, the Company issued 8,441,912 shares of restricted and unregistered common stock for the settlement of previously outstanding debt and interest totaling approximately $794,000. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 6 – INCOME TAXES The Company provides for income taxes using an asset and liability approach. Deferred tax assets and liabilities are recorded based on the temporary differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect currently. The Company recognizes reductions in its deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. In the Company’s opinion, it is uncertain whether it will generate sufficient taxable income in the future to fully utilize the net deferred tax asset. Accordingly, a valuation allowance equal to the deferred tax asset has been recorded. The Company’s deferred tax assets by period are as follows: June 30, June 30, 2020 2019 Deferred Tax Assets $ 242,000 $ 269,000 Valuation Allowance (242,000 ) (269,000 ) Income Tax Expense $ – $ – The components of income tax expense for the years ended June 30, 2020 and 2019, respectively, are as follows: June 30, June 30, 2020 2019 Change in Deferred Tax Assets $ (27,000 ) $ 69,000 Change in Valuation Allowance 27,000 (69,000 ) Income Tax Expense $ – $ – The differences between the statutory income tax rates computed at the U.S. federal statutory rate and our effective rate were the following: June 30, June 30, 2020 2019 Federal Statutory Rate 21 % 21 % Permanent Difference: Goodwill impairment – (18 %) Change in valuation allowance (21 %) (3 %) Net Rate 0 % 0 % As of June 30, 2020, the Company had net operating loss carryforwards totaling approximately $1,253,000. The Company does not believe that it has any uncertain tax positions, correspondingly, no estimated accruals for interest and penalties have been made in the accompanying financial statements. The Company’s net operating loss carryforwards incurred prior to January 1, 2018 will begin to expire in 2034. Net operating losses incurred subsequent to the effective date of the Tax Cuts and Jobs Act are not subject to expiration. The Company’s tax returns currently subject to audit by the Internal Revenue Service are for the periods ended June 30, 2016 through the present. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Jun. 30, 2020 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 7 - SUBSEQUENT EVENTS In June 2020 the Company, through its Record Street Brewing subsidiary, entered into a licensing agreement whereby its beer brands will be produced and distributed by a third-party. The third party operates a gastropub in Reno, Nevada under the Record Street Brewery name. The licensing agreement has an effective date of July 1, 2020 and is set to receive 25% of the gross profits sold and distributed outside of the gastropub premises. In late July 2020, the licensee delivered the first shipments subject to the licensing agreement. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The Company consolidates the assets, liabilities, and operating results of its wholly owned and majority-owned subsidiaries; Net Edge Devices, LLC, an Arizona Limited Liability Company, iMetabolic Corp, (“IMET”) a Nevada corporation, and Record Street Brewing Co. a Nevada corporation. All intercompany accounts and transactions have been eliminated in consolidation. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of cash and highly liquid investments with original maturities of 90 days of less at the date of purchase. The Company is exposed to credit risk in the event of default by the financial institutions or the issuers of these investments to the extent the amounts on deposit or invested are in excess of amounts that are insured. As of June 30, 2020 and 2019 the Company did not have any cash equivalents or cash deposits in excess of the federally insured limits. |
Use of Estimates | Use of Estimates The preparation of the Company’s consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made; however, actual results could differ materially from these estimates. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The fair value of a financial instrument is the amount that could be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial assets are marked to bid prices and financial liabilities are marked to offer prices. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity. In addition, the fair value of liabilities should include consideration of non-performance risk, including the party’s own credit risk. Fair value measurements do not include transaction costs. A fair value hierarchy is used to prioritize the quality and reliability of the information used to determine fair values. Categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is defined into the following three categories: Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3: Unobservable inputs that are not corroborated by market data. The Company's financial instruments consist primarily of cash and cash equivalents, restricted cash, accounts payable, and convertible and other notes payable. The carrying amounts of such financial instruments approximate their respective estimated fair value due to the short-term maturities and approximate market interest rates of these instruments. |
Net Income (Loss) Per Share | Net Income (Loss) Per Share The Company presents both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net loss by the weighted average number of shares outstanding during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period under the treasury stock method using the if-converted method. Due to the incurrence of net losses, the Company did not include outstanding instruments convertible into common stock that would be anti-dilutive. |
Revenue Recognition | Revenue Recognition The Company sells beer and beverage products to its customers. The product sales represent revenue earned under contracts in which the Company bills and collects charges for delivery of products. The Company determines the measurement of revenue and the timing of revenue recognition utilizing the following core principles: 1. Identifying the contract with a customer; 2. Identifying the performance obligations in the contract; 3. Determining the transaction price; 4. Allocate the transaction price to the performance obligations in the contract; and 5. Recognize revenue when (or as) the Company satisfies its performance obligations. Revenues from product sales are recognized when the Company’s performance obligations are satisfied upon delivery. The Company primarily invoices its customers when orders are received and does not provide any refunds, rights of return, or warranties to its customers. The Company has not recognized any revenue since the quarter ended September 30, 2018. |
Inventory | Inventory Inventory, consisting of beer products produced and packaged by a third-party vendor, are stated at the lower of cost or net realizable value, with cost determined on a first-in, first-out basis. The Company’s products, if pasteurized are expected to have a “shelf-life” of between six months and one year from the date of production based on the methodology used by the producer. The Company reduces the carrying value of inventories for items that are potentially excess, slow-moving, or subject to spoilage. The Company bases its provisions for excess, expired and spoiled inventory primarily on our estimates of forecasted net sales. A significant change in the timing or level of demand for our products as compared with forecasted amounts may result in recording additional provisions for excess, expired and spoiled inventory in the future. As the Company’s products are all produced by third parties, all inventories are categorized as finished goods. As of June 30, 2019, all of the Company’s inventory was written off due to spoilage. |
Income Taxes | Income Taxes The Company recognizes deferred tax liabilities and assets using the liability method. Under this method, deferred tax liabilities and assets are determined based on the temporary differences between the financial statements carrying values and tax bases of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. In determining the future tax consequences of events that have been recognized in the financial statements or tax returns, judgment and interpretation of statutes is required. Judgments and interpretation of statutes are inherent in this process. Future income tax assets are recorded in the financial statements if realization is considered more likely than not. For previously taken tax positions considered to be uncertain, the Company prescribes a recognition threshold and measurement attribute. In the event certain tax positions do not meet the appropriate recognition threshold, de-recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, and accounting for interest and penalties associated with tax positions is required. The Company files income tax returns in the U.S. federal jurisdiction. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02 – Leases (Accounting Standards Codification (“ASC” )Topic 842). Under the new guidance a lessee will be required to recognize assets and liabilities for leases with lease terms more than 12 months, whether that lease be classified as a capital or operating lease. This update is effective in annual reporting periods beginning after December 15, 2018 and the interim periods within that year. On the Company’s adoption date, July 1, 2019, there were no non-cancelable leases. As a result, the adoption of ASC 842 did not have a material impact on the Company’s financial statements. |
Going Concern | Going Concern The Company’s financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenue sufficient to cover its operating costs and allow it to continue as a going concern, has reoccurring net losses and net capital deficiency. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plans to obtain such resources for the Company include (i) obtaining capital from management and significant stockholders sufficient to meet its minimal operating expenses; (ii) obtaining funding from outside sources through the sale of its debt and/or equity securities; and (iii) completing a merger with or acquisition of an existing operating company. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. |
NOTES AND CONVERTIBLE NOTES P_2
NOTES AND CONVERTIBLE NOTES PAYABLE (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of notes notes payable | The Company’s notes payable consist of the following: Note Description June 30, June 30, Notes Payable: Notes Payable matured in December 2018 a nominal interest rate $ 20,000 $ 281,000 Notes Payable matured in December 2018 a nominal interest rate — 100,000 Related Party Note Payable due October 2020 a nominal interest 84,560 74,560 Note payable issued with a maturity date of December 2019 and a — 30,000 Total Notes payable $ 104,560 $ 485,560 Accrued interest 8,900 3,000 Total convertible and other notes payable, net $ 113,460 $ 488,560 |
Schedule of convertible notes payable | The Company’s convertible notes payable consist of the following: Convertible Note Description June 30, 2020 June 30, 2019 Notes payable convertible into common stock at $0.10 per share; nominal interest rate of 12%; and matured in April 2018 (related party) $ 65,000 $ 65,000 Notes payable convertible into common stock at $0.10 per share; nominal interest rate of 12%; and matured in the fourth quarter of fiscal 2019 — 40,000 Notes payable convertible into common stock at $0.10 per share; nominal interest rate of 12%; and matured in the first quarter of fiscal 2020 — 10,000 Notes payable convertible into common stock at $0.10 per share; nominal interest rate of 15%; and matured in the third quarter of fiscal 2020 — 5,000 Notes payable convertible into common stock at $0.10 per share; nominal interest rate of 12%; and matures in the fourth quarter of fiscal 2020 — 30,000 Notes payable convertible into common stock at $0.10 per share; nominal interest rate of 12%; and matures in the second quarter of fiscal 2020 — 5,000 Notes payable convertible into common stock at $0.10 per share; nominal interest rate of 12%; and matures in the third quarter of fiscal 2021 65,129 — Notes payable convertible into common stock at $0.10 per share; nominal interest rate of 12%; and matures in the fourth quarter of fiscal 2021 50,000 — Total Convertible notes payable $ 180,129 $ 155,000 Accrued interest 68,234 72,698 Total convertible and other notes payable, net $ 248,363 $ 227,698 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of deferred tax assets | The Company’s deferred tax assets by period are as follows: June 30, June 30, 2020 2019 Deferred Tax Assets $ 242,000 $ 269,000 Valuation Allowance (242,000 ) (269,000 ) Income Tax Expense $ – $ – |
Schedule of components of income tax expense | The components of income tax expense for the years ended June 30, 2020 and 2019, respectively, are as follows: June 30, June 30, 2020 2019 Change in Deferred Tax Assets $ (27,000 ) $ 69,000 Change in Valuation Allowance 27,000 (69,000 ) Income Tax Expense $ – $ – |
Schedule of differences between the statutory income tax rates and our effective rate | The differences between the statutory income tax rates computed at the U.S. federal statutory rate and our effective rate were the following: June 30, June 30, 2020 2019 Federal Statutory Rate 21 % 21 % Permanent Difference: Goodwill impairment – (18 %) Change in valuation allowance (21 %) (3 %) Net Rate 0 % 0 % |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended |
Feb. 29, 2020 | Jun. 30, 2020 | |
Proceeds from notes payable | $ 25,920 | |
Convertible Promissory Note Payable [Member] | Chief Executive Officer [Member] | ||
Maturity date | Oct. 31, 2020 | |
Proceeds from notes payable | $ 10,000 | |
Interest rate of debt | 6.00% |
NOTES AND CONVERTIBLE NOTES P_3
NOTES AND CONVERTIBLE NOTES PAYABLE (Details) - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
Total Notes payable | $ 104,560 | $ 485,560 |
Accrued interest | 8,900 | 3,000 |
Total convertible and other notes payable, net | 113,460 | 488,560 |
Notes Payble [Member] | ||
Total Notes payable | 20,000 | 281,000 |
18% Notes Payble Due in December 2018 [Member] | ||
Total Notes payable | 100,000 | |
6% Related Party Notes Payble Due in October 2020 [Member] | ||
Total Notes payable | 84,560 | 74,560 |
12% Notes payble Due in December 2019 [Member] | ||
Total Notes payable | $ 30,000 |
NOTES AND CONVERTIBLE NOTES P_4
NOTES AND CONVERTIBLE NOTES PAYABLE (Details 1) - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Total Convertible notes payable | $ 180,129 | $ 155,000 |
Accrued interest | 68,234 | 72,698 |
Total convertible and other notes payable, net | 248,363 | 227,698 |
12% Convertible Notes Payble [Member] | ||
Total Convertible notes payable | $ 65,000 | $ 65,000 |
Maturity date | April 2018 | |
Share price | $ 0.10 | $ 0.10 |
12% Convertible Notes Payble [Member] | ||
Total Convertible notes payable | $ 40,000 | |
Maturity date | Fourth quarter of fiscal 2019 | |
Share price | $ 0.10 | $ 0.10 |
12% Convertible Notes Payble [Member] | ||
Total Convertible notes payable | $ 10,000 | |
Maturity date | First quarter of fiscal 2020 | |
Share price | $ 0.10 | $ 0.10 |
12% Convertible Notes Payble [Member] | ||
Total Convertible notes payable | $ 5,000 | |
Maturity date | Third quarter of fiscal 2020 | |
Share price | $ 0.10 | $ 0.10 |
12% Convertible Notes Payble [Member] | ||
Total Convertible notes payable | $ 30,000 | |
Maturity date | Fourth quarter of fiscal 2020 | |
Share price | $ 0.10 | $ 0.10 |
12% Convertible Notes Payble [Member] | ||
Total Convertible notes payable | $ 5,000 | |
Maturity date | Second quarter of fiscal 2020 | |
Share price | $ 0.10 | |
12% Convertible Notes Payble [Member] | ||
Total Convertible notes payable | $ 50,000 | |
Maturity date | Third quarter of fiscal 2021 | |
Share price | $ 0.10 | $ 0.10 |
12% Convertible Notes Payble [Member] | ||
Total Convertible notes payable | $ 65,129 | |
Maturity date | Fourth quarter of fiscal 2021 | |
Share price | $ 0.10 |
NOTES AND CONVERTIBLE NOTES P_5
NOTES AND CONVERTIBLE NOTES PAYABLE (Details Narrative) | 1 Months Ended | 12 Months Ended | ||
Aug. 31, 2019USD ($) | Jun. 30, 2020USD ($)shares$ / shares | Jun. 30, 2019USD ($)shares | Jan. 31, 2020USD ($) | |
Interest payments | $ 144,000 | $ 794,000 | ||
Number of common shares issued upon debt conversion | shares | 1,442,223 | 7,941,912 | ||
Conversion price (in dollars per share) | $ / shares | $ 0.10 | |||
Interest expense | $ 45,000 | $ 159,000 | ||
Gain on settlement | $ 324,821 | |||
18% Notes Payble [Member] | ||||
Previously outstanding note payable | $ 100,000 | |||
18% Notes Payble [Member] | Property, Plant and Equipment, Other [Member] | ||||
Net book value | 74,617 | |||
12% Notes Payble [Member] | ||||
Previously outstanding note payable | $ 250,000 | |||
Notes Payble [Member] | ||||
Previously outstanding note payable | $ 30,000 | |||
Cash payment | 6,561 | |||
Gain on settlement | $ 23,439 |
STOCKHOLDERS' EQUITY (Details N
STOCKHOLDERS' EQUITY (Details Narrative) - USD ($) | 1 Months Ended | ||||
Apr. 30, 2020 | Nov. 30, 2019 | Jul. 31, 2019 | Jun. 30, 2019 | Jun. 30, 2020 | |
Common stock, authorized | 200,000,000 | 200,000,000 | |||
Common stock, par value | $ 0.005 | $ 0.005 | |||
Preferred stock, authorized | 10,000,000 | 10,000,000 | |||
Preferred stock, par value | $ 0.01 | $ 0.01 | |||
Common stock, issued | 171,008,684 | 172,450,907 | |||
Common stock, outstanding | 171,008,684 | 172,450,907 | |||
Number of common shares issued, shares | 991,351 | 337,039 | 113,833 | ||
Number of common shares issued, value | $ 101,000 | $ 34,000 | $ 11,000 | ||
Restricted And Unregistered Common Stock [Member] | |||||
Number of common shares issued, shares | 8,441,912 | ||||
Number of common shares issued, value | $ 794,000 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
Income Tax Disclosure [Abstract] | ||
Deferred Tax Assets | $ 242,000 | $ 269,000 |
Valuation Allowance | (242,000) | (269,000) |
Income Tax Expense |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||
Change in Deferred Tax Assets | $ (27,000) | $ 69,000 |
Change in Valuation Allowance | 27,000 | (69,000) |
Income Tax Expense |
INCOME TAXES (Details 2)
INCOME TAXES (Details 2) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||
Federal Statutory Rate | 21.00% | 21.00% |
Permanent Difference: | ||
Goodwill impairment | (18.00%) | |
Change in valuation allowance | (21.00%) | (3.00%) |
Net Rate | 0.00% | 0.00% |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) | 12 Months Ended |
Jun. 30, 2020USD ($) | |
Income Tax Disclosure [Abstract] | |
Net operating loss carryforwards | $ 1,253,000 |
Operating loss carryforward, expiration year | Dec. 31, 2034 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | Jul. 02, 2020 | Jun. 30, 2020 | Jun. 30, 2019 |
Debt conversion price (in dollars per share) | $ 0.10 | ||
Proceed from convertible notes payable | $ 165,129 | $ 101,000 | |
Subsequent Event [Member] | |||
Gross profits sold and distributed outside (percent) | 25.00% | ||
Effective date | Jul. 1, 2020 |