Cover
Cover - shares | 9 Months Ended | |
Mar. 31, 2021 | May 14, 2021 | |
Cover [Abstract] | ||
Entity Registrant Name | UPD HOLDING CORP. | |
Entity Central Index Key | 0000836937 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2021 | |
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 Reporting Status Current | No | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 194,190,907 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2021 |
CONSOLIDATED BALANCE SHEETS (un
CONSOLIDATED BALANCE SHEETS (unaudited) - USD ($) | Mar. 31, 2021 | Jun. 30, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 52,825 | $ 20,718 |
Assets held for sale | 755 | |
Total current assets | 52,825 | 21,473 |
Property and equipment, net | 26,364 | |
Right of use asset, net | 48,691 | |
Goodwill | 416,981 | |
Total assets | 544,861 | 21,473 |
Current liabilities: | ||
Accounts payable | 82,549 | 14,805 |
Accrued interest | 86,305 | 75,934 |
Convertible notes payable, net of discount | 206,820 | 180,129 |
Related party notes payable | 94,560 | 84,560 |
Lease liability | 25,708 | |
Liabilities related to assets sold | 250,167 | |
Total current liabilities | 495,942 | 605,595 |
Lease liability, net of current portion | 22,983 | |
Total liabilities | 518,925 | 605,595 |
Commitments and Contingencies | ||
Stockholders' equity (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 194,190,907 and 172,450,907 issued and outstanding at March 31, 2021 and June 30, 2020, respectively | 970,955 | 862,255 |
Additional paid-in-capital | 2,428,992 | 1,872,632 |
Accumulated deficit | (3,374,011) | (3,319,009) |
Total stockholders' equity (deficit) | 25,936 | (584,122) |
Total liabilities and stockholders' equity (deficit) | $ 544,861 | $ 21,473 |
CONSOLIDATED BALANCE SHEETS (_2
CONSOLIDATED BALANCE SHEETS (unaudited) (Parenthetical) - $ / shares | Mar. 31, 2021 | Jun. 30, 2020 |
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 | 194,190,907 | 172,450,907 |
Common stock, outstanding | 194,190,907 | 172,450,907 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | |
Revenues: | ||||
Net revenue | ||||
Operating costs and expenses: | ||||
Professional fees | 75,526 | 29,092 | 142,712 | 113,838 |
General and administrative | 115,623 | 595 | 120,815 | 4,111 |
Total operating costs and expenses | 191,149 | 29,687 | 263,527 | 117,949 |
Operating loss | (191,149) | (29,687) | (263,527) | (117,949) |
Interest expense, net | (9,388) | (5,837) | (19,237) | (40,708) |
Other income, net | 301,383 | (23,402) | 324,822 | |
Income (loss) from continuing operations, before income taxes | (200,537) | 265,859 | (306,166) | 166,165 |
Benefit from income taxes | 10,852 | |||
Income (loss) from continuing operations | (200,537) | 265,859 | (295,314) | 166,165 |
Discontinued operations: | ||||
Gain on sale of discontinued operations, net of tax | 240,312 | |||
Income from discontinued operations, net of tax | 240,312 | |||
Net income (loss) | $ (200,537) | $ 265,859 | $ (55,002) | $ 166,165 |
Basic and diluted earnings (loss) per share from: | ||||
Continuing operations (in dollars per share) | $ 0 | $ 0 | $ 0 | $ 0 |
Discontinued operations (in dollars per share) | 0 | 0 | ||
Basic and diluted earnings (loss) per share from: | $ 0 | $ 0 | $ 0 | $ 0 |
Weighted average shares outstanding (in shares) | ||||
Basic and diluted (in shares) | 185,135,574 | 169,545,852 | 176,617,403 | 169,414,938 |
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, 2019 | $ 855,044 | $ 1,709,731 | $ (3,449,946) | $ (885,171) | |
Balance at beginning (in shares) at Jun. 30, 2019 | 171,008,684 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock for conversion of related party debt and interest | $ 569 | 10,814 | 11,383 | ||
Issuance of common stock for conversion of related party debt and interest (in shares) | 113,833 | ||||
Net income (loss) | (20,243) | (20,243) | |||
Balance at end at Sep. 30, 2019 | $ 855,613 | 1,720,545 | (3,470,189) | (894,031) | |
Balance at end (in shares) at Sep. 30, 2019 | 171,122,517 | ||||
Balance at beginning at Jun. 30, 2019 | $ 855,044 | 1,709,731 | (3,449,946) | (885,171) | |
Balance at beginning (in shares) at Jun. 30, 2019 | 171,008,684 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | 166,165 | ||||
Balance at end at Mar. 31, 2020 | $ 857,298 | 1,752,535 | (3,283,781) | (673,948) | |
Balance at end (in shares) at Mar. 31, 2020 | 171,459,556 | ||||
Balance at beginning at Sep. 30, 2019 | $ 855,613 | 1,720,545 | (3,470,189) | (894,031) | |
Balance at beginning (in shares) at Sep. 30, 2019 | 171,122,517 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock for conversion of related party debt and interest | $ 1,685 | 31,990 | 33,675 | ||
Issuance of common stock for conversion of related party debt and interest (in shares) | 337,039 | ||||
Net income (loss) | (79,451) | (79,451) | |||
Balance at end at Dec. 31, 2019 | $ 857,298 | 1,752,535 | (3,549,640) | (939,807) | |
Balance at end (in shares) at Dec. 31, 2019 | 171,459,556 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | 265,859 | 265,859 | |||
Balance at end at Mar. 31, 2020 | $ 857,298 | 1,752,535 | (3,283,781) | (673,948) | |
Balance at end (in shares) at Mar. 31, 2020 | 171,459,556 | ||||
Balance at beginning at Jun. 30, 2020 | $ 862,255 | 1,872,632 | (3,319,009) | (584,122) | |
Balance at beginning (in shares) at Jun. 30, 2020 | 172,450,907 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock for conversion of related party debt and interest | |||||
Net income (loss) | (53,955) | (53,955) | |||
Balance at end at Sep. 30, 2020 | $ 862,255 | 1,872,632 | (3,372,964) | (638,077) | |
Balance at end (in shares) at Sep. 30, 2020 | 172,450,907 | ||||
Balance at beginning at Jun. 30, 2020 | $ 862,255 | 1,872,632 | (3,319,009) | (584,122) | |
Balance at beginning (in shares) at Jun. 30, 2020 | 172,450,907 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | (55,002) | ||||
Balance at end at Mar. 31, 2021 | $ 970,955 | 2,428,992 | (3,374,011) | 25,936 | |
Balance at end (in shares) at Mar. 31, 2021 | 17,340,000 | ||||
Balance at beginning at Sep. 30, 2020 | $ 862,255 | 1,872,632 | (3,372,964) | (638,077) | |
Balance at beginning (in shares) at Sep. 30, 2020 | 172,450,907 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock for conversion of related party debt and interest | $ 19,500 | 71,370 | 90,870 | ||
Issuance of common stock for conversion of related party debt and interest (in shares) | 3,900,000 | ||||
Stock based compensation | $ 2,500 | 9,150 | 11,650 | ||
Stock based compensation (in shares) | 500,000 | ||||
Net income (loss) | 199,490 | 199,490 | |||
Balance at end at Dec. 31, 2020 | $ 884,255 | 1,953,152 | (3,173,474) | (336,067) | |
Balance at end (in shares) at Dec. 31, 2020 | 176,850,907 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock for acquisition of Vital Behavioral Health, Inc. | $ 84,200 | 437,840 | 522,040 | ||
Issuance of common stock for acquisition of Vital Behavioral Health, Inc. (in shares) | 16,840,000 | ||||
Stock based compensation | $ 2,500 | 13,000 | 15,500 | ||
Stock based compensation (in shares) | 500,000 | ||||
Beneficial conversion feature for convertible debt | 25,000 | 25,000 | |||
Net income (loss) | (200,537) | (200,537) | |||
Balance at end at Mar. 31, 2021 | $ 970,955 | $ 2,428,992 | $ (3,374,011) | $ 25,936 | |
Balance at end (in shares) at Mar. 31, 2021 | 17,340,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 9 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (55,002) | $ 166,165 |
(Income) loss from discontinued operations | ||
Gain on sale of discontinued operations | (240,312) | |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||
Depreciation and amortization | 1,915 | |
Stock-based compensation | 27,150 | |
Loss (gain) on settlement of debt | 23,402 | (324,822) |
Amortization of debt discount | 1,820 | |
Changes in operating assets and liabilities: | ||
Assets held for sale | 755 | (755) |
Accrued interest | 17,417 | 42,631 |
Accounts payable | 39,624 | (6,003) |
Net cash used in operating activities - continuing operations | (183,231) | (122,784) |
Net cash used in operating activities - discontinued operations | (11,667) | |
Net cash used in operating activities | (194,898) | (122,784) |
Cash flows from investing activities: | ||
Purchase of property and equipment | (28,279) | |
Cash acquired in business combination | 10,284 | |
Net cash used in investing activities | (17,995) | |
Cash flows from financing activities: | ||
Proceeds from related party notes payable | 10,000 | |
Proceeds from issuance of convertible notes payable | 115,000 | 115,129 |
Proceeds from issuance notes payable | 130,000 | |
Principal payments on notes payable | (6,561) | |
Net cash provided by financing activities | 245,000 | 118,568 |
Net increase (decrease) in cash and cash equivalents | 32,107 | (4,216) |
Cash and cash equivalents at beginning of period | 20,718 | 7,215 |
Cash and cash equivalents at end of period | 52,825 | 2,999 |
Cash paid for income taxes | ||
Cash paid for interest | 4,000 | |
Non-Cash Supplemental Disclosures | ||
Common stock issued for asset acquisition | 522,040 | |
Common stock issued for debt settlement | 90,870 | 40,000 |
Notes payable forgiven for asset disposition | 350,000 | |
Notes payable forgiven in business acquisition | $ 120,000 |
BUSINESS AND ORGANIZATION
BUSINESS AND ORGANIZATION | 9 Months Ended |
Mar. 31, 2021 | |
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 is pursuing business development opportunities in the rehabilitation services industry. On February 16, 2021, UPD completed its acquisition of Vital Behavioral Health, Inc., which intends to operate U.S. facilities focusing on substance abuse treatment and offer various programs that help provide a continuum of care to its patients. The Company previously operated in the food and beverage industry through Record Street Brewing (“RSB”), which was sold as of December 31, 2020. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Unaudited Interim Financial Statements The accompanying unaudited interim consolidated financial statements of the Company and its subsidiaries have been prepared in accordance with generally accepted accounting principles (“GAAP”), pursuant to the rules and regulations of the Securities and Exchange Commission and are unaudited. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary for a fair presentation of the results for the interim periods presented have been made. The results for the three and nine-month period ended March 31, 2021, may not be indicative of the results for the entire year. These financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2020 filed with the Securities and Exchange Commission on August 14, 2020, and the Company’s Current Report on Form 8-K/A filed with the Securities and Exchange Commission on May 4, 2021, which amends and supplements the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 22, 2021. Principles of Consolidation The Company consolidates the assets, liabilities, and operating results of its wholly owned and majority-owned subsidiaries: (i) iMetabolic Corp, a Nevada corporation; (ii) United Product Development Corp., a Nevada corporation; (iii) Vital Behavioral Health, Inc., a Nevada corporation (since February 16, 2021); (iv) VBH Frankfort LLC, a Nevada limited liability company (since February 16, 2021); (v) VSL Frankfort LLC, a Nevada limited liability company (since February 16, 2021); (vi) VBH Garden Grove Inc. (since February 17, 2021); (vii) VBH Kentucky Inc., a Nevada corporation (since March 16, 2021); and (viii) Record Street Brewing Co., a Nevada corporation (through December 31, 2020). 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 March 31, 2021 and June 30, 2020 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. Revenue Recognition The Company previously licensed its beer and beverage products to its customers. The royalties earned from these licensing agreements represent revenue earned under contracts in which the Company bills and collects from its licensee in arrears. 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 licensing royalties are recognized when the Company’s performance obligations are satisfied upon its licensee’s sales to its customers. The Company primarily invoices its licensee on a quarterly basis, net of returns. The Company did not realize material revenues in the current period through the disposition date on December 31, 2020. The Company’s expected rehab service and facility revenue will be recognized in accordance with the same five core principles after meeting the applicable licensing requirements. Property and Equipment Property and Equipment are stated at cost less accumulated depreciation. Expenditures for repairs and maintenance are charged to expense as incurred and additions and improvements that significantly extend the lives of assets are capitalized. Upon sale or other retirement of depreciable property, the cost and accumulated depreciation are removed from the related accounts and any gain or loss is reflected in operations. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. The useful lives of tenant improvements are the lesser of the estimated useful life of the asset or the term of the lease (2 years for current lease); furnishings and fixtures are 5 to 7 years; and operating lease right of use assets over the expected term of the operating lease. and office and computer equipment are 3 to 5 years. The Company periodically reviews property and equipment when events or changes in circumstances indicate that their carrying amounts may not be recoverable or their depreciation or amortization periods should be accelerated. Recoverability is assessed based on several factors, including the intention with respect to maintaining facilities and projected discounted cash flows from operations. An impairment loss would be recognized for the amount by which the carrying amount of the assets exceeds their fair value, as approximated by the present value of their projected discounted cash flows. Goodwill Goodwill represents the excess of fair value over identifiable tangible and intangible net assets acquired in business combinations. Goodwill is not amortized, instead goodwill is reviewed for impairment at least annually, or on an interim basis between annual tests when events or circumstances indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying value. 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. Management provides no assurances that the Company will be successful in accomplishing any of its plans. |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 9 Months Ended |
Mar. 31, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISCONTINUED OPERATIONS | NOTE 3- DISCONTINUED OPERATIONS On December 31, 2020, the Company discontinued its RSB operations pursuant to the Assumption Agreement of the same date whereby 100% of the issued and outstanding common stock of RSB was assigned to RSB’s co-founder and a significant shareholder of the Company. As part of the disposition, the purchaser agreed to assume outstanding liabilities of RSB totaling $250,767 and acquired the rights to all royalties associated with the intellectual property licensing previously held by the Company. The Company reclassified $250,167 of RSB liabilities outstanding as of June 30, 2020 to liabilities related to assets sold in the accompanying condensed consolidated balance sheets. During the three and nine months ended March 31, 2021 and the three and nine months ended March 31, 2020, RSB did not engage in material operations or generate material revenues. The Company did not allocate any interest expense to discontinued operations apart from interest accrued on the obligations that were assumed. |
NOTES AND CONVERTIBLE NOTES PAY
NOTES AND CONVERTIBLE NOTES PAYABLE | 9 Months Ended |
Mar. 31, 2021 | |
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 March 31, June 30, Notes Payable: Notes payable matured in March 2018 with a nominal interest rate $ - $ 20,000 Related Party Notes Payable due October 2020 a nominal interest 94,560 84,560 Total Notes payable $ 94,560 $ 104,560 Accrued interest 11,655 8,900 Total notes payable, net $ 106,215 $ 113,460 *As of December 31, 2020 $20,000 of notes payable outstanding at June 30, 2020 were reclassified to liabilities related to assets sold in the accompanying consolidated balance sheet. Throughout the nine months ended March 31, 2021 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 defaults. The Company’s convertible notes payable consist of the following: Convertible Note Description March 31, 2021 June 30, 2020 Notes payable convertible into common stock at $0.025 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; - 65,129 Notes payable convertible into common stock at $0.05 per share; 100,000 - Notes payable convertible into common stock at $0.10 per share; 15,000 - Notes payable convertible into common stock at $0.10 per share; nominal interest rate of 12%; and matures in the fourth quarter of fiscal 2021 (related party) 50,000 50,000 Total Convertible notes payable $ 230,000 $ 180,129 Unamortized discount (23,180 ) - Convertible notes payable, net 206,820 180,129 Accrued interest 74,650 68,234 Total convertible notes payable, net $ 281,470 $ 248,363 The principal and interest of the Company’s outstanding convertible notes, with the exception of the related party notes totaling $65,000 that matured in April 2018, automatically convert to shares of common stock at $0.10 per share upon maturity if not paid in full prior to maturity. The Company did not make any monthly and interest payments on its outstanding convertible notes payable. During the nine months ended March 31, 2021, a note holder became a related party through the acquisition (in a private transaction not involving the Company) of shares of outstanding common stock in excess of 5%. In October 2020, the Company issued the related party a note payable for total cash proceeds of $100,000. In February 2021, the Company acquired the entity, Vital Behavioral Health, Inc., holding the note. In December 2020, the Company settled related party convertible notes payable and accrued interest totaling approximately $69,000 via the issuance of 3,900,000 shares of common stock. As part of the settlement, the Company recognized a loss of approximately $23,000 associated with the estimated fair value of the stock issued being in excess of the carrying value of the debt. During the three and nine months ended March 31, 2021 the Company recognized interest expense on all outstanding notes and convertible notes payable totaling approximately $9,000 and $19,000, respectively. During the three and nine months ended March 31, 2020 the Company recognized interest expense on all outstanding notes and convertible notes payable totaling approximately $6,000 and $41,000, respectively. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Mar. 31, 2021 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 5 – 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 notes, and they are due on demand. As of March 31, 2021, certain previously outstanding shareholder advances totaling approximately $72,000 were assumed by a third party as part of the RSB disposition as further discussed in Note 3. As discussed in Note 4, certain outstanding notes payable and convertible notes payable became related party obligations through the holder’s common stock ownership. During the nine months ended March 31, 2021 a significant shareholder paid operating expenses on behalf of the Company. As of March 31, 2021 the Company owed the significant shareholder approximately $61,000. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 9 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | NOTE 6 – STOCKHOLDERS EQUITY In February 2021, the Company issued 16,840,000 fully vested shares of common stock for total consideration of approximately $522,000 for the acquisition of Vital Behavioral Health, Inc. In February 2021, the Company issued a consultant 500,000 fully vested shares of common stock for total consideration of approximately $16,000. In December 2020, the Company issued a related party 3,900,000 shares of common stock for the settlement of convertible notes payable and accrued interest totaling approximately $69,000. In December 2020, the Company issued a consultant 500,000 fully vested shares of common stock for total consideration of approximately $12,000. |
ACQUISITION
ACQUISITION | 9 Months Ended |
Mar. 31, 2021 | |
Business Combination, Description [Abstract] | |
ACQUISITION | NOTE 7 – ACQUISITION In February 2021, through a Stock Exchange Agreement (“Exchange Agreement”) in which 100% of the outstanding shares of Vital Behavioral Health Inc. (“Vital”) were acquired via the issuance of 16,840,000 shares of restricted common stock, the Company acquired the assets and assumed the liabilities of Vital and its two wholly owned subsidiaries: VBH Frankfort LLC (“VBHF”) and VSL Frankfort LLC (“VSLF”). The Company did not incur material acquisition costs associated with the Exchange Agreement. The following table represents the fair value of the consideration paid allocated to the assets and liabilities acquired in applying the acquisition method for the completion of the Vital business combination: Description As of Fair value of 16,840,000 shares of restricted common stock $ 522,040 Lease liabilities 52,787 Other current liabilities 27,475 Notes payable forgiven (122,250 ) Total consideration $ 480,052 Cash 10,284 Right of use assets 52,787 Goodwill 416,981 Total assets acquired $ 480,052 Through the Vital acquisition, the Company intends to operate multiple facilities in the U.S. that will focus on substance abuse treatment and offer various programs that help provide a continuum of care to its patients. VBHF is intended to operate as an out-patient substance abuse treatment facility in Frankfort, Kentucky. VSLF is intended to offer sober-designated living quarters for individuals who are in recovery. Each of Vital, VBHF, and VSLF are in the early development stage and have not received any operational licenses or permits through the date of this report. |
OPERATING LEASES
OPERATING LEASES | 9 Months Ended |
Mar. 31, 2021 | |
Leases, Operating [Abstract] | |
OPERATING LEASES | NOTE 8 – OPERATING LEASES As of March 31, 2021 the Company, through its Vital subsidiaries, has the following a non-cancelable lease arrangement: Office facility intended to be used in its substance abuse treatment operations located in Frankfort, Kentucky (the “Frankfort Lease”). The term of the Frankfort Lease is twenty-four months with no explicit extension options. The base monthly payment of the term of the Frankfort Lease is $2,365. The Company estimated the lease liability associated with the facility using a discount rate of 7.7%. The Frankfort Lease commenced on February 1, 2021. The following table summarizes the Company’s undiscounted cash payment obligations for its non-cancelable lease liabilities through the end of the expected term of the lease: 2021 (April 1 to June 30) $ 7,095 2022 28,380 2023 16,555 2024 - 2025 - Total undiscounted cash payments 52,030 Less interest (3,339 ) Present value of payments $ 48,691 The weighted average remaining term of the Company’s non-cancelable operating leases as of March 31, 2021 was approximately 18 months. On January 14, 2021, our wholly owned subsidiary, United Product Development Corporation (the “Subsidiary”), a Nevada corporation, entered into a commercial lease (the “Lexington Lease”) with Athens Commons, LLC, a Kentucky limited liability company, for the lease of a 88,740 square foot building at 5532 Athens Boonsboro Road, Lexington, Kentucky. The Lexington Lease is for a 5-year term with options to renew for 2 additional 5-year terms. The effective beginning date of the Lexington Lease term was January 14, 2021. The Lexington Lease provides for minimum monthly rent of $50,000 for the first lease year and a 3% rental increase for each succeeding lease year. The Company was only obligated to pay $20,000 per month for up to the first six month until the property was re-zoned and licensed for the Company’s planned rehabilitation operations. The Company also has an option to cancel the lease during the first six months if it is unable to obtain re-zoning approval and applicable regulatory licensing. As of March 31, 2021, the Company had not received the applicable approvals necessary to operate the as a substance abuse detoxification facility and determined the likelihood of the lease being canceled as probable. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Mar. 31, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 9 – SUBSEQUENT EVENTS On May 20, 2021 the Company terminated the Lexington operating lease agreement with Athens Commons without early termination penalties. Prior to the termination, the Company made monthly base rent payments of $20,000 plus utilities. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Unaudited Interim Financial Statements | Unaudited Interim Financial Statements The accompanying unaudited interim consolidated financial statements of the Company and its subsidiaries have been prepared in accordance with generally accepted accounting principles (“GAAP”), pursuant to the rules and regulations of the Securities and Exchange Commission and are unaudited. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary for a fair presentation of the results for the interim periods presented have been made. The results for the three and nine-month period ended March 31, 2021, may not be indicative of the results for the entire year. These financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2020 filed with the Securities and Exchange Commission on August 14, 2020, and the Company’s Current Report on Form 8-K/A filed with the Securities and Exchange Commission on May 4, 2021, which amends and supplements the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 22, 2021. |
Principles of Consolidation | Principles of Consolidation The Company consolidates the assets, liabilities, and operating results of its wholly owned and majority-owned subsidiaries: (i) iMetabolic Corp, a Nevada corporation; (ii) United Product Development Corp., a Nevada corporation; (iii) Vital Behavioral Health, Inc., a Nevada corporation (since February 16, 2021); (iv) VBH Frankfort LLC, a Nevada limited liability company (since February 16, 2021); (v) VSL Frankfort LLC, a Nevada limited liability company (since February 16, 2021); (vi) VBH Garden Grove Inc. (since February 17, 2021); (vii) VBH Kentucky Inc., a Nevada corporation (since March 16, 2021); and (viii) Record Street Brewing Co., a Nevada corporation (through December 31, 2020). 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 March 31, 2021 and June 30, 2020 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. |
Revenue Recognition | Revenue Recognition The Company previously licensed its beer and beverage products to its customers. The royalties earned from these licensing agreements represent revenue earned under contracts in which the Company bills and collects from its licensee in arrears. 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 licensing royalties are recognized when the Company’s performance obligations are satisfied upon its licensee’s sales to its customers. The Company primarily invoices its licensee on a quarterly basis, net of returns. The Company did not realize material revenues in the current period through the disposition date on December 31, 2020. The Company’s expected rehab service and facility revenue will be recognized in accordance with the same five core principles after meeting the applicable licensing requirements. |
Property and Equipment | Property and Equipment Property and Equipment are stated at cost less accumulated depreciation. Expenditures for repairs and maintenance are charged to expense as incurred and additions and improvements that significantly extend the lives of assets are capitalized. Upon sale or other retirement of depreciable property, the cost and accumulated depreciation are removed from the related accounts and any gain or loss is reflected in operations. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. The useful lives of tenant improvements are the lesser of the estimated useful life of the asset or the term of the lease (2 years for current lease); furnishings and fixtures are 5 to 7 years; and operating lease right of use assets over the expected term of the operating lease. and office and computer equipment are 3 to 5 years. The Company periodically reviews property and equipment when events or changes in circumstances indicate that their carrying amounts may not be recoverable or their depreciation or amortization periods should be accelerated. Recoverability is assessed based on several factors, including the intention with respect to maintaining facilities and projected discounted cash flows from operations. An impairment loss would be recognized for the amount by which the carrying amount of the assets exceeds their fair value, as approximated by the present value of their projected discounted cash flows. |
Goodwill | Goodwill Goodwill represents the excess of fair value over identifiable tangible and intangible net assets acquired in business combinations. Goodwill is not amortized, instead goodwill is reviewed for impairment at least annually, or on an interim basis between annual tests when events or circumstances indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying value. |
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. Management provides no 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) | 9 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of notes notes payable | The Company’s notes payable consist of the following: Note Description March 31, June 30, Notes Payable: Notes payable matured in March 2018 with a nominal interest rate $ - $ 20,000 Related Party Notes Payable due October 2020 a nominal interest 94,560 84,560 Total Notes payable $ 94,560 $ 104,560 Accrued interest 11,655 8,900 Total notes payable, net $ 106,215 $ 113,460 *As of December 31, 2020 $20,000 of notes payable outstanding at June 30, 2020 were reclassified to liabilities related to assets sold in the accompanying consolidated balance sheet. |
Schedule of convertible notes payable | The Company’s convertible notes payable consist of the following: Convertible Note Description March 31, 2021 June 30, 2020 Notes payable convertible into common stock at $0.025 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; - 65,129 Notes payable convertible into common stock at $0.05 per share; 100,000 - Notes payable convertible into common stock at $0.10 per share; 15,000 - Notes payable convertible into common stock at $0.10 per share; nominal interest rate of 12%; and matures in the fourth quarter of fiscal 2021 (related party) 50,000 50,000 Total Convertible notes payable $ 230,000 $ 180,129 Unamortized discount (23,180 ) - Convertible notes payable, net 206,820 180,129 Accrued interest 74,650 68,234 Total convertible notes payable, net $ 281,470 $ 248,363 |
ACQUISITION (Tables)
ACQUISITION (Tables) | 9 Months Ended |
Mar. 31, 2021 | |
Business Combination, Description [Abstract] | |
Schedule of assets and liabilities acquired in applying the acquisition method | The following table represents the fair value of the consideration paid allocated to the assets and liabilities acquired in applying the acquisition method for the completion of the Vital business combination: Description As of Fair value of 16,840,000 shares of restricted common stock $ 522,040 Lease liabilities 52,787 Other current liabilities 27,475 Notes payable forgiven (122,250 ) Total consideration $ 480,052 Cash 10,284 Right of use assets 52,787 Goodwill 416,981 Total assets acquired $ 480,052 |
OPERATING LEASES (Tables)
OPERATING LEASES (Tables) | 9 Months Ended |
Mar. 31, 2021 | |
Leases, Operating [Abstract] | |
Schedule of undiscounted cash payments non-cancelable lease liabilities | The following table summarizes the Company’s undiscounted cash payment obligations for its non-cancelable lease liabilities through the end of the expected term of the lease: 2021 (April 1 to June 30) $ 7,095 2022 28,380 2023 16,555 2024 - 2025 - Total undiscounted cash payments 52,030 Less interest (3,339 ) Present value of payments $ 48,691 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) | 9 Months Ended |
Mar. 31, 2021 | |
Furnishings and fixtures [Member] | Minimum [Member] | |
Useful lives | 5 years |
Furnishings and fixtures [Member] | Maximum [Member] | |
Useful lives | 7 years |
office and computer equipment [Member] | Minimum [Member] | |
Useful lives | 3 years |
office and computer equipment [Member] | Maximum [Member] | |
Useful lives | 5 years |
DISCONTINUED OPERATIONS (Detail
DISCONTINUED OPERATIONS (Details Narrative) - Record Street Brewing [Member] - USD ($) | Dec. 31, 2020 | Jun. 30, 2020 |
Outstanding liabilities | $ 250,767 | |
Percentage of issued and outstanding stock | 100.00% | |
Discontinued operation name | RSB operations | |
Liabilities related to assets sold | $ 250,167 |
NOTES AND CONVERTIBLE NOTES P_3
NOTES AND CONVERTIBLE NOTES PAYABLE (Details) - USD ($) | Mar. 31, 2021 | Jun. 30, 2020 | |
Total Notes payable | $ 94,560 | $ 104,560 | |
Accrued interest | 11,655 | 8,900 | |
Total notes payable, net | 106,215 | 113,460 | |
12% Note Payable Due in March 2018 [Member] | |||
Total Notes payable | [1] | 20,000 | |
6% Related Party Notes Payble Due in October 2020 [Member] | |||
Total Notes payable | $ 94,560 | $ 84,560 | |
[1] | As of December 31, 2020 $20,000 of notes payable outstanding at June 30, 2020 were reclassified to liabilities related to assets sold in the accompanying consolidated balance sheet. |
NOTES AND CONVERTIBLE NOTES P_4
NOTES AND CONVERTIBLE NOTES PAYABLE (Details 1) - USD ($) | 9 Months Ended | |
Mar. 31, 2021 | Jun. 30, 2020 | |
Total convertible notes payable | $ 230,000 | $ 180,129 |
Unamortized discount | (23,180) | |
Convertible notes payable, net | 206,820 | 180,129 |
Accrued interest | 74,650 | 68,234 |
Total convertible notes payable, net | 281,470 | 248,363 |
12% Convertible Notes Payble [Member] | ||
Total convertible notes payable | $ 65,000 | $ 65,000 |
Maturity date | April 2018 | |
Share price | $ 0.025 | $ 0.025 |
12% Convertible Notes Payble [Member] | ||
Total convertible notes payable | $ 65,129 | |
Maturity date | July 2020 | |
Share price | $ 0.10 | $ 0.10 |
12% Convertible Notes Payble [Member] | ||
Total convertible notes payable | $ 50,000 | $ 50,000 |
Maturity date | Fourth quarter of fiscal 2021 | |
Share price | $ 0.10 | $ 0.10 |
12% Convertible Notes Payble [Member] | ||
Total convertible notes payable | $ 100,000 | |
Maturity date | March 2022 | |
Share price | $ 0.05 | $ 0.05 |
12% Convertible Notes Payble [Member] | ||
Total convertible notes payable | $ 15,000 | |
Maturity date | February 2022 | |
Share price | $ 0.10 | $ 0.10 |
NOTES AND CONVERTIBLE NOTES P_5
NOTES AND CONVERTIBLE NOTES PAYABLE (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Dec. 31, 2020 | Oct. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | Jun. 30, 2020 | |
Convertible notes payable | $ 230,000 | $ 230,000 | $ 180,129 | ||||
Interest expense | 9,000 | $ 6,000 | 19,000 | $ 41,000 | |||
Gain on settlement | (23,402) | $ 324,822 | |||||
Issuance of common stock for conversion of related party debt and interest | 3,900,000 | ||||||
Estimated fair value of the stock issued | 23,000 | ||||||
Convertible Notes Payble [Member] | |||||||
Convertible notes payable | $ 65,000 | $ 65,000 | $ 65,000 | ||||
Maturity date | April 2018 | ||||||
Share price | $ 0.025 | $ 0.025 | $ 0.025 | ||||
Notes Payble [Member] | |||||||
Notes payable | $ 20,000 | ||||||
Gain on settlement | $ 69,000 | ||||||
Related Party [Member] | |||||||
Proceeds from notes payable | $ 100,000 | ||||||
Related Party [Member] | Common Stock [Member] | |||||||
Stock in excess percent | 5.00% | ||||||
Related Party [Member] | Convertible Notes Payble [Member] | |||||||
Convertible notes payable | $ 65,000 | $ 65,000 | |||||
Maturity date | April 2018 | ||||||
Share price | $ 0.1 | $ 0.1 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 9 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Proceeds from related party | $ 10,000 | |
Related Party [Member] | ||
Proceeds from related party | 72,000 | |
Due to related parties | $ 61,000 |
STOCKHOLDERS' EQUITY (Details N
STOCKHOLDERS' EQUITY (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | ||||
Feb. 28, 2021 | Feb. 21, 2021 | Dec. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | |
Issuance of common stock for conversion of related party debt and interest | $ 90,870 | $ 33,675 | $ 11,383 | |||
Vital Behavioral Health, Inc [Member] | ||||||
Number of fully vested shares issued | 16,840,000 | |||||
Total consideration | $ 522,000 | |||||
Related Party [Member] | ||||||
Issuance of common stock for conversion of related party debt and interest | $ 69,000 | |||||
Issuance of common stock for conversion of related party debt and interest (in shares) | 3,900,000 | |||||
Consultant [Member] | ||||||
Number of fully vested shares issued | 500,000 | 500,000 | ||||
Total consideration | $ 16,000 | $ 12,000 |
ACQUISITION (Details)
ACQUISITION (Details) - USD ($) | Feb. 16, 2021 | Mar. 31, 2021 | Jun. 30, 2020 |
Goodwill | $ 416,981 | ||
Vital Behavioral Health Inc. [Member] | |||
Fair value of 16,840,000 shares of restricted common stock | $ 522,040 | ||
Lease liabilities | 52,787 | ||
Other current liabilities | 27,475 | ||
Notes payable forgiven | (122,250) | ||
Total consideration | 480,052 | ||
Cash | 10,284 | ||
Right of use assets | 52,787 | ||
Goodwill | 416,981 | ||
Total assets acquired | $ 480,052 |
ACQUISITION (Details Narrative)
ACQUISITION (Details Narrative) - Stock Exchange Agreement [Member] - Vital Behavioral Health Inc. [Member] | 1 Months Ended |
Feb. 28, 2021shares | |
Percentage of acquired outstanding shares | 100.00% |
Number of issuance restricted common stock | 16,840,000 |
OPERATING LEASES (Details)
OPERATING LEASES (Details) | Mar. 31, 2021USD ($) |
Leases, Operating [Abstract] | |
2021 (April 1 to June 30) | $ 7,095 |
2022 | 28,380 |
2023 | 16,555 |
2024 | |
2025 | |
Total undiscounted cash payments | 52,030 |
Less interest | (3,339) |
Present value of payments | $ 48,691 |
OPERATING LEASES (Details Narra
OPERATING LEASES (Details Narrative) | Jan. 14, 2021USD ($)ft² | Mar. 31, 2021USD ($) |
Athens Commons, LLC [Member] | United Product Development Corporation [Member] | ||
Lease term | 5 years | |
Monthly lease payment | $ 50,000 | |
Area of building | ft² | 88,740 | |
Location | 5532 Athens Boonsboro Road, Lexington, Kentucky | |
Lease renewal term | 2 years | |
Percentage of rental increase for succeding lease year | 3.00% | |
Description of lease | The Company was only obligated to pay $20,000 per month for up to the first six month until the property was re-zoned and licensed for the Company’s planned rehabilitation operations. | |
Non-cancelable Lease Arrangement [Member] | Frankfort Lease [Member] | ||
Commenced date | Feb. 1, 2021 | |
Lease term | 24 months | |
Monthly lease payment | $ 2,365 | |
Discount rate | 7.70% | |
Remaining lease term | 18 months |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) | May 20, 2021USD ($) |
Athens Commons, LLC [Member] | Lexington Operating Lease Agreement [Member] | Subsequent Event [Member] | |
Monthly base rent payments | $ 20,000 |