Document And Entity Information
Document And Entity Information - shares | 6 Months Ended | |
Dec. 31, 2020 | Feb. 19, 2021 | |
Cover [Abstract] | ||
Entity Registrant Name | Sugarmade, Inc. | |
Entity Central Index Key | 0000919175 | |
Document Type | 10-Q | |
Document Period End Date | Dec. 31, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --06-30 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 4,137,094,799 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2021 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Dec. 31, 2020 | Jun. 30, 2020 |
Current assets: | ||
Cash | $ 360,550 | $ 441,004 |
Accounts receivable, net | 11,546 | 134,517 |
Inventory, net | 617,855 | 679,471 |
Loan receivables, current | 1,365 | |
Loan receivables - related party, current | 15,276 | 122,535 |
Other current assets | 963,261 | 263,404 |
Right of use asset, current | 231,685 | 270,363 |
Total current assets | 2,200,173 | 1,912,659 |
Noncurrent assets: | ||
Equipment, net | 360,345 | 499,047 |
Intangible asset, net | 9,100 | 9,800 |
Other assets | 54,163 | 54,163 |
Loan receivables - related party, noncurrent | 196,000 | 196,000 |
Right of use asset, noncurrent | 610,864 | 835,393 |
Investment to Indigo Dye | 564,818 | |
Total noncurrent assets | 1,795,290 | 1,594,403 |
Total assets | 3,995,463 | 3,507,062 |
Current liabilities: | ||
Note payable due to bank | 25,982 | 25,982 |
Accounts payable and accrued liabilities | 1,390,289 | 1,583,228 |
Customer deposits | 589,654 | 466,337 |
Customer overpayment | 61,886 | 47,890 |
Unearned revenue | 57,157 | 53,248 |
Other payables | 950,187 | 691,801 |
Accrued interest | 500,281 | 494,740 |
Accrued compensation and personnel related payables | 27,028 | 35,361 |
Notes payable - Current | 20,000 | 20,000 |
Notes payable - Related Parties, Current | 15,427 | 15,427 |
Lease liability - Current | 236,527 | 372,285 |
Loans payable - Current | 450,589 | 319,314 |
Loan payable - Related Parties, Current | 576,225 | 35,943 |
Convertible notes payable, Net, Current | 1,651,430 | 1,740,122 |
Derivative liabilities, net | 1,595,186 | 5,597,095 |
Warrants liabilities | 9,521 | 79,910 |
Shares to be issued | 167,577 | 101,577 |
Total current liabilities | 8,324,947 | 11,680,260 |
Non-Current liabilities: | ||
Loans payable | 269,900 | 197,946 |
Lease liability | 641,687 | 767,729 |
Total liabilities | 9,236,534 | 12,645,935 |
Stockholders' deficiency: | ||
Preferred stock, $0.001 par value, 10,000,000 shares authorized 1,541,500 and 3,541,500 shares issued outstanding at Decemebr 31, 2020 and June 30, 2020 | 1,542 | 3,542 |
Common stock, $0.001 par value, 10,000,000,000 shares authorized, 3,616,507,670 and 1,763,277,230 shares issued and outstanding at December 31, 2020 and June 30, 2020, respectively | 3,616,509 | 1,763,278 |
Additional paid-in capital | 59,718,392 | 57,307,767 |
Common Stock Subscribed | 236,008 | 236,008 |
Accumulated deficit | (68,813,520) | (68,438,332) |
Total stockholders' deficiency | (5,241,070) | (9,127,737) |
Non-Controlling Interest | (11,136) | |
Total stockholders' deficiency | (5,241,070) | (9,138,873) |
Total liabilities and stockholders' deficiency | $ 3,995,463 | $ 3,507,062 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2020 | Jun. 30, 2020 | Apr. 22, 2020 |
Statement of Financial Position [Abstract] | |||
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 1,541,500 | 3,541,500 | |
Preferred stock, shares outstanding | 1,541,500 | 3,541,500 | |
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 10,000,000,000 | 10,000,000,000 | 10,010,000,000 |
Common stock, shares issued | 3,616,507,670 | 1,763,277,230 | |
Common stock, shares outstanding | 3,616,507,670 | 1,763,277,230 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | ||
Income Statement [Abstract] | |||||
Revenues, net | $ 300,652 | $ 720,810 | $ 2,446,979 | $ 1,474,784 | |
Cost of goods sold | 242,531 | 435,690 | 1,272,429 | 927,858 | |
Gross profit | 58,122 | 285,120 | 1,174,550 | 546,926 | |
Selling, general and administrative expenses | 271,549 | 523,890 | 875,358 | 859,720 | |
Advertising and Promotion Expense | 682 | 16,127 | 278,587 | 57,483 | |
Marketing and Research Expense | 93,908 | 74,475 | 316,256 | 79,446 | |
Professional Expense | 115,615 | 467,170 | 619,045 | 1,147,266 | |
Salaries and Wages | 105,700 | 104,722 | 464,474 | 234,098 | |
Stock Compensation Expense | 47,250 | 6,029,550 | 66,000 | 6,041,550 | |
Loss from operations | (576,581) | (6,930,814) | (1,445,170) | (7,872,637) | |
Non-operating income (expense): | |||||
Other income | 3,142 | 1,867 | 3,142 | 3,098 | |
Gain in loss of control of VIE | 313,928 | 313,928 | |||
Interest expense | (728,197) | (735,196) | (1,194,972) | (1,319,800) | |
Bad debts | (130,467) | (132,979) | |||
Change in fair value of derivative liabilities | 496,961 | 1,291,168 | 3,992,108 | 2,314,046 | |
Warrant Expense | 4,174 | 70,389 | (55,278) | ||
Loss on notes conversion | (184,626) | (184,626) | |||
Loss on settlement | (5,000) | (232,776) | (80,000) | (382,635) | |
Gain on asset disposal | 7,000 | ||||
Amortization of debt discount | (1,031,379) | (963,407) | (1,845,925) | (2,118,407) | |
Debt forgiveness | (172,096) | ||||
Other expenses | (862) | (740) | (53,595) | (740) | |
Total non-operating expenses, net | (1,077,702) | (823,710) | 1,072,095 | (1,909,438) | |
Equity Method Investment Loss | (2,114) | (2,114) | |||
Net loss | (1,656,397) | (7,754,524) | (375,189) | (9,782,075) | |
Less: net loss attributable to the noncontrolling interest | |||||
Net loss attributable to SugarMade Inc. | $ (1,656,397) | $ (7,754,524) | $ (375,189) | $ (9,782,075) | |
Basic net income (loss) per share | $ 0 | $ (0.04) | $ 0 | $ (0.01) | |
Diluted net income (loss) per share | $ 0 | $ (0.04) | $ 0 | $ (0.01) | |
Basic and diluted weighted average common shares outstanding | [1] | 3,233,135,446 | 191,886,785 | 2,864,951,348 | 880,355,944 |
[1] | Shares issuable upon conversion of convertible debts and exercising of warrants were excluded in calculating diluted loss per share |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Equity (Unaudited) - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-In Capital [Member] | Shares to be Cancelled, Preferred Shares [Member] | Shares to be Cancelled, Common Shares [Member] | Common Stock Subscribed [Member] | Accumulated Deficit [Member] | Noncontrolling Interest [Member] | Total |
Beginning Balance at Jun. 30, 2019 | $ 2,000 | $ 697,610 | $ 61,038,875 | $ 29,000 | $ (47,088,950) | $ 14,678,534 | |||
Beginning Balance, Shares at Jun. 30, 2019 | 2,000,000 | 697,608,570 | |||||||
Shares issued for debts settlement | $ 1,000 | 28,000 | (29,000) | ||||||
Shares issued for debts settlement, shares | 1,000,000 | ||||||||
Reclass Derivative liability from conversion | 659,526 | 659,526 | |||||||
Shares issued for conversions | $ 71,916 | 475,917 | 547,833 | ||||||
Shares issued for conversions, shares | 71,915,557 | ||||||||
Share issued for Cash | $ 11,349 | 88,651 | 100,000 | ||||||
Share issued for Cash, shares | 11,348,591 | ||||||||
Shares issued for Warrant Exercise | $ 28,382 | (14,249) | 14,133 | ||||||
Shares issued for Warrant Exercise, shares | 28,371,818 | ||||||||
Net loss | (2,027,551) | (2,027,551) | |||||||
Ending Balance at Sep. 30, 2019 | $ 2,000 | $ 810,257 | 62,276,720 | (49,116,501) | 13,972,474 | ||||
Ending Balance, Shares at Sep. 30, 2019 | 2,000,000 | 810,244,536 | |||||||
Beginning Balance at Jun. 30, 2019 | $ 2,000 | $ 697,610 | 61,038,875 | 29,000 | (47,088,950) | 14,678,534 | |||
Beginning Balance, Shares at Jun. 30, 2019 | 2,000,000 | 697,608,570 | |||||||
Net loss | (9,782,075) | ||||||||
Ending Balance at Dec. 31, 2019 | $ 3,165 | $ 1,129,927 | 83,472,375 | (10,725,014) | (21,566,046) | 100,000 | (56,871,025) | (4,456,617) | |
Ending Balance, Shares at Dec. 31, 2019 | 3,165,001 | 1,129,916,122 | |||||||
Beginning Balance at Sep. 30, 2019 | $ 2,000 | $ 810,257 | 62,276,720 | (49,116,501) | 13,972,474 | ||||
Beginning Balance, Shares at Sep. 30, 2019 | 2,000,000 | 810,244,536 | |||||||
Shares issued for debts settlement | $ 18,182 | 272,273 | 290,455 | ||||||
Shares issued for debts settlement, shares | 18,181,818 | ||||||||
Reclass Derivative liability from conversion | 297,962 | 297,962 | |||||||
Shares issued for conversions | $ 24,994 | 117,170 | 142,164 | ||||||
Shares issued for conversions, shares | 24,994,341 | ||||||||
Share issued for Cash | $ 26,622 | 213,378 | 100,000 | 340,000 | |||||
Share issued for Cash, shares | 26,621,610 | ||||||||
Option for services | 73,500 | 73,500 | |||||||
Share issued for services compensation | $ 415 | $ 500 | 5,941,135 | 5,942,050 | |||||
Share issued for services compensation, shares | 415,000 | 500,000 | |||||||
Shares issued for Award - Bizright | $ 750 | $ 249,374 | 14,040,936 | (10,725,014) | (21,566,046) | (18,000,000) | |||
Shares issued for Award - Bizright, shares | 750,001 | 249,373,817 | |||||||
Initial valuation of BCF | 239,301 | 239,301 | |||||||
Net loss | (7,754,524) | (7,754,524) | |||||||
Ending Balance at Dec. 31, 2019 | $ 3,165 | $ 1,129,927 | 83,472,375 | $ (10,725,014) | (21,566,046) | 100,000 | (56,871,025) | (4,456,617) | |
Ending Balance, Shares at Dec. 31, 2019 | 3,165,001 | 1,129,916,122 | |||||||
Beginning Balance at Jun. 30, 2020 | $ 3,542 | $ 1,763,278 | 57,307,767 | 236,008 | (68,438,331) | $ (11,136) | (9,138,873) | ||
Beginning Balance, Shares at Jun. 30, 2020 | 3,541,500 | 1,763,277,230 | |||||||
Reclass Derivative liability from conversion | 1,805,188 | 1,805,188 | |||||||
Shares issued for conversions | $ 1,081,412 | 192,048 | $ 1,273,459 | ||||||
Shares issued for conversions, shares | 1,081,411,606 | 1,081,411,606 | |||||||
Repayment of capital to noncontrolling minority | (24,000) | $ (24,000) | |||||||
Net loss | 1,278,812 | 1,165 | 1,279,976 | ||||||
Ending Balance at Sep. 30, 2020 | $ 3,542 | $ 2,844,690 | 59,305,003 | 236,008 | (67,159,519) | (33,971) | (4,804,248) | ||
Ending Balance, Shares at Sep. 30, 2020 | 3,541,500 | 2,844,688,836 | |||||||
Beginning Balance at Jun. 30, 2020 | $ 3,542 | $ 1,763,278 | 57,307,767 | 236,008 | (68,438,331) | (11,136) | (9,138,873) | ||
Beginning Balance, Shares at Jun. 30, 2020 | 3,541,500 | 1,763,277,230 | |||||||
Net loss | (375,189) | ||||||||
Ending Balance at Dec. 31, 2020 | $ 1,542 | $ 3,616,509 | 59,718,392 | 236,008 | (68,813,520) | (5,241,070) | |||
Ending Balance, Shares at Dec. 31, 2020 | 1,541,500 | 3,616,507,670 | |||||||
Beginning Balance at Sep. 30, 2020 | $ 3,542 | $ 2,844,690 | 59,305,003 | 236,008 | (67,159,519) | (33,971) | (4,804,248) | ||
Beginning Balance, Shares at Sep. 30, 2020 | 3,541,500 | 2,844,688,836 | |||||||
Reclass Derivative liability from conversion | 531,591 | 531,591 | |||||||
Shares issued for conversions | $ 411,172 | (90,293) | $ 320,879 | ||||||
Shares issued for conversions, shares | 411,171,815 | 411,171,815 | |||||||
Preferred stock conversions | $ (2,000) | $ 360,647 | 141,353 | $ 500,000 | |||||
Preferred stock conversions, shares | (2,000,000) | 360,647,019 | |||||||
Reclassification due to deconsolidation of VIE | (169,262) | 2,396 | 33,971 | (132,895) | |||||
Net loss | (1,656,397) | (1,656,397) | |||||||
Ending Balance at Dec. 31, 2020 | $ 1,542 | $ 3,616,509 | $ 59,718,392 | $ 236,008 | $ (68,813,520) | $ (5,241,070) | |||
Ending Balance, Shares at Dec. 31, 2020 | 1,541,500 | 3,616,507,670 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | |
Cash flows from operating activities: | |||||
Net loss | $ (1,656,397) | $ (7,754,524) | $ (375,189) | $ (9,782,075) | |
Non-controlling interest | |||||
Adjustments to reconcile net loss to cash flows from operating activities: | |||||
Iniatial valuation of debt discount | 239,300 | ||||
Loss on settlement | 5,000 | 232,776 | 80,000 | 382,635 | |
Gain on loss of control of VIE | (313,928) | ||||
Return on EB5 Investment | 500,000 | ||||
Amortization of debt discount | 1,845,925 | 330,192 | |||
Stock based compensation | 47,250 | 6,029,550 | 66,000 | 6,041,550 | |
Change in fair value of derivative liability | (3,992,108) | 273,299 | |||
Change in exercise of warrant | (70,389) | 67,387 | |||
Depreciation | 44,684 | $ 110,032 | 46,189 | ||
Amortization of intangible assets | 700 | 700 | |||
Change in financing cost | 316,261 | ||||
Changes in assets and liabilities: | |||||
Accounts receivable | 122,971 | 60,145 | |||
Inventory | (83,253) | (138,801) | |||
Prepayment, deposits and other receivables | (855,878) | 261,183 | |||
Other assets | (35,000) | ||||
Other payables | 404,993 | 37,962 | |||
Accounts payable and accrued liabilities | 465,435 | 5,955 | |||
Customer deposits | 137,313 | (62,174) | |||
Unearned revenue | 3,909 | (19,890) | |||
Right of use assets | 119,483 | 39,169 | |||
Lease liability | (118,078) | (36,919) | |||
Investment to Indigo Dye | (564,818) | ||||
Interest Payable | 98,780 | 166,753 | |||
Net cash used in operating activities | (2,167,187) | (2,122,441) | |||
Cash flows from investing activities: | |||||
Net cash used in investing activities | |||||
Cash flows from financing activities: | |||||
Proceeds from shares issuance | 340,000 | ||||
Bank overdraft | 5,907 | ||||
Loan receivable | (13,911) | 75,033 | |||
Loan receivable - related parties | 38,044 | ||||
Proceeds from advanced shares issuance | 236,000 | ||||
Proceeds (Repayment) from(to) loans payable - related parties | 540,281 | 105,000 | |||
Proceeds from convertible notes | 1,804,900 | 1,451,687 | |||
Repayment of convertible notes | (227,700) | ||||
Reduction of cash due to Indigo Dye deconsolidation | (326,811) | ||||
Proceeds (Repayment) from(to) loans | 271,929 | (22,555) | |||
Net cash provided by financing activities | 2,086,732 | 2,191,072 | |||
Net increase (decrease) in cash | (80,455) | 68,631 | |||
Cash paid during the period for: | |||||
Cash, beginning of period | 441,004 | 103,002 | 34,371 | ||
Cash, end of period | $ 360,550 | $ 103,002 | 360,550 | $ 441,004 | 103,002 |
Supplemental disclosure of non-cash financing activities - | |||||
Shares issued for conversion of convertible debt | 1,594,338 | 689,997 | |||
Reduction in derivative liability due to conversion | 2,336,779 | 957,488 | |||
Debt discount related to convertible debt | 2,010,717 | 951,581 | |||
Debts settled through shares issuance | 229,000 | ||||
Shares issued for award to Bizright and to be cancelled in future | (32,291,060) | ||||
Shares issued for warrant exercise | $ 28,381 |
Nature of Business
Nature of Business | 6 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Business | 1. Nature of Business Sugarmade, Inc. (hereinafter referred to as “we,” “us” or “Company”) is a publicly-traded company incorporated in the state of Delaware. Our previous legal name was Diversified Opportunities, Inc. Our Company operates much of its business activities through our subsidiary, SWC Group, Inc., a California corporation (“SWC”). Sugarmade, Inc. was founded in 2010. In 2014, CarryOutSupplies.com was acquired by Sugarmade, Inc., creating the Company as it is today. As of December 31, 2020, we operated our business in the following three segments: 1) Paper and paper-based products: 2) Non-medical supplies: 3) Cannabis products delivery service and sales: Subsequent to the end of the December reporting period, Sugarmade became a joint owner of Nug Avenue, Inc., a California corporation (“Nug Avenue”), which operates a licensed and regulated cannabis delivery service out of Lynwood, California, serving the greater Los Angeles Metropolitan area (the “Lynwood Operations”). The Company currently owns a majority stake of seventy percent (70%) of Nug Avenue’s Lynwood Operations and holds first rights of refusal on Nug Avenue’s business expansion relative to the cannabis marketplace. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. It is management’s opinion however, that all material adjustments (consisting of normal recurring adjustments) have been made which are necessary for a fair financial statement presentation. These interim condensed consolidated financial statements should be read in conjunction with our Company’s Annual Report on Form 10-K for the year ended June 30, 2020, which contains our audited consolidated financial statements and notes thereto, together with the Management’s Discussion and Analysis of Financial Condition and Results of Operation, for the fiscal year ended June 30, 2020. The interim results for the period ended December 31, 2020 are not necessarily indicative of the results for the full fiscal year. Principles of consolidation The unaudited condensed consolidated financial statements include the accounts of our Company and SWC, the Company’s wholly-owned subsidiary. All significant intercompany transactions and balances have been eliminated in consolidation. Going concern The Company’s continuation as a going concern is dependent on its ability to generate sufficient cash flows from operations to meet its obligations, in which it has not been successful, and/or obtaining additional financing from its shareholders or other sources, as may be required. Our unaudited condensed consolidated financial statements have been prepared assuming that we will continue as a going concern. Such assumption contemplates the realization of assets and satisfaction of liabilities in the normal course of business. These unaudited condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern. Management endeavors to increase revenue-generating operations. While the Company’s priority is on generating cash from operations, management also seek to raise additional working capital through various financing sources, including the sale of the Company’s equity and/or debt securities, which may not be available on commercially reasonable terms to our Company, or which may not be available at all. If such financing is not available on satisfactory terms, we may be unable to continue our business as desired and our operating results will be adversely affected. In addition, any financing arrangement may have potentially adverse effects on us and/or our stockholders. Debt financing (if available and undertaken) will increase expenses, must be repaid regardless of operating results and may involve restrictions limiting our operating flexibility. If we issue equity securities to raise additional funds, the percentage ownership of our existing stockholders will be reduced, and the new equity securities may have rights, preferences or privileges senior to those of the current holders of our common stock. Use of estimates The preparation of financial statements in conformity with GAAP requires our 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 significantly from those estimates. Revenue recognition We recognize revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC’’) No. 606, Revenue Recognition. Sugarmade applied a five-step approach in determining the amount and timing of revenue to be recognized: (1) identifying the contract with a customer, (2) identifying the performance obligations in the contract, (3) determining the transaction price, (4) allocating the transaction price to the performance obligations in the contract and (5) recognizing revenue when the performance obligation is satisfied. Substantially all of the Company’s revenue is recognized at the time control of the products transfers to the customer. Property and equipment Property and equipment is stated at the historical cost, less accumulated depreciation. Depreciation on property and equipment is provided using the straight-line method over the estimated useful lives of the assets for both financial and income tax reporting purposes as follows: Machinery and equipment 3-5 years Furniture and equipment 7 years Vehicles 5 years Leasehold improvements 5 years Expenditures for renewals and betterments are capitalized while repairs and maintenance costs are normally charged to the statement of operations in the year in which they are incurred. In situations where it can be clearly demonstrated that the expenditure has resulted in an increase in the future economic benefits expected to be obtained from the use of the asset, the expenditure is capitalized as an additional cost of the asset. Upon sale or disposal of an asset, the historical cost and related accumulated depreciation or amortization of such asset were removed from their respective accounts and any gain or loss is recorded in the statements of income. The Company reviews the carrying value of property, plant, and equipment for impairment whenever events and circumstances indicate that the carrying value of an asset may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition. In cases where undiscounted expected future cash flows are less than the carrying value, an impairment loss is recognized equal to an amount by which the carrying value exceeds the fair value of assets. The factors considered by management in performing this assessment include current operating results, trends and prospects, the manner in which the property is used, and the effects of obsolescence, demand, competition and other economic factors. Based on this assessment, no impairment expenses for property, plant, and equipment was recorded in operating expenses during the six months ended December 31, 2020 and 2019. Impairment of Long-Lived Assets Long-lived assets, which include property, plant and equipment and intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Recoverability of long-lived assets to be held and used is measured by comparing the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the assets. Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. Based on its review, the Company, as of June 30, 2020, performed an impairment test of all of its intangible assets. Based on the Company’s analysis, the company had an amortization of intangible assets of $700 for the six months ended December 31, 2020 and 2019, respectively. Leases In February 2016, the FASB established Topic 842, Leases, by issuing Accounting Standards Update (“ASU”) No. 2016-02, which requires lessees to recognize the rights and obligations created by leases on the balance sheet and disclose key information about leasing arrangements. Topic 842 was subsequently amended by ASU No. 2018-11, Targeted Improvements, ASU No. 2018-10, Codification Improvements to Topic 842, and ASU No. 2018-01, Land Easement Practical Expedient for Transition to Topic 842. The new standard establishes a right-of-use model (“ROU”) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the statement of operations. The new standard became effective April 1, 2019. A modified retrospective transition approach is required, applying the new standard to all leases existing at the date of initial application. An entity may choose to use either (1) its effective date or (2) the beginning of the earliest comparative period presented in the financial statements as its date of initial application. If an entity chooses the second option, the transition requirements for existing leases also apply to leases entered into between the date of initial application and the effective date. The entity must also recast its comparative period financial statements and provide the disclosures required by the new standard for the comparative periods. The Company adopted the new standard on July 1, 2019 using the modified retrospective transition approach as of the effective date of the initial application. The new standard provides a number of optional practical expedients in transition. The Company elected the “package of practical expedients”, which permits entities not to reassess under the new lease standard prior conclusions about lease identification, lease classification and initial direct costs. The Company does not expect to elect the use-of-hindsight or the practical expedient pertaining to land easements. The most significant effects of the adoption of the new standard relate to the recognition of new ROU assets and lease labilities on our balance sheet for office operating leases and providing significant new disclosures about our leasing activities. The new standard also provides practical expedients for an entity’s ongoing accounting. The Company has also elected the short-term leases recognition exemption for all leases that qualify. This means that the Company will not recognize ROU assets or lease liabilities, and this includes not recognizing ROU assets and lease liabilities, for existing short-term leases of those assets in transition. The Company also currently expects to elect the practical expedient to not separate lease and non-lease components for its leases. All existing leases are reported under this rule. Under ASC 840, leases were classified as either capital or operating, and the classification significantly impacted the effect the contract had on the company’s financial statements. Capital lease classification resulted in a liability that was recorded on a company’s balance sheet, whereas operating leases did not impact the balance sheet. After the new adoption, $1,105,755 of operating lease right-of-use asset and $1,140,041 of operating lease liabilities were reflected on the Company’s June 30, 2020 financial statements and $842,549 of operating lease right-of-use asset and $878,214 of operating lease liabilities were reflected on the Company’s December 31, 2020 financial statements. Stock based compensation Stock based compensation cost to employees is measured at the date of grant, based on the calculated fair value of the stock-based award, and will be recognized as expense over the employee’s requisite service period (generally the vesting period of the award). We estimate the fair value of employee stock options granted using the Binomial Option Pricing Model. Key assumptions used to estimate the fair value of stock options will include the exercise price of the award, the fair value of our common stock on the date of grant, the expected option term, the risk-free interest rate at the date of grant, the expected volatility and the expected annual dividend yield on our common stock. We use our company’s own data among other information to estimate the expected price volatility and the expected forfeiture rate. Share-based compensation awards issued to non-employees for services rendered are recorded at either the fair value of the services rendered or the fair value of the share-based payment, whichever is more readily determinable. Earnings ( Loss) per share We calculate basic earnings (loss) per share (“EPS”) by dividing our net income (loss) by the weighted average number of common shares outstanding for the period, without considering common stock equivalents. Diluted EPS is computed by dividing net income or net loss by the weighted average number of common shares outstanding for the period and the weighted average number of dilutive common stock equivalents, such as options and warrants. Options and warrants are only included in the calculation of diluted EPS when their effect is dilutive. Fair value of financial instruments ASC Topic 820 defines fair value, establishes a framework for measuring fair value, establishes a three-level valuation hierarchy for disclosure of fair value measurement and enhances disclosure requirements for fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The three levels are defined as follows: Level 1 - observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 - include other inputs that are directly or indirectly observable in the marketplace. Level 3 - unobservable inputs which are supported by little or no market activity. The Company used Level 3 inputs for its valuation methodology for the derivative liabilities in determining the fair value using the Binomial option-pricing model for the six months ended December 31, 2020. Derivative instruments The fair value of derivative instruments is recorded and shown separately under current liabilities. Changes in the fair value of derivatives liability are recorded in the consolidated statement of operations under non-operating income (expense). Our 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 is then re-valued at each reporting date, with changes in the fair value reported in the consolidated statements of operations. For stock-based derivative financial instruments, the Company uses a weighted average Binomial option-pricing model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. Segment Reporting FASB ASC Topic 280, “Segment Reporting”, requires use of the “management approach” model for segment reporting. The management approach model is based on the way a company’s management organizes segments within the Company for making operating decisions and assessing performance. Reportable segments are based on products and services, geography, legal structure, management structure, or any other manner in which management disaggregates a company. As of December 31, 2020 substantially all of the Company’s operations were conducted in three industry segments – (1) paper and paper-based products such as paper cups, cup lids, food containers, etc., which accounted for approximately 24% of the Company’s revenues as of December 31, 2020; (2) non-medical supplies such as non-medical fascial masks, which accounted for approximately 3% of the Company’s total revenues as of December 31, 2020; (3) cannabis products delivery service and sales, which accounted for approximately 73% of the Company’s total revenues as of December 31, 2020. New accounting pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The new standard establishes an ROU model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company have adopted this ASU on the consolidated financial statements in the quarter ended September 30, 2019. In December 2019, the FASB issued ASU 2019-12, “Simplifying the Accounting for Income Taxes”. The pronouncement simplifies the accounting for income taxes by removing certain exceptions to the general principles in ASC Topic 740, “Income Taxes”. The pronouncement also improves consistent application of and simplifies GAAP for other areas of Topic 740 by clarifying and amending existing guidance. ASU 2019-12 will be effective for us beginning in the first quarter of fiscal 2021, with early adoption permitted. We are still evaluating the impact this guidance will have on our consolidated financial statements. In January 2020, the FASB issued ASU No. 2020-01, Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivative and Hedging (Topic 815), which clarifies the interaction of rules for equity securities, the equity method of accounting, and forward contracts and purchase options on certain types of securities. The guidance clarifies how to account for the transition into and out of the equity method of accounting when considering observable transactions under the measurement alternative. The ASU is effective for annual reporting periods beginning after December 15, 2020, including interim reporting periods within those annual periods, with early adoption permitted. We are currently evaluating the impact of the new guidance on our consolidated financial statements. |
Concentration
Concentration | 6 Months Ended |
Dec. 31, 2020 | |
Risks and Uncertainties [Abstract] | |
Concentration | 3. Concentration Customers For the six months ended December 31, 2020 and 2019, our Company earned net revenues of $2,446,979 and $1,474,784 respectively. The vast majority of these revenues for the period ended December 31, 2020 were derived from a large number of customers, whereas the vast majority of these revenues for the period ended December 31, 2019 were derived from a limited number of customers. There was one customer that accounted for approximately 13.9% of the Company’s total revenues for the period ended December 31, 2020. Suppliers For the period ended December 31, 2020, we purchased products for sale by the Company’s subsidiary from several contract manufacturers located in Asia and the U.S. A substantial portion of the Company’s inventory was purchased from two (2) suppliers. The two suppliers accounted for 25.5% and 16.20%, respectively, of the Company’s total inventory purchase for the period ended December 31, 2020. For the period ended December 31, 2019, we purchased products for sale by the company’s subsidiaries from several contract manufacturers located in Asia and the U.S. A substantial portion of the Company’s inventory is purchased from two (2) suppliers. The two (2) suppliers accounted as follows: Two suppliers accounted for 31.21% and 17.80% of the Company’s total inventory purchase for the period ended December 31, 2019, respectively. |
VIE
VIE | 6 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
VIE | 4. VIE On February 7, 2020, the Company entered into a share sale and purchase agreement (the “Indigo Agreement”) with Indigo Dye Group Corp. (“Indigo”), a corporation located in Sacramento, California. Indigo carries on business as a cannabis seller and delivery business under the name BudCars. The major Cannabis Products include Flower, Edibles, Vape Cartridges, Pre-Rolls, & Concentrates, etc. All the products are finished goods. In addition, Indigo is operating a non-store front retail delivery business (Type-9 License# C9-0000286) in California. Pursuant to the terms of the Indigo Agreement, the Company agree to invest $700,000 (the “Investment”) into Indigo for inventory, equipment, and marketing expenses. The Investment shall be made in twelve monthly equal installments of $58,333 with the acceleration of the payment schedule possible depending on business growth, cash flow needs and capital availability. In exchange, the Company received 40% of Indigo’s issued shares. upon execution of the final agreement. The value used for this transaction is $1,750,000 and each percentage (1%) of the company is worth $17,500. In the event that the Company is not able to make a payment of $58,333 in any month, it will have 90 days to cure the default. On the 91st day the investment plan will cease and the amount of invested capital will be calculated based on an enterprise value of $1,750,000 or $17,500 per 1% of owned equity. In addition, subject to the terms and conditions of the Indigo Agreement, the Company has the option to acquire an additional 30% interest in Indigo. Upon exercise of the option, the Company would obtain control over Indigo. From late May 2020 until September 30, 2020, the Company was actively involved in development of Indigo’s operations with power to direct the activities and significantly impact Indigo’s economic performance. The Company also has obligations to absorb losses and right to receive benefits from Indigo. As such, in accordance with ASC 810-10-25-38A through 25-38J, Indigo is consolidated as an VIE of the Company. Starting on October 1, 2020, the Company plans to open new locations via purchasing equity into other Brand/Franchises to cover delivery for the entire California. Therefore, the Company likely not to proceeds the option to acquire the additional 30% interest in Indigo at the moment. In addition, the Company is no longer involve in day-to-day operations and the Company will be pursuing cannabis delivery moving forward, independently of Indigo Dye Group. Sugarmade is no longer involve in day-to-day operations. As of October 1, 2020, the Company continues to hold approximately 29% of the ownership of Indigo but ceased to have a controlling interest in the partnership and it was deconsolidated and recorded as an investment in nonconsolidated affiliate at its $505,449 estimated fair value and changed to equity method of accounting. See footnote #6 Noncontrolling interest and deconsolidation of VIE for details. |
Noncontrolling Interest and Dec
Noncontrolling Interest and Deconsolidation of VIE | 6 Months Ended |
Dec. 31, 2020 | |
Noncontrolling Interest And Deconsolidation Of Vie | |
Noncontrolling Interest and Deconsolidation of VIE | 6. Noncontrolling Interest and Deconsolidation of VIE Starting in fiscal year ended June 30, 2020, the Company had a variable interest entity, Indigo Dye Group, for accounting purposes. The Company owned approximately 29% of Indigo’s outstanding equity and as of September 30, 2020, involved its day-to-day operations, which gave the Company the power to direct the activities of Indigo that most significantly impact its economic performance. Accordingly, the Company recognized the carrying value of the noncontrolling interest as a component of total shareholders’ equity, and the consolidated financial statements included the financial position and results of operations of Indigo as of and for the periods ended June 30, 2020 and September 30, 2020. Starting on October 1, 2020, the Company plans to open new locations via purchasing equity in other Brand/Franchises to cover delivery for the entire California. Therefore, the Company is not likely at this time to exercise its option to acquire the additional 30% interest in Indigo. In addition, the Company is no longer involved in day-to-day operations of Indigo and going forward, the Company intends to pursue cannabis delivery independent of Indigo. As of October 1, 2020, the Company ceased to have control over the day-to-day business of Indigo and it was deconsolidated and recorded as an investment in nonconsolidated affiliate at its $505,449 estimated fair value and changed to equity method of accounting. Pursuant to the terms of the Indigo agreement, if the Company determines, in its discretion not to continue to make monthly payments, its 40% ownership interest in Indigo will be decreased according to the payment then made. During the quarter ended December 31 ,2020, if the Company makes no additional payments, it will hold approximately 33% of the ownership of Indigo. See Note 5 and Note 6. The net asset value of the Company’s variable interest in Indigo Dye Group was approximately $326,812 as of October 1, 2020, the date of deconsolidation. The value of the Company’s variable interest on the date of deconsolidation was based on management’s estimate of the fair value of Indigo at that time. The Company concluded that the market approach was the most appropriate method to determine the fair value of the entity on the date of deconsolidation, given that Indigo raised equity funding from third-party investors around the same period (i.e., level 2 inputs). The Company recognized a gain on deconsolidation of approximately $313,928 with no related tax impact, which is included in other income, net on the consolidated statement of operations. As the Company is not obligated to fund future losses of Indigo, the carrying amount is the Company’s maximum risk of loss. |
Legal Proceedings
Legal Proceedings | 6 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Proceedings | 7. Legal Proceedings From time to time and in the course of business, we may become involved in various legal proceedings seeking monetary damages and other relief. The amount of the ultimate liability, if any, from such claims cannot be determined. As of December 31, 2020, there were no legal claims pending or threatened against the Company that in the opinion of our management would be likely to have a material adverse effect on our financial position, results of operations or cash flows. However, as of December 31, 2020, we were involved in the following legal proceedings: ● On December 11, 2013, the Company was served with a complaint from two convertible note holders and investors in the Company. On February 21, 2017, the Company signed a settlement agreement with the plaintiffs in the matter of Hannan vs. Sugarmade. Under the terms of the settlement agreement, the company agreed to pay the plaintiffs an aggregate of $227,000 to settle all claims against the Company, which included the payoff of two notes outstanding. The parties had estimated the value of the notes at approximately $80,000. As of June 30, 2020, third parties had purchased two (2) notes of approximately $80,000. As of December 31, 2020, there remains a balance, plus accrued interest on the $227,000 and on the $80,000 due under the notes. There can be no assurances the ultimate liability relative to these lawsuits will not exceed what is outlined above. |
Cash
Cash | 6 Months Ended |
Dec. 31, 2020 | |
Cash and Cash Equivalents [Abstract] | |
Cash | 8. Cash Cash and cash equivalents consist of amounts held as bank deposits and highly liquid debt instruments purchased with an original maturity of three months or less. From time to time, we may maintain bank balances in interest bearing accounts in excess of the $250,000 currently insured by the Federal Deposit Insurance Corporation for interest bearing accounts (there is currently no insurance limit for deposits in noninterest bearing accounts). We have not experienced any losses with respect to cash. Management believes our Company is not exposed to any significant credit risk with respect to its cash. |
Accounts Receivable
Accounts Receivable | 6 Months Ended |
Dec. 31, 2020 | |
Credit Loss [Abstract] | |
Accounts Receivable | 9. Accounts Receivable Accounts receivable are carried at their estimated collectible amounts, net of any estimated allowances for doubtful accounts. We grant unsecured credit to our customer’s deemed credit worthy. Ongoing credit evaluations are performed and potential credit losses estimated by management are charged to operations on a regular basis. At the time any particular account receivable is deemed uncollectible, the balance is charged to the allowance for doubtful accounts. The Company had accounts receivable net of allowances of $11,546 as of December 31, 2020 and of $134,517 as of June 30, 2020. |
Loans Receivable
Loans Receivable | 6 Months Ended |
Dec. 31, 2020 | |
Receivables [Abstract] | |
Loans Receivable | 10. Loans Receivable Loans receivable amounted $0 and $1,365 as of December 31, 2020 and June 30, 2020, respectively. Loan receivables are mainly advanced payments to the other companies. |
Loans Receivable - Related Part
Loans Receivable - Related Parties | 6 Months Ended |
Dec. 31, 2020 | |
Loans Receivable - Related Parties | |
Loans Receivable - Related Parties | 11. Loans Receivable – Related Parties Loan receivables – related parties amounted $211,276 and $318,535 as of December 31, 2020 and June 30, 2020, respectively. Loan receivables – related parties are mainly advanced payments to the related party companies for business expense. |
Inventory
Inventory | 6 Months Ended |
Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Inventory | 12. Inventory Inventory consists of finished goods paper and paper-based products such as paper cups and food containers ready for sale and is stated at the lower of cost or market. We value our inventory using the weighted average costing method. Our Company’s policy is to include as a part of inventory any freight incurred to ship the product from our contract manufacturers to our warehouses. Outbound freights costs related to shipping costs to our customers are considered period costs and are reflected in selling, general and administrative expenses. We regularly review inventory and consider forecasts of future demand, market conditions and product obsolescence. If the estimated realizable value of our inventory is less than cost, we make provisions in order to reduce its carrying value to its estimated market value. On a consolidated basis, as of December 31, 2020 and June 30, 2020, the balance for the inventory totaled $617,855 and $679,471, respectively. Obsolescence reserve at December 31, 2020 and June 30, 2020 were $185,312 and $15,445, respectively. |
Other Current Assets
Other Current Assets | 6 Months Ended |
Dec. 31, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Current Assets | 13. Other Current Assets As of December 31, 2020 and June 30, 2020, other current assets consisted of the following: For the periods ended December 31, 2020 June 30, 2020 Prepaid Deposit $ 8,483 $ 48,483 Prepaid Inventory 938,422 65,449 Employees Advance 1,786 324 Prepaid Expenses 2,859 35,157 Undeposited Funds 11,711 71,550 Other — 42,441 Total: $ 963,261 $ 263,404 |
Intangible Asset
Intangible Asset | 6 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Asset | 14. Intangible Asset On August 21, 2017, the Company entered into an intellectual property assignment agreement with Sound Decisions to revamp the Company’s shoplifty website to generate and attract more traffic from potential customers. The Company made a payment of $14,000 for the website (intellectual property). The Company amortized this use right as intangible asset over ten years, and recorded amortization expense of $700 for the six months ended December 31, 2020 and 2019, respectively. |
Property and Equipment, Net
Property and Equipment, Net | 6 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | 15. Property and Equipment, net As of December 31, 2020 and June 30, 2020, property, plant and equipment consisted of the following: Fixed Assets December 31, 2020 June 30, 2020 Office and equipment $ 732,062 $ 739,447 Motor vehicles 63,954 164,244 Leasehold Improvement 21,970 24,470 Total 817,986 928,161 Less: accumulated depreciation (457,641 ) (429,116 ) Plant and Equipment, net $ 360,345 $ 499,045 For the periods ended December 31, 2020 and June 30, 2020, depreciation expenses amounted to $44,684 and $110,032, respectively. The Company reviews the carrying value of property and equipment for impairment whenever events and circumstances indicate that the carrying value of an asset may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition. In cases where undiscounted expected future cash flows are less than the carrying value, an impairment loss is recognized equal to an amount by which the carrying value exceeds the fair value of assets. The factors considered by management in performing this assessment include current operating results, trends and prospects, the manner in which the property is used, and the effects of obsolescence, demand, competition and other economic factors. Based on this assessment, no impairment expenses for property, plant, and equipment was recorded in operating expenses during the periods ended December 31, 2020 and June 30, 2020. |
Unearned Revenues
Unearned Revenues | 6 Months Ended |
Dec. 31, 2020 | |
Revenue Recognition and Deferred Revenue [Abstract] | |
Unearned Revenues | 16. Unearned Revenues Unearned revenue amounted to $57,157 and $53,248 as of December 31, 2020 and June 30, 2020, respectively. Unearned revenues are mainly due to contracts with extended payment terms, acceptance provisions and future delivery obligation. |
Other Payables
Other Payables | 6 Months Ended |
Dec. 31, 2020 | |
Payables and Accruals [Abstract] | |
Other Payables | 17. Other Payables Other payable amounted to $950,187 and $691,801 as of December 31, 2020 and June 30, 2020, respectively. Other payables are mainly credit card payables and taxes payables. As of December 31, 2020, the Company had 8 credit cards, one American Express is a charge card with no limit and zero interest. The remaining 7 cards had total credit limit of $85,000, and APR from 11.24% to 29.99%. |
Convertible Notes
Convertible Notes | 6 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Convertible Notes | 18. Convertible Notes As of December 31, 2020 and June 30, 2020, the balance owing on convertible notes, net of debt discount, with terms as described below was $1,651,430 and $1,740,122, respectively. Convertible note 1: On August 24, 2012, the Company entered into a convertible promissory note with an accredited investor for $25,000. The note has a term of six (6) months with an interest rate of 10% and is convertible to common shares at a 25% discount of the average of 30 days prior to the conversion date. As of December 31, 2020, the note is in default. Convertible note 2: On September 18, 2012, the Company entered into a convertible promissory note with an accredited investor for $25,000. The note has a term of six (6) months with an interest rate of 10% and is convertible to common shares at a 25% discount of the average of 30 days prior to the conversion date. As of December 31, 2020, the note is in default. Convertible note 3: On December 21, 2012, the Company entered into a convertible promissory note with an accredited investor for $100,000. The note has a term of six (6) months with an interest rate of 10% and is convertible to common shares at a 25% discount of the average of 30 days prior to the conversion date. As of December 31, 2020, the note is in default. Convertible note 4: On November 1, 2018, the Company entered into a convertible promissory note with an accredited investor for $100,000. The note has a term of one year with an interest rate of 8% and is convertible to common shares at a fixed conversion price of $0.07. As of December 31, 2020, the note is in default. Convertible note 5: On November 16, 2018, the Company entered into a convertible promissory note with an accredited investor for $80,000. The note has a term of one year with an interest rate of 8% and is convertible to common shares at a fixed conversion price of $0.07. As of December 31, 2020, the note is in default. Convertible note 6: On November 16, 2018, the Company entered into a convertible promissory note with an accredited investor for $40,000. The note has a term of one year with an interest rate of 8% and is convertible to common shares at a fixed conversion price of $0.07. As of December 31, 2020, the note is in default. Convertible note 7: On December 3, 2018, the Company entered into a convertible promissory note with an accredited investor for $35,000. The note has a term of one year with an interest rate of 8% and is convertible to common shares at a fixed conversion price of $0.07. As of December 31, 2020, the note is in default. Convertible note 8: On September 27, 2019, the Company entered a convertible promissory note with an accredited investor for a total amount of $165,000 (includes $16,250 OID). The note is due 360 days and bear an interest rate of 8%. The conversion price for the note is 55% of the lowest closing bid for the 20 consecutive trading days prior to the conversion date. During the year ended June 30, 2020, the note holder converted $50,000 principal with $2,992 interest expense into 56,007,062 shares of the Company’s common stock. As of December 31, 2020, the note has been fully converted. Convertible note 9: On October 28, 2019, the Company entered a convertible promissory note with an accredited investor for a total amount of $225,500 (includes $23,000 OID). The note is due 360 days and bear an interest rate of 8%. The conversion price for the note is 60% of the lowest closing bid for the 20 consecutive trading days prior to the conversion date. As of December 31, 2020, the note has been fully converted. Convertible note 10: On October 28, 2019, the Company entered a convertible promissory note with an accredited investor for a total amount of $225,500 (includes $23,000 OID). The note is due 360 days and bear an interest rate of 8%. The conversion price for the note is 60% of the lowest closing bid for the 20 consecutive trading days prior to the conversion date. As of December 31, 2020, the note has been fully converted. Convertible note 11: On November 29, 2019, the Company entered a convertible promissory note with an accredited investor for a total amount of $106,150 (includes $11,150 OID). The note is due 360 days and bear an interest rate of 8%. The conversion price for the note is 60% of the lowest closing bid for the 20 consecutive trading days prior to the conversion date. As of December 31, 2020, the note has been fully converted Convertible note 12: On November 29, 2019, the Company entered a convertible promissory note with an accredited investor for a total amount of $106,150 (includes $11,150 OID). The note is due 360 days and bear an interest rate of 8%. The conversion price for the note is 60% of the lowest closing bid for the 20 consecutive trading days prior to the conversion date. As of December 31, 2020, the note has been fully converted. Convertible note 13: On December 10, 2019, the Company entered a convertible promissory note with an accredited investor for a total amount of $106,700 (includes $11,700 OID). The note is due 360 days and bear an interest rate of 8%. The conversion price for the note is 60% of the lowest closing bid for the 20 consecutive trading days prior to the conversion date. As of December 31, 2020, the note has been fully converted. Convertible note 14: On December 10, 2019, the Company entered a convertible promissory note with an accredited investor for a total amount of $106,700 (includes $11,700 OID). The note is due 360 days and bear an interest rate of 8%. The conversion price for the note is 60% of the lowest closing bid for the 20 consecutive trading days prior to the conversion date. As of December 31, 2020, the note has been fully converted. Convertible note 15: On December 27, 2019, the Company entered a convertible promissory note with an accredited investor for a total amount of $112,200 (includes $12,200 OID). The note is due 360 days and bear an interest rate of 8%. The conversion price for the note is 60% of the lowest closing bid for the 20 consecutive trading days prior to the conversion date. As of December 31, 2020, the note has been fully converted. Convertible note 16: On October 31, 2019, the Company entered a convertible promissory note with an accredited investor for a total amount of $139,301. The note is due 360 days and bear an interest rate of 8%. The conversion price for the note is $0.008 per share. Convertible note 17: On November 1, 2019, the Company entered a convertible promissory note with an accredited investor for a total amount of $100,000. The note is due 360 days and bear an interest rate of 8%. The conversion price for the note is $0.008 per share. Convertible note 18: On January 3, 2020, the Company entered a convertible promissory note with an accredited investor for a total amount of $112,200 (includes $12,200 OID). The note is due 360 days and bear an interest rate of 8%. The conversion price for the note is 60% of the lowest closing bid for the 20 consecutive trading days prior to the conversion date. As of December 31, 2020, the note has been fully converted. Convertible note 19: On January 14, 2020, the Company entered a convertible promissory note with an accredited investor for a total amount of $150,000 (includes $3,000 OID). The note is due 360 days and bear an interest rate of 8%. The conversion price for the note is 38% discount to average of three lowest closing prices for the 10 consecutive trading days prior to the conversion date. During the three months ended September 30, 2020, the note holder converted $50,000 principal into 29,868,578 shares of the Company’s common stock. As of December 31, 2020, the remaining principal and unpaid interest has been fully repaid by cash. Convertible note 20: On January 22, 2020, the Company entered a convertible promissory note with an accredited investor for a total amount of $128,000 (includes $3,000 OID). The note is due 360 days and bear an interest rate of 10%. The conversion price for the note is 35% discount to average of two lowest closing prices for the 20 consecutive trading days prior to the conversion date. As of December 31, 2020, the note principal and unpaid interest has been fully repaid by cash. Convertible note 21: On February 4, 2020, the Company entered a convertible promissory note with an accredited investor for a total amount of $110,000 (includes $10,000 OID). The note is due 360 days and bear an interest rate of 12%. The conversion price for the note is $0.001 per share. As of December 31, 2020, the note has been fully converted. Convertible note 22: On February 18, 2020, the Company entered a convertible promissory note with an accredited investor for a total amount of $100,000 (includes $10,000 OID). The note is due 360 days and bear an interest rate of 12%. The conversion price for the note is $0.001 per share. Convertible note 23: On March 5, 2020, the Company entered a convertible promissory note with an accredited investor for a total amount of $125,000 (includes $3,000 OID). The note is due 360 days and bear an interest rate of 8%. The conversion price for the note is 38% discount to average of three lowest closing prices for the 10 consecutive trading days prior to the conversion date. As of December 31, 2020, the note has been fully converted. Convertible note 24: On April 24, 2020, the Company entered a convertible promissory note with an accredited investor for a total amount of $75,000 (includes $2,000 OID). The note is due 360 days and bear an interest rate of 8%. The conversion price for the note is 38% discount to average of three lowest trading prices for the 10 consecutive trading days prior to the conversion date. Convertible note 25: On June 10, 2020, the Company entered a convertible promissory note with an accredited investor for a total amount of $36,300 (includes $3,300 OID and $3,000 legal expense). The note is due 360 days and bear an interest rate of 8%. The conversion price for the note is 60% of the lowest trading bid for the 20 consecutive trading days prior to the conversion date. Convertible note 26: On June 18, 2020, the Company entered a convertible promissory note with an accredited investor for a total amount of $36,300 (includes $3,300 OID and $3,000 legal expense). The note is due 360 days and bear an interest rate of 8%. The conversion price for the note is 60% of the lowest closing bid for the 20 consecutive trading days prior to the conversion date. Convertible note 27: On July 6, 2020, the Company entered a convertible promissory note with an accredited investor for a total amount of $77,000 (includes $2,000 OID). The note is due 360 days and bear an interest rate of 8%. The conversion price for the note is 38% discount to average of three lowest trading prices for the 10 consecutive trading days prior to the conversion date. Convertible note 28: On July 7, 2020, the Company entered a convertible promissory note with an accredited investor for a total amount of $153,000 (includes $3,000 OID). The note is due 360 days and bear an interest rate of 10%. The conversion price for the note is 35% discount to average of two lowest trading prices for the 20 consecutive trading days prior to the conversion date. Convertible note 29: On July 16, 2020, the Company entered a convertible promissory note with an accredited investor for a total amount of $260,700 (includes $23,700 OID and $12,000 legal expense). The note is due 360 days and bear an interest rate of 8%. The conversion price for the note is 60% of the lowest trading bid for the 20 consecutive trading days prior to the conversion date. Convertible note 30: On July 21, 2020, the Company entered a convertible promissory note with an accredited investor for a total amount of $200,200 (includes $18,200 OID and $7,000 legal expense). The note is due 360 days and bear an interest rate of 8%. The conversion price for the note is 60% of the lowest trading bid for the 20 consecutive trading days prior to the conversion date. Convertible note 31: On September 8, 2020, the Company entered a convertible promissory note with an accredited investor for a total amount of $110,000 (includes $10,000 OID). The note is due 180 days and bear an interest rate of 12%. The conversion price for the note is $0.01 per share. After the six months anniversary of this note, the conversion price shall be equal to the lower of the fixed price of $0.01 or 65% of the lowest trading price of the common stock for the 20 prior trading days including the day upon which a conversion notice is received by the Company or its transfer agent. Convertible note 32: On September 10, 2020, the Company entered a convertible promissory note with an accredited investor for a total amount of $227,700 (includes $20,700 OID and $7,000 legal expense). The note is due 360 days and bear an interest rate of 8%. The conversion price for the note is 60% of the lowest trading bid for the 20 consecutive trading days prior to the conversion date. Convertible note 33: On September 24, 2020, the Company entered a convertible promissory note with an accredited investor for a total amount of $212,300 (includes $19,300 OID). The note is due 180 days and bear an interest rate of 12%. The conversion price for the note is $0.01 per share. After the six months anniversary of this note, the conversion price shall be equal to the lower of the fixed price of $0.01 or 65% of the lowest trading price of the common stock for the 20 prior trading days including the day upon which a conversion notice is received by the Company or its transfer agent. Convertible note 34: On October 8, 2020, the Company entered a convertible promissory note with an accredited investor for a total amount of $231,000 (includes $21,000 OID). The note is due 180 days and bear an interest rate of 12%. The conversion price for the note is $0.01 per share. After the six months anniversary of this note, the conversion price shall be equal to the lower of the fixed price of $0.01 or 65% of the lowest trading price of the common stock for the 20 prior trading days including the day upon which a conversion notice is received by the Company or its transfer agent. Convertible note 35: On October 13, 2020, the Company entered a convertible promissory note with an accredited investor for a total amount of $275,000 (includes $25,000 OID). The note is due 180 days and bear an interest rate of 12%. The conversion price for the note is $0.01 per share. After the six months anniversary of this note, the conversion price shall be equal to the lower of the fixed price of $0.01 or 65% of the lowest trading price of the common stock for the 20 prior trading days including the day upon which a conversion notice is received by the Company or its transfer agent. Convertible note 36: On November 10, 2020, the Company entered a convertible promissory note with an accredited investor for a total amount of $58,300 (includes $5,300 OID). The note is due 360 days and bear an interest rate of 8%. The conversion price for the note is 60% of the lowest trading bid for the 20 consecutive trading days prior to the conversion date. In connection with the convertible debt, debt discount balance as of December 31, 2020 and June 30, 2020 were $1,045,671 and $880,879, respectively, and were being amortized and recorded as interest expenses over the term of the convertible debt. |
Derivative Liabilities
Derivative Liabilities | 6 Months Ended |
Dec. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative liabilities | 19. Derivative liabilities The derivative liability is derived from the conversion features in note 8 and stock warrant in note 10. All were valued using the weighted-average Binomial option pricing model using the assumptions detailed below. As of December 31, 2020 and June 30, 2020, the derivative liability was $1,595,186 and $5,597,095, respectively. The Company recorded $3,992,108 and $1,442,295 loss from changes in derivative liability during the period ended December 31, 2020 and June 30, 2020, respectively. The Binomial model with the following assumption inputs: December 31, 2020 Annual dividend yield — Expected life (years) 0.2-1.00 Risk-free interest rate 0.09-0.16 % Expected volatility 89-187 % June 30, 2020 Annual dividend yield — Expected life (years) 0.5-1.00 Risk-free interest rate 0.16-2.10 % Expected volatility 113-175 % Fair value of the derivative is summarized as below: Beginning Balance, June 30, 2020 $ 5,597,095 Additions 2,326,977 Cancellation of Derivative Liabilities Due to Cash Repayment (228,489 ) Cancellation of Derivative liabilities Due to Share Reservation (214,757 ) Mark to Market (3,763,618 ) Reclassification to APIC due to conversions (2,122,022 ) Ending Balance, December 31, 2020 $ 1,595,186 Beginning Balance, June 30, 2019 $ 2,991,953 Additions 3,538,927 Mark to Market 2,314,089 Reclassification to APIC due to conversions (957,488 ) Ending Balance, December 31, 2019 $ 3,259,345 |
Stock Warrants
Stock Warrants | 6 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Stock Warrants | 20. Stock warrants On September 7, 2018, the Company entered into a settlement agreement with several investors to settle all disputes by issues additional unrestricted shares. In connection with the note each individual investor will also receive warrants equal to the number of the shares the investors own as of the effective date of the settlement agreement. The warrants have a life of five years with an exercise price as of the date of exchange. The fair value of the warrants at the grant date was $56,730. As of December 31, 2020 and June 30, 2020, the fair value of the warrant liability was $521 and $1,910, respectively. On February 4, 2020, the Company entered into a warrant agreement with an accredited investor up to 10,000,000 shares of common stock of the Company at exercise price of $0.008 per share, subject to adjustment. The warrants have a life of five years with an exercise price as of the date of exchange. The fair value of the warrants at the grant date was $80,000. As of December 31, 2020 and June 30, 2020, the fair value of the warrant liability was $9,000 and $78,000, respectively. As of December 31, 2020 and June 30, 2020, the total fair value of the warrant liability was $9,521 and $79,910, respectively. |
Note Payable
Note Payable | 6 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Note Payable | 21. Note payable Note Payable Due to Bank – During October 2011, we entered into a revolving demand note (line of credit) arrangement with HSBC Bank USA, with a revolving borrowing limit of $150,000. The line of credit bears a variable interest rate of one quarter percent (0.25%) above the prime rate (5.5% as of December 20, 2018). In the event the deposit account is not established or minimum balance maintained, HSBC can charge a higher rate of interest of up to 4.0% above prime rate. As of December 31, 2020 and June 30, 2020, the loan principal balance was $25,982. As of December 31, 2020, the note is in default. Notes Payable Due to Non-related parties On June 15, 2018, the Company entered into a promissory note with one of the accredited investors. The original principal amount was $20,000 and the note bears 8% interest per annum. The note was payable upon demand. As of December 31, 2020 and June 30, 2020, this note had a balance of $20,000 and $20,000, respectively. Notes Payable Due to Related Parties On January 23, 2013, the Company entered into a promissory note with its former employee of the Company who owns less than 5% of the Company’s stock. The original principal amount was $40,000 and the note bears no interest. The note was payable upon demand. As of December 31, 2020 and June 30, 2020, this note had a balance of $15,427 and $15,427, respectively. |
Loans Payable
Loans Payable | 6 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Loans Payable | 22. Loans payable On October 1, 2017, SGMD entered a straight promissory note with Greater Asia Technology Limited (Greater Asia) for borrowing $100,000 with maturity date on June 30, 2018; the note bears an interest rate of 33.33%. As of December 31, 2020 and June 30, 2020, the note was in default and the outstanding balance under this note was $73,844 and $96,401, respectively. During the year ended June 30, 2019, the Company entered a series of short-term loan agreements with Greater Asia Technology Limited (Greater Asia) for borrowing $375,000, with interest rate at 40% - 50% of the principal balance. As of December 31, 2020 and June 30, 2020, the outstanding balance with Greater Asia loans were $100,000 and $100,000, respectively. On January 6, 2015, the Company entered into repayment agreement with its former employee for a loan of $9,500 at no interest. As of December 31, 2020 and June 30, 2020, the Company has an outstanding balance of $4,423 and $3,584. On July 1, 2012, CarryOutSupplies entered an equipment loan agreement with a bank with maturity on June 21, 2024. The monthly payment is $648. As of December 31, 2020 and June 30, 2020, the outstanding balance under this loan were $20,665 and $24,524, respectively. On March 18, 2020, the Company entered into a loan agreement for $150,000 with Celtic Bank with maturity date on March 18, 2020. As of December 31, 2020 and June 30, 2020, the outstanding balance under this loan were $1,815 and $117,635, respectively. On June 26, 2020, the Company entered into a government loan agreement for $8,000 with maturity date on December 26, 2020. As of December 31, 2020 and June 30, 2020, the outstanding balance under this loan were $8,000. On April 27, 2020, we entered into a loan borrowed $110,000 from Bank of America (“Lender”), pursuant to a Promissory Note issued by Company to Lender (the “PPP Note”). The loan was made pursuant to the Payroll Protection Program established as part of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The PPP Note bears interest at 1.00% per annum and may be repaid at any time without penalty. The PPP Note contains customary events of default relating to, among other things, payment defaults, breach of representations and warranties, or provisions of the promissory note. The occurrence of an event of default may result in a claim for the immediate repayment of all amounts outstanding under the PPP Note. On July 28, 2020, we entered into a loan borrowed $159,900 from Bank of America (“Lender”), pursuant to a Promissory Note issued by Company to Lender (the “PPP Note”). The loan was made pursuant to the Payroll Protection Program established as part of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The PPP Note bears interest at 1.00% per annum and may be repaid at any time without penalty. The PPP Note contains customary events of default relating to, among other things, payment defaults, breach of representations and warranties, or provisions of the promissory note. The occurrence of an event of default may result in a claim for the immediate repayment of all amounts outstanding under the PPP Note. The Company accounting for the PPP loan under Topic 470: (a). Initially record the cash inflow from the PPP loan as a financial liability and would accrue interest in accordance with the interest method under ASC Subtopic 835-30; (b). Not impute additional interest at a market rate; (c). Continue to record the proceeds from the loan as a liability until either (1) the loan is partly or wholly forgiven and the debtor has been legally released or (2) the debtor pays off the loan; (d). Would reduce the liability by the amount forgiven and record a gain on extinguishment once the loan is partly or wholly forgiven and legal release is received. As of December 31, 2020 and June 30, 2020, the Company had an outstanding loan balance of $720,489 and $517,260, respectively. |
Loans Payable - Related Parties
Loans Payable - Related Parties | 6 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Loans Payable - Related Parties | 23. Loans Payable – Related Parties On July 7, 2016, SWC received a loan from an employee. The amount of the loan bears no interest and amortized on a monthly basis over the life of the loan. As of December 31, 2020 and June 30, 2020, the balance of the loan was $48,143 and $35,943, respectively. During the three months ended September 30, 2020, the Company received loans from related parties. The amount of the loan bears no interest. As of December 31, 2020 and June 30, 2020, the balance of the loan was $528,082 and $0, respectively. As of December 31, 2020 and June 30, 2020, the Company had an outstanding loan balance – related parties of $576,225 and $35,943, respectively. |
Shares to be Issued
Shares to be Issued | 6 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Shares to be Issued | 24. Shares to Be Issued During the year ended June 30, 2020, the Company had entered into one consulting service agreement and one employment agreement, which had potential shares to be issued in total amount of $101,577. During the six months ended December 31, 2020, the Company had potential shares to be issued to one employment agreement of $35,000. During the six months ended December 31, 2020, the Company had potential shares to be issued to one consulting agreement of $31,000. As of December 31, 2020 and June 30, 2020, the Company had balance of $167,577 and $101,577 share to be issued, respectively. |
Stockholder's Equity
Stockholder's Equity | 6 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Stockholder's Equity | 25. Stockholder’s Equity The Company is authorized to issue 10,000,000,000 shares of $.001 par value common stock and 10,000,000 shares of $.001 par value preferred stock. On April 22, 2020, the Company filed an amendment to increase the total authorized shares to 10,010,000,000 – 10,000,000,000 of which are designated as common stock, par $0.001 per share and 10,000,000 of which are designated as preferred stock, par value $0.001 per share. Share issuance during the three months ended September 30, 2020 - During the three months ended September 30, 2020, the Company issued 1,081,411,606 shares of common stock for debt conversions in total amount of $1,273,459. Share issuance during the three months ended December 31, 2020 - During the three months ended December 31, 2020, the Company issued 411,171,815 shares of common stock for debt conversions in total amount of $320,879. During the periods from December 14, 2014 through March 31, 2015, the Company issued 2,000,000 Series A preferred shares from an EB5 Program Investment. Five years from the date of issue (the “Conversion Date”), assuming Investor is approved for l-526, and each Preferred Share will automatically convert into that number of Common Shares having a “fair market value” of the Initial Investment plus a five (5) percent annualized return on Initial Investment, Fair market value will be determined by averaging the closing sale price of a Common Share for the 40 trading days immediately preceding the date of conversion on the U.S. stock exchange on which Common Shares are publicly traded. Should the Investor be unsuccessful in liquidating the Common Shares within 90 days after the Conversion Date, the Company shall buy back total Common Shares owned by Investor at a fixed amount of $500,000.00 plus 5% ROI per annum. During the three months ended December 31, 2020, those shares were automatically converted into 360,647,019 of common shares with a fair market value of $2,000,000 of initial investment plus a five percent annualized return on initial investment (“ROI”), or total ROI of $500,000. As of December 31, 2020 and June 30, 2020, the Company had 1,541,500 shares of its preferred stock issued and outstanding, and 3,616,507,670 and 1,763,277,230 shares of its common stock, respectively, issued and outstanding. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 26. Commitments and contingencies On February 23, 2018 the Company entered into lease agreement for a new office space commencing March 1, 2018. The term of the lease is for a (5) Five Years with 1 month free on the 1st year of the term. The monthly rent on the 1st year will be $11,770 with a 3% increase for each subsequent year. Total commitment for the full term of the lease will be $737,367. Our warehouse along with some office space is located at 20529 East Walnut Drive North, Diamond Bar, California, where we lease approximately 11,627 square feet of combined space. The lease term is for five years and two months ending on April 30, 2025. The current monthly rental payment for the facility is $13,022. Six Months Ended December 31, 2020 Lease Cost Operating lease cost (included in general and administration in the Company’s unaudited condensed statement of operations) $ 154,463 Other Information Cash paid for amounts included in the measurement of lease liabilities for the six months ended December 31, 2020 $ 107,438 Remaining lease term – operating leases (in years) 3.25 Average discount rate – operating leases 10 % The supplemental balance sheet information related to leases for the periods are as follows: Operating leases Short-term right-of-use assets $ 231,685 Long-term right-of-use assets $ 610,864 Total operating lease assets $ 842,549 Short-term operating lease liabilities $ 236,528 Long-term operating lease liabilities $ 641,687 Total operating lease liabilities $ 878,214 Maturities of the Company’s lease liabilities are as follows: Operating Period ending June 30, Lease 2021 $ 156,118 2022 305,040 2023 273,425 2024 172,465 2025 147,446 Total lease payments 1,054,494 Less: Imputed interest/present value discount (176,279 ) Present value of lease liabilities $ 878,214 |
Subsequent Events
Subsequent Events | 6 Months Ended |
Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | 27. Subsequent events Shares issued for cash On February 9, 2021, the Company entered into a stock subscription agreement to issue 150,000,000 shares of the Company’s common stock for cash in total amount of $225,000. Convertible Notes On February 9, 2021, the Company entered a convertible promissory note with an accredited investor for a total amount of $69,300 (includes $6,300 OID). The note is due 360 days and bear an interest rate of 8%. The conversion price for the note is 60% of the lowest trading bid for the 20 consecutive trading days prior to the conversion date. Conversions Subsequent to February 16, 2021, there were multiple accredited investors converted approx. $258,300 of the convertible notes into 389,256,291 shares of the Company’s common stocks. On February 8, 2021, Sugar Rush, Inc., a Nevada corporation and wholly owned subsidiary of Sugarmade, Inc., a Delaware corporation entered into a Common Share Purchase Agreement with Nug Avenue, Inc., a California corporation (the “Seller”). The Seller provides services pertaining to the licensed and regulated delivery of cannabis out of Lynwood, California, serving primarily the greater Los Angeles Metropolitan area (the “Lynwood Operations”). Pursuant to the Agreement, and subject to the satisfaction of the conditions as set forth therein, the Company agreed to purchase a seventy percent (70%) stake in the Seller’s Lynwood Operations for a purchase price of five hundred sixty thousand dollars ($560,000) (the “Stake Purchase”). Pursuant to the Agreement, the parties agreed that the Stake Purchase will entitle the Company to receive 70% of the revenues and profits generated by the Seller from its Lynwood Operations starting from February 8, 2021 (the “Effective Date”). Under the terms of the Agreement, the Company agreed to make periodic payments to the Seller to satisfy the $560,000 purchase price over a twelve (12) month period beginning on the Effective Date. Pursuant to the Agreement, the parties agreed that the $560,000 resulting from the Stake Purchase is to be used by the Seller for the expansion of business opportunities for the Lynwood Operations. Further, pursuant to the Agreement, the Seller agreed to grant the Company an option to invest in all future business opportunities of the Seller pertaining to any and all legal and regulated cannabis business operations. The Seller and the Company agreed to negotiate a formal agreement for this option within ninety (90) days of the Effective Date. Further, pursuant to the Agreement, Seller agreed to grant the Company unlimited participation rights in any future financings of the Seller, and to negotiate a formal agreement for such participation rights to be entered into by the Seller and the Company within ninety (90) days of the Effective Date. On February 9, 2021 (the “Closing Date”), the Closing occurred, and the Company acquired a 70% stake in the Seller’s Lynwood Operations pursuant to the terms of the Agreement. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. It is management’s opinion however, that all material adjustments (consisting of normal recurring adjustments) have been made which are necessary for a fair financial statement presentation. These interim condensed consolidated financial statements should be read in conjunction with our Company’s Annual Report on Form 10-K for the year ended June 30, 2020, which contains our audited consolidated financial statements and notes thereto, together with the Management’s Discussion and Analysis of Financial Condition and Results of Operation, for the fiscal year ended June 30, 2020. The interim results for the period ended December 31, 2020 are not necessarily indicative of the results for the full fiscal year. |
Principles of Consolidation | Principles of consolidation The unaudited condensed consolidated financial statements include the accounts of our Company and SWC, the Company’s wholly-owned subsidiary. All significant intercompany transactions and balances have been eliminated in consolidation. |
Going Concern | Going concern The Company’s continuation as a going concern is dependent on its ability to generate sufficient cash flows from operations to meet its obligations, in which it has not been successful, and/or obtaining additional financing from its shareholders or other sources, as may be required. Our unaudited condensed consolidated financial statements have been prepared assuming that we will continue as a going concern. Such assumption contemplates the realization of assets and satisfaction of liabilities in the normal course of business. These unaudited condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern. Management endeavors to increase revenue-generating operations. While the Company’s priority is on generating cash from operations, management also seek to raise additional working capital through various financing sources, including the sale of the Company’s equity and/or debt securities, which may not be available on commercially reasonable terms to our Company, or which may not be available at all. If such financing is not available on satisfactory terms, we may be unable to continue our business as desired and our operating results will be adversely affected. In addition, any financing arrangement may have potentially adverse effects on us and/or our stockholders. Debt financing (if available and undertaken) will increase expenses, must be repaid regardless of operating results and may involve restrictions limiting our operating flexibility. If we issue equity securities to raise additional funds, the percentage ownership of our existing stockholders will be reduced, and the new equity securities may have rights, preferences or privileges senior to those of the current holders of our common stock. |
Use of Estimates | Use of estimates The preparation of financial statements in conformity with GAAP requires our 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 significantly from those estimates. |
Revenue Recognition | Revenue recognition We recognize revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC’’) No. 606, Revenue Recognition. Sugarmade applied a five-step approach in determining the amount and timing of revenue to be recognized: (1) identifying the contract with a customer, (2) identifying the performance obligations in the contract, (3) determining the transaction price, (4) allocating the transaction price to the performance obligations in the contract and (5) recognizing revenue when the performance obligation is satisfied. Substantially all of the Company’s revenue is recognized at the time control of the products transfers to the customer. |
Property and Equipment | Property and equipment Property and equipment is stated at the historical cost, less accumulated depreciation. Depreciation on property and equipment is provided using the straight-line method over the estimated useful lives of the assets for both financial and income tax reporting purposes as follows: Machinery and equipment 3-5 years Furniture and equipment 7 years Vehicles 5 years Leasehold improvements 5 years Expenditures for renewals and betterments are capitalized while repairs and maintenance costs are normally charged to the statement of operations in the year in which they are incurred. In situations where it can be clearly demonstrated that the expenditure has resulted in an increase in the future economic benefits expected to be obtained from the use of the asset, the expenditure is capitalized as an additional cost of the asset. Upon sale or disposal of an asset, the historical cost and related accumulated depreciation or amortization of such asset were removed from their respective accounts and any gain or loss is recorded in the statements of income. The Company reviews the carrying value of property, plant, and equipment for impairment whenever events and circumstances indicate that the carrying value of an asset may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition. In cases where undiscounted expected future cash flows are less than the carrying value, an impairment loss is recognized equal to an amount by which the carrying value exceeds the fair value of assets. The factors considered by management in performing this assessment include current operating results, trends and prospects, the manner in which the property is used, and the effects of obsolescence, demand, competition and other economic factors. Based on this assessment, no impairment expenses for property, plant, and equipment was recorded in operating expenses during the six months ended December 31, 2020 and 2019. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Long-lived assets, which include property, plant and equipment and intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Recoverability of long-lived assets to be held and used is measured by comparing the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the assets. Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. Based on its review, the Company, as of June 30, 2020, performed an impairment test of all of its intangible assets. Based on the Company’s analysis, the company had an amortization of intangible assets of $700 for the six months ended December 31, 2020 and 2019, respectively. |
Leases | Leases In February 2016, the FASB established Topic 842, Leases, by issuing Accounting Standards Update (“ASU”) No. 2016-02, which requires lessees to recognize the rights and obligations created by leases on the balance sheet and disclose key information about leasing arrangements. Topic 842 was subsequently amended by ASU No. 2018-11, Targeted Improvements, ASU No. 2018-10, Codification Improvements to Topic 842, and ASU No. 2018-01, Land Easement Practical Expedient for Transition to Topic 842. The new standard establishes a right-of-use model (“ROU”) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the statement of operations. The new standard became effective April 1, 2019. A modified retrospective transition approach is required, applying the new standard to all leases existing at the date of initial application. An entity may choose to use either (1) its effective date or (2) the beginning of the earliest comparative period presented in the financial statements as its date of initial application. If an entity chooses the second option, the transition requirements for existing leases also apply to leases entered into between the date of initial application and the effective date. The entity must also recast its comparative period financial statements and provide the disclosures required by the new standard for the comparative periods. The Company adopted the new standard on July 1, 2019 using the modified retrospective transition approach as of the effective date of the initial application. The new standard provides a number of optional practical expedients in transition. The Company elected the “package of practical expedients”, which permits entities not to reassess under the new lease standard prior conclusions about lease identification, lease classification and initial direct costs. The Company does not expect to elect the use-of-hindsight or the practical expedient pertaining to land easements. The most significant effects of the adoption of the new standard relate to the recognition of new ROU assets and lease labilities on our balance sheet for office operating leases and providing significant new disclosures about our leasing activities. The new standard also provides practical expedients for an entity’s ongoing accounting. The Company has also elected the short-term leases recognition exemption for all leases that qualify. This means that the Company will not recognize ROU assets or lease liabilities, and this includes not recognizing ROU assets and lease liabilities, for existing short-term leases of those assets in transition. The Company also currently expects to elect the practical expedient to not separate lease and non-lease components for its leases. All existing leases are reported under this rule. Under ASC 840, leases were classified as either capital or operating, and the classification significantly impacted the effect the contract had on the company’s financial statements. Capital lease classification resulted in a liability that was recorded on a company’s balance sheet, whereas operating leases did not impact the balance sheet. After the new adoption, $1,105,755 of operating lease right-of-use asset and $1,140,041 of operating lease liabilities were reflected on the Company’s June 30, 2020 financial statements and $842,549 of operating lease right-of-use asset and $878,214 of operating lease liabilities were reflected on the Company’s December 31, 2020 financial statements. |
Stock Based Compensation | Stock based compensation Stock based compensation cost to employees is measured at the date of grant, based on the calculated fair value of the stock-based award, and will be recognized as expense over the employee’s requisite service period (generally the vesting period of the award). We estimate the fair value of employee stock options granted using the Binomial Option Pricing Model. Key assumptions used to estimate the fair value of stock options will include the exercise price of the award, the fair value of our common stock on the date of grant, the expected option term, the risk-free interest rate at the date of grant, the expected volatility and the expected annual dividend yield on our common stock. We use our company’s own data among other information to estimate the expected price volatility and the expected forfeiture rate. Share-based compensation awards issued to non-employees for services rendered are recorded at either the fair value of the services rendered or the fair value of the share-based payment, whichever is more readily determinable. |
Earnings (Loss) Per Share | Earnings ( Loss) per share We calculate basic earnings (loss) per share (“EPS”) by dividing our net income (loss) by the weighted average number of common shares outstanding for the period, without considering common stock equivalents. Diluted EPS is computed by dividing net income or net loss by the weighted average number of common shares outstanding for the period and the weighted average number of dilutive common stock equivalents, such as options and warrants. Options and warrants are only included in the calculation of diluted EPS when their effect is dilutive. |
Fair Value of Financial Instruments | Fair value of financial instruments ASC Topic 820 defines fair value, establishes a framework for measuring fair value, establishes a three-level valuation hierarchy for disclosure of fair value measurement and enhances disclosure requirements for fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The three levels are defined as follows: Level 1 - observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 - include other inputs that are directly or indirectly observable in the marketplace. Level 3 - unobservable inputs which are supported by little or no market activity. The Company used Level 3 inputs for its valuation methodology for the derivative liabilities in determining the fair value using the Binomial option-pricing model for the six months ended December 31, 2020. |
Derivative Instruments | Derivative instruments The fair value of derivative instruments is recorded and shown separately under current liabilities. Changes in the fair value of derivatives liability are recorded in the consolidated statement of operations under non-operating income (expense). Our 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 is then re-valued at each reporting date, with changes in the fair value reported in the consolidated statements of operations. For stock-based derivative financial instruments, the Company uses a weighted average Binomial option-pricing model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. |
Segment Reporting | Segment Reporting FASB ASC Topic 280, “Segment Reporting”, requires use of the “management approach” model for segment reporting. The management approach model is based on the way a company’s management organizes segments within the Company for making operating decisions and assessing performance. Reportable segments are based on products and services, geography, legal structure, management structure, or any other manner in which management disaggregates a company. As of December 31, 2020 substantially all of the Company’s operations were conducted in three industry segments – (1) paper and paper-based products such as paper cups, cup lids, food containers, etc., which accounted for approximately 24% of the Company’s revenues as of December 31, 2020; (2) non-medical supplies such as non-medical fascial masks, which accounted for approximately 3% of the Company’s total revenues as of December 31, 2020; (3) cannabis products delivery service and sales, which accounted for approximately 73% of the Company’s total revenues as of December 31, 2020. |
New Accounting Pronouncements | New accounting pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The new standard establishes an ROU model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company have adopted this ASU on the consolidated financial statements in the quarter ended September 30, 2019. In December 2019, the FASB issued ASU 2019-12, “Simplifying the Accounting for Income Taxes”. The pronouncement simplifies the accounting for income taxes by removing certain exceptions to the general principles in ASC Topic 740, “Income Taxes”. The pronouncement also improves consistent application of and simplifies GAAP for other areas of Topic 740 by clarifying and amending existing guidance. ASU 2019-12 will be effective for us beginning in the first quarter of fiscal 2021, with early adoption permitted. We are still evaluating the impact this guidance will have on our consolidated financial statements. In January 2020, the FASB issued ASU No. 2020-01, Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivative and Hedging (Topic 815), which clarifies the interaction of rules for equity securities, the equity method of accounting, and forward contracts and purchase options on certain types of securities. The guidance clarifies how to account for the transition into and out of the equity method of accounting when considering observable transactions under the measurement alternative. The ASU is effective for annual reporting periods beginning after December 15, 2020, including interim reporting periods within those annual periods, with early adoption permitted. We are currently evaluating the impact of the new guidance on our consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Dec. 31, 2020 | |
Summary Of Significant Accounting Policies | |
Schedule of Estimated Useful Lives of Property and Equipment | Depreciation on property and equipment is provided using the straight-line method over the estimated useful lives of the assets for both financial and income tax reporting purposes as follows: Machinery and equipment 3-5 years Furniture and equipment 7 years Vehicles 5 years Leasehold improvements 5 years |
Other Current Assets (Tables)
Other Current Assets (Tables) | 6 Months Ended |
Dec. 31, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Other Current Assets | As of December 31, 2020 and June 30, 2020, other current assets consisted of the following: For the periods ended December 31, 2020 June 30, 2020 Prepaid Deposit $ 8,483 $ 48,483 Prepaid Inventory 938,422 65,449 Employees Advance 1,786 324 Prepaid Expenses 2,859 35,157 Undeposited Funds 11,711 71,550 Other — 42,441 Total: $ 963,261 $ 263,404 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 6 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property Plant and Equipment | As of December 31, 2020 and June 30, 2020, property, plant and equipment consisted of the following: Fixed Assets December 31, 2020 June 30, 2020 Office and equipment $ 732,062 $ 739,447 Motor vehicles 63,954 164,244 Leasehold Improvement 21,970 24,470 Total 817,986 928,161 Less: accumulated depreciation (457,641 ) (429,116 ) Plant and Equipment, net $ 360,345 $ 499,045 |
Derivative Liabilities (Tables)
Derivative Liabilities (Tables) | 6 Months Ended |
Dec. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Binomial Model Assumptions Inputs | The Binomial model with the following assumption inputs: December 31, 2020 Annual dividend yield — Expected life (years) 0.2-1.00 Risk-free interest rate 0.09-0.16 % Expected volatility 89-187 % June 30, 2020 Annual dividend yield — Expected life (years) 0.5-1.00 Risk-free interest rate 0.16-2.10 % Expected volatility 113-175 % |
Schedule of Fair Value of Derivative | Fair value of the derivative is summarized as below: Beginning Balance, June 30, 2020 $ 5,597,095 Additions 2,326,977 Cancellation of Derivative Liabilities Due to Cash Repayment (228,489 ) Cancellation of Derivative liabilities Due to Share Reservation (214,757 ) Mark to Market (3,763,618 ) Reclassification to APIC due to conversions (2,122,022 ) Ending Balance, December 31, 2020 $ 1,595,186 Beginning Balance, June 30, 2019 $ 2,991,953 Additions 3,538,927 Mark to Market 2,314,089 Reclassification to APIC due to conversions (957,488 ) Ending Balance, December 31, 2019 $ 3,259,345 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Supplemental Disclosures Related to Operating Lease | Six Months Ended December 31, 2020 Lease Cost Operating lease cost (included in general and administration in the Company’s unaudited condensed statement of operations) $ 154,463 Other Information Cash paid for amounts included in the measurement of lease liabilities for the six months ended December 31, 2020 $ 107,438 Remaining lease term – operating leases (in years) 3.25 Average discount rate – operating leases 10 % The supplemental balance sheet information related to leases for the periods are as follows: Operating leases Short-term right-of-use assets $ 231,685 Long-term right-of-use assets $ 610,864 Total operating lease assets $ 842,549 Short-term operating lease liabilities $ 236,528 Long-term operating lease liabilities $ 641,687 Total operating lease liabilities $ 878,214 |
Schedule of Maturities of Lease Liabilities | Maturities of the Company’s lease liabilities are as follows: Operating Period ending June 30, Lease 2021 $ 156,118 2022 305,040 2023 273,425 2024 172,465 2025 147,446 Total lease payments 1,054,494 Less: Imputed interest/present value discount (176,279 ) Present value of lease liabilities $ 878,214 |
Nature of Business (Details Nar
Nature of Business (Details Narrative) | Oct. 02, 2020USD ($) | Feb. 07, 2020 | Dec. 31, 2020Segments | Sep. 30, 2020 |
Number of segments | Segments | 3 | |||
Indigo Dye Group [Member] | ||||
Proceeds the option to acquire additional interest percentage | 30.00% | |||
Percentage of outstanding equity | 33.00% | 29.00% | ||
Indigo Dye Group [Member] | Equity Method Investment, Nonconsolidated Investee or Group of Investees [Member] | ||||
Percentage of VIE | 40.00% | |||
Nonconsolidated affiliate - equity method | $ | $ 505,449 | |||
Percentage of outstanding equity | 40.00% | |||
Sugarmade, Inc. [Member] | Indigo Dye Group Corp. [Member] | ||||
Percentage of VIE | 40.00% | |||
Option to purchase an additional VIE interest | 0.30 | |||
Sugarmade, Inc. [Member] | Bud Cars, Inc. [Member] | ||||
Percentage of VIE | 40.00% | |||
Sugarmade, Inc. [Member] | Nug Avenue, Inc. [Member] | ||||
Ownership percentage by parent | 70.00% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 6 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Jun. 30, 2020 | |
Amortization of intangible assets | $ 700 | $ 700 | |
Operating lease, right-of-use asset | 842,549 | $ 1,105,755 | |
Operating lease, liability | $ 878,214 | $ 1,140,041 | |
Revenue Benchmark [Member] | Paper and Paper-based Products [Member] | |||
Revenue percentage | 24.00% | ||
Revenue Benchmark [Member] | Non-medical Supplies [Member] | |||
Revenue percentage | 3.00% | ||
Revenue Benchmark [Member] | Cannabis Products [Member] | |||
Revenue percentage | 73.00% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Estimated Useful Lives of Property and Equipment (Details) | 6 Months Ended |
Dec. 31, 2020 | |
Machinery and Equipment [Member] | Minimum [Member] | |
Property and equipment, useful life | 3 years |
Machinery and Equipment [Member] | Minimum [Member] | |
Property and equipment, useful life | 5 years |
Furniture and Equipment [Member] | |
Property and equipment, useful life | 7 years |
Vehicles [Member] | |
Property and equipment, useful life | 5 years |
Leasehold Improvements [Member] | |
Property and equipment, useful life | 5 years |
Concentration (Details Narrativ
Concentration (Details Narrative) - USD ($) | 6 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Net revenue | $ 2,446,979 | $ 1,474,784 |
Revenue Benchmark [Member] | Suppliers One [Member] | ||
Revenue percentage | 25.50% | 31.21% |
Revenue Benchmark [Member] | Suppliers Two [Member] | ||
Revenue percentage | 16.20% | 17.80% |
Revenue Benchmark [Member] | Customer One [Member] | ||
Revenue percentage | 13.90% |
VIE (Details Narrative)
VIE (Details Narrative) - USD ($) | Oct. 02, 2020 | Feb. 07, 2020 |
Indigo Dye Group Corp. [Member] | Sugarmade, Inc. [Member] | ||
Terms of arrangements | The Company continues to hold approximately 29% of the ownership of Indigo but ceased to have a controlling interest in the partnership and it was deconsolidated and recorded as an investment in nonconsolidated affiliate at its $505,449 estimated fair value and changed to equity method of accounting. | The value used for this transaction is $1,750,000 and each percentage (1%) of the company is worth $17,500. In the event that the Company is not able to make a payment of $58,333 in any month, it will have 90 days to cure the default. |
Percentage of VIE | 40.00% | |
Option to purchase an additional VIE interest | 0.30 | |
Indigo Dye Group Corp. [Member] | Indigo Agreement [Member] | ||
Investment | $ 70,000 | |
Terms of arrangements | The Investment shall be made in twelve monthly equal installments of $58,333 with the acceleration of the payment schedule possible depending on business growth, cash flow needs and capital availability. | |
Monthly installments amount | $ 58,333 | |
Indigo Dye Group [Member] | ||
Proceeds the option to acquire additional interest percentage | 30.00% | |
Indigo Dye Group [Member] | Sugarmade, Inc. and Subsidiary [Member] | ||
Ownership percentage by noncontrolling interest | 29.00% |
Noncontrolling Interest and D_2
Noncontrolling Interest and Deconsolidation of VIE (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Oct. 02, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | |
Net assets value | $ 3,995,463 | $ 3,995,463 | $ 3,507,062 | ||||
Gain on deconsolidation | $ 313,928 | $ 313,928 | |||||
Indigo Dye Group [Member] | |||||||
Percentage of outstanding equity | 33.00% | 33.00% | 29.00% | ||||
Proceeds the option to acquire additional interest percentage | 30.00% | ||||||
Indigo Dye Group [Member] | Variable Interest Entity, Not Primary Beneficiary [Member] | |||||||
Net assets value | $ 326,812 | ||||||
Indigo Dye Group [Member] | Equity Method Investment, Nonconsolidated Investee or Group of Investees [Member] | |||||||
Percentage of outstanding equity | 40.00% | ||||||
Nonconsolidated affiliate - equity method | $ 505,449 |
Legal Proceedings (Details Narr
Legal Proceedings (Details Narrative) - USD ($) | Feb. 21, 2017 | Dec. 31, 2020 | Jun. 30, 2020 |
Litigation settlement, amount | $ 227,000 | ||
Convertible notes payable | $ 1,651,430 | $ 1,740,122 | |
Third parties [Member] | Two Notes [Member] | |||
Convertible notes payable | 80,000 | $ 80,000 | |
Debt amount | $ 227,000 |
Cash (Details Narrative)
Cash (Details Narrative) | Dec. 31, 2020USD ($) |
Cash and Cash Equivalents [Abstract] | |
Cash, FDIC insured amount | $ 250,000 |
Accounts Receivable (Details Na
Accounts Receivable (Details Narrative) - USD ($) | Dec. 31, 2020 | Jun. 30, 2020 |
Receivables [Abstract] | ||
Accounts receivable, net | $ 11,546 | $ 134,517 |
Loans Receivable (Details Narra
Loans Receivable (Details Narrative) - USD ($) | Dec. 31, 2020 | Jun. 30, 2020 |
Receivables [Abstract] | ||
Loans receivable | $ 1,365 |
Loans Receivable - Related Pa_2
Loans Receivable - Related Parties (Details Narrative) - USD ($) | Dec. 31, 2020 | Jun. 30, 2020 |
Debt Disclosure [Abstract] | ||
Loan receivable related parties | $ 211,276 | $ 318,535 |
Inventory (Details Narrative)
Inventory (Details Narrative) - USD ($) | Dec. 31, 2020 | Jun. 30, 2020 |
Inventory Disclosure [Abstract] | ||
Inventory,net | $ 617,855 | $ 679,471 |
Obsolescence reserve | $ 185,312 | $ 15,445 |
Other Current Assets - Schedule
Other Current Assets - Schedule of Other Current Assets (Details) - USD ($) | Dec. 31, 2020 | Jun. 30, 2020 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid deposit | $ 8,483 | $ 48,483 |
Prepaid inventory | 938,422 | 65,449 |
Employees advance | 1,786 | 324 |
Prepaid expenses | 2,859 | 35,157 |
Undeposited funds | 11,711 | 71,550 |
Other | 42,441 | |
Total: | $ 963,261 | $ 263,404 |
Intangible Asset (Details Narra
Intangible Asset (Details Narrative) - USD ($) | Aug. 21, 2017 | Dec. 31, 2020 | Dec. 31, 2019 |
Amortization expense | $ 700 | $ 700 | |
Intellectual Property [Member] | |||
Payments to develop software | $ 14,000 |
Property and Equipment, net (De
Property and Equipment, net (Details Narrative) - USD ($) | 6 Months Ended | ||
Dec. 31, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation expenses | $ 44,684 | $ 110,032 | $ 46,189 |
Property and Equipment, net - S
Property and Equipment, net - Schedule of Property Plant and Equipment (Details) - USD ($) | Dec. 31, 2020 | Jun. 30, 2020 |
Property plant and equipment gross | $ 817,986 | $ 928,161 |
Less: accumulated depreciation | (457,641) | (429,116) |
Plant and equipment, net | 360,345 | 499,047 |
Office and Equipment [Member] | ||
Property plant and equipment gross | 732,062 | 739,447 |
Motor Vehicles [Member] | ||
Property plant and equipment gross | 63,954 | 164,244 |
Leasehold Improvements [Member] | ||
Property plant and equipment gross | $ 21,970 | $ 24,470 |
Unearned Revenues (Details Narr
Unearned Revenues (Details Narrative) - USD ($) | Dec. 31, 2020 | Jun. 30, 2020 |
Revenue Recognition and Deferred Revenue [Abstract] | ||
Unearned revenue | $ 57,157 | $ 53,248 |
Other Payables (Details Narrati
Other Payables (Details Narrative) | Dec. 31, 2020USD ($)Integer | Jun. 30, 2020USD ($) |
Accounts payable, other, current | $ 950,187 | $ 691,801 |
Number of credit cards | Integer | 8 | |
American Express [Member] | ||
Credit card limit amount | $ 0 | |
Credit Card [Member] | ||
Credit card limit amount | $ 85,000 | |
Credit Card [Member] | Minimum [Member] | ||
Credit cards interest rates percentage | 11.24% | |
Credit Card [Member] | Maximum [Member] | ||
Credit cards interest rates percentage | 29.99% |
Convertible Notes (Details Narr
Convertible Notes (Details Narrative) | Nov. 10, 2020USD ($)Integer | Oct. 13, 2020USD ($)$ / shares | Oct. 08, 2020USD ($)$ / shares | Sep. 24, 2020USD ($)$ / shares | Sep. 10, 2020USD ($) | Sep. 08, 2020USD ($)$ / shares | Jul. 21, 2020USD ($) | Jul. 16, 2020USD ($) | Jul. 07, 2020USD ($) | Jul. 06, 2020USD ($) | Jun. 18, 2020USD ($) | Jun. 10, 2020USD ($)Integer | Apr. 24, 2020USD ($)Integer | Mar. 05, 2020USD ($)Integer | Feb. 18, 2020USD ($)$ / shares | Feb. 04, 2020USD ($)$ / shares | Jan. 22, 2020USD ($)Integer | Jan. 14, 2020USD ($)Integer | Jan. 03, 2020USD ($)Integer | Dec. 27, 2019USD ($)Integer | Dec. 10, 2019USD ($)Integer | Nov. 29, 2019USD ($)Integer | Nov. 01, 2019USD ($)$ / shares | Oct. 31, 2019USD ($)$ / shares | Oct. 28, 2019USD ($)Integer | Sep. 27, 2019USD ($) | Dec. 03, 2018USD ($)$ / shares | Nov. 16, 2018USD ($)$ / shares | Nov. 01, 2018USD ($)$ / shares | Dec. 21, 2012USD ($) | Sep. 18, 2012USD ($) | Aug. 24, 2012USD ($) | Sep. 30, 2020USD ($)shares | Jun. 30, 2020USD ($)Integershares | Dec. 31, 2020USD ($) |
Convertible notes payable, net, current | $ 1,740,122 | $ 1,651,430 | |||||||||||||||||||||||||||||||||
Debt instrument debt discount | $ 880,879 | $ 1,045,671 | |||||||||||||||||||||||||||||||||
Convertible Note One [Member] | Accredited Investor [Member] | |||||||||||||||||||||||||||||||||||
Debt instrument face amount | $ 25,000 | ||||||||||||||||||||||||||||||||||
Debt instrument term | 6 months | ||||||||||||||||||||||||||||||||||
Debt instrument interest rate | 10.00% | ||||||||||||||||||||||||||||||||||
Debt instrument conversion percentage | 25.00% | ||||||||||||||||||||||||||||||||||
Convertible Note Two [Member] | Accredited Investor [Member] | |||||||||||||||||||||||||||||||||||
Debt instrument face amount | $ 25,000 | ||||||||||||||||||||||||||||||||||
Debt instrument term | 6 months | ||||||||||||||||||||||||||||||||||
Debt instrument interest rate | 10.00% | ||||||||||||||||||||||||||||||||||
Debt instrument conversion percentage | 25.00% | ||||||||||||||||||||||||||||||||||
Convertible Note Three [Member] | Accredited Investor [Member] | |||||||||||||||||||||||||||||||||||
Debt instrument face amount | $ 100,000 | ||||||||||||||||||||||||||||||||||
Debt instrument term | 6 months | ||||||||||||||||||||||||||||||||||
Debt instrument interest rate | 10.00% | ||||||||||||||||||||||||||||||||||
Debt instrument conversion percentage | 25.00% | ||||||||||||||||||||||||||||||||||
Convertible Note Four [Member] | Accredited Investor [Member] | |||||||||||||||||||||||||||||||||||
Debt instrument face amount | $ 100,000 | ||||||||||||||||||||||||||||||||||
Debt instrument term | 1 year | ||||||||||||||||||||||||||||||||||
Debt instrument interest rate | 8.00% | ||||||||||||||||||||||||||||||||||
Debt instrument conversion price | $ / shares | $ 0.07 | ||||||||||||||||||||||||||||||||||
Convertible Note Five [Member] | Accredited Investor [Member] | |||||||||||||||||||||||||||||||||||
Debt instrument face amount | $ 80,000 | ||||||||||||||||||||||||||||||||||
Debt instrument term | 1 year | ||||||||||||||||||||||||||||||||||
Debt instrument interest rate | 8.00% | ||||||||||||||||||||||||||||||||||
Debt instrument conversion price | $ / shares | $ 0.07 | ||||||||||||||||||||||||||||||||||
Convertible Note Six [Member] | Accredited Investor [Member] | |||||||||||||||||||||||||||||||||||
Debt instrument face amount | $ 40,000 | ||||||||||||||||||||||||||||||||||
Debt instrument term | 1 year | ||||||||||||||||||||||||||||||||||
Debt instrument interest rate | 8.00% | ||||||||||||||||||||||||||||||||||
Debt instrument conversion price | $ / shares | $ 0.07 | ||||||||||||||||||||||||||||||||||
Convertible Note Seven [Member] | Accredited Investor [Member] | |||||||||||||||||||||||||||||||||||
Debt instrument face amount | $ 35,000 | ||||||||||||||||||||||||||||||||||
Debt instrument term | 1 year | ||||||||||||||||||||||||||||||||||
Debt instrument interest rate | 8.00% | ||||||||||||||||||||||||||||||||||
Debt instrument conversion price | $ / shares | $ 0.07 | ||||||||||||||||||||||||||||||||||
Convertible Note Eight [Member] | Accredited Investor [Member] | |||||||||||||||||||||||||||||||||||
Debt instrument face amount | $ 165,000 | ||||||||||||||||||||||||||||||||||
Debt instrument term | 360 days | ||||||||||||||||||||||||||||||||||
Debt instrument interest rate | 8.00% | ||||||||||||||||||||||||||||||||||
Debt instrument conversion percentage | 55.00% | ||||||||||||||||||||||||||||||||||
Debt instrument original issue discount | $ 16,250 | ||||||||||||||||||||||||||||||||||
Debt instrument trading days | Integer | 20 | ||||||||||||||||||||||||||||||||||
Debt instrument conversion amount | $ 50,000 | ||||||||||||||||||||||||||||||||||
Debt instrument interest expenses | $ 2,992 | ||||||||||||||||||||||||||||||||||
Debt instrument conversion shares issued | shares | 56,007,062 | ||||||||||||||||||||||||||||||||||
Convertible Note Nine [Member] | Accredited Investor [Member] | |||||||||||||||||||||||||||||||||||
Debt instrument face amount | $ 225,500 | ||||||||||||||||||||||||||||||||||
Debt instrument term | 360 days | ||||||||||||||||||||||||||||||||||
Debt instrument interest rate | 8.00% | ||||||||||||||||||||||||||||||||||
Debt instrument conversion percentage | 60.00% | ||||||||||||||||||||||||||||||||||
Debt instrument original issue discount | $ 23,000 | ||||||||||||||||||||||||||||||||||
Debt instrument trading days | Integer | 20 | ||||||||||||||||||||||||||||||||||
Convertible Note Ten [Member] | Accredited Investor [Member] | |||||||||||||||||||||||||||||||||||
Debt instrument face amount | $ 225,500 | ||||||||||||||||||||||||||||||||||
Debt instrument term | 360 days | ||||||||||||||||||||||||||||||||||
Debt instrument interest rate | 8.00% | ||||||||||||||||||||||||||||||||||
Debt instrument conversion percentage | 60.00% | ||||||||||||||||||||||||||||||||||
Debt instrument original issue discount | $ 23,000 | ||||||||||||||||||||||||||||||||||
Debt instrument trading days | Integer | 20 | ||||||||||||||||||||||||||||||||||
Convertible Note Eleven [Member] | Accredited Investor [Member] | |||||||||||||||||||||||||||||||||||
Debt instrument face amount | $ 106,150 | ||||||||||||||||||||||||||||||||||
Debt instrument term | 360 days | ||||||||||||||||||||||||||||||||||
Debt instrument interest rate | 8.00% | ||||||||||||||||||||||||||||||||||
Debt instrument conversion percentage | 60.00% | ||||||||||||||||||||||||||||||||||
Debt instrument original issue discount | $ 11,150 | ||||||||||||||||||||||||||||||||||
Debt instrument trading days | Integer | 20 | ||||||||||||||||||||||||||||||||||
Convertible Note Twelve [Member] | Accredited Investor [Member] | |||||||||||||||||||||||||||||||||||
Debt instrument face amount | $ 106,150 | ||||||||||||||||||||||||||||||||||
Debt instrument term | 360 days | ||||||||||||||||||||||||||||||||||
Debt instrument interest rate | 8.00% | ||||||||||||||||||||||||||||||||||
Debt instrument conversion percentage | 60.00% | ||||||||||||||||||||||||||||||||||
Debt instrument original issue discount | $ 11,150 | ||||||||||||||||||||||||||||||||||
Debt instrument trading days | Integer | 20 | ||||||||||||||||||||||||||||||||||
Convertible Note Thirteen [Member] | Accredited Investor [Member] | |||||||||||||||||||||||||||||||||||
Debt instrument face amount | $ 106,700 | ||||||||||||||||||||||||||||||||||
Debt instrument term | 360 days | ||||||||||||||||||||||||||||||||||
Debt instrument interest rate | 8.00% | ||||||||||||||||||||||||||||||||||
Debt instrument conversion percentage | 60.00% | ||||||||||||||||||||||||||||||||||
Debt instrument original issue discount | $ 11,700 | ||||||||||||||||||||||||||||||||||
Debt instrument trading days | Integer | 20 | ||||||||||||||||||||||||||||||||||
Convertible Note Fourteen [Member] | Accredited Investor [Member] | |||||||||||||||||||||||||||||||||||
Debt instrument face amount | $ 106,700 | ||||||||||||||||||||||||||||||||||
Debt instrument term | 360 days | ||||||||||||||||||||||||||||||||||
Debt instrument interest rate | 8.00% | ||||||||||||||||||||||||||||||||||
Debt instrument conversion percentage | 60.00% | ||||||||||||||||||||||||||||||||||
Debt instrument original issue discount | $ 11,700 | ||||||||||||||||||||||||||||||||||
Debt instrument trading days | Integer | 20 | ||||||||||||||||||||||||||||||||||
Convertible Note Fifteen [Member] | Accredited Investor [Member] | |||||||||||||||||||||||||||||||||||
Debt instrument face amount | $ 112,200 | ||||||||||||||||||||||||||||||||||
Debt instrument term | 360 days | ||||||||||||||||||||||||||||||||||
Debt instrument interest rate | 8.00% | ||||||||||||||||||||||||||||||||||
Debt instrument conversion percentage | 60.00% | ||||||||||||||||||||||||||||||||||
Debt instrument original issue discount | $ 12,200 | ||||||||||||||||||||||||||||||||||
Debt instrument trading days | Integer | 20 | ||||||||||||||||||||||||||||||||||
Convertible Note Sixteen [Member] | Accredited Investor [Member] | |||||||||||||||||||||||||||||||||||
Debt instrument face amount | $ 139,301 | ||||||||||||||||||||||||||||||||||
Debt instrument term | 360 days | ||||||||||||||||||||||||||||||||||
Debt instrument interest rate | 8.00% | ||||||||||||||||||||||||||||||||||
Debt instrument conversion price | $ / shares | $ 0.008 | ||||||||||||||||||||||||||||||||||
Convertible Note Seventeen [Member] | Accredited Investor [Member] | |||||||||||||||||||||||||||||||||||
Debt instrument face amount | $ 100,000 | ||||||||||||||||||||||||||||||||||
Debt instrument term | 360 days | ||||||||||||||||||||||||||||||||||
Debt instrument interest rate | 8.00% | ||||||||||||||||||||||||||||||||||
Debt instrument conversion price | $ / shares | $ 0.008 | ||||||||||||||||||||||||||||||||||
Convertible Note Eighteen [Member] | Accredited Investor [Member] | |||||||||||||||||||||||||||||||||||
Debt instrument face amount | $ 112,200 | ||||||||||||||||||||||||||||||||||
Debt instrument term | 360 days | ||||||||||||||||||||||||||||||||||
Debt instrument interest rate | 8.00% | ||||||||||||||||||||||||||||||||||
Debt instrument conversion percentage | 60.00% | ||||||||||||||||||||||||||||||||||
Debt instrument original issue discount | $ 12,200 | ||||||||||||||||||||||||||||||||||
Debt instrument trading days | Integer | 20 | ||||||||||||||||||||||||||||||||||
Convertible Note Nineteen [Member] | Accredited Investor [Member] | |||||||||||||||||||||||||||||||||||
Debt instrument face amount | $ 150,000 | ||||||||||||||||||||||||||||||||||
Debt instrument term | 360 days | ||||||||||||||||||||||||||||||||||
Debt instrument interest rate | 8.00% | ||||||||||||||||||||||||||||||||||
Debt instrument conversion percentage | 38.00% | ||||||||||||||||||||||||||||||||||
Debt instrument original issue discount | $ 3,000 | ||||||||||||||||||||||||||||||||||
Debt instrument trading days | Integer | 10 | ||||||||||||||||||||||||||||||||||
Debt instrument conversion amount | $ 50,000 | ||||||||||||||||||||||||||||||||||
Debt instrument conversion shares issued | shares | 29,868,578 | ||||||||||||||||||||||||||||||||||
Convertible Note Twenty [Member] | Accredited Investor [Member] | |||||||||||||||||||||||||||||||||||
Debt instrument face amount | $ 128,000 | ||||||||||||||||||||||||||||||||||
Debt instrument term | 360 days | ||||||||||||||||||||||||||||||||||
Debt instrument interest rate | 10.00% | ||||||||||||||||||||||||||||||||||
Debt instrument conversion percentage | 35.00% | ||||||||||||||||||||||||||||||||||
Debt instrument original issue discount | $ 3,000 | ||||||||||||||||||||||||||||||||||
Debt instrument trading days | Integer | 20 | ||||||||||||||||||||||||||||||||||
Convertible Note Twenty One [Member] | Accredited Investor [Member] | |||||||||||||||||||||||||||||||||||
Debt instrument face amount | $ 110,000 | ||||||||||||||||||||||||||||||||||
Debt instrument term | 360 days | ||||||||||||||||||||||||||||||||||
Debt instrument interest rate | 12.00% | ||||||||||||||||||||||||||||||||||
Debt instrument conversion price | $ / shares | $ 0.001 | ||||||||||||||||||||||||||||||||||
Debt instrument original issue discount | $ 10,000 | ||||||||||||||||||||||||||||||||||
Convertible Note Twenty Two [Member] | Accredited Investor [Member] | |||||||||||||||||||||||||||||||||||
Debt instrument face amount | $ 100,000 | ||||||||||||||||||||||||||||||||||
Debt instrument term | 360 days | ||||||||||||||||||||||||||||||||||
Debt instrument interest rate | 12.00% | ||||||||||||||||||||||||||||||||||
Debt instrument conversion price | $ / shares | $ 0.001 | ||||||||||||||||||||||||||||||||||
Debt instrument original issue discount | $ 10,000 | ||||||||||||||||||||||||||||||||||
Convertible Note Twenty Three [Member] | Accredited Investor [Member] | |||||||||||||||||||||||||||||||||||
Debt instrument face amount | $ 125,000 | ||||||||||||||||||||||||||||||||||
Debt instrument term | 360 days | ||||||||||||||||||||||||||||||||||
Debt instrument interest rate | 8.00% | ||||||||||||||||||||||||||||||||||
Debt instrument conversion percentage | 38.00% | ||||||||||||||||||||||||||||||||||
Debt instrument original issue discount | $ 3,000 | ||||||||||||||||||||||||||||||||||
Debt instrument trading days | Integer | 10 | ||||||||||||||||||||||||||||||||||
Convertible Note Twenty Four [Member] | Accredited Investor [Member] | |||||||||||||||||||||||||||||||||||
Debt instrument face amount | $ 75,000 | ||||||||||||||||||||||||||||||||||
Debt instrument term | 360 days | ||||||||||||||||||||||||||||||||||
Debt instrument interest rate | 8.00% | ||||||||||||||||||||||||||||||||||
Debt instrument conversion percentage | 38.00% | ||||||||||||||||||||||||||||||||||
Debt instrument original issue discount | $ 2,000 | ||||||||||||||||||||||||||||||||||
Debt instrument trading days | Integer | 10 | ||||||||||||||||||||||||||||||||||
Convertible Note Twenty Five [Member] | Accredited Investor [Member] | |||||||||||||||||||||||||||||||||||
Debt instrument face amount | $ 36,300 | ||||||||||||||||||||||||||||||||||
Debt instrument term | 360 days | ||||||||||||||||||||||||||||||||||
Debt instrument interest rate | 8.00% | ||||||||||||||||||||||||||||||||||
Debt instrument conversion percentage | 60.00% | ||||||||||||||||||||||||||||||||||
Debt instrument original issue discount | $ 3,300 | ||||||||||||||||||||||||||||||||||
Debt instrument trading days | Integer | 20 | ||||||||||||||||||||||||||||||||||
Legal expense | $ 3,000 | ||||||||||||||||||||||||||||||||||
Convertible Note Twenty Six [Member] | Accredited Investor [Member] | |||||||||||||||||||||||||||||||||||
Debt instrument face amount | $ 36,300 | ||||||||||||||||||||||||||||||||||
Debt instrument term | 360 days | ||||||||||||||||||||||||||||||||||
Debt instrument interest rate | 8.00% | ||||||||||||||||||||||||||||||||||
Debt instrument conversion percentage | 60.00% | ||||||||||||||||||||||||||||||||||
Debt instrument original issue discount | $ 3,300 | ||||||||||||||||||||||||||||||||||
Debt instrument trading days | 20 | ||||||||||||||||||||||||||||||||||
Legal expense | $ 3,000 | ||||||||||||||||||||||||||||||||||
Convertible Note Twenty Seven [Member] | Accredited Investor [Member] | |||||||||||||||||||||||||||||||||||
Debt instrument face amount | $ 77,000 | ||||||||||||||||||||||||||||||||||
Debt instrument term | 360 days | ||||||||||||||||||||||||||||||||||
Debt instrument interest rate | 8.00% | ||||||||||||||||||||||||||||||||||
Debt instrument conversion percentage | 38.00% | ||||||||||||||||||||||||||||||||||
Debt instrument original issue discount | $ 2,000 | ||||||||||||||||||||||||||||||||||
Debt instrument trading days | 10 | ||||||||||||||||||||||||||||||||||
Convertible Note Twenty Eight [Member] | Accredited Investor [Member] | |||||||||||||||||||||||||||||||||||
Debt instrument face amount | $ 153,000 | ||||||||||||||||||||||||||||||||||
Debt instrument term | 360 days | ||||||||||||||||||||||||||||||||||
Debt instrument interest rate | 10.00% | ||||||||||||||||||||||||||||||||||
Debt instrument conversion percentage | 35.00% | ||||||||||||||||||||||||||||||||||
Debt instrument original issue discount | $ 3,000 | ||||||||||||||||||||||||||||||||||
Debt instrument trading days | 20 | ||||||||||||||||||||||||||||||||||
Convertible Note Twenty Nine [Member] | Accredited Investor [Member] | |||||||||||||||||||||||||||||||||||
Debt instrument face amount | $ 260,700 | ||||||||||||||||||||||||||||||||||
Debt instrument term | 360 days | ||||||||||||||||||||||||||||||||||
Debt instrument interest rate | 8.00% | ||||||||||||||||||||||||||||||||||
Debt instrument conversion percentage | 60.00% | ||||||||||||||||||||||||||||||||||
Debt instrument original issue discount | $ 23,700 | ||||||||||||||||||||||||||||||||||
Debt instrument trading days | 20 | ||||||||||||||||||||||||||||||||||
Legal expense | $ 12,000 | ||||||||||||||||||||||||||||||||||
Convertible Note Thirty [Member] | Accredited Investor [Member] | |||||||||||||||||||||||||||||||||||
Debt instrument face amount | $ 200,200 | ||||||||||||||||||||||||||||||||||
Debt instrument term | 360 days | ||||||||||||||||||||||||||||||||||
Debt instrument interest rate | 8.00% | ||||||||||||||||||||||||||||||||||
Debt instrument conversion percentage | 60.00% | ||||||||||||||||||||||||||||||||||
Debt instrument original issue discount | $ 18,200 | ||||||||||||||||||||||||||||||||||
Debt instrument trading days | 20 | ||||||||||||||||||||||||||||||||||
Legal expense | $ 7,000 | ||||||||||||||||||||||||||||||||||
Convertible Note Thirty One [Member] | Accredited Investor [Member] | |||||||||||||||||||||||||||||||||||
Debt instrument face amount | $ 110,000 | ||||||||||||||||||||||||||||||||||
Debt instrument term | 180 days | ||||||||||||||||||||||||||||||||||
Debt instrument interest rate | 12.00% | ||||||||||||||||||||||||||||||||||
Debt instrument conversion percentage | 65.00% | ||||||||||||||||||||||||||||||||||
Debt instrument conversion price | $ / shares | $ 0.01 | ||||||||||||||||||||||||||||||||||
Debt instrument original issue discount | $ 10,000 | ||||||||||||||||||||||||||||||||||
Debt instrument trading days | 20 | ||||||||||||||||||||||||||||||||||
Debt instrument conversion description | After the six months anniversary of this note, the conversion price shall be equal to the lower of the fixed price of $0.01 or 65% of the lowest trading price of the common stock for the 20 prior trading days including the day upon which a conversion notice is received by the Company or its transfer agent. | ||||||||||||||||||||||||||||||||||
Convertible Note Thirty Two [Member] | Accredited Investor [Member] | |||||||||||||||||||||||||||||||||||
Debt instrument face amount | $ 227,700 | ||||||||||||||||||||||||||||||||||
Debt instrument term | 360 days | ||||||||||||||||||||||||||||||||||
Debt instrument interest rate | 8.00% | ||||||||||||||||||||||||||||||||||
Debt instrument conversion percentage | 60.00% | ||||||||||||||||||||||||||||||||||
Debt instrument original issue discount | $ 20,700 | ||||||||||||||||||||||||||||||||||
Debt instrument trading days | 20 | ||||||||||||||||||||||||||||||||||
Legal expense | $ 7,000 | ||||||||||||||||||||||||||||||||||
Convertible Note Thirty Three [Member] | Accredited Investor [Member] | |||||||||||||||||||||||||||||||||||
Debt instrument face amount | $ 212,300 | ||||||||||||||||||||||||||||||||||
Debt instrument term | 180 days | ||||||||||||||||||||||||||||||||||
Debt instrument interest rate | 12.00% | ||||||||||||||||||||||||||||||||||
Debt instrument conversion percentage | 65.00% | ||||||||||||||||||||||||||||||||||
Debt instrument conversion price | $ / shares | $ 0.01 | ||||||||||||||||||||||||||||||||||
Debt instrument original issue discount | $ 19,300 | ||||||||||||||||||||||||||||||||||
Debt instrument trading days | 20 | ||||||||||||||||||||||||||||||||||
Debt instrument conversion description | After the six months anniversary of this note, the conversion price shall be equal to the lower of the fixed price of $0.01 or 65% of the lowest trading price of the common stock for the 20 prior trading days including the day upon which a conversion notice is received by the Company or its transfer agent. | ||||||||||||||||||||||||||||||||||
Convertible Note Thirty Four [Member] | Accredited Investor [Member] | |||||||||||||||||||||||||||||||||||
Debt instrument face amount | $ 231,000 | ||||||||||||||||||||||||||||||||||
Debt instrument term | 180 days | ||||||||||||||||||||||||||||||||||
Debt instrument interest rate | 12.00% | ||||||||||||||||||||||||||||||||||
Debt instrument conversion percentage | 65.00% | ||||||||||||||||||||||||||||||||||
Debt instrument conversion price | $ / shares | $ 0.01 | ||||||||||||||||||||||||||||||||||
Debt instrument original issue discount | $ 21,000 | ||||||||||||||||||||||||||||||||||
Debt instrument trading days | 20 | ||||||||||||||||||||||||||||||||||
Debt instrument conversion description | After the six months anniversary of this note, the conversion price shall be equal to the lower of the fixed price of $0.01 or 65% of the lowest trading price of the common stock for the 20 prior trading days including the day upon which a conversion notice is received by the Company or its transfer agent | ||||||||||||||||||||||||||||||||||
Convertible Note Thirty Five [Member] | Accredited Investor [Member] | |||||||||||||||||||||||||||||||||||
Debt instrument face amount | $ 275,000 | ||||||||||||||||||||||||||||||||||
Debt instrument term | 180 days | ||||||||||||||||||||||||||||||||||
Debt instrument interest rate | 12.00% | ||||||||||||||||||||||||||||||||||
Debt instrument conversion percentage | 65.00% | ||||||||||||||||||||||||||||||||||
Debt instrument conversion price | $ / shares | $ 0.01 | ||||||||||||||||||||||||||||||||||
Debt instrument original issue discount | $ 25,000 | ||||||||||||||||||||||||||||||||||
Debt instrument trading days | 20 | ||||||||||||||||||||||||||||||||||
Debt instrument conversion description | After the six months anniversary of this note, the conversion price shall be equal to the lower of the fixed price of $0.01 or 65% of the lowest trading price of the common stock for the 20 prior trading days including the day upon which a conversion notice is received by the Company or its transfer agent. | ||||||||||||||||||||||||||||||||||
Convertible Note Thirty Six [Member] | Accredited Investor [Member] | |||||||||||||||||||||||||||||||||||
Debt instrument face amount | $ 58,300 | ||||||||||||||||||||||||||||||||||
Debt instrument term | 360 days | ||||||||||||||||||||||||||||||||||
Debt instrument interest rate | 8.00% | ||||||||||||||||||||||||||||||||||
Debt instrument conversion percentage | 60.00% | ||||||||||||||||||||||||||||||||||
Debt instrument original issue discount | $ 5,300 | ||||||||||||||||||||||||||||||||||
Debt instrument trading days | Integer | 20 |
Derivative Liabilities (Details
Derivative Liabilities (Details Narrative) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||
Derivative liability | $ 1,595,186 | $ 5,597,095 | $ 3,529,345 | $ 2,991,953 |
Loss from changes in derivative liability | $ 3,992,108 | $ 1,442,295 |
Derivative Liabilities - Schedu
Derivative Liabilities - Schedule of Binomial Model Assumptions Inputs (Details) | Dec. 31, 2020 | Jun. 30, 2020 |
Annual Dividend Yield [Member] | ||
Fair value measurement input | ||
Expected Life (years) [Member] | Minimum [Member] | ||
Fair value measurement input | 0.2 | 0.5 |
Expected Life (years) [Member] | Maximum [Member] | ||
Fair value measurement input | 1 | 1 |
Risk Free Interest Rate [Member] | Minimum [Member] | ||
Fair value measurement input | 0.09 | 0.16 |
Risk Free Interest Rate [Member] | Maximum [Member] | ||
Fair value measurement input | 0.16 | 2.10 |
Expected Volatility [Member] | Minimum [Member] | ||
Fair value measurement input | 89 | 113 |
Expected Volatility [Member] | Maximum [Member] | ||
Fair value measurement input | 187 | 175 |
Derivative Liabilities - Sche_2
Derivative Liabilities - Schedule of Fair Value of Derivative (Details) - USD ($) | 6 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Beginning Balance | $ 5,597,095 | $ 2,991,953 |
Additions | 2,326,977 | 3,538,927 |
Cancellation of Derivative Liabilities Due to Cash Repayment | (228,489) | |
Cancellation of Derivative liabilities Due to Share Reservation | (214,757) | |
Mark to Market | 3,992,108 | (273,299) |
Reclassification to APIC due to conversions | (2,122,022) | (957,488) |
Ending Balance | $ 1,595,186 | $ 3,529,345 |
Stock Warrants (Details Narrati
Stock Warrants (Details Narrative) - USD ($) | Dec. 31, 2020 | Jun. 30, 2020 | Feb. 04, 2020 | Sep. 07, 2018 |
Fair value of warrant liability | $ 9,521 | $ 79,910 | ||
Settlement Agreement [Member] | Investors [Member] | ||||
Life of warrants | 5 years | |||
Fair value of warrants | $ 56,730 | |||
Fair value of warrant liability | 521 | 1,910 | ||
Warrant Agreement [Member] | Accredited Investor [Member] | ||||
Life of warrants | 5 years | |||
Fair value of warrants | $ 80,000 | |||
Fair value of warrant liability | $ 9,000 | $ 78,000 | ||
Number of common stock called by warrants | 10,000,000 | |||
Warrants exercise price | $ 0.008 |
Note Payable (Details Narrative
Note Payable (Details Narrative) - USD ($) | 1 Months Ended | |||||
Oct. 31, 2011 | Dec. 31, 2020 | Jun. 30, 2020 | Dec. 20, 2018 | Jun. 15, 2018 | Jan. 23, 2013 | |
Promissory Note [Member] | Former Employee [Member] | ||||||
Original principal amount | $ 40,000 | |||||
Interest rate per annum | ||||||
Percentage of stock owned | 5.00% | |||||
Notes payable related parties current | $ 15,427 | $ 15,427 | ||||
Promissory Note [Member] | Accredited Investor [Member] | ||||||
Original principal amount | $ 20,000 | |||||
Interest rate per annum | 8.00% | |||||
Outstanding balance | 20,000 | 20,000 | ||||
Revolving Demand Note [Member] | HSBC [Member] | USA [Member] | ||||||
Line of credit maximum borrowing capacity | $ 150,000 | |||||
Debt instrument basis spread on variable rate | 0.25% | |||||
Interest rate | 5.50% | |||||
Line of credit covenant terms | In the event the deposit account is not established or minimum balance maintained, HSBC can charge a higher rate of interest of up to 4.0% above prime rate. | |||||
Line of credit | $ 25,982 | $ 25,982 |
Loan Payable (Details Narrative
Loan Payable (Details Narrative) - USD ($) | Jul. 02, 2012 | Dec. 31, 2020 | Jul. 28, 2020 | Jun. 30, 2020 | Jun. 26, 2020 | Apr. 27, 2020 | Mar. 18, 2020 | Jun. 30, 2019 | Oct. 01, 2017 | Jan. 06, 2015 | Jan. 23, 2013 |
Outstanding loan balance | $ 720,489 | $ 517,260 | |||||||||
Repayment Agreement [Member] | Former Employee [Member] | |||||||||||
Original principal amount | $ 9,500 | ||||||||||
Interest rate per annum | |||||||||||
Outstanding balance | 4,423 | 3,584 | |||||||||
Equipment Loan Agreement [Member] | CarryOutSupplies [Member] | |||||||||||
Maturity date | Jun. 21, 2024 | ||||||||||
Outstanding balance | 20,665 | 24,524 | |||||||||
Monthly payment | $ 648 | ||||||||||
Government Loan Agreement [Member] | |||||||||||
Original principal amount | $ 8,000 | ||||||||||
Outstanding balance | 8,000 | 8,000 | |||||||||
Celtic Bank [Member] | Loan Agreement [Member] | |||||||||||
Original principal amount | $ 150,000 | ||||||||||
Outstanding balance | $ 1,815 | 117,635 | |||||||||
Promissory Note [Member] | Former Employee [Member] | |||||||||||
Original principal amount | $ 40,000 | ||||||||||
Interest rate per annum | |||||||||||
Promissory Note [Member] | Greater Asia Technology Limited [Member] | |||||||||||
Original principal amount | $ 100,000 | ||||||||||
Interest rate per annum | 33.33% | ||||||||||
Maturity date | Jun. 30, 2018 | ||||||||||
Outstanding balance | $ 73,844 | 96,401 | |||||||||
Short Term Loans [Member] | Greater Asia Technology Limited [Member] | |||||||||||
Original principal amount | $ 375,000 | ||||||||||
Outstanding balance | $ 100,000 | $ 100,000 | |||||||||
Short Term Loans [Member] | Greater Asia Technology Limited [Member] | Minimum [Member] | |||||||||||
Interest rate per annum | 40.00% | ||||||||||
Short Term Loans [Member] | Greater Asia Technology Limited [Member] | Maximum [Member] | |||||||||||
Interest rate per annum | 50.00% | ||||||||||
PPP Note [Member] | Bank of America [Member] | CARES Act [Member] | |||||||||||
Original principal amount | $ 159,900 | $ 110,000 | |||||||||
Interest rate per annum | 1.00% | 1.00% |
Loan Payable - Related Parties
Loan Payable - Related Parties (Details Narrative) - USD ($) | Dec. 31, 2020 | Jun. 30, 2020 | Jul. 07, 2016 |
Loan payable - Related Parties, Current | $ 576,225 | $ 35,943 | |
Employee [Member] | |||
Interest rate per annum | |||
Outstanding balance | 48,143 | 35,943 | |
Related Parties [Member] | |||
Outstanding balance | $ 528,082 | $ 0 |
Shares to be Issued (Details Na
Shares to be Issued (Details Narrative) - USD ($) | Dec. 31, 2020 | Jun. 30, 2020 |
Stock to be issued | $ 167,577 | $ 101,577 |
Consulting Service Agreement and Employment Agreement [Member] | ||
Stock to be issued | $ 101,577 | |
Employment Agreement [Member] | ||
Stock to be issued | 35,000 | |
Consulting Service Agreement [Member] | ||
Stock to be issued | $ 31,000 |
Stockholder's Equity (Details N
Stockholder's Equity (Details Narrative) - USD ($) | 3 Months Ended | 4 Months Ended | 6 Months Ended | |||||
Dec. 31, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Mar. 31, 2015 | Dec. 31, 2020 | Jun. 30, 2020 | Apr. 22, 2020 | |
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||||
Common stock, shares authorized | 10,000,000,000 | 10,000,000,000 | 10,000,000,000 | 10,010,000,000 | ||||
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | 10,000,000 | 10,000,000 | ||||
Value of shares issued for debt conversion | $ 320,879 | $ 1,273,459 | $ 142,164 | $ 547,833 | ||||
Number of shares issued for debt conversion | 411,171,815 | 1,081,411,606 | ||||||
Preferred stock, shares issued | 1,541,500 | 1,541,500 | 3,541,500 | |||||
Preferred stock, shares outstanding | 1,541,500 | 1,541,500 | 3,541,500 | |||||
Common stock, shares issued | 3,616,507,670 | 3,616,507,670 | 1,763,277,230 | |||||
Common stock, shares outstanding | 3,616,507,670 | 3,616,507,670 | 1,763,277,230 | |||||
Number of common stock issued upon conversion | 360,647,019 | 360,647,019 | ||||||
Value of common stock issued upon conversion | $ 2,000,000 | $ 2,000,000 | ||||||
Investors [Member] | ||||||||
Return on investment | 5.00% | |||||||
Fixed buyback amount | $ 500,000 | $ 500,000 | ||||||
Series A Preferred Shares [Member] | Investors [Member] | ||||||||
Shares issued | 2,000,000 | |||||||
Conversion ratio | 526 |
Commitments and Contingencies_2
Commitments and Contingencies (Details Narrative) | Feb. 23, 2018USD ($)ft² | Dec. 31, 2020USD ($) |
Lease commitment | $ 1,054,494 | |
Lease Agreement [Member] | Office [Member] | ||
Lease term | 5 years | |
Monthly rent | $ 11,770 | |
Yearly increase in rent percentage | 3.00% | |
Lease commitment | $ 737,367 | |
Lease Agreement [Member] | Warehouse [Member] | ||
Lease term | 5 years 2 months | |
Monthly rent | $ 13,022 | |
Area under lease | ft² | 11,627 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Supplemental Disclosures Related to Operating Lease (Details) - USD ($) | 6 Months Ended | |
Dec. 31, 2020 | Jun. 30, 2020 | |
Cash paid for amounts included in the measurement of lease liabilities | $ 107,438 | |
Remaining lease term - operating leases (in years) | 3 years 2 months 30 days | |
Average discount rate - operating leases | 10.00% | |
Short-term right-of-use assets | $ 231,685 | $ 270,363 |
Long-term right-of-use assets | 610,864 | 835,393 |
Total operating lease assets | 842,549 | |
Short-term operating lease liabilities | 236,527 | 372,285 |
Long-term operating lease liabilities | 641,687 | 767,729 |
Total operating lease liabilities | 878,214 | $ 1,140,041 |
General and Administrative [Member] | ||
Operating lease cost | $ 154,463 |
Commitments and Contingencies_3
Commitments and Contingencies - Schedule of Maturities of Lease Liabilities (Details) - USD ($) | Dec. 31, 2020 | Jun. 30, 2020 |
Commitments and Contingencies Disclosure [Abstract] | ||
2021 | $ 156,118 | |
2022 | 305,040 | |
2023 | 273,425 | |
2024 | 172,465 | |
2025 | 147,446 | |
Total lease payments | 1,054,494 | |
Less: Imputed interest/present value discount | (176,279) | |
Present value of lease liabilities | $ 878,214 | $ 1,140,041 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) | Feb. 16, 2021USD ($)shares | Feb. 09, 2021USD ($)Integershares | Feb. 08, 2021USD ($) | Dec. 31, 2019USD ($)shares | Sep. 30, 2019USD ($)shares |
Share issued for cash | $ 340,000 | $ 100,000 | |||
Common Stock [Member] | |||||
Share issued for cash | $ 26,622 | $ 11,349 | |||
Share issued for cash, shares | shares | 26,621,610 | 11,348,591 | |||
Subsequent Event [Member] | |||||
Share issued for cash | $ 150,000,000 | ||||
Share issued for cash, shares | shares | 225,000 | ||||
Subsequent Event [Member] | Sugar Rush, Inc [Member] | Nug Avenue, Inc. [Member] | |||||
Percentage of operations acquired | 70.00% | ||||
Operations acquired consideration | $ 560,000 | ||||
Percentage of revenues and profits receivable | 70.00% | ||||
Subsequent Event [Member] | Convertible Promissory Note [Member] | Accredited Investor [Member] | |||||
Original principal amount | $ 69,300 | ||||
Interest rate per annum | 8.00% | ||||
Debt instrument original issue discount | $ 6,300 | ||||
Debt instrument term | 360 days | ||||
Debt instrument conversion percentage | 60.00% | ||||
Debt instrument trading days | Integer | 20 | ||||
Debt instrument conversion amount | $ 258,300 | ||||
Subsequent Event [Member] | Convertible Promissory Note [Member] | Accredited Investor [Member] | Common Stock [Member] | |||||
Debt instrument conversion shares issued | shares | 389,256,291 |