Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Jun. 30, 2020 | Oct. 12, 2020 | Dec. 31, 2019 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | NightFood Holdings, Inc. | ||
Entity Central Index Key | 0001593001 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --06-30 | ||
Document Type | 10-K | ||
Document Period End Date | Jun. 30, 2020 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2020 | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
Entity Current Reporting Status | Yes | ||
Entity Shell Company | false | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 65,044,297 | ||
Entity File Number | 333-193347 | ||
Entity Interactive Data Current | Yes | ||
Entity Incorporation Status Country Code | NV | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Public Float | $ 9,690,126 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
Current assets: | ||
Cash | $ 197,622 | $ 30,142 |
Accounts receivable (net of allowance of $0 and $0, respectively) | 61,013 | 45,086 |
Inventories | 275,605 | 406,439 |
Other current assets | 398,085 | 1,000 |
Total current assets | 932,325 | 482,667 |
Total assets | 932,325 | 482,667 |
Current liabilities: | ||
Accounts payable | 1,286,149 | 496,809 |
Accrued expense-related party | 9,974 | 33,974 |
Accrued interest | 192,625 | |
Convertible notes payable-net of debt discounts and unamortized beneficial conversion feature | 2,330,189 | 1,117,741 |
Fair value of derivative liabilities | 1,590,638 | 1,306,748 |
Short-term borrowings- line of credit | 3,897 | |
Total current liabilities | 5,413,472 | 2,955,272 |
Commitments and contingencies | ||
Stockholders' deficit: | ||
Preferred stock, ($0.001 par value, 1,000,000 shares authorized, and 1,000 issued and outstanding as of June 30, 2020 and 2019, respectively) | 1 | 1 |
Common stock, ($0.001 par value, 200,000,000 shares authorized, and 61,796,680 issued and outstanding as of June 30, 2020 and 53,773,856 issued and outstanding as of June 30, 2019, respectively) | 61,797 | 53,774 |
Additional paid in capital | 13,088,177 | 10,692,679 |
Accumulated deficit | (17,631,122) | (13,219,059) |
Total stockholders' deficit | (4,481,147) | (2,472,605) |
Total Liabilities and Stockholders' Deficit | $ 932,325 | $ 482,667 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, net of allowance | $ 0 | $ 0 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 1,000 | 1,000 |
Preferred stock, shares outstanding | 1,000 | 1,000 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 61,796,680 | 53,773,856 |
Common stock, shares outstanding | 61,796,680 | 53,773,856 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Income Statement [Abstract] | ||
Revenues, net of slotting and promotion | $ 241,673 | $ 352,162 |
Operating expenses | ||
Cost of product sold | 472,131 | 190,251 |
Amortization of intangible assets | 500,000 | |
Impairment of intangible assets | 500,000 | |
Advertising and promotional | 403,639 | 732,297 |
Selling, general and administrative | 406,072 | 559,996 |
Professional Fees | 683,706 | 781,178 |
Total operating expenses | 2,965,548 | 2,263,722 |
Loss from operations | (2,723,875) | (1,911,550) |
Other expenses | ||
Interest expense - bank debt | 463 | |
Interest expense - shareholder | 281,387 | 95,805 |
Interest expense - other | 159,572 | 83,223 |
Loss on debt extinguishment upon note conversion, net | 395,781 | |
Change in fair value of derivative liability | (858,774) | 712,627 |
Amortization of Beneficial Conversion Feature | 1,709,759 | 1,794,359 |
Other Expense | 779 | |
Total other expenses | 1,688,188 | 2,686,793 |
Provision for income tax | ||
Net loss | $ (4,412,063) | $ (4,598,343) |
Basic and diluted net loss per common share | $ (0.08) | $ (0.09) |
Weighted average shares of capital outstanding - basic and diluted | 57,443,347 | 47,827,114 |
Statements of Changes in Stockh
Statements of Changes in Stockholders' Deficit - USD ($) | Common Stock | Preferred Stock | Additional Paid-in Capital | Accumulated Deficit | Total |
Balance at Jun. 30, 2018 | $ 42,608 | $ 5,919,152 | $ (8,620,714) | $ (2,658,954) | |
Balance, shares at Jun. 30, 2018 | 42,608,329 | ||||
Common stock issued for services | $ 484 | $ 1 | 345,172 | 345,657 | |
Common stock issued for services, shares | 483,808 | 1,000 | |||
Common stock issued for interest | $ 668 | 95,137 | 95,805 | ||
Common stock issued for interest, shares | 667,959 | ||||
Common stock issued for cash | $ 84 | 49,916 | 50,000 | ||
Common stock issued for cash, shares | 84,389 | ||||
Common stock issued for accounts payable | $ 282 | 63,568 | 63,850 | ||
Common stock issued for accounts payable, shares | 281,957 | ||||
Issuance of warrants | $ 400 | 164,426 | 164,826 | ||
Issuance of warrants, shares | 400,000 | ||||
Issuance of common stock for debt | $ 9,248 | 1,318,705 | 1,327,953 | ||
Issuance of common stock for debt, shares | 9,247,414 | ||||
Loss on fair value of shares issued upon note conversion | 2,736,601 | 2,736,601 | |||
Net loss | (4,598,343) | (4,598,343) | |||
Balance at Jun. 30, 2019 | $ 53,774 | $ 1,000 | 10,692,677 | (13,219,059) | (2,472,605) |
Balance, shares at Jun. 30, 2019 | 53,773,856 | 1 | |||
Balance at Jun. 30, 2019 | $ 53,774 | $ 1,000 | 10,692,677 | (13,219,059) | (2,472,605) |
Balance, shares at Jun. 30, 2019 | 53,773,856 | 1 | |||
Balance at Jun. 30, 2019 | $ 53,774 | $ 1,000 | 10,692,677 | (13,219,059) | (2,472,605) |
Balance, shares at Jun. 30, 2019 | 53,773,856 | 1 | |||
Common stock issued for services | $ 1,386 | 307,382 | 308,768 | ||
Common stock issued for services, shares | 1,385,990 | ||||
Common stock issued for interest | $ 581 | 88,181 | 88,762 | ||
Common stock issued for interest, shares | 580,666 | ||||
Issuance of common stock for debt | $ 6,056 | 954,944 | 961,000 | ||
Issuance of common stock for debt, shares | 6,056,168 | ||||
Issuance of warrants | 67,990 | 67,990 | |||
Loss on fair value of shares issued upon note conversion | 977,000 | 977,000 | |||
Net loss | (4,412,063) | (4,412,063) | |||
Balance at Jun. 30, 2020 | $ 61,797 | $ 1 | $ 13,088,177 | $ (17,631,122) | $ (4,481,147) |
Balance, shares at Jun. 30, 2020 | 61,796,680 | 1,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (4,412,063) | $ (4,598,343) |
Adjustments to reconcile net loss to net cash used in operations activities: | ||
Stock issued for services | 308,768 | 345,656 |
Amortization of debt discount and deferred financing fees | 1,709,759 | 1,794,359 |
Amortization of intangible assets | 500,000 | |
Deferred financing fees and financing cost | 159,572 | |
Warrants issued for services | 67,990 | 44,826 |
Loss on debt extinguishment upon note conversion, net | 395,781 | |
Change in derivative liability | (858,774) | 795,699 |
Stock issued for interest | 88,762 | 95,805 |
Impairment expense | 500,000 | |
Change in operating assets and liabilities: | ||
Accounts receivable | (15,927) | (45,086) |
Inventories | 130,834 | (303,230) |
Other current assets | (397,085) | 2,210 |
Accounts payable | 122,673 | 344,878 |
Accrued expenses | 168,626 | (44,001) |
Net cash used in operating activities | (1,531,084) | (1,567,227) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Cash paid for purchase of intangible asset | (333,333) | |
Net cash provided by investing activities | (333,333) | |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from the sale of common stock | 50,000 | |
Proceeds from the issuance of debt-net | 2,028,000 | 1,602,005 |
Repayment of convertible debt | (102,076) | |
Repayment of short-term debt | 3,897 | (1,000) |
Net cash provided by financing activities | 2,031,897 | 1,548,929 |
NET INCREASE IN CASH AND CASH EQUIVALENTS | 167,480 | 18,298 |
Cash and cash equivalents, beginning of year | 30,142 | 48,440 |
Cash and cash equivalents, end of year | 197,622 | 30,142 |
Cash Paid For: | ||
Interest | ||
Income taxes | ||
Summary of Non-Cash Investing and Financing Information: | ||
Initial derivative liability and Debt discount due to beneficial conversion feature on notes issued | 1,684,711 | 1,482,314 |
Stock issued for conversion of debt | 961,000 | 1,327,953 |
Derivative liability reclassed to loss on extinguishment of debt upon notes conversion | 581,219 | |
Intangible assets acquired and adjusted in accounts payable balance | 666,667 | |
Stock issued for interest | $ 88,762 | $ 95,805 |
Description of Business
Description of Business | 12 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | 1. Description of Business Nightfood Holdings, Inc. (the "Company") is a Nevada Corporation organized October 16, 2013 to acquire all of the issued and outstanding shares of Nightfood, Inc., a New York Corporation from its sole shareholder, Sean Folkson. All of its operations are conducted by its two subsidiaries: Nightfood, Inc. ("Nightfood") and MJ Munchies, Inc.( "Munchies"). Nightfood's business model is to manufacture and distribute ice cream specifically formulated for nighttime snacking to help consumers satisfy nighttime cravings in a better, healthier, more sleep friendly way. Munchies has acquired a portfolio of intellectual property around the brand name Half-Baked, and is seeking to license such property to operating partners in the CBD and marijuana space. ● The Company's fiscal year end is June 30. ● The Company currently maintains its corporate address in Tarrytown, New York. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies ● Management is responsible for the fair presentation of the Company's financial statements, prepared in accordance with U.S. generally accepted accounting principles (GAAP). The consolidated financial statements include the accounts of Nightfood Holdings, Inc. and its wholly owned subsidiaries, NightFood, Inc. and MJ Munchies, Inc. The Company consolidates all majority-owned and controlled subsidiaries in accordance with applicable standards. All material intercompany accounts and balances have been eliminated in consolidation. Use of Estimates ● The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Estimates are used in the determination of beneficial conversion features, derivative liabilities, depreciation and amortization, the valuation for non-cash issuances of common stock, and the website, income taxes and contingencies, among others. Beneficial Conversion Feature ● For conventional convertible debt where the rate of conversion is below market value, the Company records any "beneficial conversion feature" ("BCF") intrinsic value as additional paid in capital and related debt discount. When the Company records a BCF, the relative fair value of the BCF is recorded as a debt discount against the face amount of the respective debt instrument. The discount is amortized over the life of the debt. If a conversion of the underlying debt occurs, a proportionate share of the unamortized amounts is immediately expensed. Debt Issue Costs ● The Company may pay debt issue costs in connection with raising funds through the issuance of debt whether convertible or not or with other consideration. These costs are recorded as debt discounts and are amortized over the life of the debt to the statement of operations as amortization of debt discount. Original Issue Discount ● If debt is issued with an original issue discount, the original issue discount is recorded to debt discount, reducing the face amount of the note and is amortized over the life of the debt to the statement of operations as amortization of debt discount. If a conversion of the underlying debt occurs, a proportionate share of the unamortized amounts is immediately expensed. Valuation of Derivative Instruments ● ASC 815 "Derivatives and Hedging" requires that embedded derivative instruments be bifurcated and assessed, along with free-standing derivative instruments such as warrants, on their issuance date and measured at their fair value for accounting purposes. In determining the appropriate fair value, the Company uses the Black-Scholes option pricing formula. Upon conversion of a note where the embedded conversion option has been bifurcated and accounted for as a derivative liability, the Company records the shares at fair value, relieves all related notes, derivatives and debt discounts and recognizes a net gain or loss on debt extinguishment. Reclassification ● The Company may make certain reclassifications to prior period amounts to conform with the current year's presentation. These reclassifications did not have a material effect on its consolidated statement of financial position, results of operations or cash flows. Recent Accounting Pronouncements The Company reviews all of the Financial Accounting Standard Board's updates periodically to ensure the Company's compliance of its accounting policies and disclosure requirements to the Codification Topics. In May 2014, the Financial Accounting Standards Board (FASB) issued ASU 2014-09, Revenue from Contracts with Customers, to establish ASC Topic 606, (ASC 606). ASU 2014-09 supersedes the revenue recognition requirements in ASC Topic 605, Revenue Recognition and most industry-specific guidance throughout the Industry Topics of the Codification. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance includes a five-step framework that requires an entity to: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when the entity satisfies a performance obligation. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The standard became effective for us beginning on July 1, 2018 and did not have a material impact on our financial statements. In January 2016, the FASB issued ASU 2016-01,Financial Instruments – Overall (Subtopic 825-10) – Recognition and Measurement of Financial Assets and Financial Liabilities, which requires all investments in equity securities with readily determinable fair value to be measured at fair value with changes in the fair value recognized through net income (other than those accounted for under the equity method of accounting or those that result in consolidation of the investee). ASU 2016-01 is intended to enhance the reporting model for financial instruments to provide users of financial statements with more decision-useful information and removes the requirement to disclose the methods and significant assumptions used to estimate the fair value for financial instruments measured at amortized cost on the balance sheet. For public companies, the new standard is effective for annual periods beginning after December 15, 2017, including interim periods within the fiscal year. For all other entities, including emerging growth companies, ASU 2016-01 is effective for annual periods beginning after December 15, 2018, and interim periods within annual periods beginning after December 15, 2019. The Company evaluated the impact on the financial statements and implemented the provisions of ASU 2016-01 for the annual financial statements for the year ended June 30, 2020. This new standard did not have a material impact on our financial statements or related disclosures. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) and subsequently amended the guidance relating largely to transition considerations under the standard in January 2017, to increase transparency and comparability among organizations by requiring the recognition of right-of-use ("ROU") assets and lease liabilities on the balance sheet. Most prominent among the changes in the standard is the recognition of ROU assets and lease liabilities by lessees for those leases classified as operating leases under current U.S. GAAP. Under the standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. We will be required to recognize and measure leases existing at, or entered into after, the beginning of the earliest comparative period presented using a modified retrospective approach, with certain practical expedients available. The standard became effective for us beginning July 1, 2019. We have reviewed this and have determined that there is no material impact on our financial statements. In July 2017, the FASB issued ASU No. 2017-11, Earnings Per Share, Distinguishing Liabilities from Equity and Derivatives and Hedging The . In February 2018, the Financial Accounting Standards Board ("FASB") issued ASC Update No 2018-02 (Topic 220) Income Statement – Reporting Comprehensive Income: Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. This ASC update allows for a reclassification into retained earnings of the stranded tax effects in accumulated other comprehensive income ("AOCI") resulting from the enactment of the Tax Cuts and Jobs Act ("TCJA"). The updated guidance is effective for interim and annual periods beginning after December 15, 2018. We adopted this guidance effective July 1, 2019. The . In June 2018, the FASB issued ASU 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, to expand the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees and supersedes the guidance in Subtopic 505-50, Equity - Equity-Based Payments to Non-Employees. Under ASU 2018-07, equity-classified nonemployee share-based payment awards are measured at the grant date fair value on the grant date The probability of satisfying performance conditions must be considered for equity-classified nonemployee share-based payment awards with such conditions. ASU 2018-07 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. We adopted this guidance effective July 1, 2019. The . In July 2018, the FASB issued ASU 2018-09 to provide clarification and correction of errors to the Codification. The amendments in this update cover multiple Accounting Standards Updates. Some topics in the update may require transition guidance with effective dates for annual periods beginning after December 15, 2018. We adopted this guidance effective July 1, 2019. The . The Company will continue to monitor these emerging issues to assess any potential future impact on its financial statements. Derivative Financial Instruments ● The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks. The Company evaluates all of its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and then is revalued at each reporting date, with changes in fair value reported in the consolidated statement of operations. For stock based derivative financial instruments, Fair value accounting requires bifurcation of embedded derivative instruments such as conversion features in convertible debt or equity instruments, and measurement of their fair value for accounting purposes. In determining the appropriate fair value, the Company uses the Black-Scholes option-pricing model. In assessing the convertible debt instruments, management determines if the convertible debt host instrument is conventional convertible debt and further if there is a beneficial conversion feature requiring measurement. If the instrument is not considered conventional convertible debt, the Company will continue its evaluation process of these instruments as derivative financial instruments. Once determined, derivative liabilities are adjusted to reflect fair value at the end of each reporting period. Any increase or decrease in the fair value from inception is made quarterly and appears in results of operations as a change in fair market value of derivative liabilities. Cash and Cash Equivalents ● The Company classifies as cash and cash equivalents amounts on deposit in the banks and cash temporarily in various instruments with original maturities of three months or less at the time of purchase. Fair Value of Financial Instruments ● Statement of financial accounting standard FASB Topic 820, Disclosures about Fair Value of Financial Instruments, requires that the Company disclose estimated fair values of financial instruments. The carrying amounts reported in the statements of financial position for assets and liabilities qualifying as financial instruments are a reasonable estimate of fair value. Inventories ● Inventories consisting of packaged food items and supplies are stated at the lower of cost (FIFO) or net realizable value, including provisions for spoilage commensurate with known or estimated exposures which are recorded as a charge to cost of sales during the period spoilage is incurred. Advertising Costs ● Advertising costs are expensed when incurred and are included in advertising and promotional expense in the accompanying statements of operations. Included in this category are expenses related to public relations, investor relations, new package design, website design, design of promotional materials, cost of trade shows, cost of products given away as promotional samples, and paid advertising. The Company recorded advertising costs of $403,639 and $732,297 for the years ended June 30, 2020 and 2019, respectively. Income Taxes ● The Company has not generated any taxable income, and, therefore, no provision for income taxes has been provided. ● Deferred income taxes are reported for timing differences between items of income or expense reported in the financial statements and those reported for income tax purposes in accordance with FASB Topic 740, "Accounting for Income Taxes", which requires the use of the asset/liability method of accounting for income taxes. Deferred income taxes and tax benefits are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and for tax loss and credit carry-forwards. 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 be recovered or settled. The Company provides for deferred taxes for the estimated future tax effects attributable to temporary differences and carry-forwards when realization is more likely than not. ● A valuation allowance has been recorded to fully offset the deferred tax asset even though the Company believes it is more likely than not that the assets will be utilized. ● The Company's effective tax rate differs from the statutory rates associated with taxing jurisdictions because of permanent and temporary timing differences as well as a valuation allowance. Revenue Recognition ● The Company generates its revenue by selling its nighttime snack products wholesale and direct to consumer. ● All sources of revenue are recorded pursuant to FASB Topic 606 Revenue Recognition, to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This includes a five-step framework that requires an entity to: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when the entity satisfies a performance obligation. In addition, this revenue generation requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. ● The Company offers sales incentives through various programs, consisting primarily of advertising related credits. The Company records advertising related credits with customers as a reduction to revenue as no identifiable benefit is received in exchange for credits claimed by the customer. ● The Company revenue from contracts with customers provides that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company incurs costs associated with product distribution, such as freight and handling costs. The Company has elected to treat these costs as fulfillment activities and recognizes these costs at the same time that it recognizes the underlying product revenue. As this policy election is in line with the Company's previous accounting practices, the treatment of shipping and handling activities under FASB Topic 606 did not have any impact on the Company's results of operations, financial condition and/or financial statement disclosures. The adoption of ASC 606 did not result in a change to the accounting for any of the Company's revenue streams that are within the scope of the amendments. The Company's services that fall within the scope of ASC 606 are recognized as revenue as the Company satisfies its obligation to the customer. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which updates revenue recognition guidance relating to contracts with customers. This standard states that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This standard is effective for annual reporting periods, and interim periods therein, beginning after July 1, 2018. The Company adopted ASU 2014-09 and its related amendments (collectively known as "ASC 606") during the first quarter of fiscal 2019 using the full retrospective method. Management reviewed ASC 606-10-32-25 which states "Consideration payable to a customer includes cash amounts that an entity pays, or expects to pay, to the customer (or to other parties that purchase the entity's goods or services from the customer). Consideration payable to a customer also includes credit or other items (for example, a coupon or voucher) that can be applied against amounts owed to the entity (or to other parties that purchase the entity's goods or services from the customer). An entity shall account for consideration payable to a customer as a reduction of the transaction price and, therefore, of revenue unless the payment to the customer is in exchange for a distinct good or service (as described in paragraphs 606-10-25-18 through 25-22) that the customer transfers to the entity. If the consideration payable to a customer includes a variable amount, an entity shall estimate the transaction price (including assessing whether the estimate of variable consideration is constrained) in accordance with paragraphs 606-10-32-5 through 32-13." If the consideration payable to a customer is a payment for a distinct good service, then in accordance with ASC 606-10-32-26, the entity should account for it the same way that it accounts for other purchases from suppliers (expense). Further, "if the amount of consideration payable to the customer exceeds the fair value of the distinct good or service that the entity receives from the customer, then the entity shall account for such an excess as a reduction of the transaction price. If the entity cannot reasonably estimate the fair value of the good or service received from the customer, it shall account for all of the consideration payable to the customer as a reduction of the transaction price." Under ASC 606-10-32-27, if the consideration payable to a customer is accounted for as a reduction of the transaction price, "an entity shall recognize the reduction of revenue when (or as) the later of either of the following events occurs: a) The entity recognizes revenue for the transfer of the related goods or services to the customer. b) The entity pays or promises to pay the consideration (even if the payment is conditional on a future event). That promise might be implied by the entity's customary business practices." Management reviewed each arrangement to determine if each fee paid is for a distinct good or service and should be expensed as incurred or if the Company should recognize the payment as a reduction of revenue. The Company recognizes revenue upon shipment based on meeting the transfer of control criteria. The Company has made a policy election to treat shipping and handling as costs to fulfill the contract, and as a result, any fees received from customers are included in the transaction price allocated to the performance obligation of providing goods with a corresponding amount accrued within cost of sales for amounts paid to applicable carriers. Concentration of Credit Risk ● Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash deposits at financial institutions. At various times during the year, the Company may exceed the federally insured limits. To mitigate this risk, the Company places its cash deposits only with high credit quality institutions. Management believes the risk of loss is minimal. At June 30, 2020 and 2019 the Company did not have any uninsured cash deposits. Receivables Concentration ● As of June 30, 2020, the Company had receivables due from seven customers, two of whom accounted for over 20% of the outstanding balance. Four of the other five accounted for over 10% of the total balance. As of June 30, 2019, the Company had receivables due from six customers, three of whom accounted for over 20% of the outstanding balance. Beneficial Conversion Feature ● For conventional convertible debt where the rate of conversion is below market value, the Company records any "beneficial conversion feature" ("BCF") intrinsic value as additional paid in capital and related debt discount. When the Company records a BCF, the relative fair value of the BCF is recorded as a debt discount against the face amount of the respective debt instrument. The discount is amortized over the life of the debt. If a conversion of the underlying debt occurs, a proportionate share of the unamortized amounts is immediately expensed. Debt Issue Costs ● The Company may pay debt issue costs in connection with raising funds through the issuance of debt whether convertible or not or with other consideration. These costs are recorded as debt discounts and are amortized over the life of the debt to the statement of operations as amortization of debt discount. Original Issue Discount ● If debt is issued with an original issue discount, the original issue discount is recorded to debt discount, reducing the face amount of the note and is amortized over the life of the debt to the statement of operations as amortization of debt discount. If a conversion of the underlying debt occurs, a proportionate share of the unamortized amounts is immediately expensed. Valuation of Derivative Instruments ● ASC 815 "Derivatives and Hedging" requires that embedded derivative instruments be bifurcated and assessed, along with free-standing derivative instruments such as warrants, on their issuance date and measured at their fair value for accounting purposes. In determining the appropriate fair value, the Company uses the Black-Scholes option pricing formula. Upon conversion of a note where the embedded conversion option has been bifurcated and accounted for as a derivative liability, the Company records the shares at fair value, relieves all related notes, derivatives and debt discounts and recognizes a net gain or loss on debt extinguishment. Income Per Share ● Net income per share data for both the years ending June 30, 2020 and 2019, is based on net income available to common shareholders divided by the weighted average of the number of common shares outstanding. Impairment of Long-lived Assets ● The Company accounts for long-lived assets in accordance with the provisions of FASB Topic 360, Accounting for the Impairment of Long-Lived Assets. This statement requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. Fair values are determined based on quoted market value, discounted cash flows or internal and external appraisals, as applicable. During the years ended June 30, 2020 and 2019, the Management determined and impaired $500,000 and $-0-, respectively as impairment on intangible asset ASC 350-50-05-01 states " on accounting for costs incurred to develop a website, including whether to capitalize or expense the following types of costs: a) Costs incurred in the planning stage b) Costs incurred in the website application and infrastructure development stage c) Costs incurred to develop graphics d) Costs incurred to develop content e) Costs incurred in the operating stage." ASC 350-50-25-6 states "Costs incurred to purchase software tools, or costs incurred during the application development stage for internally developed tools, shall be capitalized unless they are used in research and development and meet either of the following conditions: a) They do not have any alternative future uses. b) They are internally developed and represent a pilot project or are being used in a specific research and development project (see paragraph 350-40-15-7)." Further, at ASC 350-50-25-7, "Costs to obtain and register an Internet domain shall be capitalized under Section 350-30-25." During the years ended June 30, 2020 and 2019, the Management determined and capitalized $1,000,000 and $-0-, respectively, under ASC 350-50 and accounted as an intangible asset and amortized the costs over the life of the relationship. Derivative Financial Instruments ● The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks. The Company evaluates all of its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and then is revalued at each reporting date, with changes in fair value reported in the consolidated statement of operations. For stock based derivative financial instruments, fair value accounting requires bifurcation of embedded derivative instruments such as conversion features in convertible debt or equity instruments, and measurement of their fair value for accounting purposes. In determining the appropriate fair value, the Company uses the Black-Scholes option-pricing model. In assessing the convertible debt instruments, management determines if the convertible debt host instrument is conventional convertible debt and further if there is a beneficial conversion feature requiring measurement. If the instrument is not considered conventional convertible debt, the Company will continue its evaluation process of these instruments as derivative financial instruments. Once determined, derivative liabilities are adjusted to reflect fair value at the end of each reporting period. Any increase or decrease in the fair value from inception is made quarterly and appears in results of operations as a change in fair market value of derivative liabilities. Restatement of Prior Financial Information Subsequent to Form 10K for the year ended June 30, 2019 filing, during the interims review and based on such reviews, the following determinations were made by the Company: Error in Accounting for Slotting and Set-up Fees During our review, we determined that the accounting treatment for the recognition of slotting fees and other fees paid or payable by the Company to certain strategic partners was incorrect. Specifically, it has been determined that revenue relating to the slotting fee, which was originally capitalized and amortized into expense over an 18-month period should instead be treated as a reduction in revenue at the later of recognition of revenue for the transfer of the Nightfood product or when the Company pays or promised to pay the slotting fee. In addition, certain fees related to platforms to launch our products and advertising efforts should have been capitalized and recorded as an intangible asset. The Company previously recorded a portion of this fee as an intangible asset – placement fee and expensed the remaining amount as advertising expense in the Period Ended December 31, 2019. In accordance with the guidance provided by the SEC's Staff Accounting Bulletin 99, Materiality Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements As of June 30, 2019 (A) Previously Adjustments As Corrected Consolidated Balance Sheet Current assets $ 482,667 $ 487,500 $ 970,167 Current liabilities $ 2,955,272 $ 223,333 $ 3,178,605 Working capital (deficit) $ (2,472,605 ) $ 264,167 $ (2,208,438 ) Total assets $ 482,667 $ 487,500 $ 970,167 Total liabilities $ 2,955,272 $ 223,333 $ 3,178,605 Total stockholders' deficit $ (2,472,605 ) $ 264,167 $ (2,208,438 ) (A) The balance sheet impact of the errors was corrected in the quarter ended September 30, 2019. As of September 30, 2019 Previously Adjustments As Corrected Consolidated Balance Sheet Current assets $ 858,216 $ 387,917 $ 1,246,133 Current liabilities $ 3,287,252 $ 1,151,666 $ 4,438,918 Working capital (deficit) $ (2,429,036 ) $ (763,749 ) $ (3,192,785 ) Total assets $ 858,216 $ 1,221,250 $ 2,079,466 Total liabilities $ 3,287,252 $ 1,151,666 $ 4,438,918 Total stockholders' deficit $ (2,429,036 ) $ 69,584 $ (2,359,452 ) As of December 31, 2019 Previously Adjustments As Corrected Consolidate Balance Sheet Current assets $ 577,944 $ 408,294 $ 986,238 Current liabilities $ 4,514,446 $ 249,007 $ 4,763,453 Working capital (deficit) $ (3,936,502 ) $ 159,287 $ (3,777,215 ) Total assets $ 1,550,298 $ 102,607 $ 1,652,905 Total liabilities $ 4,514,446 $ 249,007 $ 4,763,453 Total stockholders' deficit $ (2,964,148 ) $ (146,400 ) $ (3,110,548 ) For the Year Ended June 30, 2019 (A) Previously Reported Adjustments As Corrected Consolidated Statements of Operations Revenues $ 352,172 $ - $ 352,172 Operating expenses $ 2,263,722 $ (264,167 ) $ 1,999,555 Loss from operations $ (1,911,550 ) $ 264,167 $ (1,647,383 ) Other income (expenses) $ 2,686,793 $ - $ 2,686,793 Net income (loss) $ (4,598,343 ) $ 264,167 $ (4,334,176 ) Basic & diluted EPS $ (0.09 ) $ - $ (0.09 ) (A) The income statement impact of the errors was corrected in the quarter ended September 30, 2019. For the Three Months Ended September 30, 2019 Previously Reported Adjustments As Corrected Consolidated Statements of Operations Revenues $ 206,497 $ (160,000 ) $ 46,497 Operating expenses $ 570,858 $ (229,584 ) $ 341,274 Loss from operations $ (364,361 ) $ 69,584 $ (294,777 ) Other income (expenses) $ 218,803 $ - $ 218,803 Net income (loss) $ (583,164 ) $ 69,584 $ (513,580 ) Basic & diluted EPS $ (0.01 ) $ - $ (0.01 ) For the Six Months Ended December 31, 2019 Previously Reported Adjustments As Corrected Consolidated Statements of Operations Revenues $ 379,488 $ (271,706 ) $ 107,782 Operating expenses $ 1,326,290 $ (125,306 ) $ 1,200,984 Loss from operations $ (946,802 ) $ (146,400 ) $ (1,093,202 ) Other income (expenses) $ 557,320 $ - $ 557,320 Net income (loss) $ (1,504,122 ) $ (146,400 ) $ (1,650,522 ) Basic & diluted EPS $ (0.02 ) $ - $ (0.02 ) For the Three Months Ended December 31, 2019 Previously Reported Adjustments As Corrected Consolidated Statements of Operations Revenues $ 172,991 $ (111,706 ) $ 61,285 Operating expenses $ 755,432 $ 104,278 $ 859,710 Loss from operations $ (582,441 ) $ (215,984 ) $ (798,425 ) Other income (expenses) $ 338,517 $ - $ 338,517 Net income (loss) $ (920,958 ) $ (215,984 ) $ (1,136,942 ) Basic & diluted EPS $ (0.02 ) $ - $ (0.02 ) |
Going Concern
Going Concern | 12 Months Ended |
Jun. 30, 2020 | |
Going Concern [Abstract] | |
Going Concern | 3. Going Concern ● The Company's financial statements are prepared using generally accepted accounting principles, which contemplate the realization of assets and liquidation of liabilities in the normal course of business. Because the business is new and has limited operating history and relatively few sales, no certainty of continuation can be stated. ● The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. For the year ended June 30, 2020, the Company had a net loss of $4,412,063, negative cash flow from operations of $1,531,084 and accumulated deficit of $17,631,122. Management is taking steps to raise additional funds to address its operating and financial cash requirements to continue operations in the next twelve months. Management has devoted a significant amount of time in the raising of capital from additional debt and equity financing. However, the Company's ability to continue as a going concern is dependent upon raising additional funds through debt and equity financing and generating revenue. There are no assurances the Company will receive the necessary funding or generate revenue necessary to fund operations. The Company has limited available cash resources and we do not believe our cash on hand will be adequate to satisfy our ongoing working capital needs. The Company is continuing to raise capital through private placement of our common stock and through the use of convertible notes to finance the Company's operations, of which it can give no assurance of success. However, the Company has a strong ongoing relationship with Eagle Equities and we expect to be able to continue to finance our operations as we have over the previous several quarters, although no assurance can be guaranteed. We believe that our current capitalization structure, combined with ongoing increases in revenues, will enable us to successfully secure required financing to continue our growth. In the short term, the Company plans to continue to take advantage of convertible notes as a financing vehicle, as it allows for today's operating capital to be either repaid, or converted to equity at future valuations. Because the business is new and has limited operating history and sales, no certainty of continuation can be stated. Management has devoted a significant amount of time in the raising of capital from additional debt and equity financing. However, the Company's ability to continue as a going concern is dependent upon raising additional funds through debt and equity financing and generating revenue. There are no assurances the Company will receive the necessary funding or generate revenue necessary to fund operations. Even if the Company is successful in raising additional funds, the Company cannot give any assurance that it will, in the future, be able to achieve a level of profitability from the sale of its products to sustain its operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The accompanying financial statements do not include any adjustments to reflect the possible future effects on recoverability and reclassification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty. Further, we are subject to the continued impact of COVID-19, as further discussed below. See footnote 18. |
Accounts Receivable
Accounts Receivable | 12 Months Ended |
Jun. 30, 2020 | |
Receivables [Abstract] | |
Accounts receivable | 4. Accounts receivable ● The Company's accounts receivable arise primarily from the sale of the Company's snack products. On a periodic basis, the Company evaluates each customer account and based on the days outstanding of the receivable, history of past write-offs, collections, and current credit conditions, writes off accounts it considers uncollectible. With most of our retail and distribution partners, invoices will typically be due in 30 days or less. The Company does not accrue interest on past due accounts and the Company does not require collateral. Accounts become past due on an account-by-account basis. Determination that an account is uncollectible is made after all reasonable collection efforts have been exhausted. The Company has not provided any sales allowances for June 30, 2020 and 2019, respectively. |
Customer Concentrations
Customer Concentrations | 12 Months Ended |
Jun. 30, 2020 | |
Customer Concentrations [Abstract] | |
Customer Concentrations | 5. Customer Concentrations ● During the year ended June 30, 2020, one customer accounted for greater than 10% of gross sales. As of June 30, 2020, the Company had receivables due from seven customers, two of whom accounted for over 20% of the outstanding balance. Four of the other five accounted for over 10% of the total balance. As of June 30, 2019, the Company had receivables due from six customers, three of whom accounted for over 20% of the outstanding balance. |
Inventories
Inventories | 12 Months Ended |
Jun. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories | 6. Inventories ● Inventories consists of the following at June 30, 2020 and 2019. 2020 2019 Finished Goods-bars $ - $ 30,800 Finished Goods-ice cream 195,817 346,229 Raw materials - ingredients 26,309 25,477 Packaging 53,479 3,933 TOTAL $ 275,605 $ 406,439 Inventories are stated at the lower of cost (FIFO) or net realizable value. The Company periodically reviews the value of items in inventory and provides write-downs or write-offs of inventory based on its assessment of market conditions and the products relative shelf life. Write-downs and write-offs are charged to loss on inventory write down. |
Other Current Assets
Other Current Assets | 12 Months Ended |
Jun. 30, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Current Assets | 7. Other current assets ● Other current assets consist of the following vendor deposits at June 30, 2020 and 2019. The majority of this amount relates to deposits towards distribution and marketing partnerships i.e. slotting fees. June 30, June 30, Prepaid advertising costs $ 398,045 $ - Vendor deposits – Other $ 40 $ 1,000 TOTAL $ 398,085 $ 1,000 |
Intangible Assets
Intangible Assets | 12 Months Ended |
Jun. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | 8 . Intangible Assets Intangible assets consist of the following at June 30, 2020 and 2019. The amount of the intangible assets represents fees and expenses in connection with the development and launch of platforms used to track conversions, optimize ads, and scale online customer growth through a hybrid distribution model. June 30, June 30, 2020 2019 Intangible assets $ 1,000,000 $ - Amortization of intangible assets (500,000 ) - Impairment of intangible assets (500,000 ) TOTAL $ - $ - During the quarter ending March 31, 2020, the Company determined it would be unable to generate sufficient traction from these digital assets. The Company made the decision to stop utilizing the assets and began conversations with the creditor about eliminating the remaining debt associated with the assets which was successfully negotiated in April 2020. As of the time of this filing, the balance sheet remains unchanged, as this successful renegotiation is conditional upon payment being completed prior to December 1, 2020, which would result in the elimination of $731,118 in total debt should payment be made totaling $166,224 in cash and approximately 4,000 pints of Nightfood ice cream. Should the Company make said payments and retire the debt prior to December 1, 2020, the Company would realize a Gain on Extinguishment of Debt of approximately $560,000. Because this reduction in debt is conditional, the full $731,118.33 is currently included in the liabilities section of our balance sheet. |
Other Current Liabilities
Other Current Liabilities | 12 Months Ended |
Jun. 30, 2020 | |
Other Current Liabilities [Abstract] | |
Other Current Liabilities | 9. Other Current Liabilities ● Other current liabilities consist of the following at June 30, 2020 and 2019. 2020 2019 Accrued consulting fees – related party $ 9,974 $ 33,974 Accrued interest 192,625 - TOTAL $ 202,599 $ 33,974 |
Convertible Notes Payable
Convertible Notes Payable | 12 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Convertible Notes Payable | 10. Convertible Notes Payable ● Convertible Notes Payable consist of the following at June 30, 2020 and 2019. On April 30, 2018, the Company entered into a convertible promissory note and a security purchase agreement dated April 30, 2018, in the amount of $225,000. The lender was Eagle Equities, LLC. The notes have a maturity of April 30, 2019 and interest rate of 8% per annum and are convertible at a price of 60% of the lowest closing bid price on the primary trading market on which the Company's Common Stock is then listed for the fifteen (15) trading days immediately prior to conversion. The note may be prepaid, but carries a penalty in association with the remittance amount, as there is an accretion component to satisfy the note with cash. The convertible note qualifies for derivative accounting and bifurcation under ASC 815, "Derivatives and Hedging." The fair value of the $225,000 Notes was calculated using the Black-Scholes pricing model at $287,174, with the following assumptions: risk-free interest rate of 2.24%, expected life of 1 year, volatility of 202%, and expected dividend yield of zero. Because the fair value of the note exceeded the net proceeds from the $225k Notes, a charge was recorded to "Financing cost" for the excess of the fair value of the note, for a net charge of $62,174. As of June 30, 2020 and 2019, the debt discount was $0. On June 5, 2018, the Company received cash in conjunction with a convertible promissory note and Securities Purchase Agreement dated June 5, 2018. The note was in the amount of in the amount of $210,000. The lender was Eagle Equities, LLC. The notes have a maturity of June 6, 2019 and interest rate of 8% per annum and are convertible at a price of 60% of the lowest closing bid price on the primary trading market on which the Company's Common Stock is then listed for the fifteen (15) trading days immediately prior to conversion. The note may be prepaid, but carries a penalty in association with the remittance amount, as there is an accretion component to satisfy the note with cash. The convertible note qualifies for derivative accounting and bifurcation under ASC 815, "Derivatives and Hedging." The fair value of the $210,000 Notes was calculated using the Black-Scholes pricing model at $265,498, with the following assumptions: risk-free interest rate of 2.09%, expected life of 1 year, volatility of 200%, and expected dividend yield of zero. Because the fair value of the note exceeded the net proceeds from the $210k Notes, a charge was recorded to "Financing cost" for the excess of the fair value of the note, for a net charge of $55,498. As of June 30, 2020, and 2019, the debt discount was $0. This note has been successfully retired via conversions into shares during the year ended June 30, 2020. The Company fair valued the notes as of conversion date and accounted for a loss on conversion of $180,755 included under line item "Loss on debt extinguishment upon note conversion, net". On July 2, 2018, the Company entered into a convertible promissory note and a security purchase agreement dated July 12, 2018, in the amount of $207,000. The lender was Eagle Equities, LLC. The notes have a maturity of July 12, 2019 and interest rate of 8% per annum and are convertible at a price of 60% of the lowest closing bid price on the primary trading market on which the Company's Common Stock is then listed for the fifteen (15) trading days immediately prior to conversion. The note may be prepaid, but carries a penalty in association with the remittance amount, as there is an accretion component to satisfy the note with cash The convertible note qualifies for derivative accounting and bifurcation under ASC 815, "Derivatives and Hedging." The fair value of the $207,000 Notes was calculated using the Black-Scholes pricing model at $257,842, with the following assumptions: risk-free interest rate of 2.59%, expected life of 1 year, volatility of 183%, and expected dividend yield of zero. Because the fair value of the note exceeded the net proceeds from the $207k Notes, a charge was recorded to "Financing cost" for the excess of the fair value of the note, for a net charge of $50,842. As of June 30, 2020, and 2019, the debt discount was $0 and $1,134, respectively. This note has been successfully retired via conversions into shares during the year ended June 30, 2020. The Company fair valued the notes as of conversion date and accounted for a loss on conversion of $73,760 included under line item "Loss on debt extinguishment upon note conversion, net". On November 16, 2018, the Company entered into a convertible promissory note and a security purchase agreement dated November 16, 2018, in the amount of $130,000. The lender was Eagle Equities, LLC. The notes have a maturity of November 16, 2019 and interest rate of 8% per annum and are convertible at a price of 65% of the lowest closing bid price on the primary trading market on which the Company's Common Stock is then listed for the fifteen (15) trading days immediately prior to conversion. The note may be prepaid, but carries a penalty in association with the remittance amount, as there is an accretion component to satisfy the note with cash. The convertible note qualifies for derivative accounting and bifurcation under ASC 815, "Derivatives and Hedging." The fair value of the $130,000 Notes was calculated using the Black-Scholes pricing model at $131,898, with the following assumptions: risk-free interest rate of 2.71%, expected life of 1 year, volatility of 150%, and expected dividend yield of zero. Because the fair value of the note exceeded the net proceeds from the $130k Notes, a charge was recorded to "Financing cost" for the excess of the fair value of the note, for a net charge of $1,898. As of June 30, 2020, and 2019, the debt discount was $0 and $48,795, respectively. This note has been successfully retired via conversions into shares during the year ended June 30, 2020. The Company fair valued the notes as of conversion date and accounted for a loss on conversion of $19,845 included under line item "Loss on debt extinguishment upon note conversion, net". On December 18, 2018, the Company entered into a convertible promissory note and a security purchase agreement dated December 18, 2018, in the amount of $130,000. The lender was Eagle Equities, LLC. The notes have a maturity of December 18, 2019 and interest rate of 8% per annum and are convertible at a price of 65% of the lowest closing bid price on the primary trading market on which the Company's Common Stock is then listed for the fifteen (15) trading days immediately prior to conversion. The note may be prepaid, but carries a penalty in association with the remittance amount, as there is an accretion component to satisfy the note with cash. The convertible note qualifies for derivative accounting and bifurcation under ASC 815, "Derivatives and Hedging." The fair value of the $130,000 Notes was calculated using the Black-Scholes pricing model at $128,976, with the following assumptions: risk-free interest rate of 2.64%, expected life of 1 year, volatility of 144%, and expected dividend yield of zero. Because the fair value of the note did not exceed the net proceeds from the $130k Notes, no charge was recorded to "Financing cost" for the excess of the fair value of the note. As of June 30, 2020, and 2019, the debt discount was $0 and $60,425, respectively This note has been successfully retired via conversions into shares during the year ended June 30, 2020. The Company fair valued the notes as of conversion date and accounted for a loss on conversion of $36,927 included under line item "Loss on debt extinguishment upon note conversion, net". On January 28, 2019, the Company entered into a convertible promissory note and a security purchase agreement dated January 28, 2019, in the amount of $234,000. The lender was Eagle Equities, LLC. The notes have a maturity of January 28, 2020 and interest rate of 8% per annum and are convertible at a price of 65% of the lowest closing bid price on the primary trading market on which the Company's Common Stock is then listed for the fifteen (15) trading days immediately prior to conversion. The note may be prepaid, but carries a penalty in association with the remittance amount, as there is an accretion component to satisfy the note with cash. The convertible note qualifies for derivative accounting and bifurcation under ASC 815, "Derivatives and Hedging." The fair value of the $234,000 Notes was calculated using the Black-Scholes pricing model at $226,452, with the following assumptions: risk-free interest rate of 2.60%, expected life of 1 year, volatility of 135%, and expected dividend yield of zero. Because the fair value of the note did not exceed the net proceeds from the $234k Notes, no charge was recorded to "Financing cost" for the excess of the fair value of the note. As of June 30, 2020, and 2019, the debt discount was $0 and $131,528, respectively. This note has been successfully retired via conversions into shares during the year ended June 30, 2020. The Company fair valued the notes as of conversion date and accounted for a loss on conversion of $80,394 included under line item "Loss on debt extinguishment upon note conversion, net". On February 14, 2019, the Company entered into a convertible promissory note and a security purchase agreement dated February 14, 2019, in the amount of $104,000. The lender was Eagle Equities, LLC. The notes have a maturity of February 14, 2020 and interest rate of 8% per annum and are convertible at a price of 70% of the lowest closing bid price on the primary trading market on which the Company's Common Stock is then listed for the fifteen (15) trading days immediately prior to conversion. The note may be prepaid, but carries a penalty in association with the remittance amount, as there is an accretion component to satisfy the note with cash. The convertible note qualifies for derivative accounting and bifurcation under ASC 815, "Derivatives and Hedging." The fair value of the $104,000 Notes was calculated using the Black-Scholes pricing model at $90,567, with the following assumptions: risk-free interest rate of 2.53%, expected life of 1 year, volatility of 136%, and expected dividend yield of zero. Because the fair value of the note did not exceed the net proceeds from the $104k Notes, no charge was recorded to "Financing cost" for the excess of the fair value of the note. As of June 30, 2020, and 2019, the debt discount was $0 and $56,821, respectively. $50,000 of the note has been successfully retired via conversion into shares during the year ended June 30, 2020. The Company fair valued the notes as of conversion date and accounted for a loss on conversion of $4,098 included under line item "Loss on debt extinguishment upon note conversion, net". On April 29, 2019, the Company entered into a convertible promissory note and a security purchase agreement dated April 29, 2019, in the amount of $208,000. The lender was Eagle Equities, LLC. The notes have a maturity of April 29, 2020 and interest rate of 8% per annum and are convertible at a price of 70% of the lowest closing bid price on the primary trading market on which the Company's Common Stock is then listed for the fifteen (15) trading days immediately prior to conversion. The note may be prepaid, but carries a penalty in association with the remittance amount, as there is an accretion component to satisfy the note with cash. The convertible note qualifies for derivative accounting and bifurcation under ASC 815, "Derivatives and Hedging." The fair value of the $208,000 Notes was calculated using the Black-Scholes pricing model at $170,098, with the following assumptions: risk-free interest rate of 2.42%, expected life of 1 year, volatility of 118%, and expected dividend yield of zero. Because the fair value of the note did not exceed the net proceeds from the 208k Notes, no charge was recorded to "Financing cost" for the excess of the fair value of the note. As of June 30, 2020, and 2019, the debt discount was $0 and $141,204, respectively On June 11, 2019, the Company entered into a convertible promissory note and a security purchase agreement dated June 11, 2019, in the amount of $300,000. The lender was Eagle Equities, LLC. The notes have a maturity of June 11, 2020 and interest rate of 8% per annum and are convertible at a price of 70% of the lowest closing bid price on the primary trading market on which the Company's Common Stock is then listed for the fifteen (15) trading days immediately prior to conversion. The note may be prepaid, but carries a penalty in association with the remittance amount, as there is an accretion component to satisfy the note with cash. The convertible note qualifies for derivative accounting and bifurcation under ASC 815, "Derivatives and Hedging." The fair value of the $300,000 Notes was calculated using the Black-Scholes pricing model at $240,217, with the following assumptions: risk-free interest rate of 2.05%, expected life of 1 year, volatility of 16%, and expected dividend yield of zero. Because the fair value of the note did not exceed the net proceeds from the $300k Notes, no charge was recorded to "Financing cost" for the excess of the fair value of the note. As of June 30, 2020, and 2019, the debt discount was $0 and $227,713, respectively. On July 5, 2019, the Company entered into a convertible promissory note and a security purchase agreement dated July 5, 2019, in the amount of $300,000. The lender was Eagle Equities, LLC. The notes have a maturity of July 5, 2020 and interest rate of 8% per annum and are convertible at a price of 70% of the lowest closing bid price on the primary trading market on which the Company's Common Stock is then listed for the fifteen (15) trading days immediately prior to conversion. The note may be prepaid, but carries a penalty in association with the remittance amount, as there is an accretion component to satisfy the note with cash. The convertible note qualifies for derivative accounting and bifurcation under ASC 815, "Derivatives and Hedging." The fair value of the $300,000 Notes was calculated using the Black-Scholes pricing model at $239,759, with the following assumptions: risk-free interest rate of 1.98%, expected life of 1 year, volatility of 118%, and expected dividend yield of zero. Because the fair value of the note did not exceed the net proceeds from the 300k Notes, no charge was recorded to "Financing cost" for the excess of the fair value of the note. As of June 30, 2020, the debt discount was $2,627. On August 8, 2019, the Company entered into a convertible promissory note and a security purchase agreement dated August 8, 2019, in the amount of $300,000. The lender was Eagle Equities, LLC. The notes have a maturity of August 8, 2020 and interest rate of 8% per annum and are convertible at a price of 70% of the lowest closing bid price on the primary trading market on which the Company's Common Stock is then listed for the fifteen (15) trading days immediately prior to conversion. The note may be prepaid, but carries a penalty in association with the remittance amount, as there is an accretion component to satisfy the note with cash. The convertible note qualifies for derivative accounting and bifurcation under ASC 815, "Derivatives and Hedging." The fair value of the $300,000 Notes was calculated using the Black-Scholes pricing model at $254,082, with the following assumptions: risk-free interest rate of 1.79%, expected life of 1 year, volatility of 113%, and expected dividend yield of zero. Because the fair value of the note did not exceed the net proceeds from the $300k Notes, no charge was recorded to "Financing cost" for the excess of the fair value of the note. As of June 30, 2020, the debt discount was $26,452. On August 29, 2019, the Company entered into a convertible promissory note and a security purchase agreement dated August 29, 2019, in the amount of $300,000. The lender was Eagle Equities, LLC. The notes have a maturity of August 29, 2020 and interest rate of 8% per annum and are convertible at a price of 70% of the lowest closing bid price on the primary trading market on which the Company's Common Stock is then listed for the fifteen (15) trading days immediately prior to conversion. The note may be prepaid, but carries a penalty in association with the remittance amount, as there is an accretion component to satisfy the note with cash. The convertible note qualifies for derivative accounting and bifurcation under ASC 815, "Derivatives and Hedging." The fair value of the $300,000 Notes was calculated using the Black-Scholes pricing model at $234,052, with the following assumptions: risk-free interest rate of 1.75%, expected life of 1 year, volatility of 113%, and expected dividend yield of zero. Because the fair value of the note did not exceed the net proceeds from the $300,000 Notes, no charge was recorded to "Financing cost" for the excess of the fair value of the note. As of June 30, 2020, the debt discount was $37,833. On September 24, 2019, the Company entered into a convertible promissory note and a security purchase agreement dated September 24, 2019, in the amount of $150,000. The lender was Eagle Equities, LLC. The notes have a maturity of September 24, 2020 and interest rate of 8% per annum and are convertible at a price of 70% of the lowest closing bid price on the primary trading market on which the Company's Common Stock is then listed for the fifteen (15) trading days immediately prior to conversion. The note may be prepaid, but carries a penalty in association with the remittance amount, as there is an accretion component to satisfy the note with cash. The convertible note qualifies for derivative accounting and bifurcation under ASC 815, "Derivatives and Hedging." The fair value of the $150,000 Notes was calculated using the Black-Scholes pricing model at $118,009, with the following assumptions: risk-free interest rate of 1.78%, expected life of 1 year, volatility of 113%, and expected dividend yield of zero. Because the fair value of the note did not exceed the net proceeds from the $150k Notes, no charge was recorded to "Financing cost" for the excess of the fair value of the note. As of June 30, 2020, the debt discount was $27,482. On November 7, 2019, the Company entered into a convertible promissory note and a security purchase agreement dated November 7, 2019, in the amount of $150,000. The lender was Eagle Equities, LLC. The notes have a maturity of November 7, 2020 and interest rate of 8% per annum and are convertible at a price of 70% of the lowest closing bid price on the primary trading market on which the Company's Common Stock is then listed for the fifteen (15) trading days immediately prior to conversion. The note may be prepaid, but carries a penalty in association with the remittance amount, as there is an accretion component to satisfy the note with cash. The convertible note qualifies for derivative accounting and bifurcation under ASC 815, "Derivatives and Hedging." The fair value of the $150,000 Notes was calculated using the Black-Scholes pricing model at $121,875, with the following assumptions: risk-free interest rate of 1.58%, expected life of 1 year, volatility of 122%, and expected dividend yield of zero. Because the fair value of the note did not exceed the net proceeds from the $150k Notes, no charge was recorded to "Financing cost" for the excess of the fair value of the note. As of June 30, 2020, the debt discount was $43,074. On December 31, 2019, the Company entered into a convertible promissory note and a security purchase agreement dated December 31, 2019, in the amount of $150,000. The lender was Eagle Equities, LLC. The notes have a maturity of December 31, 2020 and interest rate of 8% per annum and are convertible at a price of 70% of the lowest closing bid price on the primary trading market on which the Company's Common Stock is then listed for the fifteen (15) trading days immediately prior to conversion. The note may be prepaid, but carries a penalty in association with the remittance amount, as there is an accretion component to satisfy the note with cash. The convertible note qualifies for derivative accounting and bifurcation under ASC 815, "Derivatives and Hedging." The fair value of the $150,000 Notes was calculated using the Black-Scholes pricing model at $189,172, with the following assumptions: risk-free interest rate of 1.59%, expected life of 1 year, volatility of 115%, and expected dividend yield of zero. Because the fair value of the note exceed the net proceeds from the $150k Notes, $39,172 was recorded to "Financing cost" for the excess of the fair value of the note. As of June 30, 2020, the debt discount was $75,205. On February 6, 2020, the Company entered into a convertible promissory note and a security purchase agreement dated February 6, 2020, in the amount of $200,000. The lender was Eagle Equities, LLC. The notes have a maturity of February 6, 2021 and interest rate of 8% per annum and are convertible at a price of 70% of the lowest closing bid price on the primary trading market on which the Company's Common Stock is then listed for the fifteen (15) trading days immediately prior to conversion. The note may be prepaid, but carries a penalty in association with the remittance amount, as there is an accretion component to satisfy the note with cash. The convertible note qualifies for derivative accounting and bifurcation under ASC 815, "Derivatives and Hedging." The fair value of the $200,000 Notes was calculated using the Black-Scholes pricing model at $156,061, with the following assumptions: risk-free interest rate of 1.51%, expected life of 1 year, volatility of 113%, and expected dividend yield of zero. As of June 30, 2020, the debt discount was $94,064. On February 26, 2020, the Company entered into a convertible promissory note and a security purchase agreement dated February 26, 2020, in the amount of $187,000. The lender was Eagle Equities, LLC. The notes have a maturity of February 6, 2021 and interest rate of 8% per annum and are convertible at a price of 70% of the lowest closing bid price on the primary trading market on which the Company's Common Stock is then listed for the fifteen (15) trading days immediately prior to conversion. The note may be prepaid, but carries a penalty in association with the remittance amount, as there is an accretion component to satisfy the note with cash. The convertible note qualifies for derivative accounting and bifurcation under ASC 815, "Derivatives and Hedging." The fair value of the $187,000 Notes was calculated using the Black-Scholes pricing model at $150,268, with the following assumptions: risk-free interest rate of 1.18%, expected life of 1 year, volatility of 118%, and expected dividend yield of zero. As of June 30, 2020, the debt discount was $99,218. On April 30, 2020, the Company entered into a convertible promissory note and a security purchase agreement dated April 30, 2020, in the amount of $205,700. This note carried an Original Discount of 10% or $18,700 which was included in interest expense at the time of valuation. The lender was Eagle Equities, LLC. The notes have a maturity of April 30, 2021 and interest rate of 8% per annum and are convertible at a price of 78% of the lowest closing bid price on the primary trading market on which the Company's Common Stock is then listed for the twenty (20) trading days immediately prior to conversion. The note may be prepaid, but carries a penalty in association with the remittance amount, as there is an accretion component to satisfy the note with cash. The convertible note qualifies for derivative accounting and bifurcation under ASC 815, "Derivatives and Hedging." The fair value of the $205,700 Notes was calculated using the Black-Scholes pricing model at $128,369, with the following assumptions: risk-free interest rate of 0.16%, expected life of 1 year, volatility of 106%, and expected dividend yield of zero. As of June 30, 2020, the debt discount was $106,916. On June 23, 2020, the Company entered into a convertible promissory note and a security purchase agreement dated June 23, 2020, in the amount of $205,700. This note carried an Original Discount of 10% or $18,700 which was included in interest expense at the time of valuation. The lender was Eagle Equities, LLC. The notes have a maturity of June 23, 2021 and interest rate of 8% per annum and are convertible at a price of 78% of the lowest closing bid price on the primary trading market on which the Company's Common Stock is then listed for the twenty (20) trading days immediately prior to conversion. The note may be prepaid, but carries a penalty in association with the remittance amount, as there is an accretion component to satisfy the note with cash. The convertible note qualifies for derivative accounting and bifurcation under ASC 815, "Derivatives and Hedging." The fair value of the $205,700 Notes was calculated using the Black-Scholes pricing model at $132,236, with the following assumptions: risk-free interest rate of 0.18%, expected life of 1 year, volatility of 108%, and expected dividend yield of zero. As of June 30, 2020, the debt discount was $129,700. Below is a reconciliation of the convertible notes payable as presented on the Company's balance sheet as of June 30, 2020: Principal Debt Discount ($) Net Balance at June 30, 2018 1,576,024 (942,154 ) 633,870 Convertible notes payable issued during fiscal year ended June 30, 2019 1,602,005 - 1,602,005 Note paid (102,076 ) - (102,076 ) Notes converted into shares of common stock (1,327,953 ) - (1,327,953 ) Debt discount associated with new convertible notes - (1,482,314 ) (1,482,314 ) Amortization of debt discount - 1,794,209 1,794,209 Balance at June 30, 2019 1,748,000 (630,259 ) 1,117,741 Convertible notes payable issued during fiscal year ended June 30, 2020 2,148,400 - 2,148,400 Notes converted into shares of common stock (961,000 ) - (961,000 ) Debt discount associated with new convertible notes - (1,684,711 ) (1,684,711 ) Amortization of debt discount - 1,709,759 1,709,759 Balance at June 30, 2020 2,935,400 (605,211 ) 2,330,189 |
Derivative Liability
Derivative Liability | 12 Months Ended |
Jun. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Liability | 11. Derivative Liability Due to the variable conversion price associated with some of these convertible promissory notes disclosed in Note 8 above, the Company has determined that the conversion feature is considered a derivative liability for instruments which are convertible and have not yet been settled. The accounting treatment of derivative financial instruments requires that the Company record the fair value of the derivatives on the date they are deemed to be derivative liabilities. During the year ended June 30, 2020, the Company recorded a gain in fair value of derivative liability of $858,774. The Company will measure the fair value of each derivative instrument in future reporting periods and record a gain or loss based on the change in fair value. Below is a reconciliation of the derivative liability as presented on the Company's balance sheet as of June 30, 2020: Derivative liability as of June 30, 2018 $ 1,765,187 Initial derivative liability accounted for convertible notes payable issued during the period ended June 30, 2019 1,565,535 Change in derivative liability during the period 712,627 Reclassify derivative liability associated with Notes converted (2,736,601 ) Derivative liability as of June 30, 2019 $ 1,306,748 Initial derivative liability accounted for convertible notes payable issued during the period ended June 30, 2020 1,723,883 Change in derivative liability during the period (858,774 ) Reclassify derivative liability associated with Notes converted (581,219 ) Balance at June 30, 2020 $ 1,590,638 |
Line of Credit
Line of Credit | 12 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Line of Credit | 12. Line of Credit On March 19, 2020, the Company secured a $200,000 line of credit with Celtic Bank Corporation. This LOC has a "Flex Credit" component of calculating interest, which means the interest rate on any draws taken against the LOC is set at the time of said draw. As of the date of this filing, the Company has made one draw against the credit line for a gross amount of $5,000 (including proceeds and draw fees). Three payments have been made against this draw of approximately $368 each. Such payments will continue to be automatically deducted from the corporate checking account until the draw and all fees have been paid in full. The Company may or may not choose to use this line of credit for additional financing needs. June 30, June 30, Line of Credit $ 3,897 $ 0 Total borrowings 3,897 0 Less: current portion 3,897 0 Long term debt $ - $ - Interest expense for the years ended June 30, 2020 and 2019, totaled $463 and $0, respectively. |
Stockholders' Deficit
Stockholders' Deficit | 12 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
Stockholders' Deficit | 13. Stockholders' Deficit ● On October 16, 2013, the Nightfood, Inc. became a wholly-owned subsidiary of Nightfood Holdings, Inc. Accordingly, the stockholders' equity has been revised to reflect the share exchange on a retroactive basis. ● The Company is authorized to issue Two Hundred Million (200,000,000) shares of $0.001 par value per share Common Stock. Holders of Common Stock are each entitled to cast one vote for each Share held of record on all matters presented to shareholders. Cumulative voting is not allowed; hence, the holders of a majority of the outstanding Common Stock can elect all directors. Holders of Common Stock are entitled to receive such dividends as may be declared by the Board of Directors out of funds legally available therefore and, in the event of liquidation, to share pro-rata in any distribution of the Company's assets after payment of liabilities. The Board of Directors is not obligated to declare a dividend and it is not anticipated that dividends will be paid unless and until the Company is profitable. Holders of Common Stock do not have pre-emptive rights to subscribe to additional shares if issued by the Company. There are no conversion, redemption, sinking fund or similar provisions regarding the Common Stock. All of the outstanding Shares of Common Stock are fully paid and non-assessable and all of the Shares of Common Stock offered thereby will be, upon issuance, fully paid and non-assessable. Holders of Shares of Common Stock will have full rights to vote on all matters brought before shareholders for their approval, subject to preferential rights of holders of any series of Preferred Stock. Holders of the Common Stock will be entitled to receive dividends, if and as declared by the Board of Directors, out of funds legally available, and share pro-rata in any distributions to holders of Common Stock upon liquidation. The holders of Common Stock will have no conversion, pre-emptive or other subscription rights. Upon any liquidation, dissolution or winding-up of the Company, assets, after the payment of debts and liabilities and any liquidation preferences of, and unpaid dividends on, any class of preferred stock then outstanding, will be distributed pro-rata to the holders of the common stock. The holders of the common stock have no right to require the Company to redeem or purchase their shares. Holders of shares of common stock do not have cumulative voting rights, which means that the holders of more than 50% of the outstanding shares, voting for the election of directors, can elect all of the directors to be elected, if they so choose, and, in that event, the holders of the remaining shares will not be able to elect any of our directors. The Company had 61,796,680 and 53,773,856 shares of its $0.001 par value common stock issued and outstanding as of June 30, 2020 and 2019 respectively. During the year ended June 30, 2020: ● The Company issued 1,385,990 shares of common stock for services with a fair value of $308,768 ● and issued 580,666 shares of common stock in consideration of interest payments with a fair value of $88,762 ● and issued 6,056,168 shares of common stock as consideration for convertible debt with a fair value of $961,000. During the year ended June 30, 2019: ● the Company sold 84,389 shares of common stock for cash proceeds of $50,000, ● and issued 483,808 shares of common stock for services with a fair value of $345,656, ● and issued 281,957 shares of common stock for payment of certain accounts payable liabilities with a fair value of $63,850, ● and issued 400,000 shares of common stock for the exercise of warrants valued at $120,000, ● and issued 667,959 shares of common stock in consideration of interest payments with a fair value of $95,805, ● and issued 9,247,414 shares of common stock as consideration for convertible debt with a fair value of $1,327,953. During the years ended June 30, 2020 and 2019, the Company recorded a Loss on fair value of shares issued upon notes conversion of $977,000 and $2,736,601, respectively. Preferred Stock On July 9 th In addition to his ownership of the common stock, Mr. Folkson owns 1,000 shares of our Series A Preferred Stock ("A Stock") which votes with the common stock and has an aggregate of 100,000,000 votes. Dividends ● The Company has never declared dividends. Warrants ● The following is a summary of the Company's outstanding common stock purchase warrants. A portion of the 500,000 warrants shown below at an exercise price of $.15 have not yet vested. These warrants were issued as compensation for a four-year advisory agreement. 150,000 warrants vested on July 24, 2018, another 150,000 on July 24, 2019, another would vest 150,000 on July 24, 2020, and the remaining 50,000 on July 24, 2021, should advisor complete the term of his engagement. The aggregate intrinsic value of the warrants as of June 30, 2020 is $28,025. The aggregate intrinsic value of the warrants as of June 30, 2019 was $318,450. Outstanding at Issued / Outstanding Exercise Price June 30, (exercised) in Expired June 30, $ 0.15 500,000 - 500,000 $ 0.20 105,000 - 105,000 $ 0.30 500,000 (400,000 ) - 100,000 $ 0.40 - 150,000 - 150,000 $ 0.75 300,000 - - 300,000 1,405,000 (250,000 ) - 1,155,000 Outstanding at Issued / Outstanding Exercise Price June 30, (exercised) in Expired June 30, $ 0.15 500,000 - 500,000 $ 0.20 105,000 - 105,000 $ 0.30 100,000 - 100,000 $ 0.40 150,000 - 150,000 $ 0.75 300,000 - - 300,000 1,155,000 - 1,155,000 Options ● The Company has never issued options. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Jun. 30, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 14. Related Party Transactions ● During the third quarter 2015, Mr. Folkson began accruing a consulting fee of $6,000 per month which the aggregate of $72,000 and $72,000 is reflected in professional fees and presented in the accrued expenses – related party for 2020 and 2019 respectively. ● The original consulting Agreement for Mr. Folkson had a term of one year, and then converted into a month to month agreement effective January 1, 2016. A new twelve month consulting agreement was entered into for Mr. Folkson effective July 1, 2019, which paid Folkson the same $6,000 monthly consulting fee. In addition, the Company made bonuses available to Folkson upon the Company hitting certain revenue milestones of $1,000,000 in a quarter and $3,000,000 in a quarter. Achieving those milestones would earn Folkson warrants with a $.50 and $1 strike price which would need to be exercised within 90 days of the respective quarterly or annual filing. |
Income Tax
Income Tax | 12 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Tax | 15. Income Tax A reconciliation of the statutory income tax rates and the Company's effective tax rate is as follows: June 30, 2020 2019 Statutory U.S. federal rate (21.00 )% (21.00 )% Effect of higher U.S. Federal statutory tax rate - % - % State income taxes (net of federal tax benefit) (7.00 )% (7.00 )% Permanent differences 7.10 % 6.70 % Valuation allowance (20.9 )% (21.3 )% True up of net operating loss - % - % 0.0 % 0.0 % The tax effects of the temporary differences and carry forwards that give rise to deferred tax assets consist of the following: 2020 2019 Deferred tax assets: Net operating loss carry-forwards $ 1,460,670 1,155,359 Valuation allowance (1,460,670 ) (1,155,359 ) Net deferred tax asset $ - $ - At June 30, 2020 the Company had estimated U.S. federal net operating losses of approximately $7,358,518 for income tax purposes. $2,614,000 will expire between 2031 and 2037 while the balance of the tax operating loss can be carried forward indefinitely. For financial reporting purposes, the entire amount of the net deferred tax assets has been offset by a valuation allowance due to uncertainty regarding the realization of the assets. The net change in the total valuation allowance for the year ended June 30, 2020 was an increase of $398,550. The Company follows FASC 740-10-25 P which requires a company to evaluate whether a tax position taken by the company will "more likely than not" be sustained upon examination by the appropriate tax authority. The Company has analyzed filing positions in all of the federal and state jurisdictions where it is required to file income tax returns, as well as all open tax years in these jurisdictions. The Company believes that its income tax filing positions and deductions would be sustained on audit and does not anticipate any adjustments that would result in a material change to its financial position. Therefore, no reserves for uncertain income tax positions have been recorded. The Company may not be able to utilize the net operating loss carryforwards for its US income taxes in future periods should it experience a change in ownership as defined in Section 382 of the Internal Revenue Code ("IRC"). Under section 382, should the Company experience a more than 50% change in its ownership over a 3 year period, the Company would be limited based on a formula as defined in the IRC to the amount per year it could utilize in that year of the net operating loss carryforwards. As of June 30, 2020 the Company had not performed an analysis to determine if the Company was subject to the provisions of Section 382. The Company is subject to U.S. federal income tax including state and local jurisdictions. Currently, no federal or state income tax returns are under examination by the respective taxing jurisdictions. The Company's accounting policy is to recognize interest and penalties related to uncertain tax positions in income tax expense. The Company has not accrued interest for any periods. The Company has not filed its federal and state income tax returns for the fiscal years ended June 30, 2020, 2019, 2018, June 30, 2017 and 2016 respectively, however it believes due to the reported losses there is no material liability outstanding. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | 16. Fair Value of Financial Instruments Cash and Equivalents, Receivables, Other Current Assets, Short-Term Debt, Accounts Payable, Accrued and Other Current Liabilities. The carrying amounts of these items approximated fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, Financial Accounting Standards Board ("FASB") ASC Topic 820-10-35 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurements). Level 1 Level 2 Level 3 The application of the three levels of the fair value hierarchy under Topic 820-10-35 to our assets and liabilities are described below: Fiscal 2020 Fair Value Measurements Level 1 Level 2 Level 3 Total Fair Assets Other assets $ - $ - $ - $ - Total $ - $ - $ - $ - Liabilities Short and long-term debt $ $ - $ 2,935,400 $ 2,935,400 Total $ $ - $ 2,935,400 $ 2,935,400 Fiscal 2019 Fair Value Measurements Level 1 Level 2 Level 3 Total Fair Assets Other assets $ - $ - $ - $ - Total $ - $ - $ - $ - Liabilities Short and long-term debt $ $ - $ 1,748,000 $ 1,748,000 Total $ $ - $ 1,748,000 $ 1,748,000 Fiscal 2020 Fair Value Measurements Level 1 Level 2 Level 3 Total Fair Value Assets Other assets $ - $ - $ - $ - Total $ - $ - $ - $ - Liabilities Derivative Liabilities $ $ - $ 1,590,638 $ 1,590,638 Total $ $ - $ 1,590,638 $ 1,590,638 Fiscal 2019 Fair Value Measurements Level 1 Level 2 Level 3 Total Fair Value Assets Other assets $ - $ - $ - $ - Total $ - $ - $ - $ - Liabilities Derivative Liabilities $ $ - $ 1,306,748 $ 1,306,748 Total $ $ - $ 1,306,748 $ 1,306,748 Management considers all of its derivative liabilities to be Level 3 liabilities. At June 30, 2020 and 2019, respectively the Company had outstanding derivative liabilities, including those from related parties of $1,590,638 and $1,306,748, respectively. |
Net Loss per Share of Common St
Net Loss per Share of Common Stock | 12 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Net Loss per Share of Common Stock | 17. Net Loss per Share of Common Stock ● The Company has adopted FASB Topic 260, "Earnings per Share," which requires presentation of basic and diluted EPS on the face of the income statement for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. In the accompanying financial statements, basic loss per share of common stock is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the year. Basic net loss per common share is based upon the weighted average number of common shares outstanding during the period. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. Convertible debt that is convertible into 24,638,241 and 8,538,462 shares of the Company's common stock are not included in the computation for the fiscal years ended June 30, 2020 and 2019, respectively. Additionally, there are 1,155,000 and 1,155,000 warrants that are exercisable into shares of stock as of June 30, 2020 and June 30, 2019, respectively. 2020 2019 Numerator - basic and diluted loss per share net loss $ (4,412,063 ) $ (4,598,343 ) Net loss available to common stockholders $ (4,412,063 ) $ (4,598,343 ) Denominator – basic and diluted loss per share – weighted average common shares outstanding 57,443,347 47,827,114 Basic and diluted earnings per share $ (0.08 ) $ (0.09 ) |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 18. Commitments and Contingencies ● As of June 30, 2020 and 2019, the Company has no material commitments or contingencies. ● Litigation: From time to time, we may become involved in various lawsuits and legal proceedings, which arise, in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are not aware of any such legal proceedings that we believe will have, individually or in the aggregate, a material adverse effect on our business, financial condition or operating results. ● Coronavirus (COVID-19): On March 11, 2020, the World Health Organization declared the COVID-19 outbreak to be a global pandemic which continues to spread throughout the U.S. and the globe. In addition to the devastating effects on human life, the pandemic is having a negative ripple effect on the global economy, leading to disruptions and volatility in the global financial markets. Most U.S. states and many countries have issued policies intended to stop or slow the further spread of the disease such as issuing temporary Executive Orders that, among other stipulations, effectively prohibit in-person work activities for most industries and businesses, having the effect of suspending or severely curtailing operations. COVID-19 and the U.S's response to the pandemic are significantly affecting the economy. There are no comparable events that provide guidance as to the effect the COVID-19 pandemic may have, and, as a result, the ultimate effect of the pandemic is highly uncertain and subject to change. The extent of the ultimate impact of the pandemic on the Company's operational and financial performance will depend on various developments, including the duration and spread of the outbreak, which cannot be reasonably predicted at this time. Accordingly, while management reasonably expects the COVID-19 outbreak to negatively impact the Company, the related consequences and duration are highly uncertain and cannot be predicted at this time. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Jun. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | 19. Subsequent Events ● Subsequent to the end of the Fiscal Year, noteholder Eagle Equities converted $347,000 of principal and $36,448.23 of interest of outstanding notes to stock. The average conversion price in these transactions was $.117. 3,288,917 shares were issued to the noteholder in these transactions. ● On August 12, 2020 the Company entered into a convertible promissory note and security purchase agreement dated and funded August 12, 2020, in the amount of $205,700. The lender was Eagle Equities, LLC. ● On October 13, 2020 the Company entered into a convertible promissory note and security purchase agreement dated and funded October 13, 2020, in the amount of $205,700. The lender was Eagle Equities, LLC. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates ● The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Estimates are used in the determination of beneficial conversion features, derivative liabilities, depreciation and amortization, the valuation for non-cash issuances of common stock, and the website, income taxes and contingencies, among others. |
Beneficial Conversion Feature | Beneficial Conversion Feature ● For conventional convertible debt where the rate of conversion is below market value, the Company records any "beneficial conversion feature" ("BCF") intrinsic value as additional paid in capital and related debt discount. When the Company records a BCF, the relative fair value of the BCF is recorded as a debt discount against the face amount of the respective debt instrument. The discount is amortized over the life of the debt. If a conversion of the underlying debt occurs, a proportionate share of the unamortized amounts is immediately expensed. |
Debt Issue Costs | Debt Issue Costs ● The Company may pay debt issue costs in connection with raising funds through the issuance of debt whether convertible or not or with other consideration. These costs are recorded as debt discounts and are amortized over the life of the debt to the statement of operations as amortization of debt discount. |
Original Issue Discount | Original Issue Discount ● If debt is issued with an original issue discount, the original issue discount is recorded to debt discount, reducing the face amount of the note and is amortized over the life of the debt to the statement of operations as amortization of debt discount. If a conversion of the underlying debt occurs, a proportionate share of the unamortized amounts is immediately expensed. |
Valuation of Derivative Instruments | Valuation of Derivative Instruments ● ASC 815 "Derivatives and Hedging" requires that embedded derivative instruments be bifurcated and assessed, along with free-standing derivative instruments such as warrants, on their issuance date and measured at their fair value for accounting purposes. In determining the appropriate fair value, the Company uses the Black-Scholes option pricing formula. Upon conversion of a note where the embedded conversion option has been bifurcated and accounted for as a derivative liability, the Company records the shares at fair value, relieves all related notes, derivatives and debt discounts and recognizes a net gain or loss on debt extinguishment. |
Reclassification | Reclassification ● The Company may make certain reclassifications to prior period amounts to conform with the current year's presentation. These reclassifications did not have a material effect on its consolidated statement of financial position, results of operations or cash flows. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements The Company reviews all of the Financial Accounting Standard Board's updates periodically to ensure the Company's compliance of its accounting policies and disclosure requirements to the Codification Topics. In May 2014, the Financial Accounting Standards Board (FASB) issued ASU 2014-09, Revenue from Contracts with Customers, to establish ASC Topic 606, (ASC 606). ASU 2014-09 supersedes the revenue recognition requirements in ASC Topic 605, Revenue Recognition and most industry-specific guidance throughout the Industry Topics of the Codification. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance includes a five-step framework that requires an entity to: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when the entity satisfies a performance obligation. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The standard became effective for us beginning on July 1, 2018 and did not have a material impact on our financial statements. In January 2016, the FASB issued ASU 2016-01,Financial Instruments – Overall (Subtopic 825-10) – Recognition and Measurement of Financial Assets and Financial Liabilities, which requires all investments in equity securities with readily determinable fair value to be measured at fair value with changes in the fair value recognized through net income (other than those accounted for under the equity method of accounting or those that result in consolidation of the investee). ASU 2016-01 is intended to enhance the reporting model for financial instruments to provide users of financial statements with more decision-useful information and removes the requirement to disclose the methods and significant assumptions used to estimate the fair value for financial instruments measured at amortized cost on the balance sheet. For public companies, the new standard is effective for annual periods beginning after December 15, 2017, including interim periods within the fiscal year. For all other entities, including emerging growth companies, ASU 2016-01 is effective for annual periods beginning after December 15, 2018, and interim periods within annual periods beginning after December 15, 2019. The Company evaluated the impact on the financial statements and implemented the provisions of ASU 2016-01 for the annual financial statements for the year ended June 30, 2020. This new standard did not have a material impact on our financial statements or related disclosures. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) and subsequently amended the guidance relating largely to transition considerations under the standard in January 2017, to increase transparency and comparability among organizations by requiring the recognition of right-of-use ("ROU") assets and lease liabilities on the balance sheet. Most prominent among the changes in the standard is the recognition of ROU assets and lease liabilities by lessees for those leases classified as operating leases under current U.S. GAAP. Under the standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. We will be required to recognize and measure leases existing at, or entered into after, the beginning of the earliest comparative period presented using a modified retrospective approach, with certain practical expedients available. The standard became effective for us beginning July 1, 2019. We have reviewed this and have determined that there is no material impact on our financial statements. In July 2017, the FASB issued ASU No. 2017-11, Earnings Per Share, Distinguishing Liabilities from Equity and Derivatives and Hedging The . In February 2018, the Financial Accounting Standards Board ("FASB") issued ASC Update No 2018-02 (Topic 220) Income Statement – Reporting Comprehensive Income: Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. This ASC update allows for a reclassification into retained earnings of the stranded tax effects in accumulated other comprehensive income ("AOCI") resulting from the enactment of the Tax Cuts and Jobs Act ("TCJA"). The updated guidance is effective for interim and annual periods beginning after December 15, 2018. We adopted this guidance effective July 1, 2019. The . In June 2018, the FASB issued ASU 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, to expand the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees and supersedes the guidance in Subtopic 505-50, Equity - Equity-Based Payments to Non-Employees. Under ASU 2018-07, equity-classified nonemployee share-based payment awards are measured at the grant date fair value on the grant date The probability of satisfying performance conditions must be considered for equity-classified nonemployee share-based payment awards with such conditions. ASU 2018-07 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. We adopted this guidance effective July 1, 2019. The . In July 2018, the FASB issued ASU 2018-09 to provide clarification and correction of errors to the Codification. The amendments in this update cover multiple Accounting Standards Updates. Some topics in the update may require transition guidance with effective dates for annual periods beginning after December 15, 2018. We adopted this guidance effective July 1, 2019. The . The Company will continue to monitor these emerging issues to assess any potential future impact on its financial statements. |
Derivative Financial Instruments | Derivative Financial Instruments ● The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks. The Company evaluates all of its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and then is revalued at each reporting date, with changes in fair value reported in the consolidated statement of operations. For stock based derivative financial instruments, Fair value accounting requires bifurcation of embedded derivative instruments such as conversion features in convertible debt or equity instruments, and measurement of their fair value for accounting purposes. In determining the appropriate fair value, the Company uses the Black-Scholes option-pricing model. In assessing the convertible debt instruments, management determines if the convertible debt host instrument is conventional convertible debt and further if there is a beneficial conversion feature requiring measurement. If the instrument is not considered conventional convertible debt, the Company will continue its evaluation process of these instruments as derivative financial instruments. Once determined, derivative liabilities are adjusted to reflect fair value at the end of each reporting period. Any increase or decrease in the fair value from inception is made quarterly and appears in results of operations as a change in fair market value of derivative liabilities. |
Cash and Cash Equivalents | Cash and Cash Equivalents ● The Company classifies as cash and cash equivalents amounts on deposit in the banks and cash temporarily in various instruments with original maturities of three months or less at the time of purchase. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments ● Statement of financial accounting standard FASB Topic 820, Disclosures about Fair Value of Financial Instruments, requires that the Company disclose estimated fair values of financial instruments. The carrying amounts reported in the statements of financial position for assets and liabilities qualifying as financial instruments are a reasonable estimate of fair value. |
Inventories | Inventories ● Inventories consisting of packaged food items and supplies are stated at the lower of cost (FIFO) or net realizable value, including provisions for spoilage commensurate with known or estimated exposures which are recorded as a charge to cost of sales during the period spoilage is incurred. |
Advertising Costs | Advertising Costs ● Advertising costs are expensed when incurred and are included in advertising and promotional expense in the accompanying statements of operations. Included in this category are expenses related to public relations, investor relations, new package design, website design, design of promotional materials, cost of trade shows, cost of products given away as promotional samples, and paid advertising. The Company recorded advertising costs of $403,639 and $732,297 for the years ended June 30, 2020 and 2019, respectively. |
Income Taxes | Income Taxes ● The Company has not generated any taxable income, and, therefore, no provision for income taxes has been provided. ● Deferred income taxes are reported for timing differences between items of income or expense reported in the financial statements and those reported for income tax purposes in accordance with FASB Topic 740, "Accounting for Income Taxes", which requires the use of the asset/liability method of accounting for income taxes. Deferred income taxes and tax benefits are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and for tax loss and credit carry-forwards. 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 be recovered or settled. The Company provides for deferred taxes for the estimated future tax effects attributable to temporary differences and carry-forwards when realization is more likely than not. ● A valuation allowance has been recorded to fully offset the deferred tax asset even though the Company believes it is more likely than not that the assets will be utilized. ● The Company's effective tax rate differs from the statutory rates associated with taxing jurisdictions because of permanent and temporary timing differences as well as a valuation allowance. |
Revenue Recognition | Revenue Recognition ● The Company generates its revenue by selling its nighttime snack products wholesale and direct to consumer. ● All sources of revenue are recorded pursuant to FASB Topic 606 Revenue Recognition, to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This includes a five-step framework that requires an entity to: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when the entity satisfies a performance obligation. In addition, this revenue generation requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. ● The Company offers sales incentives through various programs, consisting primarily of advertising related credits. The Company records advertising related credits with customers as a reduction to revenue as no identifiable benefit is received in exchange for credits claimed by the customer. ● The Company revenue from contracts with customers provides that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company incurs costs associated with product distribution, such as freight and handling costs. The Company has elected to treat these costs as fulfillment activities and recognizes these costs at the same time that it recognizes the underlying product revenue. As this policy election is in line with the Company's previous accounting practices, the treatment of shipping and handling activities under FASB Topic 606 did not have any impact on the Company's results of operations, financial condition and/or financial statement disclosures. The adoption of ASC 606 did not result in a change to the accounting for any of the Company's revenue streams that are within the scope of the amendments. The Company's services that fall within the scope of ASC 606 are recognized as revenue as the Company satisfies its obligation to the customer. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which updates revenue recognition guidance relating to contracts with customers. This standard states that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This standard is effective for annual reporting periods, and interim periods therein, beginning after July 1, 2018. The Company adopted ASU 2014-09 and its related amendments (collectively known as "ASC 606") during the first quarter of fiscal 2019 using the full retrospective method. Management reviewed ASC 606-10-32-25 which states "Consideration payable to a customer includes cash amounts that an entity pays, or expects to pay, to the customer (or to other parties that purchase the entity's goods or services from the customer). Consideration payable to a customer also includes credit or other items (for example, a coupon or voucher) that can be applied against amounts owed to the entity (or to other parties that purchase the entity's goods or services from the customer). An entity shall account for consideration payable to a customer as a reduction of the transaction price and, therefore, of revenue unless the payment to the customer is in exchange for a distinct good or service (as described in paragraphs 606-10-25-18 through 25-22) that the customer transfers to the entity. If the consideration payable to a customer includes a variable amount, an entity shall estimate the transaction price (including assessing whether the estimate of variable consideration is constrained) in accordance with paragraphs 606-10-32-5 through 32-13." If the consideration payable to a customer is a payment for a distinct good service, then in accordance with ASC 606-10-32-26, the entity should account for it the same way that it accounts for other purchases from suppliers (expense). Further, "if the amount of consideration payable to the customer exceeds the fair value of the distinct good or service that the entity receives from the customer, then the entity shall account for such an excess as a reduction of the transaction price. If the entity cannot reasonably estimate the fair value of the good or service received from the customer, it shall account for all of the consideration payable to the customer as a reduction of the transaction price." Under ASC 606-10-32-27, if the consideration payable to a customer is accounted for as a reduction of the transaction price, "an entity shall recognize the reduction of revenue when (or as) the later of either of the following events occurs: a) The entity recognizes revenue for the transfer of the related goods or services to the customer. b) The entity pays or promises to pay the consideration (even if the payment is conditional on a future event). That promise might be implied by the entity's customary business practices." Management reviewed each arrangement to determine if each fee paid is for a distinct good or service and should be expensed as incurred or if the Company should recognize the payment as a reduction of revenue. The Company recognizes revenue upon shipment based on meeting the transfer of control criteria. The Company has made a policy election to treat shipping and handling as costs to fulfill the contract, and as a result, any fees received from customers are included in the transaction price allocated to the performance obligation of providing goods with a corresponding amount accrued within cost of sales for amounts paid to applicable carriers. |
Concentration of Credit Risk | Concentration of Credit Risk ● Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash deposits at financial institutions. At various times during the year, the Company may exceed the federally insured limits. To mitigate this risk, the Company places its cash deposits only with high credit quality institutions. Management believes the risk of loss is minimal. At June 30, 2020 and 2019 the Company did not have any uninsured cash deposits. |
Receivables Concentration | Receivables Concentration ● As of June 30, 2020, the Company had receivables due from seven customers, two of whom accounted for over 20% of the outstanding balance. Four of the other five accounted for over 10% of the total balance. As of June 30, 2019, the Company had receivables due from six customers, three of whom accounted for over 20% of the outstanding balance. |
Income Per Share | Income Per Share ● Net income per share data for both the years ending June 30, 2020 and 2019, is based on net income available to common shareholders divided by the weighted average of the number of common shares outstanding. |
Impairment of Long-lived Assets | Impairment of Long-lived Assets ● The Company accounts for long-lived assets in accordance with the provisions of FASB Topic 360, Accounting for the Impairment of Long-Lived Assets. This statement requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. Fair values are determined based on quoted market value, discounted cash flows or internal and external appraisals, as applicable. During the years ended June 30, 2020 and 2019, the Management determined and impaired $500,000 and $-0-, respectively as impairment on intangible asset ASC 350-50-05-01 states " on accounting for costs incurred to develop a website, including whether to capitalize or expense the following types of costs: a) Costs incurred in the planning stage b) Costs incurred in the website application and infrastructure development stage c) Costs incurred to develop graphics d) Costs incurred to develop content e) Costs incurred in the operating stage." ASC 350-50-25-6 states "Costs incurred to purchase software tools, or costs incurred during the application development stage for internally developed tools, shall be capitalized unless they are used in research and development and meet either of the following conditions: a) They do not have any alternative future uses. b) They are internally developed and represent a pilot project or are being used in a specific research and development project (see paragraph 350-40-15-7)." Further, at ASC 350-50-25-7, "Costs to obtain and register an Internet domain shall be capitalized under Section 350-30-25." During the years ended June 30, 2020 and 2019, the Management determined and capitalized $1,000,000 and $-0-, respectively, under ASC 350-50 and accounted as an intangible asset and amortized the costs over the life of the relationship. |
Derivative Financial Instruments | Derivative Financial Instruments ● The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks. The Company evaluates all of its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and then is revalued at each reporting date, with changes in fair value reported in the consolidated statement of operations. For stock based derivative financial instruments, fair value accounting requires bifurcation of embedded derivative instruments such as conversion features in convertible debt or equity instruments, and measurement of their fair value for accounting purposes. In determining the appropriate fair value, the Company uses the Black-Scholes option-pricing model. In assessing the convertible debt instruments, management determines if the convertible debt host instrument is conventional convertible debt and further if there is a beneficial conversion feature requiring measurement. If the instrument is not considered conventional convertible debt, the Company will continue its evaluation process of these instruments as derivative financial instruments. Once determined, derivative liabilities are adjusted to reflect fair value at the end of each reporting period. Any increase or decrease in the fair value from inception is made quarterly and appears in results of operations as a change in fair market value of derivative liabilities. |
Restatement of prior financial information | Restatement of Prior Financial Information Subsequent to Form 10K for the year ended June 30, 2019 filing, during the interims review and based on such reviews, the following determinations were made by the Company: Error in Accounting for Slotting and Set-up Fees During our review, we determined that the accounting treatment for the recognition of slotting fees and other fees paid or payable by the Company to certain strategic partners was incorrect. Specifically, it has been determined that revenue relating to the slotting fee, which was originally capitalized and amortized into expense over an 18-month period should instead be treated as a reduction in revenue at the later of recognition of revenue for the transfer of the Nightfood product or when the Company pays or promised to pay the slotting fee. In addition, certain fees related to platforms to launch our products and advertising efforts should have been capitalized and recorded as an intangible asset. The Company previously recorded a portion of this fee as an intangible asset – placement fee and expensed the remaining amount as advertising expense in the Period Ended December 31, 2019. In accordance with the guidance provided by the SEC's Staff Accounting Bulletin 99, Materiality Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements As of June 30, 2019 (A) Previously Adjustments As Corrected Consolidated Balance Sheet Current assets $ 482,667 $ 487,500 $ 970,167 Current liabilities $ 2,955,272 $ 223,333 $ 3,178,605 Working capital (deficit) $ (2,472,605 ) $ 264,167 $ (2,208,438 ) Total assets $ 482,667 $ 487,500 $ 970,167 Total liabilities $ 2,955,272 $ 223,333 $ 3,178,605 Total stockholders' deficit $ (2,472,605 ) $ 264,167 $ (2,208,438 ) (A) The balance sheet impact of the errors was corrected in the quarter ended September 30, 2019. As of September 30, 2019 Previously Adjustments As Corrected Consolidated Balance Sheet Current assets $ 858,216 $ 387,917 $ 1,246,133 Current liabilities $ 3,287,252 $ 1,151,666 $ 4,438,918 Working capital (deficit) $ (2,429,036 ) $ (763,749 ) $ (3,192,785 ) Total assets $ 858,216 $ 1,221,250 $ 2,079,466 Total liabilities $ 3,287,252 $ 1,151,666 $ 4,438,918 Total stockholders' deficit $ (2,429,036 ) $ 69,584 $ (2,359,452 ) As of December 31, 2019 Previously Adjustments As Corrected Consolidate Balance Sheet Current assets $ 577,944 $ 408,294 $ 986,238 Current liabilities $ 4,514,446 $ 249,007 $ 4,763,453 Working capital (deficit) $ (3,936,502 ) $ 159,287 $ (3,777,215 ) Total assets $ 1,550,298 $ 102,607 $ 1,652,905 Total liabilities $ 4,514,446 $ 249,007 $ 4,763,453 Total stockholders' deficit $ (2,964,148 ) $ (146,400 ) $ (3,110,548 ) For the Year Ended June 30, 2019 (A) Previously Reported Adjustments As Corrected Consolidated Statements of Operations Revenues $ 352,172 $ - $ 352,172 Operating expenses $ 2,263,722 $ (264,167 ) $ 1,999,555 Loss from operations $ (1,911,550 ) $ 264,167 $ (1,647,383 ) Other income (expenses) $ 2,686,793 $ - $ 2,686,793 Net income (loss) $ (4,598,343 ) $ 264,167 $ (4,334,176 ) Basic & diluted EPS $ (0.09 ) $ - $ (0.09 ) (A) The income statement impact of the errors was corrected in the quarter ended September 30, 2019. For the Three Months Ended September 30, 2019 Previously Reported Adjustments As Corrected Consolidated Statements of Operations Revenues $ 206,497 $ (160,000 ) $ 46,497 Operating expenses $ 570,858 $ (229,584 ) $ 341,274 Loss from operations $ (364,361 ) $ 69,584 $ (294,777 ) Other income (expenses) $ 218,803 $ - $ 218,803 Net income (loss) $ (583,164 ) $ 69,584 $ (513,580 ) Basic & diluted EPS $ (0.01 ) $ - $ (0.01 ) For the Six Months Ended December 31, 2019 Previously Reported Adjustments As Corrected Consolidated Statements of Operations Revenues $ 379,488 $ (271,706 ) $ 107,782 Operating expenses $ 1,326,290 $ (125,306 ) $ 1,200,984 Loss from operations $ (946,802 ) $ (146,400 ) $ (1,093,202 ) Other income (expenses) $ 557,320 $ - $ 557,320 Net income (loss) $ (1,504,122 ) $ (146,400 ) $ (1,650,522 ) Basic & diluted EPS $ (0.02 ) $ - $ (0.02 ) For the Three Months Ended December 31, 2019 Previously Reported Adjustments As Corrected Consolidated Statements of Operations Revenues $ 172,991 $ (111,706 ) $ 61,285 Operating expenses $ 755,432 $ 104,278 $ 859,710 Loss from operations $ (582,441 ) $ (215,984 ) $ (798,425 ) Other income (expenses) $ 338,517 $ - $ 338,517 Net income (loss) $ (920,958 ) $ (215,984 ) $ (1,136,942 ) Basic & diluted EPS $ (0.02 ) $ - $ (0.02 ) |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Schedule of previously issued annual audited and unaudited financial statements | As of June 30, 2019 (A) Previously Adjustments As Corrected Consolidated Balance Sheet Current assets $ 482,667 $ 487,500 $ 970,167 Current liabilities $ 2,955,272 $ 223,333 $ 3,178,605 Working capital (deficit) $ (2,472,605 ) $ 264,167 $ (2,208,438 ) Total assets $ 482,667 $ 487,500 $ 970,167 Total liabilities $ 2,955,272 $ 223,333 $ 3,178,605 Total stockholders' deficit $ (2,472,605 ) $ 264,167 $ (2,208,438 ) (A) The balance sheet impact of the errors was corrected in the quarter ended September 30, 2019. As of September 30, 2019 Previously Adjustments As Corrected Consolidated Balance Sheet Current assets $ 858,216 $ 387,917 $ 1,246,133 Current liabilities $ 3,287,252 $ 1,151,666 $ 4,438,918 Working capital (deficit) $ (2,429,036 ) $ (763,749 ) $ (3,192,785 ) Total assets $ 858,216 $ 1,221,250 $ 2,079,466 Total liabilities $ 3,287,252 $ 1,151,666 $ 4,438,918 Total stockholders' deficit $ (2,429,036 ) $ 69,584 $ (2,359,452 ) As of December 31, 2019 Previously Adjustments As Corrected Consolidate Balance Sheet Current assets $ 577,944 $ 408,294 $ 986,238 Current liabilities $ 4,514,446 $ 249,007 $ 4,763,453 Working capital (deficit) $ (3,936,502 ) $ 159,287 $ (3,777,215 ) Total assets $ 1,550,298 $ 102,607 $ 1,652,905 Total liabilities $ 4,514,446 $ 249,007 $ 4,763,453 Total stockholders' deficit $ (2,964,148 ) $ (146,400 ) $ (3,110,548 ) For the Year Ended June 30, 2019 (A) Previously Reported Adjustments As Corrected Consolidated Statements of Operations Revenues $ 352,172 $ - $ 352,172 Operating expenses $ 2,263,722 $ (264,167 ) $ 1,999,555 Loss from operations $ (1,911,550 ) $ 264,167 $ (1,647,383 ) Other income (expenses) $ 2,686,793 $ - $ 2,686,793 Net income (loss) $ (4,598,343 ) $ 264,167 $ (4,334,176 ) Basic & diluted EPS $ (0.09 ) $ - $ (0.09 ) (A) The income statement impact of the errors was corrected in the quarter ended September 30, 2019. For the Three Months Ended September 30, 2019 Previously Reported Adjustments As Corrected Consolidated Statements of Operations Revenues $ 206,497 $ (160,000 ) $ 46,497 Operating expenses $ 570,858 $ (229,584 ) $ 341,274 Loss from operations $ (364,361 ) $ 69,584 $ (294,777 ) Other income (expenses) $ 218,803 $ - $ 218,803 Net income (loss) $ (583,164 ) $ 69,584 $ (513,580 ) Basic & diluted EPS $ (0.01 ) $ - $ (0.01 ) For the Six Months Ended December 31, 2019 Previously Reported Adjustments As Corrected Consolidated Statements of Operations Revenues $ 379,488 $ (271,706 ) $ 107,782 Operating expenses $ 1,326,290 $ (125,306 ) $ 1,200,984 Loss from operations $ (946,802 ) $ (146,400 ) $ (1,093,202 ) Other income (expenses) $ 557,320 $ - $ 557,320 Net income (loss) $ (1,504,122 ) $ (146,400 ) $ (1,650,522 ) Basic & diluted EPS $ (0.02 ) $ - $ (0.02 ) For the Three Months Ended December 31, 2019 Previously Reported Adjustments As Corrected Consolidated Statements of Operations Revenues $ 172,991 $ (111,706 ) $ 61,285 Operating expenses $ 755,432 $ 104,278 $ 859,710 Loss from operations $ (582,441 ) $ (215,984 ) $ (798,425 ) Other income (expenses) $ 338,517 $ - $ 338,517 Net income (loss) $ (920,958 ) $ (215,984 ) $ (1,136,942 ) Basic & diluted EPS $ (0.02 ) $ - $ (0.02 ) |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory | 2020 2019 Finished Goods-bars $ - $ 30,800 Finished Goods-ice cream 195,817 346,229 Raw materials - ingredients 26,309 25,477 Packaging 53,479 3,933 TOTAL $ 275,605 $ 406,439 |
Other Current Assets (Tables)
Other Current Assets (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of other current assets | June 30, June 30, Prepaid advertising costs $ 398,045 $ - Vendor deposits – Other $ 40 $ 1,000 TOTAL $ 398,085 $ 1,000 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of the intangible assets represents fees and expenses | June 30, June 30, 2020 2019 Intangible assets $ 1,000,000 $ - Amortization of intangible assets (500,000 ) - Impairment of intangible assets (500,000 ) TOTAL $ - $ - |
Other Current Liabilities (Tabl
Other Current Liabilities (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Other Current Liabilities [Abstract] | |
Schedule of other current liabilities | 2020 2019 Accrued consulting fees – related party $ 9,974 $ 33,974 Accrued interest 192,625 - TOTAL $ 202,599 $ 33,974 |
Convertible Notes Payable (Tabl
Convertible Notes Payable (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of convertible notes payable | Principal Debt Discount ($) Net Balance at June 30, 2018 1,576,024 (942,154 ) 633,870 Convertible notes payable issued during fiscal year ended June 30, 2019 1,602,005 - 1,602,005 Note paid (102,076 ) - (102,076 ) Notes converted into shares of common stock (1,327,953 ) - (1,327,953 ) Debt discount associated with new convertible notes - (1,482,314 ) (1,482,314 ) Amortization of debt discount - 1,794,209 1,794,209 Balance at June 30, 2019 1,748,000 (630,259 ) 1,117,741 Convertible notes payable issued during fiscal year ended June 30, 2020 2,148,400 - 2,148,400 Notes converted into shares of common stock (961,000 ) - (961,000 ) Debt discount associated with new convertible notes - (1,684,711 ) (1,684,711 ) Amortization of debt discount - 1,709,759 1,709,759 Balance at June 30, 2020 2,935,400 (605,211 ) 2,330,189 |
Derivative Liability (Tables)
Derivative Liability (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of reconciliation of derivative liability | Derivative liability as of June 30, 2018 $ 1,765,187 Initial derivative liability accounted for convertible notes payable issued during the period ended June 30, 2019 1,565,535 Change in derivative liability during the period 712,627 Reclassify derivative liability associated with Notes converted (2,736,601 ) Derivative liability as of June 30, 2019 $ 1,306,748 Initial derivative liability accounted for convertible notes payable issued during the period ended June 30, 2020 1,723,883 Change in derivative liability during the period (858,774 ) Reclassify derivative liability associated with Notes converted (581,219 ) Balance at June 30, 2020 $ 1,590,638 |
Line of Credit (Tables)
Line of Credit (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of short and long term borrowings | June 30, June 30, Line of Credit $ 3,897 $ 0 Total borrowings 3,897 0 Less: current portion 3,897 0 Long term debt $ - $ - |
Stockholders' Deficit (Tables)
Stockholders' Deficit (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
Schedule of aggregate intrinsic value of the warrants | Outstanding at Issued / Outstanding Exercise Price June 30, (exercised) in Expired June 30, $ 0.15 500,000 - 500,000 $ 0.20 105,000 - 105,000 $ 0.30 500,000 (400,000 ) - 100,000 $ 0.40 - 150,000 - 150,000 $ 0.75 300,000 - - 300,000 1,405,000 (250,000 ) - 1,155,000 Outstanding at Issued / Outstanding Exercise Price June 30, (exercised) in Expired June 30, $ 0.15 500,000 - 500,000 $ 0.20 105,000 - 105,000 $ 0.30 100,000 - 100,000 $ 0.40 150,000 - 150,000 $ 0.75 300,000 - - 300,000 1,155,000 - 1,155,000 |
Income Tax (Tables)
Income Tax (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of statutory income tax rates and effective tax rate | June 30, 2020 2019 Statutory U.S. federal rate (21.00 )% (21.00 )% Effect of higher U.S. Federal statutory tax rate - % - % State income taxes (net of federal tax benefit) (7.00 )% (7.00 )% Permanent differences 7.10 % 6.70 % Valuation allowance (20.9 )% (21.3 )% True up of net operating loss - % - % 0.0 % 0.0 % |
Schedule of deferred tax assets | 2020 2019 Deferred tax assets: Net operating loss carry-forwards $ 1,460,670 1,155,359 Valuation allowance (1,460,670 ) (1,155,359 ) Net deferred tax asset $ - $ - |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value hierarchy under assets and liabilities | Fiscal 2020 Fair Value Measurements Level 1 Level 2 Level 3 Total Fair Assets Other assets $ - $ - $ - $ - Total $ - $ - $ - $ - Liabilities Short and long-term debt $ $ - $ 2,935,400 $ 2,935,400 Total $ $ - $ 2,935,400 $ 2,935,400 Fiscal 2019 Fair Value Measurements Level 1 Level 2 Level 3 Total Fair Assets Other assets $ - $ - $ - $ - Total $ - $ - $ - $ - Liabilities Short and long-term debt $ $ - $ 1,748,000 $ 1,748,000 Total $ $ - $ 1,748,000 $ 1,748,000 Fiscal 2020 Fair Value Measurements Level 1 Level 2 Level 3 Total Fair Value Assets Other assets $ - $ - $ - $ - Total $ - $ - $ - $ - Liabilities Derivative Liabilities $ $ - $ 1,590,638 $ 1,590,638 Total $ $ - $ 1,590,638 $ 1,590,638 Fiscal 2019 Fair Value Measurements Level 1 Level 2 Level 3 Total Fair Value Assets Other assets $ - $ - $ - $ - Total $ - $ - $ - $ - Liabilities Derivative Liabilities $ $ - $ 1,306,748 $ 1,306,748 Total $ $ - $ 1,306,748 $ 1,306,748 |
Net Loss per Share of Common _2
Net Loss per Share of Common Stock (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of earnings per share, basic and diluted | 2020 2019 Numerator - basic and diluted loss per share net loss $ (4,412,063 ) $ (4,598,343 ) Net loss available to common stockholders $ (4,412,063 ) $ (4,598,343 ) Denominator – basic and diluted loss per share – weighted average common shares outstanding 57,443,347 47,827,114 Basic and diluted earnings per share $ (0.08 ) $ (0.09 ) |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Dec. 31, 2019 | Sep. 30, 2019 | Dec. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | ||
Consolidated Balance Sheet | |||||||
Current assets | $ 932,325 | $ 482,667 | |||||
Current liabilities | 5,413,472 | 2,955,272 | |||||
Total assets | 932,325 | 482,667 | |||||
Total stockholders' deficit | (4,481,147) | (2,472,605) | $ (2,658,954) | ||||
Consolidated Statements of Operations | |||||||
Revenues | 241,673 | 352,162 | |||||
Operating expenses | 2,965,548 | 2,263,722 | |||||
Loss from operations | (2,723,875) | (1,911,550) | |||||
Other income (expenses) | 1,688,188 | 2,686,793 | |||||
Net income (loss) | $ (4,412,063) | $ (4,598,343) | |||||
Basic & diluted EPS | $ (0.08) | $ (0.09) | |||||
Previously Reported [Member] | |||||||
Consolidated Balance Sheet | |||||||
Current assets | $ 577,944 | $ 858,216 | $ 577,944 | $ 482,667 | [1] | ||
Current liabilities | 4,514,446 | 3,287,252 | 4,514,446 | 2,955,272 | [1] | ||
Working capital (deficit) | (3,936,502) | (2,429,036) | (3,936,502) | (2,472,605) | [1] | ||
Total assets | 1,550,298 | 858,216 | 1,550,298 | 482,667 | [1] | ||
Total liabilities | 4,514,446 | 3,287,252 | 4,514,446 | 2,955,272 | [1] | ||
Total stockholders' deficit | (2,964,148) | (2,429,036) | (2,964,148) | (2,472,605) | [1] | ||
Consolidated Statements of Operations | |||||||
Revenues | 172,991 | 206,497 | 379,488 | 352,172 | [2] | ||
Operating expenses | 755,432 | 570,858 | 1,326,290 | 2,263,722 | [2] | ||
Loss from operations | (582,441) | (364,361) | (946,802) | (1,911,550) | [2] | ||
Other income (expenses) | 338,517 | 218,803 | 557,320 | 2,686,793 | [2] | ||
Net income (loss) | $ (920,958) | $ (583,164) | $ (1,504,122) | $ (4,598,343) | [2] | ||
Basic & diluted EPS | $ (0.02) | $ (0.01) | $ (0.02) | $ (0.09) | [2] | ||
Adjustments [Member] | |||||||
Consolidated Balance Sheet | |||||||
Current assets | $ 408,294 | $ 387,917 | $ 408,294 | $ 487,500 | [1] | ||
Current liabilities | 249,007 | 1,151,666 | 249,007 | 223,333 | [1] | ||
Working capital (deficit) | 159,287 | (763,749) | 159,287 | 264,167 | [1] | ||
Total assets | 102,607 | 1,221,250 | 102,607 | 487,500 | [1] | ||
Total liabilities | 249,007 | 1,151,666 | 249,007 | 223,333 | [1] | ||
Total stockholders' deficit | (146,400) | 69,584 | (146,400) | 264,167 | [1] | ||
Consolidated Statements of Operations | |||||||
Revenues | (111,706) | (160,000) | (271,706) | [2] | |||
Operating expenses | 104,278 | (229,584) | (125,306) | (264,167) | [2] | ||
Loss from operations | (215,984) | 69,584 | (146,400) | 264,167 | [2] | ||
Other income (expenses) | [2] | ||||||
Net income (loss) | $ (215,984) | $ 69,584 | $ (146,400) | $ 264,167 | [2] | ||
Basic & diluted EPS | [2] | ||||||
As Corrected [Member] | |||||||
Consolidated Balance Sheet | |||||||
Current assets | $ 986,238 | $ 1,246,133 | $ 986,238 | $ 970,167 | [1] | ||
Current liabilities | 4,763,453 | 4,438,918 | 4,763,453 | 3,178,605 | [1] | ||
Working capital (deficit) | (3,777,215) | (3,192,785) | (3,777,215) | (2,208,438) | [1] | ||
Total assets | 1,652,905 | 2,079,466 | 1,652,905 | 970,167 | [1] | ||
Total liabilities | 4,763,453 | 4,438,918 | 4,763,453 | 3,178,605 | [1] | ||
Total stockholders' deficit | (3,110,548) | (2,359,452) | (3,110,548) | (2,208,438) | [1] | ||
Consolidated Statements of Operations | |||||||
Revenues | 61,285 | 46,497 | 107,782 | 352,172 | [2] | ||
Operating expenses | 859,710 | 341,274 | 1,200,984 | 1,999,555 | [2] | ||
Loss from operations | (798,425) | (294,777) | (1,093,202) | (1,647,383) | [2] | ||
Other income (expenses) | 338,517 | 218,803 | 557,320 | 2,686,793 | [2] | ||
Net income (loss) | $ (1,136,942) | $ (513,580) | $ (1,650,522) | $ (4,334,176) | [2] | ||
Basic & diluted EPS | $ (0.02) | $ (0.01) | $ (0.02) | $ (0.09) | [2] | ||
[1] | The balance sheet impact of the errors was corrected in the quarter ended September 30, 2019. | ||||||
[2] | The income statement impact of the errors was corrected in the quarter ended September 30, 2019. |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details Textual) - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Summary of Significant Accounting Policies (Textual) | ||
Advertising costs | $ 403,639 | $ 732,297 |
Concentration risk, percentage | 10.00% | |
Impairment on intangible asset | $ 500,000 | |
Receivables concentration, description | As of June 30, 2020, the Company had receivables due from seven customers, two of whom accounted for over 20% of the outstanding balance. Four of the other five accounted for over 10% of the total balance. As of June 30, 2019, the Company had receivables due from six customers, three of whom accounted for over 20% of the outstanding balance. | |
Capitalized intangible asset and amortized costs | $ 1,000,000 | $ 0 |
Going Concern (Details)
Going Concern (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Going Concern (Textual) | ||
Net loss | $ (4,412,063) | $ (4,598,343) |
Negative cash flow from operations | (1,531,084) | (1,567,227) |
Accumulated deficit | $ (17,631,122) | $ (13,219,059) |
Customer Concentrations (Detail
Customer Concentrations (Details) | 12 Months Ended |
Jun. 30, 2020 | |
Customer Concentrations (Textual) | |
Customer concentrations, description | As of June 30, 2020, the Company had receivables due from seven customers, two of whom accounted for over 20% of the outstanding balance. Four of the other five accounted for over 10% of the total balance. As of June 30, 2019, the Company had receivables due from six customers, three of whom accounted for over 20% of the outstanding balance. |
Inventories (Details)
Inventories (Details) - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
Inventory Disclosure [Abstract] | ||
Finished Goods-bars | $ 30,800 | |
Finished Goods-ice cream | 195,817 | 346,229 |
Raw materials - ingredients | 26,309 | 25,477 |
Packaging | 53,479 | 3,933 |
TOTAL | $ 275,605 | $ 406,439 |
Other Current Assets (Details)
Other Current Assets (Details) - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid advertising costs | $ 398,045 | |
Vendor deposits - Other | 40 | 1,000 |
TOTAL | $ 398,085 | $ 1,000 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Intangible assets | $ 1,000,000 | |
Amortization of intangible assets | (500,000) | |
Impairment of intangible assets | (500,000) | |
TOTAL |
Intangible Assets (Details Text
Intangible Assets (Details Textual) | 12 Months Ended |
Jun. 30, 2020USD ($) | |
Intangible Assets (Textual) | |
Gain on extinguishment of debt | $ 560,000 |
Intangible asset, description | The elimination of $731,118 in total debt should payment be made totaling $166,224 in cash and approximately 4,000 pints of Nightfood ice cream. |
Reduction of debt | $ 731,118.33 |
Other Current Liabilities (Deta
Other Current Liabilities (Details) - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
Other Current Liabilities [Abstract] | ||
Accrued consulting fees - related party | $ 9,974 | $ 33,974 |
Accrued interest | 192,625 | |
TOTAL | $ 202,599 | $ 33,974 |
Convertible Notes Payable (Deta
Convertible Notes Payable (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Debt Disclosure [Abstract] | ||
Beginning balance, Principal | $ 1,748,000 | $ 1,576,024 |
Convertible notes payable issued during fiscal year ended, Principal | 2,148,400 | 1,602,005 |
Note paid, Principal | (102,076) | |
Notes converted into shares of common stock, Principal | (961,000) | (1,327,953) |
Debt discount associated with new convertible notes, Principal | ||
Amortization of debt discount, Principal | ||
Ending balance, Principal | 2,935,400 | 1,748,000 |
Beginning balance, Debt Discount | (630,259) | (942,154) |
Convertible notes payable issued, Debt Discount | ||
Note paid, Debt Discount | ||
Notes converted into shares of common stock, Debt Discount | ||
Debt discount associated with new convertible notes, Debt Discount | (1,684,711) | (1,482,314) |
Amortization of debt discount, Debt Discount | 1,709,759 | 1,794,209 |
Ending balance, Debt Discount | (605,211) | (630,259) |
Beginning balance, Net Value | 1,117,741 | 633,870 |
Convertible notes payable issued during fiscal year ended, Net Value | 2,148,400 | 1,602,005 |
Note paid, Net Value | 102,076 | |
Notes converted into shares of common stock, Net Value | (961,000) | (1,327,953) |
Debt discount associated with new convertible notes, Net Value | 1,684,711 | 1,482,314 |
Amortization of debt discount, Net Value | 1,794,209 | 1,794,209 |
Ending Balance, Net Value | $ 2,330,189 | $ 1,117,741 |
Convertible Notes Payable (De_2
Convertible Notes Payable (Details Textual) | Jun. 23, 2020USD ($)Customers | Apr. 30, 2020USD ($)Customers | Jun. 11, 2019USD ($)Customers | Dec. 18, 2018USD ($)Customers | Nov. 16, 2018USD ($)Customers | Jul. 02, 2018USD ($)Customers | Jun. 05, 2018USD ($)Customers | Apr. 30, 2018USD ($)Customers | Feb. 26, 2020USD ($)Customers | Feb. 06, 2020USD ($)Customers | Dec. 31, 2019USD ($)Customers | Nov. 07, 2019USD ($)Customers | Sep. 24, 2019USD ($)Customers | Aug. 29, 2019USD ($)Customers | Aug. 08, 2019USD ($)Customers | Jul. 05, 2019USD ($)Customers | Apr. 29, 2019USD ($)Customers | Feb. 14, 2019USD ($)Customers | Jan. 28, 2019USD ($)Customers | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) |
Additional paid in capital | $ 13,088,177 | $ 10,692,679 | |||||||||||||||||||
Financing cost | 88,762 | 95,805 | |||||||||||||||||||
Debt discount | $ 1,709,759 | $ 1,794,359 | |||||||||||||||||||
Convertible Notes Payable [Member] | June 30, 2020 [Member] | |||||||||||||||||||||
Debt discount | $ 129,700 | $ 106,916 | $ 0 | $ 0 | $ 0 | $ 0 | $ 99,218 | $ 94,064 | $ 75,205 | $ 43,074 | $ 27,482 | $ 37,833 | $ 26,452 | $ 2,627 | $ 0 | $ 0 | $ 0 | ||||
Convertible Notes Payable [Member] | June 30, 2019 [Member] | |||||||||||||||||||||
Debt discount | 227,713 | 60,425 | $ 48,795 | $ 1,134 | 0 | 0 | 141,204 | 56,821 | 131,528 | ||||||||||||
Convertible Notes Payable [Member] | June 30, 2020 [Member] | |||||||||||||||||||||
Debt discount | 0 | 0 | |||||||||||||||||||
Convertible Notes Payable [Member] | Convertible Promissory Note and a Security Purchase Agreement [Member] | |||||||||||||||||||||
Convertible notes payable | $ 205,700 | $ 205,700 | $ 300,000 | $ 130,000 | $ 130,000 | $ 207,000 | $ 210,000 | $ 225,000 | $ 187,000 | $ 200,000 | $ 150,000 | $ 150,000 | $ 150,000 | $ 300,000 | $ 300,000 | $ 300,000 | $ 208,000 | $ 104,000 | $ 234,000 | ||
Notes payable interest rate | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | ||
Convertible price for interest payment percentage | 70.00% | 70.00% | 70.00% | 65.00% | 65.00% | 60.00% | 60.00% | 60.00% | 70.00% | 70.00% | 70.00% | 70.00% | 70.00% | 70.00% | 70.00% | 70.00% | 70.00% | 70.00% | 65.00% | ||
Trading days immediately prior to conversion | Customers | 15 | 15 | 15 | 15 | 15 | 15 | 15 | 15 | 15 | 15 | 15 | 15 | 15 | 15 | 15 | 15 | 15 | 15 | 15 | ||
Maturity date | Jun. 23, 2021 | Apr. 30, 2021 | Jun. 11, 2020 | Dec. 18, 2019 | Nov. 16, 2019 | Jul. 12, 2019 | Jun. 6, 2019 | Apr. 30, 2019 | Feb. 6, 2021 | Feb. 6, 2021 | Dec. 31, 2020 | Nov. 7, 2020 | Sep. 24, 2020 | Aug. 29, 2020 | Aug. 8, 2020 | Jul. 5, 2020 | Apr. 29, 2020 | Feb. 14, 2020 | Jan. 28, 2020 | ||
Original discount, description | This note carried an Original Discount of 10% or $18,700 which was included in interest expense at the time of valuation. | This note carried an Original Discount of 10% or $18,700 which was included in interest expense at the time of valuation. | |||||||||||||||||||
Convertible Notes Payable [Member] | Derivatives and Hedging [Member] | |||||||||||||||||||||
Convertible notes payable | $ 205,700 | $ 205,700 | $ 300,000 | $ 130,000 | $ 130,000 | $ 207,000 | $ 210,000 | $ 225,000 | $ 187,000 | $ 200,000 | $ 150,000 | $ 150,000 | $ 150,000 | $ 300,000 | $ 300,000 | $ 300,000 | $ 208,000 | $ 104,000 | $ 234,000 | ||
Notes payable interest rate | 0.18% | 0.16% | 2.05% | 2.64% | 2.71% | 2.59% | 2.09% | 2.24% | 1.18% | 1.51% | 1.59% | 1.58% | 1.78% | 1.75% | 1.79% | 1.98% | 2.42% | 2.53% | 2.60% | ||
Fair value of notes payable | $ 132,236 | $ 128,369 | $ 240,217 | $ 128,976 | $ 131,898 | $ 257,842 | $ 265,498 | $ 287,174 | $ 150,268 | $ 156,061 | $ 189,172 | $ 121,875 | $ 118,009 | $ 234,052 | $ 254,082 | $ 239,759 | $ 170,098 | $ 90,567 | $ 226,452 | ||
Expected life | 1 year | 1 year | 1 year | 1 year | 1 year | 1 year | 1 year | 1 year | 1 year | 1 year | 1 year | 1 year | 1 year | 1 year | 1 year | 1 year | 1 year | 1 year | 1 year | ||
Volatility percentage | 108.00% | 106.00% | 16.00% | 144.00% | 150.00% | 183.00% | 200.00% | 202.00% | 118.00% | 113.00% | 115.00% | 122.00% | 113.00% | 113.00% | 113.00% | 118.00% | 118.00% | 136.00% | 135.00% | ||
Dividend yield percent | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | ||
Net charge | $ 1,898 | $ 50,842 | $ 55,498 | $ 62,174 | |||||||||||||||||
Financing cost | $ 39,172 | ||||||||||||||||||||
Conversion loss | $ 36,927 | $ 19,845 | $ 73,760 | $ 180,755 | 4,098 | $ 80,394 | |||||||||||||||
Note retired | $ 50,000 |
Derivative Liability (Details)
Derivative Liability (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Beignning balance | $ 1,306,748 | $ 1,765,187 |
Initial derivative liability accounted for convertible notes payable issued | 1,723,883 | 1,565,535 |
Change in derivative liability during the period | (858,774) | 712,627 |
Reclassify derivative liability associated with Notes converted | (581,219) | (2,736,601) |
Balance at June 30, 2020 | $ 1,590,638 | $ 1,306,748 |
Derivative Liability (Details T
Derivative Liability (Details Textual) | 12 Months Ended |
Jun. 30, 2020USD ($) | |
Derivative Liability (Textual) | |
Gain in fair value of derivative | $ 858,774 |
Line of Credit (Details)
Line of Credit (Details) - USD ($) | Jun. 30, 2020 | Mar. 19, 2020 | Jun. 30, 2019 |
Debt Disclosure [Abstract] | |||
Line of Credit | $ 3,897 | $ 200,000 | $ 0 |
Total borrowings | 3,897 | 0 | |
Less: current portion | 3,897 | 0 | |
Long term debt |
Line of Credit (Details Textual
Line of Credit (Details Textual) - USD ($) | Mar. 19, 2020 | Jun. 30, 2020 | Jun. 30, 2019 |
Line of Credit (Textual) | |||
Interest expense | $ 463 | $ 0 | |
Line of Credit | $ 200,000 | $ 3,897 | $ 0 |
Gross value | 5,000 | ||
Payment value | $ 368 |
Stockholders' Deficit (Details)
Stockholders' Deficit (Details) - $ / shares | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Outstanding Warrants, Beginning | 1,155,000 | 1,405,000 |
Outstanding Warrants, Issued / (exercised) in 2020 | (250,000) | |
Outstanding Warrants, Expired | ||
Outstanding Warrants, Ending | 1,155,000 | 1,155,000 |
0.15 [Member] | ||
Outstanding Warrants, Exercise Price [$ / Shares] | $ 0.15 | $ 0.15 |
Outstanding Warrants, Beginning | 500,000 | 500,000 |
Outstanding Warrants, Issued / (exercised) in 2020 | ||
Outstanding Warrants, Expired | ||
Outstanding Warrants, Ending | 500,000 | 500,000 |
0.20 [Member] | ||
Outstanding Warrants, Exercise Price [$ / Shares] | $ 0.20 | $ 0.20 |
Outstanding Warrants, Beginning | 105,000 | 105,000 |
Outstanding Warrants, Issued / (exercised) in 2020 | ||
Outstanding Warrants, Expired | ||
Outstanding Warrants, Ending | 105,000 | 105,000 |
0.30 [Member] | ||
Outstanding Warrants, Exercise Price [$ / Shares] | $ 0.30 | $ 0.30 |
Outstanding Warrants, Beginning | 100,000 | 500,000 |
Outstanding Warrants, Issued / (exercised) in 2020 | (400,000) | |
Outstanding Warrants, Expired | ||
Outstanding Warrants, Ending | 100,000 | 100,000 |
0.40 [Member] | ||
Outstanding Warrants, Exercise Price [$ / Shares] | $ 0.40 | $ 0.40 |
Outstanding Warrants, Beginning | 150,000 | |
Outstanding Warrants, Issued / (exercised) in 2020 | 150,000 | |
Outstanding Warrants, Expired | ||
Outstanding Warrants, Ending | 150,000 | 150,000 |
0.75 [Member] | ||
Outstanding Warrants, Exercise Price [$ / Shares] | $ 0.75 | $ 0.75 |
Outstanding Warrants, Beginning | 300,000 | 300,000 |
Outstanding Warrants, Issued / (exercised) in 2020 | ||
Outstanding Warrants, Expired | ||
Outstanding Warrants, Ending | 300,000 | 300,000 |
Stockholders' Deficit (Details
Stockholders' Deficit (Details Textual) - USD ($) | Jul. 09, 2018 | Jun. 30, 2020 | Jun. 30, 2019 |
Common stock, par value | $ 0.001 | $ 0.001 | |
Common stock, shares issued | 61,796,680 | 53,773,856 | |
Common stock, shares outstanding | 61,796,680 | 53,773,856 | |
Common stock issued for services | $ 308,768 | $ 345,657 | |
Common stock issued for interest | 88,762 | 95,805 | |
Issuance of common stock for convertible debt | $ 6,056,168 | 1,327,953 | |
Issuance of common stock for sale | 50,000 | ||
Issuance of common stock for payment | 63,850 | ||
Issuance of common stock for the exercise of warrants | $ 120,000 | ||
Common stock, Shares authorized | 200,000,000 | 200,000,000 | |
Preferred stock, Shares authorized | 1,000,000 | 1,000,000 | 1,000,000 |
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 |
Designated preferred shares voting, description | The 1,000,000 shares 10,000 shares are designated as Series A preferred Stock Holders of Common Stock are each entitled to cast 100,000 votes for each Share held of record on all matters presented to shareholders. | ||
Description of ownership | In addition to his ownership of the common stock, Mr. Folkson owns 1,000 shares of our Series A Preferred Stock ("A Stock") which votes with the common stock and has an aggregate of 100,000,000 votes. | ||
Warrants expiration term | 4 years | ||
Aggregate intrinsic value of warrants | $ 28,025 | $ 318,450 | |
Loss on fair value of shares issued upon notes conversion | 977,000 | 2,736,601 | |
Common Stock [Member] | |||
Common stock issued for services | $ 1,386 | $ 484 | |
Common stock issued for services, shares | 1,385,990 | 483,808 | |
Common stock issued for interest | $ 581 | $ 668 | |
Common stock issued for interest, shares | 580,666 | 667,959 | |
Issuance of common stock for convertible debt, shares | 961,000 | 9,247,414 | |
Issuance of common stock for sale, shares | 84,389 | ||
Issuance of common stock for payment, shares | 281,957 | ||
Issuance of common stock for the exercise of warrants, shares | 400,000 | ||
Warrants, description | A portion of the 500,000 warrants shown below at an exercise price of $.15 have not yet vested. These warrants were issued as compensation for a four-year advisory agreement. 150,000 warrants vested on July 24, 2018, another 150,000 on July 24, 2019, another would vest 150,000 on July 24, 2020, and the remaining 50,000 on July 24, 2021, should advisor complete the term of his engagement. | ||
Loss on fair value of shares issued upon notes conversion |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |
Mar. 31, 2015 | Jun. 30, 2020 | Jun. 30, 2019 | |
Related Party Transactions (Textual) | |||
Consulting fee (per month) | $ 6,000 | ||
Accrued expense-related party | $ 9,974 | $ 33,974 | |
Related party transaction, description | The Company made bonuses available to Folkson upon the Company hitting certain revenue milestones of $1,000,000 in a quarter and $3,000,000 in a quarter. Achieving those milestones would earn Folkson warrants with a $.50 and $1 strike price which would need to be exercised within 90 days of the respective quarterly or annual filing. | ||
Mr. Folkson [Member] | |||
Related Party Transactions (Textual) | |||
Consulting fee (per month) | $ 6,000 | ||
Accrued expense-related party | $ 72,000 | $ 72,000 |
Income Tax (Details)
Income Tax (Details) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||
Statutory U.S. federal rate | (21.00%) | (21.00%) |
Effect of higher U.S. Federal statutory tax rate | ||
State income taxes (net of federal tax benefit) | (7.00%) | (7.00%) |
Permanent differences | 7.10% | 6.70% |
Valuation allowance | (20.90%) | (21.30%) |
True up of net operating loss | ||
Effective tax rate total | 0.00% | 0.00% |
Income Tax (Details 1)
Income Tax (Details 1) - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
Deferred tax assets: | ||
Net operating loss carry-forwards | $ 1,460,670 | $ 1,155,359 |
Valuation allowance | (1,460,670) | (1,155,359) |
Net deferred tax asset |
Income Tax (Details Textual)
Income Tax (Details Textual) | 12 Months Ended |
Jun. 30, 2020USD ($) | |
Income Tax (Textual) | |
U.S. federal net operating losses | $ 7,358,518 |
Operating loss carry forwards expiration period, description | Expire between 2031 and 2037 |
Net change in total valuation allowance | $ 398,550 |
Net operating loss carryforwards, description | The Company experience a more than 50% change in its ownership over a 3 year period. |
Net operating loss carry-forwards | $ 2,614,000 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments (Details) - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
Assets | ||
Other assets | ||
Total | ||
Liabilities | ||
Short and long-term debt | 2,935,400 | 1,748,000 |
Total | 2,935,400 | 1,748,000 |
Level 1 [Member] | ||
Assets | ||
Other assets | ||
Total | ||
Liabilities | ||
Short and long-term debt | ||
Total | ||
Level 2 [Member] | ||
Assets | ||
Other assets | ||
Total | ||
Liabilities | ||
Short and long-term debt | ||
Total | ||
Level 3 [Member] | ||
Assets | ||
Other assets | ||
Total | ||
Liabilities | ||
Short and long-term debt | 2,935,400 | 1,748,000 |
Total | $ 2,935,400 | $ 1,748,000 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments (Details Textual) - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
Fair Value of Financial Instruments (Textual) | ||
Derivative liabilities from related parties | $ 1,590,638 | $ 1,306,748 |
Net Loss per Share of Common _3
Net Loss per Share of Common Stock (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Earnings Per Share [Abstract] | ||
Numerator - basic and diluted loss per share net loss | $ (4,412,063) | $ (4,598,343) |
Net loss available to common stockholders | $ (4,412,063) | $ (4,598,343) |
Denominator - basic and diluted loss per share - weighted average common shares outstanding | 57,443,347 | 47,827,114 |
Basic and diluted earnings per share | $ (0.08) | $ (0.09) |
Net Loss per Share of Common _4
Net Loss per Share of Common Stock (Details Textual) - shares | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Net Loss per Share of Common Stock (Textual) | ||
Conversion of common stock | 24,638,241 | 8,538,462 |
Warrants exercisable | 1,155,000 | 1,155,000 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2020 | Oct. 13, 2020 | Aug. 12, 2020 | |
Noteholder [Member] | |||
Converted of principal | $ 347,000 | ||
Interest of outstanding notes to stock | $ 36,448.23 | ||
Average conversion price | $ .117 | ||
Shares issued to noteholder | 3,288,917 | ||
Convertible promissory note and security purchase agreement | Subsequent Event [Member] | |||
Convertible notes payable | $ 205,700 | $ 205,700 |