Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Sep. 30, 2020 | Nov. 20, 2020 | |
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-Q | |
Document Period End Date | Sep. 30, 2020 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2021 | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 66,741,706 | |
Entity File Number | 000-55406 | |
Entity Interactive Data Current | Yes | |
Entity Incorporation Status Country Code | NV |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2020 | Jun. 30, 2020 |
Current assets: | ||
Cash | $ 8,360 | $ 197,622 |
Accounts receivable – net | 65,053 | 61,013 |
Inventories | 213,384 | 275,605 |
Other current assets | 272,032 | 398,085 |
Total current assets | 558,829 | 932,325 |
Total assets | 558,829 | 932,325 |
Current liabilities: | ||
Accounts payable | 1,147,502 | 1,286,149 |
Accrued expense-related party | 9,974 | 9,974 |
Accrued expense | 56,923 | |
Accrued interest | 214,402 | 192,625 |
Short term borrowings - line of credit | 2,794 | 3,897 |
Convertible notes payable - net of discount | 2,348,239 | 2,330,189 |
Fair value of derivative liabilities | 1,357,245 | 1,590,638 |
Total current liabilities | 5,137,079 | 5,413,472 |
Commitments and contingencies | ||
Stockholders' deficit: | ||
Preferred stock, ($0.001 par value, 1,000,000 shares authorized, and 1,000 issued and outstanding as of September 30, 2020 and 1,000 outstanding as of June 30, 2020, respectively) | 1 | 1 |
Common stock, ($0.001 par value, 200,000,000 shares authorized, and 65,085,597 issued and outstanding as of September 30, 2020 and 61,796,680 outstanding as of June 30, 2020, respectively) | 65,086 | 61,797 |
Additional paid in capital | 13,931,609 | 13,088,177 |
Accumulated deficit | (18,574,946) | (17,631,122) |
Total stockholders' deficit | (4,578,250) | (4,481,147) |
Total Liabilities and Stockholders' Deficit | $ 558,829 | $ 932,325 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2020 | Jun. 30, 2020 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 65,085,597 | |
Common stock, shares outstanding | 65,085,597 | 61,796,680 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 1,000 | |
Preferred stock, shares outstanding | 1,000 | 1,000 |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Statements of Operations - USD ($) | 3 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Income Statement [Abstract] | ||
Revenues | $ 126,983 | $ 46,497 |
Operating expenses | ||
Cost of product sold | 229,696 | 146,500 |
Selling, general and administrative | 433,330 | 28,107 |
Amortization of intangibles | 0 | 166,667 |
Total operating expenses | 663,026 | 341,274 |
Loss from operations | (536,043) | (294,777) |
Interest expense - bank debt | 337 | |
Interest expense - shareholder | 83,955 | 26,598 |
Loss on extinguishment of debt upon notes conversion | 188,397 | |
Change in derivative liability | (207,524) | (190,062) |
Interest expense - other | 322,739 | 382,267 |
Other expense- non cash | 19,877 | |
Total other expense | 407,781 | 218,803 |
Provision for income tax | ||
Net loss | $ (943,824) | $ (513,580) |
Basic and diluted net loss per common share | $ (0.01) | $ (0.01) |
Weighted average shares of capital outstanding - basic and diluted | 63,442,930 | 54,482,700 |
Unaudited Condensed Consolida_2
Unaudited Condensed Consolidated Statements of Changes in Stockholders' Deficit - USD ($) | Common Stock | Preferred Stock | Additional Paid-in Capital | Accumulated Deficit | Total |
Balance at Jun. 30, 2019 | $ 53,774 | $ 1 | $ 10,692,679 | $ (13,219,059) | $ (2,472,605) |
Balance, shares at Jun. 30, 2019 | 53,773,856 | 1,000 | |||
Common stock issued for interest | $ 110 | 26,487 | 26,597 | ||
Common stock issued for interest, shares | 110,404 | ||||
Issuance of common stock for debt conversion | $ 1,409 | 335,591 | 337,000 | ||
Issuance of common stock for debt conversion, shares | 1,409,349 | ||||
Common stock issued for services | $ 123 | 49,274 | 49,397 | ||
Common stock issued for services, shares | 122,762 | ||||
Loss on fair value of shares issued upon debt conversion | 213,739 | 213,739 | |||
Net loss | (513,580) | (513,580) | |||
Balance at Sep. 30, 2019 | $ 55,416 | $ 1 | 11,317,770 | (13,732,639) | (2,359,452) |
Balance, shares at Sep. 30, 2019 | 55,416,371 | 1,000 | |||
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 | |||
Common stock issued for interest | $ 313 | 36,165 | 36,478 | ||
Common stock issued for interest, shares | 312,938 | ||||
Issuance of common stock for debt conversion | $ 2,976 | 344,024 | 347,000 | ||
Issuance of common stock for debt conversion, shares | 2,975,979 | ||||
Issuance of warrants | 65,711 | 65,711 | |||
Loss on fair value of shares issued upon debt conversion | 397,532 | 397,532 | |||
Net loss | (943,824) | (943,824) | |||
Balance at Sep. 30, 2020 | $ 65,086 | $ 1 | $ 13,931,609 | $ (18,574,946) | $ (4,578,250) |
Balance, shares at Sep. 30, 2020 | 65,085,597 | 1,000 |
Unaudited Condensed Consolida_3
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) | 3 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (943,824) | $ (513,580) |
Adjustments to reconcile net loss to net cash used in operations activities: | ||
Warrants issued for services | 65,711 | |
Stock issued for services | 49,397 | |
Stock issued for interest | 26,598 | |
Amortization of debt discount | 322,739 | 382,267 |
Deferred financing fees and financing cost | 45,577 | |
Change in derivative liability | (207,524) | (190,062) |
Loss on extinguishment of debt upon notes conversion | 188,397 | |
Amortization of intangible assets | 166,667 | |
Change in operating assets and liabilities | ||
Change in accounts receivable | (4,040) | (135,967) |
Change in inventory | 62,221 | (30,583) |
Change in other current assets | 126,053 | (520,000) |
Change in accounts payable | (81,725) | 804,181 |
Change in accrued expenses | 58,256 | (12,001) |
Net cash used in operating activities | (368,159) | 26,916 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Cash paid for purchase of intangible assets | (1,000,000) | |
Net cash used in investing activities | ||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from the issuance of debt-net | 180,000 | 1,050,000 |
Borrowings on line of credit | (1,103) | |
Net cash provided by financing activities | 178,897 | 1,050,000 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (189,262) | 76,916 |
Cash and cash equivalents, beginning of period | 197,622 | 30,142 |
Cash and cash equivalents, end of period | 8,360 | 107,058 |
Cash Paid For: | ||
Interest | 337 | |
Income taxes | ||
Summary of Non-Cash Investing and Financing Information: | ||
Initial derivative liability and debt discount accounted | 126,029 | 845,903 |
Derivative liability reclassed to loss on extinguishment of debt upon notes conversion | 189,257 | |
Stock issued for conversion of debt | 347,000 | 337,000 |
Stock Issued for Interest | 36,478 | 26,597 |
True-up adjustment in debt discount and derivative liability | $ 37,360 |
Description of Business
Description of Business | 3 Months Ended |
Sep. 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 snack products specifically formulated for nighttime snacking to help consumers satisfy nighttime cravings in a better, healthier, more sleep friendly way. Management believes Nightfood is the first brand to achieve mainstream distribution of snacks focused on better sleep, and expects the category of "sleep-friendly" snacking to become an important segment of the total snacking market in coming years. Munchies has acquired a portfolio of intellectual property around the brand name Half-Baked, and intends to license said IP to operators in the cannabis edibles space and other related spaces. ● 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 | 3 Months Ended |
Sep. 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). Interim Financial Statements These unaudited condensed consolidated financial statements for the three (3) months ended September 30, 2020 and 2019, respectively, reflect all adjustments including normal recurring adjustments, which, in the opinion of management, are necessary to present fairly the financial position, results of operations and cash flows for the periods presented in accordance with the accounting principles generally accepted in the United States of America. These interim unaudited condensed consolidated financial statements should be read in conjunction with the Company's consolidated financial statements and notes thereto for the years ended June 30, 2020 and 2019, respectively, which are included in the Company's June 30, 2020 Annual Report on Form 10-K filed with the United States Securities and Exchange Commission on October 13, 2020. The Company assumes that the users of the interim financial information herein have read, or have access to, the audited consolidated financial statements for the preceding period, and that the adequacy of additional disclosure needed for a fair presentation may be determined in that context. The results of operations for the three (3) months ended September 30, 2020 are not necessarily indicative of results for the entire year ending June 30, 2021. We made certain reclassifications to prior period amounts to conform with the current year's presentation. These reclassifications did not have a material effect on our condensed consolidated statement of financial position, results of operations or cash flows. 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 depreciation and amortization, the valuation for non-cash issuances of common stock, and the website, income taxes and contingencies, valuing convertible notes for BCF and derivative liability, among others. 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. The Company has no minimum purchase commitments with its vendors. Advertising Costs ● Adv ertising costs are expensed when incurred and are included in advertising and promotional expense in the accompanying statements of operations. Although not traditionally thought of by many as "advertising costs", the Company includes expenses related to graphic design work, package design, website design, domain names, and product samples in the category of "advertising costs". The Company reported advertising costs of $185,289 and $198,270 for the three months ended September 30, 2020 and 2019, respectively Further, as discussed on footnote 3, due to the reclassification $396,250 expenses was reversed and set off with the advertising costs incurred during 201 9. 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 to retailers and wholesalers. ● 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 September 30, 2020 and June 30, 2020, the Company did not have any uninsured cash deposits. 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 ● 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 Trinomial Tree 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 derivative liability under the line item "change in derivative liability". 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 Trinomial Tree 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. Stock-Based Compensation The Company accounts for share-based awards issued to employees in accordance with FASB ASC 718. Accordingly, employee share-based payment compensation is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the requisite service period. Additionally, share-based awards to non-employees are expensed over the period in which the related services are rendered at their fair value. The Company applies ASC 718, "Equity Based Payments to Non-Employees", with respect to options and warrants issued to non-employees. Customer Concentration ● During the three months ended September 30, 2020, the Company had one customer account for approximately 39% of the gross sales. One other customer accounted for approximately 21% of gross sales, and two other customers accounted for over 9% of gross sales. During the three months ended September 30, 2019, one customer accounted for approximately 34% of the gross sales while two other customers accounted for over 10% of gross sales. As the Company continues to grow its distribution base, it is anticipated that revenue distribution will become less concentrated. Vendor Concentration During the quarter ended June 30, 2020, three vendors accounted for more than 10% of our operating expenses. During the quarter ended June 30, 2019, two vendors accounted for more than 10% of our operating expenses. Receivables Concentration ● As of September 30, 2020, the Company had receivables due from seven customers, two customers of which each accounted for over 20% of the outstanding balance. Three of the other five, each accounted for 10% of the total balance. 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. Income/Loss Per Share ● Net income/loss per share data for both the three-month periods ending September 30, 2020 and 2019, are based on net income/loss available to common shareholders divided by the weighted average of the number of common shares outstanding. The Company does not present a diluted Earnings per share as the convertible debt and interest that is convertible into shares of the Company's common stock would not be included in this computation, as the Company is generating a loss and therefore these shares would be antidilutive. 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 period ended September 30, 2020 and 2019, the Management determined and impaired $-0- and $-0-, respectively as impairment on intangible asset 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, which changes the accounting and earnings per share for certain instruments with down round features. The amendments in this ASU should be applied using a cumulative-effect adjustment as of the beginning of the fiscal year or retrospective adjustment to each period presented and is effective for annual periods beginning after December 15, 2018, and interim periods within those periods. We adopted this guidance effective July 1, 2019. The adoption of this guidance did not materially impact our financial statements and related disclosures. 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 adoption of this guidance did not materially impact our financial statements and related disclosures. 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 adoption of this guidance did not materially impact our financial statements and related disclosures. 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 adoption of this guidance did not materially impact our financial statements and related disclosures. The Company will continue to monitor these emerging issues to assess any potential future impact on its financial statements. |
Restatement of Prior Financial
Restatement of Prior Financial Information | 3 Months Ended |
Sep. 30, 2020 | |
Accounting Changes and Error Corrections [Abstract] | |
Restatement of Prior Financial Information | 3. Restatement of Prior Financial Information Subsequent to Form 10K for the year ended June 30, 2019 filing, during the interim reviews 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 was determined that revenue relating to slotting fees, which were 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 ) 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 ) |
Going Concern
Going Concern | 3 Months Ended |
Sep. 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 three months ended September 30, 2020, the Company had a net loss of $943,824, negative cash flow from operations and other expenses related to financing activities of $368,159 and accumulated deficit of $18,574,946. 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 utilize 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 for one year from the date the financial statements are issued. 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. |
Accounts Receivable
Accounts Receivable | 3 Months Ended |
Sep. 30, 2020 | |
Receivables [Abstract] | |
Accounts receivable | 4. Accounts receivable ● The Company's accounts receivable arise primarily from the sale of the Company's ice cream. 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. 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 accounts receivable allowances for September 30, 2020 and June 30, 2020, respectively. |
Inventories
Inventories | 3 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories | 5. Inventories ● Inventory consists of the following at September 30, 2020 and June 30, 2020, September 30, June 30, Finished goods – ice cream $ 141,602 $ 195,817 Raw material – ingredients 24,515 26,309 Packaging 47,267 53,479 TOTAL $ 213,384 $ 275,605 Inventories are stated at the lower of cost 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 | 3 Months Ended |
Sep. 30, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Current Assets | 6. Other current assets ● Other current assets consist of the following vendor deposits at September 30, 2020 and June 30, 2020. The majority of this amount relates to deposits towards distribution and marketing partnerships, September 30, June 30, Prepaid advertising costs $ 263,822 $ 398,045 Vendor deposits – Other $ 8,210 $ 40 TOTAL $ 272,032 $ 398,085 |
Intangible Assets
Intangible Assets | 3 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | 7. Intangible Assets Intangible assets consist of the following at September 30, 2020 and June 30, 2020. 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. September 30, June 30, 2020 2020 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 is currently included in the liabilities section of our balance sheet. |
Other Current Liabilities
Other Current Liabilities | 3 Months Ended |
Sep. 30, 2020 | |
Other Current Liabilities [Abstract] | |
Other Current Liabilities | 8. Other Current Liabilities ● Other current liabilities consist of the following at September 30, 2020 and June 30, 2020, September 30, June 30, Accrued consulting fees – related party $ 9,974 $ 9,974 Accrued interest 214,402 192,625 Accrued slotting fees 56,923 - TOTAL $ 281,299 $ 202,599 |
Notes Payable
Notes Payable | 3 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Notes Payable | 9. Notes Payable ● Notes Payable consist of the following at September 30, 2020, 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 September 30, 2020, and June 30, 2020, the debt discount was $0. 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 trading 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. This note has been successfully retired via conversion into shares during the three months ended September 30, 2019. The Company fair valued the notes as of conversion date and accounted for a gain on conversion of $25,398 included under line item "change in derivative liability" and also, reclassed the related $74,472 derivative liability balance into additional paid in capital. 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 trading 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 September 30, 2020, and June 30, 2020, the debt discount was $0 and $0, respectively. $50,000 of the note has been successfully retired via conversion into shares during the year ended June 30, 2020 and $54,000 of the note has been successfully retired via conversion into shares during the three months ended September 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" during 2020 fiscal year and accounted for a loss on conversion of $36,242. 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 trading 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 September 30, 2020, and June 30, 2020, the debt discount was $0 and $0, respectively. $208,000 of the note has been successfully retired via conversion into shares during the three months ended September 30, 2020. The Company fair valued the notes as of conversion date and accounted for a loss on conversion of $109,561 included under line item "Loss on debt extinguishment upon note conversion, net". 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 trading 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 September 30, 2020 and June 30, 2020, the debt discount was $0 and $46,726, respectively. The Company fair valued the notes as of conversion date and accounted for a loss on conversion of $42,595 included under line item "Loss on debt extinguishment upon note conversion, net". 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 trading 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 September 30, 2020 and June 30, 2020, the debt discount was $0 and $2,627, respectively. 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 trading 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 September 30, 2020, and June 30, 2020 the debt discount was $0 and $26,452, respectively. 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 trading 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 $300k Notes, no charge was recorded to "Financing cost" for the excess of the fair value of the note. As of September 30, 2020, and June 30, 2020 the debt discount was $0 and $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 trading 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 September 30, 2020 and June 30, 2020, the debt discount was $0 and $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 trading 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 September 30, 2020 and June 30, 2020, the debt discount was $12,354 and $43,074, respectively. 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 trading 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 exceeded 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 September 30, 2020 and June 30, 2020, the debt discount was $37,797 and $75,205, respectively. 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 trading 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 September 30, 2020 and June 30, 2020, the debt discount was $54,728 and $94,064, respectively. 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 trading 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 September 30, 2020 and June 30, 2020, the debt discount was $61,342 and $99,218, respectively. 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 September 30, 2020 and June 30, 2020, the debt discount was $74,560 and $106,916, respectively. 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 September 30, 2020 and June 30, 2020, the debt discount was $96,369 and $129,700, respectively. On August 12, 2020, the Company entered into a convertible promissory note and a security purchase agreement dated August 12, 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 August 12, 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 $126,029, with the following assumptions: risk-free interest rate of 0.13%, expected life of 1 year, volatility of 101%, and expected dividend yield of zero. As of September 30, 2020, the debt discount was $109,110. Below is a reconciliation of the convertible notes payable as presented on the Company's balance sheet as of September 30, 2020: Principal Debt Discount ($) Net 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 Convertible notes payable issued during three months ended September 30, 2020 205,700 - 205,700 Notes converted into shares of common stock (347,000 ) - (347,000 ) Debt discount associated with new convertible notes - (126,029 ) (126,029 ) Amortization of debt discount - 322,739 322,739 True-up adjustment in debt discount and derivative liability - (37,360) (37,360) Balance at September 30, 2020 2,794,100 (445,861 ) 2,348,239 |
Derivative Liability
Derivative Liability | 3 Months Ended |
Sep. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Liability | 10. 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 three month period ended September 30, 2020, the Company recorded a change in fair value of derivative $207,524. The Company will measure the fair value of each derivative instrument in future reporting periods and record the change 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 September 30, 2020: 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, 2019 1,723,883 Change in derivative liability during the period (858,774 ) Reclassify derivative liability associated with Notes converted (581,219 ) Derivative liability as of June 30, 2020 $ 1,590,638 Initial derivative liability accounted for convertible notes payable issued during the period ended September 30, 2020 126,029 True-up adjustment in debt discount and derivative liability 37,360 Change in derivative liability during the period (207,524 ) Reclassify derivative liability associated with Notes converted (189,257) Balance at September 30, 2020 $ 1,357,245 |
Line of Credit
Line of Credit | 3 Months Ended |
Sep. 30, 2020 | |
Line of Credit [Abstract] | |
Line of Credit | 11. 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). As of September 30, 2020, six payments had 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. Sept. 30, June 30, Line of Credit $ 2,794 $ 3,897 Total borrowings 2,794 3,897 Less: current portion 2,794 3,897 Long term debt $ - $ - Interest expense for the three months ended September 30, 2020 and 2019, totaled $337 and $0, respectively. |
Capital Stock Activity
Capital Stock Activity | 3 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Capital Stock Activity | 12. Capital Stock Activity ● The Company had 65,085,597 and 61,796,680 shares of its $0.001 par value common stock issued and outstanding as of September 30, 2020 and June 30, 2020 respectively. ● During the three months ended September 30, 2020 the Company issued 2,975,979 shares in regards to debt being converted into stock valued at $347,000, and issued 312,938 shares of common stock valued at $36,478 as part of a loan agreement and payment of interest as part of the debt conversion. During the three months ended September 30, 2019 the Company issued 122,762 shares of common stock for services valued at $49,397, issued 1,409,349 shares in regards to debt being converted into stock valued at $337,000, and issued 110,404 shares of common stock valued at $26,598 as part of a loan agreement and payment of interest as part of the debt conversion. |
Warrants
Warrants | 3 Months Ended |
Sep. 30, 2020 | |
Warrants [Abstract] | |
Warrants | 13. Warrants The following is a summary of the Company's outstanding common stock purchase warrants. Of the 500,000 warrants shown below at an exercise price of $.15, 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 150,000 vested on July 24, 2020, and the remaining 50,000 will vest on July 24, 2021, should advisor complete the term of his engagement. These warrants were all accounted for in Fiscal 2020. During the three months ended September 30, 2020 the Company entered into a warrant agreement with one of the Company's vendors issuing 500,000 warrants at a strike price of $0.50 having a term of five years. The Company valued these warrants using the Black Scholes model utilizing a 107.93% volatility and a risk-free rate of 0.29% The aggregate intrinsic value of the warrants as of September 30, 2020 is $-0-. Outstanding at Outstanding Exercise Price June 30, Issued / (Exercised) in 2020 Expired September 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 $ 0.50 - 500,000 - 500,000 $ 0.75 300,000 - - 300,000 1,155,000 500,000 - 1,655,000 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | 14. 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: September 30, 2020 Fair Value Measurements Level 1 Level 2 Level 3 Total Fair Assets Other assets $ - $ - $ - $ - Total $ - $ - $ - $ - Liabilities Short and long-term debt $ $ - $ 2,794,100 $ 2,794,100 Total $ $ - $ 2,794,100 $ 2,794,100 Fiscal 2019 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 2020 Fair Value Measurements Level 1 Level 2 Level 3 Total Fair Assets Other assets $ - $ - $ - $ - Total $ - $ - $ - $ - Liabilities Derivative Liabilities $ $ - $ 1,357,245 $ 1,357,245 Total $ $ - $ 1,357,245 $ 1,357,245 Fiscal 2020 Fair Value Measurements Level 1 Level 2 Level 3 Total Fair Assets Other assets $ - $ - $ - $ - Total $ - $ - $ - $ - Liabilities Derivative Liabilities $ $ - $ 1,590,638 $ 1,590,638 Total $ $ - $ 1,590,638 $ 1,590,638 Management considers all of its derivative liabilities to be Level 3 liabilities. At September 30, 2020 and June 30, 2020, respectively the Company had outstanding derivative liabilities, including those from related parties of $1,357,245 and $1,590,638, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies: | 15. Commitments and Contingencies: The Company has entered into certain consulting agreements which carry commitments to pay advisors and consultants should certain events occur. An agreement is in place with one Company Advisor that calls for total compensation over the four year Advisor Agreement of 500,000 warrants with an exercise price of $.15 of which 450,000 have vested, should the advisor complete the entire term of the engagement, the remaining 50,000 warrants would vest on July 24, 2021. In April, 2020, the Company successfully negotiated a Debt Incentive Agreement with one of its creditors to whom it owed $731,118. This Debt Incentive Agreement provides for the elimination of the entire debt should the Company make payments in calendar 2020 totaling $166,224 in cash, and approximately 4,000 pints of ice cream. Because this reduction in debt is conditional, the full $731,118 is currently included in the liabilities section of our balance sheet. Should the Company make the payment and retire the debt during calendar 2020, The Company would realize a Gain on Extinguishment of Debt of approximately $560,000. Additional Consulting agreements call for certain Consultants to receive cash and stock bonuses for directly assisting the Company in hitting certain operational milestones, such as national television publicity, achieving revenues of $500,000 monthly, $1,000,000 monthly, and $3,000,000 quarterly. CEO Sean Folkson has a consulting agreement which will reward him with 1,000,000 warrants at a strike price of $.50 when the Company records its first quarter with revenues over $1,000,000, an additional 3,000,000 warrants with a $.50 strike price when the Company records its first quarter with revenues over $3,000,000, and an additional 3,000,000 warrants with a $1 strike price when the Company records its first quarter with revenues over $5,000,000. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Sep. 30, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 16. Related Party Transactions ● During the third quarter of Fiscal Year 2015, Mr. Folkson began accruing a consulting fee of $6,000 per month which the aggregate of $18,000 is reflected in professional fees for the three month period ended September 30, 2020 and reflected in the accrued expenses – related party with a balance of $9,974 and $9,974 at September 30, 2020 and June 30, 2020, respectively. On December 8, 2017, Mr. Folkson purchased Warrants, at a cost of $.15 per Warrant, to acquire up to 80,000 additional shares of NGTF stock at a strike price of $.20, and with a term of three (3) years from the date of said agreement. This purchase resulted in a reduction in the accrued consulting fees due him by $12,000. During the second quarter 2019 Mr. Folkson purchased 400,000 shares of stock at a strike price of $0.30 per share, valued at $120,000 which was charged to his accrual. During the three months ended September 30, 2020, Folkson had been paid $18,000 against his total accrued balance to date. ● In addition, the Company made bonuses available to Folkson upon the Company hitting certain revenue milestones of $1,000,000 in a quarter, $3,000,000 in a quarter, and $5,000,000 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 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Sep. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | 17. Subsequent Events ● 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. ● Between the dates of October 1, 2020 and November 20, 2020, noteholder Eagle Equities converted a total of $133,533 of principal and interest from outstanding notes to Company stock. The average conversion price in these transactions was $.079. 1,697,409 shares were issued to the noteholder in these transactions. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Interim Financial Statements | Interim Financial Statements These unaudited condensed consolidated financial statements for the three (3) months ended September 30, 2020 and 2019, respectively, reflect all adjustments including normal recurring adjustments, which, in the opinion of management, are necessary to present fairly the financial position, results of operations and cash flows for the periods presented in accordance with the accounting principles generally accepted in the United States of America. These interim unaudited condensed consolidated financial statements should be read in conjunction with the Company's consolidated financial statements and notes thereto for the years ended June 30, 2020 and 2019, respectively, which are included in the Company's June 30, 2020 Annual Report on Form 10-K filed with the United States Securities and Exchange Commission on October 13, 2020. The Company assumes that the users of the interim financial information herein have read, or have access to, the audited consolidated financial statements for the preceding period, and that the adequacy of additional disclosure needed for a fair presentation may be determined in that context. The results of operations for the three (3) months ended September 30, 2020 are not necessarily indicative of results for the entire year ending June 30, 2021. We made certain reclassifications to prior period amounts to conform with the current year's presentation. These reclassifications did not have a material effect on our condensed consolidated statement of financial position, results of operations or cash flows. |
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 depreciation and amortization, the valuation for non-cash issuances of common stock, and the website, income taxes and contingencies, valuing convertible notes for BCF and derivative liability, among others. |
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. The Company has no minimum purchase commitments with its vendors. |
Advertising Costs | Advertising Costs ● Adv ertising costs are expensed when incurred and are included in advertising and promotional expense in the accompanying statements of operations. Although not traditionally thought of by many as "advertising costs", the Company includes expenses related to graphic design work, package design, website design, domain names, and product samples in the category of "advertising costs". The Company reported advertising costs of $185,289 and $198,270 for the three months ended September 30, 2020 and 2019, respectively Further, as discussed on footnote 3, due to the reclassification $396,250 expenses was reversed and set off with the advertising costs incurred during 201 9. |
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 to retailers and wholesalers. |
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 September 30, 2020 and June 30, 2020, the Company did not have any uninsured cash deposits. |
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 ● 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 Trinomial Tree 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 derivative liability under the line item "change in derivative liability". |
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 Trinomial Tree 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. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for share-based awards issued to employees in accordance with FASB ASC 718. Accordingly, employee share-based payment compensation is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the requisite service period. Additionally, share-based awards to non-employees are expensed over the period in which the related services are rendered at their fair value. The Company applies ASC 718, "Equity Based Payments to Non-Employees", with respect to options and warrants issued to non-employees. |
Customer Concentration | Customer Concentration ● During the three months ended September 30, 2020, the Company had one customer account for approximately 39% of the gross sales. One other customer accounted for approximately 21% of gross sales, and two other customers accounted for over 9% of gross sales. During the three months ended September 30, 2019, one customer accounted for approximately 34% of the gross sales while two other customers accounted for over 10% of gross sales. As the Company continues to grow its distribution base, it is anticipated that revenue distribution will become less concentrated. |
Vendor Concentration | Vendor Concentration During the quarter ended June 30, 2020, three vendors accounted for more than 10% of our operating expenses. During the quarter ended June 30, 2019, two vendors accounted for more than 10% of our operating expenses. |
Receivables Concentration | Receivables Concentration ● As of September 30, 2020, the Company had receivables due from seven customers, two customers of which each accounted for over 20% of the outstanding balance. Three of the other five, each accounted for 10% of the total balance. 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. |
Income/Loss Per Share | Income/Loss Per Share ● Net income/loss per share data for both the three-month periods ending September 30, 2020 and 2019, are based on net income/loss available to common shareholders divided by the weighted average of the number of common shares outstanding. The Company does not present a diluted Earnings per share as the convertible debt and interest that is convertible into shares of the Company's common stock would not be included in this computation, as the Company is generating a loss and therefore these shares would be antidilutive. |
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 period ended September 30, 2020 and 2019, the Management determined and impaired $-0- and $-0-, respectively as impairment on intangible asset |
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, which changes the accounting and earnings per share for certain instruments with down round features. The amendments in this ASU should be applied using a cumulative-effect adjustment as of the beginning of the fiscal year or retrospective adjustment to each period presented and is effective for annual periods beginning after December 15, 2018, and interim periods within those periods. We adopted this guidance effective July 1, 2019. The adoption of this guidance did not materially impact our financial statements and related disclosures. 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 adoption of this guidance did not materially impact our financial statements and related disclosures. 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 adoption of this guidance did not materially impact our financial statements and related disclosures. 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 adoption of this guidance did not materially impact our financial statements and related disclosures. The Company will continue to monitor these emerging issues to assess any potential future impact on its financial statements. |
Restatement of Prior Financia_2
Restatement of Prior Financial Information (Tables) | 3 Months Ended |
Sep. 30, 2020 | |
Accounting Changes and Error Corrections [Abstract] | |
Schedule of restatement of prior financial information | 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 ) 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 ) |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory | September 30, June 30, Finished goods – ice cream $ 141,602 $ 195,817 Raw material – ingredients 24,515 26,309 Packaging 47,267 53,479 TOTAL $ 213,384 $ 275,605 |
Other Current Assets (Tables)
Other Current Assets (Tables) | 3 Months Ended |
Sep. 30, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of other current assets | September 30, June 30, Prepaid advertising costs $ 263,822 $ 398,045 Vendor deposits – Other $ 8,210 $ 40 TOTAL $ 272,032 $ 398,085 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of the intangible assets represents fees and expenses | September 30, June 30, 2020 2020 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) | 3 Months Ended |
Sep. 30, 2020 | |
Other Current Liabilities [Abstract] | |
Schedule of other current liabilities | September 30, June 30, Accrued consulting fees – related party $ 9,974 $ 9,974 Accrued interest 214,402 192,625 Accrued slotting fees 56,923 - TOTAL $ 281,299 $ 202,599 |
Notes Payable (Tables)
Notes Payable (Tables) | 3 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of notes payable | Principal Debt Discount ($) Net 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 Convertible notes payable issued during three months ended September 30, 2020 205,700 - 205,700 Notes converted into shares of common stock (347,000 ) - (347,000 ) Debt discount associated with new convertible notes - (126,029 ) (126,029 ) Amortization of debt discount - 322,739 322,739 True-up adjustment in debt discount and derivative liability - (37,360) (37,360) Balance at September 30, 2020 2,794,100 (445,861 ) 2,348,239 |
Derivative Liability (Tables)
Derivative Liability (Tables) | 3 Months Ended |
Sep. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of reconciliation of derivative liability | 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, 2019 1,723,883 Change in derivative liability during the period (858,774 ) Reclassify derivative liability associated with Notes converted (581,219 ) Derivative liability as of June 30, 2020 $ 1,590,638 Initial derivative liability accounted for convertible notes payable issued during the period ended September 30, 2020 126,029 True-up adjustment in debt discount and derivative liability 37,360 Change in derivative liability during the period (207,524 ) Reclassify derivative liability associated with Notes converted (189,257) Balance at September 30, 2020 $ 1,357,245 |
Line of Credit (Tables)
Line of Credit (Tables) | 3 Months Ended |
Sep. 30, 2020 | |
Line of Credit [Abstract] | |
Schedule of line of credit | Sept. 30, June 30, Line of Credit $ 2,794 $ 3,897 Total borrowings 2,794 3,897 Less: current portion 2,794 3,897 Long term debt $ - $ - |
Warrants (Tables)
Warrants (Tables) | 3 Months Ended |
Sep. 30, 2020 | |
Warrants [Abstract] | |
Schedule of outstanding common stock purchase warrants | Outstanding at Outstanding Exercise Price June 30, Issued / (Exercised) in 2020 Expired September 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 $ 0.50 - 500,000 - 500,000 $ 0.75 300,000 - - 300,000 1,155,000 500,000 - 1,655,000 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 3 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value hierarchy under assets and liabilities | September 30, 2020 Fair Value Measurements Level 1 Level 2 Level 3 Total Fair Assets Other assets $ - $ - $ - $ - Total $ - $ - $ - $ - Liabilities Short and long-term debt $ $ - $ 2,794,100 $ 2,794,100 Total $ $ - $ 2,794,100 $ 2,794,100 Fiscal 2019 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 2020 Fair Value Measurements Level 1 Level 2 Level 3 Total Fair Assets Other assets $ - $ - $ - $ - Total $ - $ - $ - $ - Liabilities Derivative Liabilities $ $ - $ 1,357,245 $ 1,357,245 Total $ $ - $ 1,357,245 $ 1,357,245 Fiscal 2020 Fair Value Measurements Level 1 Level 2 Level 3 Total Fair Assets Other assets $ - $ - $ - $ - Total $ - $ - $ - $ - Liabilities Derivative Liabilities $ $ - $ 1,590,638 $ 1,590,638 Total $ $ - $ 1,590,638 $ 1,590,638 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) | 3 Months Ended | 6 Months Ended | 9 Months Ended | |
Sep. 30, 2020USD ($)Vendors | Sep. 30, 2019USD ($) | Jun. 30, 2019Vendors | Mar. 31, 2020USD ($) | |
Summary of Significant Accounting Policies (Textual) | ||||
Advertising costs | $ 185,289 | $ 198,270 | ||
Revenue volume | 39.00% | 34.00% | ||
Impairment on intangible asset | $ 0 | $ 0 | ||
Description of concentration risk percenage | The Company had one customer account for approximately 39% of the gross sales. One other customer accounted for approximately 21% of gross sales, and two other customer accounted for over 9% of gross sales. During the three months ended September 30, 2019, one customer accounted for approximately 34% of the gross sales while two other customers accounted for over 10% of gross sales. As the Company continues to grow its distribution base, it is anticipated that revenue distribution will become less concentrated. | |||
Intangible asset and amortize costs | $ 1,000,000 | |||
Reclassification expenses | $ 396,250 | |||
Number of vendors | Vendors | 3 | 2 | ||
Operating expenses, percentage | 0.10 | 0.10 | ||
Accounts Receivable [Member] | ||||
Summary of Significant Accounting Policies (Textual) | ||||
Description of concentration risk percenage | The Company had receivables due from seven customers, two customers of which each accounted for over 20% of the outstanding balance. Three of the other five, each accounted for 10% of the total balance. 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. |
Restatement of Prior Financia_3
Restatement of Prior Financial Information (Details) - USD ($) | Sep. 30, 2020 | Jun. 30, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | |
Current assets | $ 558,829 | $ 932,325 | |||
Current liabilities | 5,137,079 | 5,413,472 | |||
Total assets | 558,829 | 932,325 | |||
Total stockholders' deficit | $ (4,578,250) | $ (4,481,147) | $ (2,359,452) | $ (2,472,605) | |
Previously Reported [Member] | |||||
Current assets | 858,216 | 482,667 | [1] | ||
Current liabilities | 3,287,252 | 2,955,272 | [1] | ||
Working capital (deficit) | (2,429,036) | (2,472,605) | [1] | ||
Total assets | 858,216 | 482,667 | [1] | ||
Total liabilities | 3,287,252 | 2,955,272 | [1] | ||
Total stockholders' deficit | (2,429,036) | (2,472,605) | [1] | ||
Adjustments [Member] | |||||
Current assets | 387,917 | 487,500 | [1] | ||
Current liabilities | 1,151,666 | 223,333 | [1] | ||
Working capital (deficit) | (763,749) | 264,167 | [1] | ||
Total assets | 1,221,250 | 487,500 | [1] | ||
Total liabilities | 1,151,666 | 223,333 | [1] | ||
Total stockholders' deficit | 69,584 | 264,167 | [1] | ||
As Corrected [Member] | |||||
Current assets | 1,246,133 | 970,167 | [1] | ||
Current liabilities | 4,438,918 | 3,178,605 | [1] | ||
Working capital (deficit) | (3,192,785) | (2,208,438) | [1] | ||
Total assets | 2,079,466 | 970,167 | [1] | ||
Total liabilities | 4,438,918 | 3,178,605 | [1] | ||
Total stockholders' deficit | $ (2,359,452) | $ (2,208,438) | [1] | ||
[1] | The balance sheet impact of the errors was corrected in the quarter ended September 30, 2019. |
Restatement of Prior Financia_4
Restatement of Prior Financial Information (Details 1) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | [1] | |
Revenues | $ 126,983 | $ 46,497 | ||
Operating expenses | 663,026 | 341,274 | ||
Loss from operations | (536,043) | (294,777) | ||
Net income (loss) | $ (943,824) | $ (513,580) | ||
Basic & diluted EPS | $ (0.01) | $ (0.01) | ||
Previously Reported [Member] | ||||
Revenues | $ 206,497 | $ 352,172 | ||
Operating expenses | 570,858 | 2,263,722 | ||
Loss from operations | (364,361) | (1,911,550) | ||
Other income (expenses) | 218,803 | 2,686,793 | ||
Net income (loss) | $ (583,164) | $ (4,598,343) | ||
Basic & diluted EPS | $ (0.01) | $ (0.09) | ||
Adjustments [Member] | ||||
Revenues | $ (160,000) | |||
Operating expenses | (229,584) | (264,167) | ||
Loss from operations | 69,584 | 264,167 | ||
Other income (expenses) | ||||
Net income (loss) | $ 69,584 | $ 264,167 | ||
Basic & diluted EPS | ||||
As Corrected [Member] | ||||
Revenues | $ 46,497 | $ 352,172 | ||
Operating expenses | 341,274 | 1,999,555 | ||
Loss from operations | (294,777) | (1,647,383) | ||
Other income (expenses) | 218,803 | 2,686,793 | ||
Net income (loss) | $ (513,580) | $ (4,334,176) | ||
Basic & diluted EPS | $ (0.01) | $ (0.09) | ||
[1] | The income statement impact of the errors was corrected in the quarter ended September 30, 2019. |
Going Concern (Details)
Going Concern (Details) - USD ($) | 3 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Jun. 30, 2020 | |
Going Concern (Textual) | |||
Net loss | $ (943,824) | $ (513,580) | |
Cash flow from operations | (368,159) | $ 26,916 | |
Accumulated deficit | $ (18,574,946) | $ (17,631,122) |
Inventories (Details)
Inventories (Details) - USD ($) | Sep. 30, 2020 | Jun. 30, 2020 |
Inventory Disclosure [Abstract] | ||
Finished goods - ice cream | $ 141,602 | $ 195,817 |
Raw material - ingredients | 24,515 | 26,309 |
Packaging | 47,267 | 53,479 |
TOTAL | $ 213,384 | $ 275,605 |
Other Current Assets (Details)
Other Current Assets (Details) - USD ($) | Sep. 30, 2020 | Jun. 30, 2020 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid advertising costs | $ 263,822 | $ 398,045 |
Vendor deposits - Other | 8,210 | 40 |
TOTAL | $ 272,032 | $ 398,085 |
Notes Payable (Details)
Notes Payable (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Jun. 30, 2020 | |
Debt Disclosure [Abstract] | ||
Beginning balance, Principal | $ 2,935,400 | $ 1,748,000 |
Convertible notes payable issued during fiscal year ended, Principal | 205,700 | 2,148,400 |
Notes converted into shares of common stock, Principal | (347,000) | (961,000) |
Debt discount associated with new convertible notes, Principal | ||
Amortization of debt discount, Principal | ||
Ending balance, Principal | 2,794,100 | 2,935,400 |
Beginning balance, Debt Discount | (605,211) | (630,259) |
Convertible notes payable issued, Debt Discount | ||
Notes converted into shares of common stock, Debt Discount | ||
Debt discount associated with new convertible notes, Debt Discount | (126,029) | (1,684,711) |
Amortization of debt discount, Debt Discount | 322,739 | 1,709,759 |
True-up adjustment in debt discount and derivative liability, Debt Discount | (37,360) | |
Ending balance, Debt Discount | (445,861) | (605,211) |
Beginning balance, Net Value | 2,330,189 | 1,117,741 |
Convertible notes payable issued during fiscal year ended, Net Value | 205,700 | 2,148,400 |
Notes converted into shares of common stock, Net Value | (347,000) | (961,000) |
Debt discount associated with new convertible notes, Net Value | (126,029) | (1,684,711) |
Amortization of debt discount, Net Value | 322,739 | 1,709,759 |
True-up adjustment in debt discount and derivative liability, Net Value | (37,360) | |
Ending Balance, Net Value | $ 2,348,239 | $ 2,330,189 |
Notes Payable (Details Textual)
Notes Payable (Details Textual) | Aug. 12, 2020USD ($) | Aug. 12, 2020USD ($)Customers | Jun. 23, 2020USD ($)Customers | Apr. 30, 2020USD ($)Customers | Feb. 06, 2020USD ($)Customers | Jun. 11, 2019USD ($)Customers | Nov. 16, 2018USD ($)Customers | Apr. 30, 2018USD ($)Customers | Feb. 26, 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 ($)Customers | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2020USD ($) |
Additional paid in capital | $ 13,931,609 | $ 13,088,177 | ||||||||||||||||||
Financing cost | 36,478 | $ 26,597 | ||||||||||||||||||
Debt discount | $ 322,739 | 382,267 | ||||||||||||||||||
Convertible Notes Payable [Member] | June 30, 2020 [Member] | ||||||||||||||||||||
Debt discount | $ 129,700 | $ 106,916 | $ 94,064 | $ 46,726 | $ 0 | $ 99,218 | $ 75,205 | $ 43,074 | $ 27,482 | $ 37,833 | $ 26,452 | $ 2,627 | $ 0 | $ 0 | ||||||
Note retired | 50,000 | |||||||||||||||||||
Convertible Notes Payable [Member] | September 30, 2020 [Member] | ||||||||||||||||||||
Debt discount | $ 109,110 | 96,369 | 74,560 | 54,728 | 0 | 0 | 61,342 | 37,797 | 12,354 | 0 | 0 | 0 | 0 | 0 | 0 | |||||
Note retired | 54,000 | |||||||||||||||||||
Convertible Notes Payable [Member] | Convertible Promissory Note and a Security Purchase Agreement [Member] | ||||||||||||||||||||
Convertible notes payable | $ 205,700 | $ 205,700 | $ 205,700 | $ 205,700 | $ 200,000 | $ 300,000 | $ 130,000 | $ 225,000 | $ 187,000 | $ 150,000 | $ 150,000 | $ 150,000 | $ 300,000 | $ 300,000 | $ 300,000 | $ 208,000 | $ 104,000 | |||
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% | |||
Convertible price for interest payment percentage | 78.00% | 78.00% | 78.00% | 70.00% | 70.00% | 65.00% | 60.00% | 70.00% | 70.00% | 70.00% | 70.00% | 70.00% | 70.00% | 70.00% | 70.00% | |||||
Trading days immediately prior to conversion | Customers | 20 | 20 | 20 | 15 | 15 | 15 | 15 | 15 | 15 | 15 | 15 | 15 | 15 | 15 | 15 | |||||
Maturity date | Aug. 12, 2021 | Jun. 23, 2021 | Apr. 30, 2021 | Feb. 6, 2021 | Jun. 11, 2020 | Nov. 16, 2019 | Apr. 30, 2019 | Dec. 31, 2020 | Nov. 7, 2020 | Sep. 24, 2020 | Aug. 29, 2020 | Aug. 8, 2020 | Jul. 5, 2020 | Apr. 29, 2020 | Feb. 14, 2020 | |||||
Expected life | 1 year | |||||||||||||||||||
Volatility percentage | 118.00% | |||||||||||||||||||
Dividend yield percent | 0.00% | 0.00% | ||||||||||||||||||
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. | 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 | $ 205,700 | $ 205,700 | $ 200,000 | $ 300,000 | $ 130,000 | $ 225,000 | $ 187,000 | $ 150,000 | $ 150,000 | $ 150,000 | $ 300,000 | $ 300,000 | $ 300,000 | $ 208,000 | $ 104,000 | |||
Notes payable interest rate | 0.13% | 0.13% | 0.18% | 0.16% | 1.51% | 2.05% | 2.71% | 2.24% | 1.18% | 1.59% | 1.58% | 1.78% | 1.75% | 1.79% | 1.98% | 2.42% | 2.53% | |||
Fair value of notes payable | $ 126,029 | $ 126,029 | $ 132,236 | $ 128,369 | $ 156,061 | $ 240,217 | $ 131,898 | $ 287,174 | $ 150,268 | $ 189,172 | $ 121,875 | $ 118,009 | $ 234,052 | $ 254,082 | $ 239,759 | $ 170,098 | $ 90,567 | |||
Convertible price for interest payment percentage | 70.00% | |||||||||||||||||||
Trading days immediately prior to conversion | Customers | 15 | |||||||||||||||||||
Maturity date | Feb. 6, 2021 | |||||||||||||||||||
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 | |||||
Volatility percentage | 101.00% | 108.00% | 106.00% | 113.00% | 16.00% | 150.00% | 202.00% | 115.00% | 122.00% | 113.00% | 113.00% | 113.00% | 118.00% | 118.00% | 136.00% | |||||
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% | ||||||
Net charge | $ 1,898 | $ 62,174 | ||||||||||||||||||
Financing cost | $ 39,172 | |||||||||||||||||||
Derivative liability | 74,472 | |||||||||||||||||||
Conversion gain | $ 42,595 | |||||||||||||||||||
Conversion loss | 109,561 | 36,242 | $ 25,398 | |||||||||||||||||
Note retired | 50,000 | |||||||||||||||||||
Convertible Notes Payable [Member] | Derivatives and Hedging [Member] | September 30, 2020 [Member] | ||||||||||||||||||||
Conversion loss | $ 208,000 | $ 4,098 |
Other Current Liabilities (Deta
Other Current Liabilities (Details) - USD ($) | Sep. 30, 2020 | Jun. 30, 2020 |
Other Current Liabilities [Abstract] | ||
Accrued consulting fees - related party | $ 9,974 | $ 9,974 |
Accrued interest | 214,402 | 192,625 |
Accrued slotting fees | 56,923 | |
TOTAL | $ 281,299 | $ 202,599 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | Jun. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Intangible assets | $ 1,000,000 | ||
Amortization of intangible assets | 0 | $ (166,667) | (500,000) |
Impairment of intangible assets | (500,000) | ||
TOTAL |
Intangible Assets (Details Text
Intangible Assets (Details Textual) | 3 Months Ended |
Sep. 30, 2020USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
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. |
Debt | $ 731,118 |
Derivative Liability (Details)
Derivative Liability (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Jun. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
beginning balance of derivative liability | $ 1,590,638 | $ 1,306,748 |
Initial derivative liability accounted for convertible notes payable | 126,029 | 1,723,883 |
True-up adjustment in debt discount and derivative liability | 37,360 | |
Change in derivative liability during the period | (207,524) | (858,774) |
Reclassify derivative liability associated with Notes converted | (189,257) | (581,219) |
Ending balance of derivative liability | $ 1,357,245 | $ 1,590,638 |
Derivative Liability (Details T
Derivative Liability (Details Textual) | 3 Months Ended |
Sep. 30, 2020USD ($) | |
Derivative Liability (Textual) | |
Gain in fair value of derivative | $ 207,524 |
Line of Credit (Details)
Line of Credit (Details) - USD ($) | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 19, 2020 |
Line of Credit [Abstract] | |||
Line of Credit | $ 2,794 | $ 3,897 | $ 200,000 |
Total borrowings | 2,794 | 3,897 | |
Less: current portion | 2,794 | 3,897 | |
Long term debt |
Line of Credit (Details Textual
Line of Credit (Details Textual) - USD ($) | 3 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Jun. 30, 2020 | Mar. 19, 2020 | |
Line of credit (Textual) | ||||
Line of credit | $ 2,794 | $ 3,897 | $ 200,000 | |
Proceeds and draw fees | $ 5,000 | |||
Payments draw, description | Six payments had 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. | |||
Interest expense | $ 337 | $ 0 |
Capital Stock Activity (Details
Capital Stock Activity (Details) - USD ($) | 3 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Jun. 30, 2020 | |
Capital Stock Activity (Textual) | |||
Common stock, par value | $ 0.001 | $ 0.001 | |
Common stock, shares issued | 65,085,597 | ||
Common stock, shares outstanding | 65,085,597 | 61,796,680 | |
Common stock issued for interest | $ 36,478 | $ 26,598 | |
Issuance of common stock for debt | $ 347,000 | 337,000 | |
Issuance of common stock for services | $ 49,397 | ||
Common Stock [Member] | |||
Capital Stock Activity (Textual) | |||
Common stock issued for interest, shares | 312,938 | 110,404 | |
Issuance of common stock for debt, shares | 2,975,979 | 1,409,349 | |
Issuance of common stock for services | $ 123 | ||
Issuance of common stock for services, shares | 122,762 |
Warrants (Details)
Warrants (Details) | 3 Months Ended |
Sep. 30, 2020$ / sharesshares | |
Exercise Price | $ / shares | $ 0.15 |
Outstanding | 1,155,000 |
Exercised in 2020 | 500,000 |
Expired | |
Outstanding | 1,655,000 |
Warrant [Member] | $0.15 [Member] | |
Exercise Price | $ / shares | $ 0.15 |
Outstanding | 500,000 |
Exercised in 2020 | |
Expired | |
Outstanding | 500,000 |
Warrant [Member] | $0.20 [Member] | |
Exercise Price | $ / shares | $ 0.20 |
Outstanding | 105,000 |
Exercised in 2020 | |
Expired | |
Outstanding | 105,000 |
Warrant [Member] | $0.30 [Member] | |
Exercise Price | $ / shares | $ 0.30 |
Outstanding | 100,000 |
Exercised in 2020 | |
Expired | |
Outstanding | 100,000 |
Warrant [Member] | $0.40 [Member] | |
Exercise Price | $ / shares | $ 0.40 |
Outstanding | 150,000 |
Exercised in 2020 | |
Expired | |
Outstanding | 150,000 |
Warrant [Member] | 0.50 [Member] | |
Exercise Price | $ / shares | $ 0.50 |
Outstanding | |
Exercised in 2020 | 500,000 |
Expired | |
Outstanding | 500,000 |
Warrant [Member] | $0.75 [Member] | |
Exercise Price | $ / shares | $ 0.75 |
Outstanding | 300,000 |
Exercised in 2020 | |
Expired | |
Outstanding | 300,000 |
Warrants (Details Textual)
Warrants (Details Textual) | 3 Months Ended |
Sep. 30, 2020USD ($)$ / sharesshares | |
Warrants (Textual) | |
Purchase warrants of common stock | 500,000 |
Warrants, description | These warrants were issued as compensation for a four-year advisory agreement. |
Warrant exercise price | $ / shares | $ 0.15 |
Aggregate intrinsic value of warrants | $ | $ 0 |
Issuance of warrants | 500,000 |
Warrants strike price | $ / shares | $ 0.50 |
Warrant volatility rate | 107.93% |
Warrant risk free rate | 0.29% |
Advisory Agreement Two [Member] | |
Warrants (Textual) | |
Vested shares | 450,000 |
Vested date | Jul. 24, 2020 |
Warrant [Member] | Advisory Agreement [Member] | |
Warrants (Textual) | |
Vested shares | 150,000 |
Vested date | Jul. 24, 2018 |
Warrant [Member] | Advisory Agreement One [Member] | |
Warrants (Textual) | |
Vested shares | 150,000 |
Vested date | Jul. 24, 2019 |
Warrant [Member] | Advisory Agreement Three [Member] | |
Warrants (Textual) | |
Vested shares | 50,000 |
Vested date | Jul. 24, 2021 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments (Details) - USD ($) | Sep. 30, 2020 | Jun. 30, 2020 | Sep. 30, 2019 | Jun. 30, 2019 |
Assets | ||||
Other assets | ||||
Total | ||||
Liabilities | ||||
Short and long-term debt | 1,357,245 | 1,590,638 | 2,794,100 | 2,935,400 |
Total | 1,357,245 | 1,590,638 | 2,794,100 | 2,935,400 |
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 | 1,357,245 | 1,590,638 | 2,794,100 | 2,935,400 |
Total | $ 1,357,245 | $ 1,590,638 | $ 2,794,100 | $ 2,935,400 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments (Details Textual) - USD ($) | Sep. 30, 2020 | Jun. 30, 2020 |
Fair Value of Financial Instruments (Textual) | ||
Derivative liabilities from related parties | $ 1,357,245 | $ 1,590,638 |
Commitments and Contingencies (
Commitments and Contingencies (Details) | 1 Months Ended | 3 Months Ended | |
Apr. 30, 2020 | Sep. 30, 2020USD ($)Customers$ / sharesshares | Sep. 30, 2019USD ($) | |
Commitments and Contingencies (Textual) | |||
Purchase warrants of common stock | shares | 500,000 | ||
Warrant exercise price | $ / shares | $ 0.15 | ||
Number of individual consultants | Customers | 2 | ||
Achieving revenues | $ 126,983 | $ 46,497 | |
Gain on extinguishment of debt | $ (188,397) | ||
CEO Sean Folkson [Member] | |||
Commitments and Contingencies (Textual) | |||
Purchase warrants of common stock | shares | 1,000,000 | ||
Warrant exercise price | $ / shares | $ 0.50 | ||
Consulting agreement, description | The Company records its first quarter with revenues over $1,000,000, an additional 3,000,000 warrants with a $.50 strike price when the Company records its first quarter with revenues over $3,000,000, and an additional 3,000,000 warrants with a $1 strike price when the Company records its first quarter with revenues over $5,000,000. | ||
Quarterly Revenue [Member] | Individual Consultants [Member] | |||
Commitments and Contingencies (Textual) | |||
Achieving revenues | $ 3,000,000 | ||
Monthly Revenue [Member] | Individual Consultants [Member] | |||
Commitments and Contingencies (Textual) | |||
Achieving revenues | 500,000 | ||
Monthly Revenue One [Member] | Individual Consultants [Member] | |||
Commitments and Contingencies (Textual) | |||
Achieving revenues | $ 1,000,000 | ||
Advisory Agreement One [Member] | |||
Commitments and Contingencies (Textual) | |||
Vested shares | shares | 450,000 | ||
Vested date | Jul. 24, 2020 | ||
Debt Incentive Agreement [Member] | |||
Commitments and Contingencies (Textual) | |||
Descriptions of debt incentive agreement | The Company successfully negotiated a Debt Incentive Agreement with one of its creditors to whom it owed $731,118. This Debt Incentive Agreement provides for the elimination of the entire debt should the Company make payments in calendar 2020 totaling $166,224 in cash, and approximately 4,000 pints of ice cream. Because this reduction in debt is conditional, the full $731,118 is currently included in the liabilities section of our balance sheet. Should the Company make the payment and retire the debt during calendar 2020, The Company would realize a Gain on Extinguishment of Debt of approximately $560,000. |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | Dec. 08, 2017 | Sep. 30, 2020 | Mar. 31, 2015 | Jun. 30, 2020 |
Related Party Transactions (Textual) | ||||
Warrant exercise price | $ 0.15 | |||
Professional fees | $ 175,668 | |||
Accrued expense-related party | $ 9,974 | $ 9,974 | ||
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, $3,000,000 in a quarter, and $5,000,000 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) | ||||
Warrants to acquire of shares | 80,000 | |||
Warrant exercise price | $ 0.20 | |||
Warrant term | 3 years | |||
Consulting fee (per month) | $ 12,000 | $ 6,000 | ||
Professional fees | $ 18,000 | |||
Accrued expense-related party | 9,974 | $ 9,974 | ||
Total accrued balance | $ 18,000 | |||
Sale of stock, description | Mr. Folkson purchased 400,000 shares of stock at a strike price of $0.30 per share, valued at $120,000 which was charged to his accrual. | |||
Mr. Folkson [Member] | Warrant [Member] | ||||
Related Party Transactions (Textual) | ||||
Warrant exercise price | $ 0.15 |
Subsequent Events (Details)
Subsequent Events (Details) - Eagle Equities, LLC [Member] - Subsequent Event [Member] - $ / shares | Oct. 02, 2020 | Nov. 20, 2020 | Oct. 13, 2020 | Nov. 23, 2020 |
Subsequent Events (Textual) | ||||
Average conversion price | $ 0.079 | |||
Shares issued | 1,697,409 | 1,697,409 | ||
Converted of principal and interest amount | Noteholder Eagle Equities converted a total of $133,533 of principal and interest from outstanding notes to Company stock. | Noteholder Eagle Equities converted a total of $133,533 of principal and interest from outstanding notes to Company stock. | 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. |