[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes[X] No[ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]

Indicate by check mark whether the registrant is a shell Company (as defined in Rule 12b-2 of the Act). Yes [ ] No [X]

The number of shares outstanding of the issuer's Common Stock, as of ~~November 11, 2020~~May 7, 2021 was ~~2,328,784,419.~~3,040,944,203.

The accompanying unaudited interim condensed consolidated financial statements included herein, have been prepared by Galaxy Next Generation, Inc. (the "Company") pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. These condensed consolidated statements have been prepared in accordance with the Company's accounting policies described in the Company's Annual Report on Form 10-K for the year ended June 30, 2020 and should be read in conjunction with the audited consolidated financial statements and the notes thereto included in that report. Unless the context indicates otherwise, references to the "Company," "we, " "us," "our" or "Galaxy" means Galaxy Next Generation, Inc. and its subsidiaries.

The following unaudited condensed consolidated financial statements are included herein:


GALAXY NEXT GENERATION, INC.	GALAXY NEXT GENERATION, INC.			GALAXY NEXT GENERATION, INC.
Condensed Consolidated Balance Sheets	Condensed Consolidated Balance Sheets			Condensed Consolidated Balance Sheets

		September 30, 2020	June 30, 2020		March 31, 2021	June 30, 2020
Assets	Assets	(Unaudited)	(Audited)	Assets	(Unaudited)	(Audited)
Current Assets	Current Assets			Current Assets
Cash	Cash	$ 411,721	$ 412,391	Cash	$ 742,382	$ 412,391
Accounts receivable, net	Accounts receivable, net	1,494,872	798,162	Accounts receivable, net	1,302,764	798,162
Inventories, net	Inventories, net	817,010	738,091	Inventories, net	2,207,885	738,091
Prepaid and other current assets	Prepaid and other current assets	2,800	2,800	Prepaid and other current assets	3,950	2,800
Total Current Assets	Total Current Assets	2,726,403	1,951,444	Total Current Assets	4,256,981	1,951,444

Property and Equipment, net (Note 3)	Property and Equipment, net (Note 3)	47,621	52,049	Property and Equipment, net (Note 3)	58,290	52,049

Intangibles, net (Notes 4 and 14)	Intangibles, net (Notes 4 and 14)	1,355,803	1,436,315	Intangibles, net (Notes 4 and 14)	1,335,928	1,436,315

Goodwill (Notes 4 and 14)	Goodwill (Notes 4 and 14)	834,220	834,220	Goodwill (Notes 4 and 14)	834,220	834,220

Operating right of use asset (Note 9)	Operating right of use asset (Note 9)	249,299	223,982	Operating right of use asset (Note 9)	176,624	223,982
Total Assets	Total Assets	$ 5,213,346	$ 4,498,010	Total Assets	$ 6,662,043	$ 4,498,010

Liabilities and Stockholders' Equity (Deficit)	Liabilities and Stockholders' Equity (Deficit)			Liabilities and Stockholders' Equity (Deficit)
Current Liabilities	Current Liabilities			Current Liabilities
Line of credit (Note 5)	Line of credit (Note 5)	$ -	$ 1,236,598	Line of credit (Note 5)	$ 991,598	$ 1,236,598
Convertible notes payable, net of discount (Note 6)	Convertible notes payable, net of discount (Note 6)	677,546	1,101,900	Convertible notes payable, net of discount (Note 6)	-	1,101,900
Derivative liability, convertible debt features and warrants (Note 7)		1,276,312	246,612
Current portion of long term notes payable (Note 6)		570,962	512,425
Derivative liability, convertible debt features and				Derivative liability, convertible debt features and	3,376,000	246,612
warrants (Note 7)				warrants (Note 7)	3,376,000	246,612
Current portion of long-term notes payable (Note 6)				Current portion of long-term notes payable (Note 6)	940,011	512,425
Accrued legal settlement payable (Note 12)	Accrued legal settlement payable (Note 12)	500,000	1,282,000	Accrued legal settlement payable (Note 12)	600,000	1,282,000
Accounts payable	Accounts payable	1,283,957	1,804,269	Accounts payable	906,228	1,804,269
Accrued expenses	Accrued expenses	213,311	371,912	Accrued expenses	434,165	371,912
Deferred revenue	Deferred revenue	1,565,139	1,133,992	Deferred revenue	815,214	1,133,992
Short term portion of related party notes and payables (Note 8)	Short term portion of related party notes and payables (Note 8)	1,239,402	1,272,812	Short term portion of related party notes and payables (Note 8)	3,984,760	1,272,812
Total Current Liabilities	Total Current Liabilities	7,326,629	8,962,520	Total Current Liabilities	12,047,976	8,962,520
Noncurrent Liabilities	Noncurrent Liabilities			Noncurrent Liabilities
Line of credit (Note 5)		936,598	-
Long term portion of related party notes payable (Note 8)		2,075,000	2,075,000
Long term portion of accrued legal settlement payable (Note 12)		558,240	718,000
Long term portion of related party notes payable				Long term portion of related party notes payable	-	2,075,000
(Note 8)				(Note 8)	-	2,075,000
Long term portion of accrued legal settlement payable				Long term portion of accrued legal settlement payable	318,240	718,000
(Note 12)				(Note 12)	318,240	718,000
Notes payable, less current portion (Note 6)	Notes payable, less current portion (Note 6)	447,614	482,553	Notes payable, less current portion (Note 6)	398,853	482,553
Total Liabilities	Total Liabilities	11,344,081	12,238,073	Total Liabilities	12,765,069	12,238,073

Stockholders' Equity (Deficit)	Stockholders' Equity (Deficit)			Stockholders' Equity (Deficit)
Common stock	Common stock	191,211	59,539	Common stock	252,850	59,539
Preferred stock - Series E, non-redeemable	Preferred stock - Series E, non-redeemable	50	50	Preferred stock - Series E, non-redeemable	50	50
Additional paid-in-capital	Additional paid-in-capital	30,309,574	15,697,140	Additional paid-in-capital	40,934,014	15,697,140
Accumulated deficit	Accumulated deficit	(36,631,570)	(23,496,792)	Accumulated deficit	(47,289,940)	(23,496,792)
Total Stockholders' Equity (Deficit)	Total Stockholders' Equity (Deficit)	(6,130,735)	(7,740,063)	Total Stockholders' Equity (Deficit)	(6,103,026)	(7,740,063)

Total Liabilities and Stockholders' Equity (Deficit)	Total Liabilities and Stockholders' Equity (Deficit)	$ 5,213,346	$ 4,498,010	Total Liabilities and Stockholders' Equity (Deficit)	$ 6,662,043	$ 4,498,010

See accompanying notes to the condensed consolidated financial statements (unaudited).



		Three Months Ended September 30,			For the Three Months					For the Nine Months
	2020		2019		Ended March 31,					Ended March 31,
					2021		2020		2021			2020
Revenues	$1,178,213		$ 624,897	$	777,457	$	349,247	$	2,754,463		$	1,850,673
Cost of Sales	833,177		493,679		356,731		130,614		1,660,971			1,116,398

Gross Profit	345,036		131,218		420,726		218,633		1,093,492			734,275

General and Administrative Expenses
Stock compensation and stock issued for services	2,763,000		1,327,811		2,350		48,034		2,778,550			2,055,726
Asset impairment expense					-		2,000,287		-			2,000,287
General and administrative	1,392,227		796,048		1,697,410		1,662,359		4,347,555			4,263,887
Total General and Administrative Expenses	4,155,227		2,123,859		1,699,760		3,710,680		7,126,105			8,319,900
Loss from Operations	(3,810,191)		(1,992,641)		(1,279,034)		(3,492,047)		(6,032,613)			(7,585,625)

Other Income (Expense)
Other income	-		3,049		141,017		-		141,017			3,049
Expenses related to convertible notes payable:
Change in fair value of derivative liability	(1,053,895)		802,968		343,000		695,300		(3,153,583)			2,717,557
Interest accretion	(399,936)		(228,933)		-		(603,852)		(766,603)			(1,412,705)
Interest expense related to Put Purchase Agreement (Note 13)	(4,006,900)		-
Interest expense related to Equity Purchase Agreement (Note 13)					(1,805,687)		-		(6,807,587)			-
Interest expense	(3,863,856)		(601,790)		(289,585)		(1,860,498)		(7,173,779)			(3,822,927)

Total Other Income (Expense)	(9,324,587)		(24,706)		(1,611,255)		(1,769,050)		(17,760,535)			(2,515,026)

Net Loss before Income Taxes	(13,134,778)		(2,017,347)		(2,890,289)		(5,261,097)		(23,793,148)			(10,100,651)

Income taxes (Note 11)	-		-
Income Taxes (Note 11)					-		-		-			-

Net Loss	$(13,134,778)		$(2,017,347)	$	(2,890,289)	$	(5,261,097)	$	(23,793,148)		$	(10,100,651)
Net Basic and Fully Diluted Loss Per Share	$ (0.008)		$ (0.138)	$	(0.001)	$	(0.150)	$	(0.008)		$	(0.470)

Weighted average common shares outstanding
Basic	1,642,915,407		14,658,382		2,822,806,425		35,520,434		2,221,202,596			21,547,126
Fully diluted	2,633,468,281		17,105,758		3,387,367,710		585,972,958		3,433,133,044			339,856,357

See accompanying notes to the condensed consolidated financial statements (unaudited).


GALAXY NEXT GENERATION, INC.
Condensed Consolidated Statement of Changes in Stockholders' Equity (Deficit)
Nine Months Ended March 31, 2021
(Unaudited)
							Total
	Common Stock		Preferred Stock - Class E		Additional	Accumulated	Stockholders'
	Shares	Amount	Shares	Amount	Paid-in Capital	Deficit	Deficit

Balance, July 1, 2020	628,039,242	$ 59,539	500,000	$50	$15,697,140	$(23,496,792)	$ (7,740,063)

Common stock issued for services	105,800,000	10,580	-	-	2,767,970	-	2,778,550

Common stock issued in exchange for debt reduction	1,382,812,744	138,281	-	-	12,892,954	-	13,031,235

Issuance of common stock to warrant holders	249,792,217	-	-	-	-	-	-

Commitment shares issued	57,500,000	5,750	-	-	1,171,250	-	1,177,000

Common stock issued under Equity Purchase Agreement	377,000,000	37,700	-	-	8,254,700	-	8,292,400

Common stock issued as collateral	50,000,000	-	-	-	-	-	-

Common stock issued in acquisition	10,000,000	1,000	-	-	150,000		151,000

Consolidated net loss	-	-	-	-	-	(23,793,148)	(23,793,148)
Balance March 31, 2021	2,860,944,203	$252,850	500,000	$50	$40,934,014	$(47,289,940)	$ (6,103,026)

GALAXY NEXT GENERATION, INC.
Consolidated Statement of Changes in Stockholders' Equity (Deficit)
Three Months Ended September 30, 2020
(Unaudited)

Total

Common Stock

Preferred Stock - Class E

Additional

Accumulated

Stockholders'

Shares

Amount

Shares

Amount

Paid-in Capital

Deficit

Deficit

Balance, July 1, 2020
628,039,242
$ 59,539
     500,000

$50
$15,697,140
$(23,496,792)
$ (7,740,063)

Common stock issued for services
          103,750,000
10,375
                -

                        -
         2,752,625
                      -
           2,763,000

Common stock issued in exchange for debt reduction
968,475,442
96,847
                -

                        -
            7,877,359
                      -
7,974,206

Issuance of common stock to warrant holders
249,792,217
             -
                -

                        -
            -
                      -
             -

Commitment shares issued
          2,500,000
            250
                -

                        -
54,750
                      -
    55,000

Common stock issued under Put Purchase Agreement
242,000,000
24,200
                -

                        -
             3,927,000
                      -
        3,951,900

Condolidated net loss
           -
             -
-

                        -
-
                     (13,134,778)
(13,134,778)

Balance September 20, 2020
2,194,556,901
$191,211
500,000
$50
        $30,309,574
$(36,631,570)
$ (6,130,735)

See accompanying notes to the condensed consolidated financial statements (unaudited).


GALAXY NEXT GENERATION, INC.	GALAXY NEXT GENERATION, INC.					GALAXY NEXT GENERATION, INC.
Consolidated Statement of Changes in Stockholders' Equity (Deficit)
Three Months Ended September 30, 2019
Condensed Consolidated Statement of Changes in Stockholders' Equity (Deficit)						Condensed Consolidated Statement of Changes in Stockholders' Equity (Deficit)
Nine Months Ended March 31, 2020						Nine Months Ended March 31, 2020
(Unaudited)	(Unaudited)					(Unaudited)
					Total							Total
	Common Stock		Additional	Accumulated	Stockholders'	Common Stock		Preferred Stock - Class E		Additional	Accumulated	Stockholders'
	Shares	Amount	Paid-in Capital	Deficit	Deficit	Shares	Amount	Shares	Amount	Paid-in Capital	Deficit	Deficit

Balance, July 1, 2019	11,318,901	$ 1,072	$ 4,859,731	$ (9,470,685)	$ (4,609,882)	11,318,901	$ 1,072	-	$ -	$ 4,859,731	$ (9,470,685)	$ (4,609,882)

Common stock issued for services	555,000	57	1,283,243	-	1,283,300	3,119,912	314	-	-	1,995,900	-	1,996,214

Common stock issued for debt reduction	745,261	75	1,027,690	-	1,027,765	95,988,567	9,598	-	-	4,137,688	-	4,147,286

Settlement of conversion features	-	-	149,374	-	149,374	-	-	-	-	152,374	-	152,374

Issuance of common stock to warrant holders	644,709	-	-	-	-	23,142,794	-	-	-	-	-	-

Common stock issued as compensation	44,511	4	44,507	-	44,511	144,511	14	-	-	59,497	-	59,511

Common stock issued in acquisition of Ehlert Solutions
and Interlock Concepts, Inc.	1,350,000	135	1,720,216	-	1,720,351	1,350,000	135	-	-	1,720,216	-	1,720,351

Condolidate net loss	-	-	-	(2,017,347)	(2,017,347)
Common stock issued for convertible notes						500,000	50	-	-	219,950	-	220,000

Balance September 20, 2019	14,658,382	$ 1,343	$ 9,084,761	$ (11,488,032)	$ (2,401,928)
Commitment shares issued						25,000	3	-	-	6,997	-	7,000

Issuance of Preferred Stock- Class E						-	-	500,000	50	499,950	-	500,000

Consolidated net loss						-	-	-	-	-	(10,100,651)	(10,100,651)
Balance March 31, 2020						135,589,685	$ 11,186	500,000	$ 50	$ 13,652,303	$ (19,571,336)	$ (5,907,797)

See accompanying notes to the condensed consolidated financial statements (unaudited).

GALAXY NEXT GENERATION, INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	Three Months Ended September 30,		Nine Months Ended March 31,
	2020	2019	2021	2020
Cash Flows from Operating Activities
Net loss	$(13,134,778)	$ (2,017,347)	$ (23,793,148)	$ (10,100,651)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	84,940	7,832	278,949	563,855
Goodwill and intangible assets impairment charge			-	2,000,287
Loss on disposal of property and equipment			-	13,236
Amortization of convertible debt discounts	74,775	60,268	265,953	308,062
Accretion and settlement of financing instruments
and change in fair value of derivative liability	1,381,363	(1,346,797)	3,827,600	(389,331)
Stock compensation and stock issued for services	2,870,472	-	2,789,130	-
Stock issued under Put Purchase Agreement	7,865,077	-
Stock issued for payment of interest			13,826,684	-

Changes in assets and liabilities:
Accounts receivable	(696,710)	82,359	(472,892)	323,444
Inventories	(78,919)	304,970	(1,260,363)	(194,699)
Prepaid expenses and other assets			-	18,098
Accounts payable	(1,462,072)	(22,995)	(1,979,801)	217,307
Accrued expenses	(158,601)	(346,095)	62,253	(365,562)
Deferred revenue	431,147	(91,453)	(318,778)	167,404
Net cash used in operating activities	(2,823,306)	(3,369,258)	(6,774,413)	(7,438,550)

Cash Flows from Investing Activities
Acquisition of business, net of cash	-	2,967,918	38,836	2,967,918
Purchased capitalized development costs			(120,404)	-
Purchases of property and equipment	-	(17,636)	-	(17,636)
Net cash provided by investing activities	-	2,950,282
Net cash provided by (used in) investing activities			(81,568)	2,950,282

Cash Flows from Financing Activities
Proceeds from notes payable			332,500	-
Principal payments on financing lease obligations	-	(1,649)	-	(5,721)
Principal payments on notes payable	(774)	-	(1,878)	(48,331)
Payments on advances from stockholder, net	(33,110)	-	(140,596)	-
Payments on convertible notes payable			(110,000)	(655,076)
Proceeds from convertible notes payable	840,000	667,000	1,956,000	4,550,684
Proceeds from notes payable related parties			543,613	672,084
Payments on line of credit, net	(300,000)	-	(245,000)	(100)
Proceeds from sale of common stock under Purchase Agreement	2,316,520	-
Proceeds from sale of common stock under Equity Purchase Agreement			4,851,333	-
Net cash provided by financing activities	2,822,636	665,351	7,185,972	4,513,540

Net Increase (Decrease) in Cash and Cash Equivalents	(670)	246,375
Net Increase in Cash and Cash Equivalents			$ 329,991	$ 25,272

Cash, Beginning of Period	412,391	169,430	412,391	169,430
Cash, End of Period			$ 742,382	$ 194,702

Cash, End of Period	$ 411,721	$ 415,805

-7-

Supplemental and Non Cash Disclosures

Noncash additions related to convertible debt

$     34,250

$   119,986
Cash paid for interest

$     19,986

$    129,536
Interest on shares issued under Put Purchase Agreement

$4,006,900

$               -
Related party note payable issued for acquisition of business

$            -

$   900,000
Settlement of conversion feature

$            -

$   149,374
Acquisition of goodwill and intangibles

$            -

$3,760,287
Stock compensation and stock issued for services

$2,763,000

$1,327,811
Property leased with financing lease

$     25,317

$               -
Accretion of discount on convertible notes payable

$1,029,700

$               -
Common stock issued in exchange for convertible debt reduction

$1,799,510

$1,027,765

See accompanying notes to the condensed consolidated financial statements (unaudited)

Galaxy is a manufacturer and U.S. distributor of interactive learning technology hardware and software that allows the presenter and participant to engage in a fully collaborative instructional environment. Galaxy's products include Galaxy's own private-label interactive touch screen panel, its own Intercom, Bell, and Paging solution, as well as numerous other national and international branded peripheral and communication devices for safety and security purposes. New technologies like Galaxy's own touchscreen panels are sold along with renowned brands such as Google Chromebooks, Microsoft Surface Tablets, Lenovo and Acer computers, Verizon WiFi and more. Galaxy's distribution channel consists of approximately 37 resellers across the U.S. who primarily sell its products within the commercial and educational market. Galaxy does not control where the resellers focus their resell efforts; however, the K-12 education market is the largest customer base for Galaxy products comprising nearly 90% of Galaxy's sales. In addition, Galaxy also possesses its own OEM division where it manufacturers products for other vendors in their industry and white labels the products under other brands.

Solutions and Concepts are Arizona-based audio design and manufacturing companies creating innovative products that provide fundamental tools for building notification systems primarily to K-12 education market customers located primarily in the north and northwest United States. These products and services allow institutions access to intercom, scheduling, and notification systems with improved ease of use. The products provide an open architecture solution to customers which allows the products to be used in both existing and new environments. Intercom, public announcement (PA), bell and control solutions are easily added and integrated within the open architecture design and software model. These products combine elements over a common internet protocol (IP) network, which minimizes infrastructure requirements and reduces costs by combining systems.

On October 15, 2020, the Company entered into an Asset Purchase Agreement (AP), to acquire the assets of Classroom Technologies Solutions, Inc. ("Classroom Tech") for consideration of (a) paying off a secured Classroom Tech loan, not to exceed the greater of 50% of the value of the Classroom Tech assets acquired or $120,000; (b) the issuance of a promissory note in the amount of $44,526 to a Classroom Tech designee; and (c) the issuance of 10 million shares of common stock to the seller of Classroom Tech. Classroom Tech provides cutting-edge presentation products to schools, training facilities, churches, corporations and retail establishments. Their high quality solutions are customized to meet a variety of needs and budgets in order to provide the best in education and presentation technology. Classroom Tech direct-sources and imports many devices and components which allows the Company to be innovative, nimble and capable of delivering a broad range of cost-effective solutions. Classroom Tech also offers in-house service and repair facilities and carries many top brands.

The Coronavirus Aid, Relief and Economic Security Act (the "CARES Act") was enacted in March 2020 in response to the COVID-19 pandemic. The CARES Act and related rules and guidelines include several significant provisions, including delaying certain payroll tax payments, mandatory transition tax payments, and estimated income tax payments that we are deferring to future periods. As a result, the Company delayed payment of certain payroll tax payments in the amount of $19,517 as of ~~September 30, 2020~~March 31, 2021 and June 30, 2020, respectively.

In April 2020, the Company applied for an unsecured loan (the "PPP Loan") under the Paycheck Protection Program (PPP). The PPP was established under The CARES Act and is administered by the U.S. Small Business Administration (SBA). The PPP loan was approved and funded, and the Company entered into an unsecured loan of approximately $311,000. The PPP loan matures in April 2022 and accrues interest at an annual rate of 0.98%. The promissory note evidencing the PPP Loan contains customary events of default relating to, among other things, payment defaults and provisions of the promissory note. In accordance with the requirements of the CARES Act, the Company used the proceeds from the PPP Loan primarily for payroll costs. See Note 6.

In May 2020, the Company received a loan from the SBA under Section 7(b) of the Small Business Act. The $150,000 secured loan matures in May 2050 and accrues interest at an annual rate of 3.75%. The promissory note is collateralized by a security interest in substantially all assets of the Company. The loan proceeds are to fund working capital needs due to economic injury caused by the COVID-19 pandemic. See Note 6.

Galaxy Next Generation LTD CO. ("Galaxy CO") merged with R&G Sales, Inc. ("R&G") ("common controlled merger") with R&G becoming the surviving company. R&G subsequently changed its name to Galaxy Next Generation, Inc.

On September 4, 2019, Galaxy acquired 100% of the stock of Interlock Concepts, Inc. ("Concepts") and Ehlert Solutions Group, Inc. ("Solutions"). The purchase price for the acquisition was 1,350,000 shares of common stock and a two year note payable to the seller for $3,000,000. The note payable to the seller is subject to adjustment based on the achievement of certain future gross revenues and successful completion of certain pre-acquisition withholding tax issues of Concepts and Solutions.

Solutions and Concepts are Utah-based audio design and manufacturing companies creating innovative products that provide fundamental tools for building notification systems primarily to K-12 education market customers located primarily in the north and northwest United States. These products and services allow institutions access to intercom, scheduling, and notification systems with improved ease of use. The products provide an open architecture solution to customers which allows the products to be used in both existing and new environments. Intercom, public announcement (PA), bell and control solutions are easily added and integrated within the open architecture design and software model. These products combine elements over a common internet protocol (IP) network, which minimizes infrastructure requirements and reduces costs by combining systems.

Galaxy is a manufacturer and U.S. distributor of interactive learning technology hardware and software that allows the presenter and participant to engage in a fully collaborative instructional environment. Galaxy's products include Galaxy's own private-label interactive touch screen panel as well as numerous other national and international branded peripheral and communication devices. New technologies like Galaxy's own touchscreen panels are sold along with renowned brands such as Google Chromebooks, Microsoft Surface Tablets, Lenovo and Acer computers, Verizon WiFi and more. Galaxy's distribution channel consists of approximately 30 resellers across the U.S. who primarily sell its products within the commercial and educational market. Galaxy does not control where the resellers focus their resell efforts; however, the K-12 education market is the largest customer base for Galaxy products comprising nearly 90% of Galaxy's sales. In addition, Galaxy also possesses its own reseller channel where it sells directly to the K-12 market, primarily throughout the Southeast region of the United States.

Basis of Presentation and ~~Principles of Consolidation~~Interim Financial Information

The accompanying ~~consolidated financial statements~~Unaudited Condensed Consolidated Financial Statements have been prepared in ~~conformity~~accordance with accounting principles generally accepted in the United States ~~of America. Any reference in these footnotes to applicable guidance is meant to refer to the authoritative U.S. generally accepted accounting principles~~ ("GAAP") ~~as found in the Accounting Standards Codification ("ASC")~~ and ~~Accounting Standards Update ("ASU")~~applicable rules and regulations of the Securities and Exchange Commission (the "SEC") pertaining to interim financial information. Accordingly, these interim financial statements do not include all information or footnote disclosures required by GAAP for complete financial statements and, therefore, should be read in conjunction with the Consolidated Financial ~~Accounting Standards Board ("FASB").~~Statements and notes thereto in our June 30, 2020 Annual Report on Form 10-K and other current filings with the SEC. In the opinion of management, all adjustments, consisting of those of a normal recurring nature, necessary to present fairly the results of the periods presented have been included. The results of operations for the interim periods presented may not necessarily be indicative of the results to be expected for the full year.

The financial statements include the consolidated assets and liabilities of the combined company (collectively Galaxy Next Generation, Inc., Classroom Technology Solutions Inc., Interlock Concepts, Inc., and Ehlert Solutions Group, Inc. referred to collectively as the "Company"). See Note 14.

All intercompany transactions and accounts have been eliminated in the consolidation.

The ~~Company~~Company’s common stock is antraded on over-the-counter ~~public company traded~~markets under the stock symbol ~~listing GAXY (formerly FLCR).~~GAXY.

The preparation of consolidated financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Significant estimates used in preparing the consolidated financial statements include those assumed in computing product warranty liabilities, product development costs, valuation of goodwill and intangible assets, valuation of convertible notes payable and warrants, and the valuation of deferred tax assets. It is reasonably possible that the significant estimates used will change within the next year.

In accordance with ASC 505, Equity, the Company's capital structure is as follows:

September 30, 2020

Authorized

Issued

Outstanding

Common stock

     4,000,000,000

2,194,557,083

   2,194,518,458

$.0001 par value, one vote per
share

Preferred stock

        200,000,000

                  -

                      -

$.0001 par value, one vote per
share

Preferred stock - Class A

               750,000

                  -

                      -

$.0001 par value; no voting rights

Preferred stock - Class B

            1,000,000

                  -

                      -

Voting rights of 10 votes for 1
Preferred B share; 2% preferred
dividend payable annually

Preferred stock - Class C

            9,000,000

                  -

                      -

$.0001 par value; 500 votes per
share, convertible to common
stock

Preferred stock - Class D

             1,000,000
                  -

                      -

$.0001 par value; no voting
rights, convertible to common
stock, mandatory conversion to
common stock 18 months after
issue

Preferred stock - Class E

               500,000

          500,000

             500,000

$.0001 par value; no voting
rights, convertible to common
stock



	March 31, 2021
	Authorized	Issued	Outstanding

Common stock	4,000,000,000	2,860,944,203	2,810,905,578	$.0001 par value, one vote per share
Preferred stock	200,000,000	-	-	$.0001 par value, one vote per share
Preferred stock - Class A	750,000	-	-	$.0001 par value; no voting rights
Preferred stock - Class B	1,000,000	-	-	Voting rights of 10 votes for Preferred B share; 2% preferred dividend payable annually

Preferred stock - Class C	9,000,000	-	-	$.0001 par value; 500 votes per share, convertible to common stock




Preferred stock - Class D	1,000,000	-	-	$.0001 par value; no voting rights, convertible to common stock, mandatory conversion to common stock 18 months after issue


Preferred stock - Class E	500,000	500,000	500,000	$.0001 par value; no voting rights, convertible to common stock

-10-

June 30, 2020

Authorized

Issued

Outstanding

Common stock

       4,000,000,000
628,039,242
628,000,617

$.0001 par value, one vote per
share

Preferred stock

         200,000,000
                  -
                      -

$.0001 par value, one vote per
share

Preferred stock - Class A

               750,000
                  -
                      -

$.0001 par value; no voting rights

Preferred stock - Class B

             1,000,000
                  -
                      -

Voting rights of 10 votes for 1
Preferred B share; 2% preferred
dividend payable annually

Preferred stock - Class C

             9,000,000
                  -
                      -

$.0001 par value; 500 votes per
share, convertible to common
stock

Preferred stock - Class D


  1,000,000

  -


    -

$.0001 par value; no voting
rights, convertible to common
stock, mandatory conversion to
common stock 18 months after
issue

Preferred stock - Class E

               500,000
        500,000
       500,000

$.0001 par value; no voting rights, convertible to common
stock

There are ~~1,101,609,009~~399,163,143 common shares reserved at ~~September 30, 2020~~March 31, 2021 under terms of the convertible debt agreements, Stock Plan and ~~Put~~Equity Purchase Agreement (see Notes 6, 1413 and 15).

There are ~~125,953,028~~194,683,306 issued common shares that are restricted as of ~~September 30, 2020.~~March 31, 2021. The shares may become free-trading upon satisfaction of certain terms and regulatory conditions.

The Company accounts for business combinations under the acquisition method of accounting. Under this method, acquired assets, including separately identifiable intangible assets, and any assumed liabilities are recorded at their acquisition date estimated fair value. The excess of purchase price over the fair value amounts assigned to the assets acquired and liabilities assumed represents the goodwill amount resulting from the acquisition. Determining the fair value of assets acquired and liabilities assumed involves the use of significant estimates and assumptions.

In accordance with ASC 606, revenue is recognized when a customer obtains control of promised services. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for these services. To achieve this core principle, the Company applies the following five steps:

~~● Allocate the transaction price to performance obligations in the contract~~

~~● Recognize revenue when or as the Company satisfies a performance obligation~~

All of the Company's performance obligations and associated revenue are generally transferred to customers at a point in time. Shipping and handling costs billed to customers are included in revenue in the accompanying statements of operations. Costs incurred by the Company associated with shipping and handling are included in cost of sales in the accompanying statements of operations. Sales are recorded net of sales returns and discounts, and sales are presented net of sales-related taxes.

Most contracts with customers contain multiple performance obligations. For these contracts, the Company accounts for individual performance obligations separately if they are distinct. The transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. The Company's products can be sold on a stand-alone basis to customers which provides objective evidence of the fair value of the product portion of the multi-element contract, and thus represents the Company's best estimate of selling price.

The Company considers several factors in determining that control transfers to the customer including that legal title transfers to the customer, the Company has a present right to payment, and the customer has assumed the risks and rewards of ownership.

Product revenue consists of fees for associated equipment sold, such as interactive panels, intercom, public announcement, bell and control solutions. Product sales resulting from fixed-price contracts involve a signed contract for a fixed price or a binding purchase order to provide the Company's interactive panels and accessories. Revenue is recognized at a point in time once the product is installed at the customer's premises. Hardware items are generally invoiced in full on execution of the arrangement.

Service revenue consists of installation and training services, support maintenance, technical assistance, bug fixes, and product repair. The Company satisfies its service performance obligations by providing "stand-ready" assistance as required over the contract period. The fair value of these services is separately calculated using expected costs of the services. Many times, the value of the services is calculated using price quotations from subcontractors to the Company who perform such services on a stand-alone basis. Additionally, service revenue not part of the contract is based upon standard hourly/daily rates, and revenue is recognized as the services are performed.

The Company sells equipment with embedded software to its customers. The embedded software is not sold separately and is not a significant focus of the Company's marketing efforts. The Company does not provide post-contract customer support specific to the software or incur significant costs that are within the scope of FASB guidance on accounting for software to be leased or sold. Additionally, the functionality that the software provides is marketed as part of the overall product. The software embedded in the equipment is incidental to the equipment as a whole.

~~The Company does not record a reserve for product returns as contract arrangements generally exclude a right of return for delivered items.~~

Because of the nature and quality of the Company's products, the Company provides for the estimated costs of warranties at the time revenue is recognized for a period of five years after purchase as a secondary warranty. The manufacturer also provides a warranty against certain manufacturing and other defects. As of September 30, 2020 and June 30, 2020, the Company accrued $102,350, respectively, for estimated product warranty claims, which is included in accrued expenses in the accompanying condensed consolidated balance sheets. The accrued warranty costs are based primarily on historical warranty claims as well as current repair costs. There was $1,391 and $82,494 of warranty expense for the three months ended September 30, 2020 and 2019, respectively.

~~The Company negotiated a warranty settlement with one of its manufacturers. At September 30, 2020 and June 30, 2020, the Company accrued $87,720 and $124,437 payable to this manufacturer.~~

The Company incurs incremental costs to obtain a contract in the form of sales commissions. These costs, whether related to performance obligations that extend beyond twelve months or not, are immaterial and will continue to be recognized in the period incurred within general and administrative expenses.

Contract assets are rights to consideration in exchange for goods or services that has been transferred to a customer when that right is conditional on something other than the passage of time. The majority of our contract assets represent unbilled accounts receivable as the right to consideration is subject to the contractually agreed upon installation and billing schedule.

Contract liabilities (deferred revenue) represent consideration received or consideration which is unconditionally due from customers prior to transferring goods or services to the customer under the terms of the contract, all of which is expected to be recognized within one year.

~~The Company considers cash and cash equivalents to be cash in all bank accounts, including temporary investments that have an original maturity of three months or less.~~

From time to time, the Company has on deposit, in institutions whose accounts are insured by the Federal Deposit Insurance Corporation, funds in excess of the insured maximum. The at-risk amount is subject to significant daily fluctuation. The Company has never experienced any losses related to these balances, and as such, the Company does not believe it is exposed to any significant risk.

Accounts receivable is recognized when the Company's right to consideration is unconditional and is presented net of an allowance for doubtful accounts. Interest is not charged on past due accounts. Management reviews each receivable balance and estimates that portion, if any, of the balance that will not be collected. The carrying amount of accounts receivable is then reduced by an allowance based on management's estimate. Management deemed no allowance for doubtful accounts was necessary at ~~September 30, 2020~~March 31, 2021 and June 30, 2020. At ~~September 30, 2020~~March 31, 2021 and June 30, 2020, ~~$1,145,187~~$758,481 and $670,031 of total accounts receivable were considered unbilled and recorded as deferred revenue. ~~Accounts receivable unbilled is related to 1) a supply contract with a customer~~

The Company factored approximately $600,000 and ~~2) customers that are school districts. The unbilled~~$0 of accounts receivable during the nine months ended March 31, 2021 and deferred revenue related to the supply contract are disclosed in Note 2. The remaining unbilled accounts receivable and deferred revenues are related to unconditional purchase orders from school districts; therefore, excluded from contract asset and liabilities.

To enhance cash and liquidity, the Company factors trade accounts receivable with a financial services company. Factoring fees are 2.5% of the face value of the account receivable sold to the factoring agent per month until collected. For collections over 90 days from the invoice date, the fee increases to 3.5%. The proceeds received are included in cash provided by operating activities in the condensed consolidated statements of cash flows. The difference between the carrying amount of the trade receivables sold and the cash received is recorded as a general and administrative expense in the condensed consolidated statements of operations.year ended June 30, 2020, respectively. For the three months and nine months ended ~~September 30, 2020,~~March 31, 2021, expenses on sale of trade receivables was inconsequential. ~~For the three months ended September 30, 2019, the Company did not factor accounts receivable.~~

Inventory is stated at the lower of cost or net realizable value. Cost is determined on a first-in, first-out (FIFO) method of accounting. Galaxy inventory is comprised of interactive panels, audio and related accessories, and parts for audio products. Management estimates $67,635 of inventory reserves at ~~September 30, 2020~~March 31, 2021 and June 30, 2020.

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.

~~Property and equipment and the estimated useful lives used in computing depreciation, are as follows:~~

Depreciation is provided using the straight-line method over the estimated useful lives of the depreciable assets. Depreciation expense was $4,428 and $7,832 for the three months ended September 30, 2020 and 2019, respectively.

Long-lived assets to be held and used are tested for recoverability whenever events or changes in circumstances indicate that the related carrying amount may not be recoverable. When required, impairment losses on assets to be held and used are recognized based on the excess of the asset's carrying amount over the fair value of the asset.

Costs incurred in designing and developing classroom technology products are expensed as research and development until commercial viability has been established. Commercial viability is established upon completion of a detail product design, or a working model. Upon the achievement of commercial viability, development costs are capitalized and subsequently reported at the lower of unamortized cost or net realizable value. Management's judgment is required in determining whether a product provides new or additional functionality, the point at which a product enters the stages at which costs may be capitalized, assessing the ongoing value and impairment of the capitalized costs and determining the estimated useful life over which the costs are amortized.

Annual amortization expense is calculated based on the straight-line method over the product's estimated economic life. Amortization of product development costs incurred begins when the related products are available for sale to customers. Amortization of product development costs of $12,512 and $0 for the three months ended September 30, 2020 and 2019, and is included in cost of sales in the Company's condensed consolidated statements of operations.

Goodwill is not amortized, but is reviewed for impairment at least annually, or more frequently when events or changes in circumstances indicate that the carrying value may not be recoverable. Judgments regarding indicators of potential impairment are based on market conditions and operational performance of the business. At each fiscal year-end, the Company performs an analysis of goodwill or whenever events or circumstances arise that indicate an impairment may exist, such as the loss of a key executive, adverse industry and economic conditions, or increased or unexpected competition. The Company may assess its goodwill for impairment initially using a qualitative approach to determine whether conditions exist to indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying value. If management concludes, based on its assessment of relevant events, facts and circumstances that it is more likely than not that a reporting unit's carrying value is greater than its fair value, then a goodwill impairment charge is recognized for the amount in excess, not to exceed the total amount of goodwill allocated to that reporting unit. If the fair value of a reporting unit exceeds its carrying amount, goodwill is not considered to be impaired and no further testing is required. If determined to be impaired, an impairment charge is recorded as a general and administrative expense within the Company's condensed consolidated statements of operations.

Management of the Company determined that a triggering event to assess goodwill impairment occurred during the year ended June 30, 2020 due to the separation of a key executive associated with their acquisition of Concepts and Solutions. While there was no single determinative event, the consideration in totality of several factors that developed led management to conclude that it was more likely than not that the fair values of certain intangible assets and goodwill acquired as part of that acquisition were below their carrying amounts. These factors included: a) former key executive separating from the Company; b) respective former key executive violating his noncompete changing the use and value of it; c) sustained decrease in the Company's share price which reduced market capitalization; and d) uncertainty in the United States and global economies due to Covid-19. As a result, the Company recorded a non-cash impairment loss of approximately $2,000,000, including $800,287 related to goodwill and $1,200,000 related to finite-lived ~~intangibleassets.~~intangible assets. No such impairment charge was recorded during the three or nine months ended ~~September 30, 2020.~~March 31, 2021.

~~Research and development costs are expensed as incurred and totaled approximately $15,000 and $0 for the three months ended September 30, 2020 and 2019.~~

The Company's leases relate primarily to corporate offices and warehouses. Effective July 1, 2019, the Company adopted the FASB guidance on leases ("Topic 842"), which requires leases with durations greater than twelve months to be recognized on the balance sheet. The Company adopted Topic 842 using the modified retrospective transition approach.

The Company accounts for income taxes under the asset and liability method, whereby deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Current income taxes are recognized for the estimated income taxes payable or receivable on taxable income or loss from the current year and any adjustment to income taxes payable related to previous years. Current income taxes are determined using tax rates and tax laws that have been enacted or subsequently enacted by the year-end date.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to reverse. Under the asset and liability method, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recognized if it is more likely than not that some portion or all of the deferred tax asset will not be utilized.

The Company records stock-based compensation in accordance with the provisions set forth in ASC 718, Stock Compensation ("ASC 718"). ASC 718 requires companies to recognize the cost of employee services received in exchange for awards of equity instruments based upon the grant date fair value of those awards. The Company, from time to time, may issue common stock to acquire services or goods from non-employees. Common stock issued to persons other than employees or directors are recorded on the basis of their fair value.

Basic and diluted earnings (loss) per common share is calculated using the weighted average number of common shares outstanding during the period. The Company's convertible notes and warrants are excluded from the computation of diluted earnings per share as they are anti-dilutive due to the Company's losses during those periods.

The Company categorized its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs.

As of September 30, 2020 ,and June 30, 2020, the Company held certain financial assets and liabilities that are required to be measured at fair value on a recurring basis. All such assets and liabilities are considered to be Level 3 in the fair value hierarchy defined above.

~~The Company analyzes all financial instruments with features of both liabilities and equity under ASC 480, "Distinguishing Liabilities from Equity," and ASC 815.~~

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) - Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement ("ASU 2018-13"). The amendments in ASU 2018-13 modify certain disclosure requirements of fair value measurements. The Company adopted ASU 2018-13 on July 1, 2020 with no impact to the condensed consolidated financial statements as a result.

The Company generally does not use derivative financial instruments to hedge exposures to cash flow or market risks. However, certain other financial instruments, such as warrants and embedded conversion features on the convertible debt, are classified as derivative liabilities due to protection provisions within the agreements. Such financial instruments are initially recorded at fair value using the Monte Carlo model and subsequently adjusted to fair value at the close of each reporting period. The Company accounts for derivative instruments and debt instruments in accordance with the interpretive guidance of ASC 815, ASU 2017-11, and associated pronouncements related to the classification and measurement of warrants and instruments with conversion features and anti-dilution clauses in agreements.

In January 2020, the FASB issued ASU No. 2020-01, "Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) - Clarifying the Interactions between Topic 321, Topic 323, and Topic 815." The ASU is based on a consensus of the Emerging Issues Task Force and is expected to increase comparability in accounting for these transactions. ASU 2020-01 made targeted improvements to accounting for financial instruments, including providing an entity the ability to measure certain equity securities without a readily determinable fair value at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. Among other topics, the amendments clarify that an entity should consider observable transactions that require it to either apply or discontinue the equity method of accounting. For public business entities, the amendments in the ASU are effective for fiscal years beginning after December 15, ~~2021,~~2020, and interim periods within those fiscal years. The Company is currently evaluating the impacts of adoption of the new guidance to its consolidated financial statements.

In December 2019, the FASB issued ASU No. 2019-12 "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes ("ASU 2019-12") by removing certain exceptions to the general principles. The amendments will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption of the amendments is permitted. Depending on the amendment, adoption may be applied on a retrospective, modified retrospective or prospective basis. The Company is currently evaluating the impacts of adoption of the new guidance to its consolidated financial statements.

In August 2020, the FASB issued ASU 2020-06, ~~Accounting~~"Accounting for Convertible Instruments and Contracts in an Entity's Own ~~Equity,~~Equity", which simplifies the accounting for certain convertible instruments, amends guidance on derivative scope exceptions for contracts in an entity's own equity and modifies the guidance on diluted EPS calculations as a result of these changes. The guidance in this ASU can be adopted using either a full or modified retrospective approach and becomes effective for annual reporting periods beginning after December 15, ~~2021,~~2020, with early adoption permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statements and disclosures.

The Company has implemented all new applicable accounting pronouncements that are in ~~effect.~~effect and applicable. These pronouncements did not have any material impact on the consolidated ~~financialstatements~~financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

Certain amounts in the current ~~condensed consolidated~~period financial statements have been reclassified in order to conform to the current year presentation.

For the three and nine months ended ~~September 30, 2020,~~March 31, 2021, the Company recognized ~~$54,939~~$214,992 and $715,067 of ~~revenue that was included in contract liabilities as of June 30, 2020.~~ revenue.

Depreciation expense was $4,641 and $10,011 for the three months ended March 31, 2021 and 2020, respectively.

~~-18-~~Depreciation expense was $11,289 and $27,855 for the nine months ended March 31, 2021 and 2020, respectively.

Intangible assets are stated at the lower of cost or fair value. ~~Intangible assets~~Customer lists and vendor relationships are amortized on a straight-line basis over five years, representing the period over which the Company expects to receive future economic benefits from these assets. Amortization of customer lists and vendor relationships was $70,343 and $0 for the three months ended March 31, 2021 and 2020, respectively. Amortization of customer lists and vendor relationships was $208,296 and $0 for the nine months ended March 31, 2021 and 2020, respectively. Amortization of these costs are included in general and administrative expenses in the Company's condensed consolidated statements of operations.

Annual amortization expense is calculated based on the straight-line method over the product's estimated economic life. Amortization of product development costs incurred begins when the related products are available for sale to customers. Amortization of product development costs was $26,436 and $0 for the three months ended March 31, 2021 and 2020, respectively. Amortization of product development costs was $59,364 and $0 for the nine months ended March 31, 2021 and 2020, respectively. Amortization of these costs are included in cost of sales in the Company's condensed consolidated statements of operations.

The following tables shows goodwill, finite-lived intangible assets, accumulated amortization, and the impairment charges:


September 30, 2020
March 31, 2021
	Cost	Accumulated Amortization	Net Book Value	Impairment	Total	Cost	Accumulated Amortization	Net Book Value	Impairment	Total
Goodwill	$ 834,220	$ -	$ 834,220	$ -	$ 834,220	$ 834,220	$ -	$ 834,220	$ -	$ 834,220
Finite-lived assets:
Customer list	$ 881,000	$ (168,293)	$ 712,707	$ -	$ 712,707	$ 922,053	$ (268,063)	$ 653,990	$ -	$ 653,990
Vendor relationships	471,096	(95,797)	375,299	-	375,299	484,816	(144,233)	340,583	-	340,583
Capitalized product development costs	281,845	(14,048)	267,797	-	267,797	402,255	(60,900)	341,355	-	341,355
	$ 1,633,941	$ (278,138)	$ 1,355,803	$ -	$1,355,803	$ 1,809,124	$ (473,196)	$ 1,335,928	$ -	$1,335,928

June 30, 2020
	Cost	Accumulated Amortization	Net Book Value	Impairment	Total	Cost	Accumulated Amortization	Net Book Value	Impairment	Total
Goodwill	$ 1,634,507	$ -	$ 1,634,507	$ (800,287)	$ 834,220	$ 1,634,507	$ -	$ 1,634,507	$ (800,287)	$ 834,220
Finite-lived assets:
Customer list	$ 881,000	$ (132,147)	$ 748,853	$ -	$ 748,853	$ 881,000	$ (132,147)	$ 748,853	$ -	$ 748,853
Vendor relationships	479,000	(71,847)	407,153	-	407,153	479,000	(71,847)	407,153	-	407,153
Noncompete agreements	1,600,000	(400,000)	1,200,000	(1,200,000)	-	1,600,000	(400,000)	1,200,000	(1,200,000)	-
Capitalized product development costs	281,845	(1,536)	280,309	-	280,309	281,845	(1,536)	280,309	-	280,309
	$ 3,241,845	$ (605,530)	$ 2,636,315	$(1,200,000)	$1,436,315	$ 3,241,845	$ (605,530)	$ 2,636,315	$(1,200,000)	$1,436,315

Estimated amortization expense related to intangible assets for the next five years is as follows:

The Company has an available $1,000,000 and $1,250,000 line of credit at ~~September 30, 2020~~March 31, 2021 and June 30, 2020, respectively, bearing interest at prime plus 0.5% (3.75% at ~~September 30, 2020~~March 31, 2021 and 4.25% at June 30, 2020). The line of credit was renewed in October 2020 at a reduced available credit line, change in collateral, and ~~now expires on~~a new expiration date of October 29, 2021. The renewed line of credit is collateralized by certain real estate owned by a family member of a stockholder, 50,000,000 shares of the Company's common stock par value $0.0001 per share (the "Common Stock") and the personal stock of two stockholders, and a key man life insurance policy. A minimum average bank balance of $50,000 was required on the line of credit agreement at June 30, 2020, but this requirement was removed ~~as of September 30, 2020.The~~in October 2020. The outstanding balance is ~~$936,598~~$991,598 and $1,236,598 at ~~September 30, 2020~~March 31, 2021 and June 30, 2020, respectively.

The Company has a $1,000,000 available credit line under an accounts receivable factoring agreement through July 30, 2022. No amounts were outstanding as of ~~September 30, 2020.~~March 31, 2021. See Note 13.


	September 30, 2020	June 30, 2020	March 31, 2021	June 30, 2020
Note payable with a bank bearing interest at 4% and maturing on June 26, 2020. The note was renewed by the lender with a revised maturity of June 26, 2021 and a lowered interest rate to 3%. The renewal provides for monthly interest payments and a balloon payment of outstanding principal and interest at maturity. The note is collateralized by a certificate of deposit owned by a related party.

	td75,200	td74,900	td74,539	td74,900
Long term PPP loan under the CARES Act bearing interest at 0.98% and maturing in April 2022. Monthly installments of principal and interest of $13,137 begin in October 2020. The loan is subject to forgiveness by the SBA.	310,832	310,832
Long term PPP loan under the CARES Act bearing interest at 0.98% and maturing in April 2022. Monthly installments of principal and interest of $13,137 begin in October 2020. Payments on the loan are subject to application for SBA forgiveness submitted in 2021.			310,832	310,832
Long term loan under Section 7(b) of the Economic Injury Disaster Loan program bearing interest at 3.75% and maturing in May 2050. Monthly installments of principal and interest of $731 begin in May 2021.	150,000	150,000	150,000	150,000
Financing lease liabilities for offices and warehouses with monthly installments of $12,449 (ranging from $1,083 to $3,524) over terms expiring through July 2022.	249,299	223,982
Financing leases with a related party for delivery vehicles with monthly installments totaling $813, including interest, over 5-year terms expiring through July 2020.	-	1,245
Note payable with a finance company for delivery vehicle with monthly installments totaling $679 including interest at 8.99% over a 6 year term expiring in December 2025.	33,245	34,019

Note payable to an investor bearing interest of 10% and maturing on January 13, 2022 with monthly installments of principal and interest of $45,294 beginning in June 2021.			385,000	-
Financing lease liabilities for offices and warehouses with monthly installments of $12,449 (ranging from $1,083 to $3,524) over terms expiring through July 2023.			186,119	223,982
Financing leases with a related party for delivery vehicles with monthly installments totaling $813, including interest, over five year terms expiring through July 2020.			-	1,245
Note payable with a finance company for delivery vehicle with monthly installments totaling $679 including interest at 8.99% over a six year term expiring in December 2025.			32,374	34,019

Total Notes Payable	1,018,576	994,978	1,338,864	994,978

Current Portion of Notes Payable	570,962	512,425	940,011	512,425

Long-term Portion of Notes Payable	$ 447,614	$ 482,553	$ 398,853	$ 482,553

Future minimum principal payments on the long-term notes payable to unrelated parties are as follows:


On November 18, 2019, the Company signed a convertible promissory note with an investor. The $110,000 note was issued at a discount of $10,000 and bore interest at 8% per year. The note principal and interest were convertible into shares of common stock at the lower of (a) 70% of the lowest traded price of common stock during the 15 trading days prior to the issue date or (b) 70% of the lowest traded price for the common stock during the 15 trading days prior to conversion of the note. The note ~~matures~~matured in November 2020. The note had prepayment penalties between 115% and 125% of the principal and interest outstanding if repaid before 180 days from issuance. The note was repaid by conversion to stock.




	-	1,000
On December 11, 2019, the Company signed a convertible promissory note with an investor. The $220,430 note was issued at a discount of $15,430 and bore interest at 8% per year. The note principal and interest were convertible into shares of common stock at the lower of (a) $0.46 per share or (b) 75% of the lowest trading price of common stock during the 10 trading days prior to conversion beginning in June 2020. The note matured in December 2020. The note had prepayment penalties between 120% and 130% of the principal and interest outstanding if repaid before 180 days from issuance. The note was repaid by conversion to stock.




	-	121,200

-16-


On November 25, 2019, the Company signed a convertible promissory note with an investor. The $1,000,000 note was issued at a discount of $70,000 and bore interest at 8% per year. The note principal and interest up to $250,000 every 30-day calendar period were convertible into shares of common stock at the lower of (a) 75% of the lowest traded price of the common stock during the 10 trading days immediately preceding the notice of conversion or (b) $0.46 per share. The note ~~matures~~matured in November 2020. The note had a redemption premium of 115% of the principal and interest outstanding if repaid before maturity. The note was repaid by conversion to stock.




	-		825,000

On January 9, 2020, the Company entered into a $225,000 convertible note. The $225,000 note was issued at a discount of $13,500 and bore interest at 8% per year. The note principal and interest were convertible into shares of common stock at the lower of (a) 75% of the lowest traded price of the common stock during the 10 trading days immediately preceding the notice of conversion or (b) the lowest traded price of the common stock during the 10 trading days prior to the issuance of this note. The note matured in October 2020. The note had prepayment penalties of 110% to 125% of the principal and interest outstanding if repaid before 180 days from issuance. The principal amount of the note was increased by $25,000 due to the value of the stock price at conversion. The note was repaid by conversion to stock.	-		250,000

On March 25, 2020, the Company signed a convertible promissory note with an investor. The $338,625 note was issued at a discount of $23,625 and bore interest at 8% per year. The note principal and interest were convertible into shares of common stock at the lower of (a) $0.46 per share or (b) 75% of the lowest trading price of common stock during the 10 trading days prior to conversion. The note matured in March 2021. The note had prepayment penalties between 120% and 130% of the principal and interest outstanding if repaid before 180 days from issuance. The note was repaid by conversion to stock.	-	338,625

On June 26, 2020, the Company signed a convertible promissory note with an investor. The $430,000 note was issued at a discount of $30,000 and bears interest at 8% per year. The note principal and interest were convertible into shares of common stock at the lower of (a) $0.47 per share or (b) 70% of the lowest trading price of common stock during the 10 trading days prior to conversion. The had note maturity of June 2021. The note had prepayment penalties between 120% and 130% of the principal and interest outstanding if repaid before 180 days from issuance. The note was repaid by conversion to stock.	-	430,000

The original issue discount is being amortized over the terms of the convertible notes using the effective interest method. During the three months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019,~~ the Company amortized ~~$34,250~~$8,750 and ~~$60,268,~~$91,338, respectively, of debt discounts to interest expense and ~~$399,936~~$0 and ~~$228,933,~~$603,852, respectively, to interest accretion. During the nine months ended March 31, 2021 and 2020, the Company amortized $256,452 and $247,794, respectively, of debt discounts to interest expense and $766,603 and $1,412,705, respectively, to interest accretion.

~~One convertible promissory note for $125,000 was entered into during the three months ended September 30, 2020, and subsequently repaid prior to September 30, 2020.~~

Accrued but unpaid interest on the notes is convertible by the lender into, and payable by the Company in common shares at a price per common share equal to the most recent closing price of the Company's common shares prior to the delivery to the Company of a request to convert interest, or the due date of interest, as applicable. Interest, when due, is payable either in cash or common shares.

The conversion features meet the definition of a derivative liability instrument because the conversion rate is variable and therefore does not meet ~~the"fixed-for-fixed"~~the "fixed-for-fixed" criteria outlined in ASC 815-40-15. As a result, the conversion features of the notes are recorded as a derivative liability at fair value and marked-to-market each period with the changes in fair value each period charged or credited to other income (expense).

The Company issued common stock and warrants as consideration for the convertible notes. The warrants contain certain anti-dilutive clauses that are accounted for as financial derivatives. All warrants have an original exercise price of $4 per share, contain anti-dilution protection clauses, and expire 36 months from issue date. The anti-dilution clause was triggered for warrants, which reduced the exercise price below $4 per share. As of September 30, 2020, warrants expire between November 29, 2021 and November 18, 2022. There are no unexercised warrants at September 30, 2020.

The warrants meet the definition of a derivative liability instrument because the exercise price is variable and therefore does not meet the "fixed-for-fixed" criteria outlined in ASC 815-40-15. As a result, the value of unexercised warrants was recorded as a derivative liability at fair value and marked-to-market each period with the changes in fair value each period charged or credited to other income (expense).

The following table presents information about the assets and liabilities that are measured at fair value on a recurring basis at ~~September 30, 2020~~March 31, 2021 and June 30, 2020 and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value.

At September 30, 2020

Total
Level 1
Level 2
Level 3
Assets

Customer List
$704,803
-
-
$704,803

Vendor Relationship
383,203
-
-
383,203

Development Costs
287,797
-
-
287,797

$1,355,803
-
-
$1,355,803
Liabilities

Original Issue discount, convertible debt
$1,276,312
-
-
$1,276,312

At June 30, 2020

Total
Level 1
Level 2
Level 3
Assets

Customer list
$748,847
-
-
$748,847

Vendor relationship
407,153
-
-
407,153

Development costs
280,315
-
-
280,315

$1,436,315
-
-
$1,436,315
Liabilities

Original issue discount, convertible debt
$213,300
-
-
$213,300

Derivative liability warrants
33,312
-
-
33,312
Total

$246,612
-
-
$246,612

As of ~~September 30, 2020~~March 31, 2021, and June 30, 2020, the only asset required to be measured on a nonrecurring basis was goodwill and the fair value of the asset amounted to $834,220 using level 3 valuation techniques.

The Company measures the fair market value of the Level 3 liability components using the Monte Carlo model and projected discounted cash flows, as appropriate. These models were prepared by an independent third party and consider management's best estimate of the conversion price of the stock, an estimate of the expected time to conversion, an estimate of the stock's volatility, and the risk-free rate of return expected for an instrument with a term equal to the duration of the convertible note.

The derivative liability was valued using the Monte Carlo pricing model with the following inputs:

The following table sets forth a reconciliation of changes in the fair value of the Company's convertible debt components classified as Level 3 in the fair value hierarchy at ~~September 30, 2020~~March 31, 2021 and June 30, 2020:

September 30, 2020

June 30, 2020
Note payable to a stockholder in which the $200,000 principal plus $10,000 of interest was payable in December 2019. Borrowings under the note increased to $400,000 and the maturity was extended to November 2021. The note bears interest at 6% interest and is payable in cash or common stock, at the Company's option. If interest is paid in common stock, the conversion price will be the market price at the time of conversion. Principal on the note at maturity is convertible into 400,000 shares of Series D Preferred Stock. If principal is paid prior to maturity, the right of conversion is terminated.

$400,000
$400,000

Fair value of unsecured notes payable to seller of Concepts and Solutions, a related party, bearing interest at 3% per year, payable in annual installments through November 30, 2021. Payments are subject to adjustment based on the achievement of minimum gross revenues and successful completion of certain pre-acquisition withholding tax issues of Concepts and Solutions.
1,030,079
                                       1,030,079

Note payable to a stockholder in which the note principal plus 6% interest is payable in November 2021. Note was amended in March 2020 by increasing the available borrowings to $1,225,000 and extending the maturity to March 2022. Interest is payable in cash or common stock, at the holder's option. If interest is paid in common stock, the conversion price will be the market price at the time of conversion. Principal on the note at maturity is convertible into 1,000,000 shares of Series D Preferred Stock. If principal is paid prior to maturity, the right of conversion is terminated.
1,225,000
                                       1,225,000

Note payable to a stockholder in which the note principal plus 6% interest is payable in November 2021. Interest is payable in cash or common stock, at the Company's option. If interest is paid in common stock, the conversion price will be the market price at the time of conversion. Principal on the note at maturity is convertible into 200,000 shares of Series D Preferred Stock. If principal is paid prior to maturity, the right of conversion is terminated.
200,000
                                          200,000

Note payable to a stockholder in which the note principal plus interest at 10% is payable the earlier of 60 days after invoicing a certain customer, or April 2021, due to an extension granted by the lender. The note is collateralized by a security interest in a certain customer purchase order.
385,000
                                          385,000

Other short term payables due to stockholders and related parties
74,323
                                          107,733

Total Related Party Notes Payable and Other Payables
                                 3,314,402
                                       3,347,812
Current Portion of Related Party Notes Payable and Other Payables
                                 1,239,402
                                       1,272,812

Long-term Portion of Related Party Notes Payable and Other Payables
$2,075,000
$2,075,000

The Company leases property used in operations from a related party under terms of a financing lease. The term of the lease expires on December 31, 2021. The monthly lease payment is $1,500 plus maintenance and property taxes, as defined in the lease agreement. The lease was amended, and the monthly lease payment increased to $9,664 per month. Rent expense for this lease was ~~$4,500~~$89,500 and $98,500 for the three and nine months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019,~~ respectively.

A related party collateralizes the Company's short-term note with a certificate of deposit in the amount of $274,900, held at the same bank. The related party will receive a $7,500 collateral fee for this service (see Note 6).

The Company has financing lease liabilities for offices and warehouses with monthly installments of $12,449 (ranging from $1,083 to $3,524) including imputed interest (ranging from 0% to 2%), over ~~2 year~~2-year terms plus extensions, expiring through July ~~2022.~~2023.

As of ~~September 30, 2020,~~March 31, 2021, financing lease maturities are as follows:

As of ~~September 30, 2020,~~March 31, 2021, the weighted average remaining lease term was ~~1.67~~1.2 years.

During the ~~three~~nine months ended ~~September 30, 2020,~~March 31, 2021, the Company issued ~~103,750,000~~105,800,000 shares of common stock for professional consulting services. These shares were valued at ~~$2,763,000~~$2,778,550 upon issuance during the ~~three~~nine months ended ~~September 30, 2020.~~March 31, 2021.

During the ~~three~~nine months ended ~~September 30, 2020,~~March 31, 2021, the Company issued ~~968,475,442~~1,382,812,744 shares of common stock for debt reduction. These shares were valued at ~~$7,974,206 upon issuance during the three months ended September 30, 2020.~~$13,031,235.

During the ~~three~~nine months ended ~~September 30, 2020,~~March 31, 2021, the Company issued 249,792,217 shares of common stock to warrant holders in six cashless transactions.

During the ~~three~~nine months ~~ended September 30, 2020,~~March 31, 2021, the Company issued ~~2,500,000~~52,500,000 shares of common stock for commitment shares under a ~~two year purchase~~two-year agreement entered into on May 31, 2020, between the Company and anthe investor, as amended and restated on July 9, 2020 and December 29, 2020 (the ~~"Put~~"Equity Purchase Agreement"). These shares were valued at ~~$55,000~~$1,050,000 upon issuance during the ~~three~~nine months ended ~~September 30, 2020.~~March 31, 2021.

During the ~~three~~nine months ended, ~~September 30, 2020,~~ the Company issued ~~242,000,000~~5,000,000 shares of common stock for commitment shares under a one year note payable issued on January 13, 2021 to an investor.

During the nine months ended March 31, 2021, the Company issued 377,000,000 shares of common stock in exchange for proceeds under the ~~Put~~Equity Purchase ~~Agreement.~~agreement. These shares were valued at ~~$3,951,900~~$8,292,400 upon issuance during the ~~three~~nine months ended ~~September 30, 2020.~~March 31, 2021.

~~See~~During the ~~capital structure section in Note 1~~nine months ended March 31, 2021, the Company issued 50,000,000 shares of common stock as collateral for ~~disclosure~~the line of ~~the equity components included~~credit. The shares are held in the ~~Company's consolidated financial statements.~~Company’s name and serve as collateral.

During the nine months ended March 31, 2021, the Company issued 10,000,000 shares of common stock for the acquisition of Classroom Technology Solutions, Inc. These shares were valued at $151,000 upon issuance during the nine months ended March 31, 2021.

The Company's effective tax rate differed from the federal statutory income tax rate for the ~~three~~nine months ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~ as follows:

The Company had no federal or state income tax (benefit) for the ~~three~~nine months ended ~~September 30, 2020~~March 31, 2021 or ~~2019.~~2020.

The Company's deferred tax assets and liabilities as of ~~September 30, 2020~~March 31, 2021 and June 30, 2020, are summarized as follows:

The Company's policy is to provide for deferred income taxes based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates that will be in effect when the differences are expected to reverse. The Company has not generated taxable income and has not recorded any current income tax expense at ~~September 30,~~March 31, 2021 and 2020, ~~and 2019,~~ respectively.

In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred taxes is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers projected future taxable income and tax planning strategies in making this assessment.

The Company's deferred tax assets are primarily comprised of net operating losses ("NOL") that give rise to deferred tax assets. The NOL carryforwards expire over a range from ~~2020~~2021 to 2037, with certain NOL carryforwards that have no expiration. There is no tax benefit for goodwill impairment, which is permanently non-deductible for tax purposes. Additionally, due to the uncertainty of the utilization of NOL carry forwards, a valuation allowance equal to the net deferred tax assets has been recorded.

The significant components of deferred tax assets as of ~~September 30, 2020~~March 31, 2021 and June 30, 2020, are as follows:

As of ~~September 30, 2020,~~March 31, 2021, the Company does not believe that it has taken any tax positions that would require the recording of any additional tax liability nor does it believe that there are any unrealized tax benefits that would either increase or decrease within the next twelve months. As of ~~September 30, 2020,~~March 31, 2021, the Company's income tax returns generally remain open for examination for three years from the date filed with each taxing jurisdiction.

Certain conditions may exist as of the date the condensed consolidated financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company's management and its legal counsel assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company's legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company's condensed consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed.

On September 4, ~~2019,~~2020, the Company recorded a pre-acquisition liability for approximately $591,000 relative to unpaid payroll tax liabilities and associated penalties and fees of Concepts and Solutions. The liability is included with the seller note payable.

On August 14, ~~2020,~~2021, the Company entered into a legal settlement agreement and recorded a liability for $2,000,000 related to a lawsuit by a previous creditor of Galaxy CO. The liability of ~~$1,058,240~~$918,240 and $2,000,000 is included in the consolidated balance sheets at ~~September 30, 2020~~March 31, 2021 and June 30, ~~2020.~~2021. This legal settlement was fully repaid subsequent to March 31, 2021 (Note 17).

Galaxy contracts the manufacturer of its products with overseas suppliers. The Company's sales could be adversely impacted by a supplier's inability to provide Galaxy with an adequate supply of inventory.

Galaxy has two customers that accounted for approximately ~~13%~~73% of accounts receivable at ~~September 30, 2020,~~March 31, 2021, and three customers that accounted for approximately 79% of accounts receivable at June 30, 2020. Galaxy has four customers that accounted for approximately 52% and two customers that accounted for ~~approximately 48% and 81%~~34% of total revenue for the ~~three~~nine months ended ~~September 30, 2020~~March 31, 2021, respectively.

From time to time, the Company has on deposit, in institutions whose accounts are insured by the Federal Deposit Insurance Corporation, funds in excess of the insured maximum. The at-risk amount is subject to significant daily fluctuation. The Company has never experienced any losses related to these balances, and ~~2019, respectively.~~as such, the Company does not believe it is exposed to any significant risk.

Galaxy renewed a consulting agreement in April 2020 for advisory services with a stockholder. In exchange for services provided, the consultant receives consulting fees paid out in stock not resulting in a greater than 4.9% equity interest in Galaxy. On September 18, 2020, the Company issued 97,250,000 shares of common stock registered under the Stock Plan 2020 to the consultant for services.

On May 31, 2020, the Company entered into a ~~two year~~two-year purchase agreement (the ~~"Put~~"Equity Purchase Agreement") with an investor, which was amended and restated on July 9, 2020 and then again on December 29, 2020. Pursuant to the terms of the Equity Purchase Agreement, the investor agreed to purchase up to $2$10 million of the Company's common stock (subject to certain limitations) from time to time during the term of the ~~Put~~Equity Purchase Agreement. The Company issued ~~2,500,000~~a total of 50,000,000 shares of common stock to the investor as consideration for its commitment to purchase shares of the Company's common stock. Pursuant to the terms and conditions of the second amended and restated agreement on December 29, 2020, the Company sold, and the investor purchased 100 million shares of the Company’s common stock for an aggregate purchase price of $500,000. These shares are not yet issued and therefore, the purchase price is recorded as a related party payable to the investor (Note 8). The Company will use proceeds from shares issued to the investor for working capital and general and administrative expenses.

On July 30, 2020, the Company entered into a ~~two year~~two-year accounts receivable factoring agreement with a financial services company to provide working capital. Pursuant the agreement, the financial services company will pay the Company as the purchase price for the purchased accounts, an amount up to eighty percent (80%). Factoring fees are 2.5% of the face value of the account receivable sold to the factoring agent per month until collected. For collections over 90 days from the invoice date, the fee increases to 3.5%. The agreement contains a credit line of $1,000,000 and requires a minimum of $300,000 of factored receivables per calendar quarter. The agreement includes early termination ~~fees.~~fees and is guaranteed by the Company and the by two of the stockholders individually. The Company factored ~~$191,223~~approximately $600,000 and $0 of accounts receivable as of ~~September~~March 31, 2021 and June 30, ~~2020.~~2020, respectively.

On January 1, 2020, the Company entered into an employment agreement with the Chief Executive Officer (CEO) of the Company for a two-year term which was amended on September 1, 2020. Under the amended employment agreement, the CEO will receive annual compensation of $500,000, and an annual discretionary bonus based on profitability and revenue growth. The agreement includes a non-compete agreement and severance benefits of $90,000.

On January 1, 2020, the Company entered into an employment agreement with the Chief Finance ~~Officer/Chief Operations~~ Officer ~~(CFO/COO)~~(CFO) of the Company, who then also served as our Chief Operating Officer, for a two-year term, which was amended on September 1, 2020. Under the amended employment agreement, the ~~CFO/COO~~CFO will receive annual compensation of $250,000, and an annual discretionary bonus based on profitability and revenue growth. The agreement includes a non-compete agreement and severance benefits of $72,000.

On February 1, 2021, the Company entered into an employment agreement with the Chief Operations Officer (COO) of the Company for a one-year term. Under the employment agreement, the COO, will receive annual compensation of $140,000, and quarterly and annual discretionary bonus based on profitability and revenue growth. The agreement includes an initial issuance of common stock in the form of Rule 144 stock. Subsequent stock issuances to be available on an annual basis upon renewal of agreement.

The Company is party to a ~~one year~~one-year supplier agreement to manufacture and sell audio products to a buyer that is effective until July 2021. The initial order under this supplier agreement is for 4,000 units, at a discounted total price of $3,488,000, to be delivered over the agreement period. If the buyer does not meet the minimum floor of 4,000 units, then the contract becomes void and the buyer must pay the difference between the units sold and the total floor pricing of the $3,488,000. The buyer will pay tooling costs of $25 per unit shipped to them. The Company supplied 921,051 units as of ~~September 30, 2020.~~March 31, 2021. The agreement was extended in July 2020 for a ~~one year~~one-year term. The agreement can be extended for one additional year.

On September 4, 2019, Galaxy entered into a stock purchase agreement with Concepts and Solutions. Under the terms of the stock purchase agreement, 100% of the outstanding capital for both Concepts and Solutions was purchased by Galaxy. Concurrent with this acquisition, the Company applied pushdown accounting; therefore, the consolidated financial statements after completion of the acquisition include the assets, liabilities, and results of operations of the combined company from and after the closing date. As part of the stock purchase agreement, Galaxy issued 1,350,000 shares of common stock to the seller with a value of $1,485,000. In addition to the issuance of shares of common stock, the Company entered into three promissory notes with the seller for a total note payable of $3,000,000. Payments under the notes are subject to adjustment based on the achievement of minimum gross revenues and successful resolution of certain pre-acquisition payroll withholding tax issues of Concepts and Solutions. The Company believes future earnings goals will not be met and valued the note payable at $1,484,473. The balance of the note payable is $1,030,079 at ~~September 30, 2020~~March 31, 2021 and June 30, 2020.

Management of the Company determined that a triggering event to assess the impairment of goodwill associated with the acquisition of Concepts and Solutions occurred during the year ended June 30, 2020. While there was no single event, the consideration in totality of several factors that developed during this year led management to conclude that it was more likely than not that the fair values of certain intangible assets and goodwill acquired as part of the acquisition were below their carrying amounts. See Note 4.

The following table summarizes the preliminary allocation of the fair value of the assets and liabilities as of the acquisition date through pushdown accounting. The preliminary allocation to certain assets and/or liabilities may be adjusted by material amounts as the Company finalizes fair value estimates.

On October 15, 2020, the Company entered into an Asset Purchase Agreement, to acquire the assets of Classroom Technologies Solutions, Inc. ("Classroom Tech") for consideration of (a) paying off a secured Classroom Tech loan, not to exceed the greater of 50% of the value of the Classroom Tech assets acquired or $120,000; (b) the issuance of a promissory note in the amount of $44,526 to a Classroom Tech designee; and (c) the issuance of 10 million shares of common stock to the seller of Classroom Tech.

The following table summarizes the allocation of the fair value of the assets as of the acquisition date through pushdown accounting.

An Employee, Directors, and Consultants Stock Plan was established by the Company ~~(The~~(the "Plan"). The Plan is intended to attract and retain employees, directors and consultants by aligning the economic interest of such individuals more closely with the Company's stockholders by paying fees or salaries in the form of shares of the Company's common stock. The Plan is renewed annually or earlier. The 2020 Plan is effective September 16, 2020 and expires December 15, 2021. The 2019 Plan is effective December 13, 2018 and expires June 1, 2020. 99,250,000 Shares of Common Stock of are reserved for stock awards under the Plans. There were 98,857,857 and 965,000 shares awarded under the Plans as of ~~September 30, 2020~~March 31, 2021 and June 30, 2020, respectively.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As reflected in the accompanying consolidated financial statements, the Company had negative working capital of approximately ~~$5,000,000,~~$7,791,000 an accumulated deficit of approximately ~~$37,000,000,~~$47,290,000, and cash used in operations of approximately ~~$3,000,000~~$6,895,000 at ~~September 30, 2020.~~March 31, 2021.

The Company's operational activities has primarily been funded through issuance of common stock for services, related party advances, ~~put~~equity purchase agreement transactions for proceeds, accounts receivable factoring, debt financing ~~a private placement offering of common stock~~ and through the deferral of accounts payable and other expenses. The Company intends to raise additional capital through the sale of equity securities or borrowings from financial institutions and investors and possibly from related and nonrelated parties who may in fact lend to the Company on reasonable terms. Management believes that its actions to secure additional funding will allow the Company to continue as a going concern. There is no guarantee the Company will be successful in achieving any of these objectives. These sources of working capital are not assured, and consequently do not sufficiently mitigate the risks and uncertainties disclosed above. The ability of the Company to continue as a going concern is dependent upon management's ability to raise capital from the sale of its equity and, ultimately, the achievement of operating revenues. The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

~~The Company has evaluated subsequent events through~~On April 7, 2021, approximately $950,000 was paid to settle the ~~date on which the condensed consolidated financial statements were available to be issued.~~legal settlement agreement discussed in Note 12.

On ~~October 15, 2020,~~April 5, 2021, the Company ~~entered into~~issued 50,000,000 shares to an ~~Asset~~investor in exchange for proceeds of approximately $500,000 under the Purchase Agreement (APA), to acquire the assets of Classroom Technologies Solutions, Inc. ("Classroom Tech"), for consideration of (a) paying off a secured Classroom Tech loan, not to exceed the greater of 50% of the value of the Classroom Tech assets acquired or $120,000; (b) the issuance a promissory note in the amount of $44,526 to a Classroom Tech designee;dated May 2020, as amended and ~~(c) the issuance of 10 million shares of common stock to the seller of Classroom Tech.~~restated on July 9, 2020 and on December 29, 2020 (Note 13).

On ~~October 22, 2020, the Company reserved 50,000,000 shares in certificate form as collateral on the renewed line of credit (Note 5).~~

~~In October 2020,~~April 19, 2021, the Company issued ~~7,025,582~~30,000,000 shares to ~~investors~~an investor in ~~satisfaction~~exchange for expected proceeds of ~~$58,300 of principal~~approximately $472,000 under the Purchase Agreement dated May 2020, as amended and restated on ~~convertible notes.~~July 9, 2020 and on December 29, 2020 (Note 13).

On ~~October 30, 2020,~~April 29, 2021, the Company issued ~~a $1,200,000 convertible note~~100,000,000 shares to an ~~investor.The common shares reserved for conversion under the~~investor to satisfy a $500,000 note ~~are registered.~~payable to related party investor (Note 8).

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

This Quarterly Report on Form 10-Q (this "Report"), including the section titled "Management's Discussion and Analysis of Financial Condition and Results of Operations," contains forward-looking within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the ~~“Exchange Act”~~"Exchange Act") statements regarding future events and the future results of Galaxy Next Generation, Inc., which we refer to as "we," "us,"~~"our"~~ "our", "Galaxy," or the "Company," that are based on our current expectations, estimates, forecasts, and projections about our business, economic and market outlook, our results of operations, the industry in which we operate and the beliefs and assumptions of our management. Words such as "expects," "anticipates," "targets," "goals," "projects," "would," "will," "could," "may," "intends," "plans," "believes," "seeks," "estimates," variations of such words, and similar expressions are intended to identify such forward-looking statements. Forward-looking statements by their nature address matters that are, to different degrees, uncertain, and these forward-looking statements are only predictions and are subject to risks, uncertainties, and assumptions that are difficult to predict, including the duration, extent, and impact of the COVID-19 pandemic, and our ability to successfully manage the demand, supply, and operational challenges associated with the COVID-19 pandemic. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, those discussed in this Report under the section entitled "Risk Factors" in Item 1A of Part II, Part I Item 1A of our Annual Report on Form 10-K for the year ended June 30, 2020 (as amended, the "Annual Report"), and in other reports we file with the U.S. Securities and Exchange Commission (the "SEC"). In addition, many of the foregoing risks and uncertainties are, and could be, exacerbated by the COVID-19 pandemic and ~~the U.S. election and~~ any worsening of the global business and economic environment as a result of the ~~pandemic or the U.S. election.~~pandemic. While forward-looking statements are based on reasonable expectations of our management at the time that they are made, you should not rely on them. We undertake no obligation to revise or update publicly any forward-looking statements for any reason, except as required by applicable law. We cannot at this time predict the extent of the impact of the COVID-19 pandemic and any resulting business or economic impact, but it could have a material adverse effect on our business, financial condition, results of operations and cash flows.

The following discussion is based upon our unaudited condensed consolidated financial statements included in Part 1, Item I, of this Report, which were prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP). In the course of operating our business, we routinely make decisions as to the timing of the payment of invoices, the collection of receivables, the manufacturing and shipment of products, the fulfillment of orders, the purchase of supplies, and the building of inventory, among other matters. In making these decisions, we consider various factors, including contractual obligations, customer satisfaction, competition, internal and external financial targets and expectations, and financial planning objectives. Each of these decisions has some impact on the financial results for any given period. To aid in understanding our operating results for the periods covered by this Report, we have provided an executive overview, which includes a summary of our business and market environment along with a financial results and key performance metrics overview. These sections should be read in conjunction with the more detailed discussion and analysis of our condensed consolidated financial condition and results of operations in this Item 2, our "Risk Factors" section included in Item 1A of Part II of this Report, and our unaudited condensed consolidated financial statements and notes thereto included in Item 1 of Part I of this Report, as well as our audited consolidated financial statements and notes included in Item 8 of Part II of our Annual Report.

Galaxy works hand-in-hand with educators to help them evolve how teaching and learning happens in their 21st century classroom. This new approach leverages digital content, learning data, and one-of-a-kind technologies in order to create an immersive and interactive experience.

We help the administrators, teachers, students, and the IT staff incorporate meaningful digital content, leverage learning data, and creatively use our products to create an immersive and interactive experience.

Galaxy's products include Galaxy's own private-label interactive touch screen panel as well as numerous other national and international branded peripheral and communication devices. Galaxy's distribution channel consists of approximately 3037 resellers across the U.S. who primarily sell the Company's products within the commercial and educational market. Galaxy does not control where resellers focus their resell efforts, although generally, the K-12 education market is the largest customer base for Galaxy products - comprising nearly 90% of Galaxy's sales.

Our acquisition of Interlock Concepts, Inc. ("Concepts") and Ehlert Solutions Group, Inc. ("Solutions") in September 2019 increased our line of product offerings. Concepts and Solutions provide fundamental tools and products for building notification systems primarily to K-12 education market customers located primarily in the north and northwest United States. These products and services allow institutions access to intercom, scheduling, and notification systems with improved ease of use. The products provide an open architecture solution to customers which allows the products to be used in both existing and new environments. Intercom, public announcement, bell and control solutions are easily added and integrated within the open architecture design and software model. These products combine elements over a common internet protocol network, which minimizes infrastructure requirements and reduces costs by combining systems.

In fiscal year 2021, we continued to execute on our product and solutions strategy and closed on an asset purchase of Classroom Technology Solutions ("CTS"), a designer, manufacturer, importer and integrator of audio-visual products, with headquarters in Jacksonville, Florida.

We expect the purchase of CTS's assets will prove to be accretive to Galaxy's bottom line. As part of the purchase agreement, Galaxy is gaining access to not only years of customer support to the CTS brands, but also years of buying power from the CTS president, Cy Marshall. ~~Cy will be joining the Galaxy team as part of the acquisition as Galaxy's Product Officer. His~~The new relationships with global vendors have already proven to be helpful to Galaxy's import activity by decreasing Galaxy's cost of goods, by an average of 50%, on several products sold under the G2 brands. G2 is the Company’s self-branded product line. This is an important step for the Company as management strives towards profitability in the coming quarters.

During the three months ended ~~September 30, 2020,~~March 31, 2021, we continued to experience strong demand for our products and services. We remain confident in our strategy and we are executing against our innovation roadmap. We believe our understanding of high-performance interactive technology products ~~positions~~position us to effectively capitalize on the industry transition to remote classrooms. We have also continued to work on eliminating outstanding liabilities and keeping payables current and aligned with receivables and inventory. As listed in the subsequent events section of the condensed consolidated financial statements, we have eliminated approximately $1 million in liabilities as disclosed in Notes 12 and 17.

The ongoing outbreak of Coronavirus (COVID-19) has caused significant disruptions to national and global economies and government activities. However, during this time, we have continued to conduct our operations to the fullest extent possible, while responding to the outbreak with actions that include:

● planning for and working aggressively to mitigate disruptions that may occur; and

● supporting our communities and schools in addressing the challenges of the pandemic, such as the production and installation of COVID shields and providing products that allow educators to operate in a remote teaching environment.

As such, we have experienced ~~quarter-over-quarter revenue increases~~strong revneues during the last 3three quarters as our customers face a greater need and willingness to spend on information technology. While we cannot guarantee this trend will continue, we believe our education customers have prioritized their budgets towards IT spending creating a more robust customer demand for remote enablement.

The pandemic has not had a substantial ~~net~~negative impact to our consolidated operating results or our liquidity position so far in fiscal year 2021. However, we have experienced supply chain delays due to the pandemic. In addition, increased product demand has resulted in our increased need for additional funding. We continue to meet our short-term liquidity needs from revenue derived from product sales supplemented with proceeds from issuances of debt and equity, and we expect to maintain access to the capital markets. To date in fiscal year 2021, we have not observed any impairments of our assets or a significant change in the fair value of assets due to the pandemic. We intend to continue to work with our employees and customers to implement safety measures to ensure that we are able to continue manufacturing and installing our products.

However, given the global economic slowdown, and the other risks and uncertainties associated with the pandemic, our business, financial condition, results of operations and growth prospects could be materially adversely affected. The extent to which the COVID-19 pandemic impacts our business, the business of our suppliers and other commercial partners, our corporate development objectives, our ability to access capital and the value of and market for our common stock par value ~~$0.001~~$0.0001 per share (the "Common Stock"), will depend on future developments that are highly uncertain and cannot be predicted with confidence at this time, such as the ultimate duration of the pandemic, travel restrictions, quarantines, social distancing and business closure requirements in the United States and other countries, and the effectiveness of actions taken globally to contain and treat the disease.

The preparation of financial statements and related disclosures in conformity with U.S. GAAP requires us to make judgments, assumptions, and estimates that affect the amounts reported in the unaudited condensed consolidated financial statements and the accompanying notes. On an ongoing basis, we evaluate our estimates and assumptions. These estimates and assumptions are based on current facts, historical experience, and various other factors that we believe are reasonable under the circumstances to determine reported amounts of assets, liabilities, revenues, and expenses that are not readily apparent from other sources.

During the three and nine months ended ~~September 30, 2020,~~March 31, 2021, there were no material changes to our critical accounting policies and estimates as compared to the critical accounting policies and estimates disclosed in Management's Discussion and Analysis of Financial Condition and Results of Operations contained in Part II, Item 7 of our Annual Report.

See Note 1, Basis of Presentation and Summary of Significant Accounting Policies, in the notes to the unaudited condensed consolidated financial statements in Item 1 of Part I of this Report, for a full description of the recent accounting standards not yet adopted, including the actual and expected dates of adoption and estimated effects on our consolidated results of operations and financial condition, which is incorporated herein by reference.

On October 15, 2020, we continued to execute on our product and solutions strategy and entered into an Asset Purchase Agreement (APA), to acquire the assets of Classroom Technologies Solutions, Inc. ("Classroom Tech"), for consideration of (a) paying off a secured Classroom Tech loan, not to exceed the greater of 50% of the value of the Classroom Tech assets acquired or $120,000; (b) the issuance a promissory note in the amount of $44,526 to a Classroom Tech designee; and (c) the issuance of 10 million shares of our common stock to the seller of Classroom Tech.

The Company has approximately $6,000,000 available under a $10,000,000 Equity Line of Credit that was registered under Form S-1 in January 2021. The equity line is with an institutional investor and allows the Company to draw equity down at the amount and time of the Company’s discretion. The Company believes that this will be a great back stop for the Company and will eliminate the need to raise money from multiple investors in the convertible debt market. During the three and nine months ended March 31, 2021, we issued approximately 135,000,000 and 377,000,000 shares of our common stock, respectively pursuant to the terms of the equity line purchase agreement and received net proceeds from such issuances of $2,534,813 and $4,851,333, respectively.

The Company has an available $1,000,000 and $1,250,000 line of credit at ~~September 30, 2020~~March 31, 2021 and June 30, 2020, respectively, bearing interest at prime plus 0.5% (3.75% at ~~September 30, 2020~~March 31, 2021 and 4.25% at June 30, 2020). The line of credit was renewed in October 2020 at a reduced available credit line and change in collateral, and now expires on October 29, 2021. The renewed line of credit is collateralized by certain real estate owned by a family member of a stockholder, 50,000,000 shares of the Company's common stock, ~~and~~ the personal stock of two stockholders, and a key man life insurance policy. A minimum average bank balance of $50,000 was required on the line of credit agreement at June 30, 2020, but ~~this~~ requirement was removed as of ~~September 30, 2020.~~March 31, 2021. The outstanding balance is ~~$936,598~~$991,598 and $1,236,598 at ~~September 30, 2020~~March 31, 2021 and June 30, 2020, respectively.

Pursuant to the terms of a Securities Purchase Agreement, initially dated as of August 18, 2020 and amended and restated as of October 9, 2020 (the "Securities Purchase Agreement"), between the Company and YA II PN, LTD. (the "Selling Stockholder"), the Company issued and sold two Convertible Debentures (the "Convertible Debenture" and each a "Convertible Debenture") to the Selling Stockholder in the aggregate principal amount of $1,700,000. The Convertible Debentures were issued with a 7.0% original issue discount, resulting in net proceeds to the Company of an aggregate of $1,581,000. The first Convertible Debenture was sold to the Selling Stockholder on October 9, 2020, with a principal amount of $500,000 and for net proceeds of $465,000. The second Convertible Debenture was sold on October 30, 2020 with a principal amount of $1,200,000 and for net proceeds of $1,116,000. Pursuant to the Securities Purchase Agreement, the Selling Stockholder had agreed, subject to customary closing conditions, to purchase the second Convertible Debenture upon the effectiveness of the Registration Statement on Form S-1 filed by the Company on October 20, 2020, as amended (File No. 333-249561) registering the shares of Common Stock underlying the Convertible Debentures, which was declared effective by the SEC on October 20, 2020.-31-

The table below presents an analysis of selected line items period-over-period in our interim Condensed Consolidated Statements of Operations for the periods indicated.

Net loss less stock compensation, and General and administrative expense, less stock compensation and impairment expenses, noted below, are non-GAAP measures and do not have standardized definitions under GAAP. The tables below provide a reconciliation of the non-GAAP financial measures, presented herein, to the most directly comparable financial measures calculated and presented in accordance with GAAP. These non-GAAP financial measures are presented because management has evaluated the financial results both including and excluding the adjusted items and believe that the non- GAAP financial measures provide additional perspective and insights when analyzing the core operating performance of the business. The non-GAAP financial measures should not be considered superior to, as a substitute for, or as an alternative to, and should be considered in conjunction with, the GAAP financial measures presented.

Total revenues recognized were ~~$1,178,213~~$2,754,463 and ~~$624,897~~$1,850,673 for the ~~three~~nine months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019,~~ respectively, an increase of approximately ~~89%~~49%. Additionally, deferred revenue amounted to ~~$1,565,139~~$815,214 and $1,133,992 as of ~~September 30, 2020~~March 31, 2021 and June 30, 2020, respectively. Total revenues recognized were $777,457 and $349,247 for the three months ending March 31, 2021 and 2020, respectively, an increase of approximately 123%. Revenues increased during the three and nine months ended March 31, 2021 due to the increase in the customer base for interactive panels and related products as well as additional revenues ~~received through Concepts~~from OEM customers and ~~Solutions, which were acquired in September 2019.~~COVID related new products.

Our cost of sales was ~~$833,177~~$356,731 and ~~$493,679~~$130,614 for the three months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019,~~ respectively, an increase of approximately ~~69%~~173%. Our cost of sales was $1,660,971 and $1,116,398 for the nine months ended March 31, 2021 and 2020, respectively, an increase of approximately 49%. Cost of sales consists primarily of manufacturing, freight, and installation costs. There are no significant overhead costs which impact cost of sales. Cost of sales increased from the three and nine months ended ~~September 30, 2019~~March 31, 2020 due to ~~costs associated with higher~~increased revenues ~~generated from technology~~related to new products and ~~interactive panels. Our gross margin was 29% and 21% for the three months ended September 30, 2020 and 2019, respectively.~~new relationships.

Total general and administrative expenses (including stock compensation expenses) were ~~$4,155,227~~$1,699,760 and ~~$2,123,859~~$3,710,670 for the three months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019,~~ respectively, ~~an increase~~a decrease of approximately ~~96%~~54%.

Total general and administrative expenses (including stock compensation expenses) were $7,126,105 and $8,319,900 for the nine months ended March 31, 2021 and 2020, respectively, a decrease of approximately 14%. General and administrative expenses consist primarily of salaries and stock compensation expense, office rent, travel expense, amortization expense, impairment charges and professional fees. Of this amount, ~~$2,763,000~~$2,350 represent consulting fees and employee compensation paid through the issuance of stock, which did not impact cash, for the three months ended ~~September 30, 2020. Additionally, amortization~~March 31, 2021. Consulting fees and employee compensation paid through the issuance of ~~intangible assets~~stock, which did not impact cash, was $2,778,550 for the nine months ended March 31, 2021.

Interest expense amounted to $2,095,272 and $1,860,498 for the three months ended ~~September 30,~~March 31, 2021 and 2020, ~~totaled $80,512 which did not impact cash. There was no amortization~~respectively, an increase of ~~intangibles~~13%. Interest expense of $1,805,687 during the three months ended ~~September 30, 2019.~~

~~Interest expense amounted to $7,870,756 and $601,790 for the three months ended September 30, 2020 and 2019, respectively. Interest expense of $4,006,900~~March 31, 2021, was due to sales of our common stock to investors under the ~~Put~~Equity Purchase Agreement in exchange for proceeds of ~~$2,316,520. Interest~~$2,534,813. Reduced interest expense of ~~$3,863,856~~$289,585 during the three months ended March 31, 2021, is attributed to the ~~increase~~decrease in our overall debt.

Interest expense amounted to $13,981,366 and $3,822,927 for the nine months ended March 31, 2021 and 2020, respectively, an increase of 266%. Interest expense of $6,807,587 during the nine months ended March 31, 2021, was due to sales of our common stock to investors under the Equity Purchase Agreement in exchange for proceeds of $4,851,333. Interest expense increased by $10,158,439 primarily due to interest on the Equity Purchase Agreement and change in overall debt during the nine months ended March 31, 2021.

The outstanding ~~warrants and~~ conversion features in our ‘related party’ preferred convertible notes payable meet the definition of a derivative liability instrument because the exercise price of the ~~warrants and the~~ conversion ~~rates are variable.~~rates. As a result, the outstanding ~~warrants and~~ conversion features of the notes are recorded as a derivative liability at fair value and marked-to-market each period with the change in fair value charged or credited to income. A derivative liability of ~~$1,276,312~~$3,376,000 and $246,612 is recorded at ~~September 30, 2020~~March 31, 2021 and June 30, 2020. During the ~~three~~nine months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019,~~ we amortized ~~$399,936~~$766,603 and ~~$228,933~~$1,412,705 of original issue debt discount on derivative instruments to interest accretion, respectively. Changes in these amounts do not impact cash.

Net loss incurred for the three months ended ~~September 30,~~March 31, 2021 and 2020 was $2,890,289 and ~~2019~~$5,261,097, respectively, a decrease of approximately 45%. Net loss incurred for the nine months ended March 31, 2021 and 2020 was ~~$13,134,778~~$23,793,148 and ~~$2,017,347,~~$10,100,651, respectively, ana increase of approximately ~~551%~~136%. Noncash contributing factors for the net loss incurred for the three and nine months ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~ are as follows:

a) ~~$2,763,000~~$2,350 and ~~$1,327,811~~$48,034 represent consulting fees and employee compensation paid through the issuance of stock for the three months ended ~~September 30,~~March 31, 2021 and 2020, respectively; and ~~2019, respectively;~~$2,778,550 and $2,055,726 represent consulting fees and employee compensation paid through the issuance of stock for the nine months ended March 31, 2021 and 2020, respectively

b) ~~amortization~~Interest expenses related to equity purchase agreement of ~~intangible assets~~$1,805,687 and $0 for the three months ended ~~September 30,~~March 31, 2021 and March 31, 2020, ~~totaling $80,512;~~respectively; and $6,807,587 and $0 for the nine months ended March 31, 2021 and 2020, respectively

c) ~~change in fair value~~Impairment charges taken of ~~the derivative liability related to convertible notes payable of $(1,053,895)~~$0 and ~~$802,968~~$2,000,287 for the three and nine months ended ~~September 30,~~March 31, 2021 and March 31, 2020 ~~and 2019.~~

Our revenues generated from operations have been insufficient to support our operational activities and have been supplemented by the proceeds from the issuance of securities, including equity and debt issuances. As stated in Note 16 to the notes to the unaudited condensed consolidated financial statements included in this Report, our ability to continue as a going concern is dependent upon management's ability to raise capital from the sale of its equity and, ultimately, the achievement of operating revenues. If our revenues continue to be insufficient to support our operational activities, we intend to raise additional capital through the sale of equity securities or borrowings from financial institutions and possibly from related and nonrelated parties who may in fact lend to us on reasonable terms and ultimately generating sufficient revenue from operations. Management believes that its actions to secure additional funding will allow us to continue as a going concern. We currently do not have any committed sources of financing other than our line of ~~credit,~~credits, our ~~Put~~Equity Purchase Agreement, and accounts receivable factoring agreement, each of which requires us to meet certain requirements to utilize. Under the ~~Put~~Amended and Restated Equity Purchase Agreement, we can issue up to an aggregate of $2$10 million worth of shares of our common stock at ~~September 30, 2020.~~March 31, 2021. There can be no assurance that we will meet all or any of the requirements pursuant to our line of credit, our ~~Put~~Equity Purchase Agreement, and accounts receivable factoring agreement, and therefore those financing options may be unavailable to us. There is no guarantee we will be successful in raising capital outside of our current sources, and if so, that we will be able to do so on favorable terms.

Our cash totaled ~~$411,721~~$742,382 at ~~September 30, 2020,~~March 31, 2021, as compared with $412,391 at June 30, 2020, ~~a decrease~~an increase of ~~$670.~~$329,991. Net cash of ~~$2,823,306~~$6,894,817 was used by operations for the ~~three~~nine months ended ~~September 30, 2020.~~March 31, 2021. Net cash of ~~$2,822,636~~$7,185,972 was provided from financing activities for the ~~three~~nine months ended ~~September 30, 2020,~~March 31, 2021, primarily due to proceeds from the Equity Purchase Agreement and to a lesser extent convertible notes ~~payable and the Put Purchase Agreement.~~payable.

For the ~~three~~nine months ended ~~September 30, 2020,~~March 31, 2021, we had no$38,836 cash provided by investing ~~activities; however,~~activities, and for the ~~three~~nine months ended ~~September 30, 2019,~~March 31, 2020, we had net cash provided by investing activities of $2,950,282 which resulted from our acquisition of Concepts and Solutions.

For the ~~three~~nine months ended ~~September 30, 2020,~~March 31, 2021, we had ~~$2,822,636~~$7,185,972 of cash provided by financing activities primarily related to ~~$2,316,520~~$4,851,333 of proceeds from the sale of common stock under the ~~Put~~Equity Purchase Agreement, ~~and $840,000~~$1,956,000 of proceeds from the sale of convertible notes, and approximately $544,000 of related party note proceeds offset by payments of ~~$300,000~~approximately $245,000 under the line of credit. ~~For the three months ended September 30, 2019, we had $667,000 of cash provided by financing activities related to proceeds from convertible notes.~~ Total current liabilities ~~of $7,326,629~~are $12,047,976 and $8,962,520 as of ~~September 30, 2020~~March 31, 2021 and June 30, ~~2019,~~2020, respectively, ~~a decrease~~an increase of ~~18%~~34%. Our liabilities primarily consist of borrowings under a line of credit, ~~convertible notes payable,~~ related party notes payable, derivative liability, deferred revenue, accrued expenses and accounts payable.

To implement our business plan, we will require additional financing. ~~Additional financing may come from future equity or debt offerings that could result in dilution to our stockholders.~~ Further, current or future adverse capital and credit market conditions could limit our access to capital. We may be unable to raise capital or bear an unattractive cost of capital that could reduce our financial flexibility.

Our long-term liquidity requirements will depend on many factors, including the rate at which we grow our business and footprint in the industries. To the extent that the funds generated from operations are insufficient to fund our activities in the long term, we may be required to raise additional funds through public or private financing. No assurance can be given that additional financing will be available or that, if it is available, it will be on terms acceptable to us.

The Company did not have off-balance sheet arrangements or transactions as of and for the three and nine months ended ~~September 30, 2020~~March 31, 2021 and ~~2019.~~2020.

The information under this Item is not required to be provided by smaller reporting companies.

Under the supervision and with the participation of our management, including the Chief Executive Officer (our principal executive officer) and Chief Financial Officer (our principal financial and accounting officer), we have evaluated the effectiveness of the design and operation of our disclosure controls and procedures, as such term is defined in Exchange Act Rules 13a-15(e) and 15d-15(e), as of the end of the period covered by this Report.

We conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures ("Disclosure Controls") as of the end of the period covered by this Report. The Disclosure Controls evaluation was conducted under the supervision and with the participation of management, including our Chief Executive Officer (our principal executive officer) and our Chief Financial Officer (our principal financial and accounting officer). Disclosure Controls are controls and procedures designed to reasonably assure that information required to be disclosed in our reports filed under the Exchange Act, such as this Report, is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. Disclosure Controls are also designed to provide reasonable assurance that such information is accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Based on this evaluation our Chief Executive Officer and Chief Financial Officer have concluded that, because of a material weakness in our internal control over financial reporting that existing at June 30, 2020 and had not been remediated by the end of the period covered by this Report, our disclosure controls and procedures were not effective as of the end of the period covered by this Report. This material weakness in the Company's internal control over financial reporting and the Company's remediation efforts are described below.

The material weakness relates to the fact that our management is relying on external consultants for purposes of preparing its financial reporting package; however, the officers may not be able to identify errors and irregularities in the financial reporting package before its release as a continuous disclosure document. As a result of the deficiencies, we have discovered it is reasonably possible that internal controls over financial reporting may not have prevented or detected errors from occurring that could have been material, either individually or in the aggregate.

We continue to engage an outside CPA with SEC related experience to assist in correction of these material weaknesses. In addition, we continue to appoint an accountant to provide financial statements on a monthly basis and to assist with the preparation of our SEC financial reports, which allows for proper segregation of duties as well as additional manpower for proper documentation.

There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the period covered by this Report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

From time to time, we may be subject to various legal proceedings and claims that arise in the ordinary course of business litigation, regardless of the outcome could have a material adverse impact on us because of the defense and settlement costs, diversion of management resources and other factors. We are not currently subject to any legal proceedings that we believe will have a material impact on our business at this time.

In 2016, a previous creditor of Galaxy ~~CO.~~Co. filed a ~~law suit~~lawsuit alleging default on money owed and sought $4,000,000 in damages. On August 14, 2020, the Company entered into a legal settlement agreement and recorded a liability for $2,000,000. The liability of ~~$1,058,240~~$918,240 and $2,000,000 is included in the consolidated balance sheets at ~~September 30, 2020~~March 31, 2021 and June 30, 2020. This liability has been eliminated as of April 7, 2021 and is listed as a subsequent event in our financial reports included in this Current Report on Form 10-Q. This legal proceeding will no longer be reported as a liability on future financial reports.

Investing in our common stock involves a high degree of risk. You should consider carefully the following risks, together with the risks specified in Item 1A of Part I of our Annual Report for the year ended June 30,2020 and all the other information in this Report, including our condensed consolidated financial statements and notes thereto. If any of the following risks ~~actually~~ materializes, our operating results, financial condition and liquidity could be materially adversely affected. As a result, the trading price of our common stock could decline, and you could lose part or all of your ~~investment. There~~investment.The following information updates should be read in conjunction with the information disclosed in Part 1, Item 1A, "Risk Factors," contained in our Annual Report for the year ended June 30,2020. Except as disclosed below, there have been no material changes from the risk factors and uncertainties disclosed in our Annual Report for the ~~Annual Report.~~year ended June 30,2020.

~~-40-~~We may not be able to access the full amounts available under the Amended and Restated Purchase Agreement, which could prevent us from accessing the capital we need to continue our operations, which could have an adverse effect on our business.

We intend to rely on the Amended and Restated Purchase Agreement for our near-term capital needs. We may direct Tysadco Partners to purchase up to $10.0 million of shares of our common stock over a 24-month period, commencing upon the satisfaction of certain conditions. On any trading day selected by us, we may sell shares of common stock to Tysadco Partners in an amount equal to the lesser of $500,000 or 300% of the average shares traded for the 10 days prior to the closing request date, with a minimum request of $200,000. The purchase price shall be 85% of the lowest average daily traded price during the ten trading days commencing on the first trading day following delivery and clearing of the delivered shares (in each case, to be appropriately adjusted for any reorganization, recapitalization, non-cash dividend, stock split, reverse split or other similar transaction that occurs on or after the date of the Amended and Restated Purchase Agreement).

In addition, Tysadco partners will not be required to purchase any shares of our common stock if such sale would result in its beneficial ownership exceeding 4.99% of the then outstanding shares of our common stock. Our inability to access a portion or the full amount available under the Amended and Restated Purchase Agreement, in the absence of any other financing sources, could have a material adverse effect on our business.

The sale or issuance of our common stock to Tysadco Partners may cause dilution and the sale of the shares of common stock acquired by Tysadco Partners, or the perception that such sales may occur, could cause the price of our common stock to fall.

Upon the execution of the Amended and Restated Purchase Agreement, we issued 50,000,000 Commitment Shares to Tysadco Partners in consideration for its commitment to purchase shares of our common stock under the Amended and Restated Purchase Agreement. The remaining shares of our common stock that may be issued under the Amended and Restated Purchase Agreement may be sold by us to Tysadco Partners at our discretion from time to time over a 24-month period commencing after the satisfaction of certain conditions set forth in the Amended and Restated Purchase Agreement, including that the registration statement registering the shares to be issued pursuant to the Amended and Restated Purchase Agreement remains effective. The purchase price for the shares that we may sell to Tysadco Partners under the Amended and Restated Purchase Agreement will fluctuate based on the price of our common stock. Depending on market liquidity at the time, sales of such shares may cause the trading price of our common stock to fall.

We generally have the right to control the timing and amount of any future sales of our shares to Tysadco Partners. Additional sales of our common stock, if any, to Tysadco Partners will depend upon market conditions and other factors to be determined by us. We may ultimately decide to sell to Tysadco Partners all, some, or none of the additional shares of our common stock that may be available for us to sell pursuant to the Purchase Agreement. If and when we do sell shares to Tysadco Partners, after Tysadco Partners has acquired the shares, Tysadco Partners may resell all or some of those shares at any time or from time to time in its discretion. Therefore, sales to Tysadco Partners by us could result in substantial dilution to the interests of other holders of our common stock. Additionally, the sale of a substantial number of shares of our common stock to Tysadco Partners, or the anticipation of such sales, could make it more difficult for us to sell equity or equity-related securities in the future at a time and at a price that we might otherwise wish to effect sales.

We may not be able to access the full amounts available under the Amended and RestatedPurchase Agreement, which could prevent us from accessing the capital we need to continue our operations, which could have an adverse effect on our business

At March 31, 2021, we had cash of $742,382. We had an accumulated deficit of $47,289,940 at March 31, 2021, and at June 30, 2020, an accumulated deficit of $23,496,792. We have generated significant losses to date and expect to continue to incur significant operating losses. To date, our revenue from operations have been insufficient to support our operational activities and has been supplemented by the proceeds from the issuance of securities. There is no guarantee that additional equity, debt or other funding will be available to us on acceptable terms, or at all.

Our ability to direct Tysadco Partners to purchase up to $10.0 million of shares of our common stock over a 24-month period is subject to the satisfaction of certain conditions. The extent we rely on Tysadco Partners as a source of funding will depend on a number of factors, including the prevailing market price of our common stock and the extent to which we are able to secure funding from other sources. If obtaining sufficient funding from Tysadco Partners were to prove unavailable or prohibitively dilutive, we will need to secure another source of funding in order to satisfy our working capital needs. Even if we sell all $10.0 million under the Amended and Restated Purchase Agreement to Tysadco Partners, we may still need additional capital to fully implement our business, operating and development plans. Should the financing we require to sustain our working capital needs be unavailable or prohibitively expensive when we require it, the consequences could be a material adverse effect on our business, operating results, financial condition and prospects.

Our inability to access a portion or the full amount available under the Amended and Restated Purchase Agreement, in the absence of any other financing sources, could have a material adverse effect on our business.

It is not possible to predict the actual number of shares we will sell under the Amended and RestatedPurchase Agreement to the Selling Stockholder, or the actual gross proceeds resulting from those sales.

Subject to certain limitations in the Amended and Restated Purchase Agreement and compliance with applicable law, we have the discretion to deliver notices to the Selling Stockholder at any time throughout the term of the Amended and Restated Purchase Agreement. The actual number of shares that are sold to the Selling Stockholder may depend based on a number of factors, including the market price of the common stock during the sales period. Actual gross proceeds may be less than $10.0 million, which may impact our future liquidity. Because the price per share of each share sold to the Selling Stockholder will fluctuate during the sales period, it is not currently possible to predict the number of shares that will be sold or the actual gross proceeds to be raised in connection with those sales.

Sales of sharespursuant to the terms of the Amended and Restated Purchase will be sold at different times at different prices.

In connection with the sale of our common stock pursuant to the terms of the Amended and Restated Purchase Agreement, we will have discretion, subject to market demand, to vary the timing, prices, and numbers of shares sold to the Selling Stockholder. Similarly, the Selling Stockholder may sell such shares at different times and at different prices. Investors may experience a decline in the value of the shares they purchase from the Selling Stockholder in this offering as a result of sales made by us in future transactions to Selling Stockholder at prices lower than the prices they paid.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF ~~PROCEEDS.~~PROCEEDS

~~For~~During the three months ended ~~September 2020,~~March 31, 2021, the Company issued ~~93,333,333~~50,000 shares of common ~~shares~~stock for ~~debt reduction.~~professional consulting services. These shares were ~~issued in exchange for convertible debt reduction of $210,000~~valued at $2,350 upon issuance during the three months ended ~~September 2020.~~March 31, 2021.

~~For~~During the three months ended ~~September 2020,~~March 31, 2021, the Company issued ~~6,949,020 common~~5,000,000 shares ~~for debt reduction. These shares were issued in exchange for convertible debt reduction~~ of ~~$53,160 during the three months ended September 2020.~~

For the three months ended September 2020, the Company issued 12,848,485 common shares for debt reduction. These shares were issued in exchange for convertible debt reduction of $21,200 during the three months ended September 2020.

For the three months ended September 2020, the Company issued 18,181,818 common shares for debt reduction. These shares were issued in exchange for convertible debt reduction of $30,000 during the three months ended September 2020.

For the three months ended September 2020, the Company issued 34,852,727 common shares for debt reduction. These shares were issued in exchange for convertible debt reduction of $57,507 during the three months ended September 2020.

For the three months ended September 2020, the Company issued 13,414,903 common shares for debt reduction. These shares were issued in exchange for convertible debt reduction of $12,493 during the three months ended September 2020.

For the three months ended September 2020, the Company issued 8,000,000 common shares for debt reduction. These shares were issued in exchange for convertible debt reduction of $8,800 during the three months ended September 2020.

For the three months ended September 2020, the Company issued 7,500,000 common shares for debt reduction. These shares were issued in exchange for convertible debt reduction of $8,250 during the three months ended September 2020.

For the three months ended September 2020, the Company issued 6,295,454 common shares for debt reduction. These shares were issued in exchange for convertible debt reduction of $6,925 during the three months ended September 2020.

~~During July 2020, the Company issued 249,792,217 common shares to a warrant holder in six cashless transactions~~

For the three months ended September 2020, the Company issued 25,000,000 common shares for debt reduction. These shares were issued in exchange for convertible debt reduction of $32,000 during the three months ended September 2020.

For the three months ended September 2020, the Company issued 45,000,000 common shares for debt reduction. These shares were issued in exchange for convertible debt reduction of $58,400 during the three months ended September 2020.

For the three months ended September 2020, the Company issued 49,800,000 common shares for debt reduction. These shares were issued in exchange for convertible debt reduction of $64,736 during the three months ended September 2020.

For the three months ended September 2020, the Company issued 62,000,000 common shares for debt reduction. These shares were issued in exchange for convertible debt reduction of $80,840 during the three months ended September 2020.

For the three months ended September 2020, the Company issued 16,870,013 common shares for debt reduction. These shares were issued in exchange for convertible debt reduction of $14,024 during the three months ended September 2020.

All sales in each of the transactions set forth above were issued relying on the exemption provided by Section 4(a)(2) of the Securities Act and Regulation D promulgated thereunder for the offer and sale of securities not involving a public offering, except for debt conversions which were effected relying on Section 3(a)(9) of the Securities Act as the common stock ~~was exchanged by us with our existing security holders exclusively and no commission or other remuneration was paid or given directly or indirectly~~ for ~~soliciting such exchange. The recipients of securities in each of these transactions relying~~commitment shares under a one year note payable issued on ~~Section 4(a)(2) of the Securities Act and/or Rule 506 promulgated thereunder acquired the securities for investment only and not with a view~~January 13, 2021 to or for sale in connection with any distribution thereof, and appropriate legends were affixed to the securities issued in these transactions. Each of the recipients of securities in these transactions was an ~~accredited investor within the meaning of Rule 501 of Regulation D under the Securities Act and had adequate access, through employment, business or other relationships, to information about us.~~investor.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

1. I have reviewed this Quarterly Report on Form 10-Q (this "report") of Galaxy Next Generation, Inc. (the "registrant");

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13-a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonable likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involved management or other employees who have a significant role in the registrant's internal control over financial reporting.

1. I have reviewed this Quarterly Report on Form 10-Q (this "report") of Galaxy Next Generation, Inc. (the "registrant");

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13-a-15(f) and 15d-15(f)) for the registrant and have:

(b) Any fraud, whether or not material, that involved management or other employees who have a significant role in the registrant's internal control over financial reporting.

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the accompanying Quarterly Report on Form 10-Q of Galaxy Next Generation, Inc. (the "Company") for the quarter ending ~~September 30, 2020,~~March 31, 2021, I, Gary ~~Lecroy,~~LeCroy, Chief Executive Officer of the Company hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge and belief, that:

1.Such Quarterly Report on Form 10-Q for the fiscal quarter ending ~~September 30, 2020,~~March 31, 2021, fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in such Quarterly Report on Form 10-Q for the quarter ending ~~September 30, 2020,~~March 31, 2021, fairly presents, in all material respects, the financial condition and results of operations of the Company.

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the accompanying Quarterly Report on Form 10-Q of Galaxy Next Generation, Inc. (the "Company") for the quarter ending ~~September 30, 2020,~~March 31, 2021, I, Magen McGahee, Chief Financial Officer of the Company hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge and belief, that:



Nevada		61-1363026
(State of Incorporation)		(IRS Employer Identification No.)

285 N Big A Road Toccoa, Georgia		30577
(Address of Principal Executive Offices)		(Zip Code)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
N/A	N/A	N/A



	FORM 10-Q ~~GALAXY~~GGALAXY NEXT GENERATION, INC.
	Table of Contents
		Page
	PART I. Financial Information
Item 1.	Unaudited Condensed Consolidated Financial Statements and Footnotes	2
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	3428
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	3936
Item 4.	Controls and Procedures	3936
	PART II. Other Information
Item 1.	Legal Proceedings	4037
Item 1A.	Risk Factors	4037
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4139
Item 3.	Defaults Upon Senior Securities	4239
Item 4.	Mine Safety Disclosures	4239
Item 5.	Other Information	4239
Item 6.	Exhibits	4240
	Signatures	4340


Condensed Consolidated Balance Sheets as of ~~September 30, 2020~~March 31, 2021 (unaudited) and June 30, 2020 (audited)	3
Condensed Consolidated Statements of Operations for the Three and Nine Months Ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~ (unaudited)	4
Condensed Consolidated Statement of Changes in Stockholders' Equity (Deficit) for the ~~Three~~Nine Months Ended ~~September 30, 2020~~March 31, 2021 (unaudited)	5
Condensed Consolidated Statement of Changes in Stockholders' Equity (Deficit) for the ~~Three~~Nine Months Ended ~~September 30, 2019~~March 31, 2020 (unaudited)	6
Condensed Consolidated Statements of Cash Flows for the ~~Three~~Nine Months Ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~ (unaudited)	7-8
Notes to the Condensed Consolidated Financial Statements (unaudited)	9


Supplemental and Non Cash Disclosures
Noncash additions related to convertible debt	$ 228,020	$ 268,350
Cash paid for interest	$ 163,314	$ 176,379
Interest on shares issued under Equity Purchase Agreement	$ 6,807,587	$ -
Related party note payable issued for acquisition of business	$ 194,526	$ 1,484,473
Acquisition of goodwill and intangibles	$ 46,869	$ 3,760,287
Stock compensation and stock issued for services	$ 2,778,550	$ 2,055,873
Property leased with financing lease	$ 25,317	$ 37,979
Accretion of discount and change in fair value of derivatives	$ 3,895,991	$ -
Common stock issued in exchange for convertible debt reduction	$ 4,117,650	$ 3,447,912


GALAXY NEXT GENERATION, INC.
Consolidated Statement of Changes in Stockholders' Equity (Deficit)
Three Months Ended September 30, 2020
(Unaudited)
							Total
	Common Stock		Preferred Stock - Class E		Additional	Accumulated	Stockholders'
	Shares	Amount	Shares	Amount	Paid-in Capital	Deficit	Deficit

Balance, July 1, 2020	628,039,242	$ 59,539	500,000	$50	$15,697,140	$(23,496,792)	$ (7,740,063)

Common stock issued for services	103,750,000	10,375	-	-	2,752,625	-	2,763,000

Common stock issued in exchange for debt reduction	968,475,442	96,847	-	-	7,877,359	-	7,974,206

Issuance of common stock to warrant holders	249,792,217	-	-	-	-	-	-

Commitment shares issued	2,500,000	250	-	-	54,750	-	55,000

Common stock issued under Put Purchase Agreement	242,000,000	24,200	-	-	3,927,000	-	3,951,900

Condolidated net loss	-	-	-	-	-	(13,134,778)	(13,134,778)

Balance September 20, 2020	2,194,556,901	$191,211	500,000	$50	$30,309,574	$(36,631,570)	$ (6,130,735)


Supplemental and Non Cash Disclosures
Noncash additions related to convertible debt	$ 34,250	$ 119,986
Cash paid for interest	$ 19,986	$ 129,536
Interest on shares issued under Put Purchase Agreement	$4,006,900	$ -
Related party note payable issued for acquisition of business	$ -	$ 900,000
Settlement of conversion feature	$ -	$ 149,374
Acquisition of goodwill and intangibles	$ -	$3,760,287
Stock compensation and stock issued for services	$2,763,000	$1,327,811
Property leased with financing lease	$ 25,317	$ -
Accretion of discount on convertible notes payable	$1,029,700	$ -
Common stock issued in exchange for convertible debt reduction	$1,799,510	$1,027,765


~~Furniture and fixtures~~	~~5 years~~
~~Equipment~~	~~5 to 10 years~~
~~Vehicles~~	~~5 years~~


Period ending September 30,
2021	$ 347,293
2022	353,660
2023	361,577
2024	276,383
2025	16,890
	$ 1,355,803



Period ending March 31,
2022	$ 387,118
2023	387,118
2024	347,598
2025	187,885
2026	26,209
	$ 1,335,928


Period ending September 30,
2021	$ 570,962

Period ending March 31,
2022	247,194	$ 940,011
2023	42,191	149,076
2024	10,230	26,305
2025	13,017	16,035
2026		14,662
Thereafter	134,982	192,775
	$ 1,018,576	$ 1,338,864


	~~September 30, 2020~~March 31, 2021	June 30, 2020

On March 28, 2019, the Company signed a convertible promissory note with an investor. The $225,000 note was issued at a discount of $20,000 and bears interest at 10% per year. The Company issued 25,000 common shares to the investor. Three draws of $56,250, $112,500, and $56,250 were borrowed under this note. The note principal and interest were convertible into shares of common stock at the lower of (a) 70% of the lowest traded price of the common stock during the 20 trading days immediately preceding the notice of conversion or (b) $3 per share, beginning in September 2019. The note had prepayment penalties ranging from 110% to 125% of the principal and interest outstanding if repaid within 60 to 180 days from issuance. The note matured in three intervals in March 2020, June 2020, and November 2020. The note was repaid by conversion to stock.


	$ -	$24,150



Total Convertible Notes Payable	-	1,989,975
Less: Unamortized original issue discounts	-	888,075
Current Portion of Convertible Notes Payable	-	1,101,900

Long-term Portion of Convertible Notes Payable	$ -	$ -


On March 25, 2020, the Company signed a convertible promissory note with an investor. The $338,625 note was issued at a discount of $23,625 and bears interest at 8% per year. The note principal and interest are convertible into shares of common stock at the lower of (a) $0.46 per share or (b) 75% of the lowest trading price of common stock during the 10 trading days prior to conversion. The note matures in March 2021. The note has prepayment penalties between 120% and 130% of the principal and interest outstanding if repaid before 180 days from issuance. The note was partially repaid by conversion to stock.	75,465	338,625
On June 26, 2020, the Company signed a convertible promissory note with an investor. The $430,000 note was issued at a discount of $30,000 and bears interest at 8% per year. The note principal and interest are convertible into shares of common stock at the lower of (a) $0.47 per share or (b) 70% of the lowest trading price of common stock during the 10 trading days prior to conversion. The note matures in June 2021. The note has prepayment penalties between 120% and 130% of the principal and interest outstanding if repaid before 180 days from issuance.	430,000	430,000
On July 20, 2019, the Company signed a convertible promissory note with an investor. The $125,000 note was issued at a discount of $8,750 and bores interest at 8% per year. The note principal and interest were convertible into shares of common stock at the lower of (a) 80% of the lowest traded price of the common stock during the 10 trading days immediately preceding the notice of conversion or (b) $0.47 per share. The note matured in July 2021. The note had a redemption premium of 115% of the principal and interest outstanding if repaid before maturity. The note is secured by a security interest in all assets of the Company. The note was borrowed and repaid by conversion to stock during the three months ended September 30, 2020.	-	-

On August 18, 2020, the Company signed a convertible promissory note with an investor. The $500,000 note was issued at a discount of $35,000 and bears interest at 8% per year. The note principal and interest are convertible into shares of common stock at the lower of (a) 80% of the lowest traded price of the common stock during the 10 trading days immediately preceding the notice of conversion or (b) $0.47 per share. The note matures in August 2021. The note has a redemption premium of 115% of the principal and interest outstanding if repaid before maturity. The note is secured by a security interest in all assets of the Company. The note was partially repaid by conversion to stock during the three months ended September 30, 2020.	325,000	-



On July 20, 2020, the Company signed a convertible promissory note with an investor. The $134,375 note was issued at a discount of $9,375 and bears interest at 8% per year. The note principal and interest are convertible into shares of common stock at the lower of (a) $0.47 per share or (b) 70% of the lowest trading price of common stock during the 10 trading days prior to conversion. The note matures in July 2021. The note contains a price protection clause where if the share price falls below $0.01 per share after six months, the conversion price discount increases by 5%. The note has prepayment penalties between 120% and 130% of the principal and interest outstanding if repaid before 180 days from issuance.	134,375	-

On July 24, 2020, the Company entered into a $168,300 convertible note. The note was issued at a discount of $15,300 and bears interest at 12% per year. The note principal and interest are convertible into shares of common stock at 71% of the average of the lowest 2 trading prices during 15 trading days prior to conversion. The note matures in July 2021. The note has prepayment penalties of 110% to 125% of the principal and interest outstanding if repaid before 180 days from issuance.	168,300	-

Total Convertible Notes Payable	1,133,140	1,989,975
Less: Unamortized original issue discounts	455,594	888,075
Current Portion of Convertible Notes Payable	677,546	1,101,900

Long-term Portion of Convertible Notes Payable	$ -	$ -



	September 30, 2020	June 30, 2020	March 31, 2021	June 30, 2020
Vehicles	$ 115,135	$ 115,135	$ 115,135	$ 115,135
Equipment	6,097	6,097	22,877	6,097
Furniture and fixtures	24,335	24,335	25,085	24,335
	145,567	145,567	163,097	145,567
Accumulated depreciation	(97,946)	(93,518)	(104,807)	(93,518)

Property and equipment, net	$ 47,621	$ 52,049	$ 58,290	$ 52,049


~~At September 30, 2020~~
At March 31, 2021
	Risk-free interest rate:	~~0.08%~~0.05%
	Expected dividend yield:	0.00%
	Expected stock price volatility:	~~325.00%~~305.00%
	Expected option life in years:	~~0.48~~0.62 to ~~1.44~~0.95 years

At June 30, 2020
	Risk-free interest rate:	0.09%
	Expected dividend yield:	0.00%
	Expected stock price volatility:	300.00%
	Expected option life in years:	~~.085~~.089 to 1.69 years


At September 30, 2020
		Total	Level 1	Level 2	Level 3
Assets
	Customer List	$704,803	-	-	$704,803
	Vendor Relationship	383,203	-	-	383,203
	Development Costs	287,797	-	-	287,797

		$1,355,803	-	-	$1,355,803
Liabilities
	Original Issue discount, convertible debt	$1,276,312	-	-	$1,276,312

At June 30, 2020
		Total	Level 1	Level 2	Level 3
Assets
	Customer list	$748,847	-	-	$748,847
	Vendor relationship	407,153	-	-	407,153
	Development costs	280,315	-	-	280,315

		$1,436,315	-	-	$1,436,315
Liabilities
	Original issue discount, convertible debt	$213,300	-	-	$213,300
	Derivative liability warrants	33,312	-	-	33,312
Total		$246,612	-	-	$246,612



Balance at June 30, 2020	$ 246,612
Additional convertible securities at inception	2,000
Realized	~~(5,300)~~(55,612)
Unrealized		~~1,033,000~~3,183,000
Ending balance at ~~September 30, 2020~~March 31, 2021	$ ~~1,276,312~~3,376,000

Balance at June 30, 2019	$ 1,025,944
Additional convertible securities at inception	2,027,000
Settlement of conversion features and warrants	(152,374)
Realized	(240,903)
Unrealized	(2,413,055)
Ending balance at June 30, 2020	$ 246,612


	September 30, 2020	June 30, 2020
Note payable to a stockholder in which the $200,000 principal plus $10,000 of interest was payable in December 2019. Borrowings under the note increased to $400,000 and the maturity was extended to November 2021. The note bears interest at 6% interest and is payable in cash or common stock, at the Company's option. If interest is paid in common stock, the conversion price will be the market price at the time of conversion. Principal on the note at maturity is convertible into 400,000 shares of Series D Preferred Stock. If principal is paid prior to maturity, the right of conversion is terminated.



	$400,000	$400,000

Fair value of unsecured notes payable to seller of Concepts and Solutions, a related party, bearing interest at 3% per year, payable in annual installments through November 30, 2021. Payments are subject to adjustment based on the achievement of minimum gross revenues and successful completion of certain pre-acquisition withholding tax issues of Concepts and Solutions.	1,030,079	1,030,079

Note payable to a stockholder in which the note principal plus 6% interest is payable in November 2021. Note was amended in March 2020 by increasing the available borrowings to $1,225,000 and extending the maturity to March 2022. Interest is payable in cash or common stock, at the holder's option. If interest is paid in common stock, the conversion price will be the market price at the time of conversion. Principal on the note at maturity is convertible into 1,000,000 shares of Series D Preferred Stock. If principal is paid prior to maturity, the right of conversion is terminated.	1,225,000	1,225,000

Note payable to a stockholder in which the note principal plus 6% interest is payable in November 2021. Interest is payable in cash or common stock, at the Company's option. If interest is paid in common stock, the conversion price will be the market price at the time of conversion. Principal on the note at maturity is convertible into 200,000 shares of Series D Preferred Stock. If principal is paid prior to maturity, the right of conversion is terminated.	200,000	200,000

Note payable to a stockholder in which the note principal plus interest at 10% is payable the earlier of 60 days after invoicing a certain customer, or April 2021, due to an extension granted by the lender. The note is collateralized by a security interest in a certain customer purchase order.	385,000	385,000

Other short term payables due to stockholders and related parties	74,323	107,733


Total Related Party Notes Payable and Other Payables	3,314,402	3,347,812
Current Portion of Related Party Notes Payable and Other Payables	1,239,402	1,272,812

Long-term Portion of Related Party Notes Payable and Other Payables	$2,075,000	$2,075,000


Period ending September 30,
2021		$1,239,402
2022		2,075,000
		$3,314,402



Right-of-use assets:
	Operating right-of-use assets	$~~249,299~~176,624
Operating lease liabilities:
	Current portion of long term payable	~~135,099~~110,099
	Financing leases payable, less current portion	~~114,200~~76,020

	Total financing lease liabilities	$~~249,299~~186,119


Period ending September 30,
2021	$135,099
2022	81,523
2022	32,677

	$249,299
Period ending March 31,
2022		$110,099
2023		76,020

		$186,119



Federal statutory rate		21%
State tax, net of federal tax effect		5.31%
Valuation allowance		-26%
Effective tax rate		0%


		September 30, 2020	June 30, 2020

Federal
	Deferred tax assets	$ 7,216,100	$ 4,825,100
	Less valuation allowance	(7,216,100)	(4,825,100)
	Deferred tax liabilities	-	-
		-	-
State
	Deferred tax assets	1,926,900	1,290,900
	Less valuation allowance	(1,926,900)	(1,290,900)
	Deferred tax liabilities	-	-
		-	-
	Net Deferred Tax Assets	$ -	$ -


~~Assets~~
Assets
	Cash	$ 201,161
	Accounts receivable	1,165,953
	Inventory	94,360
	Property and equipment	20,904
	Other assets	2,800
	Goodwill and other intangibles	3,760,287

	Total Assets	5,245,465

Liabilities
	Accounts payable	1,225,734
	Accrued expenses	783,540
	Short-term debt	96,941
	Deferred revenue	518,900

	Total Liabilities	2,625,115

	Net Assets	$ 2,620,350

Consideration
	Fair value of anti-dilution clause in employment agreement	$ 235,350
	Note payable to seller	900,000
	Stock	1,485,000

		$ 2,620,350


	Assets
			Cash		$ 38,836
			Accounts receivable		31,710
			Inventory		209,431
			Property and equipment		17,530
			Other assets		1,150
			Goodwill and other intangibles		46,869

			Total Assets		$ ~~2,620,350~~345,526
Consideration
		Notes payable to seller and related party of seller		$ 164,526
		Bonus program		30,000
		Stock		151,000
				$ 345,526


Three months ended	September 30, 2019	December 31, 2019	March 31, 2020	September 30, 2020

Revenue	$ 624,897	$ 876,529	$ 349,247	$ 1,178,213

Gross margin	131,218	384,424	218,633	345,036

General and administrative expense, less stock compensation and impairment expenses	796,048	1,805,480	1,662,359	1,392,227

Net Loss less stock compensation and expenses related to convertible notes payable	(661,781)	$(1,421,056)	$(1,443,726)	$(1,047,191)



Three months ended	March 31, 2021	December 31, 2020	September 30, 2020

Revenue	$777,457	$ 798,793	$ 1,178,213
Gross profit	420,726	327,730	345,036
General and administrative expense, less stock compensation and impairment expenses	1,697,410	1,257,118	1,392,227
Net Loss less stock compensation	(1,276,684)	(930,188)	(1,047,191)



Three months ended	March 31, 2021	March 31, 2020
Stock compensation and stock issued for services	$ 2,350	$ 48,034
General and administrative	1,697,410	1,662,359
Asset impairment expense	-	2,000,287
Total General and Administrative Expenses	$ 1,699,760	$ 3,710,670


Three months ended	September 30, 2019	September 30, 2020
General and Administrative Expenses:
Stock compensation and stock issued for services	$ 1,327,811	$ 2,763,000
General and administrative	796,048	1,392,227

Total General and Administrative Expenses	$ 2,123,859	$ 4,155,227


Nine months ended	March 31, 2021	March 31, 2020
Stock compensation and stock issued for services	$ 2,778,550	$ 2,055,726
General and administrative	4,347,555	4,263,887
Asset impairment expense	-	2,000,287
Total General and Administrative Expenses	$ 7,126,105	$ 8,319,900


Exhibit No.	Description
3.1 ~~4.1~~	~~Form~~Amended and Restated Articles of ~~Secured Convertible Debenture (Incorporated~~Incorporation (incorporated herein by reference to Exhibit 3.1 to Amendment No. 1 to the ~~Registrant's Current~~Annual Report on Form ~~8K,~~10-K/A, File No. 000-56006, filed with the Securities and Exchange Commission on October 16, ~~2020)~~ 2020 )
~~10.1~~3.2	~~Amendment to Purchase Agreement dated July 9, 2020 by and between Galaxy Next Generation, Inc. and Tydacso Partners, LLC (Incorporated~~Bylaws (incorporated herein by reference to Exhibit 3.2 to the Registrant's ~~Current Report on~~ Form ~~8K,~~8A-12G, File No. 000-56006, filed with the Securities and Exchange Commission on ~~July 10, 2020)~~December 3, 2018)
3.3 ~~10.2~~	~~Amended and Restated Securities Purchase Agreement, dated as~~Certificate of ~~October 9, 2020, between Galaxy Next Generation, Inc. and YA II PN, LTD (Incorporated~~Designation for Series D Preferred Stock (incorporated herein by reference to Exhibit 3.3 to the ~~Registrant's Current~~Annual Report on Form ~~8K,~~10-K, File No. 000-56006, filed with the Securities and Exchange Commission on ~~October 16,~~filed on September 28, 2020)
~~10.3~~3.4	~~Amended and Restated Security Agreement, dated as~~Certificate of ~~October 9, 2020, by and among Galaxy Next Generation, Inc, Interlock Concepts Inc., Elhert Solutions Group, Galaxy MS, Inc. and YA II PN, LTD. (Incorporated~~Designation for Series E Preferred Stock (incorporated herein by reference to Exhibit 3.4 to the ~~Registrant's Current~~Annual Report on Form ~~8K,~~10-K, File No. 000-56006, filed with the Securities and Exchange Commission on ~~October 16,~~filed on September 28, 2020)
~~10.4~~	Amended and Restated Registration Rights Agreement, dated as of October 9, 2020, between Galaxy Next Generation, Inc. and YA II PN, LTD. (Incorporated by reference to the Registrant's Current Report on Form 8K, File No. 000-56006, filed with the Securities and Exchange Commission on October 16, 2020)
~~10.5~~	Amendment to the Line of Credit dated October 29, 2020*
~~31.1~~31.1*	Certification of CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*2002
~~31.2~~31.2*	Certification of CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*2002
~~32.1~~32.1*	Certification of CEO Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*2002
~~32.2~~32.2*	Certification of CFO Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*2002
101	XBRL Interactive Tables*Tables